2014 - Singapore Press Holdings
Transcription
2014 - Singapore Press Holdings
ANNUAL REPORT 2014 CORPORATE PROFILE Singapore Press Holdings (SPH) is Asia’s leading media organisation, engaging minds and enriching lives across multiple languages and platforms. SPH has 19 titles licensed under the Newspaper Printing and Presses Act, of which nine are daily newspapers across four languages. Every day, 2.8 million individuals or 69 per cent of people above 15 years old, read one of our publications. The online editions of our main newspapers enjoy over 360 million page views with 23 million unique visitors every month. Our success is built on the long history and rich heritage of our two flagship newspapers – The Straits Times, the English-language daily and Lianhe Zaobao, the Chineselanguage daily. The other two dailies, Berita Harian and Tamil Murasu, remain the staple for the Malay-speaking and Tamil-speaking communities respectively. These four major newspapers, together with The New Paper and The Business Times, also provide online news to SPH’s Internet portal, AsiaOne. Besides print, SPH newspapers are also available on online, smartphone and tablet platforms. Apart from AsiaOne, SPH’s online and new media initiatives include ST701, the leading online marketplace for jobs (STJobs), property (STProperty), cars (STCars) and general classifieds (STClassifieds); Stomp (Straits Times Online Mobile Print), a citizen journalism and social-networking website that connects, engages and interacts with readers on the web and via the Stomp mobile app; omy.sg, a bilingual news and interactive portal and SPH Razor, the video content solutions provider for SPH, producing engaging videos for SPH Razor, SPH digital websites and mobile applications. In the radio business, SPH Radio operates entertainment stations UFM 100.3 in Mandarin, as well as Kiss92 and HOT FM91.3 in English. SPH has a 20 per cent stake in MediaCorp TV Holdings Pte Ltd, which operates free-to-air channels 5, 8 and U, and a 40 per cent stake in MediaCorp Press Ltd, which publishes the free newspaper, Today. SPH’s events subsidiary Sphere Exhibits organises innovative consumer and trade events and exhibitions as well as large scale conferences. SPH also has a leading digital out-ofhome platform called SPHMBO, comprising a network of large outdoor LED billboards at strategic locations (e.g. Raffles Place, Orchard Road etc) and indoor screens across shopping centres and banks islandwide. It also operates large format billboards, banners and other static media platforms, including the iconic facade at Rendezvous Hotel, mallscape advertising at Marina Bay Link Mall, underground linkways at The Sail, One Raffles Quay and newly launched Ocean Financial Centre as well as other popular sites in the Central Business District. SPH’s subsidiaries, Straits Times Press and Focus Publishing, produce quality books and periodicals in English and Chinese respectively. SPH REIT was successfully listed on 24 July 2013. SPH REIT is a Singapore-based REIT established principally to invest, directly or indirectly, in a portfolio of income-producing real estate which is used primarily for retail purposes in Asia-Pacific, as well as real estate-related assets. SPH REIT is managed by SPH REIT Management Pte Ltd, which is a wholly-owned subsidiary of SPH. The initial portfolio of SPH REIT comprises the following two high quality and well located commercial properties in Singapore: • Paragon, a premier upscale retail mall and medical suite/ office property, well known for its upscale mall housing many luxury brands, located in the heart of Orchard Road; and • The Clementi Mall, a mid-market suburban mall located in the centre of Clementi town, an established residential estate in the west of Singapore. The Seletar Mall is SPH’s latest retail development and is expected to open at the end of 2014. SPH’s wholly-owned subsidiary, Times Development Pte Ltd, also developed a 43-storey upmarket residential condominium, Sky@eleven, at Thomson Road. SPH is an active corporate citizen and supports a wide range of causes, ranging from arts and culture, nature and conservation, charity and community, education and sports. It also has an SPH Foundation and SPH Staff Volunteers Club to boost its extensive corporate social responsibility efforts. More information can be found on www.sph.com.sg OUR BRAND STATEMENT To be Asia’s Leading Media Organisation, Engaging Minds and Enriching Lives, Across Multiple Languages and Platforms. OUR CORE VALUES (EXCITE) Excellence Customer-focus Integrity Teamwork Embracing Change Contents Group at a Glance 2 Businesses and Products under the SPH Group 3 Organisation Structure 14 Group Financial Highlights 15 Chairman’s Statement 16 Board of Directors 20 Further Information on Board of Directors 24 Senior Management 28 CEO’s Overview of Group Operations 34 SPH 30th Anniversary Celebrations 42 Significant Events 45 Awards & Accolades 51 PRINT S T E A D FA S T@ PROPERTIES EVENTS AND OUT-OF-HOME ADVERTISING BROADCASTING This year marks a significant milestone in our history as we commemorate our 30th anniversary. Throughout our dynamic journey, we have remained steadfast in our commitment to Engaging Minds and Enriching Lives. Not one to rest on our laurels and achievements, we aspire to be a trendsetter, driving our business with precision and determination. Just as the different facets converge into a kaleidoscope of vibrant colours, we continue to evolve and adapt to the ever-transforming media landscape in our constant endeavour to serve our stakeholders. SPH Newspapers Readership Trends 56 Daily Average Newspapers Circulation 57 Financial Review 58 Value Added Statement 61 Investor Relations 62 Investor Reference 64 Corporate Information 66 Sustainability Report 67 Corporate Governance Report 71 Risk Management 86 Financial Contents 100 DIGITAL/ MOBILE 2 Singapore Press Holdings GROUP AT A GLANCE NEWSPAPERS SPH has 19 titles licensed under the Newspaper Printing and Presses Act, of which nine are daily newspapers across four languages. 2.8 million individuals or 69 per cent of people above 15 years old, read one of SPH’s news publications. MAGAZINES SPH Magazines publishes over 100 magazine titles in Singapore and the region, covering a broad range of interests from fashion, bridal, society, automobiles, parenting, décor and information technology. PRINT BOOK PUBLISHING Straits Times Press, SPH’s book-publishing arm and Focus Publishing, produce quality books and periodicals in English and Chinese. INTERNET AND NEW MEDIA SPH’s online editions of its key newspapers enjoy over 360 million page views with 23 million unique visitors every month. SPH has also expanded into other new media initiatives such as ST701, Stomp, omy.sg and SPH Razor. DIGITAL/ MOBILE EVENTS AND OUT-OF-HOME ADVERTISING SPH’s events subsidiary Sphere Exhibits organises innovative consumer and trade events and exhibitions, as well as large scale conferences. SPH also has a leading digital out-of-home platform called SPHMBO. EVENTS AND OUT-OF-HOME ADVERTISING PROPERTIES SPH REIT, comprising Paragon and The Clementi Mall, is managed by SPH REIT Management Pte Ltd. The Seletar Mall is expected to open end 2014. Times Development Pte Ltd also developed Sky@eleven at Thomson Road. PROPERTIES BROADCASTING SPH Radio operates UFM 100.3, as well as Kiss92 and HOT FM91.3. SPH has a 20 per cent stake in MediaCorp TV Holdings Pte Ltd, which operates free-to-air channels 5, 8 and U, and a 40 per cent stake in MediaCorp Press Limited. BROADCASTING Annual Report 2014 3 BUSINESSES AND PRODUCTS UNDER THE SPH GROUP NEWSPAPERS Berita Harian Berita Minggu Gen G i3 IN Lianhe Wanbao Lianhe Zaobao Little Red Dot My Paper (bilingual) Shin Min Daily News tabla! Tamil Murasu The Business Times The Business Times Weekend The New Paper The New Paper on Sunday The Straits Times The Sunday Times Thumbs Up Thumbs Up Junior Thumbs Up Little Junior Zaobao Sunday zbCOMMA MAGAZINES 24:7 Action Asia Ascent Asia-Pacific Boating AsiaSpa BizQ BMW China Boating CLEO Singapore Cohort Cosmopolitan Singapore Eh! Female Female Brides Glam Glam Lelaki Golf Digest Singapore HardwareMAG Harper’s BAZAAR Singapore Health No. 1 Her World Her World Brides Her World Fit & Fab Home & Decor ICON ICON Moments ICON Weddings JET Asia-Pacific LP Luxury Properties Marie Claire Men’s Health Singapore NSMan Nanyou Nuyou Nuyou Time Pinnacle Savour Shape Singapore SilverKris Simply Her Singapore Nautilus SO/HO Sparkle Stamford Life The Finder The Johnnie Walker House Edit The Peak The Peak Gourmet & Travel The Peak Timepieces The Singapore Women’s Weekly Torque Toyota UW Victory Trail Wellness No. 1 Winning Post Young Families Young Parents Young Parents Preschool Guide ZbBz * SPH has more than 100 magazine titles including contract and licensed titles in the region. BOOK PUBLISHING / CONTRACT PUBLISHING Focus Publishing Straits Times Press INTERNET AND NEW MEDIA 701search.com asiaone.com ayosdito.ph beritaharian.sg berniaga.com btinvest.com.sg businesstimes.com.sg chope.com.sg chotot.vn femalebridesonline.com femalemag.com.sg golfdigestsingapore.com hardwaremag.com hardwarezone.com.sg herworldplus.com homeanddecor.com.sg hotfm.sg iconsingapore.com.sg kiss92.sg lollipop.sg luxury-insider.com menshealth.com.sg mudah.my mindchamps.org mycarforum.com mypaper.sg nuyou.com.sg omy.sg quotz.com.sg razor.tv sgcarmart.com shape.com.sg shareinvestor.com sheshops.com simplyher.com.sg soshiok.com st701.com stcars.sg stclassifieds.sg stdirectory.sg stjobs.sg stomp.com.sg stproperty.sg straitstimes.com tamilmurasu.com.sg thepeakmagazine.com tnp.sg torque.com.sg ufm1003.sg wanbao.com.sg youngparents.com.sg zaobao.com (accessible from China and Greater China) zaobao.sg EVENTS AND OUT-OF-HOME ADVERTISING BizLink Exhibition Services Buzz Pods Exhibits Inc Sphere Conferences Sphere Exhibits SPHMBO PROPERTIES Retail Paragon SPH REIT The Clementi Mall The Seletar Mall Residential Sky@eleven BROADCASTING SPH Radio HOT FM91.3 Kiss92 UFM 100.3 Making Headlines. PRINT As a driving force of news and information, SPH’s print segment continues to do well despite the increasingly challenging media landscape. The Straits Times remained the best-read newspaper in Singapore, while Chinese daily Lianhe Zaobao rose to second spot to secure SPH’s position as a leading brand of choice, according to the 2013 Nielsen Media Index Report. Online to Greater Things. DIGITAL / MOBILE The rapid proliferation of technology has enabled consumers to access information from varied digital platforms. To stay ahead of changing times, SPH’s newly set-up Digital Division now offers a comprehensive suite of news platforms and online media solutions to target and engage readers and advertisers alike. Hitting the Right Notes. BROADCASTING SPH’s broadcast business has been effectively reaching out to the public through its stable of radio stations. This year, SPH Radio performed exceptionally well as the latest Nielsen radio survey saw Kiss92 emerging as Singapore’s No. 1 English music station based on percentage share of listenership. The survey also certified SPH Radio’s wide appeal, as all its radio stations made it to the Top 10 positions. An Eventful Year. EVENTS AND OUT-OF-HOME ADVERTISING Tapping into the potential of events and exhibitions, SPH’s events arm Sphere Exhibits continued its regional foray covering topics and business interests in high growth sectors. Sphere Exhibits gained significance as a MICE player in Malaysia when it acquired several established trade and consumer exhibitions this year, as part of its overseas expansion. Building on Our Strengths. PROPERTIES SPH listed its property arm SPH REIT to leverage on growth prospects in the real estate arena. Located in the heart of Orchard Road, Paragon is the premier upscale retail mall and medical suite/office property that remains a popular destination for consumers and business owners. The Clementi Mall is a five-storey retail podium located in the heartlands that draws large volumes of shoppers. Both properties enjoy 100 per cent occupancy rates. SPH’s latest development, The Seletar Mall, is expected to open at the end of 2014. 14 Singapore Press Holdings ORGANISATION STRUCTURE BOARD OF DIRECTORS AUDIT COMMITTEE INTERNAL AUDIT CHIEF EXECUTIVE OFFICER CHINESE NEWSPAPERS MEDIA STRATEGY AND ANALYTICS ENGLISH & MALAY NEWSPAPERS CIRCULATION MARKETING SUBSIDIARIES PRODUCTION ADMINISTRATION CORPORATE COMMUNICATIONS & CSR CORPORATE DEVELOPMENT FINANCE SUPPORT SERVICES HUMAN RESOURCES INFORMATION TECHNOLOGY SECRETARIAT / LEGAL RISK MANAGEMENT Annual Report 2014 15 GROUP FINANCIAL HIGHLIGHTS for the financial year ended August 31, 2014 2014 S$’000 2013 S$’000 1,215,184 1,239,452 (2.0) Operating profit# 348,963 369,288 (5.5) Profit before taxation 528,391 489,099 8.0 Profit after taxation 470,736 434,302 8.4 Non-controlling interests (66,450) Profit attributable to shareholders 404,286 430,954 Shareholders’ interests 3,687,095 3,536,480 4.3 Total assets 6,651,396 6,373,354 4.4 Total liabilities 2,255,213 2,157,648 4.5 Non-controlling interests 709,088 679,226 4.4 Dividends declared for the financial year 339,412 646,446 % % Operating margin 28.7 29.8 (1.1) Return on operating revenue 33.3 34.8 (1.5) Return on shareholders’ funds 11.0 12.2 (1.2) Operating revenue Profitability ratios ^ (3,348) Per share data Change % NM (6.2) (47.5) % points % Net assets attributable to shareholders (S$) 2.28 2.19 4.1 Profit attributable to shareholders (S$) 0.25 0.27 (7.4) Dividends declared for the financial year (cents)## 21 40 (47.5) Dividend cover for the financial year (times) 1.2 0.7 71.4 S$ S$ % 203,756 201,242 1.2 Per $ employment costs 2.26 2.42 (6.6) Per $ investment in property, plant and equipment (before depreciation) 0.87 0.88 (1.1) Per $ operating revenue 0.72 0.71 1.4 Value added Per employee This represents the recurring earnings of the media, property and other businesses. # ^ Computed based on recurring earnings. ## Dividends for both FY 2014 and FY 2013 are tax-exempt (one-tier). The proposed final dividend of 14 cents per share, comprising a normal dividend of 8 cents per share and a special dividend of 6 cents per share, is subject to approval by shareholders at the Annual General Meeting on December 2, 2014. FY 2013 dividends included a special dividend of 18 cents per share paid pursuant to the establishment of SPH REIT. NM Not Meaningful. 16 Singapore Press Holdings CHAIRMAN’S STATEMENT SPH has turned in a creditable performance in Financial Year 2013/2014 with a net profit of $404.3 million The past financial year saw a series of worrying events that impacted the world economy and businesses everywhere. Adverse developments in the Ukraine and the Middle East, on top of domestic policies to ease asset price inflation and restructure the economy, affected economic conditions in Singapore. Inevitably, this took a toll on SPH’s performance. Despite these adverse conditions, SPH managed to turn in a creditable performance in Financial Year 2013/2014 with a net profit of $404.3 million. This represents a 6.2 per cent decrease compared to the last financial year. Group recurring earnings of $349.0 million was lower by $20.3 million, mainly attributable to lower contribution from the Newspaper segment. Higher contributions from property, magazine, exhibitions, radio and online classified ameliorated the drop. Revenue from the Newspaper and Magazines business was $931.7 million, a $59.5 million or 6.0 per cent decline from last year. This was attributable to declines in both advertising revenue ($51.3 million or 6.8 per cent) and circulation revenue ($9.7 million or 4.9 per cent). SPH celebrated its 30 th anniversary as a merged, multi-lingual media company, with a variety of events and activities to engage the public. These included the SPH Lucky 30 Draw and a birthday lunchtime concert at the newly renovated Victoria Concert Hall as part of SPH Gift of Music Series. I am most proud of our ‘See The Big Picture’ campaign, where British artist and autistic savant Stephen Wiltshire was commissioned to draw the panoramic cityscape of Singapore at Paragon over a five-day period. The completed artwork was presented to President Tony Tan Keng Yam in September, as SPH’s gift to the nation ahead of next year’s 50th anniversary of Singapore’s independence. Enhancing our Core Media Products Despite the growing number of alternative news sources and rapidly changing consumer habits, our media products continued to demonstrate adaptability and resilience, and remained relevant to our readers, advertisers and all our other stakeholders. All of our newsrooms have undergone major transformations to offer integrated print plus digital offerings throughout the day. A group-wide organisational review also yielded significant efficiency gains across the board. A new Media Strategy and Analytics Division was also set up to strengthen our analytics capability. I must commend the management team and our editors for their determined effort to reinvigorate our core media business. Annual Report 2014 Despite the growing number of alternative news sources and rapidly changing consumer habits, our media products continued to demonstrate adaptability and resilience, and remained relevant to our readers, advertisers and all our other stakeholders. Newspapers SPH’s total newspaper circulation, covering both print and digital editions, averaged 1.07 million copies per day, a year-on-year increase of 1.7 per cent. This was achieved by continuing to excel in print while strengthening our presence in the digital space. The total daily average circulation (print and digital) of The Straits Times and The Sunday Times registered year-on-year growth of 2.2 per cent to 459,300. Lianhe Zaobao achieved year-on-year increase of 6.3 per cent to 183,300 total daily average circulation. The Business Times grew 14.2 per cent year-on-year to 48,200 total daily average circulation copies. To keep pace with changing trends, several newspapers underwent revamps, including Lianhe Zaobao and Lianhe Wanbao. The Straits Times enhanced its digital offerings and made further gains in its all-in-one package. Berita Harian introduced its smartphone and tablet apps along with its new website, while The New Paper launched new apps for iPhone 17 and Android smartphones to mark the paper’s 25th anniversary. These efforts and other innovations demonstrate our desire to continue to invest in our core products and deliver improved offerings to our customers. Magazines SPH Magazines maintained its dynamism in a crowded magazine market and turned in record-high profits. It won multiple awards and accolades for sterling editorial content, outstanding design and creative solutions. The growing number of digital editions of our magazines - at last count 70 of our magazines have launched digital editions - will continue to complement our print offerings. With presence in Malaysia, Hong Kong, China, India, Indonesia, Thailand, the Philippines and Vietnam, we hold a leading position in magazine publishing in Asia, with a suite of titles - our own titles such as Her World, our flagship in the women’s segment, licensed titles such as Men’s Health, as well as contract titles such as SilverKris. 18 Singapore Press Holdings CHAIRMAN’S STATEMENT Digital A new Digital Division was set up earlier this year to group together our full spectrum of standalone digital offerings - from Asiaone and Stomp to SPH Razor. The division has also established an SPH network and aims to be a one-stop analytics-driven solution to advertisers. The Group’s digital technology resources have also been consolidated, with the aim of building up our in-house capability. The Group’s latest digital offerings, together with others launched in the past, show SPH’s commitment to offer all our news and media products to consumers digitally - anywhere, anytime and on any device. Beyond Singapore, our forays into online marketplaces continued to make headway. In September last year, 701Search, which operates the online classified companies Mudah.my (Malaysia), Berniaga.com ( I n d o n e s i a ) , Ayo s d i t o. p h ( T h e Philippines) and Chotot.vn (Vietnam), welcomed Telenor ASA, Norway’s leading telecommunications operator, as a third joint-venture partner in addition to Schibsted, the Norwegian media group. With this strategic move, 701Search is able to reap synergies leveraging on Telenor’s established Asian telecommunications network, mobile internet capabilities and subscriber base. Growing our Adjacent Businesses Our adjacent businesses have made good progress. On the property front, our third property offering, The Seletar Mall, is slated to open at the end of the year. Paragon, our premier upscale retail mall and medical suite/office property located in the heart of Orchard Road, and The Clementi Mall, a suburban mall in Clementi, were injected into SPH REIT and listed on the Singapore Stock Exchange. The REIT’s share price has performed very well, reflecting the good performance of the business with its quarterly distribution consistently exceeding its forecast. Sphere Exhibits, SPH’s events and exhibitions arm, organised more than 30 exhibitions and conferences in Singapore, Malaysia, Myanmar and the Philippines. Through its subsidiary BizLink Exhibition Services, it also launched the inaugural International Franchise & Business Opportunities in Vietnam this year. The Group’s radio subsidiary, SPH Radio, had a banner year. Kiss92, the new station aimed at female listeners, made an immediate impact since its launch and took pole position in terms of share of listenership in the latest Nielsen ratings. Radio looks set to become a profitable medium in our integrated media offerings. We will continue to pursue opportunities that position the Group for sustainable growth and value creation. We set up a $100 million New Media Fund to invest in media-related businesses to stimulate growth. accolade include business daily The Business Times and Chinese-language evening daily Shin Min Daily News. SPH also won three awards for excellence and three honourable mentions at The Society of Publishers in Asia 2014 Awards for Editorial Excellence. The many awards are testament to our commitment to high standards and top quality. Besides excelling in print, our foray into the digital space also proved fruitful. The Straits Times Communities was awarded 2014 Digital Publishing Innovation of the Year by Pacific Area Newspaper Publishers’ Association (PANPA). I want to thank our team of dedicated staff who worked tirelessly to achieve SPH is committed to enhancing long-term shareholder value through constantly pursuing growth opportunities. It is the company’s philosophy to reward loyal shareholders with a steady total return, in appreciation of their support over the years. To enable a swift response to opportunities as they arise, we have been maintaining investible funds managed with a mandate for capital preservation. Returns are expected to commensurate with this risk profile. For the year, the return on the Group’s portfolio investments was 4.5 per cent, a creditable performance amidst the low interest rate environment. Awards and Accolades As Asia’s leading media organisation, SPH maintained its record of winning multiple accolades in various fields. Just to name a few, our flagship dailies - The Straits Times, Lianhe Zaobao and Berita Harian - each won a “Best in Print” Silver Award at the 13th Asian Media Awards in April this year. The “Best in Print” awards recognise the daily reproduction and print quality of Asian newspapers. Past winners of this excellence. Human capital is indeed our greatest asset, and we make every effort to recruit, retain and reward our talents. I am also happy that we won our first Gold Award for Best Investor Relations at this year’s Singapore Corporate Awards. Improving the quality of our disclosure and raising our standard of corporate governance, especially in our communication with shareholders and the investing public, is also a key priority. Enhancing Shareholder Value SPH is committed to enhancing long-term shareholder value through constantly pursuing growth opportunities. It is the company’s philosophy to reward loyal shareholders with a steady total return, in appreciation of their support over the years. As SPH celebrates its 30th anniversary, it is worth highlighting that Annual Report 2014 19 the company’s track record of paying dividends has also been unbroken for the last thirty years. This is no mean feat, considering the economic cycles that have hit Singapore and the changing business environment over the years. This is the third year we have embarked on sustainability reporting. We believe that maintaining a good balance between economic, social and environmental performance is imperative in creating long term value for shareholders. 14 cents per share, comprising a Normal Dividend of 8 cents per share and a Special Dividend of 6 cents per share in respect of the financial year ended 31 August 2014. We had earlier declared and paid an interim dividend of 7 cents per share. In line with our strong dividend history, a substantial proportion of our recurring earnings, ranging from 80 per cent to more than 100 per cent, have been distributed to shareholders over the past decade. With the best interests of shareholders in mind, we will continue to assess opportunities of returning surplus cash generated from operations, whilst balancing against the need to invest for the Group’s longer term viability and sustainability. Tribute and Thanks On behalf of the SPH Board, I would like to thank Professor Cham Tao Soon and Mr Sum Soon Lim, who are retiring from the Board at our Annual General Meeting on 2 December. Professor Cham was appointed Deputy Chairman of SPH on 1 March 2004, and Acting Chairman from 1 July 2011 to 1 December 2011. Mr Sum was appointed to the Board on 5 December 2003. Both gentlemen have contributed greatly to steering SPH through challenging times. Throughout the challenges and opportunities presented in the past 30 years, we have remained steadfast and nimble, adapting to new market trends and innovating to stay relevant to all stakeholders. Part of this meant some reorganisation and adjustments to meet future challenges and seek out opportunities for future growth. Corporate Social Responsibility As a responsible corporate citizen, SPH continues to actively engage all segments of the community. Together with our business units, SPH and SPH Foundation have championed a growing diversity of programmes and initiatives to give back to society, and were honoured with the Corporate Platinum Award by the Community Chest and Distinguished Patron of the Arts by the National Arts Council, among other accolades. As part of our 30 th anniversary celebrations, we will be donating $1 million (with government matching under the Care and Share Movement) to 50 charities at our annual charity cheque presentation this November. I would also like to welcome Mr Tan Chin Hwee and Ms Janet Ang, who joined the Board on 1 March 2014 and 17 October 2014 respectively. I am confident that with their rich and diverse experience they will be able to contribute to the Group as we constantly look for new business opportunities to strengthen our core media business. On behalf of the directors, I would like to thank our management, staff, business associates, unions, investors and all other stakeholders for their continuous belief and support to the Company. To reward our loyal shareholders, the Board has proposed a dividend of With the continued support of all stakeholders, I believe that SPH is wellpositioned to overcome obstacles that will come our way as we continue to strive for organisational and business excellence. Lee Boon Yang Chairman 20 Singapore Press Holdings BOARD OF DIRECTORS Lee Boon Yang uLee Boon Yang Chairman Non-Executive and Independent Director Boon Yang was appointed Director of SPH on 1 October 2011. He is the Non-Executive Chairman of Keppel Corporation Limited. He is also Chairman of Keppel Care Foundation Limited, Singapore Press Holdings Foundation Limited, Jilin Food Zone Pte Ltd and Jilin Food Zone Investment Holdings Pte Ltd. He has extensive experience in public service. He served as the Member of Parliament for Jalan Besar and Jalan Besar Group Representation Constituency (GRC) from December 1984 to April 2011. He was the Minister for Information, Communications and the Arts before retiring from political office in March 2009. From 1991 to 2003, he served as Minister in the Prime Minister’s Office, Minister for Defence, Minister for Labour and later Minister for Manpower. Prior to that, he held several public appointments including Senior Minister of State for Defence, National Development and Home Affairs, and Parliamentary Secretary to the Ministers for Environment, Finance, Home Affairs, and Communications and Information. Before entry into politics, he worked as a veterinarian and R&D Officer in the Primary Production Department. He has also worked as the Assistant Regional Director for the US Feed Grains Council, Cham Tao Soon and as Senior Project Manager for the Primary Industries Enterprise Pte Ltd. Boon Yang holds a B.V.Sc Hon (2A) from the University of Queensland. uCham Tao Soon Deputy Chairman Non-Executive and Independent Director Tao Soon was appointed Deputy Chairman of SPH on 1 March 2004, and Acting Chairman from 1 July 2011 to 1 December 2011. He has spent more than 30 years in the academia sector and currently is the Special Advisor of SIM Governing Council. He is also the Chairman of NSL Ltd, Soup Restaurant Group Ltd and Singapore Quality Award (SQA) Council. He served as the Chancellor and Chairman of SIM University from April 2005 to May 2014. He was a Director of United Overseas Bank Ltd, Far Eastern Bank Limited, WBL Corporation Ltd and MFS Technology Ltd; a member of the Council of Presidential Advisors; and Chairman of the Singapore Symphonia Co Ltd and the Nanyang Fine Arts Foundation Ltd. Tao Soon holds a Bachelor of Engineering (Civil, Honours) from the University of Malaya, a Bachelor of Science (Mathematics, Honours) from the University of London and a Doctorate of Philosophy (Fluid Mechanics) from Cambridge University. Alan Chan Heng Loon uAlan Chan Heng Loon Chief Executive Officer Executive and Non-Independent Director Alan joined SPH as its Group President on 1 July 2002, and was appointed Chief Executive Officer on 1 January 2003. He is responsible for managing the group’s portfolio of businesses which include newspapers, magazines and book publishing; Internet & mobile; broadcasting; events and out-of-home advertising and properties. Alan is currently on the boards of Singapore Press Holdings Ltd and its subsidiaries including SPH REIT Management Pte Ltd, MediaCorp TV Holdings Pte Ltd and MediaCorp Press Ltd. He currently chairs the External Review Panel for SAF Safety and the SingaporeChina Foundation. He is also a member of the Public Service Commission (PSC), the Singapore Symphony Orchestra Council and the Centre for Liveable Cities’ Distinguished Advisors’ Panel; and a Director of Business China and the Lee Kuan Yew Fund for Bilingualism. He also serves on the boards of the Federation Internationale of Periodics Publishers and the World Association of Newspapers and News Publishers – IFRA (WAN-IFRA). He chaired the Council that revised the Code of Corporate Governance in 2012. Annual Report 2014 Bahren Shaari Before joining SPH, Alan was an Administrative Officer in the Civil Service. He has worked in the Government for 25 years and some of his previous appointments included Permanent Secretary of the Ministry of Transport, Deputy Secretary of the Ministry of Foreign Affairs, Principal Private Secretary to then Senior Minister Lee Kuan Yew and Director of Manpower, Ministry of Defence. Alan holds a Diplome d’Ingenieur from the Ecole Nationale de l’Aviation Civile, France and MBA (with Distinction) from INSEAD, France. He is a President’s Scholar and was conferred the Public Administration Medal (Gold and Silver) and Meritorious Service Medal for his contributions to public service. In 2009, he was selected by INSEAD as “one of 50 Alumni who changed the world”. uBahren Shaari Non-Executive and Independent Director Bahren was appointed to the Board on 1 April 2012. He is the Managing Director and Marketing Head of South East Asia, Bank of Singapore, and has more than 20 years of private banking experience in global financial institutions. Prior to joining Bank of Singapore, he was Managing Director of UBS AG Wealth Management where he headed the South East Asia and Australia Marketing team. He is active in public service and was a board member of the Maritime Port Authority of Singapore for Chong Siak Ching 11 years. In 2008, he was conferred the Public Service Medal by the President of Singapore. Bahren graduated with a Bachelor of Accountancy from the National University of Singapore. He attended the Advance Management Program of Wharton Business School and Columbia University. uChong Siak Ching Non-Executive and Independent Director Siak Ching was appointed a Director of SPH on 22 October 2010. She is the Chief Executive Officer and a Board Director of the National Gallery Singapore. She was recognised as the ‘Outstanding CEO of the Year’ in the Singapore Business Awards 2009. She is also a Director of Jurong Health Services Pte. Ltd. and Singapore-India Partnership Foundation, a member of the National Arts Council, NUS Board of Trustees and Yale-NUS College Governing Board. She was President and Chief Executive Officer of Ascendas Pte. Ltd and served in the Ascendas group of companies from 2000 to 2013. Prior to this, she was Deputy Chief Executive Officer of JTC Corporation from 2000 to 2001. Siak Ching, a licensed valuer, graduated from the National University of Singapore (NUS) with an Honours Degree in Estate Management and was awarded a Gold Medal by the Singapore 21 Ng Ser Miang Institute of Surveyors and Valuers. She also has a Masters in Business Administration from NUS and has completed the Advance Management Program at Harvard Business School. She was conferred a Distinguished Alumni Award by NUS in the Faculty of Architecture and Building Management in 1999. In 2009, she was again conferred a NUS Distinguished Alumni Service Award in recognition of her unwavering commitment and service to her alma mater. uNg Ser Miang Non-Executive and Independent Director Ser Miang joined the SPH Board on 1 August 2007. He is the Chairman of TIBS International Pte Ltd and a Director of Yanlord Land Group Ltd. He was a Director of TIBS Ltd, SMRT Ltd, Biosensors International Group Ltd, International Factors (Singapore) Ltd, Transpac Industrial Holdings Limited, WBL Corporation Ltd and NTUC Choice Homes Co-operative Limited. He was the Chairman of NTUC Fairprice Co-operative Limited and NTUC Fairprice Foundation Ltd. Ser Miang is Singapore’s non-resident Ambassador to the Kingdom of Norway, Chairman of the Singapore Olympic Foundation, a member of the International Olympic Committee (IOC) and Chairman of the IOC Finance Commission. He was a former Nominated Member of Parliament and a former non-resident Ambassador to the 22 Singapore Press Holdings BOARD OF DIRECTORS Quek See Tiat Sum Soon Lim Republic of Hungary. He was Chairman of the Inaugural Youth Olympic Games in Singapore in 2010. He was Vice President of IOC from 2009 to 2013. See Tiat graduated with Honours (Second Class Upper) in Economics from the London School of Economics & Political Science. He is also a Fellow with the Institute of Chartered Accountants in England and Wales. He was conferred the Public Service Medal in 2009. He was named Outstanding Chief Executive of the Year 1992. In addition to the Public Service Star in 1999, he was conferred the Meritorious Service Medal (Pingat Jasa Gemilang) by the Singapore Government for the National Day Awards in 2010. He was also conferred the Meritorious Award Commander’s Cross by the President of Hungary in 2012. Ser Miang holds a BBA (Honours) from the University of Singapore. uQuek See Tiat Non-Executive and Independent Director See Tiat joined the SPH Board on 1 September 2013. From 1 July 1987 to 30 June 2012, See Tiat was a Partner and subsequently Deputy Chairman of PricewaterhouseCoopers LLP. He has extensive audit and business advisory experience, and has been involved in planning, executing and managing audits of large public listed companies in Singapore. See Tiat is the Chairman of the Building and Construction Authority and serves on the boards of the Monetary Authority of Singapore, Energy Market Authority, Singapore Technologies Engineering Ltd and Neptune Orient Lines Ltd. uSum Soon Lim Non-Executive and Independent Director Soon Lim was appointed to the Board on 5 December 2003. He is the Chairman of Cathay International Holdings Ltd and Bright Vision Hospital, and a Director of Singapore Technologies Telemedia Pte Ltd, STT Communications Ltd and National Neuroscience Institute of Singapore Pte Ltd. He has also served on the boards of Yantai Raffles Shipyard Ltd, Eastern Health Alliance Pte Ltd, Changi General Hospital Pte Ltd, Singapore National Eye Centre Pte Ltd, National Heart Centre of Singapore Pte Ltd, KK Women’s and Children’s Hospital Pte Ltd and Times Development Pte Ltd. He was conferred the Public Service Medal for his contributions to public service. Soon Lim received a B.Sc. (Honours) in Production Engineering from the University of Nottingham, England. Tan Chin Hwee uTan Chin Hwee Non-Executive and Independent Director Chin Hwee was appointed a Director on 1 March 2014. He is the founding partner and a Director of Apollo Management Singapore Pte Ltd. He is a Director of Keppel REIT Management Limited (as Manager of Keppel REIT), Lien Aid Limited (Singapore) and KK Health Endowment Fund; and President and Director of CFA Singapore. He is also a member of the Panel for Government Parliamentary Committee for Finance and Trade and Industry and sits on various not-for-profit boards, including the Advisory Panel for Volunteer Youth Corp, Ministry of Community, Culture and Youth. Chin Hwee is an Adjunct Professor in a number of universities. Chin Hwee was a Managing Director at Amaranth Advisors. Chin Hwee holds a Bachelor of Accountancy (Second Class Upper Honours) from Nanyang Technological University, and a MBA from Yale University. He completed a postgraduate course at Harvard Kennedy School. He is a Chartered Financial Analyst (CFA) and is both an Australian and Singapore registered Certified Public Accountant (CPA). Chin Hwee was honoured as a World Economic Forum Young Global Leader 2010 and is the winner of the Singapore 2013 Distinguished Financial Industry Certified Professional (FICP) Award. He was also voted by the Hedge Fund Annual Report 2014 Tan Yen Yen Journal as among the emerging top 40 absolute return investors globally and was also named as Best Asia Credit Hedge Fund Manager by Hong Kongbased publication, The Asset. uTan Yen Yen Non-Executive and Independent Director Yen Yen joined the Board on 1 April 2012. She is currently the Regional VicePresident and Managing Director of SAS South Asia Pacific, SAS Institute Inc. She is the Chairman of the Singapore Science Centre, a member of the Defence Science & Technology Agency (DSTA) Board, and Director of Cap Vista Pte Ltd and Gemalto NV. Additionally, she sits on the Board of Advisors of the Singapore Institute of Directors. She is a member of the National University of Singapore’s School of Computing; and the Ministry of Communications & Information’s Infocomm Media Masterplan’s Talent and Manpower Work Committee. Prior to joining SAS, she was Senior Vice President, Applications, Oracle Corporation Asia Pacific, and Vice President and Managing Director for Hewlett-Packard Singapore. Yen Yen has played an active role in Singapore’s infocomm industry, having served as Chairman of the Singapore Infocomm Technology Federation and Deputy Chairperson on the Ministry of Information, Communications and the Arts (MICA) Internet and Media Advisory Committee. She was also a member 23 Lucien Wong Yuen Kuai Janet Ang Guat Har of the Government Parliamentary Council of MICA and the Economic Strategies Committee’s IT Working Group subcommittee and the Singapore Institute of Management’s International Academic Panel. She is in the Ministry of Culture, Community and Youth’s High Performance Sports Performance & Selection Sub-Committee that steers the development of High Performance Sports in Singapore. Lucien holds a Bachelor of Law (2nd Class Upper) Honours degree from the University of Singapore and was called to the Singapore Bar in 1979. Yen Yen has a degree in Computer Science from the National University of Singapore and an Executive MBA degree with Helsinki School of Economics Executive Education. uLucien Wong Yuen Kuai Non-Executive and Independent Director Lucien was appointed a Director on 15 October 2009. He is the Chairman and Senior Partner of the law firm, Allen & Gledhill LLP, and has extensive experience in legal practice, specialising in banking, corporate and financial services work. He is currently Chairman of the Maritime and Port Authority of Singapore and Singapore International Arbitration Centre. He is a member of the Board of Trustees of Singapore Business Federation, and a Director of Singapore Health Services Pte Ltd and Singapore International Mediation Centre Limited. He also sits on the boards of Temasek Holdings (Private) Limited, Hap Seng Plantations Holdings Berhad and Singapore Airlines Limited. uJanet Ang Guat Har Non-Executive and Independent Director Janet was appointed a Director on 17 October 2014. Janet has been the Managing Director of IBM Singapore since July 2011. She joined IBM in 1982 as a Systems Engineer after graduating from the National University of Singapore (“NUS”) Business School. She spent seven years in China with IBM Greater China and Lenovo before returning to Singapore to assume her current role. Janet serves on various committees in the community. She sits on the boards of the Public Utilities Board (PUB) and the InfoComm Development Authority (iDA). She also serves as board member of the NUS Alumni Advisory Board, Caritas Singapore as well as Employers’ Alliance and the Institute of Systems Science. She is also a committee member of the Women’s Health Advisory Council (WHAC), a Senior Member of the Singapore Computer Society (SCS) and President of the International Women’s Forum (Singapore chapter). She was also a committee member of the recent Medishield Life Review Committee. Janet holds a Business Administration (Hons) degree from the NUS Business School. 24 Singapore Press Holdings FURTHER INFORMATION ON BOARD OF DIRECTORS uLee Boon Yang Chairman Non-Executive and Independent Director uCham Tao Soon Deputy Chairman Non-Executive and Independent Director uAlan Chan Heng Loon Chief Executive Officer Executive and Non-Independent Director Date of first appointment as a director: 1 October 2011 Date of last re-election as a director: 29 November 2013 Date of first appointment as a director: 1 March 2004 Date of last re-election as a director: 29 November 2013 Date of first appointment as a director: 1 July 2002 Date of last re-election as a director: 30 November 2012 Board Committee(s) served on: Board Committee(s) served on: Board Committee(s) served on: • Executive Committee (Chairman) • Nominating Committee • Remuneration Committee (Chairman) • Executive Committee • Nominating Committee (Chairman) • Executive Committee Current Directorships/ Principal Commitments Current Directorships/ Principal Commitments • NSL Ltd* (Chairman) • Keppel Corporation Limited* • Soup Restaurant Group Ltd* (Chairman) (Chairman) • Keppel Care Foundation Limited • Singapore Quality Award Council (Chairman) (Chairman) • Singapore Press Holdings • The Tan Chin Tuan Foundation Foundation Limited (Director) (Chairman) • Jilin Food Zone Pte Ltd Directorships over the past 3 years (Chairman) (1/9/11-31/8/14) • Jilin Food Zone Investment Holdings Pte Ltd • Singapore-China Foundation Ltd (Chairman) (Chairman) • SIM University’s Board of Trustees Directorships over the past 3 years (Chairman & Chancellor) (1/9/11-31/8/14) • United Overseas Bank Limited* (Director) Nil • Far Eastern Bank Limited (Director) * Public-listed company • WBL Corporation Ltd* (Director) • MFS Technology Ltd* (Chairman) • Nanyang Fine Arts Foundation Ltd (Chairman) * Public-listed company Current Directorships/ Principal Commitments • SPH REIT Management Pte Ltd - as Manager of SPH REIT* (Director) • Singapore Press Holdings Foundation Limited (Director) • MediaCorp Press Ltd (Director) • MediaCorp TV Holdings Pte Ltd (Director) • Business China (Director) • Singapore-China Foundation Ltd (Chairman) • Public Service Commission (Member) • Lee Kuan Yew Fund for Bilingualism (Member) • Centre for Liveable Cities (Member) • Singapore Symphony Orchestra Council (Member) • External Review Panel for SAF Safety (Chairman) Directorships over the past 3 years (1/9/11-31/8/14) • Singapore Power Ltd (Director) • SP PowerAssets Ltd (Chairman) • PowerGas Ltd (Chairman) * Public-listed company Annual Report 2014 25 uBahren Shaari Non-Executive and Independent Director uChong Siak Ching Non-Executive and Independent Director uNg Ser Miang Non-Executive and Independent Director Date of first appointment as a director: 1 April 2012 Date of last re-election as a director: 30 November 2012 Date of first appointment as a director: 22 October 2010 Date of last re-election as a director: 30 November 2012 Date of first appointment as a director: 1 August 2007 Date of last re-election as a director: 29 November 2013 Board Committee(s) served on: Board Committee(s) served on: Board Committee(s) served on: • Audit Committee (Chairman) • Remuneration Committee@ • Audit Committee • Nominating Committee • Nominating Committee Current Directorships/ Principal Commitments Nil Directorships over the past 3 years (1/9/11-31/8/14) • Maritime and Port Authority of Singapore (Board Member) @ Appointed on 29 November 2013 Current Directorships/ Principal Commitments Current Directorships/ Principal Commitments • National Gallery Singapore (Chief Executive Officer & Director) • Jurong Health Services Pte. Ltd. (Director) • National University of Singapore (Trustee) • Yale-NUS College Governing Board (Member) • National Arts Council (Council Member) • Singapore-India Partnership Foundation (Director) Directorships over the past 3 years (1/9/11-31/8/14) • Ascendas Pte Ltd (Director) • Standards, Productivity and Innovation Board (SPRING) (Deputy Chairman) • Ascendas Funds Management (S) Limited - as Manager of Ascendas Real Estate Investment Trust* (Deputy Chairman) • Ascendas Property Fund Trustee Pte. Ltd. - as Trustee-Manager of Ascendas India Trust* (Director) • Ascendas Hospitality Fund Management Pte Ltd - as Manager of Ascendas Hospitality Trust* (Director) • Ascendas Hospitality Trust Management Pte Ltd - as TrusteeManager of Ascendas Hospitality Trust* (Director) • Frasers Property (China) Limited*# (Director) • Singapore Business Federation (Deputy Honorary Treasurer) * Public-listed company # Company listed on the Hong Kong Stock Exchange Ltd • TIBS International Pte Ltd (Chairman) • Yanlord Land Group Limited* (Director) • Singapore Olympic Foundation (Chairman) Directorships over the past 3 years (1/9/11-31/8/14) • NTUC Fairprice Co-operative Limited (Chairman) • NTUC Fairprice Foundation Ltd (Chairman) • WBL Corporation Limited* (Chairman) • NTUC Choice Homes Co-operative Limited (Chairman) * Public-listed company 26 Singapore Press Holdings FURTHER INFORMATION ON BOARD OF DIRECTORS uQuek See Tiat Non-Executive and Independent Director uSum Soon Lim Non-Executive and Independent Director uTan Chin Hwee Non-Executive and Independent Director Date of first appointment as a director: 1 September 2013 Date of last re-election as a director: 29 November 2013 Date of first appointment as a director: 5 December 2003 Date of last re-election as a director: 29 November 2013 Date of first appointment as a director: 1 March 2014 Date of last re-election as a director: NA Board Committee(s) served on: Board Committee(s) served on: Board Committee(s) served on: • Audit Committee • Board Risk Committee (Chairman)@ • Executive Committee • Board Risk Committee • Audit Committee@ • Audit Committee@ • Board Risk Committee@ Current Directorships/ Principal Commitments Current Directorships/ Principal Commitments • Singapore Technologies Engineering Ltd* (Director) • Neptune Orient Lines Ltd* (Director) • Building and Construction Authority (Board Member/ Chairman) • Monetary Authority of Singapore (Board Member) • Energy Market AuthorityBoard (Board Member) • Singapore Technologies Telemedia Pte Ltd (Director) • STT Communications Ltd (Director) • National Neuroscience Institute of Singapore Pte Ltd (Director) • Cathay International Holdings Ltd* (Chairman) • Bright Vision Hospital (Chairman) Directorships over the past 3 years (1/9/11-31/8/14) • Workplace Safety and Health Council (Council Member) • PricewaterhouseCoopers LLP (Deputy Chairman) @ Appointed on 29 November 2013 * Public-listed company Directorships over the past 3 years (1/9/11-31/8/14) • Yantai Raffles Shipyard Ltd (Director) • Eastern Health Alliance Pte Ltd (Director) • Changi General Hospital Pte Ltd (Director) • Singapore National Eye Centre Pte Ltd (Director) • National Heart Centre of Singapore Pte Ltd (Director) • KK Women’s and Children’s Hospital Pte Ltd (Director) • Times Development Pte Ltd (Director) @ Appointed on 29 November 2013 * Public-listed company Current Directorships/ Principal Commitments • Apollo Management Singapore Pte Ltd (Director) • Keppel REIT Management Limited - as Manager of Keppel REIT* (Director) • Lien Aid Limited (Singapore) (Director) • KK Health Endowment Fund (Director) • CFA Singapore (President and Director) • Panel for Government Parliamentary Committee for Finance and Trade and Industry (Member) • Advisory Panel for Volunteer Youth Corp, Ministry of Community, Culture and Youth (Member) Directorships over the past 3 years (1/9/11-31/8/14) NA @ Appointed on 1 March 2014 * Public-listed company Annual Report 2014 27 uTan Yen Yen Non-Executive and Independent Director uLucien Wong Yuen Kuai Non-Executive and Independent Director uJanet Ang Guat Har Non-Executive and Independent Director Date of first appointment as a director: 1 April 2012 Date of last re-election as a director: 30 November 2012 Date of first appointment as a director: 15 October 2009 Date of last re-election as a director: 30 November 2012 Date of first appointment as a director: 17 October 2014 Date of last re-election as a director: N.A Board Committee(s) served on: Board Committee(s) served on: Board Committee(s) served on: • Remuneration Committee • Board Risk Committee • Executive Committee • Remuneration Committee • Board Risk Committee@ Nil Current Directorships/ Principal Commitments Current Directorships/ Principal Commitments Current Directorships/ Principal Commitments • IBM Singapore Pte Ltd • Singapore Science Centre (Director) • Hap Seng Plantations (Chairman) • IBM Global Services (Singapore) Holdings Berhad* (Director) • Defence Science & Technology (Director) Agency • International Applications • Singapore Airlines Limited* Solutions Pte Ltd (Director) (Director) • Cap Vista Pte Ltd (Director) • Maritime and Port Authority of (Director) • Public Utilities Board • Gemalto NV@Singapore (Board Member) (Chairman) (Director) • Caritas Singapore • Temasek Holdings (Private) Limited • National University of Singapore’s (Board Member) (Director) School of Computing • Institute of Systems Science (NUS) • Singapore International (Board Member) (Member) Arbitration Centre • TNF Ventures • InfoComm Development (Chairman) (Advisor Mentor) Authority of Singapore • Singapore International Mediation • Singapore Institute of Directors (Board Member) Centre Limited (Director) (Director) • Ministry of Communications & Directorships over the past 3 years • Eastern Development Private Information – Infocomm Media Limited (1/9/11-31/8/14) (Director) Masterplan’s Talent and Manpower • Eastern Development Working Committee Nil Holdings Pte. Ltd. (Member) (Director) • Ministry of Culture, Community • Allen & Gledhill LLP and Youth High Performance (Chairman and Senior Partner) Sports, Performance & Selection • Singapore Health Services Pte Ltd Committee (Director) (Member) • Singapore Business Federation (Trustee) Directorships over the past 3 years (1/9/11-31/8/14) Directorships over the past 3 years (1/9/11-31/8/14) • Singapore infocomm Technology Federation (SiTF) • Linklaters Allen & Gledhill Pte Ltd (Chairman) (Director) • Infocomm Development • Mapletree Commercial Trust Authority of Singapore (iDA) Management Ltd (Director) (Director) • Singapore Institute of Management • Monetary Authority of Singapore International Academic Panel (Board Member) (Member) • Cerebos Pacific Limited* (Director) @ Listed in Amsterdam, Netherlands @ Stepped down on 1 March 2014 * Public-listed company 28 Singapore Press Holdings SENIOR MANAGEMENT Back row from left: Goh Sin Teck, Susan Leng Mee Yin, Warren Fernandez, Sng Ngoi May, Loh Yew Seng, Janice Wu Sung Sung, Chua Boon Ping, Lim Swee Yeow Front row from left: Chua Wee Phong, Deborah Lee Siew Yin, Low Huan Ping, Tony Mallek, Patrick Daniel, Leslie Fong Yin Leong, Ginney Lim May Ling, Lim Jim Koon, Mable Chan Kam Man, Seow Choke Meng Annual Report 2014 29 30 Singapore Press Holdings SENIOR MANAGEMENT uPatrick Daniel Editor-in-Chief, English & Malay Newspapers Patrick was appointed Editor-in-Chief of the English & Malay Newspapers Division of SPH in January 2007. Prior to this, he was Managing Editor of the division from September 2002, and Editor of The Business Times from May 1992. He joined The Straits Times in October 1986 from the Singapore Government’s Administrative Service where his last position was Director in the Ministry of Trade and Industry. Patrick chairs two SPH subsidiaries - Straits Times Press and Shareinvestor.com Holdings - and is a director of SPH Magazines, SPH Radio and Tamil Murasu Ltd. He also serves on the boards of the National University Health System and the Singapore University of Technology and Design. Patrick graduated from University College, Oxford in 1976 with a Bachelor of Arts (Honours) in Engineering Sciences and Economics. He also has a Masters in Public Administration from the Kennedy School of Government, Harvard University. uLeslie Fong Yin Leong Senior Executive Vice-President, Marketing Leslie went to Trafalgar Primary School and then Raffles Institution. After obtaining his Higher School Certificate, family circumstances made it necessary for him to start working life. He joined The Straits Times in August 1969 and has stayed with the company ever since. Between 1983 and 1986, he was seconded to Shin Min Daily News, where he became its de-facto Chief Editor. He became Editor of The Straits Times in 1987 at the age of 37. He handed over editorship to Han Fook Kwang in September 2002 and became Editor-at-Large with special responsibilities for China. In April 2005, he took over as Head of Marketing Division and was promoted to Senior Executive Vice-President, Marketing in January 2008. Leslie also holds chairman positions in New Beginnings Management Consulting (Shanghai) Company Ltd and sgCarMart. uLim Jim Koon Editor-in-Chief, Chinese Newspapers Jim Koon holds a Bachelor of Arts (Honours) in Government & Public Administration from Nanyang University, Singapore. He is an advisor to the Center for World Chinese Media Studies, Peking University and an adjunct professor at the Lee Kuan Yew School of Public Policy and UniSIM. uTony Mallek Chief Financial Officer Tony is the Chief Financial Officer for SPH. Before this appointment in January 2010, he served as Executive VicePresident, Finance from July 2006 and Senior Vice-President, Finance when he joined in June 2003. Prior to this, he was General Manager, Finance for Intraco Limited from 1999 to 2001. Originally from Hong Kong, he started his career in 1978 in the United Kingdom and has been with various U.S. multinationals until 1991 when he was posted to Singapore. His Singapore experience has mainly been in the healthcare industry, including general manager positions in finance and business development for Parkway Holdings Limited from 1994 to 1997. Tony is a director of SPH REIT Management Pte Ltd, as manager of SPH REIT. Tony holds a Bachelor of Technology (Honours) degree in Operations Management from The University of Bradford and is a Fellow of the Chartered Institute of Management Accountants. He was elected to the Council of Institute of Singapore Chartered Accountants (ISCA) in 2014. uLow Huan Ping Executive Vice-President, Technology (IT & Production) Huan Ping is the Executive Vice-President, Technology (IT & Production). He has been with the Group since 1987. Huan Ping is also a director of M1 Limited, iFast Corporation Pte Ltd, MediaCorp Press Ltd and Shareinvestor.com Holdings Ltd. Huan Ping started his career at the Ministry of Defence, where he subsequently headed various IT departments. Huan Ping 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 Business School’s Advanced Management Program. Since May 2012, he also oversees the Production Division. Jim Koon has been a journalist for 37 years. He took over the helm of Lianhe Zaobao in December 1993 and served as its Editor since January 1995. He handed over to Goh Sin Teck in August 2011. uGinney Lim May Ling General Counsel, Executive Vice-President, Corporate Communications & CSR, & Group Company Secretary Jim Koon became Editor-in-Chief of the Chinese Newspapers Division in June 2012, having served as Editorial Advisor in the last ten months. Ginney Lim is General Counsel, Executive Vice-President, Corporate Communications & CSR, and Group Company Secretary of SPH. She is also the General Manager Annual Report 2014 31 of Singapore Press Holdings Foundation Limited, an Institution of Public Character established in 2003 by SPH. He was awarded the Public Administration Medal (Bronze) (Military) in August 2007. When she joined SPH in 1991, she was tasked to set up the Secretariat/Legal Division. She is responsible for the corporate secretarial, legal, risk management, insurance and corporate communications functions in the SPH Group and sits on several steering and senior management committees. Ms Lim is a director of Times Development Pte Ltd, Orchard 290 Ltd, SPH Retail Property Management Services Pte Ltd and SPH REIT Management Pte Ltd, all of which are wholly-owned property subsidiaries of SPH. She is also a director of Waterbrooks Consultants Pte Ltd and an alternate director in MediaCorp Press Limited. Wee Phong graduated from the National University of Singapore with a Bachelor of Arts (Honours) in Sociology on an SAF scholarship. Prior to joining SPH, Ms Lim was heading the Legal & Secretariat department as well as the public relations section of NTUC Income. Ms Lim was admitted as an advocate and solicitor of the Supreme Court of Singapore in 1985 and holds a Bachelor of Law (Honours) Degree from the National University of Singapore. She is also a Fellow in the Institute of Chartered Secretaries and Administrators and an Associate of the Chartered Insurance Institute. uMable Chan Kam Man Executive Vice-President, Human Resources & Administration Mable has been with SPH since 1997. Before taking over as Head of Human Resources Division in June 2006, she was Senior Vice-President, Customer Service Department, Marketing Division. In September 2013, she was placed in charge of the Administration Division. Prior to joining SPH, Mable was the Executive Director of the Marketing Institute of Singapore. She holds a Bachelor of Applied Science degree from the South Australian Institute of Technology and a Masters in Business Administration from the National University of Singapore. uWarren Fernandez Editor, The Straits Times Warren is Editor of The Straits Times, Singapore’s largest selling English daily newspaper. He joined the newspaper in 1990 as a political reporter and rose to become News Editor. He later also served as Foreign Editor and Deputy Editor. He left to join Royal Dutch Shell in 2008 as a Global Manager for its Future Energy project, before returning to The Straits Times in February 2012 as its editor. He graduated with First Class Honours from Oxford University, where he read Philosophy, Politics and Economics, and also has a Masters in Public Administration from Harvard University’s John F. Kennedy School of Government. Both degrees were obtained on Singapore Press Holdings scholarships. He has written several books, including “Lee Kuan Yew: the Man and his Ideas”; “Thinking Allowed: Fear, Politics and Change in Singapore”; “Without Fear or Favour: 50 years of the Public Service Commission”; “Our Homes: 50 years of housing a nation”; “Men for Others”; and most recently, “Lead Your Life!”. He was also part of the editorial team that assisted Mr Lee Kuan Yew with his two part memoirs, “The Singapore Story”. He has served on various national committees, including the Cost Review Committee; the Remaking Singapore Committee; Singapore 21 and Compass, as well as on the boards of directors for the National Environment Agency, the Civil Service College and the Energy Studies Institute. Currently he is a board member of the National Parks Board (NParks), National Heritage Board (NHB), sgCarMart and Sphere Exhibits Pte Ltd. uGoh Sin Teck Editor, Lianhe Zaobao Sin Teck joined SPH’s Chinese flagship paper, Lianhe Zaobao, uChua Wee Phong in 1987 upon graduating from the National University of Executive Vice-President, Circulation Singapore with a Bachelor of Arts in Sociology. He worked his way up as a crime reporter to become the Editor of Lianhe Zaobao and the Consulting Editor of My Paper (Chinese Wee Phong has been with SPH for 20 years. He joined Circulation in May 1994 and was appointed head of the Section), Singapore’s first and only bilingual free-sheet. division in May 2005. He is currently the Chairman of Sphere He also oversees Zaobao.com, the online edition of Lianhe Exhibits Pte Ltd. Zaobao. He is a Director of SPH Radio Pte Ltd and Zaobao.com. Prior to joining SPH, Wee Phong served in the Singapore Armed Forces (SAF) for a period of 13 years. He was promoted to the rank of Colonel in 2005 and is currently the Chief of Staff, 9th Division. Sin Teck presently serves on the boards of URA and the NTU’s Board of Trustees and is a member of the National Integration Council, National Translation Council, the Political Films Consultative Committee and the Committee to Promote Chinese Language Learning. 32 Singapore Press Holdings SENIOR MANAGEMENT uDeborah Lee Siew Yin Executive Vice-President, Corporate Development Deborah joined SPH as Executive Vice-President, Corporate Development in April 2007. Prior to joining SPH, she was a consultant, specialising in corporate development work and mergers and acquisitions. Before her consultancy work, Deborah was Senior VicePresident, Business Development at the Wuthelam Group, overseeing the establishment of the industrial electronics business, real estate business development and private equity investment for the Group in the region. Deborah started her career as an auditor with Pricewaterhouse and subsequently joined Hewlett Packard, holding various management positions over a period of 11 years. She holds a Bachelor of Accountancy (Honours) and a Master in Applied Finance from the National University of Singapore. She is a CFA charterholder. uLim Swee Yeow Senior Vice-President, Production Swee Yeow has been with SPH for 14 years. He joined Production in January 2000 as Production Manager. Throughout his career with SPH, he helmed various sections in Operations, Engineering, Materials and Newsprint purchases. He was appointed head of division in September 2011. He was involved in major projects with the company’s printing presses and print processes such as the GOSS Colorliner upgrades (2011), manroland Uniset (2008) and KBA Commander (2002). He was also responsible for building the state-of-art printing presses and mailroom systems. Swee Yeow graduated with a Bachelor of Science in Industrial and Manufacturing Engineering from Oregon State University, USA. He also holds a Higher National Diploma in Printing and Publishing Production from London College of Printing, UK. uSeow Choke Meng Executive Vice-President, Times Properties and Cultural Industry Promotion, Chinese Newspapers Choke Meng has been with the newspaper group for the last 35 years after spending five years in the airline industry. He has held various positions, including General Manager, Human Resource Operations and General Manager, Circulation cum General Manager of Chinese Newspapers’ Editorial Services Department. Choke Meng is currently Executive Vice-President of Times Properties and Cultural Industry Promotion of the Chinese Newspapers Division. He is also the Executive Director of Times Development Pte Ltd. Apart from serving in grassroots and community organisations, he is Chairman of the Promote Mandarin Council and a Board Member of the National Healthcare Group. He is also a Standing Committee member of the Singapore Chinese Chamber of Commerce & Industry since 2005. Choke Meng graduated from the University of Singapore with a Bachelor of Science (Honours) degree. uSng Ngoi May Executive Vice-President, Retail Property Management Ngoi May is Executive Vice-President, Retail Property Management, SPH with effect from 1 March 2013. Prior to that, she was the Executive Director, SPH Retail Property Management Services Pte Ltd. In her role, she oversees the property management responsibilities of the SPH Group’s retail properties, which are Paragon and The Clementi Mall. She is also involved in the development and marketing of the Group’s latest retail mall at Fernvale Road, The Seletar Mall, which will be completed in December 2014. Ngoi May is the Chairman of the Orchard Road Business Association, an appointment that she has held since September 2006. Between 1983 and 2005, Ngoi May was with SPH and last held the position of Executive Vice-President responsible for the Group’s Properties, Administration, Information Resource Centre, Legal/Secretariat and Corporate Relations functions. Prior to SPH, she was in the Government Administrative Service and worked in Ministries of Health, Finance and Home Affairs. Ngoi May holds a Master of Science from the University of Singapore. uJanice Wu Sung Sung Senior Vice-President, Media Strategy and Analytics Janice was appointed to head the newly created Media Strategy and Analytics Division in February 2014. Janice has held various positions across divisions in SPH in the last 16 years, with stints in Legal/Secretariat, SPH AsiaOne Ltd and Corporate Development. She was actively involved in legal advisory work, M&A transactions, joint ventures, property acquisitions and corporate planning. She also serves as director of SPH subsidiaries including SPH Magazines, sgCarMart and The Seletar Mall. Janice graduated from the National University of Singapore with a Bachelor of Law (Honours) Degree and is qualified as an advocate and solicitor of the Supreme Court of Singapore. Prior to joining SPH as legal counsel, she was in private legal practice and legal counsel in the Ministry of Defence. Annual Report 2014 uChua Boon Ping Chief Executive Officer, SPH Media Fund Boon Ping was appointed CEO of SPH Media Fund in August 2014. He has 14 years of venture capital and M&A experience in the technology, media and telecommunications sectors. Prior to joining SPH, he was Senior Vice President of EDBI, the corporate investment arm of Singapore’s Economic Development Board, where he headed the Internet and Digital Media investment team. He holds a Bachelor of Engineering (Honours) and a Master in Business Administration (Banking & Finance) from Nanyang Technological University. He is a CFA charterholder. 33 She was also the General Manager of Orchard 290 Ltd, a wholly owned subsidiary of SPH, from 1997 to 2004. She was a pioneer member of the management team which redeveloped Paragon and The Promenade into one fully integrated high-end premier shopping mall with a prestigious office and medical tower. She is Fellow of the Chartered Association of Certified Accountants (FCCA), UK. uLoh Yew Seng Chief Executive Officer, SPH Magazines Pte Ltd uSusan Leng Mee Yin Chief Executive Officer, SPH REIT Yew Seng was appointed Chief Executive Officer of SPH Magazines Pte Ltd in June 2006. He joined SPH in July 2001 and was Vice-President of Finance and Chief Financial Officer for the magazines business group before his current appointment. Susan was appointed CEO of SPH REIT in 2013. She has 16 years of shopping centre and property development experience and eight years of accounting and finance experience. Yew Seng began his career in 1994 with Arthur Andersen and held notable corporate finance and financial analyst positions in Banque International à Luxembourg, Van der Horst Limited and Visa International. Susan began her career as an auditor with Coopers & Lybrand and her last appointment was Accounting Manager with Scotts Holdings Limited before she made a career change to shopping centre management in 1992. Since then, she has held various appointments, including General Manager of Scotts Shopping Centre, Director of Retail Management with Far East Organisation and General Manager of Capitol Investment Holdings. He holds a Bachelor of Accountancy (Honours) from Nanyang Technological University and has been a CFA charterholder since 1999. 34 Singapore Press Holdings CEO’S OVERVIEW OF GROUP OPERATIONS The Group operating revenue was $1,215.2 million for the financial year 2013/2014 Annual Report 2014 Despite the continuing challenges confronting the media industry, SPH delivered a commendable performance in the last financial year. The Group operating revenue was $1,215.2 million for FY 2014, 2.0 per cent lower than the previous year. The recurring earnings decreased by 5.5 per cent to $349.0 million. Revenue from our core Newspaper and Magazine business was $931.7 million. Advertisement revenue was $705.9 million. The Group’s other businesses registered strong growth as revenue soared $28.4 million (56.7 per cent) to $78.5 million, boosted by contributions from exhibitions, online classified and the radio business. The creditable showing by the Group’s growth segment, coupled with the $6.8 million or 3.5 per cent rise in property revenue on the back of higher rental income from Paragon and The Clementi Mall, partially negated the reduced contribution from Newspaper and Magazine business. NEWSPAPERS SPH’s newspapers turned in another fruitful year amidst a challenging media climate. The Straits Times (ST), SPH’s Englishlanguage flagship newspaper, held its place as the most-read daily publication in Singapore. Its combined print and digital readership remained high at 1.37 million, or 33.6 per cent of Singapore’s multilingual population aged 15 and older, according to the Nielsen Media Index Report 2013. The overall readership was bolstered by the growth of its online and mobile editions. Based on the Audit Bureau of Circulation’s criteria, total paid digital subscriptions for ST on its multiple platforms rose to 149,600, up 28 per cent from 2013. With the popularity of its digital editions, ST ramped up its integration efforts, transforming its newsroom into a multiplatform, round the clock operation. To deepen reader engagement, the team launched web specials. These are stories that use multi-media to explain the issue better, or which explain topics in a digestible format. ST also launched highly interactive e-books, including a monthly The Life magazine. It also started a new ST Education Communities site, in addition to the current Entertainment community. A Travel community is in the pipeline. Chinese flagship newspaper Lianhe Zaobao (ZB) launched Zaobao.sg, a local website focusing on local news. Its Sunday edition, ZB Sunday, was also refreshed with new design and content, offering a comprehensive coverage of key developments in Singapore and abroad in the news section. There is more cross-platform news coverage between the digital and print editions. Together with Chinese evening daily Lianhe Wanbao, ZB launched an outreach programme where journalists and volunteers met senior citizens to share news stories with them in 35 Mandarin or in various Chinese dialects in August 2014. The objective of the pilot programme is to reach out to and connect with senior citizens, keeping them informed and engaged with our society. Lianhe Zaobao also actively promoted the Chinese language and culture by bringing in Chinese arts productions to Singapore and organised events such as the inaugural Chinese Challenge, a national competition for secondary school students to enhance their knowledge of the Chinese language. The Business Times (BT) had a strong year, with total circulation up by 14.2 per cent to 48,200. Print circulation bucked the general downtrend to register a 5 per cent increase to 32,900, while total paid digital subscriptions saw strong growth from 11,000 to 15,300. The paper continued to celebrate excellence in the business fraternity with a range of corporate awards – the Singapore Business Awards, the Singapore Corporate Awards, the Enterprise 50 Awards and Emerging Enterprise Awards. It also organised entrepreneurship seminars and networking nights to bring together business owners, advertisers and newsmakers. The New Paper (TNP) held its place as the second-most read among paid English daily newspapers in Singapore, with an average daily readership of 363,000, according to Nielsen’s 2013 survey. After turning 25 in 2013, it underwent a revamp to make its content more local, vocal and social. At the same time, it updated its design and look. 36 Singapore Press Holdings CEO’S OVERVIEW OF GROUP OPERATIONS The paper also broadened its digital reach with a new smartphone app, launched just before the World Cup 2014. Within weeks of its launch, it was the most popular Free News App downloaded on the iTunes Store. The Group’s Malay-language newspaper, Berita Harian (BH), also executed a transformation from a print-only newsroom to a print-plus-digital operation. This culminated in the successful launch of its new mobile apps and website in December 2013. BH received funding from the Lee Kuan Yew Fund for Bilingualism to publish a free monthly bilingual magazine in English and Malay for pre-school children and their parents. The newspaper continued to engage its readers with its events, organising a futsal tournament and several health forums to discuss issues of concern for the community, as well as the annual BH Achiever of the Year award. Tamil Murasu (TM) had another good year of growth in both circulation and advertising. Together with tabla!, the free weekly launched by TM for the English-speaking Indian community, it hosted the annual Deepavali shopping festival at the Singapore Expo, and the third Integration Cup golf tournament and Integration Night dinner. The tabla! Community Champion Award was presented to Mr Mohamed Abdul Jaleel, a philanthropist and businessman. Lianhe Wanbao, which celebrated its 30th anniversary in 2013, achieved a new milestone with the launch of its smartphone and tablet apps as well as a new website in September 2013. The joint initiative by Lianhe Wanbao and omy.sg enabled readers to get in touch with the evening daily across multiple platforms including print, online and mobile. Lianhe Wanbao was also relaunched with a new look in July 2014 to better connect and communicate with its readers. Complementing its newspaper content, Shin Min Daily News has been active in book publishing and signature events to engage its readers. Community events such as Heartland Expert Challenge and Graceful Living Workshop were popular with heartlanders and senior citizens. Shin Min published the fourth volume of the popular Words of Wisdom by Master Hsing Yun, which was launched at the Singapore Book Fair in June 2014. SPH’s free daily My Paper was revamped in December 2013. Several new sections, including Business, Sports and Opinion, were introduced and its look and design were spruced up. Its renewed focus on the concerns and lifestyles of professionals and executives was well received by readers and advertisers. The newspaper advertising business is facing challenges brought about by a combination of factors, including policy measures to curb property price inflation and vehicle ownership and economic restructuring. To ensure that we are able to respond to the changing SPH’s newspaper circulation business ended FY 2014 with 1,068,500 daily average copies, a year-on-year growth of 1.7 per cent as its suite of digital products continued to demonstrate increasing relevance with readers. The Straits Times and The Sunday Times registered a year-on-year growth of 2.2 per cent to 459,300 daily average circulation copies as its total paid digital subscriptions rose to 149,600 copies. Annual Report 2014 environment, our Marketing Division has reorganised its various teams to place more emphasis on giving our customers and partners greater value and returns. They have moved from the traditional way of selling print advertisements to providing advertisers with a one-stop media solution across all our media platforms. In line with this transformation, the display sales team has been restructured and renamed as Integrated Sales. Apart from marketing print advertisements, this team will now offer all existing advertisers an integrated solution that includes radio, outdoor, digital, as well as events and exhibitions. Regular advertisers have not only increased their spending to include non-print advertisements, their returns on their investment have also improved due to the multi-media exposure in our online, radio and outdoor platforms. Over at our Print Classified, another transformation is taking shape. With a new look and direction, the Classified sections of all our newspapers are aiming to become effective marketplaces that will better serve the buying needs of our readers. The changes enabled Print Classified to book an additional revenue of over $10 million from mostly new advertisers between January and August 2014. To enhance our core media business, we set up the Media Strategy and Analytics Division (MSA) in February 2014. It works with various divisions and subsidiaries across SPH to jointly formulate strategies to grow revenue by harnessing existing assets and identifying possible new revenue streams for our newspapers and magazines businesses. MSA is also working with our editorial colleagues to forge new ways of delivering our content to readers across platforms. The strategy formulation would include competitive landscape scanning and analyses of emerging trends, especially in the rapidly evolving digital space. CIRCULATION AND SUBSCRIPTION SPH’s newspaper circulation business ended FY 2014 with 1,068,500 daily average copies, a year-on-year growth of 1.7 per cent as its suite of digital products continued to demonstrate increasing relevance with readers. The Straits Times and The Sunday Times registered a year-on-year growth of 2.2 per cent to 459,300 daily average circulation copies as its total paid digital subscriptions rose to 149,600 copies. Lianhe Zaobao grew its total circulation to 183,300 daily average circulation copies, a robust growth of 6.3 per cent, with digital contribution averaging 33,300 copies. Our newspapers continued to garner substantial increases in circulation copies during general news breaks. The Little India Riot and the disappearance of Malaysia’s airline MH370 were major news which boosted a surge in demand for print across all publications. The Little India Riot resulted in 124,000 37 incremental copies over a three-day period and the MH370 newsbreak saw a total of 255,000 incremental sales copies for the month of March 2014. To meet readers’ increasing demand, several additions to the Group’s existing family of digital products were introduced this year. Lianhe Wanbao launched its first digital campaign in October 2013 and is now available in online, smartphone and tablet formats. Readers were also introduced to the Allin-One bundle, which allows them to access both print and digital media in a single package. Berita Harian launched its first digital campaign in January 2014. With the new apps, readers can now access newspaper content on-the-go. Advertisers are also given the opportunity to present their campaigns on a multimedia platform. NEW MEDIA SPH has embarked on a journey of transformation to grow its digital media business with the setting up of the new Digital Division in February 2014 to power our digital strategy. This move brought together the digital ad sales, technological development, online classifieds – STJobs, STProperty, STCars, STClassifieds, and digital teams of AsiaOne, Stomp and SPH Razor, under one roof. By bringing together the Group’s digital expertise, we are able to derive greater efficiencies, speed-to-market, and leverage best 38 Singapore Press Holdings CEO’S OVERVIEW OF GROUP OPERATIONS practices for SPH’s portfolio of online, mobile, and advertising products. This reorganisation allowed online advertisers to access SPH digital properties and helped them to deliver innovative, creative and enterprising integrated ad solutions. Setting up the Content Studio, a dedicated editorial unit to deliver tailored content for brands, also allowed us to connect brands to their target audiences more effectively. With mobile consumption growing rapidly, we continued to boost our array of mobile products to cater to users. Among others, AsiaOne launched an award-winning news app for iPad, covering more than 17 categories of news and lifestyle content; SoShiok, our food guide, also launched with a fresh look on both iOS and Android platforms, introducing a feature that rewards loyal readers with points which they can redeem for vouchers. TNP launched its news app, offering readers an interactive news experience on their smartphones. ST produced more e-books and e-magazines on tablets, including the award-winning Myanmar Sunrise e-book, and ST 100, a pictorial e-book showcasing the best pictures of major news events in the past year. In June 2014, the ST Appreciates Readers (STAR) app was launched. Among its other features, it carries The Life monthly lifestyle e-magazine produced by the ST Life! team. ZB launched Zaobao.sg, a one-stop information portal for local ZB readers in November 2013. Through this website, readers could access in-depth reports and opinion pieces carefully produced and curated by ZB’s team of editors and reporters. The site also offers breaking news and a revamped local stock market microsite. ZbBz, the luxury lifestyle magazine by ZB, also launched its digital edition this year. Bilingual news and entertainment website omy.sg continued to engage online users with its lively content, and its flagship event Singapore Blog Awards returned for the seventh year to honour the best Singapore bloggers. STJobs revamped its site in July, personalising and optimising the job search process for users across web and mobile. The revamp generated a 46 per cent increase in user registration and saw more than 600 per cent increase in resumes created in the first month. The STProperty team launched Singapore Property Watch (SPW), an analytics service in September last year, empowering users with data and insights in buying and selling property. The team continued to organise its popular STProperty Seminar, showcasing Malaysian property, as well as a full-house forum for property agents on rising up to the challenges in the Singapore Property Market. It was recognised as the Best Classified Website with over 1 million unique monthly visitors in the EPPY awards, among other accolades. With more than half of the STClassifieds users accessing the site through mobile devices, the team adopted a ‘mobilefirst’ strategy in product development, optimising the mobile user experience. STDirectory also brought directory and directional information to the fingertips of Singaporeans with both a mobile site and a mobile app which garnered 20,000 downloads in the first two months of launch. Our leading automotive site sgCarMart.com garnered over 40 million page views per month. Its car auction service sgCarMartQuotz saw an increase in transaction rate with over 1,000 vehicles sold last year, while its forum site myCarForum.com maintained its leading position with the highest participation rate and online traffic amongst all Singapore car forums. Our regional joint venture online classified business continued to grow from strength to strength. Mudah.my cemented its position as the largest local website in Malaysia with monthly unique visitors of nearly 8 million on both desktop and mobile, and total page views surpassing 700 million every month. Berniaga.com and Ayosdito.ph were the second largest online classified site in Indonesia and the Philippines respectively. Chotot.vn remained the largest online marketplace in Vietnam with nearly 10 million users and 500 million page views every month. ShareInvestor (SI) continued to grow its market data business in Singapore and Malaysia. It is also the market leader in providing online investor relations services to more than 450 publicly listed companies in the region, including Thailand. All of SI’s business Annual Report 2014 lines registered growth. Its event business also thrived, with more than 50 investor education events in the year. The flagship event, INVEST Fair in Singapore, attracted over 40 exhibitors and more than 15,000 participants. INVEST Fair Malaysia reached out to more than 5000 participants. SPH Data Services, a collaboration with SGX and FTSE to produce, maintain, license and market the Straits Times Index and the suite of FTSE ST indices, maintained its growth. This was based on the strength in its product licensing and market data business. The ongoing effort to enhance the tradability of the indices has also opened up new licensing opportunities. MAGAZINES SPH Magazines continued to hold its leading position in the market, with its women titles, including Her World, Female, Singapore Women’s Weekly, CLEO and Simply Her, ranked as the top five most-read women’s magazines in Singapore, according to Nielsen Media Index 2013. Based on the Index, special interest titles such as Men’s Health, Young Parents and Home & Décor also occupied market leader positions in their respective genres. Notwithstanding the strong success of its print brands, SPH Magazines continued its push towards digital and mobile, which it has embarked on since 2012. HardwareZone.com remains the region’s leading tech portal with over 3.7 million unique visitors and more than 56 million page views per month just for the Singapore site. Since its re-design, herworldPLUS.com has established itself as marketers’ preferred site to reach discerning, high net-worth women. Homeanddecor.com.sg was revamped and in addition to featuring design ideas and trends, it now offers a platform for professionals to showcase their portfolio of products and services. SPH Magazines’ portfolio of tablet editions has also grown rapidly to encompass 70 titles across seven countries. Subscription drives kicked in throughout the year to entice a new generation of digitally-enabled consumers to embrace magazines. The availability of digital platforms also offered advertisers more creative, integrated marketing solutions across SPH Magazines’s brands, engaging consumers across multiple touch points. Today, SPH Magazines’ network of brands - 100 print magazines in nine countries, 10 lifestyle and luxury portals and 70 tablet magazines in seven countries – has garnered more than 57 million page views, 500,000 cumulative digital readers and a reach of over 4.3 million. SPH Magazines continued to share its experiences and expertise with its overseas subsidiaries, offices and partners across Malaysia, China, Hong Kong, Thailand, Indonesia and Vietnam to facilitate their evolution to multi-platform publishers. 39 U-Weekly (UW), the popular Chinese entertainment, lifestyle and social news magazine published by Focus Publishing continued to entertain readers with the latest showbiz happenings and lifestyle trends. Another bestseller, the quarterly Chinese magazine Health No.1, offered readers updates on the best of both western and traditional Chinese medicines. BOOK PUBLISHING Straits Times Press (STP) had another successful and profitable year. One highlight was the publication of a coffee-table book “Lee Kuan Yew: A Life In Pictures” comprising more than 500 photographs from Mr Lee’s life. More new books were published in 2014. Four were from The Straits Times: “Straight Talk - Reflections on Singapore Politics and Economy”, “More Talk Money”, “When The Party Ends China’s Leaps & Stumbles After The Beijing Olympics”, and “Small Change - Investment Made Simple”. Two were by The New Paper writers: “Singapore Raw - 25 Stories From 25 Years of News, Emotion”, and “Foul! The Inside Story of Singapore Match Fixers”. Other major book launches included “The Making of NTU - My Story” by Professor Cham Tao Soon, ”We Also Served - Reflections of Singapore’s former PAP MPs”, and “Fortitude - The Life and Times of Heah Joo Seang”, “One Man’s View” by Lee Kuan Yew, released the year before in English, was published in Chinese by STP in 2014. 40 Singapore Press Holdings CEO’S OVERVIEW OF GROUP OPERATIONS Focus Publishing’s best-selling Chinese magazine UW published the eighth “Yummy Guide” and special interests books, such as “Men at the Helm” and “Chinese Temples in Singapore”. PROPERTIES Following the strong debut of SPH REIT’s listing in 2013, it outperformed forecast in FY 2014, rewarding unitholders with higher returns. Both Paragon and The Clementi Mall delivered a strong performance last year, achieving 100 per cent committed occupancy. The Seletar Mall, a joint venture between SPH and United Engineers Developments, is slated to open by end 2014. The four-storey suburban lifestyle mall with two additional basement levels has a gross floor area of 284,000 sg ft and net lettable area of 188,000 sq ft. It is over 90 per cent leased so far. The family-oriented shopping mall will cater to Singaporeans staying in Sengkang, Hougang, Punggol, Seletar and Ang Mo Kio. RADIO SPH Radio had a banner year. Its Kiss92 station, targeting females and the family, continued to grow its cumulative listenership to 574,000. It secured Number 1 ranking in share of listenership among all English stations in Nielsen’s Radio Survey Wave 1 in 2014. SPH Radio’s English contemporary hits station, Hot FM91.3, maintained its 318,000 cumulative listenership while growing its percentage share and time spent listening. It introduced Hot FM Control, allowing fans to vote for the artists and songs they want to hear in real-time. This first-of-its-kind service in Singapore was honoured with a Bronze award for Best App by a Media Owner in 2014’s MobEx Awards Singapore. UFM 100.3, SPH Radio’s Chinese language station, enjoyed the biggest growth in number of listeners among all Chinese language stations, from 266,000 to 320,000. EVENTS, CONFERENCES & EXHIBITIONS Sphere Exhibits (Sphere) achieved resounding success in its expansion plans this year. Apart from revamping and expanding existing shows, Sphere made significant progress in its overseas expansion and established its presence in Malaysia, Myanmar, Philippines and Sri Lanka. Sphere’s signature technology show COMEX celebrated its 20th anniversary this year with a new look and revamped content. Office Expo Asia, which returned for the second year, expanded to 3,500 sqm and enjoyed a 40 per cent increase in participants. Sphere gained significance as a MICE player in Malaysia when it acquired seven established exhibitions this year. Sphere is active in the parents and kids sector with shows such as SmartKids Malaysia, International Baby Expo, Motherhood Expo and Parents & Kids Expo. KL Wedding Expo is held four times a year starting from 2014. Facon Education Fair, the largest tertiary education event, is held twice a year and has garnered more international pavilions. For trade events, Sphere is the organiser for Malaysia International Food & Beverage Fair, The Golden Bull Award, The International Exhibition on Instruments, Controls and Automation Technology (ICA) and The International Exhibition on Laboratory Instrumentation, Equipment, Automation and Services (MLab). Sphere exported its trade event for the building and construction sector to Myanmar and launched BuildTechYangon 2014. It also launched the biggest edu-tainment event, SmartKidsAsia, in the Philippines. With more than 100 participating brands, the exhibition covered 2,750 sqm of the SMX Convention Centre and was well attended by over 17,000 visitors. Sphere Conferences continued to ride the momentum in Myanmar. Apart from holding the second edition of the Hospitality & Tourism Conference, Banking & Business Development Conference and Urban Development Conference, the team successfully launched the inaugural Real Estate Show and Civil Aviation Development Conference. Not to miss out on Sri Lanka as the upcoming MICE destination, the Hospitality and Tourism Conference was introduced in the country this year. Annual Report 2014 OUT-OF-HOME ADVERTISING The cross-selling of ads across the different platforms has helped SPH MediaBoxOffice, the Out-of-Home (OOH) advertising unit, contribute a year-on-year increase in profit of more than four times despite the competition. The team also secured exclusive rights to new OOH advertising sites to give more choices to our customers. These sites include the iconic facade at Rendezvous Hotel, underground link ways at The Sail and newly launched Ocean Financial Centre as well as other popular sites in the Central Business District. To ensure sustainable profit performance, the team will continue to source for cost effective solutions to digital hardware requirements and new inventories in prime office and shopping locations. SPH BUZZ SPH Buzz Pte Ltd has evolved into a modern retail convenience chain, establishing and cultivating its growing presence. Amidst the tough retail environment, SPH Buzz still managed to grow its network to 81 stores. With the wide network of stores, SPH Buzz has successfully launched exclusive merchandise with various partners, complementing the Group’s media offering with an effective retail sales channel. To further enhance its product offering, SPH Buzz has also extended its merchandise mix to offer popular service items like cashcards and parking coupons as well as hot food, and ready-to-eat meals at selected Buzz pods. In 2014, Buzz has commenced the development and implementation of a Point-of-Sale system which is a key enabler for future expansion. We look forward to a complete roll-out in the coming year. BUSINESS OUTLOOK The print business is facing multiple challenges in this digital age. We need fresh and innovative approaches to thrive in the new media landscape. Going forward, the Group will continue to engage readers with both print and digital so as to meet changing consumer habits and remain competitive in the media industry. Our sales teams must not only excel in selling print advertisements, they must also be well-trained to sell across multiple media platforms. We are already en route to building newsrooms of the future and the editorial teams are equipped with the skills and knowledge to achieve total news coverage through different media platforms. Moving beyond print, we will intensify our efforts to address evolving media trends and continue to look out for profitable ventures to grow our 41 adjacent businesses such as property, events and book publishing. In August 2014, we invested a $12 million stake in preschool and enrichment provider MindChamps Holdings. This marks the Group’s first investment into the education business. As we celebrate 30 years of media excellence this year, we owe our success to our loyal stakeholders, readers, advertisers, consumers, staff and the unions. With your continued support, I am confident that SPH will continue to thrive and be among the world’s leading media companies. Chan Heng Loon, Alan Chief Executive Officer 42 Singapore Press Holdings Here are some of the anniversary highlights spearheaded by Corporate Communications & CSR Division. SPH CELEBRATES ITS 30th ANNIVERSARY THIS YEAR WITH A SERIES OF SPECIAL ACTIVITIES SPH was formed on 4 August 1984 through a merger of three organisations - the Straits Times Press group, the Singapore News and Publications Limited and Times Publishing Berhad which was later de-merged from SPH in 1988. The merger brought together the English, Malay and Chinese newspapers under one roof. SPH later also bought Tamil Murasu Ltd. While SPH has a relatively young history, its publications have a much longer place in the lives of Singaporeans. In the short span of 30 years, SPH has become a media powerhouse and achieved success in adjacent businesses like property, events and exhibitions. 1 March – Opening Concert by SSO at Paragon A special SPH Gift of Music concert by the Singapore Symphony Orchestra (SSO) at Paragon kickstarted the SPH 30th anniversary celebrations in style. For the first time, SSO musicians played from different levels of the mall before they converged at the main atrium. Star Wars stormtroopers made a surprise appearance and were instant crowd pleasers. 17 March – SPH Lucky 30 Draw The SPH Lucky 30 Draw was launched with 30 prizes worth over $88,000 to be won. When it ended on 18 May, it had attracted more than 30,000 participants. Annual Report 2014 26 April – SPH Walk of Giants Dr Lee Boon Yang, Chairman of SPH, officiated at the groundbreaking ceremony for SPH Walk of Giants. To be completed by 2016, this is an elevated boardwalk which showcases giant trees in a learning forest at Singapore Botanic Gardens. This is part of SPH’s corporate social responsibility in nature and conservation, as well as education. 43 14 to 21 July – See the Big Picture British artist and autistic savant Stephen Wiltshire drew a panoramic cityscape of Singapore from memory at Paragon. The completed artwork was presented to President Tony Tan Keng Yam, as a gift to the nation for Singapore’s 50th birthday next year. Stephen also mingled with arts, disadvantaged, and special needs students as part of SPH’s active corporate citizenry. This special anniversary event highlights SPH’s evolution from a print company to a multimedia conglomerate. Centred on the theme “See the Big Picture”, this event showcased the extensive reach of SPH’s comprehensive array of media solutions, covering print, online, digital, broadcast, events and out-of-home platforms. By leveraging on these SPH media platforms, advertisers can see “the big picture” and effectively reach out and engage a wider base of clients and readers. 19 May – SPH Charity Carnival SPH staff and external charities set up more than 30 stalls to raise funds for different causes at SPH Charity Carnival 2014 – the biggest so far to mark SPH’s 30th anniversary. 25 July – Topping Out Ceremony for The Seletar Mall The Seletar Mall, which will open this November, is SPH’s third mall following Paragon and The Clementi Mall. Dr Lee Boon Yang, Chairman of SPH, was the Guest of Honour at the topping out ceremony of SPH’s latest property offering. 44 Singapore Press Holdings 29 July – SPH’s Got Talent An SPH talent quest was held for staff across the Group. A total of 19 individuals and teams took to the stage to compete for the coveted championship, and they all put up a stellar performance. 22 August – SPH Mass Charity Outing More than 50 SPH staff brought 110 beneficiaries from various charities to the Singapore Gardens Festival. It was, to date, the largest joint charity activity involving several divisions and their adopted charities. 4 August – SPH’s Birthday Concert and Special Supplement Close to 700 staff and members of the public converged at the newly revamped Victoria Concert Hall to celebrate SPH’s birthday with a lunchtime SPH Gift of Music concert by the Singapore Symphony Orchestra. Everyone was treated to a musical feast and a piece of birthday cake. 9 September – SPH’s Gift to the Nation SPH Chairman Dr Lee Boon Yang presented Stephen Wiltshire’s artwork to President Tony Tan Keng Yam at the URA Singapore City Gallery, as SPH’s gift to the nation for her 50th birthday next year. A special supplement on the same day in The Straits Times, Lianhe Zaobao and The Business Times included special deals for everyone. 8 November – A Nation in Concert 2014 Besides being a sponsor of the concert which involves both professional and disabled artistes performing together in a musical, both SPH and SPH Foundation will present $1 million (with government matching) to 50 charities recommended by the National Council of Social Service. Annual Report 2014 45 SIGNIFICANT EVENTS 2013 3 OCT 6 SEPT Bilingual pictorial coffee-table book marks Mr Lee Kuan Yew’s 90th birthday SPH launched a bilingual pictorial book to commemorate the birthday of Mr Lee Kuan Yew, who turned 90 on 16 September 2013. Published by Straits Times Press, the book titled “Lee Kuan Yew: A Life in Pictures” was presented to Mr Lee at his Istana office by SPH CEO Alan Chan. 6 SEPT Lianhe Zaobao celebrates 90 years of heritage and editorial excellence Lianhe Zaobao’s 90th anniversary year-long celebrations culminated in a grand gala dinner. About 500 guests were invited to the gala dinner. President Tony Tan Keng Yam was the Guest of Honour. 9 SEPT SEPT The New Paper unveiled its revamped, revitalised, refreshed look in celebration of its 25th anniversary. This was its first major revamp since 2007. 2 NOV Straits Times journalist launches book on China’s leaps and stumbles after the Beijing Olympics The close of the Beijing Olympics marked the surge of a “steroid superpower”, a stark contrast to the massive economic meltdown in the West. The spectacular rise of China, accompanied by an upswing in social unrest, political intrigue and insecurity, was vividly captured by The Straits Times journalist Peh Shing Huei in his book, “When the Party Ends – China’s Leaps and Stumbles after the Beijing Olympics”. Published by Straits Times Press, the 320-page book was officially launched at the Singapore Writers Festival. Lianhe Wanbao goes digital as part of its 30th anniversary celebrations Lianhe Wanbao launched its smartphone and tablet apps, along with its new website, as part of its 30th anniversary celebrations. 30 more Local. more Vocal. more Social. The New Paper: Read us aNew SPH teams up with Telenor and Schibsted in online classifieds 701Search, SPH’s joint-venture company with Schibsted Classified Media AS, specialising in building and growing online marketplaces in regional emerging markets, announced its new partner – Telenor ASA, Norway’s leading telecommunications operator. 17 NOV Shin Min Daily News launches its first e-book – “Master Hsing Yun - Words of Wisdom” Shin Min Daily News launched its first e-book, “Master Hsing Yun - Words of Wisdom” (星云大师点智慧) to coincide with the visit of Master Hsing Yun, a Taiwanese Buddhist monk, to Singapore. Shin Min Daily News has been running a daily column on his words of wisdom since 2009. 20-22 NOV Inaugural AsiaEducationExpo 2013 and conferences by Sphere Exhibits Organised by Sphere Exhibits, the inaugural edition of the AsiaEducationExpo 2013 showcased the industry’s latest trends, technology, learning tools and ideas for every stage 46 Singapore Press Holdings SIGNIFICANT EVENTS of learning, as well as new and emerging instruction in the development of holistic learning. 22 NOV Lianhe Zaobao launches new online portal zaobao.sg Lianhe Zaobao launched its newest online portal zaobao.sg which is a one-stop information portal for local Zaobao readers. Through this website, readers can gain access to in-depth reports and opinion pieces carefully produced and curated by Zaobao’s team of editors and reporters. There is also breaking news and a newly revamped local stock market microsite. 2014 8 JAN To grow its media business, SPH set up a subsidiary SPH Media Fund Pte Ltd and established a $100 million New Media Fund to invest in media-related businesses. This will play a critical role in SPH’s aspiration to be the leading multimedia company in Asia. 14 5 DEC JAN My Paper updated Singapore’s first and only bilingual newspaper, My Paper, received an updated look – a cleaner, more upmarket product that caters to young professionals, managers and executives. 11 DEC SPH sets up subsidiary to grow media business A new piece of art at Paragon In conjunction with the upgrading of its building façade, Paragon installed an intriguing piece of art titled Noeud Rouge (Red Knot). It was created by Parisian contemporary artist Jean-Michel Othoniel, who was in Singapore to grace the launch of his sculpture. SPH Invests in Magzter Inc SPH invested in Magzter Inc (Magzter), a global digital magazine store and newsstand with more than 16 million users from over 200 countries and a global catalogue of thousands of magazines in more than 30 global languages. 12 DEC Berita Harian launches apps and new website BeritaHarian.sg Malay daily Berita Harian launched its smartphone and tablet apps along with its new website BeritaHarian.sg following a revamp of the newspaper in May 2013. 12 DEC SPH Multimedia Ltd acquires remaining 7.1 per cent stake in SPH UnionWorks SPH announced that it acquired NTUC Media’s 7.1 per cent stake in SPH Radio (formerly known as SPH UnionWorks Pte Ltd). With this acquisition, SPH Radio is now a wholly-owned subsidiary of SPH. 19 DEC SPH Magazines partners Happy 3 Media to launch revamped GameAxis.com SPH Magazines entered into a partnership with Happy 3 Media to revamp GameAxis.com, Singapore’s premier website on video gaming news and reviews. The revamped website was launched with a new logo, marking the change of creative direction. 16 JAN SPH releases The Straits Times SoShiok App with new look, features and rewards Food lovers looking for places to eat in Singapore can now use the newly relaunched The Straits Times SoShiok App for the latest food news as well as expert reviews on food establishments ranging from hawker fare and fast food to hip bars and fine dining. 24 JAN SPH Magazines officially launches SME community portal TowkayZone.com SPH Magazines launched TowkayZone.com, an online portal designed and created with small medium enterprises (SMEs) in mind. Built in partnership with the Infocomm Development Authority of Singapore, the site provides a platform for the SME community to exchange ideas, seek advice and network with each other. Annual Report 2014 17-19 FEB Sphere Conferences partners Myanmar government to organise hospitality and tourism trade show Sphere Conferences partnered the Myanmar Tourism Federation to organise the inaugural Myanmar Hotels, Food & Beverage and Travel Trade Show in Yangon, Myanmar. 21 FEB The New Paper launches “Singapore Raw” for its 25th Anniversary The New Paper launched a book titled “Singapore Raw: 25 stories from 25 years of news, emotion, wow” in commemoration of its 25th anniversary. The coffee-table book published by Straits Times Press featured 25 of the paper’s most memorable stories over the years. 16 MAR 47 New AsiaOne iPad App offers more content with immersive user experience AsiaOne released a new iPad app which offers a wide range of news and lifestyle features from SPH publications such as The Straits Times, The Business Times, The New Paper, My Paper and websites such as sgCarMart. 17 MAR Coloured Newsprint – another print innovation by SPH SPH introduced another print innovation in My Paper with coloured salmon newsprint, which gave the feature a striking presence within the regular news pages. 24-26 MAR Myanmar’s first and only Civil Aviation development conference Sphere Conferences launched Myanmar’s first and only aviation conference, the Myanmar Civil Aviation Development Conference 2014 in Yangon. 25 MAR 8 MAR The Straits Times launches Myanmar edition The Straits Times launched its inaugural edition in Myanmar. With a circulation of 5,000 copies and printed in English, The Straits Times is the largest circulating international newspaper in Myanmar. Distribution is concentrated in the major cities of Yangon, Naypyidaw and Mandalay, targeting both local and foreign businessmen. Copies are also circulated to ministries, businesses, major hotels, airlines, bookshops and supermarkets. Her World and herworldPLUS present The Young Woman Achiever Forum 2014 Her World and its sister website herworldplus.com reached out to Singapore’s young women at The Young Woman Achiever Forum 2014 on International Women’s Day. The inaugural forum featured a panel of inspirational, successful women who spoke on their experiences about reaching their dreams and goals. 26 MAR Female magazine celebrates its 40th anniversary with a special collector’s edition Female, a publication of SPH Magazines, commemorated its 40-year-old milestone with its biggest issue ever - an upsized edition with refreshed design and sharper content. It also threw a birthday bash at the W Hotel. 48 Singapore Press Holdings SIGNIFICANT EVENTS 6 APR Refreshed zbSunday offers a brighter and livelier read zbSunday, Singapore’s No.1 Chinese newspaper on Sundays, was revamped with a new look and content. 9 APR 4 MAY The Straits Times hosts inaugural Education Forum More than 300 participants attended the inaugural Straits Times Education Forum. Education Minister Heng Swee Keat was the guest speaker at a question-and-answer session. Zaobao.com launches NewsTalk – a groundbreaking approach to learning Chinese NewsTalk, a joint product of zaobao.com and award-winning technology developer GistXL Technology, was launched as a revolutionary online learning platform using current affairs and advance language technology for learners to learn Chinese as a “living language”. 16 APR Release of Chinese edition of “One Man’s View of the World”《李光耀观天下》 The Chinese edition of the best seller “One Man’s View of the World” by Mr Lee Kuan Yew was launched. Titled《李光耀观 天下》中文版, the 400-page volume conveyed Mr Lee’s views on the future of the major powers and regions of the world. 27-31 APR AUG 8 MAY Launch of new Digital Division We: Defining Stories photo exhibition The Straits Times and National Museum of Singapore’s “We: Defining Stories” photo exhibition was held at the museum’s Exhibition Gallery. The free exhibition chronicled the defining moments in Singapore’s history from 1950 to 2013. On show were more than 400 photographs from the paper’s archives and the museum’s collection. SPH launched its new Digital Division to harness the growth potential of SPH’s various digital offerings, through concerted efforts to bring integrated solutions that are innovative, creative and enterprising to its advertisers and users. 12 MAY “Every parent an informed parent” The Straits Times launches its Education Community The Straits Times launched a digital Education Community to make “every parent an informed parent”. Annual Report 2014 17 MAY Revamped Classified Ads offer a more effective reach to the right customers CATS Classified adopted its host newspaper’s identity and was renamed The Straits Times Classified, The New Paper Classified, Lianhe Zaobao Classified or Berita Harian Klassified. Each carries listings and features that appeal most to readers of that particular newspaper. 23 MAY Shape magazine brings fitness to Singapore’s night scene by holding the first-ever dance workout party 16 JUN 49 Straits Times Press launches “Foul! The inside story of Singapore match fixers” Straits Times Press launched “Foul! The inside story of Singapore match fixers”, a 152-page book on the untold story of prominent Singaporean match fixers who boldly plied their trade on the international football scene. The book was written by Mr Zaihan Mohamed Yusof, Senior Correspondent at The New Paper. Shape Glow 2014, a 90-minute dance workout party featuring two group exercises, Zumba and Bokwa, drew 700 participants to Zouk and Phuture. It was the first night-time fitness event organised by Shape Singapore. 23-24 MAY Chinese musical drama Nasirdin Afandi premieres in Singapore Chinese musical drama Nasirdin Afandi (阿凡提) made its debut in Singapore. The production was jointly presented by Lianhe Zaobao and Asia Arts & Culture, and performed by the Beijing Huaxia Musical Performing Troupe. 18 JUN Kiss92 is Singapore’s No. 1 English music radio station based on share of listenership The latest Nielsen radio survey results released saw Kiss92 emerged as Singapore’s No. 1 English music station based on percentage share of listenership. Its cumulative listenership made the biggest leap of 89,000 to 574,000, overtaking GOLD 90.5 to claim No. 2 spot in terms of cumulative listenership among English radio stations here. All SPH Radio stations also made it into the Top 10 positions. 26-29 JUN New focus on kitchen showcase at inaugural Food & Kitchen Show 2014 Exhibits Inc Pte Ltd, a wholly owned subsidiary of SPH, presented the inaugural Food & Kitchen Show 2014. It was the only show in the market to feature a kitchen showcase highlighting the latest in innovative kitchen products and creative concepts. The exhibition also offered a wide spread of food and beverage products for its visitors. 26-28 MAY Myanmar’s first real estate and urban build conference Sphere Conferences launched Myanmar’s first real estate and urban build event – Real Estate Show Myanmar 2014 and the second annual Myanmar Urban Development Conference 2014 in Yangon. The three-day event attracted over 200 urban planners, architects, developers, building users, capital investors and key real estate and urban development stakeholders from across the region. 27 JUN Reimagine storytelling with The Straits Times Star app The Straits Times Star (ST Star) app was introduced and houses a collection of digital publications, starting with The Life, a monthly magazine packed with articles on style, design, pursuits, travel and food. An e-book called 100 Hot Bods was subsequently released, featuring 100 of the people interviewed for The Sunday Times’ series, and health and fitness tips. 50 Singapore Press Holdings SIGNIFICANT EVENTS 8 JUL Straits Times Press launches book on Singapore’s political pioneers – “We also served: Reflections of Singapore’s former PAP MPs” Straits Times Press launched “We also served: Reflections of Singapore’s former PAP MPs”. The book was jointly written by former People’s Action Party (PAP) Members of Parliament (MPs) Dr Chiang Hai Ding and Mr Rohan Kamis. The launch was attended by over 100 guests, including past and present PAP MPs and their family members. 31 JUL Lianhe Wanbao relaunched with new content and vibrant design Lianhe Wanbao was relaunched with a new look and content, focusing on three “Cs” – Care, Connect and Communicate to better engage its readers. 12-14 AUG Sphere Conferences launches Malaysia’s pioneering patient-centred learning platform The first Patient Care Malaysia Conference by Sphere Conferences was held in Selangor, Malaysia. It was an unrivalled platform for patient care professionals and key healthcare stakeholders in Malaysia to learn and discuss strategies leading to excellence in patient-centric healthcare. 20 AUG SPH makes its first investment in education business SPH marked its first investment into the education sector by buying a 22 per cent stake in pre-school and enrichment provider Mindchamps Preschool (Worldwide). 10 JUL The Peak magazine launches book – “30/30 – The Game Changers” The Peak launched a coffee-table book – “30/30 – The Game Changers” published by SPH Magazines Pte Ltd, and was unveiled as part of The Peak’s celebration of 30 years in print. 12 JUL Tamil Murasu launches Tamil-language version of S R Nathan’s memoirs - “An Unexpected Journey: Path to the Presidency” Tamil Murasu launched the Tamil-language version of former President S R Nathan’s memoirs “An Unexpected Journey: Path to the Presidency”. The translation for the book, based on the English-language version first launched in September 2011, was done as a private commission by Mr A Palaniappan, Head Specialist (Languages) (English/Tamil) at the Language Services Department, Parliament of Singapore. Tamil Murasu sponsored the cost of translating and publishing the Tamil edition of the book as a gift to the Tamil community. 28-31 AUG COMEX marks 20 years with new show highlights COMEX, Singapore’s biggest IT and Consumer Electronics Exhibition, presented a new show concept for its 20th anniversary this year. Organised by Exhibits Inc, the new show highlights included the Tech Fashion Show, Tech Showcase, Booth Babes Contest, The Stage and Gamers’ Hub, which gave visitors an unforgettable experience. 30 AUG Simply Her and SingHealth hold Women’s Health Conference 2014 Simply Her magazine, along with SingHealth, presented its first-ever Women’s Health Conference. Eight medical experts from SingHealth, the largest healthcare group in Singapore, gave a series of talks on common health conditions that affect women and the latest medical treatments available. 4-6 SEP SPH launches International Franchise & Business Opportunities trade show in Ho Chi Minh City The International Franchise & Business Opportunities trade show, organised by BizLink Exhibition Services, made its debut in Ho Chi Minh City. Annual Report 2014 51 AWARDS & ACCOLADES CORPORATE 1. Singapore Corporate Awards 2014 • Best Investor Relations Award – Gold ($1 billion and above market capitalisation category) 3. Patron of the Arts Award • SPH received Distinguished Patron of the Arts award for the 22nd consecutive year • SPH Radio (UFM100.3) was honoured with Distinguished Patron of the Arts award • SPH Foundation received an Associate of the Arts award • omy.sg received Arts Supporter award 4. Community Chest Awards • SPH and SPH Foundation received the 10-Year Outstanding Corporate Award and the Corporate Platinum Award • Sphere Exhibits received Special Events Gold Award 5. Patron of Heritage Awards by National Heritage Board 2.14th SIAS Investors’ Choice Award • Most Transparent Company Award (Services Category) – Winner (This is the 10th consecutive time that SPH has won this award) • Most Promising Journalist of the Year u Winner – Ms Andrea Soh (Journalist, The Business Times) u Winner – Mr Cheow Kai Jian (Journalist, Lianhe Zaobao) • Most Promising Journalist of the Year (Special Award) u Ms Rachel Scully (Journalist, The Straits Times) • Investor Education Journalist of the Year u Winner – Mr Cai Haoxiang (Correspondent, The Business Times) • Outstanding Commentaries Award u Mr Goh Eng Yeow (Senior Correspondent, The Straits Times) • Investor Education Journalist of the Year (Special Award) u Ms Teh Hooi Ling (Former Senior Correspondent, The Business Times) • Special Award u Mr Kenneth Lim (Correspondent, The Business Times) • Media Excellence in Community Investor Education u The Sunday Times Invest Section (The Straits Times) • SPH received Partner of Heritage award • Zaobao.com was honoured with a Friend of Heritage award • Kiss92 received a Supporter of Heritage award 6. National Blood Programme 2014 by Singapore Red Cross • Bloodmobile Organiser – Merit award 7. 2014 Business Excellence Awards by Acquisition International Magazine • SPH was accorded Media Entity of the Year (Singapore) 8. Asean Corporate Governance Scorecard • Top 5 – Singapore Press Holdings 9. Singapore 1000, Singapore SME 1000 & Singapore International 100 by DP Information Group • SPH was recognised as a Singapore 1000 Company 10. Brand Finance Top 100 Singapore Brands 2014 • • • • • SPH – ranked 12th The Straits Times – ranked 48th Her World – ranked 69th Lianhe Zaobao – ranked 73rd Nuyou – ranked 82nd 52 Singapore Press Holdings AWARDS & ACCOLADES 11.Friend of MCCY • Mr Seow Choke Meng (Executive Vice-President, Cultural Industry Promotions, Chinese Newspapers Division) 12.Energy Efficiency National Partnership (EENP) Awards • Outstanding Energy Manager of the Year, under the SME category – Mr Wong Tat Choon (Assistant Vice-President, Production Division – Engineering) EDITORIAL / PRINTING / CREATIVE ACHIEVEMENTS 1. Icon de Martell Cordon Bleu 2014 • Ms Neo Xiaobin (Executive Photographer, The Straits Times) 2. PANPA 2014 Newspaper of the Year Awards • 2014 Digital Publishing Innovation of the Year by The Straits Times Communities 3. PANPA 2014 Advertising & Marketing Awards • Marketer of the Year – Mr Johnson Goh (Vice President and Head of Business Development, Strategic Marketing) 4. WAN-IFRA 13th Asian Media Awards • Best in Print (for circulation above 150K) u Silver – The Straits Times • Best in Print (for circulation above 150K) u Silver – Lianhe Zaobao • Best in Print (for circulation below 150K) u Silver – Berita Harian • Best in Design (Magazine Overall Design) u Gold – The Peak (April 2013) by SPH Magazines • Best in Design (Magazine Overall Design) u Bronze – ZbBz • Best in Editorial Content (Newspaper Breaking News Article) u Silver – The Straits Times Foreign Desk • Best in Editorial Content (Newspaper Feature Article) u Gold (Mr Kor Kian Beng and Ms Ho Ai Li, The Straits Times) • Best in Photojournalism (Feature Photography) u Gold (Mr Alphonsus Chern, The Straits Times) 5. WAN-IFRA Asian Digital Media Awards 2013 • Best in Online Media Award - Newspaper Website u Gold – Stomp (www.stomp.com.sg) u Bronze – The Straits Times (www.straitstimes.com) • Best in Online Media Award - Magazine Website u Silver – herworldPLUS (www.herworldplus.com) • Best in Mobile Publishing Award u Bronze – STProperty • Best in Tablet Publishing Award u Gold – Wanbao iPad App (Lianhe Wanbao & omy.sg) • Best in Cross Media Award - Cross Media Advertising u Gold – Tiger Beer “Have You Been Good This Year” u Bronze – STClassifieds u Bronze – STCars • Best in Cross Media Award - Cross Media Editorial Coverage u Silver – The Haze In Singapore (The Straits Times) • Best in Social Media Award u Gold – ST Communities (The Straits Times) • Best in Online Video Award u Bronze – 48 Singaporean Seconds (The Straits Times) 6.35th Society of News Design – The Best of News Design™ Creative Competition • Award of Excellence – Photography/ Single Photos Breaking News category – The New Paper for “Main photo of rioters” • Award of Excellence – Feature Design/ Entertainment/ Compact 50,000 – 174,999 category – The New Paper for “Real Steel / Hot Iron!” • Award of Excellence – Feature Design/ Entertainment/ Compact 50,000 – 174,999 category – The New Paper for “Know Your Minions” • Award of Excellence – Redesigns Section – The New Paper for Sports Section • Award of Excellence – Redesigns Overall Newspaper – The New Paper 7. The Society of Publishers in Asia 2014 (SOPA) Awards for Editorial Excellence • Excellence in Editorial Cartooning (Group B category) – Award for Excellence Annual Report 2014 The Straits Times (Mr Manuel Francisco for “Reviving the land of the rising sun”) Excellence in News Photography (Group B category) – Award for Excellence u The New Paper (Mr Jonathan Choo for “Little India Riot: Police cars overturned, some in flames”) Excellence in Magazine Design (Group A category) – Award for Excellence u SilverKris (May 2013) by SPH Magazines Excellence in Opinion Writing (Group B category) – Honourable Mention u The Straits Times (Mr Ravi Velloor for “Prepare for the next horror that surely will come”) Excellence in Information Graphics (Group B category) – Honourable Mention u The Straits Times (Mr Lim Yong for “Tech from nature”) Excellence in Magazine Design (Group B category) – Honourable Mention u The Peak (April 2013) by SPH Magazines 53 u • • • • • 10. S.League Awards • RHB Story of the Year award - Mr Fabius Chen, The Straits Times for “Man, He’s On The Ground From Dawn To Dusk” 11. W3 2013 Awards • STCars - Mobile App (Services) – Silver • STJobs - General Website (Employment) – Silver 12. Singapore infocomm Technology Federation Awards 2013 • Digital Media category - STProperty – Bronze 13. 18th EPPY Awards 2013 • Best Classified Website - STProperty 14. GONG Singapore Creative Circle Awards • Film and Television category - STCars’ anti-drink driving campaign – Bronze 15. Mob-Ex Awards 2014 • Best Original Content category – Gold (Stomp) • Best Use of Social Platform – Bronze (Stomp) • Best App/ Content By a Media Owner category – Bronze (SPH Radio Pte Ltd / Hot FM91.3) 8. Enterprise Award at the Business China Award 2013 • Lianhe Zaobao 9. Hall of Fame Awards 2013 by the Institute of Advertising • Print Campaign of the Year - STClassifieds 16. International Creative Media Awards (ICMA) 2013 • Cover – Award of Excellence (The Peak Selections: Gourmet And Travel Issue 6) • Cover – Award of Excellence (The Peak Selections: Gourmet And Travel Issue 7) • Cover – Award of Excellence (SilverKris, April 2013) • Photography – Award of Excellence (“Pick of the crop”, The Peak Selections: Gourmet And Travel Issue 6) • Alternative Storytelling - Award of Excellence (“Have you eaten a giant Garoupa recently”, The Peak Selections: Gourmet And Travel Issue 6) • Alternative Storytelling – Award of Excellence (“Feel good, eat well”, The Peak Selections: Gourmet And Travel Issue 7) • Alternative Storytelling – Award of Excellence (“What’s cooking in 2013”, The Peak Selections: Gourmet And Travel Issue 7) 54 Singapore Press Holdings AWARDS & ACCOLADES 19. INMA Awards 2014 • Best Public Relations or Community Service Campaign (Group 2) – Third place (“48 Values From The News: The Straits Times Guide to building Character” by The Straits Times) • Best Idea to Encourage Print Readership or Engagement (Group 1) – Third place (“From Mobile and Web to Print” by Stomp) • Best Idea to Grow Advertising Sales or Retain Advertising Clients (Group 1) – Third place (SPH iink Awards) 20. 2014 Newspaper of the Year by Marketing Magazine 17. APEX 2014’s 26th Annual Awards for Publication Excellence • Digital category – Grand Award (SilverKris by SPH Magazines for Singapore Airlines, for its August 2013 tablet edition) • Health & Medical Materials category – Award of Excellence (Singapore Health (Sep-Oct 2013) by SPH Magazines for Singapore General Hospital and SingHealth Academic Healthcare Cluster) • Green Print Media category – Award of Excellence (Singapore Nautilus’ Green Pledge Booklet by SPH Magazines for Maritime and Port Authority of Singapore) 18. The Communicator Awards • Websites: News category – Award of Excellence (AsiaOne) • Mobile Apps: News category – Award of Excellence (AsiaOne for iPad) • Websites: Homepage category – Award of Distinction (AsiaOne) • Websites: Homepage category – Award of Distinction (AsiaOne Relax) • Websites: Homepage category – Award of Distinction (The Straits Times SoShiok) • Websites: Structure & Navigation category – Award of Distinction (The Straits Times SoShiok) • Websites: Structure & Navigation category – Award of Distinction (AsiaOne Relax) • Websites: Visual Appeal category – Award of Distinction (The Straits Times SoShiok) • Websites: Visual Appeal category – Award of Distinction (AsiaOne YourHealth) • Websites: Visual Appeal category – Award of Distinction (AsiaOne Ride) • Mobile Apps: Guides / Ratings / Reviews category – Award of Distinction (The Straits Times SoShiok) • • • • • • • • The Straits Times (1st) The Business Times (2nd) The New Paper (5th) My Paper (6th) Lianhe Zaobao (7th) Lianhe Wanbao (8th) Shin Min Daily News (9th) tabla! (10th) 21. Magazine of the Year 2013 by Marketing Magazine • Magazine of the Year – Her World (2nd), CLEO (3rd) • Women’s Magazine of the Year – Her World (1st), CLEO (2nd), The Singapore Women’s Weekly (3rd) • Women’s Fashion Magazine of the Year – Female (1st), Harper’s Bazaar (3rd) • Men’s Magazine of the Year – Men’s Health (2nd) • Motor Vehicle Magazine of the Year – Torque (1st) • Parenting Magazine of the Year – Young Parents (1st) • Consumer Electronics Magazine of the Year – HardwareMAG (HWM) (1st) • Property Magazine of the Year – LP-Luxury Properties (1st) • In-flight Magazine of the Year – SilverKris (1st) • Chinese Magazine of the Year – ICON (2nd), Nuyou (3rd) • Luxury Magazine of the Year – The Peak (2nd), AsiaSpa (3rd) • Local Business Magazine of the Year – Business Quotient (BizQ) (2nd) Annual Report 2014 PROPERTY ACCOLADES 22. 2014 Tabbies by Trade Association Business Publications International • Front Cover Illustration – Honourable Mention (Singapore Nautilus Issue No. 24 by SPH Magazines) • Best Single Issue (Top 25 Issues) – 5th (ASCENT Issue 13 by SPH Magazines) 1. Building & Construction Authority (BCA) Green Mark Award 23. MPAS Awards 2014 2. Orchard Road Christmas Light Up, Best Dressed Building Contest 2013 • Women’s Media of the Year – Winner (Her World by SPH Magazines) • Food Media of the Year – Winner (The Peak Selections: Gourmet & Travel by SPH Magazines) • Special Interest Media of the Year – Winner (Torque by SPH Magazines) • Travel Media of the Year – Winner (SilverKris by SPH Magazines) • Lifestyle / Fashion / Entertainment Media of the Year – Merit (Female by SPH Magazines) • Integrated Media Brand of the Year – Merit (Her World and herworldPLUS by SPH Magazines) • Media Publishing Company of the Year – Merit (SPH Magazines) 55 • Gold – The Seletar Mall • Winner – Paragon 3. The Most MasterCard® Friendly Mall Award 2013 • Winner – Paragon 4. Singapore Retailers Association (SRA) Shopping Centre Scorecard 2013 - Outstanding Efforts in Centre Management • Paragon 5. National Environment Agency 9th Public Health Awards 2014 - Clean, Dry & Sparkling Public Toilets Award (Shopping Mall Division) • The Clementi Mall 24. The Spark Awards 2014 by Marketing Magazine • Best Insights and Research Project by a Media Owner – Bronze (SPH Magazines for its research report “The Singapore Women Digital Study”) 56 Singapore Press Holdings SPH NEWSPAPERS READERSHIP TRENDS SPH Newspapers Net Readership Trends (‘000) 3500 3000 2,801,000 2500 2000 1500 1000 500 0 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 SPH Newspapers Readership Trends (‘000) 2500 2000 1,622,000 1500 1,376,000 1000 337,000 500 0 2004 2005 2006 2007 2008 2009 2010 English-language papers Chinese-language papers (including My Paper) Malay-language & Tamil-language papers * Streats ceased publication from January 2005. Remarks: Nielsen Fieldwork period July-June; year indicated refers to the year when fieldwork was completed. Source: Nielsen Media Research, Media Index (2004-2013). 2011 2012 2013 Annual Report 2014 57 DAILY AVERAGE NEWSPAPERS CIRCULATION August 2014 THE STRAITS TIMES/ THE SUNDAY TIMES (PRINT + DIGITAL1,2) The Straits Times/ The Sunday Times (Print): 309,700 The Straits Times/ The Sunday Times (Digital): 149,600 459,300 THE BUSINESS TIMES (PRINT + DIGITAL1,2) The Business Times (Print): 32,900 The Business Times (Digital): 15,300 48,200 BERITA HARIAN/ BERITA MINGGU (PRINT + DIGITAL1,2) Berita Harian/ Berita Minggu (Print): 47,200 Berita Harian/ Berita Minggu (Digital): 1,600 48,800 THE NEW PAPER/ THE NEW PAPER SUNDAY (PRINT + DIGITAL1,2) The New Paper/ The New Paper Sunday (Print): 76,300 The New Paper/ The New Paper Sunday (Digital): 600 76,900 LIANHE ZAOBAO (PRINT + DIGITAL1,2) Lianhe Zaobao (Print): 150,000 Lianhe Zaobao (Digital): 33,300 183,300 LIANHE WANBAO (PRINT + DIGITAL1,2) Lianhe Wanbao (Print): 89,100 Lianhe Wanbao (Digital): 2,400 91,500 SHIN MIN DAILY NEWS 129,800 TAMIL MURASU / TAMIL MURASU SUNDAY 15,000 ZBCOMMA3 56,500 THUMBS UP3 THUMBS UP JUNIOR3 THUMBS UP LITTLE JUNIOR3 26,900 15,100 36,900 Notes: 1. Total paid digital subscription numbers reported are in accordance with the rules by the Audit Bureau of Circulations Singapore (ABC). 2. The Straits Times/ The Sunday Times unique digital subscribers: 52,473. The Business Times unique digital subscribers: 5,135. Berita Harian unique digital subscribers: 621. The New Paper unique digital subscribers: 368. Lianhe Zaobao unique digital subscribers: 11,777. Lianhe Wanbao unique digital subscribers: 1,349. 3. Figures are reported on a per issue basis. 58 Singapore Press Holdings FINANCIAL REVIEW Group Simplified Financial Position 2014 S$'000 2013 S$'000 Assets Property, plant and equipment Investment properties Investments Cash and cash equivalents Trade and other receivables Inventories Other assets 285,562 3,860,451 1,716,333 442,937 148,115 23,947 174,051 331,778 3,672,565 1,557,332 465,398 150,761 23,890 171,630 362,548 3,517,147 884,741 372,459 186,889 27,079 134,496 394,086 1,754,259 1,065,543 392,514 156,136 37,317 88,919 427,783 1,730,069 1,269,900 460,995 264,124 26,974 54,157 Total 6,651,396 6,373,354 5,485,359 3,888,774 4,234,002 Shareholders' interests Capital and reserves Non-controlling interests 3,687,095 709,088 3,536,480 679,226 3,680,160 73,016 2,232,005 74,584 2,226,282 79,744 879,107 926,369 1,738,222 2,721 1,280,322 3,293 1,011,168 100,800 860,114 570,800 34,875 298,046 34,026 268,969 32,953 278,683 27,776 296,670 21,438 286,861 46,901 60,502 9,413 41,318 69,613 2,779 47,227 81,856 7,849 49,481 89,488 6,802 54,161 120,213 14,389 6,651,396 6,373,354 5,485,359 3,888,774 4,234,002 Liabilities Borrowings Non-current Current Trade and other payables Non-current Current Taxation Deferred Current Other liabilities Total 2012* S$'000 2011 S$'000 2010# S$'000 * With effect from FY 2013, the Group changed its accounting policy for investment properties from cost to fair value model. The change was applied retrospectively and accordingly, the comparative financial statements for FY 2012 were restated. # Certain figures have been reclassified to conform with current year’s presentation. Group Quarterly Results 2014 1st Qtr S$'000 2nd Qtr S$'000 3rd Qtr S$'000 2013 4th Qtr Full Year S$'000 S$'000 Operating revenue 328,475 278,764 309,725 298,220 Operating profit 116,873 53,495 98,391 80,204 Profit before taxation 118,499 98,352 115,276 196,264 Profit attributable to shareholders 88,815 81,302 89,632 144,537 Earnings per share (S$) 0.06 0.05 0.06 0.08 1,215,184 1st Qtr* 2nd Qtr* 3rd Qtr S$'000 S$'000 S$'000 4th Qtr S$'000 Full Year S$'000 322,092 282,183 324,951 310,226 1,239,452 348,963 114,340 84,606 91,535 78,807 369,288 528,391 115,360 90,333 204,754 78,652 489,099 404,286 95,123 75,597 187,535 72,699 430,954 0.25 0.06 0.04 0.27 0.05 0.12 Annual Report 2014 Profit after Taxation (S$’m) Return on Operating Revenue 59 (%) 2014 470.7 2014 33.3 2013 434.3 2013 34.8 2012* 586.6 2012* 45.1 2011 383.8 2011 31.1 2010^ 509.5 2010^ 36.0 Earnings Per Share (S$) Return on Equity (%) 2014 0.25 2014 11.0 2013 0.27 2013 12.2 2012* 0.36 2012* 15.6 2011 0.24 2011 17.4 2010^ 0.31 2010^ 22.4 Segmental Operating Revenue and Profit Margin Operating Revenue (S$’m) Profit before Tax Margin (%) 1200 180 1000 150 800 120 600 90 400 60 200 30 0 0 2010^ 2011 Newspaper & Magazine Newspaper & Magazine Property Property 2012* 2013 2014 Others ^ FY 2010 included profits from the Group’s Sky@eleven development. * With effect from FY 2013, the Group changed its accounting policy for investment properties from cost to fair value model. The change was applied retrospectively and accordingly, the comparative financial statements for FY 2012 were restated. 60 Singapore Press Holdings FINANCIAL REVIEW Operating Revenue Composition 7% Advertisements 16% 17% 15% 6% FY 2014 Circulation Rental & Services FY 2013 Others 16% 62% 61% Cost Composition 4% 23% 17% 6% FY 2014 7% 4% 7% 43% 23% 20% 7% Materials, Productions & Distribution Costs Staff Costs Premises Cost FY 2013 Depreciation Other Operating Expenses 39% Finance Costs Review of Results for FY 2014 Group operating revenue was S$24.3 million (2.0%) lower compared to FY 2013. Revenue for the Newspaper and Magazine business fell S$59.5 million (6.0%) to S$931.7 million as advertisement and circulation revenue declined S$51.3 million (6.8%) and S$9.7 million (4.9%) respectively. Revenue for the Property segment rose S$6.8 million (3.5%) to S$205.0 million on the back of higher rental income from the retail assets of SPH REIT, Paragon and The Clementi Mall. Revenue from the Group’s other businesses surged S$28.4 million (56.7%) to S$78.5 million, led by contributions from exhibitions, online classified and the radio business. Materials, production and distribution costs saw a reduction of S$8.8 million (4.2%) due to lower newsprint and other material costs (S$15.5 million or 13.3%) partially offset by higher production costs from the exhibitions business (S$7.6 million or 80.8%). Staff costs increased by S$24.9 million (7.1%) mainly due to salary increments, higher bonus costs including a one-off special bonus for prior year of S$10.4 million arising from REIT profit and an incentive to drive growth. Other operating expenses fell S$23.3 million (13.2%) mainly due to lower impairment charges and business promotion costs. Fair value gain on investment properties of S$109.1 million mainly relates to the increase in valuation of the retail assets of SPH REIT. Investment income of S$48.2 million was S$34.2 million higher compared to last year due to increased dividend and interest income, higher profit on sale of investments and lower impairment charges on portfolio investments this year. The Group’s share of net loss of associates and jointlycontrolled entities of S$30.7 million was S$25.2 million higher than last year’s, mainly attributable to the regional online classified business. Profit before taxation of S$528.4 million was higher than the previous year by S$39.3 million (8.0%), lifted by the S$52.9 million gain on partial divestment of stake in the regional online classified business. Net profit attributable to shareholders of S$404.3 million was S$26.7 million (6.2%) lower compared to FY 2013 after accounting for profits and fair value gain attributable to noncontrolling interests of SPH REIT. Annual Report 2014 61 VALUE ADDED STATEMENT for the financial year ended August 31, 2014 2014 S$'000 2013 S$'000 1,215,184 (344,329) 870,855 1,239,452 (364,250) 875,202 Non-production income and expenses: Net foreign exchange differences from operations Net (loss)/profit on disposal of property, plant and equipment Impairment of property, plant and equipment Allowance for impairment of trade receivables Bad debts recovery Net income from investments Share of net loss of associates and jointly-controlled entities Gain on partial divestment of a jointly-controlled entity Write-back of impairment of loan to an associate Allowance for impairment of associates Impairment of intangible assets (including goodwill) (462) (618) (9,798) (3,761) 300 48,215 (30,726) 52,863 388 – – (1,211) 395 – (1,702) 306 13,971 (5,567) – – (4,582) (15,602) Total value added 927,256 861,210 Distribution: Employees' wages, provident fund contributions and other benefits Corporate and other taxes Finance costs Donation and sponsorship Directors' fees Net dividends to shareholders Total distributed 385,563 78,073 35,066 1,336 1,612 355,444 857,094 361,164 73,379 31,925 4,209 1,432 678,230 1,150,339 Sale of goods and services Purchase of materials and services Value added from operations Retained in the business: Fair value change on investment properties Depreciation and amortisation Non-controlling interests Retained earnings Productivity ratios: Value added Per employee Per $ employment costs Per $ investment in property, plant and equipment (before depreciation) Per $ operating revenue (109,076) 63,946 66,450 48,842 (111,407) 66,206 3,348 (247,276) 927,256 861,210 S$ S$ 203,756 2.26 0.87 0.72 201,242 2.42 0.88 0.71 62 Singapore Press Holdings INVESTOR RELATIONS It is our belief that a strong commitment to the highest standards of corporate governance, coupled with a self-evident performance track record, have built the SPH brand that creates sustained value for our stakeholders. With the guiding principles of transparency and accountability as the cornerstones of our corporate governance practices, we devote attention to proactively engaging all stakeholders, and safeguarding their interests. Guided by the overarching philosophy above, our Investor Relations (IR) practices are designed and developed around the key objective of maintaining regular, effective and fair communication with shareholders and investing community through clear, consistent and timely updates. Our IR programme is calibrated to ensure that all segments of the investing community are kept actively engaged. The feedback and insights obtained from these engagements are regularly reported to the Board of Directors, alongside updates on shareholder statistics and views of investors and analysts. SPH’s efforts in driving a best-in-class IR function were once again recognised by the investing community in the year under review. We have clinched the gold award for ‘Best Investor Relations’ category at the Singapore Corporate Awards 2014, the hallmark for excellent IR practices amongst SGX-listed companies. In addition, this is also the tenth consecutive year that SPH has won the ‘Most Transparent Company’ award at the Securities Investors Association (Singapore) [“SIAS”] Investors’ Choice Awards. We are encouraged by these accolades from the investing community, and will continue to build on the standing we enjoy with investors. Proactively Engaging Investors Our senior management plays an active role in engaging the investing community, by leveraging on multiple platforms to provide regular updates on the business, and to address concerns on the group’s prospects and challenges. To reach out to institutional investors, SPH participates in investor conferences and roadshows. These include Credit Suisse Asian Investment Conference in Hong Kong and Morgan Stanley Asia Pacific Summit in Singapore. Investor luncheons are also organised quarterly to brief investors on SPH’s performance. These events are attended by CEO and/or CFO, which underscores the importance SPH accords to IR. In addition to the above, the IR team conducts face-to-face meetings and conference calls with institutional investors on a regular basis. Retail investors are another important facet of the investing community. The company collaborates closely with external partners such as SIAS to address the collective needs of retail investors. In addition, the IR team engages retail investors through various channels including email, telephone enquiries, and public forums such as SIAS Corporate Profile Seminar and the annual Invest Fair organised by our subsidiary, Shareinvestor. As technology continues to exert greater influence on the way investors access information relating to the company, it is critical to ensure that our IR website remains user-friendly and informative. As a testament to the importance attached, our IR website underwent a revamp during the year to enhance user engagement and experience, and to allow easier access to the wealth of relevant and timely information on SPH via a simple, intuitive web interface design. On this note, shareholders are encouraged to access our corporate website at www.sph.com.sg for the latest updates. Queries can also be posted via our Investor Relations email address, [email protected] Annual Report 2014 63 INVESTOR RELATIONS CALENDAR 1st 3rd Quarter 2014 (March – May 14) Quarter 2014 (September – November 13) • 2013 Full Year Financial Results Announcement and Media Conference & Analysts’ Briefing with audio webcast • Full Year Results Investor Meeting • Morgan Stanley Asia Pacific Summit 2013 (Singapore) • Release of Annual Report 2013 • Annual General Meeting 2nd Quarter 2014 (December 13 – February 14) • Payment of 2013 Final Dividends • Announcement of 1Q FY 2014 results • Post 1Q Results Investor Meeting • Credit Suisse Asian Investment Conference (Hong Kong) • Announcement of 2Q/HY FY 2014 Results and Analysts’ Briefing with audio webcast • Post 2Q Results Investor Meeting 4th Quarter 2014 (June – August 14) • • • • Announcement of 3Q FY 2014 Results Post 3Q Results Investor Meeting SIAS Corporate Profile Seminar Shareinvestor’s Invest Fair 2014 FINANCIAL CALENDAR 15 October Announcement of FY 2014 Results 2014 10 December Record Date for Dividend Entitlement 23 December Proposed Payment of 2014 Final Dividends 13 January Announcement of 1Q FY 2015 Results 2015* 14 April Announcement of 2Q FY 2015 Results 9 July Announcement of 3Q FY 2015 Results 13 October Announcement of FY 2015 Results * The dates are indicative and subject to change. Please refer to SPH website, www.sph.com.sg, for the latest updates. 64 Singapore Press Holdings INVESTOR REFERENCE Operating Margin+ (%) 50 45 40 35 30 39.0 25 32.7 33.7 2011 2012 Restated^^ 20 29.8 28.7 2013 2014 15 10 5 0 2010^ Return on Shareholders’ Funds (%) 50 45 40 35 30 25 20 15 22.4 17.4 10 15.6 5 0 2010^ 2011 2012 Restated^^ 24.0 24.0 2011 2012 12.2 11.0 2013 2014 22.0 21.0 2013# 2014* Dividend per Share (cents) 40 35 30 25 20 27.0 15 10 5 0 2010 + ^ Computed based on Group recurring earnings. FY 2010 included profits from the Group’s Sky@eleven development. ^^ With effect from FY2013, the Group changed its accounting policy for investment properties from cost to fair value model. # Excluded special dividend of 18 cents per share paid pursuant to the establishment of SPH REIT. The change was applied retrospectively and accordingly, the comparative financial statements for FY2012 were restated. * Included one-tier tax exempt interim dividend of 7 cents per share, and proposed final dividend of 14 cents per share comprising a normal dividend of 8 cents per share and a special dividend of 6 cents per share. The proposed dividend is subject to approval by shareholders at the Annual General Meeting on December 2, 2014. Annual Report 2014 65 Recurring Earnings@ net of SPH REIT’s non-controlling interest and Dividend Payout Ratio+ S$’m % 600 120 500 110 400 100 300 90 200 80 100 70 0 60 2010 2011 Recurring Earnings net of SPH REIT’s non-controlling interest (S$’m) 2012 Restated^^ 2013# 2014 Dividend Payout Ratio (%) This represents the recurring earnings of the media, property and other businesses. FY 2010 included profits from the Group’s Sky@eleven development. @ + Computed based on Group recurring earnings net of SPH REIT’s non-controlling interest. ^^ With effect from FY2013, the Group changed its accounting policy for investment properties from cost to fair value model. The change was applied retrospectively and accordingly, the comparative financial statements for FY2012 were restated. Computation excluded special dividend of 18 cents paid pursuant to the establishment of SPH REIT. # Share Price and Volume Monthly Turnover (million shares) Share Price (S$) 200 5 150 4 100 3 50 2 0 1 2010 2010 2011 2011 2012 2012 2013 2013 2014 2014 Volume Share Price Highest closing price Lowest closing price August 31 closing price Price/Earnings Ratio based on August 31 closing price Source: Bloomberg 2014 2013 2012 2011 2010 S$ S$ S$ S$ S$ 4.29 3.93 4.15 16.60 4.65 3.91 3.93 14.56 4.12 3.61 3.97 11.03 4.26 3.62 3.80 15.83 4.17 3.56 4.08 13.16 66 Singapore Press Holdings CORPORATE INFORMATION EXECUTIVE COMMITTEE AUDITORS Lee Boon Yang (Chairman) KPMG LLP Cham Tao Soon 16 Raffles Quay #22-00 Sum Soon Lim Hong Leong Building Lucien Wong Yuen Kuai Singapore 048581 Chan Heng Loon Alan Audit Partner: Ong Pang Thye AUDIT COMMITTEE Bahren Shaari (Chairman) (Appointed in 2013) COMPANY SECRETARIES Chong Siak Ching Quek See Tiat Ginney Lim May Ling Sum Soon Lim Khor Siew Kim Tan Chin Hwee BOARD RISK COMMITTEE REGISTERED OFFICE 1000, Toa Payoh North Quek See Tiat (Chairman) News Centre Sum Soon Lim Singapore 318994 Tan Yen Yen Tel: (65) 6319 6319 Tan Chin Hwee Fax: (65) 6319 8282 Email: [email protected] NOMINATING COMMITTEE Cham Tao Soon (Chairman) Co.Reg.No. 198402868E SHARE REGISTRATION OFFICE Ng Ser Miang Lee Boon Yang Chong Siak Ching Tricor Barbinder Share Registration Services 80 Robinson Road, #02-00 REMUNERATION COMMITTEE Lee Boon Yang (Chairman) Lucien Wong Yuen Kuai Tan Yen Yen Bahren Shaari Singapore 068898 Tel: (65) 6236 3333 Annual Report 2014 SUSTAINABILITY REPORT Contents Materiality Analysis 68 Stakeholder Engagement 68 Trade Membership 70 Corporate Governance Report 71 Risk Management 86 Environmental Responsibility 88 Employee Responsibility 92 Workplace Safety and Health & Fire Safety 92 Working Hand in Hand with Our Industry Partners 93 Valuing Our Human Capital 93 Corporate Social Responsibility 96 Corporate Social Responsibility – SPH 96 Corporate Social Responsibility – SPH Foundation 98 67 68 Singapore Press Holdings SUSTAINABILITY REPORT SPH has been reporting its economic performance in its Annual Reports since it was incorporated in 1984. The first Sustainability Report was included in the 2012 Annual Report, covering the social and environment considerations of the Group’s overall organisational performance, in addition to the financial and governance aspects. With the endorsement of the management, a sustainability reporting committee was formed, with representatives from different divisions. Coordinated by the Corporate Communications & CSR Division, the Group conducted a stakeholder and materiality analysis across divisions and gathered the relevant data and information. This is to ensure that the social, economic and environmental considerations of the company are adequately addressed. From the analysis, the pertinent issues, their importance, as well as their impact on SPH’s stakeholders and business activities were examined. This Sustainability Report covers SPH’s business operations, strategic plans and developments. The parameters of the Sustainability Report are constantly evolving. The committee strives to continuously enhance the Group’s disclosure processes, performance targets and data-collation systems to ensure that a more robust and comprehensive Sustainability Report is presented in the years to come. Materiality Analysis The Sustainability Report is based on economic, social and environmental issues that are material to SPH’s business operations and stakeholders. SPH, which turned 30 on 4 August 2014, is Asia’s leading multimedia group with a diverse business portfolio in Newspapers, Magazines and Book Publishing, Internet and Mobile, Broadcasting, Events and Exhibitions, Out-of-Home Advertising and Properties. As the leading content provider in Singapore, providing accurate and timely news reports across multiple platforms is of utmost importance. SPH also offers a suite of cross-media solutions to support integrated marketing campaigns for advertisers. Behind every satisfied customer is a dedicated SPH staff. SPH understands the importance of implementing effective human resource policies and practices that promote safe and healthy working conditions, fair employment practices, teamwork, learning and development, career growth and rewards to attract, retain and grow talent. In the area of energy consumption, SPH strives to ensure energy savings in its printing plant and offices. Cutting down on energy usage not only helps to mitigate climate change, but also saves costs for the Group. Reduction in water usage and proper waste management are the other key areas that help ensure environmental sustainability and minimise corporate footprint in these areas. As an active corporate citizen, SPH and SPH Foundation have a wide spectrum of social and environmental projects to contribute to the well being and development of the community. SPH has won many accolades for its diverse corporate social responsibility efforts, but the biggest reward is knowing that it has shaped lives, won hearts and empowered minds. Stakeholder Engagement SPH is committed to establishing strong and mutually beneficial relationships with its diverse base of stakeholders. It maintains active engagement with them through open communication channels, thereby earning their trust and understanding over time. It employs both formal and informal means to understand its stakeholders’ concerns, secure their buy-in and manage their expectations promptly. SPH believes that the key to its organisational success is underlined by having the unstinting support of its stakeholders. Annual Report 2014 69 STAKEHOLDERS MEANS AND METHODS EXPECTATIONS OUR SOLUTIONS EMPLOYEES SPH engages all staff across News Centre, Media Centre and Print Centre via emails, intranet, staff broadcasts, internal staff publications, SPH Family Day, SPH Games Day, Up on the Roof monthly networking sessions, lunchtime talks, CEO/Chairman visits and dialogues etc. To work in a conducive and pleasant environment where there is selfdevelopment and productivity, and user-friendly means to apply for leave and courses. SPH adopts good human resource policies and practices that promote fairness, safe working conditions, reward good performance, encourage teamwork, ensure career growth and provide work-life balance, e.g. through provision of nursing rooms and encouraging staff to take part in sports and leisure events such as SPH Games Day and SPH Family Day. There are also email channels for staff to provide their feedback to the management to facilitate communication. To be kept updated on the company’s latest strategic developments, empowering them to feel greater loyalty and ownership. To pick up tips for personal development to achieve career growth and work-life balance. TRADE UNIONS SPH continuously engages in twoway dialogue with the unions, and conduct regular reviews of human resource practices. To gain access to employees to promote membership in the trade unions, as well as engagement with all levels of management to ensure a two-way dialogue. SPH has open communication channels with the unions and engages them on both official and non-official occasions. CUSTOMERS SPH uses social media platforms (Facebook, Twitter, YouTube) and employs surveys, advertisements, hotline numbers and email accounts to connect with customers. To have on-time delivery of newspapers and up-to-date, reliable online news and content, anytime and anywhere. SPH ensures reliable newspaper delivery services, prompt handling of complaints and maintaining high levels of customer service for issues management. SUPPLIERS SPH seeks requests for quotations, To comply with terms and proposals and tenders, and engages conditions of the company’s existing in meetings, email correspondences purchasing policies and procedures. and tele-conferences for discussions. To be familiar with new procurement policies and not to engage in any fraud or impropriety in dealings with staff. SPH will design fair-value and competitive-based policies and best practices that ensure a fair selection of suppliers and an ethical procurement process. DISTRIBUTORS/ RETAILERS/ TENANTS SPH conducts regular meetings, visits, emails and regular correspondences. SPH conducts regular sales planning and support, with frequent visits by account managers to tenants and offering a designated channel for prompt attention. It also uses social media platforms (Facebook, Twitter, YouTube), iPhone apps as well as surveys to engage shoppers. Advertisements, in-mall posters, direct mailers and EDMs are used to promote events and promotions. To receive goods and products in an orderly and timely manner, and delivering a memorable retail experience for shoppers. To explore ideas for partnerships to deliver memorable shopping experiences. Shoppers can also correspond via a customer service hotline or email service. BUSINESS PARTNERS SPH conducts regular meetings, email correspondences, and teleconferencing. To engage in collaborative partnerships to grow the business. By engaging suitable partners to pursue mutually beneficial business objectives to achieve growth and profitability. INVESTORS/ SHAREHOLDERS The Investor Relations and Corporate Communications & CSR divisions carry out meetings, engage in email correspondences, participate in investor roadshows, and help organise the Annual General Meeting. To receive accurate and timely information on company progress and profitability, with updates on company’s future plans. SPH strives to generate optimum returns on investment, practice good corporate governance, transparency and disclosure, as well as sustainable and long term growth of business. It keeps the financial community fully updated with correct and timely information on the company’s future plans. 70 Singapore Press Holdings STAKEHOLDERS MEANS AND METHODS EXPECTATIONS OUR SOLUTIONS LOCAL COMMUNITIES SPH engages the community through To have a company that is a outreach programmes, corporate responsible and caring corporate sponsorships and donations, as citizen, serving the communities. part of SPH’s corporate social responsibility efforts. By having a wide range of community outreach programmes and organising meaningful and impactful charitable events like the SPH Red Apple Day, SPH Gift of Music concerts and sponsoring environmental projects such as the Amazon Flooded Forest at the River Safari. MEDIA AND INDUSTRY PARTNERS SPH issues media releases, media To have access to latest company advisories, invitations, and host announcements, corporate news and developments of the media industry. visits for corporate and industry partners eg Institute of Public Relations Singapore. The Corporate Communications & CSR Division also meets up with the media regularly. By providing timely and accurate information on latest company developments and news on a regular basis. GOVERNMENT AND REGULATORS SPH conducts regular meetings with appropriate government agencies’ officials. To ensure the company complies By complying with existing laws with guiding policies and regulations and having policies and procedures and addresses pertinent issues. to ensure adherence and sustainability of the business. Giving feedback to regulators on their new laws and policies. TRADE ASSOCIATIONS Joining relevant trade associations. ADVOCACY GROUPS Meetings, sponsorships and AND CHARITABLE meaningful collaborations AND WELFARE on events. ORGANISATIONS For the company to lend support and voice out various concerns and issues faced by the industry. By contributing via active membership and participation in industry forums and dialogues. For the company to have responsible business practices, reducing impact on the environment and disclosing information pertaining to business growth and sustainability. By working with advocacy groups e.g. on conservation projects that seek to reduce environmental impacts, and supporting charitable causes. Trade membership SPH has established strategic partnerships and linkages with a diverse range of local and overseas corporate members and public bodies: • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • AdAsia Adbase Users Group Advertising Standards Authority of Singapore ASEAN Newspaper Printers Association Of Media Owners (Singapore) Audit Bureau of Circulations AustCham Business China Central Singapore Development Council Contact Centre Association of Singapore Digital Filipino FIPP (the worldwide magazine media association) Fire Safety Managers’ Association Singapore GOSS Metro User Id-ecomerce Interactive Advertising Bureau SEA (Singapore Chapter) Institute of Advertising Singapore International Classified Media Association Institute of Internal Auditors International News Media Association Internet and Mobile Marketing Association of the Philippines Institute of Public Relations Singapore Institute of Policy Studies Institute of Technical Education Interactive Advertising Bureau SEA (Singapore Chapter) Magazines Publishers Association Singapore Malaysia Digital Association Marketing Institute of Singapore Master Printing System Club Management Development Institute of Singapore Newspaper Association of America • • • • • • • • • • • • • • • • • • • • • • • • • • • • • National Safety and Security Watch Group Orchard Road Business Association Real Estate Developers’ Association of Singapore RISI (Resource Information Systems Inc) Pacific Area Newspaper Publishers’ Association Inc Security Industry Institute Singapore Academy of Law Singapore Association of the Institute of Chartered Secretaries & Administrators Singapore Business China Singapore Business Federation Singapore Chinese Chamber of Commerce and Industry Singapore Compact Singapore Human Resources Institute Singapore International Chamber of Commerce Singapore Institute of Directors Singapore Institute of Management Singapore Institute of Safety Officers Singapore Law Academy Singapore National Employers Federation Singapore Retailers’ Association Singapore Press Club Singapore Vehicle Traders Association Southeast Community Development Council The Association of Accredited Advertising Agents Singapore The Association of Shopping Centres (Singapore) The Society of News Design The Society of Publishers in Asia Workplace Safety and Health Council World Association of Newspapers and News Annual Report 2014 71 CORPORATE GOVERNANCE REPORT SPH is committed to achieving high standards of corporate governance, to promote corporate transparency and to enhance shareholder value. SPH is pleased to confirm that it has adhered to the principles and guidelines of the Code of Corporate Governance 2012 (the “Code”). In so far as we have not complied with any guideline, we have provided the reason. The Annual Report should be read in totality for SPH’s full compliance. BOARD MATTERS Board’s Conduct of its Affairs Principle 1: Board’s Leadership and Control The Board is collectively responsible for providing overall strategy and direction to the Management and the Group. Through the Board’s leadership, the Group’s businesses are able to achieve sustainable and successful performance. Matters requiring the Board’s decision and approval include: 1. Major funding proposals, investments, acquisitions and divestments including the Group’s commitment in terms of capital and other resources; 2. The annual budgets and financial plans of the Group; 3. Annual and quarterly financial reports; 4. Internal controls and risk management strategies and execution; and 5. Appointment of directors and key management staff, including review of performance and remuneration packages. The Group has in place, financial authorisation limits for matters such as operating and capital expenditure, credit lines and acquisition and disposal of assets and investments, which require the approval of the Board. All Directors are expected to objectively discharge their duties and responsibilities at all times as fiduciaries in the interests of the Group. However, to ensure that specific issues are subject to in-depth and timely review, certain functions have been delegated to various Board Committees, which would submit its recommendations or decisions to the Board. The Board Committees constituted by the Board are the Executive Committee, Audit Committee, Remuneration Committee, Nominating Committee and Board Risk Committee. Each of these Board Committees has its own terms of reference. The Executive Committee’s (“EC”) principal responsibilities are:1. To review, with Management, and recommend to the Board the overall corporate strategy, objectives and policies of the Group, and monitor their implementation; 2. To consider and recommend to the Board, the Group’s five year plan and annual operating and capital budgets; 3. To review and recommend to the Board proposed investments and acquisitions of the Group which are considered strategic for the long-term prospects of the Group; 4. To approve the Company’s asset allocation strategy, appointment and termination of external fund managers and investment/ divestment of securities and review investment guidelines, treasury management and investment performance; 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. 72 Singapore Press Holdings CORPORATE GOVERNANCE REPORT Details of other Board Committees are as set out below: 1. Audit Committee (principle 12); 2. Remuneration Committee (principle 7); 3. Nominating Committee (principle 4); and 4. Board Risk Committee (principle 11). The names of the members of the Board Committees are set out in the Corporate Information page of this Annual Report. Board Attendance The Board meets on a quarterly basis and as warranted by particular circumstances. Seven Board meetings were held in the financial year ended 31 August 2014 (“FY 2014”), of which four were the regular quarterly meetings and three additional meetings were convened to discuss other important and strategic matters. The number of regular Board meetings for FY 2014 was increased to six to facilitate discussions among Directors on more strategic matters. A Director who is unable to attend any meeting in person may participate via tele-conference. The attendance of the Directors at meetings of the Board and Board Committees, and the frequency of such meetings, is disclosed on page 85. A Director who fails to attend three Board meetings consecutively, without good reason, will not be nominated by the Nominating Committee (“NC”) for re-appointment and will be deemed to have resigned. Training for Directors Upon the appointment of a Director, he is provided with a formal letter setting out his key responsibilities. A comprehensive orientation and induction programme, including site visits to the Group’s operations centres, is also organised for new Directors to familiarise them with the Group’s business, operations, organisation structure and corporate policies. They are briefed on the Company’s corporate governance practices, regulatory regime and their duties as Directors. Directors are updated regularly on changes in relevant laws and regulations; industry developments; business initiatives and challenges; and analyst and media commentaries on matters related to the Company and the media industry. Directors are informed and encouraged to attend relevant training programmes conducted by the Singapore Institute of Directors, Singapore Exchange Limited, and business and financial institutions and consultants. For FY 2014, Directors were provided with training in the areas of data analytics, cyber risks and risk management essentials, in addition to updates on internal controls and regulatory requirements. Directors may, at any time, request for further explanations, briefings or informal discussions on any aspect of the Group’s operations or business issues from Management. They are also informed about matters such as the Code of Dealings in the Company’s shares as they are privy to price sensitive information. Annual Report 2014 73 Board Composition and Guidance Principle 2: Strong and Independent Board Currently, the Board comprises 12 Directors, all of whom, except for the Chief Executive Officer (“CEO”), are non-executive and independent Directors. Each Director has been appointed on the strength of his/her calibre and experience. As a group, the Directors possess core competencies such as accounting, finance, business or management experience, industry knowledge and strategic planning experience. For effective deliberation and decision-making, the Directors have decided that the optimum size for the Board shall not exceed 12. There is a strong independence element in the Board, with the NC considering 11 out of 12 Directors to be independent from Management. The independence of each Director is assessed by the NC in accordance with Guideline 2.3 of the Code. Professor Cham Tao Soon and Mr Sum Soon Lim have each served on the Board for more than nine years.The NC has taken into consideration Guideline 2.4 and conducted a rigorous review of their contributions to the Board to determine if they have maintained the status of independence as defined by Guideline 2.3. The NC is satisfied that both Professor Cham and Mr Sum have remained independent in their judgment and have discharged their duties objectively. In the determination of the independence of Professor Cham by the NC, Professor Cham had recused himself. Professor Cham and Mr Sum will not be putting themselves up for re-election at the Annual General Meeting on 2 December 2014 (“2014 AGM”). In relation to Mr Lucien Wong, the NC had determined that even though the total fees billed by Allen & Gledhill (of which Mr Wong is a partner) to the Group in FY 2014 exceeded $200,000, his independence had not been compromised as this amount did not constitute a significant proportion of the law firm’s total legal fees. Key information regarding the Directors, including directorship and chairmanship both present and those held over the preceding three years in other listed companies, and other principal commitments, are set out in the Board of Directors’ section and on pages 24 to 27 which provides further information on them. The Board and Management are given opportunities to engage in open and constructive debate for the furtherance of strategic objectives. All Board members are supplied with relevant, complete and accurate information on a timely basis and non-executive Directors may challenge Management’s assumptions and also extend guidance to Management, in the best interest of the Group. Non-executive Directors meet at least once annually without the presence of Management. 74 Singapore Press Holdings CORPORATE GOVERNANCE REPORT Chairman and Chief Executive Officer Principle 3: Clear division of responsibilities between Chairman and Chief Executive Officer to ensure a balance of power and authority The Chairman and CEO of the Company are separate persons. The Chairman is a non-executive and independent Director and also chairs the EC. He sets the agenda for Board meetings, ensures that adequate time is available for discussion of all agenda items, in particular, strategic issues, and that complete, adequate and timely information is made available to the Board. He encourages constructive relations within the Board and between the Board and Management, facilitates the effective contribution of non-executive Directors, and ensures effective communications with shareholders. He takes a lead role in promoting high standards of corporate governance, with the full support of the Directors, the Company Secretary and Management. The Chairman and the CEO are not related. The CEO bears executive responsibility for the Group’s business and implements the Board’s decisions. The roles of the Chairman and the CEO are kept separate to ensure an appropriate balance of power, increased accountability and greater capacity of the Board for independent decision-making. The Company does not have any lead Independent Director given that the Chairman and CEO are not the same person and are not immediate family members; the Chairman is not a part of the management team and is an independent Director. Board Membership Principle 4: Formal and transparent process for appointment of new directors The Board reviews the composition of the Board and Board Committees periodically, taking into account the need for progressive renewal of the Board and each Director’s competencies, commitment, contribution and performance. To ensure that the governance and business needs of the Group are adequately addressed, the NC regularly reviews the capabilities of the Directors collectively by taking into account their skills, experience, gender, and company and industry knowledge. The NC is chaired by Professor Cham Tao Soon and comprises Dr Lee Boon Yang, Ms Chong Siak Ching and Mr Ng Ser Miang. The NC agrees that as a guide, the Board shall have a maximum of 12 Directors, given that the optimum size of a Board for effective deliberation and decision making is between 10 and 12. It regularly reviews the balance and mix of expertise, skills and attributes of the Directors in order to meet the business and governance needs of the Group, shortlists candidates with the appropriate profile for nomination or re-nomination and recommends them to the Board for approval. It looks out for suitable candidates to ensure continuity of Board talent. Some of the selection criteria used are integrity, independent mindedness, diversity of competencies, ability to commit time and effort to the Board, track record of good decision-making, experience in high-performing companies and financial literacy. The Committee may seek advice from external search consultants where necessary. Annual Report 2014 75 The NC regards succession planning as an important part of corporate governance and has an internal process of succession planning for the Chairman, Directors and the CEO to ensure the progressive and orderly renewal of Board membership. The NC has adopted internal guidelines addressing competing time commitments that arise when Directors serve on multiple boards and have other principal commitments. As a guide, Directors should not have more than six listed company board representations and other principal commitments. The NC monitors and determines annually whether Directors who have multiple board representations and other principal commitments, are able to give sufficient time and attention to the affairs of the Company and adequately carry out his duties as a Director of the Company. The NC takes into account the results of the assessment of the effectiveness of the individual Director and his actual conduct on the Board, in making this determination. The NC was satisfied that in FY 2014, where a Director had other listed company board representations and/or other principal commitments, the Director was able to carry out and had been adequately carrying out, his duties as a Director of the Company. As a matter of corporate governance, all Directors submit themselves for re-nomination and re-election once every three years. Article 111 of the Articles requires one-third of the Directors, or the number nearest to but not less than one- third, to retire by rotation at every annual general meeting (“AGM”). These Directors may offer themselves for re-election, if eligible. Directors of or over 70 years of age are required to be re-elected every year at the AGM under Section 153(6) of the Companies Act before they can continue to act as a Director. The NC reviews annually whether a Director or potential candidate for the Board is considered an independent director bearing in mind the Code’s definition of an “independent director” and guidance as to the relationships, the existence of which would deem a Director not to be independent (Guideline 2.3). The appointment of Directors is also in accordance with Section 10 of the Newspaper and Printing Presses Act (Cap 206). The Board does not appoint alternate directors as recommended by Guideline 4.5 of the Code. The NC has ascertained that for the period under review, all non-executive Directors are independent and that Directors have devoted sufficient time and attention to the Group’s affairs. 76 Singapore Press Holdings CORPORATE GOVERNANCE REPORT Board Performance Principle 5: Formal assessment of the effectiveness of the Board and contribution of each director The NC reviews the Board’s performance on an annual basis, based on performance criteria as agreed by the Board, and decides how this may be evaluated. The Board has implemented a process for assessing the effectiveness of the Board as a whole, its Board Committees and for assessing the contribution by Directors to the effectiveness of the Board. This process includes having Directors complete a Questionnaire seeking their views on various aspects of Board performance, such as Board composition, information, process and accountability. The Company Secretary compiles Directors’ responses to the Questionnaire into a consolidated report. The report is discussed at the NC meeting and also shared with the entire Board. For FY 2014, the Questionnaire on the performance of the Board and Board Committees was reviewed in accordance with best practices on board evaluation. The Questionnaire was completed by Directors, and reviewed by the NC and then the Board. The NC assessed the performance of the Board as a whole, taking into account the Board’s composition and size, the Board’s access to information, Board processes, Board accountability, standard of conduct and performance of the Board’s principal functions and fiduciary duties, and guidance to and communication with the Management. The Chairman, together with the Chairman of the NC, also assessed the performance of individual Directors based on factors such as the Director’s attendance, preparedness, candour, participation and contribution at Board meetings and industry and business knowledge. Access to Information Principle 6: Provision of complete, adequate and timely information prior to board meetings and on an on-going basis The Board is provided with quarterly financial accounts, other financial statements and progress reports of the Group’s business operations, as well as analysts’ reports on the Company. The quarterly financial results and annual budget are presented to the Board for approval. The monthly internal financial statements are made available to members of the Board. The financial results are also compared against the budgets, together with explanations given for significant variances for the reporting period. The Board also receives regular updates on the industry and technological developments. Such reports enable Directors to keep abreast of key issues and developments in the industry, as well as challenges and opportunities for the Group. As a general rule, board papers are sent to Directors at least one week in advance in order for Directors to be adequately prepared for the meeting. Senior Management attends Board meetings to answer any query from the Directors. The Directors also have unrestricted access to the Company Secretary and Management at all times. Directors are entitled to request from Management and provided with such additional information as needed to make informed and timely decisions. The Company Secretary works closely with the Chairman in setting the agenda for board meetings. She attends all Board meetings and ensures that board procedures are followed and that applicable rules and regulations are complied with. Under the direction of the Chairman, the Company Secretary’s responsibilities include ensuring good information flow within the Board and its Board Committees, and between Management and non-executive Directors. The Company Secretary also organises orientation and training for new Directors, as well as provides updates and advises Directors on all governance matters. The Articles provide that the appointment and removal of the Company Secretary is subject to the approval of the Board. Should Directors, whether as a group or individually, need independent professional advice relating to the Company’s affairs, the Company Secretary will appoint a professional advisor to render the relevant advice and keep the Audit Committee (“AC”) informed of such advice. The cost of such professional advice will be borne by the Company. Annual Report 2014 77 Remuneration Matters Principle 7: Formal and transparent procedure for fixing remuneration packages of directors The Remuneration Committee (“RC”) is chaired by Dr Lee Boon Yang and comprises Mr Lucien Wong, Ms Tan Yen Yen and Mr Bahren Shaari, all of whom are non-executive and independent Directors. The RC sets the remuneration guidelines of the Group for each annual period, including the structuring of long-term incentive plans, annual salary increases and variable and other bonuses for distribution to employees. It administers the SPH Performance Share Plan (“Plan”) and the Singapore Press Holdings Group (1999) Share Option Scheme (“1999 Scheme”). The RC also reviews the remuneration framework (covering all aspects of remuneration including but not limited to Directors’ fees, salaries, allowances, bonuses, options, share-based incentives and awards, and benefits in kind) and specific remuneration packages of Directors including that of the CEO, and key management and submits its recommendations to the Board for endorsement. The RC reviews any overly-generous obligation on the part of the Company in the event of termination, to ensure that such contracts contain fair and reasonable termination clauses. The RC also aims to be fair and avoid rewarding poor performance. There are no termination, retirement and post-employment benefits granted to Directors, the CEO or the top five key management personnel in FY 2014. The RC may seek expert advice inside and/or outside of the Company on remuneration of Directors and staff. It ensures that in the event of such advice being sought, existing relationships, if any, between the Company and its appointed remuneration consultants will not affect the independence and objectivity of the remuneration consultants. In FY 2014, Carrots Consulting was engaged to advise on staff remuneration matters and it is confirmed that the consultants do not have any relationship with the Company. Level and Mix of Remuneration Principle 8: Appropriate remuneration to attract, retain and motivate directors and key management The level and mix of remuneration for Directors and key management is set out under Principle 9. The Company takes into account its long term interests and risk policies and has structured remuneration packages on measured performance taking into account financial and non-financial factors. Disclosure on Remuneration Principle 9: Clear disclosure on remuneration policy, level and mix Directors’ Remuneration For the period under review, the CEO’s remuneration package includes a variable bonus element and performance share grant, which are based on the Company’s and individual performance and have been designed to align his interests with those of shareholders. As an executive Director, the CEO does not receive Directors’ fees. Non-executive Directors, including the Chairman, are paid Directors’ fees, subject to the approval of shareholders at the AGM. Directors’ fees comprise a basic retainer fee, fees in respect of service on Board Committees, attendance fees, as well as fees for participation in special projects, adhoc committees and subsidiary boards. The Directors’ fees are appropriate to the level of contribution, taking into account factors such as effort and time spent, and the responsibilities of the Directors. 78 Singapore Press Holdings CORPORATE GOVERNANCE REPORT The Directors’ fee structure for service on the Board and Board Committees is as follows: S$ Non–executive Chairman Deputy Chairman Non–executive Director Audit Committee Chairman Audit Committee Member Nominating/Remuneration/Board Risk Committee Chairman Nominating/Remuneration/Board Risk Committee Member Executive Committee Chairman Executive Committee Member 115,000 78,000 60,000 37,500 22,500 22,500 12,500 40,000 25,000 The attendance fees payable to Directors for attendance at each Board and Board Committee meeting are as follows: S$ Board meeting Board Committee or adhoc committee meeting $2,000 $1,000 A breakdown, showing the level and mix of each individual Director’s remuneration payable for FY 2014 is as follows:- Name of Director Directors’ Fees S$ Base/ Fixed Salary % Variable or Bonuses % Benefits in Kind % – 32.22% 34.27% 1.11% ShareBased* % Total S$ Executive Director Chan Heng Loon Alan(CEO) 32.40% 2,988,000 *Based on the fair values of performance shares granted in FY 2014. For details on the SPH Performance Share Plan, please refer to the Directors’ Report, Notes to the Financial Statements and the following page under Remuneration of Key Management Personnel. Independent Directors1 Below $250,000 Lee Boon Yang (Chairman) Cham Tao Soon (Deputy Chairman) Chong Siak Ching Ng Ser Miang Sum Soon Lim Lucien Wong Yuen Kuai Tan Yen Yen Bahren Shaari Quek See Tiat2 Tan Chin Hwee3 Willie Cheng Jue Hiang4 216,000 148,500 115,000 88,500 141,375 128,750 105,000 126,875 123,500 58,500 34,375 Notes: 1. Ms Janet Ang was not a Director as at 31 August 2014. 2. Mr Quek See Tiat was appointed as a Director on 1 September 2013. 3. Mr Tan Chin Hwee was appointed as a Director on 1 March 2014. 4. Mr Willie Cheng resigned as a Director on 29 November 2013. – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – 216,000 148,500 115,000 88,500 141,375 128,750 105,000 126,875 123,500 58,500 34,375 Annual Report 2014 79 Remuneration of Key Management Personnel The Company adopts a remuneration system that is responsive to the market elements and performance of the Company and business divisions respectively. Taking note of the competitive pressures in the talent market, the Board has, on review, decided not to disclose the names of the Company’s top five executives. The CEO and top five executives of the Company in each remuneration band for this financial year are:- Name of Director Executive Director $2,750,000 to $2,999,999 Chan Heng Loon Alan (CEO) Directors' Fees $ Base/Fixed Salary % Variable or Bonuses % Benefits in Kind % – 32.22% 34.27% 1.11% No. of Executives Base/Fixed Salary % Variable or Bonuses % Benefits in Kind % 1 1 1 1 1 38.86% 33.68% 37.24% 48.26% 49.55% 30.79% 29.08% 31.42% 29.38% 29.87% 0.03% 1.32% 0.07% 0.07% 0.07% ShareBased* % 32.40% Total $ 2,988,000 Key Management Personnel Remuneration Bands Between $1,500,000 to $1,749,999 Between $1,250,000 to $1,499,999 Between $1,000,000 to $1,249,999 Between $750,000 to $999,999 Between $500,000 to $749,999 * Sharebased * % 30.32% 35.92% 31.27% 22.29% 20.51% Total % 100% 100% 100% 100% 100% Based on the fair values of performance shares granted in FY 2014. 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 include club and car benefits. The RC approves the bonus for distribution to staff based on individual performance. The above remuneration bands include performance shares granted to staff under the Plan. The Plan was approved by shareholders at an Extraordinary General Meeting held on December 5, 2006 and is administered by the RC. Staff who participate in the Plan are a selected group of employees of such rank and service period as the RC may determine or as selected by the RC. Awards initially granted under the Plan are conditional and based on performance assessed over a multi-year performance period. The conditions for such awards were chosen as they reflect medium to longer-term corporate objectives and include both market and non-market conditions. Market conditions include Absolute Total Shareholder Return versus cost of equity and Relative Total Shareholder Return against ST All-Share Index. Non-market conditions include Newspaper Business Free Cash Flow, market competitiveness, quality of returns including sales, efficiency, productivity and profit, and business and productivity growth. The Plan contemplates the award of fully-priced shares, their equivalent cash value or combinations thereof, free of charge, provided that certain prescribed performance conditions are met, and upon expiry of the prescribed vesting periods. 80 Singapore Press Holdings CORPORATE GOVERNANCE REPORT Senior executives are encouraged to hold a minimum number of shares under the share ownership guideline which requires them to maintain a beneficial ownership stake in the Company, thus further aligning their interests with shareholders. Furthermore, under an Economic-Value-Added or EVA-driven performance bonus scheme for senior executives, a notional variable bonus bank account is set up for each participating senior executive, into which the annual performance bonus earned by him each year is credited. 1/3 of the total variable bonus bank account, which includes the balance brought forward from the previous year, is paid out, With the balance 2/3 carried forward to the next year. Key senior executives in the Group have been on this EVA-driven performance bonus scheme since the mid-2000s. Details on the 1999 Scheme and the Plan and the incentives issued, can be found in the Directors’ Report and Notes to the Financial Statements. Under the 1999 Scheme and the Plan, the RC has the discretion to determine if an executive is involved in misconduct, resulting in the forfeiture or lapse of the incentive components of his remuneration or awards, to the extent that such incentive or award has not been released or disbursed. The annual aggregate remuneration paid to the top five key management personnel of the Company (excluding the CEO) for FY 2014 is $5,445,000. No employee of the Group was an immediate family member of any Director or the CEO and whose remuneration exceeded $50,000 per annum, during this financial year. Accountability and Audit Principle 10: Board presents the company’s performance, position and prospects The Board announces its quarterly and full-year financial results which present a balanced and informed assessment of the Company’s performance, position and prospects via public announcements and through the SGXNET. The Board takes adequate steps through the establishment of appropriate internal policies to ensure compliance with legislative and regulatory requirements, including requirements under the listing rules of the securities exchange. The Management provides the Board with management accounts and such explanation and information on a regular basis and as the Board may require from time to time, to enable the Board to make a balanced and informed assessment of the Company’s performance, position and prospects. Risk Management and Internal controls Principle 11: Risk governance and sound system of internal controls The Board Risk Committee (“BRC”) assists the Board in overseeing the risk governance in the Company to ensure that Management maintains a sound system of risk management and internal controls to safeguard shareholders’ interests and the Company’s assets. It also determines the nature and extent of the significant risks which the Board is willing to take in achieving its strategic objectives. Annual Report 2014 81 The BRC is made up of four non-executive and independent Directors, namely, Mr Quek See Tiat (Chairman), Mr Sum Soon Lim, Mr Tan Chin Hwee and Ms Tan Yen Yen. Mr Quek and Mr Sum are members of both the BRC and the AC together with Mr Tan who was appointed on 1 March 2014. The BRC’s objectives include the following: a. Oversee and advise the Board on the Group’s risk exposure, risk appetite and risk strategy; b. Review and guide Management in the formulation of the Group’s risk policies and in the execution of risk assessment processes and mitigation strategies; and c. Annually review the adequacy and effectiveness of the Group’s risk management and internal control systems, including financial, operational, compliance and information technology controls. The Risk Management Department implements the Group’s risk management policies and processes, and develops the framework to assist the operating units in identifying, monitoring and managing the risks within the Group. The framework strengthens the Group’s capability to recognise and capitalise on new challenges and opportunities so as to add value to Management’s decision-making, business planning, resource allocation and operational management. The Risk Management Report is found on page 86. 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 noncompliance or lapses in internal controls together with corrective measures are reported to the AC. Based on the audit reports and management controls in place, the AC is satisfied that the internal control systems provide reasonable assurance that assets are safeguarded, that proper accounting records are maintained and financial statements are reliable. In the course of their statutory audit, the Company’s external auditors will highlight any material internal control weaknesses which have come to their attention in carrying out their normal audit, which is designed primarily to enable them to express their opinion on the financial statements. Such material internal control weaknesses noted during their audit, and recommendations, if any, by the external auditors are reported to the AC. The CEO and Chief Financial Officer at the financial year-end have provided a letter of assurance on the integrity of the financial records/statements, as well the effectiveness of the Company‘s risk management and internal control systems. Such assurance includes the following : • internal controls were established and maintained; • material information relating to the Company is disclosed on a timely basis for the purposes of preparing financial statements; and • the Company‘s internal controls were effective as at the end of the financial year. Based on the internal controls established and maintained by the Group, work performed by the internal and external auditors, and regular reviews performed by Management, the Board and relevant Board Committees, the AC and the Board are of the opinion that the Group’s risk management systems and internal controls were adequate and effective as at 31 August 2014 to address financial, operational, compliance and information technology risks, which the Group considers relevant and material to its operations. 82 Singapore Press Holdings CORPORATE GOVERNANCE REPORT The Board notes that the system of internal controls provides reasonable, but not absolute, assurance that the Group will not be affected by any event that could be reasonably foreseen as it strives to achieve its business objectives. In this regard, the Board also notes that no system can provide absolute assurance against the occurrence of material errors, poor judgment in decision-making, human error, fraud or other irregularities. Code of Dealings in Securities The Group has in place a Code of Dealings in SPH’s securities, which prohibits dealings in SPH securities by all Directors of the Company and its subsidiaries, and certain employees, within certain trading periods. The “black-out” periods are two weeks prior to the announcement of the Company’s financial statements for each of the first three quarters of its financial year and one month prior to the announcement of the Company’s full year financial statements. Directors and employees are also reminded to observe insider trading laws at all times, and not to deal in SPH securities when in possession of any unpublished price-sensitive information regarding the Group, or on short-term considerations. The Company issues quarterly reminders to its Directors, relevant officers and employees on the restrictions in dealings in listed securities of the Group as set out above, in compliance with Rule 1207(19) of the SGX Listing Manual. AUDIT COMMITTEE Principle 12: Establishment of an Audit Committee with written terms of reference The AC currently comprises five members, all of whom are independent non-executive Directors. The Chairman of the AC is Mr Bahren Shaari and its members are Ms Chong Siak Ching, Mr Quek See Tiat, Mr Sum Soon Lim and Mr Tan Chin Hwee. 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 given their experience as directors and/or senior management in accounting and financial fields. The AC performs the functions as set out in the Code including the following: a. Reviewing the annual audit plans and audit reports of external and internal auditors; b. Reviewing the balance sheet and profit and loss account of the Company and the consolidated balance sheet and profit and loss accounts of the Group before they are submitted to the Board for approval; c. Reviewing the significant financial reporting issues and judgments so as to ensure the integrity of the financial statements of the Company and any announcements relating to the Company’s financial performance; d. Reviewing the auditors’ evaluation of the system of internal accounting controls; e. Reviewing and reporting to the Board on the adequacy and effectiveness of the Company’s internal controls, including financial, operational, compliance and information technology controls; f. Reviewing the scope, results and effectiveness of the internal audit function; g. Reviewing the scope, results and effectiveness of the external audit, and the independence and objectivity of the external auditors annually, and the nature and extent of non-audit services supplied by the external auditors so as to maintain objectivity; h. Making recommendations to the Board on the appointment, re-appointment and removal of the external auditors, and approving the remuneration and terms of engagement of the external auditors; i. Reviewing the Company’s whistle-blowing policy, and to ensure that arrangements are in place for concerns about possible improprieties in matters of financial reporting or other matters to be raised and independently investigated, and for appropriate follow-up action to be taken; j. Overseeing any internal investigation into cases of fraud and irregularities; Annual Report 2014 83 k. Reviewing any interested person transaction; l. Approving the hiring, removal, evaluation and compensation of the head of the internal audit function; and m. Ensuring that the internal audit function is adequately resourced and has appropriate standing within the Company. The AC has the authority to investigate any matter within its terms of reference, full access to and co-operation by management, and full discretion to invite any Director or executive officer to attend its meetings, and reasonable resources to enable it to discharge its functions properly. The AC has conducted an annual review of the performance of the external auditor and the volume of non-audit services to satisfy itself that the nature and extent of such services will not prejudice the independence and objectivity of the external auditors, before confirming their re-nomination. Details of the aggregate amount of fees paid to the external auditors for FY 2014, and a breakdown of the fees paid in total for audit and non-audit services respectively, can be found on page 167. The AC meets with the external and internal auditors, in each case, without the presence of Management, at least once a year. The audit partner of the external auditors is rotated every five years, in accordance with the requirements of the SGX Listing Manual. Quarterly financial statements and the accompanying announcements are reviewed by the AC before presentation to the Board for approval, to ensure the integrity of information to be released. During the financial year, the AC reviewed the quarterly financial statements prior to approving or recommending their release to the Board, as applicable; the annual audit plan of the external and internal auditors and the results of the audits performed by them, the list of interested person transactions and non-audit services rendered by the external auditors, and the re-appointment of the external auditors and its remuneration. Management’s assessment of fraud risks, adequacy of the whistle-blower arrangements and whistle- blower complaints are reviewed by the AC. The AC takes measures to keep abreast of the changes to accounting standards and issues which have a direct impact on financial statements, with training conducted by professionals or external consultants. The Company confirms that the appointment of the external auditors is in accordance with Rules 712 and 715 of the SGX Listing Manual. None of the AC members is a former partner of the Group’s existing auditing firm. Code of Business Ethics and Employee Conduct Policy The Group has an existing Code of Business Ethics and Employee Conduct Policy (“Ethics Code”), which is posted on the Company’s intranet website, to regulate the ethical conduct of its employees. The Group also has a Whistleblowing Policy & Procedure which is posted on the SPH Corporate website, to allow staff and external parties such as suppliers, customers, contractors and other stakeholders, to raise concerns or observations in confidence to the Company, about possible irregularities for independent investigation and appropriate follow up action to be taken. Such concerns include dishonesty, fraudulent acts, corruption, legal breaches and other serious improper conduct; unsafe work practices and any other conduct that may cause financial or non-financial loss to the Group or damage to the Group’s reputation. The Whistleblowing Policy encourages staff and external parties to identify themselves whenever possible to facilitate investigations, but will also consider anonymous complaints, in certain circumstances. It makes available to staff and external parties the contact details of the Receiving Officer, who may also forward the concern to the respective Heads of Division, CEO, AC Chairman and/or Chairman. 84 Singapore Press Holdings CORPORATE GOVERNANCE REPORT Internal Audit Principle 13: Establishment of an internal audit function that is independent of the functions it audits IAD is staffed with ten audit executives, including the Head of Internal Audit. Most of the IAD staff have professional qualifications, and are members of the Institute of Internal Auditors, Inc. (“IIA”). Some are qualified IT auditors and/or Certified Fraud Examiners. All IAD staff have to adhere to a set of code of ethics adopted from The Institute of Internal Auditors, Inc. The Head of Internal Audit reports directly to the Chairman of the AC on audit matters, and to the CEO on administrative matters. IAD has adopted the Standards for Professional Practice of Internal Auditing set by IIA and ensures staff competency through the recruitment of suitably qualified and experienced staff, provision of formal and on-the-job training, and appropriate resource allocation in engagement planning. The AC reviews IAD’s reports on a quarterly basis. The AC also reviews and approves the annual IA plans and manpower to ensure that IAD has the necessary resources to adequately perform its functions. The AC approves the hiring, removal, evaluation and compensation of the head of the internal audit function and she is provided with access to the AC. Shareholder Rights & Responsibilities Principle 14: Fair and equitable treatment of shareholders The Group encourages shareholder participation, and ensures that shareholders have the opportunity to participate effectively at general meetings. All SPH shareholders are treated fairly and equitably to facilitate the exercise of their ownership rights. To facilitate the exercise of shareholders’ rights, the Company ensures that all material information relating to the Company and its financial performance is disclosed in an accurate and timely manner via SGXNET. Shareholders are also informed of rules, including voting procedures that govern the general meeting. Any notice of a general meeting of shareholders is issued at least 14 days before the scheduled date of such meeting. The Company’s articles also allow any shareholder to appoint proxies during his absence, to attend and vote on his behalf at the general meetings. In addition, shareholders who hold shares through custodial institutions may attend the general meetings as observers. Communication with Shareholders Principle 15: Regular, effective and fair communication with shareholders The Company holds analysts’ briefings of its half-year and full-year results and a media briefing of its full year results. The quarterly financial results are published through the SGXNET, news releases and the Company’s corporate website. A webcast of the half-year and full-year results briefing is also available on the website. The date of release of the results is announced through SGXNET about two weeks in advance. The Company also conducts analysts’ briefings and investor roadshows to maintain regular dialogue with shareholders as well as to solicit and understand the views of shareholders. information disclosed is as descriptive, detailed and forthcoming as possible. The Company does not practise selective disclosure. Price-sensitive information is first publicly released through SGXNET, either before the Company meets with any investors or analysts or simultaneously with such meetings. All shareholders of the Company receive the summary financial report, and, on request, the full annual report, and notice of AGM, which is held within four months after the close of the financial year. The notice is also advertised in the newspapers. The summary financial report and the annual report are also available on the Company’s corporate website, www.sph.com.sg. SPH has been declaring dividends at half-year and final year-end. Any payouts are clearly communicated to shareholders in public announcements and via announcements on SGXNET when the Company discloses its financial results. Annual Report 2014 85 Conduct of Shareholder Meetings Principle 16: Greater shareholder participation at AGMs The Articles allow a shareholder to appoint one or two proxies to attend and vote instead of the shareholder. The Company does not allow a shareholder to vote in absentia at general meetings, except through the appointment of a proxy, attorney or in the case of a corporation, a corporate representative, to cast their vote in their stead. Resolutions are, as far as possible, structured separately and may be voted on independently. All polls are conducted in the presence of independent scrutineers. The Company also conducts electronic poll voting to ensure greater transparency and efficiency in the voting procedures. The results of the electronic poll voting are published instantaneously at the meeting. 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. The Company prepares minutes of general meetings and makes these minutes available to shareholders upon their request. All Directors, including the chairmen of the EC, AC, NC, RC and BRC, and senior management, are in attendance at the AGMs and Extraordinary General Meetings to allow shareholders the opportunity to air their views and ask Directors or Management questions regarding the Company. The external auditors also attend the AGMs to assist the Directors in answering any queries relating to the conduct of the audit and the preparation and content of the auditors’ report. Directors’ attendance at Board and Board Committee Meetings (for the financial year ended 31 August 2014) Name of Director1 Lee Boon Yang (Chairman) Cham Tao Soon (Deputy Chairman) Chan Heng Loon Alan (CEO) Bahren Shaari Willie Cheng Jue Hiang3 Chong Siak Ching Ng Ser Miang Quek See Tiat4 Tan Chin Hwee5 Sum Soon Lim Tan Yen Yen Lucien Wong Yuen Kuai Board Executive Committee 7 out of 7 7 out of 7 7 out of 7 7 out of 7 7 out of 7 1 out of 1 7 out of 7 7 out of 7 7 out of 7 3 out of 4 7 out of 7 7 out of 7 7 out of 7 7 out of 7 7 out of 7 – – – – – 1 out of 16 7 out of 7 – 6 out of 78 Audit Remuneration Committee Committee – – – 4 out of 4 1 out of 1 4 out of 4 – 3 out of 4 2 out of 2 3 out of 37 – – Nominating Committee Board Risk Committee 3 out of 3 2 out of 2 – – – 2 out of 22 1 out 1 – – – – – 2 out of 3 3 out of 3 2 out of 2 – – – 2 out of 2 2 out of 2 – – – – – – – – 1 out of 1 – – 5 out of 5 2 out of 3 4 out of 5 5 out of 5 2 out of 29 Notes : 1. Ms Janet Ang was not a Director as at 31.08.2014. 2. Mr Bahren Shaari was appointed as a member of the Remuneration Committee on 29.11.2013. 3. Mr Willie Cheng Jue Hiang resigned as a Director and a member of the Audit Committee, Remuneration Committee and Board Risk Committee on 29.11.2013. 4. Mr Quek See Tiat was appointed as a Director and a member of the Audit Committee and Board Risk Committee on 01.09.2013. Mr Quek was appointed as the Chairman of the Board Risk Committee on 29.11.2013. 5. Mr Tan Chin Hwee was appointed as a Director and a member of the Audit Committee and Board Risk Committee on 01.03.2014. 6. Mr Tan Chin Hwee was not a member of the Executive Committee but was invited to attend a meeting on 20 June 2014. 7. Mr Sum Soon Lim was appointed as a member of the Audit Committee on 29.11.2013. 8. Mr Lucien Wong was appointed as a member of the Executive Committee on 01.09.2013. 9. Mr Lucien Wong stepped down as a member of the Board Risk Committee on 01.03.2014. 86 Singapore Press Holdings RISK MANAGEMENT Risk Management Programme SPH has complied with the Risk Governance Guidelines for Listed Boards in relation to the management of the company’s risks and mitigation strategies and controls. The Board, working through the Board Risk Committee (BRC), is overall responsible for the governance of risk within the Group and ensures that Management maintains a sound system of risk management and internal controls to safeguard stakeholders’ interests and the company’s assets. In the process, the Board determines the nature and extent of the significant risks which the company is willing to take in achieving its strategic objectives. The Board is also involved in setting and instilling the right culture throughout the Company for effective risk governance. SPH advocates a continuous and iterative process for enhancing risk awareness across the organisation through an enterprise-wide risk management (ERM) framework which is largely benchmarked against the AS/NZS ISO 31000:2009 Risk Management – Principles and Guidelines. The framework provides the operating units and support functions (Business Units) a consistent approach for risk identification and institutes a common platform to discuss and manage risks. Together with the various Business Units, the Risk Management Department (RMD) identifies, manages and reports the key risks faced by the company to the BRC, which then updates the Board. RMD is also responsible for ensuring that the risk management framework is effectively implemented and that risk registers are maintained by the respective Business Units. All Business Units carry out a risk review on a regular basis, especially in the context of exceptional events, to ensure that risk registers are up-to-date and risk controls are enhanced and kept current. RMD makes quarterly reports on the company’s risk management activities which include operational, financial, compliance, information technology management, internal controls and risk management systems to the BRC. SPH’s risk management philosophy is built on a culture where risk exposures are mitigated by calibrating risks to acceptable levels whilst achieving the organisation’s business plans and goals. As part of the company’s efforts to ensure that risk management practices are firmly established at all levels, nominated risk coordinators from each Business Unit closely monitor and promptly flag risk events. Risks are systematically managed and reviewed at strategic, operational and project levels. Wherever possible, SPH practises risk transfer by purchasing relevant insurance policies such as Industrial Special Risks, Media Industry Professional Indemnity, Public Liability, Work Injury Compensation, Group Personal Accident and Fidelity Guarantee policies. In pursuit of SPH’s risk management philosophy, the following ERM principles apply: • Risks can be managed, but cannot be totally eliminated. • ERM is aligned with, and driven by, business values, goals and objectives. • Managers at each level must assume ownership of Risk Management. • Engagement of BRC on material matters relating to the various types of risks and development of risk controls and mitigation processes. • Risk management processes are integrated with other processes including budgeting, mid/long-term planning and business development. The key outputs of SPH’s Risk Management are: • Defining a common understanding of risk classification tolerance. • Identifying key risks affecting business objectives and strategic plans. • Identifying and evaluating existing controls and developing additional plans required to treat (mitigate, reduce, transfer, etc) these risks. • Implementing measures and processes to enable ongoing monitoring and review of risk severity and treatment effectiveness. • Identifying changes to risks or emerging risks and promptly bringing these to the attention of the Board where appropriate. The internal control framework of SPH is adequate. Where weaknesses and shortcomings were noted, appropriate actions were taken by the management to address them. All business units and Internal Audit Division regularly review the systems and processes to ensure the effectiveness of the existing controls. In the past year, there has been no significant change in SPH’s risk management environment. The Risk Management Department monitors the control environment and business processes to ensure that the risk treatments continue to be aligned with SPH’s strategic objectives. During the year, SPH adopted a forward-looking review of risks for the purposes of normalisation of common risks through a thematic approach. Each theme would be led by a sponsor together with each business unit to review the risks across the Group and to harmonise the treatments and controls at enterprise level. The themes cover Cyber Risks, Fraud Risks, Compliance and Regulatory Risks, Human Capital, Workplace, Health and Safety Risks and Readership and Circulation Risks. The following sections outline the risk environment that may impact the financial status and operational effectiveness of SPH’s businesses and the approaches to managing these risks. Economic and Business Risks Adverse macroeconomic conditions, globally and locally, have a significant impact on SPH’s principal business segments. SPH actively manages its risk exposure on the economic front by proactively streamlining its business processes and adopting prudent fiscal controls. A rapidly evolving multimedia landscape creates challenges to SPH’s core business. In order to stay ahead of such developments, SPH constantly assesses the risks affecting its business and plans to harness available opportunities to improve its existing products and services as well as creating new ones in response to customer needs. In addition, SPH has diversified into other business areas such as properties, events and offering digital platforms to reduce its dependency on print revenue. Annual Report 2014 Operational Risks As a large organisation with many functions and processes, SPH faces the risk of business operations failing due to human lapses. SPH’s system of internal controls is designed and operated to support the identification, evaluation and management of risks affecting the group at all operational levels. This system of internal controls focuses on the financial reporting process and the preparation of consolidated accounts and extends across all areas of operations. Operational risk management is integrated into the daily operations of all Business Units. These Business Units are assisted by RMD in the identification, assessment, mitigation and monitoring of risks in their operations. Technology & Cyber Risks In order to sustain the Group’s competitive edge in the media industry amidst rapid technology changes, SPH’s Information Technology Division plays a vital role by facilitating a thorough understanding of evolving risks in technology and cyber security. It also implements tight controls within the corporate systems to address the threats. In this respect, the Group’s Information Technology Acceptable Usage Policy is prescribed to guide all staff on appropriate and acceptable use of computing resources including computers, networks, hardware, software, email, applications and data in order to ensure the efficiency and integrity of these computing resources. All systems containing personal data are regularly reviewed to ensure that the security features are adequate for safeguarding and preventing unauthorised use or disclosure of any personal data that is in the Group’s possession. Businesses around the world are increasingly concerned about management of cyber risks, with news of how companies cope with mounting financial and reputational costs. As part of the on-going efforts to ensure effectiveness of the Group’s Information Technology requirements, SPH has tightened network and technology security policies and continued to invest in cyber defences. Regulatory/Compliance Risks SPH’s newspaper business is subject to the annual renewal of its printing licence and newspaper permit licence for each newspaper, pursuant to the provisions of the ‘Newspaper and Printing Presses Act’ (Chapter 206, Singapore Statutes). Failure on its part to comply with the Act may subject SPH to significant liabilities, such as fines, suspension, or the revocation of the licence. In addition, SPH is also obligated to comply with other statutory and regulatory requirements such as the Singapore Exchange Listing Manual requirements, the Companies Act, the Competition Act, and market practice codes prescribed by the Media Development Authority of Singapore. In response to such statutory and regulatory requirements, SPH has also implemented compliance frameworks that include instructional tools and processes to monitor the level of compliance and minimise any lapses. SPH has put in place formal processes for Workplace Safety and Health compliance to all office, warehouses, business and public services. In accordance with the new Energy Conservation Act, SPH will put in place controls at the main printing plant, to reduce energy consumption over the next five years using the energy consumption for 2013 as a base-line. 87 The Group is committed to comply with the requirements of the Personal Data Protection Act 2012 (PDPA) and has installed a compliance framework containing policies and practices to regulate the proper management of personal data in the Group. The organisation has a process where consent of individuals are obtained for use, collection and distribution of their personal data. In addition, the Group’s Privacy Policy Statement is published on its websites to provide the general public with information about how it collects, uses and discloses personal data in its business. Newsprint Cost Risks One of the main cost drivers in SPH business is newsprint prices. The cyclical fluctuation of newsprint prices has a substantial impact on newspaper publishing costs. A significant spike in newsprint price or a reduction in the availability of newsprint can result in higher production costs and impact on its operating margins. To mitigate against this, SPH adopts an appropriate newsprint stocking policy, taking into consideration demand and supply forecasts, which are reviewed periodically, and having a core group of reliable and responsible suppliers. Business Continuity Risks Availability and safety of its printing facilities, editorial functions and data centres are of paramount importance to SPH as its readers rely on SPH to provide them with timely and essential news via its suite of newspapers, online and mobile news and other services. SPH recognises the organisation’s exposure to internal and external threats and seeks to increase the resilience of the Group to potential business interruptions and to minimise the impact of a crisis on business operations, people and assets. The effective prevention and recovery for the organisation will ensure that SPH continues to maintain its competitive advantage and maximise value for its stakeholders. Towards this end, SPH has a comprehensive Business Continuity Planning programme (BCP) to minimise any disruptions to its critical business activities and ensure that the populace continues to be informed in the face of crisis. Simulation exercises are conducted, on location, periodically. Front-line staff, as well as operating and supporting Business Units are involved to ensure operational preparedness. The Group continues to scan for possible threats and establish plans to enhance its BCP. Fraud Risks Every organisation faces some risk of fraud incidents from within. SPH has a Code of Business Ethics and Employee Conduct (Code of Conduct) which states that the company does not tolerate any malpractice, impropriety, statutory non-compliance or wrongdoing by staff in the course of their work. The Code of Conduct covers areas such as fraud, business and workplace behaviour, safeguarding of assets, proprietary information and intellectual property. Any breach of the Code of Conduct may result in disciplinary action including dismissal or termination of the employment contract. A WhistleBlower Policy is published on the local network and internet (http://www.sph.com.sg/ corporate-governance whistleblowing-policy-procedure/) for staff and public information with a hotline number made available for complaints and any observations to be raised. 88 Singapore Press Holdings ENVIRONMENTAL RESPONSIBILITY SPH is committed to being a good corporate citizen that cares for the environment in which it operates in, and actively seeks to promote sustainable growth while achieving business excellence. SPH’s business operations comply with all applicable environmental, legal, health and safety requirements. It works closely with the Workplace Safety and Health Council, Singapore Civil Defence Force, Public Utilities Board, National Environment Agency, Building and Construction Authority, Energy Market Authority and other relevant authorities to ensure that it adopts the best practices for environment sustainability. SPH is also constantly looking for ways to reduce the negative impact on the environment by lowering its carbon emissions and improving energy efficiency in its daily operations. A Green Steering Committee is established to review environmental objectives and shape the green culture in the Group. CASE STUDY – SPH PRINT CENTRE WINS AT EENP AWARDS SPH was recognised for its commitment and achievements in energy conservation at the Energy Efficiency National Partnership (EENP) Awards 2014 held at the Devan Nair Institute for Employment and Employability. This is the first time that SPH has won this award. First launched in 2011, the EENP Awards is jointly organised by the National Environment Agency, Energy Market Authority and the Economic Development Board. The EENP Awards aims to foster a culture of sustained energy efficiency improvement in industry, especially among the major energy consuming industries. The EENP Awards also encourages companies to adopt a proactive approach towards energy management by identifying and sharing best practices. Mr Wong Tat Choon, Assistant Vice-President at SPH’s Production Division (Engineering), was named the Outstanding Energy Manager of the Year, under the SME category which he won for energy conservation work carried out at the SPH Print Centre. This award recognises outstanding Energy Managers (EMs) who have demonstrated leadership in driving energy efficiency improvements and promoting such initiatives within their organisations. He received the award from the event’s Guest-of-Honour Dr Vivian Balakrishnan, Minister for Environment and Water Resources. In his capacity as EM, Mr Wong has led the Print Centre energy team in conducting energy audits, identifying energy-saving measures and implementing energy conservation projects since 2007. For example, his projects to streamline the Print Centre’s Air Conditioning and Mechanical Ventilation (ACMV) equipment and processes and the introduction of energy-efficient LED lights and industrial fans have cut the centre’s overall energy usage by up to 14 per cent between 2007 till the first half of 2014. This translates to about six GWh per year or close to $1 million annually in utilities savings for the same period. Together with the SPH Green Committee comprising representatives from different divisions, Mr Wong also organised the SPH Green Day to raise staff awareness on the importance of energy conservation through talks, a quiz and a song-and-skit. Annual Report 2014 Energy The Production Division, which is based at SPH Print Centre, is continuing with efforts this year to conserve energy and to meet the new NEA Energy Act. It aims to reduce energy consumption by 5 per cent over the next 5 years (using 2013 total energy consumption as a baseline). Various energy efficiency works were carried out and the energy usage reduction is projected to be about 9 per cent for 2014. The Production Division has submitted its first Energy Annual Report to NEA as required by the new Energy Act. SPH registered to join the Energy Efficiency National Partnership (EENP), a voluntary partnership programme for companies that wish to be more energy efficient, and participated in the EENP Awards. One of the Production staff, Wong Tat Choon, Assistant Vice-President, Engineering, received the Outstanding Energy Manager of the Year 2014 for his energy conservation work (see case study on page 88). At News Centre and Media Centre, SPH carries out environmental friendly practices to reduce energy wastage and conserve energy. High consumption lightings in the buildings are progressively replaced by energy efficient ones such as LED and induction lights. Duty staff also conduct daily checks to turn off the office lighting after office hours. The room temperature in the buildings are maintained at a comfortable level, and the operating hours for airconditioning are reviewed regularly for optimal operating efficiency. Old chillers are overhauled periodically so that the performance of these chillers is at an optimum level. Currently, a detailed energy audit is being conducted at News Centre and Media Centre by a certified energy service company to assess the feasibility of the energy-saving measures for implementation as well as to recommend areas for further energy improvement. 89 To date, the proposed energy-saving recommendations arising from the preliminary energy audit: 1. Replacing some of the old chillers with more efficient variable speed drive (VSD) chillers; 2. Replacing the old air handling units (AHU) to improve energy efficiency; 3. Installing motion sensors at low usage area to reduce operating hours and energy consumption. SPH also meets up with its vendors regularly to be updated on new technologies which can be implemented to assist in reducing energy consumption. The basement carpark area at SPH’s flagship shopping mall Paragon is progressively fitted with carbon monoxide sensors to control ventilation fan speed, thereby enhancing the carpark air quality. The office tower toilets are also fitted with motion sensors which automatically dim the lights to about 50 per cent when they are not in use. All these will be completed by end of 2014. By mid-2015, the old chillers will also be replaced with energy efficient ones. At The Clementi Mall, all carpark lights and void lights have been replaced with energy-saving LED lights. The Seletar Mall, a joint venture development by SPH and United Engineers Limited, received a Gold in the BCA Green Mark Award from the Building and Construction Authority (BCA) in March this year for its best practices in green building technologies (see case study on page 91). SPH’s Information Technology Division recently implemented a new IT corporate network which uses 50 per cent less components, but offers superior performance and reliability and consumes less energy. It has also embarked on consolidating its data servers and storages through virtualisation technology. To ensure the optimal operations of its IT systems, it installed the latest, 90 Singapore Press Holdings ENVIRONMENTAL RESPONSIBILITY more efficient air-conditioning which uses ozone-friendly refrigerants. It purchased Energy Star compliant PCs and notebooks for staff use to replace older, less energyefficient ones. From these recent measures, its utility bill has dropped more than 30 per cent, resulting in savings of $180,000 annually. Water The Production Division proactively monitors and reviews its water usage. Regular checks and maintenance on the water supply network are carried out to ensure that there are no water leakages. There are also periodic upgrading of fittings and facilities to ensure efficient water usage, such as installing sensor taps and automatic flush urinals, dual flush systems for toilets and thimbles in taps. The water storage tanks are cleaned annually. There are proper security measures for the tanks, in compliance with PUB water supply regulations. At News Centre and Media Centre, regular maintenance checks on the water supply installations are carried out to ensure zero water wastage caused by faulty fittings or damaged equipment. The meter readings of installations that consume large quantities of water such as cooling towers are recorded daily so that there are no undetected leaks or obstructions in water tanks. Common amenities such as toilets, pantries and garden taps have water efficient fittings and are adjusted to PUB recommended flow rates to reduce the overall water consumption in the buildings. Other Green Efforts SPH adheres to environmental recommendations made by the relevant regulatory bodies and authorities: a. All refrigerators in the pantry rooms are upgraded to energy-efficient models with NEA energy labels. b. Divisions and business units are encouraged to upgrade to LCD TVs with NEA energy labels. c. All copiers are energy efficient with Energy Star labels. d. Use of environmentally friendly fertilisers, pest sprays and soil treatment for landscaping at all three SPH premises. e. Lush planting of flora and fauna on the News Centre’s roof top garden reduces heat and save air-conditioning costs. f. Auto dispensers for hand towels installed in all toilets help to reduce wastage and save water. g. Auto soap foam dispensers installed in all toilets help to reduce wastage and save water. h. Landscape irrigation system installed at the Media Centre’s roof top garden result in cost savings from reduced water consumption and number of gardeners needed to maintain the garden. Reuse and Recycle SPH adopts a group-wide “Reuse and Recycle” philosophy, where staff are reminded to use resources efficiently, save energy, reduce waste and practice recycling. a. Ongoing collection of furniture still in good condition for reuse in other divisions and subsidiaries. b. Ongoing collection and sale of disposed items such as PCs, furniture and electrical items. c. Ongoing collection and sale of empty drink cans. d. Ongoing collection and sale of toner and fax cartridges. e. Ongoing collection and sale of old carton boxes. f. Ongoing collection and sales of printed waste, office scrap and used hand towels. g. All office waste and newspapers are sorted at the refuse centres at all three locations. Those that have no recyclable value will be disposed into the rubbish compactor. Those with recyclable value will be placed at the Refuse Centre for packing, bundling and weighing before collection by the scrap contractor. FY 2014 WASTE DISPOSAL (FOR MEDIA CENTRE AND PRINT CENTRE) WASTE INK SOLVENT, DEVELOPER, CHEMICAL USED PLATES REEL END 636,656 kg 27,770 kg PRINTED WASTE 2,627,414 kg WRAPPER 442,544 kg 34,590 kg WHITE WASTE 386,216 kg 296,610 kg TEST WASTE 529,226 kg NEWSPAPER WASTE 4,622,056 kg Annual Report 2014 91 CASE STUDY – THE SELETAR MALL CLINCHES BCA GREEN MARK AWARD (GOLD) The Seletar Mall, located at the junction of Sengkang West Avenue and Fernvale Road, is a four-storey mall, with fivebasement levels (including three basement carparks). Occupying a gross floor area of 284,000 sq ft and net lettable area of 188,000 sq ft, it is over 90 per cent leased and will provide shopping, entertainment and enrichment choices for parents and children. The family-oriented shopping mall is scheduled to open end 2014. Energy Efficiency The façade of the mall is mostly solid wall which helps to reduce the area exposed to heat gain. The atrium day lighting design maximises the use of sunlight while reducing the need for artificial lighting during the day. The mall has energy-efficient mechanical systems in place, such as mechanical ventilation with carbon monoxide (CO) sensors in carpark areas, energy-efficient air conditioning system, presence-detection system in toilets and staircases to lower lighting energy usage and variable speed escalators to reduce speed automatically when there is no usage. With these systems in place, the mall is expected to cut its lighting power spending by 20 per cent, while maintaining proper lighting level. Water Efficiency The Seletar Mall uses water-efficient fittings with a minimum of three ticks certified under the Water Efficiency Labelling Scheme. The mall provides private meters to monitor the major water usage system, which allows for better control of water utilisation as well as assessing possible locations of leakage. A rainwater harvesting tank is put in place to collect rainwater for landscape irrigation. The use of the cooling tower water treatment system reduces water consumption. There is also pipe work to cater for the use of NEWater in the building. Environmental Protection The mall promotes sustainable construction by using approved environmentally friendly products such as drainage cells, dry wall partitions, precast road kerbs and recycled formwork. The greenery along the perimeter of the development at the first storey and the landscaping at the third and fourth storeys provides a cool environment for shoppers. Waste management and recycling initiatives are also in place. The Seletar Mall is conveniently accessible via the Fernvale LRT station and bus stops, thereby encouraging the use of public transport. There are also 50 bicycle parking lots to promote the use of bicycles. Indoor Environment Quality The Seletar Mall has UV emitters installed within the premises for better indoor air quality and energy efficiency, which will aid in preventing the spread of infectious diseases in the mall. Other Green Features The Seletar Mall uses siphonic rainwater discharge system at its roof. It also provides carpark guiding system at its carparks. The suburban mall also boasts several unique architectural features. The retail planning of the mall is based on a wide corridor organised around a voluminous atrium space. The shopping floors recede from the second to the fourth storeys in a terracing manner, creating an ambience of spaciousness and allowing a clear view of activities at the lower levels, and particularly, the main event space. A large clerestory skylight perched above the atrium allows natural light to enter the mall, thereby ensuring a cheerful atmosphere throughout the day. Roof gardens outside the food court and the Cineplex offer an outdoor experience with views of lush landscape and greenery. 92 Singapore Press Holdings EMPLOYEE RESPONSIBILITY WORKPLACE SAFETY AND HEALTH & FIRE SAFETY Delivering Consistent Safety Achievements SPH is committed to the safety and well-being of its staff. Over the years, it has strived to make the workplace safer through consistent safety innovation supported by comprehensive risk management programmes. The company has continued to outperform the National Manufacturing Accident Frequency Rate (AFR) and Accident Severity Rate (ASR) over the last 5 years. SPH Accident Frequency Rate (AFR) 3.5 3.0 Manufacturing 2.5 AFR 2.0 All Industry 1.5 SPH 1.0 0.5 0 2006 2007 2008 2009 2010 2011 2012 2013 *2014 YEAR SPH Accident Severity Rate (ASR) 160 140 Manufacturing 120 ASR 100 All Industry 80 60 SPH 40 20 0 2006 2007 2008 2009 2010 2011 2012 2013 *2014 YEAR * 2014 data is computed from 1st January 2014 to 31st August 2014 only. Keeping Pace with Safety Development In the first half of 2014, the Ministry of Manpower strengthened its Workplace Safety and Health (WSH) regulatory measures. For workplace accident reporting, companies have to keep track of staff who are not able to perform their duties for more than three non-consecutive days. SPH also put in place a Fall Prevention Plan (FPP) for all premises in compliance with MOM’s Work at Heights Regulation 2013. With the strong national emphasis to bolster workplace safety and health, SPH will continue to enhance its internal safety structures, processes and capabilities to keep up with the regulatory requirements. Enhanced Safety Structure In May 2014, SPH established two new WSH Coordinator posts, increasing its in-house Health and Safety Executive (HSE) headcount to three. Working with the three WSH committees (Coordination, Production and Office), this enhanced safety structure allows the company to expand its WSH programmes more effectively to the three centres. Stationed at the two printing facilities at Media Centre and Print Centre, the two WSH coordinators work with the line managers where they conduct regular on-site WSH and fire safety inspections, accident/incident investigations, and safety promotion and education for staff at the two centres. Fall Prevention Plans In early 2014, a cross-functional project group was established to develop the Fall Prevention Plan (FPP) for Print Centre. After three months of research and several on-site visits, the Print Centre FPP was endorsed by Head, Production on 1 May. The effort was expanded to Media Centre, where it was subsequently endorsed on 8 August. As part of the FPP, a Hazardous Work at Height (WAH) Permit-to-Work system was established for all three centres with effect from 1 May. To prepare staff for WAH appointments, a total of 172 staff received their qualifications after attending WAH courses conducted by certified training agencies. Sustaining Fire Safety Efforts Working hand-in-hand with Times Properties, the Security and Safety Department conducted daily inspection of firefighting equipment and facilities in the three centres. Their feedback helped ensure all firefighting equipment are in good serviceable condition. Regular fire drills are conducted for the three centres to evaluate staff evacuation procedures and functionality of the firefighting equipment. The Company Emergency Response Team (CERT) for Media Centre and Print Centre were audited by SCDF on 8 May and 8 September in 2014 and received their fourth and sixth consecutive certifications respectively. Annual Report 2014 93 WORKING HAND IN HAND WITH INDUSTRY PARTNERS VALUING HUMAN CAPITAL SPH’s sustainability strategy also applies to its products and services. SPH is constantly looking at ways to innovate and improve all its media products and services to ensure that they continue to serve its customers and advertisers effectively. People SPH values its employees as the key asset to organisational success and it is its philosophy to develop each and every employee to his or her maximum potential. It is committed to attracting and recruiting talent, managing performance through development to build a talent pipeline and creating a corporate culture that embraces diversity and change. For example, Berita Harian and Berita Minggu, The New Paper and The Business Times were revamped to meet the changing needs of readers and advertisers. To stay ahead of the changing times, the Digital Division (or SPH Digital) was set up. It offers a comprehensive suite of news platforms and online media solutions to target and engage readers and advertisers. Since its formation in May this year, SPH Digital has taken up an active role in the Interactive Advertising Bureau (IAB) as it ramps up its leadership role in the rapidly developing digital arena in the APAC region. SPH embarked on a comprehensive review of its organisational structure and revamped its corporate values - Excellence, Customer Focus, Integrity, Teamwork and Embracing Change (EXCITE) for better alignment to its business aspirations. To achieve a more efficient and agile organisation, the number of management layers is reduced to achieve a flatter structure. The newsrooms have been reorganised to effectively deliver news across both print and digital platforms. These changes provide clarity in roles with clear alignment to corporate values and objectives, and offer a challenging career for employees. 94 Singapore Press Holdings EMPLOYEE RESPONSIBILITY Remuneration SPH’s compensation policy and practices are designed to attract, retain and motivate employees. To ensure that its remuneration package stays relevant and competitive, the company participates in yearly surveys for benchmarking. induction, soft skills training, functional skills training, journalism programmes and leadership development. Employees are also sponsored to pursue Diploma, Bachelors and Masters degree programmes and other certification courses to upgrade their skills and qualification. A flexible wage system is used to tie rewards directly to the performance of individuals. This system also allows adjustments to be made to the remuneration package in response to changes in the economic and business conditions. In line with the strategy to grow its business beyond print, the variable bonus system is revised to link it directly with the financial performance of the Group, beyond the newspaper business. As part of the personal development tool, a 360-degree feedback system was implemented to allow employees to solicit feedback from their colleagues. For example, when SPH made a divestment gain from the listing of SPH REIT, part of the gains were shared with employees through a one-off special lump sum payout to employees in January 2014. SPH also continually reviews its benefits package to ensure it is competitive and comprehensive. These benefits include medical coverage, regular health screenings, dental benefits, group term insurance coverage and various staff loans. Performance Management SPH employees undergo an annual performance review where there is an open discussion on the employee’s overall performance, detailing areas for improvement, targets settings and future developmental needs. The performance management system is competency-based, aimed at providing greater objectivity and transparency in assessing work performance. It also provides a platform to improve work performance through continual learning and development opportunities. Talent development and succession planning strategies are tailored for employees following the performance management process to ensure that the company has the right talent to meet its current and future operational needs. To facilitate the performance management process, SPH recently implemented an electronic performance appraisal system to handle both the annual appraisal exercise and probationary review. This made the appraisal process more efficient for both the employee and supervisor. Training and Development Investment in the training and development of employees gives SPH the competitive edge necessary for continued growth and success. Through the training programmes offered, employees can acquire new skills, expertise and qualification. This investment contributes to improvements in staff performance and productivity. SPH has a comprehensive training and development plan which is reviewed annually to ensure that training needs of employees are met and changing business needs are addressed. The training development programmes include Health and Sustainability As an employer of choice, SPH has developed a total healthcare approach for its employees. In addition to providing a comprehensive medical benefit scheme which includes regular health screenings for employees, the SPH Sports and Leisure Club organises a wide variety of activities ranging from health talks, exercise and fitness programmes and leisure activities to enable employees to maintain an active lifestyle, learn new skills, acquire new knowledge and meet new friends. Employees can attend weekly exercise classes in kettle bell training, piloxing and muay thai. To promote mental and physical well being, lunchtime talks are organised with professional speakers sharing on topics such as financial management, stress management, medical issues and healthy habits. A “Free Salad Day” was also introduced this year to encourage employees to make healthy food choices. Social and recreational activities such as “Up on the Roof”, a monthly gathering held at the News Centre’s rooftop garden, allows employees to relax and mingle with fellow colleagues and senior management in an informal setting over food, drinks and games. For the annual SPH Family Day, close to 7,400 staff and family members had a fun-filled day at the S.E.A Aquarium and other Sentosa attractions. To encourage employees to participate in sports and facilitate camaraderie, Inter-Division Tournaments are organised for a wide range of sports throughout the year. This will culminate in the presentation of the SPH Championship trophy to the division that accumulates the most points at the annual SPH Annual Report 2014 Games Day. This year’s SPH Games Day ended on a high note with more exciting competition and greater participation from the employees. Work Life Harmony To encourage work-life balance, flexible work arrangements have been widely practised to attract, motivate and retain employees who may have left the workforce due to family commitments. Flexible working hours, part-time work and tele-commuting are some of the arrangements that have been put in place. In 2014, around 2.5 per cent of employees are on flexible work arrangements. 95 HR Statistics for SPH Group in FY 2014 Employee Profile Permanent Part Timers Total % 4,371 93.7% 93 2.0% 202 4.3% 4,666 100.0% Gender Total % Female 2,451 52.5% Temp Grand Total Grooming Future Talent SPH continues to invest in talent. University scholarships for studies at both local and foreign universities are awarded to successful applicants who wish to pursue a career in journalism. SPH also gives out bond-free scholarships to children of employees and news vendors. Male 2,215 47.5% Grand Total 4,666 100.0% The SPH Foundation Lim Kim San Memorial Scholarships are awarded to deserving students from modest backgrounds to support their studies at local universities. This bond-free scholarship is awarded to full time language and humanities students. A total of 31 SPH and SPH Foundation scholarships were awarded in 2014. SPH will continue to build up its leadership pipeline by identifying high potential talent for key management positions. It provides developmental opportunities through a robust career development plan, job rotation across different business functions and a coaching and mentoring programme for them. The succession planning initiative also promotes diversity in its leadership and gives equal opportunities to all employees for leadership opportunities. Employee Communication and Engagement Regular townhall communication sessions are held by the CEO and the senior management team, where employees are kept updated on the latest company news and policy changes. Such sessions are also webcasted live from News Centre to Media Centre and Print Centre. Besides townhall sessions, other communication channels include regular division and department meetings, staff broadcasts, and the monthly newsletter Presslines, which is produced by Corporate Communications & CSR Division. Employee Turnover SPH recognises the importance of managing employee turnover. It has adopted a number of retention strategies to attract and retain valued employees. Besides reviewing and providing a competitive remuneration package and benefits, it has invested significantly in training and development, health related employee welfare programmes, staff bonding events and equipping leaders with the right leadership qualities. Employee turnover in FY 2014 was 16 per cent, which is lower than the national attrition rate. Age Group Total % <30 years 1,098 23.5% 30 - 40 yrs 1,441 30.9% 41 - 50 yrs 1,074 23.0% >50 yrs 1,053 22.6% Grand Total 4,666 100.0% Ethnic Type Total % 3,350 71.8% Chinese Indian 354 7.6% Malay 523 11.2% Others 439 9.4% 4,666 100.0% Total % Grand Total Nationality Type Singaporean 3,459 74.1% Malaysian 686 14.7% Others 521 11.2% 4,666 100.0% Grand Total No. of Leavers versus Headcount No. of Leavers 1.9.2013 to 31.08.2014 No. of Employees as at 1.9.2013 Percentage of Leavers Total 760 4,607 16% 96 Singapore Press Holdings CORPORATE SOCIAL RESPONSIBILITY SINGAPORE PRESS HOLDINGS As a socially responsible corporate citizen, SPH actively engages all segments of the community to give back to society. The growing diversity of programmes and initiatives that SPH champions is not only a strong testament of its commitment towards corporate citizenry, but also shows its ability to engage minds and enrich lives through different activities and platforms. In conjunction with SPH’s 30th anniversary celebrations this year, a range of activities was held throughout the year. More information can be found in pages 42 to 44. Arts SPH believes strongly that arts is a common language for all races, languages and religions. The annual SPH Gift of Music series brings the arts to the masses and creates a vibrant arts scene in Singapore. 2014 saw more than 20 free concerts being staged at various parts of Singapore, including parks, shopping malls, the Esplanade and the newly refurbished Victoria Concert Hall. The audience were entertained with a variety of music genres ranging from classical, pop, jazz, rock to opera. dining in complete darkness, in aid of visually impaired servers from the Singapore Association of the Visually Handicapped (SAVH). In August 2014, the SPH charity outing was organised as part of SPH’s 30th anniversary celebrations (see case study on page 97). The SPH Red Apple Day, held together with the Singapore Red Cross Society, encourages both SPH staff and members of the public to donate blood. It was originally started in 2001 as an annual event, but was made a biannual drive in 2011 to help increase blood donations during festive seasons when the blood bank runs low on blood supply. SPH also supports the Boys’ Brigade Share-A-Gift programme annually. Staff of SPH fulfilled more than 300 wishes and gave close to $18,000 worth of contributions to six charitable organisations serving children and elderly beneficiaries last year. A year end party was also held at SPH News Centre for about 100 beneficiaries from Ang Mo Kio Family Service Centres, Care Corner Family Service Centre (Toa Payoh) and Life Community Services Society (MightyKids, Families & Community). Charity As part of its annual charity cheque presentation with SPH Foundation, SPH donated $200,000 to 20 charities serving the elderly at its adoption ceremony of Amazon Flooded Forest at River Safari last year. The charities, recommended by the National Council of Social Service, included Metta Hospice Care, TRANS Family Service Centre (Bedok), Fei Yue Family Service Centre (Choa Chu Kang) and Persatuan Pemudi Islam Singapura (PPIS) Family Service Centre (West). Some of the beneficiaries were invited to an excursion at River Safari. SPH also gives monetary and in-kind donations to different charitable organisations throughout the year. Staff are also encouraged to be involved in the company’s corporate social responsibility programmes. The SPH Staff Volunteers Club, which comprises members from different departments in SPH, held quarterly birthday celebrations for the elderly of Care Corner Seniors Activity Centre (Toa Payoh). It brought much cheer to the elderly through a series of activities like games, paper cutting and karaoke. It also organised Lunching in the Dark, where participants got to experience SPH was a founding partner of the inaugural #GivingTuesdaySG campaign last year. The campaign is part of a global movement to encourage people to give on a designated day, and is coordinated by the National Volunteer & Philanthropy Centre. SPH launched Loose Change Day on 3 December and staff volunteers collected contributions from fellow colleagues. More than $6,500 was raised and channelled to the charities under Community Chest, which provide essential social services to underprivileged children and youth, needy elderly and the disabled. Besides giving as a Group, SPH’s products are also actively involved in community and charity projects to help those in need. The Straits Times School Pocket Money Fund (SPMF) received its charity status in November 2011. SPMF was started in 2000 as a community project by The Straits Times to provide pocket money to children from low-income families to help them through school. It has since helped more than 120,000 cases of needy children and youth. Annual Report 2014 The annual ChildAid concert, co-organised by The Straits Times and The Business Times, raised a record $2.035 million last year for its two youth-related beneficiaries, The Straits Times School Pocket Money Fund and The Business Times Budding Artists Fund. Held at the Marina Bay Sands in December, more than 160 young performers sang, danced and performed their hearts out for a good cause. The Chinese Newspapers Division has been organising fund raising events for the President’s Challenge since 2002. A non-competitive Charity Fun Walk was held in September with Guest-of-Honour President Tony Tan Keng Yam flagging off the walk at Gardens by the Bay. Replicas of autistic savant Stephen Wiltshire’s sketch of the Singapore cityscape were also presented to donors who made generous contributions to beneficiaries under the President’s Challenge. The Business Times held its annual Charity Challenge in March this year. The 39km cycling event raised $115,000 for charities like Dover Park Hospice and SingHealth Transplant TRUEfund. Education As part of its efforts to build an effective team of human capital, SPH awarded seven outstanding young men and women with the SPH Journalism Scholarships this year. SPH also gave out 14 scholarships to the children of SPH staff and newspaper vendors, in recognition of their contributions to the company. Nature and Conservation The SPH Flea Market, a collaboration between SPH and The Salvation Army, encourages staff to recycle usable items while raising funds for charity at the same time. The event raised more than $7,000 for the beneficiaries of The Salvation Army. SPH was a supporting partner of the Singapore Environment Council’s School Green Awards (SGA). The ceremony was held in November 2013 and more than 300 award submissions were received from primary and secondary schools, as well as schools for students with special needs and junior colleges. The SGA is an environmental programme for all schools in Singapore. Students review their school in teams and submit results together with a report on their environmental efforts. It also raises awareness within communities and organisations. Sports SPH aims to promote lifelong values such as character building, discipline and teamwork through its support of various sports events. Together with the Singapore Athletic Association, SPH hosted the SPH Schools Relay Championships at the Choa Chu Kang Stadium on 22 and 23 March. The competition attracted more than 1,000 participants from 40 schools. SPH also sponsored the second edition of the SPH National Age Group Doubles Badminton Championships. Organised by the Singapore Badminton Association, the competition held last November at the Singapore Badminton Hall attracted more than 300 participants. CASE STUDY – SPH CHARITY OUTING More than 50 SPH staff from ten business units and subsidiaries brought 110 beneficiaries from their adopted charities to the Singapore Gardens Festival at Gardens by the Bay on 22 August. The SPH Charity Outing was organised by the SPH Staff Volunteers Club and the Corporate Communications and CSR division, as part of SPH’s 30th anniversary celebrations. It was to date, the largest charity activity involving several of the charities adopted by different SPH business units and subsidiaries. The 110 beneficiaries and caretakers, aged four to 60, came from Child @Street 11, Club Rainbow, Hope Centre, MINDS and Ramakrishna Mission Boys Home. 97 98 Singapore Press Holdings CORPORATE SOCIAL RESPONSIBILITY SINGAPORE PRESS HOLDINGS FOUNDATION Singapore Press Holdings Foundation (SPH Foundation) was incorporated in 2003 with a seed funding of $20 million from SPH. A registered charity and an Institution of Public Character, it has committed to build a community that embraces language enrichment, creativity, diversity, healthy living and sports. Arts Since its launch in April 2011, the SPH Foundation Arts Fund has supported many arts productions, giving the underprivileged the opportunity to enjoy and appreciate the arts. Tickets to these productions were purchased for beneficiaries from charitable organisations like HELP Family Service Centre, Dyslexia Association of Singapore and YMCA Singapore. SPH Foundation is also the Company Sponsor of the Singapore Repertory Theatre’s The Little Company, which produces quality plays for children up to 12 years old. The plays feature professional full-time actors and serve as excellent opportunities for family bonding while teaching the children values such as caring and sharing. Charity SPH Foundation donated $200,000 to 20 charities serving needy children and youths, as part of the annual SPH and SPH Foundation charity cheque presentation at River Safari last year. Charities that benefitted from the donations included Association for Persons with Special Needs (APSN), Handicaps Welfare Association (HWA), The Singapore Association for the Deaf (SADeaf) and Singapore Association of the Visually Handicapped (SAVH). SPH Foundation also donated to other charitable organisations throughout the year. Education SPH Foundation gave out the Lim Kim San Memorial Scholarships to ten deserving students from modest backgrounds to fund their studies at local universities. Since its inception, 63 bond-free scholarships have been given out. The scholarships, originally awarded to full-time language students, were extended to local undergraduates reading humanities last year, to mark SPH Foundation’s 10th anniversary. SPH Foundation also contributed to the PCF Assist programme, which was started by the PAP Community Foundation in 2011 to help needy students in the post secondary education institutions with their schooling expenses. The SPH Foundation “Media in Transition: Social & Economic Impact” lecture was held at the SPH News Centre on 27 February. The guest speaker was Mr Fernando Samaniego, the Chief Executive Officer of International New Media Consulting. As a multicultural ‘intrapreneur’, he has worked with organisations across the globe in all areas of the media, including newspapers, magazines, television, radio, mobile, Internet, news, classified, and portals. The Media in Transition Lecture Series was started by SPH Foundation in 2007 to focus on the media transition and its social and economic impact. For the third consecutive year, SPH Foundation was the Presenting Sponsor of The Straits Times - MOE National Current Affairs Quiz. The quiz is aimed to encourage postsecondary students to develop the habit of reading news publications, as well as promote an interest in, and improve their knowledge of, current affairs. SPH Foundation was the sponsor of Shop For Your School, a campaign that rewards best proposals by students to make a difference to their school, peers or community. The campaign was organised by Little Red Dot, a student publication by The Straits Times. A total of 125 applications were received from a range of primary schools, including some special needs schools. The seventh edition of VOX! (Visual, Originality, X-factor) New Media workshop, sponsored by SPH Foundation and co-organised by omy.sg and Ngee Ann Polytechnic, provided secondary school students with an introduction to news reporting and a taste of online news production. SPH Foundation also sponsored a five-day workshop organised by the Wee Kim Wee School of Communications and Information. The workshop was designed to introduce junior college students to Chinese language journalism on multiple platforms including print, broadcast and new media. Nature and Conservation As part of its nature and conservation efforts, SPH Foundation has extended its adoption of the Amazon Flooded Forest at the River Safari. The exhibit was officially launched by Chairman Annual Report 2014 Dr Lee Boon Yang last year as SPH Foundation’s anniversary gift to Singapore. SPH Foundation also continued with its sponsorship of Inuka the polar bear, the SPH Foundation Conservation Centre at the Singapore Zoo and the High Flyers Show at Jurong Bird Park. SPH Foundation also sponsored the Special Projects to Understand Nature (SUN) Club, a programme that brings tailor-made nature appreciation projects to students with special needs. More than 500 students benefitted from the customised nature trips in 2013. Sports To promote an active lifestyle amongst primary school students, SPH Foundation sponsored the third edition of the SPH Foundation National Primary Schools Tchoukball Championships. To cater to the increase in popularity of the sport, a zonal competition was introduced for the first time this year, with a total of 39 teams taking part in the Senior Division (for Primary 6 students) segment. It was held at Junyuan Primary School on 23 May. The Junior Division (for Primary 4 and 5 students) segment will take place in November. 99 SPH Foundation, together with the Singapore Disability Sports Council (SDSC), hosted the fourth edition of the SPH Foundation National Para-Swimming Championships on 10 May at Toa Payoh Swimming Complex. The championships is aimed at creating opportunities for persons with disabilities to swim at a competitive level. Over 100 para-athletes from 18 special schools, associations and clubs took part in this one-day event. Outstanding swimmers were selected to represent Singapore in prestigious competitions. 100 Singapore Press Holdings FINANCIAL CONTENTS Directors’ Report 101 Statement by Directors 106 Independent Auditors’ Report 107 Balance Sheets 109 Consolidated Income Statement 110 Consolidated Statement of Comprehensive Income 111 Consolidated Statement of Changes in Total Equity 112 Consolidated Statement of Cash Flows 114 Notes to the Financial Statements 116 Operating Companies of the Group 192 Overseas Bureaus 195 Properties of the Group 198 Options and Awards 199 Shareholding Statistics 200 Notice of Annual General Meeting 202 Proxy Form Annual Report 2014 101 DIRECTORS’ REPORT for the financial year ended August 31, 2014 The Directors present their report to the members together with the audited financial statements of Singapore Press Holdings Limited and its subsidiaries (the “Group”) for the financial year ended August 31, 2014 and the balance sheet of Singapore Press Holdings Limited (the “Company”) as at August 31, 2014. DIRECTORS 1. The Directors of the Company in office at the date of this report* are: Lee Boon Yang Cham Tao Soon Chan Heng Loon Alan Bahren Shaari Chong Siak Ching Ng Ser Miang Quek See Tiat Sum Soon Lim Tan Chin Hwee (appointed on March 1, 2014) Tan Yen Yen Lucien Wong Yuen Kuai * Mr Willie Cheng Jue Hiang stepped down as a Director on November 29, 2013. Ms Janet Ang Guat Har will be appointed as a Director on October 17, 2014. ARRANGEMENTS TO ENABLE DIRECTORS TO ACQUIRE BENEFITS 2. Neither during nor at the end of the current financial year was the Company a party to any arrangement whose object was to enable the Directors of the Company to acquire benefits through the acquisition of shares in, or debentures of, the Company or any other body corporate, except as disclosed under ‘Share Options in the Company’ and ‘Performance Shares in the Company’ in the Directors’ Report. DIRECTORS’ INTERESTS IN SHARES 3. The Directors holding office as at August 31, 2014 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 Sept 1, Aug 31, Sept 21, 2013* 2014 2014 Deemed Interests Sept 1, Aug 31, Sept 21, 2013* 2014 2014 The Company Management Shares Lee Boon Yang Cham Tao Soon Chan Heng Loon Alan Bahren Shaari Chong Siak Ching Ng Ser Miang Quek See Tiat Sum Soon Lim Tan Chin Hwee Tan Yen Yen Lucien Wong Yuen Kuai 4 4 8 4 4 4 4 4 4 4 4 4 4 8 4 4 4 4 4 4 4 4 4 4 8 4 4 4 4 4 4 4 4 – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – 102 Singapore Press Holdings DIRECTORS’ REPORT for the financial year ended August 31, 2014 DIRECTORS’ INTERESTS IN SHARES (CONT’D) Direct Interests Aug 31, 2014 Sept 21, 2014 20,000 761,550 – – 20,000 934,650 – – 20,000 934,650 – – 10,183 – 47,000 20,000 10,183 – 47,000 20,000 10,183 – 47,000 20,000 1,175,000 1,175,000 1,175,000 – – – Sept 1, 2013* Ordinary Shares Cham Tao Soon Chan Heng Loon Alan Quek See Tiat Lucien Wong Yuen Kuai Options for Ordinary Shares Chan Heng Loon Alan Deemed Interests Sept 1, Aug 31, Sept 21, 2013* 2014 2014 Conditional Award of Performance Shares** Chan Heng Loon Alan 68,334# shares to be vested in January 2014 Up to Up to Up to 91,400## –^^ –^^ – – – 155,000# shares to be vested in January 2014 Up to Up to Up to 232,500## –^^ –^^ – – – 78,334# shares to be vested in January 2015 Up to Up to Up to 106,801## 92,400## 92,400## – – – 200,000# shares to be vested in January 2015 Up to Up to Up to 300,000## 300,000## 300,000## – – – 80,000# shares to be vested in January 2016 Up to Up to Up to 76,800## 100,801## 100,801## – – – 200,000# shares to be vested in January 2016 Up to Up to Up to 300,000## 300,000## 300,000## – – – 53,333# shares to be vested in January 2017 Up to Up to Up to ## ## 38,399 76,800 76,800## – – – 200,000# shares to be vested in January 2017 – Up to Up to 300,000## 300,000## – – – 26,666# shares to be vested in January 2018 – Up to Up to 38,399## 38,399## – – – Annual Report 2014 103 DIRECTORS’ REPORT for the financial year ended August 31, 2014 DIRECTORS’ INTERESTS IN SHARES (CONT’D) Sept 1, 2013* Direct Interests Aug 31, 2014 Deemed Interests Sept 1, Aug 31, Sept 21, 2013* 2014 2014 Sept 21, 2014 Subsidiary SPH REIT Units Lee Boon Yang Chan Heng Loon Alan 300,000 – 300,000 – 300,000 – – 200,000 – 200,000 – 200,000 * Or date of appointment, if later. ** Represents performance shares granted from FY 2010 to FY 2014. # The number of shares represents the shares required if awarded at 100% of the grant. ## The shares awarded at the vesting date could range from 0% to 150% depending on the level of achievement against the pre-set performance conditions. ^^ During the financial year, 173,100 shares were vested and awarded to Mr Chan Heng Loon Alan. Detailed information regarding Directors’ shareholdings can be obtained in accordance with Sections 164(8) and (9) of the Companies Act, Chapter 50. DIRECTORS’ CONTRACTUAL BENEFITS 4. Since the end of the previous financial year, no Director has received or become entitled to receive a benefit by reason of a contract made by the Company or a related corporation with the Director or with a firm of which he is a member or with a company in which he has a substantial financial interest, except as disclosed in the Directors’ Report and financial statements. SHARE OPTIONS IN THE COMPANY Singapore Press Holdings Group (1999) Share Option Scheme (“1999 Scheme”) 5. (a)The 1999 Scheme was approved by shareholders at an Extraordinary General Meeting held on July 16, 1999 and is administered by the Remuneration Committee (“the Committee”). At another Extraordinary General Meeting held on December 5, 2006, the shareholders approved the adoption of the SPH Performance Share Plan and the 1999 Scheme was terminated with regard to the grant of further options. Options granted and outstanding prior to the termination will continue to be valid and be subject to the terms and conditions of the 1999 Scheme. (b)Details of options granted previously have been disclosed in the Directors’ Reports for the respective years. (c)The aggregate number of options granted since the commencement of the 1999 Scheme on July 16, 1999 to December 5, 2006 is 103,090,950 options to subscribe for ordinary shares. 6. The unissued ordinary shares of the Company under option at the end of the current financial year pursuant to the 1999 Scheme are set out in Note 4 to the financial statements. 104 Singapore Press Holdings DIRECTORS’ REPORT for the financial year ended August 31, 2014 PERFORMANCE SHARES IN THE COMPANY SPH Performance Share Plan (“the Plan”) 7. 8. (a)The Plan of the Company was approved by shareholders at an Extraordinary General Meeting held on December 5, 2006 and is administered by the Committee. (b) Persons eligible to participate in the Plan are selected Group Employees of such rank and service period as the Committee may determine, and other participants selected by the Committee. (c) Awards initially granted under the Plan are conditional and will be principally performance-based with performance conditions to be set over a multi-year performance period. Performance conditions are intended to be based on medium- to longer-term corporate objectives and include both market and non-market conditions. Market conditions include Absolute Total Shareholder Return versus cost of equity and Relative Total Shareholder Return against ST All-Share Index. Non-market conditions include Newspaper Business Free Cash Flow, market competitiveness, quality of returns including sales, efficiency, productivity and profit, and business and productivity growth. (d) The Plan contemplates the award of fully-priced shares, their equivalent cash value or combinations thereof, free of charge, provided that certain prescribed performance conditions are met and upon expiry of the prescribed vesting periods. (e) Senior management are required to hold a minimum number of shares under the share ownership guideline which requires them to maintain a beneficial ownership stake in the Company, thus further aligning their interests with shareholders. During the financial year, 1,954,145 performance shares were granted subject to the terms and conditions of the Plan as follows: Category Executive Director Employee 1 2 No. of Performance Shares Granted No. of Persons 1 182 280,0001 1,674,1452 183 1,954,145 80,000 granted with non-market conditions, and 200,000 granted with both market and non-market conditions. 1,080,645 granted with non-market conditions, and 593,500 granted with both market and non-market conditions. The aggregate number of performance shares granted since the commencement of the Plan on December 5, 2006 to August 31, 2014 is 17,125,795 performance shares. The above number of shares represents the shares required if participants are awarded at 100% of the grant. However, the shares awarded at the vesting date could range from 0% to 150%, depending on the level of achievement against the pre-set performance conditions. Annual Report 2014 105 DIRECTORS’ REPORT for the financial year ended August 31, 2014 AUDIT COMMITTEE 9. The Audit Committee carried out its functions in accordance with Section 201B(5) of the Companies Act, Chapter 50, and the Listing Manual of the Singapore Exchange Securities Trading Limited. Its functions include reviewing the audit plans and audit reports of the internal and external auditors, the auditors’ evaluation of the internal accounting controls, and the scope of the internal audit function; reviewing the balance sheet of the Company and financial statements of the Group before submitting them to the Board for approval; reviewing any interested person transaction; reviewing the independence, objectivity and cost effectiveness of the external auditors and the nature and extent of non-audit services supplied by them; reviewing the assistance given by the Company’s Management to the internal and external auditors; and overseeing any internal investigation into cases of fraud and irregularities. It also recommends to the Board the appointment of external auditors, serves as a channel of communications between the Board and the auditors, and performs such other functions as may be agreed by the Audit Committee and the Board. AUDITORS 10. The auditors, KPMG LLP, have indicated their willingness to accept re-appointment. On behalf of the Directors Lee Boon Yang Chairman Singapore, October 15, 2014 Chan Heng Loon Alan Director 106 Singapore Press Holdings STATEMENT BY DIRECTORS for the financial year ended August 31, 2014 In the opinion of the Directors, (a) the balance sheet of the Company and the consolidated financial statements of the Group for the financial year ended August 31, 2014, as set out on pages 109 to 191, are drawn up so as to give a true and fair view of: (i) the results of the business, changes in equity and cash flows of the Group; (ii) the state of affairs of the Group and of the Company; and (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 Lee Boon Yang Chairman Singapore, October 15, 2014 Chan Heng Loon Alan Director Annual Report 2014 107 INDEPENDENT AUDITORS’ REPORT to the members of Singapore Press Holdings Limited REPORT ON THE FINANCIAL STATEMENTS We have audited the accompanying financial statements of Singapore Press Holdings Limited (the Company) and its subsidiaries (the Group), which comprise the balance sheets of the Group and the Company as at August 31, 2014, the income statement, statement of comprehensive income, statement of changes in total equity and statement of cash flows of the Group for the year then ended, and a summary of significant accounting policies and other explanatory information, as set out on pages 109 to 191. Management’s responsibility for the financial statements Management is responsible for the preparation of financial statements that give a true and fair view in accordance with the provisions of the Singapore Companies Act, Chapter 50 (the Act) and Singapore Financial Reporting Standards, and for devising and maintaining a system of internal accounting controls sufficient to provide a reasonable assurance that assets are safeguarded against loss from unauthorised use or disposition; and transactions are properly authorised and that they are recorded as necessary to permit the preparation of true and fair profit and loss accounts and balance sheets and to maintain accountability of assets. Auditors’ responsibility 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 comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation of financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. 108 Singapore Press Holdings INDEPENDENT AUDITORS’ REPORT to the members of Singapore Press Holdings Limited Opinion In our opinion, the consolidated financial statements of the Group and the balance sheet of the Company are properly drawn up in accordance with the provisions of the Act and Singapore Financial Reporting Standards to give a true and fair view of the state of affairs of the Group and of the Company as at August 31, 2014 and the results, changes in equity and cash flows of the Group for the year ended on that date. REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS In our opinion, 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. KPMG LLP Public Accountants and Chartered Accountants Singapore, October 15, 2014 Annual Report 2014 109 BALANCE SHEETS as at August 31, 2014 Note CAPITAL EMPLOYED Share capital Treasury shares Reserves Retained profits Group Aug 31, Aug 31, 2014 2013 S$'000 S$'000 Company Aug 31, Aug 31, 2014 2013 S$'000 S$'000 522,809 (3,046) 526,409 2,640,923 522,114 (6,269) 428,706 2,591,929 Shareholders’ interests Non-controlling interests 3,687,095 709,088 3,536,480 679,226 1,194,025 – 973,619 – Total equity 4,396,183 4,215,706 1,194,025 973,619 285,562 3,860,451 – 78,353 6,688 3,672 603,266 173,152 331,778 3,672,565 – 55,857 6,391 2,987 482,050 171,357 166,318 – 411,805 31,160 – 232,238 42,998 34,219 200,744 – 411,805 31,160 – 231,231 54,098 36,230 5,011,144 4,722,985 918,738 965,268 23,947 144,443 1,028,026 899 – 442,937 23,890 147,774 981,531 273 31,503 465,398 22,215 1,566,378 207,536 3 – 189,271 22,489 949,023 579,936 – – 75,362 1,640,252 1,650,369 1,985,403 1,626,810 6,651,396 6,373,354 2,904,141 2,592,078 34,875 46,901 879,107 8,757 34,026 41,318 1,738,222 1,352 – 25,308 – – – 29,776 828,921 372 969,640 1,814,918 25,308 859,069 298,046 60,502 926,369 656 268,969 69,613 2,721 1,427 819,334 35,689 829,482 303 717,387 42,003 – – 1,285,573 342,730 1,684,808 759,390 Total liabilities 2,255,213 2,157,648 1,710,116 1,618,459 Net assets 4,396,183 4,215,706 1,194,025 973,619 EMPLOYMENT OF CAPITAL Non-current assets Property, plant and equipment Investment properties Investments in subsidiaries Investments in associates Investments in jointly-controlled entities Trade and other receivables Long-term investments Intangible assets Current assets Inventories Trade and other receivables Short-term investments Derivative financial instruments Asset classified as held for sale Cash and cash equivalents 4 4 5 8 9 10 11 12 16(a) 13 14 15 16(b) 17 18 19 20(a) Total assets Non-current liabilities Trade and other payables Deferred income tax liabilities Borrowings Derivative financial instruments Current liabilities Trade and other payables Current income tax liabilities Borrowings Derivative financial instruments 21(a) 6(a) 7 18 21(b) 7 18 The accompanying notes form an integral part of these financial statements. 522,809 (3,046) 59,884 614,378 522,114 (6,269) 72,953 384,821 110 Singapore Press Holdings CONSOLIDATED INCOME STATEMENT for the financial year ended August 31, 2014 Group Note Operating revenue Newspaper and Magazine Property Others 2014 S$'000 2013 S$'000 931,686 204,985 78,513 991,220 198,139 50,093 1,215,184 15,891 1,239,452 18,240 1,231,075 1,257,692 23 Other operating income (199,394) (374,519) (64,899) (54,332) (153,902) (35,066) (208,222) (349,643) (63,285) (58,117) (177,212) (31,925) 348,963 109,076 48,215 (30,726) 52,863 369,288 111,407 13,971 (5,567) – 528,391 (57,655) 489,099 (54,797) Profit after taxation 470,736 434,302 Attributable to: Shareholders of the Company Non-controlling interests 404,286 66,450 430,954 3,348 470,736 434,302 0.25 0.25 0.27 0.27 Materials, production and distribution costs Staff costs Premises costs Depreciation Other operating expenses Finance costs Operating profit # Fair value change on investment properties Net income from investments Share of net loss of associates and jointly-controlled entities Gain on partial divestment of a jointly-controlled entity Profit before taxation Taxation Earnings per share (S$) Basic Diluted # This represents the recurring earnings of the media, property and other businesses. The accompanying notes form an integral part of these financial statements. 24 8 25 26 27 6(b) 29 Annual Report 2014 111 CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME for the financial year ended August 31, 2014 Note Profit after taxation Group 2014 S$'000 470,736 2013 S$'000 434,302 Other comprehensive income, net of tax Items that may be re-classified subsequently to profit or loss Cash flow hedges - net fair value changes - transferred to income statement Net fair value changes on available-for-sale financial assets - net fair value changes - transferred to income statement Currency translation difference - arising from consolidation of financial statements of foreign subsidiaries, associates and jointly-controlled entities (14,317) 6,597 1,008 4,137 109,211 (5,353) 85,906 11,349 (1,823) 2,642 5(d) 94,315 105,042 Total comprehensive income 565,051 539,344 Attributable to: Shareholders of the Company Non-controlling interests 501,206 63,845 536,064 3,280 565,051 539,344 The accompanying notes form an integral part of these financial statements. 112 Singapore Press Holdings CONSOLIDATED STATEMENT OF CHANGES IN TOTAL EQUITY for the financial year ended August 31, 2014 Note Share Capital S$’000 522,114 Balance as at September 1, 2013 – Total comprehensive income for the year Treasury Shares S$’000 (6,269) – Capital Reserve S$’000 (13,858) – Transactions with owners, recognised directly in equity Contributions by and distributions to owners Share-based compensation Issue of shares Reversal of listing expenses of a subsidiary Treasury shares re-issued Share buy-back – held as treasury shares Lapse of share options Dividends 5(b) 4 and 5(b) 5(a) 4 and 5(b) 4 5(b) 28 Changes in ownership interests in subsidiaries without a change in control Acquisition of additional interests in subsidiaries Dilution of interests in a subsidiary – 695 – – – – – – – – – – 7,225 (4,002) – – – – Balance as at August 31, 2014 522,809 (3,046) Balance as at September 1, 2012 502,992 (2,190) Total comprehensive income for the year Reclassification of capital reserve – – – – – – 3,183 – – – – – – (10,675) 2,005 – (2,005) Transactions with owners, recognised directly in equity Contributions by and distributions to owners Share-based compensation Issue of shares Capitalisation of listing expenses of a subsidiary Treasury shares re-issued Share buy-back – held as treasury shares Lapse of share options Dividends Changes in ownership interests in subsidiaries without a change in control Acquisition of additional interests in subsidiaries Capital contribution by non-controlling interests Balance as at August 31, 2013 The accompanying notes form an integral part of these financial statements. 5(b) 4 and 5(b) 5(a) 4 and 5(b) 4 5(b) 28 – 19,122 – – – – – – – 522,114 – – – 8,235 (12,314) – – – – (6,269) – – (13,858) – – – – – – (13,858) Annual Report 2014 113 Attributable to Shareholders of the Company Share-based Compensation Reserve S$’000 Hedging Reserve S$’000 Fair Value Reserve S$’000 Currency Translation Reserve S$’000 Retained Profits S$’000 343 21,544 (1,289) 421,966 – (5,097) 103,858 5,011 (85) – (6,548) – (778) – – – (1,841) Total S$’000 Noncontrolling Interests S$’000 Total Equity S$’000 2,591,929 3,536,480 679,226 4,215,706 404,286 501,206 63,845 565,051 – – – – – – – – – – – – – – – – – – – – – – – – (420) – 778 (355,444) 5,011 610 3,183 257 (4,002) – (355,444) – – 589 – – – (34,528) 5,011 610 3,772 257 (4,002) – (389,972) – – – – – – 67 (273) 67 (273) (317) 273 (250) – 19,144 (6,386) 525,824 (1,498) 2,640,923 3,687,095 709,088 4,396,183 24,409 (6,434) 324,711 (2,367) 2,837,034 3,680,160 73,016 3,753,176 5,145 – 97,255 – 2,710 – 430,954 2,005 536,064 – 3,280 – 539,344 – – – – – – – – – – – – – – – – – – – – – – – – – (373) – 441 (678,230) 6,795 17,367 (13,858) 398 (12,314) – (678,230) – – (6,262) – – – (12) 6,795 17,367 (20,120) 398 (12,314) – (678,242) – – – – – – 98 – 98 – (4,298) 613,502 (4,200) 613,502 421,966 343 2,591,929 3,536,480 – – 6,795 (1,755) – (7,464) – (441) – – – 21,544 (1,289) 679,226 4,215,706 114 Singapore Press Holdings CONSOLIDATED STATEMENT OF CASH FLOWS for the financial year ended August 31, 2014 Group Note 2014 S$'000 2013 S$'000 528,391 489,099 54,332 9,798 618 (109,076) 30,726 – (7) (388) (52,863) (48,215) 9,614 – – 35,066 – 4,976 3,079 58,117 (1,499) (395) (111,407) 5,567 4,582 – – – (13,971) 8,089 11,816 3,786 31,925 3,900 6,766 2,480 466,051 498,855 CASH FLOWS FROM OPERATING ACTIVITIES Profit before taxation Adjustments for: Depreciation Impairment/(Write-back of impairment) of property, plant and equipment Net loss/(profit) on disposal of property, plant and equipment Fair value change on investment properties Share of net loss of associates and jointly-controlled entities Allowance for impairment of associates Gain on disposal of an associate Write-back of impairment of loan to an associate Gain on partial divestment of a jointly-controlled entity Net income from investments Amortisation of intangible assets Impairment of goodwill Impairment of intangible assets Finance costs Reversal of fair value gain on loans from non-controlling interests Share-based compensation expense Other non-cash items Operating cash flow before working capital changes Changes in operating assets and liabilities, net of effects from acquisition and disposal of subsidiaries and business: Inventories Trade and other receivables, current Trade and other payables, current Trade and other receivables, non-current Trade and other payables, non-current Currency translation difference Income tax paid Dividends paid Dividends paid (net) by subsidiaries to non-controlling interests Net cash from/(used in) operating activities The accompanying notes form an integral part of these financial statements. (57) 2,777 1,391 (685) 849 (498) 3,189 37,242 (20,953) (392) 1,073 1,003 469,828 (65,925) (355,444) (34,528) 520,017 (75,628) (678,230) (12) 13,931 (233,853) 115 Annual Report 2014 CONSOLIDATED STATEMENT OF CASH FLOWS for the financial year ended August 31, 2014 Group Note 2014 S$'000 2013 S$'000 CASH FLOWS FROM INVESTING ACTIVITIES Purchase of property, plant and equipment Purchase of intangible assets Proceeds from disposal of property, plant and equipment Additions to investment properties Acquisition of a subsidiary (net of cash acquired) Acquisition of additional interest in subsidiaries Acquisition of businesses by subsidiaries Acquisition of interests in associates Dividends received from associates Proceeds from capital distributions of associates Proceeds from disposal of associates Proceeds from partial divestment of interest in a jointly-controlled entity Additional consideration paid on interest in a jointly-controlled entity Decrease in amounts owing by associates/jointly-controlled entities Increase/(Decrease) in amounts owing to jointly-controlled entities Purchase of long-term investments Proceeds from disposal of long-term investments Purchase of short-term investments Proceeds from redemption/disposal of short-term investments Dividends received Interest received Other investment income 20(b) 20(c) Net cash used in investing activities (18,924) – 228 (66,247) – (200) (10,531) (21,275) 2,873 92 31,903 16,856 – 1,063 21,000 (48,583) 13,605 (772,333) 751,991 33,284 8,169 643 (25,939) (4) 1,077 (41,051) (49,815) (4,200) (2,369) (1,810) 1,958 6,000 – – (14,080) 742 (10,205) (10,474) 132 (914,249) 335,279 25,213 5,290 (303) (56,386) (698,808) 62,427 (800) (351) (37,890) 610 869,547 (300,498) (61,710) (31,129) 17,367 – (4,002) 544,337 (12,314) CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from bank loans (net of transaction costs) Repayment of bank loans Repayment of loans from non-controlling interests Interest paid Proceeds from issuance of shares by the Company Proceeds from issuance of units by a subsidiary to non-controlling interests (net of transaction costs) Share buy-back Net cash from financing activities 19,994 Net (decrease)/increase in cash and cash equivalents Cash and cash equivalents at beginning of financial year Cash and cash equivalents at end of financial year The accompanying notes form an integral part of these financial statements. 20(a) 1,025,600 (22,461) 465,398 92,939 372,459 442,937 465,398 116 Singapore Press Holdings NOTES TO THE FINANCIAL STATEMENTS August 31, 2014 These notes form an integral part of and should be read in conjunction with the financial statements. 1. GENERAL INFORMATION The Company is incorporated and domiciled in Singapore. The address of its registered office is 1000 Toa Payoh North, News Centre, Singapore 318994. The Company is listed on the Singapore Exchange Securities Trading Limited. The principal activities of the Group consist of: (a) (b) (c) (d) (e) (f) (g) (h) (i) (j) (k) (l) publishing, printing and distributing newspapers, publishing and distributing magazines, providing multimedia content and services, holding investments, holding, managing and developing properties, providing outdoor advertising services, providing radio broadcasting services, providing online classified services, organising events, exhibitions, conventions and conferences, publishing and distributing books, providing online investor relations services, and developing applications and operating a financial portal. The principal activities of the Company consist of: (a) (b) (c) (d) (e) (f) 2. SIGNIFICANT ACCOUNTING POLICIES (a) Basis of preparation The financial statements have been prepared in accordance with Singapore Financial Reporting Standards (“FRS”) under the historical cost convention except as disclosed in the accounting policies below. The preparation of financial statements in conformity with FRS requires management to exercise its judgement in the process of applying the Group’s accounting policies. It also requires the use of certain critical accounting estimates and assumptions. Areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the financial statements, are disclosed in Note 3. The Group has adopted the new or revised FRS and Interpretations to FRS (“INT FRS”) that became effective in the current financial year. publishing, printing and distributing newspapers, distributing magazines and books, providing multimedia content and services, holding shares in subsidiaries, holding investments, and providing management services to subsidiaries. Annual Report 2014 117 NOTES TO THE FINANCIAL STATEMENTS August 31, 2014 2. SIGNIFICANT ACCOUNTING POLICIES (CONT’D) (a) Basis of preparation (cont’d) The key change to FRS adopted by the Group is as follows: FRS 113 Fair Value Measurement FRS 113 establishes a single framework for measuring fair value and making disclosures about fair value measurements, when such measurements are required or permitted by other FRSs. In particular, it unifies the definition of fair value as the price at which an orderly transaction to sell an asset or to transfer a liability would take place between market participants at the measurement date. It also replaces and expands the disclosure requirements about the fair value measurements in other FRSs, including FRS 107 Financial Instruments: Disclosures. From September 1, 2013, in accordance with the transitional provisions of FRS 113, the Group has applied the new fair value measurement guidance prospectively, and has not provided any comparative information for new disclosures. Notwithstanding the above, the change had no significant impact on the measurements of the Group’s assets and liabilities. The additional disclosure necessary as a result of the adoption of this standard has been included in Note 31. The adoption of other new or revised FRS and INT FRS has not resulted in any substantial changes to the Group’s accounting policies nor has any significant impact on these financial statements. The accounting policies set out below have been applied consistently to all periods presented in these financial statements, and have been applied consistently by Group entities. (b) Group accounting (i) Subsidiaries Consolidation The consolidated financial statements include the financial statements of the Company and its subsidiaries made up to the end of the financial year. Subsidiaries are entities over which the Group has power to govern the financial and operating policies, generally accompanied by a shareholding of more than one half of the voting rights. Subsidiaries are consolidated from the date on which control is transferred to the Group. They are de-consolidated from the date on which control ceases. In preparing the consolidated financial statements, transactions, balances and unrealised gains on transactions between group entities are eliminated. Unrealised losses are also eliminated but are considered an impairment indicator of the asset transferred. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the Group. Non-controlling interests are that part of net results of operations and of net assets of a subsidiary attributable to interests which are not owned directly or indirectly by the Company. They are shown separately in the consolidated income statement, statement of comprehensive income, statement of changes in total equity and balance sheet. Total comprehensive income is attributed to the noncontrolling interests based on their respective interests in a subsidiary, even if this results in the noncontrolling interests having a deficit balance. 118 Singapore Press Holdings NOTES TO THE FINANCIAL STATEMENTS August 31, 2014 2. SIGNIFICANT ACCOUNTING POLICIES (CONT’D) (b) Group accounting (cont’d) (i) Subsidiaries (cont’d) Acquisitions The acquisition method of accounting is used to account for business combinations by the Group. The consideration transferred for the acquisition of a subsidiary comprises the fair value of the assets transferred, the liabilities incurred and the equity interests issued by the Group. The consideration transferred also includes the fair value of any contingent consideration arrangement and the fair value of any pre-existing equity interest in the subsidiary. Acquisition-related costs are expensed as incurred. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are, with limited exceptions, measured initially at their fair values at the acquisition date. On an acquisition-by-acquisition basis, the Group recognises any non-controlling interest in the acquiree at the date of acquisition either at fair value or at the non-controlling interest’s proportionate share of the acquiree’s net identifiable assets. Please refer to Note 2(l)(i) for the accounting policy on goodwill arising from business combination. Disposals When the Group ceases to have control, the assets and liabilities of the subsidiary including any goodwill are derecognised. Any amounts previously recognised in other comprehensive income in respect of that entity are transferred to the income statement or transferred directly to retained earnings if required by a specific standard. Any retained interest in the entity is remeasured at fair value. The difference between the carrying amount of the retained interest at the date when control is lost and its fair value is recognised in the income statement. Transactions with non-controlling interests Changes in the Group’s ownership interest in a subsidiary that do not result in a loss of control over the subsidiary are accounted for as transactions with shareholders of the company. Any difference between the change in the carrying amounts of the non-controlling interest and the fair value of the consideration paid or received is recognised in retained profits within equity attributable to the shareholders of the company. Annual Report 2014 119 NOTES TO THE FINANCIAL STATEMENTS August 31, 2014 2. SIGNIFICANT ACCOUNTING POLICIES (CONT’D) (b) Group accounting (cont’d) (ii) Associates/Jointly-controlled entities Associates are entities over which the Group has significant influence, but not control, and generally accompanied by a shareholding giving rise to between and including 20% and 50% of voting rights. Where the voting rights are less than 20%, the presumption that the entity is not an associate is overcome if the Group has significant influence including representation on the board of directors or participation in policy-making process of the investee. Jointly-controlled entities are entities over which the Group has contractual arrangements to jointly share the control over the economic activity of the entities with one or more parties. The Group’s investments in associates/jointly-controlled entities are accounted for in the consolidated financial statements using the equity method of accounting less impairment losses. Investments in associates/jointly-controlled entities are initially recognised at cost. The cost of an acquisition is measured at the fair value of the assets given, equity instruments issued or liabilities incurred or assumed at the date of exchange, plus costs directly attributable to the acquisition. In applying the equity method of accounting, the Group’s share of the post-acquisition results of associates/jointly-controlled entities is included in its consolidated income statement. The Group’s share of the post-acquisition other comprehensive income is recognised in other comprehensive income. These post-acquisition movements and distributions received from the associates/jointly-controlled entities are adjusted against the carrying amount of the investments in the consolidated balance sheet. When the Group’s share of losses in an associate/a jointly-controlled entity equals or exceeds its interest in the associate/jointly-controlled entity, including any unsecured non-current receivables, the Group does not recognise further losses, unless it has obligations or has made payments on behalf of the associate/ jointly-controlled entity. Adjustments are made to the financial statements of associates/jointly-controlled entities, where necessary, to ensure consistency of accounting policies with those of the Group. Unrealised gains on transactions between the Group and its associates/jointly-controlled entities are eliminated to the extent of the Group’s investments in the associates/jointly-controlled entities. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred. The investment in the associate/jointly-controlled entity is derecognised when the Group ceases to have significant influence or joint control respectively. Any amounts previously recognised in other comprehensive income in respect of that entity are transferred to the income statement. Any retained interest in the entity is remeasured at its fair value. The difference between the carrying amount of the retained interest at the date when significant influence or joint control is lost and its fair value is recognised in the income statement. If the ownership interest in an associate/jointly-controlled entity is reduced but significant influence or joint control is retained, only a proportionate share of the amounts previously recognised in other comprehensive income are transferred to income statement where appropriate. Gains or losses arising from such transactions are recognised in the income statement. 120 Singapore Press Holdings NOTES TO THE FINANCIAL STATEMENTS August 31, 2014 2. SIGNIFICANT ACCOUNTING POLICIES (CONT’D) (c) Currency translation (i) Functional and presentation currency Items included in the financial statements of each entity in the Group are measured using the currency of the primary economic environment in which the entity operates (“functional currency”). The financial statements are presented in Singapore Dollars (“presentation currency”), which is also the Company’s functional currency. All financial information presented in Singapore Dollars have been rounded to the nearest thousand, unless otherwise stated. (ii) Transactions and balances Transactions in a currency other than the functional currency (“foreign currency”) are translated into the functional currency using the exchange rates prevailing at the dates of the transactions. Currency translation gains and losses resulting from the settlement of such transactions and from the translation of monetary assets and liabilities denominated in foreign currencies at the closing rates at the balance sheet date are taken to the income statement. Currency translation differences on non-monetary items which are equity investments held at fair value through profit or loss are reported as part of the fair value gain or loss in the income statement. Currency translation differences on non-monetary items which are equity investments classified as available-for-sale financial assets are included in other comprehensive income. Non-monetary items measured at fair values in foreign currencies are translated using the exchange rates at the date when the fair values are determined. (iii) Translation of Group entities’ financial statements The results and financial position of all the Group entities (none of which has the currency of a hyperinflationary economy) that have a functional currency different from the presentation currency are translated into the presentation currency as follows: • Assets and liabilities are translated at the closing exchange rates at the date of the balance sheet; • Income and expenses are translated at average exchange rates; and • All resulting exchange differences are taken to other comprehensive income and transferred to the income statement upon the disposal of the foreign operation as part of the gain or loss on disposal. Goodwill and fair value adjustments arising on the acquisition of a foreign entity on or after September 1, 2005 are treated as assets and liabilities of the foreign entity and translated at the closing rates at the date of balance sheet. For acquisitions prior to September 1, 2005, the exchange rates at the dates of acquisition are used. Annual Report 2014 121 NOTES TO THE FINANCIAL STATEMENTS August 31, 2014 2. SIGNIFICANT ACCOUNTING POLICIES (CONT’D) (d) Impairment of non-financial assets (i) Goodwill Goodwill recognised separately as an intangible asset is tested annually for impairment, as well as when there is any indication that the goodwill may be impaired. Goodwill included in the carrying amount of an investment in an associate/jointly-controlled entity is tested for impairment as part of the investment, rather than separately, where there is objective evidence that the investment may be impaired. For the purpose of impairment testing of goodwill, goodwill is allocated to each of the Group’s cashgenerating-units (“CGU”) expected to benefit from synergies arising from the business combination. An impairment loss is recognised when the carrying amount of the CGU, including the goodwill, exceeds the recoverable amount of the CGU. Recoverable amount of the CGU is the higher of the CGU’s fair value less cost to sell and value-in-use. The total impairment loss of a CGU is allocated first to reduce the carrying amount of goodwill allocated to the CGU and then to the other assets of the CGU pro-rata on the basis of the carrying amount of each asset in the CGU. An impairment loss on goodwill is recognised in the income statement and is not reversed in a subsequent period. (ii) Other intangible assets Property, plant and equipment Investments in subsidiaries, associates and jointly-controlled entities Other intangible assets, property, plant and equipment and investments in subsidiaries, associates and jointly-controlled entities are tested for impairment whenever there is any objective evidence or indication that these assets may be impaired. For the purpose of impairment testing, recoverable amount (i.e. the higher of the fair value less cost to sell and value-in-use) is determined on an individual asset basis unless the asset does not generate cash inflows that are largely independent of those from other assets. If this is the case, the recoverable amount is determined for the CGU to which the asset belongs. If the recoverable amount of the asset (or CGU) is estimated to be less than its carrying amount, the carrying amount of the asset (or CGU) is reduced to its recoverable amount. The difference between the carrying amount and recoverable amount is recognised as an impairment loss in the income statement. An impairment loss for an asset other than goodwill is reversed if, and only if, there has been a change in the estimates used to determine the asset’s recoverable amount since the last impairment loss was recognised. The carrying amount of this asset is increased to its revised recoverable amount, provided that this amount does not exceed the carrying amount that would have been determined (net of any accumulated amortisation or depreciation) had no impairment loss been recognised for the asset in prior years. A reversal of impairment loss for an asset other than goodwill is recognised in the income statement. 122 Singapore Press Holdings NOTES TO THE FINANCIAL STATEMENTS August 31, 2014 2. SIGNIFICANT ACCOUNTING POLICIES (CONT’D) (e) Property, plant and equipment (i) Measurement Property, plant and equipment are initially recognised at cost and subsequently carried at cost less accumulated depreciation and accumulated impairment losses. The cost of an item of property, plant and equipment initially recognised includes its purchase price and any cost that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management. (ii) Depreciation Depreciation is calculated using the straight-line method to allocate the depreciable amounts over the expected useful lives of the assets. The estimated useful lives for this purpose are: Leasehold land and buildings Plant and equipment Furniture and fittings Motor vehicles The residual values, estimated useful lives and depreciation method of property, plant and equipment are reviewed, and adjusted as appropriate, at each balance sheet date. The effects of any revision are recognised in the income statement when the changes arise. No depreciation is charged on capital work-in-progress. (iii) Subsequent expenditure Subsequent expenditure relating to property, plant and equipment that has already been recognised is added to the carrying amount of the asset only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. All other repair and maintenance expenses are recognised in the income statement when incurred. 30-50 years 1-20 years 1-10 years 3-10 years (iv) Disposal On disposal of an item of property, plant and equipment, the difference between the net disposal proceeds and its carrying amount is taken to the income statement. (f) Investment properties Investment properties comprise retail, office and residential buildings that are held for long-term rental yields. Investment properties are initially recognised at cost and subsequently measured at fair value. Any gains or losses arising from the changes in their fair values are taken to the income statement. The cost of an investment property includes capitalisation of borrowing costs [Note 2(g)] for the purchase, renovation and extension of the investment property while these activities are in progress. For this purpose, the interest rates applied to funds provided for the development are based on the actual interest rates payable on the borrowings for such development. Investment properties are subject to renovations or improvements at regular intervals. The cost of major renovations and improvements is capitalised and the carrying amounts of the replaced components are written-off to the income statement. The cost of maintenance, repairs and minor improvements is charged to the income statement when incurred. Annual Report 2014 123 NOTES TO THE FINANCIAL STATEMENTS August 31, 2014 2. SIGNIFICANT ACCOUNTING POLICIES (CONT’D) (f) Investment properties (cont’d) Properties that are being constructed or developed for future use as investment properties are classified as investment properties. Where the fair value of the investment property under construction or development cannot be reliably measured, the property is measured at cost until the earlier of the date the construction is completed or the date at which fair value becomes reliably measurable. On disposal of an investment property, the difference between the net disposal proceeds and its carrying amount is taken to the income statement. (g) Borrowing costs Borrowing costs are recognised in the income statement using the effective interest method except for those costs that are directly attributable to borrowings acquired specifically for the construction or development of properties. This includes those costs on borrowings acquired specially for the construction or development of properties and assets under construction, as well as those in relation to general borrowings used to finance the construction or development of properties and assets under construction. The actual borrowing costs incurred during the period up to the issuance of the temporary occupation permit less any investment income on temporary investment of these borrowings, are capitalised in the cost of the property under development [Note 2(f)]. (h) Investments in subsidiaries, associates and jointly-controlled entities Investments in subsidiaries, associates and jointly-controlled entities are included in the Company’s balance sheet at cost less accumulated impairment losses. On disposal of these investments, the difference between disposal proceeds and the carrying amounts of the investments is recognised in the income statement. (i) Financial assets (i) Classification The Group classifies its financial assets in the following categories: at fair value through profit or loss, loans and receivables, held-to-maturity, and available-for-sale. The classification depends on the nature of the assets and the purpose for which the assets were acquired. Management determines the classification of its financial assets on initial recognition. • Financial assets at fair value through profit or loss This category has two sub-categories: financial assets held for trading, and those designated at fair value through profit or loss at inception. A financial asset is classified as held for trading if it is acquired principally for the purpose of selling in the short term. Financial assets designated as fair value through profit or loss at inception are those that are managed and their performances are evaluated on a fair value basis, in accordance with a documented Group investment strategy. Derivatives are also categorised as held for trading unless they are designated as hedges. Assets in this category are presented as current assets if they are either held for trading or are expected to be realised within 12 months after the balance sheet date. Financial assets designated at fair value through profit or loss comprise securities that otherwise would have been classified as available-for-sale. 124 Singapore Press Holdings NOTES TO THE FINANCIAL STATEMENTS August 31, 2014 2. SIGNIFICANT ACCOUNTING POLICIES (CONT’D) (i) Financial assets (cont’d) (i) Classification (cont’d) • Loans and receivables Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. They are presented as current assets, except for those expected to be realised later than 12 months after the balance sheet date which are presented as non-current assets. Loans and receivables comprise bank balances and fixed deposits and trade and other receivables. • Held-to-maturity financial assets Held-to-maturity financial assets are non-derivative financial assets with fixed or determinable payments and fixed maturities for which the Group has the positive intention and ability to hold to maturity. The Group has no held-to-maturity financial assets at balance sheet date. • Available-for-sale financial assets Available-for-sale financial assets are non-derivatives that are either designated in this category or not classified in any of the other categories. They are presented as non-current assets unless the investment matures or management intends to dispose of the assets within 12 months after the balance sheet date. Available-for-sale financial assets comprise debt and equity securities. (ii) Recognition and derecognition Purchases and sales of financial assets are recognised on trade-date – the date on which the Group commits to purchase or sell the asset. Financial assets are derecognised when the rights to receive cash flows from the financial assets have expired or have been transferred and the Group has transferred substantially all risks and rewards of ownership. On disposal of a financial asset, the difference between the net sale proceeds and its carrying amount is recognised in the income statement. Any amount in the fair value reserve relating to that asset is also transferred to the income statement. Financial assets and liabilities are offset and the net amount presented in the balance sheet when, and only when, the Group has a legal right to offset the amounts and intends either to settle on a net basis or to realise the asset and settle the liability simultaneously. (iii) Initial measurement Financial assets are initially recognised at fair value plus transaction costs except for financial assets at fair value through profit or loss, which are recognised at fair value. Transaction costs for financial assets at fair value through profit or loss are recognised immediately in the income statement. Annual Report 2014 125 NOTES TO THE FINANCIAL STATEMENTS August 31, 2014 2. SIGNIFICANT ACCOUNTING POLICIES (CONT’D) (i) Financial assets (cont’d) (iv) Subsequent measurement Available-for-sale financial assets and financial assets at fair value through profit or loss are subsequently carried at fair value. Loans and receivables are subsequently carried at amortised cost using the effective interest method less accumulated impairment losses. Gains and losses arising from changes in the fair values of financial assets at fair value through profit or loss, including the effects of currency translation, interest and dividends, are recognised in the income statement in the period in which they arise. Changes in the fair value of monetary assets denominated in foreign currencies and classified as available-for-sale are analysed into currency translation differences resulting from changes in the amortised cost of the asset and other changes. The currency translation differences are recognised in the income statement and other changes are recognised in other comprehensive income. Changes in fair values of non-monetary assets that are classified as available-for-sale are recognised in other comprehensive income, together with the related currency translation differences. Interest income on available-for-sale financial assets, calculated using the effective interest method, is recognised in the income statement. Dividends on available-for-sale equity securities are recognised in the income statement when the Group’s right to receive payment is established. When financial assets classified as available-for-sale are sold or impaired, the accumulated fair value adjustments recognised in the fair value reserve within equity are included in the income statement. (v) Impairment The Group assesses at each balance sheet date whether there is objective evidence that a financial asset or a group of financial assets is impaired and recognises an allowance for impairment when such evidence exists. • Loans and receivables Significant financial difficulties of the debtor, probability that the debtor will enter bankruptcy or financial reorganisation, and default or delinquency in payments are objective evidence that these financial assets are impaired. The carrying amount of these assets is reduced through the use of an impairment allowance account which is calculated as the difference between the carrying amount and the present value of estimated future cash flows, discounted at the original effective interest rate. The amount of the allowance for impairment is recognised in the income statement. When the asset becomes uncollectible, it is written-off against the allowance account. Subsequent recoveries of amounts previously written-off are recognised in the income statement. The allowance for impairment loss account is reduced through the income statement in a subsequent period when the amount of impairment loss decreases and the related decrease can be objectively measured. The carrying amount of the asset previously impaired is increased to the extent that the new carrying amount does not exceed the amortised cost, had no impairment been recognised in prior periods. 126 Singapore Press Holdings NOTES TO THE FINANCIAL STATEMENTS August 31, 2014 2. SIGNIFICANT ACCOUNTING POLICIES (CONT’D) (i) Financial assets (cont’d) (v) Impairment (cont’d) • Available-for-sale financial assets In the case of an equity security classified as available-for-sale, in addition to the objective evidence of impairment described in loans and receivables, a significant or prolonged decline in the fair value of the security below its cost is objective evidence that the security is impaired. When there is objective evidence that an available-for-sale financial asset is impaired, the cumulative loss that has been recognised directly in the fair value reserve is transferred from the fair value reserve within equity and recognised in the income statement. The cumulative loss is measured as the difference between the acquisition cost (net of any principal repayments and amortisation) and the current fair value, less any impairment loss on that financial asset previously recognised in income statement. Impairment loss on debt instruments classified as available-for-sale financial assets is reversed through the income statement. However, impairment losses with respect to equity instruments classified as available-for-sale financial assets are not reversed through the income statement. (j) Fair value estimation of financial assets and liabilities The fair values of financial instruments traded in active markets (such as exchange-traded and over-the-counter securities and derivatives) are based on quoted market prices at the balance sheet date. The quoted market prices used for financial assets are the current bid prices; the appropriate quoted market prices for financial liabilities are the current asking prices. The fair values of financial instruments that are not traded in an active market are determined by using valuation techniques. The Group uses a variety of methods and makes assumptions that are based on market conditions existing at each balance sheet date. Where appropriate, quoted market prices or dealer quotes for similar instruments are used. Valuation techniques, such as discounted cash flow analysis, are also used to determine the fair values of the financial instruments. The fair values of currency forwards are determined using actively quoted forward exchange rates. The fair values of interest rate swaps are calculated as the present value of the estimated future cash flows discounted at actively quoted interest rates. The fair values of cross currency swaps are calculated as the present value of the estimated future cash flows discounted at actively quoted interest and forward exchange rates. Annual Report 2014 127 NOTES TO THE FINANCIAL STATEMENTS August 31, 2014 2. SIGNIFICANT ACCOUNTING POLICIES (CONT’D) (k) Derivative financial instruments and hedging activities Derivative financial instruments are used to manage exposure to foreign exchange and interest rate risks arising from operating, financing and investing activities. Derivative financial instruments taken up directly by the Group are not used for trading purposes. A derivative financial instrument is initially recognised at its fair value on the date the derivative contract is entered into and is subsequently carried at its fair value. The method of recognising the resulting gain or loss depends on whether the derivative is designated as a hedging instrument, and if so, the nature of the item being hedged. The Group designates its derivatives for hedging purposes as either hedges of the fair value of recognised assets or liabilities or a firm commitment (fair value hedge), or hedges of highly probable forecast transactions (cash flow hedge). The Group has no fair value hedge at balance sheet date. The Group documents at the inception of the transaction the relationship between hedging instruments and hedged items, as well as its risk management objective and strategies for undertaking various hedge transactions. The Group also documents its assessment, both at hedge inception and on an ongoing basis, of whether the derivatives that are used in hedging transactions are highly effective in offsetting changes in fair values or cash flows of the hedged items. The carrying amount of a derivative designated as a hedge is presented as a non-current asset or liability if the remaining expected life of the hedged item is more than 12 months, and as a current asset or liability if the remaining expected life of the hedged item is less than 12 months. The fair value of a trading derivative is presented as a current asset or liability. (i) Cash flow hedge The Group has entered into interest rate swaps that are cash flow hedges for the Group’s exposure to interest rate risk on its borrowings. These contracts entitle the Group to receive interest at floating rates on notional principal amounts and oblige the Group to pay interest at fixed rates on the same notional principal amounts, thus allowing the Group to raise borrowings at floating rates and swap them into fixed rates. The fair value changes on the effective portion of these interest rate swaps are recognised in other comprehensive income and transferred to the income statement in the periods when the interest expense on the borrowings is recognised in the income statement. The gain or loss relating to the ineffective portion is recognised immediately in the income statement. (ii) Derivatives that do not qualify for hedge accounting Changes in the fair value of any derivative instruments that do not qualify for hedge accounting are recognised immediately in the income statement. 128 Singapore Press Holdings NOTES TO THE FINANCIAL STATEMENTS August 31, 2014 2. SIGNIFICANT ACCOUNTING POLICIES (CONT’D) (l) Intangible assets (i) Goodwill arising from business combination Goodwill arising from business combination on or after September 1, 2009, is the excess of the consideration transferred, the amount of any non-controlling interest in the acquiree and the acquisitiondate fair value of any previous equity interest in the acquiree over the fair value of the identifiable net assets and contingent liabilities acquired. If this is less than the fair value of the net assets of the subsidiary acquired in the case of a bargain purchase, the difference is recognised directly in income statement. Goodwill arising from business combination prior to September 1, 2009 and on acquisition of associates and jointly-controlled entities represents the difference between the fair value of the consideration transferred and the fair value of the Group’s share of identifiable net assets acquired at the date of acquisition. Goodwill arising from business combination is recognised separately as intangible assets and carried at cost less accumulated impairment losses. Goodwill on acquisition of associates and jointly-controlled entities is recorded as part of the carrying value of the investments in the consolidated balance sheet. The gains and losses on the disposal of subsidiaries, associates and jointly-controlled entities include the carrying amount of goodwill relating to the entity sold. (ii) Technology, trademarks, licences, mastheads and others Technology, trademarks, licences, mastheads and other intangible assets acquired as part of business combinations are initially recognised at their fair values at the acquisition date and are subsequently carried at cost (i.e. the fair values on initial recognition) less accumulated amortisation and accumulated impairment losses. The fair value of patents and trademarks acquired in a business combination is based on the discounted estimated royalty payments that are expected to be avoided as a result of the patent and trademark being owned, or the multi-period excess earnings method, whereby the subject asset is valued after deducting a fair return on all other assets that are part of creating the related cash flows. The fair value of customer relationships acquired in a business combination is determined using the multi-period excess earnings method. Technology and licenses acquired separately are initially recognised at cost and subsequently carried at cost less accumulated amortisation and accumulated impairment losses. These costs are amortised to the income statement using the straight-line method over 2 to 20 years, which is the shorter of their estimated useful lives and periods of contractual rights. The amortisation period and amortisation method of intangible assets other than goodwill are reviewed at least at each balance sheet date. The effects of any revision are recognised in the income statement when the changes arise. Annual Report 2014 129 NOTES TO THE FINANCIAL STATEMENTS August 31, 2014 2. SIGNIFICANT ACCOUNTING POLICIES (CONT’D) (m)Inventories Inventories comprise raw materials and consumable stores, and are stated at the lower of cost and net realisable value. The cost of raw materials and consumable stores includes transport and handling costs, and any other directly attributable costs, and is determined on the weighted average basis. Net realisable value is the estimated selling price in the ordinary course of business, less estimated variable selling expenses. (n)Borrowings Borrowings are initially recognised at fair value (net of transaction costs incurred) and subsequently carried at amortised cost. Any difference between the proceeds (net of transaction costs) and the redemption value is taken to the income statement over the period of the borrowings using the effective interest method. Borrowings are presented as current liabilities unless the Group has an unconditional right to defer settlement for at least 12 months after the balance sheet date, in which case they are presented as non-current liabilities. (o) Trade and other payables Trade and other payables represent liabilities for goods and services provided to the Group prior to the end of financial year which are unpaid. They are classified as current liabilities if payment is due within one year or less (or in the normal operating cycle of the business if longer). If not, they are presented as non-current liabilities. Trade and other payables are initially carried at fair value, and subsequently carried at amortised cost using the effective interest method. (p) Dividends payable Interim dividends are recorded during the financial year in which they are declared payable. Final dividends are recorded during the financial year in which the dividends are approved by the shareholders. (q) Employee benefits Employee benefits are recognised as an expense, unless the cost qualifies to be capitalised as an asset. (i) Short-term employee benefits All short-term employee benefits, including accumulated compensated absences, are recognised in the income statement in the period in which the employees rendered their services to the Group. (ii) Defined contribution plans Defined contribution plans are post-employment benefit plans under which the Group pays fixed contributions into separate entities such as Singapore’s Central Provident Fund on a mandatory, contractual or voluntary basis. The Group has no further payment obligations once the contributions have been paid. The Group’s contributions to defined contribution plans are recognised in the financial year when they are due. 130 Singapore Press Holdings NOTES TO THE FINANCIAL STATEMENTS August 31, 2014 2. SIGNIFICANT ACCOUNTING POLICIES (CONT’D) (q) Employee benefits (cont’d) (iii) Share-based compensation • Share options The share option scheme allows selected employees of the Company and/or its subsidiaries, including the Executive Director of the Company, and other selected participants, to subscribe for ordinary shares in the Company at an agreed exercise price. The fair value of the options granted is recognised as a share-based compensation expense in the income statement with a corresponding increase in the share-based compensation reserve over the vesting period. The fair value is measured at grant date and recognised over the vesting period during which the employees become unconditionally entitled to the options. When the options are exercised, the proceeds received (net of any directly attributable transaction costs) and the balance previously recognised in the share-based compensation reserve are credited to share capital when new ordinary shares are issued, or to the treasury share account within equity when treasury shares purchased are re-issued to the employees. • Performance shares Persons eligible to participate in the SPH Performance Share Plan (“the Plan”) are selected Group Employees of such rank and service period as the Remuneration Committee (“the Committee”) may determine, and other participants selected by the Committee. The Plan contemplates the award of fully-paid ordinary shares, their equivalent cash value or combinations thereof, free of charge, provided that certain prescribed performance conditions are met and upon expiry of the prescribed vesting periods. The fair value of the performance shares granted is recognised as a share-based compensation expense in the income statement with a corresponding increase in the share-based compensation reserve over the vesting period. The amount is determined by reference to the fair value of the performance shares on grant date. If the performance condition is a market condition, the probability of the performance condition being met is taken into account in estimating the fair value of the ordinary shares granted at the grant date. The compensation cost shall be charged to the income statement on a basis that fairly reflects the manner in which the benefits will accrue to the employee under the Plan over the prescribed vesting periods from date of grant. No adjustments to the amounts charged to the income statement are made whether or not the market condition is met. For performance share grants with non-market conditions, the Company revises its estimates of the number of share grants expected to vest and corresponding adjustments are made to the income statement and share-based compensation reserve. The Company assesses this change at the end of each financial reporting period. Annual Report 2014 131 NOTES TO THE FINANCIAL STATEMENTS August 31, 2014 2. SIGNIFICANT ACCOUNTING POLICIES (CONT’D) (r)Provisions Provisions are recognised when the Group has a present legal or constructive obligation as a result of past events, it is more likely than not that an outflow of resources will be required to settle the obligation, and a reliable estimate of the amount can be made. (s) Income taxes Current income tax for current and prior periods is recognised at the amount expected to be paid to (or recovered from) the tax authorities, using the tax rates and tax laws that have been enacted or substantively enacted by the balance sheet date. Deferred income tax is recognised for all temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements, except when the deferred income tax arises from the initial recognition of goodwill or an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither accounting nor taxable profit or loss. Deferred income tax is measured: (i) at the tax rates that are expected to apply when the related deferred income tax asset is realised or the deferred income tax liability is settled, based on tax rates and tax laws that have been enacted or substantively enacted by the balance sheet date; and (ii) based on the tax consequence that will follow from the manner in which the Group expects, at the balance sheet date, to recover or settle the carrying amounts of its assets and liabilities. Deferred income tax liabilities are recognised on temporary differences arising on investments in subsidiaries, associates and jointly-controlled entities, except where the Group is able to control the timing of the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred income tax assets are recognised to the extent that it is probable that future taxable profit will be available against which the deductible temporary differences and tax losses can be utilised. Current and deferred taxes are recognised as income or expense in the income statement, except to the extent that the tax arises from a business combination or a transaction which is recognised directly in equity. Deferred tax arising from a business combination is adjusted against the related goodwill. (t) Revenue recognition Revenue comprises the fair value of the consideration received or receivable for the sale of goods and rendering of services in the ordinary course of the Group’s activities. Revenue is presented, net of goods and services tax, rebates, discounts and returns, and after eliminating sales within the Group. The Group recognises revenue when the amount of revenue and related cost can be reliably measured, when it is probable that the collectability of the related receivables is reasonably assured and when the specific criteria for each of the Group’s activities are met as follows: (i) Revenue from the sale of the Group’s products is recognised on completion of delivery; (ii) Revenue from advertisements is recognised in the period in which the advertisement is published or broadcasted; 132 Singapore Press Holdings NOTES TO THE FINANCIAL STATEMENTS August 31, 2014 2. SIGNIFICANT ACCOUNTING POLICIES (CONT’D) (t) Revenue recognition (cont’d) (iii) Revenue from rental and rental-related services is recognised on a straight-line basis over the lease term. Lease incentives granted are recognised as an integral part of the total rental income; (iv) Revenue from the provision of other services is recognised in the period in which the services are rendered; (v) Dividend income is recognised when the right to receive payment is established; and (vi) Interest income is recognised using the effective interest method. (u) Operating leases When a group company is the lessee: Leases where substantially all of the risks and rewards incidental to ownership are retained by the lessors are classified as operating leases. Payments made under operating leases are recognised as expenses in the income statement on a straight-line basis over the period of the lease. Contingent rents are recognised as an expense in the income statement when incurred. When a group company is the lessor: Leases where the Group retains substantially all risks and rewards incidental to ownership are classified as operating leases. Assets leased out under operating leases are included in investment properties. Rental income from operating leases is recognised in the income statement on a straight-line basis over the lease term. Lease incentives granted are recognised as an integral part of the total rental income, over the term of the lease. Contingent rents are recognised as income in the income statement when earned. (v) Share capital and treasury shares Ordinary shares are classified as equity. Incremental costs directly attributable to the issuance of new ordinary shares are deducted against the share capital account. The consideration paid for treasury shares, including any directly attributable incremental costs, is presented as a component within shareholders’ equity until the shares are cancelled, re-issued or disposed of. Where such shares are subsequently re-issued or disposed of, any consideration received, net of any directly attributable incremental transaction costs, is included in shareholders’ equity. Realised gain or loss on disposal or re-issue of treasury shares is included in retained profits of the Company. When treasury shares are subsequently cancelled, the cost of the treasury shares is deducted against the share capital account, if the shares are purchased out of capital of the Company, or against the retained profits of the Company, if the shares are purchased out of profits of the Company. (w) Segment reporting Segmental information are reported in a manner consistent with the internal reporting provided to the Chief Executive Officer of the Company who conducts a regular review for allocation of resources and assessment of performance of the operating segments. (x) Cash and cash equivalents For the purpose of presentation in the consolidated statement of cash flows, cash and cash equivalents include cash on hand and deposits with financial institutions which are subject to an insignificant risk of change in value. Annual Report 2014 133 NOTES TO THE FINANCIAL STATEMENTS August 31, 2014 3. CRITICAL ACCOUNTING ESTIMATES, ASSUMPTIONS AND JUDGEMENTS The preparation of financial statements in conformity with FRS requires management to make estimates, assumptions and judgements that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Estimates, assumptions and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. Revisions to accounting estimates are recognised in the period in which the estimates are revised and in any future periods affected. Information about assumptions and estimation uncertainties that have significant effect on the amounts recognised are as follows: • Fair value estimation The fair value of financial instruments that are not traded in an active market is determined by using valuation techniques. The Group uses a variety of methods and makes assumptions that are based on market conditions existing at each balance sheet date. Methods used include estimating with reference to recent arm’s length transactions, discounted cash flow projections and the underlying net asset value of the investee companies. The fair value of investment properties is based on independent professional valuations using valuation techniques and assumptions. • Recoverable value of goodwill The Group determines whether goodwill is impaired at least on an annual basis. This requires an estimation of the value-in-use of the cash-generating units to which goodwill is allocated. Estimating the value-in-use requires the Group to make an estimate of the expected future cash flows from the cash-generating unit and also to choose an appropriate discount rate in order to calculate the present value of those cash flows. Forecasts of future cash flows are based on the Group’s estimates using sector and industry trends, general market and economic conditions, changes in technology and other available information. Information about the assumptions and their risk factors relating to goodwill impairment are discussed in Note 14(a). Information about critical judgements in applying accounting policies that have significant effect on the amounts recognised in the financial statements is as follows: • Impairment of available-for-sale financial assets The Group follows the guidance of FRS 39 in determining when an investment is considered impaired. The Group evaluates the duration and extent to which the fair value of an investment is less than its cost in its assessment of impairment allowances. Under exceptional circumstances, the Group may apply judgement based on qualitative facts such as the financial health of and near-term business outlook of the issuer of the instrument, changes in technology and operational and financing cash flow. 134 Singapore Press Holdings NOTES TO THE FINANCIAL STATEMENTS August 31, 2014 4. SHARE CAPITAL AND TREASURY SHARES Number of Shares ’000 Issued and fully paid, with no par value Management shares Ordinary shares Treasury shares Movements during the financial year: Beginning of financial year Issue of ordinary shares fully paid under the Singapore Press Holdings Group (1999) Share Option Scheme Issue of management shares fully paid in accordance with the Newspaper and Printing Presses Act Purchase of treasury shares Treasury shares re-issued for the fulfilment of share awards vested under SPH Performance Share Plan End of financial year Group and Company 2014 Number Amount of Shares S$’000 ’000 2013 Amount S$’000 16,362 1,600,649 1,617,011 (765) 7,109 515,700 522,809 (3,046) 16,360 1,600,486 1,616,846 (1,585) 7,102 515,012 522,114 (6,269) 1,616,246 519,763 1,615,261 515,845 1,615,261 515,845 1,612,000 500,802 163 688 4,265 18,934 2 1,615,426 (1,000) 7 516,540 (4,002) 43 1,616,308 (3,100) 188 519,924 (12,314) 1,820 7,225 2,053 8,235 1,616,246 519,763 1,615,261 515,845 The holders of both management and ordinary shares rank pari passu in respect of all dividends declared by the Company and in respect of all bonus and rights issues made by the Company, as well as in the right to return of capital and to participate in all surplus assets of the Company in liquidation. In terms of voting rights, both classes of shareholders are entitled either on a poll or by a show of hands to one vote for each share, except that on any resolution relating to the appointment or dismissal of a director or any member of the staff of the Company, the holders of management shares are entitled either on a poll or by a show of hands to two hundred votes for each management share held. (a) Treasury shares The Company acquired 1,000,000 (2013: 3,100,000) of its own shares through purchases on the Singapore Exchange during the current financial year. The total amount paid to acquire the shares was S$4.0 million (2013: S$12.3 million). The shares, held as treasury shares, were included as deduction against shareholders’ equity. The Company re-issued 1,819,918 (2013: 2,053,578) treasury shares during the financial year for the fulfilment of share awards vested under the SPH Performance Share Plan at a total value of S$7.2 million (2013: S$8.2 million). Annual Report 2014 135 NOTES TO THE FINANCIAL STATEMENTS August 31, 2014 4. SHARE CAPITAL AND TREASURY SHARES (CONT’D) (b) Share options At the Extraordinary General Meeting held on December 5, 2006, the shareholders approved the adoption of the SPH Performance Share Plan (“the Plan”) and the Singapore Press Holdings Group (1999) Share Option Scheme (“1999 Scheme”) was terminated with regard to the grant of further options. Options granted and outstanding prior to such termination will continue to be valid and be subject to the terms and conditions of the 1999 Scheme. Movements in the number of the unissued shares of the Company under option during the financial year and their exercise prices are as follows: Singapore Press Holdings Group (1999) Share Option Scheme (“1999 Scheme”) 2014 Grant Date Expiry Date 16.12.03 21.12.04 16.12.05 16.12.13 21.12.14 16.12.15 Exercise Price (S$) 3.69 4.54 4.30 Balance 01.09.13 Options Exercised Options Lapsed Balance 31.08.14 767,175 10,410,775 9,722,700 (163,500) – – (603,675) (538,475) (477,275) – 9,872,300 9,245,425 20,900,650 (163,500) (1,619,425) 19,117,725 2013 Grant Date Expiry Date 28.10.02 16.12.03 21.12.04 16.12.05 28.10.12 16.12.13 21.12.14 16.12.15 Exercise Price (S$) 3.91 3.69 4.54 4.30 Balance 01.09.12 Options Exercised Options Lapsed Balance 31.08.13 2,268,325 2,315,300 10,809,625 12,308,125 (592,725) (1,521,775) – (2,150,225) (1,675,600) (26,350) (398,850) (435,200) – 767,175 10,410,775 9,722,700 27,701,375 (4,264,725) (2,536,000) 20,900,650 All the outstanding options as at the balance sheet date were exercisable. Options exercised in 2014 resulted in 163,500 shares (2013: 4,264,725) being issued at an average price of S$3.69 (2013: S$4.03) each. 136 Singapore Press Holdings NOTES TO THE FINANCIAL STATEMENTS August 31, 2014 4. SHARE CAPITAL AND TREASURY SHARES (CONT’D) (c) Performance shares During the financial year, 1,954,145 (2013: 2,086,980) performance shares were granted subject to the terms and conditions of the Plan. Movements in the number of performance shares outstanding during the financial year are summarised below: 2014 Grant Date 12.01.10 12.01.11 12.01.12 11.01.13 13.01.14 Outstanding as at 01.09.13 (’000) 541 1,699 1,997 2,047 – Adjusted* (’000) – (268) (121) – – Granted (’000) – – – – 1,954 Vested (’000) Outstanding as at Lapsed 31.08.14 (’000) (’000) (535) (930) (355) – – (6) (28) (51) (90) (41) – 473 1,470 1,957 1,913 2013 Grant Date 12.01.09 12.01.10 12.01.11 12.01.12 11.01.13 Outstanding as at 01.09.12 (’000) 526 1,909 2,000 2,035 – Adjusted* (’000) – (317) 254 – – Granted (’000) – – – – 2,087 Vested (’000) Lapsed (’000) (519) (1,025) (509) – – (7) (26) (46) (38) (40) Outstanding as at 31.08.13 (’000) – 541 1,699 1,997 2,047 *Adjusted at end of the performance period based on the level of achievement of pre-set performance conditions. The shares awarded at the vesting date could range from 0% to 150% of the grant, depending on the level of achievement against the pre-set performance conditions. Annual Report 2014 137 NOTES TO THE FINANCIAL STATEMENTS August 31, 2014 4. SHARE CAPITAL AND TREASURY SHARES (CONT’D) (c) Performance shares (cont’d) The fair value of the performance shares is determined at grant date using the Monte Carlo simulation model. The number of performance shares granted during the financial year, their fair values and the assumption inputs used are as follows: 2014 Number Vesting of Date Shares Grant Date (’000) 13.01.14(a) 13.01.14(a) 13.01.14(b) 13.01.14(a) 13.01.16 13.01.17 13.01.17 13.01.18 387 387 793 387 Fair Value per Share S$ 3.58 3.38 3.49 3.18 Expected Volatility* FTSE ST All Share Index SPH (%) (%) 12.94 12.94 12.94 12.94 Correlation between SPH Share Share Price and FTSE ST Price at Expected Risk-free Grant All Share Dividend Interest Date Index^ Yield Rate NA NA 14.89 NA % % 6.00 6.00 6.00 6.00 0.33 0.44 0.44 0.87 S$ NA NA 0.58 NA 4.03 4.03 4.03 4.03 2013 Number Vesting of Date Shares Grant Date (’000) 11.01.13 11.01.13(a) 11.01.13(b) 11.01.13(a) (a) 10.01.15 10.01.16 10.01.16 10.01.17 413 413 847 414 Fair Value per Share S$ 3.67 3.47 3.45 3.28 Expected Volatility* FTSE ST All Share Index SPH (%) (%) 13.59 13.59 13.59 13.59 Correlation between SPH Share Share Price and FTSE ST Price at Expected Risk-free Grant All Share Dividend Interest Date Index^ Yield Rate NA NA 15.51 NA % % 6.00 6.00 6.00 6.00 0.25 0.27 0.27 0.30 S$ NA NA 0.61 NA 4.12 4.12 4.12 4.12 * ^ (a) Derived based on 36 months of historical volatility prior to grant date. Derived based on 36 months of historical correlation of returns prior to grant date. Granted with non-market conditions. (b) Granted with both market and non-market conditions. NA Not applicable For non-market conditions, achievement factors have been estimated based on management inputs for the purpose of accrual for the performance shares until the achievement of the performance conditions can be accurately ascertained. During the current financial year, the Group recognised S$5.0 million (2013: S$6.8 million) of share-based compensation expense in respect of performance shares based on the fair values determined on grant date and estimation of the share grants that will ultimately vest. 138 Singapore Press Holdings NOTES TO THE FINANCIAL STATEMENTS August 31, 2014 5.RESERVES Group Company 2014 S$’000 2013 S$’000 2014 S$’000 2013 S$’000 (10,675) 19,144 (6,386) 525,824 (1,498) (13,858) 21,544 (1,289) 421,966 343 – 19,098 (251) 41,037 – – 21,544 (309) 51,718 – 526,409 428,706 59,884 72,953 Non-distributable Capital reserve [Note 5(a)] Share-based compensation reserve [Note 5(b)] Hedging reserve [Note 5(c)] Fair value reserve [Note 5(d)] Currency translation reserve (a) Capital reserve Capital reserve relates to capitalised listing expenses incurred in relation to the listing of a subsidiary on the Main Board of Singapore Exchange Securities Trading Limited. (b) Share-based compensation reserve Group (c) Company 2014 S$’000 2013 S$’000 2014 S$’000 2013 S$’000 Beginning of financial year Share-based compensation expense [Note 24] Share-based compensation expense charged to a jointly-controlled entity Exercise of share options Lapse of share options Award of performance shares 21,544 4,976 24,409 6,766 21,544 4,930 24,409 6,766 35 (85) (778) (6,548) 29 (1,755) (441) (7,464) 35 (85) (778) (6,548) 29 (1,755) (441) (7,464) End of financial year 19,144 21,544 19,098 21,544 Hedging reserve Group Company 2014 S$’000 2013 S$’000 Beginning of financial year (1,289) (6,434) (309) (556) Fair value changes Deferred tax on fair value changes [Note 6(a)] (9,937) 80 1,416 (408) (470) 80 (136) 23 (9,857) 1,008 (390) (113) 4,852 (92) 4,984 (847) 540 (92) 434 (74) 4,760 4,137 448 360 (6,386) (1,289) (251) (309) Transferred to finance costs Deferred tax on transfer [Note 6(a)] End of financial year 2014 S$’000 2013 S$’000 139 Annual Report 2014 NOTES TO THE FINANCIAL STATEMENTS August 31, 2014 5. RESERVES (CONT’D) (d) Fair value reserve Group Company 2014 S$’000 2013 S$’000 2014 S$’000 2013 S$’000 Beginning of financial year 421,966 324,711 51,718 43,927 Financial assets, available-for-sale - Fair value changes - Deferred tax on fair value changes [Note 6(a)] 113,817 (4,606) 85,049 857 (855) – 7,791 – 109,211 85,906 (855) 7,791 Transferred to income statement [Note 27] Deferred tax on transfer [Note 6(a)] End of financial year (4,583) (770) 13,686 (2,337) (9,826) – – – (5,353) 11,349 (9,826) 525,824 421,966 41,037 – 51,718 6. INCOME TAXES (a) Deferred income taxes Deferred income tax assets and liabilities are offset when there is a legally enforceable right to offset current income tax assets against current income tax liabilities and when the deferred income taxes relate to the same fiscal authority. The following amounts, determined after appropriate offsetting, are shown on the balance sheets: Group Deferred income tax liabilities Deferred income tax assets Company 2014 S$’000 2013 S$’000 2014 S$’000 2013 S$’000 52,401 (5,500) 46,483 (5,165) 29,397 (4,089) 33,936 (4,160) 46,901 41,318 25,308 29,776 Deferred income tax taken to equity during the financial year is as follows: Group Hedging reserve [Note 5(c)] Fair value reserve [Note 5(d)] Company 2014 S$’000 2013 S$’000 2014 S$’000 2013 S$’000 12 5,376 1,255 1,480 12 – 51 – 5,388 2,735 12 51 140 Singapore Press Holdings NOTES TO THE FINANCIAL STATEMENTS August 31, 2014 6. INCOME TAXES (CONT’D) (a) Deferred income taxes (cont’d) Deferred income tax assets are recognised for tax losses and capital allowances carried forward to the extent that realisation of the related tax benefits through future taxable profits is probable. The Group has unrecognised tax losses and capital allowances of S$1.8 million (2013: S$1.8 million) and S$0.1 million (2013: S$0.1 million) respectively at the balance sheet date which can be carried forward and used to offset against future taxable income subject to meeting certain statutory requirements by those companies with unrecognised tax losses and capital allowances in their respective countries of incorporation. The tax losses have no expiry dates. The movements in the deferred income tax assets and liabilities (prior to offsetting of balances within the same tax jurisdiction) during the financial year are as follows: 2014 Group (i) Deferred income tax liabilities Accelerated Tax Depreciation S$’000 Fair Value Changes S$’000 Others S$’000 Total S$’000 Beginning of financial year (Credited)/Debited to income statement Debited to equity [Note 5(d)] Currency translation differences 42,378 240 3,865 46,483 (2,433) – – – 5,376 – 3,261 – (286) End of financial year 39,945 5,616 6,840 52,401 Provisions S$’000 Fair Value Changes S$’000 Total S$’000 (ii) 828 5,376 (286) Deferred income tax assets Beginning of financial year Credited to income statement Debited to equity [Note 5(c)] Currency translation differences (5,102) (334) – (13) (63) – 12 – (5,165) (334) 12 (13) End of financial year (5,449) (51) (5,500) Annual Report 2014 141 NOTES TO THE FINANCIAL STATEMENTS August 31, 2014 6. INCOME TAXES (CONT’D) (a) Deferred income taxes (cont’d) 2013 Group (i) Deferred income tax liabilities (ii) Accelerated Tax Depreciation S$’000 Fair Value Changes S$’000 – – 240 – Others S$’000 3,747 (208) – 40 Total S$’000 Beginning of financial year Credited to income statement Debited to equity [Note 5(d)] Acquisition of a subsidiary [Note 20(b)] Acquisition of a business by a subsidiary [Note 20(c)] 50,444 (8,066) – – 54,191 (8,274) 240 40 – – 286 286 End of financial year 42,378 240 3,865 46,483 Provisions S$’000 Fair Value Changes S$’000 Total S$’000 Deferred income tax assets Beginning of financial year Credited to income statement Debited to equity [Note 5(c) and 5(d)] Currency translation differences (4,406) (708) – 12 (2,558) – 2,495 – (6,964) (708) 2,495 12 End of financial year (5,102) (63) (5,165) 142 Singapore Press Holdings NOTES TO THE FINANCIAL STATEMENTS August 31, 2014 6. INCOME TAXES (CONT’D) (a) Deferred income taxes (cont’d) 2014 Company (i) Deferred income tax liabilities Accelerated Tax Depreciation S$’000 (ii) Others S$’000 Total $’000 Beginning of financial year (Credited)/Debited to income statement 33,823 (4,559) 113 20 33,936 (4,539) End of financial year 29,264 133 29,397 Provisions S$’000 Fair Value Changes S$’000 Total S$’000 Deferred income tax assets Beginning of financial year Credited to income statement Debited to equity [Note 5(c)] (4,097) 59 – (63) – 12 (4,160) 59 12 End of financial year (4,038) (51) (4,089) 2013 Company (i) Deferred income tax liabilities Accelerated Tax Depreciation S$’000 (ii) Others S$’000 Total $’000 Beginning of financial year Credited to income statement Transfer in from subsidiary 36,639 (2,816) – – – 113 36,639 (2,816) 113 End of financial year 33,823 113 33,936 Provisions S$’000 Fair Value Changes S$’000 Total S$’000 Deferred income tax assets Beginning of financial year Credited to income statement Debited to equity [Note 5(c)] (3,485) (612) – (114) – 51 (3,599) (612) 51 End of financial year (4,097) (63) (4,160) 143 Annual Report 2014 NOTES TO THE FINANCIAL STATEMENTS August 31, 2014 6. INCOME TAXES (CONT’D) (b) Income tax expense Group 2014 S$'000 2013 S$'000 58,766 510 65,623 (9,282) 59,276 56,341 (1,605) (16) (1,844) 300 (1,621) (1,544) 57,655 54,797 Tax expense attributable to profit is made up of: Current year - Current tax - Deferred tax Prior years - Current tax - Deferred tax The income tax expense on profit for the financial year varies from the amount of income tax determined by applying the Singapore standard rate of income tax to profit before taxation due to the following factors: Group 2014 S$'000 2013 S$'000 Profit before taxation 528,391 489,099 Tax calculated at corporate tax rate of 17% Tax exempt income Income taxed at concessionary rate Income not subject to tax Expenses not deductible for tax purposes Deferred tax benefits not recognised Tax relief for contributions made to Institutes of Public Character Effect of different tax rates in other countries Tax rebates Tax incentives Others Over-provision in prior years 89,826 (561) (319) (35,153) 8,156 165 (1,194) 820 (572) (1,540) (352) (1,621) 83,147 (500) (195) (34,737) 13,777 13 (1,549) 616 (479) (3,256) (496) (1,544) 57,655 54,797 Tax charge 144 Singapore Press Holdings NOTES TO THE FINANCIAL STATEMENTS August 31, 2014 7.BORROWINGS 2014 S$’000 Group 2013 S$’000 2014 S$’000 Company 2013 S$’000 937,007 872,495 – – 599,828 229,654 599,485 229,436 599,828 229,654 599,485 229,436 36,006 3,521 – – – – 1,805,476 1,740,943 829,482 828,921 Borrowings are repayable: Within 1 year 926,369 2,721 829,482 – Between 1 - 5 years After 5 years 581,759 297,348 1,441,324 296,898 – – 828,921 – 879,107 1,738,222 – 828,921 1,805,476 1,740,943 829,482 828,921 Secured Term loans [Note 7(a) and 7(b)] Unsecured Fixed rate notes [Note 7(c)] Term loan [Note 7(d)] Loans from non-controlling interests [Note 7(e) and 7(f)] Other banking facilities 36,216 2,771 (a) On July 24, 2013, SPH REIT, a subsidiary of the Group, established a term loan facility available for drawdown up to the amount of S$975 million (2013: S$975 million). As at the balance sheet date, the amount drawn down was S$850 million (2013: S$850 million). The amount of S$843.1 million (2013: S$841.2 million) represented the loan stated at amortised cost. The loan has repayment terms ranging from three to seven years, of which S$250 million is repayable on July 23, 2016, S$300 million on July 23, 2018 and S$300 million on July 22, 2020. The term loan is secured by way of a first legal mortgage on SPH REIT’s investment property – Paragon [Note 9], first legal charge over the tenancy account and sales proceeds account for Paragon, and an assignment of certain insurances taken in relation to Paragon. After taking into account fixed interest rates and interest rate swap arrangements totalling S$465 million (2013: S$430 million), the effective interest rate as at the balance sheet date on the outstanding term loan of S$850 million (2013: S$850 million) was 2.33% (2013: 2.07%) per annum. (b) As at August 31, 2014, The Seletar Mall Pte Ltd (“Seletar Mall”), a subsidiary of the Group, had a term loan facility available for drawdown up to amount of S$138 million (2013: S$138 million). The term loan is repayable six months from the temporary occupation permit date of Seletar Mall which is expected to be within one year. As at August 31, 2014, the amount drawn down was S$94.1 million (2013: S$31.7 million). The amount of S$93.9 million (2013: S$31.3 million) represented the loan stated at amortised cost. The term loan facility is secured by way of a first legal mortgage on Seletar Mall’s investment property [Note 9], an assignment of insurance taken in relation to the investment property and a deed of subordination in respect of the loans from the Company [Note 16(a)(i)] and the shareholders of Seletar Mall. The effective interest rate as at the balance sheet date on the outstanding term loan was 1.31% (2013: 1.33%) per annum. Annual Report 2014 145 NOTES TO THE FINANCIAL STATEMENTS August 31, 2014 7. BORROWINGS (CONT’D) (c) On February 22, 2010, the Company established a S$1 billion Multicurrency Medium Term Note Programme. Notes outstanding as at August 31, 2014 comprise S$600 million (2013: S$600 million) 5-year unsecured fixed rate notes due on March 2, 2015. The amount of S$599.8 million (2013: S$599.5 million) as at the balance sheet date represented the notes stated at amortised cost. Interest at 2.81% (2013: 2.81%) per annum is payable semi-annually in arrears. The fixed rate notes are listed on the Singapore Exchange Securities Trading Limited (“SGX-ST”). (d) As at August 31, 2014, the Company had an unsecured term loan facility available for drawdown up to the amount of S$230 million (2013: S$230 million). The term loan is repayable six months from the temporary occupation permit date of Seletar Mall which is expected to be within one year. As at the balance sheet date, the amount drawn down was S$230 million (2013: S$230 million). The amount of S$229.7 million (2013: S$229.4 million) represented the loan stated at amortised cost. After taking into account interest rate swap arrangement of S$120 million, the effective interest rate as at the balance sheet date on the outstanding term loan of S$230 million was 1.25% (2013: 1.25%) per annum. (e) As at August 31, 2014, Seletar Mall had an outstanding unsecured loan of S$36.9 million (2013: S$36.9 million) from its non-controlling interest, United Engineers Developments Pte Ltd. The loan is interest-free and has a repayment term of four years from April 17, 2012. The amount of S$36.0 million (2013: S$35.4 million) represented the loan stated at amortised cost. On initial recognition, the loan was recognised at its fair value, which was determined from the cash flow analyses, discounted at the market borrowing rates on the inception date. The difference between the fair value and principal loan amount was recognised in the income statement. The unamortised fair value gain as at balance sheet date was S$0.9 million (2013: S$1.5 million). (f) As at August 31, 2014, Blu Inc (Holdings) Malaysia Sdn Bhd, a subsidiary of the Group, had an outstanding unsecured loan of S$0.2 million (2013: S$0.6 million) from its non-controlling interests. The loan is interestfree and has no fixed repayment terms although repayment is not expected within one year. (g) In respect of bank borrowings, where appropriate, the Group’s policy is to minimise its interest rate risk exposure by entering into interest rate swaps over the duration of its borrowings. Accordingly, the Company and SPH REIT entered into interest rate swap contracts to swap floating rates for fixed interest rates as part of their interest rate risk management. Under the interest rate swaps, the Company and SPH REIT agreed with other parties to exchange at specified intervals, the difference between fixed rate and floating rate interest amounts calculated by reference to the agreed notional principal amounts. At August 31, 2014, the fixed interest rates were 0.66% (2013: 0.66%) per annum for the Company and 1.44% to 2.31% (2013: 2.24% to 2.32%) per annum for SPH REIT. The floating rates are referenced to Singapore dollar swap offer rate and repriced every three months. The notional principal amounts of the outstanding interest rate swap contracts and their corresponding fair values as at August 31, 2014 are: Group Company 2014 2013 2014 2013 S$’000 S$’000 S$’000 S$’000 Notional due: Within 1 year Between 1 - 5 years After 5 years Fair values* [Note 18] * 120,000 35,000 280,000 (9,060) – 120,000 280,000 (1,352) 120,000 – – (303) – 120,000 – (372) The fair values of interest rate swap contracts had been calculated (using rates quoted by the Group’s bankers) assuming the contracts are terminated at the balance sheet date. These interest rate swaps are contracted with counter-parties which are banks and financial institutions with acceptable credit ratings. 146 Singapore Press Holdings NOTES TO THE FINANCIAL STATEMENTS August 31, 2014 7. BORROWINGS (CONT’D) (h) As at August 31, 2014, the fair value of the fixed rate notes was S$605.0 million (2013: S$614.2 million) based on its quoted price. The fair value of the loan from non-controlling interests was S$36.0 million (2013: S$35.4 million), determined from the cash flow analysis, discounted at market borrowing rate of 1.57% (2013: 1.84%) per annum which management expected to be available to the Group. 8. PROPERTY, PLANT AND EQUIPMENT (a)2014 Group Furniture and Fittings S$’000 Motor Vehicles S$’000 731,368 14 20,562 – 2,151 2 21 2,420 – 1,123 – – Leasehold Plant Land and and Buildings Equipment S$’000 S$’000 Cost Beginning of financial year Currency translation differences Acquisition of businesses by subsidiaries [Note 20(c)] Additions Transfer in from capital work-in-progress Disposals/Write-offs 236,994 (192) – 30 – – 21,906 (15,711) 180 (826) – (61) Total S$’000 991,075 (176) 21 3,573 22,086 (16,598) End of financial year 236,832 740,018 21,039 2,092 999,981 Accumulated depreciation and impairment losses Beginning of financial year Currency translation differences Depreciation charge for the year Disposals/Write-offs (Reversal of impairment charge) / Impairment charge for the year 125,684 (8) 6,957 – 526,599 10 45,450 (15,179) 16,080 6 1,421 (512) 1,082 1 504 (61) 669,445 9 54,332 (15,752) 9,901 – – 9,798 End of financial year 132,530 566,781 16,995 1,526 717,832 Carrying amount End of financial year Capital work-in-progress 104,302 – 173,237 3,377 4,044 36 566 – 282,149 3,413 Total 104,302 176,614 4,080 566 285,562 Capital work-in-progress Beginning of financial year Additions Transfer out to property, plant and equipment – – 10,097 15,186 51 165 – – 10,148 15,351 – (21,906) (180) – (22,086) End of financial year – 3,377 36 – 3,413 (103) Annual Report 2014 147 NOTES TO THE FINANCIAL STATEMENTS August 31, 2014 8. PROPERTY, PLANT AND EQUIPMENT (CONT’D) (b) 2013 Leasehold Plant Land and and Buildings Equipment S$’000 S$’000 Cost Beginning of financial year Currency translation differences Acquisition of a subsidiary [Note 20(b)] Additions Transfer in from capital work-in-progress Disposals/Write-offs 13,113 (43,410) 19,312 1 15 1,402 283 (451) 236,994 731,368 20,562 Accumulated depreciation and impairment losses Beginning of financial year Currency translation differences Depreciation charge for the year Disposals/Write-offs Write-back of impairment charge for the year 120,287 10 6,889 (3) 519,984 (12) 49,436 (42,809) 15,189 (7) 1,281 (383) End of financial year (1,499) Motor Vehicles S$’000 1,775 (3) 51 405 – (77) 2,151 644 (1) 511 (72) Total S$’000 1,008,878 397 184 6,813 18,752 (43,949) 991,075 656,104 (10) 58,117 (43,267) – – – 125,684 526,599 16,080 1,082 669,445 Carrying amount End of financial year Capital work-in-progress 111,310 – 204,769 10,097 4,482 51 1,069 – 321,630 10,148 Total 111,310 214,866 4,533 1,069 331,778 5,356 – 4,390 18,820 28 306 – – 9,774 19,126 (5,356) (13,113) (283) – (18,752) 10,097 51 – 10,148 End of financial year 5,356 (11) 756,667 (19) 118 4,899 End of financial year Capital work-in-progress Beginning of financial year Additions Transfer out to property, plant and equipment 231,124 418 – 107 Group Furniture and Fittings S$’000 – (1,499) During the financial year, the Group and the Company recognised an impairment charge of S$9.9 million on a press line arising from the optimisation of printing capacity. This amount was included within “Other operating expenses” in the income statement. In the previous financial year, the Group reassessed the recoverable amount of a property and accordingly recognised a reversal of an impairment of S$1.5 million made in prior years within “Other operating income” in the income statement. The recoverable amount of the asset was its fair value less cost to sell. The fair value of the property was based on an independent valuation, determined using the income method. 148 Singapore Press Holdings NOTES TO THE FINANCIAL STATEMENTS August 31, 2014 8. PROPERTY, PLANT AND EQUIPMENT (CONT’D) (c)2014 Plant and Equipment S$’000 Company Furniture and Motor Fittings Vehicles S$’000 S$’000 Total S$’000 Cost Beginning of financial year Additions Transfer in from capital work-in-progress Disposals/Write-offs 628,878 749 21,466 (14,490) 12,974 345 165 (38) 1,621 – – – 643,473 1,094 21,631 (14,528) End of financial year 636,603 13,446 1,621 651,670 Accumulated depreciation and impairment losses Beginning of financial year Depreciation charge for the year Disposals/Write-offs Impairment charge for the year 439,790 39,151 (14,021) 9,939 11,661 273 (38) – End of financial year 474,859 11,896 1,249 488,004 Carrying amount End of financial year Capital work-in-progress 161,744 2,652 1,550 – 372 – 163,666 2,652 Total 164,396 1,550 372 166,318 Capital work-in-progress Beginning of financial year Additions Transfer out to property, plant and equipment 9,619 14,499 (21,466) End of financial year 2,652 – 165 (165) – 897 352 – – 452,348 39,776 (14,059) 9,939 – – – 9,619 14,664 (21,631) – 2,652 Annual Report 2014 149 NOTES TO THE FINANCIAL STATEMENTS August 31, 2014 8. PROPERTY, PLANT AND EQUIPMENT (CONT’D) (d) 2013 Plant and Equipment S$’000 Company Furniture and Motor Fittings Vehicles S$’000 S$’000 Total S$’000 Cost Beginning of financial year Additions Transfer in from capital work-in-progress Disposals/Write-offs 650,192 1,547 13,018 (35,879) 12,955 134 66 (181) 1,620 6 – (5) 664,767 1,687 13,084 (36,065) End of financial year 628,878 12,974 1,621 643,473 Accumulated depreciation and impairment losses Beginning of financial year Depreciation charge for the year Disposals/Write-offs 432,619 43,038 (35,867) 11,552 290 (181) 525 377 (5) 444,696 43,705 (36,053) End of financial year 439,790 11,661 897 452,348 Carrying amount End of financial year Capital work-in-progress 189,088 9,619 1,313 – 724 – 191,125 9,619 Total 198,707 1,313 724 200,744 Capital work-in-progress Beginning of financial year Additions Transfer out to property, plant and equipment 4,167 18,470 (13,018) End of financial year 9,619 – 66 (66) – – – – 4,167 18,536 (13,084) – 9,619 150 Singapore Press Holdings NOTES TO THE FINANCIAL STATEMENTS August 31, 2014 9. INVESTMENT PROPERTIES Group 2014 S$'000 2013 S$'000 Investment properties Beginning of financial year Additions Fair value change 3,291,437 1,439 100,575 3,176,285 3,745 111,407 End of financial year 3,393,451 3,291,437 Investment property under development Beginning of financial year Additions Fair value change 381,128 77,371 8,501 340,862 40,266 – End of financial year 467,000 381,128 Total carrying amount 3,860,451 3,672,565 Carrying amount of - Freehold investment properties - Leasehold investment properties - Leasehold investment property under development 2,792,151 601,300 467,000 2,707,137 584,300 381,128 3,860,451 3,672,565 The fair value of the investment properties as at balance sheet date was stated based on independent professional valuations using valuation techniques and assumptions set out in Note 31(e). The Paragon on Orchard Road, with a carrying value of S$2,700 million (2013: S$2,612 million), is mortgaged to banks as security for the loan facility of S$975 million (2013: S$975 million) granted to SPH REIT [Note 7(a)]. The Seletar Mall, with a carrying amount of S$467.0 million (2013: S$381.1 million), is mortgaged as security for the loan facilities granted to Seletar Mall respectively by a bank [S$138 million (2013: S$138 million)] (first legal mortgage) [Note 7(b)] and the Company [S$230 million (2013: S$230 million)] (second legal mortgage) [Note 16(a)(i)]. The following amounts are recognised in the income statement: Group Rental income Direct operating expenses arising from investment properties that generated rental income 2014 S$'000 2013 S$'000 202,896 196,050 (48,161) (49,280) 151 Annual Report 2014 NOTES TO THE FINANCIAL STATEMENTS August 31, 2014 10. INVESTMENTS IN SUBSIDIARIES Company Equity investments at cost Allowance for impairment 2014 S$’000 2013 S$’000 412,305 (500) 412,305 (500) 411,805 411,805 The allowance for impairment was made to write down the carrying amount of investment in a subsidiary to its recoverable amount following a review of the subsidiary’s business. Details of significant subsidiaries are set out in Note 30. A list of other operating subsidiaries of the Group can be found on pages 192 and 193 of the annual report. Details of the acquisition and disposal of subsidiaries are set out in Notes 20(b) and 20(c). 11. INVESTMENTS IN ASSOCIATES Group Investments in associates Company 2014 S$’000 2013 S$’000 2014 S$’000 2013 S$’000 78,353 55,857 31,160 31,160 The summarised financial information of associates, not adjusted for the proportional ownership interest held by the Group, is as follows: Group 2014 S$'000 Assets Liabilities Revenues Net profit ɸ Excluded financial information of an associate which was classified as asset held for sale. A list of operating associates of the Group can be found on page 194 of the annual report. 235,028 64,146 342,210 11,897 2013ɸ S$'000 220,287 72,471 337,826 23,817 152 Singapore Press Holdings NOTES TO THE FINANCIAL STATEMENTS August 31, 2014 12. INVESTMENTS IN JOINTLY-CONTROLLED ENTITIES Group Investments in jointly-controlled entities 2014 S$'000 2013 S$'000 6,688 6,391 The Group’s investments in the jointly-controlled entities are equity accounted for in the consolidated balance sheet and income statement. During the financial year, the Group completed the partial divestment of its interest in 701Search Pte Ltd to Telenor Communications II AS. As a result, the Group recognised a gain of S$52.9 million on the divestment. The following amounts represent the Group’s effective share of 33.3% to 50% (2013: 50%) of the assets and liabilities and revenues and expenses of the jointly-controlled entities as at August 31, 2014 should proportionate consolidation be adopted. Group 2014 S$'000 2013 S$'000 16,998 848 8,990 1,270 17,846 10,260 11,126 174 5,560 – 11,300 5,560 Net assets 6,546 4,700 Revenues Expenses 4,026 (38,604) 3,960 (23,017) Net loss (34,578) (19,057) Assets - Current assets - Non-current assets Liabilities - Current liabilities - Non-current liabilities A list of operating jointly-controlled entities of the Group can be found on page 194 of the annual report. 13. LONG-TERM INVESTMENTS Long-term investments classified as available-for-sale financial assets comprise the following: Group Equity securities Investment funds Company 2014 S$’000 2013 S$’000 2014 S$’000 2013 S$’000 540,733 62,533 458,345 23,705 42,998 – 54,098 – 603,266 482,050 42,998 54,098 153 Annual Report 2014 NOTES TO THE FINANCIAL STATEMENTS August 31, 2014 14. INTANGIBLE ASSETS Group Arising from business combinations - Goodwill [Note 14(a)] - Technology, trademarks, licences, mastheads and others [Note 14(b)] 2013 S$'000 2014 S$'000 2013 S$'000 69,124 66,192 – – 103,868 104,981 – – 160 184 34,219 36,230 173,152 171,357 34,219 36,230 Acquired separately - Technology, trademarks and licences [Note 14(c)] (a) Company 2014 S$'000 Arising from business combinations - Goodwill Group 2014 S$'000 2013 S$'000 Cost Beginning of financial year Acquisition of a subsidiary [Note 20(b)] Acquisition of businesses by subsidiaries [Note 20(c)] Currency translation differences 80,783 – 3,294 (480) 58,638 21,283 1,290 (428) End of financial year 83,597 80,783 Accumulated impairment Beginning of financial year Impairment charge [Note 25] Currency translation differences 14,591 – (118) 2,775 11,816 – End of financial year 14,473 14,591 Net book value 69,124 66,192 In the previous financial year, the Group recognised an impairment charge of S$11.8 million within “Other operating expenses” in the income statement due to unfavourable market outlook for an overseas subsidiary. 154 Singapore Press Holdings NOTES TO THE FINANCIAL STATEMENTS August 31, 2014 14. INTANGIBLE ASSETS (CONT’D) (a) Arising from business combinations (cont’d) - Goodwill (cont’d) Impairment test for goodwill The carrying value of the Group’s goodwill arising from acquisitions was assessed for impairment during the financial year. Goodwill is allocated for impairment testing purposes to the individual entity or division, which is also the cash generating unit (“CGU”). Group 2014 2013 S$’000 S$’000 Pre-tax discount rate(1) 2014 2013 % % Terminal growth rate(2) 2014 2013 % % Carrying value of goodwill in: Singapore - Magazine - Online - Exhibition 21,566 26,686 8,194 19,687 26,686 8,194 11.5 15.1 12.2 11.5 15.1 12.2 2.3 2.3 2.0 2.3 2.3 2.0 Malaysia - Magazine 10,549 10,105 13.8 13.8 2.0 3.2 Multiple units with insignificant goodwill (1) 2,129 1,520 69,124 66,192 he discount rate used is based on Weighted Average Cost of Capital (WACC) where the cost of a company’s debt and equity capital are T weighted to reflect its capital structure. (2) The terminal growth rate has been determined based on long-term expected inflation rate for the respective country or industry in which the entity or division operates. The recoverable values of cash generating units including goodwill are determined based on value-in-use calculations. The value-in-use calculations apply a discounted cash flow model using cash flow projections based on financial budgets approved by the Board and management forecasts over a period of five years. Cash flows beyond the terminal year are extrapolated using the estimated terminal growth rates stated in the table above. Key assumptions used in the calculation of value-in-use are growth rates, operating margins and discount rates. Capital expenditure is also assumed to be insignificant. The management’s approach in determining the value assigned to each of the key assumptions includes comparing the key assumptions used to past actual performances (i.e. retrospective reviews) and other external sources of information such as Government statistics on growth, inflation and etc. As the process of evaluating goodwill impairment involves management judgement and prudent estimates of various factors including future cash flows as well as the cost of capital and long-term growth rates, the results can be highly sensitive to the assumptions used. Management believes that any reasonably possible change in the key assumptions would not cause the carrying amount of the CGU to exceed its recoverable amount as at August 31, 2014. Annual Report 2014 155 NOTES TO THE FINANCIAL STATEMENTS August 31, 2014 14. INTANGIBLE ASSETS (CONT’D) (b) Arising from business combinations (cont’d) - Technology, trademarks, licences, mastheads and others Technology S$'000 Group Trademarks, licences, mastheads and others S$'000 Total S$'000 Cost Beginning of financial year Acquisition of businesses by subsidiaries [Note 20(c)] Currency translation differences 6,506 – 180 129,447 8,378 (75) 135,953 8,378 105 End of financial year 6,686 137,750 144,436 Accumulated amortisation Beginning of financial year Amortisation charge [Note 25] Currency translation differences 3,114 709 6 27,858 8,881 – 30,972 9,590 6 End of financial year 3,829 36,739 40,568 Net book value 2,857 101,011 103,868 90,453 37,119 1,365 510 96,963 37,119 1,365 506 135,953 2014 2013 Cost Beginning of financial year Acquisition of a subsidiary [Note 20(b)] Acquisition of business by a subsidiary [Note 20(c)] Currency translation differences 6,510 – – (4) End of financial year 6,506 129,447 Accumulated amortisation Beginning of financial year Amortisation charge [Note 25] Currency translation differences Impairment charge [Note 25] 2,473 650 (9) – 16,653 7,419 – 3,786 19,126 8,069 (9) 3,786 End of financial year 3,114 27,858 30,972 Net book value 3,392 101,589 104,981 156 Singapore Press Holdings NOTES TO THE FINANCIAL STATEMENTS August 31, 2014 14. INTANGIBLE ASSETS (CONT’D) (c) Acquired separately - Technology, trademarks and licences Group 2014 S$'000 Cost Beginning of financial year Additions Written-off 204 – – End of financial year 204 2013 S$'000 2,004 4 (1,804) 204 Accumulated amortisation Beginning of financial year Amortisation charge [Note 25] Written-off 20 24 – End of financial year 44 20 160 184 Technology S$'000 Company Trademarks, licences, mastheads and others S$'000 Total S$'000 178 36,889 37,067 Accumulated amortisation Beginning of financial year Amortisation charge 25 59 812 1,952 837 2,011 End of financial year 84 2,764 2,848 Net book value 94 34,125 34,219 Net book value 1,804 20 (1,804) 2014 Cost Beginning and end of financial year 157 Annual Report 2014 NOTES TO THE FINANCIAL STATEMENTS August 31, 2014 14. INTANGIBLE ASSETS (CONT’D) (c) Acquired separately (cont’d) - Technology, trademarks and licences (cont’d) Technology S$'000 Company Trademarks, licences, mastheads and others S$'000 Total S$'000 Cost Beginning of financial year Acquisitions – 178 – 36,889 – 37,067 End of financial year 178 36,889 37,067 Accumulated amortisation Beginning of financial year Amortisation charge – 25 – 812 – 837 End of financial year 25 812 837 153 36,077 36,230 2014 S$’000 2013 S$’000 2014 S$’000 2013 S$’000 26,264 (2,317) 26,255 (2,365) 24,482 (2,267) 24,761 (2,272) 23,947 23,890 22,215 22,489 2013 Net book value 15.INVENTORIES Group Raw materials and consumable stores Allowance for write-down of inventories Company The cost of inventories recognised as an expense and included in materials, production and distribution costs in the income statement amounted to S$89.0 million (2013: S$103.3 million). During the financial year, the Group made an allowance for stock obsolescence amounting to S$18,000 (2013: S$0.9 million). 158 Singapore Press Holdings NOTES TO THE FINANCIAL STATEMENTS August 31, 2014 16. TRADE AND OTHER RECEIVABLES (a)Non-current Group Loans to subsidiaries [Note 16(a)(i)] Staff loans Sundry debtors Others Company 2014 S$’000 2013 S$’000 2014 S$’000 2013 S$’000 – 2,658 1,014 – – 1,884 1,038 65 229,672 2,508 58 – 229,465 1,661 105 – 3,672 2,987 232,238 231,231 (i) The loan to a subsidiary of S$230.0 million (2013: S$230.0 million) is non-trade, and secured, inter alia, by way of a second legal mortgage on the subsidiary’s investment property [Note 9]. The effective interest rate as at the balance sheet date on the outstanding term loan was 2.19% (2013: 2.19%) per annum. The repayment of the loan is subordinated to the subsidiary’s term loan with a financial institution [Note 7(b)], and upon discharge thereof, repayment is on the date falling six months from receipt of the Company’s demand. The amount of S$229.7 million (2013: S$229.5 million) represented the loan stated at amortised cost. (b)Current Group Trade receivables - Non-related parties - Less: Allowance for impairment of receivables – non-related parties Amount owing by - Subsidiaries [Note 16(b)(i)] - Associates [Note 16(b)(ii)] - Jointly-controlled entities [Note 16(b)(iii)] Loans to subsidiaries [Note 16(b)(iv)] Accrued interest Sundry debtors Prepayments Staff loans Company 2014 S$’000 2013 S$’000 2014 S$’000 2013 S$’000 135,518 138,655 96,236 99,528 (11,567) (10,385) (8,767) (7,503) 123,951 128,270 87,469 92,025 – 150 160 – 855 95 1,199,981 – 104 576,966 – 48 310 950 1,200,085 577,014 – – 272,078 272,078 1,463 11,684 6,003 1,032 985 9,802 6,846 921 145 1,485 4,181 935 21 2,139 4,956 790 144,443 147,774 1,566,378 949,023 159 Annual Report 2014 NOTES TO THE FINANCIAL STATEMENTS August 31, 2014 16. TRADE AND OTHER RECEIVABLES (CONT’D) (b) 17. Current (cont’d) (i) The amounts owing by subsidiaries, net of allowance for impairment of S$1.2 million (2013: S$1.9 million), are non-trade, unsecured, interest-free and repayable on demand. (ii) The amounts owing by associates are non-trade, unsecured, interest-free and repayable on demand. (iii) The amounts owing by jointly-controlled entities are non-trade, unsecured, interest-free and repayable on demand. (iv) The loans to subsidiaries, net of allowance for impairment of S$44.7 million (2013: S$44.7 million), are unsecured, interest-free and repayable on demand. SHORT-TERM INVESTMENTS Group Available-for-sale financial assets - Equity securities - Bonds - Investment funds Financial assets at fair value through profit or loss Designated at fair value on initial recognition - Bonds and notes - Preference shares Company 2014 S$’000 2013 S$’000 2014 S$’000 2013 S$’000 2,683 310,812 650,184 2,919 495,330 427,004 – 179,982 27,554 – 434,931 145,005 963,679 925,253 207,536 579,936 53,578 10,769 38,723 17,555 – – – – 64,347 56,278 – – 1,028,026 981,531 207,536 579,936 During the financial year, the Group recognised an impairment loss of S$7.3 million (2013: S$17.6 million) on certain available-for-sale financial assets within “Net income from investments” due to prolonged decline in value. 160 Singapore Press Holdings NOTES TO THE FINANCIAL STATEMENTS August 31, 2014 18. DERIVATIVE FINANCIAL INSTRUMENTS Analysed as: Group Contract Notional Amount S$’000 Assets S$’000 Liabilities S$’000 Non-current Cash flow hedge - Interest-rate swaps [Note 7(g)] 315,000 – 8,757 Current Cash flow hedge - Interest-rate swaps [Note 7(g)] 120,000 – 303 Derivatives that do not qualify as hedges - Currency forwards 354,433 899 353 899 656 Fair Value 2014 2013 Non-current Cash flow hedge - Interest-rate swaps [Note 7(g)] 400,000 – 1,352 Current Derivatives that do not qualify as hedges - Currency forwards 157,780 273 1,427 Company Contract Notional Amount S$’000 Assets S$’000 Liabilities S$’000 120,000 – 303 6,112 3 – 120,000 – 372 Fair Value 2014 Current Cash flow hedge - Interest-rate swaps [Note 7(g)] Derivatives that do not qualify as hedges - Currency forwards 2013 Non-current Cash flow hedge - Interest-rate swaps [Note 7(g)] 161 Annual Report 2014 NOTES TO THE FINANCIAL STATEMENTS August 31, 2014 19. ASSET CLASSIFIED AS HELD FOR SALE As at August 31, 2013, the Group had the intent to divest its entire interest in one of its associates classified under the “Others” segment. Accordingly, the investment was reclassified from Investments in associates to Asset classified as held for sale. The carrying value was reduced to the sale consideration amount of S$31.5 million and an impairment charge of S$4.3 million was included within “Other operating expenses” in the income statement. The sale was completed in the financial year ended August 31, 2014. 20. CASH AND CASH EQUIVALENTS (a) Cash and cash equivalents at the end of the financial year comprise the following: Group Cash held as fixed bank deposits Cash and bank balances (b) Company 2014 S$’000 2013 S$’000 2014 S$’000 2013 S$’000 271,376 171,561 331,795 133,603 161,856 27,415 61,916 13,446 442,937 465,398 189,271 75,362 Acquisition of a subsidiary Group At fair values 2013 S$'000 Identifiable assets and liabilities Property, plant and equipment [Note 8(b)] Intangible assets (excluding goodwill) [Note 14(b)] Investment in associate companies Current assets (including cash) Deferred income tax liabilities [Note 6(a)(i)] Current liabilities 184 37,119 274 4,420 (40) (3,240) Identifiable net assets acquired Goodwill on acquisition [Note 14(a)] 38,717 21,283 Total purchase consideration [Note 20(b)(i)] Less: Cash and cash equivalents Less: Consideration payable 60,000 (2,985) (7,200) Net cash outflow on acquisition of a subsidiary 49,815 162 Singapore Press Holdings NOTES TO THE FINANCIAL STATEMENTS August 31, 2014 20. CASH AND CASH EQUIVALENTS (CONT’D) (b) Acquisition of a subsidiary (cont’d) Note (b)(i) On April 15, 2013, the Group acquired the entire share capital of SGCM Pte. Ltd (“SGCM”), and from SGCM and Quotz Pte. Ltd. (“Quotz”) (a subsidiary of SGCM), certain trademarks and other intellectual property rights. SGCM holds 100% of the shares in Quotz, 45% of the shares in Conversion Hub Marketing Pte. Ltd. (“CHM”) and 30% shares in SCMC Pte. Ltd. (“SCMC”). SGCM owns and operates vehicle online classified sites, while Quotz is a car auction platform, CHM performs online marketing and SCMC is a service provider for car loans, insurances and settlement services. The total consideration for the acquisition was S$60.0 million. After accounting for cash acquired of S$3.0 million, the net cash outflow as of August 31, 2013 was S$49.8 million. The balance of S$7.2 million is payable upon meeting certain conditions. The Group had recognised intangible assets of S$58.4 million. The acquired business contributed revenue of S$3.0 million and net profit of S$1.1 million to the Group for the period April 15, 2013 to August 31, 2013. If the acquisition had occurred on September 1, 2012, Group operating revenue and net profit would have increased by another S$5.3 million and S$0.3 million respectively. (c) Acquisition of businesses by subsidiaries Group At fair values 2014 2013 S$'000 S$'000 Identifiable assets and liabilities Property, plant and equipment [Note 8(a)] Intangible assets (excluding goodwill) [Note 14(b)] Current assets Deferred income tax liabilities [Note 6(a)(i)] 21 8,378 48 – – 1,365 – (286) Identifiable net assets acquired Goodwill on acquisitions [Note 14(a)] 8,447 3,294 1,079 1,290 Total purchase consideration [Note 20(c)(i)] Less: Consideration payable 11,741 (1,210) 2,369 – Net cash outflow on acquisition of businesses by subsidiaries 10,531 2,369 Note (c)(i) 2014 Facon Exhibitions Sdn Bhd (“Facon”) On September 16, 2013, Sphere Exhibits Pte Ltd acquired the Exhibition Business and certain assets of Facon for a total consideration of S$7.0 million. The Exhibition Business comprises exhibitions marketed in Malaysia under the respective names, logos and marks “Facon Education fair”, “ICA” - an international exhibition on Instruments, Controls and Automation and “M. Lab” - an international exhibition on laboratory instruments and services. The Group has recognised intangible assets (including goodwill) of S$7.0 million, subject to completion of the purchase price allocation exercise. The acquired business contributed revenue of S$3.5 million and net profit of S$1.0 million for the period September 16, 2013 to August 31, 2014. There is no material effect to the Group operating revenue and net profit had the acquisition occurred on September 1, 2013. Annual Report 2014 163 NOTES TO THE FINANCIAL STATEMENTS August 31, 2014 20. CASH AND CASH EQUIVALENTS (CONT’D) (c) Acquisition of businesses by subsidiaries (cont’d) Note (c)(i) (cont’d) 2014 Write On Media Sdn Bhd (“WOM”) On December 2, 2013, Blu Inc Media Sdn Bhd acquired certain assets and contracts from WOM. WOM publishes HWM Malaysia, Home & Decor Malaysia, GameAxis Malaysia, Megaguide and Vibes. The total consideration for the acquisition was S$0.4 million. The net cash outflow as of August 31, 2014 was S$0.3 million with the balance of S$0.1 million payable upon meeting certain conditions. The Group has recognised goodwill of S$0.4 million, subject to completion of the purchase price allocation exercise. The acquired business contributed revenue of S$1.0 million and net loss of S$0.2 million to the Group for the period December 2, 2013 to August 31, 2014. If the acquisition had occurred on September 1, 2013, Group operating revenue and net profit for the year ended August 31, 2014 would have increased by another S$0.6 million and S$0.1 million respectively. Harenet Communications Sdn Bhd and Harenet Expo Sdn Bhd (collectively “Harenet”) On May 27, 2014, Sphere Exhibits Pte Ltd acquired the exhibitions and event business of Harenet. The acquired business comprised exhibitions marketed in Malaysia under the respective names, logos and marks “KL wedding expo”, “Parents & Kids Expo”, “International Baby Expo” and “Motherhood Expo”. The total consideration for the acquisition was S$2.0 million. The net cash outflow as at August 31, 2014 was S$1.0 million. The balance of S$1.0 million is payable upon meeting certain conditions. The Group has recognised intangible assets (including goodwill) of S$2.0 million, subject to completion of the purchase price allocation exercise. The acquired business contributed revenue of S$0.5 million and net profit of S$0.1 million to the Group for the period May 27, 2014 to August 31, 2014. If the acquisition had occurred on September 1, 2013, Group operating revenue and net profit for the year ended August 31, 2014 would have increased by another S$1.6 million and S$0.3 million respectively. White Wave Media Group Pte Ltd (“WWMG”) On August 31, 2014, SPH Magazines Pte Ltd acquired the business and assets of Luxury-Insider.com from WWMG. The total consideration for the acquisition was S$2.4 million and of which S$2.3 million was paid as at August 31, 2014. The Group has recognised intangible assets (including goodwill) of S$2.3 million, subject to completion of the purchase price allocation exercise. If the acquisition had occurred on September 1, 2013, Group operating revenue and net profit for the year ended August 31, 2014 would have increased by another S$0.7 million and S$0.3 million respectively. 164 Singapore Press Holdings NOTES TO THE FINANCIAL STATEMENTS August 31, 2014 20. CASH AND CASH EQUIVALENTS (CONT’D) (c) Acquisition of businesses by subsidiaries (cont’d) Note (c)(i) (cont’d) 2013 On January 8, 2013, Sphere Exhibits Pte Ltd acquired the Exhibition Business and assets of Expomal Malaysia and Singapore. The Exhibition Business comprises “Smart Kids Malaysia”, “Smart Kids Asia Singapore”, “Malaysian International Food and Beverage Trade Fair” and “Golden Bull”. The total consideration for the acquisition was S$2.4 million. The Group had recognised intangible assets of S$2.7 million. The acquired business contributed revenue of S$1.3 million and net profit of S$0.1 million to the Group for the period January 8, 2013 to August 31, 2013. If the acquisition had occurred on September 1, 2012, Group operating revenue and net profit would have increased by another S$0.6 million and S$0.1 million respectively. 21. TRADE AND OTHER PAYABLES (a)Non-current Group Deposits received 2014 S$’000 2013 S$’000 34,875 34,026 (b)Current Group Company 2014 S$’000 2013 S$’000 2014 S$’000 2013 S$’000 Trade payables – non-related parties 24,718 28,381 12,124 16,343 Amount owing to - Subsidiaries [Note 21(b)(i)] - Jointly-controlled entity [Note 21(b)(ii)] – 24,926 – 3,926 639,397 24,926 559,787 3,926 24,926 3,926 664,323 563,713 170,650 28,732 17,719 31,301 166,447 23,000 19,662 27,553 107,405 10,067 12,170 13,245 103,319 9,875 13,497 10,640 298,046 268,969 819,334 717,387 Accrued operating expenses Deposits received Sundry creditors Collections in advance (i) The amounts owing to subsidiaries are non-trade, unsecured and repayable on demand. Except for amounts owing to certain subsidiaries of S$9.8 million (2013: S$17.0 million) with effective interest rates of 0.42% (2013: 0.25% to 0.34%) per annum as at the balance sheet date, the amounts owing to other subsidiaries are interest-free. (ii) The amount owing to a jointly-controlled entity is non-trade, unsecured, repayable on demand and interest-bearing. The effective interest rates range from 0.18% to 0.29% (2013: 0.24% to 0.28%) per annum as at the balance sheet date. 165 Annual Report 2014 NOTES TO THE FINANCIAL STATEMENTS August 31, 2014 22. CAPITAL AND OTHER COMMITMENTS (a) Commitments for capital expenditure and investments Group Authorised and contracted for - Property, plant and equipment - Investment properties - Long-term/Short-term investments Company 2014 S$’000 2013 S$’000 2014 S$’000 2013 S$’000 5,007 39,262 9,272 6,626 93,760 34,578 4,832 – – 6,626 – – 53,541 134,964 4,832 6,626 (b) Operating lease commitments – where the Group and/or Company is a lessee The future minimum lease payables under non-cancellable operating leases contracted for at the balance sheet date but not recognised as liabilities, are as follows: Group Within 1 year Between 1 - 5 years After 5 years Company 2014 S$’000 2013 S$’000 2014 S$’000 2013 S$’000 9,064 21,217 134,789 8,480 24,095 135,802 565 473 – 459 37 – 165,070 168,377 1,038 496 The Group and Company lease various commercial/residential space and plant and machinery under noncancellable operating lease agreements with varying terms and renewal rights. The operating lease rental expense of S$13.6 million (2013: S$12.0 million) was recognised in the income statement during the financial year. (c) Operating lease commitments – where the Group is a lessor The future minimum lease receivables under non-cancellable operating leases contracted for at the balance sheet date but not recognised as receivables, are as follows: Group Within 1 year Between 1 - 5 years After 5 years 2014 S$’000 2013 S$’000 206,243 351,587 4,663 185,352 239,923 – 562,493 425,275 The Group leases to third parties various commercial/residential space under non-cancellable operating lease agreements with varying terms, escalation clauses and renewal rights. 166 Singapore Press Holdings NOTES TO THE FINANCIAL STATEMENTS August 31, 2014 23. OPERATING REVENUE Group Newspaper and Magazine Sale of services – Advertisements Sale of goods – Circulation Others Property Rental and rental-related services Others Sale of services – Advertisements Sale of services – Multimedia and other services 24. 2014 S$’000 2013 S$’000 705,919 186,035 39,732 757,184 195,688 38,348 931,686 991,220 204,985 198,139 30,140 48,373 16,716 33,377 78,513 50,093 1,215,184 1,239,452 STAFF COSTS Group Salaries, bonuses and other costs Employers’ contribution to defined contribution plans Share-based compensation expense [Note 5(b)] 2014 S$’000 2013 S$’000 330,678 38,865 4,976 308,433 34,444 6,766 374,519 349,643 167 Annual Report 2014 NOTES TO THE FINANCIAL STATEMENTS August 31, 2014 25. OTHER OPERATING EXPENSES Group 2014 S$’000 2013 S$’000 Included in other operating expenses are: Audit fees - Company's auditors - Other auditors Non-audit fees# - Company’s auditors Net foreign exchange differences from operations Allowance for impairment of trade receivables [Note 31(b)(ii)] Bad debts recovery Impairment of property, plant and equipment Net loss/(profit) on disposal of property, plant and equipment Impairment of goodwill [Note 14(a)] Impairment of intangible assets [Note 14(b)] Amortisation of intangible assets [Notes 14(b) and 14(c)] Allowance for impairment of associates Write-back of impairment of loan to an associate # + 26. 858 49 725+ 33 267 462 3,761 (300) 9,939 618 – – 9,614 – (388) 168 1,211 1,702 (306) – (395) 11,816 3,786 8,089 4,582 – Non-audit fees are mainly for services relating to non-statutory audit/review assignments. Excluded fees of S$390,000 paid to the Company’s auditors as reporting auditors for the listing of SPH REIT, which were capitalised as listing expenses in the capital reserve. FINANCE COSTS Group 2014 S$’000 2013 S$’000 Interest expense - Bank loans - Fixed rate notes - Loans from non-controlling interests Cash flow hedges, reclassified from hedging reserve * 11,517 16,860 – 6,689 5,936 16,860 4,579 4,550 35,066 31,925 * In relation to interest rate swap arrangements in Note 7(g). 168 Singapore Press Holdings NOTES TO THE FINANCIAL STATEMENTS August 31, 2014 27. NET INCOME FROM INVESTMENTS Group Available-for-sale financial assets Interest income Dividend income Net foreign exchange differences Transfer from fair value reserve on disposal of investments [Note 5(d)] Impairment of investments [Note 5(d) and 17] Financial assets at fair value through profit or loss Net fair value changes on investments - Designated upon initial recognition Net fair value changes on derivative financial instruments Deposits with financial institutions Interest income Net foreign exchange differences 2014 S$’000 2013 S$’000 3,025 33,284 235 11,865 (7,282) 2,699 25,213 (579) 3,870 (17,556) 41,127 13,647 2,406 3,141 694 (1,365) 5,547 (671) 2,573 (1,032) 1,006 (11) 1,541 995 48,215 13,971 28.DIVIDENDS Group and Company 2014 2013 S$’000 S$’000 Tax-exempt (one-tier) dividends paid: - Final dividend of 8 cents per share in respect of previous financial year (2013: 9 cents per share) 129,230 145,107 - Special final dividend of 7 cents per share in respect of previous financial year (2013: 8 cents per share) 113,077 128,984 - Interim dividend of 7 cents per share (2013: 7 cents per share) 113,137 113,124 – 291,015 355,444 678,230 - Special dividend of 18 cents per share in previous financial year (a) The Directors have proposed a final dividend of 8 cents per share and a special final dividend of 6 cents per share for the financial year, amounting to a total of S$226.3 million. These financial statements do not reflect these proposed dividends, which will be accounted for in shareholders’ interests as an appropriation of retained profit in the financial year ending August 31, 2015 when they are approved at the next annual general meeting. (b) The special dividend of S$291.0 million in the previous financial year was paid pursuant to the establishment of SPH REIT. 169 Annual Report 2014 NOTES TO THE FINANCIAL STATEMENTS August 31, 2014 29. EARNINGS PER SHARE Group 2014 Profit after taxation attributable to shareholders of the Company 2013 Basic S$’000 Diluted S$’000 Basic S$’000 Diluted S$’000 404,286 404,286 430,954 430,954 Number of Shares ’000 ’000 Weighted average number of shares Adjustment for assumed conversion of - share options - performance shares Weighted average number of shares used to compute earnings per share Earnings per share (S$) 30. Number of Shares ’000 ’000 1,615,858 1,615,858 1,614,035 1,614,035 – – – 8,004 – – 92 8,516 1,615,858 1,623,862 1,614,035 1,622,643 Basic Diluted Basic Diluted 0.25 0.25 0.27 0.27 SIGNIFICANT SUBSIDIARIES OF THE GROUP Name of Subsidiaries Principal Activities Country of Incorporation Effective % of Equity held by the Group 2014 % 2013 % Times Properties Private Limited Letting properties and provision of property management services Singapore 100 100 Orchard 290 Ltd Holding investments and management of shopping centres and other commercial properties Holding investments and properties Singapore 100 100 Singapore 100 100 Singapore Newspaper Services Private Limited Holding investments and properties Singapore 100 100 Lianhe Investments Pte. Ltd. Holding investments for trading purposes Singapore 100 100 SPH MultiMedia Private Limited Holding investments Holding investments Holding property investments and management of shopping centre Singapore 100 100 Singapore 100 100 Singapore 70 70 Holding property investments Singapore 70 70 Singapore News and Publications Limited SPH AsiaOne Ltd The Seletar Mall Pte. Ltd. SPH REIT Note: (i) The above companies are audited by KPMG LLP, Singapore. (ii) A list of other operating subsidiaries of the Group can be found on pages 192 and 193 of the annual report. 170 Singapore Press Holdings NOTES TO THE FINANCIAL STATEMENTS August 31, 2014 31. FINANCIAL RISK MANAGEMENT The Group’s activities expose it to a variety of financial risks, particularly market risk (including currency risk, price risk and interest rate risk), credit risk and liquidity risk. Where appropriate, the Group’s risk management policies seek to minimise potential adverse effects of these risks on the financial performance of the Group. Matters pertaining to risk management strategies and execution require the decision and approval of the Board of Directors (“Board”). Financial risk management is mainly carried out by a central treasury department (“Treasury & Investment”) in accordance with policies approved by the Board. Treasury & Investment analyses its investment portfolio and works closely with business units to identify, evaluate and hedge financial risks where appropriate. Guidelines for authority levels and exposure limits are in place to prevent unauthorised transactions. The Board is regularly updated on the Group’s financial investments and hedging activities. The policies for managing these risks are summarised below. (a) Market risk (i) Currency risk The currency risk of the Group arises mainly from its operational purchases of raw materials and consumable stores and capital expenditure denominated in currencies other than the functional currency. In addition, currency risk also arises from the Group’s foreign currency investments and from costs incurred by its overseas news bureaus. The Group also has investments in foreign subsidiaries, associates and jointly-controlled entities, whose net assets are exposed to currency translation risk. Where appropriate, the Group enters into foreign exchange forward contracts and cross currency swaps to hedge against its currency risk resulting from anticipated sale and purchase transactions in foreign currencies, its foreign currency denominated investments and net assets of its foreign subsidiaries, associates and jointly-controlled entities. Annual Report 2014 171 NOTES TO THE FINANCIAL STATEMENTS August 31, 2014 31. FINANCIAL RISK MANAGEMENT (CONT’D) (a) Market risk (cont’d) (i) Currency risk (cont’d) The Group’s currency exposure on its monetary financial assets and liabilities based on the information provided to key management is as follows: 2014 SGD USD Others Total S$’000 S$’000 S$’000 S$’000 Financial assets Trade and other receivables Short-term investments Cash and cash equivalents 125,956 364,390 427,665 1,274 – 4,964 11,733 – 10,308 138,963 364,390 442,937 918,011 6,238 22,041 946,290 Financial liabilities Trade and other payables Borrowings (289,999) (1,802,472) (3,063) – (8,558) (3,004) (301,620) (1,805,476) (2,092,471) (3,063) (11,562) (2,107,096) Net financial (liabilities)/assets (1,174,460) 3,175 10,479 (1,160,806) Less: Net financial liabilities/(assets) denominated in the respective entities’ functional currencies 1,174,460 – (9,234) 1,165,226 Less: Firm commitments in foreign currencies – (693) (272) (965) Less: Currency forwards – (343,407) (11,026) (354,433) Currency exposure – (340,925) (10,053) (350,978) 172 Singapore Press Holdings NOTES TO THE FINANCIAL STATEMENTS August 31, 2014 31. FINANCIAL RISK MANAGEMENT (CONT’D) (a) Market risk (cont’d) (i) Currency risk (cont’d) 2013 Financial assets Trade and other receivables Short-term investments Cash and cash equivalents Financial liabilities Trade and other payables Borrowings Net financial (liabilities)/assets Less: Net financial liabilities/(assets) denominated in the respective entities’ functional currencies SGD S$’000 USD S$’000 Others S$’000 Total S$’000 129,825 534,053 456,957 1,181 – 1,954 11,051 – 6,487 142,057 534,053 465,398 1,120,835 3,135 17,538 1,141,508 (259,045) (1,737,644) (6,789) – (9,608) (3,299) (275,442) (1,740,943) (1,996,689) (6,789) (12,907) (2,016,385) (875,854) (3,654) 875,854 – 4,631 (874,877) (4,014) 871,840 Less: Firm commitments in foreign currencies – (1,241) (689) (1,930) Less: Currency forwards – (130,222) (27,558) (157,780) Currency exposure – (135,117) (27,630) (162,747) Annual Report 2014 173 NOTES TO THE FINANCIAL STATEMENTS August 31, 2014 31. FINANCIAL RISK MANAGEMENT (CONT’D) (a) Market risk (cont’d) (i) Currency risk (cont’d) The Company’s currency exposure based on the information provided to key management is as follows: 2014 Financial assets Trade and other receivables Short-term investments Cash and cash equivalents Financial liabilities Trade and other payables Borrowings Net financial assets Less: Net financial assets denominated in the Company’s functional currencies SGD S$’000 USD S$’000 Others S$’000 Total S$’000 1,793,366 179,982 185,755 769 – 3,188 300 – 328 1,794,435 179,982 189,271 2,159,103 3,957 628 2,163,688 (802,200) (829,482) (3,518) – (371) – (806,089) (829,482) (1,631,682) (3,518) (371) (1,635,571) 527,421 (527,421) 439 257 – – Less: Firm commitments in foreign currencies – (693) Less: Currency forwards – (6,112) Currency exposure – (6,366) (272) – (15) 528,117 (527,421) (965) (6,112) (6,381) 174 Singapore Press Holdings NOTES TO THE FINANCIAL STATEMENTS August 31, 2014 31. FINANCIAL RISK MANAGEMENT (CONT’D) (a) Market risk (cont’d) (i) Currency risk (cont’d) 2013 Financial assets Trade and other receivables Short-term investments Cash and cash equivalents Financial liabilities Trade and other payables Borrowings Net financial assets/(liabilities) Less: Net financial assets denominated in the Company’s functional currencies SGD S$’000 USD S$’000 Others S$’000 Total S$’000 1,174,409 434,931 74,120 589 – 857 300 – 385 1,175,298 434,931 75,362 1,683,460 1,446 685 1,685,591 (699,911) (828,921) (6,165) – (671) – (706,747) (828,921) (1,528,832) (6,165) (671) (1,535,668) (4,719) 14 154,628 (154,628) – – 149,923 (154,628) Less: Firm commitments in foreign currencies – (1,241) (689) (1,930) Currency exposure – (5,960) (675) (6,635) Annual Report 2014 175 NOTES TO THE FINANCIAL STATEMENTS August 31, 2014 31. FINANCIAL RISK MANAGEMENT (CONT’D) (a) Market risk (cont’d) (i) Currency risk (cont’d) If the USD change against the SGD by 5% (2013: 5%) with all other variables including tax rate being held constant, the effects arising from the currency exposure will be as follows: 2014 Profit after tax S$'000 2013 Other comprehensive income S$'000 Profit after tax S$'000 Other comprehensive income S$'000 Increase/(Decrease) Group USD against SGD - strengthened - weakened (14,148) 14,148 – – (5,607) 5,607 – – (264) 264 – – (247) 247 – – Company USD against SGD - strengthened - weakened (ii) Price risk The Group is exposed to equity securities price risk arising from its equity investments which are classified either as available-for-sale or at fair value through profit or loss. To manage the price risk arising from its investments in equity securities, the Group diversifies its portfolio across different markets and industries, where appropriate. If prices for equity securities changed by 20% (2013: 20%) with all other variables including tax rate being held constant, the effects on profit after tax and other comprehensive income arising from the change in valuation of the equity securities will be as follows: 2014 2013 Other Other Profit comprehensive Profit comprehensive after tax income after tax income S$'000 S$'000 S$'000 S$'000 Increase/(Decrease) Group Long-term and Short-term investments - increased by - decreased by 1,788 (1,788) 222,626 (222,626) 2,914 (2,914) 143,043 (143,043) Company Long-term investments - increased by - decreased by – – 8,600 (8,600) – – 10,820 (10,820) 176 Singapore Press Holdings NOTES TO THE FINANCIAL STATEMENTS August 31, 2014 31. FINANCIAL RISK MANAGEMENT (CONT’D) (a) Market risk (cont’d) (iii) Interest rate risk Cash flow interest rate risk is the risk that the future cash flows of a financial instrument will fluctuate because of changes in market interest rates. Fair value interest rate risk is the risk that the fair value of a financial instrument will fluctuate due to changes in market interest rates. The Group has cash balances placed with reputable banks and financial institutions, and investments in bonds and government-related securities, which generate interest income for the Group. The Group manages its interest rate risks by placing such balances on varying maturities and interest rate terms. The Group’s debt comprises mainly bank borrowings and fixed rate notes taken up by the Company and its subsidiaries to finance its operations. Where appropriate, the Group seeks to minimise its cash flow interest rate risk exposure by entering into interest rate swap contract to swap floating interest rate for fixed interest rate over the duration of its borrowings. The Group’s and the Company’s borrowings at variable rates on which effective hedges have not been entered into are denominated mainly in SGD. Movements in interest rates will therefore have an impact on the Group. A change of 0.5% point (2013: 0.5% point) in interest rate at the reporting date would affect profit after tax and other comprehensive income by the amounts shown below, assuming that all other variables remain constant. 2014 Profit after tax S$'000 2013 Other comprehensive income S$'000 Profit after tax S$'000 Other comprehensive income S$'000 Increase/(Decrease) Group Borrowings - increased by - decreased by Short-term investments - increased by - decreased by (2,772) 2,772 (346) 346 – – (1,030) 1,030 (2,689) 2,689 (418) 418 – – (584) 584 Company Borrowings - increased by - decreased by (456) 456 – – (457) 457 – – 177 Annual Report 2014 NOTES TO THE FINANCIAL STATEMENTS August 31, 2014 31. FINANCIAL RISK MANAGEMENT (CONT’D) (b) Credit risk Credit risk refers to the risk that a counterparty will default on its contractual obligations, thereby resulting in financial loss to the Group. For trade receivables, the Group manages its credit risk through the application of credit approvals, credit limits and monitoring procedures. Where appropriate, the Group obtains collateral in the form of deposits, bankers’/insurance guarantees from its customers, and imposes cash terms and/or advance payments from customers of lower credit standing. For other financial assets, the Group adopts the policy of dealing only with high credit quality counterparties. As at the balance sheet date, the Group has no significant concentration of credit risks. The maximum exposure to credit risk for each class of financial instruments is the carrying amount of that class of financial instruments presented on the balance sheet which comprise mainly trade receivables, investments in bonds and notes, and cash balances placed with banks. In addition, the Company is the primary obligor for an unsecured composite advance facility which could be utilised by the Company and its designated subsidiaries. The facility was not utilised as at August 31, 2014. In the previous financial year, S$0.8 million was utilised by a subsidiary. The credit risk for trade receivables based on the information provided to key management is as follows: Group By types of customers Advertisement Circulation Multimedia Broadcasting Rental Others Company 2014 S$’000 2013 S$’000 2014 S$’000 2013 S$’000 87,269 11,699 4,293 5,018 2,121 13,551 92,504 10,975 3,529 2,822 3,440 15,000 70,191 10,261 1,904 – – 5,113 74,079 9,426 1,384 – – 7,136 123,951 128,270 87,469 92,025 As at August 31, 2014, 40% - 60% (2013: 40% - 60%) of the trade receivables were backed by bankers’/ insurance guarantees and/or deposits from customers. (i) Financial assets that are neither past due nor impaired Bank deposits and investments in bonds are neither past due nor impaired. Bank deposits are placed with reputable banks and financial institutions. The Group’s bond portfolio is primarily invested in investment grade securities. Trade receivables that are neither past due nor impaired are substantially due from companies with a good collection track record with the Group. 178 Singapore Press Holdings NOTES TO THE FINANCIAL STATEMENTS August 31, 2014 31. FINANCIAL RISK MANAGEMENT (CONT’D) (b) Credit risk (cont’d) (ii) Financial assets that are past due and/or impaired The age analysis of trade receivables past due but not impaired is as follows: Group Company 2014 S$’000 2013 S$’000 2014 S$’000 2013 S$’000 Past due 1 to 30 days Past due 31 to 60 days Past due 61 to 90 days Past due over 90 days 23,735 20,845 10,936 11,554 8,811 4,018 4,223 7,884 3,175 3,644 4,030 1,129 2,032 2,204 862 802 40,787 35,548 18,127 15,422 The carrying amount of trade receivables individually determined to be impaired and the movements in the related allowance for impairment are as follows: Group Gross amount Less: Allowance for impairment 2013 S$’000 2014 S$’000 2013 S$’000 11,567 (11,567) 10,385 (10,385) 8,767 (8,767) 7,503 (7,503) – Company 2014 S$’000 – – – Beginning of financial year Acquisition of a subsidiary Allowance made [Note 25] Allowance utilised Currency translation difference 10,385 – 3,761 (2,552) (27) 10,417 50 1,702 (1,843) 59 7,503 – 3,225 (1,961) – 7,439 – 857 (793) – End of financial year 11,567 10,385 8,767 7,503 The basis of determining impairment is set out in the accounting policy Note 2(i)(v). Annual Report 2014 179 NOTES TO THE FINANCIAL STATEMENTS August 31, 2014 31. FINANCIAL RISK MANAGEMENT (CONT’D) (c) Liquidity risk Liquidity risk refers to the risk that the Group will encounter difficulty in meeting obligations associated with financial liabilities. To manage liquidity risk, the Group monitors and maintains a level of cash and cash equivalents to finance the Group’s operations and mitigate the effects of fluctuation in cash flows. The table below analyses the maturity profile of the Group’s and the Company’s financial liabilities (including derivative financial liabilities) based on contractual undiscounted cash flows. Less than 1 year S$'000 Between 1 and 2 years S$'000 Between 2 and 5 years S$'000 Over 5 years S$'000 Group At August 31, 2014 Net-settled interest rate swap Gross-settled currency forwards - Receipts - Payments Trade and other payables Borrowings (6,390) (4,211) (28) 1,487 354,428 (353,879) (266,745) (949,724) – – (13,210) (298,407) – – (21,167) (322,708) – – (498) (303,724) (1,222,310) (315,828) (343,903) (302,735) (6,079) (4,412) 156,602 (157,780) (241,416) (34,353) – – (14,703) (623,869) – – (19,323) (880,713) – – – (308,586) (283,026) (642,984) (898,336) (299,827) At August 31, 2013 Net-settled interest rate swap Gross-settled currency forwards - Receipts - Payments Trade and other payables Borrowings 1,700 8,759 Company At August 31, 2014 Net-settled interest rate swap Gross-settled currency forwards - Receipts - Payments Trade and other payables Borrowings (330) – – – 6,115 (6,112) (806,089) (839,987) – – – – – – – – – – – – (1,646,403) – – – At August 31, 2013 Net-settled interest rate swap Trade and other payables Borrowings (456) (706,747) (19,187) 15 – (610,757) – – (231,460) – – – (726,390) (610,742) (231,460) – 180 Singapore Press Holdings NOTES TO THE FINANCIAL STATEMENTS August 31, 2014 31. FINANCIAL RISK MANAGEMENT (CONT’D) (d) Capital management The Group’s objectives for managing capital are to safeguard the Group’s ability to continue as a going concern and to maintain an optimal capital structure so as to maximise shareholder value. In order to maintain or achieve an optimal capital structure, the Group may adjust the amount of dividend payment, return capital to shareholders, issue new shares, buy back issued shares, obtain new borrowings or sell assets to reduce borrowings. The total capital of the Group and the Company as at the balance sheet dates is represented by the respective “Shareholders’ interests” as presented on the balance sheets. Management uses the “Return on Shareholders’ Funds” as a measure of efficiency in managing capital. The “Return on Shareholders’ Funds” is calculated as profit attributable to shareholders divided by shareholders’ interests. The “Return on Shareholders’ Funds” was 11.0% per annum for the current financial year ended August 31, 2014 (2013: 12.2% per annum) and is in line with the Group’s objectives. The “Return on Shareholders’ Funds” for the last 5 years was between 11.0% and 22.4%. (e) Fair value measurements The following table presents assets and liabilities measured at fair value and classified by level of the following fair value measurement hierarchy: (i) (ii) (iii) Quoted prices (unadjusted) in active markets for identical assets or liabilities (Level 1); Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices) (Level 2); and Inputs for the asset and liability that are not based on observable market data (unobservable inputs) (Level 3). Group Level 1 S$'000 Level 2 S$'000 Level 3 S$'000 Total S$'000 2014 Assets Investment properties Financial assets at fair value through profit or loss Available-for-sale financial assets Derivative financial instruments – – 3,860,451 3,860,451 64,347 1,103,596 – – 377,702 899 – 85,647 – 64,347 1,566,945 899 Total assets 1,167,943 378,601 3,946,098 5,492,642 Liabilities Derivative financial instruments – (9,413) – (9,413) Annual Report 2014 181 NOTES TO THE FINANCIAL STATEMENTS August 31, 2014 31. FINANCIAL RISK MANAGEMENT (CONT’D) (e) Fair value measurements (cont’d) Group Level 1 S$'000 Level 2 S$'000 Level 3 S$'000 Total S$'000 2013 Assets Investment properties Financial assets at fair value through profit or loss Available-for-sale financial assets Derivative financial instruments – – 3,672,565 3,672,565 56,278 1,282,617 – – 66,739 273 – 57,947 – 56,278 1,407,303 273 Total assets 1,338,895 67,012 3,730,512 5,136,419 Liabilities Derivative financial instruments – (2,779) – (2,779) Level 1 S$'000 Level 2 S$'000 Company Level 3 S$'000 Total S$'000 250,534 – – 3 – – 250,534 3 250,534 3 – 250,537 2014 Assets Available-for-sale financial assets Derivative financial instruments Liabilities Derivative financial instruments – (303) – (303) 2013 Assets Available-for-sale financial assets 634,034 – – 634,034 Liabilities Derivative financial instruments – (372) – (372) The assessment of the fair value of unquoted financial instruments is performed on a quarterly basis by the Group’s finance department. The determination of the fair value of investment properties is performed on an annual basis by external independent property valuers having appropriate recognised professional qualifications and experience in the category of property being valued. Management reviews the appropriateness of the valuation methodologies and assumptions adopted and addresses any significant issues that may arise. 182 Singapore Press Holdings NOTES TO THE FINANCIAL STATEMENTS August 31, 2014 31. FINANCIAL RISK MANAGEMENT (CONT’D) (e) Fair value measurements (cont’d) The fair value of financial instruments traded in active markets is based on quoted market prices at the balance sheet date. The quoted market price used for financial assets held by the Group is the current bid price. These instruments are included in Level 1. The fair value of financial instruments that are not traded in an active market is determined from information provided by financial institutions and issuers using valuation techniques with observable inputs that are based on market information existing at each balance sheet date. These financial instruments are included in Level 2. Where a valuation technique for financial instruments is based on significant unobservable inputs, such instruments are included in Level 3. The fair value of investment properties and available-for-sale financial assets included in Level 3 is determined as follows: Description Inter-relationship between significant unobservable inputs and fair value measurement Valuation Technique(s) Significant Unobservable Inputs Capitalisation approach - Capitalisation rate: 3.8% to 5.0% The estimated fair value varies inversely with the capitalisation rate. Discounted cashflow approach - Discount rate: 6.5% to 7.5% The estimated fair value varies inversely with the discount rate. Comparable sales method - Comparable sales prices: S$1,100psf to S$2,000psf The estimated fair value varies with comparable sales prices. Capitalisation approach - Capitalisation rate: 5.0% The estimated fair value varies inversely with the capitalisation rate. Investment properties Completed - Retail, residential and commercial Under construction - Retail Available-for-sale financial assets Investment funds Net asset value Net asset value* N.A. Equities Net tangible assets Net tangible assets** N.A. * Fair value of unquoted investment funds is determined by reference to the underlying asset value of the investee companies, which comprise mainly investment properties at fair value. ** Fair value of unquoted equities is determined by reference to the underlying net tangible assets of the investee companies. N.A. Not applicable Annual Report 2014 183 NOTES TO THE FINANCIAL STATEMENTS August 31, 2014 31. FINANCIAL RISK MANAGEMENT (CONT’D) (e) Fair value measurements (cont’d) Movements in Level 3 assets are as follows: Group Investment properties S$’000 Available-for-sale financial assets Investment funds Equities S$'000 S$'000 2014 At September 1, 2013 Purchases Disposals Gains and losses recognised in income statement Gains and losses recognised in other comprehensive income Transferred out to Level 2 3,672,565 78,810 – 109,076 – – 52,575 40,020 (4,519) (6,353) 3,191 – 5,372 695 – (713) 113 (4,734) At August 31, 2014 3,860,451 84,914 At September 1, 2012 Purchases Disposals Gains and losses recognised in income statement Gains and losses recognised in other comprehensive income 3,517,147 44,011 – 111,407 – 45,395 12,890 (1,721) (5,369) 1,380 4,251 473 – – 648 At August 31, 2013 3,672,565 52,575 5,372 733 2013 During the financial year, an available-for-sale financial asset was transferred from Level 3 to Level 2 as observable market data becomes available. (f) Financial assets and liabilities not measured at fair value but for which fair values are disclosed Group Level 1 S$'000 Level 2 S$'000 Level 3 S$'000 Total S$'000 604,992 35,994 – 640,986 Level 1 S$'000 Level 2 S$'000 Company Level 3 S$'000 Total S$'000 604,992 – – 604,992 2014 Liabilities Borrowings 2014 Liabilities Borrowings 184 Singapore Press Holdings NOTES TO THE FINANCIAL STATEMENTS August 31, 2014 31. FINANCIAL RISK MANAGEMENT (CONT’D) (g) Fair Value The basis for fair value measurement of financial assets and liabilities is set out in Notes 7(h) and 31(e). The fair values of other financial assets and liabilities approximate their carrying amounts. (h) Financial instruments by category 2014 Group Loans and receivables S$'000 Financial assets at fair value through profit or loss S$'000 Availablefor-sale financial assets S$'000 Total S$'000 138,963 – – – 442,937 – – 64,347 899 – – 603,266 963,679 – – 138,963 603,266 1,028,026 899 442,937 581,900 65,246 1,566,945 2,214,091 Derivatives used for hedging S$'000 Other financial liabilities at amortised cost S$'000 Total S$'000 Assets as per balance sheet Trade and other receivables excluding non-financial instruments Long-term investments Short-term investments Derivative financial instruments Bank balances and fixed deposits Financial liabilities at fair value through profit or loss S$'000 Liabilities as per balance sheet Trade and other payables excluding non-financial instruments Borrowings Derivative financial instruments – – (353) – – (9,060) (301,620) (1,805,476) – (301,620) (1,805,476) (9,413) (353) (9,060) (2,107,096) (2,116,509) Annual Report 2014 185 NOTES TO THE FINANCIAL STATEMENTS August 31, 2014 31. FINANCIAL RISK MANAGEMENT (CONT’D) (h) Financial instruments by category (cont’d) 2013 Group Loans and receivables S$'000 Financial assets at fair value through profit or loss S$'000 Availablefor-sale financial assets S$'000 Total S$'000 142,057 – – – 465,398 – – 56,278 273 – – 482,050 925,253 – – 142,057 482,050 981,531 273 465,398 607,455 56,551 1,407,303 2,071,309 Derivatives used for hedging S$'000 Other financial liabilities at amortised cost S$'000 Total S$'000 Assets as per balance sheet Trade and other receivables excluding non-financial instruments Long-term investments Short-term investments Derivative financial instruments Bank balances and fixed deposits Financial liabilities at fair value through profit or loss S$'000 Liabilities as per balance sheet Trade and other payables excluding non-financial instruments Borrowings Derivative financial instruments – – (1,427) – – (1,352) (275,442) (1,740,943) – (275,442) (1,740,943) (2,779) (1,427) (1,352) (2,016,385) (2,019,164) 186 Singapore Press Holdings NOTES TO THE FINANCIAL STATEMENTS August 31, 2014 31. FINANCIAL RISK MANAGEMENT (CONT’D) (h) Financial instruments by category (cont’d) 2014 Loans and receivables S$'000 Company Financial assets at fair value Availablethrough for-sale profit financial or loss assets S$'000 S$'000 Total S$'000 Assets as per balance sheet Trade and other receivables excluding non-financial instruments Long-term investments Short-term investments Derivatives financial instruments Bank balances and fixed deposits 1,794,435 – – – 189,271 – – – 3 – – 42,998 207,536 – – 1,794,435 42,998 207,536 3 189,271 1,983,706 3 250,534 2,234,243 Derivatives used for hedging S$'000 Other financial liabilities at amortised cost S$'000 Total S$'000 Liabilities as per balance sheet Trade and other payables excluding non-financial instruments Borrowings Derivative financial instruments – – (303) (806,089) (829,482) – (806,089) (829,482) (303) (303) (1,635,571) (1,635,874) Annual Report 2014 187 NOTES TO THE FINANCIAL STATEMENTS August 31, 2014 31. FINANCIAL RISK MANAGEMENT (CONT’D) (h) Financial instruments by category (cont’d) 2013 Loans and receivables S$'000 Company Availablefor-sale financial assets S$'000 1,175,298 – – 75,362 – 54,098 579,936 – 1,175,298 54,098 579,936 75,362 1,250,660 634,034 1,884,694 Derivatives used for hedging S$’000 Other financial liabilities at amortised cost S$’000 Total S$’000 – – (372) (706,747) (828,921) – (706,747) (828,921) (372) (372) (1,535,668) (1,536,040) Total S$'000 Assets as per balance sheet Trade and other receivables excluding non-financial instruments Long-term investments Short-term investments Bank balances and fixed deposits Liabilities as per balance sheet Trade and other payables excluding non-financial instruments Borrowings Derivative financial instruments 188 Singapore Press Holdings NOTES TO THE FINANCIAL STATEMENTS August 31, 2014 32. RELATED PARTY TRANSACTIONS (a) Sales and purchases of goods and services Group Rental income from non-controlling interest Fees paid to a firm of which a director is a member ++ 2014 S$'000 2013 S$'000 – 1,906 260 1,755++ Included fees related to the listing of SPH REIT. (b) Key management personnel compensation and transactions Key management personnel compensation and transactions are as follows: Group Remuneration and other short-term employee benefits Employers’ contribution to defined contribution plans Share-based compensation expense Staff loans granted to key management personnel 2014 S$'000 2013 S$'000 20,906 562 3,300 20,875 519 3,980 24,768 25,374 430 335 The above includes total emoluments of the Company’s directors of S$4.3 million (2013: S$4.1 million). 33. SEGMENTAL INFORMATION (a) Operating segments Management has determined the operating segments based on the reports provided to the Chief Executive Officer (CEO) of the Company that are used to make strategic decisions. The Group is organised into three major operating segments, namely Newspaper and Magazine, Property, and Treasury and Investment. The Newspaper and Magazine segment is involved in the production of content for distribution on print and multimedia platforms including the Internet and mobile devices. The Property segment holds, manages and develops properties of the Group. The Treasury and Investment segment manages the investment activities of the Group. Other operations under the Group, which are currently not significant to be reported separately, are included under “Others”. These comprise the Group’s businesses and investments in online classified, organising events and exhibitions, online investor relations and financial portal services, book publishing and distribution, radio and television broadcasting, and the New Media Fund. Segment performance is evaluated based on profit/(loss) before taxation which is used as a measure of performance as management believes this is most relevant in evaluating the results of the segments. Inter-segment pricing is determined on mutually agreed terms. Segment results, assets and liabilities include items directly attributable to a segment as well as those that can be allocated on a reasonable basis. Annual Report 2014 189 NOTES TO THE FINANCIAL STATEMENTS August 31, 2014 33. SEGMENTAL INFORMATION (CONT’D) (a) Operating segments (cont’d) Information regarding the results of each reportable segment is included in the table below. 2014 Newspaper and Magazine S$’000 Operating revenue External sales Inter-segmental sales Total operating revenue Result Segment result Finance costs Interest income Fair value change on investment properties Share of net profit/(loss) of associates and jointly-controlled entities Gain on partial divestment of a jointly-controlled entity Profit before taxation Taxation Profit after taxation Non-controlling interests Profit attributable to Shareholders Other information Segment assets Segment assets includes: Investments in associates/ jointly-controlled entities Additions to: - property, plant and equipment - investment properties - intangible assets Segment liabilities Treasury and Property Investment S$’000 S$’000 Others Eliminations Consolidated S$’000 S$’000 S$’000 931,686 7,779 939,465 204,985 1,937 206,922 78,513 2,984 81,497 243,382 (135) 110 148,054 (18,066) 333 – – – 47,279 (16,860) – – 109,076 – 3,024 – – – 246,381 – 239,397 – 30,419 (6,927) (5) 13 – (12,700) (12,700) – – – 431,788 (35,066) 456 – 109,076 (33,750) – (30,726) 52,863 12,194 – – 52,863 528,391 (57,655) 470,736 (66,450) – 404,286 545,233 3,997,090 1,913,816 195,257 – 6,651,396 34,038 – – 51,003 – 85,041 17,537 – 2,723 366 78,810 – – – – 1,021 – 8,949 – – – 18,924 78,810 11,672 189,755 1,311,515 600,629 45,911 – 2,147,810 60,502 46,901 2,255,213 Current income tax liabilities Deferred income tax liabilities Consolidated total liabilities Depreciation Amortisation of intangible assets Impairment of property, plant and equipment 1,215,184 – 1,215,184 52,002 385 – 1,945 – 54,332 2,065 – – 7,549 – 9,614 9,798 – – – – 9,798 190 Singapore Press Holdings NOTES TO THE FINANCIAL STATEMENTS August 31, 2014 33. SEGMENTAL INFORMATION (CONT’D) (a) Operating segments (cont’d) 2013 Newspaper and Magazine S$’000 Operating revenue External sales Inter-segmental sales Total operating revenue Result Segment result Finance costs Interest income Fair value change on investment properties Share of net profit/(loss) of associates and jointly-controlled entities Profit/(loss) before taxation Taxation Profit after taxation Non-controlling interests Profit attributable to Shareholders Other information Segment assets Segment assets includes: Investments in associates/ jointly-controlled entities Additions to: - property, plant and equipment - investment properties - intangible assets Segment liabilities Treasury and Property Investment S$’000 S$’000 Others Eliminations Consolidated S$’000 S$’000 S$’000 991,220 5,260 996,480 198,139 1,957 200,096 50,093 2,075 52,168 288,678 (137) 74 141,150 (30,344) 204 – – – 12,817 (1,432) – – 111,407 – 4,725 293,340 – 222,417 – 11,385 (27,774) (12) 35 – (10,292) (38,043) – (9,292) (9,292) – – – 414,871 (31,925) 313 – 111,407 – – (5,567) 489,099 (54,797) 434,302 (3,348) 430,954 597,550 3,865,917 1,717,451 192,436 – 6,373,354 33,330 – – 28,918 – 62,248 22,359 – – 1,625 44,011 – – – – 1,955 – 61,061 – – – 25,939 44,011 61,061 189,476 1,233,455 602,453 21,333 – 2,046,717 Current income tax liabilities Deferred income tax liabilities Consolidated total liabilities Depreciation Amortisation of intangible assets Write-back of impairment of property, plant and equipment Impairment of goodwill Impairment of intangible assets Allowance for impairment of associates 1,239,452 – 1,239,452 69,613 41,318 2,157,648 55,223 535 – 2,359 – 58,117 2,499 – – 5,590 – 8,089 (1,499) 11,816 – – – – – – – – (1,499) 11,816 3,786 – – – – 3,786 – – – 4,582 – 4,582 Annual Report 2014 191 NOTES TO THE FINANCIAL STATEMENTS August 31, 2014 33. SEGMENTAL INFORMATION (CONT’D) (b) Geographical segments The principal geographical area in which the Group operates is Singapore. The Group’s overseas operations comprise mainly publishing and distributing magazines, holding overseas investments, providing marketing and editorial services and providing online search, directories and classified services. Operating revenue 2014 2013 S$’000 S$’000 Singapore Other countries Non-current assets 2014 2013 S$’000 S$’000 Total assets 2014 2013 S$’000 S$’000 1,170,375 44,809 1,196,951 42,501 4,979,011 32,133 4,689,655 33,330 6,592,575 58,821 6,320,298 53,056 1,215,184 1,239,452 5,011,144 4,722,985 6,651,396 6,373,354 34. NEW OR REVISED ACCOUNTING STANDARDS AND INTERPRETATIONS Certain new standards and amendments and interpretations to existing standards have been published and are mandatory for the Group’s accounting periods beginning on or after September 1, 2014 or later periods for which the Group has not early adopted. The management anticipates that the adoption of these standards, amendments and interpretations will not have a material impact on the financial statements of the Group and of the Company. 35. AUTHORISATION OF FINANCIAL STATEMENTS On October 15, 2014, the Board of Directors of Singapore Press Holdings Limited authorised these financial statements for issue. 192 Singapore Press Holdings OPERATING COMPANIES OF THE GROUP As at August 31, 2014 SUBSIDIARIES Name of Subsidiary Principal Activities Country of Incorporation 701Sou (Hong Kong) Pte Ltd Holding investments Hong Kong Bizlink Exhibition Services Pte. Ltd. Exhibitions/ convention/ conference organisers Singapore Blu Inc Holdings (Malaysia) Sdn. Bhd. Holding investments and providing management support services Malaysia Blu Inc Media (HK) Limited Publishing magazines and providing editorial and other services Hong Kong Blu Inc Media China Advertising and promoting the magazine publishing business The People's Republic of China Blu Inc Media Sdn. Bhd. Publishing and distributing magazines and books Malaysia CT Point Investments Pte. Ltd. Holding investments Singapore Digi Ventures Private Limited Fund management and holding investments Singapore Exhibits Inc Pte. Ltd. Exhibitions/ convention/ conference organisers Singapore Focus Publishing Ltd Publishing magazines and providing editorial services Singapore Invest Learning Pte. Ltd. Holding investments Singapore Invest Media Pte. Ltd. Holding investments Singapore Moon Holdings Pte. Ltd. Holding investments Singapore New Beginnings Management Consulting (Shanghai) Company Limited Business management and consultancy services The People's Republic of China PE One Pte. Ltd. Holding investments Singapore Quotz Pte. Ltd. Providing online system for sales of vehicles and related services Singapore SGCM Pte. Ltd. Providing online classified services for cars Singapore Shareinvestor Pte Ltd Providing online investor relations services, developing applications and operating a financial portal Singapore Shareinvestor.com Holdings Pte Ltd Holding investments and providing management services Singapore SI Portal.com Sdn Bhd Providing online investor relations services, developing applications and operating a financial portal Malaysia Sin Chew Jit Poh (Singapore) Limited Holding investments and properties Singapore Annual Report 2014 OPERATING COMPANIES OF THE GROUP As at August 31, 2014 SUBSIDIARIES (CONT’D) Country of Incorporation Name of Subsidiary Principal Activities Singapore Press Holdings (Overseas) Limited Providing marketing and other services and holding investments Singapore SPH (Americas) Pte Ltd Providing news reporting services Singapore SPH AlphaOne Pte. Ltd. Holding investments Singapore SPH Buzz Pte. Ltd. Franchising kiosks to third party operators Singapore SPH Data Services Pte Ltd Licensing copyrights and trademarks Singapore SPH Digital Media Pte. Ltd. Providing online investor relation services and holding investments Singapore SPH Digital Media Sdn. Bhd. Providing sales agent services to its ultimate holding corporation Malaysia SPH Interactive International Pte. Ltd. Licensing software, providing technical services and holding investments Singapore SPH Interactive Pte. Ltd. Holding investments Singapore SPH Magazines Pte Ltd Publishing magazines, providing online marketing services and editorial services and holding investments Singapore SPH Media Fund Pte. Ltd. Holding investments Singapore SPH Net Pte. Ltd. Holding investments Singapore SPH REIT Management Pte. Ltd. Property fund management Singapore SPH Retail Property Management Services Pte. Ltd. Managing shopping centres Singapore SPH Radio Private Limited Radio broadcasting Singapore SPHM Pte Ltd Publishing and distributing magazines Singapore Sphere Exhibits Pte. Ltd. Events/ exhibitions/ conventions/ conference organisers and holding investments Singapore Sphere Exhibits Malaysia Sdn. Bhd. Management and promotion of events, exhibitions and meetings Malaysia Straits Times Press Pte. Ltd. Publishing and distributing of books Singapore Tamil Murasu Ltd Publishing newspapers Singapore The Straits Times Press (1975) Limited Holding investments Singapore TPR Holdings Pte. Ltd. Holding investments Singapore 193 194 Singapore Press Holdings OPERATING COMPANIES OF THE GROUP As at August 31, 2014 ASSOCIATES Name of Associate Principal Activities Country of Incorporation Beerfest Asia Pte. Ltd. Organising, staging, operating and managing the event Singapore The Chope Group Pte. Ltd. Provide service automation technology and online reservations portal Singapore Conversion Hub Marketing Pte. Ltd. Providing social media advertising Singapore Hardwarezone Philippines Corporation Publishing, advertising and providing online services Philippines Kyosei Ventures Pte. Ltd. Providing online marketing and technology services Singapore Magzter Inc. Self-service digital magazine store and newsstand United States MediaCorp Press Ltd Production and distribution of newspapers Singapore MediaCorp TV Holdings Pte. Ltd. Provision and marketing of television broadcasting services, production and distribution of television programmes and music albums Singapore MI Publishing (HK) Co. Limited Publishing magazines Hong Kong MindChamps Preschool (Worldwide) Pte. Limited Operating and franchising of early childhood curriculum and enrichment programmes and related investment holdings Singapore SI.com (Thailand) Co. Ltd Providing online investor relations services, developing applications and operating a financial portal Thailand JOINTLY-CONTROLLED ENTITIES Name of Jointly-controlled Entity Principal Activities Country of Incorporation 701Search Pte. Ltd. Online businesses Singapore 701Search, Inc. Providing online search, directories and classifieds services Philippines 701 Ventures Pte. Ltd. Providing online classifieds services Singapore Cho Tot Company Limited Providing online classifieds services Vietnam Mudah.my Sdn. Bhd. Providing online classifieds services Malaysia PT 701Search Providing online classifieds services Indonesia Annual Report 2014 OVERSEAS BUREAUS As at August 31, 2014 AUSTRALIA CHINA (GUANGZHOU) CHINA (HONG KONG) ST Cynthia Low Tel 61-2-9449 3767 [email protected] Room 1106, Peace World Plaza 362-366, Huanshi Dong Road Guangzhou 510060 Guangdong Province, P.R. China 1308, 13th Floor, Tower Two Lippo Centre, No. 89 Queensway Hong Kong CHINA (BEIJING) 8th Floor, Unit 05 Raffles City Beijing Office Tower No. 1 Dongzhimen South Street Dongcheng District Beijing 100007, P.R. China ST Kor Kian Beng Tel 86-10-6418 1577 86-10-6418 1578 HP 86-1590-122 5935 Fax 86-10-6418 1580 [email protected] Esther Teo Tel 86-10-6418 1577 86-10-6418 1578 HP 86-1888-897 2095 Fax 86-10-6418 1580 [email protected] Rachel Chang Wenqi Tel 86-10-6418 1577 86-10-6418 1578 HP 86-1391-113 9812 Fax 86-10-6418 1580 [email protected] ZB Chua Eng Wee Tel 86-10-6418 1587 HP 86-1391-124 2894 Fax 86-10-6418 1584 [email protected] Teo Woan Yee Tel 86-10-6418 1587 HP 86-1281-090 7437 Fax 86-10-6418 1584 [email protected] ZB Sim Tze Wei Tel 86-20-8374 0537 Fax 86-20-8374 0512 [email protected] Mktg Zhang Mingshi Tel 86-208 374 0537 HP 86-138 2610 1468 Fax 86-20 8374 0512 [email protected] ST Li Xueying Tel 852-6492 5164 [email protected] ZB Norman Yik Tel 852-2524 6191 Fax852-2524 7394 [email protected] Mktg Don Li Tel 852-2877 9076 Fax852-2522 0950 [email protected] Echo Cheung Tel 852-2877 9076 Fax852-2522 0950 [email protected] Amanda So Tel 852-2877 9076 Fax852-2522 0950 [email protected] CHINA (SHANGHAI) Room 1309B, 13th Floor, Lansheng Building 8 Huaihai Road Centre Shanghai 200021, P.R. China ZB Gu Gong Lei Tel 86-21-6319 1992 83-21-6319 1995 HP 86-13-9761 4631 Fax 86-21-6319 1991 [email protected] 195 196 Singapore Press Holdings OVERSEAS BUREAUS As at August 31, 2014 EUROPE INDONESIA (JAKARTA) JAPAN (TOKYO) BT Neil Behrmann [email protected] Suite 1401, 14th Floor Deutsche Bank Building Jalan Imam Bonjol 80 Jakarta 10310, Indonesia BT Anthony Rowley Tel81-3-5467 4656 Fax81-3-5467 4656 [email protected] ST Syed Zakir Hussain Tel62-21-3983 1472 HP 62-81-1984 8922 Fax62-21-3983 1466 [email protected] ZB Foo Choo Wei Tel090-8567 9193 [email protected] 202 Drake House, Dolphin Square London SW1V 3NN United Kingdom ST Jonathan Eyal Tel 44-78-0313 8213 Fax44-20-7930 5854 [email protected] INDIA (NEW DELHI) ST Nirmala Ganapathy HP 91-9891 257 047 [email protected] INDO CHINA ST Nirmal Ghosh HP 66-8-9897 0802 Fax66-2-664 2070 [email protected] Wahyudi Soeriaatmadja Tel62-21-3983 1469 HP 62-81-6851 600 Fax62-21-3983 1466 [email protected] Zubaidah Nazeer Mudin Tel62-21-3983 1469 HP 62-81-5936 7276 Fax62-21-3983 1466 [email protected] General Line : 62-21-3983 1465 ST Kwan Weng Kin Tel81-3-3442 4258 Fax 81-3-3442 4258 [email protected] 5-A, 6-28, Akasaka 6-chome, Minato-ku, Tokyo 107-0052 Japan Mktg Hiroshi Okawa Tel81-3-3582 6259 Fax81-3-3582-6259 [email protected] Maki Ichihara [email protected] Annual Report 2014 197 OVERSEAS BUREAUS As at August 31, 2014 KOREA (SEOUL) PHILIPPINES (MANILA) U.S.A. (OHIO) ZB Kang Gwi Young Tel010-8940 3982 [email protected] ST Raul Dancel Tel63-915-699 9735 [email protected] ST Paul Zach Tel 1-440-212 4125 [email protected] MALAYSIA (KUALA LUMPUR) TAIWAN (TAIPEI) U.S.A. (WASHINGTON) Suite 11A, Level 11, Etiqa Twins Tower 2, No. 11 Jalan Pinang 50450 Kuala Lumpur Malaysia 12F-3, No. 57 Section 1 Chong Qing, South Road Zhong Zheng District Taipei City 10048, Taiwan (R.O.C.) National Press Building Suite 916, 529 14th Street., NW Washington, DC 20045 U.S.A ST Carolyn Hong Tel02-03-2162 0011 Fax02-03-2164 6439 [email protected] ZB Woo Mun Kit Tel886-2-2383 2732 Fax886-2-2375 7822 [email protected] ST Jeremy Au Yong Tel 1-202-662 8728 Fax1-202-662 8729 [email protected] Shannon Teoh Tel02-03-2162 0011 [email protected] THAILAND (BANGKOK) Melissa Sim Tel 1-202-662 8728 Fax1-202-662 8729 [email protected] BT S Jayasankaran Tel60-12-305 8995 [email protected] Pauline Ng Tel60-19-283 8403 [email protected] Unit A-19-5 Northpoint Office Mid Valley City No 1 Jalan Medan Syed Putra Utara 59200 Kuala Lumpur Mktg Janise Low Tel603-2287 2262 Fax603 2287 2201 [email protected] Violet Poh Tel603-2287 2262 Fax603 2287 2201 [email protected] Wong Siang Ling Tel603-2287 2262 Fax603 2287 2201 [email protected] Jenny Yap Tel603-2287 2262 Fax603 2287 2201 [email protected] ST Tan Hui Yee Tel 66-8-9811 1854 [email protected] SHANGHAI INVESTMENT OFFICE U.S.A. (MARYLAND) BT Leon Hadar [email protected] Room 1302, Block A No. 868 East Longhua Road Shanghai 200023, P.R. China ST Loo Chin Wah New Beginnings Management Consulting (Shanghai) Company Limited Tel 86-21-6319 1989 Fax86-21-6319 1991 [email protected] 198 Singapore Press Holdings PROPERTIES OF THE GROUP As at August 31, 2014 TENURE EXPIRY DATE OF LEASE LAND (SQM) BUILT-IN (SQM) EXISTING USE EFFECTIVE GROUP INTEREST (%) Media Centre 82 Genting Lane Leasehold July 15, 2040 24,892 49,131 Industrial 100 Print Centre 2 Jurong Port Road Leasehold June 8, 2034 110,075 102,152 Industrial 100 News Centre 1000 Toa Payoh North Leasehold March 2, 2031 21,730 54,296 Industrial 100 Leasehold October 15, 2068 - 554 Commercial 100 Leasehold May 6, 2878 1,721 488 Residential 100 42 Nassim Road Freehold - 1,406 686 Residential 100 42A Nassim Road Freehold - 1,444 645 Residential 100 42B Nassim Road Freehold - 1,418 645 Residential 100 Paragon 290 Orchard Road Freehold - 17,355 94,307 Commercial 100 The Clementi Mall Commonwealth Avenue West/ Clementi Avenue 3 Leasehold August 31, 2109 - 26,976 Commercial 60 The Seletar Mall Sengkang West Avenue/ Fernvale Road (under construction) Leasehold April 17, 2111 8,790 26,370 Commercial 70 Freehold - - 117 Residential 100 Leasehold February 14, 2059 - 368 Commercial 100 New Beginnings Room 1302, Block A, No. 868 East Longhua Road, Shanghai 200023, PRC Leasehold February 17, 2058 170 111 Commercial 100 Blu Inc Media China Unit 1902-1905, No. 425, Yishan Road, Xuhui District, Shanghai Leasehold August 27, 2054 461 Commercial 100 LOCATION SINGAPORE Manhattan House 151 Chin Swee Road Units #01-39 to #01-48 and #01-51 to #01-56 20A Yarwood Avenue MALAYSIA Awana Condominium Unit 3544 Genting Highlands HONG KONG Tower Two, Lippo Centre Unit 1308 13th Floor 89 Queensway, Hong Kong CHINA 647 Annual Report 2014 199 OPTIONS AND AWARDS Details of the options and awards granted to a Director under the Singapore Press Holdings Group (1999) Share Option Scheme (“1999 Scheme”) and the SPH Performance Share Plan (“Share Plan”) are as follows: 1999 Scheme Name of Director Chan Heng Loon Alan Aggregate options outstanding as at 31.8.14 Number of new ordinary shares issued pursuant to exercise of options during the financial year under review Number of existing ordinary shares transferred pursuant to exercise of options during the financial year under review 950,000 1,175,000 – – Aggregate awards outstanding as at 1.9.13 Aggregate awards granted since commencement of Share Plan on 5.12.06 to 31.8.14 Aggregate awards released during the financial year under review Aggregate awards outstanding as at 31.8.14 Up to 1,145,900 Up to 2,860,500 173,100 Up to 1,208,400 Aggregate options outstanding as at 1.9.13 Aggregate options granted and accepted since commencement of 1999 Scheme on 16.07.99 to 31.8.14 Aggregate options exercised since commencement of 1999 Scheme on 16.07.99 to 31.8.14 1,175,000 2,125,000 Share Plan Name of Director Chan Heng Loon Alan In respect of the 1999 Scheme and the Share Plan: 1. The 1999 Scheme has been terminated with regard to the grant of further options. No options were granted under the 1999 Scheme during the financial year under review. 2. The Rules of the 1999 Scheme do not allow for options to be granted at a discount. 3. Details of the ordinary shares delivered pursuant to awards granted under the Share Plan are set out in the Notes to the Accounts. The prices at which the ordinary shares were purchased have been previously announced. 4. No options or awards under the 1999 Scheme and the Share Plan have been granted to controlling shareholders of the Company or their associates. 5. No participant has received 5% or more aggregate of (a) the total number of new ordinary shares available under the Share Plan and 1999 Scheme collectively, and (b) the total number of existing ordinary shares delivered pursuant to awards released under the Share Plan and options exercised under the 1999 Scheme. Copies of the 1999 Scheme and the Share Plan Rules are available for inspection at the Company’s registered office. 200 Singapore Press Holdings SHAREHOLDING STATISTICS As at 8 October 2014 DISTRIBUTION OF SHAREHOLDERS BY SIZE OF SHAREHOLDINGS Size of Shareholdings No. of Shareholders % No. of Shares 1 - 999 1,000 - 10,000 10,001 - 1,000,000 1,000,001 and above 1,453 45,109 12,560 85 2.46 76.19 21.21 0.14 616,711 180,364,049 592,159,418 826,744,121 0.04 11.27 37.01 51.68 TOTAL 59,207 100.00 1,599,884,299 100.00 * %* Shareholdings exclude 764,822 treasury shares TWENTY LARGEST ORDINARY SHAREHOLDERS 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 * Name of Shareholder No. of Shares % of Shares* CITIBANK NOMINEES SINGAPORE PTE LTD DBS NOMINEES PTE LTD HSBC (SINGAPORE) NOMINEES PTE LTD DBSN SERVICES PTE LTD UNITED OVERSEAS BANK NOMINEES (PRIVATE) LIMITED BANK OF SINGAPORE NOMINEES PTE LTD RAFFLES NOMINEES (PTE) LTD UOB KAY HIAN PTE LTD LEE FOUNDATION STATES OF MALAYA LEE PINEAPPLE COMPANY PTE LTD BNP PARIBAS SECURITIES SERVICES PTE LTD OCBC NOMINEES SINGAPORE PRIVATE LIMITED LEUNG KAI FOOK MEDICAL COMPANY PTE LTD CHAN SIEW KIM ALICE ESTATE OF TAN ENG SIAN, DECEASED PHAY THONG HUAT PTE LTD LEE FOUNDATION NANYANG PRESS (SINGAPORE) LIMITED DB NOMINEES (SINGAPORE) PTE LTD YONG YING-I 167,795,665 159,300,593 78,243,839 56,732,852 41,579,726 27,885,858 23,573,416 18,465,785 15,215,522 12,750,000 12,559,710 10,866,097 10,540,350 10,000,000 8,838,754 8,582,000 8,210,940 7,973,824 7,701,618 6,600,000 10.49 9.96 4.89 3.55 2.60 1.74 1.47 1.15 0.95 0.80 0.79 0.68 0.66 0.63 0.55 0.54 0.51 0.50 0.48 0.41 TOTAL 693,416,549 43.35 Shareholdings exclude 764,822 treasury shares Annual Report 2014 201 SHAREHOLDING STATISTICS As at 8 October 2014 DISTRIBUTION OF MANAGEMENT SHAREHOLDERS BY SIZE OF SHAREHOLDINGS Size of Shareholdings No. of Shareholders 1 - 999 1,000 - 10,000 10,001 - 1,000,000 1,000,001 and above 11 0 3 6 TOTAL 20 % No. of Shares % 55.00 0.00 15.00 30.00 48 0 2,193,317 14,168,404 0.00 0.00 13.41 86.59 100.00 16,361,769 100.00 No. of Shares % of Shares 3,698,297 2,748,829 2,674,219 2,176,119 1,554,362 1,316,578 876,797 658,260 658,260 8 40 22.60 16.80 16.35 13.30 9.50 8.05 5.36 4.02 4.02 0.00 0.00 16,361,769 100.00 HOLDERS OF MANAGEMENT SHARES Name of Shareholder 1 2 3 4 5 6 7 8 9 10 11 THE GREAT EASTERN LIFE ASSURANCE CO LTD OVERSEA-CHINESE BANKING CORPORATION LTD NTUC INCOME INSURANCE COOPERATIVE LIMITED SINGAPORE TELECOMMUNICATIONS LIMITED THE DEVELOPMENT BANK OF SINGAPORE LTD UNITED OVERSEAS BANK LTD NATIONAL UNIVERSITY OF SINGAPORE FULLERTON (PRIVATE) LIMITED NANYANG TECHNOLOGICAL UNIVERSITY CHIEF EXECUTIVE OFFICER DIRECTORS* (FOUR EACH) TOTAL * Excluding the Chief Executive Officer Not less than 99.9% of the ordinary shares in the Company is held by the public and Rule 723 of the SGX Listing Manual has been complied with. VOTING RIGHTS OF SHAREHOLDERS The holders of management and ordinary shares shall be entitled to one (1) vote for each share, EXCEPT that on any resolution relating to the appointment or dismissal of a director or any member of the staff of the Company, the holders of the management shares shall be entitled either on a poll or by show of hands to two hundred (200) votes for each management share held. 202 Singapore Press Holdings NOTICE OF ANNUAL GENERAL MEETING Singapore Press Holdings Limited (Incorporated in the Republic of Singapore) Co. Reg. No. 198402868E NOTICE IS HEREBY GIVEN that the Thirtieth Annual General Meeting of Singapore Press Holdings Limited (the “Company”) will be held at The Auditorium, 1000 Toa Payoh North, News Centre, 1st Storey, Annexe Block, Singapore 318994 on Tuesday, December 2, 2014 at 10.30 a.m. for the following business: ORDINARY BUSINESS 1. To receive and adopt the Directors’ Report and Audited Financial Statements for the financial year ended August 31, 2014. 2. To declare a final dividend of 8 cents per share and a special dividend of 6 cents per share, on a tax-exempt (one-tier) basis, in respect of the financial year ended August 31, 2014. 3. To re-elect the following Directors who are retiring by rotation in accordance with Articles 111 and 112 of the Company’s Articles of Association, and who, being eligible, offer themselves for re-election: (i) (ii) (iii) 4. To re-elect the following Directors who will cease to hold office in accordance with Article 115 of the Company’s Articles of Association, and who, being eligible, offer themselves for re-election: (i) (ii) 5 To approve Directors’ fees of up to S$1,450,000 for the financial year ending August 31, 2015 (2014: up to S$1,400,000). 6. To appoint Auditors and to authorise the Directors to fix their remuneration. 7. To transact any other business of an Annual General Meeting. Chong Siak Ching Lucien Wong Yuen Kuai Chan Heng Loon Alan Tan Chin Hwee Janet Ang Guat Har SPECIAL BUSINESS 8. To consider and, if thought fit, to pass, with or without modifications, the following resolutions which will be proposed as Ordinary Resolutions: (i) “That pursuant to Section 161 of the Companies Act, Chapter 50 (the “Companies Act”) and the listing rules of the Singapore Exchange Securities Trading Limited (the “SGX-ST”), and subject to the provisions of the Newspaper and Printing Presses Act, Chapter 206, authority be and is hereby given to the Directors of the Company to: (a) (i) issue shares in the capital of the Company whether by way of rights, bonus or otherwise; and/or (ii) make or grant offers, agreements or options (collectively, “Instruments”) that might or would require shares to be issued, including but not limited to the creation and issue of (as well as adjustments to) warrants, debentures or other instruments convertible into shares, at any time and upon such terms and conditions and for such purposes and to such persons as the Directors may in their absolute discretion deem fit; and (b) (notwithstanding that the authority conferred by this Resolution may have ceased to be in force) issue shares in pursuance of any Instrument made or granted by the Directors while this Resolution is in force, Annual Report 2014 203 NOTICE OF ANNUAL GENERAL MEETING Singapore Press Holdings Limited (Incorporated in the Republic of Singapore) Co. Reg. No. 198402868E provided that: (1) the aggregate number of shares to be issued pursuant to this Resolution (including shares to be issued in pursuance of Instruments made or granted pursuant to this Resolution) does not exceed 50 per cent. of the total number of issued shares (excluding treasury shares) in the capital of the Company (as calculated in accordance with sub-paragraph (2) below), of which the aggregate number of shares to be issued other than on a pro rata basis to shareholders of the Company (including shares to be issued in pursuance of Instruments made or granted pursuant to this Resolution) does not exceed 10 per cent. of the total number of issued shares (excluding treasury shares) in the capital of the Company (as calculated in accordance with sub-paragraph (2) below); (2) (subject to such manner of calculation and adjustments as may be prescribed by the SGX-ST) for the purpose of determining the aggregate number of shares that may be issued under subparagraph (1) above, the percentage of issued shares shall be based on the total number of issued shares (excluding treasury shares) in the capital of the Company at the time this Resolution is passed, after adjusting for: (i) new shares arising from the conversion or exercise of any convertible securities or share options or vesting of share awards which are outstanding or subsisting at the time this Resolution is passed; and (ii) any subsequent bonus issue, consolidation or subdivision of shares; (3) in exercising the authority conferred by this Resolution, the Company shall comply with the provisions of the listing manual of the SGX-ST for the time being in force (unless such compliance has been waived by the SGX-ST) and the Articles of Association for the time being of the Company; and (4) (unless revoked or varied by the Company in general meeting) the authority conferred by this Resolution shall continue in force until the conclusion of the next Annual General Meeting of the Company or the date by which the next Annual General Meeting of the Company is required by law to be held, whichever is the earlier.” (ii) “That approval be and is hereby given to the Directors of the Company to grant awards in accordance with the provisions of the SPH Performance Share Plan (the “SPH Performance Share Plan”) and to allot and issue such number of ordinary shares in the capital of the Company (“Ordinary Shares”) as may be required to be delivered pursuant to the vesting of awards under the SPH Performance Share Plan, provided that the aggregate number of new Ordinary Shares allotted and issued and/or to be allotted and issued, when aggregated with existing Ordinary Shares (including Ordinary Shares held in treasury) delivered and/or to be delivered, pursuant to the Singapore Press Holdings Group (1999) Share Option Scheme and the SPH Performance Share Plan, shall not exceed 5 per cent. of the total number of issued Ordinary Shares (excluding treasury shares) from time to time.” (iii) “That: (a) for the purposes of Sections 76C and 76E of the Companies Act, the exercise by the Directors of the Company of all the powers of the Company to purchase or otherwise acquire issued Ordinary Shares not exceeding in aggregate the Maximum Limit (as hereafter defined), at such price or prices as may be determined by the Directors of the Company from time to time up to the Maximum Price (as hereafter defined), whether by way of: (i) market purchase(s) on the SGX-ST; 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 be determined or formulated by the Directors as they consider fit, which scheme(s) shall satisfy all the conditions prescribed by the Companies Act, 204 Singapore Press Holdings NOTICE OF ANNUAL GENERAL MEETING Singapore Press Holdings Limited (Incorporated in the Republic of Singapore) Co. Reg. No. 198402868E and otherwise in accordance with all other laws and regulations and rules of the SGX-ST as may for the time being be applicable, be and is hereby 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 the Share Buy Back Mandate may be exercised by the Directors of the Company at any time and from time to time during the period commencing from the date of the passing of this Resolution and expiring on the earliest of: (i) the date on which the next Annual General Meeting of the Company is held; (ii) the date by which the next Annual General Meeting of the Company is required by law to be held; and (iii) the date on which purchases or acquisitions of Ordinary Shares pursuant to the Share Buy Back Mandate are carried out to the full extent mandated; (c) in this Resolution: “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 which occurs after the relevant five day period; “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 offmarket purchase; “Maximum Limit” means that number of issued Ordinary Shares representing 10 per cent. of the total number of the issued Ordinary Shares as at the date of the passing of this Resolution (excluding any Ordinary Shares which are held as treasury shares as at that date); and “Maximum Price”, in relation to an Ordinary Share to be purchased or acquired, means the purchase price (excluding brokerage, commission, applicable goods and services tax and other related expenses) which shall not exceed, in the case of a market purchase of an Ordinary Share and off-market purchase pursuant to an equal access scheme, 105 per cent. of the Average Closing Price of the Ordinary Share; 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 Ling Khor Siew Kim Company Secretaries Singapore, October 31, 2014 Annual Report 2014 205 NOTICE OF ANNUAL GENERAL MEETING Singapore Press Holdings Limited (Incorporated in the Republic of Singapore) Co. Reg. No. 198402868E Notes: A Member entitled to attend and vote at the General Meeting is entitled to appoint a proxy to attend and vote in his stead and the proxy need not be a Member of the Company. The instrument appointing the proxy must be lodged at the Company’s Share Registration Office, Tricor Barbinder Share Registration Services (A division of Tricor Singapore Pte. Ltd.), 80 Robinson Road, #02-00, Singapore 068898 not less than 48 hours before the time fixed for the meeting. Personal Data Privacy: By submitting an instrument appointing a proxy(ies) and/or representative(s) to attend, speak and vote at the Annual General Meeting and/or any adjournment thereof, a Member of the Company (i) consents to the collection, use and disclosure of the Member’s personal data by the Company (or its agents) for the purpose of the processing and administration by the Company (or its agents) of proxies and representatives appointed for the Annual General Meeting (including any adjournment thereof) and the preparation and compilation of the attendance lists, minutes and other documents relating to the Annual General Meeting (including any adjournment thereof), and in order for the Company (or its agents) to comply with any applicable laws, listing rules, regulations and/or guidelines (collectively, the “Purposes”), (ii) warrants that where the Member discloses the personal data of the Member’s proxy(ies) and/or representative(s) to the Company (or its agents), the Member has obtained the prior consent of such proxy(ies) and/or representative(s) for the collection, use and disclosure by the Company (or its agents) of the personal data of such proxy(ies) and/or representative(s) for the Purposes, and (iii) agrees that the Member will indemnify the Company in respect of any penalties, liabilities, claims, demands, losses and damages as a result of the Member’s breach of warranty. EXPLANATORY NOTES & STATEMENT PURSUANT TO ARTICLE 72 OF THE COMPANY’S ARTICLES OF ASSOCIATION 1. In relation to Ordinary Resolution No. 3(i): Chong Siak Ching* will, upon re-election, continue as a member of the Nominating Committee. She will step down from the Audit Committee and be appointed as a member of the Remuneration Committee. She is considered an independent Director. There are no relationships (including immediate family relationships) between Ms Chong and the other Directors or the Company. 2. In relation to Ordinary Resolution No. 3(ii): Lucien Wong Yuen Kuai* will, upon re-election, continue as a member of the Executive Committee and the Remuneration Committee. He will be appointed as a member of the Nominating Committee. He is considered an independent Director. There are no relationships (including immediate family relationships) between Mr Wong and the other Directors or the Company. 3. In relation to Ordinary Resolution No. 3(iii): Chan Heng Loon Alan* will, upon re-election, continue as a member of the Executive Committee. He is the Chief Executive Officer of the Company. Save as disclosed herein, there are no relationships (including immediate family relationships) between Mr Chan and the other Directors or the Company. 4. In relation to Ordinary Resolution No. 4(i): Tan Chin Hwee* will, upon re-election, continue as a member of the Audit Committee and Board Risk Committee. He is considered an independent Director. There are no relationships (including immediate family relationships) between Mr Tan and the other Directors or the Company. 5. In relation to Ordinary Resolution No. 4(ii): Janet Ang Guat Har* will, upon re-election, be appointed as a member of the Audit Committee and Board Risk Committee. She is considered an independent Director. There are no relationships (including immediate family relationships) between Ms Ang and the other Directors or the Company. 206 Singapore Press Holdings NOTICE OF ANNUAL GENERAL MEETING Singapore Press Holdings Limited (Incorporated in the Republic of Singapore) Co. Reg. No. 198402868E 6. Ordinary Resolution No. 5, if passed, will facilitate the payment of Directors’ fees during the financial year in which the fees are incurred, that is, during the financial year from September 1, 2014 to August 31, 2015. The amount of Directors’ fees is computed based on the anticipated number of Board and Board Committee meetings, assuming full attendance by all the Directors. The amount also includes a contingency sum to cater to unforeseen circumstances such as the appointment of an additional Director, additional unscheduled Board meetings and for the formation of additional Board Committees. 7. The effects of the resolutions under the heading “Special Business” in the Notice of the Thirtieth Annual General Meeting are: (a) Ordinary Resolution No. 8(i) is to authorise the Directors of the Company from the date of that meeting until the next Annual General Meeting, subject to the provisions of the Newspaper and Printing Presses Act, Chapter 206, to issue shares in the capital of the Company and/or to make or grant instruments (such as warrants or debentures) convertible into shares, and to issue shares in pursuance of such instruments, up to a number not exceeding in total 50 per cent. of the total number of issued shares (excluding treasury shares) in the capital of the Company, of which up to 10 per cent. of the total number of issued shares (excluding treasury shares) in the capital of the Company may be issued other than on a pro rata basis to shareholders. For the purpose of determining the aggregate number of shares that may be issued, the percentage of issued shares shall be based on the total number of issued shares (excluding treasury shares) in the capital of the Company at the time that Ordinary Resolution No. 8(i) is passed, after adjusting for (i) new shares arising from the conversion or exercise of any convertible securities or share options or vesting of share awards which are outstanding or subsisting at the time that Ordinary Resolution 8(i) is passed, and (ii) any subsequent bonus issue, consolidation or sub-division of shares. For the avoidance of doubt, any consolidation or sub-division of shares in the capital of the Company will require shareholders’ approval. (b) Ordinary Resolution No. 8(ii) is to empower the Directors to offer and grant awards, and to allot and issue new ordinary shares in the capital of the Company, pursuant to the SPH Performance Share Plan (which was approved by shareholders at the Extraordinary General Meeting held on 5 December 2006), provided that the aggregate number of new ordinary shares allotted and issued and/or to be allotted and issued, when aggregated with the existing ordinary shares (including ordinary shares held in treasury) delivered and/or to be delivered, pursuant to the Singapore Press Holdings Group (1999) Share Option Scheme and the SPH Performance Share Plan, shall not exceed 5 per cent. of the total number of issued ordinary shares in the capital of the Company (excluding ordinary shares held in treasury) from time to time. Although the Rules of the SPH Performance Share Plan provide for a higher limit of 10 per cent. for new shares which may be issued under the Singapore Press Holdings Group (1999) Share Option Scheme and the SPH Performance Share Plan, Ordinary Resolution 8(ii) provides for a lower limit of 5 per cent., as the Company does not anticipate that it will require a higher limit before the next Annual General Meeting. (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 the 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 on the number of ordinary shares purchased or acquired and the price at which such ordinary shares were purchased or acquired and whether the ordinary shares purchased or acquired are held in treasury or cancelled. 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 statements of the Group and the Company for the financial year ended August 31, 2014, based on certain assumptions, are set out in paragraph 2.6 of the Letter to Shareholders dated October 31, 2014, which is enclosed together with the Summary Financial Report. *Details of the Director’s current directorships in other listed companies and other principal commitments are set out on pages 20 to 27 of the Annual Report. PROXY FORM Singapore Press Holdings Limited (Incorporated in the Republic of Singapore) Co. Reg. No. 198402868E IMPORTANT 1.For investors who have used their CPF monies to buy shares of Singapore Press Holdings Limited, the Annual Report 2014 is forwarded to them FOR INFORMATION ONLY. 2.This proxy form is not valid for use by CPF investors and shall be ineffective for all intents and purposes if used or purported to be used by them. 3. CPF investors who wish to attend the Annual General Meeting as observers must submit their requests through their CPF Approved Nominees within the time frame specified. If they also wish to vote, they must submit their voting instructions to the CPF Approved Nominees within the time frame specified to enable them to vote on their behalf. Personal Data Privacy By submitting an instrument appointing a proxy(ies) and/or representative(s), the member accepts and agrees to the personal data privacy terms set out in the Notice of Annual General Meeting. I/We, _____________________________________________________________ (Name) _____________________ (NRIC/Passport No.) of __________________________________________________________________________________________________ (Address) being a member/members of the above named Company, hereby appoint: Name Address NRIC/Passport Number Proportion of Shareholdings (%) and/or (delete as appropriate) or failing him/her, or if no person is named above, the Chairman of the Annual General Meeting, as my/our proxy/proxies to attend and to vote for me/us on my/our behalf and, if necessary, to demand a poll, at the Annual General Meeting of the Company to be held at The Auditorium, 1000 Toa Payoh North, News Centre, 1st Storey, Annexe Block, Singapore 318994 on December 2, 2014 at 10.30 a.m. and at any adjournment thereof. (If you wish to vote all your shares “For” or “Against” the relevant resolution, please indicate with an “X” in the relevant box provided below. Alternatively, if you wish to vote some of your shares “For” and some of your shares “Against” the relevant resolution, please insert the relevant number of shares (and, if you hold both ordinary shares and management shares, the relevant class of shares) in the relevant boxes provided below. In the absence of specific directions, the proxy/proxies will vote or abstain as he/they may think fit, as he/they will on any other matter arising at the Annual General Meeting.) No. Ordinary Resolutions Ordinary Business 1. To adopt Directors’ Report and Audited Financial Statements 2. To declare a Final Dividend and a Special Dividend Chong Siak Ching 3. To re-elect Directors pursuant to Articles 111 (i) and 112 (ii) Lucien Wong Yuen Kuai (iii) Chan Heng Loon Alan 4. To re-elect Directors pursuant to Article 115 (i) Tan Chin Hwee (ii) Janet Ang Guat Har 5. To approve Directors’ fees for the financial year ending August 31, 2015 6. To appoint Auditors and authorise Directors to fix their remuneration 7. To transact any other business Special Business (i) To approve the Ordinary Resolution pursuant to Section 161 of the Companies 8. Act, Cap. 50 (ii) To authorise Directors to grant awards and to allot and issue shares in accordance with the provisions of the SPH Performance Share Plan (iii) To approve the renewal of the Share Buy Back Mandate No. of votes For Dated this ________________ day of ________________ 2014. Total Number of Ordinary Shares held Total Number of Management Shares held __________________________________________________________ Signature(s) of Member(s) or Common Seal IMPORTANT: PLEASE READ NOTES ON THE REVERSE No. of votes Against PROXY FORM Singapore Press Holdings Limited (Incorporated in the Republic of Singapore) Co. Reg. No. 198402868E IMPORTANT Note: 1. Please insert the total number of ordinary shares and/or management shares (“Shares”) held by you. If you have ordinary shares entered against your name in the Depository Register (as defined in Section 130A of the Companies Act, Chapter 50 of Singapore), you should insert that number of ordinary shares. If you have Shares registered in your name in the Register of Members, you should insert that number of Shares. If you have ordinary shares entered against your name in the Depository Register and Shares registered in your name in the Register of Members, you should insert the aggregate number of Shares entered against your name in the Depository Register and registered in your name in the Register of Members. If no number is inserted, the instrument appointing a proxy or proxies shall be deemed to relate to all the Shares held by you. 2. In the case of a joint appointment of two proxies, the Chairman of the Annual General Meeting will be a Member’s proxy by default if either or both of the proxies appointed does/do not attend the Annual General Meeting. In the case of an appointment of two proxies in the alternative, the Chairman of the Annual General Meeting will be a Member’s proxy by default if both the proxies appointed do not attend the Annual General Meeting. 3. A Member of the Company entitled to attend and vote at a meeting of the Company is entitled to appoint one or two proxies to attend and vote instead of him. A proxy need not be a Member of the Company. 4. Where a Member appoints two proxies, the appointments shall be invalid unless he specifies the proportion of his shareholding (expressed as a percentage of the whole) to be represented by each proxy. 5. The instrument appointing a proxy or proxies must be deposited at the Share Registration Office of the Company at Tricor Barbinder Share Registration Services (A division of Tricor Singapore Pte. Ltd.), 80 Robinson Road, #02-00, Singapore 068898, not less than 48 hours before the time appointed for the Annual General Meeting. 6. The instrument appointing a proxy or proxies must be under the hand of the appointor or of his attorney duly authorised in writing. Where the instrument appointing a proxy or proxies is executed by a corporation, it must be executed either under its seal or under the hand of an officer or attorney duly authorised. 7. A corporation which is a Member may authorise by resolution of its directors or other governing body such person as it thinks fit to act as its representative at the Annual General Meeting, in accordance with Section 179 of the Companies Act, Chapter 50 of Singapore. 8. The Company shall be entitled to reject the instrument appointing a proxy or proxies if it is incomplete, improperly completed or illegible or where the true intentions of the appointor are not ascertainable from the instructions of the appointor specified in the instrument appointing a proxy or proxies. In addition, in the case of ordinary shares entered in the Depository Register, the Company may reject any instrument appointing a proxy or proxies lodged if the Member, being the appointor, is not shown to have ordinary shares entered against his name in the Depository Register as at 48 hours before the time appointed for holding the Annual General Meeting, as certified by The Central Depository (Pte) Limited to the Company. This annual report was produced by the Corporate Communications & CSR Division This annual report is printed on environmentally-friendly paper. SINGAPORE PRESS HOLDINGS LIMITED 1000 Toa Payoh North News Centre Singapore 318994 www.sph.com.sg Co. Reg. No 198402868E