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Annual Report 2011

Innovation Learning Ownership Vision Excellence Integrity Teamwork

To be the Best Digital Lifestyle Store in Asia. Delivering a delightful customers shopping experience and providing value adds to our stakeholders.

Total Commitment to Customers, unmatched service excellence and innovative services for their one stop Digital Lifestyle needs.

This document has been prepared by the Company and its contents have been reviewed by the Companys sponsor (Sponsor), Asian Corporate Advisors Pte. Ltd., for compliance with the relevant rules of the Singapore Exchange Securities Trading Limited (Exchange). The Companys Sponsor has not independently veried the contents of this document including the correctness of any of the gures used, statements or opinions made. This document has not been examined or approved by the Exchange and the Exchange assumes no responsibility for the contents of this document including the correctness of any of the statements or opinions made or reports contained in this document. The contact person for the Sponsor is Mr Liau H.K. Telephone number: 6221 0271

ANNUAL REPORT 2011

EPICENTRE HOLDINGS LIMITED

innovation
Provide fresh fresh, new & effective effe idea ideas, actions, services & value add to our customers, employees and stakeholders.

corporate prole
As an Apple Premium Reseller (APR), EpiCentre is the first-mover to deliver not only a complete range of Apple products, but also an industry leader in providing the most comprehensive variety of Apple and non-Apple branded accessories and innovative services, as well as complementary products under its own proprietary iWorld brand. Incorporated in Singapore in April 2002 and listed on Singapore Exchange in January 2008, EpiCentre is a pioneer in taking IT retail away from the usual geek haunts to an upscale mall at Orchard Road. Headquartered in Singapore, EpiCentre has regional presence in Singapore, Malaysia and China. EpiCentre offers customers a one-stop shop digital lifestyle shopping experience where customers are encouraged to touch, feel and test the range of Apple products offered. EpiCentre also provides after-sales support at its stores. This includes the iConcierge where support and guidance for Mac users can be obtained and a trade-in service, where Apple products can be brought in for valuation and traded-in for a new product. The EpiCentre philosophy revolves around innovation because with it comes fresh, new and effective ideas, actions and services, which will allow the brand to value-add to its customers, employees and stakeholders. EpiCentre founder, Mr Jimmy Fong Teck Loon was recently awarded the Overall Winner, Top Entrepreneur of the Year 2011, a Rotary-ASME Award.

contents.

01 corporate prole 02 chairmans statement 05 nancial highlights 06 board of directors 09 awards and achievements 10 ten reasons to buy from EpiCentre

12 store listing 14 corporate information 16 group structure 17 corporate governance report 31 nancial statements 90 statistics of shareholdings

92 addendum 112 notice of annual general meeting 119 notice of book closure date proxy form

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ANNUAL REPORT 2011

learning
Continuous learning. Open learning and sharing of knowledge with one another.

chairmans statement
Dear Valued Shareholders,

Jimmy Fong Teck Loon Executive Chairman and Chief Executive Ocer

FY 2011 has been a difficult year for the retail industry; fraught with uncertainty in the external environment precipitated by the fallout of the Euro crisis, the natural disasters in Queensland and Japan regions, and most recently, the downgrade of US credit ratings. Despite these challenges, Epicentre Holdings Limited (Epicentre or the Group), has managed to thrive in the face of adversity to forge ahead with yet another stellar performance. I am delighted to announce the Group has managed to exceed all expectations to mark an exceptional year, by turning in our best ever showing capped with unprecedented record-breaking achievements. For the financial year ended 30 June 2011, the Groups revenue surged to an all-time high of 84.6 per cent to S$162.6 million. Profit from operations is S$5.7 million, and net profit after tax is represented by a stellar increase of 40.1 per cent or S$4.7 million. This is largely attributed to a strong consumer sentiment and evergrowing demand for Apple products, which contributed S$66.8 million, or 89.7 per cent to the overall increase in revenue. Our operations in Malaysia has also racked up an equally vigorous display by registering revenue of S$23.5 million, up more than two-fold over S$10.5 million reported in the previous year. In view of the Groups profitable performance, I propose a full year dividend of 5 cents per share, subject to shareholders approval of the proposed final dividend of 4 cents per share. Moving forward, the Group maintains a conscientious perspective whilst widening our distribution network. This is reflected in our current strategic agenda, which oversees the opening of 4 new stores in Singapore and Malaysia by the end of FY 2012. The Group remains cautiously optimistic over market prospects, due to more revenue-generating Apple products, especially the highly anticipated new iPods and iPhones expected to launch within the near future. A reciprocally adequate number of stores will hold us in good stead towards meeting this projected demand.

In addition, China has been earmarked as a key target market that represents exponential potential for growth. In tandem with the Groups growth, we have embarked on Customer Centric Initiative (CCI) a national initiative by SPRING Singapore to develop and implement a Service Excellence Management System based on the Business Excellence Framework. In conjunction with this CCI, we are implementing a Customer Relationship Management (CRM) programme to build customer loyalty towards our brand. Our continual efforts to bring an innovative retail experience to our customers have resulted in a successful launch of the EpiCentre App. In the mid-term, we aim to complete the transformation from an Apple Premium Reseller to the holistic digital lifestyle brand that we are, with plans in the pipeline for a boutique-style concept store. I also believe that when you are successful you should be giving back to society. Being an advocate of corporate social responsibility, we have recently adopted the Childrens Cancer Foundation as our sponsored charity, and will be organising a Charity Run in November. Finally, I would like to express my heartfelt appreciation for the constant commitment that our management and staff have devoted to the Group. I would also like to thank all our customers, suppliers and partners for their dedicated support over the years, as we strive to add to our collaborative milestones towards achieving greater mutual profitable successes. Most importantly, I would like to thank the shareholders for their continued interest and confidence in our Group, as well as all the Board members for their invaluable insights and guidance.

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Operations Review FY 2011 proved to be a good year for or the Group with an overall increase in revenue to S$162.6 6 million from S$88.1 million in FY 2010, registering an increase ease of 84.6 per cent. Meanwhile, profit for FY 2011 rose t to o S$4.7 million from S$3.4 million in the previous year, translating nslating to a 40.1 per cent increase. The increase in revenue can be attributed to a strong and growing demand for Apple e products, fuelled by the launch of the iPad in FY 2011. Singapores operations posted continued nued growth, with an increase in revenue from S$77.5 million on to S$139.1 million in FY 2011. All six stores reported strong ong growth, aided by the increase in revenue from third p party arty complementary products, whose sales was once again, a in, propelled by the growing demand for Apple products. Furthermore, urthermore, two of the stores opened in FY 2010 were in operations erations for the whole period of FY 2011, leading to the increase ase in overall revenue. In Malaysia, revenue from its operations s in FY 2011 was S$23.5 million, more than double of the S$10.5 0.5 million it registered in FY 2010. This is due to strong consumer sumer sentiments and a constant high demand for Apple p products. roducts. Profit before tax climbed 75.7 per cent from S$0.4 million in FY 2010 to S$0.7 million in FY 2011 because of increase crease in revenue and tight control over operating expenses. Compared to FY 2010, inventory increased ased from S$8.1 million to S$10.1 million in FY 2011. This is following fo the increase in the number of stores. Also, an improvement ovement in consumer demand of Apple products was anticipated, ipated, leading to the corresponding increase in inventory. The ongoing sovereign debt crisis and nd uncertain recovery in the US threaten to affect consumer u mer sentiments and performance in the existing countries that hat the Group operates in. However, we will forge ahead, albeit beit along a cautious approach, and focus on widening distribution stribution networks in existing markets. There are currently plans ns to open a minimum of 4 new stores in Singapore and Malaysia laysia while venturing into the China market. The target is for or 2 new stores to be opened in Shanghai by the end of 2011 011 and possibly more by mid 2012.

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ownership
Take ake pride in your work; work be accoun accountable with your job. Act on the best interests of the company. Speed in execution and implementation.

nancial highlights
Revenue (S$M) 65.0 88.1 162.6 Net Profit Attributable to Shareholders (S$M) 1.8 3.4 4.7

2009

2010

2011

2009

2010

2011

Gross Profit (S$M) 10.9 14.3 24.2

Profit Before Tax (S$M) 2.1 4.1 5.7

2009

2010

2011

2009

2010

2011

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ANNUAL REPORT 2011

vision
Ability to think and plan ahead according to business needs.

board of directors
Jimmy Fong Teck Loon Executive Chairman & Chief Executive Officer Mr Fong is our Executive Chairman and Chief Executive Officer and was the founder of the Group. He began his career in 1991 and worked with Oversea-Chinese Banking Corporation as an IT systems auditor before moving on to hold various senior positions in blue-chip companies such as Citibank, Schlumberger Oilfield Services, Sun Microsystems and I.B.M. World Trade Asia Corporation. Prior to establishing our Company in 2002, he was the Director of Finance for the Asia Pacific region with Intensia Asia Pacific. Appointed to the Board on 9 April 2002, Mr Fong is responsible for setting the strategic direction, tracking the financial and profitability growth of the Group, as well as managing the business and overseeing all aspects of the daily operations of the Company. He holds a Bachelor of Commerce and Administration from the Victoria University of Wellington, and a Master of Business Administration from Ms Yeo is our Executive Director who was appointed to our Board on 21 February 2007. She was re-elected as a Director on 30 October 2008. She oversees the human resource department of our Group and has more than 10 years of experience in human resource. In 2005, she first joined our Group as a human resource executive and was promoted to a personal assistant in 2006. She holds a Diploma in Human Resource Management from the International Business and Management Education Centre. Brenda Yeo Executive Director the Rutgers State University of New Jersey. He was recently awarded the Outstanding Entrepreneur Award at the Asia Pacific Entrepreneurship Awards 2011; Overall Winner and Winner of EYA for Info-Communications Technology 2011 at The Entrepreneur of the Year 2011 a Rotary-ASME Award. He was re-elected as the Director on 29 October 2010.

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From left to right: Mr Siow Chee Keong, Ms Brenda Yeo, Mr Jimmy Fong Teck Loon, Mr Ron Tan Aik Ti, Mr Azman Hisham Bin Jaafar

Siow Chee Keong Lead Independent Director Mr Siow is our Lead Independent Director and was appointed to our Board on 10 December 2007. He was re-elected as the Director on 30 October 2009. He has many years of audit and management experience in operations, business systems, information technology, finance and accounting with commercial and financial organisations in Canada, USA, England and Singapore. He is currently the Managing Director of JF Virtus Pte. Ltd. and offers audit, risk and consultancy services to listed companies. Mr Siow qualified as a Chartered Certified Accountant with the Association of Chartered Certified Accountants in 1981, a Certified Internal Auditor with the Institute of Internal Auditors Inc. in 1985, a Certified General Accountants with the Certified General Accountants of Canada in 1990 and is a member of the Institute of Certified Public Accountants of Singapore. He graduated from the University of Warwick, England, with a Master of Business Administration. Mr Siow is on the board of several listed and private companies, and is a member of the Singapore Institute of Directors. The listed companies are Darco Water

Technologies Limited, CMZ Holdings Limited, Sunvic Chemicals Holdings Limited and Shanghai Asia Holdings Limited. Ron Tan Aik Ti Independent Director Mr Tan was appointed to our Board on 3 August 2010. He was re-elected as the Director on 29 October 2010. Exercising a wealth of experience in licensing, merchandising, retail and distribution markets, he is currently the Partner in First Alverstone Partners and a Director of Friven Asia Production, the exclusive Asian licensee and merchandiser of the popular Hi-5 Group. Friven Asia Production (FAP) was acquired in March 2009 by a SGXlisted company Friven & Co. A former Singapore Governments Scholar, Mr Tan has also served in various distinguished and management positions at Media Corporation of Singapore, LexisNexis Asia Pacific in Singapore and Hong Kong, and the Singapore Tourism Board/Economic Development Board of Singapore. He brings with him a balanced yet rare mix of public, corporate, and entrepreneurial experiences. Mr Tan holds a Bachelor of Science degree from the University of Hawaii, Manoa.

Azman Hisham Bin Jaafar Independent Director Mr Azman was appointed to our Board on 3 November 2010. He is an Advocate & Solicitor, and Partner of RHT Law LLP, heading the firms Indonesia Practice. He has advised and represented clients in numerous transactions involving mergers and acquisitions, corporate finance, mining, and oil and gas transactions in Singapore, China and Indonesia. He fluently speaks and writes Mandarin and Bahasa Indonesia, and is a guest tutor at the National University of Singapore Law Facultys Legal Case Studies programme. He is also a regular speaker at seminars on mergers and acquisitions, initial public offerings and regulatory compliance in Singapore and Indonesia. Mr Azman was named AsiaLaw Leading Lawyers 2009 Capital Markets/Corporate Finance and Corporate Governance. In 2007, he was awarded a Public Service Medal (Pingat Bakti Masyarakat, PBM) by the President of the Republic of Singapore in recognition of his contribution as a councillor with Northeast Community Development Council, from which he recently received a Long Service Award. He obtained LL.B (Hons) from the National University of Singapore.

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1 - The Entrepreneur of the Year 2011- A Rotary - ASME Award, Overall Winner 2 - The Entrepreneur of the Year 2011- A Rotary - ASME Award, Winner of EYA for Info-Communications Technology 3 - Asia Pacific Entrepreneurship Awards 2011 - Outstanding Entrepreneurship Award 4 - Singapore Prestige Brand Award 2010 - Overall Winner, Promising Brand 5 - Apple South Asia Conference 2010 - Platinum Partner Award 6 - Singapore Prestige Brand Award 2009 - Promising Brand Winner 7 - Apple Top 3 Merchandising Award 2009 8 - Apple Top APR POS Asia 2008 9 - Apple Top POS Asia 2007 10 - Apple Best POS Asia 2006 11 - Best Apple Centre 2003 - Gold Singapore 2003

awards and achievements

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ANNUAL REPORT 2011

excellence
Perform 2Q & 1T. Quality service to customers. Quantity to sales. Transcend beyond job scope.

reasons to buy from EpiCentre


Membership Privileges Training Workshops

Trade-in Services

iConcierge Services

30-Day Extended Exchange Period

Best Value Deals

Great Locations

Latest and Widest Range of Apple Accessories

Qualified and Certified Mac Evangelists

Authorised Repair Centre

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store listing singapore

EpiCentre@Wheelock Place
501 Orchard Road #02-20/23, Wheelock Place Singapore 238880 Tel : +65 6238 9378

EpiCentre@Suntec City
3 Temasek Boulevard #02-179, Suntec City Mall Singapore 038983 Tel : +65 6835 8168

EpiCentre@Bugis Junction
200 Victoria Street #01-55/56/57, Bugis Junction Singapore 188021 Tel : +65 6338 4855

EpiCentre@ION Orchard
2 Orchard Turn #B3-14, ION Orchard Singapore 238801 Tel : +65 6509 5028

EpiCentre@313 Somerset
313 Orchard Road, #01-19/20, 313@Somerset Singapore 238895 Tel: +65 6509 5043

EpiCentre@Marina Bay Sands


2 Bayfront Avenue #B2-100A The Shoppes at Marina Bay Sands Singapore 018972 Tel: +65 6688 7070

china
EpiCentre@Yu Fashion Garden
L126 & 127, Yu Fashion Garden, No. 168 Middle Fangbang Road Huangpu District Shanghai Tel : +86 21 3376 7500 Fax : +86 21 3376 7501

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malaysia

EpiCentre@Pavilion KL
168 Jalan Bukit Bintang Lot 5.24.07, Level 5, Pavilion 55100 Kuala Lumpur Tel : +603 2141 6378

EpiCentre@Lim Kok Wing Campus Store


Lot 27, Innovasi 1-1, Jalan Teknorat 1/1 63000, Cyberjaya, Selangor Darul Ehsan Tel: +603 83180300

EpiCentre@IOI Mall
Lot E27 & 28, Ground Floor, IOI Mall, Batu 9, Jalan Puchong, Bandar Puchong Jaya 47100, Puchong, Selangor Darul Ehsan Tel: +603 8075 0870/0871

EpiCentre@Fahrenheit88
Lot G-23 Ground Floor, Fahrenheit88 179 Jalan Bukit Bintang 55100 Kuala Lumpur Tel : +603 2143 8001/8002 Fax : +603 2143 8003

EpiCentre@e@Curve
Lot G36 -38, Ground Floor e@Curve, No. 2A, Jalan PJU 7/3 Mutiara Damansara 47810 Petaling Jaya Tel : +603 7726 1006/2006 Fax : +603 7726 3006

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ANNUAL REPORT 2011

integrity
Be honest; keep kee to p promise a and deliver as promised.

corporate information

FULL NAME OF COMPANY Epicentre Holdings Limited COMPANY REGISTRATION NUMBER 200202930G WEBSITE www.epicentreasia.com BOARD OF DIRECTORS Jimmy Fong Teck Loon (Executive Chairman and Chief Executive Officer) Brenda Yeo (Executive Director) Siow Chee Keong (Lead Independent Director) Ron Tan Aik Ti (Independent Director) Azman Hisham Bin Jaafar (Independent Director) AUDIT COMMITTEE Siow Chee Keong (Chairman) Ron Tan Aik Ti Azman Hisham Bin Jaafar

NOMINATING COMMITTEE Azman Hisham Bin Jaafar (Chairman) Jimmy Fong Teck Loon Ron Tan Aik Ti Siow Chee Keong REMUNERATION COMMITTEE Ron Tan Aik Ti (Chairman) Siow Chee Keong Azman Hisham Bin Jaafar REGISTERED OFFICE 37 Jalan Pemimpin #07-04 Clarus Centre Singapore 577177 Telephone: +65 6601 9100 Facsimile: +65 6601 9133 COMPANY SECRETARIES Chew Kok Liang Nathaniel Chelvarajah Vanniasingham

AUDITORS BDO LLP Public Accountants and Certified Public Accountants 21 Merchant Road #05-01, Royal Merukh S.E.A. Building Singapore 058267 Partner-in-charge: Lew Wan Ming (Appointed since financial year ended 30 June 2009) SHARE REGISTRAR & SHARE TRANSFER OFFICE Boardroom Corporate & Advisory Services Pte. Ltd. 50 Raffles Place #32-01, Singapore Land Tower Singapore 048623 Telephone: +65 6536 5355 Facsimile: +65 6536 1360 PRINCIPAL BANKERS Oversea-Chinese Banking Corporation Limited Citibank, N.A., Singapore Branch Standard Chartered Bank

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teamwork
Be proactive to achieve Companys vision, mission & objective. Trust in each others professionalism.

group structure
Epicentre Holdings Limited

Epicentre Pte. Ltd. 100%

Epicentre Solutions Pte. Ltd. 100%

Epi Lifestyle Pte. Ltd. 100%

Epicentre Lifestyle Sdn. Bhd. 100%

Epicentre (Shanghai) Co., Ltd. 70%

group of companies
SINGAPORE Epicentre Holdings Limited
37 Jalan Pemimpin #07-04 Clarus Centre Singapore 577177 Telephone: +65 6601 9100 Facsimile: +65 6601 9133

Epicentre Solutions Pte. Ltd.


37 Jalan Pemimpin #07-04 Clarus Centre Singapore 577177 Telephone: +65 6601 9100 Facsimile: +65 6601 9133

MALAYSIA Epicentre Lifestyle Sdn. Bhd.


Central Plaza Suite 1706 17th Floor, 34 Jalan Sultan Ismail, Kuala Lumpur, Malaysia Telephone: +603 2141 1787 Facsimile: +603 2141 3787

Epicentre Pte. Ltd.


37 Jalan Pemimpin #07-04 Clarus Centre Singapore 577177 Telephone: +65 6601 9100 Facsimile: +65 6601 9133

Epi Lifestyle Pte. Ltd.


37 Jalan Pemimpin #07-04 Clarus Centre Singapore 577177 Telephone: +65 6601 9100 Facsimile: +65 6601 9133

CHINA Epicentre (Shanghai) Co., Ltd.


Pudong District No 488 Yao Hua Road Unit 1801A Shanghai, China Telephone: +86 21 3376 7500 Facsimile: +86 21 3376 7501

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corporate governance report

The Board of Directors (the Board) of Epicentre Holdings Limited (the Company) is committed to ensure that high standards of corporate governance and transparency are practiced for the protection of shareholders interest. This report outlines the corporate governance framework and practices of the Company with specific reference to the principles and guidelines of the Singapore Code of Corporate Governance 2005 (the Code). BOARD MATTERS The Boards 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. The Board works with Management to achieve this and the Management remains accountable to the Board.

The Board oversees the business affairs of the Company. It carries out the function by assuming responsibility for effective stewardship and corporate governance of the Company and the Group. The primary role of the Board is to protect and enhance long-term shareholders value. Generally, the responsibilities of the Board include: Set the corporate strategy and directions to the Group; Approve the policies, strategies and financial objectives of the Group; Establish and oversee the framework for internal controls and risk management and ensure good corporate governance; Monitor the Board composition, Director selection and Board processes and performance; Review and monitor Executive Directors remuneration; Review business results including management performance, monitoring budgeting control and corrective actions (if required); Approve annual budgets, major funding proposals, investment and divestment proposals; and Remove and appoint the Company Secretary.

Regular meetings are held to review the performance of the business and approve the public release of periodic financial results. Ad-hoc meetings have been held to discuss certain matters as and when necessary. Matters which specifically require Board approval are those involving material acquisitions and disposals of assets, corporate or financial restructuring, dividends, share issuances and other shareholder matters. Directors are updated regularly on key regulatory and accounting changes at Board meetings. Directors are encouraged to undergo relevant training to enhance their skills and knowledge, especially on new laws and regulations affecting the Groups operations.

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corporate governance report

Board Committees The Board has formed Board Committees namely the Audit Committee (AC), the Nominating Committee (NC) and the Remuneration Committee (RC) to assist in carrying out and discharging its duties and responsibilities efficiently and effectively. These Committees function within clearly defined terms of reference and operating procedures and are reviewed on a regular basis. The effectiveness of each Committee is also constantly reviewed by the Board. The Chairman explained to the new Directors their duties and obligations before they come on board. However, no formal letters have been given to newly appointed Directors. For good governance, the Company intends to formalize the letters of appointment. The attendance of the Directors and various Board Committees held as well as the frequency of such meetings during the financial year ended 30 June 2011 are as follows: Audit Committee 2 Remuneration Committee 4 Nominating Committee 2

Board Number of meetings held Name of Director Jimmy Fong Teck Loon Brenda Yeo Siow Chee Keong Ron Tan Aik Ti Lee Keen Whye(1) Liu Zhipeng(2) Azman Hisham Bin Jaafar(3)
* By invitation (1) (2) (3) Resigned on 29 October 2010 Resigned on 5 January 2011 Appointed on 3 November 2010

Number of meetings attended 4 4 4 4 1 1 3 2* 2* 2 2 1 1 1 3* 3* 4 4 1 1 2 2 2* 2 2 1 1 1

Besides the attendance at meetings, the Board also measures the contribution of Directors in other forms including periodic reviews, provision of guidance and advice on various matters relating to the Group on an ongoing basis.

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corporate governance report

Board Composition and Balance 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 Boards decision making. The Board comprises three Independent Directors and two Executive Directors and the members are as follows: Executive Directors Mr Jimmy Fong Teck Loon Ms Brenda Yeo Non-Executive Directors Mr Siow Chee Keong Mr Ron Tan Aik Ti Mr Azman Hisham Bin Jaafar Lead Independent Director Independent Director Independent Director Executive Chairman and Chief Executive Officer Executive Director

The composition of the Board is reviewed on an annual basis by the NC to ensure that the Board has the appropriate mix of expertise and experience, and collectively possess the necessary core competencies for effective functioning and informed decision-making. The criterion for independence is based on the definition given in the Code. The Board considers an independent Director as one who has no relationship with the Company, its related companies or officers that could interfere, or be reasonably perceived to interfere, with the exercise of the Directors independent judgment of the conduct of the Groups affairs. As at current date, Independent Directors comprise more than one-third of the Boards composition. The Board has undertaken a full review of its composition. It is of the opinion that, with a significant majority of the Directors being Non-Executive and Independent Directors, the Board continues to exercise objective judgment independently of the Management. Key information regarding the Directors is given in the Board of Directors section of the annual report. Particulars of interests of Directors who held office at the end of the financial year in shares, warrants and share options in the Company and in related corporations are set out in the Directors Report on pages 31 to 32 of the annual report. Non-Executive Directors meet regularly without Management present. Non-Executive Directors are encouraged to constructively challenge and help to develop the management reporting framework and review management performance.

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corporate governance report

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 companys business which will ensure a balance of power and authority, such that no one individual represents a considerable concentration of power. The Board is of the view that it is in the best interests of the Group to adopt a single leadership structure, so as to ensure the decision-making process of the Group would not be unnecessarily hindered. As such, the Board believes that there are adequate safeguards in place against uneven concentration of power and authority in a single individual. The respective Board Committees vet all major decisions made by the Chief Executive Officer (CEO). Mr Jimmy Fong Teck Loon, is the Executive Chairman and CEO of the Company. As Chairman, he is primarily responsible for overseeing the overall management and strategic development of the Company. He schedules Board meetings as and when required and sets the agenda for the Board meetings. As the CEO, he formulates the policies and supervises the business operations. He also sets guidelines and ensure the quality, quantity, accuracy, and the timelines of information flow between the Board, Management and shareholders of the Company and also encourages the constructive relationship within the Board between Executive and Non-Executive Directors, and between the Board and the Management. The Company has also Mr Siow Chee Keong as its Lead Independent Director pursuant to the recommendation of the Code. The Lead Independent Director serves as a principal liaison on Board issues between the Independent Directors and the Chairman of the Board. The Lead Independent Director is available to shareholders who have concerns which contact through the normal channels of the Chairman, CEO, Executive Directors or Chief Financial Officer have failed to resolve or for which such contact is inappropriate. The Chairman also assists to facilitate the effective contribution of Non-Executive Directors and promote high standard of corporate governance taking into consideration of their expertise in different discipline. Board Membership Principle 4: There should be a formal and transparent process for the appointment of new directors to the Board. The NC comprises the following four members, three of whom are Independent Directors: Mr Azman Hisham Bin Jaafar Mr Jimmy Fong Teck Loon Mr Siow Chee Keong Mr Ron Tan Aik Ti Chairman Member Member Member

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corporate governance report

The NC functions under the terms of reference which sets out its responsibilities as follows: To recommend to the Board on all new Board appointments, re-appointments and re-nominations; To ensure that Independent Directors meet the Codes guidelines and criteria; To assess the effectiveness of the Board as a whole and the effectiveness and contribution of each Director to the Board; and To ensure that the Directors with multiple board representation commit adequately in carrying out his/her duties effectively. The independence of each Director is reviewed annually by the NC based on the Codes definition of what constitute an Independent Director. The Company has in place policies and procedures for the appointment of new Directors including the description on the search and nomination process. For the selection and appointment of new Directors, the NC makes recommendation based on merit, track records, experience, age, capabilities, industry knowledge and other pertinent criterion. The Articles of Association of the Company require one-third of the Board to retire from office at each Annual General Meeting (AGM). Accordingly, the Directors will submit themselves for re-nomination and re-election at regular intervals of at least once every three years. It was also provided in the Articles of Association of the Company that the Directors appointed during the course of the year must retire and submit themselves for re-election at the next AGM following their appointments. 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 examines the Boards size to satisfy that it is appropriate for effective decision making, taking into account the nature and scope of the Companys operations. The NC has in place an evaluation process for each Director to evaluate the performance of the Board which would be reviewed by the NC. The NC also put in place a peer review of individual Directors performance. The evaluation exercise on the performance of the Board and the peer review evaluation of individual Directors performance in FY 2011 were conducted. Through the evaluation process and the intensity of participation by Directors/members at the Board and Board Committees meetings and their quality of contribution, the NC is satisfied that the Directors are able to continue contributing effectively. Ms Brenda Yeo, Executive Director and Mr Azman Hisham Bin Jaafar, Non-Executive Independent Director are due to retire at the forthcoming AGM in accordance with the Articles of Association of the Company. Arising from the NCs evaluation of the Board and individual Directors performance which among other factors, includes their attendance at Board meetings and contributions to the Company, the NC recommends to the Board the nomination of these Directors for re-election at the forthcoming AGM.

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corporate governance report

We noted that the performance evaluation should consider the performance of the Companys share price over a five-year period vis--vis the Singapore Straits Times Index. We did not adopt it and have instead bench mark the performance against industry peers and adopt other criteria that include revenue growth year-on-year and gross margin as well as profit margin. 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. All Directors are from time to time furnished with information concerning the Company to enable them to be fully cognizant of the decisions and actions of the Companys executive management. The Board has unrestricted access to the Companys records and information. Senior members of Management staff are available to provide explanatory information in the form of briefings to the Directors or formal presentations in attendance at Board meetings, or by external consultants engaged on specific projects. The Board has separate and independent access to the Company Secretaries and to other senior Management executives of the Company and of the Group at all times in carrying out their duties. The Company Secretaries or their representatives attend all Board and Board Committees meetings and ensure that Board procedures are followed and that applicable rules and regulations are complied with. The minutes of all Board Committees meetings are circulated to the Board. Each Director has the right to seek independent legal and other professional advice, at the Companys expense, concerning any aspect of the Groups operations or undertakings in order to fulfill their duties and responsibilities as Directors. 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 RC comprises the following three members, all of whom are Independent Directors: Mr Ron Tan Aik Ti Mr Siow Chee Keong Mr Azman Hisham Bin Jaafar Chairman Member Member

The RC recommends to the Board a framework of remuneration for the Directors and Executive Officers, and determine specific remuneration package for each Executive Director. The recommendations are submitted for endorsement by the Board.

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corporate governance report

All aspects of remuneration, including but not limited to Directors fees, salaries, allowances, bonuses and benefits in kind, are covered by the RC. Each RC member will abstain from voting on any resolution in respect of his remuneration package. The main functions of the RC are: Review and recommend to the Board, a framework of remuneration packages and terms of employment of the Executive Directors and key executives of the Company; Determine the specific remuneration package of each Executive Director; and Review the appropriateness of remuneration package awarded to Non-Executive Directors.

The recommendations of the RC would be submitted to the Board for endorsement. The RC is provided with access to expert professional advice on remuneration matters as and when necessary. The expense of such services is borne by the Company. 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 companies should avoid paying more than is necessary for this purpose. A significant proportion of executive directors remuneration should be structured so as to link rewards to corporate and individual performance. In setting the remuneration packages, the RC takes into consideration the remuneration and employment conditions within similar industry and in comparable companies. As part of its review, the RC ensures that the performance related elements of remuneration form a significant part of the total remuneration package of Executive Directors and is designed to align the Directors interests with those of shareholders and link rewards to corporate and individual performance. The RC also reviews all matters concerning the remuneration of Non-Executive Directors to ensure that the remuneration commensurate with the contribution and responsibilities of the Directors. The fee structure for Directors is assessed by the Board annually after benchmarking such fees against those in the public and private sectors. The Company believes that the fees are competitive and its Directors are adequately compensated in line with market norms. None of the Non-Executive Directors has any service contracts with the Company and they receive remuneration by way of Directors fees. These Directors fees are proposed by the Company as a lump sum to be approved by the shareholders at the AGM. The Executive Chairman and CEO had a service agreement which covers the terms of employment, salaries and other benefits. It has a fixed term of five years with effect from 1 January 2011 and will continue for a further term of another five years unless otherwise terminated by either party giving not less than 6 months notice in writing.

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EPICENTRE HOLDINGS LIMITED

ANNUAL REPORT 2011

corporate governance report

There is no service contract for the Executive Director, Ms Brenda Yeo. The Company has appointed AON Hewitt Consulting to review the remuneration packages of the senior Management and the Executive Directors and they are in the midst of doing it. The Company has an existing performance share plan, namely, Epicentre Holdings Limited Share Plan (the Plan) for the eligible participants. The Plan will provide eligible participants with an opportunity to participate in the equity of the Company and to increase the Companys flexibility and effectiveness in its continuing efforts to reward, retain and motivate employees to improve their performance. 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 companys 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. The details of the remuneration of Executive and Non-Executive Directors of the Company, disclosed in the relevant bands, for services rendered during the financial year ended 30 June 2011 are as follows: Fixed Remuneration Band Above $750,000 Jimmy Fong Teck Loon Between $250,000 to $500,000 Brenda Yeo Below $250,000 Siow Chee Keong Ron Tan Aik Ti Lee Keen Whye (resigned on 29 October 2010) Liu Zhipeng (resigned on 5 January 2011) Azman Hisham Bin Jaafar (appointed on 3 November 2010) _ 100% _ 100% _ _ _ 100% 100% 100% 100% _ _ 100% 100% 100% 100% 66% 7% 27% 100% 40% 2% 58% 100% Salary Directors Fees Performance Related Income/Bonus Total

The Code requires the disclosure of the remuneration of, at minimum, the top five executives who are not Directors and who are within the remuneration band of $250,000. Given the highly competitive market the Company operates in, the names of the top five executives are not disclosed.

ANNUAL REPORT 2011

EPICENTRE HOLDINGS LIMITED

25

corporate governance report

The range of the gross remuneration of the top five key executives of the Group for the financial year ended 30 June 2011 is shown below: Remuneration Band Number of Key Executives 2011 Below $250,000 5 2010 5

Ms Brenda Yeo, Executive Director, is the spouse of Mr Jimmy Fong Teck Loon, Executive Chairman and the CEO as well as the substantial shareholder. Save as disclosed, no employee of the Group was an immediate family member of the Directors or Substantial Shareholders whose remuneration has exceeded $150,000 during the financial year ended 30 June 2011. ACCOUNTABILITY AND AUDIT Accountability Principle 10: The Board should present a balanced and understandable assessment of the companys performance, position and prospects. The Board is accountable to the shareholders and is mindful of its obligations to furnish timely information and to ensure full disclosure of material information to shareholders in compliance with statutory requirements and the Listing Manual, Section B: Rules of Catalist of the Singapore Exchange Securities Trading Limited (the SGX-ST). Price sensitive information is publicly released either before the Company meets with any group of investors or analysts or simultaneously with such meetings. Financial results and annual reports are announced or issued within legally prescribed periods. In turn, Management of the Company provides the Board with balanced and understandable accounts of the Groups performance, financial position and business prospects on a quarterly basis. Audit Committee Principle 11: The Board should establish an Audit Committee with written terms of reference which clearly set out its authority and duties. The AC comprises the following three members, all of whom are Independent Directors: Mr Siow Chee Keong Mr Ron Tan Aik Ti Mr Azman Hisham Bin Jaafar Chairman Member Member

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EPICENTRE HOLDINGS LIMITED

ANNUAL REPORT 2011

corporate governance report

The AC meets regularly with the Groups external and internal auditors and its Management to review accounting, auditing and financial reporting matters so as to ensure that an effective system of control is maintained in the Group. The AC also monitors proposed changes in accounting policies, reviews the internal audit functions and discusses the accounting implications of major transactions. In addition, it advises the Board regarding the adequacy of the Groups internal controls and the contents and presentation of its reports. The Board considers that the members of the AC are appropriately qualified to fulfil their responsibilities as the members bring with them invaluable managerial and professional expertise in the financial, legal and industry domain. The AC functions under the terms of reference which sets out its responsibilities as follows: Review the audit plans of the external and internal auditors; Review the auditors reports and evaluate the Companys and the Groups system of internal controls; Review the effectiveness and adequacy of internal audit function which is outsourced to a professional firm; Review the co-operation given by the Companys officers to the internal and external auditors; Review the financial statements of the Companys and the Group before submission to the Board; and Nominate and review the appointment or re-appointment of external and internal auditors.

The AC has the power to conduct or authorise investigations into any matters within the ACs scope of responsibility, which has or is likely to have material impact on the Groups operating and financial results. The AC is authorised to obtain independent professional advice if it deems necessary in the discharge of its responsibilities. Such expenses are borne by the Company. Each member of the AC abstains from voting any resolutions in respect of matters he is interested in. The AC has full access to and co-operation of the Management and has full discretion to invite any Director or Executive Officer to attend its meetings, and has been given reasonable resources to enable it to discharge its functions. The AC meets with the external and internal auditors, separately without the presence of Management, at least once a year. The AC reviews the independence of the external auditors annually. The AC, having reviewed the range and value of non-audit services rendered by the external auditor, Messrs BDO LLP, was satisfied that the nature and extent of such services will not prejudice the independence and objectivity of the external auditors. The AC recommended that Messrs BDO LLP be nominated for re-appointment as auditors of the Company at the forthcoming AGM. The Company confirms that it is in compliance with Rules 712, 715 and 716 of the Listing Manual Section B: Rules of Catalist of the SGX-ST as the Company and its Singapores subsidiaries are audited by Messrs BDO LLP whilst its Malaysian subsidiary is audited by BDO Malaysia.

ANNUAL REPORT 2011

EPICENTRE HOLDINGS LIMITED

27

corporate governance report

In July 2010, the Singapore Exchange Limited and Accounting and Corporate Regulatory Authority had launched the Guidance to Audit Committees on Evaluation of Quality of Work performed by External Auditors which aims to facilitate the AC in evaluating the external auditors. Accordingly, the AC had evaluated the performance of the external auditors based on the key indicators of audit quality set out in the guidance. The Company has in place a whistle blowing framework, endorsed by the AC where employees of the Company may, in confidence, raise concerns about possible corporate improprieties in matters of financial reporting or other matters and to ensure that arrangements are in place for the independent investigations of such matters and for appropriate follow up actions. The details of the whistle blowing policies and arrangements have been made available to all employees. As at the date of this report, there was no report received through the whistle blowing mechanism. Internal Controls Principle 12: The Board should ensure that Management maintains a sound system of internal controls to safeguard the shareholders investments and the companys assets. The Board ensures that the Management maintains a sound system of internal controls and effective risk management policies to safeguard the shareholders investment and the Companys assets and in this regard, is assisted by the AC which conducts the reviews. The AC ensures that a review of the adequacy and effectiveness of the Companys internal controls, including financial, operational and compliance controls and risk assessment, is conducted by the external auditors at least once a year to ensure the adequacy thereof. The AC reviews the audit plans, and the findings of the auditors and ensures that the Company follows up on the auditors recommendations raised, if any, during the audit process. Any material non-compliance or failures in internal controls and recommendations for improvements are reported to the AC. The AC also reviews the effectiveness of the actions taken by the Management on the recommendations made by the external auditors in this respect. The Company has in place a system of internal control and risk management, the effectiveness of which are reviewed periodically within the financial year of the Company, for ensuring proper accounting records and reliable financial information as well as management of business risks with a view of safeguarding shareholders investments and the Companys assets. However, the Board notes that no system of internal controls could provide absolute assurance against the occurrence of material errors, poor judgment in decision-making, human error, losses, fraud or other irregularities. The Board with the concurrence of the AC is satisfied that there are adequate internal controls in place to address the financial, operational and compliance risks with reasonable assurance. The Company has engaged the services of Ernst and Young Advisory Pte. Ltd. as its internal auditor to review that these controls are in place.

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EPICENTRE HOLDINGS LIMITED

ANNUAL REPORT 2011

corporate governance report

Internal Audit Principle 13: The Company should establish an internal audit function that is independent of the activities it audits. The Company has outsourced the internal audit functions of the Group to Ernst and Young Advisory Pte. Ltd. a professional accounting firm providing internal audit, risk and compliance services. The internal auditors report directly to the AC on all internal audit matters though administratively, the internal auditor liaises with the Chief Financial Officer. The internal auditors are responsible for evaluating the reliability, adequacy and effectiveness of the internal controls and risk management processes of the Group, assisting the AC in the review of interested person transactions and ensuring that the internal controls of the Group is adequate in proper recording of transactions and safeguarding the assets of the Group. The internal auditors will also carry out major internal control checks and compliance tests as instructed by the AC. The AC will review the internal auditors reports and ensure that there are adequate internal controls within the Group. The AC, on an annual basis, will assess the effectiveness of the internal audit by examining the scope of the internal audit work and its independence, the internal auditors reports and its relationship with the external auditors to ensure that the internal auditors has the necessary resources to adequately perform its functions. The AC will ensure that the internal auditors meet or exceed the standards set by recognised professional bodies including the Standards for the Professional Practice of Internal Auditing set by the Institute of Internal Auditors. Communications with Shareholders Principle 14: Principle 15: Companies should engage in regular, effective and fair communication with shareholders. Companies should encourage greater shareholder participation at AGMs, and allow shareholders the opportunity to communicate their views on various matters affecting the company. In line with continuous obligations of the Company under the Listing Manual, Section B: Rules of Catalist of the SGX-ST, the Boards policy is that all shareholders be informed of all major developments that impact the Group. The Company believes that a high standard of disclosure is keys to raising the level of corporate governance. Interim and full year results and news releases are published through the SGXNet. All information of the Companys new initiatives is first disseminated via SGXNet followed by a news release. A copy of the Annual Report is sent to every shareholder. The Notice of AGM is advertised in the press and released via SGXNet. Separate resolutions on each distinct issue are proposed at general meetings for approval. In accordance with the Articles of Association of the Company, shareholders may appoint one or two proxies to attend and vote at general meetings in their absence. All shareholders are allowed to vote in person or by proxy. Central Provident Fund investors of the Companys securities may attend shareholders meetings as observers provided they have submitted to do so with the agent banks within the specified time frame.

ANNUAL REPORT 2011

EPICENTRE HOLDINGS LIMITED

29

corporate governance report

Shareholders are encouraged to attend the general meetings to ensure a high level of accountability and to stay apprised of the Groups strategy and goals. At general meetings of the Company, shareholders are given the opportunity to air their views and ask the Directors and Management questions regarding the Group and its businesses. The Chairmen of the AC, NC and RC are normally available at the meetings to answer any question relating to the work of these Committees. The external auditors are also present to assist the Board in addressing any relevant queries by the shareholders. DEALINGS IN SECURITIES The Company is guided by Rule 1204(19) of the Listing Manual Section B: Rules of Catalist of the SGX-ST in relation to the dealings in securities of the Company to its Directors and Management. The Company has in place a policy to prohibit the Directors, key executives and employees who have access to unpublished material price sensitive information from dealing in Companys securities. They are advised not to deal in the Companys securities for the period of one month immediately preceding the announcement of the Companys half year financial results and full year financial results and ending on the date of announcement of such results on the SGX-ST, or when they are in possession of the unpublished price sensitive information of the Group. In addition, the Directors, key executives and employees are expected to observe insider trading laws at all times even when dealing in securities within the permitted trading period. They are also discouraged from dealing in the Companys shares on short term considerations. INTERESTED PERSON TRANSACTIONS The Company has established internal control policy to ensure that transactions with interested persons are properly reviewed, approved and conducted at arms length basis. The following is the aggregate value of all transactions with interested persons (as defined in Chapter 9 of the Listing Manual Section B: Rules of Catalist of the SGX-ST) for the financial year ended 30 June 2011: Name of interested person Aggregate value of all interested person transactions during the financial year under review (excluding transactions conducted under shareholders mandate pursuant to Rule 920) S$ Aggregate value of all interested person transactions conducted under shareholders mandate pursuant to Rule 920 (excluding transactions less than $100,000) S$

MATERIAL CONTRACTS There are no material contracts to which the Company or any of its subsidiary, is a party and which involve the interests of the CEO, any Director or the controlling shareholder, were subsisting at the end of the financial year ended 30 June 2011 or entered into since the date of listing of the Company.

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EPICENTRE HOLDINGS LIMITED

ANNUAL REPORT 2011

corporate governance report

RISK MANAGEMENT The Board, through its AC, manages the risk profile of the Company. In line with this, it has requested the Chief Financial Officer to highlight key risk areas of the Groups various businesses and review risk treatments on a regular basis. In addition, the internal auditors are engaged to develop a risk-based internal audit plan to review financial, operational and compliance risks across the Group. Business Risk The Group is primarily engaged in retailing of Apple branded and proprietary brands of electronics consumer products. Its revenue is affected by economic sentiment, consumer spending and market acceptance of the newly launched products in various geographical regions in which the Group operates. In view of this, SWOT analysis is used to regularly review the ongoing viability of our retail network and how market share may be maintained/increased. Financial Risk The Group maintains sufficient cash reserves to meet its obligations as and when it falls due. The bulk of the Groups purchases are denominated in US Dollar. In order to minimize the Groups exposure to foreign currency fluctuation, it engages in foreign currency hedging based on purchase commitments. CATALIST SPONSOR No non-sponsored fee was paid to the Sponsor during the financial year ended 30 June 2011.

ANNUAL REPORT 2011

EPICENTRE HOLDINGS LIMITED

31

report of the directors

The Directors of the Company present their report to the members together with the audited financial statements of the Group for the financial year ended 30 June 2011 and the statement of financial position of the Company as at 30 June 2011. 1. Directors The Directors of the Company in office at the date of this report are: Jimmy Fong Teck Loon Brenda Yeo Siow Chee Keong Ron Tan Aik Ti Azman Hisham Bin Jaafar 2. (Appointed on 3 November 2010)

Arrangements to enable Directors to acquire shares or debentures Neither at the end of nor at any time during the financial year was the Company a party to any arrangement whose object 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.

3.

Directors interests in shares or debentures According to the Register of Directors Shareholdings kept by the Company for the purpose of Section 164 of the Singapore Companies Act, Cap. 50 (the Act), none of the Directors of the Company who held office at the beginning and end of the financial year had any interests in the shares or debentures of the Company or its related corporations except as detailed below: Shareholdings registered in the name of Directors Balance at 1 July 2010 Company Jimmy Fong Teck Loon Brenda Yeo Siow Chee Keong Lee Keen Whye (resigned on 29 October 2010) Lui Zhipeng (resigned on 5 January 2011) 100,000 100,000 100,000 100,000 50,369,800 630,000 100,000 50,369,800 630,000 100,000 630,000 50,369,800 630,000 50,369,800 Balance at 30 June 2011 Shareholdings in which Directors are deemed to have an interest Balance at 1 July 2010 Balance at 30 June 2011

Number of ordinary shares

32

EPICENTRE HOLDINGS LIMITED

ANNUAL REPORT 2011

report of the directors

3.

Directors interests in shares or debentures (Continued) By virtue of Section 7 of the Act, Jimmy Fong Teck Loon and Brenda Yeo are deemed to have interests in the shares of all the subsidiaries of the Company as at the end of the financial year. Jimmy Fong Teck Loon is deemed to be interested in the shares held by his wife, Brenda Yeo, and vice versa. In accordance with the continuing listing requirements of the Singapore Exchange Securities Trading Limited (SGX-ST), the Directors of the Company state that, according to the Register of Directors Shareholdings, the Directors interests as at 21 July 2011 in the shares of the Company have not changed from those disclosed as at 30 June 2011.

4.

Directors contractual benefits Since the end of the previous financial year, no Director of the Company has received or become entitled to receive a benefit which is required to be disclosed under 201(8) of the Act, by reason of a contract made by the Company or by a related corporation with the Director of the Company or with a firm of which he is a member, or with a company in which he has a substantial financial interest, except as disclosed in the financial statements.

5.

Share options At the Extraordinary General Meeting held on 29 June 2010, the shareholders of the Company approved the Epicentre Holdings Limited Performance Share Plan (the Scheme). In relation to the Scheme, the Company will grant shares of the Company (Awards) to eligible Group employees and Non-Executive Directors (Participants). Awards represent the right of a Participant to receive fully paid ordinary shares of the Company (Shares) free of charge, upon the Participant achieving prescribed performance targets. Awards may only be vested and consequently any Shares comprised in such Awards shall only be delivered upon the Committees (as defined below) satisfaction that the prescribed performance targets have been achieved. Awards may be granted at any time in the course of a financial year provided that in the event that an announcement on any matter of any exceptional nature involving unpublished price sensitive information is imminent. Awards may only be vested and hence any Shares comprised in such Awards may only be delivered on or after the second market day from the date on which the aforesaid announcement is made. The Scheme is administered by the Remuneration Committee. There were no share options granted by the Company or its subsidiaries during the financial year under the scheme. There were no shares issued during the financial year by virtue of the exercise of options to take up unissued shares of the Company or its subsidiaries. There were no unissued shares of the Company or its subsidiaries under options as at the end of the financial year under the scheme.

ANNUAL REPORT 2011

EPICENTRE HOLDINGS LIMITED

33

report of the directors

6.

Audit committee The Audit Committee comprises the following members, who are all Non-Executive Directors and Independent Directors. The members of the Audit Committee during the financial year and at the date of this report are: Siow Chee Keong (Chairman) Ron Tan Aik Ti Azman Hisham Bin Jaafar The Audit Committee performs the functions specified in Section 201B (5) of the Act. In performing those functions, the Audit Committee reviewed the audit plans and the overall scope of examination by the external and internal auditors of the Group and of the Company. The Audit Committee also reviewed the independence of the external and internal auditors of the Company and the nature and extent of the non-audit services provided by the external auditors. The Audit Committee also reviewed the assistance provided by the Companys officers to the external auditors and the consolidated financial statements and the statement of financial position of the Company as well as the Independent Auditors Report thereon prior to their submission to the Directors of the Company for adoption and reviewed the interested person transactions as defined in Chapter 9 of the Listing Manual Section B: Rules of Catalist of the SGX-ST. The Audit Committee has full access to and has the co-operation of the management and has been given the resources required for it to discharge its function properly. It has also full discretion to invite any Director and executive officer to attend its meetings. The external and internal auditors have unrestricted access to the Audit Committee. The Audit Committee has recommended to the Board of Directors the nomination of Messrs BDO LLP, for re-appointment as auditors of the Company at the forthcoming Annual General Meeting. The Audit Committee has carried out an annual review of non-audit services provided by the external auditors to satisfy itself that the nature and extent of such services will not prejudice the independence and objectivity of the external auditors prior to recommending their recommendation.

7.

Auditors The auditors, Messrs BDO LLP, have expressed their willingness to accept re-appointment.

On behalf of the Board of Directors

Jimmy Fong Teck Loon Director Singapore 22 September 2011

Brenda Yeo Director

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EPICENTRE HOLDINGS LIMITED

ANNUAL REPORT 2011

statement by directors

In the opinion of the Board of Directors, (a) the accompanying financial statements comprising the statements of financial position of the Group and of the Company, consolidated statement of comprehensive income, consolidated statement of changes in equity and consolidated statement of cash flows together with the notes thereon are properly drawn up in accordance with the provisions of the Singapore Companies Act, Cap. 50 and Singapore Financial Reporting Standards so as to give a true and fair view of the state of affairs of the Group and of the Company as at 30 June 2011 and of the results, changes in equity and cash flows of the Group for the financial year ended on that date; and (b) at the date of this statement, there are reasonable grounds to believe that the Company will be able to pay its debts as and when they fall due.

On behalf of the Board of Directors

Jimmy Fong Teck Loon Director Singapore 22 September 2011

Brenda Yeo Director

ANNUAL REPORT 2011

EPICENTRE HOLDINGS LIMITED

35

independent auditors report


TO THE MEMBERS OF EPICENTRE HOLDINGS LIMITED

Report on the financial statements We have audited the accompanying financial statements of Epicentre Holdings Limited (the Company) and its subsidiaries (the Group) which comprise the statements of financial position of the Group and of the Company as at 30 June 2011, the consolidated statement of comprehensive income, consolidated statement of changes in equity and consolidated statement of cash flows for the financial year then ended, and a summary of significant accounting policies and other explanatory information, as set out on pages 37 to 89. Managements 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, Cap. 50 (the Act) and Singapore Financial Reporting Standards, and for devising and maintaining a system of internal accounting controls sufficient to provide a reasonable assurance that assets are safeguarded against loss from unauthorised use or disposition; and transactions are properly authorised and that they are recorded as necessary to permit the preparation of true and fair profit and loss accounts and balance sheets and to maintain accountability of assets. Auditors responsibility Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with Singapore Standards on Auditing. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditors judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditors consider internal control relevant to the entitys 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 entitys 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.

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EPICENTRE HOLDINGS LIMITED

ANNUAL REPORT 2011

independent auditors report


TO THE MEMBERS OF EPICENTRE HOLDINGS LIMITED

Report on the financial statements (Continued) Opinion In our opinion, the accompanying 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 Group and of the Company as at 30 June 2011 and of the results, changes in equity and 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.

BDO LLP Public Accountants and Certified Public Accountants Singapore 22 September 2011

ANNUAL REPORT 2011

EPICENTRE HOLDINGS LIMITED

37

statements of nancial position


AS AT 30 JUNE 2011

Group Note Non-current assets Club membership Plant and equipment Investments in subsidiaries 2011 $000 223 2,510 2,733 Current assets Inventories Trade and other receivables Prepayments Derivative financial instruments Cash and cash equivalents 7 8 9 10 10,137 5,841 493 14,870 31,341 Less: Current liabilities Trade and other payables Provisions Derivative financial instruments Finance lease payables Current income tax payable 2010 $000 1,860 1,860 8,065 5,943 387 45 10,994 25,434 2011 $000 223 900 1,120 2,243 6,496 76 3,124 9,696

Company 2010 $000 146 980 1,126 9,645 219 45 3,492 13,401

4 5 6

11 12 9 13

12,967 135 14 35 913 14,064

8,733 139 6 575 9,453 15,981

450 50 6 35 541 9,155

579 54 6 9 648 12,753

Net current assets Less: Non-current liabilities Finance lease payables Deferred tax liabilities

17,277

13 14

200 78 278 19,732

1 78 79 17,762 6,709 26 11,027 17,762 17,762

200 15 215 11,183

1 15 16 13,863 6,709 7,154 13,863 13,863

Equity Share capital Foreign currency translation (account)/reserve Retained earnings Equity attributable to owners of the parent Non-controlling interest Total equity

15 16

6,709 (2) 12,989 19,696 36 19,732

6,709 4,474 11,183 11,183

The accompanying notes form an integral part of these financial statements.

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EPICENTRE HOLDINGS LIMITED

ANNUAL REPORT 2011

consolidated statement of comprehensive income


FOR THE FINANCIAL YEAR ENDED 30 JUNE 2011

. Revenue Cost of sales Gross profit Other items of income Interest income Other income Other items of expense Administrative expenses Selling and distribution costs Profit before income tax Income tax expense Profit for the financial year Other comprehensive income Foreign currency differences on translation of foreign operations Income tax relating to components of other comprehensive income Other comprehensive income for the financial year, net of tax Total comprehensive income for the financial year Profit attributable to: Owners of the parent Non-controlling interest

Note 17

2011 $000 162,603 (138,397) 24,206

2010 $000 88,082 (73,768) 14,314

13 18 1,365

14 1,395

(15,313) (4,541) 19 20 5,730 (983) 4,747 (30) (30) 4,717

(8,776) (2,850) 4,097 (709) 3,388 23 23 3,411

4,767 (20) 4,747

3,388 3,388

Total comprehensive income attributable to: Owners of the parent Non-controlling interest 4,739 (22) 4,717 Earnings per share (in cents) Basic and diluted 21 5.10 3.62 3,411 3,411

The accompanying notes form an integral part of these financial statements.

ANNUAL REPORT 2011

EPICENTRE HOLDINGS LIMITED

39

consolidated statement of changes in equity


FOR THE FINANCIAL YEAR ENDED 30 JUNE 2011

Group Balance at 1 July 2010 Profit for the financial year Other comprehensive income for the financial year Foreign currency differences on translation of foreign operations, net of tax Total comprehensive income for the financial year Distribution to owners of the parent Dividends Transactions with the non-controlling interest Attributable to incorporation of a subsidiary Balance at 30 June 2011 Balance at 1 July 2009 Profit for the financial year Other comprehensive income for the financial year Foreign currency differences on translation of foreign operations, net of tax Total comprehensive income for the financial year Balance at 30 June 2010

Note

Share capital $000 6,709

Foreign currency translation (account)/ reserve $000 26

Equity attributable to owners Nonof the controlling Retained parent interest earnings $000 $000 $000 11,027 4,767 17,762 4,767 (20)

Total equity $000 17,762 4,747

(28)

(28)

(2)

(30)

(28)

4,767

4,739

(22)

4,717

22

(2,805)

(2,805)

(2,805)

6,709 6,709

(2) 3

12,989 7,639 3,388

19,696 14,351 3,388

58 36

58 19,732 14,351 3,388

23

23

23

6,709

23 26

3,388 11,027

3,411 17,762

3,411 17,762

The accompanying notes form an integral part of these financial statements.

40

EPICENTRE HOLDINGS LIMITED

ANNUAL REPORT 2011

consolidated statement of cash ows


FOR THE FINANCIAL YEAR ENDED 30 JUNE 2011

Note Operating activities Profit before income tax Adjustments for: Allowance for inventory obsolescence Bad third parties trade receivables written off Changes in value of derivative financial instruments Depreciation of plant and equipment Interest income Loss on disposals of plant and equipment Inventories written off Plant and equipment written off Write-back of allowance for doubtful third parties trade receivables Reversal of provision for reinstatement cost unutilised Operating cash flows before working capital changes Working capital changes: Inventories Trade and other receivables Prepayments Trade and other payables Cash generated from operations Interest received Income taxes paid Net cash from operating activities Investing activities Purchase of club membership Purchase of plant and equipment Issue of shares to non-controlling interest Net cash used in investing activities Financing activities Dividends paid Decrease in fixed deposits pledged Repayment of finance lease payables Net cash (used in)/from financing activities Net change in cash and cash equivalents Cash and cash equivalents at beginning of financial year Effects of exchange rate changes on cash and cash equivalents Cash and cash equivalents at end of financial year 10

2011 $000 5,730 31 23 59 996 (13) 1 72 4 (30) 6,873 (2,290) 56 (108) 4,279 8,810 13 (644) 8,179

2010 $000 4,097 596 (14) 53 (7) 4,725 (2,926) (2,365) (122) 1,502 814 14 (399) 429

(223) (1,286) 58 (1,451)

(1,896) (1,896)

(2,805) 1,713 (16) (1,108) 5,620 9,281 (31) 14,870

585 (6) 579 (888) 10,139 30 9,281

The accompanying notes form an integral part of these financial statements.

ANNUAL REPORT 2011

EPICENTRE HOLDINGS LIMITED

41

notes to the nancial statements


FOR THE FINANCIAL YEAR ENDED 30 JUNE 2011

These notes form an integral part of and should be read in conjunction with the financial statements. 1. General corporate information The consolidated financial statements of the Group and the statement of financial position of the Company for the financial year ended 30 June 2011 were authorised for issue in accordance with a Directors resolution dated 22 September 2011. The Company is a public limited company, incorporated and domiciled in Singapore. The principal place of business and registered office is at 37 Jalan Pemimpin #07-04 Clarus Centre, Singapore 577177. The Companys registration number is 200202930G. The principal activity of the Company is that of investment holding. The principal activities of the subsidiaries are set out in Note 6 to the financial statements. 2. Summary of significant accounting policies 2.1 Basis of preparation of financial statements The financial statements have been prepared in accordance with the provisions of the Singapore Companies Act, Cap. 50 and Singapore Financial Reporting Standards (FRS). The financial statements are presented in Singapore dollar and all values are rounded to the nearest thousand ($000) except when otherwise indicated. The financial statements have been prepared under the historical cost convention, except as disclosed in the accounting policies below. The preparation of financial statements in conformity with FRS requires the management to exercise judgement in the process of applying the Groups and the Companys accounting policies and requires the use of accounting estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the end of the reporting period, and the reported amounts of revenue and expenses during the financial year. Although these estimates are based on the managements best knowledge of historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances, actual results may ultimately differ from those estimates. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the financial year in which the estimate is revised if the revision affects only that financial year, or in the financial year of the revision and future financial years if the revision affects both current and future financial years. Critical accounting judgements and key sources of estimation uncertainty used that are significant to the financial statements are disclosed in Note 3 to the financial statements.

42

EPICENTRE HOLDINGS LIMITED

ANNUAL REPORT 2011

notes to the nancial statements


FOR THE FINANCIAL YEAR ENDED 30 JUNE 2011

2.

Summary of significant accounting policies (Continued) 2.1 Basis of preparation of financial statements (Continued) During the financial year, the Group and the Company adopted the new or revised FRS and Interpretations of FRS (INT FRS) that are relevant to their operations and effective for the current financial year. Changes to the Groups and the Companys accounting policies have been made as required in accordance with the relevant transitional provisions in the respective FRS and INT FRS. The adoption of the new or revised FRS and INT FRS did not result in any substantial changes to the Groups and the Companys accounting policies and has no material effect on the amounts reported for the current and prior financial years. FRS and INT FRS issued but not yet effective As at the date of the authorisation of these financial statements, the Group and the Company have not adopted the following FRS and INT FRS that have been issued but not yet effective: Effective date (Annual periods beginning on or after) FRS 1 FRS 12 FRS 19 FRS 24 FRS 27 FRS 28 FRS 101 FRS 107 FRS 110 FRS 111 FRS 112 FRS 113 INT FRS 114 INT FRS 115 : : : : : : : : : : : : : : Amendments to FRS 1 Presentation of Items of Other Comprehensive Income * Amendments to FRS 12 Deferred Tax: Recovery of Underlying Assets Employee Benefits (Revised) * Related Party Disclosures (Revised) Separate Financial Statements * Investments in Associates and Joint Ventures * Amendments to FRS 101 Severe Hyperinflation and Removal of Fixed Dates for First-time Adopters Amendments to FRS 107 Disclosures Transfers of Financial Assets Consolidated Financial Statements * Joint Arrangements * Disclosure of Interests in Other Entities * Fair Value Measurement * Amendments to INT FRS 114 Prepayments of a Minimum Funding Requirement Agreements for the Construction of Real Estate 1 January 2011 1 January 2011 Singapore Financial Reporting Standards for Small Entities * Issued on 20 September 2011 1 January 2013 1 January 2013 1 January 2013 1 January 2013 1 January 2011 1 July 2011 1 January 2013 1 January 2011 1 January 2013 1 January 2013 1 July 2011 1 January 2012 1 July 2012

ANNUAL REPORT 2011

EPICENTRE HOLDINGS LIMITED

43

notes to the nancial statements


FOR THE FINANCIAL YEAR ENDED 30 JUNE 2011

2.

Summary of significant accounting policies (Continued) 2.1 Basis of preparation of financial statements (Continued) Consequential amendments were also made to various standards as a result of these new or revised standards. The Group and the Company expect that the adoption of the above FRS and INT FRS, if applicable, will have no material impact on the financial statements in the period of initial adoption, except as discussed below. FRS 24 (2010) Related Party Disclosures FRS 24 (2010) changes certain requirements for related party disclosures for entities under control, joint control or significant influence of a government (government-related entities). FRS 24 (2010) also made related party relations symmetrical between each of the related parties and new relationships were included and clarified in the definition of a related party. The Group and the Company will apply the amendments to FRS 24 retrospectively for annual periods beginning on 1 July 2011 and is currently determining the impact of the changes to the definition of a related party on the related disclosures. As this is a disclosure standard, it will have no impact on the financial position or financial performance of the Group and the Company when implemented. On 20 September 2011, the Accounting Standards Council has issued certain new and revised FRS. The Group and the Company are currently determining the impact of these new and revised FRS on the financial statements upon initial adoption. 2.2 Basis of consolidation The consolidated financial statements comprise the financial statements of the Company and its subsidiaries. Subsidiaries are entities over which the Company has the power to govern the financial operating policies, generally accompanied by a shareholding giving rise to the majority of the voting rights, as to obtain benefits from their activities. Subsidiaries are consolidated from the date on which control is transferred to the Group up to the effective date on which control ceases. Intra-group balances and transactions and any unrealised gains and losses arising from intra-group transactions are eliminated on consolidation.

44

EPICENTRE HOLDINGS LIMITED

ANNUAL REPORT 2011

notes to the nancial statements


FOR THE FINANCIAL YEAR ENDED 30 JUNE 2011

2.

Summary of significant accounting policies (Continued) 2.2 Basis of consolidation (Continued) The financial statements of the subsidiaries are prepared for the same reporting period as that of the Company, using consistent accounting policies. Where necessary, accounting policies of subsidiaries are changed to ensure consistency with the policies adopted by other members of the Group. Non-controlling interests in subsidiaries are identified separately from the Groups equity therein. Non-controlling interests in the acquiree may be initially measured either at fair value or at the non-controlling interests proportionate share of the fair value of the acquirees identifiable net assets. The choice of measurement basis is made on an acquisition-by-acquisition basis. Subsequent to acquisition, the carrying amount of noncontrolling interests is the amount of those interests at initial recognition plus the non-controlling interests share of subsequent changes in equity. Total comprehensive income is attributed to non-controlling interests even if this results in the non-controlling interests having a deficit balance. Changes in the Groups interest in a subsidiary that do not result in a loss of control are accounted for as equity transactions. The carrying amounts of the Groups interests and the non-controlling interests are adjusted to reflect the changes in their relative interests in the subsidiary. Any difference between the amount by which the non-controlling interests are adjusted and the fair value of the consideration paid or received is recognised directly in equity and attributed to owners of the parent. When the Group loses control of a subsidiary, the profit or loss on disposal is calculated as the difference between (i) the aggregate of the fair value of the consideration received and the fair value of any retained interest and (ii) the previous carrying amount of the assets (including goodwill), and liabilities of the subsidiary and any non-controlling interests. Amounts previously recognised in other comprehensive income in relation to the subsidiary are accounted for (i.e. reclassified to profit or loss or transferred directly to retained earnings) in the same manner as would be required if the relevant assets or liabilities were disposed of. The fair value of any investment retained in the former subsidiary at the date when control is lost is regarded as the fair value on initial recognition for subsequent accounting under FRS 39 Financial Instruments: Recognition and Measurement or, when applicable, the cost on initial recognition of an investment in an associate or jointly controlled entity. Investments in subsidiaries are carried at cost less any impairment loss in the Companys statement of financial position.

ANNUAL REPORT 2011

EPICENTRE HOLDINGS LIMITED

45

notes to the nancial statements


FOR THE FINANCIAL YEAR ENDED 30 JUNE 2011

2.

Summary of significant accounting policies (Continued) 2.3 Business combinations Business combinations from 1 July 2010 The acquisition of subsidiaries is accounted for using the acquisition method. The cost of the acquisition is measured at the aggregate of the fair values, at the date of exchange, of assets given, liabilities incurred or assumed, and equity instruments issued by the Group in exchange for control of the acquiree. Acquisition-related costs are recognised in profit or loss as incurred. Where applicable, the consideration for the acquisition includes any asset or liability resulting from a contingent consideration arrangement, measured at its acquisition-date fair value. Subsequent changes in such fair values are adjusted against the cost of acquisition where they qualify as measurement period adjustments (see below). All other subsequent changes in the fair value of contingent consideration classified as an asset or liability are accounted for in accordance with relevant FRS. Changes in the fair value of contingent consideration classified as equity are not recognised. The acquirees identifiable assets, liabilities and contingent liabilities that meet the conditions for recognition under FRS 103 are recognised at their fair values at the acquisition date, except for non-current assets (or disposal groups) that are classified as held for sale in accordance with FRS 105 Non-Current Assets Held for Sale and Discontinued Operations, which are recognised and measured at the lower of cost and fair value less costs to sell. Where a business combination is achieved in stages, the Groups previously held interests in the acquired entity are re-measured to fair value at the acquisition date (i.e. the date the Group attains control) and the resulting gain or loss, if any, is recognised in profit or loss. Amounts arising from interests in the acquiree prior to the acquisition date that have previously been recognised in other comprehensive income are reclassified to profit or loss, where such treatment would be appropriate if that interest were disposed of. The acquirees identifiable assets, liabilities and contingent liabilities that meet the conditions for recognition under FRS 103 are recognised at their fair value at the acquisition date, except that: deferred tax assets or liabilities and liabilities or assets related to employee benefit arrangements are recognised and measured in accordance with FRS 12 Income Taxes and FRS 19 Employee Benefits respectively; liabilities or equity instruments related to the replacement by the Group of an acquirees share-based payment awards are measured in accordance with FRS 102 Share-based Payment; and assets (or disposal groups) that are classified as held for sale in accordance with FRS 105 Non-current Assets Held for Sale and Discontinued Operations are measured in accordance with that Standard.

46

EPICENTRE HOLDINGS LIMITED

ANNUAL REPORT 2011

notes to the nancial statements


FOR THE FINANCIAL YEAR ENDED 30 JUNE 2011

2.

Summary of significant accounting policies (Continued) 2.3 Business combinations (Continued) Business combinations from 1 July 2010 (Continued) If the initial accounting for a business combination is incomplete by the end of the reporting period in which the combination occurs, the Group reports provisional amounts for the items for which the accounting is incomplete. Those provisional amounts are adjusted during the measurement period (see below), or additional assets or liabilities are recognised, to reflect new information obtained about facts and circumstances that existed as of the acquisition date that, if known, would have affected the amounts recognised as of that date. The measurement period is the period from the date of acquisition to the date the Group obtains complete information about facts and circumstances that existed as of the acquisition date, and is subject to a maximum of one year. Goodwill arising on acquisition is recognised as an asset at the acquisition date and initially measured at cost, being the excess of the sum of the consideration transferred, the amount of any non-controlling interest in the acquiree and the fair value of the acquirer previously held equity interest (if any) in the entity over net acquisitiondate fair value amounts of the identifiable assets acquired and the liabilities assumed. If, after reassessment, the Groups interest in the net fair value of the acquirees identifiable net assets exceeds the sum of the consideration transferred, the amount of any non-controlling interest in the acquiree and the fair value of the acquirers previously held equity interest in the acquiree (if any), the excess is recognised immediately in profit or loss as a bargain purchase gain. Business combinations before 1 July 2010 In comparison to the above mentioned requirements, the following differences applied: Business combinations are accounted for by applying the purchase method. Transaction costs directly attributable to the acquisition formed part of the acquisition costs. The non-controlling interest (formerly known as minority interest) was measured at the proportionate share of the acquirees identifiable net assets. Business combinations achieved in stages were accounted for as separate steps. Adjustments to those fair values relating to previously held interests are treated as a revaluation and recognised in equity. When the Group acquired a business, embedded derivatives separated from the host contract by the acquiree are not reassessed on acquisition unless the business combination results in a change in the terms of the contract that significantly modifies the cash flows that would otherwise be required under the contract. Contingent consideration was recognised if, and only if, the Group had a present obligation, the economic outflow was probable and a reliable estimate was determinable. Subsequent measurements to the contingent consideration affected goodwill.

ANNUAL REPORT 2011

EPICENTRE HOLDINGS LIMITED

47

notes to the nancial statements


FOR THE FINANCIAL YEAR ENDED 30 JUNE 2011

2.

Summary of significant accounting policies (Continued) 2.4 Plant and equipment Plant and equipment are initially stated at cost. Subsequent to initial recognition, plant and equipment are stated at cost less accumulated depreciation and any accumulated impairment losses. The cost of plant and equipment includes its purchase price and any costs directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management. 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 plant and equipment. Subsequent expenditure relating to the plant and equipment that has already been recognised is added to the carrying amount of the asset when it is probable that the future economic benefits, in excess of the standard of performance of the asset before the expenditure was made, will flow to the Group and the Company and the cost can be measured. Other subsequent expenditure is recognised as an expense during the financial year in which it is incurred. Depreciation is calculated on the straight-line method so as to allocate the depreciable amounts of the plant and equipment over their estimated useful lives as follows: Years Demo equipment Office equipment Furniture and fittings Renovation Motor vehicles 3 3 3 3 7 to 10

The carrying values of plant and equipment are reviewed for impairment when events or changes in circumstances indicate that the carrying values may not be recoverable. The estimated useful lives, residual values and depreciation methods are reviewed, and adjusted as appropriate, at the end of each reporting period. Assets held under finance leases are depreciated over their expected useful lives on the same basis as owned assets or, if there is no certainty that the lessee will obtain ownership by the end of the lease term, the asset shall be fully depreciated over the shorter of the lease term and its useful life. 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 amount of the asset and is recognised in profit or loss. Fully depreciated plant and equipment are retained in the financial statements until they are no longer in use.

48

EPICENTRE HOLDINGS LIMITED

ANNUAL REPORT 2011

notes to the nancial statements


FOR THE FINANCIAL YEAR ENDED 30 JUNE 2011

2.

Summary of significant accounting policies (Continued) 2.5 Club membership The club membership right is initially recorded at cost and is subsequently measured at cost less accumulated impairment loss, if any. 2.6 Impairment of non-financial assets At the end of each reporting period, the Group and the Company review the carrying amounts of their non-financial assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the Group and the Company estimate the recoverable amount of the cash-generating unit to which the asset belongs. The recoverable amount of an asset or cash-generating unit is the higher of its fair value less costs to sell and its value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease. Where an impairment loss subsequently reverses, the carrying amount of the asset (cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (cash-generating unit) in prior financial years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase. 2.7 Inventories Inventories are stated at the lower of cost and net realisable value. Cost is determined on a first-in, first-out basis and 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 at which inventories can be realised in the ordinary course of business and cost incurred in marketing and distribution. When necessary, allowance is made for obsolete, slow-moving and defective inventories to adjust the carrying value of those inventories to the lower of cost and net realisable value.

ANNUAL REPORT 2011

EPICENTRE HOLDINGS LIMITED

49

notes to the nancial statements


FOR THE FINANCIAL YEAR ENDED 30 JUNE 2011

2.

Summary of significant accounting policies (Continued) 2.8 Financial instruments Financial assets and financial liabilities are recognised on the Groups and the Companys statements of financial position when the Group and the Company become parties to the contractual provisions of the instruments. Effective interest method The effective interest method is a method of calculating the amortised cost of a financial instrument and allocating the interest income or expense over the relevant period. The effective interest rate exactly discounts estimated future cash receipts or payments (including all fees on points paid or received that form an integral part of the effective interest rate, transaction costs and other premiums or discounts) through the expected life of the financial instrument, or where appropriate, a shorter period, to the net carrying amount of the financial instrument. Income and expense are recognised on an effective interest basis for debt instruments other than those financial instruments at fair value through profit or loss. Financial assets All financial assets are recognised on a trade date where the purchase of a financial asset is under a contract whose terms require delivery of the financial asset within the timeframe established by the market concerned, and are initially measured at fair value, plus transaction costs, except for those financial assets classified as at fair value through profit or loss, which are initially measured at fair value. Financial assets are classified into the following specified categories: financial assets at fair value through profit or loss, held-to-maturity investments, loans and receivables and available-for-sale financial assets. The classification depends on the nature and purpose for which these financial assets were acquired and is determined at the time of initial recognition. Loans and receivables Trade and other receivables that have fixed or determinable payments that are not quoted in active market are classified as loans and receivables. Loans and receivables are measured at amortised cost, using the effective interest method less impairment loss. Interest is recognised by applying the effective interest method, except for short-term receivables when the recognition of interest would be immaterial. Impairment of financial assets Financial assets are assessed for indications of impairment at the end of each reporting period. Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows of the investment have been impacted. For financial assets carried at amortised cost, the amount of the impairment is the difference between the assets carrying amount and the present value of estimated future cash flows, discounted at the original effective interest rate.

50

EPICENTRE HOLDINGS LIMITED

ANNUAL REPORT 2011

notes to the nancial statements


FOR THE FINANCIAL YEAR ENDED 30 JUNE 2011

2.

Summary of significant accounting policies (Continued) 2.8 Financial instruments (Continued) Impairment of financial assets (Continued) The carrying amounts of all financial assets are reduced by the impairment loss directly with the exception of trade receivables where the carrying amount is reduced through the use of an allowance account. Changes in the carrying amount of the allowance account are recognised in profit or loss. The amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment loss was recognised, the previously recognised impairment loss is reversed through profit or loss to the extent the carrying amount of the investment at the date the impairment loss is reversed does not exceed what the amortised cost would have been had the impairment loss not been recognised. The Group and the Company derecognise a financial asset only when the contractual rights to the cash flows from the asset expire, or they transfer the financial asset and substantially all the risks and rewards of ownership of the asset to another entity. If the Group and the Company neither transfer nor retain substantially all the risks and rewards of ownership of the financial asset and continue to control the transferred asset, the Group and the Company recognise their retained interest in the asset and an associated liability for amounts they may have to pay. If the Group and the Company retain substantially all the risks and rewards of ownership of a transferred financial asset, the Group and the Company continue to recognise the financial asset and also recognise a collateralised borrowing for the proceeds receivables. Financial liabilities and equity instruments Classification as debt or equity Financial liabilities and equity instruments issued by the Group and the Company are classified according to the substance of the contractual arrangements entered into and the definitions of a financial liability and an equity instrument. Equity instruments An equity instrument is any contract that evidences a residual interest in the assets of the Group and the Company after deducting all of their liabilities. Ordinary shares are classified as equity and recognised at the fair value of the consideration received by the Group and the Company. Incremental costs directly attributable to the issuance of new equity instruments are shown in the equity as a deduction from the proceeds.

ANNUAL REPORT 2011

EPICENTRE HOLDINGS LIMITED

51

notes to the nancial statements


FOR THE FINANCIAL YEAR ENDED 30 JUNE 2011

2.

Summary of significant accounting policies (Continued) 2.8 Financial instruments (Continued) Financial liabilities and equity instruments (Continued) Financial liabilities Financial liabilities are classified as either financial liabilities at fair value through profit or loss or other financial liabilities. Financial liabilities are classified as at fair value through profit or loss if the financial liability is either held for trading or it is designated as such upon initial recognition. Other financial liabilities Trade and other payables Trade and other payables are initially measured at fair value, net of transaction costs, and are subsequently measured at amortised cost, where applicable, using the effective interest method, with interest expense recognised on an effective yield basis. Derecognition of financial liabilities The Group and the Company derecognise financial liabilities when, and only when, the Groups and the Companys obligations are discharged, cancelled or they expire. Derivative financial instruments and hedging activities The Group and the Company enter into a variety of derivative financial instruments to manage their exposure to foreign exchange rate risk, including foreign exchange forward contracts. Derivatives are initially recognised at their fair values at the date the derivative contract is entered into and are subsequently remeasured to their fair values at the end of each reporting period. The method of recognising the resulting gain or loss depends on whether the derivative is designated and effective as a hedging instrument, and if so, the nature of the item being hedged. Fair value changes on derivatives that are not designated or do not qualify for hedge accounting are recognised in profit or loss when the changes arise.

52

EPICENTRE HOLDINGS LIMITED

ANNUAL REPORT 2011

notes to the nancial statements


FOR THE FINANCIAL YEAR ENDED 30 JUNE 2011

2.

Summary of significant accounting policies (Continued) 2.9 Cash and cash equivalents Cash and cash equivalents consist of cash on hand, cash and deposits with banks and financial institutions. Cash and cash equivalents are short-term, highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value. For the purpose of the consolidated statement of cash flows, cash and cash equivalents comprise of cash on hand, cash at bank and fixed deposits net of fixed deposits pledged. 2.10 Provisions Provisions are recognised when the Group and the Company have a present legal or constructive obligation as a result of a past event, it is probable that the Group and the Company will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation. The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the end of the reporting period, taking into account the risks and uncertainties surrounding the obligation. Where a provision is measured using the cash flows estimated to settle the present obligation, its carrying amount is the present value of those cash flows. When some or all of the economic benefits required to settle a provision are expected to be recovered from a third party, the receivable is recognised as an asset if it is virtually certain that reimbursement will be received and the amount of the receivable can be measured reliably. Changes in the estimated timing or amount of the expenditure or discount rate are recognised in profit or loss when the changes arise. 2.11 Revenue recognition Revenue is measured at the fair value of the consideration received or receivable. Revenue is recognised to the extent that it is probable that the economic benefits will flow to the entity and the revenue can be reliably measured. Revenue is presented, net of rebates, discounts and sales related taxes. Revenue from sale of goods is recognised upon passage of title to the customer which coincides with the delivery and acceptance. Interest income is recognised on a time-proportion basis using the effective interest method. Sponsorship income is recognised upon public presentation for media advertising. Facilities fees income is recognised on a straight-line basis over the term of the service agreement. Marketing income is recognised upon confirmation of the achievement of certain sales quota.

ANNUAL REPORT 2011

EPICENTRE HOLDINGS LIMITED

53

notes to the nancial statements


FOR THE FINANCIAL YEAR ENDED 30 JUNE 2011

2.

Summary of significant accounting policies (Continued) 2.12 Government grant Jobs credit scheme Government grants are recognised at their fair values where there is a reasonable assurance that the grant will be received and all attaching conditions will be complied with. Where the grant relates to an asset, the fair value is recognised as deferred capital grant on the statements of financial position and is amortised to profit or loss over the expected useful life of the relevant asset by equal annual installment. The Singapore government introduced a cash grant known as the jobs credit scheme in its Budget for 2009 in a bid to help businesses preserve jobs in the economic downturn. The amounts received for jobs credit are to be paid to eligible employers in 2009 in four payments and the amount an employer can receive would depend on the fulfillment of the conditions as stated in the Scheme. In October 2009, the Government announced that the Jobs Credit Scheme would be extended for half a year with another 2 payments at stepped-down rates in March and June 2010 based on 6% of wages to be paid in March 2010 and 3% of wages to be paid in June 2010. The Group and the Company recognise the amounts received for jobs credit at their fair values as other income in the month of receipt of these grants from the government. 2.13 Employee benefits Defined contribution plans Contributions to defined contribution plans are recognised as an expense in profit or loss in the same financial year as the employment that gives rise to the contributions. Employee leave entitlement Employee entitlements to annual leave are recognised when they accrue to employees. An accrual is made for estimated liability for unutilised annual leave as a result of services rendered by employees up to the end of the reporting period.

54

EPICENTRE HOLDINGS LIMITED

ANNUAL REPORT 2011

notes to the nancial statements


FOR THE FINANCIAL YEAR ENDED 30 JUNE 2011

2.

Summary of significant accounting policies (Continued) 2.14 Leases When the Group and the Company are the lessees of a finance lease Leases in which the Group and the Company assume substantially the risks and rewards of ownership are classified as finance leases. Upon initial recognition, plant and equipment acquired through finance lease is capitalised at the lower of its fair value and the present value of the minimum lease payments. Any initial direct costs are also added to the amount capitalised. Subsequent to initial recognition, the plant and equipment is accounted for in accordance with the accounting policy applicable to that plant and equipment. Lease payments are apportioned between finance charge and reduction of the lease liability. The finance charge is allocated to each period during the lease term so as to achieve a constant periodic rate of interest on the remaining balance of the finance lease liability. Finance charge is recognised in profit or loss. When the Group and the Company are the lessees of operating leases Leases of assets in which a significant portion of the risks and rewards of ownership are retained by the lessor are classified as operating leases. Payments made under operating leases (net of any incentives received from the lessor) are recognised in profit or loss on a straight-line basis over the period of the lease. When an operating lease is terminated before the lease period has expired, any payment required to be made to the lessor by way of penalty is recognised as an expense in the financial year in which termination takes place. Contingent rents are recognised as an expense in profit or loss in the financial year in which they are incurred.

ANNUAL REPORT 2011

EPICENTRE HOLDINGS LIMITED

55

notes to the nancial statements


FOR THE FINANCIAL YEAR ENDED 30 JUNE 2011

2.

Summary of significant accounting policies (Continued) 2.15 Income tax Income tax expense represents the sum of the tax currently payable and deferred tax. Income tax expense is recognised in profit or loss to the extent that it relates to a business combination or items recognised directly in equity or other comprehensive income. The tax currently payable is based on taxable profit for the financial year and any adjustments to income tax payable in respect of previous financial years. Taxable profit differs from profit as reported profit or loss because it excludes items of income or expense that are taxable or deductible in other financial years and it further excludes items that are not taxable or tax deductible. The Groups and the Companys liabilities for current tax is calculated using tax rates (and tax laws) that have been enacted or substantively enacted in countries where the Company and subsidiaries operate by the end of the reporting period. Deferred tax is recognised on the differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit, and are accounted for using the balance sheet liability method. Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred tax assets are recognised to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilised. Such assets and liabilities are not recognised if the temporary difference arises from goodwill or from the initial recognition (other than in a business combination) of other assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit. The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset realised based on the tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period. Deferred tax is charged or credited to profit or loss, except when it relates to items charged or credited directly to other comprehensive income, in which case the deferred tax is also dealt within equity. Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and when they relate to income taxes levied by the same taxation authority and the Group and the Company intend to settle their current tax assets and liabilities on a net basis.

56

EPICENTRE HOLDINGS LIMITED

ANNUAL REPORT 2011

notes to the nancial statements


FOR THE FINANCIAL YEAR ENDED 30 JUNE 2011

2.

Summary of significant accounting policies (Continued) 2.15 Income tax (Continued) Unrecognised deferred tax assets are reassessed at the end of each reporting period and are recognised to the extent that it has become probable that future taxable profits will be available against which the temporary differences can be utilised. Current and deferred tax are recognised as an expense or income in profit or loss, except when they relate to items credited or debited directly to equity, in which case the tax is also recognised directly in equity, or where they arise from the initial accounting for a business combination. In the case of a business combination, the tax effect is taken into account in calculating goodwill or determining the excess of the acquirers interest in the net fair value of the acquirees identifiable assets, liabilities and contingent liabilities over cost. Deferred tax liabilities are recognised for all taxable temporary differences associated with investment in subsidiary, except where the timing of the reversal of the temporary difference can be controlled by the Group and it is probable that the temporary difference will not reverse in the forseeable future. 2.16 Foreign currency transactions and translation The consolidated financial statements and the statement of financial position of the Company are presented in Singapore dollar, which is the functional currency of the Company and the presentation currency for the consolidated financial statements. Items included in the individual 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). In preparing the financial statements, transactions in currencies other than the entitys functional currency (foreign currencies) are recorded at the rates of exchange prevailing on the date of the transactions. At the end of each reporting period, monetary items denominated in foreign currencies are re-translated at the rates prevailing at the end of the reporting period. Non-monetary items carried at fair value that are denominated in foreign currencies are re-translated at the rates prevailing on the date when the fair value was determined. Non-monetary items that are measured in terms of historical cost in a foreign currency are not re-translated. Exchange differences arising on the settlements of monetary items and on re-translating of monetary items are included in profit or loss for the financial year. Exchange differences arising on the re-translation of non-monetary items carried at fair value are included in profit or loss for the financial year except for differences arising on the re-translation of non-monetary items in respect of which gains and losses are recognised directly in other comprehensive income. For such non-monetary items, any exchange component of that gain or loss is also recognised directly in other comprehensive income.

ANNUAL REPORT 2011

EPICENTRE HOLDINGS LIMITED

57

notes to the nancial statements


FOR THE FINANCIAL YEAR ENDED 30 JUNE 2011

2.

Summary of significant accounting policies (Continued) 2.16 Foreign currency transactions and translation (Continued) For the purpose of presenting consolidated financial statements, the results and financial positions, changes in equity and cash flows of the Groups entities that have a functional currency different from the presentation currency are translated into the presentation currency as follows: (i) (ii) assets and liabilities are translated at the closing exchange rate at the end of the reporting period; income and expenses are translated at average exchange rate for the financial year (unless this average is not a reasonable approximation of the cumulative effect of the rates prevailing on the transaction dates, in which case income and expenses are translated using the exchange rates at the dates of the transactions); and (iii) all resulting foreign currency exchange differences are recognised in other comprehensive income and presented in the foreign currency translation (account)/reserve in equity. 2.17 Dividends Equity dividends are recognised when they become legally payable. Interim dividends are recorded in the financial year in which they are declared payable. Final dividends on ordinary shares are recognised as a liability in the financial year in which the dividends are approved by the shareholders. 2.18 Segment reporting Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker. The chief operating decision maker, who is responsible for allocating resources and assessing performance of the operating segments, has been identified as the group of executive directors and the chief executive officer who makes strategic decisions.

3.

Critical accounting judgements and key sources of estimation uncertainty 3.1 Critical judgements in applying the accounting policies The following are the critical judgements, apart from those involving estimations that management has made in the process of applying the Groups and the Companys accounting policies and which have significant effect on the amounts recognised in the financial statements.

58

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notes to the nancial statements


FOR THE FINANCIAL YEAR ENDED 30 JUNE 2011

3.

Critical accounting judgements and key sources of estimation uncertainty (Continued) 3.1 Critical judgements in applying the accounting policies (Continued) (i) Impairment of investments in subsidiaries and financial assets The Group and the Company follow the guidance of FRS 36 and FRS 39 on determining whether an investment or a financial asset is impaired. This determination requires significant judgement. The Group and the Company evaluate, among other factors, the duration and extent to which the fair value of an investment in subsidiary or a financial asset is less than its cost and the financial health of and near-term business outlook for the investment in subsidiary or financial asset, including factors such as industry and sector performance, changes in technology and operational and financing cash flow. 3.2 Key sources of estimation uncertainty The key assumptions concerning the future, and other key sources of estimation uncertainty at the end of the reporting period that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities and reported amounts of revenue and expenses within the next financial year, are discussed below. (i) Depreciation of plant and equipment Plant and equipment are depreciated on a straight-line basis over their estimated useful lives. The management estimates the useful lives of these assets to be within 3 to 10 years. The carrying amounts of the Groups and the Companys plant and equipment as at 30 June 2011 were approximately $2,510,000 and $900,000 (2010: $1,860,000 and $146,000) respectively. Changes in the expected level of usage and technological developments could impact the economic useful lives and the residual values of these assets, therefore future depreciation charges could be revised. (ii) Allowance for inventory obsolescence Inventories are stated at the lower of cost and net realisable value. The management primarily determines cost of inventories using the first-in, first-out method. The management estimates the net realisable value of inventories based on assessment of receipt or committed sales prices and provides for excess and obsolete inventories based on historical and estimated future demand and related pricing. In determining excess quantities, the management considers recent sales activities, related margin and market positioning of its products. However, factors beyond its control, such as demand levels and pricing competition, could change from period to period. Such factors may require the Group to reduce the value of its inventories. The carrying amount of the Groups inventories as at 30 June 2011 was approximately $10,137,000 (2010: $8,065,000).

ANNUAL REPORT 2011

EPICENTRE HOLDINGS LIMITED

59

notes to the nancial statements


FOR THE FINANCIAL YEAR ENDED 30 JUNE 2011

3.

Critical accounting judgements and key sources of estimation uncertainty (Continued) 3.2 Key sources of estimation uncertainty (Continued) (iii) Allowance for doubtful receivables The management establishes allowance for doubtful receivables on a case-by-case basis when they believe that payment of amounts owed is unlikely to occur. In establishing these allowances, the management considers the historical experience and changes to the customers financial position. If the financial conditions of receivables were to deteriorate, resulting in impairment of their abilities to make the required payments, additional allowances may be required. The carrying amounts of the Groups and the Companys trade and other receivables as at 30 June 2011 were approximately $5,841,000 and $6,496,000 (2010: $5,943,000 and $9,645,000) respectively. (iv) Income taxes Significant judgements are involved in determining the Groups and the Companys income taxes. There are certain transactions and computations for which the ultimate tax determination is uncertain during the ordinary course of business. Where the final tax outcome of these matters differs from the amounts that were initially recognised, such differences will impact the current income tax and deferred tax provisions in the financial year in which such determination is made. The carrying amounts of the Groups and the Companys current income tax payable as at 30 June 2011 were approximately $913,000 and $Nil (2010: $575,000 and $9,000) respectively. The carrying amounts of the Groups and the Companys deferred tax liabilities as at 30 June 2011 were approximately $78,000 and $15,000 (2010: $78,000 and $15,000) respectively. (v) Provision for reinstatement costs The Group and the Company measure the provision for reinstatement costs of leased premises to their original state with reference to the terms and conditions of each respective tenancy agreement, and the expected date of reinstatement. The calculation of provision for reinstatement costs requires management to estimate the expected future cash outflows as a result of site restoration at their best estimate. The carrying amounts of the Groups and the Companys provision for reinstatement costs as at 30 June 2011 were approximately $135,000 and $50,000 (2010: $139,000 and $54,000) respectively.

60

EPICENTRE HOLDINGS LIMITED

ANNUAL REPORT 2011

notes to the nancial statements


FOR THE FINANCIAL YEAR ENDED 30 JUNE 2011

4.

Club membership Group and Company 2011 $000 Club membership, at cost 223 2010 $000

Club membership comprises membership from a country club in Singapore. As at the end of the reporting period, the carrying amount of the club membership approximates the fair value. As at 30 June 2011, the club membership with carrying amount of approximately $223,000 (2010: $Nil) is registered in the name of a Director of the Company who is holding the club membership in trust for the Group and the Company. 5. Plant and equipment Demo Group 2011 Cost Balance at 1 July 2010 Additions Disposals Written off Currency translation adjustment Balance at 30 June 2011 Accumulated depreciation Balance at 1 July 2010 Depreciation for the financial year Disposals Written off Currency translation adjustment Balance at 30 June 2011 Carrying amount Balance at 30 June 2011 4 455 324 1,352 375 2,510 6 46 225 * (57) (7) 530 75 (15) (5) 196 672 (31) (3) 1,431 18 33 996 * (103) (15) 2,236 40 369 141 793 15 1,358 50 50 670 384 (1) (57) (11) 985 225 319 (15) (9) 520 2,221 633 (59) (12) 2,783 52 356 408 3,218 1,692 (1) (131) (32) 4,746 $000 Office $000 Furniture $000 $000 Motor vehicles $000 Total $000

equipment equipment and fittings Renovation

Denotes less than $1,000

ANNUAL REPORT 2011

EPICENTRE HOLDINGS LIMITED

61

notes to the nancial statements


FOR THE FINANCIAL YEAR ENDED 30 JUNE 2011

5.

Plant and equipment (Continued) Demo Group 2010 Cost Balance at 1 July 2009 Additions Disposals Currency translation adjustment Balance at 30 June 2010 Accumulated depreciation Balance at 1 July 2009 Depreciation during the financial year Disposals Currency translation adjustment Balance at 30 June 2010 Carrying amount Balance at 30 June 2010 10 301 84 1,428 37 1,860 6 40 152 (1) 6 369 39 5 141 394 3 793 5 15 596 (1) 14 1,358 34 212 97 396 10 749 50 9 670 9 225 11 2,221 52 29 3,218 47 3 378 284 (1) 132 84 546 1,664 52 1,155 2,035 (1) $000 Office $000 Furniture $000 $000 Motor vehicle $000 Total $000

equipment equipment and fittings Renovation

62

EPICENTRE HOLDINGS LIMITED

ANNUAL REPORT 2011

notes to the nancial statements


FOR THE FINANCIAL YEAR ENDED 30 JUNE 2011

5.

Plant and equipment (Continued) Demo Company 2011 Cost Balance at 1 July 2010 Additions Written off Balance at 30 June 2011 Accumulated depreciation Balance at 1 July 2010 Depreciation for the financial year Written off Balance at 30 June 2011 Carrying amount Balance at 30 June 2011 100 87 338 375 900 31 63 (1) 139 9 (15) 9 42 (30) 31 18 33 132 (46) 243 31 77 15 19 15 157 31 239 96 369 408 1,143 31 151 89 (1) 15 96 (15) 54 369 (54) 52 356 303 910 (70) $000 Office $000 Furniture $000 $000 Motor vehicles $000 Total $000

equipment equipment and fittings Renovation

ANNUAL REPORT 2011

EPICENTRE HOLDINGS LIMITED

63

notes to the nancial statements


FOR THE FINANCIAL YEAR ENDED 30 JUNE 2011

5.

Plant and equipment (Continued) Demo Company 2010 Cost Balance at 1 July 2009 Additions Disposals Balance at 30 June 2010 Accumulated depreciation Balance at 1 July 2009 Depreciation for the financial year Disposals Balance at 30 June 2010 Carrying amount Balance at 30 June 2010 74 35 37 146 31 31 (96) 77 1 (30) 15 19 (336) 19 5 15 56 (462) 157 31 142 44 336 10 563 31 31 195 70 (114) 151 48 (33) 15 343 54 (343) 54 52 52 669 124 (490) 303 $000 Office $000 Furniture $000 $000 Motor vehicle $000 Total $000

equipment equipment and fittings Renovation

As at 30 June 2011, the carrying amounts of motor vehicles of the Group and the Company which were acquired under finance lease arrangements were approximately $375,000 and $375,000 (2010: $37,000 and $37,000) respectively. Finance leased assets are pledged as securities for the related finance lease liabilities (Note 13). As at 30 June 2011, the motor vehicle with carrying amount of approximately $343,000 (2010: $Nil) is registered in the name of a Director of the Company who is holding the motor vehicle in trust for the Group and the Company. For the purpose of consolidated statement of cash flows, the Groups additions to plant and equipment were financed as follows: Group 2011 $000 Additions of plant and equipment Less: Provision for reinstatement costs Finance lease agreements Other payables Cash payments to acquire plant and equipment (50) (244) (112) 1,286 (139) 1,896 1,692 2010 $000 2,035

64

EPICENTRE HOLDINGS LIMITED

ANNUAL REPORT 2011

notes to the nancial statements


FOR THE FINANCIAL YEAR ENDED 30 JUNE 2011

6.

Investments in subsidiaries Company 2011 $000 Unquoted equity shares, at cost 1,120 2010 $000 980

The details of the subsidiaries are as follows: Name of company (Country of incorporation) % Epicentre Solutions Pte. Ltd. (Singapore) Epicentre Pte. Ltd. (1) (Singapore) Epicentre Lifestyle Sdn. Bhd. (2) (Formerly known as Afor Sdn. Bhd.) (Malaysia) Epi Lifestyle Pte. Ltd. (1) (Singapore) Epicentre (Shanghai) Co., Ltd (3) (Peoples Republic of China) 70 Dormant 100 100 Dormant 100 100 100 100
(1)

Effective equity interest 2011 100 2010 % 100 Providing IT solutions to educational institutions within Singapore Retail of Apple brand products and complementary products Retail of Apple brand products and complementary products Principal activities

(1) (2) (3)

Audited by BDO LLP, Singapore Audited by BDO, Malaysia Not required to be audited in the country of incorporation

Incorporation of subsidiaries On 14 February 2011, the Company subscribed for 70% equity interest in the registered capital of Epicentre (Shanghai) Co., Ltd, a company incorporated in Peoples Republic of China for a consideration of approximately $140,000 (US$110,000). On 13 April 2010, the Company incorporated a wholly-owned subsidiary, Epi Lifestyle Pte. Ltd., a company incorporated in Singapore for a consideration of $500,000.

ANNUAL REPORT 2011

EPICENTRE HOLDINGS LIMITED

65

notes to the nancial statements


FOR THE FINANCIAL YEAR ENDED 30 JUNE 2011

7.

Inventories Group 2011 $000 Trading goods 10,137 2010 $000 8,065

The cost of inventories recognised as an expense and included in cost of sales line item in profit or loss amounted to approximately $138,397,000 (2010: $73,768,000). As at 30 June 2011, the Group carried out a review of the realisable values of its inventories and the review led to the recognition of an allowance for obsolete inventories and inventories written off of approximately $31,000 and $72,000 (2010: $Nil and $53,000) respectively that have been included in administrative expenses line item in profit or loss. 8. Trade and other receivables Group 2011 $000 Trade receivables third parties Due from subsidiaries non-trade Other receivables and rebate accruals Rental and other deposits 3,644 809 1,388 5,841 2010 $000 4,127 596 1,220 5,943 2011 $000 6,431 65 6,496 Company 2010 $000 47 9,551 47 9,645

Trade receivables are unsecured, non-interest bearing and generally on 30 to 60 days (2010: 30 to 60 days) credit terms. The non-trade amounts due from subsidiaries are unsecured, non-interest bearing and repayable on demand. Movement in allowance for doubtful third parties trade receivables was as follows: Group 2011 $000 Balance at beginning of financial year Write-back of allowance no longer required Balance at end of financial year 2010 $000 7 (7)

66

EPICENTRE HOLDINGS LIMITED

ANNUAL REPORT 2011

notes to the nancial statements


FOR THE FINANCIAL YEAR ENDED 30 JUNE 2011

8.

Trade and other receivables (Continued) The write-back of allowance for doubtful third parties trade receivables no longer required of approximately $Nil (2010: $7,000) were included in administrative expenses line item in profit or loss subsequent to the recovery of the related receivables. Trade and other receivables are denominated in the following currencies: Group 2011 $000 Singapore dollar United States dollar Ringgit Malaysia Chinese renminbi 4,513 524 780 24 5,841 2010 $000 5,033 487 423 5,943 2011 $000 6,496 6,496 Company 2010 $000 9,645 9,645

9.

Derivative financial instruments Group 2011 $000 Assets Foreign currency forward contracts Liabilities Foreign currency forward contracts 14 6 45 45 2010 $000 2011 $000 Company 2010 $000

Foreign currency forward contracts Foreign currency forward contracts are agreements to buy or sell fixed amounts of currency at agreed exchange rates to be settled in the future. The Group and the Company enter into various foreign currency forward contracts to reduce its exposure on anticipated transactions and firm commitments, primarily for forecasted cash outflows denominated in currencies other than the Companys and the respective subsidiaries functional currencies. These foreign currency forward contracts generally have maturity dates of less than 6 months.

ANNUAL REPORT 2011

EPICENTRE HOLDINGS LIMITED

67

notes to the nancial statements


FOR THE FINANCIAL YEAR ENDED 30 JUNE 2011

9.

Derivative financial instruments (Continued) Foreign currency forward contracts (Continued) As at the end of the reporting period, the Group and the Company entered into foreign currency forward contracts as follows: Average exchange rates 1.23 Foreign currency 000 $4,684 Notional amount 000 US$3,800

Group 2011 Buy United States dollar

Fair value $000 (14)

Settlement date 21 July to 29 July 2011

2010 Buy United States dollar

1.39

$9,176

US$6,600

45

16 August to 23 December 2010

Company 2011 Buy United States dollar 2010 Buy United States dollar

1.23

$1,235

US$1,000

(6)

21 July 2011

1.39

$9,176

US$6,600

45

16 August to 23 December 2010

The above derivatives are measured at fair values at the end of the reporting period. Their fair values are determined based on the market prices for equivalent instruments at the end of the reporting period. 10. Cash and cash equivalents Group 2011 $000 Cash and bank balances Fixed deposits Cash and cash equivalents on statements of financial position Fixed deposits pledged Cash and cash equivalents included in consolidated statement of cash flows 13,675 1,195 14,870 14,870 2010 $000 8,737 2,257 10,994 (1,713) 9,281 Company 2011 2010 $000 $000 1,929 1,195 3,124 1,346 2,146 3,492

Fixed deposits mature on varying dates within 1 year (2010: 1 to 2 years) from the end of the reporting period with options for early termination. The effective interest rates on the fixed deposits range from 0.25% to 0.50% (2010: 0.35% to 1.83%) per annum.

68

EPICENTRE HOLDINGS LIMITED

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notes to the nancial statements


FOR THE FINANCIAL YEAR ENDED 30 JUNE 2011

10.

Cash and cash equivalents (Continued) As at the end of the reporting period, the Group and the Company have banking facilities as follows: Group 2011 $000 Banking facilities granted Banking facilities utilised currency forward exchange bankers guarantee 4,684 4,472 9,156 9,176 2,499 11,675 1,235 1,381 2,616 9,176 2,499 11,675 62,398 2010 $000 29,338 2011 $000 14,173 Company 2010 $000 29,338

As at 30 June 2011, the banking facilities of approximately $44,953,000 were granted jointly to certain entities within the Group. As at 30 June 2011, the Groups and the Companys banking facilities are unsecured. As at 30 June 2010, the Groups and the Companys banking facilities of approximately $29,338,000 and $29,338,000 are secured by fixed deposits of approximately $1,713,000 and $1,713,000 respectively. Cash and cash equivalents are denominated in the following currencies: Group 2011 $000 Singapore dollar United States dollar Ringgit Malaysia Chinese renminbi 11,391 1,298 2,028 153 14,870 2010 $000 8,348 2,220 426 10,994 2011 $000 1,906 1,218 3,124 Company 2010 $000 2,104 1,388 3,492

ANNUAL REPORT 2011

EPICENTRE HOLDINGS LIMITED

69

notes to the nancial statements


FOR THE FINANCIAL YEAR ENDED 30 JUNE 2011

11.

Trade and other payables Group 2011 $000 Trade payables third parties Deposits placed by customers Accrued operating expenses Other payables third parties a director of the Company 571 112 12,967 170 8,733 49 112 450 33 579 10,939 768 577 2010 $000 7,314 438 811 2011 $000 3 286 Company 2010 $000 44 502

Trade payables are unsecured, non-interest bearing and are normally settled between 30 to 60 days (2010: 30 to 60 days) credit terms. The non-trade amount due to a Director of the Company is unsecured, non-interest bearing and repayable on demand. Trade and other payables are denominated in the following currencies: Group 2011 $000 Singapore dollar United States dollar Ringgit Malaysia Chinese renminbi 3,627 8,844 448 48 12,967 2010 $000 3,118 5,131 484 8,733 2011 $000 450 450 Company 2010 $000 579 579

70

EPICENTRE HOLDINGS LIMITED

ANNUAL REPORT 2011

notes to the nancial statements


FOR THE FINANCIAL YEAR ENDED 30 JUNE 2011

12.

Provisions Group 2011 $000 Provision for reinstatement costs Balance at beginning of financial year Provision made during the financial year Reversal of provision unutilised Balance at end of financial year 139 50 (54) 135 139 139 54 50 (54) 50 54 54 2010 $000 2011 $000 Company 2010 $000

The provision for reinstatement costs are the estimated costs of dismantlement, removal or restoration of plant and equipment arising from the use of assets which are capitalised and included in the cost of plant and equipment. 13. Finance lease payables Present value Minimum lease Group and Company 2011 Current liabilities Within one financial year Non-current liabilities After one financial year but within five financial years After five financial years 197 29 226 266 (23) (3) (26) (31) 174 26 200 235 40 (5) 35 payments $000 Future finance charges $000 of minimum lease payments $000

ANNUAL REPORT 2011

EPICENTRE HOLDINGS LIMITED

71

notes to the nancial statements


FOR THE FINANCIAL YEAR ENDED 30 JUNE 2011

13.

Finance lease payables (Continued) Present value Minimum lease Group and Company 2010 Current liabilities Within one financial year Non-current liabilities After one financial year but within five financial years 1 8 (1) 1 7 7 (1) 6 payments $000 Future finance charges $000 of minimum lease payments $000

The finance lease terms are 4 to 7 (2010: 4) years and the effective interest rates for finance lease obligations ranges from 3.57% to 6.04% (2010: 6.04%) per annum. Interest rates are fixed at contract date and thus expose the Group and the Company to fair value interest rate risk. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments. The Groups and the Companys obligations under finance leases are secured by the lessors title to the leased assets, which will revert to the lessors in the event of default by the Group and the Company. The fair values of non-current finance leases as at the end of the reporting period approximate their carrying amounts. The finance lease payables are denominated in Singapore dollar. 14. Deferred tax liabilities Group 2011 $000 Balance at beginning of financial year Charged to profit or loss Balance at end of financial year 78 78 2010 $000 42 36 78 2011 $000 15 15 Company 2010 $000 15 15

Deferred tax liabilities arise as a result of temporary differences between the tax written down values and the carrying amounts of plant and equipment.

72

EPICENTRE HOLDINGS LIMITED

ANNUAL REPORT 2011

notes to the nancial statements


FOR THE FINANCIAL YEAR ENDED 30 JUNE 2011

15.

Share capital Group and Company 2011 Number of ordinary shares Issued and fully-paid: At beginning and end of financial year 93,501,600 93,501,600 6,709 6,709 2010 Number of ordinary shares 2011 $000 2010 $000

The holders of ordinary shares are entitled to receive dividends as and when declared by the Company. All ordinary shares have no par value and carry one vote per share without restriction. 16. Foreign currency translation (account)/reserve The foreign currency translation (account)/reserve comprises all foreign exchange differences arising from the translation of the financial statements of foreign operations whose functional currency is different from that of the Groups presentation currency and is non-distributable. 17. Revenue Revenue represents the invoiced value of goods sold less goods returned, discounts allowed and goods and services tax. 18. Other income Group 2011 $000 Facilities fees Foreign exchange gain, net Government grant Jobs credit scheme Marketing income Sponsorship income Reversal of provision for reinstatement cost unutilised Others 300 3 146 622 30 264 1,365 2010 $000 203 532 102 127 358 73 1,395

ANNUAL REPORT 2011

EPICENTRE HOLDINGS LIMITED

73

notes to the nancial statements


FOR THE FINANCIAL YEAR ENDED 30 JUNE 2011

19.

Profit before income tax In addition to the charges and credits disclosed elsewhere in the notes to the financial statements, the above includes the following charges/(credits): Group 2011 $000 Administrative expenses Allowance for inventory obsolescence Bad third parties trade receivables written off Depreciation of plant and equipment Directors fees Directors of the Company Foreign exchange loss, net Loss on disposals of plant and equipment Non-audit fees paid auditors of the Company other auditors of subsidiaries Inventories written off Operating lease expenses Plant and equipment written off Write-back of allowance for doubtful third parties trade receivables no longer required Employee benefits expense salaries, wages, and bonuses contributions to defined contribution plans other employee benefits Selling and distribution costs Advertising and promotion Commission expenses Credit card charges 1,579 569 2,190 1,105 339 1,302 6,845 608 362 3,582 394 292 (7) 12 6 72 4,213 4 11 2 53 2,607 31 23 996 262 238 1 596 100 2010 $000

Included in the employee benefits expense were Directors remuneration as shown in Note 24 to the financial statements.

74

EPICENTRE HOLDINGS LIMITED

ANNUAL REPORT 2011

notes to the nancial statements


FOR THE FINANCIAL YEAR ENDED 30 JUNE 2011

20.

Income tax expense Group 2011 $000 Current income tax current financial year (over)/under provision in prior financial years Deferred income tax current financial year Total income tax expense recognised in profit or loss 983 36 709 1,006 (23) 983 657 16 673 2010 $000

Reconciliation of effective income tax rate Group 2011 $000 Profit before income tax Income tax calculated at Singapores statutory income tax rate of 17% Effect of different income tax rate in other countries Expenses not deductible for income tax purposes Income not taxable for income tax purposes Singapores statutory stepped income tax exemption (Over)/Under provision of current income tax in prior financial years Enhanced income tax deduction Others 5,730 974 47 167 (19) (26) (23) (108) (29) 983 2010 $000 4,097 696 30 54 (36) (35) 16 (8) (8) 709

ANNUAL REPORT 2011

EPICENTRE HOLDINGS LIMITED

75

notes to the nancial statements


FOR THE FINANCIAL YEAR ENDED 30 JUNE 2011

21.

Earnings per share The calculation for earnings per share is based on: Group 2011 Profit for the financial year attributable to owners of the parent ($000) Actual number of ordinary shares Basic and diluted earnings per share (in cents) 4,767 93,501,600 5.10 2010 3,388 93,501,600 3.62

Basic earnings per share is calculated by dividing profit for the financial year attributable to owners of the parent by the actual number of ordinary shares in issue during the financial year. As the Group has no dilutive potential ordinary shares, the diluted earnings per share is equivalent to basic earnings per share for the financial year. 22. Dividends Group and Company 2011 $000 Interim tax-exempt (one-tier) dividend declared and paid of $0.01 (2010: $Nil) per share in respect of the current financial year First and final tax-exempt (one-tier) dividend declared and paid of $0.02 (2010: $Nil) per share in respect of financial years ended 30 June 2010 and 2009 1,870 2,805 935 2010 $000

The Directors of the Company recommend a final and a special one-off tax-exempt dividends of $0.02 and $0.02 per share respectively with an aggregate amount of approximately $3,740,000 to be paid in respect of the financial year ended 30 June 2011. These final and special one-off dividends have not been recognised as liabilities as at the end of the reporting period as these dividends are subject to approval at the Annual General Meeting of the Company.

76

EPICENTRE HOLDINGS LIMITED

ANNUAL REPORT 2011

notes to the nancial statements


FOR THE FINANCIAL YEAR ENDED 30 JUNE 2011

23.

Commitments Operating lease commitments Group and Company as lessees As at the end of the reporting period, there were operating lease commitments for rental payable in subsequent accounting periods as follows: Group 2011 $000 Within one financial year After one financial year but within five financial years 4,303 8,207 3,508 6,696 366 613 122 271 3,904 2010 $000 3,188 2011 $000 247 Company 2010 $000 149

The above operating lease commitments are based on existing rental rates. Some of the operating leases of premises provide for rentals based on percentage of sales derived from the rented premises. The Group and the Company have the options to renew certain agreements on the lease premises for 3 years.

ANNUAL REPORT 2011

EPICENTRE HOLDINGS LIMITED

77

notes to the nancial statements


FOR THE FINANCIAL YEAR ENDED 30 JUNE 2011

24.

Significant related party transactions For the purpose of these financial statements, parties are considered to be related to the Group and the Company if the Group or the Company have 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 or the Company and the party are subject to common control or common significant influence. Related parties may be individuals or other entities. In addition to the information disclosed elsewhere in the financial statements, the following are significant related party transactions during the financial year at rates and terms agreed between the parties: Group 2011 $000 With subsidiaries Advances made to a subsidiary Management fees charged to subsidiaries Settlement of liabilities on behalf of subsidiaries Transfers of plant and equipment to a subsidiary With a Director of the Company Payments made by a Director on behalf of the Company 112 112 5,008 5,912 34 5,719 2,747 7,216 26 2010 $000 2011 $000 Company 2010 $000

Compensation of key management personnel The remuneration of the key management personnel who are also the Directors of the Company during the financial year are as follows: Group and Company 2011 $000 Directors fees Short-term benefits Post-employment benefits 262 2,692 27 2,981 2010 $000 100 632 27 759

78

EPICENTRE HOLDINGS LIMITED

ANNUAL REPORT 2011

notes to the nancial statements


FOR THE FINANCIAL YEAR ENDED 30 JUNE 2011

25.

Segment information Management has determined the operating segments based on the reports reviewed by the chief operating decision maker. A segment is a distinguishable component of the Group that is engaged either in providing products or services (business segment), or in providing products or services within a particular economic environment (geographical segment), which is subject to risks and rewards that are different from those of other segments. Management monitors the operating results of the segments separately for the purpose of making decision about resources to be allocated and of assessing performance. Segments performances are evaluated based on operation profit or loss which is similar to the accounting profit or loss. The Group has two reportable segments being apple brand products and third party and proprietary brand complementary products. The Groups reportable segments are strategic business units that are organised based on their function and targeted customers group. They are managed separately because each business unit requires different skill sets and market strategies. Management monitors the operating results of the segments separately for the purpose of making decisions about resources to be allocated and of assessing performance. Segment performance is evaluated based on operation profit or loss which is similar to the accounting profit or loss. Income taxes are managed on a Group basis. The accounting policies of the operating segments are the same of those described in the summary of significant accounting policies. There is no asymmetrical allocation to reportable segments. Management evaluates performance on the basis of profit or loss from operations before income tax expense not including non-recurring gains and losses and foreign exchange gains or losses. There is no change from prior periods in the measurement methods used to determine reportable segment profit or loss.

ANNUAL REPORT 2011

EPICENTRE HOLDINGS LIMITED

79

notes to the nancial statements


FOR THE FINANCIAL YEAR ENDED 30 JUNE 2011

25.

Segment information (Continued) The Group accounts for intersegment sales and transfers as if the sales or transfers were to third parties, which approximate market prices. These intersegment transactions are eliminated on consolidation. Third party and proprietary brand Apple brand products $000 2011 Revenue External revenue Inter-segment revenue 138,703 485 139,188 Results Interest income Depreciation of plant and equipment Operating lease expenses Other material non-cash expenses allowance for inventory obsolescence bad third parties trade receivables written off inventories written off plan and equipment written off reversal of provision for reinstatement cost unutilised Segment profit Capital expenditure Plant and equipment Asset and liabilities Segment assets Segment liabilities Current income tax payable 35,293 18,856 8,656 3,249 78 913 (9,875) (8,754) 34,074 13,429 913 14,342 1,443 249 1,692 26 2,139 4 2,853 738 30 5,730 (20) (61) (3) (3) (11) (1) (23) (72) (4) (26) (5) (31) (850) (3,594) (146) (619) (996) (4,213) 13 13 23,900 10 23,910 5,912 5,912 (6,407) (6,407) 162,603 162,603 complementary products $000 Unallocated $000 Elimination $000 Consolidated $000

80

EPICENTRE HOLDINGS LIMITED

ANNUAL REPORT 2011

notes to the nancial statements


FOR THE FINANCIAL YEAR ENDED 30 JUNE 2011

25.

Segment information (Continued) Third party and proprietary brand Apple brand products $000 2010 Revenue External revenue Inter-segment revenue 71,857 225 72,082 Results Interest income Depreciation of plant and equipment Operating lease expenses Other material non-cash expenses inventories written off write-back of allowance for doubtful third parties trade receivables no longer required Segment profit Capital expenditure Plant and equipment Asset and liabilities Segment assets Segment liabilities Current income tax payable 22,078 7,245 6,196 1,634 78 575 (980) 27,294 8,957 575 9,532 1,660 375 2,035 (6) 1,050 (1) 2,438 609 (7) 4,097 (43) (10) (53) (486) (2,127) (110) (480) (596) (2,607) 14 14 16,225 122 16,347 2,747 2,747 (3,094) (3,094) 88,082 88,082 complementary products $000 Unallocated $000 Elimination $000 Consolidated $000

ANNUAL REPORT 2011

EPICENTRE HOLDINGS LIMITED

81

notes to the nancial statements


FOR THE FINANCIAL YEAR ENDED 30 JUNE 2011

25.

Segment information (Continued) Geographic information The Groups business segments operate in two main geographical areas. Revenue is based on the countries in which the customers are located. Revenue from external customers Singapore $000 2011 Revenue from external customers 2010 Revenue from external customers Non-current assets Peoples Republic of China $000 11 139,127 Malaysia $000 23,476 Consolidated $000 162,603

77,543

10,539

88,082

Singapore $000 2011 Non-current assets 2010 Non-current assets 2,090

Malaysia $000 632

Consolidated $000 2,733

1,561

299

1,860

Non-current assets shown by the geographical area in which the assets are located. Major customers The Group does not have a major customer whose revenue is 10% or more of the Groups revenue. 26. Financial instruments, financial risks and capital management The Groups and the Companys activities expose them to credit risk, market risk (including foreign currency risk and interest rate risk) and liquidity risk. The Groups and the Companys overall risk management strategy seek to minimise adverse effects from the volatility of financial markets on the Groups and the Companys financial performance. The Board of Directors of the Company is responsible for settling the objectives and underlying principles of financial risk management for the Group and the Company. The Groups and the Companys management then establish the detailed policies such as risk identification and measurement, exposure limits and hedging strategies, in accordance with the objectives and underlying principles approved by the Board of Directors. There has been no change to the Groups and the Companys exposure to these financial risks or the manner in which they manage and measure these risks.

82

EPICENTRE HOLDINGS LIMITED

ANNUAL REPORT 2011

notes to the nancial statements


FOR THE FINANCIAL YEAR ENDED 30 JUNE 2011

26.

Financial instruments, financial risks and capital management (Continued) 26.1 Credit risk Credit risk refers to the risk that counterparty will default on its contractual obligations resulting in a loss to the Group and the Company. The Group does not have any significant credit exposure to any single counterparty or any group of counterparties having similar characteristics on trade receivables from third parties. The Company has significant credit exposure arising from the non-trade amounts due from subsidiaries amounting to approximately $6,431,000 (2010: $9,551,000) as at the end of the reporting period. As the Group and the Company do not hold any collateral, the maximum exposure to credit risk for each class of financial instrument is the carrying amount of that class of financial instrument. The Groups and the Companys major classes of financial assets are cash and cash equivalents and trade and other receivables. Trade receivables that are neither past due nor impaired are substantially companies with good collection track records within the Group. The Groups historical experience in the collection of receivables falls within the credit terms. The table below is an analysis of gross trade receivables as at the end of the reporting period. Group 2011 $000 Not impaired Not past due Past due 61 to 90 days Past due more than 90 days Total trade receivables 3,488 132 24 3,644 2010 $000 3,620 357 150 4,127 Company 2011 2010 $000 $000 43 4 47

The table below is an analysis of the Companys gross non-trade receivables from its subsidiaries as at the end of the reporting period. Company 2011 $000 Not impaired Not past due Past due 61 to 90 days Past due more than 90 days Total non-trade receivables from subsidiaries 4,165 1,229 1,037 6,431 2010 $000 9,375 176 9,551

26.

Financial instruments, financial risks and capital management (Continued)

26.2

Market risk

(i)

Foreign currency risk

Foreign currency risk arises from transactions denominated in currencies other than the functional currency of the entities within the Group. The currency that gives rise to the risk is primarily United States dollar. This risk is managed either by foreign currency forward contracts in respect of actual or forecast currency exposures or through natural hedges arising from a matching of assets and liabilities of the same currency and amount.

The Groups and the Companys currency exposure based on the information available to key management is as follows: Financial assets Financial liabilities

FOR THE FINANCIAL YEAR ENDED 30 JUNE 2011

notes to the nancial statements

Group 2011 11,391 1,298 2,028 153 14,870 20,711 (12,199) (235) (12,434) 15,904 1,822 2,808 177 (2,891) (8,844) (416) (48) (235) (3,126) (8,844) (416) (48)

Trade and other receivables $000 Total $000 Total $000 12,778 (7,022) 2,392 129 8,277

Cash and cash equivalents $000

Trade and other payables excluding deposits placed by customers $000 Finance lease payables $000 (12,778) (2,392) (129)

Net financial assets denominated in the respective Net entities financial functional assets/ (liabilities) currencies $000 $000

Currency exposure $000 (7,022)

Singapore dollar United States dollar Ringgit Malaysia Chinese renminbi

4,513 524 780 24

ANNUAL REPORT 2011

5,841

2010 Singapore dollar United States dollar Ringgit Malaysia 8,348 2,220 426 10,994 16,937 (8,295) 13,381 2,707 849 (2,680) (5,131) (484)

5,033 487 423

(7) (7)

(2,687) (5,131) (484) (8,302)

10,694 (2,424) 365 8,635

(10,694) (365)

(2,424)

EPICENTRE HOLDINGS LIMITED

5,943

83

84

26.

Financial instruments, financial risks and capital management (Continued)

26.2

Market risk (Continued)

(i)

Foreign currency risk (Continued)

The Groups and the Companys currency exposure based on the information available to key management is as follows:

EPICENTRE HOLDINGS LIMITED

(Continued) Financial assets Financial liabilities

FOR THE FINANCIAL YEAR ENDED 30 JUNE 2011

ANNUAL REPORT 2011

2011

Company 2011 1,906 1,218 3,124 9,620 (450) (235) (685) 8,402 1,218 (450) (235) (685) 7,717 1,218 8,935

Trade and other receivables $000 Total $000 Total $000

Cash and cash equivalents $000

Trade and other payables $000

Finance lease payables $000

Net financial assets $000

Net financial assets denominated in the respective entities functional currencies $000 (7,717) 1,218

Currency exposure $000

notes to the nancial statements

Singapore dollar United States dollar

6,496

6,496

2010 Singapore dollar United States dollar 2,104 1,388 3,492 13,137 (579) (7) 11,749 1,388 (579) (7)

9,645

(586) (586)

11,163 1,388 12,551

(11,163)

1,388

9,645

ANNUAL REPORT 2011

EPICENTRE HOLDINGS LIMITED

85

notes to the nancial statements


FOR THE FINANCIAL YEAR ENDED 30 JUNE 2011

26.

Financial instruments, financial risks and capital management (Continued) 26.2 Market risk (Continued) (i) Foreign currency risk (Continued) Foreign currency sensitivity analysis The Groups and the Companys exposure to foreign currency risks is mainly in United States dollar. The following table details the Groups and the Companys sensitivity to a 5% increase and decrease in United States dollar against Singapore dollar. The 5% is used when reporting sensitivity of foreign currency risk. The sensitivity analysis includes only outstanding United States dollar monetary items and adjusts their translation at the end of the reporting period for a 5% change in foreign currency rates. Profit or loss Group 2011 $000 United States dollar Strengthened 5% Weakened 5% (351) 351 (121) 121 60 (60) 69 (69) 2010 $000 2011 $000 Company 2010 $000

The potential impact on profit or loss of the Group as described in the sensitivity analysis above is attributable mainly to the Groups and the Companys foreign currency exchange rate exposure on monetary assets and monetary liabilities denominated in United States dollar. (ii) Interest rate risk Interest rate risk is the risk that the fair value of future cash flows of the Groups and the Companys financial instruments will fluctuate because of changes market interest rate. No sensitivity analysis is prepared as the Group and the Company do not expect any material effect on the Groups profit or loss arising from the effects of reasonably possible changes to interest rates on interest-bearing financial instruments at the end of the reporting period.

86

EPICENTRE HOLDINGS LIMITED

ANNUAL REPORT 2011

notes to the nancial statements


FOR THE FINANCIAL YEAR ENDED 30 JUNE 2011

26.

Financial instruments, financial risks and capital management (Continued) 26.3 Liquidity risk Liquidity risks refer to the risks in which the Group and the Company encounter difficulties in meeting shortterm obligations. Liquidity risks are managed by matching the payment and receipt cycle. The Group and the Company manage their debt maturity profile, operating cash flows and the availability of funding so as to ensure that all repayment and funding needs are met. As part of the overall prudent liquidity management, the Group and the Company maintain sufficient levels of cash and available banking facilities to meet their working capital requirements. The table below analyses the maturity profile of the Groups and Companys financial assets and liabilities based on contractual undiscounted cash flows. After one financial year but within five financial years $000

Within one financial year $000 Group 2011 Financial assets Non-interest bearing Variable interest bearing

After five financial years $000

Total $000

19,516 1,200 20,716

19,516 1,200 20,716

Financial liabilities Non-interest bearing Variable interest bearing

12,981 40 13,021

197 197

29 29

12,981 266 13,247

2010 Financial assets Non-interest bearing Variable interest bearing

14,725 2,306 17,031

14,725 2,306 17,031

Financial liabilities Non-interest bearing Variable interest bearing

8,733 7 8,740

1 1

8,733 8 8,741

ANNUAL REPORT 2011

EPICENTRE HOLDINGS LIMITED

87

notes to the nancial statements


FOR THE FINANCIAL YEAR ENDED 30 JUNE 2011

26.

Financial instruments, financial risks and capital management (Continued) 26.3 Liquidity risk (Continued) After one financial year but Within one financial year $000 Company 2011 Financial assets Non-interest bearing Variable interest bearing 8,425 1,200 9,625 8,425 1,200 9,625 within five financial years $000 After five financial years $000 Total $000

Financial liabilities Non-interest bearing Variable interest bearing 456 40 496 197 197 29 29 456 266 722

2010 Financial assets Non-interest bearing Variable interest bearing 11,036 2,193 13,229 11,036 2,193 13,229

Financial liabilities Non-interest bearing Variable interest bearing 579 7 586 1 1 579 8 587

88

EPICENTRE HOLDINGS LIMITED

ANNUAL REPORT 2011

notes to the nancial statements


FOR THE FINANCIAL YEAR ENDED 30 JUNE 2011

26.

Financial instruments, financial risks and capital management (Continued) 26.4 Capital management policies and objectives The Group and the Company manage their capital to ensure that the Group and the Company will be able to continue as going concern and to maintain an optimal capital structure so as to maximise shareholders value. The Group and the Company manage their capital structure and make adjustments to it, in light of changes in economic conditions. To maintain or adjust the capital structure, the Group and the Company may adjust the return capital to shareholders or issue new share, make dividend payment or obtain new borrowings. No changes were made in the objectives, policies or processes during the financial year. The Group and the Company are in compliance with all bank covenants for the financial years ended 30 June 2011 and 2010. 26.5 Fair value of financial assets and financial liabilities The carrying amounts of the Groups and the Companys cash and cash equivalents, finance lease payables, trade and other receivables and payables approximate their respective fair values due to the relatively short term maturity of these financial instruments. The fair values non-current liabilities in relation to finance lease payables are disclosed in Note 13 to the financial statements. 26.6 Categories of financial instruments The following table sets out the financial instruments as at the end of the reporting period: Group 2011 $000 Financial assets Loans and receivables (including cash and cash equivalents) Derivative financial instruments 20,711 16,937 45 9,620 13,137 45 2010 $000 2011 $000 Company 2010 $000

Financial liabilities Amortised cost (including finance lease payables) Derivative financial instruments 13,202 14 8,740 685 6 586

ANNUAL REPORT 2011

EPICENTRE HOLDINGS LIMITED

89

notes to the nancial statements


FOR THE FINANCIAL YEAR ENDED 30 JUNE 2011

27.

Events subsequent to the reporting date 27.1 Capital injection in subsidiaries On 11 August 2011, the Company injected RMB2,800,000 into Epicentre (Shanghai) Co., Ltd to meet its capital commitment. The increase did not change the Companys effective equity interest in the subsidiary. On 2 September 2011, Epicentre Pte Ltd, a subsidiary, increased its issued and paid-up share capital from $315,000 comprising 315,000 ordinary shares to $500,000 comprising 500,000 ordinary shares through allotment and issuance of 185,000 new ordinary shares to the Company for a cash consideration of $185,000. On 7 September 2011, Epicentre Lifestyle Sdn. Bhd., a subsidiary, increased its issued and paid-up share capital from approximately $129,000 (RM300,000) comprising 300,000 ordinary shares to approximately $332,000 (RM800,000) comprising 800,000 ordinary shares through allotment and issuance of 800,000 new ordinary shares to the Company for a cash consideration of approximately $203,000 (RM500,000).

28.

Comparative information During the current financial year, the Group and the Company have presented prepayments separately from the trade and other receivables on the face of the statements of financial position of the Group and the Company to better reflect the nature of the accounts. Accordingly, the comparative figures of the Group and the Company have been reclassified for consistency. As a result, certain line items have been amended on the face of the statements of financial position of the Group and the Company and the consolidated statement of cash flows as follows: Group As previously reported $000 Statements of financial position 2010 Trade and other receivables Prepayments Consolidated statement of cash flows 2010 Trade and other receivables Prepayments (2,457) (2,365) (122) 6,330 5,943 387 9,864 9,645 219 After reclassification $000 Company As previously reported $000 After reclassification $000

The reclassification has no effect on the reported profit or loss, total income and expense or net assets for the period reported. Accordingly, the management did not present statements of financial position of the Group and the Company at the beginning of the earliest comparative period.

90

EPICENTRE HOLDINGS LIMITED

ANNUAL REPORT 2011

statistics of shareholdings
AS AT 20 SEPTEMBER 2011

SHAREHOLDERS INFORMATION AS AT 20 SEPTEMBER 2011 Total Number of Shares Class of Shares Voting Rights Treasury Shares : : : : 93,501,600 Ordinary Shares One vote per ordinary share (excluding treasury shares) Nil

DISTRIBUTION OF SHAREHOLDINGS No. of Shareholders 0 515 193 8 716 No. of Shares 0 2,183,000 15,422,000 75,896,600 93,501,600

Size of Shareholdings 1 999 1,000 10,000 10,001 1,000,000 1,000,001 and above TOTAL TOP TWENTY SHAREHOLDERS Name 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20. FONG TECK LOON GOH ANN ANN JOHNSON ROWSLEY SPORTS PTE LTD DBS NOMINEES PTE LTD LAM WAI HENG LI CHOW CHIN LIM & TAN SECURITIES PTE LTD ABN AMRO NOMINEES SINGAPORE PTE LTD RAFFLES NOMINEES (PTE) LTD CITIBANK NOMINEES SINGAPORE PTE LTD HONG LEONG FINANCE NOMINEES PTE LTD BRENDA YEO LEONG MEE WAN CHEW BEE CHOO CIMB SECURITIES (SINGAPORE) PTE LTD MERRILL LYNCH (SINGAPORE) PTE LTD CHAN MUN-E LAI WENG KAY RUPERT JAMES PHILIP MORTON DMG & PARTNERS SECURITIES PTE LTD TOTAL

% 0.00 71.93 26.95 1.12 100.00

% 0.00 2.34 16.49 81.17 100.00

No. of Shares 50,369,800 10,710,000 4,861,000 3,168,000 2,538,800 1,639,000 1,510,000 1,100,000 881,000 832,000 800,000 630,000 500,000 472,000 420,000 398,000 350,000 320,000 258,000 248,000 82,005,600

% 53.87 11.45 5.20 3.39 2.72 1.75 1.61 1.18 0.94 0.89 0.86 0.67 0.53 0.50 0.45 0.43 0.37 0.34 0.28 0.27 87.70

The percentage of shareholding above is computed based on the total issued shares of 93,501,600.

ANNUAL REPORT 2011

EPICENTRE HOLDINGS LIMITED

91

statistics of shareholdings
AS AT 20 SEPTEMBER 2011

SUBSTANTIAL SHAREHOLDERS (As recorded in the Register of Substantial Shareholders) Direct Interest Jimmy Fong Teck Loon(1) Brenda Yeo
(1)

% 53.87 0.67 11.45 5.20

Deemed Interest 630,000 50,369,800 4,861,000 4,861,000 4,861,000

% 0.67 53.87 5.20 5.20 5.20

50,369,800 630,000 10,710,000 4,861,000

Johnson Goh Ann Ann Rowsley Sports Pte. Ltd. Rowsley Ltd(2) Garville Pte Ltd(2) Lim Eng Hock(2)
Notes: (1)

Mr Jimmy Fong Teck Loon is deemed to be interested in the 630,000 shares held by his wife, Ms Brenda Yeo and vice versa by virtue of Section 7 of the Companies Act, Cap. 50.

(2)

Rowsley Ltd, Garville Pte Ltd and Lim Eng Hock are deemed to be interested in the 4,861,000 shares held by Rowsley Sports Pte. Ltd. by virtue of Section 7 of the Companies Act, Cap. 50.

PERCENTAGE OF SHAREHOLDING IN PUBLICS HANDS 28.7% of the Companys shares are held in the hands of public. Accordingly, the Company has complied with Rule 723 of the Listing Manual Section B: Rules of Catalist of the SGX-ST.

92

EPICENTRE HOLDINGS LIMITED

ANNUAL REPORT 2011

addendum

ADDENDUM DATED 11 OCTOBER 2011 THIS ADDENDUM IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION. This addendum (the Addendum) is circulated to the shareholders of Epicentre Holdings Limited (the Company) together with the Companys annual report for financial year ended 30 June 2011. The purpose of this Addendum is to provide the shareholders of Epicentre Holdings Limited with relevant information relating to and to seek shareholders approval to renew the share buyback mandate to be tabled at the Annual General Meeting to be held at 1 Orchid Club Road, Orchid Country Club Level 1, Golf Clubhouse, Octagon, Singapore 769162, on Friday, 28 October 2011 at 10.00 a.m.. If you are in any doubt as to the action you should take, you should consult your stockbroker, bank manager, solicitor, accountant, tax adviser or other professional adviser immediately. If you have sold or transferred all your shares in the capital of Epicentre Holdings Limited, you should immediately send this Addendum, the Notice of Annual General Meeting and the Proxy Form to the purchaser or transferee or to the bank, stockbroker or agent through whom the sale or transfer was effected for onward transmission to the purchaser or transferee. The Notice of the Annual General Meeting and the Proxy Form are enclosed with the Annual Report 2011. The Singapore Exchange Securities Trading Limited (SGX-ST) has not examined the contents of this Addendum. The SGX-ST assumes no responsibility for the contents of this Addendum, including the correctness of any of the statements or opinions made or reports contained in this Addendum. This Addendum has been prepared by the Company and its contents have been reviewed by the Companys sponsor (Sponsor), Asian Corporate Advisors Pte. Ltd. (Asian Corporate Advisors), for compliance with the relevant rules of the SGX-ST. The Companys Sponsor has not independently verified the contents of this Addendum including the correctness of any of the figures used, statements or opinions made. The contact person for the Sponsor is Mr Liau H.K. Telephone number: 6221 0271.

Epicentre Holdings Limited


(Company Registration No: 200202930G) (Incorporated in the Republic of Singapore)

ADDENDUM TO ANNUAL REPORT IN RELATION TO THE PROPOSED RENEWAL OF THE SHARE BUYBACK MANDATE

ANNUAL REPORT 2011

EPICENTRE HOLDINGS LIMITED

93

addendum

DEFINITIONS For the purpose of this Addendum, the following definitions apply throughout, unless the context otherwise requires: ACRA Act or Companies Act Accounting and Corporate Regulatory Authority of Singapore Companies Act (Chapter 50) of Singapore, as amended or modified from time to time Addendum This Addendum to Shareholders dated 11 October 2011 in relation to the proposals as set out in section 1.1 AGM or Annual General Meeting The annual general meeting of the Company to be held at 1 Orchid Club Road, Orchid Country Club Level 1, Golf Clubhouse, Octagon, Singapore 769162 on Friday, 28 October 2011 at 10.00 a.m., to approve, inter-alia, the adoption of a share buyback mandate in accordance with the terms and conditions as set out in this Addendum as well as the Companies Act and the Catalist Rules Board or Directors The board of directors or directors of the Company, including executive, nonexecutive, independent and non-independent directors of the Company for the time being Catalist Rules The provisions of Section A and Section B: Rules of Catalist of the SGX-ST of the Listing Manual (excluding the Best Practices Guide, the Code, and the Practice Notes) as amended, supplemented or modified from time to time CDP The Central Depository (Pte) Limited

Companies Amendment Act 2005 Companies (Amendment) Act 2005 of Singapore Company or Epicentre Director EPS FY Group Latest Practicable Date Epicentre Holdings Limited A director of the Company Earnings per Share Financial year ended or ending 30 June (as the case may be) unless other specified The Company and its subsidiaries, collectively The latest practicable date prior to the printing of this Addendum, being 4 October 2011 Listing Manual The listing manual of the SGX-ST, as amended, supplemented or modified from time to time Market Day A day on which the SGX-ST is open for trading in securities

94

EPICENTRE HOLDINGS LIMITED

ANNUAL REPORT 2011

addendum

Notice of AGM

The notice of AGM found in the annual report of the Company for 2011, for the purposes of considering and, if thought fit, passing with or without modifications, the resolutions as set out therein

NTA Securities Account

Net tangible assets of the Group A securities account maintained by a Depositor with CDP but does not include a securities sub-account

SGX Catalist or Catalist

Catalist, a market regulated by the SGX-ST, formerly known as the SGX-ST Dealing and Automated Quotation System

SGX-ST SGXNET Share Buyback

Singapore Exchange Securities Trading Limited The SGXNET Corporate Announcement System The buy back of Shares by the Company in accordance with the terms set out in this Addendum as well as the Companies Act and the Catalist Rules

Share Buyback Mandate

General mandate to be given by the Shareholders to authorise the Directors to effect Share Buyback

Shareholder(s)

Registered holders of Shares in the Register of Members of the Company, except that where the registered holder is CDP, the term Shareholders shall, in relation to such Shares and where the context so admits, mean the Depositors in the Depository Register maintained by the CDP and whose Securities Accounts are credited with those Shares. Any reference to Shares held by or shareholdings of Shareholders shall include Shares standing to the credit of their respective Securities Accounts

Shares Sponsor Substantial Shareholder

Ordinary shares in the capital of the Company and each a Share Asian Corporate Advisors Pte. Ltd. A person who has an interest (directly or indirectly) of five per cent. (5%) or more of the total issued share capital of the Company

Take-over Code

The Singapore Code of Takeovers and Mergers, as amended or modified from time to time

Treasury Share(s)

(a) (b)

A Share which was (or is treated as having been) purchased by the Company in circumstances in which Section 76H of the Act applies; and Has been held by the Company continuously since the treasury share was so purchased.

Unit Share Market

The unit share market of the SGX-ST which allows trading of shares in single shares.

ANNUAL REPORT 2011

EPICENTRE HOLDINGS LIMITED

95

addendum

Currencies, Units and Others S$ and cents or F % or per cent. Singapore dollars and cents, respectively Percentage or per centum

The terms Depositor, Depository Agent and Depository Register shall have the meanings ascribed to them respectively by Section 130A of the Act. The term Direct Account Holder shall have the meaning ascribed to the term account holder in Section 130A of the Act. Words importing the singular shall, where applicable, include the plural and vice versa and words importing the masculine gender shall, where applicable, include the feminine and neuter genders. References to persons shall include corporations. Any reference in this Addendum to any enactment is a reference to that enactment as for the time being amended or reenacted. Any term or word defined under the Securities and Futures Act (Chapter 289) of Singapore or the Companies Act or the Catalist Rules or any statutory or regulatory modification thereof and used in this Addendum shall where applicable have the same meaning ascribed to it under the Securities and Futures Act (Chapter 289) of Singapore, the Companies Act or the Catalist Rules or such statutory modification, as the case may be, unless otherwise provided. All discrepancies in the figures included herein between the listed amounts and totals thereof are due to rounding. Accordingly, figures shown as totals in this Addendum may not be an arithmetic aggregation of the figures that precede them. Any reference to a time of a day in the Addendum is a reference to Singapore time unless otherwise stated and shall include such other date(s) or time(s) as may be announced from time to time by or on behalf of the Company.

96

EPICENTRE HOLDINGS LIMITED

ANNUAL REPORT 2011

addendum

EPICENTRE HOLDINGS LIMITED


(Company Registration No: 200202930G) (Incorporated in the Republic of Singapore)

Directors Mr Jimmy Fong Teck Loon (Executive Chairman and Chief Executive Officer) Ms Brenda Yeo (Executive Director) Mr Siow Chee Keong (Lead Independent Director) Mr Azman Hisham Bin Jaafar (Independent Director) Mr Ron Tan Aik Ti (Independent Director) 11 October 2011 To: The shareholders of Epicentre Holdings Limited

Registered Office 37 Jalan Pemimpin #07-04 Clarus Centre Singapore 577177 Tel No.: +65 6601 9100 Fax No.: +65 6601 9133

Dear Sir or Madam We refer to item 14 of the Notice of AGM for the Company, which is an ordinary resolution to be proposed at the AGM for the renewal of the Companys Share Buyback Mandate (Resolution 14). The purpose of this Addendum is to provide Shareholders with information relating to Resolution 14. 1. 1.1 THE PROPOSED RENEWAL OF THE SHARE BUYBACK MANDATE Background At the October 2010 AGM, Shareholders had approved, inter alia, the adoption of a Share Buyback Mandate to enable the Company to purchase or otherwise acquire Shares. The Share Buyback Mandate which was previously approved on 29 October 2010 will expire on the date of the forthcoming AGM to be held on 28 October 2011. Accordingly, the Directors propose that the Share Buyback Mandate be renewed at the forthcoming AGM. Approval is being sought from Shareholders at the AGM for the adoption of a Share Buyback Mandate for the purchase by the Company of its issued Shares. If approved, the Share Buyback Mandate will take effect from the date of the AGM and continue in force until the date of the next annual general meeting of the Company or such date as the next annual general meeting is required by law to be held, unless prior thereto, Share Buybacks are, carried out to the full extent mandated or the Share Buyback Mandate is revoked or varied by the Company in a general meeting. The Share Buyback Mandate will be put to Shareholders for renewal at each subsequent annual general meeting of the Company.

ANNUAL REPORT 2011

EPICENTRE HOLDINGS LIMITED

97

addendum

1.2

Rationale for the Share Buyback Mandate The rationale for the Company to undertake the purchase or acquisition of its issued Shares is as follows: (a) Directors and management are constantly seeking to increase Shareholders value and to improve, inter alia, the return on equity of the Group. The purchase by a company of its issued shares at the appropriate price level is one of the ways through which the return on equity of the Group may be enhanced; (b) The Share Buyback Mandate will give the Directors the flexibility to purchase or acquire Shares as and when circumstances permit. The Directors believe that the Share Buyback Mandate provides the Company and its Directors with a mechanism to facilitate the use of surplus cash over and above the Companys ordinary working capital requirements, in an expedient and cost-efficient manner; (c) The Share Buyback Mandate would also allow the Directors to exercise greater control over the Companys share capital structure, dividend policy and cash reserves and may lead to an enhancement of EPS and/or NTA per Share of the Company and the Group; (d) The Directors further believe that a Share Buyback by the Company may help mitigate short-term market or price volatility, offset the effects of short-term share speculation or demand and bolster Shareholders confidence; and (e) The Share Buyback Mandate will only be exercised as and when the Directors consider it to be in the best interests of the Company taking into consideration factors such as market conditions and funding arrangements as applicable, and in appropriate circumstances which the Directors believe will not result in any material adverse effect on the liquidity and the orderly trading of the Shares, as well as the working capital requirements and the gearing level of the Group. Shareholders should note that purchases of Shares pursuant to the Share Buyback Mandate may not be carried out to the full limit as authorised.

1.3

Authority and Limits of the Share Buyback Mandate The authority and limitations placed on purchases or acquisitions of Shares by the Company under the Share Buyback Mandate, if renewed at the forthcoming AGM, are the same as previously approved by Shareholders at the October 2010 AGM. The authority and limitations, subject to compliance with the Companies Act and the Catalist Rules as well as such other rules, laws or regulations as may be applicable, are summarised below: 1.3.1 Maximum Number of Shares Only Shares which are issued and fully paid-up may be purchased or acquired by the Company. The total number of Shares that may be purchased or acquired is limited to that number of Shares representing not more than ten per cent. (10%) of the issued ordinary share capital of the Company as at the date of the respective general meetings at which the Share Buyback Mandate is approved or renewed (as the case may be).

98

EPICENTRE HOLDINGS LIMITED

ANNUAL REPORT 2011

addendum

Purely for illustrative purposes, on the basis of 93,501,600 Shares in issue as at the Latest Practicable Date, and assuming that no further Shares are issued on or prior to the AGM, not more than 9,350,160 (representing approximately ten per cent. (10%) of the total number of issued Shares (excluding Treasury Shares) may be purchased or acquired by the Company pursuant to the Share Buyback Mandate. 1.3.2 Duration of Authority Purchases of Shares may be made, at any time and from time to time, on and from the date of approval up to the earliest of the date on which: (a) (b) (c) the next annual general meeting of the Company is held or required by law to be held; Share Buybacks have been carried out to the full extent mandated; or the authority contained in the Share Buyback Mandate is varied or revoked.

1.3.3 Manner of Purchase of Shares Purchases or acquisitions of Shares can be effected by the Company by way of: (a) on-market purchases transacted through the Exchanges Central Limited Order Book Trading System on Catalist through the ready market through one or more duly licensed stock brokers appointed by the Company for the purpose of the Share Buyback (On-Market Purchases); and/or (b) an off-market (if effected otherwise than on Catalist) in accordance with any equal access scheme as defined in Section 76C of the Companies Act, and otherwise in accordance with all other applicable laws and regulations and Catalist Rules (Off-Market Purchase). The Directors may impose such terms and conditions, which are consistent with the Share Buyback Mandate, the Catalist Rules and the Companies Act, as they consider fit in the interests of the Company in connection with or in relation to an equal access scheme or schemes. Under the Companies Act, an equal access scheme must satisfy all the following conditions: (a) offers for the purchase or acquisition of issued Shares shall be made to every person who holds issued Shares to purchase or acquire the same percentage of their issued Shares; (b) all of the abovementioned persons shall be given a reasonable opportunity to accept the offers made; and (c) the terms of all the offers shall be the same, except that there shall be disregarded: (i) differences in consideration attributable to the fact that the offers may relate to Shares with different accrued dividend entitlements;

ANNUAL REPORT 2011

EPICENTRE HOLDINGS LIMITED

99

addendum

(ii)

(if applicable) differences in consideration attributable to the fact that the offers relate to Shares with different amounts remaining unpaid; and

(iii)

differences in the offers introduced solely to ensure that each person is left with a whole number of Shares.

In addition, if the Company wishes to make an Off-Market Purchase in accordance with an equal access scheme, the Company must, as required by the Catalist Rules, issue an offer document to all Shareholders containing at least the following information: (a) (b) (c) (d) the terms and conditions of the offer; the period and procedures for acceptances; the reasons for the proposed Share Buyback; the consequences, if any, of Share Buyback by the Company that will arise under the Take-over Code or other applicable take-over rules; (e) (f) whether the Share Buyback, if made, would have any effect on the listing of the Shares on the Catalist; details of any Share Buyback made by the Company in the previous twelve (12) months (whether OnMarket Purchases or Off-Market Purchases), giving the total number of Shares purchased, the purchase price per Share or the highest and lowest prices paid for the purchases, where relevant, and the total consideration paid for the purchases; and (g) whether the Shares purchased by the Company will be cancelled or held as Treasury Shares.

1.3.4 Maximum Purchase Price The purchase price to be paid for a Share in the event of any Share Buyback shall not exceed the Maximum Price (as defined below), which: (a) in the case of On-Market Purchases, shall mean the price per Share based on not more than five per cent. (5%) above the average of the closing market prices of the Shares over the last five (5) Market Days on the Catalist, on which transactions in the Shares were recorded immediately preceding the day of the market purchase by the Company and deemed to be adjusted for any corporate action occurring after the relevant five (5) day period; and

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addendum

(b)

in the case of Off-Market Purchases, shall mean the price per Share based on not more than twenty per cent. (20%) above the average of the closing market prices of the Shares over the last five (5) Market Days on the Catalist, on which transactions in the Shares were recorded immediately preceding the day on which the Company makes an announcement of an offer under an equal access scheme,

in either case, excluding related expenses of the purchase or acquisition (the Maximum Price). For the above purposes, Average Closing Price means the average of the closing market prices of the Shares over the last five (5) Market Days on which transactions in the Share were recorded on the Catalist immediately preceding the date of the On-Market Purchase by the Company, or as the case may be, the date of the making of the offer pursuant to the Off-Market Purchase, and deemed to be adjusted for any corporate action that occurs after the relevant five (5) day period. date of making of the offer means the date on which the Company announces its intention to make an offer for the purchase or acquisition of Shares from Shareholders, stating therein the relevant terms of the equal access scheme for effecting the Off-Market Purchase. 1.4 Status of Purchased Shares Under Section 76B of the Companies Act, any Shares purchased or acquired by the Company through a Share Buyback shall be deemed to be cancelled immediately on purchase or acquisition (and all rights and privileges attached to the Share will expire on such cancellation) unless held as Treasury Shares in accordance with Section 76H of the Companies Act. Pursuant and subject to the Companies Act, Shares are deemed to be purchased or acquired on the date on which the Company would become entitled to exercise the rights attached to the shares. Some of the provisions on Treasury Shares under the Companies Act are summarised below: (a) The number of shares held as Treasury Shares cannot at any time exceed 10% of the total number of shares issued by a company. The Company shall be entered in its register of members as the member holding those shares. (b) Where shares purchased or acquired by the Company are held as Treasury Shares, the Company may at any time: (i) (ii) (iii) sell the Treasury Shares for cash; transfer the Treasury Shares for the purposes of or pursuant to an employees share scheme; transfer the Treasury Shares as consideration for the acquisition of shares in or assets of another company or assets of a person;

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addendum

(iv) (v)

cancel the Treasury Shares (or any of them); or sell, transfer or otherwise use the Treasury Shares for such other purposes as may be prescribed by the Minister for Finance.

(c)

Where shares purchased or acquired by a company are cancelled, such shares will be automatically de-listed by the SGX-ST. Certificates in respect of such cancelled shares will be cancelled and destroyed by the Company as soon as is reasonably practicable after the shares have been acquired.

(d)

The shares held in treasury shall be treated as having no voting rights and shall not be entitled to any dividend or other distribution (whether in cash or otherwise) of the Companys assets (including any distribution of assets to members on a winding up).

However, the allotment of shares as fully paid bonus shares in respect of treasury shares is allowed. Also, a sub-division or consolidation of any treasury share into Treasury Shares of a smaller or larger amount is allowed so long as the total value of the Treasury Shares after the sub-division or consolidation is the same as before. 1.5 Sources of funds Previously, any purchase of Shares could only be made out of the Companys distributable profits that are available for payment as dividends. However the Companies Act, as amended by the Companies Amendment Act 2005, now permits the Company to also purchase its own Shares out of capital, as well as from its distributable profits, provided that: (a) the Company is able to pay its debts in full at the time it purchases the Shares and will be able to pay its debts as they fall due in the normal course of business in the twelve (12) months immediately following the purchase; and (b) the value of the Companys assets is not less than the value of its liabilities (including contingent liabilities) and will not after the purchase of Shares become less than the value of its liabilities (including contingent liabilities). Further, for the purpose of determining the value of a contingent liability, the Directors or managers of the Company may take into account the following: (a) (b) the likelihood of the contingency occurring; and any claim the Company is entitled to make and can reasonably expect to be met to reduce or extinguish the contingent liability. The Company intends to use its internal resources and/or external borrowings to finance purchases of its Shares pursuant to the proposed Share Buyback Mandate.

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1.6

Financial Effects of the Share Buyback Mandate It is not possible for the Company to realistically calculate or quantify the financial effects on the Company and the Group arising from purchases or acquisitions of Shares that may be made pursuant to the Share Buyback Mandate on the NTA and EPS as the resultant effect would depend on, inter alia, the aggregate number of Shares purchased or acquired, whether the purchase or acquisition is made out of capital or profits, the purchase price paid for such Shares and the amount borrowed (if any) by the Company to fund the purchase or acquisition of the Shares and whether the Shares purchased or acquired are cancelled or held as Treasury Shares. The financial effects on the Company and the Group, based on the audited financial statements of the Company and the Group for the financial year ended 30 June 2011, are based on the assumptions set out below: Share Buyback made out of capital or profits Under the Companies Act, Share Buyback may be made out of the Companys profits and/or capital so long as the Company is solvent. Where the consideration paid by the Company for a Share Buyback is made out of profits, such consideration (excluding related brokerage, goods and services tax, stamp duties and other related expenses) will correspondingly reduce the amount available for the distribution of cash dividends by the Company. Where the consideration paid by the Company for Share Buyback is made out of capital, the amount available for the distribution of cash dividends by the Company will not be reduced. Maximum Price to be Paid for Share Buyback Based on 93,501,600 Shares in issue as at the Latest Practicable Date, the exercise in full of the Share Buyback Mandate will result in the purchase or acquisition of 9,350,160 Shares, representing approximately ten per cent. (10%) of the issued Shares. For illustrative purposes only, in the case of an On-Market Purchase by the Company and assuming that the Company purchases or acquires the 9,350,160 Shares at the Maximum Price of approximately 0.5544 for one Share (being five per cent. (5%) above the average of the closing market prices of the Shares over the last five Market Days on which transactions in the Shares were recorded on the Catalist immediately preceding the Latest Practicable Date), the maximum amount of funds required for the purchase or acquisition of the 9,350,160 Shares is approximately S$5.2 million. For illustrative purposes only, in the case of an Off-Market Purchase by the Company and assuming that the Company purchases or acquires the 9,350,160 Shares at the Maximum Price of approximately 0.6336 for one Share (being the price equivalent to twenty per cent. (20%) above the average of the closing market prices of the Shares over the last five Market Days on which transactions in the Shares were recorded on the Catalist immediately preceding the Latest Practicable Date), the maximum amount of funds required for the purchase or acquisition of the 9,350,160 Shares is approximately S$5.9 million.

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addendum

For illustrative purposes, on the basis of the foregoing assumptions, the financial effects of the purchase or acquisition of such Shares by the Company on the audited accounts of the Company and the Group for the financial year ended 30 June 2011 are set out in the following pages. As at 30 June 2011 ON-MARKET PURCHASES (A) (B) Purchases made entirely out of capital and cancelled Purchases made entirely out of capital and held as Treasury Shares
Group After Share Buyback and cancelled(1) (000) After Share Buyback and held as Treasury Shares(1) (000) Company After Share Buyback and cancelled(1) (000) After Share Buyback and held as Treasury Shares(1) (000)

Before Share Buyback (000) As at 30 June 2011 Total equity NTA


(2)

Before Share Buyback (000)

19,732 19,509 31,341 14,064 17,277


(3)

14,548 14,325 28,749 16,656 12,093 2,827 84,151,440

14,548 14,325 28,749 16,656 12,093 2,827 93,501,600

11,183 10,960 9,696 541 9,155 235 93,501,600

5,999 5,776 7,104 3,133 3,971 2,827 84,151,440

5,999 5,776 7,104 3,133 3,971 2,827 93,501,600

Current assets Current liabilities Working capital Total borrowings Number of Shares(4)

235 93,501,600

Financial ratios NTA per Share (cents) Gearing (%) Current Ratio (times)
Notes: (1) (2) (3) (4) (5) (6) (7) The above is calculated on the assumption that Share Buybacks by the Group are funded by 50% of internal sources of funds and 50% of current borrowings with no interest charge on the borrowings. NTA equals total equity less intangible assets. Total borrowings equal aggregate of short-term loans, long-term loans and finance lease obligations. Based on issued Share capital of 93,501,600 Shares as at 30 June 2011. Gearing equals total borrowings divided by total equity. Current ratio equals current assets divided by current liabilities. All discrepancies in the figures included herein between the listed and total amounts thereof are due to rounding. Accordingly, figures shown as totals in this addendum may not be an arithmetic aggregation of the figures that precede them.
(6) (5)

20.86 1.19 2.23

17.02 19.43 1.73

15.32 19.43 1.73

11.72 2.10 17.92

6.86 47.12 2.27

6.18 47.12 2.27

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addendum

OFF-MARKET PURCHASES (A) (B) Purchases made entirely out of capital and cancelled Purchases made entirely out of capital and held as Treasury Shares
Group After Share Buyback and cancelled(1) (000) After Share Buyback and held as Treasury Shares(1) (000) Company After Share Buyback and cancelled(1) (000) After Share Buyback and held as Treasury Shares(1) (000)

Before Share Buyback (000) As at 30 June 2011 Total equity NTA(2) Current assets Current liabilities Working capital Total borrowings
(3) (4)

Before Share Buyback (000)

19,732 19,509 31,341 14,064 17,277 235 93,501,600

13,808 13,585 28,379 17,026 11,353 3,197 84,151,440

13,808 13,585 28,379 17,026 11,353 3,197 93,501,600

11,183 10,960 9,696 541 9,155 235 93,501,600

5,259 5,036 6,734 3,503 3,231 3,197 84,151,440

5,259 5,036 6,734 3,503 3,231 3,197 93,501,600

Number of Shares

Financial ratios NTA per Share (cents) Gearing (%) Current Ratio(6) (times)
Notes: (1) (2) (3) (4) (5) (6) (7) The above is calculated on the assumption that Share Buybacks by the Group are funded by 50% of internal sources of funds and 50% of current borrowings with no interest charge on the borrowings. NTA equals total equity less intangible assets. Total borrowings equal aggregate of short-term loans, long-term loans and finance lease obligations. Based on issued Share capital of 93,501,600 Shares as at 30 June 2011. Gearing equals total borrowings divided by total equity. Current ratio equals current assets divided by current liabilities. All discrepancies in the figures included herein between the listed and total amounts thereof are due to rounding. Accordingly, figures shown as totals in this addendum may not be an arithmetic aggregation of the figures that precede them.
(5)

20.86 1.19 2.23

16.14 23.15 1.67

14.53 23.15 1.67

11.72 2.11 17.92

5.98 60.79 1.92

5.39 60.79 1.92

ANNUAL REPORT 2011

EPICENTRE HOLDINGS LIMITED

105

addendum

The actual impact will depend on the number and price of the Shares bought back. The Directors do not propose to exercise the Share Buyback Mandate to such an extent that it would have a material adverse effect on the working capital requirements and capital adequacy position of the Company. Share Buyback will only be effected after assessing the relative impact of a Share Buyback taking into consideration both financial factors (such as cash surplus, debt position and working capital requirements) and non-financial factors (such as share market conditions and performance of the Shares). The Directors will be prudent in exercising the Share Buyback Mandate only to such extent which the Directors believe will enhance Shareholders value giving consideration to the prevailing market conditions, the financial position of the Group and other relevant factors. Shareholders should note that the financial effects illustrated above are based on certain assumptions and are purely for illustration purposes only. In particular, it is important to note that the above analysis is based on the audited accounts of the Company and the Group as at 30 June 2011 is not necessarily representative of the future financial performance of the Group or the Company or the Shares. Although the Share Buyback Mandate would authorise the Company to buy back up to ten per cent. (10%) of the Companys issued Shares, the Company may not necessarily buy back or be able to buy back the total number of Shares that may be purchased or acquired in accordance to or as permitted under the Share Buyback Mandate. In addition, the Company may cancel all or part of the Shares repurchased or hold all or part of the Shares repurchased as Treasury Shares. 1.7 Requirements under the Companies Act and Catalist Rules Within thirty (30) days of the passing of a Shareholders resolution to approve the Share Buyback Mandate, the Company shall lodge a copy of such resolution with ACRA. Within thirty (30) days of a Share purchase or acquisition on the Catalist or otherwise, the Company shall lodge with ACRA a notification of the Share purchase or acquisition in the prescribed form. Such notification shall include, inter alia, the date of the purchase, the number of Shares purchased, the number of Shares cancelled and/or the number of Shares held as Treasury Shares, the Companys issued share capital before and after the Share purchase, the amount of consideration paid by the Company for the purchase and whether the Shares were purchased out of the profits or capital of the Company. Under the Catalist Rules, a listed company may purchase shares by way of On-Market Purchases at a price per share which is, inter alia, not more than five per cent. (5%) above the average of the closing market prices of the shares over the last five (5) Market Days, on which transactions in the shares were recorded, preceding the day on which the purchases were made (the average closing market price). The Maximum Price for a Share in relation to On-Market Purchases by the Company conforms to this restriction.

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The Catalist Rules also specify that a listed company shall announce all purchases or acquisitions of its shares via SGXNET not later than 9.00 a.m.: (a) in the case of an On-Market Purchase, on the Market Day following the day of purchase of any of its shares; and (b) in the case of an Off-Market Purchase under an equal access scheme, by 9.00 a.m. on the second Market Day after the close of acceptances of the offer. Such announcement shall be in the form of Appendix 8D of the Catalist Rules which includes, without limitation, details of the total number of shares authorised for purchase, the date of purchase, prices paid for the total number of shares purchased, the purchase price per share, the highest and lowest shares purchased to date and the number of issued shares after purchase. While the Catalist Rules do not expressly prohibit any purchase of shares by a listed company during any particular time(s), because the listed company would be regarded as an insider in relation to any proposed purchase or acquisition of its issued shares, the Company will not undertake any purchase of Shares pursuant to the Share Buyback Mandate at any time after any matter or development of a price-sensitive nature has occurred or has been the subject of consideration and/or a decision of the Board until such price-sensitive information has been publicly announced. In particular, in line with the best practices guide on securities dealings under Rule 1204(18) of the Catalist Rules, the Company will not purchase or acquire any Shares through On-Market Purchases and/or Off-Market Purchases during the period of one month immediately preceding the announcement of the half year or the annual (full-year) results. 1.8 Listing Status The Company is required under Rule 723 of the Catalist Rules to ensure that at least ten per cent. (10%) of its Shares are in the hands of the public at all times. The public, as defined under the Catalist Rules, are persons other than the Directors, chief executive officer, substantial shareholders or controlling shareholders of the Company and its subsidiaries, as well as the associates (as defined in the Catalist Rules) of such persons. As at the Latest Practicable Date, there are 26,830,800 Shares in the hands of the public (as defined above), representing approximately 28.7 per cent. (28.7%) of the issued share capital of the Company. Assuming that the Company purchases its Shares through Market Purchases up to the full ten per cent. (10%) limit pursuant to the Share Buyback Mandate and all such Shares purchased are held by the public, the number of Shares in the hands of the public would be reduced by approximately 9,350,160 Shares, the resultant percentage of the issued Shares held by public Shareholders would be reduced to approximately 20.8 per cent. (20.8%). Accordingly, based on the data available as the Latest Practicable Date as aforesaid, and assuming that there is no change in the individual shareholdings of the respective public and non-public shareholders of the Company, the Company is of the view that there is a sufficient number of the Shares in issue held by public Shareholders which would permit the Company to undertake purchases or acquisitions of its Shares through On-Market Purchases up to the full ten per cent. (10%) limit pursuant to the Share Buyback Mandate without affecting the listing status of the Shares on the Catalist and the number of Shares remaining on the hands of the public will not fall to such a level as to cause market illiquidity.

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addendum

In undertaking any purchases of its Shares through Market Purchases, the Directors will use their best efforts to ensure that a sufficient number of Shares remain in public hands so that the Share Buyback(s) will not: (a) (b) 1.9 adversely affect the listing status of the Shares on the Catalist; or adversely affect the orderly trading of Shares.

Take-over Implications Appendix 2 of the Take-over Code contains the Share Buy-Back Guidance Note applicable as at the Latest Practicable Date. The take-over implications arising from any purchase or acquisition by the Company of its Shares are set out below. (i) Under Appendix 2 of the Take-over Code, an increase of a Shareholders proportionate interest in the voting rights of the Company resulting from a Share Buyback by the Company will be treated as an acquisition for the purpose of Rule 14 of the Take-over Code (Rule 14). Consequently, a Shareholder or group of Shareholders acting in concert with a Director could obtain or consolidate effective control of the Company, and become obligated to make a take-over offer for the Company under Rule 14. (ii) Pursuant to Rule 14, a Shareholder and persons acting in concert with the Shareholder will incur an obligation to make a mandatory take-over offer if, inter alia, he and persons acting in concert with him increase their voting rights in the Company to thirty per cent. (30%) or more or, if they, together holding between thirty per cent. (30%) and fifty per cent. (50%) of the Companys voting rights, increase their voting rights in the Company by more than one per cent. (1%) in any period of six (6) months. (iii) Persons acting in concert comprise individuals or companies who, pursuant to an agreement or understanding (whether formal or informal) co-operate, through the acquisition by any of them of shares in a company to obtain or consolidate effective control of that company. Unless the contrary is established, the following persons will be presumed to be acting in concert, namely (i) a company with any of its Directors; and (ii) a company, its parent, subsidiaries and fellow subsidiaries, and their associated companies, and companies of which such companies are associated companies, all with each other. For this purpose, ownership or control of at least twenty per cent. (20%) but not more than fifty per cent. (50%) of the voting rights of a company will be regarded as the test of associated company status. (iv) The effect of Rule 14 and Appendix 2 of the Take-over Code is that, unless exempted, Directors and persons acting in concert with them will incur an obligation to make a take-over offer under Rule 14 if, as a result of the Company purchasing or acquiring its Shares, the voting rights of such Directors and their concert parties would increase to thirty per cent. (30%) or more, or if the voting rights of such Directors and their concert parties fall between thirty per cent. (30%) and fifty per cent. (50%) of the Companys voting rights, the voting rights of such Directors and their concert parties would increase by more than one per cent. (1%) in any period of six (6) months. In calculating the percentage of voting rights of such Directors and their concert parties, treasury shares shall be excluded.

108

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addendum

Under Appendix 2 of the Take-over Code, a Shareholder not acting in concert with the Directors will not be required to make a take-over offer for the Company under Rule 14 if, as a result of Share Buybacks, the voting rights of such Shareholder would increase to thirty per cent. (30%) or more, or, if such Shareholder holds between thirty per cent. (30%) and fifty per cent. (50%) of the Companys voting rights, the voting rights of such Shareholder would increase by more than one per cent. (1%) in any period of six (6) months. Such Shareholder need not abstain from voting in respect of the resolution authorising the Share Buyback Mandate. Shareholders will be subject to the provisions of Rule 14 if they acquire any Shares after Share Buybacks by the Company. For the purpose of the Take-over Code, an increase in the percentage of voting rights as a result of Share Buybacks will be taken into account in determining whether a Shareholder and persons acting in concert with him have increased their voting rights by more than one per cent. (1%) in any period of six (6) months. (v) If the Company decides to cease the purchase of Shares before it has purchased such number of Shares authorised by its Shareholders at the latest annual general meeting, the Company will promptly inform its Shareholders of such cessation. This will assist Shareholders to determine if they can buy any more Shares without incurring an obligation under Rule 14. Based on the shareholdings of the Directors and Substantial Shareholders of the Company as at the Latest Practicable Date, the Share Buyback Mandate is not expected to result in any Director or Substantial Shareholder incurring an obligation to make a general offer for the Shares of the Company under Rule 14 or Appendix 2 of the Take-over Code. Shareholders who are in doubt as to their obligations, if any, to make a mandatory takeover offer under the Take-over Code as a result of Share Buybacks by the Company are advised to consult their professional advisers and/or the Securities Industry Council and/or other relevant authorities at the earliest opportunity. Purely for illustrative purposes, on the basis of 93,501,600 Shares in issue as at the Latest Practicable Date, and assuming that no further Shares are issued on or prior to the AGM, not more than 9,350,160 Shares (representing ten per cent. (10%) of the Shares in issue as at that date) may be purchased or acquired by the Company pursuant to the Share Buyback Mandate, if so approved by Shareholders at the AGM. Assuming that such granted Share Buyback Mandate is validly and fully exercised prior to the next AGM for it to re-purchase the maximum allowed number of Shares being 9,350,160 Shares (on the basis that there would have been no change to the number of Shares in issue at the time of such exercise) and that such re-purchased Shares are not acquired from Directors and the Substantial Shareholders and are deemed cancelled immediately upon purchase, based on the Register of Directors Shareholdings and Register of Substantial Shareholders of the Company as at the Latest Practicable Date, the shareholdings of the Directors and Substantial Shareholders would be changed as follows:

ANNUAL REPORT 2011

EPICENTRE HOLDINGS LIMITED

109

addendum

Before the Share Buyback Direct interest No. of Shares Directors Directors Jimmy Fong Teck Loon(1) Brenda Yeo(1) Siow Chee Kheong Substantial Shareholders Johnson Goh Ann Ann Rowsley Sports Pte. Ltd. Rowsley Ltd(2) Garville Pte Ltd
(2)

After the Share Buyback Direct interest No. of % Shares % Deemed interest No. of Shares %

Deemed interest No. of Shares

50,369,800 630,000 100,000

53.87 0.67 0.11

630,000 50,369,800

0.67 53.87 0.00

50,369,800 630,000 100,000

59.86 0.75 0.12

630,000 50,369,800

0.75 59.86 0.00

10,710,000 4,861,000

11.45 5.20 0.00 0.00 0.00

4,861,000 4,861,000 4,861,000

0.00 0.00 5.20 5.20 5.20

10,710,000 4,861,000

12.73 5.78 0.00 0.00 0.00

4,861,000 4,861,000 4,861,000

0.00 0.00 5.78 5.78 5.78

Lim Eng Hock(2)


Notes: (1)

Mr Jimmy Fong Teck Loon is deemed to be interested in the 630,000 shares held by his wife, Ms Brenda Yeo and vice versa by virtue of Section 7 of the Companies Act, Cap. 50.

(2)

Rowsley Ltd, Garville Pte Ltd and Lim Eng Hock are deemed to be interested in the 4,861,000 shares held by Rowsley Sports Pte. Ltd. by virtue of Section 7 of the Companies Act, Cap. 50.

1.10

No Shares Purchased or Acquired in the Previous Twelve Months The Company has not made any purchase or acquisition of its Shares (whether via On-Market Purchases or Off-Market Purchases in the 12 months preceding the Latest Practicable Date).

1.11

Taxation Shareholders who are in doubt as to their respective tax positions or any tax implications, or who may be subject to tax in a jurisdiction outside Singapore, should consult their own professional advisers.

2.

DIRECTORS AND SUBSTANTIAL SHAREHOLDERS INTERESTS The interests of the Directors and Substantial Shareholders of the Company as at the Latest Practicable Date, as recorded in the Companys Register of Directors Shareholdings and the Register of Substantial Shareholders respectively, are set out as follows.

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Directors Interests Direct interest No. of Shares Directors Jimmy Fong Teck Loon(1) Brenda Yeo(1) Siow Chee Kheong Substantial Shareholders Interests Direct interest Johnson Goh Ann Ann Rowsley Sports Pte. Ltd. Rowsley Ltd(2) Garville Pte Ltd(2) Lim Eng Hock(2)
Notes: (1) Mr Jimmy Fong Teck Loon is deemed to be interested in the 630,000 shares held by his wife, Ms Brenda Yeo and vice versa by virtue of Section 7 of the Companies Act, Cap. 50. (2) Rowsley Ltd, Garville Pte Ltd and Lim Eng Hock are deemed to be interested in the 4,861,000 shares held by Rowsley Sports Pte. Ltd. by virtue of Section 7 of the Companies Act, Cap. 50.

Deemed interest % 53.87 0.67 0.11 No. of Shares 630,000 50,369,800 % 0.67 53.87 0.00

50,369,800 630,000 100,000

Deemed interest 11.45 5.20 0.00 0.00 0.00 4,861,000 4,861,000 4,861,000 0.00 0.00 5.20 5.20 5.20

10,710,000 4,861,000

3.

ACTIONS TO BE TAKEN BY SHAREHOLDERS Shareholders who are unable to attend the AGM and wish to appoint a proxy to attend and vote on their behalf should sign and return the Proxy Form attached to the Notice of AGM in accordance with the instructions printed thereon as soon as possible and in any event so as to arrive at the registered office of the Company at 37 Jalan Pemimpin #07-04 Clarus Centre, Singapore 577177, not later than forty-eight (48) hours before the time fixed for the AGM. The appointment of a proxy by a Shareholder does not preclude him/her from attending and voting in person at the AGM if he/she subsequently wishes to do so, in place of his/her proxy. CPF investors may wish to check with their CPF Approved Nominees on the procedure and deadline for the submission of their written instructions to their CPF Approved Nominees to vote on their behalf. A Depositor shall not be regarded as a Shareholder entitled to attend the AGM and to speak or vote thereat unless he/she is shown to have Shares entered against his/her name in the Depository Register, as certified by the CDP, as at forty-eight (48) hours before the AGM.

ANNUAL REPORT 2011

EPICENTRE HOLDINGS LIMITED

111

addendum

4.

DIRECTORS RECOMMENDATION The Directors are of the opinion that the renewal of the Share Buyback Mandate is in the best interests of the Company. Accordingly, they recommend that Shareholders vote in favour of the Resolution 14 relating to the renewal of the Share Buyback Mandate at the forthcoming AGM.

5.

DIRECTORS RESPONSIBILITY STATEMENT The Directors collectively and individually accept full responsibility for the accuracy of the information given in this Addendum and confirm after making all reasonable enquiries, that to the best of their knowledge and belief, this Addendum constitutes full and true disclosure of all material facts about the Proposed Renewal of the Share Buyback Mandate, the issuer and its subsidiaries, and the Directors are not aware of any facts the omission of which would make any statement in this Addendum misleading. Where information in the Addendum has been extracted from published or otherwise publicly available sources or obtained from a named source, the sole responsibility of the Directors has been to ensure that such information has been accurately and correctly extracted from those sources and/or reproduced in the Addendum in its proper form and context.

6.

DOCUMENTS FOR INSPECTION Copies of the Companys annual report for FY 2011 and its memorandum and articles of association are available for inspection at the registered office of the Company at 37 Jalan Pemimpin #07-04 Clarus Centre, Singapore 577177 during normal business hours from the date hereof up to and including the date of the forthcoming AGM.

Yours faithfully For and on behalf of the Board of Directors Epicentre Holdings Limited

Jimmy Fong Teck Loon Executive Chairman and Chief Executive Officer

112

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ANNUAL REPORT 2011

notice of annual general meeting

NOTICE IS HEREBY GIVEN that the Annual General Meeting of EPICENTRE HOLDINGS LIMITED (the Company) will be held at 1 Orchid Club Road, Orchid Country Club, Level 1, Golf Clubhouse, Octagon, Singapore 769162 on Friday, 28 October 2011 at 10.00 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 financial year ended 30 June 2011 together with the Auditors Report thereon. (Resolution 1) 2. To declare a tax exempt one-tier final dividend of 2 Singapore cents per share for the financial year ended 30 June 2011 (2010: 2 Singapore cents per share). (Resolution 2) 3. To declare a tax exempt one-tier special one-off dividend of 2 Singapore cents per share for the financial year ended 30 June 2011 (2010: Nil). (Resolution 3) 4. To re-elect the following Directors of the Company retiring pursuant to Article 92 and Article 93 of the Articles of Association of the Company: Mr Azman Hisham Bin Jaafar Ms Brenda Yeo [See Explanatory Note (i)] 5. To approve the payment of Directors Fees of S$261,668 for the financial year ended 30 June 2011 (2010: S$100,000). (Resolution 6) 6. To re-appoint Messrs BDO LLP as the Auditors of the Company and to authorise the Directors of the Company to fix their remuneration. (Resolution 7) 7. To transact any other ordinary business which may properly be transacted at the Annual General Meeting. (Retiring under Article 92) (Retiring under Article 93) (Resolution 4) (Resolution 5)

ANNUAL REPORT 2011

EPICENTRE HOLDINGS LIMITED

113

notice of 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 in the capital of the Company pursuant to Section 161 of the Companies Act, Cap. 50 and Rule 806 of the Listing Manual Section B: Rules of Catalist of the Singapore Exchange Securities Trading Limited That pursuant to Section 161 of the Companies Act, Cap. 50 and Rule 806 of the Listing Manual Section B: Rules of Catalist of the Singapore Exchange Securities Trading Limited (the SGX-ST), the Directors of the Company be authorised and empowered to: (a) (i) (ii) issue shares in the Company (shares) whether by way of rights, bonus or otherwise; and/or 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 Instrument made or granted by the Directors of the Company while this Resolution was in force, (the Share Issue Mandate) 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) and Instruments to be issued pursuant to this Resolution shall not exceed 100% of the total number of issued shares (excluding treasury shares) in the capital of the Company (as calculated in accordance with sub-paragraph (2) below), of which the aggregate number of shares and Instruments to be issued other than on a pro rata basis to existing shareholders of the Company shall not exceed 50% of the total number of issued shares (excluding treasury shares) in the capital of the Company (as calculated in accordance with sub-paragraph (2) below); (2) (subject to such calculation as may be prescribed by the SGX-ST) for the purpose of determining the aggregate number of shares and Instruments that may be issued under sub-paragraph (1) above, the percentage of issued shares and Instruments shall be based on the number of issued shares (excluding treasury 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 the Instruments or any convertible securities;

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ANNUAL REPORT 2011

notice of annual general meeting

(b)

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

(c) (3)

any subsequent bonus issue, consolidation or subdivision of shares;

in exercising the Share Issue Mandate conferred by this Resolution, the Company shall comply with the provisions of the Listing Manual Section B: Rules of Catalist of the SGX-ST for the time being in force (unless such compliance has been waived by the SGX-ST) and the Articles of Association of the Company; and

(4)

unless revoked or varied by the Company in a general meeting, the Share Issue Mandate shall continue in force (i) 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 or (ii) in the case of shares to be issued in pursuance of the Instruments, made or granted pursuant to this Resolution, until the issuance of such shares in accordance with the terms of the Instruments. (Resolution 8)

[See Explanatory Note (ii)] 9. Authority to issue shares under the Epicentre Holdings Limited Performance Share Plan That pursuant to Section 161 of the Companies Act, Cap. 50, the Directors of the Company be authorised and empowered to offer and grant awards under the Epicentre Holdings Limited Performance Share Plan (the Plan) and to issue from time to time such number of shares in the capital of the Company as may be required to be issued pursuant to the vesting of awards under the Plan, whether granted during the subsistence of this authority or otherwise, provided always that the aggregate number of additional ordinary shares to be issued pursuant to the Plan shall not exceed fifteen per centum (15%) of the total number of issued shares (excluding treasury shares) in the capital of the Company from time to time and that such authority shall, unless revoked or varied by the Company in a general meeting, 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. (Resolution 9) [See Explanatory Note (iii)] 10. Authority to issue shares under the Epicentre Holdings Limited Scrip Dividend Scheme That pursuant to Section 161 of the Companies Act, Cap. 50 and Rule 806 of the Listing Manual Section B: Rules of Catalist of the Singapore Exchange Securities Trading Limited, the Directors of the Company be authorised and empowered to issue such number of shares in the Company as may be required to be issued pursuant to the Epicentre Holdings Limited Scrip Dividend Scheme (the Scheme) from time to time in accordance to the Terms and Conditions of the Scheme as set out on pages 81 to 86 of the Circular dated 7 June 2010 and that such authority shall, unless revoked or varied by the Company in a general meeting, 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. (Resolution 10) [See Explanatory Note (iv)]

ANNUAL REPORT 2011

EPICENTRE HOLDINGS LIMITED

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11.

The proposed Participation by an Associate of the Controlling Shareholder under the Epicentre Holdings Limited Performance Share Plan THAT Ms Brenda Yeo, an Associate of the Controlling Shareholder, be authorised to participate in the Epicentre Holdings Limited Performance Share Plan provided always that the Performance Shares to be issued to the Associate of the Controlling Shareholder pursuant to the Plan, shall not exceed 10% of the aggregate number of Performance Shares issued under the Plan in conformity with the limits prescribed therein. (Resolution 11)

12.

The proposed Grant of Award to the Controlling Shareholder under the Epicentre Holdings Limited Performance Share Plan THAT the proposed grant of Award to Mr Jimmy Fong Teck Loon, the Controlling Shareholder, in accordance with the terms under the Epicentre Holdings Limited Performance Share Plan and the following terms, is hereby approved: Proposed date of grant of Award Number of Shares in the proposed grant of Award Date of issue and allotment of Shares : : : 1 November 2011 1,400,000 Shares 31 October 2013 (Resolution 12)

13.

The proposed Grant of Award to an Associate of the Controlling Shareholder under the Epicentre Holdings Limited Performance Share Plan THAT subject to and contingent upon the passing of Resolution 11 above, the proposed grant of Award to Ms Brenda Yeo, an Associate of the Controlling Shareholder, in accordance with the terms under the Epicentre Holdings Limited Performance Share Plan and the following terms, is hereby approved: Proposed date of grant of Award Number of Shares in the proposed grant of Award Date of issue and allotment of Shares : : : 1 November 2011 1,200,000 Shares 31 October 2013 (Resolution 13)

14.

Renewal of Share Buyback Mandate That: (a) for the purposes of the Companies Act Cap. 50 (the Act), the exercise by the Directors of the Company of all the powers of the Company to purchase or otherwise acquire the ordinary shares in the capital of the Company not exceeding in aggregate the Prescribed Limit (as hereafter defined), at such price(s) as may be determined by the Directors of the Company from time to time up to the Maximum Price (as hereafter defined), whether by way of: (i) market purchases (On-Market Purchase), transacted on the Catalist through the Singapore Exchange Securities Trading Limiteds Central Limit Order Book trading system or, as the case may be, any other securities exchange on which the Shares may for the time being be listed and quoted, through one or more duly licensed stockbrokers appointed by the Company for the purpose; and/or

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notice of annual general meeting

(ii)

off-market purchases (each an Off-Market Purchase) effected otherwise than on the Catalist in accordance with any equal access schemes (subject to Section 76C of the Act) as may be determined or formulated by the Directors of the Company as they consider fit, which schemes shall satisfy all the conditions prescribed by the Act, and otherwise in accordance with all other listing rules and regulations of the Singapore Exchange Securities Trading Limited as may for the time being be applicable, be and is hereby authorised and approved generally and unconditionally (the Share Buyback Mandate);

(b)

unless varied or revoked by an ordinary resolution of shareholders of the Company in general meeting, the authority conferred on the Directors of the Company pursuant to the Share Buyback Mandate may be exercised by the Directors at any time and from time to time during the period commencing from the passing of this Resolution and expiring on the earlier of: (i) the date on which the next Annual General Meeting of the Company is held or required by law to be held; or (ii) the date on which the authority contained in the Share Buyback Mandate is varied or revoked by an ordinary resolution of shareholders of the Company in general meeting;

(c)

in this Resolution: Prescribed Limit means ten per centum (10%) of the total number of ordinary shares of the Company as at the date of the last Annual General Meeting or as at the date of passing of this Resolution (whichever is the higher) unless the Company has effected a reduction of the share capital of the Company in accordance with the applicable provisions of the Act, at any time during the Relevant Period, in which event the total number of ordinary shares of the Company shall be taken to be the amount of the total number of ordinary shares of the Company as altered (excluding any treasury shares that may be held by the Company from time to time); Relevant Period means the period commencing from the date on which the last Annual General Meeting was held and required by law to held and expiring on the date the next Annual General Meeting is held or is required by law to be held, whichever is the earlier, after the date of this Resolution; and Maximum Price in relation to a Share to be purchased, means an amount (excluding brokerage, stamp duties, applicable goods and services tax and other related expenses) not exceeding: (i) (ii) in the case of an On-Market Purchase: 105% of the Average Closing Price; and in the case of an Off-Market Purchase: 120% of the Average Closing Price:

ANNUAL REPORT 2011

EPICENTRE HOLDINGS LIMITED

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notice of annual general meeting

where: Average Closing Price means, in the case of a Market Purchase, the average of the closing market prices of the Shares over the last five (5) market days, on which transactions in the Shares on the Catalist were recorded, before the day on which an On-Market purchase was made by the Company or, in the case of an Off-Market Purchase, the date of the announcement of the offer pursuant to an Off-Market Purchase, and deemed to be adjusted in accordance with the Catalist Rules for any corporate action which occurs after the relevant period of five (5) market days; and (d) the Directors of the Company and each of them be and are hereby authorised and empowered to complete and do all such acts and things (including executing such documents as may be required) as they may consider desirable, expedient or necessary in the interest of the Company in connection with or for the purposes of giving full effect to the Share Buyback Mandate. (Resolution 14) [See Explanatory Note (v)] By Order of the Board

Chew Kok Liang Nathaniel C. V. Company Secretaries Singapore 11 October 2011


Explanatory Notes: (i) Mr Azman Hisham Bin Jaffar will, upon re-election as a Director of the Company, remain as Chairman of the Nominating Committee, a member of the Audit Committee and Remuneration Committee respectively and will be considered independent. (ii) the Ordinary Resolution 8 in item 8 above, if passed, will empower the Directors of the Company from the date of this Annual General Meeting until the date 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, 100% of the total number of issued shares (excluding treasury shares) in the capital of the Company, of which up to 50% may be issued other than on a pro rata basis to existing members of the Company. (iii) The Ordinary Resolution 9 in item 9 above, if passed, will empower the Directors of the Company, from the date of this Meeting until 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 in the Company pursuant to the vesting of awards under the Epicentre Holdings Limiteds Performance Share Plan up to a number not exceeding in total (for the entire duration of the Plan) fifteen per centum (15%) of the total number of issued shares (excluding treasury shares) in the capital of the Company from time to time.

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ANNUAL REPORT 2011

notice of annual general meeting

(iv)

The Ordinary Resolution 10 in item 10 above, if passed, will empower the Directors of the Company, from the date of this Meeting until 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 when varied or revoke by the Company in a general meeting, whichever is the earlier, to issue shares in the Company from time to time pursuant to the Epicentre Holdings Limiteds Scrip Dividend Scheme.

(v)

The Ordinary Resolution 14 in item 14 above, if passed, will empower the Directors of the Company from the date of the above Meeting until the next Annual General Meeting of the Company or the date by which the next Annual General Meeting of the Company is required by law to be held, whichever is the earlier, to repurchase ordinary shares of the Company by way of on-market purchases or Off-Market Purchase of up to ten per centum (10%) of the total number of issued shares (excluding treasury shares) in the capital of the Company at the Maximum Price as defined in Addendum.

Notes: 1. A Member entitled to attend and vote at the Annual General Meeting (the Meeting) is entitled to appoint not more than two proxies to attend and vote in his/her stead. A proxy need not be a Member of the Company. 2. If the appointer is a corporation, the instrument appointing a proxy must be executed either under its seal or under the hand of an officer or attorney duly authorised. 3. The instrument appointing a proxy must be deposited at the Registered Office of the Company at 37 Jalan Pemimpin #07-04 Clarus Centre, Singapore 577177 not less than forty-eight (48) hours before the time appointed for holding the Meeting. 4. This notice has been prepared by the Company and its contents have been reviewed by the Companys sponsor (Sponsor), Asian Corporate Advisors Pte. Ltd., for compliance with the relevant rules of the Singapore Exchange Securities Trading Limited (Exchange). The Companys Sponsor has not independently verified the contents of this notice including the correctness of any of the figures used, statements or opinions made. This notice has not been examined or approved by the Exchange and the Exchange assumes no responsibility for the contents of this notice including the correctness of any of the statements or opinions made or reports contained in this notice. The contact person for the Sponsor is Mr Liau H.K. Telephone number: 6221 0271

ANNUAL REPORT 2011 EPICENTRE

HOLDINGS LIMITED

119

notice of book closure date

NOTICE IS HEREBY GIVEN that the Share Transfer Books and Register of Members of the Company will be closed on 9 November 2011 for the purpose of determining the members entitlements to the tax exempt one-tier final dividend and tax exempt one-tier special one-off dividend to be proposed at the Annual General Meeting of the Company to be held on 28 October 2011. Duly completed registrable transfers in respect of the shares of the Company received by the Companys Share Transfer Agent in Singapore, Boardroom Corporate & Advisory Services Pte. Ltd. up to 5.00 p.m. on 8 November 2011 will be registered to determine members entitlements to such dividends. Member whose Securities Accounts with The Central Depository (Pte) Ltd are credited with shares of the Company as at 5.00 p.m. on 8 November 2011 will be entitled to such proposed dividends. Payment of the said dividends, if approved by the members at the Annual General Meeting, will be paid on 23 November 2011.

By Order of the Board

Chew Kok Liang Nathaniel C. V. Company Secretaries Singapore 11 October 2011

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EPICENTRE HOLDINGS LIMITED


(Company Registration No. 200202930G) (Incorporated in the Republic of Singapore)

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

IMPORTANT: 1. For investors who have used their CPF monies to buy Epicentre Holdings Limiteds 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.

I/We, of being a member/members of EPICENTRE HOLDINGS LIMITED (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 at 1 Orchid Club Road, Orchid Country Club, Level 1, Golf Clubhouse, Octagon, Singapore 769162 on Friday, 28 October 2011 at 10.00 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. 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. Resolutions relating to: Directors Report and Audited Accounts for the financial year ended 30 June 2011 Payment of proposed tax exempt one-tier final dividend of 2 Singapore cents per ordinary share for the financial year ended 30 June 2011 Payment of proposed tax exempt one-tier special one-off dividend of 2 Singapore cents per ordinary share for the financial year ended 30 June 2011 Re-election of Mr Azman Hisham Bin Jaafar as a Director Re-election of Ms Brenda Yeo as a Director Approval of Directors Fees amounting to S$261,668 Re-appointment of Messrs BDO LLP as Auditors Authority to issue shares Authority to issue award of shares under the Epicentre Holdings Limited Performance Share Plan Authority to issue shares under the Epicentre Holdings Limited Scrip Dividend Scheme The proposed Participation by an Associate of the Controlling Shareholder under the Epicentre Holdings Limited Performance Share Plan The proposed Grant of Award to the Controlling Shareholder under the Epicentre Holdings Limited Performance Share Plan The proposed Grant of Award to an Associate of the Controlling Shareholder under the Epicentre Holdings Limited Performance Share Plan Renewal of Share Buyback Mandate day of 2011 Total number of Shares in: (a) CDP Register (b) Register of Members Signature of Shareholder(s) or, Common Seal of Corporate Shareholder IMPORTANT: PLEASE READ NOTES OVERLEAF No. of Shares For Against

Dated this

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. 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. Where a member appoints more than one proxy, he/she shall specify the proportion of his/her shareholding to be represented by each proxy. If no such proportion or number is specified 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. 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. The instrument appointing a proxy or proxies must be deposited at the registered office of the Company at 37 Jalan Pemimpin #07-04 Clarus Centre, Singapore 577177 not less than forty-eight (48) hours before the time appointed for the Meeting. The instrument appointing a proxy or proxies must be under the hand of the appointor or of his/her 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. 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.

2.

3.

4.

5.

6.

7.

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/her name in the Depository Register as at forty-eight (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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Epicentre Holdings Limited 37 Jalan Pemimpin #07-04 Clarus Centre Singapore 577177 Telephone: +65 6601 9100 Facsimile: +65 6601 9133 Website: www.epicentreasia.com
Designed and produced by

(65) 6578 6522

EpiCentre Holdings Limited


37 Jalan Permimpin, Clarus Centre Block A, #08-02B, Singapore 577177 Tel: +65 6100 9100 Fax: +65 6101 9111

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