Epicentre Holdings Limited

INNOVATING FOR TOMORROW
ANNUAL REPOR T 2012
Be a World Class Digital Lifestyle Brand in Asia.
We are committed to enrich the customers digital lifestyle with World Class Experience, Innovative Value and Awesomely Great (EPIC) Hospitality.
ANNUAL REPORT 2012
EPICENTRE HOLDINGS LIMITED
02
our values
03
corporate prole
04
chairman statement
06
operations review
08
nancial highlights
09
awards and achievements
10
board of directors
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ten reasons to buy from Epicentre
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store listing
17
corporate information
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group structure
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product showcase
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corporate governance report
43
nancial statements
108
statistics of shareholdings
110
addendum
130
notice of annual general meeting proxy form
This Annual Report has been reviewed by the Companys Sponsor, RHT Capital Pte. Ltd., for compliance with the relevant rules of the Singapore Exchange Securities Trading Limited (SGX-ST). The Companys Sponsor has not independently veried the contents of this Annual Report. This Annual Report has not been examined or approved by the SGX-ST and the SGX-ST 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 Annual Report. The details of the contact person for the Sponsor are: Name: Mr. Lawrence Wong Chee Meng Address: Six Battery Road #10-01, Singapore 049909 Tel: +65 6381 6757
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LEARNING
We, as a TEAM continuously, to improve our competency for greater fulfilment
ETHICS
We consistently act with integrity and fairness
OWNERSHIP
Our Values
We act pridefully with accountability

and speed
VIBRANCY
We enthusiastically work towards innovative solution
ANNUAL REPORT 2012
corporate prole
Epicentre Holdings Limited (Epicentre or the Group) is one of the fastest-growing and most prominent digital lifestyle companies in Singapore. Established in 2002 as the first Apple Premium Reseller (APR) in the region, Epicentre is not only the longest-serving, but also one of the mostawarded APR in Asia. Epicentre has redefined the shopping experience for Apple consumers by offering a comprehensive range of Apple and Apple-related products as well as pre and post-sale services in a one-stop lifestyle digital hub. The Group is emphatic on locating its stores within prime districts that experience heavy footfall and this is a key consideration to the Groups expansion both locally and regionally. Today, the Group operates 8 Epicentre stores in Singapore, 6 in Malaysia (Kuala Lumpur) and 3 in China (Shanghai and Beijing); with plans to further extend its footprint within these cities. Apart from retailing Apple and Apple-related products in Epicentre stores, the Group also offers an extensive range of accessories in EpiLife concept stores-where Fashion meets IT. EpiLife is a lifestyle chain that completes the shopping experience of fashion-forward consumers. EpiLife also carries merchandise under iWorld, the Groups proprietary brand of accessories targeted at the young and trendy. To date, the Group has launched 2 EpiLife stores in Singapore. In line with the Groups penchant for innovation, it has spearheaded one of Southeast Asias pioneering m-commerce platforms. Coined EpiLife On-The-Go, this unique shopping experience drives sales through the clever placements of Quick Response (QR) codes on both traditional and non-traditional promotional mediums. By offering diverse products ranging from IT to beauty, F&B and fashion amongst other lifestyle-oriented merchandise, EpiLife-On-The Go is primed to engage consumers in a new and refreshing way. Over the years, the Group has achieved multiple awards and accolades for its sterling performance. Winner of the Singapore Prestigious Brand Award (SPBA) Promising Brand for three consecutive years since 2009, Epicentre claimed the Overall Winner title in 2010 and was inducted into the SPBA Hall of Fame in 2011. As a testament to the Groups commitment towards high service standards, Epicentre won the Singapore Retailers Association (SRA) Premium Service GEM Award in 2010 and 2011. Since 2003, the Group has also bagged numerous accolades for its accomplishments as a partner of Apple. These include the honour of winning the Platinum Partner Award during the South Asia Conference 2010 and achieving Apple Best POS Asia from 2006 to 2008. Epicentre was listed on the Catalist Board of the Singapore Exchange Securities Trading Limited on 18 January 2008.
ANNUAL REPORT 2012
chairman statement
Dear Shareholders
Financial year ended 30 June 2012 (FY 2012) was an active year for Epicentre as we focused on putting in place the building blocks for new growth amidst slowing retail spending from the volatile economy. The Group delivered record revenue of S$183.9 million, up 13.1% year-on-year (y-o-y) for FY 2012. We sought to expand our reach through the launch of 8 new retail stores, boosting our presence to 18 outlets across 3 countries. Leveraging on our innovative spirit to drive future sustainable growth, we introduced several new sales platforms such as EpiLife concept store, EpiLife On-The-Go mobile commerce (m-commerce) platform and phase 2 of Epicentre iPhone Application, to cater to the convenience of our busy customers. We also embarked on brand-building and customer excellence projects during the year to strengthen our corporate identity and brand equity. As these initiatives are in their gestation period, we had to endure some short-term impact on our financial performance. Consequently, the Group recorded a net profit attributable to owners of the parent of S$1.0 million for FY 2012, down 79.4% y-o-y. To thank shareholders for their continued support, the Board declared a final dividend of 0.6 cents per share for FY 2012. Ann City opened in December 2011 and the second, at 313@ Somerset in March 2012. In April 2012, we made a quantum leap by teaming up with International Enterprise (IE) Singapore via its Global Company Partnership (GCP) to strategically build our capability across markets and gain access to financial assistance. Through this programme, we collaborated with CellCity and DBS Bank to offer virtual stores with EpiLife On-The-Go; moving beyond the conventional brick-and-mortar retail model into the mobile commerce (m-commerce) platform. By scanning the Quick Response (QR) codes placed on everyday mediums like catalogues, flyers, billboards and advertising walls in public spaces like MRT and movie theatre screens, customers are able to make EpiLife purchases at their convenience and opt to collect their merchandises at designated stores or have it delivered. Traditional media spaces can now be transformed into business channels, diversifying our income stream, while providing our customers the flexibility they desire. With m-commerce, we bring the shop right to the consumer, allowing us to win their hearts and minds. More importantly, this new initiative opens up a new business channel, allowing us to generate sales without the hefty overheads associated with a physical store. We also forged partnerships with five polytechnics in Singapore, namely Singapore Polytechnic, Nanyang Polytechnic, Ngee Ann Polytechnic, Temasek Polytechnic and Republic Polytechnic during the year to collaborate on m-commerce related entrepreneurship initiatives. Through these partnerships, we are able to gather feedback to fine-tune and improve on our existing m-commerce platform. It also serves as a good avenue for us to understand our consumer profile and latest trends. While committed to developing new sales platforms to build our long term competitive advantage, we have been actively looking at ways to differentiate and enhance our brand equity and service. During the year, we embarked on various projects such as Customer Relationship Management and Customer Centric Initiatives with the aim of providing exceptional customer experience to turn customers into our advocates. Using these tools, we are able to identify and anticipate customers needs, at the same time, provide personalised service to make our customers feel appreciated. We also launched BrandPact-Epicentre & EpiLife to improve our branding by boosting our desirability and exclusivity in the customers mind space.
Delivering Innovative Solutions

Our constant drive to introduce enterprising initiatives is a clear reflection of our strong entrepreneurial spirit. At Epicentre, we challenge ourselves to look at existing practices and processes with a fresh perspective and do not shy away from taking the untried and untested route. Innovation is very much ingrained in the make-up of Epicentre. We launched phase 2 of Epicentre iPhone application and introduced EpiLife, the first-of-its-kind concept store that portrays IT products as lifestyle and fashion covetable in January 2012. Sourcing the world for unique designs, we offer an extensive range of accessories from established brands such as Ice Watch, Paul Frank, MRKT, UNIE FRENCHIE and Nakamichi. The new spin off from Epicentre aims to cater to the growing demand for individualist designs that bridges the gap between technology and lifestyle. On top of that, through our in-depth understanding of customers preferences, we create our very own unique fashion-statement pieces under the proprietary brand, iWorld. To date, we have launched 2 EpiLife stores in Singapore, with the maiden store at Ngee
ANNUAL REPORT 2012
Our competitive edge is clear: At Epicentre, we offer a comprehensive range of Apple products and unique digital lifestyle fashion accompanied with impeccable customer experience and comprehensive pre-and post-sale services, at your convenience.
Investing in Tomorrow
Moving forward, the economic outlook looks set to remain challenging with ongoing weakness in the western economies and softening of the Chinese economy. In line with Epicentres determination to grow long term shareholder value, we will continue to invest in our future by consciously balancing between increasing the distribution network and managing costs while supporting our new sales platform. We see more opportunities in Malaysia, where consumer sentiments remained robust. Given the strong revenue boost from Malaysia, surging 42.8% y-o-y to S$33.5 million for FY 2012, we will continue to commit resources to boost our market share through the launch of new stores. Our largest revenue contributor, Singapore, accounted for 80.5% of FY 2012 revenue or S$148.0 million. As our key market, the Group will continue to support initiatives to diversify revenue stream such as EpiLife and EpiLife On-The-Go. With our first mover advantage in capturing the younger, more fashion-conscious customers, who regularly use the internet or participate in social media, we are confident that these strategic investments will provide good returns gradually.
Corporate Social Responsibility

While working towards generating long term returns for our shareholders, we are keenly aware of the need to play our part as a responsible corporate citizen. On 20 November 2011, we collaborated with the Singapore Children Cancer Foundation to organise a charity run for our network of corporate clients, business associates, employees, friends, families, and shareholders. The funds raised by the participants amounted to a total of S$14,320.
In Appreciation
I would like to express my deepest appreciation to our shareholders, partners and customers for your continuous support. I would like to acknowledge too, the invaluable insights and guidance of our Board. To our staff, thank you for your dedication and passion. Together, we will work hand-in-hand to build the Best Digital Lifestyle Brand in Asia.
Jimmy Fong Teck Loon Executive Chairman & Chief Executive Officer
ANNUAL REPORT 2012
operations review
The Group delivered record revenue of S$183.9 million, up 13.1% year-on-year (y-o-y) for financial year ended 30 June 2012 (FY 2012).
Revenue breakdown by Geographical Segment
Revenue from Singapore increased 6.4% y-o-y to S$148.0 million, accounting for 80.5% of the Groups revenue for FY 2012. The increase was due to the full year operation of 2 additional stores and the strong demand for Apple products. Further boosted by strong consumer sentiments in Malaysia, revenue from Malaysia surged 42.8% y-o-y to S$33.5 million, contributing 18.2% to the Groups revenue for FY 2012. Meanwhile, the Group received maiden revenue contribution of S$2.4 million from PRC, with the launch of 2 new stores in Shanghai and 1 in Beijing in FY 2012. ($000) 160,000 140,000 120,000 100,000 80,000 60,000 40,000 20,000 0 Singapore Malaysia
33,515 23,476 2,354 FY 2011 FY 2012 148,019 139,127
China
needed for it to take off. Consequently, the Group recorded a net profit attributable to owners of the parent of S$1.0 million for FY 2012, down 79.4% y-o-y. Earnings per share of the Group declined to 1.05 cents per share for FY2012 from 5.10 cents per share in the corresponding period last year. Inventories increased S$4.0 million to S$14.1 million as at 30 June 2012 with the launch of 8 new stores in FY 2012. As at 30 June 2012, the Group was in a net cash position of S$12.9 million.
Revenue breakdown by Products

Apple products continued to be the key driver, contributing S$157.8 million or 85.8% to the Groups revenue for FY 2012. The Groups efforts to increase sales in higher margin third party brand complementary products was reflected in the 9.3% y-o-y increase in revenue to S$26.1 million for FY 2012. Gross profit declined 2.5% y-o-y to S$23.6 million for FY 2012 mainly attributable to the volatility in USD/SGD, affecting the margins of Apple products. However, with effect from 30 September 2012, the purchase of Apple products for the Singapore operations will be denominated in SGD, thereby eliminating majority of the Groups foreign exchange risk. Total operating expenses increased 23.7% y-o-y to S$24.5 million for FY 2012, mainly due to higher administrative, advertising and promotional expenses incurred with the opening of the 8 outlets in FY 2012. Other initiatives rolled out during the financial year such as the launch of new enterprising sales platforms, Customer Centric Initiatives and Brandpact projects, also contributed to the rise in administrative expenses. As the new initiatives launched during the year are in their gestation period, the Group had to bear the initial costs
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operations review
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nancial highlights
Revenue (S$M)
FY 2012 FY 2011 FY 2010 FY 2009 65.0 88.1 162.6 183.9
Net Prot Attributable to Owners of the Parent (S$M)

FY 2012 FY 2011 FY 2010 FY 2009 1.8 3.4 1.0 4.8
Gross Prot (S$M)

FY 2012 FY 2011 FY 2010 FY 2009 10.9 14.3 23.6 24.2
Prot Before Tax (S$M)

FY 2012 FY 2011 FY 2010 FY 2009 2.1 4.1 0.9 5.7
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awards and achievements

1 Singapore Prestige Brand Award 2011 Hall of Fame 2011 Promising Brand Winner 2 The Entrepreneur of the Year 2011 A Rotary ASME Award Overall Winner 3 The Entrepreneur of the Year 2011 A Rotary ASME Award Winner of EYA for Info-Communications Technology 4 Asia Pacic Entrepreneurship Awards 2011 Outstanding Entrepreneurship Award Singapore Retailers Association (SRA) 2011 Premium Service GEM Award Singapore Prestige Brand Award 2010 Overall Winner, Promising Brand Apple South Asia Conference 2010 Platinum Partner Award Singapore Retailers Association (SRA) 2010 Premium Service GEM Award Singapore Prestige Brand Award 2009 Promising Brand Winner Apple Top 3 Merchandising Award 2009 Apple Top APR POS Asia 2008 Apple Top POS Asia 2007 Apple Best POS Asia 2006 Best Apple Centre 2003 Gold Singapore 2003
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board of directors
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
Jimmy Fong Teck Loon Executive Chairman & Chief Executive Officer
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 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.
Brenda Yeo Executive Director Ms Yeo is our Executive Director and was appointed to our Board on 21 February 2007. She was re-elected as a Director on 30 October 2008. She oversees the management of the Group. In 2005, she 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.
Mr Fong is our Executive Chairman and Chief Executive Officer and the founder of the Group. He began his career in 1991 and in OverseaChinese Banking Corporation as an IT systems auditor before moving on to hold various senior positions in bluechip 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
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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 sits 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 and Sunvic Chemicals 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 intellectual propertys licensing, merchandising, retail and distribution markets, he is currently the International Director at First Alverstone Singapore, Partners Malaysia, and other international companies based in Australia, Austria, Germany and USA including EMS Holdings and Hi-5 Operations. 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 RHTLaw Taylor Wessing 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 received a Long Service Award. He obtained LL.B (Hons) from the National University of Singapore.
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10 reasons to buy from

Best Apple Deals Attractive Apple offers under one roof
Qualied and Certied Mac Evangelists Serviced by trained Mac Lovers for Mac Lovers
Great Locations Conveniently located at prime districts
Epitude Membership Exclusive membership privileges at and beyond Epicentre
EpiAcademy Established complimentary learning hub for Apple Products
iConcierge Services First-of-its-kind counter service that provides technical advice and support
7-Day Extended Exchange Period Unparalleled service with extended exchange period
EpiGuard Exclusive insurance policy available for our valued customers
Trade-in Services Only place that offers cash for old computers, laptops, iPads or iPods
One Stop Service Centre Epicentre@313@Somerset and Wheelock Place are located close to eServ, Apple troubleshoot service provider
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store listing singapore
Epicentre @ Wheelock Place 501 Orchard Road Wheelock Place #02-20/23 Singapore 238880 Tel: +65 6238 6780
Epicentre @ Suntec City Mall 3 Temasek Boulevard Suntec City #02-179 Singapore 038983 Tel: +65 6337 8246
Epicentre @ Bugis Junction 200 Victoria Street Bugis Junction #01-56/57 Singapore 188021 Tel: +65 6338 4892
Epicentre @ ION Orchard 2 Orchard Turn ION Orchard #B3-14 Singapore 238801 Tel: +65 6509 8190
Epicentre @ 313@Somerset 313 Orchard Road 313@Somerset #01-19/20 Singapore 238895 Tel: +65 6509 6681
Epicentre @ Marina Bay Sands 2 Bayfront Avenue The Shoppes at Marina Bay Sands B2-100A Singapore 018972 Tel: +65 6688 7070
Epicentre @ Scotts Square 6 Scotts Road Scotts Square #B1-23/24 Singapore 228209 Tel: +65 6636 2330
Epicentre @ Takashimaya S.C. 391 Orchard Road Takashimaya S.C. Ngee Ann City #B2-32 Singapore 238872 Tel: +65 6238 9378
EpiLife @ Takashimaya S.C. 391 Orchard Road Takashimaya S.C. Ngee Ann City #B2-32 Singapore 238872 Tel: +65 6733 4850
EpiLife @ 313@Somerset 313 Orchard Road 313@Somerset #B3-21 Singapore 238895 Tel: +65 6235 5997
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store listing malaysia
Epicentre @ Pavilion Lot 5.24.07 Level 5 Pavilion Kuala Lumpur 168 Jalan Bukit Bintang 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 8313 0300
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
Epicentre @ Fahrenheit88 Lot G-23, Ground Floor, Farenheit88 179 Jalan Bukit Bintang 55100 Kuala Lumpur Tel: +603 2143 8001
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
Epicentre @ Bangsar Village II UGF-21, Floor Level Upper Ground Floor Bangsar Village II No. 2 Jalan Telawi Satu Bangsar Baru 59100 Kuala Lumpur Tel: +603 2287 8970
store listing china

Epicentre @ Yu Fashion Garden (Shanghai) L126/L127 Yu Fashion Garden 168 Fang Bang Zhong Road Huang Pu District, Shanghai Tel: +86 21 3376 7500
Epicentre @ Crystal Mall (Beijing) L111/L112 Crystal Mall 51 Fu Xing Road Hai Dian District, Beijing Tel: +86 10 6826 0361
Epicentre @ Plaza 96 (Shanghai) L139/140 Plaza 96 796 Dong Fang Road Pu Dong District, Shanghai Tel: +86 21 6106 0076
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corporate information
FULL NAME OF COMPANY Epicentre Holdings Limited
COMPANY REGISTRATION NUMBER 200202930G
REGISTERED OFFICE 37 Jalan Pemimpin #07-04 Clarus Centre Singapore 577177 Telephone: +65 6601 9100 Facsimile: +65 6601 9133
WEBSITE www.epicentreasia.com
COMPANY SECRETARIES Yun Chee Keen Chew Kok Liang
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
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)
NOMINATING COMMITTEE Azman Hisham Bin Jaafar (Chairman) Jimmy Fong Teck Loon Ron Tan Aik Ti Siow Chee Keong
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
REMUNERATION COMMITTEE Ron Tan Aik Ti (Chairman) Siow Chee Keong Azman Hisham Bin Jaafar
PRINCIPAL BANKERS Oversea-Chinese Banking Corporation Limited Australia and New Zealand Banking Group Limited Citibank N.A. Singapore Branch Standard Chartered Bank The Hongkong and Shanghai Banking Corporation Limited
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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. 87%
group of companies
SINGAPORE Epicentre Holdings Limited 37 Jalan Pemimpin #07-04, Clarus Centre Singapore 577177 Tel: +65 6601 9100 Fax: +65 6601 9133 Epi Lifestyle Pte. Ltd. Epicentre Pte. Ltd. 37 Jalan Pemimpin #07-04, Clarus Centre Singapore 577177 Tel: +65 6601 9100 Fax: +65 6601 9133 37 Jalan Pemimpin #07-04, Clarus Centre Singapore 577177 Tel: +65 6601 9100 Fax: +65 6601 9133 CHINA Epicentre (Shanghai) Co., Ltd. No 710 Dong Fang Road Unit 1404 200122 Shanghai, P.R.China Tel: +86 21 6044 2776 Fax: +86 21 5830 2203 Epicentre Solutions Pte. Ltd. 37 Jalan Pemimpin #07-04, Clarus Centre Singapore 577177 Tel: +65 6601 9100 Fax: +65 6601 9133 MALAYSIA Epicentre Lifestyle Sdn. Bhd. 34 Jalan Sultan Ismail Unit 1706 Central Plaza Suite 50250 Kuala Lumpur, Malaysia Tel: +603 2141 1787 Fax: +603 2141 3787
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product showcase
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product showcase
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product showcase
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product showcase
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product showcase
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product showcase
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product showcase
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The Board of Directors (the Board) of Epicentre Holdings Limited (the Company) together with its subsidiaries (the Group) 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). Unless otherwise stated, these practices were in place throughout the financial year. 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. The key roles 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, Directors 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); and Approve annual budgets, major funding proposals, investment and divestment proposals.
Board Committees Our Directors recognise the importance of good corporate governance and in offering high standards of accountability to our shareholders. In order to provide an independent oversight and to discharge its responsibilities more efficiently, the Board has delegated certain functions to various Board Committees. The Board Committees consist of Audit Committee (AC), Nominating Committee (NC) and Remuneration Committee (RC).
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These Board Committees function within clearly defined terms of reference and operating procedures and are reviewed on a regular basis to ensure their continued relevance. The Chairman of the respective Committee will report to the Board on the outcome of the Committee meetings and their recommendations on the specific agendas mandated to the Committee by the Board. The effectiveness of each Committee is also constantly reviewed by the Board. Matters which specifically require Boards approval are those involving material acquisitions and disposals of assets, corporate or financial restructuring, dividends, share issuances and other shareholder matters. 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. The number of meetings held by the Board and Board Committees and attendance of Directors at the meetings for the financial year ended 30 June 2012 is set out as follows:
Audit Board Number of meetings held Name of Director Jimmy Fong Teck Loon Brenda Yeo Siow Chee Keong Ron Tan Aik Ti Azman Hisham Bin Jaafar
* By invitation
Remuneration Committee 1
Nominating Committee 1
Committee 2
Number of meetings attended 3 3 3 3 3 2* 2* 2 2 2 1* 1* 1 1 1 1 1* 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. 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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Board Composition and Guidance Principle 2: There should be a strong and independent element on the Board, which is able to exercise objective judgment on corporate affairs independently, in particular, from Management. No individual or small group of individuals should be allowed to dominate the Boards decision making. The Board comprises three Independent Directors and two Executive Directors. The list of the Directors is 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 Hisman Bin Jaafar Lead Independent Director Independent Director Independent Director Executive Chairman and Chief Executive Officer Executive Director
The Boards structure, size and composition are reviewed on an annual basis by the NC to ensure that the Board has the appropriate size and with the right mix of skills and diverse expertise and experience given the nature and scope of the Groups operations 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 43 to 45 of the Annual Report. Non-Executive Directors meet regularly without the presence of the Management. Non-Executive Directors are encouraged to constructively challenge and help to develop the management reporting framework and review management performance.
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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 the 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 ensures the quality, quantity, accuracy and the timelines of information flow between the Board, the Management and shareholders of the Company and also encourages the constructive relationship within the Board between the Executive and Non-Executive Directors and between the Board and the Management. The Company has also appointed Mr Siow Chee Keong as Lead Independent Director of the Company pursuant to the recommendation in Guideline 3.3 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 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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The NC functions under its terms of reference which sets out its responsibilities as follows: Recommend to the Board on all new Board appointments, re-appointments and re-nominations; Ensure that Independent Directors meet the Codes guidelines and criteria; Assess the effectiveness of the Board as a whole; and Ensure that the Directors with multiple board representation commit adequately in carrying out his/her duties.
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) of the Company. 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 of the Company following their appointments. The dates of initial appointment and last re-election of each Director are set out below:
Date of first Position held on Name of Director Mr Jimmy Fong Teck Loon Ms Brenda Yeo Mr Siow Chee Keong Mr Ron Tan Aik Ti Mr Azman Hisham Bin Jaafar the Board Chairman Director Director Director Director appointment to the Board 9 April 2002 21 February 2007 10 December 2007 3 August 2010 3 November 2010
Date of last re-election as Director 29 October 2010 28 October 2011 30 October 2009 29 October 2010 28 October 2011
The NC is of the view that despite multiple board representations in certain instances, each Director is able to allocate sufficient time and attention to the affairs of the Company and has been adequately discharging his/her duties as a Director of the Company.
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The Board has accepted the NCs nomination of the retiring Directors who have given their consent for re-election at the forthcoming AGM of the Company. The retiring Directors are Mr Siow Chee Keong and Mr Ron Tan Aik Ti who will retire pursuant to Article 93 of the Articles of Association of the Company. The NC has assessed the independence of the Non-Executive Directors, Mr Siow Chee Keong, Mr Ron Tan Aik Ti and Mr Azman Hisham Bin Jaafar, and is satisfied that there are no relationships which would deem them not to be independent. 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 a formal process for assessment of the effectiveness of the Board as a whole. The NC undertakes a process to assess the effectiveness of the Board as a whole for the financial year ended 30 June 2012. The appraisal parameters focused on evaluation of factors such as the size and composition of the Board, the Boards access to information, Boards processes and accountability, Boards performance in relation to discharging its principal responsibilities, communication with the Management and the standards of conduct of the Directors. The performance measurements ensure that the mix of skills and experience of the Directors continue to meet the needs of the Group. Through the evaluation process and the intensity of participation by the Directors 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 and the results of the assessment has been communicated to and accepted by the Board. The NC 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. However, the NC 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.
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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 the Management 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 assist the Board to 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 entirely Independent Directors and the members of the RC are: Mr Ron Tan Aik Ti Mr Siow Chee Keong Mr Azman Hisham Bin Jaafar Chairman Member Member
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The RC functions under its terms of reference which sets out its responsibilities as follows: 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 packages for each Executive Director; and Review the appropriateness of remuneration package awarded to Non-Executive Directors.
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. All aspects of remuneration, including but not limited to Directors fees, salaries, allowances, bonuses and benefits in kind, are covered by the RC. 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 the need arises. The expense of such services is borne by the Company. No individual Director shall be involved in deciding his/her own remuneration. Each member of the RC shall abstain from making any recommendation on or voting on any resolutions in respect of his own remuneration package. 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 of the Company.
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The service agreement of the Executive Chairman and CEO covered 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 six months notice in writing. The Company has an existing performance share plan known as Epicentre Holdings Limited Performance 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. A breakdown of the remuneration of the Directors of the Company, in percentage terms showing the level and mix, for the financial year ended 30 June 2012 falling within the broad bands are set out below: Fixed Salary Directors Fees Performance Related Income/Bonus
Remuneration Band S$1,000,000 to S$1,249,999 Jimmy Fong Teck Loon S$750,000 to $999,999 Nil S$500,000 to S$749,999 Nil S$250,000 to S$499,999 Brenda Yeo Below S$250,000 Siow Chee Keong Ron Tan Aik Ti Azman Hisham Bin Jaafar
Total
95
100%
91
100%
100% 100% 100%
100% 100% 100%
The Code requires the disclosures 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.
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The range of the gross remuneration of the top five key executives of the Group (who are not Directors) for the financial year ended 30 June 2012 are set out below:
Number of Key Executives Remuneration Band S$250,000 to S$499,999 Below S$250,000 2012 1 4 2011 5
Ms Brenda Yeo, an Executive Director of the Company, is the spouse of Mr Jimmy Fong Teck Loon, the Executive Chairman and the CEO of the Company as well as the substantial shareholder of the Company. Save as disclosed, there is no employee of the Group who is an immediate family member of any Director or the CEO or a controlling shareholder and whose remuneration has exceeded S$150,000 during the financial year ended 30 June 2012. 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 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, the 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 for their effective monitoring and decision-making.
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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 entirely Independent Directors and the members of the AC are: Mr Siow Chee Keong Mr Ron Tan Aik Ti Mr Azman Hisham Bin Jaafar Chairman Member Member
The AC meets 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 its 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.
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The AC has full access to and cooperation of the Management, internal and external auditors. It also has full discretion to invite any Director or executive officer to attend its meetings and has been given adequate resources to enable it to discharge its functions properly. The AC meets with the external and internal auditors, separately without the presence of Management, at least once a year. The AC reviews the findings from the auditors and the assistance given to the auditors by the Management. The AC, having reviewed the range and value of non-audit services rendered by the external auditors, Messrs BDO LLP, which comprise tax advisory services and is satisfied that the nature and extent of such services will not prejudice the independence and objectivity of the external auditors. The audit and non-audit fees paid/payable to the external auditors for the financial year ended 30 June 2012 were $74,000 and $15,000 respectively. The Company has complied with Rule 715 of the Listing Manual Section B: Rules of Catalist of the SGX-ST as all subsidiaries of the Company are audited by Messrs BDO LLP for the purposes of the consolidated financial statements of the Group. The AC will undertake a review of the scope of services provided by the external auditors, the independence and the objectivity of the external auditors on annual basis. Messrs BDO LLP, the external auditors of the Company, has confirmed that they are a Public Accounting Firm registered with Accounting and Corporate Regulatory Authority and provide a confirmation of their independence to the AC. The AC had assessed the external auditors based on factors such as performance, adequacy of resources and experience of their audit engagement partner and auditing team assigned to the Groups audit the size and complexity of the Group. Accordingly, the AC is satisfied that Rule 712 of the Listing Manual Section B: Rules of Catalist of the SGX-ST is complied with and has recommended the Board that Messrs BDO LLP be nominated for re-appointment as external auditors at the forthcoming AGM of the Company. The Companys internal auditors, during their course of audit, will evaluate the effectiveness of the Companys internal controls and report to the AC, together with their recommendations, any material weakness and non-compliance of the internal controls. The AC has reviewed the internal audit reports and based on the controls in place, is satisfied that there are adequate internal controls in the Group. 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 the whistle blowing framework, endorsed by the AC, which provides the mechanisms to encourage and provide a channel 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.
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Internal Controls Principle 12: The Board should ensure that the 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 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. 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 internal auditors 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 internal auditors in this respect. Relying on the reports from the internal auditors and the management letter points provided by external auditors, the AC carried out assessment of the effectiveness of key internal controls during the year. Any material non-compliance or weaknesses in internal controls or recommendations from the internal and external auditors to further improve the internal controls were reported to the AC. The AC will also follow up on the actions taken by the Management on the recommendations made by the internal auditors. Based on the various management controls in place, the reports from the internal auditors and the management letter points provided by external auditors, reviews conducted by the Management, the Board with the concurrence of the AC, is of the opinion that the system of internal controls addressing financial, operational and compliance risks maintained by the Group during the year are adequate in meeting the needs of the Groups business operations and provide reasonable assurance against material financial misstatements or material loss and to safeguarding the Groups assets. The Board also notes that all internal control systems and risk managements systems contain inherent limitations and no system of internal controls or risk management system could provide absolute assurance against the occurrence of material errors, poor judgement in decision making, human error, losses, fraud or other irregularities. As the Group continues to grow the business, the Board will continue to review and take appropriate steps to strengthen the Groups overall system of internal controls and risk management.
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Internal Audit Principle 13: The Company should establish an internal audit function that is independent of the activities it audits. The Board recognises the importance of maintaining a system of internal controls, procedures and processes for the Group to safeguard the shareholders investments and the Companys assets. The Company has outsourced the internal audit functions of the Group to Messrs 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 through administratively liaises with the Chief Financial Officer. Management is responsible for designing and implementing a system of internal controls, procedures and processes for the Group to safeguard the shareholders investments and Companys assets. The internal auditors assess the reliability, adequacy and effectiveness of these internal controls and risk management processes of the Group, assisting the AC in the review of interested person transactions and checking 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, 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 raise 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.
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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. 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 Chairman of the AC, NC and RC are normally available at the meetings to answer any question relating to the work of these Board 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 during the period commencing one month immediately preceding the announcement of the Companys half year 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, on normal commercial terms and will not be prejudicial to the interests of the Company and its minority shareholders. There were no interested person transactions between the Company and any of its interested person (Directors, executive officers or controlling shareholders of the Group or the associates of such Directors, executive officers or controlling shareholders) subsisting for the financial period from 1 July 2011 to 30 June 2012. The Company does not have any shareholders mandate for interested person transactions.
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MATERIAL CONTRACTS Save as disclosed in the Directors report and financial statements, there were 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 2012 or entered into since the date of listing of the Company. 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 minimise the Groups exposure to foreign currency fluctuation, it engages in foreign currency hedging based on purchase commitments. CATALIST SPONSOR The Company is currently under the SGX-ST Catalist sponsor-supervised regime. The continuing sponsor of the Company is RHT Capital Pte. Ltd. For the purposes of Rule 1204(21) of the Listing Manual Section B: Rules of Catalist of the SGX-ST, there was no non-sponsor fee paid to RHT Capital Pte. Ltd. as at the date of this report. NON-CONFLICT OF INTEREST Mr Azman Hisham Bin Jaafar, Independent Director of the Company, has declared to the Directors that he is the Partner of RHTLaw Taylor Wessing LLP (RHTLaw Taylor Wessing). We are not presently aware of any conflict of interest arising from his aforesaid role. He abstains from any voting on any resolution where it relates to the appointment of RHTLaw Taylor Wessing, RHT Corporate Advisory Pte. Ltd., RHT Capital Pte. Ltd. and their related companies.
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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 2012 and the statement of financial position of the Company as at 30 June 2012. 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. Arrangements to enable Directors to acquire shares or debentures Except as disclosed under the section Share options and performance shares plan, 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 under Section 164 of the Singapore Companies Act, Cap. 50 (the Act), none of the Directors of the Company who held office at the 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 Shareholdings in which in the name of Directors Directors are deemed to or nominees have interest Balance at Balance at Balance at Balance at 1 July 2011 30 June 2012 1 July 2011 30 June 2012 Number of ordinary shares Company Jimmy Fong Teck Loon Brenda Yeo Siow Chee Keong 50,369,800 630,000 100,000 55,025,800 630,000 100,000 630,000 50,369,800 630,000 55,025,800
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. Jimmy Fong Teck Loons shareholding as at 30 June 2012 includes 54,969,800 shares held by Credit Suisse AG Singapore through HSBC (Singapore) Nominees Pte Ltd.
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3. Directors interests in shares or debentures (Continued) 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 2012 in the shares of the Company have not changed from those disclosed as at 30 June 2012. 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 and performance shares plan 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) and the participation of Jimmy Fong Teck Loon, a controlling shareholder in the Company, in 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. At the Annual General Meeting held on 28 October 2011, the shareholders of the Company approved the participation of Brenda Yeo in the Scheme, and the grant of Awards for 1,400,000 and 1,200,000 shares to two Executive Directors, namely Jimmy Fong Teck Loon and Brenda Yeo respectively. Notwithstanding approval of shareholders at the Annual General Meeting to the grant of such Awards, the Awards have not, as at 30 June 2012, been granted to Jimmy Fong Teck Loon and Brenda Yeo. The aggregate number of new shares issued pursuant to the Scheme shall not exceed 15% of the issued share capital of the Company. As at 30 June 2012, no options and conditional awards have been granted to controlling shareholders of the Company or associates of the Company and no employees have received 5% or more of the total options and conditional awards available under the Scheme. The Scheme is administered by the Remuneration Committee. 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.
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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 and internal auditors and the consolidated financial statements of the Group 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 reappointment 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 28 September 2012
Brenda Yeo Director
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statement by directors
In the opinion of the Board of Directors, (a) the consolidated financial statements of the Group and the statement of financial position of the Company are drawn up so as to give a true and fair view of the state of affairs of the Group and of the Company as at 30 June 2012, and of the results changes, in equity and cash flows of the Group for the financial year then ended; 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 28 September 2012
Brenda Yeo Director
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47
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) set out on pages 49 to 107, which comprise the statements of financial position of the Group and of the Company as at 30 June 2012, the consolidated statement of comprehensive income, consolidated statement of changes in equity and consolidated statement of cash flows of the Group for the financial year then ended, and a summary of significant accounting policies and other explanatory information. 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.
48
ANNUAL REPORT 2012
independent auditors report

TO THE MEMBERS OF EPICENTRE HOLDINGS LIMITED Report on the financial statements (Continued) Opinion In our opinion, the consolidated financial statements of the Group and the statement of financial position of the Company are properly drawn up in accordance with the provisions of the Act and Singapore Financial Reporting Standards so as to give a true and fair view of the state of affairs of the Group and of the Company as at 30 June 2012 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 28 September 2012
ANNUAL REPORT 2012
49
statements of nancial position

AS AT 30 JUNE 2012 Note 2012 $000 Non-current assets Club membership Plant and equipment Investments in subsidiaries Current assets Inventories Trade and other receivables Prepayments Current income tax recoverable Cash and cash equivalents Less: Current liabilities Trade and other payables Provisions Deferred revenue Derivative financial instruments Finance lease payables Current income tax payable Bank borrowings Net current assets Less: Non-current liabilities Bank borrowings Finance lease payables Deferred tax liabilities 4 5 6 223 3,606 3,829 7 8 14,124 7,363 880 103 12,953 35,423 Group 2011 $000 223 2,510 2,733 10,137 5,841 493 14,870 31,341 2012 $000 223 732 3,476 4,431 3,557 77 279 3,913 Company 2011 $000 223 900 1,120 2,243 6,496 76 3,124 9,696
10 11 12 13 14 15
18,182 244 8 21 79 153 3,490 22,177 13,246
12,967 135 14 35 913 14,064 17,277
459 50 * 79 588 3,325
450 50 6 35 541 9,155
15 14 16
87 82 92 261 16,814
200 78 278 19,732 6,709 (2) 12,989 19,696 36 19,732
82 15 97 7,659 6,709 (7) 957 7,659 7,659
200 15 215 11,183 6,709 4,474 11,183 11,183
Equity Share capital Treasury shares Foreign currency translation account Retained earnings Equity attributable to owners of the parent Non-controlling interest Total equity
* Denotes less than $1,000
17 18 19
6,709 (7) (24) 10,233 16,911 (97) 16,814
The accompanying notes form an integral part of these financial statements.
50
ANNUAL REPORT 2012
consolidated statement of comprehensive income

FOR THE FINANCIAL YEAR ENDED 30 JUNE 2012 Note 2012 $000 Revenue Cost of sales Gross profit Other items of income Interest income Other income Other items of expense Administrative expenses Selling and distribution costs Finance costs Profit before income tax Income tax expense Profit for the 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 year Profit attributable to: Owners of the parent Non-controlling interest 984 (374) 610 Total comprehensive income attributable to: Owners of the parent Non-controlling interest 962 (360) 602 Earnings per share (in cents) Basic and diluted 25 1.05 5.10 4,739 (22) 4,717 4,767 (20) 4,747 (8) (8) 602 (30) (30) 4,717 22 23 24 (18,829) (5,719) (31) 858 (248) 610 (15,311) (4,541) (2) 5,730 (983) 4,747 21 5 1,824 13 1,365 20 183,888 (160,280) 23,608 2011 $000 162,603 (138,397) 24,206
Equity Foreign attributable to owners Noncontrolling interest $000 36 19,732 $000 equity Total Retained of the parent $000 19,696 earnings $000 12,989 currency Share translation account $000 (2) capital $000 6,709 $000 shares Treasury
Note
Balance at 1 July 2011
Profit for the year
984
984
(374)
610
Other comprehensive income
for the year
Foreign currency differences (22) (22) 14 (8)
on translation of foreign
operations, net of tax
Total comprehensive income (7) (7) (22) 984 962 (360) 602 (7)
for the year
Purchase of treasury shares
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ANNUAL REPORT 2012
Distribution to owners of the (3,740) (3,740) (3,740)
parent
Dividends
26
Transactions with the
non-controlling interest 6,709 (7) (24) 10,233 16,911 227 (97) 227 16,814
Capital contribution by
non-controlling interest
consolidated statement of changes in equity
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2012
Balance at 30 June 2012
51
52
Foreign Equity attributable to owners Noncontrolling interest $000 17,762 $000 equity Total Retained of the parent $000 17,762 earnings $000 11,027 currency translation Share reserve/ (account) $000 26 capital $000 6,709
Note
Balance at 1 July 2010
Profit for the year
4,767
4,767
(20)
4,747
Other comprehensive income
for the year
Foreign currency differences (28) (28) (2) (30)
ANNUAL REPORT 2012
on translation of foreign operations,
net of tax
Total comprehensive income (28) 4,767 4,739 (22) 4,717
for the year
Distribution to owners of the parent (2,805) (2,805) (2,805)
Dividends
26
Transactions with the
non-controlling interest 6,709 (2) 12,989 19,696 58 36 58 19,732
Attributable to incorporation of
a subsidiary
consolidated statement of changes in equity
Balance at 30 June 2011
ANNUAL REPORT 2012
53
consolidated statement of cash ows

FOR THE FINANCIAL YEAR ENDED 30 JUNE 2012 2012 $000 Operating activities Profit before income tax Adjustments for: Allowance for inventory obsolescence Third parties trade receivables written off Changes in value of derivative financial instruments Depreciation of plant and equipment Interest income Interest expense Loss on disposals of plant and equipment Inventories written off Plant and equipment written off Reversal of provision for reinstatement cost not utilised Operating cash flows before working capital changes Working capital changes: Inventories Trade and other receivables Prepayments Trade and other payables Deferred revenue Cash generated from operations Interest received Interest paid Income taxes paid Net cash from operating activities (4,025) (1,559) (386) 5,143 8 1,662 5 (31) (1,093) 543 (2,290) 56 (108) 4,279 8,812 13 (2) (644) 8,179 10 46 7 1,512 (5) 31 80 (58) 2,481 31 23 59 996 (13) 2 1 72 4 (30) 6,875 858 5,730 2011 $000
Investing activities Proceeds from capital contributions by non-controlling interest Purchase of club membership Purchase of plant and equipment Purchase of treasury shares Net cash used in investing activities 227 (2,435) (7) (2,215) 58 (223) (1,286) (1,451)
54
ANNUAL REPORT 2012
consolidated statement of cash ows

FOR THE FINANCIAL YEAR ENDED 30 JUNE 2012 Note 2012 $000 Financing activities Dividends paid Decrease in fixed deposits pledged Proceeds from bank borrowings Repayments of bank borrowings Repayments of finance lease payables Net cash used in financing activities (3,740) 7,643 (4,066) (74) (237) (2,805) 1,713 (16) (1,108) 2011 $000
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 9
(1,909) 14,870 (8) 12,953
5,620 9,281 (31) 14,870
ANNUAL REPORT 2012
55
notes to the nancial statements

FOR THE FINANCIAL YEAR ENDED 30 JUNE 2012 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 2012 were authorised for issue in accordance with a Directors resolution dated 28 September 2012. 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) including related Interpretation of FRS (INT FRS) and are prepared under the historical cost convention, except as disclosed in the accounting policies below. The individual financial statements of each Group entity are measured and presented in the currency of the primary economic environment in which the entity operates (its functional currency). The consolidated financial statements of the Group and the statement of financial position of the Company are presented in Singapore dollar ($), which is the functional currency of the Company. All values are rounded to the nearest thousand ($000) except when otherwise indicated. In the current financial year, the Group has adopted all the new or revised FRS and INT FRS that are relevant to its operations and effective for the current financial year. The adoption of the new or revised FRS and INT FRS did not result in changes to the Groups accounting policies and has no material effect on the amounts reported for the current and prior financial years. FRS 24 (Revised) Related Party Disclosures FRS 24 (Revised) has been adopted beginning 1 July 2011 and has been applied retrospectively. The revised standard clarified the definition of a related party and does not have any impact on the amounts reported for the current or prior financial years.
56
ANNUAL REPORT 2012

FOR THE FINANCIAL YEAR ENDED 30 JUNE 2012 2. Summary of significant accounting policies (Continued) 2.1 Basis of preparation of financial statements (Continued) FRS and INT FRS issued but not yet effective As at the date of the authorisation of these financial statements, the Group has 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 27 FRS 28 FRS 32 FRS 101 FRS 107 FRS 110 : : : : : : : : : : Amendments to FRS 1 Presentation of Items of Other Comprehensive Income Amendments to FRS 12 Deferred Tax: Recovery of Underlying Assets Employee Benefits Separate Financial Statements Investments in Associates and Joint Ventures Offsetting of Financial Assets and Financial Liabilities Amendments to FRS 101: Government Loans Amendments to FRS107: Offsetting of Financial Assets and Financial Liabilities Consolidated Financial Statements Consolidated Financial Statements, Joint Arrangements and Disclosure of Interests in Other Entities: Transition Guidance (Amendments to FRS 110, FRS 111 and FRS 112) FRS 111 FRS 112 FRS 113 INT FRS 120 : : : : Joint Arrangements Disclosure of Interests in Other Entities Fair Value Measurements Stripping Costs in the Production Phase of a Surface Mine Improvements to FRSs 2012 1 January 2013 1 January 2014 1 January 2014 1 January 2013 1 January 2013 1 January 2014 1 January 2014 1 January 2013 1 January 2014 1 January 2014 1 January 2014 1 January 2013 1 January 2013 1 January 2012 1 July 2012
Consequential amendments were also made to various standards as a result of these new or revised standards. The Group expects 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.
ANNUAL REPORT 2012
57

FOR THE FINANCIAL YEAR ENDED 30 JUNE 2012 2. Summary of significant accounting policies (Continued) 2.1 Basis of preparation of financial statements (Continued) FRS and INT FRS issued but not yet effective (Continued) Amendments to FRS 1 Presentation of Items of Other Comprehensive Income The amendments to FRS 1 changes the grouping of items presented in other comprehensive income. Items that could be reclassified to profit or loss at a future point in time would be presented separately from items which will never be reclassified. As the amendments only affect the presentation of items that are already recognised in other comprehensive income, the Group does not expect any impact on its financial position or performance upon adoption of this standard from the financial year beginning 1 July 2012. FRS 110 Consolidated Financial Statements FRS 110 changes the definition of control and applies it to all investees to determine the scope of consolidation. FRS 110 requirements will apply to all types of potential subsidiary. FRS 110 requires an investor to reassess the decision on whether to consolidate an investee when events indicate that there may be a change to one of the three elements of control, i.e. power, variable returns and the ability to use power to affect returns. This FRS is to be applied for annual periods beginning on or after 1 January 2013. The Group will determine the impact of this standard when it becomes effective. FRS 112 Disclosure of Interests in Other Entities FRS 112 is a new and comprehensive standard on disclosure requirements for all forms of interest in other entities, including joint arrangements, associates, special purpose vehicles and other off balance sheet vehicles. FRS 112 requires an entity to disclose information that helps users of its financial statements to evaluate the nature and risks associated with its interests in other entities and the effects of those interests on its financial statements. The Group is currently determining the impact of the disclosure requirements. As this is a disclosure standard, it will have no impact to the financial position and financial performance of the Group upon adoption of this standard from the financial year beginning 1 July 2013. FRS 113 Fair Value Measurements FRS 113 provides guidance on how to measure fair values including those for both financial and non-financial items and introduces significantly enhanced disclosure about fair values. It does not address or change the requirements on when fair values should be used. When measuring fair value, an entity is required to use valuation techniques that maximise the use of relevant observable inputs and minimise the use of unobservable inputs. It establishes a fair value hierarchy for doing this. This FRS is to be applied for annual periods beginning on or after 1 January 2013. The Group will determine the impact of this standard when it becomes effective.
58
ANNUAL REPORT 2012

FOR THE FINANCIAL YEAR ENDED 30 JUNE 2012 2. Summary of significant accounting policies (Continued) 2.1 Basis of preparation of financial statements (Continued) FRS and INT FRS issued but not yet effective (Continued) FRS 113 Fair Value Measurements (Continued) The preparation of financial statements in conformity with FRS requires management to make judgements, estimates and assumptions that affect the Company and the Groups application of accounting policies and reported amounts of assets, liabilities, revenue and expenses. Although these estimates are based on managements best knowledge of current events and actions actual results may differ from those estimates. 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, so 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, as appropriate. Intra-group balances and transactions and any unrealised gains and losses arising from intra-group transactions are eliminated on consolidation. 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 non-controlling 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.
ANNUAL REPORT 2012
59

FOR THE FINANCIAL YEAR ENDED 30 JUNE 2012 2. Summary of significant accounting policies (Continued) 2.2 Basis of consolidation (Continued) 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. 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.
60
ANNUAL REPORT 2012

FOR THE FINANCIAL YEAR ENDED 30 JUNE 2012 2. Summary of significant accounting policies (Continued) 2.3 Business combinations (Continued) Business combinations from 1 July 2010 (Continued) Where a business combination is achieved in stages, the Groups previously held interests in the acquired entity are remeasured 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. 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 acquisition-date fair value amounts of the identifiable assets acquired and the liabilities assumed.
ANNUAL REPORT 2012
61

FOR THE FINANCIAL YEAR ENDED 30 JUNE 2012 2. Summary of significant accounting policies (Continued) 2.3 Business combinations (Continued) Business combinations from 1 July 2010 (Continued) 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 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. 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.
62
ANNUAL REPORT 2012

FOR THE FINANCIAL YEAR ENDED 30 JUNE 2012 2. Summary of significant accounting policies (Continued) 2.4 Plant and equipment (Continued) 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 3 3 3 3 7 to 10
Demo equipment Office equipment Furniture and fittings Renovation Motor vehicles
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. 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.
ANNUAL REPORT 2012
63

FOR THE FINANCIAL YEAR ENDED 30 JUNE 2012 2. Summary of significant accounting policies (Continued) 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.
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ANNUAL REPORT 2012

FOR THE FINANCIAL YEAR ENDED 30 JUNE 2012 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 transaction date where the purchase of a financial asset is under a contract whose terms require delivery of the financial asset within the time frame 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 and cash and cash equivalents 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.
ANNUAL REPORT 2012
65

FOR THE FINANCIAL YEAR ENDED 30 JUNE 2012 2. Summary of significant accounting policies (Continued) 2.8 Financial instruments (Continued) 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 assets 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. 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. If in a subsequent period, 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 assets 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. Derecognition of financial assets 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.
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ANNUAL REPORT 2012

FOR THE FINANCIAL YEAR ENDED 30 JUNE 2012 2. Summary of significant accounting policies (Continued) 2.8 Financial instruments (Continued) 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. When shares recognised as equity is reacquired, the amount of consideration paid is recognised directly in equity. Reacquired shares are classified as treasury shares and presented as a deduction from total equity. No gain or loss is recognised in profit or loss on the purchase, sale issue or cancellation of treasury shares. When treasury shares are subsequently cancelled, the cost of treasury shares are deducted against the share capital account if these shares are purchased out of capital of the Company, or against the retained earnings of the Company if the shares are purchased out of earnings of the Company. When treasury shares are subsequently sold or reissued pursuant to the employee share option scheme, the cost of treasury shares is reversed from the treasury share account and the realised gain or loss on sale or reissue, net of any directly attributable incremental transaction costs and related income tax, is recognised in the capital reserve of the Company. 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.
ANNUAL REPORT 2012
67

FOR THE FINANCIAL YEAR ENDED 30 JUNE 2012 2. Summary of significant accounting policies (Continued) 2.8 Financial instruments (Continued) Financial liabilities and equity instruments (Continued) 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. Bank borrowings Interest-bearing bank loans are initially measured at fair value, and are subsequently measured at amortised cost, using the effective interest method. Any difference between the proceeds (net of transaction costs) and the settlement or redemption of borrowings is recognised over the term of the borrowings in accordance with the Groups accounting policy for borrowing costs. 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.
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ANNUAL REPORT 2012

FOR THE FINANCIAL YEAR ENDED 30 JUNE 2012 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. 2.10 Provisions Provisions are recognised when the Group has a present legal or constructive obligation as a result of a past event, it is probable that the Group 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 customers which coincides with the delivery and acceptance. The consideration received from the sale of goods to customers under the customer loyalty programme Epicentre Loyalty Programme is allocated to the good sold and the points issued (award credits) that are expected to be redeemed. The consideration allocated to the award credits is at the fair value of the points. It is recognised as a liability (deferred revenue) on the statements of financial position and recognised as revenue when the points are redeemed, expired or are no longer expected to be redeemed. The amount of revenue is based on the number of award credits that have been redeemed, relative to the total number expected to be redeemed.
ANNUAL REPORT 2012
69

FOR THE FINANCIAL YEAR ENDED 30 JUNE 2012 2. Summary of significant accounting policies (Continued) 2.11 Revenue recognition (Continued) 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. Membership fees income is recognised upon the amount received on the issuance of the membership cards. 2.12 Government grant Grants from government are recognised as a receivable at their fair value when there is a reasonable assurance that the grant will be received and the Group will comply with all the attached conditions. Government grants receivables are recognised as income over the periods necessary to match them with the related costs which they intended to compensate on a systematic basis. Government grants relating to expense are shown separately as other income. Government grants relating to assets are deducted against the carrying amount of the assets. 2.13 Borrowing costs Borrowing costs are recognised in profit or loss in the period in which they are incurred. 2.14 Employee benefits Defined contribution plans Defined contribution plans are post-employment benefit plans under which the Group pays fixed contributions into separate entities such as the Central Provident Fund on a mandatory, contractual or voluntary basis. The Group participates in the national schemes as defined by laws of the countries in which it operates. The Group has no further payment obligations once the contributions have been paid. The Groups contributions are recognised as expense in profit or loss as and when they are incurred.
70
ANNUAL REPORT 2012

FOR THE FINANCIAL YEAR ENDED 30 JUNE 2012 2. Summary of significant accounting policies (Continued) 2.14 Employee benefits (Continued) Employee leave entitlements 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. Performance share plan The fair value of employee services received in exchange for the grant of the awards would be recognised as a charge to the consolidated statement of comprehensive income over the vesting period and is determined by reference to the fair value of each award granted on the date of the award with a corresponding credit to equity. The expense recognised in the consolidated statement of comprehensive income at each reporting date reflects the manner in which the benefits will accrue to employees under the share plan over the vesting period. The charge or credit for a period represents the movement in cumulative expense recognised as at the beginning and end of the period. No expense is recognised for awards that do not ultimately vest, except for awards where vesting is conditional upon market condition, which are treated as vested irrespective of whether or not the market condition is satisfied, provided that all other performance conditions are satisfied. 2.15 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.
ANNUAL REPORT 2012
71

FOR THE FINANCIAL YEAR ENDED 30 JUNE 2012 2. Summary of significant accounting policies (Continued) 2.15 Leases (Continued) 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. 2.16 Income tax Income tax expense represents the sum of the tax currently payable and deferred tax. The tax currently payable is based on taxable profit for the year. Taxable profit differs from profit as reported in profit or loss because it excludes items of income or expense that are taxable or deductible in other 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 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. Deferred tax liabilities are recognised on taxable temporary differences arising on investments in subsidiaries, except where the Group and the Company are able to control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future.
72
ANNUAL REPORT 2012

FOR THE FINANCIAL YEAR ENDED 30 JUNE 2012 2. Summary of significant accounting policies (Continued) 2.16 Income tax (Continued) 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 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. Unrecognised deferred tax assets are reassessed at the end of the 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. Revenue, expenses and assets are recognised net of the amount of sales tax except: when the sales tax that is incurred on purchase of assets or services is not recoverable from the tax authorities, in which case the sales tax is recognised as part of cost of acquisition of the asset or as part of the expense item as applicable; and receivables and payables that are stated with the amount of sales tax included.
2.17
Foreign currency transactions and translation In preparing the financial statements of the individual entities, 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.
ANNUAL REPORT 2012
73

FOR THE FINANCIAL YEAR ENDED 30 JUNE 2012 2. Summary of significant accounting policies (Continued) 2.17 Foreign currency transactions and translation (Continued) 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. 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 in equity. 2.18 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. 2.19 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.
74
ANNUAL REPORT 2012

FOR THE FINANCIAL YEAR ENDED 30 JUNE 2012 3. Critical accounting judgements and key sources of estimation uncertainty In the application of the Groups accounting policies, which are described in Note 2, management made judgements, estimates and assumptions about the carrying amounts of assets and liabilities that were not readily apparent from other sources. The estimates and associated assumptions were based on historical experience and other factors that were considered to be reasonable under the circumstances. Actual results may differ from these estimates. These estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods. 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 accounting policies and which have significant effect on the amounts recognised in the financial statements. (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.
ANNUAL REPORT 2012
75

FOR THE FINANCIAL YEAR ENDED 30 JUNE 2012 3. Critical accounting judgements and key sources of estimation uncertainty (Continued) 3.2 Key sources of estimation uncertainty (Continued) (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 2012 were approximately $3,606,000 and $732,000 (2011: $2,510,000 and $900,000) 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 2012 was approximately $14,124,000 (2011: $10,137,000). (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 2012 were approximately $7,363,000 and $3,557,000 (2011: $5,841,000 and $6,496,000) respectively.
76
ANNUAL REPORT 2012

FOR THE FINANCIAL YEAR ENDED 30 JUNE 2012 3. Critical accounting judgements and key sources of estimation uncertainty (Continued) 3.2 Key sources of estimation uncertainty (Continued) (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 amount of the Groups current income tax payable as at 30 June 2012 was approximately $153,000 (2011: $913,000). The carrying amount of the Groups current income tax recoverable as at 30 June 2012 was approximately $103,000 (2011: $Nil). The carrying amounts of the Groups and the Companys deferred tax liabilities as at 30 June 2012 were approximately $92,000 and $15,000 (2011: $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 2012 were approximately $244,000 and $50,000 (2011: $135,000 and $50,000) respectively. (vi) Customer loyalty programme The Group allocates the consideration received from the sale of goods to the goods sold and the points issued under the Epicentre Loyalty Programme. The consideration allocated to the points issued is measured at their fair values. Fair values are determined by considering, among others, the following factors: the range of products available to the customers, the prices at which the Group sells the products which can be redeemed and the changing patterns in the redemption rates. The carrying amount of the Groups deferred revenue as at 30 June 2012 was approximately $8,000 (2011: $Nil).
ANNUAL REPORT 2012
77

FOR THE FINANCIAL YEAR ENDED 30 JUNE 2012 4. Club membership Group and Company 2012 $000 Club membership, at cost 223 2011 $000 223
Club membership comprises transferable membership from a country club in Singapore. As at 30 June 2012, the club membership with carrying amount of approximately $223,000 (2011: $223,000) 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 Furniture Demo Group 2012 Cost Balance at 1 July 2011 Additions Written off Currency translation adjustment Balance at 30 June 2012 Accumulated depreciation Balance at 1 July 2011 Depreciation for the year Written off Currency translation adjustment Balance at 30 June 2012 Carrying amount Balance at 30 June 2012 25 680 606 1,976 319 3,606 46 7 53 530 329 (43) (2) 814 196 156 (4) (4) 344 1,431 964 (49) (5) 2,341 33 56 89 2,236 1,512 (96) (11) 3,641 50 28 78 985 553 (43) (1) 1,494 520 436 (4) (2) 950 2,783 1,585 (49) (2) 4,317 408 408 4,746 2,602 (96) (5) 7,247 $000 Office $000 and fittings $000 Renovation $000 Motor vehicles $000 Total $000 equipment equipment
78
ANNUAL REPORT 2012

FOR THE FINANCIAL YEAR ENDED 30 JUNE 2012 5. Plant and equipment (Continued) Furniture 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 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 40 6 46 369 225 * (57) (7) 530 141 75 (15) (5) 196 793 672 (31) (3) 1,431 15 18 33 1,358 996 * (103) (15) 2,236 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 and fittings $000 Renovation $000 Motor vehicles $000 Total $000 equipment equipment
Denotes less than $1,000
ANNUAL REPORT 2012
79

FOR THE FINANCIAL YEAR ENDED 30 JUNE 2012 5. Plant and equipment (Continued) Furniture Demo Company 2012 Cost Balance at 1 July 2011 Additions Balance at 30 June 2012 Accumulated depreciation Balance at 1 July 2011 Depreciation for the year Balance at 30 June 2012 Carrying amount Balance at 30 June 2012 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 year Written off Balance at 30 June 2011 Carrying amount Balance at 30 June 2011 100 87 338 375 900 31 31 77 63 (1) 139 15 9 (15) 9 19 42 (30) 31 15 18 33 157 132 (46) 243 31 31 151 89 (1) 239 15 96 (15) 96 54 369 (54) 369 52 356 408 303 910 (70) 1,143 65 71 277 319 732 31 31 139 58 197 9 17 26 31 61 92 33 56 89 243 192 435 31 31 239 23 262 96 1 97 369 369 408 408 1,143 24 1,167 $000 Office $000 and fittings $000 Renovation $000 Motor vehicles $000 Total $000 equipment equipment
80
ANNUAL REPORT 2012

FOR THE FINANCIAL YEAR ENDED 30 JUNE 2012 5. Plant and equipment (Continued) As at 30 June 2012, the carrying amounts of motor vehicles of the Group and the Company which were acquired under finance lease arrangements were approximately $319,000 (2011: $375,000). Finance leased assets are pledged as securities for the related finance lease payables (Note 14). As at 30 June 2012, the motor vehicle with carrying amount of approximately $292,000 (2011: $343,000) 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 2012 $000 Additions of plant and equipment Less: Provision for reinstatement costs Finance lease agreements Other payables Cash payments to acquire plant and equipment (167) 2,435 (50) (244) (112) 1,286 2,602 2011 $000 1,692
6.
Investments in subsidiaries Company 2012 $000 Unquoted equity investments, at cost 3,476 2011 $000 1,120
ANNUAL REPORT 2012
81

FOR THE FINANCIAL YEAR ENDED 30 JUNE 2012 6. Investments in subsidiaries (Continued) The details of the subsidiaries are as follows: Name of company (Country of incorporation) Effective equity interest 2012 2011 % % 100 100 100 100 87 100 100 100 100 70
Principal activities
Epicentre Solutions Pte. Ltd.(1) (Singapore) Epicentre Pte. Ltd.(1) (Singapore) Epicentre Lifestyle Sdn. Bhd.(2) (Malaysia) Epi Lifestyle Pte. Ltd.(1) (Singapore) Epicentre (Shanghai) Co., Ltd.(3) (Peoples Republic of China)
Providing IT solutions to educational institutions within Singapore Retail of Apple brand and complementary products Retail of Apple brand and complementary products Retail, trading, repair and service of consumer electronics and digital lifestyle products Retail of Apple brand and complementary products
(1) (2) (3)
Audited by BDO LLP, Singapore Audited by BDO, Malaysia, a member firm of BDO International Limited Audited by BDO China Shu Lun Pan Certified Public Accountants LLP, Peoples Republic of China, a member firm of BDO International Limited
Additional investments in subsidiaries On 11 August 2011 and 9 September 2011, the Company increased the paid-up capital of its subsidiary, Epicentre (Shanghai) Co., Ltd., by RMB2,786,000 (approximately $534,000) and RMB7,000,000 (approximately $1,434,000) respectively by way of cash contributions. The increased resulted to a change in the Companys effective equity interest from 70% to 87%. On 2 September 2011, the Company increased the paid-up capital of its wholly-owned subsidiary, Epicentre Pte. Ltd. by $185,000 by way of cash contribution. On 7 September 2011, the Company increased the paid-up capital of its wholly-owned subsidiary, Epicentre Lifestyle Sdn. Bhd. (Epicentre Lifestyle) by RM300,000 (approximately $203,000) by way of capitalisation of amounts due from Epicentre Lifestyle to the Company.
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ANNUAL REPORT 2012

FOR THE FINANCIAL YEAR ENDED 30 JUNE 2012 6. Investments in subsidiaries (Continued) Incorporation of subsidiaries On 14 February 2011, the Company subscribed for 70% equity interest in the paid-up capital of Epicentre (Shanghai) Co., Ltd., a company incorporated in Peoples Republic of China for a consideration of approximately RMB714,000 (approximately $140,000). 7. Inventories Group 2012 $000 Trading goods 14,124 2011 $000 10,137
The cost of inventories recognised as an expense and included in cost of sales line item in profit or loss amounted to approximately $160,280,000 (2011: $138,397,000). As at 30 June 2012, 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 $10,000 and $80,000 (2011: $31,000 and $72,000) respectively that have been included in administrative expenses line item in consolidated statement of comprehensive income. 8. Trade and other receivables Group 2012 $000 Trade receivables third parties Due from subsidiaries non-trade Other receivables and rebate accruals Rental and other deposits Total trade and other receivables Add: Cash and cash equivalents (Note 9) Total loans and receivables 4,124 955 2,284 7,363 12,953 20,316 2011 $000 3,644 809 1,388 5,841 14,870 20,711 2012 $000 3,493 64 3,557 279 3,836 Company 2011 $000 6,431 65 6,496 3,124 9,620
Trade receivables are unsecured, interest-free and generally on 30 to 60 days (2011: 30 to 60 days) credit terms. The non-trade amounts due from subsidiaries are unsecured, interest-free and repayable on demand.
ANNUAL REPORT 2012
83

FOR THE FINANCIAL YEAR ENDED 30 JUNE 2012 8. Trade and other receivables (Continued) Trade and other receivables are denominated in the following currencies: Group 2012 $000 Singapore dollar United States dollar Ringgit Malaysia Chinese renminbi 5,325 436 904 698 7,363 2011 $000 4,513 524 780 24 5,841 2012 $000 3,557 3,557 Company 2011 $000 6,496 6,496
9.
Cash and cash equivalents Group 2012 $000 Cash and bank balances Fixed deposits 12,953 12,953 2011 $000 13,675 1,195 14,870 2012 $000 279 279 Company 2011 $000 1,929 1,195 3,124
In the previous financial year, fixed deposits matured on varying dates within one year from the end of the reporting period with options for early termination. The effective interest rates on the fixed deposits ranged from 0.25% to 0.50% per annum. Cash and cash equivalents are denominated in the following currencies: Group 2012 $000 Singapore dollar United States dollar Ringgit Malaysia Chinese renminbi 10,674 188 1,959 132 12,953 2011 $000 11,391 1,298 2,028 153 14,870 2012 $000 257 22 279 Company 2011 $000 1,906 1,218 3,124
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ANNUAL REPORT 2012

FOR THE FINANCIAL YEAR ENDED 30 JUNE 2012 10. Trade and other payables Group 2012 $000 Trade payables third parties Deposits placed by customers Accrued operating expenses Other payables third parties a Director of the Company Total trade and other payables Add: Finance lease payables (Note 14) Bank borrowings (Note 15) Total financial liabilities carried at amortised cost 21,920 13,202 620 685 161 3,577 235 161 235 784 18,182 571 112 12,967 78 459 49 112 450 16,131 576 691 2011 $000 10,939 768 577 2012 $000 82 299 Company 2011 $000 3 286
Trade payables are unsecured, interest-free and are normally settled between 30 to 60 days (2011: 30 to 60 days) credit terms. The non-trade amount due to a Director of the Company was unsecured, interest-free and repayable on demand. Trade and other payables are denominated in the following currencies: Group 2012 $000 Singapore dollar United States dollar Ringgit Malaysia Chinese renminbi 3,049 14,110 400 623 18,182 2011 $000 3,627 8,844 448 48 12,967 2012 $000 459 459 Company 2011 $000 450 450
ANNUAL REPORT 2012
85

FOR THE FINANCIAL YEAR ENDED 30 JUNE 2012 11. Provisions Group 2012 $000 Provision for reinstatement costs Balance at beginning of financial year Provision made during the financial year Reversal of provision not utilised Balance at end of financial year 135 167 (58) 244 139 50 (54) 135 50 50 54 50 (54) 50 2011 $000 2012 $000 Company 2011 $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. 12. Deferred revenue Group 2012 $000 Customer Loyalty Programme Balance at beginning of the financial year Revenue deferred in respect of award credits earned Revenue recognised on discharge of obligations of award Balance at end of the financial year 8 * 8 2011 $000
Denotes less than $1,000
The Group operates the Epicentre Loyalty Programme, where every dollar on the purchase of the Groups products entitles the member to earn one reward point. Reward points accumulated can be used to redeem cash vouchers.
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ANNUAL REPORT 2012

FOR THE FINANCIAL YEAR ENDED 30 JUNE 2012 13. Derivative financial instruments Group 2012 $000 Liabilities Foreign currency forward contracts 21 14 * 6 2011 $000 2012 $000 Company 2011 $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 or equal to 6 months. As at the end of the reporting period, the Group and the Company entered into foreign currency forward contracts as follows: Average exchange Group 2012 Buy United States dollar 1.28 rates Foreign currency 000 $8,932 Notional amount 000 US$7,000 Fair value $000 (21) 13 August to 18 December 2012 2011 Buy United States dollar 1.23 $4,684 US$3,800 (14) 21 July to 29 July 2011 Company 2012 Buy United States dollar 2011 Buy United States dollar 1.23 $1,235 US$1,000 (6) 21 July 2011 1.27 $1,270 US$1,000 * 18 December 2012 Settlement date
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.
* Denotes less than $1,000
ANNUAL REPORT 2012
87

FOR THE FINANCIAL YEAR ENDED 30 JUNE 2012 14. Finance lease payables Present value Minimum lease Group and Company payments $000 2012 Current liabilities Within one financial year 84 (5) 79 Future finance charges $000 of minimum lease payments $000
Non-current liabilities After one financial year but within five financial years 87 171 (5) (10) 82 161
2011 Current liabilities Within one financial year 40 (5) 35
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
The finance lease term is 3 (2011: ranges from 4 to 7) years and the effective interest rate for finance lease obligation is 3.60% (2011: ranges from 3.57% to 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 carrying amounts of the Groups and the Companys lease obligations approximate their fair values. The finance lease payables are denominated in Singapore dollar.
88
ANNUAL REPORT 2012

FOR THE FINANCIAL YEAR ENDED 30 JUNE 2012 15. Bank borrowings Group 2012 $000 Current liabilities Unsecured Invoice financings Short term bank loans 2,715 775 3,490 2011 $000
Non-current liabilities Unsecured Long term bank loan 87 3,577
Invoice financings bear interests from 1.55% to 1.60% per annum and repayable within 3 months from the end of the reporting period. Short term bank loans are supported by the corporate guarantee from the Company, bear interests from 6.91% to 7.20% per annum and repayable from July 2012 to June 2013. Long term bank loan is supported by the corporate guarantee from the Company, bears interest at 7.20% per annum and is repayable in June 2014. Management estimates that the carrying amounts of the Groups borrowings approximate their fair values. The bank borrowings are denominated in the following currencies: Group 2012 $000 Singapore dollar Chinese renminbi 2,715 862 3,577 2011 $000
ANNUAL REPORT 2012
89

FOR THE FINANCIAL YEAR ENDED 30 JUNE 2012 16. Deferred tax liabilities Group 2012 $000 Balance at beginning of financial year Charged to profit or loss Balance at end of financial year 78 14 92 2011 $000 78 78 2012 $000 15 15 Company 2011 $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. 17. Share capital Group and Company 2011 Number of ordinary 2012 shares $000
2012 Number of ordinary shares Issued and fully-paid: Balance at beginning and end of financial year
2011 $000
93,501,600
93,501,600
6,709
6,709
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. 18. Treasury shares Group and Company 2011 Number of ordinary 2012 shares $000 7 7
2012 Number of ordinary shares Issued and fully-paid: Balance at beginning of financial year Purchased during the financial year Balance at end of financial year 20,000 20,000
2011 $000
The Company purchased 20,000 of its own ordinary shares by way of on-market purchases at approximately $0.34 per ordinary share. The total amount paid to purchase the shares was approximately $7,000 and this is presented as a component within equity attributable to owners of the parent.
90
ANNUAL REPORT 2012

FOR THE FINANCIAL YEAR ENDED 30 JUNE 2012 19. Foreign currency translation account The foreign currency translation account 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. 20. Revenue Revenue represents the invoiced value of goods sold less goods returned, discounts allowed and goods and services tax. 21. Other income Group 2012 $000 Facilities fees Government grants Marketing income Sponsorship income Reversal of provision for reinstatement cost not utilised Membership fee income Others 300 113 234 639 58 221 259 1,824 2011 $000 300 3 146 622 30 264 1,365
22.
Finance costs Group 2012 $000 Interest expense bank borrowings finance lease payables 25 6 31 2 2 2011 $000
ANNUAL REPORT 2012
91

FOR THE FINANCIAL YEAR ENDED 30 JUNE 2012 23. Profit before income tax In addition to the charges and credits disclosed elsewhere in the notes to the consolidated statement of comprehensive income, the above includes the following charges: Group 2012 $000 Administrative expenses Allowance for inventory obsolescence 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 Inventories written off Audit fees paid to auditors auditors of the Company other auditors Non-audit fees paid to auditors auditors of the Company other auditors Operating lease expenses minimum lease payments contingent rents Plant and equipment written off 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 2,103 694 2,464 1,579 569 2,190 7,354 949 666 6,845 608 362 5,039 292 3,675 538 4 15 6 12 6 74 18 64 7 10 46 1,512 302 55 80 31 23 996 262 238 1 72 2011 $000
Included in the employee benefits expense were Directors remuneration as shown in Note 29 to the financial statements.
92
ANNUAL REPORT 2012

FOR THE FINANCIAL YEAR ENDED 30 JUNE 2012 24. Income tax expense Group 2012 $000 Current income tax current financial year over provision in prior financial years 255 (21) 234 Deferred income tax current financial year over provision in prior financial years 27 (13) 14 Total income tax expense recognised in profit or loss 248 983 1,006 (23) 983 2011 $000
Reconciliation of effective income tax rate Profit before income tax Income tax calculated at Singapores statutory income tax rate of 17% (2011: 17%) Effect of different income tax rate in other countries Tax effect of expenses not deductible for income tax purposes Tax effect of income not taxable for income tax purposes Singapores statutory stepped income tax exemption Deferred tax asset not recognised in profit or loss Over provision of current income tax in prior financial years Over provision of deferred tax in prior financial years Enhanced income tax deduction Others 146 (18) 419 (47) 13 (21) (13) (77) (154) 248 974 47 167 (19) (26) (23) (108) (29) 983 858 5,730
As at 30 June 2012, a subsidiary of the Group have potential tax benefits of approximately $52,000 (2011: $Nil) arising from unutilised tax losses which are available for set-off against future taxable profits for a period of 5 years from the year incurred. These tax benefits have not been recognised in the financial statements due to the uncertainty of the sufficiency of future taxable profits to be generated for this subsidiary in the foreseeable future. The use of these potential tax benefits is subject to the agreement of the tax authority and compliance with certain provisions of the tax legislation of the country in which the subsidiary operates.
ANNUAL REPORT 2012
93

FOR THE FINANCIAL YEAR ENDED 30 JUNE 2012 25. Earnings per share The calculation for earnings per share is based on: Group 2012 Profit for the financial year attributable to owners of the parent ($000) Weighted average (2011: Actual) number of ordinary shares Basic and diluted earnings per share (in cents) 984 93,500,230 1.05 2011 4,767 93,501,600 5.10
Basic earnings per share is calculated by dividing profit for the financial year attributable to owners of the parent by the weighted average (2011: 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. 26. Dividends Group and Company 2012 2011 $000 $000 Interim tax-exempt (one-tier) dividend declared and paid of $0.01 per share in respect of financial year ended 30 June 2011 Special one-off (one-tier) dividend declared and paid of $0.02 per share in respect of financial year ended 30 June 2011 First and final tax-exempt (one-tier) dividend declared and paid of $0.02 per share in respect of financial year ended 30 June 2010 Final tax-exempt (one-tier) dividend declared and paid of $0.02 per share in respect of financial year ended 30 June 2011 935
1,870
1,870
1,870 3,740
2,805
The Directors of the Company recommend a final tax-exempt dividend of $0.006 per share with an aggregate amount of approximately $561,000 to be paid in respect of the financial year ended 30 June 2012. These final tax-exempt 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. The proposed final and special one-off tax-exempt dividends in respect of the financial year ended 30 June 2011 have been accounted for in the shareholders equity as an appropriation of retained earnings in the current financial year.
94
ANNUAL REPORT 2012

FOR THE FINANCIAL YEAR ENDED 30 JUNE 2012 27. Operating lease commitments As at the end of the reporting period, there were operating lease commitments for rental payable in subsequent accounting periods as follows: Group 2012 $000 Within one financial year After one financial year but within five financial years 4,255 9,514 4,303 8,207 96 327 366 613 5,259 2011 $000 3,904 2012 $000 231 Company 2011 $000 247
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. 28. Contingent liabilities The Company has issued corporate guarantees to a bank for banking facilities granted to a subsidiary, Epicentre (Shanghai) Co., Ltd. These guarantees are financial guarantee contract as they require the Company to reimburse the banks if the subsidiary fails to make principal or interest payments when due in accordance with the terms of the facilities drawn. As at 30 June 2012, the total banking facilities granted to the subsidiary amounted to approximately $6,640,000 (2011: $Nil) and the amount utilised by the subsidiary amounted to approximately $862,000 (2011: $Nil). These financial guarantees have not been recognised in the financial statements of the Company as the requirements to reimburse are remote. As at end of the financial year, the Company has given written confirmation of its continued financial support to its subsidiaries Epicentre Solutions Pte. Ltd. and Epi Lifestyle Pte. Ltd. to enable these subsidiaries to meet their obligations as and when they fall due, such that they continue their operations on a going concern basis.
ANNUAL REPORT 2012
95

FOR THE FINANCIAL YEAR ENDED 30 JUNE 2012 29. Significant related party transactions A related party is defined as follows: (a) A person or a close member of that persons family is related to the Group and Company if that person: (i) (ii) (iii) Has control or joint control over the Company; Has significant influence over the Company; or Is a member of the key management personnel of the Group or Company or of a parent of the Company. (b) An entity is related to the Group and the Company if any of the following conditions applies: (i) The entity and the Company are members of the same group (which means that each parent, subsidiary and fellow subsidiary is related to the others); (ii) One entity is an associate or joint venture of the other entity (or an associate or joint venture of a member of a group of which the other entity is a member); (iii) (iv) (v) Both entities are joint ventures of the same third party; One entity is a joint ventures of a third entity and the other entity is an associate of the third entity; The entity is a post-employment benefit plan for the benefit of employees of either the Company is itself such a plan, the sponsoring employers are also related to the Company; (vi) (vii) The entity is controlled or jointly controlled by a person identified in (a); or A person identified in (a)(i) has significant influence over the entity or is a member of the key management personnel of the entity (or of a parent of the entity). The Groups and Companys transactions and arrangements with related parties and the effect of these on the basis determined between the parties is reflected in these financial statements.
96
ANNUAL REPORT 2012

FOR THE FINANCIAL YEAR ENDED 30 JUNE 2012 29. Significant related party transactions (Continued) During the year, in addition to those disclosed elsewhere in these financial statements, the Group and the Company entered into the following transactions with related parties: Company 2012 $000 With subsidiaries Advances made to a subsidiary Management fees charged to subsidiaries Settlement of liabilities on behalf of subsidiaries 8,640 5,231 2,834 5,008 5,912 34 2011 $000
Group 2012 $000 With a Director of the Company Payments made by a Director on behalf of the Company Rent expense paid to a Director 54 112 17 2011 $000 2012 $000
Company 2011 $000
112
Compensation of key management personnel The remuneration of the key management personnel who are also the Directors of the Group and of the Company during the financial year are as follows: Group and Company 2012 $000 Directors fees Short-term benefits Post-employment benefits 302 1,251 19 1,572 2011 $000 262 2,692 27 2,981
ANNUAL REPORT 2012
97

FOR THE FINANCIAL YEAR ENDED 30 JUNE 2012 30. 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 market strategies. 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 corporate expenses, non-recurring gains and losses. During the year, the Group has not allocated the corporate expenses, including employee benefits expense, professional fees and other administrative expenses to the respective segment as the management is of the opinion that there is no reasonable basis to allocate these expenses for the purpose of monitoring the operating results of the respective segment. Accordingly, the comparative figures of the segment information have been reclassified for consistency. With the reclassification, the corporate expenses of approximately $5,804,000 previously allocated to the respective segment is now included as unallocated in the segment information.
98
ANNUAL REPORT 2012

FOR THE FINANCIAL YEAR ENDED 30 JUNE 2012 30. Segment information (Continued) The Group accounts for inter-segment sales and transfers as if the sales or transfers were to third parties, which approximate market prices. These inter-segment transactions are eliminated on consolidation. Third party and proprietary brand Apple brand complementary products $000 2012 Revenue External revenue Inter-segment revenue 157,777 294 158,071 Results Segment results Unallocated expenses, net Finance costs Interest income Profit before income tax Other material non-cash expenses Allowance for inventory obsolescence Depreciation of plant and equipment Third parties trade receivables written off Inventories written off Reversal of provision for reinstatement cost not utilised Capital expenditure Plant and equipment Assets and liabilities Segment assets Segment liabilities 38,983 23,307 8,610 3,858 (8,444) (4,972) 39,149 22,193 2,232 370 2,602 50 8 58 (9) (1,297) (39) (69) (1) (215) (7) (11) (10) (1,512) (46) (80) 1,698 4,145 5,843 (4,959) (31) 5 858 26,111 166 26,277 (460) (460) 183,888 183,888 products $000 Elimination $000 Total $000
ANNUAL REPORT 2012
99

FOR THE FINANCIAL YEAR ENDED 30 JUNE 2012 30. Segment information (Continued) Third party and proprietary brand Apple brand complementary products $000 2011 Revenue External revenue Inter-segment revenue 138,703 485 139,188 Results Segment results Unallocated expenses, net Finance costs Interest income Profit before income tax Other material non-cash expenses Allowance for inventory obsolescence Third parties trade receivables written off Depreciation of plant and equipment Inventories written off Plant and equipment written off Reversal of provision for reinstatement cost not utilised Capital expenditure Plant and equipment Assets and liabilities Segment assets Segment liabilities 35,293 18,856 8,656 3,249 (9,875) (8,754) 34,074 13,351 1,443 249 1,692 26 4 30 (20) (737) (61) (3) (3) (127) (11) (1) (23) (996) (72) (4) (26) (5) (31) 7,216 4,307 11,523 (5,804) (2) 13 5,730 23,900 10 23,910 (495) (495) 162,603 162,603 products $000 Elimination $000 Total $000
100
ANNUAL REPORT 2012

FOR THE FINANCIAL YEAR ENDED 30 JUNE 2012 30. Segment information (Continued) Geographic information The Groups business segments operate in three main geographical areas. Revenue is based on the countries in which the customers are located. Revenue from external customers Peoples Republic of Singapore $000 2012 Revenue from external customers 148,019 33,515 2,354 183,888 Malaysia $000 China $000 Total $000
2011 Revenue from external customers 139,127 23,476 162,603
Location of non-current assets Peoples Republic of Singapore $000 2012 Non-current assets 2,304 410 1,115 3,829 Malaysia $000 China $000 Total $000
2011 Non-current assets 2,090 632 11 2,733
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.
ANNUAL REPORT 2012
101

FOR THE FINANCIAL YEAR ENDED 30 JUNE 2012 31. Financial instruments and financial risks 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. 31.1 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 $3,493,000 (2011: $6,431,000) 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 2012 $000 Not impaired Not past due Past due 61 to 90 days Past due more than 90 days Total trade receivables 3,783 93 248 4,124 2011 $000 3,488 132 24 3,644
102
31.
Financial instruments and financial risks (Continued)
31.2
Market risk
(i)
Foreign currency risk
Foreign currency risk arises from transactions denominated in currencies other than the respective functional currency of the entities within the Group. The currency that gives rise to the risk is primarily United States dollar. The 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
ANNUAL REPORT 2012
Group 2012 5,325 436 904 698 7,363 4,513 524 780 24 5,841 14,870 (12,199) 11,391 1,298 2,028 153 (2,891) (8,844) (416) (48) 12,953 (17,606) (161) (235) (235) (3,577) 10,674 188 1,959 132 (2,477) (14,110) (396) (623) (161) (2,715) (862)
Trade and other payables excluding Trade and Cash and deposits other cash placed by receivables equivalents customers $000 $000 $000 Finance lease payables $000 Bank borrowings $000 10,646 (13,486) 2,467 (655) (1,028) 12,778 (7,022) 2,392 129 8,277 (12,778) (2,392) (129) (10,646) (2,467) 655
Net financial assets/ (liabilities) denominated in the Net respective financial entities assets/ functional Currency (liabilities) currencies exposure $000 $000 $000 (13,486)
Singapore dollar United States dollar Ringgit Malaysia Chinese renminbi
2011 Singapore dollar United States dollar Ringgit Malaysia Chinese renminbi
(7,022)
31.
Financial instruments and financial risks (Continued)
31.2
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:
(Continued) Financial assets Net financial assets denominated in the Trade and Cash and Trade and Finance Net Companys functional currency $000 (3,194) Currency exposure $000 22 financial assets $000 3,194 22 3,216 lease payables $000 (161) (161) other payables $000 (459) (459) cash equivalents $000 257 22 279 other receivables $000 3,557 3,557 Financial liabilities
Company
2012
Singapore dollar
United States dollar
ANNUAL REPORT 2012
2011 6,496 6,496 3,124 (450) 1,218 (235) 1,906 (450) (235) 7,717 1,218 8,935 (7,717) 1,218
Singapore dollar
United States dollar
103
104
ANNUAL REPORT 2012

FOR THE FINANCIAL YEAR ENDED 30 JUNE 2012 31. Financial instruments and financial risks (Continued) 31.2 Market risk (Continued) (i) Foreign currency risk (Continued) Foreign currency sensitivity analysis The Groups and the Companys are mainly exposed to United States dollar. The following table details the Groups and the Companys sensitivity to a 5% increase and decrease in United States 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 2012 $000 United States dollar Strengthened 5% Weakened 5% (674) 674 2011 $000 (351) 351 2012 $000 1 (1) Company 2011 $000 60 (60)
The potential impact on profit or loss of the Group and the Company 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 The Groups exposure to market risk for changes in interest rates relates primarily to finance lease payables and bank borrowings as shown in Note 14 and Note 15 to the financial statements respectively. The Company has no significant exposure to market risk for changes in interest rates. The sensitivity analysis below has been determined based on the exposure to interest rate risks for financial liabilities as at the end of the reporting period. For floating rate liabilities, the analysis is prepared assuming amount of liability outstanding at the end of the reporting period was outstanding for the whole year. The sensitivity analysis assumes an instantaneous 0.5% change in the interest rates from the end of the reporting period, with all variables held constant. Group Increase/(Decrease) Profit or (loss) 2012 2011 $000 $000 Interest rate increased by 0.5% per annum decreased by 0.5% per annum (18) 18
ANNUAL REPORT 2012
105

FOR THE FINANCIAL YEAR ENDED 30 JUNE 2012 31. Financial instruments and financial risks (Continued) 31.3 Liquidity risk Liquidity risks refer to the risks in which the Group and the Company encounter difficulties in meeting short-term obligations. Liquidity risks are managed by matching the payment and receipt cycles. 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 Within one $000 Group 2012 Financial assets Non-interest bearing 20,316 20,316 but within five $000 After five Total $000 $000 financial year financial years financial years
Financial liabilities Non-interest bearing Variable interest bearing 18,203 3,671 21,874 180 180 18,203 3,851 22,054
2011 Financial assets Non-interest bearing Variable interest bearing 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
106
ANNUAL REPORT 2012

FOR THE FINANCIAL YEAR ENDED 30 JUNE 2012 31. Financial instruments and financial risks (Continued) 31.3 Liquidity risk (Continued) After one financial year Within one $000 Company 2012 Financial assets Non-interest bearing 3,836 3,836 but within five $000 After five Total $000 $000 financial year financial years financial years
Financial liabilities Non-interest bearing Variable interest bearing 459 84 543 87 87 459 171 630
2011 Financial assets Non-interest bearing Variable interest bearing 8,425 1,200 9,625 8,425 1,200 9,625
Financial liabilities Non-interest bearing Variable interest bearing 456 40 496 197 197 29 29 456 266 722
ANNUAL REPORT 2012
107

FOR THE FINANCIAL YEAR ENDED 30 JUNE 2012 32. 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 a 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. The gearing ratio is calculated as total borrowings divided by equity. Total borrowings consists of bank borrowings and finance lease payables. Total equity consists of share capital, treasury shares, foreign currency translation account, retained earnings and non-controlling interest. Group 2012 $000 Total borrowings Total equity 3,738 16,814 2011 $000 235 19,732 2012 $000 161 7,659 Company 2011 $000 235 11,183
Gearing ratio (%)
22
The Group and the Company are in compliance with all bank covenants for the financial years ended 30 June 2012 and 2011. The Group and the Company have no externally imposed capital requirements for the financial years ended 30 June 2012 and 2011. 33. Fair value of financial assets and financial liabilities The carrying amounts of the current financial assets and liabilities in the financial statements approximate their fair values due to the relative short-term maturity of these financial instruments. The fair values of non-current liabilities in relation to bank borrowings and finance lease payables are disclosed in Notes 14 and 15 to the financial statements.
108
ANNUAL REPORT 2012
AS AT 11 SEPTEMBER 2012 SHAREHOLDERS INFORMATION Total number of shares excluding treasury shares Class of Shares Voting Rights TREASURY SHARES Total number of shares held as treasury shares Voting Rights Percentage of holding against the total number of issued shares excluding treasury shares DISTRIBUTION OF SHAREHOLDINGS Size of Shareholding 1 1,000 10,001 1,000,001 999 10,000 1,000,000 and above Number of Shareholders 0 531 180 10 721 % 0.00 73.65 24.96 1.39 100.00 Number of Shares 0 2,358,000 11,373,000 79,750,600 93,481,600 % 0.00 2.52 12.17 85.31 100.00 : : : 20,000 None 0.02% : : : 93,481,600 Ordinary Shares One vote per ordinary share (excluding treasury shares)
TOP TWENTY SHAREHOLDERS No. 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20. Name of Shareholders HSBC (SINGAPORE) NOMINEES PTE LTD GOH ANN ANN JOHNSON ROWSLEY SPORTS PTE LTD CITIBANK NOMINEES SINGAPORE PTE LTD LAM WAI HENG LI CHOW CHIN HONG LEONG FINANCE NOMINEES PTE LTD LIM & TAN SECURITIES PTE LTD LEONG MEE WAN NARONG INTANATE BRENDA YEO RAFFLES NOMINEES (PTE) LTD CHEW BEE CHOO DBS NOMINEES PTE LTD LAI WENG KAY ONG JEK YAW RUPERT JAMES PHILIP MORTON TAY BOON HUAT LIM HO KEE MERRILL LYNCH (SINGAPORE) PTE LTD TOTAL Number of Shares 55,579,800 6,110,000 4,861,000 4,229,000 1,892,800 1,669,000 1,600,000 1,500,000 1,209,000 1,100,000 630,000 604,000 575,000 414,000 315,000 260,000 258,000 255,000 200,000 192,000 83,453,600 % 59.46 6.54 5.20 4.52 2.02 1.79 1.71 1.60 1.29 1.18 0.67 0.65 0.62 0.44 0.34 0.28 0.28 0.27 0.21 0.21 89.28
ANNUAL REPORT 2012
109
AS AT 11 SEPTEMBER 2012 SUBSTANTIAL SHAREHOLDERS (As recorded in the Register of Substantial Shareholders) Direct Interest Jimmy Fong Teck Loon Brenda Yeo
(2) (1)(2)
% 58.86 0.67 6.54 5.14
Deemed Interest 630,000 55,025,800 4,801,000 4,801,000 4,801,000
% 0.67 58.86 5.14 5.14 5.14
55,025,800 630,000 6,110,000 4,801,000
Johnson Goh Ann Ann Rowsley Sports Pte. Ltd. Rowsley Ltd(3) Garville Pte Ltd(3) Lim Eng Hock(3)
The percentage of shareholding above is computed based on the total issued shares of 93,481,600 excluding treasury shares.
Notes:
(1)
Mr Jimmy Fong Teck Loon has direct interest of 54,969,800 shares held by Credit Suisse AG Singapore through HSBC (Singapore) Nominees Pte Ltd.
(2)
Mr Jimmy Fong Teck Loon is deemed to be interested in the 630,000 shares held by his spouse, Ms Brenda Yeo, and vice versa by virtue of Section 7 of the Companies Act, Cap. 50.
(3)
Rowsley Ltd, Garville Pte Ltd and Lim Eng Hock are deemed to be interested in the 4,801,000 shares held by Rowsley Sports Pte. Ltd. by virtue of Section 7 of the Companies Act, Cap. 50.
PERCENTAGE OF SHAREHOLDING IN PUBLICS HANDS
28.68% of the Companys shares are held in the hands of public. Accordingly, the Company has complied with Rule 723 of the Listing Manual Section BL Rules of Catalist of the SGX-ST.
110
ANNUAL REPORT 2012
addendum
ADDENDUM DATED 10 OCTOBER 2012 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 2012. 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 Sapphire 3, Level II, Social Clubhouse, Orchid Country Club, 1 Orchid Club Road, Singapore 769162, on 25 October 2012 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 the Company, 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 2012. 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), RHT Capital Pte. Ltd. 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 Wong Chee Meng Lawrence with his address at Six Battery Road #10-01, Singapore 049909 and Telephone: 6381-6757.

(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
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DEFINITIONS For the purpose of this Addendum, the following definitions apply throughout unless otherwise requires: ACRA Act or Companies Act : : Accounting and Corporate Regulatory Authority Companies Act (Chapter 50) of Singapore, as amended, modified or supplemented from time to time This Addendum to Shareholders dated 10 October 2012 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 Sapphire 3, Level II, Social Clubhouse, Orchid Country Club, 1 Orchid Club Road, Singapore 769162, on 25 October 2012 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 of the Company, including executive, nonexecutive, independent and non-independent directors of the Company for the time being The provisions of Section A and Section B: Rules of Catalist of the SGXST of the Listing Manual (excluding the Best Practices Guide, the Code, and the Practice Notes) as amended, supplemented or modified from time to time The Central Depository (Pte) Limited Companies (Amendment) Act 2005 of Singapore
Addendum
Catalist Rules
CDP Companies Amendment Act 2005 Company or Epicentre Director EPS FY
: :
: : : :
Epicentre Holdings Limited A director of the Company Earnings per Share The financial year ended or ending 30 June (as the case may be) unless otherwise specified The Company and its subsidiaries, collectively
Group
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Latest Practicable Date : The latest practicable date prior to the printing of this Addendum, being 26 September 2012 The Listing Manual of the SGX-ST, as amended, modified or supplemented from time to time A day on which the SGX-ST is open for trading in securities The notice of AGM found in the annual report of the Company for 2012, for the purposes of considering and, if thought fit, passing with or without modifications, the resolutions as set out therein Net tangible assets of the Group The annual general meeting of the Company held on 28 October 2011 A securities account maintained by a Depositor with CDP but does not include a securities sub-account Catalist, a market regulated by the SGX-ST, formerly known as the SGX-ST Dealing and Automated Quotation System 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 General mandate to be given by the Shareholders to authorise the Directors to effect Share Buyback 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 Ordinary shares in the share capital of the Company and each a Share RHT Capital Pte. Ltd.
Listing Manual
Market Day Notice of AGM
: :
NTA October 2011 AGM Securities Account
: : :
SGX Catalist or Catalist
SGX-ST SGXNET Share Buyback
: : :
Share Buyback Mandate
Shareholders
Shares Sponsor
: :
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Substantial Shareholder : 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 The Singapore Code on Take-overs and Mergers, as amended or modified from time to time (a) 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
Take-over Code
Treasury Shares
(b)
Unit Share Market
The unit share market of the SGX-ST which allows trading of shares in single shares
Currencies, Units and Others S$ and cents or F % or per cent. : : Singapore dollars and cents, respectively Per centum or percentage
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.
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(Company Registration Number: 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) 10 October 2012 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 10 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 10). The purpose of this Addendum is to provide Shareholders with information relating to Resolution 10. 1. 1.1 THE PROPOSED RENEWAL OF THE SHARE BUYBACK MANDATE Background At the October 2011 AGM, Shareholders had approved, inter-alia, the renewal of a Share Buyback Mandate to enable the Company to purchase or otherwise acquire Shares. The Share Buyback Mandate which was previously approved on 28 October 2011 will expire on the date of the forthcoming AGM to be held on 25 October 2012. 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.
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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 necessarily 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 2011 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).
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Purely for illustrative purposes, on the basis of 93,481,600 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 9,348,160 (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 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).
(b)
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; all of the abovementioned persons shall be given a reasonable opportunity to accept the offers made; and 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;
(b)
(c)
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(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) whether the Share Buyback, if made, would have any effect on the listing of the Shares on the Catalist; (f) details of any Share Buyback made by the Company in the previous twelve (12) months (whether On-Market Purchases or Off-Market Purchase), 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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(b) in the case of Off-Market Purchase, 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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(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 delisted 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 2012, 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 93,481,600 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 9,348,160 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 9,348,160 Shares at the Maximum Price of approximately 0.403 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 9,348,160 Shares is approximately S$3,767,308. For illustrative purposes only, in the case of an Off-Market Purchase by the Company and assuming that the Company purchases or acquires the 9,348,160 Shares at the Maximum Price of approximately 0.461 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 9,348,160 Shares is approximately S$4,309,502.
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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 2012 are set out in the following pages. As at 30 June 2012 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 After Share Before Share Buyback (000) As at 30 June 2012 Total equity NTA(2) Current assets Current liabilities Working capital Total borrowings
(3)
Company After Share After Share Before Share Buyback (000) Buyback and cancelled (000) Buyback and held as Treasury Shares(1) (000) Buyback and held as Treasury Shares(1) (000)
Buyback and cancelled(1) (000)
16,814 16,591 35,423 22,177 13,246 3,738 93,481,600
13,047 12,824 33,539 24,061 9,478 5,622 84,133,440
13,047 12,824 33,539 24,061 9,478 5,622 93,481,600
7,659 7,436 3,913 588 3,325 161 93,481,600
3,892 3,669 2,029 2,472 (442) 2,045 84,133,440
3,892 3,669 2,029 2,472 (442) 2,045 93,481,600
Number of Shares(4) Financial ratios NTA per Share (cents) Gearing (%) Current Ratio(6) (times)
Notes: (1)
(5)
17.75 22.23 1.60
15.24 43.09 1.39
13.72 43.09 1.39
7.95 2.10 6.65
4.36 52.54 0.82
3.92 52.54 0.82
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.
(2) (3) (4) (5) (6) (7)
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 93,481,600 Shares as at 30 June 2012. 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.
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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 After Share Before Share Buyback (000) As at 30 June 2012 Total equity NTA
(2)
Company After Share After Share Before Share Buyback (000) Buyback and cancelled (000) Buyback and held as Treasury Shares(1) (000) Buyback and held as Treasury
(1)
Buyback and cancelled (000)
Shares (000)
(1)
16,814 16,591 35,423 22,177 13,246

(3)
12,504 12,281 33,268 24,332 8,936 5,893 84,133,440
12,504 12,281 33,268 24,332 8,936 5,893 93,481,600
7,659 7,436 3,913 588 3,325 161 93,481,600
3,349 3,126 1,758 2,743 (985) 2,316 84,133,440
3,349 3,126 1,758 2,743 (985) 2,316 93,481,600
Current assets Current liabilities Working capital Total borrowings Number of Shares(4) Financial ratios NTA per Share (cents) Gearing(5)(%) Current Ratio(6) (times)
Notes: (1)
3,738 93,481,600
17.75 22.23 1.61
14.60 47.13 1.37
13.14 47.13 1.37
7.95 2.10 6.65
3.72 69.15 0.64
3.34 69.15 0.64
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.
(2) (3) (4) (5) (6) (7)
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 93,481,600 Shares as at 30 June 2012. 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.
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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 2012 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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addendum
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(19) of the Catalist Rules, the Company will not purchase or acquire any Shares through OnMarket 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 26,744,800 Shares in the hands of the public (as defined above), representing approximately 28.63 per cent. 28.63% 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 9,348,160 Shares, the resultant percentage of the issued Shares held by public Shareholders would be reduced to approximately 18.61 per cent. 18.61%. 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 (1) a company with any of its Directors; and (2) 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.
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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 93,481,600 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 9,348,160 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 9,348,160 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 2012
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addendum
Before the Share Buyback Direct Interest No. of Shares Directors Jimmy Fong Teck Loon(1)(2) Brenda Yeo(2) Siow Chee Keong Substantial Shareholders Johnson Goh Ann Ann Rowsley Sports Pte. Ltd. Rowsley Ltd(3) Garville Pte Ltd(3) Lim Eng Hock(3)
Notes: (1) Mr Jimmy Fong Teck Loon has direct interest of 54,969,800 shares held by Credit Suisse AG Singapore through HSBC (Singapore) Nominees Pte Ltd. (2) Mr Jimmy Fong Teck Loon is deemed to be interested in the 630,000 shares held by his spouse, Ms Brenda Yeo, and vice versa by virtue of Section 7 of the Companies Act, Cap. 50. (3) Rowsley Ltd, Garville Pte Ltd and Lim Eng Hock are deemed to be interested in the 4,801,000 shares held by Rowsley Sports Pte. Ltd. by virtue of Section 7 of the Companies Act, Cap. 50.
After the Share Buyback Direct Interest No. of % Shares % Deemed Interest No. of Shares %
Deemed Interest No. of Shares
55,025,800 58.86 630,000 100,000 0.11
630,000
0.67 55,025,800 65.40 630,000 100,000 0.00 0.12
630,000
0.75
0.67 55,025,800 58.86
0.75 55,025,800 65.40
6,110,000 4,801,000
6.54 5.14 0.00 0.00 0.00
4,801,000 4,801,000 4,801,000
0.00 0.00 5.14 5.14 5.14
6,110,000 4,801,000
7.26 5.71
4,801,000 4,801,000 4,801,000
5.71 5.71 5.71
1.10
Details of Shares Purchased or Acquired in the Previous Twelve Months In the 12 months preceding the Latest Practicable Date, the Company has acquired its Shares by way of Market Purchases pursuant to the Share Buyback Mandate. Details of the purchase are set out below: Total number Date of Purchase of Shares purchased Purchase price per Shares ($) 06/06/2012 20,000 0.33675 Highest price per Share ($) 0.34 0.33 Lowest Price per Share Total consideration (excluding stamp duties, clearing charges, etc) ($) 6,735.00
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.
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addendum
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. Directors Interests Direct interest No. of Shares Directors Jimmy Fong Teck Loon(1)(2) Brenda Yeo(2) Siow Chee Keong Substantial Shareholders Interests Direct interest No. of Shares % Deemed interest No. of Shares % 55,025,800 630,000 100,000 58.86 0.67 0.11 630,000 55,025,800
0.67
Deemed interest No. of Shares %
58.86
Johnson Goh Ann Ann Rowsley Sports Pte. Ltd. Rowsley Ltd(3) Garville Pte Ltd(3) Lim Eng Hock(3)
Notes: (1)
6,110,000 4,801,000
6.54 5.14 0.00 0.00 0.00
4,801,000 4,801,000 4,801,000
0.00 0.00 5.14 5.14 5.14
Mr Jimmy Fong Teck Loon has direct interest of 54,969,800 shares held by Credit Suisse AG Singapore through HSBC (Singapore) Nominees Pte Ltd.
(2)
Mr Jimmy Fong Teck Loon is deemed to be interested in the 630,000 shares held by his spouse, Ms Brenda Yeo and vice versa by virtue of Section 7 of the Companies Act, Cap. 50.
(3)
Rowsley Ltd, Garville Pte Ltd and Lim Eng Hock are deemed to be interested in the 4,801,000 shares held by Rowsley Sports Pte. Ltd. by virtue of Section 7 of the Companies Act, Cap. 50.
3.
ACTION 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.
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addendum
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. 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 10 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 FY2012 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 of Epicentre Holdings Limited
Jimmy Fong Teck Loon Executive Chairman and Chief Executive Officer
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ANNUAL REPORT 2012
notice of annual general meeting

NOTICE IS HEREBY GIVEN that the Annual General Meeting of Epicentre Holdings Limited (the Company) will be held at Sapphire 3, Level II, Social Clubhouse, Orchid Country Club, 1 Orchid Club Road Singapore 769162, on Thursday, 25 October 2012 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 2012 together with the Auditors Report thereon. (Resolution 1) To declare a tax exempt one-tier final dividend of 0.6 Singapore cents per ordinary share for the financial year ended 30 June 2012 (2011: 2 Singapore cents per ordinary share). (Resolution 2) To re-elect the following Directors of the Company retiring pursuant to Article 93 of the Articles of Association of the Company: Mr Siow Chee Keong Mr Ron Tan Aik Ti [See Explanatory Note (i)] 4. (Retiring under Article 93) (Retiring under Article 93) (Resolution 3) (Resolution 4)
2.
3.
To approve the payment of Directors Fees of S$245,000 for the financial year ended 30 June 2012 (2011: S$261,668). (Resolution 5) To re-appoint Messrs BDO LLP, Certified Public Accountants, as the Auditors of the Company and to authorise the Directors of the Company to fix their remuneration. (Resolution 6) To transact any other ordinary business which may properly be transacted at the Annual General Meeting.
5.
6.
AS SPECIAL BUSINESS To consider and if thought fit, to pass the following resolutions as Ordinary Resolutions, with or without any modifications: 7. 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
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(b) (notwithstanding the authority conferred by this Resolution may have ceased to be in force) issue shares in pursuant 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 pursuant of the Instruments, made or granted pursuant to this Resolution) and Instruments to be issued pursuant to this Resolution shall not exceed one hundred per centum (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 fifty per centum (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 total 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) (b) new shares arising from the conversion or exercise of the Instruments or any convertible securities; 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 7)
[See Explanatory Note (ii)]
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ANNUAL REPORT 2012

8. 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 share 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 share 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 8) [See Explanatory Note (iii)] 9. 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 SGX-ST, 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 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 9) [See Explanatory Note (iv)] 10. Renewal of Share Buyback Mandate That for the purposes of Sections 76C and 76E of the Companies Act, Cap. 50, the Directors of the Company be and are hereby authorised to make purchases or otherwise acquire issued shares in the capital of the Company from time to time (whether by way of market purchases or off-market purchases on an equal access scheme) of up to ten per centum (10%) of the total number of issued shares (excluding treasury shares) in the capital of the Company (as ascertained as at the date of Annual General Meeting of the Company) at the price of up to but not exceeding the Maximum Price as defined in the Addendum to shareholders dated 10 October 2012 (the Addendum, in accordance with the Terms of the Share Purchase Mandate set out in the Addendum, and this mandate shall, unless revoked or varied by the Company in 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 (v)]
By Order of the Board
Chew Kok Liang Yun Chee Keen Joint Company Secretaries Singapore 10 October 2012
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133

Explanatory Notes: (i) Mr Siow Chee Keong will, upon re-election as a Director of the Company, remain as Chairman of the Audit Committee, a member of the Nominating Committee and Remuneration Committee respectively and will be considered independent. Mr Ron Tan Aik Ti will, upon re-election as a Director of the Company, remain as Chairman of the Remuneration Committee, a member of the Audit Committee and Nominating Committee respectively and will be considered independent. (ii) Resolution 7 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, one hundred per centum (100%) of the total number of issued shares (excluding treasury shares) in the capital of the Company, of which up to fifty per centum (50%) may be issued other than on a pro rata basis to existing shareholders of the Company. For determining the aggregate number of shares that may be issued, the percentage of issued shares in the capital of the Company will be calculated based on the total number of issued shares (excluding treasury shares) in the capital of the Company at the time this Resolution is passed after adjusting for new shares arising from the conversion or exercise of the Instruments or any convertible securities, the exercise of share options or the vesting of share awards outstanding or subsisting at the time when this Resolution is passed and any subsequent consolidation or subdivision of shares. (iii) Resolution 8 above, if passed, will empower the Directors of the Company, from the date of this Annual General 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 share awards under the Plan provided that the aggregate additional shares to be issued pursuant to the Plan do not exceeding in total (for the entire duration of the Scheme) fifteen per centum (15%) of the total number of issued shares (excluding treasury shares) in the capital of the Company from time to time. (iv) Resolution 9 above, if passed, will empower the Directors of the Company, from the date of this Annual General 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 Limited Scrip Dividend Scheme. (v) Resolution 10 above, if passed, will empower the Directors of the Company from the date of this Annual General 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 purchase ordinary shares of the Company by way of market purchases or off-market purchases of up to ten per centum (10%) of the total number of issued shares (excluding treasury shares) in the capital of the Company up to the Maximum Price as defined in Addendum. The rationale for, the authority and limitation on, the sources of funds to be used for the purchase or acquisition including the amount of financing and the financial effects of the purchase or acquisition of ordinary shares by the Company pursuant to the Share Purchase Mandate on the audited consolidated financial statements of the Company for the financial year ended 30 June 2012 are set out in greater detail in the Addendum.
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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, #0704, Clarus Centre, Singapore 577177 not less than forty-eight (48) hours before the time appointed for holding the Meeting. 4. This notice has been reviewed by the Companys Sponsor, RHT Capital Pte. Ltd., for compliance with the relevant rules of the Singapore Exchange Securities Trading Limited (SGX-ST). The Companys Sponsor has not independently verified the contents of this notice. This notice has not been examined or approved by the SGX-ST and the SGX-ST 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: Name: Mr Wong Chee Meng Lawrence, Registered Professional, RHT Capital Pte. Ltd. Address: Six Battery Road #10-01, Singapore 049909 Tel: 6381 6757
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 7 November 2012 for the purpose of determining the members entitlements to the tax exempt one tier final dividend to be proposed at the Annual General Meeting of the Company to be held on 25 October 2012. 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 7 November 2012 will be registered to determine members entitlements to such dividend. Member whose Securities Accounts with The Central Depository (Pte) Ltd are credited with shares of the Company as at 5.00 p.m. on 7 November 2012 will be entitled to such proposed dividend. Payment of the said dividend, if approved by the members at the Annual General Meeting, will be paid on 21 November 2012.
By Order of the Board
Chew Kok Liang Yun Chee Keen Joint Company Secretaries Singapore 10 October 2012

(Company Registration No. 200202930G) (Incorporated in the Republic of Singapore)
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. 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. 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.
PROXY FORM
(Please see notes overleaf before completing this Form)
2.
3.
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 Sapphire 3, Level II, Social Clubhouse, Orchid Country Club, 1 Orchid Club Road, Singapore 769162, Thursday, 25 October 2012 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. Ordinary Business 1 2 3 4 5 6 7 8 9 10 Directors Report and Audited Accounts for the financial year ended 30 June 2012 Payment of proposed tax exempt one-tier final dividend of 0.6 Singapore cents per ordinary share for the financial year ended 30 June 2012 Re-election of Mr Siow Chee Keong as a Director Re-election of Mr Ron Tan Aik Ti as a Director Approval of Directors Fees amounting to S$245,000 Re-appointment of Messrs BDO LLP as Auditors Authority to issue shares Authority to issue shares under the Epicentre Holdings Limited Performance Share Plan Authority to issue shares under the Epicentre Holdings Limited Scrip Dividend Scheme Renewal of Share Buyback Mandate day of 2012 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 Resolutions relating to: For Against
Special Business
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. 2. A member of the Company entitled to attend and vote at a meeting of the Company is entitled to appoint one or two proxies to attend and vote in his/her stead. A proxy need not be a member of the Company. 3. Where a member appoints 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. 4. Completion and return of this instrument appointing a proxy shall not preclude a member from attending and voting at the Meeting. Any appointment of a proxy or proxies shall be deemed to be revoked if a member attends the meeting in person, and in such event, the Company reserves the right to refuse to admit any person or persons appointed under the instrument of proxy to the Meeting. 5. The instrument appointing a proxy or proxies must be deposited at the registered office of the Company at 37, Jalan Pemimpin, #07-04 Clarus Centre, Singapore 577177 not less than forty-eight (48) hours before the time appointed for the Meeting. 6. The instrument appointing a proxy or proxies must be under the hand of the appointor or of his/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. 7. A corporation which is a member may authorise by resolution of its directors or other governing body such person as it thinks fit to act as its representative at the Meeting, in accordance with Section 179 of the Companies Act, Chapter 50 of Singapore.
General: The Company shall be entitled to reject the instrument appointing a proxy or proxies if it is incomplete, improperly completed or illegible, or where the true intentions of the appointor are not ascertainable from the instructions of the appointor specified in the instrument appointing a proxy or proxies. In addition, in the case of Shares entered in the Depository Register, the Company may reject any instrument appointing a proxy or proxies lodged if the member, being the appointor, is not shown to have Shares entered against his/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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37 Jalan Pemimpin #07-04 Clarus Centre Singapore 577177 Telephone: +65 6601 9100 Facsimile: +65 6601 9111 Website: www.epicentreasia.com
SINGAPORE | MALAYSIA | CHINA

Epicentre Holdings Limited

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