from traditional print to new media leadership - a-smart ar 2013.pdf · xpress holdings ltd xpress...

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from Traditional Printto New Media Leadership

Annual Report 2013

New Media

Digital Printing

Financial Printing

Annual Report 2013

Longcheer hoLdings LimitedNo.401 Caobao Road, Shanghai 200233, People’s Republic of ChinaTel: +86 21 6408 8898 Fax: +86 21 5497 0806 Website: www.longcheer.net E-mail: [email protected]

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Xpress Holdings Ltd

No. 1 Kallang Way 2A Singapore 347495

Tel: +65 6880 2828Fax: +65 6880 2998

www.xpress.sg

EXPANDING OUR REACH

Vicplas International Ltd |

Annual

Rep

ort

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VICPLAS

35 Joo Koon Circle Singapore 629110

Tel : 65-6262 3888

Fax : 65-6349 3877

Email: [email protected]

Website: www.vicplas.com

Vicplas International LtdCompany Registration No. 199805362R

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icplas International Ltd

| Annual R

eport 2013

Bamboo Telegraph

November 2013

American Women’s Association of

Singapore

Financial Printing

Commercial Print

Large Format Printing

Corporate Premiums

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nnual Report 2013

M A R Y C H I A • U R B A N H O M M E • M C U B E A U T I T U D E S • M A S E G O • H U A N G A H M A • G O 6 0

A N N U A L R E P O R T 2 0 1 3

MARY CHIA LIFESTYLE AND WELLNESS CENTRES (SINGAPORE) HOTLINE: 1800 250 2001• Albert Complex 6333 0166 60 Albert Street, #02-02 (inside OG) Singapore 189969

• Century Square Shopping Centre 6786 6188 2 Tampines Central 5, #05-01/04, Singapore 529509

• Jurong East 6561 0133 Block 133 Jurong East Street 13, #01-301, Singapore 600133

• Jurong Point Shopping Centre 6793 0166 63 Jurong West Central 3, #B1-100/101/102, Singapore 648886

• Nex 6286 6616 23 Serangoon Central, #04-47/48, Singapore 556083

• Ngee Ann City 6734 6626 391 Orchard Road, #05-22, Ngee Ann City Podium Block, Singapore 238872

• Novena 6250 7949 183/185 Thomson Road, Goldhill Centre, Singapore 307628

• Orchard Point 6732 0220 160 Orchard Point, #02-18 (inside OG), Singapore 238842

• Parkway Parade 6344 2866 80 Marine Parade Road, #05-15/16, Singapore 449269

• The Clementi Mall 6659 1161 3155 Commonwealth Avenue West, #03-01/02, Singapore 129588

MARY CHIA LIFESTYLE AND WELLNESS CENTRES (MALAYSIA) HOTLINE: 1700 80 0661• Mid Valley City +6016 713 1664 Unit 53–1, 1st Floor, The Boulevard, Mid Valley City, Lingkaran Syed Putra, 59200 Kuala Lumpur

• One Utama +6016 710 1664 Lot S117E, 2nd floor, 1Utama Shopping Centre, 1 Lebuh Bandar Utama, Bandar Utama City Centre, 47800 Petaling Jaya, Selangor

• Plaza Pelangi +6016 702 1664 Lot No. 1.19A, Level 1, Jalan Biru, Taman Pelangi, 80400 Johor Bahru, Johor

• Sunway Pyramid +6016 920 1664 Lot LG2, 122C, Lower Ground 2, Sunway Pyramid Shopping Mall, 3 Jalan PJS 11/15 Bandar Sunway, 46150 Petaling Jaya, Selangor

• Sutera Mall +6016 229 1664 L3-032, No.1, Jalan Sutera Tanjung 8/4, Taman Sutera Utama, 81300 Skudai, Johor

• Tropicana City Mall +6016 228 1664 Lot L2-31/32, Second Floor, Tropicana City Mall, Jalan SS 20/27, 47400 Petaling Jaya, Selangor

www.marychia.com

URBAN HOMME LIFESTYLE AND WELLNESS CENTRES (SINGAPORE) HOTLINE: 1800 250 2001• Century Square Shopping Centre 6481 6166 2 Tampines Central 5, #05-01/04, Singapore 529509

• Jurong Point Shopping Centre 6316 0166 63 Jurong West Central 3, #B1-103, Singapore 648331

• Nex 6284 6166 23 Serangoon Central, #04-47/48, Singapore 556083

• Ngee Ann City 6734 6626 391 Orchard Road, #05-22, Ngee Ann City Podium Block, Singapore 238872

• Parkway Parade 6344 6166 80 Marine Parade Road, #05-15/16, Singapore 449269

• The Clementi Mall 6570 6626 3155 Commonwealth Avenue West, #03-03, Singapore 129588

www.urbanhommeformen.com MASEGO LIFESTYLE AND WELLNESS CENTRE (SINGAPORE)• Safra Jurong 6790 1661 333 Boon Lay Way, #4A-01 (Level 3), Singapore 649848

www.masego.com.sg

HUANG AH MA LIFESTYLE AND WELLNESS CENTRE (SINGAPORE)• Porcelain Hotel 6536 1661 50 Mosque Street, Singapore 059528

www.huangahma.com

G060 LIFESTYLE AND WELLNESS CENTRE (SINGAPORE)• Esplanade Xchange 6338 0660 90 Bras Basah Road, #B1-24, Singapore 189562

www.g060.sg

MCU BEAUTITUDES LIFESTYLE & WELLNESS CENTRE (MALAYSIA) • Sunway Pyramid 03 56389366 Lot LG2.122C, Lower Ground 2, Sunway Pyramid Shopping Mall, 3 Jalan PJS 11/15, Bandar Sunway, 46150 Petaling Jaya, Selangor

www.mcubeautitudes.com

MCU TRADING PTE LTD (SINGAPORE)• Betime Building 6252 9651 246 Macpherson Road, #05-03/04, Singapore 348578

From traditional print to new media leadership 1

Company Profileestablished in 1986, Xpress was listed on the sGX mainboard on 28 June 1999. headquartered in singapore, the Group offers the full range of print management services including conceptualisation, design, copywriting, translation, typesetting, colour proofing, printing, post-press packaging, global distribution and delivery

Xpress’ flagship Print Stations, its sales and service centres, are strategically located at the heart of the business districts in the key cities of China, Vietnam, the Philippines, Malaysia, Hong Kong, Australia and Singapore. Supported by a comprehensive network of printing facilities, the onsite Print Stations provide easy-access to print services at quick-turnaround time in close proximity to clients’ premises.

Xpress produces on behalf of clients, financial research reports, annual reports, asset management reports, IPO prospectuses, corporate brochures, year books, magazines and other commercial publications, collaterals and corporate gifts.

In June 2013, the Group launched its 8¼8 BizButler concept which leverages on the latest digital technology to deliver a full range of value added services to clients.

with innovative use of technology, Xpress will continuously revolutionise the pace of competition in the printing industry and raise the standards of customer service by offering unsurpassed convenience, quality, speed and reliability to its customers.

01 Company Profile 02 Financial highlights 03 Corporate Structure 04 Chairman’s Statement 06 Board of directors 08 operations review 11 our Geographical presence 12 Corporate Information 13 Corporate Governance 26 Financial Contents

CoNTeNTS

XPRESS HOLDINGS LTD | ANNUAL REPORT 20132

FinanCial HigHligHTS

GROUP FINANCIALS AT 31 JULY 2013 $’000

2012 $’000

2011 $’000

2010 $’000

2009$’000

INCOME STATEMENT

revenue 23,702 38,862 48,313 59,545 54,999

operating eBitda* 5,868 (248) 9,274 8,476 8,927

Profit/Loss before income tax 2,681 (4,558) 5,289 8,916 10,291

Net profit/Loss after tax and minority interests 2,681 (4,579) 5,263 8,470 13,025

BALANCE SHEET

total assets 165,869 162,648 163,303 164,678 165,819

net tangible assets 76,945 73,136 75,996 78,517 80,558

total equity 141,429 137,620 140,480 143,001 145,042

total liabilities 24,440 25,028 22,823 21,677 20,777

Cash and cash equivalents 6,362 6,260 6,656 10,772 10,775

PER SHARE DATA (SINGAPORE CENTS)

earnings per share – basic and diluted 0.15 (0.3) 0.34 0.55 0.93

net dividend (Final) 0.03 - 0.03 0.06 0.11

net dividend (special) - - - - 0.04

net tangible assets 4.40 4.72 4.91 5.1 5.2

return on average shareholders’ equity (%) 1.90% (3.3%) 3.7% 5.9% 10.2%

60

50

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-1-2-3-4-5

2009 20092010 20102011 20112012 20122013 2013

55

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59.5

48.3

38.9

23.7

GROUP REvENUE ($’M)

OPERATING PROFIT/LOSS BEFORE TAx ($’M)

*Operating EBITDA is defined as profit before tax excluding finance costs, depreciation, amortization and non-operating income.

3

Corporate Structure

xpress holdings ltd

From traditional print to new media leadership

100%print planner (int’l)

limited

100%precise media Group limited

100%Xpress print

(Vietnam) Co., ltd

Xpress holdings (Korea Branch Office)

76%Xpress print

(australia) pty ltd

100%Xpress print

(K.l.) sdn Bhd

100%Xpress print

(h.K.) limited

100%print planner

(Beijing) Co., ltd

100%print planner

(hong Kong) limited

100%Xpress print

(shanghai) Co., ltd

100%print planner

(shenzhen) Co., ltd

100%shenzhen Xpress print

technology Co., ltd

100%print planner

(Chengdu) Co., ltd

100%Xpress print

(shenyang) Co., ltd

100%Xpress print

(shenzhen) Co., ltd

50%shenzhen Xpress wisdom

translation Co., ltd

100%Xpress print

(shenzhen) Co., ltd – Xiamen Branch

100%Xpress print

(shenzhen) Co., ltd – wuhan Branch

100%Xpress print

(shenzhen) Co., ltd – Changsha Branch

100%Xpress print

(shenzhen) Co., ltd – Guangzhou Branch

100%Xpress new

media pte ltd

100%Xpress print

(Taiwan Branch Office)

100%Xpress media

philippines inc.

100%Xpress print

(pte) ltd


Chairman’s STaTemeNT

Dr Wang Kai YuenIndependent Non-Executive Chairman

“We are taking strategic initiatives to enhance our performance by leveraging on the latest digital technology to deliver value added services to our clients.”


Chairman’s STaTemeNT

Dear Shareholders,

FY2013 has been a watershed year for the Group. through concerted effort of management and staff, we managed to stage a turnaround with improved bottomline performance in the financial year ended 31 July 2013 (“FY2013”) despite the challenging business environment for the print industry in the countries we operate.

This positive uptrend marks the success of our strategy to transform the Group from a traditional printer to an iconic print management services provider.

Given our improved performance as well as a healthy balance sheet resulting from our recent rights issue, we are well-poised to push ahead with our plans to accelerate our growth.

From Traditional Printer to Digital-driven Print Management Leader

While time-sensitive financial printing remains a core contributor to the Group, we are taking strategic initiatives to enhance our performance by leveraging on the latest digital technology to deliver value added services to our clients.

in line with this strategic direction, we have recently launched our new 8¼8 BizButler concept which is expected to accelerate growth in our print management services. When fully executed, this will lift our profit margins and expand our customer base with limited capital requirements.

the digital revolution has transformed how business is done and how goods and services are delivered and consumed as e-commerce becomes the preferred option among business executives and consumers at large.

8¼8 BizButler is thus designed to tap on this demand and business opportunity.

Open from 8am to 8pm daily, “8¼8 BizButler” centres will offer a full range of value-added print management and personalised business services plus lifestyle merchandise under one roof, catering to busy executives as well as retail consumers.

while plans are already in place to launch the 8¼8 Biz Butler Concept in Singapore and selected countries in asia, the Group is also spearheading new strategies to boost its time-sensitive financial printing services in various Asian markets

Dividend

The Board of Directors is pleased to declare a final dividend of 0.03 cent in cash per ordinary share to our shareholders to show our appreciation for their continued support.

Thanks and Appreciation

our success would not be possible without the contributions of many. On behalf of my colleagues, I take this opportunity to extend my deep appreciation to our valued shareholders, clients, business associates and staff for their valuable contributions and unrelenting support during this period.

We will like to express special thanks to our directors – Mr Christopher Chong Meng Tak and Dr Lee Tsu-Der who have stepped down from the Board. they have made immense contributions to the Group.

with your support, the Group is poised to scale greater heights in the years ahead.



Board oF DireCTorS


Dr Wang Kai Yuen was appointed as Independent Non-Executive Chairman on 25 March 2002. He chairs the Nominating Committee and Investment and Risk Management Committee; and is also a member of the Audit and Remuneration Committee.

Formerly the Managing Director of Fuji Xerox Singapore Software Centre, he interacted with senior business and product development managers in the US, China and Japan of the global office equipment company. He retired from Fuji Xerox in December 2009.

Because of his extensive exposure overseas, Dr Wang is familiar with american and asian cultures, international business practices and corporate finance and governance. dr wang had also participated in many international meetings of parliamentarians during his tenure as member of parliament from 1984 to 2006. he has wide business and political contacts in China, having led many grassroots delegations to visit numerous city and state governments. in 2005, dr wang was appointed as a Member in the Foreign Specialist Committee – Overseas Chinese Affairs Office of the State Council, People’s Republic of China.

Dr Wang graduated in 1972 with First Class Honours degree in electrical and electronics from the national University of singapore, and holds a master of science in electrical engineering with a phd in engineering from stanford University.

K K Fong PBM

Founder, CEO & Executive Director, Xpress Holdings Ltd

Mr K K Fong (Fong Kah Kuen) founded the Company in 1986 and was re-appointed as Chief Executive Officer & Executive Director on 16 May 2010. He has over 30 years of experience in the printing industry and served Xpress as its Chief Operating Officer since 2006. He was responsible for the general management of the Group and the promotion of its activities and expansion in the region.

mr Fong plays a pivotal role in setting the strategic direction for the Group and has been instrumental in the Group’s expansion, particularly in China. He is also instrumental in forging the strategic relationships with the Group’s major business partners. he spearheaded the business development in China and built up the Group’s robust print solution business, the engine of growth for Xpress.

he is a recipient of various national business awards such as the national it award, the enterprise of the Year award, enterprise 50 awards, and the entrepreneur of the Year award. For his contributions to singapore, he was conferred the public service medal by the president of the republic of singapore in 2010.

Darlington Tseng Te-LinExecutive Director

Mr Darlington Tseng was appointed as Executive Director on 1 march 2008. he joined Xpress on 2 July 2007 as Director of Business Development for Greater China.

Prior to joining Xpress, Mr Tseng held a senior executive position at BasF taiwan ltd, from 2005 to 2007. he gained extensive knowledge of the region’s business climate during his tenure with BasF’s regional business unit, where he collected vast market analyses and formulated strong marketing strategies. Between 1998 and 2002, Mr. Tseng also worked in the chemical industry for AGI Corporation based in Taiwan where he was responsible for the company’s overseas market and successfully set up the company’s Mexico manufacturing plant that produces specialty varnish for printing/ coating industry.

With his extensive knowledge of the regional business climate, Mr Tseng has played a key role in strategising the Group’s penetration into the Greater China markets and growth opportunities in the Asia-Pacific markets.

He has also led his team in expanding the business and launched new service offerings to the Group’s VIP accounts in China. To sustain the Group’s growth momentum, he spearheaded the re-engineering of its operations to strengthen the Group’s business model,


Board oF DireCTorS

while enhancing customer service, as well as attracting and nurturing talent.

Mr Tseng graduated with Honours from Peking University’s international masters of Business administration.

victor Khoo Choon MengExecutive Director

Mr Victor Khoo was appointed as Executive Director on 1 March 2008. He is also the Director of Sales and Marketing, responsible for the management and supervision of the Group’s sales and marketing plans.

Mr Khoo joined Xpress in 1996 as an Account Manager, servicing the Group’s financial printing clients. He spearheaded Xpress’ asset management business, which continues to be a key product under the financial printing market. Mr Khoo is responsible for strategic planning and sales. he has standardised Xpress’ sales and customer service methodologies, ensuring consistency in product and service levels offered across all print stations. with extensive experience in account and project management, he is also directly involved in acquiring, servicing and retaining key strategic accounts of the Group.

Mr Khoo graduated in 1994 with a Bachelor of Commerce degree in Finance and Marketing from Murdoch University, western australia.

Sam Chong KeenIndependent Non-Executive Director

Mr Sam Chong Keen was first appointed as an Independent Non-Executive Director on 5 December 2001. Between 2006 and 2008, he served the Group as Chief Executive Officer, and was re-appointed as Non-Executive Non-independent director on 16 February 2008.

Mr Sam has a wealth of management experience, having held senior/CEO positions in the Singapore Government Administrative Service, National Trades Union Congress, Intraco Ltd, Comfort Group Ltd, VICOM Ltd, Lion Asiapac Ltd, Lion Teck Chiang Ltd, Jade Technologies Holdings Ltd and Sino-Environment Technology Group Limited.

mr sam was the political secretary to the minister for education from 1988 to 1991. he has served on various government boards and committees, including the Central Provident Fund Board and the National Cooperative Federation.

mr sam holds a Bachelor of arts (honours) in engineering science & economics and a master of arts from University of Oxford, as well as a Diploma from the Institute of Marketing, United Kingdom.

Jerry Lee Yin ChiaNon-Executive Non-Independent Director

Mr Jerry Lee was appointed as Non-Executive Non-independent director on 15 december 2004. he has extensive experience in Corporate Finance and M&A, which will be an asset to the Group.

Leveraging on his cross-border experience in finance, Mr Lee has completed several sizeable investment deals and acquisitions in China.

Mr Lee has a Bachelor’s degree in Finance from New York University and a MBA degree from Peking University in Beijing.


operations review

K K Fong PBM

Founder, CEO & Executive Director, Xpress Holdings Ltd

“Going forward, we are optimistic of robust growth as we expand our revenue streams beyond financial printing to service-oriented businesses to target both corporates and consumers.”


OperatiOns Review

Strategic Transformation Produces Positive Results

Xpress has staged a turnaround in its bottomline performance by mounting concrete efforts to transform its business model and introducing new solutions to help customers go beyond print by injecting new value-added applications and services.

Revenue and Profit

For the full year ended 31 July 2013 (FY2013), the Group chalked up a net profit of S$2.7 million, reversing a loss of S$4.6 million in FY2013 – despite posting a lower revenue of S$23.7 million, compared to sales of S$38.9 million in FY2012.

The lower revenue was mainly due to reduced sales from the Group’s time-sensitive and financial printing businesses which were impacted by the weaker performance of financial markets in Asia and prevailing global economic uncertainties.

However, revenue from our print management business which includes value-added services for MNC and VVIP clients, have shot up by 36.2% from S$5.8 million to S$7.9 million due to the rising demand for customised one-stop printing and supply chain services by corporate clients.

Our profitable recovery was attributed to our strategic transformation which led to higher gross profit margins, as well as to contributions from higher foreign currency gains, reduced operating expenses and lower doubtful debt provisions.

The surge in our print management business boosted the Group’s overall profit margins from 59.1% in FY2012 to 73.3% in FY2013. We also benefited from an exchange gain of S$2.7 million compared to S$1.0 million recorded in FY2012.

For FY2013, our doubtful debt provision was trimmed to S$0.5 million, down from S$8.2 million in FY2012.

Operational Costs

The Group enjoyed signficant cost reductions in FY2013.

Overall operational cost for FY2013 was reduced due to lower sales and the Group’s stringent cost control methods.

The cost of raw materials and consumables fell S$6.90 million to S$9.43 million FY2013

Staff cost dipped to S$8.47 million from S$9.92 million in FY2012 mainly due to reduction in staff strength from restructuring of workflow and production processes to boost productivity and achieve savings in manpower.

The Group incurred lower depreciation costs of S$2.33 million as compared to FY2013 and finance costs dropped by S$0.57 million from S$1.43 million in FY2012 to S$0.86 million in FY2013.

Taxation

A significant portion of the Group’s profits from overseas are tax-exempt. As a result, the Group recorded negligible tax expense during both FY2013 and FY2012.

Forging Ahead with Service Oriented Growth and Franchising

Going forward, we are optimistic of robust growth as we expand our revenue streams beyond financial printing to service-oriented businesses to target both corporates and consumers.

On October 23, 2013, we sealed a Memorandum of Understanding (MOU) with Sino-Singapore Guangzhou Knowledge City Investment and Development Co. Ltd (“SSGKC”) to spearhead the launch and growth of Xpress’ 8¼8 Biz Butler concept outlets in Guangzhou and other areas in South China.

SSGKC is the 50-50 joint venture formed by Singbridge International Singapore Pte Ltd and Guangzhou Development District Administrative Committee, to develop the knowledge city in Guangzhou.


operations review

Under the moU, Xpress will set up its operational hQ (OHQ) in the Guangzhou Knowledge City (GKC). The ohQ, to be named as “Xpress Business Butler (south China HQ)”“速印控股商务馆(华南总部)” will set up and run 8¼8 Biz Butler outlets in GKC and Guangzhou development district (Gdd) as well as the surrounding areas in South China.

SSGKC has also appointed Xpress to provide Print management services for its operations and projects in Guangzhou.

To accelerate our development of 8¼8 Biz Butler outlets in South China, Xpress will register a Wholly Foreign owned enterprise (wFoe) with registered capital of Usd 500,000 in Qianhai District in Shenzhen.

Qianhai (Qianhai Shenzhen-Hong Kong Modern Service Industry Cooperation Zone) is expected to be a magnet for yuan trading and other financial services in China with strong government support for reforms and innovation in Qianhai’s financial sector to serve as an experimental and demonstrative window for the opening-up of China’s financial sector.

this will provide us much business potential to grow our time-sensitive financial printing as well as our 8¼8 BizButler outlets in China.

In addition to servicing MNCs in Qianhai, especially those in financial, logistics and IT industries, Xpress will also be able to enjoy tax benefits including a 15 percent preferential corporate profit tax rate in the zone. Our employees will also be exempted from personal income tax.

The Group is also forging ahead with its 8¼8 Biz Butler franchising plans for the region – which will be expected to start in Southeast Asia in the coming financial year.

Brighter Outlook

asia, with its rapid economic growth, has become the key investment destination for global companies. Many Multinational Corporations (MNCs) are setting up regional headquarters, especially in China and the emerging markets in Southeast Asia.

With our strong track record and extensive network in key Asian markets, we are thus well-positioned to take advantage of these positive trends by further expanding our range of service offerings throughout key markets in China as well as in the ASEAN region.

We have already initiated our 8¼8 BizButler concept which is designed to tap on market demand for one-stop professional business services as well as print-related services for the convenience of busy executives and consumers who desire prompt services in easily accessible locations.

To accelerate the expansion of this concept, we will transform our chain of 38 print stations spanning the asia Pacific region, including Malaysia, Australia, Vietnam, Hong Kong and China into 8¼8 BizButler stations.

all these efforts, we believe, will contribute to brighter prospects for the Group.

We will like to extend our gratitude to our Non-Executive Chairman, Dr Wang Kai Yuen, for his strong dedication and valuable guidance to the Group. dr wang will be stepping down as the Chairman after 11 years of distinguished service.

11

our geograPHiCal presenCe

“For Xpress to thrive in this challenging industry, it has to be a leader in the print industry regionally. We have presence in 19 cities across the Asia-Pacific region, where our Print Stations and On-Site Print Stations are linked to a robust network of print facilities”.

“Our network of Print Stations is strategically linked to print factories located within a 15 – 18 hour radius road transport distance”.

From traditional print to new media leadership


BOARD OF DIRECTORS

Dr Wang Kai Yuen Independent and Non-Executive Chairman Mr Fong Kah Kuen @ Foong Kah Kuen Chief Executive Officer / Executive Director Mr Darlington Tseng Te-Lin Executive Director Mr victor Khoo Choon Meng Executive Director Mr Christopher Chong Meng TakIndependent and Non-Executive Director(Resigned on 30 November 2012) Mr Sam Chong Keen Independent and Non-Executive Director

Dr Lee Tsu-Der Non-Independent and Non-Executive Director(Resigned on 13 September 2013) Mr Jerry Lee Yin Chia Non-Independent and Non-Executive Director AUDIT COMMITTEE

Dr Wang Kai Yuen (Chairman)

Mr Jerry Lee Yin Chia Mr Sam Chong Keen

NOMINATING COMMITTEE


Mr Sam Chong KeenMr Jerry Lee Yin Chia REMUNERATION COMMITTEE

Mr Sam Chong Keen (Chairman)

Dr Wang Kai YuenMr Fong Kah Kuen @ Foong Kah Kuen

INvESTMENT AND RISK MANAGEMENT COMMITTEE


Mr Sam Chong KeenMr Jerry Lee Yin Chia SECRETARY

Ms Yeo Poh Noi Caroline REGISTERED OFFICE

No 1 Kallang Way 2ACommunications Techno Centresingapore 347495tel: (65) 6880 2828 Fax: (65) 6880 2998 Website: www.xpress.sg SHARE REGISTRAR

Boardroom Corporate & Advisory Services Pte. Ltd.50 Raffles Place #32-01 Singapore Land Tower singapore 048623 AUDITORS

Foo Kon Tan Grant Thornton LLP, Certified Public accountants47 Hill Street #05-01 Chinese Chamber of Commerce Buildingsingapore 179365

AUDIT PARTNER-IN-CHARGE

ms ang soh mui (Appointment since financial year ended 31 July 2013) PRINCIPAL BANKERS

The Bank of East Asia, LimitedUnited Overseas Bank LimitedCompany Registration No. 199902058Z

Corporate iNformaTioN


CORPORATE GOVERNANCE

The Board of Directors (the “Board”) is committed to enhancing long-term shareholder value and in ensuring high standards of corporate governance to protect the interests of shareholders and adheres to the principles and guidelines set out in the Code of Corporate Governance 2005 (the “Code”).

This report outlines the Company’s corporate governance practices with specific reference made to the Code. The Board is pleased to confirm that the Company has complied with the Code.

A. Board Matters

The Board’s Conduct of its Affairs

Principle 1: Every company should be headed by an effective Board to lead and control the company. The Board is collectively responsible for the success of the company including the enhancement of long- term shareholder value. The Board works with Management to achieve this and Management remains accountable to the Board.

The primary function of the Board is to protect the assets and to enhance the long-term value of the Company for its shareholders. To this end the Board helps sets objectives and strategy and approves policies and performance targets. The Board also oversees the processes for evaluating the adequacy of internal controls, risk management, financial reporting, performance evaluation, compliance and other monitoring and feedback responsibilities. Major acquisitions are also approved at Board level.

To facilitate effective management, certain functions have been delegated by the Board to various Board Committees. The Board Committees operate under clearly defined terms of reference. The Chairman of the respective Committees will report to the Board on the outcome of the Committee meetings.

The Board conducts regular scheduled meetings during the year. Ad-hoc meetings are convened when circumstances require. Article 99(2) of the Company’s Articles of Association permits meetings of the Directors to be conducted by means of telephone conference or other methods of simultaneous communication by electronic or telegraphic means.

A record of the Directors’ attendances at Board and Board Committee meetings during the financial year ended 31 July 2013 is disclosed as follows:

Name of Director

Board Audit Committee Nominating CommitteeRemuneration

Committee

Investment and Risk Management Committee

No. of meetings Attendance





Dr Wang Kai Yuen

7 7 6 6 2 2 1 1 1 1

Mr Fong Kah Kuen

7 7Not

ApplicableNot

ApplicableNot

ApplicableNot

Applicable1 1

Not Applicable

Not Applicable

Mr Sam Chong Keen

7 7 6 6Not

ApplicableNot

Applicable1 1 1 1

Dr Lee Tsu-Der (resigned on 13/9/2013)

7 0Not

ApplicableNot

ApplicableNot

ApplicableNot

ApplicableNot

ApplicableNot

ApplicableNot

ApplicableNot

Applicable

Mr Jerry Lee Yin Chia

7 6 6 6 2 2Not

ApplicableNot

Applicable1 1

Mr Khoo Choon Meng

7 7Not

ApplicableNot

ApplicableNot

ApplicableNot

ApplicableNot

ApplicableNot

ApplicableNot

ApplicableNot

Applicable

Mr Darlington Tseng Te-Lin

7 7Not

ApplicableNot

ApplicableNot

ApplicableNot

ApplicableNot

ApplicableNot

ApplicableNot

ApplicableNot

Applicable

Mr Christopher Chong Meng Tak (resigned on 30/11/2012)

7 1 6 1 2 1Not

ApplicableNot

ApplicableNot

ApplicableNot

Applicable


Board Composition and Guidance

Principle 2: There should be a strong and independent element on the Board, which is able to exercise objective judgment on corporate affairs independently, in particular, from Management. No individual or small group of individuals should be allowed to dominate the Board’s decision making.

Two out of the total six Directors on the Board are independent, in accordance with the Code’s definition of “independent director” and guidance as to the existence of relationships which would deem a director not to be independent.

The Board comprises the following members:

Director Function Appointment Date

Dr Wang Kai Yuen Chairman of the Board Non-Executive, Independent

25 March 2002 8 June 1999

Sam Chong Keen Non-Executive, Independent 16 February 2008 Mr Sam was re-designated as an independent and non-executive director of the Company with effect from 21 November 2012

Fong Kah Kuen, Chief Executive Officer (“CEO”)

Executive Director 16 May 2010

Darlington Tseng Te-Lin Executive Director 1 March 2008

Khoo Choon Meng Executive Director 1 March 2008

Jerry Lee Yin Chia Non-Executive, Non-Independent 15 December 2004

The Company has a good balance of Directors who have extensive business, financial, accounting and management experience. The profiles of the Directors are found in the “Board of Directors” section of this annual report. The diverse and objective judgment of the Independent and Non-Executive Directors on corporate affairs and their experience and contributions are valuable to the Company.

The independent and non-executive Directors participate actively during Board meetings. In addition to providing constructive advice to management on pertinent issues affecting the affairs and business of the Group, they also review management’s performance in meeting goals and objectives. The Company has benefited from management’s access to its Directors for guidance and exchange of views both within and outside of the meetings of the Board and Board Committees. The independent non-executive Directors communicate amongst themselves and, as noted above, with the Company’s auditors and senior managers independently.

The Board’s structure, size and composition are reviewed annually by the Nominating Committee who is of the view that the size of the Board in FY2013 was appropriate, taking into account the nature and scope of the Group’s operations, to facilitate effective decision making.

The Nominating Committee is satisfied that the Board comprises Directors who, as a group, provide core competencies such as accounting, finance, business and management experience, industry knowledge, strategic planning experience and customer-based experience and knowledge to lead the Company effectively.



Chairman and Chief Executive Officer

Principle 3: There should be a clear division of responsibilities at the top of the company – the working of the Board and the executive responsibility of the company’s business – which will ensure a balance of power and authority, such that no one individual represents a considerable concentration of power.

The Company practices a clear division of responsibilities between the Chairman and the CEO since its listing on the Singapore Exchange Securities Trading Limited (“SGX-ST”) in 1999. This ensures an appropriate balance of power between the Chairman and the CEO and thereby allows for increased accountability and greater capacity of the Board for independent decision-making. The Chairman and the CEO are not related to each other.

The primary role of the Chairman, who performs a non-executive function, is to lead the Board effectively in all aspects, promote high standards of corporate governance and ensure that the Directors receive accurate, timely and clear information. The Chairman also encourages regular and effective communications between the Board and Management, among the Directors, and the shareholders.

The CEO implements the Board’s strategic directions and ensures compliance with regulatory standards and corporate governance guidelines. The CEO also manages the daily running of the Group’s operations. The CEO is assisted by an Executive Committee.

Board Membership

Principle 4: There should be a formal and transparent process for the appointment of new directors to the Board.

The Nominating Committee (“NC”) is established for the purposes of ensuring that there is a formal and transparent process for all Board appointments. The NC comprises the following members, the majority of whom are independent non-executive Directors:-

Dr Wang Kai Yuen (Chairman)Mr Sam Chong Keen (Member)Mr Jerry Lee Yin Chia (Member)

The NC has adopted written terms of reference defining its membership, administration and duties. Some of the duties and responsibilities of the NC include:

a) to make recommendations to the Board on all board appointments having regard to the Director’s contribution and performance;

b) determining annually whether or not a Director is independent; and

c) deciding whether a Director is able to and has adequately carried out his duties as a Director of the Company in particular where the Director concerned has multiple board representations.

The NC has proposed to the Board and the Board has adopted the following policies:

a. The Chairman should be an Independent or Non-Executive Director;b. That at least half the Board shall comprise of Non-Executive Directors;c. The least one-third of the Board shall comprise of Independent Directors;d. The NC shall have the right to appoint such consultants as it deems necessary during a search for new

Directors; ande. The implementation of a succession plan.



The NC notes that:-

• TheChairmanisanIndependentDirector;and• IndependentDirectorscompriseone-thirdoftheBoard.

Each member of our NC shall abstain from voting on any resolution in respect of his re-nomination as a Director.

No new Director was appointed by the Company during the financial year under review. In the event a new Director had been required the search would have been through search companies, contacts and recommendations so that the Company could cast its net as wide as possible for the right candidates. In the event a new Director had been appointed, this Director would have had a letter setting out his duties and obligations; undergone an orientation program with respect to the Group’s businesses and governance practices; and met with management to gain a better understanding of the Group’s business operations.

The Company’s Articles of Association requires one-third of the Directors or the number nearest to one-third, other than the Managing Director to retire by rotation at every Annual General Meeting (“AGM”).

Board Performance

Principle 5: There should be a formal assessment of the effectiveness of the Board as a whole and the contribution by each director to the effectiveness of the Board.

The NC assesses the performance and effectiveness of the Board and the contribution of individual Directors. The assessment process involves evaluation against a set of objective, quantitative and qualitative performance criteria. The performance criteria includes: the evaluation of the size and composition of the Board; Director access to information; Board accountability and performance against set targets, objectives and expected standards of conduct; and financial targets such as return on assets, return on equity and the Company’s share price performance. The Board, however, notes that the financial indicators provide only a snapshot of the Company’s performance, and do not fully reflect on- going risk or measure the sustainable long-term wealth and value creation of the Company.

The NC notes that some Directors have multiple board representations. Notwithstanding this, the NC is satisfied that each Director is able to and has been adequately carrying out his duties as a Director of the Company.

The Board and the NC have endeavoured to ensure that Directors appointed to the Board possess the experience, knowledge and expertise critical to the Group’s business.

Access to information

Principle 6: In order to fulfill their responsibilities, Board members should be provided with complete adequate and timely information prior to Board meetings and on an on-going basis.

Management provides the Board with adequate and timely information as well as a review of the Group’s performance prior to the Board meetings. All Directors have separate and independent access to the Group’s senior management and Company Secretary, should they have any queries on the affairs of the Group. Independent and non-executive Directors can and do visit various operational sites often with little warning. Independent Directors have spoken to select customers, suppliers and middle management staff. Independent Directors also meet the professional advisers of the Company both with and without management.

Should the Directors, whether as a group or individually, require independent professional advice, the Company will bear the expenses incurred if such advice is required to enable the Directors to discharge their duties professionally.



Prior to each Board and Board committee meeting, notice of meeting is issued to the Board and Board Committee members containing information on the agenda and documents to be reviewed. The Company Secretary attends all Board meetings and is responsible for ensuring the Board procedures are followed and that applicable rules and regulations (in particular the Companies Act and the SGX-ST Listing rules) are complied with.

B. Remuneration Matters

Procedures for Developing Remuneration Policies

Principle 7: There should be a formal and transparent procedure for developing policy on executive remuneration and for fixing the remuneration packages of individual directors. No director should be involved in deciding his own remuneration.

The Remuneration Committee (“RC”) is established for the purposes of ensuring that there is a formal and transparent process for developing policy and fixing the remuneration packages of individual Directors. The RC now comprises the following three members, the majority of whom are independent non-executive Directors:

Mr Sam Chong Keen (Chairman)Dr Wang Kai Yuen (Member)Mr Fong Kah Kuen (Member)

The RC has adopted written terms of reference defining its membership, administration and duties. The duties and responsibilities of the RC include:

a) recommending to the Board a framework of remuneration for the Board and key executives;

b) recommending to the Board a framework of remuneration for the Board and key executives; determining specific remuneration packages which should cover all aspects of remuneration including but not limited to Directors’ fees, salaries, allowances, bonuses, options and benefits-in-kind for each Executive Director, the CEO and senior management including but not limited to senior executives, divisional Directors and those reporting directly to the Managing Director, Chairman, CEO and employees related to the executive Directors and controlling shareholders of the Group;

c) reviewing and recommending to the Board the terms of renewal of service contracts of Directors;

d) administering the Company’s Executive Share Option Scheme;

e) appointing or retaining such professional consultancy firm as the RC may deem necessary to enable it to discharge its duties hereunder satisfactory; and

f) considering the various disclosure requirements for Directors’ remuneration, particularly those required by regulatory bodies such as the SGX-ST, and ensuring that there is adequate disclosure in the financial statements to ensure and enhance transparency between the Company and relevant interested parties.

The RC’s recommendations would be made in consultation with the Chairman of the Board and submitted for endorsement by the entire Board.

No Director has or shall participate in decisions on his own remuneration.



Level and Mix of Remuneration

Principle 8: The level of remuneration should be appropriate to attract, retain and motivate the directors needed to run the company successfully but the company should avoid paying more for this purpose. A significant proportion of executive directors’ remuneration should be structured so as to link rewards to corporate and individual performance.

The Company’s remuneration policy is to provide packages which will reward performance and attract, retain and motivate Directors and key executives to run the business successfully. In setting the remuneration packages, the RC takes into consideration the remuneration and employment conditions within the country, the same industry and in comparable companies, and takes into account the business segment’s and the individual’s performance.

The executive Directors do not receive Directors’ fees. The remuneration for the executive Directors and the key executives comprises primarily a basic salary component and a variable component which is the bonuses, based on the performance of the Group as a whole and their individual performance. Executive Directors may also be given shares from the Company’s Executives’ Share Option Scheme.

The non-executive Directors receive Directors’ fees, in accordance with their contributions, taking into account factors such as responsibilities, effort and time spent for serving on the Board and Board Committees. The Board may, if it considers necessary, consult experts on the remuneration of non-executive Directors and would recommend the remuneration of the non-executive Directors for approval at the AGM. The non-executive Directors’ fees were derived using the fee structure as follows:

Fee structure for non-executive Directors

$

Basic fee 33,000

Board chairmanship 25,000

AC chairmanship 10,000

Other committee chairmanship 6,000

AC membership 4,000

Other committee membership 2,000



Disclosure on Remuneration

Principle 9: Each company should provide clear disclosure of its remuneration policy, level and mix of remuneration and the procedure for setting remuneration in the company’s annual report. It should provide disclosure in relation to its remuneration policies to enable investors to understand the link between remuneration paid to directors and key executives, and performance.

A breakdown showing the level and mix of each individual Director’s remuneration for the financial year ended 31 July 2013 is disclosed in the table below:

Executive Directors Remuneration band ($) Salary (%) # Bonus (%) Total (%)

Fong Kah Kuen $500,000 and above 100 0 100

Nil $250,000 to $499,999 – – –

Darlington TsengBelow $250,000

100 0 100

Khoo Choon Meng 100 0 100

Non-Executive Directors Fees

Dr Wang Kai Yuen 82,000

Dr Lee Tsu-Der 33,000

Jerry Lee Yin Chia 39,000

Sam Chong Keen 45,000

Total 199,000

Number of Key Management who are also immediate family members of the CEO in remuneration bands:

Remuneration band 2013 Salary (%) # Bonus (%)

Below $250,000 2 100 0

There was no immediate family member of a Director or the CEO whose remuneration exceeded S$150,000 during the financial year other than the above.

# includes leave pay, shared-based payments, car benefits, employer’s CPF.

Details of share options granted to the Directors are set out in the Directors’ Report of this Annual Report.

The Company encourages independent Directors to invest in the Company. The shareholdings of the individual Directors of the Company are set out on page F 01 of this Annual Report. None of the independent Directors hold shares in the subsidiaries of the Company.

The Company has not disclosed the remuneration of its key executives as it is not in the best interests of the Company and the employees to disclose such details due to the sensitive nature of such information.



C. Accountability and Audit

Accountability

Principle 10: The Board should present a balanced and understandable assessment of the company’s performance, position and prospects.

One of the Board’s principal duties is to enhance and protect the long-term value and returns to the shareholders of the Company. The accountability of the Board to the shareholders is demonstrated through the presentation of the periodic financial statements, including powerpoint presentations, as well as the timely announcements and news releases of significant corporate developments and activities so that the shareholders can have a detailed explanation and balanced assessment of the Group’s financial position and prospects.

Management presents to the Audit Committee the interim and full-year results. The Audit Committee reviews the results and recommends them to the Board for approval. The Board approves the results and authorizes the release of the results to the SGX-ST and the public via SGXNET as required by SGX-ST Listing Manual.

In line with the requirements of SGX-ST, negative assurance confirmations on interim financial results were issued by the Board confirming that to the best of its knowledge, nothing had come to the attention of the Board which may render the Company’s quarterly results to be false or misleading in any material aspect.

Audit Committee

Principle 11: The Board should establish an Audit Committee (“AC”) with written terms of reference which clearly set out its authority and duties.

The AC comprises the following three members, the majority of whom are independent non-executive Directors:-

Dr Wang Kai Yuen (Chairman)Mr Jerry Lee Yin Chia (Member)Mr Sam Chong Keen (Member)

The profile of each member of the AC is found in the “Board of Directors” section of this annual report. The Board is of the view that the members of the AC are eminently qualified; having accounting or related financial management expertise, industry experience or such other experience as the Board interprets such qualification, to discharge their responsibilities.

As a sub-committee of the Board of Directors, it assists the Board in discharging their responsibility to maximize long- term shareholder value, safeguard the Group’s assets, maintain adequate accounting records, and develop and maintain effective systems of internal control, with the overall objective of ensuring that Management creates and maintains an effective control environment in the Group. The AC will also review and supervise the internal audit functions of the Group.

The AC will provide a channel of communication between our Board, our Management and our external auditors on matters relating to audit.

The Company confirms that it has complied with Rules 712 and 715 of the Listing Manual in engaging Foo Kon Tan Grant Thornton LLP, registered with the Accounting and Corporate Regulatory Authority, as the external auditors of the Company and its subsidiaries. Audit fees paid/payable to the external auditors of the Company amounted to $170,000 (2012: $170,000) for the financial year ended 31 July 2013. There were no non-audit services fee paid to the external auditors of the Company for the financial year ended 31 July 2013.



The AC has adopted written terms of reference defining its membership, administration and duties. Duties and responsibilities of the AC include:

a) review with external auditors the audit plan, their evaluation of the Group’s system of internal accounting controls, their letter to Management and Management’s responses;

b) review the interim and annual financial statements and balance sheet and income statements before submission to the Board for approval, focusing in particular on changes in accounting policies and practices, major risk areas, significant adjustments resulting from the audit, compliance with accounting standards and compliance with the Listing Manual and any other relevant statutory or regulatory requirements;

c) review the scope and results of the audit and its cost effectiveness and the independence and objectivity of the external auditors. Where the auditors also provide a substantial volume of non-audit services to the Company, the AC would keep the nature and extent of such services under review, seeking to balance the maintenance of objectivity and value for money;

d) review the internal control procedures and ensure co-ordination between the external auditors and Management, and review the assistance given by our Management to the auditors, and discuss problems and concerns, if any, arising from the interim and final audits, and any matters which the auditors may wish to discuss in the absence of our Management at least annually;

e) review and discuss with the external auditors any suspected fraud or irregularity, or suspected infringement of any relevant laws, rules or regulations, which has or is likely to have a material impact on our Group’s operating results or financial position, and our Management’s response;

f) consider the appointment or re-appointment of the external auditors and matters relating to the resignation or dismissal of the auditors;

g) review interested person transactions (if any) falling within the scope of Chapter 9 of the Listing Manual;

h) review potential conflicts of interest, if any;

i) undertake such other reviews and projects as may be requested by the Board, and will report to the Board its findings from time to time on matters arising and requiring the attention of the AC; and

j) Generally undertake such other functions and duties as may be required by statute or the Listing Manual, or by such amendments as may be made thereto from time to time.

In the event that any Director has a personal material interest in any contract or proposed contract or arrangement, he will abstain from reviewing that particular transaction or voting on the particular resolution.

Apart from the duties listed above, the AC shall commission and review the findings of internal investigations into matters where there is any suspected fraud or irregularity, or failure of internal controls or infringement of any Singapore law, rule or regulation which has or is likely to have a material impact on our Company’s operating results and/or financial position.

In performing its functions:-

(a) the AC has the right to commission any report that it deems responsible and required in discharging the duties of the AC; and

(b) the AC has explicit authority to investigate any matter within its terms of reference, having full access to and co-operation by Management and full discretion to invite any Director or executive officer to attend meetings, and reasonable resources to enable it to discharge its function properly.



Whistle-Blowing Policy

In accordance with the Code, the AC has in place a ‘whistle-blowing’ policy to provide arrangements whereby concerns on financial improprieties or other matters raised by ‘whistle-blowers’ may be investigated and appropriate follow up action taken. Under such whistle-blowing procedures, employees are free to submit complaints confidentially or anonymously to the Chairman of the AC who was well known to many employees and easily accessible. All complaints are to be treated as confidential and are to be brought to the attention of the AC. Assessment, investigation and evaluation of complaints are conducted by or at the direction of the AC. If it deems appropriate, independent advisors are engaged at the Group’s expense. Following investigation and evaluation of a complaint, the AC will then decide on recommended disciplinary or remedial action, if any. The action so determined by the AC to be appropriate shall then be brought to the Board or to the appropriate senior executive staff for authorisation or implementation respectively.

Internal Controls

Principle 12: The Board should ensure that Management maintains a sound system of internal controls to safeguard the shareholders’ investments and the company’s assets.

The Board ensures that Management maintains a sound system of internal controls to safeguard shareholders’ interest and the Group’s assets, and to manage risks. The Board also acknowledges that no cost effective internal control system will preclude all errors and irregularities. A system is designed to manage rather than eliminate the risk of failure to achieve business objectives, and can provide only reasonable and not absolute assurance against material misstatement or loss.

With the assistance of the Internal Auditors (see “Internal Audit below”) and through the AC, the Board reviews the effectiveness of the key internal controls, provides its perspective on management control and ensures that the necessary corrective actions are taken on a timely basis. There are procedures in place for both the internal and external auditors to report independently conclusions and recommendations to Management and the AC.

Investment and Risk Management Committee

Focusing on the guidance of Principle 12 of the Code, the Investment and Risk Management Committee (“IRMC”) was established in 2008 to assist the Board in fulfilling its oversight responsibilities in investment and risk management. The IRMC comprises the following three members, two of whom are independent non-executive Directors:-

Dr Wang Kai Yuen (Chairman)Mr Sam Chong Keen (Member)Mr Jerry Lee Yin Chia (Member)

The IRMC has adopted written terms of reference defining its membership, administration and duties. The duties and responsibilities of the IRMC include:

a) assisting the Board to set the risk-return profile of the Group;

b) considering, evaluating, reviewing and, if deemed fit, recommending to the Board proposed investments, acquisitions and disposal of assets of the Group exceeding a defined threshold amount, currently set at S$200,000 per unbudgeted investment or divestment;

c) reviewing and recommending to the Board proposed investments and acquisitions of the Group which do not fall within the Group’s core businesses but which are considered strategic investments for the long-term prospects of the Group;

d) reviewing, evaluating and approving the risk profile and risk mitigation strategies of each investment;



e) reviewing, evaluating and approving procedures governing the Group’s investment activities and ensuring all decisions comply with all applicable laws, regulations and guidelines relating thereto;

f) monitoring the processes of investment management to ensure that they are being implemented in a professional and controlled manner according to plan;

g) reviewing the adequacy and completeness of the Group’s risk management processes and recommend improvements, where deemed necessary; and

h) reviewing the Company’s key material risks that have been identified by the risk management process and whether the response action plans being developed by Management are adequate to manage these risks at an acceptable level.

In addition, the Group has also put in place appropriate risk management policies and processes to evaluate the operating, investment and financial risks of the Group. In evaluating a new investment proposal or business opportunity, several factors will be considered by Management and the Board before a decision is being made. These factors, which are essentially designed to ensure that the rate of returns commensurate with the risk exposure taken, including evaluating (i) return on investment; (ii) the pay back period; (iii) cash flow generation and certainty of cash flow generation from the operation; (iv) potential for growth; (v) specific risk; (vi) market and sector risk; and (vi) other risk such as country stability.

The main areas of financial risks faced by the Group are foreign exchange risk, interest rate risk, credit risk and liquidity risk. Further details of the financial risks and how the Group manages them are set out in the notes to the financial statements in this annual report.

Based on the various management controls put in place, the actions taken by the group on the recommendations made by auditors, the on-going review of and the continuing efforts at enhancing controls and processes, the Board and the Audit Committee are of the opinion that the Group’s internal controls, addressing financial, operational and compliance risks, were adequate as at 31 July 2013.

Internal Audit

Principle 13: The Company should establish an internal audit function that is independent of the activities it audits.

The Company has outsourced its internal audit function. The scope of the internal audit function is to:

• reviewtheeffectivenessoftheGroup’sinternalcontrols;

• provideassurancethatkeybusinessandoperationalrisksareidentifiedandmanaged;

• internalcontrolsareinplaceandfunctioningasintended;and

• operationsareconductedinaneffectiveandefficientmanner.

The internal auditors are able to meet the standards set by nationally or internationally recognized bodies, including the Standards for the Professional Practice of Internal Auditing set by The Institute of Internal Auditors. The annual internal audit plan is prepared in consultation with, but independently of Management, and submitted to the AC for approval.

The internal auditors report directly to the AC.



Communication with Shareholders

Principle 14: Companies should engage in regular, effective and fair communication with shareholders.

The Company endeavours to communicate regularly, effectively and fairly with its shareholders. Timely, as well as, detailed disclosure in plain English is made to the public in compliance with SGX-ST guidelines. The Company does not practice selective disclosure and endeavours not to use overly technical or legal language. All price sensitive information is announced on the SGXNET on a timely basis.

Shareholders and other investors are provided regularly with:

1. An Annual Report;

2. Quarterly financial results and other financial announcements as required;

3. Press releases and other announcements on important developments;

4. Powerpoint Presentations;

5. A website and portal (www.xpress.com.sg); and

6. The presence of all members of Senior Management at the AGM.

Greater Shareholder Participation

Principle 15: Companies should encourage greater shareholder participation at AGMs, and allow shareholders the opportunity to communicate their views on various matters affecting the company.

All registered shareholders are invited to participate and given the right to vote on resolutions at general meetings. Every matter requiring shareholders’ approval is proposed as a separate resolution. Each item of special business included in the notice of the meeting is accompanied, where appropriate, by an explanation for the proposed resolution. Proxy form is sent with notice of general meeting to all shareholders. If any shareholder is unable to attend the general meeting in person, he is allowed to appoint up to two proxies to attend and vote on his behalf. The Company also allows CPF investors to attend general meetings as observers. Voting in absentia by mail, facsimile or e-mail is currently not allowed as such voting methods would need to be cautiously evaluated for feasibility to ensure that there is no compromise to the integrity of the information and the authentication of the shareholders’ identity.

The Board, Chairman of the AC, NC, RC and management are present at general meetings to address questions that shareholders may have concerning the Group. The Company’s external auditors are also present to address any relevant queries relating to the conduct of audit and the preparation and content of the auditors’ report.

D. Dealings In Securities

The Company has adopted an Internal Compliance Code on Securities Transactions to Directors and key employees (including employees with access to price-sensitive information to the Company’s shares by these persons) of the Group setting out the code of conduct on transactions in the Company’s shares by these persons, the implications of insider trading and the recommendations of the Best Practices Guide issued by the SGX-ST.

The Internal Compliance Code also prohibits dealings in securities of the Company by Directors and employees during the period commencing at least 4 weeks before the announcement of the half-year and full-year financial results, and two weeks before the announcement of the first and third quarter results and ending on the date of the announcement.



E. Interested Person Transaction

The Board had reviewed all interested person transactions for the financial year ended 31 July 2013 and was satisfied that the transactions were conducted at arm’s length and do not require any immediate announcement or obtain shareholder approval as defined under the Listing Rules.

F. Material Contracts

Pursuant to Rule 1207(8) of the Listing Manual, the Company confirms that there was no material contract entered into between the company and its subsidiaries which involved the interests of any director or controlling shareholder, either still subsisting at the end of the financial year or if not then subsisting, which was entered into since the end of the previous financial year.


fInAnCIAL CONTENTsF 01 Directors’ report

F 07 Statement by directors

F 08 Independent auditor’s report

F 09 Statements of financial position

F 10 Consolidated income statement

F 11 Consolidated statement of comprehensive income

F 12 Consolidated statement of changes in equity

F 14 Consolidated statement of cash flows

F 15 Notes to the financial statements

F 64 Statistics of Shareholdings

F 65 Shareholders’ Information

F 66 Notice of Annual General Meeting

F 69 Proxy Form

FROM TRADITIONAL PRINT TO NEW MEDIA LEADERSHIP F 01

DIRECTORS’ REPORTfor the financial year ended 31 July 2013

The directors submit this annual report to the members together with the audited consolidated financial statements of the Group and statement of financial position of the Company for the financial year ended 31 July 2013.

DIRECTORS

The directors in office at the date of this report are:

Dr Wang Kai Yuen (Chairman)Fong Kah Kuen @ Foong Kah Kuen (Chief Executive Officer)Darlington Tseng Te-LinKhoo Choon Meng Sam Chong KeenJerry Lee Yin Chia

ARRANGEMENTS TO ENABLE DIRECTORS TO ACQUIRE SHARES OR DEBENTURES

Except as disclosed under the “Directors’ Interests” section of this report, neither at the end of, nor at any time during the financial year, was the Company a party to any arrangement whose objects are, or one of whose objects is, to enable the directors of the Company to acquire benefits by means of the acquisition of shares in or debentures of the Company or any other body corporate.

DIRECTORS’ INTERESTS

According to the Register of Directors’ Shareholdings kept by the Company for the purposes of Section 164 of the Companies Act, Chapter 50, particulars of interests of directors who held office at the end of the financial year (including those held by their spouses or infant children) in shares, debentures, warrants and share options of the Company and its related corporations (other than wholly owned subsidiaries) are as follows:

Holdings in the name of the director,spouse and/or infant children

At beginning At endThe Company of the year of the yearOrdinary shares fully paidDr Wang Kai Yuen 845,000 845,000Fong Kah Kuen @ Foong Kah Kuen * 30,081,000 62,081,000Darlington Tseng Te-Lin 11,153,000 11,153,000Khoo Choon Meng 360,000 360,000

XPRESS HOLDINGS LTD | ANNUAL REPORT 2013F 02

DIRECTORS’ INTEREST IN SHARES OR DEBENTURES (CONT’D)

Other holdings in which the directoris deemed to have an interest

At beginning At endof the year of the year

The CompanyOrdinary shares fully paidFong Kah Kuen @ Foong Kah Kuen * 77,539,000 45,539,000Dr Lee Tsu-Der ** (Resigned on 13 September 2013) 137,943,313 137,943,313

Options to subscribe for ordinary sharesexercisable between 11.12.2004 and 10.12.2013 atan exercise price of $0.0733 per share

Khoo Choon Meng 200,000 200,000


Khoo Choon Meng 300,000 300,000


Darlington Tseng Te-Lin 2,000,000 2,000,000Khoo Choon Meng 2,000,000 2,000,000


Dr Wang Kai Yuen 2,000,000 2,000,000Dr Lee Tsu-Der (Resigned on 13 September 2013) 2,000,000 2,000,000Jerry Lee Yin Chia 2,000,000 2,000,000Sam Chong Keen 2,000,000 2,000,000


Darlington Tseng Te-Lin 2,000,000 2,000,000Khoo Choon Meng 2,000,000 2,000,000

* By virtue of Section 7 of the Act, Mr Fong Kah Kuen @ Foong Kah Kuen is deemed to have an interest in the 45,539,000 shares held by K K Fong Holdings Pte Ltd.

** By virtue of Section 7 of the Act, Dr Lee Tsu-Der is deemed to have an interest in the 137,943,313 shares held by Triumph Development Holdings Limited.

By virtue of Section 7 of the Act, Mr Fong Kah Kuen @ Foong Kah Kuen and Dr Lee Tsu-Der are deemed to have interests in the shares of all the wholly-owned subsidiaries of the Company.

There were no changes in any of the above mentioned interests in the Company between the end of the financial year and 21 August 2013.


From traditional print to new media leadership F 03

DIRECTORS’ CONTRACTUAL BENEFITS

Except for salaries, bonuses and fees and those benefits that are disclosed in this report and in Note 19(b) to the financial statements, since the end of the last 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.

SHARE OPTIONSXPRESS HOLDINGS EXECUTIVES’ SHARE OPTION SCHEME

a) Pursuant to the approval by the members of the Company at the Extraordinary General Meeting held on 25 June 2001, the Company adopted Xpress Holdings Executives’ Share Option Scheme 2001 (the “SOS”). It provides an opportunity for the executives of the Group who have contributed significantly to the growth and prosperity of the Group to participate in the equity of the Company.

b) According to the revised Terms of Reference of the Remuneration Committee (“RC”), the SOS is administered by the RC. The members of the RC are as follows:

Sam Chong Keen (Chairman)Dr Wang Kai Yuen (Member)Mr Fong Kah Kuen @ Foong Kah Kuen (Member)

c) The number of options available under the SOS shall not exceed 15% of the total issued shares of the Company on the day preceding the relevant date of grant.

Options granted under the SOS to full-time employees and executive directors of the Group shall be subject to an option period of 10 years, commencing from the date of grant and expiring on the day immediately preceding the 10th anniversary of the date of grant. The non-executive directors of the Group shall be subject to an option period of 5 years commencing from the date of grant and expiring on the day immediately preceding the 5th anniversary of the date of grant. The options are exercisable on the first anniversary of the date of grant. Unissued ordinary shares of the Company under options are as follows:

Cancelled/lapsed/

Granted forfeited ExercisedDate of Balance at during during during Balance at Exercise Expirygrant 1.8.2012 the year the year the year 31.7.2013 price date

30.06.2003 400,000 - (400,000) - - $0.0550 29.06.201311.12.2003 281,000 - - - 281,000 $0.0733 10.12.201304.12.2006 1,800,000 - - - 1,800,000 $0.1783 03.12.201601.03.2007 3,300,000 - - - 3,300,000 $0.1650 28.02.201710.03.2008 4,000,000 - - - 4,000,000 $0.1200 09.03.201822.09.2008 19,400,000 - (2,000,000) - 17,400,000 $0.0700 21.09.201320.10.2008 4,000,000 - - - 4,000,000 $0.0500 19.10.2018

33,181,000 - (2,400,000) - 30,781,000

Details of options granted previously in 2001, 2003, 2006, 2007 and 2008 have been disclosed in the Report of the Directors for the previous financial years.

No share options were granted during the financial years ended 31 July 2012 and 2013.

At 31 July 2013, 30,781,000 (2012 - 33,181,000) share options were exercisable.

The weighted average remaining contractual life of share options outstanding at 31 July 2013 is 2.5 (2012 - 3.4) years.



SHARE OPTIONS (CONT’D)

d) The following table summarises the information on the options granted under the Scheme to Directors and Participants as required to be disclosed under the SGX Listing Manual Rules (the “Rules”):

AggregateAggregate options

options granted Aggregate cancelled/ Aggregatesince options granted forfeited/ options

commencement Options since lapsed since exercised since Aggregateof SOS to the granted commencement commencement commencement optionsbeginning of during the of SOS to the of SOS to the of SOS to the outstanding at

Name of the financial financial end of the end of the end of the end of theparticipants year year financial year financial year financial year financial year

DirectorsDr Wang Kai Yuen 2,000,000 - 2,000,000 - - 2,000,000Darlington Tseng Te-Lin 4,000,000 - 4,000,000 - - 4,000,000Khoo Choon Meng 4,500,000 - 4,500,000 - - 4,500,000Dr Lee Tsu-Der (Resigned on 13 September 2013) 2,000,000 - 2,000,000 - - 2,000,000Christopher Chong Meng Tak (Resigned on 30 November 2012) 2,000,000 - 2,000,000 (2,000,000) - -Jerry Lee Yin Chia 2,000,000 - 2,000,000 - - 2,000,000Sam Chong Keen 2,000,000 - 2,000,000 - - 2,000,000Sub-total 18,500,000 - 18,500,000 (2,000,000) - 16,500,000

Participants who received 5% or more of total available options other than directorsEleanor Fong Sau Kwan 4,000,000 - 4,000,000 - - 4,000,000Foong Sow Peng 3,000,000 - 3,000,000 - - 3,000,000Wu Wei Dong 3,000,000 - 3,000,000 - - 3,000,000Sub-total 10,000,000 - 10,000,000 - - 10,000,000

Participants who received 5% or less of total available options other than directorsOther employees 4,681,000 - 4,681,000 (400,000) - 4,281,000Sub-total 4,681,000 - 4,681,000 (400,000) - 4,281,000Total 33,181,000 - 33,181,000 (2,400,000) - 30,781,000

e) Other than the options granted to the controlling shareholders and their associates (as defined in the Rules) as disclosed above (namely Mr Fong Kah Kuen @ Foong Kah Kuen and Dr Lee Tsu-Der), no options have been granted since the commencement of the SOS in 2001 to the end of the financial year to the Company’s parent group employees. No employee, other than those as disclosed above, has received 5% or more of the total number of options available under the SOS. No options were granted at a discount since the commencement of the SOS in 2001 to the end of the financial year.

f) These options do not entitle the holder to participate, by virtue of such holdings, to any right to participate in any share issue of any other corporation.

g) No shares were issued during the financial year to which this report relates by virtue of the exercise of the options to take up unissued shares of the Company or any subsidiary.

Except as disclosed above, there were no unissued shares of the Company or its subsidiaries under options granted by the Company at the end of the financial year.



AUDIT COMMITTEE

The Audit Committee (“AC”) comprises the following non-executive directors:

Dr Wang Kai Yuen- ChairmanJerry Lee Yin ChiaSam Chong Keen

The AC performs the functions specified by section 201B of the Companies Act, the Listing Manual of the Singapore Exchange Securities Trading Limited (“SGX-ST”) and the Code of Corporate Governance.

These members of the AC have had many years of experience in senior management positions in both the financial and industrial sectors. They have sufficient financial management expertise and experience to discharge the AC’s functions.

The AC meets at least four times a year to perform the following key functions:

- recommends to the Board of Directors the external auditors to be nominated, approves the compensation of the external auditors, and reviews the scope and results of the audit, and its cost-effectiveness;

- reviews with the other committees, management and the external auditors, significant risk or exposures that exist and assess the steps management has taken to minimise such risks to the Company;

- reviews with the external auditors the findings of the annual audit;

- reviews with management annually:

- significant internal audit observations during the year and management’s responses;

- the effectiveness of the Company’s internal controls over management, business and technology systems practices; and

- any changes required in the planned scope of the audit plan and any difficulties encountered in the course of the audits;

- reviews legal and regulatory matters that may have a material impact on the financial statements, related exchange compliance policies, and programmes and reports received from regulators; and

- reports activities and minutes of the AC to the Board of Directors with such recommendations as the AC considers appropriate.

The Audit Committee is satisfied with the independence and objectivity of the external auditors and has recommended to the Board of Directors that the auditor, Foo Kon Tan Grant Thornton LLP, Public Accountants and Chartered Accountants, be re-appointed as auditor at the forthcoming Annual General Meeting of the Company.



INDEPENDENT AUDITOR

The independent auditor, Foo Kon Tan Grant Thornton LLP, Public Accountants and Chartered Accountants, has expressed willingness to accept re-appointment.

On behalf of the Directors

...................................................................WANG KAI YUENChairman

...................................................................FONG KAH KUENChief Executive Officer

Dated: 11 November 2013



In the opinion of the directors, the consolidated financial statements of the Group and the statement of financial position of the Company as set out on pages F 09 to F 63 are drawn up so as to give a true and fair view of the state of affairs of the Group and of the Company as at 31 July 2013 and the results, changes in equity and cash flows of the Group for the financial year ended on that date in accordance with the provisions of the Singapore Companies Act, Chapter 50 and Singapore Financial Reporting Standards; and 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.

The Board of Directors has, on the date of this statement, authorised these financial statements for issue.

On behalf of the Directors

...................................................................WANG KAI YUENChairman

...................................................................FONG KAH KUENChief Executive Officer

Dated: 11 November 2013

STATEmEnT by diRECTORsfor the financial year ended 31 July 2013


Report on the financial statements

We have audited the accompanying financial statements of Xpress Holdings Ltd (the “Company”) and its subsidiaries (the “Group”), which comprise the statements of financial position of the Group and the Company as at 31 July 2013, the income statement, statement of comprehensive income, statement of changes in 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.

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.

Auditor’s 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 judgment, 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.

Opinion

In our opinion, the consolidated financial statements of the Group and the statement of financial position of the Company are properly drawn up in accordance with the provisions of the Act and Singapore Financial Reporting Standards so as to give a true and fair view of the state of affairs of the Company and of the Group as at 31 July 2013 and the results, changes in equity and the cash flows of the Group for the financial 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.

Foo Kon Tan Grant Thornton LLPPublic Accountants andChartered Accountants

Singapore, 11 November 2013

InDEPEnDEnT AudiTOR’s REPORT to the members of Xpress Holdings Ltd


Group Company2013 2012 2013 2012

Note $’000 $’000 $’000 $’000

Assets Non-CurrentGoodwill 3 64,484 64,484 - -Plant and equipment 4 12,108 13,708 387 192Subsidiaries 5 - - 76,487 76,487Amounts due from subsidiaries 6 - - 23,792 22,001Available-for-sale financial asset 7 7,657 7,657 7,642 7,642Project receivables 9 8,265 8,765 - -

92,514 94,614 108,308 106,322CurrentInventories 8 4,162 1,056 - -Trade receivables 9 37,845 36,056 - -Other receivables 9 24,986 24,662 4,553 4,381Amounts due from subsidiaries 6 - - 42,937 31,553Cash and cash equivalents 10 6,362 6,260 4,285 5,008

73,355 68,034 51,775 40,942Total assets 165,869 162,648 160,083 147,264

Equity Capital and reservesShare capital 11 105,090 100,590 105,090 100,590Reserves 12 36,155 36,850 16,398 15,269Equity attributable to owners of the Company 141,245 137,440 121,488 115,859Non-controlling interests 184 180 - -Total equity 141,429 137,620 121,488 115,859

LiabilitiesNon-Current Finance lease liabilities 14 499 785 309 158Deferred tax liabilities 15 20 23 20 20

519 808 329 178

CurrentTrade and other payables 16 12,744 11,308 3,041 2,388Amounts due to subsidiaries 6 - - 35,161 28,808Interest-bearing borrowings 13 11,015 12,156 - -Finance lease liabilities 14 142 739 62 29Income tax payable 20 17 2 2

23,921 24,220 38,266 31,227Total liabilities 24,440 25,028 38,595 31,405Total equity and liabilities 165,869 162,648 160,083 147,264

The accompanying notes form an integral part of these financial statements

STATEmEnTS Of fiNANCiAl POsiTiONas at 31 July 2013


Year ended Year ended31 July 2013 31 July 2012

Note $’000 $’000

Revenue 18 23,702 38,862Changes in inventories of raw materials and consumables 3,106 440Raw materials and consumables used 8 (9,429) (16,335)Depreciation of plant and equipment 4 (2,326) (2,877)Other income 19(a) 730 756Staff costs 19(b) (8,468) (9,922)Other expenses 19(c) (6,512) (15,159)Exchange gain, net 2,714 1,023Interest income 20(a) 25 87Finance costs 20(b) (861) (1,433)Profit /(Loss) before taxation 20(c) 2,681 (4,558)Income tax expense 21 - (21)Profit /(Loss) for the year 2,681 (4,579)

Profit /(Loss) for the year attributable to:Owners of the Company 2,677 (4,581)Non-controlling interests 4 2

2,681 (4,579)

Earnings/(Loss) per share (cents)

- Basic 22 0.16 (0.30)- Diluted 22 0.16 (0.30)


COnSOLIDATED iNCOmE sTATEmENTfor the financial year ended 31 July 2013


Year ended Year ended 31 July 2013 31 July 2012

$’000 $’000

Profit /(Loss) after taxation 2,681 (4,579)

Other comprehensive income, at nil tax:

Translation differences arising from translation of financial statements of foreign operations (2,711) 2,988Translation differences arising from monetary items forming part of net investments in foreign operations (661) (804)Other comprehensive (loss)/income for the year (3,372) 2,184Total comprehensive loss for the year (691) (2,395)

Total comprehensive income / (loss) attributable to:Owners of the Company (695) (2,380)Non-controlling interests 4 (15)Total comprehensive loss for the year (691) (2,395)


COnSOLIDATED STATEmEnT Of COmPREhENsiVE iNCOmEfor the financial year ended 31 July 2013


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COnSOLIDATED STATEmEnT Of ChANGEs iN EquiTyfor the financial year ended 31 July 2013

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2013 2012Note $’000 $’000

Cash flows from Operating ActivitiesProfit /(Loss) before taxation 2,681 (4,558)Adjustments for:Depreciation of plant and equipment 4 2,326 2,877Plant and equipment written off 20(c) 16 7Loss/(Gain) on disposal of plant and equipment 20(c) 61 (246)Interest income 20(a) (25) (87)Interest expense 20(b) 861 961Exchange gain on Project Receivables - (273)Fair value adjustment for Project Receivables 20(b) - 472Operating profit / (loss) before working capital changes 5,920 (847)Changes in:- Inventories (3,106) (441)- Trade and other receivables (1,431) 1,638- Trade and other payables (465) 1,913 Cash generated from operations 918 2,263 Income tax (paid) / refunded (17) 2Cash flows generated from operating activities 901 2,265

Cash flows from Investing ActivitiesInterest received 12 35Purchase of plant and equipment (Note A) (59) (1,151)Proceeds from disposal of plant and equipment 1 412 Cash flows used in investing activities (46) (704)

Cash Flows from Financing ActivitiesInterest paid (874) (961)Repayment of finance lease instalments (1,114) (1,519) Proceeds from borrowings 2,979 2,026Repayment of borrowings (3,072) (1,272)Proceeds from issue of shares 4,500 -Deposits pledged (500) 80Dividend paid to owners of the Company - (465)Cash flows generated from/(used in) financing activities 1,919 (2,111)

Net increase/(decrease) in cash and cash equivalents 2,774 (550) Cash and cash equivalents at beginning of year (4,792) (4,054)Effect of exchange fluctuations on cash held (1,252) (188)Cash and cash equivalents at end of year 10 (3,270) (4,792)

Notes:

A Plant and equipment

Plant and equipment amounting to $0.26 million (2012 - $0.50 million) was acquired through finance lease arrangements.


COnSOLIDATED STATEmEnT Of CAsh flOwsfor the financial year ended 31 July 2013


Notes to the financial statementsfor the financial year ended 31 July 2013

The financial statements of the Company and the consolidated financial statements of the Group were authorised for issue in accordance with a resolution of the Directors on 11 November 2013.

1 CORPORATE INFORMATION

Xpress Holdings Ltd is incorporated in the Republic of Singapore with its principal place of business and registered office at No. 1 Kallang Way 2A, Communications Techno Centre, Singapore 347495. The Company is listed on the Singapore Exchange Securities Trading Limited.

The principal activities of the Company are those relating to investment holding. The principal activities of significant subsidiaries are set out in Note 5 to the accompanying financial statements.

2 BASIS OF PREPARATION

The financial statements have been prepared in accordance with Singapore Financial Reporting Standards (“FRS”) including related Interpretations (“INT FRS”) promulgated by the Accounting Standards Council.

The financial statements have been prepared on the historical basis, except as disclosed in the accounting policies below.

The financial statements are presented in Singapore dollars which is the Company’s functional currency. All financial information has been presented in Singapore dollars thousands, unless otherwise stated.

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.

Significant accounting estimates and judgements

The preparation of financial statements in conformity with FRS requires management to make judgement, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making the judgement about carrying amounts of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates.

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised and in any future periods affected.

The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below.



2 BASIS OF PREPARATION (CONT’D)

Critical judgements in applying the Group’s accounting policies

Functional currency of the Company and entities of the Group

FRS 21, The Effects of Changes in Foreign Exchange Rates, requires the Company and the entities in the Group to determine their functional currencies to prepare the financial statements. When determining the functional currency, the Company and the entities in the Group consider the primary economic environment in which it operates, i.e. the one in which it primarily generates and expends cash. The Company and the entities in the Group may also consider the funds from which financing activities are generated. Management applied its judgement and determined that the functional currency of the Company and subsidiaries incorporated in Singapore is Singapore dollars on the basis that its funding is denominated in Singapore dollars and it expects its return in dividends to be in Singapore dollars.

Key sources of estimation uncertainty

Allowance for doubtful receivables

Allowance for doubtful receivables of the Group is based on an evaluation of the recoverability of trade and other receivables. Allowances are applied to trade and other receivables where events or changes in circumstances indicate that the balances may not be collectible. The identification of bad and doubtful debts requires the use of judgement and estimates. Where the expected outcome is different from the original estimate, such difference will impact carrying value of trade and other receivables and doubtful debt expenses in the period in which such estimate has been changed. The carrying value of trade and other receivables of the Group and the Company at the reporting date amounted to $71,096,000 (2012: $69,483,000) and $4,553,000 (2012: $4,381,000) respectively.

Impairment of goodwill and other non-financial assets

Goodwill is tested for impairment at least annually, more often if indicators of impairment are identified. Assets that are subject to depreciation and amortisation are reviewed to determine whether there is any such indication that the carrying value of these assets may not be recoverable and have suffered an impairment loss. If any such indication exists, the assets are tested for impairment. The recoverable amounts of the assets are estimated in order to determine the extent of the impairment loss, if any. The recoverable amount is the higher of an asset’s fair value less costs to sell and value-in-use. Such impairment loss is recognised in profit or loss.

The Group is organised into two reportable operating segments comprising the Print Media segment and Corporate segments. The recoverable amounts of goodwill and plant and equipment related to the Print Media segment and Corporate segment were determined based on value-in-use calculations.

The recoverable amounts of these assets and, where applicable, cash-generating units, have been determined based on value-in-use calculations. Management judgement is required in the area of asset impairment, particularly in assessing: (1) whether an event has occurred that may indicate that the related asset values may not be recoverable; (2) whether the carrying value of an asset can be supported by the net present value of future cash flows which are estimated based upon the continued use of the asset in the business; (3) the appropriate key assumptions to be applied in preparing cash flow projections including whether these cash flow projections are discounted using an appropriate rate. Changing the assumptions selected by management to determine the level, if any, of impairment, including the discount rates or the growth rate assumptions in the cash flow projections could materially affect the net present value used in the impairment test and as a result affects the Group’s results.




Key sources of estimation uncertainty (Cont’d)

Impairment of goodwill and non-financial assets (Cont’d)

The recoverable amount of goodwill is determined based on the values in use of the cash-generating unit (“CGU”), namely the Print Media segment, to which goodwill is allocated. Determining the recoverable amount of requires management to make significant judgments, estimates and assumptions. While management believes that the estimates and assumptions underlying the valuation methodology are reasonable, these estimates and assumptions could have a significant impact on whether or not an impairment charge is recognised and also the magnitude of any such charge.

The results of an impairment analysis are as of a point in time. There is no assurance that the actual future earnings or cash flows of the CGU will not decline significantly from the projections. Any significant decline in the operations could result in in impairment charges in future periods, which could have a significant impact on the Group’s operating results and financial condition.

A number of factors, many of which management has no ability to control, could affect the Group’s financial condition, operating results and business prospects and could cause actual results to differ from the estimates and assumptions management employed. These factors include: a prolonged global economic slowdown; the inability to develop new and enhanced services in a timely manner; a significant decrease in the demand for the Group’s services; a significant adverse change in the business climate; successful efforts by competitors to gain market share in Group’s markets; and a loss of key personnel.

A hypothetical one percentage point increase in the pre-tax discount rate and one percentage point decrease in the long-term assumed growth rate would not result in an impairment of goodwill.

In 2012, the Group incurred significant loss which arose from the Print Media segment. Based on the prevailing conditions then, management was of the view that it was appropriate to assess impairment of goodwill and plant and equipment based on value-in-use calculations as at 31 July 2012 and concluded that the recoverable amounts of goodwill and plant and equipment exceeded the carrying values.

During the current financial year ended 31 July 2013, management assessed the recoverable amounts of goodwill and plant and equipment based on the value-in-use calculations and concluded that no impairment loss is required at the reporting date as the recoverable amounts exceeded the respective carrying values. Please refer to Note 3 for further details of the impairment testing assessment.

The carrying value of goodwill and plant and equipment of the Group at the reporting date amounted to $64,484,000 (2012: $64,484,000) and $12,108,000 (2012: $13,708,000) respectively.

Depreciation of plant and equipment

Plant and equipment are depreciated on a straight-line basis over their estimated useful lives. Management estimates the useful lives of plant and equipment to be within the range as indicated in the accounting policy for plant and equipment and depreciation. Changes in the expected level of usage and technological developments could impact the economic useful lives and the residual values of these assets, leading to potential changes in future depreciation charges, impairment losses and/or write-offs. A 5% (2012 - 5%) difference in the expected useful lives of these assets from management’s estimates would result in approximately 2.6% variance in the Group’s loss for the financial year (2012 - 2.6% loss for the financial year). The carrying value of the plant and equipment of the Group at the reporting date amounted to $12,108,000 (2012: $13,708,000).




Key sources of estimation uncertainty (Cont’d)

Impairment of investments in and amounts due from subsidiaries

Determining whether investments in and amounts due from subsidiaries are impaired requires an estimation of the value-in-use of these investments. The value-in-use calculation requires the Group to estimate the future cash flows expected from the cash-generating units and an appropriate discount rate in order to calculate the present value of the future cash flows. Management has evaluated the recoverability of the investments based on such estimates. The carrying value of the Company’s investments in and amounts due from subsidiaries at the reporting date amounted to $76,487,000 (2012: $76,487,000) and $66,729,000 (2012: $53,554,000) respectively.

Impairment of available-for-sale financial assets

The Group follows the guidance of FRS 39, Financial Instruments: Recognition and Measurement, to determine when an available-for-sale financial asset is impaired. This determination requires significant judgement. In making this judgement, the Group evaluates, among other factors, the duration and extent to which the fair value of an investment is less than its cost; and the financial health of and short-term business outlook for the investee, including factors such as industry and sector performance, changes in technology and operational and financing cash flow. The carrying amounts of the Group’s and the Company’s available-for-sale investments at the reporting date amounted to $7,657,000 (2012: $7,657,000) and $7,642,000 (2012: $7,642,000) respectively.

Allowance for inventory obsolescence

The Group reviews the carrying value of their inventories so that they are stated at the lower of cost and net realisable value. In assessing net realisable value, management identifies inventories where there has been a significant decline in price or cost and inventory items that may not be realised as a result of certain events, and estimates the recoverable amount of such inventory based on values at which such inventory items are expected to be realised at the end of the reporting period. The carrying value of the Group’s inventories at the reporting date amounted to $4,162,000 (2012: $1,056,000).

Share-based payments

Equity-settled share-based payments are measured at fair value at the date of grant. Judgement is required in determining the most appropriate valuation model for the share options granted, depending on the terms and conditions of the grant. Management are also required to use judgement in determining the most appropriate inputs to the valuation model including expected life of the option, volatility and dividend yield. The assumptions and model used are disclosed in Note 17 to the financial statements.

Income tax

Significant judgement is involved in determining the provision for income taxes. The Group recognises liabilities for expected tax issues based on estimates of whether additional taxes will be due. Where the final tax outcome of these matters is different from the amounts that were initially recognised, such differences will impact the income tax provision in the period in which such determination is made. The Group’s current and deferred tax liabilities amounted to $20,000 (2012: $17,000) and $20,000 (2012: $23,000) respectively.



2.1 NEW OR REVISED ACCOUNTING STANDARDS AND INTERPRETATIONS

Adoption of new or revised FRSs and Interpretations to FRSs (“INT FRSs”)

On 1 August 2012, the Group adopted new or amended FRSs and INT FRSs that are mandatory for application from that date.

Reference Description

Amendments to FRS 1 Presentation of Items of Other Comprehensive IncomeAmendments to FRS 12 Deferred Tax: Recovery of Underlying Assets

The adoption of these new/revised FRSs and INT FRSs did not result in substantial changes to the Group’s accounting policies or any significant impact on these financial statements.

New accounting standards and interpretations not yet adopted

At the date of authorisation of these financial statements, the following FRSs and INT FRSs were issued but not yet effective:

Reference Description Effective from

Revised FRS 19 Employee Benefits 1 January 2013 FRS 113 Fair Value Measurement 1 January 2013 Amendments to FRS 107 Disclosures - Offsetting Financial Assets and Financial

Liabilities1 January 2013

Improvements to FRSs 2012- Amendments to FRS 1 Presentation of Financial Statements 1 January 2013 - Amendments to FRS 16 Property, Plant and Equipment 1 January 2013 - Amendments to FRS 32 Financial Instruments: Presentation 1 January 2013 Revised FRS 27 Separate Financial Statements 1 January 2014Revised FRS 28 Investments in Associates and Joint Ventures 1 January 2014FRS 110 Consolidated Financial Statements 1 January 2014FRS 111 Joint Arrangements 1 January 2014FRS 112 Disclosure of Interests in Other Entities 1 January 2014Amendments to FRS 32 Offsetting Financial Assets and Financial Liabilities 1 January 2014

The directors do not anticipate that the adoption of other FRSs and INT FRSs in future periods will have a material impact on the financial statements of the Group.

2.2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Consolidation

Business combinations

The consolidated financial statements relate to the Company and its subsidiaries (together referred to as the “Group”). The results of subsidiaries acquired or disposed of during the year are included in the consolidated income statement from the effective date of acquisition or up to the effective date of disposal, as appropriate.



2.2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT’D)

Consolidation (Cont’d)

Business combinations (Cont’d)

Subsidiaries are entities (including special purpose entities) over which the Group has power to govern the financial and operating policies so as to obtain benefits from its activities, generally accompanied by a shareholding giving rise to a majority of the voting rights. The existence and effect of potential voting rights that are currently exercisable or convertible are considered when assessing whether the Group controls another entity. 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 the net results of operations and of net assets of a subsidiary attributable to the interests which are not owned directly or indirectly by the equity holders of the Company. They are shown separately in the consolidated statement of comprehensive income, consolidated statement of changes in equity and consolidated statement of financial position. Total comprehensive income is attributed to the non-controlling interests based on their respective interests in a subsidiary, even if this results in the non-controlling interests having a deficit balance.

Acquisition of businesses

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.

The excess of the consideration transferred, the amount of any non-controlling interest in the acquiree and the acquisition-date fair value of any previous equity interest in the acquiree over the fair value of the net identifiable assets acquired is recorded as goodwill. Please refer to the paragraph “Goodwill” for the subsequent accounting policy on goodwill.

Disposals of subsidiaries or businesses

When a change in the Company’s ownership interest in a subsidiary results in a loss of control over the subsidiary, the assets and liabilities of the subsidiary including any goodwill are derecognised. Amounts previously recognised in other comprehensive income in respect of that entity are also reclassified to profit or loss or transferred directly to retained earnings if required by a specific Standard.




Consolidation (Cont’d)

Disposals of subsidiaries or businesses (Cont’d)

Any retained equity interest in the entity is remeasured at fair value. The difference between the carrying amount of the retained investment at the date when control is lost and its fair value is recognised in profit or loss.

Please refer to the paragraph “Subsidiaries” for the accounting policy on investments in subsidiaries in the separate financial statements of the Company.

Transactions with non-controlling interests

Changes in the Company’s ownership interest in a subsidiary that do not result in a loss of control over the subsidiary are accounted for as transactions with equity owners of the Group. 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 a separate reserve within equity attributable to the equity holders of the Company.

Subsidiaries

A subsidiary is an entity controlled by the Group. Control exists when the Group has the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities. The existence and effect of potential voting rights that are currently exercisable or convertible are considered when assessing whether there is control.

In the Company’s separate financial statements, shares in subsidiaries are stated at cost less allowance for any impairment losses on an individual subsidiary basis.

Intangible assets

Goodwill

Goodwill on acquisitions of subsidiaries on or after 1 January 2010 is stated after separate recognition of identifiable intangible assets. It is calculated as the excess of the sum of a) fair value of consideration transferred, b) the recognised amount of any non-controlling interest in the acquiree and c) acquisition-date fair value of any existing equity interest in the acquiree, over the acquisition-date fair values of identifiable net assets. If the fair values of identifiable net assets exceed the sum calculated above, the excess amount (i.e. gain on a bargain purchase) is recognised in profit or loss immediately.

Goodwill on acquisition of subsidiaries prior to 1 January 2010 and on acquisition of joint ventures and associated companies represents the excess of the cost of the acquisition over the fair value of the Group’s share of the net identifiable assets acquired.

Goodwill acquired in a business combination is initially measured at cost. Following initial recognition, goodwill is measured at cost less any accumulated impairment loss. Goodwill is reviewed for impairment, at least annually or more frequently if events or changes in circumstances indicate that the carrying value may be impaired.

Gains and losses on the disposal of subsidiaries include the carrying amount of goodwill relating to the entity sold, except for goodwill arising from acquisitions prior to 1 January 2001. Such goodwill was adjusted against retained profits in the year of acquisition and is not recognised in profit or loss on disposal.




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 functional currency of the Company is Singapore Dollars.

The consolidated financial statements of the Group and the statement of financial position and statement of changes in equity of the Company are presented in Singapore Dollars, which is also the functional currency of the Company.

Conversion of foreign currencies

Transactions and balances

Transactions in a currency other than the functional currency (“foreign currency”) are translated into the functional currency using the exchange rates at the dates of the transactions. Currency translation differences 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 reporting date are recognized in profit or loss. However, in the consolidated financial statements, currency translation differences arising from net investment in foreign operations are recognised in other comprehensive income and accumulated in the currency translation reserve.

When a foreign operation is disposed of, a proportionate share of the accumulated translation differences is reclassified to profit or loss, as part of the gain or loss on disposal.

All other foreign exchange gains and losses impacting profit or loss are presented in the statement of comprehensive income within “other losses - net”.

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.

Group entities

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 Singapore dollars are translated into the presentation currency as follows:

(i) Assets and liabilities are translated at the closing exchange rates at the end of reporting period;

(ii) Income and expenses are translated at average exchange rates; and

(iii) All resulting currency translation differences are recognised in other comprehensive income and accumulated in the currency translation reserve.

Goodwill and fair value adjustments arising on the acquisition of foreign operations are treated as assets and liabilities of the foreign operations and translated at the closing rates at the reporting date.

Plant and equipment and depreciation

Plant and equipment are stated at cost less accumulated depreciation and impairment losses, if any.

The cost of plant and equipment includes expenditure that is directly attributable to the acquisition of the items. Dismantlement, removal or restoration costs are included as part of the cost of plant and equipment if the obligation for dismantlement, removal or restoration is incurred as a consequence of acquiring or using the asset. Cost may also include transfers from equity of any gains/losses on qualifying cash flow hedges of foreign currency purchases of plant and equipment.




Plant and equipment and depreciation (Cont’d)

Subsequent expenditure relating to plant and equipment that has already been recognised is added to the carrying amount of the asset when it is probable that future economic benefits, in excess of the originally assessed standard of performance of the existing asset, will flow to the Group and the cost can be measured reliably. All other subsequent expenditure is recognised as an expense in the period in which it is incurred.

Depreciation on plant and equipment is calculated using the straight-line method to allocate their depreciable amounts over their estimated useful lives as follows:

Machinery 10 yearsMotor vehicles 6 yearsOffice equipment 3 to 10 yearsFixtures and fittings 3 to 10 years

Depreciation methods, useful lives and residual values are reviewed, and adjusted as appropriate, at each reporting date.

Fully depreciated assets are retained in the financial statements until they are no longer in use.

The gain or loss arising on disposal or retirement of an item of plant and equipment is determined as the difference between the sales proceeds and the carrying amounts of the asset and is recognised in profit or loss.

Inventories

Inventories are carried at the lower of cost and net realisable value. Cost is determined on a first-in first-out basis and includes freight and handling charges. Cost includes all costs of purchase, costs of conversion and other costs incurred in bringing the inventories to their present location and condition. Net realisable value is the estimated selling price in the ordinary course of business less the estimated costs of completion and selling expenses.

Financial assets

Financial assets, other than hedging instruments, can be divided into the following categories: financial assets at fair value through profit or loss, held-to-maturity investments, loans and receivables and available-for-sale financial assets. Financial assets are assigned to the different categories by management on initial recognition, depending on the purpose for which the assets were acquired. The designation of financial assets is re-evaluated and classification may be changed at the reporting date with the exception that the designation of financial assets at fair value through profit or loss is not revocable.

All financial assets are recognised on their trade date - the date on which the Company and the Group commit to purchase or sell the asset. Financial assets are initially recognised at fair value, plus directly attributable transaction costs except for financial assets at fair value through profit or loss, which are recognised at fair value.

Derecognition of financial instruments occurs when the rights to receive cash flows from the investments expire or are transferred and substantially all of the risks and rewards of ownership have been transferred. An assessment for impairment is undertaken at least at the end of each reporting period whether or not there is objective evidence that a financial asset or a group of financial assets is impaired.




Financial assets (Cont’d)

Non-compounding interest and other cash flows resulting from holding financial assets are recognised in profit or loss when received, regardless of how the related carrying amount of financial assets is measured.

The Group and the Company do not hold any financial assets at fair value through profit or loss or held-to-maturity investments.

Available-for-sale financial assets

Available-for-sale financial assets include non-derivative financial assets that do not qualify for inclusion in any of the other categories of financial assets. They are included in non-current assets unless management intends to dispose of the investment within 12 months of the end of the reporting period.

All financial assets within this category are subsequently measured at fair value with changes in value recognised in equity, net of any effects arising from income taxes, until the financial assets is disposed of or is determined to be impaired, at which time the cumulative gains or losses previously recognised in equity is included in the profit or loss for the period.

When a decline in the fair value of an available-for-sale financial asset has been recognised directly in equity and there is objective evidence that the asset is impaired, the cumulative loss that had been recognised directly in equity shall be removed from the equity and recognised in the profit or loss even though the financial asset has not been derecognised.

The amount of the cumulative loss that is removed from equity and recognised in profit or loss shall be the difference between the acquisition cost (net of any principal repayment and amortisation) and current fair value, less any impairment loss on that financial asset previously recognised in profit or loss.

Impairment losses recognised in profit or loss for equity investments classified as available-for-sale are not subsequently reversed through profit or loss. Impairment losses recognised in profit or loss for debt instruments classified as available-for-sale are subsequently reversed in profit or loss if an increase in the fair value of the instrument can be objectively related to an event occurring after the recognition of the impairment loss.

Impairment losses recognised in a previous interim period in respect of available-for-sale equity investments are not reversed even if the impairment losses would have been reduced or avoided had the impairment assessment been made at a subsequent reporting period or end of reporting period.

Determination of fair value

The fair values of quoted financial assets are based on current bid prices. If the market for a financial asset is not active or is unquoted, the Company establishes fair value by using valuation techniques. These include the use of recent arm’s length transactions, reference to other instruments that are substantially the same, discounted cash flow analysis, and option pricing models, making maximum use of market inputs. Where fair value of unquoted instruments cannot be measured reliably, fair value is determined by the transaction price.

Loans and receivables

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. They arise when the Group provides money, goods or services directly to a debtor with no intention of trading the receivables. They are included in current assets, except for maturities greater than 12 months after the reporting date which are classified as non-current assets.




Financial assets (Cont’d)

Loans and receivables (Cont’d)

Loans and receivables comprise cash and bank balances, loans and advances, amounts due from subsidiaries, trade and other receivables, excluding prepayments. They are subsequently measured at amortised cost using the effective interest method, less provision for impairment. If there is objective evidence that the asset has been impaired, the financial asset is measured at the present value of the estimated future cash flows discounted at the original effective interest rate. Impairment losses are reversed in subsequent periods when an increase in the asset’s recoverable amount can be related objectively to an event occurring after the impairment was recognised, subject to a restriction that the carrying amount of the asset at the date the impairment is reversed does not exceed what the amortised cost would have been had the impairment not been recognised. The impairment or write-back is recognised in the profit or loss.

Cash and cash equivalents comprise cash balances and bank deposits. Bank overdrafts that are repayable on demand and which form an integral part of the Group’s cash management are included as a component of cash and cash equivalents for the purpose of the cash flow statement.

Intra-group financial guarantees

Financial guarantees are financial instruments issued by the Group that require the issuer to make specified payments to reimburse the holder for the loss it incurs because a specified debtor fails to meet payment when due in accordance with the original or modified terms of a debt instrument.

Financial guarantees are recognised initially at fair value and are classified as financial liabilities. Subsequent to initial measurement, the financial guarantees are stated at the higher of the initial fair value less cumulative amortisation and the amount that would be recognised if they were accounted for as contingent liabilities. When financial guarantees are terminated before their original expiry date, the carrying amount of the financial guarantee is transferred to profit or loss.

Share capital

Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of ordinary shares and share options are recognised as a deduction from equity.

Dividends

Final dividends proposed by the directors are not accounted for in shareholders’ equity as an appropriation of retained profit, until they have been approved by the shareholders in a general meeting. When these dividends have been approved by the shareholders and declared, they are recognised as a liability.

Interim dividends are simultaneously proposed and declared, because of the articles of association of the Company grant the directors the authority to declare interim dividends. Consequently, interim dividends are recognised directly as a liability when they are proposed and declared.

Provisions

A provision is recognised if, as a result of a past event, the Group has a present legal or constructive obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation. Provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability. The unwinding of the discount is recognised as finance cost.




Leases

Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee. All other leases are classified as operating leases.

The Group as lessee

Assets held under finance leases are recognised as assets of the Group at their fair value at the inception of the lease or, if lower, at the present value of the minimum lease payments. Lease payments are apportioned between finance charges and reduction of the lease obligation so as to achieve a constant periodic rate of interest on the remaining balance of the liability. Finance charges are charged directly to profit or loss.

Rentals payable under operating leases are charged to profit or loss on a straight-line basis over the term of the relevant lease unless another systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed. Contingent rentals arising under operating leases are charged to profit or loss in the period in which they are incurred.

In the event that lease incentives are received to enter into operating leases, such incentives are recognised as a liability. The aggregate benefit of incentives is recognised as a reduction of rental expense on a straight-line basis, except where another systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed.

The Group as lessor

Rental income from operating leases is recognised on a straight-line basis over the term of the relevant lease unless another systematic basis is more representative of the time pattern in which use benefit derived from the leased asset is diminished. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognised on a straight-line basis over the lease term.

Interest income and finance costs

Interest income from fixed deposits is recognised as it accrues, using the effective interest method.

Finance costs, comprising interest expense on bank loans, bank overdrafts and finance lease liabilities and fair value adjustment on long-term receivable are recognised in profit or loss using the effective interest method.

Employee benefits

Short-term employee benefits

Short-term benefit obligations, including accumulated compensated absences, are measured on an undiscounted basis and are expensed as the related service is provided.

A provision is recognised for the amount expected to be paid under short-term cash bonuses if the Group has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee and the obligation can be estimated reliably.

Defined contribution plans

Contributions to post-employment benefits under defined contribution plans are recognised as an expense in profit or loss as incurred.




Share-based payments

The Group issues equity-settled share-based payments to directors and certain employees. The fair value of the employee services received in exchange for the grant of options is recognised as an expense in the profit or loss with a corresponding increase in the share option reserve over the vesting period. The total amount to be recognised over the vesting period is determined by reference to the fair value of the options granted on the date of the grant. Non-market vesting conditions are included in the estimation of the number of shares under options that are expected to become exercisable on the vesting date. At the end of each reporting period, the Group revises its estimates of the number of shares under options that are expected to become exercisable on the vesting date and recognises the impact of the revision of the estimates in the profit or loss, with a corresponding adjustment to the share option reserve over the remaining vesting period.

When the options are exercised, the proceeds received (net of transaction costs) and the related balance previously recognised in the share option reserve are credited to share capital account, when new ordinary shares are issued, or to the “treasury shares” account, when treasury shares are re-issued to the employees.

Key management personnel

Key management personnel of the Company are those persons having the authority and responsibility for the planning, directing and controlling the activities of the Company. Key management personnel include directors and certain senior managers.

Related parties

Parties are considered to be related if one party has the ability, directly or indirectly, to control the other party or exercise significant influence over the other party in making financial and operating decisions. Parties are also considered related if they are subject to common control or common significant influence. Related parties may be individuals or corporate entities.

Financial liabilities

The Group’s financial liabilities include trade payables, other payables, interest-bearing borrowings, finance lease liabilities, and amounts due to related parties, excluding deferred income.

Financial liabilities are recognised when the Group becomes a party to the contractual agreements of the instrument. All interest-related charges are recognised as an expense in “finance costs” in profit or loss. Financial liabilities are derecognised if the Group’s obligations specified in the contract expire or are discharged or cancelled.

Borrowings are recognised initially at the fair value of proceeds received less directly attributable transaction costs, if any. Borrowings are subsequently stated at amortised cost which is the initial fair value less any principal repayments. Any difference between the proceeds (net of transaction costs) and the redemption value is taken to profit or loss over the period of the borrowings using the effective interest method. The interest expense is chargeable on the amortised cost over the period of borrowing using the effective interest method.

Gains and losses are recognised in profit or loss when the liabilities are derecognised as well as through the amortisation process.




Financial liabilities (Cont’d)

Borrowings which are due to be settled within 12 months after the reporting date are included in current borrowings in the statement of financial position even though the original terms were for a period longer than 12 months and an agreement to refinance, or to reschedule payments, on a long-term basis is completed after the reporting date. Borrowings to be settled within the Group’s normal operating cycle are considered as current. Borrowings with agreements incorporating an overriding repayment on demand clause, which gives the lenders the right to demand repayment at any time, at their sole discretion and irrespective of whether a default event has occurred are considered as current. Other borrowings due to be settled more than 12 months after the reporting date are included in non-current borrowings in the statement of financial position.

Trade payables are initially measured at fair value, and subsequently measured at amortised cost, using the effective interest method.

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 end of the reporting period.

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 affects neither accounting or taxable profit or loss at the time of the transaction.

A deferred income tax liability is recognised on temporary differences arising on investments in subsidiaries, 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 tax is measured at the tax rates that are expected to be applied to the temporary differences when they reverse, based on the laws that have been enacted or substantively enacted at the reporting date. A deferred tax asset is recognised for unused tax losses, tax credits and deductible temporary differences, to the extent that it is probable that future taxable profits will be available against which they can be utilised. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realised.

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 date of the financial position; and

(ii) based on the tax consequence that will follow from the manner in which the Group expects, at the date of the financial position, to recover or settle the carrying amounts of its assets and liabilities.

Current and deferred income taxes are recognised as income or expense in the profit or loss, except to the extent that the tax arises from a business combination or a transaction which is recognised either in other comprehensive income or directly in equity. Deferred tax arising from a business combination is adjusted against goodwill on acquisition.

Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax liabilities and assets and they relate to income taxes levied by the same tax authorities on the same taxable entity, or on different tax entities, provided they intend to settle current tax liabilities and assets on a net basis or their tax assets and liabilities will be realised simultaneously.




Impairment of non-financial assets

The carrying amounts of the Company’s and Group’s non-financial assets, other than inventories, subject to impairment are reviewed at the end of each reporting period to determine whether there is any indication of impairment. If any such indication exists, the asset’s recoverable amount is estimated.

If it is not possible to estimate the recoverable amount of the individual asset, then the recoverable amount of the cash-generating unit to which the assets belong will be identified.

For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows (cash-generating units). As a result, some assets are tested individually for impairment and some are tested at cash-generating unit level. Goodwill is allocated to those cash-generating units that are expected to benefit from synergies of the related business combination and represent the lowest level within the company at which management controls the related cash flows.

Individual assets or cash-generating units that include goodwill and other intangible assets with an indefinite useful life or those not yet available for use are tested for impairment at least annually. All other individual assets or cash-generating units are tested for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable.

An impairment loss is recognised for the amount by which the asset’s or cash-generating unit’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of fair value, reflecting market conditions less costs to sell and value-in-use, based on an internal discounted cash flow evaluation. Impairment losses recognised for cash-generating units, to which goodwill has been allocated, are credited initially to the carrying amount of goodwill. Any remaining impairment loss is charged pro rata to the other assets in the cash-generating unit. With the exception of goodwill, all assets are subsequently reassessed for indications that an impairment loss previously recognised may no longer exist.

Any impairment loss is charged to the profit or loss unless it reverses a previous revaluation in which case it is charged to equity.

With the exception of goodwill,

l An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount or when there is an indication that the impairment loss recognised for the asset no longer exists or decreases.

l An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined if no impairment loss had been recognised.

l A reversal of an impairment loss on a revalued asset is credited directly to equity under the heading revaluation surplus. However, to the extent that an impairment loss on the same revalued asset was previously recognised as an expense in the profit or loss, a reversal of that impairment loss is recognised as income in the profit or loss.

An impairment loss in respect of goodwill is not reversed, even if it relates to impairment loss recognised in an interim period that would have been reduced or avoided had the impairment assessment been made at a subsequent reporting or end of reporting period.




Earnings per share

The Group presents basic and diluted earnings per share data for its ordinary shares. Basic earnings per share is calculated by dividing the profit or loss attributable to ordinary shareholders of the Company by the weighted average number of ordinary shares outstanding during the year, adjusted for own shares held. Diluted earnings per share is determined by adjusting the profit or loss attributable to ordinary shareholders and the weighted average number of ordinary shares outstanding, adjusted for own shares held, for the effects of all dilutive potential ordinary shares, which comprise share options granted to employees and directors.

Segment reporting

An operating segment is a component of the Group that engages in business activities from which it may earn revenues and incur expenses, including revenues and expenses that relate to transactions with any of the Group’s other components. Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-maker. The chief operating decision-maker has been identified as the Chief Executive Officer who makes strategic resources allocation decisions.

Revenue recognition

Revenue from the rendering of services is measured at the fair value of the consideration received or receivable, net of goods and services taxes or other sales taxes and trade discounts. Revenue from the provision of print media services is recognised in the period in which the services are rendered.

Rental income is recognised on a straight-line basis over the lease term.

Dividend income is recognised when the right to receive the dividend is established.

3 GOODWILL

2013 2012Group $’000 $’000

Goodwill - at beginning and at end of year 64,484 64,484

Impairment testing

The Group’s cash-generating units (“CGUs”) are identified according to the operating subsidiaries in the People’s Republic of China and Hong Kong, namely the Precise Media Group Limited’s group of printing companies.

During the previous financial year ended 31 July 2012, the Group recognised substantial losses from operations. Under the requirements of FRS 36, Impairment of Assets, the losses are indicators of impairment which requires management to perform impairment testing of the non-current assets.

The Group carried out a review of the recoverable amount of its goodwill and plant and equipment with a carrying value of $64,484,000 (2012: $64,484,000) and $12,108,000 (2012: $13,708,000) respectively at the reporting date. The recoverable amount is the higher of fair value less costs to sell and value-in-use. The Group computed the recoverable amounts based on the value-in-use calculations.



3 GOODWILL (CONT’D)

Impairment testing for cash-generating units containing goodwill

The goodwill acquired in a business combination is allocated, at acquisition, to the cash-generating units (“CGU”) that are expected to benefit from that business combination.

At the reporting date, the carrying amount of goodwill of approximately $64.5 million (2012 - $64.5 million) and the carrying amount of plant and equipment of $12,108,000 (2012: $13,708,000) are wholly attributable to the Precise Media Group Limited’s group of printing companies in the People’s Republic of China and Hong Kong.

The recoverable amount of the Precise Media cash-generating unit (“CGU”) for a 5-year period from 2014 to 2018 is determined on a value-in-use basis using financial budgets approved by the management. The cash flow projections represent the expected income less related costs and are based on past experience and expectations for these printing companies in general.

Cash flows are projected using the anticipated revenue growth rate of 3% (2012 - 5%) per annum. The growth rate used is based on past performance and market development growth and does not exceed the current estimated long-term average growth rate for the business in which the CGU operates. A pre-tax discount rate of 19.4% (2012 - 17%) has been applied to the cash flow projections with a terminal growth rate of 3% (2012: 3%). The weighted average growth rates used were consistent with the forecasts included in industry reports. The discount rates used were pre-tax and reflected specific risks relating to the relevant segments. The terminal growth rate used for the CGU does not exceed management’s expectation of the long term average growth rate of the industry and country in which the CGU operates.

The recoverable amounts of the goodwill and plant and equipment relating to the Precise Media CGU were determined to be higher than its carrying amount and no impairment loss is required as at 31 July 2012 and 2013.

The Group believes that any reasonably possible changes in the above key assumptions applied are not likely to materially cause the recoverable amount to be lower than its carrying amount.

4 PLANT AND EQUIPMENT

Motor Office FurnitureGroup Machinery vehicles equipment and fittings Total

$’000 $’000 $’000 $’000 $’000

Cost

At 1 August 2011 19,547 1,558 8,821 7,545 37,471Exchange differences 529 27 55 (250) 361Additions 183 493 281 691 1,648Disposals (426) (728) (52) - (1,206)Write-offs - (24) (1) (10) (35)At 31 July 2012 19,833 1,326 9,104 7,976 38,239Exchange differences 604 33 62 169 868Additions 1 267 11 42 321Disposals (2) - (11) (229) (242)At 31 July 2013 20,436 1,626 9,166 7,958 39,186



4 PLANT AND EQUIPMENT (CONT’D)

Motor Office FurnitureGroup Machinery vehicles equipment and fittings Total

$’000 $’000 $’000 $’000 $’000

Accumulated depreciation

At 1 August 2011 8,491 1,071 7,927 5,081 22,570Exchange differences 94 10 30 18 152Depreciation for the year 1,603 200 440 634 2,877Disposals (313) (698) (29) - (1,040)Write-offs - (24) - (4) (28)At 31 July 2012 9,875 559 8,368 5,729 24,531Exchange differences 179 14 50 137 380Depreciation for the year 1,138 209 325 654 2,326Disposals (1) - (10) (148) (159)At 31 July 2013 11,191 782 8,733 6,372 27,078

Carrying amount

At 31 July 2013 9,245 844 433 1,586 12,108

At 31 July 2012 9,958 767 736 2,247 13,708

Motor OfficeCompany vehicles equipment Total

$’000 $’000 $’000Cost

At 1 August 2011 476 40 516Additions 213 - 213Disposal (476) - (476)At 31 July 2012 213 40 253Additions 255 - 255At 31 July 2013 468 40 508

Accumulated depreciation

At 1 August 2011 407 34 441Depreciation for the year 64 3 67Disposal (447) - (447)At 31 July 2012 24 37 61Depreciation for the year 57 3 60At 31 July 2013 81 40 121

Carrying amount

At 31 July 2013 387 - 387

At 31 July 2012 189 3 192



4 PLANT AND EQUIPMENT (CONT’D)

(a) Details of the carrying amounts of plant and equipment secured under finance lease agreements (Note 14) are as follows:

Group Company2013 2012 2013 2012$’000 $’000 $’000 $’000

Motor vehicles 594 289 387 189Machinery 192 1,851 - -

786 2,140 387 189

(b) Details of the carrying amounts of plant and equipment secured are pledged for bank borrowings (Note 13) are as follows:

Group Company2013 2012 2013 2012

$’000 $’000 $’000 $’000

Machinery 746 1,180 - -

5 SUBSIDIARIES

Company 2013 2012$’000 $’000

Unquoted equity shares, at cost 85,233 85,233Less: Impairment losses (8,746) (8,746)

76,487 76,487Impairment lossesAt beginning of the year 8,746 6,651Amount recognised - 2,095At end of the year 8,746 8,746

Details of subsidiaries are as follows:

Country ofincorporation/ Group’sprincipal place effective

Name of subsidiary of business equity interest Principal activities2013 2012

Xpress Print (Pte) Ltd Singapore 100% 100% Provision of general printing, multimedia and pre-press work

Xpress Print (Shenzhen) Co., Ltd PRC 100% 100% Provision of general printing,multimedia and pre-press work



5 SUBSIDIARIES (CONT’D)



Precise Media Group Limited British Virgin 100% 100% Investment holdingIslands

Xpress Print (Vietnam) Co., Ltd Vietnam 100% 100% General printers

Xpress Print (K.L.) Sdn Bhd Malaysia 100% 100% General printers

Xpress New Media Pte Ltd Singapore 100% 100% Provision of one-stop (formerly known as Xpress print-related services and printer Media Pte Ltd) consultancy services

Xpress Print (Australia) Pty Ltd (1) Australia 76% 76% Pre-press work

Xpress Print (H.K.) Limited (2) Hong Kong 100% 100% General trading

Print Planner (Hong Kong) Limited Hong Kong 100% 100% Provision of one-stopprint-related services and printerconsultancy services

Xpress Print (Shanghai) Co., Ltd PRC 100% 100% Provision of pre-pressproduction related technicalsupport service

Print Planner (Shenzhen) Limited PRC 100% 100% Provision of print-relatedservices and printerconsultancy services

Print Planner (Int’l) Limited Hong Kong 100% 100% Provision of print-relatedservices and printerconsultancy services

Xpress Media Philippines Inc. The Philippines 100% 100% Inactive

Print Planner (Chengdu) Limited PRC 100% 100% Provision of pre-pressproduction relatedtechnical support services

Print Planner (Beijing) Limited PRC 100% 100% Provision of pre-pressproduction relatedtechnical support services



5 SUBSIDIARIES (CONT’D)



Shenzhen Xpress Print Technology PRC 100% 100% Provision of pre-press Co., Ltd production related

technical support services

Print Planner (Shenyang) Co., Ltd PRC 100% 100% Provision of pre-pressproduction relatedtechnical support services

Notes on Auditor:

All subsidiaries are audited by Foo Kon Tan Grant Thornton LLP, Singapore or member firms of Grant Thornton International except for the following:

(1) Audited by HC and Associates, Australia

(2) Audited by Kingston C.P.A. Limited, Hong Kong

In conformity with the requirements of Rule 716 of the Listing Manual of The SGX-ST, the Audit Committee and Board of Directors of the Company confirm that they are satisfied that the appointment of different auditors for certain of its overseas subsidiaries would not compromise the standard and effectiveness of the audit of the Group.

Impairment loss of investments in and non-current amounts due from subsidiaries

The Company has investments in and non-current amounts due from subsidiaries of $76,487,000 (2012: $76,487,000) and $23,792,000 (2012: $22,001,000) respectively at 31 July 2013.

During the previous financial year ended 31 July 2012, having regard to the financial performance of certain subsidiaries that have been loss making since the previous financial years, impairment losses of $2.095 million were recognised in respect of the Company’s investments in these subsidiaries to reduce the carrying value of the investments to the recoverable amounts. The recoverable amounts of the investments were determined based on the value in use of the subsidiaries, and determined using a pre-tax discount rate of 22%.

The value-in-use calculation was based on projected cash flows derived from the financial budgets approved by the management covering a five-year period. Cash flows were projected using the estimated revenue growth rate of 5% per annum based on past experience and expectations for these subsidiaries.

During the current financial year ended 31 July 2013, management assessed the recoverable amounts of the investments in and non-current amounts due from subsidiaries based on the value-in-use calculations and recognised impairment losses of $1,030,000 on the non-current amounts due from subsidiaries (Note 6). Please refer to Note 3 for details of value-in-use computations relating to the Print Media CGU in which the subsidiaries are operating.



6 AMOUNTS DUE FROM / TO SUBSIDIARIES

2013 2012Company $’000 $’000

Non-currentAmounts due from subsidiaries - non-trade 23,792 22,001

CurrentAmounts due from subsidiaries- trade 27,726 22,161- non-trade 16,572 9,723

44,298 31,884Less: Impairment losses At 1 August (331) (331)Impairment loss recognised (1,030) -At 31 July (1,361) (331)

42,937 31,553Amounts due to subsidiaries - trade 301 -- non-trade 34,860 28,808

35,161 28,808

During the current financial year, the Company recognised impairment losses of $1,030,000 (2012: Nil) on the non-current non-trade amounts due from subsidiaries. Please refer to Notes 3 and 5 for details of impairment testing.

The non-current non-trade amounts due from subsidiaries are unsecured and have no fixed terms of repayment. These amounts bear interest at 6% (2012 - 6%) per annum. As these amounts are in substance, a part of the entity’s net investment in the subsidiaries, they are stated at cost.

The current non-trade amounts due from/to subsidiaries, comprising mainly advances, are unsecured, interest-free and repayable on demand.

7 AVAILABLE-FOR-SALE FINANCIAL ASSET

Group Company2013 2012 2013 2012$’000 $’000 $’000 $’000

Unquoted equity securities, at fair value Balance at 1 August and 31 July 7,657 7,657 7,642 7,642

Unquoted equity investments comprise 9% equity interest in an unquoted company in the PRC. At the reporting date, the Group engaged an independent professional valuer to perform a valuation on the fair value of the available-for-sale financial asset which is approximate to the cost of the investment. This company does not have a history of profits and cash flows and is not similar in size and activity to any quoted entities. There is also no active market for the equity interest. It is not practicable to determine with sufficient reliability the fair value of the unquoted equity shares. However, the directors do not anticipate that the carrying amount of the unquoted equity investments will be significantly in excess of its fair value.



8 INVENTORIES

Group 2013 2012$’000 $’000

Raw materials and consumables 4,162 1,056

Cost of inventories recognised as expense included in “Raw materials and consumables used” in the consolidated income statement 9,429 16,335

9 TRADE AND OTHER RECEIVABLES

Group Company2013 2012 2013 2012$’000 $’000 $’000 $’000

Trade receivables 45,566 43,433 - -Less: Impairment losses (7,721) (7,377) - -

37,845 36,056 - -Project receivable# 8,265 8,765 - -

46,110 44,821 - -Trade receivables presented as:Non-current assets 8,265 8,765 - -Current assets 37,845 36,056 - -

46,110 44,821 - -Other receivablesSundry receivables 8,142 2,805 149 79Advances to staff 49 42 2 2Receivable from sale of investment 4,269 4,269 4,269 4,269Deposits 1,599 9,211 13 13Loans and receivables for other receivables 14,059 16,327 4,433 4,363Advance payment to paper suppliers 9,891 7,859 - -Prepayments 2,206 1,486 120 18

26,156 25,672 4,553 4,381Less: Impairment lossesAt 1 August (1,010) - - -Impairment loss recognised (160) (1,010) - -At 31 July (1,170) (1,010)

24,986 24,662 4,553 4,381

# Project receivable relates to revenue derived by a subsidiary from a print project with a publisher during the financial year ended 31 July 2010. Under this project, the subsidiary manages the print supply chain management and the publisher manages the marketing and distribution functions. During the financial year ended 31 July 2012, due to the implementation of the new marketing strategy by the business partner, the time to receipt of payment from the publisher has been revised from 2013 to 2014. The fair value of the non-current portion of trade receivables has been calculated based on discounted cash flows using market borrowing rate.

Trade receivables generally have credit terms of between 120 days to 180 days.

Further details on the Group’s credit risk and foreign currency risk are as set out in Note 26.



10 CASH AND CASH EQUIVALENTS

Group Company2013 2012 2013 2012$’000 $’000 $’000 $’000

Cash on hand and at bank 403 295 - 2Fixed deposits 5,959 5,965 4,285 5,006

6,362 6,260 4,285 5,008

2013 2012Group $’000 $’000

Cash and cash equivalents in the consolidated statement of financial position 6,362 6,260Bank overdraft (Note 13(5)) (3,673) (5,087)Fixed deposits pledged as security for the Group’s banking facilities (Notes 13(6), 13(3)and 13(4)) (5,959) (3,965)Fixed deposits pledged as security for a related party’s banking facilities@ - (2,000)Cash and cash equivalents in the consolidated statement of cash flows (3,270) (4,792)

At the reporting date, the weighted average effective interest rate on fixed deposits is 0.47% (2012 - 0.48%) per annum.

@ The related party is an entity in which the Company has an equity interest. The investment is classified as available-for-sale financial asset (Note 7) in the statement of financial position. As of 31 July 2013, the banking facilities have being cancelled.

Further details on the Group’s foreign currency risk are as set out in Note 26.

11 SHARE CAPITAL

CompanyNo. of shares2013 2012 2013 2012

’000 ’000 $’000 $’000Ordinary shares issued and fully paid, with no par valueAt 1 August 1,548,520 1,548,520 100,590 100,590Issue of shares 200,000 - 4,500 -At 31 July 1,748,520 1,548,520 105,090 100,590

The Company issued 200,000,000 new ordinary shares at $0.0225 each for cash to third parties during the current financial year ended 31 July 2013.

All issued shares are fully paid and have no par value. The Company has one class of ordinary shares which carries no right to fixed income. The holders of ordinary shares are entitled to receive dividends as and when declared by the Company. All ordinary shares carry one vote per share without restriction.



12 RESERVES

Group Company2013 2012 2013 2012$’000 $’000 $’000 $’000

Fair value reserve 5,717 5,717 5,622 5,622Currency translation reserve (12,218) (8,846) - -Share option reserve 706 706 706 706Retained earnings 41,950 39,273 10,070 8,941

36,155 36,850 16,398 15,269

(a) Fair value reserve

The fair value reserve relates to the cumulative net changes in the fair values of available-for-sale financial assets until the investments are derecognised or impaired.

(b) Currency translation reserve

The currency translation reserve comprises foreign exchange differences arising from the translation of the financial statements of foreign operations whose functional currencies are different from the functional currency of the Company, as well as foreign exchange differences arising from the translation of monetary items that in substance form part of the Company’s net investment in foreign operations.

(c) Share option reserve

The share option reserve comprises the cumulative value of services received from employees and directors recorded in respect of the grant of share options.

13 INTEREST-BEARING BORROWINGS

Nominal Year of 2013 2012Group interest rate maturity $’000 $’000

CurrentTerm loans (unsecured) (1) 5.00% 2013 865 1,002Term loans (secured) (1) (2) 6.00% 2015 1,063 1,526Term loans (secured) (1) 5.00% 2013 - 494Revolving loans (secured) (1) (3) 5.75% 2013 2,500 2,500Revolving loan (secured) (1) (3) 8.25% 2013 500 500Revolving loan (secured) (1) (4) 4.125% 2013 500 -Revolving loan (secured) (1) (4) 5.125% 2013 1,000 -Revolving loan (secured) (1) (6) 8.19% 2013 - 1,047Receivables Purchase Financing (secured) (1) (3) 2.5% 2013 914 -(i) 7,342 7,069Bank overdraft (secured) (5) 5.00% - 8.25% 2013 3,673 5,087(ii) 3,673 5,087Total (i)+(ii) 11,015 12,156

(1) These loans are callable on demand.

(2) At 31 July 2013, the term loan was secured by plant and equipment with a carrying amount of $0.7 million (2012 - $1.18 million) (Note 4(b)).



13 INTEREST-BEARING BORROWINGS (CONT’D)

(3) The bank loans are secured by fixed deposits of $4.17 million (2012 - $0.52 million) (Note 10).

(4) The revolving loans are secured by fixed deposits of $0.5 million (2012: Nil) (Note 10).

(5) The bank overdraft is secured by fixed deposits of $1.29 million (2012 - $3 million) (Note 10).

(6) The revolving loan was secured by fixed deposits of $0.44 million as at 31 July 2012.

The Company provides guarantees to subsidiaries in respect of the loans and bank overdrafts.

Bank loans and bank overdrafts are denominated in the functional currencies of the respective entities.

Further details on the Group’s liquidity risk are as set out in Note 26.

14 FINANCE LEASE LIABILITIES

Group Company2013 2012 2013 2012$’000 $’000 $’000 $’000

Lease payments payable:Not later than one year 183 804 72 33Later than one year and not later than five years 441 730 286 134Later than five years 112 118 68 45Future minimum lease payments 736 1,652 426 212Less: Amounts representing future finance charges (95) (128) (55) (25)Present value of minimum lease payments 641 1,524 371 187

Lease payments payable:Not later than one year 142 739 62 29Presented as current liabilities 142 739 62 29

Lease payments payable:Later than one year and not later than five years 404 712 250 148Later than five years 95 73 59 10Presented as non-current liabilities 499 785 309 158

641 1,524 371 187

The weighted average nominal interest rates of the finance lease liabilities is as follows:

Group Company2013 2012 2013 2012

6.39% 6.39% 4.81% 1.90%

None of the leases provides for additional payments that are contingent upon changes in the market rental rate. Finance lease liabilities of the Group and the Company are secured by the leased assets (Note 4(a)).

Further details on the Group’s liquidity risk are as set out in Note 26.



15 DEFERRED TAX LIABILITIES

Deferred tax at the end of the year consists of the following:

Deferred tax assets Deferred tax liabilities2013 2012 2013 2012$’000 $’000 $’000 $’000

GroupPlant and equipment - - 20 23

CompanyPlant and equipment - - 20 20

Movement in temporary differences during the year is as follows:

Balance at Recognised Balance at Recognised Balance at1 August in profit 31 July in profit 31 July

2011 or loss 2012 or loss 2013$’000 $’000 $’000 $’000 $’000

GroupPlant and equipment 2 21 23 (3) 20

CompanyPlant and equipment - 20 20 - 20

At the reporting date, the Group had unabsorbed tax losses, unabsorbed wear and tear allowances and unabsorbed investment allowance of approximately $3.6 million (2012 - $9.2 million), $0.4 million (2012 - $0.5 million) and $1.5 million (2012 - $1.5 million), respectively, that are available for carry forward and set-off against future taxable income, subject to agreement by the tax authorities and compliance with certain provisions of the tax legislations of the respective countries in which the subsidiaries operate. Deferred tax assets have not been recognised in respect of these items because it is not probable that future taxable profit will be available against which the Group can utilise the benefits therefrom. The deductible temporary differences do not expire under current tax legislation. Deferred tax assets have not been recognised in respect of these items because it is not probable that future taxable profit will be available against which the Group can utilise the benefits.

As at 31 July 2013, deferred tax liabilities amounting to $0.4 million (2012 - $0.32 million) have not been recognised for taxes that would be payable on the undistributed earnings of one subsidiary as these earnings are not expected to be distributed in the foreseeable future.



15 DEFERRED TAX LIABILITIES (CONT’D)

The unrecognised tax losses will expire as follows:

Group2013 2012

S’000 S’000

Year 2015 2,569 3,280Year 2019 2,889 7,942Carried forward indefinitely, subject to conditions imposed by law - -

5,458 11,222

16 TRADE AND OTHER PAYABLES

Group Company2013 2012 2013 2012$’000 $’000 $’000 $’000

Trade payables 6,020 5,967 411 599Other payablesAccrued expenses 3,816 3,746 1,438 1,419Fixed assets vendors 54 90 - -Accrued directors’ fees 455 250 455 250Other payables 2,399 1,255 737 120

6,724 5,341 2,630 1,78912,744 11,308 3,041 2,388

The Group’s and Company’s trade payables were denominated in the functional currencies of the respective entities.

17 EQUITY COMPENSATION

Share option scheme

The Xpress Holdings Executives’ Share Option Scheme (the “SOS”) was approved by its members at an Extraordinary General Meeting held on 25 June 2001. The SOS is administered by the Remuneration Committee.

Other information regarding the SOS is set out below:

(a) Options granted to employees and executive directors have a contractual life of 10 years commencing from the date of grant and expiring on the day immediately preceding the 10th anniversary of the date of grant.

(b) Options granted to non-executive directors of the Group have a contractual life of 5 years commencing from the date of grant and expiring on the day immediately preceding the 5th anniversary of the date of grant.

(c) The options vest one year from the date of grant.

(d) All options are settled by physical delivery of shares.



17 EQUITY COMPENSATION (CONT’D)

Details of the share options are as follows:

Date of grant

Balance at 01.08.2011

Granted during

the year

Cancelled/lapsed/

forfeitedduring

the year

Exercised during

the yearBalance at 31.07.2012

Exerciseprice Expiry date

07.12.2001 350,000 - (350,000) - - $0.0500 06.12.201107.12.2001 65,000 - (65,000) - - $0.0550 06.12.201130.06.2003 400,000 - - - 400,000 $0.0550 29.06.201311.12.2003 281,000 - - - 281,000 $0.0733 10.12.201304.12.2006 2,100,000 - (300,000) - 1,800,000 $0.1783 03.12.201601.03.2007 3,300,000 - - - 3,300,000 $0.1650 28.02.201710.03.2008 4,000,000 - - - 4,000,000 $0.1200 09.03.201822.09.2008 22,000,000 - (2,600,000) - 19,400,000 $0.0700 21.09.201320.10.2008 4,000,000 - - - 4,000,000 $0.0500 19.10.2018

36,496,000 - (3,315,000) - 33,181,000

Cancelled/lapsed/

Granted forfeited ExercisedDate of Balance at during during during Balance at Exercisegrant 01.08.2012 the year the year the year 31.07.2013 price Expiry date

30.06.2003 400,000 - (400,000) - - $0.0550 29.06.201311.12.2003 281,000 - - - 281,000 $0.0733 10.12.201304.12.2006 1,800,000 - - - 1,800,000 $0.1783 03.12.201601.03.2007 3,300,000 - - - 3,300,000 $0.1650 28.02.201710.03.2008 4,000,000 - - - 4,000,000 $0.1200 09.03.201822.09.2008 19,400,000 - (2,000,000) - 17,400,000 $0.0700 21.09.201320.10.2008 4,000,000 - - - 4,000,000 $0.0500 19.10.2018

33,181,000 - (2,400,000) - 30,781,000

No share options were granted during the financial years ended 31 July 2012 and 2013.

During the financial year ended 31 July 2013, 2,000,000 share options were forfeited and 400,000 share options expired.

As at 31 July 2013, 30,781,000 (2012 - 33,181,000) share options were exercisable. The range of exercise prices for options outstanding at the reporting date was $0.0500 to $0.1783 (2012 - $0.0500 to $0.1783).

The weighted average remaining contractual life of share options outstanding at 31 July 2013 is 2.5 (2012 - 3.4) years.



17 EQUITY COMPENSATION (CONT’D)

Fair value of share options and assumptions

The fair value of share options was determined using the Black-Scholes valuation model with the following inputs:

Grant date 10.03.2008 22.09.2008 20.10.2008

Fair value at measurement date $0.1050 $0.0112 $0.0064Exercise price at grant date $0.0700 $0.0700 $0.0500Expected volatility 71.96% 71.64% 55.05%Risk-free interest rate 3.625% 3.625% 3.625%Expected dividend yield 10% 10% 10%Expected option life 3 years 3 years 3 years

The exercise price at the grant date is based on volume-weighted share price for 3 consecutive trading days prior to the grant date. The expected volatility is measured by the standard deviation of 36 months’ average intra-day high and low share prices prior to the grant date. The risk-free interest rate is based on the 10-year zero-coupon Singapore Government bond yield on the grant date. Expected dividend yield is based on expected dividend payout over the 1 year volume-weighted average share price prior to the grant date.

18 REVENUE

2013 2012Group $’000 $’000

Print media services 23,702 38,862

19(a) Other income

2013 2012Group $’000 $’000

Rental income 556 138Impairment loss on trade receivables reversed - 82Gain on disposal of plant and equipment - 246Sale of scrap paper - 203Miscellaneous income 174 87

730 756



19(b) Staff costs

2013 2012Group $’000 $’000

Directors’ fees:•directorsoftheCompany - current year 291 250•directorsofasubsidiary 5 5Directors’ remuneration other than fees•directorsoftheCompany 1,079 1,118•directorsofasubsidiary 245 327•contributionstodefinedcontributionplans 41 25Key management personnel (other than directors):•salaries,wagesandotherrelatedcosts 599 732•contributionstodefinedcontributionplans 121 48Key management personnel compensation 2,381 2,505

Other than directors and key management personnel:•salaries,wagesandotherrelatedcosts 5,563 6,868•contributionstodefinedcontributionplans 524 549

8,468 9,922

19(c) Other expenses

2013 2012Group $’000 $’000

Corporate and legal expenses 353 465Audit fees 402 434Bank charges 118 103Insurance expense 16 104Loss on disposal of plant and equipment 61 -Marketing expenses 821 1,258Operating lease expense - offices, factories and warehouses 2,318 2,332Printing expenses and postage 78 121Impairment loss on trade receivables 344 7,203Impairment loss on other receivables 160 1,010Property tax 103 94Repair and maintenance of equipment 131 165Stamp duty 44 134Telecommunication expense 143 172Utilities 662 759Upkeep of motor vehicles 207 340Others 551 465

6,512 15,159



20(a) Interest income

2013 2012Group $’000 $’000

Interest income on fixed deposits 25 35Accretion of interest income on Project Receivables - 52

25 87

20(b) Finance costs

2013 2012Group $’000 $’000

Interest expense- Bank overdraft 356 240- Bank loans 415 505- Trust receipts 60 110- Finance lease liabilities 30 106

861 961Fair value adjustment for project receivables - 472

861 1,433

20(c) Profit/(Loss) before taxation

In addition to those disclosed elsewhere in these financial statements, the following items have been included in arriving at profit/(loss) before taxation:

2013 2012Group $’000 $’000

Depreciation of plant and equipment (Note 4) 2,326 2,877Plant and equipment written off 16 7Loss/(Gain) on disposal of plant and equipment 61 (246)Reversal of allowance for doubtful trade receivables - (82)



21 INCOME TAX EXPENSE

21.1 Income tax expense – income statement

2013 2012Group $’000 $’000

Current tax expenseUnder provision in prior years 3 -

Deferred tax expense Origination and reversal of temporary differences (3) 21

- 21

Domestic income tax in Singapore is calculated at 17% (2012: 17%) of the estimated assessable profit for the year. Taxation for other jurisdictions is calculated at the rates prevailing in the relevant jurisdictions, People’s Republic of China and Hong Kong will be 25% and 16.5% respectively. The total charge for the year can be reconciled to the accounting profit/(loss) as follows:

Reconciliation of effective tax rate

2013 2012Group $’000 $’000

Profit/(Loss) before taxation 2,681 (4,558)

Tax calculated using Singapore tax rate of 17% (2012 - 17 %) 455 (775)Non-deductible expenses 2,136 2,663Utilisation of previously unrecognised tax benefits (184) (62)Group Relief (225) (170)Deferred tax asset on current year losses not recognised 261 2,073Effects of tax rates in foreign jurisdictions (59) (375)Under provision of current tax expense 3 -Income not subject to tax (2,387) (3,333)

- 21

Under the group tax relief system introduced by the Inland Revenue Authority of Singapore (“IRAS”), a Singapore incorporated company may, upon satisfaction of the criteria set out by the IRAS, transfer its current year’s unabsorbed capital allowances, trade losses and donations to another company belonging to the same group, to be deducted against the assessable income of the latter company.

According to the Laws of the PRC on Enterprise Income Tax (“New Law”) promulgated on 16 March 2007, the income tax has been unified at 25% effective from 1 January 2008.



21 INCOME TAX EXPENSE (CONT’D)

21.1 Income tax expense – other comprehensive income, net of tax

2013 2012Disclosure of tax effect relating toeach component of other Before Tax Net Before Tax Netcomprehensive income: tax expense of tax tax expense of tax

$’000 $’000 $’000 $’000 $’000 $’000

Currency translation differences (3,372) - (3,372) 2,184 - 2,184

22 EARNING/(LOSS) PER SHARE

2013 2012Group $’000 $’000

Basic earnings / (loss) per share is based on:Profit/(Loss) after taxation attributable to owners of the Company 2,677 (4,581)

Number of sharesGroup ’000 ’000

Number of shares outstanding at beginning of year 1,548,520 1,548,520Issue of shares 133,150 -Weighted average number of shares in issue during the year 1,681,670 1,548,520

Group 2013 2012

Earnings/(Loss) per share (cents)- Basic 0.16 (0.30)- Diluted 0.16 (0.30)

The dilutive potential ordinary shares of the Group relate to the share options granted by the Company.

The share options have been excluded from the diluted loss per share for the year ended 31 July 2013 calculation as they are anti-dilutive.

Diluted earnings per share was not presented for the year ended 31 July 2012 because the exercise prices of the share options exceeded the average market value of the Company’s shares for the period during which the options were outstanding.



23 COMMITMENTS

Operating lease commitments

The Group as lessor

The Group sublets part of its leasehold building to third parties. The subleases contain initial non-cancellable periods of two to three years with options to renew at market rates thereafter.

Non-cancellable operating lease rentals are receivable as follows:

Group 2013 2012$’000 $’000

Lease rentals receivable:Not later than one year 556 92Later than one year and not later than five years 30 107Later than five years - -

586 199

During the year ended 31 July 2013, rental income of $556,000 (2012 - $138,000) was recognised as other income in the income statement (Note 19(a)).

The Group as lessee

The Group leases a number of office premises and factory and warehouse facilities under operating leases.

Non-cancellable operating lease rentals are payable as follows:

Group 2013 2012$’000 $’000

Lease rentals payable:Not later than one year 1,569 1,680Later than one year and not later than five years 807 2,375Later than five years - -

2,376 4,055

24 CONTINGENT LIABILITIES AND GUARANTEES

Company2013 2012$’000 $’000

Banker’s guarantee provided to a subsidiary in respect of bank facilities 1,232 1,232Corporate guarantees given to subsidiaries in respect of credit facilities 21,000 13,758

22,232 14,990

No material loss is expected in respect of the guarantees granted to subsidiaries.



25 OPERATING SEGMENTS

For management reporting purposes, the Group is organised into the following reportable operating segments:

(a) Print Media - involved in the printing of financial research reports, annual reports, asset management reports, IPO prospectuses, corporate brochures, yearbooks, trade directories, magazines and other commercial publications and collaterals.

(b) Corporate - includes investment holdings and Corporate Office which incurs general corporate expenses and derives revenue from management fees and interest income from subsidiaries.

Segment accounting policies are the same as the policies described in Note 2.2. Intra- and inter-segment transactions were carried out at terms agreed between the parties during the financial year. Intra- and inter-segment transactions were eliminated on consolidation.

Segment revenue and expense:

Segment revenue and expenses are the operating revenue and expenses reported in the Group’s income statement that are directly attributable to a segment and the relevant portion of such revenue and expense that can be allocated on a reasonable basis to a segment.

Segment assets and liabilities:

Segment assets and liabilities include items directly attributable to a segment as well as those that can be allocated on a reasonable basis. Capital expenditure includes the total cost incurred to acquire plant and equipment directly attributable to the segment.

Group cash resources, financing activities and income taxes are managed on a group basis and are not allocated to operating segments. Unallocated assets comprise cash and cash equivalents. Unallocated liabilities comprise interest-bearing borrowings, finance lease liabilities and income tax payable.

The Group Chief Executive Officer (“Group CEO”) monitors the operating results of its operating segments for the purpose of making decisions about resource allocation and performance assessment.

Information regarding the results of each reportable segment is included below. Performance is measured based on segment profit/loss before income tax, as included in the internal management reports that are reviewed by the Group CEO.



25 OPERATING SEGMENTS (CONT’D)

Print Media Corporate Eliminations Consolidated2013 2012 2013 2012 2013 2012 2013 2012

$’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000

Sales to external customers 23,702 38,862 - - - - 23,702 38,862Inter-segment sales 3,859 3,029 - 7,816 (3,859) (10,845) - -Segment revenue 27,561 41,891 - 7,816 (3,859) (10,845) 23,702 38,862

Segment results 1,380 (4,190) 2,162 1,065 - - 3,542 (3,125)Finance costs (861) (1,433)Profit/(Loss) before taxation 2,681 (4,558)Income tax expense - (21)Profit/(Loss) for the year 2,681 (4,579)

Assets and liabilities:Segment assets 146,924 144,173 12,583 12,215 - - 159,507 156,388Unallocated assets 6,362 6,260Total assets 165,869 162,648

Segment liabilities 9,703 8,920 3,041 2,388 - - 12,744 11,308Income tax payable 20 17Deferred tax liabilities 20 23Unallocated liabilities 11,656 13,680Total liabilities 24,440 25,028

Other segment information:Capital expenditure 66 1,435 255 213 - - 321 1,648Depreciation of plant and equipment 2,267 2,809 59 68 - - 2,326 2,877Interest income - - - - - - (25) (87)Interest expense - - - - - - 861 961Plant and equipment written off 16 7 - - - - 16 7Loss/(Gain) on disposal of plant and equipment 61 (82) - (164) - - 61 (246)Impairment loss on trade receivables 344 7,203 - - - - 344 7,203Impairment loss on other receivables 160 1,010 - - - - 160 1,010Impairment loss on trade receivables reversed - (82) - - - - - (82)Exchange gain on project receivables - (273) - - - - - (273)Fair value adjustment for project receivables - 472 - - - - - 472

Segment revenue is analysed based on the location of customers regardless of where the services are produced. Total assets and capital expenditure are based on the geographical location of the assets.



25 OPERATING SEGMENTS (CONT’D)

The following table presents revenue, total assets and capital expenditure information based on the geographical location of customers and assets:

Revenue Total assets Capital expenditure2013 2012 2013 2012 2013 2012$’000 $’000 $’000 $’000 $’000 $’000

Singapore 11,978 9,697 74,516 76,989 297 806Malaysia 749 988 452 587 - 140Hong Kong 9,834 1,744 72,138 61,500 14 670Australia 74 924 64 25 - -China 808 24,163 18,565 23,355 3 32Others 259 1,346 134 192 7 -Total 23,702 38,862 165,869 162,648 321 1,648

26 FINANCIAL RISK MANAGEMENT

(a) Financial risk management objectives and policies

The Group is exposed to credit risk, market risk (including foreign currency and interest rate risks) and liquidity risk in the normal course of the Group’s business.

The Board of Directors has overall responsibility for the establishment and oversight of the Group’s risk management framework. The Group’s risk management policies are established to set out its overall business strategies, tolerance of risk and general risk management philosophy. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and the Group’s activities.

The carrying amounts of financial assets and financial liabilities at the reporting date by categories are as follows:

2013 2012The Group $’000 $’000Loans and receivable at amortised cost Trade receivables 46,110 44,821Other receivables 14,059 16,327Cash and cash equivalents 6,362 6,260

66,531 67,408

The Group $’000 $’000Available-for-sale Available-for-sale financial assets 7,657 7,657

2013 2012The Group $’000 $’000Financial liabilities at amortised cost *Trade and other payables 12,744 11,308Interest-bearing borrowings 11,015 12,156Finance lease liabilities 641 1,524

24,400 24,988

* excludes advance from customers



26 FINANCIAL RISK MANAGEMENT (CONT’D)

(a) Financial risk management objectives and policies (Cont’d)

2013 2012The Company $’000 $’000Loans and receivable at amortised cost Amounts due from subsidiaries (non-current) 23,792 22,001Amounts due from subsidiaries (current) 42,937 31,553Other receivables 4,433 4,363Cash and cash equivalents 4,285 5,008

75,447 62,925

The Company $’000 $’000Available-for-sale Available-for-sale financial assets 7,642 7,642

2013 2012The Company $’000 $’000Financial liabilities at amortised cost Other payables 3,041 2,388Amounts due to subsidiaries 35,161 28,808Finance lease liabilities 371 187

38,573 31,383

(b) Credit risk

Credit risk refers to the risk that counterparties may default on their contractual obligations resulting in financial loss to the Group. The Group’s exposure to credit risk arises primarily from trade and other receivables.

The Group manages credit risk by monitoring credit-worthiness and limiting the aggregate risk to any individual counterparty.

The Group has adopted a policy of only dealing with creditworthy counterparties as a means of mitigating the risk of financial loss from such defaults. The Group does not require collateral from its customers.

Cash balances and fixed deposits are placed with reputable financial institutions of high credit rating.

The Group establishes an allowance for impairment that represents its estimate of incurred losses in respect of trade and other receivables. The main components of this allowance are a specific loss component that relates to individually significant exposures.

The allowance account in respect of trade and other receivables is used to record impairment losses unless the Group is satisfied that no recovery of the amount owing is possible. At that point, the financial asset is considered irrecoverable and the amount charged to the allowance account is written off against the carrying amount of the impaired financial asset.

At the reporting date, 5 customers of a subsidiary collectively accounted for approximately 68% (2012 - 72%) of gross trade receivables of the Group. There are no other significant concentrations of credit risk to the Group.




(b) Credit risk (cont’d)

The credit risk for trade receivables after allowance for impairment losses by geography is as follows:

Group Company2013 2012 2013 2012

$’000 $’000 $’000 $’000By Geographical areasSingapore 1,411 1,811 - -Malaysia 138 66 - -Hong Kong 41,473 38,628 - -Australia 2 1 - -China 3,058 4,265 - -Others 28 50 - -

46,110 44,821 - -

Impairment losses

The table below is an analysis of trade receivables at 31 July:

Group Company2013 2012 2013 2012

$’000 $’000 $’000 $’000

Not past due and not impaired 6,343 10,279 - -Past due but not impaired (a) 39,767 34,542 - -Past due and impaired 7,721 7,377 - -

53,831 52,198 - -Less: Impairment losses (7,721) (7,377) - -Trade receivables, net 46,110 44,821 - -

Notes:

(a) Aging of receivables that are past due but not impaired Less than 3 months 1,225 2,656 - - More than 3 months but less than 6 months 555 7,166 - - More than 6 months but less than 12 months 9,563 10,315 - - More than 12 months 28,424 14,405 - -

39,767 34,542 - -




(b) Credit risk (Cont’d)

The following is an analysis of the movement in impairment losses in respect of trade receivables:

Group Company2013 2012 2013 2012$’000 $’000 $’000 $’000

Impairment loss - Trade receivablesAt beginning of the year 7,377 253 - -Amounts recovered - (82) - -Amount recognised 344 7,203 - -Exchange difference - 3 - -

7,721 7,377 - -

Impairment loss - other receivablesAt beginning of the year 1,010 - - -Amount recognised 160 1,010 - -

1,170 1,010 - -

As of 31 July 2013, trade and other receivables of the Group of $344,000 (2012 - $7,203,000) and $160,000 (2012: $1,010,000) respectively were impaired. The individually impaired receivables mainly relate to overdue customer balances which are not considered recoverable.

The impairment losses recognised and written back during the year are included as part of other expenses and other income in profit or loss.

Based on historic payment behaviour and extensive analyses of customer credit risk, apart from the above, management believes that no additional impairment allowance is necessary on the Group’s receivables past due and not past due as at 31 July 2013.

Exposure to credit risk

As the Company and the Group do not hold any collateral, 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 statement of financial position.

(c) Market risk

Market risk is the risk that changes in market prices, such as foreign exchange rates and interest rates will have on the Group’s income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimising the return on risk.

Foreign currency risk

The Group is exposed to currency risk on sales and purchases that are denominated in a currency other than the respective functional currencies of Group entities. The currencies in which these transactions primarily are denominated are the United States dollar (“USD”), Australian dollar (“AUD”), Hong Kong dollar (“HKD”) and Chinese Renminbi (“RMB”).

Such risks are managed by matching sales with corresponding purchases, and assets and liabilities in the same currencies. The Group does not enter into currency options and does not use forward exchange contracts to protect against volatility associated with foreign currency sales and purchases.




(c) Market risk (cont’d)

Foreign currency risk (cont’d)

The Group is also exposed to currency translation risk on its net investments in foreign operations. Such exposures are reviewed and monitored on a regular basis

The Group’s exposure to foreign currencies is as follows:

Group OtherUSD AUD NTD HKD RMB currencies Total

SGD equivalent $’000 $’000 $’000 $’000 $’000 $’000 $’000

At 31 July 2013Financial assets:Project receivable - - - - 8,265 - 8,265Trade and other receivables 25 102 - 279 12,118 235 12,759Cash and cash equivalents - 49 1 63 110 40 263

Financial liabilities:Trade and other payables - - - - (1,049) - (1,049)Net currency exposure 25 151 1 342 19,444 275 20,238

At 31 July 2012Financial assets:Project receivable - - - 8,766 - 8,766Trade and other receivables 47 98 - 59 1,333 6 1,543Cash and cash equivalents - - 1 - 15 1 17

Financial liabilities:Trade and other payables - - - - (3,457) - (3,457)Net currency exposure 47 98 1 59 6,657 7 6,869

Company OtherRMB HKD currencies Total

SGD equivalent $’000 $’000 $’000 $’000

At 31 July 2013Financial assets:Amounts due from subsidiaries 7,799 22,986 273 31,058

Financial liabilities:Amounts due to subsidiaries (1,229) (2,336) (216) (3,781)Net currency exposure 6,570 20,650 57 27,277

At 31 July 2012Financial assets:Amounts due from subsidiaries 3,748 21,244 250 25,242

Financial liabilities:Amounts due to subsidiaries (1,121) (2,153) (203) (3,477)Net currency exposure 2,627 19,091 47 21,765





Foreign currency risk (cont’d)

Sensitivity analysis - Foreign currency risk

A 5% strengthening of the above currencies against the functional currencies of the respective Group entities at the reporting date would have increased/decreased equity and profit or loss before tax by the amounts shown below. This analysis is based on foreign currency exchange rate variances that the Group considered to be reasonably possible at the end of the reporting period. The analysis assumes that all other variables, in particular interest rates, remain constant and does not take into account the associated tax effects.

A 5% weakening of the above currencies against the functional currencies of the respective Group entities would have had the equal but opposite effect on the above currencies to the amounts shown above, on the basis that all other variables remain constant.

Group OtherUSD AUD NTD HKD RMB currencies Total

SGD equivalent $’000 $’000 $’000 $’000 $’000 $’000 $’000

2013Increase / (Decrease) in profit before tax 1 8 - 17 972 (14) 984Increase / (Decrease) in equity 1 8 - 17 972 (14) 984

2012Decrease in loss before tax 2 5 - 3 333 - 343Increase / (Decrease) in equity 2 5 - 3 333 - 343

Company OtherRMB HKD currencies Total

SGD equivalent $’000 $’000 $’000 $’000

At 31 July 2013Increase in profit before tax 329 1,033 3 1,365Increase in equity 329 1,033 3 1,365

At 31 July 2012Increase in profit before tax 131 955 2 1,088Increase in equity 131 955 2 1,088





Interest rate risk

Interest rate risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Group is exposed to interest rate risk in respect of variable rate bank loans, bank overdrafts and fixed deposits.

Sensitivity analysis - Interest rate risk

A change of 50 basis points (bp) in interest rates on variable rate bank loans, bank overdrafts and fixed deposits at the reporting date would have increased/decreased equity and profit or loss before tax by the amounts shown below. This analysis has not taken into account the associated tax effects and assumes that all other variables, in particular foreign currency rates, remain constant.

Increase/(decrease)in profit before tax

Increase/(decrease)in equity

50 bp 50 bp 50 bp 50 bpincrease decrease increase decrease

Group $’000 $’000 $’000 $’000

31 July 2013Variable rate fixed deposits 30 (30) 30 (30)Borrowings (51) 51 (51) 51

(21) 21 (21) 21

Increase/(decrease)in loss before tax


50 bp 50 bp 50 bp 50 bpincrease decrease increase decrease

$’000 $’000 $’000 $’00031 July 2012Variable rate fixed deposits (30) 30 30 (30)Borrowings 56 (56) (56) 56

26 (26) (26) 26

Increase/(decrease)in profit before tax


50 bp 50 bp 50 bp 50 bpIncrease decrease increase decrease

Company $’000 $’000 $’000 $’000

31 July 2013Variable rate fixed deposits (21) 21 (21) 21

(21) 21 (21) 21

31 July 2012Variable rate fixed deposits 25 (25) 25 (25)

25 (25) 25 (25)

Market price risk

Price risk is the risk that the value of a financial instrument will fluctuate due to changes in market prices. The Group does not hold any quoted or marketable financial instruments, and is not exposed to any movement in market prices.




(d) Liquidity risk

The Group actively manages its debt maturity profile, operating cash flows and the availability of funding so as to ensure that all refinancing, repayment and funding needs are met. As part of the overall prudent liquidity management, the Group maintains sufficient level of cash to meet its working capital requirement. In addition, the Group strives to maintain a level of credit facilities deemed adequate by management to finance the Group’s operations and to mitigate the effects of fluctuations in cash flows.

The table below analyses the maturity profile of the Group’s and Company’s financial liabilities based on contractual undiscounted cash flows, including estimated interest payment.

Contractual undiscounted cash flows Carrying Less than Between 2 Overamount Total 1 year and 5 years 5 years

Group $’000 $’000 $’000 $’000 $’000

At 31 July 2013Trade and other payables 12,744 12,744 12,744 - -Interest-bearing borrowings 11,015 11,529 10,693 836 -Finance lease liabilities 641 751 332 330 89

24,400 25,024 23,769 1,166 89

At 31 July 2012Trade and other payables 11,308 11,308 11,308 - -Interest-bearing borrowings 12,156 12,383 10,750 1,633 -Finance lease liabilities 1,524 1,652 804 730 118

24,988 25,343 22,862 2,363 118

Contractual undiscounted cash flows Carrying Less than Between 2 Overamount Total 1 year and 5 years 5 years

Company $’000 $’000 $’000 $’000 $’000

At 31 July 2013Trade and other payables 3,041 3,041 3,041 - -Amounts due to subsidiaries 35,161 35,161 35,161 - -Finance lease liabilities 371 404 71 268 65

38,573 38,606 38,273 268 65

At 31 July 2012Trade and other payables 2,388 2,388 2,388 - -Amounts due to subsidiaries 28,808 28,808 28,808 - -Finance lease liabilities 187 212 33 134 45

31,383 31,408 31,229 134 45

Except for the cash flow arising from the intragroup financial guarantee (Note 13), it is not expected that the cash flows included in the maturity analysis could occur significantly earlier, or at significantly different amounts. At the reporting date, the Company does not consider it probable that a claim will be made against the Company under the guarantees.




(e) Fair values of financial instruments

Available-for-sale financial assets

At the reporting date, the fair value of the available-for-sale unquoted investment is measured using inputs for the asset that are not based on observable market data (unobservable inputs) (Level 3 Fair value hierarchy). It is determined by reference to the latest transaction price.

Long-term receivable and finance lease liabilities

The fair values of long-term receivable and finance lease liabilities are estimated by discounting expected future cash flows, discounted at market interest rates for similar types of lending, borrowing or lease agreements at the reporting date.

Financial assets and liabilities

The notional amounts of financial assets and liabilities with a maturity of less than one year (including trade and other receivables, balances with related parties, cash and cash equivalents, trade and other payables, current interest-bearing bank loans and bank overdraft) approximate their fair values because of the short period to maturity.

The aggregate net fair values of financial assets and liabilities which are not carried at fair value in the balance sheet as at 31 July are presented in the following table:

2013 2012Carrying Fair Carrying Fairamount value amount value

$’000 $’000 $’000 $’000GroupFinance lease liabilities 641 752 1,524 1,546

641 752 1,524 1,546

Company Finance lease liabilities 370 405 187 198

370 405 187 198




(e) Fair values of financial instruments (cont’d)

Fair value hierarchy

The table below analyses financial instruments carried at fair value, by valuation method. The different levels have been defined as follows:

Level 1 : quoted prices (unadjusted) in active markets for identical assets or liabilities;

Level 2 : 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); and

Level 3 : inputs for the assets or liability that are not based on observable market date.

Level 1 Level 2 Level 3 Total$’000 $’000 $’000 $’000

The Group31July 2013Available-for-sale financial assets - - 7,657 7,657

31 July 2012Available-for-sale financial assets - - 7,657 7,657

The Company31 July 2013Available-for-sale financial assets - - 7,642 7,642

31 July 2012Available-for-sale financial assets - - 7,642 7,642

During the year, there were no transfers of financial instruments between the Levels or movements in level 3 financial instruments.

Other financial assets and liabilities

The carrying amounts of financial assets and liabilities with a maturity of less than one year (including trade and other receivables, cash and cash equivalents, trade and other payables, loans and borrowings) approximate their fair values because of the short period to maturity.



27 CAPITAL MANAGEMENT

The Group’s objectives when 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. The Group strives to maintain a prudent capital structure. The capital structure of the Group comprises debt, which includes bank loans, bank overdraft, finance lease liabilities and total equity.

The Company and its subsidiaries are not subject to externally imposed capital requirements.

Management monitors capital based on a debt-to-capital ratio. This ratio is calculated as net debt divided by capital. Net debt comprises bank loans, bank overdraft, finance lease liabilities less cash and cash equivalents. Capital comprises total equity.

There were no changes in the Group’s approach to capital management during the year.

2013 2012Group $’000 $’000

Total debt- Bank loans and bank overdraft (Note 13) 11,015 12,156- Finance lease liabilities (Note 14) 641 1,524

11,656 13,680Less: Cash and cash equivalents (Note 10) (6,362) (6,260)Net debt (A) 5,294 7,420

Total equity (B) 141,429 137,620

Debt-to-capital ratio (times) (A)/(B) 0.037 0.054

28 SIGNIFICANT RELATED PARTY TRANSACTIONS

Identity of related parties

For the purpose of these financial statements, parties are considered to be related to the Group if the Group has the ability, directly or indirectly, to control the party or exercise significant influence over the party in making financial and operating decisions, or vice versa, or where the Group and the party are subject to common control or common significant influence. Related parties may be individuals or other entities.

In addition to the related party information disclosed elsewhere in the financial statements, the following significant transactions between the Group entities were carried out during the year on terms agreed between the parties:

Company2013 2012$’000 $’000

From subsidiaries: Management fee income 5,438 6,361Interest income on non-current receivables 1,355 1,278



29 DIVIDENDS

2013 2012Company $’000 $’000

Paid during the financial year:First and final tax exempt (one-tier) dividend proposed of 0.03 cents per share in 2011 paid in 2012 - 465

Proposed but not recognised as a liability as at 31 July:First and final tax exempt (one-tier) dividend proposed of 0.03 cents per share in 2013 525 -

30 SUBSEQUENT EVENTS

On 1 October 2013, the Company announced a proposed rights issue of up to up to 711,720,149 new ordinary shares in the issued and paid-up share capital of the Company (the “Rights Shares”) at an issue price of S$0.02 for each Rights Share, on the basis of two (2) Rights Shares for every five (5) ordinary shares in the capital of the Company held by the shareholders.


Distribution of Shareholdings

Size of ShareholdingsNo. of

Shareholders % No. of Shares %

1 - 999 309 1.90 21,721 0.001,000 - 10,000 10,293 63.20 35,638,781 2.04

10,001 - 1,000,000 5,551 34.09 631,627,911 36.121,000,001 and above 132 0.81 1,081,230,961 61.84

Total : 16,285 100.00 1,748,519,374 100.00

Twenty Largest Shareholders

No. Name No. of Shares %

1. MORGAN STANLEY ASIA (SINGAPORE) SECURITIES PTE LTD 429,842,027 24.582. OCBC SECURITIES PRIVATE LTD 62,060,018 3.553. BANK OF EAST ASIA (NOMINEES) PRIVATE LIMITED 48,769,000 2.794. CHENG FU ZAY 32,566,000 1.865. MAYBANK KIM ENG SECURITIES PTE. LTD. 31,782,300 1.826. UOB NOMINEES (2006) PTE LTD 29,320,000 1.687. UNITED OVERSEAS BANK NOMINEES (PRIVATE) LIMITED 21,708,545 1.248. PHILLIP SECURITIES PTE LTD 16,782,317 0.969. MAYBANK NOMINEES (SINGAPORE) PRIVATE LIMITED 14,531,000 0.8310. UOB KAY HIAN PRIVATE LIMITED 13,742,000 0.7911. DBS NOMINEES PTE LTD 13,595,425 0.7812. MERRILL LYNCH (SINGAPORE) PTE LTD 12,737,000 0.7313. DBS VICKERS SECURITIES (SINGAPORE) PTE LTD 12,588,000 0.7214. CITIBANK NOMINEES SINGAPORE PTE LTD 11,848,000 0.6815. HONG LEONG FINANCE NOMINEES PTE LTD 10,255,000 0.5916. LEONG NING CHAN @ LEONG MING CHAN 9,132,000 0.5217. ANG YU SENG 8,239,000 0.4718. OCBC NOMINEES SINGAPORE PRIVATE LIMITED 8,047,010 0.4619. KOH POH YEOK 7,889,000 0.4520. HSBC (SINGAPORE) NOMINEES PTE LTD 6,808,000 0.39 Total : 802,241,642 45.89

STATISTICS Of shAREhOldiNGsAs at 1 november 2013


SHAREHOLDERS’ iNfORmATiONAs at 1 november 2013

Number of equity securities : 1,748,519,374 sharesClass of equity securities : Ordinary sharesVoting rights : One vote per share

SUBSTANTIAL SHAREHOLDERS (As recorded in the Register of Substantial Shareholders)

Direct Interest % Deemed Interest %

Triumph Development Holdings Limited 137,943,313 7.89 – –

Dr Lee Tsu-Der (1) – – 137,943,313 7.89

K K Fong Holdings Pte Ltd (2) 45,539,000 2.60 – –

Fong Kah Kuen @ Foong Kah Kuen (3) 62,081,000 3.55 45,539,000 2.60

Foo Ai Lan (4) – – 107,620,000 6.15

Bioactive Enterprises Limited 89,285,714 5.11 – –

Tseng An Hsiung Andy (5) – – 149,787,714 8.57

Notes:

(1) Dr Lee Tsu-Der is deemed to be interested in the 137,943,313 shares held by Triumph Development Holdings Limited by virtue of Section 7 of the Companies Act, Cap. 50 (the “Act”).

(2) K K Fong Holdings Pte Ltd has a total beneficial interest in the 45,539,000 shares, of which 45,459,000 shares are held in the names of nominees.

(3) Fong Kah Kuen @ Foong Kah Kuen is deemed to be interested in the 45,539,000 shares held by K K Fong Holdings Pte Ltd by virtue of Section 7 of the Act.

(4) Foo Ai Lan is deemed to be interested in the 45,539,000 shares held by K K Fong Holdings Pte Ltd by virtue of Section 7 of the Act and 62,081,000 shares held by her spouse, Fong Kah Kuen @ Foong Kah Kuen.

(5) Tseng Ah Hsiung Andy is deemed to be interested in the 89,285,714 shares held by Bioactive Enterprises Limited and the 58,710,000 shares held by Wellspring Investment Ltd by virtue of Section 7 of the Act and the 1,792,000 shares held by his spouse, Mrs Tseng Shu Eng Eng.

PERCENTAGE OF SHAREHOLDING IN PUBLIC’S HANDS

76.68 % of the Company’s shares are held in the hands of public. Accordingly, the Company has complied with Rule 723 of the Listing Manual of the SGX-ST.


nOTICE Of ANNuAl GENERAl mEETiNG

NOTICE IS HEREBY GIVEN that the Annual General Meeting of Xpress Holdings Ltd (“the Company”) will be held at No. 1 Kallang Way 2A, Communications Techno Centre, Singapore 347495, on Friday, 29 November 2013, at 9.00 a.m. for the following purposes:

AS ORDINARY BUSINESS

1. To receive and adopt the Directors’ Report and the Audited Accounts of the Company for the year ended 31 July 2013 together with the Auditors’ Report thereon. (Resolution 1)

2. To declare a first and final tax exempt one-tier dividend of 0.03 cent per share for the year ended 31 July 2013 (2012: Nil). (Resolution 2)

3. To re-elect Mr Darlington Tseng Te-Lin, a Director of the Company retiring pursuant to Article 94(2) of the Articles of Association of the Company. (Resolution 3)

Mr Darlington Tseng Te-Lin will, upon re-election as a Director of the Company, remain as an Executive Director and will be considered non-independent.

4. To note that:-

(a) Dr Wang Kai Yuen, who is retiring pursuant to Article 94(2), has informed the Board that he does not wish to seek re-election and will cease to be a Director of the Company, the Chairman of the Audit, the Nominating and the Investment and Risk Management Committees and a member of the Remuneration Committee, at the conclusion of this Annual General Meeting; and

(b) Mr Khoo Choon Meng, who is retiring pursuant to Article 94(2), has informed the Board that he does not wish to seek re-election and will cease to be an Executive Director of the Company at the conclusion of this Annual General Meeting.

5. To approve the payment of Directors’ fees of S$199,000 for the year ended 31 July 2013 (2012: S$250,000). (Resolution 4)

6. To re-appoint Messrs Foo Kon Tan Grant Thornton LLP as the Auditors of the Company and to authorise the Directors of the Company to fix their remuneration. (Resolution 5)

7. To transact any other ordinary business which may properly be transacted at an Annual General Meeting.

AS SPECIAL BUSINESS

To consider and if thought fit, to pass the following resolutions as Ordinary Resolutions, with or without any modifications:

8. Authority to issue shares

That pursuant to Section 161 of the Companies Act, Cap. 50 and Rule 806 of the Listing Manual of the Singapore Exchange Securities Trading Limited, the Directors of the Company be authorised and empowered to:

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

(ii) make or grant offers, agreements or options (collectively, “Instruments”) that might or would require shares to be issued, including but not limited to the creation and issue of (as well as adjustments to) options, 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 of the Company may in their absolute discretion deem fit; and

(b) (notwithstanding the authority conferred by this Resolution may have ceased to be in force) issue shares in pursuance of any Instruments made or granted by the Directors of the Company while this Resolution was in force,

provided that:

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

(2) (subject to such calculation as may be prescribed by the Singapore Exchange Securities Trading Limited) for the purpose of determining the aggregate number of shares that may be issued under sub-paragraph (1) above, the total number of issued shares shall be based on the total number of issued shares in the capital of the Company at the time of the passing of this Resolution, after adjusting for:

(a) new shares arising from the conversion or exercise of any convertible securities;

(b) new shares arising from exercising share options or vesting of share awards which are outstanding or subsisting at the time of the passing of this Resolution; and

(c) any subsequent consolidation or subdivision of shares;

(3) in exercising the authority conferred by this Resolution, the Company shall comply with the provisions of the Listing Manual of the Singapore Exchange Securities Trading Limited for the time being in force (unless such compliance has been waived by the Singapore Exchange Securities Trading Limited) and the Articles of Association of the Company; and

(4) unless revoked or varied by the Company in a general meeting, such authority 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 earlier.

[See Explanatory Note (i)] (Resolution 6)

By Order of the Board

Yeo Poh Noi CarolineSecretarySingapore, 14 November 2013


Explanatory Notes:

(i) The Ordinary Resolution 6 in item 8 above, if passed, will empower the Directors of the Company, effective 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 or such authority is varied or revoked by the Company in a general meeting, whichever is the earlier, to issue shares, make or grant Instruments convertible into shares and to issue shares pursuant to such Instruments, up to a number not exceeding, in total, 50% of the total number of issued shares in the capital of the Company, of which up to 20% may be issued other than on a pro-rata basis to shareholders.

For determining the aggregate number of shares that may be issued, the total number of issued shares will be calculated based on the total number of issued shares in the capital of the Company at the time this Ordinary Resolution is passed after adjusting for 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 when this Ordinary Resolution is passed and any subsequent consolidation or subdivision of shares.

Notes:

1. A Member entitled to attend and vote at the Annual General Meeting (the “Meeting”) is entitled to appoint a proxy to attend and vote in his/her stead. A proxy need not be a Member of the Company.

2. The instrument appointing a proxy must be deposited at the Registered Office of the Company at No. 1 Kallang Way 2A, Communications Techno Centre, Singapore 347495 not less than forty-eight (48) hours before the time appointed for holding the Meeting.


XPRESS HOLDINGS LTD (Company Registration No. 199902058Z)(Incorporated in Singapore with limited liability)

PROXY FORM(Please see notes overleaf before completing this Form)

I/We,

of

being a member/members of Xpress Holdings Ltd (the “Company”), hereby appoint:

Name NRIC/Passport No. Proportion of Shareholdings

No. of Shares %

Address

and/or (delete as appropriate)

Name NRIC/Passport No. Proportion of Shareholdings

No. of Shares %

Address

or failing the person, or either or both of the persons, referred to above, the Chairman of the Meeting as my/our proxy/proxies to vote for me/us on my/our behalf at the Annual General Meeting (the “Meeting”) of the Company to be held on 29 November 2013 at 9.00 a.m. and at any adjournment thereof. I/We direct my/our proxy/proxies to vote for or against the Resolutions proposed at the Meeting as indicated hereunder. If no specific direction as to voting is given or in the event of any other matter arising at the Meeting and at any adjournment thereof, the proxy/proxies will vote or abstain from voting at his/her discretion. The authority herein includes the right to demand or to join in demanding a poll and to vote on a poll.

(Please indicate your vote “For” or “Against” with a tick [] within the box provided.)

No. Resolutions relating to: For Against

1 Directors’ Report and Audited Accounts for the year ended 31 July 2013

2 Payment of proposed first and final tax exempt one-tier dividend

3 Re-election of Mr Darlington Tseng Te-Lin as a Director

4 Approval of Directors’ fees amounting to S$199,000

5 Re-appointment of Messrs Foo Kon Tan Grant Thornton LLP as Auditors

6 Authority to issue new shares

Dated this day of 2013

Total number of Shares in: No. of Shares

(a) CDP Register

(b) Register of Members

Signature of Shareholder(s)or, Common Seal of Corporate Shareholder *Delete where inapplicable

IMPORTANT:

1. For investors who have used their CPF monies to buy Xpress Holdings Ltd’s shares, this Report is forwarded to them at the request of the CPF Approved Nominees and is sent solely 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 Meeting as an observer 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.

Notes :

1. Please insert the total number of Shares held by you. If you have 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 Shares. If you have Shares registered in your name in the Register of Members, you should insert that number of Shares. If you have 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. 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 in his/her stead. A proxy need not be a member of the Company.

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

4. Completion and return of this instrument appointing a proxy shall not preclude a member from attending and voting at the Meeting. Any appointment of a proxy or proxies shall be deemed to be revoked if a member attends the meeting in person, and in such event, the Company reserves the right to refuse to admit any person or persons appointed under the instrument of proxy to the Meeting.

5. The instrument appointing a proxy or proxies must be deposited at the registered office of the Company at No. 1 Kallang Way 2A, Communications Techno Centre, Singapore 347495 not less than 48 hours before the time appointed for the 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. Where the instrument appointing a proxy or proxies is executed by an attorney on behalf of the appointor, the letter or power of attorney or a duly certified copy thereof must be lodged with the instrument.

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 Meeting, in accordance with Section 179 of the Companies Act, Chapter 50 of Singapore.

General:

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 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 Shares entered against his name in the Depository Register as at 48 hours before the time appointed for holding the Meeting, as certified by The Central Depository (Pte) Limited to the Company.

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Annual Report 2013

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Annual Report 2013

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Xpress Holdings Ltd

No. 1 Kallang Way 2A Singapore 347495

Tel: +65 6880 2828Fax: +65 6880 2998

www.xpress.sg

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