LETTER DATED 1 OCTOBER 2015

This letter to shareholders of the Company is circulated to the shareholders of Raffles Education
Corporation Limited (the Company) together with the Annual Report 2015 (as defined herein).
Its purpose is to provide the shareholders of the Company with information relating to, and
to explain the rationale for, the proposed renewal of the Share Purchase Mandate (as defined
herein) to be tabled at the annual general meeting of the Company to be held on 19 October
2015 at 10.30 a.m. at Cinnamon Room, Level 5, Novotel Singapore Clarke Quay, 177A River
Valley Road, Singapore 179031 (the AGM).
If you are in any doubt in relation to this letter to shareholders of the Company or as to
the course of action you should take, you should consult your stockbroker, bank manager,
solicitor, accountant or other professional adviser immediately.
The Ordinary Resolution (as defined herein) proposed to be passed in respect of the renewal of
the Share Purchase Mandate is set out in the Notice of AGM (as defined herein).
Singapore Exchange Securities Trading Limited assumes no responsibility for the correctness of
any of the statements made, reports contained or opinions expressed in this Letter.

RAFFLES EDUCATION CORPORATION LIMITED

(Incorporated in the Republic of Singapore)
(Company Registration Number: 199400712N)

LETTER TO SHAREHOLDERS IN RELATION TO

THE PROPOSED RENEWAL OF THE SHARE PURCHASE MANDATE

TABLE OF CONTENTS
DEFINITIONS.............................................................................................................................

1.

INTRODUCTION..............................................................................................................

12

2.

THE PROPOSED RENEWAL OF THE SHARE PURCHASE MANDATE .........................

12

3.

DIRECTORS AND SUBSTANTIAL SHAREHOLDERS INTEREST .................................

30

4.

DIRECTORS RECOMMENDATIONS ..............................................................................

31

5.

ANNUAL GENERAL MEETING .......................................................................................

31

6.

ABSTENTION FROM VOTING ........................................................................................

31

7.

RESPONSIBILITY STATEMENT ......................................................................................

32

8.

DOCUMENTS FOR INSPECTION ...................................................................................

32

DEFINITIONS
In this Letter, the following definitions apply throughout unless the context requires or otherwise
stated:
AGM

The annual general meeting of the Company to be held

on 19 October 2015 at 10.30 a.m. at Cinnamon Room,
Level 5, Novotel Singapore Clarke Quay, 177A River
Valley Road, Singapore 179031, notice of which is
enclosed with the Annual Report 2015

Annual Report 2015

The annual report of the Company for the financial year

ended 30 June 2015

Articles of Association

The articles of association of the Company for the time

being in force, as amended or modified from time to
time

Average Closing Price

Has the meaning ascribed to it under paragraph 2.3.4 of

this Letter

Awards

A contingent award of Shares granted under the REC

PSP 2008

Board

The board of Directors

CAA

The Companies (Amendment) Act passed on 8 October

2014

CDP

The Central Depository (Pte) Limited

Companies Act

The Companies Act (Chapter 50) of Singapore, as

amended or modified from time to time

Company

Raffles Education Corporation Limited

concert parties

Has the meaning ascribed to it under paragraph 2.9.2 of

this Letter

day of the making of the offer :

Has the meaning ascribed to it under paragraph 2.3.4 of

this Letter

Directors

The directors of the Company as at the date of this

Letter

EPS

Earnings per Share

Group

The Company and its subsidiaries

Latest Practicable Date

The latest practicable date prior to the printing of this

Letter, being 16 September 2015

Letter

This letter to Shareholders dated 1 October 2015

Listing Manual

The listing manual of the SGX-ST as may be amended,

supplemented or modified from time to time

Market Day

A day on which the SGX-ST is open for trading in

securities

Market Purchase

Has the meaning ascribed to it under paragraph 2.3.3 of

this Letter

Maximum Price

Has the meaning ascribed to it under paragraph 2.3.4 of

this Letter

Memorandum

The memorandum of association of the Company for the

time being in force, as amended or modified from time
to time

NAV

Net asset value

Notice of AGM

The notice of the AGM, as enclosed with the Annual

Report 2015

Off-Market Purchase

Has the meaning ascribed to it under paragraph 2.3.3 of

this Letter

Ordinary Resolution

The ordinary resolution relating to the renewal of the

Share Purchase Mandate

Proxy Form

The proxy form in respect of the AGM as sent with the

Notice of AGM

public

Has the meaning ascribed to it in the Listing Manual

REC ESOS 2001

The employee share option scheme of the Company

known as Raffles Education Corp Employees Share
Option Scheme (Year 2001) which was approved on 28
August 2000.

REC ESOS 2011

The employee share option scheme of the Company

known as Raffles Education Corporation Employees
Share Option Scheme (Year 2011) which was approved
on 23 March 2011
9

REC PSP 2008

The performance share plan of the Company known as

Raffles Education Corporation Performance Share Plan
which was approved on 5 March 2008

Register

The register maintained by the Company setting

out details of the Shareholders and their respective
shareholdings

Relevant Period

The period commencing from the date of the AGM,

being the date on which the Ordinary Resolution is
passed (if approved by Shareholders), and expiring on
the date on which the next annual general meeting of
the Company is held or is required by law to be held,
whichever is earlier

Securities Account

A securities account maintained by a depositor with

CDP but does not include a securities sub-account

SIC

Securities Industry Council of Singapore

SGX-ST

Singapore Exchange Securities Trading Limited

Shareholders

Registered holders of Shares in the Register, except

that where the registered holder is CDP, the term
Shareholders shall, where the context admits, means
the persons named as depositors in the Depository
Register maintained by CDP and into whose Securities
Accounts those Shares are credited

Share Options

Options to subscribe for new Shares granted pursuant

to the REC ESOS 2001 or the REC ESOS 2011

Share Purchase Mandate

General and unconditional mandate given by

Shareholders to authorise the Directors to purchase or
otherwise acquire, on behalf of the Company, Shares
in accordance with the terms set out in the Ordinary
Resolution, as more particularly described in this Letter,
and in accordance with the rules and regulations set
forth in the Companies Act and the Listing Manual

Shares

Ordinary shares in the capital of the Company

Take-over Code

The Singapore Code on Take-overs and Mergers, as

amended or modified from time to time

S$ and cents

Singapore dollars and cents respectively

Percentage

10

The terms depositor and Depository Register shall have the meanings ascribed to them
respectively in Section 130A of the Companies Act.
Words importing the singular shall, where applicable, include the plural and vice versa.
Words importing the masculine gender shall, where applicable, include the feminine and
neuter genders. References to persons shall, where applicable, include individuals, firms and
corporations.
Any reference to a time of day and to dates in this Letter is made by reference to Singapore
time and dates unless otherwise stated.
Any reference in this Letter to any statute or enactment is a reference to any statute or
enactment as for the time being amended or re-enacted. Any term defined under the
Companies Act, the Listing Manual, the Take-over Code or any modification thereof and used in
this Letter shall have the meaning assigned to it under the Companies Act, the Listing Manual,
the Take-over Code or any modification thereof, as the case may be, unless otherwise provided.
Summaries of the provisions of any laws and regulations (including the Take-over Code and the
Listing Manual) contained in this Letter are of such laws and regulations (including the Take-over
Code and the Listing Manual) as at the Latest Practicable Date.
The headings in this Letter are inserted for convenience only and shall be ignored in construing
this Letter.
Any discrepancies in the tables in this Letter between the listed amounts and the totals thereof
are due to rounding. Accordingly, figures shown as totals in certain tables may not be an
arithmetic aggregation of the figures that precede them.

11

RAFFLES EDUCATION CORPORATION LIMITED

(Incorporated in the Republic of Singapore)
(Company Registration Number: 199400712N)

Directors

Registered Office

Mr Chew Hua Seng (Chairman and Chief Executive Officer)

51 Merchant Road
Mr Henry Tan Song Kok (Lead Independent Director)
Raffles Education Square
Mr Lim Tien Lock, Christopher (Independent Director)
Singapore 058283
Dr Tan Chin Nam (Independent Director)
Mr Teo Cheng Lok John (Independent Director)
Mr Chew Kok Chor (Executive Director and Deputy Chief Executive Officer)

1 October 2015
To:

The Shareholders of Raffles Education Corporation Limited

Dear Sir/Madam
1.

INTRODUCTION

1.1

The Directors have issued the Notice of AGM convening the AGM. Item 9 appearing under
the heading As Special Business in the Notice of AGM is the Ordinary Resolution for the
renewal of the Share Purchase Mandate.

1.2

The purpose of this Letter is to provide Shareholders with information relating to the
proposed renewal of the Share Purchase Mandate to be tabled at the AGM and to seek
Shareholders approval for the proposed renewal of the Share Purchase Mandate at the
AGM.

1.3

The SGX-ST assumes no responsibility for the correctness of any of the statements made,
reports contained or opinions expressed in this Letter.

2.

THE PROPOSED RENEWAL OF THE SHARE PURCHASE MANDATE

2.1

The Proposed Renewal of the Share Purchase Mandate

It is a requirement under the Companies Act that a company which wishes to purchase
or otherwise acquire its own shares has to obtain the approval of its shareholders to do
so at a general meeting of its shareholders. It is also a requirement under the Listing
Manual that an issuer who wishes to purchase its own shares has to obtain approval
of its shareholders to do so at a general meeting of its shareholders. In this regard, the
Share Purchase Mandate was first approved at the extraordinary general meeting of the
Company held on 5 March 2008 and last renewed at the annual general meeting held on
27 October 2014.
Unless renewed again, the Share Purchase Mandate will expire on the date of the AGM. In
this regard, it is proposed that the Share Purchase Mandate be tabled to Shareholders for
renewal and approval at the AGM.

12

2.2

Rationale for the Proposed Renewal of the Share Purchase Mandate

The approval of the renewal of the Share Purchase Mandate authorising the Company to
purchase or acquire its Shares would give the Company the flexibility to undertake Share
purchases or acquisitions up to the 10% limit as described in paragraph 2.3.1 below,
at any time, subject to market conditions, during the period when the Share Purchase
Mandate is in force.
The rationale for the Company to undertake the purchase or acquisition of its issued
Shares is as follows:
(a)

in managing the business of the Group, the management team strives to increase
Shareholders value by improving, inter alia, the return on equity of the Group. Share
purchase may be considered as one of the ways through which the return on equity
of the Group may be enhanced;

(b)

the Share Purchase Mandate would provide the Company with the flexibility to
purchase or acquire the Shares if and when circumstances permit, during the period
when the Share Purchase Mandate is in force. The Share Purchase Mandate is an
expedient, effective and cost-efficient way for the Company to return surplus cash/
funds over and above its ordinary capital requirements, if any, which are in excess
of the financial and possible investment needs of the Group to its Shareholders,
taking into account its growth and expansion plans. In addition, the Share Purchase
Mandate will allow the Company to have greater flexibility over, inter alia, the
Companys share capital structure and dividend policy;

(c)

the purchase or acquisition of Shares under the Share Purchase Mandate may
help to mitigate short-term share price volatility (by way of stabilising the supply
and demand of issued Shares) and off-set the effects of short-term share price
speculation, supporting the fundamental value of the issued Shares, thereby boosting
Shareholders confidence and employees morale; and

(d)

under the REC ESOS 2011 and the REC PSP 2008, subject to prevailing legislation,
the Memorandum, the Articles of Association and the Listing Manual, the Company
has the discretion whether to issue new Shares, deemed fully paid upon issuance
and allotment or transfer existing Shares (whether held as treasury shares or
otherwise) to such participants who have exercised their Share Options under the
REC ESOS 2011 or, as the case may be, hold released Awards under the REC PSP
2008. Shares bought back under the Share Purchase Mandate can therefore be held
by the Company as treasury shares to satisfy the Companys obligation to furnish
Shares to (i) participants under the REC ESOS 2011; and (ii) participants holding
Awards under the REC PSP 2008, thus giving the Company greater flexibility to
select the method of providing Shares to employees most beneficial to the Company
and its Shareholders.

While the Share Purchase Mandate would authorise a purchase or acquisition of Shares
up to the said 10% limit during the duration referred to in paragraph 2.3.2 below,
Shareholders should note that purchases or acquisitions of Shares pursuant to the
Share Purchase Mandate may not be carried out to the full 10% limit as authorised and
the purchases or acquisitions of Shares pursuant to the Share Purchase Mandate would
be made only as and when the Directors consider it to be in the best interests of the
Company and/or Shareholders and in circumstances which they believe will not result in
any material adverse effect on the financial condition of the Company or the Group, or
result in the Company being delisted from the SGX-ST. The Directors will use their best

13

efforts to ensure that after a purchase or acquisition of Shares pursuant to the Share
Purchase Mandate, the number of Shares remaining in the hands of the public will not
fall to such a level as to cause market illiquidity or adversely affect the orderly trading and
listing status of the Shares on the SGX-ST.
2.3

Authority and Limits on the Share Purchase Mandate

The authority and limitations placed on Share purchases or acquisitions of Shares by the
Company under the proposed Share Purchase Mandate are summarised below:
2.3.1 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 which may be purchased or acquired pursuant
to the Share Purchase Mandate is limited to that number of Shares representing not
more than 10% of the total number of issued Shares (excluding treasury shares)
as at the date of the AGM at which the renewal of the Share Purchase Mandate is
approved, unless the Company has, at any time during the Relevant Period, reduced
its share capital by a special resolution under Section 78C of the Companies Act,
or the court has, at any time during the Relevant Period, made an order under
Section 78I confirming the reduction of share capital of the Company, in which
event the total number of issued Shares shall be taken to be the total number of
issued Shares as altered by the special resolution of the Company or the order of
the court, as the case may be. Any Shares which are held as treasury shares will be
disregarded for purposes of computing the 10% limit.
For illustrative purposes only, based on the general rule in the foregoing paragraph,
on the basis of 977,667,033 Shares in issue (excluding treasury shares) as at the
Latest Practicable Date and assuming no further Shares are issued on or prior to the
AGM, not more than 97,766,703 Shares (representing 10% of the total number of
issued Shares (excluding treasury shares) as at that date) may be purchased by the
Company pursuant to the proposed Share Purchase Mandate during the Relevant
Period.
As at the Latest Practicable Date, there are 2,860,265 outstanding Share Options
under the REC ESOS 2001 and the REC ESOS 2011, of which Share Options
comprising 2,860,265 Shares are exercisable as at the Latest Practicable Date. In
the event that the Company issues 2,860,265 new Shares pursuant to the exercise of
the exercisable Share Options, the total number of issued Shares (excluding treasury
shares) as at the date of the AGM will be 980,527,298, and not more than 98,052,729
Shares (representing 10% of the total number of issued Shares (excluding treasury
shares) as at that date) may be purchased by the Company pursuant to the proposed
Share Purchase Mandate during the period when the Share Purchase Mandate is in
force.
2.3.2 Duration of Authority
Purchases or acquisitions of Shares pursuant to the Share Purchase Mandate may
be made, at any time and from time to time, on and from the date of the AGM, at
which the renewal of the Share Purchase Mandate is approved, up to:
(a)

the date on which the next annual general meeting of the Company is held or
required by law to be held;

14

(b)

the date on which the purchases or acquisitions of Shares pursuant to the

Share Purchase Mandate are carried out to the full extent mandated; or

(c)

the date on which the authority conferred by the Share Purchase Mandate is
revoked or varied by the Shareholders in a general meeting,

whichever is the earliest.

The authority conferred on the Directors by the Share Purchase Mandate to purchase
or acquire Shares may be renewed by the Shareholders in a general meeting of the
Company, such as at the next annual general meeting or at an extraordinary general
meeting to be convened immediately after the conclusion or adjournment of the
next annual general meeting. When seeking the approval of the Shareholders for the
renewal of the Share Purchase Mandate, the Company is required to disclose details
pertaining to purchases or acquisitions of Shares pursuant to the proposed Share
Purchase Mandate made during the previous 12 months, including the total number
of Shares purchased or acquired, the purchase price per Share or the highest and
lowest prices paid for such purchases or acquisitions of Shares, where relevant, and
the total consideration paid for such purchases or acquisitions.
2.3.3 Manner of Purchases or Acquisitions of Shares
Purchases or acquisitions of Shares may be made by way of:
(a)

an on-market purchase (Market Purchase), transacted on the SGX-ST

through the ready market, and which may be transacted through one or more
duly licensed stock brokers appointed by the Company for the purpose, in
accordance with Section 76E of the Companies Act; and/or

(b)

an off-market purchase (Off-Market Purchase) effected pursuant to an equal

access scheme1 in accordance with Section 76C of the Companies Act.

The Directors may impose such terms and conditions which are not inconsistent
with the Share Purchase Mandate, the Listing Manual, the Companies Act, the
Memorandum and the Articles of Association as they consider fit in the interests
of the Company in connection with or in relation to any equal access scheme or
schemes.
An Off-Market Purchase must however satisfy all of the following conditions:

(i)

offers for the purchase or acquisition of Shares shall be made to every person
who holds Shares to purchase or acquire the same percentage of their Shares;

(ii)

all of the abovementioned persons shall be given a reasonable opportunity to

accept the offers made; and

With effect from 1 July 2015, a selective off-market purchase or acquisition of shares may be undertaken by a Singapore
company that is listed on a securities exchange in accordance with the provisions of the Companies Act. However, Rule
882 of the Listing Manual provides that an off-market purchase or acquisition of shares may only be made in accordance
with an equal access scheme as defined in the Companies Act.

15

(iii)

the terms of all the offers shall be the same, except that there shall be
disregarded, where applicable:
(A)

differences in consideration attributable to the fact that offers may relate

to Shares with different accrued dividend entitlements;

(B)

differences in consideration attributable to the fact that offers relate to

Shares with different amounts remaining unpaid (if applicable); and

(C)

differences in the offers introduced solely to ensure that each person is

left with a whole number of Shares.

Pursuant to the Listing Manual, if the Company wishes to make an Off-Market

Purchase, it must issue an offer document to all Shareholders containing at least the
following information:
(1)

the terms and conditions of the offer;

(2)

the period and procedures for acceptances;

(3)

the reasons for the proposed purchase or acquisition of Shares;

(4)

the consequences, if any, of the purchases or acquisitions of Shares by the

Company that will arise under the Take-over Code or other applicable take-over
rules;

(5)

whether the purchases or acquisitions of Shares, if made, could affect the

listing of the Shares on the SGX-ST;

(6)

details of any purchases or acquisitions of Shares made by the Company in

the previous 12 months (whether Market Purchases or Off-Market Purchases),
giving the total number of Shares purchased or acquired, the purchase
price per Share or the highest and lowest prices paid for the purchases or
acquisitions of Shares, where relevant, and the total consideration paid for the
purchases or acquisitions; and

(7)

whether the Shares purchased by the Company will be cancelled or kept as

treasury shares.

2.3.4 Purchase Price

The purchase price (excluding brokerage, stamp duties, commission, applicable
goods and services tax and other related expenses) to be paid for a Share will be
determined by a committee of Directors constituted for the purposes of effecting
purchases or acquisitions of Shares by the Company under the Share Purchase
Mandate. However, the purchase price to be paid for the Shares pursuant to the
purchases or acquisitions of the Shares must not exceed:
(a)

in the case of a Market Purchase, 105% of the Average Closing Price; and

(b)

in the case of an Off-Market Purchase pursuant to an equal access scheme,

120% of the Average Closing Price,

16

(the Maximum Price) in either case, excluding related expenses of the purchase or
acquisition.
For the purposes of determining the Maximum Price:
Average Closing Price means the average of the closing market prices of a
Share over the last five (5) Market Days, on which transactions in the Shares were
recorded, before the day on which the purchase or acquisition of Shares was made,
or as the case may be, the day 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) Market Days.
day of the making of the offer means the day on which the Company announces
its intention to make an offer for an Off-Market Purchase, stating therein the purchase
price (which shall not be more than the Maximum Price for an Off-Market Purchase
calculated on the foregoing basis) for each Share and the relevant terms of the equal
access scheme for effecting the Off-Market Purchase.
2.4

Status of Purchased Shares

A Share purchased or acquired by the Company is deemed cancelled immediately on
purchase or acquisition unless such Share is held by the Company as a treasury share.
The Shares purchased or acquired under the Share Purchase Mandate will be held as
treasury shares or cancelled by the Company taking into consideration the then prevailing
circumstances and requirements of the Company at the relevant time. On a cancellation, all
rights and privileges attached to that Share will expire. The total number of issued Shares
will be diminished by the number of Shares purchased or acquired by the Company and
which are not held as treasury shares. It is presently intended by the Company that all or
most of the Shares which are purchased or acquired by the Company under the Share
Purchase Mandate will be held as treasury shares, up to the maximum number of treasury
shares permitted by law to be held by the Company.
All Shares purchased or acquired by the Company (other than treasury shares held by the
Company to the extent permitted under the Companies Act) will be automatically delisted
by the SGX-ST, and (where applicable) all certificates in respect thereof will be cancelled
and destroyed by the Company as soon as reasonably practicable following the settlement
of any such purchase or acquisition.

2.5

Treasury Shares
Under the Companies Act, the Shares purchased or acquired by the Company may be
held or dealt with as treasury shares. Some of the provisions on treasury shares under the
Companies Act are summarised below:
2.5.1 Maximum Holdings
The number of Shares held as treasury shares cannot at any time exceed 10% of the
total number of issued Shares.
2.5.2 Voting and Other Rights
The Company cannot exercise any right in respect of treasury shares. In particular,
the Company cannot exercise any right to attend or vote at meetings and for the
purposes of the Companies Act, the Company shall be treated as having no right to
vote and the treasury shares shall be treated as having no voting rights.
17

In addition, no dividend may be paid, and no other distribution of the Companys

assets may be made, to the Company in respect of treasury shares. However,
the allotment of shares as fully paid bonus shares in respect of treasury shares is
allowed. Also, a subdivision or consolidation of any treasury share into treasury
shares of a greater or smaller number is allowed so long as the total value of the
treasury shares after the subdivision or consolidation is the same as the total value
of the treasury share before the subdivision or consolidation, as the case may be.
2.5.3 Disposal and Cancellation
Where Shares are held as treasury shares, the Company may at any time:

2.6

(a)

sell the treasury shares for cash;

(b)

transfer the treasury shares for the purposes of, or pursuant to, an employees
share scheme (or when the relevant provision of the CAA comes into force, for
the purposes of, or pursuant to, any share scheme, whether for employees,
directors or other persons);

(c)

transfer the treasury shares as consideration for the acquisition of shares in or

assets of another company or assets of a person;

(d)

cancel the treasury shares; or

(e)

sell, transfer or otherwise use the treasury shares for such other purposes as
may be prescribed by the Minister for Finance.

Reporting Requirements
The Company shall notify the Accounting and Corporate Regulatory Authority within 30
days of a purchase or acquisition of Shares on the SGX-ST or otherwise. Such notification
shall include details of the purchases or acquisitions including the date of the purchase
or acquisition, the total number of Shares purchased or acquired by the Company, the
number of Shares cancelled and the number of Shares held as treasury shares, the
Companys issued share capital before and after the purchase or acquisition, the amount
of consideration paid by the Company for the purchase or acquisition, and such other
information as required by the Companies Act. Within 30 days of the passing of a
Shareholders resolution to approve or renew the Share Purchase Mandate, the Company
shall lodge a copy of such resolution with the Accounting and Corporate Regulatory
Authority.
The Listing Manual states that a listed company shall notify the SGX-ST of all purchases
or acquisitions of its Shares not later than 9.00 a.m.:
(a)

in the case of a Market Purchase, on the Market Day following the day on which the
Market Purchase was made, and

(b)

in the case of an Off-Market Purchase, on the second Market Day after the close of
acceptance of the offer for the Off-Market Purchase.

The notification of such purchases or acquisition of Shares to the SGX-ST shall be in such
form and shall include such details that the SGX-ST may prescribe. The Company shall
make arrangements with its stockbrokers to ensure that they provide to the Company, in
a timely fashion, the necessary information which will enable the Company to make the
notifications to the SGX-ST.
18

The Company, upon undertaking any sale, transfer, cancellation and/or use of treasury
shares, will comply with Rule 704(28) of the Listing Manual, which provides that an issuer
must make an immediate announcement thereof, stating the following:

2.7

(i)

date of the sale, transfer, cancellation and/or use;

(ii)

purpose of such sale, transfer, cancellation and/or use;

(iii)

number of treasury shares sold, transferred, cancelled and/or used;

(iv)

number of treasury shares before and after such sale, transfer, cancellation and/or
use;

(v)

percentage of the number of treasury shares against the total number of Shares
outstanding in a class that is listed before and after such sale, transfer, cancellation
and/or use; and

(vi)

value of the treasury shares if they are used for a sale or transfer, or cancelled.

Sources of Funds
The Company may only apply funds legally available for the purchase or acquisition
of the Shares as provided in the Articles of Association and in accordance with the
applicable laws in Singapore. The Company may not purchase or acquire its Shares for
a consideration other than in cash or, in the case of a Market Purchase, for settlement
otherwise than in accordance with the trading rules of the SGX-ST.
The Company intends to use internal sources of funds or borrowings or a combination of
both to finance the Companys purchase or acquisition of the Shares pursuant to the Share
Purchase Mandate. In purchasing or acquiring Shares pursuant to the Share Purchase
Mandate, the Directors will, principally consider the availability of internal resources. In
addition, the Directors will also consider the availability of external financing. However,
in considering the option of external financing, the Directors will consider particularly
the prevailing gearing level of the Group. The Directors will only make purchases or
acquisitions pursuant to the Share Purchase Mandate in circumstances which they believe
will not result in any material adverse effect to the financial position of the Company or the
Group.

2.8

Financial Effects
It is not possible for the Company to realistically calculate or quantify the impact of
purchases or acquisitions of Shares that may be made pursuant to the Share Purchase
Mandate on the NAV per Share 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 prices paid for such Shares,
the amount (if any) borrowed by the Company to fund the purchases or acquisitions and
whether the Shares purchased or acquired are cancelled or held as treasury shares.
The repurchased Shares may be cancelled or held as treasury shares. If the Shares are
cancelled, the Companys total number of issued Shares will be diminished by the total
number of the Shares purchased by the Company. The NAV of the Group will be reduced
by the aggregate purchase price paid by the Company for the Shares cancelled (including
any expenses (including brokerage or commission) incurred directly in the purchase or

19

acquisition of the Shares which is paid out of the Companys capital or profits). If the
Shares are held as treasury shares, the issued share capital of the Company will not be
affected.
Under the Companies Act, purchases or acquisitions of Shares by the Company may be
made out of the Companys capital or profits so long as the Company is solvent. Where
the consideration paid by the Company for the purchase or acquisition of Shares is
made out of profits, such consideration (excluding brokerage, stamp duties, commission,
applicable goods and services tax and other related expenses) will correspondingly reduce
the amount of profits available for the distribution of cash dividends by the Company.
Where the consideration paid by the Company for the purchase or acquisition of Shares
is made out of capital, the amount of profits available for the distribution of cash dividends
by the Company will not be reduced.
The Directors do not propose to exercise the Share Purchase Mandate to such an extent
that it would have a material adverse effect on the working capital requirements of the
Group. The purchase or acquisition of the Shares will only be effected after considering
relevant factors such as the working capital requirements, availability of financial resources,
the expansion and investment plans of the Group and the prevailing market conditions.
The proposed Share Purchase Mandate will be exercised with a view to enhance the EPS
and/or the NAV per Share of the Group.
As at the Latest Practicable Date, the total number of issued Shares is 1,045,295,233, of
which 67,628,200 Shares are held in treasury. On this basis, for illustrative purposes only,
as the Company can only hold 10% of its Shares in treasury pursuant to Section 76I(1)
of the Companies Act, it can only hold 104,529,523 Shares in treasury. As such, even
though the Share Purchase Mandate provides for potentially up to 97,766,703 Shares
to be purchased or acquired by the Company, the maximum number of Shares that the
Company can purchase or acquire and hold in treasury is 36,901,323 Shares. Accordingly,
the exercise in full of the Share Purchase Mandate would result in the purchase or
acquisition of 36,901,323 Shares if all the Shares so purchased or acquired were to be
held in treasury.
For the purposes of illustration and comparison only, the Company has assumed that
pursuant to the Share Purchase Mandate, it will purchase or acquire the smaller number
of Shares, i.e. 36,901,323 Shares, instead of the entire 10% of the total number of issued
Shares (excluding treasury shares), i.e. 97,766,703 Shares.
For illustrative purposes only, the financial effects of the Share Purchase Mandate on the
Group and the Company, based on the audited financial statements of the Group for the
financial year ended 30 June 2015 are based on the assumptions set out below:
(a)

in the case of Market Purchases by the Company and assuming that the Company
purchases or acquires 36,901,323 Shares at the Maximum Price of S$0.30 for one
(1) Share (being the price equivalent to 5% above the Average Closing Price of the
Shares for the five (5) consecutive Market Days on which the Shares were traded
on the SGX-ST immediately preceding the Latest Practicable Date), the maximum
amount of funds required for the purchase or acquisition of 36,901,323 Shares
(excluding brokerage, stamp duties, commission, applicable goods and services tax
and other related expenses) is approximately S$11,070,397; and

20

(b)

in the case of Off-Market Purchases by the Company and assuming that the
Company purchases or acquires 36,901,323 Shares at the Maximum Price of S$0.34
for one (1) Share (being the price equivalent to 120% of the Average Closing Price of
the Shares for the five (5) consecutive Market Days on which the Shares were traded
on the SGX-ST immediately preceding the Latest Practicable Date), the maximum
amount of funds required for the purchase or acquisition of 36,901,323 Shares
(excluding brokerage, stamp duties, commission, applicable goods and services tax
and other related expenses) is approximately S$12,546,450.

For illustrative purposes only, and based on the assumptions set out in the foregoing
two paragraphs and assuming that:
(i)

such purchase or acquisition of Shares is financed solely by borrowings; and

(ii)

the Share Purchase Mandate been effective on 1 July 2014 and the Company had
purchased or acquired 36,901,323 Shares on 1 July 2014,

the financial effects of the:

(A)

purchase or acquisition of the abovementioned number of Shares by the Company

pursuant to the Share Purchase Mandate by way of purchases made out of capital
and profits and held as treasury shares; and

(B)

purchase or acquisition of the abovementioned number of Shares by the Company

pursuant to the Share Purchase Mandate by way of purchases made out of capital
and profits and cancelled,

on the audited financial accounts of the Company and the Group for the financial year
ended 30 June 2015 are set out below:

21

(1)

Purchases made out of capital and profits and held as treasury shares
(A)

Market Purchases
Group
Before
After
Share
Share
Purchase Purchase
S$000
S$000

As at 30 June 2015
Profit after tax

Company
Before
After
Share
Share
Purchase Purchase
S$000
S$000

16,983

16,983

16,154

16,154

Share Capital
Capital and Other reserves
Accumulated profits / (losses)

481,785
27,298
89,643

481,785
27,298
89,643

481,785
2,453
(54,729)

481,785
2,453
(54,729)

Treasury shares

598,726
(32,730)

598,726
(43,800)

429,509
(32,730)

429,509
(43,800)

Shareholders funds

565,996

554,926

396,779

385,709

565,996
322,620
422,956
390,567
1,045,295
54,134

554,926
322,620
422,956
401,637
1,045,295
91,035

396,779
322,432
296,360
269,592
1,045,295
54,134

385,709
322,432
296,360
280,662
1,045,295
91,035

57.10
0.69
0.76
1.68

58.15
0.72
0.76
1.75

40.03
0.68
1.09
1.60

40.42
0.73
1.09
1.66

NAV
Current Assets
Current Liabilities
Borrowings
Number of issued Shares (000)
Treasury shares (000)
Financial Ratios
NAV per Share (cents)
Gearing (times)
Current Ratio (times)
EPS (cents)

22

(B)

Off-Market Purchases
Group
Before
After
Share
Share
Purchase Purchase
S$000
S$000

As at 30 June 2015
Profit after tax

Company
Before
After
Share
Share
Purchase Purchase
S$000
S$000

16,983

16,983

16,154

16,154

Share Capital
Capital and Other reserves
Accumulated profits / (losses)

481,785
27,298
89,643

481,785
27,298
89,643

481,785
2,453
(54,729)

481,785
2,453
(54,729)

Treasury shares

598,726
(32,730)

598,726
(45,276)

429,509
(32,730)

429,509
(45,276)

Shareholders funds

565,996

553,450

396,779

384,233

565,996
322,620
422,956
390,567
1,045,295
54,134

553,450
322,620
422,956
403,113
1,045,295
91,035

396,779
322,432
296,360
269,592
1,045,295
54,134

384,233
322,432
296,360
282,138
1,045,295
91,035

57.10
0.69
0.76
1.68

58.00
0.73
0.76
1.75

40.03
0.68
1.09
1.60

40.27
0.73
1.09
1.66

NAV
Current Assets
Current Liabilities
Borrowings
Number of issued Shares (000)
Treasury shares (000)
Financial Ratios
NAV per Share (cents)
Gearing (times)
Current Ratio (times)
EPS (cents)

23

(2)

Purchases made out of capital and profits and cancelled

(A)

Market Purchases
Group
Before
After
Share
Share
Purchase Purchase
S$000
S$000

As at 30 June 2015
Profit after tax

Company
Before
After
Share
Share
Purchase Purchase
S$000
S$000

16,983

16,983

16,154

16,154

Share Capital
Capital and Other reserves
Accumulated profits / (losses)

481,785
27,298
89,643

470,715
27,298
89,643

481,785
2,453
(54,729)

470,715
2,453
(54,729)

Treasury shares

598,726
(32,730)

587,656
(32,730)

429,509
(32,730)

418,439
(32,730)

Shareholders funds

565,996

554,926

396,779

385,709

565,996
322,620
422,956
390,567
1,045,295
54,134

554,926
322,620
422,956
401,637
1,008,394
54,134

396,779
322,432
296,360
269,592
1,045,295
54,134

385,709
322,432
296,360
280,662
1,008,394
54,134

57.10
0.69
0.76
1.68

58.15
0.72
0.76
1.75

40.03
0.68
1.09
1.60

40.42
0.73
1.09
1.66

NAV
Current Assets
Current Liabilities
Borrowings
Number of issued Shares (000)
Treasury shares (000)
Financial Ratios
NAV per Share (cents)
Gearing (times)
Current Ratio (times)
EPS (cents)

24

(B)

Off-Market Purchases
Group
Before
After
Share
Share
Purchase Purchase
S$000
S$000

As at 30 June 2015
Profit after tax

Company
Before
After
Share
Share
Purchase Purchase
S$000
S$000

16,983

16,983

16,154

16,154

Share Capital
Capital and Other reserves
Accumulated profits / (losses)

481,785
27,298
89,643

469,239
27,298
89,643

481,785
2,453
(54,729)

469,239
2,453
(54,729)

Treasury shares

598,726
(32,730)

586,180
(32,730)

429,509
(32,730)

416,963
(32,730)

Shareholders funds

565,996

553,450

396,779

384,233

565,996
322,620
422,956
390,567
1,045,295
54,134

553,450
322,620
422,956
403,113
1,008,394
54,134

396,779
322,432
296,360
269,592
1,045,295
54,134

384,233
322,432
296,360
282,138
1,008,394
54,134

57.10
0.69
0.76
1.68

58.00
0.73
0.76
1.75

40.03
0.68
1.09
1.60

40.27
0.73
1.09
1.66

NAV
Current Assets
Current Liabilities
Borrowings
Number of issued Shares (000)
Treasury shares (000)
Financial Ratios
NAV per Share (cents)
Gearing (times)
Current Ratio (times)
EPS (cents)

Shareholders should note that the financial effects set out above are purely for
illustrative purposes only and are based only on the assumptions set out above.
Although the proposed renewal of the Share Purchase Mandate would authorise the
Company to purchase or acquire up to 10% of the total number of issued Shares
(excluding treasury shares), the Company may not necessarily purchase or acquire or
be able to purchase or acquire the entire 10% of the total number of issued Shares
(excluding treasury shares), or purchase or be able to purchase up to the maximum
number of its issued Shares that it can hold in treasury as illustrated above. The
Company may, subject to the requirements of the Companies Act, cancel all or
part of the Shares repurchased and/or hold all or part of the Shares repurchased in
treasury, at its discretion.

25

2.9

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 takeover implications arising from any purchase or
acquisition by the Company of its Shares are set out below.
2.9.1 Obligation to make a Take-over Offer
If, as a result of any purchase or acquisition by the Company of the Shares, the
percentage of voting rights in the Company of a Shareholder and persons acting in
concert with him increases, such increase will be treated as an acquisition for the
purposes of Rule 14 of the Take-over Code. Consequently, a Shareholder or a group
of Shareholders acting in concert with a Director could obtain or consolidate effective
control of the Company and become obliged to make an offer under Rule 14 of the
Take-over Code.
2.9.2 Persons Acting in Concert
Under the Take-over Code, persons acting in concert (concert parties) 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 the company.
Unless the contrary is established, the following persons, inter alia, will be presumed
to be acting in concert, namely:
(a)

a company with its parent company, subsidiaries, its fellow subsidiaries, any
associated companies of the above companies, and any company whose
associated companies include any of the above companies, and any person
who has provided financial assistance (other than a bank in the ordinary course
of business) to any of the foregoing for the purchase of voting rights;

(b)

a company with any of its directors, together with their close relatives, related
trusts and any companies controlled by any of the directors, their close
relatives and related trusts;

(c)

a company with any of its pension funds and employee share schemes;

(d)

a person with any investment company, unit trust or other fund in respect of
the investment account which such person manages on a discretionary basis,
but only in respect of the investment account which such person manages;

(e)

a financial or other professional adviser, including a stockbroker, with its client

in respect of the shareholdings of the adviser and the persons controlling,
controlled by or under the same control as the adviser and all the funds which
the adviser manages on a discretionary basis, where the shareholdings of the
adviser and any of those funds in the client total 10% or more of the clients
equity share capital;

(f)

directors of a company, together with their close relatives, related trusts and
companies controlled by any of them, which is subject to an offer or where they
have reason to believe a bona fide offer for their company may be imminent;

26

(g)

partners; and

(h)

an individual, his close relatives, his related trusts, and any person who is
accustomed to act according to his instructions, companies controlled by any
of the above and any person who has provided financial assistance (other than
a bank in the ordinary course of business) to any of the foregoing persons and/
or entities for the purchase of voting rights.

For this purpose, ownership or control of at least 20% but not more than 50% of
the voting rights of a company will be regarded as the test of associated company
status.
The circumstances under which Shareholders, including Directors and their concert
parties respectively, will incur an obligation to make a take-over offer under Rule 14
of the Take-over Code after a purchase or acquisition of Shares by the Company are
set out in Appendix 2 of the Take-over Code.
2.9.3 Effect of Rule 14 and Appendix 2 of the Take-over Code
In general terms, the effect of Rule 14 and Appendix 2 of the Take-over Code is that,
unless exempted, Directors and their concert parties will incur an obligation to make
a take-over offer under Rule 14 of the Take-over Code if, as a result of the Company
purchasing or acquiring Shares, the voting rights of such Directors and their concert
parties would increase to 30% or more, or in the event that such Directors and their
concert parties hold between 30% and 50% of the Companys voting rights, if the
voting rights of such Directors and their concert parties would increase by more than
1% in any period of six (6) months. In calculating the percentages of voting rights of
such Directors and their concert parties, treasury shares shall be excluded.
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 under Rule 14 of the
Take-over Code if, as a result of the Company purchasing or acquiring its Shares,
the voting rights of such Shareholder would increase to 30% or more, or, if such
Shareholder holds between 30% and 50% of the Companys voting rights, the voting
rights of such Shareholder would increase by more than 1% in any period of six (6)
months. Such Shareholder need not abstain from voting in respect of the resolution
authorising the Share Purchase Mandate.
Based on the notifications received by the Company, as at the Latest Practicable
Date, as set out in paragraph 3 below, save for Mr Chew Hua Seng and Ms Doris
Chung Gim Lian, none of the substantial Shareholders would become obliged to
make a take-over offer for the Company under Rule 14 of the Take-over Code as a
result of the purchase or acquisition by the Company of the maximum limit of 10%
of its issued Shares (excluding treasury shares) as at the Latest Practicable Date.
2.9.4 Effect of the Share Purchase Mandate on Mr Chew Hua Seng and Ms Doris
Chung Gim Lian
As at the Latest Practicable Date, each of Mr Chew Hua Seng and his spouse, Ms
Doris Chung Gim Lian held, directly and indirectly, 36.52% of the total number of
Shares (excluding treasury shares).
Assuming that there is no change in the number of Shares held or deemed to be
held by each of Mr Chew Hua Seng and Ms Doris Chung Gim Lian, the purchase or
acquisition by the Company of the maximum amount of 10% of the total number of
27

issued Shares (excluding treasury shares) will result in an increase in the shareholding
interests of each of Mr Chew Hua Seng and Ms Doris Chung Gim Lian from the
present 36.52% to 37.96%. Accordingly, each of Mr Chew Hua Seng and Ms Doris
Chung Gim Lian may prima facie be required to make a take-over offer for the Shares
held by the other Shareholders pursuant to Rule 14 of the Take-over Code.
Pursuant to Section 3(a) of Appendix 2 of the Take-over Code, Mr Chew Hua Seng
and Ms Doris Chung Gim Lian, and their concert parties, are exempted from the
requirement to make a take-over offer for the Shares held by the other Shareholders
pursuant to Rule 14 of the Take-over Code as a result of the Company purchasing
or acquiring the Shares pursuant to the Share Purchase Mandate, subject to the
following conditions:
(a)

this Letter in relation to the Ordinary Resolution contains advice to the effect
that by voting for the renewal of the Share Purchase Mandate, Shareholders
are waiving their right to a general offer at the required price from Mr Chew Hua
Seng and Ms Doris Chung Gim Lian, and their concert parties, who, as a result
of the Company buying back its Shares, would increase their voting rights by
more than 1% in any period of six (6) months;

(b)

this Letter discloses the names of Mr Chew Hua Seng and Ms Doris Chung
Gim Lian, and their concert parties, their voting rights at the time of the
Ordinary Resolution and after the proposed purchase or acquisition of Shares
by the Company under the Share Purchase Mandate;

(c)

the Ordinary Resolution is approved by a majority of those Shareholders

present and voting at the AGM on a poll who could not become obliged to
make an offer for the Company as a result of the Company purchasing or
acquiring Shares under the Share Purchase Mandate;

(d)

Mr Chew Hua Seng and Ms Doris Chung Gim Lian, and their concert parties,
shall abstain from voting for, and Mr Chew Hua Seng shall abstain from
recommending Shareholders to vote in favour of, the Ordinary Resolution; and

(e)

within seven (7) days after the passing of the Ordinary Resolution, Mr Chew
Hua Seng shall submit to the SIC a duly signed form as prescribed by the SIC;
and

(f)

Mr Chew Hua Seng and Ms Doris Chung Gim Lian, and their concert parties,
have not acquired and will not acquire any Shares between the date on which
they know that the announcement of the proposal for the renewal of the Share
Purchase Mandate is imminent and the earlier of:
(i)

the date on which the authority of the Share Purchase Mandate expires;
and

(ii)

the date on which the Company announces it has bought back such
number of Shares as authorised by Shareholders at the AGM or it has
decided to cease buying back its Shares, as the case may be,

if such acquisitions, taken together with those purchased or acquisition of Shares

by the Company under the Share Purchase Mandate, would cause their aggregate
voting rights to increase by more than 1% in the preceding six (6) months.

28

If the Company ceases to buy back its Shares and the increase in the aggregate
voting rights held by Mr Chew Hua Seng and Ms Doris Chung Gim Lian, and their
concert parties, as a result of the purchase or acquisition of Shares at such time is
less than 1%, Mr Chew Hua Seng and Ms Doris Chung Gim Lian will be allowed to
acquire voting shares in the Company. However, any increase in their percentage
voting rights in the Company as a result of the Company buying back its Shares
under the Share Purchase Mandate will be taken into account together with any
Shares acquired by Mr Chew Hua Seng and Ms Doris Chung Gim Lian, and their
concert parties (by whatever means) in determining whether Mr Chew Hua Seng
and Ms Doris Chung Gim Lian have increased their aggregate voting rights in the
Company by more than 1% in any six (6) month period.
2.9.5 Waiver of Rights to General Offer
Shareholders should note that by voting in favour of the Ordinary Resolution in
relation to the renewal of the Share Purchase Mandate to be tabled at the AGM,
Shareholders are waiving their rights to a general offer at the required price from Mr
Chew Hua Seng and Ms Doris Chung Gim Lian, and their concert parties.
Shareholders who are in doubt as to their obligations, if any, to make a mandatory
take-over offer under the Take-over Code as a result of any purchase or acquisition
of Shares by the Company should consult the SIC and/or their professional advisers
at the earliest opportunity.
2.10 Taxation
Shareholders who are in doubt as to their respective tax positions or any such tax
implications or who may be subject to tax in a jurisdiction other than Singapore
should consult their own professional advisers.
2.11 Listing Manual
While the Listing Manual does not expressly prohibit purchase or acquisition of shares
by a listed company during any particular time or times, because the listed company
would be considered an insider in relation to any proposed purchase or acquisition of its
issued shares, the Company will not purchase any Shares pursuant to the Share Purchase
Mandate after a development which could have a material effect on the price of the Shares
has occurred or has been the subject of a consideration and/or a decision of the Board
until such time as such information has been publicly announced. In particular, in line with
the best practices on securities dealings as reflected under Rule 1207(19) of the Listing
Manual, the Company will not purchase or acquire any Shares through under the Share
Purchase Mandate during the period commencing two (2) weeks before the announcement
of the Companys financial statements for each of the first three (3) quarters of its financial
year and one (1) month before the announcement of the Companys full year financial
statements.
The Company is required under Rule 723 of the Listing Manual to ensure that at least 10%
of its Shares (excluding treasury shares) are in the hands of the public. The public, as
defined under the Listing Manual, 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 of such persons.
Based on the Register of Directors shareholdings and the Register of Substantial
Shareholders maintained by the Company as at the Latest Practicable Date, approximately
526,913,519 Shares, representing 53.89% of the total number of issued Shares (excluding
29

treasury shares), are in the hands of the public. Assuming that (a) the Company purchases
its Shares through Market Purchases up to the full 10% limit pursuant to the Share
Purchase Mandate and all such Shares purchased are held by the public, and (b) all
Shares purchased by the Company are held as treasury shares, the number of Shares in
the hands of the public would be reduced to 490,012,196 Shares, representing 52.09% of
the total number of issued Shares (excluding treasury shares). Accordingly, the Company
is of the view that there is a sufficient number of issued Shares held in the hands of the
public which would permit the Company to undertake purchases or acquisitions of its
issued Shares up to the full 10% limit pursuant to the proposed Share Purchase Mandate
without affecting the listing status of the Shares on the SGX-ST, and that the number of
Shares remaining in the hands of the public will not fall to such a level as to cause market
illiquidity.
In undertaking any purchases or acquisitions of Shares through Market Purchases, the
Directors will use their best efforts to ensure that, notwithstanding such purchases,
a sufficient float in the hands of the public will be maintained so that the purchases or
acquisitions of Shares will not adversely affect the listing status of the Shares on the
SGX-ST, cause market illiquidity or adversely affect the orderly trading of the Shares.
2.12 Previous Share Purchases
In the last 12 months immediately preceding the Latest Practicable Date, the Company
purchased or acquired 38,538,200 Shares, by way of 47 Market Purchases. The highest
and lowest prices paid were S$0.36 and S$0.28 per Share respectively. The total
consideration paid (excluding stamp duties, clearing charges and other related expenses)
for all the purchases was S$12,059,000.
3.

DIRECTORS AND SUBSTANTIAL SHAREHOLDERS INTEREST

The interest of the directors of the Company in the Shares, as extracted from the Register
of Directors shareholdings, as at the Latest Practicable Date is set out below:

Direct
Interest
Chew Hua Seng(2)
Tan Chin Nam
Henry Tan Song Kok(3)
Teo Cheng Lok John
Lim Tien Lock, Christopher
Chew Kok Chor

Number of Shares
Deemed
Total
Interest
Interest

330,895,853
818,089
278,125
588,465

26,187,046
208,036
-

357,082,899
1,026,125
278,125
588,465

% of the total
number of
issued Shares(1)
36.52
0.10
0.03
0.06

Notes:
(1)

Based on the total number of Shares (excluding treasury shares) as at the Latest Practicable Date of 977,667,033.

(2)

Mr Chew Hua Sengs direct interest in the Shares comprises 205,549,881 Shares held in his sole name and
125,345,972 Shares held jointly with his spouse, Ms Doris Chung Gim Lian. Ms Doris Chung Gim Lian also holds
26,187,046 Shares in her sole name. Mr Chew Hua Seng is deemed to be interested in the 26,187,046 Shares held
by Ms Doris Chung Gim Lian. Assuming the purchase or acquisition of Shares pursuant to the Share Purchase
Mandate is carried out to the full 10% limit, Mr Chew Hua Sengs percentage shareholding in the Company will
increase from 36.52% to 37.96%.

(3)

Mr Henry Tan Song Kok is deemed to be interested in the 208,036 Shares registered in the name of His Time
Family Trust of which he is the trustee. The beneficiary of the trust is his family.

30

The interests of the Substantial Shareholders (other than Directors) in the Shares, as
extracted from the Register of Substantial Shareholders, as at the Latest Practicable Date
are set out below:

Direct
Interest
Doris Chung Gim Lian(2)
Oei Hong Leong(3)

Number of Shares
Deemed
Total
Interest
Interest

151,533,018
61,510,000

205,549,881
30,267,900

357,082,899
91,777,900

% of the total
number of
issued Shares(1)
36.52
9.39

Notes:

4.

(1)

Based on the total number of Shares (excluding treasury shares) as at the Latest Practicable Date of 977,667,033.

(2)

Ms Doris Chung Gim Lian is the spouse of Mr Chew Hua Seng. In this respect, Ms Doris Chung Gim Lian is
deemed to have an interest in the shareholdings of Mr Chew Hua Seng and vice versa.

(3)

Mr Oei Hong Leong is deemed to have an interest in the shares held by Oei Hong Leong Art Museum Limited
(OHLAM) due to his direct interest of 90% in the ultimate holding company of OHLAM.

DIRECTORS RECOMMENDATIONS
The Directors (other than Mr Chew Hua Seng, who has abstained from making any
recommendations in respect of the Ordinary Resolution) are of the opinion that the
proposed renewal of the Share Purchase Mandate is in the best interests of the Company
and accordingly recommend that the Shareholders vote in favour of the Ordinary
Resolution relating to the renewal of the Share Purchase Mandate at the AGM.

5.

ANNUAL GENERAL MEETING

The AGM, notice of which is circulated with this Letter, will be held on 19 October 2015 at
10.30 a.m. at Cinnamon Room, Level 5, Novotel Singapore Clarke Quay, 177A River Valley
Road, Singapore 179031 for the purpose of considering and, if thought fit, passing, with or
without modifications, the Ordinary Resolution set out in the Notice of AGM.

6.

ABSTENTION FROM VOTING

Each of Mr Chew Hua Seng and Ms Doris Chung Gim Lian, and their concert parties
(if any), is required to abstain from voting on the Ordinary Resolution in respect of the
renewal of the Share Purchase Mandate at the AGM. Each of Mr Chew Hua Seng and
Ms Doris Chung Gim Lian shall not, and shall procure that their concert parties shall not,
accept appointment as proxies for voting on the Ordinary Resolution in respect of the
renewal of the Share Purchase Mandate unless specific instructions have been given in
the Proxy Form(s) on how the votes are to be cast in respect of the Ordinary Resolution
relating to the renewal of the Share Purchase Mandate.

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7.

RESPONSIBILITY STATEMENT
The Directors collectively and individually accept full responsibility for the accuracy of the
information given in this Letter and confirm after making all reasonable enquiries that, to
the best of their knowledge and belief, this Letter constitutes full and true disclosure of
all material facts about the Share Purchase Mandate, the Company and its subsidiaries,
and the Directors are not aware of any facts the omission of which would make any
statement in this Letter misleading. Where information in this Letter 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 these sources and/or reproduced in this Letter in
its proper form and context.

8.

DOCUMENTS FOR INSPECTION

The following documents are available for inspection at the registered office of the
Company at 51 Merchant Road, Raffles Education Square, Singapore 058283 during
normal business hours from the date hereof up to and including the date of the AGM:
(a)

the Memorandum and the Articles of Association; and

(b)

the Annual Report 2015.

Yours faithfully
For and on behalf of the Board of Directors of
RAFFLES EDUCATION CORPORATION LIMITED
Chew Hua Seng
Chairman and Chief Executive Officer

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