eurosports global limited

Transcription

EUROSPORTS GLOBAL LIMITED
(Company Registration No.: 201230284Z)
(Incorporated in the Republic of Singapore on 12 December 2012)
Invitation in respect of 80,000,000 Invitation Shares comprising 40,000,000 New Shares and 40,000,000 Vendor
Shares, as follows:
(i) 1,500,000 Offer Shares at S$0.28 for each Offer Share by way of public offer; and
(ii) 78,500,000 Placement Shares at S$0.28 for each Placement Share by way of placement,
payable in full on application.
OFFER DOCUMENT DATED 7 JANUARY 2014
(Registered by the Singapore Exchange Securities Trading Limited acting as
agent on behalf of the Monetary Authority of Singapore on 7 January 2014)
This document is important. If you are in any doubt as to the
action you should take, you should consult your legal, financial,
tax or other professional adviser(s).
CIMB Bank Berhad, Singapore Branch (the “Sponsor”) has on behalf of EuroSports
Global Limited (the “Company”) made an application to the Singapore Exchange
Securities Trading Limited (the “SGX-ST”) for permission to deal in, and for quotation
of, all the ordinary shares (the “Shares”) in the capital of the Company already issued
(including the Vendor Shares (as defined herein)), the new Shares (the “New Shares”)
which are the subject of the Invitation (as defined herein), the new Shares which may be
issued under the EuroSports Performance Share Plan (the “Performance Shares”)
and the new Shares which may be issued upon the exercise of the options to be granted
under the EuroSports Employee Share Option Scheme (the “Option Shares”) on
Catalist (as defined herein).
Acceptance of applications and the allotment and allocation of the Invitation Shares (as
defined herein) will be conditional upon, inter alia, the completion of the Invitation, which
is subject to certain conditions, including permission being granted by the SGX-ST to
deal in, and for quotation of, all our existing issued Shares (including the Vendor Shares),
the New Shares, the Performance Shares and the Option Shares. Monies paid in respect
of any application accepted will be returned if the admission and listing do not proceed.
The dealing in and quotation of the Shares will be in Singapore dollars.
Companies listed on Catalist may carry higher investment risk when compared with larger
or more established companies listed on the Main Board of the SGX-ST. In particular,
companies may list on Catalist without a track record of profitability and there is no
assurance that there will be a liquid market in the shares or units of shares traded on
Catalist.You should be aware of the risks of investing in such companies and should make
the decision to invest only after careful consideration and, if appropriate, consultation
with your professional adviser(s).
This offer of Invitation Shares is made in or accompanied by an offer
document that has been registered by the SGX-ST acting as agent on
behalf of the Monetary Authority of Singapore (the “Authority”).
Neither the Authority nor the SGX-ST has examined or approved the contents of this
Offer Document. Neither the Authority nor the SGX-ST assumes any responsibility for
the contents of this Offer Document, including the correctness of any of the statements
or opinions made or reports contained in this Offer Document. The SGX-ST does not
normally review the application for admission but relies on the Sponsor confirming that
our Company is suitable to be listed and complies with the Catalist Rules (as defined
herein). Neither the Authority nor the SGX-ST has in any way considered the merits of
the Shares (including the Vendor Shares), the New Shares, the Performance Shares or
the Option Shares, as the case may be, being offered for investment. The registration of
this Offer Document by the SGX-ST does not imply that the Securities and Futures Act
(Chapter 289) of Singapore, or any other legal or regulatory requirements, or requirements
under the SGX-ST’s listing rules, have been complied with.
We have not lodged this Offer Document in any other jurisdiction.
Investing in our Shares involves risks which are described in the section
entitled “RISK FACTORS” of this Offer Document, such as “WE ARE
DEPENDENT ON THE SALES OF LAMBORGHINI AUTOMOBILES” and
“CERTAIN OF OUR GROUP’S DISTRIBUTORSHIP AND DEALERSHIP
AGREEMENTS CONTAIN PROVISIONS WHICH PROHIBIT CHANGES
IN SHAREHOLDERS OR MANAGEMENT OR CHANGES IN CONTROL
OF OUR GROUP EXCEPT WITH PRIOR APPROVAL OR CONSENT”.
After the expiration of six (6) months from the date of registration of
this Offer Document, no person shall make an offer of our Shares, or
allot, issue or sell any of our Shares, on the basis of this Offer Document;
and no officer or equivalent person or promoter of our Company will
authorise or permit the offer of any of our Shares or the allotment,
issue or sale of any of our Shares, on the basis of this Offer Document.
Sponsor
Underwriter and Placement Agent
CIMB Bank Berhad (13491-P)
CIMB Securities (Singapore) Pte. Ltd.
Singapore Branch
(Incorporated in Malaysia)
(Company Registration No.: 198701621D)
(Incorporated in the Republic of Singapore)
CORPORATE PROFILE
E
uroSports Global Limited specialises in
the business of distribution of ultra-luxury
automobiles and luxury automobiles and
provision of after-sales services.
Our automobile distribution business retails new
ultra-luxury automobiles and luxury automobiles
as well as pre-owned automobiles. As at the
Latest Practicable Date, we carry automobile
brands comprising mainly Lamborghini, Pagani
and Alfa Romeo, and customised automobiles
supplied by Touring Superleggera.
The provision of our after-sales services includes
sales of automobile parts and accessories.
We are the only authorised service centre
in Singapore for all the automobile brands
we carry. Incidentally, we also operate an
automobile leasing business as an ancillary
business complementing our automobile
distribution business.
Since September 2012, we have embarked on
the luxury watch distribution and retail business.
We secured the exclusive distributorship
rights for the deLaCour brand of watches for
Singapore, Malaysia, Indonesia, Thailand and
Brunei since November 2012.
THE BRANDS WE CARRY
AUTOMOTIVE MARQUES
(Since 2001)
(Since 2004)
(Since 2012)
(Since 2012)
LUXURY TIMEPIECES
(Since 2012)
ONLY AUTHORISED DEALER
FOR LAMBORGHINI
AUTOMOBILES IN SINGAPORE
COMPETITIVE STRENGTHS
Strong relationships with customers
through personalised and quality
customer service
•
Great emphasis on understanding the
needs and requirements of customers
and providing them with the quality
services that they would expect
•
Customer service aspect is led by
Executive Chairman and CEO, Melvin
Goh
•
Ability to tailor and conduct targeted
marketing campaigns to meet customer
needs and expectations
•
•
Carry strong and well-established
automobile brands, including Lamborghini
which is a well-established automobile
brand both globally and in Singapore
Strength of the automobile brands we
carry, coupled with our focused sales
and marketing activities, has been a key
contributor to our growth
Established relationship with
automobile manufacturers
•
Relationship with the Lamborghini
Manufacturer started in 2001 spanning
more than 10 years, while the longestablished relationship with the Alfa
Romeo Manufacturer began since 2004
•
We believe that our strong and longstanding relationships with existing
automobile manufacturers, strong sales,
high customer satisfaction and proven
track record place us in a favourable
position to maintain the existing
distributorships and/or dealerships
with these automobile manufacturers
•
We also believe that our reputation as
an ultra-luxury automobile and luxury
automobile dealership group gives us
competitive advantages in obtaining
new distributorships and/or dealerships
from other automobile manufacturers
in Singapore or overseas in the future
We believe that our emphasis on
personalised customer service has
contributed to a high level of repeat
sales to existing customers
Carry strong and well-established
automobile brands
•
•
As at the Latest Practicable Date, we
are the only authorised dealer for
Lamborghini automobiles in Singapore,
and the exclusive distributor for Alfa
Romeo automobiles in Singapore
Experienced and committed
management team with proven
track record
•
Our Group is led by our Executive
Chairman and CEO, Melvin Goh, who
has more than 30 years of experience
in the automobile industry
•
Our Executive Director and Deputy
CEO, Andy Goh, has over 28 years of
experience in the automobile industry
•
Our COO, Dennis Yang Yung Kang,
has more than 35 years of relevant
experience and in-depth expertise in
the automobile industry
PROSPECTS
Steady growth in Singapore’s GDP
•
•
•
The Singapore economy is estimated to
have grown by 3.7% in 2013 and is expected
to grow by 2.0% to 4.0% in 2014(1)
The International Monetary Fund (“IMF”)
has projected Singapore’s GDP per capita
growth to be approximately 3.7% per
annum for the next four (4) years(2)
Rising affluence and spending power
of Singaporean consumers are likely to
lead to more discretionary spending and
provides greater business potential for a
wide range of services
•
The Alfa Romeo Manufacturer has recently
launched the new 4C model
•
We have commissioned the deLaCour
Manufacturer to produce 90 limited edition
GT3 timepieces that bear the identity of
the six (6) GT3 race circuits for the GT
Asia 2013
Expanding distribution and retail
network for deLaCour watches
•
Launch of new product models
•
•
The launch of new product models are
expected to drive the growth of sales
of our products going forward, as the
luxury and ultra-luxury segments are
model-driven markets and sales typically
increase when a new model is launched
The Lamborghini Manufacturer has unveiled
the Huracán LP 610-4 that replaces its
Gallardo model. In addition, the Lamborghini
Manufacturer has previously announced
that it plans to enter the sport utility
vehicle (SUV) segment with its newly
launched Lamborghini Urus(3). Based on
industry expectations, Lamborghini Urus
is expected to hit the market by 2017
•
As at the Latest Practicable Date, we
have appointed two (2) Singapore watch
retailers, namely Sincere Watch Limited
and Watches of Switzerland, to act as our
points of sales to retail the deLaCour
brand of watches in Singapore and we
have also appointed a local distributor
in Jakarta, Indonesia
Presently in discussions with a potential
local distributor in Bangkok, Thailand
EXCLUSIVE
DISTRIBUTOR FOR
ALFA ROMEO
AUTOMOBILES IN
SINGAPORE
(1) Source: Press releases entitled “MTI Forecasts Growth of 3.5 to 4.0 Per Cent in 2013 and 2.0 to 4.0 Per Cent
in 2014” dated 21 November 2013 and “Singapore’s GDP Grew 4.4 Per Cent in the Fourth Quarter of 2013”
dated 2 January 2014 by the Ministry of Trade and Industry Singapore (“MTI”). Information was extracted from
the website of the Singapore Department of Statistics at http://www.singstat.gov.sg/statistics/browse_by_theme/
national_accounts.html
(2) Source: World Economic Outlook Database, October 2013. Information was extracted from the website of IMF at
http://www. imf.org/external/pubs/ft/weo/2013/02/weodata/weoselgr.aspx
(3) Source: Press release entitled “Lamborghini Urus – The SUV super athlete” dated 22 April 2012 by the Lamborghini
Manufacturer
BUSINESS STRATEGIES & FUTURE PLANS
Expansion of our operations locally and
into other markets and acquisitions
of new distributorships and/or
dealerships
•
•
Construction of improved or new
facilities for our operations
•
Intend to expand our operations by
way of acquiring and/or constructing
improved or new facilities to house our
offices, showrooms, service centres and
automobile parts and accessories stores
•
Intend to expand our distribution network
for the deLaCour brand of watches locally
and into other emerging markets in the
region
•
If opportunities arise, we will also acquire
distributorships and/or dealerships for
more luxury lifestyle products to expand
our product portfolio
Intend to grow our distribution network
locally and into other emerging markets
in the region – We may expand our
distribution network for our existing
products into overseas markets or secure
distributorships and/or dealerships for
new ultra-luxury automobiles and/or
luxury automobiles
•
Plans to construct new facilities, consisting
of offices, showrooms, service centres
and automobile parts and accessories
stores, at 7 and 9 Chang Charn Road
•
For overseas expansion, we may acquire
local existing distributorships and/or
dealerships which are already in the
ultra-luxury automobile and/or luxury
automobile markets in that country or
enter into strategic alliances with local
distributors and/or dealers of ultra-luxury
automobiles and/or luxury automobiles,
should such a need arise
Expand our businesses through joint
ventures and strategic alliances which
we believe will complement our current
and future businesses
Diversification into other luxury
lifestyle businesses
•
We believe that suitable joint ventures and
strategic alliances will give us access to
new markets and customers as well as new
businesses, including new distributorships
and/or dealerships with strong brand
owners
•
•
As at the Latest Practicable Date, we have
constructed an annex to our premises at
30 Teban Gardens Crescent
Plans to diversify into other businesses in the
luxury segment in order to leverage on our
established pool of high net worth customers
Expand our business through joint
ventures and strategic alliances
THE EMBODIMENT OF BEAUTY,
CLASS & PERFORMANCE
PROPOSED DIVIDEND
W
e intend to declare a one-time special dividend of between S$6 million and S$8 million subject to completion of the sale
and leaseback arrangement relating to our Teban Gardens Showrooms and Service Centres (the “Sale and Leaseback
Arrangement”) and such dividend is expected to be funded solely by the sale proceeds arising therefrom (4)
(4) We expect to complete the Sale and Leaseback Arrangement by the first quarter of 2014, upon which we intend to declare the special dividend in FY2015. In the event that
the Sale and Leaseback Arrangement does not complete and we do not recognise any sale proceeds therefrom, we will not be able to declare such special dividend. Further, in
the event that the completion of the Sale and Leaseback Arrangement is delayed for any reason whatsoever, the declaration of such special dividend will also be delayed
FINANCIAL HIGHLIGHTS
Financial Year ended 31 March
Revenue (S$’million)
Gross Profit (S$’million) & Gross Profit Margin (%)
113.0
107.2
4.8
4.9
25.1%
86.4
18.5
102.2
19.9%
12.5
108.2
78.5
16.4%
25.6
1.4
19.6
24.3
FY2011
FY2012
FY2013
Sale of Automobiles
Sale of Watches
21.7%
17.2
2.3
5.6
IQ2013
0.7
1.5
17.4
IQ2014
5.6
4.9
IQ2013
IQ2014
11.7%
FY2011
FY2012
FY2013
Gross Profit
Provision of After-Sales Services
Gross Profit Margin
Net Profit (S$’million)
Sale of Automobiles (S$’million)
7.6
6.7
30.9
FY
2011
41.0
71.3
FY
2012
67.2
2.9
2.7
2.2
19.9
4.6
FY
2013
58.6
Pre-owned Automobiles
IQ
2014
FY2011
FY2012
FY2013
IQ2013
IQ2014
12.8
New Automobiles
STRENGTH OF AUTOMOBILE BRANDS WE
CARRY, COUPLED WITH OUR FOCUSED SALES
AND MARKETING ACTIVITIES, HAS BEEN A KEY
CONTRIBUTOR TO OUR GROWTH
TABLE OF CONTENTS
CORPORATE INFORMATION ...........................................................................................................
1
DEFINITIONS .....................................................................................................................................
3
GLOSSARY OF TECHNICAL TERMS...............................................................................................
11
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS....................................
13
SELLING RESTRICTIONS ................................................................................................................
15
DETAILS OF THE INVITATION..........................................................................................................
16
INDICATIVE TIMETABLE FOR LISTING ..........................................................................................
20
PLAN OF DISTRIBUTION .................................................................................................................
21
OFFER DOCUMENT SUMMARY ......................................................................................................
23
OUR GROUP ................................................................................................................................
23
OUR BUSINESS ...........................................................................................................................
23
COMPETITIVE STRENGTHS .......................................................................................................
23
BUSINESS STRATEGIES AND FUTURE PLANS........................................................................
24
SUMMARY OF OUR FINANCIAL INFORMATION .......................................................................
25
THE INVITATION................................................................................................................................
26
RISK FACTORS .................................................................................................................................
27
INVITATION STATISTICS ..................................................................................................................
40
USE OF PROCEEDS AND LISTING EXPENSES ............................................................................
42
DIVIDEND POLICY ............................................................................................................................
44
SHARE CAPITAL...............................................................................................................................
45
SHAREHOLDERS .............................................................................................................................
47
OWNERSHIP STRUCTURE .........................................................................................................
47
VENDORS .....................................................................................................................................
48
MORATORIUM ..............................................................................................................................
48
DILUTION...........................................................................................................................................
49
RESTRUCTURING EXERCISE .........................................................................................................
50
GROUP STRUCTURE .......................................................................................................................
52
SELECTED COMBINED FINANCIAL INFORMATION .....................................................................
53
i
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL POSITION AND RESULTS
OF OPERATIONS ..............................................................................................................................
55
OVERVIEW ...................................................................................................................................
55
REVIEW OF RESULTS OF OPERATIONS...................................................................................
62
REVIEW OF FINANCIAL POSITION ............................................................................................
68
LIQUIDITY AND CAPITAL RESOURCES .....................................................................................
70
CAPITAL EXPENDITURES AND DIVESTMENTS .......................................................................
75
OPERATING LEASE COMMITMENTS .........................................................................................
76
FOREIGN EXCHANGE EXPOSURE ............................................................................................
76
SEASONALITY .............................................................................................................................
77
INFLATION ....................................................................................................................................
77
CHANGES TO ACCOUNTING POLICIES ....................................................................................
77
CAPITALISATION AND INDEBTEDNESS ........................................................................................
78
GENERAL INFORMATION ON OUR GROUP ..................................................................................
81
HISTORY AND DEVELOPMENT ..................................................................................................
81
BUSINESS OVERVIEW ................................................................................................................
83
OUR DISTRIBUTORSHIP AND DEALERSHIP ARRANGEMENTS .............................................
85
OUR PROCUREMENT PROCESS...............................................................................................
88
QUALITY CONTROL.....................................................................................................................
88
SALES AND MARKETING ............................................................................................................
88
RESEARCH AND DEVELOPMENT .............................................................................................
90
STAFF TRAINING .........................................................................................................................
90
WORKPLACE SAFETY AND HEALTH MEASURES ....................................................................
90
INTELLECTUAL PROPERTY .......................................................................................................
90
PROPERTIES AND FIXED ASSETS ............................................................................................
91
MAJOR SUPPLIERS.....................................................................................................................
95
MAJOR CUSTOMERS ..................................................................................................................
95
CREDIT MANAGEMENT ..............................................................................................................
96
INVENTORY MANAGEMENT .......................................................................................................
97
INSURANCE .................................................................................................................................
98
COMPETITION .............................................................................................................................
98
COMPETITIVE STRENGTHS .......................................................................................................
99
PROSPECTS ................................................................................................................................
100
TREND INFORMATION ................................................................................................................
101
ORDER BOOK ..............................................................................................................................
102
BUSINESS STRATEGIES AND FUTURE PLANS........................................................................
102
GOVERNMENT REGULATIONS .......................................................................................................
105
ii
INTERESTED PERSON TRANSACTIONS .......................................................................................
112
PAST INTERESTED PERSON TRANSACTIONS ........................................................................
112
PRESENT AND ON-GOING INTERESTED PERSON TRANSACTIONS ....................................
119
REVIEW PROCEDURES FOR FUTURE INTERESTED PERSON TRANSACTIONS ................
122
POTENTIAL CONFLICTS OF INTEREST.........................................................................................
124
DIRECTORS, EXECUTIVE OFFICERS AND EMPLOYEES .............................................................
127
MANAGEMENT REPORTING STRUCTURE ...............................................................................
127
DIRECTORS .................................................................................................................................
128
EXECUTIVE OFFICERS ...............................................................................................................
131
REMUNERATION ..........................................................................................................................
134
EMPLOYEES ................................................................................................................................
135
SERVICE AGREEMENTS .............................................................................................................
135
EUROSPORTS PERFORMANCE SHARE PLAN.............................................................................
137
EUROSPORTS EMPLOYEE SHARE OPTION SCHEME.................................................................
145
CORPORATE GOVERNANCE ..........................................................................................................
151
EXCHANGE CONTROLS ..................................................................................................................
155
TAXATION ..........................................................................................................................................
156
CLEARANCE AND SETTLEMENT ...................................................................................................
159
GENERAL AND STATUTORY INFORMATION .................................................................................
160
APPENDIX A INDEPENDENT AUDITORS’ REPORT AND THE AUDITED COMBINED
FINANCIAL STATEMENTS FOR THE REPORTING YEARS ENDED 31 MARCH
2011, 2012 AND 2013 ...............................................................................................
A-1
APPENDIX B INDEPENDENT AUDITORS’ REPORT AND THE UNAUDITED COMBINED
FINANCIAL STATEMENTS FOR THE REPORTING PERIOD ENDED 30 JUNE
2013 ...........................................................................................................................
B-1
APPENDIX C INDEPENDENT AUDITORS’ REPORT AND THE UNAUDITED PRO FORMA
COMBINED FINANCIAL INFORMATION FOR THE REPORTING YEAR ENDED
31 MARCH 2013 AND THE REPORTING PERIOD ENDED 30 JUNE 2013 ...........
C-1
APPENDIX D DESCRIPTION OF ORDINARY SHARES ................................................................
D-1
APPENDIX E SUMMARY OF MEMORANDUM AND ARTICLES OF ASSOCIATION OF OUR
COMPANY .................................................................................................................
E-1
APPENDIX F RULES OF THE EUROSPORTS PERFORMANCE SHARE PLAN .........................
F-1
APPENDIX G RULES OF THE EUROSPORTS EMPLOYEE SHARE OPTION SCHEME .............
G-1
APPENDIX H TERMS, CONDITIONS AND PROCEDURES FOR APPLICATION AND
ACCEPTANCE...........................................................................................................
H-1
iii
CORPORATE INFORMATION
BOARD OF DIRECTORS
:
Melvin Goh (Executive Chairman and CEO)
Andy Goh (Executive Director and Deputy CEO)
Ng Tiak Soon (Non-Executive and Lead Independent Director)
Tan Siok Sing (Non-Executive Independent Director)
Lim Kim Quee (Non-Executive Independent Director)
JOINT COMPANY SECRETARIES
:
Siu Yeung Sau, CA (Singapore)
Loh Lee Eng, ACIS
REGISTERED OFFICE AND
PRINCIPAL PLACE OF BUSINESS
:
Singapore 608927
SHARE REGISTRAR AND
SHARE TRANSFER OFFICE
:
Tricor Barbinder Share Registration Services
(A division of Tricor Singapore Pte Ltd)
80 Robinson Road
#02-00
Singapore 068898
SPONSOR
:
CIMB Bank Berhad, Singapore Branch
50 Raffles Place
#09-01 Singapore Land Tower
Singapore 048623
UNDERWRITER AND PLACEMENT
AGENT
:
50 Raffles Place
Singapore 048623
INDEPENDENT AUDITORS AND
REPORTING ACCOUNTANTS
:
RSM Chio Lim LLP
8 Wilkie Road
#03-08 Wilkie Edge
Singapore 228095
Partner-in-charge: Paul Lee Seng Meng
(a member of the Institute of Singapore Chartered
Accountants)
SOLICITORS TO THE INVITATION
AND LEGAL ADVISER TO OUR
COMPANY ON SINGAPORE LAW
:
Rajah & Tann LLP
9 Battery Road
#25-01 Straits Trading Building
Singapore 049910
LEGAL ADVISER TO OUR
COMPANY IN RESPECT OF
MALAYSIAN LAW
:
Christopher & Lee Ong
Suite 3B-16-7 Level 16
Block 3B Plaza Sentral
Jalan Stesen Sentral 5
Kuala Lumpur Sentral
50470 Kuala Lumpur
SOLICITORS TO THE SPONSOR
AND THE UNDERWRITER AND
PLACEMENT AGENT
:
RHTLaw Taylor Wessing LLP
Six Battery Road #10-01
Singapore 049909
1
PRINCIPAL BANKERS
:
United Overseas Bank Limited
80 Raffles Place
UOB Plaza
Singapore 048624
Oversea-Chinese Banking Corporation Limited
65 Chulia Street
#09-00 OCBC Centre
Singapore 049513
RECEIVING BANK
:
50 Raffles Place
Singapore 048623
VENDORS
:
Melvin Goh
Singapore 608927
Andy Goh
Singapore 608927
2
DEFINITIONS
In this Offer Document and the accompanying Application Forms, the following definitions apply where
the context so admits:
Group Companies
“Company” or “EuroSports”
:
EuroSports Global Limited
“deLaCour Singapore”
:
deLaCour Asia Pacific Pte. Ltd.
“EuroAutomobile”
:
EuroAutomobile Pte. Ltd.
“EuroSports Auto”
:
EuroSports Auto Pte Ltd
“Group”
:
Our Company and our subsidiaries
“GTA Singapore”
:
Spania GTA Asia Pacific Private Ltd.
Other Corporations and Agencies
“Alfa Romeo Manufacturer”
:
Fiat Auto S.p.A.
“Auditors and Reporting
Accountants”
:
RSM Chio Lim LLP
“Authority” or “MAS”
:
The Monetary Authority of Singapore
“Brickfree”
:
Brickfree Pte. Ltd. (formerly known as Cityzines Pte. Ltd.)
“CDP”
:
The Central Depository (Pte) Limited
“CIMB” or “Sponsor”
:
“CPF”
:
The Central Provident Fund
“deLaCour Manufacturer”
:
Piallo GmbH
“E’ Collezione”
:
E’ Collezione Pte. Ltd.
“E-Elements”
:
E-Elements Pte. Ltd.
“EC”
:
Eminent Century Sdn Bhd
“ESE”
:
ES Evolution Sdn Bhd
“Gay Hin Enterprise”
:
Gay Hin Enterprise (Pte.) Ltd.
“GTA Spain”
:
Spania GTA Tecnomotive S.L.
“HDB”
:
The Housing & Development Board
“IRAS”
:
The Inland Revenue Authority of Singapore
“JH Italia”
:
JH Italia Sdn. Bhd.
“JTC”
:
Jurong Town Corporation
“Lamborghini Manufacturer”
:
Automobili Lamborghini S.p.A.
3
“Lotus Manufacturer”
:
Lotus Cars Limited
“LTA”
:
Land Transport Authority of Singapore
“Motor-Way Credit”
:
Motor-Way Credit Pte Ltd
“Pagani Manufacturer”
:
Pagani Automobili S.p.A.
“Placement Agent” or
“Underwriter” or “CIMB
Securities”
:
“PT EuroSport”
:
PT. EuroSport Auto
“Receiving Bank”
:
“SGX-ST”
:
Singapore Exchange Securities Trading Limited
“Share Registrar”
:
Tricor Barbinder Share Registration Services
“Touring Superleggera”
:
Carrozzeria Touring Superleggera s.r.l.
“7 and 9 Chang Charn Road”
:
7 Chang Charn Road Singapore 159636 and 9 Chang Charn
Road Singapore 159638
“11 Leng Kee Road”
:
11 Leng Kee Road Singapore 159091
“30 Teban Gardens Crescent”
:
30 Teban Gardens Crescent Singapore 608927
“1Q”
:
The three-month financial period ended 30 June
“Alfa Romeo Agreement”
:
The Import and Distribution Agreement dated 2 February 2004
between the Alfa Romeo Manufacturer and EuroAutomobile,
pursuant to which the Alfa Romeo Manufacturer granted the Alfa
Romeo distributorship in Singapore to EuroAutomobile
“Application Forms”
:
The printed application forms to be used for the purpose of the
Invitation and which form part of this Offer Document
“Application List”
:
The list of applications for subscription for and/or purchase, as the
case may be, of the Invitation Shares
“Articles” or “Articles of
Association”
:
The articles of association of our Company
“ATM”
:
Automated teller machine of a Participating Bank
“Audit Committee”
:
The audit committee of our Company as at the date of this Offer
Document, unless otherwise stated
“Audited Combined Financial
Statements”
:
The “Independent Auditors’ Report and the Audited Combined
Financial Statements for the Reporting Years ended 31 March
2011, 2012 and 2013” as set out in Appendix A of this Offer
Document
“Award”
:
An award of Shares granted under the Performance Share Plan
Locations
General
4
“Board” or “Board of Directors”
:
The board of Directors of our Company as at the date of this Offer
“CAGR”
:
Compound annual growth rate
“Catalist”
:
The sponsor-supervised listing platform of the SGX-ST
“Catalist Rules”
:
Section B of the Listing Manual of the SGX-ST, as amended,
modified or supplemented from time to time
“CEO”
:
Chief Executive Officer
“CFO”
:
Chief Financial Officer
“COO”
:
Chief Operating Officer
“Companies Act”
:
The Companies Act, (Chapter 50) of Singapore, as amended,
“Controlling Shareholder”
:
(a)
a person who has an interest in the voting shares of a
corporation and who exercises control over the corporation;
or
(b)
a person who has an interest of 15.0% or more in the
aggregate of the nominal amount of all the voting shares in
a corporation, unless he does not exercise control over the
corporation
“Directors”
:
The directors of our Company as at the date of this Offer
“Electronic Applications”
:
Applications for the Offer Shares made through an ATM or
through the IB website of one of the Participating Banks in
accordance with the terms and conditions of this Offer Document
“EPS”
:
Earnings per Share
“ESOS”
:
The EuroSports Employee Share Option Scheme, the terms of
which are set out in Appendix G of this Offer Document
“Executive Directors”
:
The executive Directors of our Company as at the date of this
Offer Document, unless otherwise stated
“Executive Officers”
:
The executive officers of our Group as at the date of this Offer
“FY”
:
Financial year ended or, as the case may be, ending 31 March
“GDP”
:
Gross domestic product
“GST”
:
Goods and services tax
“IB”
:
Internet banking
“Independent Directors”
:
The independent Directors of our Company as at the date of this
5
“Invitation”
:
The invitation by our Company and the Vendors to the public in
Singapore to subscribe for and/or purchase the Invitation Shares
at the Invitation Price, subject to and on the terms and conditions
of this Offer Document
“Invitation Price”
:
S$0.28 for each Invitation Share
“Invitation Shares”
:
The 80,000,000 Shares which are the subject of the Invitation,
comprising 40,000,000 New Shares and 40,000,000 Vendor
Shares
“Lamborghini Agreement”
:
The Dealer Agreement dated 2 October 2002 between the
Lamborghini Manufacturer and EuroSports Auto, pursuant to
which the Lamborghini Manufacturer granted the Lamborghini
dealership in Singapore to EuroSports Auto
“Latest Practicable Date”
:
30 November 2013, being the latest practicable date for the
purposes of lodgement of this Offer Document with the SGX-ST
“Lotus Agreement”
:
The International Dealer Agreement dated 30 January 2008
between the Lotus Manufacturer, Group Lotus plc, EuroSports
Auto, Melvin Goh and Andy Goh (as varied by a variation deed
dated 8 September 2010 and an agreement dated 2 January
2012), pursuant to which the Lotus Manufacturer granted the
Lotus dealership in Singapore to EuroSports Auto
“Management and Sponsorship
Agreement”
:
The management and sponsorship agreement dated 7
January 2014 entered into between our Company, the Vendors
and CIMB pursuant to which CIMB agreed to manage and
sponsor the Invitation, details as described in the section entitled
“General and Statutory Information – Management, Underwriting
and Placement Arrangements” of this Offer Document
“Market Day”
:
A day on which the SGX-ST is open for trading in securities
“Memorandum” or “Memorandum
of Association”
:
Memorandum of association of our Company
“NAV”
:
Net asset value
“New Shares”
:
The 40,000,000 new Shares for which our Company invites
applications to subscribe for pursuant to the Invitation, subject to
and on the terms and conditions set out in this Offer Document
“Nominating Committee”
:
The nominating committee of our Company as at the date of this
“Non-Executive Directors”
:
The non-executive Directors of our Company (including
Independent Directors) as at the date of this Offer Document,
unless otherwise stated
“NTA”
:
Net tangible assets
“Offer”
:
The offer by our Company and the Vendors to the public in
Singapore for subscription and/or purchase of the Offer Shares at
the Invitation Price, subject to and on the terms and conditions of
this Offer Document
“Offer Document”
:
This offer document dated 7 January 2014 issued by our
Company in respect of the Invitation
6
“Offer Shares”
:
The 1,500,000 Invitation Shares which are the subject of the Offer
“Options”
:
The share options which may be granted pursuant to the ESOS
“Option Shares”
:
The new Shares which may be allotted and issued from time to
time upon the exercise of the Options
“Pagani Agreement”
:
The Automobile Dealer Sales and Service Agreement dated 7
March 2012 entered into between the Pagani Manufacturer and
EuroAutomobile, pursuant to which the Pagani Manufacturer
granted the Pagani dealership in Singapore and Malaysia to
EuroAutomobile
“Participating Banks”
:
United Overseas Bank Limited (“UOB”) and its subsidiary, Far
Eastern Bank Limited (collectively, the “UOB Group”), DBS
Bank Ltd (including POSB) (“DBS Bank”) and Oversea-Chinese
Banking Corporation Limited (“OCBC”)
“PER”
:
Price earnings ratio
“Performance Shares”
:
The new Shares which may be allotted and issued from time
to time pursuant to the vesting of Awards granted under the
Performance Share Plan
“Performance Share Plan”
:
The EuroSports Performance Share Plan, the terms of which are
set out in Appendix F of this Offer Document
“Period under Review”
:
The period which comprises FY2011, FY2012, FY2013 and
1Q2014
“Placement”
:
The placement of the Placement Shares by the Placement Agent
on behalf of our Company and/or the Vendors for subscription
and/or purchase at the Invitation Price, subject to and on the
terms and conditions of this Offer Document
“Placement Shares”
:
The 78,500,000 Invitation Shares which are the subject of the
Placement
“PRC”
:
The People’s Republic of China, which for the purposes of this
Offer Document and for geographical reference only, excludes
Hong Kong and Macau Special Administrative Regions of the
People’s Republic of China, and Taiwan
“Remuneration Committee”
:
The remuneration committee of our Company as at the date of
this Offer Document, unless otherwise stated
“Restructuring Exercise”
:
The corporate restructuring exercise undertaken in connection
with the Invitation, as described in the section entitled
“Restructuring Exercise” of this Offer Document
“Sale and Leaseback
Arrangement”
:
The sale and leaseback arrangement relating to our Teban
Gardens Showrooms and Service Centres, details of which
can be found in the section entitled “General Information on our
Group – Properties and Fixed Assets – Sale and Leaseback
Arrangement” of this Offer Document
“Securities Account”
:
The securities account maintained by a Depositor with CDP, but
does not include a securities sub-account
7
“Securities and Futures Act” or
“SFA”
:
The Securities and Futures Act (Chapter 289) of Singapore, as
amended or modified from time to time
“SFR”
:
Securities and Futures (Offers of Investments) (Share and
Debentures) Regulations 2005 of Singapore
“Share(s)”
:
Ordinary share(s) in the capital of our Company
“Shareholder(s)”
:
Person(s) who are registered as holder(s) of Shares in the
register of members of our Company, or where CDP is the
registered holder, the term “Shareholders” shall, in relation to
such Shares, mean Depositors whose Securities Accounts are
credited with Shares
“Substantial Shareholder”
:
A person who has an interest or interests in one (1) or more
voting Shares (excluding treasury shares) in our Company and
the total votes attached to that Share, or those Shares, is not
less than five per cent. (5.0%) of the total votes attached to all the
voting Shares (excluding treasury shares) in our Company
“Teban Gardens Lease Extension” :
The lease extension of 22 years from 1 June 2017 relating
to our premises at 30 Teban Gardens Crescent, pursuant to
an agreement to lease dated 21 May 2013 between JTC and
EuroSports Auto, details of which can be found in the section
entitled “General Information on our Group – Properties and Fixed
Assets – Teban Gardens Lease Extension” of this Offer Document
“Teban Gardens Showrooms and
Service Centres”
:
Our showrooms and service centres located at 30 Teban Gardens
Crescent
“Unaudited Interim Combined
Financial Statements”
:
The “Independent Auditors’ Report and the Unaudited Combined
Financial Statements for the Reporting Period ended 30 June
2013” as set out in Appendix B of this Offer Document
“Unaudited Pro Forma Combined
Financial Information”
:
The “Independent Auditors’ Report and the Unaudited Pro Forma
Combined Financial Information for the Reporting Year ended 31
March 2013 and the Reporting Period ended 30 June 2013” as
set out in Appendix C of this Offer Document
“Underwriting and Placement
Agreement”
:
The underwriting and placement agreement dated 7 January
2014 entered into between our Company, the Vendors and
CIMB Securities pursuant to which CIMB Securities agreed to
(i) underwrite our offer of the Offer Shares; and (ii) subscribe
and/or procure subscribers for the Placement Shares, details
as described in the section entitled “General and Statutory
Information – Management, Underwriting and Placement
Arrangements” of this Offer Document
“USA”
:
United States of America
“Vendors”
:
Melvin Goh and Andy Goh
“Vendor Shares”
:
The 40,000,000 existing Shares for which the Vendors invite
applications to purchase, subject to and on the terms and
conditions of this Offer Document
“WSHA”
:
Workplace Safety and Health Act (Chapter 354A) of Singapore
8
Currencies, Units and Others
“%” or “per cent.”
:
Per centum
“bhp”
:
Brake horsepower
“cc”
:
Cylinder capacity
“€” or “EUR”
:
Euro, the lawful currency of the European Union
“£”
:
Pound sterling, the lawful currency of the United Kingdom
“m”
:
Metre
“S$” and “cents”
:
The lawful currency of Singapore, being dollars and cents
respectively
“sq ft”
:
Square feet
“sq m”
:
Square metre
“Swiss franc” or “CHF”
:
Swiss franc, the lawful currency of Switzerland
“US$”
:
United States dollar, the lawful currency of the United States of
America
For the purpose of this Offer Document, the following persons named in the second column below are
also known by the names set out in the first column:
Name used in this Offer
Document
:
Name in National Registration Identity Card
“Melvin Goh”
:
Goh Kim San
“Andy Goh”
:
Goh Kim Hup
The expressions “associate”, “associated company”, “associated entity”, “controlling interest-holder”,
“Controlling Shareholder”, “related corporation”, “related entity”, “Entity At Risk”, “Interested Person”,
“Interested Person Transaction”, “subsidiary”, “subsidiary entity” and “substantial interest-holder” shall
have the meanings ascribed to them respectively in the SFA, the SFR, the Companies Act and/or the
Catalist Rules, as the case may be.
The expressions “Depositor”, “Depository Agent” and “Depository Register” shall have the meanings
ascribed to them respectively in Section 130A of the Companies Act.
Any word defined under the Companies Act, the SFA, the SFR, the Catalist Rules or any statutory
modification thereof and used in this Offer Document, the Application Forms and Electronic Applications
shall, where applicable, have the meaning ascribed to it under the Companies Act, the SFA, the SFR, the
Catalist Rules or any statutory modification thereto, as the case may be.
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 and
vice versa. References to persons shall include corporations.
Any reference in this Offer Document, the Application Forms and Electronic Applications to any statute or
enactment is a reference to that statute or enactment as for the time being amended or re-enacted.
Any reference in this Offer Document, the Application Forms and Electronic Applications to Shares being
allotted to an applicant includes allotment to CDP for the account of that Applicant.
9
Any reference to a time of day in this Offer Document, the Application Forms and Electronic Applications
shall be a reference to Singapore time unless otherwise stated.
References in this Offer Document to “our Group”, “we”, “our”, and “us” or any other grammatical
variations thereof shall unless otherwise stated, mean our Company, our Group or any member of our
Group as the context requires.
Any discrepancies in the tables included herein 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. Where applicable, figures and percentages are rounded off.
10
GLOSSARY OF TECHNICAL TERMS
To facilitate a better understanding of the business of our Group, the following glossary contains an
explanation and description of certain terms used in this Offer Document in connection with our Group.
The terms and their assigned meanings may not correspond to standard industry or common meanings,
as the case may be, or usage of these terms.
“Alfa Romeo”
:
The brand of Alfa Romeo automobiles
“Alfa Romeo automobile”
:
An automobile manufactured by the Alfa Romeo Manufacturer
“Alfa Romeo distributorship”
:
The authorisations to, inter alia, distribute and/or retail Alfa
Romeo automobiles pursuant to the Alfa Romeo Agreement,
details of which are set out in the section entitled “General
Information on our Group – Our Distributorship and Dealership
Arrangements” of this Offer Document
“automobile parts and
accessories”
:
Spare parts and accessories for an automobile
“automobile brand”
:
A brand of automobiles
“automobile manufacturer”
:
A manufacturer of automobiles
“COE”
:
Certificate of entitlement
“GTA automobile”
:
An automobile manufactured by GTA Spain
“Lamborghini”
:
The brand of Lamborghini automobiles
“Lamborghini automobile”
:
An automobile manufactured by the Lamborghini Manufacturer
“Lamborghini dealership”
:
The authorisations to, inter alia, retail Lamborghini automobiles
pursuant to the Lamborghini Agreement, details of which are set
out in the section entitled “General Information on our Group –
Our Distributorship and Dealership Arrangements” of this Offer
Document
“Lemon Laws”
:
Consumer protection laws that provide remedies against goods
with latent defects
“Lotus”
:
The brand of Lotus automobiles
“Lotus automobile”
:
An automobile manufactured by the Lotus Manufacturer
“Lotus dealership”
:
The authorisation to, inter alia, retail Lotus automobiles pursuant
to the Lotus Agreement
“luxury automobile”
:
Passenger automobile with a typical retail price range between
approximately S$200,000 and approximately S$800,000
“Pagani”
:
The brand of Pagani automobiles
“Pagani automobile”
:
An automobile manufactured by the Pagani Manufacturer
11
“Pagani dealership”
:
The authorisation to, inter alia, retail Pagani automobiles
pursuant to the Pagani Agreement, details of which are set out
in the section entitled “General Information on our Group – Our
Distributorship and Dealership Arrangements” of this Offer
Document
“pre-owned automobile”
:
A used automobile which has one (1) or more prior owners
“service centre”
:
Dedicated service centre that provides automobile repair,
maintenance and grooming services and also retails automobile
parts and accessories
“showroom”
:
Dedicated automobile display and sales centre
“Touring Superleggera
distributorship”
:
The authorisations to, inter alia, distribute and/or retail
automobiles supplied by Touring Superleggera, details of which
are set out in the section entitled “General Information on our
Group – Our Distributorship and Dealership Arrangements” of this
Offer Document
“ultra-luxury automobile”
:
Passenger automobile with typical retail price range of
approximately S$800,000 and above
12
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
All statements contained in this Offer Document, statements made in press releases and oral statements
that may be made by us or our Directors, Executive Officers or employees acting on our behalf or the
Vendors’ behalf, that are not statements of historical fact, constitute “forward-looking statements”. You
can identify some of these statements by forward-looking terms such as “anticipate”, “believe”, “could”,
“estimate”, “profit estimate”, “expect”, “intend”, “may”, “plan”, “will” and “would” or similar words. However,
you should note that these words are not the exclusive means of identifying forward-looking statements.
All statements regarding our expected financial position, trend information, business strategies, plans and
prospects are forward-looking statements.
These forward-looking statements, including without limitation, statements as to:

our revenue and profitability;

projections of capital expenditures in general and other financial items;

our planned expansion and whether we can successfully execute, manage and/or implement it;

any expected growth;

other expected industry trends; and

anticipated completion of proposed plans and other matters discussed in this Offer Document
regarding matters that are not historical facts,
are only predictions. Forward-looking statements reflect our current views with respect to future
events and are not a guarantee of future performance. These statements are based on our beliefs
and assumptions, which in turn are based on currently available information. Although we believe
the assumptions upon which these forward-looking statements are based are reasonable, any of
these assumptions could prove to be inaccurate, and the forward-looking statements based on these
assumptions could be incorrect.
These forward-looking statements involve known and unknown risks, uncertainties and other factors that
may cause our actual results, performance or achievements to be materially different from any future
results, performance or achievements expressed or implied by such forward-looking statements. These
risks, uncertainties and other important factors include, in no particular order of priority and amongst
others, the following:

changes in political, social and economic conditions and the regulatory environment in the places
in which we conduct our business;

changes in government regulations and their interpretation;

our anticipated growth strategies and expected internal growth;

changes in customer demand or preferences;

changes in competitive conditions and our ability to compete under these conditions;

changes in our senior management team or loss of key employees;

changes in our future capital needs and the availability of financing and capital to fund these needs;

the ability of third parties to honour their commitments;

other factors beyond our control; and

the factors described in the section entitled “Risk Factors” of this Offer Document.
13
Some of these risk factors are discussed in more detail in this Offer Document, in particular, the
discussions under the sections entitled “Risk Factors” and “Management’s Discussion and Analysis of
Financial Position and Results of Operations” of this Offer Document. These forward-looking statements
are applicable only as at the date of this Offer Document.
Given the risks and uncertainties that may cause our actual future results, performance or achievements
to be materially different from that expected, expressed or implied by the forward-looking statements in
this Offer Document, undue reliance must not be placed on these statements which apply only as at
the date of this Offer Document. Neither our Company, the Vendors, the Sponsor, the Underwriter and
Placement Agent nor any other person represents or warrants that our Group’s actual future results,
performance or achievements will be as discussed in those statements.
All forward-looking statements by or attributable to us, the Vendors or persons acting on our behalf,
contained in this Offer Document are expressly qualified in their entirety by such factors. Our actual
results may differ materially from those anticipated in these forward-looking statements as a result of
the risks faced by us. We, the Vendors, the Sponsor, the Underwriter and Placement Agent disclaim any
responsibility to update any of those forward-looking statements or publicly announce any revisions to
those forward-looking statements to reflect future developments, events or circumstances. We and the
Vendors are, however, subject to the provisions of the SFA, the SFR and the Catalist Rules regarding
corporate disclosure. In particular, pursuant to Section 241 of the SFA, if after the registration of this
Offer Document but before the close of the Invitation, we and the Vendors become aware of (a) a false
or misleading statement or matter in this Offer Document; (b) an omission from this Offer Document of
any information that should have been included in it under the SFA, the SFR or the Catalist Rules; or
(c) a new circumstance that has arisen since this Offer Document was lodged with the SGX-ST acting
as agent on behalf of the Authority which would have been required by the SFA, the SFR or the Catalist
Rules to be included in this Offer Document if it had arisen before this Offer Document was lodged and
that is materially adverse from the point of view of an investor, our Company may in consultation with
the Sponsor and the Underwriter and Placement Agent, lodge a supplementary or replacement offer
document with the SGX-ST acting as agent on behalf of the Authority.
14
SELLING RESTRICTIONS
This Offer Document does not constitute an offer, solicitation or invitation to subscribe for and/or
purchase the Invitation Shares in any jurisdiction in which such offer, solicitation or invitation is unlawful
or is not authorised or to any person to whom it is unlawful to make such offer, solicitation or invitation.
No action has been or will be taken under the requirements of the legislation or regulations of, or of the
legal or regulatory requirements of any jurisdiction, except for the lodgement and/or registration of this
Offer Document in Singapore in order to permit a public offering of the Invitation Shares and the public
distribution of this Offer Document in Singapore. The distribution of this Offer Document and the offering
of the Invitation Shares in certain jurisdictions may be restricted by the relevant laws in such jurisdictions.
Persons who may come into possession of this Offer Document are required by our Company, the
Vendors, the Sponsor and the Underwriter and Placement Agent to inform themselves about, and to
observe and comply with, any such restrictions at their own expense and without liability to our Company,
the Vendors, the Sponsor and/or the Underwriter and Placement Agent. Persons to whom a copy of this
Offer Document has been issued shall not circulate to any other person, reproduce or otherwise distribute
this Offer Document or any information herein for any purpose whatsoever nor permit or cause the same
to occur.
15
DETAILS OF THE INVITATION
LISTING ON CATALIST
CIMB has on our behalf made an application to the SGX-ST for permission to deal in, and for quotation
of, all our Shares already issued (including the Vendor Shares), the New Shares, the Performance Shares
and the Option Shares, on Catalist. Such permission will be granted when our Company has been
admitted to Catalist. Acceptances of applications and the allotment and allocation of the Invitation Shares
will be conditional upon, inter alia, the completion of the Invitation, which is subject to certain conditions,
including permission being granted by the SGX-ST to deal in, and for quotation of, all our existing issued
Shares (including the Vendor Shares), the New Shares, the Performance Shares and the Option Shares.
If the completion of the Invitation does not occur, or the said permission from the SGX-ST is not granted
for any reason, monies paid in respect of any application accepted will be returned to you at your own
risk, without interest or any share of revenue or other benefit arising therefrom and you will not have
any claim against our Company, the Vendors, the Sponsor or the Underwriter and Placement Agent. No
Shares will be allotted or allocated on the basis of this Offer Document later than six (6) months after the
date of registration of this Offer Document by the SGX-ST, acting as agent on behalf of the Authority.
Companies listed on Catalist may carry higher investment risk when compared with larger or more
established companies listed on the SGX-ST Main Board. In particular, companies may list on Catalist
without a track record of profitability and there is no assurance that there will be a liquid market in
the shares or units of shares traded on Catalist. You should be aware of the risks of investing in such
companies and should make the decision to invest only after careful consideration and, if appropriate,
consultation with your professional adviser(s).
Neither the Authority nor the SGX-ST has examined or approved the contents of this Offer Document.
Neither the Authority nor the SGX-ST assumes any responsibility for the contents of this Offer Document,
including the correctness of any of the statements or opinions made or reports contained in this Offer
Document. The SGX-ST does not normally review the application for admission but relies on the Sponsor
confirming that our Company is suitable to be listed and complies with the Catalist Rules.
Admission to Catalist is not to be taken as an indication of the merits of the Invitation, our Company, our
subsidiaries, our existing issued Shares (including the Vendor Shares), the New Shares, the Performance
Shares and the Option Shares.
A copy of this Offer Document has been lodged with and registered by the SGX-ST, acting as agent on
behalf of the Authority. Registration of the Offer Document by the SGX-ST, acting as agent on behalf
of the Authority, does not imply that the SFA or any other legal or regulatory requirements, have been
complied with. The SGX-ST has not, in any way, considered the merits of our existing issued Shares
(including the Vendor Shares), the New Shares, the Performance Shares or the Option Shares, as the
case may be, being offered or in respect of which an invitation is made, for investment. We have not
lodged or registered this Offer Document in any other jurisdiction.
We and the Vendors are subject to the provisions of the SFA, the SFR and the Catalist Rules regarding
corporate disclosure. In particular, pursuant to Section 241 of the SFA, if after the registration of this Offer
Document but before the close of the Invitation, we and the Vendors become aware of:
(a)
a false or misleading statement or matter in this Offer Document;
(b)
an omission from this Offer Document of any information that should have been included in it under
the SFA, the SFR or the Catalist Rules; or
(c)
a new circumstance that has arisen since this Offer Document was lodged with the SGX-ST, acting
as agent on behalf of the Authority and which would have been required by the SFA, the SFR or
the Catalist Rules to be included in this Offer Document if it had arisen before this Offer Document
was lodged,
that is materially adverse from the point of view of an investor, we and the Vendors may lodge a
supplementary or replacement offer document with the SGX-ST acting as agent on behalf of the Authority
pursuant to Section 241 of the SFA.
16
In the event that a supplementary or replacement Offer Document is lodged with the SGX-ST acting as
agent on behalf of the Authority, the Invitation shall be kept open for at least 14 days after the lodgement
of such supplementary or replacement Offer Document.
Where prior to the lodgement of the supplementary or replacement offer document, applications have
been made under this Offer Document to subscribe for and/or purchase the Invitation Shares and:
(a)
(b)
where the Invitation Shares have not been issued and/or transferred to the applicants, we (for our
Company as well as on behalf of the Vendors) shall either:
(i)
within two (2) days (excluding any Saturday, Sunday or public holiday) from the date of
lodgement of the supplementary or replacement offer document, give the applicants notice in
writing of how to obtain, or arrange to receive, a copy of the supplementary or replacement
offer document, as the case may be, and provide the applicants with an option to withdraw
their applications, and take all reasonable steps to make available within a reasonable period
the supplementary or replacement offer document, as the case may be, to the applicants
who have indicated they wish to obtain, or who have arranged to receive, a copy of the
supplementary or replacement offer document;
(ii)
within seven (7) days from the date of lodgement of the supplementary or replacement offer
document, give the applicants the supplementary or replacement offer document, as the
case may be, and provide the applicants with an option to withdraw their applications; or
(iii)
treat the applications as withdrawn and cancelled, in which case the applications shall
be deemed to have been withdrawn and cancelled, and we (for our Company as well as
on behalf of the Vendors) shall, within seven (7) days from the date of lodgement of the
supplementary or replacement offer document, pay the applicants all monies the applicants
have paid on account of their applications for the Invitation Shares without interest or any
share of revenue or other benefit arising therefrom and at the applicants’ own risk and
the applicants shall not have any claim against us, the Vendors, the Sponsor and/or the
Underwriter and Placement Agent; or
where the Invitation Shares have been issued and/or transferred to the applicants, we (for our
Company as well as on behalf of the Vendors) shall either:
(i)
within two (2) days (excluding any Saturday, Sunday or public holiday) from the date of
lodgement of the supplementary or replacement offer document, give the applicants notice in
writing of how to obtain, or arrange to receive, a copy of the same and provide the applicants
with an option to return to us (for our Company as well as on behalf of the Vendors) the
Invitation Shares which they do not wish to retain title in, and take all reasonable steps
to make available within a reasonable period the supplementary or replacement offer
document, as the case may be, to the applicants who have indicated they wish to obtain, or
who have arranged to receive, a copy of the supplementary or replacement offer document;
(ii)
within seven (7) days from the date of lodgement of the supplementary or replacement offer
document, give the applicants the supplementary or replacement offer document, as the
case may be, and provide the applicants with an option to return to us (for our Company as
well as on behalf of the Vendors) the Invitation Shares which they do not wish to retain title
in; or
(iii)
(A)
in the case of the New Shares, deem the issue as void and refund the applicants’
payments for the New Shares (without interest or any share of revenue or other
benefits arising therefrom and at the applicants’ own risk) within seven (7) days from
the date of lodgment of the supplementary or replacement offer document; and
(B)
in the case of Vendor Shares, deem the sale of the Vendor Shares as void, and in the
case where documents to evidence title to the Vendor Shares (the “title documents”)
have been issued to the applicants, within seven (7) days from the date of lodgment
of the supplementary or replacement offer document, inform the applicants to
return the title documents within 14 Market Days from the date of lodgment of the
17
supplementary or replacement offer document, and within seven (7) days from receipt
of the title documents or the date of lodgment of the supplementary or replacement
offer document, whichever is the later, refund the applicants’ payments for the Vendor
Shares (without interest or any share of revenue or other benefits arising therefrom
and at the applicants’ own risk),
and the applicants shall not have any claim against our Company, the Vendors, the Sponsor and
the Underwriter and Placement Agent.
An applicant who wishes to exercise his option under paragraph (a)(i) or (ii) to withdraw his application
shall, within 14 days from the date of lodgement of the supplementary or replacement offer document,
notify us of this, whereupon we (for our Company as well as on behalf of the Vendors) shall, within
seven (7) days from the receipt of such notification, pay to him all monies paid by him on account of
his application for the Invitation Shares without interest or any share of revenue or other benefit arising
therefrom and at the applicant’s own risk and the applicant shall not have any claim against us, the
Vendors, the Sponsor and/or the Underwriter and Placement Agent.
An applicant who wishes to exercise his option under paragraph (b)(i) or (ii) to return the Invitation Shares
issued and/or transferred to him shall, within 14 days from the date of lodgement of the supplementary or
replacement offer document, notify us of this and return all documents, if any, purporting to be evidence
of title to those Invitation Shares, to us, whereupon we (for our Company as well as on behalf of the
Vendors) shall, within seven (7) days from the receipt of such notification and documents, if any, pay to
him all monies paid by him for those Invitation Shares without interest or any share of revenue or other
benefit arising therefrom and at his own risk, and the issue and/or transfer of those Invitation Shares shall
be deemed to be void, and he shall not have any claim against us, the Vendors, the Sponsor and/or the
Underwriter and Placement Agent.
The Authority, the SGX-ST (acting as agent on behalf of the Authority) or other competent authority may,
in certain circumstances issue a stop order (the “Stop Order”) to our Company, directing that no or no
further Invitation Shares be alloted, allocated, issued and/or sold.
In the event that the Authority issues a Stop Order and applications to subscribe for and/or purchase the
Invitation Shares have been made prior to the Stop Order, then:
(a)
where the Invitation Shares have not been issued and/or transferred to the applicants, the
applications of the Invitation Shares pursuant to the Invitation shall be deemed to have been
withdrawn and cancelled and we (for our Company as well as on behalf of the Vendors) shall,
within 14 days from the date of the Stop Order, pay to the applicants all monies the applicants have
paid on account of their applications for the Invitation Shares; or
(b)
where the Invitation Shares have been issued and/or transferred to the applicants, the issue
and/or transfer of the Invitation Shares pursuant to the Invitation shall be deemed to be void and
we (for our Company as well as on behalf of the Vendors) shall, within 14 days from the date of the
Stop Order, pay to the applicants all monies paid by them for the Invitation Shares,
and the applicants shall not have any claim against our Company, the Vendors, the Sponsor or the
Such monies paid in respect of an application will be returned to the applicants at their own risk, without
interest or any share of revenue or other benefit arising therefrom, and they will not have any claim
against us, the Vendors, the Sponsor and/or the Underwriter and Placement Agent.
This Offer Document has been seen and approved by our Directors and the Vendors and they collectively
and individually accept full responsibility for the accuracy of the information given in this Offer Document
and confirm after making all reasonable enquiries, that to the best of their knowledge and belief, this
Offer Document constitutes full and true disclosure of all material facts about the Invitation and our
Group, and our Directors and the Vendors are not aware of any facts the omission of which would make
any statement in this Offer Document misleading. Where information in this Offer Document has been
extracted from published or otherwise publicly available sources or obtained from a named source, the
sole responsibility of our Directors and the Vendors has been to ensure that such information has been
accurately and correctly extracted from those sources and/or reproduced in this Offer Document in its
proper form and context.
18
Neither our Company, the Vendors, the Sponsor, the Underwriter and Placement Agent, nor any other
parties involved in the Invitation is making any representation to any person regarding the legality of an
investment by such person under any investment or other laws or regulations. No information in this Offer
Document should be considered as being business, legal or tax advice regarding an investment in our
Shares. Each prospective investor should consult his own professional or other advisers for business,
legal or tax advice regarding an investment in our Shares.
No person has been or is authorised to give any information or to make any representation not contained
in this Offer Document in connection with the Invitation and, if given or made, such information or
representation must not be relied upon as having been authorised by us, the Vendors, the Sponsor and
the Underwriter and Placement Agent. Neither the delivery of this Offer Document and the Application
Forms nor any documents relating to the Invitation, nor the Invitation shall, under any circumstances,
constitute a continuing representation or create any suggestion or implication that there has been no
change in the affairs of our Company or our subsidiaries or in any statements of fact or information
contained in this Offer Document since the date of this Offer Document. Where such changes occur and
are material or required to be disclosed by law, the SGX-ST and/or any other regulatory or supervisory
body or agency, we will comply with the relevant provisions and, if required, make an announcement
of the same to the SGX-ST and to the public and/or lodge a supplementary or replacement offer
document with the SGX-ST acting as agent on behalf of the Authority. You should take note of any such
announcement and, upon release of such an announcement, shall be deemed to have been given notice
of such changes.
Save as expressly stated in this Offer Document, nothing herein is, or may be relied upon as, a
promise or representation as to our future performance or policies. The Invitation Shares are offered for
subscription for and/or purchase solely on the basis of the instructions contained and representations
made in the Offer Document.
This Offer Document has been prepared solely for the purpose of the Invitation and may not be relied
upon by any persons other than the applicants in connection with their application for the Invitation
Shares or for any other purpose.
This Offer Document does not constitute an offer, solicitation or invitation to subscribe for and/or
purchase the Invitation Shares in any jurisdiction in which such offer, solicitation or invitation is
unlawful or unauthorised nor does it constitute an offer, solicitation or invitation to any person to
whom it is unlawful to make such offer, solicitation or invitation.
Copies of this Offer Document and the Application Forms may be obtained on request, subject to
availability during office hours, from:
CIMB Investment Centre
50 Raffles Place
Singapore 048623
A copy of this Offer Document is also available on the SGX-ST website, http://www.sgx.com.
The Application List will open immediately upon the registration of this Offer Document by the
SGX-ST acting as agent on behalf of the Authority and will remain open until 12.00 noon on 15
January 2014 or for such further period or periods as our Directors and the Vendors may, in
consultation with the Sponsor and the Underwriter and Placement Agent, in their absolute
discretion decide, subject to any limitation under all applicable laws and regulations. In the event
a supplementary offer document or replacement offer document is lodged with the SGX-ST acting
as agent on behalf of the Authority, the Application List will remain open for at least 14 days after
the lodgement of the supplementary or replacement offer document.
Details of the procedures to subscribe for and/or purchase the Invitation Shares are set out in
Appendix H of this Offer Document.
19
INDICATIVE TIMETABLE FOR LISTING
An indicative timetable for the Invitation and trading in our Shares is set out below:
Indicative date/time
Event
15 January 2014, 12.00 noon
Close of Application List
16 January 2014
Balloting of applications, if necessary (in the event of oversubscription for and/or purchase of the Offer Shares)
17 January 2014, 9.00 a.m.
Commence trading on a “ready” basis
22 January 2014
Settlement date for all trades done on a “ready” basis
The above timetable is only indicative as it assumes that the date of closing of the Application List is
15 January 2014, the date of admission of our Company to Catalist is 17 January 2014, the SGX-ST’s
shareholding spread requirement will be complied with and the Invitation Shares will be allotted and/or
allocated and fully paid-up prior to 17 January 2014.
The above timetable and procedures may be subject to such modifications as the SGX-ST may,
in its absolute discretion, decide, including the decision to permit commencement of trading on a
“ready” basis and the commencement date of such trading.
In the event of any changes in the closure of the Application List or the time period during which the
Invitation is open, we will publicly announce the same:
(a)
through a SGXNET announcement to be posted on the internet at the SGX-ST website,
http://www.sgx.com; and
(b)
in a major local English newspaper.
We will publicly announce the level of subscription for and/or purchase of the Invitation Shares and the
basis of allotment and/or allocation of the Invitation Shares as soon as it is practicable after the close of
the Application List through the channels described in (a) and (b) above.
We and the Vendors reserve the right to reject or accept, in whole or in part, or to scale down or ballot
any application for the Invitation Shares, without assigning any reason therefor, and no enquiry and/or
correspondence on our decision will be entertained. In deciding the basis of allotment and/or allocation,
due consideration will be given to the desirability of allotting and/or allocating the Invitation Shares to a
reasonable number of applicants with a view to establish an adequate market for our Shares.
Investors should consult the SGX-ST announcement on the “ready” trading date on the internet
(at the SGX-ST website, http://www.sgx.com) or the newspapers, or check with their brokers on
the date on which trading on a “ready” basis will commence.
20
PLAN OF DISTRIBUTION
The Invitation
The Invitation is for 80,000,000 Invitation Shares comprising 40,000,000 New Shares and 40,000,000
Vendor Shares offered in Singapore by way of public offer and placement comprising 1,500,000 Offer
Shares and 78,500,000 Placement Shares respectively and managed by CIMB and underwritten by CIMB
Securities.
Prior to the Invitation, there has been no public market for our Shares. The Invitation Price is determined
by our Company and the Vendors following consultation with the Sponsor and the Underwriter and
Placement Agent, taking into consideration, inter alia, the prevailing market conditions and estimated
market demand for our Shares (including the New Shares and the Vendor Shares) determined through a
book-building process. The Invitation Price is the same for all Invitation Shares and is payable in full on
application.
Pursuant to the Management and Sponsorship Agreement, we and the Vendors have appointed CIMB
and CIMB has agreed to manage and sponsor the Invitation.
Offer Shares
The Offer Shares are made available to the members of the public in Singapore for subscription and/or
purchase at the Invitation Price. The terms, conditions and procedures for application and acceptance are
set out in Appendix H of this Offer Document entitled “Terms, Conditions and Procedures for Application
and Acceptance”.
An applicant who has made an application for Offer Shares by way of an Application Form may not make
another separate application for Offer Shares by way of an Electronic Application and vice versa. Such
separate applications shall be deemed to be multiple applications and shall be rejected.
Pursuant to the Underwriting and Placement Agreement, CIMB Securities has agreed to underwrite our
offer of the Offer Shares for a commission of three per cent. (3.0%) of the Invitation Price for each Offer
Share (“Underwriting Commission”), payable by our Company and the Vendors (in the proportion in
which the Offer Shares are offered by our Company and the Vendors) pursuant to the Invitation. CIMB
Securities may, at its absolute discretion, appoint one (1) or more sub-underwriters for the Offer Shares.
Brokerage will be paid by our Company to members of the SGX-ST, merchant banks and members of
the Association of Banks in Singapore in respect of successful applications made on Application Forms
bearing their respective stamps, or to Participating Banks in respect of successful applications made
through Electronic Applications at their respective ATMs or IB websites at the rate of 0.25% of the
Invitation Price for each Offer Share or in the case of DBS Bank, 0.75% of the Invitation Price for each
Offer Share. This brokerage has already been included in the Underwriting Commission stated above. In
addition, DBS Bank will levy a minimum brokerage fee of S$10,000.
In the event of an under-subscription for and/or purchase of the Offer Shares as at the close of the
Application List, that number of Offer Shares not applied for shall be made available to satisfy excess
applications for the Placement Shares to the extent there is an over-subscription for the Placement
Shares as at the close of the Application List.
In the event of an over-subscription for and/or purchase of the Offer Shares as at the close of the
Application List and/or the Placement Shares are fully subscribed or over-subscribed and/or purchased
as at the close of the Application List, the successful applications for the Offer Shares will be determined
by ballot or otherwise as determined by our Directors and the Vendors after consultation with the Sponsor
and the Underwriter and Placement Agent and approved by the SGX-ST.
21
Placement Shares
The Placement Shares are made available to members of the public and institutional investors in
Singapore.
Application for the Placement Shares may only be made by way of the Application Forms. The terms,
conditions and procedures for application and acceptance are set out in Appendix H of this Offer
Document entitled “Terms, Conditions and Procedures for Application and Acceptance”.
Pursuant to the Underwriting and Placement Agreement, CIMB Securities has agreed to subscribe for
and/or purchase, or procure subscriptions for and/or purchases of the Placement Shares for a placement
commission of three per cent. (3.0%) of the Invitation Price for each Placement Share, payable by our
Company and the Vendors (in the proportion in which the Placement Shares are offered by our Company
and the Vendors). The Placement Agent may, at its absolute discretion, appoint one (1) or more subplacement agents for the Placement Shares.
Purchasers and subscribers of the Placement Shares may be required to pay a brokerage of up to
one per cent. (1.0%) of the Invitation Price to the Placement Agent (and the prevailing GST thereon, if
applicable).
The Underwriting and Placement Agreement is conditional upon, among other things, the Management
and Sponsorship Agreement not having been terminated or rescinded pursuant to the provisions of the
Management and Sponsorship Agreement.
In the event of an under-subscription and/or purchase of the Placement Shares as at the close of the
Application List, that number of Placement Shares not subscribed for and/or purchased shall be made
available to satisfy excess applications for the Offer Shares to the extent that there is an over-subscription
for and/or purchase of the Offer Shares as at the close of the Application List.
Subscription for Invitation Shares
To the best of our knowledge and belief, none of our Directors (including our Independent Directors) or
Substantial Shareholders intends to subscribe for and/or purchase the Invitation Shares in the Invitation.
If such person(s) were to make an application for Invitation Shares and are subsequently allotted
and/or allocated such number of Invitation Shares, we will make the necessary announcements at an
appropriate time.
To the best of our knowledge and belief, none of the members of our management or employees intends
to subscribe for and/or purchase more than five per cent. (5.0%) of the Invitation Shares in the Invitation.
To the best of our knowledge and belief, as at the date of this Offer Document, we are not aware of any
person who intends to subscribe for and/or purchase more than five per cent. (5.0%) of the Invitation
Shares. However, through a book-building process to assess market demand for our Shares, there may
be person(s) who may indicate an interest to subscribe for and/or purchase Shares amounting to more
than five per cent. (5.0)% of the Invitation Shares. If such person(s) were to make an application for
more than five per cent. (5.0%) of the Invitation Shares and are subsequently allotted and/or allocated
such number of Shares, we will make the necessary announcements at an appropriate time. The final
allotment and/or allocation of Shares will be made in accordance with the shareholding spread and
distribution guidelines as set out in the Catalist Rules.
No Shares shall be allotted and/or allocated on the basis of this Offer Document later than six (6) months
after the date of registration of this Offer Document by the SGX-ST, acting as agent on behalf of the
Authority.
22
OFFER DOCUMENT SUMMARY
The information contained in this summary is derived from, and should be read in conjunction with,
the full text of this Offer Document. As it is a summary, it does not contain all of the information that
prospective investors should consider before investing in our Shares. Prospective investors should read
this entire Offer Document carefully, especially the section entitled “Risk Factors” of this Offer Document
and our financial statements and related notes before deciding on whether or not to invest in our Shares.
Under no circumstances should any information in this summary be regarded as a representation or
warranty by our Company, the Vendors, the Sponsor and/or the Underwriter and Placement Agent that
such information will not change.
OUR GROUP
Our Company was incorporated in the Republic of Singapore on 12 December 2012 under the
Companies Act as a private limited company, under the name of EuroSports Global Pte. Ltd.. Pursuant
to the Restructuring Exercise, our Company became the holding company of our subsidiaries, namely
EuroSports Auto, EuroAutomobile, GTA Singapore and deLaCour Singapore. On 5 December 2013,
our Company was converted into a public company limited by shares and we changed our name to
“EuroSports Global Limited”. Please refer to the section entitled “Restructuring Exercise” of this Offer
Document for further details.
OUR BUSINESS
We specialise in the business of distribution of ultra-luxury automobiles and luxury automobiles and
provision of after-sales services. Our automobile distribution business retails new ultra-luxury automobiles
and luxury automobiles as well as pre-owned automobiles. As at the Latest Practicable Date, we
carry automobile brands comprising mainly Lamborghini, Pagani and Alfa Romeo, and customised
automobiles supplied by Touring Superleggera. The provision of our after-sales services includes sales
of automobile parts and accessories. Incidentally, we also operate an automobile leasing business as an
ancillary business complementing our automobile distribution business. Since September 2012, we have
embarked on the luxury watch distribution and retail business.
Our revenue was substantially derived from our sale of new and pre-owned automobiles, which
accounted for approximately 95.4%, 95.7%, 91.0%, 94.7% and 88.7% of our total revenue for FY2011,
FY2012, FY2013, 1Q2013 and 1Q2014 respectively. Revenue from the provision of after-sales services
accounted for approximately 4.6%, 4.3%, 6.4%, 5.3% and 7.9% of our total revenue in FY2011,
FY2012, FY2013, 1Q2013 and 1Q2014 respectively. Revenue from our sale of watches accounted
for approximately 2.6% and 3.4% of our total revenue for FY2013 and 1Q2014. Revenue from our
automobile leasing business has not been significant for the Period under Review.
Further details are set out in the sections entitled “General Information on our Group – History and
Development” and “General Information on our Group – Business Overview” of this Offer Document.
Our competitive strengths are:

We have developed strong relationships with our customers through personalised and
quality customer service
We place great emphasis on understanding the needs and requirements of our customers and
providing them with the quality services that they would expect. In keeping with the ultra-luxury or
luxury branding and image of the automobiles we sell, we ensure that our service standards match
up to such expectations by putting the right people in the right place to provide sales or after-sales
services of the highest standards. We believe that our emphasis on personalised customer service
has contributed to a high level of repeat sales to existing customers.
23

We carry strong and well-established automobile brands
We carry strong and well-established automobile brands, including Lamborghini which is a wellestablished automobile brand both globally and in Singapore. The strength of the automobile
brands we carry, coupled with our focused sales and marketing activities, has been a key
contributor to our growth.

We maintain an established relationship with automobile manufacturers
As at the Latest Practicable Date, we are the only authorised dealer for Lamborghini automobiles
in Singapore, and the exclusive distributor for Alfa Romeo automobiles in Singapore. We have an
established relationship with these two existing automobile manufacturers, both in terms of the
length of time we have been working together and the depth of our working relationships with
them. We believe that our strong and long-standing relationships with these existing automobile
manufacturers, strong sales, high customer satisfaction and proven track record place us in
a favourable position to maintain the existing distributorships and/or dealerships with these
automobile manufacturers. We also believe that our reputation as an ultra-luxury automobiles
and luxury automobiles dealership group gives us competitive advantages in obtaining new
distributorships and/or dealerships from other automobile manufacturers in Singapore or overseas
in the future.

We have an experienced and committed management team with proven track record
Our Group is led by our Executive Chairman and CEO, Melvin Goh, who has more than 30 years
of experience in the automobile industry. Our Executive Director and Deputy CEO, Andy Goh, has
over 28 years of experience in the automobile industry and our COO, Dennis Yang Yung Kang, has
more than 35 years of relevant experience and in-depth expertise in the automobile industry.
For further details, please refer to the section entitled “General Information on our Group – Competitive
Strengths” of this Offer Document.
BUSINESS STRATEGIES AND FUTURE PLANS

Expansion of our operations locally and into other markets and acquisitions of new
We intend to grow our distribution network locally and into other emerging markets in the region. To
this end, we may expand our distribution network for our existing products into overseas markets
or secure distributorships and/or dealerships for new ultra-luxury automobiles and/or luxury
automobiles. For overseas expansion, we may acquire local existing distributorships or dealerships
which are already in the ultra-luxury automobile and luxury automobile markets in that country.

Construction of improved or new facilities for our operations
We intend to expand our operations by way of acquiring and/or constructing improved or new
facilities to house our offices, showrooms, service centres and automobile parts and accessories
stores. As at the Latest Practicable Date, we have constructed an annex to our premises at 30
Teban Gardens Crescent. In addition, we have plans to construct new facilities, consisting of
offices, showrooms, service centres and automobile parts and accessories stores, at 7 and 9
Chang Charn Road.

Diversification into other luxury lifestyle businesses
We have plans to diversify into other businesses in the luxury segment in order to leverage on our
established pool of high net worth customers. These businesses will complement our automobile
distribution business by providing more luxury lifestyle product choices to our existing customers.
In line with our vision to be a provider of luxury lifestyle products, we have embarked on the luxury
watch distribution and retail business.
24

Expand our business through joint ventures and strategic alliances
We may also expand our businesses through joint ventures and strategic alliances which we
believe will complement our current and future businesses.
For further details, please refer to the section entitled “General Information on our Group – Business
Strategies and Future Plans” of this Offer Document.
SUMMARY OF OUR FINANCIAL INFORMATION
The following table represents a summary of the financial highlights of our Group. The data presented in
this table is derived from the Audited Combined Financial Statements, the Unaudited Interim Combined
Financial Statements, the section entitled “Selected Combined Financial Information” and the financial
statements and notes thereto which are included elsewhere in this Offer Document. You should read
those sections and the section entitled “Management’s Discussion and Analysis of Financial Position and
Results of Operations” of this Offer Document for a further explanation of the financial data summarised
here.
Selected Items from the Combined Statements of Comprehensive Income of our Group
Unaudited
Audited
S$’000
FY2011
FY2012
FY2013
1Q2013
1Q2014
Revenue
107,178
113,042
86,368
25,648
19,563
12,527
18,529
17,197
5,560
4,905
Profit Before Tax
3,260
9,327
8,345
3,490
2,602
Profit, Net of Tax
2,726
7,636
6,719
2,897
2,159
Gross Profit
Selected Items from the Combined Statements of Financial Position of our Group
Audited
as at 31 March 2013
S$’000
Unaudited
as at 30 June 2013
Non-Current Assets
22,279
23,775
Current Assets
32,247
26,936
Total Equity
8,857
11,016
Non-Current Liabilities
13,867
15,159
Current Liabilities
31,802
24,536
WHERE YOU CAN FIND US
Our registered office and business address is at 30 Teban Gardens Crescent Singapore 608927.
Our telephone number is +65 6565 5995 and our facsimile number is +65 6567 5515. Our website is
http://www.eurosportsglobal.com. Information contained on our website does not constitute part of
this Offer Document.
25
THE INVITATION
Invitation Size
:
80,000,000 Invitation Shares offered in Singapore comprising
40,000,000 New Shares and 40,000,000 Vendor Shares.
The New Shares, upon allotment and issue, will rank pari passu
in all respects with the existing issued Shares (including the
Vendor Shares).
Invitation Price
:
S$0.28 for each Invitation Share, payable in full on application.
The Offer
:
The Offer comprises an offering by our Company and the Vendors
to the public in Singapore to subscribe for and/or purchase
1,500,000 Offer Shares at the Invitation Price, subject to and on
the terms and conditions of this Offer Document.
In the event of an under-subscription for and/or purchase of the
Offer Shares, that number of Offer Shares not subscribed for
and/or purchased shall be used to satisfy excess applications
for the Placement Shares to the extent that there is an oversubscription for and/or purchase of the Placement Shares as at
the close of the Application List.
The Placement
:
The Placement comprises a placement by the Placement Agent
on behalf of our Company and the Vendors of 78,500,000
Placement Shares at the Invitation Price, subject to and on the
terms and conditions of this Offer Document.
In the event of an under-subscription for and/or purchase of
the Placement Shares, that number of Placement Shares not
subscribed for and/or purchased shall be used to satisfy excess
applications for the Offer Shares to the extent that there is an
over-subscription for and/or purchase of the Offer Shares as at
the close of the Application List.
Purpose of the Invitation
:
Our Directors believe that the Invitation and quotation of our
Shares on Catalist will enhance our public image and enable
us to tap the capital markets to fund our business growth. It will
also provide members of the public, our employees, business
associates and those who have contributed to our success
with an opportunity to participate in the equity of our Company.
The Invitation will also enlarge our capital base for continued
expansion of our business.
Listing Status
:
Prior to the Invitation, there has been no public market for our
Shares. Our Shares will be quoted on Catalist, subject to the
admission of our Company to Catalist and permission for dealing
in, and for quotation of, our Shares being granted by the SGX-ST.
Risk Factors
:
Investing in our Shares involves risks which are described in the
section entitled “Risk Factors” of this Offer Document.
26
RISK FACTORS
An investment in our Shares involves a number of risks, some of which, including market, liquidity, credit,
operational, legal and regulatory risks, could be substantial and are inherent in our business.
Prospective investors should carefully consider and evaluate each of the following considerations and all
the other information set forth in this Offer Document (including the financial statements and the notes
thereto) before deciding to invest in our Shares. Some of the following considerations relate principally
to the industry in which we operate and our business in general. Other considerations relate principally
to general economic, political and regulatory conditions, the securities markets and ownership of our
Shares, including possible future dilution in the value of our Shares. These are not the only risks we face.
Some risks are not yet known to us and there may be others which we currently believe are not material
but may subsequently turn out to be so. Factors that affect the price of our Shares may change, and the
following should not be construed as a comprehensive listing of all the risk factors. Prospective investors
are advised to apprise themselves of all factors involving the risks of investing in our Shares from their
professional advisers before making any decision to invest in our Shares.
If any of the following considerations, risks and uncertainties develops into actual events, our financial
position, results of operations, business operations, prospects and/or any investment in our Shares could
be, directly or indirectly, materially and adversely affected. In the event that this occurs, the trading price
of our Shares could fluctuate or decline due to any of these considerations, risks and uncertainties and
investors may lose all or part of their investment in our Shares.
This Offer Document also contains forward-looking statements having direct and/or indirect implications
on our future performance. Our actual results could differ materially from those anticipated in these
forward-looking statements as a result of certain factors, including the risks and uncertainties faced by us
described below and elsewhere in this Offer Document including in the section entitled “Management’s
Discussion and Analysis of Financial Position and Results of Operations”.
RISKS RELATING TO OUR BUSINESS AND INDUSTRY
We are dependent on the sales of Lamborghini automobiles
Revenue from our sales of new Lamborghini automobiles accounted for approximately 54.5%, 51.6%,
58.9% and 51.7% of our total revenue for FY2011, FY2012, FY2013 and 1Q2014 respectively.
Accordingly, as at the Latest Practicable Date, we are dependent upon the sales of Lamborghini
automobiles.
The Lamborghini Agreement is valid indefinitely until either party terminates it by giving prior written
notice of at least 12 months. Additionally, the Lamborghini Manufacturer is entitled to terminate the
Lamborghini Agreement with immediate effect upon notice under certain circumstances, including
insolvency and liquidation arrangements against us, criminal or administrative investigations or
proceedings concerning us, failure on our part to obtain any consent of the Lamborghini Manufacturer
when required and breach on our part of any material obligations under the Lamborghini Agreement.
Should the Lamborghini Agreement be terminated, and in the event we are unable to find an alternative
brand of automobiles for distribution, our business, financial position and results of operations may be
adversely affected.
Our business is subject to measures taken by the Singapore government in relation to automobile
ownerships
Due to limited geographic land area and high population density in Singapore, the Singapore government
may take measures to limit automobile ownerships in Singapore from time to time. Any measures taken
by the Singapore government to limit automobile ownerships, especially those measures which are
likely to lead to an increase in the costs of owning and maintaining an automobile, are likely to lead to
less demand and/or cancellations of existing orders for our automobiles. This may affect our sales of
automobiles and cause a decline in our Group’s revenue, which may in turn have an adverse impact on
our business, financial position and results of operations.
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Presently, the LTA has in place dual measures, namely the electronic road pricing system and the
vehicle quota system, to address the traffic congestion problems arising from the increasing automobile
ownerships. Any measures which are taken by the Singapore government to limit the number of available
COEs for the automobile models that we carry may affect our sales of automobiles. For instance, in
September 2013, the LTA introduced a new set of categorisation criteria in relation to automobiles with
engine capacity of not exceeding 1,600 cc. In addition to the existing criterion that the engine capacity
does not exceed 1,600 cc, the LTA has added a new criterion that the engine power of the automobile
should not exceed 130 bhp. The change applies to automobiles which are registered with COEs obtained
from the first COE bidding exercise in February 2014. This may affect the pricing of automobiles which fall
under the aforesaid categorisation criteria, particularly our Alfa Romeo automobiles.
In addition, the LTA imposes an additional registration fee upon registration of an automobile. As
announced in the Singapore Budget 2013, a new tiered additional registration fees structure was
introduced to replace the original registration fee of a 100% flat rate of open market value. Under the
new structure, the additional registration fees for automobile models with open market values of up to
S$20,000 will remain at the rate of 100%, the next S$30,000 of open market value of the automobile will
attract a rate of 140% and any open market value beyond S$50,000 will attract a rate of 180%. The new
tiered structure applies to every automobile that is registered with COEs obtained from the first COE
bidding exercise in March 2013.
The new tiered additional registration fee structure may cause an increase in the cost of sales of our
ultra-luxury automobile and luxury automobiles, particularly for automobile models with open market
values above S$20,000. If we are unable to identify and adopt appropriate means to reduce costs or pass
on such increase in costs to our customers, sales of our automobiles will be adversely affected. By way
of illustration only, the open market value of the Lamborghini Aventador model is approximately S$0.40
million and, accordingly, it would be subject to the additional registration fee rate of 180%. The additional
registration fee for the Lamborghini Aventador model has increased by approximately S$0.30 million, from
approximately S$0.40 million to approximately S$0.70 million, under the new structure.
Further, on 25 February 2013, the Authority announced the following financing restrictions on automobile
loans granted by financial institutions, which took effect as of 26 February 2013:
(a)
For automobiles with an open market value that does not exceed S$20,000, the maximum loan
quantum is 60% of the purchase price;
(b)
For automobiles with an open market value of more than S$20,000, the maximum loan quantum is
50% of the purchase price; and
(c)
The tenure of an automobile loan will be capped at five (5) years.
Accordingly, under the tightened automobile loan rules, our customers are required to place higher down
payments for their automobiles and to settle the automobile loan within five (5) years. In the event that
our customers are unable to obtain financing to fund their purchases of our automobiles as a result of the
tightened automobile loan rules, sales of our automobiles will be adversely affected.
Please refer to the section entitled “Government Regulations” of this Offer Document for further details.
Our sales of automobiles are dependent on the market demand for automobiles
Our sales of automobiles are dependent on the overall market demand for automobiles, which may be
affected by a variety of factors, such as economic conditions, personal disposable income and measures
taken by the government.
For instance, as described in the sub-section entitled “Our business is subject to measures taken by the
Singapore government in relation to automobile ownerships” above, the new tiered additional registration
fee structure could cause an increase in our automobile prices. In addition, the recent automobile
financing restrictions introduced by the Authority could affect customers’ ability to finance their purchases
of our automobiles. These may cause a decrease in customers’ demand for our automobiles, which will in
turn have an adverse effect on our business, revenue and profits.
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Further, business of the automobile dealers who purchase our pre-owned automobiles, may be
adversely affected due to, inter alia, the tightened automobile loan rules, which make their automobiles
more difficult to sell. Accordingly, such automobile dealers may not be able to purchase our pre-owned
automobiles. If we are unable to sell our inventory of pre-owned automobiles, it may affect our ability to
offer trade-in services for our customers who intend to purchase our new automobiles. This will in turn
affect our sales of new automobiles.
We are dependent on automobile manufacturers other than the Lamborghini Manufacturer
In addition to the Lamborghini Manufacturer, we also rely on other automobile manufacturers for the
rights to sell new automobiles and automobile parts and accessories. As at the Latest Practicable Date,
we have entered into distributorship and/or dealership agreements with the Lamborghini Manufacturer,
Pagani Manufacturer, Alfa Romeo Manufacturer and Touring Superleggera.
Our rights to market and/or sell new automobiles and automobile parts and accessories are governed
by our distributorship and/or dealership agreements with the respective automobile manufacturers.
Our distributorship and dealership agreements are for an indefinite period or for a fixed period of
time and are typically automatically renewed. However, automobile manufacturers are entitled to
terminate their distributorship and/or dealership agreement with immediate effect upon notice under
certain circumstances, including insolvency and liquidation arrangements against us, criminal or
administrative investigations or proceedings concerning us, failure on our part to obtain any consent
of the automobile manufacturers when required, and breach on our part of any material obligations
under the agreements. Please refer to the section entitled “General Information on our Group – Our
Distributorship and Dealership Arrangements” of this Offer Document for further details. There can be
no assurance that automobile manufacturers will not terminate any existing agreements or that we will
be able to successfully renew our agreements with the existing automobile manufacturers on a timely
basis, on commercially acceptable terms, or at all. If any of our agreements with the existing automobile
manufacturers is terminated or not renewed on current terms or at all, our business, financial position and
results of operations may be adversely affected.
In addition, we have previously, on occasions, obtained more favourable terms from the automobile
manufacturers in terms of, inter alia, pricing, marketing, logistical and insurance arrangements, which
are typically determined by various factors, such as our relationship with the automobile manufacturers,
volume of orders and sales, customer satisfaction indexes and track records. However, there can be no
assurance that we will continue to obtain such favourable terms from the automobile manufacturers. In
the event that we are unable to obtain such favourable terms from some or all automobile manufacturers,
our business, financial position and results of operations may be adversely affected.
Further, sales of new automobiles of a particular automobile manufacturer are affected by its ability to
anticipate changes in consumer preferences and requirements and thereby roll out new automobile
models. The supply of new automobiles is dependent on the automobile manufacturer’s production
capacity and its ability to deliver its products in accordance with our orders and requirements on a
timely basis. In the event that automobile manufacturers’ financial positions or business continuity, or
their abilities to design, market or manufacture new automobiles or automobile parts and accessories,
are adversely affected, or in the event that they are unable to meet our orders and requirements, our
business, financial position and results of operations may be adversely affected.
For instance, we have entered or may enter into distributorship and/or dealership arrangements with
automobiles manufacturers which are less established, for example GTA Spain, when compared with
larger or more established automobile manufacturers. They may have limited operating history and
financial resources. In the event that such automobile manufacturers’ financial positions or business
continuity are adversely affected, they may not have sufficient resources to deliver our orders and our
deposit payments made to such automobile manufacturers, if any, may not be refunded, fully or partially.
In such an event, our business, financial position and results of operations may be adversely affected.
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We are dependent on our Executive Directors and key management personnel
We believe that the success and growth of our business depends significantly on the expertise and
experience of our Executive Directors and key management personnel. Our Executive Chairman and
CEO, Melvin Goh, is one of our co-founders and has been the executive director of our Group since its
establishment in 1998. He has been instrumental in our Group’s overall management, formulating our
Group’s strategic focus and directions, developing and maintaining relationships with our suppliers and
customers as well as overseeing our Group’s general operations. Our Executive Director and Deputy
CEO, Andy Goh, is the other co-founder of our Group and has been the executive director of our Group
since its establishment in 1998. He assists our CEO in all matters in relation to our Group’s general
management and administration.
Notwithstanding that both Melvin Goh and Andy Goh have entered into service agreements with our
Company for a period of three (3) years (details of which can be found in the section entitled “Directors,
Executive Officers and Employees – Service Agreements” of this Offer Document), there can be no
assurance that we will be successful in retaining them or hiring qualified management personnel to
replace them should such a need arise.
The growth and success of our Group is also dependent on our ability to retain the services of our key
management personnel and to train new employees. Moreover, the process of hiring employees with the
required attributes may be time consuming and competitive. If our key management personnel is unable
or unwilling to continue in their present positions, and we are unable to hire suitable replacements in
a timely manner or at all, our business, financial position and results of operations may be adversely
affected.
We may not be able to sustain our growth rate and financial performance in the future
Our profit before tax for FY2011, FY2012 and FY2013 was approximately S$3.26 million, S$9.33 million
and S$8.34 million respectively, representing a CAGR of approximately 60.0%.
Sales of automobiles will fluctuate depending on the stage of the life cycle of a particular automobile
model. Sales of a particular automobile model will typically be higher when it is newly launched and will
decline towards the end of its life cycle. Further, sales of new automobiles and the financial performance
of our Group are affected by the automobile manufacturers’ abilities to launch new automobile models,
the demand for ultra-luxury automobile and luxury automobiles as well as the purchasing power of
consumers in Singapore. Accordingly, this may result in the sales of our automobiles being cyclical.
For instance, our sales of new Lamborghini automobiles decreased in FY2012 and FY2013 as the
Lamborghini Gallardo range was approaching the end of its life cycle.
Accordingly, there can be no assurance that we will be able to achieve similar growth rates and financial
performance in the future. If we are unable to maintain adequate revenue and profit growth, our financial
position could also be adversely affected. If we are unable to manage our growth effectively, we may not
be able to take advantage of market opportunities, execute our business plans, or respond to competitive
pressure.
We may be affected by inventory holding costs
Our inventory comprises new automobiles, pre-owned automobiles, automobile parts and accessories
and watches. We have in place a strategy to keep a reasonable level of inventory of these products.
Our inventory accounted for approximately 60.7% of our total current assets as at 30 June 2013, and
our inventory turnover days for FY2011, FY2012, FY2013 and 1Q2014 were 104, 61, 151 and 142 days
respectively. As a result of holding and managing the inventory, we may incur holding costs such as
financing costs, warehousing and logistic costs and insurance costs. A significant increase in these costs
may have an adverse impact on our business, financial position and results of operations.
Please refer to the section entitled “General Information on our Group – Inventory Management” of this
Offer Document for more information.
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We may face significant competition from other brands or types of automobiles
The automobile industry in Singapore is mature and the various automobile manufacturers are competing
with each other for limited demand. If the automobiles that we distribute are not competitive in the market
in terms of brand, quality, delivery time and/or price, our business, financial position and results of
operations may be adversely affected. Increasing competition from existing and potential competitors may
result in reduced revenue and loss of market share which may have an adverse effect on our business,
financial position and results of operations.
We may not secure adequate financing to fund our operations
We may not secure adequate funding either from internal resources or borrowings to fund the working
capital of our business. Our ability to obtain adequate financing on terms which are acceptable depends
on a number of factors that are beyond our control, including liquidity, general economic and political
conditions, the terms on which financial institutions are willing to extend credit to us and the availability of
other sources of debt financing or equity financing. If we are unable to secure adequate financing to fund
our operations, our business, financial position and results of operations may be adversely affected.
We may incur additional expenses and resources in the event we receive any product liability
claims or claims for defects or delays in delivery
Any defects in our products, or failure to satisfy the requirements of our customers could lead to claims
made against us. These claims may include payment for the recall of a product, or to indemnify our
customers for the costs of any such claims or recalls which they face as a result of using our products.
In addition, our customers may claim against us for delayed delivery which may have arisen from the late
delivery by any of the suppliers from whom we procure our products. There can be no assurance that
we will be able to claim from our suppliers any indemnification or compensation for such claims made
against us. In the event that we are involved in any legal dispute or court proceedings relating to our
products, we may incur a significant amount of expenses and resources on such proceedings. As such,
our business, results of operations and financial performance may be adversely affected.
Our insurance coverage may not be adequate
We believe that the coverage from the existing insurance policies of our Group is adequate and is in
accordance with the standard industry practice and government specifications. However, no insurance
can compensate for all potential losses and there can be no assurance that the insurance coverage will
be adequate or that our insurers will pay for a particular claim. With respect to losses which are covered
by our policies, it may be difficult and it may take time to recover such losses from insurers. In addition,
we may not be able to recover the full amount of losses incurred from the insurers. There are also certain
types of risks that are not covered by our insurance policies, because they are either uninsurable or not
economically insurable, including acts of war and acts of terrorism. Should there be losses arising out of
damage to our assets and properties which are not covered by our insurance policies, or should such
damage exceed the amount for which we are insured, our business, financial position and results of
operations may be adversely affected. Further details on our insurance policies are set out in the section
entitled “General Information on our Group – Insurance” of this Offer Document.
There is no assurance that our expansion plans will be successfully carried out
Our expansion plans include expansion of our operations in Singapore and into other markets, through
both organic growth and acquisitions of new distributorships and/or dealerships, as well as diversification
into other luxury lifestyle businesses. Such expansion plans may be subject to various restrictions,
limitations, legal and regulatory conditions and approvals. For instance, we may require existing suppliers
to grant us their consents or approvals for entry into distributorship and/or dealership agreements for
competing brands or other products, and there is no assurance that such consents or approvals may be
obtained. We may be exposed to the legal and regulatory conditions and policies of the countries in which
we intend to expand into and we may also be required to obtain various consents, approvals, certificates
and/or permits from regulatory authorities in such countries. There is no assurance that such required
consents, approvals, certificates or permits may be obtained without delay, or at all. These expansion
plans may also require substantial capital expenditure, financial and management resources. Further, the
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success of our expansion plans depends on many factors, some of which are not within our control. In
the event that we are not able to achieve a sufficient level of revenue or manage our costs effectively or
these planned expansions are delayed, our future financial performance and position may be adversely
affected.
For instance, we have plans to construct new facilities, consisting of offices, showrooms, service centres
and automobile parts and accessories stores, at 7 and 9 Chang Charn Road. We expect to commence
the construction of the aforesaid facilities by 2015 and the construction is expected to take approximately
24 months. We estimate that the construction costs to be between S$22 million and S$25 million. In
the event that we are not able to secure the funding requirements for the construction, or manage the
construction costs effectively or the commencement of the construction is delayed, our business, financial
position and results of operations may be adversely affected.
Please refer to the section entitled “General Information on our Group – Business Strategies and Future
Plans” of this Offer Document for further details.
We embarked on the luxury watch distribution and retail business and the current management
may not have the relevant expertise to ensure success
As part of our vision to be a provider of luxury lifestyle products, we have embarked on the luxury watch
distribution and retail business since September 2012. For further details, please refer to the section
entitled “General Information on our Group – Business Strategies and Future Plans” of this Offer
Document.
As the watch distribution business is a new area of business to us, we are expected to face risks,
uncertainties and challenges associated with the entry into any new business in which we have no prior
track record. Such risks, uncertainties and challenges include, inter alia, difficulty in managing operations
and costs effectively (including inventory holding costs), failure to establish networks of customers and
suppliers, failure to identify, attract, retain qualified personnel and failure to achieve the results, level
of revenue and margins we are expecting. Further, as our existing management does not have much
experience and expertise in the watch distribution and retail business, we may face operational difficulties
which in turn may have an adverse effect on our business, financial position and results of operations.
We are subject to compliance with and changes in laws and regulations
We are required to obtain various licenses and permits to carry out our business. These licenses and
permits are generally subject to conditions stipulated in such licenses and permits and/or relevant laws
and regulations under which such licences and permits are issued. In addition, certain of our licences,
permits, registrations and certifications are subject to annual renewal. Accordingly, we have to constantly
monitor and ensure our compliance with such conditions imposed, laws and regulations, if any, and the
renewal of our licenses and permits.
Further, any changes to current laws or regulations or introduction of new laws or regulations or any
conditions imposed on our licences, permits, registrations and certifications may have an impact on our
business and result in higher costs of compliance. For instance, following the introduction of Lemon Laws,
which came into effect on 1 September 2012, we are required to repair or replace a defective automobile
and, if repair or replacement is not possible or reasonable, our customers may request for a price
reduction or may return the defective automobile for refund. In such instances, our business, financial
position and results of operations may be adversely effected. Please refer to the section entitled “General
Information on our Group – Business Overview – Provision of After-Sales Services – Repair services” of
this Offer Document for further details.
If we are unable to comply with the existing and new laws and regulations or any conditions imposed on
our licences, permits, registrations and certifications, or should any of our licences, permits, registrations
or certifications be suspended, revoked or not renewed, we may not be allowed to operate our
businesses and, as a result, our business, financial position and results of operations may be adversely
affected.
Please refer to the section entitled “Government Regulations” of this Offer Document for further details.
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Risks relating to the Teban Gardens Lease Extension and the Sale and Leaseback Arrangement
Our operations in Singapore are presently based in our Teban Gardens Showrooms and Service Centres,
which are leased by us from JTC. The leasehold term for our premises at 30 Teban Gardens Crescent
will expire on 31 May 2017. Pursuant to an agreement to lease dated 21 May 2013 between JTC and
EuroSports Auto, JTC has agreed to extend the lease for 22 years from 1 June 2017, which is conditional
upon the fulfilment of, inter alia, certain investment criteria, including the fulfillment of aggregate
investment on building and civil works and plant and machinery at our premises at 30 Teban Gardens
Crescent of at least S$8.30 million, of which at least S$6 million must consist of new investment on plant
and machinery and building and civil works, and the remainder may consist of the net book values of
the existing building and civil works and existing plant and machinery. In fulfilling the requirements for
new investment, as at the Latest Practicable Date, we have constructed an annex to our premises at 30
Teban Gardens Crescent, comprising an additional two storey showroom, display area and office, and
have acquired automobiles for demo and/or test-drive purposes and/or for the purpose of leasing. The
remainder of the required aggregate investment above will consist of the net book values of our existing
building and civil works and existing plant and machinery. Please refer to the section entitled “General
Information on our Group – Properties and Fixed Assets – Teban Gardens Lease Extension” of this Offer
In the event that we are unable to fulfill such terms and conditions to the satisfaction of JTC, the lease for
our premises at 30 Teban Gardens Crescent will expire and terminate on 31 May 2017. This may have
an adverse effect on our business, financial position and results of operations as we may have to seek
alternative sites for our showrooms and service centres, and there can be no assurance that alternative
sites will be available at comparable locations or leased on comparable terms.
In addition, we have entered into the Sale and Leaseback Arrangement, which involves the sale and
purchase of 30 Teban Gardens Crescent. Completion of the sale and purchase is conditional upon
satisfaction of certain stipulated conditions precedent, which include the Teban Gardens Lease Extension
as well as the relevant approvals from JTC being obtained. Please refer to the section entitled “General
Information on our Group – Properties and Fixed Assets – Sale and Leaseback Arrangement” of this
Offer Document for further details.
In the event that the conditions precedent to completion of the sale and purchase of 30 Teban Gardens
Crescent under the Sale and Leaseback Arrangement (including the Teban Gardens Lease Extension
and the relevant approvals from JTC being obtained) are not fulfilled or waived and that the purchaser
decides to rescind the agreement accordingly, the Sale and Leaseback Arrangement will not be
completed. Non-completion of the Sale and Leaseback Arrangement may result in the expected gain from
the sale of leasehold properties to not materialise.
We are subject to risks associated to deposit payments made to automobile manufacturers
From time to time, we are required by automobile manufacturers to make deposit payments upon
placement of orders for their new automobiles. As at the Latest Practicable Date, we have placed orders
for five (5) units of GTA automobiles and other automobiles for which we have made a deposit payment of
S$2.41 million in aggregate to the relevant automobile manufacturers. In the event that such automobile
manufacturers are unable to deliver the orders and our deposit payments are not refunded, fully or
partially, our business, financial position and results of operations may be adversely affected.
We may be affected by the cessation of the funding support arrangements with EC and PT
EuroSport
We have been providing funding support to EC and PT EuroSport mainly in respect of orders for
Lamborghini automobiles placed by EC and PT EuroSport and ancillary charges. In consideration for
the provision of such funding support, PT EuroSport and EC were required to pay to us a fee based on
the costs of purchase of the ordered Lamborghini automobiles and ancillary charges relating thereto, as
well as reimburse the costs of purchase of the ordered Lamborghini automobiles and all related costs,
expenses, interests, commissions or fees incurred by our Group in connection with such funding. Such
specific funding support arrangements have ceased as at the Latest Practicable Date.
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Funding fees from EC and PT EuroSport to our Group amounted to approximately S$0.07 million,
S$0.57 million, S$1.69 million and S$0.24 million for FY2011, FY2012, FY2013 and 1Q2014 respectively.
Following the cessation of the funding support arrangements, we will no longer receive fees from EC
and PT EuroSport for the provision of funding support. If we are unable to charge other fees or supply
automobiles to EC and/or PT EuroSport, this will have an adverse effect on our profit margin and results
of operations. Had the funding support arrangements not been in place from the beginning of FY2011,
our profit before tax would have been S$3.19 million, S$8.76 million, S$6.66 million and S$2.37 million in
FY2011, FY2012, FY2013 and 1Q2014 respectively.
Please refer to the sections entitled “Interested Person Transactions – Transactions involving EC, ESE
and/or JH Italia – Funding support provided by our Group to EC” and “Interested Person Transactions –
Transactions involving PT EuroSport – Funding support provided by our Group to PT EuroSport” for more
details.
We are exposed to risks arising from foreign exchange fluctuations
Our purchases are denominated mainly in S$, €, £ and Swiss franc, and our sales and revenue are
denominated mainly in S$. To the extent that our Group’s sales and purchases are not exactly matched
in the same currency (for instance, due to change in billing currency by suppliers) and to the extent that
there are timing differences between invoicing and the payment to suppliers, our Group will be exposed
to foreign currency exchange gains or losses arising from transactions in currencies other than our
reporting currency, namely S$. There is no assurance that we will be able to successfully manage our
foreign exchange risks and any significant adverse foreign currency fluctuations may adversely affect our
financial position and results of operations. Please refer to the section entitled “Management’s Discussion
and Analysis of Financial Position and Results of Operations – Foreign Exchange Exposure” of this Offer
Document for more details.
We may be affected by any adverse impact on our reputation and goodwill
Any negative publicity or concern about us, automobile manufacturers or our products and services,
whether founded or unfounded, may discourage consumers from purchasing our products and any lost
confidence on the part of our customers could be difficult and costly to re-establish. In such event, our
business, financial position and results of operations may be adversely affected.
We may be involved in legal and other proceedings arising from our operations
We may from time to time be involved in legal proceedings, including matters involving motor accidents
and other proceedings arising from our operations. In addition, we may be involved in legal or other
proceedings in relation to automobiles and/or automobiles parts and accessories, which are defective
or of unsatisfactory quality, sold by our Group. These proceedings involve risk and any unexpected
outcomes may have an adverse impact on our financial results. Please refer to the section entitled
“General and Statutory Information – Litigation” of this Offer Document for further details.
We may be affected by disruption in the global financial markets and general economic conditions
Our business, financial position and results of operations may be materially and adversely affected by
conditions in the financial markets and the economy in Singapore.
In 2008, a disruption in the global credit markets and the general slowdown in the global economy had
created adverse conditions in the financial markets. These conditions resulted in much economic volatility,
less liquidity, tightening of credit and a lack of price transparency in certain markets.
These conditions have also resulted in the failure of a number of financial institutions in the USA and
unprecedented action by government authorities and central banks around the world. Any further
government intervention, restrictions or regulation could have a material adverse effect on our business,
results of operations, financial position and prospects. This economic situation is further exacerbated by
the recent debt crises in Greece, Portugal, Spain, Ireland and Italy and the potential impact of these
crises on the rest of Europe and the world. It is difficult to predict the extent to which global markets are
affected by these conditions and the extent and nature of such effects on our markets, products and
34
business. The continuation or intensification of such disruptions may lead to additional adverse effects
including, among others, the lack of availability of credit to both businesses and customers, and could
lead to a further weakening of the global economies. Any prolonged downturn in general economic
conditions would present risks for our business, such as a potential slowdown in our sales.
Although there are signs that the financial markets and economies in Singapore, Asia and the global
economy may be improving, whether a full and sustainable recovery will occur, and the pace of the
recovery, if any, or whether the global economy or parts of it could relapse into recessionary conditions,
remains uncertain. Any adverse economic developments in the markets that we operate in or that have
an indirect impact on our business could have adverse effects on our business, financial position and
results of operations.
We may be affected by terrorist attacks and other acts of violence, wars, or outbreaks of diseases
Any occurrence of terrorist attacks acts of violence and/or wars may lead to uncertainties in the
economies of the countries in which we or our suppliers operate. All these could have a negative impact
on the demand for our automobiles, and our business, financial position and results of operations.
Furthermore, an outbreak of infectious diseases such as the severe acute respiratory syndrome (SARS)
in Singapore may adversely affect our business, financial position and results of operations. If an
outbreak of such infectious diseases occurs in Singapore, customer sentiment and spending could be
adversely affected and this may have a negative impact on our business, financial position and results of
operations. Our staff and employees may also be affected by any outbreak of such infectious diseases
and this may affect our day-to-day operations.
We may be affected by major or sustained disruptions to our operations
In the event of any major or sustained disruptions or any outbreak of fire, flood or any other natural
disasters which results in significant damage to our premises, our operations may be adversely affected.
For instance, in the event that our service centre equipment experiences prolonged equipment downtime,
we may not be able to deliver maintenance and/or repair services to our customers. In such an event, our
customer confidence may drop and our business and financial position may be adversely affected.
Our order book may not be an accurate indicator of our future performance
As at 30 June 2013, our order book, based on confirmed sales orders and the indicative selling prices
of our automobiles, was approximately S$17.21 million. As at the Latest Practicable Date, one of these
sales orders amounting to approximately S$1.44 million, which was subsequently varied to approximately
S$2.64 million, has been fulfilled. As at the Latest Practicable Date, our order book, based on confirmed
sales orders and the indicative selling prices of our automobiles, was approximately S$19.30 million.
Please refer to the section entitled “General Information on Our Group – Order Book” of this Offer
Our order book may not be an accurate indicator of our future performance as we have not taken into
account potential renegotiations, cancellations or deferrals, the occurrence of any of which will have
an adverse impact on our revenue. These may be due to factors beyond our control and by nature, are
uncertain. There is therefore no assurance that we can successfully translate all our existing orders into
revenue.
Product defects and automobile recalls could have an adverse effect on our business
Automobile manufacturers may recall their automobiles from time to time to remedy certain problems or
product defects. Any automobile recalls may have an adverse effect on the reputation of the automobile
manufacturers and us, and our customers’ confidence in the quality and safety of the automobiles may be
affected. In addition, such automobile recalls may lead to cancellation of orders placed by our customers,
which may in turn adversely affect our sale of new automobiles. There is no assurance that there will not
be automobile recalls in future which affect automobile manufacturers or the automobile models we offer,
nor that any such recalls will not have an adverse effect on our business, financial position and results of
operations.
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We may face rising labour costs and labour shortage
Our ability to meet our labour requirements may be subject to numerous external factors, including
the availability of a sufficient number of suitable persons in the relevant job segment, prevailing labour
costs including wage rates and applicable levies, demographics, and health and insurance costs. In
addition, any changes to the labour laws in Singapore in the form of stricter qualifying criteria and salary
thresholds for foreign workers, and increases in foreign worker levies and foreign worker accommodation
costs may result in an increase in our labour-related costs.
Our growth plans will require us to hire, train and retain a significant number of new employees in the
future. As we face competition from our competitors for labour, we may have to increase wages and
employee benefits to attract and retain qualified personnel or risk considerable employee turnover.
If we are unable to hire, train and retain qualified employees at a reasonable cost, we may be unable
to execute our growth strategy and our business, financial position and results of operations may be
adversely affected.
RISK RELATING TO INVESTMENT IN OUR SHARES
Investments in securities quoted on Catalist involve a higher degree of risk and can be less liquid
than shares quoted on the Main Board of the SGX-ST
We have made an application for our Shares to be listed for quotation on Catalist, a listing platform
primarily designed for fast growing and emerging and/or smaller companies to which a higher investment
risk tends to be attached as compared to larger or more established companies listed on the Main Board
of the SGX-ST. An investment in shares quoted on Catalist may carry a higher risk than an investment in
shares quoted on the Main Board of the SGX-ST and the future success and liquidity in the market of our
Shares cannot be guaranteed.
Pursuant to the Catalist Rules, we are required to, inter alia, retain a sponsor at all times after our
admission to Catalist. In particular, unless approved by the SGX-ST, the Sponsor must act as our
continuing sponsor for at least three (3) years after the admission of our Company to Catalist. In addition,
we may be delisted in the event that we do not have a sponsor for more than three (3) continuous
months. There is no guarantee that following the expiration of the three (3)-year period, the Sponsor
will continue to act as our sponsor or that we are able to find a replacement sponsor within the three
(3)-month period. Should such risks materialise, we may be delisted.
Our Controlling Shareholders will retain control over our Group after the Invitation, which will
allow them to influence the outcome of matters submitted to Shareholders for approval
Upon completion of the Invitation, our Controlling Shareholders, Melvin Goh and Andy Goh, will
collectively own approximately 69.8% of the issued share capital of our Company. As a result, they will
be able to exercise influence over matters requiring Shareholders’ approval, including the election of
directors and approval of significant corporate transactions.
Such concentration of ownership will place our Controlling Shareholders in a position to affect any
corporate actions of our Group (notwithstanding that the same may be synergistic or beneficial to our
Group) in a manner that could conflict with the interests of our public Shareholders.
Certain of our Group’s distributorship and dealership agreements contain provisions which
prohibit changes in shareholders or management or changes in control of our Group except with
prior approval or consent
Certain of our distributorship and dealership agreements contain provisions which prohibit, inter alia,
changes in shareholders or management or changes in control of our Group, except with the prior written
approval or consent of the relevant manufacturer.
36
Our Group may, from time to time, consider corporate transactions, such as acquisitions of new
businesses, which may be synergistic or beneficial to our Group. Where such corporate transactions
would result in a change in shareholders or management or a change in control of our Group, the
approval or consent of the relevant manufacturer will need to be obtained. In the event such approval
or consent is denied, delayed or granted with unfavourable conditions, such provisions may prevent,
delay or deter the proposed corporate transaction. Further, any transfer or disposal by our Controlling
Shareholders, namely Melvin Goh and Andy Goh, of all or part of their interests in our Company without
the approval or consent of the relevant manufacturer, may result in a breach of such provisions.
In addition, such provisions may deter potential investors from investing in our Group, thereby
discouraging a takeover of our Group. This may, in turn, prevent Shareholders from realising the value of
their investments through a takeover bid.
New investors may experience dilution
Our Invitation Price of S$0.28 per Share is higher than our Adjusted NAV (as defined in the section
entitled “Invitation Statistics” of this Offer Document) per Share after adjusting for the estimated net
proceeds from the issue of the New Shares. Investors who subscribe for and/or purchase the Invitation
Shares will therefore experience immediate and significant dilution in the NAV of their Shares. In addition,
we intend to grant our employees Awards and/or Options pursuant to the Performance Share Plan and/
or the ESOS. To the extent that such Options are granted and exercised, there will be further dilution to
Investors in this Invitation. Please refer to the section entitled “Dilution” of this Offer Document for further
details.
Investors may not be able to participate in future issues of our Shares
If we offer our Shareholders rights to subscribe for additional Shares or any rights of any other nature, we
will have discretion as to the procedure to be followed in making the rights available to our Shareholders
or in disposing of the rights for the benefit of our Shareholders and making the net proceeds available to
our Shareholders. We may choose not to offer the rights to our Shareholders having an address outside
Singapore. Accordingly, Shareholders who have a registered address outside Singapore may be unable
to participate in rights offerings and may experience a dilution in their shareholdings as a result.
Additional funds raised through issuances of new Shares for future growth will dilute
Shareholders’ equity interests
We may in the future expand our capabilities and business through acquisitions, joint ventures, strategic
partnerships and alliances with parties who can add value to our business. We may require additional
equity funding after the Invitation to finance future acquisitions, joint ventures, strategic partnerships and
alliances which may result in a dilution of the equity interest of our Shareholders.
Future sales or issuances of our Shares could adversely affect our share price
Any future sale or issuance of our Shares may have a downward pressure on our share price. The sale of
a significant amount of our Shares in the public market after the Invitation, or the perception that such a
sale may occur, could materially and adversely affect the market price of our Shares. These factors may
also affect our ability to sell or issue additional equity securities. Except as otherwise described under the
section entitled “Shareholders – Moratorium” of this Offer Document and subject to applicable laws and
regulations, there is currently no restriction on our Controlling Shareholders to sell Shares, either on the
SGX-ST or otherwise.
37
Our share price may be volatile, which could result in substantial losses for investors acquiring
our Shares pursuant to the Invitation
The Invitation Price was determined through a book-building exercise and arrived at after consultation
between our Company, the Vendors, the Sponsor and the Underwriter and Placement Agent, and after
taking into consideration, inter alia, prevailing market conditions and estimated market demand for the
Invitation Shares. The Invitation Price may not be indicative of prices which will prevail in the trading
market after the Invitation and investors may not be able to resell their Shares at or above the Invitation
Price. Volatility in the trading price of our Shares may be caused by factors beyond our control and may
not correlate with or be proportionate to our operating results. Further, the market price of our Shares
may fluctuate significantly and rapidly in response to, inter alia, the following factors, some of which are
beyond our control:

variations in our operating results;

changes in securities analysts’ estimates of our financial performance and recommendations on
our share price;

changes in market valuations and share prices of companies with businesses similar to that of our
Company that may be listed in Singapore;

announcements by our competitors or ourselves of significant acquisitions, strategic partnerships,
joint ventures or capital commitments;

fluctuations in stock market prices and volume;

our involvement in litigation;

changes to key personnel;

the perceived prospects of our business and investment plans and the automobile industry in
Singapore and other regions;

our ability to successfully implement our investment plans and growth strategies;

broad market fluctuations, including weakness of the equity market and increases in interest rates;

general changes in rules/regulations with regard to the automobile industry that our Group
operates in, including those that affect the demand for our Group’s products and services; and

changes in conditions affecting the industry, the general economic conditions or stock market
sentiments or other events or factors.
For these reasons, among others, our Shares may trade at prices that are higher or lower than the NAV
per share. To the extent that there is any retention of operating cash for investment purposes, working
capital requirements or other purposes, these retained funds, while increasing the value of our underlying
assets, may not correspondingly increase the market price of our Shares. Any failure on our part to meet
market expectations with regard to future earnings and cash distributions may adversely affect the market
price for our Shares.
In addition, our Shares are not capital-safe products and there is no guarantee that holders of our Shares
can realise a higher amount or even the principal amount of their investment.
In case of liquidation of our Company, it is possible that investors may lose all or a part of their
investment in our Shares.
38
There has been no prior market for our Shares, and the Invitation may not result in an active or
liquid market for our Shares
Prior to the Invitation, there has been no public market for our Shares. Although we have applied to the
SGX-ST for the dealing and quotation of our Shares on Catalist, there is no assurance that an active
trading market for our Shares will develop or, if developed, will be sustained. There is also no assurance
that the market price for our Shares will not decline below the Invitation Price.
The market price of our Shares could be subject to significant fluctuations due to various external factors
and events including the liquidity of our Shares in the market, the difference between our actual financial
or operating results and those expected by investors and analysts, the general market conditions and
broad market fluctuations.
Negative publicity may adversely affect our share price
Negative publicity involving our Group, any of our Directors, Executive Officers or Controlling
Shareholders may adversely affect the market perception or the stock performance of our Company,
whether it is justified or not. Some examples of negative publicity may include, inter alia, unsuccessful
attempts in joint ventures, takeovers or involvement in insolvency proceedings.
We may not be able to pay dividends to our shareholders
The declaration and payment of future dividends will depend on our operating results, financial position,
other cash requirements including capital expenditure, the terms of borrowing arrangements (if any) and
other factors deemed relevant by our Directors. There is no assurance that dividend distributions will be
made by our Company in the future. For a description of our dividend policy, please refer to the section
entitled “Dividend Policy” of this Offer Document.
We intend to declare a one-time special dividend of between S$6 million and S$8 million subject to
completion of the Sale and Leaseback Arrangement and such dividend is expected to be funded solely
by the sale proceeds arising therefrom. As at the Latest Practicable Date, we are in the process of
fulfilling the conditions precedent to completion of the Sale and Leaseback Arrangement and we expect
to complete the Sale and Leaseback Arrangement by the first quarter of 2014, upon which we intend
to declare the special dividend in FY2015. Nevertheless, in the event that the Sale and Leaseback
Arrangement does not complete and we do not recognise all or any of the sale proceeds therefrom, we
will not be able to declare such special dividend. Further, in the event that the completion of the Sale and
Leaseback Arrangement is delayed for any reason whatsoever, the declaration of such special dividend
will also be delayed. Please refer to the sub-section entitled “Risks relating to the Teban Gardens Lease
Extension and the Sale and Leaseback Arrangement” above for more details.
39
INVITATION STATISTICS
Invitation Price
28.00 cents
Adjusted NAV
NAV per Share based on the unaudited combined financial position of our Group
as at 30 June 2013 adjusted for the Restructuring Exercise (“Adjusted NAV”):
(a)
(b)
before adjusting for the estimated net proceeds from the issue of the New
Shares and based on the pre-Invitation share capital of 225,000,000 Shares
4.90 cents
after adjusting for the estimated net proceeds from the issue of the New
Shares and based on the post-Invitation share capital of 265,000,000 Shares
7.35 cents
Premium of Invitation Price over the Adjusted NAV per Share as at 30 June 2013:
(a)
(b)
before adjusting for the estimated net proceeds from the issue of the New
Shares and based on the pre-Invitation share capital of 225,000,000 Shares
471.9%
after adjusting for the estimated net proceeds from the issue of the New
Shares and based on the post-Invitation share capital of 265,000,000 Shares
281.0%
Earnings
Historical EPS of our Group for FY2013 based on the pre-Invitation share capital of
225,000,000 Shares
2.99 cents
Historical EPS of our Group for FY2013 based on the pre-Invitation share capital
of 225,000,000 Shares, assuming that the Service Agreements had been in place
from the beginning of FY2013
2.57 cents
PER
Historical PER based on the Invitation Price and the historical EPS of our Group
for FY2013
9.38 times
Historical PER based on the Invitation Price and the historical EPS of our Group
for FY2013, assuming that the Service Agreements had been in place from the
beginning of FY2013
10.87 times
Net Operating Cash Flow(1)
Historical net operating cash flow per Share of our Group for FY2013 based on the
pre-Invitation share capital of 225,000,000 Shares
Historical net operating cash flow per Share of our Group for FY2013 based on
the pre-Invitation share capital of 225,000,000 Shares, assuming that the Service
Agreements had been in place from the beginning of FY2013
3.79 cents
3.38 cents
Price to Net Operating Cash Flow Ratio
Invitation Price to historical net operating cash flow per Share of our Group for
FY2013 based on the pre-Invitation share capital of 225,000,000 Shares
7.39 times
Invitation Price to historical net operating cash flow per Share of our Group for
FY2013 based on the pre-Invitation share capital of 225,000,000 Shares, assuming
that the Service Agreements had been in place from the beginning of FY2013
8.29 times
40
Market Capitalisation
Market capitalisation based on the Invitation Price and the post-Invitation share
capital of 265,000,000 Shares
Note:
(1)
Net operating cash flow is defined as net profit after tax with depreciation expenses added back.
41
S$74.20 million
USE OF PROCEEDS AND LISTING EXPENSES
Net Proceeds from the Invitation
The estimated net proceeds to be raised from the Invitation (comprising both the New Shares and the
Vendor Shares), after deducting estimated expenses in relation to the Invitation of approximately S$3.08
million, will be approximately S$19.32 million.
Net proceeds from the Issue of the New Shares
The estimated net proceeds attributable to us from the issue of the New Shares (after deducting our
Company’s share of the estimated expenses in relation to the Invitation of approximately S$2.74 million)
will be approximately S$8.46 million. We will not receive any of the proceeds from the Vendor Shares sold
by the Vendors in the Invitation.
We intend to use our proceeds from the issue of the New Shares primarily as follows:
Estimated amount
(S$’000)
Purpose
Estimated amount
allocated for each dollar
of the gross proceeds
raised from the issue of
the New Shares
(cents)
Expansion of our operations locally and in other markets and
diversification into other luxury lifestyle businesses
6,000
53.57
General working capital
2,461
21.97
Listing expenses
2,739
24.46
11,200
100.00
Total
Please see section entitled “General Information on our Group – Business Strategies and Future Plans”
of this Offer Document for further details on the future plans of our Group. None of the proceeds from the
issue of the New Shares will be used to discharge, reduce or retire any indebtedness of our Group.
The foregoing represents our best estimate of the allocation of our net proceeds from the issue of the
New Shares based on our current plans and estimates regarding our anticipated expenditures. Actual
expenditures may vary from these estimates and we may find it necessary or advisable to re-allocate
our net proceeds within the categories described above or to use portions of our net proceeds for other
purposes. In the event that we decide to re-allocate our net proceeds from the issue of the New Shares
for other purposes, we will publicly announce our intention to do so through a SGXNET announcement to
be posted on the internet at the SGX-ST website, http://www.sgx.com.
We will make periodic announcements on the use of the net proceeds from the issue of the New Shares
as and when the funds are materially disbursed, and provide a status report on the use of the net
proceeds in our annual report(s).
Pending the deployment of the net proceeds as aforesaid, the funds may be added to our working capital,
placed as deposits with banks or financial institutions, or used for investment in short-term deposits,
money market or debt instruments, as our Directors may deem appropriate in their absolute discretion.
In the event that the amount set aside to meet our Company’s share of the estimated expenses in relation
to the Invitation is in excess of the actual expenses incurred, such amount will be made available for our
working capital purposes.
In the opinion of our Directors, there are no minimum amounts which must be raised by the issue of the
New Shares. Although no minimum amount must be raised by the Invitation, such amounts which are
proposed to be provided out of the net proceeds from the issue of the New Shares shall, in the event that
Invitation is cancelled, be provided out of the existing banking facilities and/or internal funds generated
from our operations.
42
Net proceeds from sale of the Vendor Shares
The estimated net proceeds attributable to the Vendors from the sale of the Vendor Shares (after
deducting the Vendors’ share of the estimated expenses in relation to the Invitation (comprising the
underwriting and placement commission and brokerage in respect of the Vendor Shares) of approximately
S$0.34 million) will be approximately S$10.86 million.
Expenses incurred in connection with the Invitation
Save for the underwriting and placement commission and brokerage which will be borne by our Company
and the Vendors in the proportion in which the Invitation Shares are offered by each of them, the rest of
the listing expenses will be borne by our Company.
We estimate that our share of the listing expenses, including the professional fees, underwriting and
placement commission and brokerage and miscellaneous expenses, will amount to approximately S$2.74
million. A breakdown of these expenses is set out below:
Estimated amount
(S$’000)
Listing Expenses
As a percentage of the
gross proceeds raised
from the issue of the
New Shares
(%)
1,761
15.7
Underwriting and placement commission and brokerage(1)
336
3.0
Miscellaneous expenses (including listing fees)
642
5.7
2,739
24.5
Professional Fees
Total
Note:
(1)
Please refer to the section entitled “General and Statutory Information – Management, Underwriting and Placement
Arrangements” of this Offer Document for more information.
43
DIVIDEND POLICY
Since incorporation on 12 December 2012, our Company has not declared any dividends. Our whollyowned subsidiary, EuroSports Auto, has declared and paid a final dividend of S$5 million to the then
shareholders in FY2012. In addition, EuroSports Auto has declared and paid an interim dividend of
S$2.50 million to the then shareholders in FY2013. Save as set out herein, our Group has not declared
any dividends during the Period under Review.
We currently do not have a formal dividend policy. The form, frequency and amount of future dividends
on our Shares that our Directors may recommend or declare in respect of any particular financial year or
period will be subject to the factors outlined below as well as any other factors deemed relevant by our
Directors:
(a)
the level of our cash and retained earnings;
(b)
our actual and projected financial performance;
(c)
our projected levels of capital expenditure and other investment plans;
(d)
our working capital requirements and general financing condition; and
(e)
restrictions on payment of dividends imposed on us by our financing arrangements (if any).
Any final dividend paid by us must be approved by an ordinary resolution of our Shareholders at
a general meeting and must not exceed the amount recommended by our Board. Our Directors may,
without the approval of our Shareholders, also declare an interim dividend. We must pay all dividends out
of profits or otherwise in accordance with the Companies Act.
We intend to declare a one-time special dividend of between S$6 million and S$8 million subject to
completion of the Sale and Leaseback Arrangement and such dividend is expected to be funded solely
by the sale proceeds arising therefrom (the “Proposed Dividend”). As at the Latest Practicable Date,
we are in the process of fulfilling the conditions precedent to completion of the Sale and Leaseback
Arrangement and we expect to complete the Sale and Leaseback Arrangement by the first quarter of
2014, upon which we intend to declare the special dividend in FY2015. In the event that the Sale and
Leaseback Arrangement does not complete and we do not recognise any sale proceeds therefrom, we
will not be able to declare such special dividend. Further, in the event that the completion of the Sale and
Leaseback Arrangement is delayed for any reason whatsoever, the declaration of such special dividend
will also be delayed. Please refer to the sections entitled “General Information on our Group – Properties
and Fixed Assets – Sale and Leaseback Arrangement” and “Risk Factors – We may not be able to pay
dividends to our Shareholders” of this Offer Document for further details.
Investors should note that all the foregoing statements, including the statements on the Proposed
Dividend, are merely statements of our present intention and shall not constitute legally binding
statements in respect of our future dividends which may be subject to modification (including reduction
or non-declaration thereof) in our Directors’ sole and absolute discretion. Investors should not treat the
Proposed Dividend as an indication of our Group’s future dividend policy. No inference should or can be
made from any of the foregoing statements as to our actual future profitability or ability to pay any future
dividends. There can be no assurance that dividends will be paid in the future or of the amount or timing
of any dividends that will be paid in the future.
Information relating to taxes payable on dividends are set out in the section entitled “Taxation” of this
Offer Document.
44
SHARE CAPITAL
Our Company (Registration No. 201230284Z) was incorporated in Singapore on 12 December 2012
under the Companies Act as a private limited company, under the name of EuroSports Global Pte. Ltd..
As at the date of incorporation, our issued and paid-up share capital was S$2.00 comprising two (2)
ordinary shares of S$1.00 each. Subsequently, on 5 December 2013, our Company was converted into a
public limited company and we changed our name to “EuroSports Global Limited”.
Pursuant to written resolutions passed on 29 November 2013, our then shareholders, namely Melvin Goh
and Andy Goh, approved, inter alia, the following:
(a)
the acquisition of the entire issued share capital of each of EuroSports Auto, EuroAutomobile, GTA
Singapore and deLaCour Singapore, as described in the section entitled “Restructuring Exercise”
of this Offer Document;
(b)
the allotment and issue of 134,999,999 new Shares and 89,999,999 new Shares to Melvin Goh
and Andy Goh respectively, in satisfaction of the consideration for the acquisition of the entire
issued share capital of EuroSports Auto and EuroAutomobile, as described in the section entitled
“Restructuring Exercise” of this Offer Document;
(c)
the conversion of our Company into a public company limited by shares and the change of our
name to “EuroSports Global Limited”;
(d)
the adoption of the new Articles of Association of our Company;
(e)
the allotment and issue of the New Shares pursuant to the Invitation;
(f)
the authorisation for our Directors, pursuant to Section 161 of the Companies Act to (A) issue
Shares whether by way of rights, bonus or otherwise; (B) make or grant offers, agreements or
options (collectively, “Instruments”) that might or would require Shares to be issued, including but
not limited to the creation and issue of (as well as adjustments to) warrants, debentures or other
instruments convertible into Shares, at any time and upon such terms and conditions and for such
purposes and to such persons as our Directors may in their absolute discretion deem fit; and (C)
(notwithstanding the authority conferred by this resolution may have ceased to be in force) issue
Shares in pursuance of any Instruments made or granted by our Directors while this resolution was
in force, provided that:
(1)
the aggregate number of Shares (including Shares to be issued in pursuance of the
Instruments, made or granted pursuant to this resolution) and Instruments to be issued
pursuant to this resolution shall not exceed 100.0% of the total number of issued Shares
(excluding treasury shares) in the capital of our Company (as calculated in accordance with
sub-paragraph (2) below), of which the aggregate number of Shares to be issued (including
Shares to be issued pursuant to the Instruments) other than on a pro rata basis to existing
Shareholders shall not exceed 50.0% of the total number of issued Shares (excluding
treasury shares) in the capital of our Company (as calculated in accordance with subparagraph (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 (including Shares to be issued pursuant to the
Instruments) that may be issued under sub-paragraph (1) above, the percentage of Shares
that may be issued shall be based on the total number of issued Shares of our Company
(excluding treasury shares) immediately after the Invitation, after adjusting for (I) new Shares
arising from the conversion or exercise of the Instruments or any convertible securities; and
(II) any subsequent bonus issue, consolidation or sub-division of Shares;
45
(3)
in exercising such authority, our Company shall comply with the provisions of the Catalist
Rules for the time being in force (unless such compliance has been waived by the SGX-ST)
and the Articles of Association for the time being of our Company; and
(4)
unless revoked or varied by our Company in a general meeting, such authority shall continue
in force until (I) the conclusion of the next annual general meeting of our Company; or (II)
the date by which the next annual general meeting of our Company is required by law to be
held, whichever is the earlier;
(g)
the adoption of the Performance Share Plan, the rules of which are set out in Appendix F of this
Offer Document and that our Directors be authorised to allot and issue Performance Shares upon
the release of Awards granted under the Performance Share Plan; and
(h)
the adoption of the ESOS, the rules of which are set out in Appendix G of this Offer Document
and that our Directors be authorised to allot and issue Option Shares upon the exercise of Options
granted under the ESOS.
As at the Latest Practicable Date, our Company has only one (1) class of shares, being ordinary shares.
The rights and privileges attached to our Shares are stated in our Articles. Save for the Performance
Shares and the Option Shares, there are no founder, management, deferred or unissued Shares
reserved for the issuance for any purpose. Save for the Options which may be granted under the ESOS,
no person has been, or is entitled to be, given an option to subscribe for any securities of our Company
or any of its subsidiaries. There are no Shares that are held by or on behalf of our Company or by our
subsidiaries.
As at the date of this Offer Document, no Award has been granted under the Performance Share Plan
and no Option has been granted under the ESOS.
As at the Latest Practicable Date, the issued and paid-up share capital of our Company was S$7,952,863
comprising 225,000,000 Shares. Upon the allotment and issue of the New Shares, the resultant issued
and paid-up share capital of our Company will be increased to approximately S$18,469,317comprising
265,000,000 Shares.
Details of the changes in the issued and paid-up share capital of our Company since incorporation and
the resultant issued and paid-up share capital immediately after the Invitation are as follows:
Number of
Shares
Issued and paid-up Shares as at date of incorporation
Issued and Paid-up
Share Capital (S$)
2
2
Issue of new Shares pursuant to the Restructuring Exercise
224,999,998
7,952,861
Issued and paid-up Shares immediately after the Restructuring Exercise
225,000,000
7,952,863
40,000,000
10,516,454(1)
New Shares issued pursuant to the Invitation
Post-Invitation issued and paid-up share capital
265,000,000
18,469,317
Note:
(1)
This takes into account set-off against share capital our Company’s share of the estimated expenses incurred in connection
with the Invitation of approximately S$0.68 million, and excludes our Company’s share of the estimated expenses incurred
in connection with the Invitation of approximately S$2.06 million to be charged directly to the combined statements of
comprehensive income.
46
SHAREHOLDERS
OWNERSHIP STRUCTURE
The Directors and Shareholders of our Company and their respective shareholdings immediately before
and after the Invitation are set out as follows:
Before the Invitation
Direct Interest
Number of
Shares
Melvin Goh(1)
Andy Goh(1)
After the Invitation
Deemed Interest
%
Number of
Shares
135,000,000
60.0
90,000,000
Ng Tiak Soon
Direct Interest
%
Number of
Shares
–
–
40.0
–
–
–
Tan Siok Sing
–
Lim Kim Quee
Public
Deemed Interest
%
Number of
Shares
%
111,000,000
41.9
–
–
–
74,000,000
27.9
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
80,000,000
30.2
225,000,000
100.0
265,000,000
100.0
Directors
Total
Note:
(1)
Melvin Goh and Andy Goh are siblings. Save as disclosed, none of the Shareholders has any familial relationship with any
Director, Substantial Shareholder or any Executive Officer of our Group.
The Shares held by our Directors and Controlling Shareholders do not carry different voting rights from
the Invitation Shares. Our Directors are not aware of any arrangement, the operation which may, at a
subsequent date, result in a change in control of our Company.
Save as disclosed in this Offer Document, our Company is not directly or indirectly owned or controlled by
another corporation, any government or other natural or legal person whether severally or jointly.
There has not been any public take-over offer by a third party in respect of our Shares or by our
Company in respect of the shares of another corporation or units of a business trust which has occurred
between 1 April 2012 and the Latest Practicable Date.
Significant changes in percentage of ownership
Save as disclosed in this section and the section entitled “Restructuring Exercise” and “Share Capital” of
this Offer Document, there has been no significant changes in the percentage ownership of our Shares
from the incorporation of our Company until the Latest Practicable Date.
47
VENDORS
Details of the Vendors who will be selling their Shares in the Invitation are set out below:
Shares held immediately
before the Invitation
Vendor Shares offered pursuant
to the Invitation
Shares held immediately after
the Invitation
% of
pre-Invitation
share capital
Number of
Shares
% of
pre-Invitation
share capital
% of
post-Invitation
share capital
Number of
Shares
% of
post-Invitation
share capital
Vendors
Number of
Shares
Melvin Goh(1)
135,000,000
60.0
24,000,000
10.7
9.1
111,000,000
41.9
Andy Goh(1)
90,000,000
40.0
16,000,000
7.1
6.0
74,000,000
27.9
Note:
(1)
Melvin Goh and Andy Goh are our Executive Directors and Controlling Shareholders of the Company.
Save as disclosed in this Offer Document, none of our Directors or Controlling Shareholders is interested
in the Vendor Shares.
MORATORIUM
To demonstrate their commitment to our Group, our Executive Chairman and CEO, Melvin Goh and
our Executive Director and Deputy CEO, Andy Goh who will hold 185,000,000 Shares in aggregate,
representing approximately 69.8% of our Company’s post-Invitation share capital, have each undertaken
not to sell, contract to sell, realise, assign, transfer, pledge, grant any option to, dispose of or enter into
any agreement that will directly or indirectly constitute or will be deemed as a disposal of any part of
his interest in our Company for a period of six (6) months commencing from the date of our Company’s
admission to Catalist, and for a period of six (6) months thereafter not to sell, contract to sell, realise,
assign, transfer, pledge, grant any option to, dispose of or enter into any agreement that will directly or
indirectly constitute or will be deemed as a disposal of any part of his interest in our Company to below
50% of each of their original shareholdings in our Company.
48
DILUTION
Dilution is defined as the amount by which the Invitation Price paid by the subscribers and/or purchasers
of our Invitation Shares (“New Investors”) exceeds our Adjusted NAV per Share immediately after
the Invitation. Our Adjusted NAV per Share as at 30 June 2013, before adjusting for the estimated net
proceeds from the issue of the New Shares and based on the pre-Invitation share capital of 225,000,000
Shares, was 4.90 cents per Share.
Pursuant to the issue of 40,000,000 New Shares at the Invitation Price in connection with the Invitation,
our Adjusted NAV per Share after adjusting for the estimated net proceeds from the issue of the New
Shares and based on the post-Invitation share capital of 265,000,000 Shares would be be 7.35 cents per
Share. This represents an immediate increase in the Adjusted NAV per Share of 2.45 cents per Share to
our existing Shareholders and an immediate dilution in the Adjusted NAV per Share of 20.65 cents per
Share to our New Investors pursuant to the Invitation. The following table illustrates such dilution on a per
Share basis as at 30 June 2013:
Cents
Invitation Price
28.00
Adjusted NAV per Share as at 30 June 2013 based on pre-Invitation share capital of
225,000,000 Shares
Increase in Adjusted NAV per Share attributable to existing Shareholders
Adjusted NAV per Share after the Invitation(1)
4.90
2.45
7.35
Dilution in Adjusted NAV per Share to New Investors pursuant to the Invitation
Dilution in Adjusted NAV per Share to New Investors as a percentage of Invitation
Price pursuant to the Invitation
20.65
73.8%
Notes:
(1)
The computed Adjusted NAV does not take into account our actual financial performance from 1 July 2013 up to the Latest
Practicable Date. Depending on our actual results, our NAV per Share after the Invitation may be higher or lower than the
computed Adjusted NAV.
(2)
Please refer to the section entitled “Invitation Statistics” of this Offer Document for the definition of “Adjusted NAV”.
The following table summarises the total number of Shares issued by us during the period of three (3)
years prior to the date of lodgement of this Offer Document, the total consideration and the average price
per Share paid by our Controlling Shareholders (after adjusting for the Restructuring Exercise) and our
New Investors pursuant to the Invitation:
Number of Shares
acquired (adjusted
for the Restructuring
Exercise)
Total consideration
(S$)
Average price per Share
(cents)
135,000,000
4,771,717
3.53
Andy Goh(1)
90,000,000
3,181,146
3.53
New Investors pursuant to
the Invitation
80,000,000
22,400,000
28.00
Controlling Shareholders
Melvin Goh(1)
Note:
(1)
Melvin Goh and Andy Goh are our Executive Directors and Controlling Shareholders.
49
RESTRUCTURING EXERCISE
Our Group was formed through the Restructuring Exercise which involved a series of acquisitions and the
rationalisation of our corporate and shareholding structure for the purposes of the Invitation. Pursuant to
the Restructuring Exercise, our Company became the holding company of our Group.
The Restructuring Exercise involved the following steps:
1.
Incorporation of our Company
Our Company was incorporated on 12 December 2012 in the Republic of Singapore in accordance
with the Companies Act as a private limited company with an issued and paid-up share capital of
S$2.00 comprising two (2) Shares, each held by Melvin Goh and Andy Goh.
2.
Incorporation of GTA Singapore
GTA Singapore was incorporated on 10 October 2012 in the Republic of Singapore in accordance
with the Companies Act as a private limited company with an issued and paid-up share capital of
S$1.00 comprising one (1) ordinary share, which was wholly-owned by EuroAutomobile. As at the
Latest Practicable Date, no further shares in the capital of GTA Singapore have been issued.
3.
Incorporation of deLaCour Singapore
deLaCour Singapore was incorporated on 5 November 2012 in the Republic of Singapore in
accordance with the Companies Act as a private limited company with an issued and paidup share capital of S$1.00 comprising one (1) ordinary share, which was wholly-owned by
EuroAutomobile. As at the Latest Practicable Date, no further shares in the capital of deLaCour
Singapore has been issued.
4.
Acquisition of GTA Singapore and deLaCour Singapore
On 29 November 2013, our Company entered into a sale and purchase agreement with
EuroAutomobile pursuant to which our Company acquired from EuroAutomobile the entire issued
and paid-up capital of each of GTA Singapore and deLaCour Singapore at a nominal consideration
of S$1.00 in cash for each of GTA Singapore and deLaCour Singapore.
Upon completion of the aforesaid acquisition, each of GTA Singapore and deLaCour Singapore
became wholly-owned subsidiaries of our Company.
5.
Acquisition of EuroSports Auto
On 29 November 2013, our Company entered into a sale and purchase agreement with Melvin
Goh and Andy Goh pursuant to which our Company acquired from Melvin Goh and Andy Goh, the
entire issued and paid-up capital of EuroSports Auto at an aggregate consideration of S$7,952,859
(the “EuroSports Purchase Consideration”), which was determined based on the audited NTA of
EuroSports Auto as at 31 March 2013. The EuroSports Purchase Consideration was satisfied by
the allotment and issue of an aggregate 224,999,996 Shares, credited as fully paid in the following
manner:
Number of Shares issued
to such allottee
Name of allottee
Melvin Goh
134,999,998
Andy Goh
89,999,998
Total
224,999,996
Upon completion of the aforesaid acquisition, EuroSports Auto became a wholly-owned subsidiary
of our Company.
50
6.
Acquisition of EuroAutomobile
On 29 November 2013, our Company entered into a sale and purchase agreement with Melvin
Goh and Andy Goh pursuant to which our Company acquired from Melvin Goh and Andy Goh, the
entire issued and paid-up capital of EuroAutomobile at a nominal consideration of S$2.00, which
was satisfied by the allotment and issue of one (1) Share at S$1.00 per Share, credited as fully
paid, to each of Melvin Goh and Andy Goh. As at 30 June 2013, EuroAutomobile was in a negative
NTA position. As EuroAutomobile was in a negative NTA position at the time of acquisition,
EuroAutomobile was acquired at a nominal consideration.
Upon completion of the aforesaid acquisition, EuroAutomobile became a wholly-owned subsidiary
of our Company.
7.
Disposal of shares in Brickfree and E-Elements
As part of the Restructuring Exercise to dispose of our non-luxury lifestyle businesses prior to our
listing on Catalist, we have completed the following disposals:
(a)
On 30 September 2012, EuroSports Auto disposed of 500,000 ordinary shares in Brickfree
to Melvin Goh at a cash consideration of S$500,000. Such consideration was based on the
initial investment amount by EuroSports Auto; and
(b)
On 12 September 2012, EuroSports Auto transferred 15,000 ordinary shares in E-Elements
to Andy Goh at a nominal consideration of S$1.00. The aggregate amount of S$75,000
invested by EuroSports Auto in E-Elements has since been written-off. The consideration for
E-Elements was nominal as it was a loss-making entity. The shareholders’ loan of S$60,000
and the subscription consideration of S$15,000 were written off as such payables were
deemed not recoverable, taking into consideration that E-Elements was a dormant company
with a negative NAV at the time of the disposal.
Further details on the aforesaid disposals can be found in the sections entitled “Interested Person
Transactions – Past Interested Person Transactions – Acquisition and Disposal of shares in
Brickfree” and “Interested Person Transactions – Past Interested Person Transactions – Disposal of
shares in E-Elements”.
8.
Conversion of our Company into a public limited company
On 5 December 2013, our Company was converted into a public limited company and we changed
our name to “EuroSports Global Limited”.
51
GROUP STRUCTURE
Our Group structure immediately after the Restructuring Exercise is as follows:
EuroSports
100%
100%
EuroAutomobile
100%
EuroSports Auto
100%
GTA Singapore
deLaCour
Singapore
Details of our subsidiaries are as follows:
Issued and
Paid-Up
Capital
Effective equity
interest held by
our Group
Trading and
distribution of
automobiles
and automobile
related parts and
accessories
S$2,000,000
100%
Singapore
Trading and
distribution of
automobiles
and automobile
related parts
and accessories;
and trading and
distribution of
watches and related
accessories
S$1,500,000
100%
10 October 2012 /
Singapore
Singapore
Trading and
distribution of
automobiles
and automobile
related parts and
accessories
S$1.00
100%
5 November 2012 /
Singapore
Singapore
Trading and
distribution of
watches and related
accessories
S$1.00
100%
Name of
Company
Date and Place of
Incorporation
Principal Place
of Business
EuroSports Auto
Pte Ltd
8 October 1998 /
Singapore
Singapore
EuroAutomobile
Pte. Ltd.
7 February 2002 /
Singapore
Spania GTA Asia
Pacific Private Ltd.
deLaCour Asia
Pacific Pte. Ltd.
Principal Activities
Save as disclosed above, there are no other subsidiaries, subsidiary entities, associated companies and
associated entities of our Group.
None of our subsidiaries is listed on any stock exchange.
52
SELECTED COMBINED FINANCIAL INFORMATION
The following selected combined financial information should be read in conjunction with the full text
of this Offer Document, including the Audited Combined Financial Statements, the Unaudited Interim
Combined Financial Statements and the Unaudited Pro Forma Combined Financial Information as set
out in Appendices A, B and C of this Offer Document respectively and the section entitled “Management’s
Discussion and Analysis of Financial Position and Results of Operations” of this Offer Document.
Combined Statements of Comprehensive Income(1)
Audited
Unaudited
(S$’000)
FY2011
FY2012
FY2013
Revenue
107,178
113,042
86,368
25,648
19,563
Cost of Sales
(94,651)
(94,513)
(69,171)
(20,088)
(14,658)
Gross Profit
12,527
18,529
17,197
5,560
4,905
Other Income
1,529
2,945
4,135
788
620
Interest Income
13
97
70
Other Credits (Charges), Net
18
(92)
(489)
1Q2013
1
(411)
1Q2014
1
(16)
Marketing and Distribution Expenses
(2,794)
(3,670)
(3,362)
(683)
(719)
Administrative Expenses
(7,293)
(7,980)
(8,740)
(1,673)
(2,023)
Finance Costs
(740)
Profit Before Tax
3,260
Income Tax Expense
(534)
(502)
(466)
9,327
8,345
(1,691)
(1,626)
(92)
3,490
(593)
(166)
2,602
(443)
Profit, Net of Tax
2,726
7,636
6,719
2,897
2,159
Total Comprehensive Income
2,726
7,636
6,719
2,897
2,159
1.21
3.39
2.99
1.29
0.96
1.03
2.88
2.54
1.09
0.81
EPS
- Basic EPS (cents)(2)(4)
(3)
- Adjusted EPS (cents)
Notes:
(1)
The combined statements of comprehensive income have been prepared on the basis that our Group has been in existence
prior to the Restructuring Exercise. Please refer to the Audited Combined Financial Statements and the Unaudited Interim
Combined Financial Statements as set out in Appendices A and B respectively of this Offer Document for the basis of
preparation of the combined financial statements of our Group.
(2)
For comparative purposes, basic EPS is calculated based on the profit after tax for the financial year/period and the preInvitation share capital of 225,000,000 Shares.
(3)
Adjusted EPS is calculated based on the profit after tax for the financial year/period and the post-Invitation share capital of
265,000,000 Shares.
(4)
Had the Service Agreements (as disclosed in the section entitled “Directors, Executive Officers and Employees – Service
Agreements” of this Offer Document) been in effect from the beginning of FY2013, our profit before tax and profit after tax for
FY2013 would have been S$7.23 million and S$5.79 million respectively and our basic EPS based on the pre-Invitation share
capital of 225,000,000 Shares would have been 2.57 cents.
53
Combined Statements of Financial Position(1)
Audited
as at
Unaudited
as at
31 March 2013
30 June 2013
Property, Plant and Equipment
22,279
23,775
Total Non-Current Assets
22,279
23,775
16,958
16,349
6,362
3,724
(S$’000)
Non-Current Assets
Current Assets
Inventories
Trade and Other Receivables
Other Assets
2,985
2,769
Cash and Cash Equivalents
5,942
4,094
Total Current Assets
32,247
26,936
Total Assets
54,526
50,711
Share Capital
3,500
3,500
Retained Earnings
5,357
7,516
Total Equity
8,857
11,016
12,521
13,925
1,346
1,234
13,867
15,159
1,662
1,828
EQUITY AND LIABILITIES
Equity
Other Financial Liabilities
Other Liabilities, Non-Current
Total Non-Current Liabilities
Current Liabilities
Income Tax Payable
Trade and Other Payables
6,443
4,969
17,964
13,296
Other Liabilities, Current
5,733
4,443
Total Current Liabilities
31,802
24,536
Total Liabilities
45,669
39,695
Total Equity and Liabilities
54,526
50,711
3.94
4.90
NAV per Share (cents)(2)
Notes:
(1)
The combined statements of financial position as at 31 March 2013 and 30 June 2013 have been prepared on the basis
that our Group has been in existence prior to the Restructuring Exercise. Please refer to the Audited Combined Financial
Statements and the Unaudited Interim Combined Financial Statements as set out in Appendices A and B of this Offer
Document respectively for the basis of preparation of the combined financial statements of our Group.
(2)
NAV per Share as at 31 March 2013 and 30 June 2013 have been computed based on our pre-Invitation share capital of
225,000,000 Shares.
54
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL POSITION AND
RESULTS OF OPERATIONS
In the following section we discuss our historical combined results of operations for the financial years
ended 31 March 2011, 2012 and 2013 and financial period ended 30 June 2013, our historical combined
financial positions as at 31 March 2013 and 30 June 2013, and our management’s assessment of the
factors that may affect our prospects and performance in future periods. You should read the following
discussion together with the Audited Combined Financial Statements, the Unaudited Interim Combined
Financial Statements and the Unaudited Pro Forma Combined Financial Information as set out in
Appendices A, B and C of this Offer Document respectively.
This discussion and analysis contains forward-looking statements which involve risks and uncertainties.
Our actual results may differ from those anticipated in these forward-looking statements. Factors that
might cause our actual future results to differ from those projected in the forward-looking statements
include, but are not limited to, those discussed below and elsewhere in this Offer Document, particularly
in the section entitled “Risk Factors” of this Offer Document.
OVERVIEW
Revenue
We derive our revenue primarily from (i) sale of automobiles, (ii) provision of after-sales services, and (iii)
sale of watches.
We retail new ultra-luxury automobiles and luxury automobiles, which include Lamborghini automobiles,
Pagani automobiles and Alfa Romeo automobiles and customised automobiles supplied by Touring
Superleggera, as well as pre-owned automobiles. We provide trade-in services to our customers by
purchasing their pre-owned automobiles and subsequently disposing them in the market. Revenue from
the sale of automobiles is recognised upon the transfer of significant risks and rewards of ownership of
the products to our customers. During the Period under Review, revenue from sale of new automobiles
was mainly derived from Lamborghini automobiles, Alfa Romeo automobiles and Lotus automobiles.
We also provide after-sales services to our automobile customers. Our after-sales services include
maintenance and repair services, breakdown assistance services and sale of automobile parts and
accessories such as body components, under-carriage components, engine parts and batteries.
Generally, we are able to command better margins for provision of after-sales services to customers for
automobiles with expired warranties compared to automobiles which are covered by warranties. For the
Period under Review, we only provided servicing and repair of automobiles for brands we sold under
the distributorship and dealership agreements. Revenue from the provision of after-sales services is
recognised upon the completion of the services rendered and acceptance by customers.
As part of our vision to be a provider of luxury lifestyle products, we began selling luxury watches, being
the Swiss-made deLaCour brand of watches, in September 2012. Revenue from the sale of watches
is recognised upon the transfer of significant risks and rewards of ownership of the products to our
customers.
55
The table below sets out a breakdown of our revenue in FY2011, FY2012, FY2013, 1Q2013 and 1Q2014:
Revenue
Sale of Automobiles
- New Automobiles
- Pre-owned Automobiles
Provision of After-Sales
Services
Sale of Watches
Total Revenue
FY2011
S$’000
%
FY2012
S$’000
%
FY2013
S$’000
%
1Q2013
S$’000
%
1Q2014
S$’000
%
102,237
71,345
30,892
95.4
66.6
28.8
108,207
67,162
41,045
95.7
59.4
36.3
78,530
58,609
19,921
91.0
67.9
23.1
24,289
19,561
4,728
94.7
76.3
18.4
17,355
12,798
4,557
88.7
65.4
23.3
4,941
–
107,178
4.6
–
100.0
4,835
–
113,042
4.3
–
100.0
5,566
2,272
86,368
6.4
2.6
100.0
1,359
–
25,648
5.3
–
100.0
1,549
659
19,563
7.9
3.4
100.0
Please refer to the section entitled “General Information on our Group – Business Overview” of this Offer
Document for a more comprehensive discussion of the products and services we provide.
Our revenue was derived principally from the sale of new and pre-owned automobiles, which accounted
for approximately 95.4%, 95.7%, 91.0%, 94.7% and 88.7% of our total revenue in FY2011, FY2012,
FY2013, 1Q2013 and 1Q2014 respectively. Revenue from the provision of after-sales services accounted
for approximately 4.6%, 4.3%, 6.4%, 5.3% and 7.9% of our total revenue in FY2011, FY2012, FY2013,
1Q2013 and 1Q2014 respectively. Revenue from our sale of watches accounted for approximately 2.6%
and 3.4% of our total revenue in FY2013 and 1Q2014 respectively. Revenue from our automobile leasing
business has not been significant for the Period under Review.
Factors affecting our revenue
Our revenue may be affected by, inter alia, the following key factors:
(a)
demand for ultra-luxury automobiles and luxury automobiles in Singapore. The demand for ultraluxury automobiles and luxury automobiles in Singapore is affected by, inter alia, the disposable
income level per capita and purchasing power in Singapore;
(b)
launch of new automobile models by the automobile manufacturers. Generally, new automobile
models are able to command higher sales;
(c)
changes in laws and regulations in relation to automobile ownership;
(d)
our ability to maintain our long-term arrangements with our key suppliers;
(e)
our ability to continue to retain the services of our key management personnel; and
(f)
our ability to compete effectively in the automobile industry with competitors in this market in terms
of, inter alia, brand, quality, delivery time and price.
Please refer to the section entitled “Risk Factors” of this Offer Document for a more comprehensive
discussion of other factors which may affect our business operations, revenue and financial performance.
56
Cost of Sales
Our cost of sales comprises cost of purchases (which include cost of new and pre-owned automobiles,
cost of spare parts and cost of luxury watches), vehicle taxes and fees, and other costs.
The following table sets out a breakdown of our cost of sales in FY2011, FY2012, FY2013, 1Q2013 and
1Q2014:
Cost of Sales
FY2011
S$’000
%
FY2012
S$’000
%
FY2013
S$’000
%
1Q2013
S$’000
%
1Q2014
S$’000
%
Cost of Purchases
Vehicle Taxes and Fees
Other Costs
Total Cost of Sales
63,661
27,978
3,012
94,651
63,455
28,613
2,445
94,513
40,922
26,209
2,040
69,171
11,008
8,410
670
20,088
10,493
3,236
929
14,658
67.2
29.6
3.2
100.0
67.1
30.3
2.6
100.0
59.2
37.9
2.9
100.0
54.8
41.9
3.3
100.0
71.6
22.1
6.3
100.0
Our cost of purchases forms the biggest part of our cost of sales and these costs include cost of new and
pre-owned automobiles, provision for write-down of pre-owned automobiles, cost of automobile parts and
accessories, and cost of luxury watches.
We purchase new automobiles from automobile manufacturers and pre-owned automobiles mainly from
our customers who trade-in their pre-owned automobiles when they purchase our new automobiles. We
procure automobile parts and accessories mainly from automobile manufacturers. We purchase luxury
watches, being the Swiss-made deLaCour brand of watches, from the deLaCour Manufacturer, a Genevabased watchmaker.
Cost of purchases accounted for approximately 67.2%, 67.1%, 59.2%, 54.8% and 71.6% of our cost of
sales in FY2011, FY2012, FY2013, 1Q2013 and 1Q2014 respectively.
Our vehicle taxes and fees comprise mainly registration fees, cost of COE, excise duties and road tax.
Vehicle taxes and fees accounted for approximately 29.6%, 30.3%, 37.9%, 41.9% and 22.1% of our cost
of sales in FY2011, FY2012, FY2013, 1Q2013 and 1Q2014 respectively.
Other costs comprise mainly direct labour costs, sub-contracting costs, freight and delivery charges and
warranty provisions. Direct labour costs comprise mainly salaries and other staff-related expenses of our
employees involved in servicing and repair of automobiles. Sub-contracting costs comprise mainly costs
incurred when procuring external parties to provide certain other repair services. Other costs accounted
for approximately 3.2%, 2.6%, 2.9%, 3.3% and 6.3% of our cost of sales in FY2011, FY2012, FY2013,
1Q2013 and 1Q2014 respectively.
Our cost of sales may be affected by, inter alia, the following key factors:
(a)
fluctuations in purchase price from automobile manufacturers. Our purchase cost of new
automobiles and spare parts from automobile manufacturers are determined by the automobile
manufacturers and we have no control or influence over their pricing and business strategies.
However, our purchase costs of new automobiles are affected by the volume discounts that we
receive from automobile manufacturers based on the number of new automobiles that we purchase
or sell;
(b)
changes in the additional registration fees structure. Prior to 1Q2014, additional registration
fees chargeable by the LTA were calculated based on 100% of the open market value (the price
assessed by Singapore Customs that takes into account the purchase price and all other charges
incidental to the sale and delivery of the automobiles from its country of manufacture to Singapore)
of new automobiles.
57
As announced in the Singapore Budget 2013, a tiered additional registration fees structure was
introduced to replace the original registration fee of a 100% flat rate of open market value. Under
the new structure, the additional registration fees for automobile models with open market values
up to S$20,000 will remain at the rate of 100%, the next S$30,000 of open market value of the
automobile will attract a rate of 140% and any open market value beyond S$50,000 will attract a
rate of 180%. The new tiered structure applies to every automobile that is registered with COEs
obtained from the first COE bidding exercise in March 2013. The new tiered additional registration
fees structure will affect our cost of sales;
(c)
changes in custom duties. During the Period under Review, custom duties payable to Singapore
Customs were calculated based on 20% of the open market value of a new automobile. Any
changes in the charges imposed by Singapore Customs will significantly affect our cost of sales;
(d)
fluctuations in prices of COE. Prices of COE fluctuated during the Period under Review. A
significant increase in the COE prices will increase our cost of sales; and
(e)
changes in government regulations and requirements. Changes in regulations and requirements
applicable to the automobile industry could increase our cost of sales. For instance, under the new
vehicle tax system which took effect from 1 January 2013, an additional tax of up to S$20,000
would be levied on automobiles with high carbon emission with effect from 1 July 2013.
Please refer to the section entitled “Risk Factors” of this Offer Document for a more comprehensive
discussion of other factors which may affect our business operations and financial performance.
Gross Profit and Gross Profit Margin
Our gross profit was determined after deducting cost of sales from our revenue. Accordingly, our gross
profit margin was approximately 11.7%, 16.4%, 19.9%, 21.7% and 25.1% in FY2011, FY2012, FY2013,
1Q2013 and1Q2014 respectively.
Other Income
Our other income comprises mainly commission income, rental income, deferred income and sundry
income.
The following table sets forth a breakdown of our other income in FY2011, FY2012, FY2013, 1Q2013 and
1Q2014:
Other Income
FY2011
FY2012
FY2013
1Q2013
1Q2014
S$’000
%
S$’000
%
S$’000
%
S$’000
%
S$’000
%
Commission Income
692
45.3
1,378
46.8
2,542
61.5
432
54.8
283
45.7
Rental Income
511
33.4
600
20.4
606
14.6
141
17.9
168
27.0
–
–
508
17.2
448
10.8
127
16.1
112
18.1
326
21.3
459
15.6
539
13.1
88
11.2
57
9.2
1,529
100.0
2,945
100.0
4,135
100.0
788
100.0
620
100.0
Deferred Income
Sundry income
Total Other Income
Commission income arises from (i) referral fees for successful referral to banks and finance companies
for hire purchase arrangements; and (ii) fees for provision of funding support to EC and PT EuroSport
in respect of orders for Lamborghini automobiles placed by EC and PT EuroSport (please refer to the
section entitled “Interested Person Transactions” of this Offer Document for further details of the aforesaid
funding support arrangements).
Rental income arises mainly from the subletting of our premises at 30 Teban Gardens Crescent.
58
Deferred income arises from the recognition of income relating to the additions to our premises at
30 Teban Gardens Crescent. The additions to premises of S$4.05 million during FY2012 relate to the
fair value of the additions and extension of an additional third storey, comprising an automobile service
centre and an ancillary office to an existing second storey detached factory constructed on the premises
that were leased by our Group to a tenant. Our Group agreed to reimburse the tenant an amount of
S$1 million in FY2012 for the cost of construction, with the tenant incurring the remaining cost of
construction. The amount was paid in FY2013. In accordance with Interpretations of Financial Reporting
Standards 118 “Transfer of Assets from Customers”, we recognised S$3.05 million as deferred income
over the expected lease period from April 2011 to June 2017 on a straight line method. The deferred
income amount of S$3.05 million has been subsequently revised to S$2.75 million as our Group
reimbursed the tenant an additional amount of S$0.30 million in FY2013.
Sundry income comprises mainly unclaimed customer deposits which pertain to deposits placed by
customers for ordered automobiles, but did not take delivery subsequently, reimbursements of water and
electricity bills from tenants, accident claims from insurance companies and reimbursement of handling
fees of freight forwarders.
Other income amounted to approximately S$1.53 million, S$2.95 million, S$4.14 million, S$0.79 million
and S$0.62 million in FY2011, FY2012, FY2013, 1Q2013 and 1Q2014 respectively.
Interest Income
Interest income comprises interest received from cash deposits placed with financial institutions and
interest charged to customers for late payment in relation to sale of automobiles.
Other Credits and Charges
Our other credits and charges comprise mainly allowance for impairment on trade receivables and bad
debts written off, foreign exchange adjustment losses or gains, other financial assets written off, loss or
gain on disposal and write-off of plant and equipment and other payables written back.
The following table sets forth our other credits and charges in FY2011, FY2012, FY2013, 1Q2013 and
1Q2014:
Allowance for Impairment on Trade Receivables and Bad
Debts written off
Foreign Exchange Adjustment Losses/(Gains)
FY2011
FY2012
FY2013
1Q2013
1Q2014
S$’000
S$’000
S$’000
S$’000
S$’000
68
235
182
110
–
(87)
117
205
162
16
Other Financial Assets Written Off
–
15
Loss/(Gain) on Disposal and Write-Off of Plant and Equipment
1
(48)
–
–
–
112
139
–
Other Payables Written Back
–
(230)
Miscellaneous Credits and Charges
–
3
–
–
–
(10)
–
Total Other Credits and Charges
(18)
92
489
–
411
16
Allowances for impairment on trade receivables and bad debts written off arise from amounts
uncollectible from trade and other debtors.
Foreign exchange adjustment losses or gains arise due to (i) fluctuations in foreign currencies relating to
our purchases; and (ii) foreign currency forward contracts gains or losses.
Other financial assets written-off arise from write-off of investments in E-Elements. Information on
E-Elements can be found in the section entitled “Interested Person Transactions – Past Interested Person
Transactions – Disposal of shares in E-Elements” of this Offer Document.
The loss or gain on disposal and write-off of plant and equipment arises mainly due to disposals of
automobiles used by our Group and the write-off of the renovation at the showroom at 11 Leng Kee Road
upon the non-renewal of the lease in FY2013.
59
Other payables written-back relate to write-back of other payables of a related party, Multigo Realty
Investment (S) Pte Ltd, of S$0.23 million. Multigo Realty Investment (S) Pte Ltd was incorporated in
Singapore on 23 May 1990 under the Companies Act as a private limited company. The company was
dissolved by way of a members’ voluntary winding-up as of 1 March 2012. The principal activity of the
company was that of real estate development. Immediately prior to the winding-up of the company, the
issued and paid-up share capital of the company was S$300,000 comprising 300,000 ordinary shares,
which was held by the late Goh Lue Tee (122,000 shares or 40.7% interest), our Executive Chairman and
CEO, Melvin Goh (177,999 shares or 59.3% interest) and our Executive Director and Deputy CEO, Andy
Goh (one (1) share). The directors of the company were our Executive Chairman and CEO, Melvin Goh
and our Executive Director and Deputy CEO, Andy Goh.
Miscellaneous credits and charges relate to government grant income and other assets written off.
We recorded net credits in this respect of approximately S$0.02 million in FY2011, and net charges of
approximately S$0.09 million, S$0.49 million, S$0.41 million and S$0.02 million in FY2012, FY2013,
Our marketing and distribution expenses comprise advertising and promotions, sales commission,
entertainment expenses, rental expenses and servicing expenses.
The following table sets forth a breakdown of our marketing and distribution expenses in FY2011,
FY2012, FY2013, 1Q2013 and 1Q2014:
Marketing and
Distribution Expenses
FY2011
S$’000
Advertising and
Promotions
933
FY2012
%
33.4
S$’000
1,580
FY2013
%
43.1
S$’000
1,590
1Q2013
%
S$’000
47.3
310
1Q2014
%
45.4
S$’000
366
%
50.9
Sales Commission
797
28.5
990
27.0
755
22.5
163
23.9
170
23.6
Entertainment Expenses
524
18.8
560
15.2
650
19.3
85
12.4
145
20.2
Rental Expenses
276
9.9
304
8.3
120
3.6
81
11.9
–
–
Servicing Expenses
264
9.4
236
6.4
247
7.3
44
6.4
38
5.3
2,794
100.0
3,670
100.0
3,362
100.0
683
100.0
719
100.0
Total Marketing and
Distribution Expenses
Advertising and promotions comprise mainly advertisement expenses, expenses incurred on launch
of new automobiles, sponsorship for third party events, and expenses related to our marketing events.
Advertising and promotions accounted for approximately 33.4%, 43.1%, 47.3%, 45.4% and 50.9% of our
marketing and distribution expenses in FY2011, FY2012, FY2013, 1Q2013 and 1Q2014 respectively.
Sales commission comprises sales commission paid to sales personnel. Sales commission accounted
for approximately 28.5%, 27.0%, 22.5%, 23.9% and 23.6% of our marketing and distribution expenses in
FY2011, FY2012, FY2013, 1Q2013 and 1Q2014 respectively.
Entertainment expenses comprise local and overseas entertainment expenses incurred by our employees
involved in sales and marketing activities and gifts to customers. Entertainment expenses accounted for
approximately 18.8%, 15.2%, 19.3%, 12.4% and 20.2% of our marketing and distribution expenses in
Rental expenses comprise lease of showroom at 11 Leng Kee Road. The lease of premises at 11 Leng
Kee Road expired in September 2012 and was not renewed. We allocate rental expenses to marketing
and distribution expenses and administrative expenses based on the area usage of the premises for
office and showroom purposes. Rental expenses accounted for approximately 9.9%, 8.3%, 3.6% and
11.9% of our marketing and distribution expenses in FY2011, FY2012, FY2013 and 1Q2013 respectively.
60
Servicing expenses comprise mainly services provided to customers on a goodwill basis in relation to
repair and servicing of automobiles. Servicing expenses accounted for approximately 9.4%, 6.4%, 7.3%,
6.4% and 5.3% of our marketing and distribution expenses in FY2011, FY2012, FY2013, 1Q2013 and
1Q2014 respectively.
Total marketing and distribution expenses amounted to approximately S$2.79 million, S$3.67 million,
S$3.36 million, S$0.68 million and S$0.72 million and accounted for approximately 2.6%, 3.2%, 3.9%,
2.7% and 3.7% of our revenue in FY2011, FY2012, FY2013, 1Q2013 and 1Q2014 respectively.
Our administrative expenses comprise employee benefits expenses, depreciation expenses, utilities and
maintenance expenses, rental expenses, repair and maintenance expenses, travelling expenses, listing
expenses and other administrative expenses.
The following table sets forth a breakdown of our administrative expenses in FY2011, FY2012, FY2013,
1Q2013 and 1Q2014:
Employee Benefits
Expenses
Depreciation Expenses
FY2011
FY2012
FY2013
1Q2013
S$’000
1Q2014
S$’000
%
S$’000
%
S$’000
%
%
S$’000
%
3,963
54.4
4,036
50.6
3,666
41.9
787
47.0
794
39.2
730
10.0
1,527
19.1
1,808
20.7
233
13.9
440
21.8
Utilities and Maintenance
Expenses
329
4.5
446
5.6
443
5.1
124
7.4
99
4.9
Rental Expenses
439
6.0
491
6.1
378
4.3
115
6.9
74
3.7
Repair and Maintenance
Expenses
404
5.5
274
3.4
282
3.2
51
3.1
86
4.2
Travelling Expenses
232
3.2
235
3.0
336
3.8
105
6.3
67
3.3
–
–
–
–
713
8.2
50
3.0
66
3.3
Other Administrative
Expenses
1,196
16.4
971
12.2
1,114
12.8
208
12.4
397
19.6
Total Administrative
Expenses
7,293
100.0
7,980
100.0
8,740
100.0
1,673
100.0
2,023
100.0
Listing Expenses
Our employee benefits expenses comprise mainly salaries, bonuses and other staff-related expenses
of our employees (including our Executive Directors) involved in administrative functions, directors’ fees
and remuneration, medical fees and welfare and training cost. Employee benefits expenses accounted
for approximately 54.4%, 50.6%, 41.9%, 47.0% and 39.2% of our administrative expenses in FY2011,
FY2012, FY2013, 1Q2013 and 1Q2014 respectively.
Our depreciation expenses comprise depreciation charges for plant and equipment, motor vehicles,
renovation and leasehold property and improvements. Depreciation expenses accounted for
approximately 10.0%, 19.1%, 20.7%, 13.9% and 21.8% of our administrative expenses in FY2011,
FY2012, FY2013, 1Q2013 and 1Q2014 respectively.
Our utilities and maintenance expenses comprise mainly electricity and water charges, office security
charges and cleaning charges. Utilities and maintenance expenses accounted for approximately 4.5%,
5.6%, 5.1%, 7.4% and 4.9% of our administrative expenses in FY2011, FY2012, FY2013, 1Q2013 and
Our rental expenses comprise mainly lease of our premises at 30 Teban Gardens Crescent and lease of
showroom at 11 Leng Kee Road. The lease of premises at 11 Leng Kee Road expired in September 2012
and was not renewed. We allocate rental expenses for 11 Leng Kee Road to marketing and distribution
expenses and administrative expenses based on the area usage of the premises for office and showroom
purposes. Rental expenses accounted for approximately 6.0%, 6.1%, 4.3%, 6.9% and 3.7% of our
administrative expenses in FY2011, FY2012, FY2013, 1Q2013 and 1Q2014 respectively.
61
Our repair and maintenance expenses comprise mainly repair and maintenance expenses for buildings,
motor vehicles, office equipment and service centre equipment. Repair and maintenance expenses
accounted for approximately 5.5%, 3.4%, 3.2%, 3.1% and 4.2% of our administrative expenses in
Our travelling expenses comprise mainly air fares and hotel accommodation charges incurred by our
Executive Directors on their overseas trips for work and business development purposes. Travelling
expenses accounted for approximately 3.2%, 3.0%, 3.8%, 6.3% and 3.3% of our administrative expenses
in FY2011, FY2012, FY2013, 1Q2013 and 1Q2014 respectively.
Our listing expenses comprise our share of the professional and listing fees in relation to the Invitation.
Listing expenses accounted for approximately 8.2%, 3.0% and 3.3% of our administrative expenses in
FY2013, 1Q2013 and 1Q2014 respectively.
Other administrative expenses comprise mainly property tax, insurance, professional fees, donations,
telecommunications, office supplies, bank and credit card charges, LTA charges, guarantor fees paid
to our Executive Directors for providing personal guarantees on the banking facilities of our Group and
housing benefits provided to our Executive Director and Deputy CEO, Andy Goh (please refer to the
section entitled “Interested Person Transactions” of this Offer Document for further details) and other
miscellaneous expenses. Other administrative expenses accounted for approximately 16.4%, 12.2%,
12.8%, 12.4% and 19.6% of our administrative expenses in FY2011, FY2012, FY2013, 1Q2013 and
Administrative expenses amounted to approximately S$7.29 million, S$7.98 million, S$8.74 million,
S$1.67 million and S$2.02 million and accounted for approximately 6.8%, 7.1%, 10.1%, 6.5% and 10.3%
of our revenue in FY2011, FY2012, FY2013, 1Q2013 and 1Q2014 respectively.
Finance Costs
Our finance costs comprise interest expenses on bank loans, bank overdrafts, finance leases, letters of
credit and trust receipts which amounted to approximately S$0.74 million, S$0.50 million, S$0.47 million,
S$0.09 million and S$0.17 million in FY2011, FY2012, FY2013, 1Q2013 and 1Q2014 respectively.
Income Tax Expense
We are subject to income tax at the applicable tax rate in Singapore. The statutory tax rate for Singapore
for the Period under Review was 17.0%.
Our income tax expense was approximately S$0.53 million, S$1.69 million, S$1.63 million, S$0.59 million
and S$0.44 million for FY2011, FY2012, FY2013, 1Q2013 and 1Q2014 respectively. Our effective income
tax rate was approximately 16.4%, 18.1%, 19.5%, 17.0% and 17.0% in FY2011, FY2012, FY2013,
REVIEW OF RESULTS OF OPERATIONS
FY2012 compared to FY2011
Revenue
Our revenue increased by approximately S$5.86 million or 5.5%, from S$107.18 million in FY2011 to
S$113.04 million in FY2012.
Our sale of automobiles increased by approximately S$5.97 million or 5.8%, from S$102.24 million in
FY2011 to S$108.21 million in FY2012. The increase was mainly due to an increase in sale of preowned automobiles of S$10.15 million, arising from clearance of inventory of pre-owned automobiles
brought forward from FY2011 and trade-in automobiles in FY2012. This led to higher number of preowned automobiles sold in FY2012 (being 78 pre-owned automobiles), as compared to 55 pre-owned
automobiles sold in FY2011. 21 pre-owned automobiles were sold to Motor-Way Credit, an independent
third party, in FY2012 as compared to eight (8) pre-owned automobiles in FY2011. This was partially
offset by a decrease in sale of new automobiles of S$4.18 million. 52 new Lamborghini automobiles were
sold in FY2012 compared to 63 new Lamborghini automobiles in FY2011. The decrease in sale of new
62
automobiles was mainly due to fewer Lamborghini Gallardo models sold as the life cycle for this range
was coming to an end and customers were expecting the launch of a new Lamborghini automobile model.
The new Lamborghini automobile model, Aventador LP 700-4, was launched in the first half of FY2012
and delivered to customers in the second half of FY2012.
Costs of Sales
Our cost of sales decreased by approximately S$0.14 million or 0.1%, from S$94.65 million in FY2011
to S$94.51 million in FY2012. The decrease was mainly due to a decrease in (i) cost of purchases by
S$0.21 million; and (ii) other costs by S$0.57 million. The decrease was partially offset by the increase in
vehicle taxes and fees by S$0.64 million.
Our gross profit increased by approximately S$6.00 million or 47.9%, from S$12.53 million in FY2011 to
S$18.53 million in FY2012. Our gross profit margin increased from approximately 11.7% in FY2011 to
16.4% in FY2012.
The increase in gross profit margin was mainly due to (i) higher gross profit margin from the new
Lamborghini automobile model, Lamborghini Aventador LP 700-4, which was launched in the first half of
FY2012 and delivered to customers in the second half of FY2012; and (ii) increase in after-sale services
provided to customers for automobiles with expired warranties which have higher gross profit margins as
compared to automobiles which are covered by warranties in FY2012.
Other Income
Our other income increased by approximately S$1.42 million or 92.5%, from S$1.53 million in FY2011
to S$2.95 million in FY2012. The increase in other income was mainly due to (i) deferred income of
S$0.51 million arising from the recognition of income relating to the additions to our premises at 30 Teban
Gardens Crescent in FY2012 while there was no such deferred income in FY2011; and (ii) the increase
in commission income by approximately S$0.69 million arising from higher hire purchase referral income
earned as customers took larger loan amounts and longer tenure hire purchase loans from banks and
finance companies, and higher funding fees from EC and PT EuroSport as a result of increase in orders
for Lamborghini automobiles placed by EC and PT EuroSport in FY2012 (please refer to the section
entitled “Interested Person Transactions” of this Offer Document for further details on the aforesaid
funding support arrangements).
Interest Income
Our interest income increased by approximately S$0.09 million or 631.2%, from S$0.01 million in FY2011
to S$0.10 million in FY2012. This was mainly due to interest charged to a customer for late payment in
relation to the sale of a new automobile in FY2012, while there was no such interest charged in FY2011.
Our other charges increased by S$0.11 million, from a credit of S$0.02 million in FY2011 to a charge of
S$0.09 million in FY2012. The increase was mainly due to:
(i)
an increase in allowance for impairment on trade receivables and bad debts written off of S$0.17
million;
(ii)
a foreign exchange loss of S$0.12 million in FY2012 as compared to a foreign exchange gain of
S$0.09 million in FY2011. The foreign currency loss in € arose mainly from the unwinding of our
forward currency contracts entered earlier at a loss as € depreciated against S$. We had to unwind
our forward currency contracts as our key manufacturers changed the currency in which they billed
us from € to S$; and
(iii)
an increase of S$0.02 million in other financial assets written off arising from write-off of investment
in E-Elements.
The increase was partially offset by the write-back of other payables of a related party, Multigo Realty
Investment (S) Pte Ltd of S$0.23 million in FY2012. The related party was voluntarily dissolved by
members in March 2012.
63
Our marketing and distribution expenses increased by S$0.88 million or 31.3%, from S$2.79 million in
FY2011 to S$3.67 million in FY2012. The increase was mainly due to the increase in (i) advertising and
promotions of S$0.65 million in relation to our 10th anniversary celebration as a Lamborghini dealer in
Singapore and the launch of a new Lamborghini automobile model, Aventador LP 700-4; and (ii) sales
commission of S$0.19 million due to higher sale of automobiles achieved in FY2012.
Our administrative expenses increased by approximately S$0.69 million or 9.4%, from S$7.29 million
in FY2011 to S$7.98 million in FY2012. The increase was mainly due to the increase in (i) depreciation
expenses of S$0.80 million arising mainly from the construction of an additional third storey comprising
an automobile service centre and an ancillary office to an existing second storey detached factory
constructed on the premises that were leased by our Group to a tenant; (ii) utilities and maintenance
expenses of S$0.12 million, out of which the increase of S$0.08 million was due to increase in utilities
bills arising from higher usage by the tenant upon the completion of their automobile service centre in
April 2011; and (iii) employee benefits expenses of S$0.07 million mainly due to higher bonuses paid
to our employees. This was partially offset by the decrease in (i) repair and maintenance expenses of
S$0.13 million; and (ii) other administrative expenses of S$0.23 million mainly due to absence of
guarantor fees paid to our Executive Directors in FY2012, compared to guarantor fees of S$0.13 million
paid to our Executive Directors in FY2011.
Finance Costs
Our finance costs decreased by approximately S$0.24 million or 32.3%, from S$0.74 million in FY2011 to
S$0.50 million in FY2012, mainly due to the decrease in the level of bank borrowings during FY2012.
Income Tax Expense
Our income tax expense increased by approximately S$1.16 million or 216.5%, from S$0.53 million in
FY2011 to S$1.69 million in FY2012, due to the higher profit before tax achieved.
Profit, Net of Tax
As a result of the above, our profit after tax increased by approximately S$4.91 million or 180.2%, from
S$2.73 million in FY2011 to S$7.64 million in FY2012.
FY2013 compared to FY2012
Revenue
Our revenue decreased by approximately S$26.67 million or 23.6%, from S$113.04 million in FY2012 to
S$86.37 million in FY2013.
Our sale of automobiles decreased by approximately S$29.68 million or 27.4%, from S$108.21 million
in FY2012 to S$78.53 million in FY2013. The decrease was mainly due to a decrease in (i) sale of preowned automobiles of S$21.13 million; and (ii) sale of new automobiles of S$8.55 million. The decrease
in sale of pre-owned automobiles was mainly due to the lower number of pre-owned automobiles sold in
FY2013 (being 32 pre-owned automobiles), as compared to 78 pre-owned automobiles sold in FY2012
when there was a clearance of inventory of pre-owned automobiles brought forward from FY2011 and
trade-in automobiles in FY2012. The decrease in the sale of new automobiles was mainly due to fewer
Lamborghini Gallardo models sold as the life cycle for this range was coming to an end, partially offset
by increase in sale of the new Lamborghini automobile model, Aventador LP 700-4. 42 new Lamborghini
automobiles were sold in FY2013 compared to 52 new Lamborghini automobiles in FY2012.
We recognised revenue of approximately S$2.27 million for the sale of deLaCour watches in FY2013,
while there was no such revenue from sale of watches in FY2012.
Our revenue from provision of after-sales services increased by S$0.73 million or 15.1%, from S$4.84
million in FY2012 to S$5.57 million in FY2013. The increase in revenue from provision of after-sales
services was mainly due to the increase in maintenance and repair services for increased number of
older automobiles on the road, sales of automobile parts and accessories, and certain other repair
services.
64
Costs of Sales
Our cost of sales decreased by approximately S$25.34 million or 26.8%, from S$94.51 million in FY2012
to S$69.17 million in FY2013. The decrease was mainly due to a decrease in (i) cost of purchases by
S$22.53 million; (ii) vehicle taxes and fees by S$2.41 million; and (iii) other costs by S$0.40 million.
Our gross profit decreased by approximately S$1.33 million or 7.2% from S$18.53 million in FY2012 to
S$17.20 million in FY2013. Notwithstanding the decline in gross profit, our gross profit margin increased
from approximately 16.4% in FY2012 to 19.9% in FY2013.
The increase in gross profit margin was mainly due to:
(i)
the sale of pre-owned automobiles at prices which achieve lower gross loss margins on average
as compared to FY2012. The lower gross loss margin from the sale of pre-owned automobiles
was primarily due to the sale of pre-owned automobiles in FY2013, which were acquired at more
favourable prices as compared to the sale of pre-owned automobiles in FY2012; and
(ii)
increase in the provision of after-sales services and sale of deLaCour watches in FY2013, which
have higher gross profit margins as compared to sale of automobiles.
Other Income
Our other income increased by approximately S$1.19 million or 40.4%, from S$2.95 million in FY2012 to
S$4.14 million in FY2013. The increase in other income was mainly due to the increase in commission
income of S$1.16 million arising from higher funding fees from EC and PT EuroSport as a result of the
increase in orders for Lamborghini automobiles placed by EC and PT EuroSport in FY2013 (please refer
to the section entitled “Interested Person Transactions” of this Offer Document for further details on the
aforesaid funding support arrangements).
Interest Income
Our interest income decreased by approximately S$0.03 million or 28.0%, from S$0.10 million in FY2012
to S$0.07 million in FY2013 mainly due to decrease in interest charged for late payment in relation to
sale of automobiles.
Our other charges increased by approximately S$0.40 million or 431.4% from a charge of S$0.09 million
in FY2012 to a charge of S$0.49 million in FY2013. The increase was mainly due to:
(i)
loss on disposal of plant and machinery of S$0.11 million arising from the write-off of the
renovations of showroom at 11 Leng Kee Road upon the non-renewal of the lease in FY2013
compared to gain on disposal of plant and machinery of S$0.05 million in FY2012;
(ii)
increase in foreign exchange loss of S$0.09 million. The foreign currency loss in FY2013
in € arose mainly from the unwinding of our forward currency contracts entered earlier at a
loss as € depreciated against S$. We had to unwind our forward currency contracts as our
key manufacturers changed their billing to us from € to S$. As at 31 March 2013, we have no
outstanding forward currency contracts; and
(iii)
absence of write-back of other payables in FY2013, while in FY2012, there was a write-back of
other payables of a related party, Multigo Realty Investment (S) Pte Ltd of S$0.23 million. The
related party was voluntarily dissolved by members in March 2012.
Our marketing and distribution expenses decreased by approximately S$0.31 million or 8.4%, from
S$3.67 million in FY2012 to S$3.36 million in FY2013. The decrease was mainly due to the decrease in
(i) rental expenses of S$0.18 million arising from the non-renewal of lease at 11 Leng Kee Road; and (ii)
sales commission of S$0.24 million due to lower sale of automobiles achieved in FY2013.
65
Our administrative expenses increased by approximately S$0.76 million or 9.5% from S$7.98 million in
FY2012 to S$8.74 million in FY2013. The increase was mainly due to (i) an increase in depreciation
expenses of S$0.28 million arising from purchase of motor vehicles, tools and equipment and
renovation of showroom and service centre at 30 Teban Gardens Crescent; (ii) an increase in travelling
expenses of S$0.10 million; (iii) listing expenses of S$0.71 million incurred in FY2013 while there was
no such expenses in FY2012; and (iv) an increase in other administrative expenses of S$0.14 million.
The increase in administrative expenses was partially offset by the decrease in (i) employee benefits
expenses of S$0.37 million as there were no directors’ fees accrued in FY2013; and (ii) rental expenses
of S$0.11 million arising from the non-renewal of lease of premises at 11 Leng Kee Road.
Finance Costs
Our finance costs decreased by approximately S$0.03 million or 7.2% from S$0.50 million in FY2012 to
S$0.47 million in FY2013, mainly due to the decrease in the level of bank borrowings during FY2013.
Income Tax Expense
Our income tax expense decreased by approximately S$0.06 million or 3.8% from S$1.69 million in
FY2012 to S$1.63 million in FY2013, mainly due to lower profit before tax achieved and utilisation of tax
losses brought forward from EuroAutomobile.
Profit, Net of Tax
As a result of the above, our profit after tax decreased by approximately S$0.92 million or 12.0%, from
S$7.64 million in FY2012 to S$6.72 million in FY2013.
1Q2014 compared to 1Q2013
Revenue
Our revenue decreased by approximately S$6.09 million or 23.7%, from S$25.65 million in 1Q2013 to
S$19.56 million in 1Q2014.
Our sale of automobiles decreased by approximately S$6.93 million or 28.5%, from S$24.29 million
in 1Q2013 to S$17.36 million in 1Q2014. The decrease was mainly due to a decrease in sale of new
automobiles of S$6.76 million as a result of (i) fewer Lamborghini automobiles sold; (ii) lower revenue
from the sale of Alfa Romeo automobiles as there were six (6) units of Alfa Romeo automobiles exported
in 1Q2014 where no registration fee or COE was required, leading to lower selling prices, while there was
no such export sale in 1Q2013; and (iii) absence of sales of Lotus automobiles in 1Q2014 compared to
four (4) Lotus automobiles sold in 1Q2013 as the Lotus Agreement had expired as of 31 March 2013 and
was not renewed by the parties. This was partially offset by the sale of one (1) unit of Pagani automobile
in 1Q2014 while there was no such sale in 1Q2013.
We recognised revenue of approximately S$0.66 million for the sale of deLaCour watches in 1Q2014,
while there was no such revenue from sale of watches in 1Q2013.
Our revenue from provision of after-sales services increased by S$0.19 million or 14.0% from S$1.36
million in 1Q2013 to S$1.55 million in 1Q2014. The increase in revenue from provision of after-sales
services was mainly due to the increase in maintenance and repair services for increased number of
older automobiles on the road, sales of automobile parts and accessories, and certain other repair
services.
Costs of Sales
Our cost of sales decreased by approximately S$5.43 million or 27.0%, from S$20.09 million in 1Q2013
to S$14.66 million in 1Q2014. The decrease was mainly due to a decrease in (i) costs of purchase by
S$0.52 million; and (ii) vehicle taxes and fees by S$5.17 million. The decrease was partially offset by the
increase in other costs by S$0.26 million.
66
Our gross profit decreased by approximately S$0.66 million or 11.8% from S$5.56 million in 1Q2013 to
S$4.90 million in 1Q2014. Our gross profit margin increased from approximately 21.7% in 1Q2013 to
25.1% in 1Q2014.
The increase in gross profit margin was mainly due to higher gross profit margin from the sale of
Lamborghini automobiles in 1Q2014 compared to 1Q2013 due to lower cost of purchase and higher
gross profit margin from the sale of one (1) unit of Pagani automobile.
Other Income
Our other income decreased by approximately S$0.17 million or 21.3%, from S$0.79 million in 1Q2013 to
S$0.62 million in 1Q2014. The decrease in other income was mainly due to the decrease in commission
income arising from lower hire purchase referral income earned resulting from the decrease in sale of
automobiles and lower quantum of hire purchase financing taken by our customers from banks and
finance companies.
Interest Income
Our interest income remained relatively stable at approximately S$1,400 in 1Q2013 and 1Q2014.
Our other charges decreased by approximately S$0.39 million or 96.2% from a charge of S$0.41 million
in 1Q2013 to a charge of S$0.02 million in 1Q2014. The decrease was mainly due to (i) absence of
allowance for impairment on trade receivables and bad debts written off in 1Q2014, while in 1Q2013,
there was an allowance for impairment on trade receivables and bad debts written off of S$0.11 million;
(ii) absence of loss on disposal of plant and equipment in 1Q2014, while in 1Q2013, there was a loss on
disposal of plant and equipment of S$0.14 million; and (iii) a decrease in foreign exchange loss of S$0.14
million.
Our marketing and distribution expenses increased by approximately S$0.04 million or 5.3%, from S$0.68
million in 1Q2013 to S$0.72 million in 1Q2014.
Our administrative expenses increased by approximately S$0.35 million or 20.9% from S$1.67 million
in 1Q2013 to S$2.02 million in 1Q2014. The increase was mainly due to the increase in (i) depreciation
expenses of S$0.21 million arising from additions to our premises at 30 Teban Gardens Crescent; and
(ii) other administrative expenses of S$0.19 million arising mainly from increase in donations of S$0.13
million.
Finance Costs
Our finance costs increased by approximately S$0.08 million or 80.7% from S$0.09 million in 1Q2013 to
S$0.17 million in 1Q2014, mainly due to an increase in the level of bank borrowings during 1Q2014.
Income Tax Expense
Our income tax expense decreased by approximately S$0.15 million or 25.3% from S$0.59 million in
1Q2013 to S$0.44 million in 1Q2014, mainly due to lower profit before tax achieved.
Profit, Net of Tax
As a result of the above, our profit after tax decreased by approximately S$0.74 million or 25.4%, from
S$2.90 million in 1Q2013 to S$2.16 million in 1Q2014.
67
REVIEW OF FINANCIAL POSITION
As at 31 March 2013
A review of the financial position of our Group as at 31 March 2013 is set out below.
Non-Current Assets
As at 31 March 2013, our non-current assets amounted to approximately S$22.28 million, representing
40.9% of our total assets and comprised property, plant and equipment, which include leasehold property
and improvements, renovations, motor vehicles, plant and equipment, and construction in progress. Our
construction in progress mainly relates to the acquisition costs of premises at 7 and 9 Chang Charn
Road.
Current Assets
As at 31 March 2013, our current assets amounted to approximately S$32.25 million, representing 59.1%
of our total assets and comprised the following:
(i)
inventories of approximately S$16.96 million, representing 52.6% of our current assets, which
comprised new and pre-owned automobiles, automobile parts and accessories and watches;
(ii)
trade and other receivables of approximately S$6.36 million, representing 19.7% of our current
assets, which comprised mainly trade receivables of S$1.50 million, and other receivables of
S$4.86 million from EC and PT EuroSport relating to funding support to EC and PT EuroSport in
respect of orders for Lamborghini automobiles placed by EC and PT EuroSport (please refer to the
section entitled “Interested Person Transactions” of this Offer Document for further details on the
aforesaid funding support arrangements);
(iii)
other current assets of approximately S$2.99 million, representing 9.3% of our current assets,
which comprised mainly deferred expenses of approximately S$0.13 million relating to listing
expenses, prepayments of S$0.08 million relating mainly to insurance, license fees and road tax,
deposit payment of €1.0 million (equivalent to approximately S$1.58 million) paid to GTA Spain
for orders of four (4) GTA automobiles, deposit payment of S$0.83 million paid to the Pagani
Manufacturer and Alfa Romeo Manufacturer and deposit payment of S$0.21 million paid to the
shareholders of E’ Collezione pursuant to a call option agreement with the shareholders of E’
Collezione (please refer to the section entitled “Interested Person Transactions” of this Offer
Document for further details on the aforesaid call option agreement); and
(iv)
cash and cash equivalents of approximately S$5.94 million, representing 18.4% of our current
assets.
As at 31 March 2013, our non-current liabilities amounted to approximately S$13.87 million, representing
30.4% of our total liabilities and comprised the following:
(i)
other financial liabilities of approximately S$12.52 million, representing 90.3% of our non-current
liabilities, which comprised bank borrowings of S$11.95 million and finance lease payables of
S$0.57 million; and
(ii)
other non-current liabilities of approximately S$1.35 million, representing 9.7% of our non-current
liabilities, which comprised the non-current portion of the deferred income relating to the additions
to our premises at 30 Teban Gardens Crescent.
Current Liabilities
As at 31 March 2013, our current liabilities amounted to approximately S$31.80 million, representing
(i)
income tax payable of approximately S$1.66 million, representing 5.2% of our current liabilities;
68
(ii)
trade and other payables of approximately S$6.44 million, representing 20.3% of our current
liabilities, which comprised trade payables of S$4.05 million relating to purchase of new and preowned automobiles and watches, accrued liabilities of S$0.64 million relating mainly to accrued
employee benefits and accrued marketing expenses, dividend payable of S$0.13 million, amount
payable to a related party of S$1.09 million and other payables of S$0.53 million in respect of the
construction of an annex to our premises at 30 Teban Gardens Crescent;
(iii)
other finance liabilities of approximately S$17.96 million, representing 56.5% of our current
liabilities, which comprised bank overdrafts of S$1.90 million, bank borrowings of S$1.61 million,
finance lease payables of S$0.92 million, and trust receipts and bills payables of S$13.53 million;
and
(iv)
other current liabilities of approximately S$5.73 million, representing 18.0% of our current liabilities,
which comprised deposits received from customers of S$4.87 million, current portion of deferred
income of S$0.45 million relating to the additions to our premises at 30 Teban Gardens Crescent
and warranty provision of S$0.41 million.
Equity
As at 31 March 2013, our equity of approximately S$8.86 million comprised share capital and retained
earnings.
As at 30 June 2013
A review of the financial position of our Group as at 30 June 2013 is set out below.
Non-Current Assets
As at 30 June 2013, our non-current assets amounted to approximately S$23.78 million, representing
46.9% of our total assets and comprised property, plant and equipment, which include leasehold property
and improvements, renovations, motor vehicles, plant and equipment, and construction in progress. Our
construction in progress mainly relates to the acquisition costs of premises at 7 and 9 Chang Charn
Road.
Current Assets
As at 30 June 2013, our current assets amounted to approximately S$26.93 million, representing 53.1%
of our total assets and comprised the following:
(i)
inventories of approximately S$16.35 million, representing 60.7% of our current assets, which
comprised new and pre-owned automobiles, automobile parts and accessories and watches;
(ii)
trade and other receivables of approximately S$3.72 million, representing 13.8% of our current
assets, which comprised mainly trade receivables of S$1.11 million, and other receivables of
S$2.61 million from EC and PT EuroSport relating to funding support to EC and PT EuroSport in
respect of orders of Lamborghini automobiles placed by EC and PT EuroSport (please refer to the
section entitled “Interested Person Transactions” of this Offer Document for further details on the
aforesaid funding support arrangements);
(iii)
other current assets of approximately S$2.77 million, representing 10.3% of our current assets,
which comprised mainly prepayments of S$0.14 million relating mainly to insurance, license fees
and road tax, deposit payment of €1.20 million (equivalent to approximately S$1.90 million) paid
to GTA Spain for orders of five (5) GTA automobiles, deposit payment of S$0.43 million paid to
Touring Superleggera for order of one (1) automobile and deposit payment of S$0.21 million paid
to the shareholders of E’ Collezione pursuant to a call option agreement with the shareholders
of E’ Collezione (please refer to the section entitled “Interested Person Transactions” of this Offer
Document for further details on the aforesaid call option agreement); and
(iv)
cash and cash equivalents of approximately S$4.09 million, representing 15.2% of our current
assets.
69
As at 30 June 2013, our non-current liabilities amounted to approximately S$15.16 million, representing
(i)
other financial liabilities of approximately S$13.93 million, representing 91.9% of our non-current
liabilities, which comprised bank borrowings of S$11.57 million and finance lease payables of
S$2.36 million; and
(ii)
other non-current liabilities of approximately S$1.23 million, representing 8.1% of our non-current
liabilities, which comprised the non-current portion of the deferred income relating to the additions
to our premises at 30 Teban Gardens Crescent.
Current Liabilities
As at 30 June 2013, our current liabilities amounted to approximately S$24.53 million, representing
(i)
income tax payable of approximately S$1.83 million, representing 7.4% of our current liabilities;
(ii)
trade and other payables of approximately S$4.96 million, representing 20.3% of our current
liabilities, which comprised trade payables of S$1.99 million relating to purchase of new and preowned automobiles and watches, accrued liabilities of S$0.54 million relating mainly to accrued
employee benefits and accrued marketing expenses, dividend payable of S$0.13 million, amount
payable to a related party of S$1.09 million and other payables of S$1.21 million in respect of the
construction of an annex to our premises at 30 Teban Gardens Crescent;
(iii)
other finance liabilities of approximately S$13.30 million, representing 54.2% of our current
liabilities, which comprised bank overdrafts of S$1.96 million, bank borrowings of S$1.61 million,
finance lease payables of S$1.34 million and trust receipts and bills payables of S$8.39 million; and
(iv)
other current liabilities of approximately S$4.44 million, representing 18.1% of our current liabilities,
which comprised deposits received from customers of S$3.62 million, current portion of deferred
income of S$0.45 million relating to the additions to our premises at 30 Teban Gardens Crescent
and warranty provision of S$0.37 million.
Equity
As at 30 June 2013, our equity of approximately S$11.02 million comprised share capital and retained
earnings.
LIQUIDITY AND CAPITAL RESOURCES
We have financed our working capital, capital expenditure and other capital requirements through a
combination of funds generated from our operating activities, shareholders’ equity and bank borrowings.
With regard to our liquidity and capital resources, we would like to highlight the following:
(i)
in FY2013 and 1Q2014, our Group generated net cash from operating activities amounting to
approximately S$6.19 million and S$6.02 million respectively;
(ii)
as at 30 June 2013, we had net current assets amounting to approximately S$2.40 million with
cash and cash equivalents of S$4.09 million; and
(iii)
as at 30 June 2013, we had total working capital financing facilities (such as bank overdrafts and
trade finance facilities) amounting to approximately S$49.75 million, of which S$13.49 million had
been utilised.
Please refer to the section entitled “Capitalisation and Indebtedness” of this Offer Document for further
details of our cash and credit facilities as at the Latest Practicable Date.
70
Our Directors are of the reasonable opinion that, after taking into account the cash flows generated from
our operations, our available banking facilities and our existing cash and cash equivalents, the working
capital available to our Group as at the date of lodgement of this Offer Document is sufficient for our
present requirements and for at least twelve (12) months after the listing of our Company on Catalist.
The Sponsor is of the reasonable opinion that, having regard to the above, after having made due and
careful enquiry and after taking into account the cash flows generated from our Group’s operations, our
Group’s available banking facilities and our Group’s existing cash and cash equivalents, the working
capital available to our Group as at the date of lodgement of this Offer Document is sufficient for our
present requirements and for at least twelve (12) months after the listing of our Company on Catalist.
We set out below a summary of our Group’s combined statements of cash flows for FY2011, FY2012,
FY2013 and 1Q2014. The following summary of combined statements of cash flows should be read in
connection with the full text of this Offer Document, including the Audited Combined Financial Statements
and the Unaudited Interim Combined Financial Statements as set out in Appendices A and B to this Offer
Document respectively.
Audited
Net cash flows from operating activities
Net cash flows used in investing activities
Net cash flows (used in)/from financing activities
Net increase/(decrease) in cash and cash equivalents
FY2012
FY2013
1Q2014
S$’000
S$’000
S$’000
S$’000
7,883
5,977
Cash and cash equivalents at end of year/period
6,185
6,020
(16,213)
(1,735)
(278)
(474)
(6,811)
(6,450)
13,290
(6,194)
(947)
3,262
(1,909)
794
Cash and cash equivalents at beginning of year/period
Unaudited
FY2011
573
1,367
420
3,682
1,367
420
3,682
1,773
FY2011
In FY2011, we generated net cash flows of approximately S$4.72 million from operating activities before
changes in working capital.
Our net working capital inflow amounted to approximately S$3.42 million. The net working capital inflow
was mainly due to:
(i)
a decrease in inventories of S$3.15 million arising mainly from the delivery of two (2) units of the
limited edition Lamborghini Reventón Roadster to our customers; and
(ii)
a decrease in other assets of S$3.23 million which mainly consisted of a decrease in deposit
payments made to the Lamborghini Manufacturer due to the delivery of two (2) units of the limited
edition Lamborghini Reventón Roadster by the Lamborghini Manufacturer to us;
This was partially offset by:
(i)
an increase in trade and other receivables of S$1.53 million which mainly consisted of (a) an
increase in other receivables of S$0.61 million from EC and PT EuroSport as a result of the
increase in orders for Lamborghini automobiles placed by EC and PT EuroSport in FY2011, and
(b) an increase in the amount receivable from our Executive Directors of S$0.42 million;
(ii)
a decrease in other liabilities of S$0.61 million which mainly consisted of a decrease in deposits
received from customers due to the delivery of Lamborghini automobiles to customers; and
(iii)
a decrease in trade and other payables of S$0.83 million arising from the repayment of amounts
due to the Executive Directors relating to director fees.
In FY2011, we paid income tax of approximately S$0.25 million.
Overall, our net cash flows from operating activities in FY2011 amounted to approximately S$7.88 million.
71
Net cash flows used in investing activities amounted to approximately S$0.28 million.
This was mainly due to purchase of property, plant and equipment of S$0.39 million relating to purchase
of motor vehicles and renovation of our showroom at 30 Teban Gardens Crescent, partially offset by
disposal of property, plant and equipment of S$0.10 million.
Net cash flows used in financing activities
Net cash flows used in financing activities amounted to approximately S$6.81 million.
This was mainly due to:
(i)
repayment of bank borrowings of approximately S$4.90 million;
(ii)
repayment of obligations under finance leases of approximately S$1.17 million; and
(iii)
payment of interests charged on bank borrowings of approximately S$0.74 million.
FY2012
Our net working capital outflow amounted to approximately S$4.22 million. The net working capital
outflow was mainly due to:
(i)
an increase in trade and other receivables of S$9.74 million arising mainly from the sales of 11
pre-owned automobiles to Motor-Way Credit and sales of three (3) pre-owned automobiles to
individuals in March 2012;
(ii)
received from customers following the delivery of Lamborghini automobiles to our customers; and
(iii)
an increase in trade and other payables of S$0.20 million.
This was partially offset by a decrease in inventories of S$7.57 million mainly due to increase in sales of
pre-owned automobiles, arising from clearance of inventory of pre-owned automobiles brought forward
from FY2011 and trade-in automobiles in FY2012.
This was mainly due to purchase of motor vehicles, tools and equipment and renovation of showroom
and service centre at 30 Teban Gardens Crescent of S$0.63 million, partially offset by proceeds of
S$0.06 million from disposal of motor vehicles and interest income received of S$0.10 million.
72
(i)
payment of dividends amounting to S$4.88 million to the then shareholders of EuroSports Auto;
(ii)
(iii)
This was partially offset by increase in bank borrowings of S$1.55 million for working capital purposes.
FY2013
Our net working capital outflow amounted to approximately S$2.37 million. The net working capital
outflow was mainly due to:
(i)
an increase in inventories (excluding inventories of S$2.87 million which were financed under
finance lease arrangements) of S$3.42 million, relating mainly to (a) pre-owned automobiles, and
(b) watches as we embarked on the luxury watch distribution and retail business;
(ii)
an increase in other assets of S$2.31 million which arise mainly from the deposits paid to the
Pagani Manufacturer and GTA Spain;
(iii)
(iv)
a decrease in trade and other payables of S$1.32 million which mainly consisted of (a) a decrease
in trade payables of S$0.26 million mainly due to absence of GST payable in FY2013 as there
was a net GST receivable arising from the acquisition of premises at 7 and 9 Chang Charn Road,
and (b) repayment of amount due to a tenant of S$1 million relating to the construction costs of
additions to our premises at 30 Teban Gardens Crescent in FY2012 which our Group agreed to
reimburse the tenant an amount of S$1 million, with the tenant incurring the remaining cost of
construction.
This was partially offset by a decrease in trade and other receivables of S$8.70 million which consisted
of (a) a decrease in trade receivables of S$8.08 million due to repayment from Motor-Way Credit and
an individual customer relating to sale of pre-owned automobiles, (b) a decrease in other receivables of
S$1.31 million, and (c) net GST receivable of S$0.69 million arising from the acquisition of premises at 7
and 9 Chang Charn Road.
This was mainly due to (i) acquisition of premises at 7 and 9 Chang Charn Road of approximately
S$15.77 million; (ii) construction of an annex to our premises at 30 Teban Gardens Crescent of
approximately S$0.53 million; (iii) purchase of a motor vehicle of S$0.22 million; and (iv) renovations of
S$0.22 million. This was partially offset by proceeds from disposal of motor vehicles of S$0.55 million.
73
Net cash flows from financing activities
Net cash flows from financing activities amounted to approximately S$13.29 million.
(i)
an increase in other financial liabilities of approximately S$5.31 million arising mainly from an
increase in utilisation of trust receipts and bills payables to fund the purchase of new automobiles
and watches; and
(ii)
new bank borrowings of approximately S$14.16 million, out of which S$12.16 million was for the
purpose of financing the acquisition of premises at 7 and 9 Chang Charn Road and S$2 million
was for working capital purposes.
(i)
repayment of obligations under finance leases of approximately S$2.86 million;
(ii)
payment of interim dividends amounting to S$2.50 million to then shareholders of EuroSports Auto;
and
(iii)
1Q2014
In 1Q2014, we generated net cash flows of approximately S$3.09 million from operating activities before
Our net working capital inflow amounted to approximately S$3.20 million. The net working capital inflow
was mainly due to:
(i)
a decrease in inventories (excluding inventories of S$2.50 million which were financed under
finance lease arrangements) of S$3.11 million;
(ii)
a decrease in trade and other receivables of S$2.64 million which mainly consisted of (a) a
decrease in other receivables of S$2.26 million due to repayment by EC and PT EuroSport in
respect of orders for Lamborghini automobiles placed by EC and PT EuroSport, and (b) a refund of
GST of S$0.69 million; and
(iii)
a decrease in other assets of S$0.22 million which mainly consisted of (a) a decrease in deposits
of S$0.08 million paid to automobile manufacturers, and (b) the recognition of deferred expenses of
approximately S$0.13 million relating to listing expenses.
(i)
(ii)
a decrease in trade and other payables of S$1.47 million mainly due to a decrease in purchases of
new automobiles and automobile parts and accessories.
In 1Q2014, we paid income tax of approximately S$0.28 million.
Overall, our net cash flows from operating activities in 1Q2014 amounted to approximately S$6.02 million.
74
This was mainly due to purchase of motor vehicles of approximately S$0.74 million and associated
costs relating to the construction of an annex to our premises at 30 Teban Gardens Crescent and the
acquisition of premises at 7 and 9 Chang Charn Road of approximately S$0.97 million.
(i)
net repayment of trust receipts, bills payable and bank borrowings of approximately S$5.52 million;
(ii)
(iii)
CAPITAL EXPENDITURES AND DIVESTMENTS
The material capital expenditures and divestments of our Group for the Period under Review and from 1
July 2013 to Latest Practicable Date were as follows:
FY2011
FY2012
FY2013
1Q2014
From 1
July 2013
to Latest
Practicable
Date
S$’000
S$’000
S$’000
S$’000
S$’000
Capital Expenditures
Construction in Progress(1)
Leasehold Property and Improvements
Motor Vehicles(3)
Renovation(4)
(5)
(2)
–
–
16,297
969
637
–
4,050
–
–
–
527
772
891
944
253
262
286
221
9
55
Plant and Equipment
121
345
99
14
245
Total Capital Expenditures
910
5,453
17,508
1,936
1,190
101
12
469
–
2
Renovations
–
–
190
–
–
Plant and Equipment
–
–
4
–
–
101
12
663
–
2
Divestments
Motor Vehicles(6)
(7)
Total Divestments
Notes:
(1)
This relates mainly to the acquisition of the premises at 7 and 9 Chang Charn Road and the construction of an annex to our
premises at 30 Teban Gardens Crescent.
(2)
This relates to the additions by the tenant to our premises at 30 Teban Gardens Crescent in FY2012. The additions include
the extension of an additional third storey comprising an automobile service centre and an ancillary office to an existing
second storey detached factory.
(3)
This relates to new motor vehicles acquired for leasing purposes and/or general use by our Group during the Period under
Review and from 1 July 2013 to the Latest Practicable Date.
(4)
This relates to the renovation of our showroom and service centre at 30 Teban Gardens Crescent during the Period under
Review and from 1 July 2013 to the Latest Practicable Date.
(5)
This relates to purchase of tools and equipment used in the service centre at 30 Teban Gardens Crescent, and computer
equipment during the Period under Review and from 1 July 2013 to the Latest Practicable Date.
75
(6)
This relates to the net book value of motor vehicles sold during the Period under Review and from 1 July 2013 to the Latest
Practicable Date. The motor vehicles were previously used by our Group.
(7)
This relates to the net book value of renovations at 11 Leng Kee Road written off during the Period under Review.
Capital Commitments
Our Group did not have any material commitment for capital expenditures as of the Latest Practicable
Date.
OPERATING LEASE COMMITMENTS
Our operating lease commitments are in respect of our Group’s land rental. Our operating lease
commitments as at the Latest Practicable Date are as follows:
As at Latest
Practicable Date
S$’000
Not later than one (1) year
306
Later than one (1) year and not later than five (5) years
766
Later than five (5) years
–
1,072
Please refer to the section entitled “General Information on our Group – Properties and Fixed Assets” of
this Offer Document for further details on our operating lease commitments in respect of our operating
leases for premises.
Our Group expects to meet our operating lease commitments through our existing working capital.
FOREIGN EXCHANGE EXPOSURE
Our reporting currency is S$. Our sales are largely denominated and transacted in S$, while our
purchases are largely denominated and transacted in S$, €, £ and CHF. For FY2011, FY2012, FY2013
and 1Q2014, the percentage of purchases denominated in the various currencies are set out below:
FY2011
FY2012
FY2013
1Q2014
% of purchases denominated in
S$
49.5
66.4
€
48.6
£
1.9
CHF
86.9
76.4
32.1
8.4
19.7
1.5
1.9
–
–
–
2.8
3.9
100.0
100.0
100.0
100.0
To the extent that our Group’s sales and purchases are not naturally matched in the same currency (for
instance, due to change in billing currency by suppliers) and to the extent that there are timing differences
between invoicing and the payment to suppliers, we will be exposed to foreign currency exchange gains
or losses arising from transactions in currencies other than our reporting currency. Please refer to the
section entitled “Risk Factors – We are exposed to risks arising from foreign exchange fluctuations” of this
Offer Document for more details.
We did not have a hedging policy prior to August 2012. We have since implemented a hedging policy
with respect to foreign currency exposure. When certain thresholds are triggered, the CFO will discuss
with the Executive Directors the need to hedge the transactions using forward contracts on an individual
transaction basis.
76
Prior to entering into any hedging transactions, we will seek the approval of our Board on the policy for
entering into any such foreign exchange hedging transactions and put in place adequate procedures
which will be reviewed and approved by our Audit Committee. Our Audit Committee will monitor the
implementation of the policy, including reviewing the instruments, processes and practices in accordance
with the policy approved by our Board.
Our net foreign exchange losses/(gains) in FY2011, FY2012, FY2013 and 1Q2014 are as follows:
FY2011
FY2012
FY2013
1Q2014
Net foreign exchange losses/(gains) (in S$’000)
(87)
117
205
16
As a percentage of revenue (%)
(0.1)
0.1
0.2
0.1
As a percentage of profit before tax (%)
(2.7)
1.3
2.5
0.6
SEASONALITY
We generally do not experience any significant seasonality patterns in our sale of automobiles during the
course of any particular year. However, sales of automobiles will fluctuate depending on the stage of the
life cycle of a particular automobile model. Sale of a particular automobile model will typically be higher
when it is newly launched and will decline towards the end of its life cycle.
INFLATION
During the Period under Review, inflation did not have a material impact on the performance of our
Group.
CHANGES TO ACCOUNTING POLICIES
There have been no changes in our accounting policies for the Period under Review. Please refer to
the section entitled “Summary of Significant Accounting Policies” in the Audited Combined Financial
Statements and the Unaudited Interim Combined Financial Statements as set out in Appendices A and B
of this Offer Document respectively for details on our Group’s accounting policies.
77
CAPITALISATION AND INDEBTEDNESS
The following information should be read in conjunction with the Audited Combined Financial Statements,
the Unaudited Interim Combined Financial Statements and the Unaudited Pro Forma Combined Financial
Information as set out in Appendices A, B and C of this Offer Document respectively and the section
entitled “Management’s Discussion and Analysis of Financial Position and Results of Operations” of this
Offer Document.
The following table shows our cash and cash equivalents as well as capitalisation and indebtedness of
our Group as at 31 October 2013:
(i)
based on our unaudited combined financial statements as at 30 June 2013;
(ii)
based on our unaudited combined financial statements as at 31 October 2013; and
(iii)
based on our unaudited combined financial statements as at 31 October 2013, and as adjusted
for the Restructuring Exercise and the net proceeds from the issue of the New Shares (“As
Adjusted”).
As at 30 June 2013
Unaudited
S$’000
As at 31 October 2013
Unaudited
S$’000
As Adjusted
S$’000
4,094
1,287
9,748
13,296
16,949
16,949
- secured and guaranteed
13,925
13,212
13,212
Total Indebtedness
27,221
30,161
30,161
Total Shareholders’ Equity
11,016
10,461
18,922
Total Capitalisation and Indebtedness
38,237
40,622
49,083
Indebtedness
Current
- secured and guaranteed
Non-current
Save as disclosed in the section entitled “Share Capital” of this Offer Document, since 1 July 2013
and up to the Latest Practicable Date, there were no material changes in our total capitalisation and
indebtedness except for changes in our retained earnings arising from day-to-day operations in the
ordinary course of our business.
Cash and cash equivalents
As at 31 October 2013, we had cash and cash equivalents of approximately S$1.29 million, which are
placed with financial institutions.
Indebtedness
As at 31 October 2013, we had total indebtedness of approximately S$30.16 million, comprising a term
loan and bank facilities of approximately S$15.23 million, a commercial property loan of approximately
S$11.67 million and finance leases of approximately S$3.26 million.
Term loans
As at 31 October 2013, we had an outstanding term loan and bank facilities of approximately S$15.23
million, of which S$1 million is secured by, inter alia, a legal mortgage over our Group’s leasehold land
and buildings at 30 Teban Gardens Crescent and by joint and several personal guarantees of Melvin Goh
and Andy Goh, and of which S$14.23 million are secured by, inter alia, charges and assignments over
inventories and other assets of our Group, and by joint and several personal guarantees of Melvin Goh
and Andy Goh.
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Commercial property loan
As at 31 October 2013, we had an outstanding commercial property loan of approximately S$11.67
million which is secured by, inter alia, a legal mortgage over our Group’s leasehold land and buildings at
7 and 9 Chang Charn Road and by joint and several personal guarantees of Melvin Goh and Andy Goh.
Finance leases
Our finance leases relate to automobiles purchased under hire purchase financing. As at 31 October
2013, we had outstanding finance leases of approximately S$3.26 million which are secured by, inter alia,
charges over the leased assets and by joint and several personal guarantees of Melvin Goh and Andy
Goh.
For further details of the guarantees provided by Melvin Goh and Andy Goh, please refer to the section
entitled “Interested Person Transactions” of this Offer Document.
Upon the listing of our Company on the Catalist, we intend to request for a release and discharge of
the personal guarantees provided by Melvin Goh and Andy Goh to the respective financial institutions
and replace them with corporate guarantees provided by our Group. Our Directors do not expect any
material change in the terms and conditions of the relevant credit facilities arising from the discharge of
the personal guarantees. Should any of the financial institutions disagree with the release and we fail to
secure alternative facilities on terms similar to those applicable to our existing facilities, Melvin Goh and
Andy Goh have undertaken to continue the provision of personal guarantees.
Cash and Credit Facilities
As at the Latest Practicable Date, our total credit facilities for working capital purposes (utilised and
unutilised) were as follows:
Amount of
facilities
granted
(S$’000)
Type of facility
Overdraft(1)
(2)
Trade Financing
Amount
utilised
(S$’000)
Amount
unutilised
Interest
rates
2,000
829
1,171
5.0%
Maturity
profile
Revolving
44,500
11,773
32,727
3.0% – 7.3%
Short Term Loan(3)
2,000
2,000
–
2.32%
Non-revolving
Performance Guarantee(4)
1,250
1,180
70
–
Annual renewal
49,750
15,782
33,968
Total
Up to 180 days
Notes:
1.
The overdraft facilities were granted to our Group by OCBC.
2.
The trade financing facilities granted to our Group comprised S$20 million from UOB, S$4 million from The Bank of East Asia,
S$5 million from OCBC, S$10 million from Malayan Banking Berhad and S$5.50 million from Hong Leong Finance Limited.
3.
The short term loan was granted to our Group by OCBC.
4.
The performance guarantee was granted to our Group by UOB.
As at the Latest Practicable Date, we had cash and cash equivalents of S$1.95 million, which are placed
with financial institutions.
As at the Latest Practicable Date, our Group is not in breach of any of the terms or conditions or
covenants associated with any credit arrangement or bank loan which could materially affect our Group’s
financial position or results of operations, or the investments by Shareholders in our Company.
Certain of our credit facilities as described in this section contain provisions which place restrictions on
any change in shareholders or change in control of our Group. As at the date of this Offer Document, our
Group has, in anticipation of the Invitation, obtained letters of waiver in relation to such provisions from
the financial institutions which have provided such facilities.
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Contingent Liabilities
As at the Latest Practicable Date, we have contingent liabilities arising from banker’s and/or performance
guarantees in favour of suppliers amounting to approximately S$1.18 million.
Save as disclosed in this Offer Document, our Group has no other borrowings or indebtedness (direct or
indirect) or liabilities (including contingent liabilities) as at the Latest Practicable Date.
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GENERAL INFORMATION ON OUR GROUP
HISTORY AND DEVELOPMENT
Our Company was incorporated in the Republic of Singapore on 12 December 2012 under the
Companies Act as a private limited company, under the name of “EuroSports Global Pte. Ltd.”. Pursuant
to the Restructuring Exercise our Company became the holding company of our subsidiaries, namely
EuroSports Auto, EuroAutomobile, GTA Singapore and deLaCour Singapore. On 5 December 2013,
our Company was converted into a public company limited by shares and we changed our name to
“EuroSports Global Limited”. Please refer to the section entitled “Restructuring Exercise” of this Offer
Our Group’s history can be traced back to 1998 when our subsidiary, EuroSports Auto, was founded
by our co-founders, Melvin Goh, Andy Goh, and their late father, Goh Lue Tee. EuroSports Auto was
established to engage in the business of automobile distribution in Singapore, with a focus on the sale of
new ultra-luxury automobiles and luxury automobiles.
Prior to the establishment of EuroSports Auto, Melvin Goh and Andy Goh were already involved in the
automobile industry, working as the managing director and executive director respectively in Gay Hin
Enterprise, a family-owned business founded by Goh Lue Tee, which was engaged in the business of
pre-owned automobile distribution. As the business of EuroSports Auto grew, Melvin Goh and Andy
Goh, who were running Gay Hin Enterprise, switched their focus to the sale of new automobiles instead
of pre-owned automobiles. Since then, the business operations of Gay Hin Enterprise were gradually
reduced over the years. Gay Hin Enterprise is presently dormant, and Melvin Goh and Andy Goh are in
the process of procuring the shareholders’ consent to liquidate Gay Hin Enterprise.
Having identified the growth potential of the ultra-luxury automobile and luxury automobile market in
Singapore, our co-founders, Melvin Goh and Andy Goh, have been focusing on securing distributorships
and dealerships for ultra-luxury automobiles and luxury automobiles since the establishment of
EuroSports Auto in 1998, when we started distributing Lotus automobiles.
The key milestones in the development of our Group are highlighted chronologically below:
Year
Event
1998
EuroSports Auto was incorporated and we started distributing Lotus automobiles.
1999
We launched the Lotus showroom and service centre.
2001
We started distributing Lamborghini automobiles.
In the same year, we launched our Lamborghini showroom and service centre.
2002
We entered into the Lamborghini Agreement with the Lamborghini Manufacturer to formalise the
Lamborghini dealership, details of which are set out in the section entitled “General Information
on our Group – Our Distributorship and Dealership Arrangements” of this Offer Document.
We established Massa Auto (S) Pte. Ltd., now known as EuroAutomobile (following a change of
name on 2 March 2004) for the purpose of securing the Alfa Romeo distributorship.
2003
We acquired the premises at 30 Teban Gardens Crescent from the landlord from whom we
had previously been leasing the premises for a purchase consideration of S$3 million and
established our Teban Gardens Showrooms and Service Centres. Henceforth, we have been
operating in our Teban Gardens Showrooms and Service Centres.
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Year
Event
2004
We secured the Alfa Romeo distributorship (details of which are set out in the section entitled
“General Information on our Group – Our Distributorship and Dealership Arrangements” of this
Offer Document) and we launched our Alfa Romeo showroom and service centre.
We expanded and refurbished our Lamborghini showroom and service centre in anticipation of
a growth in sales of Lamborghini automobiles.
2005
In recognition of our achievement and performance, we were awarded the “Certificate of
Achievement for the 2005 Results Obtained in Sales and Service” by the Lamborghini
Manufacturer.
2007
We celebrated the delivery of our 100th Lamborghini automobile in Singapore.
2008
We entered into the Lotus Agreement with the Lotus Manufacturer to formalise the Lotus
dealership.
In recognition of our achievement and performance, we were awarded the “Best Sales
Performance 2008” by the Lamborghini Manufacturer.
2011
We marked the 10th anniversary of our Lamborghini dealership.
2012
We secured the exclusive dealership in Singapore and Malaysia for Pagani automobiles,
details of which are set out in the section entitled “General Information on our Group – Our
Distributorship and Dealership Arrangements” of this Offer Document.
We secured the exclusive distributorship in Singapore, Malaysia, Brunei and Indonesia and nonexclusive distributorship in PRC for ultra-luxury automobiles supplied by Touring Superleggera.
Please refer to the section entitled “General Information on our Group – Our Distributorship and
Dealership Arrangements” of this Offer Document for further details.
We entered into a heads of agreement with GTA Spain for, inter alia, the distributorship for the
GTA brand of automobiles in the designated markets of the Asia Pacific region. Please refer to
the section entitled “General Information on our Group – Our Distributorship and Dealership
Arrangements” of this Offer Document for further details.
We secured the exclusive distributorship in Singapore, Malaysia, Indonesia, Thailand and
Brunei for luxury watches, jewellery and accessories of the deLaCour brand. Please refer to the
section entitled “General Information on our Group – Business Strategies and Future Plans –
Diversification into other luxury lifestyle businesses” of this Offer Document for further details.
We entered into the Sale and Leaseback Arrangement. Please refer to the section entitled
“Risk Factors – Risks relating to the Teban Gardens Lease Extension and the Sale and
Leaseback Arrangement” of this Offer Document and the section entitled “General Information
on our Group – Properties and Fixed Assets – Sale and Leaseback Arrangement” of this Offer
We acquired the premises located at 7 and 9 Chang Charn Road.
The Lotus Agreement had expired as of 31 March 2013 and was not renewed by the parties. The parties
have agreed to cease the Group’s distribution of Lotus automobiles in Singapore.
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BUSINESS OVERVIEW
Our revenue was substantially derived from our sale of new and pre-owned automobiles, which
accounted for approximately 95.4%, 95.7%, 91.0%, 94.7% and 88.7% of our total revenue for FY2011,
FY2012, FY2013, 1Q2013 and 1Q2014 respectively. Revenue from the provision of after-sales services
accounted for approximately 4.6%, 4.3%, 6.4%, 5.3% and 7.9% of our total revenue in FY2011,
FY2012, FY2013, 1Q2013 and 1Q2014 respectively. Revenue from our sale of watches accounted
for approximately 2.6% and 3.4% of our total revenue for FY2013 and 1Q2014. Revenue from our
automobile leasing business has not been significant for the Period under Review.
A.
Sale of New Automobiles
As at the Latest Practicable Date, we have entered into distributorship and/or dealership
agreements with the Lamborghini Manufacturer, Pagani Manufacturer, Alfa Romeo Manufacturer
and Touring Superleggera.
As at the Latest Practicable Date, we offer the following automobile models for sale:
Ultra-luxury automobiles
Brand
Automobile models offered
Lamborghini
Gallardo LP 560-4
Gallardo LP 560-4 Spyder
Gallardo LP 570-4 Superleggera
Aventador LP 700-4
Aventador LP 700-4 Roadster
Aventador LP 720-4
Aventador LP 720-4 Roadster
Pagani
Huayra
Touring Superleggera
Disco Volante 2012
Luxury automobiles
Brand
Automobile models offered
Alfa Romeo
Giulietta
Mito
Our customers place orders for new automobiles by signing a standard sale agreement with us.
The standard terms include provisions on the quoted price, registration fee, COE, road tax, GST,
custom duty, excise or other applicable taxes or levies. We are entitled to vary the quoted price
for the automobile in accordance with market conditions, such as any changes in prices of COE.
The standard terms also include provisions relating to full payment and delivery. We are entitled
to withhold registration and the delivery of the automobile until full payment has been made. We
are entitled to forfeit any money received from the customer or deal with the automobile in such
manner as we think fit under certain circumstances, such as the customer’s failure to make full
payment to us by the stipulated date.
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The key driver of our business since inception has been the sale of new Lamborghini automobiles.
Revenue from our sales of new Lamborghini automobiles accounted for approximately 54.5%,
51.6%, 58.9% and 51.7% of our total revenue for FY2011, FY2012, FY2013 and 1Q2014
respectively.
B.
Sale of Pre-Owned Automobiles
We generally offer a trade-in service for pre-owned automobiles mainly to facilitate our sales of
new automobiles. Customers often approach us to trade-in their pre-owned automobiles while
purchasing our new automobiles. However, we may also purchase pre-owned automobiles from
individuals who do not purchase our automobiles on a case by case basis.
We on-sell these pre-owned automobiles to individuals, traders and exporters. During the Period
under Review, revenue from our sales of pre-owned automobiles accounted for approximately
28.8%, 36.3%, 23.1% and 23.3% of our total revenue respectively.
C.
Provision of After-Sales Services
The after-sales services offered to our customers include mainly maintenance and repair services
and breakdown assistance services. Our customers for our after-sales services are mainly
customers who have purchased our new automobiles as well as pre-owned automobiles.
We are the only authorised service centre in Singapore for all the automobile brands we carry.
For instance, our factory-authorised service centres are manned by a team of technicians,
mechanics and service advisers, who have been trained, directly and indirectly, by the automobile
manufacturers.
(a)
Maintenance and grooming services
We provide regular scheduled maintenance services and routine inspections for our new
automobiles based on the mileage and age of the automobiles. These schedules are
typically recommended by the relevant automobile manufacturers. The maintenance services
generally include oil changes, replacement of spark plugs and air filters and wheel alignment.
In addition, we offer automobile grooming services, such as waxing and polishing, interior
cleaning and leather treatment.
(b)
Repair services
We provide repair services for automobiles which are under warranty or otherwise. Our
repair services typically include repair of manufacturer’s defects, replacement of parts due to
wear and tear, or repair of damage resulting from collisions or other automobile accidents.
Warranties for Alfa Romeo automobiles are provided by us, whereas for other automobiles,
warranties are provided by the respective automobile manufacturers. The warranty for our
new automobiles is typically between 24 and 36 months, commencing from the date the
automobile is registered. We may also provide a limited warranty for pre-owned automobiles
on a case by case basis, depending on factors such as the selling price and condition of a
pre-owned automobile.
For automobile with an existing manufacturer’s warranty, we are able to make a claim against
the relevant automobile manufacturer for repairing the automobile. The repair works consist
of claimable and non-claimable works. For claimable works, our Group can do the repairs
and subsequently claim the cost of repairs from the relevant automobile manufacturer.
For non-claimable works, our customers will have to bear the cost of repairs and these
works typically consist of wear and tear as well as damage caused by the customers.
For automobile with an expired manufacturer’s warranty, we will charge a fee for services
rendered by us in respect of the repair services. Our repair services are typically charged
based on the labour time and cost of parts incurred.
84
Automobile manufacturers may recall their automobiles from time to time to remedy certain
problems or product defects. Please refer to the section entitled “Risk Factors – Product
defects and automobiles recalls could have an adverse effect on our business” of this Offer
Document for further details. Nevertheless, we are generally not liable for any costs of such
recalls and are typically compensated by the automobile manufacturers for the assistance
rendered by us in conducting the recalls.
In addition, following the introduction of Lemon Laws, which came into effect on 1
September 2012, we are required to repair or replace a defective automobile and, if repair or
replacement is not possible or reasonable, our customers may request for a price reduction
or return the defective automobile for a refund. Please refer to the sections entitled “Risk
Factors – We are subject to compliance with and changes in laws and regulations” and
“Government Regulations” of this Offer Document for further details. Nevertheless, we are
generally compensated by the automobile manufacturers for costs and expenses relating to
any such repair, replacement, price reduction or refund under the automobile manufacturers’
warranty.
(c)
24-hour breakdown assistance services
We also provide a 24-hour breakdown assistance services to our customers, in particular onsite assistance and, if required, arrange for automobile towing service.
(d)
Automobile parts and accessories and related merchandise
We retail automobile parts and accessories, such as body components, under-carriage
components, engine parts and batteries, to our customers. In addition, we retail merchandise
that features the automobile brands that we carry. Such merchandise includes a wide
selection of apparel and accessories.
OUR DISTRIBUTORSHIP AND DEALERSHIP ARRANGEMENTS
A.
Lamborghini Dealership
The Lamborghini Manufacturer, Automobili Lamborghini S.p.A., is a company incorporated in Italy
engaged in, inter alia, the manufacture and sale of Lamborghini automobiles.
Our Group, through EuroSports Auto, had on 2 October 2002 entered into the Lamborghini
Agreement (which took effect as of 1 January 2002) with the Lamborghini Manufacturer, pursuant
to which the Lamborghini Manufacturer had granted EuroSports Auto, inter alia, the right to import
Lamborghini automobiles into Singapore and to market and sell such automobiles to end-users in
Singapore. As at the Latest Practicable Date, we are the only authorised dealer for Lamborghini
automobiles in Singapore.
B.
Pagani Dealership
The Pagani Manufacturer, Pagani Automobili S.p.A., is a company incorporated in Italy engaged in,
inter alia, the manufacture and sale of Pagani automobiles.
Our Group, through EuroAutomobile, had on 7 March 2012 entered into the Pagani Agreement
with the Pagani Manufacturer, pursuant to which the Pagani Manufacturer, inter alia, appointed
EuroAutomobile as a sole and exclusive authorised dealer in Singapore and Malaysia for Pagani
automobiles.
C.
Alfa Romeo Distributorship
The Alfa Romeo Manufacturer, Fiat Auto S.p.A., is a company incorporated in Italy engaged in,
inter alia, the manufacture and sale of Alfa Romeo automobiles.
Our Group, through EuroAutomobile, had on 2 February 2004 entered into the Alfa Romeo
Agreement with the Alfa Romeo Manufacturer, pursuant to which the Alfa Romeo Manufacturer,
inter alia, appointed EuroAutomobile as an exclusive importer and distributor of Alfa Romeo
automobiles in Singapore.
85
D.
Touring Superleggera Distributorship
Touring Superleggera is an Italian coach builder that supplies mainly customised ultra-luxury
automobiles and luxury automobiles, including Bentley Continental Flying Star, Disco Volante 2012,
Bellagio and A8GCS Berlinetta.
On 3 October 2012, our Group, through EuroSports Auto, had entered into an agreement with
Touring Superleggera to secure the exclusive distributorship in Singapore, Malaysia, Brunei and
Indonesia and non-exclusive distributorship in PRC for its ultra-luxury and luxury automobiles.
E.
New Automobile Distributorship with GTA Spain
Our Group, through EuroAutomobile, had on 22 September 2012 entered into a heads of
agreement with GTA Spain, a Spanish automobile manufacturer, which is engaged in, inter alia, the
manufacture and sale of GTA automobiles, including GTA Spano.
Subject to, inter alia, the fulfilment of certain conditions in the heads of agreement, including the
entry into definitive transaction documents by the parties:
(a)
We will be granted exclusive rights to distribute GTA automobiles in the Asia Pacific region.
In this regard, GTA Singapore was established on 10 October 2012, for the purposes of
holding the distributorship rights for GTA automobiles in the designated territories, mainly in
the Asia Pacific region;
(b)
We will purchase up to eight (8) units of GTA Spano from GTA Spain. As at the Latest
Practicable Date, we have made a deposit payment of €1.20 million (equivalent to
approximately S$1.90 million) to GTA Spain for five (5) units of GTA Spano; and
(c)
We have the option of subscribing for such number of shares in GTA Spain, representing
13.4% of the issued share capital of GTA Spain as at the date of exercise of such option
at a subscription consideration of €2 million (equivalent to approximately S$3.20 million),
during the period commencing on the date of the definitive agreement to be entered into and
ending on 31 December 2015.
Our Executive Directors, namely Melvin Goh and Andy Goh, had on 18 November 2013 executed
a deed of indemnity in favour of our Group, pursuant to which Melvin Goh and Andy Goh have
undertaken, inter alia, that they will pay to our Group, on a joint and several basis, all deposits
and monies paid by our Group to GTA Spain in connection with the GTA automobiles remaining
undelivered, in the event of the following:
(i)
GTA Spain failing to deliver the ordered GTA automobiles by 31 March 2015 and failing to
refund the deposits and all monies paid by our Group to GTA Spain in connection therewith,
in full, to the Group; or
(ii)
the winding up, dissolution, insolvency, bankruptcy or judicial management of GTA Spain or
any equivalent or analogous proceedings under any applicable law of jurisdiction,
whichever is earlier.
F.
Salient Terms of our Distributorship and Dealership Agreements
Our distributorship and/or dealership agreements typically contain the following key provisions:

We are required to comply with the minimum annual purchases and sales targets, which
are typically determined before the start of the following year based on the discussions and
negotiations between us and automobile manufacturers as well as the prevailing economic
conditions.

We are required to ensure that our after-sales services are carried out in accordance with
the guidelines provided by automobile manufacturers in terms of, inter alia, tools, service
centre facilities and equipment and staff training.
86

We are required to provide repair services to our customers in respect of the new
automobiles, which are covered by the warranties provided by the automobile manufacturers.
These services are required to be carried out in accordance with automobile manufacturers’
warranty policies and procedures.

In respect of marketing and sales activities, we are generally required to allocate an
annual budget for promotional purposes, which has to be agreed between automobile
manufacturers and us.

We are entitled to use the names and trademarks of automobile manufacturers in a manner
consistent with the standards set by them for the purpose of promoting our automobiles.

We are required to equip and maintain our showrooms and service centres in a manner
such that their sizes, fittings and furnishings and external appearance are of a standard
meeting the requirements set by automobile manufacturers.

We are entitled to fix the retail prices for our new automobiles, by reference to the
recommended retail prices determined by automobile manufacturers. However, we generally
discuss with automobile manufacturers prior to fixing the actual retail prices for our new
automobiles.

The payment terms vary under each of our distributorship and/or dealership agreements. For
instance, some agreements require us to pay a specified non-refundable prepayment at the
time of placing a purchase order, while others do not require us to make any prepayment
and require full payment only upon delivery.

Title to the ordered automobiles generally passes to us only upon full payment of the
purchase price.

Our distributorship and/or dealership agreements are either for an indefinite period or a
fixed period of time and are typically automatically renewed. Our distributorship and/or
dealership agreements typically allow either party to terminate the agreement by giving prior
written notice of between six (6) to 12 months. For instance, the Lamborghini Agreement
is valid indefinitely until either party terminates it by giving prior written notice of at least
12 months. However, automobile manufacturers are entitled to terminate their distributorship
or dealership agreement with immediate effect upon notice under certain circumstances,
including insolvency and liquidation arrangements against us, criminal or administrative
investigations or proceedings concerning us, failure on our part to obtain any consent of the
automobile manufacturers when required and breach on our part of any material obligations
under the agreements.

Certain of our distributorship and/or dealership agreements contain provisions which place
restrictions on any change in shareholders or change in control of our Group.
As at the date of this Offer Document, our Group has, in anticipation of the Restructuring
Exercise and the Invitation, secured consents from the relevant manufacturers.
As at the Latest Practicable Date, our Group is not in breach of any terms or conditions or covenants of
the above distributorship and dealership agreements. To the best of their knowledge, our Directors are
not aware of any information or arrangements which would lead to a cessation or termination of any of
the above distributorship and dealership agreements or non-renewal of these agreements with any of the
automobile manufacturers.
87
OUR PROCUREMENT PROCESS
New Automobiles
We procure new automobiles from automobile manufacturers. The automobile manufacturers typically
set sales targets for new automobiles as part of their annual sales plan. These sales targets are typically
pre-determined before the start of the following year based on discussions and negotiations between
the parties and the prevailing economic conditions. These sales targets may change in the course
of the year due to changes in economic conditions. The purchase prices of our new automobiles are
typically negotiated between us and the automobile manufacturers and concluded based on their pricelists, market conditions and pricing competitiveness vis-a-vis other automobile brands in the same
market segment. During these discussions with the automobile manufacturers, we also decide upon the
appropriate automobile models which form part of the sales targets.
Pre-Owned Automobiles
We purchase pre-owned automobiles mainly from our customers who trade-in their pre-owned
automobiles when purchasing our new automobiles. We also purchase pre-owned automobiles on a case
by case basis. The purchase prices of the pre-owned automobiles are negotiated between us and the
sellers, and concluded based on the prevailing market price and demand.
Automobile Parts and Accessories and Related Merchandise
We typically procure our automobile parts and accessories and related merchandise from automobile
manufacturers. We will determine the type and quantum of such automobile parts and accessories and
related merchandise to procure based on our past experience. We typically conduct inventory planning
and purchasing on a monthly basis. The purchase prices of these automobile parts and accessories and
related merchandise are typically determined based on the automobile manufacturer’s price-list. The
automobile parts and accessories are typically utilised as part of our after-sales services.
QUALITY CONTROL
As part of our Group’s quality control measures, we will conduct inspections, checks, as well as test-drive
a new automobile prior to registration and delivery of the automobile. If the condition of the automobile
is found to be satisfactory, we will proceed to register and deliver the automobile. In the event of any
discrepancies in quality of the automobile or if the automobile does not conform to the requirements and
specifications in the delivery order, we will rectify such discrepancies to ensure that the automobile is
delivered to our customer in acceptable standards and conditions.
SALES AND MARKETING
As at the Latest Practicable Date, we have the following teams for our sales of automobiles. Sale of
Lamborghini automobiles and other ultra-luxury automobiles is led by our Executive Chairman and CEO,
Melvin Goh, with the assistance of our Director (Brand), Chong Khim Cheng, and three (3) customer
relation managers. Sale of Alfa Romeo automobiles is led by a general manager, who is supported by
one (1) sales manager and three (3) sales executives.
Our sales teams work closely with our marketing team, comprising our Director (Marketing &
Communications), Carolyn Ann Theng May Lin, one (1) marketing manager and one (1) marketing
executive.
We carry out the following sales and marketing initiatives:
Showrooms
We have dedicated showrooms where automobiles of the brands we carry are prominently displayed. Our
showrooms have been specially designed in accordance with the corporate identity requirements of the
relevant automobile manufacturers. We provide automobiles for test-drive at our showrooms. As at the
Latest Practicable Date, all of our showrooms are located at 30 Teban Gardens Crescent.
88
As at the Latest Practicable Date, we have constructed an annex to our premises at 30 Teban Gardens
Crescent, comprising an additional two storey showroom, display area and office, which has a total
gross floor area of 12,922.67 sq m. As at the date of this Offer Document, we have received the relevant
temporary occupation permit. Please refer to the section entitled “General Information on our Group
– Properties and Fixed Assets – Teban Gardens Lease Extension” for further details on the aforesaid
construction.
In addition, we have plans to construct new facilities, consisting of offices, showrooms, service
centres and automobile parts and accessories stores, at 7 and 9 Chang Charn Road. We expect to
commence the construction of the aforesaid facilities by 2015. Please refer to the section entitled
“General Information on our Group – Business Strategies and Future Plans – Construction of improved
or new facilities for our operations” of this Offer Document for further details. Following completion of
the construction of the new facilities, we will relocate our head office, showrooms, service centres and
automobile parts and accessories stores to 7 and 9 Chang Charn Road.
Customer Relationship Management (“CRM”)
Much of our Group’s success stems from our ability to build and maintain good relationships with our
customers. In line with our motto of ‘‘walk in as a customer, walk out as a friend’’, we also place great
emphasis on maintaining relationships with our customers.
We have put in place a CRM system, which enables us to monitor and gauge the level of interest at
marketing events and to better profile our customers’ needs and requirements. This enables us to tailor
and conduct the targeted marketing campaigns accordingly. For instance, the marketing campaigns
which we have organised for the Lamborghini owners include track days, drive-aways, annual gatherings
(typically during Lunar New Year, Christmas and Formula 1 race events), meetings with principals from
the Lamborghini Manufacturer, factory visits, car delivery celebrations, and production of CRM collaterals
(including personalised Lamborghini gifts such as cash cards, decals, birthday cakes and moon cakes).
We are constantly looking for various opportunities to create events and platforms for our CRM activities.
Our customer service capabilities are further enhanced through the use of our centralised database that
store our customers’ information, including the history of automobile purchases of our customers and the
maintenance and repair records of their automobiles.
We have participated in community projects and charity events, through donations and sponsorships,
as part of our marketing activities. Such community projects and charity events include the President’s
Challenge, KK Hospital Health Endowment, Yellow Ribbon Fund, Helping Hand Group, Children’s Aid
Society, The Straits Times School Pocket Money Fund, Arts Supporter Award, Rotary Family Service
Centre and NTUC Rotary Silver Circle Eldercare Centre programmes, South West Community
Development Council’s Adopt-a-Rental Block programme and Wild Rice Ball and Punggol West
Community Centre programmes.
Our sales and marketing initiatives also include participation in our partners’ events, collaboration with
partners in joint events, media advertisements, advertorials, public relations activities and campaigns,
product placements, product previews and introductions, as well as festive celebrations such as Lunar
New Year and Christmas.
Sales and Marketing for Pre-Owned Automobiles
We have placed advertisements of our pre-owned automobiles via classified advertisements in the local
mainstream newspapers and on the internet. In addition, we promote our pre-owned automobiles to our
network of dealers for pre-owned automobiles as well as prospective customers.
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RESEARCH AND DEVELOPMENT
We do not carry out any research and development activities. However, we constantly monitor the
markets, consumer preferences and competition, and are always on the lookout for various opportunities
to expand our existing businesses and to identify new luxury lifestyle businesses and products.
STAFF TRAINING
As our businesses are mainly sales-oriented, it is important that we place a strong emphasis on the
training of our staff to ensure and enhance our quality of service.
All our new employees are required to undergo on-the-job training under a senior staff, who shall train
and equip them with the necessary knowledge and practical skills to perform their tasks. The type of
training conducted varies with the job scope of the employee.
Our factory-authorised service centres are manned by a team of technicians, mechanics and service
advisers, who have been trained, directly and indirectly, by the automobile manufacturers.
In addition, we send selected employees for external training courses and seminars (such as
management skills, language courses and technical courses) from time to time.
WORKPLACE SAFETY AND HEALTH MEASURES
We have established a workplace safety and health policy to ensure that all works in our workplace
at 30 Teban Gardens Crescent are carried out in accordance with the provisions of the WSHA and its
subsidiary legislations.
Pursuant to the WSHA, we have established a workplace safety and health committee in respect of our
workplace at 30 Teban Gardens Crescent. The workplace safety and health committee performs the
following functions:

To review safety and health of all persons in our workplace;

To maintain safe and healthy working conditions in our workplace by promoting co-operation
between our management and employees;

To carry out inspections on any accident cases and dangerous occurrences in the interests of the
safety and health of our employees; and

To carry out such other functions and duties as prescribed by the WSHA.
We conduct health and safety briefings for our non-operational personnel. In addition, each of
our technicians and mechanics is required to attend briefings and trainings, including on-the-job
familiarisation and safety demonstrations, which are provided by the equipment suppliers.
INTELLECTUAL PROPERTY
Under our distributorship and/or dealership arrangements, we are generally able to use the trade names,
trademarks and other branding materials in a manner consistent with the standards and requirements set
by the relevant automobile manufacturers for the purposes of promoting and marketing their respective
automobiles.
Save as disclosed above, our business or profitability is not dependent on nor do we have any registered
trademark, patent or licence, or any other intellectual property rights.
90
PROPERTIES AND FIXED ASSETS
As at the Latest Practicable Date, our Group owns the following leasehold properties:
Location
Tenure
Approximate
land area
(sq ft)
Leasehold (10 years
expiring on 31 May 2017)
114,908
7 and 9 Chang Charn Leasehold (99 years
expiring on 31 December
Road(3)
2056)
19,954
30 Teban Gardens
Crescent(2)
Usage
Encumbrances(1)
Offices, showrooms, Mortgaged to OCBC
service centres and
automobile parts and
accessories store
–
Mortgaged to UOB
Lessor
Net Book
Value
as at 30
June 2013
(S$’000)
JTC
5,180
HDB
16,053
Notes:
(1)
Please refer to the section entitled ‘Capitalisation and Indebtedness” of this Offer Document for further details.
(2)
Please refer to the sub-section entitled “Teban Gardens Lease Extension” under this section of this Offer Document and
the section entitled “Risk Factors – Risks relating to the Teban Gardens Lease Extension and the Sale and Leaseback
Arrangement” of this Offer Document for further details.
(3)
The acquisition of the premises at 7 and 9 Chang Charn Road was completed on 28 February 2013. We have plans to
construct new facilities, consisting of offices, showrooms, service centres and automobile parts and accessories stores, on 7
and 9 Chang Charn Road. We expect to commence the construction of the aforesaid facilities by 2015 and the construction
is expected to take approximately 24 months. We estimate that the construction costs to be between S$22million and S$25
million. Please refer to the section entitled “General Information on our Group – Business Strategies and Future Plans –
Construction of improved or new facilities for our operations” of this Offer Document for further details.
As at 30 June 2013, the net book value of our property, plant and equipment consisting of leasehold
property and improvements, renovations, motor vehicles, plant and equipment and construction in
progress amounted to approximately S$23.78 million.
To the best of our Directors’ knowledge, there are no regulatory requirements or environmental issues
that may materially affect our utilisation of the above properties and fixed assets, save as disclosed under
this section and the section entitled “Government Regulations” of this Offer Document.
We do not have any manufacturing facility as we are not engaged in the business of manufacturing
automobiles or parts or accessories.
Teban Gardens Lease Extension
The leasehold tenure for our premises at 30 Teban Gardens Crescent will expire on 31 May 2017.
Pursuant to an agreement to lease dated 21 May 2013 between JTC and EuroSports Auto, JTC has
agreed to extend the lease for 22 years from 1 June 2017, which is conditional upon the fulfilment of,
inter alia, the investment criteria as follows:
(a)
The development of our premises at 30 Teban Gardens Crescent to a minimum gross floor area at
the gross plot ratio of not less than 1.20, but not more than 2.50; and
(b)
Fulfilment of aggregate investment on building and civil works and plant and machinery at our
premises at 30 Teban Gardens Crescent of at least S$8.30 million, of which at least S$6 million
must consist of new investment on plant and machinery and building and civil works, and the
remainder may consist of the net book values of the existing building and civil works and existing
plant and machinery.
91
As at the Latest Practicable Date, we have constructed an annex to our premises at 30 Teban Gardens
Crescent, comprising an additional two storey showroom, display area and office, which has a total
gross floor area of 12,922.67 sq m. As at the date of this Offer Document, we have received the relevant
temporary occupation permit. We have incurred approximately S$1.74 million for the construction and
fitting out costs, out of which S$0.60 million of the building construction costs will go towards partial
fulfillment of the minimum new investment of S$6 million.
As at the Latest Practicable Date, we have incurred approximately S$5.44 million for the purchase
of automobiles for demo and/or test-drive purposes and/or for the purpose of leasing. Subject to
confirmation by JTC, we have fulfilled the remaining minimum new investment of S$5.40 million by
acquiring such automobiles.
Based on the above, subject to confirmation by JTC, we have fulfilled the minimum new investment
of S$6 million (comprising both new investment on plant and machinery and building and civil works).
The remainder of the required aggregate investment as stated in item (b) above will consist of the net
book values of our existing building and civil works and existing plant and machinery. Our property, plant
and equipment consist of leasehold property and improvements, renovations, motor vehicles, plant and
equipment, which amounted to approximately S$8 million as at 30 June 2013, excluding the premises at
7 and 9 Chang Charn Road.
Sale and Leaseback Arrangement
Pursuant to a conditional sale and purchase agreement (the “Sale and Purchase Agreement”)
dated 4 July 2012 between EuroSports Auto and RBC Dexia Trust Services Singapore Limited (in its
capacity as trustee of Cambridge Industrial Trust) (the “Purchaser”), EuroSports Auto has agreed to
sell the leasehold interest in respect of 30 Teban Gardens Crescent (the “Property”), comprising the
land, building and all mechanical and electrical equipment installed therein, to the Purchaser for
a consideration of S$41 million. In arriving at the aforesaid consideration, the parties have taken into
account, inter alia, the aggregate investment on building and civil works and plant and machinery at the
Property required under the investment criteria for the Teban Gardens Lease Extension. As disclosed in
the section entitled “General Information on our Group – Properties and Fixed Assets – Teban Gardens
Lease Extension” of this Offer Document, our Group has constructed an annex to our premises at 30
Teban Gardens Crescent, for which we have incurred approximately S$1.74 million in the construction
and fitting out costs.
We expect to recognise a gain on sale of leasehold property arising from the Sale and Leaseback
Arrangement upon completion. Please refer to the Unaudited Pro Forma Combined Financial Information
as set out in Appendix C of this Offer Document for the accounting treatment in respect of the Sale and
Leaseback Arrangement.
The principal terms of the proposed disposal of the Property are set out below.
(a)
Consideration
The purchase price of S$41 million (the “Disposal Consideration”) was arrived at on a willingbuyer and willing-seller basis, taking into consideration the independent valuation conducted on the
Property which was commissioned by the Purchaser. The completed redeveloped building has a
gross floor area of not less than 12,922.67 sq m. If the gross floor area of the redeveloped building,
as determined by the appointed independent registered land surveyor, is less than 12,922.67 sq m
after issuance of the certificate of statutory completion in respect of the redeveloped building (the
“Certificate of Statutory Completion”), the Purchaser shall be entitled to rescind the Sale and
Purchase Agreement.
A deposit of S$50,000 has been paid to EuroSports Auto’s solicitors as stakeholders on the date of
the Sale and Purchase Agreement. The balance of the Disposal Consideration shall be paid by the
Purchaser to EuroSports Auto on completion of the sale and purchase of the Property.
92
(b)
Conditions of the sale and purchase of the Property
It is a condition to the Sale and Purchase Agreement that EuroSports Auto must obtain from
JTC the Teban Gardens Lease Extension and written confirmation from JTC that all terms and
conditions imposed by JTC for the grant of the Teban Gardens Lease Extension have been fulfilled
and that JTC has granted or confirmed the grant of the Teban Gardens Lease Extension (the “JTC
Confirmation of Tenure”).
EuroSports Auto shall obtain the JTC Confirmation of Tenure by 31 March 2014 or such other
period as the parties may agree in writing (the “Development Deadline”). EuroSports Auto
shall, as soon as practicable and not later than seven (7) days after the later of the issuance of
the Certificate of Statutory Completion or the JTC Confirmation of Tenure, apply to JTC and the
competent authorities for the JTC Approvals and the JTC Confirmation of No Breach. EuroSports
Auto shall bear and pay all fees payable for the application for the JTC Approvals as well as all
costs imposed by JTC in respect of the sale and leaseback of the Property.
Based on the Sale and Purchase Agreement:
(A)
(B)
“JTC Approvals” means the approval of the JTC, where necessary for:
(aa)
the sale of the Property by EuroSports Auto to the Purchaser in accordance with the
provisions of the Sale and Purchase Agreement; and
(bb)
the lease of the Property by the Purchaser to EuroSports Auto (as tenant) in
accordance with the Sale and Purchase Agreement and the Lease Agreement
(as defined below), in the form as set out in the Sale and Purchase Agreement,
commencing on completion, for the approved use of distribution and servicing of
motor cars only and shall include, where applicable, in either case, the approvals of all
competent authorities;
“JTC Confirmation of No Breach” means the written confirmation from the JTC that:
(aa)
all terms and conditions imposed by the JTC for the grant of the initial leasehold term
of 10 years commencing from 1 June 2007 and the further leasehold term of 22 years
commencing on the date immediately following the expiry of the initial leasehold term
have been fulfilled; and
(bb)
there is no subsisting breach by EuroSports Auto of the head lease between JTC and
EuroSports Auto and that EuroSports Auto has performed and complied in all respects
with the terms and conditions contained in the confirmation.
If by the Development Deadline, EuroSports Auto has obtained the Certificate of Statutory
Completion and has applied to JTC for the JTC Confirmation of Tenure but has not yet obtained the
JTC Confirmation of Tenure, the JTC Approvals and JTC Confirmation of No Breach, the Purchaser
may extend the Development Deadline to 30 June 2014 (the “Extended Development Deadline”),
to enable EuroSports Auto to obtain the JTC Confirmation of Tenure and the JTC Approvals and
JTC Confirmation of No Breach.
In the event that EuroSports Auto is unable to obtain the JTC Confirmation of Tenure, Certificate
of Statutory Completion, the JTC Approvals and the JTC Confirmation of No Breach by the
Development Deadline or the Extended Development Deadline, the Purchaser shall be entitled
to rescind the Sale and Purchase Agreement. In the event the Purchaser determines that any of
the terms and conditions of any of the JTC Approvals is not acceptable to it, or the agreement
for lease, variation of lease, supplementary deed or other definitive agreement from JTC that
evidences the grant of the Teban Gardens Lease Extension is not acceptable to it, the Purchaser
shall be entitled to rescind the Sale and Purchase Agreement.
93
(c)
Conditions precedent to completion
The completion of the purchase of the Property by the Purchaser is subject to and conditional upon
satisfaction of, inter alia, the following conditions:
(i)
the parties having received the JTC Approvals and JTC Confirmation of No Breach by
the Development Deadline or Extended Development Deadline, and the Purchaser being
in receipt from EuroSports Auto and accepting the terms of the JTC Approvals within the
relevant period stipulated in such approvals;
(ii)
the Purchaser receiving satisfactory results to its due diligence investigations;
(iii)
EuroSports Auto not being in breach of any provision of the Sale and Purchase Agreement
or not having failed to perform and comply in all respects with any of the covenants and
agreements referred to in the Sale and Purchase Agreement or none of the representations
and warranties being unfulfilled, untrue or incorrect;
(iv)
EuroSports Auto not being in breach of any provisions of the head lease or failing to perform
and comply with any of the covenants and agreements contained therein;
(v)
there being no compulsory acquisition or notice of compulsory acquisition or intended
acquisition affecting the Property;
(vi)
the relevant approvals of the board of directors of Cambridge Industrial Trust Management
Limited, as the manager of Cambridge Industrial Trust, the trustee of Cambridge Industrial
Trust, the unitholders of Cambridge Industrial Trust and any lender to the Purchaser;
(vii)
a valuation report based on a sale and leaseback structure in respect of the Property
satisfactory to the Purchaser, obtained by the Purchaser not less than one (1) month prior to
the completion date;
(viii)
the issuance of the JTC Confirmation of Tenure by the Development Deadline or Extended
Development Deadline; and
(ix)
the issuance of the Certificate of Statutory Completion by the Development Deadline.
In the event that by the Development Deadline or Extended Development Deadline, whichever is
later, any of the conditions precedent are not fulfilled or waived by the Purchaser, the Purchaser
shall be entitled to rescind the Sale and Purchase Agreement.
(d)
Lease to EuroSports Auto
The Purchaser shall on completion lease the Property to EuroSports Auto for six (6) years
commencing from the actual date of completion of the purchase of the Property, subject to the
lease agreement to be entered into between the Purchaser (as landlord) and EuroSports Auto (as
tenant) in the agreed form set out in the Sale and Purchase Agreement (the “Lease Agreement”).
Pursuant to the Lease Agreement, the rent payable by EuroSports Auto to the Purchaser shall be
as set out below.
Year
Rent (S$ per annum)
(excluding GST)
First Year
3,415,000
Second Year
Third Year
3,415,000
3,585,750
Fourth Year
Fifth Year
Sixth Year
3,585,750
3,765,038
3,765,038
The Purchaser will grant to EuroSports Auto an option to renew the lease for a further term for six
(6) years at a revised rent to be agreed between the parties based on the then prevailing market
rate.
94
As at the Latest Practicable Date, we are in the process of fulfilling the conditions precedent to
completion of the Sale and Leaseback Arrangement as stated above. We expect to complete the Sale
and Leaseback Arrangement by the first quarter of 2014.
Please refer to the section entitled “Risk Factors – Risks relating to the Teban Gardens Lease Extension
and the Sale and Leaseback Arrangement” of this Offer Document.
MAJOR SUPPLIERS
As at the Latest Practicable Date, we have entered into distributorship and/or dealership agreements with
the Lamborghini Manufacturer, Pagani Manufacturer, Alfa Romeo Manufacturer and Touring Superleggera.
During the Period under Review, save as disclosed in the table below, no single supplier accounted for
five per cent. (5.0%) or more of our total purchases(1).
During the Period under Review, our pre-owned automobiles are purchased from individuals and none of
these purchases accounted for five per cent. (5.0%) or more of our total purchases(1).
Percentage of total purchases(1) (%)
Lamborghini Manufacturer
FY2011
FY2012
FY2013
1Q2014
40.4
26.9
37.5
32.8
Note:
(1)
Total purchases is computed based on costs of purchase of new automobiles and pre-owned automobiles, cost of automobile
parts and accessories, cost of luxury watches, direct labour costs, sub-contracting costs, freight and delivery charges and
warranty provisions. Please refer to the section entitled “Management’s Discussion and Analysis of Financial Position and
Results of Operations” of this Offer Document for more details.
The decrease in the total purchases from the Lamborghini Manufacturer in FY2012 was mainly
attributable to higher purchases of pre-owned automobiles in FY2012.
Save in respect of our Lamborghini dealership, our Directors are of the opinion that our business and
profitability are currently not dependent on any single supplier or on any particular industrial, commercial
or financial contract with any supplier. Please refer to the section entitled “Risk Factors – We are
dependent on the sales of Lamborghini automobiles” of this Offer Document for further details.
As at the date of this Offer Document, none of our Directors or Substantial Shareholders or their
associates has any interest, direct or indirect, in the Lamborghini Manufacturer.
MAJOR CUSTOMERS
Our customers comprise mainly individuals and automobile dealers, who purchase our new automobiles
and/or pre-owned automobiles.
During the Period under Review, save as disclosed in table below, no single customer contributed five per
cent. (5.0%) or more of our total revenue:
Percentage of total revenue (%)
Motor-Way Credit
FY2011
FY2012
FY2013
3.2
8.8
3.7
1Q2014
–
Sales to Motor-Way Credit in FY2012 amounted to 8.8% of total revenue as we sold 21 units of preowned automobiles to Motor-Way Credit, as compared to eight (8) units in FY2011 and five (5) units in
FY2013.
Our Directors are of the opinion that our business and profitability are currently not dependent on any
single customer or on any particular industrial, commercial or financial contract with any customer.
As at the date of this Offer Document, none of our Directors, Substantial Shareholders or their associates
has any interest, direct or indirect, in Motor-Way Credit.
95
CREDIT MANAGEMENT
Credit policy to our customers
Our sales of automobiles and watches are conducted on a cash basis (including payment by credit
card). We generally do not grant any credit terms to our customers of automobiles and watches and our
customers of after-sales services. However, we may grant credit to our customers on a case by case
basis, depending on the contract value, relationship with the customer and payment track record of the
customer.
We typically grant our appointed point of sale and/or local distributor for our watches a credit term of 30
days.
Our finance department regularly monitors and oversees payments from our customers. For debtors with
payments outstanding for more than 365 days, we will typically make specific provisions for doubtful trade
receivables. Doubtful trade receivables will be written-off when such debts are deemed not recoverable.
The allowances for doubtful trade receivables, trade receivables written-off and trade receivables turnover
days of our Group for the Period under Review are set out below:
FY2011
Allowance for doubtful trade receivables (S$’000)
Trade receivables written off (S$’000)
Total allowance for doubtful trade receivables and trade
receivables written off as a % of total revenue
(1)
Trade receivables turnover (days)
FY2012
FY2013
1Q2014
–
112
182
–
68
63
–
–
0.06%
0.21%
0.21%
–
5
29
7
6
Note:
(1)
The trade receivables turnover days is calculated based on the closing trade receivables balance as at the relevant financial
year divided by the corresponding revenue and multiplied by 365 days for FY2011, FY2012 and FY2013. For 1Q2014, the
trade receivables turnover days is calculated based on the closing trade receivables balance of the financial period divided by
revenue and multiplied by 90 days.
Our trade receivables arise mainly from the sale of pre-owned automobiles to Motor-Way Credit, rental
received from a tenant resulting from the subletting of our premises at 30 Teban Gardens Crescent, sales
of watches to E’ Collezione, provision of after-sales services, and sales of new automobiles to certain
individual customers. The allowance for doubtful trade receivables mainly relate to outstanding accident
insurance claims arising from repairs to customers’ automobiles where we are unable to agree with the
insurers on the amounts reimbursable within a reasonable period. The trade receivables written off mainly
relate to long overdue debts arising from after-sales services provided to our customers.
The increase in our trade receivables turnover days in FY2012 was due to the sale of 11 units of preowned automobiles at approximately S$6.50 million to Motor-Way Credit in March 2012. We received
full payment from Motor-Way Credit after 31 March 2012. Please refer to the section entitled “General
Information on our Group – Major Customers” of this Offer Document for further details.
Credit terms from our suppliers
Our trade payables arise mainly from the purchase of new demo automobiles and automobile parts and
accessories from manufacturers and outstanding hire purchase liabilities relating to purchase of preowned automobiles.
Our purchases of new automobiles are generally conducted on a cash on delivery basis. However,
automobile manufacturers may grant us a credit term of 90 days from the date of delivery for purchases
of new demo automobiles and a credit term of 30 days from the date of delivery for purchases of
automobile parts and accessories.
96
Our trade payables turnover days for the Period under Review are as follows:
Trade payables turnover (days)(1)
FY2011
FY2012
FY2013
1Q2014
29
32
42
22
Note:
(1)
The trade payables turnover days is calculated based on the closing trade payables balance as at the relevant financial year
divided by the corresponding cost of purchases and multiplied by 365 days for FY2011, FY2012 and FY2013. For 1Q2014,
the trade payables turnover days is calculated based on the closing trade payables balance of the financial period divided by
cost of purchases and multiplied by 90 days.
Our trade payables turnover days for the Period under Review are within the credit terms granted to us.
INVENTORY MANAGEMENT
Our inventory comprises new automobiles, pre-owned automobiles, automobile parts and accessories
and watches. New automobiles and pre-owned automobiles comprise the bulk of our inventory.
Accordingly, our inventory turnover days are largely dependent upon the movement of the inventory for
new automobiles or pre-owned automobiles.
In order to respond to customer demand and at the same time manage our cashflow effectively,
we aim to stock a reasonable level of inventory of our products. We typically procure our inventory
based on historical movements of and anticipated demand for new automobiles and automobile parts
and accessories. Our inventory for pre-owned automobiles is largely dependent upon sales of new
automobiles where trade-in automobiles are involved. We maintain an inventory management system
for new automobiles, pre-owned automobiles and automobile parts and accessories, which enables
us to monitor and manage our inventory turnover for these products in a real-time manner. For new
automobiles and pre-owned automobiles that have aged beyond a certain period of time, we will take
initiatives, such as marketing events, to reduce such inventory level. We have also extended this inventory
management system for monitoring and managing our inventory turnover for watches.
Our inventory turnover days for the Period under Review are as follows:
Inventory turnover (days)(1)
FY2011
FY2012
FY2013
1Q2014
104
61
151
142
Note:
(1)
The inventory turnover days is calculated based on the closing inventory balance as at the relevant financial year divided by
the corresponding cost of purchases and multiplied by 365 days for FY2011, FY2012 and FY2013. For 1Q2014, the inventory
turnover days is calculated based on the closing inventory balance of the financial period divided by cost of purchases and
multiplied by 90 days.
The inventory turnover days in FY2012 decreased to 61 days from 104 days in FY2011 mainly due to the
sale of 11 units of pre-owned automobiles to Motor-Way Credit in March 2012. The inventory turnover
days in FY2013 increased to 151 days due to increase in inventory of pre-owned automobiles and
watches.
As at the Latest Practicable Date, our Directors are not aware of any information or reasons that our
Group may have to make material provision or write-down our inventory.
97
INSURANCE
As at the Latest Practicable Date, we have taken up insurance policies in respect of, inter alia, the
following:

Property damage, business interruption and industrial all risks policies in respect of our premises;

Motor trade policy in respect of automobiles;

Work injury compensation for our employees;

Marine open cover policy in respect of our new automobiles;

Public liability in respect of our premises;

Money policy in respect of money in our premises and money in transit; and

Fidelity guarantee policy for our employees.
Our Directors are of the view that the above insurance policies are adequate for our existing operations.
However, any significant damage to our assets and properties, whether as a result of fire or other causes,
may still have an adverse effect on our business, results of operations or financial position. Please refer to
the section entitled “Risk Factors – Our insurance coverage may not be adequate” of this Offer Document
for further details. Our Directors will review our insurance coverage annually to ensure that it is adequate
for the Group’s operations.
COMPETITION
The automobile industry has high barriers to entry due to, inter alia, intensive capital requirements and
stringent distributor and/or dealer selection criteria of automobile manufacturers.
Our competitors are typically distributors and dealers of automobiles manufactured by European
manufacturers which focus on similar class of automobiles. In the ultra-luxury segment of the automobile
market, to the best of our knowledge and belief, our competitors are the distributors and dealers of other
ultra-luxury brands of automobiles, including Aston Martin, Bentley, Ferrari, McLaren and Porsche. In the
luxury segment of the automobile market, to the best of our knowledge and belief, our competitors are
the distributors and dealers of other luxury brands of automobiles, including Citroen, Renault, Peugeot
and Volkswagen. There are numerous distributors and dealers of such automobile brands that are in
competition with us.
By way of illustration, the total annual new registration of automobiles of the brands we carry (being
Lamborghini and Alfa Romeo) as well as our competing brands in Singapore since year 2002 to 2012 are
set out below.
BRAND
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
Ultra-luxury
Aston Martin
Bentley
Ferrari
Lamborghini
McLaren
Porsche
–
–
15
6
–
55
–
–
5
–
–
91
–
26
23
20
–
88
8
22
35
19
–
137
11
36
26
29
–
168
20
37
53
34
–
337
24
41
45
49
–
327
25
45
32
54
–
303
34
49
69
53
–
448
25
60
92
49
–
584
22
93
80
56
33
507
Luxury
Alfa Romeo
Citroen
Peugeot
Renault
Volkswagen
116
247
358
656
480
191
103
467
459
384
146
67
392
841
290
138
67
535
820
660
96
47
560
518
585
169
247
494
456
942
75
209
384
309
1,290
138
284
387
288
2,530
105
375
259
166
3,486
48
346
460
263
3,204
49
357
560
114
3,567
98
Note:
(1)
Source: Annual Vehicle Statistics 2012 – Total Annual New Registration of Cars by Make. Information was extracted from the
website of the LTA at http://www.lta.gov.sg/content/ltaweb/en/publications-and-research.html. Please note that the LTA has
not consented to the inclusion of the information extracted from its website in this section and is thereby not liable for such
information under Sections 253 and 254 of the SFA. Our Directors are aware that the LTA does not guarantee or assume
responsibility that the information on its website is accurate, adequate, current or reliable, or may be used for any purpose
other than for general reference. Although we and the Vendors have extracted the relevant information in its proper form and
context in this Offer Document, we and the Vendors have not separately verified the accuracy of such information.
In the luxury segment of the watch market, to the best of our knowledge and belief, our competitors
are the distributors and dealers of other luxury brands of watches, particularly Swiss-made brands of
watches, including Audemars Piguet and Franck Muller. Similarly, there are numerous distributors and
dealers of such watch brands that are in competition with us.
Our Directors and Substantial Shareholders do not have any interest, direct or indirect, in any of the
distributors or dealers of any other brands of automobiles and watches.
We believe that competition in our businesses is largely based on, inter alia, customer service, branding
of automobile, price, automobile performance and delivery capability. We have identified the following as
our key competitive strengths:
We have developed strong relationships with our customers through personalised and quality
customer service
We place great emphasis on understanding the needs and requirements of our customers and providing
them with the quality services that they would expect. Our motto of “walk in as a customer, walk out
as a friend” encompasses the values and philosophy by which we run our business. We aim to provide
personalised and quality customer service, from the purchasing stage (during the automobile selection,
choosing of financing options, delivery schedules and actual delivery) to the post-purchasing stage (in
terms of maintaining the automobile purchased and provision of after-sales services). In keeping with
the ultra-luxury or luxury branding and image of the automobiles we sell, we ensure that our service
standards match up to such expectations by putting the right people in the right place to provide sales
or after-sales services of the highest standards. Our customer service aspect is led by our Executive
Chairman and CEO, Melvin Goh. Our customer service capabilities are further enhanced through the use
of our centralised database that stores our customer’s information, including the history of automobile
purchases of our customers and the maintenance and repair records of their automobiles. This enables
us to tailor and conduct targeted marketing campaigns accordingly to meet customer needs and
expectations.
We believe that our emphasis on personalised customer service has contributed to a high level of
repeat sales to existing customers. At the same time, our customers have also been the most effective
ambassadors of our Group and our products. This is evident in the growing number of sales of our
Lamborghini automobiles over the years, resulting in us receiving the various awards by the Lamborghini
Manufacturer, including the “Certificate of Achievement for the 2005 Results Obtained in Sales and
Service” and the “Best Sales Performance 2008”.
Please refer to the sections entitled “General Information on our Group – History and Development” and
“General Information on our Group – Business Overview” of this Offer Document for more information.
We carry strong and well-established automobile brands
We carry strong and well-established automobile brands, including Lamborghini which is a wellestablished automobile brand both globally and in Singapore. The Lamborghini Manufacturer is renowned
for producing quality high performance super cars and has been able to distinguish itself from the rest
of the field in areas, such as exclusivity, quality and image. We believe that Alfa Romeo is similarly a
well-established brand in the automobile market with a loyal following. The strength of the automobile
brands we carry, coupled with our focused sales and marketing activities, has been a key contributor to
our growth.
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We maintain an established relationship with automobile manufacturers
As at the Latest Practicable Date, we are the only authorised dealer for Lamborghini automobiles in
Singapore, and the exclusive distributor for Alfa Romeo automobiles in Singapore.
We have an established relationship with the existing automobile manufacturers, both in terms of the
length of time we have been working together and the depth of our working relationships with them. Our
relationship with the Lamborghini Manufacturer started in 2001 spanning more than 10 years. We also
have a long-established relationship with the Alfa Romeo Manufacturer, which began since 2004. These
automobile manufacturers have been supportive in terms of automobile allocation, delivery schedules and
other operational, technical and sales support.
Leading automobile manufacturers for ultra-luxury and luxury brands are generally selective in
entering into distributorship and/or dealership arrangements. As a result, we believe that our strong
and long-standing relationships with these existing automobile manufacturers, strong sales, high
customer satisfaction and proven track record place us in a favourable position to maintain the existing
distributorships and/or dealerships with these automobile manufacturers. In addition, we believe that our
reputation as an ultra-luxury automobile and luxury automobile dealership group gives us competitive
advantages in obtaining new distributorships and/or dealerships from other automobile manufacturers in
Singapore or overseas in the future.
We have an experienced and committed management team with proven track record
Our Group is led by our Executive Chairman and CEO, Melvin Goh, who has more than 30 years of
experience in the automobile industry. He has been instrumental in developing the business of our Group
and charting its strategic directions. Furthermore, our Executive Director and Deputy CEO, Andy Goh,
has over 28 years of experience in the automobile industry. In addition, our COO, Dennis Yang Yung
Kang, has more than 35 years of relevant experience and in-depth expertise in the automobile industry.
Their strong management capabilities, industry and product knowledge and understanding have
contributed significantly to the growth of our business and are vital to our continued growth and future
development.
PROSPECTS
Going forward, in light of our competitive strengths and barring any unforeseen circumstances, our
Directors are confident of the prospects and outlook of our business, due to the following factors.
Steady growth in Singapore’s GDP
The Singapore economy is estimated to have grown by 3.7% in 2013 and is expected to grow by 2.0%
to 4.0% in 2014.(1) In addition, the International Monetary Fund (“IMF”) has projected Singapore’s GDP
per capita growth to be approximately 3.7% per annum for the next four (4) years.(2) The rising affluence
and spending power of Singaporean consumers are likely to lead to more discretionary spending and
provides greater business potential for a wide range of services.
Launch of new product models
The Lamborghini Manufacturer has unveiled the Huracán LP 610-4 that replaces its Gallardo model,
which is likely to attract existing automobile owners and prospective buyers. In addition, the Lamborghini
Manufacturer has previously announced that it plans to enter the sport utility vehicle (SUV) segment
with its newly launched Lamborghini Urus, with a view to expand the brand’s customer base to cover
household families.(3) Based on industry expectations, Lamborghini Urus is expected to hit the market by
2017.
Aside from new launches by Lamborghini, the Alfa Romeo Manufacturer has recently launched the new
4C model.
In respect of our luxury watch business, we have commissioned the deLaCour Manufacturer to produce
90 limited edition GT3 timepieces that bear the identity of the six (6) GT3 race circuits for the GT Asia
2013. We believe that the new series will appeal to the existing deLaCour customers, motor sports
enthusiasts as well as luxury watch users.
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This is expected to drive the growth of sales of our products going forward, as the luxury and ultra-luxury
segments are model-driven markets and sales typically increase when a new model is launched.
Expanding distribution and retail network for deLaCour watches
We believe that the expanding distribution network will drive the growth of sales of our deLaCour
watches. As at the Latest Practicable Date, we have appointed two (2) Singapore watch retailers, namely
Sincere Watch Limited and Watches of Switzerland, to act as our points of sales to retail the deLaCour
brand of watches in Singapore and we have also appointed a local distributor in Jakarta, Indonesia. We
are also presently in discussions with a potential local distributor in Bangkok, Thailand. Please refer to the
section entitled “General Information on our Group – Business Strategies and Future Plans” of this Offer
Document for more details.
Notes:
1.
Source: Press releases entitled “MTI Forecasts Growth of 3.5 to 4.0 Per Cent in 2013 and 2.0 to 4.0 Per Cent in 2014” dated
21 November 2013 and “Singapore’s GDP Grew 4.4 Per Cent in the Fourth Quarter of 2013” dated 2 January 2014 by the
Ministry of Trade and Industry Singapore (“MTI”). Information was extracted from the website of the Singapore Department of
Statistics (“DOS”) at http://www.singstat.gov.sg/statistics/browse_by_theme/national_accounts.html.
2.
Source: World Economic Outlook Database, October 2013. Information was extracted from the website of IMF at
http://www.imf.org/external/pubs/ft/weo/2013/02/weodata/weoselgr.aspx.
3.
Source: Press release entitled “Lamborghini Urus – The SUV super athlete” dated 22 April 2012 by the Lamborghini
Manufacturer.
The MTI, DOS, IMF and the Lamborghini Manufacturer have not consented to the inclusion of the relevant information for the
purposes of Section 249 of the SFA and are therefore not liable for the relevant statement(s) under Sections 253 and 254 of the
SFA. While we and the Vendors have taken reasonable action to ensure that the relevant statement(s) have been included in its
proper context and form in this Offer Document, we and the Vendors have not independently verified the accuracy of the relevant
information.
TREND INFORMATION
Our Directors have observed the following trends for FY2014 based on the sales and operations of our
Group as at the Latest Practicable Date:
(a)
We expect our revenue from sale of automobiles to decline for, inter alia, the following reasons:
(i)
Sales of the Lamborghini Gallardo range, which is at the end of its life cycle, are expected to
decrease in FY2014; and
(ii)
The sales volume of automobiles is expected to decrease due to the likely increase in the
selling prices of our automobiles, arising from the new tiered additional registration fee
structure introduced under the Singapore Budget 2013. This, together with the automobile
financing restrictions imposed by the Authority on 25 February 2013, will affect the sales
volume of our automobiles. Please refer to the “Risk Factors – Our business is subject to
measures taken by the Singapore government in relation to automobile ownerships” of this
Offer Document for more details.
(b)
We expect our commission income to decrease due to lower hire purchase referral income earned
resulting from the decrease in sales of automobiles, lower quantum of hire purchase financing
taken by our customers from banks and finance companies as well as the cessation of the funding
support arrangements with EC and PT EuroSport.
(c)
We expect to recognise a one-off gain on sale of leasehold property arising from the Sale and
Leaseback Arrangement upon completion. Please refer to the Unaudited Pro Forma Combined
Financial Information as set out in Appendix C of this Offer Document for the accounting treatment
in respect of the Sale and Leaseback Arrangement.
(d)
Our operating expenses are expected to increase, inter alia, due to the fees and expenses
incurred in relation to the Invitation, compliance costs as a listed company as well as the impact
of the Service Agreements entered into with our Executive Directors (further details of the Service
Agreements are set out in the section entitled “Directors, Executive Officers and Employees –
Service Agreements” of this Offer Document).
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Save as disclosed above and in the sections entitled “Risk Factors”, “Management’s Discussion and
Analysis of Financial Position and Results of Operation” and “General Information on our Group –
Prospects” of this Offer Document respectively, and barring any unforeseen circumstances, our Directors
believe that there are no other known recent trends in production, sales and inventory, the costs and
selling prices of our products and services or other known trends, uncertainties, demands, commitments,
or events that are reasonably likely to have a material effect on our revenue, profitability, liquidity or
capital resources, or that would cause financial information disclosed in this Offer Document to be not
necessarily indicative of our future operating results or financial condition. Please also refer to the section
entitled “Cautionary Note Regarding Forward-Looking Statements” of this Offer Document.
ORDER BOOK
As at 30 June 2013, our order book, based on confirmed sales orders and the indicative selling prices
of our automobiles, was approximately S$17.21 million. As at the Latest Practicable Date, one of these
sales orders amounting to approximately S$1.44 million, which was subsequently varied to approximately
S$2.64 million, has been fulfilled.
As at the Latest Practicable Date, our order book, based on confirmed sales orders and the indicative
selling prices of our automobiles, was approximately S$19.30 million. Barring unforeseen circumstances,
these orders are expected to be fulfilled progressively over the next 18 months.
As the orders in our order book are subject to cancellation or amendment by our customers, the state of
our order book is not necessarily indicative of our revenues or profitability for FY2014.
BUSINESS STRATEGIES AND FUTURE PLANS
Our business strategies and future plans for the growth and expansion of our businesses are described
below:
Expansion of our operations locally and into other markets and acquisitions of new
We intend to capitalise on our know-how, relationships and positive brand image established by our
existing distributorships and dealerships, as well as our extensive industry experience and expertise, to
expand our operations locally and into other markets.
We intend to grow our distribution network locally and into other emerging markets in the region. To this
end, we may expand our distribution network for our existing products into overseas markets or secure
distributorships and/or dealerships for new ultra-luxury automobiles and/or luxury automobiles. For
overseas expansion, we may acquire local existing distributorships and/or dealerships which are already
in the ultra-luxury automobile and/or luxury automobile markets in that country. We may also have to
identify and enter into strategic alliances with local distributors and/or dealers of ultra-luxury automobiles
and/or luxury automobiles, should such a need arise. For instance, we currently have plans to expand our
portfolio of automobiles to include vintage, classic and collectors’ automobiles, which is in line with our
position as an ultra-luxury automobiles and luxury automobiles dealership group and a provider of luxury
lifestyle products.
We believe that our proven track record in operating distributorships and dealerships for ultra-luxury
automobiles and luxury automobiles and our extensive industry experiences and operational expertise
in operating these distributorships and dealerships have equipped us well to secure new distributorships
and/or dealerships for ultra-luxury automobiles and luxury automobiles.
These future plans, however, are subject to economic and market conditions and available opportunities.
We expect to fund the aforesaid expansion plans using the net proceeds from the issue of the New
Shares, external financing and/or our internal resources. If we establish new distributorships and/or
dealerships, the funds will go towards rental expenses for the showrooms and service centres, hiring
of staff, purchasing of inventory and other operating expenses. If we acquire existing distributorships or
dealerships, the funds will go towards the purchase consideration and other incidentals. Please refer to
the section entitled “Use of Proceeds and Listing Expenses” of this Offer Document for more information.
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Construction of improved or new facilities for our operations
We intend to expand our operations by way of acquiring and/or constructing improved or new facilities to
house our offices, showrooms, service centres and automobile parts and accessories stores.
Currently, we are operating in the Teban Gardens Showrooms and Service Centres in Singapore,
occupying approximately 114,908 sq ft. As at the Latest Practicable Date, we have constructed an
annex to our premises at 30 Teban Gardens Crescent, comprising an additional two storey showroom,
display area and office, which has a total gross floor area of 12,922.67 sq m. As at the date of this Offer
Document, we have received the relevant temporary occupation permit. We have incurred approximately
S$1.74 million for the construction and fitting out costs, out of which S$0.60 million of the building
construction costs will go towards partial fulfillment of the minimum new investment of S$6 million.
Please refer to the section entitled “General Information on our Group – Properties and Fixed Assets –
Teban Gardens Lease Extension” for further details on the aforesaid construction.
In addition, we have plans to construct new facilities, consisting of offices, showrooms, service centres
and automobile parts and accessories stores, at 7 and 9 Chang Charn Road. We expect to commence
the construction of the aforesaid facilities by 2015 and the construction is expected to take approximately
24 months. We estimate that the construction costs to be between S$22 million and S$25 million.
Following completion of the construction of the new facilities, we will relocate our head office, showrooms,
service centres and automobile parts and accessories stores to 7 and 9 Chang Charn Road. The usage
of our existing premises at 30 Teban Gardens Crescent will depend on our business requirements then.
The construction costs of the annex to our premises at 30 Teban Gardens Crescent will be funded
through internal resources and, in the event that internal resources are insufficient to cover such capital
expenditure, we will fund this through the unutilised banking facilities of our Group. The construction costs
of the new facilities at 7 and 9 Chang Charn Road are expected to be funded by the sale proceeds
arising from the disposal of our premises at 30 Teban Gardens Crescent in connection with the Sale and
Leaseback Arrangement and, in the event that the Sale and Leaseback Arrangement does not complete,
we intend to fund this capital expenditure through internal resources and/or external financing.
Diversification into other luxury lifestyle businesses
We have plans to diversify into other businesses in the luxury segment in order to leverage on our
established pool of high net worth customers. These businesses will complement our automobile
distribution business by providing more luxury lifestyle product choices to our existing customers.
In line with our vision to be a provider of luxury lifestyle products, we have embarked on the luxury watch
distribution and retail business. We first began selling luxury watches, being the Swiss-made deLaCour
brand of watches, in September 2012. The deLaCour Manufacturer is a Geneva-based watchmaker,
which has been making watches since 1992. They launched the deLaCour brand in 2003, with a focus
on creating only limited edition luxury timepieces. Since then, the deLaCour brand of watches has
been positioned in a different tier within the luxury watch-making sector, attributable to its exclusive and
elaborate designs and unique personalization. To date, deLaCour has boutiques and authorised retailers
worldwide, spanning Africa, Europe, Russia, Asia Pacific, Latin America, Middle East, USA and Canada.
On 9 November 2012, we entered into an agreement with the deLaCour Manufacturer to secure the
exclusive distributorship rights for the deLaCour brand of watches for Singapore, Malaysia, Indonesia,
Thailand and Brunei. We intend to expand our distribution network for the deLaCour brand of watches
locally and into other emerging markets in the region. To this end, we may appoint local watch retailers
in that particular country to act as our points of sales and/or local distributors or set up boutique watch
shops for the purpose of distributing or retailing the deLaCour brand of watches.
As at the Latest Practicable Date, we have appointed two (2) Singapore watch retailers, namely Sincere
Watch Limited and Watches of Switzerland, to act as our point of sales to retail the deLaCour brand of
watches in Singapore and we have also appointed a local distributor in Jakarta, Indonesia. We are also
presently in discussions with a potential local distributor in Bangkok, Thailand.
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If opportunities arise, we will also acquire distributorships and/or dealerships for more luxury lifestyle
products to expand our product portfolio.
This expansion plan is expected to be funded by our internal resources and/or external financing.
Expand our business through joint ventures and strategic alliances
We may also expand our businesses through joint ventures and strategic alliances which we believe
will complement our current and future businesses. We believe that suitable joint ventures and strategic
alliances will give us access to new markets and customers as well as new businesses, including new
distributorships and/or dealerships with strong brand owners. Should such opportunities arise, we will
seek approval, where necessary, from our Shareholders and the relevant authorities as required by
the relevant rules and regulations. As at the Latest Practicable Date, we have not identified any such
opportunities.
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GOVERNMENT REGULATIONS
Save as disclosed below, as at the Latest Practicable Date, our business operations in Singapore
are not subject to any special legislations or regulatory controls other than those generally applicable
to companies (including foreign investment companies) and businesses incorporated and/or operating
in Singapore. We have thus far not experienced any adverse effect on our business in complying with
these regulations. Our Directors confirm after having made all reasonable enquiries, that as at the Latest
Practicable Date, our Group has obtained all relevant business licences, certificates and approvals
necessary for our business operations and we have complied with all relevant laws and regulations
that would materially affect our business operations. Save as disclosed herein, we do not require any
other material licences, registrations, permits or approvals in respect of our operations apart from those
pertaining to general business registration requirements. As at the Latest Practicable Date, our Directors
believe that we are not in breach of any laws or regulations applicable to our business operations in
Singapore that would materially affect our business operations.
The following is a summary of the main laws and regulations of Singapore that are relevant to our
business as at the Latest Practicable Date.
Customs Requirements
As our principal activity is the distribution of automobiles and automobile parts and accessories which
are imported from overseas, we are required to comply with the Customs Act (Chapter 70) of Singapore
(“Customs Act”) and the regulations issued pursuant to the Customs Act.
We are required to obtain import permits prior to the importation of any good into Singapore.
The importation of automobiles for local use is required to be declared to Singapore Customs through
a customs in-payment (duty and GST) permit. A duty rate of 20.0% of the Customs value will be levied
on an automobile and a GST of seven per cent. (7.0%) is also levied on the cost, insurance and freight
value, over and above the duty payable.
We are also required to comply with the Customs Act and the licensing requirements of Singapore
Customs under the Customs Act with respect to the operation of our warehouse that is licensed by
Singapore Customs to store imported dutiable goods, including automobiles, with the duty and GST
payable suspended until they are removed from the licensed premises and enter the local market.
General Licence for Automobile Test-Drive and Trial
We are required to comply with the terms and conditions of a general license issued by the LTA with
respect to the use of an automobile for test-drive and trial (e.g. pre-delivery inspection). The general
licence is to be used only for the purpose of test-drive or trial of an automobile by the licensee or any
other person bona fide in his employment and acting under his authority, who must be present and be in
charge of the automobile whenever the general licence is being used. The general licence shall not be
used for any automobile other than an automobile which is in the licensee’s possession in the course of
its business as a dealer in automobiles.
A general licence may be suspended or revoked if the licensee or any person under its employment
is found to have contravened any provision of the Road Traffic Act (Chapter 276) of Singapore or its
subsidiary legislation or breached any condition of the general licence.
Electrical Installation Licence
Under the Electricity Act (Chapter 89A) of Singapore, no person shall use, work or operate or permit to
be used, worked or operated any electrical installation without an electrical installation licence granted by
the Energy Market Authority. The licensee is required to ensure that the electrical installation is properly
maintained and inspected in accordance with the terms of the license. Any licensee who fails to comply
with the terms of such electrical installation licence may be guilty of an offence and may be liable on
conviction to monetary fines and/or custodial sentences. An electrical installation licence shall be valid for
the period stated therein unless it is revoked before the expiry of that period. Upon expiry of the licence, it
may be renewed.
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Workplace Safety and Health Measures
Under the WSHA, every employer has the duty to take, so far as is reasonably practicable, such
measures as are necessary to ensure the safety and health of his employees at work. These measures
include providing and maintaining for the employees a work environment which is safe, without risk to
health, and adequate as regards to the facilities and arrangements for their welfare at work, ensuring
that adequate safety measures are taken in respect of any machinery, equipment, plant, article or
process used by the employees, ensuring that the employees are not exposed to hazards arising out of
the arrangement, disposal, manipulation, organisation, processing, storage, transport, working or use of
things in their workplace or near their workplace and under the control of the employer, developing and
implementing procedures for dealing with emergencies that may arise while those persons are at work
and ensuring that the person at work has adequate instruction, information, training and supervision as is
necessary for that person to perform his work.
Additional duties imposed on employers are also set out in the Workplace Safety and Health (General
Provisions) Regulations (“WSHR”) including taking effective measures to protect persons at work from the
harmful effects of any exposure to any biohazardous material which may constitute a risk to their health,
ensuring adequate ventilation and maintaining sufficient and suitable lighting.
Pursuant to the WSHR, the following equipment, inter alia, are required to be tested and examined by an
examiner (“Authorised Examiner”), who is authorised by the Commissioner for Workplace Safety and
Health (“CWSH”), before they can be used in a factory and thereafter, at specified intervals:

hoist or lift;

lifting gears; and

lifting appliances and lifting machines.
Upon examination, the Authorised Examiner will issue and sign a certificate of test and examination,
specifying the safe working load of the equipment. Such certificate of test and examination shall be kept
available for inspection. Under the WSHR, it is the duty of the owner of the equipment or occupier of the
factory to ensure that the equipment complies with the provisions of the WSHR and to keep a register
containing the requisite particulars with respect to the lifting gears, lifting appliances and lifting machines.
In addition to the above, under the WSHA, inspectors appointed by the CWSH may, inter alia, enter,
inspect and examine any workplace and any machinery, equipment, plant, installation or article at
any workplace, to make such examination and inquiry as may be necessary to ascertain whether the
provisions of the WSHA are complied with.
Under the WSHA, the CWSH may serve a stop-work order in respect of a workplace if he is satisfied that:

the workplace is in such condition, or is so located, or any part of the machinery, equipment, plant
or article in the workplace is so used, that any process or work carried on in the workplace cannot
be carried on with due regard to the safety, health and welfare of persons at work;

any person has contravened any duty imposed by the WSHA; or

any person has done any act, or has refrained from doing any act which, in the opinion of the
CWSH, poses or is likely to pose a risk to the safety, health and welfare of persons at work.
The stop-work order shall direct the person served with the order to immediately cease to carry on
any work indefinitely or until such measures as are required by the CWSH have been taken, to the
satisfaction of the CWSH, to remedy any danger so as to enable the work in the workplace to be carried
on with due regard to the safety, health and welfare of the persons at work.
During the Period under Review and up to the Latest Practicable Date, our Group has not been served
any stop-work order by the CWSH.
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Employment of Foreign Workers
The availability and the employment cost of skilled and unskilled foreign workers are affected by
the government’s policies and regulations on the immigration and employment of foreign workers in
Singapore. The policies and regulations are set out in, inter alia, the Employment of Foreign Manpower
Act (Chapter 91A) of Singapore and the relevant government gazettes.
The availability of the foreign workers to the manufacturing industry is dependent on, inter alia, the
Ministry of Manpower’s (“MOM”) policies in connection with:

the countries from which foreign workers may be sourced;

the requirements and procedures for the issuance of work permits;

the imposition of security bonds and levies; and

the dependency ceilings based on the ratio of local to foreign workers.
In relation to the employment of semi-skilled or unskilled foreign workers, employers must ensure that
such persons apply for a “Work Permit”. In relation to the employment of foreign mid-level skilled workers,
employers must ensure that such persons apply for a “S Pass”. The S Pass is intended for mid-level
skilled foreigners who earn a monthly fixed salary of at least S$2,200. In relation to the employment of
foreign professionals, employers must ensure that such persons apply for an “Employment Pass”. The
Employment Pass is intended for professionals who earn a monthly fixed salary of at least S$3,000.
As at the Latest Practicable Date, we have five (5) foreign employees, out of which three (3) employees
are Work Permit holders and two (2) employees are S Pass holders.
Under the Employment of Foreign Manpower (Work Passes) Regulations 2012 (passed pursuant to the
Employment of Foreign Manpower Act (Chapter 91A) of Singapore) employers of Work Permit holders
are required, inter alia, to:

subsidise medical expenses of the foreign worker (unless agreed otherwise);

provide safe working conditions;

provide acceptable accommodation consistent with any law or governmental regulations; and

provide and maintain medical insurance for inpatient care and day surgery, with coverage of at
least S$15,000 per every 12-month period.
Employers of S Pass holders are required, inter alia, to:

subsidise medical expenses of the foreign worker (unless agreed otherwise); and

provide and maintain medical insurance for inpatient care and day surgery, with coverage of at
least S$15,000 per every 12-month period.
An employer of foreign workers is also subject to, inter alia, the provisions set out in the Employment Act
(Chapter 91) of Singapore, the Employment of Foreign Manpower Act (Chapter 91A) of Singapore, the
Immigration Act (Chapter 133) of Singapore and the regulations issued pursuant to the Immigration Act.
During the Period under Review and up to the Latest Practicable Date, our Group has been in
compliance with the Employment of Foreign Manpower (Work Passes) Regulations 2012 (passed
pursuant to the Employment of Foreign Manpower Act (Chapter 91A) of Singapore), Employment Act
(Chapter 91) of Singapore, the Employment of Foreign Manpower Act (Chapter 91A) of Singapore or the
Immigration Act (Chapter 133) of Singapore and the regulations issued pursuant to the Immigration Act.
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Workmen’s Compensation
The Work Injury Compensation Act (Chapter 354) of Singapore (“WICA”), which is regulated by the
MOM, applies to all employees in all industries engaged under a contract of service in respect of injury
suffered by them in the course of their employment and sets out, inter alia, the amount of compensation
they are entitled to and the method(s) of calculating such compensation.
The WICA provides that if in any employment, personal injury by accident arising out of and in the
course of the employment is caused to an employee, the employer shall be liable to pay compensation in
accordance with the provisions of the WICA.
Further, the WICA provides, inter alia, that, where any person (referred to as the principal) in the course
of his business or for the purpose of his trade or business contracts with any other person (referred to as
the contractor) for the execution by the contractor of the whole or any part of any work, or for the supply
of labour to carry out any work, undertaken by the principal, the principal shall be liable to pay to any
employee employed in the execution of the work any compensation which he would have been liable to
pay if that employee had been immediately employed by the principal.
Employers are required to maintain Work Injury Compensation insurance for two (2) categories of
employees engaged under contracts of service (unless exempted) - firstly, all employees doing manual
work and secondly, non-manual employees earning S$1,600 or less a month.
We have in place workmen’s compensation insurance policies to cover our statutory obligations and
liabilities under the WICA.
Lemon Laws for Automobiles
With effect from 1 September 2012, Lemon Laws were added to the Consumer Protection (Fair Trading)
Act, with related amendments to the Hire Purchase Act and Road Traffic Act (for provisions governing
automobiles).
Lemon Laws apply to both new automobiles and pre-owned automobiles. Lemon Laws provide remedies
to consumers who purchased automobiles that fail to conform to contract at the time of delivery. Unless
the automobile dealer can prove otherwise, a defect proven to exist within six (6) months of delivery is
presumed to have existed at the time of delivery. Beyond the six (6)-month period, the consumer needs to
show that the defect existed at the time of delivery in order to make a claim under Lemon Laws.
Lemon Laws provide a two (2)-stage recourse framework. The automobile dealer may first offer to
repair or replace the defective automobile within a reasonable period of time and without significant
inconvenience to the consumer. If repair or replacement is not possible or reasonable to the automobile
dealer or the automobile dealer did not provide repair or replacement within a reasonable period and
without significant inconvenience to the consumer, the consumer may keep the defective automobile and
request for a reduction in price or return the defective automobile for a refund, the amount of which would
depend on the use the consumer had of the automobile.
Government Measures relating to Automobile Ownerships
Vehicle Quota System
The LTA implements a vehicle quota system which regulates the rate of growth of automobiles on roads
in Singapore. Anyone who wishes to register a new automobile in Singapore must first obtain a COE, by
paying the prevailing COE premium which is determined based on the engine capacity of an automobile.
A COE represents a right to automobile ownership and use of the limited road space for 10 years. At
the end of the 10-year COE period, automobile owners may choose to deregister their automobile or to
revalidate their COEs for another (five) 5 or 10-year period by paying the prevailing COE premium.
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In September 2013, the LTA introduced a new set of categorisation criteria in relation to automobiles with
engine capacity of not exceeding 1,600 cc. In addition to the existing criterion that the engine capacity
of not exceeding 1,600 cc, the LTA has added a new criterion that the engine power of the automobile
should not exceed 130 bhp. The change applies to automobiles which are registered with COEs obtained
from the first COE bidding exercise in February 2014. This may affect the pricing of automobiles which fall
under the aforesaid categorisation criteria, particularly our Alfa Romeo automobiles. Please refer to the
section entitled “Risk Factors – Our business is subject to measures taken by the Singapore government
in relation to automobile ownerships” of this Offer Document for further details. Nevertheless, we believe
that the new categorisation criteria will not have a material impact on our sale of Alfa Romeo automobiles.
Electronic Road Pricing System
The LTA has in place an electronic road pricing system to manage traffic congestion. Under this system,
motorists are charged when they use ERP-priced roads in Singapore during certain hours, based on a
pay-as-you-use principle. Such rates vary for different roads and time periods depending on local traffic
conditions.
Additional Registration Fee and Automobile Financing Restrictions
The LTA imposes an additional registration fee upon registration of an automobile. As announced in the
Singapore Budget 2013, a new tiered additional registration fees structure was introduced to replace the
original registration fee of a 100% flat rate of open market value. Under the new structure, the additional
registration fees for automobile models with open market values of up to S$20,000 will remain at the rate
of 100%, the next S$30,000 of open market value of the automobile will attract a rate of 140% and any
open market value beyond S$50,000 will attract a rate of 180%. The new tiered structure applies to every
automobile that is registered with COEs obtained from the first COE bidding exercise in March 2013.
Further, on 25 February 2013, the MAS announced the following financing restrictions on automobiles
loans granted by financial institutions, which took effect as of 26 February 2013:
(a)
For automobiles with an open market value that does not exceed S$20,000, the maximum loan
quantum is 60% of the purchase price;
(b)
For automobiles with an open market value of more than S$20,000, the maximum loan quantum is
50% of the purchase price; and
(c)
The tenure of an automobile loan will be capped at five (5) years.
The new tiered additional registration fee structure may cause an increase in the cost of sales of our
ultra-luxury automobiles and luxury automobiles, particularly for automobile models with open market
value of above S$20,000. If we are unable to identify and adopt appropriate means to reduce costs or
pass on such increase in cost to our customers, sales of our automobiles will be adversely affected.
In addition, under the tightened automobile loan rules, our customers are required to place higher
down payments for their automobiles and to settle the automobile loan within five (5) years. By way of
illustration only, open market value of the Lamborghini Aventador model is in the region of S$0.40 million
and, accordingly, it was subject to the additional registration fee rate of 180% and the maximum loan
quantum of 50.0%. The additional registration fee for the Lamborghini Aventador model has increased by
approximately S$0.30 million, from approximately S$0.40 million to approximately S$0.70 million, under
the new structure.
109
Licenses, Certificates and Approvals
The following is a description of the licenses, certificates and/or approvals that we have obtained for the
operations of our Group (apart from those pertaining to general business requirements):
Type of licence/certificate/
approval
Licensing body
Validity period /
Date of expiry
Description
Singapore Customs
Valid until 31
December 2014
We are licensed to store
dutiable motor vehicles at 30
Teban Gardens Crescent
Electrical installation licence
Energy Market Authority
21 May 2013 to 20
May 2014
We are licensed to use or
operate an electrical installation
at 30 Teban Gardens Crescent
Licence to deal in explosives
Arms and Explosives
Licensing Division
Licence to warehouse goods liable
to duty
21 August 2013 to 20 EuroSports Auto is licensed to
August 2015
deal in airbags
Arms and Explosives
Licensing Division
1 July 2013 to 30
June 2015
EuroAutomobile is licensed to
deal in airbags
LTA
31 March 2014
This licence is used by
EuroSpor ts Auto for the
purpose of test-drive or trial of
an automobile
LTA
The last licence
is valid until 30
November 2014
These licences are used by
EuroAutomobile for the purpose
of test-drive or trial of an
automobile
General licences for Automobile
Test-Drive and Trial
All the aforesaid licenses, certificates and/or approvals have a validity period of less than 12 months.
Some of these licenses, certificates and/or approvals are subject to annual renewal. Our Directors are
not aware of any reasons which would cause or lead to non-renewal of any of these licenses, certificates
and/or approvals. Our Directors believe that the non-renewal of any of these licenses, certificates and/or
approvals will not have a material impact on the results of operations and financial position of our Group
for the reasons set out below.

Licence to warehouse goods liable to duty and electrical installation licence
In the event we are unable to renew our licence to warehouse goods liable to duty, we may lease
third-party bonded warehouses to store our dutiable automobiles. Similarly, we may relocate to
other premises possessing an electrical installation licence should our electrical installation licence
not be renewed. Our Directors are of the view that rental expenses of such warehouses and/or
premises are not expected to have a material impact on the result of operations and financial
position of our Group.

License to deal in explosives
Such licence is required to enable us to handle airbags (which are categorised as explosives). In
the event the licence is not renewed, we will be prohibited from selling and installing airbags for
our customers’ automobiles. As the sale of airbags forms an insignificant portion of our Group’s
revenue and profits, our Directors are of the view that the loss of the licence would have a minimal
impact on the result of operations and financial position of our Group.
110

General licenses for automobile test-drive and trial
We require the general licence for two (2) purposes.
As part of our Group’s quality control measures, we will conduct inspections, checks, as well
as test-drive a new automobile prior to registration and delivery of the automobile. The test
drive is conducted on public roads. An unregistered automobile is not permitted to be driven on
public roads save and except with a general licence for test-drive and trial. If the condition of the
automobile is found to be satisfactory, we will proceed to register and deliver the automobile. In
the event we are unable to renew the general licence, we will still comply with our quality control
process by registering a new automobile prior to the test-drive. Our Directors are of the view that
such changes to our quality control process is not expected to have any material impact on the
result of operations and financial position of our Group.
Having a general licence also allows us to obtain motor insurance coverage for accidents involving
an automobile operated under the general licence. In respect of automobiles that we repair, we
would usually test-drive such automobiles after repair. In the event that an accident occurs during
such test-drive, having a general license and thus, a motor insurance taken up by our Group, would
allow us to claim on our own motor insurance instead of our customers’ insurance policies. If the
general licence is not renewed, then instead of taking out insurance under the general licence, we
may increase the insurance coverage for our employees, who are tasked to drive the automobiles.
Our Directors are of the view that the premium payable for such increase in insurance coverage
is not expected to have a material impact on the result of operations and financial position of our
Group.
111
INTERESTED PERSON TRANSACTIONS
In general, transactions between our Group and any of our interested persons (namely, the Directors,
CEO or Controlling Shareholders of our Company or the associates of such Directors, CEO or Controlling
Shareholders) are known as interested person transactions. The following discussion sets out our
material interested person transactions for the last three (3) financial years ended FY2013, for the period
ended 30 June 2013 and for the period from 1 July 2013 up to the Latest Practicable Date (Collectively,
the “Relevant Period”).
Save as disclosed in this Offer Document, there are no transactions undertaken between our Group and
any of our Directors, CEO, Controlling Shareholders or their respective associates during the Relevant
Period which are material in the context of the Invitation.
PAST INTERESTED PERSON TRANSACTIONS
Acquisition and Disposal of Shares in Brickfree
Brickfree was incorporated on 11 December 2007 in Singapore under the Companies Act as a private
limited company. Brickfree is in the business of marketing, training and recruitment through an online IT
platform. Goh Kim Siew, a sibling of our Executive Directors, Melvin Goh and Andy Goh, was the major
shareholder of Brickfree. In August 2011, Eurosports Auto subscribed for 500,000 new ordinary shares,
representing 10.0% of the total issued shares of Brickfree on an enlarged basis, for a consideration of
S$500,000.
Our Directors are of the view that the aforesaid transaction was not entered into on an arm’s length basis
and was not based on normal commercial terms. The consideration was based on negotiations between
the parties and not based on any independent valuation. The transaction was made for investment
purposes.
Subsequently, as part of the Restructuring Exercise to dispose of our non-luxury lifestyle businesses,
we have on 30 September 2012 disposed of the 500,000 ordinary shares in Brickfree to Melvin Goh at
a cash consideration of S$500,000. The consideration for the disposal was fully settled. Our Directors
are of the view that the aforesaid transaction was not entered into on an arm’s length basis and was not
on normal commercial terms. The consideration was based on negotiations between the parties and not
based on any independent valuation.
We do not intend to enter into such transactions after our listing on Catalist.
Disposal of shares in E-Elements
E-Elements was incorporated on 21 September 2006 in Singapore as a private limited company,
which was engaged in the restaurant business. EuroSports Auto had previously acquired 15,000 new
ordinary shares for a consideration of S$15,000, representing five per cent. (5.0%) of the share capital in
E-Elements on an enlarged basis, with the remaining shareholding held by entities or persons unrelated
to the Directors or Controlling Shareholders. E-Elements became a dormant company and ceased to own
any asset or business of any value since 2008.
On 12 September 2012, as part of the Restructuring Exercise to dispose of our non-luxury lifestyle
businesses, we transferred the 15,000 ordinary shares in E-Elements to Andy Goh at a nominal
consideration. Our Directors are of the view that this transaction was entered into on an arm’s length
basis and was based on normal commercial terms. The amount invested by EuroSports Auto
in E-Elements was written off as the amount invested was deemed not recoverable, taking into
consideration that E-Elements was a dormant company with a negative NAV at the time of the disposal.
We do not intend to enter into such transactions after our listing on Catalist.
112
Automobiles held on trust by our Executive Directors
During the Relevant Period, we have purchased and registered one (1) unit of BMW M Coupe MT and
one (1) unit each of BMW X6M and Toyota Alphard under the names of Melvin Goh and Andy Goh
respectively. These automobiles were provided to our customers for their use, as a gesture of courtesy
on our part, while their automobiles are being serviced or repaired by us and/or for general use of our
Group. Our Directors are of the view that the aforesaid arrangements were not entered into on an arm’s
length basis and were not based on normal commercial terms, as no fee was paid or payable to our
Executive Directors for the aforesaid arrangements. We do not intend to enter into such transactions with
our Executive Directors after our listing on Catalist.
The Toyota Alphard, together with its registration number, has since been transferred to our Group. In
November 2012, the BMW M Coupe MT was sold to Melvin Goh at a consideration of S$187,000, which
was the net book value of the automobile as at 31 October 2012. In the same month, the BMW X6M was
sold to Andy Goh at a consideration of S$247,463, which was the net book value of the automobile as at
1 November 2012. Our Directors are of the view that such transactions were not entered into on an arm’s
length basis and were not based on normal commercial terms as no reference was made to any market
price.
As at the Latest Practicable Date, all amounts due from our Executive Directors under the aforesaid
transactions have been fully settled. We do not intend to enter into such transactions after our listing on
Catalist.
Sale of automobiles to our Executive Director
In March 2011, EuroAutomobile sold one (1) new unit of Alfa Romeo Mito to Andy Goh at a consideration
of S$100,000. Our Directors are of the view that this transaction was not entered into on an arm’s length
basis and was not based on normal commercial terms, as the selling price was at a discount to the
prevailing market value.
As at the Latest Practicable Date, all amounts due from Andy Goh under the aforesaid transaction have
been fully settled. We may enter into such transactions with our Executive Directors and their associates
after our listing on Catalist. Such transactions will be conducted on an arm’s length basis and will be
subject to such guidelines as described in the section entitled “Interested Person Transactions – Review
Procedures for Future Interested Person Transactions” of this Offer Document and Chapter 9 of the
Catalist Rules.
Sale of watches to our Executive Directors
During the Relevant Period, we sold four (4) pieces of deLaCour watches to Melvin Goh at an aggregate
consideration of S$36,000, representing the costs of such watches. Further, we sold one (1) piece of
deLaCour watch to Andy Goh at a staff price of S$2,862. Accordingly, our Directors are of the view
that these transactions were not entered into on an arm’s length basis and were not based on normal
commercial terms.
transactions have been fully settled. We may enter into such transactions with our Executive Directors
and their associates after our listing on Catalist. Such transactions will be conducted on an arm’s length
basis and will be subject to such guidelines as described in the section entitled “Interested Person
Transactions – Review Procedures for Future Interested Person Transactions” of this Offer Document and
Chapter 9 of the Catalist Rules.
113
Advances to our Executive Directors
Our Group had in the past granted advances to our Executive Directors arising from the payments made
for their personal expenses. These advances were interest-free, unsecured and had no fixed terms of
repayment. Accordingly, these transactions were not entered into on an arm’s length basis and were not
based on normal commercial terms. The aggregate advances granted by our Group to our Executive
Directors during the Relevant Period were as follows:
Largest
amount
outstanding
during the
Relevant Period
(S$’000)
FY2011
(S$’000)
FY2012
(S$’000)
FY2013
(S$’000)
1Q2014
(S$’000)
As at the
Latest
Practicable
Date
(S$’000)
Melvin Goh
792
2,931
1,247
–
–
899
Andy Goh
469
2,021
1,067
–
–
556
As at the Latest Practicable Date, all amounts due from our Executive Directors have been fully settled.
We do not intend to grant advances to interested persons of our Group after our listing on Catalist.
Advance from Melvin Goh
Melvin Goh had on 4 October 2013 granted an advance of S$150,000 to our Group for working capital
purposes. The loan was interest-free, unsecured and had no fixed term of repayment. Accordingly, our
Directors are of the view that the loan was not entered into on an arm’s length basis and was not on
normal commercial terms, but was not prejudicial to the interests of our Group.
As at the Latest Practicable Date, all amounts due to Melvin Goh have been fully settled. We do not
intend to obtain advances from interested persons of our Group after our listing on Catalist.
Provision of accommodation to Andy Goh and his associates
We had on 15 September 2007 entered into a tenancy agreement with a third party for a residential
accommodation for a period of two (2) years at a monthly rental of S$8,500. The tenancy agreement was
subsequently renewed for a further period of one (1) year at a monthly rental of S$7,000. In FY2011, we
had provided the accommodation for Andy Goh and his family and the aggregate monthly rentals paid
by our Group on behalf of Andy Goh for such period amounted to S$28,000 (for the period from April
2010 to July 2010). Our Directors believe that the transaction was not conducted on an arm’s length
basis and was not on normal commercial terms, as no rental was paid by Andy Goh for such provision of
accommodation.
This was a one-off transaction and we do not intend to provide such accommodation to interested
persons of our Group after our listing on Catalist.
Provision of personal guarantees by our Executive Directors
Our Executive Directors had provided personal guarantees in respect of our Group’s obligations under a
banking facility granted to our Group, details of which are set out below.
Financial institution/
Lender
Malayan Banking Berhad
Type of facilities
Amount of
facilities
granted and
guaranteed
(S$’000)
Facilities
granted to
Largest
amount
outstanding
during the
Relevant Period
(S$’000)(1)
Term Loan
9,182
EuroSports Auto
4,663
Note:
(1)
This is computed based on month-end balances.
114
The interest rates for the aforesaid facility during the Relevant Period were between 5.3% and 6.3% per
annum.
As at the Latest Practicable Date, the above facility had been terminated and the guarantees provided by
our Executive Directors had been discharged.
Our Executive Directors charged a monthly fee at the rate of six per cent. (6.0%) per annum on the
amount of the facility guaranteed for the provision of the personal guarantees. The payments of fees
to our Executive Directors for the provision of personal guarantees have ceased since FY2012. Please
refer to the section entitled “Interested Person Transactions – Present and On-going Interested Person
Transactions – Provision of personal guarantees by our Executive Directors” of this Offer Document for
further details. Accordingly, our Directors are of the view that the transactions were not carried out on an
arm’s length basis and were not on normal commercial terms.
Our Directors do not intend to charge such fees for the provision of personal guarantees after our listing
on Catalist.
Disposal of car registration numbers to our Executive Directors
On 10 December 2012, our Group has disposed three (3) car registration numbers to our Executive
Directors at an aggregate consideration of S$45,600. Our Directors are of the view that the aforesaid
arrangements were not entered into on an arm’s length basis and were not based on normal commercial
terms, as the disposal was based on the book value of these car registration numbers and not based on
any market valuation.
transactions have been fully settled. We do not intend to enter into such transactions with our Executive
Directors after our listing on Catalist.
Transactions involving EC, ESE and/or JH Italia
EC is a company incorporated in Malaysia, which is in the business of automobile trading in Malaysia.
EC is currently the dealer of Lamborghini automobiles in Malaysia authorised by the Lamborghini
Manufacturer. EC is held by entities or persons unrelated to the Directors, CEO or Controlling
Shareholders.
During the Relevant Period, EC appointed ESE to retail the Lamborghini automobiles imported into
Malaysia. Melvin Goh has a direct interest in 65.0% of the share capital of ESE and is a director of ESE.
In February 2011, EC ceased the appointment of ESE and appointed JH Italia to retail Lamborghini
automobiles in Malaysia. Melvin Goh has an indirect interest in 30.0% of the share capital of JH Italia.
ESE has become dormant since February 2011 and the shareholders of ESE intend to liquidate ESE in
due course. We do not intend to enter into any transactions with ESE after our listing on Catalist.
Based on the above, ESE and JH Italia were during the Relevant Period considered an “interested
person” for the purposes of Chapter 9 of the Catalist Rules and transactions entered into between our
Group and ESE or JH Italia constitute “interested person transactions” under Chapter 9 of the Catalist
Rules.
Melvin Goh has on 17 November 2013 disposed of his interest in JH Italia to Wang Yen Liang, an existing
shareholder of JH Italia. Following the disposal of his shareholding interest in JH Italia by Melvin Goh, JH
Italia will be held by entities or persons unrelated to the Directors, CEO or Controlling Shareholders, and
will not be considered an “interested person”. Accordingly, the transactions between our Group and JH
Italia will not constitute “interested person transactions” and will not be subject to the relevant guidelines
as described in the section entitled “Interested Person Transactions – Review Procedures for Future
Interested Person Transactions” of this Offer Document and the relevant provisions under Chapter 9 of
the Catalist Rules.
115
Sales of automobile parts and accessories and provision of ancillary handling services to ESE and JH
Italia
During the Relevant Period, we had sold automobile parts and accessories and had provided ancillary
handling services to ESE and/or JH Italia, for which we charged a fee. Such fees were determined based
on an agreed mark-up on the cost of the items.
The aggregate value of the sales of automobile parts and accessories to ESE and/or JH Italia and the
aggregate handling fees paid by ESE and/or JH Italia to our Group during the Relevant Period were as
follows:
FY2011
(S$’000)
FY2012
(S$’000)
FY2013
(S$’000)
1Q2014
(S$’000)
From 1 July 2013
to the Latest
Practicable Date
(S$’000)
Sales of automobile parts
and accessories
181
193
77
1
3
Handling fees
16
15
46
–
8
The selling prices of automobile parts and accessories, and the handling fees were based on
negotiations between the parties and no reference was made to any third party rates. Our Directors are of
the view that the aforesaid transactions were not entered into on an arm’s length basis and were not on
normal commercial terms.
We may enter into such transactions with JH Italia after our listing on Catalist. Our Audit Committee will
review such transactions with JH Italia, if any, at least half yearly.
Funding support provided by our Group to EC
We have been providing funding support to EC by making payment, for and on behalf of EC, of the cost
of purchase of the ordered Lamborghini automobiles to the Lamborghini Manufacturer, for orders for
Lamborghini automobiles placed by EC and any ancillary charges. We charged a fee for the provision of
such funding support, which was largely determined based on an agreed mark-up, taking into account
various commercial factors such as automobile models and specifications, saleability and demand. Based
on annual average rates over FY2011 – FY2013, the fees charged by us for the provision of funding
support to EC ranged between approximately four per cent (4.0%) and seven per cent (7.0%) of the
costs of purchase of the ordered Lamborghini automobiles and ancillary charges relating thereto. EC had
directed ESE or JH Italia to make such payments to EuroSports Auto.
The aggregate amounts payable by EC (including costs of purchase and late payment interests) to our
Group during the Relevant Period were as follows:
Amounts payable by EC
(including costs of purchase
and late payment interests)
FY2011
(S$’000)
FY2012
(S$’000)
FY2013
(S$’000)
1Q2014
(S$’000)
From 1 July 2013
to the Latest
Practicable Date
(S$’000)
990
8,035
15,294
528
4,914
Our Directors are of the view that the aforesaid arrangements were not entered into on an arm’s length
basis and were not on normal commercial terms. The fee was based on negotiations between the parties
and no reference was made to any third party rates. The fee payable by EC was determined based on
commercial reasons, taking into account various factors such as the automobile models, demand and
profit margin to be earned by EC from the sale of the automobiles.
The aforesaid funding support arrangements have ceased as at the Latest Practicable Date and all
amounts payable by EC will be fully settled prior to our listing on Catalist.
116
Purchase of automobiles by our Group from JH Italia
We had during the Relevant Period purchased automobile(s) from JH Italia. The aggregate values of the
purchases of automobiles from JH Italia during the Relevant Period was as follows:
Purchase of automobiles from
JH Italia
FY2011
(S$’000)
FY2012
(S$’000)
FY2013
(S$’000)
1Q2014
(S$’000)
From 1 July 2013
to the Latest
Practicable Date
(S$’000)
–
165
–
1,166
–
We purchased the automobiles from JH Italia at cost. Accordingly, our Directors are of the view that
the aforesaid transactions were not entered into on an arm’s length basis and were not on normal
commercial terms, but were not prejudicial to the interests of our Group.
We may enter into such transactions with JH Italia after our listing on Catalist. Our Audit Committee will
review such transactions with JH Italia, if any, at least half yearly.
Lease of automobile to ESE
Our Group had during the Relevant Period leased one (1) unit of Alfa Romeo automobile to ESE, who
had, in turn, leased the automobile to a Malaysian individual. The aggregate rental payments made by
ESE to our Group during the Relevant Period were as follows:
Rental payments made by ESE
FY2011
(S$’000)
FY2012
(S$’000)
FY2013
(S$’000)
1Q2014
(S$’000)
From 1 July 2013
to the Latest
Practicable Date
(S$’000)
48
22
–
–
–
Our Directors are of the view that this transaction was entered into on an arm’s length basis and was
based on normal commercial terms, as the rental was based on market rates. The lease arrangement
has since expired.
We do not intend to enter into any transactions with ESE after our listing on Catalist.
Transactions involving PT EuroSport
PT EuroSport is a company incorporated in Indonesia, which is in the business of automobile trading
in Indonesia. PT EuroSport is the dealer of Lamborghini automobiles in Indonesia authorised by the
Lamborghini Manufacturer. Melvin Goh has an indirect interest in 40.0% of the share capital of PT
EuroSport. Accordingly, PT EuroSport was, during the Relevant Period, considered an “interested person”
for the purposes of Chapter 9 of the Catalist Rules and transactions entered into between our Group and
PT EuroSport constitute “interested person transactions” under Chapter 9 of the Catalist Rules.
Melvin Goh has on 2 December 2013 entered into a sale and purchase agreement to dispose of his
interest in PT EuroSport to View Good Enterprise Ltd (a British Virgin Islands company owned collectively
by Jake Pison Hawila, an existing shareholder of PT EuroSport, and Jacky Prasetyo Lie in equal shares).
Melvin Goh will procure that PT EuroSport commences the name change and ceases to use the mark
“EuroSport” following the disposal of his shareholding interest in PT EuroSport. We understand that
PT EuroSport is required to reserve the proposed new company name and hold a general meeting of
shareholders to approve the name change, which will be followed by approvals from the Indonesian
Investment Coordinating Board and the Indonesian Ministry of Law and Human Rights. The entire name
change process typically takes around 2 to 3 months.
117
Following the disposal of his shareholding interest in PT EuroSport by Melvin Goh, PT EuroSport will
be held by entities or persons unrelated to the Directors, CEO or Controlling Shareholders and will not
be considered an “interested person”. Accordingly, the transactions below between our Group and PT
EuroSport will not constitute “interested person transactions” and will not be subject to the relevant
guidelines as described in the section entitled “Interested Person Transactions – Review Procedures for
Future Interested Person Transactions” of this Offer Document and the relevant provisions under Chapter
9 of the Catalist Rules.
Sales of automobile parts and accessories and provision of ancillary handling services to PT EuroSport
During the Relevant Period, we had sold automobile parts and accessories and had provided ancillary
handling services to PT EuroSport, for which we charged a fee. Such fees were determined based on an
agreed mark up on the cost of the items.
The aggregate value of the sale of automobile parts and accessories to PT EuroSport and the aggregate
handling fees paid by PT EuroSport to our Group during the Relevant Period were as follows:
FY2011
(S$’000)
Sales of automobile parts and
accessories
Handling fees
–(1)
15
FY2012
(S$’000)
FY2013
(S$’000)
1Q2014
(S$’000)
From 1 July 2013
to the Latest
Practicable Date
(S$’000)
24
5
3
76
22
45
–
–
Note:
(1)
Amount is less than S$1,000.
The selling prices of automobile parts and accessories, and the handling fees were based on
negotiations between the parties and no reference was made to any third party rates. Our Directors are of
the view that the aforesaid transactions were not entered into on an arm’s length basis and were not on
normal commercial terms.
We may enter into such transactions with PT EuroSport after our listing on Catalist. Our Audit Committee
will review such transactions with PT EuroSport, if any, at least half yearly.
Funding support provided by our Group to PT EuroSport
We have been providing funding support to PT EuroSport by making payment, for and on behalf of PT
EuroSport, of mainly the cost of purchase of the ordered Lamborghini automobiles to the Lamborghini
Manufacturer, for orders for Lamborghini automobiles placed by PT EuroSport and any ancillary charges.
Similarly, we charged a fee for the provision of such funding support, which was largely determined
based on an agreed mark-up, taking into account various commercial factors such as automobile models
and specifications, saleability and demand. Based on annual average rates over FY2011 – FY2013, the
fees charged by us for the provision of funding support to PT EuroSport ranged between approximately
seven per cent (7.0%) and 10.0% of the costs of purchase of the ordered Lamborghini automobiles and
ancillary charges relating thereto.
The aggregate amounts payable by PT EuroSport (including costs of purchase) to our Group during the
Relevant Period were as follows:
Amounts payable by PT
EuroSport (including costs
of purchase)
FY2011
(S$’000)
FY2012
(S$’000)
FY2013
(S$’000)
1Q2014
(S$’000)
From 1 July 2013
to the Latest
Practicable Date
(S$’000)
68
2,945
13,162
3,935
12,200
118
Our Directors are of the view that the aforesaid transactions were not entered into on an arm’s length
basis and were not on normal commercial terms. The fee was based on negotiations between the parties
and no reference was made to any third party rates. The fee payable by PT EuroSport was determined
based on commercial reasons, taking into account various factors such as the automobile models,
demand and profit margin to be earned by PT EuroSport from the sale of the automobiles.
The aforesaid funding support arrangements have ceased as at the Latest Practicable Date and all
amounts payable by PT EuroSport will be fully settled prior to our listing on Catalist.
Guarantees provided by our Executive Directors in respect of the obligations of EuroSports Auto
owed to the Lotus Manufacturer pursuant to the Lotus Agreement
Each of our Executive Directors, Melvin Goh and Andy Goh, had given a continuing joint and several
guarantee for, inter alia, the payment to the Lotus Manufacturer by EuroSports Auto of all monies falling
due for payment under the Lotus Agreement and the performance by EuroSports Auto of all obligations
arising under the Lotus Agreement. The amounts guaranteed during the Relevant Period were not
material as all purchases of automobiles from the Lotus Manufacturer were conducted on a cash on
delivery basis. The Lotus dealership had expired as of 31 March 2013 and was not renewed by the
parties.
There were no fees paid to Melvin Goh and Andy Goh for providing the continuing guarantee.
Accordingly, our Directors are of the view that this transaction is not carried out on an arm’s length basis
and is not on normal commercial terms, but is not prejudicial to the interests of our Group.
Provision of undertaking by Melvin Goh in respect of the call option relating to E’ Collezione
We have on 17 January 2013 entered into the call option agreement relating to E’ Collezione with the
shareholders of E’ Collezione, pursuant to which we were granted an option to acquire 70.0% of the
issued and paid-up share capital of E’ Collezione. In connection with the call option agreement, Melvin
Goh has undertaken to the shareholders of E’ Collezione that in the event we do not exercise the call
option by the expiry of the stipulated option period, he will pay to the shareholders of E’ Collezione a
compensation. Nevertheless, we have decided not to exercise the call option, which lapsed as of 30 June
2013. The shareholders of E’ Collezione have since refunded to us the deposit which was previously
paid pursuant the call option agreement. No compensation was paid by Melvin Goh pursuant to such
undertaking.
Our Directors are of the view that the aforesaid arrangement was not entered into on an arm’s length
basis and was not based on normal commercial terms, as no fee was paid or payable to Melvin Goh for
the provision of such undertaking.
PRESENT AND ON-GOING INTERESTED PERSON TRANSACTIONS
Guarantees provided by our Executive Director and Deputy CEO, Andy Goh, in respect of the
obligations of EuroAutomobile owed to the Alfa Romeo Manufacturer pursuant to the Alfa Romeo
Agreement
Our Executive Director and Deputy CEO, Andy Goh, has given a personal continuing guarantee for, inter
alia, the performance by EuroAutomobile of all obligations arising under the Alfa Romeo Agreement. The
largest aggregate amount guaranteed was less than €30,000 during the Relevant Period.
There were no fees paid to Andy Goh for providing the continuing guarantee. Accordingly, our Directors
are of the view that this transaction is not carried out on an arm’s length basis and is not on normal
commercial terms, but is not prejudicial to the interests of our Group.
119
Provision of personal guarantees by our Executive Directors
As at the Latest Practicable Date, our Executive Directors, Melvin Goh and Andy Goh, have provided
personal guarantees in respect of our Group’s obligations under certain banking and trade facilities
granted to our Group, details of which are set out below.
Amount of
facilities
granted and
guaranteed
(S$’000)
Largest amount
outstanding
based on
month-end
balances during
the Relevant
Period
(S$’000)
Amount
outstanding as
at the Latest
Practicable Date
(S$’000)
25,461
23,783
20,443
Dealer’s stock facility
8,000
3,952
–
The Bank of East Asia
Floor stock facility and
invoice financing facility
4,000
1,900
103
Oversea-Chinese Banking
Corporation Limited
Overdraft, term loan,
letters of credit, trust
receipts, draft loans
(purchaser), shipping
guarantee/airway bills
and foreign exchange
9,000
3,679
2,681
Floor stock facility
2,000
1,996
913
Financial institution /
Lender
United Overseas Bank
Limited
Type of facilities
Trade facilities,
consisting of letters
of credit, trust receipts
and foreign exchange
transactions or contracts
and performance
guarantee
Blanket hire purchase
facility and floor stocking
facility
10,000
4,028
3,940
Hong Leong Finance
Limited
Working capital line
including letter of credit,
shipping guarantee and
import documents
2,500
1,625
–
Hong Leong Finance
Limited
Working capital line
including letter of credit,
shipping guarantee,
invoice financing and
import duties financing
3,000
1,148
–
The interest rates for the aforesaid facilities during the Relevant Period were between approximately 1.3%
and 7.3% per annum.
Our Executive Directors charged a monthly fee at the rate of six per cent. (6.0%) per annum on the
amount of the respective facilities guaranteed for the provision of the personal guarantees. Accordingly,
our Directors are of the view that the transactions are not carried out on arm’s length basis and are not
on normal commercial terms.
120
The aggregate amounts of fees paid by our Group to our Executive Directors in connection with the
provision of personal guarantees during the Relevant Period were as follows:
Fees for provision of personal
guarantees
FY2011
(S$’000)
FY2012
(S$’000)
FY2013
(S$’000)
1Q2014
(S$’000)
From 1 July 2013
to the Latest
Practicable Date
(S$’000)
134
–
–
–
–
The payments of fees to our Executive Directors for the provision of personal guarantees have ceased
since FY2012. We do not intend to enter into such transactions with our Executive Directors after our
listing on Catalist.
In addition, we have been granted hire purchase facilities by various financial institutions in respect of
purchase of automobiles. As at the Latest Practicable Date, details of our hire purchase facilities were as
follows:
Financial institution / Lender
Largest amount outstanding
based on month-end balances
during the Relevant Period
(S$’000)
Amount outstanding as at
the Latest Practicable Date
(S$’000)
United Overseas Bank Limited
703
–
Hong Leong Finance Limited
879
382
2,261
–
Sing Investment Limited
1,098
–
Singapura Finance Limited
923
–
Others
268
–
During the Relevant Period, there is no guarantor fee paid to our Executive Directors for the provision of
personal guarantees in respect of such hire purchase facilities. Accordingly, our Directors are of the view
that the transactions are not carried out on arm’s length basis and are not on normal commercial terms.
During the Relevant Period, the largest amount guaranteed by our Executive Directors amounted to an
aggregate of S$38.11 million, of which S$33.98 million comprises the largest amount guaranteed by our
Executive Directors in respect of bank facilities and trade financing, and S$4.13 million comprises the
largest amount guaranteed by our Executive Directors in respect of hire purchase facilities.
Upon the listing of our Company on the Catalist, we intend to request for a discharge of the guarantees
provided to the aforesaid financial institutions and replace them with corporate guarantees provided by
our Group. Our Directors do not expect any material change in the terms and conditions of the relevant
credit facilities arising from the discharge of the personal guarantees. Should any of the financial
institutions disagree with the release and we fail to secure alternative facilities on terms similar to those
applicable to our existing facilities, our Executive Directors have undertaken to continue the provision of
personal guarantees.
Indemnity provided by our Executive Directors in respect of the automobiles ordered from GTA
Spain
We have entered into a heads of agreement with GTA Spain on 22 September 2012, details of which
are set out in the section entitled “General Information on Our Group – Our Distributorship and
Dealership Arrangements – New Automobile Distributorship with GTA Spain” of this Offer Document.
We had, pursuant to the heads of agreement, made a deposit payment of €1.20 million (equivalent to
approximately S$1.90 million) to GTA Spain for five (5) units of GTA Spano.
121
Our Executive Directors, namely Melvin Goh and Andy Goh, have on 18 November 2013 executed a
deed of indemnity in favour of our Group, pursuant to which Melvin Goh and Andy Goh have undertaken,
inter alia, that they will pay to our Group, on a joint and several basis, all deposits and monies paid by our
Group to GTA Spain in connection with the GTA automobiles remaining undelivered, in the event of the
following:
(a)
GTA Spain failing to deliver the ordered GTA automobiles by 31 March 2015 and failing to refund
the deposits and all monies paid by our Group to GTA Spain in connection therewith, in full, to the
Group; or
(b)
the winding up, dissolution, insolvency, bankruptcy or judicial management of GTA Spain or any
equivalent or analogous proceedings under any applicable law of jurisdiction,
Our Directors are of the view that the aforesaid arrangement was not entered into on an arm’s length
basis and was not based on normal commercial terms, as no fee was paid or payable to Melvin Goh and
Andy Goh for the provision of such indemnity.
REVIEW PROCEDURES FOR FUTURE INTERESTED PERSON TRANSACTIONS
All future interested person transactions will be properly documented and submitted to our Audit
Committee for periodic review to ensure that they are carried out on an arm’s length basis, on normal
commercial terms and will not be prejudicial to the interests of our minority Shareholders. Our Audit
Committee will adopt the following procedures when reviewing interested person transactions.
In relation to any purchase of products or procurement of services from interested persons, successful
quotes from at least two (2) unrelated third parties in respect of the same or substantially the same type
of transactions will be used as a comparison wherever possible. The purchase price or procurement
price shall not be higher than the most competitive price of the two (2) comparative prices from the two
(2) unrelated third parties. Our Audit Committee will review the comparables, taking into account, the
suitability, quality and cost of the product or service, and the experience and expertise of the supplier.
In relation to any sale of products or provision of services to interested persons, the price and terms
of two (2) other completed transactions of the same or substantially the same type of transactions to
unrelated third parties are to be used as comparison wherever possible. The interested persons shall not
be charged at rates lower than that charged to the unrelated third parties.
When renting properties from or to an interested person, our Audit Committee shall take appropriate
steps to ensure that such rent is commensurate with the prevailing market rates, including adopting
measures such as making relevant enquiries with landlords of similar properties and obtaining suitable
reports or reviews published by property agents (as necessary), including independent valuation report
by property valuer, where appropriate. The rent payable shall be based on the most competitive market
rental rate of similar properties in terms of size and location, based on the results of the relevant
enquiries.
All interested person transactions above S$100,000 are to be approved by a member of our Audit
Committee, who shall not be an interested person in respect of the particular transaction. All interested
person transactions below S$100,000 are to be approved by our CFO or such other senior executive(s) of
our Company designated by our Audit Committee from time to time for such purpose.
Any contracts to be made with an interested person shall not be approved unless the pricing is
determined in accordance with our usual business practices and policies, consistent with the usual
margin given or price received by us for the same or substantially similar type of transactions between
us and unrelated parties and the terms are no more favourable than those extended to or received from
unrelated parties.
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In addition, we shall monitor all interested person transactions entered into by us by categorising the
transactions as follows:
(a)
a “category one” interested person transaction is one where the value thereof is equal to or in
excess of three per cent. (3.0%) of the NTA of our Group; and
(b)
a “category two” interested person transaction is one where the value thereof is below three per
cent. (3.0%) of the NTA of our Group.
“Category one” interested person transactions must be approved by our Audit Committee prior to entry.
“Category two” interested person transactions need not be approved by our Audit Committee prior to
entry but shall be reviewed on a quarterly basis by our Audit Committee.
In the event that it is not possible for appropriate information (for comparative purposes) to be
obtained, our Audit Committee will determine whether the price, fees and/or the other terms offered by
or to the interested persons are fair and reasonable, and approve such interested person transaction.
In so determining, our Audit Committee will consider whether the price, fees and/or other terms is in
accordance with usual business practices and pricing policies and consistent with the usual margins
and/or terms to be obtained for the same or substantially similar types of transactions to determine
whether the relevant transaction is undertaken at an arm’s length basis and on normal commercial terms.
In the event that a member of our Audit Committee is interested in any interested person transaction, he
will abstain from deliberating, reviewing and/or approving that particular transaction.
We shall maintain a register to record all interested person transactions which are entered into by our
Group, including any quotations obtained from unrelated parties to support the terms of the interested
person transactions. We shall also incorporate into our internal audit plan a review of all interested person
transactions entered into by our Group.
Our Audit Committee will review all interested person transactions, if any, at least quarterly to ensure that
they are carried out on an arm’s length basis and normal commercial terms, are not prejudicial to the
interests of our Group and/or minority Shareholders and in accordance with the procedures set out above
and that prevailing rules and regulations of the SGX-ST (in particular, Chapter 9 of the Catalist Rules)
are complied with. It will take into account all relevant non-quantitative factors. In the event that such
interested person transactions require the approval of our Board of Directors and our Audit Committee,
relevant information will be submitted to our Board of Directors and our Audit Committee for review. In
the event that such interested person transactions require the approval of our Shareholders, additional
information may be required to be presented to Shareholders and an independent financial adviser may
be appointed for an opinion. Further, if during these periodic reviews, our Audit Committee believes
that the guidelines and procedures set out above are not sufficient to ensure that interests of minority
Shareholders are not prejudiced, we will adopt new guidelines and procedures. Our Audit Committee may
request for an independent financial adviser’s opinion as it deems fit.
We shall ensure that all interested person transactions comply with the provisions in Chapter 9 of the
Catalist Rules, and if required, we will seek independent Shareholders’ approval for such transactions.
In accordance with Rule 919 of the Catalist Rules, interested persons and their associates shall abstain
from voting on resolutions approving interested person transactions involving themselves and our Group.
In addition, such interested persons shall not act as proxies in relation to such resolutions unless voting
instructions have been given by the Shareholder(s).
Our Board will ensure that all disclosure, approval and other requirements on interested person
transactions, including those required by prevailing legislation, the Catalist Rules and accounting
standards, are complied with.
123
POTENTIAL CONFLICTS OF INTEREST
All our Directors have a duty to disclose their interests in respect of any transaction in which they have
any personal material interest or any actual or potential conflicts of interest (including a conflict that arises
from their directorship or employment or personal investment in any corporation). Upon such disclosure,
such Directors will not participate in any proceedings of the Board and shall abstain from voting in
respect of any such transaction where the conflict arises.
Each of our Executive Directors, Melvin Goh and Andy Goh, is or was interested or holds or held
directorships in certain entities as described below.
(a)
Melvin Goh has a direct interest in 65.0% of the share capital of ESE and is a director of ESE. ESE
is currently dormant and the shareholders of ESE intend to liquidate ESE in due course.
(b)
Melvin Goh and Andy Goh are shareholders and directors of Gay Hin Enterprise. Gay Hin
Enterprise is currently dormant, and Melvin Goh and Andy Goh are in the process of procuring the
shareholders’ consent to liquidate Gay Hin Enterprise.
For the reasons stated above and the undertakings contained in the Service Agreements of Melvin Goh
and Andy Goh described in further detail below, we are of the view that there is no potential conflict of
interests.
Pursuant to the Service Agreements for Melvin Goh and Andy Goh, details of which are set out in
the section entitled “Directors, Executive Officers and Employees – Service Agreements” of this Offer
Document, each of them had undertaken to our Company that, save with the express consent of our
Company:
(a)
he will not, and will procure that his associates will not, either on his or his associates’ account
or in conjunction with or on behalf of any person, firm or company carry on or be engaged,
concerned or interested directly or indirectly in, within any country in which our Group carries on
business, whether as shareholder, director, employee, partner, agent or otherwise, any business
in competition with the business of our Group carried on prior to the date he ceases to be an
employee of our Company (other than as a holder of not more than five per cent. (5.0%) of the total
issued shares or debentures of any company listed on any recognised stock exchange provided
that he does not or shall not participate in or is otherwise involved in the management of such
company);
(b)
he will not, and will procure that his associates will not, either on his or his associates’ account
or in conjunction with or on behalf of any other person, firm or company, solicit or entice away
or attempt to solicit or entice away from our Group the supplier, customer, client, agent or
correspondent of our Group or in the habit of dealing with our Group of any person, firm, company
or organisation who shall at any time prior to the date he ceases to be an employee of our
Company have been a supplier, customer, client, agent or correspondent of our Group or in the
habit of dealing with our Group;
(c)
he will not, and will procure that his associates will not, either on his or his associates’ account or
in conjunction with or through or on behalf of any other person, firm or company, solicit or entice
away or attempt to solicit or entice away from our Group any person who is an officer, manager
or employee of our Group whether or not such person would commit a breach of his contract of
employment by reason of leaving such employment;
(d)
he will not, and will procure that his associates will not, be interested in:
(i)
any business or asset in which any member of our Group was during the initial term of three
(3) years considering to acquire, turn to account, develop or invest, unless our Group shall
have decided against such acquisition, turning to account, development or investment or
invited him or his associates in writing to participate in, or consented to in writing to him
or his associates’ acquisition, turning to account or development of or investment in, such
business or asset; or
124
(ii)
any asset of any member of our Group, unless such asset is offered by the relevant member
of our Group for sale to, turning to account or development by third parties;
(e)
he will not, and will procure that his associates will not, at any time hereafter make use of or
disclose or divulge to any third party any confidential information other than in accordance with the
Service Agreement; and
(f)
he will not, and will procure that his associates will not, at any time hereafter in relation to any
trade, business or company use a name in such a way as to be capable of being or likely to be
confused with the name of our Company and shall use all reasonable endeavours to procure that
no such name shall be used by any person, firm or company with which he or his associates are
connected.
The undertakings above will take effect on the date of listing of our Company on the SGX-ST and shall
terminate upon the happening of any of the following events:
(i)
Melvin Goh and Andy Goh and their associates ceasing to be any of the following: (A) a controlling
shareholder of our Company; and (B) an executive officer, chief executive officer or director of our
Company; or
(ii)
subsequent to the listing of our Company on the SGX-ST, the shares of our Company ceasing to
be listed and traded on the SGX-ST,
Save as disclosed in the sections entitled “Restructuring Exercise” and “Interested Person Transactions”
of this Offer Document:
(a)
none of our Directors, Executive Officers, Controlling Shareholders or any of their associates has
or has had any interest direct or indirect, in any material transactions to which our Company or our
subsidiary was or is a party;
(b)
or has had any interest, direct or indirect, in any company carrying on the same business or a
similar trade which competed or competes materially and directly with the existing businesses of
our Group;
(c)
or has had any interest, direct or indirect, in any company that was or is our customer or supplier of
goods and services; and
(d)
none of our Directors, Executive Officers, Controlling Shareholders or any of their associates
has or has had any interest in any existing contract or arrangement which was or is significant in
relation to the business of our Group.
Interests of Experts
Save as disclosed in the sections entitled “Restructuring Exercise” and “Interested Person Transactions”
of this Offer Document, no expert is interested, directly or indirectly, in the promotion of, or in any
property or assets which have, within the two (2) years preceding the date of this Offer Document, been
acquired or disposed of by or leased to our Company or any of our subsidiaries or are proposed to be
acquired or disposed of by or leased to our Company or any of our subsidiaries.
None of the experts named in this Offer Document:
(a)
is employed on a contingent basis by our Company or any of our subsidiaries;
(b)
has a material interest, whether direct or indirect, in the shares of our Company or our subsidiaries;
or
125
(c)
has a material economic interest, whether direct or indirect, in our Company, including an interest
in the success of the Invitation.
Interests of Sponsor and the Underwriter and Placement Agent
In the reasonable opinion of our Directors, save as disclosed below and in the section entitled “General
and Statutory Information – Management, Underwriting and Placement Arrangements” of this Offer
Document, our Company does not have any material relationship with the Sponsor and the Underwriter
and Placement Agent:
(a)
CIMB is the Sponsor of the Invitation;
(b)
CIMB Securities is the Underwriter and Placement Agent of the Invitation; and
(c)
CIMB will be the continuing Sponsor of our Company for an initial period of three (3) years from the
date our Company is admitted and listed on Catalist.
126
127
Financial Controller
Jamie Nguyen Ha Lan
CFO
Siu Yeung Sau
Deputy CEO
Andy Goh
CEO
Melvin Goh
Board of Directors
Director
(Techncal Support)
Eyu Soon Fatt
The following chart shows our management reporting structure as at the Latest Practicable Date.
MANAGEMENT REPORTING STRUCTURE
Director
(Marketing &
Communications)
Carolyn Ann
Theng May Lin
COO
Dennis Yang Yung Kang
DIRECTORS, EXECUTIVE OFFICERS AND EMPLOYEES
Director (Brand)
Chong Khim Cheng
DIRECTORS
Our Board of Directors is entrusted with the responsibility for the overall management of our Group. Our
Directors’ particulars are listed below:
Name
Age
Address
Occupation
Melvin Goh
57
Singapore 608927
Executive Chairman
and CEO
Andy Goh
53
Singapore 608927
Executive Director and
Deputy CEO
Ng Tiak Soon
64
40 Springleaf Crescent
Springleaf Garden
Singapore 788354
Directorships
Tan Siok Sing (also known
as Calvin Tan Siok Sing)
59
1 North Bridge Road
#16-08 High Street Centre
Singapore 179094
Managing Director of
Ironman Minerals &
Ores Pte. Ltd.
Lim Kim Quee
63
6 Pandan Valley #09-603
Singapore 597630
Consultant
Information on the business and working experience of our Directors are set out below:
Melvin Goh is our Executive Chairman and CEO. He is responsible for our Group’s overall management,
formulating our Group’s strategic focus and direction, developing and maintaining relationships with
our suppliers and customers as well as overseeing our Group’s general operations. He is one of our
co-founders and has been the executive director of our Group since the establishment of EuroSports
Auto in 1998. Prior to the establishment of EuroSports Auto, he was already engaged in the automobile
industry, working as the managing director in Gay Hin Enterprise, the family-owned business of preowned automobile sales. He has substantial senior management experience and more than 30 years of
experience and industry knowledge of the automobile industry. Over the years, he has been instrumental
in the expansion of our Group’s operations and constantly looking for investment opportunities to grow
our Group’s business.
Andy Goh is our Executive Director and Deputy CEO. He assists our CEO in all matters in relation to
our Group’s general management and administration. He is the other co-founder of our Group and has
been the executive director of our Group since the establishment of EuroSports Auto in 1998. Prior to
the establishment of EuroSports Auto, he was already engaged in the automobile industry, working as
the executive director in Gay Hin Enterprise, the family-owned business of pre-owned automobile sales.
He has more than 28 years of experience and industry knowledge of the automobile industry. Over the
years, he has been instrumental in the expansion of our Group’s operations and constantly looking for
investment opportunities to grow our Group’s business.
Ng Tiak Soon was appointed as our Lead Independent Director on 29 Novemebr 2013. He has more
than 30 years of experience in the audit, commercial and industrial sectors. He retired as a senior partner
from Ernst & Young LLP in June 2005. During his employment with Ernst & Young LLP, he held various
positions which include head of banking, head of an audit group, partner in-charge of audit quality
review and chief financial officer. He is a non-practicing member of the Institute of Singapore Chartered
Accountants (formerly the Institute of Certified Public Accountants of Singapore), a member of the
Association of Chartered Certified Accountants, United Kingdom as well as a member of the Singapore
Institute of Directors. He is currently a director of three (3) companies listed on the SGX-ST, namely
Cordlife Group Limited, St. James Holdings Limited and 800 Super Holdings Limited.
128
Tan Siok Sing (Calvin) was appointed as our Independent Director on 29 November 2013. He has
more than 18 years of experience in the financial industry. He started his career in July 1980 with City
Developments Limited, a property development company, as a project and marketing trainee. Thereafter,
he went to The University of Tennessee, USA and graduated with a Masters in Business Administration
in 1984. In October 1985, he joined the then Tsang and Ong Stockbrokers Pte Ltd (later restructured
as Sun Yuan Holdings Pte Ltd) as its executive director and was responsible for establishing in-house
training courses for dealers and remisiers, supervising the research department, and providing advisory
work in merger and acquisition transactions, initial public offerings and corporate finance related
works to various clients and business entities. Subsequently in November 2003, he joined Ei-Nets Ltd
(subsequently known as E3 Holdings Ltd), an information technologies company then listed on the SGXST, as its executive director for two (2) years and was responsible for the company’s corporate finance
development and licensing of patented information technology in PRC. From November 2005 to August
2008, he was an executive director of Regalindo Resources Pte Ltd, an energy resources and minerals
trading company, and spearheaded the trading of Indonesian coal and minerals in the southern PRC’s
regional market. Since August 2008, he has been the managing director of Ironman Minerals & Ores
Pte Ltd, an energy resources and minerals trading company, and he is responsible for the sourcing and
trading of coal and minerals in Indonesia to PRC regional market. He is currently a director of four (4)
companies listed on the SGX-ST, namely Changtian Plastic & Chemical Limited, Li Heng Chemical Fibre
Technologies Limited, Dukang Distillers Holdings Limited and QingMei Group Holdings Limited.
Lim Kim Quee was appointed as our Independent Director on 29 November 2013. He has more than 30
years of experience in the corporate banking industry. He started his career in DBS Group as a project
analyst. Since then, he had held various positions in DBS Group, including vice president of corporate
banking division, general manager of New York Agency, general manager of the Tokyo branch, the
managing director of international department and the CEO of DBS Bank Philippines Inc.. He left DBS
Group and retired as the managing director of corporate credit division in December 2008. He was a
director of two (2) companies listed on the SGX-ST, namely Engro Corporation Limited and NatSteel
Ltd (now known as NSL Ltd.). He obtained a Bachelor of Social Science (Honours) from the National
University of Singapore in 1976.
Our Executive Chairman and CEO, Melvin Goh, and our Executive Director and Deputy CEO, Andy Goh,
are siblings. Save as disclosed, none of our Directors has any familial relationship with another Director or
any Substantial Shareholder or any Executive Officer of our Company.
Pursuant to Rule 406(3)(a) of the Catalist Rules, all of our Independent Directors have prior experience
as directors of public listed companies in Singapore. Melvin Goh and Andy Goh have attended the
relevant seminars conducted by the Singapore Institute of Directors to familiarise themselves with the
rules and responsibilities of a director of a public listed company in Singapore.
129
The list of present and past directorships of each Director over the last five (5) years up to the Latest
Practicable Date, excluding that held in our Company, is set out below:
Name
Present directorships
Past directorships
Melvin Goh
Group Companies
Group Companies
EuroSports Auto
EuroAutomobile
GTA Singapore
deLaCour Singapore
Nil
Other Companies
Other Companies
Gay Hin Enterprise
ES Evolution Sdn. Bhd.
EuroM Automotive Pte. Ltd.
Multigo Realty Investments (S) Pte Ltd
X-Motors Pte. Ltd.
Group Companies
Group Companies
EuroSports Auto
EuroAutomobile
Nil
Other Companies
Other Companies
Gay Hin Enterprise
Poligo Development (S) Pte Ltd
Multigo Realty Investments (S) Pte Ltd
Group Companies
Group Companies
Nil
Nil
Other Companies
Other Companies
Cordlife Group Limited
St. James Holdings Limited
800 Super Holdings Limited
P J Consultants Pte Limited
Jurong Health Fund
Kinergy Ltd.
Wanxiang International Limited
Group Companies
Group Companies
Nil
Nil
Other Companies
Other Companies
Changtian Plastic & Chemical Limited
Dukang Distillers Holdings Limited
Li Heng Chemical Fibre
Technologies Limited
QingMei Group Holdings Limited
Ironman International Inc.
Ironman Minerals & Ores Pte. Ltd.
Shong Sing Pte. Ltd.
The Living Book Schoolhouse Pte. Ltd.
The Living Book (AMK) Pte. Ltd.
Centraland Limited
Centurion Resources Pte. Ltd.
Goldenray Consortium (S) Pte. Ltd.
Regalindo Logistics Pte. Ltd.
Regalindo Mines Pte. Ltd.
Group Companies
Group Companies
Nil
Nil
Other Companies
Other Companies
Nil
Nil
Andy Goh
Ng Tiak Soon
Tan Siok Sing
Lim Kim Quee
None of our Independent Directors sits on the board of any of our subsidiaries. None of the other entities
in our Group is based in a jurisdiction other than Singapore.
130
EXECUTIVE OFFICERS
The particulars of our Executive Officers are set out below:
Name
Age
Address
Position
Siu Yeung Sau
40
Singapore 608927
CFO
62
Singapore 608927
COO
Chong Khim Cheng
41
Singapore 608927
Director (Brand)
Carolyn Ann Theng May Lin
41
Singapore 608927
Director (Marketing &
Communications)
Eyu Soon Fatt
45
Singapore 608927
Director (Technical
Support)
Jamie Nguyen Ha Lan
41
Singapore 608927
Financial Controller
Information on the business and working experience of our Executive Officers are set out below:
Siu Yeung Sau joined our Group in July 2012 as our financial consultant, performing the role of acting
CFO and is currently our CFO. He is responsible for the overall financial management, accounting and
management reporting as well as all financial operations of our Group. He has more than 10 years of
experience in the accounting and finance fields. In July 1997, he started his career at KPMG Services
Pte. Ltd. (“KPMG”) in audit and was an audit senior prior to leaving KPMG in December 1999. Between
January 2000 and April 2002, he worked as an assistant audit manager with PricewaterhouseCoopers
LLP. Subsequently in March 2003, he entered the commercial world as a regional internal audit manager
of Diethelm Keller Siber Hegner, a global market expansion services provider and he was tasked mainly
to manage the internal audit, internal control and risk management matters of the company. In January
2005, he joined Pokka Corporation (Singapore) Private Limited, which was then a company listed on
the Main Board of the SGX-ST, as an internal audit manager and he left in April 2008 as the group
financial controller. Between 2008 and 2009, he worked as the chief financial officer of Sisulan Apparel
(China) Co Ltd. In 2010, he was appointed to the role of the chief financial officer of the SGX-ST Catalistlisted Westech Electronics Limited (now known as WE Holdings Ltd.). He was subsequently hired by
Commonwealth Travel Service Corporation Pte Ltd to work as the group financial controller. Throughout
his tenure of employment, he has had the opportunities to work with various professional parties in
connection with listing and initial public offerings and had familiarised himself with the work scope of a
chief financial officer of a listed company. He holds a Bachelor’s degree in Accountancy from Nanyang
Technological University of Singapore and a Masters in Business Administration from California State
University, East Bay. He has also been certified by the Institute of Singapore Chartered Accountants
(formerly the Institute of Certified Public Accountants of Singapore) as Chartered Accountant of
Singapore since 2002.
Dennis Yang Yung Kang joined our Group in August 2012 as our COO. He is responsible for the
strategic planning for business expansion of our Group and overseeing corporate compliance in
operational matters for our Group. He has more than 35 years of relevant experience and in-depth
expertise in the automobile industry. In 1976, he started his career with the Cycle & Carriage group of
companies (“Cycle & Carriage”) as an assembly plant supervisor and was a sales executive prior to
leaving Cycle & Carriage in 1979. Between 1979 and 1993, he served as the general sales manager
of Performance Motors Limited, where he was responsible for the sales and management of the BMW
brand of automobiles. Subsequently, he worked as the managing director in the Eurokars group of
companies from 1993 to 2003 and he was responsible for the strategic planning for business expansion
131
in Singapore and within the region. He has also worked as the managing director in YLL Automotive
Group Private Limited from 2004 to 2005, where he was responsible mainly for securing and establishing
the Audi brand in East Malaysia. Prior to joining our Group, he worked as the vice president of the
Komoco group of companies from 2006 to 2012, where he was responsible mainly for the automotive
business.
Chong Khim Cheng joined our Group in April 1999 as customer service manager (sales) and is
currently our Director (Brand). He is responsible for overseeing the overall brand management of
Lamborghini and Pagani. Since joining our Group, he has held several management positions in our
subsidiary, EuroSports Auto, primarily responsible for the sales and marketing functions and brand
management of our new automobile distribution business. He has 13 years of experience in ultra-luxury
automobiles and luxury automobile sales. He obtained the High School Diploma from Columbia College
(Canada) in 1989.
Carolyn Ann Theng May Lin joined our Group in May 2007 as our Director (Marketing and
Communications). She is primarily responsible for the management of marketing and communications
activities related to all our automobile brands in our portfolio of automobiles. From June 1992 to June
1996, she worked in Cityneon Displays Pte Ltd, a full-service public relations and marketing firm, working
as the assistant marketing manager and assistant project manager respectively. Subsequently, she joined
another public relations and marketing firm, FLEx Integrated Marketing Pte Ltd as the assistant vice
president from June 1997 to April 2007. She has 20 years of relevant experience in the field of marketing
and communications. She holds a Diploma in Environment Engineering from Ngee Ann Polytechnic
Singapore.
Eyu Soon Fatt joined our Group in March 1999 as a service centre supervisor and is currently our
Director (Technical Support). He is primarily responsible for overseeing the technical and after-sales
services operations and handling technical, warranty and homologation issues. He worked as a service
centre supervisor in M1 Motors Works Sdn Bhd from February 1987 to February 1993. He subsequently
worked as a senior technician in Performance Motor Pte Ltd, from March 1993 to March 1996, and in
Stuttgart Auto Pte Ltd, from May 1996 to January 1999, and he was responsible mainly for handling the
technical and services issues related to luxury automobiles. He has 25 years of operational experience in
the technical and services aspects related to automobiles and automobile related products.
Jamie Nguyen Ha Lan joined our Group in July 2007 and is currently our Financial Controller. She
is responsible for overseeing the day to day accounting and all financial operations of our Group. She
started her career working as a management accountant for Kim Ngan Ha Co., Ltd, a Singaporeancontrolled Vietnamese company, from January 1995 to December 2000. From August 2004 to September
2005, she was an accounts executive with The Stansfield Group Pte Ltd where she was responsible for
preparation of financial statements and management reporting. Prior to joining our Group, she was the
accounting officer for Showa Denko HD (S) Pte Ltd from September 2006 to July 2007, where she was
involved in preparation of financial statements and budgets. She has more than 17 years of experience in
the field of accounting and finance. She holds a Bachelor Degree in Economics (Majoring in Accounting)
from Hanoi University of Finance and Accounting (now known as Academy of Finance).
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The list of present and past directorships of each Executive Officer over the last five (5) years up to the
Latest Practicable Date, excluding that held in our Company, is set out below:
Name
Present directorships
Past directorships
Siu Yeung Sau
Group Companies
Group Companies
Nil
Nil
Other Companies
Other Companies
Nil
Nil
Group Companies
Group Companies
Nil
Nil
Other Companies
Other Companies
Nil
Nil
Group Companies
Group Companies
Nil
Nil
Other Companies
Other Companies
Nil
Nil
Group Companies
Group Companies
Nil
Nil
Other Companies
Other Companies
Nil
Nil
Group Companies
Group Companies
Nil
Nil
Other Companies
Other Companies
Nil
Nil
Group Companies
Group Companies
Nil
Nil
Other Companies
Other Companies
Nil
Nil
Chong Khim Cheng
Eyu Soon Fatt
Jamie Nguyen Ha Lan
Save as disclosed in the section entitled “Directors, Executive Officers and Employees” of this Offer
Document, none of our Directors and Executive Officers are related by blood or marriage to one another
nor are they so related to any Substantial Shareholders of our Company.
To the best of our knowledge and belief, there are no arrangements or understandings with any
Substantial Shareholders, customers, suppliers or others, pursuant to which any of our Directors and
Executive Officers was appointed.
133
REMUNERATION
The compensation (which includes benefits-in-kind, directors’ fees and bonuses) paid to our Directors
and our Executive Officers for services rendered to us and our subsidiaries on an individual basis and in
remuneration bands during FY2012, FY2013 and expected to be paid for the current financial year is as
follows:
Names
FY2012
FY2013
FY2014
(Estimated)
Melvin Goh(2)
Band D
Band B
Band B
Andy Goh(2)
Band D
Band B
Band B
Directors
Ng Tiak Soon
–
(3)
Tan Siok Sing
–
(3)
–
(3)
–
(3)
Band A
Band A
–
(3)
Band A
Band A
Band A
Band A
Lim Kim Quee
–
(3)
Band A
–
(3)
Band A
–
(3)
Band A
Executive Officers
Siu Yeung Sau
Chong Khim Cheng
Band A
Band A
Band A
Band A
Eyu Soon Fatt
Band A
Band A
Band A
Jamie Nguyen Ha Lan
Band A
Band A
Band A
Notes:
(1)
Band A refers to remuneration of an amount up to S$250,000.
Band B refers to remuneration of an amount between S$250,001 and S$500,000.
Band C refers to remuneration of an amount between S$500,001 and S$750,000.
Band D refers to remuneration of an amount between S$750,001 and S$1,000,000.
(2)
The estimated amount for FY2014 does not take into account the performance bonus that our Executive Directors are entitled
to receive under their respective Service Agreements, further details of which are set out in the section entitled “Directors,
Executive Officers and Employees – Service Agreements” of this Offer Document.
(3)
Not appointed or employed by our Group during the relevant periods.
Save as described in the section entitled “Directors, Executive Officers and Employees – Service
Agreements” of this Offer Document, as at the date of this Offer Document, we do not have in place any
formal bonus or profit-sharing plan or any other profit-linked agreement or arrangement with any of our
employees and bonus is expected to be paid on a discretionary basis.
Save for the ESOS and the Performance Share Plan, no remuneration was paid or is to be paid in the
form of share options to any of our Directors, Executive Officers or employees.
As at the Latest Practicable Date, other than the amounts set aside or accrued as required for
compliance with the applicable laws of Singapore, no amounts have been set aside or accrued by our
Group to provide for pension, retirement or similar benefits for any of our employees.
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EMPLOYEES
As at the Latest Practicable Date, we have 58 full-time employees. We do not employ any temporary or
part-time staff. We do not experience any significant seasonal fluctuations in our number of employees.
As at the Latest Practicable Date, none of our employees are related to our Directors and Substantial
Shareholders.
Our employees are not unionised. The relationship and cooperation between the management and
staff have been good and are expected to continue to remain so in the future. There has not been any
incidence of work stoppages or labour disputes which affected our operations.
As at
31 March 2011
As at
31 March 2012
As at
31 March 2013
As at
30 June 2013
As at the
Latest
Practicable
Date
Management
6
6
8
8
8
Administration
6
6
7
6
7
After-sales operations
27
27
27
25
26
Marketing and sales
13
13
12
12
12
3
3
5
5
5
55
55
59
56
58
Function
Finance and accounting
Total
Note:
(1)
Management refers to our Executive Directors and Executive Officers.
All of our employees are based in Singapore.
SERVICE AGREEMENTS
Our Company has entered into separate service agreements (the “Service Agreements”) with our
Executive Directors, namely, Melvin Goh and Andy Goh, for a period of three (3) years with effect from
the date of listing, and thereafter continue from year to year (unless otherwise terminated by either party
giving not less than six (6) months’ prior written notice to the other).
We may also terminate the Service Agreements of our Executive Directors, if he, inter alia, is disqualified
to act as Executive Director or Executive Officer under any applicable laws or regulations, guilty of
dishonesty, gross misconduct or wilful neglect of duty, commits any continued material breach of the
terms of their respective Service Agreements, is guilty of conduct likely to bring himself or any member of
our Group into disrepute, becomes bankrupt or is convicted of any criminal offence.
None of these Executive Directors will be entitled to any benefits upon termination of their respective
Service Agreements. The Service Agreements cover the terms of employment, specifically salaries and
bonuses.
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Pursuant to the terms of their respective Service Agreements, each of Melvin Goh and Andy Goh is
entitled to a monthly salary of S$40,000 and S$33,000 respectively, and an annual wage supplement
of three (3) months’ basic salary. In addition, each of Melvin Goh and Andy Goh is entitled to an annual
performance bonus in respect of each financial year commencing from FY2014, which is calculated
based on the consolidated net profit before tax excluding one-off gains or losses, such as those arising
from revaluation or divestment of subsidiaries and associated companies, (before deducting for such
performance bonus payments) (“NPBT”) of our Group as follows:
Performance Bonus
NPBT attained
Melvin Goh
Andy Goh
Up to and including S$5 million
Nil
Nil
More than S$5 million but up to and
including S$10 million
S$300,000 plus 4.0% of the
NPBT in excess of S$5 million
S$150,000 plus 3.0% of the
More than S$10 million but up to and
including S$15 million
S$500,000 plus 4.3% of the
S$300,000 plus 3.5% of the
More than S$15 million
S$715,000 plus 4.5% of the
S$475,000 plus 4.0% of the
Directors’ fees do not form part of the terms of the Service Agreements as these require the approval of
Shareholders in our Company’s annual general meeting.
Our Executive Directors will be reimbursed for all travelling, accommodation, entertainment and other outof-pocket expenses reasonably incurred by them in or about the discharge of their duties hereunder. They
are also entitled to a monthly transport allowance and subscription fees for a country club membership.
Our Company shall provide each of our Executive Directors with a car and shall bear all costs and
expenses of the car.
Had the Service Agreements been in place with effect from 1 April 2012, the aggregate remuneration
paid to our Executive Directors for FY2013 would have been approximately S$1.94 million instead
of approximately S$0.83 million and our profit before tax for FY2013 would have decreased from
approximately S$8.34 million to approximately S$7.23 million.
Save as disclosed above, there are no existing or proposed service agreements between our Company,
our subsidiaries and any of our Directors. There are no existing or proposed service agreements entered
or to be entered into by our Directors with our Company or any of our subsidiaries which provide for
benefits upon termination of employment.
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EUROSPORTS PERFORMANCE SHARE PLAN
In conjunction with our listing on Catalist, we have adopted a performance share plan known as the
“EuroSports Performance Share Plan” and a share option scheme known as the “EuroSports Employee
Share Option Scheme”, both of which were approved by our Shareholders by way of written resolutions
passed on 29 November 2013. The rules of our Performance Share Plan and ESOS are set out in
Appendices F and G to this Offer Document, respectively.
Both the Performance Share Plan and the ESOS will provide eligible participants (each a “Participant”
and collectively, the “Participants”) with an opportunity to participate in the equity of our Company
and to motivate them towards better performance through increased dedication and loyalty. Both
the Performance Share Plan and ESOS form an integral component of our compensation plan and
are designed primarily to reward and retain employees whose services are vital to the growth and
performance of our Company and/or our Group.
The Performance Share Plan and ESOS are designed to complement each other in our Group’s efforts
to reward, retain and motivate employees to achieve better performance. The aim of implementing more
than one incentive plan is to increase our Group’s flexibility and effectiveness in its continuing efforts to
reward, retain and motivate employees to achieve better performance by providing our Group with a more
comprehensive set of remuneration tools and further strengthen our competitiveness in attracting and
retaining local and foreign talent.
Unlike the ESOS whereby Participants are required to pay the exercise price of the Options, the
Performance Share Plan allows our Group to provide an incentive for Participants to achieve certain
specific performance targets by awarding fully paid Shares to Participants after these targets have been
met.
In addition, the assessment criteria for granting Option(s) under the ESOS are more general (e.g. based
on length of service and general performance of our Group) and do not relate to specific performance
targets imposed by our Group. On the other hand, the assessment criteria for granting of Awards under
the Performance Share Plan will be based on specific performance targets or to impose time-based
service conditions, or a combination of both.
As at the Latest Practicable Date, no Awards have been granted under the Performance Share Plan.
Objectives of the Performance Share Plan
The main objectives of the Performance Share Plan are as follows:
(a)
to attract potential employees with relevant skills to contribute to our Group and to create value for
Shareholders;
(b)
to instil loyalty to, and a stronger identification by the Participants with the long-term prosperity of,
our Group;
(c)
to motivate the Participants to optimise their performance standards and efficiency and to maintain
a high level of contribution to our Group;
(d)
to give recognition to the contributions made by the Participants to the success of our Group; and
(e)
to retain key employees of our Group whose contributions are essential to the long-term prosperity
of our Group.
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Summary of the Performance Share Plan
The following is a summary of the rules of the Performance Share Plan. Capitalised terms as used
throughout this section, unless otherwise defined, shall bear the meanings as defined in Appendix F of
(a)
Eligibility
The Performance Share Plan allows for participation by confirmed employees of our Group
(including Executive Directors) and Non-Executive Directors (including Independent Directors)
who have attained the age of 21 years on or before the relevant date of Award provided that none
shall be an undischarged bankrupt at the relevant time, and who, in the absolute discretion of the
Remuneration Committee, will be eligible to participate in the Performance Share Plan.
Controlling Shareholders are not eligible to participate in the Performance Share Plan. However,
associates of a Controlling Shareholder who meet the above eligibility criteria are eligible to
participate in the Performance Share Plan provided that (a) the participation of, and (b) the terms
of each grant and the actual number of Awards granted under the Performance Share Plan to, a
Participant who is an associate of a Controlling Shareholder shall be approved by our independent
Shareholders in separate resolutions for each such person.
There shall be no restriction on the eligibility of any Participant to participate in any other share
incentive schemes or share plans implemented or to be implemented by our Company or any other
company within our Group.
Subject to the Companies Act and any requirement of the SGX-ST, the terms of eligibility for
participation in the Performance Share Plan may be amended from time to time at the absolute
discretion of the Remuneration Committee.
(b)
Awards
Awards represent the right of a Participant to receive fully paid Shares free of charge, upon the
Participant achieving prescribed performance targets.
The selection of the Participants and the number of Shares which are the subject of each Award to
be granted to a Participant in accordance with the Performance Share Plan shall be determined at
the absolute discretion of the Remuneration Committee, which shall take into account criteria such
as, inter alia, the rank, scope of responsibilities, performance, years of service and potential for
future development and contribution to the success of our Group.
In the case of a performance-related Award, the performance targets will be set by the
Remuneration Committee depending on each individual Participant’s job scope and responsibilities.
The performance targets to be set shall take into account both the medium and long-term
corporate objectives of our Group and the individual performance of the Participant and will be
aimed at sustaining long-term growth. The corporate objectives shall cover market competitiveness,
business growth and productivity growth. The performance targets could be based on criteria such
as sales growth, growth in earnings and return on investment. In addition, the Participant’s length
of service with our Group, achievement of past performance targets, value-add to our Group’s
performance and development and overall enhancement to Shareholder value, amongst others, will
be taken into account.
Awards may be granted at any time in the course of a financial year, provided that in the event that
an announcement on any matter of an exceptional nature involving unpublished price sensitive
information is imminent, Awards may only be vested and hence any Shares comprised in such
Awards may only be delivered on or after the second Market Day from the date on which the
aforesaid announcement is made.
138
An Award letter confirming the Award will be sent to each Participant as soon as reasonably
practicable after the Award is finalised, specifying, inter alia, in relation to the Award:
(i)
in relation to a performance-related Award, the performance targets and the performance
period during which the prescribed performance targets are to be met;
(ii)
the number of Shares to be vested on the Participant; and
(iii)
the date by which the Award shall be vested.
The Remuneration Committee will take into account various factors when determining the method
to arrive at the exact number of Shares comprised in an Award. Such factors include, but are
not limited to, the current price of the Shares, the total issued share capital of our Company and
the pre-determined dollar amount which the Remuneration Committee decides that a Participant
deserves for meeting his performance targets. For example, Shares may be awarded based on
predetermined dollar amounts such that the quantum of Shares comprised in Awards is dependent
on the closing price of Shares transacted on the Market Day the Award is vested. Alternatively, the
Remuneration Committee may decide absolute numbers of Shares to be awarded to Participants
irrespective of the price of the Shares. The Remuneration Committee shall monitor the grant
of Awards carefully to ensure that the size of the Performance Share Plan will comply with the
relevant rules of the Catalist Rules.
(c)
Size and duration of the Performance Share Plan
The total number of Shares which may be delivered pursuant to the vesting of Awards on any date,
when added to the aggregate number of Shares issued and/or issuable in respect of (i) all Awards
granted under the Performance Share Plan; (ii) all Options granted under the ESOS; and (iii) all
other Shares issued and/or issuable under any other share-based incentive schemes or share
plans of our Company, shall not exceed 15.0% of the total number of issued Shares (excluding
treasury shares) of our Company from time to time.
The Directors believe that the size of the Performance Share Plan will give our Company sufficient
flexibility to decide the number of Shares to be offered under the Performance Share Plan.
However, it does not indicate that the Remuneration Committee will definitely issue Shares up
to the prescribed limit. The Remuneration Committee will exercise its discretion in deciding the
number of Shares to be granted to each Participant under the Performance Share Plan. This, in
turn, will depend on and be commensurate with the performance and value of the Participant to our
Group.
The aggregate number of Shares that are available to the associates of our Controlling
Shareholders under the Performance Share Plan shall not exceed 25.0% of the total number of
Shares available under the Performance Share Plan. The number of Shares that are available to
each associate of our Controlling Shareholder under the Performance Share Plan shall not exceed
10.0% of the Shares available under the Performance Share Plan.
The Performance Share Plan shall continue in force at the discretion of the Remuneration
Committee, subject to a maximum period of 10 years commencing on the date on which the
Performance Share Plan is adopted by our Company in general meeting, provided always that the
Performance Share Plan may continue beyond the above stipulated period with the approval of our
Shareholders by ordinary resolution in general meeting and of any relevant authorities which may
then be required.
Notwithstanding the expiry or termination of the Performance Share Plan, any Awards made to
Participants prior to such expiry or termination will continue to remain valid.
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(d)
Operation of the Performance Share Plan
The Remuneration Committee shall have the discretion to determine whether performance
targets have been met (whether fully or partially) or exceeded and/or whether the Participant’s
performance and/or contribution to our Company and/or any of our subsidiaries justifies the vesting
of an Award. In making any such determination, the Remuneration Committee shall have the right
to make reference to the audited results of our Company or our Group, as the case may be, to take
into account such factors as the Remuneration Committee may determine to be relevant, such as
changes in accounting methods, taxes and extraordinary events, and further, the right to amend
the performance targets if the Remuneration Committee decides that a changed performance
targets would be a fairer measure of performance.
Awards may only be vested and consequently any Shares comprised in such Awards shall only be
delivered upon the Remuneration Committee being satisfied that the Participant has achieved the
performance targets.
Subject to the prevailing legislation and the provisions of the Catalist Rules, our Company will be
delivering Shares to Participants upon vesting of their Awards by way of an issue of New Shares or
the transfer of existing Shares held as treasury shares to the Participants. In determining whether
to issue New Shares or to purchase existing Shares for delivery to Participants upon the vesting
of their Awards, our Company will take into account factors such as the number of Shares to be
delivered, the prevailing market price of the Shares and the financial effect on our Company of
either issuing New Shares or purchasing existing Shares.
New Shares allotted and issued on the release of an Award shall rank in full for all entitlements,
including dividends or other distributions declared or recommended in respect of the then existing
Shares, the record date for which is on or after the date of issue of the New Shares or the date of
transfer of treasury shares pursuant to the vesting of the Award, and shall in all other respects rank
pari passu with other existing Shares then in issue.
(e)
Adjustments and alterations under the Performance Share Plan
(i)
Variation of Capital
If a variation in the issued ordinary share capital of our Company (whether by way
of a capitalisation of profits or reserves or rights issue, capital reduction, subdivision,
consolidation, distribution or otherwise) shall take place, then:
(A)
the class and/or number of Shares which are the subject of an Award to the extent not
yet vested; and/or
(B)
the class and/or number of Shares over which future Awards may be granted under
the Performance Share Plan,
shall be adjusted by the Remuneration Committee to give each Participant the same
proportion of the equity capital of our Company as that to which he was previously entitled
and, in doing so, the Remuneration Committee shall determine at its own discretion the
manner in which such adjustment shall be made.
Unless the Remuneration Committee considers an adjustment to be appropriate, the
following events shall not normally be regarded as a circumstance requiring adjustment:
(aa)
the issue of securities as consideration for an acquisition or a private placement of
securities;
(bb)
the cancellation of issued Shares purchased or acquired by our Company by way of a
market purchase of such Shares undertaken by our Company on the SGX-ST during
the period when a share purchase mandate granted by Shareholders (including any
renewal of such mandate) is in force;
140
(cc)
the issue of Shares or other securities convertible into or with rights to acquire or
subscribe for Shares to its employees pursuant to share option scheme or share plan
approved by Shareholders in general meeting, including the Performance Share Plan;
and
(dd)
any issue of Shares arising from the exercise of any warrants or the conversion of any
convertible securities issued by our Company.
Notwithstanding the provisions of the rules of the Performance Share Plan:
(ii)
(1)
the adjustment must be made in such a way that a Participant will not receive a
benefit that a Shareholder does not receive; and
(2)
any adjustment (except in relation to a capitalisation issue) must be confirmed in
writing by the Auditors (acting only as experts and not as arbitrators) to be in their
opinion, fair and reasonable.
Modifications to the Performance Share Plan
Any or all the provisions of the Performance Share Plan may be modified and/or altered at
any time and from time to time by resolution of the Remuneration Committee, provided that:
(f)
(A)
any modification or alteration which would be to the advantage of Participants under
the Performance Share Plan shall be subject to the prior approval of Shareholders in a
general meeting; and
(B)
no modification or alteration shall be made without due compliance with the Catalist
Rules and such other regulatory authorities as may be necessary.
Reporting requirements
Under the Catalist Rules, an immediate announcement must be made on the date of grant of an
Award and provide details of the grant, including the following:
(i)
date of grant;
(ii)
market price of the Shares on the date of grant of the Award;
(iii)
number of Shares granted under the Award;
(iv)
number of Shares granted to Directors under the Award, if any; and
(v)
the vesting period in relation to the Award.
The following disclosures (as applicable) will be made by our Company in our annual report for so
long as the Performance Share Plan continues in operation:
(A)
the names of the members of the Remuneration Committee administering the Performance
Share Plan;
(B)
in respect of the following Participants:
(1)
Directors of our Company; and
(2)
Participants (other than those in paragraph (B)(1) above) who have received Shares
pursuant to the vesting of Awards granted under the Performance Share Plan which,
in aggregate, represent five per cent. (5%) or more of the total number of Shares
available under the Performance Share Plan, the following information:
(AA) the name of the Participant;
141
(BB) the aggregate number of Shares comprised in Awards which have been granted
to such Participant during the financial year under review;
(CC) the aggregate number of Shares comprised in Awards which have been granted
to such Participant since the commencement of the Performance Share Plan to
the end of the financial year under review;
(DD) the aggregate number of Shares comprised in Awards which have been issued
and/or transferred to such Participant pursuant to the vesting of Awards under
the Performance Share Plan since the commencement of the Performance
Share Plan to the end of the financial year under review;
(EE) the aggregate number of Shares comprised in Awards which have not been
vested as at the end of the financial year under review; and
(C)
(g)
such other information as may be required by the Catalist Rules or the Companies Act.
Role and composition of the Remuneration Committee
The Remuneration Committee shall be responsible for the administration of the Performance Share
Plan and shall consist of the Directors. As at the date of this Offer Document, the Remuneration
Committee comprises Ng Tiak Soon, Tan Siok Sing and Lim Kim Quee.
The Remuneration Committee shall have the power, from time to time, to make and vary such rules
(not being inconsistent with the Performance Share Plan) for the implementation and administration
of the Performance Share Plan as they think fit including, but not limited to:
(i)
imposing restrictions on the number of Awards that may be vested within each financial year;
and
(ii)
amending performance targets if by so doing, it would be a fairer measure of performance
for a Participant or for the Performance Share Plan as a whole.
In compliance with the requirements of the Catalist Rules, any Participant of the Performance
Share Plan who is a member of the Remuneration Committee shall not be involved in its
deliberation or decision in respect of Awards granted to or to be granted to him.
Rationale for participation by the associates of our Controlling Shareholders in the Performance
Share Plan
Our Company acknowledges that the services and contributions of employees who are associates of
our Controlling Shareholders are important to the development and success of our Group. The extension
of the Performance Share Plan to confirmed full-time employees who are associates of our Controlling
Shareholders allows our Group to have a fair and equitable system to reward employees who have
actively contributed to the progress and success of our Group. The participation of the associates of the
Controlling Shareholders in the Performance Share Plan will serve both as a reward to them for their
dedicated services to our Group and a motivation for them to take a long-term view of our Group.
Although Participants who are associates of our Controlling Shareholders may already have shareholding
interests in our Company, the extension of the Performance Share Plan to include them ensures that they
are equally entitled, with the other employees of our Group who are not associates of our Controlling
Shareholders, to take part and benefit from this system of remuneration. We are of the view that a person
who would otherwise be eligible should not be excluded from participating in the Performance Share Plan
solely by reason that he/she is an associate of our Controlling Shareholder(s).
142
The specific approval of our independent Shareholders is required for the participation of such persons
as well as the actual number of and terms of such Awards. A separate resolution must be passed for
each such participant. In seeking such approval from our independent Shareholders, clear justification as
to the participation of associates of our Controlling Shareholders, the number of and terms of the Awards
to be granted to the associates of our Controlling Shareholders shall be provided. Accordingly, we are of
the view that there are sufficient safeguards against any abuse of the Performance Share Plan resulting
from the participation of employees who are associates of our Controlling Shareholders.
Rationale for participation by Non-Executive Directors (including Independent Directors)
While the Performance Share Plan caters principally to Group Employees, it is recognised that there are
other persons who make significant contributions to our Group through their close working relationships
with our Group, even though they are not employed within our Group. Such persons include the NonExecutive Directors.
The Non-Executive Directors are persons from different professions and working backgrounds, bringing
to our Group their wealth of knowledge, business expertise and contacts in the business community. They
play an important role in helping our Group shape its business strategy by allowing our Group to draw
on their diverse backgrounds and working experience. It is crucial for our Group to attract, retain and
incentivise the Non-Executive Directors. By aligning the interests of the Non-Executive Directors with the
interests of Shareholders, our Company aims to inculcate a sense of commitment on the part of the NonExecutive Directors towards serving the short and long-term objectives of our Group.
The Directors are of the view that including the Non-Executive Directors in the Performance Share Plan
will show our Company’s appreciation for, and further motivate them in their contribution towards the
success of our Group. However, as their services and contributions cannot be measured in the same way
as the full-time employees of our Group, while it is desired that participation in the Performance Share
Plan be made open to the Non-Executive Directors, any Awards that may be granted to any such NonExecutive Director would be intended only as a token of our Company’s appreciation.
For the purpose of assessing the contributions of the Non-Executive Directors, the Remuneration
Committee will propose a performance framework comprising mainly non-financial performance
measurement criteria, such as the extent of involvement and responsibilities shouldered by the NonExecutive Directors. In addition, the Remuneration Committee will also consider the scope of advice
given, the number of contacts and size of deals which our Group is able to procure from the contacts and
recommendations of the Non-Executive Directors. The Remuneration Committee may also decide that no
Awards shall be made in any financial year or no grant and/or Award may be made at all.
It is envisaged that the vesting of Awards, and hence the number of Shares to be delivered to the NonExecutive Directors based on the criteria set out above will be relatively small, in terms of frequency
and numbers. Based on this, the Directors are of the view that the participation by the Non-Executive
Directors in the Performance Share Plan will not compromise the independent status of those who are
Independent Directors.
Financial effects of the Performance Share Plan
Cost of Awards
Singapore Financial Reporting Standard 102 (“FRS 102”) relating to share-based payment took effect
for all listed companies from 1 January 2005. Participants will receive Shares and the Awards would be
accounted for as equity-settled share-based transactions, as described in the following paragraphs.
The fair value of employee services received in exchange for the grant of the Awards will be recognised
as a charge to profit or loss over the period between the grant date and the vesting date of an Award.
The total amount of the charge over the vesting period is determined by reference to the fair value
of each Award granted at the grant date and the number of Shares vested at the vesting date, with a
corresponding credit to reserve account. Before the end of the vesting period, at each accounting year
end, the estimate of the number of Awards that are expected to vest by the vesting date is subject to
revision, and the impact of the revised estimate will be recognised in profit or loss with a corresponding
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adjustment to the reserve account. After the vesting date, no adjustment to the charge to profit or loss is
made. This accounting treatment has been referred to as the “modified grant date method” because the
number of Shares included in the determination of the expense relating to employee services is adjusted
to reflect the actual number of Shares that eventually vest but no adjustment is made to changes in the
fair value of the Shares since the grant date.
The amount charged to profit or loss would be the same whether our Company settles the Awards by
issuing New Shares or by purchasing existing Shares. The amount of the charge to profit or loss also
depends on whether or not the performance target attached to an Award is measured by reference to the
market price of the Shares. This is known as a market condition. If the performance target is a market
condition, the probability of the performance target being met is taken into account in estimating the fair
value of the Award granted at the grant date, and no adjustments to amounts charged to profit or loss
are made if the market condition is not met. However, if the performance target is not a market condition,
the fair value per Share of the Awards granted at the grant date is used to compute the amount to be
charged to profit or loss at each accounting date, based on an assessment at that date of whether the
non-market conditions would be met to enable the Awards to vest. Thus, where the vesting conditions do
not include a market condition, there would be no charge to profit or loss if the Awards do not ultimately
vest.
In the event that the Participants receive cash, our Company shall measure the fair value of the liability at
grant date. Until the liability is settled, our Company shall re-measure the fair value of the liability at each
accounting date and at the date of settlement, with changes in the fair value recognised in profit or loss.
Share capital
The Performance Share Plan will result in an increase in our Company’s issued share capital where new
Shares are issued to Participants. The number of New Shares issued will depend on, among others, the
size of the Awards granted under the Performance Share Plan. In any case, the Performance Share Plan
provides that the number of shares to be issued under the said Performance Share Plan will be subject
to a maximum limit of 15.0% of our total issued Shares. The aggregate number of Shares available under
the Performance Share Plan shall not exceed 15.0% of the total issued share capital of our Company
post-Invitation and from time to time. If instead of issuing New Shares to the Participants, treasury shares
are transferred to Participants or our Company pays the equivalent cash value, the Performance Share
Plan would have no impact on our Company’s total number of issued Shares.
NTA
The Performance Share Plan will result in a charge to our Company’s profit or loss over the period
from the grant date to the vesting date of the Awards. The amount of the charge will be computed in
accordance with FRS 102. When new Shares are issued under the Performance Share Plan, there would
be no effect on the NTA. However, instead of issuing New Shares to Participants, existing Shares are
purchased for delivery to Participants, or our Company pays the equivalent cash value, the NTA would be
impacted by the cost of the Shares purchased or the cash payment, respectively.
EPS
The Performance Share Plan will result in a charge to earnings equivalent over the period from the
grant date to the vesting date, computed in accordance with FRS 102. It should again be noted that the
delivery of Shares to Participants of the Performance Share Plan will generally be contingent upon the
Participants meeting the prescribed performance targets and conditions.
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EUROSPORTS EMPLOYEE SHARE OPTION SCHEME
In conjunction with our listing on Catalist, we have adopted a share option scheme known as the
“EuroSports Employee Share Option Scheme” which was approved by our Shareholders by way of
written resolutions passed on 29 November 2013. The rules of our ESOS are set out in Appendix G of
Capitalised terms used herein shall, unless otherwise defined, bear the same meanings as defined in
Appendix G of this Offer Document.
The ESOS will provide eligible participants with an opportunity to participate in the equity of our Company
and to motivate them towards better performance through increased dedication and loyalty. The ESOS,
which forms an integral component of our employee compensation plan, is designed to primarily reward
and retain directors and employees whose services are vital to our well being and success.
As at the Latest Practicable Date, no Options have been granted under the ESOS.
Objectives of the ESOS
The objectives of the ESOS are as follows:
(a)
to motivate participants to optimise their performance standards and efficiency and to maintain a
high level of contribution to our Group;
(b)
to retain key employees and directors whose contributions are essential to the long-term growth
and profitability of our Group;
(c)
to instil loyalty to, and a stronger identification by participants with the long-term prosperity of, our
Group;
(d)
to attract potential employees with relevant skills to contribute to our Group and to create value for
our Shareholders; and
(e)
to align the interests of participants with the interests of our Shareholders.
Summary of the ESOS
The following is a summary of the rules of the ESOS:
(a)
Participants
The ESOS allows for participation by confirmed employees of our Group (including Executive
Directors) and Non-Executive Directors (including Independent Directors) who have attained the
age of 21 years on or before the relevant date of grant of the Option, provided that none shall be
an undischarged bankrupt or have entered into a composition with his creditors.
Controlling Shareholders are not eligible to participate in the ESOS. However, their associates
are eligible to participate in the ESOS, provided that (i) the participation of, and (ii) the terms of
any Options to be granted and the actual number of Shares to be granted under the ESOS, to a
Participant who is an associate of a Controlling Shareholder shall be approved by the independent
Shareholders in separate resolutions for each such person.
(b)
Administration
The ESOS shall be administered by the Remuneration Committee with powers to determine, inter
alia, the following:
(i)
persons to be granted Options;
(ii)
number of Options to be granted; and
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(iii)
recommendations for modifications to the ESOS.
As at the date of this Offer Document, our Remuneration Committee comprises Ng Tiak Soon, Tan
Siok Sing and Lim Kim Quee. The Remuneration Committee will consist of Directors (including
Directors or persons who may be participants of the ESOS). A member of the Remuneration
Committee who is also a participant of the ESOS must not be involved in any deliberation or
decision in respect of Options granted or to be granted to him.
(c)
Size of the ESOS
The total number of Shares over which the Remuneration Committee may grant Options on any
date, when added to the number of Shares issued and issuable in respect of (i) all Options granted
under the ESOS; (ii) all Awards granted under the Performance Share Plan; and (iii) all outstanding
options or awards granted under such other share-based incentive schemes of our Company, shall
not exceed 15.0% of the number of issued Shares (including treasury shares, as defined in the
Companies Act) on the day immediately preceding the Offer Date of the Option.
Our Directors believe that this limit gives us sufficient flexibility to decide upon the number of
Option Shares to offer to our existing and new employees. The number of eligible participants is
expected to grow over the years. Our Company, in line with its goal of ensuring sustainable growth,
is constantly reviewing its position and considering the expansion of its talent pool which may
involve employing new employees. The employee base, and thus the number of eligible participants
will increase as a result. If the number of Options available under the ESOS is limited, our
Company may only be able to grant a small number of Options to each eligible participant which
may not be a sufficiently attractive incentive. Our Company is of the opinion that it should have a
sufficient number of Options to offer to new employees as well as to existing ones. The number
of Options offered must also be significant to serve as a meaningful reward for contributions to
our Group. However, it does not necessarily mean that the Remuneration Committee will definitely
issue Option Shares up to the prescribed limit. The Remuneration Committee shall exercise its
discretion in deciding the number of Option Shares to be granted to each employee which will
depend on the performance and value of the employee to our Group.
(d)
Maximum entitlements
The aggregate number of Shares comprised in any Option to be offered to a participant under
the ESOS shall be determined at the absolute discretion of the Remuneration Committee, which
shall take into account (where applicable) criteria such as rank, past performance, years of service,
potential development of that participant.
The aggregate number of Shares in respect of which Options may be granted to the associates
of the Controlling Shareholders under the ESOS shall not exceed 25.0% of the total number of
Shares available under the ESOS. The aggregate number of Shares in respect of which Options
may be granted to any individual associate of a Controlling Shareholder under the ESOS shall not
exceed 10.0% of the total number of Shares available under the ESOS.
(e)
Options, exercise period and exercise price
The Options that are granted under the ESOS may have exercise prices that are, at the
Remuneration Committee’s discretion, set at a price (the “Market Price”) equal to the average of
the last dealt prices for the Shares on Catalist for five (5) consecutive Market Days immediately
preceding the relevant date of grant of the relevant Option; or at a discount to the Market Price
(subject to a maximum discount of 20.0%). Options which are fixed at the Market Price (“Market
Price Option”) may be exercised after the first anniversary of the date of grant of that Option
while Options exercisable at a discount to the Market Price (“Discounted Option”) may only be
exercised after the second anniversary from the date of grant of the Option. Options granted under
the ESOS will have a life span of 10 years.
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(f)
Grant of Options
Under the rules of the ESOS, there are no fixed periods for the grant of Options. As such, offers for
the grant of Options may be made at any time at the discretion of the Remuneration Committee.
However, no Option shall be granted during the period of 30 days immediately preceding the date
of announcement of our Company’s interim or final results (as the case may be).
In addition, in the event that an announcement on any matter of an exceptional nature involving
unpublished price sensitive information is imminent, offers may only be made after the second
market day from the date on which the aforesaid announcement is made.
(g)
Termination of Options
Special provisions in the rules of the ESOS deal with the lapse or earlier exercise of Options in
circumstances which include the termination of the participant’s employment in our Group, the
bankruptcy of the participant, the death of the participant, a take-over of our Company and the
winding-up of our Company.
(h)
Acceptance of Offer
The grant of Options shall be accepted within 30 days from the date of offer. Offers of Options
made to grantees, if not accepted by the closing date, will lapse. Upon acceptance of the offer, the
grantee must pay our Company a consideration of S$1.00.
(i)
Rights of Shares arising from the exercise of Options
Shares arising from the exercise of Options are subject to the provisions of the Memorandum and
Articles of Association of our Company. The Shares so allotted will upon issue rank pari passu
in all respects with the then existing issued Shares, save for any dividend, rights, allotments or
distributions, the record date for which is prior to the relevant exercise date of the Option. For such
purposes, “record date’’ means the date as at the close of business on which our Shareholders
must be registered in order to participate in any dividends, rights, allotments or other distributions
(as the case may be).
(j)
Duration of the ESOS
The ESOS shall continue in operation for a maximum duration of 10 years commencing on the
date on which the ESOS is adopted by our Company in general meeting and may be continued for
any further period thereafter with the approval of our Shareholders by ordinary resolution in general
meeting and of any relevant authorities which may then be required.
(k)
Abstention from voting
Shareholders who are eligible to participate in the ESOS are to abstain from voting on any
resolution of Shareholders relating to the ESOS, including, where applicable, (i) implementation
of the ESOS; (ii) discount quantum; and (iii) participation by and Option granted to Controlling
Shareholders and their associates and should not accept nominations as proxies or otherwise
for voting in respect of such resolution unless specific instructions have been given in the proxy
instrument on how the votes are to be cast.
Grant of Discounted Options
Discounted Options will only be granted to deserving employees whose performance has been
consistently good and/or whose future contributions to our Group will be invaluable. The ability to offer
Discounted Options will operate as a means to recognise the performance of participants as well as to
motivate them to continue to excel while encouraging them to focus on improving the profitability and
return of our Group to a level that benefits our Shareholders when these are eventually reflected through
an appreciation of our share price. Discounted Options would be perceived in a more positive light by the
participants, inspiring them to work hard and produce results in order to be offered Discounted Options
as only employees who have made significant contributions to the success and development of our
Group would be granted Discounted Options.
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The flexibility to grant Discounted Options is also intended to cater to situations where the stock market
performance has overrun the general market conditions. In such events, the Remuneration Committee will
have absolute discretion to:
(a)
grant Options set at a discount to the Market Price of a Share (subject to a maximum limit of
20.0%); and
(b)
determine the participants to whom, and the Options to which, such reduction in exercise prices
will apply.
In determining whether to give a discount and the quantum of the discount, the Remuneration Committee
shall be at liberty to take into consideration factors including the performance of our Company and our
Group, the performance of the participant concerned, the contribution of the participant to the success
and development of our Group and the prevailing market conditions.
At present, our Company foresees that Discounted Options may be granted principally in the following
circumstances:
(i)
Firstly, where it is considered more effective to reward and retain talented employees by way of a
Discounted Option rather than a Market Price Option. This is to reward the outstanding performers
who have contributed significantly to our Group’s performance and the Discounted Option serves
as additional incentives to such Group employees. Options granted by our Company on the basis
of market price may not be attractive and realistic in the event of an overly buoyant market and
inflated share prices. Hence during such period the ability to offer Discounted Options would allow
our Company to grant Options on a more realistic and economically feasible basis. Furthermore,
Discounted Options will give an opportunity to our Group employees to realise some tangible
benefits even if external events cause the Share price to remain largely static.
(ii)
Secondly, where it is more meaningful and attractive to acknowledge a participant’s achievements
through a Discounted Option rather than paying him a cash bonus. For example, Discounted
Options may be used to compensate employees and to motivate them during economic
downturns when wages (including cash bonuses and annual wage supplements) are frozen or
cut, or they could be used to supplement cash rewards in lieu of larger cash bonuses or annual
wage supplements. Accordingly, it is possible that merit-based cash bonuses or rewards may be
combined with grants of Market Price Options or Discounted Options, as part of eligible employees’
compensation packages. The ESOS will provide our Group employees with an incentive to focus
more on improving the profitability of our Group thereby enhancing shareholder value when these
are eventually reflected through the price appreciation of our Shares after the vesting period.
The Remuneration Committee will have the absolute discretion to grant Discounted Options, to determine
the level of discount (subject to a maximum discount of 20.0% of the Market Price) and the grantees
to whom, and the Options to which, such discount in the exercise price will apply provided that our
Shareholders in general meeting shall have authorised, in a separate resolution, the making of offers and
grants of Options under the ESOS at a discount not exceeding the maximum discount as aforesaid.
Our Company may also grant Options without any discount to the Market Price. Additionally, our
Company may, if it deems fit, impose conditions on the exercise of the Options (whether such Options
are granted at the market price or at a discount to the Market Price), such as restricting the number of
Shares for which the Option may be exercised during the initial years following its vesting.
Rationale for participation by employees of our Group (including the Executive Directors) in the
ESOS
The extension of the ESOS to employees of our Group allows us to have a fair and equitable system
to reward employees of our Group (including Executive Directors) who have made and who continue to
make significant contributions to the long-term growth of our Group.
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We believe that the grant of Options to the employees of our Group will enable us to attract, retain and
provide incentives to its participants to produce higher standards of performance as well as encourage
greater dedication and loyalty to our Group. This would enable our Company to give recognition to past
contributions and services as well as to motivate participants generally to contribute towards the longterm growth of our Group.
Rationale for participation by the associates of our Controlling Shareholders in the ESOS
Our Company acknowledges that the services and contributions of employees who are associates of our
Controlling Shareholders are important to the development and success of our Group. The extension of
the ESOS to confirmed full-time employees who are associates of our Controlling Shareholders allows
our Group to have a fair and equitable system to reward employees who have actively contributed to the
progress and success of our Group. The participation of the associates of the Controlling Shareholders in
the ESOS will serve both as a reward to them for their dedicated services to our Group and a motivation
for them to take a long-term view of our Group.
Although Participants who are associates of our Controlling Shareholders may already have shareholding
interests in our Company, the extension of the ESOS to include them ensures that they are equally
entitled as the other employees of our Group who are not associates of our Controlling Shareholders,
to take part and benefit from this system of remuneration. We are of the view that a person who would
otherwise be eligible should not be excluded from participating in the ESOS solely by reason that he/she
is an associate of our Controlling Shareholder(s).
The specific approval of our independent Shareholders is required for the participation of such persons
as well as the actual number of and terms of such Options. A separate resolution must be passed for
each such participant. In seeking such approval from our independent Shareholders, clear justification
as to the participation of associates of our Controlling Shareholders, the number of and terms (including
the exercise price) of the Options to be granted to the associates of our Controlling Shareholders shall
be provided. Accordingly, we are of the view that there are sufficient safeguards against any abuse of the
ESOS resulting from the participation of employees who are associates of our Controlling Shareholders.
Rationale for participation by our Non-Executive Directors (including Independent Directors) in
the ESOS
Although our Non-Executive Directors are not involved in the day-to-day running of our operations, they
play an invaluable role in furthering the business interests of our Group by contributing their experience
and expertise. The participation by Non-Executive Directors in the ESOS will provide our Company with
a further avenue to acknowledge and recognise their services and contributions to our Group as it may
not always be possible to compensate them fully or appropriately by increasing the directors’ fees or other
forms of cash payment. For instance, the Non-Executive Directors may bring strategic or other value to
our Company which may be difficult to quantify in monetary terms. The grant of Options to Non-Executive
Directors will allow our Company to attract and retain experienced and qualified persons from different
professional backgrounds to join our Company as Non-Executive Directors, and to motivate existing NonExecutive Directors to take extra efforts to promote the interests of our Company and/or our Group.
In deciding whether to grant Options to the Non-Executive Directors, the Remuneration Committee
will take into consideration, among other things, the services and contributions made to the growth,
development and success of our Group and the years of service of a particular Non-Executive Director.
The Remuneration Committee may also, where it considers relevant, take into account other factors such
as the economic conditions and our Company’s performance.
In order to minimise any potential conflict of interests and not to compromise the independence of the
Non-Executive Directors, our Company intends to grant only a nominal number of Options granted under
the ESOS to such Non-Executive Directors.
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Cost of Options granted under the ESOS to our Company
Any options granted under the ESOS, whether such options are Market Price Options or Discounted
Options, would have a fair value. In the event that such options are granted at prices below the fair value
of the options, there will be a cost to our Company. Such costs are higher in the case of Discounted
Options, where such options are granted with exercise prices set at a discount to the prevailing market
price of our Shares. The cost to our Company of granting options with a discounted exercise price under
the ESOS would be as follows:
(a)
the exercise of an option at a discounted exercise price would translate into a reduction of the
proceeds from the exercise of such options, as compared to the proceeds that our Company would
have received from such exercise had the exercise been made at the prevailing market price of
our Shares. Such reduction of the exercise proceeds would represent the monetary cost to our
Company of granting options with a discounted exercise price;
(b)
as the monetary cost of granting options with a discounted exercise price is borne by our
Company, the earnings of our Company would effectively be reduced by an amount corresponding
to the reduced interest earnings that our Company would have received from the difference
in proceeds from an exercise price with no discount versus the discounted exercise price. Such
reduction would, accordingly, result in the dilution of our Company’s EPS; and
(c)
the effect of the issue and allotment of new Shares upon the exercise of options on our Company’s
NAV per Share is accretive if the exercise price is above the NAV per Share, but dilutive otherwise.
The costs as discussed above would only materialise upon the exercise of the relevant Options. Share
options have value because the option to buy a company’s share for a fixed price during an extended
future time period is a valuable right, even if there are restrictions attached to such an option. As our
Company is required to account for share-based awards granted to our employees, the cost of granting
Options will affect our financial results as this cost to our Company would be required to be charged to
our Company’s profit or loss commencing from the time Options are granted. Subject as aforesaid, as
and when Options are exercised, the cash inflow will add to the net tangible assets of our Company
and its share capital base will grow. Where Options are granted with subscription prices that are set at
a discount to the market prices for our Shares prevailing at the time of the grant of such Options, the
amount of the cash inflow to our Company on the exercise of such Options would be diminished by the
quantum of the discount given, as compared with the cash inflow that would have been receivable by our
Company had the Options been granted at the market price of our Shares prevailing at the time of the
grant.
The grant of Options will have an impact on our Company’s reported profit under the accounting rules in
the Singapore Financial Reporting Standards which is effective for financial periods beginning on or after
1 January 2005. It requires the recognition of an expense in respect of Options granted. The expenses
will be based on the fair value of the Options at the date of grant (as determined by an option-pricing
model) and will be recognised over the vesting period.
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CORPORATE GOVERNANCE
Our Articles provide that our Board of Directors will consist of not less than two (2) Directors. None of our
Directors are appointed for any fixed terms, but one-third of our Directors are required to retire at every
annual general meeting of our Company. Hence, the maximum term for each Director is three (3) years.
Directors who retire are eligible to stand for re-election.
Our Directors recognise the importance of corporate governance and the offering of high standards
of accountability to Shareholders of our Company. Accordingly, our Board has established three
(3) committees: (i) the Audit Committee; (ii) the Nominating Committee; and (iii) the Remuneration
Committee.
Our Board of Directors comprises five (5) Directors, of which three (3) are Independent Directors. Our
Independent Directors do not have any existing business or professional relationship of a material nature
with our Group, our other Directors and/or Substantial Shareholders. Our Independent Directors are also
not related to other Directors and/or Substantial Shareholders.
Corporate Social Responsibility
We have participated in community projects and charity events, through donations and sponsorships,
as part of our marketing activities. Such community projects and charity events include the President’s
Challenge, KK Hospital Health Endowment, Yellow Ribbon Fund, Helping Hand Group, Children’s Aid
Society, The Straits Times School Pocket Money Fund and 2012 Corporate Arts Supporter Award, the
Rotary Family Service Centre and NTUC Rotary Silver Circle Eldercare Centre programmes, the South
West Community Development Council’s Adopt-a-Rental Block programme and the Wild Rice Ball and
Punggol West Community Centre programmes.
Our Board of Directors will establish a corporate social responsibility policy which will include the review
of the following areas of our Group’s activities:
(a)
to review and recommend our Group’s policy in respect of corporate social responsibility issues;
(b)
to review our Group’s health, safety and environment policies and standards;
(c)
to review the social impact of our Group’s business practices in the communities that we operate in;
(d)
to review and recommend policies and practices with regard to key stakeholders (suppliers,
customers and employees); and
(e)
to review and recommend policies and practices with regard to regulators.
Risk Management
Our Board of Directors has overall responsibility for the governance of risk and exercises oversight of the
material risks in our Group’s business.
Our Board of Directors will be responsible for determining our Company’s levels of risk tolerance and
risk policies, and overseeing our management in the design, implementation and monitoring of the
risk management and internal control systems. Our Board of Directors will also review the adequacy
and effectiveness of our Company’s risk management and internal control systems, including financial,
operational, compliance and information technology controls.
The identification and management of risks will be delegated to our management who assumes
ownership and day-to-day management of such risks. Our management will be responsible for
the effective implementation of risk management strategy, policies and processes to facilitate the
achievement of business plans and goals within the risk tolerance established by our Board of Directors.
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Audit Committee
Our Audit Committee comprises Ng Tiak Soon, Tan Siok Sing and Lim Kim Quee. The Chairman of the
Audit Committee is Ng Tiak Soon. Our Directors recognise the importance of corporate governance and
the offering of high standards of accountability to the Shareholders of our Company. Our Audit Committee
shall meet periodically to perform the following functions:
(a)
review the audit plans of the external auditors and internal auditors, their evaluation of the system
of internal controls, their audit report, their management letter and our management’s response,
where applicable;
(b)
review with the independent internal auditors the internal audit plans and their evaluation of the
adequacy of our internal control and accounting system before submission of the results of such
review to our Board for approval;
(c)
review the external and internal auditors’ reports;
(d)
review the co-operation given by our Company’s officers to the external and internal auditors;
(e)
review the financial statements of our Company and our Group, and discuss any significant
adjustments, major risk areas, changes in accounting policies, compliance with Singapore
Financial Reporting Standards, concerns and issues arising from the audits including any matters
which the auditors may wish to discuss in the absence of management, where necessary, before
their submission to our Board for approval;
(f)
review and discuss with the auditors any suspected fraud or irregularity, or infringement of any
relevant laws, rules or regulations, which has or is likely to have a material impact on our Group’s
operating results or financial position, and our management’s response;
(g)
review the independence of the external auditors and recommend their appointment or reappointment, remuneration and terms of engagement;
(h)
review transactions falling within the scope of Chapter 9 and Chapter 10 of the Catalist Rules (if
any);
(i)
review transactions between our Group and (i) EC, ESE and/or JH Italia or (ii) PT EuroSport, if any,
at least half yearly;
(j)
review potential conflicts of interest (if any) and set out a framework to resolve or mitigate any
potential conflicts of interests;
(k)
review and approve foreign exchange hedging policies implemented by our Group and conduct
periodic review of foreign exchange transactions and hedging policies and procedures;
(l)
review our key financial risk areas, with a view to providing an independent oversight on our
Group’s financial reporting, the outcome of such review to be disclosed in the annual reports or,
where the findings are material, announced immediately via SGX-NET;
(m)
undertake such other reviews and projects as may be requested by our Board and report to our
Board its findings from time to time on matters arising and requiring the attention of our Audit
Committee;
(n)
review arrangements by which our staff may, in confidence, raise concerns about possible
improprieties in matters of financial reporting and to ensure that arrangements are in place for the
independent investigations of such matter and for appropriate follow-up; and
(o)
generally to undertake such other functions and duties as may be required by statute or the
Catalist Rules, and by such amendments made thereto from time to time.
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Apart from the duties listed above, our Audit Committee shall commission and review the findings of
internal investigations into matters where there is any suspected fraud or irregularity, or failure of internal
controls or suspected infringement of any Singapore law, rule or regulation which has or is likely to have
a material impact on our Group’s operating results and/or financial position. In the event that a member of
our Audit Committee is interested in any matter being considered by our Audit Committee, he will abstain
from reviewing and deliberating on that particular transaction or voting on that particular resolution.
Our Audit Committee shall also commission an annual internal control audit until such time as the Audit
Committee is satisfied that our Group’s internal controls are robust and effective enough to mitigate our
Group’s internal control weaknesses (if any). Prior to the decommissioning of such an annual audit, our
Board is required to report to the SGX-ST and the Sponsor on how the key internal control weaknesses
have been rectified, and the basis for the decision to decommission the annual internal control audit.
Thereafter, such audits may be initiated by our Audit Committee as and when it deems fit to satisfy itself
that our Group’s internal controls remain robust and effective. Upon completion of the internal control
audit, appropriate disclosure will be made via SGXNET of any material, price-sensitive internal control
weaknesses and any follow-up actions to be taken by our Board.
Currently, based on the internal controls established and maintained by our Group, work performed by the
internal and external auditors, and reviews performed by our management, our Board of Directors and
our Audit Committee, our Board of Directors, to the best of its knowledge and belief, with the concurrence
of our Audit Committee, is of the opinion that the internal controls of our Group are adequate to address
financial, operational and compliance risks of our Group.
Our Board of Directors notes that all internal control systems contain inherent limitations and no system
of internal controls could provide absolute assurance against the occurrence of material errors, poor
judgement in decision-making, human errors, losses, fraud or other irregularities.
Our Audit Committee had conducted an interview with our CFO, Siu Yeung Sau. Our Audit Committee has
further considered the following:
(a)
the qualifications and past working experiences of Siu Yeung Sau (as described in the section
entitled “Directors, Executive Officers and Employees – Executive Officers” of this Offer Document)
which are compatible with his position as CFO of our Group;
(b)
Siu Yeung Sau’s past internal and external audit and accounting related experiences;
(c)
Siu Yeung Sau’s demonstration of the requisite competency in finance-related matters in
connection with the preparation for the listing of our Company;
(d)
the absence of negative feedback on Siu Yeung Sau from the representatives of our Group’s
Independent Auditors and Reporting Accountants; and
(e)
the absence of internal control weaknesses attributed to Siu Yeung Sau identified during the
internal control review conducted,
and is of the view that Siu Yeung Sau is suitable for the position of CFO of our Group. Further, after
making all reasonable enquiries, and to the best of their knowledge and belief, nothing has come to the
attention of our Audit Committee members to cause them to believe that Siu Yeung Sau does not have
the competence, character and integrity expected of a CFO of a listed issuer.
In addition, Siu Yeung Sau shall be subject to performance appraisal by our Audit Committee on an
annual basis to ensure satisfactory performance.
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Nominating Committee
Our Nominating Committee comprises Ng Tiak Soon, Tan Siok Sing and Lim Kim Quee. The Chairman of
the Nominating Committee is Tan Siok Sing.
Our Nominating Committee will be responsible for:
(a)
reviewing and recommending the nomination or re-nomination of our Directors having regard to our
Director’s contribution and performance;
(b)
determining on an annual basis whether or not a Director is independent;
(c)
deciding whether or not a Director is able to and has been adequately carrying out his duties as a
Director;
(d)
reviewing and approving any new employment of persons related to Directors, Executive Officers or
Controlling Shareholders and the proposed terms of their employment;
(e)
reviewing of board succession plans for Directors, in particular, the Chairman and the CEO;
(f)
developing a process for evaluation of the performance of the Board, its committees and Directors;
(g)
reviewing training and professional developments programs for the Board; and
(h)
appointment and re-appointment of Directors (including alternate directors, if applicable).
Our Nominating Committee will decide how our Board’s performance is to be evaluated and propose
objective performance criteria, subject to the approval of our Board, which address how our Board has
enhanced long-term shareholders’ value. Our Board will also implement a process to be carried out by
our Nominating Committee for assessing the effectiveness of our Board as a whole and for assessing the
contribution of each individual Director to the effectiveness of our Board. Each member of our Nominating
Committee shall abstain from voting on any resolutions in respect of the assessment of his performance
or re-nomination as a Director.
Remuneration Committee
Our Remuneration Committee comprises Ng Tiak Soon, Tan Siok Sing and Lim Kim Quee. The Chairman
of the Remuneration Committee is Lim Kim Quee.
Our Remuneration Committee will recommend to our Board a framework of remuneration for our
Directors and key executives, and determine specific remuneration packages for each Executive
Director. The recommendations of our Remuneration Committee shall be submitted for endorsement
by the entire Board. All aspects of remuneration, including but not limited to directors’ fees, salaries,
allowances, bonuses, the Awards to be granted under the Performance Share Plan, the Options to be
issued under the ESOS and other benefits-in-kind shall be covered by our Remuneration Committee.
Our Remuneration Committee will also review our obligations arising in the event of termination of our
Executive Directors’ and Executive Officers’ contracts of service to ensure that such contracts of service
contain fair and reasonable termination clauses which are not overly generous. Each member of our
Remuneration Committee shall abstain from voting on any resolutions in respect of his remuneration
package.
The remuneration of employees related to Directors, Executive Officers and Controlling Shareholders will
be reviewed annually by our Remuneration Committee to ensure that their remuneration packages are in
line with our staff remuneration guidelines and commensurate with their respective job scopes and level
of responsibilities. Any bonuses, pay increases and/or promotions for these related employees will also
be subject to the review and approval of our Remuneration Committee. In the event that a member of our
Remuneration Committee is related to the employee under review, he will abstain from participating in the
review.
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EXCHANGE CONTROLS
There are no exchange control restrictions in the repatriation of capital and the remittance of dividends,
interest or other payments into or out of Singapore or to our Group companies in Singapore. For further
details, please refer to the section entitled “Taxation” of this Offer Document.
155
TAXATION
The statements made herein regarding taxation are general in nature and are based on certain aspects
of the tax laws of Singapore and administrative guidelines issued by the relevant authorities in force as of
the date of this Offer Document and are subject to any changes in such laws or administrative guidelines,
or in the interpretation of these laws or guidelines, occurring after such date, which changes could be
made on a retrospective basis. These laws and guidelines are also subject to various interpretations and
the relevant tax authorities or the courts could later disagree with the explanations or conclusions set out
below. The statements below are not to be regarded as advice on the tax position of any holder of our
Shares or of any person acquiring, holding, selling or otherwise dealing with our Shares or on any tax
implications arising from the acquisition, ownership, sale or other dealings in respect of our Shares. The
statements made herein do not purport to be a comprehensive or exhaustive description of all of the tax
considerations that may be relevant to a decision to purchase, own or dispose of our Shares and do not
purport to deal with the tax consequences applicable to all categories of investors some of which (such
as dealers in securities) may be subject to special rules. Prospective Shareholders are advised to consult
their own tax advisers as to the Singapore or other tax consequences of the acquisition, ownership or
disposal of our Shares. The statements below are based on the assumption that our Company is a tax
resident in Singapore for Singapore income tax purposes. It is emphasised that neither our Company nor
any other persons involved in this Offer Document accepts responsibility for any tax effects or liabilities
resulting from the subscription for, purchase, holding or disposal of our Shares.
Individual income tax
An individual is a tax resident in Singapore in a year of assessment if, in the preceding year, he was
physically present in Singapore or he exercised an employment in Singapore (other than as a director of
a company) for 183 days or more, or if he ordinarily resides in Singapore.
Individual taxpayers who are Singapore tax residents are generally subject to Singapore income tax on
income accruing in or derived from Singapore. All foreign-sourced income received in Singapore on or
after 1 January 2004 derived by a Singapore tax resident individual (except for foreign-sourced income
received through a partnership in Singapore if the Singapore Comptroller of Income Tax is satisfied that
the tax exemption would be beneficial to the Singapore tax resident individual) is exempt from Singapore
income tax.
Non-resident individuals, subject to certain exceptions, are subject to Singapore income tax on income
accruing in or derived from Singapore. Non-resident individuals are not subject to tax on foreign-sourced
income received in Singapore.
A Singapore tax resident individual is taxed at progressive rates ranging from 0% to 20.0%. Income
derived by a non-resident individual is, subject to certain exceptions, normally taxed at the rate of 20.0%
except for Singapore employment income which is taxed at a flat rate of 15.0% or at resident rates,
whichever yields a higher tax.
In the Singapore Budget 2013, the Minister of Finance has announced that Singapore tax resident
individuals will enjoy a one-off personal income tax rebate for year of assessment 2013. The tax rebates
are as follows:
(a)
30.0% rebate, capped at S$1,500, for resident individual taxpayers aged below 60 years as at 31
December 2012; and
(b)
50.0% rebate, capped at S$1,500, for resident individual taxpayers aged 60 years and above as at
31 December 2012.
Corporate income tax
A company is regarded as resident in Singapore for Singapore tax purposes if the control and
management of its business is exercised in Singapore.
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Singapore resident companies are subject to Singapore income tax on income that accrues in or is
derived from Singapore and on foreign-sourced income received or deemed received in Singapore,
subject to certain exceptions.
Foreign-sourced income in the form of dividends, branch profits and service income received or deemed
to be received in Singapore by Singapore resident companies on or after 1 June 2003 are exempt from
Singapore income tax if the following prescribed conditions are all met:
(i)
the income is subject to tax of a similar character to income tax (by whatever name called) under
the law of the jurisdiction from which such income is received;
(ii)
at the time the income is received in Singapore, the highest rate of tax of a similar character to
income tax (by whatever name called) levied under the law of the territory from which the income
is received on any gains or profits from any trade or business carried on by any company in that
territory at that time is not less than 15.0%; and
(iii)
the Singapore Comptroller of Income Tax is satisfied that the tax exemption would be beneficial to
the Singapore resident company.
Non-resident companies are subject to income tax on income that accrues in or is derived from
Singapore, and on foreign-sourced income received or deemed received in Singapore, subject to certain
exceptions.
The corporate tax rate in Singapore for both resident and non-resident companies is currently 17.0%. In
arriving at the chargeable income, there is partial exemption on three-quarters (¾) of the first S$10,000
and one-half on the next S$290,000 of a company’s normal chargeable income. The remaining normal
chargeable income will be taxable at the corporate tax rate of 17.0%. In the Singapore Budget 2013, the
Minister of Finance has announced that both resident and non-resident companies will enjoy a corporate
income tax rebate from year of assessment 2013 to 2015. This rebate will be based on 30.0% of the
tax payable, subject to a cap of S$30,000 per year of assessment. This rebate will not apply to income
derived by a non-resident company that is subject to final withholding tax.
Dividend distributions
Singapore adopts the one-tier corporate tax system. Under the one-tier corporate tax system, the tax paid
by Singapore resident companies would constitute a final tax. Dividends payable by Singapore resident
companies under the one-tier corporate tax system would be tax exempt in Singapore in the hands of its
shareholders. Such dividends are referred to as tax exempt (one-tier) dividends.
There is no Singapore withholding tax on dividends paid to both Singapore resident shareholders as
well as non Singapore resident shareholders. Foreign shareholders are advised to consult their own tax
advisors in respect of the tax laws of their respective countries of residence, which are applicable on such
dividends received by them and the applicability of any double taxation agreement that their country of
residence may have with Singapore.
Gains on disposal of Shares
Singapore does not impose tax on capital gains. However, gains may be construed to be of an income
nature and subject to Singapore income tax if they arise from trade or business activities in Singapore.
Any profits from the disposal of our Shares, if regarded as capital profits, are not taxable in Singapore
unless the seller is regarded as having derived gains of an income nature in Singapore, in which case,
the disposal gains would be taxable as trading income.
Pursuant to Section 13Z of Income Tax Act (Chapter 134 of Singapore) and based on the IRAS e-Tax
Guide on “Income Tax: Certainty of Non-taxation of Companies’ Gains on Disposal of Equity Investments”
dated 30 May 2012, the gains derived from the disposal of ordinary shares in an investee company
during the period 1 June 2012 to 31 May 2017 (both dates inclusive) are not taxable if immediately prior
to the date of the share disposal, the divesting company had held at least 20.0% of the ordinary shares
157
in the investee company for a continuous period of at least 24 months. This rule does not apply to a
divesting company which is in a business of insurance whose gains or profits from the disposal of shares
are included as part of its income based on the provisions of Section 26 of the Income Tax Act (Chapter
134 of Singapore), or disposal of shares in an unlisted investee company that is in the business of trading
or holding Singapore immovable properties (other than the business of property development).
In addition, Shareholders who adopt the tax treatment to be aligned with the Singapore Financial
Reporting Standard 39 Financial Instruments: Recognition and Measurement may be taxed on gains
(not being gains in the nature of capital) even though no sale or disposal of our Shares is made.
Shareholders who may be subject to such tax treatment should consult their own accounting and tax
advisers regarding the Singapore income tax consequences of their subscription, purchase, holding or
disposal of our Shares.
Stamp duty
No stamp duty is payable if an instrument of transfer is not executed or the instrument of transfer is
executed outside Singapore and not brought into Singapore. However, stamp duty may be payable if the
instrument of transfer which is executed outside Singapore is received in Singapore.
There is no stamp duty payable on the subscription for, allotment or holding of our Shares.
Where our Shares evidenced in certificated form are acquired in Singapore, stamp duty is payable on
the instrument of transfer of our Shares at the rate of S$0.20 for every S$100.00 or part thereof of the
consideration for, or market value of, our Shares, whichever is higher. The stamp duty is borne by the
purchaser unless there is an agreement to the contrary.
Stamp duty is not applicable to electronic transfers of our Shares through the scripless trading system
operated by CDP.
Estate duty
Singapore estate duty has been abolished with effect from 15 February 2008.
GST
The sale of our Shares by a GST-registered investor belonging in Singapore through SGX-ST to another
person belonging in Singapore is an exempt supply and would not be subject to GST. In this regard, input
tax incurred by a GST-registered investor directly in making such exempt supplies may generally not be
recovered from the Comptroller of GST.
Where our Shares are supplied by a GST-registered investor to a person belonging outside Singapore
and who is outside Singapore at the time the sale is executed, the sale is generally a taxable sale subject
to GST at zero-rate. Any GST incurred by a GST-registered investor in the making of such taxable supply
in the course of or furtherance of a business carried on by him may generally be recovered from the
Comptroller of GST, subject to input tax recovery conditions.
Services consisting of arranging, broking, underwriting or advising on the issue, allotment or transfer of
ownership of our Shares rendered by a GST-registered person to an investor belonging in Singapore for
GST purposes in connection with the investor’s purchase, sale or holding of our Shares will be subject to
GST at the standard rate, currently at seven per cent. (7.0%). Similar services supplied contractually to
and for the direct benefit of an investor belonging outside Singapore and who is outside Singapore when
the services are performed would generally be subject to GST at zero-rate.
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CLEARANCE AND SETTLEMENT
Upon listing and quotation on Catalist, our Shares will be traded under the book-entry settlement system
of CDP and all dealings in and transactions of our Shares through Catalist will be effected in accordance
with the terms and conditions for the operation of Securities Accounts with CDP, as amended from time to
time.
Our Shares will be registered in the name of CDP or its nominee and held by CDP for and on behalf
of persons who maintain, either directly or through Depository Agents, Securities Accounts with CDP.
Persons named as direct Securities Account holders and Depository Agents in the Depository Register
maintained by CDP, rather than CDP itself, will be treated, under our Articles and the Companies Act,
as members of our Company in respect of the number of Shares credited to their respective Securities
Accounts.
Persons holding our Shares in Securities Accounts with CDP may withdraw the number of Shares they
own from the book-entry settlement system in the form of physical share certificate(s). Such share
certificates will, however, not be valid for delivery pursuant to trades transacted on Catalist, although
they will be prima facie evidence of title and may be transferred in accordance with our Articles. A fee
of S$10.00 for each withdrawal of 1,000 Shares or less and a fee of S$25.00 for each withdrawal of
more than 1,000 Shares is payable upon withdrawing our Shares from the book-entry settlement system
and obtaining physical share certificates. In addition, a fee of S$2.00 or such other amount as our
Directors may decide, is payable to the share registrar for each share certificate issued and a stamp
duty of S$10.00 is also payable where our Shares are withdrawn in the name of the person withdrawing
our Shares, or S$0.20 per S$100.00 or part thereof of the last-transacted price where our Shares are
withdrawn in the name of a third party. Persons holding physical share certificates who wish to trade
on Catalist must deposit with CDP their share certificates together with the duly executed and stamped
instruments of transfer in favour of CDP and have their respective Securities Accounts credited with the
number of Shares deposited before they can effect the desired trades. A fee of S$10.00 is payable upon
the deposit of each instrument of transfer with CDP. The above fees may be subject to such charges as
may be in accordance with CDP’s prevailing policies or the current tax policies that may be in force in
Singapore from time to time.
Transactions in our Shares under the book-entry settlement system will be reflected by the seller’s
Securities Account being debited with the number of Shares sold and the buyer’s Securities Account
being credited with the number of Shares acquired. No transfer stamp duty is currently payable for our
Shares that are settled on a book-entry basis.
A Singapore clearing fee for trades in our Shares on Catalist is payable at the rate of 0.04% of the
transaction value subject to a maximum of S$600.00 per transaction. The clearing fee, instrument of
transfer, deposit fee and share withdrawal fee may be subject to GST currently at seven per cent. (7.0%).
Dealings of our Shares will be carried out in Singapore dollars and will be effected for settlement through
CDP on a scripless basis. Settlement of trades on a normal “ready” basis on Catalist generally takes
place on the third Market Day following the transaction date and payment for the securities is generally
settled on the following business day. CDP holds securities on behalf of investors in Securities Accounts.
An investor may open a direct account with CDP or a sub-account with a CDP Depository Agent. The
CDP Depository Agent may be a member company of the SGX-ST, bank, merchant bank or trust
company.
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GENERAL AND STATUTORY INFORMATION
INFORMATION ON DIRECTORS AND EXECUTIVE OFFICERS
1.
Save as disclosed below, none of our Directors, Executive Officers or Controlling Shareholders is
or was involved in any of the following events:
(i)
during the last 10 years, an application or a petition under any bankruptcy laws of any
jurisdiction filed against him or against a partnership of which he was a partner at the time
when he was a partner or at any time within two (2) years from the date he ceased to be a
partner;
(ii)
during the last 10 years, an application or a petition under any law of any jurisdiction filed
against an entity (not being a partnership) of which he was a director or an equivalent
person or a key executive, at the time when he was a director or an equivalent person or
a key executive of that entity or at any time within two (2) years from the date he ceased to
be a director or an equivalent person or a key executive of that entity, for the winding-up or
dissolution of that entity or, where that entity is the trustee of a business trust, that business
trust, on the ground of insolvency;
(iii)
any unsatisfied judgments against him;
(iv)
a conviction of any offence, in Singapore or elsewhere, involving fraud or dishonesty which
is punishable with imprisonment, or has been the subject of any criminal proceedings
(including any pending criminal proceedings of which he is aware) for such purpose;
(v)
a conviction of any offence, in Singapore or elsewhere, involving a breach of any law or
regulatory requirement that relates to the securities or futures industry in Singapore or
elsewhere, or has been the subject of any criminal proceedings (including any pending
criminal proceedings of which he is aware) for such breach;
(vi)
during the last 10 years, judgment entered against him in any civil proceeding in
Singapore or elsewhere involving a breach of any law or regulatory requirement that
relates to the securities or futures industry in Singapore or elsewhere, or a finding of fraud,
misrepresentation or dishonesty on his part, or has been the subject of any civil proceedings
(including any pending civil proceedings of which he is aware) involving an allegation of
fraud, misrepresentation or dishonesty on his part;
(vii)
a conviction in Singapore or elsewhere of any offence in connection with the formation or
management of any entity or business trust;
(viii)
disqualification from acting as a director or an equivalent person of any entity (including the
trustee of a business trust), or from taking part directly or indirectly in the management of
any entity or business trust;
(ix)
has ever been the subject of any order, judgment or ruling of any court, tribunal or
governmental body permanently or temporarily enjoining him from engaging in any type of
business practice or activity;
(x)
has ever, to his knowledge, been concerned with the management or conduct, in Singapore
or elsewhere, of affairs of:
(a)
any corporation which has been investigated for a breach of any law or regulatory
requirement governing corporations in Singapore or elsewhere;
(b)
any entity (not being a corporation) which has been investigated for a breach of any
law or regulatory requirement governing such entities in Singapore or elsewhere;
160
(c)
any business trust which has been investigated for breach of any law or regulatory
requirement governing business trusts in Singapore or elsewhere; or
(d)
any entity or business trust which has been investigated for a breach of any law or
regulatory requirement that relates to the securities or futures industry in Singapore or
elsewhere,
in connection with any matter occurring or arising during the period when he was so
concerned with the entity or business trust; and
(xi)
has ever been the subject of any current or past investigation or disciplinary proceedings,
or has been reprimanded or issued any warning, by the Authority or any other regulatory
authority, exchange, professional body or government agency, whether in Singapore or
elsewhere.
Assistance rendered by Melvin Goh to the Commercial Affairs Department (“CAD”)
In June and August 2010, EuroSports Auto was on separate occasions requested by CAD to
render assistance in the provision of documentation and enforcement of court order related to an
investigation of the purchase of a Lamborghini automobile from EuroSports Auto by one of the
employees from the Singapore Land Authority. Melvin Goh, who was then the managing director of
EuroSports Auto, assisted with the investigation on behalf of EuroSports Auto. Neither EuroSports
Auto, Melvin Goh, Andy Goh or any of the other Directors or employees of our Group was the
subject of such investigation.
Assistance rendered by Melvin Goh to the Royal Malaysian Customs Department
To the best of Melvin Goh’s knowledge, in mid 2007, ESE was requested by the Royal Malaysian
Customs Department to assist in certain enquiries in relation to duties on automobiles paid by the
customers of ESE and Melvin Goh had attended one interview session. There was no investigation
into ESE or Melvin Goh. During the relevant period, Melvin Goh had an interest in 65.0% in the
share capital of ESE and was a director of ESE. ESE has become dormant since February 2011
and the shareholders of ESE intend to liquidate ESE in due course.
Winding-up petition against ESE
To the best of Melvin Goh’s knowledge, in June 2004, an accident occurred when one of the
employees of ESE test-drove an automobile of Damansara Indah Sdn Bhd (“DISB”) after repairs
were completed. MSIG Insurance (Malaysia) Berhad, the then insurer of DISB, through Crawford
& Company Adjusters (Malaysia) Sdn Bhd (“CCASB”), initiated legal proceedings against ESE for
claims associated with the accident by way of a subrogation action. Judgment was subsequently
entered against ESE for the sum of approximately RM330,000. In December 2011, DISB filed a
winding up petition in Malaysia against ESE in respect of the sum unpaid by ESE. In February
2012, ESE paid to CCASB a negotiated amount of RM50,000 in settlement of the aforesaid
suit. The matter was settled and the winding up petition was withdrawn by the petitioner. During
the relevant period, Melvin Goh had an interest in 65.0% in the share capital of ESE and was a
director of ESE.
Disclosure in relation to Ng Tiak Soon
Ng Tiak Soon was a director of Kengly Offset Printing Pte Ltd (“Kengly”), a company which was
incorporated in Singapore in 1979. Kengly was a dormant company when he joined as a director
on 25 March 1980. Sometime in late 1981/early 1982, or thereabouts, summons were issued by
the Registry of Companies (now known as the Accounting and Regulatory Authority of Singapore)
against the directors of Kengly for failure to hold Kengly’s annual general meeting and file Kengly’s
annual return within the requisite period. The matter was resolved upon payment of a fine of about
S$200 by each director. Subsequently, Ng Tiak Soon resigned as a director of Kengly on 30 April
1982.
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In late 2003 or 2004, Ng Tiak Soon had assisted in investigations conducted by the CAD in relation
to the affairs of a company incorporated in Singapore. Ng Tiak Soon was interviewed by the CAD
in his capacity as an audit partner of Messrs Ernst & Young, which had provided audit and other
services to this company. Ng Tiak Soon was not the subject of investigations and was not involved
in the management of the company at any time.
Disclosure in relation to Tan Siok Sing
(a)
Goldenray Consortium (S) Pte. Ltd. (“GCSPL”), a Singapore incorporated company, is
a holding company with a life-style eco-park development project in Beijing, PRC. On 7
October 2010, Tan Siok Sing was appointed to the board of directors of GCSPL as a nonexecutive director. Tan Siok Sing believes that he was invited to join the board of directors
of GCSPL mainly owing to his relevant expertise and corporate experience, which could be
leveraged by GCSPL in carrying out its intended expansion plans. Subsequently, due to lack
of progress in the aforesaid development project and lack of access to satisfactory updates
and information, Tan Siok Sing decided to resign on his own accord, which took effect as
of 27 August 2012. Tan Siok Sing was not involved in the day-to-day running of GCSPL’s
operations at any time.
On 2 March 2013, a winding up petition was filed against GCSPL by Beijing Sinozonto
Mining Investment Co., Ltd. (the “BSMI”), a PRC entity, under section 254(1)(e) of the
Companies Act on the ground that GCSPL is unable to pay its debts. This relates to litigation
proceedings initiated by BSMI against GCSPL in Singapore in relation to debts owed to
BSMI. The High Court of Singapore has ordered judgement against GCSPL in relation to
the debts owed and the execution and enforcement of the order in July and August 2013
respectively. In September 2013, the High Court of Singapore gave a stay order pending
the determination of appeal by GCSPL on the condition that it pays into the court a sum
of S$15.4 million as security for costs by 22 November 2013. We understand that GCSPL
has failed to pay the aforesaid sum and that a winding up order is expected to be granted
against GCSPL. Since the date of the winding up petition, Tan Siok Sing has not received
any notices to attend court hearing in connection with this matter.
(b)
Between 1985 and 2008, Tan Siok Sing was an executive director and a shareholder of
Millennium Securities Pte Ltd (formerly known as Tsang and Ong Stockbrokers Pte Ltd)
(“Millennium Securities”), a Singapore stockbroking firm. At the relevant time, he had
on separate occasions assisted in investigations conducted by CAD relating to matters
concerning clients of Millennium Securities. To the best of his knowledge, Tan Siok Sing was
not the subject matter of any such investigations.
Further, Millennium Securities was at the relevant time in breach of certain minimum capital
requirements relating to stockbroking firms. The matter was subsequently rectified. To the
best of his knowledge, no disciplinary action or proceeding or otherwise was taken against
Millennium Securities or its directors or shareholders for such breach.
2.
No option to subscribe for shares in, or debentures of, our Company has been granted to, or was
exercised by, any Director or Executive Officer within the last financial year.
3.
Save as disclosed in the sections entitled “Restructuring Exercise” and “Interested Person
Transactions” of this Offer Document, no Director or expert is (i) interested, directly or indirectly, in
the promotion of, or in any assets acquired or disposed of by, or leased to, our Company within two
(2) years preceding the Latest Practicable Date, or in any proposal for such acquisition or disposal
or leased as aforesaid, or (ii) interested where the interest consists in being a partner in a firm or a
holder of shares in or debentures of a corporation interested in the same.
4.
Save as disclosed in the section entitled “Interested Person Transactions’’ of this Offer Document,
no Director has any interest in any existing contract or arrangement which is significant in relation
to our business taken as a whole.
5.
There is no shareholding qualification for Directors in the Articles of our Company.
162
6.
No sum or benefit has been paid or has been agreed to be paid to any Director or expert who is
a partner of any firm in which a Director or expert or any corporation in which such Director or
expert holds shares or debentures, in cash or shares or otherwise by any person (i) (in the case of
a Director) to induce him to become, or to qualify him as our Director or otherwise for the services
rendered by him or by such firm or corporation in connection with the promotion or formation of our
Company or (ii) (in the case of an expert) for services rendered by him or such firm or corporation
in connection with the promotion or formation of our Company.
SHARE CAPITAL
7.
As at the Latest Practicable Date, there is only one (1) class of shares in the capital of our
Company, being ordinary shares in the share capital of our Company. There is no founder,
management or deferred share. Our existing Shares (including the Vendor Shares) do not carry
voting rights which are different from the Invitation Shares. The rights and privileges attached to our
Shares are stated in our Articles.
8.
Save as disclosed below and in the sections entitled “Share Capital” and “Restructuring Exercise”
of this Offer Document, there were no changes in the issued and paid-up share capital of our
Company or our subsidiaries within the three (3) years preceding the Latest Practicable Date:
Date of issue
Number of
shares issued
Purpose of
issue
Consideration
Resultant issued
share capital
Our Company
12 December 2012
2
Incorporation
S$2
S$2
29 November 2013
224,999,998
Restructuring
Exercise
S$7,952,861
S$7,952,863
1
Incorporation
S$1
S$1
1
Incorporation
S$1
S$1
Our subsidiaries
GTA Singapore
10 October 2012
deLaCour Singapore
5 November 2012
9.
Save as disclosed above and in the sections entitled “Share Capital” and “Restructuring Exercise”
of this Offer Document, no shares in, or debentures of, our Company or any of our subsidiaries has
been issued, or is proposed to be issued, as fully or partly paid-up for cash, or for a consideration
other than cash, during the last three (3) years preceding the date of this Offer Document.
LITIGATION
10.
Save as disclosed in this paragraph, our Group was not engaged in any legal or arbitration
proceedings in the last 12 months before the date of the lodgement of this Offer Document, as
plaintiff or defendant in respect of any claims or amounts which are material in the context of the
Invitation and our Directors have no knowledge of any proceedings pending or threatened against
our Company or any member of our Group or any facts likely to give rise to any litigation, claims or
proceedings which might materially affect the financial position or profitability of our Group.
EuroSports Auto
On 22 April 2008, EuroSports Auto initiated legal proceedings in Singapore against Hsiuh Fu Lin
for a sum of approximately S$120,000 in respect of a motor accident. On 12 December 2012,
NTUC Income Insurance Co-Operative Limited, the insurer of the defendant, made a payment of
approximately S$95,000 to EuroSports Auto in full discharge of all claims against Hsiuh Fu Lin. The
matter was settled.
163
EuroAutomobile
(a)
On 8 August 2011, Citycab Pte Ltd initiated legal proceedings in Singapore against
EuroAutomobile for a sum of approximately S$10,000 in respect of a motor accident
claim. In December 2012, a sum of approximately S$11,500 was paid by AXA Insurance
Singapore Pte Ltd, the insurer of our Group, in settlement of the third party claim against
EuroAutomobile. The matter was settled.
(b)
EuroAutomobile received a letter of demand dated 12 April 2013 from the solicitors acting
for a customer, demanding refund of a deposit amounting to S$170,000, which was paid by
the customer for an order for one (1) unit of Alfa Romeo automobile. We believe that there
is no basis for such claim for refund and we have engaged legal advisers to act for us in
this matter. As at the Latest Practicable Date, no legal proceeding has been initiated against
EuroAutomobile.
MATERIAL CONTRACTS
11.
The following contracts, not being contracts entered into in the ordinary course of business, have
been entered into by our Company and our subsidiaries within the two (2) years preceding the date
of lodgement of this Offer Document and are or may be material:
(a)
The conditional sale and purchase agreement dated 4 July 2012 between EuroSports Auto
and RBC Dexia Trust Services Singapore Limited (in its capacity as trustee of Cambridge
Industrial Trust) (the “Purchaser”), pursuant to which EuroSports Auto agreed to sell the
leasehold interest in respect of 30 Teban Gardens Crescent to the Purchaser, details of
which can be found in the section entitled “General Information on our Group – Properties
and Fixed Assets – Sale and Leaseback Arrangement” of this Offer Document;
(b)
The Options to Purchase dated 31 May 2012 from HLT International Pte Ltd (“HLT”) to
EuroSports Auto, pursuant to which EuroSports Auto agreed to acquire the premises at 7
and 9 Chang Charn Road from HLT;
(c)
The sale and purchase agreement dated 29 November 2013 entered into between our
Company and EuroAutomobile, pursuant to which our Company acquired the entire issued
and paid-up share capital of GTA Singapore and deLaCour Singapore, details of which can
be found in the section entitled “Restructuring Exercise – Acquisition of GTA Singapore and
deLaCour Singapore” of this Offer Document;
(d)
Company and Melvin Goh and Andy Goh (collectively as vendors), pursuant to which our
Company acquired the entire issued and paid-up share capital of EuroSports Auto, details
of which can be found in the section entitled “Restructuring Exercise – Acquisition of
EuroSports Auto” of this Offer Document;
(e)
Company and Melvin Goh and Andy Goh (collectively as vendors), pursuant to which our
Company acquired the entire issued and paid-up share capital of EuroAutomobile, details
of which can be found in the section entitled “Restructuring Exercise – Acquisition of
EuroAutomobile” of this Offer Document;
(f)
The call option agreement dated 17 January 2013 entered into between our Company and
the shareholders of E’ Collezione, pursuant to which our Company was granted a call option
to acquire 70.0% of the share capital of E’ Collezione, details of which can be found in the
section entitled “Interested Person Transactions” of this Offer Document; and
(g)
The Service Agreements of Melvin Goh and Andy Goh, each dated 6 December 2013,
details of which can be found in the section entitled “Directors, Executive Officers and
Employees – Service Agreements” of the Offer Document.
164
MISCELLANEOUS
12.
There has been no previous issue of Shares by our Company or offer for sale of our Shares to the
public within the two (2) years preceding the date of this Offer Document.
13.
There has not been any public take-over offer by a third party in respect of our Shares, or by
our Company in respect of shares of another corporation or units of a business trust, which has
occurred between 1 April 2012 and the Latest Practicable Date.
14.
Save as disclosed in the sub-section entitled “Management, Underwriting and Placement
Arrangements” under this section of this Offer Document, no commission, discount or brokerage
has been paid or other special terms granted within the two (2) years preceding the Latest
Practicable Date or is payable to any Director, promoter, expert, proposed director or any other
person for subscribing for and/or purchasing or agreeing to subscribe for and/or purchase or
procuring or agreeing to procure subscription for and/or purchase of any shares in or debentures of
our Company or any of our subsidiaries.
15.
Application monies received by our Company in respect of successful applications (including
successful applications which are subsequently rejected) will be placed in a separate non-interest
bearing account with the Receiving Bank. Any refund of all or part of the application monies to
unsuccessful or partially successful applicants will be made without any interest or any share of
revenue or any other benefit arising therefrom.
16.
Save as disclosed in this Offer Document, the financial condition and operations of our Group are
not likely to be affected by any of the following:
(a)
known trends or demands, commitments, events or uncertainties that will result in or are
reasonably likely to result in our Group’s liquidity increasing or decreasing in any material
way;
(b)
material commitments for capital expenditure;
(c)
unusual or infrequent events or transactions or any significant economic changes that may
materially affect the amount of reported income from operations; and
(d)
known trends or uncertainties that have had or that we reasonably expect to have a material
favourable or unfavourable impact on revenues or operating income.
17.
Save as disclosed in this Offer Document, our Directors are not aware of any event which has
occurred between the end of 1Q2014 and the Latest Practicable Date, which may have a material
effect on the financial position and results of operations of our Group or the financial information
provided in this Offer Document.
18.
We currently have no intention of changing the auditors of the companies in our Group after the
listing of our Company on Catalist.
Details including the name, address and professional qualifications (including membership in a
professional body) of the auditors of our Company for the Period under Review and up to the date
of lodgement of this Offer Document are as follows:
Partner-in-charge
Paul Lee Seng Meng
Address
Professional body
Professional
Qualification
RSM Chio Lim LLP
8 Wilkie Road #03-08
Wilkie Edge
Singapore 228095
Institute of Singapore
Chartered Accountants
Chartered Accountant
of Singapore
165
MANAGEMENT, UNDERWRITING AND PLACEMENT ARRANGEMENTS
19.
Pursuant to the Management and Sponsorship Agreement, our Company appointed CIMB
as introducing sponsor to manage the Invitation. CIMB will receive a management fee from our
Company for its services rendered in connection with the Invitation.
20.
Pursuant to the Underwriting and Placement Agreement, our Company and the Vendors appointed
CIMB Securities as the Underwriter to underwrite our offer of the Offer Shares for a commission of
three per cent. (3.0%) of the Invitation Price for each Offer Share, payable by our Company and the
Vendors (in the proportion in which the Offer Shares are offered by our Company and the Vendors)
pursuant to the Invitation. CIMB Securities may, at its absolute discretion, appoint one (1) or more
sub-underwriters for the Offer Shares.
21.
Pursuant to the Underwriting and Placement Agreement, our Company and the Vendors also
appointed CIMB Securities as the Placement Agent to subscribe for and/or purchase or procure
subscribers and/or purchasers for the Placement Shares for a placement commission of three per
cent. (3.0%) of the Invitation Price for each Placement Share, payable by our Company and the
Vendors (in the proportion in which the Offer Shares are offered by our Company and the Vendors)
pursuant to the Invitation. CIMB Securities may, at its absolute discretion, appoint one (1) or more
sub-placement agents for the Placement Shares.
22.
Brokerage payable for the Offer Shares will be paid by our Company to members of the SGX-ST,
merchant banks and members of the Association of Banks in Singapore in respect of successful
applications made on Application Forms bearing their respective stamps, or to Participating Banks
in respect of successful applications made through Electronic Applications at their respective ATMs
or their IB websites at the rate of 0.25% of the Invitation Price for each Offer Share or in the case
of DBS Bank, 0.75% of the Invitation Price for each Offer Share. In addition, DBS Bank will levy a
minimum brokerage fee of S$10,000.
23.
Subscribers of the Placement Shares may be required to pay a brokerage fee of up to one per
cent. (1.0%) of the Invitation Price to the Placement Agent or its sub-placement agents (including
the prevailing GST, if applicable).
24.
CIMB may, in its absolute discretion but after prior consultation with our Company and the Vendors,
by notice in writing rescind or terminate the Management and Sponsorship Agreement at any time
prior to or on the date of commencement of trading of our Shares on Catalist, on the occurrence of
certain events, including, inter alia:
(a)
the issue of a Stop Order by the SGX-ST, acting as agent on behalf of the Authority, or
other competent authority in accordance with the SFA, the SFR and/or the Catalist Rules
(notwithstanding that a supplementary or replacement offer document is subsequently
registered with the SGX-ST pursuant to the SFA, the SFR and/or the Catalist Rules);
(b)
there shall come to the knowledge of CIMB any breach of the warranties or undertakings in
the Management and Sponsorship Agreement or that any of the warranties or undertakings
in the Management and Sponsorship Agreement is untrue or incorrect or misleading;
(c)
any occurrence of a specified event (which is defined as an event occurring after the date
of the Management and Sponsorship Agreement and prior to the closing date which, if it
had occurred before the date of the Management and Sponsorship Agreement, would
have rendered any of the representations, warranties or undertakings contained in the
Management and Sponsorship Agreement untrue, incorrect or misleading in any material
respect) which comes to the knowledge of CIMB;
(d)
there shall have been:
(i)
in the reasonable opinion of CIMB, any adverse change, or any development or event
involving a prospective adverse change, in the condition (financial or otherwise),
business, trading position, operations, management, assets, prospects, performance
or general affairs of our Company or any of our Group Companies or our Group as a
whole; or
166
(ii)
any introduction or prospective introduction of or any change or prospective change
in any legislation, regulation, order, notice, policy, rule, guideline or directive (whether
or not having the force of law and including, without limitation, any directive, notice
or request issued by the Authority, the Securities Industry Council of Singapore,
the SGX-ST or any other relevant authorities) in Singapore or elsewhere or in the
interpretation or application thereof by any court, government body, regulatory
authority or other competent authority in Singapore or elsewhere; or
(iii)
any change, or any development involving a prospective change or any crisis in local,
national, regional or international monetary, financial and capital markets (including
stock market, foreign exchange market, inter-bank market or interest rates or money
market), political, industrial, economic, legal or monetary conditions, taxation or
exchange controls (including, without limitation, the imposition of any moratorium,
suspension or material restriction on trading in securities generally on the SGX-ST
(including Catalist)); or
(iv)
any event or series of events in the nature of force majeure (as defined in the
Management and Sponsorship Agreement); or
(v)
any proceedings, formal investigations or enquiries are commenced against our
Company, any of our Group companies or the Vendors or any Director of our
Company or any of our Group companies; or
(vi)
any other occurrence of any nature whatsoever,
which shall in the reasonable opinion of CIMB (1) results or be likely to result in a adverse
fluctuation or adverse conditions in the stock market in Singapore or elsewhere; or (2) be
likely to materially prejudice the success of the Invitation, subscription or placement of the
Invitation Shares (whether in the primary market or in respect of dealings in the secondary
market); or (3) make it impracticable, inadvisable, inexpedient or not commercial viable to
proceed with any of the transactions contemplated in the Management and Sponsorship
Agreement; or (4) be such that no reasonable manager and sponsor would have entered
into this Agreement; or (5) result or be likely to result in the issue of a Stop Order by the
SGX-ST, acting as agent on behalf of the Authority, or other competent authority pursuant
to the SFA, the SFR and/or the Catalist Rules; or (6) make it not commercially viable or
otherwise contrary to or outside the usual commercial practices of managers and sponsors
in Singapore for the Manager and Sponsor (as the case may be) to observe or perform or be
obliged to observe or perform the terms of the Management and Sponsorship Agreement; or
25.
(e)
without limiting the generality of the foregoing, if it comes to the notice of CIMB (1) any
statement contained in this Offer Document or the Application Forms which in the opinion of
CIMB has become or been discovered to be untrue, incorrect or misleading in any respect
or (2) circumstances or matters have arisen or have been discovered, which would, if this
Offer Document was to be issued at that time, constitute in the opinion of CIMB, an omission
of material information, and our Company and the Vendors fail to lodge a supplementary
or replacement offer document within a reasonable time after being notified of such
misrepresentation or omission or fail to promptly take such steps as CIMB may reasonably
require to inform investors of the lodgement of such supplementary offer document or
document; or
(f)
the Underwriting and Placement Agreement is terminated pursuant to its provisions.
The Underwriting and Placement Agreement is conditional upon, inter alia, the Management and
Sponsorship Agreement not having been terminated or rescinded pursuant to the provisions of the
Management and Sponsorship Agreement.
167
CONSENTS
26.
The Independent Auditors and Reporting Accountants have given and have not withdrawn their
written consent to the issue of this Offer Document with the inclusion herein of their Independent
Auditors’ Reports on the Audited Combined Financial Statements, the Unaudited Interim Combined
Financial Statements and the Unaudited Pro Forma Combined Financial Information as set out in
Appendices A, B and C of this Offer Document respectively, in the form and context in which they
are respectively included and references to its name in the form and context in which it appears in
this Offer Document and to act in such capacity in relation to this Offer Document.
27.
The Sponsor, the Underwriter and Placement Agent, the Solicitors to the Invitation and Legal
Adviser to our Company on Singapore Law, Solicitors to the Sponsor and the Underwriter and
Placement Agent, Legal Adviser to our Company in respect of Malaysian law, the Share Registrar,
the Receiving Bank and the Principal Bankers have each given and have not withdrawn their
written consents to the issue of this Offer Document with the inclusion herein of their names and
references thereto in the form and context in which they respectively appear in this Offer Document
and to act in such respective capacities in relation to this Offer Document.
28.
Each of the Solicitors to the Invitation and Legal Adviser to our Company on Singapore Law,
Solicitors to the Sponsor and the Underwriter and Placement Agent, Legal Adviser to our Company
in respect of Malaysian law, the Share Registrar, the Receiving Bank and the Principal Bankers do
not make, or purport to make, any statement in this Offer Document or any statement upon which a
statement in this Offer Document is based and, to the maximum extent permitted by law, expressly
disclaim and take no responsibility for any liability to any person which is based on, or arises out of,
the statements, information or opinions in this Offer Document.
RESPONSIBILITY STATEMENT BY OUR DIRECTORS AND THE VENDORS
29.
This Offer Document has been seen and approved by our Directors and the Vendors and they
collectively and individually accept full responsibility for the accuracy of the information given in
this Offer Document and confirm after making all reasonable enquiries, that to the best of their
knowledge and belief, this Offer Document constitutes full and true disclosure of all material
facts about the Invitation and our Group, and our Directors and the Vendors are not aware of
any facts the omission of which would make any statement in this Offer Document misleading.
Where information in this Offer Document has been extracted from published or otherwise publicly
available sources or obtained from a named source, the sole responsibility of our Directors and
the Vendors has been to ensure that such information has been accurately and correctly extracted
from those sources and/or reproduced in this Offer Document in its proper form and context.
DOCUMENTS AVAILABLE FOR INSPECTION
30.
The following documents or copies thereof may be inspected at our registered office at 30 Teban
Gardens Crescent, Singapore 608927 during normal business hours for a period of six (6) months
from the date of registration of this Offer Document by the SGX-ST acting as agent on behalf of the
Authority:
(a)
the Memorandum and Articles of Association of our Company;
(b)
the Audited Combined Financial Statements as set out in Appendix A of this Offer Document;
(c)
the Unaudited Interim Combined Financial Statements as set out in Appendix B of this Offer
Document;
(d)
the Unaudited Pro Forma Combined Financial Information as set out in Appendix C of this
Offer Document;
(e)
the material contracts referred to in this Offer Document;
(f)
the letters of consent referred to in this Offer Document; and
(g)
the audited financial statements of all companies within our Group for FY2011, FY2012 and
FY2013.
168
APPENDIX A
INDEPENDENT AUDITORS’ REPORT AND THE AUDITED COMBINED
FINANCIAL STATEMENTS FOR THE REPORTING YEARS ENDED
31 MARCH 2011, 2012 AND 2013
(Registration No: 201230284Z)
Combined Financial Statements
For the Reporting Years Ended 31 March 2011, 2012 and 2013
A-1
INDEPENDENT AUDITORS’ REPORT ON THE AUDITED COMBINED FINANCIAL STATEMENTS FOR
THE REPORTING YEARS ENDED 31 MARCH 2011, 2012 AND 2013 OF EUROSPORTS GLOBAL
LIMITED
7 January 2014
The Board of Directors
Singapore 608927
Dear Sirs
Report on the Combined Financial Statements
We have audited the accompanying combined financial statements of EuroSports Global Limited (the
“Company”) and its subsidiaries (the “Group”), comprising the combined statement of financial position
as at 31 March 2011, 2012 and 2013, and the combined statement of comprehensive income, combined
statement of changes in equity and combined statement of cash flows of the Group for the reporting
years ended 31 March 2011, 2012 and 2013, and a summary of significant accounting policies and other
explanatory information, as set out on pages A-4 to A-39.
As described in Note 1 to the combined financial statements, the combined financial statements for the
reporting years ended 31 March 2011, 2012 and 2013 were presented in a manner similar to a “poolingof-interest” method to give retrospective application to transactions involving entities under common
control, as a result of a Restructuring Exercise undertaken.
Management’s Responsibility for the Financial Statements
Management is responsible for the preparation of these combined financial statements that give a true
and fair view in accordance with the provisions of the 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 statements of comprehensive income and statements of financial position and to maintain
accountability of assets.
Independent Auditor’s Responsibility
Our responsibility is to express an opinion on these combined 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 combined financial statements. The procedures selected depend on the auditor’s judgment, including
the assessment of the risks of material misstatement of the combined financial statements, whether due
to fraud or error. In making those risk assessments, the auditor considers internal control relevant to
the entity’s preparation of the combined financial statements that give a true and fair view in order to
design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing
an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the
appropriateness of accounting policies used and the reasonableness of accounting estimates made by
management, as well as evaluating the overall presentation of the combined financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our audit opinion.
A-2
INDEPENDENT AUDITORS’ REPORT ON THE AUDITED COMBINED FINANCIAL STATEMENTS FOR
THE REPORTING YEARS ENDED 31 MARCH 2011, 2012 AND 2013 OF EUROSPORTS GLOBAL
LIMITED
Opinion
In our opinion, the combined financial statements of the Group are properly drawn up in accordance with
the provisions of the Singapore Financial Reporting Standards so as to give a true and fair view of the
state of affairs of the Group as at 31 March 2011, 2012 and 2013 and of the results, changes in equity
and cash flows of the Group for the reporting years ended 31 March 2011, 2012, and 2013.
Restriction on Distribution and Use
This report has been prepared solely for inclusion in the Offer Document of the Company in connection
with the proposed initial public offering of ordinary shares in the capital of the Company on Catalist of the
Singapore Exchange Securities Trading Limited.
Yours faithfully
RSM Chio Lim LLP
Public Accountants and
Singapore
7 January 2014
Partner in charge: Paul Lee Seng Meng
A member of the Institute of Singapore Chartered Accountants
A-3
Combined Statements of Comprehensive Income
Notes
2011
2012
2013
$’000
$’000
$’000
107,178
113,042
86,368
Cost of Sales
(94,651)
(94,513)
(69,171)
Gross Profit
12,527
18,529
17,197
1,529
2,945
4,135
13
97
70
18
(92)
(489)
Revenue
4
Other Income
5
Interest Income
6
7
(2,794)
(3,670)
(3,362)
7
(7,293)
(7,980)
(8,740)
Finance Costs
7
Profit Before Tax
(740)
3,260
Income Tax Expense
9
(534)
(502)
(466)
9,327
8,345
(1,691)
(1,626)
Profit, Net of Tax
2,726
7,636
6,719
2,726
7,636
6,719
1.21
3.39
2.99
Earnings Per Share (Cents)
Basic and diluted
10
The accompanying notes form an integral part of these financial statements.
A-4
Combined Statements of Financial Position
As at 31 March 2011, 2012 and 2013
Notes
2011
2012
2013
$’000
$’000
$’000
ASSETS
Non-Current Assets
12
Other Assets, Non-Current
3,328
7,242
22,279
8
–
–
Other Financial Assets
13
15
–
–
Finance Lease Receivables, Non-Current
14
53
34
–
3,404
7,276
22,279
15
18,241
10,668
16,958
16
5,318
15,058
6,362
Finance Lease Receivables, Current
14
23
23
–
Current Assets
Inventories
Other Assets, Current
17
454
674
2,985
18
1,367
420
5,942
25,403
26,843
32,247
Total Assets
28,807
34,119
54,526
3,500
3,500
3,500
Equity
Share Capital
19
(Accumulated Losses) Retained Earnings
Total Equity
(1,498)
1,138
5,357
2,002
4,638
8,857
Other Financial Liabilities, Non-Current
20
1,486
369
12,521
21
–
2,034
1,346
1,486
2,403
13,867
534
1,698
1,662
Current Liabilities
Income Tax Payable
22
6,431
7,761
6,443
Other Financial Liabilities, Current
20
7,241
8,057
17,964
21
11,113
9,562
5,733
25,319
27,078
31,802
Total Liabilities
26,805
29,481
45,669
28,807
34,119
54,526
A-5
Combined Statements of Changes in Equity
Balance at 1 April 2010
Total
Equity
Share
Capital
(Accumulated
Losses)
Retained
Earnings
$’000
$’000
$’000
3,500
(4,224)
(724)
Movement in Equity:
Total Comprehensive Income for the Year
2,726
–
Balance at 31 March 2011
2,002
3,500
2,726
7,636
–
7,636
–
(5,000)
(1,498)
Movements in Equity:
Dividends (Note 11)
(5,000)
Balance at 31 March 2012
4,638
3,500
1,138
6,719
–
6,719
–
(2,500)
Dividends (Note 11)
(2,500)
Closing Balance at 31 March 2013
8,857
A-6
3,500
5,357
Combined Statements of Cash Flows
2011
2012
2013
$’000
$’000
$’000
Cash Flows From Operating Activities
Profit before Tax
3,260
9,327
8,345
Adjustment for:
Deferred Income
–
Depreciation of Property, Plant and Equipment
730
Losses (Gains) on Disposal of Plant and Equipment
1
(508)
1,527
(48)
(448)
1,808
(82)
Interest Income
(13)
(97)
(70)
Interest Expenses
740
502
466
Other Financial Assets Written Off
–
15
–
Other Assets Written Off
–
8
–
Plant and Equipment Written Off
–
–
194
Operating Cash Flows before Changes in Working Capital
4,718
10,726
10,213
Inventories
3,149
7,573
(3,421)
(1,534)
(9,740)
8,696
Finance Lease Receivables
13
Other Assets
3,226
Other Liabilities
(614)
(825)
Net Cash Flows From Operations
8,133
Income Taxes Paid
(250)
Net Cash Flows From Operating Activities
7,883
19
57
(220)
(2,311)
(2,059)
(4,069)
205
6,504
(527)
5,977
(1,318)
7,847
(1,662)
6,185
Cash Flows From Investing Activities
Purchase of Property, Plant and Equipment (Note 18B)
Disposals of Plant and Equipment
Interest Received
Net Cash Flows Used In Investing Activities
(391)
(631)
100
60
(16,834)
551
13
97
70
(278)
(474)
(16,213)
Cash Flows From Financing Activities
(Decrease) Increase in Other Financial Liabilities
(4,899)
Increase from New Borrowings
–
Finance Lease Repayments
(1,172)
Dividends Paid to Equity Owners
–
Interest Paid
(740)
Cash Restricted in Use Over 3 Months
–
Net Cash Flows (Used In) From Financing Activities
(6,811)
1,553
5,311
–
14,160
(2,626)
(2,855)
(4,875)
(2,500)
(502)
(466)
–
(360)
(6,450)
13,290
(947)
3,262
Net Increase (Decrease) in Cash and Cash Equivalents
794
Cash and Cash Equivalents, Statement of Cash Flows,
Beginning Balance
573
1,367
420
1,367
420
3,682
Ending Balance (Note 18A)
A-7
Notes to Combined Financial Statements
31 March 2011, 2012 and 2013
1.
General
1.1.
The Company
The Company is incorporated in Singapore with limited liability. The Company changed its name to
EuroSports Global Limited upon its conversion to a public limited company on 5 December 2013.
The combined financial statements are presented in Singapore dollars and all values are rounded
to the nearest thousand ($’000) except when otherwise indicated.
The principal activities of the Company are those of an investment holding company and the
provision of management services to the Group. The principal activities and the details of the
subsidiaries are described below.
The report is prepared solely for inclusion in the Offer Document in connection with the proposed
listing of the Company’s shares on Catalist of Singapore Exchange Securities Trading Limited.
The registered office address of the Company is: 30 Teban Gardens Crescent, Singapore 608927.
The Company is situated in Singapore.
1.2.
The Restructuring Exercise
The Group was formed through the Restructuring Exercise which involved a series of acquisitions
and the rationalisation of the corporate and shareholding structure for the purposes of the
Invitation. Pursuant to the Restructuring Exercise, the Company became the holding company of
the Group.
The Restructuring Exercise involved the following steps:
(a)
Incorporation of the Company
The Company was incorporated on 12 December 2012 in the Republic of Singapore in
accordance with the Companies Act as a private limited company with an issued and paidup share capital of S$2.00 comprising two (2) Shares each, held by Melvin Goh and Andy
Goh.
(b)
Incorporation of Spania GTA Asia Pacific Private Ltd.
Spania GTA Asia Pacific Private Ltd. was incorporated on 10 October 2012 in the Republic
of Singapore in accordance with the Companies Act as a private limited company with an
issued and paid-up share capital of S$1.00 comprising one (1) ordinary share, which was
wholly-owned by EuroAutomobile Pte. Ltd.
(c)
Incorporation of deLaCour Asia Pacific Pte. Ltd.
deLaCour Asia Pacific Pte. Ltd. was incorporated on 5 November 2012 in the Republic of
Singapore in accordance with the Companies Act as a private limited company with an
issued and paid-up share capital of S$1.00 comprising one (1) ordinary share, which was
wholly-owned by EuroAutomobile Pte. Ltd.
(d)
Acquisition of Spania GTA Asia Pacific Private Ltd. and deLaCour Asia Pacific Pte.
Ltd.
On 29 November 2013, the Company entered into a sale and purchase agreement with
EuroAutomobile Pte. Ltd. pursuant to which the Company acquired from EuroAutomobile Pte.
Ltd. the entire issued and paid-up capital of each of Spania GTA Asia Pacific Private Ltd. and
deLaCour Asia Pacific Pte. Ltd. at a nominal consideration of S$1.00 for each of Spania GTA
Asia Pacific Private Ltd. and deLaCour Asia Pacific Pte. Ltd.
Upon completion of the aforesaid acquisition, each of Spania GTA Asia Pacific Private Ltd.
and deLaCour Asia Pacific Pte. Ltd. became wholly-owned subsidiaries of the Company.
A-8
1.
General (Cont’d)
1.2.
The Restructuring Exercise (Cont’d)
(e)
Acquisition of EuroSports Auto Pte Ltd (“EuroSports Auto”)
Melvin Goh and Andy Goh pursuant to which the Company acquired from Melvin Goh
and Andy Goh, the entire issued and paid-up capital of EuroSports Auto at an aggregate
consideration of S$7,952,859 (the “EuroSports Purchase Consideration”), which was
determined based on the audited Net Tangible Asset of EuroSports Auto as at 31 March
2013. The EuroSports Purchase Consideration was satisfied by the allotment and issue of an
aggregate of 224,999,996 Shares, credited as fully paid in the following manner:
Name of allottee
Number of shares issued to such allottee
Melvin Goh
134,999,998
Andy Goh
89,999,998
Total
224,999,996
Upon completion of the aforesaid acquisition, EuroSports Auto became a wholly-owned
subsidiary of the Company.
(f)
Acquisition of EuroAutomobile Pte. Ltd. (“EuroAutomobile”)
Melvin Goh and Andy Goh pursuant to which the Company acquired from Melvin Goh
and Andy Goh, the entire issued and paid-up capital of EuroAutomobile at a nominal
consideration of S$2.00 which was satisfied by the allotment and issue of one (1)
Share, credited as fully paid, to each of Melvin Goh and Andy Goh. As at 30 June 2013,
EuroAutomobile was in a negative Net Tangible Asset position. As EuroAutomobile was in a
negative NTA position at the time of acquisition, EuroAutomobile was acquired at a nominal
consideration.
Upon completion of the aforesaid acquisition, EuroAutomobile became a wholly-owned
subsidiary of the Company.
(g)
Disposal of shares in Brickfree Pte. Ltd. and E-Elements Pte. Ltd.
As part of the Restructuring Exercise to dispose of the non-luxury lifestyle businesses prior
to the listing on Catalist,the Company completed the following disposals:
(a)
On 30 September 2012, EuroSports Auto Pte Ltd disposed 500,000 ordinary shares
in Brickfree Pte. Ltd. to Melvin Goh at a cash consideration of S$500,000. Such
consideration for Brickfree Pte. Ltd. was based on the initial investment amount by
EuroSports Auto Pte Ltd; and
(b)
On 12 September 2012, EuroSports Auto Pte Ltd transferred 15,000 ordinary shares
in E-Elements Pte. Ltd. to Andy Goh at a nominal consideration of S$1.00. The
aggregate amount of S$75,000 invested by EuroSports Auto Pte Ltd in E-Elements
Pte. Ltd. has since been written-off. The consideration of E-Elements Pte. Ltd. was
nominal as it was a loss-making entity. The shareholders’ loan of S$60,000 and
the subscription consideration of S$15,000 were written-off as such payables were
deemed not recoverable, taking into consideration that E-Elements Pte. Ltd. was a
dormant company with a negative Net Asset Value at the time of the disposal.
A-9
1.
General (Cont’d)
1.2.
The Restructuring Exercise (Cont’d)
The subsidiaries held by the Company as of the date of this report are as follows:Percentage
of equity held
by Group
Name of Subsidiary, Country of Incorporation,
Place of Operations and Principal Activities
Paid up capital
$’000
EuroSports Auto Pte Ltd
(a)
100%
2,000
100%
1,500
Singapore
Trading and distribution of automobiles and automobile related parts
and accessories
EuroAutomobile Pte. Ltd. (a)
Singapore
and accessories; and trading and distribution of watches and related
accessories
Spania GTA Asia Pacific Private Ltd. (a) (b)
100%
(b)
100%
(c)
Singapore
and accessories
deLaCour Asia Pacific Pte. Ltd. (a) (c)
Singapore
Trading and distribution of watches and related accessories
(a)
(b)
(c)
1.3.
Audited by RSM Chio Lim LLP in Singapore.
Newly incorporated on 10 October 2012 and paid up capital is $1.
Newly incorporated on 5 November 2012 and paid up capital is $1.
Basis of Preparation and Presentation of the Combined Financial Statements
The Group’s combined financial statements for the reporting years ended 31 March 2011, 2012
and 2013 were prepared primarily based on the audited financial statements of the subsidiaries,
EuroSports Auto Pte Ltd and EuroAutomobile Pte. Ltd. The financial statements of the reporting
years ended 31 March 2011 was reaudited by RSM Chio Lim LLP. RSM Chio Lim LLP were
the statutory auditors for the reporting years ended 31 March 2012 and 2013. Where individual
companies had different reporting year-ends, the financial statements were re-aligned to 12 months
from 1 April to 31 March for the reporting year ended 31 March 2011.
The Group restructuring has been accounted for using the “pooling-of-interest’’ method.
Accordingly, the Group’s combined financial statements for the reporting years ended 31 March
2011, 2012 and 2013 have been prepared as if the Group has been in existence prior to the
Restructuring Exercise. The assets and liabilities are brought into the combined statements of
financial position at the existing carrying amounts. The figures of the Group for the reporting years
ended 31 March 2011, 2012 and 2013 represent the combined results, state of affairs, changes in
equity and cash flows as if the Group, pursuant to the Restructuring Exercise, had existed since 1
April 2010.
A-10
2.
Summary of Significant Accounting Policies
Accounting Convention
The financial statements have been prepared in accordance with the Singapore Financial
Reporting Standards (“FRS”) and the related Interpretations to FRS (“INT FRS”) as issued by
the Singapore Accounting Standards Council. The financial statements are prepared on a going
concern basis under the historical cost convention except where an FRS requires an alternative
treatment (such as fair values) as disclosed where appropriate in these financial statements.
Basis of Preparation of the Financial Statements
The preparation of financial statements in conformity with generally accepted accounting principles
requires the management to make estimates and assumptions that affect the reported amounts of
assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the reporting year.
Actual results could differ from those estimates. The estimates and assumptions are reviewed
on an ongoing basis. Apart from those involving estimations, management has made judgements
in the process of applying the entity’s accounting policies. The areas requiring management’s
most difficult, subjective or complex judgements, or areas where assumptions and estimates are
significant to the financial statements, are disclosed at the end of this footnote, where applicable.
Basis of Presentation
The combined financial statements include the financial statements made up to the end of the
reporting year of the Company and all of its directly and indirectly controlled subsidiaries. The
combined financial statements are the financial statements of the Group presented as those of a
single economic entity. The combined financial statements are prepared using uniform accounting
policies for like transactions and other events in similar circumstances. All significant intragroup
balances and transactions, including profit or loss and other comprehensive income items and
dividends are eliminated on consolidation. The results of any subsidiary acquired or disposed of
during the reporting year are accounted for from the respective dates of acquisition or up to the
date of disposal which is the date on which effective control is obtained of the acquired business
until that control ceases.
Changes in the Group’s ownership interest in a subsidiary that do not result in the loss of control
are accounted for within equity. When the Group loses control of a subsidiary it derecognises the
assets and liabilities and related equity components from the former subsidiary. Any gain or loss is
recognised in profit or loss. Any investment retained in the former subsidiary is measured at its fair
value at the date when control is lost and is subsequently accounted as available-for-sale financial
assets in accordance with FRS 39.
Revenue Recognition
The revenue amount is the fair value of the consideration received or receivable from the gross
inflow of economic benefits during the reporting year arising from the course of the activities of the
entity and it is shown net of any related sales taxes, estimated returns and rebates. Revenue from
the sale of goods is recognised when significant risks and rewards of ownership are transferred
to the buyer, there is neither continuing managerial involvement to the degree usually associated
with ownership nor effective control over the goods sold, and the amount of revenue and the
costs incurred or to be incurred in respect of the transaction can be measured reliably. Revenue
from rendering of services that are not significant transactions is recognised as the services
are provided or when the significant acts have been completed. Interest is recognised using the
effective interest method. Rental revenue is recognised on a time-proportion basis that takes into
account the effective yield on the asset on a straight-line basis over the lease term.
A-11
2.
Summary of Significant Accounting Policies (Cont’d)
Employee Benefits
Contributions to defined contribution retirement benefit plans are recorded as an expense as
they fall due. The entity’s legal or constructive obligation is limited to the amount that it agrees
to contribute to an independently administered fund which is the Central Provident Fund in
Singapore (a government managed retirement benefit plan). For employee leave entitlement the
expected cost of short-term employee benefits in the form of compensated absences is recognised
in the case of accumulating compensated absences, when the employees render service that
increases their entitlement to future compensated absences; and in the case of non-accumulating
compensated absences, when the absences occur. A liability for bonuses is recognised where the
entity is contractually obliged or where there is constructive obligation based on past practice.
Income Tax
The income taxes are accounted using the asset and liability method that requires the recognition
of taxes payable or refundable for the current year and deferred tax liabilities and assets for the
future tax consequence of events that have been recognised in the financial statements or tax
returns. The measurements of current and deferred tax liabilities and assets are based on
provisions of the enacted or substantially enacted tax laws; the effects of future changes in tax laws
or rates are not anticipated. Income tax expense represents the sum of the tax currently payable
and deferred tax. Current and deferred income taxes are recognised as income or as an expense
in profit or loss unless the tax relates to items that are recognised in the same or a different period
outside profit or loss. For such items recognised outside profit or loss the current tax and deferred
tax are recognised (a) in other comprehensive income if the tax is related to an item recognised in
other comprehensive income; and (b) directly in equity if the tax is related to an item recognised
directly in equity. Deferred tax assets and liabilities are offset when they relate to income taxes
levied by the same income tax authority. The carrying amount of deferred tax assets is reviewed
at end of each reporting year and is reduced, if necessary, by the amount of any tax benefits
that, based on available evidence, are not expected to be realised. A deferred tax amount is
recognised for all temporary differences, unless the deferred tax amount arises from the initial
recognition of an asset or liability in a transaction which (i) is not a business combination; and (ii) at
the time of the transaction, affects neither accounting profit nor taxable profit (tax loss). A deferred
tax liability or asset is recognised for all taxable temporary differences associated with investments
in subsidiaries except where the reporting entity is able to control the timing of the reversal of
the taxable temporary difference and it is probable that the taxable temporary difference will not
reverse in the foreseeable future or for deductible temporary differences, they will not reverse in the
foreseeable future and they cannot be utilised against taxable profits.
Foreign Currency Transactions
The functional currency is the Singapore dollar as it reflects the primary economic environment in
which the entity operates. Transactions in foreign currencies are recorded in the functional currency
at the rates ruling at the dates of the transactions. At the end of each reporting year, recorded
monetary balances and balances measured at fair value that are denominated in non-functional
currencies are reported at the rates ruling at the end of the reporting year and fair value dates
respectively. All realised and unrealised exchange adjustment gains and losses are dealt with in
profit or loss except when recognised in other comprehensive income and if applicable deferred in
equity such as for qualifying cash flow hedges. The presentation is in the functional currency.
Borrowing Costs
All borrowing costs that are interest and other costs incurred in connection with the borrowing of
funds that are directly attributable to the acquisition, construction or production of a qualifying asset
that necessarily take a substantial period of time to get ready for their intended use or sale are
capitalised as part of the cost of that asset until substantially all the activities necessary to prepare
the qualifying asset for its intended use or sale are complete. Other borrowing costs are recognised
as an expense in the period in which they are incurred. The interest expense is calculated using
the effective interest rate method.
A-12
2.
Depreciation is provided on a straight-line basis to allocate the gross carrying amounts of the
assets less their residual values over their estimated useful lives of each part of an item of these
assets. The annual rates of depreciation are as follows:
Plant and equipment
Renovations
Motor vehicles
Leasehold property
and improvements
–
–
–
20% to 100%
20%
20%
–
8% - 16% (over remaining lease term)
An asset is depreciated when it is available for use until it is derecognised even if during that
period the item is idle. Fully depreciated assets still in use are retained in the financial statements.
Property, plant and equipment are carried at cost on initial recognition and after initial recognition
at cost less any accumulated depreciation and any accumulated impairment losses. The gain or
loss arising from the derecognition of an item of property, plant and equipment is determined as
the difference between the net disposal proceeds, if any, and the carrying amount of the item and
is recognised in profit or loss. The residual value and the useful life of an asset is reviewed at least
at the end of each reporting year and, if expectations differ significantly from previous estimates,
the changes are accounted for as a change in an accounting estimate, and the depreciation charge
for the current and future periods are adjusted.
Cost also includes acquisition cost, borrowing cost capitalised and any cost directly attributable
to bringing the asset or component to the location and condition necessary for it to be capable of
operating in the manner intended by management. Subsequent costs are recognised as an asset
only when it is probable that future economic benefits associated with the item will flow to the entity
and the cost of the item can be measured reliably. All other repairs and maintenance are charged
to profit or loss when they are incurred.
Leases
Whether an arrangement is, or contains, a lease, it is based on the substance of the arrangement
at the inception date, that is, whether (a) fulfilment of the arrangement is dependent on the use of
a specific asset or assets (the asset); and (b) the arrangement conveys a right to use the asset.
Leases are classified as finance leases if substantially all the risks and rewards of ownership are
transferred to the lessee. All other leases are classified as operating leases. At the commencement
of the lease term, a finance lease is recognised as an asset and as a liability in the statement of
financial position at amounts equal to the fair value of the leased asset or, if lower, the present
value of the minimum lease payments, each determined at the inception of the lease. The discount
rate used in calculating the present value of the minimum lease payments is the interest rate
implicit in the lease, if this is practicable to determine; if not, the lessee’s incremental borrowing
rate is used. Any initial direct costs of the lessee are added to the amount recognised as an asset.
The excess of the lease payments over the recorded lease liability are treated as finance charges
which are allocated to each reporting year during the lease term so as to produce a constant
periodic rate of interest on the remaining balance of the liability. Contingent rents are charged
as expenses in the reporting year in which they are incurred. The assets are depreciated as
owned depreciable assets. Leases where the lessor effectively retains substantially all the risks
and benefits of ownership of the leased assets are classified as operating leases. For operating
leases, lease payments are recognised as an expense in profit or loss on a straight-line basis
over the term of the relevant lease unless another systematic basis is representative of the time
pattern of the user’s benefit, even if the payments are not on that basis. Lease incentives received
are recognised in profit or loss as an integral part of the total lease expense. Rental income from
operating leases is recognised in profit or loss on a straight-line basis over the term of the relevant
lease unless another systematic basis is representative of the time pattern of the user’s benefit,
even if the payments are not on that basis. Initial direct cost incurred in negotiating and arranging
an operating lease are added to the carrying amount of the leased asset and recognised on a
straight-line basis over the lease term.
A-13
2.
Finance Leases of Lessor
An amount due from a lessee is recognised as receivables at an amount equal to the net
investment in the lease. The recognition of finance income is based on a pattern reflecting a
constant periodic rate of return on the lessor’s net investment outstanding in respect of the finance
leases. Rental income from operating leases is recognised on a straight-line basis over the term of
the relevant lease.
Subsidiaries
A subsidiary is an entity including unincorporated and special purpose entity that is controlled by
the Group. Control is the power to govern the financial and operating policies of an entity so as to
obtain benefits from its activities accompanying a shareholding of more than one half of the voting
rights or the ability to appoint or remove the majority of the members of the Board of Directors
or to cast the majority of votes at meetings of the Board of Directors. The existence and effect of
potential voting rights that are currently exercisable or convertible are considered when assessing
whether the Group controls another entity.
Business Combinations
Business combinations are accounted for by applying the acquisition method. There were none
during the reporting years.
Impairment of Non-Financial Assets
Irrespective of whether there is any indication of impairment, an annual impairment test is
performed at the same time every year on an intangible asset with an indefinite useful life or an
intangible asset not yet available for use. The carrying amount of other non-financial assets is
reviewed at the end of each reporting year for indications of impairment and where an asset is
impaired, it is written down through profit or loss to its estimated recoverable amount. The
impairment loss is the excess of the carrying amount over the recoverable amount and is
recognised in profit or loss. The recoverable amount of an asset or a 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. For the purposes of assessing impairment, assets are grouped at the lowest levels for which
there are separately identifiable cash flows (cash-generating units). At the end of each reporting
year, non-financial assets other than goodwill with impairment loss recognised in prior periods
are assessed for possible reversal of the impairment. An impairment loss is reversed only to the
extent that the asset’s carrying amount does not exceed the carrying amount that would have been
determined, net of depreciation or amortisation, if no impairment loss had been recognised.
Inventories
Automobiles and watches held for sale are measured at the lower of cost (specific identification
method) and net realisable value. Inventories other than automobiles and watches are measured
at the lower of cost (weighted average method) and net realisable value. Net realisable value is the
estimated selling price in the ordinary course of business less the estimated costs of completion
and the estimated costs necessary to make the sale. A write down on cost is made where the
cost is not recoverable or if the selling prices have declined. Cost includes all costs of purchase,
costs of conversion and other costs incurred in bringing the inventories to their present location and
condition.
A-14
2.
Financial Assets
Initial recognition, measurement and derecognition:
A financial asset is recognised on the statement of financial position when, and only when, the
entity becomes a party to the contractual provisions of the instrument. The initial recognition of
financial assets is at fair value normally represented by the transaction price. The transaction price
for financial asset not classified at fair value through profit or loss includes the transaction costs
that are directly attributable to the acquisition or issue of the financial asset. Transaction costs
incurred on the acquisition or issue of financial assets classified at fair value through profit or loss
are expensed immediately. The transactions are recorded at the trade date.
Irrespective of the legal form of the transactions performed, financial assets are derecognised
when they pass the “substance over form” based on the derecognition test prescribed by FRS 39
relating to the transfer of risks and rewards of ownership and the transfer of control.
Subsequent measurement:
Subsequent measurement based on the classification of the financial assets in one of the following
four (4) categories under FRS 39 is as follows:
1.
Financial assets at fair value through profit or loss: As at end of the reporting year dates
there were no financial assets classified in this category.
2.
Loans and receivables are non-derivative financial assets with fixed or determinable
payments that are not quoted in an active market. Assets that are for sale immediately or
in the near term are not classified in this category. These assets are carried at amortised
costs using the effective interest method (except that short-duration receivables with no
stated interest rate are normally measured at original invoice amount unless the effect
of imputing interest would be significant) minus any reduction (directly or through the use of
an allowance account) for impairment or uncollectibility. Impairment charges are provided
only when there is objective evidence that an impairment loss has been incurred as a result
of one or more events that occurred after the initial recognition of the asset (a ‘loss event’)
and that loss event (or events) has an impact on the estimated future cash flows of the
financial asset or group of financial assets that can be reliably estimated. The methodology
ensures that an impairment loss is not recognised on the initial recognition of an asset.
Losses expected as a result of future events, no matter how likely, are not recognised.
For impairment, the carrying amount of the asset is reduced through use of an allowance
account. The amount of the loss is recognised in profit or loss. An impairment loss is
reversed if the reversal can be related objectively to an event occurring after the impairment
loss was recognised. Typically the trade and other receivables are classified in this category.
3.
Held-to-maturity financial assets: As at end of the reporting year dates there were no
financial assets classified in this category.
4.
Available-for-sale financial assets: As at end of the reporting year dates there were no
financial assets classified in this category.
Cash and cash equivalents include bank and cash balances, on demand deposits and any highly
liquid debt instruments purchased with an original maturity of three (3) months or less. For the
statement of cash flows the item includes cash and cash equivalents less cash subject to
restriction and bank overdrafts payable on demand that form an integral part of cash management.
A-15
2.
Hedging
The entity is exposed to currency and interest rate risks. The policy is to reduce currency and
interest rate exposures through derivatives and other hedging instruments. From time to time,
there may be borrowings and foreign exchange arrangements or interest rate swap contracts or
similar instruments entered into as hedges against changes in interest rates, cash flows or the fair
value of the financial assets and liabilities. They are carried at fair value. The gain or loss from
remeasuring these hedging or other arrangement instruments at fair value are recognised in profit
or loss. The derivatives and other hedging instruments used are described below in the notes to
the financial statements.
Derivatives
All derivatives are initially recognised and subsequently carried at fair value. Accounting for
derivatives engaged in hedging relationships is described in the above section. Certain derivatives
are entered into in order to hedge some transactions and all the strict hedging criteria prescribed
by FRS 39 are not met. In those cases, even though the transaction has its economic and business
rationale, hedge accounting cannot be applied. As a result, changes in the fair value of those
derivatives are recognised directly in profit or loss and the hedged item follows normal accounting
policies.
Financial Liabilities
Initial recognition, measurement and derecognition:
A financial liability is recognised on the statement of financial position when, and only when, the
entity becomes a party to the contractual provisions of the instrument and it is derecognised when
the obligation specified in the contract is discharged or cancelled or expires. The initial recognition
of financial liability is at fair value normally represented by the transaction price. The transaction
price for financial liability not classified at fair value through profit or loss includes the transaction
costs that are directly attributable to the acquisition or issue of the financial liability. Transaction
costs incurred on the acquisition or issue of financial liability classified at fair value through profit
or loss are expensed immediately. The transactions are recorded at the trade date. Financial
liabilities including bank and other borrowings are classified as current liabilities unless there is
an unconditional right to defer settlement of the liability for at least 12 months after the end of the
reporting year.
Subsequent measurement:
Subsequent measurement based on the classification of the financial liabilities in one of the
following two (2) categories under FRS 39 is as follows:
1.
Liabilities at fair value through profit or loss: Financial guarantee contracts if significant are
initially recognised at fair value and are subsequently measured at the greater of (a) the
amount determined in accordance with FRS 37; and (b) the amount initially recognised
less, where appropriate, cumulative amortisation recognised in accordance with FRS 18. All
changes in fair value relating to liabilities at fair value through profit or loss are charged to
profit or loss as incurred.
2.
Other financial liabilities: All liabilities, which have not been classified in the previous
category fall into this residual category. These liabilities are carried at amortised cost using
the effective interest method. Trade and other payables and borrowings are usually classified
in this category. Items classified within current trade and other payables are not usually remeasured, as the obligation is usually known with a high degree of certainty and settlement
is short-term.
A-16
2.
Fair Value of Financial Instruments
The carrying values of current financial instruments approximate their fair values due to the shortterm maturity of these instruments. Disclosures of fair value are not made when the carrying
amount of current financial instruments is a reasonable approximation of fair value. The fair values
of non-current financial instruments may not be disclosed separately unless there are significant
differences at the end of the reporting year and in the event the fair values are disclosed in the
relevant notes. The maximum exposure to credit risk is the fair value of the financial instruments
at the end of the reporting year. The fair value of a financial instrument is derived from an active
market or by using an acceptable valuation technique. The appropriate quoted market price for
an asset held or liability to be issued is usually the current bid price without any deduction for
transaction costs that may be incurred on sale or other disposal and, for an asset to be acquired
or for liability held, the asking price. If there is no market, or the markets available are not
active, the fair value is established by using an acceptable valuation technique. The fair value
measurements are classified using a fair value hierarchy of 3 levels that reflects the significance
of the inputs used in making the measurements, that is, Level 1 for the use of quoted prices
(unadjusted) in active markets for identical assets or liabilities; Level 2 for the use of inputs other
than quoted prices included within Level 1 that are observable for the asset or liability, either
directly (i.e. as prices) or indirectly (i.e. derived from prices); and Level 3 for the use of inputs for
the asset or liability that are not based on observable market data (unobservable inputs). The level
is determined on the basis of the lowest level input that is significant to the fair value measurement
in its entirety. Where observable inputs that require significant adjustment based on unobservable
inputs, that measurement.
Government Grants
A government grant is recognised at fair value when there is reasonable assurance that the
conditions attaching to it will be complied with and that the grant will be received. A grant in
recognition of specific expenses is recognised as income over the periods necessary to match
them with the related costs that they are intended to compensate, on a systematic basis. A grant
related to depreciable assets is allocated to income over the period in which such assets are
used in the project subsidised by the grant. A government grant related to assets, including nonmonetary grants at fair value, is presented in the statement of financial position. The interest saved
from government loans is regarded as additional government grant.
Equity
Equity instruments are contracts that give a residual interest in the net assets of the Company.
Ordinary shares are classified as equity. Equity instruments are recognised at the amount of
proceeds received net of incremental costs directly attributable to the transaction. Dividends on
equity are recognised as liabilities when they are declared. Interim dividends are recognised when
declared by the Directors.
Provisions
A liability or provision is recognised when there is a present obligation (legal or constructive) as
a result of a past event, it is probable that an outflow of resources embodying economic benefits
will be required to settle the obligation and a reliable estimate can be made of the amount of the
obligation. Provisions are made using best estimates of the amount required in settlement and
where the effect of the time value of money is material, the amount recognised is the present value
of the expenditures expected to be required to settle the obligation using a pre-tax rate that reflects
current market assessments of the time value of money and the risks specific to the obligation. The
increase in the provision due to passage of time is recognised as interest expense. Changes in
estimates are reflected in profit or loss in the reporting year they occur.
A-17
2.
Warranty Provisions
A provision is made for the estimated cost of product warranties at the time revenue is recognised.
The warranty provision is established based upon best estimates of the amounts necessary to
settle future and existing claims on products sold as of the end of each reporting year. As new
products incorporating complex technologies are continuously introduced, and as regulations and
practices may change, changes in these estimates could result in additional allowances or changes
to recorded allowances being required in future periods.
Critical Judgements, Assumptions and Estimation Uncertainties
The critical judgements made in the process of applying the accounting policies that have the most
significant effect on the amounts recognised in the financial statements and the key assumptions
concerning the future, and other key sources of estimation uncertainty at the end of each reporting
year, that have a significant risk of causing a material adjustment to the carrying amounts of
assets and liabilities within the next reporting year are discussed below. These estimates and
assumptions are periodically monitored to ensure they incorporate all relevant information available
at the date when financial statements are prepared. However, this does not prevent actual figures
differing from estimates.
Net realisable value of inventories:
A review is made periodically on inventory for excess inventory and declines in net realisable value
below cost and an allowance is recorded against the inventory balance for any such declines.
These reviews require management to consider the future demand for the products. In any case
the realisable value represents the best estimate of the recoverable amount and is based on the
acceptable evidence available at the end of each reporting year and inherently involves estimates
regarding the future expected realisable value. The usual considerations for determining the
amount of allowance or write-down include ageing analysis, technical assessment and subsequent
events. In general, such an evaluation process requires significant judgement and materially affects
the carrying amount of inventories at the end of each reporting year. Possible changes in these
estimates could result in revisions to the stated value of the inventories. The carrying amount of
inventories at 31 March 2013 was approximately $16,958,000.
Useful lives of property, plant and equipment:
The estimates for the useful lives and related depreciation charges for property, plant and
equipment is based on commercial and other factors which could change significantly as a result
of innovations and in response to market conditions. The depreciation charge is increased where
useful lives are less than previously estimated lives, or the carrying amounts written off or written
down for technically obsolete items or assets that have been abandoned. It is impracticable to
disclose the extent of the possible effects. It is reasonably possible, based on existing knowledge,
that outcomes within the next reporting year that are different from assumptions could require a
material adjustment to the carrying amount of the balances affected. The carrying amount of the
specific asset (or class of assets) at 31 March 2013 affected by the assumption was approximately
$2,295,000.
Allowance for doubtful accounts:
An allowance is made for doubtful accounts for estimated losses resulting from the subsequent
inability of the customers to make required payments. If the financial conditions of the customers
were to deteriorate, resulting in an impairment of their ability to make payments, additional
allowances may be required in future periods. Management generally analyses accounts
receivables and analyses historical bad debts, customer concentrations, customer creditworthiness,
and changes in customer payment terms when evaluating the adequacy of the allowance for
doubtful accounts. To the extent that it is feasible, impairment and uncollectibility is determined
individually for each item. In cases where that process is not feasible, a collective evaluation of
impairment is performed. At the end of each reporting year, the receivables carrying amount
approximates the fair value and the carrying amounts might change materially within the next
reporting year but these changes would not arise from assumptions or other sources of estimation
uncertainty at the end of each reporting year. The carrying amount of receivables is disclosed in
Note 16.
A-18
2.
Critical Judgements, Assumptions and Estimation Uncertainties (Cont’d)
Deposit payments made to automobile manufacturers:
The Group is required by automobile manufacturers to make deposit payments upon placement
of orders for new automobiles from time to time. In the event that such automobile manufacturers
are unable to deliver the orders and the deposit payments are not refunded, fully or partially, an
impairment will be required. At the end of the reporting year, management is of the view that the
deposit payment carrying amount approximates the fair value and the carrying amounts might
change materially within the next reporting year but the changes would not arise from assumptions
or other sources of estimation uncertainty at the end of the reporting year. The carrying amount of
deposits is disclosed in Note 17.
3.
Related Party Relationships and Transactions
FRS 24 defines a related party as a person or entity that is related to the reporting entity and it
includes (a) A person or a close member of that person’s family if that person: (i) has control or
joint control over the reporting entity; (ii) has significant influence over the reporting entity; or (iii) is
a member of the key management personnel of the reporting entity or of a parent of the reporting
entity. (b) An entity is related to the reporting entity if any of the following conditions apply: (i) The
entity and the reporting entity are members of the same Group; (ii) One entity is an associate or
joint venture of the other entity; (iii) Both entities are joint ventures of the same third party; (iv) One
entity is a joint venture of a third entity and the other entity is an associate of the third entity; (v)
The entity is a post-employment benefit plan for the benefit of employees of either the reporting
entity or an entity related to the reporting entity; (vi) The entity is controlled or jointly controlled by a
person identified in (a); (vii) 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 ultimate controlling party is Goh Kim San, an Executive Director of the Company.
3.1
Related parties other than related companies:
There are transactions and arrangements between the reporting entity and related parties and
the effects of these on the basis determined between the parties are reflected in these financial
statements. The current related party balances are unsecured without fixed repayment terms and
interest unless stated otherwise. For any significant non-current balances and significant financial
guarantees an interest or charge is charged or imputed unless stated otherwise.
Significant related party transactions:
In addition to the transactions and balances disclosed elsewhere in the notes to the financial
statements, this item includes the following:
Related parties
2011
$’000
2012
$’000
2013
$’000
Commission income
72
566
1,689
Rental income
48
22
–
–
–
67
182
217
82
Interest income
Sales of parts
Sales of watches
Handling fee income
Purchase of automobiles
A-19
–
–
526
31
37
91
–
(165)
–
3.
Related Party Relationships and Transactions (Cont’d)
3.1
Related parties other than related companies (cont’d):
2011
$’000
Directors
2012
$’000
2013
$’000
Sale of car registration numbers
–
–
46
Sale of watches
–
–
36
100
–
434
(134)
–
–
Sale of automobiles
Guarantors’ fees expenses
Related parties are companies in which the Directors have an interest in and exercise influence.
3.2
Key management compensation:
Salaries and other short-term employee benefits
2011
$’000
2012
$’000
2013
$’000
2,012
1,721
830
The above amounts are included under employee benefits expense. Included in the above amounts
are the following items:
Remuneration of Directors of the Group
2011
$’000
2012
$’000
2013
$’000
2,012
1,721
830
Key management personnel are the Directors and those persons having authority and
responsibility for planning, directing and controlling the activities of the Group, directly or indirectly.
The above amounts for key management compensation are for all the Directors.
3.3.
Other receivables from and other payables to related parties:
The trade transactions and the trade receivables and payables balances arising from sales and
purchases of goods and services are disclosed elsewhere in the notes to the financial statements.
The movements in other receivables from and other payables to related parties are as follows:
Other receivables (Other payables):
Balance at beginning of the year
Amounts paid in and settlement of liabilities
on behalf of the Group
Amounts paid out and settlement of liabilities
on behalf of related parties
Commission income
Rental income
Interest income
Handling fee income
Related party other payable written back
Bad debts written off
Balance at end of the year
Presented as follows:
Other receivables (Note 16)
Other payables (Note 22)
Net
A-20
2011
$’000
Related parties
2012
$’000
2013
$’000
1,303
2,035
3,400
(1,485)
(12,544)
(30,188)
2,066
72
48
–
31
–
–
2,035
13,114
566
22
–
37
230
(60)
3,400
28,713
1,689
–
67
91
–
–
3,772
3,364
(1,329)
2,035
4,495
(1,095)
3,400
4,857
(1,085)
3,772
3.
3.3.
Other receivables from and other payables to related parties (cont’d):
Directors
2012
$’000
2011
$’000
(Other payables) Other receivables:
Amounts paid out and settlement of liabilities
on behalf of the Directors
Amounts paid in and settlement of liabilities
on behalf of the Group
Guarantors’ fee expenses
(2,341)
2,897
–
(134)
422
422
Net
4.
Sale of parts and servicing
5,453
2,550
(5,925)
–
(50)
(2,500)
–
–
–
–
–
(50)
–
422
(50)
–
2011
$’000
2012
$’000
2013
$’000
102,237
108,207
78,530
4,941
4,835
5,566
Sale of watches
–
–
2,272
107,178
113,042
86,368
2011
$’000
2012
$’000
2013
$’000
Commission income
692
1,378
2,542
Rental income
511
600
606
Other Income
Deferred income (Note 21A)
Other income
6.
(50)
Revenue
Sale of automobiles
5.
422
2013
$’000
–
508
448
326
459
539
1,529
2,945
4,135
2011
$’000
2012
$’000
2013
$’000
–
(68)
–
87
(1)
–
–
–
–
–
–
18
(112)
(63)
(60)
(117)
48
5
(15)
(8)
–
230
–
(92)
(182)
–
–
(205)
82
5
–
–
5
–
(194)
(489)
Other Credits (Charges)
Allowance for impairment on trade receivables
Bad trade debts written off
Bad debts written off related party other receivables
Foreign exchange adjustment gains (losses)
(Losses) gains on disposal of plant and equipment
Government grant income
Other financial assets written off
Other asset written off
Others
Related party other payable written back
Plant and equipment written off
Net
A-21
7.
Marketing and Distribution Expenses, Administrative Expenses and Finance Costs
The major components include the following:
2011
$’000
2012
$’000
2013
$’000
Entertainment
524
560
650
Advertising and promotions
933
1,580
1,590
Sales commission expense
797
990
755
730
1,527
1,808
3,963
4,036
3,666
–
–
713
2011
$’000
2012
$’000
2013
$’000
4,650
4,834
4,204
298
319
349
Marketing and distribution expenses
Administrative expenses
Depreciation expense
Employee benefits expense
IPO expense
Finance costs
This is for interest expense.
8.
Employee Benefits Expense
Contributions to defined contribution plan
Other benefits
Total employee benefits expense
119
119
151
5,067
5,272
4,704
307
246
283
Cost of sales
Marketing and distribution expenses (Note 7)
797
990
755
Administrative expenses (Note 7)
3,963
4,036
3,666
5,067
5,272
4,704
2011
$’000
2012
$’000
2013
$’000
534
1,691
1,600
9.
Income Tax
9A.
Components of tax expense recognised in profit or loss include:
Current tax expense:
Current tax expense
Under adjustments to current tax in respect of prior periods
Total
A-22
–
–
26
534
1,691
1,626
9.
Income Tax (Cont’d)
9A.
Components of tax expense recognised in profit or loss include (cont’d):
The income tax in profit or loss varied from the amount of income tax amount determined by
applying the Singapore income tax rate of 17% to profit or loss before income tax as a result of the
following differences:
Profit before tax
Income tax expense at the above rate
2011
$’000
2012
$’000
2013
$’000
3,260
9,327
8,345
554
1,585
1,419
60
164
250
(26)
(26)
(26)
–
–
26
(91)
Not deductible items
Tax exemption
Under adjustment to tax in respect of prior periods
Deferred tax assets not recognised (reversed)
(31)
3
Other items less than 3% each
(23)
(35)
Total income tax expense
534
1,691
48
1,626
There are no income tax consequences of dividends to owners of the Company.
9B.
Deferred tax expense recognised in profit or loss include:
Excess of tax value over net book value of plant
and equipment
Tax losses carryforwards
Deferred tax assets not recognised (reversed)
Total deferred tax expense recognised in profit or loss
9C.
2011
$’000
2012
$’000
2013
$’000
–
8
(20)
31
(11)
111
(31)
3
(91)
–
–
–
Deferred tax balance in the statements of financial position:
2011
$’000
2012
$’000
2013
$’000
Deferred tax assets recognised in profit or loss:
Excess of tax value over net book value of plant
and equipment
Deferred tax assets not recognised
Net
30
22
42
552
563
452
(582)
(585)
(494)
–
–
–
No deferred tax asset (on deductible temporary differences and unused tax losses) has been
recognised in respect of the above balance.
The realisation of the future income tax benefits from tax loss carryforwards of $3,247,000,
$3,312,000 and $2,659,000 for the reporting years ended 31 March 2011, 2012 and 2013
respectively and temporary differences from capital allowances of $176,000, $129,000 and
$247,000 for the reporting years ended 31 March 2011, 2012 and 2013 respectively are available
for an unlimited future period subject to the conditions imposed by law including the retention of
majority shareholders as defined.
A-23
10.
Earnings Per Share
Basic earnings per share amount is calculated by dividing the profit attributable to ordinary equity
holders of the Company by the weighted average number of pre-invitation ordinary shares of no
par value as follows:
2011
$’000
Net profit attributable to ordinary equity holders
of the Company
Weighted average number of pre-invitation shares
2012
$’000
2013
$’000
2,726
7,636
6,719
’000
’000
’000
225,000
225,000
225,000
Diluted earnings per share is similar to basic earnings per share as there were no potential dilutive
ordinary shares existing during the relevant period.
11.
Dividends on Equity Shares
2011
$’000
2012
$’000
2013
$’000
Final tax exempt (1-tier) dividend paid of $0.50 per share
–
1,000
–
Interim tax exempt (1-tier) dividend paid of $1.50
per share
–
3,000
–
per share
–
1,000
–
per share
–
–
2,500
–
5,000
2,500
The dividends were paid in respect of the 2,000,000 shares of EuroSports Auto Pte Ltd to the
shareholders of EuroSports Auto Pte Ltd prior to the completion of the Restructuring Exercise.
12.
Construction Plant and
in progress equipment
$’000
Motor
vehicles
Leasehold
property and
Renovations improvements
$’000
$’000
$’000
$’000
Total
$’000
Cost:
At 1 April 2010
–
523
1,220
812
3,401
5,956
Additions
–
121
527
262
–
910
Disposals
–
–
–
(138)
Write-offs
–
(201)
–
(408)
At 31 March 2011
–
443
1,609
867
3,401
6,320
Additions
–
345
772
286
4,050
5,453
Disposals
–
–
–
–
–
Write-offs
–
(58)
At 31 March 2012
–
730
Additions
16,297
Disposals
–
Write-offs
At 31 March 2013
–
16,297
(138)
–
(162)
–
(207)
(24)
2,219
1,129
99
891
–
(870)
(95)
734
A-24
–
2,240
–
(162)
(82)
7,451
11,529
221
–
17,508
–
–
(436)
914
–
7,451
(870)
(531)
27,636
12.
Property, Plant and Equipment (Cont’d)
Construction Plant and
in progress equipment
$’000
$’000
Motor
vehicles
$’000
Leasehold
property and
Renovations improvements
$’000
$’000
Total
$’000
Accumulated depreciation:
At 1 April 2010
Depreciation for the year
Disposals
Write-offs
At 31 March 2011
Disposals
Write-offs
At 31 March 2012
Disposals
Write-offs
At 31 March 2013
–
–
–
–
–
–
–
–
–
–
–
–
–
307
102
–
(201)
208
126
–
(58)
276
180
–
(91)
365
490
206
(37)
–
659
256
(150)
–
765
496
(401)
–
860
275
160
–
(207)
228
211
–
(24)
415
199
–
(246)
368
1,635
262
–
–
1,897
934
–
–
2,831
933
–
–
3,764
2,707
730
(37)
(408)
2,992
1,527
(150)
(82)
4,287
1,808
(401)
(337)
5,357
Net book value:
At 1 April 2010
–
216
730
537
1,766
3,249
At 31 March 2011
–
235
950
639
1,504
3,328
At 31 March 2012
–
454
1,454
714
4,620
7,242
At 31 March 2013
16,297
369
1,380
546
3,687
22,279
Also see Note 21A.
a)
Depreciation expense is included under administrative expenses.
b)
Certain items are under finance lease agreements (see Note 20).
c)
Certain motor vehicles are held in trust by the Executive Directors.
d)
Construction in progress includes the acquisition costs of 7 and 9 Chang Charn Road,
Singapore 159638 of $15,771,000 and cost of construction of an additional showroom at 30
Teban Gardens Crescent, Singapore 609827 of $526,000.
e)
Pursuant to a conditional sale and purchase agreement dated 4 July 2012 between
EuroSports Auto Pte Ltd and RBC Dexia Trust Services Singapore Limited (in its capacity
as trustee of Cambridge Industrial Trust) (the “Purchaser”), EuroSports Auto Pte Ltd has
agreed to sell its leasehold interest in respect of 30 Teban Gardens Crescent Singapore
608927, comprising the land, building and all mechanical and electrical equipment installed
therein, to the Purchaser for a consideration of $41.0 million. It is a condition that EuroSports
Auto Pte Ltd must obtain from Jurong Town Council (“JTC”) a further leasehold term of
22 years and written confirmation from JTC that all terms and conditions imposed by JTC
have been fulfilled and that JTC has granted or confirmed the grant of the further leasehold
term. EuroSports Auto Pte Ltd shall obtain this confirmation by 31 March 2014 or such other
period as the parties may agree in writing. In the event EuroSports Auto Pte Ltd is unable
to obtain JTC’s confirmation by the deadline, the Purchaser shall be entitled to rescind the
sale and purchase agreement. On completion, EuroSports Auto Pte Ltd shall lease the
property from the Purchaser for six years commencing from the actual date of completion at
an average annual rent of $3,589,000 over the lease term, with an option to renew the lease
for a further term of six (6) years.
f)
The leasehold property and leasehold properties under construction in progress are
mortgaged as security for the bank facilities (see Note 20).
A-25
13.
2011
$’000
Write-offs
2012
$’000
2013
$’000
15
15
–
–
(15)
–
15
–
–
The investments represented unquoted ordinary shares in companies carried at cost less
allowance for impairment, if any. The investments were written off to profit or loss in 2012.
14.
Minimum
Lease
payments
Finance
charges
Present value
$’000
$’000
$’000
29
(6)
23
31 March 2011
Minimum lease payments receivable:
Due within one year
Due within 2 to 5 years
67
(14)
53
Total
96
(20)
76
29
(6)
23
31 March 2012
Minimum lease payments receivable:
Due within one year
43
(9)
34
Total
72
(15)
57
There were no finance lease receivables as at 31 March 2013.
The average lease term is 8 years. The effective interest rate is about 6.13% per year for 2011
and 2012. The lease obligation is denominated in Singapore dollars. The obligation under lease
agreement is secured by the lessor’s charge over the leased assets.
The carrying amount of the lease receivables is not significantly different from the fair value.
15.
Inventories
2011
$’000
Automobiles
Automobile parts and accessories
Watches
A-26
2012
$’000
2013
$’000
16,806
9,596
13,535
1,435
1,072
1,045
–
–
2,378
18,241
10,668
16,958
15.
Inventories (Cont’d)
Inventories are stated after allowance. Movements in allowance:
2011
$’000
Charge to profit or loss included in cost of sales
Used
2013
$’000
571
2,067
310
1,496
–
1,222
–
2012
$’000
2,067
(1,757)
310
(310)
1,222
Changes in inventories of finished goods
(3,149)
(7,573)
6,290
The amount of inventories included in cost of sales
93,791
93,639
65,633
The write-downs of inventories charged to profit or
loss included in cost of sales
1,496
–
1,222
Certain inventories are pledged as security for the bank facilities and finance leases (Note 20).
16.
2011
$’000
2012
$’000
2013
$’000
1,510
8,988
1,419
Trade receivables:
Outside parties
Less allowance for impairment
Related parties (Note 3)
Subtotal
–
(112)
11
11
(228)
308
1,521
8,887
1,499
–
1,668
–
3,364
4,495
4,857
422
–
–
Other receivables:
Outside parties
Directors (Note 3)
Staff loans
11
8
6
Subtotal
3,797
6,171
4,863
Total trade and other receivables
5,318
15,058
6,362
–
–
112
Charge for trade receivables to profit or loss included
in other charges
–
112
182
Movements in above allowance:
Used/bad debts written off
–
–
–
112
A-27
(66)
228
17.
Other Assets, Current
Deposits
(a) (b)
Deferred expenses
Prepayments
18.
2011
$’000
2012
$’000
2013
$’000
347
586
2,776
−
−
126
107
88
83
454
674
2,985
(a)
Pursuant to a heads of agreement between EuroAutomobile Pte. Ltd. and Spania GTA
Tecnomotive S.L. (“GTA Spain”), a company incorporated in Spain, dated 22 September
2012, the Group will be granted the distributorship for GTA Spain’s automobiles (“GTA
automobiles”) in the Asia Pacific region. GTA Spain will enter into an exclusive distributorship
agreement with Spania GTA Asia Pacific Private Ltd. (“GTA Singapore”) granting GTA
Singapore the exclusive rights to distribute GTA automobiles in the designated territories,
including mainly the Asia Pacific region. In addition, the Group has been granted a call
option by GTA Spain to subscribe for such shares representing 13.4% of the share capital
of GTA Spain at a subscription consideration of EUR2 million. The Group is to purchase up
to eight (8) units of GTA automobiles from GTA Spain and has paid a refundable deposit
of EUR1 million (S$1.6 million equivalent) to GTA Spain in October 2012 for the purchase
of four (4) units of GTA automobiles. The Executive Directors of the Company have on 18
November 2013 executed a deed of indemnity in favour of the Group, pursuant to which
the Executive Directors have undertaken, inter alia, that they will pay to the Group, on a
joint and several basis, all deposits and monies paid to GTA Spain in connection with the
GTA automobiles remaining undelivered, in the event (i) GTA Spain fails to deliver the
GTA automobiles by 31 March 2015 and fails to refund the deposits and all monies paid
to GTA Spain in connection therewith, in full, to the Group; or (ii) if GTA Spain is wound up,
dissolved, insolvent, bankrupt or placed in judicial management, whichever is earlier.
(b)
On 17 January 2013, the Group entered into a call option agreement to acquire 70% of the
issued and paid-up share capital of E’ Collezione Pte. Ltd. at a consideration of $2.1 million.
Pursuant to this transaction, a deposit of $210,000 was paid. An Executive Director of the
Group has undertaken to the vendors that in the event the Group does not exercise the call
option by the expiry of the stipulated option period, the Executive Director concerned will pay
the shareholders of E’ Collezione Pte. Ltd. a compensation. As at the date of this report, the
Group did not exercise the call option, which lapsed as of 30 June 2013. The deposit has
since been refunded to the Group. No compensation was paid or payable by the Executive
Director concerned pursuant to such undertaking.
Not restricted in use
2011
$’000
2012
$’000
2013
$’000
1,367
420
5,582
Cash restricted in use over 3 months
−
−
360
1,367
420
5,942
2011
$’000
2012
$’000
2013
$’000
1,367
420
5,942
−
−
(360)
Bank overdrafts
−
−
(1,900)
1,367
420
The interest earning balances are not significant.
18A. Cash and cash equivalents in the statement of cash flows:
Amount as shown above
Cash and cash equivalents for statement of
cash flows purposes at end of the year
A-28
3,682
18.
Cash and Cash Equivalents (Cont’d)
18B. Non-cash transactions:
There were acquisitions of plant and equipment with a total cost of $519,000, $772,000 and
$674,000 for the reporting years ended 31 March 2011, 2012 and 2013 respectively and
acquisitions of inventories with a total cost of $2,869,000 for the reporting year ended 31 March
2013 acquired by means of finance leases. There was also a construction of leasehold property in
2012 with a total cost of $4,050,000 by the lessee (refer to Note 21A).
19.
Share Capital
Number
of shares
issued
Share
capital
‘000
$’000
3,500
3,500
Ordinary shares of no par value:
Balance at 1 April 2010, 31 March 2011, 31 March 2012 and 31 March 2013 (a)
(a)
The share capital represents the combined share capital of EuroSports Auto Pte Ltd and
EuroAutomobile Pte. Ltd. prior to the Restructuring Exercise (Note 1.2).
The ordinary shares of no par value which are fully paid carry no right of fixed income and with one
vote per share.
Capital Management:
The objectives when managing capital are: to safeguard the reporting entity’s ability to continue
as a going concern, so that it can continue to provide returns for owners and benefits for other
stakeholders, and to provide an adequate return to owners by pricing the sales commensurately
with the level of risk. The management sets the amount of capital to meet its requirements and
the risk taken. There were no changes in the approach to capital management during the
reporting years. The management manages the capital structure and makes adjustments to it
where necessary or possible in the light of changes in conditions and the risk characteristics of
the underlying assets. In order to maintain or adjust the capital structure, the management may
adjust the amount of dividends paid to owners, return capital to owners, issue new shares, or sell
assets to reduce debt. Adjusted capital comprises all components of equity (that is, share capital
and reserves).
The management monitors the capital on the basis of the debt-to-adjusted capital ratio. This
ratio is calculated as net debt / adjusted capital (as shown below). Net debt is calculated as total
borrowings less cash and cash equivalents.
2011
$’000
2012
$’000
2013
$’000
8,727
8,426
30,485
Net debt:
All current and non-current borrowings including
finance leases
Less cash and cash equivalents
(1,367)
Net debt
(420)
(5,942)
7,360
8,006
24,543
Total equity
2,002
4,638
8,857
Adjusted capital
2,002
4,638
8,857
367.6%
172.6%
277.1%
Adjusted capital:
Debt-to-adjusted capital ratio
A-29
20.
2011
$’000
2012
$’000
2013
$’000
325
–
11,954
Non-Current:
Bank loans (Note 20A)
Finance lease payables (Note 20B)
1,161
369
567
Non-Current, total
1,486
369
12,521
Current:
Bank overdrafts (Note 20A)
–
–
1,900
1,856
–
1,611
1,496
434
924
Trust receipts and bills payables (Note 20C)
3,889
7,623
13,529
Current, total
7,241
8,057
17,964
Total
8,727
8,426
30,485
2011
$’000
2012
$’000
2013
$’000
1,486
369
4,294
–
–
8,227
1,486
369
12,521
2011
%
2012
%
2013
%
Bank loans
4.78 – 7.25
4.78 – 5.18
1.28
Trust receipts and bills payables
4.00 – 7.25
4.00 – 7.25
4.00 – 7.25
2011
%
2012
%
2013
%
5.00
5.00
2.32
The non-current portion is repayable as follows:
After 5 years
Total non-current portion
The range of floating rate interest rates paid was as follows:
The fixed rate interest rates paid was as follows:
Bank loans
20A. Bank Overdrafts and Bank Loans
The bank agreements for certain of the bank overdrafts and bank loans provide among other
matters for the following:
31 March 2011 and 2012
(a)
A legal mortgage over the leasehold property.
(b)
Joint and several guarantees from the Executive Directors of the Company.
(c)
Deed of charge and assignment over inventories, receivables and other assets of the Group.
The bank loans for the reporting years ended 31 March 2011 and 2012 were repayable from
January, April and September 2009, by 36 and 60, 30 and 48 instalments respectively. The two
loans with repayment periods of 4 years from September 2009 and 2.5 years from April 2009
respectively have been classified as “current” because the Group did not have an unconditional
right to defer settlement of the liability for at least twelve months after the end of the reporting year.
All these bank loans were fully repaid in 2012.
A-30
20.
Other Financial Liabilities (Cont’d)
20A. Bank Overdrafts and Bank Loans (Cont’d)
31 March 2013
(a)
A legal mortgage over the leasehold property and the leasehold properties under
construction in progress.
(b)
(c)
Need to comply with certain financial covenants such as (a) the minimum networth of
EuroSports Auto must not be less than $6,000,000 and (b) the leverage ratio be no more
than 4.5 times (defined as total liabilities divided by tangible networth).
The bank loans are repayable monthly from August 2012 and March 2013 by 30 and 180
instalments respectively.
20B. Finance Lease Payables
Minimum
payments
Finance
charges
Present value
$’000
$’000
$’000
Due within one year
1,595
(99)
1,496
1,221
(60)
1,161
Total
2,816
(159)
2,657
31 March 2011
Minimum lease payments payable:
Net book value of plant and equipment and inventories under finance leases
31 March 2012
3,258
Minimum
payments
Finance
charges
Present value
$’000
$’000
$’000
Due within one year
456
(22)
434
386
(17)
369
Total
842
(39)
803
31 March 2013
1,437
Minimum
payments
Finance
charges
Present value
$’000
$’000
$’000
Due within one year
953
(29)
924
593
(26)
567
1,546
(55)
1,491
Total
2,547
There are leases for certain of its plant and equipment and inventories under finance leases. The
average lease term is 2 to 8 years. All leases are on a fixed repayment basis and no arrangements
have been entered into for contingent rental payments. The obligations under finance leases are
secured by the lessor’s charge over the leased assets.
The average effective interest rate per year
A-31
2011
%
2012
%
2013
%
2.81 - 6.13
2.54 – 6.13
1.38 – 1.88
20.
20C. Trust Receipts and Bills Payables
The trust receipts are covered by joint and several guarantees from the Executive Directors of the
Company.
The period of financing under trust receipts is 120 days inclusive of suppliers’ credit. The interest
is payable up to 2.25% per annum over Singapore Inter Bank Offer Rate (SIBOR) prevailing from
time to time.
The credit facilities for bills payables provide among other matters the following:
21.
(a)
A fixed and floating charge over inventories and accounts receivables.
(b)
Joint and several guarantees by the Executive Directors of the Company.
Other Liabilities
2011
$’000
2012
$’000
2013
$’000
–
–
2,034
2,034
1,346
1,346
Current:
Deposits from customers
Warranty provision (Note 21B)
Current, total
–
10,500
613
11,113
508
8,515
539
9,562
448
4,866
419
5,733
Total
11,113
11,596
7,079
2011
$’000
2012
$’000
2013
$’000
Additions (Note 12)
Adjustment
Credit to profit or loss included in other income
–
–
–
–
–
3,050
–
(508)
2,542
–
(300)
(448)
–
2,542
1,794
–
–
–
508
2,034
2,542
448
1,346
1,794
Non-Current:
Non-Current, total
21A. Deferred Income
Presented as:
Current
Non-Current
The additions to leasehold property of $4,050,000 during the reporting year 2012 relate to the
fair value of the additions and extension of an additional 3rd storey comprising automobile service
centre and ancillary office to an existing 2nd storey detached factory constructed on premises that
were leased by the Group to a lessee. The Group reimbursed the lessee $1,000,000 for the cost
of construction, with the lessee incurring the remaining cost of construction. The construction
of the property was completed and was available for use from April 2011. As the property was
constructed on the leasehold property belonging to the Group, the control of such property is
transferred to the Group. INT FRS 118 Transfers of Assets from Customers is applicable for the
transfer of the property to the Group and it is recognised at $3,050,000 being the value of the
property for the net cost incurred by the lessee less the amount reimbursed by the Group. The
corresponding credit of $3,050,000 is deferred income to be recognised in profit and loss over the
expected lease period to June 2017 on the straight line method. The deferred income amount of
$3,050,000 has been subsequently revised to $2,750,000 as the Group reimbursed the tenant an
additional amount of $300,000 during the reporting year 2013.
A-32
21.
Other Liabilities (Cont’d)
21B. Warranty Provision
Provision charged to profit or loss included in cost of sales
Used
22.
2011
$’000
2012
$’000
2013
$’000
707
613
539
228
114
118
(322)
(188)
(238)
613
539
419
2011
$’000
2012
$’000
2013
$’000
5,102
5,491
4,707
1,329
1,095
1,085
Trade payables:
Outside parties and accrued liabilities
Other payables:
23.
Directors (Note 3)
–
50
–
Dividend payable
–
125
125
Other payable to lessee (Note 21A)
–
1,000
–
Other payables for construction in progress
–
–
526
Subtotal
1,329
2,270
1,736
Total trade and other payables
6,431
7,761
6,443
Financial Instruments: Information on Financial Risks
23A. Classification of Financial Assets and Liabilities
The following table summarises the carrying amount of financial assets and liabilities recorded at
the end of the reporting year by FRS 39 categories:
2011
$’000
2012
$’000
2013
$’000
Financial assets:
Cash and bank balances
1,367
420
5,942
Loans and receivables
5,318
15,058
6,362
76
57
–
Finance lease receivables
Other financial assets
At end of the year
15
–
–
6,776
15,535
12,304
Financial liabilities:
Borrowings at amortised cost
8,727
8,426
30,485
Trade and other payables at amortised cost
6,431
7,761
6,443
15,158
16,187
36,928
At end of the year
Further quantitative disclosures are included throughout these financial statements.
There are no significant fair value measurements recognised in the statement of financial position.
A-33
23.
Financial Instruments: Information on Financial Risks (Cont’d)
23B. Financial Risk Management
The main purpose for holding or issuing financial instruments is to raise and manage the finances
for the entity’s operating, investing and financing activities. There are exposures to the financial
risks on the financial instruments such as credit risk, liquidity risk and market risk comprising
interest rate, currency risk and price risk exposures. The management has certain practices for the
management of financial risks. However these are not documented in formal written documents.
The following guidelines are followed: All financial risk management activities are carried out and
monitored by senior management staff. All financial risk management activities are carried out
following good market practices.
23C. Credit Risk on Financial Assets
Financial assets that are potentially subject to concentrations of credit risk and failures by
counterparties to discharge their obligations in full or in a timely manner consist principally of cash
balances with banks, cash equivalents and receivables. The maximum exposure to credit risk is:
the total of the fair value of the financial instruments; the maximum amount the entity could have
to pay if the guarantee is called on; and the full amount of any loan payable commitment at the
end of the reporting year. Credit risk on cash balances with banks and any derivative financial
instruments is limited because the counter-parties are entities with acceptable credit ratings. For
credit risk on receivables an ongoing credit evaluation is performed on the financial condition of
the debtors and a loss from impairment is recognised in profit or loss. The exposure to credit risk
is controlled by setting limits on the exposure to individual customers and these are disseminated
to the relevant persons concerned and compliance is monitored by management. There is no
significant concentration of credit risk, as the exposure is spread over a large number of counterparties and customers unless otherwise disclosed in the notes to the financial statements below.
Note 18 discloses the maturity of the cash and cash equivalents balances.
The Group generally does not grant credit terms. However, the Group may grant credit terms
to customers on a case by case basis, depending on the contract value, relationship with the
customer and payment track record of the customer. But some customers take a longer period to
settle the amounts.
(a)
Ageing analysis of the age of trade receivable amounts that are past due as at the end of
reporting years but not impaired:
Trade receivables:
Less than 30 days
31 to 60 days
61 to 90 days
Over 90 days
Total
(b)
2011
$’000
2012
$’000
2013
$’000
530
76
15
900
1,521
7,142
69
34
1,754
8,999
807
58
15
539
1,419
Ageing analysis as at the end of reporting years of trade receivables amounts that are
impaired:
2011
$’000
2012
$’000
2013
$’000
–
–
112
112
228
228
Trade receivables:
Over 90 days
Total
Other receivables are normally with no fixed terms and therefore there is no maturity. Management
has made arrangements to ensure that all non-trade debts are settled before the listing date.
There were no finance lease receivables that were past due.
A-34
23.
23D. Liquidity Risk
The following table analyses the non-derivative financial liabilities by remaining contractual maturity
(contractual and undiscounted cash flows):
Less than
1 year
2-5
years
More than
5 years
Total
$’000
$’000
$’000
$’000
Gross borrowings commitments
7,340
1,546
–
8,886
Trade and other payables
6,431
–
–
6,431
13,771
1,546
–
15,317
8,079
386
–
8,465
6,761
–
–
6,761
14,840
386
–
15,226
18,101
5,531
11,632
35,264
31 March 2011
Non-derivative financial liabilities:
At end of the year
31 March 2012
At end of the year
31 March 2013
At end of the year
6,443
–
–
6,443
24,544
5,531
11,632
41,707
The above amounts disclosed in the maturity analysis are the contractual undiscounted cash flows
and such undiscounted cash flows differ from the amount included in the statements of financial
position. When the counterparty has a choice of when an amount is paid, the liability is included
on the basis of the earliest date on which it can be required to pay. At the end of the reporting
years no claims on the financial guarantees are expected.
The liquidity risk refers to the difficulty in meeting obligations associated with financial liabilities that
are settled by delivering cash or another financial asset. It is expected that all the liabilities will be
paid at their contractual maturity. Purchases of new automobiles are generally conducted on a cash
on delivery basis and for purchase of new demo automobiles, a credit period of 90 days may be
granted. The average credit period taken to settle purchases of automobile parts and accessories
and other trade payables is about 30 days. The other payables are with short-term durations. In
order to meet such cash commitments the operating activity is expected to generate sufficient cash
inflows. The classification of the financial assets is shown in the statement of financial position as
they may be available to meet liquidity needs and no further analysis is deemed necessary.
Bank facilities:
Undrawn borrowing facilities
2011
$’000
2012
$’000
2013
$’000
15,451
26,127
24,230
The undrawn borrowing facilities are available for operating activities and to settle other
commitments. Borrowing facilities are maintained to ensure funds are available for the operations. A
schedule showing the maturity of financial liabilities and unused bank facilities is provided regularly
to management to assist in monitoring the liquidity risk.
A-35
23.
23E. Interest Rate Risk
The interest rate risk exposure is mainly from changes in floating interest rates. The interest
from financial assets including cash balances is not significant. The following table analyses the
breakdown of the significant financial instruments (excluding derivatives) by type of interest rate:
2011
$’000
2012
$’000
2013
$’000
Fixed rate
4,257
803
2,957
Floating rates
4,470
7,623
27,528
8,727
8,426
30,485
76
57
360
Financial assets:
Fixed rate
The interest rates are disclosed in the respective notes.
Sensitivity analysis: The effect on pre-tax profit is not significant.
23F. Foreign Currency Risk
Analysis of amounts denominated in non-functional currencies:
Euro
$’000
Great Britain
Pound
$’000
228
228
27
27
–
–
255
255
(266)
(266)
(38)
(1)
(1)
26
–
–
–
(267)
(267)
(12)
6
6
45
45
–
–
51
51
Total financial liabilities
Net financial assets at end of the year
(1)
(1)
5
(8)
(8)
37
–
–
–
(9)
(9)
42
31 March 2013
Financial assets:
Total financial assets
29
29
20
20
–
–
49
49
(332)
(332)
(303)
(8)
(8)
12
31 March 2011
Financial assets:
Net financial (liabilities) assets at end of the year
31 March 2012
Financial assets:
Net financial (liabilities) assets at end of the year
A-36
Swiss
Francs
$’000
(171)
(171)
(171)
Total
$’000
(511)
(511)
(462)
23.
23F. Foreign Currency Risk (Cont’d)
There is exposure to foreign currency risk as part of its normal business.
24.
25.
Capital Commitments
2011
$’000
2012
$’000
2013
$’000
Commitments to purchase properties
–
15,200
–
Commitments for construction in progress
–
–
1,742
Unrecognised Financial Instruments
Forward foreign currency contracts
There are no forward foreign currency contracts as at 31 March 2012 and 2013. For 2011, there
were outstanding foreign currency contracts with principal amounts totalling $5,241,000.
The purpose of these contracts is to mitigate the exposure in anticipated payables denominated in
the above currencies.
The net unrecognised gains as at 31 March 2011 on forward currency contracts amounted to
$254,000. These are not significant.
26.
Operating Lease Payment Commitments
At the end of the reporting years, the total of future minimum lease payment commitments under
non-cancellable operating leases are as follows:
Not later than one year
Later than one year and not later than five years
Later than five years
Rental expense for the year
2011
$’000
2012
$’000
2013
$’000
741
630
290
1,556
1,209
919
43
–
–
715
795
498
Operating lease payments are for rentals payable for office and showroom premises. The lease
rental terms are negotiated for an average term of ten years and rentals are subject to an
escalation clause but the amount of the rent increase is not to exceed a certain percentage.
Also see Note 12.
A-37
27.
Operating Lease Income Commitments
At the end of the reporting years, the total of future minimum lease receivables committed under
non-cancellable operating leases are as follows:
2011
$’000
Rental income for the year
2012
$’000
2013
$’000
528
528
564
1,732
892
388
511
600
606
Operating lease income commitments are for office premises. The lease rental income terms are
negotiated for an average term of five years.
28.
Contingent Liabilities and Other Commitments
2011
$’000
Banker’s guarantee in favour of suppliers
(secured – see Note 20C)
Corporate guarantees to banks in favour of customers
2012
$’000
2013
$’000
54
50
1,137
–
744
800
Guarantee contracts – For financial guarantee contracts the maximum earliest period in which the
guarantee could be called is used. At the end of the reporting years no claims on the financial
guarantees are expected. The following table shows the maturity analysis of the contingent
liabilities:
Less than 1 year
Guarantee contracts – given by Executive Directors (Note 3)
29.
2011
$’000
2012
$’000
2013
$’000
19,503
10,250
26,457
Events After the End of the Reporting Year
Events after the end of the reporting year ended 31 March 2013 are as follows:
(a)
The Restructuring Exercise (See Note 1.2).
(b)
Pursuant to written resolutions passed on 29 November 2013, the shareholders of the
Company approved, inter alia, the following:
(i)
the conversion of the Company into a public company limited by shares and the
change of the Company’s name to EuroSports Global Limited;
(ii)
the adoption of the new Articles of Association of the Company;
(iii)
the adoption of an employee performance share plan known as the “EuroSports
Performance Share Plan”; and
(iv)
the adoption of an employee share option scheme known as the “EuroSports
Employee Share Option Scheme”.
A-38
30.
Financial Information by Operating Segments
The Group’s operating businesses are currently organised according to their nature of business
activities. Such structural organisation is determined by the nature of risks and returns associated
to each business segment and defines the management structure as well as the internal reporting
system. Currently, the Group has only an automobile segment and it represents the basis on which
the Group reports its segment information. The Group mainly operated in Singapore during the
period.
There are no customers with revenue transactions of over 10% of the group revenue. The watch
segment is not significant.
31.
Adoption of Financial Reporting Standards
All new or revised Singapore Financial Reporting Standards were adopted for the first time from
the effective dates for the applicable reporting years.
32.
Future Changes in Financial Reporting Standards
The following new or revised Singapore Financial Reporting Standards that have been issued will
be effective in future. The transfer to the new or revised standards from the effective dates is not
expected to result in material adjustments to the financial position, results of operations, or cash
flows for the following year.
Effective date for
periods beginning
on or after
FRS No.
Title
FRS 1
Amendments to FRS 1 – Presentation of Items of Other
Comprehensive Income
Amendment to FRS 1 Presentation of Financial Statements
(Annual Improvements)
Amendment to FRS 16 Property, Plant and Equipment
Employee Benefits (Revised)
Consolidated and Separate Financial Statements
(Amendments to) (*)
Separate Financial Statements (Revised) (*)
Investments in Associates and Joint Ventures (Revised) (*)
Amendment to FRS 32 Financial instruments: Presentation
Amendments to FRS 32 and 107 titled Offsetting Financial
Assets and Financial Liabilities (*)
Consolidated Financial Statements (*)
Joint Arrangements (*)
Disclosure of Interests in Other Entities (*)
Amendments to FRS 110, FRS 111 and FRS 112 (*)
Fair Value Measurements
Stripping Costs in the Production Phase of a Surface Mine (*)
FRS 1
FRS 16
FRS 19
FRS 27
FRS 27
FRS 28
FRS 32
FRS 107
FRS 110
FRS 111
FRS 112
FRS 110
FRS 113
INT FRS 120
1 July 2012
1 January 2013
1 January 2013
1 January 2013
1 July 2012
1 January 2014
1 January 2014
1 January 2013
1 January 2013
1
1
1
1
1
1
January
January
January
January
January
January
2014
2014
2014
2014
2013
2013
(*) Not relevant to the entity.
33.
Approval of Combined Financial Statements
The combined financial statements were approved and authorised for issue by the Board of
Directors on 7 January 2014.
A-39
APPENDIX B
INDEPENDENT AUDITORS’ REPORT AND THE UNAUDITED COMBINED
FINANCIAL STATEMENTS FOR THE REPORTING PERIOD ENDED 30 JUNE 2013
Interim Combined Financial Statements
For the Reporting Period Ended 30 June 2013
B-1
INDEPENDENT AUDITORS’ REPORT ON THE UNAUDITED COMBINED FINANCIAL STATEMENTS
FOR THE REPORTING PERIOD ENDED 30 JUNE 2013 OF EUROSPORTS GLOBAL LIMITED
7 January 2014
Singapore 608927
Dear Sirs
Report on the Review of the Unaudited Interim Combined Financial Statements for the Reporting
Period Ended 30 June 2013
Introduction
We have reviewed the accompanying unaudited interim combined financial statements of EuroSports
Global Limited (the “Company”) and its subsidiaries (the “Group”), which comprise the combined
statement of financial position as at 30 June 2013, and the combined statement of comprehensive
income, combined statement of changes in equity and combined statement of cash flows of the Group for
the three-month period ended 30 June 2013, and a summary of significant accounting policies and other
explanatory information, as set out on pages B-4 to B-28. Management is responsible for the preparation
and fair presentation of this interim financial information in accordance with Singapore Financial
Reporting Standards. Our responsibility is to express a conclusion on this interim financial information
based on our review.
Scope of Review
We conducted our review in accordance with Singapore Standard on Review Engagement 2410, “Review
of Interim Financial Information Performed by the Independent Auditor of the Entity.” A review of interim
financial information consists of making inquiries, primarily of persons responsible for financial and
accounting matters, and applying analytical and other review procedures. A review is substantially less
in scope than an audit conducted in accordance with Singapore Standards on Auditing and consequently
does not enable us to obtain assurance that we would become aware of all significant matters that might
be identified in an audit. Accordingly, we do not express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that causes us to believe that the accompanying
interim combined financial statements do not present fairly, in all material respects, the financial position
of the Group as at 30 June 2013, and of its financial performance and its cash flows for the three-month
period then ended in accordance with Singapore Financial Reporting Standards.
The comparative figures for the corresponding three-month period ended 30 June 2012 were extracted
from the unaudited management financial information and we have not carried out a review on those
financial statements. The unaudited interim combined financial information for the corresponding threemonth period ended 30 June 2012 is the responsibility of the management.
B-2
INDEPENDENT AUDITORS’ REPORT ON THE UNAUDITED COMBINED FINANCIAL STATEMENTS
FOR THE REPORTING PERIOD ENDED 30 JUNE 2013 OF EUROSPORTS GLOBAL LIMITED
Report on Other Legal and Regulatory Requirements
The report has been prepared solely for inclusion in the Offer Document in connection with the proposed
Your faithfully
RSM Chio Lim LLP
Singapore
7 January 2014
Partner-in-charge: Paul Lee Seng Meng
B-3
Unaudited Combined Statement of Comprehensive Income
For the Reporting Period from 1 April 2013 to 30 June 2013
Three-Month Ended 30 June
Notes
Revenue
4
2012
2013
(Unaudited)
(Unaudited)
$’000
$’000
25,648
19,563
Cost of Sales
(20,088)
(14,658)
Gross Profit
5,560
4,905
788
620
1
1
Other Income
5
Interest Income
6
(411)
(16)
7
(683)
(719)
7
(1,673)
(2,023)
Finance Costs
7
(92)
(166)
Profit Before Tax
3,490
Income Tax Expense
9
(593)
2,602
(443)
Profit, Net of Tax
2,897
2,159
2,897
2,159
1.29
0.96
Basic and diluted
10
B-4
Unaudited Combined Statements of Financial Position
As at 30 June 2013
Notes
31 March 2013
30 June 2013
(Audited)
(Unaudited)
$’000
$’000
22,279
23,775
22,279
23,775
ASSETS
Non-Current Assets
12
Current Assets
Inventories
13
16,958
16,349
14
6,362
3,724
Other Assets
15
2,985
2,769
16
5,942
4,094
32,247
26,936
Total Assets
54,526
50,711
3,500
3,500
Equity
Share Capital
17
Retained Earnings
5,357
7,516
Total Equity
8,857
11,016
19
12,521
13,925
18
1,346
1,234
13,867
15,159
1,662
1,828
Current Liabilities
Income Tax Payable
20
6,443
4,969
19
17,964
13,296
18
5,733
4,443
31,802
24,536
Total Liabilities
45,669
39,695
54,526
50,711
B-5
Unaudited Combined Statement of Changes in Equity
Opening Balance at 1 April 2012
Total
Share
Retained
Equity
Capital
Earnings
$’000
$’000
$’000
4,638
3,500
1,138
6,719
–
6,719
(2,500)
–
(2,500)
Dividends (Note 11)
Closing Balance at 31 March 2013 (Audited)
8,857
3,500
5,357
2,159
–
2,159
11,016
3,500
7,516
4,638
3,500
1,138
Total Comprehensive Income for the Period
2,897
–
2,897
Closing Balance at 30 June 2012 (Unaudited)
7,535
3,500
4,035
Movement in Equity:
Total Comprehensive Income for the Period
Closing Balance at 30 June 2013 (Unaudited)
Opening Balance at 1 April 2012
B-6
Unaudited Combined Statement of Cash Flows
For the Reporting Period from 1 April 2013 to 30 June 2013
2012
2013
(Unaudited)
(Unaudited)
$’000
$’000
3,490
2,602
Profit before Tax
Adjustment for:
Deferred Income
(127)
(112)
233
440
Gains on Disposal of Plant and Equipment
(47)
Interest Income
(1)
Interest Expenses
92
Plant and Equipment Written Off
Operating Cash Flows before Changes in Working Capital
–
(1)
166
186
–
3,826
3,095
Inventories
1,389
3,112
5,114
2,638
57
–
Other Assets
(1,302)
Other Liabilities
(2,362)
(1,290)
(2,284)
(1,474)
4,438
6,297
Income Taxes Paid
(408)
4,030
216
(277)
6,020
Purchase of Plant and Equipment (Note 16B)
(24)
Disposal of Plant and Equipment
497
–
(500)
–
Interest Received
1
Net Cash Flows Used In Investing Activities
(1,736)
1
(26)
(1,735)
(2,090)
(5,524)
(561)
(504)
(92)
(166)
(2,743)
(6,194)
1,261
(1,909)
Decrease in Other Financial Liabilities
Interest Paid
Net Cash Flows Used In Financing Activities
Net Increase (Decrease) in Cash and Cash Equivalents
Cash and Cash Equivalents, Statement of Cash Flows, Beginning Balance
Cash and Cash Equivalents, Statement of Cash Flows, Ending Balance
(Note 16A)
B-7
420
3,682
1,681
1,773
Notes to Unaudited Combined Financial Statements
30 June 2013
1.
General
1.1.
The Company
The unaudited interim combined financial statements are presented in Singapore dollars and all
values are rounded to the nearest thousand ($’000) except when otherwise indicated.
The principal activities of the Company are those of investment holding company and the provision
of management services to the Group.
The principal activities and the details of the subsidiaries are described in Note 1.2 of the Audited
Combined Financial Statements for the reporting years ended 31 March 2011, 2012 and 2013
(Appendix A).
The report is prepared solely for inclusion in the Offer Document in connection with the proposed
The registered office address of the Company is: 30 Teban Garden Crescent, Singapore 608927.
1.2.
The Restructuring Exercise
The Group was formed through the Restructuring Exercise as described in Note 1.2 of the Audited
Combined Financial Statements for the reporting years ended 31 March 2011, 2012 and 2013
(Appendix A).
1.3.
Basis of Preparation and Presentation
The Group restructuring has been accounted for using the “pooling-of-interest’’ method.
Accordingly, the Group’s combined financial statements for the financial period ended 30 June
2013 have been prepared as if the Group has been in existence prior to the Restructuring Exercise.
The assets and liabilities are brought into the combined statements of financial position at the
existing carrying amounts. The figures of the Group for the financial period ended 30 June 2013
represent the combined results, state of affairs, changes in equity and cash flows as if the Group,
pursuant to the Restructuring Exercise, had existed since 1 April 2013.
2.
Summary of Significant Accounting Policies
Accounting Convention
The unaudited interim combined financial statements have been prepared in accordance with
Singapore Financial Reporting Standard (“FRS”) 34, Interim Financial Reporting. The Group
has applied the same accounting policies and methods of computation in the preparation of the
financial statements for the current period as compared with the Audited Combined Financial
Statements for the year ended 31 March 2013 (Appendix A). The operations are not subject to
seasonality or cyclicality. The adoption of new or revised FRS and Interpretations to FRS (“INT
FRS”) which effective from this financial period did not have significant impact on the financial
statements.
B-8
2.
Basis of Preparation of the Financial Statements
The preparation of financial statements in conformity with generally accepted accounting principles
requires the management to make estimates and assumptions that affect the reported amounts of
assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates. The estimates and assumptions are reviewed
on an ongoing basis. Apart from those involving estimations, management has made judgements
in the process of applying the entity’s accounting policies. The areas requiring management’s
most difficult, subjective or complex judgements, or areas where assumptions and estimates are
significant to the financial statements, are disclosed at the end of this footnote, where applicable.
Basis of Presentation
The interim combined financial statements include the financial statements made up to the end
of the reporting period of the Company and all of its directly and indirectly controlled subsidiaries.
Interim combined financial statements are the financial statements of the Group presented as
those of a single economic entity. The interim combined financial statements are prepared using
uniform accounting policies for like transactions and other events in similar circumstances. All
significant intragroup balances and transactions, including profit or loss and other comprehensive
income items and dividends are eliminated on consolidation. The results of any subsidiary
acquired or disposed of during the reporting period are accounted for from the respective dates of
acquisition or up to the date of disposal which is the date on which effective control is obtained of
the acquired business until that control ceases.
Changes in the Group’s ownership interest in a subsidiary that do not result in the loss of control
are accounted for within equity. When the Group loses control of a subsidiary it derecognises the
assets and liabilities and related equity components of the former subsidiary. Any gain or loss is
recognised in profit or loss. Any investment retained in the former subsidiary is measured at its fair
value at the date when control is lost and is subsequently accounted as available-for-sale financial
assets in accordance with FRS 39.
Critical Judgements, Assumptions and Estimation Uncertainties
The critical judgements made in the process of applying the accounting policies that have the most
significant effect on the amounts recognised in the financial statements and 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 within the next reporting period are discussed below. These estimates and
assumptions are periodically monitored to ensure they incorporate all relevant information available
at the date when financial statements are prepared. However, this does not prevent actual figures
differing from estimates.
In preparing these unaudited interim combined financial statements, the significant judgements
made by management in applying the Group’s accounting policies and the key sources of
estimation uncertainty were the same as those that applied to the Audited Combined Financial
Statements for the reporting year ended 31 March 2013 (Appendix A).
B-9
3.
Related Party Relationships and Transactions
FRS 24 defines a related party as a person or entity that is related to the reporting entity and it
includes (a) A person or a close member of that person’s family if that person: (i) has control or
joint control over the reporting entity; (ii) has significant influence over the reporting entity; or (iii) is
a member of the key management personnel of the reporting entity or of a parent of the reporting
entity. (b) An entity is related to the reporting entity if any of the following conditions apply: (i) The
entity and the reporting entity are members of the same group. (ii) One entity is an associate or
joint venture of the other entity. (iii) Both entities are joint ventures of the same third party. (iv) One
entity is a joint venture of a third entity and the other entity is an associate of the third entity. (v)
The entity is a post-employment benefit plan for the benefit of employees of either the reporting
entity or an entity related to the reporting entity. (vi) The entity is controlled or jointly controlled by a
person identified in (a). (vii) 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 ultimate controlling party is Goh Kim San, an Executive Director of the Company.
3.1
Related parties other than related companies:
There are transactions and arrangements between the reporting entity and related parties and
the effects of these on the basis determined between the parties are reflected in these financial
statements. The current related party balances are unsecured without fixed repayment terms and
interest unless stated otherwise. For any significant non-current balances and significant financial
guarantees an interest or charge is charged or imputed unless stated otherwise.
Significant related party transactions:
In addition to the transactions and balances disclosed elsewhere in the notes to the financial
statements, this item includes the following:
Related parties
2012
2013
(Unaudited)
(Unaudited)
$’000
$’000
Commission income
90
236
Sale of parts
92
4
–
9
Sale of watches
Handling fee income
10
Purchase of automobiles
–
–
(1,166)
The above related parties transactions are with companies in which the Directors have an interest
in and exercise influence.
3.2
Key management compensation:
Salaries and other short-term employee benefits
B-10
2012
2013
(Unaudited)
(Unaudited)
$’000
$’000
155
155
3.
3.2
Key management compensation (cont’d):
The above amounts are included under employee benefits expense. Included in the above
amounts are the following items:
Remuneration of Directors of the Group
2012
2013
(Unaudited)
(Unaudited)
$’000
$’000
155
155
Key management personnel are the Directors and those persons having authority and
responsibility for planning, directing and controlling the activities of the Group, directly or indirectly.
The above amounts for key management compensation are for all the Directors.
3.3
Other receivables from and other payables to related parties:
The trade transactions and the trade receivables and payables balances arising from sales and
purchases of goods and services are disclosed elsewhere in the notes to the financial statements.
The movements in other receivables from and other payables to related parties are as follows:
Related parties
31 March
2013
30 June
2013
(Audited)
(Unaudited)
$’000
$’000
Other receivables (Other payables):
Balance at beginning of the year/period
Amounts paid out and settlement of liabilities on behalf of related parties
Amounts paid in and settlement of liabilities on behalf of the Group
Commission income
3,400
3,772
28,713
3,315
(30,188)
(5,803)
1,689
236
Interest income
67
–
Handling fee income
91
–
3,772
1,520
4,857
2,605
(1,085)
(1,085)
3,772
1,520
Balance at end of the year/period
Net
Directors
31 March
2013
30 June
2013
(Audited)
(Unaudited)
$’000
$’000
Other payables:
(50)
Amounts paid out and settlement of liabilities on behalf of the Directors
Amounts paid in and settlement of liabilities on behalf of the Group
–
(2,500)
–
–
B-11
–
2,550
–
4.
Revenue
2012
2013
(Unaudited)
(Unaudited)
$’000
$’000
Sale of automobiles
Sale of parts and servicing
Sale of watches
5.
24,289
17,355
1,359
1,549
–
659
25,648
19,563
Other Income
2012
2013
(Unaudited)
(Unaudited)
$’000
$’000
Commission income
432
Rental income
141
168
127
112
Other income
6.
283
88
57
788
620
Other Credits (Charges)
2012
2013
(Unaudited)
(Unaudited)
$’000
$’000
Allowance for impairment on trade receivables
(110)
–
Foreign exchange adjustment losses
(162)
(16)
47
–
Gains on disposal of plant and equipment
Plant and equipment written off
7.
(186)
–
(411)
(16)
Marketing and Distribution Expenses, Administrative Expenses and Finance Costs
The major components include the following:
2012
2013
(Unaudited)
(Unaudited)
$’000
$’000
Marketing and distribution expenses
Entertainment
85
145
Advertising and promotions
310
366
Sales commission expense
163
170
Administrative expenses
Depreciation expense
233
440
787
794
Finance costs
This is for interest expense.
B-12
8.
Employee Benefits Expense
2012
2013
(Unaudited)
(Unaudited)
$’000
$’000
913
916
Contributions to defined contribution plan
73
80
Other benefits
15
41
1,001
1,037
Cost of sales
Marketing and distribution expenses (Note 7)
51
73
163
170
Administrative expenses (Note 7)
787
794
1,001
1,037
9.
Income Tax
9A.
Components of tax expense recognised in profit or loss includes:
2012
2013
(Unaudited)
(Unaudited)
$’000
$’000
Current tax expense:
Current tax expense
593
443
Total
593
443
The income tax in profit or loss varied from the amount of income tax amount determined by
applying the Singapore income tax rate of 17% to profit or loss before income tax as a result of the
following differences:
2012
2013
(Unaudited)
(Unaudited)
$’000
$’000
Profit before tax
Income tax expense at the above rate
Not deductible items
Tax exemption
Corporate tax rebate
Deferred tax asset not recognised (reversed)
Other items less than 3% each
Total income tax expense
3,490
2,602
593
442
16
31
(26)
(26)
–
(30)
(77)
(145)
87
171
593
443
There are no income tax consequences of dividends to owners of the Company.
B-13
9.
Income Tax (Cont’d)
9B.
Deferred tax income recognised in profit or loss include:
2012
2013
(Unaudited)
(Unaudited)
$’000
$’000
Excess of tax value over net book value of plant and equipment
2
(150)
77
145
–
–
Total deferred income tax expense recognised in profit or loss
9C.
5
(79)
Deferred tax balance in the statements of financial position:
31 March
2013
30 June
2013
(Audited)
(Unaudited)
$’000
$’000
Deferred tax assets recognised in profit or loss:
Excess of tax value over net book value of plant and equipment
42
47
452
302
(494)
(349)
Net
–
–
No deferred tax asset (on deductible temporary differences and unused tax losses) has been
recognised in respect of the above balance.
The realisation of the future income tax benefits from tax loss carryforwards of $1,778,000 (31
March 2013: $2,659,000) and temporary differences from capital allowances of $280,000 (31
March 2013: $247,000) is available for an unlimited future period subject to the conditions imposed
by law including the retention of majority shareholders as defined.
10.
Earnings Per Share
Basic earnings per share amount is calculated by dividing the profit attributable to ordinary equity
holders of the Company by the weighted average number of pre-invitation ordinary shares of no
par value as follows:
Net profit for the period attributable to the ordinary equity holders of
the Company
Weighted average number of pre-invitation shares
2012
2013
(Unaudited)
(Unaudited)
$’000
$’000
2,897
2,159
’000
’000
225,000
225,000
Diluted earnings per share is similar to basic earnings per share as there were no potential dilutive
ordinary shares existing during the relevant period.
B-14
11.
Dividends on Equity Share
31 March
2013
30 June
2013
(Audited)
(Unaudited)
$’000
$’000
Interim tax exempt (1-tier) dividend paid of $1.25 per share
2,500
–
The dividends were paid in respect of the 2,000,000 shares of EuroSports Auto Pte Ltd to the
shareholders of EuroSports Auto Pte Ltd prior to the completion of the Restructuring Exercise.
12.
Construction
in progress
$’000
Plant and
equipment
$’000
Motor
vehicles
$’000
Renovation
$’000
Leasehold
property and
improvement
$’000
Total
$’000
Cost:
At 1 April 2012
–
730
2,219
1,129
7,451
11,529
Additions
16,297
99
891
221
–
17,508
Disposals
–
–
(870)
–
–
(870)
Write-offs
–
(95)
–
(436)
–
(531)
16,297
734
2,240
914
7,451
27,636
At 31 March 2013 (Audited)
Additions
969
14
944
9
–
1,936
17,266
748
3,184
923
7,451
29,572
–
276
765
415
2,831
4,287
–
180
496
199
933
1,808
Disposals
–
–
(401)
–
–
(401)
Write-offs
–
(91)
–
(246)
–
(337)
–
365
860
368
3,764
5,357
Depreciation for the period
–
40
125
41
234
440
At 30 June 2013 (Unaudited)
–
405
985
409
3,998
5,797
Accumulated depreciation:
At 1 April 2012
Net book value:
At 1 April 2012
–
454
1,454
714
4,620
7,242
16,297
369
1,380
546
3,687
22,279
17,266
343
2,199
514
3,453
23,775
Also see Note 18A.
a)
Depreciation expense is included under administrative expenses.
b)
Certain items are under finance lease agreements (see Note 19).
c)
Certain motor vehicles are held in trust by the Executive Directors.
d)
Construction in progress includes the acquisition costs of 7 and 9 Chang Charn Road,
Singapore 159638 of $16,053,000 and cost of construction of an additional showroom at 30
Teban Gardens Crescent, Singapore 609827 of $1,213,000.
B-15
12.
13.
Property, Plant and Equipment (Cont’d)
e)
Pursuant to a conditional sale and purchase agreement dated 4 July 2012 between
EuroSports Auto Pte Ltd and RBC Dexia Trust Services Singapore Limited (in its capacity
as trustee of Cambridge Industrial Trust) (the “Purchaser”), EuroSports Auto Pte Ltd has
agreed to sell its leasehold interest in respect of 30 Teban Gardens Crescent Singapore
608927, comprising the land, building and all mechanical and electrical equipment installed
therein, to the Purchaser for a consideration of $41.0 million. It is a condition that EuroSports
Auto Pte Ltd must obtain from Jurong Town Council (“JTC”) a further leasehold term of
22 years and written confirmation from JTC that all terms and conditions imposed by JTC
have been fulfilled and that JTC has granted or confirmed the grant of the further leasehold
term. EuroSports Auto Pte Ltd shall obtain this confirmation by 31 March 2014 or such other
period as the parties may agree in writing. In the event EuroSports Auto Pte Ltd is unable to
obtain JTC’s confirmation by the deadline, the Purchaser shall be entitled to rescind the sale
and purchase agreement. On completion, EuroSports Auto Pte Ltd shall lease the property
from the Purchaser for six (6) years commencing from the actual date of completion at an
average annual rent of $3,589,000 over the lease term, with an option to renew the lease for
a further term of six (6) years.
f)
The leasehold property and leasehold properties under construction in progress are
mortgaged as security for the bank facilities (see Note 19).
Inventories
Automobiles
Automobile parts and accessories
Watches
31 March
2013
30 June
2013
(Audited)
(Unaudited)
$’000
$’000
13,535
12,683
1,045
1,489
2,378
2,177
16,958
16,349
31 March
2013
30 June
2013
(Audited)
(Unaudited)
$’000
$’000
Inventories are stated after allowance. Movements in allowance:
310
1,222
Charge to profit or loss included in cost of sales
1,222
–
Used
(310)
–
1,222
1,222
Changes in inventories of finished goods
6,290
(609)
65,633
3,249
1,222
–
The amount of inventories included in cost of sales
The write-downs of inventories charged to profit or loss included in cost
of sales
Certain inventories are pledged as security for the bank facilities and finance leases (Note 19).
B-16
14.
31 March
2013
30 June
2013
(Audited)
(Unaudited)
$’000
$’000
1,419
1,342
Trade receivables:
Outside parties
Less allowance for impairment
(228)
Related party (Note 3)
Subtotal
(228)
308
–
1,499
1,114
4,857
2,605
Other receivables:
Staff loans
6
5
Subtotal
4,863
2,610
Total trade and other receivables
6,362
3,724
112
228
Charge for trade receivables to profit or loss included in other charges
182
–
Used/bad debts written off
(66)
–
228
Movements in above allowance:
15.
228
Other Assets
Deposits
(a) (b)
Deferred expenses
Prepayments
(a)
31 March
2013
30 June
2013
(Audited)
(Unaudited)
$’000
$’000
2,776
2,631
126
–
83
138
2,985
2,769
Pursuant to a heads of agreement between EuroAutomobile Pte. Ltd. and Spania GTA
Tecnomotive S.L. (“GTA Spain”), a company incorporated in Spain, dated 22 September
2012, the Group will be granted the distributorship for GTA Spain’s automobiles (“GTA
automobiles”)in the Asia Pacific region. GTA Spain will enter into an exclusive distributorship
agreement with Spania GTA Asia Pacific Private Ltd. (“GTA Singapore”) granting GTA
Singapore the exclusive rights to distribute GTA automobiles in the designated territories,
including mainly the Asia Pacific region. In addition, the Group has been granted a call
option by GTA Spain to subscribe for such shares representing 13.4% of the share capital
of GTA Spain at a subscription consideration of EUR2 million. The Group is to purchase up
to eight (8) units of GTA automobiles from GTA Spain and has paid an aggregate refundable
deposit of EUR1.2 million (S$1.9 million equivalent) to GTA Spain for the purchase of five
(5) units of GTA automobiles as of 30 June 2013. The Executive Directors of the Company
have on 18 November 2013 executed a deed of indemnity in favour of the Group, pursuant
to which the Executive Directors have undertaken, inter alia, that they will pay to the Group,
on a joint and several basis, all deposits and monies paid to GTA Spain in connection with
the GTA automobiles remaining undelivered, in the event (i) GTA Spain fails to deliver the
GTA automobiles by 31 March 2015 and fails to refund the deposits and all monies paid
to GTA Spain in connection therewith, in full, to the Group; or (ii) if GTA Spain is wound up
dissolved, insolvent, bankrupt or placed in judicial management, whichever is the earlier.
B-17
15.
Other Assets (Cont’d)
(b)
16.
On 17 January 2013, the Group entered into a call option agreement to acquire 70% of the
issued and paid-up share capital of E’ Collezione Pte. Ltd. at a consideration of $2.1 million.
Pursuant to this transaction, a deposit of $210,000 was paid. An Executive Director of the
Company has undertaken to the vendors that in the event the Group does not exercise the
call option by the expiry of the stipulated option period, the Executive Director concerned will
pay the shareholders of E’ Collezione Pte. Ltd. a compensation. As at the date of this report,
the Group did not exercise the call option, which lapsed as of 30 June 2013. The deposit has
since been refunded to the Group. No compensation was paid or payable by the Executive
Director concerned pursuant to such undertaking.
Not restricted in use
31 March
2013
30 June
2013
(Audited)
(Unaudited)
$’000
$’000
5,582
3,734
360
360
5,942
4,094
31 March
2013
30 June
2013
(Audited)
(Unaudited)
$’000
$’000
5,942
4,094
(1,900)
(1,961)
(360)
(360)
16A. Cash and Cash Equivalents in the Statement of Cash Flows:
Amount as shown above
Bank overdrafts
Cash and cash equivalents for statement of cash flows purposes at end of
the year/period
3,682
1,773
16B. Non-Cash Transactions:
Additions to plant and equipment and inventories for the period ended 30 June 2013 amounting
to $200,000 and $2,503,000 respectively (30 June 2012: $Nil and $1,527,000 respectively) were
acquired by means of finance leases.
17.
Share Capital
Number
of shares
issued
Share
capital
’000
$’000
3,500
3,500
Ordinary shares of no par value:
Balance at 1 April 2012, 31 March 2013 and 30 June 2013
(a)
(a)
The share capital represents the combined share capital of EuroSports Auto Pte Ltd and
EuroAutomobile Pte. Ltd. prior to the Restructuring Exercise (Note 1.2 of the Audited
Combined Financial Statements for the reporting years ended 31 March 2011, 2012 and
2013 (Appendix A)).
The ordinary shares of no par value which are fully paid carry no right of fixed income and with one
vote per share.
B-18
17.
Share Capital (Cont’d)
Capital Management:
The objectives when managing capital are: to safeguard the reporting entity’s ability to continue
as a going concern, so that it can continue to provide returns for owners and benefits for other
stakeholders, and to provide an adequate return to owners by pricing the sales commensurately
with the level of risk. The management sets the amount of capital to meet its requirements and
the risk taken. There were no changes in the approach to capital management during the
reporting period. The management manages the capital structure and makes adjustments to it
where necessary or possible in the light of changes in conditions and the risk characteristics of
the underlying assets. In order to maintain or adjust the capital structure, the management may
adjust the amount of dividends paid to owners, return capital to owners, issue new shares, or sell
assets to reduce debt. Adjusted capital comprises all components of equity (that is, share capital
and reserves).
The management monitors the capital on the basis of the debt-to-adjusted capital ratio. This
ratio is calculated as net debt / adjusted capital (as shown below). Net debt is calculated as total
borrowings less cash and cash equivalents.
31 March
2013
30 June
2013
(Audited)
(Unaudited)
$’000
$’000
All current and non-current borrowings including finance leases
30,485
27,221
Less cash and cash equivalents
(5,942)
(4,094)
Net debt
24,543
23,127
Total equity
8,857
11,016
Adjusted capital
8,857
11,016
277.1%
209.9%
31 March
2013
30 June
2013
(Audited)
(Unaudited)
$’000
$’000
1,346
1,234
Non-Current, total
1,346
1,234
Net debt:
Adjusted capital:
Debt-to-adjusted capital ratio
18.
Other Liabilities
Non-Current:
Current:
Deposits from customers
Warranty provision (Note 18B)
448
448
4,866
3,621
419
374
Current, total
5,733
4,443
Total
7,079
5,677
B-19
18.
Other Liabilities (Cont’d)
18A. Deferred Income
31 March
2013
30 June
2013
(Audited)
(Unaudited)
$’000
$’000
2,542
1,794
Adjustment
(300)
Credit to profit or loss included in other income
(448)
–
(112)
1,794
1,682
448
448
1,346
1,234
1,794
1,682
Presented as:
Current
Non-Current
There were additions to leasehold property of $4,050,000 during the reporting year 2012 relating
to the fair value of the additions and extension of an additional 3rd storey comprising automobile
service centre and ancillary office to an existing 2nd storey detached factory constructed on
premises that were leased by the Group to a lessee. The Group reimbursed the lessee $1,000,000
for the cost of construction, with the lessee incurring the remaining cost of construction. The
construction of the property was completed and was available for use from April 2011. As the
property was constructed on the leasehold property belonging to the Group, the control of such
property is transferred to the Group. INT FRS 118 Transfers of Assets from Customers is applicable
for the transfer of the property to the Group and it is recognised at $3,050,000 being the value of
the property for the net cost incurred by the lessee less the amount reimbursed by the Group. The
corresponding credit of $3,050,000 is deferred income to be recognised in profit and loss over the
expected lease period to June 2017 on the straight line method. The deferred income amount of
$3,050,000 has been subsequently revised to $2,750,000 as the Group reimbursed the tenant an
additional amount of $300,000 during the reporting year 31 March 2013.
18B. Warranty Provision
Provision charged to profit or loss included in cost of sales
Used
B-20
31 March
2013
30 June
2013
(Audited)
(Unaudited)
$’000
$’000
539
419
118
8
(238)
(53)
419
374
19.
31 March
2013
30 June
2013
(Audited)
(Unaudited)
$’000
$’000
11,954
11,570
Non-Current:
567
2,355
12,521
13,925
Bank overdraft (Note 19A)
1,900
1,961
1,611
1,611
924
1,335
13,529
8,389
Non-Current, total
Current:
Trust receipts and bills payables (Note 19C)
Current, total
17,964
13,296
Total
30,485
27,221
4,294
5,892
After 5 years
8,227
8,033
12,521
13,925
31 March
2013
(Audited)
%
30 June
2013
(Unaudited)
%
1.28
1.28
4.00 - 7.25
2.80 – 7.25
31 March
2013
(Audited)
%
30 June
2013
(Unaudited)
%
2.32
2.32
The non-current portion is repayable as follows:
Total non-current portion
The range of floating rate interest rates paid was as follows:
Bank loans
Trust receipts and bills payables
The fixed rate interest rates paid was as follows:
Bank loans
19A. Bank Overdrafts and Bank Loans
The bank agreements for certain of the bank overdrafts and bank loans provide among other
matters for the following:
(a)
A legal mortgage over the leasehold property and the leasehold properties under
construction in progress.
(b)
(c)
Need to comply with certain financial covenants such as (a) the minimum networth of
EuroSports Auto Pte Ltd must not be less than $6,000,000 and (b) the leverage ratio be no
more than 4.5 times (defined as total liabilities divided by tangible networth).
The bank loans are repayable monthly from August 2012 and March 2013 by 30 and 180
instalments respectively.
B-21
19.
19B. Finance Lease Payables
30 June 2013 (Unaudited)
Minimum
payments
Finance
charges
Present value
$’000
$’000
$’000
1,398
(63)
1,335
Due within one year
2,507
(152)
2,355
Total
3,905
(215)
3,690
31 March 2013 (Audited)
5,101
Minimum
payments
Finance
charges
Present value
$’000
$’000
$’000
Due within one year
953
(29)
924
593
(26)
567
1,546
(55)
1,491
Total
2,547
There are leases for certain of its plant and equipment and inventories under finance leases. The
average lease term is 2 to 8 years. All leases are on a fixed repayment basis and no arrangements
have been entered into for contingent rental payments. The obligations under finance leases are
secured by the lessor’s charge over the leased assets.
The average effective interest rate per year
31 March
2013
30 June
2013
(Audited)
(Unaudited)
%
%
1.38 – 1.88
1.38 – 2.86
19C. Trust Receipts and Bills Payables
The trust receipts are covered by joint and several guarantees from the Executive Directors of the
Company.
The period of financing under trust receipts is 120 days inclusive of suppliers’ credit. The interest
is payable up to 2.25% per annum over Singapore Inter Bank Offer Rate (SIBOR) prevailing from
time to time.
The credit facilities for bills payables provide among other matters the following:
(a)
A fixed and floating charge over inventories and accounts receivables.
(b)
Joint and several guarantees by the Executive Directors of the Company.
B-22
20.
31 March
2013
30 June
2013
(Audited)
(Unaudited)
$’000
$’000
4,707
2,546
1,085
1,085
125
125
Trade payables:
Outside parties and accrued liabilities
Other payables:
Dividend payable
Other payables for construction in progress
21.
526
1,213
Subtotal
1,736
2,423
Total trade and other payables
6,443
4,969
Financial Instruments: Information on Financial Risks
21A. Classification of Financial Assets and Liabilities
The following table summarises the carrying amount of financial assets and liabilities recorded at
the end of the reporting period by FRS 39 categories:
31 March
2013
30 June
2013
(Audited)
(Unaudited)
$’000
$’000
5,942
4,094
Loans and receivables
6,362
3,724
12,304
7,818
30,485
27,221
6,443
4,969
36,928
32,190
Financial assets:
At end of the year/period
Borrowings at amortised cost
Trade and other payables at amortised cost
At end of the year/period
Further quantitative disclosures are included throughout these financial statements.
There are no significant fair value measurements recognised in the statement of financial position.
21B. Financial Risk Management
The main purpose for holding or issuing financial instruments is to raise and manage the finances
for the entity’s operating, investing and financing activities. There are exposures to the financial
risks on the financial instruments such as credit risk, liquidity risk and market risk comprising
interest rate, currency risk and price risk exposures. The management has certain practices for the
management of financial risks. However these are not documented in formal written documents.
The following guidelines are followed: All financial risk management activities are carried out and
monitored by senior management staff. All financial risk management activities are carried out
following good market practices.
B-23
21.
21C. Credit Risk on Financial Assets
Financial assets that are potentially subject to concentrations of credit risk and failures by
counterparties to discharge their obligations in full or in a timely manner consist principally of cash
balances with banks, cash equivalents and receivables. The maximum exposure to credit risk is:
the total of the fair value of the financial instruments; the maximum amount the entity could have
to pay if the guarantee is called on; and the full amount of any loan payable commitment at the
end of the reporting period. Credit risk on cash balances with banks and any derivative financial
instruments is limited because the counter-parties are entities with acceptable credit ratings. For
credit risk on receivables an ongoing credit evaluation is performed on the financial condition of
the debtors and a loss from impairment is recognised in profit or loss. The exposure to credit risk
is controlled by setting limits on the exposure to individual customers and these are disseminated
to the relevant persons concerned and compliance is monitored by management. There is no
significant concentration of credit risk, as the exposure is spread over a large number of counterparties and customers unless otherwise disclosed in the notes to the financial statements below.
Note 16 discloses the maturity of the cash and cash equivalents balances.
The Group generally does not grant credit terms. However, the Group may grant credit terms
to customers on a case by case basis, depending on the contract value, relationship with the
customer and payment track record of the customer. But some customers take a longer period to
settle the amounts.
(a)
Ageing analysis of the age of trade receivable amounts that are past due as at the end of
reporting year/period but not impaired:
31 March
2013
30 June
2013
(Audited)
(Unaudited)
$’000
$’000
807
977
58
118
Trade receivables:
Less than 30 days
31 – 60 days
61 – 90 days
15
1
Over 90 days
539
246
1,419
1,342
Total
(b)
Ageing analysis as at the end of reporting year/period of trade receivables amounts that are
impaired:
31 March
2013
30 June
2013
(Audited)
(Unaudited)
$’000
$’000
Over 90 days
228
228
Total
228
228
Trade receivables:
Other receivables are normally with no fixed terms and therefore there is no maturity. Management
has made arrangements to ensure that all non-trade debts are settled before the listing date.
B-24
21.
21D. Liquidity Risk
The following table analyses the non-derivative financial liabilities by remaining contractual maturity
(contractual and undiscounted cash flows):
Less than
1 year
2-5
years
More than
5 years
Total
$’000
$’000
$’000
$’000
At end of the period
13,467
7,308
11,535
32,310
4,969
–
–
4,969
18,436
7,308
11,535
37,279
18,101
5,531
11,632
35,264
6,443
–
–
6,443
24,544
5,531
11,632
41,707
At end of the year
The above amounts disclosed in the maturity analysis are the contractual undiscounted cash flows
and such undiscounted cash flows differ from the amount included in the statements of financial
position. When the counterparty has a choice of when an amount is paid, the liability is included
on the basis of the earliest date on which it can be required to pay. At the end of the reporting
period no claims on the financial guarantees are expected.
The liquidity risk refers to the difficulty in meeting obligations associated with financial liabilities that
are settled by delivering cash or another financial asset. It is expected that all the liabilities will be
paid at their contractual maturity. Purchases of new automobiles are generally conducted on a cash
on delivery basis and for purchase of new demo automobiles, a credit period of 90 days may be
granted. The average credit period taken to settle purchases of automobile parts and accessories
and other trade payables is about 30 days. The other payables are with short-term durations. In
order to meet such cash commitments the operating activity is expected to generate sufficient cash
inflows. The classification of the financial assets is shown in the statement of financial position as
they may be available to meet liquidity needs and no further analysis is deemed necessary.
Bank facilities:
Undrawn borrowing facilities
31 March
2013
30 June
2013
(Audited)
(Unaudited)
$’000
$’000
24,230
38,310
The undrawn borrowing facilities are available for operating activities and to settle other
commitments. Borrowing facilities are maintained to ensure funds are available for the operations. A
schedule showing the maturity of financial liabilities and unused bank facilities is provided regularly
to management to assist in monitoring the liquidity risk.
B-25
21.
21E. Interest Rate Risk
The interest rate risk exposure is mainly from changes in fixed rate and floating interest rates.
The interest from financial assets including cash balances is not significant. The following table
analyses the breakdown of the significant financial instruments (excluding derivatives) by type of
interest rate:
31 March
2013
(Audited)
$’000
Fixed rate
Floating rates
Financial assets:
Fixed rate
30 June
2013
(Unaudited)
$’000
2,957
27,528
30,485
1,267
25,954
27,221
360
360
The interest rates are disclosed in the respective notes.
21F. Foreign Currency Risk
Analysis of amounts denominated in non-functional currencies:
Euro
Great Britain
Pound
Swiss
Francs
Total
$’000
$’000
$’000
$’000
Financial assets:
10
11
–
21
10
11
–
21
Net financial assets at end of the period
(2)
(2)
8
(3)
(3)
8
–
–
–
(5)
(5)
16
29
20
–
49
29
20
–
49
(332)
(8)
(171)
(511)
(332)
(8)
(171)
(511)
Net financial (liabilities) assets at end of
the year
(303)
12
(171)
(462)
Financial assets:
There is exposure to foreign currency risk as part of its normal business.
B-26
22.
Capital Commitments
Commitments for construction in progress
23.
31 March
2013
30 June
2013
(Audited)
(Unaudited)
$’000
$’000
1,742
847
Operating Lease Payment Commitments
At the end of the reporting year/period, the total of future minimum lease payment commitments
under non-cancellable operating leases are as follows:
31 March
2013
30 June
2013
(Audited)
(Unaudited)
$’000
$’000
290
306
919
893
Rental expense for the year/period
498
74
Operating lease payments represent rentals for office and showroom premises. The lease rental
terms are negotiated for an average term of ten years and rentals are subject to an escalation
clause but the amount of the rent increase is not to exceed a certain percentage.
Also see Note 12.
24.
Operating Lease Income Commitments
At the end of the reporting year/period, the total of future minimum lease receivables committed
under non-cancellable operating leases are as follows:
31 March
2013
30 June
2013
(Audited)
(Unaudited)
$’000
$’000
564
564
388
247
Rental income for the year/period
606
168
Operating lease income commitments are for office premises. The lease rental terms are
negotiated for an average term of five years.
B-27
25.
Contingent Liabilities and Other Commitments
Banker’s guarantee in favour of suppliers (secured – see Note 19C)
Corporate guarantees to banks in favour of customers
31 March
2013
30 June
2013
(Audited)
(Unaudited)
$’000
$’000
1,137
1,139
800
–
Guarantee contracts – For financial guarantee contracts the maximum earliest period in which
the guarantee could be called is used. At the end of the reporting year/period no claims on the
financial guarantees are expected. The following table shows the maturity analysis of the
contingent liabilities:
Less than 1 year
Guarantee contracts – given by Executive Directors (Note 3)
26.
31 March
2013
30 June
2013
(Audited)
(Unaudited)
$’000
$’000
26,457
26,457
Events After the End of the Reporting Period
Please refer to the Audited Combined Financial Statements for the reporting years ended 31 March
2011, 2012 and 2013 (Appendix A).
27.
Financial Information by Operating Segments
The Group’s operating businesses are currently organised according to their nature of business
activities. Such structural organisation is determined by the nature of risks and returns associated
to each business segment and defines the management structure as well as the internal reporting
system. Currently, the Group has only an automobile segment and it represents the basis on which
the Group reports its segment information. The Group mainly operated in Singapore during the
period.
There are no customers with revenue transactions of over 10% of the group revenue. The watch
segment is not significant.
B-28
APPENDIX C
INDEPENDENT AUDITORS’ REPORT AND THE UNAUDITED PRO FORMA
COMBINED FINANCIAL INFORMATION FOR THE REPORTING YEAR ENDED
31 MARCH 2013 AND THE REPORTING PERIOD ENDED 30 JUNE 2013
Pro Forma Combined Financial Information
For the Reporting Year Ended 31 March 2013 and the
Reporting Period Ended 30 June 2013
C-1
INDEPENDENT AUDITORS’ REPORT ON THE COMPILATION OF UNAUDITED PRO FORMA
COMBINED FINANCIAL INFORMATION FOR THE REPORTING YEAR ENDED 31 MARCH 2013 AND
REPORTING PERIOD ENDED 30 JUNE 2013 OF EUROSPORTS GLOBAL LIMITED
7 January 2014
Singapore 608927
Dear Sirs
Report on the Compilation of Unaudited Pro Forma Combined Financial Information Included in
an Offer Document
We have completed our assurance engagement to report on the compilation of pro forma financial
information of Eurosports Global Limited (the “Company”) and its subsidiaries (collectively, the “Group”)
by the management of the Company (the “Management”). The pro forma financial information consists
of the pro forma statements of financial position as at 31 March 2013 and 30 June 2013, the pro forma
statements of comprehensive income for the reporting year ended 31 March 2013 and reporting period
ended 30 June 2013, the pro forma statements of cash flow for the reporting year ended 31 March 2013
and reporting period ended 30 June 2013, and related notes as set out on pages C-5 to C-14 of the Offer
Document issued by the Company. The basis of preparation which the Management has compiled the
pro forma financial information are described in Note 2 to the Unaudited Pro Forma Combined Financial
Information (the “Basis of Preparation”).
The pro forma financial information has been compiled by the Management to illustrate the impact of the
events and transactions set out in Note 3 on the Group’s financial position as at 31 March 2013 and 30
June 2013 as if the events had taken place at 31 March 2013 and 30 June 2013 respectively; and the
Group’s financial performance and cash flows for the reporting year ended 31 March 2013 and reporting
period ended 30 June 2013 as if the events had taken place at 1 April 2012 and 1 April 2013 respectively.
As part of this process, information about the Group’s financial position, financial performance and cash
flows has been extracted by the Management from the Group’s combined financial statements for the
reporting year ended 31 March 2013 and the Group’s unaudited interim combined financial statements for
the reporting period ended 30 June 2013, included in Appendix A and B of this Offer Document.
Management’s Responsibility for the Pro Forma Financial Information
The Management is responsible for compiling the pro forma financial information on the Basis of
Preparation.
Independent Auditors’ Responsibility
Our responsibility is to express an opinion about whether the pro forma financial information has been
compiled, in all material respects, by the Management on the Basis of Preparation.
We conducted our engagement in accordance with Singapore Standard on Assurance Engagements
(SSAE) 3420, Assurance Engagements to Report on the Compilation of Pro Forma Financial Information
Included in a Prospectus, issued by the Institute of Singapore Chartered Accountants. This standard
requires that the Independent Auditors comply with ethical requirements and plan and perform
procedures to obtain reasonable assurance about whether the Management has compiled, in all material
respects, the pro forma financial information on the Basis of the Preparation.
C-2
For purposes of this engagement, we are not responsible for updating or reissuing any reports or
opinions on any historical financial information used in compiling the pro forma financial information, nor
have we, in the course of this engagement, performed an audit or review of the financial information used
in compiling the pro forma financial information.
The purpose of the pro forma financial information included in an Offer Document is solely to illustrate
the impact of a significant event of transaction on unadjusted financial information of the entity as if the
event had occurred or the transaction had been undertaken at an earlier date selected for purposes of
the illustration. Accordingly, we do not provide any assurance that the actual outcome of the event or
transaction at the respective dates would have been as presented.
A reasonable assurance engagement to report on whether the pro forma financial information has been
compiled, in all material respects, on the Basis of Preparation involves performing procedures to assess
whether the applicable criteria used by the Management in the compilation of the pro forma financial
information provide a reasonable basis for presenting the significant effects directly attributable to the
event or transaction, and to obtain sufficient appropriate evidence about whether:

The related pro forma adjustments give appropriate effect to those criteria; and

The pro forma financial information reflects the proper application of those adjustments to the
unadjusted financial information.
The procedures selected depend on the Independent Auditors’ judgment, having regard to the
Independent Auditors understanding of the nature of the Group, the event or transaction in respect
of which the pro forma financial information has been compiled, and other relevant engagement
circumstances.
The engagement also involves evaluating the overall presentation of the pro forma financial information.
We believe that the evidence we have obtained is sufficient and appropriate to provide a basis for our
opinion.
Opinion
In our opinion:
(a)
(b)
the pro forma financial information has been compiled:
(i)
in a manner consistent with the accounting policies adopted by the Group in the audited
combined financial statements, which are in accordance with the Singapore Financial
Reporting Standards;
(ii)
on the Basis of the Preparation stated in Note 2 of the Unaudited Pro Forma Combined
Financial Information; and
each material adjustment made to the information used in the preparation of the pro forma financial
information is appropriate for the purpose of preparing such unaudited financial information.
C-3
Restriction on Distribution and Use
This report has been prepared solely for inclusion in the Offer Document of the Company in connection
with the proposed initial public offering of ordinary shares in the capital of the Company on Catalist of the
Singapore Exchange Securities Trading Limited.
Your faithfully
RSM Chio Lim LLP
Singapore
7 January 2014
Partner in charge: Paul Lee Seng Meng
C-4
Unaudited Pro Forma Combined Statements of Comprehensive Income
For the Reporting Year Ended 31 March 2013
Audited
combined
statement of
comprehensive
income for the
reporting year
ended
31 March 2013
Unaudited pro
forma combined
statement of
Unaudited
comprehensive
pro forma
income for the
adjustments
reporting year
ended
(see explanatory
notes)
31 March 2013
$’000
Revenue
$’000
$’000
86,368
86,368
Cost of Sales
(69,171)
(69,171)
Gross Profit
17,197
Other Income
4,135
Interest Income
17,197
4(ii)
2,885
7,020
4(ii)
14,380
13,891
(3,736)
(12,476)
70
(489)
70
(3,362)
(8,740)
4(ii)
(466)
4(ii)
Finance Costs
Profit Before Tax
(3,362)
8,345
Income Tax Expense
(270)
13,259
(1,626)
–
(736)
21,604
(1,626)
Profit, Net of Tax
6,719
13,259
19,978
6,719
13,259
19,978
Basic and diluted
2.99
C-5
4(i)
8.88
Unaudited Pro Forma Combined Statements of Comprehensive Income
Unaudited
combined
statement of
comprehensive
income for the
reporting period
ended
30 June 2013
Unaudited pro
forma combined
statement of
Unaudited
comprehensive
pro forma
income for the
adjustments
reporting period
ended
(see explanatory
notes)
30 June 2013
$’000
Revenue
$’000
$’000
19,563
19,563
Cost of Sales
(14,658)
(14,658)
Gross Profit
4,905
Other Income
620
Interest Income
4,905
4(ii)
721
1,341
4(ii)
15,313
15,297
1
(16)
1
(719)
Finance Costs
Profit Before Tax
(719)
(2,023)
4(ii)
(166)
4(ii)
2,602
Income Tax Expense
(933)
(68)
15,033
(443)
–
(2,956)
(234)
17,635
(443)
Profit, Net of Tax
2,159
15,033
17,192
2,159
15,033
17,192
Basic and diluted
0.96
C-6
4(i)
7.64
Unaudited Pro Forma Combined Statements of Financial Position
As at 31 March 2013
Audited
combined
statement of
financial
position
as at 31 March
2013
Unaudited
pro forma
adjustments
(see explanatory
notes)
Unaudited
pro forma
combined
statement of
financial
position
as at 31 March
2013
$’000
$’000
$’000
ASSETS
Non-Current Assets
22,279
22,279
4(ii)
1,187
23,466
23,466
16,958
16,958
Current Assets
Inventories
6,362
Other Assets
2,985
5,942
6,362
4(ii)
3,415
6,400
4(ii)
35,585
33,527
4(iii)
(8,000)
32,247
63,247
Total Assets
54,526
86,713
Equity
Share Capital
3,500
Retained Earnings
5,357
Total Equity
4(i)
4,453
7,953
10,011
4(i)
(4,453)
4(ii)
17,107
4(iii)
(8,000)
8,857
17,964
12,521
1,346
13,867
12,521
4(ii)
15,321
16,667
29,188
Current Liabilities
Income Tax Payable
1,662
6,443
4(ii)
1,662
(526)
5,917
17,964
4(ii)
5,400
23,364
5,733
4(ii)
2,885
8,618
31,802
39,561
Total Liabilities
45,669
68,749
54,526
86,713
C-7
Unaudited Pro Forma Combined Statements of Financial Position
As at 30 June 2013
Unauudited
combined
statement of
financial
position
as at 30 June
2013
Unaudited
pro forma
adjustments
(see explanatory
notes)
Unaudited
pro forma
combined
statement of
financial
position
as at 30 June
2013
$’000
$’000
$’000
ASSETS
Non-Current Assets
23,775
23,775
4(ii)
734
24,509
24,509
16,349
16,349
Current Assets
Inventories
3,724
Other Assets
2,769
4,094
3,724
4(ii)
3,415
6,184
4(ii)
35,585
31,679
4(iii)
(8,000)
26,936
57,936
Total Assets
50,711
82,445
Equity
Share Capital
3,500
Retained Earnings
7,516
Total Equity
4(i)
4,453
7,953
12,292
4(i)
(4,453)
4(ii)
17,229
4(iii)
(8,000)
11,016
20,245
13,925
13,925
1,234
4(ii)
15,433
16,667
15,159
30,592
1,828
1,828
Current Liabilities
Income Tax Payable
4,969
4(ii)
(1,213)
3,756
13,296
4(ii)
5,400
18,696
4,443
4(ii)
2,885
24,536
31,608
Total Liabilities
39,695
62,200
50,711
82,445
C-8
7,328
Unaudited Pro forma Combined Statement of Cash Flows
For the Reporting Year Ended 31 March 2013
Unaudited
pro forma
combined
Unaudited
statement of
pro forma
cash flow
adjustments
for the reporting
(see explanatory year ended 31
notes)
March 2013
Audited
combined
statement of
cash flow
for the reporting
year ended 31
March 2013
$’000
$’000
$’000
4(ii)
13,259
21,604
4(ii)
(2,885)
(3,333)
Profit before Tax
8,345
Adjustment for:
Deferred Income
(448)
1,808
(82)
Interest Income
(70)
Interest Expenses
466
Plant and Equipment Written off
194
4(ii)
4(ii)
147
(14,380)
1,955
(14,462)
(70)
4(ii)
270
736
194
Operating Cash Flows before Changes in Working
Capital
10,213
6,624
Inventories
(3,421)
(3,421)
8,696
8,696
57
57
Other Assets
(2,311)
Other Liabilities
(4,069)
(4,069)
(1,318)
(1,318)
4(ii)
(3,415)
7,847
Income Taxes Paid
843
(1,662)
Net Cash Flows From (Used In) Operating Activities
(5,726)
(1,662)
6,185
(819)
Purchase of Property, Plant and Equipment
(16,834)
551
Interest Received
4(ii)
(7,400)
(24,234)
4(ii)
41,000
41,551
70
Net Cash Flows (Used In) From Investing Activities
70
(16,213)
17,387
Increase in Other Financial Liabilities
5,311
5,311
14,160
(2,855)
(2,500)
4(iii)
(8,000)
(10,500)
(466)
4(ii)
(270)
(736)
Interest Paid
Cash Restricted in Use over 3 Months
(360)
Net Cash Flows From Financing Activities
Net Increase in Cash and Cash Equivalents
Beginning Balance
Cash and Cash Equivalents, Statement of Cash
Flows, Ending Balance
C-9
4(ii)
5,400
19,560
(2,855)
(360)
13,290
10,420
3,262
26,988
420
420
3,682
27,408
Unaudited Pro forma Combined Statement of Cash Flows
Unaudited
pro forma
combined
Unaudited
statement of
pro forma
cash flow
adjustments
for the reporting
(see explanatory period ended 30
notes)
June 2013
Unaudited
combined
statement of
cash flow
for the reporting
period ended 30
June 2013
$’000
$’000
$’000
15,033
17,635
Profit before Tax
2,602
4(ii)
Adjustment for:
Deferred Income
(112)
Interest Income
4(ii)
440
4(ii)
–
4(ii)
(721)
36
(15,313)
(1)
Interest Expenses
166
(833)
476
(15,313)
(1)
4(ii)
68
234
Operating Cash Flows before Changes in Working
Capital
3,095
2,198
Inventories
3,112
3,112
2,638
2,638
Other Assets
216
4(ii)
(3,415)
(3,199)
Other Liabilities
(1,290)
(1,290)
(1,474)
(1,474)
6,297
1,985
Income Taxes Paid
(277)
(277)
6,020
1,708
Purchase of Property, Plant and Equipment
(1,736)
–
Interest Received
Net Cash Flows (Used In) From Investing Activities
4(ii)
(7,400)
(9,136)
4(ii)
41,000
41,000
1
1
(1,735)
31,865
Decrease in Other Financial Liabilities
(5,524)
–
(5,524)
4(ii)
5,400
5,400
4(iii)
(8,000)
(8,000)
4(ii)
(68)
(234)
(504)
–
Interest Paid
(166)
(504)
Net Cash Flows From Financing Activities
(6,194)
(8,862)
Net Increase in Cash and Cash Equivalents
(1,909)
24,711
Beginning Balance
3,682
3,682
Cash and Cash Equivalents, Statement of Cash
Flows, Ending Balance
1,773
28,393
C-10
Explanatory Notes to the Unaudited Pro Forma Combined Financial Information
For the Reporting Year Ended 31 March 2013 and Reporting Period Ended 30 June 2013
1.
General
The principal activities of the Company are those of an investment holding company and the
provision of management services to the Group. The principal activities of the Company’s
subsidiaries are trading and distribution of automobiles and automobile related parts and
accessories and trading and distribution of watches and related accessories.
The registered office address of the Company is: 30 Teban Gardens Crescent, Singapore 608927.
The unaudited pro forma combined financial information for the reporting year ended 31 March
2013 and the reporting period ended 30 June 2013 were approved and authorised for issue by the
Board of Directors on 9 December 2013.
2.
Basis of Preparation of the Unaudited Pro Forma Financial Information
2013 and reporting period ended 30 June 2013 were been prepared for inclusion in the Offer
Document in connection with the initial public offering of shares of EuroSports Global Limited and
should be read in conjunction with the audited combined financial statements of the Company and
its subsidiaries (collectively the “Group”) for the reporting years ended 31 March 2011, 2012 and
2013 (Appendix A) and the unaudited combined financial statements for the reporting period ended
30 June 2013 (Appendix B).
The unaudited pro forma combined financial information, which comprises the unaudited pro forma
combined statements of financial position, statements of comprehensive income and statements of
cash flows, has been prepared for illustrative purposes only to show what the financial position of
the Group as at 31 March 2013 and 30 June 2013 and the financial results and cash flows for the
reporting year ended 31 March 2013 and reporting period ended 30 June 2013 would have been
based on certain assumptions and after making certain adjustments as stated below.
The unaudited pro forma combined financial information, because of their nature may not give a
true picture of the Group’s actual financial position, results and cash flows.
The unaudited pro forma combined financial information has been prepared based on the
audited combined financial statements of the Group for the reporting year ended 31 March 2013
(Appendix A), and the unaudited combined financial statements for the reporting period ended 30
June 2013 (Appendix B), which have been prepared in accordance with the Singapore Financial
Reporting Standards by management. The audited combined financial statements for the reporting
year ended 31 March 2013 was audited by RSM Chio Lim LLP in accordance with Singapore
Standards on Auditing. The independent auditors issued an unqualified report on the combined
financial statements for the reporting year ended 31 March 2013. The unaudited combined financial
statements for the reporting period ended 30 June 2013 was reviewed by RSM Chio Lim LLP in
accordance with Singapore Standard on Review Engagement 2410, “Review of Interim Financial
Information Performed by the Independent Auditor of the Entity”.
C-11
2.
Basis of Preparation of the Unaudited Pro Forma Financial Information (Cont’d)
The unaudited pro forma combined financial information is presented in Singapore dollars and all
values are rounded to the nearest thousand ($’000) except when otherwise indicated.
The Group has applied the same accounting policies and methods of computation in the unaudited
pro forma combined financial information of the Group as those of the most recently audited
combined financial statements for the reporting year ended 31 March 2013.
2013 and reporting period ended 30 June 2013 have been prepared for illustrative purposes only
based on certain assumptions and after making certain adjustments to show what:
(i)
the financial results of the Group for the reporting year ended 31 March 2013 and reporting
period ended 30 June 2013 would have been if the Significant Events had occurred since
the beginning of the reporting year 31 March 2013 and reporting period 30 June 2013
respectively;
(ii)
the financial position of the Group as at 31 March 2013 and 30 June 2013 would have been
if the Significant Events had occurred at the end of the reporting year / period; and
(iii)
the cash flows of the Group for the reporting year ended 31 March 2013 and reporting
period ended 30 June 2013 would have been if the Significant Events had occurred since
the beginning of the reporting year 31 March 2013 and reporting period 30 June 2013
respectively.
The unaudited pro forma combined financial information, because of their nature, is not necessarily
indicative of the results of the operations, cash flows or the related effects on the financial position
that would have been attained had the Significant Events actually occurred earlier.
Save as disclosed in these Explanatory Notes, the Directors of the Company, for the purposes of
preparing this set of pro forma combined financial information, have not considered the effect of
other events.
3.
Significant Events
Save for the Significant Events described below, the Directors, as at the date of this report, are not
aware of any significant acquisitions or disposals of assets and any significant changes made to
the capital structure of the Company subsequent to 30 June 2013.
3A.
Restructuring Exercise and Share Capital
The Group was formed through the Restructuring Exercise disclosed in Note 1.2 to the Audited
Combined Financial Statements of the Group for the reporting years ended 31 March 2011, 2012
and 2013 (Appendix A).
As a result of the above, the resultant pre-invitation share capital of the Group and Company is
$7,952,863 and the number of pre-invitation shares is 225,000,000.
C-12
3.
Significant Events (Cont’d)
3B.
Sale and leaseback of leasehold property located at 30 Teban Gardens Crescent, Singapore
608927
Pursuant to a conditional sale and purchase agreement dated 4 July 2012 between EuroSports
Auto Pte Ltd and RBC Dexia Trust Services Singapore Limited (in its capacity as trustee of
Cambridge Industrial Trust)(the “Purchaser”), EuroSports Auto Pte Ltd has agreed to sell its
leasehold interest in respect of 30 Teban Gardens Crescent, Singapore 608927, comprising the
land, building and all mechanical and electrical equipment installed therein, to the Purchaser for
a consideration of $41.0 million. It is a condition that EuroSports Auto Pte Ltd must obtain from
Jurong Town Council (“JTC”) a further leasehold term of 22 years and written confirmation from
JTC that all terms and conditions imposed by JTC have been fulfilled and that JTC has granted
or confirmed the grant of the further leasehold term. EuroSports Auto Pte Ltd shall obtain
this confirmation by 31 March 2014 or such other period as the parties may agree in writing.
In the event EuroSports Auto Pte Ltd is unable to obtain JTC’s confirmation by the deadline,
the Purchaser shall be entitled to rescind the sale and purchase agreement. On completion,
EuroSports Auto Pte Ltd shall lease the property from the Purchaser for six years commencing
from the actual date of completion at an average annual rent of $3,589,000 over the lease term,
with an option to renew the lease for a further term of six years. The rental deposit of $3,415,000 is
assumed to be paid by cash.
Knight Frank Pte Ltd, a firm of independent professional valuers, valued 30 Teban Gardens
Crescent, Singapore 608927 as at 4 July 2012 at $21.0 million on the assumption that the 22 years
lease extension from JTC has been or will be granted and the property is sold in the open market
without the benefit of any leaseback agreement. The Directors consider this valuation as the fair
value of the property at the date of the conditional sale and purchase agreement. The difference
between the consideration of $41.0 million and fair value of $21.0 million will be deferred and
amortised over the leaseback period of six years or at an annual amount of $3,333,000.
The offer from JTC to grant the 22 years lease extension is conditional upon the fulfilment of, inter
alia, certain investment criteria, including the fulfilment of aggregate investment on building and
civil works and plant and machinery at the Group’s premises at 30 Teban Gardens Crescent of
at least $8.3 million, of which at least $6.0 million must consist of new investment on plant and
machinery and building and civil works, and the remainder may consist of the net book values of
the existing building and civil works and existing plant and machinery. In fulfilling the requirements
of minimum new investment of $6.0 million, the Group intends to construct an annex to their
premises at 30 Teban Gardens Crescent, comprising an additional two storey showroom, display
area and office, at an approximate cost of $2.0 million, out of which $0.6 million of the building
construction costs will go towards partial fulfilment of the minimum new investment of $6.0 million,
and acquire automobiles at an approximate cost of $5.4 million as plant and equipment for demo
and/or test-drive purposes and/or for the purpose of leasing. The remainder of the required
aggregate investment above will consist of the net book values of the existing building and civil
works and existing plant and machinery.
It is assumed that the construction cost of $2.0 million will be funded by cash and the automobiles
to be acquired are for leasing out to customers and the cost of $5.4 million will be funded by
drawdown of existing credit facilities available to the Group, repayable over 5 years at an interest
rate of 5% per annum.
3C.
Special dividend
The Company intends to declare a one-time special dividend of between $6 million and $8 million
subject to completion of the sale and leaseback of the leasehold property located at 30 Teban
Gardens Crescent, Singapore 608927 and such dividend is expected to be funded solely by the
sale proceeds arising therefrom. The Group is in the process of fulfilling the conditions precedent
to completion of the sale and leaseback of the leasehold property and expects to complete the
sale and leaseback arrangement by the first quarter of 2014, upon which the Company intends to
declare the special dividend in FY2015. For the purposes of the preparation of this unaudited pro
forma combined financial information, the special dividend is assumed as $8 million.
C-13
4.
Pro forma Adjustments
Based on the assumptions and the Significant Events disclosed in Notes 2 and 3 above, the
following material adjustments have been made to the audited combined financial statements of
the Group in arriving at the unaudited pro forma combined financial information:
(i)
restructuring exercise;
(ii)
sales and leaseback of leasehold property located at 30 Teban Gardens Crescent,
Singapore 608927; and
(iii)
one-time special dividend to be declared by the Company.
C-14
APPENDIX D
DESCRIPTION OF ORDINARY SHARES
The following statements are brief summaries of the more important rights and privileges of Shareholders
conferred by the laws of Singapore and our Articles of Association. These statements summarise the
material provisions of our Articles of Association but are qualified in their entirety by reference to our
Company’s Articles of Association and the laws of Singapore.
Ordinary Shares
We have only one class of shares, namely, our ordinary shares, which have identical rights in all respects
and rank equally with one another. Our Articles of Association provide that we may issue shares of a
different class with preferential, qualified, special or deferred right to dividends and in the distribution of
assets of our Company and with special or restricted rights, privileges or conditions as our Board may
think fit and may issue preference shares which are, or at our option are, redeemable, subject to certain
limitations.
All of our ordinary shares are in registered form. We may, subject to the provisions of the Companies Act
and the rules of the SGX-ST, purchase our own Shares. However, we may not, except in circumstances
permitted by the Companies Act, grant any financial assistance for the acquisition or proposed acquisition
of our own Shares.
New Shares
New Shares may only be issued with the prior approval in a general meeting of our Shareholders. The
aggregate number of Shares to be issued pursuant to such approval may not exceed 100.0% (or such
other limit as may be prescribed by the SGX-ST) of our issued share capital for the time being, of which
the aggregate number of shares to be issued other than on a pro-rata basis to our Shareholders shall
not exceed 50.0% (or such other limit as may be prescribed by the SGX-ST) of our issued share capital
for the time being (the percentage of issued share capital being based on our issued Shares at the time
such authority is given after adjusting for new Shares arising from the conversion of convertible securities
or employee share options on issue at the time such authority is given and any subsequent consolidation
or sub-division of Shares). The approval, if granted, will lapse at the conclusion of the annual general
meeting following the date on which the approval was granted or the date by which the annual general
meeting is required by law to be held, whichever is the earlier, but any approval may be previously
revoked or varied by our Company in general meeting. Subject to the foregoing, the provisions of the
Companies Act and any special rights attached to any class of shares currently issued, all new Shares
are under the control of our Board who may allot and issue the same with such rights and restrictions as
it may think fit.
Shareholders
Only persons who are registered in the register of Shareholders of our Company and, in cases in which
the person so registered is CDP, the persons named as the Depositors in the Depository Register
maintained by CDP for the Shares, are recognised as our Shareholders. For the purpose of determining
the number of votes which a Shareholder who is an account-holder directly with CDP or a Depository
Agent, or his proxy, may cast at any general meeting on a poll, the reference to Shares held or
represented shall, in relation to Shares of that Shareholder, be the number of Shares entered against his
name in the register maintained with CDP 48 hours before the time of the relevant general meetings as
certified by CDP to us.
Our Company will not, except as required by law, recognise any equitable, contingent, future or partial
interest in any Share or other rights for any Share other than the absolute right thereto of the registered
holder of that Share or of the person whose name is entered in the Depository Register for that Share.
Our Company may close the register of Shareholders for any time or times if it provides the SGX-ST
at least 10 clear Market Days’ notice. However, the register of Shareholders may not be closed for
more than 30 days in aggregate in any calendar year. Our Company typically closes the register of
Shareholders to determine Shareholders’ entitlement to receive dividends and other distributions.
D-1
Transfer of Shares
There is no restriction on the transfer of our fully paid Shares except where required by law or the rules,
bye-laws or existing rules of the SGX-ST. Our Board may decline to register any transfer of Shares which
are not fully paid Shares or Shares on which we have a lien. Our Shares may be transferred by a duly
signed instrument of transfer in a form approved by SGX-ST. Our Board may also decline to register
any instrument of transfer unless, among other things, it has been duly stamped and is presented for
registration together with the share certificate and such other evidence of title as they may require. We
will replace lost or destroyed certificates for our Shares if we are properly notified and if the applicant
pays a fee which will not exceed S$2.00 and furnishes any evidence and indemnity that our Board may
require.
General Meetings of Shareholders
We are required to hold an annual general meeting every year. Our Board may convene an extraordinary
general meeting whenever it thinks fit and must do so if Shareholders representing not less than 10.0%
of the total voting rights of all Shareholders request in writing that such a meeting be held. In addition,
two (2) or more Shareholders holding not less than 10.0% of our issued share capital may call a meeting.
Unless otherwise required by law or by our Articles of Association, voting at general meetings is by
ordinary resolution, requiring an affirmative vote of a simple majority of the votes cast at that meeting.
An ordinary resolution suffices, for example, for the appointment of directors. A special resolution,
requiring the affirmative vote of at least 75.0% of the votes cast at the meeting, is necessary for certain
matters under Singapore law, including the voluntary winding up of our Company, amendments to our
Memorandum and Articles of Association, a change of our corporate name and a reduction in our share
capital. We must give at least 21-days’ notice in writing for every general meeting convened for the
purpose of passing a special resolution. Ordinary resolutions generally require at least 14-days’ notice in
writing. The notice must be given to every Shareholder who at all times of the convening of the meeting
shall have paid all calls or other sums presenting payable by him in respect of our Shares and must set
forth the place, the day and the hour of the meeting and, in the case of special business, the general
nature of that business.
Voting Rights
A Shareholder is entitled to attend, speak and vote at any general meeting, in person or by proxy. A
proxy need not be a Shareholder. A person who holds Shares through the SGX-ST book-entry settlement
system will only be entitled to vote at a general meeting as a Shareholder if his name appears on the
depository register maintained by CDP 48 hours before the general meeting.
Except as otherwise provided in our Articles, two (2) or more Shareholders must be present in person
or by proxy to constitute a quorum at any general meeting. Under our Articles, on a show of hands,
every Shareholder present in person and by proxy shall have one (1) vote (provided that in the case of a
Shareholder who is represented by two (2) proxies, only one (1) of the two (2) proxies as determined by
that Shareholder or, failing such determination, by the chairman of the meeting or by a person authorised
by the chairman shall be entitled to vote on a show of hands), and on a poll, every Shareholder present
in person or by proxy shall have one (1) vote for each Share held. A poll may be demanded in certain
circumstances, including but not limited to the chairman of the meeting, by any Shareholder present in
person or by proxy and representing not less than 10.0% of the total voting rights of all Shareholders
having the right to attend and vote at the meeting, or by any two (2) Shareholders present in person or by
proxy and being entitled to vote. However, no poll may be demanded on the election of the chairman of
the meeting or on a question of adjournment of the meeting. In the case of an equality of votes, whether
on a show of hands or a poll, the chairman of the meeting shall be entitled to a casting vote.
Dividends
Our Directors may, with the sanction of the Shareholders by ordinary resolution, declare dividends at a
general meeting, but we may not pay dividends in excess of the amount recommended by our Board.
Any dividend we pay must be paid out of our profits. Our Directors may also declare an interim dividend
without the approval of our Shareholders. All dividends are paid pro rata among our Shareholders in
proportion to the amount paid up on each Share, unless the rights attaching to an issue of any Share
provides otherwise. Unless otherwise directed, dividends are paid by cheque or warrant sent through
the post to each Shareholder at his last registered address appearing in our register of members or (as
the case may be) the Depository Register. Notwithstanding the foregoing, payment by us to CDP of any
dividend payable to a Shareholder whose name is entered in the Depository Register shall, to the extent
of payment made to CDP, discharge us from any liability to that Shareholder in respect of that payment.
D-2
Bonus and Rights Issue
Our Board may, with approval by Shareholders at a general meeting, capitalise any reserves or profits
(including profit or monies carried and standing to any reserve) and distribute the same as bonus shares
credited as paid up to our Shareholders in proportion to their shareholdings. Our Directors may also issue
rights to take up additional Shares to Shareholders in proportion to their shareholdings. Such rights are
subject to any conditions attached to such issue and the regulations of any stock exchange on which we
are listed.
Takeovers
The Securities and Futures Act and the Singapore Code on Take-overs and Mergers (“Singapore
Take-over Code”) regulate the acquisition of ordinary shares of public companies and contain certain
provisions that may delay, deter or prevent a future takeover or change in control of our Company. Any
person acquiring an interest, either acting on his own or together with other parties acting in concert with
him, in 30.0% or more of our voting shares, must extend a takeover offer for the remaining voting shares
in accordance with the provisions of the Singapore Take-over Code. A mandatory takeover offer is also
required to be made if a person holding, either on his own or together with parties acting in concert with
him, between 30.0% and 50.0% of our voting shares, acquires additional voting shares representing more
than one per cent. (1.0%) of our voting shares in any six (6)-month period.
Under the Singapore Take-over Code, the following individuals and companies will be presumed to be
persons acting in concert with each other unless the contrary is established:
(a)
the following companies:
(i)
a company;
(ii)
the parent company of (i);
(iii)
the subsidiaries of (i);
(iv)
the fellow subsidiaries of (i);
(v)
the associated companies of (i), (ii), (iii) or (iv);
(vi)
companies whose associated companies include any of (i), (ii), (iii), (iv) or (v); and
(vii)
any person who has provided financial assistance (other than a bank in the ordinary course
of business) to any of the above for the purchase of voting rights;
(b)
a company with any of its directors (together with their close relatives, related trusts as well as
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 whose investment 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 customer in respect of the
shareholdings of:
(i)
the adviser and persons controlling, controlled by or under the same control as the adviser;
and
(ii)
all the funds which the adviser manages on a discretionary basis, where the shareholdings
of the adviser and any of those funds in the customer total 10.0% or more of the customer’s
equity share capital;
D-3
(f)
directors of a company (together with their close relatives, related trusts and companies controlled
by any of such directors, their close relatives and related trusts) which is subject to an offer or
where the directors have reason to believe a bona fide offer for their company may be imminent;
(g)
partners; and
(h)
the following persons and entities:
(i)
an individual;
(ii)
the close relatives of (i);
(iii)
the related trusts of (i);
(iv)
any person who is accustomed to act in accordance with the instructions of (i);
(v)
companies controlled by any of (i), (ii), (iii) or (iv); and
(vi)
any person who has provided financial assistance (other than a bank in the ordinary course
of business) to any of the above for the purchase of voting rights.
Under the Singapore Take-over Code, a mandatory offer made with consideration other than cash
must be accompanied by a cash alternative at not less than the highest price paid by the offeror or
any person acting in concert within the preceding six (6) months.
Liquidation or Other Return of Capital
If our Company is liquidated or in the event of any other return of capital, holders of our Shares will be
entitled to participate in any surplus assets in proportion to their shareholdings, subject to any special
rights attaching to any other class of shares then existing.
Indemnity
As permitted by Singapore law, our Articles of Association provide that, subject to the Companies Act,
our Board and officers shall be entitled to be indemnified by us against, inter alia, any liability incurred
in defending any legal proceedings, whether civil or criminal, which relate to anything done or omitted
to have been done as an officer or employee and in which judgement is given in their favour or in which
they are acquitted or in connection with any application under any statute for relief from liability in respect
thereof in which relief is granted by the court. We may not indemnify our Directors and officers against
liability which by law would otherwise attach to them in respect of any negligence, wilful default, breach of
duty or breach of trust of which they may be guilty in relation to us.
Limitations on Rights to Hold or Vote Shares
Except as described in “Voting Rights” and “Take-overs” above, there are no limitations imposed by
Singapore law or by our Articles of Association on the rights of non-resident Shareholders to hold or vote
in respect of our Shares.
Minority Rights
As we are a Singapore-incorporated company, the rights of our minority Shareholders are protected
under Section 216 of the Companies Act, which gives the Singapore courts a general power to make
any order, upon application by any of our Shareholders, as they think fit to remedy any of the following
situations:

if our affairs are being conducted or the powers of our Board are being exercised in a manner
oppressive to, or in disregard of the interests of, one (1) or more of our Shareholders; or

if we take an action, or threaten to take an action, or our Shareholders pass a resolution, or
propose to pass a resolution, which unfairly discriminates against, or is otherwise prejudicial to,
one (1) or more of our Shareholders, including the applicant.
D-4
Singapore courts have wide discretion as to the relief they may grant and that relief is in no way limited to
those listed in the Companies Act itself.
Without prejudice to the foregoing, Singapore courts may:

direct or prohibit any act or cancel or vary any transaction or resolution;

regulate the conduct of our affairs in the future;

authorise civil proceedings to be brought in the name of, or on behalf of, our Company by a person
or persons and on such terms as the court may direct;

provide for the purchase of a minority Shareholder’s shares by our other Shareholders or by us
and, in the case of a purchase of Shares by us, a corresponding reduction of our share capital;

provide that our Memorandum of Association or our Articles be amended; or

provide that our Company be wound up.
D-5
APPENDIX E
SUMMARY OF MEMORANDUM AND ARTICLES OF ASSOCIATION OF OUR
COMPANY
The discussion below provides a summary of the principal objects of our Company as set out in our
Memorandum of Association and certain provisions of our Articles of Association and the laws of
Singapore. This discussion is only a summary and is qualified by reference to Singapore law and our
Memorandum and Articles of Association.
Memorandum of Association and Registration Number
We are registered in Singapore with the Accounting and Corporate Regulatory Authority of Singapore.
Our company registration number is 201230284Z. Our Memorandum of Association provides that our
Company has full capacity, rights, powers and privileges to carry on or undertake any business or activity,
do any act or enter into any transaction.
Summary of our Articles Of Association
Directors
(a)
Ability of interested directors to vote
Every Director shall observe the provisions of Section 156 of the Companies Act relating to the
disclosure of the interests of our Directors in contracts or proposed contracts with our Company
or of any office or property held by a Director which might create duties or interests in conflict with
his duties or interests as a Director. Notwithstanding such disclosure, a Director shall not vote in
regard to any contract or proposed contract or arrangement in which he has directly or indirectly
a personal material interest although he shall be taken into account in ascertaining whether a
quorum is present.
(b)
Remuneration
The remuneration in the case of a Director other than an Executive Director shall comprise: (i) fees
which shall be a fixed sum and/or (ii) such fixed number of shares in the capital of our Company,
and shall not at any time be by commission on, or percentage of, the profits or turnover, and no
Director whether an Executive Director or otherwise shall be remunerated by a commission on, or
percentage of turnover.
Any Director who is appointed to any executive office or serves on any committee or who otherwise
performs or renders services, which in the opinion of our Directors are outside his ordinary duties
as a Director, may, subject to Section 169 of the Companies Act, be paid such extra remuneration
as our Directors may determine.
Our Directors may procure the establishment and maintenance of or participate in or contribute
to any non-contributory or contributory pension or superannuation fund or life assurance scheme
or any other scheme whatsoever for the benefit of and pay, provide for or procure the grant of
donations, gratuities, pensions, allowances, benefits or emoluments to any persons (including
Directors and Executive Officers) who are or shall have been at any time in the employment or
service of our Company or of the predecessors in business of our Company or of any subsidiary
company, and the wives, widows, families or dependants of any such persons. Our Directors may
also procure the establishment and subsidy of, or subscription and support to, any institutions,
associations, clubs, funds or trusts calculated to be for the benefit of any such persons as
aforesaid or otherwise to advance the interests and well-being of our Company or of any such
other company as aforesaid or of our members and payment for or towards the insurance of any
such persons as aforesaid, and subscriptions or guarantees of money for charitable or benevolent
objects or for any exhibition or for any public, general or useful object.
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(c)
Borrowing
Our Directors may at their discretion exercise every borrowing power vested in our Company by
our Memorandum of Association or permitted by law and may borrow or raise money from time to
time for the benefit of our Company and secure the payment of such sums by mortgage, charge
or hypothecation of all or any of the property or assets of our Company including any uncalled or
called but unpaid capital or by the issue of debentures or otherwise as they may think fit.
(d)
Retirement Age Limit
There is no retirement age limit for Directors under our Articles of Association. Section 153(1)
of the Companies Act however, provides that no person of or over the age of 70 years shall be
appointed a director of a public company, unless he is appointed or re-appointed as a director of
the company or authorised to continue in office as a director of the company by way of an ordinary
resolution passed at an annual general meeting of the company.
(e)
Shareholding Qualification
There is no shareholding qualification for Directors in the Memorandum and Articles of Association
of our Company.
Share rights and restrictions
Our Company currently has one (1) class of shares, namely, ordinary shares. Only persons who are
registered on our register of members and in cases in which the person so registered is CDP, the
persons named as the depositors in the Depository Register maintained by CDP for the ordinary shares,
are recognised as our shareholders.
(a)
Dividends and distribution
We may, by ordinary resolution of our shareholders, declare dividends at a general meeting, but
we may not pay dividends in excess of the amount recommended by our Board of Directors. We
must pay all dividends out of our profits. All dividends are paid pro rata amongst our shareholders
in proportion to the amount paid up on each shareholder’s ordinary shares, unless the rights
attaching to an issue of any ordinary share provide otherwise. Unless otherwise directed, dividends
are paid by cheque or warrant sent through the post to each shareholder at his registered address.
Notwithstanding the foregoing, the payment by us to CDP of any dividend payable to a shareholder
whose name is entered in the Depository Register shall, to the extent of payment made to CDP,
discharge us from any liability to that shareholder in respect of that payment.
The payment by our Directors of any unclaimed dividends or other moneys payable on or in
respect of a share into a separate account shall not constitute our Company a trustee in respect
thereof. All dividends unclaimed after being declared may be invested or otherwise made use of
by our Directors for the benefit of our Company and any dividend unclaimed after a period of six
(6) years from the date of declaration of such dividend may be forfeited and if so shall revert to our
Company. However, our Directors may at any time thereafter at their absolute discretion annul any
such forfeiture and pay the dividend so forfeited to the person entitled thereto prior to the forfeiture.
If the Depository returns any such dividend or moneys to our Company, the relevant Depositor
shall not have any right or claim in respect of such dividend or moneys against our Company if a
period of six (6) years has elapsed from the date of the declaration of such dividend or the date on
which such other moneys are first payable. For the avoidance of doubt, no member shall be entitled
to any interest, share of revenue or other benefit arising from any unclaimed dividends, howsoever
and whatsoever.
Our Directors may retain any dividends or other moneys payable on or in respect of a share on
which our Company has a lien, and may apply the same in or towards satisfaction of the debts,
liabilities or engagements in respect of which the lien exists.
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(b)
Voting rights
A holder of our ordinary shares is entitled to attend, speak and vote at any general meeting,
in person or by proxy. Proxies need not be a shareholder. A person who holds ordinary shares
through the SGX-ST book-entry settlement system will only be entitled to vote at a general meeting
as a shareholder if his name appears on the Depository Register maintained by CDP 48 hours
before the general meeting. Except as otherwise provided in our Articles of Association, two (2) or
more shareholders must be present in person or by proxy to constitute a quorum at any general
meeting. Under our Articles of Association, on a show of hands, every shareholder present in
person and by proxy shall have one (1) vote, and on a poll, every shareholder present in person
or by proxy shall have one (1) vote for each ordinary share which he holds or represents. A poll
may be demanded in certain circumstances, including by the Chairman of the meeting or by any
shareholder present in person or by proxy and representing not less than one-tenth of the total
voting rights of all shareholders having the right to attend and vote at the meeting or by any two (2)
shareholders present in person or by proxy and entitled to vote. In the case of an equality of rates,
whether on a show of hands or a poll, the Chairman of the meeting shall be entitled to a casting
vote.
Change in capital
Changes in the capital structure of our Company (for example, an increase, consolidation, cancellation,
sub-division or conversion of our share capital) require shareholders to pass an ordinary resolution.
Ordinary resolutions generally require at least 14 clear days’ notice in writing. The notice must be given
to each of our shareholders who have supplied us with an address in Singapore for the giving of notices
and must set forth the place, the day and the hour of the meeting. Our Company may reduce its share
capital or any undistributable reserve in any manner, subject to any requirements and consents required
by law.
Variation of rights of existing shares or classes of shares
If at any time the share capital is divided into different classes, the rights attached to any class (unless
otherwise provided by the terms of issue of the shares of that class) may, subject to the provisions of
the Companies Act, whether or not our Company is being wound up, be varied or abrogated either with
the consent in writing of the holders of three-quarters (3/4) of the issued shares of the class or with
the sanction of a special resolution passed at a separate general meeting of the holders of shares of
the class and to every such special resolution the provisions of Section 184 of the Companies Act shall
with such adaptations as are necessary apply. To every such separate general meeting, the provisions of
these Articles relating to general meetings shall mutatis mutandis apply,
provided always that:
(a)
the necessary quorum shall be two (2) persons at least holding or representing by proxy or by
attorney one-third of the issued shares of the class and that any holder of shares of the class
present in person or by proxy or by attorney may demand a poll, but where the necessary majority
for such a special resolution is not obtained at the meeting, consent in writing if obtained from the
holders of three-fourths of the issued shares of the class concerned within two (2) months of the
meeting shall be as valid and effectual as a special resolution carried at the meeting; and
(b)
where all the issued shares of the class are held by one (1) person, the necessary quorum shall be
one (1) person and such holder of shares of the class present in person or by proxy or by attorney
may demand a poll.
The repayment of preference capital other than redeemable preference capital or any other alteration
of preference shareholders’ rights may only be made pursuant to a special resolution of the preference
shareholders concerned, provided always that where the necessary majority for such a special resolution
is not obtained at a meeting, consent in writing if obtained from the holders of three-fourths of the
preference shares concerned within two (2) months of the meeting, shall be as valid and effectual as a
special resolution carried at the meeting.
Limitations on foreign or non-resident shareholders
There are no limitations imposed by Singapore law or by our Articles of Association on the rights of our
shareholders who are regarded as non-residents of Singapore, to hold or vote their shares.
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APPENDIX F
RULES OF THE EUROSPORTS PERFORMANCE SHARE PLAN
1.
NAME OF THE PERFORMANCE SHARE PLAN
The Performance Share Plan shall be called the “EuroSports Performance Share Plan’’.
2.
DEFINITIONS
2.1
In this Performance Share Plan, unless the context otherwise requires, the following words and
expressions shall have the following meanings:
“Adoption Date”
:
The date on which the Performance Share Plan is
adopted by the Company in general meeting
“Auditors”
:
The auditors for the time being of the Company
“Award”
:
An award of Shares granted under the Performance
Share Plan
“Board”
:
The board of Directors of the Company for the time
being
“Catalist”
:
The sponsor-supervised listing platform of the
SGX-ST
:
Section B of the Listing Manual of the SGX-ST, as
amended, modified or supplemented from time to
time
“CDP”
:
“Commencement Date”
:
The date for the commencement of the Performance
Share Plan
“Committee”
:
The remuneration committee of the Company, or
such other committee comprising directors of the
Company duly authorised and appointed by the
Board to administer this Performance Share Plan
“Companies Act”
:
The Companies Act (Chapter 50) of Singapore
“Company”
:
:
A Shareholder who, in relation to the Company, has
control, as further defined in Rule 2.2
“CPF”
:
“Director”
:
A director of the Company for the time being
“ESOS”
:
The EuroSports Employee Share Option Scheme,
as modified or supplemented from time to time
“Group”
:
The Company and its subsidiaries
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“Group Employee”
:
Any confirmed employee of the Group (including
any Group Executive Director) selected by the
Committee to participate in the Performance Share
Plan in accordance with the provisions thereof
“Group Executive Director”
:
A director of the Company and/or any of its
subsidiaries, as the case may be, who performs an
executive function
“Market Day”
:
A day on which the SGX-ST is open for trading in
securities
“New Shares”
:
The new Shares which may be issued from time
to time pursuant to the vesting of Awards granted
under the Performance Share Plan
“Non-Executive Director”
:
A director of the Company and/or any of its
subsidiaries, as the case may be, other than a
Group Executive Director
“Option”
:
The right to subscribe for Shares granted or to be
granted pursuant to the ESOS
“Participant”
:
A person who is selected by the Committee to
participate in the Performance Share Plan in
accordance with the provisions of the Performance
Share Plan
:
The EuroSports Performance Share Plan, as
“Performance Targets”
:
The performance targets prescribed by the
Committee to be fulfilled by a Participant for any
particular period under the Performance Share Plan
“Rules”
:
The rules of the Performance Share Plan, as the
same may be amended or supplemented from time
to time
“SGX-ST”
:
“Shareholders”
:
Registered holders of Shares except where the
registered holder is CDP, the term “Shareholders”
shall, in relation to such Shares, mean the persons
to whose securities accounts maintained with CDP
are credited with the Shares
“Shares”
:
Ordinary shares in the capital of the Company
“treasury shares”
:
Issued Shares of the Company which were (or
are treated as having been) purchased by the
Company in circumstances which Section 76H of
the Companies Act applies and have since purchase
been continuously held by the Company
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2.2
“Vesting Date”
:
In relation to Shares which are the subject of an
Award which has been released in accordance with
Rule 10, the date (as determined by the Committee
and notified to the relevant Participant) on which
those Shares will vest pursuant to Rule 10
:
Singapore dollars and cents respectively
:
Percentage or per centum
For the purposes of the Performance Share Plan:
(a)
in relation to a Shareholder (including, where the context requires, the Company), “control”
means the capacity to dominate decision-making, directly or indirectly, in relation to the
financial and operating policies of that company;
(b)
unless rebutted, a person who holds directly or indirectly, a shareholding of 15.0% or more of
the Company’s total number of issued shares excluding treasury shares shall be presumed
to be a Controlling Shareholder; and
(c)
in relation to a Controlling Shareholder, his “associate” shall have the meaning ascribed to it
by the Catalist Rules or any other publication prescribing rules or regulations for corporations
admitted to Catalist (as modified, supplemented or amended from time to time).
2.3
The terms “Depositor” and “Depository Agent” shall have the meanings ascribed to them
respectively by Section 130A of the Companies Act.
2.4
Any reference in the Performance Share Plan or the Rules to any enactment is a reference to that
enactment as for the time being amended or re-enacted. Any word defined under the Companies
Act or any statutory modification thereof and used in the Performance Share Plan and the Rules
shall have the meaning assigned to it under the Companies Act.
2.5
Words importing the singular number shall include the plural number where the context admits and
vice versa. Words importing the masculine gender shall include the feminine gender where the
context admits.
2.6
Any reference to a time of day shall be a reference to Singapore time.
3.
OBJECTIVES
3.1
The main objectives of the Performance Share Plan are as follows:
(a)
to attract potential employees with relevant skills to contribute to the Group and to create
value for Shareholders;
(b)
to instil loyalty to, and a stronger identification by the Participants with the long-term
prosperity of the Group;
(c)
to motivate the Participants to optimise their performance standards and efficiency and to
maintain a high level of contribution to the Group;
(d)
to give recognition to the contributions made by the Participants to the success of the Group;
and
(e)
to retain key employees of the Company whose contributions are essential to the long-term
prosperity of the Group.
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4.
ELIGIBILITY
4.1
The following persons (provided that such persons are not undischarged bankrupts at the relevant
time) shall be eligible to participate in the Performance Share Plan at the absolute discretion of the
Committee:
(a)
Group Employees (including Group Executive Directors) who have attained the age of 21
years on or before the date of grant of the Award; and
(b)
Non-Executive Directors (including independent Directors) who have attained the age of 21
years on or before the date of grant of the Award.
4.2
Controlling Shareholders shall not be eligible to participate in the Performance Share Plan.
However, the associates of the Controlling Shareholders who meet the eligibility criteria in Rule 4.1
shall be eligible to participate in the Performance Share Plan provided that (a) the participation of,
and (b) the terms of each grant and the actual number of Awards granted under the Performance
Share Plan, to a Participant who is an associate of a Controlling Shareholder shall be approved by
the independent Shareholders in separate resolutions for each such person.
4.3
Participants who are also Shareholders and are eligible to participate in the Performance Share
Plan must abstain from voting on any resolution relating to the Performance Share Plan, including
the participation in the Performance Share Plan and grant of Awards to the Participants, and
should not accept nominations as proxies or otherwise for voting in respect of such resolution
unless specific instructions have been given in the proxy instrument on how the votes are to be
cast.
4.4
Controlling Shareholder and his associate shall abstain from voting on the resolution in relation to
his participation in the Performance Share Plan and grant of Awards to him.
4.5
For the purposes of determining eligibility to participate in the Performance Share Plan, the
secondment of a Group Employee to another company within the Group shall not be regarded as a
break in his employment or his having ceased by reason only of such secondment to be a full-time
employee of the Group.
4.6
There shall be no restriction on the eligibility of any Participant to participate in any other share
incentive schemes or share plans implemented or to be implemented by the Company or any other
company within the Group.
4.7
participation in the Performance Share Plan may be amended from time to time at the absolute
discretion of the Committee.
5.
LIMITATIONS UNDER THE PERFORMANCE SHARE PLAN
5.1
The total number of Shares which may be delivered pursuant to the vesting of Awards on any date,
when added to the aggregate number of Shares issued and/or issuable in respect of (a) all Awards
granted under the Performance Share Plan; (b) all Options granted under the ESOS; and (c) all
other Shares issued and/or issuable under any other share-based incentive schemes or share
plans of the Company, shall not exceed 15.0% of the total number of issued Shares (excluding
treasury shares) of the Company from time to time.
5.2
Shares which are the subject of Awards which have lapsed for any reason whatsoever may be the
subject of further Awards granted by the Committee under the Performance Share Plan.
5.3
The aggregate number of Shares available to the associates of the Controlling Shareholders
(including adjustments made in accordance with Rule 11) shall not exceed 25.0% of the Shares
available under the Performance Share Plan.
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5.4
The number of Shares available to each associate of the Controlling Shareholder (including
adjustments made in accordance with Rule 11) shall also not exceed 10.0% of the Shares
available under the Performance Share Plan.
6.
DATE OF GRANT
The Committee may grant Awards at any time in the course of a financial year, provided that in the
event that an announcement on any matter of an exceptional nature involving unpublished price
sensitive information is imminent, Awards may only be vested and hence any Shares comprised in
such Awards may only be delivered on or after the second Market Day from the date on which the
aforesaid announcement is made.
7.
AWARDS
7.1
The selection of the Participants and number of Shares which are the subject of each Award to be
granted to a Participant in accordance with the Performance Share Plan shall be determined at the
absolute discretion of the Committee, which shall take into account criteria such as, inter alia, the
rank, scope of responsibilities, performance, years of service and potential for future development
and contribution to the success of the Group.
7.2
In the case of a performance-related Award, the Performance Targets will be set by the Committee
depending on each individual Participant’s job scope and responsibilities. The Performance Targets
to be set shall take into account both the medium and long-term corporate objectives of the Group
and the individual performance of the Participant and will be aimed at sustaining long-term growth.
The corporate objectives shall cover market competitiveness, business growth and productivity
growth. The Performance Targets could be based on criteria such as sales growth, growth in
earnings and return on investment. In addition, the Participant’s length of service with the Group,
achievement of past Performance Targets, value-add to the Group’s performance and development
and overall enhancement to shareholder value, amongst others, will be taken into account.
7.3
As soon as reasonably practicable after an Award is finalised by the Committee, the Committee
shall send an Award letter to the Participant confirming the said Award. The said Award letter shall
specify, inter alia, the following:
(a)
in relation to a performance-related Award, the Performance Targets for the Participant and
the period during which the Performance Targets shall be met;
(b)
the number of Shares to be vested on the Participant; and
(c)
the date by which the Award shall be vested.
7.4
The Committee shall take into account various factors when determining the method to arrive
at the exact number of Shares comprised in an Award. Such factors include, but are not limited
to, the current price of the Shares, the total issued share capital of the Company and the
predetermined dollar amount which the Committee decides that a Participant deserves for meeting
his Performance Targets. For example, Shares may be awarded based on predetermined dollar
amounts such that the quantum of Shares comprised in Awards is dependent on the closing price
of Shares transacted on the Market Day the Award is vested. Alternatively, the Committee may
decide absolute numbers of Shares to be awarded to Participants irrespective of the price of the
Shares. The Committee shall monitor the grant of Awards carefully to ensure that the size of the
Performance Share Plan will comply with the relevant rules of the Catalist Rules.
7.5
Awards are personal to the Participant to whom it is given and shall not be transferred (other than
to a Participant’s personal representative on the death of that Participant), charged, assigned,
pledged or otherwise disposed of, in whole or in part, unless with the prior approval of the
Committee.
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8.
VESTING OF THE AWARDS
8.1
Notwithstanding that a Participant may have met his Performance Targets, no Awards shall be
vested:
8.2
(a)
upon the bankruptcy of the Participant or the happening of any other event which results in
his being deprived of the legal or beneficial ownership of such Award;
(b)
in the event of any misconduct on the part of the Participant as determined by the
Committee in its discretion;
(c)
subject to Rule 8.2, upon the Participant ceasing to be in the employment of the Group for
any reason whatsoever; or
(d)
in the event that the Committee shall, at its discretion, deem it appropriate that such Award
to be given to a Participant shall so lapse on the grounds that any of the objectives of the
Performance Share Plan (as set out in Rule 3) have not been met.
A Participant shall be entitled to an Award so long as he has met the Performance Targets
notwithstanding that he may have ceased to be employed by the Group after the fulfilment of
such Performance Targets. For the purpose of this Rule 8.2, the Participant may cease to be so
employed in any of the following events, namely:
(a)
through ill health, injury or disability (in each case, evidenced to the satisfaction of the
Committee);
(b)
redundancy;
(c)
death;
(d)
retirement at or after the legal retirement age;
(e)
retirement before the legal retirement age with the consent of the Committee; or
(f)
any other event approved by the Committee.
9.
TAKE-OVER AND WINDING UP OF THE COMPANY
9.1
Notwithstanding Rule 8 but subject to Rule 9.5, in the event of a take-over being made for the
Shares, a Participant shall (notwithstanding that the vesting period for the Award has not expired)
be entitled to the Shares under the Awards if he has met the Performance Targets which fall within
the period commencing on the date on which such offer for a take-over of the Company is made or,
if such offer is conditional, the date on which such offer becomes or is declared unconditional, as
the case may be, and ending on the earlier of:
(a)
the expiry of six (6) months thereafter, unless prior to the expiry of such six (6)-month period,
at the recommendation of the offeror and with the approvals of the Committee and the SGXST, such expiry date is extended to a later date (in either case, being a date falling not later
than the last date on which the Performance Targets are to be met); or
(b)
the date of expiry of the period for which the Performance Targets are to be met,
provided that if during such period, the offeror becomes entitled or bound to exercise rights of
compulsory acquisition under the provisions of the Companies Act and, being entitled to do so,
gives notice to the Participants that it intends to exercise such rights on a specified date, the
Participant shall be obliged to fulfill such Performance Targets until the expiry of such specified
date or the expiry date of the Performance Targets relating thereto, whichever is earlier, before an
Award can be vested.
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9.2
If under any applicable laws, the court sanctions a compromise or arrangement proposed
for the purposes of, or in connection with, a scheme for the reconstruction of the Company
or its amalgamation with another company or companies, each Participant who has fulfilled his
Performance Target shall be entitled, notwithstanding the provisions herein and the fact that the
vesting period for such Award has not expired but subject to Rule 9.5, to any Shares under the
Awards so determined by the Committee to be released to him during the period commencing
on the date upon which the compromise or arrangement is sanctioned by the court and ending
either on the expiry of 60 days thereafter or the date upon which the compromise or arrangement
becomes effective, whichever is later.
9.3
If an order or an effective resolution is made for the winding-up of the Company on the basis of its
insolvency, all Awards, notwithstanding that they may have been so vested, shall be deemed or
become null and void.
9.4
In the event of a members’ voluntary winding-up (other than for amalgamation or reconstruction),
the Awards shall so vest in the Participant for so long as, in the absolute determination by the
Committee, the Participant has met the Performance Targets prior to the date that the members’
voluntary winding-up shall be deemed to have been commenced or effective in law.
9.5
If in connection with the making of a general offer referred to in Rule 9.1 or the scheme referred to
in Rule 9.2 or the winding-up referred to in Rule 9.4, arrangements are made (which are confirmed
in writing by the Auditors, acting only as experts and not as arbitrators, to be fair and reasonable)
for the compensation of Participants, whether by the payment of cash or by any other form of
benefit, no release of Shares under the Award shall be made in such circumstances.
10.
RELEASE OF AWARDS
10.1 As soon as reasonably practicable after the end of each performance period, the Committee
shall review the Performance Targets specified in respect of that Award and determine whether
they have been satisfied and, if so, the extent to which they have been satisfied (whether fully or
partially) and the number of Shares to be released.
10.2 The Committee shall have the discretion to determine whether Performance Targets have been
met (whether fully or partially) or exceeded and/or whether the Participant’s performance and/
or contribution to the Company and/or any of its subsidiaries justifies the vesting of an Award.
In making any such determination, the Committee shall have the right to make reference to the
audited results of the Company or the Group, as the case may be, to take into account such factors
as the Committee may determine to be relevant, such as changes in accounting methods, taxes
and extraordinary events, and further, the right to amend the Performance Targets if the Committee
decides that a changed Performance Targets would be a fairer measure of performance.
10.3 Awards may only be vested and consequently any Shares comprised in such Awards shall only be
delivered upon the Committee being satisfied that the Participant has achieved the Performance
Targets.
10.4 Subject to the prevailing legislation and the provisions of the Catalist Rules, the Company will
deliver Shares to Participants upon vesting of their Awards by way of an issue of New Shares or
the transfer of existing Shares held as treasury shares to the Participants.
10.5 In determining whether to issue New Shares or to purchase existing Shares for delivery to
Participants upon the vesting of their Awards, the Company will take into account factors such as
the number of Shares to be delivered, the prevailing market price of the Shares and the financial
effect on the Company of either issuing New Shares or purchasing existing Shares.
10.6 The Committee will procure, upon approval of the Board, the allotment or transfer to each
Participant of the number of Shares which are to be released to that Participant pursuant to an
Award under Rule 7. Any proposed issue of New Shares will be subject to there being in force at
the relevant time the requisite Shareholders approval under the Companies Act for the issue of
Shares. Any allotment of New Shares pursuant to an Award will take into account the rounding of
odd lots.
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10.7 Where New Shares are to be allotted or any Shares are to be transferred to a Participant pursuant
to the release of any Award, the Vesting Date will be a trading day falling as soon as practicable
after the review of the Committee referred to in Rule 10.1. On the Vesting Date, the Committee will
procure the allotment or transfer of each Participant of the number of Shares so determined.
10.8 Where New Shares are to be allotted upon the vesting of any Award, the Company shall, as soon
as practicable after allotment, where necessary, apply to the SGX-ST for the permission to deal in
and for quotation of such Shares on the SGX-ST.
10.9 Shares which are allotted or transferred on the release of an Award to a Participant shall be issued
in the name of, or transferred to, CDP to the credit of either:
(a)
the securities account of that Participant maintained with CDP;
(b)
the securities sub-account of that Participant maintained with a Depository Agent; or
(c)
the CPF investment account maintained with a CPF agent bank,
in each case, as designated by that Participant. Until such issue or transfer of such Shares has
been effected, that Participant shall have no voting rights nor any entitlements to dividends or
other distributions declared or recommended in respect of any Shares which are the subject of the
Award granted to him.
10.10 New Shares allotted and issued, and existing Shares held in treasury procured by the Company
for transfer, on the release of an Award, shall be subject to all the provisions of the Memorandum
and Articles of Association of the Company and the Companies Act, and shall rank in full for all
entitlements, including dividends or other distributions declared or recommended in respect of
the then existing Shares, the Record Date for which is on or after the date of issue of the New
Shares or the date of transfer of treasury shares pursuant to the vesting of the Award, and shall in
all other respects rank pari passu with other existing Shares then in issue. “Record Date” means
the date fixed by the Company for the purposes of determining entitlements to dividends or other
distributions to or rights of holders of Shares.
10.11 Shares which are allotted, and/or treasury shares which are transferred, on the vesting of an Award
to a Participant, may be subject to such moratorium as may be imposed by the Committee.
11.
VARIATION OF CAPITAL
11.1 If a variation in the issued ordinary share capital of the Company (whether by way of a
capitalisation of profits or reserves or rights issue, capital reduction, subdivision, consolidation,
distribution or otherwise) shall take place, then:
(a)
the class and/or number of Shares which are the subject of an Award to the extent not yet
vested; and/or
(b)
the class and/or number of Shares over which future Awards may be granted under the
Performance Share Plan,
shall be adjusted by the Committee to give each Participant the same proportion of the equity
capital of the Company as that to which he was previously entitled and, in doing so, the Committee
shall determine at its own discretion the manner in which such adjustment shall be made.
11.2 The following events shall not normally be regarded as a circumstance requiring adjustment:
(a)
the issue of securities as consideration for an acquisition or a private placement of securities;
(b)
the cancellation of issued Shares purchased or acquired by the Company by way of a
market purchase of such Shares undertaken by the Company on the SGX-ST during the
period when a share purchase mandate granted by Shareholders (including any renewal of
such mandate) is in force;
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(c)
the issue of Shares or other securities convertible into or with rights to acquire or subscribe
for Shares to its employees pursuant to share option scheme or share plan approved by
Shareholders in general meeting, including the Performance Share Plan; and
(d)
any issue of Shares arising from the exercise of any warrants or the conversion of any
convertible securities issued by the Company.
11.3 Notwithstanding the provisions of Rule 11.1:
(a)
the adjustment must be made in such a way that a Participant will not receive a benefit that
a Shareholder does not receive; and
(b)
any adjustment (except in relation to a capitalisation issue) must be confirmed in writing by
the Auditors (acting only as experts and not as arbitrators) to be in their opinion, fair and
reasonable.
11.4 Upon any adjustment required to be made pursuant to this Rule 11, the Company shall notify
the Participant (or his duly appointed personal representatives where applicable) in writing and
deliver to him (or his duly appointed personal representatives where applicable) a statement setting
forth the class and/or number of Shares thereafter to be issued or transferred on the vesting of an
Award. Any adjustment shall take effect upon such written notification being given.
12.
ADMINISTRATION OF THE PERFORMANCE SHARE PLAN
12.1 The Plan shall be administered by the Committee in its absolute discretion with such powers
and duties as are conferred on it by the Board, provided that no member of the Committee shall
participate in any deliberation or decision in respect of Awards granted or to be granted to him.
12.2 The Committee shall have the power, from time to time, to make and vary such rules (not being
inconsistent with the Performance Share Plan) for the implementation and administration of the
Performance Share Plan as they think fit including, but not limited to:
(a)
imposing restrictions on the number of Awards that may be vested within each financial year;
and
(b)
amending Performance Targets if by so doing, it would be a fairer measure of performance
for a Participant or for the Performance Share Plan as a whole.
12.3 Any decision of the Committee made pursuant to any provision of the Performance Share Plan
(other than a matter to be certified by the Auditors) shall be final and binding (including any
decisions pertaining to the number of Shares to be vested) or to disputes as to the interpretation of
the Performance Share Plan or any rule, regulation, procedure thereunder or as to any rights under
the Performance Share Plan.
13.
NOTICES AND ANNUAL REPORT
13.1 Any notice required to be given by a Participant to the Company shall be sent or made to the
registered office of the Company or such other addresses as may be notified by the Company to
him in writing.
13.2 Any notices or documents required to be given to a Participant or any correspondence to be made
between the Company and the Participant shall be given or made by the Committee (or such
person(s) as it may from time to time direct) on behalf of the Company and shall be delivered to
him by hand or sent to him at his home address according to the records of the Company or at the
last known address of the Participant and if sent by post, shall be deemed to have been given on
the day following the date of posting.
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13.3 The following disclosures (as applicable) will be made by the Company in its annual report for so
long as the Performance Share Plan continues in operation:
(a)
the names of the members of the Committee administering the Performance Share Plan;
(b)
in respect of the following Participants:
(i)
Directors of the Company;
(ii)
Associates of the Controlling Shareholders; and
(iii)
Participants (other than those in paragraphs (i) and (ii) above) who have received
Shares pursuant to the vesting of the Awards granted under the Performance Share
Plan which, in aggregate, represent five per cent. (5.0%) or more of the total number
of Shares available under the Performance Share Plan,
the following information:
(c)
(aa)
the name of the Participant;
(bb)
the aggregate number of Shares comprised in Awards which have been granted to
such Participant during the financial year under review;
(cc)
the aggregate number of Shares comprised in Awards which have been granted to
such Participant since the commencement of the Performance Share Plan to the end
of the financial year under review;
(dd)
the aggregate number of Shares comprised in Awards which have been issued
and/or transferred to such Participant pursuant to the vesting of Awards under the
Performance Share Plan since the commencement of the Performance Share Plan to
the end of the financial year under review; and
(ee)
the aggregate number of Shares comprised in Awards which have not been vested as
at the end of the financial year under review; and
such other information as may be required by the Catalist Rules or the Companies Act.
If any of the above is not applicable, an appropriate negative statement shall be included.
14.
MODIFICATIONS TO THE PERFORMANCE SHARE PLAN
14.1 Any or all the provisions of the Performance Share Plan may be modified and/or altered at any time
and from time to time by resolution of the Committee, provided that:
(a)
any modification or alteration which would be to the advantage of Participants under the
Performance Share Plan shall be subject to the prior approval of Shareholders in a general
meeting; and
(b)
no modification or alteration shall be made without due compliance with the Catalist Rules
and such other regulatory authorities as may be necessary.
14.2 Written notice of any modification or alteration made in accordance with this Rule 14 shall be given
to all Participants.
15.
TERMS OF EMPLOYMENT UNAFFECTED
The terms of employment of a Participant (who is a Group Employee) shall not be affected by his
participation in the Performance Share Plan, which shall neither form part of such terms nor entitle
him to take into account such participation in calculating any compensation or damages on the
termination of his employment for any reason.
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16.
DURATION OF THE PERFORMANCE SHARE PLAN
16.1 The Performance Share Plan shall continue to be in force at the discretion of the Committee,
subject to a maximum period of 10 years commencing on the Adoption Date, provided always that
the Performance Share Plan may continue beyond the above stipulated period with the approval
of the Company’s shareholders by ordinary resolution in general meeting and of any relevant
authorities which may then be required.
16.2 The Performance Share Plan may be terminated at any time at the discretion of the Committee or
by an ordinary resolution of the Company in general meeting subject to all other relevant approvals
which may be required and if the Performance Share Plan is so terminated, no further Awards shall
be offered by the Company thereunder.
16.3 Notwithstanding the expiry or termination of the Performance Share Plan, any Awards made to
Participants prior to such expiry or termination will continue to remain valid.
17.
TAXES
All taxes (including income tax) arising from the grant and/or disposal of Shares pursuant to the
Awards granted to any Participant under the Performance Share Plan shall be borne by that
Participant.
18.
COSTS AND EXPENSES
18.1 Each Participant shall be responsible for all fees of CDP relating to or in connection with the issue
and allotment or transfer of any Shares pursuant to the Awards in CDP’s name, the deposit of
share certificate(s) with CDP, the Participant’s securities account with CDP, or the Participant’s
securities sub-account with a CDP Depository Agent.
18.2 Save for the taxes referred to in Rule 17 and such other costs and expenses expressly provided
in the Performance Share Plan to be payable by the Participants, all fees, costs and expenses
incurred by the Company in relation to the Performance Share Plan including but not limited to the
fees, costs and expenses relating to the allotment, issue and/or delivery of Shares pursuant to the
Awards shall be borne by the Company.
19.
DISCLAIMER OF LIABILITY
Notwithstanding any provisions herein contained, the Board, the Committee and the Company
shall not under any circumstances be held liable for any costs, losses, expenses and damages
whatsoever and howsoever arising in any event, including but not limited to the Company’s delay
in issuing or transferring the Shares or applying for or procuring the listing of the Shares on the
SGX-ST.
20.
DISPUTES
Any disputes or differences of any nature arising hereunder shall be referred to the Committee and
its decision shall be final and binding in all respects.
21.
CONDITION OF AWARDS
Every Award shall be subject to the condition that no Shares would be issued or transferred
pursuant to the vesting of any Award if such issue or transfer would be contrary to any law or
enactment, or any rules or regulations of any legislative or non-legislative governing body for the
time being in force in Singapore or any other relevant country having jurisdiction in relation to the
issue or transfer of Shares hereto.
22.
GOVERNING LAW
The Performance Share Plan shall be governed by, and construed in accordance with, the laws
of the Republic of Singapore. The Participants, by accepting Awards in accordance with the
Performance Share Plan, and the Company irrevocably submit to the exclusive jurisdiction of the
courts of the Republic of Singapore.
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APPENDIX G
RULES OF THE EUROSPORTS EMPLOYEE SHARE OPTION SCHEME
1.
NAME OF THE ESOS
The ESOS shall be called the “EuroSports Employee Share Option Scheme”.
2.
DEFINITION
In the ESOS, unless the context otherwise requires, the following words and expressions shall have
the following meanings:
“Auditors”
:
The auditors of the Company for the time being
“Awards”
:
An award of Shares granted under the Performance Share Plan
“Board”
:
The board of directors of the Company for the time being
“Catalist”
:
The sponsor-supervised listing platform of the SGX-ST
:
Section B of the Listing Manual of the SGX-ST, as amended,
“CDP”
:
“Committee”
:
The remuneration committee of the Company, or such other
committee comprising directors of the Company duly authorised
and appointed by the Board to administer this ESOS
“Companies Act”
:
The Companies Act (Chapter 50) of Singapore
“Company”
:
:
A shareholder exercising control over the Company and unless
rebutted, a person who controls directly or indirectly 15.0% or
more of the Company’s issued share capital shall be presumed
to be a Controlling Shareholder of the Company
“CPF”
:
“Date of Grant”
:
In relation to an Option, the date on which the Option is granted
to a Participant pursuant to Rule 7
“Director”
:
A director of the Company for the time being
“ESOS”
:
The EuroSports Employee Share Option Scheme, as modified
or supplemented from time to time
“Exercise Price”
:
The price at which a Participant shall subscribe for each
Share upon the exercise of an Option which shall be the price
as determined in accordance with Rule 9, as adjusted in
accordance with Rule 10
“Grantee”
:
A person to whom an offer of an Option is made
“Group”
:
The Company and its Subsidiaries
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“Group Employee”
:
Any confirmed employee of the Group (including any Group
Executive Director) selected by the Committee to participate in
the ESOS in accordance with the provisions thereof
“Group Executive Director”
:
A director of the Company and/or any of its subsidiaries, as the
case may be, who performs an executive function
“Market Day”
:
A day on which the SGX-ST is open for trading in securities
“Market Price”
:
A price equal to the average of the last dealt prices for the
Shares on the SGX-ST over the five (5) consecutive Trading
Days immediately preceding the Date of Grant of that Option,
as determined by the Committee by reference to the daily
official list or any other publication published by the SGX-ST,
rounded to the nearest whole cent in the event of fractional
prices
“Non-Executive Director”
:
A director of the Company and/or any of its subsidiaries, as the
case may be, other than a Group Executive Director
“Offer Date”
:
The date on which an offer to grant an Option is made pursuant
to the ESOS
“Option”
:
The right to subscribe for Shares granted or to be granted to a
Group Employee pursuant to the ESOS and for the time being
subsisting
“Participant”
:
The holder of an Option
:
The EuroSports Performance Share Plan, as the same may be
modified or altered from time to time
“Record Date”
:
The date as at the close of business on which the Shareholders
must be registered in order to participate in any dividends,
rights, allotments or other distributions
“Rules”
:
The rules of the ESOS, as the same may be amended or
supplemented from time to time
“securities account”
:
The securities account maintained by a Depositor with CDP
“SGX-ST”
:
“Shareholders”
:
Registered holders of Shares except where the registered
holder is CDP, the term “Shareholders” shall, in relation to
such Shares, mean the persons to whose securities accounts
maintained with CDP are credited with the Shares
“Shares”
:
Ordinary shares in the capital of the Company
“Sponsor”
:
CIMB Bank Berhad, Singapore Branch (or such other sponsor
as may be appointed by the Company from time to time)
“Trading Day”
:
A day on which the Shares are traded on Catalist
:
Singapore dollars and cents respectively
:
Percentage or per centum
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2.2
For the purposes of the ESOS:
(a)
in relation to a Shareholder (including, where the context requires, the Company), “control”
means the capacity to dominate decision-making, directly or indirectly, in relation to the
financial and operating policies of that company;
(b)
unless rebutted, a person who holds directly or indirectly, a shareholding of 15.0% or more of
the Company’s total number of issued shares excluding treasury shares shall be presumed
to be a Controlling Shareholder; and
(c)
in relation to a Controlling Shareholder, his “associate” shall have the meaning ascribed to it
by the Catalist Rules or any other publication prescribing rules or regulations for corporations
admitted to Catalist (as modified, supplemented or amended from time to time).
2.3
The terms “Depositor” and “Depository Agent” shall have the meanings ascribed to them
respectively by Section 130A of the Companies Act.
2.4
Any reference in the ESOS or the Rules to any enactment is a reference to that enactment as
for the time being amended or re-enacted. Any word defined under the Companies Act or any
statutory modification thereof and used in the ESOS and the Rules shall have the meaning
assigned to it under the Companies Act.
2.5
Words importing the singular number shall include the plural number where the context admits and
vice versa. Words importing the masculine gender shall include the feminine gender where the
context admits.
2.6
Any reference to a time of day shall be a reference to Singapore time.
3.
OBJECTIVES OF THE ESOS
3.1
The ESOS will provide an opportunity for Group Employees who have contributed significantly to
the growth and performance of the Group (including Group Executive Directors) and Non-Executive
Directors (including independent Directors) and who satisfy the eligibility criteria as set out in Rule
4 of the ESOS, to participate in the equity of the Company.
3.2
The ESOS is primarily a share incentive scheme. It recognises the fact that the services of
such Group Employees are important to the success and continued well-being of the Group.
Implementation of the ESOS will enable the Company to give recognition to the contributions made
by such Group Employees. At the same time, it will give such Group Employees an opportunity to
have a direct interest in the Company and will also help to achieve the following positive objectives:
(a)
to motivate each Participant to optimise his performance standards and efficiency and to
maintain a high level of contribution to the Group;
(b)
to retain key employees and Directors whose contributions are essential to the long-term
growth and profitability of the Group;
(c)
to instil loyalty to, and a stronger identification by the Participants with the long-term
prosperity of, the Group;
(d)
to attract potential employees with relevant skills to contribute to the Group and to create
value for the Shareholders; and
(e)
to align the interests of the Participants with the interests of the Shareholders.
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4.
ELIGIBILITY
4.1
Confirmed Group Employees (including Group Executive Director) and Non-Executive Directors
(including independent Director) who have attained the age of 21 years on or prior to the relevant
Offer Date and are not undischarged bankrupts and have not entered into a composition with their
respective creditors, shall be eligible to participate in the ESOS at the absolute discretion of the
Committee.
4.2
Controlling Shareholders shall not be eligible to participate in the ESOS. However, their associates
who have contributed to the development and success of the Group shall be eligible to participate
in the ESOS, provided that (a) the participation of, and (b) the terms of any Options to be granted
and the actual number of Options to be granted under the ESOS, to a Participant who is an
associate of a Controlling Shareholder shall be approved by the independent Shareholders in
separate resolutions for each such person. The Company will at such time provide the rationale
and justification for any proposal to grant the associates of the Controlling Shareholders any
options (including the rationale for any discount to the market price, if so proposed).
Such Controlling Shareholder and his associate shall abstain from voting on the resolution in
relation to his participation in the ESOS and the grant of Options to him.
4.3
For the purposes of determining eligibility to participate in the ESOS, the secondment of a
confirmed Group Employee to another company within the Group shall not be regarded as a
break in his employment or his having ceased by reason only of such secondment to be a full-time
employee of the Group.
4.4
There will be no restriction on the eligibility of any Participant to participate in any other share
option or share incentive schemes implemented by any other companies within the Group.
4.5
participation in the ESOS may be amended from time to time at the absolute discretion of the
Committee, which would be exercised judiciously.
5.
MAXIMUM ENTITLEMENT
5.1
Subject to Rule 4, Rule 5.1, Rule 5.2 and Rule 10, the aggregate number of Shares in respect of
which Options may be offered to a Grantee for subscription in accordance with the ESOS shall be
determined at the discretion of the Committee, who shall take into account criteria such as rank,
past performance, years of service and potential development of the Participant.
5.2
The aggregate number of Shares issued and issuable in respect of all Options granted under the
ESOS available to the associates of the Controlling Shareholders shall not exceed 25.0% of the
total number of Shares available under the ESOS.
5.3
The number of Shares issued and issuable in respect of all Options granted under the ESOS
available to each associate of a Controlling Shareholder under the ESOS shall not exceed 10.0%
of the total number of Shares available under the ESOS.
6.
LIMITATION ON SIZE OF THE ESOS
The total number of Shares over which the Committee may grant Options on any date, when
added to the number of Shares issued and issuable in respect of (a) all Options granted under
the ESOS; (b) all Awards granted under the Performance Share Plan; and (c) all outstanding
options or awards granted under such other share-based incentive schemes of the Company, shall
not exceed 15.0% of the number of issued Shares (including treasury shares, as defined in the
Companies Act) on the day immediately preceding the Offer Date of the Option.
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7.
OFFER DATE
The Committee may, save as provided in Rule 4, Rule 5 and Rule 6, offer to grant Options to such
Grantees as it may select in its absolute discretion at any time during the period when the ESOS is
in force, except that no Option shall be granted during the period of 30 days immediately preceding
the date of announcement of the Company’s interim and/or final results (as the case may be).
In addition, in the event that an announcement on any matter of an exceptional nature involving
unpublished price sensitive information is made, offers to grant Options may only be made on or
after the second Market Day on which such announcement is released.
An offer to grant the Option to a Grantee shall be made by way of a letter (the “Letter of Offer’’)
in the form or substantially in the form set out in Schedule A, subject to such amendments as the
Committee may determine from time to time.
8.
ACCEPTANCE OF OFFER
An Option offered to a Grantee pursuant to Rule 7 may only be accepted by the Grantee within
30 days after the relevant Offer Date and not later than 5.00 p.m. on the 30th day from such Offer
Date (a) by completing, signing and returning to the Company the acceptance form (“Acceptance
Form”) in or substantially in the form set out in Schedule B, subject to such modification as the
Committee may from time to time determine, accompanied by payment of S$1.00 as consideration
and (b) if, at the date on which the Company receives from the Grantee the Acceptance Form in
respect of the Option as aforesaid, he remains eligible to participate in the ESOS in accordance
with these Rules.
If a grant of an Option is not accepted strictly in the manner as provided in this Rule, such offer
shall, upon the expiry of the 30 day period, automatically lapse and shall forthwith be deemed to be
null and void and be of no effect.
The Company shall be entitled to reject any purported acceptance of a grant of an Option made
pursuant to this Rule 8 or exercise notice (“Exercise Notice”) in or substantially in the form set
out in Schedule C given pursuant to Rule 12 which does not strictly comply with the terms of the
ESOS.
Options are personal to the Grantees to whom they are granted and shall not be sold, mortgaged,
transferred, charged, assigned, pledged or otherwise disposed of or encumbered in whole or in
part or in any way whatsoever without the Committee’s prior written approval, but may be exercised
by the Grantee’s duly appointed personal representative as provided in Rule 11.6 in the event of
the death of such Grantee.
The Grantee may accept or refuse the whole or part of the offer. If only part of the offer is
accepted, the Grantee shall accept the offer in multiples of 1,000 Shares.
In the event that a grant of an Option results in a contravention of any applicable law or regulation,
such grant shall be null and void and be of no effect and the relevant Participant shall have no
claim whatsoever against the Company.
Unless the Committee determines otherwise, an Option shall automatically lapse and become null,
void and of no effect and shall not be capable of acceptance if:
(a)
it is not accepted in the manner as provided in this Rule within the 30 day period; or
(b)
the Grantee dies prior to his acceptance of the Option; or
(c)
the Grantee is adjudicated a bankrupt or enters into composition with his creditors prior to
his acceptance of the Option; or
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9.
(d)
the Grantee being a Group Employee ceases to be in the employment of the Group or
(being a Director) ceases to be a Director of the Company, in each case, for any reason
whatsoever prior to his acceptance of the Option; or
(e)
the Company is liquidated or wound-up prior to the Grantee’s acceptance of the Option.
EXERCISE PRICE
Subject to any adjustment pursuant to Rule 10, the Exercise Price for each Share in respect of
which an Option is exercisable shall be determined by the Committee, in its absolute discretion, on
the Date of Grant, at:
(a)
a price equal to the Market Price; or
(b)
a price which is set at a discount to the Market Price, provided that:
(i)
the maximum discount shall not exceed 20.0% of the Market Price (or such other
percentage or amount as may be determined by the Committee and permitted by the
SGX-ST); and
(ii)
the Shareholders in general meeting shall have authorised, in a separate resolution,
the making of offers and grants of Options under the ESOS at a discount not
exceeding the maximum discount as aforesaid.
In making any determination under item (b) above on whether to give a discount and the quantum
of such discount, the Committee shall be at liberty to take into consideration such criteria as the
Committee may, at its absolute discretion, deem appropriate, including but not limited to:
(a)
the performance of the Company and/or its subsidiaries, as the case may be;
(b)
the years of service and individual performance of the eligible Group Employee or Director;
(c)
the contribution of the eligible Group Employee or Director to the success and development
of the Company and/or the Group; and
(d)
the prevailing market conditions.
In the event that the Company is no longer listed on the SGX-ST or any other relevant stock
exchange or trading in the Shares on the SGX-ST or such stock exchange is suspended for any
reason for 14 days or more, the Exercise Price for each Share in respect of which an Option is
exercisable shall be the fair market value of each such Share as determined by the Committee in
good faith.
10.
ALTERATION OF CAPITAL
10.1 If a variation in the issued share capital of the Company (whether by way of a capitalisation of
profits or reserves or rights issue or reduction (including any reduction arising by reason of the
Company purchasing or acquiring its issued Shares), subdivision, consolidation or distribution, or
otherwise howsoever) should take place, then:
(a)
the Exercise Price for the Shares, class and/or number of Shares comprised in the Options
to the extent unexercised and the rights attached thereto; and/or
(b)
the class and/or number of Shares in respect of which additional Options may be granted to
Participants,
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may be adjusted in such manner as the Committee may determine to be appropriate including
retrospective adjustments where such variation occurs after the date of exercise of an Option but
the Record Date relating to such variation precedes such date of exercise and, except in relation to
a capitalisation issue, upon the written confirmation of the Auditors (acting only as experts and not
as arbitrators), that in their opinion, such adjustment is fair and reasonable.
10.2 Notwithstanding the provisions of Rule 10.1 above, no such adjustment shall be made (a) if as a
result, the Participant receives a benefit that a Shareholder does not receive; and (b) unless the
Committee, after considering all relevant circumstances, consider it equitable to do so.
10.3 The issue of securities as consideration for an acquisition of any assets by the Company, or the
cancellation of issued Shares purchased or acquired by the Company by way of market purchase
of such Shares undertaken by the Company on the SGX-ST during the period when a share
purchase mandate granted by Shareholders (including any renewal of such mandate) is in force,
shall not be regarded as a circumstance requiring adjustment under the provisions of this Rule 10.
10.4 The restriction on the number of Shares to be offered to any Grantee under Rule 5 above, shall not
apply to the number of additional Shares or Options over additional Shares issued by virtue of any
adjustment to the number of Shares and/or Options pursuant to this Rule 10.
10.5 Upon any adjustment required to be made pursuant to this Rule 10, the Company shall notify
each Participant (or his duly appointed personal representative(s)) in writing and deliver to him (or,
where applicable, his duly appointed personal representative(s)) a statement setting forth the new
Exercise Price thereafter in effect and the class and/or number of Shares thereafter comprised in
the Option so far as unexercised. Any adjustment shall take effect upon such written notification
being given.
11.
OPTION PERIOD
11.1 Options granted with the Exercise Price set at Market Price shall only be exercisable, in whole or
in part (provided that an Option may be exercised in part only in respect of 1,000 Shares or any
multiple thereof), at any time, by a Participant after the first anniversary of the Offer Date of that
Option, provided always that the Options shall be exercised before the tenth anniversary of the
relevant Offer Date, or such earlier date as may be determined by the Committee, failing which all
unexercised Options shall immediately lapse and become null and void and a Participant shall have
no claim against the Company.
11.2 Options granted with the Exercise Price set at a discount to Market Price shall only be exercisable,
in whole or in part (provided that an Option may be exercised in part only in respect of 1,000
Shares or any multiple thereof), at any time, by a Participant after the second anniversary from
the Offer Date of that Option, provided always that the Options shall be exercised before the
tenth anniversary of the relevant Offer Date, or such earlier date as may be determined by the
Committee, failing which all unexercised Options shall immediately lapse and become null and void
and a Participant shall have no claim against the Company.
11.3 An Option shall, to the extent unexercised, immediately lapse and become null and void and a
Participant shall have no claim against the Company:
(a)
subject to Rules 11.4, 11.5 and 11.6, upon the Participant ceasing to be in the employment
of the Company or any of the companies within the Group for any reason whatsoever; or
(b)
upon the bankruptcy of the Participant or the happening of any other event which result in
his being deprived of the legal or beneficial ownership of such Option; or
(c)
in the event of misconduct on the part of the Participant, as determined by the Committee in
its absolute discretion.
For the purpose of Rule 11.3(a), a Participant shall be deemed to have ceased to be so employed
as of the date the notice of termination of employment is tendered by or is given to him, unless
such notice shall be withdrawn prior to its effective date.
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11.4 If a Participant ceases to be employed by the Group by reason of his:
(a)
ill health, injury or disability, in each case, as certified by a medical practitioner approved by
the Committee;
(b)
redundancy;
(c)
retirement at or after a normal retirement age; or
(d)
retirement before that age with the consent of the Committee,
or for any other reason approved in writing by the Committee, he may, at the absolute discretion
of the Committee exercise any unexercised Option within the relevant Option Period and upon the
expiry of such period, the Option shall immediately lapse and become null and void.
11.5 If a Participant ceases to be employed by a subsidiary:
(a)
by reason of the subsidiary, by which he is principally employed ceasing to be a company
within the Group or the undertaking or part of the undertaking of such subsidiary, being
transferred otherwise than to another company within the Group; or
(b)
for any other reason, provided the Committee gives its consent in writing, he may, at the
absolute discretion of the Committee, exercise any unexercised Options within the relevant
Option Period and upon the expiry of such period, the Option shall immediately lapse and
become null and void.
11.6 If a Participant dies and at the date of his death holds any unexercised Option, such Option may,
at the absolute discretion of the Committee, be exercised by the duly appointed legal personal
representatives of the Participant within the relevant Option Period and upon the expiry of such
period, the Option shall immediately lapse and become null and void.
11.7 If a Participant, who is also a Group Executive Director, ceases to be a Director for any reason
whatsoever, he may, at the absolute discretion of the Committee, exercise any unexercised Option
within the relevant option period and upon the expiry of such period, the Option shall immediately
lapse and become null and void.
12.
EXERCISE OF OPTIONS, ALLOTMENT AND LISTING OF SHARES
12.1 An Option may be exercised, in whole or in part (provided that an Option may be exercised in part
only in respect of 1,000 Shares or any multiple thereof), by a Participant giving notice in writing
to the Company in or substantially in the form set out in Schedule C (the “Exercise Notice”),
subject to such amendments as the Committee may from time to time determine. Every Exercise
Notice must be accompanied by a remittance for the full amount of the aggregate Exercise Price
in respect of the Shares which have been exercised under the Option, the relevant CDP charges
(if any) and any other documentation the Committee may require. All payments shall be made by
cheque, cashier’s order, bank draft or postal order made out in favour of the Company. An Option
shall be deemed to be exercised upon the receipt by the Company of the abovementioned Exercise
Notice duly completed and the receipt by the Company of the full amount of the aggregate
Exercise Price in respect of the Shares which have been exercised under the Option.
12.2 Subject to:
(a)
such consents or other actions required by any competent authority under any regulations or
enactments for the time being in force as may be necessary; and
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(b)
compliance with the Rules, the Companies Act and the Memorandum of Association of
the Company, the Company shall, as soon as practicable after the exercise of an Option
by a Participant but in any event within 10 Market Days after the date of the exercise of
the Option in accordance with Rule 12.1, allot the Shares in respect of which such Option
has been exercised by the Participant and within five (5) Market Days from the date of such
allotment, despatch the relevant share certificates to CDP for the credit of the securities
account of that Participant by ordinary post or such other mode of delivery as the Committee
may deem fit.
12.3 The Company shall, if necessary, as soon as practicable after the exercise of an Option, apply
for the listing and quotation of the Shares which may be issued upon exercise of the Option and
the Shares (if any) which may be issued to the Participant pursuant to any adjustments made in
accordance with Rule 10.
12.4 Shares which are allotted on the exercise of an Option by a Participant shall be issued, as the
Participant may elect, in the name of CDP to the credit of the securities account of the Participant
maintained with CDP or the Participant’s securities sub-account with a CDP Depository Agent.
12.5 Shares allotted and issued upon the exercise of an Option shall be subject to all provisions of the
Memorandum and Articles of Association of the Company and shall rank pari passu in all respects
with the then existing issued Shares in the capital of the Company except for any dividends, rights,
allotments or other distributions, the Record Date for which is prior to the date such Option is
exercised.
12.6 The Company shall keep available sufficient unissued Shares to satisfy the full exercise of all
Options for the time being remaining capable of being exercised.
13.
MODIFICATIONS TO THE ESOS
13.1 Any or all the provisions of the ESOS may be modified and/or altered at any time and from time to
time by resolution of the Committee, except that:
(a)
any modification or alteration which shall alter adversely the rights attaching to any Option
granted prior to such modification or alteration and which in the opinion of the Committee,
materially alters the rights attaching to any Option granted prior to such modification or
alteration may only be made with the consent in writing of such number of Participants who,
if they exercised their Options in full, would thereby become entitled to not less than threequarters (3/4) of the total number of Shares which would fall to be allotted upon exercise in
full of all outstanding Options;
(b)
any modification or alteration which would be to the advantage of Participants under the
ESOS shall be subject to the prior approval of the Shareholders in general meeting; and
(c)
no modification or alteration shall be made without the prior approval of the Sponsor or (if
required) any other stock exchange on which the Shares are quoted and listed, and such
other regulatory authorities as may be necessary.
For the purposes of Rule 13.1(a), the opinion of the Committee as to whether any modification or
alteration would alter adversely the rights attaching to any Option shall be final and conclusive.
13.2 Notwithstanding anything to the contrary contained in Rule 13.1, the Committee may at any time
by resolution (and without other formality, save for the prior approval of the Sponsor) amend or
alter the ESOS in any way to the extent necessary to cause the ESOS to comply with any statutory
provision or the provision or the regulations of any regulatory or other relevant authority or body.
13.3 Written notice of any modification or alteration made in accordance with this Rule 13 shall be given
to all Participants.
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14.
DURATION OF THE ESOS
14.1 The ESOS shall continue to be in force at the discretion of the Committee, subject to a maximum
period of 10 years, commencing on the date on which the ESOS is adopted by the Company in
general meeting. Subject to compliance with any applicable laws and regulations in Singapore, the
ESOS may be continued beyond the above stipulated period with the approval of the Shareholders
by ordinary resolution at a general meeting and of any relevant authorities which may then be
required.
14.2 The ESOS may be terminated at any time by the Committee or by ordinary resolution of the
Shareholders at a general meeting subject to all other relevant approvals which may be required
and if the ESOS is so terminated, no further Options shall be offered by the Company hereunder.
14.3 The termination, discontinuance or expiry of the ESOS shall be without prejudice to the rights
accrued to Options which have been granted and accepted as provided in Rule 8, whether such
Options have been exercised (whether fully or partially) or not.
15.
TAKE-OVER AND WINDING UP OF THE COMPANY
15.1 In the event of a take-over offer being made for the Company, Participants (including Participants
holding Options which are then not exercisable pursuant to the provisions of Rules 11.1 and
11.2) holding Options as yet unexercised shall, notwithstanding Rules 11 and 12 but subject to
Rule 15.5, be entitled to exercise such Options in full or in part during the period commencing on
the date on which such offer is made or, if such offer is conditional, the date on which the offer
becomes or is declared unconditional, as the case may be, and ending on the earlier of:
(a)
the expiry of six (6) months thereafter, unless prior to the expiry of such six (6) month period,
at the recommendation of the offeror and with the approvals of the Committee and the SGXST, such expiry date is extended to a later date (being a date falling not later than the date of
expiry of the Option Period relating thereto); or
(b)
the date of the expiry of the Option Period relating thereto,
whereupon any Option then remaining unexercised shall immediately lapse and become null and
void.
Provided always that if during such period the offeror becomes entitled or bound to exercise the
rights of compulsory acquisition of the Shares under the provisions of the Companies Act and,
being entitled to do so, gives notice to the Participants that it intends to exercise such rights on a
specified date, the Option shall remain exercisable by the Participants until such specified date or
the expiry of the Option Period relating thereto, whichever is earlier. Any Option not so exercised by
the said specified date shall lapse and become null and void.
Provided that the rights of acquisition or obligation to acquire stated in the notice shall have been
exercised or performed, as the case may be. If such rights of acquisition or obligations have not
been exercised or performed, all Options shall, subject to Rule 11.3, remain exercisable until the
expiry of the Option Period.
15.2 If, under any applicable laws, the court sanctions a compromise or arrangement proposed for
the purposes of, or in connection with, a scheme for the reconstruction of the Company or its
amalgamation with another corporation or corporations, Participants (including Participants holding
Options which are then not exercisable pursuant to the provisions of Rule 11.1 and 11.2) shall
notwithstanding Rules 11 and 12 but subject to Rule 15.5, be entitled to exercise any Option
then held by them during the period commencing on the date upon which the compromise or
arrangement is sanctioned by the court and ending either on the expiry of 60 days thereafter or
the date upon which the compromise or arrangement becomes effective, whichever is later (but
not after the expiry of the Option Period relating thereto), whereupon any unexercised Option shall
lapse and become null and void, Provided always that the date of exercise of any Option shall be
before the expiry of the relevant Option Period.
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15.3 If an order or an effective resolution is passed for the winding up of the Company on the basis of
its insolvency, all Options, to the extent unexercised, shall lapse and become null and void.
15.4 In the event a notice is given by the Company to its members to convene a general meeting
for the purposes of considering and, if thought fit, approving a resolution to voluntarily wind-up
the Company, the Company shall on the same date as or soon after it despatches such notice
to each member of the Company give notice thereof to all Participants (together with a notice of
the existence of the provision of this Rule 15.4) and thereupon, each Participant (or his personal
representative) shall be entitled to exercise all or any of his Options at any time not later than
two (2) business days prior to the proposed general meeting of the Company by giving notice in
writing to the Company, accompanied by a remittance for the full amount of the aggregate Exercise
Price for the shares in respect of which the notice is given whereupon the Company shall as soon
as possible and in any event, no later than the business day immediately prior to the date of the
proposed general meeting referred to above, allot the relevant Shares to the Participant credited as
fully paid.
15.5 If in connection with the making of a general offer referred to in Rule 15.1 above or the scheme
referred to in Rule 15.2 above or the winding up referred to in Rule 15.4 above, arrangements are
made (which are confirmed in writing by the Auditors, acting only as experts and not as arbitrators,
to be fair and reasonable) for the compensation of Participants, whether by the continuation of their
Options or the payment of cash or the grant of other options or otherwise, a Participant holding an
Option, which is not then exercisable, may not, at the discretion of the Committee, be permitted to
exercise that Option as provided for in this Rule 15.
15.6 If the events stipulated in this Rule 15 should occur, to the extent that an Option is not exercised
within the respective periods referred to herein in this Rule 15, it shall lapse and become null and
void.
16.
ADMINISTRATION OF THE ESOS
16.1 The ESOS shall be administered by the Committee in its absolute discretion with such powers and
duties as are conferred upon it by the Board.
16.2 The Committee shall have the power, from time to time, to make or vary such regulations (not
being inconsistent with the ESOS) as it may consider necessary, desirable or expedient for it to
administer and give effect to the ESOS.
16.3 Any decision of the Committee, made pursuant to any Rule of the ESOS (other than a matter to be
certified by the Auditors), shall be final and binding (including any decisions pertaining to disputes
as to the interpretation of the Rules of the ESOS or any rule, regulation or procedure thereunder or
as to any rights under the ESOS).
16.4 A Director who is a member of the Committee shall not be involved in its deliberation in respect of
Options to be granted to him.
17.
NOTICES
17.1 Any notice given by a Participant to the Company shall be sent by post or delivered to the
registered office of the Company or such other address as may be notified by the Company to the
Participant in writing.
17.2 Any notice or documents given by the Company to a Participant shall be sent to the Participant by
hand or sent to him at his home address stated in the records of the Company or the last known
address of the Participant, and if sent by post shall be deemed to have been given on the day
immediately following the date of posting.
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18.
TERMS OF EMPLOYMENT UNAFFECTED
18.1 The ESOS or any Option shall not form part of any contract of employment between the Company
or any subsidiary (as the case may be) and any Participant and the rights and obligations of any
individual under the terms of the office or employment with such company within our Group shall
not be affected by his participation in the ESOS or any right which he may have to participate in it
or any Option which he may hold and the ESOS or any Option shall afford such an individual no
additional rights to compensation or damages in consequence of the termination of such office or
employment for any reason whatsoever.
18.2 The ESOS shall not confer on any person any legal or equitable rights (other than those
constituting the Options themselves) against the Company and/or any subsidiary directly
or indirectly or give rise to any cause of action at law or in equity against the Company or any
subsidiary.
19.
TAXES
All taxes (including income tax) arising from the exercise of any Option granted to any Participant
under the ESOS shall be borne by that Participant.
20.
COSTS AND EXPENSES OF THE ESOS
20.1 Each Participant shall be responsible for all fees of CDP relating to or in connection with the issue
and allotment of any Shares pursuant to the exercise of any Option in CDP’s name, the deposit
of share certificate(s) with CDP, the Participant’s securities account with CDP or the Participant’s
securities sub-account with a Depository Agent or CPF investment account with a CPF agent bank
and all taxes referred to in Rule 19 which shall be payable by the relevant Participant.
20.2 Save for such costs and expenses expressly provided in the Rules to be payable by the
Participants, all fees, costs and expenses incurred by the Company in relation to the ESOS
including but not limited to the fees, costs and expenses relating to the allotment and issue of
Shares pursuant to the exercise of any Option shall be borne by the Company.
21.
CONDITION OF OPTION
Every Option shall be subject to the condition that no Shares shall be issued pursuant to the
exercise of an Option if such issue would be contrary to any law or enactment, or any rules or
regulations of any legislative or non-legislative governing body for the time being in force in
Singapore or any other relevant country.
22.
DISCLAIMER OF LIABILITY
Notwithstanding any provisions herein contained and subject to the Companies Act, the Board,
the Committee and the Company shall not under any circumstances be held liable for any costs,
losses, expenses and damages whatsoever and howsoever arising in respect of any matter under
or in connection with the ESOS, including but not limited to the Company’s delay in allotting and
issuing the Shares or in applying for or procuring the listing of the Shares on the SGX-ST (or any
other relevant stock exchange).
23.
DISCLOSURE IN ANNUAL REPORT
The Company shall make the following disclosure in its annual report:
(a)
The names of the members of the Committee;
(b)
The information required in the table below for the following Participants (which for the
avoidance of doubt, shall include Participants who have exercised all their Options in any
particular financial year):
(i)
participants who are Directors; and
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(ii)
participants who are Controlling Shareholders of the Company and their associates;
and
(iii)
participants other than those in (i) and (ii) above, who receive five per cent. (5.0%) or
more of the total number of options available under the scheme;
Name of
Participant
(c)
(d)
Options
granted during
financial year
under review
(including
terms)
Aggregate
Options
granted since
commencement
of the ESOS to
end of financial
year under
review
Aggregate
Options
exercised since
commencement
of the ESOS to
end of financial
year under
review
Aggregate
Options
outstanding
as at end of
financial year
under review
In respect of options granted to directors and employees of the parent company and its
subsidiaries:
(i)
the names of and number and terms of options granted to each director or employee
of the parent company and its subsidiaries who receives five per cent. (5.0%) or more
of the total number of options available to all directors and employees of the parent
company and its subsidiaries under the scheme, during the financial year under
review; and
(ii)
the aggregate number of options granted to the directors and employees of the
parent company and its subsidiaries for the financial year under review, and since the
commencement of the scheme to the end of the financial year under review.
The number and proportion of Options granted at the following discounts to average market
value of the Shares in the financial year under review:
(i)
Options granted at up to 10.0% discount; and
(ii)
Options granted at between 10.0% but not more than 20.0% discount.
Provided that if any of the above requirements is not applicable, an appropriate negative statement
must be included.
24.
ABSTENTION FROM VOTING
Shareholders who are eligible to participate in the ESOS shall abstain from voting on any
Shareholders’ resolution relating to the ESOS, including, where applicable, (i) implementation
of the ESOS; (ii) discount quantum; and (iii) participation by and Option granted to Controlling
Shareholders and their associates, and should not accept nominations as proxies or otherwise
for voting in respect of such resolution unless specific instructions have been given in the proxy
instrument on how the votes are to be cast.
25.
DISPUTES
Any disputes or differences of any nature arising hereunder shall be referred to the Committee and
its decision shall be final and binding in all respects.
26.
GOVERNING LAW
The ESOS shall be governed by, and construed in accordance with, the laws of the Republic of
Singapore. The Participants, by accepting Options in accordance with the ESOS, and the Company
submit to the exclusive jurisdiction of the courts of the Republic of Singapore.
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Schedule A
LETTER OF OFFER
Serial No:
Date:
To:
[Name]
[Designation]
[Address]
Private and Confidential
Dear Sir/Madam,
1.
We have the pleasure of informing you that, pursuant to the EuroSports Employee Share Option
Scheme (the “ESOS”), you have been nominated to participate in the ESOS by the Committee (the
“Committee”) appointed by the Board of Directors of EuroSports Global Limited (the “Company”)
to administer the ESOS. Terms as defined in the Rules of the ESOS shall have the same meaning
when used in this letter.
2.
Accordingly, in consideration of the payment of a sum of S$1.00, an offer is hereby made to grant
you an option (the “Option”), to subscribe for and be allotted
Shares at the
price of S$
per Share.
3.
The Option is personal to you and shall not be transferred, charged, pledged, assigned or
otherwise disposed of by you, in whole or in part, except with the prior approval of the Committee.
4.
The Option shall be subject to the terms of the ESOS, a copy of which is available for inspection at
the business address of the Company.
5.
If you wish to accept the offer of the Option on the terms of this letter, please sign and return the
enclosed Acceptance Form with a sum of S$1.00 not later than 5.00 p.m. on
,
failing which this offer will lapse.
Yours faithfully,
For and on behalf of
Name:
Designation:
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Schedule B
ACCEPTANCE FORM
Serial No:
Date:
To:
The Committee,
EuroSports Employee Share Option Scheme
Singapore 608927
Closing Date for Acceptance of Offer
:
Number of Shares Offered
:
Exercise Price for each Share
:
S$
Total Amount Payable
:
S$
I have read your Letter of Offer dated
and agree to be bound by the terms of the
Letter of Offer and ESOS referred to therein. Terms defined in your Letter of Offer shall have the same
meanings when used in this Acceptance Form.
I hereby accept the Option to subscribe for
Shares at S$
per Share.
I enclose cash for S$1.00 in payment for the purchase of the Option/I authorise my employer to deduct
the sum of S$1.00 from my salary in payment for the purchase of the Option.
I understand that I am not obliged to exercise the Option.
I confirm that my acceptance of the Option will not result in the contravention of any applicable law or
regulation in relation to the ownership of shares in the Company or options to subscribe for such shares.
I further acknowledge and confirm that you have not made any representation to induce me to accept
the offer in respect of the said Option and that the terms of the Letter of Offer and this Acceptance Form
constitute the entire agreement between us relating to the offer.
Please print in block letters
Name in full
:
Designation
:
Address
:
Nationality
:
*NRIC/Passport No.
:
Signature
:
Date
:
Note:
* Delete where inapplicable
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Schedule C
EXERCISE NOTICE
Total number of ordinary shares (the “Shares”)
offered at S$
per Share
(the “Exercise Price”) under the ESOS on
(Date of Grant)
:
Number of Shares previously allotted thereunder
:
Outstanding balance of Shares to be allotted
thereunder
:
Number of Shares now to be subscribed
:
To:
The Committee,
Singapore 608927
1.
Pursuant to your Letter of Offer dated
exercise the Option to subscribe for
Limited (the “Company”) at S$
2.
I enclose a *cheque/cashiers order/banker’s draft/postal order no.
S$
by way of subscription for the total number of the said Shares.
3.
I agree to subscribe for the said Shares subject to the terms of the Letter of Offer, the EuroSports
Employee Share Option Scheme and the Memorandum and Articles of Association of the
Company.
4.
I declare that I am subscribing for the said Shares for myself and not as a nominee for any other
person.
5.
I request the Company to allot and issue the Shares in the name of The Central Depository (Pte)
Limited (“CDP”) for credit of my *securities account with CDP/Sub-Account with the Depository
Agent/CPF investment account with my Agent Bank specified below and I hereby agree to bear
such fees or other charges as may be imposed by CDP in respect thereof.
and my acceptance thereof, I hereby
Shares in the capital of EuroSports Global
per Share.
Please print in block letters
Name in full
:
Designation
:
Address
:
Nationality
:
* NRIC/Passport No
:
* Direct Securities Account No.
:
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for
OR
* Sub Account No.
:
Name of Depository Agent
:
OR
* CPF Investment Account No.
:
Name of Agent Bank
:
Signature
:
Date
:
Note:
* Delete where inapplicable
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APPENDIX H
TERMS, CONDITIONS AND PROCEDURES FOR APPLICATION AND ACCEPTANCE
You are invited to apply and subscribe for and/or purchase the Invitation Shares at the Invitation Price
for each Invitation Share subject to the following terms and conditions set out below and in the relevant
printed application forms to be used for the purpose of this Invitation and which forms part of the Offer
Document (the “Application Forms” or, as the case may be the Electronic Applications (as defined
herein):
1.
YOUR APPLICATION MUST BE MADE IN LOTS OF 1,000 INVITATION SHARES OR INTEGRAL
MULTIPLES THEREOF. YOUR APPLICATION FOR ANY OTHER NUMBER OF INVITATION
SHARES WILL BE REJECTED.
2.
Your application for Offer Shares may be made by way of printed WHITE Offer Shares Application
Forms or by way of Electronic Applications through ATMs belonging to the Participating Banks
(“ATM Electronic Applications”) or through Internet Banking (“IB”) websites of the relevant
Participating Banks (“Internet Electronic Applications”, which together with ATM Electronic
Applications, shall be referred to as “Electronic Applications”).
Your application for the Placement Shares may only be made by way of printed BLUE Placement
Shares Application Forms.
YOU MAY NOT USE CPF FUNDS TO APPLY FOR THE INVITATION SHARES.
3.
You (not being an approved nominee company) are allowed to submit only one (1)
application in your own name for the Offer Shares or the Placement Shares. If you submit
an application for Offer Shares by way of an Offer Shares Application Form, you MAY NOT
submit another application for Offer Shares by way of an Electronic Application and vice
versa. Such separate applications shall be deemed to be multiple applications and may be
rejected at the discretion of our Company, the Vendors, the Sponsor and the Underwriter
and Placement Agent.
If you submit an application for Offer Shares by way of an ATM Electronic Application,
you MAY NOT submit another application for Offer Shares by way of an Internet Electronic
Application and vice versa. Such separate applications shall be deemed to be multiple
applications and may be rejected at the discretion of our Company, the Vendors, the
Sponsor and the Underwriter and Placement Agent.
If you, being other than an approved nominee company, have submitted an application
for Offer Shares in your own name, you should not submit any other application for Offer
Shares, whether by way of an Offer Shares Application Form or by way of an Electronic
Application, for any other person. Such separate applications shall be deemed to be
multiple applications and may be rejected at the discretion of our Company, the Vendors, the
If you have made an application for Placement Shares, you should not make any application
for Offer Shares either by way of an Offer Shares Application Form or by way of an
Electronic Application and vice versa. Such separate applications shall be deemed to be
Conversely, if you have made an application for Offer Shares either by way of an
Electronic Application or by way of an Offer Shares Application Form, you may not make
any application for Placement Shares. Such separate applications shall be deemed to be
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Joint and multiple applications for the Invitation Shares may be rejected at the discretion
of our Company, the Vendors, the Sponsor and the Underwriter and Placement Agent.
If you submit or procure submissions of multiple share applications for Offer Shares,
Placement Shares or both Offer Shares and Placement Shares, you may be deemed to
have committed an offence under the Penal Code, Chapter 224 of Singapore and the SFA,
and your applications may be referred to the relevant authorities for investigation. Multiple
applications or those appearing to be or suspected of being multiple applications may be
rejected at the discretion of our Company, the Vendors, the Sponsor and the Underwriter
and Placement Agent.
4.
We will not accept applications from any person under the age of 18 years, undischarged
bankrupts, sole-proprietorships, partnerships, or non-corporate bodies, joint Securities Account
holders of CDP and from applicants whose addresses (as furnished in their Application Forms or,
in the case of Electronic Applications, contained in the records of the relevant Participating Banks,
as the case may be) bear post office box numbers. No person acting or purporting to act on behalf
of a deceased person is allowed to apply under the Securities Account with CDP in the name of
the deceased at the time of the application.
5.
We will not recognise the existence of a trust. Any application by a trustee or trustees must
therefore be made in his/her/their own name(s) and without qualification or, where the application
is made by way of an Application Form by a nominee, in the name(s) of an approved nominee
company or companies after complying with paragraph 6 below.
6.
WE WILL NOT ACCEPT APPLICATIONS FROM NOMINEES EXCEPT THOSE MADE BY
APPROVED NOMINEE COMPANIES ONLY. Approved nominee companies are defined as
banks, merchant banks, finance companies, insurance companies, licensed securities dealers in
Singapore and nominee companies controlled by them. Applications made by persons acting as
nominees other than approved nominee companies shall be rejected.
7.
IF YOU ARE NOT AN APPROVED NOMINEE COMPANY, YOU MUST MAINTAIN A SECURITIES
ACCOUNT WITH CDP IN YOUR OWN NAME AT THE TIME OF YOUR APPLICATION. If you do
not have an existing Securities Account with CDP in your own name at the time of your application,
your application will be rejected (if you apply by way of an Application Form), or you will not be
able to complete your Electronic Application (if you apply by way of an Electronic Application).
If you have an existing Securities Account with CDP but fail to provide your Securities Account
number or provide an incorrect Securities Account number in Section B of the Application Form or
in your Electronic Application, as the case may be, your application is liable to be rejected. Subject
to paragraph 8 below, your application shall be rejected if your particulars such as name, NRIC/
passport number, nationality and permanent residence status provided in your Application Form
or in the case of an Electronic Application, contained in records of the relevant Participating Bank
at the time of your Electronic Application, as the case may be, differ from those particulars in your
Securities Account as maintained with CDP. If you possess more than one (1) individual direct
Securities Account with CDP, your application shall be rejected.
8.
If your address as stated in the Application Form or, in the case of an Electronic
Application, contained in the records of the relevant Participating Bank, as the case may
be, is different from the address registered with CDP, you must inform CDP of your updated
address promptly, failing which the notification letter on successful allotment and/or
allocation and other correspondence from CDP will be sent to your address last registered
with CDP.
9.
Our Company and the Vendors, in consultation with the Sponsor and the Underwriter and
Placement Agent, reserve the right to reject any application which does not conform strictly
to the instructions set out in the Application Form and in this Offer Document or which
does not comply with the instructions for Electronic Applications or with the terms and
conditions of this Offer Document or, in the case of an application by way of an Application
Form, which is illegible, incomplete, incorrectly completed or which is accompanied by an
improperly drawn remittance or improper form of remittance.
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Our Company and the Vendors further reserve the right to treat as valid any applications not
completed or submitted or effected in all respects in accordance with the instructions set
out in the Application Forms or the instructions for Electronic Applications or the terms and
conditions of this Offer Document, and also to present for payment or other processes all
remittances at any time after receipt and to have full access to all information relating to, or
deriving from, such remittances or the processing thereof.
Without prejudice to the rights of our Company, the Vendors, the Sponsor and the
Underwriter and Placement Agent, as agents of our Company and the Vendors, have been
authorised to accept, for and on behalf of our Company and the Vendors such other forms
of application as the Sponsor and Underwriter and Placement Agent deem appropriate.
10.
Our Company and the Vendors reserve the right to reject or to accept, in whole or in part, or to
scale down or to ballot any application, without assigning any reason therefor, and no enquiry
and/or correspondence on the decision with regards hereto will be entertained. This right applies to
applications made by way of Application Forms and by way of Electronic Applications. In deciding
the basis of allotment and/or allocation, which shall be at our discretion, due consideration will be
given to the desirability of allotting and/or allocating the Invitation Shares to a reasonable number
of applicants with a view to establishing an adequate market for the Shares.
11.
Share certificates will be registered in the name of CDP and will be forwarded only to CDP. It is
expected that CDP will send to you, at your own risk, within 15 Market Days after the close of the
Application List, and subject to the submission of valid applications and payment for the Invitation
Shares, a statement of account stating that your Securities Account has been credited with the
number of Invitation Shares allotted and/or allocated to you, if your application is successful. This
will be the only acknowledgement of application monies received and is not an acknowledgement
by our Company and the Vendors. You irrevocably authorise CDP to complete and sign on your
behalf, as transferee or renouncee, any instrument of transfer and/or other documents required for
the issue and/or transfer of the Invitation Shares allotted and/or allocated to you. This authorisation
applies to applications made by way of Application Forms and by way of Electronic Applications.
11A. In the event that our Company lodges a supplementary or replacement offer document (“Relevant
Document”) pursuant to the SFA or any applicable legislation in force from time to time prior to the
close of the Invitation, and the Invitation Shares have not been issued and/or transferred, we (as
well as on behalf of the Vendors) will (as required by law and subject to the SFA), at our sole and
absolute discretion, either:
(a)
within two (2) days (excluding any Saturday, Sunday or public holiday) from the date of the
lodgement of the Relevant Document, give you notice in writing of how to obtain, or arrange
to receive, a copy of the same and provide you with an option to withdraw your application
and take all reasonable steps to make available within a reasonable period the Relevant
Document to you if you have indicated that you wish to obtain, or have arranged to receive, a
copy of the Relevant Document;
(b)
within seven (7) days of the lodgement of the Relevant Document, give you a copy of the
Relevant Document and provide you with an option to withdraw your application; or
(c)
deem your application as withdrawn and cancelled and shall, within seven (7) days from
the date of lodgement of the Relevant Document, return all monies paid in respect of any
application, without interest or any share of revenue or benefit arising therefrom.
Where you have notified us within 14 days from the date of lodgement of the Relevant Document
of your wish to exercise your option under Paragraph 11A(a) and (b) above to withdraw your
application, we (as well as on behalf of the Vendors) shall pay to you all monies paid by you on
account of your application for the Invitation Shares without interest or any share of revenue or
other benefit arising therefrom and at your own risk, within seven (7) days from the receipt of such
notification.
H-3
In the event that at the time of the lodgement of the Relevant Document, the Invitation Shares have
already been issued and/or transferred but trading has not commenced, we (as well as on behalf of
the Vendors) will (as required by law and subject to the SFA), at our sole and absolute discretion,
either:
(d)
within two (2) days (excluding Saturday, Sunday or public holiday) from the date of the
lodgement of the Relevant Document, give you notice in writing of how to obtain, or arrange
to receive, a copy of the same and provide you with an option to return to our Company
the Invitation Shares which you do not wish to retain title in and take all reasonable steps
to make available within a reasonable period the Relevant Document to you if you have
indicated that you wish to obtain, or have arranged to receive, a copy of the Relevant
Document;
(e)
within seven (7) days from the lodgement of the Relevant Document, give you a copy of the
Relevant Document and provide you with an option to return the Invitation Shares which you
do not wish to retain title in; or
(f)
(A)
in the case of the New Shares, deem the issue as void and refund your payments
for the New Shares (without interest or any share of revenue or other benefits arising
therefrom and at your own risk) within seven (7) days from the date of lodgment of the
supplementary or replacement offer document; and
(B)
in the case of Vendor Shares, deem the sale of the Vendor Shares as void, and in the
case where documents to evidence title to the Vendor Shares (the “title documents”)
have been issued to you, within seven (7) days from the date of lodgment of
the supplementary or replacement offer document, inform you to return the title
documents within 14 Market Days from the date of lodgment of the supplementary
or replacement offer document, and within seven (7) days from receipt of the
title documents or the date of lodgment of the supplementary or replacement offer
document, whichever is the later, refund your payments for the Vendor Shares (without
interest or any share of revenue or other benefits arising therefrom and at your own
risk),
and you shall not have any claim against our Company, the Vendors, the Sponsor and the
Any applicant who wishes to exercise his option under paragraph 11A(d) and (e) above to return
the Invitation Shares issued and/or transferred to him shall, within 14 days from the date of
lodgement of the Relevant Document, notify us of this and return all documents, if any, purporting
to be evidence of title of those Invitation Shares, whereupon we (as well as on behalf of the
Vendors) shall, subject to compliance with applicable laws and the Articles of Association of our
Company, within seven (7) days from the receipt of such notification and documents, pay to him
all monies paid by him for the Invitation Shares without interest or any share of revenue or other
benefit arising therefrom and at his own risk, and the Invitation Shares issued and/or transferred to
him shall be void.
Additional terms and instructions applicable upon the lodgement of the Relevant Document,
including instructions on how you can exercise the option to withdraw your application or return the
Invitation Shares allotted and/or allocated to you, may be found in such Relevant Document.
12.
In the event of an under-subscription for Offer Shares as at the close of the Application List, that
number of Offer Shares under-subscribed shall be made available to satisfy applications for the
Placement Shares to the extent that there is an over-subscription for Placement Shares as at the
close of the Application List.
In the event of an under-subscription for Placement Shares as at the close of the Application List,
that number of Placement Shares under-subscribed shall be made available to satisfy applications
for Offer Shares to the extent that there is an over-subscription for Offer Shares as at the close of
the Application List.
H-4
In the event of an over-subscription for Offer Shares as at the close of the Application List and
Placement Shares are fully subscribed or over-subscribed as at the close of the Application
List, the successful applications for Offer Shares will be determined by ballot or otherwise
as determined by our Directors and the Vendors after consultation with the Sponsor and the
Underwriter and Placement Agent and approved by the SGX-ST.
In all the above instances, the basis of allotment and/or allocation of the Invitation Shares as may
be decided by our Directors and the Vendors in ensuring a reasonable spread of shareholders of
our Company, shall be made public as soon as practicable via an announcement through the SGXST and through an advertisement in a generally circulating daily press.
You hereby consent to the disclosure of your name, NRIC/passport number, address, nationality,
permanent residency status, CDP Securities Account number, CPF Investment Account number (if
applicable) and shares application amount from your account with the relevant Participating Bank
to the Share Registrar and Share Transfer Agent, SCCS, SGX-ST, CDP, our Company, the Vendors,
the Sponsor and the Underwriter and Placement Agent.
13.
You irrevocably authorise CDP to disclose the outcome of your application, including the number of
Invitation Shares allotted and/or allocated to you pursuant to your application, to us, the Vendors,
the Sponsor, the Underwriter and Placement Agent and any other parties so authorised by the
foregoing persons. CDP shall not be liable for any delays, failures, or inaccuracies in the recording,
storage or transmission of delivery of data relating to Electronic Applications.
14.
Any reference to “you” or the “applicant” in this section shall include an individual, a corporation, an
approved nominee and trustee applying for the Offer Shares by way of an Offer Shares Application
Form or by way of an Electronic Application and a person applying for the Placement Shares
through the Placement Agent by way of a Placement Shares Application Form.
15.
By completing and delivering an Application Form or by making and completing an Electronic
Application by (in the case of an ATM Electronic Application) pressing the “Enter” or “OK” or
“Confirm” or “Yes” or any other relevant key on the ATM (as the case may be) or by (in the case of
an Internet Electronic Application) clicking “Submit” or “Continue” or “Yes” or “Confirm” or any other
relevant button on the IB website screen of the relevant Participating Banks (as the case may be)
in accordance with the provisions of this Offer Document, you:
(a)
irrevocably offer, agree and undertake to subscribe for and/or purchase the number of
Invitation Shares specified in your application (or such smaller number for which the
application is accepted) at the Invitation Price for each Invitation Share and agree that
you will accept such Invitation Shares as may be allotted and/or allocated to you, in each
case on the terms of, and subject to the conditions set out in this Offer Document and the
Memorandum and Articles of Association of our Company;
(b)
agree that, in the event of any inconsistency between the terms and conditions for
application set out in this Offer Document and those set out in the IB websites or ATMs of
the relevant Participating Banks, the terms and conditions set out in this Offer Document
shall prevail;
(c)
agree that the aggregate Invitation Price for the Invitation Shares applied for is due and
payable to our Company and the Vendors upon application;
(d)
warrant the truth and accuracy of the information contained, and representations and
declarations made, in your application, and acknowledge and agree that such information,
representations and declarations will be relied on by our Company and the Vendors in
determining whether to accept your application and/or whether to allot and/or allocate any
Invitation Shares to you; and
(e)
agree and warrant that, if the laws of any jurisdictions outside Singapore are applicable
to your application, you have complied with all such laws and none of our Company, the
Vendors, the Sponsor and the Underwriter and Placement Agent will infringe any such laws
as a result of the acceptance of your application.
H-5
16.
17.
Our acceptance of applications will be conditional upon, inter alia, our Company and the Vendors
being satisfied that:
(a)
permission has been granted by the SGX-ST to deal in and for quotation for all our existing
Shares (including the Vendor Shares) and the New Shares on Catalist;
(b)
the Management and Sponsorship Agreement and the Underwriting and Placement
Agreement referred to in the section entitled “General and Statutory Information
-Management, Underwriting and Placement Arrangements” of this Offer Document have
become unconditional and have not been terminated or cancelled prior to such date as our
Company may determine; and
(c)
the SGX-ST, acting as agent on behalf of the Authority, has not served a stop order (“Stop
Order”) which directs that no or no further shares to which this Offer Document relates be
allotted and/or allocated or issued and/or transferred.
In the event that a Stop Order in respect of the Invitation Shares is served by the SGX-ST, acting
as agent on behalf of the Authority or other competent authority, and
(a)
in the case where the Invitation Shares have not been issued and/or transferred, all
applications shall be deemed to have been withdrawn and cancelled and our Company (as
well as on behalf of the Vendors) shall refund all monies paid on account of your application
of the Invitation Shares (without interest or any share of revenue or other benefit arising
therefrom and at your own risk) to you within 14 days of the date of the Stop Order; or
(b)
in the case where the Invitation Shares have already been issued and/or transferred but
trading has not commenced, the issue and/or transfer of the Invitation Shares shall be
deemed to be void and our Company (as well as on behalf of the Vendors) shall, within 14
days from the date of the Stop Order, refund all monies paid on account of your application
for the Invitation Shares (without interest or any share of revenue or other benefit arising
therefrom and at your own risk).
This shall not apply where only an interim Stop Order has been served.
18.
In the event that an interim Stop Order in respect of the Invitation Shares is served by the SGX-ST,
acting as agent on behalf of the Authority, or other competent authority, no Invitation Shares shall
be issued and/or transferred to you during the time when the interim Stop Order is in force.
19.
The SGX-ST, acting as agent on behalf of the Authority or other competent authority, is not
able to serve a Stop Order in respect of the Invitation Shares if the Invitation Shares have been
issued and/or transferred, listed on a securities exchange and trading in the Invitation Shares
has commenced. In the event of any changes in the closure of the Application List or the time
period during which the Invitation is open, we will publicly announce the same through a SGXNET
announcement to be posted on the internet at the SGX-ST website, http://www.sgx.com and
through a paid advertisement in a local English newspaper.
20.
Our Company and the Vendors will not hold any application in reserve.
21.
Our Company and the Vendors will not allot and/or allocate Shares on the basis of this Offer
Document later than six (6) months after the date of registration of this Offer Document by the
SGX-ST, acting as agent on behalf of the Authority.
22.
Additional terms and conditions for applications by way of Application Forms are set out on pages
H-7 to H-10 of this Offer Document.
23.
Additional terms and conditions for applications by way of Electronic Applications are set out on
pages H-10 to H-15 of this Offer Document.
H-6
ADDITIONAL TERMS AND CONDITIONS FOR APPLICATIONS USING APPLICATION FORMS
Applications by way of an Application Form shall be made on, and subject to, the terms and conditions
of this Offer Document including but not limited to the terms and conditions appearing below as well
as those set out under the section entitled “Terms, Conditions and Procedures for Application and
Acceptance” of this Offer Document, as well as the Memorandum and Articles of Association of our
Company.
1.
Your application for the Offer Shares must be made using the WHITE Application Forms and
WHITE envelopes “A” and “B” for Offer Shares, the BLUE Application Forms for Placement Shares,
accompanying and forming part of this Offer Document.
We draw your attention to the detailed instructions contained in the respective Application
Forms and this Offer Document for the completion of the Application Forms which must be
carefully followed. Our Company and the Vendors, in consultation with the Sponsor and
the Underwriter and Placement Agent reserve the right to reject applications which do
not conform strictly to the instructions set out in the Application Forms and this Offer
Document or to the terms and conditions of this Offer Document or which are illegible,
incomplete, incorrectly completed or which are accompanied by improperly drawn
remittances or improper form of remittance.
2.
Your Application Forms must be completed in English. Please type or write clearly in ink using
BLOCK LETTERS.
3.
All spaces in the Application Forms except those under the heading “FOR OFFICIAL USE ONLY”
must be completed and the words “NOT APPLICABLE” or “N.A.” should be written in any space
that is not applicable.
4.
Individuals, corporations, approved nominee companies and trustees must give their names in full.
If you are an individual, you must make your application using your full names as it appears in
your identity cards (if you have such an identification document) or in your passports and, in the
case of a corporation, in your full name as registered with a competent authority. If you are a nonindividual, you must complete the Application Form under the hand of an official who must state
the name and capacity in which he signs the Application Form. If you are a corporation completing
the Application Form, you are required to affix your Common Seal (if any) in accordance with your
Memorandum and Articles of Association or equivalent constitutive documents of the corporation. If
you are a corporate applicant and your application is successful, a copy of your Memorandum and
Articles of Association or equivalent constitutive documents must be lodged with our Company’s
Share Registrar and Share Transfer Office. Our Company and the Vendors reserve the right to
require you to produce documentary proof of identification for verification purposes.
5.
(a)
You must complete Sections A and B and sign page 1 of the Application Form.
(b)
You are required to delete either paragraph 7(a) or 7(b) on page 1 of the Application Form.
Where paragraph 7(a) is deleted, you must also complete Section C of the Application Form
with particulars of the beneficial owner(s).
(c)
If you fail to make the required declaration in paragraph 7(a) or 7(b), as the case may be, on
page 1 of the Application Form, your application is liable to be rejected.
6.
You (whether you are an individual or corporate applicant, whether incorporated or unincorporated
and wherever incorporated or constituted) will be required to declare whether you are a citizen
or permanent resident of Singapore or a corporation in which citizens or permanent residents of
Singapore or any body corporate constituted under any statute of Singapore having an interest in
the aggregate of more than 50.0% of the issued share capital of or interests in such corporations.
H-7
If you are an approved nominee company, you are required to declare whether the beneficial owner
of the Invitation Shares is a citizen or permanent resident of Singapore or a corporation, whether
incorporated or unincorporated and wherever incorporated or constituted, in which citizens or
permanent residents of Singapore or any body corporate whether incorporated or unincorporated
and wherever incorporated or constituted under any statute of Singapore have an interest in the
aggregate of more than 50.0% of the issued share capital of or interests in such corporation.
7.
Your application must be accompanied by a remittance in Singapore currency for the full
amount payable, in respect of the number of Invitation Shares applied for, in the form of a
BANKER’S DRAFT or CASHIER’S ORDER drawn on a bank in Singapore, made out in favour of
“EUROSPORTS SHARE ISSUE ACCOUNT” crossed “A/C PAYEE ONLY”, and with your name
and address written clearly on the reverse side. Applications not accompanied by any payment
or accompanied by any other form of payment will not be accepted. We will reject remittances
bearing “NOT TRANSFERABLE” or “NON TRANSFERABLE” crossings. No acknowledgement or
receipt will be issued by our Company, the Vendors or the Sponsor for applications and application
monies received.
8.
Monies paid in respect of unsuccessful applications are expected to be returned (without interest
or any share of revenue or other benefit arising therefrom) to you by ordinary post within 24 hours
of balloting of applications at your own risk. Where your application is rejected or accepted in part
only, the full amount or the balance of the application monies, as the case may be, will be refunded
(without interest or any share of revenue or other benefit arising therefrom) to you by ordinary post
at your own risk within 14 days after the close of the Application List, provided that the remittance
accompanying such application which has been presented for payment or other processes has
been honoured and application monies have been received in the designated share issue account.
In the event that the Invitation does not proceed for any reason, the full amount of the application
monies received will be refunded (without interest or any share of revenue or other benefit arising
therefrom) to you by ordinary post at your own risk within five (5) Market Days of the termination
of the Invitation. In the event that the Invitation is cancelled by us (as well as on behalf of the
Vendors) following the issuance of a Stop Order by the SGX-ST, acting as agent on behalf of the
Authority, the application monies received will be refunded (without interest or any share of revenue
or other benefit arising therefrom) to you by ordinary post at your own risk within 14 days from the
date of the Stop Order.
9.
Capitalised terms used in the Application Forms and defined in this Offer Document shall bear the
meanings assigned to them in this Offer Document.
10.
You irrevocably agree and acknowledge that your application is subject to risks of fires, acts of God
and other events beyond the control of the Participating Banks, our Company, our Directors, the
Vendors, the Sponsor, the Underwriter and Placement Agent and/or any other party involved in the
Invitation, and if, in any such event, our Company, the Vendors, the Sponsor, the Underwriter and
Placement Agent and/or the relevant Participating Bank do not receive your Application Form, you
shall have no claim whatsoever against our Company, the Vendors, the Sponsor, the Underwriter
and Placement Agent, the relevant Participating Bank and/or any other party involved in the
Invitation for the Invitation Shares applied for or for any compensation, loss or damage.
11.
By completing and delivering the Application Form, you agree that:
(a)
in consideration of our Company and the Vendors having distributed the Application Form to
you and agreeing to close the Application List at 12.00 noon on 15 January 2014 or such
other time or date as our Company and the Vendors may, in consultation with the Sponsor
and the Underwriter and Placement Agent decide and by completing and delivering the
Application Form:
(i)
your application is irrevocable; and
(ii)
your remittance will be honoured on first presentation and that any monies returnable
may be held pending clearance of your payment without interest or any share of
revenue or other benefit arising therefrom;
H-8
(b)
neither our Company, the Vendors, the Sponsor, the Underwriter and Placement Agent
nor any other party involved in the Invitation shall be liable for any delays, failures or
inaccuracies in the recording, storage or in the transmission or delivery of data relating
to your application to us or CDP due to breakdowns or failure of transmission, delivery or
communication facilities or any risks referred to in paragraph 10 above or to any cause
beyond their respective controls;
(c)
all applications, acceptances and contracts resulting therefrom under the Invitation shall
be governed by and construed in accordance with the laws of Singapore and that you
irrevocably submit to the non-exclusive jurisdiction of the Singapore courts;
(d)
in respect of the Invitation Shares for which your application has been received and not
rejected, acceptance of your application shall be constituted by written notification and not
otherwise, notwithstanding any remittance being presented for payment by or on behalf of
our Company;
(e)
you will not be entitled to exercise any remedy of rescission for misrepresentation at any
time after acceptance of your application;
(f)
in making your application, reliance is placed solely on the information contained in this Offer
Document and that none of our Company, the Vendors, the Sponsor, the Underwriter and
Placement Agent or any other person involved in the Invitation shall have any liability for any
information not so contained;
(g)
you consent to the disclosure of your name, NRIC/passport number, address, nationality,
permanent residency status, CDP Securities Account number, and share application amount
to our Share Registrar, CDP, SCCS, SGX-ST, our Company, the Vendors, the Sponsor, the
Underwriter and Placement Agent or other authorised operators; and
(h)
you irrevocably agree and undertake to subscribe for and/or purchase the number of
Invitation Shares applied for as stated in the Application Form or any smaller number of such
Invitation Shares that may be allotted and/or allocated to you in respect of your application.
In the event that our Company and the Vendors decide to allot and/or allocate a smaller
number of Invitation Shares or not to allot and/or allocate any Invitation Shares to you, you
agree to accept such decision as final.
Applications for Offer Shares
1.
Your application for Offer Shares MUST be made using the WHITE Offer Shares Application Forms
and WHITE official envelopes “A” and “B”. ONLY ONE (1) APPLICATION should be enclosed in
each envelope.
2.
You must:
(a)
enclose the WHITE Offer Shares Application Form, duly completed and signed, together with
the correct remittance in accordance with the terms and conditions of this Offer Document in
the WHITE envelope “A” provided;
(b)
in the appropriate spaces on WHITE envelope “A”:
(c)
(i)
write your name and address;
(ii)
state the number of Offer Shares applied for;
(iii)
tick the relevant box to indicate the form of payment; and
(iv)
affix adequate Singapore postage;
Seal the WHITE envelope “A”;
H-9
3.
(d)
write, in the special box provided on the larger WHITE envelope “B” addressed to Tricor
Barbinder Share Registration Services, 80 Robinson Road, #02-00, Singapore 068898,
the number of Offer Shares for which the application is made; and
(e)
insert WHITE envelope “A” into WHITE envelope “B”, seal WHITE envelope “B”, affix
adequate Singapore postage on WHITE official envelope “B” (if despatching by ordinary
post) and thereafter DESPATCH BY ORDINARY POST OR DELIVER BY HAND at your
own risk to Tricor Barbinder Share Registration Services, 80 Robinson Road, #0200, Singapore 068898, to arrive by 12.00 noon on 15 January 2014 or such other
time as our Company and the Vendors may, in consultation with the Sponsor and
the Underwriter and Placement Agent decide. Local Urgent Mail or Registered Post
must NOT be used. No acknowledgement of receipt will be issued for any application or
remittance received.
Applications that are illegible, incomplete or incorrectly completed or accompanied by improperly
drawn remittances or improper form of remittance or which are not honoured upon their first
presentation are liable to be rejected.
Applications for Placement Shares
1.
Your application for Placement Shares MUST be made using the BLUE Placement Shares
Application Forms. ONLY ONE (1) APPLICATION should be enclosed in each envelope.
2.
The completed and signed BLUE Placement Shares Application Form and the correct remittance
in full in respect of the number of Placement Shares applied for (in accordance with the terms
and conditions of this Offer Document) with your name and address written clearly on the reverse
side, must be enclosed and sealed in an envelope to be provided by you. You must affix adequate
Singapore postage on the envelope (if despatching by ordinary post) and thereafter the sealed
envelope must be DESPATCHED BY ORDINARY POST OR DELIVERED BY HAND at your own
risk to Tricor Barbinder Share Registration Services, 80 Robinson Road, #02-00, Singapore
068898, to arrive by 12.00 noon on 15 January 2014 or such other time as our Company
and the Vendors may, in consultation with the Sponsor and the Underwriter and Placement
Agent, decide. Local Urgent Mail or Registered Post must NOT be used. No acknowledgement
of receipt will be issued for any application or remittance received.
3.
Applications that are illegible, incomplete or incorrectly completed or accompanied by improperly
drawn remittances or improper form of remittance or which are not honoured upon their first
presentation are liable to be rejected.
ADDITIONAL TERMS AND CONDITIONS FOR ELECTRONIC APPLICATIONS
The procedures for Electronic Applications are set out on the ATM screens (in the case of ATM Electronic
Applications) and the IB website screens (in the case of Internet Electronic Applications) of the relevant
Participating Banks. For illustration purposes, the procedures for Electronic Applications through ATMs
and the IB website of the UOB Group are set out respectively in the “Steps for an ATM Electronic
Application through ATMs of the UOB Group” and the “Steps for an Internet Electronic Application
through the IB website of the UOB Group” (collectively, the “Steps”) appearing on pages H-15 to H-18 of
The Steps set out the actions that you must take at an ATM or the IB website of the UOB Group to
complete an Electronic Application. Please read carefully the terms of this Offer Document, the Steps
and the terms and conditions for Electronic Applications set out below before making an Electronic
Application. Any reference to “you” or the “applicant” in this section “Additional Terms and Conditions for
Electronic Applications” and the Steps shall refer to you making an application for Offer Shares through
an ATM or the IB website of a relevant Participating Bank.
You must have an existing bank account with and be an ATM cardholder of one (1) of the Participating
Banks before you can make an Electronic Application at the ATMs. An ATM card issued by one (1)
Participating Bank cannot be used to apply for Offer Shares at an ATM belonging to other Participating
Banks. For an Internet Electronic Application, you must have an existing bank account with an IB User
H-10
Identification (“User ID”) and a Personal Identification Number/Password (“PIN”) given by the relevant
Participating Bank. The Steps set out the actions that you must take at ATMs or the IB website of the
UOB Group to complete an Electronic Application. The actions that you must take at ATMs or the IB
websites of other Participating Banks are set out on the ATM screens or the IB website screens of the
relevant Participating Banks. Upon the completion of your ATM Electronic Application transaction, you
will receive an ATM transaction slip (“Transaction Record”), confirming the details of your Electronic
Application. Upon completion of your Internet Electronic Application, there will be an on-screen
confirmation (“Confirmation Screen”) of the application which can be printed for your record. The
Transaction Record or your printed record of the Confirmation Screen is for your retention and should not
be submitted with any Application Form.
You must ensure that you enter your own Securities Account number when using the ATM card
issued to you in your own name. If you fail to use your own ATM card or if you do not key in
your own Securities Account number, your application will be rejected. If you operate a joint bank
account with any of the Participating Banks, you must ensure that you enter your own Securities
Account number when using the ATM card issued to you in your own name. Using your own
Securities Account number with an ATM card which is not issued to you in your own name will
render your ATM Electronic Application liable to be rejected.
You must ensure, when making an Internet Electronic Application, that your mailing address for the
account selected for the application is in Singapore and the application is being made in Singapore
and you will be asked to declare accordingly. Otherwise your application is liable to be rejected. In
connection with this, you will be asked to declare that you are in Singapore at the time when you make
the application.
You shall make an Electronic Application in accordance with and subject to the terms and conditions of
this Offer Document including but not limited to the terms and conditions appearing below and those set
out under the section entitled “Terms, Conditions and Procedures for Application and Acceptance” of this
Offer Document as well as the Memorandum and Articles of Association of our Company.
1.
In connection with your Electronic Application for Offer Shares, you are required to confirm
statements to the following effect in the course of activating your Electronic Application:
(a)
that you have received a copy of this Offer Document (in the case of ATM Electronic
Applications only) and have read, understood and agreed to all the terms and
conditions of application for Offer Shares and this Offer Document prior to effecting
the Electronic Application and agree to be bound by the same;
(b)
that you consent to the disclosure of your name, NRIC/passport number, address,
nationality, permanent residency status, share application amount, CPF Investment
Account number (if applicable) and CDP Securities Account number and application
details (the “Relevant Particulars”) with the relevant Participating Bank to the CDP,
CPF, SCCS, SGX-ST, Share Registrar, our Company, the Vendors, the Sponsor,
the Underwriter and Placement Agent or other authorised operators (the “Relevant
Parties”); and
(c)
that this is your only application for Offer Shares and it is made in your own name and
at your own risk.
Your application will not be successfully completed and cannot be recorded as a completed
transaction in the ATM or on the IB website unless you press the “Enter” or “Confirm” or “Yes” or
“OK” or any other relevant key in the ATM or click “Confirm” or “OK” or “Submit” or “Continue” or
“Yes” or any other relevant button on the IB website screen. By doing so, you shall be treated as
signifying your confirmation of each of the above three (3) statements. In respect of statement
1(b) above, such confirmation, shall signify and shall be treated as your written permission,
given in accordance with the relevant laws of Singapore including Section 47(2) of the Banking
Act (Chapter 19) of Singapore to the disclosure by the relevant Participating Bank of the Relevant
Particulars to the Relevant Parties.
H-11
2.
BY MAKING AN ELECTRONIC APPLICATION, YOU CONFIRM THAT YOU ARE NOT
APPLYING FOR OFFER SHARES AS A NOMINEE OF ANY OTHER PERSON AND THAT ANY
ELECTRONIC APPLICATION THAT YOU MAKE IS THE ONLY APPLICATION MADE BY YOU AS
THE BENEFICIAL OWNER.
YOU SHOULD MAKE ONLY ONE (1) ELECTRONIC APPLICATION FOR OFFER SHARES AND
SHOULD NOT MAKE ANY OTHER APPLICATION FOR OFFER SHARES OR PLACEMENT
SHARES, WHETHER AT THE ATMS OR THE IB WEBSITE (IF ANY) OF ANY PARTICIPATING
BANK OR ON THE APPLICATION FORMS. IF YOU HAVE MADE AN APPLICATION FOR
OFFER SHARES OR PLACEMENT SHARES ON AN APPLICATION FORM, YOU SHALL NOT
MAKE AN ELECTRONIC APPLICATION FOR OFFER SHARES AND VICE VERSA.
3.
You must have sufficient funds in your bank account with your Participating Bank at the time
you make your Electronic Application at the ATM or the IB website of the relevant participating
bank, failing which your Electronic Application will not be completed or accepted. Any Electronic
Application which does not conform strictly to the instructions set out in this Offer
Document or on the screens of the ATM or the IB website of the relevant Participating Bank
through which your Electronic Application is being made shall be rejected.
You may make an ATM Electronic Application at the ATM of any Participating Bank or an Internet
Electronic Application at the IB website of the relevant Participating Bank for the Offer Shares
using only cash by authorising such Participating Bank to deduct the full amount payable from your
account with such Participating Bank.
4.
You irrevocably agree and undertake to subscribe for and/or to accept the number of Offer
Shares applied for as stated on the Transaction Record or the Confirmation Screen or any lesser
number of Offer Shares that may be allotted and/or allocated to you in respect of your Electronic
Application.
In the event that our Company and the Vendors decide to allot and/or allocate any lesser number
of such Offer Shares or not to allot and/or allocate any Offer Shares to you, you agree to accept
such decision as final. If your Electronic Application is successful, your confirmation (by your
action of pressing the “Enter” or “Confirm” or “Yes” or “OK” or any other relevant key on the ATM or
clicking “Confirm” or “OK” or “Submit” or “Continue” or “Yes” or any other relevant button on the IB
website screen) of the number of Offer Shares applied for shall signify and shall be treated as your
acceptance of the number of Offer Shares that may be allotted and/or allocated to you and your
agreement to be bound by the Memorandum and Articles of Association of our Company. You also
irrevocably authorise CDP to complete and sign on your behalf as transferee or renouncee any
instrument of transfer and/or other documents required for the transfer of the Offer Shares that may
be allotted and/or allocated to you.
5.
Our Company and the Vendors will not keep any applications in reserve. Where your
Electronic Application is unsuccessful, the full amount of the application monies will be refunded in
Singapore currency (without interest or any share of revenue or other benefit arising therefrom) to
you by being automatically credited to your account with your Participating Bank within 24 hours of
balloting of the applications provided that the remittance in respect of such application which has
been presented for payment or other processes have been honoured and the application monies
have been received in the designated share issue account. Trading on a “WHEN ISSUED” basis,
if applicable, is expected to commence after such refund has been made.
Where your Electronic Application is rejected or accepted in part only, the full amount or the
balance of the application monies, as the case may be, will be refunded in Singapore currency
(without interest or any share of revenue or other benefit arising therefrom) to you by being
automatically credited to your account with your Participating Bank within 14 days after the close
of the Application List provided that the remittance in respect of such application which has been
presented for payment or other processes have been honoured and the application monies have
been received in the designated share issue account.
H-12
Responsibility for timely refund of application monies arising from unsuccessful or partially
successful Electronic Applications lies solely with the respective Participating Banks.
Therefore, you are strongly advised to consult your Participating Bank as to the status of
your Electronic Application and/or the refund of any monies to you from unsuccessful or
partially successful Electronic Application, to determine the exact number of Offer Shares
allotted and/or allocated to you before trading the Offer Shares on Catalist. You may also
call CDP Phone at 6535 7511 to check the provisional results of your application by using
your T-pin (issued by CDP upon your application for the service) and keying in the stock
code (that will be made available together with the results of the allotment and/or allocation
via an announcement through the SGX-ST and by advertisement in a generally circulating
daily press). To sign up for the service, you may contact CDP customer service officers.
Neither the SGX-ST, the CDP, the SCCS, the Participating Banks, our Company, the Vendors,
the Sponsor nor the Underwriter and Placement Agent assume any responsibility for any
loss that may be incurred as a result of you having to cover any net sell positions or from
buy-in procedures activated by the SGX-ST.
6.
If your Electronic Application is unsuccessful, no notification will be sent by the relevant
Participating Banks.
If you make Electronic Applications through the ATMs or the IB websites of the following
Participating Banks, you may check the provisional results of your Electronic Applications as
follows:
Bank
Telephone
ATM/Internet
Operating
Hours
Service
Expected From
UOB Group
1800 222 2121
ATM (Other Transactions
– “IPO Results Enquiry”)(1)
24 hours a day
Evening of the
balloting day
24 hours a day
Evening of the
balloting day
24 hours a day
Evening of the
balloting day
http://www.uobgroup.com(1)
DBS Bank
1800 339 6666
(for POSB account
holders)
Internet Banking
http://www.dbs.com(2)
1800 111 1111
(for DBS account
holders)
OCBC
1800 363 3333
ATM / Internet Banking /
Phone Banking
http://www.ocbc.com
Notes:
7.
(1)
If you have made your Electronic Application through the ATMs or IB website of the UOB Group, you may check the
results of your application through UOB Personal Internet Banking, ATMs of the UOB Group or UOB Phone Banking
Services.
(2)
If you have made your Electronic Application through the ATMs or IB website of DBS Bank, you may check the results
of your application through the channel listed above.
You irrevocably agree and acknowledge that your Electronic Application is subject to risks of
electrical, electronic, technical and computer-related faults and breakdowns, fires, acts of God
and other events beyond the control of the Participating Banks, our Company, the Vendors, the
Sponsor, the Underwriter and Placement Agent and if, in any such event, our Company, the
Vendors, the Sponsor, the Underwriter and Placement Agent and/or the relevant Participating Bank
do not receive your Electronic Application, or data relating to your Electronic Application or the tape
or any other devices containing such data is lost, corrupted or not otherwise accessible, whether
wholly or partially for whatever reason, you shall be deemed not to have made an Electronic
Application and you shall have no claim whatsoever against our Company, our Directors, the
Vendors, the Sponsor, the Underwriter and Placement Agent and/or the relevant Participating Bank
for Offer Shares applied for or for any compensation, loss or damage.
H-13
8.
Electronic Applications shall close at 12.00 noon on 15 January 2014 or such other time
as our Company and the Vendors may, in consultation with the Sponsor, the Underwriter
and Placement Agent decide. Subject to the paragraph above, an Internet Electronic Application
is deemed to be received when it enters the designated information system of the relevant
Participating Bank, that is, when there is an on-screen confirmation of the application.
9.
You are deemed to have irrevocably requested and authorised our Company to:
(a)
register the Offer Shares allotted and/or allocated to you in the name of CDP for deposit into
your Securities Account;
(b)
send the relevant Share certificate(s) to CDP;
(c)
return or refund (without interest or any share of revenue or other benefit arising therefrom)
the application monies, should your Electronic Application be unsuccessful, by automatically
crediting your bank account with your Participating Bank with the relevant amount within 24
hours of the balloting of applications; and
(d)
return or refund (without interest or any share of revenue or other benefit arising therefrom)
the balance of the application monies should your Electronic Application be accepted in
part only, by automatically crediting your bank account with your Participating Bank with the
relevant amount within 14 days after the close of the Application List.
10.
We do not recognise the existence of a trust. Any Electronic Application by a trustee must be made
in your own name and without qualification. Our Company will reject any application by any person
acting as nominee except those made by approved nominee companies only.
11.
All your particulars in the records of your relevant Participating Bank at the time you make your
Electronic Application shall be deemed to be true and correct and your relevant Participating Bank
and the Relevant Parties shall be entitled to rely on the accuracy thereof. If there has been any
change in your particulars after the time of the making of your Electronic Application, you shall
promptly notify your relevant Participating Bank.
12.
You should ensure that your personal particulars as recorded by both CDP and the relevant
Participating Bank are correct and identical, otherwise, your Electronic Application is
liable to be rejected. You should promptly inform CDP of any change in address, failing which
the notification letter on successful allotment and/or allocation will be sent to your address last
registered with CDP.
13.
By making and completing an Electronic Application, you are deemed to have agreed that:
(a)
(b)
in consideration of our Company making available the Electronic Application facility, through
the Participating Banks as the agents of our Company, at the ATMs and IB websites (if any):
(i)
your Electronic Application is irrevocable; and
(ii)
your Electronic Application, our acceptance and the contract resulting therefrom
under the Invitation shall be governed by and construed in accordance with the
laws of Singapore and you irrevocably submit to the non-exclusive jurisdiction of the
Singapore courts;
neither our Company, the Vendors, the Sponsor, the Underwriter and the Placement Agent,
the Participating Banks nor CDP shall be liable for any delays, failures or inaccuracies in
the recording, storage or in the transmission or delivery of data relating to your Electronic
Application to our Company or CDP due to breakdowns or failure of transmission, delivery
or communication facilities or any risks referred to in paragraph 7 above or to any cause
beyond our respective controls;
H-14
(c)
in respect of Offer Shares for which your Electronic Application has been successfully
completed and not rejected, acceptance of your Electronic Application shall be constituted by
written notification by or on behalf of our Company and not otherwise, notwithstanding any
payment received by or on behalf of our Company ;
(d)
you will not be entitled to exercise any remedy of rescission or misrepresentation at any time
after acceptance of your application; and
(e)
in making your application, reliance is placed solely on the information contained in this Offer
Document and that none of our Company, the Vendors, the Sponsor, the Underwriter and
Placement Agent or any other person involved in the Invitation shall have any liability for any
information not so contained.
Steps for Electronic Applications through the ATMs and the IB website of the UOB Group
The instructions for Electronic Applications will appear on the ATM screens and the IB website screens
of the respective Participating Banks. For illustrative purposes, the steps for making an Electronic
Application through ATMs or through the IB website of the UOB Group are shown below. Instructions
for Electronic Applications appearing on the ATM screens and the IB website screens of the relevant
Participating Banks (other than the UOB Group) may differ from that represented below.
Steps for an ATM Electronic Application through ATMs of the UOB Group
Owing to space constraints on the UOB Group’s ATM screens, the following terms will appear in
abbreviated form:
“&”
:
and
“CDP”
:
THE CENTRAL DEPOSITORY (PTE) LIMITED
“CPF”
:
THE CENTRAL PROVIDENT FUND
“NRIC” or “IC”
:
NATIONAL REGISTRATION IDENTITY CARD
“PIN”
:
PERSONAL IDENTIFICATION NUMBER
“PR”
:
PERMANENT RESIDENT
“SCCS”
:
SECURITIES CLEARING & COMPUTER SERVICES (PTE) LIMITED
Step 1 :
Insert your personal Unicard, Uniplus card or UOB VISA/MASTER card and key in your
personal identification number.
2:
Select “CASHCARD/OTHER TRANSACTIONS”.
3:
Select “SECURITIES APPLICATION”.
4:
Select the share counter which you wish to apply for.
5:
Read and understand the following statements which will appear on the screen:
–
THIS OFFER OF SECURITIES (OR UNITS OF SECURITIES) WILL BE MADE IN,
OR ACCOMPANIED BY, A COPY OF THE PROSPECTUS/OFFER INFORMATION
STATEMENT/DOCUMENT OR SUPPLEMENTARY DOCUMENTS. ANYONE
WISHING TO ACQUIRE THESE SECURITIES (OR UNITS OF SECURITIES)
WILL NEED TO MAKE AN APPLICATION IN THE MANNER SET OUT IN
THE PROSPECTUS/OFFER INFORMATION STATEMENT/DOCUMENT OR
SUPPLEMENTARY DOCUMENTS.
(Press “ENTER” to continue)
H-15
–
PLEASE CALL 1800 222 2121 IF YOU WOULD LIKE TO FIND OUT WHERE
YOU CAN OBTAIN A COPY OF THE PROSPECTUS/OFFER INFORMATION
STATEMENT/DOCUMENT OR SUPPLEMENTARY DOCUMENT.
–
WHERE APPLICABLE, A COPY OF THE PROSPECTUS/OFFER INFORMATION
STATEMENT/DOCUMENT OR SUPPLEMENTARY DOCUMENT HAS BEEN
LODGED WITH AND/OR REGISTERED BY THE MONETARY AUTHORITY OF
SINGAPORE WHO ASSUMES NO RESPONSIBILITY FOR THE CONTENTS
OF THE PROSPECTUS/OFFER INFORMATION STATEMENT/DOCUMENT OR
SUPPLEMENTARY DOCUMENT.
6:
Read and understand the following terms which will appear on the screen:
–
YOU HAVE READ, UNDERSTOOD AND AGREED TO ALL TERMS OF
THE PROSPECTUS/OFFER INFORMATION STATEMENT/DOCUMENT/
SUPPLEMENTARY DOCUMENT AND THIS ELECTRONIC APPLICATION.
(Press “ENTER” key to continue)
–
YOU CONSENT TO DISCLOSE YOUR NAME, IC/PASSPORT, NATIONALITY,
ADDRESS, APPLICATION AMOUNT, CPF INVESTMENT ACCOUNT NUMBER AND
CDP ACCOUNT NUMBER FROM YOUR ACCOUNTS TO CDP, CPF, SCCS, SHARE
REGISTRARS, SGX–ST AND ISSUER/VENDOR(S).
–
THIS IS YOUR ONLY FIXED PRICE APPLICATION AND IS IN YOUR NAME AND
ATYOUR RISK.
7:
Screen will display:
NRIC/Passport No. XXXXXXXXXXXX
IF YOUR NRIC/PASSPORT NUMBER IS INCORRECT, PLEASE CANCEL THE
TRANSACTION AND NOTIFY THE BRANCH PERSONALLY.
(Press “CANCEL” or “CONFIRM”)
8:
Select mode of payment i.e. “CASH ONLY”. You will be prompted to select Cash Account
type to debit (i.e., “CURRENT ACCOUNT/I-ACCOUNT”, “CAMPUS ACCOUNT” OR
“SAVINGS ACCOUNT/TX ACCOUNT”). Should you have a few accounts linked to your ATM
card, a list of linked account numbers will be displayed for you to select.
9:
After you have selected the account, your CDP Securities Account number will be displayed
for you to confirm or change (This screen with your CDP Securities Account number will
be shown if your CDP Securities Account number is already stored in the ATM system of
the UOB Group). If this is the first time you are using the UOB Group’s ATM to apply for
securities, your CDP Securities Account number will not be stored in the ATM system of the
UOB Group, and the following screen will be displayed for your input of your CDP Securities
Account number.
10 :
Read and understand the following terms which will appear on the screen:
1.
YOU ARE REQUIRED TO ENTER YOUR CDP ACCOUNT NUMBER FOR YOUR
FIRST IPO/SECURITIES APPLICATION. THIS ACCOUNT NUMBER WOULD BE
DISPLAYED FOR FURTHER APPLICATIONS.
2.
DO NOT APPLY FOR JOINT ACCOUNT HOLDER OR THIRD PARTIES.
H-16
3.
PLEASE ENTER YOUR OWN CDP ACCOUNT NUMBER (12 DIGITS) & PRESS
ENTER.
If you wish to terminate the transaction, please press “CANCEL”.
11 :
Key in your CDP Securities Account number (12 digits) and select “CONFIRM-YES”.
12 :
Select your nationality status.
13 :
Key in the number of shares you wish to apply for and press the “ENTER” key.
14 :
Check the details of your Electronic Application on the screen and press “ENTER” key to
confirm your Electronic Application.
15 :
Select “NO” if you do not wish to make any further transactions and remove the Transaction
Record. You should keep the Transaction Record for your own reference only.
Steps for an Internet Electronic Application through the IB website of the UOB Group
Owing to space constraints on the UOB Group’s IB website screens, the following terms will appear in
abbreviated form:
“CDP”
:
“CPF”
:
“NRIC” or “I/C”
:
National Registration Identity Card
“PR”
:
Permanent Resident
“SGD”
:
Singapore Dollars
“SCCS”
:
Securities Clearing and Computer Services (Pte) Limited
“SGX”
:
Step 1 :
Connect to the UOB Group at http://www.uobgroup.com.
2:
Locate the “UOB Online Services Login” icon on the top right hand side of the Home Page.
3:
Point on “UOB Online Services Login” icon and at the drop list select “UOB Personal Internet
Banking”
4:
Enter your Username and Password and click “Submit”.
5:
Click on “Proceed” under the Full Access Mode.
6:
You will receive a SMS One-Time Password. Enter the SMS One-Time Password and click
“Proceed”.
7:
Click on “EPS/Securities/CPFIS”, followed by “Securities”, followed by “Securities
Application”.
8:
Read the IMPORTANT notice and complete the declarations found on the bottom of the
page by answering Yes/No to the questions.
9:
Click “Continue”.
10 :
Select your country of residence (you must be residing in Singapore to apply), and click
“Continue”.
H-17
11 :
Select the “Securities Counter” from the drop list (If there are concurrent IPOs) and click
“Submit”.
12 :
Check the “Securities Counter”, select the mode of payment and account number to debit
and click on “Submit”.
13 :
Read the important instructions and click on “Continue” to confirm that:
14 :
1.
You have read, understood and agreed to all the terms of this application and the
Prospectus/Document or Supplementary Document.
2.
You consent to disclose your name, I/C or passport number, address, nationality,
CDP Securities Account number, CPF Investment Account number (if applicable),
and application details to the Securities registrars, SGX, SCCS, COP, CPF Board and
issuer/vendor(s).
3.
This application is made in your own name, for your own account and at your own risk.
4.
For FIXED/MAX price Securities application, this is your application. For TENDER
price Securities application, this is your only application at the selected tender price.
5.
For FOREIGN CURRENCY securities, subject to the terms of the issue, please note
the following: The application monies will be debited from your bank account in SGD,
based on the Bank’s exchange profit or loss, or application monies may be debited
and refunds credited in SGD at the same exchange rate.
6.
For 1ST-COME-1ST-SERVE securities, the number of securities applied for may be
reduced, subject to the availability at the point of application.
Check your personal details, details of the share counter you wish to apply for and account
to debit.
Select
(a)
Nationality;
Enter
(b)
your CDP Securities Account number; and
(c)
the number of shares applied for.
Click “Submit”
15 :
Check your personal particulars (name, NRIC/Passport number and nationality), details of
the share counter you wish to apply for, CDP Securities Account number, account to debit
and number of securities applied for.
16 :
Click “Confirm”, “Edit” or “Home”.
17 :
Print the Confirmation Screen (optional) for your own reference and retention only.
H-18
30 Teban Gardens Crescent Singapore 608927

eurosports global limited

Transcription

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