Description
This is an initial public offering of ordinary shares (the Shares) in the capital of iFAST Corporation Ltd.
Joint Issue Managers, Bookrunners and Underwriters
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.
This is an inital public ofering of ordinary shares (the “Shares”) in the capital
of iFAST Corporaton Ltd. (the “Company”). We are making an ofering of
32,800,000 Shares (“New Shares”) which consists of (i) an internatonal
placement of 30,000,000 Shares (the “Placement”) to investors, including
insttutonal and other investors in Singapore and outside the United States
in compliance with Regulaton S (“Regulaton S”) under the United States
Securites Act of 1933, as amended (the “US Securites Act”), and (ii) a public
ofer of 2,800,000 Shares in Singapore (the “Public Ofer”, and together with
the Placement, the “Ofering”). The ofering price for each Share (the “Ofering
Price”) is S$0.95.
Separate from the Ofering, each of FIL Investment Management (Hong Kong)
Limited and OWW Investments III Limited (collectvely, the “Cornerstone
Investors”) has entered into a cornerstone subscripton agreement with
the Company (collectvely, the “Cornerstone Subscripton Agreements”) to
subscribe for an aggregate of 19,000,000 new Shares at the Ofering Price (the
“Cornerstone Shares”), conditonal upon, inter alia, the Management and
Underwritng Agreement (as defned herein) and the Placement Agreement
(as defned herein) having been entered into and not having been terminated
pursuant to their terms on or prior to the Listng Date (as defned herein) (the
“Cornerstone Tranche”).
We have made an applicaton to the Singapore Exchange Securites Trading
Limited (the “SGX-ST”) for permission to deal in, and for quotaton of, all the
Shares already issued, the New Shares which are the subject of the Ofering, the
Cornerstone Shares, the new shares which may be issued upon the exercise of
(i) the existng optons granted pursuant to the 2003 ESOS and the 2013 ESOS as
well as (ii) the optons to be granted pursuant to the iFAST ESOS (the new Shares
which may be issued upon the exercise of (i) and (ii) collectvely referred to as
the “Opton Shares”), the new Shares which may be issued upon the release of
the share awards to be granted pursuant to the iFAST Performance Share Plan
(the “Award Shares”) and the new Shares (the “Additonal Shares”) which may
be issued pursuant to the exercise of an over-allotment opton described below
(the “Over-allotment Opton”). Such permission will be granted when we have
been admited to the Ofcial List of the SGX-ST. The dealing in and quotaton of
our Shares will be in Singapore dollars.
Acceptance of applicatons will be conditonal upon, inter alia, permission
being granted by the SGX-ST to deal in, and for quotaton of, all of the existng
issued Shares, the New Shares, the Cornerstone Shares, the Opton Shares,
the Award Shares and the Additonal Shares. If permission is not granted or
the Ofering is not completed for any reason, monies paid in respect of any
applicaton accepted will be returned to you at your own risk, without interest
or any share of revenue or other beneft arising therefrom, and you will not
have any right or claim whatsoever against us and any of the Joint Issue
Managers, Bookrunners and Underwriters (as defned herein).
We have received a leter of eligibility-to-list from the SGX-ST for the listng
and quotaton of our existng issued Shares, the New Shares, the Cornerstone
Shares, the Opton Shares, the Award Shares and the Additonal Shares. The
SGX-ST assumes no responsibility for the correctness of any of the statements
made, opinions expressed or reports contained in this Prospectus. Admission
to the Ofcial List of the SGX-ST is not to be taken as an indicaton of the merits
of the Ofering, our Company, our subsidiaries, our existng issued Shares, the
New Shares, the Cornerstone Shares, the Opton Shares, the Award Shares or
the Additonal Shares.
Our Shares are being ofered and sold outside the United States in an ofshore
transacton as such term is defned in Regulaton S under the US Securites Act.
Our Shares have not been and will not be registered under the US Securites Act
and may not be re-ofered, re-sold, pledged, or otherwise transferred except in
an ofshore transacton in compliance with Regulaton S or pursuant to another
exempton from the registraton requirements of the US Securites Act.
In connecton with the Ofering, we have granted DBS Bank Ltd., as the
stabilising manager (the “Stabilising Manager”), on behalf of the Joint
Issue Managers, Bookrunners and Underwriters, the Over-allotment Opton
exercisable by the Stabilising Manager, in whole or in part, on its own behalf
and on behalf of the Joint Issue Managers, Bookrunners and Underwriters, on
one or more occasions, during the period commencing from the Listng Date
untl the earlier of (i) the date falling 30 days from the Listng Date; or (ii) the
date when the Stabilising Manager (or persons actve on its behalf) has bought
on the SGX-ST an aggregate of 3,280,000 Shares, representng not more than
10% of the Ofering, to undertake stabilising actons. Pursuant to the Over-
allotment Opton, the Stabilising Manager may subscribe and/or procure
subscribers for up to an aggregate of 3,280,000 Additonal Shares (which in
aggregate is not more than 10% of the Ofering) at the Ofering Price solely to
cover the over-allotment of Shares, if any. The total number of issued Shares
immediately afer the completon of the Ofering (and prior to the exercise of
the Over-allotment Opton) will be 256,225,334 Shares. If the Over-allotment
Opton is exercised in full, the total number of issued Shares immediately afer
the completon of the Ofering will be 259,505,334 Shares.
A copy of this Prospectus has been lodged with and registered by the Monetary
Authority of Singapore (the “Authority”) on 21 November 2014 and 4 December
2014, respectvely. The Authority assumes no responsibility for the contents of
this Prospectus. Registraton of this Prospectus by the Authority does not imply
that the Securites and Futures Act (Chapter 289) of Singapore, or any other
legal or regulatory requirements, have been complied with. The Authority has
not, in any way, considered the merits of our existng issued Shares, the New
Shares, the Cornerstone Shares, the Opton Shares, the Award Shares or the
Additonal Shares, as the case may be, being ofered for investment. We have
not lodged or registered this Prospectus in any other jurisdicton.
No Shares shall be alloted and/or allocated on the basis of this Prospectus
later than six (6) months afer the date of registraton of this Prospectus by
the Authority.
Investng in our Shares involves risks which are described in the secton
enttled “Risk Factors” of this Prospectus.
We are an Internet-based investment products distribution and administration platform with assets
under administration (AUA) of approximately S$5.13 billion as at end September 2014.
Headquartered in Singapore, we are also present in Hong Kong, Malaysia and China.
Incorporated in year 2000 in Singapore, we first launched Fundsupermart.com,
our Business-to-Consumer (B2C) website targeted at DIY investors.
Fundsupermart.com has approximately S$1.32 billion in AUA as at end September 2014.
In 2002, we launched our Business-to-Business (B2B) platform to cater to the specialised needs of
financial advisory (FA) companies and financial institutions.
Over 150 FA companies and financial institutions, and more than 5,000 FA representatives,
use our B2B platform.
We distribute over 1,800 Investment Products (including more than 1,600 funds) and provide a
comprehensive range of services, including:
the execution of investment transactions
IT services and software tools
research and investment trainings
backroom functions
Corporate Profile
iFAST Financial (B2B Business) Fundsupermart.com (B2C Business)
iFAST Corporation Ltd.
(Company Registration Number: 200007899C)
10 Collyer Quay,
#26-01 Ocean Financial Centre,
Singapore 049315
Phone: +65 6535 8033
Email Address: [email protected]
www.ifastcorp.com
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PROSPECTUS DATED 4 DECEMBER 2014
(Registered by the Monetary Authority of Singapore on 4 December 2014)
Ofering in respect of 32,800,000 New Shares (subject to the Over-allotment Opton
as defned herein) comprising:
(i)
2,800,000 Public Ofer Shares at S$0.95 for each Public Ofer Share by way of the Public
Ofer; and
(ii) 30,000,000 Placement Shares at S$0.95 for each Placement Share by way of the Placement,
payable in full on applicaton.
iFAST Corporation Ltd.
(Company Registraton Number: 200007899C)
(Incorporated in the Republic of Singapore on 11 September 2000)
Joint Issue Managers, Bookrunners and Underwriters
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.
This is an inital public ofering of ordinary shares (the “Shares”) in the capital
of iFAST Corporaton Ltd. (the “Company”). We are making an ofering of
32,800,000 Shares (“New Shares”) which consists of (i) an internatonal
placement of 30,000,000 Shares (the “Placement”) to investors, including
insttutonal and other investors in Singapore and outside the United States
in compliance with Regulaton S (“Regulaton S”) under the United States
Securites Act of 1933, as amended (the “US Securites Act”), and (ii) a public
ofer of 2,800,000 Shares in Singapore (the “Public Ofer”, and together with
the Placement, the “Ofering”). The ofering price for each Share (the “Ofering
Price”) is S$0.95.
Separate from the Ofering, each of FIL Investment Management (Hong Kong)
Limited and OWW Investments III Limited (collectvely, the “Cornerstone
Investors”) has entered into a cornerstone subscripton agreement with
the Company (collectvely, the “Cornerstone Subscripton Agreements”) to
subscribe for an aggregate of 19,000,000 new Shares at the Ofering Price (the
“Cornerstone Shares”), conditonal upon, inter alia, the Management and
Underwritng Agreement (as defned herein) and the Placement Agreement
(as defned herein) having been entered into and not having been terminated
pursuant to their terms on or prior to the Listng Date (as defned herein) (the
“Cornerstone Tranche”).
We have made an applicaton to the Singapore Exchange Securites Trading
Limited (the “SGX-ST”) for permission to deal in, and for quotaton of, all the
Shares already issued, the New Shares which are the subject of the Ofering, the
Cornerstone Shares, the new shares which may be issued upon the exercise of
(i) the existng optons granted pursuant to the 2003 ESOS and the 2013 ESOS as
well as (ii) the optons to be granted pursuant to the iFAST ESOS (the new Shares
which may be issued upon the exercise of (i) and (ii) collectvely referred to as
the “Opton Shares”), the new Shares which may be issued upon the release of
the share awards to be granted pursuant to the iFAST Performance Share Plan
(the “Award Shares”) and the new Shares (the “Additonal Shares”) which may
be issued pursuant to the exercise of an over-allotment opton described below
(the “Over-allotment Opton”). Such permission will be granted when we have
been admited to the Ofcial List of the SGX-ST. The dealing in and quotaton of
our Shares will be in Singapore dollars.
Acceptance of applicatons will be conditonal upon, inter alia, permission
being granted by the SGX-ST to deal in, and for quotaton of, all of the existng
issued Shares, the New Shares, the Cornerstone Shares, the Opton Shares,
the Award Shares and the Additonal Shares. If permission is not granted or
the Ofering is not completed for any reason, monies paid in respect of any
applicaton accepted will be returned to you at your own risk, without interest
or any share of revenue or other beneft arising therefrom, and you will not
have any right or claim whatsoever against us and any of the Joint Issue
Managers, Bookrunners and Underwriters (as defned herein).
We have received a leter of eligibility-to-list from the SGX-ST for the listng
and quotaton of our existng issued Shares, the New Shares, the Cornerstone
Shares, the Opton Shares, the Award Shares and the Additonal Shares. The
SGX-ST assumes no responsibility for the correctness of any of the statements
made, opinions expressed or reports contained in this Prospectus. Admission
to the Ofcial List of the SGX-ST is not to be taken as an indicaton of the merits
of the Ofering, our Company, our subsidiaries, our existng issued Shares, the
New Shares, the Cornerstone Shares, the Opton Shares, the Award Shares or
the Additonal Shares.
Our Shares are being ofered and sold outside the United States in an ofshore
transacton as such term is defned in Regulaton S under the US Securites Act.
Our Shares have not been and will not be registered under the US Securites Act
and may not be re-ofered, re-sold, pledged, or otherwise transferred except in
an ofshore transacton in compliance with Regulaton S or pursuant to another
exempton from the registraton requirements of the US Securites Act.
In connecton with the Ofering, we have granted DBS Bank Ltd., as the
stabilising manager (the “Stabilising Manager”), on behalf of the Joint
Issue Managers, Bookrunners and Underwriters, the Over-allotment Opton
exercisable by the Stabilising Manager, in whole or in part, on its own behalf
and on behalf of the Joint Issue Managers, Bookrunners and Underwriters, on
one or more occasions, during the period commencing from the Listng Date
untl the earlier of (i) the date falling 30 days from the Listng Date; or (ii) the
date when the Stabilising Manager (or persons actve on its behalf) has bought
on the SGX-ST an aggregate of 3,280,000 Shares, representng not more than
10% of the Ofering, to undertake stabilising actons. Pursuant to the Over-
allotment Opton, the Stabilising Manager may subscribe and/or procure
subscribers for up to an aggregate of 3,280,000 Additonal Shares (which in
aggregate is not more than 10% of the Ofering) at the Ofering Price solely to
cover the over-allotment of Shares, if any. The total number of issued Shares
immediately afer the completon of the Ofering (and prior to the exercise of
the Over-allotment Opton) will be 256,225,334 Shares. If the Over-allotment
Opton is exercised in full, the total number of issued Shares immediately afer
the completon of the Ofering will be 259,505,334 Shares.
A copy of this Prospectus has been lodged with and registered by the Monetary
Authority of Singapore (the “Authority”) on 21 November 2014 and 4 December
2014, respectvely. The Authority assumes no responsibility for the contents of
this Prospectus. Registraton of this Prospectus by the Authority does not imply
that the Securites and Futures Act (Chapter 289) of Singapore, or any other
legal or regulatory requirements, have been complied with. The Authority has
not, in any way, considered the merits of our existng issued Shares, the New
Shares, the Cornerstone Shares, the Opton Shares, the Award Shares or the
Additonal Shares, as the case may be, being ofered for investment. We have
not lodged or registered this Prospectus in any other jurisdicton.
No Shares shall be alloted and/or allocated on the basis of this Prospectus
later than six (6) months afer the date of registraton of this Prospectus by
the Authority.
Investng in our Shares involves risks which are described in the secton
enttled “Risk Factors” of this Prospectus.
We are an Internet-based investment products distribution and administration platform with assets
under administration (AUA) of approximately S$5.13 billion as at end September 2014.
Headquartered in Singapore, we are also present in Hong Kong, Malaysia and China.
Incorporated in year 2000 in Singapore, we first launched Fundsupermart.com,
our Business-to-Consumer (B2C) website targeted at DIY investors.
Fundsupermart.com has approximately S$1.32 billion in AUA as at end September 2014.
In 2002, we launched our Business-to-Business (B2B) platform to cater to the specialised needs of
financial advisory (FA) companies and financial institutions.
Over 150 FA companies and financial institutions, and more than 5,000 FA representatives,
use our B2B platform.
We distribute over 1,800 Investment Products (including more than 1,600 funds) and provide a
comprehensive range of services, including:
the execution of investment transactions
IT services and software tools
research and investment trainings
backroom functions
Corporate Profile
iFAST Financial (B2B Business) Fundsupermart.com (B2C Business)
iFAST Corporation Ltd.
(Company Registration Number: 200007899C)
10 Collyer Quay,
#26-01 Ocean Financial Centre,
Singapore 049315
Phone: +65 6535 8033
Email Address: [email protected]
www.ifastcorp.com
i
F
A
S
T
C
o
r
p
o
r
a
t
i
o
n
L
t
d
.
PROSPECTUS DATED 4 DECEMBER 2014
(Registered by the Monetary Authority of Singapore on 4 December 2014)
Ofering in respect of 32,800,000 New Shares (subject to the Over-allotment Opton
as defned herein) comprising:
(i)
2,800,000 Public Ofer Shares at S$0.95 for each Public Ofer Share by way of the Public
Ofer; and
(ii) 30,000,000 Placement Shares at S$0.95 for each Placement Share by way of the Placement,
payable in full on applicaton.
iFAST Corporation Ltd.
(Company Registraton Number: 200007899C)
(Incorporated in the Republic of Singapore on 11 September 2000)
Competitive Strengths
November 2008:
iFAST Corporation —2nd position at
the Enterprise 50 Awards 2008 (jointly
organised by KPMG and
The Business Times)
November 2013:
iFAST HK —“Outstanding Achiever” in
the “Investment Platform - Independent”
category (Benchmark Wealth
Management Awards 2013)
Fundsupermart.com (HK) —“Best-
in-Class” award, “Online Usability
- Independent” category (Benchmark
Wealth Management Awards 2013)
August 2009:
iFAST HK —“Fund Platform Award”,
at the Best Practice Financial
Services Award 2009 (organised by
Benchmark Magazine and Best Practice
Management Magazine)
Fundsupermart.com (HK) —“Online
Usability” award (The Best Practice
Financial Services Award 2009)
December 2010:
iFAST HK —“Best-in-Class” award in the
“Advisers Choice of the Year” category
(Benchmark Wealth Management
Awards 2010)
Fundsupermart.com (HK) —“Outstanding
Achiever” award in the “Online Capabilities
Award” category (Benchmark Wealth
Management Awards 2010)
December 2011:
iFAST HK —“Best-in-Class” award
in the “Platform Provider of the Year
- Professional” category (Benchmark
Wealth Management Awards 2011)
Fundsupermart.com (HK) —“Best-in-
Class” award in the “Best in Online
Usability” category (Benchmark Wealth
Management Awards 2011)
January 2014:
Fundsupermart.com —Silver award,
in the “Most Informative Use of Mobile”
category (Mob-Ex Awards)
2010 2008 2009
2014 2013 2011
Business Model Overview
Key Investment Highlights
Business Model Scalability
iFAST B2B
Platforms
Distribution Network
and Sales Force
of over 150 FA
companies and
financial institutions,
as well as over 5,000
FA representatives
Fundsupermart.com
(B2C)
Leverages on the
Internet to reach out
to DIY investors
AUA of
Fundsupermart.
com stands at
approximately
S$1.32 billion
Proprietary IT
System
Proprietary platform
enables scaling of
our AUA without
corresponding
increase in operating
costs
Grow our Net Revenue,
Increase our Profit Margins and ROE
Scalability of Our Business Model
Scalable Business Model
Leverages on more than 150 FA companies and financial institutions,
as well as over 5,000 FA representatives
Internet-based model reaches out to over 190,000 Business-to-
Business adviser-assisted and Business-to-Customer accounts
Revenue Growth driven by Recurring Revenue which is based
on Assets under Administration (“AUA”)
The average contribution of recurring net revenue, which comprise
recurring fees calculated based on AUA, was approximately 81.6%
of net revenue for the period FY2011-9M2014
Continued Growth of Investment Platforms in Asia ex-Japan
Growth of investment platforms to be driven by demand for financial
services and greater adoption of platform by banks and financial
institutions
Proprietary IT System
Our proprietary platform has minimised our reliance on third party
developers, reduced our operating costs and we have the flexibility
to deliver reliable and innovative services to our customers
Why invest in
A Leading and Established Funds and
Investments Distribution Platform
Scalable Business Model
Revenue Growth driven by Recurring Revenue
which is based on Assets under Administration
(“AUA”)
Continued Growth of Investment Platforms in
Asia ex-Japan
A Leading and Established Funds and Investments Distribution Platform
Award-winning B2B and B2C platform in Singapore, Hong Kong and Malaysia, and establishment of China operations in 2014
Approximately S$5.13 billion in AUA (as at end September 2014), 10-year Compound Annual Growth Rate (CAGR) of approximately 26.8%
Over 1,800 investment products, including more than 1,600 funds
Financial Highlights and Dividend Policy
Financial Highlights
1
FY2011 FY2012 FY2013 9M2013 9M2014
Net revenue (S$’million) 25.20 26.29 31.58 23.51 27.33
Net revenue (YoY change) N.A.
2
+4.4% +20.1% N.A.
2
+16.2%
Profit attributable to owners of the
Company from continuing operations
(S$’million)
2.77 3.74 8.47 5.59 7.61
PBT margin (based on net revenue) 9.4% 15.0% 27.9% 25.3% 29.1%
EPS (cents) 1.38 1.86 4.20 2.77 3.75
Dividend per share (cents) 0.44 0.54 1.98
3
1.33 4.70
Notes:
1. Based on the results of the iFAST Group from continuing operations.
2. N.A. represents information not applicable for the period FY2011-9M2014.
3. Excludes the interim dividend by way of a distribution in specie during FY2013.
Dividend Policy
We currently do not have a fixed dividend policy
However, our Directors intend to recommend and distribute dividends of 60% of our net profit after tax (excluding exceptional items) for the fourth
quarter of FY2014, and dividends of 60% of our net profit after tax (excluding exceptional items) for FY2015
Banks
Financial Advisory
companies (FAs)
Financial Institutions
Companies
Fundsupermart.com
Adviser-assisted Investors
Pensions for employees
B2B customers select investment products distributed on iFAST platform
on behalf of adviser-assisted investors
DIY investors select investment products distributed on Fundsupermart.com.
Fund Houses
Banks (Bond Dealers)
Insurance Companies
Product providers provide investment
products for distribution on iFAST platform
DIY Investors
Competitive Strengths
November 2008:
iFAST Corporation —2nd position at
the Enterprise 50 Awards 2008 (jointly
organised by KPMG and
The Business Times)
November 2013:
iFAST HK —“Outstanding Achiever” in
the “Investment Platform - Independent”
category (Benchmark Wealth
Management Awards 2013)
Fundsupermart.com (HK) —“Best-
in-Class” award, “Online Usability
- Independent” category (Benchmark
Wealth Management Awards 2013)
August 2009:
iFAST HK —“Fund Platform Award”,
at the Best Practice Financial
Services Award 2009 (organised by
Benchmark Magazine and Best Practice
Management Magazine)
Fundsupermart.com (HK) —“Online
Usability” award (The Best Practice
Financial Services Award 2009)
December 2010:
iFAST HK —“Best-in-Class” award in the
“Advisers Choice of the Year” category
(Benchmark Wealth Management
Awards 2010)
Fundsupermart.com (HK) —“Outstanding
Achiever” award in the “Online Capabilities
Award” category (Benchmark Wealth
Management Awards 2010)
December 2011:
iFAST HK —“Best-in-Class” award
in the “Platform Provider of the Year
- Professional” category (Benchmark
Wealth Management Awards 2011)
Fundsupermart.com (HK) —“Best-in-
Class” award in the “Best in Online
Usability” category (Benchmark Wealth
Management Awards 2011)
January 2014:
Fundsupermart.com —Silver award,
in the “Most Informative Use of Mobile”
category (Mob-Ex Awards)
2010 2008 2009
2014 2013 2011
Business Model Overview
Key Investment Highlights
Business Model Scalability
iFAST B2B
Platforms
Distribution Network
and Sales Force
of over 150 FA
companies and
financial institutions,
as well as over 5,000
FA representatives
Fundsupermart.com
(B2C)
Leverages on the
Internet to reach out
to DIY investors
AUA of
Fundsupermart.
com stands at
approximately
S$1.32 billion
Proprietary IT
System
Proprietary platform
enables scaling of
our AUA without
corresponding
increase in operating
costs
Grow our Net Revenue,
Increase our Profit Margins and ROE
Scalability of Our Business Model
Scalable Business Model
Leverages on more than 150 FA companies and financial institutions,
as well as over 5,000 FA representatives
Internet-based model reaches out to over 190,000 Business-to-
Business adviser-assisted and Business-to-Customer accounts
Revenue Growth driven by Recurring Revenue which is based
on Assets under Administration (“AUA”)
The average contribution of recurring net revenue, which comprise
recurring fees calculated based on AUA, was approximately 81.6%
of net revenue for the period FY2011-9M2014
Continued Growth of Investment Platforms in Asia ex-Japan
Growth of investment platforms to be driven by demand for financial
services and greater adoption of platform by banks and financial
institutions
Proprietary IT System
Our proprietary platform has minimised our reliance on third party
developers, reduced our operating costs and we have the flexibility
to deliver reliable and innovative services to our customers
Why invest in
A Leading and Established Funds and
Investments Distribution Platform
Scalable Business Model
Revenue Growth driven by Recurring Revenue
which is based on Assets under Administration
(“AUA”)
Continued Growth of Investment Platforms in
Asia ex-Japan
A Leading and Established Funds and Investments Distribution Platform
Award-winning B2B and B2C platform in Singapore, Hong Kong and Malaysia, and establishment of China operations in 2014
Approximately S$5.13 billion in AUA (as at end September 2014), 10-year Compound Annual Growth Rate (CAGR) of approximately 26.8%
Over 1,800 investment products, including more than 1,600 funds
Financial Highlights and Dividend Policy
Financial Highlights
1
FY2011 FY2012 FY2013 9M2013 9M2014
Net revenue (S$’million) 25.20 26.29 31.58 23.51 27.33
Net revenue (YoY change) N.A.
2
+4.4% +20.1% N.A.
2
+16.2%
Profit attributable to owners of the
Company from continuing operations
(S$’million)
2.77 3.74 8.47 5.59 7.61
PBT margin (based on net revenue) 9.4% 15.0% 27.9% 25.3% 29.1%
EPS (cents) 1.38 1.86 4.20 2.77 3.75
Dividend per share (cents) 0.44 0.54 1.98
3
1.33 4.70
Notes:
1. Based on the results of the iFAST Group from continuing operations.
2. N.A. represents information not applicable for the period FY2011-9M2014.
3. Excludes the interim dividend by way of a distribution in specie during FY2013.
Dividend Policy
We currently do not have a fixed dividend policy
However, our Directors intend to recommend and distribute dividends of 60% of our net profit after tax (excluding exceptional items) for the fourth
quarter of FY2014, and dividends of 60% of our net profit after tax (excluding exceptional items) for FY2015
Banks
Financial Advisory
companies (FAs)
Financial Institutions
Companies
Fundsupermart.com
Adviser-assisted Investors
Pensions for employees
B2B customers select investment products distributed on iFAST platform
on behalf of adviser-assisted investors
DIY investors select investment products distributed on Fundsupermart.com.
Fund Houses
Banks (Bond Dealers)
Insurance Companies
Product providers provide investment
products for distribution on iFAST platform
DIY Investors
Note: Information determined or calculated as at 30 September 2014.
Group AUA
Singapore: 75.5% Hong Kong: 20.5% Malaysia: 4.0%
Recurring vs Non-recurring Net Revenue
Average contribution of recurring net
revenue to net revenue for the period
2004-2007: approximately 34.2%
Average contribution of recurring net
revenue to net revenue (for the period
FY2011-9M2014): approximately 81.6%
Net Revenue and Operating Expenses as a Ratio
of Average AUA
PBT Margin (based on Net Revenue)
Note: The ratio for 9M2014 has been computed based on annualised net revenue and
operating expenses figures for 9M2014.
Key Financial Charts
Note: Information determined or calculated as at 30 September 2014.
5,000
4,000
3,000
2,000
1,000
-
D
e
c
-
0
0
N
o
v
-
0
1
O
c
t
-
0
2
S
e
p
-
0
3
A
u
g
-
0
4
J
u
l
-
0
5
J
u
n
-
0
6
M
a
y
-
0
7
A
p
r
-
0
8
M
a
r
-
0
9
F
e
b
-
1
0
J
a
n
-
1
1
D
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-
1
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N
o
v
-
1
2
O
c
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-
1
3
S
e
p
-
1
4
B2B B2C
S$’Million
AUA (As at end September 2014): S$5.13 billion
B2B: 74.3%
B2C: 25.7%
1
0
-
y
e
a
r
C
A
G
R
:
2
6
.
8
%
9.4%
15.0%
29.1%
35%
30%
25%
20%
15%
10%
5%
0%
FY2011 FY2012 FY2013 9M2014
27.9%
35
30
25
20
15
10
5
0
2
0
0
4
2
0
0
5
2
0
0
6
2
0
0
7
2
0
0
8
2
0
0
9
2
0
1
0
2
0
1
1
2
0
1
2
2
0
1
3
9
M
2
0
1
4
Recurring Non-recurring
4.3
6.9
12.8
28.8
25.3
15.9
21.8
25.2
26.3
31.6
27.3
S$’Million
0.651%
0.526%
0.588%
0.672%
0.571% 0.573%
0.708%
0.574%
0.529%
0.745%
0.593%
0.536%
0.800%
0.700%
0.600%
0.500%
0.400%
0.300%
0.200%
0.100%
0.000%
FY2011 FY2012 FY2013 9M2014
Net revenue/Average AUA Recurring net revenue/Average AUA Opera?ng expenses/Average AUA
Future Plans
Market share of investment platforms in developed markets such as Australia and the UK
is far higher than in Asia ex-Japan.
Factors that contribute to continued growth of investment platforms in Asia ex-Japan:
Rapid economic growth in Asia ex-Japan and greater adoption of investment platforms
Greater trend for investors to move to online channels
Rapid emergence of banks, FAs and financial institutions in Asia’s wealth management centres
Regulatory changes and trans-border funds recognition schemes in Asia ex-Japan
Enhancement of our Product Capabilities,
IT and Services
Including more investment products such as ETFs,
bonds, and eventually shares and securities
B2C segment: Improving tools to bring in higher
traffic; investing in more consumer educational efforts
while continuing to stay competitive in pricing
B2B segment: FAs to seamlessly advise across
multiple asset classes will allow us to grow our AUA
at a faster pace
Well-placed to provide specialised services to
potential customers such as financial institutions
who want to tap on the scale of the Internet to
expand their customer base with efficiently-managed
websites and mobile applications
Mergers and Acquisitions Strategy
Actively evaluating opportunities to acquire
related
businesses with sizeable AUA and customer base
that can complement our existing investment platform
business
Exploring the possibilities of entering new markets
in the Asia-Pacific region through acquisitions,
joint ventures and/or strategic partnerships
Expansion of our Business in the Chinese Market
Offshore and onshore opportunity: There are substantial
opportunities for us to tap into China-based investors
that are onshore (within China) as well as offshore
(through the financial centres of Hong Kong and
Singapore)
Tapping on our existing experience and network:
Collaborate with our B2B customers and leverage
on our presence in Hong Kong and Singapore
Prospects
Incorporation of
iFAST Platform Services
(Shenzhen) Qianhai in China
2014
Launch of B2B operations
in Hong Kong
2008
Launch of B2B and B2C mobile
applications for iPhone, iPad
and Android devices
(e.g. FSM Mobile)
2011-2012
Acquisition of ING Platform
Services in Hong Kong,
strengthening our presence
in Hong Kong
2009
Launch of
B2B and B2C operations
in Malaysia
2008
Launch of Fundsupermart.com
in Hong Kong
2007
Launch of the
B2B Pensions platform
2006
iFAST
p e n s i o n s
Launch of B2B operations
in Singapore
2002
Launch of Fundsupermart.com
in Singapore
2000
Launch of iFAST Global Prestige
(iGP), a dedicated investment
platform for HNWIs in Singapore,
and subsequently in
Hong Kong in 2010
2009
Our Milestones
TABLE OF CONTENTS
CORPORATE INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
GLOSSARY OF TECHNICAL TERMS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
CAUTIONARY NOTE ON FORWARD-LOOKING STATEMENTS . . . . . . . . . . . . . . . . . . . 21
THE OFFERING. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
LISTING ON THE SGX-ST. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
INDICATIVE TIMETABLE FOR LISTING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
DETAILS OF THE OFFERING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
USE OF PROCEEDS AND OFFERING EXPENSES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
DIVIDEND POLICY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
EXCHANGE CONTROLS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
OVERVIEW OF OUR GROUP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
RISK FACTORS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
RISKS RELATING TO OUR INDUSTRY, BUSINESS AND OPERATIONS. . . . . . . . . . . 42
RISKS RELATING TO OWNERSHIP OF OUR SHARES. . . . . . . . . . . . . . . . . . . . . . . . 53
SELECTED CONSOLIDATED FINANCIAL INFORMATION . . . . . . . . . . . . . . . . . . . . . . . 60
SELECTED PRO FORMA FINANCIAL INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . 63
MANAGEMENT’S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND
FINANCIAL POSITION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
OVERVIEW . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
INFLATION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
SEASONALITY. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
REVIEW OF PAST OPERATING PERFORMANCE . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
REVIEW OF PAST FINANCIAL POSITION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86
LIQUIDITY AND CAPITAL RESOURCES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 91
CAPITAL EXPENDITURE AND DIVESTMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 96
COMMITMENTS AND CONTINGENT LIABILITIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . 97
FOREIGN EXCHANGE EXPOSURE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 98
CAPITALISATION AND INDEBTEDNESS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 99
OFFERING STATISTICS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 101
DILUTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 103
1
RESTRUCTURING EXERCISE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 104
INTRODUCTION TO THE RESTRUCTURING. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 104
RESTRUCTURING. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 104
GROUP STRUCTURE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 109
SHARE CAPITAL. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 112
HISTORY OF OUR SHAREHOLDING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 115
CHANGES IN ISSUED AND PAID-UP SHARE CAPITAL OF OUR COMPANY AND OUR
SUBSIDIARIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 115
HISTORY OF OUR SHARE OPTION SCHEMES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 119
SHAREHOLDERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 124
SIGNIFICANT CHANGES IN PERCENTAGE OF OWNERSHIP . . . . . . . . . . . . . . . . . . 127
MORATORIUM. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 127
OUR BUSINESS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 135
OVERVIEW . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 135
HISTORY AND DEVELOPMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 136
B2B BUSINESS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 140
B2C BUSINESS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 142
OTHER SERVICES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 143
OUR BUSINESS MODEL. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 143
COMPETITION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 150
OUR COMPETITIVE STRENGTHS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 151
QUALITY ASSURANCE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 154
MAJOR CUSTOMERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 154
MAJOR SUPPLIERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 155
ORDER BOOK . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 156
INVENTORY MANAGEMENT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 156
INTELLECTUAL PROPERTY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 156
RESEARCH AND DEVELOPMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 162
MARKETING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 163
PROPERTIES AND FIXED ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 164
INSURANCE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 165
REGULATORY COMPLIANCE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 166
INDUSTRY OVERVIEW . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 169
INVESTMENT PLATFORMS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 169
2
PROSPECTS, BUSINESS STRATEGIES AND PLANS. . . . . . . . . . . . . . . . . . . . . . . . . . . 179
PROSPECTS AND TREND INFORMATION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 179
BUSINESS STRATEGIES AND FUTURE PLANS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 181
GOVERNMENT REGULATIONS AND LICENSING. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 184
SINGAPORE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 184
MALAYSIA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 186
HONG KONG. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 187
REGULATORY LICENCES, PERMITS AND APPROVALS. . . . . . . . . . . . . . . . . . . . . . . 188
OTHER PERMITS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 192
REGULATORY INSPECTIONS AND INVESTIGATIONS . . . . . . . . . . . . . . . . . . . . . . . . 192
DIRECTORS, MANAGEMENT AND STAFF . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 198
MANAGEMENT REPORTING STRUCTURE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 198
DIRECTORS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 199
EXECUTIVE OFFICERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 204
LEGAL REPRESENTATIVE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 207
DIRECTORS’ AND EXECUTIVE OFFICERS’ REMUNERATION . . . . . . . . . . . . . . . . . . 208
SERVICE AGREEMENT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 209
OUR EMPLOYEES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 212
STAFF TRAINING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 212
CORPORATE GOVERNANCE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 214
AUDIT COMMITTEE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 214
REMUNERATION COMMITTEE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 218
NOMINATING COMMITTEE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 220
RISK COMMITTEE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 221
CORPORATE SOCIAL RESPONSIBILITY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 223
IFAST PSP. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 224
IFAST ESOS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 235
INTERESTED PERSON TRANSACTIONS AND CONFLICT OF INTERESTS . . . . . . . . . 243
PRESENT AND ON-GOING INTERESTED PERSON TRANSACTIONS . . . . . . . . . . . . 243
REVIEW PROCEDURES FOR FUTURE INTERESTED PERSON TRANSACTIONS . . 245
OTHER TRANSACTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 246
POTENTIAL CONFLICT OF INTERESTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 247
MITIGATION OF POTENTIAL CONFLICTS OF INTERESTS . . . . . . . . . . . . . . . . . . . . 248
CLEARANCE AND SETTLEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 250
3
PLAN OF DISTRIBUTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 252
THE OFFERING. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 252
INTERESTS OF THE JOINT ISSUE MANAGERS, BOOKRUNNERS AND
UNDERWRITERS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 255
DISTRIBUTION AND SELLING RESTRICTIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 256
GENERAL AND STATUTORY INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 259
INFORMATION ON DIRECTORS AND EXECUTIVE OFFICERS . . . . . . . . . . . . . . . . . 259
MATERIAL CONTRACTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 261
LITIGATION AND ARBITRATION PROCEEDINGS . . . . . . . . . . . . . . . . . . . . . . . . . . . . 263
MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 263
INTERESTS OF INDEPENDENT MARKET RESEARCH CONSULTANTS . . . . . . . . . . 265
CONSENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 265
RESPONSIBILITY STATEMENT BY OUR DIRECTORS . . . . . . . . . . . . . . . . . . . . . . . . 266
DOCUMENTS AVAILABLE FOR INSPECTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 266
APPENDIX A – AUDITED CONSOLIDATED FINANCIAL STATEMENTS FOR THE
FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012 AND 2013. A-1
APPENDIX B – UNAUDITED INTERIM CONSOLIDATED FINANCIAL
STATEMENTS FOR THE NINE MONTHS ENDED 30 SEPTEMBER
2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-1
APPENDIX C – UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL
INFORMATION FOR THE FINANCIAL YEAR ENDED
31 DECEMBER 2013 AND THE NINE MONTHS ENDED
30 SEPTEMBER 2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . C-1
APPENDIX D – SUMMARY OF OUR ARTICLES OF ASSOCIATION. . . . . . . . . . . . . D-1
APPENDIX E – DESCRIPTION OF OUR SHARES . . . . . . . . . . . . . . . . . . . . . . . . . . E-1
APPENDIX F – RULES OF THE IFAST PSP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-1
APPENDIX G – RULES OF THE IFAST ESOS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . G-1
APPENDIX H – INFORMATION ON THE SHARE BUY BACK MANDATE. . . . . . . . . H-1
APPENDIX I – TAXATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-1
APPENDIX J – TERMS, CONDITIONS AND PROCEDURES FOR APPLICATION
AND ACCEPTANCE OF THE NEW SHARES IN SINGAPORE . . . . J-1
4
BOARD OF DIRECTORS : Lim Chung Chun (Chairman and Chief
Executive Officer)
Lim Wee Kian (Non-Executive Director)
Low Huan Ping (Non-Executive Director)
Yao Chih Matthias (Lead Independent Director)
Ling Peng Meng (Independent Director)
Kok Chee Wai (Independent Director)
Ng Loh Ken Peter (Independent Director)
COMPANY SECRETARY : Chan Lai Yin (ACIS)
Low Siew Tian (ACIS)
REGISTERED OFFICE AND
PRINCIPAL OFFICE
: 10 Collyer Quay
#26-01, Ocean Financial Centre
Singapore 049315
SHARE REGISTRAR : Tricor Barbinder Share Registration
Services
(a division of Tricor Singapore Pte. Ltd.)
80 Robinson Road, #02-00
Singapore 068898
JOINT ISSUE MANAGERS,
BOOKRUNNERS AND
UNDERWRITERS
: DBS Bank Ltd.
12 Marina Boulevard
Marina Bay Financial Centre Tower 3
Singapore 018982
DMG & Partners Securities Pte Ltd
10 Collyer Quay
#09-08, Ocean Financial Centre
Singapore 049315
LEGAL ADVISERS TO THE
OFFERING AND OUR COMPANY AS
TO SINGAPORE LAW
: Stamford Law Corporation
10 Collyer Quay
#27-00, Ocean Financial Centre
Singapore 049315
LEGAL ADVISERS TO THE JOINT
ISSUE MANAGERS, BOOKRUNNERS
AND UNDERWRITERS AS TO
SINGAPORE LAW
: Rajah & Tann Singapore LLP
9 Battery Road
#25-01, Straits Trading Building
Singapore 049910
LEGAL ADVISERS TO OUR
COMPANY AS TO MALAYSIAN LAW
: Christopher & Lee Ong
Level 22, Quill 7
No. 9, Jalan Stesen Sentral 5
Kuala Lumpur Sentral
50470 Kuala Lumpur
Malaysia
CORPORATE INFORMATION
5
LEGAL ADVISERS TO OUR
COMPANY AS TO HONG KONG LAW
: Angela Wang & Co
14th Floor South China Building
1-3 Wyndham Street
Central, Hong Kong
LEGAL ADVISERS TO OUR
COMPANY AS TO PRC LAW
: Yuan Tai Law Offices
14/F, Huaxia Bank Plaza
256 South Pudong Road
Shanghai 200120, PRC
INDEPENDENT AUDITORS AND
REPORTING ACCOUNTANTS
: KPMG LLP
16 Raffles Quay
#22-00, Hong Leong Building
Singapore 048581
Partner-in-charge: Jeya Poh Wan
S/O K. Suppiah
(Chartered Accountant, a member of the
Institute of Singapore Chartered Accountants)
PRINCIPAL BANKERS : DBS Bank Ltd.
12 Marina Boulevard
Marina Bay Financial Centre Tower 3
Singapore 018982
Standard Chartered Bank
8 Marina Boulevard, #27-01
Marina Bay Financial Centre Tower 1
Singapore 018981
RECEIVING BANK : DBS Bank Ltd.
12 Marina Boulevard
Marina Bay Financial Centre Tower 3
Singapore 018982
INDEPENDENT MARKET RESEARCH
CONSULTANTS
: The Platforum
Centaur Communications Ltd
Wells Point
79 Wells Street
London, W1T 3QN
Investment Trends Pty Limited
Suite 2102
Level 21, 1 Alfred Street
Sydney, NSW 2000
Australia
Cerulli Associates Asia Pte Ltd
28 Maxwell Road
#02-04
Singapore 069120
CORPORATE INFORMATION
6
In this Prospectus, the accompanying Application Forms and, in relation to the Electronic
Applications, the instructions appearing on the screens of the ATMs of Participating Banks, the IB
websites of the relevant Participating Banks or the mobile banking platform of DBS Bank
(including POSB), unless the context otherwise requires, the following definitions apply
throughout where the context so admits:
Group Companies
“Company” or “iFAST” : iFAST Corporation Ltd.
“Group” : Our Company and our subsidiaries
“FCCC” : FA Corporate & Compliance Consultancy Pte. Ltd.
“FCCC Malaysia” : FA Corporate and Compliance Consultancy Sdn Bhd
“iFAST Capital” : iFAST Capital Ltd.
“iFAST Capital Malaysia” : iFAST Capital Sdn Bhd
“iFAST China” : iFAST Platform Services (Shenzhen) Qianhai Limited
(º1)1´(ï¹)J(([´+)
“iFAST Financial” : iFAST Financial Pte. Ltd.
“iFAST HK” : iFAST Financial (HK) Limited (º¸A(|¡)([´+)
“iFAST Malaysia” : iFAST Malaysia Sdn. Bhd. (formerly known as iFAST-OSK
Sdn. Bhd.)
“iFAST Nominees” : iFAST Nominees Pte. Ltd.
“iFAST Nominees HK” : iFAST Nominees (HK) Limited (º¦l´(|¡)([´+)
“iFAST Nominees
Malaysia”
: iFAST Nominees Sdn Bhd
“iFAST Platform” or
“IPS HK”
: iFAST Platform Services (HK) Limited (º¦`)1(|¡)
([´+) (formerly known as ING PLATFORM SERVICES
LIMITED ({|¦`)1([´+))
“iFAST Service Centre” : iFAST Service Centre Sdn Bhd
Other Companies, Organisations and Agencies
“Authority” or “MAS” : The Monetary Authority of Singapore
“CDP” : The Central Depository (Pte) Limited
DEFINITIONS
7
“CPF” : The Central Provident Fund
“CPFB” : The Central Provident Fund Board
“CPFIA” : CPF-Investment Administrator
“DBS Bank” : DBS Bank Ltd.
“DMG” : DMG & Partners Securities Pte Ltd
“FIMM” : Federation of Investment Managers Malaysia
“iFAST India” : iFAST India Investments Pte. Ltd.
“ING Platform Services” : ING PLATFORM SERVICES LIMITED ({|¦`)1([
´+) (now known as iFAST Platform Services (HK) Limited
(º¦`)1(|¡)([´+))
“IRAS” : Inland Revenue Authority of Singapore
“Joint Issue Managers,
Bookrunners and
Underwriters”
: DBS Bank and DMG
“MPFSA” : Mandatory Provident Fund Schemes Authority
“Participating Banks” : DBS Bank (including POSB), Oversea-Chinese Banking
Corporation Limited (“OCBC Bank”) and United Overseas
Bank Limited and its subsidiary, Far Eastern Bank Limited
(“UOB Group”) and “Participating Bank” means any of the
abovementioned
“Pecuniam” : Pecuniam Pte. Ltd.
“Providend” : Providend Holding Private Limited
“Receiving Bank” : DBS Bank
“RHB” : RHB Investment Bank Berhad
“SAFE” : State Administration of Foreign Exchange of the PRC
“SC” : Securities Commission of Malaysia
“SFC” : Securities and Futures Commission of Hong Kong
“SGX-ST” or “Exchange” : Singapore Exchange Securities Trading Limited
DEFINITIONS
8
“SPH” : Singapore Press Holdings Limited
“SPH AsiaOne” : SPH AsiaOne Ltd
“Stabilising Manager” : DBS Bank
General
“2003 ESOS” : The employee share option scheme adopted by our Company
on 28 March 2003
“2013 ESOS” : The employee share option scheme adopted by our Company
on 23 May 2013
“4Q” : The three (3) months period commencing 1 October and
ended or, as the case may be, ending on 31 December
“9M” : The nine (9) months period commencing 1 January and ended
or, as the case may be, ending on 30 September
“Additional Shares” : Up to an aggregate of 3,280,000 additional new Shares which
may be issued pursuant to the exercise of the Over-allotment
Option
“Application Forms” : The printed application forms to be used for the purpose of the
Offering and which form part of this Prospectus
“Articles” or “Articles of
Association”
: The articles of association of our Company as amended,
supplemented or modified from time to time
“Associate” : In the case of a company,
(a) in relation to any director, chief executive officer,
substantial shareholder or controlling shareholder (being
an individual) means:
(i) his immediate family;
(ii) the trustees of any trust of which he or his
immediate family is a beneficiary or, in the case of
a discretionary trust, is a discretionary object; or
(iii) any company in which he and his immediate family
together (directly or indirectly) have an interest of
30.0% or more; or
DEFINITIONS
9
(b) in relation to a substantial shareholder or a controlling
shareholder (being a company) means any other
company which is its subsidiary or holding company or is
a subsidiary of such holding company or one (1) in the
equity of which it and/or such other company or
companies taken together (directly or indirectly) have an
interest of 30.0% or more
“ATM” : Automated teller machine of a Participating Bank
“Audit Committee” : The audit committee of our Company as at the date of this
Prospectus
“Award Shares” : The Shares which may be issued or transferred upon the
release of the share awards granted pursuant to the iFAST
PSP
“Board” or “Board of
Directors”
: The board of Directors of our Company
“CEO” : The chief executive officer of our Company as at the date of
this Prospectus
“CFO” : The chief financial officer of our Company as at the date of
this Prospectus
“CMSA” : The Capital Markets and Services Act 2007 of Malaysia as
amended, supplemented or modified from time to time
“Code of Corporate
Governance”
: The Code of Corporate Governance issued by the Authority on
2 May 2012
“Companies Act” or
“the Act”
: The Companies Act (Chapter 50) of Singapore, as amended,
supplemented or modified from time to time
“Controlling Shareholder” : A person who:
(a) holds directly or indirectly 15% or more of the total
number of issued shares in the company (excluding
treasury shares). The SGX-ST may determine that a
person who satisfies this paragraph is not a controlling
shareholder; or
(b) in fact exercises control over a company
“COO” : Chief operating officer
“Cornerstone Investors” : FIL Investment Management (Hong Kong) Limited and OWW
Investments III Limited
DEFINITIONS
10
“Cornerstone Tranche” : The subscription of the Cornerstone Shares by the
Cornerstone Investors, conditional upon, inter alia, the
Management and Underwriting Agreement and Placement
Agreement having been entered into and not having been
terminated pursuant to their terms on or prior to the Listing
Date
“Cornerstone Shares” : The 19,000,000 new Shares which the Cornerstone Investors
have agreed to subscribe to at the Offering Price
“Cornerstone Subscription
Agreements”
: The cornerstone agreements that each of the Cornerstone
Investors has entered into to subscribe for the Cornerstone
Shares, conditional upon, inter alia, the Management and
Underwriting Agreement and the Placement Agreement
having been entered into and not having been terminated
pursuant to their terms on or prior to the Listing Date
“Directors” : The directors of our Company as at the date of this
Prospectus
“Electronic Applications” : Applications for the Public Offer Shares made through an ATM
or the IB websites of the relevant Participating Banks or
through the mobile banking platform of DBS Bank (including
POSB), subject to and on the terms and conditions of this
Prospectus
“EPS” : Earnings per Share
“Executive Officers” : The executive officers of our Group as at the date of this
Prospectus, who are also key executives as defined under the
SFR
“Financial Advisers Act” or
“FAA”
: The Financial Advisers Act (Chapter 110) of Singapore, as
amended, supplemented or modified from time to time
“FY” : Financial year ended or, as the case may be, ending 31
December
“GDP” : Gross domestic product
“GST” : Singapore goods and services tax
“IB” : Internet banking
“iFAST ESOS” : The employee share option scheme adopted by our Company
on 21 October 2014
“iFAST PSP” : The performance share plan adopted by our Company on
21 October 2014
DEFINITIONS
11
“Independent Directors” : The independent Directors of our Company as at the date of
this Prospectus
“Independent Market
Research Consultants”
: The Platforum, Investment Trends Pty Limited, and Cerulli
Associates Asia Pte Ltd
“Insurance Act” : The Insurance Act (Chapter 142) of Singapore, as amended,
supplemented or modified from time to time
“Latest Practicable Date” : 10 November 2014, being the latest practicable date prior to
the lodgement of this Prospectus with the Authority
“Listing” : Listing of our Company on the Mainboard of the SGX-ST
“Listing Date” : The date of commencement of dealing in our Shares on the
SGX-ST
“Listing Manual” : Listing manual of the SGX-ST, as amended, supplemented or
modified from time to time
“Management and
Underwriting Agreement”
: The management and underwriting agreement dated 4
December 2014 entered into between our Company, DBS
Bank and DMG
“Market Day” : A day on which the SGX-ST is open for trading in securities
“Memorandum” or
“Memorandum of
Association”
: The memorandum of association of our Company
“N.A.” : Not applicable
“NAV” : Net asset value
“New Shares” : The 32,800,000 new Shares for which our Company invites
applications to subscribe pursuant to the Offering, subject to
and on the terms and conditions of this Prospectus (subject to
the Over-allotment Option)
“Nominating Committee” : The nominating committee of our Company as at the date of
this Prospectus
“Non-Executive Directors” : The non-executive Directors of our Company as at the date of
this Prospectus
“Offering” : The Public Offer and the Placement
“Offering Price” : S$0.95 for each New Share
DEFINITIONS
12
“Options” : The existing share options which were granted pursuant to the
2003 ESOS, the 2013 ESOS, and the options to be granted
pursuant to the iFAST ESOS
“Option Shares” : The new Shares which may be allotted and issued on the
exercise of the Options
“Over-allotment Option” : The over-allotment option granted by us to the Stabilising
Manager, on behalf of the Joint Issue Managers, Bookrunners
and Underwriters, exercisable by the Stabilising Manager, in
whole or in part, on its own behalf and on behalf of the Joint
Issue Managers, Bookrunners and Underwriters, during the
period commencing on the Listing Date until the earlier of (i)
the date falling 30 days from the Listing Date or (ii) the date
when the Stabilising Manager (or persons acting on its behalf)
has bought on the SGX-ST an aggregate of 3,280,000
Shares, representing not more than 10% of the Offering, to
undertake stabilising actions, solely to cover the over-
allotment of Shares, if any
Unless otherwise indicated, all information in this Prospectus
assumes that the Over-allotment Option will not be exercised
“Period Under Review” : The period which comprises FY2011, FY2012, FY2013 and
9M2014
“Placement” : The international placement of 30,000,000 New Shares to
investors, including international and other investors in
Singapore and outside the United States in reliance on
Regulation S
“Placement Agreement” : The placement agreement dated 4 December 2014 entered
into between our Company, DBS Bank and DMG
“Placement Shares” : The 30,000,000 New Shares which are the subject of the
Placement
“PRC” or “China” : The People’s Republic of China (which excludes the Special
Administrative Regions of Hong Kong and Macau and Taiwan
area for the purposes of this Prospectus)
“Prospectus” : This prospectus dated 4 December 2014 issued by our
Company in respect of the Offering
“Public Offer” : The offer of 2,800,000 New Shares to the public in Singapore
for subscription at the Offering Price, subject to and on the
terms and conditions set out in this Prospectus
“Public Offer Shares” : The 2,800,000 New Shares which are the subject of the Public
Offer
DEFINITIONS
13
“Remuneration Committee” : The remuneration committee of our Company as at the date of
this Prospectus
“Restructuring Exercise” : The restructuring exercise that we carried out to dispose of
our India business, iFAST India, as described in the section
entitled “Restructuring Exercise” of this Prospectus
“Regulation S” : Regulation S under the US Securities Act
“Risk Committee” : The risk committee of our Company as at the date of this
Prospectus
“Securities Account” : Securities account maintained by a depositor with CDP but
does not include a securities sub-account
“Securities and Futures
Act” or “SFA”
: The Securities and Futures Act (Chapter 289) of Singapore,
as amended, supplemented or modified from time to time
“Service Agreement” : The service agreement entered into between our Company
and Mr. Lim Chung Chun, as described in the section entitled
“Directors, Management and Staff – Service Agreement” of
this Prospectus
“SFO” : Securities and Futures Ordinance (Cap 571) of Hong Kong
“SFR” : The Securities and Futures (Offers of Investment) (Shares
and Debentures) Regulations 2005 of Singapore, as
amended, supplemented or modified from time to time
“SGXNET” : The corporate announcement system maintained by the
SGX-ST for the submission of announcements by listed
companies
“Shareholders” : Registered shareholders of our Company, except where the
registered holder is CDP, the term “Shareholders” shall, in
relation to such Shares, mean the depositors whose
Securities Accounts are credited with Shares
“Shares” : Fully paid ordinary shares in the capital of our Company
“Share Lending Agreement” : The share lending agreement dated 4 December 2014
entered into between Mr. Lim Chung Chun and the Stabilising
Manager in connection with the Over-allotment Option
“Sub-division” : The sub-division of every one (1) Share in the share capital of
our Company into six (6) Shares
“Substantial Shareholder” : A person who holds, directly or indirectly, 5% or more of the
total issued share capital of our Company
DEFINITIONS
14
“Take-over Code” : The Singapore Code on Take-overs and Mergers, which is
administered by the Securities Industry Council in Singapore
“TCA” : The Trust Companies Act (Chapter 336) of Singapore, as
amended, supplemented or modified from time to time
“UK” : The United Kingdom
“US” or “U.S.” : The United States of America
“US Securities Act” : United States Securities Act of 1933, as amended
Currencies, Units and Others
“HK$” and “HK cents” : Hong Kong dollars and cents, respectively, being the lawful
currency of Hong Kong
“RM” and “sen” : Malaysian ringgit and cents, respectively, being the lawful
currency of Malaysia
“RMB” and “RMB cents” : Renminbi dollars and cents, respectively, being the lawful
currency of the PRC
“S$” or “$” and “cents” : Singapore dollars and cents, respectively, being the lawful
currency of Singapore
“US$” : United States dollars, being the lawful currency of the U.S.
“%” or “per cent.” : Per centum or percentage
“sq ft” : Square feet
Any reference to “our”, “ourselves”, “us”, “we” or other grammatical variations thereof in this
Prospectus is a reference to our Company, our Group or any member of our Group as the context
requires.
The terms “Depositor”, “Depository Agent” and “Depository Register” shall have the meanings
ascribed to them respectively in Section 130A of the Companies Act.
The term “entity” shall have the same meaning ascribed to it in Section 2 of the Securities and
Futures Act, while the terms “associated companies”, “associated entity”, “controlling
interest-holder”, “related corporation”, “related entity”, “subsidiary”, “subsidiary entity” and
“substantial interest-holder” shall have the same meanings ascribed to them respectively in
paragraph 1 of the Fourth Schedule of the SFR.
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.
DEFINITIONS
15
Any reference in this Prospectus, the Application Forms or the Electronic Applications to any
statute or enactment is a reference to that statute or enactment for the time being amended or
re-enacted. Any word defined in the Companies Act, the Securities and Futures Act or any
statutory modification thereof or the Listing Manual and used in this Prospectus, the Application
Forms and Electronic Applications shall, where applicable, have the meaning assigned to it under
the Companies Act, the Securities and Futures Act or such statutory modification, or the Listing
Manual, as the case may be.
Any reference in this Prospectus, the Application Forms or the Electronic Applications to Shares
being allotted to an applicant includes allotment to CDP for the account of that applicant.
Any reference to a time of day or dates in this Prospectus, the Application Forms or the Electronic
Applications shall be a reference to Singapore time and dates, unless otherwise stated.
Any discrepancies in the tables included in this Prospectus between the listed amounts and the
totals thereof are due to rounding. Accordingly, figures shown in totals in certain tables may not
be an arithmetic aggregation of the figures which precede them.
In addition, unless we indicate otherwise, all information in this Prospectus assumes that no New
Shares have been re-allocated between the Placement and the Public Offer.
DEFINITIONS
16
This glossary contains an explanation of certain terms used in this Prospectus in connection with
our Group and our business. The terms and their assigned meanings may not correspond to
standard industry or common meanings or usage of these terms.
“adviser-assisted investors” : Investors who carry out transactions in Investment
Products with the assistance of a FA, a bank or a
financial institution
“Appointed Representative” : An appointed representative pursuant to Section 99B of
the SFA in respect of certain types of activities regulated
by the MAS
“Assets Under Administration” or
“AUA”
: The value of investments administered by our Group
“B2B” : Business-to-Business
“B2C” : Business-to-Customer
“B2B Business” : Our Group’s business which relates to the provision of a
Platform to banks, financial institutions and FAs via our
iFAST Financial Website or otherwise (including our
Pensions Business)
“B2B Customers” : Customers of our Group’s B2B Business (including FAs
who maintain an investment account with us via a
nominee arrangement and adviser-assisted investors
who instruct their FAs to maintain an investment account
with us)
“B2C Business” : Our Group’s business which relates to the provision of a
Platform to investors via our Fundsupermart.com
Website
“B2C Customers” : Customers of our Group’s B2C Business (including DIY
Investors who use the Fundsupermart.com Website to
maintain an investment account with us)
“CMS Licence” : A capital markets services licence that is granted by the
MAS under Section 86 of the SFA to a person to carry on
a business regulated by the SFA
“CMSL” : A capital markets services licence that is granted by the
SC under Section 61 of the CMSA
“CPFIS” : CPF Investment Scheme
GLOSSARY OF TECHNICAL TERMS
17
“Customers” : (1) B2B Customers;
(2) B2C Customers; and/or
(3) any other person or institution who uses the
services provided by our Group
“CUTA” : Corporate Unit Trust Adviser
“DIY” : Do-it-yourself
“DIY Investors” : Investors who prefer to make and execute their own
investment decisions and/or invest in Investment
Products by themselves without the assistance of any FA
“FA” or “Financial Advisers” : Any persons and institutions carrying on the business of
providing financial advisory service
“FA Licence” : A licence that is granted by the MAS under Section 13 of
the FAA in respect of a FA
“financial advisory service” : (1) Advising others, either directly or through
publications or writings, and whether in electronic,
print or other form, concerning any investment
products, other than:
(a) in the manner set out in paragraph (2) of the
Second Schedule to the FAA; or
(b) advising on corporate finance within the
meaning of the SFA;
(2) Advising others by issuing or promulgating
research analyses or research reports, whether in
electronic, print or other form, concerning any
investment products;
(3) Marketing of any collective investment scheme; and
(4) Arranging of any contract of insurance in respect of
life policies
“Fundsupermart.com Website” : The B2C arm of our Platform accessible over the Internet
via the website www.fundsupermart.com
“GFC” : The global financial crisis in 2008 and 2009
“HNW” : High Net Worth
GLOSSARY OF TECHNICAL TERMS
18
“iFAST Financial Website” : The B2B arm of our Platform accessible over the Internet
via the website www.ifastfinancial.com
“iFAST Pensions Website” : The pensions arm of our Platform accessible over the
Internet via the website www.ifastpensions.com
“iGP” : iFAST Global Prestige
“iGP Website” : The B2B arm of our Platform which services financial
institutions and FA companies with HNW clients,
accessible over the Internet via the website
www.ifastgp.com
“Investment Products” : Funds (including unit trusts) and SGS Bonds in
Singapore, funds (including unit trusts) in Malaysia, and
funds (including unit trusts) and corporate bonds in Hong
Kong, and such other financial products as we may
provide or distribute from time to time
“IPRA” : Institutional PRS Adviser
“IT” : Information technology
“IUTA” : Institutional Unit Trust Adviser
“Pensions Business” : Our Group’s business which relates to the provision of a
Platform to assist companies with administering pension
schemes for their employees, and provide administrative
support and specialist services to help companies start
up and administer employee retirement benefit plans
“Platform” : The Internet-based Investment Products distribution and
administration platforms developed, owned and
operated by our Group
“Platform Fees” : The fees that are paid by Customers to us for the
services we provide
“PRS” : Private retirement schemes in Malaysia
“representative” : A person in the direct employment of or acting for or by
arrangement with a FA, who performs for the FA any of
the functions of a FA (other than work ordinarily
performed by accountants, clerks or cashiers), whether
his remuneration is by way of salary, wages, commission
or otherwise, and includes an officer of the FA who
performs for the FA any of those functions, whether or
not his remuneration is aforesaid
GLOSSARY OF TECHNICAL TERMS
19
“SGS Bonds” : Singapore government securities issued by the
Government of Singapore through the MAS, which may
comprise treasury bills and bonds
“Subscription” : Purchase of Investment Products measured in monetary
value
“Suppliers” : Fund houses that provide us with Investment Products
“Switching” : Redemption from one investment product and
subsequent subscription into another investment product
“Trailer Fees” : The fees that are paid to us by a fund house based on
AUA attributable to such fund house
“Transfer-in” : Monetary value of the investment products transferred
from any third-party platform onto our Platform
“Transfer-out” : Monetary value of the investment products transferred
from our Platform to any third-party platform
“Wrap Fees” : In relation to our B2B Business, the fees that we receive
from adviser-assisted investors for the services provided
to them by the FAs and us
GLOSSARY OF TECHNICAL TERMS
20
All statements contained in this Prospectus, statements made in the press releases and oral
statements that may be made by us or our Directors, Executive Officers or employees acting on
our behalf, that are not statements of historical fact, constitute “forward-looking statements”.
Some of these statements can be identified by forward-looking terms such as “anticipate”,
“believe”, “could”, “estimate”, “expect”, “if”, “intend”, “may”, “plan”, “possible”, “probable”,
“project”, “should”, “will” and “would” or similar words. However, these words are not the exclusive
means of identifying forward-looking statements. All statements regarding our Group’s expected
financial position, business strategies, plans and prospects and the future prospects of our
industry are forward-looking statements. These forward-looking statements, including but not
limited to statements as to our Group’s revenue and profitability, prospects, future plans, other
expected industry trends and other matters discussed in this Prospectus regarding matters that
are not historic facts, are only predictions.
These forward-looking statements involve known and unknown risks, uncertainties and other
factors that may cause our Group’s actual future results, performance or achievements to be
materially different from any future results, performance or achievements expected, expressed or
implied by such forward-looking statements. These factors include, amongst others, changes in
the political, social and economic conditions and regulatory environment in Singapore and other
countries where we may conduct our business, changes in competitive conditions and other
factors beyond our control. Some of these factors are discussed in more detail in the section
entitled “Risk Factors” of this Prospectus.
All forward-looking statements made by or attributable to us, or persons acting on our behalf,
contained in this Prospectus are expressly qualified in their entirety by such factors. Given the
risks and uncertainties that may cause our Group’s actual future results, performance or
achievements to be materially different from that expected, expressed or implied by the
forward-looking statements in this Prospectus, undue reliance must not be placed on these
statements.
Neither our Company, any of the Joint Issue Managers, Bookrunners and Underwriters, our
respective advisers nor any other person represents or warrants that our Group’s actual future
results, performance or achievements will be as discussed in those forward-looking statements.
Our actual results may differ materially from those anticipated in these forward-looking
statements.
Further, our Company, any of the Joint Issue Managers, Bookrunners and Underwriters, our
respective advisers and any other person 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, even if new information
becomes available or other events occur in the future. We are, however, subject to the provisions
of the Securities and Futures Act and the Listing Manual regarding corporate disclosure. In
particular, pursuant to Section 241 of the Securities and Futures Act, if after this Prospectus is
registered but before the close of the Offering, we become aware of: (a) a false or misleading
statement or matter in this Prospectus; (b) an omission from this Prospectus of any information
that should have been included in it under Section 243 of the Securities and Futures Act; or (c)
a new circumstance that has arisen since this Prospectus was lodged with the Authority and would
have been required by Section 243 of the Securities and Futures Act to be included in this
Prospectus, if it had arisen before this Prospectus was lodged and that is materially adverse from
the point of view of an investor, we may lodge a supplementary or replacement prospectus with
the Authority.
CAUTIONARY NOTE ON FORWARD-LOOKING STATEMENTS
21
LISTING ON THE SGX-ST
We have made an application to the SGX-ST for permission to deal in, and for quotation of, all our
Shares already issued, the New Shares, the Cornerstone Shares, the Option Shares, the Award
Shares and the Additional Shares. Such permission will be granted when our Company has been
admitted to the Official List of the SGX-ST.
Our acceptance of applications will be conditional upon, inter alia, permission being granted by
the SGX-ST to deal in, and for quotation of, all of our existing issued Shares, the New Shares, the
Cornerstone Shares, the Option Shares, the Award Shares and the Additional Shares. If the
Offering is not completed because such permission is not granted for any reason, monies paid in
respect of any application accepted will be returned to you, without interest or any share of
revenue or other benefit arising therefrom and at your own risk, and you will not have any claims
whatsoever against us and the Joint Issue Managers, Bookrunners and Underwriters.
We have received a letter of eligibility-to-list from the SGX-ST for our existing issued Shares, the
New Shares, the Cornerstone Shares, the Option Shares, the Award Shares and the Additional
Shares. The SGX-ST assumes no responsibility for the correctness of any of the statements
made, opinions expressed or reports contained in this Prospectus. Admission to the Official List
of the SGX-ST is not to be taken as an indication of the merits of the Offering, our Company, our
subsidiaries, our existing issued Shares, the New Shares, the Cornerstone Shares, the Option
Shares, the Award Shares and the Additional Shares.
In connection with the Offering, we have granted the Stabilising Manager an Over-allotment
Option exercisable by the Stabilising Manager, in whole or in part, on one or more occasions,
during the period commencing from the Listing Date until the earlier of (i) the date falling 30 days
from the Listing Date; or (ii) the date when the Stabilising Manager (or persons acting on its
behalf) has bought on the SGX-ST an aggregate of 3,280,000 Shares, representing not more than
10% of the Offering, to undertake stabilizing actions. Pursuant to the Over-allotment Option, the
Stabilising Manager may subscribe and/or procure subscribers for up to an aggregate of
3,280,000 Additional Shares (which in aggregate is not more than 10% of the Offering) at the
Offering Price, solely to cover the over-allotment of Shares, if any.
In connection with the Offering, the Stabilising Manager (or persons acting on behalf of the
Stabilising Manager), may, in its discretion, but subject always to applicable laws and regulations,
over-allot Shares or effect transactions with a view to supporting the market price of the Shares
at a level higher than that which would otherwise prevail in the open market. Such transactions
may be effected on the SGX-ST and other jurisdictions where it is permissible to do so, in each
case in compliance with all applicable laws and regulations. Such transactions, if commenced,
may be discontinued at any time by the Stabilising Manager without notice (unless such notice is
required by law) and shall not be effected after the earlier of (i) the date falling 30 days from the
Listing Date or (ii) the date when the Stabilising Manager or its appointed agent has bought on the
SGX-ST an aggregate of 3,280,000 Shares, representing not more than 10% of the Offering, to
undertake stabilising actions.
This Prospectus has been reviewed and approved by our Directors and they individually and
collectively accept full responsibility for the accuracy of the information given in this Prospectus
and confirm after making all reasonable enquiries that, to the best of their knowledge and belief,
this Prospectus constitutes full and true disclosure of all material facts about the Offering, our
Company and its subsidiaries, and our Directors are not aware of any facts the omission of which
would make any statement in this Prospectus misleading. Where information in this Prospectus
has been extracted from published or otherwise publicly available sources or obtained from a
THE OFFERING
22
named source, the sole responsibility of the Directors has been to ensure that such information
has been accurately and correctly extracted from those sources and/or reproduced in this
Prospectus in its proper form and context.
None of us or any of the Joint Issue Managers, Bookrunners and Underwriters or any of our or
their respective affiliates, directors, officers, employees, agents, representatives or advisers nor
any other parties involved in the Offering is making any representation to any person regarding the
legality of an investment in our Shares by such person under any investment or other laws or
regulations.
No information in this Prospectus should be considered to be business, legal or tax advice
regarding an investment in our Shares. You should consult your own legal, financial, tax or other
professional adviser 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 Prospectus in connection with the Offering and, if given or made, such
information or representation must not be relied upon as having been authorised by us and the
Joint Issue Managers, Bookrunners and Underwriters. Neither the delivery of this Prospectus and
the Application Forms nor the Offering shall, under any circumstances, constitute a continuing
representation or create any suggestion or implication that the information herein is correct as of
any date subsequent to the date hereof or that there has been no change in the affairs of our
Company or our Group or in any statement of fact or information contained in this Prospectus
since the date of this Prospectus. Where such changes occur, we may make an announcement of
the same to the SGX-ST and the public, and if required, lodge a supplementary document or
replacement document pursuant to Section 241 of the Securities and Futures Act and take
immediate steps to comply with Section 241 of the Securities and Futures Act. You should take
note of any such announcement and/or documents issued by us in compliance with the Securities
and Futures Act and, upon release of such announcement and/or documents, shall be deemed to
have notice of such changes.
Save as expressly stated in this Prospectus, nothing herein is, or may be relied upon as, a promise
or representation as to our future performance or policies. This Prospectus has been prepared
solely for the purpose of the Offering and may not be relied upon by any persons other than
yourself in connection with your application for the New Shares or for any other purpose. This
Prospectus does not constitute an offer or invitation or solicitation to subscribe for the
New Shares in any jurisdiction in which such offer, invitation or solicitation is unauthorised
or unlawful nor does it constitute an offer or invitation or solicitation to any person to
whom it is unlawful to make such an offer or invitation or solicitation.
The New Shares have not been, and will not be, registered under the US Securities Act and
accordingly, may not be offered or sold within the United States. The New Shares are only being
offered and sold outside the United States in offshore transactions as defined in, and in reliance
on, Regulation S.
A copy of this Prospectus has been lodged with and registered by the Authority. The Authority
assumes no responsibility of the contents of this Prospectus. Registration of this Prospectus by
the Authority does not imply that the Securities and Futures Act, or any other legal or regulatory
requirements, have been complied with. The Authority has not, in any way, considered the merits
of our existing Shares, the New Shares, the Cornerstone Shares, the Option Shares, the Award
Shares or the Additional Shares, as the case may be, being offered for investment.
THE OFFERING
23
No Shares shall be allotted or allocated on the basis of this Prospectus later than six (6) months
after the date of registration of this Prospectus by the Authority.
We are subject to the provisions of the Securities and Futures Act and the Listing Manual
regarding corporate disclosure. In particular, if after this Prospectus is registered but before the
close of the Offering, we become aware of:
(a) a false or misleading statement in this Prospectus;
(b) an omission from this Prospectus of any information that should have been included in it
under Section 243 of the Securities and Futures Act; or
(c) a new circumstance that has arisen since this Prospectus was lodged with the Authority
which would have been required by Section 243 of the Securities and Futures Act to be
included in this Prospectus, if it had arisen before this Prospectus was lodged,
that is materially adverse from the point of view of an investor, we may lodge a supplementary or
replacement prospectus with the Authority pursuant to Section 241 of the Securities and Futures
Act.
Where prior to the lodgement of the supplementary or replacement prospectus, applications have
been made under this Prospectus to subscribe for the New Shares and:
(a) where the New Shares have not been issued to you, our Company shall either:
(i) within two (2) days (excluding any Saturday, Sunday or public holiday) from the date of
lodgement of the supplementary or replacement prospectus, give you notice in writing
of how to obtain, or arrange to receive, a copy of the supplementary or replacement
prospectus, as the case may be, and provide you with an option to withdraw your
applications and take all reasonable steps to make available within a reasonable period
the supplementary or replacement prospectus, as the case may be, to you if you have
indicated that you wish to obtain, or have arranged to receive, a copy of the
supplementary or replacement prospectus;
(ii) within seven (7) days from the date of lodgement of the supplementary or replacement
prospectus, give you the supplementary or replacement prospectus, as the case may
be, and provide you with an option to withdraw your application; or
(iii) treat the applications as withdrawn and cancelled, in which case your application shall
be deemed to have been withdrawn and cancelled and our Company shall, within seven
(7) days from the date of lodgement of the supplementary or replacement prospectus,
return all monies paid in respect of any application for the New Shares, without interest
or any share of revenue or other benefit arising therefrom and at your own risk; or
(b) where the New Shares have been issued to you, our Company shall either:
(i) within seven (7) days from the date of lodgement of the supplementary or replacement
prospectus, give you the supplementary or replacement prospectus, as the case may
be, and provide you with an option to return to our Company the New Shares which you
do not wish to retain title in; or
THE OFFERING
24
(ii) treat the issuance of New Shares as void, in which case the issue shall be deemed void
and our Company shall within seven (7) days from the date of lodgement of the
supplementary or replacement prospectus, return all monies paid in respect of any
application for the New Shares, without interest or any share of revenue or other benefit
arising therefrom and at your own risk.
If you wish to exercise your option under paragraph (a)(i) above to withdraw your application in
respect of the New Shares, you shall, within 14 days from the date of lodgement of the
supplementary or replacement prospectus, notify our Company of this, whereupon our Company
shall, within seven (7) days from the receipt of such notification, pay to you all monies paid by you
on account of your application for such New Shares, without interest or any share of revenue or
other benefit arising therefrom and at your own risk.
If you wish to exercise your option under paragraph (b)(i) above to return the New Shares issued
to you, you shall, within 14 days from the date of lodgement of the supplementary or replacement
prospectus, notify our Company of this and return all documents, if any, purporting to be evidence
of title to those Shares, to our Company, whereupon our Company shall, within seven (7) days
from the receipt of such notification and documents, if any, pay to you all monies paid by you on
account of your application for those New Shares, without interest or any share of revenue or
other benefit arising therefrom and at your own risk and the issuance of those New Shares shall
be deemed to be void.
Under the Securities and Futures Act, the Authority may, in certain circumstances issue a stop
order pursuant to Section 242 of the Securities and Futures Act (the “Stop Order”) to our
Company, directing that no New Share or no further Share to which this Prospectus relates, be
allotted or issued. Such circumstances will include a situation where this Prospectus (i) contains
a statement or matter, which in the opinion of the Authority, is false or misleading; (ii) omits any
information that should be included in accordance with Section 243 of the Securities and Futures
Act; (iii) does not, in the opinion of the Authority, comply with the requirements of the Securities
and Futures Act; or (iv) the Authority is of the opinion that it is in the public interest to do so.
Where applications to subscribe for the New Shares to which the Prospectus relates have been
made prior to the Stop Order, then:
(a) where the New Shares have not been issued to you, your application for the New Shares
shall be deemed to have been withdrawn and cancelled, and our Company shall, within 14
days from the date of the Stop Order, pay to you all monies which you have paid on account
of your application for the New Shares; or
(b) where the New Shares have been issued to you, the issuance of New Shares shall be
deemed to be void, and our Company shall, within 14 days from the date of the Stop Order,
pay to you all monies which you have paid on account of your application for the New Shares.
In each of the above instances where monies are refunded to you, it shall be paid to you without
interest or any share of revenue or other benefit arising therefrom and at your own risk, and you
will not have any claims against our Company, the Joint Issue Managers, Bookrunners and
Underwriters.
THE OFFERING
25
Copies of this Prospectus, the Application Forms and envelopes may be obtained on request,
subject to availability, during office hours from:
DBS Bank Ltd.
12 Marina Boulevard, Level 46
Marina Bay Financial Centre Tower 3
Singapore 018982
DMG & Partners Securities Pte Ltd
10 Collyer Quay,
#09-08, Ocean Financial Centre
Singapore 049315
and where applicable, members of the Association of Banks in Singapore, members of the SGX-ST
and merchant banks in Singapore. A copy of this Prospectus is also available on the SGX-ST websitehttp://www.sgx.com and the Authority’s OPERA website athttp://opera.mas.gov.sg/ExtPortal.
The Public Offer will open at 7.00 p.m. on 4 December 2014 and will close at 12.00 p.m. on
9 December 2014 or such other period or periods as our Company may, in consultation with
the Joint Issue Managers, Bookrunners and Underwriters, at its absolute discretion decide,
subject to any limitations under all applicable laws. In the event a supplementary document
or replacement document is lodged with the Authority, the Offering will remain open for at
least 14 days after the lodgement of the supplementary or replacement prospectus.
Details of the procedures for application for the New Shares are set out in Appendix J of this
Prospectus.
INDICATIVE TIMETABLE FOR LISTING
The indicative timetable for the Public Offer and trading in our Shares is set out below for your
reference:
Indicative date/time Event
7.00 p.m. on 4 December 2014 Opening date and time for the Public Offer
12.00 p.m. on 9 December 2014 Closing date and time for the Public Offer
10 December 2014 Balloting of applications, if necessary (in the event of
an over-subscription for the Public Offer Shares)
Commence returning or refunding of application
monies to unsuccessful or partially successful
applicants
9.00 a.m. on 11 December 2014 Commence trading on a “ready” basis
16 December 2014 Settlement date for all trades done on a “ready” basis
on 11 December 2014
The above timetable is only indicative and is subject to change at our discretion, with the
agreement of the Joint Issue Managers, Bookrunners and Underwriters as it assumes that the
date of closing for the Public Offer will be 9 December 2014, the date of admission of our Company
to the Official List of the SGX-ST will be 11 December 2014, the SGX-ST’s shareholding spread
requirement will be complied with and the New Shares will be issued and fully paid-up prior to
THE OFFERING
26
11 December 2014. The actual date on which our Shares will commence trading on a “ready” basis
will be announced when it is confirmed by the SGX-ST. All dates and times referred to above are
Singapore dates and times.
The above timetable and procedure may be subject to such modifications as the SGX-ST may, at
its discretion, decide, including the decision to permit trading on a “ready” basis and the
commencement date of such trading. The commencement of trading on a “ready” basis will
be entirely at the discretion of the SGX-ST. All persons trading in our Shares before their
Securities Accounts with CDP are credited with the relevant number of Shares do so at the
risk of selling Shares which neither they nor their nominees, as the case may be, have been
allotted or are otherwise beneficially entitled to.
We may, at our discretion, with the agreement of the Joint Issue Managers, Bookrunners and
Underwriters, subject to all applicable laws and regulations and the rules of the SGX-ST, agree to
extend or shorten the period during which the Offering is open, provided that such period shall not
be shorter than two (2) Market Days.
In the event of any changes in the closure of the Public Offer or the time period during which the
Public Offer is open, we will publicly announce the same:
(i) through a SGXNET announcement to be posted on the SGX-ST’s website athttp://www.sgx.com; and
(ii) in one (1) or more major Singapore newspapers such as The Straits Times, The Business
Times and Lianhe Zaobao.
Results of the Public Offer including the allotment of the New Shares and balloting (in the event
of an over-subscription for the Public Offer Shares) will be provided through the channels in (i) and
(ii) above.
Investors should consult the SGX-ST announcement on the “ready” listing date on the Internet (at
the SGX-ST’s website athttp://www.sgx.com) or the newspapers, or check with their brokers on
the date on which trading on a “ready” basis will commence.
We reserve the right to reject or accept, in whole or in part, or to scale down or ballot any
application for the Public Offer Shares, without assigning any reason therefore, and no enquiry
and/or correspondence on our decision will be entertained.
THE OFFERING
27
DETAILS OF THE OFFERING
The Issuer : iFAST Corporation Ltd.
The Offering : 32,800,000 New Shares by way of the Public Offer and
the Placement, subject to the Over-Allotment Option.
The New Shares will, upon allotment and issue, rank pari
passu in all respects with our existing issued Shares.
Offering Price : S$0.95 for each New Share.
Purpose of the Offering : The purpose of the Offering is to secure the admission of
our Company to the Official List of the SGX-ST. Our
Directors believe that the listing of our Company and the
quotation of our Shares on the Official List of the
SGX-ST will enhance the corporate profile of our Group
locally and overseas and enable us to tap the capital
markets to fund the expansion of our operations.
The Offering will also provide members of the public, our
employees, business associates and those who have
contributed to the success of our Group with an
opportunity to participate in the equity of our Company.
The Public Offer : 2,800,000 Public Offer Shares offered to the public in
Singapore to subscribe for at the Offering Price.
The Placement : 30,000,000 Placement Shares by way of a placement to
investors, including institutional and other investors in
Singapore and outside the United States in reliance on
Regulation S.
Cornerstone Tranche : Concurrently but separate from the Offering, each of the
Cornerstone Investors has entered into a Cornerstone
Subscription Agreement with our Company to subscribe
for an aggregate of 19,000,000 Cornerstone Shares at
the Offering Price, conditional upon, inter alia, the
Management and Underwriting Agreement and the
Placement Agreement having been entered into and not
having been terminated pursuant to its terms on or prior
to the date of Listing.
The Cornerstone Shares will in aggregate constitute
approximately 7.4% of the total number of issued Shares
as at the date of Listing. The Cornerstone Shares
acquired by the Cornerstone Investors are not subject to
any lock-up restrictions in respect of their shareholding
interests in our Company.
THE OFFERING
28
In the event that any one (1) or more Cornerstone
Investors fails to pay for the Cornerstone Shares which
they have committed to subscribe, such Cornerstone
Shares will be reallocated to the Placement and the
Offering may still proceed and, if so, the subscribers of
the New Shares will still be required to pay for and
complete their subscription pursuant to the Offering.
Clawback and Reallocation : The New Shares may be re-allocated between the Public
Offer and the Placement at the discretion of the Joint
Issue Managers, Bookrunners and Underwriters in the
event of excess applications in one (1) and a deficit of
applications in the other.
Application for Public Offer
Shares under the Public Offer
: Investors applying for Public Offer Shares under the
Public Offer must follow the application procedures set
out in Appendix J of this Prospectus.
Applications must be paid for in Singapore dollars in
integral multiples of 1,000 Public Offer Shares subject to
a minimum application for 1,000 Public Offer Shares.
Over-allotment Option : In connection with the Offering, we have granted the
Stabilising Manager an Over-allotment Option
exercisable by the Stabilising Manager, in whole or in
part, on its own behalf and on behalf of the Joint Issue
Managers, Bookrunners and Underwriters on one or
more occasions, to subscribe and/or procure subscribers
for up to an aggregate of 3,280,000 Additional Shares
(which in aggregate is not more than 10% of the Offering)
at the Offering Price, from the Listing Date until the
earlier of (i) the date falling 30 days from the Listing
Date; or (ii) the date when the Stabilising Manager (or
persons acting on its behalf) has bought on the SGX-ST
an aggregate of 3,280,000 Shares, representing not
more than 10% of the Offering, to undertake stabilising
actions, solely to cover the over-allotment of Shares, if
any. The Additional Shares will, upon allotment and
issue, rank pari passu in all respects with the existing
issued Shares.
Unless we indicate otherwise, all information in this
Prospectus assumes that the Stabilising Manager does
not exercise the Over-allotment Option.
THE OFFERING
29
Stabilisation : In connection with the Offering, the Stabilising Manager
(or persons acting on behalf of the Stabilising Manager),
may, in its discretion, but subject always to applicable
laws and regulations, over-allot Shares or effect
transactions with a view to supporting the market price of
the Shares at a level higher than that which would
otherwise prevail in the open market. Such transactions
may be effected on the SGX-ST and other jurisdictions
where it is permissible to do so, in each case in
compliance with all applicable laws and regulations.
Such transactions, if commenced, may be discontinued
at any time by the Stabilising Manager without notice
(unless such notice is required by law) and shall not be
effected after the earlier of (i) the date falling 30 days
from the Listing Date or (ii) the date when the Stabilising
Manager or its appointed agent has bought on the
SGX-ST an aggregate of 3,280,000 Shares,
representing not more than 10% of the Offering, to
undertake stabilising actions solely to cover the over-
allotment of Shares, if any.
Listing Status : Our Shares will be quoted in S$ on the Mainboard of the
SGX-ST, subject to the admission of our Company to the
Official List of the SGX-ST and permission for dealing in
and for quotation of our Shares being granted by the
SGX-ST and the Authority not issuing a Stop Order.
Settlement : We expect to receive payment for all the New Shares
from the Placement and the Public Offer on or about 11
December 2014. We will deliver the global share
certificates representing the New Shares to CDP for
deposit into the Securities Accounts of successful
applicants on or about 11 December 2014. Please refer
to the section entitled “Clearance and Settlement” in this
Prospectus for more details.
Risk Factors : Investing in our Shares involves risks which are set out
in the section entitled “Risk Factors” of this Prospectus.
THE OFFERING
30
Based on the Offering Price, we will raise gross proceeds of approximately S$49.2 million from the
Offering and the Cornerstone Tranche (assuming the Over-allotment Option is not exercised). The
estimated net proceeds from the Offering and the Cornerstone Tranche (after deducting the
estimated expenses in relation to the Offering and the Cornerstone Tranche of approximately
S$4.6 million) will be approximately S$44.6 million. The estimated expenses incurred in relation
to the Offering and the Cornerstone Tranche will be borne by our Company.
We intend to use the proceeds from the Offering and the Cornerstone Tranche as follows:
Use of Proceeds
Estimated
amount
(S$ ’million)
Estimated amount
allocated for each
dollar of the gross
proceeds raised from
the Offering and the
Cornerstone Tranche
(cents)
As a percentage
of the gross
proceeds from the
Offering and the
Cornerstone Tranche
(%)
Mergers and
acquisitions strategy
(1)
27.2 55.3 55.3
Expansion of our
business in the Chinese
market
(1)
7.0 14.2 14.2
Enhancement of our
product capabilities,
IT and services
(1)
8.0 16.3 16.3
Working capital
purposes 2.4 4.9 4.9
Net Proceeds 44.6 90.7 90.7
Estimated expenses
incurred in connection
with the Offering
Professional fees 1.6 3.2 3.2
Underwriting and
placement commission 1.8 3.7 3.7
Miscellaneous
expenses (including
listing fees) 1.2 2.4 2.4
Total 49.2 100.0 100.0
Note:
(1) For further details, please refer to the section entitled “Prospects, Business Strategies and Plans” in this Prospectus.
USE OF PROCEEDS AND OFFERING EXPENSES
31
Assuming the Over-allotment Option is exercised in full, we will receive additional net proceeds
of approximately S$3.0 million which will be used for working capital purposes.
Pending the deployment of net proceeds as aforesaid, the net proceeds will be placed in short
term deposits with financial institutions or used to invest in bonds, unit trusts and/or short-term
money market instruments with risk and return profiles that our Directors may deem appropriate.
We will make periodic announcements on the use of net proceeds from the Offering and the
Cornerstone Tranche as and when the funds are materially disbursed, and provide a status report
on the use of proceeds in our annual report.
In the event that any part of our proposed use of net proceeds from the Offering and the
Cornerstone Tranche does not materialise or proceed as planned, our Directors will carefully
evaluate the situation and may reallocate the proceeds to other purposes and/or hold such funds
on short-term deposits with financial institutions or use such funds to invest in bonds, unit trusts
and/or short-term money market instruments with risk and return profiles that our Directors may
deem appropriate, for so long as our Directors deem it to be in the interest of our Company. Any
change in the use of the net proceeds will be subject to the listing rules of the SGX-ST and
appropriate announcements will be made by our Company on SGXNET.
In the opinion of our Directors, no minimum amount must be raised from the Offering and the
Cornerstone Tranche.
USE OF PROCEEDS AND OFFERING EXPENSES
32
In respect of the Period Under Review up to the Latest Practicable Date, we have declared and
paid dividends as follows:
FY2011 FY2012 FY2013
1 January 2014 up to the
Latest Practicable Date
Dividend per Share
(1)
(cents) 0.44 0.54 1.98
(2)
4.70
Notes:
(1) The Dividend per Share is calculated on a post Sub-division basis.
(2) Excluding the interim dividend by way of a distribution in specie during FY2013. Please refer to the section entitled
“Restructuring Exercise” of this Prospectus for further details on the distribution in specie during FY2013.
We may declare dividends by ordinary resolution of our Shareholders at a general meeting, but
we may not pay dividends in excess of the amount recommended by our Directors. The
declaration and payment of dividends will be determined at the sole discretion of our Directors,
subject to the approval of our Shareholders. Our Directors may also declare an interim dividend
without the approval of our Shareholders. In making their recommendations, our Directors will
consider, inter alia, our retained earnings, expected future earnings, operations, cash flow, capital
requirements, general business and financing conditions, as well as other factors which our
Directors may determine appropriate.
We currently do not have a fixed dividend policy.
However, our Directors intend to recommend and distribute dividends of 60% of our net profit after
tax (excluding exceptional items) for 4Q2014, and dividends of 60% of our net profit after tax
(excluding exceptional items) for FY2015 (collectively, the “Proposed Dividend”), as we wish to
reward Shareholders for participating in our Group’s growth. However, investors should note that
all the foregoing statements, including the statement 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 or the dividends declared and paid by our subsidiaries as an indication of our
Group’s future dividend policy. No inference should be or can be made from any of the foregoing
statements as to our actual future profitability or ability to pay dividends. Please also see the
section entitled “Risk Factors – We may not be able to pay dividends in future” in this Prospectus
for the risk factor relating to our ability to declare dividends in relation to the Shares.
For information relating to taxes payable on dividends, please refer to Appendix I of this
Prospectus.
DIVIDEND POLICY
33
Singapore
Currently, no foreign exchange control restrictions are in force in Singapore.
Hong Kong
There are currently no foreign exchange control restrictions in Hong Kong or similar laws,
decrees, regulatory or other requirements that may affect the following:
(a) The ability to transfer funds by or to our Company in the form of repatriation of capital and
remittance of profits;
(b) The availability of cash and cash equivalents for use by our Company; and
(c) The remittance of dividends, interest or other payments to holders of our Company’s
securities provided that dividends of a Hong Kong private company can only be distributed
out of profits available for distribution, which generally refer to its accumulated, realised
profits, so far as not previously used by distribution or capitalisation, less its accumulated,
realised loss, so far as not previously written off in a reduction or reorganisation of capital.
Malaysia
A non-resident is free to repatriate any amount of its own funds in Malaysia at any time, including
capital, divestment proceeds, profits, dividends, rental, fees and interest arising from investment
in Malaysia, provided that the repatriation is made in foreign currency.
As our Company is neither incorporated nor registered in Malaysia, we are a non-resident as
defined under Section 213 of the Malaysian Financial Services Act 2013 Act 758 (“FSA”), for the
purposes of the Foreign Exchange Administration notices (“FEA Notices”) issued pursuant to the
FSA.
Under Subsection 214(2) of the FSA, no person shall undertake or engage in any transaction set
out in Schedule 14 (“Schedule 14”) except with the written approval of Bank Negara Malaysia
(“Bank”). Paragraph 3 of the Schedule 14 prohibits, the making of any payment by a person to
another person including a payment:
(a) to or for the credit of a non-resident;
(b) by a resident or a non-resident;
(c) as a consideration for or in association with:
(i) the receipt of a payment or the acquisition of a property, outside Malaysia, by any
person; or
(ii) the creation in favour of, or the transfer to, any person, of a right to receive a payment
or to acquire a property, outside Malaysia;
(d) under a judgment or order of any court or an award of any arbitrator or under any written law
in favour of a non-resident, or a resident outside Malaysia; or
(e) for settlement of property in favour of a non-resident, or a resident outside Malaysia,
EXCHANGE CONTROLS
34
other than:
(A) payment in ringgit between residents in Malaysia; and
(B) payment in foreign currency between non-residents outside Malaysia.
Paragraph 4 of the Schedule 14 further prohibits, the receiving of any payment in paragraph 3 of
the Schedule 14.
Under Notice 4 (which is one (1) of the series of FEA Notices regulating payments made in any
foreign currency or Ringgit Malaysia), a resident is permitted:
(a) to pay to a non-resident any amount in foreign currency for any import of goods and services;
(b) to pay to a non-resident for services such as salaries, wages, commissions and fees
(rendered in Malaysia), subject to payments being made in foreign currency when remitting
abroad;
(c) to pay to a non-resident profits, dividends, fees, rental and royalty, subject to payments being
made in foreign currency when remitting abroad;
(d) to pay to a non-resident for the purchase of a Ringgit asset, subject to payments being made
in foreign currency when remitting abroad;
(e) to pay in foreign currency to residents to settle any security, Islamic security, financial
instrument or Islamic financial instrument approved by the Bank; or
(f) to pay in foreign currency to residents to settle a commodity murabahah transaction through
a resident commodity trading service provider.
A resident individual is allowed to make or receive payment in foreign currency, for any purpose
to or from an immediate family member.
Further to the relaxation of the foreign exchange administration rules, Notice 3 of the FEA Notices
provides, that residents (companies on a corporate group basis) without domestic Ringgit credit
facilities are free to invest any amount abroad. Residents (companies on corporate group basis
or individuals) with domestic Ringgit credit facilities are also allowed to fund their investment
abroad as follows:
(a) any amount of own foreign currency funds retained onshore or offshore;
(b) up to RM1 million equivalent in aggregate per calendar year for individuals; and
(c) up to RM50 million equivalent in aggregate per calendar year for resident corporations.
With effect from 30 January 2004, the Bank abolished the requirement for resident payors to
complete the “Form P” in hard copy for payments to non-residents exceeding RM50,000.
However, banks would still require similar information as those required in Form P as they have
an obligation to report to the Bank, including their own payments, through an online system called
the International Transactions Information System (“ITIS”). ITIS was implemented by the Bank on
1 January 2004, among others to record payments between residents for payments between
residents and non-residents through the banking system. With effect from 1 October 2007, the
reporting threshold was increased from RM50,000 to RM200,000.
EXCHANGE CONTROLS
35
A “resident” under the FSA means:
(a) a citizen of Malaysia, excluding a person who has obtained permanent resident status in a
country or territory outside Malaysia and is residing outside Malaysia;
(b) a non-citizen of Malaysia who has obtained permanent resident status in Malaysia and is
ordinarily residing in Malaysia;
(c) a body corporate incorporated or established, or registered with or approved by any
authority, in Malaysia;
(d) an unincorporated body registered with or approved by any authority in Malaysia; or
(e) the Government or any State Government.
Prior permission of the Bank is required for a resident to pay a non-resident or agent of
non-resident relating to derivative products or futures contracts denominated in foreign currency
offered by the non-resident not transacted on a derivatives market outside Malaysia.
China
Restrictions on Conversion of RMB into Foreign Currency
The principal regulation governing foreign currency exchange in China is the Foreign Exchange
Administration Rules which was issued by the State Council in January 1996, became effective in
April 1996 and was amended in January 1997 and August 2008. Under these rules, RMB is freely
convertible for payments of current account items, including trade and service related foreign
exchange transactions and dividend payments, but not for capital account expenses, including
direct investment, loan or investment in securities outside China. RMB may only be converted for
capital account expenses once the prior approval of the SAFE has been obtained. Under the
Foreign Exchange Administration Rules, foreign-invested enterprises (“FIEs”) in China may
purchase foreign exchange without the approval of the SAFE for trade and service-related foreign
exchange transactions by providing commercial documents evidencing such transactions to
commercial banks which are allowed to engage in foreign exchange business.
According to the Regulations on the Administration of Settlement, Sale and Payment of Foreign
Exchange as issued on 20 June 1996, the Rules for Implementation of Guideline of Regulations
on Service Trade as issued on 18 July 2013, and the Announcement on Tax Filing of Payment
Outside of the PRC Relating to Service Trade and Other Items issued on 9 July 2013, a FIE may
convert RMB-denominated profits into foreign exchange and remit the same offshore by
presenting certain documents to commercial banks which are allowed to engage in foreign
exchange business, without the prior approval of, or registration with, the SAFE. Such documents
include the (i) Audited Financial Report on relevant year issued by certified accounting firms, (ii)
resolution(s) of the board of directors on profit distribution, (iii) the latest capital verification report,
and (iv) the Tax Filing Form for Payment Outside of the PRC for Service Trade and Other Items
required for a single payment equivalent to or over US$50,000.
Save as disclosed above, there is no restriction on the ability of our subsidiaries or our associated
company to transfer funds to our Company in the form of cash dividends, loans or advances.
EXCHANGE CONTROLS
36
The following summary is qualified in its entirety by, and is subject to, the more detailed
information and financial statements (including the notes thereto) appearing elsewhere in this
Prospectus. Terms defined elsewhere in this Prospectus have the same meanings when used
herein. Prospective investors should carefully consider all the information presented in this
Prospectus, particularly the matters set out in the section entitled “Risk Factors” before making an
investment decision.
INTRODUCTION
We were incorporated in Singapore on 11 September 2000 as “Fundsupermart Holdings Pte. Ltd.”
and changed our name to “iFAST Corporation Pte. Ltd.” on 26 March 2003. Since our
incorporation in 2000, we have expanded our business to three (3) other jurisdictions in Asia,
namely, Hong Kong in 2007, Malaysia in 2008 and China in 2014. Our net revenue has grown from
S$25.2 million in FY2011 to S$31.6 million in FY2013, while our average AUA has grown from
S$3.88 billion in FY2011 to S$5.13 billion as at end September 2014.
Our core business is embodied by the name of our Company, “iFAST”, which stands for
“Investments and Funds Administration, Services and Transactions”. Specifically, we are an
internet-based Investment Products distribution and administration platform and provide a
comprehensive range of services, including the execution of investment transactions, investment
administration, research and investment trainings, software tools, IT services and backroom
functions to more than 150 FAs and financial institutions and more than 5,000 FA representatives
in the jurisdictions in which we operate.
Since our incorporation, we have steadily built and established a reputation for providing easy
access to investment products, namely, funds (including unit trusts) and SGS Bonds in Singapore,
funds (including unit trusts) in Malaysia, and funds (including unit trusts) and corporate bonds in
Hong Kong as well as providing a Platform which enables investors to transact and invest at
competitive rates. iFAST Financial, our wholly-owned subsidiary, is also an investment
administrator under the CPF Investment Scheme in Singapore.
Via our Platform, we provide a whole range of services to FAs, financial institutions and their
respective clients and also enable DIY Investors to make informed investment decisions and
execute online investment transactions by equipping them with a wide range of user-friendly
investment and planning tools. We primarily conduct our business in two (2) business divisions,
namely, the B2B Business and the B2C Business divisions.
B2B Business
We conduct our B2B Business via our iFAST Financial Website, iFAST Pensions Website, and iGP
Website which services financial institutions and FAs, companies seeking to administer pension
schemes for their employees, and HNW clients respectively. We provide our B2B Customers with
an efficient and reliable Platform to handle their back-end transactional and operational needs. As
part of our B2B Business, we also provide regular research updates on Investment Products, as
well as Internet-based tools and mobile-friendly applications for financial institutions and FAs to
utilise in their portfolio and investment planning.
OVERVIEW OF OUR GROUP
37
B2C Business
We conduct our B2C Business via our Fundsupermart.com Website which services DIY Investors
seeking alternative investment channels that provide them with more control in the decision-
making and execution process of investing. We established our B2C Business in Singapore in
2000 and we launched our B2C Business in Hong Kong in 2007 and subsequently, Malaysia in
2008. We provide our B2C Customers with a reliable website which offers Investment Products,
Investment Products research, portfolio research, tools for analyses of Investment Products, a
strong emphasis on customer service, and a competitive and transparent fee structure.
OUR COMPETITIVE STRENGTHS
We are a leading and established funds and investments distribution platform in Singapore,
Malaysia and Hong Kong
From our discussions and checks with our Suppliers and B2B Customers who are FAs, we
understand that based on our market share of AUA and investment transactions, we are a leading
and established funds and investments distribution platform, providing a range of services
including distribution of Investment Products, investment administration, execution of
transactions, research and investment trainings, software tools, IT services and backroom
functions to more than 150 FAs and financial institutions in Singapore, Malaysia and Hong Kong.
In addition, according to independent asset management research firm, Cerulli Associates Asia
Pte Ltd (“Cerulli Associates”), our Group is a leading distribution platform among independent
financial advisory firms and the online channel (DIY Investors) in Singapore. For further details,
please refer to the section entitled “Industry Overview – Investment platforms in Asia ex-Japan:
History and growth potential” in this Prospectus. The expansion in our business in terms of AUA
and the size of our customer base has given us a certain scale which benefits our Customers.
Our business relationships with a large number of Suppliers mean that we can offer a wide range
of Investment Products to our B2B and B2C Customers. With our Suppliers, many of whom are
international fund houses, and over 1,800 Investment Products (including more than 1,600 funds)
distributed in our existing markets, our Customers can rely on us as a one-stop investment
platform which provides a wide range of Investment Products for their financial planning.
In addition, we believe the scale of our operations allows us to work out a more efficient fee
sharing structure with our Suppliers. This translates to cost-savings to our Customers.
Furthermore, it will be more convenient and efficient for B2B Customers to use our Platform
instead of entering into individual distribution agreements with each product provider. Individually,
B2B Customers may find it more difficult to obtain the same fee structure from product providers
which we have obtained.
Our B2B and B2C Businesses have received recognition for the quality of the services we provide.
We have received a number of awards over the years. In November 2008, we came in second at
the Enterprise 50 Awards 2008, an event that was jointly organized by KPMG and The Business
Times, improving from ninth position in 2007. In August 2009, at The Best Practice Financial
Services Award 2009, which was organised by Benchmark Magazine and Best Practice
Management Magazine, iFAST HK won the “Fund Platform” award. In December 2010, iFAST
Financial (HK) received the “Best-in-Class” award in the “Advisers Choice of the Year” category.
In December 2011, at the Benchmark Wealth Management Awards 2011, iFAST HK received the
OVERVIEW OF OUR GROUP
38
“Best-in-Class” award in the “Platform Provider of the Year – Professional” category. In November
2013, at the Benchmark Wealth Management Awards 2013, iFAST HK was named “Outstanding
Achiever” in the “Investment Platform – Independent” category.
We are able to stay nimble and react to changes in the markets
We believe our organisational structure is relatively flat and this makes us more efficient in our
decision making. Being able to stay nimble means we are able to roll out at a fast rate, new
initiatives that we believe can serve our Customers better. If our B2B Customers request for
customised solutions, we believe we are able to respond with these solutions promptly. For
example, we were able to create a customised mobile application for tablets within four (4) months
of a request from one of our customers. Besides our in-house IT resources, we have a team of
business development members who are proactively working with our B2B Customers to find
solutions to their business issues. If regulations require changes in our business, we believe we
are able to effect the necessary changes quickly. We are also able to roll-out new and innovative
services to B2C Customers fairly fast. An example is the launch of our mobile application which
provides our users with various tools and allows our users to keep in touch with markets and
Investment Products within a relatively short design time of four (4) months.
We have a scalable business model
We are able to reach out to more customers and grow our AUA by leveraging on our
Internet-based model and representatives from various FAs and financial institutions in the
jurisdictions in which we operate, without employing a large in-house sales team. We have
focused on building our core in-house capabilities, including IT, operations and settlement, client
services, and research functions. Our proprietary IT and operational system is built to be scalable,
and our Platform, which is Internet-based, can be customised and upgraded by our in-house IT
staff to scale with our growing AUA, so that we can handle higher transaction volumes arising from
a larger customer base as well as a higher AUA, without significant increases in our operating
costs. As such, our net revenue tends to grow at a higher rate than our operating costs. With our
strong IT capabilities and proprietary technology, our Group is able to control our operating costs
and keep it relatively low. In FY2011, FY2012, FY2013 and 9M2014 (annualised), our net
revenue/average AUA ratio was 0.651%, 0.672%, 0.708% and 0.745% respectively, whereas the
operating expenses/average AUA ratio was lower at 0.588%, 0.573%, 0.529% and 0.536%
respectively.
Further, the development of our proprietary Platform has minimised our reliance on third-party
developers, reduced our operating costs and given us the flexibility to innovate and scale our
business.
Our Platform is established in Singapore, Malaysia and Hong Kong and we believe that it can be
easily customised for other markets.
We have a cost advantage
We have focused on building our core capabilities in-house and we have derived cost savings as
our in-house capabilities reduce our need to outsource various functions to external parties. The
core capabilities we focus on building in-house include our IT, operations and settlement, client
services, and research functions. It will not be cost effective for a competitor to set up a similar
platform because of the high costs and specific industry knowledge and experience required for
OVERVIEW OF OUR GROUP
39
the IT infrastructure and system. We are also able to expand to other markets on a cost-
competitive basis as we own our Platform, and without the need for additional licensing and the
payment of service fees to third parties.
We possess strong IT capabilities and proprietary technology
We believe our IT capabilities are important in our ability to deliver reliable, quick and innovative
services to our Customers. We have been aided by the technological improvements which have
helped to lower our costs and improve the speed at which we deliver services to our Customers.
We believe our focus on continuously improving our websites and mobile applications, the ease
of navigation and a user-friendly interface will help us remain competitive in both our B2B and B2C
Business divisions.
Additionally, having our own in-house IT capabilities means we are able to control our operating
costs and keep it relatively low. Our in-house IT capabilities also allow us to develop and roll-out
new IT initiatives quickly.
Besides providing various tools on our websites to B2B and B2C Customers, such as “Funds
Selector” and “Chart Centre” for the comparison of funds, we have also created mobile
applications for our Customers. For instance, our B2C Customers can download our mobile
application, “FSM Mobile”, free and make use of the tools to research and analyse funds, as well
as keep themselves updated on more recent funds-related and markets-related news and view
their holdings. Our B2B Customers can also read articles and analyse funds on iPad mobile
applications.
Our efforts to stay innovative in the provision of our IT services have been recognised in recent
years. In August 2009, Fundsupermart.com (HK) won the “Online Usability” award at The Best
Practice Financial Services Award 2009, which was organised by Benchmark Magazine and Best
Practice Management Magazine. In December 2010, Fundsupermart.com (HK) was named
“Outstanding Achiever” award in the “Online Capabilities Award” at the Benchmark Wealth
Management Awards 2010. In December 2011, Fundsupermart.com (HK) received the
“Best-in-Class” award in the “Best in Online Usability” category at the Benchmark Wealth
Management Awards 2011. In November 2013, Fundsupermart.com (HK) received the
“Best-in-Class” award in the “Online Usability – Independent” category at the Benchmark Wealth
Management Awards 2013. In 2014, our Company was awarded a Silver award in the “Most
Informative Use of Mobile” category at the Mob-Ex Awards.
We offer a range of services that assists our Customers in their business
We have focused on offering a range of services with the intention of enabling our B2B Customers
who are FAs to focus on their core business. One such service that we provide is the efficient
calculation and settlement of upfront commissions and recurring wrap fees and trailer fees for B2B
Customers who are FAs. Our execution and settlement system typically processes the fees on a
quarterly basis and the fees would subsequently be paid to the B2B Customers who are FAs. A
B2B Customer who is an FA can focus on its business by leaving the execution and settlement of
transactions, and collection and processing of fees, to us.
We have also dedicated efforts to help our B2B Customers stay in touch with global trends in the
wealth management industry and the changes to financial regulations. Our “iFAST Global Wealth
Advisers Symposium” brings together wealth advisers from the markets in which we operate, as
well as the industry practitioners from the wealth management industry (for example, from markets
such as the UK and Australia, where investment platforms play an important role in the wealth
OVERVIEW OF OUR GROUP
40
management industry), to share their experiences and views on best business practices as well
as the investment and regulatory trends in the various markets. The last three (3) symposiums
were held in Switzerland, US and Greece.
Our B2C Customers can read articles written by our in-house research team on investment
products and financial planning. Our B2B Customers can also stay updated with research views
via regular seminars that our research team conducts. Our research members provide views in the
media, including ChannelNewsAsia and Lianhe Zaobao in Singapore; iMoney, am730, ET Net
Chinese, ATV, Cable TV, Metro Webtv and Metro Finance Column in Hong Kong; and Busy
Weekly, Yahoo!, and Borneo Post in Malaysia.
Our experienced and committed key management team
Our operations are led by our Chairman and CEO, Mr. Lim Chung Chun and our Group COO, Mr.
Wong Soon Shyan, who each has more than 20 years of working experience in the investment
industry. The experience and in-depth knowledge of our key management team have enabled our
Group to understand the industry, anticipate market trends, and address the needs of customers.
Mr. Lim Chung Chun is the co-founder of our Group as well as a Controlling Shareholder of our
Company. Mr. Wong Soon Shyan has been with our Group since 2000. Both Mr. Lim Chung Chun
and Mr. Wong Soon Shyan have steered our Group through various economic crises. They have
been actively driving the business and our Group’s expansion in various jurisdictions. The
experience and business reputations of Mr. Lim Chung Chun and Mr. Wong Soon Shyan have
assisted us to establish close working relationships with our partners in the industry, including
fund houses and financial institutions, which have been instrumental in the success and growth
of our operations.
OUR CONTACT DETAILS
Our registered address and principal place of business is 10 Collyer Quay, #26-01 Ocean
Financial Centre, Singapore 049315. Our telephone and fax numbers are +65 6535 8033 and
+65 6223 4839 respectively. Our company registration number is 200007899C. Our website
address ishttp://www.ifastcorp.com. Our B2B Business’ and our B2C Business’ websites can also
be accessed via www.fundsupermart.com, www.ifastfinancial.com, www.ifastpensions.com and
www.ifastgp.com. Information contained in our websites does not constitute part of this
Prospectus and should not be relied on.
OVERVIEW OF OUR GROUP
41
Prospective investors should carefully consider and evaluate each of the following risk factors
(which are not intended to be exhaustive) and all other information set forth in this Prospectus
before deciding to invest in our Shares. Some of the following risk factors relate principally to the
industry in which our Group operates and the business of our Group in general. Other risk factors
relate principally to general social, economic, political and regulatory conditions, the securities
market and ownership of our Shares, including possible future sales of our Shares.The following
does not state risks unknown to us now but which could occur in the future, and risks which we
currently believe to be immaterial, which could turn out to be material. Should any of these risks
and uncertainties develops into actual events, our business, financial condition, results of
operations and prospects could be materially and adversely affected. In such cases, the price of
our Shares could decline due to any of these risks and uncertainties and you may lose all or part
of your investment in our Shares.
This Prospectus also contains forward-looking statements having direct and/or indirect
implications on our future performance. Investors should also consider the information provided
below in connection with the forward-looking statements in this Prospectus and the warning
regarding forward-looking statements at the beginning of this Prospectus. Our actual results may
differ materially from those anticipated by these forward-looking statements due to certain factors,
including the risks and uncertainties faced by us, as described below and in the sections entitled
“Management’s Discussion and Analysis of Results of Operations and Financial Position” and
elsewhere in this Prospectus.
RISKS RELATING TO OUR INDUSTRY, BUSINESS AND OPERATIONS
We operate in a highly regulated industry and our business may be affected by changes in
government regulations relating to the securities and financial services industry in
Singapore and in the other jurisdictions in which we operate
The securities and financial services industry is highly regulated and our business is subject to
regulation under various applicable laws, regulations, rules, guidelines and codes in Singapore
and in the other jurisdictions in which we operate or any extraterritoriality legislation that we might
be subject to as our business is conducted via the Internet (the “Applicable Legislation”). For
example, the laws and regulations we are subject to in Singapore include the SFA (in respect of
capital markets activities), the FAA (in respect of financial advisory services), the subsidiary
regulations promulgated under the SFA and the FAA and directions and guidelines issued by the
MAS. In Hong Kong and Malaysia, we are regulated by the SFC and SC respectively. For further
details of the Applicable Legislation, please refer to the section entitled “Government Regulations
and Licensing” in this Prospectus.
We may be subject to investigations, enforcement actions or potential liabilities under the
Applicable Legislation and if we are found to be in contravention of any of the Applicable
Legislation, the penalties or adverse actions taken against us could have a material adverse effect
on our business, financial condition, results of operations and prospects. For further details,
please see the risk factors entitled “We have been subject to and expect to continue to be subject
to regulatory inspections and audits” and “We are subject to ongoing regulatory investigation by
SFC”.
RISK FACTORS
42
Our business is subject to evolving laws and regulations relating to the securities and
financial services industry, user privacy, data protection, and other related matters
We are subject to a variety of laws and regulations in Singapore and in other jurisdictions in which
we operate that involve matters related to our business, including but not limited to securities, fee
structure, commissions, user privacy, data protection, intellectual property, competition, consumer
protection, taxation, and online payment services. In addition, the application and interpretation of
these laws and regulations may be uncertain, particularly in relation to new legislation. New or
revised legislation can also be costly to comply with and can delay our operations or increase our
operating costs, decrease our fees and/or commissions, eliminate our ability to charge fees and/or
commissions, require significant management time and attention, and subject us to claims or other
remedies, including fines or demands that we modify or cease existing business practices. Any
claims, increased costs, reduction of or inability to collect fees and/or commissions, obligations for
compliance, changes to our business practices may materially and adversely affect our business,
financial condition, results of operations and prospects.
In addition, there is no assurance that our interpretation of the applicability of any existing or new
laws, rules, regulations or policies will not differ from the interpretation of the regulators or the
authorities in the jurisdictions in which we operate. If we are found non-compliant in respect of any
licensing, registration or other legal or regulatory requirements, we may be subject to negative
consequences, including monetary fines or the revocation of licences, that may materially and
adversely affect our business, financial condition, results of operations and prospects.
We have been subject to and expect to continue to be subject to regulatory inspections and
audits
We periodically receive inquiries from regulators regarding our compliance with laws, regulations
and other matters such as statutory notices and requirements and licences conditions. For
example, both MAS in Singapore and SFC in Hong Kong have conducted inspections and audited
aspects of our business including, but not limited to, our products, services, business activities,
operations, compliance and practices. We expect to continue to be the subject of regulatory audits
and inspections in the future by regulators in Singapore and in the other jurisdictions in which we
operate. It is possible that a regulatory inquiry might result in changes to our policies or practices.
Any finding by a regulator of our non-compliance or violation of regulations, legislation and orders
could subject us to warnings, reprimands, substantial monetary fines, revocation of licences and
other penalties that could materially and adversely affect our business, financial condition, results
of operations and prospects. In addition, it is possible that future orders issued by, or enforcement
actions initiated by regulatory authorities could require us to change our business practices or
cause us to incur substantial costs in a manner that could have a material adverse effect on our
business, financial condition, results of operations and prospects.
While we have taken steps and implemented procedures with regard to the findings and
recommendations of such inspections to ensure compliance with the applicable laws, regulations,
guidelines and/or notices, there is no assurance that these measures will adequately address the
current and/or any future breaches and/or non-compliance with the applicable laws, regulations,
guidelines and/or notices to the satisfaction of the relevant authorities. In the event we are not
able to address the concerns of the relevant authorities and our licences are suspended or
revoked, there could be a material adverse impact on our business, financial condition, results of
operations and prospects. For details of regulatory inspections and investigations by the relevant
authorities, please refer to the section entitled “Government Regulations and Licensing –
Regulatory Inspections and Investigations” in this Prospectus.
RISK FACTORS
43
We are subject to ongoing regulatory investigation by SFC
Our subsidiary, iFAST HK is a holder of a licence for Type 1 regulated activities (Dealing in
Securities) and Type 4 regulated activities (Advising on Securities) and is subject to periodic SFC
inspections. iFAST HK and two (2) of its responsible officers (both of whom are neither Directors
nor Executive Officers) are subject to an ongoing regulatory investigation by SFC under Section
182(1) of the SFO as of the Latest Practicable Date. Any findings of our non-compliance,
deficiencies or violation of regulations, legislation and orders could subject iFAST HK and its key
employees to warnings, reprimands, substantial monetary fines and other penalties or
proceedings that could materially and adversely affect our business, financial condition, results of
operations and prospects. In addition, it is possible that future orders issued by, or enforcement
actions initiated by the SFC could require us to change our business practices or cause us to incur
substantial costs that may result in a materially adverse effect on our business, financial condition,
results of operations and prospects. Our business, financial condition, results of operations and
prospects may also be materially and adversely affected if the SFC suspends or revokes iFAST
HK’s licence for Type 1 and/or Type 4 regulated activities. Please see the sections entitled
“Government Regulations and Licensing” and “General and Statutory Information –
Miscellaneous” for further details on the SFC investigation.
Our Customers, Suppliers and us operate in the securities and financial services industry
and a changing regulatory landscape in such industry could alter our relationships
The securities and financial services industry has been subject to increasing and changing
regulations in recent years. We derive substantially all of our revenue from the provision of
Investment Products and services to our Customers. Changes in the regulatory conditions of the
securities and financial services industry in Singapore and in other jurisdictions in which we
operate could directly affect our Customers, our Suppliers and us as well as alter the relationship
between us and our Suppliers and Customers in a manner that could materially and adversely
affect our business, financial condition, results of operation and prospects. For example, our
Customers, and Suppliers’ incentive for dealing with us and the supply or demand for our
Investment Products and services could be altered by changes in regulations and we could also
be made to limit or alter our range of Investment Products or services to comply with regulatory
requirements. Such changes could materially and adversely affect our business, financial
condition, results of operation and prospects.
Our business may be affected by any revocation, suspension or non-renewal of the
licences and permits held by our licensed entities in Singapore and the other jurisdictions
in which we operate
We are required to obtain various licences and permits in order to operate and these licences and
permits are subject to the fulfilment of conditions stipulated in them and/or compliance with
relevant laws and regulations under which such licences and permits are issued. In addition, some
of our licences and permits are subject to annual or periodic renewals. If any of our licences or
permits are revoked or suspended, or if we are unable to renew these licences or permits in a
timely manner or at all, all or part of our operations may have to be suspended or ceased. For
details of our licences, please refer to the section entitled “Government Regulations and
Licensing” in this Prospectus.
RISK FACTORS
44
Our subsidiary, iFAST Financial is a holder of a CMS Licence and FA Licence and is subject to
periodic MAS inspections which may give rise to enforcement actions such as supervisory
warnings, reprimands or fines for breaches or non-compliance with the relevant regulations in
Singapore. As a licensed entity, there is also a risk of iFAST Financial’s licence being suspended
or revoked by the MAS for non-compliance. We derive a substantial portion of our revenue and
profits from iFAST Financial and the suspension or revocation of iFAST Financial’s licence could
have a material adverse effect on our business, financial condition, results of operations and
prospects. For information on past enforcement actions, please refer to the section entitled
“Government Regulations and Licensing” in this Prospectus.
Similarly, our licensed entities iFAST Capital Malaysia in Malaysia, and iFAST HK and IPS HK in
Hong Kong are subject to licensing conditions and inspections and supervision by the SC and
FIMM in Malaysia and the SFC and MPFSA in Hong Kong.
Further, any change to current laws and regulations, or the introduction of new laws and
regulations may have a material adverse impact on our business, financial condition, results of
operations and prospects. For details of our licences, please refer to the section entitled
“Government Regulations and Licensing” in this Prospectus.
We face intense competition in our business
We face intense competition in our business, both as a provider of Investment Products and an
Internet-based investment platform for such Investment Products because we believe the
securities and financial services industry is characterised by the continuous roll-out of new
investment products and technological infrastructure.
In relation to the Investment Products offered on our Platform, we face competition from other
players in the securities and financial services industry such as banks, FAs and insurance
companies who provide other investment products which our Customers could invest in as
opposed to investing in the Investment Products offered on our Platform. If our Customers or
potential Customers view our competitors’ investment products as superior to those offered on our
Platform, such Customers or potential Customers could withdraw their investment(s) with us
and/or make new investments with our competitors or choose not to invest in the Investment
Products offered on our Platform respectively. This will have a negative impact on our AUA.
Competition also arises from existing and new investment platform service providers. While we
believe that there are no dominant players with an independent investment platform similar to ours
which serves both the B2B and B2C market segments in Hong Kong and Malaysia, we do face
competition from (i) existing investment platform providers who compete with us in certain aspects
of our business (for example, compete with our B2B Business or our B2C Business); and (ii) new
investment platform service providers. If we are unable to compete effectively and successfully
against the new entrants and existing competitors, our business, financial condition, results of
operations and prospects could be adversely affected. For more details of our competitors, please
refer to the section entitled “Our Business – Competition” in this Prospectus.
We may not be able to compete effectively with some of our competitors which may have greater
financial, technical and marketing resources, stronger public relations expertise and longer
operating track records than our Group. These competitors may also have the ability to offer more
competitive pricing, adapt quicker to new or emerging technologies, respond faster to changes in
customer preferences and devote more resources to the promotion of their investment products
and/or services than us.
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Additionally, as our Platform is a substantial part of our business, we have to continue to develop
and enhance our Platform in order to remain competitive. Such development or enhancement may
require us to acquire additional equipments and software and engage independent consultants
and developers. Please refer to the section entitled “Use of Proceeds and Offering Expenses” for
additional information on our intended use of proceeds for the enhancement of our product
capabilities, IT and services. There is no assurance that we will be able to continue to design,
develop, implement and maintain a competitive Platform in a cost-effective manner. As a result,
we face the risk of our customers migrating to alternative investment platforms or services with
superior technologies or competitive pricing. Inability on our part to produce or procure a
competitive Platform, any interruption to or decline in the performance of our Platform or any
increase in costs arising from the development or enhancement of our Platform could have a
material adverse effect on our business, financial condition, results of operations and prospects.
Our recurring revenue may be affected by a reduction in our Trailer Fees, Platform Fees,
Wrap Fees and/or Assets Under Administration
Our recurring revenue accounted for 73.3%, 77.6%, 70.1% and 68.2% of our Group’s revenue in
FY2011, FY2012, FY2013 and 9M2014, respectively. Our recurring revenue comprises Trailer
Fees, Platform Fees and Wrap Fees, which are calculated based on a percentage of average AUA
of our Investment Products supplied by our Suppliers. We earn Trailer Fees from our Suppliers
which are negotiated separately with each of our Suppliers. Each of the distribution agreements
we enter into with our Suppliers are for an indefinite term but are subject to termination clauses
which can be triggered by events which include the loss of our licence and insolvency. None of the
termination clauses in such distribution agreements make reference to the shareholdings of our
Shareholders and/or our Directors. These distribution agreements do not provide for a fixed Trailer
Fee, which is to be agreed between us and each of our Suppliers. The distribution agreements
also do not provide for regular or periodic review of Trailer Fees. Factors that affect the
determination of Trailer Fees include our business volume, AUA, our relationship with the relevant
Supplier and the support and services we can provide to the Supplier. For example, a larger
business volume and AUA value tends to lead to higher Trailer Fees.
The attractiveness of the Investment Products our Customers invest in via our Platform depends
on, amongst other factors, their investment performance, which is not within our control. For
example, investors may withdraw or reduce their investments when markets are volatile or
economic conditions are unfavourable or when their investments objectives are reached.
Significant or prolonged underperformance of our Investment Products may negatively impact the
value of our AUA. For more details on our fee structure, please refer to the section entitled
“Management’s Discussion and Analysis of Results of Operations and Financial Position – Our
key performance drivers” of this Prospectus.
There is no assurance that we will be able to grow or maintain our AUA or that we will continue
to receive Trailer Fees from our Suppliers at the agreed rate or at all, or that we will continue to
receive Wrap Fees from our adviser-assisted investors, or that we will continue to receive Platform
Fees from our adviser-assisted investors and DIY investors. The reduction or cessation of Trailer
Fees we receive from our Suppliers, the reduction or cessation of Wrap Fees from our
adviser-assisted investors, the reduction or cessation of Platform Fees from our adviser-assisted
investors and DIY investors, and/or the reduction of our AUA would either alone or in the
aggregate negatively impact our recurring revenue and could have a material adverse effect on
our business, financial condition, results of operations and prospects.
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46
In addition, our Group’s revenues are dependent on the performance and value of our AUA which
may be materially and adversely affected by economic instability or a prolonged economic
downturn in the jurisdictions in which we operate, regionally, or globally. Fluctuations in financial
markets for example, equity markets, may adversely affect the performance and value of our AUA
and investor confidence. A sudden or sustained deterioration of the financial markets or
investment market conditions may prompt investors to sell investments held through our Platform.
Additionally, negative sentiment surrounding the financial markets may cause potential investors
to be less willing to make new investments and there is no assurance that we will be able to attract
new AUA. Inability on our part to maintain and/or increase the value of our AUA could have a
material adverse effect on our business, financial condition, results of operations and prospects.
Our non-recurring revenue is exposed to risks arising from volatility
Our non-recurring revenue comprises (a) commission income derived mainly from investment
subscription via upfront commissions or processing fees; (b) service fees arising mainly from the
provision of currency conversion administration services to adviser-assisted investors and the
provision of administration services to FAs; (c) advertising fees earned mainly from
advertisements placed by third parties on iFAST Financial Websites and in iFAST’s in-house
magazines; and (d) other miscellaneous income such as magazine sales and software licence
revenue. We face risks arising from the volatile nature of our non-recurring income. For example,
our commission income as a percentage of our revenue has ranged from 19.3% to 28.4% for the
Period Under Review.
We are dependent on a few FAs and fund houses for a significant portion of our net revenue
or net recurring revenue
We are dependent on a few FAs and fund houses for a significant portion of our net revenue. For
FY2011, FY2012, FY2013 and 9M2014, 34.2%, 33.1%, 29.4% and 27.2%, respectively, of our net
revenue came from three (3) FAs who accounted for 5.0% or more of our net revenue. For FY2011,
FY2012, FY2013 and 9M2014, 58.1%, 55.5%, 52.0% and 46.8%, respectively, of our net recurring
revenue came from six (6) fund houses who accounted for 5.0% or more of our net recurring
revenue for at least one (1) of these financial periods. If such FAs and fund houses, whether alone
or in aggregate are unable to honour their contracts with us, terminate such contracts or decide
not to contract with us in the future, we may be unable to obtain contracts on comparable terms
and we could suffer a loss of revenue that could materially and adversely affect our business,
financial condition, results of operations and prospects. Please refer to the sections entitled “Our
Business – Major Customers” and “Our Business – Major Suppliers” in this Prospectus for more
information.
We may not have sufficient insurance coverage or the cost of insurance may increase
significantly
Our business entails the risk of liability related to litigation from our Customers and third parties.
There is no assurance that any claims made or decided against us will be covered by insurance,
or if covered, will not exceed the limits of our coverage. As at the Latest Practicable Date, on a
Group basis, we currently have FAs professional liability, financial institutions professional
indemnity, directors and officers liability, and cyber risk insurance policies. There is no certainty
whether any or all of our insurers will remain solvent and meet their contracted obligations to
provide the coverage we are contracted for or that such coverage will continue to be made
available to us at a reasonable premium for future renewals. Increased costs of maintaining our
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47
existing insurance coverage or obtaining additional coverage not covered by our existing
insurance could have a material adverse effect on our business, financial condition, results of
operations and prospects.
We may also be subject to liabilities or losses resulting from business interruptions or other
disruptions to our Platform, services or technological infrastructure, against which we have not
insured adequately, or at all, or cannot insure. The occurrence of an adverse event and the
damages from which are not covered or fully covered or honoured by our insurers, could have a
material adverse effect on our business, financial condition, results of operations and prospects.
Our business is dependent on the reputation of our brand
Our iFAST brand is key to establishing and maintaining good relationships with our Suppliers,
Customers and market participants in general. Any negative news, information, opinion or
publicity about us, especially in relation to integrity, including any incident of employee
misconduct, inability to manage price sensitive information, confidential information and conflicts
of interest, among others, will affect the level of confidence that we have built in our Suppliers,
Customers and market participants and their willingness to continue or consider working with us
in the future. Any negative publicity and/or perceptions about us resulting in the loss of confidence
of our Suppliers, Customers and market participants in us could have a material adverse effect on
our business, financial condition, results of operations and prospects.
We rely heavily on information technology in the administration of our business
We utilise a proprietary Platform to distribute our products, to manage customers and to provide
trade functionalities. Security breaches, errors, malfunctions or breakdowns of our information
technology systems either as a one-off event or repeatedly could result in adverse publicity and
reputational damage to our business or could also cause us to materially breach our contracts with
our suppliers and customers. Security breaches could also expose us to claims from our suppliers
or customers or subject us to disciplinary action by governmental and regulatory authorities. For
instance, we possess sensitive personal and confidential data of our suppliers and customers
which could be compromised and made public by a security breach. Inability to maintain
confidentiality of data in our possession due to security breaches, errors, malfunctions or
breakdowns of our information technology systems could cause customer confidence in us to
decline and subject us to liability under data protection laws or breach of confidentiality provisions,
which, either alone or in aggregate could have a material adverse effect on our business, financial
condition, results of operations and prospects.
Our Platform is Internet-based and we also provide our services via the Internet which is not
controlled by any single entity or regulated by a single jurisdiction. Our Platform and provision of
services over the Internet exposes us to cyber risks which include but are not limited to, security
and hacking threats, and distributed denial of service attacks, which could result in the failure of
the associated physical infrastructure. The manifestation of such risks either alone or in
aggregate, have a material adverse effect on our business, financial condition, results of
operations and prospects.
Our business may be affected by the inability to protect or enforce our intellectual property
rights
Our intellectual property portfolio comprises our proprietary Platform, our trademarks, brand
names and registered domain names. The success of our business is highly dependent on our
ability to protect our intellectual property and other proprietary rights. We rely on trademarks,
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48
trade secrets, copyrights and unfair competition laws as well as licence agreements and other
contractual provisions to protect our intellectual property and other proprietary rights. There is no
assurance that any steps we take to protect our intellectual property rights and other proprietary
rights including registering and/or applying for registration of our trademarks are adequate to
protect the intellectual property we currently own or may develop in the future. It may be possible
for third parties to unlawfully pass-off our trademarks, Platform or services as theirs or we may
unknowingly infringe on the intellectual property rights of third parties. Intellectual property
litigation for enforcing of our intellectual property rights and defending any infringement claims
made against us could be costly and divert the attention of our management away from the
day-to-day operations of our business. This could have a material adverse effect on our business,
financial condition, results of operations and prospects. We may also face the risk of losing our
rights to the intellectual property in question which could result in the interruption or cessation of
our business.
We have no registered intellectual property rights over the source code of our proprietary Platform
due to commercial sensitivities, and rely instead on the copyright protection that arises from the
creation of such source code and its expression in a tangible form. There is no assurance that
such copyright protection will be adequate to withstand a challenge to our ownership and the
originality of such source code. There is also no assurance that our source code will not be copied,
reverse engineered, or de-compiled by our Customers for whom we provide customisable
Platforms or anyone who is granted or otherwise gains access to our source code. In addition, the
design of our Platform’s user interface and some other “visible” intellectual property may be
copied by any user of our Platforms. Any failure to protect our intellectual property may result in
another party copying or otherwise obtaining and using our Platform without authorisation.
Policing unauthorised use of proprietary information is difficult and expensive and we may not be
able to detect and prevent infringement or loss of our intellectual property. Our inability to keep our
source code confidential could have a material adverse effect on our business, financial condition,
results of operations and prospects.
We have registered and currently own the exclusive right to use domain names relating to our
business. The registration of such domain names requires periodic renewal. There is no
assurance that we will be able to successfully renew the domain names we own or that we will be
able to register domain names that have or may become relevant to our business. In addition, we
may be unable to prevent third parties from acquiring and using domain names that infringe or
otherwise decrease the value of our intellectual property and other proprietary rights. Failure to
renew and/or protect our domain names and an inability to register domain names that have or
may become relevant to our business could adversely affect our business and make our websites
more difficult to locate and/or access. This could have a material adverse effect on our business,
financial condition, results of operations and prospects.
For further details of our Group’s intellectual property, please refer to the section entitled “Our
Business – Intellectual Property” in this Prospectus.
We rely heavily on a limited number of service providers for our business operations in
Singapore
In Singapore, our business depends on certain key service providers, including (i) a data center
to support our information system needs and (ii) a mailing and logistics service provider to support
the dissemination of transaction and fund information. Both service providers are key to our
day-to-day operations and there is no assurance that such service providers will not cease to
provide us with their services. In the event that such service providers cease to provide us with
their services, there can be no assurance that we can find suitable alternatives in a timely manner
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49
so as to minimise disruption to our business and operations. If we are unable to find suitable
alternatives in a timely manner, or are required to engage suitable alternatives at higher prices,
this could have a material adverse effect on our business, financial condition, results of operations
and prospects.
Our business depends on the contractual relationships we have with our Suppliers
The products we offer and market to our Customers via our Platform are obtained from our
Suppliers with whom we have entered into a series of distribution contracts. There is no assurance
that the parties we contract with will adequately fulfil their respective contractual obligations or
that such contractual relationships will not be terminated. Inability to maintain such contractual
relationships or find suitable replacements, alternatives or new parties to contract with could have
a material adverse effect on our business, financial condition, results of operations and prospects.
For example, we depend on our ability to distribute a large number of Investment Products. As at
the Latest Practicable Date, we have entered into at least 115 distribution agreements with our
Suppliers to distribute a range of Investment Products. If we are unable to renew our distribution
agreements with such Suppliers when they expire or if such Suppliers prematurely terminate their
distribution agreements with us and we are unable to enter into new distribution agreements with
replacement Suppliers in a timely manner, the range of Investment Products we can make
available to our customers will be reduced or limited.
Any failure of our contracting partners to perform their obligations under our contracts or
agreements with them may have a material and adverse effect on our business, financial
condition, results of operations and prospects. If our contracting partners fail to perform their
obligations under their respective agreements with us, we may have to rely on legal remedies,
including seeking specific performance or injunctive relief, which may not be effective.
We may be affected by claims in respect of our investment research and analysis
As part of our business, we provide investment research and analysis to our Customers. We are
exposed to the risk that our Customers who believe that they suffered losses due to or in
connection with our investment research and analysis may bring claims against us. Whilst we
protect ourselves by ensuring that our investment research and analysis are provided subject to
disclaimers of liability and taking up professional indemnity insurance for protection against such
risks, there is no assurance that these measures will adequately protect us from any claims
brought against us by our customers. In addition, any negative publicity arising from such claims,
whether justified or not, will have an adverse effect on our reputation which may in turn have a
material adverse effect on our business, financial condition, results of operations and prospects.
We may be affected by claims in respect of non-execution or delay in execution of our
Customers’ transactions
The core of our business is our Platform, a distribution and administration platform for Investment
Products. Our Customers, depending on whether they are DIY investors or adviser-assisted
investors, use the Fundsupermart.com Website or iFAST Financial Website (as the case may be)
to carry out transactions of financial investment products. This means that if the
Fundsupermart.com Website or iFAST Financial Website (as the case may be) is unable to
execute, or if there is a delay in executing our Customers’ transactions of financial investment
products, we may be exposed to claims from our Customers. Even though we protect ourselves
from such claims through disclaimers of liability, there can be no assurance that such disclaimers
will adequately protect us from such claims. If we are subject to successful claims, our business,
RISK FACTORS
50
financial condition, results of operations and prospects may be adversely affected. In addition, any
negative publicity (whether justified or not) or any adverse findings arising from such claims will
have an adverse effect on our reputation and may have a material adverse effect on our business,
financial condition, results of operations and prospects.
We are dependent on the continued services of our key management and operational
personnel
Our Group’s operations have been dependent on the experience, knowledge and skills of our key
management and operational personnel. This includes our Chairman and CEO, Mr. Lim Chung
Chun and our Group COO, Mr. Wong Soon Shyan who each has more than 20 years of working
experience in the investment industry. They individually and collectively constitute an essential
part of our key management team and assist us to establish close working relationships with our
partners in the industry, including fund houses and financial institutions, which have been
instrumental in the success and growth of our operations. The continued success and growth of
our Group is therefore dependent on our ability to retain their services. The loss of the services
of certain key personnel without timely and suitable replacement or the inability to attract and
retain experienced personnel could have a material adverse effect on our business, financial
condition, results of operations and prospects. Details of our CEO and Executive Officers and their
working experience are disclosed under the section entitled “Directors, Management and Staff” in
this Prospectus.
We may seek opportunities for growth through acquisitions, joint ventures, investments
and partnerships, which may not be successful
Our Group has grown substantially in recent years. Such growth is principally derived from the
growth in our AUA coupled with the expansion of our operations to jurisdictions outside of
Singapore. There is no assurance that our Group can sustain such growth, or otherwise to
maintain our financial performance or to meet anticipated financial performance expectations.
We may seek opportunities for growth through acquisitions, joint ventures, investments and
partnerships. There is no assurance that such transactions and initiatives or any of these efforts
will be successful. The acquisitions and investments that our Group may make, or joint ventures
and partnerships that our Group may enter into, may expose our Group to additional business or
operating risks or uncertainties, including but not limited to the following:
• inability to effectively integrate and manage the acquired businesses;
• inability of our Group to exert control over the actions of its joint venture partners, including
any non-performance, default or bankruptcy of the joint venture partners;
• time and resources expended to coordinate internal systems, controls, procedures and
policies;
• disruption to ongoing business and diversion of management’s time and attention from our
day-to-day operations and other business concerns;
• risk of entering markets that our Group may have no or limited prior experience or dealing
with new counterparties;
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51
• potential loss of key employees and customers of the existing business and acquired
businesses;
• risk that an investment or acquisition may reduce our Group’s future earnings; and
• exposure to unknown liabilities.
Our wholly-owned subsidiary in China was incorporated on 7 July 2014. The commencement of
our business in China may expose us to the risks related to a new business venture as well as to
the risks of operating in a new jurisdiction that has economic, legal and regulatory conditions that
are different from the existing jurisdictions that we operate in. Accordingly, there is no assurance
of our success or the sustainability of our business in China. Inability to adapt or assimilate our
operations to the Chinese market could have a material adverse effect on our business, financial
condition, results of operations and prospects.
If our Group is unable to successfully implement our growth strategy or is unable to address the
risks associated with our Group’s acquisitions, joint ventures, investments and partnerships, or if
our Group encounters unforeseen expenses, difficulties, complications or delays frequently
encountered in connection with the integration of acquired businesses and the expansion of
operations, or fails to achieve acquisition synergies, our business, financial condition, results of
operations and prospects may be materially and adversely affected.
We are exposed to foreign exchange risks
As a result of the geographic diversity of our business, we are affected by changes in foreign
currency rates. Foreign currency fluctuations affect us because of mismatches between our
reporting currency and the currencies in which our revenues are received and operational costs
are incurred. Any fluctuations in foreign exchange rates between our reporting currency and the
currencies in which we receive our revenues and incur operational costs could have a material
adverse effect on our business, financial condition, results of operations and prospects. Please
refer to the section entitled “Management Discussion & Analysis – Foreign Exchange Exposure”
in this Prospectus for additional information on our hedging policy.
Our business is subject to economic, political and social conditions, as well as
governmental policies in Singapore and each of the other jurisdictions in which we operate
Our operations in Singapore, Malaysia, Hong Kong and China are subject to local economic, legal
and regulatory conditions in these jurisdictions including the amount and degree of government
regulation, growth rate and degree of development, uniformity in the implementation and
enforcement of laws, content of and control over capital investment, control of foreign exchange
and allocation of resources. Any unfavourable factor or change in the economic, political and
social conditions and/or the policies in the jurisdictions in which we operate could have a material
adverse effect on our business, financial condition, results of operations and prospects.
Tax authorities in Singapore and in other jurisdictions in which we operate could challenge
our allocation of taxable income which could increase our consolidated tax liabilities
There can be no assurance that tax authorities reviewing our tax returns would agree with our
allocation of taxable income. If any tax authority in Singapore or in other jurisdictions in which we
operate finds that our allocation of taxable income is not in compliance with the relevant tax
legislation of such jurisdiction, such tax authority could require us to reallocate the income or
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52
adjust the taxable income to accurately reflect the reallocated income. Any such reallocation or
adjustment could result in a higher overall tax liability for us and may materially and adversely
affect our business, financial condition, results of operations and prospects.
We may be affected by epidemic diseases in the jurisdictions in which we operate and
elsewhere
Several countries in Asia, have suffered from outbreaks of communicable diseases such as SARS
and avian flu. Although the long-term effect of such diseases cannot be predicted, previous
occurrences of SARS and avian flu had an adverse effect on the economies of those countries in
which they were most prevalent, including Singapore and Hong Kong, both of which are
jurisdictions in which we operate. A new and prolonged outbreak of communicable diseases could
have a material adverse effect on our business, financial condition, results of operations and
prospects.
RISKS RELATING TO OWNERSHIP OF OUR SHARES
We are subject to shareholding restrictions under regulations or due to requirements of
regulatory authorities
In Singapore, the SFA and the FAA prohibits a person from entering into an arrangement to
acquire or hold, directly or indirectly, 20% or more of the issued share capital or voting rights of
the holder of a CMS license and a licensed FA respectively. Any shareholder holding 20% or more
of the issued share capital or controlling 20% or more of the voting power of our Company would
indirectly obtain effective control over iFAST Financial, our licensed entity. Our Chairman and
CEO, Mr. Lim Chung Chun holds 20% or more of the shares of our Company. While he is not
subject to the aforementioned SFA and FAA shareholding restrictions as he is already a
shareholder, there is no assurance that MAS will not impose shareholding restrictions on Mr. Lim
Chung Chun which may have a material and adverse effect on the market price of our shares.
In Hong Kong, to become or to continue to be a substantial shareholder of a licensed corporation,
prior approval under Section 132(1)(a) of the SFO is required (the “Hong Kong Shareholding
Restrictions”). Under Section 6 of Schedule 1 of the SFO, a person is regarded as a substantial
shareholder of a licensed corporation if:
(a) he holds an interest in shares in the licensed corporation:
(i) the aggregate number of which shares is equal to more than 10% of the total number
of issued shares of the licensed corporation; or
(ii) which entitles him, either alone or with any of his associates and either directly or
indirectly, to exercise or control the exercise of more than 10% of the voting power at
general meetings of the licensed corporation; or
(b) he holds shares in any other corporation which entitles him, either alone or with any of his
associates and either directly or indirectly, to exercise or control the exercise of 35% or more
of the voting power at general meetings of that other corporation, or of a further corporation,
where that other corporation is itself entitled, either alone or with its associates and either
directly or indirectly, to exercise or control the exercise of more than 10% of the voting power
at general meetings of the licensed corporation.
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The Hong Kong Shareholding Restrictions are applicable to (i) our Company (which is entitled to
exercise or control the exercise of more than 10% of the voting power at general meetings of the
licensed corporations, iFAST HK and iFAST Platform); and (ii) if applicable, a shareholder of our
Company or any other corporation (the “Other Corporation”) which is entitled to exercise or
control the exercise of 35% or more of the voting power at general meetings of our Company (or,
if applicable, a further corporation which is entitled to exercise or control the exercise of 35% or
more of the voting power at general meetings of the Other Corporation).
Pursuant to Section 3(1)(c) of the Securities and Futures (Licensing And Registration)
(Information) Rules (Cap 571S), the application should be made by a person for approval to
become or continue to be a substantial shareholder of a licensed corporation.
The substantial shareholder should be a fit and proper person as set out in Section 129 of the
SFO. Approval is made by lodging an Application Form 4 with the prescribed fee and supporting
documents and, if applicable, Supplement 2 (information on corporate substantial shareholder) for
a corporate applicant or Supplement 3 (statement of personal information) for an individual
applicant. Section 135(3) of the SFO provides that, where there is a change in the information
provided to the SFC by a licensed corporation and/or a substantial shareholder of a licensed
corporation, a written notice of change in the information containing full description of the change
must be given to the SFC within seven (7) business days of the change. Such shareholding
restrictions and approval or notification requirements imposed by the regulatory authorities may
have a downward pressure on our Share price.
In Malaysia, iFAST Capital Malaysia requires SC’s prior approval if a change of shareholding in
iFAST Capital Malaysia will result in a change in iFAST Capital Malaysia’s controller even though
there is no specific shareholding restriction imposed by the SC when iFAST Capital Malaysia was
initially set up. The controller is defined under Section 60(7) of the CMSA as a person who (a) is
entitled to exercise, or control the exercise of, not less than 15% of the votes attached to the voting
shares in iFAST Capital Malaysia; (b) has the power to appoint or cause to be appointed a majority
of the directors of iFAST Capital Malaysia; or (c) has the power to make or cause to be made,
decisions in respect of the business or administration of iFAST Capital Malaysia, and to give effect
to such decisions or cause them to be given effect to. SC’s prior approval is also required when
iFAST Capital Malaysia is establishing a new business or acquiring shares/interests in or outside
Malaysia in relation to capital market-based activities.
However, SC only needs to be notified within 14 days of the following occurrence of events:
(a) if the change of shareholding of iFAST Capital Malaysia does not result in a change of iFAST
Capital Malaysia’s controller; or
(b) if iFAST Capital Malaysia is establishing a new business or acquisition of shares/interests in
or outside Malaysia in relation to non-capital market-based activities; or
(c) if iFAST Capital Malaysia is disposing a business or shares/interests in or outside Malaysia.
The above restrictions on change of shareholding in Malaysia would apply to our Company, who
is deemed to be the controller of iFast Capital Malaysia. iFAST Capital Malaysia will need to obtain
the prior approval of SC for any direct or indirect change in its controller. Shareholders of our
Company who intend to become a controller by, inter alia, holding at least 15% of the voting
Shares of the Company, will also need to obtain the prior approval of the SC through iFAST Capital
Malaysia.
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54
The shareholding restrictions under the relevant regulations or due to the requirements of the
relevant regulatory authorities may discourage or prevent certain types of transactions which
includes such transactions or arrangements which involve an actual or threatened change of
control of our Company. Our Shareholders, which may include you, may therefore be
disadvantaged as such shareholding restrictions might adversely affect the liquidity, demand and
price of our Shares. In addition, our Company may be adversely affected in our fund raising efforts
due to such shareholding restrictions.
In the event any Shareholder fails to obtain the requisite approvals and/or fails to comply with any
relevant shareholding restrictions, such Shareholder may be subject to negative consequences,
including monetary fines, imprisonment and/or such other powers that may be available to the
relevant regulatory authorities.
For further details on these shareholding restrictions, please refer to the section entitled
“Government Regulations and Licensing – Shareholding Restrictions” of this Prospectus.
Our Shares may not be a suitable investment for all investors
Each prospective investor in the Shares must determine the suitability of that investment in light
of his/her own circumstances. In particular, each prospective investor should:
• have sufficient knowledge and experience to make a meaningful evaluation of the Shares,
our Company, the merits and risks of investing in the Shares and the information contained
or incorporated by reference in this Prospectus;
• have access to, and knowledge of, appropriate analytical tools to evaluate, in the context of
its particular financial situation, an investment in the Shares and the effect the Shares will
have on its overall investment portfolio;
• have sufficient financial resources and liquidity to bear all of the risks of an investment in the
Shares, including where the currency of the Shares is different from the prospective
investor’s currency;
• understand thoroughly the terms of the Shares; and
• be able to evaluate (either alone or with the help of a FA) possible scenarios for economic
and other factors that may affect its investment and its ability to bear the applicable risks.
Any future sale of our Shares could adversely affect our Share price
Following the Offering, we will have 256,225,334 Shares, of which 130,395,708 Shares, or 50.9%
of our post-Offering share capital, will be collectively held by our existing major Shareholders, Mr.
Lim Chung Chun, his spouse Mdm. Neo Lay Kien, SPH AsiaOne and Accretion Investment Pte Ltd
together with the rest of our Directors.
Under the moratorium arrangements (as described in the section entitled “Shareholders –
Moratorium” of this Prospectus), the transfer of our Shares by, inter alia, Mr. Lim Chung Chun,
Mdm. Neo Lay Kien, SPH AsiaOne and Accretion Investments Pte Ltd together with the rest of our
Directors will be restricted for a period until the date falling six (6) months from the Listing Date.
If upon the expiration of the moratorium period, any of Mr. Lim Chung Chun, Mdm. Neo Lay Kien,
RISK FACTORS
55
SPH AsiaOne, Accretion Investments Pte Ltd and our Directors sells or is perceived as intending
to sell a substantial amount of Shares, the market price for our Shares could be adversely
affected.
Following the Offering, approximately 7.4% of our Shares will be owned by the Cornerstone
Investors. The Cornerstone Shares acquired by the Cornerstone Investors are not subject to any
moratorium arrangement. Existing Public Shareholders of our Company hold 64,671,894 Shares
or approximately 25.2% of our post-Offering share capital, of which 16,783,026 Shares are under
a moratorium arrangement. The remaining 47,888,868 shares held by existing public
Shareholders (“Non-moratorised Public Shareholders”) are not subject to any moratorium
arrangement. Therefore, if the Cornerstone Investors or the Non-moratorised Public
Shareholders, directly or indirectly, sell or are perceived as intending to sell a substantial amount
of Shares, the market price of the Shares may be adversely affected.
Any future sale or availability of our Shares can have a downward pressure on our Share price.
The sale of a significant amount of our Shares in the public market after the Offering, or the
perception that such sales may occur, could materially affect the market price of our Shares.
Our Controlling Shareholders will retain significant control over our Company after the
Offering, which may allow them to influence the outcome of decisions requiring the
approval of Shareholders
Upon completion of the Offering, our Controlling Shareholders, Mr. Lim Chung Chun who is our
Chairman and CEO, SPH AsiaOne Ltd. and SPH, will have an aggregate direct and deemed
interest in approximately 38.6% of our post-Offering issued share capital (assuming that the
Over-allotment Option is not exercised). Therefore, these persons may be able to exercise
significant influence over matters requiring Shareholders’ approval, including the election of
directors and the approval of significant corporate transactions.
In particular, Mr. Lim Chung Chun, as a Controlling Shareholder and a member of the key
management of our Group, is responsible for setting the strategic direction of our Group together
with the Board and overseeing the entire overall management of our Group. He may be able to
influence matters requiring approval by our Shareholders, including the election of directors and
the approval of significant corporate transactions in a manner that could conflict with the interests
of our public shareholders.
Investors in our Shares would face immediate and substantial dilution in NAV per Share and
may experience future dilution
Our Offering Price is higher than our Group’s NAV per Share of 24.74 cents as at 30 September
2014 (adjusted for the effects of the issuance of the Cornerstone Shares and the Offering and
based on our post-Offering issued share capital). Thus, there is an immediate and substantial
dilution in the book value per Share for investors who purchase our Shares. If we were liquidated
for NAV immediately following the Offering, each Shareholder subscribing to the Offering would
receive less than the price they paid for their Shares. Please refer to the section entitled “Dilution”
in this Prospectus for further details.
In addition, we intend to issue Options under our iFAST ESOS and share awards under our iFAST
PSP. To the extent that new Shares are issued pursuant to the exercise of our Options, or such
awards are released and new Shares are issued pursuant to such release, there will be further
dilution to investors participating in the Offering. Further details of the iFAST PSP and iFAST
RISK FACTORS
56
ESOS are described under the sections entitled “iFAST PSP” and “iFAST ESOS” of this
Prospectus and in Appendix F and G in this Prospectus where the rules of the iFAST PSP and
iFAST ESOS are set out respectively.
Our Shares have not been previously quoted on a securities exchange prior to the Offering
Our Shares have not been previously quoted on a securities exchange prior to the Offering. The
Offering Price may not be indicative of the market price for our Shares after the completion of the
Offering. Therefore, there is no assurance that an active trading market for our Shares will develop
or, if developed, will be sustained.
Further, there is also no assurance that the market price of our Shares will not decline below the
Offering Price after the Offering. The Offering Price of our Shares under the Offering has been
determined following a book-building process by agreement between the Joint Issue Managers,
Bookrunners and Underwriters and us and may not be indicative of prices that will prevail in the
trading market. You may not be able to resell your Shares at a price that is attractive to you.
Although it is intended that our Shares will remain listed on the SGX-ST, there is no guarantee of
the continued listing of the Shares.
Our Share price may fluctuate following the Offering
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:
• changes in conditions affecting our industry, general economic and stock market conditions;
• variations in our operating results;
• changes in securities analysts’ recommendations or estimates of our financial performance;
• changes in market valuations and share prices of companies with similar businesses to our
Company and which are listed on the SGX-ST;
• announcements by our competitors or us of gain or loss of significant contracts, acquisitions,
strategic partnerships, joint ventures or capital commitments;
• departures of key management personnel;
• fluctuations in stock price and trading volume;
• involvements in litigation or arbitration;
• success or failure of our management team in implementing business and growth strategies;
and/or
• negative publicity involving our Company, any of our Directors, Executive Officers or
Substantial Shareholders, whether or not it is justified.
RISK FACTORS
57
We may not be able to pay dividends in future
Our ability to declare dividends in relation to the Shares will depend on, among others, our
operating results, financial condition, other cash requirements including capital expenditures, the
terms of borrowing arrangements, other contractual restrictions and other factors deemed
relevant by our Directors. This is in turn dependent on the successful implementation of our
strategy and financial, regulatory and general economic conditions and other factors that may be
specific to us or specific to our industry, many of which are beyond our control.
In addition, we operate substantially all of our business through our subsidiaries. Therefore, our
ability to pay dividends is affected by the ability of our subsidiaries to declare and pay us dividends
or other distributions. The ability of our subsidiaries to declare and pay dividends to us will be
dependent on the cash income and cash available to such subsidiary and the operating results,
financial condition, other cash requirements including capital expenditures, the terms of borrowing
arrangements and other contractual restrictions of the relevant subsidiary and may be restricted
under applicable law or regulation. If any of our subsidiaries are unable or are restricted in their
ability to declare and pay dividends or other distributions to us, our ability to pay dividends on our
Shares may be adversely affected. In addition, if our subsidiaries enter into loan agreements in the
future, and covenants in such loan documents restrict the ability of our subsidiaries to declare
and/or pay dividends to us, such covenants will affect our ability to declare and pay dividends. See
the section entitled “Dividend Policy” in this Prospectus for a discussion of our dividend policy.
Singapore law contains provisions that could discourage a takeover of our Company
Sections 138, 139 and 140 of the Securities and Futures Act and the Singapore Code on
Take-overs and Mergers (collectively, the “Singapore Take-over Laws and Regulations”)
contain certain provisions that may delay, deter or prevent a future takeover or change in control
of our Company for so long as our Shares are listed for quotation on the SGX-ST. Any person
acquiring an interest, either on his own or together with parties acting in concert with him, in 30%
or more of our Shares, or, if such person holds, either on his own or together with parties acting
in concert with him, between 30% and 50% (both inclusive) of our Shares, and he (or parties
acting in concert with him) acquires additional Shares representing more than one (1) per cent. of
our voting Shares in any six-month period, must, except with the consent of the Securities Industry
Council, extend a takeover offer for the remaining Shares in accordance with the provisions of the
Singapore Take-over Laws and Regulations. While the Singapore Take-over Laws and
Regulations seek to ensure equality of treatment among Shareholders, their provisions may
discourage or prevent certain types of transactions involving an actual or threatened change of
control of our Company. Some of our Shareholders, which may include you, may therefore be
disadvantaged as a transaction of that kind might have allowed the sale of shares at a price above
the prevailing market price.
Additional funds raised through issuance of the new Shares for our future growth will dilute
existing Shareholders’ equity interest
We may, in the future, expand our capabilities and business through acquisitions, joint ventures
and strategic partnerships with parties. We may also require additional equity funding after the
Offering. By financing future expansion, acquisitions, joint ventures and strategic partnership via
issuance of new Shares, our Shareholders will face dilution of their shareholdings.
RISK FACTORS
58
Overseas Shareholders may not be able to participate in future rights offerings or certain
other equity issues we may make
If we offer or cause to be offered to our Shareholders rights to subscribe for additional Shares or
any right of any other nature, we will have discretion as to the procedure to be followed in making
such rights available to our Shareholders or in disposing of such rights for the benefit of such
Shareholders and making the net proceeds available to such Shareholders. We may choose not
to offer such rights to our Shareholders having an address in a jurisdiction outside Singapore. For
instance, we will not offer such rights to our Shareholders who are US persons (as defined in
Regulation S) or have a registered address in the United States unless:
(a) a registration statement is in effect, if a registration statement under the US Securities Act
is required in order for us to offer such rights to Shareholders and sell the securities
represented by such rights; or
(b) the offering and sale of such rights or the underlying securities to such Shareholders are
exempt from registration under the provisions of the US Securities Act.
We have no obligation to prepare or file any registration statement under the US Securities Act.
Accordingly, Shareholders who are US persons (as defined in Regulation S) or have a registered
address in the United States may be unable to participate in rights offerings and may experience
a dilution in their holdings as a result.
RISK FACTORS
59
The following selected consolidated financial information should be read in conjunction with the
full text of this Prospectus, including the section entitled “Management’s Discussion and Analysis
of Results of Operations and Financial Position” of this Prospectus, and the sections entitled
“Audited Consolidated Financial Statements for the Financial years ended 31 December 2011,
2012 and 2013”, “Unaudited Interim Consolidated Financial Statements for the Nine Months
ended 30 September 2014” and “Unaudited Pro Forma Consolidated Financial Information for the
Financial Year ended 31 December 2013 and the Nine Months ended 30 September 2014” as set
out in Appendix A, Appendix B and Appendix C of this Prospectus respectively.
Results of Our Group
Audited Unaudited
FY2011 FY2012 FY2013 9M2013 9M2014
S$’000 S$’000 S$’000 S$’000 S$’000
Continuing operations
Revenue 61,123 56,414 69,470 52,686 58,595
Commission and fee paid or
payable to third party financial
advisers (35,919) (30,123) (37,884) (29,176) (31,267)
25,204 26,291 31,586 23,510 27,328
Other operating income 58 85 164 72 209
Gain on distribution to owners
of the Company – – 618 – –
Depreciation of plant and
equipment (979) (787) (703) (528) (580)
Amortisation of intangible
assets (335) (71) (169) (121) (144)
Staff costs (12,305) (11,918) (13,311) (9,981) (11,250)
Other operating expenses (9,191) (9,632) (9,399) (7,022) (7,679)
Results from operating activities 2,452 3,968 8,786 5,930 7,884
Finance income 59 45 39 31 74
Finance expense (137) (72) (10) (10) –
2,374 3,941 8,815 5,951 7,958
Share of result of associate,
net of tax – – – – –
(1)
Profit before tax 2,374 3,941 8,815 5,951 7,958
Tax expense (252) (685) (573) (550) (381)
Profit from continuing
operations 2,122 3,256 8,242 5,401 7,577
Discontinued operation
Loss from discontinued
operation, net of tax (1,945) (1,631) (3,152) (635) –
Profit for the year/period 177 1,625 5,090 4,766 7,577
Note:
(1) Less than S$1,000
SELECTED CONSOLIDATED FINANCIAL INFORMATION
60
Audited Unaudited
FY2011 FY2012 FY2013 9M2013 9M2014
S$’000 S$’000 S$’000 S$’000 S$’000
Attributable to:
Loss attributable to non-
controlling interests from
discontinued operation (1,177) (970) (439) (439) –
Loss attributable to non-
controlling interests from
continuing operations (649) (485) (232) (194) (38)
Loss attributable to owners of
the Company from discontinued
operation (768) (661) (2,713) (196) –
Profit attributable to owners
of the Company from
continuing operations 2,771 3,741 8,474 5,595 7,615
Profit for the year/period 177 1,625 5,090 4,766 7,577
Earnings per share from
continuing operations
EPS based on weighted
average number of shares
(cents)
(1)
1.38 1.86 4.20 2.77 3.75
Diluted EPS based on weighted
average number of shares
(cents)
(2)
1.36 1.84 4.09 2.72 3.65
EPS based on pre-Offering
share capital (cents)
(3)
1.36 1.83 4.15 2.74 3.73
EPS based on post-Offering
share capital (cents)
(4)
1.08 1.46 3.31 2.18 2.97
Notes:
(1) EPS is computed based on our weighted average number of shares (assuming Sub-division had occurred) of
200,616,486 Shares in FY2011, 201,008,604 Shares in FY2012, 202,051,128 Shares in FY2013, 201,834,300
Shares in 9M2013 and 203,298,840 Shares in 9M2014.
(2) Diluted EPS is computed based on our weighted average number of shares adjusted to take into account the dilutive
effect arising from the dilutive share options issued under the 2003 ESOS and 2013 ESOS with the potential ordinary
shares weighted for the period outstanding. Such weighted average number of shares (assuming Sub-division had
occurred) were 203,044,188 Shares in FY2011, 203,105,268 Shares in FY2012, 207,225,420 Shares in FY2013,
205,438,458 Shares in 9M2013 and 208,444,074 Shares in 9M2014.
(3) For comparative purposes, EPS for the Period Under Review is computed based on profit attributable to owners of
our Company from continuing operations and our Company’s pre-Offering Share Capital of 204,425,334 Shares.
(4) For comparative purposes, EPS for the Period Under Review is computed based on profit attributable to owners of
our Company from continuing operations and our Company’s post-Offering Share Capital of 256,225,334 Shares.
SELECTED CONSOLIDATED FINANCIAL INFORMATION
61
Financial Position of our Group
Audited Unaudited
As at
31 December
2013
As at
30 September
2014
S$’000 S$’000
Assets
Plant and equipment 1,634 1,727
Intangible assets 664 1,339
Associate – 401
Deferred tax assets 35 22
Other investments 2,011 1,802
Club membership 11 11
Total non-current assets 4,355 5,302
Current tax receivable 5 30
Trade and other receivables 16,764 17,940
Prepayments 614 497
Cash at bank and in hand 16,293 15,149
Money market funds 426 36
Total current assets 34,102 33,652
Held under trust
Client bank accounts 100,599 121,552
Client ledger balances (100,599) (121,552)
– –
Total assets 38,457 38,954
Equity
Share capital 10,670 11,379
Reserves 13,296 7,362
Equity attributable to owners of the Company 23,966 18,741
Non-controlling interests 658 –
Total equity 24,624 18,741
Liabilities
Deferred tax liabilities 77 125
Other payables 353 177
Total non-current liabilities 430 302
Trade and other payables 12,835 19,536
Current tax payable 568 375
Total current liabilities 13,403 19,911
Total liabilities 13,833 20,213
Total equity and liabilities 38,457 38,954
NAV per Share (cents) 11.40
(1)
9.17
(2)
Notes:
(1) Subsequent to 31 December 2013, a final dividend of approximately S$1.3 million in respect of FY2013 was
declared on 14 February 2014 and subsequently paid on 7 May 2014. Please refer to the section entitled “Dividend
Policy” in this Prospectus for more details. The NAV per Share as at 31 December 2013 is computed based on our
pre-Offering issued share capital of 204,425,334 Shares and assumes that the final dividend of approximately S$1.3
million had been paid as at 31 December 2013.
(2) The NAV per Share as at 30 September 2014 is computed based on our pre-Offering issued share capital of
204,425,334 Shares.
SELECTED CONSOLIDATED FINANCIAL INFORMATION
62
The following selected pro forma financial information should be read in conjunction with the
section entitled “Unaudited Pro Forma Consolidated Financial Information for the Financial Year
ended 31 December 2013 and the Nine Months ended 30 September 2014” (the “Pro Forma
Financial Statements”) as set out in Appendix C of this Prospectus.
Our Group had restructured and disposed our India operation during the period between 1
January 2013 and the date of registration of this Prospectus with the MAS. In addition, our Group
had declared and paid dividends during the period between 31 December 2013 and the date of
registration of this Prospectus with the MAS. The relevant disposal and declaration and payment
of dividends (the “Transactions”) are described in Note 2 to the Pro Forma Financial Statements.
The Pro Forma Financial Statements have been prepared for illustrative purpose only and is
based on certain assumptions set out in Note 3 to the Pro Forma Financial Statements, to
illustrate what:
(i) the financial results of our Group for the year ended 31 December 2013 and the nine (9)
months ended 30 September 2014 would have been if the Transactions had occurred on 1
January 2013;
(ii) the financial position of our Group as at 31 December 2013 and 30 September 2014 would
have been if the Transactions had occurred on 31 December 2013 and 30 September 2014
respectively; and
(iii) the cash flows of our Group for the year ended 31 December 2013 and the nine (9) months
ended 30 September 2014 would have been if the Transactions had occurred on 1 January
2013,
as set out in the following tables.
The objective of the Pro Forma Financial Statements is to show what the financial position,
financial performance and cash flows of our Group might have been, had the Transactions
occurred at the respective dates as described above. However, the Pro Forma Financial
Statements is not necessarily indicative of the financial position, financial performance and cash
flows of our Group that would have been attained had the Transactions actually occurred on those
dates. The Pro Forma Financial Statements have been prepared for illustrative purposes only and,
because of its nature, may not give a true picture of our Group’s actual financial position, financial
performance or cash flows.
SELECTED PRO FORMA FINANCIAL INFORMATION
63
Selected pro forma consolidated statements of profit or loss
Unaudited
FY2013 9M2014
S$’000 S$’000
Continuing operations
Revenue 69,639 58,595
Commission and fee paid or payable to third party
financial advisers (37,884) (31,267)
31,755 27,328
Other operating income 164 209
Gain on distribution to owners of the Company 618 –
Depreciation of plant and equipment (703) (580)
Amortisation of intangible assets (169) (144)
Staff costs (13,311) (11,250)
Other operating expenses (9,399) (7,679)
Results from operating activities 8,955 7,884
Finance income 39 74
Finance expense (10) –
8,984 7,958
Share of result of associate, net of tax –
(1)
Profit before tax 8,984 7,958
Tax expense (573) (381)
Profit from continuing operations 8,411 7,577
Discontinued operation
Loss from discontinued operation, net of tax (2,517) –
Profit for the year/period 5,894 7,577
Attributable to:
Loss attributable to non-controlling interests from
continuing operations (232) (38)
Loss attributable to owners of the Company from
discontinued operation (2,517) –
Profit attributable to owners of the Company from
continuing operations 8,643 7,615
Profit for the year/period 5,894 7,577
Note:
(1) Less than S$1,000
SELECTED PRO FORMA FINANCIAL INFORMATION
64
Selected pro forma consolidated statements of financial position
Unaudited
As at
31 December
2013
As at
30 September
2014
S$’000 S$’000
Assets
Plant and equipment 1,634 1,727
Intangible assets 664 1,339
Associate – 401
Deferred tax assets 35 22
Other investments 2,011 1,802
Club membership 11 11
Total non-current assets 4,355 5,302
Current tax receivable 5 30
Trade and other receivables 16,764 17,940
Prepayments 614 497
Cash at bank and in hand 5,374 8,335
Money market funds 426 36
Total current assets 23,183 26,838
Held under trust
Client bank accounts 100,599 121,552
Client ledger balances (100,599) (121,552)
– –
Total assets 27,538 32,140
Equity
Share capital 10,670 11,379
Reserves 2,377 7,362
Equity attributable to owners of the Company 13,047 18,741
Non-controlling interests 658 –
Total equity 13,705 18,741
Liabilities
Deferred tax liabilities 77 125
Other payables 353 177
Total non-current liabilities 430 302
Trade and other payables 12,835 12,722
Current tax payable 568 375
Total current liabilities 13,403 13,097
Total liabilities 13,833 13,399
Total equity and liabilities 27,538 32,140
SELECTED PRO FORMA FINANCIAL INFORMATION
65
Selected pro forma consolidated statements of cash flows
Unaudited
FY2013 9M2014
S$’000 S$’000
Net cash from operating activities 8,654 7,136
Net cash used in investing activities (1,722) (1,763)
Net cash used in financing activities (14,659) (2,830)
Net (decrease)/increase in cash and cash equivalents (7,727) 2,543
Cash and cash equivalents at beginning of the year/period 13,541 5,801
Effect of exchange rate fluctuations on cash held (14) 27
Cash and cash equivalents at end of the year/period 5,800 8,371
SELECTED PRO FORMA FINANCIAL INFORMATION
66
The following discussion and analysis of our results of operations and financial position has been
prepared by our management and should be read in conjunction with the Audited Consolidated
Financial Statements of iFAST Corporation Ltd. and its subsidiaries for the Financial Years ended
31 December 2011, 2012 and 2013 and the Unaudited Interim Consolidated Financial Statements
of iFAST Corporation Ltd. and its subsidiaries for the nine (9) months ended 30 September 2014
set out in Appendices A and B of this Prospectus, respectively.
This discussion and analysis contains forward-looking statements that reflect our current views
with respect to future events and our financial performance and they involve risks and
uncertainties. Our actual results may differ significantly from those anticipated in the forward-
looking statements as a result of any number of factors, including those set forth in this section
and under the sections entitled “Risk Factors” and “Cautionary Note on Forward-looking
Statements”. Factors that might cause future results to differ significantly from those projected in
the forward-looking statements include, but are not limited to, those discussed below and
elsewhere in this Prospectus, particularly in the section entitled “Risk Factors”. Under no
circumstances should the inclusion of such forward-looking statements herein be regarded as a
representation, warranty or prediction with respect to the accuracy of the underlying assumptions
by our Company, the Joint Issue Managers, the Joint Underwriters or the placement agents of the
Offering or any other person. Investors are cautioned not to place undue reliance on these
forward-looking statements that speak only as at the date hereof. Please refer to the sections
entitled “Risk Factors” and “Cautionary Note on Forward-Looking Statements” in this Prospectus.
OVERVIEW
Based on our discussions and checks with our Suppliers and B2B Customers who are FAs, we
understand that based on our market share of their AUA and investment transactions, we are a
leading and established funds and investments distribution platform, providing a range of services
including distribution of Investment Products, investment administration, execution of
transactions, research and investment trainings, software tools, IT services and backroom
functions to more than 150 financial advisory companies and financial institutions in Singapore,
Malaysia and Hong Kong. In addition, according to Cerulli Associates, our Group is a leading
distribution platform among independent financial advisory firms and the online channel (DIY
Investors) in Singapore. For further details, please refer to the section entitled “Industry Overview
– Investment platforms in Asia ex-Japan: History and growth potential” in this Prospectus.
Through our distribution platforms, we provide a whole range of services to independent financial
advisers, financial institutions and adviser-assisted investors as well as DIY Investors to enable
them to make informed investment decisions and execute online transactions by equipping them
with a wide range of user-friendly investment and planning tools.
We conduct our business in two (2) main business divisions, namely:
(1) B2B Business
Our B2B Business focuses on servicing FAs by providing them with an efficient and reliable
investment platform to handle their back-end transactional and operational needs. Through
our B2B Business, we partner with financial institutions and FAs and assist with their
Investment Products distribution, administration, execution and settlement needs. As part of
our B2B Business, we also provide regular research updates on Investment Products, as well
MANAGEMENT’S DISCUSSION AND ANALYSIS OF RESULTS OF
OPERATIONS AND FINANCIAL POSITION
67
as Internet-based tools and mobile-friendly applications for financial institutions and FAs to
utilise in their portfolio and investment planning. Our Group’s B2B Platform can be accessed
via iFAST Financial’s website, www.ifastfinancial.com.
In addition, our B2B Business division also includes our Pensions Business that assists our
pension corporate clients to establish tax-effective retirement benefits schemes for their
employees and provides administrative support and specialist services to help these
corporate clients implement and administer employee retirement benefit plans. Services
rendered under our Pensions Business include advising corporate clients on the various
retirement benefit solutions for employees, helping to set up retirement benefit plans and the
day-to-day administration of the retirement benefit plans. These services are important for
companies that want to offer extra pensions benefits to retain their employees; or in cases
where their employees are mostly foreigners such as in multinational companies. Our iFAST
Pensions Website Customers include various multinational companies, including
international banks and educational groups. Revenue generated from Pensions Business
has not been significant since its inception. Our iFAST Pensions Website’s address is
www.ifastpensions.com.
(2) B2C Business
Our B2C Business began in Singapore in 2000 and we launched in Hong Kong in 2007 and
subsequently, Malaysia in 2008. Our B2C Business focuses on providing a reliable website
which offers Investment Products, Investment Products research, portfolio research, tools for
analyses of Investment Products, a strong emphasis on customer service, and a competitive
and transparent fees structure. Our B2C Business is targeted at DIY Investors seeking
alternative investment channels that provide them with more control in the decision-making
and execution process of investing. Products and services offered via Fundsupermart.com,
our B2C Platform, include the offering of Investment Products, free switching of unit trusts
and bond unit trusts sold at 0% upfront sales charges. Our B2C Platform can be accessed
via our Fundsupermart.com Website, www.fundsupermart.com. Please refer to the section
entitled “Our Business – Overview” in this Prospectus for more information on our Business.
Our key performance drivers
Since the commencement of our operations, we have experienced significant growth in our
business. In our business, the size of our AUA is a good indicator of our Group’s net revenue,
which represents revenue earned by our Group after deducting commission and fee paid or
payable to third party financial advisers. As at end September 2014, our AUA has a value of
approximately S$5.13 billion and in the last ten (10) years has grown at a CAGR of approximately
26.8% for our Group.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF RESULTS OF
OPERATIONS AND FINANCIAL POSITION
68
The following chart illustrates the growth of our AUA size since the commencement of our
operations to end September 2014.
S$ ’million
-
1,000
2,000
3,000
4,000
5,000
B2B B2C
While there has been a general uptrend in the value of our AUA in the last ten (10) years, such
an uptrend trend was interrupted during the GFC in which the financial markets experienced
heightened volatility. Our AUA was affected negatively as some Customers redeemed their
investments and some of the unit trusts’ net asset value (NAV) declined. These two (2) factors led
to the decline in our AUA during that period. After the GFC, our AUA has grown and resumed a
general uptrend as our business across the markets improved due to better market and investor
sentiments.
Our recurring revenue is driven by the size of our AUA. For illustrative purposes, the following
tables show (i) the breakdown of our net revenue by recurring net revenue and non-recurring net
revenue and our operating expenses; (ii) our average AUA; and (iii) our recurring net revenue,
non-recurring net revenue, net revenue and operating expenses as a percentage of our average
AUA, for the periods indicated:
FY2011
S$’000
FY2012
S$’000
FY2013
S$’000
9M2013
S$’000
9M2014
S$’000
Recurring net revenue 20,378 22,339 25,623 18,909 21,760
Non-recurring net revenue 4,826 3,952 5,963 4,601 5,568
Net revenue 25,204 26,291 31,586 23,510 27,328
Operating expenses 22,810 22,408 23,582 17,652 19,653
FY2011
S$’billion
FY2012
S$’billion
FY2013
S$’billion
9M2013
S$’billion
9M2014
S$’billion
Average AUA
(1)
3.88 3.91 4.46 4.42 4.89
MANAGEMENT’S DISCUSSION AND ANALYSIS OF RESULTS OF
OPERATIONS AND FINANCIAL POSITION
69
Net revenue and operating
expenses as a percentage of
average AUA
FY2011
%
FY2012
%
FY2013
%
9M2013
(3)
%
9M2014
(3)
%
Recurring net revenue
(2)
/AUA 0.526 0.571 0.574 0.570 0.593
Non-recurring net
revenue/AUA 0.125 0.101 0.134 0.139 0.152
Net revenue/AUA 0.651 0.672 0.708 0.709 0.745
Operating expenses/AUA 0.588 0.573 0.529 0.532 0.536
Notes:
(1) The average AUA is the average of the month-end AUAs for the relevant period.
(2) Our recurring net revenue comprises Trailer Fees which are calculated at up to 0.9% per annum of our average AUA,
Platform Fees which are calculated at up to 0.5% per annum of our average AUA and Wrap Fees which are
calculated at up to 0.2% per annum of our average AUA.
(3) The ratios are calculated based on annualised revenue and operating expenses figures for 9M2013 and 9M2014.
The following table shows the key drivers of our AUA excluding the effects arising from the general
economic conditions and financial market performance.
FY2011
S$’million
FY2012
S$’million
FY2013
S$’million
9M2013
S$’million
9M2014
S$’million
Subscription
(1)
947 941 1,365 1,080 1,138
Net inflows
(2)
55 193 458 416 348
Notes:
(1) Exclude switching between unit trusts.
(2) Net inflows mean subscription (excluding switching) plus transfer-in and less both redemption and transfer-out.
We have achieved significant scale and growth in our business. Our Group’s net revenue
increased by approximately 4.3% from S$25.2 million in FY2011 to S$26.3 million in FY2012,
increased by approximately 20.1% from S$26.3 million in FY2012 to S$31.6 million in FY2013,
and increased by approximately 16.2% from S$23.5 million for the nine (9) months ended 30
September 2013 to S$27.3 million for the same period in 2014. Our Group’s profit after tax from
continuing operations increased by approximately 57.1% from S$2.1 million in FY2011 to S$3.3
million in FY2012, increased by approximately 148.5% from S$3.3 million in FY2012 to S$8.2
million in FY2013, and increased by approximately 40.7% from S$5.4 million for the nine (9)
months ended 30 September 2013 to S$7.6 million for the same period in 2014.
Revenue
Revenue derived from our B2B Business includes (i) recurring revenue driven by AUA, comprising
Trailer Fees, Platform Fees and Wrap Fees; and (ii) non-recurring revenue that comprises (a)
commission income derived mainly from investment subscription via front-end load commissions
or processing fees; (b) service fees arising mainly from the provision of currency conversion
administration services to adviser-assisted investors and the provision of administration services
to FAs; (c) advertising fee earned mainly from advertisements placed by third parties on iFAST
Financial Websites and in iFAST in-house magazines and; (d) other miscellaneous income such
as magazine sales and software licence revenue.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF RESULTS OF
OPERATIONS AND FINANCIAL POSITION
70
Revenue derived from our B2C Business includes: (i) recurring revenue driven by AUA,
comprising Trailer Fees and Platform Fees; and (ii) non-recurring revenue that comprises (a)
commission income derived mainly from investment subscription via front-end load commissions
or processing fees; (b) service fees arising mainly from the provision of currency conversion
administration services to DIY investors; and (c) advertising fee earned mainly from
advertisements placed by third parties on Fundsupermart.com Website and its mobile application.
Commission and fee income and service fees are recognised on the completion of services
rendered. Magazine sales and software licence revenue are recognised when the significant risks
and rewards of ownership have been transferred to the buyer. Advertising revenue, which is
earned in the form of upfront and variable payments, is deferred and recognised over the period
to which the contract relates.
Our B2B and B2C Businesses have distribution agreements with many Fund Houses for the
distribution of a large variety of Investment Products. Please refer to the section entitled “Our
Business – Major Suppliers” in this Prospectus for more information on the list of major Fund
Houses with whom our Group has entered into agreements for the distribution of Investment
Products.
On the other hand, our Customers include DIY investors (for our B2C Business) and adviser-
assisted investors and FAs who maintain investment accounts with us via nominee arrangements
(for our B2B Business). Please refer to the section entitled “Our Business – Major Customers” in
this Prospectus for more information on the list of major FAs.
Currently, our Group carries out our B2B and B2C Businesses in Singapore, Hong Kong and
Malaysia. In prior years, our Group carried out an operation in India, which was discontinued in
FY2013 as a result of the Restructuring Exercise undertaken by our Company. Please refer to the
section entitled “Restructuring Exercise” in this Prospectus for further details on the Restructuring
Exercise.
The following table shows the breakdown of our revenue from continuing operations by
geographical segments:
Geographical
segment
FY2011 FY2012 FY2013 9M2013 9M2014
S$’000 % S$’000 % S$’000 % S$’000 % S$’000 %
Revenue
Singapore 48,879 80.0 42,867 76.0 52,455 75.5 40,013 75.9 40,444 69.0
Hong Kong 11,382 18.6 12,396 22.0 15,041 21.7 11,224 21.3 15,897 27.1
Malaysia 862 1.4 1,151 2.0 1,974 2.8 1,449 2.8 2,254 3.9
61,123 100.0 56,414 100.0 69,470 100.0 52,686 100.0 58,595 100.0
MANAGEMENT’S DISCUSSION AND ANALYSIS OF RESULTS OF
OPERATIONS AND FINANCIAL POSITION
71
The following table shows the breakdown of our revenue by business divisions:
Revenue –
B2B Business
FY2011 FY2012 FY2013 9M2013 9M2014
S$’000 % S$’000 % S$’000 % S$’000 % S$’000 %
Recurring
revenue 38,530 73.1 37,448 77.6 41,220 69.7 30,625 68.2 33,741 67.2
Non-recurring
revenue:
Commission
income 13,011 24.7 9,739 20.1 16,374 27.7 13,166 29.3 15,171 30.2
Service fees 960 1.8 865 1.8 1,360 2.3 961 2.2 1,019 2.0
Advertising fees 40 0.1 83 0.2 41 0.1 25 0.1 77 0.1
Other
miscellaneous
income 164 0.3 132 0.3 118 0.2 99 0.2 239 0.5
52,705 100.0 48,267 100.0 59,113 100.0 44,876 100.0 50,247 100.0
Revenue from our B2B Business in FY2011, FY2012, FY2013, 9M2013 and 9M2014 were
approximately S$52.7 million, S$48.3 million, S$59.1 million, S$44.9 million and S$50.2 million,
respectively and these accounted for 86.3%, 85.6%, 85.0%, 85.2% and 85.7% of our total revenue
in FY2011, FY2012, FY2013, 9M2013 and 9M2014, respectively.
Revenue –
B2C Business
FY2011 FY2012 FY2013 9M2013 9M2014
S$’000 % S$’000 % S$’000 % S$’000 % S$’000 %
Recurring
revenue 6,284 74.6 6,313 77.5 7,460 72.1 5,523 70.7 6,241 74.8
Non-recurring
revenue:
Commission
income 1,730 20.6 1,157 14.2 1,972 19.0 1,589 20.3 1,485 17.8
Service fees 261 3.1 320 3.9 465 4.5 351 4.5 432 5.2
Advertising fees 143 1.7 357 4.4 460 4.4 347 4.5 190 2.2
8,418 100.0 8,147 100.0 10,357 100.0 7,810 100.0 8,348 100.0
Revenue from our B2C Business in FY2011, FY2012, FY2013, 9M2013 and 9M2014 were
approximately S$8.4 million, S$8.1 million, S$10.4 million, S$7.8 million and S$8.3 million,
respectively and these accounted for 13.7%, 14.4%, 15.0%, 14.8% and 14.3% of our total revenue
in FY2011, FY2012, FY2013, 9M2013 and 9M2014, respectively.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF RESULTS OF
OPERATIONS AND FINANCIAL POSITION
72
The key factors that can affect our revenue include the following:
(a) general economic and financial market conditions which will have an impact on the general
demand for Investment Products by our Customers and the size of our AUA;
(b) number of competitors and the level of competition which will impact our market share and
profit margins;
(c) our ability to adapt to changes in customers’ expectations and changes in market conditions
through the development of new services or enhancement of existing services, which is
consequential to our ability to retain our existing customer base and to grow our market
share; and
(d) changes in laws and regulations governing capital market activities and financial advisory
services which will have an impact on our ability to conduct businesses.
A detailed account of the risk factors affecting our business activities are set out under the section
entitled “Risk Factors” in this Prospectus.
Commission and fee paid or payable to third party financial advisers
This represents the commission that we pay to the FAs, who transact with us on behalf of
adviser-assisted investors, under our B2B Business. There is no commission paid or payable for
our B2C Business division as the Customers are DIY investors.
The commission and fee that we pay to the FAs is variable and based on a commission and fee
sharing arrangement between such FAs and us. The following table shows the breakdown of the
commission and fee paid or payable to our FAs, by recurring and non-recurring basis:
Commission
and fee paid or
payable –
B2B Business
FY2011 FY2012 FY2013 9M2013 9M2014
S$’000 % S$’000 % S$’000 % S$’000 % S$’000 %
Share of
commission and
fee income from
recurring
revenue 24,436 68.0 21,422 71.1 23,057 60.9 17,239 59.1 18,222 58.3
Share of
commission
income from
non-recurring
revenue 11,483 32.0 8,701 28.9 14,827 39.1 11,937 40.9 13,045 41.7
35,919 100.0 30,123 100.0 37,884 100.0 29,176 100.0 31,267 100.0
Commission and fee payouts in FY2011, FY2012, FY2013, 9M2013 and 9M2014 were
approximately S$35.9 million, S$30.1 million, S$37.9 million, S$29.2 million and S$31.3 million,
respectively. These represented 58.8%, 53.4%, 54.5%, 55.4% and 53.4% of our total revenue in
FY2011, FY2012, FY2013, 9M2013 and 9M2014, respectively.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF RESULTS OF
OPERATIONS AND FINANCIAL POSITION
73
Net revenue
Net revenue represents revenue earned by our Group after commission and fee paid or payable
to third party financial advisers. Net revenue in FY2011, FY2012, FY2013, 9M2013 and 9M2014
were approximately S$25.2 million, S$26.3 million, S$31.6 million, S$23.5 million and S$27.3
million, respectively and these accounted for 41.2%, 46.6%, 45.5%, 44.6% and 46.6% of our total
revenue in FY2011, FY2012, FY2013, 9M2013 and 9M2014, respectively.
The following table shows the breakdown of our net revenue by recurring and non-recurring basis:
Net revenue –
B2B Business
& B2C
Business
FY2011 FY2012 FY2013 9M2013 9M2014
S$’000 % S$’000 % S$’000 % S$’000 % S$’000 %
Recurring
revenue 20,378 80.9 22,339 85.0 25,623 81.1 18,909 80.4 21,760 79.6
Non-recurring
revenue:
Commission
income 3,258 12.9 2,195 8.3 3,519 11.1 2,818 12.0 3,611 13.2
Service fee 1,221 4.8 1,185 4.5 1,825 5.8 1,312 5.6 1,451 5.3
Advertising fee 183 0.7 440 1.7 501 1.6 372 1.6 267 1.0
Other
miscellaneous
income 164 0.7 132 0.5 118 0.4 99 0.4 239 0.9
25,204 100.0 26,291 100.0 31,586 100.0 23,510 100.0 27,328 100.0
The following table shows the breakdown of our net revenue from continuing operations by
geographical segments:
Net revenue by
geographical
segment
FY2011 FY2012 FY2013 9M2013 9M2014
S$’000 % S$’000 % S$’000 % S$’000 % S$’000 %
Net revenue
from third
parties
Singapore 21,149 83.9 21,325 81.1 24,101 76.3 18,020 76.6 19,203 70.3
Hong Kong 3,655 14.5 4,393 16.7 6,503 20.6 4,767 20.3 7,046 25.8
Malaysia 400 1.6 573 2.2 982 3.1 723 3.1 1,079 3.9
25,204 100.0 26,291 100.0 31,586 100.0 23,510 100.0 27,328 100.0
MANAGEMENT’S DISCUSSION AND ANALYSIS OF RESULTS OF
OPERATIONS AND FINANCIAL POSITION
74
Other operating income
Other operating income relates mainly to investment income, government grant and gain or loss
on disposal of plant and equipment. Other operating income represented approximately 0.2%,
0.3%, 0.5%, 0.3% and 0.8% of our net revenue in FY2011, FY2012, FY2013, 9M2013 and
9M2014, respectively.
Gain on distribution to owners of our Company
Gain on distribution to owners of our Company in FY2013 arose due to the Restructuring Exercise
undertaken by our Company in FY2013 in relation to the disposal of our India business as
described in the section entitled “Restructuring Exercise” in this Prospectus. During the
Restructuring Exercise, our Company declared a dividend in specie of S$3.8 million via the pro
rata distribution of our Company’s entire investment in the India business to the shareholders of
our Company. This gain arose from the difference between the value of the declared dividend in
specie of S$3.8 million as mentioned above and the carrying amount of the net assets distributed
in our India business, as a result of the dividend in specie, of S$3.2 million. Please refer to the
section entitled “Restructuring Exercise” in this Prospectus for further details on the Restructuring
Exercise.
Operating expenses
The following table shows the changes in our total operating expenses as compared to the
changes in our net revenue in the last three (3) financial years and for the nine (9) months ended
30 September 2014.
FY2011 FY2012 FY2013 9M2013 9M2014
S$’000 S$’000 S$’000 S$’000 S$’000
Total operating expenses 22,810 22,408 23,582 17,652 19,653
Change in total operating
expenses (%) – (1.8) 5.2 – 11.3
Net revenue 25,204 26,291 31,586 23,510 27,328
Change in net revenue (%) – 4.3 20.1 – 16.2
Our operating expenses include depreciation of plant and equipment, amortisation of intangible
assets, staff costs and other operating expenses. These represented approximately 90.5%,
85.2%, 74.6%, 75.1% and 71.9% of our net revenue in FY2011, FY2012, FY2013, 9M2013 and
9M2014, respectively.
Depreciation of plant and equipment accounted for approximately 4.3%, 3.5%, 3.0%, 3.0% and
3.0% of operating expenses in FY2011, FY2012, FY2013, 9M2013 and 9M2014, respectively.
Amortisation of intangible assets accounted for approximately 1.5%, 0.3%, 0.7%, 0.7% and 0.7%
of operating expenses in FY2011, FY2012, FY2013, 9M2013 and 9M2014, respectively.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF RESULTS OF
OPERATIONS AND FINANCIAL POSITION
75
Staff costs accounted for approximately 53.9%, 53.2%, 56.4%, 56.5% and 57.2% of operating
expenses in FY2011, FY2012, FY2013, 9M2013 and 9M2014, respectively. Our staff costs mainly
comprise wages, salaries, bonus, employer’s contribution to defined contribution plans, staff
welfare and benefits.
Other operating expenses accounted for approximately 40.3%, 43.0%, 39.9%, 39.8% and 39.1%
of operating expenses in FY2011, FY2012, FY2013, 9M2013 and 9M2014, respectively. Other
operating expenses mainly comprise advertising and promotion expenses, office rental, bank
charges, information technology service and maintenance expenses, postage and courier and
printing and stationery expenses.
Tax expense
Our tax expense for FY2011, FY2012, FY2013, 9M2013 and 9M2014 comprises current tax
expense and deferred tax expense. Current tax expense is the expected tax payable on the
taxable income for FY2011, FY2012, FY2013, 9M2013 and 9M2014 using tax rates enacted or
substantively enacted at the respective reporting dates, and any adjustment to tax payable in
respect of previous years. Deferred tax is recognised in respect of temporary differences between
the carrying amounts of assets and liabilities for financial reporting purposes and the amounts
used for taxation purposes.
Deferred tax assets are recognised for unused tax losses and deductible temporary differences,
to the extent that it is probable that future taxable profits will be available against which they can
be utilised.
Our operations in Singapore, Malaysia and Hong Kong are subject to corporate tax rates of 17.0%,
25.0% and 16.5%, respectively.
Our tax expense and the effective tax rates are set out below:
FY2011 FY2012 FY2013 9M2013 9M2014
S$’000 S$’000 S$’000 S$’000 S$’000
Current tax expense 376 685 555 573 319
Deferred tax expense (124) – 18 (23) 62
Tax expense 252 685 573 550 381
Effective tax rate (%) 10.6 17.4 6.5 9.2 4.8
Other than in FY2012, the effective tax rates were lower than the statutory tax rates in the
countries that our Group operates in, mainly due to effects of utilisation of unabsorbed capital
allowances and tax losses from prior years, partial tax exemption and relief, tax rebates and tax
incentives. The effective tax rate in FY2012 was close to the statutory corporate tax rate in
Singapore.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF RESULTS OF
OPERATIONS AND FINANCIAL POSITION
76
Profit from continuing operations
The following table shows the breakdown of our profit after tax from continuing operations by
geographical segments:
Profit/(loss) after tax
FY2011 FY2012 FY2013 9M2013 9M2014
S$’000 S$’000 S$’000 S$’000 S$’000
Singapore 5,533 5,637 8,436
(1)
5,649 6,451
Hong Kong (1,973) (1,188) 400 237 1,589
Malaysia (1,438) (1,193) (594) (485) (84)
China
(2)
– – – – (379)
2,122 3,256 8,242 5,401 7,577
Notes:
(1) The profit after tax in our Singapore operation includes a one-off gain on distribution to owners of our Company of
S$0.6 million as a result of the Restructuring Exercise undertaken by our Company in October 2013. Please refer
to the section entitled “Restructuring Exercise” in this Prospectus for more details.
(2) We started our operation in China in 2014, which is still in the start-up phase.
INFLATION
The impact of inflation on our financial performance over the Periods Under Review was not
significant.
SEASONALITY
Our business is generally not subject to any annual seasonal trend. However, based on our
experience, the nature of our business activity is subject to the volatility in financial markets. We
are dependent mainly on the size of our AUA, the growth of new subscribers to our Platform and
the number of financial advisers using our Platform. The above-mentioned factors are generally
subject to cyclical movements in financial markets.
REVIEW OF PAST OPERATING PERFORMANCE
FY2011 vs FY2012
Revenue
Revenue decreased by approximately S$4.7 million or 7.7%, from S$61.1 million in FY2011 to
S$56.4 million in FY2012. This was due to the decrease in revenue from our B2B Business of
S$4.4 million or 8.3%, from S$52.7 million in FY2011 to S$48.3 million in FY2012 and the
decrease in revenue from our B2C Business of S$0.3 million or 3.6%, from S$8.4 million in
FY2011 to S$8.1 million in FY2012.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF RESULTS OF
OPERATIONS AND FINANCIAL POSITION
77
The decrease in revenue from our B2B Business was due mainly to the following reasons:
(i) a decrease in commission income from non-recurring revenue by approximately S$3.3
million or 25.4%, from S$13.0 million in FY2011 to S$9.7 million in FY2012, which was due
mainly to the decrease in unit trusts subscriptions from S$664.0 million in FY2011 to S$628.0
million in FY2012; and
(ii) a decrease in recurring revenue by approximately S$1.1 million or 2.9%, from S$38.5 million
in FY2011 to S$37.4 million in FY2012. This was due mainly to the decrease in wrap fee
commission from S$20.0 million in FY2011 to S$18.9 million in FY2012 as a result of wrap
fee rate revision in July 2011, following the capping of the wrap fees chargeable to CPF
investment accounts at 1.00% per annum with effect from 1 July 2012 by the CPFB. The
average AUA for our B2B business in FY2012 was approximately S$2.96 billion, which was
unchanged as compared to FY2011.
The decrease in revenue from our B2C Business was due mainly to a decrease in commission
income from non-recurring revenue by approximately S$0.5 million or 29.4%, from S$1.7 million
in FY2011 to S$1.2 million in FY2012. The average AUA for our B2C Business in FY2012 and
FY2011 was approximately S$0.95 billion and S$0.94 billion respectively, and the unit trusts
subscriptions increased from S$283.0 million in FY2011 to S$313.0 million in FY2012. The
decrease in commission income from non-recurring revenue was due mainly to an increase in unit
trust subscription with lower margins. This was partially offset by an increase in revenue from
advertising fees by approximately S$0.2 million or 200.0%, from S$0.1 million in FY2011 to S$0.3
million in FY2012, which was due mainly to an increase in advertising income from the fund
houses.
Commission and fee paid or payable to third party financial advisers
Commission and fee paid or payable to third party financial advisers decreased by approximately
S$5.8 million or 16.2%, from S$35.9 million in FY2011 to S$30.1 million in FY2012. The decrease
was mainly due to a decrease in revenue from our B2B Business and a one-off payment to our FAs
in 2011 for the administrative costs incurred by our FAs when we implemented a Platform Fees
structure.
Net revenue
As a result of the factors discussed above, net revenue for the year increased by approximately
S$1.1 million or 4.4%, from S$25.2 million in FY2011 to S$26.3 million in FY2012, and net revenue
as a proportion of average AUA for the year increased from 0.651% in FY2011 to 0.672% in
FY2012.
Breaking down by business divisions, the net revenue generated from our B2B Business
increased from approximately S$16.8 million in FY2011 to S$18.2 million in FY2012. The net
revenue generated from our B2C Business decreased from S$8.4 million in FY2011 to S$8.1
million in FY2012.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF RESULTS OF
OPERATIONS AND FINANCIAL POSITION
78
Breaking down by geographical segments, the net revenue generated from our Singapore
operation increased from S$21.1 million in FY2011 to S$21.3 million in FY2012. The net revenue
generated from our Hong Kong operation increased from S$3.7 million in FY2011 to S$4.4 million
in FY2012. The net revenue generated from our Malaysian operation increased from S$0.4 million
in FY2011 to S$0.6 million in FY2012.
Other operating income
Other operating income increased by approximately S$27,000 or 46.6%, from S$58,000 in
FY2011 to S$85,000 in FY2012. The increase was due mainly to increases in investment income
and other miscellaneous income.
Operating expenses
Depreciation of plant and equipment decreased by approximately S$0.2 million or 20.0%, from
S$1.0 million in FY2011 to S$0.8 million in FY2012 as certain plant and equipment were fully
depreciated in FY2011 and FY2012.
Amortisation of intangible assets decreased by approximately S$0.2 million or 66.6%, from S$0.3
million in FY2011 to S$0.1 million in FY2012 as certain intangible assets were fully amortised in
FY2011 and FY2012.
Staff costs decreased by approximately S$0.4 million or 3.3%, from S$12.3 million in FY2011 to
S$11.9 million in FY2012 due mainly to a decrease in payroll and staff-related expenses. Our staff
number decreased from 229 as at 31 December 2011 to 200 as at 31 December 2012.
Other operating expenses increased by approximately S$0.4 million or 4.3%, from S$9.2 million
in FY2011 to S$9.6 million in FY2012. The increase was due mainly to increases in advertising
and promotion expenses, IT maintenance and services and office rental as a result of relocation
of our Singapore office in April 2011.
Overall, total operating expenses decreased by approximately S$0.4 million or 1.8%, from S$22.8
million in FY2011 to S$22.4 million in FY2012.
Finance income
Finance income decreased by approximately S$14,000 or 23.7%, from S$59,000 in FY2011 to
S$45,000 in FY2012. Finance income comprises mainly interest income from banks and money
market funds.
Finance expense
Finance expense decreased by approximately S$65,000 or 47.4%, from S$137,000 in FY2011 to
S$72,000 in FY2012. Finance expense comprises mainly interest expense from bank borrowings.
Profit before tax
Profit before tax increased by approximately S$1.5 million or 62.5%, from S$2.4 million in FY2011
to S$3.9 million in FY2012.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF RESULTS OF
OPERATIONS AND FINANCIAL POSITION
79
Tax expense
Tax expense increased by approximately S$0.4 million or 133.3%, from S$0.3 million in FY2011
to S$0.7 million in FY2012 due mainly to the increase in our taxable income. Our effective tax
rates for FY2011 and FY2012 were 10.6% and 17.4% respectively. The lower effective tax rate for
FY2011 was due mainly to tax benefits arising from writing-down allowances on our intellectual
property which was fully claimed by our Company during five years from FY2007 to FY2011.
Profit from continuing operations
Profit from continuing operations increased by approximately S$1.2 million or 57.1%, from S$2.1
million in FY2011 to S$3.3 million in FY2012.
Breaking down by geographical segments, the profit generated from our Singapore operation
increased from S$5.5 million in FY2011 to S$5.6 million in FY2012. The loss incurred by our Hong
Kong operation decreased from S$2.0 million in FY2011 to S$1.2 million in FY2012. The loss
incurred by our Malaysian operation decreased from S$1.4 million in FY2011 to S$1.2 million in
FY2012.
Loss from discontinued operation, net of tax
Loss from discontinued operation, net of tax decreased by approximately S$0.3 million or 15.8%,
from S$1.9 million in FY2011 to S$1.6 million in FY2012.
Profit for the year
Profit for the year increased by approximately S$1.4 million or 700.0%, from S$0.2 million in
FY2011 to S$1.6 million in FY2012.
FY2012 vs FY2013
Revenue
Revenue increased by approximately S$13.1 million or 23.2%, from S$56.4 million in FY2012 to
S$69.5 million in FY2013. This was due to the increase in revenue from our B2B Business of
S$10.8 million or 22.4%, from S$48.3 million in FY2012 to S$59.1 million in FY2013, and the
increase in revenue from our B2C Business of S$2.3 million or 28.4%, from S$8.1 million in
FY2012 to S$10.4 million in FY2013.
The increase in revenue from our B2B Business was due mainly to the following reasons:
(i) an increase in commission income from non-recurring revenue by approximately S$6.7
million or 69.1%, from S$9.7 million in FY2012 to S$16.4 million in FY2013. This was due to
an increase in unit trusts subscriptions from S$628.0 million in FY2012 to S$890.0 million in
FY2013, arising from improved market sentiments and market conditions and the higher
growth rate of our operations in Hong Kong and Malaysia; and
(ii) an increase in recurring revenue by approximately S$3.8 million or 10.2%, from S$37.4
million in FY2012 to S$41.2 million in FY2013. This was due to an increase in the average
AUA for our B2B Business from approximately S$2.96 billion in FY2012 to approximately
S$3.34 billion in FY2013, arising from improved market sentiments and market conditions
and the inflow of investments from our Customers.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF RESULTS OF
OPERATIONS AND FINANCIAL POSITION
80
The increase in revenue from our B2C Business was due mainly to the following reasons:
(i) increase in recurring revenue by approximately S$1.2 million or 19.0%, from S$6.3 million in
FY2012 to S$7.5 million in FY2013. This was due to an increase in the average AUA for our
B2C Business from approximately S$0.95 billion in FY2012 to approximately S$1.12 billion
in FY2013; and
(ii) increase in commission income from non-recurring revenue by approximately S$0.8 million
or 66.7%, from S$1.2 million in FY2012 to S$2.0 million in FY2013. This was due to an
increase in unit trusts subscriptions from S$313.0 million for FY2012 to S$475.0 million for
FY2013.
Commission and fee paid or payable to third party financial advisers
Commission and fee paid or payable to third party financial advisers increased by approximately
S$7.8 million or 25.9%, from S$30.1 million in FY2012 to S$37.9 million in FY2013. The increase
was in line with the increase in revenue from our B2B Business.
Net revenue
As a result of the factors discussed above, net revenue for the year increased by approximately
S$5.3 million or 20.2%, from S$26.3 million in FY2012 to S$31.6 million in FY2013, and net
revenue as a proportion of average AUA for the year increased from 0.672% in FY2012 to 0.708%
in FY2013.
Breaking down by business divisions, the net revenue generated from our B2B Business
increased from S$18.2 million in FY2012 to S$21.2 million in FY2013. The net revenue generated
from our B2C Business increased from S$8.1 million in FY2012 to S$10.4 million in FY2013.
Breaking down by geographical segments, the net revenue generated from our Singapore
operation increased from S$21.3 million in FY2012 to S$24.1 million in FY2013. The net revenue
generated from our Hong Kong operation increased from S$4.4 million in FY2012 to S$6.5 million
in FY2013. The net revenue generated from our Malaysian operation increased from S$0.6 million
in FY2012 to S$1.0 million in FY2013.
Other operating income
Other operating income increased by approximately S$0.1 million or 100.0%, from S$0.1 million
in FY2012 to S$0.2 million in FY2013. The increase was due mainly to an increase in our
investment income.
Gain on distribution to owners of our Company
A gain on distribution to owners of the Company was approximately S$0.6 million in FY2013. It
arose due to the Restructuring Exercise undertaken by our Company in October 2013. Please
refer to the section entitled “Restructuring Exercise” in this Prospectus for further details on the
Restructuring Exercise.
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81
Operating expenses
Depreciation of plant and equipment decreased by approximately S$0.1 million or 12.5%, from
S$0.8 million in FY2012 to S$0.7 million in FY2013 as certain plant and equipment were fully
depreciated in FY2012 and FY2013.
Amortisation of intangible assets increased by approximately S$0.1 million or 100.0%, from S$0.1
million in FY2012 to S$0.2 million in FY2013. This was due mainly to additions of intangible assets
in FY2013.
Staff costs increased by approximately S$1.4 million or 11.8%, from S$11.9 million in FY2012 to
S$13.3 million in FY2013 due mainly to an increase in payroll and staff-related expenses. Our staff
number increased from 200 as at 31 December 2012 to 210 as at 31 December 2013.
Other operating expenses decreased by approximately S$0.2 million or 2.1%, from S$9.6 million
in FY2012 to S$9.4 million in FY2013. This was due mainly to a decrease in advertising and
promotion expense.
Overall, total operating expenses increased by approximately S$1.2 million or 5.2%, from S$22.4
million in FY2012 to S$23.6 million in FY2013.
Finance income
Finance income decreased by approximately S$6,000 or 13.3%, from S$45,000 in FY2012 to
S$39,000 in FY2013. Finance income comprises mainly interest income from banks and money
market funds.
Finance expense
Finance expense decreased by approximately S$62,000 or 86.1%, from S$72,000 in FY2012 to
S$10,000 in FY2013 due to the full repayment of bank borrowing in FY2013.
Profit before tax
Profit before income tax increased by approximately S$4.9 million or 125.6%, from S$3.9 million
in FY2012 to S$8.8 million in FY2013.
Tax expense
Tax expense decreased by approximately S$0.1 million or 14.3%, from S$0.7 million in FY2012
to S$0.6 million in FY2013, due mainly to effects of utilisation of unabsorbed tax losses from prior
years by our Hong Kong operation and tax incentives enjoyed by our Singapore operation in
FY2013. Our effective tax rates for FY2012 and FY2013 were 17.4% and 6.5% respectively.
Profit from continuing operations
Profit from continuing operations increased by approximately S$5.0 million or 156.3%, from S$3.2
million in FY2012 to S$8.2 million in FY2013.
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82
Breaking down by geographical segment and after excluding the one-off gain of approximately
S$0.6 million on distribution to owners of our Company in FY2013, the profit generated from our
Singapore operation increased from S$5.7 million in FY2012 to S$7.8 million in FY2013. Our Hong
Kong operation managed a turnaround from a loss of S$1.2 million in FY2012 to a profit of S$0.4
million in FY2013. The loss incurred by our Malaysian operation decreased from S$1.2 million in
FY2012 to S$0.6 million in FY2013.
Loss from discontinued operation, net of tax
Loss from discontinued operation, net of tax increased by approximately S$1.6 million or 100.0%,
from S$1.6 million in FY2012 to S$3.2 million in FY2013. This was due mainly to an accumulative
exchange difference of S$2.8 million that was reclassified from equity to profit or loss as a result
of the disposal of our India operation in FY2013. For more details on the disposal of our India
operations, please refer to the section entitled “Restructuring Exercise” in this Prospectus.
Profit for the year
Profit for the year increased by approximately S$3.5 million or 218.8%, from S$1.6 million in
FY2012 to S$5.1 million in FY2013.
9M2013 vs 9M2014
Revenue
Revenue increased by approximately S$5.9 million or 11.2%, from S$52.7 million in 9M2013 to
S$58.6 million in 9M2014. This was due to an increase in revenue from our B2B Business of S$5.3
million or 11.8%, from S$44.9 million in 9M2013 to S$50.2 million in 9M2014, and the increase in
revenue from our B2C Business of S$0.5 million or 6.4%, from S$7.8 million in 9M2013 to S$8.3
million in 9M2014.
The increase in revenue from our B2B Business was due mainly to the following reasons:
(i) an increase in recurring revenue by approximately S$3.1 million or 10.1%, from S$30.6
million in 9M2013 to S$33.7 million in 9M2014. This was due to an increase in the average
AUA for our B2B Business from approximately S$3.31 billion in 9M2013 to approximately
S$3.63 billion in 9M2014, arising from the inflow of investments from our Customers; and
(ii) an increase in commission income from non-recurring revenue by approximately S$2.0
million or 15.2%, from S$13.2 million in 9M2013 to S$15.2 million in 9M2014. This was due
to an increase in unit trusts subscriptions from S$700.0 million in 9M2013 to S$773.0 million
in 9M2014 arising from the continued growth of our operations in Hong Kong and Malaysia.
The increase in revenue from our B2C Business was due mainly to an increase in recurring
revenue by approximately S$0.7 million or 12.7%, from S$5.5 million in 9M2013 to S$6.2 million
in 9M2014. This was due to an increase of approximately S$0.15 billion or 13.5% in the average
AUA for our B2C Business from approximately S$1.11 billion in 9M2013 to approximately S$1.26
billion in 9M2014. The increase in recurring revenue was partially offset by a decrease in
commission income from non-recurring revenue by approximately S$0.1 million or 6.3%, from
S$1.6 million in 9M2013 to S$1.5 million in 9M2014 due mainly to a decrease in unit trusts
subscriptions from S$380.0 million in 9M2013 to S$365.0 million in 9M2014.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF RESULTS OF
OPERATIONS AND FINANCIAL POSITION
83
Commission and fee paid or payable to third party financial advisers
Commission and fee paid or payable to third party financial advisers increased by approximately
S$2.1 million or 7.2%, from S$29.2 million in 9M2013 to S$31.3 million in 9M2014. The increase
was in line with the increase in revenue from our B2B Business.
Net revenue
As a result of the factors discussed above, net revenue increased by approximately S$3.8 million
or 16.2%, from S$23.5 million in 9M2013 to S$27.3 million in 9M2014, and annualised net revenue
as a proportion of average AUA for the period increased from 0.709% in 9M2013 to 0.745% in
9M2014.
Breaking down by business divisions, the net revenue generated from our B2B Business
increased from S$15.7 million in 9M2013 to S$18.9 million in 9M2014. The net revenue generated
from our B2C Business increased from S$7.8 million in 9M2013 to S$8.3 million in 9M2014.
Breaking down by geographical segments, the net revenue generated from our Singapore
operation increased from S$18.0 million in 9M2013 to S$19.2 million in 9M2014. The net revenue
generated from our Hong Kong operation increased from S$4.8 million in 9M2013 to S$7.0 million
in 9M2014. The net revenue generated from our Malaysian operation increased from S$0.7 million
in 9M2013 to S$1.1 million in 9M2014.
Other operating income
Other operating income increased by approximately S$137,000 or 190.3%, from S$72,000 in
9M2013 to S$209,000 in 9M2014. The increase was due mainly to increases in investment income
and government grant receipts. The government grant received in 9M2014 comprised of (i) a
one-off bonus of S$22,000 under the Productivity and Innovation Credit scheme, and (ii) refunds
of approximately S$46,000 under the Wage Credit Scheme, and the Wage Credit Scheme is valid
for the period of FY2013 to FY2015.
Operating expenses
There were no significant changes in depreciation of plant and equipment and amortisation of
intangible assets.
Staff costs increased by approximately S$1.2 million or 12.0%, from approximately S$10.0 million
in 9M2013 to S$11.2 million in 9M2014 due mainly to an increase in payroll and staff-related
expenses. Our staff number increased from 208 as at 30 September 2013 to 237 as at 30
September 2014.
Other operating expenses increased by approximately S$0.7 million or 10.0%, from S$7.0 million
in 9M2013 to S$7.7 million in 9M2014. The increase was due mainly to increases in IT
maintenance and services, insurance costs and business development costs for set up of our new
operation in the PRC in 9M2014. In addition, in 9M2014, an amount of approximately S$0.5 million
arising from outstanding Wrap Fees receivables from our adviser-assisted investors for previous
years was written off. As these Wrap Fees receivables consist of commission income significantly
payable to third party financial advisers, a bad debt of approximately S$36,000 arising from the
aforementioned write-off was recognised in profit or loss in 9M2014, after taking into consideration
MANAGEMENT’S DISCUSSION AND ANALYSIS OF RESULTS OF
OPERATIONS AND FINANCIAL POSITION
84
the amount payable to third party financial advisers and an impairment allowance of approximately
S$14,000 arising from these Wrap Fee receivables that had been recognised in the Group’s
consolidated financial statements for FY2013. Currently, our Group experiences minimal
instances of non-payment from our adviser-assisted investors of the Wrap Fees due to us as a
majority of our adviser-assisted investors have converted to our current Wrap Fees collection
method which involves the redemption of unit trusts from unit holdings of such adviser-assisted
investors. Save as disclosed above, our Group does not have any issues with the collection of
material amounts of trade and other receivables outstanding as at 30 September 2014.
Overall, total operating expenses increased by approximately S$2.0 million or 11.3%, from S$17.7
million in 9M2013 to S$19.7 million in 9M2014.
Finance income
Finance income increased by approximately S$43,000 or 138.7%, from S$31,000 in 9M2013 to
S$74,000 in 9M2014. Finance income comprises mainly interest income from banks and money
market funds.
Finance expense
There was no finance expense incurred in 9M2014, as our remaining bank borrowing was fully
repaid in 9M2013.
Share of result of associate, net of tax
Share of result of associate, net of tax was less than S$1,000 in 9M2014. In July 2014, our Group
acquired a 19.9% stake in Providend by acquiring 30,384 newly issued preferred shares at
S$13.17 per preferred share for an aggregate consideration of approximately S$400,157. Please
refer to the section entitled “Our Business – History and Development” in this Prospectus for
further details on the acquisition.
Profit before tax
Profit before tax increased by approximately S$2.0 million or 33.3%, from S$6.0 million in 9M2013
to S$8.0 million in 9M2014.
Tax expense
Tax expense decreased by approximately S$0.2 million or 33.3%, from S$0.6 million in 9M2013
to S$0.4 million in 9M2014, due mainly to continued utilisation of unabsorbed tax losses from prior
years by our Hong Kong operation and tax incentives enjoyed by our Singapore operation in
9M2014 under the Productivity and Innovation Credit (“PIC”) Scheme. The PIC Scheme is valid
for the period from FY2010 to FY2017. Our effective tax rates for 9M2013 and 9M2014 were 9.2%
and 4.8% respectively.
Profit from continuing operations
Profit from continuing operations increased by approximately S$2.2 million or approximately
40.7%, from approximately S$5.4 million in 9M2013 to approximately S$7.6 million in 9M2014.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF RESULTS OF
OPERATIONS AND FINANCIAL POSITION
85
Breaking down by geographical segments and after excluding the business development costs of
S$0.4 million incurred for set up of our new operation in the PRC in 9M2014, the profit generated
from our Singapore operation increased from S$5.7 million in 9M2013 to S$6.5 million in 9M2014.
The profit from our Hong Kong operation grew further from S$0.2 million in 9M2013 to S$1.6
million in 9M2014. The loss incurred by our Malaysian operation decreased from S$0.5 million in
9M2013 to S$0.1 million in 9M2014.
Loss from discontinued operation, net of tax
Loss from discontinued operation, net of tax was approximately S$0.6 million in 9M2013. The
operation was discontinued in October 2013 as a result of the Restructuring Exercise undertaken
by our Company in FY2013. Please refer to the section entitled “Restructuring Exercise” in this
Prospectus for further details on the Restructuring Exercise.
Profit for the period
Profit for the period increased by approximately S$2.8 million or 58.3%, from S$4.8 million in
9M2013 to S$7.6 million in 9M2014.
REVIEW OF PAST FINANCIAL POSITION
Audited consolidated statement of financial position as at 31 December 2013
A review of our financial position based on the audited consolidated statement of financial position
of our Group as at 31 December 2013 is set out below.
Non-current assets
Our non-current assets comprised mainly (a) plant and equipment; (b) intangible assets; (c)
deferred tax assets; (d) other investments; and (e) club membership. Non-current assets
amounted to approximately S$4.4 million as at 31 December 2013. These non-current assets
represented approximately 11.4% of our total assets as at 31 December 2013.
These non-current assets comprised the following:
(a) Plant and equipment amounted to approximately S$1.6 million and accounted for 37.5% of
our total non-current assets as at 31 December 2013. Plant and equipment comprised
computer equipment, office equipment, furniture and fittings and office renovation;
(b) Intangible assets amounted to approximately S$0.7 million and accounted for 15.2% of our
total non-current assets as at 31 December 2013. Intangible assets comprised development
costs, computer software, intellectual properties and customer lists;
(c) Deferred tax assets amounted to approximately S$35,000 and accounted for 0.8% of our
total non-current assets as at 31 December 2013;
(d) Other investments amounted to approximately S$2.0 million and accounted for 46.2% of our
total non-current assets as at 31 December 2013. Other investments comprised our
investments in available-for-sale quoted securities; and
MANAGEMENT’S DISCUSSION AND ANALYSIS OF RESULTS OF
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86
(e) Club membership amounted to approximately S$11,000 and accounted for 0.3% of our total
non-current assets as at 31 December 2013.
Current assets
Our current assets comprised mainly (a) current tax receivable; (b) trade and other receivables;
(c) prepayments; (d) cash at bank and in hand; and (e) money market funds. Current assets
amounted to approximately S$34.1 million as at 31 December 2013. These current assets
represented approximately 88.6% of our total assets as at 31 December 2013.
These current assets comprised the following:
(a) Current tax receivable amounted to approximately S$5,000 and accounted for less than 0.1%
of our total current assets as at 31 December 2013;
(b) Trade and other receivables amounted to approximately S$16.8 million and accounted for
49.3% of our total current assets as at 31 December 2013. Trade and other receivables
comprised net trade receivables, accrued revenue and deposits and other receivables which
amounted to S$7.1 million, S$7.9 million and S$1.8 million respectively;
(c) Prepayments amounted to approximately S$0.6 million and accounted for 1.8% of our total
current assets as at 31 December 2013. Prepayments comprised mainly of insurance
premium, license fees, maintenance fees and advance payment to vendors;
(d) Cash at bank and in hand amounted to approximately S$16.3 million and accounted for
47.8% of our total current assets as at 31 December 2013; and
(e) Money market funds amounted to approximately S$0.4 million and accounted for 1.1% of our
total current assets as at 31 December 2013. Money market funds are considered fully liquid
investment readily convertible into known amount of cash and cash equivalents which are
subject to an insignificant risk of changes in value.
Held under trust
Some of the subsidiaries in our Group receive and hold monies deposited by DIY investors,
adviser-assisted investors and other institutions in the course of our conduct of the regulated
activities. These clients’ monies are maintained in one (1) or more trust bank accounts which are
separately maintained from the bank accounts of our Group. Depending on the banks at which
such trust bank accounts are maintained and the prevailing interest rates, the Group may earn
interest income from the monies held under trust.
Non-current liabilities
Our non-current liabilities comprised mainly deferred tax liabilities and other payables. Non-
current liabilities amounted to approximately S$0.4 million as at 31 December 2013. These
non-current liabilities represented approximately 2.9% of our total liabilities as at 31 December
2013.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF RESULTS OF
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87
These non-current liabilities comprised the following:
(a) Deferred tax liabilities amounted to approximately S$77,000 and accounted for 17.9%, of our
total non-current liabilities as at 31 December 2013; and
(b) Other payables amounted to approximately S$0.4 million and accounted for 82.1%, of our
total non-current liabilities as at 31 December 2013. Other payables comprised the
non-current portion of accrued operating expenses payable to a third party.
Current liabilities
Our current liabilities comprised mainly (a) trade and other payables and (b) current tax payable.
Current liabilities amounted to approximately S$13.4 million as at 31 December 2013. These
current liabilities represented approximately 97.1% of our total liabilities as at 31 December 2013.
These current liabilities comprised the following:
(a) Trade and other payables amounted to approximately S$12.8 million and accounted for
95.5% of our total current liabilities as at 31 December 2013. Trade and other payables
comprised trade payables, accrued operating expenses and deposits received which
amounted to S$1.0 million, S$11.4 million and S$0.4 million respectively; and
(b) Current tax payable amounted to approximately S$0.6 million and accounted for 4.5% of our
total current liabilities as at 31 December 2013.
Equity attributable to owners of our Company
Equity attributable to owners of our Company comprises share capital, fair value reserve, foreign
currency translation reserve, share option reserve, equity reserve and accumulated profits.
As at 31 December 2013, our Shareholders’ equity amounted to approximately S$24.6 million.
Consolidated statement of financial position as at 30 September 2014
A review of our financial position based on the unaudited consolidated statement of financial
position of our Group as 30 September 2014 is set out below.
Non-current assets
Our non-current assets comprised mainly (a) plant and equipment; (b) intangible assets; (c)
investment in associate; (d) deferred tax assets; (e) other investments; and (f) club membership.
Non-current assets amounted to approximately S$5.3 million as at 30 September 2014. These
non-current assets represented approximately 13.6% of our total assets as at 30 September 2014.
These non-current assets comprised the following:
(a) Plant and equipment amounted to approximately S$1.7 million and accounted for 32.6% of
our total non-current assets as at 30 September 2014. Plant and equipment comprised
computer equipment, office equipment, furniture and fittings and office renovation;
MANAGEMENT’S DISCUSSION AND ANALYSIS OF RESULTS OF
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88
(b) Intangible assets amounted to approximately S$1.3 million and accounted for 25.2% of our
total non-current assets as at 30 September 2014. Intangible assets comprised development
costs, computer software, intellectual properties and customer lists;
(c) Investment in associate amounted to approximately S$0.4 million and accounted for 7.6% of
our total non-current assets as at 30 September 2014;
(d) Deferred tax assets amounted to approximately S$22,000 and accounted for 0.4% of our
total non-current assets as at 30 September 2014;
(e) Other investments amounted to approximately S$1.8 million and accounted for 34.0% of our
total non-current assets as at 30 September 2014. Other investments comprised our
investments in available-for-sale quoted securities; and
(f) Club membership amounted to approximately S$11,000 and accounted for 0.2% of our total
non-current assets as at 30 September 2014.
Current assets
Our current assets comprised mainly (a) current tax receivable; (b) trade and other receivables;
(c) prepayments; (d) cash at bank and in hand; and (e) money market funds. Current assets
amounted to approximately S$33.6 million as at 30 September 2014. These current assets
represented approximately 86.4% of our total assets as at 30 September 2014.
These current assets comprised the following:
(a) Current tax receivable amounted to approximately S$30,000 and accounted for 0.1% of our
total current assets as at 30 September 2014;
(b) Trade and other receivables amounted to approximately S$17.9 million and accounted for
53.3% of our total current assets as at 30 September 2014. Trade and other receivables
comprised net trade receivables, accrued revenue and deposits and other receivables which
amounted to S$7.0 million, S$8.4 million and S$2.5 million respectively;
(c) Prepayments amounted to approximately S$0.5 million and accounted for 1.5% of our total
current assets as at 30 September 2014. Prepayments comprised mainly from insurance
premium, license fees, maintenance fees and advance payment to vendors;
(d) Cash at bank and in hand amounted to approximately S$15.1 million and accounted for
45.0% of our total current assets as at 30 September 2014; and
(e) Money market funds amounted to approximately S$36,000 and accounted for 0.1% of our
total current assets as at 30 September 2014. Money market funds are considered fully liquid
investment readily convertible into known amount of cash and cash equivalents which are
subject to an insignificant risk of changes in value.
Held under trust
Some of the subsidiaries in our Group receive and hold monies deposited by DIY investors,
adviser-assisted investors and other institutions in the course of the conduct of the regulated
activities. These clients’ monies are maintained in one (1) or more trust bank accounts which are
separately maintained from the bank accounts of our Group. Depending on the banks at which
such trust bank accounts are maintained and the prevailing interest rates, the Group may earn
interest income from the monies held under trust.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF RESULTS OF
OPERATIONS AND FINANCIAL POSITION
89
Non-current liabilities
Our non-current liabilities comprise mainly (a) deferred tax liabilities and (b) other payables.
Non-current liabilities amounted to approximately S$0.3 million as at 30 September 2014. These
non-current liabilities represented approximately 1.5% of our total liabilities as at 30 September
2014.
These non-current liabilities comprised the following:
(a) Deferred tax liabilities amounted to approximately S$0.1 million and accounted for 41.4% our
total non-current liabilities as at 30 September 2014; and
(b) Other payables amounted to approximately S$0.2 million and accounted for 58.6% of our
total non-current liabilities as at 30 September 2014. Other payables comprised the
non-current portion of accrued operating expenses payable to a third party.
Current liabilities
Our current liabilities comprise mainly (a) trade and other payables and (b) current tax payable.
Current liabilities amounted to approximately S$19.9 million as at 30 September 2014. These
current liabilities represented approximately 98.5% of our total liabilities as at 30 September 2014.
These current liabilities comprised the following:
(a) Trade and other payables amounted to approximately S$19.5 million and accounted for
98.1% of our total current liabilities as at 30 September 2014. Trade and other payables
comprised trade payables, accrued operating expenses, dividend payable and deposits
received which amounted to S$2.1 million, S$10.3 million, S$6.8 million and S$0.3 million
respectively; and
(b) Current tax payable amounted to approximately S$0.4 million and accounted for 1.9% of our
total current liabilities as at 30 September 2014.
Equity attributable to owners of our Company
Equity attributable to owners of our Company comprises share capital, fair value reserve, foreign
currency translation reserve, share option reserve, equity reserve and accumulated profits.
As at 30 September 2014, our Shareholders’ equity amounted to approximately S$18.7 million.
Dividends declared and paid
Subsequent to 31 December 2013, the Board of Directors declared a final dividend in respect of
FY2013 of approximately S$1.3 million on 14 February 2014. The dividend was paid on 7 May
2014.
During 9M2014, the Board of Directors declared the first interim dividend in respect of FY2014 of
approximately S$0.8 million on 28 April 2014, which was paid on 7 May 2014. The second interim
dividend in respect of FY2014 of approximately S$1.9 million was declared on 1 August 2014 and
paid on 29 August 2014. Another interim dividend in respect of FY2014 of approximately S$6.8
million was declared on 1 September 2014 and paid on 5 November 2014.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF RESULTS OF
OPERATIONS AND FINANCIAL POSITION
90
LIQUIDITY AND CAPITAL RESOURCES
We funded our growth and operations mainly through a combination of shareholders’ equity and
cash generated from operations.
The principal uses of these funds are for working capital purposes as well as for our capital
expenditure. Our material sources of unused liquidity as at the Latest Practicable Date are our
cash at bank and in hand.
Our Group does not have any borrowings and gearing as at the Latest Practicable Date.
As at the Latest Practicable Date, we had cash at hand and in bank of approximately S$12.3
million, money market fund of approximately S$0.1 million and unutilised banking facilities of
approximately S$6.0 million.
Our Directors are of the reasonable opinion that, as at the Latest Practicable Date, after taking into
account the cash flows generated from our operations, the available banking facilities and the
existing cash at bank and in hand balances and money market funds, our Group has adequate
working capital to meet our present requirements and for twelve (12) months from the date of
listing of our Company on the Official List of the SGX-ST.
We set out below a summary of our cash flow for the period under review:
FY2011 FY2012 FY2013 9M2014
S$’000 S$’000 S$’000 S$’000
Net cash from
operating activities 1,400 2,333 7,126 7,136
Net cash from/(used in) investing
activities 3,896 624 (174) (1,763)
Net cash used in
financing activities (3,734) (1,799) (3,741) (6,934)
Net increase in cash and
cash equivalents 1,562 1,158 3,211 (1,561)
Effect of exchange rate
fluctuations on cash held (38) (229) (8) 27
Cash and cash equivalents
(1)
at
beginning of the year/period 11,063 12,587 13,516 16,719
Cash and cash equivalents
(1)
at the
end of the financial year/period 12,587 13,516 16,719 15,185
Note:
(1) The money market funds held by our Group are included as our cash and cash equivalents as they are considered
fully liquid investment readily convertible into known amount of cash and cash equivalents which are subject to an
insignificant risk of changes in value.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF RESULTS OF
OPERATIONS AND FINANCIAL POSITION
91
FY2011
Net cash from operating activities
Net cash from operating activities was approximately S$1.4 million. This comprised operating
cash flows before changes in working capital of S$1.7 million, and there was no significant change
in working capital. In addition, we received interest income of S$59,000 and there was income tax
paid of S$0.2 million and interest paid of S$0.1 million.
Net cash from investing activities
Net cash from investing activities was approximately S$3.9 million, arising mainly from the
proceeds from redemption of quoted debts securities of S$12.4 million. This was partially offset
by the cash outflows of S$1.7 million in connection with purchase of plant and equipment and
intangible assets and the purchase of available-for-sale quoted debt securities of S$6.8 million.
Net cash used in financing activities
Net cash used in financing activities was approximately S$3.7 million, mainly attributable to
dividend paid to the owners of our Company of S$0.6 million, payment on acquisition of additional
interests in subsidiaries of S$0.8 million, payment on capital reduction to non-controlling interests
of S$1.9 million and repayment of unsecured bank loan of S$1.3 million. These were partially
offset by the proceeds received from issue of shares by a subsidiary of our Group to
non-controlling interests of S$0.8 million and the proceeds received from the issue of shares by
our Company of S$64,000.
Effect of exchange rate fluctuations on cash held
Effect of exchange rate fluctuations was a decrease of approximately S$38,000 in cash and cash
equivalents. It arose mainly from the conversion of cash balances held by our Group in foreign
currencies into the Singapore dollar equivalent.
FY2012
Net cash from operating activities
Net cash from operating activities was approximately S$2.3 million. This comprised operating
cash flows before changes in working capital of S$3.1 million, and adjusted by a decrease of
working capital of S$0.6 million. The decrease in working capital was due to net cash outflows
arising from the decrease in trade and other receivables of S$0.2 million and the decrease in trade
and other payables of S$0.8 million. In addition, we received interest income of S$45,000 and
there was income tax paid of S$0.2 million and interest paid of S$72,000.
Net cash from investing activities
Net cash from investing activities was approximately S$0.6 million, arising mainly from the
proceeds from redemption of quoted debts securities and quoted equity securities of S$4.5
million. This was partially offset by the cash outflows of S$0.2 million in connection with purchase
of plant and equipment and intangible assets and the purchase of available-for-sale quoted debt
securities of S$3.7 million.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF RESULTS OF
OPERATIONS AND FINANCIAL POSITION
92
Net cash used in financing activities
Net cash used in financing activities was approximately S$1.8 million, mainly attributable to
dividend paid to the owners of our Company of S$0.7 million, payment on acquisition of additional
interests in subsidiaries of S$0.3 million and repayment of unsecured bank loan of S$1.3 million.
These were partially offset by the proceeds received from issue of shares by a subsidiary of our
Group to non-controlling interests of S$0.3 million and the proceeds received from the issue of
shares by our Company of S$0.2 million.
Effect of exchange rate fluctuations on cash held
Effect of exchange rate fluctuations was a decrease of approximately S$0.2 million in cash and
cash equivalents. It arose mainly from the conversion of cash balances held by our Group in
foreign currencies into the Singapore dollar equivalent.
FY2013
Net cash from operating activities
Net cash from operating activities was approximately S$7.1 million. This comprised operating
cash flows before changes in working capital of S$7.9 million, and adjusted by a decrease of
working capital of S$0.1 million. The decrease in working capital was due to net cash outflows
arising from the increase in trade and other receivables of S$2.5 million and the increase in trade
and other payables of S$2.4 million. In addition, we received interest income of S$40,000 and
there was income tax paid of S$0.6 million and interest paid of S$10,000.
Net cash used in investing activities
Net cash used in investing activities was approximately S$0.2 million, mainly attributable to the
purchase of plant and equipment and intangible assets of S$1.0 million, the purchase of
available-for-sale quoted debt securities of S$2.1 million and the net cash outflow arising on
disposal of discontinued operation of S$2.2 million. These were partially offset by the proceeds
received from redemption of quoted debts securities of S$5.1 million.
Net cash used in financing activities
Net cash used in financing activities was approximately S$3.7 million, mainly attributable to
dividend paid to the owners of our Company of S$3.4 million and repayment of unsecured bank
loan of S$0.7 million. These were partially offset by the proceeds received from the issue of
shares by our Company of S$0.4 million.
Effect of exchange rate fluctuations on cash held
Effect of exchange rate fluctuations was a decrease of approximately S$8,000 in cash and cash
equivalents. It arose mainly from the conversion of cash balances held by our Group in foreign
currencies into the Singapore dollar equivalent.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF RESULTS OF
OPERATIONS AND FINANCIAL POSITION
93
9M2014
Net cash from operating activities
Net cash from operating activities was approximately S$7.1 million. This comprised operating
cash flows before changes in working capital of S$8.8 million, and adjusted by a decrease of
working capital of S$1.2 million. The decrease in working capital was due to net cash outflows
arising from an increase in trade and other receivables of S$1.5 million and an increase in trade
and other payables of S$0.3 million. In addition, we received interest income of S$73,000 and
there was income tax paid of S$0.5 million.
Net cash used in investing activities
Net cash used in investing activities was approximately S$1.8 million, mainly attributable to the
purchase of plant and equipment and intangible assets of S$1.7 million, the acquisition of interest
in an associate of S$0.4 million and the purchase of available-for-sale quoted debt securities of
S$3.0 million. These were partially offset by the proceeds from redemption of available-for-sale
quoted debts securities of S$3.3 million.
Net cash used in financing activities
Net cash used in financing activities was approximately S$6.9 million, mainly attributable to
dividend paid to the owners of our Company of S$4.1 million and payment in relation to the
acquisition of additional interests in subsidiaries of S$3.5 million to non-controlling interests. This
was partially offset by the proceeds received from the issue of shares by our Company of S$0.7
million.
Effect of exchange rate fluctuations on cash held
Effect of exchange rate fluctuations was an increase of approximately S$27,000 in cash and cash
equivalents. It arose mainly from the conversion of cash balances held by our Group in foreign
currencies into the Singapore dollar equivalent.
TRADE RECEIVABLES AND TRADE PAYABLES
We accrue our revenue on commission and fee that we will receive from fund houses and
Customers on a monthly basis. We generally bill the fund houses and Customers on quarterly
basis and recognise the amount billed as trade receivables.
When we accrue our revenue on commission and fee that we will receive from fund houses and
Customers, we also accrue the corresponding portion of the commission and fee that are payable
to third party financial advisers. Upon our receipt of the commission and fee from fund houses and
Customers, the corresponding amounts of commission and fee accrued to third party financial
advisers are recognised as trade payables.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF RESULTS OF
OPERATIONS AND FINANCIAL POSITION
94
The following tables show our net trade receivables, accrued revenue, trade payables and
accrued operating expenses as at 31 December 2013 and 30 September 2014 respectively.
As at
31 December
2013
As at
30 September
2014
S$’000 S$’000
Net trade receivables 7,079 6,972
Accrued revenue 7,907 8,436
14,986 15,408
As at
31 December
2013
As at
30 September
2014
S$’000 S$’000
Trade payables 1,068 2,069
Accrued operating expenses 11,744 10,525
12,812 12,594
The following tables show the ageing of our net trade receivables and trade payables as at
31 December 2013 and 30 September 2014 respectively.
As at
31 December 2013
As at
30 September 2014
Ageing of net trade receivables: S$’000 % S$’000 %
Not past due 6,260 88.4 6,805 97.6
Past due 0 – 30 days 181 2.6 13 0.2
Past due 31 – 120 days 57 0.8 43 0.6
Past due more than 120 days but less
than 1 year 41 0.6 13 0.2
Past due more than 1 year 540 7.6 98 1.4
7,079 100.0 6,972 100.0
As at
31 December 2013
As at
30 September 2014
Ageing of trade payables: S$’000 % S$’000 %
Not past due 1,068 100.0 2,069 100.0
MANAGEMENT’S DISCUSSION AND ANALYSIS OF RESULTS OF
OPERATIONS AND FINANCIAL POSITION
95
Our Company generally grants credit terms of 30 days in relation to our receivables, and credit
terms of 30 days are generally granted to our Company in respect of our payables.
Ageing of trade receivables and trade payables as at 31 December 2013
The amounts of our trade receivables not past due, past due within 30 days, past due more than
30 days but less than 1 year, and past due more than 1 year were approximately S$6.3 million,
S$0.2 million, S$0.1 million and S$0.5 million respectively and these accounted for 88.4%, 2.6%,
1.4% and 7.6% of our trade receivables as at 31 December 2013, respectively.
The amounts of our trade payables not past due were approximately S$1.1 million, which
accounted for 100.0% of our trade payables as at 31 December 2013.
Ageing of trade receivables and trade payables as at 30 September 2014
The amounts of our trade receivables not past due, past due within 30 days, past due more than
30 days but less than 1 year, and past due more than 1 year were approximately S$6.8 million,
less than S$0.1 million, S$0.1 million and S$0.1 million respectively and these accounted for
97.6%, 0.2%, 0.8% and 1.4% of our trade receivables as at 30 September 2014 respectively.
The amounts of our trade payables not past due were approximately S$2.1 million, which
accounted for 100.0% of our trade payables as at 30 September 2014.
CAPITAL EXPENDITURE AND DIVESTMENTS
The table below sets forth the material capital expenditure and divestments made by our Group
for FY2011, FY2012, FY2013 and 9M2014 and for the period from 1 October 2014 up to the Latest
Practicable Date:
FY2011 FY2012 FY2013 9M2014
1 October 2014
up to the Latest
Practicable Date
S$’000 S$’000 S$’000 S$’000 S$’000
Capital Expenditure
Computer equipment 242 85 815 631 116
Office equipment 14 4 25 5 6
Furniture and fittings 69 1 1 7 4
Office renovation 1,365 2 3 27 21
Development costs – – – 212 77
Computer software 24 122 14 607
(1)
7
Intellectual properties – – – – –
Customer lists – – 707
(2)
– –
Total 1,714 214 1,566 1,489 231
MANAGEMENT’S DISCUSSION AND ANALYSIS OF RESULTS OF
OPERATIONS AND FINANCIAL POSITION
96
FY2011 FY2012 FY2013 9M2014
1 October 2014
up to the Latest
Practicable Date
S$’000 S$’000 S$’000 S$’000 S$’000
Divestments
Computer equipment 1 2 17 – –
Office equipment 16 – 6 – –
(3)
Furniture and fittings 7 – 5 – –
Office renovation 7 – 10 – –
(3)
Development costs – – – – –
Computer software – – 3 – –
Intellectual properties – – 77 – –
Customer lists – – – – –
Total 31 2 118 – –
Notes:
(1) Our Group acquired various computer software from third-party vendors, including the upgraded version of the
Microsoft Windows operating system, database software and investment analysis software.
(2) Our Group acquired the customer list from a third party financial institution with a cash consideration of
approximately S$707,000.
(3) Less than S$1,000.
The above capital expenditures were incurred by our Group to support our business expansion in
the countries that our Group operates in and financed mainly by funds generated from our
operations.
The divestments of approximately S$118,000 in FY2013 were mainly attributable to the
discontinued operation as a result of the Restructuring Exercise undertaken by our Company in
FY2013.
COMMITMENTS AND CONTINGENT LIABILITIES
Capital commitments
As at the Latest Practicable Date, our Group has committed to the purchase of computer
equipment and computer software up to approximately S$0.2 million.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF RESULTS OF
OPERATIONS AND FINANCIAL POSITION
97
Operating lease commitments
As at the Latest Practicable Date, our Group has operating lease commitments in respect of
non-cancellable operating leases as follows:
As at the Latest
Practicable Date
Future minimum lease payments S$’000
Within one year 4,555
Within two to five years 7,714
12,269
Our Group leases a number of office premises under operating leases. Such leases have fixed
terms ranging from three (3) to six (6) years, with some leases having an option to renew the lease
after the expiry of the initial fixed term for a further term of one (1) to two (2) years. Our Group
expects to meet our operating lease commitments using cash generated from our operations.
Contingent liabilities
Our Group does not have any material contingent liabilities as at the Latest Practicable Date.
FOREIGN EXCHANGE EXPOSURE
Our operations in foreign countries are valued in the functional currency of our operations in each
country. As our reporting currency is Singapore dollar, we translate the assets and liabilities of our
foreign operations from their respective local currency into Singapore dollar at the rate prevailing
as at the balance sheet date. Fluctuations in exchange rates will affect the reported value of our
foreign operations from period to period.
Presently, we do not have any hedging policy with respect to foreign currency exposure as we did
not have significant foreign exchange risk exposure. In future, we may hedge our material foreign
currency transactions after taking into consideration the quantum and impact of our foreign
exchange risk exposure as well as the transaction costs of any hedging policy, and the prevailing
economic and operating conditions. All proposed hedging policies will be reviewed and approved
by our Board of Directors and the Audit Committee before implementation by our Group. The
Company will seek the approval of the Board of Directors for entering into any foreign exchange
hedging transactions, and the Company will put in place adequate measures which will be
reviewed and approved by the Audit Committee, who will also monitor the implementation of the
hedging policies, including reviewing the instruments, processes and practices in accordance with
the hedging policies approved by the Board of Directors and the Audit Committee.
Please refer to the section entitled “Risk Factors – We are exposed to foreign exchange risks” in
this Prospectus for further details.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF RESULTS OF
OPERATIONS AND FINANCIAL POSITION
98
You should read this in conjunction with the section entitled “Management’s Discussion and
Analysis of Financial Condition and Results of Operations” of this Prospectus, and the sections
entitled “Audited Consolidated Financial Statements for the Financial years ended 31 December
2011, 2012 and 2013”, “Unaudited Interim Consolidated Financial Statements for the Nine Months
ended 30 September 2014” and “Unaudited Pro Forma Consolidated Financial Statements for the
Financial Year ended 31 December 2013 and the Nine Months Ended 30 September 2014” as set
out in Appendix A, Appendix B and Appendix C of this Prospectus respectively.
The following table shows our cash and cash equivalents, capitalisation and indebtedness of our
Group as at the Latest Practicable Date:
(i) on an actual basis; and
(ii) as adjusted to give effect to the issuance of 32,800,000 New Shares pursuant to the Offering
and the 19,000,000 new Shares arising from the issuance of the Cornerstone Shares and the
application of the net proceeds.
Unaudited Actual As adjusted
S$’000 S$’000
Cash and cash equivalents 12,378 57,027
Indebtedness
Current loan and borrowings
– Secured and guaranteed – –
Non-current loans and borrowings
– Secured and guaranteed – –
Total indebtedness – –
Shareholders’ equity
Share capital 11,379 60,589
(1)
Reserves 8,364 8,364
(2)
Total shareholders’ equity 19,743 68,953
Total capitalisation and indebtedness 19,743 68,953
Notes:
(1) Not adjusted for costs arising from the Offering and the issuance of the Cornerstone Shares which shall be
capitalised.
(2) Not adjusted for costs arising from the Offering which shall be recognised as an expense.
CAPITALISATION AND INDEBTEDNESS
99
As at 30 September 2014 and the Latest Practicable Date, the total banking facilities of our Group,
all of which are unutilised, are as follows:
Borrowing Subsidiary Name of Bank
Type of Credit
Facility
Amount of
facilities
granted
Amount of
facilities
utilised
iFAST Financial Standard
Chartered Bank
Overdraft S$5.0 million –
iFAST HK Standard
Chartered Bank
(Hong Kong)
Limited
Overdraft US$0.5 million
(available in
multiple
currencies)
–
iFAST Capital
Malaysia
Standard
Chartered
Bank Malaysia
Berhad
Overdraft RM1 million –
The overdraft facility granted by Standard Chartered Bank is supported by a letter of set-off over
the deposit and the balances in the name of iFAST Financial, and Standard Chartered Bank may
at any time in its sole discretion suspend the availability of prime-based funds by reason of
circumstances affecting the money market including but not limited to volatile rate fluctuations or
tight liquidity. In addition, drawings under this facility are at all times subject to the availability of
funds. The overdraft facility granted by Standard Chartered Bank Malaysia Berhad is supported
by a corporate guarantee provided by our Company for the amount of RM1 million. The overdraft
facility granted by Standard Chartered Bank (Hong Kong) Limited is available in multiple
currencies and is supported by a corporate guarantee provided by our Company for the amount
of US$1 million.
As at the Latest Practicable Date, to the best of our Directors’ knowledge, we are not in breach
of any of the terms and conditions or covenants associated with any credit arrangement or bank
loans which could materially affect our financial position and results or business operations. Since
30 September 2014 to the Latest Practicable Date, there has been no material change to our
Group’s capitalisation or indebtedness.
As at the Latest Practicable Date, we have no outstanding borrowings which are due for
repayment within the next twelve (12) months.
CAPITALISATION AND INDEBTEDNESS
100
Offering Price S$0.95
NAV
(1)
The NAV per Share based on the consolidated balance sheet of our Group as
at 30 September 2014 (“NAV per Share”):
(a) before adjusting for the estimated net proceeds from the issuance of the
Cornerstone Shares and the New Shares and based on our pre-Offering
share capital of 204,425,334 Shares
9.17 cents
(b) after adjusting for the estimated net proceeds from the issuance of the
Cornerstone Shares and the New Shares and based on our post-
Offering enlarged share capital of 256,225,334 Shares
24.74 cents
Premium of the Offering Price over our NAV per Share:
(a) before adjusting for the estimated net proceeds from the issuance of the
Cornerstone Shares and the New Shares and based on our pre-Offering
share capital of 204,425,334 Shares
936.2%
(b) after adjusting for the estimated net proceeds from the issuance of the
Cornerstone Shares and the New Shares and based on our post-
Offering enlarged share capital of 256,225,334 Shares
284.0%
Earnings
Historical EPS for FY2013 based on the audited consolidated profit
attributable to owners of our Company from continuing operations and our
pre-Offering share capital of 204,425,334 Shares
4.15 cents
Historical EPS for FY2013 based on the audited consolidated profit
attributable to owners of our Company from continuing operations, assuming
that the Service Agreement had been in effect from the beginning of FY2013,
and based on our pre-Offering share capital of 204,425,334 Shares
4.13 cents
(1)
Price earnings ratio
Historical PER for FY2013 based on the audited consolidated profit
attributable to owners of our Company from continuing operations and our
pre-Offering share capital of 204,425,334 Shares
22.9 times
Historical PER for FY2013 based on the audited consolidated profit
attributable to owners of our Company from continuing operations, assuming
that the Service Agreement had been in effect from the beginning of FY2013,
and based on our pre-Offering share capital of 204,425,334 Shares
23.0 times
(1)
Net cash from operating activities
(2)
Historical net cash from operating activities per Share for FY2013 based on
the pre-Offering share capital of 204,425,334 Shares
3.5 cents
OFFERING STATISTICS
101
Historical net cash from operating activities per Share for FY2013, assuming
that the Service Agreement had been in effect from the beginning of FY2013,
based on the pre-Offering share capital of 204,425,334 Shares
3.5 cents
(1)
Ratio of Offering Price to net operating cash flow
Ratio of Offering Price to historical net cash from operating activities per
Share for FY2013 based on the pre-Offering share capital of 204,425,334
Shares
27.3 times
Ratio of Offering Price to historical net cash from operating activities per
Share for FY2013, assuming that the Service Agreement had been in effect
from the beginning of FY2013, based on the pre-Offering share capital of
204,425,334 Shares
27.4 times
(1)
Market capitalisation
Market capitalisation based on the post-Offering share capital of 256,225,334
Shares and the Offering Price of S$0.95
S$243.4 million
Notes:
(1) Had the Service Agreement been in effect from the beginning of FY2013, our Group’s audited consolidated profit
attributable to owners of our Company from continuing operations for FY2013 would be approximately S$8,433,000
and our consolidated net cash from operating activities for FY2013 would be approximately S$7,084,000.
(2) Net cash from operating activities is defined as net cash from operating activities as set out in our audited
consolidated cash flow statements for FY2013 as set out in Appendix A of this Prospectus.
OFFERING STATISTICS
102
Dilution is the amount by which the Offering Price paid by new investors for our New Shares in the
Offering exceeds our NAV per Share after adjusting for net proceeds from the issuance of the
Cornerstone Shares and the Offering.
Our NAV (which is the amount of our total assets minus the amount of our total liabilities) as at
30 September 2014 was S$18,741,441, or 9.17 cents per Share (based on the pre-Offering share
capital of 204,425,334 Shares).
Our NAV, as adjusted for the effects of the issuance of the Cornerstone Shares and the Offering,
will be S$63,390,727 or 24.74 cents per Share (based on the post-Offering share capital of
256,225,334 Shares).
This represents an immediate increase in NAV per Share of 15.57 cents (or 169.8%) to our
existing Shareholders and an immediate dilution in NAV per Share of 70.26 cents (or 74.0%) to
new investors subscribing for New Shares in the Offering. The following table illustrates the
dilution per Share:
Cents
Offering Price per New Share 95.00
NAV per Share as at 30 September 2014 based on the pre-Offering share
capital of 204,425,334 Shares 9.17
Increase in NAV per Share attributable to existing Shareholders 15.57
NAV per Share after the issuance of the Cornerstone Shares and the
Offering 24.74
Dilution in NAV per Share to our new investors 70.26
The following table summarises the total number of Shares acquired by our Directors and
Substantial Shareholders and their Associates, the total consideration paid for such Shares and
the average price per Share during the three (3) years before the date of lodgement of this
Prospectus:
Directors and their Associates
Number of
Shares
acquired
Consideration
S$’000
Average Price
per Share
S$
Lim Chung Chun 2,629,722 1,767 0.68
Lim Wee Kian 5,326,302 3,835 0.72
Ling Peng Meng 1,896,390 1,426 0.75
Kok Chee Wai 203,400 164 0.80
Low Huan Ping 906,594 591 0.65
Yao Chih Matthias 48,000 40 0.83
Ng Loh Ken Peter 84,000 70 0.83
Neo Lay Kien 5,222,340 4,347 0.83
Accretion Investments Pte Ltd 1,192,032 715 0.60
Substantial Shareholders
and their Associates
Lim Wee Kiong 475,020 224 0.47
SPH AsiaOne Ltd 7,348,260 4,421 0.60
DILUTION
103
INTRODUCTION TO THE RESTRUCTURING
In 2013, our Company undertook and completed a restructuring exercise, where the operations of
our Group in India, comprising the distribution of unit trusts in India (“India Business”) and our
Company’s 51% owned subsidiary, iFAST India, were transferred out of our Group (the
“Restructuring”). iFAST India was a joint venture with Deutsche Asia Pacific Holdings Ltd
(“DAPH”), which held the remaining 49% of iFAST India. The India Business was carried out
through iFAST India and iFAST India’s previously wholly-owned subsidiary, iFAST Financial India
Private Limited (“IFI”).
DAPH had expressed intentions to exit the joint venture that it had established with our Company.
In addition, the India Business was loss-making and had not obtained the relevant licences for the
efficient running of an investment platform business. To facilitate the exit of DAPH and to prepare
for the Listing, our Company undertook the restructuring. Accordingly, our Company had
undertaken the Restructuring such that iFAST India and the India Business are no longer part of
our Group. Please refer to the section entitled “Interested Person Transactions and Conflict of
Interests – Potential Conflict of Interests” for further details.
RESTRUCTURING
At the extraordinary general meeting of our Company held on 12 August 2013 (the “12 August
EGM”), the Shareholders approved, inter alia, the transfer of all the shares of iFAST India held by
our Company to Pecuniam for a total consideration of S$1.699 million
(1)
(the “Sale”). Pecuniam is
a Singapore incorporated Company, and Mr. Wong Sui Jau was the sole shareholder of Pecuniam.
Mr. Wong Sui Jau was not a director of our Company at the relevant time. He was, and continues
to be, the general manager of Fundsupermart.com in Singapore, and is an Executive Officer of our
Group. The following diagram illustrates the shareholding structure prior to the Restructuring:
Mr. Wong Sui Jau
100%
Pecuniam
iFAST
iFAST India
IFI
100%
DAPH
51% 49%
Businesses in
other
jurisdictions
(2)
RESTRUCTURING EXERCISE
104
At the 12 August EGM, the Shareholders also approved:
(a) the provision of an interest-free convertible loan of S$3.332 million by our Company to
Pecuniam (the “Convertible Loan”), to fund Pecuniam’s acquisition of the entire issued and
paid up share capital of iFAST India. The Convertible Loan has a conversion price of S$1.00
per ordinary share in the capital of Pecuniam (“Pecuniam Shares”) and is convertible at the
discretion of our Company;
(b) the provision for a cash injection of S$500,000 to Pecuniam for its working capital needs so
as to minimise related party transactions between our Company and Pecuniam; and
(c) a dividend in specie amounting to a pro-rata dividend of all the Pecuniam Shares held by our
Company from time to time be declared and distributed to the Shareholders (the “Dividend
in Specie”).
Pursuant to the terms of the shareholders’ agreement dated 7 April 2008 entered into between
iFAST India, our Company and DAPH, DAPH exercised its right to tag-along to the Sale and
transferred all the shares of iFAST India held by it to Pecuniam for a total consideration of S$1.733
million
(3)
on 3 October 2013.
Notes:
(1) The consideration was determined based on a premium of 5% to the net tangible asset value of iFAST India based
on the unaudited consolidated management accounts of iFAST India as at 30 June 2013.
(2) Prior to the Restructuring, with the exception of iFAST OSK Sdn. Bhd. (now known as iFAST Malaysia), of which we
had a 61.73% shareholding interest, our other businesses in the jurisdictions in which we operate were all
wholly-owned subsidiaries. For further details on our subsidiaries, please refer to the section entitled “Group
Structure” of this Prospectus.
(3) The consideration was determined based on a premium of 5% to the net tangible asset value of iFAST India based
on the unaudited consolidated management accounts of iFAST India as at 30 June 2013 and an additional
S$100,000 pursuant to commercial negotiations between Pecuniam and DAPH.
RESTRUCTURING EXERCISE
105
On 3 October 2013, Pecuniam acquired all the shares of iFAST India from our Company and
DAPH, which was financed by a Convertible Loan from our Company to Pecuniam. On 25 October
2013, our Company exercised our right of conversion and converted the entire Convertible Loan
into approximately 3.33 million Pecuniam Shares, and also separately subscribed for a further
approximately 30.43 million Pecuniam Shares for an aggregate amount of S$500,000 to provide
for Pecuniam’s further working capital needs. The following diagram illustrates the
aforementioned changes to the shareholding structure:
iFAST
Pecuniam
iFAST India
100%
Mr. Wong Sui Jau
N.M.
(1)
IFI
100%
99.9%
Businesses in
other
jurisdictions
(2)
On 30 October 2013, our Company declared the proposed Dividend in Specie of S$3.832 million
(3)
via the pro rata distribution of all the Pecuniam Shares held by our Company to the Shareholders.
In order for Pecuniam to remain as a private company by having less than 50 shareholders, a few
other Shareholders (including Mr. Lim Chung Chun) (collectively, the “Offerees”) had concurrently
offered to purchase the Pecuniam Shares that Shareholders would have been entitled to pursuant
to the proposed Dividend in Specie. The Shareholders who had accepted the offer had
subsequently renounced their Pecuniam Shares to the respective Offerees. A total of 1,839,578
Pecuniam Shares were acquired by the Offerees for an aggregate consideration of S$183,957.80
at a price of S$0.10 per Pecuniam Share (including the 414,578 Pecuniam Shares which were
acquired by Mr. Lim Chung Chun for a consideration of S$41,457.80) (“Pecuniam Transfer”).
Notes:
(1) N.M. means not meaningful.
(2) As at 30 October 2013, with the exception of iFAST OSK Sdn. Bhd. (now known as iFAST Malaysia), of which we
had a 61.73% shareholding interest, our other businesses in the jurisdictions in which we operate were all
wholly-owned subsidiaries. For further details on our subsidiaries, please refer to the section entitled “Group
Structure” of this Prospectus.
(3) Being the aggregate of S$3.332 million and S$500,000.
RESTRUCTURING EXERCISE
106
Mr. Wong Sui Jau transferred his Pecuniam Shares to our Company on 25 October 2013 for a
consideration of S$1.00 and he subsequently resigned from the board of directors of Pecuniam on
29 November 2013.
Subsequent to the Pecunium Transfer and as at the Latest Practicable Date, iFAST India and the
India Business are owned by Pecuniam. Most of Pecuniam’s shareholders are also existing or
previous Shareholders and/or employees of our Company.
As at the Latest Practicable Date, the Substantial Shareholders of Pecuniam are set out in the
table below:
S/N Substantial Shareholder
Direct Interest Deemed Interest
Number of
Shares
Shareholding
(%)
Number of
Shares
Shareholding
(%)
1. Lim Chung Chun 8,041,711 23.82 718,178
(1)
2.13
2. SPH AsiaOne Ltd 6,120,547 18.13 – –
3. DMG & Partners Securities
Pte Ltd 3,641,504 10.79 – –
4. Lim Wee Kian 2,450,231 7.26 587,685
(2)
1.74
5. Crouzet Limited
(3)
1,748,446 5.18 – –
Notes:
(1) Mr. Lim Chung Chun is deemed to be interested in the shares held by Accretion Investments Pte Ltd and his spouse,
Mdm. Neo Lay Kien. Accretion Investments Pte Ltd is a company incorporated in the British Virgin Islands. Mr. Lim
Chung Chun and Mr. Lim Wee Kian hold 51% and 49% of the ordinary voting shares of Accretion Investments Pte
Ltd respectively.
(2) Mr. Lim Wee Kian is deemed to be interested in the shares held by Accretion Investments Pte Ltd. Accretion
Investments Pte Ltd is a company incorporated in the British Virgin Islands. Mr. Lim Chung Chun and Mr. Lim Wee
Kian hold 51% and 49% of the ordinary voting shares of Accretion Investments Pte Ltd respectively.
(3) Crouzet Limited is a company incorporated in the British Virgin Islands, and is an investment vehicle for various
current and previous employees of our Company. Crouzet Limited does not hold any shares in our Company.
RESTRUCTURING EXERCISE
107
Local shareholders in India, including employees of IFI, had purchased shares in IFI on 30
December 2013 amounting to 8.32% of the shares of IFI from iFAST India. Subsequently, an
employee stock option plan for IFI employees was created on 17 April 2014, pursuant to which
16.99% of the shares of IFI were issued. As at the Latest Practicable Date, iFAST India has a
shareholding of approximately 74.69% in IFI, and the remaining shareholders of IFI are local
shareholders in India and employees of IFI (“IFI Transfer and Subscription”). The following
diagram illustrates the shareholding structure upon completion of the Dividend in Specie, the
Pecuniam Transfer; and the IFI Transfer and Subscription:
Shareholders of
iFAST
100%
iFAST
IFI
74.69% 25.31%
Shareholders of
Pecuniam, most of
whom are also
existing or previous
Shareholders and/or
employees of iFAST
100%
Pecuniam
iFAST India
100%
Local Shareholders
in India and
employees of IFI
Businesses in
other jurisdictions i.e.
Singapore, Malaysia
and Hong Kong
(1)
Note:
(1) Immediately upon the completion of the Dividend in Specie, the Pecuniam Transfer; and the IFI Transfer and
Subscription, with the exception of iFAST OSK Sdn. Bhd. (now known as iFAST Malaysia), of which we had a
65.12% shareholding interest, our other businesses in the jurisdictions in which we operate were all wholly-owned
subsidiaries. For further details on our subsidiaries, please refer to the section entitled “Group Structure” of this
Prospectus.
As at the Latest Practicable Date, Pecuniam has 42 shareholders.
RESTRUCTURING EXERCISE
108
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109
The details of our subsidiaries and associated company as at the date of this Prospectus are as
follows:
Name of Company
Date and Country of
Incorporation
Principal Business
Activities
Principal
Place of
Business
Issued/
Registered and
Paid Up Capital
Effective
equity
interest
held by our
Company
Subsidiaries
iFAST Financial Pte
Ltd
10 January 2000,
Singapore
Marketing of
unit trusts and
securities through
website and
corporate finance
advisory services
Singapore S$8,344,123.48 100%
iFAST Nominees Pte
Ltd
(1)
27 October 2006,
Singapore
Trustee, fiduciary
and custody
services
Singapore S$2.00 100%
FA Corporate and
Compliance
Consultancy Pte Ltd
11 December 2007,
Singapore
Provision of
compliance
consultancy and
services
Singapore S$1.00 100%
iFAST Capital Ltd. 24 April 2009,
Singapore
Corporate finance
services; and other
financial service
activities (except
insurance and
pension funding)
Singapore S$1.00 100%
iFAST Financial (HK)
Limited
30 September 2005,
Hong Kong
Investment Platform
Provider and
securities distributor
Hong Kong HK$82,000,000.00 100%
iFAST Nominees
(HK) Limited
(2)
21 April 2009,
Hong Kong
Provision of
nominee services
Hong Kong HK$1.00 100%
iFAST Platform
Services (HK) Limited
25 January 2006,
Hong Kong
Regional provider of
platform services
and technologies
Hong Kong HK$152,843,037.00 100%
iFAST Platform
Services (Shenzhen)
Qianhai Limited (º
1)1´(ï¹)J((
[´+)
(3)
7 July 2014,
PRC
Undertake
outsourcing
services in
management and
maintenance of
system application,
information
technology support
management,
background
services for bank
and financial
enterprises,
software
development, data
processing and
other information
technology and
business process
outsourcing
services to provide
consultancy
services
PRC Registered capital:
RMB20,000,000.00
Paid-up capital:
RMB5,000,000.00
100%
GROUP STRUCTURE
110
Name of Company
Date and Country of
Incorporation
Principal Business
Activities
Principal
Place of
Business
Issued/
Registered and
Paid Up Capital
Effective
equity
interest
held by our
Company
iFAST Malaysia Sdn
Bhd
22 October 2007,
Malaysia
Investment holding Malaysia RM26,350,000 100%
FA Corporate and
Compliance
Consultancy Sdn
Bhd
(4)
30 May 2008,
Malaysia
Provision of
compliance
consultancy to
financial advisers
companies
Malaysia RM100,000.00 100%
iFAST Service Centre
Sdn Bhd
20 March 2006,
Malaysia
Provision of
managerial,
administrative,
consultancy and
internet related
services to our
Group
Malaysia RM2.00 100%
iFAST Capital Sdn
Bhd
(5)
1 August 2007,
Malaysia
Marketing of unit
trusts through a
website and acting
as an investment
advisor, dealer and
custodian in respect
to unit trusts
Malaysia RM26,150,000 100%
iFAST Nominees
Sdn Bhd
(6)
16 July 2008,
Malaysia
Provision of
nominee services
Malaysia RM2.00 100%
Associated Company
Providend Holding
Private Limited
(7)(8)
22 January 2009,
Singapore
Investment holding
company
Singapore S$450,900.00 19.9%
Notes:
(1) iFAST Nominees is a wholly owned subsidiary of iFAST Financial.
(2) iFAST Nominees HK is a wholly owned subsidiary of iFAST HK.
(3) iFAST China is a wholly owned subsidiary of iFAST HK.
(4) FCCC Malaysia is a wholly owned subsidiary of iFAST Malaysia.
(5) iFAST Capital Malaysia is a wholly owned subsidiary of iFAST Malaysia.
(6) iFAST Nominees Malaysia is a wholly owned subsidiary of iFAST Capital Malaysia.
(7) Please refer to the section entitled “General and Statutory Information – Material Contracts” for more details.
(8) As at 30 September 2014, the other shareholders of Providend comprises 14 individuals namely, Chin Wei-Li Audrey
Marie, Phoon Chiong Tuck, Loh Mei Kuen, Ng Lai Hong Eleanor, Koh Kuay Heng, Tey Seok Hu, Hong Xiu Luan,
Cheong Jee Meng Eddy, Tan Hian Yau, Ernest Low Ong Huat, Evelyn Goh Wee Cheng, Ng Cho Huat, Huan Nam
Guan James and Liew Hsien, Daryl.
None of our subsidiaries is listed on any stock exchange.
GROUP STRUCTURE
111
Our Company was incorporated in Singapore on 11 September 2000 under the Companies Act as
a limited exempt private company and was formerly known as “Fundsupermart Holdings Pte Ltd”
up until 26 March 2003, when our Company changed our name to “iFAST Corporation Pte. Ltd.”
On 18 November 2014, pursuant to our conversion into a public company limited by shares, we
changed our name to “iFAST Corporation Ltd.”
As at the date of incorporation, the authorised share capital of our Company was S$400,000
comprising ordinary shares of 4,000,000 shares with a par value of S$0.10 each and the issued
and paid up capital of our Company comprised 20 ordinary shares of S$0.10 each. Mr. Lim Chung
Chun and Mr. Moh Hon Meng were the initial subscribers and were issued and allotted with 10
ordinary shares each.
On 30 January 2006, the Companies (Amendment) Act 2005 came into effect to amend the
Companies Act. Such amendments included the abolishment of the concepts of par value,
authorised share capital, share premium, capital redemption reserves and share discounts.
Since the date of our Company’s incorporation, we have issued and allotted ordinary shares and
non-redeemable cumulative preference shares at various points of time. Our 105,556 non-
redeemable cumulative preference shares were converted into 950,004 ordinary shares on 24
February 2006. For further details, please refer to the section entitled “Share Capital – History of
our Shareholding” in this Prospectus.
Pursuant to resolutions passed in general meeting by our Shareholders on 20 August 2014 and
21 October 2014, our Shareholders approved, inter alia, the following:
(a) the conversion of our Company into a public company limited by shares;
(b) the adoption of our new Articles of Association;
(c) the change of our name to “iFAST Corporation Ltd.”;
(d) the Sub-division;
(e) the issuance of the New Shares pursuant to the Offering and the Cornerstone Shares
pursuant to the Cornerstone Subscription Agreements;
(f) the listing and quotation of the issued ordinary shares of our Company (including the New
Shares and the Cornerstone Shares to be issued pursuant to Resolution (e) above) on the
Official List of the SGX-ST;
(g) the authorisation of our Directors to allot and issue Shares and/or convertible securities
(where the maximum number of Shares to be issued upon conversion can be determined at
the time of issuance of such convertible securities) from time to time (whether by way of
rights, bonus or otherwise) and upon such terms and conditions and for such purposes and
to such persons as our Directors may in their absolute discretion deem fit, (notwithstanding
the authority conferred by such authority may have ceased to be in force) issue Shares in
pursuance of any instrument made or granted by our Directors while such authority was in
force, provided that the aggregate number of Shares and/or convertible securities which may
be issued pursuant to such authority shall not exceed 50% of the issued shares of our
Company, of which the aggregate number of Shares and/or convertible securities which may
be issued other than on a pro-rata basis to the existing Shareholders of our Company shall
not exceed 20% of the issued shares of our Company (the percentage of issued shares being
SHARE CAPITAL
112
based on the post-Offering issued shares of our Company after adjusting for new Shares
arising from the conversion or exercise of any convertible securities or employee share
options on issue at the time such authority is given and any subsequent consolidation or
sub-division of shares) and, unless revoked or varied by our Company in a general meeting,
such authority shall continue in force until the conclusion of the next annual general meeting
of our Company or on the date by which the next annual general meeting is required by law
to be held, whichever is earlier;
(h) the adoption of the iFAST PSP, the rules of which are set out in Appendix F of this Prospectus
and that our Directors be authorised to allot and issue Award Shares upon the vesting of
share awards granted under the iFAST PSP;
(i) the adoption of the iFAST ESOS, the rules of which are set out in Appendix G of this
Prospectus and that our Directors be authorised to allot and issue new Shares as may be
required to be issued pursuant to the exercise of Options granted under the iFAST ESOS;
and
(j) that:
1. for the purposes of the Companies Act, purchase or otherwise acquire the Shares not
exceeding in aggregate the Prescribed Limit (as hereafter de?ned), at such price(s) as
may be determined by the Directors of our Company from time to time up to the
Maximum Price (as hereafter de?ned), whether by way of:
(i) on-market purchases (“Market Purchase”), transacted on the SGX-ST or, as the
case may be, any other stock exchange on which the Shares may for the time
being listed and quoted, through one (1) or more duly licensed stockbrokers
appointed by our Company for the purpose; and/or
(ii) off-market purchases (“Off-Market Purchase”) (if effected otherwise than on the
SGX-ST) in accordance with an equal access scheme(s) as may be determined or
formulated by the Directors as they may consider ?t, which scheme(s) shall satisfy
all the conditions prescribed by the Companies Act and the Listing Manual,
and otherwise in accordance with all other provisions of the Companies Act and the
Listing Manual as may for the time being be applicable (the “Share Buy-back
Mandate”);
2. any Share that is purchased or otherwise acquired by our Company pursuant to the
Share Buy-back Mandate shall, at the discretion of the Directors of our Company, either
be cancelled or held in treasury and dealt with in accordance with the Companies Act;
3. unless varied or revoked by our Company in general meeting, have the authority
pursuant to the Share Buy-back Mandate exercisable at any time and from time to time
during the period commencing from the passing of this Resolution and expiring on the
earlier of:
(i) the date on which the next annual general meeting of our Company is held or
required by law to be held;
(ii) the date on which the share buy backs are carried out to the full extent mandated;
or
SHARE CAPITAL
113
(iii) the date on which the authority contained in the Share Buy-back Mandate is varied
or revoked;
4. in this Resolution:
“Prescribed Limit” means 10% of the issued ordinary share capital of our Company as
at the date of passing of this Resolution unless the Company has effected a reduction
of the share capital of our Company in accordance with the applicable provisions of the
Companies Act, at any time during the Relevant Period, in which event the issued
ordinary share capital of our Company shall be taken to be the amount of the issued
ordinary share capital of our Company as altered (excluding any treasury shares that
may be held by our Company from time to time);
“Relevant Period” means the period commencing from the date on which the last AGM
was held and expiring on the date the next AGM is held or is required by law to be held,
whichever is the earlier, after the date of this Resolution; and
“Maximum Price” in relation to a Share to be purchased, means an amount (excluding
brokerage, stamp duties, applicable goods and services tax and other related
expenses) not exceeding:
(i) in the case of a Market Purchase: 105% of the Average Closing Price;
(ii) in the case of an Off-Market Purchase: 120% of the Average Closing Price, where:
“Average Closing Price” means the average of the closing market prices of a Share over
the last ?ve market days, on which transactions in the Shares were recorded, preceding
the day of the Market Purchase, and deemed to be adjusted for any corporate action
that occurs after the relevant 5-day period; and
“day of the making of the offer” means the day on which our Company announces its
intention to make an offer for the purchase of Shares from shareholders of our Company
stating the purchase price (which shall not be more than the Maximum Price calculated
on the foregoing basis) for each Share and the relevant terms of the equal access
scheme for effecting the Off-Market Purchase;
5. complete and do all such acts and things (including executing such documents as may
be required) as they may consider expedient or necessary to give effect to the
transactions contemplated by this Resolution.
For further details on the Share Buy-back Mandate, please refer to the section entitled
“Information on the Share Buy-back Mandate” as set out in Appendix H of this Prospectus.
As at the Latest Practicable Date, the issued and paid-up share capital of our Company is
S$11,379,244.20 divided into 204,425,334 Shares. Upon the allotment of the New Shares which
are the subject of the Offering and the Cornerstone Shares, the resultant issued share capital of
our Company will be increased to S$58,356,516.20 comprising 256,225,334 Shares.
As at the Latest Practicable Date, we have only one (1) class of shares in the capital of our
Company. The rights and privileges of our Shares are stated in our Articles of Association. There
are no founder, management or deferred shares reserved for issuance for any purpose.
SHARE CAPITAL
114
The New Shares and the Cornerstone Shares shall have the same interest and voting rights as
our existing Shares that were issued prior to the Offering and there are no restrictions on the free
transferability of our Shares.
HISTORY OF OUR SHAREHOLDING
Between May 2003 and June 2003, we undertook an exercise to acquire iFAST Financial from its
shareholders by issuing the corresponding securities to the then shareholders, optionholders and
warrantholders of iFAST Financial in an amount equivalent to the number of shares, options and
warrants such shareholders, optionholders and warrantholders held in iFAST Financial. On
completion of such exercise, iFAST Financial became our wholly-owned subsidiary and we had a
share capital of S$2,491,322 comprising 24,913,220 Shares, 105,556 non-redeemable
cumulative preference shares, 462,963 warrants and 910,714 options to subscribe for Shares.
On 24 February 2006, the holders of the 105,556 non-redeemable cumulative preference shares
converted them into 950,004 Shares. On 17 October 2006 and 14 November 2006, the
warrantholders converted 137,869 and 303,798 warrants respectively, to an aggregate of 441,667
Shares and all holders of options exercised the 910,714 options to subscribe for 910,714 Shares.
21,296 warrants lapsed as the relevant warrantholders failed to convert them into Shares. As at
the date of this Prospectus, none of the 462,963 warrants and 910,714 options remain
outstanding.
CHANGES IN ISSUED AND PAID-UP SHARE CAPITAL OF OUR COMPANY AND OUR
SUBSIDIARIES
The shareholders’ equity of our Company as at the date of incorporation and after the issue of the
New Shares and the Cornerstone Shares, is set out below:
Shareholders’ equity
As at the date
of incorporation
S$
Immediately after
the Offering
S$
Issued and paid-up share capital 2 58,356,516
(1)
Reserves – 8,363,995
(2)
Total shareholders’ equity 2 66,720,511
Notes:
(1) Adjusted for costs arising from the Offering and the issuance of the Cornerstone Shares which shall be capitalised.
(2) Not adjusted for costs arising from the Offering which shall be recognised as an expense.
SHARE CAPITAL
115
The issued and paid-up share capital of our Company as at the date of incorporation and
immediately after the issue of the New Shares and the Cornerstone Shares, is set out below:
Event
Number of new
Shares issued
Resultant issued and
paid-up share capital
(Number of Shares)
Resultant issued
and paid-up share
capital
(S$)
Incorporation 20 20 2
Sub-division 170,354,445 204,425,334 11,379,244.20
Pre-Offering share capital – 204,425,334 11,379,244.20
Cornerstone Shares to be
issued 19,000,000 223,425,334 29,429,244.20
New Shares to be issued
pursuant to the Offering 32,800,000 256,225,334 60,589,244.20
After capitalising costs arising
from the Offering and the
issuance of the Cornerstone
Shares – 256,225,334 58,356,516.20
Post-Offering share capital – 256,225,334 58,356,516.20
There are no Shares issued that have not been fully paid-up.
Save as disclosed below, there were no changes in the issued and paid-up share capital of our
Company, and our subsidiaries within the three (3) years preceding the Latest Practicable Date:
Our Company
Date Event
Number of
Shares
issued
(1)
Issue price
(1)
(S$)
Resultant
number of
Shares
(1)
Resultant
issued share
capital
(S$)
16 March 2012 Allotment and issue 840 1.60 33,458,644 10,144,497.20
16 March 2012 Allotment and issue 5,000 1.20 33,463,644 10,150,497.20
28 May 2012 Allotment and issue 5,200 1.60 33,468,844 10,158,817.20
29 August 2012 Allotment and issue 5,000 0.70 33,473,844 10,162,317.20
29 August 2012 Allotment and issue 30,000 1.20 33,503,844 10,198,317.20
29 August 2012 Allotment and issue 36,310 1.60 33,540,154 10,256,413.20
27 November 2012 Allotment and issue 15,000 1.20 33,555,154 10,274,413.20
27 November 2012 Allotment and issue 18,500 1.60 33,573,654 10,304,013.20
12 March 2013 Allotment and issue 5,000 1.20 33,578,654 10,310,013.20
12 March 2013 Allotment and issue 9,000 1.60 33,587,654 10,324,413.20
12 March 2013 Allotment and issue 4,000 2.40 33,591,654 10,334,013.20
27 May 2013 Allotment and issue 6,000 1.20 33,597,654 10,341,213.20
27 May 2013 Allotment and issue 20,250 1.60 33,617,904 10,373,613.20
27 May 2013 Allotment and issue 10,600 2.40 33,628,504 10,399,053.20
1 August 2013 Allotment and issue 5,400 0.49 33,633,904 10,401,699.20
SHARE CAPITAL
116
Date Event
Number of
Shares
issued
(1)
Issue price
(1)
(S$)
Resultant
number of
Shares
(1)
Resultant
issued share
capital
(S$)
1 August 2013 Allotment and issue 21,000 0.70 33,654,904 10,416,399.20
1 August 2013 Allotment and issue 9,000 1.20 33,663,904 10,427,199.20
1 August 2013 Allotment and issue 18,260 1.60 33,682,164 10,456,415.20
1 August 2013 Allotment and issue 11,200 1.96 33,693,364 10,478,367.20
1 August 2013 Allotment and issue 40,000 2.01 33,733,364 10,558,767.20
1 August 2013 Allotment and issue 25,300 2.40 33,758,664 10,619,487.20
15 November 2013 Allotment and issue 17,305 0.70 33,775,969 10,631,600.70
15 November 2013 Allotment and issue 10,100 1.60 33,786,069 10,647,760.70
15 November 2013 Allotment and issue 4,000 1.96 33,790,069 10,655,600.70
15 November 2013 Allotment and issue 6,000 2.40 33,796,069 10,670,000.70
22 January 2014 Allotment and issue 1,800 1.96 33,797,869 10,673,528.70
22 January 2014 Allotment and issue 2,100 2.40 33,799,969 10,678,568.70
24 February 2014 Allotment and issue 2,500 1.20 33,802,469 10,681,568.70
24 February 2014 Allotment and issue 1,000 1.96 33,803,469 10,683,528.70
24 February 2014 Allotment and issue 6,000 2.40 33,809,469 10,697,928.70
22 April 2014 Allotment and issue 500 1.20 33,809,969 10,698,528.70
22 April 2014 Allotment and issue 14,725 1.60 33,824,694 10,722,088.70
22 April 2014 Allotment and issue 5,000 1.96 33,829,694 10,731,888.70
22 April 2014 Allotment and issue 19,200 2.40 33,848,894 10,777,968.70
25 April 2014 Allotment and issue 20,000 2.80 33,868,894 10,833,968.70
2 May 2014 Allotment and issue 3,000 2.40 33,871,894 10,841,168.70
25 August 2014 Allotment and issue 2,100 0.49 33,873,994 10,842,197.70
25 August 2014 Allotment and issue 28,695 0.70 33,902,689 10,862,284.20
25 August 2014 Allotment and issue 2,000 1.20 33,904,689 10,864,684.20
25 August 2014 Allotment and issue 26,000 1.60 33,930,689 10,906,284.20
25 August 2014 Allotment and issue 8,000 1.96 33,938,689 10,921,964.20
25 August 2014 Allotment and issue 32,200 2.40 33,970,889 10,999,244.20
5 September 2014 Allotment and issue 100,000 3.80 34,070,889 11,379,244.20
20 November 2014 Sub-division of
every one (1) Share
into six (6) Shares
170,354,445
(2)
– 204,425,334 11,379,224.20
Notes:
(1) This is on a pre-subdivision basis.
(2) Additional number of Shares to be issued as a result of the Sub-division.
SHARE CAPITAL
117
Our Subsidiaries
Subsidiary Date Event
Number
of Shares
issued
Issue
price per
Share
Resultant
number of
Shares
Resultant
issued share
capital
iFAST
Financial (HK)
Ltd
30 April 2012 Allotment to
iFAST
Corporation
Pte. Ltd.
4,000,000 HK$1 79,000,000 HK$79,000,000
4 August 2014 Allotment to
iFAST
Corporation
Pte. Ltd.
3,000,000 HK$1 82,000,000 HK$82,000,000
iFAST
Platform
Services (HK)
Limited
18 January
2012
Allotment to
iFAST
Corporation
Pte. Ltd.
3,000,000 HK$1 152,843,037 HK$152,843,037
iFAST
Platform
Services
(Shenzhen)
Qianhai
Limited
(1)
18 August
2014
Allotment to
iFAST Financial
(HK) Limited
5,000,000 RMB1 5,000,000 RMB5,000,000
iFAST
Malaysia Sdn
Bhd
(3)
30 November
2011
Allotment to
iFAST
Corporation
Pte. Ltd.
1,000,000 RM1 22,000,000 RM22,000,000
29 February
2012
Allotment to
iFAST
Corporation
Pte. Ltd.
1,000,000 RM1 23,000,000 RM23,000,000
21 September
2012
Allotment to
OSK Investment
Bank Berhad
700,000 RM1 23,700,000 RM23,700,000
27 December
2013
Allotment to
iFAST
Corporation
Pte. Ltd.
2,300,000 RM1 26,000,000 RM26,000,000
6 August 2014 Allotment to
iFAST
Corporation
Pte. Ltd.
350,000 RM1 26,350,000 RM26,350,000
iFAST Capital
Sdn Bhd
(2)
30 November
2011
Allotment to
iFAST-OSK
Sdn Bhd
1,000,000 RM1 22,000,000 RM22,000,000
29 February
2012
Allotment to
iFAST-OSK
Sdn Bhd
1,000,000 RM1 23,000,000 RM23,000,000
28 June 2012 Allotment to
iFAST-OSK
Sdn Bhd
500,000 RM1 23,500,000 RM23,500,000
SHARE CAPITAL
118
Subsidiary Date Event
Number
of Shares
issued
Issue
price per
Share
Resultant
number of
Shares
Resultant
issued share
capital
28 August
2012
Allotment to
iFAST-OSK
Sdn Bhd
500,000 RM1 24,000,000 RM24,000,000
27 November
2012
Allotment to
iFAST-OSK
Sdn Bhd
500,000 RM1 24,500,000 RM24,500,000
31 January
2013
Allotment to
iFAST-OSK
Sdn Bhd
500,000 RM1 25,000,000 RM25,000,000
28 March
2013
Allotment to
iFAST-OSK
Sdn Bhd
500,000 RM1 25,500,000 RM25,500,000
20 August
2013
Allotment to
iFAST-OSK
Sdn Bhd
300,000 RM1 25,800,000 RM25,800,000
29 January
2014
Allotment to
iFAST-OSK
Sdn Bhd
150,000 RM1 25,950,000 RM25,950,000
2 May 2014 Allotment to
iFAST-OSK
Sdn Bhd
200,000 RM1 26,150,000 RM26,150,000
Notes:
(1) iFAST China is a wholly owned subsidiary of iFAST HK.
(2) iFAST Capital Malaysia is a wholly owned subsidiary of iFAST Malaysia.
(3) iFAST Malaysia Sdn Bhd was formerly known as iFAST-OSK Sdn. Bhd.
HISTORY OF OUR SHARE OPTION SCHEMES
2003 ESOS
On 3 May 2000, iFAST Financial implemented an employee share option scheme for its
employees. Following our acquisition of the entire issued share capital of iFAST Financial, we had
on 28 March 2003, implemented the 2003 ESOS for eligible employees of our Group.
As at the Latest Practicable Date and prior to adjustments arising from the Sub-division
undertaken in conjunction with the Offering, an aggregate of 4,479,753 options were granted
under the 2003 ESOS to 113 participants, of which 3,432,136 options were exercised and
3,432,136 Shares were issued pursuant to the exercise of these options, and 818,867 options
granted under the 2003 ESOS have lapsed. Following the Sub-division undertaken in conjunction
with the Offering, adjustments were made to the number of outstanding options and the exercise
price of each option and as at the Latest Practicable Date, 1,372,500 options granted under the
2003 ESOS remain outstanding. These outstanding options will entitle the holders of these
options to subscribe for 1,372,500 Shares representing approximately 0.54 per cent. of our
post-Offering share capital. The options typically vest over a two-year or three-year period
provided the employee continues to be employed by us unless varied by the Remuneration
Committee and the Shareholders. Each option granted under the 2003 ESOS entitles the holder
thereof to subscribe for one (1) Share at the exercise price.
SHARE CAPITAL
119
2013 ESOS
On 23 May 2013, we obtained shareholders’ approval in general meeting to establish and
implement the 2013 ESOS for eligible employees of our Group and terminate the 2003 ESOS.
As at the Latest Practicable Date and prior to adjustments arising from the Sub-division
undertaken in conjunction with the Offering, an aggregate of 2,229,979 options were granted
under the 2013 ESOS to 134 participants, of which 160,000 options were exercised and 160,000
Shares were issued pursuant to the exercise of these options, and 110,063 options granted under
the 2013 ESOS have lapsed. Following the Sub-division undertaken in conjunction with the
Offering, adjustments were made to the number of outstanding options and the exercise price of
each option and as at the Latest practicable Date, 11,759,496 options granted under the 2013
ESOS remain outstanding. These outstanding options will entitle the holders of these options to
subscribe for 11,759,496 Shares representing approximately 4.59 per cent. of our post-Offering
share capital. The options typically vest over a three-year period provided the employee continues
to be employed by us unless varied by the Remuneration Committee and the Shareholders. Each
option granted under the 2013 ESOS entitles the holder thereof to subscribe for one (1) Share at
the exercise price.
As at the date of this Prospectus, Options have been granted to employees and directors of our
Group pursuant to the 2003 ESOS and the 2013 ESOS. The details of Options granted to our
Directors, as adjusted for the Sub-division undertaken in conjunction with the Offering, are set out
below. Save for Mr. Lim Chung Chun, no Options were granted to our Controlling Shareholders,
their associates and the associates of our Directors.
Directors
Number of
Options granted
(1)
Date of grant
Number of
Options exercised
and shares issued
upon exercise
Lim Chung Chun 514,566 30 May 2003 514,566
300,000 1 July 2014 300,000
900,000 21 August 2014 600,000
Lim Wee Kian 150,000 1 January 2007 150,000
240,000 1 July 2013 –
120,000 1 April 2014 –
Low Huan Ping 240,000 1 July 2013 240,000
120,000 1 April 2014 120,000
Yao Chih Matthias 120,000 1 April 2014 –
Ling Peng Meng 150,000 1 January 2007 150,000
240,000 1 July 2013 –
120,000 1 April 2014 –
SHARE CAPITAL
120
Directors
Number of
Options granted
(1)
Date of grant
Number of
Options exercised
and shares issued
upon exercise
Kok Chee Wai 120,000 1 April 2014 –
Ng Loh Ken Peter 120,000 1 April 2014 –
Note:
(1) Each option granted under the 2003 ESOS and 2013 ESOS entitles the holder thereof to subscribe for one (1) Share
at the exercise price.
After the Listing, our Company will not be issuing any more Options under the 2003 ESOS and the
2013 ESOS, and instead will issue Options under the iFAST ESOS. The 2003 ESOS and 2013
ESOS will be terminated without prejudice to the rights accrued to Options which have been
granted and accepted in accordance with the 2003 ESOS or 2013 ESOS. As at the Latest
Practicable Date, save for the Options and the Over-allotment Option, to the best of the knowledge
of our Directors, no person has been, or is permitted to be, given an option to subscribe for or
purchase any securities of our Company or any of our subsidiaries. As at the Latest Practicable
Date, save for the Options and the Over-allotment Option, to the best of the knowledge of our
Directors, no option to subscribe for Shares in our Company has been granted to, or was
exercised by, any of our Directors or Executive Officers. Please refer to Appendix G for the rules
of the iFAST ESOS.
As at the Latest Practicable Date (after adjustment for the Sub-division undertaken in conjunction
with the Offering), Options in respect of an aggregate of 13,131,996 Shares (representing 5.13%
of the issued share capital of our Company immediately after the Offering and the issuance of the
Cornerstone Shares) have been granted to 147 individuals and remain outstanding under 2003
ESOS and the 2013 ESOS. All of the outstanding Options were granted to employees and/or
directors of our Group. The aggregate vesting expenses to be recognised from 4Q2014 to 2017
for these Options will amount to approximately S$1.0 million. Details of outstanding Options
granted to Directors and Executive Officers, including the exercise price payable upon exercise of
such outstanding Options, the date of grant and the expiry date are set out below (after adjustment
for the Sub-division undertaken in conjunction with the Offering). The consideration for the
Options granted under the 2003 ESOS and 2013 ESOS is S$1.00.
Option Holders
Number of
Shares (in
respect of the
outstanding
Options)
Exercise price
(S$)
Period During
which the Option
is Exercisable Expiration Date
Directors
Lim Chung Chun 300,000 0.63 21 August 2014 to
20 August 2024
20 August 2024
Lim Wee Kian 240,000 0.42 1 July 2016 to
30 June 2023
30 June 2023
120,000 0.60 1 April 2017 to
31 March 2024
31 March 2024
SHARE CAPITAL
121
Option Holders
Number of
Shares (in
respect of the
outstanding
Options)
Exercise price
(S$)
Period During
which the Option
is Exercisable Expiration Date
Yao Chih Matthias 120,000 0.60 1 April 2017 to
31 March 2024
31 March 2024
Ling Peng Meng 240,000 0.42 1 July 2016 to
30 June 2023
30 June 2023
120,000 0.60 1 April 2017 to
31 March 2024
31 March 2024
Kok Chee Wai 120,000 0.60 1 April 2017 to
31 March 2024
31 March 2024
Ng Loh Ken Peter 120,000 0.60 1 April 2017 to
31 March 2024
31 March 2024
Executive Officers (excluding Lim Chung Chun)
Wong Soon Shyan 150,000 0.12 1 July 2008 to
30 June 2016
30 June 2016
60,000 0.27 1 July 2011 to
30 Jun 2019
30 June 2019
60,000 0.40 1 July 2012 to
30 Jun 2020
30 June 2020
246,000 0.42 1 July 2016 to
30 June 2023
30 June 2023
60,000 0.60 1 April 2017 to
31 March 2024
31 March 2024
Leung Fung Yat
David
18,000 0.33 1 April 2009 to
31 March 2017
31 March 2017
60,000 0.40 1 July 2012 to
30 Jun 2020
30 June 2020
126,000 0.42 1 July 2016 to
30 June 2023
30 June 2023
60,000 0.60 1 April 2017 to
31 March 2024
31 March 2024
Lim Wee Kiong 60,000 0.27 1 July 2011 to
30 June 2019
30 June 2019
60,000 0.40 1 July 2012 to
30 June 2020
30 June 2020
126,000 0.42 1 July 2016 to
30 June 2023
30 June 2023
60,000 0.60 1 April 2017 to
31 March 2024
31 March 2024
Wong Sui Jau 126,000 0.42 1 July 2016 to
30 June 2023
30 June 2023
60,000 0.60 1 April 2017 to
31 March 2024
31 March 2024
SHARE CAPITAL
122
Option Holders
Number of
Shares (in
respect of the
outstanding
Options)
Exercise price
(S$)
Period During
which the Option
is Exercisable Expiration Date
Dennis Tan Yik Kuan 60,000 0.40 1 July 2012 to
30 June 2020
30 June 2020
126,000 0.42 1 July 2016 to
30 June 2023
30 June 2023
60,000 0.60 1 April 2017 to
31 March 2024
31 March 2024
Kelvin Yip 126,000 0.42 1 July 2016 to
30 June 2023
30 June 2023
60,000 0.60 1 April 2017 to
31 March 2024
31 March 2024
Other employees
and previous
directors
9,000 0.12 1 July 2008 to
30 June 2016
30 June 2016
174,000 0.20 1 January 2009 to
31 December
2016
31 December 2016
24,000 0.33 1 April 2009 to
31 March 2017
31 March 2017
173,100 0.27 1 July 2011 to
30 June 2019
30 June 2019
464,400 0.40 1 July 2012 to
30 June 2020
30 June 2020
5,385,612 0.42 1 July 2016 to
30 June 2023
30 June 2023
120,000 0.60 1 April 2017 to
31 March 2024
31 March 2024
3,610,884 0.60 1 July 2017 to
30 June 2024
30 June 2024
120,000 0.63 21 August 2014
to 20 August 2024
20 August 2024
Total 13,224,996
SHARE MATCHING EXERCISE
We held a quarterly share matching exercise to provide eligible employees under our employee
share option schemes with opportunities to exit their shareholdings obtained from their respective
grant and exercise of share options. We facilitated the quarterly share matching exercise by
matching Shareholders who to wish sell their shares with persons willing to acquire such shares
for an agreed price. As of the Latest Practicable Date, we no longer hold such quarterly share
matching exercises.
SHARE CAPITAL
123
Our Directors and Substantial Shareholders as well as their respective shareholdings immediately
before the Offering and immediately after the Offering are set out below (assuming our Directors
and Substantial Shareholders do not subscribe for New Shares under the Offering):
Before the Offering After the Offering
Direct Interest Deemed Interest Direct Interest Deemed Interest
Directors
No. of
Shares %
No. of
Shares %
No. of
Shares %
No. of
Shares %
Lim Chung Chun 46,967,964 22.98 11,134,380
(1)
5.45
(1)
46,967,964 18.33 11,134,380
(1)
4.35
(1)
Lim Wee Kian 18,837,120 9.21 4,201,458
(2)
2.06
(2)
18,837,120 7.35 4,201,458
(2)
1.64
(2)
Ling Peng Meng 10,493,580 5.13 – – 10,493,580 4.10 – –
Kok Chee Wai 1,243,428 0.61 – – 1,243,428 0.49 – –
Low Huan Ping
(4)
906,594 0.44 – – 906,594 0.35 – –
Yao Chih Matthias 48,000 0.02 – – 48,000 0.02 – –
Ng Loh Ken Peter 84,000 0.04 – – 84,000 0.03 – –
Directors of other
iFAST entities 9,357,732 4.58 – – 9,357,732 3.65 – –
Substantial/Controlling
Shareholders
Neo Lay Kien 932,922 0.46 52,967,964
(3)
25.91
(3)
932,922 0.36 52,967,964
(3)
20.67
(3)
SPH AsiaOne Ltd
(4)
40,680,642 19.90 – – 40,680,642 15.88 – –
SPH
(4)
– – 40,680,642 19.90 – – 40,680,642 15.88
Other Shareholders
Accretion Investments
Pte Ltd
(6)
4,201,458 2.06 – – 4,201,458 1.64 – –
RHB Bank Nominees
Pte Ltd
(5)
6,000,000 2.94 – – 6,000,000 2.34 – –
Public
Existing Public
Shareholders
(7)
64,671,894 31.64 – – 64,671,894 25.24 – –
Public Shareholders
arising from the
Offering and the
issuance of the
Cornerstone Shares
(8)
– – – – 51,800,000 20.22 – –
Total Share Capital 204,425,334 100.00 256,225,334 100.00
Notes:
(1) Mr. Lim Chung Chun is deemed interested in our Shares held by Accretion Investments Pte Ltd, RHB Bank
Nominees Pte Ltd and his spouse, Mdm. Neo Lay Kien.
(2) Mr. Lim Wee Kian is deemed interested in our Shares held by Accretion Investments Pte Ltd.
(3) Mdm. Neo Lay Kien is deemed interested in our Shares held by RHB Bank Nominees Pte Ltd and her spouse, Mr.
Lim Chung Chun.
(4) SPH AsiaOne is a wholly-owned subsidiary of SPH, a Singapore-incorporated company listed on the Mainboard of
the SGX-ST. Accordingly, SPH is deemed to be interested in our Shares held by SPH AsiaOne. SPH AsiaOne’s
principal activity is holding investments. SPH AsiaOne acquired its stake in our Company in 2000 and is a long-term
passive investor of our Company. Mr. Low Huan Ping, a non-executive non-independent director of our Company,
is a nominee director of SPH AsiaOne. SPH, SPH AsiaOne and Mr. Low Huan Ping are not involved in the day-to-day
management of our Group.
(5) Mr. Lim Chung Chun and Mdm. Neo Lay Kien had pledged 6,000,000 Shares to RHB Bank Nominees Pte Ltd, and
they are deemed interested in the 6,000,000 Shares held by RHB Bank Nominees Pte Ltd.
SHAREHOLDERS
124
(6) Accretion Investments Pte Ltd is a company incorporated in the British Virgin Islands. Mr. Lim Chung Chun and Mr.
Lim Wee Kian hold 51% and 49% of the ordinary voting shares of Accretion Investments Pte Ltd respectively.
Accretion Investments Pte Ltd’s holders of preference shares (which do not carry voting rights) are Mr. Lim Chung
Chun, his spouse, Mdm. Neo Lay Kien, Mr. Lim Wee Kian and such other individuals unrelated to our Directors.
(7) Included in the shareholdings of existing public shareholders are 16,783,026 shares which are under moratorium.
Adjusting for these 16,783,026 shares, shares held by existing public shareholders would account for approximately
18.69% of our Company’s post-Offering share capital.
(8) The Cornerstone Investors are FIL Investment Management (Hong Kong) Limited and OWW Investments III Limited.
Our Directors and Substantial Shareholders as well as their respective shareholdings immediately
before the Offering and immediately after the Offering are set out below to illustrate the maximum
exercise scenario of our outstanding Options and Over-allotment Option (assuming Directors and
Substantial Shareholders are not subscribing to the Offering:
Before the Offering
After the Offering
(assuming that the outstanding
Options and Over-allotment
Option are fully exercised)
Direct Interest Deemed Interest Direct Interest Deemed Interest
Directors
No. of
Shares %
No. of
Shares %
No. of
Shares %
No. of
Shares %
Lim Chung Chun 46,967,964 22.98 11,134,380
(1)
5.45
(1)
47,267,964 17.34 11,134,380
(1)
4.08
(1)
Lim Wee Kian 18,837,120 9.21 4,201,458
(2)
2.06
(2)
19,197,120 7.04 4,201,458
(2)
1.54
(2)
Ling Peng Meng 10,493,580 5.13 – – 10,853,580 3.98 – –
Kok Chee Wai 1,243,428 0.61 – – 1,363,428 0.50 – –
Low Huan Ping
(4)
906,594 0.44 – – 906,594 0.33 – –
Yao Chih Matthias 48,000 0.02 – – 168,000 0.06 – –
Ng Loh Ken Peter 84,000 0.04 – – 204,000 0.07 – –
Directors of other iFAST
entities 9,357,732 4.58 – – 12,383,232 4.54 – –
Substantial/Controlling
Shareholders
Neo Lay Kien 932,922 0.46 52,967,964
(3)
26.00
(3)
932,922 0.34 53,267,964
(3)
19.54
(3)
SPH AsiaOne Ltd
(4)
40,680,642 19.90 – – 40,680,642 14.92 – –
SPH
(4)
– – 40,680,642 19.90 – – 40,680,642 14.92
Other Shareholders
Accretion Investments
Pte Ltd
(6)
4,201,458 2.06 – – 4,201,458 1.54 – –
RHB Bank Nominees Pte
Ltd
(5)
6,000,000 2.94 – – 6,000,000 2.20 – –
Public
Existing Public
Shareholders
(7)
64,671,894 31.64 – – 73,398,390 26.92 – –
Public Shareholders
arising from the Offering
and the issuance of the
Cornerstone Shares
(8)
– – – – 55,080,000 20.20 – –
Total Share Capital 204,425,334 100.00 272,637,330 100.00
SHAREHOLDERS
125
Notes:
(1) Mr. Lim Chung Chun is deemed interested in our Shares held by Accretion Investments Pte Ltd, RHB Bank
Nominees Pte Ltd and his spouse, Mdm. Neo Lay Kien.
(2) Mr. Lim Wee Kian is deemed interested in our Shares held by Accretion Investments Pte Ltd.
(3) Mdm. Neo Lay Kien is deemed interested in our Shares held by RHB Bank Nominees Pte Ltd and her spouse, Mr.
Lim Chung Chun.
(4) SPH AsiaOne is a wholly-owned subsidiary of SPH, a Singapore-incorporated company listed on the Mainboard of
the SGX-ST. Accordingly, SPH is deemed to be interested in our Shares held by SPH AsiaOne. SPH AsiaOne’s
principal activity is holding investments. SPH AsiaOne acquired its stake in our Company in 2000 and is a long-term
passive investor of our Company. Mr. Low Huan Ping, a non-executive non-independent director of our Company,
is a nominee director of SPH AsiaOne. SPH, SPH AsiaOne and Mr. Low Huan Ping are not involved in the day-to-day
management of our Group.
(5) Mr. Lim Chung Chun and Mdm. Neo Lay Kien had pledged 6,000,000 Shares to RHB Bank Nominees Pte Ltd, and
they are deemed interested in the 6,000,000 Shares held by RHB Bank Nominees Pte Ltd.
(6) Accretion Investments Pte Ltd is a company incorporated in the British Virgin Islands. Mr. Lim Chung Chun and Mr.
Lim Wee Kian hold 51% and 49% of the ordinary voting shares of Accretion Investments Pte Ltd respectively.
Accretion Investments Pte Ltd’s holders of preference shares (which do not carry voting rights) are Mr Lim Chung
Chun, his spouse, Mdm. Neo Lay Kien, Mr. Lim Wee Kian and such other individuals unrelated to our Directors.
(7) Included in the shareholdings of existing public shareholders are 16,783,026 shares which are under moratorium.
Adjusting for these 16,783,026 shares, shares held by existing public shareholders would account for approximately
20.77% of our Company’s post-Offering share capital.
(8) The Cornerstone Investors are FIL Investment Management (Hong Kong) Limited and OWW Investments III Limited.
To the best knowledge of our Directors, there is no known arrangement, the operation of which
may, at a subsequent date, result in a change of control of our Company.
Save as disclosed in this Prospectus, to the best of the knowledge of our Directors, our Company
is not directly or indirectly owned or controlled by any corporation, government or other natural or
legal person, whether severally or jointly.
CORNERSTONE INVESTORS
Concurrent but separate from the Offering, each of the Cornerstone Investors has entered into a
Cornerstone Subscription Agreement with our Company to subscribe for an aggregate of
19,000,000 Cornerstone Shares at the Offering Price, conditional upon, inter alia, the
Management and Underwriting Agreement having been entered into, and not having been
terminated pursuant to its terms on or prior to the date of Listing.
Details of the Cornerstone Investors are as set out below:
FIL Investment Management (Hong Kong) Limited
FIL Investment Management (Hong Kong) Limited, acting as professional fiduciary for certain
accounts, is incorporated in Hong Kong. Its principal business activity is asset management.
OWW Investments III Limited
OWW Capital Partners, fund manager of OWW Investments III Limited, is a Singapore-based
private equity investment firm that focuses on investments in infocomm technology, logistics,
education/training, healthcare, financial services and consumer services sectors. OWW Capital
Partners has invested in a number of B2B and B2C IT companies in South-east Asia and China.
SHAREHOLDERS
126
SIGNIFICANT CHANGES IN PERCENTAGE OF OWNERSHIP
Save as disclosed below, there has been no change in the percentage of ownership of Shares
held by our Directors, Controlling Shareholders and Substantial Shareholders in the Period Under
Review up to the Latest Practicable Date:
As at
31 December 2011
As at
31 December 2012
As at
31 December 2013
As at the Latest
Practicable Date
Directors
Number of
Shares
held %
Number of
Shares
held %
Number of
Shares
held %
Number of
Shares
held %
Lim Chung Chun 45,271,164 22.55 45,271,164 22.47 46,296,492 22.83 46,967,964 22.98
Lim Wee Kian 14,145,276 7.05 14,601,834 7.25 14,932,548 7.36 18,837,120 9.21
Ling Peng Meng 8,597,190 4.28 8,74,7190 4.34 8,945,304 4.41 10,493,580 5.13
Kok Chee Wai 1,040,028 0.52 1,040,028 0.52 1,061,604 0.52 1,243,428 0.61
Low Huan Ping – 0.00 – 0.00 243,774 0.12 906,594 0.44
Yao Chih Matthias – 0.00 – 0.00 – 0.00 48,000 0.02
Ng Loh Ken Peter – 0.00 – 0.00 – 0.00 84,000 0.04
Substantial/Controlling
Shareholders
SPH AsiaOne Ltd 34,897,392 17.38 36,474,618 18.11 37,300,716 18.39 40,680,642 19.90
Note: The percentage ownership of Shares held by our Directors, Controlling Shareholders and Substantial Shareholders
in the table above does not include the deemed interests (if any) of such Directors, Controlling Shareholders or
Substantial Shareholders.
MORATORIUM
To demonstrate their commitment to our Group, certain Shareholders have agreed with the Joint
Issue Managers, Bookrunners and Underwriters, from the Listing Date until the date falling six (6)
months after the Listing Date (both dates inclusive) (the “Moratorium Period”), to subject all or
a part of their shareholding held at the time of Listing (as the case may be) to certain moratorium
arrangements. Further details of the moratorium arrangements are set out below.
The aggregate number of Shares which will be moratorised are as follows:
Number of Shares under
moratorium
Percentage of
enlarged share capital
immediately after the
Offering
Percentage of
enlarged share capital
immediately after the
Offering (assuming the
outstanding Options
are fully exercised)
157,701,647 61.55% 57.84%
Controlling Shareholders and Directors
To demonstrate their commitment to our Group, our Controlling Shareholder Mr. Lim Chung Chun,
Mdm. Neo Lay Kien, Accretion Investments Pte Ltd and SPH AsiaOne, together with its holding
company SPH, and the rest of our Directors, who hold or have an interest in an aggregate of
130,395,708 Shares, representing approximately 50.9% of our issued share capital immediately
after the Offering, have each agreed with the Joint Issue Managers, Bookrunners and
Underwriters that they will not without the prior written consent of the Joint Issue Managers,
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127
Bookrunners and Underwriters, for the Moratorium Period, directly or indirectly, in respect of all
their Shares held or in which they have an interest at the time of Listing (including any DMG Sale
Shares):
(a) offer, pledge (save for 6,000,000 Shares pledged to RHB Bank Nominees Pte Ltd (the
“Pledgee”) by Mr. Lim Chung Chun and Mdm. Neo Lay Kien as at the Latest Practicable
Date, provided there is no enforcement of the aforementioned pledged shares by the
Pledgee during the Moratorium Period), sell, contract to sell, sell any option or contract to
purchase, purchase any option or contract to sell grant any option, right or warrant to
purchase, lend, hypothecate or encumber or otherwise transfer or dispose of, any of their
Shares (including any interests or securities convertible into or exchangeable for any Shares
or which carry rights to subscribe for or purchase any Shares);
(b) enter into any swap, hedge or other arrangement that transfers to another, in whole or in part,
any of the economic consequences of ownership of the Shares or any interests or securities
convertible into or exercisable or exchangeable for or which carry rights to subscribe or
purchase any Shares, whether such swap, hedge or other arrangement is to be settled by
delivery of Shares or other securities, in cash or otherwise;
(c) deposit any of their Shares (including any interests or securities convertible into or
exercisable or exchangeable for, or which carry rights to subscribe for or purchase any
Shares) in any depository receipt facilities, whether any such transaction is to be settled by
delivery of Shares or other securities, in cash or otherwise;
(d) enter into any transaction or other arrangement having an economic effect similar, in whole
or in part, to the foregoing (a), (b) or (c); or
(e) offer to, or agree to, or publicly announce any intention to do any of the above.
The foregoing restrictions do not apply to the Shares which are lent by Mr. Lim Chung Chun to the
Stabilising Manager under the Share Lending Agreement provided that the restrictions shall apply
to the Shares returned to Mr. Lim Chung Chun pursuant to the Share Lending Agreement.
Shareholders of Accretion Investments Pte Ltd
Mr. Lim Chung Chun and Mr. Lim Wee Kian holds 51% and 49% of the voting shares of Accretion
Investments Pte Ltd respectively, and Mr. Lim Chung Chun, his spouse, Mdm. Neo Lay Kien, Mr.
Lim Wee Kian also hold preference shares (which does not carry voting rights) of Accretion
Investments Pte Ltd (such preference shares together with the voting shares, the “Accretion
Shares”). Accretion Investments Pte Ltd in turn holds 4,201,458 Shares representing
approximately 1.64% of our issued share capital immediately after the Offering.
Mr. Lim Chung Chun, his spouse, Mdm. Neo Lay Kien and Mr. Lim Wee Kian have also each
agreed with the Joint Issue Managers, Bookrunners and Underwriters that they will not without the
prior written consent of the Joint Issue Managers, Bookrunners and Underwriters, for the
Moratorium Period, directly or indirectly, in respect of all the Accretion Shares held or in which they
have an interest at the time of Listing:
(a) offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any
option or contract to sell grant any option, right or warrant to purchase, lend, hypothecate or
encumber or otherwise transfer or dispose of, any of their Accretion Shares (including any
interests or securities convertible into or exchangeable for any Accretion Shares or which
carry rights to subscribe for or purchase any Accretion Shares);
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128
(b) enter into any swap, hedge or other arrangement that transfers to another, in whole or in part,
any of the economic consequences of ownership of the Accretion Shares or any interests or
securities convertible into or exercisable or exchangeable for or which carry rights to
subscribe or purchase any Accretion Shares, whether such swap, hedge or other
arrangement is to be settled by delivery of Accretion Shares or other securities, in cash or
otherwise;
(c) deposit any of their Accretion Shares (including any interests or securities convertible into or
exercisable or exchangeable for, or which carry rights to subscribe for or purchase any
Accretion Shares) in any depository receipt facilities, whether any such transaction is to be
settled by delivery of Accretion Shares or other securities, in cash or otherwise;
(d) enter into any transaction or other arrangement having an economic effect similar, in whole
or in part, to the foregoing (a), (b) or (c); or
(e) offer to, or agree to, or publicly announce any intention to do any of the above.
SPH in respect of the shares of SPH AsiaOne
SPH holds 100% of the shares in the capital of SPH AsiaOne (the “SPH AsiaOne Shares”). SPH
AsiaOne in turn holds 40,680,642 Shares representing approximately 15.88% of our issued share
capital immediately after the Offering.
SPH has also agreed with the Joint Issue Managers, Bookrunners and Underwriters that it will not
without the prior written consent of the Joint Issue Managers, Bookrunners and Underwriters, for
the Moratorium Period, directly or indirectly, in respect of all the SPH AsiaOne Shares held or in
which they have an interest at the time of Listing:
(a) offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any
option or contract to sell grant any option, right or warrant to purchase, lend, hypothecate or
encumber or otherwise transfer or dispose of, any of its SPH AsiaOne Shares (including any
interests or securities convertible into or exchangeable for any SPH AsiaOne Shares or
which carry rights to subscribe for or purchase any SPH AsiaOne Shares);
(b) enter into any swap, hedge or other arrangement that transfers to another, in whole or in part,
any of the economic consequences of ownership of the SPH AsiaOne Shares or any interests
or securities convertible into or exercisable or exchangeable for or which carry rights to
subscribe or purchase any SPH AsiaOne Shares, whether such swap, hedge or other
arrangement is to be settled by delivery of SPH AsiaOne Shares or other securities, in cash
or otherwise;
(c) deposit any of its SPH AsiaOne Shares (including any interests or securities convertible into
or exercisable or exchangeable for, or which carry rights to subscribe for or purchase any
SPH AsiaOne Shares) in any depository receipt facilities, whether any such transaction is to
be settled by delivery of SPH AsiaOne Shares or other securities, in cash or otherwise;
(d) enter into any transaction or other arrangement having an economic effect similar, in whole
or in part, to the foregoing (a), (b) or (c); or
(e) offer to, or agree to, or publicly announce any intention to do any of the above.
SHAREHOLDERS
129
DMG Sale Shares
On 12 November 2014, DMG had disposed its entire shareholding in our Company, comprising
21,849,024 Shares (the “DMG Sale Shares”), to certain Shareholders at a price of approximately
S$0.83 per Share (or S$5 per share before the Sub-division undertaken in conjunction with the
Offering and the issuance of the Cornerstone Shares) (the “First Sale”). Subsequently on 19
November 2014, following the conversion of our Company into a public company limited by shares
and the adoption of our new Articles of Association, some of the Shareholders had further
transfered some or all of the DMG Sale Shares they received through the First Sale to other
existing and/or new Shareholders (the “Second Sale”). A total of 41 persons acquired DMG Sale
Shares through the First Sale and/or the Second Sale.
Each of the persons who acquired the DMG Sale Shares, whether through the First Sale or the
Second Sale, has agreed with the Joint Issue Managers, Bookrunners and Underwriters that they
will not without the prior written consent of the Joint Issue Managers, Bookrunners and
Underwriters, for the Moratorium Period, directly or indirectly in respect of all the DMG Sale
Shares held or in which they have an interest at the time of Listing:
(a) offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any
option or contract to sell, grant any option, right or warrant to purchase, lend, hypothecate
or encumber or otherwise transfer or dispose of, any of their DMG Sale Shares (including any
interests or securities convertible into or exchangeable for any DMG Sale Shares or which
carry rights to subscribe for or purchase any DMG Sale Shares);
(b) enter into any swap, hedge or other arrangement that transfers to another, in whole or in part,
any of the economic consequences of ownership of the DMG Sale Shares or any interests
or securities convertible into or exercisable or exchangeable for or which carry rights to
subscribe or purchase any DMG Sale Shares, whether such swap, hedge or other
arrangement is to be settled by delivery of DMG Sale Shares or other securities, in cash or
otherwise;
(c) enter into any transaction or other arrangement having an economic effect similar, in whole
or in part, to the foregoing (a) or (b);
(d) deposit any of their DMG Sale Shares (including any interests or securities convertible into
or exercisable or exchangeable for, or which carry rights to subscribe for or purchase any
DMG Sale Shares) in any depository receipt facilities, whether any such transaction is to be
settled by delivery of DMG Sale Shares or other securities, in cash or otherwise; or
(e) offer to, or agree to, or publicly announce any intention to do any of the above.
Shareholders to which Rule 229(4) of the Listing Manual applies
33 of our existing Shareholders (the “Rule 229(4) Shareholders”) hold or have an interest in our
Shares that are subject to a six-month moratorium pursuant to the formula specified in Rule 229(4)
of the Listing Manual.
17 of the 33 Rule 229(4) Shareholders have agreed to subject a larger proportion of their
shareholding to the moratorium arrangements which are described in greater detail below. For the
avoidance of doubt, a larger number of Shares will be moratorised than what is required pursuant
to the formula specified in Rule 229(4) of the Listing Manual.
SHAREHOLDERS
130
The remaining 16 Rule 229(4) Shareholders have agreed with the Joint Issue Managers,
Bookrunners and Underwriters that they will not without the prior written consent of the Joint Issue
Managers, Bookrunners and Underwriters, for the Moratorium Period, directly or indirectly in
respect of a proportion of their Shares held or in which they have an interest as determined based
on the formula set out in Rule 229(4) of the Listing Manual (but excluding the DMG Sale Shares,
all of which will be subject to the moratorium arrangements for the Moratorium Period)(the “Rule
229(4) Moratorised Shares”):
(a) offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any
option or contract to sell grant any option, right or warrant to purchase, lend, hypothecate or
encumber or otherwise transfer or dispose of, any of their Rule 229(4) Moratorised Shares
(including any interests or securities convertible into or exchangeable for any Rule 229(4)
Moratorised Shares or which carry rights to subscribe for or purchase any Rule 229(4)
Moratorised Shares);
(b) enter into any swap, hedge or other arrangement that transfers to another, in whole or in part,
any of the economic consequences of ownership of the Rule 229(4) Moratorised Shares or
any interests or securities convertible into or exercisable or exchangeable for or which carry
rights to subscribe or purchase any Rule 229(4) Moratorised Shares, whether such swap,
hedge or other arrangement is to be settled by delivery of Rule 229(4) Moratorised Shares
or other securities, in cash or otherwise;
(c) deposit any of their Rule 229(4) Moratorised Shares (including any interests or securities
convertible into or exercisable or exchangeable for, or which carry rights to subscribe for or
purchase any Rule 229(4) Moratorised Shares) in any depository receipt facilities, whether
any such transaction is to be settled by delivery of Rule 229(4) Moratorised Shares or other
securities, in cash or otherwise;
(d) enter into any transaction or other arrangement having an economic effect similar, in whole
or in part, to the foregoing (a), (b) or (c); or
(e) offer to, or agree to, or publicly announce any intention to do any of the above.
Directors and employees of our Group Companies
11 of the Rule 229(4) Shareholders and four (4) of our existing Shareholders are directors and
employees of our Group Companies, and have agreed with the Joint Issue Managers,
Bookrunners and Underwriters that they will not without the prior written consent of the Joint Issue
Managers, Bookrunners and Underwriters, for the Moratorium Period, directly or indirectly in
respect of 70% of their Shares held or in which they have an interest at the time of Listing
(excluding the DMG Sale Shares, all of which will be subject to the moratorium arrangements for
the Moratorium Period)(the “70% Moratorised Shares”):
(a) offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any
option or contract to sell grant any option, right or warrant to purchase, lend, hypothecate or
encumber or otherwise transfer or dispose of, any of their 70% Moratorised Shares (including
any interests or securities convertible into or exchangeable for any 70% Moratorised Shares
or which carry rights to subscribe for or purchase any 70% Moratorised Shares);
(b) enter into any swap, hedge or other arrangement that transfers to another, in whole or in part,
any of the economic consequences of ownership of the 70% Moratorised Shares or any
interests or securities convertible into or exercisable or exchangeable for or which carry
SHAREHOLDERS
131
rights to subscribe or purchase any 70% Moratorised Shares, whether such swap, hedge or
other arrangement is to be settled by delivery of 70% Moratorised Shares or other securities,
in cash or otherwise;
(c) deposit any of their 70% Moratorised Shares (including any interests or securities convertible
into or exercisable or exchangeable for, or which carry rights to subscribe for or purchase any
70% Moratorised Shares) in any depository receipt facilities, whether any such transaction
is to be settled by delivery of 70% Moratorised Shares or other securities, in cash or
otherwise;
(d) enter into any transaction or other arrangement having an economic effect similar, in whole
or in part, to the foregoing (a), (b) or (c); or
(e) offer to, or agree to, or publicly announce any intention to do any of the above.
Certain existing Shareholders
Six (6) Rule 229(4) Shareholders and two (2) of our existing Shareholders have agreed with the
Joint Issue Managers, Bookrunners and Underwriters that they will not without the prior written
consent of the Joint Issue Managers, Bookrunners and Underwriters, for the Moratorium Period,
directly or indirectly in respect of 45% of their Shares held or in which they have an interest at the
time of Listing (excluding the DMG Sale Shares, all of which will be subject to the moratorium
arrangements for the Moratorium Period)(the “45% Moratorised Shares”):
(a) offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any
option or contract to sell grant any option, right or warrant to purchase, lend, hypothecate or
encumber or otherwise transfer or dispose of, any of their 45% Moratorised Shares (including
any interests or securities convertible into or exchangeable for any 45% Moratorised Shares
or which carry rights to subscribe for or purchase any 45% Moratorised Shares);
(b) enter into any swap, hedge or other arrangement that transfers to another, in whole or in part,
any of the economic consequences of ownership of the 45% Moratorised Shares or any
interests or securities convertible into or exercisable or exchangeable for or which carry
rights to subscribe or purchase any 45% Moratorised Shares, whether such swap, hedge or
other arrangement is to be settled by delivery of 45% Moratorised Shares or other securities,
in cash or otherwise;
(c) deposit any of their 45% Moratorised Shares (including any interests or securities convertible
into or exercisable or exchangeable for, or which carry rights to subscribe for or purchase any
45% Moratorised Shares) in any depository receipt facilities, whether any such transaction
is to be settled by delivery of 45% Moratorised Shares or other securities, in cash or
otherwise;
(d) enter into any transaction or other arrangement having an economic effect similar, in whole
or in part, to the foregoing (a), (b) or (c); or
(e) offer to, or agree to, or publicly announce any intention to do any of the above.
SHAREHOLDERS
132
No sale of similar securities by our Company
We have agreed with the Joint Issue Managers, Bookrunners and Underwriters that, from the
Listing Date until the date falling six (6) months after Listing Date (both dates inclusive), we will
not, without the prior written consent of the Joint Issue Managers, Bookrunners and Underwriters,
directly or indirectly:
(a) allot, offer, issue, sell, contract to issue, grant any option, warrant or other right to subscribe
or purchase, grant security over, encumber (whether by way of mortgage, assignment of
rights, charge, pledge, pre-emption rights, rights of first refusal or otherwise), or otherwise
dispose of or transfer, any Shares or any other securities of our Company or any subsidiary
of ours (including any equity-linked securities, perpetual securities and any securities
convertible into or exchangeable for, or which carry rights to subscribe for or purchase such
Shares or any other securities of our Company or any subsidiary of ours), whether such
transaction is to be settled by delivery of Shares or other securities of our Company or any
subsidiary of ours, or in cash or otherwise;
(b) enter into any swap, hedge or other arrangement that transfers to another, in whole or in part,
any of the economic consequences of ownership of any Shares or any other securities of our
Company or any subsidiary of ours, or any interest in any of the foregoing (including any
securities convertible into or exchangeable for, or which carry rights to subscribe or purchase
Shares or any other securities of our Company or any subsidiary of ours), whether such
transaction is to be settled by delivery of Shares or other securities of our Company or any
subsidiary of ours, or in cash or otherwise;
(c) deposit any Shares or any other securities of our Company or any subsidiary of ours
(including any interests or securities convertible into or exercisable or exchangeable for, or
which carry rights to subscribe or purchase such Shares or any other securities of our
Company or any subsidiary of ours) in any depository receipt facilities whether any such
transaction is to be settled by delivery of the Shares or other securities of our Company or
any subsidiary of ours, or in cash or otherwise;
(d) enter into any transaction or other arrangement with the same economic effect, in whole or
in part, as any transaction described in the foregoing (a), (b) or (c); or
(e) offer or agree to or make any announcement with respect to any of the foregoing
transactions.
The foregoing restriction does not apply to the New Shares issued under the Offering, the
Cornerstone Shares, the Option Shares, the Award Shares and the Additional Shares or utilisation
of treasury shares issued in accordance with the Companies Act.
Persons intending to subscribe for Shares in the Offering
While some of our Directors (including Directors who are Substantial Shareholders) intend to
subscribe for the New Shares, none of our other Substantial Shareholders intends to subscribe for
the New Shares. In the event that any of our Directors or Substantial Shareholders subscribe for
any New Shares, we will, pursuant to Rule 240(1) of the Listing Manual, announce details of such
subscription.
SHAREHOLDERS
133
To the best of our knowledge, we are not aware of any person who intends to subscribe for more
than 5.0% of the New Shares. However, through a book-building process to assess market
demand for our Shares, there may be person(s) who may indicate interest to subscribe for more
than 5.0% of the New Shares.
No Shares shall be allotted or allocated on the basis of this Prospectus later than six (6) months
after the date of registration of this Prospectus by the Authority.
SHAREHOLDERS
134
OVERVIEW
Our core business is embodied by the name of our Company, “iFAST”, which stands for
“Investments and Funds Administration, Services and Transactions”. Specifically, we are an
internet-based Investment Products distribution and administration platform and provide a
comprehensive range of services, including the execution of investment transactions, investment
administration, research and investment trainings, software tools, IT services and backroom
functions to more than 150 FAs and financial institutions and more than 5,000 FA representatives
in the jurisdictions in which we operate.
We were incorporated in Singapore on 11 September 2000, and subsequently expanded to Hong
Kong in 2007, Malaysia in 2008 and China in 2014.
Since our incorporation, we have steadily built and established a reputation for providing easy
access to investment products, namely, funds (including unit trusts) and SGS Bonds in Singapore,
funds (including unit trusts) in Malaysia, and funds (including unit trusts) and corporate bonds in
Hong Kong as well as providing a Platform which enables investors to transact and invest at
competitive rates. iFAST Financial, our wholly-owned subsidiary, is also an investment
administrator under the CPF Investment Scheme in Singapore.
In Singapore, our core market, we are a leading and established funds and investments
distribution platform for more than 50 independently-owned FAs and financial institutions, and
over 2,500 FA representatives. According to Cerulli Associates, our Group is a leading distribution
platform among independent financial advisory firms and the online channel (DIY Investors) in
Singapore. As at end September 2014, our subsidiary iFAST Financial administers approximately
S$3.88 billion in AUA. Please refer to the section entitled “Our Business – Our Business Model”
in this Prospectus for more details on the importance of AUA to our business.
Via our Platform, we are able to provide a whole range of services to FAs, financial institutions and
their respective clients and also enable DIY Investors to make informed investments decisions
and execute online investment transactions by equipping them with a wide range of user-friendly
investment and planning tools. We primarily conduct our business in two (2) business divisions,
namely, the B2B Business and the B2C Business divisions.
B2B Business
Our B2B Business began in Singapore in 2002 and we launched in Hong Kong and Malaysia in
2008. Our B2B Business focuses on servicing FAs by providing them with an efficient and reliable
investment platform to handle their back-end transactional and operational needs. Through our
B2B Business, we partner with financial institutions and FAs and assist with their Investment
Products distribution, administration, execution and settlement needs. As part of our B2B
Business, we also provide regular research updates on Investment Products, as well as
Internet-based tools and mobile-friendly applications for financial institutions and FAs to utilise in
their portfolio and investment planning. Our Group’s B2B Platform can be accessed via our iFAST
Financial Website, www.ifastfinancial.com.
B2C Business
Our B2C Business began in Singapore in 2000 and we launched our B2C Business in Hong Kong
in 2007 and subsequently, Malaysia in 2008. Our B2C Business focuses on providing a reliable
website which offers Investment Products, Investment Products research, portfolio research, tools
for analyses of Investment Products, a strong emphasis on customer service, and a competitive
OUR BUSINESS
135
and transparent fee structure. Our B2C Business is targeted at DIY Investors seeking alternative
investment channels that provide them with more control in the decision-making and execution
process of investing. Products and services offered via Fundsupermart.com, our B2C Platform,
include the offering of Investment Products, free switching of unit trusts and bond unit trusts sold
at 0% upfront sales charges. Our B2C Platform can be accessed via our Fundsupermart.com
Website, www.fundsupermart.com.
Our business grew during the Period Under Review. Our net revenue was approximately S$25.2
million in FY2011, S$26.3 million in FY2012, S$31.6 million in FY2013 and S$27.3 million in
9M2014. Additionally, our average AUA was approximately S$3.88 billion in FY2011, S$3.91 billion
in FY2012, S$4.46 billion in FY2013 and S$4.89 billion in 9M2014.
HISTORY AND DEVELOPMENT
We were incorporated in Singapore on 11 September 2000 as “Fundsupermart Holdings Pte. Ltd.”
and changed our name to “iFAST Corporation Pte. Ltd.” on 26 March 2003. Since our
incorporation in 2000, we have expanded our business to three (3) other jurisdictions in Asia,
namely, Malaysia, Hong Kong and China and our net revenue has grown from S$25.2 million in
FY2011 to S$31.6 million in FY2013, while our average AUA has grown from S$3.88 billion in
FY2011 to S$5.13 billion as at end September 2014.
Our business began from an observation made by our founders in 1999 that the then dominant
distribution channels in the unit trusts industry could be made more efficient and cost-effective
through the use of the Internet. This observation led our founders, one of whom is Mr. Lim Chung
Chun, to establish Fundsupermart.com Pte. Ltd. (now known as iFAST Financial) in early 2000 to
provide a website which offered Investment Products, Investment Products research, portfolio
research, tools for analyses of Investment Products, a strong emphasis on customer service, and
a competitive and transparent fee structure. The roll-out of our Fundsupermart.com Website
coincided with the rise of Internet-based businesses in the US and was embraced by DIY investors
looking for alternative ways to make self-directed investments. Fundsupermart’s services
continue to remain a mainstay of our B2C Business today even as we have expanded the breadth
and depth of our services and increased the range of Investment Products we offer.
Between 2001 and 2002, the regulatory framework of the financial services industry in Singapore
changed with the proposed introduction of the FAA. The increase in the number of new FAs as a
result of the enactment of the FAA in 2002 presented an opportunity for our Group to diversify into
the B2B Business by modifying our Platform to support the businesses of FAs. Further to the
addition of our new business division, we re-organised the companies in our Group in March 2003.
Our Company changed our name to “iFAST Corporation Pte. Ltd.” and “Fundsupermart.com Pte.
Ltd.” was renamed “iFAST Financial Pte. Ltd.”
In addition, two (2) separate business divisions were set up under iFAST Financial, one (1) to
operate the B2C Business and the other to operate the B2B Business. At about the same time, we
acquired the entire share capital of iFAST Financial from its shareholders through a share swap
pursuant to which shareholders of iFAST Financial received our Shares as consideration for the
sale of their shares in iFAST Financial to our Company. iFAST Financial subsequently became a
wholly-owned subsidiary of our Company.
Our B2B Business benefited from the demand from FA companies for an efficient investment
platform that could handle their back-end transactional and operational needs which included
administering the distribution of Investment Products and handling settlement logistics.
OUR BUSINESS
136
In March 2006, we expanded our B2B services by establishing our Pensions Business. Via our
iFAST Pensions Website, we assist companies to administer pension schemes for their
employees. We also provide administrative support and specialist services to help companies
implement and administer employee retirement benefit plans in Singapore. In November 2006, we
also obtained an MAS exemption from the requirements under the TCA to carry out the trust
business (including acting as the trustee) of any corporate pension plans.
Our geographical expansion began in 2007, with the incorporation of iFAST HK, a wholly-owned
subsidiary of our Company. iFAST HK obtained the necessary licences to carry out business in
Hong Kong in March 2007 and commenced its B2C Business, Fundsupermart.com, in July 2007.
This was followed by the launch of its B2B Business in 2008. In March 2009, we grew our
presence further in the B2B division in Hong Kong by acquiring from ING Insurance Asia Pacific
a 100% stake in ING Platform Services, a Hong Kong-based investment platform and the service
provider of I-Wrap/Private Portfolio Service in Hong Kong and Singapore.
To take advantage of lower costs in Malaysia and to complement our regional development plans,
we set up a wholly-owned subsidiary, iFAST Service Centre, in Malaysia in March 2006 to provide
call centre and other support services such as IT and operational support to our Group. In
November 2007, we entered into a joint venture agreement with OSK Investment Bank Bhd (a
wholly-owned subsidiary of OSK Holdings Bhd, listed in Bursa Malaysia) and formed iFAST-OSK
Sdn Bhd in which we had a majority stake and management control. In July 2008, iFAST-OSK’s
wholly-owned subsidiary iFAST Capital Malaysia was awarded the CMSL by the SC and we
launched Fundsupermart.com and iFAST platform services for Corporate Unit Trust Advisers
(CUTAs) in Malaysia (the equivalent of a FA Company in Singapore or Type 4 licensed corporation
in Hong Kong) in September and October 2008 respectively.
In 2009, we further expanded our B2B services in Singapore by offering a dedicated website, iGP,
to cater to the needs of HNW clients. iGP focuses on providing distribution, administration,
operational and transactional services to financial institutions and FA companies servicing HNW
clients. The demand for the differentiated services targeted at FA representatives and their HNW
clients was also strongly evident in HK, and we subsequently launched iGP in Hong Kong in July
2010.
In December 2013, we further increased our shareholding in iFAST-OSK from 61.73% to 65.12%
pursuant to a capital injection of RM2.3 million.
On 20 June 2014, we took an investment stake of 19.9% stake in Providend by acquiring 30,384
newly issued preferred shares at S$13.17 per preferred share for an aggregate consideration of
approximately S$400,157.28, satisfied through the capitalisation into preferred shares of the
convertible loans granted pursuant to the convertible loan letters dated 15 November 2013 and 13
January 2014 from our Company to Providend granting a loan of S$70,000 and S$180,000 to
Providend respectively, with the remainder in cash. Since the enactment of the FAA in Singapore
in 2002, the FA industry has grown steadily in terms of the number of companies and advisers and
assets under administration. As an early entrant to Singapore’s wealth management industry, we
saw potential in Providend as a FA company to partner with and grow the presence of FA
companies in the wealth management scene in Singapore. Our acquisition of a 19.9% stake in
Providend was approved by MAS and was completed on 25 July 2014. For further details on
Providend, please refer to the sections entitled “Group Structure” and “General and Statutory
Information” in this Prospectus.
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On 7 March 2014, we entered into a sale and purchase agreement to acquire the minority stake
of 34.88% in iFAST-OSK for a consideration of RM9.07 million from RHB our joint venture partner
in the iFAST Capital Malaysia business. The consideration of RM9.07 million was determined on
a willing buyer willing seller basis, after taking into consideration (i) the cost of investment that
RHB had incurred since 2007; and (ii) the current performance and future prospects of
iFAST-OSK. Subsequent to this acquisition, iFAST-OSK has been renamed iFAST Malaysia Sdn.
Bhd.. Our acquisition of RHB’s stake was approved by the SC on 9 June 2014 and was completed
on 18 July 2014.
On 7 July 2014, we entered the Chinese market by incorporating iFAST China, a wholly-owned
subsidiary of iFAST HK. iFAST China will operate in China as a provider of platform services in
China, including IT and business process outsourcing services such as system application
management and maintenance, IT technology management, back office services, software
development, and data processing. As of the Latest Practicable Date, iFAST China is still in the
set-up stage of its business and is developing its in-house IT system, which is expected to be
completed by the first half of 2015. Based on its current business model, iFAST China has
obtained the licences required for it to commence operation.
Our Group may also apply for additional licences from the relevant regulatory authorities from time
to time as part of our Group’s efforts to expand our business, services offered and types of
Investment Products available. For example, in August 2014, iFAST HK had written to SFC, the
relevant regulatory authority in Hong Kong, to apply for the addition of Type 9 regulated activities
(Asset Management) to its licence. As at the Latest Practicable Date, our application is still under
consideration and has not been approved. iFAST HK is currently a holder of a licence for Type 1
regulated activities (Dealing in Securities) and Type 4 regulated activities (Advising on Securities).
Please see the sections entitled “Government Regulations and Licensing” for further details on our
licences.
The table below sets forth our key milestones and awards since incorporation:
Year Event
2000 Incorporation of our Company and commencement of operations of our B2C
Platform in Singapore, Fundsupermart.com, targeted at retail investors.
Fundsupermart.com distinguished itself from its competitors by focusing on
providing a website which offered Investment Products, Investment Products
research, portfolio research, tools for analyses of Investment Products, a strong
emphasis on customer service, and a competitive and transparent fee structure.
2002 Launch of B2B Business in Singapore targeted at banks, financial institutions and
FAs to tap on the demand from mostly FAs for an efficient investments platform that
could handle their back-end transactional and operational needs.
2006 Launch of iFAST Pensions Website in Singapore with the expansion of the B2B
Business. The iFAST Pensions Website assists companies to administer pension
schemes for their employees, and provides administrative support and specialist
services to help companies implement and administer employee retirement benefit
plans.
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Year Event
Incorporation of iFAST Service Centre Sdn. Bhd. in Malaysia to take advantage of
lower costs in Malaysia and to provide support, especially IT and operational, to
our Group in view of our plans to expand into new markets.
2007 Establishment of our B2C operations in Hong Kong after our wholly-owned
subsidiary, iFAST Financial (HK) Ltd, obtained the necessary licences.
Ranked 9th at the Enterprise 50 Awards organised by Singapore’s The Business
Times to recognise the top 50 most enterprising privately-owned companies that
have contributed to Singapore’s economic development.
2008 Establishment of our B2B operations in Hong Kong.
Establishment of our B2B and B2C operations in Malaysia after our wholly-owned
subsidiary, iFAST Capital Sdn Bhd, obtained the necessary licences.
Ranked 2nd at the Enterprise 50 Awards organised by Singapore’s The Business
Times to recognise the top 50 most enterprising privately-owned companies that
have contributed to Singapore’s economic development.
2009 Acquisition of 100% interest in ING Platform Services Limited from ING Insurance
Asia/Pacific. ING Platform Services Limited is a Hong Kong-based investment
platform and the service provider of I-Wrap/Private Portfolio Service in Hong Kong
and Singapore.
Launch of specialised B2B division, iFAST Global Prestige, in Singapore to focus
on the distribution, administration, operational and transactional services to
financial institutions and FA companies servicing high net worth clients.
2010 Launch of specialised B2B division, iFAST Global Prestige, in Hong Kong to focus
on the distribution, administration, operational and transactional services to
financial institutions and FA companies servicing high net worth clients.
2011 Creation and launch of “FSM Mobile”, our first mobile application for the iPhone
which offers investors a free tool that enables them to use popular tools found on
the Fundsupermart.com Website, as well as other new features. This was
eventually rolled out on other mobile platforms, as well as in Hong Kong and
Malaysia.
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Year Event
2009-2013 In August 2009, iFAST HK and Fundsupermart.com (HK) won the “Fund Platform”
and “Online Usability” awards respectively at The Best Practice Financial Services
Award 2009, which was organised by Benchmark & Best Practice Management
Magazine.
In December 2010, iFAST HK received the “Best-in-Class” award in the “Advisers
Choice of the Year” category and Fundsupermart.com (HK) was named
“Outstanding Achiever” award in the “Online Capabilities Award” category at the
Benchmark Wealth Management Awards 2010.
In December 2011, iFAST HK received the “Best-in-Class” award in the “Platform
Provider of the Year – Professional” category and Fundsupermart.com (HK)
received the “Best-in-Class” award in the “Best in Online Usability” category at the
Benchmark Wealth Management Awards 2011.
In November 2013, Fundsupermart.com (HK) received the “Best-in-Class” award
in the “Online Usability – Independent” category at the Benchmark Wealth
Management Awards 2013. At the same awards, iFAST HK was named
“Outstanding Achiever” in the “Investment Platform – Independent” category.
2014 Establishment of our China operations with the incorporation of iFAST China.
Company was awarded a Silver award in the “Most Informative Use of Mobile”
category at the Mob-Ex Awards.
iFAST HK was awarded the “Friendly-Family Employer 2013/14” by the Family
Council of the government of Hong Kong SAR. iFAST HK was also awarded the
Caring Company Logo 2013/14 by the Hong Kong Council of Social Service, in
recognition for its commitment in Caring for the Community, Caring for the
Employees and Caring for the Environment over the past year.
B2B BUSINESS
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Our B2B Business focuses on servicing FAs by providing them with an efficient and reliable
investment platform to handle their back-end transactional and operational needs. Through our
B2B Business, we partner with financial institutions and FAs and assist with their Investment
Products distribution, administration, execution and settlement needs. As part of our B2B
Business, we also provide regular research updates on Investment Products, as well as
Internet-based tools and mobile-friendly applications for financial institutions and FAs to utilise in
their portfolio and investment planning. Our Group’s B2B Platform can be accessed via our iFAST
Financial Website, www.ifastfinancial.com.
iFAST Pensions Website
Our B2B division also includes our Pensions Business that assists our pension corporate clients
to establish tax-effective retirement benefits schemes for their employees and provides
administrative support and specialist services to help these corporate clients implement and
administer employee retirement benefit plans. Services rendered under our Pensions Business
include advising corporate clients on the various retirement benefit solutions for employees,
helping to set up retirement benefit plans and the day-to-day administration of the retirement
benefit plans. These services are important for companies that want to offer extra pensions
benefits to retain their employees; or in cases where their employees are mostly foreigners such
as in multinational companies. Our iFAST Pensions Website Customers include various
multinational companies, including international banks and educational groups. Revenue
generated from our Pensions Business has not been significant since inception. Our iFAST
Pensions Website’s address is www.ifastpensions.com.
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iFAST Global Prestige
In 2009 and 2010, we launched a specialised B2B division, iFAST Global Prestige in Singapore
and Hong Kong, respectively. iFAST Global Prestige focuses on the distribution, administration,
operational and transactional services to financial institutions and FA companies servicing HNW
clients. The range of products offered by iFAST Global Prestige is more extensive and includes
products that are suitable for accredited investors (as defined under Singapore’s regulations), as
well as more specialised services to FA representatives servicing the HNW market segment.
B2C BUSINESS
Our B2C Business began in Singapore in 2000 and we subsequently expanded our operations to
Hong Kong in 2007 and, Malaysia in 2008. Our B2C Business focuses on providing a reliable
website which offers Investment Products, Investment Products research, portfolio research, tools
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for analyses of Investment Products, a strong emphasis on customer service, and a competitive
and transparent fee structure. Our B2C Business is targeted at DIY Investors seeking alternative
investment channels that provide them with more control in the decision-making and execution
process of investing. Products and services offered via Fundsupermart.com, our B2C Platform,
include SGS Bonds in Singapore, corporate bonds in Hong Kong, free switching of unit trusts and
bond unit trusts. Our B2C Platform can be accessed via our Fundsupermart.com Website,
www.fundsupermart.com.
OTHER SERVICES
Apart from the administrative and transactional services available via our Platform, we also
provide investment seminars for our B2B and B2C Customers. In Singapore, our licensed entity,
iFAST Financial is licensed to provide custodial services for funds (including unit trusts) and
Singapore Government Securities (SGS). Similar custodial services are localised for our business
in Hong Kong and Malaysia as well.
OUR BUSINESS MODEL
Our Platform is the core of our business. Our Suppliers provide us with Investment Products which
we distribute via our Platform to our Customers. B2B Customers (banks, FAs, financial institutions
and companies) select Investment Products distributed on our Platform via our iFAST Financial
Website on behalf of adviser-assisted investors and (in the case of our Pensions Business) via our
iFAST Pensions Website on behalf of employees. DIY Investors select Investment Products
distributed on our Platform via our Fundsupermart.com Website. The diagram below illustrates our
business model and the relationship we have with our Suppliers and Customers.
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Proprietary Platform and Services Offered
We believe our business model, while commonly seen in developed financial markets such as the
US, Europe and Australia, is fairly unique in Asia. We differentiate ourselves from our competitors
in the region by offering our Customers consolidated services that we believe can only be obtained
from the concurrent engagement of several different service providers. For example, financial
institutions can leave the administration, settlement, operational and transactional side of their
business to our Platform as well as rely on our Platform to source investment products from
multiple product providers and to arrange fees. Such financial institutions can then focus on their
core business, including clients’ acquisitions, portfolio advice and service. In turn, we can
aggregate the demand for Investment Products from the financial institutions we work with and
enjoy greater bargaining power when approaching product providers with an aggregated number
of Customers and leverage on an aggregated AUA. We believe this arrangement also benefits
product providers, as our aggregation of Customers also reduces the number of parties they have
to negotiate with and service. The consolidation of services we provide typically brings cost
savings and efficiency to our B2B and B2C Customers as well as product providers.
Specifically, our B2B Customers can avoid the need to sign individual distribution agreements with
each product provider and via our Platform, continue to have access to a competitive fee-sharing
structure, transactional capabilities, execution and settlement functionality, efficient collection of
advisory fees, and services which include research, seminars and client services. In particular, in
relation to our collection of Wrap Fees, our current Wrap Fees collection method which involves
the redemption of unit trusts from the unit holdings of our adviser-assisted investors has increased
the efficiency and quality of our collection of Wrap Fees as compared to when Wrap Fees due to
us were typically paid by way of cheque. Under such current collection method, an amount of unit
trusts, the value of which is equivalent to the amount of Wrap Fees due to us, is deducted from
the unit holdings of adviser-assisted investors. We currently experience minimal instances of
non-payment from our adviser-assisted investors of the Wrap Fees due to us as a majority of our
adviser-assisted investors have converted to our current Wrap Fees collection method.
Previously, when Wrap Fees due to us were typically paid by way of cheque, we had occasionally
experienced instances of an inability to collect such fees due to us. None of the past incidences
of our inability to collect Wrap Fees has resulted in a material and adverse impact to our business.
Additionally, for our B2C Customers, the advantages they have from using our Platform include
the ability to conduct research, execute transactions and monitor their investments via a single
operator. Further, our Platform provides our B2C Customers with a range of Investment Products
at a competitive cost. Our B2C Customers are also given access to seminars conducted by us.
The number of FA representatives using our Platform increased from about 110 in 2002 to over
5,000 FA representatives as at the Latest Practicable Date. As at the Latest Practicable Date, we
have over 190,000 B2B adviser-assisted and B2C accounts that have been opened using our
Platform and over 150 financial advisory companies and financial institutions Customers. We
believe that our offering of an efficient and reliable Platform developed in-house and the steady
growth in the number of our Customers form the foundation for us to build a long-term business
that relies mostly on recurring revenue sources as opposed to relying on shorter-term
commissions the amount of which tends to be less predictable.
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Distribution of Investment Products
We distribute Investment Products in Singapore, Hong Kong and Malaysia through our licensed
entities in these jurisdictions. Please see the section entitled “Government Regulations and
Licensing” for more details on our licensed entities and the types of licences they hold in their
respective jurisdictions.
We distribute over 1,800 Investment Products (including more than 1,600 funds) in Singapore,
Hong Kong and Malaysia. The distribution of such Investment Products must comply with the
regulations in the respective jurisdictions. As at the Latest Practicable Date, we do not distribute
cross-border Investment Products in the markets in which we operate. This means that an investor
who has a Fundsupermart.com account or a B2B account in Singapore, can only invest in
Investment Products distributed on our Platform that are recognised by MAS. The same applies
for the local jurisdictions of Hong Kong and Malaysia.
Transaction Process of a B2B Customer
Our B2B Customer is typically an adviser-assisted customer who opens an iFAST account with our
licensed entity with the assistance of his/her FA (or equivalent). A B2B adviser-assisted customer
who opens an iFAST account in Singapore will be able to transact in Investment Products
distributed by the licensed entity in Singapore. This Singapore B2B adviser-assisted customer will
not be able to invest in Investment Products distributed in the other jurisdictions in which we
operate, for example, iFAST HK, unless his/her FA (or equivalent) assists the such customer in
fulfilling the necessary local requirements for opening a separate iFAST account in Hong Kong.
The FA representatives and adviser-assisted customer can log into their account at
www.ifastfinancial.com.
Transaction Process of a B2C Customer
Our B2C Customer is typically a DIY Investor who opens an account with Fundsupermart.com.
Depending on the jurisdiction in which the B2C Customer is initiating the account opening
process, there may be certain regulatory requirements that such B2C Customer has to meet. For
example, in Singapore, a potential B2C Customer who wants to open a Fundsupermart.com
account has to satisfy a Customer Knowledge Assessment (“CKA”) which involves an assessment
of such B2C Customer’s financial knowledge and understanding of the risks and features of
Investment Products before they are allowed to invest. The CKA was implemented by the MAS to
safeguard the interests of investors, especially those who may not have the relevant knowledge
or experience in investing in certain Investment Products. In Singapore, B2C Customers who do
not meet the CKA requirements will be referred to our “Client Investment Specialist” team, who will
provide investment advice and transactional support. In the other jurisdictions in which we
operate, we also have a “Client Investment Specialist” team available to assist any B2C
Customers if they wish to have investment advice. Similar to the B2B Customer process, a DIY
investor who opens a Fundsupermart.com account in Singapore can only transact in Investment
Products distributed via Fundsupermart.com in Singapore and may not invest in Investment
Products distributed via Fundsupermart.com Hong Kong or Fundsupermart.com Malaysia without
opening a separate Fundsupermart.com account in Hong Kong or Malaysia respectively.
Via the Fundsupermart.com Website, DIY Investors have access to fund tools, for example,
“Funds Selector” and “Chart Centre” which they can use to compare Investment Products and
view their Investment Product holdings. DIY Investors are also able to download our “FSM Mobile”
application to analyse Investment Products and/or financial markets as well as to access research
articles.
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Assets Under Administration
In our business, our AUA is the source of our recurring revenue. Factors that led to an increase
in AUA include better portfolio management, better market conditions and new clients’
acquisitions. As at end September 2014, our AUA has a value of approximately S$5.13 billion and
in the last ten (10) years has grown at a CAGR of approximately 26.8% for our Group.
As at end September 2014, the percentage AUA contribution by Singapore, Hong Kong and
Malaysia was 75.5%, 20.5% and 4.0% respectively. The percentage of AUA contribution by our
B2B and B2C Businesses as at end September 2014 was 74.3% and 25.7%, respectively.
While there has been a general uptrend in the value of our AUA in the last ten (10) years, such
an upward trend was interrupted during the GFC in which the financial markets experienced
heightened volatility. Our AUA was affected negatively as some Customers redeemed their
investments and some of the unit trusts’ net asset value declined. These two (2) factors led to the
decline in our AUA. After the GFC, our AUA has grown and resumed a general uptrend as our
business across the markets improved due to better market and investor sentiments.
The following chart illustrates the growth of our AUA since our operations commenced to end
September 2014 (in S$ ’million):
-
1,000
2,000
3,000
4,000
5,000
B2B B2C
Note: The AUA illustrated is based on month-end AUA.
AUA growth, excluding the effects arising from the general economic conditions and financial
market performance, is largely dependent on subscriptions (excluding switching between unit
trusts) and net inflows. The following table shows the breakdown of our Subscriptions and net
inflows in each of FY2011, FY2012, FY2013, 9M2013 and 9M2014 respectively.
S$ ’million FY2011 FY2012 FY2013 9M2013 9M2014
Subscription
(1)
947 941 1,365 1,080 1,138
Net inflows
(2)
55 193 458 416 348
Notes:
(1) Excludes switching between unit trusts.
(2) Net inflows mean subscription (excluding Switching) plus Transfer-in and less both redemption and Transfer-out.
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Profit Before Tax Margin Calculated Based on Net Revenue
Our business has shown to be scalable, with our net revenue growth outpacing our operating
expenses growth once we have achieved a certain level of AUA. As illustrated by the following
chart, our profit before tax from continuing operations was approximately S$2.4 million in FY2011,
S$3.9 million in FY2012, S$8.8 million in FY2013, and S$8.0 million in 9M2014. Using profit before
tax from continuing operations and net revenue to calculate our profit margin, our Group’s profit
margin has improved from approximately 9.4% in FY2011 to approximately 29.1% in 9M2014
driven by the scalability of our business and the higher contributions from our Group’s operations
in Singapore and Hong Kong.
9.4%
15.0%
27.9%
29.1%
0%
5%
10%
15%
20%
25%
30%
35%
2011 2012 2013 9M2014
Source of Revenue
Our revenue is primarily derived from (i) recurring revenue driven by our AUA, which is calculated
based on a certain percentage of AUA value; and (ii) non-recurring revenue that comprises mainly
of commission derived from investment subscription via front-end load commissions or processing
fees. Please refer to the section entitled “Management Discussion & Analysis of Results of
Operations and Financial Position” in this Prospectus for additional information.
Non-recurring revenue and recurring revenue
Revenue derived from our B2B Business includes (i) recurring revenue driven by AUA, comprising
Trailer Fees, Platform Fees and Wrap Fees; and (ii) non-recurring revenue that comprises (a)
commission income derived mainly from investment subscription via front-end load commissions
or processing fees; (b) service fees arising mainly from the provision of currency conversion
administration services to adviser-assisted investors and the provision of administration services
to FAs; (c) advertising fee earned mainly from advertisements placed by third parties on iFAST
Financial Websites and in iFAST in-house magazines and (d) other miscellaneous income such as
magazine sales and software licence revenue.
Revenue derived from our B2C Business includes: (i) recurring revenue driven by AUA,
comprising Trailer Fees and Platform Fees; and (ii) non-recurring revenue that comprises (a)
commission income derived mainly from investment subscription via front-end load commissions
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or processing fees; (b) service fees arising mainly from the provision of currency conversion
administration services to DIY investors; and (c) advertising fee earned mainly from
advertisements placed by third parties on our Fundsupermart.com Website and its mobile
application.
During the initial growth stage of our business, our recurring revenue contributed less to our net
revenue. As our business grew, our recurring revenue increased its contribution to our net
revenue. In line with the increase in our average AUA, the average contribution from recurring
revenue sources was 34.2% in the four-year period from 2004 to 2007, and grew to 71.4% during
the four-year period from 2008 to 2011. Our average AUA over the four-year period from 2004 to
2007 was approximately S$1.47 billion, and this increased to approximately S$3.63 billion during
the four-year period from 2008 to 2011. During the Period Under Review, the average contribution
from our recurring revenue sources have grown to approximately 81.6% of our net revenue and
average AUA was approximately S$4.29 billion.
The following chart illustrates the relationship and breakdown between recurring and non-
recurring net revenue (in S$’million):
0
5
10
15
20
25
30
35
Recurring Non-recurring
27.3
31.6
26.3
25.2
15.9
25.3
28.8
12.8
6.9
4.3
21.8
Our recurring and non-recurring net revenue (in S$’million) for the Period Under Review is as
follows:
S$ ’million FY2011 FY2012 FY2013 9M2014
Recurring net revenue 20.4 22.3 25.6 21.8
Non-recurring net revenue 4.8 4.0 6.0 5.6
For 9M2014, 59.0% of our recurring net revenue is derived from our net trailer fee, 30.6% is from
our net platform fee and 10.4% is from our net wrap fee.
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Net revenue as a percentage of average AUA during the Period Under Review has increased from
0.651% in 2011 to 0.745% in 9M2014. The contribution from recurring net revenue as a
percentage of average AUA is higher than the contribution from non-recurring revenue as a
percentage of AUA. Recurring net revenue as a percentage of average AUA increased from
0.526% in 2011 to 0.593% in 9M2014, while non-recurring revenue as a percentage of average
AUA increased from 0.125% in 2011 to 0.152% in 9M2014.
Net revenue as a percentage
of average AUA
FY2011
(%)
FY2012
(%)
FY2013
(%)
9M2013
(3)
(%)
9M2014
(3)
(%)
Recurring net revenue
(2)
/AUA 0.526 0.571 0.574 0.570 0.593
Non-recurring net
revenue/AUA 0.125 0.101 0.134 0.139 0.152
Net revenue/AUA 0.651 0.672 0.708 0.709 0.745
Operating expenses/AUA 0.588 0.573 0.529 0.532 0.536
Average AUA
(1)
(S$’billion) 3.88 3.91 4.46 4.42 4.89
Notes:
(1) The average AUA is the average of the month-end AUAs for the relevant period.
(2) Our recurring net revenue comprises Trailer Fees which are calculated at up to 0.9% per annum of our average AUA,
Platform Fees which are calculated at up to 0.5% per annum of our average AUA and Wrap Fees which are
calculated at up to 0.2% per annum of our average AUA.
(3) The ratios are calculated based on annualised revenue and operating expenses figures for 9M2013 and 9M2014.
The following chart illustrates our recurring net revenue as a percentage of average AUA for the
Period Under Review:
0.480%
0.500%
0.520%
0.540%
0.560%
0.580%
0.600%
2011
0.526%
2012 2013 9M2014
0.571%
0.574%
0.593%
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Geographical Breakdown of Net Revenue Contribution
Singapore is the most important contributor of our Group’s net revenue accounting for
approximately 83.9%, 81.1%, 76.3% and 70.3% of our Group’s net revenue in FY2011, FY2012,
FY2013 and 9M2014, respectively. As our Hong Kong and Malaysia businesses continue to grow,
their percentage contributions to our Group’s net revenue have been increasing, with Hong Kong’s
net revenue contribution increasing from 14.5% in 2011 to 25.8% in 9M2014, and Malaysia’s net
revenue contribution increasing from 1.6% in 2011 to 3.9% in 9M2014.
COMPETITION
We believe that our B2B and B2C functionalities have positioned us as a leading funds and
investments distribution platform in Asia. From our discussions and checks with our Suppliers and
B2B Customers who are FAs, we understand that based on our market share of AUA and
investment transactions, we are a leading and established funds and investments distribution
platform in Singapore, Malaysia and Hong Kong. In addition, according to Cerulli Associates, our
Group is a leading distribution platform among independent financial advisory firms and the online
channel (DIY Investors) in Singapore. For further details, please refer to the section entitled
“Industry Overview – Investment platforms in Asia ex-Japan: History and growth potential” in this
Prospectus. We face direct competition from businesses offering either a B2B and/or B2C
investment platform as part of their business, and indirect competition from businesses which are
offering other investment products.
In Singapore, we believe that our principal competitors include (i) Aviva Ltd’s Navigator, a B2B
investment platform and Dollardex, a B2C investment platform, and (ii) Phillips Securities Pte
Ltd’s FAME B2B investment platform and POEMS B2C investment platform. Additionally, we also
face competition from banks which are involved in the distribution of funds.
In Hong Kong, we believe that our competition is mostly restricted to the B2C division, with no
comparable independent investment platform in the B2B division. In the B2C division, competitors
include banks which offer their own online distribution channels, for example, Hang Seng Bank
Limited and The Hongkong and Shanghai Banking Corporation Limited, which have a large
customer base and strong branding in Hong Kong, as well as fund houses which distribute funds
online, for example, Fidelity’s Fundsnetwork.
In Malaysia, we believe that we face competition in both B2B and B2C divisions, the largest being
Public Mutual Berhad. Similar to the Singapore and Hong Kong markets, we also compete with
banks in Malaysia that have started offering funds online.
Aside from competition in respect of our Platform, we face indirect competition from other
businesses in respect of our product offerings, especially in the Singapore and Hong Kong
markets. For instance, our products compete with insurance ‘wrapper’ products, which essentially
wrap a fund or a bond into an investment-linked insurance product. Such products, which are
known as backend investment-linked insurance policies (“ILPs”) in Singapore, or Investment
Linked Assurance Schemes (“ILAS”) or “101 products” in Hong Kong, have been sold by various
financial institutions, and often generate higher commissions for the agents. As our Platform
distributes funds and bonds in a non-wrapper format, the fees we receive are substantially lower.
As insurance ‘wrapper’ products offer larger commissions, they have been aggressively marketed
by some investment industry players and indirectly compete with the Investment Products
distributed on our Platform. However, we believe regulatory changes in Hong Kong that will come
into effect on 1 January 2015 will likely make the marketing and sale of ILAS less attractive to the
investment industry players due to a ban on indemnity commission paid to financial institutions
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and agents selling ILAS. Please refer to the section entitled “Prospects, Business Strategies and
Plans – Increased demand for transparency on fees and commissions” in this Prospectus for
additional information.
OUR COMPETITIVE STRENGTHS
We believe that our position as one of the leading players in the industry is based on the following
competitive strengths.
We are a leading and established funds and investments distribution platform in Singapore,
Malaysia and Hong Kong
From our discussions and checks with our Suppliers and B2B Customers who are FAs, we
understand that based on our market share of AUA and investment transactions, we are a leading
and established funds and investments distribution platform, providing a range of services
including distribution of Investment Products, investment administration, execution of
transactions, research and investment trainings, software tools, IT services and backroom
functions to more than 150 FAs and financial institutions in Singapore, Malaysia and Hong Kong.
In addition, according to Cerulli Associates, our Group is a leading distribution platform among
independent financial advisory firms and the online channel (DIY Investors) in Singapore. For
further details, please refer to the section entitled “Industry Overview – Investment platforms in
Asia ex-Japan: History and growth potential” in this Prospectus. The expansion in our business in
terms of AUA and the size of our customer base has given us a certain scale which benefits our
Customers.
Our business relationships with a large number of Suppliers mean that we can offer a wide range
of Investment Products to our B2B and B2C Customers. With our Suppliers, many of whom are
international fund houses, and over 1,800 Investment Products (including more than 1,600 funds)
distributed in our existing markets, our Customers can rely on us as a one-stop investment
platform which provides a wide range of Investment Products for their financial planning.
In addition, we believe the scale of our operations allows us to work out a more efficient fee
sharing structure with our Suppliers. This translates to cost-savings to our Customers.
Furthermore, it will be more convenient and efficient for B2B Customers to use our Platform
instead of entering into individual distribution agreements with each product provider. Individually,
B2B Customers may find it more difficult to obtain the same fee structure from product providers
which we have obtained.
Our B2B and B2C Businesses have received recognition for the quality of the services we provide.
We have received a number of awards over the years. In November 2008, we came in second at
the Enterprise 50 Awards 2008 an event that was jointly organised by KPMG and The Business
Times, improving from ninth position in 2007. In August 2009, at The Best Practice Financial
Services Award 2009, which was organised by Benchmark Magazine and Best Practice
Management Magazine iFAST HK won the “Fund Platform” award. In December 2010, iFAST
Financial (HK) received the “Best-in-Class” award in the “Advisers Choice of the Year” category.
In December 2011, at the Benchmark Wealth Management Awards 2011, iFAST HK received the
“Best-in-Class” award in the “Platform Provider of the Year – Professional” category. In November
2013 at the Benchmark Wealth Management Awards 2013, iFAST HK was named “Outstanding
Achiever” in the “Investment Platform – Independent” category.
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We are able to stay nimble and react to changes in the markets
We believe our organisational structure is relatively flat and this makes us more efficient in our
decision making. Being able to stay nimble means we are able to roll out at a fast rate, new
initiatives that we believe can serve our Customers better. If our B2B Customers request for
customised solutions, we believe we are able to respond with these solutions promptly. For
example, we were able to create a customised mobile application for tablets within four (4) months
of a request from one of our customers. Besides our in-house IT resources, we have a team of
business development members who are proactively working with our B2B Customers to find
solutions to their business issues. If regulations require changes in our business, we believe we
are able to effect the necessary changes quickly. We are also able to roll-out new and innovative
services to B2C Customers fairly fast. An example is the launch of our mobile application which
provides our users with various tools and allows our users to keep in touch with markets and
Investment Products within a relatively short design time of four (4) months.
We have a scalable business model
We are able to reach out to more customers and grow our AUA by leveraging on our
Internet-based model and representatives from various FAs and financial institutions in the
jurisdictions in which we operate, without employing a large in-house sales team. We have
focused on building our core in-house capabilities, including IT, operations and settlement, client
services, and research functions. Our proprietary IT and operational system is built to be scalable,
and our Platform, which is Internet-based, can be customised and upgraded by our in-house IT
staff to scale with our growing AUA, so that we can handle higher transaction volumes arising from
a larger customer base as well as a higher AUA, without significant increases in our operating
costs. As such, our net revenue tends to grow at a higher rate than our operating costs. With our
strong IT capabilities and proprietary technology, our Group is able to control our operating costs
and keep it relatively low. In FY2011, FY2012, FY2013 and 9M2014 (annualised), our net
revenue/average AUA ratio was 0.651%, 0.672%, 0.708% and 0.745%, respectively, whereas the
operating expenses/average AUA ratio was lower at 0.588%, 0.573%, 0.529% and 0.536%,
respectively.
Further, the development of our proprietary Platform has minimised our reliance on third-party
developers, reduced our operating costs and given us the flexibility to innovate and scale our
business.
Our Platform is established in Singapore, Malaysia and Hong Kong and we believe that it can be
easily customised for other markets.
We have a cost advantage
We have focused on building our core capabilities in-house and we have derived cost savings as
our in-house capabilities reduce our need to outsource various functions to external parties. The
core capabilities we focus on building in-house include our IT, operations and settlement, client
services, and research functions. It will not be cost effective for a competitor to set up a similar
platform because of the high costs and specific industry knowledge and experience required for
the IT infrastructure and system. We are also able to expand to other markets on a cost-
competitive basis as we own our Platform, and without the need for additional licensing and the
payment of service fees to third parties.
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We possess strong IT capabilities and proprietary technology
We believe our IT capabilities are important in our ability to deliver reliable, quick and innovative
services to our Customers. We have been aided by the technological improvements which have
helped to lower our costs and improve the speed at which we deliver services to our Customers.
We believe our focus on continuously improving our websites and mobile applications, the ease
of navigation and a user-friendly interface will help us remain competitive in both our B2B and B2C
Business divisions.
Additionally, having our own in-house IT capabilities means we are able to control our operating
costs and keep it relatively low. Our in-house IT capabilities also allow us to develop and roll-out
new IT initiatives quickly.
Besides providing various tools on our websites to B2B and B2C Customers, such as “Funds
Selector” and “Chart Centre” for the comparison of funds, we have also created mobile
applications for our Customers. For instance, our B2C Customers can download our mobile
application, “FSM Mobile”, free and make use of the tools to research and analyse funds, as well
as keep themselves updated on more recent funds-related and markets-related news and view
their holdings. Our B2B Customers can also read articles and analyse funds on iPad mobile
applications.
Our efforts to stay innovative in the provision of our IT services have been recognised in recent
years. In August 2009, Fundsupermart.com (HK) won the “Online Usability” award at The Best
Practice Financial Services Award 2009, which was organised by Benchmark Magazine and Best
Practice Management Magazine. In December 2010, Fundsupermart.com (HK) was named
“Outstanding Achiever” award in the “Online Capabilities Award” at the Benchmark Wealth
Management Awards 2010. In December 2011, Fundsupermart.com (HK) received the
“Best-in-Class” award in the “Best in Online Usability” category at the Benchmark Wealth
Management Awards 2011. In November 2013, Fundsupermart.com (HK) received the
“Best-in-Class” award in the “Online Usability – Independent” category at the Benchmark Wealth
Management Awards 2013. In January 2014, our Company was awarded a Silver award in the
“Most Informative Use of Mobile” category at the Mob-Ex Awards.
We offer a range of services that assists our Customers in their business
We have focused on offering a range of services with the intention of enabling our B2B Customers
who are FAs to focus on their core business. One such service that we provide is the efficient
calculation and settlement of upfront commissions and recurring wrap fees and trailer fees for B2B
Customers who are FAs. Our execution and settlement system typically processes the fees on a
quarterly basis and the fees would subsequently be paid to the B2B Customers who are FAs. A
B2B Customer who is an FA can focus on its business by leaving the execution and settlement of
transactions, and collection and processing of fees, to us.
We have also dedicated efforts to help our B2B Customers stay in touch with global trends in the
wealth management industry and the changes to financial regulations. Our “iFAST Global Wealth
Advisers Symposium” brings together wealth advisers from the markets in which we operate, as
well as the industry practitioners from the wealth management industry (for example, from markets
such as the UK and Australia, where investment platforms play an important role in the wealth
management industry), to share their experiences and views on best business practices as well
as the investment and regulatory trends in the various markets. The last three (3) symposiums
were held in Switzerland, US and Greece.
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Our B2C Customers can read articles written by our in-house research team on investment
products and financial planning. Our B2B Customers can also stay updated with research views
via regular seminars that our research team conducts. Our research members provide views in the
media, including ChannelNewsAsia and Lianhe Zaobao in Singapore; iMoney, am730, ET Net
Chinese, ATV, Cable TV, Metro Webtv and Metro Finance Column in Hong Kong; and Busy
Weekly, Yahoo!, and Borneo Post in Malaysia.
Our experienced and committed key management team
Our operations are led by our Chairman and CEO, Mr. Lim Chung Chun and our Group COO, Mr.
Wong Soon Shyan, who each has more than 20 years of working experience in the investment
industry. The experience and in-depth knowledge of our key management team have enabled our
Group to understand the industry, anticipate market trends, and address the needs of customers.
Mr. Lim Chung Chun is the co-founder of our Group as well as a Controlling Shareholder of our
Company. Mr. Wong Soon Shyan has been with our Group since 2000. Both Mr. Lim Chung Chun
and Mr. Wong Soon Shyan have steered our Group through various economic crises. They have
been actively driving the business and our Group’s expansion in various jurisdictions. The
experience and business reputations of Mr. Lim Chung Chun and Mr. Wong Soon Shyan have
assisted us to establish close working relationships with our partners in the industry, including
fund houses and financial institutions, which have been instrumental in the success and growth
of our operations.
QUALITY ASSURANCE
Our Group recognises that the fund distribution industry in the markets in which we operate is
competitive, and it is vital to provide quality services and maintain high standards in our
operations. To attract and retain our customers and to reduce disruptions to our services, we have
adopted various policies and standards for protection of data and information and appointed a
professional third party data centre operator.
To monitor quality and service levels, we also have customer service teams in the jurisdictions in
which we operate who are contactable by phone, email, or on Live Chat via our website and
mobile applications. Any feedback or complaint from the public about our services is documented
and resolved in accordance with our Company’s guidelines.
MAJOR CUSTOMERS
Our Customers include FAs who maintain an investment account with us via a nominee
arrangement, adviser-assisted investors who instruct their FAs to maintain an investment account
with us, DIY Investors who use the Fundsupermart.com Website to maintain an investment
account with us, and any other person who uses the services provided by our Group. The revenue
generated from each individual DIY Investor and adviser-assisted investor is not significant in the
context of our net revenue. However, the aggregation of transactions from FAs who transact with
us on behalf of adviser-assisted investors account for a relatively more significant portion of our
net revenue.
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The following table shows the list of FAs who have transacted with us on behalf of adviser-
assisted investors and who accounted for 5% or more of our Group’s net revenue in the Period
Under Review:
Name of FA
FY2011
%
FY2012
%
FY2013
%
9M2014
%
Financial Alliance Pte Ltd 7.4 7.8 7.7 7.5
Professional Investment Advisory
Services Pte Ltd 11.3 12.6 11.4 11.2
IPP Financial Advisers Pte Ltd 15.5 12.7 10.3 8.5
The contribution of IPP Financial Advisers Pte Ltd decreased from 15.5% in FY2011 to 8.5% in
9M2014 as a result of our Group’s increasing net revenue and the decreasing net revenue
contribution from IPP Financial Advisers Pte Ltd in dollar value over the Period Under Review.
As part of our business model, we have a commission and fee sharing arrangement with the FAs
who have transacted with us on behalf of the adviser-assisted investors. The following table
shows the list of FAs that accounted for 5% or more of our Group’s commission and fee paid or
payable to all FAs for the Period Under Review:
Name of FA
FY2011
%
FY2012
%
FY2013
%
9M2014
%
CIMB Bank Berhad 0.9 1.6 5.7 5.2
Financial Alliance Pte Ltd 10.8 11.0 10.1 9.7
Finexis Advisory Pte Ltd 5.4 6.1 5.1 4.8
IPP Financial Advisers Pte Ltd 22.4 18.1 16.4 11.0
Professional Investment Advisory
Services Pte Ltd 16.6 16.5 14.6 15.3
Unicorn Financial Solutions Pte
Limited 1.1 4.4 6.3 6.1
The amount of commission and fee paid or payable to a FA is correlated to the amount of net
revenue derived from adviser-assisted investors who have transacted with us through such FA.
As at the Latest Practicable Date, to the best of our Directors’ knowledge, we are not aware of any
information or arrangement which would lead to a cessation or termination of our relationship with
any of our major Customers. As at the Latest Practicable Date, none of our Directors or
Substantial Shareholders has any interest, direct or indirect, in any of our major Customers.
MAJOR SUPPLIERS
Our core business is the distribution of Investment Products. We obtain such Investment Products
from our Suppliers with whom we have entered into a number of distribution agreements. As at the
Latest Practicable Date, we have entered into more than 115 distribution agreements with our
Suppliers for the distribution of Investment Products.
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The following table shows our Suppliers who accounted for 5% or more of our Group’s net
recurring revenue for the Period Under Review. Our recurring revenue includes Trailer Fees,
which are calculated based on certain percentages of the average AUA of our Investment
Products supplied by fund houses:
Name of Fund House
FY2011
%
FY2012
%
FY2013
%
9M2014
%
Aberdeen Asset Management Asia
Limited 18.5 18.3 18.0 15.4
Deutsche Asset Management (Asia) 6.4 5.7 4.5 4.4
Eastspring Investments (Singapore)
Limited 6.0 6.0 5.9 5.6
First State Investments (Singapore) 15.0 13.7 12.9 12.0
Lion Global Investors Limited 6.7 6.5 5.0 4.2
Schroder Investment Management 5.5 5.3 5.7 5.2
The amount of net recurring revenue derived from the AUA of Investment Products supplied by the
fund houses is correlated to the amount of net revenue derived from DIY Investors and
adviser-assisted investors.
None of our Directors or Substantial Shareholders has any interest, direct or indirect, in any of our
major Suppliers.
ORDER BOOK
Due to the nature of our business and operations, we do not have an order book.
INVENTORY MANAGEMENT
Due to the nature of our business and operations, we do not maintain any inventory.
INTELLECTUAL PROPERTY
We own or license the intellectual property rights including our internet domain names,
trademarks, logos, software programmes and technology platform programming codes used in the
course of our business. We are dependent on the continued ownership and/or licensing of such
intellectual property rights for the operation of our business and for branding and marketing our
services to our customers.
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As at the Latest Practicable Date, our Group has registered the following trademarks
(1)
:
Trademark Country Class
Trademark
Number Validity Period
Singapore 36 T0205133B 15-04-2012 to
15-04-2022
Hong Kong 36 300585757 22-02-2006 to
21-02-2016
Australia 36 1239479 07-05-2008 to
07-05-2018
Japan 36 5204643 20-02-2009 to
20-02-2019
Taiwan 36 01342537 16-12-2008 to
15-12-2018
Fundsupermart.com
FundSupermart.com
FundSuperMart.com
fundsupermart.com
FUNDSUPERMART.COM
Malaysia 36 06001868 10-02-2006 to
10-02-2016
Note:
(1) Excludes trademarks which are not material and not in use.
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Trademark Country Class
Trademark
Number Validity Period
Singapore 36 T06/28140E 20-12-2006 to
20-12-2016
Hong Kong 36 301067094 07-03-2008 to
06-03-2018
Malaysia 36 06001867 10-02-2006 to
10-02-2016
Japan 09 5213795 13-03-2009 to
13-03-2019
Australia 36 1240161 12-05-2008 to
12-05-2018
China 36 6605845 21-03-2012 to
20-03-2022
Singapore 36 T06128140E 20-12-2006 to
20-12-2016
Hong Kong 36 301067094 07-03-2008 to
06-03-2018
Malaysia 36 06001867 10-02-2006 to
10-02-2016
Australia 36 1240162 12-05-2008 to
12-05-2018
Japan 36 5204642 20-02-2009 to
20-02-2019
Taiwan 36 01342538 16-12-2008 to
15-12-2018
Hong Kong 36 300585766 22-02-2006 to
21-02-2016
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Trademark Country Class
Trademark
Number Validity Period
Singapore 36 T0720149I 11-10-2007 to
11-10-2017
Hong Kong 36 300869428 11-05-2007 to
10-05-2017
Malaysia 36 07017238 03-09-2007 to
03-09-2017
South Korea 36 41-0169172 23-06-2008 to
23-06-2018
Mauritius 36 05685/2008 21-12-2007 to
21-12-2017
Philippines 36 4-2007-500603 21-01-2008 to
21-01-2018
Taiwan 36 01313484 01-06-2008 to
31-05-2018
Benelux 36 0831788 07-11-2007 to
02-08-2017
Japan 36 5174384 17-10-2008 to
17-10-2018
Singapore 36 T0910821F 28-09-2009 to
28-09-2019
Hong Kong 36 301452825 19-10-2009 to
18-10-2019
Singapore 09 T0707634A 10-04-2007 to
10-04-2017
Hong Kong 09 301067120 07-03-2008 to
06-03-2018
Malaysia 09 08004469 07-03-2008 to
07-03-2018
Japan 09 5213795 13-03-2009 to
13-03-2019
South Korea 09 40-789498 20-05-2009 to
20-05-2019
Taiwan 09 01343765 01-01-2009 to
31-12-2018
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Trademark Country Class
Trademark
Number Validity Period
Singapore 09 T0707636H 10-04-2007 to
10-04-2017
Hong Kong 09 301067139 07-03-2008 to
06-03-2018
Malaysia 09 08004470 07-03-2008 to
07-03-2018
Singapore 09 T0710454Z 15-05-2007 to
15-05-2017
Hong Kong 09 301067111 07-03-2008 to
06-03-2018
Malaysia 09 08004471 07-03-2008 to
07-03-2018
China 09 6605844 19-03-2008 to
06-03-2020
Japan 09 5192911 26-12-2008 to
26-12-2018
South Korea 09 40-789501 20-05-2009 to
20-05-2019
Taiwan 09 01343766 01-01-2009 to
31-12-2018
Singapore 09 T0710457D 15-05-2007 to
15-05-2017
Hong Kong 09 301067102 07-03-2008 to
06-03-2018
Malaysia 09 08004567 10-03-2008 to
10-03-2018
China 09 6605848 19-03-2008 to
20-06-2020
Australia 09 1240160 12-05-2008 to
12-05-2018
Singapore 36 T1205158J 11-04-2012 to
11-04-2022
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Trademark Country Class
Trademark
Number Validity Period
Hong Kong 36 301776295 30-11-2010 to
29-11-2020
As at the Latest Practicable Date, our Group owns the following domain names:
Domain Name Registration Date Renewal Due Date
ifastcorporation.com.sg 09-04-2003 09-04-2016
ifastfinancial.com.sg 10-04-2003 10-04-2016
fundsupermart.sg 03-01-2005 03-01-2015
ifastfinancial.sg 03-01-2005 03-01-2015
fundsupermart.in 03-08-2007 03-08-2017
fundsupermart.hk 03-08-2007 03-08-2016
fundsupermart.co.in 03-08-2007 03-08-2017
ifastfinancial.in 03-08-2007 03-08-2017
ifastfinancial.hk 03-08-2007 03-08-2016
ifastfinancial.co.in 03-08-2007 03-08-2017
ifastfinancial.com.tw 03-08-2007 03-08-2016
ifastfinancial.co.kr 03-08-2007 03-08-2016
ifastcapital.com 03-08-2007 03-08-2016
facompliance.com 23-01-2008 23-01-2015
facompliance.com.sg 23-01-2008 23-01-2015
facompliance.sg 23-01-2008 23-01-2015
ifastpensions.hk 13-03-2008 13-03-2017
ifastpensions.cn 13-03-2008 13-03-2017
vervetec.com.sg 26-03-2008 26-03-2016
vervetec.com.cn 26-03-2008 26-03-2016
vervetec.com.my 01-04-2008 01-04-2016
vervetec.com.hk 04-04-2008 17-04-2016
ifastnetwork.my 01-07-2008 01-07-2016
ifastcorporation.my 01-07-2008 01-07-2016
vervetec.my 30-06-2008 30-06-2016
ifastpensions.my 01-07-2008 01-07-2016
ifastnetwork.com.my 30-06-2008 30-06-2016
ifastnetwork.hk 25-06-2008 25-06-2016
ifastcorporation.com.my 30-06-2008 30-06-2016
ifastcorporation.hk 25-06-2008 25-06-2016
ifastcorporation.cn 25-06-2008 25-06-2016
ifastpensions.com.my 30-06-2008 30-06-2016
bondsupermart.com 29-09-2004 29-09-2016
facompliance.my 31-07-2008 31-07-2016
facompliance.com.my 31-07-2008 31-07-2016
ifastcorp.com 03-01-2007 03-01-2015
fundsupermart.com.hk 04-10-2005 25-10-2016
ifastfinancial.com.hk 07-12-2005 08-12-2016
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Domain Name Registration Date Renewal Due Date
ifastfinancial.com 08-04-2003 08-04-2019
ifastcorporation.com 08-04-2003 08-04-2019
fundsupermart.com.tw 19-03-2007 19-03-2016
fundsupermart.my 06-03-2009 08-03-2016
ifastcapital.my 06-03-2009 08-03-2016
ifastgp.com 26-05-2009 26-05-2015
ifastgp.com.hk 22-06-2009 22-06-2016
ifastgp.com.sg 06-08-2009 06-08-2016
ifastgp.sg 06-08-2009 06-08-2016
fundsupermart.com.sg 08-02-2000 08-02-2015
vervetec.com 12-03-2007 12-03-2016
ifastcapital.com.my 06-08-2007 06-08-2016
fundsupermart.com.my 26-09-2006 26-09-2016
myfsm.in 19-03-2012 19-03-2016
fsm.com.hk 22-03-2012 22-03-2015
fsm.hk 22-03-2012 22-03-2015
ifastpensions.com 27-04-2006 27-04-2017
connectifast.com 30-05-2012 30-05-2016
ifast.com.hk 07-12-2005 08-12-2015
ifastps.com.cn 04-04-2014 04-04-2016
Our Group has not encountered any issues with the renewal of our domain names in the past.
Barring any unforeseen circumstances, we do not foresee any issues with the future renewal of
domain names which are material to our Group’s business and operations.
Save as disclosed above, we do not use or own any other registered patents, trademarks or
intellectual property which are material to our business. Our business and profitability are also not
materially dependent on any other patent or licence or any other intellectual property rights. As at
the Latest Practicable Date, we do not have any pending applications for registration of intellectual
property rights.
RESEARCH AND DEVELOPMENT
Our business and operations are largely Internet-based and it is important for us to stay abreast
of technological changes in order to remain competitive. We focus our research and development
on the areas of software and technology. We have been developing our IT platform services and
infrastructure since our incorporation and we have a significant number of employees who are
hired to focus on developing new and business-friendly applications for our Platform. We have
obtained a number of awards and recognitions for our IT capabilities. Additionally, our Platform
capabilities including tools such as the “Funds Selector” and “Chart Center”, are used by our DIY
investors, looking to carry out their own funds comparisons and analyses.
In April 2011, in line with the shift of Internet-based users to mobile interfaces, we developed our
first mobile application for the iPhone, “FSM Mobile” in Singapore. “FSM Mobile” is a free mobile
application that our Customers can download to access popular tools found on our
Fundsupermart.com Website, as well as enjoy features of Fundsupermart.com specifically
designed for mobile users. “FSM Mobile” has since been rolled out on other electronic devices
such as iPads and Androids and in other markets such as Hong Kong and Malaysia. In January
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2014, we were awarded a Silver award at the Mob-Ex Awards 2014, in the “Most Informative Use
of Mobile” category. Please refer to the section entitled “Our Business – History and
Development ” above for further details of our awards.
We have also developed an iPad application for the FAs using our B2B Platform in Singapore,
Hong Kong and Malaysia.
Notwithstanding the above, our research and development expenditure is not material as
compared to our net revenue for the Period Under Review.
MARKETING
Our branding and marketing strategies are spearheaded by our Chairman and CEO, Mr. Lim
Chung Chun. He is supported by our business division heads that are responsible for developing
strategies based on geographical markets and business divisions to increase our Group’s brand
awareness and recognition amongst DIY Investors, financial institutions and FAs. We seek
potential new partnerships to explore the possibilities of distributing various funds offered by
financial institutions, and we also promote our services through media relationships and social
media platforms.
In respect of our B2B Business, our marketing and business development activities are carried out
by our business development team and executives. We organise regular seminars, workshops
and presentations by fund houses to equip and update FAs with Investment Products information
and investment knowledge. We also organise seminars to teach them to use the functions
available on the iFAST Financial Website. We also publish “iGP INSIGHTS”, a magazine catered
for FAs and their clients.
In respect of our B2C Business, our marketing activities are carried out primarily through our
Fundsupermart.com Website. We also organise public seminars which include the provision of
economic outlooks and market updates and presentations from various fund houses. We also
conduct workshops periodically to help our customers gain familiarity with the functions and tools
available on our Fundsupermart.com Website and acquire basic knowledge about investing in
Investment Products.
We have also dedicated efforts to help our B2B Customers stay in touch with global trends in the
wealth management industry and the changes to financial regulations. Our “iFAST Global Wealth
Advisers Symposium” brings together wealth advisers from the markets in which we operate, as
well as the industry practitioners from the wealth management industry (for example, from markets
such as the UK and Australia, where investment platforms play an important role in the wealth
management industry), to share their experiences and views on best business practices as well
as the investment and regulatory trends in the various markets. The last three (3) symposiums
were held in Switzerland, US and Greece.
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PROPERTIES AND FIXED ASSETS
As at the Latest Practicable Date, we do not own any properties. As at the Latest Practicable Date,
our Group leases the following properties:
Properties
Lessee Lessor Location Tenure
Approximate
Built-in area
(sq ft)
Annual rental
Use of
property
iFAST
Financial
Pte Ltd
Ocean
Properties
Private
Limited
10 Collyer Quay,
#26-01 to 05
Ocean Financial
Centre, Singapore
049315
14 April 2011 to
13 April 2017
18,299 S$1,712,786.40 Office
iFAST
Financial
Pte Ltd
(1)
Chan Lai
Wang
10 Bukit Batok
Crescent,
The Spire,
#09-03,
Singapore 658079
23 December 2011
to 22 December
2014
(1)
700 S$21,600.00 Office for
Business
Continuity
Plan
iFAST
Financial
Pte Ltd
(1)
VAP
Universe
Private
Limited
73 Ubi Road 1,
#07-60
Oxley Bizhub,
Singapore 408733
23 December 2014
to 22 December 2017
976 S$25,200.00 Office for
Business
Continuity
Plan
iFAST
Capital
Sdn Bhd
ING
Insurance
BHD
Level 28 and 29,
Menara Standard
Chartered,
30 Jalan Sultan
Ismail, 50250
Kuala Lumpur
15 June 2011 to
14 June 2016
16,714 RM1,083,067.20 Office
iFAST
Capital
Sdn Bhd
Ooi Khye
Siang
No. 24-1
Persiaran Bayan
Indah, Bayan Bay,
11900 Bayan
Lepas, Penang
1 September 2014
to 31 August 2016
1,345 RM38,400.00 Office
iFAST
Financial
(HK)
Limited
The
Hongkong
Land
Property
Company,
Limited
Suites 4601 and
4606-4608, 46/F
Two Exchange
Square, 8
Connaught Place,
Central, Hong
Kong
1 October 2012 to
31 December 2017
8,800 HKD8,472,960.00
for 1 October
2012 to
31 December
2014
HKD12,179,880.00
for 1 January
2015 to
31 December
2017
Office
iFAST
Platform
Services
(Shenzhen)
Qianhai
Limited
Ke Xue
Xia
Room 1307,
East Wing,
Hai’an Building,
Hai De Three
Avenue,
Central Business
& Culture Zone,
Nanshan District,
Shenzhen
1 June 2014 to
31 May 2016
1,692 RMB341,631.84
(to be
increased to
RMB358,713.43
from 1 June
2015)
Office
Note:
(1) iFAST Financial does not intend to renew the lease, and will be leasing the premises at 73 Ubi Road 1, #07-60 Oxley
Bizhub, Singapore 408733, for its business continuity plan.
OUR BUSINESS
164
Fixed Assets
As at 31 December 2013 and 30 September 2014, our fixed assets comprise computer equipment,
office equipment, furniture and fittings and office renovation:
Description
Net Book Value as at
31 December 2013
S$’000
Net Book Value as at
30 September 2014
S$’000
Computer Equipment 748 1,062
Office Equipment 32 30
Furniture and Fittings 39 30
Office Renovation 815 605
Total 1,634 1,727
There are no major encumbrances on the use of all our major equipment and all our major
equipment are fully insured.
There are no regulatory or environmental requirements that may materially affect the utilisation of
our fixed assets.
INSURANCE
As at the Latest Practicable Date, our Group has taken the following insurance coverage:
(a) group term life insurance;
(b) hospitalisation and surgery insurance;
(c) cyber risk insurance;
(d) directors and officers liability insurance;
(e) financial advisers professional indemnity;
(f) financial institutions professional indemnity; and
(g) all risks insurance.
Our Directors are of the opinion that the above insurance policies are adequate for our existing
business and operations and we will review and procure the necessary additional insurance
coverage as and when the need arises. However, significant disruption to our operations or
damage to our properties or assets, whether as a result of fire and/or other causes, may still have
a material adverse impact on our results of operations or financial condition. There is no
assurance that any claims made or decided against us will be covered by insurance, or if covered,
will not exceed the limits of our coverage. For further details, please refer to the section entitled
“Risk Factors” of this Prospectus.
OUR BUSINESS
165
REGULATORY COMPLIANCE
Compliance Team
As part of our efforts to ensure that our Group complies with both regulatory and licensing matters,
we have compliance teams in Singapore, Hong Kong and Malaysia. The Singapore compliance
team comprises an assistant director, the head of the department, who oversees the work of four
(4) staff organised into two (2) teams to support the B2B and B2C Businesses. The head of
department in turn reports directly to our Group COO, Mr. Wong Soon Shyan. In Hong Kong, our
compliance department has three (3) employees, and in Malaysia, our compliance department has
two (2) employees.
The work of the compliance team can be broadly categorised as:
(a) advising business units on regulatory requirements and procedures to ensure compliance;
(b) monitoring of business activities and reporting, including checks and reports on anti-money
laundering and countering financial terrorism matters;
(c) working with business units on rectifications or areas of improvements; and
(d) licensing and appointment of representatives as well as regulatory reporting.
Compliance Training
When a new staff joins our Company’s compliance department, the head of the department will
conduct an introductory briefing for such staff. This briefing will cover various aspects including
but not limited to our Company’s licensing status, business overview, applicable rules,
regulations, licence conditions and past regulatory/compliance issues.
All compliance staff are also required to take and pass the Capital Markets and Financial Advisory
Services Module 5 (Regulations). In addition, our Company also sends our compliance staff for a
Diploma in Compliance, which is a course conducted by the International Compliance Association
(“ICA”). This is a diploma course comprising of five (5) modules conducted over a 10-month
period. The five (5) modules are as follows:
(a) compliance function;
(b) compliance culture;
(c) regulatory environment;
(d) industry and product knowledge; and
(e) compliance and the business unit.
OUR BUSINESS
166
After the completion of the Diploma in Compliance, our Company continues to encourage our
compliance staff to participate in continuing education including attending courses, workshops
and/or obtaining relevant certifications. The continuing education programmes which our staff
attends include:
(a) Diploma in Anti-Money Laundering offered by ICA;
(b) Certified Compliance Risk Officer course conducted by the Asia Risk Management Institute;
(c) Certified Financial Services Auditor course conducted by the Institute of Internal Auditors;
(d) part time law degree offered by the University of London;
(e) seminar on advisory and suitability obligations conducted by the Singapore Management
University School of Law; and
(f) external workshops on topics such as Personal Data Protection, Foreign Account Tax
Compliance Act and legal/regulatory issues relating to cloud computing.
In relation to other new joiners of our Company who are in non-compliance roles, these employees
are required to go through compulsory training (which includes a quiz) on Anti-Money Laundering
and Countering the Financing of Terrorism and Fair Dealing. Annual refresher trainings sessions
are also carried out for all staff. For the quiz at both the initial and annual refresher trainings, all
staff are required to achieve a score of at least 80% to be considered as having passed the quiz
and met the training requirements.
In addition, employees providing financial advisory services are provided annual training on our
Company’s advisory policies and procedures, which covers regulatory areas such as:
(a) making recommendations with a reasonable basis (fact-find) and taking into account the
results of the customer knowledge assessment;
(b) various product information and remuneration disclosures;
(c) marketing requirements; and
(d) fair dealing.
Annual training sessions are conducted for our employees involved in operations and settlement
to keep them aware and up to date on regulatory requirements relating to their functions. Topics
covered in these training sessions include:
(a) administration of customer trust accounts;
(b) segregation of customers’ securities and money;
(c) depositing and withdrawal of customers’ securities and money; and
(d) sending contract notes and statements.
OUR BUSINESS
167
If our Company’s staff or employees need to seek advice or clarifications on legal and regulatory
issues, they are encouraged to consult our Company’s in-house legal counsel, and if necessary,
they are also encouraged to seek the advice of external law firms that our Company works closely
with.
Risk Management
To improve the robustness of our risk management, we have also set up:
(a) an internal audit team to review risk exposures based on risk matrices and compliance with
performance audits. The internal audit team has a staff strength of three (3) members and
carries out quarterly reviews. The internal audit team reports to our Audit Committee every
quarter, with an administrative reporting line to our CEO;
(b) an IT risk team to manage various technology risks by identifying, assessing, recommending
and putting in place appropriate technology security policies, systems and monitoring
processes. The IT risk team has a staff strength of two (2) members and has the committed
resources to expand the team as necessary to adequately cope with the growth of our
business; and
(c) a management risk committee to assess the risk of new and existing products and services,
including risks related to operations, regulatory, compliance, services and processes. The
management risk committee is guided by the Board’s risk committee.
Save as disclosed above and in the sections entitled “Risk Factors” and “Government Regulations
and Licensing” in this Prospectus, as at the Latest Practicable Date, our business is not subject
to any special legislation or regulatory controls which have a material effect on our business, other
than those generally applicable to companies and businesses.
Save as disclosed above and in the sections entitled “Risk Factors” and “Government Regulations
and Licensing” in this Prospectus, we have obtained all requisite approvals, and are in compliance
with the laws and regulations that would materially affect our business operations.
OUR BUSINESS
168
The following section on “Investment Platforms” includes extracts from information and data
prepared by The Platforum, Investment Trends Pty Limited and Cerulli Associates Asia Pte Ltd as
Independent Market Research Consultants, for use in this Prospectus. You should note that no
independent verification has been carried out on any facts or statistics that are directly or
indirectly derived from such prepared information and data, official government and non-official
sources.
The information and data in this section that has been provided by the Independent Market
Research Consultants may reflect estimates from publicly available secondary sources and trade
survey analysis of the opinions and perspectives of leading industry players, and such information
and data were prepared primarily as a market research reference. Research by each Independent
Market Research Consultant should not be considered as the opinion of such Independent Market
Research Consultant as to the value of any security or the advisability of investing, or not
investing, in us.
While we believe that the information and data are reliable, we cannot ensure the accuracy of the
information or data, and neither our Group, any of the Joint Issue Managers, Bookrunners and
Underwriters nor any of our respective affiliates or advisers have independently verified this
information or data. You should not place undue reliance on any of such information contained in
this section of this Prospectus. There may have been changes in our industry and the various
other sectors which could affect the accuracy or completeness of the information in this section.
INVESTMENT PLATFORMS
In Asia, investment platforms have a relatively short history. The evolution of investment platforms
in the developed financial markets of the UK and Australia offers valuable insights on the future
development and potential of investment platforms in Asia. In the UK and Australia, investment
platforms have been playing an important role in the wealth management business for a number
of years.
1. Evolution of UK investment platforms (source: Platforum)
In the UK, investment platforms have been around since 2000 (a number of online
stockbrokers existed prior to this). There are currently around 23 investment platforms in the
industry operating via financial advisers and 15 working directly with end customers. The
assets under administration and fund sales going to investment platforms have seen
significant growth since 2000, indicating the considerable importance they play in the wealth
management industry. In the UK, the majority of retail assets are invested via financial
advisers. The significant growth in UK investment platform assets has been primarily due to
advisers moving customers’ assets on-platform.
INDUSTRY OVERVIEW
169
1.1 Assets under administration and fund sales via UK adviser platforms
From 2001 to 2013, assets under administration on adviser platforms has grown from £10.4
billion to £265.3 billion – an annualised growth rate of 30.1%. At the end of 2001, assets
under administration on adviser platforms was 4.4% of the size of IMA (Investment
Management Association) members’ funds under management. By the end of 2013, this has
risen to 35.0%, demonstrating the substantial increase in the proportion of assets that are
held on adviser platforms.
1
Figure 1. Historical assets under administration of UK adviser platforms
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Source: Platforum
Gross sales via adviser platforms have grown from £8.03 billion per quarter to £17.08 billion
per quarter from 4Q2011 to 4Q2013, a 45.9% annualised increase. At the end of 2011,
financial advisers were placing 67% of their new investment business on-platform. This had
risen to 80% by the end of 2013.
1
The figures from the Investment Management Association (IMA) – the trade body for UK investment management firms
– do not represent the total assets that are available on platforms. The figures are used as a basis of comparison to
demonstrate platforms’ increasing overall share of UK retail investment assets. Total UK investable assets, including
workplace pensions and direct holdings of securities, are higher.
Source: Investment Management Association on its website:http://www.investmentfunds.org.uk/fund-statistics/full-
figures/. Investment Management Association has not provided its consent, for the purposes of Section 249 of the
Securities and Futures Act, to the inclusion of the information extracted from its website, and is therefore not liable for such
information under Sections 253 and 254 of the Securities and Futures Act. While we and the Joint Issue Managers,
Bookrunners and Underwriters have taken reasonable actions to ensure that the relevant information from Investment
Management Association’s website has been reproduced in its proper form and context, and that the relevant information
has been extracted accurately and fairly from such website, neither we nor the Joint Issue Managers, Bookrunners and
Underwriters nor any other party has conducted an independent review of the information contained in that website or
verified the accuracy of the contents of the relevant information.
INDUSTRY OVERVIEW
170
Figure 2. Quarterly adviser platform gross sales
£0
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£4
£6
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£10
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Source: Platforum
Figure 3. Proportion of advised investments being placed on-platform
67%
69%
71%
67%
69%
67%
76% 76% 76%
5%
5%
4%
5%
4%
6%
6% 7%
6%
28%
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28% 27% 27%
18% 17% 18%
0%
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2012
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2013
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2013
Q4
2013
Off -platform (other)
Directly with fund
manager
On-platform
Source: Platforum
Note: “Off-platform” and “On-platform” refers to (i) investments being placed through distribution channels other
than an investment platform and (ii) investments being placed through an investment platform, respectively.
1.2 Factors contributing to investment platforms’ growth in the UK
The UK investment platforms have grown at a rapid pace over the past 14 years due primarily
to the following factors:
(a) Investment platforms offered access to funds at a lower cost than going directly to fund
houses. For advisers and end consumers, the investment platform was initially paid out
of rebates from fund managers. Tax-efficient accounts and administration services were
often included, so the investment platform appeared cost-neutral. Although payments
from fund managers to investment platforms are now prohibited (because of regulatory
changes), investing via investment platforms remains cheaper that investing directly via
fund managers.
INDUSTRY OVERVIEW
171
(b) Advisers used investment platforms to operate more efficient business models,
managing investments online rather than via phone and paper-based services.
Investment platforms are also able to administer advisers’ fees.
(c) Investment platforms were able to provide consumers and advisers access to a wider
range of products.
(d) Regulation has required financial advisers to treat customers in a consistent manner.
Investment platforms have given advisers a consolidated view of their clients’
investments, facilitating a broad view of their clients and enabling a consistent business
approach.
(e) Recently, there has been a rise in the use of model portfolios and outsourced portfolio
management by advisers. Investment platforms have enabled advisers to use these to
efficiently manage the needs of multiple clients.
1.3 Projections
The UK market is expected to continue growing in the next five (5) years and investment
platforms’ contribution via funds sales and assets under administration is expected to see
annual adviser platform growth rates of 22.5% until the end of 2016, before slowing to around
10% per year in 2017 and 2018. Assets on adviser platforms are expected to increase from
£265 billion at the end of 2013 to £585 billion at the end of 2018.
Figure 4. Projected increase in assets under administration via investment platforms from
2013 to 2018
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Source: Platforum
INDUSTRY OVERVIEW
172
2. Evolution of Australian investment platforms (Source: Investment Trends)
Figure 6. Size of the Australian platform industry by funds under management (FUM)
$275
billion
$260
billion
$332
billion
2011 2012
Superannuation & pension accounts Investment accounts
2013
28% 29%
70% 71% 72%
30%
Source: Investment Trends
Figure 7. Average proportion of new client inflows invested via platforms
78% 78%
82%
78%
79%
75%
72% 72%
76%
74%
70%
75%
74%
64%
66%
68%
70%
72%
74%
76%
78%
80%
82%
84%
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Note: Projection in 2015 is from the 2012 survey, projection for 2016 is from the 2013 survey and projection for 2017
is from the 2014 survey.
Source: Investment Trends, Australian Planner Technology Report, May 2014
INDUSTRY OVERVIEW
173
2.1 Factors contributing to investment platforms’ growth in Australia
Investment platforms are indispensible to Australian financial planners and are expected to
continue growing due to factors such as:
(a) Australia’s growing pool of superannuation and pension assets.
(b) Helping planners run their business more efficiently and see more clients in a time of
increased administrative and compliance burden from regulatory changes.
(c) Aiding in client retention by helping planners demonstrate value.
(d) Supporting planners’ evolving appetite for a wider range of products.
The key driver of past and future investment platform business growth in Australia is the
growing pool of superannuation and pension assets, which currently make up 72% of
investment platform assets. There is a total of AUD$1.8 trillion of superannuation assets in
Australia, and this number is set to keep increasing with 9.5% (eventually increasing to 12%)
of every Australian worker’s wage flowing into their superannuation accounts. Consumers
are more likely to see planners as they get older and their balances grow larger, which is
beneficial for investment platforms as planners currently use them to administer most of their
clients’ superannuation assets.
Nearly all Australian financial planners use investment platforms because they help them
conduct their business more efficiently – a necessity following the Future of Financial Advice
reforms and the increased compliance and administrative burden it created. By simplifying
administration, saving them time in managing clients and transacting on a broad range of
assets across multiple clients simultaneously, planners can service a larger number of
clients.
The reporting tools offered by investment platforms help planners better understand a client’s
entire position through consolidated reporting on their investments, and assist in
demonstrating value to clients during periodic review meetings. From a business
perspective, planners are also able to generate business level reports, such as cash
positions of all their clients, and set up automated alerts (messaging from the investment
platform) to help better identify business opportunities and risks.
Investment platforms provide financial planners access to a wide range of investments.
Australian investment platforms not only offer cost effective exposure to mutual funds
(including at wholesale rates), they have evolved their functionality to support financial
planners’ increased use of listed investments such as direct shares and exchange-traded
funds (“ETFs”). Australian investment platforms now receive a greater proportion of
planners’ direct share transactions than online brokers and full service brokers combined.
Investment platforms also help facilitate the administration of clients’ insurance policies and
the payment of premiums through their investment and superannuation accounts. Planners
who derive over a quarter of their revenue from insurance recommendations, currently write
half of their insurance business via investment platforms.
INDUSTRY OVERVIEW
174
2.2 Projections
Assets on adviser platforms are expected to remain high in the Australian market, with new
client inflows invested via platforms at or above 70% from 2014 to 2017.
3. Investment platforms in Asia ex-Japan: History and growth potential
3.1 Background
There are fewer investment platforms in Asia ex-Japan and they have a shorter history
compared to their counterparts in the UK and Australia. In the investment platforms space,
we understand from our discussions and checks with our Suppliers and B2B Customers who
are FAs, that based on our market share of AUA and investment transactions, our Group is
a leading funds and investments distribution platform in Singapore, Hong Kong and
Malaysia. According to Cerulli Associates, our Group is a leading distribution platform among
independent financial advisory firms and the online channel (DIY Investors) in Singapore. We
have initiated plans to enter the Chinese market as well. In Hong Kong and Malaysia, we
believe that there are no dominant players with an independent investment platform similar
to ours which serves both the B2B and B2C market segments, putting us in a position to
benefit from various trends emerging in Asia ex-Japan, including rising wealth, demand for
more wealth management options, entrance of more foreign financial institutions and
regulatory changes.
Similar to the trends seen in UK and Australia, Asia ex-Japan has seen the rapid expansion
of new players (both local and foreign) in the wealth management industry. This has been
noticeable in Singapore and Hong Kong, which are seen as Asia’s wealth management
centres. Both have attracted global wealth management firms to set up office locally, to have
a share of the growing wealth management business due to the growing economies of China,
India and other parts of Asia.
An efficient investment platform that can provide a quick and effective solution to existing and
new financial institutions to rapidly start their business in Asia ex-Japan would stand out in
the wealth management industry. In the case of our Company, we helped a financial
institution to start business quickly and effectively, with our IT infrastructure and award-
winning websites and mobile applications that effectively meet the operational and
transactional requirements of financial institutions and their end clients. Our B2B Platform
offers a suite of Investment Products with multiple product providers, making it easier for B2B
firms to focus on their core business of acquiring and maintaining their client relationships.
The trend in Asia ex-Japan is also moving towards greater usage of the Internet and DIY
Investors are increasingly seeking to invest via online investment platforms. Our B2C
Business has benefited from this trend in Singapore, Hong Kong and Malaysia. This trend
has been bolstered by the demand from investors for a reliable online investment platform
that is cost-competitive versus traditional channels such as banks and insurance agencies,
as well as having a transactional website that offers strong research capabilities to meet their
investment requirements.
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175
3.2 Assets under administration and fund sales via investment platforms in Asia ex-Japan
(Source: Cerulli)
According to Cerulli, from 2011 to 2013, the market share of assets under administration from
investment platforms and financial advisers had grown from 7.5% to 11.4%. The increase in
assets under administration market share from investment platforms and financial advisers
was the highest among the various distribution channels in Asia ex-Japan during the
2011-2013 period.
Figure 8: Asia ex-Japan mutual fund assets under administration by distribution channel,
2011-2013
10.9% 11.5% 12.4%
63.3% 62.6% 59.9%
13.7% 13.3%
11.6%
7.5% 8.0%
11.4%
4.5% 4.7% 4.8%
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
70.0%
80.0%
90.0%
100.0%
2011 2012 2013
Insurance
Independent financial advisors/platforms
Securities companies
Banks
Direct
Source: Cerulli
3.3 Future growth of investment platforms in Asia ex-Japan
The growth of investment platforms in the UK and Australia offers interesting insights, as the
investment platforms have grown to be an integral and dominant part of the funds
management business. In Australia, according to Investment Trends Pty Limited, new client
money inflows via investment platforms have stood at between 72% and 82% in the period
2005-2013. According to the statistics from Platforum, financial advisers in the UK were
placing 80% of their new business via investment platforms by end of 2013. The market
share of assets under administration via investment platforms in the UK had grown from
4.4% at the end of 2001 to 35.0% by the end of 2013, which shows the value of using
investment platforms for financial advisers.
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176
According to statistics from Cerulli, with assets under administration market share from
investment platforms in Asia ex-Japan at the single-digit level over a three-year average from
2011 to 2013, the assets under administration market share from investment platforms has
the potential to grow further in the coming years. While we do not expect assets under
administration market share from investment platforms and financial advisers to increase in
the near term to the levels in the UK (where new business from financial advisers via
investment platforms stood at 80% in 2013, according to Platforum) and Australia (where
new client money inflows via investment platforms stood at between 72 to 82% between 2005
to 2013, according to Investment Trends Pty Limited), we believe there to be potential for
growth in the medium to long term.
Based on the growth we have seen in the markets we have been operating in for a number
of years (Singapore, Hong Kong and Malaysia) and the potential of the PRC market as well
as the various future trends expected in the financial and regulatory environment in Asia
ex-Japan, we believe the market share from investment platforms in Asia ex-Japan will
continue to grow in the coming years.
3.4 Factors that contribute to the future growth of investment platforms in Asia ex-Japan
(a) Rapid economic growth in Asia ex-Japan and greater adoption of investment platforms:
Rapid economic growth has led to rising wealth among a rapidly growing middle class.
This will lead to more individuals seeking wealth management advice and solutions
from banks, financial advisers and financial institutions (a market segment that uses
investment platforms). We expect greater adoption by banks and financial institutions of
investment platforms as they tap onto these new opportunities as an investment
platform can offer them convenience in operations and products distribution and a ready
one-stop solution for funds and investments distribution to their clients.
(b) Greater trend for investors to move to online channels:
With Internet penetration at high levels in markets such as Singapore and Hong Kong
and with rapid growth in the Internet penetration rate in other Asian markets ex-Japan
such as Malaysia and China, more investors could be doing their investments online.
With greater comfort in using the Internet for e-commerce transactions, online investing
can be expected to take off among more investors in these Asian markets ex-Japan, a
trend that investment platforms can tap onto.
(c) Rapid emergence of banks, financial advisers and financial institutions in Asia’s wealth
management centres:
With Singapore and Hong Kong positioning themselves as leading wealth management
centres in Asia, financial players, both global and local, are positioning themselves to
have a business presence in these markets. As these new players set up their
operations in Asia ex-Japan, they will need an efficient investment platform that can
help with the distribution of investment products as well as a reliable
operational/transactional system, which established investment platforms can offer at
competitive rates. Working with an established investment platform with existing
distribution network with global fund houses and other product providers, the
operational costs for the financial institutions will be lower than having their own
individual business agreements with each fund house.
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177
(d) Regulatory changes and trans-border funds recognition schemes in Asia ex-Japan:
Regulatory changes (including Financial Advisory Industry Review or FAIR in
Singapore, and disclosure of commissions in Hong Kong on insurance products) and
trans-border funds recognition schemes (including ASEAN Funds Passport, Cross
Border Funds Recognition Scheme between Hong Kong and China, and Asia Region
Funds Passport) will open up the funds distribution markets further, and we believe that
established investment platforms are well-positioned to offer financial institutions,
banks and financial advisers a ready investment platform to enable them to quickly tap
onto these new business opportunities.
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178
PROSPECTS AND TREND INFORMATION
Our Directors believe that the key drivers for the prospects of our Group will be the increasing
proportion of funds flowing through investment platforms in Asia. Specifically, the B2C division
would benefit from an increasing number of DIY Investors while in the B2B division, from the
increasing adoption of investment platforms by banks, FAs and financial institutions.
As more financial institutions see potential in and enter the wealth management industry, such
financial institutions may look to pre-existing services like ours for front-end and back-end support
and capabilities. We believe that financial institutions that utilise our services can quickly become
equipped to execute Investment Product transactions.
Continued growth of our AUA
We expect our AUA to continue to grow for our Group in both our B2B and B2C divisions.
Singapore’s wealth management industry has built a reputation in the world for having a strong
regulatory framework and for offering investors multiple options for wealth management solutions.
As one of the key wealth management centres in Asia, Singapore is expected to see an influx of
global investors who look to Singapore as a reliable jurisdiction for investments. This is expected
to contribute to our AUA growth.
For our Hong Kong and Malaysia operations, we expect AUA growth to continue to be stronger
than our core market in Singapore because our businesses in Hong Kong and Malaysia are still
at an earlier stage of growth compared to Singapore. In Hong Kong, we believe our B2B Platform
is recognised in the wealth management industry and our presence in Hong Kong has
strengthened due to our acquisition of ING Platform Services. Our Hong Kong business has
enjoyed growth from the influx of investor funds from overseas, especially via the Capital
Investment Entrant Scheme (“CIES”). CIES is an investment scheme in Hong Kong allowing
permanent residency status for foreigners, including Chinese nationals with permanent resident
status in a foreign country. A number of our Investment Products that are distributed in Hong Kong
are CIES-qualified. Our B2C Business is also expected to see growth as a result of an increasing
number of DIY Investors.
Malaysia remains our smallest market in terms of AUA, but had offered a higher AUA growth
among the jurisdictions in which we operate as it commenced from a lower AUA base. Growth is
expected to come from increasing numbers of B2B and B2C Customers.
An increase in our AUA will result in an increase in our recurring revenue. However, an increase
in our AUA will not require a corresponding increase in our operating costs, hence giving rise to
economies of scale in our business.
Increased public awareness of investments and financial planning
Certain of our Investment Products are commonly used for long term investments and financial
planning. We have observed an increased public awareness in respect of long term investments
and financial planning. For example, through MoneySENSE, a national financial education
programme for Singapore, the Singapore government has made efforts to enhance the basic
financial literacy of consumers. We believe that this would lead to an increased number of DIY
Investors and adviser-assisted investors turning to FAs for financial planning advice.
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179
Increased demand for transparency on fees and commissions
We believe that the demand for greater transparency on fees and commissions has been led by
regulatory authorities in markets such as the UK (with the Retail Distribution Review (“RDR”)
changes), Netherlands, and Australia. In Asia, we also see an increasing demand for greater
transparency on fees and commissions, albeit at a slower and more gradual pace. In Hong Kong,
for instance, a regulatory requirement to disclose insurance brokerage commissions in dollar
terms has been in place since 2013. We believe that the regulatory trend towards greater
transparency on fees and commissions is a positive development for clients because they will be
able to see for themselves the amount of fees they pay, compare products and distributors on the
competitiveness of such fees, and make a decision on which option to choose.
We believe that an investment platform business like ours will benefit from a trend towards greater
transparency of fees and commissions because it provides awareness to both our customers and
non-customers of how much they are being charged or potentially will be charged for a certain set
of services. To illustrate, our indirect competitors who are the distributors of portfolio bonds or “101
products”, as they are named in Hong Kong, charge their customers a complicated fee structure
coupled with high commissions. We expect that a trend towards greater fee transparency will
highlight to customers of portfolio bonds or “101 products” the high fees they are subject to and
provide awareness of the availability of alternatives such as funds and bonds that are priced more
competitively and distributed via our Platform.
The Guidance Note on Underwriting Class C Business published by the Office of the
Commissioner of Insurance in Hong Kong on 30 July 2014 (the “Guidance Note”) has indicated
that in respect of ILAS products, “indemnity commission, or any standing arrangement that offers
advance payment of commission, is strictly prohibited.” In addition, the Guidance Note states that
commission payable by insurers should be on an earned basis and spread over an appropriate
duration to encourage good after-sale service and duly reward long-term relationship between
intermediaries and policyholders. The Guidance Note will come into effect on 1 January 2015. Our
Group does not distribute ILAS products on our Platform. Barring unforeseen circumstances, we
do not foresee the implementation of the Guidance Note to have a direct adverse impact on our
Group’s business. We are of the view that the implementation of the Guidance Note may result in
the distribution of ILAS products becoming less attractive for intermediaries and may result in
intermediaries becoming more active in the distribution of investment products such as those
distributed on our Group’s platform in Hong Kong.
Increase in operating and other expenses due to our expansion plans
We also expect our operating and other expenses to increase, mainly due to the expansion of our
business with the setting up of our new operations in PRC as well as any proposed acquisitions
and/or investments in other markets in Asia.
Save as disclosed above and under the sections entitled “Risk Factors” and “Management’s
Discussion and Analysis of Results of Operations and Financial Condition” of this Prospectus and
barring unforeseen circumstances, our Directors are not aware of any other known recent trends,
uncertainties, demands, commitments or events that are reasonably likely to have a material
effect on our net sales or revenues, profitability, liquidity or capital resources, or that would cause
financial information disclosed in this Prospectus to be not necessarily indicative of our future
operating results or financial condition. Please also refer to the section entitled “Cautionary Note
on Forward-Looking Statements” of this Prospectus.
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180
BUSINESS STRATEGIES AND FUTURE PLANS
Increasing the penetration of our Platform
We believe there will be a potential increase in the proportion of investments flowing through
investment platforms as compared to traditional investment channels in the markets in which we
operate. Accordingly, we believe our Platform is well-positioned to benefit from this trend.
For our B2B Business, we will continue to broaden the base of B2B Customers using our Platform.
We are working on signing up more banks, insurance companies, FAs and other financial
institutions (including those outside the jurisdictions that we operate in) in this regard. As more
FAs gradually transition to a pricing model based on fees that are calculated as a percentage of
AUA (as compared to an upfront commission-based model), we believe we will be one of the key
beneficiaries.
For our B2C Business, we will continue our efforts to increase the number of DIY Investors using
our Platform. Through improving and broadening the tools, research and information available on
our Fundsupermart.com Website and mobile applications, we intend to attract a higher level of
traffic from customers looking for research and information. We will also continue to invest in
consumer educational efforts, while remaining competitive in the pricing of our services.
Enhancement of our product capabilities, IT and services
While we expect unit trusts to continue to be the key product that we distribute, we intend to
broaden the range of Investment Products that we carry on our Platform, to include more ETFs,
bonds, and eventually shares and securities, subject to relevant regulatory approvals.
Having an investment platform that allows FAs to seamlessly advise across multiple asset classes
is an important consideration in ensuring that we remain a market leader in our business in the
long run. It will also allow us to grow our AUA at a faster pace.
Rather than just focusing on providing purely transactional capabilities, we will be empowering the
FAs to earn ongoing advisory fees across the different asset classes. We will also continue to
improve and broaden the range of tools and supporting services that we provide to FAs and DIY
Investors.
We also have experience in developing B2C capabilities such as websites and mobile applications
to reach out to our B2C Customers. We believe that we are well-placed to provide specialised
services to potential customers such as financial institutions who want to tap on the scale of the
Internet to expand their customer base by providing them with customised and efficiently-
managed websites and mobile applications.
We intend to set aside S$8.0 million from the net proceeds of the issuance of the New Shares and
the Cornerstone Shares for the enhancement of our product capabilities, IT and services.
Mergers and acquisitions strategy
Historically, we have principally grown our AUA organically. While we see the ability to grow our
AUA as key to our long term success, growth strategies through mergers and acquisitions will be
used as ways to boost our potential AUA growth.
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181
We will continue to focus on building a business that has an attractive return on equity and strong
cash-generation capabilities. The scalable nature of our business, together with our internal
resources and the proceeds to be raised from the Listing, will allow us to explore various
acquisition opportunities.
In our existing markets of Singapore, Hong Kong and Malaysia, we believe there are few
investment platforms available for acquisitions. However, there are related businesses with
sizeable AUA and customer base that can complement our existing investment platform business.
We will be actively evaluating these opportunities.
We will also be exploring the possibilities of entering new markets within the Asia-Pacific region
through acquisitions, joint ventures and/or strategic partnerships.
We intend to set aside S$27.2 million from the net proceeds of the issuance of the New Shares
and the Cornerstone Shares for our mergers and acquisitions strategy which includes potential
acquisition opportunities in our existing markets (Singapore, Hong Kong and Malaysia) and in new
markets (China and others).
Expansion of our business in the Chinese market
We feel that there is a substantial market opportunity for the investment platform business in
China given the size of the market. We believe China will be one of the biggest markets in the
world for wealth management products. The wealth management industry in China still lags
behind other key financial markets in terms of sophistication in a number of ways (for example, the
range of available asset classes), but with various regulatory changes and liberalisation,
opportunities for the investment platform business in China will arise.
There are also substantial opportunities for us to tap into China-based investors that are onshore
(within China) as well as offshore (through the financial centres of Hong Kong and Singapore).
To tap into the onshore Chinese market, we have incorporated iFAST China. iFAST China will
operate in China as a provider of platform services in China, including IT and business process
outsourcing services such as system application management and maintenance, IT technology
management, back office services, software development, and data processing. The China IT
platform is currently being developed and we intend to launch it in the second half of 2015. We
are looking to work with local partners that already have a good distribution reach in China, to
ensure that we are able to scale up our business in China as soon as practicable. From our
discussions and checks with our Suppliers and B2B Customers who are FAs, we understand that
based on our market share of AUA and investment transactions, we are a leading and established
funds and investments distribution platform in Singapore, Malaysia and Hong Kong. In addition,
according to independent asset management research firm, Cerulli Associates, our Group is a
leading distribution platform among independent financial advisory firms and the online channel
(DIY Investors) in Singapore. For further details, please refer to the section entitled “Industry
Overview – Investment platforms in Asia ex-Japan: History and growth potential” in this
Prospectus. We believe that our reputation as a leading funds and investments distribution
platform in Hong Kong and Singapore, together with our established network of global partners,
will help our market entry into China. For further details, please refer to the section entitled
“Industry Overview – Investment platforms in Asia ex-Japan: History and growth potential” in this
Prospectus.
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182
To tap into the offshore Chinese market, we will collaborate with our B2B Customers and leverage
on our established presence as a leading funds and investments distribution platform in both Hong
Kong and Singapore, our established base of fund house partners (including many leading global
names), our extensive range of investment products in Hong Kong and Singapore, and our good
reputation within the wealth management industry.
Based on its current business model, iFAST China has obtained the licences required for it to
commence operation. Our Group will apply for additional licences from the relevant regulatory
authorities from time to time as part of our Group’s efforts to expand our business, services offered
and types of Investment Products available.
We intend to set aside S$7.0 million from the net proceeds of the issuance of the New Shares and
the Cornerstone Shares for the expansion of business in the Chinese market, excluding
acquisitions.
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183
Save as disclosed in this section and in the section entitled “Risk Factors” in this Prospectus, as
at the Latest Practicable Date, our business operations in Singapore are not subject to any special
legislation or regulatory controls which have a material effect on our business and operations,
other than those generally applicable to companies and businesses incorporated and/or operating
in Singapore, Malaysia, Hong Kong and China.
SINGAPORE
The regulatory body relevant to our business in Singapore is the Monetary Authority of Singapore.
The key pieces of legislation applicable are the Securities and Futures Act and the Financial
Advisers Act.
The SFA provides a legal framework for the licensing and conduct of the business of capital
markets activities in Singapore. The FAA provides a legal framework for the licensing and conduct
of the business of financial advisory services in Singapore. Our business includes both capital
market activities and financial advisory services and is accordingly, subject to the licensing and
conduct of business provisions of the SFA and the FAA. Our licensed entity in Singapore is iFAST
Financial.
CMS Licence
On 1 February 2011, pursuant to the change in the MAS licensing regime which no longer requires
the renewal of CMS licences, MAS re-issued to iFAST Financial a single CMS Licence (Licence
Number CMS000137-6). The CMS Licence enables it to deal in securities and provide custodial
services for securities subject to certain conditions. For example, as we are a CMS Licence
holder, pursuant to Section 97A of the SFA, no shareholder of our Company may hold more than
20% of our Shares unless he has obtained the prior approval of MAS to enter into the
arrangement.
Pursuant to Section 97E(2)(a) of the SFA, MAS has the authority to require the holder of a CMS
Licence to immediately take any action or to do or not to do any act or thing whatsoever in relation
to its business as the Authority may consider necessary if the holder of a CMS Licence is unable
to meet its obligations. Any holder of a CMS Licence that fails to comply with a requirement
imposed by the Authority under Subsection (2)(a) shall be guilty of an offence and shall be liable
on conviction to a fine not exceeding S$150,000 and, in the case of a continuing offence, to a
further fine not exceeding S$15,000 for every day or part thereof during which the offence
continues after conviction. The CMS Licence does not need to be renewed, and is valid until (i)
the licence holder files a cessation notification to the MAS, (ii) the licence has lapsed upon the
winding up or dissolution of the licence holder or (iii) the licence has been revoked or suspended
by the MAS.
FA Licence
On 1 February 2011, pursuant to the change in the MAS licensing regime which no longer requires
the renewal of FA licences, MAS re-issued to iFAST Financial a single FA Licence (Licence
Number FA000022-5). The FA Licence enables it to:
(a) advise on life policies, securities (other than collective investment schemes) and collective
investment schemes, either directly or through publications or writings other than in the
manner specified in paragraph 2 of the Second Schedule to the FAA or advising on corporate
finance within the meaning of the SFA;
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184
(b) issue or promulgate research analyses or research reports on life policies and securities
(other than collective investment schemes) and collective investment schemes;
(c) market collective investment schemes; or
(d) arrange contracts of insurance in respect of life policies,
subject to the licence conditions as prescribed by MAS.
Section 19 of the FAA provide MAS with the authority to revoke a FA Licence on certain grounds
provided that the FA Licence holder is, subject to Subsection (5), given an opportunity to be heard.
Once an FA Licence is revoked or suspended, the FA shall cease to act as a FA because failure
to do so is an offence under Section 19(9) which warrants a fine not exceeding S$150,000 and,
in the case of a continuing offence, to a further fine not exceeding S$15,000 for every day or part
thereof during which the offence continues after conviction. In addition, pursuant to Section
19E(7), the FA whose licence is revoked or suspended must immediately inform all its
representatives by notice in writing of such revocation or suspension, and the representative who
are so informed shall cease to act as representatives of that licensed FA. Any FA which
contravenes Subsection (7) shall be guilty of an offence and shall be liable on conviction to a fine
not exceeding S$50,000 and, in the case of a continuing offence, to a further fine not exceeding
S$5,000 for every day or part thereof during which the offence continues after conviction. The FA
Licence does not need to be renewed, and is valid until (i) the licence holder files a cessation
notification to the MAS, (ii) the licence has lapsed upon the winding up or dissolution of the licence
holder or (iii) the licence has been revoked or suspended by the MAS.
iFAST Financial has appointed certain of its employees as CMS and FA representatives to carry
out their duties. A CMS or FA Licence holder may submit a notification to MAS to appoint a
particular individual as an appointed representative to represent such CMS or FA Licence holder.
Once MAS updates the public register of representatives, the appointed representative can start
conducting the regulated activities for which he is appointed to perform.
Licence for Trust Business
MAS has exempted iFAST Financial from the requirement to obtain a licence in respect of its trust
business relating to employee pension schemes pursuant to Section 80(2) of the TCA subject to
iFAST Financial’s compliance with certain conditions as follows:
(a) iFAST Financial shall only provide the proposed trust business services to corporations with
net assets exceeding S$10 million in value (or its equivalent in a foreign currency) (“Trust
Business Customers”) as determined by:
(i) the most recent audited balance sheet of the corporation; or
(ii) where the corporation is not required to prepare audited accounts regularly, a balance
sheet of the corporation certified by the corporation as giving a true and fair view of the
state of affairs of the corporation as of the date of the balance-sheet, which date shall
be within the preceding twelve (12) months;
(b) all investment decisions with respect to the employee pension schemes shall be made solely
by the Trust Business Customers and/or its employees under the employee pension
schemes (“Employees”);
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185
(c) iFAST Financial shall at all times comply with the Securities and Futures (Licensing and
Conduct of Business) Regulations (“LCBR”) when administering the employee pension
schemes; and
(d) unless otherwise agreed between iFAST Financial and its Trust Business Customers, iFAST
Financial shall draw to the attention of its Trust Business Customers that it is only
responsible to them and require the Trust Business Customers to inform their Employees of
the same.
Exempt Insurance Broker
As iFAST Financial holds a CMS Licence as well as a FA Licence, it is an exempt insurance broker
pursuant to Section 35ZN of the Insurance Act.
Technology Risk Management
MAS has also issued a set of notices which took effect as of 1 July 2014 setting out legal
requirements relating to technology risk management that are imposed on financial institutions
which include, requirements for a high level of reliability, availability, and recoverability of critical
information technology systems. Financial institutions are required to implement information
technology systems to protect customer information from unauthorised access or disclosure. As
at the Latest Practicable Date, our Group has implemented the necessary policies, procedures
and IT solutions in accordance with the MAS notices.
CPF-Investment Administrator
Separately, iFAST Financial is a registered CPFIA and acting in such capacity, has to adhere to
the CPFIA Terms and Conditions issued by the CPF Board.
MALAYSIA
The regulatory bodies relevant to our business in Malaysia are the SC and the FIMM. The key
pieces of legislation are the CMSA and the Anti-Money Laundering and Counter Financing of
Terrorism Act 2001. In addition, our business in Malaysia also takes into consideration the
Licensing Handbook, Code of Ethics and Rules of Professional Conduct (Unit Trust Funds).
Our licensed entity in Malaysia is iFAST Capital Malaysia which is regulated by the SC pursuant
to the CMSA which came into force on 28 September 2007. iFAST Capital Malaysia is a holder of
a CMSL from the SC which was granted to us on 29 April 2008 and which was subsequently
re-issued on 1 October 2012 pursuant to changes in the licence conditions. iFAST Capital
Malaysia’s CMSL is for three (3) regulated activities, namely dealing in securities (restricted to unit
trusts), dealing in private retirement schemes and the provision of investment advice. Our licence
is valid in perpetuity unless it is revoked or suspended by the SC. It is a licensing requirement for
iFAST Capital Malaysia to submit an annual return to the SC. The date of submission of the last
annual return for iFAST Capital Malaysia to the SC was 19 June 2014.
Under the Licensing Handbook, iFAST Capital Malaysia must have at least two (2) CMSL holders
for each regulated activity. If the number of CMSL holders falls below the minimum requirement
of two (2), iFAST Capital Malaysia must take immediate steps to recruit a new candidate.
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186
In addition, as iFAST Capital Malaysia is (i) licensed for dealing in unit trust products and is
registered with the FIMM as an Institutional Unit Trust Adviser (“IUTA”) and (ii) licensed for dealing
in private retirement schemes and is registered with the FIMM as an Institutional Private
Retirement Scheme Adviser (“IPRA”), it must have at least two (2) individuals who are registered
with FIMM. The IUTA and the IPRA are subject to annual renewal and the payment of annual fees,
and will continue until it is withdrawn or revoked.
HONG KONG
The regulatory bodies relevant to our business in Hong Kong are the SFC and the MPFSA. The
key pieces of legislation are the SFO, Companies Ordinance, Anti-Money Laundering and
Counter-Terrorist Financing (Financial Institutions) Ordinance (“AMLO”), SFC codes and
guidelines such as Code of Conduct for Persons Licensed by or Registered with the SFC,
Personal Data (Privacy) Ordinance (“PDPO”), and the Mandatory Provident Fund Schemes
Ordinance (Cap 485) (“MPFSO”).
Our licensed entities in Hong Kong are iFAST HK and IPS HK (formerly known as ING Platform
Services), which are regulated by the SFC pursuant to the SFO.
iFAST HK is the holder of a SFC licence for carrying out Type 1 regulated activities (Dealing in
Securities) and Type 4 regulated activities (Advising on Securities). iFAST HK’s licence for Type
1 regulated activities and Type 4 regulated activities was first granted on 30 March 2007 and were
re-issued on 17 June 2013 because of changes in the licence conditions. iFAST HK’s licence for
Type 1 regulated activities is subject to the condition that iFAST HK shall not engage in stock
brokering activities. As of the Latest Practicable Date, there are no licence conditions on iFAST
HK’s licence for Type 4 regulated activities.
IPS HK is the holder of a SFC licence for carrying out Type 1 regulated activities (Dealing in
Securities) and Type 4 regulated activities (Advising on Securities). IPS HK’s licence for Type 1
regulated activities was effective on 12 February 2008 and its Type 4 licence was effective on 15
October 2012. IPS HK’s licence for Type 1 regulated activities is subject to the condition that IPS
HK shall not engage in stock brokering activities. As of the Latest Practicable Date, there are no
licence conditions on IPS HK’s licence for Type 4 regulated activities.
In relation to the licences held by each of iFAST HK and IPS HK, none of the licences have expiry
or renewal dates. However, it is a licensing requirement that each of iFAST HK and IPS HK submit
an annual return to the SFC. The date of submission of the last annual return for both iFAST HK
and IPS HK was 24 March 2014.
iFAST HK and IPS HK are also registered principal intermediaries under the MPFSO and must
deliver to the MPFSA an annual return. The date of submission of the last annual return for both
iFAST HK and IPS HK was 3 January 2014.
In August 2014, iFAST HK had written to SFC to apply for the addition of Type 9 regulated
activities (Asset Management) to its licence. As at the Latest Practicable Date, our application is
still under consideration and has not been approved.
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187
REGULATORY LICENCES, PERMITS AND APPROVALS
Our Group has obtained the following licences, permits and approvals in relation to our business:
Type of licence,
permit or approval Issued to Purpose
Issuing/
Licensing
Body Date of Issue
Financial Adviser’s Licence iFAST
Financial
Provision of financial
advisory services
MAS 1 February 2011
Capital Markets Services
Licence
iFAST
Financial
Dealing in securities and
provision of custodial
services (both are restricted
to unit trusts and Singapore
Government Securities)
MAS 1 February 2011
CPFIA Agreement iFAST
Financial
Provision of CPF investment
administration services
CPF Board Deed of Indemnity
signed on
1 December 2004
Exempt Insurance Broker iFAST
Financial
Provision of insurance
broking services
MAS Commenced on
2 January 2004
Capital Market Services
Licence
iFAST Capital
Malaysia
Dealing in securities
(restricted to unit trusts),
provision of investment
advice and dealing in private
retirement schemes
SC Date of grant:
29 April 2008
FIMM Approval as IUTA
and IPRA
iFAST Capital
Malaysia
Marketing and distribution of
unit trusts and private
retirement scheme
FIMM IUTA granted on
2 April 2008
IPRA granted on
18 October 2012
SFC Licence for Type 1
Regulated Activities
iFAST HK Provision of financial
services in relation to the
dealing in securities (except
engaging in stock brokering
activities)
SFC 17 June 2013
SFC Licence for Type 4
Regulated Activities
iFAST HK Provision of financial
services in relation to
advising on securities
SFC 17 June 2013
SFC Licence for Type 1
Regulated Activities
IPS HK Provision of financial
services in relation to the
dealing in securities (except
engaging in stock brokering
activities)
SFC 15 October 2012
(1)
SFC Licence for Type 4
Regulated Activities
IPS HK Provision of financial
services in relation to
advising on securities
SFC 15 October 2012
MPFSA approval on
intermediary registration
iFAST HK Engaging in MPF sales and
marketing activities, and
providing advisory services in
relation to MPF Schemes
MPFSA Letter dated
7 September 2012
MPFSA approval on
intermediary registration
IPS HK Engaging in MPF sales and
marketing activities, and
providing advisory services in
relation to MPF Schemes
MPFSA Letter dated
7 September 2012
Note:
(1) IPS HK’s licence for Type 1 regulated activities was effective on 12 February 2008.
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188
The relevant business licences, certificates and approvals necessary for our business operations
generally do not need to be renewed, save for our registration as an IUTA and IPRA with the FIMM
which is subject to annual renewal and the payment of annual fees.
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 and in the section
entitled “Risk Factors” in this Prospectus, 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, none of the
aforesaid licences, permits and approvals have been suspended, revoked or cancelled and to the
best of our knowledge and belief, we are not aware of any facts or circumstances which would
cause such licences, permits and approvals to be suspended, revoked or cancelled as the case
may be, or for any applications for, or renewal of any of these licences, permits and approvals to
be rejected by the relevant authorities.
Shareholding Restrictions
Singapore
Section 97A(2) of the SFA and Section 57A(2) of the FAA prohibit a person from entering into an
arrangement to acquire or hold, directly or indirectly, 20% or more of the issued share capital of
the holder of a CMS license and a licensed FA respectively or to control, directly or indirectly, 20%
or more of the voting power in the holder of a CMS license and a licensed FA respectively. Prior
approval of MAS is required before any person (individuals and bodies corporate or
unincorporated) may enter into any arrangement in relation to shares in the licensed entity that
would result in such person obtaining effective control of the licensed entity. An application for
MAS’ approval must be made in writing. MAS may approve the application as well as subject such
approval to conditions if it is satisfied that (a) the applicant is a fit and proper person to have
effective control of the licensed entity; (b) having regard to the applicant’s likely influence, the
licensed entity is likely to continue to conduct its business prudently and comply with the
provisions of the applicable legislation and directions made thereunder; and (c) the applicant
satisfies such other criteria as may be prescribed or as may be specified in written directions by
MAS.
Section 97A(1) and 57A(1) state that Section 97A and Section 57A, respectively, apply to all
individuals whether resident in Singapore or not and whether citizens of Singapore or not, and to
all bodies corporate or unincorporated, whether incorporate or carrying on business in Singapore
or not. Accordingly, Shareholders of the Company who may enter into an arrangement to acquire
or hold, directly or indirectly, 20% or more of the issued share capital of iFAST Financial or to
control, directly or indirectly, 20% or more of the voting power of iFAST Financial must obtain the
prior approval of MAS to enter into such an arrangement.
Pursuant to Section 97A(7), any person who contravenes Section 97A(2) or 57A(2) shall be guilty
of an offence and shall be liable on conviction to a fine not exceeding S$150,000 or to
imprisonment for a term not exceeding 3 years or to both.
GOVERNMENT REGULATIONS AND LICENSING
189
Hong Kong
In Hong Kong, to become or to continue to be a substantial shareholder of a licensed corporation,
prior approval under Section 132(1)(a) of the SFO is required (the “Hong Kong Shareholding
Restrictions”). Under Section 6 of Schedule 1 of the SFO, a person is regarded as a substantial
shareholder of a licensed corporation if:
(a) he holds an interest in shares in the licensed corporation:
(i) the aggregate number of which shares is equal to more than 10% of the total number
of issued shares of the licensed corporation; or
(ii) which entitles him, either alone or with any of his associates and either directly or
indirectly, to exercise or control the exercise of more than 10% of the voting power at
general meetings of the licensed corporation; or
(b) he holds shares in any other corporation which entitles him, either alone or with any of his
associates and either directly or indirectly, to exercise or control the exercise of 35% or more
of the voting power at general meetings of that other corporation, or of a further corporation,
where that other corporation is itself entitled, either alone or with its associates and either
directly or indirectly, to exercise or control the exercise of more than 10% of the voting power
at general meetings of the licensed corporation.
The Hong Kong Shareholding Restrictions are applicable to (i) our Company (which is entitled to
exercise or control the exercise of more than 10% of the voting power at general meetings of the
licensed corporations, iFAST HK and iFAST Platform); and (ii) if applicable, a shareholder of our
Company or any other corporation (the “Other Corporation”) which is entitled to exercise or
control the exercise of 35% or more of the voting power at general meetings of our Company (or,
if applicable, a further corporation which is entitled to exercise or control the exercise of 35% or
more of the voting power at general meetings of the Other Corporation).
Pursuant to Section 3(1)(c) of the Securities and Futures (Licensing And Registration)
(Information) Rules (Cap 571S), the application should be made by a person for approval to
become or continue to be a substantial shareholder of a licensed corporation.
Pursuant to Section 131(1) of the SFO, a person should not become and continue to be a
substantial shareholder of a licensed corporation without first being approved by the SFC under
Section 132(1)(a).
The substantial shareholder should be a fit and proper person as set out in Section 129 of the
SFO. Approval is made by lodging an Application Form 4 with the prescribed fee and supporting
documents and, if applicable, Supplement 2 (information on corporate substantial shareholder) for
a corporate applicant or Supplement 3 (statement of personal information) for an individual
applicant.
Under Section 131(2) of the SFO, a person who is in breach of Section 131(1) may be liable as
follows:
(a) on conviction on indictment to a fine of HK$1,000,000 and to imprisonment for 2 years, and
to a further fine of HK$5,000 for every day during which the person continues to be such a
substantial shareholder without the SFC’s approval; or
GOVERNMENT REGULATIONS AND LICENSING
190
(b) on summary conviction to a fine at level 6 (i.e. HK$100,000) and to imprisonment for 6
months, and to a further fine of HK$500 for every day during which the person continues to
be such substantial shareholder without the SFC’s approval.
If a person becomes a substantial shareholder of a licensed corporation without the SFC’s prior
approval by virtue of:
(a) a transfer of shares;
(b) an issue of shares; or
(c) a transfer of the right to be issued with shares,
then, unless and until the SFC approves the person to continue to be a substantial shareholder
of the licensed corporation, the voting rights conferred by the shares concerned are not
exercisable. If the person purportedly exercises any voting right that is not exercisable, he
commits an offence and is liable: (i) on conviction on indictment to a fine of $200,000 and to
imprisonment for 1 year; or (ii) on summary conviction to a fine at level 6 and to imprisonment for
6 months.
In addition, under Section 133 of the SFO, where a person became a substantial shareholder
without the SFC’s prior approval, whether or not he has applied for approval to continue to be such
shareholder and regardless of whether such approval is granted or not, the SFC may by notice in
writing give directions to the licensed corporation concerned, including requiring the licensed
corporation to deem void and of no effect any votes cast by the person and any of his associates
at any meeting of the licensed corporation. Where the SFC refuses to approve an application for
a person to continue to be a substantial shareholder, SFC may by notice in writing direct the
person to reduce his interest in the licensed corporation.
Section 135(3) of the SFO provides that, where there is a change in the information provided to
the SFC by a licensed corporation and/or a substantial shareholder of a licensed corporation, a
written notice of change in the information containing full description of the change must be given
to the SFC within seven (7) business days of the change.
Malaysia
In Malaysia, iFAST Capital Malaysia requires SC’s prior approval if a change of shareholding in
iFAST Capital Malaysia will result in a change in iFAST Capital Malaysia’s controller even though
there is no specific shareholding restriction imposed by the SC when iFAST Capital Malaysia was
initially set up. The controller is defined under Section 60(7) of the CMSA as a person who (a) is
entitled to exercise, or control the exercise of, not less than 15% of the votes attached to the voting
shares in iFAST Capital Malaysia; (b) has the power to appoint or cause to be appointed a majority
of the directors of iFAST Capital Malaysia; or (c) has the power to make or cause to be made,
decisions in respect of the business or administration of iFAST Capital Malaysia, and to give effect
to such decisions or cause them to be given effect to. SC’s prior approval is also required when
iFAST Capital Malaysia is establishing a new business or acquiring shares/interests in or outside
Malaysia in relation to capital market-based activities.
However, SC only needs to be notified within 14 days of the following occurrence of events:
(a) if the change of shareholding of iFAST Capital Malaysia does not result in a change of iFAST
Capital Malaysia’s controller; or
GOVERNMENT REGULATIONS AND LICENSING
191
(b) if iFAST Capital Malaysia is establishing a new business or acquisition of shares/interests in
or outside Malaysia in relation to non-capital market-based activities; or
(c) if iFAST Capital Malaysia is disposing a business or shares/interests in or outside Malaysia.
The above restrictions on change of shareholding would apply to our Company, who is deemed
to be the controller of iFast Capital Malaysia. iFAST Capital Malaysia will need to obtain the prior
approval of SC for any direct or indirect change in its controller. Shareholders of our Company who
intend to become a controller by, inter alia, holding at least 15% of the voting Shares of the
Company, will also need to obtain the prior approval of the SC through iFAST Capital Malaysia.
If there is a breach of any of the conditions in the Licensing Handbook by a licensed entity and
the SC is satisfied that it is appropriate to take action against such licensed entity, the SC may
take one or more of the following actions as specified under section 356 of the CMSA:
(a) direct the person in breach to comply with, observe, enforce or give effect to any requirement
or provision of the CMSA, any securities laws, any guidelines, written notice, any condition
of, or restriction on, a licence granted under or pursuant to the CMSA, as the case may be;
(b) impose a penalty in proportion to the severity or gravity of the breach on the person in
breach, but which in any event shall not exceed RM500,000.00;
(c) reprimand the person in breach; and/or
(d) require the person in breach to take such steps as the SC may direct to remedy the breach
or to mitigate the effect of such breach, including making restitution to any other person
aggrieved by such breach.
OTHER PERMITS
iFAST Financial holds the following permits to print, publish, sell or distribute a newspaper under
the Newspaper and Printing Presses Act (Chapter 206) of Singapore:
Name of
Publication Frequency Permit No. Date of Issue Date of Expiry
iGP INSIGHTS Semi-annually MCI (P) 174/02/2014 27 February
2014
26 February
2015
REGULATORY INSPECTIONS AND INVESTIGATIONS
As our business operates in a highly regulated industry, we are periodically subject to inspections
by the securities regulators in the jurisdictions in which we operate, namely, MAS in Singapore,
SFC in Hong Kong, and SC in Malaysia. In the course of these inspections, the relevant authorities
have in the past highlighted certain breaches and/or non-compliance with the applicable laws,
regulations, guidelines and/or notices and provided various findings and recommendations on our
policies, procedures, controls and systems. Our Group has taken steps and implemented
procedures with regards to the findings and recommendations of such inspections to ensure
compliance with the applicable laws, regulations, guidelines and/or notices. For further details,
please refer to the section entitled “Our Business – Regulatory Compliance” of this Prospectus.
GOVERNMENT REGULATIONS AND LICENSING
192
The outcome of certain inspections as well as any pending and/or ongoing investigations are set
out below. Save as disclosed below and in this Prospectus, our Group has not received or been
subjected to any fines, offer of composition, supervisory warnings and/or any other penalties.
Singapore
Previous Transgressions by our Group
2011 – Offering of administration services for products not approved by CPF
iFAST Financial had offered administration services for insurance products which were not
previously approved by CPF for iFAST Financial to offer under the investment administrator
platform. iFAST Financial failed to write to the CPF Board for approval prior to offering
administration services for such insurance products as it had understood that approval was
required only for unit-trust products but not insurance products. In addition, iFAST Financial had
also accepted CPFIS transactions from Target Insurance Brokers Pte Ltd (“TGT”), which was
barred from all CPFIS transactions, including and not limited to unit trusts and insurance products.
In its letter dated 1 March 2011, CPF had issued a warning to iFAST Financial for breaching the
terms and conditions of the CPFIS, but no penalties were imposed on iFAST Financial. TGT is also
no longer an FA company that uses iFAST Financial’s B2B Platform and iFAST Financial no longer
offers administration services for such insurance products and the relevant insurance distribution
agreement was terminated on 23 March 2011.
To prevent the provision of administrative services for insurance products to CPF barred financial
advisers, all new businesses that involve CPF funds will have to be pre-approved by our
Company’s compliance department.
2009 – Handling of unit trusts redemption moneys from other customers
In 2006, iFAST Financial had set up a wholly-owned subsidiary, iFAST Nominees to provide
nominee services for unit trusts of the customers of iFAST Financial. iFAST Financial had thought
that having iFAST Nominees as a separate legal entity would more clearly separate customers’
assets from the assets of iFAST Financial. Accordingly, iFAST Nominees opened and operated
four (4) bank accounts with Standard Chartered Bank to handle unit trusts redemption moneys
from the customers of iFAST Financial.
This was in contravention of, inter alia, Section 104(1)(b) of the SFA read with regulation 16(1)(b)
of the LCBR, which requires iFAST Financial to deposit such moneys in a trust account maintained
in its own name with specified financial institutions. In addition, the transfer of customer’s
redemption moneys from iFAST Financial’s trust accounts to iFAST Nominees’ bank accounts was
in contravention of Section 104(1)(b) of the SFA read with regulation 21 of the LCBR which
prohibits iFAST Financial from withdrawing any money from a customer’s trust account except for
the purposes specified in that regulation. By transferring the end-of-day balances of clients’
redemption moneys to the bank accounts maintained in the name of iFAST Nominees, iFAST
Financial had withdrawn money from iFAST Financial’s trust accounts for a purpose not specified
in regulation 21.
MAS did not find any losses suffered directly by iFAST Financial’s customers as a result of these
contraventions. iFAST Financial had also cooperated fully with MAS and rectified the
contraventions by 10 November 2008.
GOVERNMENT REGULATIONS AND LICENSING
193
In its letter dated 4 September 2009, MAS had reprimanded iFAST Financial, and made an offer
of composition for a total of S$25,000 provided that iFAST Financial furnished MAS with:
(a) iFAST Financial’s agreement that the offence be dealt with under Section 336(2) of the SFA
and iFAST Financial’s acceptance of the offer of composition made by MAS; and
(b) a cheque for the sum of S$25,000 in settlement of the compounded sum.
On 15 September 2009, iFAST Financial accepted and paid the offer of composition made by
MAS. iFAST Nominees had closed the bank accounts with Standard Chartered Banks after
transferring the trust monies back to iFAST Financial, and the contraventions had been rectified
by 10 November 2008.
Our Company no longer uses iFAST Nominees to provide nominee services. The regulated entity,
iFAST Financial has taken over as provider of such nominee service. iFAST Nominees had
become dormant subsequently.
2008 – Compliance with the Notice to Capital Markets Licensees and Exempt Persons on
Prevention of Money Laundering and Countering the Financing of Terrorism
The MAS has issued the Notice to Capital Markets Licensees and Exempt Persons on Prevention
of Money Laundering and Countering the Financing of Terrorism (“AML/CFT Notice”). On 19
December 2008, as iFAST Financial had not fully complied with the AML/CFT Notice. For
example, iFAST Financial did not verify customers’ contact numbers prior to the opening of new
accounts, nor did it adhere to the specified timeline in the AML/CFT Notice for the completion of
the verification of customers’ details for customer due diligence. Accordingly, the MAS had issued
a supervisory warning to iFAST Financial requiring it to take immediate steps to ensure full
compliance. No penalties or fines were imposed.
iFAST Financial has since enhanced its system and operational procedures to ensure compliance.
For example, iFAST Financial has enhanced its system to tackle customer identification issues
and ensure its customers have a valid residential address and contact number. Its system is
designed to reject an address when it is recognised to be a P.O. Box. Additional checks are also
made to ensure that telephone numbers provided by customers have a minimum number of digits.
iFAST Financial has also emphasised to its frontline and operations staff to reject new account
openings without proper customer information, including those lacking a contact number and
address.
In addition, iFAST Financial has implemented a procedure which imposes a finite time limit for
verification of its customers’ details to ensure its customer due diligence is in compliance with the
AML/CFT Notice and its guidelines.
iFAST Financial also performs customer due diligence on any declared beneficial owner, including
screening all beneficial owners and joint account holders at account opening and on an on-going
basis and regardless of nationality.
GOVERNMENT REGULATIONS AND LICENSING
194
2007 – Breach of licence conditions for not obtaining the prior approval of MAS before setting up
iFAST Nominees
The CMS Licence of iFAST Financial requires it to obtain the prior approval of the MAS before
acquiring or holding, whether directly or indirectly, an interest of 20% or more of the share capital
of any corporation, or establish any branch (whether in Singapore or elsewhere). On 27 October
2006, iFAST Financial had incorporated iFAST Nominees without first obtaining the approval of
MAS. Thereafter, it had written to MAS to seek approval for the incorporation of iFAST Nominees.
In its letter dated 27 September 2007, the MAS (i) approved the incorporation of iFAST Nominees;
and (ii) had issued a supervisory warning to iFAST Financial to comply with the applicable laws
and regulatory requirements at all times. iFAST Nominees is currently a dormant company with no
business activities. No penalties or fines were imposed.
iFAST Financial has since enhanced its monitoring system to ensure compliance with its CMS
Licence. In addition, all incorporations and acquisitions of new subsidiaries must be pre-approved
by our Company’s compliance department and approval of MAS will thereafter be sought by our
Company.
2006 – Breach of contract notes requirements of SGS Bonds
In respect of contract notes issued by iFAST Financial to its B2B Customers for transactions in
SGS Bonds for the period end-December 2003 to end-March 2005, iFAST Financial was in breach
of Section 118 of the SFA read with:
(a) regulation 42(1)(a) of the LCBR, as iFAST Financial did not state in the contract notes issued
to its customers the address of its principal place at which it carries on business; and
(b) regulation 42(2) of the LCBR, which prescribed that contract notes shall be issued no later
than the business day immediately following the trade date, as iFAST Financial had issued
contract notes to its customers four (4) to eight (8) business days after the trade date.
In its letter dated 29 May 2006, the MAS had issued a supervisory warning to iFAST Financial to
comply with the applicable laws and regulatory requirements at all times. No penalties or fines
were imposed.
iFAST Financial has since rectified the abovementioned contravention and enhanced its systems
and operational procedures to send out contract notes in accordance with the SFA and LCBR. For
example, system enhancements have been put in place to automate the process of sending out
contract notes and ensure such contract notes are sent out in a timely manner. iFAST Financial’s
form of contract notes has since been amended to include the address of its principal place of
business. In addition, iFAST Financial has implemented a system of sampling checks by its
compliance department, which involves matching a sample of transactions against contract notes
that were sent out to ensure a timely despatch of the contract notes.
2005 – Publishing of article without a relevant representative licence
iFAST Financial had published two (2) articles by a previous employee of iFAST Financial in our
Group’s magazine titled “Fundsupermart”. At the relevant time of these articles, the employee did
not have the requisite representative’s licence under the FAA.
GOVERNMENT REGULATIONS AND LICENSING
195
In its letter dated 30 December 2005, the MAS had recommended that iFAST Financial review all
the activities of its employees to ascertain if each of them holds a valid representative’s licence
under the FAA and put in place appropriate measures to ensure compliance with all applicable
provisions in the FAA, Financial Advisers Regulations (the “FAR”) and the Notices issued by MAS
in relation to the FAA and the FAR. No penalties or fines were imposed.
In addition, our Company had put in place requirements and procedures to ensure that only
licensed representatives write articles and such articles are subject to an approval process with
sampling checks conducted by the compliance department. The compliance department will also
select sample articles and ensure that the respective authors are licensed.
2004 – Late filing of quarterly report of misconduct
iFAST Financial is required, as an exempt insurance broker, to submit a quarterly report of
misconduct not later than 14 days after the end of each quarter, setting out any disciplinary action,
including formal warnings, taken against its broking staff for misconduct in the prescribed term. A
“nil” report is required if no such disciplinary action has been taken against its broking staff in the
preceding quarter. This is in accordance with the Notice on Reporting of Misconduct of Broking
Staff by Insurance Brokers issued by MAS pursuant to Section 64(2) of the Insurance Act.
iFAST Financial had lodged its report for the quarter ending 30 June 2004 on 30 July 2004, after
the prescribed 14 days period. In its letter dated 6 September 2004, MAS issued a reprimand and
had recommended that iFAST Financial put in place appropriate measures to ensure compliance
with all applicable provisions in the Insurance Act as well as relevant notices and regulations. No
penalties or fines were imposed.
As recommended by MAS, iFAST Financial has also implemented procedures to ensure
compliance with all applicable provisions in the Insurance Act as well as relevant notices and
regulations. In particular, to ensure timely reporting, the filing of a quarterly report has been
included as an item in the compliance department’s monthly checklist. iFAST Financial has since
been filing the required quarterly reports, including “nil” reports, promptly after the end of each
quarter.
2003 – Acting as a representative without a valid licence
Mr. Wong Sui Jau is currently the general manager of Fundsupermart.com in Singapore, and is an
Executive Officer of our Group.
On 26 February 2003, when Mr. Wong Sui Jau was a part of the research team at
Fundsupermart.com, he had received a letter from MAS, reprimanding him for acting as a
representative of Fundsupermart.com without holding a valid representative licence under the
FAA. His previous licence had expired on 9 January 2003, but the renewal application was
submitted only on 20 January 2003, and he was deemed to have acted as a representative during
this period without a valid licence. No penalties or fines were imposed and iFAST Financial’s
compliance department had, until the revision to the licensing system with regard to renewals,
been tracking the renewal of licences closely. Such tracking was done through the creation of a
register of licensed representatives containing the corresponding licence expiry dates of such
licensed representatives. The register was used for monitoring the expiry of licences and ensuring
their timely renewal. Mr. Wong Sui Jau currently holds a valid representative licence.
GOVERNMENT REGULATIONS AND LICENSING
196
Under the current licensing system, both iFAST Financial and its representatives’ licences are not
subject to a renewal requirement. Such licences only have an issue date but no expiry date and
these licences will remain valid until the company ceases business or until revoked. Please see
corresponding disclosure in the section entitled “General and Statutory Information” of this
Prospectus.
As the compliance department is responsible for carrying out the implemented measures to
prevent a recurrence of the abovementioned transgressions, our Company has improved the
robustness of its risk management and compliance functions over the years and has expanded its
compliance department from one (1) full-time compliance officer in 2003 to its current five (5)
member compliance team. The compliance department has an established work plan which
addresses compliance audit, monitoring, regulatory reporting, review and implementation of new
or amended regulations and advisory to business units on potential new businesses. For further
details relating to compliance, please refer to the section entitled “Our Business – Regulatory
Compliance” of this Prospectus.
Hong Kong
SFC Investigation
On 20 September 2012, iFAST HK received a notice of inspection under Section 180 of the SFO
from the SFC (the “Inspection”). This was the first time such an inspection was conducted since
iFAST HK began its operations in 2007.
Subsequent to the Inspection, the inspection findings were referred to the Enforcement Division
of the SFC. Since 16 July 2013, the Enforcement Division of the SFC has been conducting
investigations on iFAST HK under Section 182(1) of the SFO. As of the date of the Prospectus,
the SFC has not concluded its investigation on whether there are potential breaches under the
SFO or other applicable laws and regulations.
According to Section 194 in Part IX of the SFO, the maximum fine that the SFC may impose,
among other sanctions including a suspension or revocation of licence of iFAST HK and/or its
responsible officers that could be imposed concurrently, is up to a maximum of HK$10 million or
three (3) times of the profit gained/loss avoided, whichever is higher.
For the year ended 31 December 2013, the B2C operations in Hong Kong accounted for less than
4% of our Group’s consolidated net revenue and less than 2% of our Group’s consolidated net
profit after tax. For 9M2014, the B2C operations in Hong Kong accounted for approximately less
than 4% of our Group’s consolidated net revenue. For the year ended 31 December 2013, the
operations of iFAST HK accounted for approximately less than 15% of our Group’s consolidated
net revenue and less than 5% of our Group’s consolidated net profit after tax. For 9M2014, the
operations of iFAST HK accounted for approximately less than 15% of our Group’s consolidated
net revenue (besides iFAST HK, we have another licensed entity in Hong Kong, IPS HK).
The Company intends to provide an update on the outcome of the SFC investigation via SGXNET
in compliance with the Listing Rules.
Please see the section entitled “General and Statutory Information – Miscellaneous” for further
details on the SFC investigation.
GOVERNMENT REGULATIONS AND LICENSING
197
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198
DIRECTORS
Our Board is entrusted with the responsibility for the overall management of our Group. The
particulars of our Directors are as follows:
Name Age Address Position
Lim Chung Chun 46 c/o 10 Collyer Quay, #26-01,
Ocean Financial Centre,
Singapore 049315
Chairman and CEO
Lim Wee Kian
(1)
46 c/o 10 Collyer Quay, #26-01,
Ocean Financial Centre,
Singapore 049315
Non-Executive Director
Low Huan Ping
(2)
58 c/o 10 Collyer Quay, #26-01,
Ocean Financial Centre,
Singapore 049315
Non-Executive Director
Yao Chih Matthias 58 c/o 10 Collyer Quay, #26-01,
Ocean Financial Centre,
Singapore 049315
Lead Independent Director
Ling Peng Meng 46 c/o 10 Collyer Quay, #26-01,
Ocean Financial Centre,
Singapore 049315
Independent Director
Kok Chee Wai 46 c/o 10 Collyer Quay, #26-01,
Ocean Financial Centre,
Singapore 049315
Independent Director
Ng Loh Ken Peter 61 c/o 10 Collyer Quay, #26-01,
Ocean Financial Centre,
Singapore 049315
Independent Director
Notes:
(1) Mr. Lim Wee Kian is the brother of our Executive Officer, Mr. Lim Wee Kiong, General Manager, Platform Services
Singapore.
(2) Mr. Low Huan Ping is a nominee director of SPH AsiaOne. SPH AsiaOne is a wholly-owned subsidiary of SPH, a
Singapore-incorporated company listed on the Mainboard of the SGX-ST. SPH AsiaOne’s principal activity is holding
investments. SPH AsiaOne acquired its stake in our Company in 2000 and is a long-term passive investor of our
Company. SPH, SPH AsiaOne and Mr. Low Huan Ping are not involved in the day-to-day management of our Group.
None of our Independent Directors sits on the board of any of our principal subsidiaries that are
based in jurisdictions other than Singapore.
Information on the business and working experience of our Directors is set out below:
Mr. Lim Chung Chun is the Chairman and CEO of our Group, and is also our founder. As
Chairman and CEO of our Group, Mr. Lim is responsible for setting the strategic direction of our
Group together with the Board and oversees the entire overall management of our Group. From
1991 to 1993 and from 1993 to 1997, Mr. Lim was an investment analyst with Schroder Securities
Singapore Pte. Ltd. and ING Baring Securities Pte Ltd respectively. From 1997 to 1998, he was
the Head of Research at ING Barings Securities Pte Ltd. In 1999, Mr. Lim ran a boutique fund
DIRECTORS, MANAGEMENT AND STAFF
199
management firm, before co-founding Fundsupermart.com Pte. Ltd. in early 2000. Mr. Lim
graduated with a Bachelor of Engineering (Electrical) from the National University of Singapore in
1991, and obtained a Diploma in Investment from the Institute of Banking and Finance in 1993.
Mr. Lim Wee Kian is a Non-Executive Director of our Company and was appointed to our Board
on 28 April 2004. From 1998 to 2000, he was the Director, Short Term Interest Rate Desk of UBS
AG, Singapore. From 2000 to 2003, he was the Director, Head Global FX, Asia ex-Japan, of
Barclays Capital, Singapore. From 2003 to 2004, he was the Director, Hedge Fund Manager of JL
Capital Pte Ltd. Mr. Lim is currently a Managing Director in the Foreign Exchange and
Commodities desk, Treasury and Markets at DBS Bank and has been with the bank since August
2004. Mr. Lim graduated with a Bachelor of Business from Nanyang Technological University in
1992.
Mr. Low Huan Ping is a Non-Executive Director of our Company. Mr. Low was appointed to our
Board on 30 June 2005. Mr. Low is the Executive Vice-President, Technology (IT & Production) of
SPH. He has been with the SPH Group since 1987. Mr. Low is also a director of M1 Limited,
MediaCorp Press Ltd and Shareinvestor.com Holdings Ltd. Mr. Low graduated with a Bachelor of
Arts (Honours) and Master of Arts from Cambridge University in 1978 and 1982, respectively,
where he read Engineering and graduated with a Master of Science from the National University
of Singapore in 1983. He also graduated from Harvard Business School’s Advanced Management
Program in 1993.
Mr. Yao Chih Matthias is the Lead Independent Director and was appointed to our Board on 1
January 2014. Mr. Yao was appointed as a member of the HDB Board in October 2009. He is the
Chairman of EM Services Pte Ltd, a subsidiary of HDB and Chairman of the Board of Trustees of
NTUC Eldercare Trust. He is also Managing Director of Agmonton Pte Ltd and a director of iFAST
Financial Pte Ltd. From 1997 to 1999, Mr. Yao was the Minister of State at the Ministry of Defence.
From 1999 to 2001 and from 2001 to 2004, he was the Minister of State at the Prime Minister’s
Office and Senior Minister of State at the Prime Minister’s Office respectively. From 2004 to 2011,
he was the Mayor of South East District for seven (7) years. From 2006 to 2011, he was the
Deputy Speaker of Parliament, and from 1991 to 2011, he was a Member of Parliament for the
MacPherson Single Member Constituency. Mr. Yao was awarded the Overseas Merit Scholarship
in 1975 and graduated with a Bachelor of Commerce (Honours) from the University of
Birmingham, UK in 1978.
Mr. Ling Peng Meng is an Independent Director of our Company and was appointed to our Board
on 10 March 2006. Mr. Ling has been a Managing Director and Head of Fixed Income, Greater
China at DBS Bank since April 2013. From July 1992 to April 1993, he started his career as an
officer with DBS Bank before moving to Schroder International Merchant Bankers Ltd between
May 1993 to October 1997 and Credit Agricole Indosuez Merchant Bank Ltd between October
1997 to December 1999. Mr. Ling was at Standard Chartered Bank between 1999 and 2013 where
his last held position was a Managing Director and Head of Capital Markets (South East Asia). He
is currently based in Hong Kong. Mr. Ling graduated with a Bachelor of Accountancy (Second
Class Honours (Upper Division)) from the National University of Singapore in 1992.
Mr. Kok Chee Wai is an Independent Director of our Company and was appointed to our Board
on 1 January 2014. Mr. Kok has been a Partner in Allen & Gledhill LLP since 1998 and presently
Co-Heads its Banking Practice. He has broad experience in domestic and international financings,
which includes acting for lenders and major corporates on domestic and cross-border syndicated
loans, structured and acquisition financing and debt restructuring. Mr. Kok graduated from the
National University of Singapore with an LLB (Hons) degree in 1991. He was admitted to the
Singapore Bar in 1992, when he joined Allen & Gledhill LLP.
DIRECTORS, MANAGEMENT AND STAFF
200
Mr. Ng Loh Ken Peter is an Independent Director and was appointed to our Board on 1 January
2014. Mr. Ng has been Managing Director of Peterson Asset Management Pte Ltd since 2000 and
is also a director of OWW Investments III Limited. Mr. Ng served as General Manager of
Investments in Hong Leong Assurance Bhd from 1996 to 2000. From 1987 to 1996, Mr. Ng was
at The Great Eastern Life Assurance Company Limited and was their Head of Treasury,
Investment and Corporate divisions at various stages of his career. He was senior manager of an
international public accounting firm and had worked in their Australian and Singapore offices from
1977 to 1986. From 2009 to 2010, Mr. Ng also served as a member on the ACRA Investment
Committee. Mr. Ng graduated from the National University of Singapore with a Bachelor of
Accountancy degree (with Honours) in 1977. He is also a Chartered Financial Analyst. Mr. Ng
completed the Advance Management Program at Harvard Business School in 1993.
The list of present and past directorships held by our Directors in the last five (5) years preceding
the Latest Practicable Date (excluding those held in our Company) are as follows:
Name Present Directorships Past Directorships
Lim Chung Chun Group Companies
• iFAST Financial Pte. Ltd.
• iFAST Nominees Pte. Ltd.
• iFAST Capital Ltd.
• iFAST Malaysia Sdn Bhd
• iFAST Capital Sdn Bhd
• iFAST Financial (HK) Limited
• iFAST Platform Services (HK)
Limited
Group Companies
Nil
Other Companies
• Accretion Investments Pte Ltd
Other Companies
• iFAST India Investments
Pte. Ltd.
• Pecuniam Pte. Ltd.
(formerly known as iFAST
International Pte Ltd)
Lim Wee Kian Group Companies
Nil
Other Companies
• Accretion Investments Pte Ltd
Group Companies
Nil
Other Companies
Nil
DIRECTORS, MANAGEMENT AND STAFF
201
Name Present Directorships Past Directorships
Low Huan Ping Group Companies
Nil
Group Companies
Nil
Other Companies
• SPH Multimedia Private Limited
• M1 Limited
• SPH AsiaOne Ltd
• Zaobao.com Ltd
• Mediacorp Press Ltd
• Mediacorp TV Holdings Pte. Ltd.
(alternate director)
• Shareinvestor.com Holdings
Pte. Ltd.
• ShareInvestor Pte. Ltd.
• SI.com (Thailand) Co Ltd
• clickTRUE Pte. Ltd.
• Kyosei Ventures Pte. Ltd.
• 701 Search Pte. Ltd.
(alternate director)
• Invest Media Pte. Ltd.
• Magzter, INC
• SPH Media Fund Pte. Ltd.
• Digi Ventures Private Limited
• CoSine Holdings Pte. Ltd.
(alternate director)
• StreetSine Singapore Pte Ltd
(alternate director)
• StreetSine Hongkong Limited
(alternate director)
Other Companies
• SPH Search Pte. Ltd.
(alternate director)
Yao Chih Matthias Group Companies
• iFAST Financial Pte. Ltd.
Other Companies
• Housing & Development Board
• Chairman of Board of Trustees
of NTUC Eldercare Trust
• Agmonton Pte. Ltd.
• E M Services Private Limited
Group Companies
Nil
Other Companies
• NTUC Income Insurance
Co-operative
• Eastpace Pte. Ltd.
DIRECTORS, MANAGEMENT AND STAFF
202
Name Present Directorships Past Directorships
Ling Peng Meng Group Companies
• iFAST Financial Pte. Ltd.
Other Companies
Nil
Group Companies
Nil
Other Companies
• Tanyong Developments
Pte. Ltd. (Struck off)
Kok Chee Wai Group Companies
• iFAST Financial Pte. Ltd.
Group Companies
Nil
Other Companies
Nil
Other Companies
Nil
Ng Loh Ken Peter Group Companies
• iFAST Financial Pte. Ltd.
Other Companies
• Peterson Asset Management
Pte Ltd
• OWW Investments III Limited
(1)
Group Companies
Nil
Other Companies
• Creative Master Bermuda
Limited
• OWW Investments V
Limited
Note:
(1) Mr. Ng Loh Ken Peter is not a shareholder of OWW Investments III Limited. He does not have any executive or
management role in OWW Investments III Limited and is not involved in its day-to-day operations.
One (1) of our Directors, Mr. Low Huan Ping, has prior and current experience as a director of a
public listed company in Singapore, and one (1) of our Directors, Mr. Ng Loh Ken Peter, has prior
experience as a director of a public listed company in Singapore, and they are familiar with the
roles and responsibilities of a director of a public listed company in Singapore. Our five (5)
remaining Directors do not have prior experience as directors of public listed companies in
Singapore but have received relevant training to familiarise themselves with the roles and
responsibilities of a director of a public listed company in Singapore.
DIRECTORS, MANAGEMENT AND STAFF
203
EXECUTIVE OFFICERS
Our CEO is assisted by a team of experienced Executive Officers who are responsible for the
various functions of our Group. The particulars of our Executive Officers are as follows:
Name Age Address Principal Occupation
Wong Soon Shyan 48 c/o 10 Collyer Quay, #26-01,
Ocean Financial Centre,
Singapore 049315
Group COO
Leung Fung Yat David 45 c/o 10 Collyer Quay, #26-01,
Ocean Financial Centre,
Singapore 049315
CFO
Lim Wee Kiong
(1)
42 c/o 10 Collyer Quay, #26-01,
Ocean Financial Centre,
Singapore 049315
General Manager, Platform
Services Singapore
Wong Sui Jau 40 c/o 10 Collyer Quay, #26-01,
Ocean Financial Centre,
Singapore 049315
General Manager,
Fundsupermart.com
Singapore
Dennis Tan Yik Kuan 36 c/o 10 Collyer Quay, #26-01,
Ocean Financial Centre,
Singapore 049315
Managing Director, iFAST
Capital Malaysia
Kelvin Yip Hok Yin 39 c/o 10 Collyer Quay, #26-01,
Ocean Financial Centre,
Singapore 049315
COO, iFAST HK
Note:
(1) Mr. Lim Wee Kiong is the brother of our Non-Executive Director, Mr. Lim Wee Kian.
Information on the business and working experience of our Executive Officers is set out below:
Mr. Wong Soon Shyan is Group COO and joined our Group in October 2000. As Group COO, Mr.
Wong is responsible for the day-to-day management of our Group. Mr. Wong is also our Chief Risk
Officer. Prior to joining our Group, Mr. Wong was with a well-known fund management company
as a manager responsible for the marketing, product development, sales administration and sales
in respect of funds from 1994 to 2000. From 1989 to 1991, Mr. Wong worked briefly as an external
auditor before joining a foreign bank as a credit analyst, and from 1992 to 1994, he worked as an
accountant. Mr. Wong graduated with a Bachelor of Accountancy from the National University of
Singapore in 1989. He is also a Chartered Financial Analyst.
Mr. Leung Fung Yat David is CFO of our Group. Mr. Leung joined our Group in August 2006 and
is responsible for our Group’s financial and accounting matters. Mr. Leung has more than 20 years
of experience in auditing, accounting, taxation and financial management. Prior to joining our
Group, Mr. Leung worked as an auditor in the Hong Kong and Singapore offices of an international
accounting firm from 1991 to 1998 and was promoted to assistant manager in 1996. From 1999
to 2006, Mr. Leung held various financial and accounting positions in companies in different
industries including, companies in the business of machinery and equipment manufacturing, the
provision of e-commerce services, investment holdings, electronics and semiconductors, retail
and the manufacture and trading of health food products. Mr. Leung graduated with a Bachelor of
Arts in Accountancy with Honours from the Hong Kong Polytechnic University in 1991 and
DIRECTORS, MANAGEMENT AND STAFF
204
obtained a Master of Business Administration from Imperial College London, United Kingdom in
2005. Mr. Leung is also a fellow member of The Association of Chartered Certified Accountants
and the Hong Kong Institute of Certified Public Accountants and is a non-practising member of the
Institute of Singapore Chartered Accountants.
Mr. Lim Wee Kiong is General Manager of Platform Services Singapore. Mr. Lim joined our Group
in April 2001 and is responsible for the overall management of our B2B Business. Prior to joining
our Group, Mr. Lim worked as a credit and marketing officer in a local bank and a product and
marketing executive at a company dealing in automation products. From 1995 to 1997, Mr. Lim
worked as an insurance agent with two (2) life insurance companies. Mr. Lim graduated with a
Bachelor of Business (Banking and Finance) from Monash University, Australia in 2000. He also
obtained a Diploma in Investment from the Institute of Banking and Finance in 1998 and a Diploma
in Computer Studies from Ngee Ann Polytechnic in 1995.
Mr. Wong Sui Jau is General Manager of Fundsupermart.com Singapore. Mr. Wong joined our
Group in October 2000. Since assuming the position of General Manager in August 2005, Mr.
Wong has been responsible for the overall management of our B2C Business. He is also in charge
of the research arm of our Group. Prior to joining our Group, Mr. Wong worked as a tax associate
and was subsequently promoted to tax senior at an international accounting firm between 1998
and 2000. Mr. Wong graduated with a Bachelor of Accountancy from the Nanyang Technological
University in 1998.
Mr. Dennis Tan Yik Kuan is Managing Director of iFAST Capital Malaysia. With over 10 years of
experience in the funds industry, Mr. Tan oversees both the B2B and B2C divisions of our business
in Malaysia. Mr. Tan joined our Company in 2002 as an IT Manager and was involved in the
development of end-user portfolio and investment software tools and applications for B2B
Customers. In 2004, he took on the position of Business Development Manager responsible for
the growth of the software division business. In 2006, Mr. Tan was promoted to Managing Director
of iFAST Service Centre Sdn Bhd and in 2007, he took on the role of Managing Director of iFAST
Capital Sdn Bhd. Mr. Tan is also the Executive Director for iFAST Malaysia Sdn Bhd and FA
Corporate and Compliance Consultancy Sdn Bhd. Prior to joining our Company, Mr. Tan was a
software engineer with a software house. He is a Computer Science graduate from University
Putra Malaysia and is a Certified Financial Planner (CFP). He has been appointed as one (1) of
two (2) Vice-Presidents of Financial Planning Association of Malaysia (FPAM) for the period of
2013 to 2015.
Mr. Kelvin Yip Hok Yin is COO of iFAST HK, a position he’s held since April 2014. FromApril 2009
to March 2014, Mr. Yip was General Manager of our B2B business in Hong Kong. Prior to joining
our Company, he was an environmental engineer in a major construction group responsible for
setting up an environmental management system for a civil engineering division as well as
managing the environmental aspects of civil and building projects on site from 2001 to 2003. From
1999 to 2001, Mr. Yip worked as an environmental representative for a global apparel group
conducting environmental audits in factories from various countries in Asia. Mr. Yip graduated with
a Bachelor of Applied Science in Bio-Resource Engineering from the University of British
Columbia, Canada in 1999. He also holds a Master of Science in Mechanical Engineering from the
Hong Kong Polytechnic University in 2004 and a Master of Business Administration degree from
the Chinese University of Hong Kong in 2006.
DIRECTORS, MANAGEMENT AND STAFF
205
The list of present and past directorships held by our Executive Officers in the last five (5) years
preceding the Latest Practicable Date (excluding those held in our Company) are as follows:
Name Present Directorships Past Directorships
Wong Soon Shyan Group Companies
• iFAST Financial Pte. Ltd.
• iFAST Nominees Pte. Ltd.
• iFAST Service Centre Sdn Bhd
• iFAST Nominees Sdn Bhd
Group Companies
• iFAST Corporation Ltd.
• iFAST Capital Sdn Bhd
(Alternate Director)
Other Companies
Nil
Other Companies
• Pecuniam Pte. Ltd.
(formerly known as iFAST
International Pte Ltd)
Leung Fung Yat David Group Companies
Nil
Group Companies
Nil
Other Companies
Nil
Other Companies
Nil
Lim Wee Kiong Group Companies
• FA Corporate and Compliance
Consultancy Pte Ltd
Group Companies
Nil
Other Companies
• Providend Holding Private
Limited
Other Companies
Nil
Wong Sui Jau Group Companies
Nil
Group Companies
Nil
Other Companies
Nil
Other Companies
• Pecuniam Pte. Ltd.
(formerly known as iFAST
International Pte Ltd)
DIRECTORS, MANAGEMENT AND STAFF
206
Name Present Directorships Past Directorships
Dennis Tan Yik Kuan Group Companies
• iFAST Service Centre Sdn Bhd
• iFAST Malaysia Sdn Bhd
• iFAST Capital Sdn Bhd
• FA Corporate and Compliance
Consultancy Sdn Bhd
• iFAST Nominees Sdn Bhd
• iFAST Platform Services
(Shenzhen) Qianhai Limited
Group Companies
Nil
Other Companies
Nil
Other Companies
Nil
Kelvin Yip Hok Yin Group Companies
• iFAST Financial (HK) Limited
• iFAST Platform Services (HK)
Limited
• iFAST Nominees (HK) Limited
Group Companies
Nil
Other Companies
• Treasure Crown Limited
Other Companies
Nil
Save as disclosed above in this section, none of our Directors and/or Executive Officers is related
to any of our Directors, Executive Officers or Substantial Shareholders.
Save as disclosed above in the section entitled “Directors, Management and Staff – Directors” of
this Prospectus, there is no arrangement or understanding with any of our Substantial
Shareholders, customers, suppliers or any other person, pursuant to which any of our Directors
or Executive Officers was appointed.
LEGAL REPRESENTATIVE
Our wholly-owned subsidiary, iFAST China, is incorporated in the PRC. Mr. Dennis Tan Yik Kuan,
the Managing Director of iFAST Capital Malaysia and one (1) of our Executive Officers is the legal
representative of iFAST China.
In accordance with PRC law, Mr. Dennis Tan Yik Kuan has the following powers in relation to all
iFAST China:
(i) to act as representative of iFAST China; and
(ii) to execute contracts on behalf of iFAST China.
DIRECTORS, MANAGEMENT AND STAFF
207
Our Board has noted that there are risks in relation to the appointment of Mr. Dennis Tan Yik Kuan
as the legal representative of iFAST China, including concentration of authority. After noting that
the articles of association of iFAST China allow its sole shareholder to, inter alia, remove the legal
representative of the respective company, the Board is of the view that there are adequate
processes and procedures in place to mitigate the risks in relation to the appointment of Mr.
Dennis Tan Yik Kuan as the legal representative of iFAST China. Our Company will monitor and
periodically review the processes and procedures in relation to the appointment and removal of
iFAST China’s legal representative and the avoidance of concentration of authority of the legal
representatives of iFAST China, to ensure their effectiveness and robustness.
DIRECTORS’ AND EXECUTIVE OFFICERS’ REMUNERATION
The compensation (which includes salary, bonus, benefits-in-kind, CPF contributions and
directors’ fees) paid or payable to our Directors and Executive Officers for services rendered to us
in all capacities for FY2012 and FY2013, as well as the estimated compensation for FY2014, were
or are as follows:
Directors FY2012
(1)
FY2013
(1)
FY2014
(1)(2)
Lim Chung Chun
(3)
A A B
Lim Wee Kian A A A
Low Huan Ping A A A
Yao Chih Matthias
(4)
N.A. N.A. A
Ling Peng Meng A A A
Kok Chee Wai
(4)
N.A. N.A. A
Ng Loh Ken Peter
(4)
N.A. N.A. A
Executive Officers
Wong Soon Shyan
(5)
A A A
Leung Fung Yat David A A A
Lim Wee Kiong A A A
Wong Sui Jau A A A
Dennis Tan Yik Kuan A A A
Kelvin Yip Hok Yin A A A
Notes:
(1) Remuneration bands:
“A”: Remuneration of less than S$250,000 per annum
“B”: Remuneration between S$250,000 and S$499,999 per annum
(2) The estimated amount of remuneration paid and to be paid for FY2014. The estimated amount for FY2014 does not
take into account the performance bonus that our CEO is entitled to receive under his Service Agreement, further
details of which are set out in the section entitled “Directors, Management and Staff – Service Agreement” in this
Prospectus.
(3) Mr. Lim Chung Chun is also our CEO.
(4) Mr. Yao Chih Matthias, Mr. Kok Chee Wai, and Mr. Ng Loh Ken Peter were each appointed as Director on 1 January
2014.
(5) Mr. Wong Soon Shyan ceased directorship on 1 January 2014 but remains as an Executive Officer in the role of
Group COO.
DIRECTORS, MANAGEMENT AND STAFF
208
Save for contributions made for our employees by our Company for CPF contributions (or
equivalent), no amounts have been set aside or accrued by our Company or our subsidiaries to
provide for pension, retirement or similar benefits for our Directors and Executive Officers.
SERVICE AGREEMENT
On 1 September 2014, our Company entered into a service agreement (the “Service Agreement”)
with our Chairman and CEO, Mr. Lim Chung Chun for an initial term of forty (40) months
commencing from 1 September 2014 (the “Initial Term”), subject to earlier termination as
provided in the Service Agreement. Upon the expiry of the Initial Term, unless either Mr. Lim
Chung Chun or the Company notifies the other party in writing at least three (3) months prior to
the last day of the Initial Term, the Service Agreement shall be renewed for a further period of
three (3) years on such terms as may be agreed to by the Remuneration Committee and Mr. Lim
Chung Chun.
During the Initial Term, either party may terminate the Service Agreement at any time by giving to
the other party six (6) months’ notice in writing or, in lieu of such notice, an amount equivalent to
six (6) months’ basic salary based on the last drawn monthly salary of Mr. Lim Chung Chun.
The employment of Mr. Lim Chung Chun may be terminated forthwith upon notice in writing to him
if he:
(a) becomes bankrupt or makes any arrangement or composition with his creditors generally;
(b) is convicted of any criminal offence (save for an offence under any road traffic legislation for
which he is not sentenced to any term of immediate or suspended imprisonment) and
sentenced to any term of immediate or suspended imprisonment;
(c) is or may be suffering from a mental disorder; or
(d) by reason of ill health or injury caused by his own default becomes unable to perform any of
his duties under the Service Agreement for a period of 120 days or more.
We may also terminate the employment of Mr. Lim Chung Chun forthwith without any notice or
payment in lieu of notice if, in the reasonable opinion of the Board, he:
(a) is guilty of any wilful misconduct in the discharge of his duties as set out in the Service
Agreement; or
(b) breaches any material provision of the Service Agreement.
We may also terminate the employment of Mr. Lim Chung Chun forthwith upon notice, without
prejudice to any remedy which we may have against him for the breach or non-performance of any
of the provisions of the Service Agreement if he:
(a) commits any act that is reported in general or trade press or otherwise achieves general
notoriety which involves conduct that is likely to be regarded as illegal, immoral or
scandalous and which, in the reasonable opinion of the Board is likely to discredit Mr. Lim
Chung Chun to a degree which materially reduces the value of his services to our Group or
may discredit our Group through association with him; or
(b) is in the reasonable opinion of the Board, incompetent in the performance of his duties.
DIRECTORS, MANAGEMENT AND STAFF
209
Pursuant to the terms of his Service Agreement, Mr. Lim Chung Chun is entitled to a monthly basic
salary of S$20,000 per calendar month payable in arrear on the last working day of every month
(the “Basic Salary”) adjustable as follows:
(a) when the profit after tax and minority interests of our Group, for any financial year is more
than S$12,000,000, the Basic Salary will be adjusted to S$25,000 beginning from the month
immediately following the end of such financial year; and
(b) should any subsequent profit after tax and minority interests of our Group, for any financial
year fall below S$12,000,000, the Basic Salary will revert back to S$20,000 beginning from
the month immediately following the end of such financial year.
Mr. Lim Chung Chun is also entitled to an annual profit sharing bonus (the “Profit Sharing
Bonus”, and together with the Basic Salary, the “Salary”) in respect of each financial year
commencing from and including FY2014, which is calculated based on the consolidated profit
before tax, excluding extraordinary items, non-recurring items, minority interests and inter-
company transactions within our Group (the “PBTC”) (before deducting for such Profit Sharing
Bonus) of our Group as follows:
PBTC of our Group Profit Sharing Bonus
Amount up to S$8,000,000 No Profit Sharing Bonus
Amount in excess of S$8,000,000 S$75,000 plus 3.5 per cent. of the PBTC in
excess of S$8,000,000 for that financial year
For the sole purpose of illustration, assuming that the PBTC of our Group (before deducting for
the Profit Sharing Bonus) is S$12,000,000, the Profit Sharing Bonus to be received Mr. Lim Chung
Chun will be S$215,000, being the sum of (i) S$75,000 and (ii) 3.5% of S$4,000,000.
The Profit Sharing Bonus may be paid in the form of cash, share options or performance shares
in accordance with the prevailing scheme to be determined by our Remuneration Committee. The
full payment of the Profit Sharing Bonus will be subject to the compliance and fair dealing KPI
scorecard determined and agreed by our Remuneration Committee and Mr. Lim Chung Chun. Our
Remuneration Committee is currently discussing the details of the KPI scorecard, which will be
finalised prior to the payment of the Profit Sharing Bonus. For the avoidance of doubt, the Profit
Sharing Bonus sets out the maximum bonus payable. Our Remuneration Committee will further
review the performance of Mr. Lim Chung Chun based on the KPI scorecard, which may result in
a reduction of the Profit Sharing Bonus paid based on factors such as compliance and fair dealing
considerations.
Our Remuneration Committee will review the KPI scorecard annually and when necessary, and
the KPI scorecard will be updated to take into account the then-existing operating conditions and
regulatory landscape. Any changes to the KPI scorecard will be determined and agreed by our
Remuneration Committee and Mr. Lim Chung Chun.
To ensure that the total annual compensation, while remaining competitive, contains necessary
safeguards against excessive compensation, the profit sharing bonus formula will be reviewed in
January 2017.
DIRECTORS, MANAGEMENT AND STAFF
210
Mr. Lim Chung Chun is also entitled to such other payments, allowances or benefits as may be
determined at the absolute discretion of the Board (as recommended by the Remuneration
Committee).
All travelling and travel-related expenses, entertainment expenses and other out-of-pocket
expenses reasonably incurred by Mr. Lim Chung Chun in the process of discharging his duties on
behalf of our Group, will be borne by us, subject to any vouchers or other evidence of actual
payment of such expenses we may require Mr. Lim Chung Chun to provide.
Mr. Lim Chung Chun has agreed, among other things, in his Service Agreement that he will not
during his employment with our Company and for a period of twelve (12) months after the
termination of his employment with our Company, in all territories where we or any Group
Company operates directly or indirectly, except with our prior written consent:
(a) either on his own account or for any other person directly or indirectly solicit, interfere with
or endeavour to entice away from any Group Company any person who to his knowledge is
now or has been a client, customer or employee of, or in the habit of dealing with, any Group
Company;
(b) save for his current interests either alone or jointly with or as a manager, agent for or
employee of any person, directly or indirectly carry on or be engaged or concerned or
interested in any business which shall be in competition with the business carried on by any
Group Company as at the date hereof or as at the time of cessation of employment (as the
case may be) (the “Relevant Business”);
(c) act as a director or otherwise of any other person, firm or company engaging directly or
indirectly in the Relevant Business which is in competition with the business of any Group
Company; and
(d) cause or permit any person or entity directly or indirectly under his control or in which he has
any beneficial interests to do any of the foregoing acts or things.
Had the Service Agreement been in effect from the beginning of FY2013, the Profit Sharing Bonus
would have been approximately S$84,000, and our Group’s audited consolidated profit
attributable to owners of our Company from continuing operations for FY2013 would have been
approximately S$8,433,000, and our basic EPS based on the pre-Offering share capital of
204,425,334 Shares would have been 4.13 cents.
Saved as disclosed above, there are no existing or proposed service agreements entered or to be
entered into by our Directors with our Company or any of our Group Companies. There is also no
existing or proposed service contract entered or to be entered into by our Directors with our
Company or any of our Group Companies which provide for benefits upon termination of
employment.
DIRECTORS, MANAGEMENT AND STAFF
211
OUR EMPLOYEES
As at the Latest Practicable Date, we have 240 full-time employees. A breakdown of our full-time
staff by job functions and geographic locations as at 31 December 2011, 31 December 2012,
31 December 2013 and as at the Latest Practicable Date is as follows:
As at 31 December
As at the Latest
Practicable Date Job Function 2011 2012 2013
Management 10 12 13 14
B2B Business 45 36 36 41
B2C Business 47 44 39 41
Information Technology 38 25 31 47
Operations and Settlement 57 53 56 56
Finance, Human Resources,
Legal and Compliance 32 30 35 41
Total 229 200 210 240
As at 31 December
As at the Latest
Practicable Date Geographic Location 2011 2012 2013
Singapore 99 91 94 103
Malaysia 79 63 69 73
Hong Kong 51 46 47 52
China – – – 12
Total 229 200 210 240
The decrease in the number of employees from 229 as at 31 December 2011 to 200 as at 31
December 2012 is due to natural attrition. We do not employ a significant number of temporary
staff and do not experience any significant seasonal fluctuation in the number of employees. All
our employees in our Group are not unionised. We believe that the relationship and cooperation
between our management and employees have been good and this is expected to continue. There
has not been any incidence of work stoppages or labour disputes. Except for CPF contributions
in Singapore, Employee’s Provident Fund in Malaysia, Mandatory Provident Fund in Hong Kong,
and social insurance and housing fund in PRC, we have not set aside or accrued any amounts for
our employees to provide for pension, retirement or similar benefits.
STAFF TRAINING
We are guided by the principle that training enhances our staff’s work competencies. Our staff
training is an ongoing process and comprises both in-house and external training. Our training
often ties in with government training and skills upgrading initiatives for the purpose of cost
effectiveness.
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In-house Training
Our new staff are trained on-the-job by our senior managers. We expect all our staff to take on the
role of a trainer as they become proficient in their work and to provide guidance to new staff and
staff covering their work in their absence. We believe that placing the responsibility on our staff
to serve as a trainer in their respective capacities provides them with a push to master their work
and helps them develop their confidence and encourages them to take on leadership positions.
We believe that giving our staff the opportunity to gain experience internally helps ensure that we
are constantly staffed with able people.
External Training
We are supportive of our staff in their pursuits for self-enrichment through courses that will add
value to their work.
Being in the financial industry, our staff are encouraged to enhance and validate their financial
knowledge and foundation through the achievement of professional certifications such as Certified
Financial Planner, Associate Financial Planner, or Chartered Financial Analyst. They also attend
short-term courses, seminars and conferences to ensure that they are equipped with industry
updates, knowledge and best practices which are relevant to their area of work.
The amount of expenditure on staff training for the Period under Review and up to the Latest
Practicable Date as a percentage of our Group’s revenue was insignificant.
Please refer to the section entitled “Our Business – Regulatory Compliance” of this Prospectus for
further details of our staff training.
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Our Directors recognise the importance of good corporate governance and the offering of high
standards of accountability to our Shareholders. Our Board of Directors has formed four (4)
committees: (i) the Audit Committee, (ii) the Remuneration Committee, (iii) the Nominating
Committee, and (iv) the Risk Committee.
Mr. Yao Chih Matthias is our Lead Independent Director. As the Lead Independent Director, he is
the contact person for our Shareholders where there are concerns or issues which remain
unresolved despite communication with our Chairman and CEO, Mr. Lim Chung Chun or where
such communication is inappropriate.
The overall management is overseen by our CEO, Mr. Lim Chung Chun, who is also our Chairman.
Our business and operations are presently under the management and close supervision of Mr.
Lim Chung Chun who is assisted by a team of Executive Officers.
AUDIT COMMITTEE
Our Audit Committee comprises Mr. Ng Loh Ken Peter, Mr. Kok Chee Wai, and Mr. Yao Chih
Matthias. Our Audit Committee is chaired by Mr. Ng Loh Ken Peter.
Our Audit Committee will meet at least four (4) times a year (to coincide with key dates in the
company’s financial reporting cycle) to discuss and carry out the duties set out below.
(i) Overseeing financial reporting by:
(a) monitoring the integrity of the financial information provided by our Company, in
particular by reviewing the relevance and consistency of the accounting standards used
by our Company (i.e. entity level) and our Group (i.e. consolidation level);
(b) assessing and challenging, where necessary, the correctness, completeness, and
consistency of financial information (including interim reports) before submission to the
Board for approval or made public;
(c) paying particular attention to critical accounting policies and practices, and any
changes in them, decisions requiring a significant element of judgment, the extent to
which the financial statements are affected by any unusual transactions in the year and
how they are disclosed, clarity of disclosures, significant adjustments resulting from the
audit, going concern assumption, compliance with stock exchange and other legal
requirements, significant financial reporting issues with both executive management
and the external auditor, and other topics at the request of the Board; and
(d) reviewing and approving any policies related to hedging (if any) including but not limited
to reviewing and approving the measures put in place and monitoring the
implementation of the hedging policies, including reviewing the instruments, processes
and practices in accordance with the approved hedging policies.
(ii) Overseeing internal control (including risk management if delegated by the Board) by:
(a) assessing the effectiveness of the internal control (including risk management) systems
established by management to identify, assess, manage, and disclose financial and
non-financial risks (including those relating to compliances with existing legislation and
regulation) at least once a year;
(b) coordinating with the Risk Committee on its oversight of financial reporting matters;
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(c) reviewing the statements included in the annual report on our Company’s internal
controls and risk management framework (if delegated by the Board);
(d) reviewing management’s and the internal auditors’ reports on the effectiveness of the
systems for internal control, financial reporting, and risk management; and
(e) reviewing (jointly with the Risk Committee) our Company’s procedures for detecting
fraud and whistle-blowing, and ensuring that arrangements are in place by which staff
may, in confidence, raise concerns about possible improprieties in matters of financial
reporting, financial control, or any other matters.
(iii) Overseeing internal and external audit processes by:
Internal Audit
(a) monitoring and assessing the role and effectiveness of the internal audit function in the
overall context of the company’s risk management system;
(b) reviewing the Group’s compliance with regulatory rules;
(c) ensuring that the internal audit function is adequately resourced and skilled in line with
our Company’s nature, size, and complexity;
(d) ensuring an adequate budget is allocated to the internal audit function, assuring its
proper functioning;
(e) reviewing the internal audit program with regard to the complementary roles of the
internal and external audit functions;
(f) receiving the internal audit reports or a periodic summary thereof;
(g) receiving a report on the results of the internal auditors’ work on a periodic basis;
(h) reviewing and monitoring management’s responsiveness to the internal auditor’s
findings and recommendations;
(i) ensuring that the head of internal audit has direct and unrestricted access to the
Chairman of the Board and the Audit Committee;
(j) participating in the selection and approving the appointment or dismissal of the head of
internal audit; and
(k) assessing the performance and determining the remuneration of the head of internal
audit, within our Company’s guidelines.
External Audit
(a) overseeing our Company’s relations with external auditor(s);
(b) in connection with the terms of engagement of the external auditor(s), to make
recommendations to the Board on the selection, appointment, reappointment, and
resignation of the external auditor(s) based upon a thorough assessment of the external
auditor(s)’ functioning with such proposal to be submitted to the general meeting of
shareholders for approval;
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(c) reviewing the Group’s audit plan;
(d) reviewing the external audit fees and recommending it for approval by the Board;
(e) monitoring and assessing the external auditor(s)’ independence by seeking
reassurance that the auditors and their staff have no family, financial, employment,
investment, or business relationship with our Group (other than in the normal course of
business), based on a forwarded report by the external auditor(s), seeking from the
audit firm, on an annual basis, information about policies and processes for maintaining
independence and monitoring the external auditor(s)’ compliance with relevant
regulatory requirements (e.g. audit partner rotation requirements, level of fees our
Company pays in proportion to the overall income of the firm, etc.), and agreeing with
the Board and monitoring our Company’s policy for the employment of former
employees of external auditor;
(f) keeping the nature and extent of non-audit services provided by the external auditor(s)
under review to ensure the external auditor’s independence or objectivity is not
impaired by setting and applying a formal policy specifying the types of non-audit
services: (A) from which the external auditors are excluded; (B) for which the external
auditors can be engaged without referral to the Audit Committee; (C) for which a
case-by-case decision is necessary by the Audit Committee, considering whether the
skills and experience of the audit firm make it a suitable supplier of the non-audit
services, ensuring safeguards are in place to provide assurance that the external
auditor’s objectivity and independence is not impaired when performing non-audit
services, and considering the nature of the non-audit service and the related fee levels
(both individually and in aggregate) relative to the audit fee;
(g) assessing, at the end of the audit cycle, the effectiveness of the audit process by
reviewing the external auditor’s findings arising from the audit (including any issues that
have subsequently been resolved), giving particular considerations to the key
accounting and audit judgments (including why certain errors might remain unadjusted),
the level of errors identified during the audit, and the obtained explanation from
management, reviewing whether the auditor has met the agreed audit plan, and
understanding the reasons for any changes, including changes in perceived audit risks,
and the work undertaken by the external auditors to address those risks, assessing the
accuracy of the auditors in their handling of the key accounting and identified audit
judgments, their responding to questions from the Audit Committee, and their
commentary on the systems of internal control, and obtaining feedback about the
conduct of the audit from the key people involved;
(h) discussing with external auditors in respect of any issues regarding fraud and
irregularities;
(i) reviewing the audit representation letters before consideration by the Board, giving
particular consideration to matters that relate to non-standard issues;
(j) reviewing the content of the external auditor’s management letter in order to assess
whether it is based on a good understanding of our Company’s business, and monitor
the responsiveness of management to the recommendations made (or the reasons why
they have not been acted upon); and
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(k) ensuring that the external auditors have direct and unrestricted access to the Chairman
of the Audit Committee and the Chairman of the Board.
(iv) Overseeing interested persons transactions by:
(a) reviewing any potential conflicts of interest, including monitoring undertakings by any
interested person(s);
(b) reviewing interested persons transactions to consider whether they are on normal
commercial terms and are not prejudicial to the interests of our Company or its minority
shareholders;
(c) considering the need for a general mandate for interested persons transactions;
(d) appointing an independent FA to advise on a general mandate;
(e) where a general mandate is being renewed, considering whether the methods or
procedures for determining the transaction prices are sufficient to ensure that the
transactions will be carried out on normal commercial terms and will not be prejudicial
to the interests of the issuer and its minority shareholders;
(f) requiring direct management to present the rationale, cost-benefit analysis and other
details relating to interested persons transactions subject to a specific mandate;
(g) considering the need from independent advisers to advise on interested persons
transactions subject to specific mandates;
(h) receiving reports from management and independent advisers on interested persons
transactions;
(i) reporting to minority shareholders on its recommendations on general and specific
mandates;
(j) reviewing on a periodic basis the framework and processes established for the
implementation of the terms of the ROFR (as defined in the section entitled “Interested
Person Transactions and Conflict of Interests – Potential Conflict of Interest –
Discontinued India Operations”) and the Non-Compete Undertaking (as defined in the
section entitled “Interested Person Transactions and Conflict of Interests – Potential
Conflicts of Interest – Discontinued India Operations”) in order to ensure that such
framework and processes remain appropriate;
(k) reviewing and assessing from time to time whether additional processes are required to
be put in place to manage any material conflicts of interest with our Directors,
Controlling Shareholders and their respective associates and propose, where
appropriate, the relevant measures for the management of such conflicts; and
(l) reviewing and proposing, where appropriate, the relevant measures for the
management of all conflicts of interest matters referred to it.
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Audit Committee’s Opinion of our CFO
Mr. Leung Fung Yat David has served as our Group’s Financial Controller since August 2006 when
he joined our Group and as Group Financial Controller in January 2010 after re-designation of his
role. Mr. Leung Fung Yat David was appointed as our CFO on 1 July 2014. In considering the
suitability of Mr. Leung Fung Yat David as our CFO, our Audit Committee has considered his
qualifications and past working experience and his years of service with our Group (as described
in the section entitled “Directors, Management and Staff – Executive Officers” of this Prospectus)
and has noted his abilities, familiarity and diligence in relation to financial matters and information
of our Group. In addition, our Audit Committee has also interacted with Mr. Leung Fung Yat David
in his capacity as Financial Controller and as CFO and with other members of our Group’s finance
team, held discussions with our Group’s external auditors and considered the views of and
feedback from the executive management team of our Group.
Based on the foregoing, our Audit Committee is satisfied and is of the opinion that Mr. Leung Fung
Yat David has the relevant knowledge, expertise and experience to be appointed as the 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 to cause them to believe that Mr.
Leung Fung Yat David does not have the competence, character and integrity expected of a chief
financial officer of a company listed on the SGX-ST.
Internal Controls
Notwithstanding the duties of the Audit Committee, the Board retains the responsibility for the
review of the effectiveness of the system of internal control, and must form its own opinion despite
aspects of internal control review being delegated to the Audit Committee.
Based on the internal controls established and maintained by our Group, work performed by the
internal and external auditors, and reviews performed by the management, various Board
Committees and the Board, the Audit Committee and our Board are of the opinion that our Group’s
internal controls adequately address financial, operational and compliance risks. Our Board notes
that all internal controls systems contain inherent limitations and no system of internal controls
can provide absolute assurance against the occurrence of material errors, poor judgement in
decision making, human error, losses, fraud or other irregularities.
REMUNERATION COMMITTEE
Our Remuneration Committee comprises Mr. Yao Chih Matthias, Mr. Ling Peng Meng, and Mr. Low
Huan Ping. Our Remuneration Committee is chaired by Mr. Yao Chih Matthias.
Our Remuneration Committee will review, recommend to our Board for approval, and where
authority is delegated by the Board, approve the remuneration of our Company’s directors, senior
management and employees.
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Our Remuneration Committee will meet at least twice a year and otherwise as required to properly
discharge its duties as set out below:
(i) Taking into account remuneration principles, practices and standards that may be specified
by MAS from time to time, make recommendations to the Board on:
(a) the remuneration, including salaries, allowances, bonuses and incentives to be
awarded against the achievement of prescribed goals and targets for our CEO and each
executive director, if any, to ensure its alignment with shareholders’ and stakeholders’
interest and long-term value creation for our Company, if any
(b) the compensation arrangements for the loss or termination of office, or dismissal or
removal of the CEO and each executive director;
(c) the framework and policies for determining non-executive directors’ remuneration; and
(d) the specific remuneration packages for each director.
(ii) In determining such policy, taking into account all factors which it deems necessary including
relevant legal and regulatory requirements, the provisions and recommendations of the
Singapore Corporate Governance Code and MAS guidance. The objective of such policy
shall be to ensure that the members of the executive management of the company are
provided with appropriate incentives to encourage performance and are, in a fair and
responsible manner, rewarded for their individual contributions to the success of our
Company.
(iii) When setting remuneration policy for the directors, review and have regard to the
remunerations trends across our Company and our Group.
(iv) Review the ongoing appropriateness and relevance of the remuneration policy and seek to
ensure that the remuneration policies are in line with the strategic objectives and corporate
values of our Company, and do not give rise to conflicts between the objectives of our
Company and the interests of individual directors and senior management.
(v) Be exclusively responsible for establishing the selection criteria, selecting, appointing and
setting the terms of reference for any remuneration consultants who advise the committee.
(vi) Review the design of all share incentive plans for approval by the board and shareholders.
For any such plans, determine each year whether awards will be made, and if so, the overall
amount of such awards, the individual awards to senior executives and the performance
targets to be used.
(vii) Oversee any major changes in employee benefits structures throughout our Company or our
Group.
(viii) Seek inputs from board risk committee and ensure that remuneration practices do not create
incentives for excessive or inappropriate risk-taking behaviour.
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NOMINATING COMMITTEE
Our Nominating Committee comprises Mr. Ling Peng Meng, Mr. Ng Loh Ken Peter, and Mr. Lim
Chung Chun. Our Nominating Committee is chaired by Mr. Ling Peng Meng.
Mr. Yao Chih Matthias, our Lead Independent Director is not a member of the Nominating
Committee as he is already a member of the other three (3) sub-committees, and is a Chairman
of two (2) of the sub-committees. In the interest of ensuring that we do not have an
over-concentration of responsibilities on any one (1) of the board members, the Board is of the
opinion that for now, the Lead Independent Director does not have to be a member of the
Nominating Committee.
Our Directors do not have fixed terms of office. At each annual general meeting, one-third of the
Directors for the time being (or, if their number is not a multiple of three (3), the number nearest
to but not less than one-third) shall retire from office by rotation. The Directors to retire in every
year shall be those who have been longest in office since their last re-election or appointment. All
Directors shall retire from office at least once every three (3) years. A retiring Director shall be
eligible to stand for re-election.
Our Nominating Committee is accountable to the Board for the selection of new directors,
succession planning for the Board and the CEO and the effectiveness of our Company’s corporate
governance framework and policies, including the board evaluation process.
The Nominating Committee has been set up to take the responsibility for the following:
(a) identify candidates and review all nominations for the approval of the Board, for the
appointment, reappointment or termination of directors, the CEO, and the members of the
various Board Committees;
(b) make recommendations to our Board on the matters described in (a) above, how the Board’s
performance may be evaluated and propose objective performance criteria and the
succession plan for the CEO;
(c) review the succession plan for the CEO, the results of the Board’s performance evaluation
and the actions taken on issues and matters arising from the Board’s performance
evaluation; and
(d) develop a process for evaluation of the performance of the Board, its committees and
Directors.
The criteria for identifying candidates and reviewing nominations for the appointments referred to
in the above paragraph shall include the following:
(i) the Board shall comprise at least a majority of directors independent from management and
business relationships with the Company;
(ii) at least half of the Board shall be independent directors when the Chairman and the CEO is
the same person, otherwise at least one-third of directors shall be independent directors; and
(iii) at least a majority of directors shall be independent from any shareholder who holds a 10%
or more interest in the Company.
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When assessing a candidate, the Nominating Committee shall, in addition to the fit and proper
criteria set out in the Code of Corporate Governance, consider the candidate’s track record, age,
experience, and capabilities.
Nominating Committee’s view of our Independent Directors
The Nominating Committee, having taken into consideration the following:
(i) the number of listed company directorships by each of our Independent Directors;
(ii) the principal commitments of our Independent Directors;
(iii) the confirmations by our Independent Directors stating that they are each able to devote
sufficient time and attention to the matters of our Company;
(iv) the confirmations by our Independent Directors that each of them is not accustomed or under
an obligation, whether formal or informal, to act in accordance with the directions,
instructions or wishes of any Controlling Shareholder, has no relationship with our Company,
its related corporations or with any directors of these corporations, any of its Shareholders
who each holds a 10% or more interest in the Company or its officers that could interfere or
be reasonably perceived to interfere, with the exercise of his or her independent business
judgment with a view to the best interests of our Company;
(v) our Independent Directors’ working experience and expertise in different areas of
specialisation; and
(vi) the composition of our Board,
is of the view that (a) each of our Independent Directors is individually and collectively able to
devote sufficient time to the discharge of their duties and are suitable and possess relevant
experience as Independent Directors of our Company and (b) our Independent Directors, as a
whole, represent a strong and independent element on our Board which is able to exercise
objective judgment on corporate affairs independently from the Controlling Shareholders.
DBS Bank is the principal banker of our Group, a Joint Issue Manager, Bookrunner and
Underwriter and a placement agent of the Offering. Notwithstanding the aforementioned business
relationships between our Group and DBS Bank, our Nominating Committee and our Directors
(save for Mr. Ling Peng Meng) consider Mr. Ling Peng Meng to be independent for the purposes
of the Code of Corporate Governance.
RISK COMMITTEE
Our Risk Committee comprises Mr. Yao Chih Matthias, Mr. Low Huan Ping, Mr. Kok Chee Wai, Mr.
Ng Loh Ken Peter, and Mr. Lim Chung Chun. Our Risk Committee is chaired by Mr. Yao Chih
Matthias.
The Risk Committee was established to assist our Board in discharging its duties to shareholders
on risk management, and to help improve our Board’s monitoring of the risk management system,
framework and processes of our Company and Group.
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The Risk Committee, which has written terms of reference approved by our Board, meets at least
twice per year or as and when circumstances or events merit it and performs the following
functions:
(i) advise our Board on our Company’s overall risk exposure and strategy;
(ii) oversee and advise our Board on the current risk exposures and future risk strategy of our
Company;
(iii) in relation to risk assessment
(a) keep under review our Company‘s overall risk assessment processes that inform our
Board‘s decision making;
(b) review regularly and approve the parameters used in these measures and the
methodology adopted; and
(c) set a process for the accurate and timely monitoring of large exposures and certain risk
types of critical importance;
(iv) review our Company‘s capability to identify and manage new risk types;
(v) before a decision to proceed is taken by our Board, advise our Board on proposed strategic
transactions, focusing in particular on risk aspects and implications for the risk tolerance of
our Company, and taking independent external advice where appropriate and available;
(vi) review reports on any material breaches of risk limits and the adequacy of proposed action;
(vii) keep under review the effectiveness of our Company‘s internal controls and risk
management systems and review and approve the statements to be included in the annual
report concerning the effectiveness of our Company‘s internal control and risk management
systems;
(viii) provide advice to the Remuneration Committee on risk weightings to be applied to
performance objectives incorporated in executive remuneration;
(ix) review (jointly with the Audit Committee) our Company’s procedures for detecting fraud,
including the whistleblowing policy (if any). The Risk Committee shall ensure that these
arrangements allow proportionate and independent investigation of such matters and
appropriate follow up action;
(x) monitor the independence of risk management functions throughout the organisation;
(xi) review promptly all relevant risk reports on our Company; and
(xii) review and monitor management’s responsiveness to the Risk Committee’s findings.
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CORPORATE SOCIAL RESPONSIBILITY
Over the years, our Group has organised seminars for investors to promote investment education
and knowledge. Our Group has also been supportive of various sports-related initiatives.
In Hong Kong, iFAST HK was the title sponsor for the “iFAST Metro Race 2013”, a race organised
to support the cause of social inclusion and in the spirit of contributing to the society. With the
Unleash Foundation appointed as the beneficiary organisation, all charitable proceeds raised from
the race will be channelled towards the Unleash Foundation’s education projects benefitting
physically-challenged youths. The “iFAST Metro Race 2014” held on 7 November 2014.
Our Group has also been a supporter of Oxfam Trailwalker events. Our employees travelled to
Sydney in 2013 and Hong Kong in 2011 and 2012 to complete a 100km trek within 48 hours in
teams of four (4). Oxfam aims to raise funds to alleviate poverty and injustice and it is held across
different countries each year.
In Singapore, for two (2) consecutive years in 2012 and 2013, iGP, a division of iFAST Financial,
was the title sponsor of iFAST Singapore Corporate Karting Challenge, in a bid to promote the
sport to the wealth management industry players in Singapore.
Our Group has been recognised for our focus on improving the well-being of our employees. In
2014, iFAST HK was awarded the Caring Company Logo 2013/14 by the Hong Kong Council of
Social Service, in recognition for its commitment in Caring for the Community, Caring for the
Employees and Caring for the Environment over the past year.
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On 21 October 2014, our Shareholders approved a share scheme which is known as the iFAST
Corporation Performance Share Plan (the “iFAST PSP”), the rules of which are set out in Appendix
F of this Prospectus. The iFAST PSP complies with the relevant rules as set out in Chapter 8 of
the Listing Manual.
The iFAST PSP 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 iFAST PSP, which forms an integral and important component of a compensation plan,
is designed to primarily reward and retain executive directors, non-executive directors and
employees whose services are vital to our well-being and success.
The iFAST PSP shall be administered by our Remuneration Committee. As at the Latest
Practicable Date, no Awards have been granted under the iFAST PSP.
Rationale for the iFAST PSP
The iFAST PSP allows our Company to target specific performance objectives and to provide an
incentive for participants to achieve these targets. Our Directors believe that the plan will provide
our Company with a flexible approach to provide performance incentives to our staff and
non-executive directors and, consequently, to improve performance and achieve sustainable
growth for our Company in the changing business environment, and to foster a greater ownership
culture amongst key senior management, senior executives and non-executive directors.
Unlike the options granted under the iFAST ESOS (as detailed in the section entitled “iFAST
ESOS”), the iFAST PSP is designed to reward eligible participants with Awards comprising fully
paid Shares, or the equivalent in cash or a combination of both. The reason for having the iFAST
PSP in addition to the iFAST ESOS is to give our Company greater flexibility in structuring the
compensation packages of eligible participants and providing an additional tool to motivate and
retain staff members through the offering of compensation packages that are market competitive.
Share Awards under the iFAST PSP
Awards granted under the iFAST PSP are principally performance-based with performance targets
to be set over a performance period and may vary from one (1) performance period to another
performance period and from one (1) grant to another grant. The performance targets are intended
to be based on medium-term corporate objectives covering market competitiveness, quality of
returns, business growth and productivity growth. Such performance targets and performance
periods will be set according to the specific roles of each participant, and may differ from
participant to participant. The performance targets are stretched targets aimed at sustaining
long-term growth. These targets will be tied in with our Company’s corporate key performance
indicators.
The iFAST PSP uses methods fairly common among major local and multinational companies to
incentivise and motivate senior executives and key senior management to achieve predetermined
targets which create and enhance economic value for Shareholders. Our Company believes that
the iFAST PSP will be an effective tool in motivating senior executives, key senior management
and non-executive directors to work towards stretched goals.
The iFAST PSP contemplates the award of fully paid Shares, when and after pre-determined
performance or service conditions are accomplished.
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A participant’s award under the iFAST PSP will be determined at the sole discretion of our
Remuneration Committee. In considering an award to be granted to a participant who is an
employee, our Remuneration Committee may take into account, inter alia, the participant’s
capability, creativity, entrepreneurship, innovativeness, scope of responsibility and skills set. In
considering an award to be granted to a participant who is a non-executive director, our
Remuneration Committee may take into account, inter alia, the services and contributions made
to the growth of our Group, attendance and participation in meetings and the years of service.
Currently, it is envisaged that directors and employees of our Group may be granted awards under
the iFAST PSP.
Under the iFAST PSP, participants are encouraged to continue serving our Group beyond the
achievement date of the pre-determined performance targets. Our Remuneration Committee has
the discretion to impose a further vesting period after the performance period to encourage the
participant to continue serving our Group for a further period of time.
Maximum Limits on Shares
In order to reduce the dilutive impact of the iFAST PSP, the maximum number of Shares issuable
or to be transferred by our Company under the iFAST PSP, when aggregated with the aggregate
number of Shares over which options or awards are granted under any other share option
schemes or share schemes of our Company, will be 15% of our Company’s total number of issued
Shares (excluding Shares held by our Company as treasury shares) from time to time.
Summary of iFAST PSP
A summary of the rules of the iFAST PSP is set out as follows:
1. Eligibility
Executive directors and confirmed employees of our Group and our associated companies
who have attained the age of twenty-one (21) years as of the award date, and who hold such
rank as may be designated by our Remuneration Committee from time to time, and
non-executive directors (including our Independent Directors) of our Group, shall be eligible
to participate in the iFAST PSP. For this purpose, a company is our “associated company” if
we and/or our subsidiaries hold at least 20% but not more than 50% of the issued shares in
that company and provided our Company has control (as defined in the Listing Manual) over
the associated company. Our Company does not have control over our associated company,
Providend.
Controlling Shareholders and their Associates who meet the criteria as set out above are
eligible to participate in the iFAST PSP, provided that the participation of each Controlling
Shareholder or his Associate and each grant of an Award to any of them may only be effected
with the specific prior approval of independent Shareholders in general meeting by a
separate resolution.
2. Awards
Awards represent the right of a participant to receive fully paid Shares free of charge,
provided that certain prescribed performance targets (if any) are met and upon expiry of the
prescribed performance period.
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Shares which are allotted and issued or transferred to a participant pursuant to the release
of an award shall not be transferred, charged, assigned, pledged or otherwise disposed of,
in whole or in part, during a specified period (as prescribed by our Remuneration Committee
in the award letter), except to the extent approved by our Remuneration Committee.
3. Participants
The selection of a participant and the number of Shares (which are the subject of each
award) to be granted to a participant in accordance with the iFAST PSP shall be determined
at the absolute discretion of our Remuneration Committee, which shall take into account
criteria such as his rank, job performance, creativity, innovativeness, entrepreneurship,
years of service and potential for future development, his contribution to the success and
development of our Group and, if applicable, the extent of effort and resourcefulness
required to achieve the performance target(s) within the performance period.
4. Details of awards
Our Remuneration Committee shall decide, in relation to each award to be granted to a
participant:
(a) the date on which the award is to be granted;
(b) the number of Shares which are the subject of the award;
(c) the performance target(s) and the performance period during which such performance
target(s) are to be satisfied, if any;
(d) the extent to which Shares, which are the subject of that award, shall be released on
each prescribed performance target(s) being satisfied (whether fully or partially) or
exceeded or not being satisfied, as the case may be, at the end of the performance
period; and
(e) any other condition which our Remuneration Committee may determine in relation to
that award including but not limited to the vesting period (if any).
5. Timing
While our Remuneration Committee has the discretion to grant awards at any time in the
year, it is currently anticipated that awards would in general be made once a year. An award
letter confirming the award and specifying (inter alia) the number of Shares which are the
subject of the award, the prescribed performance target(s), the performance period during
which the prescribed performance target(s) are to be attained or fulfilled and the schedule
setting out the extent to which Shares will be released on satisfaction of the prescribed
performance target(s), will be sent to each participant as soon as reasonably practicable
after the making of an award.
Our 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 our Remuneration Committee
decides that a participant deserves for meeting his performance targets.
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6. Events Prior to Vesting
Special provisions for the vesting and lapsing of awards apply in certain circumstances
including the following:
(i) the misconduct on the part of a participant as determined by our Remuneration
Committee in its discretion;
(ii) the participant ceasing to be in the employment of our Group for any reason whatsoever
(other than as specified in paragraph (v) below);
(iii) an order being made or a resolution passed for the winding-up of our Company on the
basis, or by reason, of its insolvency;
(iv) the bankruptcy of a participant or the happening of any other event which results in his
being deprived of the legal or beneficial ownership of the award;
(v) the participant ceases to be in the employment of our Group by reason of:
(1) ill health, injury or disability (in each case, evidenced to the satisfaction of our
Remuneration Committee);
(2) redundancy;
(3) retirement at or after the legal retirement age;
(4) retirement before the legal retirement age with the consent of our Remuneration
Committee;
(5) the company by which he is employed or to which he is seconded, as the case may
be, ceasing to be a company within our Group, or the undertaking or part of the
undertaking of such company being transferred otherwise than to another
company within our Group, as the case may be;
(6) any other event approved by our Remuneration Committee;
(vi) any other event approved by our Remuneration Committee; or
(vii) a take-over, reconstruction or amalgamation of our Company or an order being made or
a resolution passed for the winding-up of our Company (other than as provided in
paragraph (iii) above or for amalgamation or reconstruction).
Upon the occurrence of any of the events specified in paragraphs (i), (ii) and (iii), an award
then held by a participant shall, subject as provided in the rules of the iFAST PSP and to the
extent not yet released, immediately lapse without any claim whatsoever against our
Company.
Upon the occurrence of any of the events specified in paragraphs (iv), (v) and (vi) above, our
Remuneration Committee may, in its absolute discretion, preserve all or any part of any
award and decide either to vest some or all of the Shares which are the subject of the award
or to preserve all or part of any award until the end of the relevant performance period. In
exercising its discretion, our Remuneration Committee will have regard to all circumstances
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on a case-by-case basis, including (but not limited to) the contributions made by that
participant and, in the case of performance-related awards, the extent to which the
applicable performance conditions and targets have been satisfied.
Upon the occurrence of the event specified in paragraph (vii) above, our Remuneration
Committee will consider, at its discretion, whether or not to release any award, and will take
into account all circumstances on a case-by-case basis, including (but not limited to) the
contributions made by that participant. If our Remuneration Committee decides to release
any award, then in determining the number of Shares to be vested in respect of such award,
our Remuneration Committee will have regard to the proportion of the performance period
which has elapsed and the extent to which the applicable performance conditions and targets
have been satisfied.
7. Size and Duration of the iFAST PSP
The total number of Shares which may be issued or transferred pursuant to awards granted
under the iFAST PSP, when aggregated with the aggregate number of Shares over which
options are granted under any other share option schemes of our Company, shall not exceed
15% of the total number issued Shares (excluding Shares held by our Company as treasury
shares) from time to time.
The total number of Shares over which Awards may be granted under the iFAST PSP to
Controlling Shareholders and their Associates shall not exceed twenty five per cent. (25%)
of the Shares available under the iFAST PSP, and the number of Shares over which an Award
may be granted under the iFAST PSP to each Controlling Shareholder or his Associate shall
not exceed ten per cent. (10%) of the Shares available under the iFAST PSP.
The iFAST PSP shall continue in force at the discretion of our Remuneration Committee,
subject to a maximum period of 10 years commencing on the date on which the iFAST PSP
is adopted by our Company in general meeting, provided always that the iFAST PSP may
continue beyond the above stipulated period with the approval of Shareholders in general
meeting and of any relevant authorities which may then be required.
Notwithstanding the expiry or termination of the iFAST PSP, any awards made to participants
prior to such expiry or termination will continue to remain valid.
8. Operation of the iFAST PSP
Subject to the prevailing legislation, our Company will deliver Shares to participants upon
vesting of their awards by way of either (i) an issuance of new Shares; or (ii) a transfer of
Shares then held by our Company in treasury.
In determining whether to issue new Shares to participants upon vesting of their awards, our
Company will take into account factors such as (but not limited to) the number of Shares to
be delivered, the prevailing market price of the Shares and the cost to our Company of
issuing new Shares or delivering existing Shares.
New Shares allotted and issued and existing Shares procured by our Company for transfer
on the release of an award shall be eligible 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 relevant date of issue or, as the case may be, delivery, and
shall in all other respects rank pari passu with other existing Shares then in issue.
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Our Remuneration Committee shall have the discretion to determine whether the
performance condition has been satisfied (whether fully or partially) or exceeded, and in
making any such determination, our Remuneration Committee shall have the right to make
computational adjustments to the audited results of our Company or our Group, to take into
account such factors as our 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 target(s) if our Remuneration Committee decides that a changed
performance target would be a fairer measure of performance.
9. Abstention from voting
Shareholders who are eligible to participate in the iFAST PSP are to abstain from voting on
any shareholders’ resolution relating to the iFAST PSP.
We have made an application to the SGX-ST for permission to deal in and for quotation of the
Award Shares which may be issued upon the release of the share awards to be granted under the
iFAST. The approval of the SGX-ST is not to be taken as an indication of the merits of the Offering,
our Company, our subsidiaries, our existing issued Shares, the New Shares, the Cornerstone
Shares, the Option Shares, the Award Shares or the Additional Shares.
Adjustments and Alterations to the iFAST PSP
The following describes the adjustment events under, and provisions relating to alterations of, the
iFAST PSP.
1. Adjustment Events
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, reduction, subdivision, consolidation or
distribution, or otherwise) shall take place, then:
(i) the class and/or number of Shares which are the subject of an award to the extent not
yet vested; and/or
(ii) the class and/or number of Shares over which future awards may be granted under the
iFAST PSP,
shall be adjusted in such manner as our Remuneration Committee may determine to be
appropriate, provided that no adjustment shall be made if as a result, the participant receives
a benefit that a Shareholder does not receive.
The issuance of securities as consideration for an acquisition or a private placement of
securities or 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 shall not normally be regarded as a circumstance requiring
adjustment, unless our Remuneration Committee considers an adjustment to be appropriate.
Any adjustment (except in relation to a capitalisation issue) must be confirmed in writing by
our Company’s auditors (acting only as experts and not as arbitrators) to be in their opinion,
fair and reasonable.
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2. Modifications or Alterations to the iFAST PSP
The iFAST PSP may be modified and/or altered from time to time by a resolution of our
Remuneration Committee subject to the prior approval of the SGX-ST and such other
regulatory authorities as may be necessary.
However, no modification or alteration shall adversely affect the rights attached to awards
granted prior to such modification or alteration except with the written consent of such
number of participants under the iFAST PSP who, if their awards were released to them,
would thereby become entitled to not less than three-quarters in number of all the Shares
which would be issued or transferred in full of all outstanding awards under the iFAST PSP.
No alteration shall be made to particular rules of the iFAST PSP to the advantage of the
holders of the awards except with the prior approval of Shareholders in general meeting.
Rationale for participation by Controlling Shareholder(s) and their Associates
Our Company is of the view that all employees of our Group, including those who are Controlling
Shareholders or Associates of Controlling Shareholders, should be remunerated for their
contribution to our Group on the same basis with no differentiation between employees who are
Controlling Shareholders or Associates of Controlling Shareholders and employees who are not.
Allowing Controlling Shareholders or their Associates to participate in the iFAST PSP will ensure
that they are equally entitled, with the other Group Employees who are not Controlling
Shareholders or Associates of Controlling Shareholders, to take part and benefit from this system
of remuneration.
The Company is of the view that Controlling Shareholders or Associates of Controlling
Shareholders should not be unduly discriminated against by virtue only for their shareholdings in
the Company. The Company is also of the view that the extension of the iFAST PSP to Controlling
Shareholders or Associates of Controlling Shareholders will enhance their long-term commitment
to our Group as it will ensure that they will continue to have a stake in the Company even if they
decrease their shareholdings in the Company in the future.
As a safeguard against abuse, all members of the Board (and not just members of the Committee)
who are neither Controlling Shareholders nor their Associates will be involved in deliberations in
respect of Awards to be granted to or held by Controlling Shareholders or their Associates and the
terms and conditions, including the vesting periods attached to such Awards. Furthermore,
specific approval of the independent Shareholders is required for the grant of Awards to
Controlling Shareholders and/or their Associates as well as the actual number of and terms of
such Awards.
Specific approval for Mr. Lim Chung Chun has been sought and obtained for his participation in
the iFAST PSP at the extraordinary general meeting held on 21 October 2014. As Chairman and
CEO of the Company, Mr. Lim Chung Chun plays a major role in the overall management of the
operations, strategic direction and business opportunities of our Group. Our Group benefits much
from his strategic directions and looks to him to continue leading our Group in its businesses. Mr.
Lim is also in charge of overseeing the day-to-day management of our Group as well as our
Group’s strategic and business development. Mr. Lim has been instrumental in developing and
guiding our Group since our incorporation in 2000. As Mr. Lim has extensive experience in the
business, he has been using his wealth of experience and expertise to further the business goals
of our Group. Mr. Lim is also responsible for the effective management of business relations with
our Suppliers and Customers. He has been instrumental in successfully implementing the
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expansion of our Group’s businesses outside of Singapore to Hong Kong and Malaysia. Mr. Lim’s
leadership and management skills are invaluable to our Group. The extension of the iFAST PSP
to him will serve not only as recognition of his valuable contributions to our Group but also give
him a stronger stake in the future performance of our Group. Participation in the iFAST PSP will
serve as a means to motivate him to achieve and maintain a high level of performance which is
vital to the success of our Group. Save for the specific approval for Mr. Lim Chung Chun’s
participation in the iFAST PSP, there are no other approvals obtained for the participation of any
other Controlling Shareholders and/or their Associates.
Rationale for participation of executive directors and employees of our associated
companies and non-executive directors (including our Independent Directors) of our Group
in the iFAST PSP
The extension of the iFAST PSP to executive directors and employees of our associated
companies and non-executive directors (including our Independent Directors) of our Group allows
our Group to have a fair and equitable system to reward directors and employees who have made
and who continue to make significant contributions to the long-term growth of our Group.
We believe that the iFAST PSP will also enable us to attract, retain and provide incentives to its
participants to achieve higher standards of performance as well as encourage greater dedication
and loyalty by enabling our Company to give recognition to past contributions and services as well
as motivating participants generally to contribute towards the long-term growth of our Group.
Although the non-executive directors are not involved in the day-to-day running of our Group’s
business, they, nonetheless, play an invaluable role in furthering the business interests of our
Group by contributing their experience and expertise. The participation by the non-executive
directors in the iFAST PSP 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.
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 awards
under the iFAST PSP to such non-executive directors.
Financial Effects of the iFAST PSP
The iFAST PSP is considered a share-based payment that falls under Financial Reporting
Standards (“FRS”) 102 where participants will receive Shares and the awards will be accounted
for as equity-settled share-based payment 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 increase in equity. Vesting conditions, other than
market conditions, shall be taken into account by adjusting the number of Shares included in the
measurement of the transaction amount. During the vesting period, charge to the profit or loss will
be recognised based on the best estimate of the number of shares expected to vest and shall
revised that estimate, if necessary. After the vesting date, no adjustment to the charge to the profit
or loss is made.
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The amount charged to the 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 estimate of the length
of the expected vesting period shall be consistent with the assumptions used in estimating the fair
value of the award granted, and shall not be subsequently revised. 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 the profit or loss at each accounting date, based
on an assessment by our Chief Financial Officer 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 cumulative charge to the profit or loss if the awards do not
ultimately vest.
The following sets out the financial effects of the iFAST PSP.
(a) Share capital
The iFAST PSP will result in an increase in our Company’s issued share capital when new
Shares are issued to participants. The number of new Shares issued will depend on, inter
alia, the size of the awards granted under the iFAST PSP. In any case, the iFAST PSP
provides that the number of Shares to be issued or transferred under the iFAST PSP, when
aggregated with the aggregate number of Shares over which options are granted under any
other share option schemes of our Company, will be subject to the maximum limit of 15% of
our Company’s total number of issued Shares (excluding Shares held by our Company as
treasury shares) from time to time. If instead of issuing new Shares to participants, treasury
shares are transferred to participants or our Company pays the equivalent cash value, the
iFAST PSP will have no impact on our Company’s issued share capital.
(b) NAV
As described in paragraph (c) below on EPS, the iFAST PSP is likely to 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 iFAST PSP, there would be no effect on the NAV. However, if
instead of issuing new Shares to participants, existing Shares are purchased for delivery to
participants, the NAV will be impacted by the cost of the Shares purchased. It should be
noted that the delivery of Shares to participants under the iFAST PSP will generally be
contingent upon the eligible participants meeting prescribed performance targets and
conditions.
(c) EPS
The iFAST PSP is likely to result in a charge to earnings 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 iFAST PSP will
generally be contingent upon the participants meeting the prescribed performance targets
and conditions.
(d) Dilutive impact
The issuance of new Shares under the iFAST PSP will have a dilutive impact on our
consolidated EPS.
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Reporting Requirements
Under the Listing Manual, an immediate announcement must be made on the date of grant of an
award under the iFAST PSP and provide details of the grant, including the following:
(a) date of grant;
(b) number of Shares granted under the award;
(c) market price of the Shares on the date of grant of the award;
(d) number of Shares granted to Directors under the award, if any; and
(e) the vesting period in relation to the award.
Disclosures in Annual Report
Our Company will make such disclosures in our annual report for so long as the iFAST PSP
continues in operation as from time to time required by the Listing Manual including the following
(where applicable):
(a) the names of the members of our Remuneration Committee administering the iFAST PSP;
(b) in respect of the following participants of the iFAST PSP:
(i) Directors of our Company; and
(ii) participants (other than those in paragraph (i) above) who have received Shares
pursuant to the release of awards granted under the iFAST PSP which, in aggregate,
represent 5% or more of the aggregate of the total number of Shares available under
the iFAST PSP,
the following information:
(A) the name of the participant;
(B) the aggregate number of Shares comprised in awards which have been granted to such
participant during the financial year under review;
(C) the aggregate number of Shares comprised in awards granted to such participant since
the commencement of the iFAST PSP to the end of the financial year under review;
(D) the aggregate number of Shares comprised in awards granted to such participant which
have vested during the financial year under review and in respect of such awards, the
proportion of new Shares issued and existing Shares transferred (and where existing
Shares were purchased for delivery, the range of prices at which such Shares were
purchased) upon the release of the vested awards; and
(E) the aggregate number of Shares comprised in awards granted to such participant which
have not been released as at the end of the financial year under review;
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(c) in relation to the iFAST PSP:
(i) the aggregate number of Shares comprised in awards vested since the commencement
of the iFAST PSP to the end of the financial year under review;
(ii) the aggregate number of new Shares comprised in awards vested during the financial
year under review; and
(iii) the aggregate number of Shares comprised in awards granted under the iFAST PSP
which have not been released as at the end of the financial year under review; and
(d) such other information as may be required by the Listing Manual and/or the Securities and
Futures Act.
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On 21 October 2014, our Shareholders approved a share option scheme known as the iFAST
Employee Share Option Scheme (the “iFAST ESOS”), the rules of which are set out in Appendix
H of this Prospectus. The iFAST ESOS complies with the relevant rules as set out in Chapter 8
of the Listing Manual.
The iFAST 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 iFAST ESOS, which forms an integral and important component of a
compensation plan, is designed to primarily reward and retain executive directors, non-executive
directors and employees whose services are vital to our well-being and success.
The iFAST ESOS shall be administered by our Remuneration Committee. As at the Latest
Practicable Date, no options have been granted under the iFAST ESOS.
Rationale of the iFAST ESOS
The rationale for adopting the iFAST ESOS is to allow our Company:
(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.
Unlike the Awards granted under the iFAST PSP (as detailed in the section entitled “iFAST PSP”),
the iFAST ESOS is designed to provide eligible participants with an opportunity to participate in
the equity of our Company through the grant of options, and to motivate them towards better
performance through increased dedication and loyalty. The reason for having the iFAST ESOS in
addition to the iFAST PSP is to give our Company greater flexibility in structuring the
compensation packages of eligible participants and providing an additional tool to motivate and
retain staff members through the offering of compensation packages that are market competitive.
Summary of the iFAST ESOS
A summary of the rules of the iFAST ESOS is set out as follows:
1. Participants
Under the rules of the iFAST ESOS, executive directors and confirmed employees of our
Group and our associated companies (“Group Employees”) and non-executive directors
(including our Independent Directors) of our Group, are eligible to participate in the iFAST
ESOS. For this purpose, a company is our “associated company” if we and/or our
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subsidiaries hold at least 20% but not more than 50% of the issued shares in that company
and provided our Company has control (as defined in the Listing Manual) over the associated
company. Our Company does not have control over our associated company, Providend.
Controlling Shareholders and their Associates who meet the criteria as set out above are
eligible to participate in the iFAST ESOS, provided that the participation of each Controlling
Shareholder or his Associate and each grant of an Option to any of them may only be
effected with the specific prior approval of Independent Shareholders in general meeting by
a separate resolution.
2. Scheme administration
The iFAST ESOS shall be administered by our Remuneration Committee (further details of
such Committee can be found in the section entitled “Corporate Governance” of this
Prospectus) with powers to determine, inter alia, the following:
(a) persons to be granted options;
(b) number of options to be granted; and
(c) recommendations for modifications to the iFAST ESOS.
Our Remuneration Committee may consist of Directors (including Directors or persons who
may be participants of the iFAST ESOS). A member of our Remuneration Committee who is
also a participant of the iFAST ESOS must not be involved in its deliberation in respect of
options granted or to be granted to him.
3. Size of the iFAST ESOS
The aggregate number of shares over which our Remuneration Committee may grant options
on any date, when added to the number of Shares issued and issuable or transferred and to
be transferred in respect of all options granted under the iFAST ESOS and the number of
Shares issued and issuable or transferred and to be transferred in respect of all options or
awards granted under any other share option schemes or share schemes of our Company,
shall not exceed 15% of the total number of issued Shares (excluding Shares held by our
Company as treasury shares) on the day immediately preceding the date on which an offer
to grant an option is made.
The total number of Shares over which Options may be granted under the iFAST ESOS to
Controlling Shareholders and their Associates shall not exceed twenty five per cent. (25%)
of the Shares available under the iFAST ESOS, and the number of Shares over which an
Option may be granted under the iFAST ESOS to each Controlling Shareholder or his
Associate shall not exceed ten per cent. (10%) of the Shares available under the iFAST
ESOS.
Our Company believes that this 15% limit set by the SGX-ST gives our Company sufficient
flexibility to decide the number of Option Shares to offer to its existing and new employees.
The number of eligible participants is expected to grow over the years. Our Company, in line
with its goals 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 iFAST ESOS is limited, our Company may only be
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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 sufficient
number of options to offer to new employees as well as to existing ones. The number of
options offered must also be significant enough to serve as a meaningful reward for
contributions to our Group. However, it does not necessarily mean that our Remuneration
Committee will definitely issue Option Shares up to the prescribed limit. Our 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.
4. Maximum entitlements
The aggregate number of Shares comprised in any options to be offered to a grantee shall
be determined at the absolute discretion of our Remuneration Committee, which shall take
into account (where applicable) criteria such as rank, past performance, years of service and
potential for future development of that grantee.
5. Options, exercise period and exercise price
The options that are granted under the iFAST ESOS may have exercise prices that are, at
our Remuneration Committee’s discretion, set at a price (the “Market Price”) equal to the
average of the last dealt prices for a Share on the Official List of the SGX-ST for the five (5)
consecutive market days immediately preceding the date on which an offer to grant an option
is made; or at a discount to the Market Price (subject to a maximum discount of 20%).
Options which are fixed at the Market Price (“Market Price Option”) may be exercised after
the first anniversary of the date on which an offer to grant that option is made while options
exercisable at a discount to the Market Price may be exercised after the second anniversary
from the date on which an offer to grant that option is made (“Incentive Option”). Options
granted under the iFAST ESOS will have a life span of 10 years for options granted to Group
Employees (other than non-executive directors and/or employees of associated companies)
and five (5) years for options granted to non-executive directors and/or employees of
associated companies.
6. Grant of options
Under the rules of the iFAST ESOS, there are no fixed periods for the grant of options. As
such, offers of the grant of options may be made at any time from time to time at the
discretion of our 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 on or after the third market day from the date on which
the aforesaid announcement is made.
7. Termination of options
Special provisions in the rules of the iFAST 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.
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8. Acceptance of options
The grant of options shall be accepted within 30 days from the date of the offer. Offers of
options made to grantees, if not accepted before the closing date, will lapse. Upon
acceptance of the offer, the grantee must pay our Company a consideration of S$1.00.
9. Rights of shares arising
Subject to the prevailing legislation, our Company will deliver Shares to participants upon
exercise of their options by way of either (i) an issue of new Shares; or (ii) a transfer of
Shares then held by our Company in treasury.
In determining whether to issue new Shares to participants upon exercise of their options,
our Company will take into account factors such as (but not limited to) the number of Shares
to be delivered, the prevailing market price of the Shares and the cost to our Company of
issuing new Shares or delivering existing Shares.
The financial effects of the above methods are discussed below.
Shares arising from the exercise of options are subject to the provisions of the Memorandum
of Association and Articles of our Company. Shares allotted and issued, and existing Shares
procured by our Company for transfer, upon the exercise of an option shall rank pari passu
in all respects with the then existing issued Shares, save for any dividends, rights, allotments
or distributions, the record date (“Record Date”) for which is prior to the relevant exercise
date of the option. Record Date means the date as at the close of business on which
Shareholders must be registered in order to participate in any dividends, rights, allotments
or other distributions (as the case may be).
10. Duration of the iFAST ESOS
The iFAST ESOS shall continue in operation for a maximum duration of 10 years 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.
11. Abstention from voting
Shareholders who are eligible to participate in the iFAST ESOS are to abstain from voting on
any shareholders’ resolution relating to the iFAST ESOS and should not accept nominations
as proxy or otherwise for voting unless specific instructions have been given in the proxy
form on how the vote is to be cast.
Grant of options with a discounted exercise price
The ability to offer options to participants of the iFAST ESOS with exercise prices set at a discount
to the prevailing market prices of the Shares 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
more on improving the profitability and return of our Group above a certain level which will benefit
all Shareholders when these are eventually reflected through share price appreciation. The iFAST
ESOS will also serve to recruit new group employees whose contributions are important to the
long-term growth and profitability of our Group. Discounted options would be perceived in a more
iFAST ESOS
238
positive light by the participants, inspiring them to work hard and produce results in order to be
offered options at a discount as only employees who have made outstanding contributions to the
success and development of our Group would be granted options at a discount.
At present, our Company foresees that options may be granted with a discount principally in the
following circumstances:
(a) Firstly, where it is considered more effective to reward and retain talented employees by way
of a discounted price 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 price 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 such options at a discount would allow our Company to grant
options on a more realistic and economically feasible basis. Furthermore, options granted at
a discount will give an opportunity to group employees to realise some tangible benefits even
if external events cause the share price to remain largely static.
(b) Secondly, where it is more meaningful and attractive to acknowledge a participant’s
achievements through a discounted price option rather than paying him a cash bonus. For
example, options granted at a discount 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 price options, as part of eligible employees’ compensation packages. The
iFAST ESOS will provide 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 the Shares after the vesting period.
(c) Thirdly, where due to speculative forces and having regard to the historical performance of
the Share price, the market price of the Shares at the time of the grant of the options may
not be reflective of financial performance indicators such as return on equity and/or earnings
growth.
Our Remuneration Committee will have the absolute discretion to grant options where the
exercise price is discounted, to determine the level of discount (subject to a maximum discount of
20% 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 iFAST
ESOS at a discount not exceeding the maximum discount as aforesaid.
In deciding whether to give a discount and the quantum of such discount (subject to the aforesaid
limit), our Remuneration Committee will have regard to the financial and other performance of our
Company and our Group, the years of service and individual performance of the grantee, the
contribution of the grantee to the success and development of our Group and the prevailing
market conditions.
iFAST ESOS
239
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 Controlling Shareholder(s) and their Associates
Our Company is of the view that all employees of our Group, including those who are Controlling
Shareholders or Associates of Controlling Shareholders, should be remunerated for their
contribution to our Group on the same basis with no differentiation between employees who are
Controlling Shareholders or Associates of Controlling Shareholders and employees who are not.
Allowing Controlling Shareholders or their Associates to participate in the iFAST ESOS will ensure
that they are equally entitled, with the other Group Employees who are not Controlling
Shareholders or Associates of Controlling Shareholders, to take part and benefit from this system
of remuneration.
The Company is of the view that Controlling Shareholders or Associates of Controlling
Shareholders should not be unduly discriminated against by virtue only for their shareholdings in
the Company. The Company is also of the view that the extension of the iFAST ESOS to
Controlling Shareholders or Associates of Controlling Shareholders will enhance their long-term
commitment to our Group as it will ensure that they will continue to have a stake in the Company
even if they decrease their shareholdings in the Company in the future.
As a safeguard against abuse, all members of the Board (and not just members of the Committee)
who are neither Controlling Shareholders nor their Associates will be involved in deliberations in
respect of Options to be granted to or held by Controlling Shareholders or their Associates and the
terms and conditions, including the vesting periods attached to such Options. Furthermore,
specific approval of the independent Shareholders is required for the grant of Options to
Controlling Shareholders and/or their Associates as well as the actual number of and terms of
such Options.
Specific approval for Mr. Lim Chung Chun has been sought and obtained for his participation in
the iFAST ESOS at the extraordinary general meeting held on 21 October 2014. As Chairman and
CEO of the Company, Mr. Lim Chung Chun plays a major role in the overall management of the
operations and business opportunities of our Group. Our Group benefits much from his strategic
directions and looks to him to continue leading our Group in its businesses. Mr. Lim is also in
charge of overseeing the day-to-day management of our Group as well as our Group’s strategic
and business development. Mr. Lim has been instrumental in developing and guiding our Group
since our incorporation in 2000. As Mr. Lim has extensive experience in the business, he has been
using his wealth of experience and expertise to further the business goals of our Group. Mr. Lim
is also responsible for the effective management of business relations with our Suppliers and
Customers. He has been instrumental in successfully implementing the expansion of our Group’s
businesses outside of Singapore to Hong Kong and Malaysia. Mr. Lim’s leadership and
management skills are invaluable to our Group. The extension of the iFAST ESOS to him will serve
not only as recognition of his valuable contributions to our Group but also give him a stronger
stake in the future performance of our Group. Participation in the iFAST ESOS will serve as a
means to motivate him to achieve and maintain a high level of performance which is vital to the
success of our Group. Save for the specific approval for Mr. Lim Chung Chun’s participation in the
iFAST ESOS, there are no other approvals obtained for the participation of any other Controlling
Shareholders and/or their Associates.
iFAST ESOS
240
Rationale for participation of executive directors and employees of our associated
companies and non-executive directors (including our Independent Directors) of our Group
in the iFAST ESOS
The extension of the iFAST ESOS to executive directors and employees of our associated
companies and non-executive directors (including our Independent Directors) of our Group allows
our Group to have a fair and equitable system to reward directors and employees who have made
and who continue to make significant contributions to the long-term growth of our Group.
We believe that the iFAST ESOS will also enable us to attract, retain and provide incentives to its
participants to achieve higher standards of performance as well as encourage greater dedication
and loyalty by enabling our Company to give recognition to past contributions and services as well
as motivating participants generally to contribute towards the long-term growth of our Group.
Although the non-executive directors are not involved in the day-to-day running of our Group’s
business, they, nonetheless, play an invaluable role in furthering the business interests of our
Group by contributing their experience and expertise. The participation by the non-executive
directors in the iFAST 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.
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
under the iFAST ESOS to such non-executive directors.
Financial Effects of the iFAST ESOS
Any Options granted under the iFAST ESOS will have a fair value. Where such options are granted
at a consideration below their fair value, there will be a cost to our Company, the amount of which
will depend on whether the Options are granted at the Market Price or at a discount to the Market
Price. The cost to our Company of granting Options under the iFAST ESOS will be as follows:
(i) the exercise of an Option at a discounted exercise price will 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 will represent the
monetary cost to our Company of granting Options with a discounted exercise price;
(ii) as the monetary cost of granting Options with a discounted exercise price is borne by our
Company, the earnings of our Company will 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 will, accordingly, result in the dilution of our Company’s EPS;
(iii) the effect of the issue and allotment of new Shares upon the exercise of Options on our
Company’s NAV per Share will be accretive if the exercise price is above the NAV per Share,
but dilutive otherwise; and
iFAST ESOS
241
(iv) the grant of Options under the ESOS will have an impact on our Company’s reported profit
because under FRS 102, share-based payments require the recognition of an expense in
respect of Options granted under the ESOS. The expense will be based on the fair value of
the Options at the date of grant and will be recognised over the vesting period.
The financial effects discussed above in (i), (ii) and (iii) will only materialise upon the exercise of
the relevant Options. The cost of granting Options discussed in (iv) above will be recognised in the
financial statements even if the Options discussed in (iv) above are not exercised.
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
will have 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 will 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 FRS 102. The cost to our Company in granting an Option will vary depending on the
number of Options granted pursuant to the ESOS, whether these Options are granted at Market
Price or at a discount to the Market Price and the validity period of the Options. Generally, a
greater discount and a longer validity period for an Option will result in a higher potential cost to
our Company.
iFAST ESOS
242
In general, transactions between our Group and any of our interested persons (namely, our
Directors or Controlling Shareholders of our Company or their associates) are interested person
transactions for the purposes of Chapter 9 of the Listing Manual.
Certain terms such as “Associate”, “control”, “Controlling Shareholder”, “entity at risk” and
“interested person” used in this section have the meanings ascribed to them in the Listing Manual
and/or the SFR as the context so requires.
Save as disclosed below and in line with Rules 905(3) and 906(2) of Chapter 9 of the Listing
Manual which provides that the requirements relating to interested person transactions under
Chapter 9 of the Listing Manual do not apply to any transaction below S$100,000, a transaction
below S$100,000 is not considered material in the context of the Offering and is not taken into
account for the purposes of aggregation in this section.
Save as disclosed below and in the section entitled “Restructuring Exercise” of this Prospectus,
there are no transactions undertaken between our Group and any of our interested persons during
the Period Under Review up to the Latest Practicable Date which are material in the context of the
Offering.
PRESENT AND ON-GOING INTERESTED PERSON TRANSACTIONS
Advertisements and subscription of online newspaper with SPH and its related
corporations
Our Controlling Shareholder SPH AsiaOne is a wholly-owned subsidiary of SPH, a Singapore-
incorporated company listed on the Mainboard of the SGX-ST. Accordingly, SPH is deemed to be
interested in our Shares held by SPH AsiaOne and is an “interested person”.
Our Group periodically places print advertisements in newspapers and electronic advertisements
on websites owned by SPH or its related corporations and had subscribed for online newspapers
with SPH. The following table sets out the aggregate amount of fees our Group had paid SPH for
such advertisements and subscription (excluding fees paid to ShareInvestor Pte Ltd, a wholly-
owned subsidiary of SPH, further details of which are set out below). Please see below for more
information on transactions between our Group and ShareInvestor Pte Ltd.
FY2011
S$’000
FY2012
S$’000
FY2013
S$’000
1 January 2014
up to the Latest
Practicable Date
S$’000
Print advertisements in newspapers
and electronic advertisements on
websites 48 10 4 –
Subscription for online newspapers – – 1 –
The Directors believe that the sums paid for the advertisements and the subscription for online
newspapers were in accordance with then market rates and the terms had been negotiated on an
arm’s length basis, taking into consideration the Group’s needs and requirements for such
services.
INTERESTED PERSON TRANSACTIONS AND CONFLICT OF INTERESTS
243
Advertisements and investor relations services with ShareInvestor Pte Ltd
ShareInvestor Pte Ltd is a wholly-owned subsidiary of SPH. Accordingly, it is an “associate” of
SPH, our Controlling Shareholders, and is an “interested person”.
Our Group periodically (i) places print advertisements in newspapers through ShareInvestor Pte
Ltd; and (ii) places electronic advertisements on websites owned by ShareInvestor Pte Ltd.
On 31 October 2014, our Company has also entered into an agreement to engage ShareInvestor
Pte Ltd for investor relations services, such as the development of our Group’s investor relations
website and marketing and advertisements relating to our Listing, over a period of approximately
one (1) year for a fee of approximately S$41,200.
The following table sets out the aggregate amount of fees our Group had paid ShareInvestor Pte
Ltd for such advertisements and investor relations services.
FY2011
S$’000
FY2012
S$’000
FY2013
S$’000
1 January 2014
up to the Latest
Practicable Date
S$’000
Print advertisements in newspapers
and electronic advertisements on
websites 9 – 6 –
Investor relations services – – – –
(1)
Note:
(1) As at the Latest Practicable Date, approximately S$41,200 has not been paid pursuant to the agreement for the
provision of investor relations services. Approximately S$20,600 was paid on 18 November 2014 and the remaining
S$20,600 will be paid after Listing.
Our Directors believe that the sums we paid for the advertisements are in accordance with then
market rates, and the sums we are paying for the investor relations services are in accordance
with current market rates, and the terms have been negotiated on an arm’s length basis, taking
into consideration our needs and requirements for such services.
Advertisements taken out by ShareInvestor Pte Ltd with our Group
ShareInvestor Pte Ltd had previously taken out advertisements with our Group’s in-house
magazine titled “iGP INSIGHTS”.The following table sets out the aggregate amount of fees
ShareInvestor Pte Ltd had paid the Group for such advertisements:
FY2011
S$’000
FY2012
S$’000
FY2013
S$’000
1 January 2014
up to the Latest
Practicable Date
S$’000
Print advertisements in magazine 5 – – –
INTERESTED PERSON TRANSACTIONS AND CONFLICT OF INTERESTS
244
Our Directors believe that the sums we receive for the advertisements are in accordance with then
market rates and the terms have been negotiated on an arm’s length basis, taking into
consideration our needs and requirements.
The Group intends to continue to enter into similar transactions as set out above with SPH and/or
its related corporations, including ShareInvestor Pte Ltd. Such arrangements will be subject to the
review procedures as set out in the section titled “Interested Person Transactions and Conflict of
Interests ? Review Procedures for Future Interested Person Transactions” of the Prospectus, and
will be subject to Chapter 9 of the Listing Manual.
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 Shareholders. Our Audit
Committee will adopt the following procedures when reviewing interested person transactions:
(a) when purchasing items from or engaging the services of an interested person, two (2) other
quotations from non-interested persons will be obtained for comparison to ensure that the
interests of minority Shareholders are not disadvantaged. The purchase price or fee for
services shall not be higher than the most competitive price or fee of the two (2) other
quotations from non-interested persons. In determining the most competitive purchase price
or fee, all pertinent factors, including but not limited to quality, delivery time and track record
will be taken into consideration;
(b) when selling items or supplying services to an interested person, the price or the fee and
terms of two (2) other successful transactions of a similar nature with non-interested persons
will be used as comparison to ensure that the interests of minority Shareholders are not
disadvantaged. The sale price or fee for the supply of services shall not be lower than the
lowest sale price or fee of the two (2) other successful transactions with non-interested
persons;
(c) when renting properties from or to an interested person, appropriate steps will be taken to
ensure that such rent is commensurate with 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 (where necessary). The
rent payable shall be based on the most competitive market rental rates of similar properties
in terms of size and location, based on the results of the relevant enquiries;
(d) when selling properties to an interested person, our Directors shall take appropriate steps to
ensure that such sale price is commensurate with the prevailing market rates for similar
properties and obtaining necessary reports or reviews published by property agents
(including an independent valuation report by a property valuer, when considered
appropriate); and
(e) an interested person transaction above S$100,000 is to be approved prior to entry by a
Director who shall not be an interested person in respect of that transaction. An interested
person transaction below S$100,000 does not require such approval. Any sale or purchase
contract to be made with an interested person shall not be approved unless the pricing is:
(i) determined in accordance with our usual business practices and policies;
INTERESTED PERSON TRANSACTIONS AND CONFLICT OF INTERESTS
245
(ii) consistent with the usual margin given or price received by us for the same or
substantially similar type of transactions between us and unrelated third parties; and
(iii) the terms are no more favourable to the interested person than those extended to or
received from unrelated third parties.
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 in accordance with the procedures
outlined above. It will take into account all relevant non-quantitative factors. In the event that a
member of our Audit Committee is interested in any such transaction, he will abstain from
reviewing that particular transaction. Furthermore, if during these periodic reviews, our Audit
Committee believes that the guidelines and procedures as stated above are not sufficient to
ensure that interests of minority Shareholders are not prejudiced; our Audit Committee will adopt
new guidelines and procedures.
In addition, our Audit Committee will include the review of interested person transactions as part
of its standard procedures while examining the adequacy of our internal controls. Our Board will
also ensure that all disclosure, approval and other requirements on interested person
transactions, including those required by prevailing legislation, the Listing Manual and accounting
standards, are complied with. In addition, such transactions will also be subject to Shareholders’
approval if required by the Listing Manual.
Under Chapter 9 of the Listing Manual, a listed company may seek a shareholders’ mandate for
recurrent transactions of revenue or trading nature or those necessary for its day-to-day
operations such as supplies and materials, which may be carried out with the listed company’s
interested persons, but not for the purchase or sale of assets, undertakings or businesses. There
is currently no general mandate from our Shareholders for recurrent interested person
transactions of revenue or trading nature or those necessary for our day-to-day operations. In the
event that such a general mandate is required in the future, we shall obtain it in accordance with
the provisions of the Listing Manual.
OTHER TRANSACTIONS
The following disclosures are not interested person transactions but we are disclosing them in the
interest of full disclosure.
Outsourcing fees charged to iFAST India
iFAST India is wholly-owned by Pecuniam. Pecuniam is owned by various shareholders, most of
whom are also existing or previous shareholders and/or employees of our Company. In addition,
both Pecuniam and our Company have common Controlling Shareholders, Mr. Lim Chung Chun
and SPH AsiaOne Ltd.
We have entered into an agreement with iFAST Financial India Private Limited to provide them
with IT outsourcing services. iFAST Financial India Private Limited is a subsidiary of iFAST India.
The IT outsourcing fee paid by iFAST Financial India Private Limited to us was approximately
S$0.31 million in FY2011, S$0.23 million in FY2012, S$0.23 million in FY2013 and S$0.19 million
for the Period Under Review up to the Latest Practicable Date. There was an adjustment in IT
outsourcing fees to lower such fees from FY2012 onwards. The aforementioned fees charged are
on a commercial arms’ length basis.
INTERESTED PERSON TRANSACTIONS AND CONFLICT OF INTERESTS
246
POTENTIAL CONFLICT OF INTERESTS
Save as disclosed in this Prospectus in the sections entitled “Directors, Management and Staff”
and “Interested Person Transactions and Conflict of Interests”, none of our Directors, Executive
Officers or Controlling Shareholder or their Associates has any interest, direct or indirect, in:
(a) any company carrying on the same business or dealing in similar products as us;
(b) any company that is our Group’s customer or supplier of goods and services; and
(c) any material transactions to which our Group was or is a party.
Discontinued India Operations
Our discontinued India Business and iFAST India which is wholly-owned by Pecuniam presents a
potential conflict of interest situation. Pecuniam is owned by certain of our Shareholders, including
Mr. Lim Chung Chun. iFAST India is owned by Pecuniam as a result of DAPH’s exit of the joint
venture that it had established with our Company. In addition, the India Business is loss-making
and has not obtained the relevant licences for the efficient running of an investment platform
business. Please refer to the section entitled “Restructuring Exercise” of this Prospectus for
further details.
To mitigate any conflict of interest that may arise in relation to iFAST India and the India Business,
our Company has entered into a deed of arrangement with Pecuniam (the “Deed of
Arrangement”) in which Pecuniam has granted a right of first refusal (“ROFR”) to our Group for
so long as there are common controlling shareholders (“ROFR Period”). The ROFR covers any
proposed offer by a third party to purchase Pecuniam’s interest in iFAST India and/or the whole
or any part of iFAST India’s B2C Business and/or the B2B Business in India (the “Relevant
Assets”) or any proposed sale or disposal by Pecuniam of the Relevant Assets, which shall be
notified by Pecuniam to our Group in writing. In the event that our Group fails or does not wish to
exercise the ROFR within 45 days (or such longer period as may be mutually agreed between our
Company and Pecuniam), Pecuniam will be entitled to dispose of the Relevant Assets on terms
no more favourable than what was offered to our Group. The exercise of the ROFR will be at the
discretion of our Company’s Directors who do not have any interests in iFAST India (the
“Non-interested Directors”) and Audit Committee.
In addition, within the ROFR, Pecuniam has undertaken during the ROFR Period (the “Non-
Compete Undertaking”) that, unless with the approval from the Non-interested Directors and the
Audit Committee, it shall not, and shall procure that iFAST India and its subsidiaries shall not,
directly or indirectly, outside of India:
(i) either solely or jointly with or on behalf of any person, firm or corporation, carry on, be
engaged in or interested in any capacity in a business, trade or occupation which competes
with the B2B Business and/or the B2C Business of our Group; or
(ii) hire, solicit, entice or in any manner persuade any employee of our Group to discontinue or
terminate his employment with our Group.
Please refer to the section entitled “Restructuring” for further details of the discontinued India
Business and iFAST India.
INTERESTED PERSON TRANSACTIONS AND CONFLICT OF INTERESTS
247
Notwithstanding that Chapter 9 of the Listing Manual does not apply to arrangements, matters or
transactions between our Group and iFAST India which are not of a revenue or trading nature or
those necessary for our Group’s day-to-day operations, such arrangements, matters and
transactions shall be approved by our Audit Committee.
MITIGATION OF POTENTIAL CONFLICTS OF INTERESTS
In addition to the ROFR and the Non-Compete Undertaking described above, we also believe that
any potential conflicts of interests, whether with our Directors, Controlling Shareholders and their
respective associates or otherwise (including those mentioned above), are mitigated as follows:
a. our Directors have a duty to disclose their interests in respect of any contract, proposal,
transaction or any other matter whatsoever in which they have any personal material interest,
directly or indirectly, or any actual or potential conflicts of interest (including conflicts of
interest that arise from their directorship(s) or executive position(s) or personal investments
in any other corporation(s)) that may involve them. Upon such disclosure, such Directors
shall not participate in any proceedings of our Board of Directors, and shall in any event
abstain from voting in respect of any such contract, arrangement, proposal, transaction or
matter in which the conflict of interest arises, unless and until our Audit Committee has
determined that no such conflict of interest exists;
b. our Audit Committee is required to examine the internal control procedures and review
procedures put in place by our Company to determine if such procedures put in place are
sufficient to ensure that interested person transactions are conducted on normal commercial
terms and will not be prejudicial to our Company and our minority Shareholders;
c. our Audit Committee will review any actual or potential conflicts of interest that may involve
our Directors as disclosed by them to our Board and the exercise of Directors’ fiduciary duties
in this respect. Upon disclosure of an actual or potential conflict of interests by a Director, our
Audit Committee will consider whether a conflict of interests does in fact exist. A Director who
is a member of our Audit Committee will not participate in any proceedings of our Audit
Committee in relation to the review of a conflict of interests relating to him. The review will
include an examination of the nature of the conflict and such relevant supporting data, as our
Audit Committee may deem reasonably necessary;
d. upon our listing on the SGX-ST, we will be subject to Chapter 9 of the Listing Manual in
relation to interested person transactions. The objective of these rules is to ensure that our
interested person transactions do not prejudice the interests of our Shareholders as a whole.
These rules require us to make prompt announcements, disclosures in our annual report
and/or seek Shareholders’ approval for certain material interested person transactions. Our
Audit Committee may also have to appoint independent financial advisers to review such
interested person transactions and opine on whether such transactions are fair and
reasonable to us, not prejudicial to our interests and the interests of our minority
Shareholders. Under the Listing Manual, our Shareholders’ Mandate is required to be
renewed at each annual general meeting and disclosure must be made in our annual report
of the aggregate value of interested person transactions conducted pursuant to such
mandate during each financial year, and in the annual reports for the subsequent years
during which such mandate is in force. We must also adopt a new mandate if for any reason
the review policies and procedures under our current Shareholders’ Mandate are
inappropriate;
INTERESTED PERSON TRANSACTIONS AND CONFLICT OF INTERESTS
248
e. our Audit Committee will also monitor the investments in our customers, suppliers and
competitors made by our Directors, Controlling Shareholders and their respective associates
who are involved in the management of or have shareholding interests in similar or related
business of our Company (to the extent as disclosed by them to our Audit Committee) and
make assessments on whether there are any potential conflicts of interest;
f. notwithstanding the appointment of one of our Directors by our Controlling Shareholder
(namely, Mr. Loh Huan Ping who is a nominee director of SPH AsiaOne, a Controlling
Shareholder), our Directors owe fiduciary duties to us, including the duty to act in good faith
and in our best interests. In addition, a Director may only disclose information (not otherwise
available to him) which he has obtained in his capacity as a director, to the Controlling
Shareholder whose interests he represents, when certain conditions stipulated in Section
158 of the Companies Act are met. These conditions are that: the relevant director declares
at a meeting of the Directors the person to whom such information is to be disclosed and
particulars of such information; our Board authorises him to make such disclosure; and the
disclosure will not be likely to prejudice us. In addition, the relevant director shall abstain
from voting in respect of any decision of our Board to authorise him to make such disclosure.
Therefore, any non-public information regarding us that any of our Directors wishes to
disclose to the Controlling Shareholder whose interests he represents can only be so
disclosed if our Board authorises such disclosure and our Board is satisfied that such
disclosure will not be likely to prejudice us. Our Directors are also subject to a duty of
confidentiality that precludes a Director from disclosing to any third party (including any of
our Shareholders or their Associates) information that is confidential; and
g. Our Audit Committee will, following the listing of our Company on the SGX-ST, undertake the
following additional responsibilities:
(i) review on a periodic basis the framework and processes established above for the
implementation of the terms of the ROFR and the Non-Compete Undertaking in order
to ensure that such framework and processes remain appropriate;
(ii) review and assess from time to time whether additional processes are required to be put
in place to manage any material conflicts of interest with our Directors, Controlling
Shareholders and their respective associates and propose, where appropriate, the
relevant measures for the management of such conflicts; and
(iii) review and propose, where appropriate, the relevant measures for the management of
all conflicts of interest matters referred to it.
INTERESTED PERSON TRANSACTIONS AND CONFLICT OF INTERESTS
249
Upon listing and quotation on the SGX-ST, our Shares will be traded under the book-entry
(scripless) settlement system of CDP, and all dealings in and transactions of our Shares through
the SGX-ST will be effected in accordance with the terms and conditions for the operation of
Securities Accounts with CDP, as amended from time to time.
CDP, a wholly-owned subsidiary of the Singapore Exchange Limited, is incorporated under the
laws of Singapore and acts as a depository and clearing organisation. CDP holds securities for its
account holders and facilitates the clearance and settlement of securities transactions between
account holders through electronic book-entry changes in the Securities Accounts maintained by
such account holders with CDP.
Our Shares will be registered in the name of CDP or its nominees 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 the laws of
Singapore and our Articles, as members of our Company in respect of the number of our Shares
credited to their respective Securities Accounts.
Persons holding our Shares in a Securities Account with CDP may withdraw the number of Shares
they own from the book-entry settlement system in the form of physical share certificates. Such
share certificates will not, however, be valid for delivery pursuant to trades transacted on the
SGX-ST, 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 will be payable to CDP 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) will be payable to
our Share Registrar for each share certificate issued and 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 the SGX-ST 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 our Shares deposited before they can effect the desired trades. A fee of S$10.00,
subject to GST at the prevailing rate (currently seven per cent. (7%)), is payable upon the deposit
of each instrument of transfer with CDP. The above fees may be subject to such changes 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 our Shares sold and the buyer’s Securities
Account being credited with the number of our Shares acquired. No transfer stamp duty is
currently payable for the transfer of our Shares that are settled on a book-entry basis.
A Singapore clearing fee for trades in our Shares on the SGX-ST is payable at the rate of 0.04 per
cent. (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 are subject to GST at the
prevailing rate (currently seven per cent. (7%)).
CLEARANCE AND SETTLEMENT
250
Dealings in our Shares will be carried out in Singapore dollars and will be effected for settlement
in CDP on a scripless basis. Settlement of trades on a normal “ready” basis on the SGX-ST
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 Securities Account with CDP or a
securities sub-account with a depository agent. A depository agent may be a member company of
the SGX-ST, bank, merchant bank or trust company.
CLEARANCE AND SETTLEMENT
251
THE OFFERING
The Offering consists of: (i) the Placement of 30,000,000 Placement Shares to investors, including
institutional and other investors in Singapore and outside the United States in compliance with
Regulation S under the US Securities Act, and (ii) the Public Offer of 2,800,000 Offer Shares in
Singapore. The New Shares may be re-allocated between the Placement and the Public Offer at
the sole discretion of the Joint Issue Managers, Bookrunners and Underwriters in the event of
over-subscription in one (1) and under-subscription in the other.
Separate from the Offering, each of the Cornerstone Investors, being FIL Investment Management
(Hong Kong) Limited and OWW Investments III Limited, has entered into their respective
Cornerstone Subscription Agreements with the Company to subscribe for an aggregate of
19,000,000 Cornerstone Shares at the Offering Price, conditional upon the Management and
Underwriting Agreement and the Placement Agreement having been entered into and not having
been terminated pursuant to their terms on or prior to the Listing Date. The Cornerstone Shares
will in aggregate constitute approximately 7.4% of the total number of issued Shares as at the date
of Listing. The Cornerstone Shares acquired by the Cornerstone Investors are not subject to any
lock-up restrictions in respect of their shareholding interests in our Company. In the event that any
one (1) or more Cornerstone Investors fails to pay for the Cornerstone Shares which they have
committed to subscribe, such Cornerstone Shares will be reallocated to the Placement the
Offering may still proceed and, if so, the subscribers of the New Shares will still be required to pay
for and complete their subscription pursuant to the Offering.
We and the Joint Issue Managers, Bookrunners and Underwriters have entered into the
Management and Underwriting Agreement and the Placement Agreement. Subject to the terms
and conditions contained in the Management and Underwriting Agreement and the Placement
Agreement, the Joint Issue Managers, Bookrunners and Underwriters have agreed to procure
subscriptions and payment, failing which to subscribe and pay, for the number of New Shares set
forth opposite its name below at the Offering Price.
Number of New Shares
DBS Bank 22,960,000
DMG 9,840,000
Total 32,800,000
The Management and Underwriting Agreement and the Placement Agreement may be terminated
at any time prior to delivery of the New Shares pursuant to the terms of the Management and
Underwriting Agreement and the Placement Agreement and upon the occurrence of certain
events, including, among other things, certain force majeure events. The closing of the Offering
is conditional upon certain events, including the fulfilment, or waiver by the SGX-ST, of all
conditions contained in the letter of eligibility from the SGX-ST for the listing and quotation of all
our issued Shares, the New Shares, the Cornerstone Shares, the Option Shares, Award Shares
and the Additional Shares on the Official List of the SGX-ST.
The Joint Issue Managers, Bookrunners and Underwriters may make sub-placement
arrangements in respect of their obligations under the Management and Underwriting Agreement
and the Placement Agreement, upon such terms and conditions as they deem fit.
PLAN OF DISTRIBUTION
252
The completion of the Placement and the Public Offer are each conditional upon the completion
of the other.
The Offering Price was determined following a book-building process by agreement among, us,
and the Joint Issue Managers, Bookrunners and Underwriters. Among the factors that were taken
into account in determining the Offering Price are the demand for the New Shares, the prevailing
conditions in the securities market, current market valuations of publicly traded companies that
we, and the Joint Issue Managers, Bookrunners and Underwriters believe to be reasonably
comparable to us, an assessment of our recent historical performance, estimates of our business
potential and earnings prospects, the current state of our development and the current state of our
industry and economy as a whole.
The New Shares are being offered and sold outside the United States in offshore transactions in
reliance on Regulation S under the US Securities Act.
Commission
Pursuant to the Management and Underwriting Agreement between our Company and the Joint
Issue Managers, Bookrunners and Underwriters, our Company appointed the Joint Issue
Managers, Bookrunners and Underwriters to manage the Offering. The Joint Issue Managers,
Bookrunners and Underwriters will receive a management fee from our Company for services
rendered in connection with the Offering.
We will pay the Joint Issue Managers, Bookrunners and Underwriters an underwriting and
placement commission (excluding GST) of 3.5% of total gross proceeds of the Offering (including
proceeds raised from the sale of the Additional Shares, if the Over-allotment Option is exercised)
and the issuance of the Cornerstone Shares.
Purchasers of Shares, other than those in the Public Offer, may be required to pay to the Joint
Issue Managers, Bookrunners and Underwriters a brokerage fee up to 1.0% of the Offering Price
at the time of settlement.
Indemnities
Under the Management and Underwriting Agreement and the Placement Agreement, our
Company shall hold the Joint Issue Managers, Bookrunners and Underwriters, its sub-
underwriters and sub-placement agents, their affiliates, associated and related companies and
corporations, as well as their respective directors, employees and agents (including the directors
and employees of such agents) (collectively, the “Indemnified Persons”) fully and effectively
indemnified against all liabilities, costs and expenses due to any claim which may be brought or
threatened to be brought against any of them in relation to the Offering (whether or not such claim
is successful, compromised or settled) arising out of, inter alia:
(a) any delay or failure by our Company to comply with any terms of the Management and
Underwriting Agreement, the Placement Agreement or requirements of any statute or
statutory regulation, the Listing Manual, governmental or ministerial order or decree, or
decision, notice, regulation, guidance note or circular of any governmental or quasi-
sovereign authority, the SGX-ST or the Securities Industry Council or any other authority
(including without limitation to the foregoing, any directive or order by the Authority pursuant
to the Securities and Futures Act);
PLAN OF DISTRIBUTION
253
(b) this Prospectus (or any amendment or supplement thereto) not containing or being alleged
not to contain all information material in the context of the Offering and the Cornerstone
Tranche, or any statement contained herein or in any information which is otherwise supplied
by our Company to the Joint Issue Managers, Bookrunners and Underwriters in connection
with the Offering being untrue, incorrect or misleading;
(c) any actual or alleged misrepresentation or omission contained in this Prospectus; and
(d) any breach or alleged breach of our Company of any of the representations, warranties and
undertakings in the Management and Underwriting Agreement and the Placement
Agreement or any of the obligations of the Company or any of their respective directors,
officers or employees contained in the Management and Underwriting Agreement and
Placement Agreement,
including in each case (but without prejudice to the generality of the foregoing) all costs, charges
and expenses which the Indemnified Persons may properly incur or bear in disputing any such
claim made against them or in establishing any claim on their part under the foregoing, in each
case except in relation to any claim arising out of the gross negligence, fraud or wilful default of
the Indemnified Person as may be determined by a final judgment of a court of competent
jurisdiction.
The indemnity provides that where the indemnification is unavailable or insufficient, the Company
shall contribute to the amount payable by the Indemnified Person in such proportion as is
appropriate to reflect the relative benefits received by the Company and the Joint Issue Managers,
Bookrunners and Underwriters from the Offering.
Where such allocation is prohibited by applicable law, then the Company and the Joint Issue
Managers, Bookrunners and Underwriters shall contribute proportionately to reflect both the
relative benefits and relative fault of the Company and the Joint Issue Managers, Bookrunners and
Underwriters, as the case may be, in connection with the statements or omissions which resulted
in such losses claims, damages or liabilities (or actions in respect thereof), as well as any other
relevant equitable considerations. The relative benefits received by the Company and the Joint
Issue Managers, Bookrunners and Underwriters shall be deemed to be in the same proportion as
the total net proceeds from the Offering (but before deducting total underwriting commissions to
be paid to the Joint Issue Managers, Bookrunners and Underwriters) to be received by the
Company bear to the total underwriting commissions to be received by the Joint Issue Managers,
Bookrunners and Underwriters in respect of the Offering. The relative fault is determined by
reference to, among other things, whether the untrue or alleged untrue statement of a material fact
or the omission or alleged omission to state a material fact relates to information supplied by the
Company or the Joint Issue Managers, Bookrunners and Underwriters, as the case may be, and
the respective parties’ relative intent, knowledge, access to information and opportunity to correct
or prevent such statement or omission. No Joint Issue Manager, Bookrunner and Underwriter is
required to contribute any amount in excess of the amount by which the total price at which the
Shares underwritten by it and distributed to the public under the Offering exceeds the amount of
damages which such Joint Issue Manager, Bookrunner and Underwriter has otherwise been
required to pay by reason of such untrue or alleged untrue statement of material fact or omission
or alleged omission.
PLAN OF DISTRIBUTION
254
OVER-ALLOTMENT OPTION AND PRICE STABILISATION
In connection with the Offering, we have granted the Stabilising Manager, an Over-allotment
Option exercisable by the Stabilising Manager, in whole or in part, on its own behalf and on behalf
of the Joint Issue Managers, Bookrunners and Underwriters, on one or more occasions, during the
period commencing on the Listing Date until the earlier of (i) the date falling 30 days from the
Listing Date or (ii) the date when the Stabilising Manager (or persons acting on its behalf) has
bought, on the SGX-ST, an aggregate of 3,280,000 Additional Shares, representing an aggregate
of not more than 10% of the Offering, to undertake stabilising actions (“Expiry Date”) solely to
cover the over-allotment of Shares, if any.
In connection with the Offering, the Stabilising Manager (or persons acting on behalf of the
Stabilising Manager), may, in its discretion, but subject always to applicable laws and regulations,
over-allot Shares or effect transactions with a view to supporting the market price of the Shares
at a level higher than that which would otherwise prevail in the open market. Such transactions
may be effected on the SGX-ST and other jurisdictions where it is permissible to do so, in each
case in compliance with all applicable laws and regulations. Such transactions, if commenced,
may be discontinued at any time by the Stabilising Manager without notice (unless such notice is
required by law) and shall not be effected after the Expiry Date.
Neither we, nor the Joint Issue Managers, Bookrunners and Underwriters make any
representation or prediction as to the direction or magnitude of any effect that the transactions
described above may have on the price of our Shares. In addition, neither we, nor the Joint Issue
Managers, Bookrunners and Underwriters make any representation that the Stabilising Manager
will engage in such transactions or that such transactions once commenced, will not be
discontinued without notice (unless such notice is required by law). The Stabilising Manager will
be required to make a public announcement through the SGX-ST on the cessation of the
stabilising action and the amount of the Over-allotment Option that has been exercised no later
than the start of the trading day of the SGX-ST immediately after the day of cessation of stabilising
action.
SHARE LENDING AGREEMENT
In connection with settlement and stabilisation, the Stabilising Manager has entered into a share
lending agreement (the “Share Lending Agreement”) with Mr. Lim Chung Chun pursuant to which
the Stabilising Manager may borrow up to 3,280,000 Shares for the sole purpose of facilitating
settlement of over-allocations, if any, made in connection with the Offering. Any Shares that may
be borrowed by the Stabilising Manager under the Share Lending Agreement will be returned by
the Stabilising Manager to Mr. Lim Chung Chun either through the purchase of Shares in the open
market by the Stabilising Manager in the conduct of stabilisation activities or through the exercise
of the Over-allotment Option by the Stabilising Manager.
INTERESTS OF THE JOINT ISSUE MANAGERS, BOOKRUNNERS AND UNDERWRITERS
Each of the Joint Issue Managers, Bookrunners and Underwriters engages in transactions with
and performs services for us in the ordinary course of business and have engaged, and may in
the future engage, in commercial banking, trading and/or investment banking transactions with
our Group, for which it has received, and may in future, receive customary fees. DBS is also our
Principal Banker and Receiving Bank.
PLAN OF DISTRIBUTION
255
In addition, pursuant to the Management and Underwriting Agreement and the Placement
Agreement, we have appointed each of the Joint Issuer Managers, Bookrunners and Underwriters
as the joint issue managers, bookrunners and underwriters and placement agents of the Offering
and we will pay each of the Joint Issuer Managers, Bookrunners and Underwriters a fee for
providing such services to us, the details of which are set out above.
Save as disclosed above in the section entitled “Shareholders” of this Prospectus, we do not have
any material relationship with the Joint Issue Managers, Bookrunners and Underwriters.
DISTRIBUTION AND SELLING RESTRICTIONS
The distribution of this document or any offering material and the offering, sale or delivery of
Shares is restricted by law in certain jurisdictions. Therefore, persons who may come into
possession of this document or any offering material are advised to consult with their own legal
advisers as to what restrictions may be applicable to them and to observe such restrictions. This
document may not be used for the purpose of an offer or invitation in any circumstances with
which such offer or invitation is not authorised.
No action has been or will be taken in any jurisdiction that would permit a public offering of the
Shares being offered outside Singapore or the possession, circulation or distribution of this
document or any other material relating to us or the Shares in any jurisdiction where action for the
purpose is required. Accordingly, the Shares may not be offered or sold, directly or indirectly, and
neither this document nor any other offering material or advertisement in connection with the
Shares may be distributed or published, in or from any country or jurisdiction except under
circumstances that will be in compliance with any applicable rules or regulations of any such
country or jurisdiction.
United States of America
The New Shares have not been and will not be registered under the US Securities Act, and may
not be offered or sold within the United States except in certain transactions exempt from the
registration requirements of the US Securities Act. The Joint Issue Managers, Bookrunners and
Underwriters will only sell the New Shares outside the United States in offshore transactions in
reliance on Regulation S under the US Securities Act. Terms used in this paragraph have the
meanings given to them by Regulation S under the US Securities Act.
Hong Kong
This Prospectus does not constitute an offer to the public in Hong Kong to subscribe for the
Shares. The contents of this Prospectus have not been reviewed by any regulatory authority in
Hong Kong and no action has been taken in Hong Kong to authorise or register this Prospectus
or to permit the distribution of this Prospectus or any document issued in connection with it.
No Shares of our Company have been or may be offered or sold in Hong Kong or offered or
directed from outside Hong Kong to any person in Hong Kong, by means of any document, other
than (a) to “professional investors” as defined in the SFO and any rules made under that
Ordinance; or (b) in other circumstances which do not result in the document being a “prospectus”
as defined in the Companies (Winding Up and Miscellaneous Provisions) Ordinance (Cap. 32) of
Hong Kong or which do not constitute an offer to the public within the meaning of that Ordinance.
PLAN OF DISTRIBUTION
256
No advertisement, invitation or document relating to the Shares of our Company, which is directed
at, or the contents of which are likely to be accessed or read by, the public in Hong Kong has been
or will be issued other than with respect to such Shares which are or are intended to be disposed
of only to persons outside Hong Kong or only to “professional investors” as defined in the SFO and
any rules made under that Ordinance.
Malaysia
No prospectus or other offering material or document in connection with the offer and sale of the
New Shares has been or will be registered with the SC pursuant to the CMSA and no approval for
the offering of the New Shares has been obtained from the SC pursuant to the CMSA. Accordingly,
this offering document and any other document or material in connection with the offer or sale, or
invitation for subscription or purchase, of the New Shares may not be circulated or distributed, nor
may the New Shares be offered or sold, or be made the subject of an invitation for subscription
or purchase, whether directly or indirectly, to persons in Malaysia other than (i) a closed end fund
approved by the SC; (ii) a holder of a CMSL; (iii) a person who acquires the New Shares, as
principal, if the aggregate consideration for the acquisition is not less than Ringgit 250,000 (or
equivalent in a foreign currency) for each transaction whether such amount is paid for in cash or
otherwise; (iv) a corporation with total net assets exceeding Ringgit 10 million (or equivalent in a
foreign currency) based on the latest audited accounts; (v) a bank licensee or insurance licensee
as defined in the Labuan Financial Services and Securities Act 2010; or (vi) any other person as
may be specified by the SC in any guideline issued under Section 377 of the CMSA; provided that,
in each of the preceding categories (i) to (vi), the distribution of the New Shares is made by a
holder of a CMSL who carries on the business of dealing in securities. This offering document
does not constitute and may not be used for the purpose of a public offering or an issue, offer for
subscription or purchase, invitation to subscribe for or purchase any securities requiring the
registration of a prospectus with the SC under the CMSA.
United Kingdom
This Prospectus does not constitute an approved prospectus for the purposes of and as defined
in Section 85 of the Financial Services and Markets Act 2000 (as amended) (the “FSMA”), has not
been prepared in accordance with the prospectus rules issued by the UK Financial Conduct
Authority (the “FCA”) pursuant to Section 73A of the FSMA and has not been approved by or filed
with the FCA or by any other authority which would be a competent authority for the purposes of
the Prospectus Directive. The New Shares may not be offered or sold and will not be offered or
sold to the public in the UK (within the meaning of Sections 85 and 102B of the FSMA) save in the
circumstances where it is lawful to do so without an approved prospectus (within the meaning of
Section 85 of the FSMA) being made available to the public before the offer is made. In addition,
no person may communicate or cause to be communicated any invitation or inducement to engage
in investment activity (within the meaning of Section 21 of the FSMA) received by it in connection
with the issue or sale of any New Shares except in circumstances in which Section 21(1) of the
FSMA does not apply to our Company.
This Prospectus is only distributed to and is only directed at persons in the United Kingdom what
are qualified investors within the meaning of Article 2(1)(e) of the Prospectus Directive: (i) who
have professional experience in matters relating to investments falling within Article 19(5) of the
Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (as amended) (the
“Order”); and/or (ii) who are high net worth bodies corporate, unincorporated associations and
partnerships and trustees of high value trusts as described in Article 49(2)(a) to (d) of the Order;
or (iii) who are persons to whom it may otherwise be lawfully communicated (all such persons
referred to in (i) to (iii) above together being referred to as “Relevant Persons”. The New Shares
PLAN OF DISTRIBUTION
257
are only available to, and an investment activity will only be engaged with, Relevant Persons. Any
person that is not a Relevant Person should not act on or rely on this document or any of its
contents.
European Economic Area
This Prospectus is not a prospectus for the purposes of the Prospectus Directive (as defined
below).
In relation to each Member State of the European Economic Area that has implemented the
Prospectus Directive (each, a “Relevant Member State”) an offer to the public of any New Shares
which are the subject of the offer contemplated by this Prospectus may not be made in that
Relevant Member State except that an offer to the public in that Relevant Member State of any
New Shares may be made at any time under the following exemptions under the Prospectus
Directive, if they have been implemented in that Relevant Member State:
(a) to any legal entity that is a qualified investor as defined in the Prospectus Directive;
(b) to fewer than 100 or, if the Relevant Member State has implemented the relevant provisions
of the 2010 PD Amending Directive, 150 natural or legal persons (other than qualified
investors as defined in the Prospectus Directive) as permitted under the Prospectus
Directive, subject to obtaining the prior consent of the Joint Issue Managers, Bookrunners
and Underwriters nominated by our Company for such offer; or
(c) in any other circumstances falling within Article 3(2) of the Prospectus Directive,
provided that no such offer of New Shares shall result in a requirement for the publication by our
Company or the Joint Issue Managers, Bookrunners and Underwriters of a prospectus pursuant
to Article 3 of the Prospectus Directive.
Neither our Company nor the Joint Issue Managers, Bookrunners and Underwriters have
authorised, nor do they authorise, the making of any offer of New Shares through any financial
intermediary, other than offers made by the Joint Issue Managers, Bookrunners and Underwriters
which constitute the final offering of New Shares contemplated in this Prospectus. Accordingly, no
purchaser of New Shares, other than the Joint Issue Managers, Bookrunners and Underwriters,
is authorised to make any further offer of the New Shares on behalf of our Company.
For purposes of this provision, the expression an “offering to the public” in relation to any New
Shares in any Relevant Member Sate means the communication in any form and by any means
of sufficient information on the terms of the offer and any New Shares to be offered so as to enable
an investor to decide to purchase any New Shares, as the same may be varied in that Relevant
Member State by any measure implementing the Prospectus Directive in that Relevant Member
State and the expression “Prospectus Directive” means Directive 2003/71EC (and amendments
thereto, including the 2010 PD Amending Directive to the extent implemented in the Relevant
Member State) and includes any relevant implementing measure in each Relevant Member State
and the expression “2010 PD Amending Directive” means Directive 2010/73/EU.
PLAN OF DISTRIBUTION
258
1. INFORMATION ON DIRECTORS AND EXECUTIVE OFFICERS
(a) There is no shareholding qualification for Directors in our Articles of Association.
(b) Save as disclosed below, as at the date of this Prospectus, none of our Directors or
Executive Officers:
(i) has, at any time during the last ten (10) years, had 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 or at any time within two (2) years from the
date he ceased to be a partner;
(ii) has, at any time during the last ten (10) years, had 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) has any unsatisfied judgment against him;
(iv) has ever been convicted 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) has ever been convicted 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) has at any time during the last ten (10) years, had judgment entered against him
in any civil proceedings 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 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) has ever been convicted in Singapore or elsewhere of any offence in connection
with the formation or management of any entity or business trust;
(viii) has ever been disqualified from acting as a director of any 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;
GENERAL AND STATUTORY INFORMATION
259
(x) has ever, to his knowledge, been concerned with the management or conduct, in
Singapore or elsewhere, of the affairs of:
(aa) any corporation which has been investigated for a breach of any law or
regulatory requirement governing corporations in Singapore or elsewhere;
(bb) 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;
(cc) any business trust which has been investigated for a breach of any law or
regulatory requirement governing business trusts in Singapore or elsewhere;
or
(dd) 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; or
(xi) has been the subject of any current or past investigation or disciplinary
proceedings, or has been reprimanded or issued by warning, by the Authority or
any other regulatory authority, exchange, professional body or government
agency, whether in Singapore or elsewhere.
Disclosures relating to Mr. Lim Chung Chun
In his capacity as CEO and as a director of iFAST HK, Mr. Lim is concerned with the
management in relation to iFAST HK which is being investigated by the SFC pursuant to
182(1) of the SFO and which has also been subject to periodic inspections by SFC. Please
refer to the section entitled “Government Regulations and Licensing” of this Prospectus for
further details of the SFC Investigation.
In his capacity as CEO and as a director of iFAST Financial, Mr. Lim is concerned with the
management in relation to iFAST Financial, which has been subject to periodic inspections
by MAS in the past. iFAST Financial has also received various supervisory warnings,
reprimands and received an offer of composition in the past in relation to breaches of the
relevant laws, regulations, guidelines and/or notices. Please refer to the section entitled
“Government Regulations and Licensing” of this Prospectus for further details.
Disclosures relating to Mr. Yao Chih Matthias, Mr. Ling Peng Meng, Mr. Kok Chee Wai
and Mr. Ng Loh Ken Peter
Mr. Yao Chih Matthias, Mr. Ling Peng Meng, Mr. Kok Chee Wai and Mr. Ng Loh Ken Peter
are independent directors of our Company. Mr. Yao Chih Matthias, Mr. Ng Loh Ken Peter and
Mr. Kok Chee Wai were appointed as directors of iFAST Financial on 1 August 2013, and Mr.
Ling Peng Meng was appointed as a director of iFAST Financial on 4 September 2013.
GENERAL AND STATUTORY INFORMATION
260
iFAST Financial has been subject to periodic inspections by MAS in the past. iFAST Financial
has also received various supervisory warnings, reprimands and received an offer of
composition in the past in relation to breaches of the relevant laws, regulations, guidelines
and/or notices. Please refer to the section entitled “Government Regulations and Licensing”
of this Prospectus for further details.
Disclosures relating to Mr. Low Huan Ping
Mr. Low was the director of iFAST Financial from 30 June 2005 to 6 March 2006, which has
been subject to periodic inspections by MAS in the past. iFAST Financial has also received
various supervisory warnings, reprimands and received an offer of composition in the past in
relation to breaches of the relevant laws, regulations, guidelines and/or notices. Please refer
to the section entitled “Government Regulations and Licensing” of this Prospectus for further
details.
Mr. Low is also the non-executive director of M1 Limited (“M1”), and was appointed to the
board of director of M1 on 1 September 1994. M1 had been fined in the past by the Infocomm
Development Authority (“IDA”) for certain breaches and non-compliance including (i)
breaches to the Code of Practice for Telecommunication Service Resiliency and the Code of
Practice for Telecommunication Outage Reporting due to mobile service disruptions, and (ii)
failure to comply with the IDA’s Quality of Service Standards for 3G Mobile Services.
Disclosures relating to Mr. Kelvin Yip Hok Yin
In his capacity as COO of iFAST HK, Mr. Kelvin Yip Hok Yin is concerned with the
management in relation to iFAST HK which is being investigated by the SFC pursuant to
182(1) of the SFO. Please refer to the section titled “Government Regulations and Licensing”
of this Prospectus for further details of the SFC Investigation.
Disclosures relating to Mr. Wong Sui Jau
As a part of the research team at Fundsupermart.com, Mr. Wong Sui Jau had received a
letter from MAS dated 26 February 2003, reprimanding him for acting as a representative of
Fundsupermart.com without holding a valid representative licence under the FAA. Please
refer to the section titled “Government Regulations and Licensing – Regulatory Inspections
and Investigations” of this Prospectus for further details.
2. MATERIAL CONTRACTS
The following contracts, not being contracts entered into in the ordinary course of business,
have been entered into by our Group within the two (2) years preceding the date of
lodgement of this Prospectus and are or may be material:
(a) Management Agreement and Underwriting Agreement dated 4 December 2014;
(b) Placement Agreement dated 4 December 2014;
(c) The Deed of Arrangement dated 17 November 2014 between our Company and
Pecuniam in which Pecuniam has granted a right of first refusal for so long as there are
common controlling shareholders in respect of its interest in iFAST India and also
undertaken not to expand its business and operations outside of India unless it has
approval from our Company’s Board and Audit Committee;
GENERAL AND STATUTORY INFORMATION
261
(d) Convertible Loan Letters dated 15 November 2013 and 13 January 2014 from our
Company to Providend granting a loan of S$70,000 and S$180,000 to Providend
respectively. Both loans were granted at an interest rate of five per cent (5%) per
annum, with no collateral and/or security required from Providend in consideration for
the loans. Pursuant to the terms stated in the letters, the loans will be converted as part
of our Company’s investment stake in Providend upon MAS’ approval of our Company’s
investment stake in Providend. The aggregate loan amount of S$250,000 was
capitalised into preferred shares in the capital of Providend as part of the consideration
for the acquisition of 30,384 newly issued preferred shares at S$13.17 per preferred
share pursuant to the Share Purchase Agreement dated 20 June 2014;
(e) Share Purchase Agreement dated 20 June 2014 between our Company and Providend
pursuant to which we:
(i) acquired 30,384 newly issued preferred shares at S$13.17 per preferred share for
a 19.9% shareholding interest in Providend which was completed on 25 July 2014.
The aggregate consideration of approximately S$400,157 was satisfied through
the capitalisation of the S$250,000 in aggregate amount of convertible loans
granted pursuant to the convertible loan letters dated 15 November 2013 and
13 January 2014, with the remainder in cash;
(ii) were provided with the option to purchase an additional 22,032 preferred shares
of Providend for a total purchase consideration of S$319,244. Our exercise of such
option to purchase preferred shares will increase our shareholding interest in
Providend to 30.0%. For further details on our acquisition, please refer to the
section entitled “Our Business – History and Development ” of this Prospectus for
further details;
(f) Transfer Notice dated 12 August 2013 from our Company to DAPH and iFAST India
setting out our Company’s desire to transfer the 67,154 shares held by us in iFAST India
at a price of S$25.31 per share (“iFAST India Sale Shares”), which is equivalent to a
premium of 5% on the net tangible asset value attributable to iFAST India’s shares
based on iFAST India’ unaudited consolidated management accounts as at 30 June
2013;
(g) Non-allocation Notice dated 11 September 2013 from iFAST India to DAPH and our
Company notifying our Company that DAPH had not applied for any of the iFAST India
Sale Shares within the prescribed period and that our Company is therefore entitled to
transfer all of the iFAST India Sale Shares;
(f) Tag-along Notice dated 11 September 2013 and Supplemental Tag-along Notice dated
24 September 2013 from our Company to DAPH in connection with the Tag-along Offer
and Supplemental Tag-along Offer made by Pecuniam to DAPH dated 11 September
2013 and 24 September 2013 respectively;
(g) Sale and Purchase Agreement dated 3 October 2013 between our Company and
Pecuniam pursuant to which we sold 67,154 ordinary shares in the capital of iFAST
India, representing all of the ordinary shares in iFAST India held by us for an aggregate
cash consideration of S$1,699,667.74;
(h) Convertible Loan Agreement dated 3 October 2013 between our Company and
Pecuniam pursuant to which we made a loan of S$3,322,668.94 to Pecuniam whereby
GENERAL AND STATUTORY INFORMATION
262
for as long as the loan remains outstanding, such loan can be converted into ordinary
shares of Pecuniam prior to 8 October 2013 or such other date as we and Pecuniam
may agree to in writing;
(i) Sale and Purchase Agreement dated 7 March 2014 between our Company and RHB
pursuant to which we acquired RHB’s 34.88% shareholding interest in iFAST-OSK Sdn
Bhd comprising 9,070,000 ordinary shares of RM1.00 each which was completed on 18
July 2014; and
(j) the Cornerstone Subscription Agreements in relation to the subscription of the
Cornerstone Shares by the Cornerstone Investors, as referred to in the section titled
“Shareholders – Cornerstone Investors” of this Prospectus.
3. LITIGATION AND ARBITRATION PROCEEDINGS
To the best of our knowledge and belief, having made all reasonable enquiries, neither the
Company nor any of our subsidiaries is engaged in any litigation or arbitration proceedings
including those which are pending or known to be contemplated which may have, or which
have had in the twelve (12) months preceding the date of lodgement of this Prospectus, a
material effect on the financial position or profitability of our Group.
4. MISCELLANEOUS
(a) 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. In the ordinary course
of business, the Receiving Bank will deploy these monies in the inter-bank money
market. All profits derived from the deployment of such monies will accrue to 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.
(b) 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 another corporation or units of another business trust,
which has occurred during the period between 1 January 2013 and the Latest
Practicable Date.
(c) Save as disclosed in this Prospectus, our Directors are not aware of any event which
has occurred since the end of the period covered by the most recent interim financial
statements included in this Prospectus to the Latest Practicable Date which may have
a material effect on the financial information of our Group provided in this Prospectus.
(d) Save as disclosed in this Prospectus in the sections entitled “Risk Factors”,
“Management’s Discussion and Analysis of Results of Operations and Financial
Position” and “Prospects, Business Strategies and Plans” of this Prospectus, the
financial conditions and operations of our Group are not likely to be affected by any of
the following:
(i) 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;
GENERAL AND STATUTORY INFORMATION
263
(ii) material commitments for capital expenditure;
(iii) unusual or infrequent events or transactions or any significant economic changes
that will material affect the amount of reported income from operations; and
(iv) known trends or uncertainties that have had or that we reasonably expect to have
a material favourable or unfavourable impact on revenue or operating income.
(e) We currently have no intention of changing our Group’s present auditors after the listing
of our Company on the SGX-ST.
Details including the names, addresses and professional qualifications (including
membership in a professional body) of the auditors of our Company for the last three (3)
financial years ended 31 December 2013 and up to the date of lodgement of this
Prospectus are as follows:
Name/Address Professional Body
Partner-in-charge/
Professional
Qualification
KPMG LLP/16
Raffles Quay #22-00
Hong Leong Building
Singapore 048581
Institute of Singapore
Chartered Accountants
Jeya Poh Wan S/O K.
Suppiah/Chartered
Accountant of Singapore
(f) Each of Stamford Law Corporation and Rajah & Tann Singapore LLP does not make, or
purport to make, any statement in this Prospectus or any statement upon which a
statement in this Prospectus 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 opinion in this Prospectus.
(g) The disclosures in this Prospectus which relate to SFC’s inspection and investigation of
iFAST HK are made pursuant to the requirements of the laws, legislations, regulations
and/or statutory requirements in Singapore. Any content in this Prospectus related to
the SFC or the aforementioned inspection and investigation have not been reviewed,
endorsed or approved by the SFC.
GENERAL AND STATUTORY INFORMATION
264
5. INTERESTS OF INDEPENDENT MARKET RESEARCH CONSULTANTS
None of the Independent Market Research Consultants named in this Prospectus:
(i) is employed on a contingent basis by our Company or our subsidiaries;
(ii) has a material interest, whether direct or indirect, in our Shares or in the shares of our
subsidiaries; or
(iii) has a material economic interest, whether direct or indirect, in our Company, including
an interest in the success of the Offering.
6. CONSENTS
(a) The Independent Auditors and Reporting Accountants have given and have not
withdrawn their written consent to the issue of this Prospectus with the inclusion herein
of the “Audited Consolidated Financial Statements for the Financial Years Ended
31 December 2011, 2012 and 2013”, “Unaudited Interim Consolidated Financial
Statements for the Nine Months Ended 30 September 2014” and “Unaudited Pro Forma
Consolidated Financial Information for the Financial Year Ended 31 December 2013
and Nine Months Ended 30 September 2014” as set out in Appendix A, Appendix B and
Appendix C of this Prospectus respectively in the form and context in which they are
included and references to their name in the form and context in which it appears in this
Prospectus and to act in such capacity in relation to this Prospectus.
(b) Each of DBS Bank and DMG has given and has not withdrawn its written consent to
being named in the Prospectus as Joint Issue Managers, Bookrunners and
Underwriters and to act in such capacity in relation to this Prospectus.
(c) Each of The Platforum and Investment Trends Pty Limited has given and has not
withdrawn its written consent to the issue of this Prospectus with the inclusion herein of
(i) its name and all references herein, (ii) the statements attributable to and issued by
it for purpose of inclusion in the section entitled “Industry Overview” of this Prospectus,
in the form and context in which they are included and appear in this Prospectus and
to act in such capacity in relation to this Prospectus.
(d) Cerulli Associates Asia Pte Ltd has given and has not withdrawn its written consent to
the issue of this Prospectus with the inclusion herein of (i) its name and all references
herein, (ii) the statements attributable to and issued by it for purpose of inclusion in the
section entitled “Industry Overview” of this Prospectus, and (iii) the statements
attributable to it in the sections entitled “Overview of Our Group – Our Competitive
Strengths”, “Management’s Discussion and Analysis of Results of Operations and
Financial Position”, “Our Business” and “Prospects, Business Strategies and Plans” of
this Prospectus, in the form and context in which they are included and appear in this
Prospectus and to act in such capacity in relation to this Prospectus.
(e) The Legal Advisers to the Offering and to the Company as to Singapore Law, the Legal
Advisers to the Joint Issue Managers, Bookrunners and Underwriters as to Singapore
Law, the Legal Advisers to the Company as to Malaysia Law, Hong Kong Law and PRC
Law the Share Registrar, the Principal Bankers and Receiving Bank do not make or
purport to make any statement in this Prospectus or any statement upon which a
statement in this Prospectus is based and each of them makes no representation
GENERAL AND STATUTORY INFORMATION
265
regarding any statement in this Prospectus and to the maximum extent permitted by
law, expressly disclaim and takes no responsibility for any liability to any person which
is based on, or arises out of, any statement, information or opinions in, or omission
from, this Prospectus.
7. RESPONSIBILITY STATEMENT BY OUR DIRECTORS
This Prospectus has been reviewed and approved by our Directors and they individually and
collectively accept full responsibility for the accuracy of the information given in this
Prospectus and confirm after having made all reasonable enquiries that, to the best of their
knowledge and belief, this Prospectus constitutes full and true disclosure of all material facts
about the Offering, our Company and its subsidiaries, and our Directors are not aware of any
facts the omission of which would make any statement in this Prospectus misleading.
Where information in this Prospectus has been extracted from published or otherwise
publicly available sources or obtained from a named source, the sole responsibility of the
Directors has been to ensure that such information has been accurately and correctly
extracted from those sources and/or reproduced in this Prospectus in its proper form and
context.
8. DOCUMENTS AVAILABLE FOR INSPECTION
The following documents may be inspected at our registered office at 10 Collyer Quay,
#26-01 Ocean Financial Centre, Singapore 049315 during normal business hours for a
period of six (6) months from the date of registration of this Prospectus:
(a) the Memorandum and Articles of Association of our Company;
(b) the “Audited Consolidated Financial Statements for the Financial Years Ended 31
December 2011, 2012 and 2013”, “Unaudited Interim Consolidated Financial
Statements for the Nine Months Ended 30 September 2014” and “Unaudited Pro Forma
Consolidated Financial Information for the Financial Year Ended 31 December 2013
and Nine Months Ended 30 September 2014” as set out in Appendix A, Appendix B and
Appendix C of this Prospectus respectively;
(c) the respective audited financial statements of our Company and our subsidiaries, where
applicable, for FY2011, FY2012 and FY2013;
(d) the material contracts referred to in paragraph 2 of this section;
(e) the information prepared by each of The Platforum, Investment Trends Pty Limited and
Cerulli Associates Asia Pte Ltd;
(f) the letters of consent referred to in paragraph 6 of this section; and
(g) the Service Agreement referred to in the section entitled “Directors, Management and
Staff – Service Agreement” of this Prospectus.
GENERAL AND STATUTORY INFORMATION
266
iFAST Corporation Ltd.
and its Subsidiaries
Registration Number: 200007899C
Consolidated Financial Statements
Financial years ended 31 December 2011, 2012 and 2013
APPENDIX A – AUDITED CONSOLIDATED FINANCIAL STATEMENTS FOR
THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012 AND 2013
A-1
Independent auditors’ report
The Board of Directors
iFAST Corporation Ltd. and its subsidiaries
Report on the financial statements
We have audited the accompanying financial statements of iFAST Corporation Ltd. (the Company)
and its subsidiaries (the Group), which comprise the consolidated statements of financial position
as at 31 December 2011, 2012 and 2013, the consolidated statements of profit or loss, statements
of comprehensive income, statements of changes in equity and statements of cash flows for the
years then ended 31 December 2011, 2012 and 2013, and a summary of significant accounting
policies and other explanatory information, as set out on pages A-4 to A-64.
Management’s responsibility for the financial statements
Management is responsible for the preparation and fair presentation of these consolidated
financial statements in accordance with Singapore Financial Reporting Standards, and for
devising and maintaining a system of internal accounting controls sufficient to provide a
reasonable assurance that assets are safeguarded against loss from unauthorised use or
disposition; and transactions are properly authorised and that they are recorded as necessary to
permit the preparation of true and fair profit and loss accounts and balance sheets and to maintain
accountability of assets.
Auditors’ responsibility
Our responsibility is to express an opinion on these consolidated 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 consolidated financial statements are free from
material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and
disclosures in the consolidated financial statements. The procedures selected depend on the
auditor’s judgement, including the assessment of the risks of material misstatement of the
consolidated financial statements, whether due to fraud or error. In making those risk
assessments, the auditor considers internal control relevant to the entity’s preparation and fair
presentation of consolidated financial statements 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 consolidated financial
statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a
basis for our audit opinion.
APPENDIX A – AUDITED CONSOLIDATED FINANCIAL STATEMENTS FOR
THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012 AND 2013
A-2
Opinion
In our opinion, the consolidated financial statements of the Group are properly drawn up in
accordance with Singapore Financial Reporting Standards to present fairly, in all material
respects, the state of affairs of the Group as at 31 December 2011, 2012 and 2013 and the results
of operations, changes in equity and cash flows of the Group for the years ended 31 December
2011, 2012 and 2013.
Restriction on distribution and use
This report is made solely to you as a body and for the inclusion in the prospectus to be issued
in relation to the proposed offering of the shares of the Company in connection with the
Company’s listing on the Singapore Exchange Securities Trading Limited.
KPMG LLP
Public Accountants and
Chartered Accountants
Singapore
4 December 2014
Jeya Poh Wan S/O K. Suppiah
Partner
APPENDIX A – AUDITED CONSOLIDATED FINANCIAL STATEMENTS FOR
THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012 AND 2013
A-3
Consolidated statements of financial position
As at 31 December 2011, 2012 and 2013
Note 2011 2012 2013
$ $ $
Assets
Plant and equipment 4 2,367,813 1,570,265 1,633,848
Intangible assets 5 402,392 296,023 663,838
Deferred tax assets 14 24,229 27,811 34,559
Other investments 9 1,754,357 3,455,810 2,011,502
Club membership 7 11,429 11,429 11,429
Total non-current assets 4,560,220 5,361,338 4,355,176
Current tax receivable – 16,784 5,489
Other investments 9 6,257,845 3,889,287 –
Trade and other receivables 8 15,315,940 14,652,693 16,763,911
Prepayments 603,343 732,774 613,549
Cash at bank and in hand 10 10,724,589 12,379,553 16,292,523
Money market funds 10 1,862,821 1,136,676 426,386
Total current assets 34,764,538 32,807,767 34,101,858
Held under trust
Client bank accounts 11 91,264,661 84,014,198 100,599,080
Client ledger balances 11 (91,264,661) (84,014,198) (100,599,080)
– – –
Total assets 39,324,758 38,169,105 38,457,034
Equity
Share capital 12 10,143,153 10,304,013 10,670,001
Reserves 12 11,142,325 13,108,398 13,295,747
Equity attributable to owners of the
Company 21,285,478 23,412,411 23,965,748
Non-controlling interests 4,396,723 2,842,884 658,049
Total equity 25,682,201 26,255,295 24,623,797
Liabilities
Unsecured bank loan 13 748,189 – –
Deferred tax liabilities 14 48,052 51,980 76,746
Other payables 15 – – 353,400
Total non-current liabilities 796,241 51,980 430,146
Unsecured bank loan 13 1,282,608 748,189 –
Trade and other payables 15 11,410,926 10,450,713 12,835,357
Current tax payable 152,782 662,928 567,734
Total current liabilities 12,846,316 11,861,830 13,403,091
Total liabilities 13,642,557 11,913,810 13,833,237
Total equity and liabilities 39,324,758 38,169,105 38,457,034
The accompanying notes form an integral part of these financial statements.
APPENDIX A – AUDITED CONSOLIDATED FINANCIAL STATEMENTS FOR
THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012 AND 2013
A-4
Consolidated statements of profit or loss
Financial years ended 31 December 2011, 2012 and 2013
Note 2011 2012 2013
$ $ $
Continuing operations
Revenue 16 61,122,834 56,413,970 69,470,123
Commission and fee paid or payable to third
party financial advisers (35,919,228) (30,123,194) (37,884,235)
25,203,606 26,290,776 31,585,888
Other operating income 17 57,874 84,922 163,971
Gain on distribution to owners of the Company 20 – – 617,650
Depreciation of plant and equipment (978,768) (786,603) (703,506)
Amortisation of intangible assets (335,020) (70,675) (168,621)
Staff costs (12,304,546) (11,918,447) (13,310,605)
Other operating expenses (9,190,915) (9,632,430) (9,398,966)
Results from operating activities 2,452,231 3,967,543 8,785,811
Finance income 59,380 45,858 39,528
Finance expense (137,198) (71,840) (10,376)
Net finance income/(expense) (77,818) (25,982) 29,152
Profit before tax 2,374,413 3,941,561 8,814,963
Tax expense 19 (252,352) (685,143) (572,751)
Profit from continuing operations 2,122,061 3,256,418 8,242,212
Discontinued operation
Loss from discontinued operation, net of tax 20 (1,945,319) (1,631,317) (3,151,835)
Profit for the year 18 176,742 1,625,101 5,090,377
Profit attributable to:
Owners of the Company from continuing
operations 2,771,516 3,741,551 8,474,397
Owners of the Company from discontinued
operation (767,881) (661,130) (2,713,106)
Non-controlling interests from continuing
operations (649,455) (485,133) (232,185)
Non-controlling interests from discontinued
operation (1,177,438) (970,187) (438,729)
Profit for the year 176,742 1,625,101 5,090,377
Earnings per share from continuing
operations
Basic earnings per share (cents) 22 1.4 1.9 4.2
Diluted earnings per share (cents) 22 1.4 1.9 4.1
Earnings per share
Basic earnings per share (cents) 22 1.0 1.5 2.9
Diluted earnings per share (cents) 22 1.0 1.5 2.8
The accompanying notes form an integral part of these financial statements.
APPENDIX A – AUDITED CONSOLIDATED FINANCIAL STATEMENTS FOR
THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012 AND 2013
A-5
Consolidated statements of comprehensive income
Financial years ended 31 December 2011, 2012 and 2013
Note 2011 2012 2013
$ $ $
Profit for the year 176,742 1,625,101 5,090,377
Other comprehensive income
Items that are or may be reclassified
subsequently to profit or loss:
Net change in fair value of available-for-sale
financial assets 736,899 592,628 235,403
Net change in fair value of available-for-sale
financial assets reclassified to profit or loss 18 (657,075) (397,776) (732,457)
Fair value of available-for-sale financial
assets on disposal of discontinued operation
reclassified to profit or loss 20 – – (250,430)
Foreign currency translation differences for
foreign operations (1,316,112) (726,420) (327,573)
Foreign currency translation differences on
disposal of discontinued operation
reclassified to profit or loss 20 – – 2,849,138
Other comprehensive income for the year,
net of tax (1,236,288) (531,568) 1,774,081
Total comprehensive income for the year (1,059,546) 1,093,533 6,864,458
Attributable to:
Owners of the Company 1,390,915 2,767,446 7,946,593
Non-controlling interests (2,450,461) (1,673,913) (1,082,135)
Total comprehensive income for the year (1,059,546) 1,093,533 6,864,458
Attributable to:
Owners of the Company
Total comprehensive income from continuing
operations, net of tax 2,780,518 3,634,391 8,470,967
Total comprehensive income from
discontinued operation, net of tax (1,389,603) (866,945) (524,374)
Total comprehensive income for the year
attributable to owners of the Company 1,390,915 2,767,446 7,946,593
The accompanying notes form an integral part of these financial statements.
APPENDIX A – AUDITED CONSOLIDATED FINANCIAL STATEMENTS FOR
THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012 AND 2013
A-6
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A-12
Consolidated statements of cash flows
Financial years ended 31 December 2011, 2012 and 2013
Note 2011 2012 2013
$ $ $
Cash flows from operating activities
Profit for the year 176,742 1,625,101 5,090,377
Adjustments for:
Depreciation of plant and equipment 4 1,103,801 856,300 743,682
Plant and equipment written off 30,003 – –
(Gain)/loss on disposal of plant and equipment (150) – 112
Amortisation of intangible assets 5 515,222 204,110 259,208
Impairment (reversal)/loss on trade receivables,
net (17,719) 2,615 7,857
Bad debt written off – – 2,073
Equity settled share-based payment
transactions 47,890 (3,574) 62,301
Dividend income on available-for-sale quoted
debt securities, net – – (20,432)
Gain on redemption of quoted debt securities (657,075) (397,776) (732,457)
Unrealised exchange loss, net 193,784 110,320 12,245
Gain on realisation of intangible assets 20 – – (81,895)
Gain on distribution to owners of the Company 20 – – (617,650)
Translation reserve realised, loss 20 – – 2,849,138
Fair value reserve realised, gain 20 – – (250,430)
Finance income (59,380) (45,858) (39,528)
Finance expense 137,198 71,840 10,376
Tax expense 252,352 685,143 572,751
1,722,668 3,108,221 7,867,728
Change in trade and other receivables 751,213 205,921 (2,521,309)
Change in trade and other payables (801,888) (763,674) 2,383,865
Cash generated from operations 1,671,993 2,550,468 7,730,284
Taxes paid (194,427) (191,231) (633,834)
Interest received 59,380 45,858 39,528
Interest paid (137,198) (71,840) (10,376)
Net cash from operating activities 1,399,748 2,333,255 7,125,602
Cash flows from investing activities
Purchase of plant and equipment (1,689,610) (91,849) (844,693)
Purchase of intangible assets (24,236) (122,036) (131,699)
Proceeds from disposal of plant and equipment 1,129 1,994 460
Proceeds from redemption of quoted equity
securities – 55,452 –
Proceeds from redemption of quoted debt
securities 12,366,158 4,525,164 5,125,468
Purchase of available-for-sale quoted debt
securities (6,756,683) (3,744,874) (2,065,906)
Disposal of discontinued operation, net of cash
disposed off 20 – – (2,257,709)
Net cash from/(used in) investing activities 3,896,758 623,851 (174,079)
The accompanying notes form an integral part of these financial statements.
APPENDIX A – AUDITED CONSOLIDATED FINANCIAL STATEMENTS FOR
THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012 AND 2013
A-13
Consolidated statements of cash flows
Financial years ended 31 December 2011, 2012 and 2013 (cont’d)
Note 2011 2012 2013
$ $ $
Cash flows from financing activities
Dividends paid to owners of the Company (622,315) (677,725) (3,358,575)
Proceeds from exercise of share options 63,504 160,860 365,988
Proceeds from issue of shares to non-
controlling interests 815,000 280,560 –
Payment on acquisition of additional interests in
subsidiaries (807,600) (280,560) –
Payment on capital reduction to non-controlling
interests (1,900,000) – –
Repayment of unsecured bank loan (1,282,609) (1,282,608) (748,189)
Net cash used in financing activities (3,734,020) (1,799,473) (3,740,776)
Net increase in cash and cash equivalents 1,562,486 1,157,633 3,210,747
Cash and cash equivalents at 1 January 11,063,036 12,587,410 13,516,229
Effect of exchange rate fluctuations on cash
held (38,112) (228,814) (8,067)
Cash and cash equivalents at 31 December 10 12,587,410 13,516,229 16,718,909
The accompanying notes form an integral part of these financial statements.
APPENDIX A – AUDITED CONSOLIDATED FINANCIAL STATEMENTS FOR
THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012 AND 2013
A-14
Notes to the financial statements
These notes form an integral part of the financial statements.
The financial statements were authorised for issue by the Board of Directors on 4 December 2014.
1 Domicile and activities
iFAST Corporation Ltd. (the Company) is incorporated in the Republic of Singapore and has
its registered office at 10 Collyer Quay, #26-01 Ocean Financial Centre Building, Singapore
049315. The Company changed its name to iFAST Corporation Ltd. upon its conversion to
a public company on 18 November 2014.
The principal activities of the Group are those relating to investment holding, development
of software, marketing of unit trusts and Singapore government securities through websites
and acting as an investment advisor, dealer and custodian in respect to unit trusts and
Singapore government securities.
The consolidated financial statements of the Group as at and for the years ended 31
December 2011, 2012 and 2013 relate to the Company and its subsidiaries (together
referred to as the Group).
2 Basis of preparation
2.1 Statement of compliance
The financial statements have been prepared in accordance with Singapore Financial
Reporting Standards (FRS).
2.2 Basis of measurement
The financial statements have been prepared on the historical cost basis except as
otherwise described in the notes below.
2.3 Functional and presentation currency
These financial statements are presented in Singapore dollars which is the Company’s
functional currency.
2.4 Use of estimates and judgements
The preparation of the financial statements in conformity with FRSs requires management
to make judgements, estimates and assumptions that affect the application of accounting
policies and the reported amounts of assets, liabilities, income and expenses. Actual results
may differ from these estimates.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to
accounting estimates are recognised in the period in which the estimates are revised and
in any future periods affected.
APPENDIX A – AUDITED CONSOLIDATED FINANCIAL STATEMENTS FOR
THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012 AND 2013
A-15
In particular, information about assumptions and estimation uncertainties that have the
significant effect on the amount recognised in the financial statements is included in note
21 – share options.
Measurement of fair values
A number of the Group’s accounting policies and disclosures require the measurement of
fair values, for both financial and non-financial assets and liabilities.
The Group has an established control framework with respect to the measurement of fair
values. When measuring the fair value of an asset or a liability, the Group uses market
observable data as far as possible. Fair values are categorised into different levels in a fair
value hierarchy based on the inputs used in the valuation techniques as follows:
• Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities.
• Level 2: inputs other than quoted prices included in Level 1 that are observable for the
asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).
• Level 3: inputs for the asset or liability that are not based on observable market data
(unobservable inputs).
If the inputs used to measure the fair value of an asset or a liability might be categorised
in different levels of the fair value hierarchy, then the fair value measurement is categorised
in its entirety in the same level of the fair value hierarchy as the lowest level input that is
significant to the entire measurement (with Level 3 being the lowest).
The Group recognises transfers between levels of the fair value hierarchy as of the end of
the reporting period during which the change has occurred.
Further information about the assumptions made in measuring fair values is included in
note 24 – financial risk management.
3 Significant accounting policies
The accounting policies set out below have been applied consistently to all periods
presented in these financial statements, and have been applied consistently by Group
entities.
The statements of profit or loss and statements of comprehensive income for the years
ended 31 December 2011 and 2012 have been re-presented as if an operation discontinued
in October 2013 had been discontinued from the start of the respective years (see Note 20).
APPENDIX A – AUDITED CONSOLIDATED FINANCIAL STATEMENTS FOR
THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012 AND 2013
A-16
3.1 Basis of consolidation
(i) Business combinations
Business combinations are accounted for using the acquisition method in accordance with
FRS 103 Business Combination as at the acquisition date, which is the date on which
control is transferred to the Group. Control is the power to govern the financial and
operating policies of an entity so as to obtain benefits from its activities. In assessing
control, the Group takes into consideration potential voting rights that are currently
exercisable.
The Group measures goodwill at the acquisition date as:
• the fair value of the consideration transferred; plus
• the recognised amount of any non-controlling interests in the acquiree; plus
• if the business combination is achieved in stages, the fair value of the pre-existing
equity interest in the acquiree,
over the net recognised amount (generally fair value) of the identifiable assets acquired and
liabilities assumed. Any goodwill that arises is tested annually for impairment.
When the excess is negative, a bargain purchase gain is recognised immediately in profit
or loss.
The consideration transferred does not include amounts related to the settlement of
pre-existing relationships. Such amounts are generally recognised in profit or loss.
Any contingent consideration payable is recognised at fair value at the acquisition date and
included in the consideration transferred. If the contingent consideration is classified as
equity, it is not remeasured and settlement is accounted for within equity. Otherwise,
subsequent changes to the fair value of the contingent consideration are recognised in
profit or loss.
When share-based payment awards (replacement awards) are exchanged for awards held
by the acquiree’s employees (acquiree’s awards) and relate to past services, then all or a
portion of the amount of the acquirer’s replacement awards is included in measuring the
consideration transferred in the business combination. This determination is based on the
market-based value of the replacement awards compared with the market-based value of
the acquiree’s awards and the extent to which the replacement awards relate to past and/or
future service.
Non-controlling interests that are present ownership interests and entitle their holders to a
proportionate share of the acquiree’s net assets in the event of liquidation are measured
either at fair value or at the non-controlling interests’ proportionate share of the recognised
amounts of the acquiree’s identifiable net assets, at the acquisition date. The measurement
basis taken is elected on a transaction-by-transaction basis. All other non-controlling
interests are measured at acquisition-date fair value, unless another measurement basis is
required by FRSs.
APPENDIX A – AUDITED CONSOLIDATED FINANCIAL STATEMENTS FOR
THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012 AND 2013
A-17
Costs related to the acquisition, other than those associated with the issue of debt or equity
securities, that the Group incurs in connection with a business combination are expensed
as incurred.
Changes in the Group’s interest in a subsidiary that do not result in a loss of control are
accounted for as transactions with owners in their capacity as owners and therefore no
adjustments are made to goodwill and no gain or loss is recognised in profit or loss.
Adjustments to non-controlling interests arising from transactions that do not involve the
loss of control are based on a proportionate amount of the net assets of the subsidiary.
(ii) Subsidiaries
Subsidiaries are entities controlled by the Group. The financial statements of subsidiaries
are included in the consolidated financial statements from the date that control commences
until the date that control ceases.
The accounting policies of subsidiaries have been changed when necessary to align them
with the policies adopted by the Group. Losses applicable to the non-controlling interests
in a subsidiary are allocated to the non-controlling interests even if doing so causes the
non-controlling interests to have a deficit balance.
(iii) Loss of control
Upon the loss of control, the Group derecognises the assets and liabilities of the subsidiary,
any non-controlling interests and the other components of equity related to the subsidiary.
Any surplus or deficit arising on the loss of control is recognised in profit or loss. If the
Group retains any interest in the previous subsidiary, then such interest is measured at fair
value at the date that control is lost. Subsequently, it is accounted for as an equity-
accounted investee or as an available-for-sale financial asset depending on the level of
influence retained.
(iv) Acquisition of non-controlling interests
Acquisition of non-controlling interests are accounted for as transactions with owners in
their capacity as owners and therefore the carrying amounts of assets and liabilities are not
changed and goodwill is not recognised as a result of such transactions. The adjustments
to non-controlling interests are based on a proportionate amount of the net assets of the
subsidiary. Any difference between the adjustment to non-controlling interests and the fair
value of consideration paid is recognised directly in equity and presented as part of equity
attributable to owners of the Company.
(v) Transactions eliminated on consolidation
Intra-group balances and transactions, and any unrealised income or expenses arising from
intra-group transactions, are eliminated in preparing the consolidated financial statements.
APPENDIX A – AUDITED CONSOLIDATED FINANCIAL STATEMENTS FOR
THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012 AND 2013
A-18
3.2 Foreign currency
(i) Foreign currency transactions
Transactions in foreign currencies are translated to the respective functional currencies of
the Group entities at exchange rates at the dates of the transactions. Monetary assets and
liabilities denominated in foreign currencies at the end of the reporting period are
retranslated to the functional currency at the exchange rate at that date. The foreign
currency gain or loss on monetary items is the difference between amortised cost in the
functional currency at the beginning of the year, adjusted for effective interest and
payments during the year, and the amortised cost in foreign currency translated at the
exchange rate at the end of the year.
Non-monetary assets and liabilities denominated in foreign currencies that are measured at
fair value are retranslated to the functional currency at the exchange rate at the date that
the fair value was determined. Non-monetary items in a foreign currency that are measured
in terms of historical cost are translated using the exchange rate at the date of the
transaction. Foreign currency differences arising on retranslation are recognised in profit or
loss, except for differences arising on the retranslation of available-for-sale equity
instruments (except on impairment in which case foreign currency differences that have
been recognised in other comprehensive income are reclassified to profit or loss), which are
recognised in other comprehensive income.
(ii) Foreign operations
The assets and liabilities of foreign operations, excluding goodwill and fair value
adjustments arising on acquisition, are translated to Singapore dollars at exchange rates at
the end of the reporting period. The income and expenses of foreign operations are
translated to Singapore dollars at exchange rates at the dates of the transactions. Goodwill
and fair value adjustments arising on the acquisition of a foreign operation on or after 1
January 2005 are treated as assets and liabilities of the foreign operation and translated at
the exchange rates at the end of the reporting period. For acquisitions prior to 1 January
2005, the exchange rates at the date of acquisition were used.
Foreign currency differences are recognised in other comprehensive income, and
presented in the foreign currency translation reserve (translation reserve) in equity.
However, if the operation is a non-wholly-owned subsidiary, then the relevant proportionate
share of the translation difference is allocated to the non-controlling interests. When a
foreign operation is disposed of such that control is lost, the cumulative amount in the
translation reserve related to that foreign operation is reclassified to profit or loss as part of
the gain or loss on disposal. When the Group disposes of only part of its interest in a
subsidiary that includes a foreign operation while retaining control, the relevant proportion
of the cumulative amount is reattributed to non-controlling interests.
When the settlement of a monetary item receivable from or payable to a foreign operation
is neither planned nor likely to occur in the foreseeable future, foreign exchange gains and
losses arising from such a monetary item are considered to form part of a net investment
in a foreign operation. These are recognised in other comprehensive income, and are
presented in the translation reserve in equity.
APPENDIX A – AUDITED CONSOLIDATED FINANCIAL STATEMENTS FOR
THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012 AND 2013
A-19
3.3 Plant and equipment
(i) Recognition and measurement
Items of plant and equipment are measured at cost less accumulated depreciation and
accumulated impairment losses.
Cost includes expenditure that is directly attributable to the acquisition of the asset. The
cost of self-constructed assets includes the cost of materials and direct labour, any other
costs directly attributable to bringing the asset to a working condition for its intended use,
and the cost of dismantling and removing the items and restoring the site on which they are
located and capitalised borrowing costs. Cost also may include transfers from other
comprehensive income of any gain or loss on qualifying cash flow hedges of foreign
currency purchases of plant and equipment. Purchased software that is integral to the
functionality of the related equipment is capitalised as part of that equipment.
When parts of an item of plant and equipment have different useful lives, they are
accounted for as separate items (major components) of plant and equipment.
The gain or loss on disposal of an item of plant and equipment (calculated as the difference
between the net proceeds from disposal and the carrying amount of the item) is recognised
net within other income/other expense in profit or loss.
(ii) Subsequent costs
The cost of replacing a component of an item of plant and equipment is recognised in the
carrying amount of the item if it is probable that the future economic benefits embodied
within the component will flow to the Group and its cost can be measured reliably. The
carrying amount of the replaced component is derecognised. The costs of the day-to-day
servicing of plant and equipment are recognised in profit or loss as incurred.
(iii) Depreciation
Depreciation is based on the cost of an asset, less its residual value. Significant
components of individual assets are assessed and if a component has a useful life that is
different from the remainder of that asset, that component is depreciated separately.
Depreciation is recognised as an expense in profit or loss on a straight-line basis over the
estimated useful lives of each component of an item of plant and equipment. Leased assets
are depreciated over the shorter of the lease term and their useful lives unless it is
reasonably certain that the Group will obtain ownership by the end of the lease term.
The estimated useful lives for the current and comparative periods are as follows:
Computer equipment 3 years
Office equipment 5 years
Furniture and fittings 5 years
Office renovation 5 years or based on lease term
Depreciation methods, useful lives and residual values are reviewed at the end of each
reporting period and adjusted if appropriate.
APPENDIX A – AUDITED CONSOLIDATED FINANCIAL STATEMENTS FOR
THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012 AND 2013
A-20
3.4 Intangible assets
Development costs
Development activities involve a plan or design for the production of new or substantially
improved products and processes. Development expenditure is capitalised only if
development costs can be measured reliably, the product or process is technically and
commercially feasible, future economic benefits are probable, and the Group intends to and
has sufficient resources to complete development and to use or sell the asset. The
expenditure capitalised includes the cost of materials, direct labour and costs that are
directly attributable to creating, producing and preparing the assets for its intended use.
Other development expenditure is recognised in profit or loss as incurred.
Capitalised development expenditure is measured at cost less accumulated amortisation
and impairment losses. Amortisation is recognised in profit or loss on a straight-line basis
over the estimated useful lives of 3 years. Development costs are amortised from the date
the development has been completed.
Computer software
Computer software that are acquired by the Group and not integral to the functionality of the
equipment, which have finite useful lives, are measured at cost less accumulated
amortisation and impairment losses. Computer software are amortised in profit or loss on
a straight-line basis over their estimated useful lives of 3 years, from the date on which they
are available for use.
Intellectual properties
Intellectual properties that are acquired by the Group, which have finite useful lives, are
measured at cost less accumulated amortisation and impairment losses. Intellectual
properties are amortised in profit or loss on a straight-line basis over their estimated useful
lives of 5 years, from the date on which they are available for use.
Customer lists
Customer lists that are acquired by the Group and have finite useful lives are measured at
cost less accumulated amortisation and accumulated impairment losses. Customer lists are
amortised in profit or loss on a straight-line basis over their estimated useful lives of 5
years, from the date the acquisition has been completed.
The above amortisation methods, useful lives and residual values are reviewed at the end
of each reporting period and adjusted if appropriate.
3.5 Club membership
Club membership is stated at cost less impairment losses.
APPENDIX A – AUDITED CONSOLIDATED FINANCIAL STATEMENTS FOR
THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012 AND 2013
A-21
3.6 Financial instruments
(i) Non-derivative financial assets
The Group initially recognises loans and receivables and deposits on the date that they are
originated. All other financial assets are recognised initially on the trade date, which is the
date that the Group becomes a party to the contractual provisions of the instrument.
The Group derecognises a financial asset when the contractual rights to the cash flows from
the asset expire, or it transfers the rights to receive the contractual cash flows on the
financial asset in a transaction in which substantially all the risks and rewards of ownership
of the financial asset are transferred. Any interest in transferred financial assets that is
created or retained by the Group is recognised as a separate asset or liability.
Financial assets and liabilities are offset and the net amount presented in the statement of
financial position when, and only when, the Group has a legal right to offset the amounts
and intends either to settle on a net basis or to realise the asset and settle the liability
simultaneously.
The Group classifies non-derivative financial assets into the following category: loans and
receivables and available-for-sale financial assets.
Loans and receivables
Loans and receivables are financial assets with fixed or determinable payments that are not
quoted in an active market. Such assets are recognised initially at fair value plus any
directly attributable transaction costs. Subsequent to initial recognition, loans and
receivables are measured at amortised cost using the effective interest method, less any
impairment losses.
Loans and receivables comprise cash and cash equivalents and trade and other
receivables.
Cash and cash equivalents
Cash and cash equivalents comprise cash balances, bank deposits and money market
funds.
Available-for-sale financial assets
Available-for-sale financial assets are non-derivative financial assets that are designated
as available for sale or are not classified in any of the above categories of financial assets.
Available-for-sale financial assets are recognised initially at fair value plus any directly
attributable transaction costs. Subsequent to initial recognition, they are measured at fair
value and changes therein, other than impairment losses and foreign currency differences
on available-for-sale debt financial instruments, are recognised in other comprehensive
income and presented in the fair value reserve in equity. When an investment is
derecognised, the gain or loss accumulated in equity is reclassified to profit or loss.
Available-for-sale financial assets comprise quoted equity securities and debt securities.
APPENDIX A – AUDITED CONSOLIDATED FINANCIAL STATEMENTS FOR
THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012 AND 2013
A-22
(ii) Non-derivative financial liabilities
All financial liabilities are recognised initially on the trade date, which is the date that the
Group becomes a party to the contractual provisions of the instrument.
The Group derecognises a financial liability when its contractual obligations are discharged,
cancelled or expire.
Financial assets and liabilities are offset and the net amount presented in the statement of
financial position when, and only when, the Group has a legal right to offset the amounts
and intends either to settle on a net basis or to realise the asset and settle the liability
simultaneously.
The Group classifies non-derivative financial liabilities into the other financial liabilities
category. Such financial liabilities are recognised initially at fair value plus any directly
attributable transaction costs. Subsequent to initial recognition, these financial liabilities are
measured at amortised cost using the effective interest method.
Other financial liabilities comprise unsecured bank loan and trade and other payables.
(iii) Share capital
Ordinary shares
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue
of ordinary shares are recognised as a deduction from equity, net of any tax effects.
Distribution of non-cash assets to owners of the Company
The Group measures a liability to distribute non-cash assets as a dividend to the owners of
the Company at the fair value of the assets to be distributed. The carrying amount of the
dividend is remeasured at each reporting date and at the settlement date, with any changes
recognised directly in equity as adjustments to the amount of the distribution. On settlement
of the transaction, the Group recognises the difference, if any, between the carrying amount
of the assets distributed and the carrying amount of the liability in profit or loss.
(iv) Intra-group financial guarantees in the separate financial statements
Financial guarantees are financial instruments issued by the Company that requires the
issuer to make specified payments to reimburse the holder for the loss it incurs because a
specified debtor fails to meet payment when due in accordance with the original or modified
terms of a debt instrument.
Financial guarantees are recognised initially at fair value and are classified as financial
liabilities. Subsequent to initial measurement, the financial guarantees are stated at the
higher of the initial fair value less cumulative amortisation and the amount that would be
recognised if they were accounted for as contingent liabilities. When financial guarantees
are terminated before their original expiry date, the carrying amount of the financial
guarantees is transferred to profit or loss.
APPENDIX A – AUDITED CONSOLIDATED FINANCIAL STATEMENTS FOR
THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012 AND 2013
A-23
3.7 Impairment
(i) Non-derivative financial assets
A financial asset not carried at fair value through profit or loss is assessed at the end of
each reporting period to determine whether there is objective evidence that it is impaired.
A financial asset is impaired if objective evidence indicates that a loss event has occurred
after the initial recognition of the asset, and that the loss event has a negative effect on the
estimated future cash flows of that asset that can be estimated reliably.
Objective evidence that financial assets (including equity securities) are impaired can
include default or delinquency by a debtor, restructuring of an amount due to the Group on
terms that the Group would not consider otherwise, indications that a debtor or issuer will
enter bankruptcy, adverse changes in the payment status of borrowers or issuers in the
Group, economic conditions that correlate with defaults or the disappearance of an active
market for a security. In addition, for an investment in an equity security, a significant or
prolonged decline in its fair value below its cost is objective evidence of impairment.
Loans and receivables
The Group considers evidence of impairment for loans and receivables at both a specific
asset and collective level. All individually significant loans and receivables are assessed for
specific impairment. All individually significant receivables found not to be specifically
impaired are then collectively assessed for any impairment that has been incurred but not
yet identified. Loans and receivables that are not individually significant are collectively
assessed for impairment by grouping together loans and receivables with similar risk
characteristics.
In assessing collective impairment, the Group uses historical trends of the probability of
default, the timing of recoveries and the amount of loss incurred, adjusted for
management’s judgement as to whether current economic and credit conditions are such
that the actual losses are likely to be greater or less than suggested by historical trends.
An impairment loss in respect of a financial asset measured at amortised cost is calculated
as the difference between its carrying amount and the present value of the estimated future
cash flows discounted at the asset’s original effective interest rate. Losses are recognised
in profit or loss and reflected in an allowance account against loans and receivables.
Interest on the impaired asset continues to be recognised. When a subsequent event (e.g.
repayment by a debtor) causes the amount of impairment loss to decrease, the decrease
in impairment loss is reversed through profit or loss.
Available-for-sale financial assets
Impairment losses on available-for-sale financial assets are recognised by reclassifying the
losses accumulated in the fair value reserve in equity to profit or loss. The cumulative loss
that is reclassified from equity to profit or loss is the difference between the acquisition cost,
net of any principal repayment and amortisation, and the current fair value, less any
impairment loss recognised previously in profit or loss. Changes in cumulative impairment
provisions attributable to application of the effective interest method are reflected as a
component of interest income.
APPENDIX A – AUDITED CONSOLIDATED FINANCIAL STATEMENTS FOR
THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012 AND 2013
A-24
If, in a subsequent period, the fair value of an impaired available-for-sale debt security
increases and the increase can be related objectively to an event occurring after the
impairment loss was recognised, then the impairment loss is reversed. The amount of the
reversal recognised in profit or loss. However, any subsequent recovery in the fair value of
an impaired available-for-sale equity security is recognised in other comprehensive income.
(ii) Non-financial assets
The carrying amounts of the Group’s non-financial assets are reviewed at each reporting
date to determine whether there is any indication of impairment. If any such indication
exists, then the asset’s recoverable amount is estimated. For intangible assets that have
indefinite useful lives or that are not yet available for use, the recoverable amount is
estimated each year at the same time. An impairment loss is recognised if the carrying
amount of an asset or its related cash-generating unit (CGU) exceeds its estimated
recoverable amount.
The recoverable amount of an asset or CGU is the greater of its value in use and its fair
value less costs to sell. 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 or CGU. For the
purpose of impairment testing, assets that cannot be tested individually are grouped
together into the smallest group of assets that generates cash inflows from continuing use
that are largely independent of the cash inflows of other assets or CGU.
Impairment losses are recognised in profit or loss. Impairment losses recognised in respect
of CGUs are allocated first to reduce the carrying amount of any goodwill allocated to the
CGU (group of CGUs), and then to reduce the carrying amounts of the other assets in the
CGU (group of CGUs) on a pro rata basis.
Impairment losses recognised in prior periods are assessed at each reporting date for any
indications that the loss has decreased or no longer exists. An impairment loss is reversed
if there has been a change in the estimates used to determine the recoverable amount. 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.
3.8 Leases
Where the Group has the use of assets under operating leases, payments made under the
leases are recognised in profit or loss on a straight-line basis over the term of the lease.
Lease incentives received are recognised in profit or loss as an integral part of the total
lease expense, over the term of the lease.
Contingent lease payments are accounted for by revising the minimum lease payments
over the remaining term of the lease when the lease adjustment is confirmed.
APPENDIX A – AUDITED CONSOLIDATED FINANCIAL STATEMENTS FOR
THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012 AND 2013
A-25
3.9 Employee benefits
Defined contribution plans
A defined contribution plan is a post-employment benefit plan under which an entity pays
fixed contributions into a separate entity and will have no legal or constructive obligation to
pay further amounts. Obligations for contributions to defined contribution pension plans are
recognised as an employee benefit expense in profit or loss in the periods during which
services are rendered by employees.
Short-term employee benefits
Short-term employee benefit obligations are measured on an undiscounted basis and are
expensed as the related service is provided. These include salaries, annual bonuses and
paid annual leave.
A liability is recognised for the amount expected to be paid under short-term cash bonus or
profit-sharing plans if the Group has a present legal or constructive obligation to pay this
amount as a result of past service provided by the employee, and the obligation can be
estimated reliably.
Employee leave entitlements
Employee entitlements to annual leave are recognised when they accrue to employees. A
provision is made for the estimated liability for annual leave as a result of service rendered
by employees up to the reporting date.
Share-based payment transactions
The share option programme allows directors and executives to acquire shares of the
Company. The fair value of options granted is recognised as an employee expense, with a
corresponding increase in equity. The fair value is measured at grant date and spread over
the vesting period during which the employees become unconditionally entitled to the
options. At each reporting date, the Company revises its estimates of the number of options
that are expected to become exercisable. It recognises the impact of the revision of original
estimates in employee expense and in a corresponding adjustment to equity over the
remaining vesting period. The proceeds received net of any directly attributable
transactions costs are credited to share capital when the options are exercised.
3.10 Provisions
A provision is recognised if, as a result of a past event, the Group has a present legal or
constructive obligation that can be estimated reliably, and it is probable that an outflow of
economic benefits will be required to settle the obligation. Provisions are determined by
discounting the expected future cash flows at a pre-tax rate that reflects current market
assessments of the time value of money and the risks specific to the liability. The unwinding
of the discount is recognised as finance cost.
APPENDIX A – AUDITED CONSOLIDATED FINANCIAL STATEMENTS FOR
THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012 AND 2013
A-26
3.11 Revenue recognition
Revenue represents advertising fees, commission and fee income, service fees, income
from sale of magazines and software licences fees.
Advertising revenue, which is earned in the form of upfront and variable payments, is
deferred and recognised over the period to which the contract relates.
Commission and fee income and service fees are recognised on the completion of services
rendered.
Magazine sales and software licence revenue are recognised when the significant risks and
rewards of ownership have been transferred to the buyer.
3.12 Government grants
Government grants are recognised initially as deferred income at fair value when there is
reasonable assurance that they will be received and the Group will comply with the
conditions associated with the grant. Grants that compensate the Group for expenses
incurred are recognised in profit or loss as revenue on a systematic basis in the same
periods in which the expenses are recognised.
SME Cash Grant
Cash grants received from the government in relation to the SME Cash Grant are
recognised as income upon receipt.
3.13 Finance income and finance costs
Finance income comprises interest income from money market funds, bank deposits and
client’s bank account. Interest income is recognised as it accrues in profit or loss, using the
effective interest method. Finance costs comprise interest expense on borrowings which is
recognised in profit and loss using the effective interest method.
3.14 Tax
Tax expense comprises current and deferred tax. Current tax and deferred tax are
recognised in profit or loss except to the extent that it relates to a business combination, or
items recognised directly in equity or in other comprehensive income.
Current tax is the expected tax payable or receivable on the taxable income or loss for the
year, using tax rates enacted or substantively enacted at the reporting date, and any
adjustment to tax payable in respect of previous years.
APPENDIX A – AUDITED CONSOLIDATED FINANCIAL STATEMENTS FOR
THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012 AND 2013
A-27
Deferred tax is recognised in respect of temporary differences between the carrying
amounts of assets and liabilities for financial reporting purposes and the amounts used for
taxation purposes. Deferred tax is not recognised for:
• temporary differences on the initial recognition of assets or liabilities in a transaction
that is not a business combination and that affects neither accounting nor taxable
profit or loss; and
• temporary differences related to investments in subsidiaries to the extent that it is
probable that they will not reverse in the foreseeable future.
The measurement of deferred taxes reflects the tax consequences that would follow the
manner in which the Group expects, at the end of the reporting period, to recover or settle
the carrying amount of its assets and liabilities. Deferred tax is measured at the tax rates
that are expected to be applied to temporary differences when they reverse, based on the
laws that have been enacted or substantively enacted by the reporting date.
Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset
current tax liabilities and assets, and they relate to income taxes levied by the same tax
authority on the same taxable entity, or on different tax entities, but they intend to settle
current tax liabilities and assets on a net basis or their tax assets and liabilities will be
realised simultaneously.
A deferred tax asset is recognised for unused tax losses, tax credits and deductible
temporary differences, to the extent that it is probable that future taxable profits will be
available against which they can be utilised. Deferred tax assets are reviewed at each
reporting date and are reduced to the extent that it is no longer probable that the related tax
benefit will be realised.
In determining the amount of current and deferred tax, the Group takes into account the
impact of uncertain tax positions and whether additional taxes and interest may be due. The
Group believes that its accruals for tax liabilities are adequate for all open tax years based
on its assessment of many factors including interpretations of tax law and prior experience.
This assessment relies on estimates and assumptions and may involve a series of
judgements about future events. New information may become available that causes the
Group to change its judgement regarding the adequacy of existing tax liabilities, such
changes to tax liabilities will impact tax expense in the period that such a determination is
made.
3.15 Discontinued operation
A discontinued operation is a component of the Group’s business, the operations and cash
flows of which can be clearly distinguished from the rest of the Group and which:
• represents a separate major line of business or geographical area of operations; or
• is part of a single co-ordinated plan to dispose of a separate major line of business or
geographical area of operations;
APPENDIX A – AUDITED CONSOLIDATED FINANCIAL STATEMENTS FOR
THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012 AND 2013
A-28
Classification as a discontinued operation occurs upon disposal or when the operation
meets the criteria to be classified as held for sale, if earlier. When an operation is classified
as a discontinued operation, the comparative statement of profit or loss is re-presented as
if the operation had been discontinued from the start of the comparative year.
3.16 Earnings per share
The Group presents basic and diluted earnings per share data for its ordinary shares. Basic
earnings per share is calculated by dividing the profit or loss attributable to ordinary
shareholders of the Company by the weighted average number of ordinary shares
outstanding during the year, adjusted for own shares held. Diluted earnings per share is
determined by adjusting the profit or loss attributable to ordinary shareholders and the
weighted average number of ordinary shares outstanding, adjusted for own shares held, for
the effect of all dilutive potential ordinary shares, which comprise share options granted to
employees.
3.17 Segment reporting
An operating segment is a component of the Group that engages in business activities from
which it may earn revenues and incur expenses, including revenues and expenses that
relate to transactions with any of the Group’s other components. All operating segments’
operating results are reviewed regularly by the Group’s CEO (the chief operating decision
maker) to make decisions about resources to be allocated to the segment and to assess its
performance, and for which discrete financial information is available.
Segment results that are reported to the Group’s CEO include items directly attributable to
a segment as well as those that can be allocated on a reasonable basis. Unallocated items
comprise mainly corporate assets (primarily the Company’s headquarters), head office
expenses, and income tax assets and liabilities.
Segment capital expenditure are total costs incurred during the year to acquire plant and
equipment and intangible assets.
3.18 New standards and interpretations not yet adopted
A number of new standards, amendments to standards and interpretations are effective
after the date of these financial statements, and have not been applied in preparing these
financial statements. None of these are expected to have a significant effect on the financial
statements of the Group.
APPENDIX A – AUDITED CONSOLIDATED FINANCIAL STATEMENTS FOR
THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012 AND 2013
A-29
4 Plant and equipment
Computer
equipment
Office
equipment
Furniture
and
fittings
Office
renovation Total
$ $ $ $ $
Cost
At 1 January 2011 4,129,610 571,954 504,887 1,934,757 7,141,208
Additions 242,039 14,387 68,289 1,364,895 1,689,610
Disposals/written-off (1,634,343) (97,671) (85,364) (817,624) (2,635,002)
Translation differences on
consolidation (50,452) (8,601) (9,140) (31,081) (99,274)
At 31 December 2011 2,686,854 480,069 478,672 2,450,947 6,096,542
Additions 84,730 3,795 1,224 2,100 91,849
Disposals/written-off (10,389) – – – (10,389)
Translation differences on
consolidation (53,615) (12,534) (13,270) (50,761) (130,180)
At 31 December 2012 2,707,580 471,330 466,626 2,402,286 6,047,822
Additions 815,069 25,062 1,466 3,096 844,693
Disposals/written-off (110,547) (1,188) – – (111,735)
Attributable to discontinued operation (201,668) (32,841) (28,482) (121,163) (384,154)
Translation differences on
consolidation (42,447) (6,763) (8,433) (18,354) (75,997)
At 31 December 2013 3,167,987 455,600 431,177 2,265,865 6,320,629
Accumulated depreciation
At 1 January 2011 3,385,910 359,246 318,463 1,226,957 5,290,576
Depreciation for the year 549,016 86,845 79,288 388,652 1,103,801
Disposals/written-off (1,633,038) (82,424) (77,656) (810,902) (2,604,020)
Translation differences on
consolidation (39,293) (3,841) (4,358) (14,136) (61,628)
At 31 December 2011 2,262,595 359,826 315,737 790,571 3,728,729
Depreciation for the year 274,020 69,271 72,370 440,639 856,300
Disposals/written-off (8,395) – – – (8,395)
Translation differences on
consolidation (48,818) (9,295) (9,873) (31,091) (99,077)
At 31 December 2012 2,479,402 419,802 378,234 1,200,119 4,477,557
Depreciation for the year 277,481 37,538 46,418 382,245 743,682
Disposals/written-off (110,214) (949) – – (111,163)
Attributable to discontinued operation (185,379) (26,913) (23,827) (110,900) (347,019)
Translation differences on
consolidation (40,736) (6,192) (8,319) (21,029) (76,276)
At 31 December 2013 2,420,554 423,286 392,506 1,450,435 4,686,781
Carrying amounts
At 1 January 2011 743,700 212,708 186,424 707,800 1,850,632
At 31 December 2011 424,259 120,243 162,935 1,660,376 2,367,813
At 31 December 2012 228,178 51,528 88,392 1,202,167 1,570,265
At 31 December 2013 747,433 32,314 38,671 815,430 1,633,848
APPENDIX A – AUDITED CONSOLIDATED FINANCIAL STATEMENTS FOR
THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012 AND 2013
A-30
5 Intangible assets
Development
costs
Computer
software
Intellectual
properties
Customer
lists Total
$ $ $ $ $
Cost
At 1 January 2011 46,225 1,784,181 1,178,413 – 3,008,819
Additions – 24,236 – – 24,236
Disposals/written-off (27,050) (123,719) – – (150,769)
Translation differences on
consolidation – (34,694) (125,863) – (160,557)
At 31 December 2011 19,175 1,650,004 1,052,550 – 2,721,729
Additions – 122,036 – – 122,036
Translation differences on
consolidation – (36,873) (73,445) – (110,318)
At 31 December 2012 19,175 1,735,167 979,105 – 2,733,447
Additions – 13,899 – 706,800 720,699
Attributable to discontinued operation – (90,355) (524,552) – (614,907)
Translation differences on
consolidation – (40,755) (85,301) – (126,056)
At 31 December 2013 19,175 1,617,956 369,252 706,800 2,713,183
Accumulated amortisation
At 1 January 2011 46,225 1,346,323 651,078 – 2,043,626
Amortisation for the year – 372,617 142,605 – 515,222
Disposals/written-off (27,050) (123,719) – – (150,769)
Translation differences on
consolidation – (26,785) (61,957) – (88,742)
At 31 December 2011 19,175 1,568,436 731,726 – 2,319,337
Amortisation for the year – 80,817 123,293 – 204,110
Translation differences on
consolidation – (34,451) (51,572) – (86,023)
At 31 December 2012 19,175 1,614,802 803,447 – 2,437,424
Amortisation for the year – 66,748 86,440 106,020 259,208
Attributable to discontinued operation – (87,366) (445,870) – (533,236)
Translation differences on
consolidation – (39,286) (74,765) – (114,051)
At 31 December 2013 19,175 1,554,898 369,252 106,020 2,049,345
Carrying amounts
At 1 January 2011 – 437,858 527,335 – 965,193
At 31 December 2011 – 81,568 320,824 – 402,392
At 31 December 2012 – 120,365 175,658 – 296,023
At 31 December 2013 – 63,058 – 600,780 663,838
In 2013, customer lists were acquired by the Group from a third party with a cash
consideration of $706,800 payable in twelve quarterly instalments. The amounts of
$117,800 have been paid to the third party as at 31 December 2013.
APPENDIX A – AUDITED CONSOLIDATED FINANCIAL STATEMENTS FOR
THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012 AND 2013
A-31
6 Subsidiaries
Details of subsidiaries are as follows:
Country of
incorporation
Effective equity held by the Group
Name of subsidiaries 2011 2012 2013
% % %
iFAST Financial Pte. Ltd.
1
and its
subsidiary:
Singapore 100 100 100
iFAST Nominees Pte. Ltd.
1
Singapore 100 100 100
FA Corporate & Compliance
Consultancy Pte. Ltd.
1
Singapore 100 100 100
iFAST Capital Ltd.
1
Singapore 100 100 100
iFAST Financial (HK) Limited
2
and its subsidiary:
Hong Kong 100 100 100
iFAST Nominees (HK) Limited
2
Hong Kong 100 100 100
iFAST Platform Services (HK)
Limited
2
Hong Kong 100 100 100
iFAST Service Centre Sdn. Bhd.
3
Malaysia 100 100 100
iFAST Malaysia Sdn. Bhd.
(formerly known as iFAST-OSK
Sdn. Bhd.)
3
and its subsidiaries:
Malaysia 62 62 65
FA Corporate and Compliance
Consultancy Sdn. Bhd.
3
Malaysia 62 62 65
iFAST Capital Sdn. Bhd.
3
and
its subsidiary:
Malaysia 60 62 65
iFAST Nominees Sdn. Bhd.
3
Malaysia 60 62 65
iFAST India Investments Pte.
Ltd.
1
and its subsidiary:
Singapore 51 51 –
iFAST Financial India Pvt Ltd
4
India 51 51 –
1
KPMG LLP Singapore is the auditor
2
BDO Limited Hong Kong is the auditor
3
BDO Limited Malaysia is the auditor
4
BSR & Co. LLP India is the auditor
Effect on acquisition of additional interests in subsidiaries
In September 2011 and September 2012, the Group’s subsidiary, iFAST Malaysia Sdn.
Bhd., acquired an additional interest in iFAST Capital Sdn. Bhd. for cash consideration of
$807,600 and $280,560 respectively.
In addition, in 2011, 2012 and 2013, iFAST Malaysia Sdn. Bhd. and iFAST Capital Sdn. Bhd.
issued new shares to their holding companies, resulting in changes in the Group’s
ownership interests in iFAST Malaysia Sdn. Bhd. and its subsidiaries without a change of
control.
APPENDIX A – AUDITED CONSOLIDATED FINANCIAL STATEMENTS FOR
THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012 AND 2013
A-32
For the years ended 31 December 2011, 2012 and 2013, the Group recognised amounts of
$105,791, $23,450 and $276,657, and $913,391, $257,110 and $276,657 on acquisition of
additional interests in subsidiaries in non-controlling interests and equity reserve
respectively (Note 12).
Effect on disposal of subsidiaries
As referred to in Note 20, the Company’s shareholding in iFAST India Investments Pte. Ltd.
and its subsidiary was disposed following a distribution in specie on 30 October 2013.
The Group recognised an amount of $1,379,357 and $353,644 on disposal of its interest in
subsidiaries in non-controlling interests and reserves (equity reserve and accumulated
profits) respectively (Note 12) for the year ended 31 December 2013.
Capital reduction in a subsidiary
A Restructuring Agreement dated 31 March 2011 between the Company, iFAST India
Investments Pte. Ltd. (iFAST India) and Deutsche Asia Pacific Holdings Pte. Ltd., a
shareholder of iFAST India, agreed that the issued share capital of iFAST India be reduced
by $4,900,000 without any cancellation in the number of shares held by each shareholder
of iFAST India (Capital Reduction).
On 28 April 2011, the High Court of the Republic of Singapore approved the Capital
Reduction.
On 13 May 2011, $1,900,000 was returned to Deutsche Asia Pacific Holdings Pte. Ltd. and
$3,000,000 was returned to the Company.
7 Club membership
2011 2012 2013
$ $ $
Club membership, at cost 11,429 11,429 11,429
8 Trade and other receivables
2011 2012 2013
$ $ $
Trade receivables 6,627,566 6,312,837 7,092,762
Impairment losses (3,788) (6,403) (14,260)
Net receivables 6,623,778 6,306,434 7,078,502
Accrued revenue 6,699,707 6,302,812 7,907,105
Deposits and other receivables 1,992,455 2,043,447 1,778,304
Loans and receivables 15,315,940 14,652,693 16,763,911
APPENDIX A – AUDITED CONSOLIDATED FINANCIAL STATEMENTS FOR
THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012 AND 2013
A-33
Trade receivables and accrued revenue consist mainly of commission and fee income that
shall only be due and payable to third party financial advisers upon the Group’s receipt of
the corresponding amounts from customers.
The Group’s exposure to credit and impairment losses related to trade receivables are
disclosed in Note 24.
9 Other investments
2011 2012 2013
$ $ $
Non-current
Available-for-sale quoted debt securities 1,754,357 3,455,810 2,011,502
Current
Available-for-sale quoted debt securities 6,206,349 3,889,287 –
Available-for-sale quoted equity securities 51,496 – –
6,257,845 3,889,287 –
The quoted debt and equity securities classified as available-for-sale of the Group
represent investments in marketable bond and equity funds respectively.
The quoted debt securities under current assets are denominated in Indian Rupees and the
quoted debt securities under non-current assets are denominated in Singapore dollar.
The quoted equity securities are denominated in Singapore dollar.
The maximum exposures to credit risk of the quoted debt and equity securities at the
reporting date are the carrying amounts.
The Group’s exposure to price risk and fair value information are disclosed in Note 24.
10 Cash and cash equivalents
2011 2012 2013
$ $ $
Cash at bank and in hand 10,724,589 12,379,553 16,292,523
Money market funds 1,862,821 1,136,676 426,386
Cash and cash equivalents in the
consolidated statement of cash flows 12,587,410 13,516,229 16,718,909
The money market funds are included as cash and cash equivalents as they are considered
fully liquid investment readily convertible into known amount of cash and cash equivalents
which are subject to an insignificant risk of changes in value.
APPENDIX A – AUDITED CONSOLIDATED FINANCIAL STATEMENTS FOR
THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012 AND 2013
A-34
The weighted average effective interest rate per annum relating to cash and cash
equivalents and client bank accounts as at 31 December 2011, 2012 and 2013 for the
Group were 0.06%, 0.08% and 0.08% respectively. Interest rates reprice on a daily basis.
11 Held under trust
Some of the subsidiaries in the Group receive and hold monies deposited by clients and
other institutions in the course of the conduct of the regulated activities. These clients’
monies are maintained in one or more trust bank accounts which are separately maintained
from the bank accounts of the Group.
12 Share capital and reserves
Share capital
Note 2011 2012 2013
No. of
shares
No. of
shares
No. of
shares
Fully paid ordinary shares,
with no par value:
Ordinary shares:
At 1 January 33,410,964 33,457,804 33,573,654
Exercise of share options
(Share Option Scheme) 21 46,840 115,850 222,415
At 31 December 33,457,804 33,573,654 33,796,069
222,415 ordinary shares were issued as a result of the exercise of vested options arising
from the share option programmes granted to full-time executives (2012: 115,850 shares;
2011: 46,840 shares). Options were exercised at an average price of $1.6455 (2012:
$1.3885; 2011: $1.36) per option. All issued shares are fully paid.
The holders of ordinary shares are entitled to receive dividends as declared from time to
time and are entitled to one vote per share at meetings of the Company. All ordinary shares
rank equally with regard to the Company’s residual assets.
As at the end of each financial year, there were 1,555,685 (2012: 592,985; 2011: 736,485)
shares reserved for issue under options.
APPENDIX A – AUDITED CONSOLIDATED FINANCIAL STATEMENTS FOR
THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012 AND 2013
A-35
Reserves
2011 2012 2013
$ $ $
Fair value reserve 290,373 435,830 34,602
Foreign currency translation reserve (1,518,467) (1,976,899) (748,886)
Share option reserve 500,444 496,870 559,171
Equity reserve 1,951,908 1,831,834 (1,368,829)
Accumulated profits 9,918,067 12,320,763 14,819,689
11,142,325 13,108,398 13,295,747
Fair value reserve
The fair value reserve comprises the cumulative net change in the fair value of available-
for-sale financial assets until the investments are derecognised or impaired.
Foreign currency translation reserve
The foreign currency translation reserve comprises foreign exchange differences arising
from the translation of the financial statements of foreign operations.
Share option reserve
The share option reserve comprises the cumulative value of employee services received for
the issue of share options.
Equity reserve
The equity reserve represents:
(i) effects of changes in ownership interests in subsidiaries when there are no changes
in control;
(ii) premium received from non-controlling interests on issue of shares by a subsidiary
without change in ownership interests; and
(iii) premium received from capital reduction in a subsidiary without change in ownership
interests.
APPENDIX A – AUDITED CONSOLIDATED FINANCIAL STATEMENTS FOR
THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012 AND 2013
A-36
13 Unsecured bank loan
2011 2012 2013
$ $ $
Non-current
Unsecured bank loan 748,189 – –
Current
Unsecured bank loan 1,282,608 748,189 –
2,030,797 748,189 –
In 2009, a wholly owned subsidiary obtained a bank loan which was extended under the
Bridging Loan Program in conjunction with SPRING Singapore. Information on the
unsecured bank loan are as follows:
Currency
Nominal
interest rate
Year of
maturity
Face
value
Carrying
amount
$ $
31 December 2013
Unsecured bank loan SGD 5.0% fixed
per annum
2013 – –
31 December 2012
Unsecured bank loan SGD 5.0% fixed
per annum
2013 748,189 748,189
31 December 2011
Unsecured bank loan SGD 5.0% fixed
per annum
2013 2,030,797 2,030,797
The unsecured bank loan was repayable on a monthly basis over 4 years. The Group’s
exposure to liquidity risk is disclosed in Note 24.
14 Deferred tax
Unrecognised deferred tax assets and liabilities
At 31 December 2013, the deferred tax assets in respect of tax losses and deductible
temporary differences amounting to $49,665,868 (2012: $59,609,956; 2011: $58,655,142)
have not been recognised because it is not probable that future taxable profits will be
available against which the Group can utilise the benefits.
The tax losses are subject to agreement by the tax authorities and compliance with tax
regulations in the respective countries in which certain subsidiaries operate. The deductible
temporary differences do not expire under current tax legislation.
APPENDIX A – AUDITED CONSOLIDATED FINANCIAL STATEMENTS FOR
THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012 AND 2013
A-37
Recognised deferred tax assets and liabilities
Deferred tax liabilities and assets are offset when there is a legally enforceable right to set
off current tax assets against current tax liabilities and when the deferred taxes relate to the
same taxation authority. The following amount, determined after appropriate offsetting is
included in the statement of financial position as follows:
2011 2012 2013
$ $ $
Deferred tax assets 24,229 27,811 34,559
Deferred tax liabilities 48,052 51,980 76,746
Deferred tax assets and liabilities are attributable to the following:
Assets Liabilities
2011 2012 2013 2011 2012 2013
$ $ $ $ $ $
Plant and equipment – (8,175) (6,402) 97,017 89,800 189,709
Trade receivables (643) (1,088) (2,425) – – –
Trade and other
payables (28,978) (14,914) (22,449) – – –
Employee benefits (43,573) (41,454) (116,246) – – –
Deferred tax
(assets)/liabilities (73,194) (65,631) (147,522) 97,017 89,800 189,709
Set off of tax 48,965 37,820 112,963 (48,965) (37,820) (112,963)
Net deferred tax
(assets)/liabilities (24,229) (27,811) (34,559) 48,052 51,980 76,746
APPENDIX A – AUDITED CONSOLIDATED FINANCIAL STATEMENTS FOR
THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012 AND 2013
A-38
Movements in deferred tax assets and liabilities of the Group (prior to offsetting of
balances) during the year were as follows:
At
1 January
2011
Recognised
in profit
or loss
(Note 19)
At
31 December
2011
Recognised
in profit
or loss
(Note 19)
At
31 December
2012
Recognised
in profit
or loss
(Note 19)
At
31 December
2013
$ $ $ $ $ $
Deferred tax
assets
Plant and
equipment – – – (8,175) (8,175) 1,773 (6,402)
Employee
benefits (25,609) (17,964) (43,573) 2,119 (41,454) (74,792) (116,246)
Trade and
other
receivables (7,957) 7,314 (643) (445) (1,088) (1,337) (2,425)
Trade and
other
payables – (28,978) (28,978) 14,064 (14,914) (7,535) (22,449)
Unutilised
capital
allowances (1,417) 1,417 – – – – –
(34,983) (38,211) (73,194) 7,563 (65,631) (81,891) (147,522)
Deferred tax
liabilities
Plant and
equipment 182,293 (85,276) 97,017 (7,217) 89,800 99,909 189,709
147,310 (123,487) 23,823 346 24,169 18,018 42,187
APPENDIX A – AUDITED CONSOLIDATED FINANCIAL STATEMENTS FOR
THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012 AND 2013
A-39
15 Trade and other payables
2011 2012 2013
$ $ $
Current
Trade payables 930,886 1,135,275 1,068,351
Accrued operating expenses 10,413,253 9,151,278 11,390,914
Deposits received 66,787 164,160 376,092
11,410,926 10,450,713 12,835,357
Non-current
Accrued operating expenses – – 353,400
Trade payables and accrued operating expenses consist mainly of commission and fee
income that shall only be due and payable to third party financial advisers upon the Group’s
receipt of the corresponding amounts from customers.
Included in the Group’s accrued operating expenses as at 31 December 2011, 2012 and
2013, are amounts payable to a third party as indicated in Note 5 amounting to $589,000,
where $235,600 and $353,400 are the current and non-current portion respectively.
The Group’s exposure to liquidity risk related to trade and other payables is disclosed in
Note 24.
16 Revenue
Continuing operations
Discontinued operation
(see note 20) Total
2011 2012 2013 2011 2012 2013 2011 2012 2013
$ $ $ $ $ $ $ $ $
Commission and
fee income 59,554,971 54,657,033 67,026,255 528,237 746,381 588,770 60,083,208 55,403,414 67,615,025
Service fees 1,221,359 1,185,050 1,825,166 – – – 1,221,359 1,185,050 1,825,166
Advertising fees 182,598 439,696 500,703 – – – 182,598 439,696 500,703
Others 163,906 132,191 117,999 51 – – 163,957 132,191 117,999
61,122,834 56,413,970 69,470,123 528,288 746,381 588,770 61,651,122 57,160,351 70,058,893
APPENDIX A – AUDITED CONSOLIDATED FINANCIAL STATEMENTS FOR
THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012 AND 2013
A-40
17 Other operating income
2011 2012 2013
$ $ $
Investment income 4,548 11,363 96,702
Government grant 10,000 10,000 8,000
Others 43,326 63,559 59,269
57,874 84,922 163,971
18 Profit for the year
The following items have been included in arriving at profit for the year:
2011 2012 2013
$ $ $
Interest income
– from cash at bank (8,128) (2,448) (3,088)
– from trust accounts (5,600) (2,372) (11,960)
– from money market funds (45,652) (41,038) (24,058)
– from loans and receivables – – (422)
Impairment losses/(reversal) on trade
receivables, net (17,719) 2,615 7,857
Unrealised exchange loss, net 193,784 110,320 12,245
Value of employee services received for
issue of share options, included in staff
costs 47,890 (3,574) 62,301
Contributions to defined contribution plans,
included in staff costs 1,020,950 1,041,496 1,054,702
Operating lease expense 3,974,063 4,297,308 4,180,983
Net change in fair value of available-for-
sale financial assets transferred from
equity (657,075) (397,776) (732,457)
19 Tax expense
2011 2012 2013
$ $ $
Current tax expense
Current year 127,060 687,687 614,064
Adjustment for prior periods 248,779 (2,890) (59,331)
375,839 684,797 554,733
APPENDIX A – AUDITED CONSOLIDATED FINANCIAL STATEMENTS FOR
THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012 AND 2013
A-41
2011 2012 2013
$ $ $
Deferred tax expense
Origination and reversal of temporary
differences (99,088) (4,308) 3,696
Adjustment for prior periods (24,399) 4,654 14,322
(123,487) 346 18,018
Tax expense from continuing operations 252,352 685,143 572,751
There is no tax expense from the discontinued operation (see Note 20).
As at 31 December 2013, the Inland Revenue Authority of Singapore (“IRAS”) was
reviewing the writing-down allowance claims made by the Company on its intellectual
property. On 7 August 2014, IRAS has completed its review and accepted the writing-down
allowance claims made by the Company in prior years.
Reconciliation of effective tax rate
2011 2012 2013
$ $ $
Profit for the year from continuing
operations 2,122,061 3,256,418 8,242,212
Tax expense from continuing operations 252,352 685,143 572,751
Profit before tax from continuing operations 2,374,413 3,941,561 8,814,963
Tax using Singapore tax rate at 17% 403,650 670,065 1,498,544
Effect of tax rates in foreign jurisdictions (104,128) (88,227) (49,174)
Income not subject to tax (13,119) (33,244) (136,263)
Tax incentives – (138,031) (481,347)
Non-deductible expenses 125,176 105,103 118,981
Current period tax losses and temporary
differences for which no deferred tax asset
was recognised 857,471 506,268 155,541
Recognition of tax effect of previously
unrecognised tax losses and temporary
differences – (346,957) (489,211)
Under/(over) provided in prior years 224,380 1,764 (45,009)
Tax benefit arising from intra-group sale of
assets (1,220,600) – –
Others (20,478) 8,402 689
252,352 685,143 572,751
APPENDIX A – AUDITED CONSOLIDATED FINANCIAL STATEMENTS FOR
THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012 AND 2013
A-42
20 Discontinued operation
On 3 October 2013, the Company and Deutsche Asia Pacific Holdings Pte. Ltd. sold their
entire shares in iFAST India Investment Pte. Ltd. (“iFAST India”) and its subsidiary to
Pecuniam Pte. Ltd. (“Pecuniam”), for considerations of $1,699,668 and $1,733,001
respectively, which was financed by a convertible loan receivable of $3,332,669 and an
advance of $100,000 from the Company to Pecuniam. The convertible loan receivable was
converted to Pecuniam shares subsequently. In addition, the Company injected $400,000
into Pecuniam. On 30 October 2013, the Company declared a special interim dividend
amounting to $3,832,669 to be satisfied by way of a distribution in specie of the entire
Pecuniam shares (“assets”) held by the Company, being the fair value of the assets
distributed by the Group and Company.
iFAST India and its subsidiary were not previously presented as a discontinued operation
or classified as held for sale as at 31 December 2011 and 2012 and thus the statements of
profit or loss for the years ended 31 December 2011 and 2012 have been re-presented to
show the discontinued operation separately from continuing operations. Management
committed to a plan to sell iFAST India and its subsidiary in 2013 following a strategic
decision to place greater focus on the Group’s core operation segments, being the
operations in Singapore, Hong Kong and Malaysia.
2011 2012 2013
$ $ $
Results of discontinued operation
Revenue 528,288 746,381 588,770
Other operating income 652,678 385,403 738,006
Expenses (3,126,285) (2,763,101) (1,879,903)
Results from operating activities,
net of tax (1,945,319) (1,631,317) (553,127)
Translation reserve realised, loss – – (2,849,138)
Fair value reserve realised, gain – – 250,430
Loss for the year (1,945,319) (1,631,317) (3,151,835)
Included in other operating income for the year ended 31 December 2013 is the realisation
of intangible assets during the year amounting to $81,895.
APPENDIX A – AUDITED CONSOLIDATED FINANCIAL STATEMENTS FOR
THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012 AND 2013
A-43
Of the loss from discontinued operation of $3,151,835 (2012: $1,631,317; 2011:
$1,945,319), an amount of $2,713,106 (2012: $661,130; 2011: $767,881) is attributable to
the owners of the Company. Of the profit from continuing operations of $8,242,212 (2012:
$3,256,418; 2011: $2,122,061), an amount of $8,474,397 (2012: $3,741,551; 2011:
$2,771,516) is attributable to the owners of the Company.
2011 2012 2013
$ $ $
Net cash used in operating activities (2,613,340) (2,308,217) (1,375,554)
Net cash from investing activities 7,349,910 2,354,468 1,548,129
Net cash used in financing activities (4,839,485) (85,590) (128,152)
Net cash flows for the year (102,915) (39,339) 44,423
Effect of disposal and distribution on the financial position of the Group
2013
$
Plant and equipment 37,135
Intangible assets 163,566
Trade and other receivables 784,382
Other investments 2,269,086
Prepayments 55,133
Cash and cash equivalents 124,708
Trade and other payables (612,754)
Current tax payable (6,237)
Carrying amount of net assets of subsidiaries disposed to Pecuniam 2,815,019
Cash injected to Pecuniam 400,000
Carrying amount of net assets distributed 3,215,019
Dividend to shareholders 3,832,669
Carrying amount of net assets distributed (3,215,019)
Gain on distribution to owners of the Company 617,650
Net cash outflow arising on disposal of discontinued operation:
Cash paid to non-controlling interest (1,733,001)
Cash injected to Pecuniam (400,000)
Cash and cash equivalents of subsidiaries disposed off (124,708)
(2,257,709)
APPENDIX A – AUDITED CONSOLIDATED FINANCIAL STATEMENTS FOR
THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012 AND 2013
A-44
21 Share options
Share Option Scheme
Share option scheme 2003
(i) The Share Option Scheme (the 2003 Scheme) of the Company was approved and
adopted by its members at an Extraordinary General Meeting held on 28 March 2003.
(ii) The 2003 Scheme is administered by a Committee appointed by the Board of
Directors. The Committee comprises 3 directors, Lim Chung Chun, Lim Wee Kian and
Low Huan Ping as at 31 December 2011, 2012 and 2013.
(iii) Other information regarding the 2003 Scheme are set out below:
• those eligible to participate in the 2003 Scheme comprise confirmed full-time
executives, including directors, who have been employed by the Company and/or
its subsidiaries for a continuous period of at least six months and any non-
executive directors and consultants of the Company and/or its subsidiaries who,
in the absolute discretion of the Committee, are selected to participate in the
2003 Scheme.
• subject to adjustments arising from certain variation in the issued share capital of
the Company:
• the total number of shares in respect of which options may be offered on any
offering date, when added to the number of shares issuable in respect of
outstanding options already granted under the 2003 Scheme, shall not
exceed 3,785,611 (2011 and 2012: 3,785,611) as at 31 December 2013; and
• the offer price in respect of which an option is exercisable shall be at least
85% of the fair value of the shares as at the time of offer of the options to
be determined by the Committee.
• subject to the provisions in the rules of the 2003 Scheme, the option granted
expires on (i) (in the case of executives) the day preceding the tenth anniversary
of the date of the grant of the option or (ii) (in the case of non – executive
directors and consultants) the day preceding the fifth anniversary of the date of
the grant of the option.
• the options granted by the Company do not entitle the holders of the options, by
virtue of such holding, to any rights to participate in any share issue of any other
company.
(iv) The 2003 Scheme was terminated on 23 May 2013 by a resolution passed by its
members at an Annual General Meeting. This will not affect all options remaining
unexercised.
APPENDIX A – AUDITED CONSOLIDATED FINANCIAL STATEMENTS FOR
THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012 AND 2013
A-45
Share option scheme 2013
(i) The 2013 Share Option Scheme (the 2013 Scheme) of the Company was approved
and adopted by its members at an Annual General Meeting held on 23 May 2013.
(ii) The 2013 Scheme is administered by a Committee appointed by the Board of
Directors. The Committee comprises 3 directors, Lim Chung Chun, Lim Wee Kian and
Low Huan Ping as at 31 December 2013.
(iii) Other information regarding the 2013 Scheme are set out below:
• those eligible to participate in the 2013 Scheme comprise confirmed full-time
executives, including directors, who have been employed by the Company and/or
its subsidiaries for a continuous period of at least three months and any
non-executive directors and consultants of the Company and/or its subsidiaries
who, in the absolute discretion of the Committee, are selected to participate in
the Scheme.
• the 2013 Scheme will continue in operation at the discretion of the Committee,
subject to a maximum period of 10 years commencing on 23 May 2013, provided
that the 2013 Scheme may continue beyond the above stipulated period with the
approval of the Company’s shareholders by ordinary resolution in general
meeting.
• subject to adjustments arising from certain variation in the issued share capital of
the Company:
• the total number of shares in respect of which options may be offered on any
offering date, when added to the number of shares issuable in respect of
outstanding options already granted under the 2013 Scheme, shall not
exceed 4,781,725 as at 31 December 2013; and
• the offer price in respect of which an option is exercisable shall be
determined by the Committee at its absolute discretion, fixed by the
Committee and approved by the Shareholders of the Company in general
meeting at a price which is set at a discount, provided that the maximum
discount shall not exceed 20% of the last dealt prices for the share. In
determining the quantum of such discount, the Committee shall take into
consideration the following criteria:
i. the performance of the Company
ii. the individual performance of the participant of the 2013 Scheme
iii. the contribution of the participant of the 2013 Scheme to the success
and development of the Company
APPENDIX A – AUDITED CONSOLIDATED FINANCIAL STATEMENTS FOR
THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012 AND 2013
A-46
At the end of the financial year, details of the options granted under both the 2003 and the
2013 Scheme in respect of unissued ordinary shares of the Company are as follows:
Date of
grant of
options
Exercise
price
per share
Options
outstanding
at 1 January
2011
Options
granted
Options
exercised
Options
forfeited/
expired
Options
outstanding at
31 December
2011
Number of
option
holders at
31 December
2011
Date of
expiration
1/1/2006 $0.49 7,500 – – – 7,500 2 31/12/2015
1/7/2006 $0.70 98,500 – – – 98,500 6 30/6/2016
1/1/2007 $1.20 132,600 – 28,600 – 104,000 13 31/12/2016
1/4/2007 $1.96 43,000 – – 5,000 38,000 3 31/3/2017
1/7/2009 $1.60 236,625 – 18,240 4,800 213,585 45 30/6/2019
1/7/2010 $2.40 287,900 – – 13,000 274,900 55 30/6/2020
806,125 – 46,840 22,800 736,485
Date of
grant of
options
Exercise
price
per share
Options
outstanding
at 1 January
2012
Options
granted
Options
exercised
Options
forfeited/
expired
Options
outstanding at
31 December
2012
Number of
option
holders at
31 December
2012
Date of
expiration
1/1/2006 $0.49 7,500 – – – 7,500 2 31/12/2015
1/7/2006 $0.70 98,500 – 5,000 – 93,500 5 30/6/2016
1/1/2007 $1.20 104,000 – 50,000 – 54,000 9 31/12/2016
1/4/2007 $1.96 38,000 – – – 38,000 3 31/3/2017
1/7/2009 $1.60 213,585 – 60,850 5,550 147,185 28 30/6/2019
1/7/2010 $2.40 274,900 – – 22,100 252,800 50 30/6/2020
736,485 – 115,850 27,650 592,985
Date of
grant of
options
Exercise
price
per share
Options
outstanding
at 1 January
2013
Options
granted
Options
exercised
Options
forfeited/
expired
Options
outstanding at
31 December
2013
Number of
option
holders at
31 December
2013
Date of
expiration
1/1/2006 $0.49 7,500 – 5,400 – 2,100 1 31/12/2015
1/7/2006 $0.70 93,500 – 38,305 – 55,195 4 30/6/2016
1/1/2007 $1.20 54,000 – 20,000 – 34,000 6 31/12/2016
1/4/2007 $1.96 38,000 – 15,200 – 22,800 3 31/3/2017
1/7/2009 $1.60 147,185 – 57,610 – 89,575 17 30/6/2019
1/7/2010 $2.40 252,800 – 45,900 27,000 179,900 36 30/6/2020
1/7/2013 $2.01 – 40,000 40,000 – – – –
1/7/2013 $2.50 – 1,198,865 – 26,750 1,172,115 113 30/6/2023
592,985 1,238,865 222,415 53,750 1,555,685
APPENDIX A – AUDITED CONSOLIDATED FINANCIAL STATEMENTS FOR
THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012 AND 2013
A-47
Movements in the number of share options and their related weighted average exercise
prices are as follows:
Share option
scheme 2003
Share option
scheme 2003
Share option
scheme 2003
Share option
scheme 2013
Weighted
average
exercise
price
2011
No. of
options
2011
Weighted
average
exercise
price
2012
No. of
options
2012
Weighted
average
exercise
price
2013
No. of
options
2013
Weighted
average
exercise
price
2013
No. of
options
2013
At January 1.72 806,125 1.73 736,485 1.77 592,985 – –
Granted – – – – – – 2.48 1,238,865
Exercised 1.36 (46,840) 1.39 (115,850) 1.57 (182,415) 2.01 (40,000)
Forfeited/Expired 2.14 (22,800) 2.24 (27,650) 2.40 (27,000) 2.50 (26,750)
At 31
December 1.73 736,485 1.77 592,985 1.83 383,570 2.50 1,172,115
Number of
options
exercisable at
31 December 1.21 323,210 1.56 441,305 1.83 383,570 – –
Options were exercised on a regular basis throughout the year. The weighted average
share price during the year was $3.32 (2012: $2.08; 2011: $2.34) per share.
Measurement of fair values
The fair value of services received in return for share options granted are measured by
reference to the fair value of share options granted. The estimate of the fair value of the
services received is measured based on the Binomial Model. The share prices applied to
the model are based on last-transacted prices of the Company’s ordinary shares. The
expected life used in the model has been adjusted based on management’s best estimate,
for the effects of non-transferability, exercise restrictions and behavioural considerations.
Fair value of share options and assumptions
Date of grant of
options
1 January
2006
1 July
2006
1 January
2007
1 April
2007
1 July
2009
1 July
2010
1 July
2013
Fair value at
measurement date 0.24 0.24 0.32 0.56 0.48 0.21 0.49
Share price $0.58 $0.70 $1.20 $1.96 $1.60 $2.40 $2.50
Exercise price $0.49 $0.70 $1.20 $1.96 $1.60 $2.40 $2.50
Expected volatility 12.0% 13.2% 20.8% 22.0% 38.9% 7.4% 21.4%
Expected option life
(days) 3,650 3,650 2,190 2,190 1,460 1,460 1,460
Expected dividends – – $0.04 $0.04 $0.10 $0.10 $0.03
Risk-free interest rate 3.50% 3.50% 3.75% 3.75% 3.13% 2.50% 2.25%
The expected volatility is based on the one year historic volatility of the Company’s share
price, adjusted for any expected changes to future volatility.
APPENDIX A – AUDITED CONSOLIDATED FINANCIAL STATEMENTS FOR
THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012 AND 2013
A-48
There are no market conditions associated with the share option grants. Service conditions
and non-market performance conditions are not taken into account in the measurement of
the fair value of the services to be received at the grant date.
22 Earnings per share
Basic earnings per share
2011 2012 2013
Continuing
operations
Discontinued
operation Total
Continuing
operations
Discontinued
operation Total
Continuing
operations
Discontinued
operation Total
$ $ $ $ $ $ $ $ $
Basic earnings per
share is based on:
Net profit/(loss)
attributable to
ordinary
shareholders 2,771,516 (767,881) 2,003,635 3,741,551 (661,130) 3,080,421 8,474,397 (2,713,106) 5,761,291
2011 2012 2013
No. of shares No. of shares No. of shares
As previously reported
Issued ordinary shares at beginning
of the year 33,410,964 33,457,804 33,573,654
Effect of share options exercised
(Share Option Scheme) 25,117 43,630 101,534
Weighted average number of ordinary
shares at the end of the year 33,436,081 33,501,434 33,675,188
Basic earnings per share (cents)
from continuing operations 8.3 11.2 25.2
Basic earnings per share (cents) 6.0 9.2 17.1
As restated*
Weighted average number of ordinary
shares at the end of the year 200,616,486 201,008,604 202,051,128
Basic earnings per share (cents)
from continuing operations 1.4 1.9 4.2
Basic earnings per share (cents) 1.0 1.5 2.9
* adjusted for sub-division of every 1 ordinary share into 6 ordinary shares as completed by the Company on
20 November 2014.
APPENDIX A – AUDITED CONSOLIDATED FINANCIAL STATEMENTS FOR
THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012 AND 2013
A-49
Diluted earnings per share
For the purpose of calculating the diluted earnings per ordinary share, the weighted
average number of ordinary shares in issue is adjusted to take into account the dilutive
effect arising from the dilutive share options under the Share Option Scheme, with the
potential ordinary shares weighted for the period outstanding.
2011 2012 2013
Continuing
operations
Discontinued
operation Total
Continuing
operations
Discontinued
operation Total
Continuing
operations
Discontinued
operation Total
$ $ $ $ $ $ $ $ $
Diluted earnings per
share is based on:
Net profit/(loss)
attributable to ordinary
shareholders 2,771,516 (767,881) 2,003,635 3,741,551 (661,130) 3,080,421 8,474,397 (2,713,106) 5,761,291
The effect of the exercise of share options on the weighted average number of ordinary
shares in issue is as follows:
2011 2012 2013
No. of shares No. of shares No. of shares
As previously reported
Weighted average number of:
Ordinary shares used in the calculation
of basic earnings per share 33,436,081 33,501,434 33,675,188
Potential ordinary shares issuable
under:
– share options (Share Option
Scheme) 404,617 349,444 862,382
Weighted average number of ordinary
shares issued and potential shares
issuable assuming full conversion at
the end of the year 33,840,698 33,850,878 34,537,570
Diluted earnings per share (cents)
from continuing operations 8.2 11.1 24.5
Diluted earnings per share (cents) 5.9 9.1 16.7
As restated*
Weighted average number of ordinary
shares issued and potential shares
issuable assuming full conversion
at the end of the year 203,044,188 203,105,268 207,225,420
Diluted earnings per share (cents)
from continuing operations 1.4 1.9 4.1
Diluted earnings per share (cents) 1.0 1.5 2.8
* adjusted for sub-division of every 1 ordinary share into 6 ordinary shares as completed by the Company on
20 November 2014.
APPENDIX A – AUDITED CONSOLIDATED FINANCIAL STATEMENTS FOR
THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012 AND 2013
A-50
Options to purchase 22,800 shares at $1.96 per share (2011 and 2012: 38,000 shares at
$1.96 per share) issued in April 2007 and 179,900 shares at $2.40 per share (2012: 252,800
shares at $2.40 per share) issued in July 2010 were outstanding in 2013 but not included
in the computation of diluted earnings per share for the corresponding year because these
options were anti-dilutive. The options, which expire on 31 March 2017 and 30 June 2020
are still outstanding as at 31 December 2013.
23 Operating segments
The Group has four reportable segments, as described below, which are the Group’s
strategic business locations. The strategic business locations are managed separately. For
each of the strategic business locations, the Chairman and CEO reviews internal
management reports on monthly basis.
Information regarding the results of each reportable segment is included below.
Performance is measured based on segment profit before tax, as included in the internal
management reports that are reviewed by the Chairman and CEO. Segment profit is used
to measure performance as management believes that such information is the most
relevant in evaluating the results of certain segments relative to other entities that operate
within these industries. Inter-segment pricing is determined on an arm’s length basis.
In presenting information on the basis of geographical segments, segment revenue is
based on a geographical location of customers. Segment non-current assets are based on
the geographical location of the assets.
APPENDIX A – AUDITED CONSOLIDATED FINANCIAL STATEMENTS FOR
THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012 AND 2013
A-51
Geographical segments are analysed by four principal geographical areas as follows:
Information about reportable segments
Singapore Hong Kong Malaysia
India
(Discontinued
operation) Total
$ $ $ $ $
2011
Revenue and expenses
Revenue from external
customers 48,878,695 11,381,746 862,393 528,288 61,651,122
Inter-segment revenue 311,080 – 1,993,342 – 2,304,422
Total revenue 49,189,775 11,381,746 2,855,735 528,288 63,955,544
Finance income 5,612 981 52,787 – 59,380
Finance expense (137,198) – – – (137,198)
Depreciation of plant and
equipment (514,637) (152,241) (311,890) (125,033) (1,103,801)
Amortisation of intangible
assets (74,002) (17,214) (243,804) (180,202) (515,222)
Reportable segment
profit/(loss) before tax 6,097,100 (1,972,941) (1,438,666) (2,256,399) 429,094
Assets and liabilities
Reportable segment assets 23,111,796 5,248,463 3,408,128 7,556,371 39,324,758
Capital expenditure 1,592,804 34,960 56,543 29,539 1,713,846
Segment liabilities 10,097,381 2,496,561 642,969 405,646 13,642,557
2012
Revenue and expenses
Revenue from external
customers 42,867,420 12,395,666 1,150,884 746,381 57,160,351
Inter-segment revenue 221,750 – 1,603,936 – 1,825,686
Total revenue 43,089,170 12,395,666 2,754,820 746,381 58,986,037
Finance income 2,385 297 43,176 – 45,858
Finance expense (71,840) – – – (71,840)
Depreciation of plant and
equipment (456,249) (132,911) (197,443) (69,697) (856,300)
Amortisation of intangible
assets (25,461) (10,943) (34,271) (133,435) (204,110)
Reportable segment
profit/(loss) before tax 6,543,960 (1,188,000) (1,192,649) (1,853,067) 2,310,244
Assets and liabilities
Reportable segment assets 25,706,958 5,168,088 2,090,965 5,203,094 38,169,105
Capital expenditure 108,290 13,192 67,703 24,700 213,885
Segment liabilities 8,466,724 2,608,875 450,690 387,521 11,913,810
APPENDIX A – AUDITED CONSOLIDATED FINANCIAL STATEMENTS FOR
THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012 AND 2013
A-52
Singapore Hong Kong Malaysia
India
(Discontinued
operation) Total
$ $ $ $ $
2013
Revenue and expenses
Revenue from external
customers 52,455,323 15,040,847 1,973,953 588,770 70,058,893
Inter-segment revenue 168,750 – 1,609,538 – 1,778,288
Total revenue 52,624,073 15,040,847 3,583,491 588,770 71,837,181
Finance income 1,882 390 37,256 – 39,528
Finance expense (10,376) – – – (10,376)
Depreciation of plant and
equipment (490,470) (111,142) (101,894) (40,176) (743,682)
Amortisation of intangible
assets (129,878) (4,371) (34,372) (90,587) (259,208)
Reportable segment
profit/(loss) before tax 9,177,667 400,430 (594,384) (3,320,585) 5,663,128
Assets and liabilities
Reportable segment assets 30,389,101 6,636,239 1,431,694 – 38,457,034
Capital expenditure 1,516,075 21,769 16,416 – 1,554,260
Segment liabilities 9,630,867 3,619,665 582,705 – 13,833,237
Reconciliations of reportable segment revenues, profit and loss, assets and liabilities and
other material items:
2011 2012 2013
$ $ $
Revenue
Total revenue for reporting segments 63,955,544 58,986,037 71,837,181
Elimination of inter-segment revenue (2,304,422) (1,825,686) (1,778,288)
Elimination of discontinued operation (528,288) (746,381) (588,770)
Consolidated revenue 61,122,834 56,413,970 69,470,123
Profit or loss
Total profit before tax for reportable segments 429,094 2,310,244 5,663,128
Elimination of segment loss before income tax
from discontinued operation 2,256,399 1,853,067 3,320,585
Elimination of inter-segment sales to
discontinued operation (311,080) (221,750) (168,750)
Consolidated profit before tax 2,374,413 3,941,561 8,814,963
Assets
Total assets for reportable segments 39,324,758 38,169,105 38,457,034
Liabilities
Total liabilities for reportable segments 13,642,557 11,913,810 13,833,237
APPENDIX A – AUDITED CONSOLIDATED FINANCIAL STATEMENTS FOR
THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012 AND 2013
A-53
Reportable
segment
total Adjustment
Consolidated
total
$ $ $
2011
Other material items
Finance income 59,380 – 59,380
Finance expense (137,198) – (137,198)
Capital expenditure 1,713,846 – 1,713,846
Depreciation and amortisation (1,619,023) – (1,619,023)
2012
Other material items
Finance income 45,858 – 45,858
Finance expense (71,840) – (71,840)
Capital expenditure 213,885 – 213,885
Depreciation and amortisation (1,060,410) – (1,060,410)
2013
Other material items
Finance income 39,528 – 39,528
Finance expense (10,376) – (10,376)
Capital expenditure 1,554,260 – 1,554,260
Depreciation and amortisation (1,002,890) – (1,002,890)
24 Financial risk management
Overview
The Group has exposure to the following risks from its use of financial instruments:
• credit risk
• liquidity risk
• foreign currency risk
• interest rate risk
• price risk
This note present information about the Group’s exposure to each of the above risks, the
Group’s objectives, policies and processes for measuring and managing risk, and the
Group’s management of capital. Further quantitative disclosures are included throughout
these financial statements.
APPENDIX A – AUDITED CONSOLIDATED FINANCIAL STATEMENTS FOR
THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012 AND 2013
A-54
Risk management framework
Risk management is integral to the whole business of the Group. The Group has a system
of controls in place to create an acceptable balance between the cost of risks occurring and
the cost of managing the risks. The management continually monitors the Group’s risk
management process to ensure that an appropriate balance between risk and control is
achieved. Risk management policies and systems are reviewed regularly to reflect changes
in market conditions and the Group’s activities.
The Board of Directors oversees how management monitors compliance with the Group’s
risk management policies and procedures and reviews the adequacy of the risk
management framework in relation to the risks faced by the Group.
Credit risk
The Group has a credit policy in place and exposure to credit risk is monitored on an
ongoing basis.
At the reporting date, other than bank balances which are placed with regulated financial
institutions and quoted debt securities managed by fund managers, there were no
significant concentrations of credit risk. The maximum exposure to credit risk is represented
by the carrying amount of each financial asset in the statement of financial position. The
maximum exposure to credit risk for trade and other receivables (excluding accrued
revenue) at the reporting date by type of counterparty was:
2011 2012 2013
$ $ $
Distributors 678,778 467,227 645,199
Retail customers 5,945,000 5,839,207 6,433,303
Others 1,992,455 2,043,447 1,778,304
8,616,233 8,349,881 8,856,806
The Group’s concentration of credit risk relating to trade and other receivables is limited
due to the Group’s many varied customers and the credit quality of its trade and other
receivables is within acceptable risk. The Group’s historical experience in the collection of
trade and other receivable falls within the recorded allowances. Due to these factors,
management believes that no additional credit risk beyond amounts provided for collection
losses is inherent in the Group’s trade and other receivables.
APPENDIX A – AUDITED CONSOLIDATED FINANCIAL STATEMENTS FOR
THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012 AND 2013
A-55
Impairment losses
The ageing of trade and other receivables (excluding accrued revenue) at the reporting date
was:
Gross
Impairment
losses Gross
Impairment
losses Gross
Impairment
losses
2011 2011 2012 2012 2013 2013
$ $ $ $ $ $
Not past due 7,971,698 – 7,651,956 – 8,038,218 –
Past due 0 – 30 days 91,879 – 113,390 – 181,149 –
Past due 31 – 120 days 36,078 – 32,215 – 56,867 –
Past due more than 120 days
but less than 1 year 45,417 – 34,280 – 41,037 –
Past due more than 1 year 474,949 (3,788) 524,443 (6,403) 553,795 (14,260)
8,620,021 (3,788) 8,356,284 (6,403) 8,871,066 (14,260)
The movement in the allowance for impairment losses in respect of trade and other
receivables during the year was as follows:
2011 2012 2013
$ $ $
At 1 January 46,807 3,788 6,403
Impairment losses recognised in the year 115 2,730 7,857
Reversal of impairment losses recognised
in prior years (17,834) (115) –
Amount written-off against allowance (25,300) – –
At 31 December 3,788 6,403 14,260
The trade and other receivables that are past due more than 1 year consist mainly of
commission and fee income significantly payable to third party financial advisers. The
Group’s maximum exposure will be the outstanding balance after the payable amount to
third party financial advisers.
The Group believes that, apart from the above, no additional impairment allowance is
required in respect of the remaining trade and other receivables as these amounts mainly
relate to customers with good credit and payment records with the Group.
Liquidity risk
The Group monitors its liquidity risk and maintains a level of cash and cash equivalents
deemed adequate by management to finance the Group’s operations and to mitigate the
effects of fluctuations in cash flows.
APPENDIX A – AUDITED CONSOLIDATED FINANCIAL STATEMENTS FOR
THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012 AND 2013
A-56
The following are contractual maturities of financial liabilities, including estimated interest
payments and excluding the impact of netting agreements:
Carrying
amounts
Contractual
cash flows
Within
1 year
Within
1 to 5 years
$ $ $ $
2011
Non-derivative financial
liabilities
Unsecured bank loan 2,030,797 2,114,840 1,354,221 760,619
Trade and other payables 11,410,926 11,410,926 11,410,926 –
13,441,723 13,525,766 12,765,147 760,619
2012
Non-derivative financial
liabilities
Unsecured bank loan 748,189 760,619 760,619 –
Trade and other payables 10,450,713 10,450,713 10,450,713 –
11,198,902 11,211,332 11,211,332 –
2013
Non-derivative financial
liabilities
Unsecured bank loan – – – –
Trade and other payables 13,188,757 13,188,757 12,835,357 353,400
13,188,757 13,188,757 12,835,357 353,400
Foreign currency risk
Exposure to foreign currency risk is insignificant as the Group’s incomes and expenses,
assets and liabilities are substantially denominated in the respective functional currencies
of Group entities. The exposure is monitored on an ongoing basis and the Group
endeavours to keep the net exposure at an acceptable level.
APPENDIX A – AUDITED CONSOLIDATED FINANCIAL STATEMENTS FOR
THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012 AND 2013
A-57
The Group’s exposures to foreign currency risk was as follows based on notional amounts:
US dollar Euro Pound
Australia
dollar
Chinese
yuan
$ $ $ $ $
31 December 2011
Cash and cash
equivalents 1,055,855 291,017 40,789 94,835 –
31 December 2012
Cash and cash
equivalents 908,603 177,751 43,850 94,184 75,555
31 December 2013
Cash and cash
equivalents 928,274 135,518 68,674 105,746 120,934
Sensitivity analysis
A 5% strengthening of Singapore dollar, as indicated below, against the following currencies
at 31 December would decrease profit or loss by the amounts shown below. This analysis
is based on foreign currency exchange rate variances that the Group considered to be
reasonably possible at the end of the reporting period. The analysis assumes that all other
variables, in particular interest rates, remain constant. The analysis is performed on the
same basis for 2011 and 2012.
Profit or loss
31 December
2011
31 December
2012
31 December
2013
$ $ $
US dollar 52,793 45,430 46,414
Euro 14,551 8,888 6,776
Pound 2,039 2,193 3,434
Australian dollar 4,742 4,709 5,287
Chinese yuan – 3,778 6,047
74,125 64,998 67,958
A 5% weakening of Singapore dollar against the above currencies at 31 December would
have had the equal but opposite effect on the above currencies to the amounts shown
above, on the basis that all other variables remain constant.
APPENDIX A – AUDITED CONSOLIDATED FINANCIAL STATEMENTS FOR
THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012 AND 2013
A-58
Interest rate risk
The Group’s exposure to changes in interest rates relates primarily to interest-bearing
financial assets and liabilities. Interest rate risk is managed by the Group on an ongoing
basis with the primary objective of limiting the extent to which interest income could be
impacted from an adverse movement in interest rates.
Sensitivity analysis for variable rate instruments
For interest-bearing financial instruments, a change of 15 basis points (bp) in interest rate
at the reporting date would increase/(decrease) profit or loss by the amounts shown below.
This analysis assumes that all other variables, in particular foreign currency rates, remain
constant. The analysis is performed on the same basis for 2011 and 2012.
31 December 2011 31 December 2012 31 December 2013
Profit or loss Profit or loss Profit or loss
15 bp
increase
15 bp
decrease
15 bp
increase
15 bp
decrease
15 bp
increase
15 bp
decrease
$ $ $ $ $ $
Cash and cash
equivalents 155,778 (62,311) 146,296 (78,024) 175,977 (93,854)
Price risk
The Group’s exposure to price risk relates to changes in the dealing price of unit trust and
Singapore government securities for unexecuted orders placed. The Group has established
procedures to detect such orders and to report such incidences to management. The
management has also taken up a professional indemnity insurance and the amount insured
is reviewed annually. The Group’s exposure to price risk also includes the risk that changes
in market prices will affect the Group’s income or the value of its holdings in investments in
debt/equity securities.
Sensitivity analysis – securities price risk
A 5% increase in the underlying security prices of the Group’s available-for-sale quoted
debt/equity securities at the reporting date would increase equity by $100,575 (2012:
$367,255; 2011: $400,610). This analysis assumes that all other variables remain constant.
A 5% decrease in the underlying security prices would have had the equal but opposite
effect to the amounts shown above, on the basis that all other variables remain constant.
Capital management
The primary objective of the Group’s capital management is to ensure that it maintains
healthy capital ratios in order to support its business and maximise shareholders value.
The Group manages its capital structure and makes alignment to it, in light of changes in
economic conditions. To maintain or adjust the capital structure, the Group may align the
dividend payment to shareholders, return capital to shareholders or issue new shares.
APPENDIX A – AUDITED CONSOLIDATED FINANCIAL STATEMENTS FOR
THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012 AND 2013
A-59
There were no changes in the Group’s approach to capital management during the year.
Some of the subsidiaries are required to maintain sufficient financial resources by the local
regulators in the respective jurisdictions in which they operate to ensure that the relevant
regulatory limits are complied with.
Determination of fair values
A number of the Group’s accounting policies and disclosures require the determination of
fair value for financial assets and liabilities. Fair values have been determined for
measurement and/or disclosure purposes based on the following methods. When
applicable, further information about the assumptions made in determining fair values is
disclosed in the notes specific to that asset or liability.
Investment in quoted debt/equity securities
The fair value of available-for-sale quoted debt/equity securities is determined by reference
to its bid price at the reporting date.
Intra-group financial guarantees
The value of financial guarantees provided by the Company to its subsidiaries is determined
by reference to the difference in the interest rates, by comparing the actual rates charged
by the bank with these guarantees made available, with the estimated rates that the banks
would have charged had these guarantees not been available.
Other financial assets and liabilities
The carrying amounts of financial assets and liabilities with a maturity of less than one year
(including trade and other receivables, cash and cash equivalents and trade and other
payables) are assumed to approximate their fair values because of the short period to
maturity. For unsecured bank loan, the fair value is calculated based on the present value
of future principal and interest cash flows, discounted at the market rate of interest at the
reporting date.
APPENDIX A – AUDITED CONSOLIDATED FINANCIAL STATEMENTS FOR
THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012 AND 2013
A-60
Fair values versus carrying amounts
The fair values of financial assets and liabilities, together with the amounts shown in the
statement of financial position, are as follows:
2011 2012 2013
Total
carrying
amount Fair value
Total
carrying
amount Fair value
Total
carrying
amount Fair value
$ $ $ $ $ $
Cash and cash
equivalents 12,587,410 12,587,410 13,516,229 13,516,229 16,718,909 16,718,909
Trade and other
receivables 15,315,940 15,315,940 14,652,693 14,652,693 16,763,911 16,763,911
Available-for-sale
financial assets
– quoted debt securities 7,960,706 7,960,706 7,345,097 7,345,097 2,011,502 2,011,502
– quoted equity
securities 51,496 51,496 – – – –
Other financial liabilities
within the scope of
FRS39 (13,441,723) (13,441,723) (11,198,902) (11,198,902) (13,188,757) (13,188,757)
Fair values hierarchy
The tables below analyse fair value measurements for financial assets and financial
liabilities, by the levels in the fair value hierarchy based on the inputs to valuation
techniques. The different levels are defined as follows:
• Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities.
• Level 2: inputs other than quoted prices included in Level 1 that are observable for the
asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).
• Level 3: inputs for the asset or liability that are not based on observable market data
(unobservable inputs).
APPENDIX A – AUDITED CONSOLIDATED FINANCIAL STATEMENTS FOR
THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012 AND 2013
A-61
Level 1 Level 2 Level 3 Total
$ $ $ $
Financial assets and financial liabilities carried at fair value
2011
Available-for-sale financial
assets:
– quoted debt securities 7,960,706 – – 7,960,706
– quoted equity securities 51,496 – – 51,496
8,012,202 – – 8,012,202
2012
Available-for-sale financial
assets:
– quoted debt securities 7,345,097 – – 7,345,097
2013
Available-for-sale financial
assets:
– quoted debt securities 2,011,502 – – 2,011,502
* Excludes financial assets and financial liabilities whose carrying amounts measured on the amortised cost
basis approximate their fair values due to their short-term nature and where the effect of discounting is
immaterial.
25 Commitments
As at the reporting dates, the Group have the following commitments:
(a) Future minimum lease payments in respect of non-cancellable operating leases are as
follows:
2011 2012 2013
$ $ $
Within 1 year 4,251,669 4,095,529 3,908,357
Within 2 to 5 years 13,536,613 9,791,121 5,283,689
After 5 years 565,439 – –
18,353,721 13,886,650 9,192,046
The Group leases a number of office premises under operating leases. The leases
typically run for initial period of three to six years, with an option to renew the lease
after that date.
APPENDIX A – AUDITED CONSOLIDATED FINANCIAL STATEMENTS FOR
THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012 AND 2013
A-62
(b) Capital expenditure in respect of plant and equipment are as follows:
2011 2012 2013
$ $ $
Contracted but not provided for 51,174 150,000 35,428
(c) Under regulatory requirements, some of the subsidiaries are required to maintain
sufficient capital to ensure that the relevant regulatory limits as set out by the
authorities are complied with. The Company has commitment to contribute additional
capital as and when the subsidiaries’ capital fall below the relevant regulatory limits.
26 Related parties
Key management personnel compensation
Compensation paid or payable to key management personnel comprise:
2011 2012 2013
$ $ $
Fees to non-executive directors 207,724 182,000 254,083
Remuneration paid or payable to key
management personnel
– short-term employment benefits 2,002,213 2,026,314 2,192,941
– shared-based payment 21,932 10,883 35,101
Directors and key management personnel also participate in the Company’s Share Option
Scheme. In 2013, 395,250 share options (2011 and 2012: nil) was granted to directors and
key management personnel of the Group. As at 31 December 2013, 531,420 (2012:
233,575; 2011: 281,075) of those share options were outstanding.
Other related party transactions
For the purpose of these financial statements, parties are considered to be related to the
Group if the Group entities have the ability, directly or indirectly, to control the party or
exercise significant influence over the party in making financial and operating decisions, or
vice versa, or where the Group entities are subject to common control or common
significant influence. Related parties may be individuals or entities.
Other than disclosed elsewhere in the financial statements, there were no other
transactions with the Group and related parties during the financial year.
APPENDIX A – AUDITED CONSOLIDATED FINANCIAL STATEMENTS FOR
THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012 AND 2013
A-63
27 Subsequent events
On 14 February 2014, a one-tier tax-exempt 2013 final dividend of 3.9 cents per share was
proposed by the Board of Directors. This one-tier tax-exempt dividend has not been
provided for.
On 7 March 2014, the Company entered into an agreement with RHB Investment Bank
Berhad to acquire the remaining interest in a subsidiary of the Group, iFAST-OSK Sdn. Bhd.
(“iFAST-OSK”), with cash consideration of RM 9,070,000. The acquisition was completed
on 18 July 2014. Following this transfer, iFAST-OSK has become a wholly-owned subsidiary
of the Company. With effect from 12 August 2014, its name has changed from iFAST-OSK
Sdn. Bhd. to iFAST Malaysia Sdn. Bhd..
On 20 June 2014, the Company entered into an agreement with Providend Holding Private
Limited (“Providend”) to acquire a 19.9% stake holding in Providend with cash
consideration of $400,157. The agreement also gives the Company a call option to
purchase a further 10.1% stake holding in Providend with cash consideration of $319,244
within two years from the completion of the first acquisition. The acquisition was completed
on 25 July 2014. Following this acquisition, Providend has become an associate of the
Company.
On 7 July 2014, iFAST Financial (HK) Limited, a subsidiary of the Company, incorporated
a wholly-owned subsidiary, iFAST Platform Services (Shenzhen) Qianhai Limited, in China.
On 28 April, 1 August and 1 September 2014, one-tier 2014 tax-exempt interim dividends
of 2.5 cents per share, 5.7 cents per share and 20.0 cents per share were proposed by the
Board of Directors on the respective dates. These dividends have not been provided for in
these financial statements.
On 14 November 2014, the Board of Directors of the Company approved for every 1
ordinary share in the issued and paid-up share capital of the Company be sub-divided into
6 ordinary shares in the capital of the Company. The sub-division was completed on 20
November 2014.
APPENDIX A – AUDITED CONSOLIDATED FINANCIAL STATEMENTS FOR
THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012 AND 2013
A-64
iFAST Corporation Ltd.
and its Subsidiaries
Registration Number: 200007899C
Interim Consolidated Financial Statements
For the nine months ended 30 September 2014
APPENDIX B – UNAUDITED INTERIM CONSOLIDATED FINANCIAL
STATEMENTS FOR THE NINE MONTHS ENDED 30 SEPTEMBER 2014
B-1
Independent auditors’ report on review of interim consolidated financial statements
The Board of Directors
iFAST Corporation Ltd. and its subsidiaries
Introduction
We have reviewed the accompanying consolidated statement of financial position of iFAST
Corporation Ltd. and its subsidiaries (the Group) as at 30 September 2014, the related
consolidated statement of profit or loss, statement of comprehensive income, changes in equity
and cash flows for the nine months then ended, and a summary of significant accounting policies
and other explanatory notes (the Interim Consolidated Financial Statements). Management is
responsible for the preparation and fair presentation of these Interim Consolidated Financial
Statements in accordance with Singapore Financial Reporting Standard (FRS) 34 Interim
Financial Reporting. Our responsibility is to express a conclusion on these Interim Consolidated
Financial Statements based on our review.
Scope of review
We conducted our review in accordance with Singapore Standard on Review Engagements 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 Consolidated Financial Statements do not present fairly, in all material
respects, the financial position of the Group as at 30 September 2014, and of its financial
performance and its cash flows for the nine months then ended in accordance with FRS 34 Interim
Financial Reporting.
APPENDIX B – UNAUDITED INTERIM CONSOLIDATED FINANCIAL
STATEMENTS FOR THE NINE MONTHS ENDED 30 SEPTEMBER 2014
B-2
Restriction on distribution and use
This report is made solely to you as a body and for the inclusion in the prospectus to be issued
in relation to the proposed offering of the shares of the Company in connection with the
Company’s listing on the Singapore Exchange Securities Trading Limited.
KPMG LLP
Public Accountants and
Chartered Accountants
Singapore
4 December 2014
Jeya Poh Wan S/O K. Suppiah
Partner
APPENDIX B – UNAUDITED INTERIM CONSOLIDATED FINANCIAL
STATEMENTS FOR THE NINE MONTHS ENDED 30 SEPTEMBER 2014
B-3
Consolidated statement of financial position
As at 30 September 2014
Note
30 September
2014
31 December
2013
$ $
Assets
Plant and equipment 4 1,726,598 1,633,848
Intangible assets 5 1,339,369 663,838
Associate 7 400,539 –
Deferred tax assets 14 21,618 34,559
Other investments 10 1,802,402 2,011,502
Club membership 8 11,429 11,429
Total non-current assets 5,301,955 4,355,176
Current tax receivable 29,935 5,489
Trade and other receivables 9 17,940,430 16,763,911
Prepayments 497,284 613,549
Cash at bank and in hand 11 15,148,947 16,292,523
Money market funds 11 36,267 426,386
Total current assets 33,652,863 34,101,858
Held under trust
Client bank accounts 12 121,552,395 100,599,080
Client ledger balances 12 (121,552,395) (100,599,080)
– –
Total assets 38,954,818 38,457,034
Equity
Share capital 13 11,379,244 10,670,001
Reserves 13 7,362,197 13,295,747
Equity attributable to owners of the Company 18,741,441 23,965,748
Non-controlling interests – 658,049
Total equity 18,741,441 24,623,797
Liabilities
Deferred tax liabilities 14 125,385 76,746
Other payables 15 176,700 353,400
Total non-current liabilities 302,085 430,146
Trade and other payables 15 19,536,373 12,835,357
Current tax payable 374,919 567,734
Total current liabilities 19,911,292 13,403,091
Total liabilities 20,213,377 13,833,237
Total equity and liabilities 38,954,818 38,457,034
The accompanying notes form an integral part of these interim financial statements.
APPENDIX B – UNAUDITED INTERIM CONSOLIDATED FINANCIAL
STATEMENTS FOR THE NINE MONTHS ENDED 30 SEPTEMBER 2014
B-4
Consolidated statement of profit or loss
For the nine months ended 30 September 2014
Note
1 January
2014 to
30 September
2014
1 January
2013 to
30 September
2013
$ $
Continuing operations
Revenue 16 58,594,961 52,686,167
Commission and fee paid or payable to third party
financial advisers (31,267,490) (29,176,269)
27,327,471 23,509,898
Other operating income 17 208,863 72,666
Depreciation of plant and equipment (579,825) (528,497)
Amortisation of intangible assets (143,920) (120,768)
Staff costs (11,249,735) (9,981,268)
Other operating expenses (7,679,447) (7,021,579)
Results from operating activities 7,883,407 5,930,452
Finance income 73,980 30,675
Finance expense – (10,376)
Net finance income 73,980 20,299
Share of result of associate, net of tax 7 382 –
Profit before tax 7,957,769 5,950,751
Tax expense 19 (380,566) (550,144)
Profit from continuing operations 7,577,203 5,400,607
Discontinued operation
Loss from discontinued operation, net of tax 20 – (635,022)
Profit for the period 18 7,577,203 4,765,585
Profit attributable to:
Owners of the Company from continuing operations 7,614,892 5,594,547
Owners of the Company from discontinued operation – (196,293)
Non-controlling interests from continuing operations (37,689) (193,940)
Non-controlling interests from discontinued operation – (438,729)
Profit for the period 7,577,203 4,765,585
Earnings per share from continuing operations
Basic earnings per share (cents) 22 3.7 2.8
Diluted earnings per share (cents) 22 3.6 2.7
Earnings per share
Basic earnings per share (cents) 22 3.7 2.7
Diluted earnings per share (cents) 22 3.6 2.6
The accompanying notes form an integral part of these interim financial statements.
APPENDIX B – UNAUDITED INTERIM CONSOLIDATED FINANCIAL
STATEMENTS FOR THE NINE MONTHS ENDED 30 SEPTEMBER 2014
B-5
Consolidated statement of comprehensive income
For the nine months ended 30 September 2014
Note
1 January
2014 to
30 September
2014
1 January
2013 to
30 September
2013
$ $
Profit for the period 7,577,203 4,765,585
Other comprehensive income
Items that are or may be reclassified
subsequently to profit or loss:
Net change in fair value of available-for-sale
financial assets 76,990 215,349
Net change in fair value of available-for-sale
financial assets reclassified to profit or loss (99,464) (656,056)
Foreign currency translation differences for foreign
operations 63,073 (347,088)
Other comprehensive income for the period,
net of tax 40,599 (787,795)
Total comprehensive income for the period 7,617,802 3,977,790
Attributable to:
Owners of the Company 7,650,152 5,019,189
Non-controlling interests (32,350) (1,041,399)
Total comprehensive income for the period 7,617,802 3,977,790
Attributable to:
Owners of the Company
Total comprehensive income from continuing
operations, net of tax 7,650,152 5,625,459
Total comprehensive income from discontinued
operation, net of tax – (606,270)
Total comprehensive income for the period
attributable to owners of the Company 7,650,152 5,019,189
The accompanying notes form an integral part of these interim financial statements.
APPENDIX B – UNAUDITED INTERIM CONSOLIDATED FINANCIAL
STATEMENTS FOR THE NINE MONTHS ENDED 30 SEPTEMBER 2014
B-6
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B-10
Consolidated statement of cash flows
For the nine months ended 30 September 2014
Note
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2014 to
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2014
1 January
2013 to
30 September
2013
$ $
Cash flows from operating activities
Profit for the period 7,577,203 4,765,585
Adjustments for:
Depreciation of plant and equipment 4 579,825 568,674
Gain on disposal of plant and equipment (39) –
Amortisation of intangible assets 5 143,920 211,356
Impairment losses on trade receivables, net 2,818 5,448
Bad debt written off 35,452 2,073
Equity settled share-based payment transactions 248,016 13,111
Dividend income on available-for-sale quoted debt
securities, net (16,753) (16,256)
Gain on redemption of quoted debt securities (99,464) (656,056)
Share of result of associate (382) –
Dividend income on investment in associate (3,727) –
Unrealised exchange loss, net 35,409 10,669
Finance income (73,980) (30,675)
Finance expense – 10,376
Tax expense 380,566 550,144
8,808,864 5,434,449
Change in trade and other receivables (1,516,664) (1,323,966)
Change in trade and other payables 306,124 1,848,661
Cash generated from operations 7,598,324 5,959,144
Taxes paid (536,238) (628,620)
Interest received 73,980 30,675
Interest paid – (10,376)
Net cash from operating activities 7,136,066 5,350,823
Cash flows from investing activities
Purchase of plant and equipment (670,191) (608,017)
Purchase of intangible assets (995,730) (67,000)
Proceeds from disposal of plant and equipment 39 333
Acquisition of associate 7 (400,157) –
Proceeds from redemption of quoted debt securities 3,302,844 3,625,167
Purchase of available-for-sale quoted debt securities (3,000,000) (2,065,906)
Net cash (used in)/from investing activities (1,763,195) 884,577
The accompanying notes form an integral part of these interim financial statements.
APPENDIX B – UNAUDITED INTERIM CONSOLIDATED FINANCIAL
STATEMENTS FOR THE NINE MONTHS ENDED 30 SEPTEMBER 2014
B-11
Consolidated statement of cash flows
For the nine months ended 30 September 2014 (cont’d)
Note
1 January
2014 to
30 September
2014
1 January
2013 to
30 September
2013
$ $
Cash flows from financing activities
Dividends paid to owners of the Company (4,104,141) (2,040,534)
Proceeds from exercise of share options 709,243 315,474
Payment on acquisition of additional interests in
subsidiaries 6 (3,539,098) –
Repayment of unsecured bank loan – (748,189)
Net cash used in financing activities (6,933,996) (2,473,249)
Net (decrease)/increase in cash and cash equivalents (1,561,125) 3,762,151
Cash and cash equivalents at 1 January 16,718,909 13,516,229
Effect of exchange rate fluctuations on cash held 27,430 (22,287)
Cash and cash equivalents at 30 September 11 15,185,214 17,256,093
The accompanying notes form an integral part of these interim financial statements.
APPENDIX B – UNAUDITED INTERIM CONSOLIDATED FINANCIAL
STATEMENTS FOR THE NINE MONTHS ENDED 30 SEPTEMBER 2014
B-12
Notes to the interim financial statements
These notes form an integral part of the interim financial statements.
The interim financial statements were authorised for issue by the Board of Directors on
4 December 2014.
1 Domicile and activities
iFAST Corporation Ltd. (the Company) is incorporated in the Republic of Singapore and has
its registered office at 10 Collyer Quay, #26-01 Ocean Financial Centre Building, Singapore
049315. The Company changed its name to iFAST Corporation Ltd. upon its conversion to
a public company on 18 November 2014.
The interim financial statements relate to the Company and its subsidiaries (together
referred to as the Group).
The principal activities of the Group are those relating to investment holding, development
of software, marketing of unit trusts and Singapore government securities through websites
and acting as an investment advisor, dealer and custodian in respect to unit trusts and
Singapore government securities.
2 Basis of preparation
2.1 Statement of compliance
The financial statements have been prepared in accordance with Singapore Financial
Reporting Standards (FRS).
2.2 Basis of measurement
The financial statements have been prepared on the historical cost basis except as
otherwise described in the notes below.
2.3 Functional and presentation currency
These financial statements are presented in Singapore dollars which is the Company’s
functional currency.
2.4 Use of estimates and judgements
The preparation of the financial statements in conformity with FRSs requires management
to make judgements, estimates and assumptions that affect the application of accounting
policies and the reported amounts of assets, liabilities, income and expenses. Actual results
may differ from these estimates.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to
accounting estimates are recognised in the period in which the estimates are revised and
in any future periods affected.
APPENDIX B – UNAUDITED INTERIM CONSOLIDATED FINANCIAL
STATEMENTS FOR THE NINE MONTHS ENDED 30 SEPTEMBER 2014
B-13
In particular, information about assumptions and estimation uncertainties that have a
significant risk of resulting in a material adjustment within the next financial period are
included in Note 21 – share options.
Measurement of fair values
A number of the Group’s accounting policies and disclosures require the measurement of
fair values, for both financial and non-financial assets and liabilities.
The Group has an established control framework with respect to the measurement of fair
values. When measuring the fair value of an asset or a liability, the Group uses market
observable data as far as possible. Fair values are categorised into different levels in a fair
value hierarchy based on the inputs used in the valuation techniques as follows:
• Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities.
• Level 2: inputs other than quoted prices included in Level 1 that are observable for the
asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).
• Level 3: inputs for the asset or liability that are not based on observable market data
(unobservable inputs).
If the inputs used to measure the fair value of an asset or a liability might be categorised
in different levels of the fair value hierarchy, then the fair value measurement is categorised
in its entirety in the same level of the fair value hierarchy as the lowest level input that is
significant to the entire measurement (with Level 3 being the lowest).
The Group recognises transfers between levels of the fair value hierarchy as of the end of
the reporting period during which the change has occurred.
Further information about the assumptions made in measuring fair values is included in
Note 24 – financial risk management.
2.5 Changes in accounting policies
(i) Subsidiaries
As a result of FRS 110 Consolidated Financial Statements, the Group has changed its
accounting policy for determining whether it has control over and consequently whether it
consolidates it investees. FRS 110 introduces a new control model that focuses on whether
the Group has power over the investee, exposure or rights to variable returns from its
involvement with the investee and ability to use its power to affect those returns.
(ii) Disclosure of interests in other entities
From 1 January 2014, as a result of FRS 112 Disclosure of Interests in Other Entities, the
Group has expanded its disclosures about its interests in subsidiaries and associate.
APPENDIX B – UNAUDITED INTERIM CONSOLIDATED FINANCIAL
STATEMENTS FOR THE NINE MONTHS ENDED 30 SEPTEMBER 2014
B-14
(iii) Offsetting of financial assets and financial liabilities
Under the Amendments to FRS 32 Financial Instruments: Presentation – Offsetting
Financial Assets and Financial Liabilities, to qualify for offsetting, the right to set off a
financial asset and a financial liability must not be contingent on a future event and must be
enforceable both in the normal course of business and in the event of default, insolvency or
bankruptcy of the entity and all counterparties.
The adoption of these standards and amendments has no significant effect on the
consolidated financial statements of the Group.
3 Significant accounting policies
The accounting policies set out below have been applied consistently to all periods
presented in these financial statements, and have been applied consistently by Group
entities, except as explained in note 2.5, which addresses changes in accounting policies.
3.1 Basis of consolidation
(i) Business combinations
Business combinations are accounted for using the acquisition method in accordance with
FRS 103 Business Combination as at the acquisition date, which is the date on which
control is transferred to the Group.
The Group measures goodwill at the acquisition date as:
• the fair value of the consideration transferred; plus
• the recognised amount of any non-controlling interests (NCI) in the acquiree; plus
• if the business combination is achieved in stages, the fair value of the pre-existing
equity interest in the acquiree,
over the net recognised amount (generally fair value) of the identifiable assets acquired and
liabilities assumed. Any goodwill that arises is tested annually for impairment.
When the excess is negative, a bargain purchase gain is recognised immediately in profit
or loss.
The consideration transferred does not include amounts related to the settlement of
pre-existing relationships. Such amounts are generally recognised in profit or loss.
Any contingent consideration payable is recognised at fair value at the acquisition date and
included in the consideration transferred. If the contingent consideration is classified as
equity, it is not remeasured and settlement is accounted for within equity. Otherwise,
subsequent changes to the fair value of the contingent consideration are recognised in profit
or loss.
APPENDIX B – UNAUDITED INTERIM CONSOLIDATED FINANCIAL
STATEMENTS FOR THE NINE MONTHS ENDED 30 SEPTEMBER 2014
B-15
When share-based payment awards (replacement awards) are exchanged for awards held
by the acquiree’s employees (acquiree’s awards) and relate to past services, then all or a
portion of the amount of the acquirer’s replacement awards is included in measuring the
consideration transferred in the business combination. This determination is based on the
market-based value of the replacement awards compared with the market-based value of
the acquiree’s awards and the extent to which the replacement awards relate to past and/or
future service.
NCI that are present ownership interests and entitle their holders to a proportionate share
of the acquiree’s net assets in the event of liquidation are measured at fair value or at the
NCI’s proportionate share of the recognised amounts of the acquiree’s identifiable net
assets, at the acquisition date. All other NCI are measured at acquisition-date fair value,
unless another measurement basis is required by FRSs.
Costs related to the acquisition, other than those associated with the issue of debt or equity
securities, that the Group incurs in connection with a business combination are expensed
as incurred.
Changes in the Group’s interest in a subsidiary that do not result in a loss of control are
accounted for as transactions with owners in their capacity as owners and therefore no
adjustments are made to goodwill and no gain or loss is recognised in profit or loss.
Adjustments to NCI arising from transactions that do not involve the loss of control are
based on a proportionate amount of the net assets of the subsidiary.
(ii) Subsidiaries
Subsidiaries are entities controlled by the Group. The Group controls an entity when it is
exposed to, or has rights to, variable returns from its involvement with the entity and has the
ability to affect those returns through its power over the entity. The financial statements of
subsidiaries are included in the consolidated financial statements from the date that control
commences until the date that control ceases.
The accounting policies of subsidiaries have been changed when necessary to align them
with the policies adopted by the Group. Losses applicable to the NCI in a subsidiary are
allocated to the NCI even if doing so causes the NCI to have a deficit balance.
(iii) Loss of control
Upon the loss of control, the Group derecognises the assets and liabilities of the subsidiary,
any NCI and the other components of equity related to the subsidiary. Any surplus or deficit
arising on the loss of control is recognised in profit or loss. If the Group retains any interest
in the previous subsidiary, then such interest is measured at fair value at the date that
control is lost. Subsequently, it is accounted for as an equity-accounted investee or as an
available-for-sale financial asset depending on the level of influence retained.
(iv) Investment in associate (equity-accounted investee)
Associate is an entity in which the Group has significant influence, but not control or joint
control, over the financial and operating policies of this entity. Significant influence is
presumed to exist when the Group holds 20% or more of the voting power of another entity.
APPENDIX B – UNAUDITED INTERIM CONSOLIDATED FINANCIAL
STATEMENTS FOR THE NINE MONTHS ENDED 30 SEPTEMBER 2014
B-16
Investment in associate is accounted for using the equity method. They are recognised
initially at cost, which includes transaction costs. Subsequent to initial recognition, the
consolidated financial statements include the Group’s share of the profit or loss and other
comprehensive income of equity-accounted investee, after adjustments to align the
accounting policies with those of the Group, from the date that significant influence or joint
control commences until the date that significant influence ceases.
When the Group’s share of losses exceeds its interest in an equity-accounted investee, the
carrying amount of the investment, together with any long-term interests that form part
thereof, is reduced to zero, and the recognition of further losses is discontinued except to
the extent that the Group has an obligation to fund the investee’s operations or has made
payments on behalf of the investee.
(v) Transactions eliminated on consolidation
Intra-group balances and transactions, and any unrealised income or expenses arising from
intra-group transactions, are eliminated in preparing the consolidated financial statements.
Unrealised gains arising from transactions with equity-accounted investee are eliminated
against the investment to the extent of the Group’s interest in the investee. Unrealised
losses are eliminated in the same way as unrealised gains, but only to the extent that there
is no evidence of impairment.
3.2 Foreign currency
(i) Foreign currency transactions
Transactions in foreign currencies are translated to the respective functional currencies of
the Group entities at exchange rates at the dates of the transactions. Monetary assets and
liabilities denominated in foreign currencies at the end of the reporting period are
retranslated to the functional currency at the exchange rate at that date. The foreign
currency gain or loss on monetary items is the difference between amortised cost in the
functional currency at the beginning of the year, adjusted for effective interest and payments
during the year, and the amortised cost in foreign currency translated at the exchange rate
at the end of the year.
Non-monetary assets and liabilities denominated in foreign currencies that are measured at
fair value are retranslated to the functional currency at the exchange rate at the date that
the fair value was determined. Non-monetary items in a foreign currency that are measured
in terms of historical cost are translated using the exchange rate at the date of the
transaction. Foreign currency differences arising on retranslation are recognised in profit or
loss, except for the differences arising on the retranslation of available-for-sale equity
instruments (except on impairment in which case foreign currency differences that have
been recognised in other comprehensive income are reclassified to profit or loss), which are
recognised in other comprehensive income.
APPENDIX B – UNAUDITED INTERIM CONSOLIDATED FINANCIAL
STATEMENTS FOR THE NINE MONTHS ENDED 30 SEPTEMBER 2014
B-17
(ii) Foreign operations
The assets and liabilities of foreign operations, excluding goodwill and fair value
adjustments arising on acquisition, are translated to Singapore dollars at exchange rates at
the reporting date. The income and expenses of foreign operations are translated to
Singapore dollars at exchange rates at the dates of the transactions. Goodwill and fair value
adjustments arising on the acquisition of a foreign operation on or after 1 January 2005 are
treated as assets and liabilities of the foreign operation and translated at the reporting rate.
For acquisitions prior to 1 January 2005, the exchange rates at the date of acquisition were
used.
Foreign currency differences are recognised in other comprehensive income, and
presented in the foreign currency translation reserve (translation reserve) in equity.
However, if the operation is a non-wholly-owned subsidiary, then the relevant proportionate
share of the translation difference is allocated to the NCI. When a foreign operation is
disposed of such that control is lost, the cumulative amount in the translation reserve
related to that foreign operation is reclassified to profit or loss as part of the gain or loss on
disposal. When the Group disposes of only part of its interest in a subsidiary that includes
a foreign operation while retaining control, the relevant proportion of the cumulative amount
is reattributed to NCI.
When the settlement of a monetary item receivable from or payable to a foreign operation
is neither planned nor likely in the foreseeable future, foreign exchange gains and losses
arising from such a monetary item are considered to form part of a net investment in a
foreign operation. These are recognised in other comprehensive income, and are presented
in the translation reserve in equity.
3.3 Plant and equipment
(i) Recognition and measurement
Items of plant and equipment are measured at cost less accumulated depreciation and
accumulated impairment losses.
Cost includes expenditure that is directly attributable to the acquisition of the asset. The
cost of self-constructed assets includes the cost of materials and direct labour, any other
costs directly attributable to bringing the asset to a working condition for its intended use,
and the cost of dismantling and removing the items and restoring the site on which they are
located and capitalised borrowing costs. Cost also may include transfers from other
comprehensive income of any gain or loss on qualifying cash flow hedges of foreign
currency purchases of plant and equipment. Purchased software that is integral to the
functionality of the related equipment is capitalised as part of that equipment.
When parts of an item of plant and equipment have different useful lives, they are accounted
for as separate items (major components) of plant and equipment.
The gain or loss on disposal of an item of plant and equipment (calculated as the difference
between the net proceeds from disposal and the carrying amount of the item) is recognised
net within other income/other expense in profit or loss.
APPENDIX B – UNAUDITED INTERIM CONSOLIDATED FINANCIAL
STATEMENTS FOR THE NINE MONTHS ENDED 30 SEPTEMBER 2014
B-18
(ii) Subsequent costs
The cost of replacing a component of an item of plant and equipment is recognised in the
carrying amount of the item if it is probable that the future economic benefits embodied
within the component will flow to the Group and its cost can be measured reliably. The
carrying amount of the replaced component is derecognised. The costs of the day-to-day
servicing of plant and equipment are recognised in profit or loss as incurred.
(iii) Depreciation
Depreciation is based on the cost of an asset, less its residual value. Significant
components of individual assets are assessed and if a component has a useful life that is
different from the remainder of that asset, that component is depreciated separately.
Depreciation is recognised as an expense in profit or loss on a straight-line basis over the
estimated useful lives of each component of an item of plant and equipment. Leased assets
are depreciated over the shorter of the lease term and their useful lives unless it is
reasonably certain that the Group will obtain ownership by the end of the lease term.
The estimated useful lives for the current and comparative periods are as follows:
Computer equipment 3 years
Office equipment 5 years
Furniture and fittings 5 years
Office renovation 5 years or based on lease term
Depreciation methods, useful lives and residual values are reviewed at the end of each
reporting period and adjusted if appropriate.
3.4 Intangible assets
Development costs
Development activities involve a plan or design for the production of new or substantially
improved products and processes. Development expenditure is capitalised only if
development costs can be measured reliably, the product or process is technically and
commercially feasible, future economic benefits are probable, and the Group intends to and
has sufficient resources to complete development and to use or sell the asset. The
expenditure capitalised includes the cost of materials, direct labour and costs that are
directly attributable to creating, producing and preparing the assets for its intended use.
Other development expenditure is recognised in profit or loss as incurred.
Capitalised development expenditure is measured at cost less accumulated amortisation
and impairment losses. Amortisation is recognised in profit or loss on a straight-line basis
over the estimated useful lives of 3 years. Development costs are amortised from the date
the development has been completed.
APPENDIX B – UNAUDITED INTERIM CONSOLIDATED FINANCIAL
STATEMENTS FOR THE NINE MONTHS ENDED 30 SEPTEMBER 2014
B-19
Computer software
Computer software that are acquired by the Group and not integral to the functionality of the
equipment, which have finite useful lives, are measured at cost less accumulated
amortisation and impairment losses. Computer software are amortised in profit or loss on a
straight-line basis over their estimated useful lives of 3 years, from the date on which they
are available for use.
Intellectual properties
Intellectual properties that are acquired by the Group, which have finite useful lives, are
measured at cost less accumulated amortisation and impairment losses. Intellectual
properties are amortised in profit or loss on a straight-line basis over their estimated useful
lives of 5 years, from the date on which they are available for use.
Customer lists
Customer lists that are acquired by the Group and have finite useful lives are measured at
cost less accumulated amortisation and accumulated impairment losses. Customer lists are
amortised in profit or loss on a straight-line basis over their estimated useful lives of 5 years,
from the date the acquisition has been completed.
The above amortisation methods, useful lives and residual values are reviewed at the end
of each reporting period and adjusted if appropriate.
3.5 Club membership
Club membership is stated at cost less impairment losses.
3.6 Financial instruments
(i) Non-derivative financial assets
The Group initially recognises loans and receivables and deposits on the date that they are
originated. All other financial assets are recognised initially on the trade date, which is the
date that the Group becomes a party to the contractual provisions of the instrument.
The Group derecognises a financial asset when the contractual rights to the cash flows from
the asset expire, or it transfers the rights to receive the contractual cash flows on the
financial asset in a transaction in which substantially all the risks and rewards of ownership
of the financial asset are transferred. Any interest in transferred financial assets that is
created or retained by the Group is recognised as a separate asset or liability.
Financial assets and liabilities are offset and the net amount presented in the statement of
financial position when, and only when, the Group has a legal right to offset the amounts
and intends either to settle on a net basis or to realise the asset and settle the liability
simultaneously.
The Group classifies non-derivative financial assets into the following category: loans and
receivables and available-for-sale financial assets.
APPENDIX B – UNAUDITED INTERIM CONSOLIDATED FINANCIAL
STATEMENTS FOR THE NINE MONTHS ENDED 30 SEPTEMBER 2014
B-20
Loans and receivables
Loans and receivables are financial assets with fixed or determinable payments that are not
quoted in an active market. Such assets are recognised initially at fair value plus any
directly attributable transaction costs. Subsequent to initial recognition, loans and
receivables are measured at amortised cost using the effective interest method, less any
impairment losses.
Loans and receivables comprise cash and cash equivalents and trade and other
receivables.
Cash and cash equivalents
Cash and cash equivalents comprise cash balances, bank deposits and money market
funds.
Available-for-sale financial assets
Available-for-sale financial assets are non-derivative financial assets that are designated as
available for sale or are not classified in any of the above categories of financial assets.
Available-for-sale financial assets are recognised initially at fair value plus any directly
attributable transaction costs. Subsequent to initial recognition, they are measured at fair
value and changes therein, other than impairment losses and foreign currency differences
on available-for-sale debt financial instruments, are recognised in other comprehensive
income and presented in the fair value reserve in equity. When an investment is
derecognised, the gain or loss accumulated in equity is reclassified to profit or loss.
Available-for-sale financial assets comprise quoted debt securities.
(ii) Non-derivative financial liabilities
All financial liabilities are recognised initially on the trade date, which is the date that the
Group becomes a party to the contractual provisions of the instrument.
The Group derecognises a financial liability when its contractual obligations are discharged,
cancelled or expire.
Financial assets and liabilities are offset and the net amount presented in the statement of
financial position when, and only when, the Group has a legal right to offset the amounts
and intends either to settle on a net basis or to realise the asset and settle the liability
simultaneously.
The Group classifies non-derivative financial liabilities into the other financial liabilities
category. Such financial liabilities are recognised initially at fair value plus any directly
attributable transaction costs. Subsequent to initial recognition, these financial liabilities are
measured at amortised cost using the effective interest method.
Other financial liabilities comprise trade and other payables.
APPENDIX B – UNAUDITED INTERIM CONSOLIDATED FINANCIAL
STATEMENTS FOR THE NINE MONTHS ENDED 30 SEPTEMBER 2014
B-21
(iii) Share capital
Ordinary shares
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue
of ordinary shares are recognised as a deduction from equity, net of any tax effects.
Distribution of non-cash assets to owners of the Company
The Group measures a liability to distribute non-cash assets as a dividend to the owners of
the Company at the fair value of the assets to be distributed. The carrying amount of the
dividend is remeasured at each reporting date and at the settlement date, with any changes
recognised directly in equity as adjustments to the amount of the distribution. On settlement
of the transaction, the Group recognises the difference, if any, between the carrying amount
of the assets distributed and the carrying amount of the liability in profit or loss.
(iv) Intra-group financial guarantees in the separate financial statements
Financial guarantees are financial instruments issued by the Company that requires the
issuer to make specified payments to reimburse the holder for the loss it incurs because a
specified debtor fails to meet payment when due in accordance with the original or modified
terms of a debt instrument.
Financial guarantees are recognised initially at fair value and are classified as financial
liabilities. Subsequent to initial measurement, the financial guarantees are stated at the
higher of the initial fair value less cumulative amortisation and the amount that would be
recognised if they were accounted for as contingent liabilities. When financial guarantees
are terminated before their original expiry date, the carrying amount of the financial
guarantees is transferred to profit or loss.
3.7 Impairment
(i) Non-derivative financial assets
A financial asset not carried at fair value through profit or loss is assessed at the end of each
reporting period to determine whether there is objective evidence that it is impaired. A
financial asset is impaired if objective evidence indicates that a loss event has occurred
after the initial recognition of the asset, and that the loss event has a negative effect on the
estimated future cash flows of that asset that can be estimated reliably.
Objective evidence that financial assets (including equity securities) are impaired can
include default or delinquency by a debtor, restructuring of an amount due to the Group on
terms that the Group would not consider otherwise, indications that a debtor or issuer will
enter bankruptcy, adverse changes in the payment status of borrowers or issuers in the
group, economic conditions that correlate with defaults or the disappearance of an active
market for a security. In addition, for an investment in an equity security, a significant or
prolonged decline in its fair value below its cost is objective evidence of impairment.
APPENDIX B – UNAUDITED INTERIM CONSOLIDATED FINANCIAL
STATEMENTS FOR THE NINE MONTHS ENDED 30 SEPTEMBER 2014
B-22
Loans and receivables
The Group considers evidence of impairment for loans and receivables at both a specific
asset and collective level. All individually significant loans and receivables are assessed for
specific impairment. All individually significant receivables found not to be specifically
impaired are then collectively assessed for any impairment that has been incurred but not
yet identified. Loans and receivables that are not individually significant are collectively
assessed for impairment by grouping together loans and receivables with similar risk
characteristics.
In assessing collective impairment, the Group uses historical trends of the probability of
default, the timing of recoveries and the amount of loss incurred, adjusted for
management’s judgement as to whether current economic and credit conditions are such
that the actual losses are likely to be greater or less than suggested by historical trends.
An impairment loss in respect of a financial asset measured at amortised cost is calculated
as the difference between its carrying amount and the present value of the estimated future
cash flows discounted at the asset’s original effective interest rate. Losses are recognised
in profit or loss and reflected in an allowance account against loans and receivables.
Interest on the impaired asset continues to be recognised. When the Group considers that
there are no realistic prospects of recovery of the asset, the relevant amounts are written
off. If the amount of impairment loss subsequently decreases and the decrease can be
related objectively to an event occurring after the impairment was recognised, then the
previously recognised impairment loss is reversed through profit or loss.
Available-for-sale financial assets
Impairment losses on available-for-sale financial assets are recognised by reclassifying the
losses accumulated in the fair value reserve in equity to profit or loss. The cumulative loss
that is reclassified from equity to profit or loss is the difference between the acquisition cost,
net of any principal repayment and amortisation, and the current fair value, less any
impairment loss recognised previously in profit or loss. Changes in cumulative impairment
provisions attributable to application of the effective interest method are reflected as a
component of interest income.
If, in a subsequent period, the fair value of an impaired available-for-sale debt security
increases and the increase can be related objectively to an event occurring after the
impairment loss was recognised, then the impairment loss is reversed. The amount of the
reversal is recognised in profit or loss. However, any subsequent recovery in the fair value
of an impaired available-for-sale equity security is recognised in other comprehensive
income.
Associate
An impairment loss in respect of an associate is measured by comparing the recoverable
amount of the investment with its carrying amount in accordance with Note 3.7(ii). An
impairment loss is recognised in profit or loss. An impairment loss is reversed if there has
been a favourable change in the estimates used to determine the recoverable amount.
APPENDIX B – UNAUDITED INTERIM CONSOLIDATED FINANCIAL
STATEMENTS FOR THE NINE MONTHS ENDED 30 SEPTEMBER 2014
B-23
(ii) Non-financial assets
The carrying amounts of the Group’s non-financial assets are reviewed at each reporting
date to determine whether there is any indication of impairment. If any such indication
exists, then the asset’s recoverable amount is estimated. For intangible assets that have
indefinite useful lives or that are not yet available for use, the recoverable amount is
estimated each year at the same time. An impairment loss is recognised if the carrying
amount of an asset or its related cash-generating unit (CGU) exceeds its estimated
recoverable amount.
The recoverable amount of an asset or CGU is the greater of its value in use and its fair
value less costs to sell. 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 or CGU. For the
purpose of impairment testing, assets that cannot be tested individually are grouped
together into the smallest group of assets that generates cash inflows from continuing use
that are largely independent of the cash inflows of other assets or CGU.
Impairment losses are recognised in profit or loss. Impairment losses recognised in respect
of CGUs are allocated first to reduce the carrying amount of any goodwill allocated to the
CGU (group of CGUs), and then to reduce the carrying amounts of the other assets in the
CGU (group of CGUs) on a pro rata basis.
Impairment losses recognised in prior periods are assessed at each reporting date for any
indications that the loss has decreased or no longer exists. An impairment loss is reversed
if there has been a change in the estimates used to determine the recoverable amount. 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.
3.8 Leases
Where the Group has the use of assets under operating leases, payments made under the
leases are recognised in profit or loss on a straight-line basis over the term of the lease.
Lease incentives received are recognised in profit or loss as an integral part of the total
lease expense, over the term of the lease.
Contingent lease payments are accounted for by revising the minimum lease payments over
the remaining term of the lease when the lease adjustment is confirmed.
3.9 Employee benefits
Defined contribution plans
A defined contribution plan is a post-employment benefit plan under which an entity pays
fixed contributions into a separate entity and will have no legal or constructive obligation to
pay further amounts. Obligations for contributions to defined contribution pension plans are
recognised as an employee benefit expense in profit or loss in the periods during which
services are rendered by employees.
APPENDIX B – UNAUDITED INTERIM CONSOLIDATED FINANCIAL
STATEMENTS FOR THE NINE MONTHS ENDED 30 SEPTEMBER 2014
B-24
Short-term employee benefits
Short-term employee benefit obligations are measured on an undiscounted basis and are
expensed as the related service is provided. These include salaries, annual bonuses and
paid annual leave.
A liability is recognised for the amount expected to be paid under short-term cash bonus or
profit-sharing plans if the Group has a present legal or constructive obligation to pay this
amount as a result of past service provided by the employee, and the obligation can be
estimated reliably.
Employee leave entitlements
Employee entitlements to annual leave are recognised when they accrue to employees. A
provision is made for the estimated liability for annual leave as a result of service rendered
by employees up to the reporting date.
Share-based payment transactions
The share option programme allows directors and executives to acquire shares of the
Company. The fair value of options granted is recognised as an employee expense, with a
corresponding increase in equity. The fair value is measured at grant date and spread over
the vesting period during which the employees become unconditionally entitled to the
options. At each reporting date, the Company revises its estimates of the number of options
that are expected to become exercisable. It recognises the impact of the revision of original
estimates in employee expense and in a corresponding adjustment to equity over the
remaining vesting period. The proceeds received net of any directly attributable
transactions costs are credited to share capital when the options are exercised.
3.10 Provisions
A provision is recognised if, as a result of a past event, the Group has a present legal or
constructive obligation that can be estimated reliably, and it is probable that an outflow of
economic benefits will be required to settle the obligation. Provisions are determined by
discounting the expected future cash flows at a pre-tax rate that reflects current market
assessments of the time value of money and the risks specific to the liability. The unwinding
of the discount is recognised as finance cost.
3.11 Revenue recognition
Revenue represents advertising fees, commission and fee income, service fees, income
from sale of magazines and software licences fees.
Advertising revenue, which is earned in the form of upfront and variable payments, is
deferred and recognised over the period to which the contract relates.
Commission and fee income and service fees are recognised on the completion of services
rendered.
Magazine sales and software licence revenue are recognised when the significant risks and
rewards of ownership have been transferred to the buyer.
APPENDIX B – UNAUDITED INTERIM CONSOLIDATED FINANCIAL
STATEMENTS FOR THE NINE MONTHS ENDED 30 SEPTEMBER 2014
B-25
3.12 Government grants
Government grants are recognised initially as deferred income at fair value when there is
reasonable assurance that they will be received and the Group will comply with the
conditions associated with the grant. Grants that compensate the Group for expenses
incurred are recognised in profit or loss as revenue on a systematic basis in the same
periods in which the expenses are recognised.
SME Cash Grant
Cash grants received from the government in relation to the SME Cash Grant are
recognised as income upon receipt.
3.13 Finance income and finance costs
Finance income comprises interest income from money market funds, bank deposits and
client’s bank account. Interest income is recognised as it accrues in profit or loss, using the
effective interest method. Finance costs comprise interest expense on borrowings which is
recognised in profit and loss using the effective interest method.
3.14 Tax
Tax expense comprises current and deferred tax. Current tax and deferred tax are
recognised in profit or loss except to the extent that it relates to a business combination, or
items recognised directly in equity or in other comprehensive income.
Current tax is the expected tax payable or receivable on the taxable income or loss for the
year, using tax rates enacted or substantively enacted at the reporting date, and any
adjustment to tax payable in respect of previous years.
Deferred tax is recognised in respect of temporary differences between the carrying
amounts of assets and liabilities for financial reporting purposes and the amounts used for
taxation purposes. Deferred tax is not recognised for:
• temporary differences on the initial recognition of assets or liabilities in a transaction
that is not a business combination and that affects neither accounting nor taxable profit
or loss; and
• temporary differences related to investments in subsidiaries to the extent that it is
probable that they will not reverse in the foreseeable future.
The measurement of deferred taxes reflects the tax consequences that would follow the
manner in which the Group expects, at the reporting date, to recover or settle the carrying
amount of its assets and liabilities. Deferred tax is measured at the tax rates that are
expected to be applied to temporary differences when they reverse, based on the laws that
have been enacted or substantively enacted by the reporting date.
APPENDIX B – UNAUDITED INTERIM CONSOLIDATED FINANCIAL
STATEMENTS FOR THE NINE MONTHS ENDED 30 SEPTEMBER 2014
B-26
Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset
current tax liabilities and assets, and they relate to income taxes levied by the same tax
authority on the same taxable entity, or on different tax entities, but they intend to settle
current tax liabilities and assets on a net basis or their tax assets and liabilities will be
realised simultaneously.
A deferred tax asset is recognised for unused tax losses, tax credits and deductible
temporary differences, to the extent that it is probable that future taxable profits will be
available against which they can be utilised. Deferred tax assets are reviewed at each
reporting date and are reduced to the extent that it is no longer probable that the related tax
benefit will be realised.
In determining the amount of current and deferred tax, the Group takes into account the
impact of uncertain tax positions and whether additional taxes and interest may be due. The
Group believes that its accruals for tax liabilities are adequate for all open tax years based
on its assessment of many factors including interpretations of tax law and prior experience.
This assessment relies on estimates and assumptions and may involve a series of
judgements about future events. New information may become available that causes the
Group to change its judgement regarding the adequacy of existing tax liabilities, such
changes to tax liabilities will impact tax expense in the period that such a determination is
made.
3.15 Discontinued operation
A discontinued operation is a component of the Group’s business, the operations and cash
flows of which can be clearly distinguished from the rest of the Group and which:
• represents a separate major line of business or geographical area of operations; or
• is part of a single co-ordinated plan to dispose of a separate major line of business or
geographical area of operations;
Classification as a discontinued operation occurs upon disposal or when the operation
meets the criteria to be classified as held for sale, if earlier. When an operation is classified
as a discontinued operation, the comparative statement of profit or loss is re-presented as
if the operation had been discontinued from the start of the comparative year.
3.16 Earnings per share
The Group presents basic and diluted earnings per share data for its ordinary shares. Basic
earnings per share is calculated by dividing the profit or loss attributable to ordinary
shareholders of the Company by the weighted-average number of ordinary shares
outstanding during the year, adjusted for own shares held. Diluted earnings per share is
determined by adjusting the profit or loss attributable to ordinary shareholders and the
weighted-average number of ordinary shares outstanding, adjusted for own shares held, for
the effect of all dilutive potential ordinary shares, which comprise share options granted to
employees.
APPENDIX B – UNAUDITED INTERIM CONSOLIDATED FINANCIAL
STATEMENTS FOR THE NINE MONTHS ENDED 30 SEPTEMBER 2014
B-27
3.17 Segment reporting
An operating segment is a component of the Group that engages in business activities from
which it may earn revenues and incur expenses, including revenues and expenses that
relate to transactions with any of the Group’s other components. All operating segments’
operating results are reviewed regularly by the Group’s CEO (the chief operating decision
maker) to make decisions about resources to be allocated to the segment and to assess its
performance, and for which discrete financial information is available.
Segment results that are reported to the Group’s CEO include items directly attributable to
a segment as well as those that can be allocated on a reasonable basis. Unallocated items
comprise mainly corporate assets (primarily the Company’s headquarters), head office
expenses, and tax assets and liabilities.
Segment capital expenditure are total costs incurred during the period to acquire plant and
equipment and intangible assets.
3.18 New standards and interpretations not yet adopted
A number of new standards, amendments to standards and interpretations are effective for
annual periods beginning after 1 January 2014, and have not been applied in preparing
these financial statements. None of these are expected to have a significant effect on the
financial statements of the Group.
APPENDIX B – UNAUDITED INTERIM CONSOLIDATED FINANCIAL
STATEMENTS FOR THE NINE MONTHS ENDED 30 SEPTEMBER 2014
B-28
4 Plant and equipment
Computer
equipment
Office
equipment
Furniture
and
fittings
Office
renovation Total
$ $ $ $ $
Cost
At 1 January 2013 2,707,580 471,330 466,626 2,402,286 6,047,822
Additions 815,069 25,062 1,466 3,096 844,693
Disposals/written-off (110,547) (1,188) – – (111,735)
Attributable to discontinued
operation (201,668) (32,841) (28,482) (121,163) (384,154)
Translation differences on
consolidation (42,447) (6,763) (8,433) (18,354) (75,997)
At 31 December 2013 3,167,987 455,600 431,177 2,265,865 6,320,629
Additions 630,751 5,158 7,103 27,179 670,191
Disposals/written-off (177,700) (375) – – (178,075)
Translation differences on
consolidation 10,042 2,866 2,575 7,364 22,847
At 30 September 2014 3,631,080 463,249 440,855 2,300,408 6,835,592
Accumulated depreciation
At 1 January 2013 2,479,402 419,802 378,234 1,200,119 4,477,557
Depreciation for the year 277,481 37,538 46,418 382,245 743,682
Disposals/written-off (110,214) (949) – – (111,163)
Attributable to discontinued
operation (185,379) (26,913) (23,827) (110,900) (347,019)
Translation differences on
consolidation (40,736) (6,192) (8,319) (21,029) (76,276)
At 31 December 2013 2,420,554 423,286 392,506 1,450,435 4,686,781
Depreciation for the period 317,584 8,014 16,245 237,982 579,825
Disposals/written-off (177,700) (375) – – (178,075)
Translation differences on
consolidation 8,356 2,796 2,396 6,915 20,463
At 30 September 2014 2,568,794 433,721 411,147 1,695,332 5,108,994
Carrying amounts
At 1 January 2013 228,178 51,528 88,392 1,202,167 1,570,265
At 31 December 2013 747,433 32,314 38,671 815,430 1,633,848
At 30 September 2014 1,062,286 29,528 29,708 605,076 1,726,598
APPENDIX B – UNAUDITED INTERIM CONSOLIDATED FINANCIAL
STATEMENTS FOR THE NINE MONTHS ENDED 30 SEPTEMBER 2014
B-29
5 Intangible assets
Development
costs
Computer
software
Intellectual
properties
Customer
lists Total
$ $ $ $ $
Cost
At 1 January 2013 19,175 1,735,167 979,105 – 2,733,447
Additions – 13,899 – 706,800 720,699
Attributable to discontinued
operation – (90,355) (524,552) – (614,907)
Translation differences on
consolidation – (40,755) (85,301) – (126,056)
At 31 December 2013 19,175 1,617,956 369,252 706,800 2,713,183
Additions 212,355 606,675 – – 819,030
Translation differences on
consolidation – 8,959 6,125 – 15,084
At 30 September 2014 231,530 2,233,590 375,377 706,800 3,547,297
Accumulated
amortisation
At 1 January 2013 19,175 1,614,802 803,447 – 2,437,424
Amortisation for the year – 66,748 86,440 106,020 259,208
Attributable to discontinued
operation – (87,366) (445,870) – (533,236)
Translation differences on
consolidation – (39,286) (74,765) – (114,051)
At 31 December 2013 19,175 1,554,898 369,252 106,020 2,049,345
Amortisation for the period – 37,900 – 106,020 143,920
Translation differences on
consolidation – 8,538 6,125 – 14,663
At 30 September 2014 19,175 1,601,336 375,377 212,040 2,207,928
Carrying amounts
At 1 January 2013 – 120,365 175,658 – 296,023
At 31 December 2013 – 63,058 – 600,780 663,838
At 30 September 2014 212,355 632,254 – 494,760 1,339,369
In 2013, customer lists were acquired by the Group from a third party with a cash
consideration of $706,800 payable in twelve quarterly instalments. The amounts of
$294,500 have been paid to the third party as at 30 September 2014 (2013: $117,800).
APPENDIX B – UNAUDITED INTERIM CONSOLIDATED FINANCIAL
STATEMENTS FOR THE NINE MONTHS ENDED 30 SEPTEMBER 2014
B-30
6 Subsidiaries
Details of subsidiaries are as follows:
Effective equity held
by the Group
Name of subsidiaries
Country of
incorporation
30 September
2014
31 December
2013
% %
iFAST Financial Pte. Ltd.
1
and its
subsidiary: Singapore 100 100
iFAST Nominees Pte. Ltd.
1
Singapore 100 100
FA Corporate & Compliance
Consultancy Pte. Ltd.
1
Singapore 100 100
iFAST Capital Ltd.
1
Singapore 100 100
iFAST Financial (HK) Limited
2
and
its subsidiary: Hong Kong 100 100
iFAST Nominees (HK) Limited
2
Hong Kong 100 100
iFAST Platform Services
(Shenzhen) Qianhai Limited
4
China 100 –
iFAST Platform Services (HK)
Limited
2
Hong Kong 100 100
iFAST Service Centre Sdn. Bhd.
3
Malaysia 100 100
iFAST Malaysia Sdn. Bhd. (formerly
known as iFAST-OSK Sdn. Bhd.)
3
and its subsidiaries: Malaysia 100 65
FA Corporate and Compliance
Consultancy Sdn. Bhd.
3
Malaysia 100 65
iFAST Capital Sdn. Bhd.
3
and its
subsidiary: Malaysia 100 65
iFAST Nominees Sdn. Bhd.
3
Malaysia 100 65
1
KPMG LLP Singapore is the auditor
2
BDO Limited Hong Kong is the auditor
3
BDO Limited Malaysia is the auditor
4
ShineWing CPA, Shenzhen branch is the auditor
On 7 July 2014, iFAST Financial (HK) Limited, a subsidiary of the Company, incorporated
a wholly-owned subsidiary, iFAST Platform Services (Shenzhen) Qianhai Limited, in China.
With effect from 12 August 2014, iFAST-OSK Sdn. Bhd. changed its name to iFAST
Malaysia Sdn. Bhd..
APPENDIX B – UNAUDITED INTERIM CONSOLIDATED FINANCIAL
STATEMENTS FOR THE NINE MONTHS ENDED 30 SEPTEMBER 2014
B-31
Impairment testing
Some of the subsidiaries are in the initial growth phase and cash flow projections with a set
of assumptions that require significant judgements are prepared to determine if there is any
indication of impairment of the Company’s investments in subsidiaries. In making these
judgements, the Company evaluates, amongst other factors, the market and economic
environments in which the subsidiaries operate, economic performances of the subsidiaries
and the extent of which the carrying amounts of its investment in subsidiaries exceed their
tangible net asset values.
Based on the Company’s assessment, the recoverable amounts of its investments in
subsidiaries are higher than the carrying amounts of its investments in subsidiaries so no
allowances for impairment losses are required.
Effect on acquisition of additional interests in subsidiaries
On 18 July 2014, the Company completed the acquisition of the remaining interest in a
subsidiary of the Group, iFAST Malaysia Sdn. Bhd. for a cash consideration of RM9,070,000
(approximately $3,539,098). For the period ended 30 September 2014, the Group
recognised an amount of $2,913,399 on acquisition of additional interests in subsidiaries in
reserve.
7 Associate
Details of associate are as follows:
Effective equity held
by the Group
Name of associate
Country of
incorporation
30 September
2014
31 December
2013
% %
Providend Holding Private Limited Singapore 19.9 –
On 20 June 2014, the Company entered into an agreement with Providend Holding Private
Limited (“Providend”) to acquire a 19.9% stake holding in Providend with cash consideration
of $400,157. The agreement also gives the Company a call option to purchase a further
10.1% stake holding in Providend with cash consideration of $319,244 within two years from
the completion of the acquisition. The acquisition was completed on 25 July 2014. Although
the Group has less than 20% of the voting rights in Providend, the Group has determined
that it has significant influence given its potential voting rights in Providend.
APPENDIX B – UNAUDITED INTERIM CONSOLIDATED FINANCIAL
STATEMENTS FOR THE NINE MONTHS ENDED 30 SEPTEMBER 2014
B-32
Information about the Group’s investment in associate that is immaterial to the Group are
as follows:
30 September
2014
31 December
2013
$ $
Group’s interest in associate at beginning of period – –
Acquisition of interests in associate 400,157 –
Group’s share of profit after tax of associate 382 –
Carrying amount of Group’s interests in associate
(equity accounted) 400,539 –
8 Club membership
30 September
2014
31 December
2013
$ $
Club membership, at cost 11,429 11,429
9 Trade and other receivables
30 September
2014
31 December
2013
$ $
Trade receivables 6,975,314 7,092,762
Impairment losses (2,818) (14,260)
Net receivables 6,972,496 7,078,502
Accrued revenue 8,435,550 7,907,105
Deposits and other receivables 2,532,384 1,778,304
Loans and receivables 17,940,430 16,763,911
Trade receivables and accrued revenue consist mainly of commission and fee income that
shall only be due and payable to third party financial advisers upon the Group’s receipt of
the corresponding amounts from customers.
The Group’s exposures to credit and impairment losses related to trade receivables are
disclosed in Note 24.
APPENDIX B – UNAUDITED INTERIM CONSOLIDATED FINANCIAL
STATEMENTS FOR THE NINE MONTHS ENDED 30 SEPTEMBER 2014
B-33
10 Other investments
30 September
2014
31 December
2013
$ $
Non-current
Available-for-sale quoted debt securities 1,802,402 2,011,502
The quoted debt securities classified as available-for-sale of the Group represent
investments in marketable bond funds.
The quoted debt securities are denominated in Singapore dollar.
The maximum exposures to credit risk of the quoted debt securities at the reporting date are
the carrying amounts.
The Group’s exposure to price risk and fair value information related to other investments
are disclosed in Note 24.
11 Cash and cash equivalents
30 September
2014
31 December
2013
$ $
Cash at bank and in hand 15,148,947 16,292,523
Money market funds 36,267 426,386
Cash and cash equivalents 15,185,214 16,718,909
The money market funds are included as cash and cash equivalents as they are considered
fully liquid investments readily convertible into known amount of cash and cash equivalents
which are subject to an insignificant risk of changes in value.
The weighted average effective interest rate per annum relating to cash and cash
equivalents and client bank accounts as at 30 September 2014 for the Group was 0.09%
(2013: 0.08%). Interest rates reprice on a daily basis.
APPENDIX B – UNAUDITED INTERIM CONSOLIDATED FINANCIAL
STATEMENTS FOR THE NINE MONTHS ENDED 30 SEPTEMBER 2014
B-34
For the purpose of the consolidated statement of cash flows, cash and cash equivalents
comprise the following:
30 September
2014
30 September
2013
$ $
Cash at bank and in hand 15,148,947 16,486,791
Money market funds 36,267 769,302
Cash and cash equivalents in the consolidated
statement of cash flows 15,185,214 17,256,093
12 Held under trust
Some of the subsidiaries in the Group receive and hold monies deposited by clients and
other institutions in the course of the conduct of the regulated activities. These clients’
monies are maintained in one or more trust bank accounts which are separately maintained
from the bank accounts of the Group.
13 Share capital and reserves
Share capital
Note
30 September
2014
31 December
2013
No. of shares No. of shares
Fully paid ordinary shares,
with no par value:
Ordinary shares:
At 1 January 33,796,069 33,573,654
Exercise of share options
(Share Option Scheme) 21 274,820 222,415
At reporting date 34,070,889 33,796,069
274,820 ordinary shares were issued as a result of the exercise of vested options arising
from the share option programmes granted to full-time executives (2013: 222,415 shares).
Options were exercised at an average price of $2.58 (2013: $1.65) per option. All issued
shares are fully paid.
The holders of ordinary shares are entitled to receive dividends as declared from time to
time and are entitled to one vote per share at meetings of the Company. All ordinary shares
rank equally with regard to the Company’s residual assets.
APPENDIX B – UNAUDITED INTERIM CONSOLIDATED FINANCIAL
STATEMENTS FOR THE NINE MONTHS ENDED 30 SEPTEMBER 2014
B-35
At the reporting date, there were 2,204,166 (2013: 1,555,685) shares reserved for issue
under options.
Reserves
30 September
2014
31 December
2013
$ $
Fair value reserve 12,128 34,602
Foreign currency translation reserve (812,740) (748,886)
Share option reserve 807,187 559,171
Equity reserve (4,160,640) (1,368,829)
Accumulated profits 11,516,262 14,819,689
7,362,197 13,295,747
Fair value reserve
The fair value reserve comprises the cumulative net change in the fair value of available-
for-sale financial assets until the investments are derecognised or impaired.
Foreign currency translation reserve
The foreign currency translation reserve comprises foreign exchange differences arising
from the translation of the financial statements of foreign operations whose functional
currencies are different from the functional currency of the Group.
Share option reserve
The share option reserve comprises the cumulative value of employee services received for
the issue of share options.
Equity reserve
The equity reserve represents:
(i) effects of changes in ownership interests in subsidiaries when there are no changes
in control; and
(ii) premium received from non-controlling interests on issue of shares by a subsidiary
without change in ownership interests.
APPENDIX B – UNAUDITED INTERIM CONSOLIDATED FINANCIAL
STATEMENTS FOR THE NINE MONTHS ENDED 30 SEPTEMBER 2014
B-36
14 Deferred tax
Unrecognised deferred tax assets and liabilities
At 30 September 2014, a deferred tax asset in respect of tax losses and deductible
temporary differences amounting to $45,658,388 (2013: $49,665,868) were not recognised
because it is not probable that future taxable profits will be available against which the
Group can utilise the benefits.
The tax losses are subject to agreement by the tax authorities and compliance with tax
regulations in the respective countries in which certain subsidiaries operate. The deductible
temporary differences do not expire under current tax legislation.
Recognised deferred tax assets and liabilities
Deferred tax liabilities and assets are offset when there is a legally enforceable right to set
off current tax assets against current tax liabilities and when the deferred taxes relate to the
same taxation authority. The following amount, determined after appropriate offsetting is
included in the statement of financial position as follows:
30 September
2014
31 December
2013
$ $
Deferred tax assets 21,618 34,559
Deferred tax liabilities 125,385 76,746
Deferred tax assets and liabilities are attributable to the following:
Assets Liabilities
30 September
2014
31 December
2013
30 September
2014
31 December
2013
$ $ $ $
Plant and equipment – (6,402) 183,143 189,709
Trade receivables (479) (2,425) – –
Trade and other
payables (15,564) (22,449) – –
Employee benefits (63,333) (116,246) – –
Deferred tax
(assets)/liabilities (79,376) (147,522) 183,143 189,709
Set off of tax 57,758 112,963 (57,758) (112,963)
Net deferred tax
(assets)/liabilities (21,618) (34,559) 125,385 76,746
APPENDIX B – UNAUDITED INTERIM CONSOLIDATED FINANCIAL
STATEMENTS FOR THE NINE MONTHS ENDED 30 SEPTEMBER 2014
B-37
Movements in deferred tax assets and liabilities of the Group (prior to offsetting of balances)
during the year/period were as follows:
At
1 January
2013
Recognised
in profit
or loss
At
31 December
2013
Recognised
in profit
or loss
(Note 19)
At
30 September
2014
$ $ $ $ $
Deferred tax assets
Plant and equipment (8,175) 1,773 (6,402) 6,402 –
Employee benefits (41,454) (74,792) (116,246) 52,913 (63,333)
Trade receivables (1,088) (1,337) (2,425) 1,946 (479)
Trade and other
payables (14,914) (7,535) (22,449) 6,885 (15,564)
(65,631) (81,891) (147,522) 68,146 (79,376)
Deferred tax
liabilities
Plant and equipment 89,800 99,909 189,709 (6,566) 183,143
24,169 18,018 42,187 61,580 103,767
15 Trade and other payables
30 September
2014
31 December
2013
$ $
Current
Trade payables 2,068,995 1,068,351
Accrued operating expenses 10,348,638 11,390,914
Dividends payable 6,814,178 –
Deposits received 304,562 376,092
19,536,373 12,835,357
Non-current
Accrued operating expenses 176,700 353,400
Trade payables and accrued operating expenses consist mainly of commission and fee
income that shall only be due and payable to third party financial advisers upon the Group’s
receipt of the corresponding amounts from customers.
APPENDIX B – UNAUDITED INTERIM CONSOLIDATED FINANCIAL
STATEMENTS FOR THE NINE MONTHS ENDED 30 SEPTEMBER 2014
B-38
Included in the Group’s accrued operating expenses are amounts payable to a third party
as indicated in Note 5 amounting to $412,300 (2013: $589,000), where $235,600 (2013:
$235,600) and $176,700 (2013: $353,400) are the current and non-current portion
respectively.
The Group’s exposure to liquidity risk related to trade and other payables is disclosed in
Note 24.
16 Revenue
Continuing operations
Discontinued operation
(see note 20) Total
1 January
2014 to
30 September
2014
1 January
2013 to
30 September
2013
1 January
2014 to
30 September
2014
1 January
2013 to
30 September
2013
1 January
2014 to
30 September
2014
1 January
2013 to
30 September
2013
$ $ $ $ $ $
Commission
and fee income 56,638,292 50,903,434 – 588,770 56,638,292 51,492,204
Service fees 1,451,130 1,312,151 – – 1,451,130 1,312,151
Advertising
fees 266,596 372,041 – – 266,596 372,041
Others 238,943 98,541 – – 238,943 98,541
58,594,961 52,686,167 – 588,770 58,594,961 53,274,937
17 Other operating income
1 January
2014 to
30 September
2014
1 January
2013 to
30 September
2013
$ $
Investment income 119,944 16,256
Government grant 68,193 8,000
Others 20,726 48,410
208,863 72,666
APPENDIX B – UNAUDITED INTERIM CONSOLIDATED FINANCIAL
STATEMENTS FOR THE NINE MONTHS ENDED 30 SEPTEMBER 2014
B-39
18 Profit for the period
The following items have been included in arriving at profit for the period:
1 January
2014 to
30 September
2014
1 January
2013 to
30 September
2013
$ $
Interest income
– from cash at bank (40,353) (2,733)
– from trust accounts (20,202) (8,645)
– from money market funds (6,746) (19,297)
– from loans and receivables (6,679) –
Impairment losses on trade receivables, net 2,818 5,448
Unrealised exchange loss, net 35,409 10,669
Value of employee services received for issue of
share options, included in staff costs 248,016 13,111
Contributions to defined contribution plans, included
in staff costs 819,424 798,961
Operating lease expense 3,024,351 3,185,730
Net change in fair value of available-for-sale financial
assets reclassified from equity (99,464) (656,056)
19 Tax expense
1 January
2014 to
30 September
2014
1 January
2013 to
30 September
2013
$ $
Current tax expense
Current period 318,986 585,681
Adjustment for prior periods – (12,423)
318,986 573,258
Deferred tax expense
Origination and reversal of temporary differences 61,654 (37,651)
Adjustment for prior periods (74) 14,537
61,580 (23,114)
Tax expense from continuing operations 380,566 550,144
There was no tax expense from the discontinued operation (see Note 20).
APPENDIX B – UNAUDITED INTERIM CONSOLIDATED FINANCIAL
STATEMENTS FOR THE NINE MONTHS ENDED 30 SEPTEMBER 2014
B-40
Reconciliation of effective tax rate
1 January
2014 to
30 September
2014
1 January
2013 to
30 September
2013
$ $
Profit for the period from continuing operations 7,577,203 5,400,607
Tax expense from continuing operations 380,566 550,144
Profit before tax from continuing operations 7,957,769 5,950,751
Tax using Singapore tax rate at 17% 1,352,821 1,011,628
Effect of tax rates in foreign jurisdictions (21,686) (40,123)
Effect of result of equity-accounted investee
presented net of tax (65) –
Income not subject to tax (28,081) (30,638)
Tax incentives (546,520) (268,734)
Non-deductible expenses 149,897 74,035
Current period tax losses and temporary differences
for which no deferred tax asset was recognised 25,729 135,040
Recognition of tax effect of previously unrecognised
tax losses and temporary differences (551,650) (334,252)
(Over)/Under provided in prior years (74) 2,114
Others 195 1,074
380,566 550,144
20 Discontinued operation
In 2013, the Company disposed iFAST India Investment Pte. Ltd. and its subsidiary
following a strategic decision to place greater focus on the Group’s core operation
segments, being the operations in Singapore, Hong Kong and Malaysia.
APPENDIX B – UNAUDITED INTERIM CONSOLIDATED FINANCIAL
STATEMENTS FOR THE NINE MONTHS ENDED 30 SEPTEMBER 2014
B-41
For the period ended 30 September 2013, of the loss from discontinued operation of
$635,022, an amount of $196,293 was attributable to the owners of the Company, and of the
profit from continuing operations of $5,400,607, an amount of $5,594,547 was attributable
to the owners of the Company.
1 January
2013 to
30 September
2013
$
Results of discontinued operation
Revenue 588,770
Other operating income 656,111
Expenses (1,879,903)
Loss for the period (635,022)
Cash flows from discontinued operation
Net cash used in operating activities (1,375,554)
Net cash from investing activities 1,548,129
Net cash used in financing activities (128,152)
Net cash flows for the period 44,423
21 Share options
Share Option Scheme
Share option scheme 2003
(i) The Share Option Scheme (the 2003 Scheme) of the Company was approved and
adopted by its members at an Extraordinary General Meeting held on 28 March 2003.
(ii) The 2003 Scheme is administered by a Committee appointed by the Board of
Directors. The Committee comprises 3 directors, Yao Chih Matthias, Ling Peng Meng
and Low Huan Ping as at 30 September 2014.
APPENDIX B – UNAUDITED INTERIM CONSOLIDATED FINANCIAL
STATEMENTS FOR THE NINE MONTHS ENDED 30 SEPTEMBER 2014
B-42
(iii) Other information regarding the 2003 Scheme are set out below:
• those eligible to participate in the 2003 Scheme comprise confirmed full-time
executives, including directors, who have been employed by the Company and/or
its subsidiaries for a continuous period of at least six months and any non-
executive directors and consultants of the Company and/or its subsidiaries who,
in the absolute discretion of the Committee, are selected to participate in the
2003 Scheme.
• subject to adjustments arising from certain variation in the issued share capital of
the Company:
• the total number of shares in respect of which options may be offered on any
offering date, when added to the number of shares issuable in respect of
outstanding options already granted under the 2003 Scheme, shall not
exceed 3,785,611 (2013: 3,785,611) as at 30 September 2014; and
• the offer price in respect of which an option is exercisable shall be at least
85% of the fair value of the shares as at the time of offer of the options to
be determined by the Committee.
• subject to the provisions in the rules of the 2003 Scheme, the option granted
expires on (i) (in the case of executives) the day preceding the tenth anniversary
of the date of the grant of the option or (ii) (in the case of non – executive directors
and consultants) the day preceding the fifth anniversary of the date of the grant
of the option.
• the options granted by the Company do not entitle the holders of the options, by
virtue of such holding, to any rights to participate in any share issue of any other
company.
(iv) The 2003 Scheme was terminated on 23 May 2013 by a resolution passed by its
members at an Annual General Meeting. This will not affect all options remaining
unexercised.
Share option scheme 2013
(i) The 2013 Share Option Scheme (the 2013 Scheme) of the Company was approved
and adopted by its members at an Annual General Meeting held on 23 May 2013.
(ii) The 2013 Scheme is administered by a Committee appointed by the Board of
Directors. The Committee comprises 3 directors, Yao Chih Matthias, Ling Peng Meng
and Low Huan Ping as at 30 September 2014.
APPENDIX B – UNAUDITED INTERIM CONSOLIDATED FINANCIAL
STATEMENTS FOR THE NINE MONTHS ENDED 30 SEPTEMBER 2014
B-43
(iii) Other information regarding the 2013 Scheme is set out below:
• those eligible to participate in the 2013 Scheme comprise confirmed full-time
executives, including directors, who have been employed by the Company and/or
its subsidiaries for a continuous period of at least three months and any
non-executive directors and consultants of the Company and/or its subsidiaries
who, in the absolute discretion of the Committee, are selected to participate in the
Scheme.
• the 2013 Scheme will continue in operation at the discretion of the Committee,
subject to a maximum period of 10 years commencing on 23 May 2013, provided
that the 2013 Scheme may continue beyond the above stipulated period with the
approval of the Company’s shareholders by ordinary resolution in general
meeting.
• subject to adjustments arising from certain variation in the issued share capital of
the Company:
• the total number of shares in respect of which options may be offered on any
offering date, when added to the number of shares issuable in respect of
outstanding options already granted under the 2013 Scheme, shall not
exceed 4,781,725 (2013: 4,781,725) as at 30 September 2014; and
• the offer price in respect of which an option is exercisable shall be
determined by the Committee at its absolute discretion, fixed by the
Committee and approved by the Shareholders of the Company in general
meeting at a price which is set at a discount, provided that the maximum
discount shall not exceed 20% of the last dealt prices for the share. In
determining the quantum of such discount, the Committee shall take into
consideration the following criteria:
i. the performance of the Company
ii. the individual performance of the participant of the 2013 Scheme
iii. the contribution of the participant of the 2013 Scheme to the success
and development of the Company.
APPENDIX B – UNAUDITED INTERIM CONSOLIDATED FINANCIAL
STATEMENTS FOR THE NINE MONTHS ENDED 30 SEPTEMBER 2014
B-44
At the end of the financial year/period, details of the options granted under both the 2003
and the 2013 Scheme in respect of unissued ordinary shares of the Company are as
follows:
Date of
grant of
options
Exercise
price per
share
Options
outstanding
at
1 January
2013
Options
granted
Options
exercised
Options
forfeited/
expired
Options
outstanding
at
31 December
2013
Number
of option
holders at
31 December
2013
Date of
expiration
1/1/2006 $0.49 7,500 – 5,400 – 2,100 1 31/12/2015
1/7/2006 $0.70 93,500 – 38,305 – 55,195 4 30/6/2016
1/1/2007 $1.20 54,000 – 20,000 – 34,000 6 31/12/2016
1/4/2007 $1.96 38,000 – 15,200 – 22,800 3 31/3/2017
1/7/2009 $1.60 147,185 – 57,610 – 89,575 17 30/6/2019
1/7/2010 $2.40 252,800 – 45,900 27,000 179,900 36 30/6/2020
1/7/2013 $2.01 – 40,000 40,000 – – – –
1/7/2013 $2.50 – 1,198,865 – 26,750 1,172,115 113 30/6/2023
592,985 1,238,865 222,415 53,750 1,555,685
Date of
grant of
options
Exercise
price per
share
Options
outstanding
at
1 January
2014
Options
granted
Options
exercised
Options
forfeited/
expired
Options
outstanding
at
30 September
2014
Number
of option
holders at
30 September
2014
Date of
expiration
1/1/2006 $0.49 2,100 – 2,100 – – – –
1/7/2006 $0.70 55,195 – 28,695 – 26,500 2 30/6/2016
1/1/2007 $1.20 34,000 – 5,000 – 29,000 3 31/12/2016
1/4/2007 $1.96 22,800 – 15,800 – 7,000 2 31/3/2017
1/7/2009 $1.60 89,575 – 40,725 – 48,850 9 30/6/2019
1/7/2010 $2.40 179,900 – 62,500 – 117,400 22 30/6/2020
1/7/2013 $2.50 1,172,115 – – 48,513 1,123,602 107 30/6/2023
1/4/2014 $2.80 – 20,000 20,000 – – – –
1/4/2014 $3.60 – 801,114 – 19,300 781,814 142 31/3/2024
21/8/2014 $3.80 – 170,000 100,000 – 70,000 2 20/8/2024
1,555,685 991,114 274,820 67,813 2,204,166
APPENDIX B – UNAUDITED INTERIM CONSOLIDATED FINANCIAL
STATEMENTS FOR THE NINE MONTHS ENDED 30 SEPTEMBER 2014
B-45
Movements in the number of share options and their related weighted average exercise
prices are as follows:
Share option
scheme 2013
Share option
scheme 2003
Weighted average
exercise price
No. of
options
Weighted average
exercise price
No. of
options
2013 2013 2013 2013
At 1 January 2013 – – 1.77 592,985
Granted 2.48 1,238,865 – –
Exercised 2.01 (40,000) 1.57 (182,415)
Forfeited/Expired 2.50 (26,750) 2.40 (27,000)
At 31 December 2013 2.50 1,172,115 1.83 383,570
Number of options
exercisable at
31 December 2013 – – 1.83 383,570
Share option
scheme 2013
Share option
scheme 2003
Weighted average
exercise price
No. of
options
Weighted average
exercise price
No. of
options
2014 2014 2014 2014
At 1 January 2014 2.50 1,172,115 1.83 383,570
Granted 3.62 991,114 – –
Exercised 3.63 (120,000) 1.76 (154,820)
Forfeited/Expired 2.81 (67,813) – –
At 30 September 2014 2.98 1,975,416 1.87 228,750
Number of options
exercisable at
30 September 2014 – – 1.87 228,750
Options were exercised on a regular basis throughout the year. The weighted average share
price during the period was $3.67 (2013: $3.32) per share.
APPENDIX B – UNAUDITED INTERIM CONSOLIDATED FINANCIAL
STATEMENTS FOR THE NINE MONTHS ENDED 30 SEPTEMBER 2014
B-46
Measurement of fair values
The fair value of services received in return for share options granted are measured by
reference to the fair value of share options granted. The estimate of the fair value of the
services received is measured based on the Binomial Model. The share prices applied to
the model are based on last-transacted prices of the Company’s ordinary shares. The
expected life used in the model has been adjusted based on management’s best estimate,
for the effects of non-transferability, exercise restrictions and behavioural considerations.
Fair value of share options and assumptions
Date of grant of
options
21 August
2014
1 April
2014
1 July
2013
1 July
2010
1 July
2009
1 April
2007
1 January
2007
1 July
2006
1 January
2006
Fair value at
measurement date 0.85 0.80 0.49 0.21 0.48 0.56 0.32 0.24 0.24
Share price $3.80 $3.60 $2.50 $2.40 $1.60 $1.96 $1.20 $0.70 $0.58
Exercise price $3.80 $3.60 $2.50 $2.40 $1.60 $1.96 $1.20 $0.70 $0.49
Expected volatility 31.3% 25.8% 21.4% 7.4% 38.9% 22.0% 20.8% 13.2% 12.0%
Expected option life
(days) 1,095 1,460 1,460 1,460 1,460 2,190 2,190 3,650 3,650
Expected dividends $0.12 $0.12 $0.03 $0.10 $0.10 $0.04 $0.04 – –
Risk-free interest rate 2.75% 2.75% 2.25% 2.50% 3.13% 3.75% 3.75% 3.50% 3.50%
The expected volatility is based on the one year historic volatility of the Company’s share
price, adjusted for any expected changes to future volatility.
There are no market conditions associated with the share option grants. Service conditions
and non-market performance conditions are not taken into account in the measurement of
the fair value of the services to be received at the grant date.
22 Earnings per share
Basic earnings per share
1 January 2014 to
30 September 2014
1 January 2013 to
30 September 2013
Continuing
operations
Discontinued
operation Total
Continuing
operations
Discontinued
operation Total
$ $ $ $ $ $
Basic earnings per
share is based on:
Net profit/(loss)
attributable to
ordinary
shareholders 7,614,892 – 7,614,892 5,594,547 (196,293) 5,398,254
APPENDIX B – UNAUDITED INTERIM CONSOLIDATED FINANCIAL
STATEMENTS FOR THE NINE MONTHS ENDED 30 SEPTEMBER 2014
B-47
30 September
2014
30 September
2013
No. of shares* No. of shares*
Issued ordinary shares at beginning of the period 202,776,414 201,441,924
Effect of share options exercised (Share Option
Scheme) 522,426 392,376
Weighted average number of ordinary shares at
the end of the period 203,298,840 201,834,300
* adjusted for sub-division of every 1 ordinary share into 6 ordinary shares as completed by the Company on 20
November 2014.
Diluted earnings per share
For the purpose of calculating the diluted earnings per ordinary share, the weighted average
number of ordinary shares in issue is adjusted to take into account the dilutive effect arising
from the dilutive share options under the Share Option Scheme, with the potential ordinary
shares weighted for the period outstanding.
1 January 2014 to
30 September 2014
1 January 2013 to
30 September 2013
Continuing
operations
Discontinued
operation Total
Continuing
operations
Discontinued
operation Total
$ $ $ $ $ $
Diluted earnings per
share is based on:
Net profit/(loss)
attributable to ordinary
shareholders 7,614,892 – 7,614,892 5,594,547 (196,293) 5,398,254
The effect of the exercise of share options on the weighted average number of ordinary
shares in issue is as follows:
30 September
2014
30 September
2013
No. of shares* No. of shares*
Weighted average number of:
Ordinary shares used in the calculation of basic
earnings per share 203,298,840 201,834,300
Potential ordinary shares issuable under:
– share options (Share Option Scheme) 5,145,234 3,604,158
Weighted average number of ordinary issued and
potential shares issuable assuming full conversion
at the end of the period 208,444,074 205,438,458
* adjusted for sub-division of every 1 ordinary share into 6 ordinary shares as completed by the Company on 20
November 2014.
APPENDIX B – UNAUDITED INTERIM CONSOLIDATED FINANCIAL
STATEMENTS FOR THE NINE MONTHS ENDED 30 SEPTEMBER 2014
B-48
Options to purchase 7,000 shares at $1.96 per share (2013: 22,800 shares at $1.96 per
share) issued in April 2007, 117,400 shares at $2.40 per share (2013: 179,900 shares at
$2.40 per share) issued in July 2010, 781,814 shares at $3.60 per share (2013: Nil) issued
in April 2014 and 70,000 shares at $3.80 per share (2013: Nil) issued in August 2014 were
outstanding during the reporting period but not included in the computation of diluted
earnings per share for the corresponding period because these options were anti-dilutive.
The options, which expire on 31 March 2017, 30 June 2020, 31 March 2024 and 20 August
2024 respectively, are still outstanding as at 30 September 2014.
23 Operating segments
The Group has four reportable segments, namely its operations in Singapore, Hong Kong,
Malaysia and China, which are the Group’s strategic business locations. In the prior years,
the Group carried out the operation in India. However, this was discontinued in 2013 (see
Note 20). In 2014, the Group starts its operations in China. The operation in China is still
in the start-up phase.
The strategic business locations are managed separately. For each of the strategic
business locations, the Chairman and CEO reviews internal management reports on
monthly basis.
Information regarding the results of each reportable segment is included below.
Performance is measured based on segment profit before tax, as included in the internal
management reports that are reviewed by the Chairman and CEO. Segment profit is used
to measure performance as management believes that such information is the most
relevant in evaluating the results of certain segments relative to other entities that operate
within these industries. Inter-segment pricing is determined on an arm’s length basis.
In presenting information on the basis of geographical segments, segment revenue is based
on a geographical location of customers. Segment non-current assets are based on the
geographical location of the assets.
APPENDIX B – UNAUDITED INTERIM CONSOLIDATED FINANCIAL
STATEMENTS FOR THE NINE MONTHS ENDED 30 SEPTEMBER 2014
B-49
Geographical segments are analysed by four primary geographical areas as follows:
Information about reportable segments
Singapore Hong Kong Malaysia
India
(Discontinued
operation) China Total
$ $ $ $ $ $
For the nine months
ended 30 September 2014
Revenue and expenses
Revenue from external
customers 40,444,239 15,897,266 2,253,456 – – 58,594,961
Inter-segment revenue 328,500 – 1,389,213 – – 1,717,713
Total revenue 40,772,739 15,897,266 3,642,669 – – 60,312,674
Finance income 46,238 381 27,038 – 323 73,980
Depreciation of plant and
equipment (466,434) (90,787) (20,001) – (2,603) (579,825)
Amortisation of intangible
assets (126,747) (1,125) (15,893) – (155) (143,920)
Reportable segment
profit/(loss) before tax 6,814,585 1,588,494 (66,601) – (379,091) 7,957,387
Share of result of associate 382 – – – – 382
As at 30 September 2014
Assets and liabilities
Reportable segment assets 27,713,236 8,545,554 1,312,840 – 982,649 38,554,279
Equity-accounted associate 400,539 – – – – 400,539
Capital expenditure 1,282,309 66,472 44,980 – 95,460 1,489,221
Reportable segment
liabilities 15,524,626 4,079,603 585,060 – 24,088 20,213,377
For the nine months
ended 30 September 2013
Revenue and expenses
Revenue from external
customers 40,013,100 11,224,212 1,448,855 588,770 – 53,274,937
Inter-segment revenue 168,750 – 1,186,098 – – 1,354,848
Total revenue 40,181,850 11,224,212 2,634,953 588,770 – 54,629,785
Finance income 1,374 256 29,045 – – 30,675
Finance expense (10,376) – – – – (10,376)
Depreciation of plant and
equipment (348,335) (83,958) (96,205) (40,176) – (568,674)
Amortisation of intangible
assets (88,487) (3,300) (28,982) (90,587) – (211,356)
Reportable segment
profit/(loss) before tax 6,356,848 236,672 (474,019) (803,772) – 5,315,729
As at 31 December 2013
Assets and liabilities
Reportable segment assets 30,389,101 6,636,239 1,431,694 – – 38,457,034
Capital expenditure 1,516,075 21,769 16,416 – – 1,554,260
Reportable segment
liabilities 9,630,867 3,619,665 582,705 – – 13,833,237
APPENDIX B – UNAUDITED INTERIM CONSOLIDATED FINANCIAL
STATEMENTS FOR THE NINE MONTHS ENDED 30 SEPTEMBER 2014
B-50
Reconciliations of reportable segment revenues, profit and loss, assets and liabilities and
other material items:
1 January 2014
to 30 September
2014
1 January 2013
to 30 September
2013
$ $
Revenue
Total revenue for reporting segments 60,312,674 54,629,785
Elimination of inter-segment revenue (1,717,713) (1,354,848)
Elimination of discontinued operation – (588,770)
Consolidated revenue 58,594,961 52,686,167
Profit or loss
Total profit before tax for reportable segments 7,957,387 5,315,729
Elimination of segment loss before tax from
discontinued operation – 803,772
Elimination of inter-segment sales to
discontinued operation – (168,750)
Share of result of associate 382 –
Consolidated profit before tax 7,957,769 5,950,751
30 September
2014
31 December
2013
$ $
Assets
Total assets for reportable segments 38,554,279 38,457,034
Investment in associate 400,539 –
Consolidated total assets 38,954,818 38,457,034
Liabilities
Total liabilities for reportable segments 20,213,377 13,833,237
Reportable
segment total Adjustment
Consolidated
total
$ $ $
For the nine months ended
30 September 2014
Other material items
Finance income 73,980 – 73,980
Capital expenditure 1,489,221 – 1,489,221
Depreciation and amortisation (723,745) – (723,745)
For the nine months ended
30 September 2013
Other material items
Finance income 30,675 – 30,675
Finance expense (10,376) – (10,376)
Capital expenditure 1,322,917 – 1,322,917
Depreciation and amortisation (780,030) – (780,030)
APPENDIX B – UNAUDITED INTERIM CONSOLIDATED FINANCIAL
STATEMENTS FOR THE NINE MONTHS ENDED 30 SEPTEMBER 2014
B-51
24 Financial risk management
Overview
The Group has exposure to the following risks from its use of financial instruments:
• credit risk
• liquidity risk
• foreign currency risk
• interest rate risk
• price risk
This note present information about the Group’s exposure to each of the above risks, the
Group’s objectives, policies and processes for measuring and managing risk, and the
Group’s management of capital. Further quantitative disclosures are included throughout
these financial statements.
APPENDIX B – UNAUDITED INTERIM CONSOLIDATED FINANCIAL
STATEMENTS FOR THE NINE MONTHS ENDED 30 SEPTEMBER 2014
B-52
Risk management framework
Risk management is integral to the whole business of the Group. The Group has a system
of controls in place to create an acceptable balance between the cost of risks occurring and
the cost of managing the risks. The management continually monitors the Group’s risk
management process to ensure that an appropriate balance between risk and control is
achieved. Risk management policies and systems are reviewed regularly to reflect changes
in market conditions and the Group’s activities.
The Board of Directors oversees how management monitors compliance with the Group’s
risk management policies and procedures and reviews the adequacy of the risk
management framework in relation to the risks faced by the Group.
Credit risk
Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial
instrument fails to meet its contractual obligations, and arises principally from the Group’s
receivables from customers and investment securities.
The Group has a credit policy in place and exposure to credit risk is monitored on an
ongoing basis.
At the reporting date, other than bank balances which are placed with regulated financial
institutions and quoted, liquid debt securities managed by fund managers, there were no
significant concentrations of credit risk. The maximum exposure to credit risk is represented
by the carrying amount of each financial asset in the statement of financial position. The
maximum exposure to credit risk for trade and other receivables (excluding accrued
revenue) at the reporting date by type of counterparty was:
30 September
2014
31 December
2013
$ $
Distributors 607,778 645,199
Retail customers 6,364,718 6,433,303
Others 2,532,384 1,778,304
9,504,880 8,856,806
The Group’s concentration of credit risk relating to trade and other receivables is limited due
to the Group’s many varied customers and the credit quality of its trade and other
receivables is within acceptable risk. The Group’s historical experience in the collection of
trade receivable falls within the recorded allowances. Due to these factors, management
believes that no additional credit risk beyond amounts provided for collection losses is
inherent in the Group’s trade and other receivables.
APPENDIX B – UNAUDITED INTERIM CONSOLIDATED FINANCIAL
STATEMENTS FOR THE NINE MONTHS ENDED 30 SEPTEMBER 2014
B-53
Impairment losses
The ageing of trade and other receivables (excluding accrued revenue) at the reporting date
was:
Gross
Impairment
losses Gross
Impairment
losses
30 September
2014
30 September
2014
31 December
2013
31 December
2013
$ $ $ $
Not past due 9,336,938 – 8,038,218 –
Past due 0 – 30 days 12,633 – 181,149 –
Past due 31 – 120 days 43,245 – 56,867 –
Past due more than
120 days but less than
1 year 13,335 – 41,037 –
Past due more than
1 year 101,547 (2,818) 553,795 (14,260)
9,507,698 (2,818) 8,871,066 (14,260)
The movement in the allowance for impairment losses in respect of trade and other
receivables during the year/period was as follows:
30 September
2014
31 December
2013
$ $
At 1 January 14,260 6,403
Impairment losses recognised 2,818 7,857
Amounts written off (14,260) –
At reporting date 2,818 14,260
The trade and other receivables that are past due more than 1 year consist mainly of
commission and fee income significantly payable to third party financial advisers. The
Group’s maximum exposure will be the outstanding balance after the payable amount to
third party financial advisers.
The Group believes that, apart from the above, no additional impairment allowance is
required in respect of the remaining trade and other receivables as these amounts mainly
relate to customers with good credit and payment records with the Group.
APPENDIX B – UNAUDITED INTERIM CONSOLIDATED FINANCIAL
STATEMENTS FOR THE NINE MONTHS ENDED 30 SEPTEMBER 2014
B-54
Liquidity risk
Liquidity risk is the risk that the Group will encounter difficulty in meeting the obligations
associated with its financial liabilities that are settled by delivering cash or other financial
asset. The Group monitors its liquidity risk and maintains a level of cash and cash
equivalents deemed adequate by management to finance the Group’s operations and to
mitigate the effects of fluctuations in cash flows.
The following are contractual maturities of financial liabilities, including estimated interest
payments and excluding the impact of netting agreements:
Carrying
amounts
Contractual
cash flows
Within
1 year
Within
1 to 5 years
$ $ $ $
30 September 2014
Non-derivative financial
liabilities
Trade and other payables 19,713,073 19,713,073 19,536,373 176,700
31 December 2013
Non-derivative financial
liabilities
Trade and other payables 13,188,757 13,188,757 12,835,357 353,400
Currency risk
Exposure to foreign currency risk is insignificant as the Group’s incomes and expenses,
assets and liabilities are substantially denominated in the respective functional currencies
of Group entities. The exposure is monitored on an ongoing basis and the Group
endeavours to keep the net exposure at an acceptable level.
The summary of quantitative data about the Group’s exposure to currency risk as reported
to the management of the Group is as follows:
US dollar Euro Pound
Australia
dollar
Chinese
yuan
$ $ $ $ $
30 September 2014
Cash and cash
equivalents 1,090,559 191,992 79,558 184,213 174,741
31 December 2013
Cash and cash
equivalents 928,274 135,518 68,674 105,746 120,934
APPENDIX B – UNAUDITED INTERIM CONSOLIDATED FINANCIAL
STATEMENTS FOR THE NINE MONTHS ENDED 30 SEPTEMBER 2014
B-55
Sensitivity analysis
A 5% strengthening of Singapore dollar, as indicated below, against the following currencies
at reporting date would decrease profit or loss by the amounts shown below. This analysis
is based on foreign currency exchange rate variances that the Group considered to be
reasonably possible at the end of the reporting period. The analysis assumes that all other
variables, in particular interest rates, remain constant. The analysis is performed on the
same basis for 2013.
Profit or loss
30 September
2014
31 December
2013
$ $
US dollar 54,528 46,414
Euro 9,600 6,776
Pound 3,978 3,434
Australian dollar 9,211 5,287
Chinese yuan 8,737 6,047
86,054 67,958
A 5% weakening of Singapore dollar against the above currencies at the reporting date
would have had the equal but opposite effect on the above currencies to the amounts shown
above, on the basis that all other variables remain constant.
Interest rate risk
The Group’s exposure to changes in interest rates relates primarily to interest-bearing
financial assets and liabilities. Interest rate risk is managed by the Group on an ongoing
basis with the primary objective of limiting the extent to which interest income could be
impacted from an adverse movement in interest rates.
Sensitivity analysis for variable rate instruments
For interest-bearing financial instruments, a change of 15 basis points (bp) in interest rate
at the reporting date would increase/(decrease) profit or loss by the amounts shown below.
This analysis assumes that all other variables, in particular foreign currency rates, remain
constant. The analysis is performed on the same basis for 2013.
30 September 2014 31 December 2013
Profit or loss Profit or loss
15 bp
increase
15 bp
decrease
15 bp
increase
15 bp
decrease
$ $ $ $
Cash and cash equivalents 205,106 (123,064) 175,977 (93,854)
APPENDIX B – UNAUDITED INTERIM CONSOLIDATED FINANCIAL
STATEMENTS FOR THE NINE MONTHS ENDED 30 SEPTEMBER 2014
B-56
Price risk
The Group’s exposure to price risk relates to changes in the dealing price of unit trust and
Singapore government securities for unexecuted orders placed. The Group has established
procedures to detect such orders and to report such incidences to management. The
management has also taken up a professional indemnity insurance and the amount insured
is reviewed annually. The Group’s exposure to price risk also includes the risk that changes
in market prices will affect the Group’s income or the value of its holdings in investments in
debt/equity securities.
Sensitivity analysis – securities price risk
A 5% increase in the underlying security prices of the Group’s available-for-sale quoted debt
securities at the reporting date would increase equity by $90,120 (2013: $100,575). This
analysis assumes that all other variables remain constant.
A 5% decrease in the underlying security prices would have had the equal but opposite
effect to the amounts shown above, on the basis that all other variables remain constant.
Capital management
The primary objective of the Group’s capital management is to ensure that it maintains
healthy capital ratios in order to support its business and maximise shareholders value.
The Group manages its capital structure and makes alignment to it, in light of changes in
economic conditions. To maintain or adjust the capital structure, the Group may align the
dividend payment to shareholders, return capital to shareholders or issue new shares.
There were no changes in the Group’s approach to capital management during the period.
Some of the subsidiaries are required to maintain sufficient financial resources by the local
regulators in the respective jurisdictions in which they operate to ensure that the relevant
regulatory limits are complied with.
Determination of fair values
A number of the Group’s accounting policies and disclosures require the determination of
fair value for financial assets and liabilities. Fair values have been determined for
measurement and/or disclosure purposes based on the following methods. When
applicable, further information about the assumptions made in determining fair values is
disclosed in the notes specific to that asset or liability.
Investment in quoted debt securities
The fair value of available-for-sale quoted debt securities is determined by reference to its
bid price at the reporting date.
APPENDIX B – UNAUDITED INTERIM CONSOLIDATED FINANCIAL
STATEMENTS FOR THE NINE MONTHS ENDED 30 SEPTEMBER 2014
B-57
Intra-group financial guarantees
The value of financial guarantees provided by the Company to its subsidiaries is determined
by reference to the difference in the interest rates, by comparing the actual rates charged
by the bank with these guarantees made available, with the estimated rates that the banks
would have charged had these guarantees not been available.
Other financial assets and liabilities
The carrying amounts of financial assets and liabilities with a maturity of less than one year
(including trade and other receivables, cash and cash equivalents and trade and other
payables) are assumed to approximate their fair values because of the short period to
maturity. For unsecured bank loan, the fair value is calculated based on the present value
of future principal and interest cash flows, discounted at the market rate of interest at the
reporting date.
Accounting classifications and fair values
The carrying amounts and fair values of financial assets and liabilities, including their levels
in the fair value hierarchy are as follows. It does not include fair value information for
financial assets and financial liabilities not measured at fair value if the carrying amount is
a reasonable approximation of fair value.
APPENDIX B – UNAUDITED INTERIM CONSOLIDATED FINANCIAL
STATEMENTS FOR THE NINE MONTHS ENDED 30 SEPTEMBER 2014
B-58
Total carrying amount Fair value
Note
Loans and
receivables
Available-
for-sale
Other
financial
liabilities Total Level 1
$ $ $ $ $
As at 30 September
2014
Financial assets
measured at fair value
Available-for-sale debt
securities 10 – 1,802,402 – 1,802,402 1,802,402
Financial assets not
measured at fair value
Cash and cash
equivalents 11 15,185,214 – – 15,185,214
Trade and other
receivables 9 17,940,430 – – 17,940,430
33,125,644 – – 33,125,644
Financial liabilities not
measured at fair value
Trade and other
payables 15 – – (19,713,073) (19,713,073)
As at 31 December
2013
Financial assets
measured at fair value
Available-for-sale debt
securities 10 – 2,011,502 – 2,011,502 2,011,502
Financial assets not
measured at fair value
Cash and cash
equivalents 11 16,718,909 – – 16,718,909
Trade and other
receivables 9 16,763,911 – – 16,763,911
33,482,820 – – 33,482,820
Financial liabilities not
measured at fair value
Trade and other
payables 15 – – (13,188,757) (13,188,757)
APPENDIX B – UNAUDITED INTERIM CONSOLIDATED FINANCIAL
STATEMENTS FOR THE NINE MONTHS ENDED 30 SEPTEMBER 2014
B-59
25 Commitments
As at 30 September 2014, the Group have the following commitments:
(a) Future minimum lease payments in respect of non-cancellable operating leases are as
follows:
30 September
2014
31 December
2013
$ $
Within 1 year 4,442,535 3,908,357
Within 2 to 5 years 8,112,033 5,283,689
12,554,568 9,192,046
The Group leases a number of office premises under operating leases. The leases
typically run for initial period of three to six years, with an option to renew the lease
after that date.
(b) Capital expenditure in respect of plant and equipment are as follows:
30 September
2014
31 December
2013
$ $
Contracted but not provided for 141,115 35,428
(c) Under regulatory requirements, some of the subsidiaries are required to maintain
sufficient capital to ensure that the relevant regulatory limits as set out by the
authorities are complied with. The Company has commitment to contribute additional
capital as and when the subsidiaries’ capital fall below the relevant regulatory limits.
26 Related parties
Key management personnel compensation
Compensation paid or payable to key management personnel comprise:
1 January
2014 to
30 September
2014
1 January
2013 to
30 September
2013
$ $
Fees to non-executive directors 294,000 159,700
Remuneration paid or payable to key management
personnel
– short-term employment benefits 1,980,066 1,542,451
– shared-based payment 90,987 18,995
APPENDIX B – UNAUDITED INTERIM CONSOLIDATED FINANCIAL
STATEMENTS FOR THE NINE MONTHS ENDED 30 SEPTEMBER 2014
B-60
Directors and key management personnel also participate in the Company’s Share Option
Scheme. During the period ended 30 September 2014, 453,000 share options (30
September 2013: 416,250) was granted to directors and key management personnel of the
Group. As at 30 September 2014, 829,250 (2013: 531,420) of those share options were
outstanding.
Other related party transactions
For the purpose of these financial statements, parties are considered to be related to the
Group if the Group entities have the ability, directly or indirectly, to control the party or
exercise significant influence over the party in making financial and operating decisions, or
vice versa, or where the Group entities are subject to common control or common significant
influence. Related parties may be individuals or entities.
Other than disclosed elsewhere in the financial statements, there were no other
transactions with the Group and related parties during the reporting period.
27 Subsequent event
On 14 November 2014, the Board of Directors of the Company approved for every 1
ordinary share in the issued and paid-up share capital of the Company be sub-divided into
6 ordinary shares in the capital of the Company. The sub-division was completed on 20
November 2014.
28 Comparative information
The comparative financial information for the nine months ended 30 September 2013 have
not been audited nor reviewed.
APPENDIX B – UNAUDITED INTERIM CONSOLIDATED FINANCIAL
STATEMENTS FOR THE NINE MONTHS ENDED 30 SEPTEMBER 2014
B-61
This page has been intentionally left blank.
iFAST Corporation Ltd.
and its Subsidiaries
Registration Number: 200007899C
Unaudited Pro Forma Consolidated Financial Information
Financial year ended 31 December 2013 and
nine months ended 30 September 2014
APPENDIX C – UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL
INFORMATION FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2013
AND THE NINE MONTHS ENDED 30 SEPTEMBER 2014
C-1
Independent auditors’ report on the compilation of Unaudited Pro Forma Consolidated
Financial Information included in a Prospectus
The Board of Directors
iFAST Corporation Ltd. and its subsidiaries
We have completed our assurance engagement to report on the compilation of pro forma
consolidated financial information of iFAST Corporation Ltd. (the Company) by the management
of the Company (the Management). The pro forma consolidated financial information of the
Company and its subsidiaries (the “Pro Forma Group”) consists of the:
(a) pro forma consolidated statements of financial position as at 31 December 2013 and
30 September 2014;
(b) pro forma consolidated statements of profit or loss and consolidated statements of
comprehensive income for the year ended 31 December 2013 and the nine months ended
30 September 2014;
(c) pro forma consolidated statements of cash flows for the year ended 31 December 2013 and
the nine months ended 30 September 2014; and
related notes (the Unaudited Pro Forma Consolidated Financial Information) as set out on pages
C-5 to C-27 of the prospectus (the Prospectus) to be issued in connection with the offering of
shares in the Company (the Offering). The Unaudited Pro Forma Consolidated Financial
Information of the Group has been prepared for illustrative purposes only and are based on certain
assumptions, after making certain adjustments. The applicable criteria (the Criteria) on the basis
of which the Management has compiled the Unaudited Pro Forma Consolidated Financial
Information are described in Note 3.
The Unaudited Pro Forma Consolidated Financial Information has been compiled by the
Management to illustrate the impact of the following transactions (the Transactions) set out in
Note 2 on the Pro Forma Group’s financial position as at 31 December 2013 and 30 September
2014 as if the Transactions had taken place on 31 December 2013 and 30 September 2014
respectively, and its financial performance and cash flows for the year ended 31 December 2013
and the nine months ended 30 September 2014 as if the Transactions had taken place on
1 January 2013:
(a) the disposal of iFAST India Investment Pte. Ltd. (“iFAST India”) and its subsidiary to
Pecuniam Pte. Ltd. (the Disposal); and
(b) the declaration and payment of dividends subsequent to 31 December 2013 (the Dividend
Payment).
As part of this process, information about the Pro Forma Group’s financial position, financial
performance and cash flows has been extracted by the Management from the audited
consolidated financial statements of the Group for the year ended 31 December 2013 and the
unaudited consolidated financial statements of the Group for the nine months ended
30 September 2014.
APPENDIX C – UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL
INFORMATION FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2013
AND THE NINE MONTHS ENDED 30 SEPTEMBER 2014
C-2
The Management’s responsibility for the Unaudited Pro Forma Consolidated Financial Information
The Management is responsible for compiling the Unaudited Pro Forma Consolidated Financial
Information on the basis of the Criteria.
The Reporting Accountants’ responsibility
Our responsibility is to express an opinion about whether the Unaudited Pro Forma Financial
Information has been compiled, in all material respects, by the Management on the basis of the
Criteria.
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 (the ISCA). This standard requires that the Reporting Accountants comply with
ethical requirements and plan and perform procedures to obtain reasonable assurance about
whether the Management has compiled, in all material respects, the Unaudited Pro Forma
Consolidated Financial Information on the basis of the Criteria.
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 Unaudited Pro Forma
Consolidated Financial Information, nor have we, in the course of this engagement, performed an
audit or review of the financial information used in compiling the Unaudited Pro Forma
Consolidated Financial Information.
The purpose of pro forma consolidated financial information included in a Prospectus is solely to
illustrate the impact of a significant event or 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 consolidated financial
information has been compiled, in all material respects, on the basis of the Criteria involves
performing procedures to assess whether the Criteria used by the Management in the compilation
of the pro forma consolidated 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 basis of Criteria; and
• the pro forma consolidated financial information reflects the proper application of those
adjustments to the unadjusted financial information.
The procedures selected depend on the Reporting Accountants’ judgement, having regard to his
understanding of the nature of the company, event or transaction in respect of which the pro forma
consolidated financial information has been compiled, and other relevant engagement
circumstances.
The engagement also involves evaluating the overall presentation of the pro forma consolidated
financial information.
APPENDIX C – UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL
INFORMATION FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2013
AND THE NINE MONTHS ENDED 30 SEPTEMBER 2014
C-3
We believe that the evidence we have obtained is sufficient and appropriate to provide a basis for
our opinion.
Opinion
In our opinion:
(a) the Unaudited Pro Forma Consolidated Financial Information has been compiled:
(i) in a manner consistent with the accounting policies adopted by the Company in its latest
audited consolidated financial statements, which are in accordance with Singapore
Financial Reporting Standards; and
(ii) on the basis of the Criteria stated in Note 3 of the Unaudited Pro Forma Consolidated
Financial Information; and
(b) each material adjustment made to the information used in the preparation of the Unaudited
Pro Forma Consolidated Financial Information is appropriate for the purpose of preparing
such unaudited financial information.
This letter has been prepared for inclusion in the Prospectus of the Company to be issued in
connection with the initial public offering of the shares by the Company.
KPMG LLP
Public Accountants and
Chartered Accountants
Singapore
4 December 2014
Jeya Poh Wan S/O K. Suppiah
Partner
APPENDIX C – UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL
INFORMATION FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2013
AND THE NINE MONTHS ENDED 30 SEPTEMBER 2014
C-4
Unaudited pro forma consolidated statements of financial position
As at 31 December 2013 and 30 September 2014
Note
31 December
2013
30 September
2014
$ $
Assets
Plant and equipment 1,633,848 1,726,598
Intangible assets 663,838 1,339,369
Associate – 400,539
Deferred tax assets 34,559 21,618
Other investments 2,011,502 1,802,402
Club membership 11,429 11,429
Total non-current assets 4,355,176 5,301,955
Current tax receivable 5,489 29,935
Trade and other receivables 16,763,911 17,940,430
Prepayments 613,549 497,284
Cash at bank and in hand 5 5,374,204 8,334,769
Money market funds 5 426,386 36,267
Total current assets 23,183,539 26,838,685
Held under trust
Client bank accounts 100,599,080 121,552,395
Client ledger balances (100,599,080) (121,552,395)
– –
Total assets 27,538,715 32,140,640
Equity
Share capital 10,670,001 11,379,244
Reserves 2,377,428 7,362,197
Equity attributable to owners of the Company 13,047,429 18,741,441
Non-controlling interests 658,049 –
Total equity 13,705,478 18,741,441
Liabilities
Deferred tax liabilities 76,746 125,385
Other payables 353,400 176,700
Total non-current liabilities 430,146 302,085
Trade and other payables 12,835,357 12,722,195
Current tax payable 567,734 374,919
Total current liabilities 13,403,091 13,097,114
Total liabilities 13,833,237 13,399,199
Total equity and liabilities 27,538,715 32,140,640
The accompanying notes form an integral part of these financial information.
APPENDIX C – UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL
INFORMATION FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2013
AND THE NINE MONTHS ENDED 30 SEPTEMBER 2014
C-5
Unaudited pro forma consolidated statements of profit or loss
Year ended 31 December 2013 and nine months ended 30 September 2014
Note
Year ended
31 December
2013
Nine months
ended
30 September
2014
$ $
Continuing operations
Revenue 6 69,638,873 58,594,961
Commission and fee paid or payable to
third party financial advisers (37,884,235) (31,267,490)
31,754,638 27,327,471
Other operating income 163,971 208,863
Gain on distribution to owners of the Company 617,650 –
Depreciation of plant and equipment (703,506) (579,825)
Amortisation of intangible assets (168,621) (143,920)
Staff costs (13,310,605) (11,249,735)
Other operating expenses (9,398,966) (7,679,447)
Results from operating activities 8,954,561 7,883,407
Finance income 39,528 73,980
Finance expense (10,376) –
Net finance income 29,152 73,980
Share of result of associate, net of tax – 382
Profit before tax 8,983,713 7,957,769
Tax expense (572,751) (380,566)
Profit from continuing operations 8,410,962 7,577,203
Discontinued operation
Loss from discontinued operation, net of tax 7 (2,516,813) –
Profit for the year/period 8 5,894,149 7,577,203
Profit attributable to:
Owners of the Company from continuing
operations 8,643,147 7,614,892
Owners of the Company from discontinued
operation (2,516,813) –
Non-controlling interests from continuing
operations (232,185) (37,689)
Profit for the year/period 5,894,149 7,577,203
Earnings per share from continuing
operations
Basic earnings per share (cents) 9 4.3 3.8
Diluted earnings per share (cents) 9 4.2 3.7
The accompanying notes form an integral part of these financial information.
APPENDIX C – UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL
INFORMATION FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2013
AND THE NINE MONTHS ENDED 30 SEPTEMBER 2014
C-6
Unaudited pro forma consolidated statements of comprehensive income
Year ended 31 December 2013 and nine months ended 30 September 2014
Note
Year ended
31 December
2013
Nine months
ended
30 September
2014
$ $
Profit for the year/period 5,894,149 7,577,203
Other comprehensive income
Items that are or may be reclassified
subsequently to profit or loss:
Net change in fair value of available-for-sale
financial assets 35,562 76,990
Net change in fair value of available-for-sale
financial assets reclassified to profit or loss (76,402) (99,464)
Fair value of available-for-sale financial assets on
disposal of discontinued operation reclassified to
profit or loss (250,430) –
Foreign currency translation differences for
foreign operations 20,088 63,073
Foreign currency translation differences on
disposal of discontinued operation reclassified to
profit or loss 2,849,138 –
Other comprehensive income for the
year/period, net of tax 2,577,956 40,599
Total comprehensive income for the
year/period 8,472,105 7,617,802
Attributable to:
Owners of the Company 8,721,612 7,650,152
Non-controlling interests (249,507) (32,350)
Total comprehensive income for the
year/period 8,472,105 7,617,802
The accompanying notes form an integral part of these financial information.
APPENDIX C – UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL
INFORMATION FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2013
AND THE NINE MONTHS ENDED 30 SEPTEMBER 2014
C-7
Unaudited pro forma consolidated statements of cash flows
Year ended 31 December 2013 and nine months ended 30 September 2014
Year ended
31 December
2013
Nine months
ended
30 September
2014
$ $
Cash flows from operating activities
Profit for the year/period 5,894,149 7,577,203
Adjustments for:
Depreciation of plant and equipment 703,506 579,825
Loss/(Gain) on disposal of plant and equipment 112 (39)
Amortisation of intangible assets 168,621 143,920
Impairment loss on trade receivables, net 7,857 2,818
Bad debts written off 2,073 35,452
Equity settled share-based payment transactions 62,301 248,016
Dividend income on available-for-sale quoted
debt securities, net (20,432) (16,753)
Gain on redemption of quoted debt securities (76,402) (99,464)
Share of result of associate – (382)
Dividend income on investment in associate – (3,727)
Unrealised exchange (gain)/loss, net (27,187) 35,409
Gain on realisation of intangible assets (81,895) –
Gain on distribution to owners of the Company (617,650) –
Translation reserve realised, loss 2,849,138 –
Fair value reserve realised, gain (250,430) –
Finance income (39,528) (73,980)
Finance expense 10,376 –
Tax expense 572,751 380,566
9,157,360 8,808,864
Change in trade and other receivables (2,233,796) (1,516,664)
Change in trade and other payables 2,335,391 306,124
Cash generated from operations 9,258,955 7,598,324
Taxes paid (633,834) (536,238)
Interest received 39,528 73,980
Interest paid (10,376) –
Net cash from operating activities 8,654,273 7,136,066
Cash flows from investing activities
Purchase of plant and equipment (833,561) (670,191)
Purchase of intangible assets (131,699) (995,730)
Proceeds from disposal of plant and equipment 460 39
Acquisition of associate – (400,157)
Proceeds from redemption of quoted debt
securities 1,500,302 3,302,844
Purchase of available-for-sale quoted debt
securities – (3,000,000)
Disposal of discontinued operation, net of cash
disposed of (2,257,709) –
Net cash used in investing activities (1,722,207) (1,763,195)
The accompanying notes form an integral part of these financial information.
APPENDIX C – UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL
INFORMATION FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2013
AND THE NINE MONTHS ENDED 30 SEPTEMBER 2014
C-8
Unaudited pro forma consolidated statements of cash flows
Year ended 31 December 2013 and nine months ended 30 September 2014 (cont’d)
Note
Year ended
31 December
2013
Nine months
ended
30 September
2014
$ $
Cash flows from financing activities
Dividends paid to owners of the Company (14,276,894) –
Proceeds from exercise of share options 365,988 709,243
Payment on acquisition of additional interests in
subsidiaries – (3,539,098)
Repayment of unsecured bank loan (748,189) –
Net cash used in financing activities (14,659,095) (2,829,855)
Net (decrease)/increase in cash and cash
equivalents (7,727,029) 2,543,016
Cash and cash equivalents at 1 January 13,540,693 5,800,590
Effect of exchange rate fluctuations on cash held (13,074) 27,430
Cash and cash equivalents at 31 December/
30 September 5 5,800,590 8,371,036
The accompanying notes form an integral part of these financial information.
APPENDIX C – UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL
INFORMATION FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2013
AND THE NINE MONTHS ENDED 30 SEPTEMBER 2014
C-9
Notes to the Unaudited Pro Forma Consolidated Financial Information
These notes form an integral part of the financial information.
1 Introduction
The unaudited pro forma consolidated financial information has been prepared for inclusion
in the prospectus (the Prospectus) to be issued in connection with the proposed Listing of
iFAST Corporation Ltd. (the Company) on the Singapore Exchange Securities Trading
Limited (the SGX-ST).
The unaudited pro forma consolidated financial information comprise the unaudited pro
forma consolidated statements of financial position of the Company and its subsidiaries (the
Group) as at 31 December and 30 September 2014, the unaudited pro forma consolidated
statements of profit or loss, the unaudited pro forma consolidated statements of
comprehensive income and the unaudited pro forma consolidated statements of cash flows
of the Group for the year ended 31 December 2013 and the nine months ended 30
September 2014, and the notes thereon (collectively, the Unaudited Pro Forma Consolidated
Financial Information). The Unaudited Pro Forma Consolidated Financial Information should
be read in conjunction with the audited consolidated financial statements of the Group for the
financial year ended 31 December 2013 and the unaudited interim consolidated financial
statements of the Group for the nine months ended 30 September 2014 as set out in
Appendix A and Appendix B of the Prospectus respectively.
2 Transactions
2.1 Disposal of iFAST India Investment Pte. Ltd. and its subsidiary (the Disposal)
On 3 October 2013, the Company and Deutsche Asia Pacific Holdings Pte. Ltd. sold their
entire shares in iFAST India Investment Pte. Ltd. (“iFAST India”) and its subsidiary to
Pecuniam Pte. Ltd. (“Pecuniam”), for considerations of $1,699,668 and $1,733,001
respectively, which was financed by a convertible loan receivable of $3,332,669 and an
advance of $100,000 from the Company to Pecuniam. The convertible loan receivable was
converted to Pecuniam shares subsequently. In addition, the Company injected $400,000
into Pecuniam.
On 30 October 2013, the Company declared a special interim dividend amounting to
$3,832,669, satisfied by way of a distribution in specie of the entire Pecuniam shares held
by the Company.
The Group excluding iFAST India and its subsidiary are herein referred to as the “Pro Forma
Group” for the purposes of this unaudited pro forma consolidated financial information.
2.2 Declaration and payment of dividends subsequent to 31 December 2013 include:–
(i) 2013 final dividend of 3.9 cents per share amounting to $1,321,004 declared on 14
February 2014 and paid on 7 May 2014;
(ii) 2014 interim dividend of 2.5 cents per share amounting to $846,797 declared on 28
April 2014 and paid on 7 May 2014;
APPENDIX C – UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL
INFORMATION FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2013
AND THE NINE MONTHS ENDED 30 SEPTEMBER 2014
C-10
(iii) 2014 interim dividend of 5.7 cents per share amounting to $1,936,340 declared on 1
August 2014 and paid on 29 August 2014; and
(iv) 2014 interim dividend of 20.0 cents per share amounting to $6,814,178 declared on 1
September 2014 and to be paid on 5 November 2014.
2.3 The above transactions are collectively referred to as the Transactions.
3 Basis of criteria of the unaudited pro forma consolidated financial information
The unaudited pro forma consolidated financial information set out in this report, expressed
in Singapore dollars, has been prepared for illustrative purposes only and is based on certain
assumptions, after making certain adjustments, to show that:
(i) the unaudited pro forma consolidated statements of financial position of the Group as
at 31 December 2013 and 30 September 2014 would have been if the Transactions had
occurred on 31 December 2013 and 30 September 2014, respectively;
(ii) the unaudited pro forma consolidated statements of profit or loss and statements of
comprehensive income of the Group for the year ended 31 December 2013 and nine
months ended 30 September 2014 would have been if the Transactions had occurred
on 1 January 2013; and
(iii) the unaudited pro forma consolidated statements of cash flows of the Group for the year
ended 31 December 2013 and nine months ended 30 September 2014 would have been
if the Transactions had occurred on 1 January 2013.
3.1 Objective of unaudited pro forma consolidated financial information
The objective of the unaudited pro forma consolidated financial information is to show what
the financial position, financial performance and cash flows of the Pro Forma Group might
have been, had the Transactions occurred at the respective dates as described above.
However, the unaudited pro forma consolidated financial information of the Group is not
necessarily indicative of the financial position, financial performance and cash flows of the
Pro Forma Group that would have been attained had the Transactions actually occurred on
those dates. The unaudited pro forma consolidated financial information has been prepared
for illustrative purposes only and, because of its nature, may not give a true picture of the Pro
Forma Group’s actual financial position, financial performance or cash flows.
The unaudited pro forma consolidated financial information of the Pro Forma Group for the
year ended 31 December 2013 and nine months ended 30 September 2014 have been
compiled based on the following:
(i) the audited consolidated financial statements of the Group for the year ended
31 December 2013 and the unaudited interim consolidated financial statements of the
Group for the nine months ended 30 September 2014 which were prepared in
accordance with the Singapore Financial Reporting Standards.
APPENDIX C – UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL
INFORMATION FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2013
AND THE NINE MONTHS ENDED 30 SEPTEMBER 2014
C-11
The audited consolidated financial statements of the Group for the year ended 31
December 2013 and the unaudited interim consolidated financial statements of the
Group for the nine months ended 30 September 2014 were audited and reviewed by
KPMG LLP Singapore, Public Accountants and Chartered Accountants. The auditors’
report on these consolidated financial statements was not subject to any qualifications,
modifications or disclaimers.
(ii) the accounting policies of the Group as set out in the audited consolidated financial
statements for the years ended 31 December 2011, 2012 and 2013 and unaudited
interim consolidated financial statements for the nine months ended 30 September
2014 included in Appendix A and Appendix B of the Prospectus respectively.
3.2 Unaudited pro forma consolidated statements of financial position
In arriving at the unaudited pro forma consolidated statements of financial position as at 31
December 2013 and 30 September 2014, the following key adjustment was made:
(i) Adjustments to reflect the declaration and payment of dividends subsequent to 31
December 2013 as described in Note 2.2, as if the declaration and payment of these
dividends had taken place on 31 December 2013 and 30 September 2014.
3.3 Unaudited pro forma consolidated statements of profit or loss and statements of
comprehensive income
In arriving at the unaudited pro forma consolidated statements of profit or loss and
statements of comprehensive income for the year ended 31 December 2013 and the nine
months ended 30 September 2014, the following key adjustments and assumptions were
made:
(i) The disposal of iFAST India and its subsidiary to Pecuniam and the distribution in
specie of the entire Pecuniam shares are accounted for as if the Disposal had taken
place at 1 January 2013 based on the same information set out under Note 2.1.
Therefore, no adjustments are made to the considerations and carrying amounts of net
assets disposed. Accordingly, no adjustment is made to the gain on distribution to
owners of the Company arising from the distribution in specie.
(ii) Adjustments to reverse the results attributable to the Disposal, comprising the
followings:
a. Loss from iFAST India and its subsidiary for the nine months ended 30 September
2013; and
b. Service fee charged to iFAST India and its subsidiary for the nine months ended
30 September 2013.
APPENDIX C – UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL
INFORMATION FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2013
AND THE NINE MONTHS ENDED 30 SEPTEMBER 2014
C-12
3.4 Unaudited pro forma consolidated statements of cash flows
In arriving at the unaudited pro forma consolidated statements of cash flows for the year
ended 31 December 2013 and the nine months ended 30 September 2014, the following key
adjustments and assumptions were made:
(i) The disposal of iFAST India and its subsidiary to Pecuniam and the distribution in
specie of the entire Pecuniam shares are accounted for as if the Disposal had taken
place at 1 January 2013 based on the same information set out under Note 2.1.
Therefore, no adjustments are made to the considerations and carrying amounts of net
assets disposed. Accordingly, no adjustment is made to the gain on distribution to
owners of the Company arising from the distribution in specie.
(ii) Adjustments to reverse the results attributable to the Disposal, comprising the
followings:
a. Loss from iFAST India and its subsidiary for the nine months ended 30 September
2013; and
b. Service fee charged to iFAST India and its subsidiary for the nine months ended
30 September 2013.
(iii) Adjustments to reflect the declaration and payment of dividends subsequent to 31
December 2013 as described in Note 2.2.
4 Pro forma adjustments
Statement of adjustments for the unaudited pro forma consolidated statements of
financial position of the pro forma group
The unaudited pro forma consolidated statements of financial position of the pro forma group
as at 31 December 2013 and 30 September 2014 has been prepared for inclusion in the
Prospectus and is presented below. Details of the pro forma adjustments and assumptions
made are set out in the Basis of Criteria of the Unaudited Pro Forma Consolidated Financial
Information in Note 3.
APPENDIX C – UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL
INFORMATION FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2013
AND THE NINE MONTHS ENDED 30 SEPTEMBER 2014
C-13
Statement of adjustments for the unaudited pro forma consolidated statements of
financial position of the pro forma group
As at 31 December 2013
Note
Audited
Consolidated
Statement of
Financial
Position
Pro Forma
Adjustment
Note 3.2(i)
Unaudited
Pro Forma
Consolidated
Statement of
Financial
Position
$ $ $
Assets
Plant and equipment 1,633,848 – 1,633,848
Intangible assets 663,838 – 663,838
Deferred tax assets 34,559 – 34,559
Other investments 2,011,502 – 2,011,502
Club membership 11,429 – 11,429
Total non-current assets 4,355,176 – 4,355,176
Current tax receivable 5,489 – 5,489
Trade and other receivables 16,763,911 – 16,763,911
Prepayments 613,549 – 613,549
Cash at bank and in hand 5 16,292,523 (10,918,319) 5,374,204
Money market funds 5 426,386 – 426,386
Total current assets 34,101,858 (10,918,319) 23,183,539
Held under trust
Client bank accounts 100,599,080 – 100,599,080
Client ledger balances (100,599,080) – (100,599,080)
– – –
Total assets 38,457,034 (10,918,319) 27,538,715
Equity
Share capital 10,670,001 – 10,670,001
Reserves 13,295,747 (10,918,319) 2,377,428
Equity attributable to owners
of the Company 23,965,748 (10,918,319) 13,047,429
Non-controlling interests 658,049 – 658,049
Total equity 24,623,797 (10,918,319) 13,705,478
Liabilities
Deferred tax liabilities 76,746 – 76,746
Other payables 353,400 – 353,400
Total non-current liabilities 430,146 – 430,146
Trade and other payables 12,835,357 – 12,835,357
Current tax payable 567,734 – 567,734
Total current liabilities 13,403,091 – 13,403,091
Total liabilities 13,833,237 – 13,833,237
Total equity and liabilities 38,457,034 (10,918,319) 27,538,715
APPENDIX C – UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL
INFORMATION FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2013
AND THE NINE MONTHS ENDED 30 SEPTEMBER 2014
C-14
Statement of adjustments for the unaudited pro forma consolidated statements of
financial position of the pro forma group
As at 30 September 2014
Note
Unaudited
Consolidated
Statement of
Financial
Position
Pro Forma
Adjustment
Note 3.2(i)
Unaudited
Pro Forma
Consolidated
Statement of
Financial
Position
$ $ $
Assets
Plant and equipment 1,726,598 – 1,726,598
Intangible assets 1,339,369 – 1,339,369
Associate 400,539 – 400,539
Deferred tax assets 21,618 – 21,618
Other investments 1,802,402 – 1,802,402
Club membership 11,429 – 11,429
Total non-current assets 5,301,955 – 5,301,955
Current tax receivable 29,935 – 29,935
Trade and other receivables 17,940,430 – 17,940,430
Prepayments 497,284 – 497,284
Cash at bank and in hand 5 15,148,947 (6,814,178) 8,334,769
Money market funds 5 36,267 – 36,267
Total current assets 33,652,863 (6,814,178) 26,838,685
Held under trust
Client bank accounts 121,552,395 – 121,552,395
Client ledger balances (121,552,395) – (121,552,395)
– – –
Total assets 38,954,818 (6,814,178) 32,140,640
Equity
Share capital 11,379,244 – 11,379,244
Reserves 7,362,197 – 7,362,197
Equity attributable to owners
of the Company 18,741,441 – 18,741,441
Non-controlling interests – – –
Total equity 18,741,441 – 18,741,441
Liabilities
Deferred tax liabilities 125,385 – 125,385
Other payables 176,700 – 176,700
Total non-current liabilities 302,085 – 302,085
Trade and other payables 19,536,373 (6,814,178) 12,722,195
Current tax payable 374,919 – 374,919
Total current liabilities 19,911,292 (6,814,178) 13,097,114
Total liabilities 20,213,377 (6,814,178) 13,399,199
Total equity and liabilities 38,954,818 (6,814,178) 32,140,640
APPENDIX C – UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL
INFORMATION FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2013
AND THE NINE MONTHS ENDED 30 SEPTEMBER 2014
C-15
Statement of adjustments for the unaudited pro forma consolidated statements of profit or
loss of the pro forma group
The unaudited pro forma consolidated statements of profit or loss and statements of
comprehensive income of the pro forma group for the year ended 31 December 2013 and the nine
months ended 30 September 2014 have been prepared for inclusion in the Prospectus and is
presented below. Details of the pro forma adjustments and assumptions made are set out in the
Basis of Criteria of the Unaudited Pro Forma Consolidated Financial Information in Note 3.
Year ended 31 December 2013
Note
Audited
Consolidated
Statement of
Profit or Loss
Pro Forma
Adjustments
Note 3.3(ii)
Unaudited
Pro Forma
Consolidated
Statement of
Profit or Loss
$ $ $
Continuing operations
Revenue 6 69,470,123 168,750 69,638,873
Commission and fee paid or
payable to third party financial
advisers (37,884,235) – (37,884,235)
31,585,888 168,750 31,754,638
Other operating income 163,971 – 163,971
Gain on distribution to owners of the
Company 617,650 – 617,650
Depreciation of plant and equipment (703,506) – (703,506)
Amortisation of intangible assets (168,621) – (168,621)
Staff costs (13,310,605) – (13,310,605)
Other operating expenses (9,398,966) – (9,398,966)
Results from operating activities 8,785,811 168,750 8,954,561
Finance income 39,528 – 39,528
Finance expense (10,376) – (10,376)
Net finance income 29,152 – 29,152
Profit before tax 8,814,963 168,750 8,983,713
Tax expense (572,751) – (572,751)
Profit from continuing operations 8,242,212 168,750 8,410,962
Discontinued operation
Loss from discontinued operation,
net of tax 7 (3,151,835) 635,022 (2,516,813)
Profit for the year 8 5,090,377 803,772 5,894,149
Profit attributable to:
Owners of the Company from
continuing operations 8,474,397 168,750 8,643,147
Owners of the Company from
discontinued operation (2,713,106) 196,293 (2,516,813)
Non-controlling interests from
continuing operations (232,185) – (232,185)
Non-controlling interest from
discontinued operation (438,729) 438,729 –
Profit for the year 5,090,377 803,772 5,894,149
APPENDIX C – UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL
INFORMATION FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2013
AND THE NINE MONTHS ENDED 30 SEPTEMBER 2014
C-16
Statement of adjustments for the unaudited pro forma consolidated statement of
comprehensive income of the pro forma group
Year ended 31 December 2013
Audited
Consolidated
Statement of
Comprehensive
Income
Pro Forma
Adjustments
Note 3.3(ii)
Unaudited
Pro Forma
Consolidated
Statement of
Comprehensive
Income
$ $ $
Profit for the year 5,090,377 803,772 5,894,149
Other comprehensive income
Items that are or may be
reclassified subsequently to
profit or loss:
Net change in fair value of
available-for-sale financial
assets 235,403 (199,841) 35,562
Net change in fair value of
available-for-sale financial
assets reclassified to profit or
loss (732,457) 656,055 (76,402)
Fair value of available-for-sale
financial assets on disposal of
discontinued operation
reclassified to profit or loss (250,430) – (250,430)
Foreign currency translation
differences for foreign operations (327,573) 347,661 20,088
Foreign currency translation
differences on disposal of
discontinued operation
reclassified to profit or loss 2,849,138 – 2,849,138
Other comprehensive income
for the year, net of tax 1,774,081 803,875 2,577,956
Total comprehensive income
for the year 6,864,458 1,607,647 8,472,105
Attributable to:
Owners of the Company 7,946,593 775,019 8,721,612
Non-controlling interests (1,082,135) 832,628 (249,507)
Total comprehensive income
for the year 6,864,458 1,607,647 8,472,105
APPENDIX C – UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL
INFORMATION FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2013
AND THE NINE MONTHS ENDED 30 SEPTEMBER 2014
C-17
Statement of adjustments for the unaudited pro forma consolidated statement of profit or
loss of the pro forma group
Nine months ended 30 September 2014
Note
Unaudited
Consolidated
Statement of
Profit or Loss
Pro Forma
Adjustments
Note 3.3(ii)
Unaudited
Pro Forma
Consolidated
Statement of
Profit or Loss
$ $ $
Continuing operations
Revenue 6 58,594,961 – 58,594,961
Commission and fee paid or payable
to third party financial advisers (31,267,490) – (31,267,490)
27,327,471 – 27,327,471
Other operating income 208,863 – 208,863
Depreciation of plant and equipment (579,825) – (579,825)
Amortisation of intangible assets (143,920) – (143,920)
Staff costs (11,249,735) – (11,249,735)
Other operating expenses (7,679,447) – (7,679,447)
Results from operating activities 7,883,407 – 7,883,407
Finance income 73,980 – 73,980
Finance expense – – –
Net finance income 73,980 – 73,980
Share of result of associate,
net of tax 382 382
Profit before tax 7,957,769 – 7,957,769
Tax expense (380,566) – (380,566)
Profit from continuing operations 7,577,203 – 7,577,203
Discontinued operation
Loss from discontinued operation,
net of tax 7 – – –
Profit for the period 8 7,577,203 – 7,577,203
Profit attributable to:
Owners of the Company from
continuing operations 7,614,892 – 7,614,892
Non-controlling interests from
continuing operations (37,689) – (37,689)
Profit for the period 7,577,203 – 7,577,203
APPENDIX C – UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL
INFORMATION FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2013
AND THE NINE MONTHS ENDED 30 SEPTEMBER 2014
C-18
Statement of adjustments for the unaudited pro forma consolidated statement of
comprehensive income of the pro forma group
Nine months ended 30 September 2014
Note
Unaudited
Consolidated
Statement of
Comprehensive
Income
Pro Forma
Adjustments
Note 3.3(ii)
Unaudited
Pro Forma
Consolidated
Statement of
Comprehensive
Income
$ $ $
Profit for the period 7,577,203 – 7,577,203
Other comprehensive income
Items that are or may be
reclassified subsequently to
profit or loss:
Net change in fair value of
available-for-sale financial
assets 76,990 – 76,990
Net change in fair value of
available-for-sale financial
assets reclassified to profit
or loss (99,464) – (99,464)
Foreign currency translation
differences for foreign operations 63,073 – 63,073
Other comprehensive income
for the period, net of tax 40,599 – 40,599
Total comprehensive income
for the period 7,617,802 – 7,617,802
Attributable to:
Owners of the Company 7,650,152 – 7,650,152
Non-controlling interests (32,350) – (32,350)
Total comprehensive income
for the period 7,617,802 – 7,617,802
APPENDIX C – UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL
INFORMATION FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2013
AND THE NINE MONTHS ENDED 30 SEPTEMBER 2014
C-19
Statement of adjustments for the unaudited pro forma consolidated statement of cash
flows of the pro forma group
The unaudited pro forma consolidated statements of cash flows of the pro forma group for the year
ended 31 December 2013 and the nine months ended 30 September 2014 have been prepared
for inclusion in the Prospectus and is presented below. Details of the pro forma adjustments and
assumptions made are set out in the Basis of Criteria of the Unaudited Pro Forma Consolidated
Financial Information in Note 3.
Year ended 31 December 2013
Note
Audited
Consolidated
Statement of
Cash Flows
Pro Forma Adjustments
Unaudited
Pro Forma
Consolidated
Statement of
Cash Flows Note 3.4(ii) Note 3.4(iii)
$ $ $ $
Cash flows from operating
activities
Profit for the year 5,090,377 803,772 – 5,894,149
Adjustments for:
Depreciation of plant and equipment 743,682 (40,176) – 703,506
Loss on disposal of plant and
equipment 112 – – 112
Amortisation of intangible assets 259,208 (90,587) – 168,621
Impairment losses on trade
receivables, net 7,857 – – 7,857
Bad debt written off 2,073 – – 2,073
Equity settled share-based
payment transactions 62,301 – – 62,301
Dividend income on available-for-
sale quoted debt securities, net (20,432) – – (20,432)
Gain on redemption of quoted debt
securities (732,457) 656,055 – (76,402)
Unrealised exchange loss, net 12,245 (39,432) – (27,187)
Gain on realisation of intangible
assets (81,895) – – (81,895)
Gain on distribution to owners of the
Company (617,650) – – (617,650)
Translation reserve realised, loss 2,849,138 – – 2,849,138
Fair value reserve realised, gain (250,430) – – (250,430)
Finance income (39,528) – – (39,528)
Finance expense 10,376 – – 10,376
Tax expense 572,751 – – 572,751
7,867,728 1,289,632 – 9,157,360
Change in trade and other
receivables (2,521,309) 287,513 – (2,233,796)
Change in trade and other payables 2,383,865 (48,474) – 2,335,391
Cash generated from operations 7,730,284 1,528,671 – 9,258,955
APPENDIX C – UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL
INFORMATION FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2013
AND THE NINE MONTHS ENDED 30 SEPTEMBER 2014
C-20
Statement of adjustments for the unaudited pro forma consolidated statement of cash
flows of the pro forma group (cont’d)
Year ended 31 December 2013
Note
Audited
Consolidated
Statement of
Cash Flows
Pro Forma Adjustments
Unaudited
Pro Forma
Consolidated
Statement of
Cash Flows Note 3.4(ii) Note 3.4(iii)
$ $ $ $
Cash generated from operations
(balance brought forward) 7,730,284 1,528,671 – 9,258,955
Taxes paid (633,834) – – (633,834)
Interest received 39,528 – – 39,528
Interest paid (10,376) – – (10,376)
Net cash from operating activities 7,125,602 1,528,671 – 8,654,273
Cash flows from investing
activities
Purchase of plant and equipment (844,693) 11,132 – (833,561)
Purchase of intangible assets (131,699) – – (131,699)
Proceeds from disposal of plant and
equipment 460 – – 460
Proceeds from redemption of quoted
debt securities 5,125,468 (3,625,166) – 1,500,302
Purchase of available-for-sale
quoted debt securities (2,065,906) 2,065,906 – –
Disposal of discontinued operation,
net of cash disposed of (2,257,709) – – (2,257,709)
Net cash used in investing
activities (174,079) (1,548,128) – (1,722,207)
Cash flows from financing
activities
Dividends paid to owners of the
Company (3,358,575) – (10,918,319) (14,276,894)
Proceeds from exercise of share
options 365,988 – – 365,988
Repayment of unsecured bank loan (748,189) – – (748,189)
Net cash used in financing
activities (3,740,776) – (10,918,319) (14,659,095)
Net increase/(decrease) in cash
and cash equivalents 3,210,747 (19,457) (10,918,319) (7,727,029)
Cash and cash equivalents at
1 January 13,516,229 24,464 – 13,540,693
Effect of exchange rate fluctuations
on cash held (8,067) (5,007) – (13,074)
Cash and cash equivalents at
31 December 5 16,718,909 – (10,918,319) 5,800,590
APPENDIX C – UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL
INFORMATION FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2013
AND THE NINE MONTHS ENDED 30 SEPTEMBER 2014
C-21
Statement of adjustments for the unaudited pro forma consolidated statement of cash
flows of the pro forma group
Nine months ended 30 September 2014
Note
Unaudited
Consolidated
Statement of
Cash Flows
Pro Forma Adjustment
Unaudited
Pro Forma
Consolidated
Statement of
Cash Flows Note 3.4(ii) Note 3.4(iii)
$ $ $ $
Cash flows from operating
activities
Profit for the period 7,577,203 – – 7,577,203
Adjustments for:
Depreciation of plant and equipment 579,825 – – 579,825
Gain on disposal of plant and
equipment (39) – – (39)
Amortisation of intangible assets 143,920 – – 143,920
Impairment losses on trade
receivable, net 2,818 – – 2,818
Bad debt written off 35,452 – – 35,452
Equity settled share-based payment
transactions 248,016 – – 248,016
Dividend income on available-for-
sale quoted debt securities, net (16,753) – – (16,753)
Gain on redemption of quoted debt
securities (99,464) – – (99,464)
Share of result of associate (382) – – (382)
Dividend income on investment in
associate (3,727) – – (3,727)
Unrealised exchange loss, net 35,409 – – 35,409
Finance income (73,980) – – (73,980)
Tax expense 380,566 – – 380,566
8,808,864 – – 8,808,864
Change in trade and other
receivables (1,516,664) – – (1,516,664)
Change in trade and other payables 306,124 – – 306,124
Cash generated from operations 7,598,324 – – 7,598,324
Taxes paid (536,238) – – (536,238)
Interest received 73,980 – – 73,980
Net cash from operating activities 7,136,066 – – 7,136,066
APPENDIX C – UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL
INFORMATION FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2013
AND THE NINE MONTHS ENDED 30 SEPTEMBER 2014
C-22
Statement of adjustments for the unaudited pro forma consolidated statement of cash
flows of the pro forma group (cont’d)
Nine months ended 30 September 2014
Note
Unaudited
Consolidated
Statement of
Cash Flows
Pro Forma Adjustment
Unaudited
Pro Forma
Consolidated
Statement of
Cash Flows Note 3.4(i) Note 3.4(ii)
$ $ $ $
Cash flows from investing
activities
Purchase of plant and equipment (670,191) – – (670,191)
Purchase of intangible assets (995,730) – – (995,730)
Proceeds from disposal of plant and
equipment 39 – – 39
Acquisition of associate (400,157) – – (400,157)
Proceeds from redemption of quoted
debt securities 3,302,844 – – 3,302,844
Purchase of available-for-sale
quoted debt securities (3,000,000) – – (3,000,000)
Net cash used in investing
activities (1,763,195) – – (1,763,195)
Cash flows from financing
activities
Dividends paid to owners of the
Company (4,104,141) – 4,104,141 –
Proceeds from exercise of share
options 709,243 – – 709,243
Payment of acquisition of additional
interest in subsidiaries (3,539,098) – – (3,539,098)
Net cash used in financing
activities (6,933,996) – 4,104,141 (2,829,855)
Net (decrease)/increase in cash
and cash equivalents (1,561,125) – 4,104,141 2,543,016
Cash and cash equivalents at
1 January 16,718,909 – (10,918,319) 5,800,590
Effect of exchange rate fluctuations
on cash held 27,430 – – 27,430
Cash and cash equivalents at
30 September 5 15,185,214 – (6,814,178) 8,371,036
APPENDIX C – UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL
INFORMATION FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2013
AND THE NINE MONTHS ENDED 30 SEPTEMBER 2014
C-23
5 Cash and cash equivalents
31 December
2013
30 September
2014
$ $
Cash at bank and in hand 5,374,204 8,334,769
Money market funds 426,386 36,267
Cash and cash equivalents in the
statements of cash flows 5,800,590 8,371,036
The money market funds are included as cash and cash equivalents as they are considered
fully liquid investments readily convertible into known amount of cash and cash equivalents
which are subject to an insignificant risk of changes in value.
6 Revenue
Year ended
31 December
2013
Nine months ended
30 September
2014
$ $
Commission and fee income 67,026,255 56,638,292
Service fees 1,993,916 1,451,130
Advertising fees 500,703 266,596
Others 117,999 238,943
69,638,873 58,594,961
7 Loss from discontinued operation, net of tax
Year ended
31 December
2013
Nine months ended
30 September
2014
$ $
Gain on realisation of intangible assets 81,895 –
Translation reserve realised, loss (2,849,138) –
Fair value reserve realised, gain 250,430 –
(2,516,813) –
APPENDIX C – UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL
INFORMATION FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2013
AND THE NINE MONTHS ENDED 30 SEPTEMBER 2014
C-24
8 Profit for the year/period
The following items have been included in arriving at profit for the year/period:
Year ended
31 December
2013
Nine months ended
30 September
2014
$ $
Interest income
– from cash at bank (3,088) (40,353)
– from trust accounts (11,960) (20,202)
– from money market funds (24,058) (6,746)
– from loans and receivables (422) (6,679)
Impairment losses on trade
receivables, net 7,857 2,818
Unrealised exchange (gain)/loss, net (27,187) 35,409
Value of employee services received for
issue of share options, included
in staff costs 62,302 248,015
Contributions to defined contribution
plans, included in staff costs 1,020,636 819,424
Operating lease expense 3,988,787 3,024,351
Net change in fair value of available-for-
sale financial assets reclassified from
equity (76,402) (99,464)
9 Earnings per share from continuing operations
Basic earnings per share
Year ended
31 December
2013
Nine months ended
30 September
2014
$ $
Basic earnings per share is based on:
Net profit attributable to ordinary
shareholders 8,643,147 7,614,892
APPENDIX C – UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL
INFORMATION FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2013
AND THE NINE MONTHS ENDED 30 SEPTEMBER 2014
C-25
31 December
2013
31 December
2013
30 September
2014
No. of shares
As previously
reported
No. of shares
As restated*
No. of shares
Issued ordinary shares at
beginning of
the year/period 33,573,654 201,441,924 202,776,414
Effect of share options exercised
(Share Option Scheme) 101,534 609,204 522,426
Weighted average number of
ordinary shares at the end of the
year/period 33,675,188 202,051,128 203,298,840
Basic earnings per share (cents) 25.6 4.3 3.8
* adjusted for sub-division of every 1 ordinary share into 6 ordinary shares as completed by the Company on 20
November 2014
Diluted earnings per share
For the purpose of calculating the diluted earnings per ordinary share, the weighted average
number of ordinary shares in issue is adjusted to take into account the dilutive effect arising
from the dilutive share options under the Share Option Scheme, with the potential ordinary
shares weighted for the period outstanding.
Year ended
31 December
2013
Nine months ended
30 September
2014
$ $
Diluted earnings per share is based on:
Net profit attributable to ordinary
shareholders 8,643,147 7,614,892
APPENDIX C – UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL
INFORMATION FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2013
AND THE NINE MONTHS ENDED 30 SEPTEMBER 2014
C-26
The effect of the exercise of share options on the weighted average number of ordinary
shares in issue is as follows:
Year ended
31 December
2013
31 December
2013
Nine months
ended 30
September
2014
No. of shares
As previously
reported
No. of shares
As restated*
No. of shares
Weighted average number of:
Ordinary shares used in the
calculation of basic earnings per
share 33,675,188 202,051,128 203,298,840
Potential ordinary shares issuable
under:
– share options (Share Option
Scheme) 862,382 5,174,292 5,145,234
Weighted average number of
ordinary shares issued and
potential shares issuable
assuming full conversion at the
end of the year/period 34,537,570 207,225,420 208,444,074
Diluted earnings per share (cents) 25.0 4.2 3.7
* adjusted for sub-division of every 1 ordinary share into 6 ordinary shares as completed by the Company on 20
November 2014
Options to purchase 7,000 shares at $1.96 per share (2013: 22,800 shares at $1.96 per
share) issued in April 2007, and 117,400 shares at $2.40 per share (2013: 179,900 shares
at $2.40 per share) issued in July 2010, 781,814 shares at $3.60 per share (2013: Nil) issued
in April 2014 and 70,000 shares at $3.80 per share (2013: Nil) issued in August 2014 were
outstanding during the reporting period but not included in the computation of diluted
earnings per share for the corresponding period because these options were anti-dilutive.
The options, which expire on 31 March 2017, 30 June 2020, 31 March 2024 and 20 August
2024 respectively, are still outstanding as at 30 September 2014.
APPENDIX C – UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL
INFORMATION FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2013
AND THE NINE MONTHS ENDED 30 SEPTEMBER 2014
C-27
This page has been intentionally left blank.
The discussion below provides information about certain provisions of our Memorandum and
Articles of Association and the laws of Singapore. This description is only a summary and is
qualified by reference to Singapore law and our Articles.
The instruments that constitute and define our Company are the Memorandum and Articles of
Association of our Company.
REGISTRATION NUMBER
We are registered with the Accounting and Corporate Regulatory Authority (ACRA) under the
registration number 200007899C.
SUMMARY OF OUR ARTICLES OF ASSOCIATION
Directors
(a) Ability of interested directors to vote
Article 100
A Director shall not vote in respect of any contract or arrangement or any other proposal
whatsoever in which he has any personal material interest, directly or indirectly. A Director
shall not be counted in the quorum at a meeting in relation to any resolution on which he is
debarred from voting.
(b) Remuneration
Article 77
The ordinary remuneration of the Directors, which shall from time to time be determined by
an Ordinary Resolution of the Company, shall not be increased except pursuant to an
Ordinary Resolution passed at a General Meeting where notice of the proposed increase
shall have been given in the notice convening the General Meeting and shall (unless such
resolution otherwise provides) be divisible among the Directors as they may agree, or failing
agreement, equally, except that any Director who shall hold office for part only of the period
in respect of which such remuneration is payable shall be entitled only to rank in such
division for a proportion of remuneration related to the period during which he has held office.
Article 78
Any Director who holds any executive office, or who serves on any committee of the
Directors, or who otherwise performs services which in the opinion of the Directors are
outside the scope of the ordinary duties of a Director, may be paid such extra remuneration
by way of salary, commission or otherwise as the Directors may determine, provided that
such extra remuneration (in case of an executive Director) shall not be by way of commission
on or a percentage of turnover and (in the case of a non-executive Director) shall be a fixed
sum, and not by a commission on or a percentage of profits or turnover.
APPENDIX D – SUMMARY OF OUR ARTICLES OF ASSOCIATION
D-1
Article 79
The Directors may repay to any Director all such reasonable expenses as he may incur in
attending and returning from meetings of the Directors or of any committee of the Directors
or General Meetings or otherwise in or about the business of the Company.
Article 80
The Directors shall have power to pay and agree to pay pensions or other retirement,
superannuation, death or disability benefits to (or to any person in respect of) any Director
for the time being holding any executive office and for the purpose of providing any such
pensions or other benefits to contribute to any scheme or fund or to pay premiums.
(c) Borrowing
Article 108
Subject as hereinafter provided and to the provisions of the Statutes, the Directors may
exercise all the powers of the Company to borrow money, to mortgage or charge its
undertaking, property and uncalled capital and to issue debentures and other securities,
whether outright or as collateral security for any debt, liability or obligation of the Company
or of any third party.
(d) Retirement Age Limit
Article 89
At each Annual General Meeting, one-third of the Directors for the time being (or, if their
number is not a multiple of three (3), the number nearest to but not less than one-third) shall
retire from office by rotation, provided that no Director holding office as Managing Director
shall be subject to retirement by rotation or be taken into account in determining the number
of Directors to retire. For the avoidance of doubt, each Director (other than a Director holding
office as Managing Director) shall retire at least once every three (3) years.
Article 90
The Directors to retire by rotation shall include (so far as necessary to obtain the number
required) any Director who is due to retire at a General Meeting by reason of age or who
wishes to retire and not to offer himself for re-election. Any further Directors so to retire shall
be those of the other Directors subject to retirement by rotation who have been longest in
office since their last re-election or appointment and so that as between persons who
became or were last re-elected Directors on the same day, those to retire shall (unless they
otherwise agree among themselves) be determined by ballot. A retiring Director shall be
eligible for re-election.
APPENDIX D – SUMMARY OF OUR ARTICLES OF ASSOCIATION
D-2
Article 91
The Company at any General Meeting at which a Director retires under any provision of
these Articles may by Ordinary Resolution fill the office being vacated by electing thereto the
retiring Director or some other person eligible for appointment. In default, the retiring Director
shall be deemed to have been re-elected except in any of the following cases:–
(a) where at such meeting it is expressly resolved not to fill such office or a resolution for
the re-election of such Director is put to the meeting and lost; or
(b) where such Director has given notice in writing to the Company that he is unwilling to
be re-elected; or
(c) where the default is due to the moving of a resolution in contravention of the next
following Article; or
(d) where such Director has attained any retiring age applicable to him as Director.
The retirement shall not have effect until the conclusion of the meeting except where a
resolution is passed to elect some other person in the place of the retiring Director or a
resolution for his re-election is put to the meeting and lost and accordingly a retiring Director
who is re-elected or deemed to have been re-elected will continue in office without a break.
Article 92
A resolution for the appointment of two (2) or more persons as Directors by a single
resolution shall not be moved at any General Meeting unless a resolution that it shall be so
moved has first been agreed to by the meeting without any vote being given against it, and
any resolution moved in contravention of this provision shall be void.
(e) Shareholding Qualification
Article 76
A Director shall not be required to hold any shares of the Company by way of qualification.
A Director who is not a Member of the Company shall nevertheless be entitled to receive
notice of and to attend and speak at General Meetings.
Share Rights and Restrictions
(a) Rights, preferences and restrictions attaching to each class of shares
Article 3
(A) Subject to the Act and to these Articles, no shares may be issued by the Directors
without the prior approval of the Company in General Meeting pursuant to Section 161
of the Act, but subject thereto and the terms of such approval, and to Article 5, and to
any special rights attached to any shares for the time being issued, the Directors may
allot and issue shares or grant options over or otherwise dispose of the same to such
persons on such terms and conditions and for such consideration and at such time and
whether or not subject to the payment of any part of the amount thereof in cash or
otherwise as the Directors may think fit, and any shares may, subject to compliance with
APPENDIX D – SUMMARY OF OUR ARTICLES OF ASSOCIATION
D-3
Sections 70 and 75 of the Act, be issued with such preferential, deferred, qualified or
special rights, privileges, conditions or restrictions, whether as regards Dividend, return
of capital, participation in surplus assets and profits, voting, conversion or otherwise, as
the Directors may think fit, and preference shares may be issued which are or at the
option of the Company are liable to be redeemed, the terms and manner of redemption
being determined by the Directors in accordance with the Act, provided always that no
options shall be granted over unissued shares except in accordance with the Act and
the Designated Stock Exchange’s listing rules. The rights attached to any such shares
issued upon special conditions shall be clearly defined in these Articles.
(B) The Directors may, at any time after the allotment of any share but before any person
has been entered in the Register of Members as the holder, recognise a renunciation
thereof by the allottee in favour of some other person and may accord to any allottee
of a share a right to effect such renunciation upon and subject to such terms and
conditions as the Directors may think fit to impose.
(C) Except so far as otherwise provided by the conditions of issue or by these Articles, all
new shares shall be issued subject to the provisions of the Statutes and of these Articles
with reference to allotment, payment of calls, lien, transfer, transmission, forfeiture or
otherwise.
Article 8
(A) Preference shares may be issued subject to such limitation thereof as may be
prescribed by the Designated Stock Exchange. In particular, the total number of issued
preference shares shall not exceed the total number of issued ordinary shares issued
at any time. Preference shareholders shall have the same rights as ordinary
shareholders as regards receiving notices, reports and balance-sheets and attending
General Meetings of the Company, and preference shareholders shall also have the
right to vote at any General Meeting convened for the purpose of reducing capital or
winding-up or sanctioning a sale of the undertaking of the Company or where the
proposal to be submitted to the General Meeting directly affects their rights and
privileges or when the Dividend on the preference shares is in arrear for more than six
(6) months.
(B) The Company has power to issue further preference capital ranking equally with, or in
priority to, preference shares already issued.
Article 9
(A) Whenever the share capital of the Company is divided into different classes of shares,
the variation or abrogation of the special rights attached to any class may, subject to the
provisions of the Act, only be made either with the consent in writing of the holders of
three-quarters of the total voting rights of all the shares of the class or with the sanction
of a Special Resolution passed at a separate General Meeting of the holders of the
shares of the class (but not otherwise) and may be so made either whilst the Company
is a going concern or during or in contemplation of a winding-up. To every such separate
General Meeting all the provisions of these Articles relating to General Meetings of the
Company and to the proceedings thereat shall mutatis mutandis apply, except that the
necessary quorum shall be two (2) or more persons holding at least one-third of the total
voting rights of all the shares of the class present in person or by proxy or attorney and
that any holder of shares of the class present in person or by proxy or attorney may
APPENDIX D – SUMMARY OF OUR ARTICLES OF ASSOCIATION
D-4
demand a poll and that every such holder shall on a poll have one (1) vote for every
share of the class held by him where the class is a class of equity shares within the
meaning of Section 64(1) of the Act or at least one (1) vote for every share of the class
where the class is a class of preference shares within the meaning of Section 180(2) of
the Act, provided always that where the necessary majority for such a Special
Resolution is not obtained at such General Meeting, the consent in writing, if obtained
from the holders of three-quarters of the total voting rights of all the shares of the class
concerned within two (2) months of such General Meeting, shall be as valid and
effectual as a Special Resolution carried at such General Meeting.
(B) The provisions in Article 9(A) shall mutatis mutandis apply to any repayment of
preference capital (other than redeemable preference capital) and any variation or
abrogation of the rights attached to preference shares or any class thereof.
(C) The special rights attached to any class of shares having preferential rights shall not
unless otherwise expressly provided by the terms of issue thereof be deemed to be
varied by the creation or issue of further shares ranking as regards participation in the
profits or assets of the Company in some or all respects pari passu therewith but in no
respect in priority thereto.
Article 14
Every person whose name is entered as a Member in the Register of Members shall be
entitled, within ten market days (or such period as the Directors may determine having regard
to any limitation thereof as may be prescribed by the Designated Stock Exchange from time
to time) after the closing date of any application for shares or (as the case may be) the date
of lodgement of a registrable transfer to receive one (1) certificate for all his shares of any
one (1) class or to several certificates in reasonable denominations each for a part of the
shares so allotted or transferred.
Article 41
A reference to a Member shall be a reference to a registered holder of shares in the
Company, or where such registered holder is CDP, the Depositors on behalf of whom CDP
holds the shares, provided that:–
(a) a Depositor shall only be entitled to attend any General Meeting and to speak and vote
thereat if his name appears on the Depository Register maintained by CDP forty-eight
(48) hours before the General Meeting as a Depositor on whose behalf CDP holds
shares in the Company, the Company being entitled to deem each such Depositor, or
each proxy of a Depositor who is to represent the entire balance standing to the
Securities Account of the Depositor, to represent such number of shares as is actually
credited to the Securities Account of the Depositor as at such time, according to the
records of CDP as supplied by CDP to the Company, and where a Depositor has
apportioned the balance standing to his Securities Account between two (2) proxies, to
apportion the said number of shares between the two (2) proxies in the same proportion
as previously specified by the Depositor in appointing the proxies; and accordingly no
instrument appointing a proxy of a Depositor shall be rendered invalid merely by reason
of any discrepancy between the proportion of Depositor’s shareholding specified in the
instrument of proxy, or where the balance standing to a Depositor’s Securities Account
has been apportioned between two (2) proxies the aggregate of the proportions of the
APPENDIX D – SUMMARY OF OUR ARTICLES OF ASSOCIATION
D-5
Depositor’s shareholding they are specified to represent, and the true balance standing
to the Securities Account of a Depositor as at the time of the General Meeting, if the
instrument is dealt with in such manner as is provided above;
(b) the payment by the Company to CDP of any Dividend payable to a Depositor shall to
the extent of the payment discharge the Company from any further liability in respect of
the payment;
(c) the delivery by the Company to CDP of provisional allotments or share certificates in
respect of the aggregate entitlements of Depositors to new shares offered by way of
rights issue or other preferential offering or bonus issue shall to the extent of the
delivery discharge the Company from any further liability to each such Depositor in
respect of his individual entitlement; and
(d) the provisions in these Articles relating to the transfers, transmissions or certification of
shares shall not apply to the transfer of book-entry securities (as defined in the
Statutes).
Article 42
Except as required by the Statutes or law, no person shall be recognised by the Company as
holding any share upon any trust, and the Company shall not be bound by or compelled in
any way to recognise (even when having notice thereof) any equitable, contingent, future or
partial interest in any share, or any interest in any fractional part of a share, or (except only
as by these Articles or by the Statutes or law otherwise provided) any other right in respect
of any share, except an absolute right to the entirety thereof in the registered holder and
nothing in these Articles contained relating to CDP or to Depositors or in any depository
agreement made by the Company with any common depository for shares shall in any
circumstances be deemed to limit, restrict or qualify the above.
Article 63
In the case of joint holders of a share, any one (1) of such persons shall be entitled to vote,
but if more than one (1) of such persons is present at a meeting, the vote of the senior who
tenders a vote, whether in person or by proxy, shall be accepted to the exclusion of the votes
of the other joint holders and for this purpose seniority shall be determined by the name
which stands first in the Register of Members or, as the case may be, the order in which the
names appear in the Depository Register in respect of the joint holding.
Article 64
Where in Singapore or elsewhere a receiver or other person (by whatever name called) has
been appointed by any court claiming jurisdiction in that behalf to exercise powers with
respect to the property or affairs of any Member on the ground (however formulated) of
mental disorder, the Directors may in their absolute discretion, upon or subject to production
of such evidence of the appointment as the Directors may require, permit such receiver or
other person on behalf of such Member, to vote in person or by proxy at any General
Meeting, or to exercise any other right conferred by Membership in relation to meetings of the
Company.
APPENDIX D – SUMMARY OF OUR ARTICLES OF ASSOCIATION
D-6
Article 65
No Member shall be entitled in respect of shares held by him to vote at a General Meeting
either personally or by proxy or to exercise any other right conferred by Membership in
relation to General Meetings if any call or other sum payable by him to the Company in
respect of such shares remains unpaid. Conversely, a Member shall be entitled to be
present, and to vote in respect of shares held by him, at a General Meeting either personally
or by proxy or to exercise any other right conferred by membership in relation to General
Meetings if all call or other sums payable by him to the Company in respect of such shares
have been paid.
(b) Change in Capital
Article 10
The Company may by Ordinary Resolution:–
(a) consolidate and divide all or any of its share capital;
(b) sub-divide its shares, or any of them, provided always that in such subdivision the
proportion between the amount paid and the amount (if any) unpaid on each reduced
share shall be same as it was in the case of the share from which the reduced share is
derived;
(c) convert or exchange any class of shares into or for any other class of shares; and/or
(d) cancel the number of any shares which, at the date of the passing of the resolution in
that behalf have not been taken or agreed to be taken by any person or which have
been forfeited and diminish the amount of its share capital by the number of the shares
so cancelled.
Article 11
(A) The Company may reduce its share capital or any other undistributable reserve in any
manner permitted, and with, and subject to, any incident authorised, and consent or
confirmation required, by law.
(B) The Company may purchase or otherwise acquire its issued shares subject to and in
accordance with the provisions of the Statutes and any applicable rules of the
Designated Stock Exchange (hereafter, the “Relevant Laws”), on such terms and
subject to such conditions as the Company may in General Meeting prescribe in
accordance with the Relevant Laws. Any shares purchased or acquired by the Company
as aforesaid shall, unless held in treasury in accordance with the Act, be deemed to be
cancelled immediately on purchase or acquisition by the Company. On the cancellation
of any share as aforesaid, the rights and privileges attached to that share shall expire.
In any other instance, the Company may hold or deal with any such share which is so
purchased or acquired by it in such manner as may be permitted by, and in accordance
with the Relevant Laws. Without prejudice to the generality of the foregoing, upon
cancellation of any share purchased or otherwise acquired by the Company pursuant to
these Articles and the Statutes, the number of issued shares of the Company shall be
diminished by the number of shares so cancelled, and, where any such cancelled share
was purchased or acquired out of the capital of the Company, the amount of share
capital of the Company shall be reduced accordingly.
APPENDIX D – SUMMARY OF OUR ARTICLES OF ASSOCIATION
D-7
(c) Change in the Respective Rights of the Various Classes of Shares
Article 9
(A) Whenever the share capital of the Company is divided into different classes of shares,
the variation or abrogation of the special rights attached to any class may, subject to the
provisions of the Act, only be made either with the consent in writing of the holders of
three-quarters of the total voting rights of all the shares of the class or with the sanction
of a Special Resolution passed at a separate General Meeting of the holders of the
shares of the class (but not otherwise) and may be so made either whilst the Company
is a going concern or during or in contemplation of a winding-up. To every such separate
General Meeting all the provisions of these Articles relating to General Meetings of the
Company and to the proceedings thereat shall mutatis mutandis apply, except that the
necessary quorum shall be two (2) or more persons holding at least one-third of the total
voting rights of all the shares of the class present in person or by proxy or attorney and
that any holder of shares of the class present in person or by proxy or attorney may
demand a poll and that every such holder shall on a poll have one (1) vote for every
share of the class held by him where the class is a class of equity shares within the
meaning of Section 64(1) of the Act or at least one (1) vote for every share of the class
where the class is a class of preference shares within the meaning of Section 180(2) of
the Act, provided always that where the necessary majority for such a Special
Resolution is not obtained at such General Meeting, the consent in writing, if obtained
from the holders of three-quarters of the total voting rights of all the shares of the class
concerned within two (2) months of such General Meeting, shall be as valid and
effectual as a Special Resolution carried at such General Meeting.
(B) The provisions in Article 9(A) shall mutatis mutandis apply to any repayment of
preference capital (other than redeemable preference capital) and any variation or
abrogation of the rights attached to preference shares or any class thereof.
(C) The special rights attached to any class of shares having preferential rights shall not
unless otherwise expressly provided by the terms of issue thereof be deemed to be
varied by the creation or issue of further shares ranking as regards participation in the
profits or assets of the Company in some or all respects pari passu therewith but in no
respect in priority thereto.
(d) Dividends and Distribution
Article 123
The Company may by Ordinary Resolution declare Dividends but no such Dividend shall
exceed the amount recommended by the Directors.
Article 124
If and so far as in the opinion of the Directors, the profits of the Company justify such
payments, the Directors may declare and pay the fixed Dividends on any class of shares
carrying a fixed Dividend expressed to be payable on fixed dates on the half-yearly or other
dates prescribed for the payment thereof and may also from time to time declare and pay
interim Dividends on shares of any class of such amounts and on such dates and in respect
of such periods as they think fit.
APPENDIX D – SUMMARY OF OUR ARTICLES OF ASSOCIATION
D-8
Article 125
Subject to any rights or restrictions attached to any shares or class of shares and except as
otherwise permitted under the Act:–
(a) all Dividends in respect of shares must be paid in proportion to the number of shares
held by a Member, but where shares are partly paid, all Dividends must be apportioned
and paid proportionately to the amounts paid or credited as paid on the partly paid
shares; and
(b) all Dividends must be apportioned and paid proportionately to the amounts so paid or
credited as paid during any portion or portions of the period in respect of which the
Dividend is paid.
For the purposes of this Article, an amount paid or credited as paid on a share in advance
of a call is to be ignored.
Article 126
(A) No Dividend shall be paid otherwise than out of profits available for distribution under
the provisions of the Statutes. The payment by the Directors of any unclaimed dividends
or other moneys payable on or in respect of a share into a separate account shall not
constitute the Company a trustee in respect thereof. All Dividends remaining unclaimed
after one (1) year from having been first payable may be invested or otherwise made
use of by the Directors for the benefit of the Company, and any Dividend or any such
moneys unclaimed after six (6) years from having been first payable shall be forfeited
and shall revert to the Company provided always that the 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 CDP returns any such
Dividend or moneys to the Company, the relevant Depositor shall not have any right or
claim in respect of such Dividend or moneys against the 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.
(B) A payment by the Company to CDP of any Dividend or other moneys payable to a
Depositor shall, to the extent of the payment made, discharge the Company from any
liability to the Depositor in respect of that payment.
Article 127
No Dividend or other monies payable on or in respect of a share shall bear interest as against
the Company.
Article 128
(A) The Directors may retain any Dividend or other monies payable on or in respect of a
share on which the 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.
(B) The Directors may retain the Dividends payable upon shares in respect of which any
person is under the provisions as to the transmission of shares hereinbefore contained
entitled to become a Member, or which any person is under those provisions entitled to
transfer, until such person shall become a Member in respect of such shares or shall
transfer the same.
APPENDIX D – SUMMARY OF OUR ARTICLES OF ASSOCIATION
D-9
Article 129
The waiver in whole or in part of any Dividend on any share by any document (whether or not
under seal) shall be effective only if such document is signed by the Member (or the person
entitled to the share in consequence of the death or bankruptcy of the holder) and delivered
to the Company and if or to the extent that the same is accepted as such or acted upon by
the Company.
Article 130
The Company may upon the recommendation of the Directors by Ordinary Resolution direct
payment of a Dividend in whole or in part by the distribution of specific assets (and in
particular of paid-up shares or debentures of any other company) and the Directors shall give
effect to such resolution. Where any difficulty arises with regard to such distribution, the
Directors may settle the same as they think expedient and in particular, may issue fractional
certificates, may fix the value for distribution of such specific assets or any part thereof, may
determine that cash payments shall be made to any Member upon the footing of the value
so fixed in order to adjust the rights of all parties and may vest any such specific assets in
trustees as may seem expedient to the Directors.
Article 131
Any Dividend or other monies payable in cash on or in respect of a share may be paid by
cheque or warrant sent through the post to the registered address appearing in the Register
of Members or (as the case may be) the Depository Register of the Member or person
entitled thereto (or, if two (2) or more persons are registered in the Register of Members or
(as the case may be) entered in the Depository Register as joint holders of the share or are
entitled thereto in consequence of the death or bankruptcy of the holder, to any one (1) of
such persons) or to such person and such address as such Member or person or persons
may by writing direct.
Every such cheque or warrant shall be made payable to the order of the person to whom it
is sent or to such person as the holder or joint holders or person or persons entitled to the
share in consequence of the death or bankruptcy of the holder may direct and payment of the
cheque or warrant by the banker upon whom it is drawn shall be a good discharge to the
Company. Every such cheque or warrant shall be sent at the risk of the person entitled to the
money represented thereby.
Article 132
If two (2) or more persons are registered in the Register of Members or (as the case may be)
the Depository Register as joint holders of any share, or are entitled jointly to a share in
consequence of the death or bankruptcy of the holder, any one (1) of them may give effectual
receipts for any Dividend or other moneys payable or property distributable on or in respect
of the share.
APPENDIX D – SUMMARY OF OUR ARTICLES OF ASSOCIATION
D-10
(e) Limitation on the Right to Own Shares
Article 5
(A) Subject to any direction to the contrary that may be given by the Company in General
Meeting or except as permitted by the rules of the Designated Stock Exchange, all new
shares shall, before issue, be offered to such persons who as at the date of the offer are
entitled to receive notices from the Company of General Meetings in proportion, as far
as the circumstances admit, to the number of the existing shares to which they are
entitled. The offer shall be made by notice specifying the number of shares offered, and
limiting a time within which the offer, if not accepted, will be deemed to be declined, and,
after the expiration of the aforesaid time or on the receipt of an intimation from the
person to whom the offer is made that he declines to accept the shares offered, the
Directors may dispose of those shares in such manner as they think most beneficial to
the Company. The Directors may likewise dispose of any new shares which (by reason
of the ratio which the new shares bear to shares held by persons entitled to an offer of
new shares) cannot, in the opinion of the Directors, be conveniently offered under this
Article 5(A).
(B) Notwithstanding Article 5(A) above, the Company may by Ordinary Resolution in
General Meeting give to the Directors a general authority, either unconditionally or
subject to such conditions as may be specified in the Ordinary Resolution, to:–
(a) (i) issue shares in the capital of the Company (“shares”) whether by way of
rights, bonus or otherwise; and/or
(ii) make or grant offers, agreements or options (collectively, “Instruments”) that
might or would require shares to be issued, including but not limited to the
creation and issue of (as well as adjustments to) warrants, debentures or
other instruments convertible into shares; and
(b) (notwithstanding the authority conferred by the Ordinary Resolution may have
ceased to be in force) issue shares in pursuance of any Instrument made or
granted by the Directors while the Ordinary Resolution was in force,
provided that:–
(1) the aggregate number of shares to be issued pursuant to the Ordinary Resolution
(including shares to be issued in pursuance of Instruments made or granted
pursuant to the Ordinary Resolution) shall be subject to such limits and manner of
calculation as may be prescribed by the Designated Stock Exchange;
(2) in exercising the authority conferred by the Ordinary Resolution, the Company
shall comply with the provisions of the listing rules of the Designated Stock
Exchange for the time being in force (unless such compliance is waived by the
Designated Stock Exchange) and these Articles; and
(3) (unless revoked or varied by the Company in General Meeting) the authority
conferred by the Ordinary Resolution shall not continue in force beyond the
conclusion of the Annual General Meeting of the Company next following the
APPENDIX D – SUMMARY OF OUR ARTICLES OF ASSOCIATION
D-11
passing of the Ordinary Resolution, or the date by which such Annual General
Meeting of the Company is required by law to be held, or the expiration of such
other period as may be prescribed by the Act (whichever is the earliest).
(C) The Company may, notwithstanding Articles 5(A) and 5(B) above, authorise the
Directors not to offer new shares to Members to whom by reason of foreign securities
laws, such offers may not be made without registration of the shares or a prospectus or
other document, but to sell the entitlements to the new shares on behalf of such
Members on such terms and conditions as the Company may direct.
Article 34
(A) There shall be no restriction on the transfer of fully paid up shares (except where
required by law or by the rules, bye-laws or listing rules of the Designated Stock
Exchange) but the Directors may in their discretion decline to register any transfer of
shares upon which the Company has a lien, and in the case of shares not fully paid up,
may refuse to register a transfer to a transferee of whom they do not approve, provided
always that in the event of the Directors refusing to register a transfer of shares, the
Company shall within ten market days (or such period as the Directors may determine
having regard to any limitation thereof as may be prescribed by the Designated Stock
Exchange from time to time) after the date on which the application for a transfer of
shares was made, serve a notice in writing to the applicant stating the facts which are
considered to justify the refusal as required by the Statutes.
(B) The Directors may decline to register any instrument of transfer unless:–
(a) such fee not exceeding S$2.00 (or such other fee as the Directors may determine
having regard to any limitation thereof as may be prescribed by the Designated
Stock Exchange from time to time) as the Directors may from time to time require
is paid to the Company in respect thereof;
(b) the amount of proper duty (if any) with which each instrument of transfer is
chargeable under any law for the time being in force relating to stamps is paid;
(c) the instrument of transfer is deposited at the Office or at such other place (if any)
as the Directors may appoint accompanied by a certificate of payment of stamp
duty (if stamp duty is payable on such instrument of transfer in accordance with
any law for the time being in force relating to stamp duty), the certificates of the
shares to which it relates, and such other evidence as the Directors may
reasonably require to show the right of the transferor to make the transfer and, if
the instrument of transfer is executed by some other person on his behalf, the
authority of the person so to do; and
(d) the instrument of transfer is in respect of only one (1) class of shares.
Article 42
Except as required by the Statutes or law, no person shall be recognised by the Company as
holding any share upon any trust, and the Company shall not be bound by or compelled in
any way to recognise (even when having notice thereof) any equitable, contingent, future or
partial interest in any share, or any interest in any fractional part of a share, or (except only
as by these Articles or by the Statutes or law otherwise provided) any other right in respect
APPENDIX D – SUMMARY OF OUR ARTICLES OF ASSOCIATION
D-12
of any share, except an absolute right to the entirety thereof in the registered holder and
nothing in these Articles contained relating to CDP or to Depositors or in any depository
agreement made by the Company with any common depository for shares shall in any
circumstances be deemed to limit, restrict or qualify the above.
(f) Approval for the Issue of New Ordinary Shares
Article 5(B)
(B) Notwithstanding Article 5(A) above, the Company may by Ordinary Resolution in
General Meeting give to the Directors a general authority, either unconditionally or
subject to such conditions as may be specified in the Ordinary Resolution, to:–
(a) (i) issue shares in the capital of the Company (“shares”) whether by way of
rights, bonus or otherwise; and/or
(ii) make or grant offers, agreements or options (collectively, “Instruments”) that
might or would require shares to be issued, including but not limited to the
creation and issue of (as well as adjustments to) warrants, debentures or
other instruments convertible into shares; and
(b) (notwithstanding the authority conferred by the Ordinary Resolution may have
ceased to be in force) issue shares in pursuance of any Instrument made or
granted by the Directors while the Ordinary Resolution was in force,
provided that:–
(1) the aggregate number of shares to be issued pursuant to the Ordinary Resolution
(including shares to be issued in pursuance of Instruments made or granted pursuant
to the Ordinary Resolution) shall be subject to such limits and manner of calculation as
may be prescribed by the Designated Stock Exchange;
(2) in exercising the authority conferred by the Ordinary Resolution, the Company shall
comply with the provisions of the listing rules of the Designated Stock Exchange for the
time being in force (unless such compliance is waived by the Designated Stock
Exchange) and these Articles; and
(3) (unless revoked or varied by the Company in General Meeting) the authority conferred
by the Ordinary Resolution shall not continue in force beyond the conclusion of the
Annual General Meeting of the Company next following the passing of the Ordinary
Resolution, or the date by which such Annual General Meeting of the Company is
required by law to be held, or the expiration of such other period as may be prescribed
by the Act (whichever is the earliest).
(g) Registration and Recognition as Members of the Company
Article 32
All transfers of the legal title in shares shall be effected by the registered holders thereof by
transfer in writing in the form for the time being approved by the Directors and the Designated
Stock Exchange. The instrument of transfer of any share shall be signed by or on behalf of
both the transferor and the transferee and be witnessed, provided always that an instrument
APPENDIX D – SUMMARY OF OUR ARTICLES OF ASSOCIATION
D-13
of transfer in respect of which the transferee is the CDP shall be effective although not signed
or witnessed by or on behalf of the CDP. The transferor shall be deemed to remain the holder
of the shares concerned until the name of the transferee is entered in the Register of
Members in respect thereof.
Article 33
The Registers of Members and of Transfers may be closed at such times and for such
periods as the Directors may from time to time determine, provided always that such
Registers shall not be closed for more than thirty days in any year, and that the Company
shall give prior notice of each such closure, as may be required, to the Designated Stock
Exchange, stating the period and purpose or purposes for which such closure is made.
Article 42
Except as required by the Statutes or law, no person shall be recognised by the Company as
holding any share upon any trust, and the Company shall not be bound by or compelled in
any way to recognise (even when having notice thereof) any equitable, contingent, future or
partial interest in any share, or any interest in any fractional part of a share, or (except only
as by these Articles or by the Statutes or law otherwise provided) any other right in respect
of any share, except an absolute right to the entirety thereof in the registered holder and
nothing in these Articles contained relating to CDP or to Depositors or in any depository
agreement made by the Company with any common depository for shares shall in any
circumstances be deemed to limit, restrict or qualify the above.
Article 133
Any resolution declaring a Dividend on shares of any class, whether a resolution of the
Company in General Meeting or a resolution of the Directors, may specify that the same shall
be payable to the persons registered as the holders of such shares in the Register of
Members or (as the case may be) the Depository Register at the close of business on a
particular date and thereupon the Dividend shall be payable to them in accordance with their
respective holdings so registered, but without prejudice to the rights inter se in respect of
such Dividend of transferors and transferees of any such shares.
(h) Transfer of Ordinary Shares and Replacement of Share Certificates
Article 34
(A) There shall be no restriction on the transfer of fully paid up shares (except where
required by law or by the rules, bye-laws or listing rules of the Designated Stock
Exchange) but the Directors may in their discretion decline to register any transfer of
shares upon which the Company has a lien, and in the case of shares not fully paid up,
may refuse to register a transfer to a transferee of whom they do not approve, provided
always that in the event of the Directors refusing to register a transfer of shares, the
Company shall within ten market days (or such period as the Directors may determine
having regard to any limitation thereof as may be prescribed by the Designated Stock
Exchange from time to time) after the date on which the application for a transfer of
shares was made, serve a notice in writing to the applicant stating the facts which are
considered to justify the refusal as required by the Statutes.
APPENDIX D – SUMMARY OF OUR ARTICLES OF ASSOCIATION
D-14
(B) The Directors may decline to register any instrument of transfer unless:–
(a) such fee not exceeding S$2.00 (or such other fee as the Directors may determine
having regard to any limitation thereof as may be prescribed by the Designated
Stock Exchange from time to time) as the Directors may from time to time require
is paid to the Company in respect thereof;
(b) the amount of proper duty (if any) with which each instrument of transfer is
chargeable under any law for the time being in force relating to stamps is paid;
(c) the instrument of transfer is deposited at the Office or at such other place (if any)
as the Directors may appoint accompanied by a certificate of payment of stamp
duty (if stamp duty is payable on such instrument of transfer in accordance with
any law for the time being in force relating to stamp duty), the certificates of the
shares to which it relates, and such other evidence as the Directors may
reasonably require to show the right of the transferor to make the transfer and, if
the instrument of transfer is executed by some other person on his behalf, the
authority of the person so to do; and
(d) the instrument of transfer is in respect of only one (1) class of shares.
Article 16
Subject to the provisions of the Statutes, if any share certificate shall be defaced, worn out,
destroyed, lost or stolen, it may be renewed on such evidence being produced and a letter
of indemnity (if required) being given by the shareholder, transferee, person entitled,
purchaser, member company of the Designated Stock Exchange or on behalf of its or their
client or clients as the Directors shall require, and in the case of defacement or wearing out,
on delivery of the old certificate, and in any case on payment of such sum not exceeding
S$2.00 (or such other fee as the Directors may determine having regard to any limitation
thereof as may be prescribed by the Designated Stock Exchange from time to time) as the
Directors may from time to time require. In the case of destruction, loss or theft, a
shareholder or person entitled to whom such renewed certificate is given shall also bear the
loss and pay to the Company all expenses incidental to the investigations by the Company
of the evidence of such destruction or loss.
(i) General Meeting of Shareholders
Article 46
An Annual General Meeting shall be held once in every year, at such time (within a period of
not more than fifteen months after the holding of the last preceding Annual General Meeting)
and place as may be determined by the Directors. All other General Meetings shall be called
Extraordinary General Meetings. The interval between the close of a financial year of the
Company and the date of the Company’s Annual General Meeting shall not exceed four (4)
months or such other period as prescribed by the Act and the byelaws and listing rules of the
Designated Stock Exchange or other legislation applicable to the Company from time to time.
Article 47
The Directors may whenever they think fit, and shall on requisition in accordance with the
Statutes, proceed with proper expedition to convene an Extraordinary General Meeting.
APPENDIX D – SUMMARY OF OUR ARTICLES OF ASSOCIATION
D-15
Article 49
(A) Every notice calling a General Meeting shall specify the place, day and hour of the
meeting, and there shall appear with reasonable prominence in every such notice a
statement that a Member entitled to attend and vote is entitled to appoint a proxy to
attend and vote instead of him and that a proxy need not be a Member of the Company.
(B) In the case of an Annual General Meeting, the notice shall also specify the meeting as
such.
(C) In the case of any General Meeting at which business other than routine business
(“special business”) is to be transacted, the notice shall specify the general nature of
such business, and if any resolution is to be proposed as a Special Resolution, the
notice shall contain a statement to that effect.
Article 68
(A) A Member shall not be entitled to appoint more than two (2) proxies to attend and vote
at the same General Meeting, provided that if the Member is a Depositor, the Company
shall be entitled and bound:–
(a) to reject any instrument of proxy lodged if the Depositor, is not shown, to have any
shares entered against his name in the Depository Register as at 48 hours before
the time of the relevant General Meeting as certified by CDP to the Company; and
(b) to accept as the maximum number of votes which in aggregate the proxy or proxies
appointed by the Depositor is or are able to cast on a poll a number which is the
number of shares entered into against the name of that Depositor in the Depository
Register as at 48 hours before the time of the relevant General Meeting as certified
by CDP to the Company, whether that number is greater or smaller than the
number specified in any instrument of proxy executed by or on behalf of that
Depositor.
(B) Where a Member appoints more than one (1) proxy, the Member shall specify the
proportion of his shares to be represented by each such proxy, failing which the
nomination shall be deemed to be alternative.
(C) A proxy need not be a Member of the Company.
Article 53
No business other than the appointment of a Chairman shall be transacted at any General
Meeting unless a quorum is present at the time when the meeting proceeds to business.
Save as herein otherwise provided, the quorum at any General Meeting shall be two (2)
Members present in person or by proxy, provided that (i) a proxy representing more than one
(1) Member shall only count as one (1) Member for purpose of determining if the quorum
aforesaid is present; and (ii) where a Member is represented by more than one (1) proxy,
such proxies of such Member shall only count as one (1) Member for purposes of determining
if the quorum aforesaid is present.
APPENDIX D – SUMMARY OF OUR ARTICLES OF ASSOCIATION
D-16
Article 58
At any General Meeting a resolution put to the vote of the meeting shall be decided on a show
of hands unless a poll is required by the listing rules of any Designated Stock Exchange upon
which the Company may be listed or (before or on the declaration of the result of the show
of hands) demanded by:–
(a) the chairman of the meeting; or
(b) not less than two (2) Members present in person or by proxy and entitled to vote; or
(c) any Member present in person or by proxy, or where such a member has appointed two
(2) proxies any one (1) of such proxies, or any number or combination of such Members
or proxies, holding or representing as the case may be not less than one-tenth of the
total voting rights of all the Members having the right to vote at the General Meeting; or
(d) any Member present in person or by proxy, or where such a Member has appointed two
(2) proxies any one (1) of such proxies, or any number or combination of such Members
or proxies, holding shares conferring a right to vote at the General Meeting, of which an
aggregate sum has been paid up equal to not less than 10 per cent. of the total sum paid
up on all the shares conferring that right,
provided always that no poll shall be demanded on the choice of the chairman of the meeting
or on a question of adjournment. A demand for a poll may be withdrawn only with the
approval of the meeting.
Article 146
If the Company shall be wound up (whether the liquidation is voluntary, under supervision,
or by the court) the liquidator may, with the authority of a Special Resolution, divide among
the Members in specie or in kind the whole or any part of the assets of the Company and
whether or not the assets shall consist of property of one (1) kind or shall consist of
properties of different kinds, and may for such purpose set such value as he deems fair upon
any one (1) or more class or classes of property and may determine how such division shall
be carried out as between the Members of different classes of Members. The Liquidator may,
with the like authority, vest any part of the assets in trustees upon such trusts for the benefit
of Members as the Liquidator with the like authority shall think fit, and the liquidation of the
Company may be closed and the Company dissolved, but so that no contributory shall be
compelled to accept any shares or other property in respect of which there is a liability.
Article 11
(A) The Company may reduce its share capital or any other undistributable reserve in any
manner permitted, and with, and subject to, any incident authorised, and consent or
confirmation required, by law.
(B) The Company may purchase or otherwise acquire its issued shares subject to and in
accordance with the provisions of the Statutes and any applicable rules of the
Designated Stock Exchange (hereafter, the “Relevant Laws”), on such terms and
subject to such conditions as the Company may in General Meeting prescribe in
accordance with the Relevant Laws. Any shares purchased or acquired by the Company
as aforesaid shall, unless held in treasury in accordance with the Act, be deemed to be
APPENDIX D – SUMMARY OF OUR ARTICLES OF ASSOCIATION
D-17
cancelled immediately on purchase or acquisition by the Company. On the cancellation
of any share as aforesaid, the rights and privileges attached to that share shall expire.
In any other instance, the Company may hold or deal with any such share which is so
purchased or acquired by it in such manner as may be permitted by, and in accordance
with the Relevant Laws. Without prejudice to the generality of the foregoing, upon
cancellation of any share purchased or otherwise acquired by the Company pursuant to
these Articles and the Statutes, the number of issued shares of the Company shall be
diminished by the number of shares so cancelled, and, where any such cancelled share
was purchased or acquired out of the capital of the Company, the amount of share
capital of the Company shall be reduced accordingly.
Article 48
Subject to the Statutes, any General Meeting at which it is proposed to pass a Special
Resolution, shall be called by twenty-one days’ notice in writing at the least. An Annual
General Meeting or any other Extraordinary General Meeting shall be called by fourteen
days’ notice in writing at the least. The period of notice shall in each case be exclusive of the
day on which it is served or deemed to be served and of the day on which the General
Meeting is to be held and shall be given in manner hereinafter mentioned to all Members
other than those who are not under the provisions of these Articles entitled to receive such
notices from the Company, provided that a General Meeting which has been called by a
shorter notice than that specified above shall be deemed to have been duly called if it is so
agreed:–
(a) in the case of an Annual General Meeting by all the Members entitled to attend and vote
thereat; and
(b) in the case of an Extraordinary General Meeting by a majority in number of the Members
having a right to attend and vote thereat, being a majority together holding not less than
95 per cent. of the total voting rights of all the Members having a right to vote at that
meeting;
provided also that the accidental omission to give notice to or the non-receipt of notice by any
person entitled thereto shall not invalidate the proceedings at any General Meeting. At least
fourteen days’ notice of any General Meeting shall be given by advertisement in the daily
press and in writing to the Designated Stock Exchange, provided always that in the case of
any Extraordinary General Meeting at which it is proposed to pass a Special Resolution, at
least twenty-one days’ notice in writing of such Extraordinary General Meeting shall be given
to the Designated Stock Exchange.
Article 58
At any General Meeting a resolution put to the vote of the meeting shall be decided on a show
of hands unless a poll is required by the listing rules of any Designated Stock Exchange upon
which the Company may be listed or (before or on the declaration of the result of the show
of hands) demanded by:–
(a) the chairman of the meeting; or
(b) not less than two (2) Members present in person or by proxy and entitled to vote; or
APPENDIX D – SUMMARY OF OUR ARTICLES OF ASSOCIATION
D-18
(c) any Member present in person or by proxy, or where such a Member has appointed two
(2) proxies any one (1) of such proxies, or any number or combination of such Members
or proxies, holding or representing as the case may be not less than one-tenth of the
total voting rights of all the Members having the right to vote at the General Meeting; or
(d) any Member present in person or by proxy, or where such a Member has appointed two
(2) proxies any one (1) of such proxies, or any number or combination of such Members
or proxies, holding shares conferring a right to vote at the General Meeting, of which an
aggregate sum has been paid up equal to not less than 10 per cent. of the total sum paid
up on all the shares conferring that right,
provided always that no poll shall be demanded on the choice of the chairman of the meeting
or on a question of adjournment. A demand for a poll may be withdrawn only with the
approval of the meeting.
(j) Voting Rights
Article 62
Subject to any special rights or restrictions as to voting attached by or in accordance with
these Articles to any class of shares, and to Article 4, each Member entitled to vote may vote
in person or by proxy. On a show of hands every Member who is present in person or by
proxy shall have one (1) vote (provided that in the case of a Member who is represented by
two (2) proxies, only one (1) of the two (2) proxies as determined by that Member or, failing
such determination, by the Chairman of the General Meeting (or by a person authorised by
him) in his sole discretion shall be entitled to vote on a show of hands) and on a poll every
Member who is present in person or by proxy shall have one (1) vote for every share of which
he holds or represents. For the purposes of determining the number of votes which a
Member, being a Depositor, or his proxy may cast at any General Meeting on a poll, the
references to shares held or represented shall, in relation to shares of that Depositor, be the
number of shares entered against his name in the Depository Register as at 48 hours before
the time of the relevant General Meeting as certified by CDP to the Company. A Member who
is bankrupt shall not, while his bankruptcy continues, be entitled to exercise his rights as a
Member, or attend, vote or act at any General Meeting.
Article 49
(A) Every notice calling a General Meeting shall specify the place, day and hour of the
meeting, and there shall appear with reasonable prominence in every such notice a
statement that a Member entitled to attend and vote is entitled to appoint a proxy to
attend and vote instead of him and that a proxy need not be a Member of the Company.
(B) In the case of an Annual General Meeting, the notice shall also specify the meeting as
such.
(C) In the case of any General Meeting at which business other than routine business
(“special business”) is to be transacted, the notice shall specify the general nature of
such business, and if any resolution is to be proposed as a Special Resolution, the
notice shall contain a statement to that effect.
APPENDIX D – SUMMARY OF OUR ARTICLES OF ASSOCIATION
D-19
Article 68
(A) A Member shall not be entitled to appoint more than two (2) proxies to attend and vote
at the same General Meeting, provided that if the Member is a Depositor, the Company
shall be entitled and bound:–
(a) to reject any instrument of proxy lodged if the Depositor, is not shown, to have any
shares entered against his name in the Depository Register as at 48 hours before
the time of the relevant General Meeting as certified by CDP to the Company; and
(b) to accept as the maximum number of votes which in aggregate the proxy or proxies
appointed by the Depositor is or are able to cast on a poll a number which is the
number of shares entered into against the name of that Depositor in the Depository
Register as at 48 hours before the time of the relevant General Meeting as certified
by CDP to the Company, whether that number is greater or smaller than the
number specified in any instrument of proxy executed by or on behalf of that
Depositor.
(B) Where a Member appoints more than one (1) proxy, the Member shall specify the
proportion of his shares to be represented by each such proxy, failing which the
nomination shall be deemed to be alternative.
(C) A proxy need not be a Member of the Company.
Article 53
No business other than the appointment of a Chairman shall be transacted at any General
Meeting unless a quorum is present at the time when the meeting proceeds to business.
Save as herein otherwise provided, the quorum at any General Meeting shall be two (2)
Members, present in person or by proxy, provided that (i) a proxy representing more than one
(1) Member shall only count as one (1) Member for purpose of determining if the quorum
aforesaid is present; and (ii) where a Member is represented by more than one (1) proxy,
such proxies of such Member shall only count as one (1) Member for purposes of determining
if the quorum aforesaid is present.
Article 59
Unless a poll is required, a declaration by the chairman of the General Meeting that a
resolution has been carried, or carried unanimously, or by a particular majority, or lost, and
an entry to that effect in the minute book, shall be conclusive evidence of that fact without
proof of the number or proportion of the votes recorded for or against such resolution. If a poll
is required, it shall be taken in such manner (including the use of ballot or voting papers or
tickets) as the chairman of the General Meeting may direct, and the result of the poll shall
be deemed to be the resolution of the meeting at which the poll was demanded. The
chairman of the General Meeting may (and if so directed by the meeting shall) appoint
scrutineers and may adjourn the meeting to some place and time fixed by him for the purpose
of declaring the result of the poll.
APPENDIX D – SUMMARY OF OUR ARTICLES OF ASSOCIATION
D-20
Article 60
In the case of an equality of votes, whether on a show of hands or on a poll, the chairman
of the General Meeting at which the show of hands takes place or at which the poll is
demanded shall be entitled to a casting vote.
(k) Capitalisation and Rights Issue
Article 134
(A) The Directors may, with the sanction of an Ordinary Resolution of the Company
(including any Ordinary Resolution passed pursuant to Article 5(B)):
(a) issue bonus shares for which no consideration is payable to the Company to the
persons registered as holders of shares in the Register of Members or (as the case
may be) the Depository Register at the close of business on:
(i) the date of the Ordinary Resolution (or such other date as may be specified
therein or determined as therein provided); or
(ii) (in the case of an Ordinary Resolution passed pursuant to Article 5(B)) such
other date as may be determined by the Directors, in proportion to their then
holdings of shares; and/or
(b) capitalise any sum standing to the credit of any of the Company’s reserve
accounts or other undistributable reserve or any sum standing to the credit of profit
and loss account by appropriating such sum to the persons registered as holders
of shares in the Register of Members or (as the case may be) in the Depository
Register at the close of business on:
(i) the date of the Ordinary Resolution (or such other date as may be specified
therein or determined as therein provided); or
(ii) (in the case of an Ordinary Resolution passed pursuant to Article 5(B)) such
other date as may be determined by the Directors, in proportion to their then
holdings of shares and applying such sum on their behalf in paying up in full
unissued shares (or, subject to any special rights previously conferred on any
shares or class of shares for the time being issued, unissued shares of any
other class not being redeemable shares) for allotment and distribution
credited as fully paid up to and amongst them as bonus shares in the
proportion aforesaid.
(B) The Directors may do all acts and things considered necessary or expedient to give
effect to any such bonus issue or capitalisation under this Article 134, with full power to
the Directors to make such provisions as they think fit for any fractional entitlements
which would arise on the basis aforesaid (including provisions whereby fractional
entitlements are disregarded or the benefit thereof accrues to the Company rather than
to the Members concerned). The Directors may authorise any person to enter on behalf
of all the Members interested into an agreement with the Company providing for any
such bonus issue or capitalisation and matters incidental thereto and any agreement
made under such authority shall be effective and binding on all concerned.
APPENDIX D – SUMMARY OF OUR ARTICLES OF ASSOCIATION
D-21
(C) In addition and without prejudice to the powers provided for by this Article 134, the
Directors shall have power to issue shares for which no consideration is payable and to
capitalise any undivided profits or other moneys of the Company not required for the
payment or provision of any Dividend on any shares entitled to cumulative or
non-cumulative preferential Dividends (including profits or other moneys carried and
standing to any reserve or reserves) and to apply such profits or other moneys in paying
up in full, in each case on terms that such shares shall, upon issue, be held by or for
the benefit of participants of any share incentive or option scheme or plan implemented
by the Company and approved by Members in General Meeting and on such terms as
the Directors shall think fit.
(l) Indemnity
Article 147
Subject to the provisions of and so far as may be permitted by the Statutes, every Director,
Auditor, Secretary or other officer of the Company shall be entitled to be indemnified by the
Company against all costs, charges, losses, expenses and liabilities incurred by him in the
execution and discharge of his duties or in relation thereto including any liability by him in
defending any proceedings, civil or criminal, which relate to anything done or omitted or
alleged to have been done or omitted by him as an officer or employee of the Company and
in which judgment is given in his favour (or the proceedings otherwise disposed of without
any finding or admission of any material breach of duty on his part) or in which he is acquitted
or in connection with any application under any statute for relief from liability in respect of any
such act or omission in which relief is granted to him by the court unless the same shall
happen through his own negligence, fraud, wilful default, breach of fiduciary duties or breach
of trust. Without prejudice to the generality of the foregoing, no Director, Manager, Secretary
or other officer of the Company shall be liable for the acts, receipts, neglect or defaults of any
other Director or officer or for joining in any receipt or other act for conformity or for any loss
or expense happening to the Company through the insufficiency or deficiency of title to any
property acquired by order of the Directors for or on behalf of the Company or for the
insufficiency or deficiency of any security in or upon which any of the moneys of the Company
shall be invested or for any loss or damage arising from the bankruptcy, insolvency or
tortious act of any person with whom any moneys, securities or effects shall be deposited or
left or for any other loss, damage or misfortune whatsoever which shall happen in the
execution of the duties of his office or in relation thereto unless the same shall happen
through his own negligence, wilful default, breach of duty or breach of trust.
APPENDIX D – SUMMARY OF OUR ARTICLES OF ASSOCIATION
D-22
The following statements are brief summaries of the rights and privileges of shareholders
conferred by the laws of Singapore and the Articles of Association (the “Articles”) of our
Company. These statements summarise the material provisions of the Articles but are qualified in
entirety by reference to the Articles.
Ordinary Shares
We have only one (1) class of shares, namely, our ordinary shares which have identical rights in
all respects and rank equally with one (1) another. Our Articles of Association provide that we may
issue shares of a different class with preferential, deferred, qualified or special rights, privileges
or conditions as our Board of Directors may think fit, and may issue preference shares which are,
or at our option are, redeemable, subject to certain limitations. All of the ordinary shares are in
registered form. Our Company may, subject to the provisions of the Companies Act and the rules
of the SGX-ST, purchase its own ordinary shares. However, it may not, except in circumstances
permitted by the Companies Act, grant any financial assistance for the acquisition or proposed
acquisition of its own ordinary shares.
New Shares
New shares may only be issued with the prior approval in a general meeting of the shareholders
of the Company. The aggregate number of shares to be issued pursuant to a general authority
granted by our shareholders may not exceed 50% (or such other limit as may be prescribed by the
SGX-ST) of its 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 its Shareholders may not exceed 20% (or such other
limit as may be prescribed by the SGX-ST) of its issued share capital for the time being (the
percentage of issued share capital being based on its 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 its 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. Subject
to the foregoing, the provisions of the Companies Act and any special rights attached to any class
of shares currently issued, all new ordinary shares are under the control of the board of Directors
of the Company (the “Board of Directors”) 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 the 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 ordinary shares, are recognised as shareholders of the
Company. The Company will not, except as required by law, recognise any equitable, contingent,
future or partial interest in any ordinary share or other rights for any ordinary share other than the
absolute right thereto of the registered holder of that ordinary share or of the person whose name
is entered in the depository register for that ordinary share. The Company may close the register
of shareholders for any time or times if it provides the Accounting and Corporate Regulatory
Authority of Singapore at least 14 days’ notice and the SGX-ST at least 10 clear market days’
notice. However, the register may not be closed for more than 30 days in aggregate in any
calendar year. The Company typically closes the register to determine shareholders’ entitlement
to receive dividends and other distributions.
APPENDIX E – DESCRIPTION OF OUR SHARES
E-1
Transfer of Shares
There is no restriction on the transfer of fully paid ordinary shares except where required by law
or the listing rules or the rules or by-laws of any stock exchange on which the Company is listed.
The Board of Directors may decline to register any transfer of ordinary shares which are not fully
paid shares, or ordinary shares on which the Company has a lien. Ordinary shares may be
transferred by a duly signed instrument of transfer in a form approved by any stock exchange on
which the Company is listed. The Board of Directors 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. The
Company will replace lost or destroyed certificates for ordinary shares if it is properly notified and
if the applicant pays a fee which will not exceed S$2 and furnishes any evidence and indemnity
that the Board of Directors may require.
General Meetings of Shareholders
The Company is required to hold an annual general meeting every year. The Board of Directors
may convene an Extraordinary General Meeting whenever it thinks fit and must do so if
shareholders representing not less than 10% 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% of the total number of issued shares of the Company (excluding treasury shares) may
call a meeting. Unless otherwise required by law or by the Articles, 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% of the votes cast at the meeting, is
necessary for certain matters under Singapore law, including voluntary winding up, amendments
to the Memorandum of Association and the Articles, a change of the corporate name and a
reduction in the share capital. The Company 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 has supplied the Company with an address in Singapore for the giving of notices 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.
Proxies need not be a shareholder. A person who holds ordinary shares through the CDP
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 the Articles, two (2) or more shareholders must be
present in person or by proxy to constitute a quorum at any general meeting. Under the 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 in his sole discretion 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
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 10% of the total voting rights of all shareholders having the right to
APPENDIX E – DESCRIPTION OF OUR SHARES
E-2
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 a tie vote, whether on a show of hands or a poll, the chairman of
the meeting shall be entitled to a casting vote.
Dividends
The Company may, by ordinary resolution of its shareholders, declare dividends at a general
meeting, but it may not pay dividends in excess of the amount recommended by the Board of
Directors. The Company must pay all dividends out of its profits. The Board of Directors may also
declare an interim dividend without the approval of its shareholders. All dividends are paid pro rata
among the 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 provides 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 the
Company 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 the Company from any
liability to that shareholder in respect of that payment.
Bonus and Rights Issues
The Board of Directors may, with approval by the shareholders at a general meeting, capitalise
any reserves or profits (including profit or moneys carried and standing to any reserve or other
undistributable reserve) and distribute the same as bonus shares credited as paid-up to the
shareholders in proportion to their shareholdings. The Board of Directors may also issue rights to
take up additional ordinary 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 the Company is listed.
Takeovers
The Securities and Futures Act and the Singapore Code on Takeovers and Mergers 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 the Company. Any person acquiring an
interest, either on his own or together with parties acting in concert with him, in 30% or more of
the voting shares in the Company must extend a takeover offer for the remaining voting shares in
accordance with the provisions of the Singapore Code on Takeovers and Mergers. “Parties acting
in concert” include a company and its related and associated companies, a company and its
directors (including their close relatives), a company and its pension funds and employee share
schemes, a person and any investment company, unit trust or other fund whose investment such
person manages on a discretionary basis, and a financial advisor and its client in respect of shares
held by the financial advisor and shares in the client held by funds managed by the financial
advisor on a discretionary basis. An offer for consideration other than cash must be accompanied
by a cash alternative at not less than the highest price paid by the offeror or parties acting in
concert with the offeror within the preceding six (6) months. 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% and 50% of the voting shares acquires, or any party acting in concert with
him acquires, additional voting shares representing more than 1% of the voting shares in any six
(6) month period.
APPENDIX E – DESCRIPTION OF OUR SHARES
E-3
Liquidation or Other Return of Capital
If the Company liquidates or in the event of any other return of capital, holders of ordinary 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.
Indemnity
As permitted by Singapore law, the Articles provide that, subject to the Companies Act, the Board
of Directors and officers shall be entitled to be indemnified by the Company against any liability
incurred in defending any proceedings, whether civil or criminal, which relate to anything done or
omitted to have been done as an officer, director or employee and in which judgment 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. The Company may
not indemnify directors and officers against any liability which by law would otherwise attach to
them in respect of any negligence, default, breach of duty or breach of trust of which they may be
guilty in relation to the Company.
Limitations on Rights to Hold or Vote on Shares
Except as described in “Voting Rights” and “Takeovers” above, there are no limitations imposed
by Singapore law or by the Articles on the rights of non-resident shareholders to hold or vote on
ordinary shares.
Substantial Shareholdings
Under the Securities and Futures Act, a person has a substantial shareholding in our Company if
he 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 5.0% of the
aggregate of the total votes attached to all voting shares (excluding treasury shares) in our
Company.
The Securities and Futures Act requires our Substantial Shareholders, or if they cease to be our
Substantial Shareholders, to give notice to us of particulars of the voting shares in our Company
in which they have or had an interest (or interests) and the nature and extent of that interest or
those interests, and of any change in the percentage level of their interest.
In addition, the deadline for a substantial Shareholder to make disclosure to our Company under
the Securities and Futures Act is two (2) Singapore business days after he becomes aware:
(a) that he is or (if he had ceased to be one (1)) had been a substantial Shareholder;
(b) of any change in the percentage level in his interest;
(c) that he had ceased to be a substantial Shareholder,
there being a conclusive presumption of a person being “aware” of a fact or occurrence at the time
at which he would, if he had acted with reasonable diligence in the conduct of his affairs, have
been aware.
APPENDIX E – DESCRIPTION OF OUR SHARES
E-4
Following the above, we will in turn announce or otherwise disseminate the information stated in
the notice to the SGX-ST as soon as practicable and in any case, no later than the end of the
Singapore business day following the day on which we received the notice.
“Percentage level”, in relation to a Substantial Shareholder in our Company, means the
percentage figure ascertained by expressing the total votes attached to all the voting shares in our
Company in which the Substantial Shareholder has an interest (or interests) immediately before
or (as the case may be) immediately after the relevant time as a percentage of the total votes
attached to all the voting shares (excluding treasury shares) in our Company, and, if it is not a
whole number, rounding that figure down to the next whole number.
While the definition of an “interest” in our voting shares for the purposes of substantial shareholder
disclosure requirements under the Securities and Futures Act is similar to that under the
Companies Act, the Securities and Futures Act provides that a person who has authority (whether
formal or informal, or express or implied) to dispose of, or to exercise control over the disposal of,
a voting share is regarded as having an interest in such share, even if such authority is, or is
capable of being made, subject to restraint or restriction in respect of particular voting shares.
Minority Rights
The rights of minority shareholders of Singapore-incorporated companies 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 shareholder of the Company, as they think fit to remedy any of the
following situations:–
(a) the affairs of the Company are being conducted or the powers of the Board of Directors are
being exercised in a manner oppressive to, or in disregard of the interests of, one (1) or more
of the shareholders; or
(b) the Company takes an action, or threatens to take an action, or the shareholders pass a
resolution, or propose to pass a resolution, which unfairly discriminates against, or is
otherwise prejudicial to, one (1) or more of the shareholders, including the applicant.
Singapore courts have wide discretion as to the reliefs they may grant and those reliefs are in no
way limited to those listed in the Companies Act itself. Without prejudice to the foregoing,
Singapore courts may:–
(a) direct or prohibit any act or cancel or vary any transaction or resolution;
(b) regulate the conduct of the affairs of the Company in the future;
(c) authorise civil proceedings to be brought in the name of, or on behalf of, the Company by a
person or persons and on such terms as the court may direct;
(d) provide for the purchase of a minority shareholder’s shares by the other shareholders or by
the Company and, in the case of a purchase of shares by the Company, a corresponding
reduction of its share capital; or
(e) provide that the Company be wound up.
APPENDIX E – DESCRIPTION OF OUR SHARES
E-5
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1. NAME OF THE PLAN
1.1 The Plan shall be called the “iFAST Corporation Performance Share Plan”.
2. DEFINITIONS
2.1 In the Plan, unless the context otherwise requires, the following words and expressions
shall have the following meanings:
“Act” The Companies Act, Chapter 50 of Singapore as
amended from time to time.
“Adoption Date” The date on which the Plan is adopted by the Company
in general meeting.
“Associate” Shall have the meaning assigned to it in the Listing
Manual.
“Associated Company” A company in which at least 20% but not more than
50% of its issued shares are held by the Company or
the Group and over which the Company has Control.
“Auditors” The auditors of the Company for the time being.
“Award” A contingent award of Shares granted under Rule 5.
“Award Date” In relation to an Award, the date on which the Award is
granted pursuant to Rule 5.
“Award Letter” A letter in such form as the Committee shall approve
confirming an Award granted to a Participant by the
Committee.
“CDP” The Central Depository (Pte) Limited.
“Committee” The Remuneration Committee of the Company.
“Company” iFAST Corporation Ltd., a company incorporated in
Singapore.
“Control” The capacity to dominate decision-making, directly or
indirectly, in relation to the financial and operating
policies of the Company.
APPENDIX F – RULES OF THE IFAST PSP
F-1
“Controlling Shareholder” A person who holds directly or indirectly 15% or more of
the total number of issued Shares (excluding Shares
held by the Company as treasury shares) (unless
otherwise determined by the Singapore Exchange that
a person who satisfies this subparagraph is not a
controlling shareholder); or in fact exercises Control
over the Company.
“Group” The Company and its subsidiaries and Associated
Companies (as they may exist from time to time).
“Group Executive” Any confirmed employee of the Group (including any
Group Executive Director who meet the relevant
criteria and who shall be regarded as a Group
Executive for the purposes of the Plan) selected by the
Committee to participate in the Plan in accordance with
Rule 4.
“Group Executive Director” A director of the Company and/or any of its subsidiaries
and/or any of its Associated Companies, as the case
may be, who performs an executive function.
“Listing Manual” The Listing Manual of the Singapore Exchange.
“Non-executive Director” A director of the Company and/or its subsidiaries, other
than one (1) who performs an executive function.
“Participant” A person who has been granted an Award pursuant to
the Plan.
“Performance Condition” In relation to an Award, the condition specified on the
Award Date in relation to that Award.
“Performance Period” The period, as may be determined by the Committee at
its discretion, during which the Performance Condition
is to be satisfied.
“Plan” The iFAST Corporation Performance Share Plan, as
the same may be modified or altered from time to time.
“Release” In relation to an Award, the release at the end of the
Performance Period relating to that Award of all or
some of the Shares to which that Award relates in
accordance with Rule 7 and, to the extent that any
Shares which are the subject of the Award are not
released pursuant to Rule 7, the Award in relation to
those Shares shall lapse accordingly, and “Released”
shall be construed accordingly.
APPENDIX F – RULES OF THE IFAST PSP
F-2
“Release Schedule” In relation to an Award, a schedule in such form as the
Committee shall approve, setting out the extent to
which Shares which are the subject of that Award shall
be released on the Performance Condition being
satisfied (whether fully or partially) or exceeded or not
being satisfied, as the case may be, at the end of the
Performance Period.
“Released Award” An Award which has been released in accordance with
Rule 7.
“Retention Period” Such retention period as may be determined by the
Committee and notified to the Participant at the grant of
the relevant Award to that Participant.
“Shares” Ordinary shares in the capital of the Company.
“Singapore Exchange” The Singapore Exchange Securities Trading Limited.
“Trading Day” A day on which the Shares are traded on the Singapore
Exchange.
“Vesting” In relation to Shares which are the subject of a
Released Award, the absolute entitlement to all or
some of the Shares which are the subject of a
Released Award and “Vest” and “Vested” shall be
construed accordingly.
“Vesting Date” In relation to Shares which are the subject of a
Released Award, the date (as determined by the
Committee and notified to the relevant Participant) on
which those Shares have Vested pursuant to Rule 7.
2.2 Words importing the singular number shall, where applicable, include the plural number and
vice versa. Words importing the masculine gender shall, where applicable, include the
feminine and neuter genders.
2.3 Any reference to a time of a day in the Plan is a reference to Singapore time.
2.4 Any reference in the Plan to any enactment is a reference to that enactment as for the time
being amended or re-enacted. Any word defined under the Act or any statutory modification
thereof and not otherwise defined in the Plan and used in the Plan shall have the meaning
assigned to it under the Act or any statutory modification thereof, as the case may be.
3. OBJECTIVES OF THE PLAN
The Plan has been proposed in order to:
(a) foster an ownership culture within the Group which aligns the interests of Group
Executives and Non-executive Directors with the interests of shareholders;
APPENDIX F – RULES OF THE IFAST PSP
F-3
(b) motivate Participants to achieve key financial and operational goals of the Company
and/or their respective business units; and
(c) make total employee remuneration sufficiently competitive to recruit and retain staff
having skills that are commensurate with the Company’s ambition to become a
world-class company.
4. ELIGIBILITY OF PARTICIPANTS
4.1 The following persons (unless they are also Controlling Shareholders or Associates of
Controlling Shareholders) will be eligible to participate in the Plan at the absolute discretion
of the Committee:
(a) Group Executives of our Group and our associated companies who have attained the
age of twenty-one (21) years and hold such rank as may be designated by the
Committee from time to; and
(b) Non-executive Directors (including our Independent Directors).
4.2 Persons who are Controlling Shareholders or their Associates who meet the criteria as set
out above are eligible to participate in the iFAST PSP, provided that:
(a) the participation of each Controlling Shareholder or his Associate and each grant of an
Award to any of them may only be effected with the specific prior approval of
independent Shareholders in general meeting by a separate resolution;
(b) the actual number and terms of any Awards to be granted to them have been
specifically approved by independent Shareholders at a general meeting in separate
resolutions for each such Controlling Shareholder or his Associates where such
resolution sets out the specific number and terms of the Awards to be granted; and
(c) all conditions for their participation in the iFAST PSP as may be required by the
regulations of the SGX-ST from time to time are satisfied. In this regard, pursuant to
Rule 845 of the Listing Manual, (1) the aggregate number of Shares available to
Controlling Shareholders and their Associates must not exceed 25% of the Shares
available under the iFAST PSP; and (2) the number of Shares available to each
Controlling Shareholder or his Associate must not exceed 10% of the shares available
under the iFAST PSP.
5. GRANT OF AWARDS
5.1 Subject as provided in Rule 8, the Committee may grant Awards to Group Executives and
Non-executive Directors (unless they are also Controlling Shareholders or Associates of
Controlling Shareholders) as the Committee may select, in its absolute discretion, at any
time during the period when the Plan is in force.
5.2 The number of Shares which are the subject of each Award to be granted to a Participant
in accordance with the Plan shall be determined at the absolute discretion of the
Committee, which shall take into account criteria such as his rank, job performance,
creativity, innovativeness, entrepreneurship, years of service and potential for future
APPENDIX F – RULES OF THE IFAST PSP
F-4
development, his contribution to the success and development of our Group and, if
applicable, the extent of effort and resourcefulness with which the Performance Condition
may be achieved within the Performance Period.
5.3 The Committee shall decide in relation to an Award:
(a) the Participant;
(b) the Award Date;
(c) the Performance Period;
(d) the number of Shares which are the subject of the Award;
(e) the Performance Condition;
(f) the Release Schedule; and
(g) any other condition which the Committee may determine in relation to that Award.
5.4 The Committee may amend or waive the Performance Period, the Performance Condition
and/or the Release Schedule in respect of any Award:
(a) in the event of a take-over offer being made for the Shares or if under the Act, 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 or in the event of a proposal to liquidate or sell
all or substantially all of the assets of the Company; or
(b) if anything happens which causes the Committee to conclude that:
(i) a changed Performance Condition and/or Release Schedule would be a fairer
measure of performance, and would be no less difficult to satisfy; or
(ii) the Performance Condition and/or Release Schedule should be waived, and shall
notify the Participants of such change or waiver.
5.5 As soon as reasonably practicable after making an Award, the Committee shall send to
each Participant an Award Letter confirming the Award and specifying in relation to the
Award:
(a) the Award Date;
(b) the Performance Period;
(c) the number of Shares which are the subject of the Award;
(d) the Performance Condition;
(e) the Release Schedule; and
(f) any other condition which the Committee may determine in relation to that Award.
APPENDIX F – RULES OF THE IFAST PSP
F-5
5.6 Participants are not required to pay for the grant of Awards.
5.7 An Award or Released Award shall be personal to the Participant to whom it is granted and,
prior to the allotment and/or transfer to the Participant of the Shares to which the Released
Award relates, shall not be transferred, charged, assigned, pledged or otherwise disposed
of, in whole or in part, except with the prior approval of the Committee and if a Participant
shall do, suffer or permit any such act or thing as a result of which he would or might be
deprived of any rights under an Award or Released Award without the prior approval of the
Committee, that Award or Released Award shall immediately lapse.
6. EVENTS PRIOR TO THE VESTING DATE
6.1 An Award shall, to the extent not yet Released, immediately lapse without any claim
whatsoever against the Company:
(a) in the event of misconduct on the part of the Participant as determined by the
Committee in its discretion;
(b) subject to Rule 6.2(b), upon the Participant ceasing to be in the employment of the
Group for any reason whatsoever; or
(c) in the event of an order being made or a resolution passed for the winding-up of the
Company on the basis, or by reason, of its insolvency.
For the purpose of Rule 6.1(b), the 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.
6.2 In any of the following events, namely:
(a) 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 an Award;
(b) where the Participant ceases to be in the employment of the Group by reason of:
(i) ill health, injury or disability (in each case, evidenced to the satisfaction of the
Committee);
(ii) redundancy;
(iii) retirement at or after the legal retirement age;
(iv) retirement before the legal retirement age with the consent of the Committee;
(v) the company by which he is employed or to which he is seconded, as the case
may be, ceasing to be a company within the Group, or the undertaking or part
of the undertaking of such company being transferred otherwise than to another
company within the Group, as the case may be;
(vi) (where applicable) his transfer of employment between companies within the
Group;
APPENDIX F – RULES OF THE IFAST PSP
F-6
(vii) his transfer to any government ministry, governmental or statutory body or
corporation at the direction of any company within the Group; or
(viii) any other event approved by the Committee;
(c) the death of a Participant; or
(d) any other event approved by the Committee,
the Committee may, in its absolute discretion, preserve all or any part of any Award and
decide as soon as reasonably practicable following such event either to Vest some or all of
the Shares which are the subject of any Award or to preserve all or part of any Award until
the end of the Performance Period and subject to the provisions of the Plan. In exercising
its discretion, the Committee will have regard to all circumstances on a case-by-case basis,
including (but not limited to) the contributions made by that Participant and the extent to
which the Performance Condition has been satisfied.
6.3 Without prejudice to the provisions of Rule 5.4, if before the Vesting Date, any of the
following occurs:
(a) a take-over offer for the Shares becomes or is declared unconditional;
(b) 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 being approved by shareholders of the Company and/or
sanctioned by the court under the Act; or
(c) an order being made or a resolution being passed for the winding-up of the Company
(other than as provided in Rule 6.1(c) or for amalgamation or reconstruction),
the Committee will consider, at its discretion, whether or not to Release any Award, and will
take into account all circumstances on a case-by-case basis, including (but not limited to)
the contributions made by that Participant. If the Committee decides to Release any Award,
then in determining the number of Shares to be Vested in respect of such Award, the
Committee will have regard to the proportion of the Performance Period which has elapsed
and the extent to which the Performance Condition has been satisfied. Where Awards are
Released, the Committee will, as soon as practicable after the Awards have been Released,
procure the allotment or transfer to each Participant of the number of Shares so determined,
such allotment or transfer to be made in accordance with Rule 7.
7. RELEASE OF AWARDS
7.1 Review of Performance Condition
7.1.1 As soon as reasonably practicable after the end of each Performance Period, the
Committee shall review the Performance Condition specified in respect of each
Award and determine at its discretion whether it has been satisfied and, if so, the
extent to which it has been satisfied, and provided that the relevant Participant has
continued to be a Group Executive or a Non-executive Director from the Award Date
up to the end of the Performance Period, shall Release to that Participant all or part
(as determined by the Committee at its discretion in the case where the Committee
has determined that there has been partial satisfaction of the Performance Condition)
APPENDIX F – RULES OF THE IFAST PSP
F-7
of the Shares to which his Award relates in accordance with the Release Schedule
specified in respect of his Award on the Vesting Date. If not, the Awards shall lapse
and be of no value.
If the Committee determines in its sole discretion that the Performance Condition has
not been satisfied or (subject to Rule 6) if the relevant Participant has not continued
to be a Group Executive or a Non-executive Director from the Award Date up to the
end of the relevant Performance Period, that Award shall lapse and be of no value
and the provisions of Rules 7.2 to 7.4 shall be of no effect.
The Committee shall have the discretion to determine whether the Performance
Condition has been satisfied (whether fully or partially) or exceeded and in making
any such determination, the Committee shall have the right to make computational
adjustments to the audited results of the Company or the Group, to take into account
such factors as the Committee may determine to be relevant, including changes in
accounting methods, taxes and extraordinary events, and further the right to amend
the Performance Condition if the Committee decides that a changed performance
target would be a fairer measure of performance.
7.1.2 Shares which are the subject of a Released Award shall be Vested to a Participant
on the Vesting Date, which shall be a Trading Day falling as soon as practicable after
the review by the Committee referred to in Rule 7.1.1 and, on the Vesting Date, the
Committee will procure the allotment or transfer to each Participant of the number of
Shares so determined.
7.1.3 Where new Shares are allotted upon the Vesting of any Award, the Company shall,
as soon as practicable after such allotment, apply to the Singapore Exchange for
permission to deal in and for quotation of such Shares.
7.2 Release of Award
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 the securities account of
that Participant maintained with CDP or the securities sub-account of that Participant
maintained with a Depository Agent, in each case, as designated by that Participant.
7.3 Ranking of Shares
New Shares allotted and issued, and existing Shares procured by the Company for transfer,
on the Release of an Award shall:
(a) be subject to all the provisions of the Memorandum and Articles of Association of the
Company; and
(b) 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 relevant Vesting Date, and shall in all other respects rank pari passu with
other existing Shares then in issue.
For the purposes of this Rule 7.3, “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.
APPENDIX F – RULES OF THE IFAST PSP
F-8
7.4 Moratorium
Shares which are allotted and issued or transferred to a Participant pursuant to the Release
of an Award shall not be transferred, charged, assigned, pledged or otherwise disposed of,
in whole or in part, during the Retention Period, except to the extent set out in the Award
Letter or with the prior approval of the Committee. The Company may take steps that it
considers necessary or appropriate to enforce or give effect to this disposal restriction
including specifying in the Award Letter the conditions which are to be attached to an Award
for the purpose of enforcing this disposal restriction.
8. LIMITATION ON THE SIZE OF THE PLAN
8.1 The aggregate number of Shares which may be issued or transferred pursuant to Awards
granted under the Plan on any date, when aggregated with the aggregate number of Shares
over which options or awards are granted under any other share option schemes or share
schemes of the Company, shall not exceed 15% of the total number of issued Shares
(excluding Shares held by the Company as treasury shares) on the day preceding that date.
8.2 The aggregate number of Shares for which Awards may be granted under the iFAST PSP
to Controlling Shareholders and their Associates shall not exceed 25% of the Shares
available under the iFAST PSP, and the number of Shares over which an Award may be
granted under the iFAST PSP to each Controlling Shareholder or his Associate shall not
exceed 10% of the Shares available under the iFAST PSP.
8.3 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 Plan.
9. ADJUSTMENT EVENTS
9.1 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, 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 in respect of which future Awards may be granted
under the Plan,
shall be adjusted in such manner as the Committee may determine to be appropriate,
provided that no adjustment shall be made if as a result, the Participant receives a benefit
that a shareholder of the Company does not receive.
9.2 Unless the Committee considers an adjustment to be appropriate, the issuance of securities
as consideration for an acquisition or a private placement of securities, or 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 Singapore Exchange during the period
when a share purchase mandate granted by shareholders of the Company (including any
renewal of such mandate) is in force, shall not normally be regarded as a circumstance
requiring adjustment.
APPENDIX F – RULES OF THE IFAST PSP
F-9
9.3 Notwithstanding the provisions of Rule 9.1, 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.
9.4 Upon any adjustment required to be made pursuant to this Rule 9, 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.
10. ADMINISTRATION OF THE PLAN
10.1 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 of directors of the Company, provided
that no member of the Committee shall participate in any deliberation or decision in respect
of Awards to be granted to him or held by him.
10.2 The Committee shall have the power, from time to time, to make and vary such
arrangements, guidelines and/or regulations (not being inconsistent with the Plan) for the
implementation and administration of the Plan, to give effect to the provisions of the Plan
and/or to enhance the benefit of the Awards and the Released Awards to the Participants,
as it may, in its absolute discretion, think fit. Any matter pertaining or pursuant to the Plan
and any dispute and uncertainty as to the interpretation of the Plan, any rule, regulation or
procedure thereunder or any rights under the Plan shall be determined by the Committee.
10.3 Neither the Plan nor the grant of Awards under the Plan shall impose on the Company or
the Committee or any of its members any liability whatsoever in connection with: (a) the
lapsing of any Awards pursuant to any provision of the Plan; (b) the failure or refusal by the
Committee to exercise, or the exercise by the Committee of, any discretion under the Plan;
and/or (c) any decision or determination of the Committee made pursuant to any provision
of the Plan.
10.4 Any decision or determination of the Committee made pursuant to any provision of the Plan
(other than a matter to be certified by the Auditors) shall be final, binding and conclusive
(including for the avoidance of doubt, any decisions pertaining to disputes as to the
interpretation of the Plan or any rule, regulation or procedure hereunder or as to any rights
under the Plan). The Committee shall not be required to furnish any reasons for any
decision or determination made by it.
10.5 As a safeguard against abuse, pursuant to the Listing Manual, a Participant who is a
member of the Committee shall not be involved in its deliberation in respect of Awards (if
any) to be granted to him. Further, where Awards are proposed to be granted to or held by
Group Executive Directors, Controlling Shareholders or their Associates, all members of the
Board (and not just members of the Committee) who are not Group Executive Directors,
Controlling Shareholders or Associates of Controlling Shareholders, will be involved in
deliberation on the same.
APPENDIX F – RULES OF THE IFAST PSP
F-10
11. NOTICES AND COMMUNICATIONS
11.1 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 (including electronic mail
addresses) or facsimile number, and marked for the attention of the Committee, as may be
notified by the Company to him in writing.
11.2 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, electronic mail
address or facsimile number according to the records of the Company or the last known
address, electronic mail address or facsimile number of the Participant.
11.3 Any notice or other communication from a Participant to the Company shall be irrevocable,
and shall not be effective until received by the Company. Any other notice or communication
from the Company to a Participant shall be deemed to be received by that Participant, when
left at the address specified in Rule 11.2 or, if sent by post, on the day following the date
of posting or, if sent by electronic mail or facsimile transmission, on the day of despatch.
12. MODIFICATIONS TO THE PLAN
12.1 Any or all the provisions of the Plan may be modified and/or altered at any time and from
time to time by a resolution of the Committee, except that:
(a) no modification or alteration shall alter adversely the rights attached to any Award
granted prior to such modification or alteration except with the consent in writing of
such number of Participants who, if their Awards were Released to them upon the
Performance Conditions for their Awards being satisfied in full, would become entitled
to not less than three-quarters in number of all the Shares which would fall to be
Vested upon Release of all outstanding Awards upon the Performance Conditions for
all outstanding Awards being satisfied in full;
(b) the definitions of “Associated Company”, “Group Executive”, “Group Executive
Director”, “Non-executive Director”, “Participant”, “Performance Period” and “Release
Schedule” and the provisions of Rules 4, 5, 6, 7, 8, 9, 10 and this Rule 12 shall not be
altered to the advantage of Participants except with the prior approval of the
Company’s shareholders in general meeting; and
(c) no modification or alteration shall be made without the prior approval of the Singapore
Exchange and such other regulatory authorities as may be necessary.
For the purposes of Rule 12.1(a), the opinion of the Committee as to whether any
modification or alteration would adversely affect the rights attached to any Award shall be
final, binding and conclusive.
For the avoidance of doubt, nothing in this Rule 12.1 shall affect the right of the Committee
under any other provision of the Plan to amend or adjust any Award.
APPENDIX F – RULES OF THE IFAST PSP
F-11
12.2 Notwithstanding anything to the contrary contained in Rule 12.1, the Committee may at any
time by resolution (and without other formality, save for the prior approval of the Singapore
Exchange) amend or alter the Plan in any way to the extent necessary or desirable, in the
opinion of the Committee, to cause the Plan to comply with, or take into account, any
statutory provision (or any amendment or modification thereto, including amendment of or
modification to the Act) or the provision or the regulations of any regulatory or other relevant
authority or body (including the Singapore Exchange).
12.3 Written notice of any modification or alteration made in accordance with this Rule 12 shall
be given to all Participants.
13. ABSTENTION FROM VOTING
Shareholders who are eligible to participate in the Plan are to abstain from voting on any
shareholders’ resolution relating to the Plan, including resolutions pertaining to (a) the
implementation of the iFAST PSP; and (b) participation by and Awards granted to
Controlling Shareholders and their Associates.
14. TERMS OF EMPLOYMENT UNAFFECTED
The terms of employment of a Participant shall not be affected by his participation in the
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.
15. DURATION OF THE PLAN
15.1 The Plan shall continue to be in force at the discretion of the Committee, subject to a
maximum period of ten (10) years commencing on the Adoption Date, provided always that
the 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.
15.2 The Plan may be terminated at any time by the Committee or, at the discretion of the
Committee, by resolution of the Company in general meeting, subject to all relevant
approvals which may be required and if the Plan is so terminated, no further Awards shall
be granted by the Committee hereunder.
15.3 The expiry or termination of the Plan shall not affect Awards which have been granted prior
to such expiry or termination, whether such Awards have been Released (whether fully or
partially) or not.
16. TAXES
All taxes (including income tax) arising from the grant or Release of any Award granted to
any Participant under the Plan shall be borne by that Participant.
APPENDIX F – RULES OF THE IFAST PSP
F-12
17. COSTS AND EXPENSES OF THE PLAN
17.1 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 Release of any Award 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.
17.2 Save for the taxes referred to in Rule 15 and such other costs and expenses expressly
provided in the Plan to be payable by the Participants, all fees, costs and expenses incurred
by the Company in relation to the Plan including but not limited to the fees, costs and
expenses relating to the allotment and issue, or transfer, of Shares pursuant to the Release
of any Award shall be borne by the Company.
18. DISCLAIMER OF LIABILITY
Notwithstanding any provisions herein contained, 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 procuring the transfer of, the Shares or applying for or procuring the
listing of new Shares on the Singapore Exchange in accordance with Rule 7.1.3.
19. DISCLOSURES IN ANNUAL REPORTS
The Company shall make the following disclosure (as applicable) in its annual report:
(a) The names of the members of the Committee administering the Plan;
(b) The information required in the table below for the following Participants of the Plan:
(i) Participants who are Directors of the Company;
(ii) Participants who are Controlling Shareholders and their Associates; and
(iii) Participants, other than those in (i) and (ii) above, who receive 5% or more of the
total number of Shares available under the Plan; and
Name of
Participant
Total
number of
Shares
comprised
in Awards
under the
iFAST PSP
during the
financial
year under
review
(including
terms)
Aggregate
number of
Shares
comprised in
Awards vested
to such
Participant
since
commencement
of the iFAST
PSP to the end
of the financial
year under
review
Aggregate
number of
Shares
comprised in
Awards issued
since
commencement
of the iFAST
PSP to the end
of the financial
year under
review
Aggregate
number of
Shares
comprised
in Awards
which have
not been
released as
at the end
of the
financial
year under
review
APPENDIX F – RULES OF THE IFAST PSP
F-13
(c) the number and proportion of Shares comprised in Awards granted at a discount
during the financial year under review in respect of every 10% discount range, up to
the maximum quantum of discount granted; and
(d) any other information required to be so disclosed pursuant to the Listing Manual and
all other applicable laws and requirements,
provided that if any of the above requirements are not applicable, an appropriate negative
statement should be included therein.
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. GOVERNING LAW
The Plan shall be governed by, and construed in accordance with, the laws of the Republic
of Singapore. The Participants, by accepting grants of Awards in accordance with the Plan,
and the Company submit to the exclusive jurisdiction of the courts of the Republic of
Singapore.
22. CONTRACTS (RIGHTS OF THIRD PARTIES) ACT, CHAPTER 53B
No person other than the Company or a Participant shall have any right to enforce any
provision of the Plan or any Award by the virtue of the Contracts (Rights of Third Parties)
Act, Chapter 53B of Singapore.
APPENDIX F – RULES OF THE IFAST PSP
F-14
1. DEFINITIONS
In this Scheme, unless the context otherwise requires, the following words and expressions
shall have the following meanings:
“Act” The Companies Act, Chapter 50 of Singapore, as
amended or modified from time to time.
“Associate” Shall have the meaning assigned to it in the Listing
Rules.
“Associated Company” A company in which at least 20% but not more than
50% of its issued shares are held by the Company or
the Group and over which the Company has Control.
“Associated Company
Employee”
Any confirmed employee (including directors) of an
Associated Company selected by the Committee to
participate in the Scheme.
“Auditors” The auditors of the Company for the time being.
“Board” The board of Directors of the Company for the time
being.
“CDP” The Central Depository (Pte) Limited.
“Committee” The Remuneration Committee of the Company.
“Company” iFAST Corporation Ltd.
“Control” The capacity to dominate decision-making, directly or
indirectly, in relation to the financial and operating
policies of the Company.
“Controlling Shareholder” A shareholder who:
(a) holds directly or indirectly 15% or more of the total
number of issued Shares (excluding Shares held
by the Company as treasury shares) (unless
otherwise determined by the SGX-ST that a
person who satisfies this subparagraph is not a
controlling shareholder); or
(b) in fact exercises Control over the Company.
“Date of Grant” The date on which an Option is granted to a Participant
pursuant to Rule 7.
APPENDIX G – RULES OF THE IFAST ESOS
G-1
“Director” A person holding office as a director for the time being
of the Company.
“EGM” Extraordinary General Meeting.
“Executive Director” A director who is an employee of the Group and who
performs an executive function.
“Exercise Price” The price at which a Participant shall acquire each
Share upon the exercise of an Option, as determined in
accordance with Rule 9, or such adjusted price as may
be applicable pursuant to Rule 10.
“Financial Year” Each period of twelve (12) months or more or less than
twelve (12) months, at the end of which the balance of
accounts of the Company are prepared and audited, for
the purpose of laying the same before an annual
general meeting of the Company.
“Grantee” The person to whom an offer of an Option is made.
“Group” The Company, its subsidiaries and Associated
Companies (as they may exist from time to time).
“Group Employee” Any confirmed employee of the Group (including an
Executive Director) selected by the Committee to
participate in the Scheme in accordance with Rule 4.
“Listing Rules” The rules constituted in the Listing Manual of the
SGX-ST.
“Market Day” A day on which the SGX-ST is open for trading of
securities.
“Market Price” The average of the last dealt prices for a Share
determined by reference to the daily Official List
published by the SGX-ST for a period of five (5)
consecutive Market Days immediately prior to the
relevant Offer Date provided always that in the case of
a Market Day on which the Shares are not traded on
the SGX-ST, the last dealt price for Shares on such
Market Day shall be deemed to be the last dealt price
of the Shares on the immediately preceding Market
Day on which the Shares were traded, rounded up to
the nearest whole cent in the event of fractional prices.
“Non-executive Director” A director of the Company and/or its subsidiaries, other
than one (1) who performs an executive function.
APPENDIX G – RULES OF THE IFAST ESOS
G-2
“Offer Date” The date on which an offer to grant an Option is made
pursuant to the Scheme.
“Option” The right to acquire Shares granted or to be granted to
a Group Employee or a Non-executive Director
pursuant to the Scheme and for the time being
subsisting.
“Option Period” Subject as provided in Rules 11 and 15, the period for
the exercise of an Option being:
(a) in the case of an Option granted to a Group
Employee (other than Options granted to Non-
executive Directors and/or Associated Company
Employees), a period commencing after the first
anniversary of the Offer Date and expiring on (and
including) the date immediately preceding the
tenth anniversary of the Offer Date or such other
shorter period determined by the Committee; and
(b) in the case of an Option granted to Non-executive
Directors and/or Associated Company
Employees, a period commencing after the first
anniversary of the Offer Date and expiring on (and
including) the date immediately preceding the fifth
anniversary of the Offer Date or such other
shorter period determined by the Committee,
provided that where the Exercise Price for the Shares
comprised in an Option is set at a discount to the
Market Price, such Option may not be exercised before
the second anniversary of such Offer Date.
“Participant” The holder of an Option.
“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.
“Scheme” The iFAST ESOS as modified or amended from time to
time.
“S$” Singapore dollars.
“SGX-ST” The Singapore Exchange Securities Trading Limited.
“Shares” Ordinary shares in the capital of the Company.
APPENDIX G – RULES OF THE IFAST ESOS
G-3
“Shareholders” The registered holders for the time being of the Shares
(other than CDP) or in the case of Depositors,
Depositors who have Shares entered against their
names in the Depository Register.
“Subsidiary” A company which is for the time being a subsidiary of
the Company as defined by Section 5 of the Act.
The terms “Depositor”, “Depository Register” and “Depository Agent” shall have the
meanings ascribed to them respectively by Section 130A of the Act.
Words denoting the singular shall, where applicable, include the plural and vice versa and
words denoting the masculine gender shall, where applicable, include the feminine and
neuter gender. References to persons shall include corporations.
Any reference in the Scheme to any enactment is a reference to that enactment as for the
time being amended or re-enacted. Any word defined under the Act or any statutory
modification thereof and used in this Scheme shall, where applicable, have the same
meaning assigned to it under the Act. Any reference in this Scheme to a time of day shall
be a reference to Singapore time unless otherwise stated.
2. NAME OF THE SCHEME
The Scheme shall be called the “iFAST ESOS”.
3. OBJECTIVES OF THE SCHEME
The Scheme will provide an opportunity for Group Employees who have contributed
significantly to the growth and performance of the Group and Non-executive Directors and
who satisfy the eligibility criteria as set out in Rule 4 of the Scheme, to participate in the
equity of the Company.
The Scheme is primarily a share incentive scheme. It recognises the fact that the services
of Group Employees and Non-executive Directors are important to the success and
continued well-being of the Group. Implementation of the Scheme will enable the Company
to give recognition to the contributions made by such Group Employees and Non-executive
Directors. At the same time, it will give such Group Employees and Non-executive Directors
an opportunity to have a direct interest in the Company at no direct cost to its profitability
and will also help to achieve the following positive objectives:
(a) to motivate Participants to optimise their 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 prosperity of the Group;
(c) to instill loyalty to, and a stronger identification by Participants with the long-term
prosperity of, the Group;
APPENDIX G – RULES OF THE IFAST ESOS
G-4
(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 Participants with the interests of the Shareholders.
4. ELIGIBILITY
4.1 The following persons shall be eligible to participate in the Scheme at the absolute
discretion of the Committee:
(a) Group Employees (including Executive Directors) who have attained the age of
twenty-one (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, and
who have, as of the Date of Grant, been in the employment of the Group for a period
of at least twelve (12) months, or such shorter period as the Committee may
determine; and
(b) Non-executive Directors.
Directors and employees of the Company’s parent company and its Subsidiaries (other than
the Company and the Company’s Subsidiaries) are not entitled to participate in the
Scheme.
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.
4.2 Controlling Shareholders and their Associates who satisfy the criteria set out in Paragraph
4.1 above shall be eligible to participate in the Scheme provided that:
(a) their participation; and
(b) the actual or maximum number of Shares and terms of any Options to be granted to
them,
have been approved by independent shareholders of the Company at a general meeting in
separate resolutions for each such person and, in respect of each such person, in separate
resolutions for each of (i) his participation and (ii) the actual or maximum number of Shares
and terms of any Options to be granted to him, provided always that it shall not be
necessary to obtain the approval of the independent shareholders of the Company for the
participation in the Scheme of a Controlling Shareholder or his Associate who is, at the
relevant time, already a Participant.
5. MAXIMUM ENTITLEMENT
Subject to Rule 4 and Rule 10, the aggregate number of Shares in respect of which Options
may be offered to a Grantee for acquisition in accordance with the Scheme 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 Grantee.
APPENDIX G – RULES OF THE IFAST ESOS
G-5
6. LIMITATION ON SIZE OF THE SCHEME
6.1 The aggregate number of Shares over which the Committee may grant Options on any date,
when added to the number of Shares issued and issuable or transferred and to be
transferred in respect of all Options granted under the Scheme and the number of Shares
issued and issuable or transferred and to be transferred in respect of all options or awards
granted under any other share option schemes or share schemes of the Company, shall not
exceed 15% of the total number of issued Shares (excluding Shares held by the Company
as treasury shares) on the day immediately preceding the Offer Date of the Option.
6.2 The aggregate number of Shares which may be issued or transferred pursuant to Options
under the Scheme to Participants who are Controlling Shareholders and their Associates
shall not exceed twenty-five (25) per cent. of the Shares available under the Scheme.
6.3 The number of Shares which may be issued or transferred pursuant to Options under the
Scheme to each Participant who is a Controlling Shareholder or his Associate shall not
exceed ten (10) per cent. of the Shares available under the Scheme.
7. OFFER DATE
7.1 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 Scheme is in force, except that no Options shall be granted during the period of
thirty (30) days immediately preceding the date of announcement of the Company’s interim
and/or final results (whichever 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 to grant Options may only be made on or after the third
Market Day on which such announcement is released.
7.2 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 Annex 1, subject to such
amendments as the Committee may determine from time to time.
8. ACCEPTANCE OF OFFER
8.1 An Option offered to a Grantee pursuant to Rule 7 may only be accepted by the Grantee
within thirty (30) days after the relevant Offer Date and not later than 5.00 p.m. on the
thirtieth (30th) day from such Offer Date (a) by completing, signing and returning to the
Company the Acceptance Form in or substantially in the form set out in Annex 2, subject to
such modification as the Committee may from time to time determine, accompanied by
payment of S$1.00 as consideration or such other amount and such other documentation
as the Committee may require 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 Scheme in accordance with these Rules.
8.2 If a grant of an Option is not accepted strictly in the manner as provided in this Rule 8, such
offer shall, upon the expiry of the thirty (30) day period, automatically lapse and shall
forthwith be deemed to be null and void and be of no effect.
8.3 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 (as defined in Rule 12) given pursuant to
Rule 12 which does not strictly comply with the terms of the Scheme.
APPENDIX G – RULES OF THE IFAST ESOS
G-6
8.4 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.
8.5 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. The Committee
shall, within fifteen (15) Market Days of receipt of the Acceptance Form and consideration,
acknowledge receipt of the same.
8.6 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.
8.7 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 Rule 8.1 within the thirty (30) day
period; or
(b) the Participant dies prior to his acceptance of the Option; or
(c) the Participant is adjudicated a bankrupt or enters into composition with his creditors
prior to his acceptance of the Option; or
(d) the Grantee, being a Group Employee, ceases to be in the employment of the Group
or (being an Executive 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.
9. EXERCISE PRICE
9.1 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 at its absolute
discretion, and shall be fixed by the Committee at:
(a) the Market Price; or
(b) a price which is set at a discount to the Market Price, provided that:
(i) the maximum discount which may be given in respect of any Option shall not
exceed 20% of the Market Price in respect of that Option (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 aforesaid.
APPENDIX G – RULES OF THE IFAST ESOS
G-7
9.2 In making any determination under Rule 9.1(b) 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, its Subsidiaries and Associated Companies, as the
case may be, taking into account financial parameters such as net profit after tax,
return on equity and earnings growth;
(b) the years of service and individual performance of the eligible Group Employee;
(c) the contribution of the eligible Group Employee to the success and development of the
Company and/or the Group; and
(d) the prevailing market conditions.
9.3 In the event that the Company is no longer listed on the Mainboard of the SGX-ST or any
other relevant stock exchange or trading in the Shares on the Mainboard of the SGX-ST or
such stock exchange is suspended for any reason for fourteen (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, subdivision, consolidation or distribution,
or otherwise howsoever) should take place, then:
(a) the Exercise Price in respect of the Shares comprised in the Option to the extent
unexercised; and/or
(b) the class and/or number of Shares comprised in the Option to the extent unexercised
and the rights attached thereto; and/or
(c) the maximum entitlement in any one (1) Financial Year; and/or
(d) the class and/or number of Shares in respect of which additional Options may be
granted to Participants,
may, at the option of the Committee, 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 considers it equitable to
do so.
APPENDIX G – RULES OF THE IFAST ESOS
G-8
10.3 The issue of securities as consideration for an acquisition of any assets by the Company or
a private placement of securities or the cancellation of issued Shares purchased or
acquired by the Company by way of a market purchase of such Shares, in accordance with
the Listing Rules, undertaken by the Company on the SGX-ST during the period when a
share repurchase mandate granted by the Shareholders (including any renewal of such
mandate) is in force, will 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
or transferred 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, 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 and the maximum entitlement in any one (1)
Financial Year.
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 (other than Options granted
to Non-executive Directors and/or Associated Company Employees) shall be exercised
before the tenth anniversary of the relevant Offer Date and Options granted to Non-
executive Directors and/or Associated Company Employees shall be exercised before the
fifth 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
(other than Options granted to Non-executive Directors and/or Associated Company
Employees) shall be exercised before the tenth anniversary of the relevant Offer Date and
Options granted to Non-executive Directors and/or Associated Company Employees shall
be exercised before the fifth 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
APPENDIX G – RULES OF THE IFAST ESOS
G-9
(b) 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 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.
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 Option
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 an Executive Director or a Non-executive Director (as the case
may be), 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.
APPENDIX G – RULES OF THE IFAST ESOS
G-10
12. EXERCISE OF OPTIONS, ALLOTMENT OR TRANSFER 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 Annex 3 (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 said 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 (including
any approvals required from the SGX-ST); and
(b) compliance with the Rules of the Scheme and the Memorandum and Articles 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 ten (10) Market Days after the date of the exercise of the Option in
accordance with Rule 12.1, allot the Shares or, as the case may be, procure the transfer of
existing Shares (which may include, where desired, any Shares held by the Company as
treasury shares), in respect of which such Option has been exercised by the Participant and
where required, or as the case may be, 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 as soon as practicable after the exercise of an Option, apply to the
SGX-ST or any other stock exchange on which the Shares are quoted or listed for
permission to deal in and for 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 all allotted or transferred on the exercise of an Option by a Participant
shall be issued, as the Participant may elect, in the name of, or transferred to, CDP to the
credit of the securities account of the Participant maintained with CDP or the Participant’s
securities sub-account with a Depository Agent.
12.5 Shares allotted and issued, and existing Shares procured by the Company for transfer,
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 except for any dividends, rights, allotments or other
distributions, the Record Date for which is prior to the date such Option is exercised.
APPENDIX G – RULES OF THE IFAST ESOS
G-11
12.6 Except as set out in Rule 12 and subject to Rule 10, an Option does not confer on a
Participant any right to participate in any new issue of Shares.
13. ALTERATIONS AND AMENDMENTS TO THE SCHEME
13.1 Any or all of the provisions of the Scheme 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 three-quarters (3/4) in number of all the Shares which
would fall to be issued and allotted or transferred upon exercise in full of all
outstanding Options;
(b) any modification or alteration which would be to the advantage of Participants under
the Scheme shall be subject to the prior approval of Shareholders at a general
meeting; and
(c) no modification or alteration shall be made without due compliance with the Listing
Manual, the prior approval of the SGX-ST or (if required) any other stock exchange on
which the Shares are quoted or 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 any other formality save for the prior approval of the
SGX-ST) amend or alter the Scheme in any way to the extent necessary to cause the
Scheme to comply with any statutory provision or the provisions or the regulations of any
regulatory or other relevant authority or body (including the SGX-ST).
13.3 Written notice of any modification or alteration made in accordance with this Rule shall be
given to all Participants.
14. DURATION OF THE SCHEME
14.1 The Scheme shall continue to be in force at the discretion of the Committee, subject to a
maximum period of ten (10) years, commencing on the date on which the Scheme is
adopted by Shareholders in the EGM. Subject to compliance with any applicable laws and
regulations in Singapore, the Scheme 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 Scheme may be terminated at any time by the Committee or by resolution of the
Shareholders at a general meeting subject to all other relevant approvals which may be
required and if the Scheme is so terminated, no further Options shall be offered by the
Company hereunder.
APPENDIX G – RULES OF THE IFAST ESOS
G-12
14.3 The termination, discontinuance or expiry of the Scheme 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
Rule 11.1 and 11.2) holding Options as yet unexercised shall, notwithstanding Rule 11 and
Rule 12 but subject to Rule 15.5, be entitled to exercise such Options in full or in part in 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 SGX-ST, 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 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, remain exercisable
until the expiry of the Option Period.
15.2 If, under the Act, 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, Participants (including Participants
holding Options which are then not exercisable pursuant to the provisions of Rule 11.1 and
Rule 11.2) shall notwithstanding Rule 11 and Rule 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 sixty (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 (other than an Option granted to a
Non-executive Director or an Associated Company Employee) shall be before the tenth
anniversary of the Offer Date.
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.
APPENDIX G – RULES OF THE IFAST ESOS
G-13
15.4 In the event of a members’ solvent voluntary winding-up (other than for amalgamation or
reconstruction), Participants (including Participants holding Options which are then not
exercisable pursuant to the provisions of Rule 11.1 and Rule 11.2) shall, subject to Rule
15.5, be entitled within thirty (30) days of the passing of the resolution of such winding-up
(but not after the expiry of the Option Period relating thereto) to exercise in full any
unexercised Option, after which such unexercised Option shall lapse and become null and
void.
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 To the extent that an Option is not exercised within the periods referred to in this Rule 15,
it shall lapse and become null and void.
16. ADMINISTRATION OF THE SCHEME
16.1 The Scheme shall be administered by the Committee in its absolute discretion with such
powers and duties as are conferred on 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 Scheme) for the implementation and administration of the
Scheme as it thinks fit.
16.3 Any decision of the Committee, made pursuant to any provision of the Scheme (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 Scheme or any rule, regulation, or
procedure thereunder or as to any rights under the Scheme).
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.
16.5 As a safeguard against abuse, pursuant to the Listing Manual, a Participant who is a
member of the Committee shall not be involved in its deliberation in respect of Options (if
any) to be granted to him. Further, where Options are proposed to be granted to or held by
Group Executive Directors, Controlling Shareholders or their Associates, all members of the
Board (and not just members of the Committee) who are not Group Executive Directors,
Controlling Shareholders or Associates of Controlling Shareholders, will be involved in
deliberation on the same.
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.
APPENDIX G – RULES OF THE IFAST ESOS
G-14
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.
18. TERMS OF EMPLOYMENT UNAFFECTED
18.1 The Scheme or any Option shall not form part of any contract of employment between the
Company, any Subsidiary or Associated Company (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 the Group shall not be affected by his participation in the Scheme
or any right which he may have to participate in it or any Option which he may hold and the
Scheme 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 Scheme shall not confer on any person any legal or equitable rights (other than those
constituting the Options themselves) against the Company, any Subsidiary and/or
Associated Company directly or indirectly or give rise to any cause of action at law or in
equity against the Company, any Subsidiary or Associated Company.
19. TAXES
All taxes (including income tax) arising from the exercise of any Option granted to any
Participant under the Scheme shall be borne by the Participant.
20. COSTS AND EXPENSES OF THE SCHEME
20.1 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 exercise of any Option in
CDP’s name, the deposit of share certificate(s) with CDP, the Participant’s security account
with CDP or the Participant’s securities sub-account with his Depository Agent 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 Scheme to be payable by the
Participants, all fees, costs, and expenses incurred by the Company in relation to the
Scheme including but not limited to the fees, costs and expenses relating to the issue and
allotment or transfer of the Shares pursuant to the exercise of any Option shall be borne by
the Company.
21. DISCLAIMER OF LIABILITY
Notwithstanding any provisions herein contained and subject to the 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 Scheme including but not limited to the Company’s
delay or failure in issuing and allotting, or procuring the transfer of, the Shares or in applying
for or procuring the listing of and quotation for the Shares on the SGX-ST or any other stock
exchanges on which the Shares are quoted or listed.
APPENDIX G – RULES OF THE IFAST ESOS
G-15
22. 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 of the Company;
(ii) Participants who are Controlling Shareholders and their Associates; and
(iii) Participants, other than those in (i) and (ii) above, who receive 5% or more of the
total number of Options available under the Scheme; and
Name of
Participant
Options
granted
during
financial
year under
review
(including
terms)
Aggregate
Options
granted since
commencement
of the Scheme
to end of
financial year
under review
Aggregate
Options
exercised since
commencement
of the Scheme
to end of
financial year
under review
Aggregate
Options
outstanding
as at end of
financial
year under
review
(c) The names of and number and terms of options granted to each director or employee
of the parent company and its subsidiaries who receives 5% 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 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.
(d) The number and proportion of Options granted at the following discounts to the Market
Price in the financial year under review:
(i) options granted at up to 10% discount; and
(ii) options granted at between 10% but not more than 20% discount.
If any of the above requirements in this clause 25 is not applicable, an appropriate negative
statement must be included.
23. ABSTENTION FROM VOTING
Shareholders who are eligible to participate in the iFAST ESOS must abstain from voting on
any resolution relating to the ESOS, including resolutions pertaining to (a) the
implementation of the iFAST ESOS; (b) discount quantum of the iFAST ESOS; and (c)
participation by and options grant to Controlling Shareholders and their Associates.
APPENDIX G – RULES OF THE IFAST ESOS
G-16
24. DISPUTES
Any disputes or differences of any nature in connection with the Scheme shall be referred
to the Committee and its decision shall be final and binding in all respects.
25. CONDITION OF OPTION
Every Option shall be subject to the condition that no Shares shall be issued or transferred
pursuant to the exercise of an Option 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.
26. GOVERNING LAW
The Scheme shall be governed by and construed in accordance with the laws of the
Republic of Singapore. The Company and the Participants, by accepting the offer of the
grant of Options in accordance with the Scheme, shall submit to the exclusive jurisdiction
of the courts of the Republic of Singapore.
APPENDIX G – RULES OF THE IFAST ESOS
G-17
ANNEX 1
iFAST ESOS
LETTER OF OFFER
Serial No:
PRIVATE AND CONFIDENTIAL
Date:
To: [Name]
[Designation]
[Address]
Dear Sir/Madam
We are pleased to inform you that you have been nominated by the Remuneration Committee of
the Board of Directors of iFAST Corporation Ltd. (the “Company”) to participate in the iFAST ESOS
(the “Scheme”). Terms as defined in the Scheme shall have the same meaning when used in this
letter.
Accordingly, an offer is hereby made to grant you an Option, in consideration of the payment of
a sum of S$1.00, to acquire ordinary shares in the capital of the Company
at the price of S$ per ordinary share. The Option shall be subject to the terms
of this Letter of Offer and the Scheme (as the same may be amended from time to time pursuant
to the terms and conditions of the Scheme), a copy of which is enclosed herewith.
The Option is personal to you and may not be sold, mortgaged, transferred, charged, assigned,
pledged or otherwise disposed of or encumbered in whole or in part or in any way whatsoever.
If you wish to accept the offer, please sign and return the enclosed Acceptance Form with a sum
of S$1.00 not later than a.m./p.m. on the day of
failing which this offer will forthwith lapse.
Yours faithfully
For and on behalf of
iFAST Corporation Ltd.
Name:
Designation:
APPENDIX G – RULES OF THE IFAST ESOS
G-18
ANNEX 2
iFAST ESOS
ACCEPTANCE FORM
Serial No:
To: The Remuneration Committee
iFAST ESOS
c/o The Company Secretary
iFAST Corporation Ltd.
[Address]
Closing Time and Date for Acceptance of Option :
No. of Shares in respect of which Option is offered :
Exercise Price per Share : S$
Total Amount Payable on Acceptance of Option
(exclusive of the relevant CDP charges) : S$
I have read your Letter of Offer dated (the “Offer Date”) and agree to be
bound by the terms thereof and of the iFAST ESOS stated therein. 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 acquire such shares.
I hereby accept the Option to acquire ordinary shares in the capital of iFAST
Corporation Ltd. (the “Shares”) at S$ per Share and enclose cash/banker’s
draft/cashier’s order/postal order no. for S$1.00 being payment for the
purchase of the Option.
I understand that I am not obliged to exercise the Option.
I also understand that I shall be responsible for all the fees of CDP relating to or in connection with
the issue and allotment or transfer of any Shares in CDP’s name, the deposit of share certificates
with CDP, my securities account with CDP or my securities sub-account with a Depository Agent
(as the case may be) (collectively, the “CDP charges”).
I confirm that as at the date hereof:
(a) I am not less than 21 years old nor an undischarged bankrupt nor have I entered into a
composition with any of my creditors;
(b) I satisfy the eligibility requirements to participate in the Scheme as defined in Rule 4 of the
Scheme; and
(c) I satisfy the other requirements to participate in the Scheme as set out in the Rules of the
Scheme.
APPENDIX G – RULES OF THE IFAST ESOS
G-19
I hereby acknowledge that you have not made any representation or warranty or given me any
expectation of employment or continued employment to induce me to accept the offer and that the
terms of the Letter of Offer and this Acceptance Form constitute the entire agreement between us
relating to the offer.
I agree to keep all information pertaining to the grant of the Option to me confidential.
APPENDIX G – RULES OF THE IFAST ESOS
G-20
PLEASE PRINT IN BLOCK LETTERS
Name in full :
Designation :
Address :
Nationality :
*NRIC/Passport No. :
Signature :
Date :
* Delete as appropriate
Notes:
(1) Option must be accepted in full or in multiples of 1,000 Shares.
(2) The Acceptance Form must be forwarded to the Company Secretary in an envelope marked “Private and
Confidential”.
(3) The Participant shall be informed by the Company of the relevant CDP charges payable at the time of the exercise
of an Option.
APPENDIX G – RULES OF THE IFAST ESOS
G-21
ANNEX 3
iFAST ESOS
EXERCISE NOTICE
To: The Remuneration Committee
iFAST ESOS
c/o The Company Secretary
iFAST Corporation Ltd.
[Address]
Total Number of ordinary shares (the “Share”) at
S$ per Share under an Option
granted on (the “Offer Date”) :
Number of Shares previously allotted and issued or
transferred thereunder :
Outstanding balance of Shares which may be
allotted and issued or transferred thereunder :
Number of Shares now to be acquired
(in multiples of 1,000) :
1. Pursuant to your Letter of Offer dated (the “Offer Date”) and my
acceptance thereof, I hereby exercise the Option to acquire Shares in iFAST Corporation Ltd.
(the “Company”) at S$ per Share.
2. I hereby request the Company to allot and issue or transfer to me the number of Shares
specified in paragraph 1 in the name of The Central Depository (Pte) Limited (“CDP”) to the
credit of my Securities Account with the CDP/Securities Sub-Account with a Depository
Agent specified below and to deliver the share certificates relating thereto to CDP at my own
risk. I further agree to bear such fees or other charges as may be imposed by CDP (the “CDP
charges”) and any stamp duties in respect thereof:
*(a) Direct Securities Account Number :
*(b) Securities Sub-Account Number :
Name of Depository Agent :
APPENDIX G – RULES OF THE IFAST ESOS
G-22
3. I enclose a cheque/cashier’s order/bank draft/postal order no. for
S$ in payment for the Exercise Price of S$ for the
total number of the said Shares and the CDP charges of S$ .
4. I agree to acquire the Shares subject to the terms of the Letter of Offer, the iFAST ESOS (as
the same may be amended pursuant to the terms thereof from time to time) and the
Memorandum and Articles of Association of the Company.
5. I declare that I am acquiring the Shares for myself and not as a nominee for any other person.
APPENDIX G – RULES OF THE IFAST ESOS
G-23
PLEASE PRINT IN BLOCK LETTERS
Name in full :
Designation :
Address :
Nationality :
*NRIC/Passport No. :
Signature :
Date :
* Delete as appropriate
Notes:
(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.
(2) The form entitled “Exercise Notice” must be forwarded to the Company Secretary in an envelope marked “Private
and Confidential”.
APPENDIX G – RULES OF THE IFAST ESOS
G-24
RATIONALE FOR THE SHARE BUY-BACK MANDATE
Our Directors constantly seek to increase Shareholders’ value and to improve, inter alia, the return
on equity of the Group. The Share Buy-back Mandate would give us the flexibility to undertake buy
backs of our Shares at any time, subject to market conditions, during the period when the Share
Buy-back Mandate is in force. A Share Buy-back at the appropriate price level is one (1) of the
ways through which the return on equity of the Group may be enhanced. Further, amongst others,
a Share Buy-back provides us with a mechanism to facilitate the return of surplus cash over and
above its ordinary capital requirements in an expedient and cost-efficient manner. Our Directors
also expect that a Share Buy-back may also help mitigate against short term volatility of share
price, offset the effects of short term speculation and bolster Shareholders’ confidence. A Share
Buy-back will also allow our Directors greater control over our share capital structure, dividend
payout and cash reserves.
The buy back of Shares may, depending on market conditions and funding arrangements at the
time, lead to an enhancement of our EPS and/or NTA per Share and the Group, and will only be
made when our Directors believe that such buy back would benefit our Shareholders and us.
Shareholders should note that purchases or acquisitions of Shares pursuant to the Share
Buy-back Mandate via market purchases or off-market purchases will only be made when our
Directors believe that such purchases or acquisitions would be made in circumstances which
would not have a material adverse effect on our financial position.
MANDATE
Any purchase or acquisition of Shares by us would have to be made in accordance with and in the
manner prescribed by, the Companies Act and the rules of the Listing Manual and such other laws
and regulations as may, for the time being, be applicable.
It is also a requirement that a company which wishes to purchase or acquire its own shares should
obtain approval of its shareholders and to do so at a general meeting. As set out in the section
entitled “Share Capital” of this Prospectus, Shareholder approval has been obtained for the Share
Buy-back Mandate and for our purchase or acquisition of our issued Shares. The Share Buy-back
Mandate will take effect from the date of its approval and continue in force until the date of the next
AGM of the Company or such date as the next AGM is required by law or by the Articles to be held,
unless prior thereto, Share Buy-backs are carried out to the full extent mandated or we revoke or
vary the Share Buy-back Mandate in a general meeting.
TERMS OF THE SHARE BUY BACK MANDATE
The authority for and limitations placed on our purchases of Shares under the Share Buy-back
Mandate, are summarised below:
(a) Maximum Number of Shares
We may only purchase or acquire Shares which are issued and fully paid-up.
The total number of Shares that may be purchased or acquired is limited to that number of
Shares representing not more than 10% of our issued share capital (excluding treasury
shares), ascertained as at the date of the general meeting at which the Share Buy-back
Mandate is approved (the “Approval Date”), unless a reduction of our share capital has been
effected in accordance with the applicable provisions of the Companies Act, at any time
APPENDIX H – INFORMATION ON THE SHARE BUY BACK MANDATE
H-1
during the Relevant Period, in which event the total number of our Shares shall be taken to
be the total number of our Shares as altered. For purposes of calculating the percentage of
issued Shares above, any of the Shares which are held as treasury shares will be
disregarded.
Based on our existing issued and paid-up share capital of 204,425,334 Shares as at the
Approval Date, we may not purchase or acquire more than 20,442,533 Shares (representing
10% of the Shares in issue as at that date) pursuant to the proposed Share Buy-back
Mandate.
(b) Duration of Authority
Purchases or acquisitions of Shares may be made, at any time and from time to time, from
the Approval Date up to the earlier of:
(i) the date on which our next AGM is held or required by law or our Articles to be held;
(ii) the date on which the authority contained in the Share Buy-back Mandate is varied or
revoked by our Shareholders in a general meeting; or
(iii) the date on which the Share Buy-back is carried out to the full extent mandated.
The Share Buy-back Mandate may be renewed at each of our AGM or other general meeting.
(c) Manner of Purchase of Shares
Purchases or acquisitions of Shares may be made by way of, inter alia:
(i) on-market purchases (“Market Purchase”), transacted on the SGX-ST through the
ready market or, as the case may be, any other stock exchange on which our Shares
may for the time being be listed and quoted, through one (1) or more duly licensed
stockbrokers appointed by us for the purpose; and/or
(ii) off-market purchases (“Off-Market Purchase”) (if effected otherwise than on the
SGX-ST) in accordance with any equal access scheme(s) as may be determined or
formulated by our Directors as they may consider fit, which scheme(s) shall satisfy all
the conditions prescribed by the Companies Act and Listing Manual.
Our Directors may impose such terms and conditions, which are consistent with the Share
Buy-back Mandate, the Listing Manual and the Companies Act, as they consider fit in our
interests of the Company in connection with or in relation to an equal access scheme or
schemes. Under the Companies Act, an equal access scheme must satisfy all the following
conditions:
(i) offers for the purchase of issued Shares shall be made to every person who holds
issued Shares to purchase the same percentage of their issued Shares;
(ii) all of those persons shall be given a reasonable opportunity to accept the offers made;
and
APPENDIX H – INFORMATION ON THE SHARE BUY BACK MANDATE
H-2
(iii) the terms of the offers are the same, except that there shall be disregarded:
(A) differences in consideration attributable to the fact that offers may relate to Shares
with different accrued dividend entitlements;
(B) (if applicable) differences in consideration attributable to the fact that offers relate
to Shares with different amounts remaining unpaid; and
(C) differences in the offers introduced solely to ensure that each person is left with a
whole number of Shares.
In addition, the Listing Manual provides that, in making an Off-Market Purchase in
accordance with an equal access scheme, we must issue an offer document to all
Shareholders which must contain at least the following information:
(i) the terms and conditions of the offer;
(ii) the period and procedures for acceptances;
(iii) the reasons for the proposed Share Buy-back;
(iv) the consequences, if any, of our Share Buy-backs that will arise under the Take-over
Code or other applicable takeover rules;
(v) whether the Share Buy-back, if made, would have any effect on the listing of the Shares
on the SGX-ST;
(vi) details of any Share Buy-backs (whether Market Purchases or Off-Market Purchases in
accordance with an equal access scheme) we have made in the previous twelve (12)
months, giving the total number of Shares purchased, the purchase price per Share or
the highest and lowest prices paid for the purchases, where relevant, and the total
consideration paid for the purchases; and
(vii) whether the Shares purchased will be cancelled or kept as treasury shares.
(d) Maximum Purchase Price
The purchase price (excluding brokerage, stamp duties, applicable goods and services tax
and other related expenses) to be paid for the Shares will be determined by our Directors.
However, the purchase price to be paid for a Share as determined by our Directors must not
exceed:
(i) in the case of a Market Purchase, one hundred and five per cent. (105%) of the Average
Closing Price (as defined hereinafter); and
(ii) in the case of an Off-Market Purchase pursuant to an equal access scheme, one
hundred and twenty per cent. (120%) of the Average Closing Price (as defined
hereinafter),
(the “Maximum Price”) in either case, excluding related expenses of the purchase.
APPENDIX H – INFORMATION ON THE SHARE BUY BACK MANDATE
H-3
For the above purposes:
“Average Closing Price” means the average of the closing market prices of the Shares over
the last five (5) Market Days on the SGX-ST, on which transactions in the Shares were
recorded, immediately preceding the day of the Market Purchase or, as the case may be, the
day of the making of the offer pursuant to the Off-Market Purchase, and deemed to be
adjusted for any corporate action that occurs after such five-Market Day period;
“day of the making of the offer” means the day on which we announce our intention to make
an offer for the purchase of Shares from Shareholders, stating the purchase price (which
shall not be more than the Maximum Price calculated on the foregoing basis) for each Share
and the relevant terms of the equal access scheme for effecting the Off-Market Purchase.
STATUS OF PURCHASED SHARES UNDER THE SHARE BUY-BACK MANDATE
A Share purchased or acquired by us is deemed cancelled immediately on purchase or acquisition
(and all rights and privileges attached to the Share will expire on such cancellation) unless such
Share is held by us as a treasury share in accordance with the Companies Act. Accordingly, the
total number of issued Shares will be diminished by the number of Shares purchased or acquired
by us and which are not held as treasury shares.
TREASURY SHARES
Under the Companies Act, Shares purchased or acquired by us may be held or dealt with as
treasury shares. Some of the provisions on treasury shares under the Companies Act are
summarised below:
(a) Maximum Holdings
The number of Shares held as treasury shares cannot at any time exceed 10% of the total
number of issued Shares.
(b) Voting and Other Rights
We cannot exercise any right in respect of treasury shares. In particular, we cannot exercise
any right to attend or vote at meetings and for the purposes of the Companies Act, we shall
be treated as having no right to vote and the treasury shares shall be treated as having no
voting rights.
In addition, no dividend may be paid, and no other distribution of our assets may be made,
to us in respect of treasury shares. However, the allotment of shares as fully paid bonus
shares in respect of treasury shares is allowed. Also, a subdivision or consolidation of any
treasury share into treasury shares of a smaller amount is allowed so long as the total value
of the treasury shares after the subdivision or consolidation is the same as before.
APPENDIX H – INFORMATION ON THE SHARE BUY BACK MANDATE
H-4
(c) Disposal and Cancellation
Where Shares are held as treasury shares, we may at any time:
(i) sell the treasury shares for cash;
(ii) transfer the treasury shares for the purposes of or pursuant to an employees’ share
scheme;
(iii) transfer the treasury shares as consideration for the acquisition of shares in or assets
of another company or assets of a person;
(iv) cancel the treasury shares; or
(v) sell, transfer or otherwise use the treasury shares for such other purposes as may be
prescribed by the Minister for Finance.
SOURCE OF FUNDS FOR SHARE BUY BACK
In buying back Shares, we may only apply funds legally available for such purchase in accordance
with our Articles, and the applicable laws in Singapore. We may not buy Shares on the Official List
of the SGX-ST for a consideration other than cash or for settlement otherwise than in accordance
with the trading rules of the SGX-ST. Our buy back of Shares may be made out of our profits or
capital so long as we are solvent.
When Shares are purchased or acquired, and cancelled:
(a) if the Shares are purchased or acquired entirely out of our capital, we shall reduce the
amount of our share capital by the total amount of the purchase price we paid for the Shares
(excluding brokerage, stamp duties, applicable goods and services tax, clearance fees and
other related expenses) (the “Purchase Price”);
(b) if the Shares are purchased or acquired entirely out of our profits, we shall reduce the
amount of our profits available for the distribution of cash dividends by the total amount of
the Purchase Price; or
(c) where the Shares are purchased or acquired out of both our capital and profits, we shall
reduce the amount of its share capital and profits available for the distribution of cash
dividends proportionately by the total amount of the Purchase Price.
We may use internal resources and/or external borrowings to fund purchases of Shares pursuant
to the Share Buy-back Mandate.
Our Directors do not propose to exercise the Share Buy-back Mandate in a manner and to such
extent that the liquidity and capital adequacy position of the Group would be materially adversely
affected.
APPENDIX H – INFORMATION ON THE SHARE BUY BACK MANDATE
H-5
FINANCIAL EFFECTS OF THE SHARE BUY BACK MANDATE
Shareholders should note that the financial effects illustrated below are for illustration purposes
only. In particular, it is important to note that the financial analysis set out below are based on the
audited consolidated financial statements for FY2013 and are not necessarily representative of
future financial performance of the Group. Although the proposed Share Buy-back Mandate would
authorise the Company to buy back up to 10% of the Company’s issued Shares, the Company may
not necessarily buy back or be able to buy back 10% of the issued Shares in full.
It is not possible for the Company to realistically calculate or quantify the impact of purchases that
may be made pursuant to the Share Buy-back Mandate on the financial effects as it would depend
on factors such as the aggregate number of Shares purchased or acquired, the purchase prices
paid at the relevant time, the amount (if any) borrowed by the Company to fund the purchases,
whether the purchase or acquisition is made out of profits or capital, and whether the Shares
purchased are held in treasury or cancelled. The purchase price paid by the Company for the
Shares (excluding brokerage, stamp duties, applicable goods and services tax and other related
expenses) will correspondingly reduce the amount available for the distribution of cash dividends
by the Company. The Directors do not propose to exercise the Share Buy-back Mandate to such
an extent that it would have a material adverse effect on the working capital requirements of the
Group. The purchase of the Shares will only be effected after considering relevant factors such as
the working capital requirement, availability of financial resources, the expansion and investment
plans of the Group, and the prevailing market conditions. The proposed Share Buy-back Mandate
will be exercised with a view to enhance the EPS and/or NTA per Share of the Group. The financial
effects presented in this section of the Appendix are based on the assumptions set out below:
(a) Information as at the Approval Date
As at the Approval Date, our issued share capital comprised 204,425,334 Shares. There are
no treasury shares and no Shares are reserved for issue by us as at the Approval Date.
(b) Illustrative Financial Effects
Purely for illustrative purposes, on the basis of 204,425,334 Shares in issue as at the
Approval Date and no Shares are held by us as treasury shares on or prior to the general
meeting approving the Share Buy-back Mandate, our purchase of 10% of our issued Shares
will result in the purchase of 20,442,533 Shares.
In the case of Market Purchases by us and assuming that we purchase or acquire 20,442,533
Shares at the Maximum Price of S$1.00 for each Share (being the price equivalent to 105%
of the Offering Price), the maximum amount of funds required for the purchase or acquisition
of 20,442,533 Shares is S$20,442,533.00.
In the case of Off-Market Purchases by us and assuming that we purchase or acquire
20,442,533 Shares at the Maximum Price of S$1.14 for each Share (being the price
equivalent to 120% of the Offering Price), the maximum amount of funds required for the
purchase or acquisition of 20,442,533 Shares is S$23,304,487.62.
APPENDIX H – INFORMATION ON THE SHARE BUY BACK MANDATE
H-6
For illustrative purposes only and on the basis of the assumptions set out above as well as
the following:
(i) the Share Buy-back Mandate had been effective on 1 January 2013; and
(ii) such Share purchases are funded solely by internal resources,
the financial effects on the audited consolidated financial results of the Group for FY2013,
are set out below:
Market Purchase Off-Market Purchase
Before
Share
Purchase
After
Share
Purchase
Before
Share
Purchase
After
Share
Purchase
S$’000 S$’000 S$’000 S$’000
Profit attributable to owners of
the Company continuing
operations 8,474 8,474 8,474 8,474
As at 31 December 2013
Share capital 10,670 10,670 10,670 10,670
Retained earnings 14,820 14,820 14,820 14,820
Share option reserve 559 559 559 559
Equity reserve (1,369) (1,369) (1,369) (1,369)
Fair value reserve 35 35 35 35
Translation reserve (749) (749) (749) (749)
Treasury shares – (20,443) – (23,304)
Shareholders’ equity 23,966 3,523 23,966 662
Total equity 24,624 4,181 24,624 1,320
Net assets value (NAV) 24,624 4,181 24,624 1,320
Other investments 2,011 – 2,011 –
Current assets 34,102 15,670 34,102 12,809
Current liabilities 13,403 13,403 13,403 13,403
Working capital 20,699 2,267 20,699 (594)
Total borrowings – – – –
Cash and cash equivalents 16,719 – 16,719 –
Net cash (16,719) – (16,719) –
Number of Shares as at 31
December 2013 (after sub-
division of shares) (’000) 202,776 182,333 202,776 182,333
Weighted average number of
Shares as at 31 December 2013
(after sub-division of shares)
(’000) 202,051 181,608 202,051 181,608
APPENDIX H – INFORMATION ON THE SHARE BUY BACK MANDATE
H-7
Market Purchase Off-Market Purchase
Before
Share
Purchase
After
Share
Purchase
Before
Share
Purchase
After
Share
Purchase
S$’000 S$’000 S$’000 S$’000
Profit attributable to owners of
the Company continuing
operations 8,474 8,474 8,474 8,474
Financial Ratios
NAV per Share (cents)
(1)
12.14 2.29 12.14 0.72
Gearing Ratio (times)
(2)
0.00 0.00 0.00 0.00
Current Ratio (times)
(3)
2.54 1.17 2.54 0.96
Basic EPS (cents)
(4)
4.20 4.67 4.20 4.67
Notes:
(1) Total Equity divided by the number of shares as at 31 December 2013.
(2) Total borrowings divided by total equity.
(3) Current assets divided by current liabilities.
(4) Profit attributable to owners of the Company divided by the weighted average number of Shares as at 31
December 2013.
The financial effects set out above are for illustrative purposes only. Although the Share
Buy-back Mandate would authorise the Company to purchase up to 10% of the issued
Shares, the Company may not necessarily purchase or be able to purchase the entire 10%
of the issued Shares. In addition, the Company may cancel all or part of the Shares
repurchased or hold all or part of the Shares repurchased in treasury.
TAX IMPLICATIONS
Shareholders who are in doubt as to their respective tax positions or the tax implications of a
share buy-back by us or who may be subject to tax, whether in or outside Singapore, should
consult their own professional advisers.
LISTING MANUAL
The Listing Manual requires a listed company to ensure that at least 10% of any class of its listed
securities must be held by public shareholders. As at the Latest Practicable Date, approximately
31.64% of our issued share capital are held in the hands of the public. “Public” means persons
other than Directors, chief executive officer, Substantial Shareholders or Controlling Shareholders
of our Company and its subsidiaries, as well as the associates of such persons. Assuming that we
repurchased the maximum of 10% of our issued share capital as at the Latest Practicable Date
from members of the public by way of a Market Purchase, the percentage of Shares held by the
public would be approximately 24.04%. Accordingly, the Company is of the view that there is a
sufficient number of the Shares in issue held by public shareholders which would permit the
Company to undertake purchases or acquisitions of its Shares through Market Purchases up to
the full ten per cent. (10%) limit pursuant to the Share Buy-back Mandate without affecting the
listing status of the Shares on the SGX-ST, and that the number of Shares remaining in the hands
of the public will not fall to such a level as to cause market illiquidity or to affect orderly trading.
APPENDIX H – INFORMATION ON THE SHARE BUY BACK MANDATE
H-8
Our Directors will use their best efforts to ensure that we do not effect buy back of Shares if the
buy back of Shares would result in the number of Shares remaining in the hands of the public
falling to such a level as to cause market illiquidity, adversely affect the orderly trading of our
Shares or adversely affect our listing status.
Under the Listing Manual, a listed company may only purchase shares by way of a market
acquisition at a price which is not more than 5% above the average closing market price. The term
average closing market price is defined as the average of the closing market prices of shares over
the last 5 market days, on which transactions in the shares were recorded, before the day on
which purchases are made. The Maximum Price for a Share in relation to Market Purchases by
us, referred to in paragraph (d) of the section entitled “The Terms of the Share Buy-back Mandate”
of this Appendix, conforms to this restriction.
Additionally, the Listing Manual also specifies that a listed company shall report all purchases or
acquisitions of its shares to the SGX-ST not later than 9.00 a.m.:
(a) in the case of a Market Purchase, on the Market Day following the day of purchase of any
of its shares; and
(b) in the case of an Off-Market Purchase under an equal access scheme, on the second Market
Day after the close of acceptances of the offer.
While the Listing Manual does not expressly prohibit any purchase of shares by a listed company
during any particular time, because the listed company would be regarded as an “insider” in
relation to any proposed purchase or acquisition of its issued shares, we will not undertake any
purchase or acquisition of Shares pursuant to the Share Buy-back Mandate at any time after any
matter or development of a price-sensitive nature has occurred or has been the subject of
consideration and/or a decision of the Board until such price-sensitive information has been
publicly announced. Further, in conformity with the best practices on dealing with securities under
the Listing Manual, we will not purchase or acquire any Shares through Market Purchases during
the period commencing two (2) weeks before the announcement of our financial statements for
each of the first three-quarters of our FY, or one (1) month immediately preceding our annual
(full-year) results announcement respectively.
TAKE-OVER OBLIGATIONS
Appendix 2 of the Take-over Code contains the Share Buy-Back Guidance Note applicable as at
the Latest Practicable Date. The take-over implications arising from any purchase or acquisition
by us of our Shares are set out below:
(a) Obligation to Make a Take-over Offer
Pursuant to the Take-over Code, an increase of a shareholder’s proportionate interest in our
voting rights resulting from a share buy back by us will be treated as an acquisition for the
purposes of Rule 14 of the Take-over Code (“Rule 14”).
Under Rule 14, a Shareholder and persons acting in concert with the Shareholder will incur
an obligation to make a mandatory take-over offer if, inter alia, he and persons acting in
concert with him increase their voting rights in the Company to 30% or more or, if they,
together holding between 30% and 50% of the Company’s voting rights, increase their voting
rights in the Company by more than 1% in any period of 6 months.
APPENDIX H – INFORMATION ON THE SHARE BUY BACK MANDATE
H-9
(b) Persons Acting in Concert
Under the Take-over Code, persons acting in concert comprise individuals or companies
who, pursuant to an agreement or understanding (whether formal or informal), cooperate,
through the acquisition by any of them of shares in a company, to obtain or consolidate
effective control of that company.
Unless the contrary is established, the following persons will, inter alia, be presumed to be
acting in concert:
(i) 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);
(ii) A company with its parent company, subsidiaries, its fellow subsidiaries, any associated
companies of the above companies, and any company whose associated companies
include any of the above companies. For this purpose, a company is an associated
company of another company if the second company owns or controls at least 20% but
not more than 50% of the voting rights of the first-mentioned company;
(iii) A company with any of its pension funds and employee share schemes;
(iv) A person with any investment company, unit trust or other fund in respect of the
investment account which such person manages on a discretionary basis;
(v) A financial or other professional adviser, with its clients in respect of the shareholdings
of the adviser and the persons controlling, controlled by or under the same control as
the adviser and all the funds which the adviser manages on a discretionary basis, where
the shareholding of the adviser and any of those funds in the client total 10% or more
of the client’s equity share capital;
(vi) Directors of a company, together with their close relatives, related trusts and companies
controlled by any of them, which is subject to an offer where they have reason to believe
a bona fide offer for their company may be imminent;
(vii) Partners; and
(viii) An individual, his close relatives, his related trusts, and any person who is accustomed
to act according to the instructions and companies controlled by any of the above.
The circumstances under which our Shareholders (including our Directors) and persons
acting in concert with them respectively will incur an obligation to make a take-over offer
under Rule 14 after a purchase or acquisition of our Shares by us are set out in Appendix 2
of the Take-over Code.
(c) Effect of Rule 14 and Appendix 2 of the Take-over Code
In general terms, the effect of Rule 14 and Appendix 2 is that, unless exempted, directors of
a company and persons acting in concert with them will incur an obligation to make a
take-over offer for the company under Rule 14 if, as a result of the company purchasing or
acquiring its shares, the voting rights of such directors and their concert parties would
APPENDIX H – INFORMATION ON THE SHARE BUY BACK MANDATE
H-10
increase to 30% or more, or if the voting rights of such directors and their concert parties fall
between 30% and 50% of the company’s voting rights, the voting rights of such directors and
their concert parties would increase by more than 1% in any period of six (6) months.
Under Appendix 2, a shareholder not acting in concert with the directors of the company will
not be required to make a take-over offer under Rule 14 if, as a result of the company
purchasing or acquiring its shares, the voting rights of such shareholder of the company
would increase to 30% or more, or, if such shareholder holds between 30% and 50% of the
company’s voting rights, the voting rights of such shareholder would increase by more than
1% in any period of six (6) months. Such shareholder need not abstain from voting in respect
of the resolution authorising the Share Purchase Mandate unless so required under the
Companies Act.
Save as disclosed above, our Directors have confirmed that they are not aware of any facts
or factors which suggest or imply that any particular person(s) and/or Shareholders are, or
may be regarded as parties acting in concert such that their respective interests in voting
shares in our capital should or ought to be consolidated, and consequences under the
Take-over Code would ensue as a result of a Share Buy-back.
The statements in this Appendix do not purport to be a comprehensive or exhaustive
description of all implications that may arise under the Take-over Code. Shareholders
are advised to consult their professional advisers and/or the Securities Industry
Council and/or other relevant authorities at the earliest opportunity as to whether an
obligation to make a take-over offer would arise by reason of any share purchases or
acquisitions by the Company.
SHARES PURCHASED BY THE COMPANY
We have not made any purchase of Shares in the 12 months preceding the Latest Practicable
Date.
REPORTING REQUIREMENTS UNDER THE COMPANIES ACT
Within 30 days of the passing of a Shareholders’ resolution to approve our purchase of Shares,
we shall lodge a copy of such resolution with ACRA. Within 30 days of a purchase of Shares on
the Official List of SGX-ST or otherwise, we shall lodge with ACRA the notice of the purchase in
the prescribed form, such notification including inter alia, details of the purchase, the total number
of Shares purchased by us, the total number of Shares cancelled, the number of Shares held as
treasury shares, our issued ordinary share capital before the purchase and after the purchase of
Shares, the amount of consideration we paid for the purchase, and whether the Shares were
purchased out of our profits or capital.
APPENDIX H – INFORMATION ON THE SHARE BUY BACK MANDATE
H-11
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TAXATION
The following discussions regarding taxation are general in nature and based on the current tax
legislation of Singapore and administrative guidelines issued by the relevant authorities in force
as at the date of this Prospectus 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, where
such 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 discussions below are not to be regarded as
legal or tax advice. The discussion is limited to a general description of certain tax consequences
in Singapore with respect to the subscription for, acquisition, holding and disposal of our Shares
by investors, and does not purport to be a comprehensive nor exhaustive description of all of the
tax considerations that may be relevant to the subscription for, acquisition, holding and disposal
of our Shares. Prospective investors should consult their tax advisors regarding Singapore tax
and other tax consequences of subscribing for, acquiring, holding and disposing our Shares. It is
emphasised that neither our Company, our Directors nor any other persons involved in the
Offering accepts responsibility for any tax effects or liabilities resulting from the subscription for,
acquisition, holding or disposal of our Shares.
SINGAPORE INCOME TAX
General
Singapore tax residents are subject to Singapore income tax on income that is accrued in or
derived from Singapore and on foreign income received in Singapore, subject to certain
exceptions.
Non-resident corporate taxpayers are subject to income tax on income that is accrued in or
derived from Singapore, and on foreign income received in Singapore, subject to certain
exceptions. All individual resident and non-resident, subject to certain exceptions, are subject to
income tax on the income accrued in or derived from Singapore. All foreign-source income
received in Singapore by all individuals will be exempt from Singapore tax. The latter exemption
will not apply to such income received from a partnership in Singapore.
A company is tax resident in Singapore if the control and management of its business is exercised
in Singapore. An individual is tax resident in Singapore in a year of assessment if, in the preceding
year, he was physically present in Singapore or exercised an employment in Singapore (other
than as a director of a company) for 183 days or more, or if he resides in Singapore.
With effect from year of assessment 2010 (i.e. financial year ending 2009), the corporate tax rate
is 17%. In addition, 75% of the first S$10,000 and 50% of the next S$290,000 of the company’s
income chargeable to tax at the prevailing corporate tax rate will be exempt from corporate income
tax. In addition, companies will receive a 30% corporate tax rebate for the years of assessment
2013, 2014 and 2015, subject to a cap of S$30,000 per year of assessment.
For a Singapore tax resident individual, the rate of tax varies according to the individual’s
circumstances but is subject to a current maximum rate of 20%.
APPENDIX I – TAXATION
I-1
Dividend Distributions
Singapore operates a one-tier corporate tax system under which the tax on corporate profits is a
final tax and all dividends paid by Singapore tax resident companies to their shareholders are
exempt from further Singapore tax (referred hereinafter as “one-tier tax exempt dividends”).
Furthermore, there is no dividend withholding tax in Singapore.
Gains on Disposal of our Shares
Singapore does not impose tax on capital gains. However, there are no specific laws or
regulations which deal with the characterisation of capital gains. Accordingly, gains arising from
the disposal of our Shares may be construed to be of an income nature (and hence subject to
corporate income tax) to the extent that the gains arise from activities which the IRAS regards as
the carrying on of a trade in Singapore.
In addition, shareholders who apply, or who are required to apply, the Singapore Financial
Reporting Standard 39 – Financial Instruments: Recognition and Measurement (“FRS 39”) for the
purposes of Singapore income tax may be required to recognise gains or losses (not being gains
or losses in the nature of capital) in accordance with the provisions of FRS 39 (as modified by the
applicable provisions of Singapore income tax law) even though no sale or disposal of our Shares
is made. Shareholders who may be subject to this tax treatment should consult their accounting
and tax advisers regarding the Singapore income tax consequences of their subscription for,
acquisition, holding and disposal of our Shares.
Stamp Duty
There is no stamp duty payable on the subscription of our Shares.
Stamp duty is payable on the instrument of transfer of our Shares at the rate of S$2.00 for every
S$1,000 of the consideration for, or the market value of, our Shares whichever is higher.
The purchaser is liable for stamp duty, unless there is an agreement to the contrary. No stamp duty
is payable if no instrument of transfer is executed or the instrument of transfer is executed outside
Singapore. However, stamp duty will generally be payable if the instrument of transfer which is
executed outside Singapore is received in Singapore.
The abovementioned stamp duty is not applicable to electronic transfers of our shares through the
CDP.
Goods and Services Tax (“GST”)
The sale of our Shares by a GST-registered investor belonging in Singapore to another person
belonging in Singapore is an exempt supply not subject to GST. In this regard, the GST incurred
by the GST-registered investor in making such supplies will generally not be recoverable to the
GST-registered person.
Where our Shares are sold 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 will be considered a
taxable supply subject to GST at zero-rate (i.e. 0%). Subject to the provision of the GST Act, any
GST incurred by the GST-registered investor in the making of such taxable supply in the course
of or furtherance of a business, may be recoverable from the Comptroller of GST.
APPENDIX I – TAXATION
I-2
Services such as brokerage, handling and clearing services, 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 in connection with the investor’s subscription for, acquisition, sale or
disposal of our Shares will be subject to GST at the prevailing standard rate of 7%. Similar
services rendered to an investor belonging outside Singapore, and who is outside Singapore when
the services are supplied, will be subject to GST at zero-rate.
APPENDIX I – TAXATION
I-3
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Applications are invited for the subscription of the New Shares at the offering price of S$0.95 per
New Share (the “Offering Price”) on the terms and conditions set out below and in the printed
application forms to be used for the purpose of the Offering and which forms part of the
Prospectus (the “Application Forms”) or, as the case may be, the Electronic Applications (as
defined below).
Investors applying for the New Shares in the Offering by way of Application Forms or Electronic
Applications are required to pay, in Singapore dollars, the Offering Price of S$0.95 per New Share,
subject to a refund of the full amount or, as the case may be, the balance of the application monies
(in each case without interest or any share of revenue or other benefit arising therefrom and
without any right or claim against us and the Joint Issue Managers, Bookrunners and
Underwriters) where (i) an application is rejected or accepted in part only, or (ii) if the Offering
does not proceed for any reason.
(1) Your application must be made in lots of 1,000 New Shares or integral multiples
thereof. Your application for any other number of New Shares will be rejected.
(2) You may apply for the New Shares only during the period commencing at 7.00 p.m. on 4
December 2014 and expiring at 12.00 p.m. on 9 December 2014. The Offering period may
be extended or shortened to such date and/or time as our Company may, in consultation with
the Joint Issue Managers, Bookrunners and Underwriters, decide, subject to all applicable
laws and regulations and the rules of the SGX-ST.
(3) (a) Your application for the New Shares offered in the Public Offer (the “Public Offer
Shares”) may be made by way of the printed WHITE Public Offer Shares Application
Forms or by way of Automated Teller Machines (“ATM”) belonging to the Participating
Banks (“ATM Electronic Applications”) or the Internet Banking (“IB”) website of the
relevant Participating Banks (“Internet Electronic Applications”), or DBS Bank’s
mobile banking interface of DBS Bank (“mBanking Applications” which, together with
ATM Electronic Applications and Internet Electronic Applications, shall be referred to as
“Electronic Applications”).
(b) Your application for the New Shares offered in the Placement (the “Placement Shares”)
may be made by way of the printed BLUE Placement Shares Application Forms (or in
such other manner as the Joint Issue Managers, Bookrunners and Underwriters may in
its absolute discretion deem appropriate).
(4) UNLESS PERMISSIBLE IN SUCH OTHER JURISDICTION, YOU MUST BE IN
SINGAPORE AT THE TIME OF MAKING THE APPLICATION FOR THE INVITATION
SHARES. YOU MAY NOT USE YOUR CENTRAL PROVIDENT FUND OR CPF INVESTIBLE
SAVINGS TO APPLY FOR THE INVITATION SHARES.
(5) Only one application may be made for the benefit of one person for the Public Offer
Shares in his own name. Multiple applications for the Public Offer Shares will be
rejected, except in the case of applications by approved nominee companies where
each application is made on behalf of a different beneficiary.
You may not submit multiple applications for the Public Offer Shares via the Public
Offer Shares Application Form, or Electronic Applications. A person who is submitting
an application for the Public Offer Shares by way of the Public Offer Shares
Application Form may not submit another application for the Public Offer Shares by
way of Electronic Applications and vice versa.
APPENDIX J – TERMS, CONDITIONS AND PROCEDURES FOR APPLICATION
AND ACCEPTANCE OF THE NEW SHARES IN SINGAPORE
J-1
A person, other than an approved nominee company, who is submitting an application
for the Public Offer Shares in his own name should not submit any other applications
for the Public Offer Shares, whether on a printed Public Offer Shares Application Form
or by way of an Electronic Application, for any other person. Such separate
applications will be deemed to be multiple applications and shall be rejected.
Joint or multiple applications for the Public Offer Shares shall be rejected. Persons
submitting or procuring submissions of multiple applications for the Public Offer
Shares may be deemed to have committed an offence under the Penal Code, Chapter
224 of Singapore and the Securities and Futures Act, and such applications may be
referred to the relevant authorities for investigation. Multiple applications or those
appearing to be or suspected of being multiple applications (other than as provided
herein) will be liable to be rejected at our discretion.
(6) Multiple applications may be made in the case of applications by any person for (i) the
Placement Shares only (via Placement Shares Application Forms or such other form of
application as the Joint Issue Managers, Bookrunners and Underwriters may in their
absolute discretion deem appropriate) or (ii) the Placement Shares together with a
single application for the Public Offer Shares.
(7) Applications from any person under the age of 18 years, undischarged bankrupts, sole
proprietorships, partnerships, chops or non-corporate bodies, joint Securities Account
holders of CDP will be rejected.
(8) Applications from any person whose addresses (furnished in their printed Application Forms
or, in the case of Electronic Applications, contained in the records of the relevant
Participating Bank, as the case may be) bear post office box numbers will be rejected. 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 deceased’s name at the time of the application.
(9) The existence of a trust will not be recognised. Any application by a trustee or trustees must
be made in his/her or their own name(s) and without qualification or, where the application
is made by way of a printed Application Form by a nominee, in the name(s) of an approved
nominee company or approved nominee companies after complying with paragraph 10
below.
(10) Nominee applications may only be made by approved nominee companies. 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 nominees other than approved nominee companies will be
rejected.
(11) 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 application, your application will
be rejected (if you apply by way of an Application Form) or you will not be able to complete
your 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 your Application Form or in your Electronic
Application, as the case may be, your application is liable to be rejected.
APPENDIX J – TERMS, CONDITIONS AND PROCEDURES FOR APPLICATION
AND ACCEPTANCE OF THE NEW SHARES IN SINGAPORE
J-2
(12) Subject to paragraphs 15 and 16 below, your application is liable to be rejected if your
particulars such as name, National Registration Identity Card (“NRIC”) number or passport
number or company registration number, nationality and permanent residence status, and
Securities Account number provided in your Application Form, or in the case of an Electronic
Application, contained in the 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 by CDP. If you have more than one individual direct Securities
Account with CDP, your application shall be rejected.
(13) 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
allocation from CDP will be sent to your address last registered with CDP.
(14) This Prospectus and its accompanying documents (including the Application Forms) have
not been registered in any jurisdiction other than in Singapore. The distribution of this
Prospectus and its accompanying documents (including the Application Forms) may be
prohibited or restricted (either absolutely or unless various securities requirements, whether
legal or administrative, are complied with) in certain jurisdictions under the relevant
securities laws of those jurisdictions.
Without limiting the generality of the foregoing, neither this Prospectus and its accompanying
documents (including the Application Forms) nor any copy thereof may be taken, transmitted,
published or distributed, whether directly or indirectly, in whole or in part in or into the United
States or any other jurisdiction (other than Singapore) and they do not constitute an offer to
sell or a solicitation of an offer to buy any securities in any jurisdiction where it is unlawful
to do so. The New Shares have not been, and will not be, registered under the US Securities
Act or the securities laws of any state of the United States and may not be offered or sold
within the United States (as defined in Regulation S). The New Shares are being offered and
sold outside the United States (including to institutional and other investors in Singapore) in
offshore transactions as defined in, and in reliance on, Regulation S. There will be no public
offer of New Shares in the United States. Any failure to comply with this restriction may
constitute a violation of securities laws of applicable jurisdictions.
Our Company reserves the right to reject any application for New Shares where our
Company believes or has reason to believe that such applications may violate the
securities laws or any applicable legal or regulatory requirements of any jurisdiction.
No person in any jurisdiction outside Singapore receiving this Prospectus or its
accompanying documents (including the Application Forms) may treat the same as an offer
or invitation to subscribe for any New Shares unless such an offer or invitation could lawfully
be made without compliance with any regulatory or legal requirements in those jurisdictions.
(15) Our Company reserves the right to reject any application which does not conform strictly to
the instructions or with the terms and conditions set out in this Prospectus (including the
instructions set out in the accompanying Application Forms, in the ATMs and IB websites of
the relevant Participating Banks and the mobile banking interface (“mBanking Interface”) of
DBS Bank) or, in the case of an application by way of an Application Form, the contents of
which is illegible, incomplete, incorrectly completed or which is accompanied by an
improperly drawn up or improper form of remittance.
APPENDIX J – TERMS, CONDITIONS AND PROCEDURES FOR APPLICATION
AND ACCEPTANCE OF THE NEW SHARES IN SINGAPORE
J-3
Without prejudice to the rights of the Company, the Joint Issue Managers, Bookrunners and
Underwriters, as agents of the Company, have been authorised to accept, for and on behalf
of the Company, such other forms of application as the Joint Issue Managers, Bookrunners
and Underwriters deem appropriate.
(16) Our Company further reserves the right to treat as valid any applications not completed or
submitted or effected in all respects in accordance with the instructions and terms and
conditions set out in this Prospectus (including the instructions set out in the accompanying
Application Forms and in the ATMs and IB websites of the relevant Participating Banks and
the mBanking Interface of DBS Bank), 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.
(17) Our Company reserves 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 none of our Company
and/or the Joint Issue Managers, Bookrunners and Underwriters will entertain any enquiry
and/or correspondence on the decision of our Company. This right applies to applications
made by way of Application Forms and by way of Electronic Applications and by such other
forms of application as the Joint Issue Managers, Bookrunners and Underwriters may, in
consultation with our Company, deem appropriate. In deciding the basis of allocation, our
Company, in consultation with Joint Issue Managers, Bookrunners and Underwriters, will
give due consideration to the desirability of allocating the New Shares to a reasonable
number of applicants with a view to establishing an adequate market for the New Shares.
(18) In the event that our Company lodges a supplementary or replacement prospectus
(“Relevant Document”) pursuant to the Securities and Futures Act or any applicable
legislation in force from time to time prior to the close of the Offering, and the New Shares
have not been issued, our Company will (as required by law) 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; or
(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 refund your application monies
(without interest or any share of revenue or other benefit arising therefrom) to you within
seven (7) days from the lodgement of the Relevant Document.
Any applicant who wishes to exercise his option under paragraphs 18(a) and (b) above to
withdraw his application shall, within 14 days from the date of lodgement of the Relevant
Document, notify our Company whereupon our Company shall, within seven (7) days from
the receipt of such notification, return all monies in respect of such application (without
interest or any share of revenue or other benefit arising therefrom).
APPENDIX J – TERMS, CONDITIONS AND PROCEDURES FOR APPLICATION
AND ACCEPTANCE OF THE NEW SHARES IN SINGAPORE
J-4
In the event that the New Shares have already been issued at the time of the lodgement of
the Relevant Document but trading has not commenced, our Company will (as required by
law) either:
(i) 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 return to our
Company the New 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; or
(ii) 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 New Shares
which you do not wish to retain title in; or
(iii) deem your application as withdrawn and cancelled and refund your payment for the
New Shares (without interest or any share of revenue or other benefit arising therefrom)
within seven (7) days from the lodgement of the Relevant Document.
Any applicant who wishes to exercise his option under paragraphs 18(i) and (ii) above to
return the New Shares issued to him shall, within 14 days from the date of lodgement of the
Relevant Document, notify our Company of this and return all documents, if any, purporting
to be evidence of title of those New Shares, whereupon our Company shall, within seven (7)
days from the receipt of such notification and documents, pay to him all monies paid by him
for the New Shares without interest or any share of revenue or other benefit arising therefrom
and at his own risk, and the New Shares issued to him shall be deemed to 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, may be found in such
Relevant Document.
(19) The New Shares may be reallocated between the Placement and the Public Offer for any
reason, including in the event of excess applications in one and a deficit of applications in the
other at the discretion of the Joint Issue Managers, Bookrunners and Underwriters, in
consultation with our Company, subject to any applicable laws.
(20) Subject to your provision of a valid and correct Securities Account number, share certificates
in respect of the New Shares will be registered in the name of CDP or its nominee and will
be forwarded only to CDP, at your own risk. If your application is successful, it is expected
that CDP will send to you, at your own risk, within 15 Market Days after the close of the
Offering, a statement of account stating that your Securities Account has been credited with
the number of New Shares allocated to you. This will be the only acknowledgement of
application monies received and is not an acknowledgement by our Company. 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 or transfer of the
New Shares allocated to you. This authorisation applies to applications made both by way of
Application Forms and by way of Electronic Applications.
(21) You irrevocably authorise CDP to disclose the outcome of your application, including the
number of New Shares allocated to you pursuant to your application, to our Company, the
Joint Issue Managers, Bookrunners and Underwriters and any other parties so authorised by
CDP, our Company and/or the Joint Issue Managers, Bookrunners and Underwriters.
APPENDIX J – TERMS, CONDITIONS AND PROCEDURES FOR APPLICATION
AND ACCEPTANCE OF THE NEW SHARES IN SINGAPORE
J-5
(22) Any reference to “you” or the “Applicant” in this section shall include an individual, a
corporation, an approved nominee company and trustee applying for the New Shares by way
of an Application Form or by way of Electronic Application or by such other manner as the
Joint Issue Managers, Bookrunners and Underwriters may, in its absolute discretion, deem
appropriate.
(23) By completing and delivering an Application Form and, in the case of: (i) an ATM Electronic
Application, by pressing the “Enter” or “OK” or “Confirm” or “Yes” key or any other relevant
key on the ATM, or (ii) in the case of an Internet Electronic Application or mBanking
Application, by clicking “Submit” or “Continue” or “Yes” or “Confirm” or any other button on
the IB website screen of the relevant Participating Bank or the mBanking Interface of DBS
Bank in accordance with the provisions herein, you:
(a) irrevocably agree and undertake to subscribe for the number of New Shares specified
in your application (or such smaller number for which the application is accepted) at the
Offering Price for each New Share and agree that you will accept such number of New
Shares as may be allocated to you, in each case on the terms of, and subject to the
conditions set out in, the Prospectus and its accompanying documents (including the
Application Forms) 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 Prospectus and its accompanying documents (including the
Application Forms) and those set out in the IB websites, ATMs of the Participating
Banks or the mBanking Interface of DBS Bank, the terms and conditions set out in the
Prospectus and its accompanying documents (including the Application Forms) shall
prevail;
(c) in the case of an application by way of a Public Offer Shares Application Form or an
Electronic Application, agree that the aggregate Offering Price for the Public Offer
Shares applied for is due and payable to our Company upon application;
(d) in the case of an application by way of a Placement Shares Application Form or such
other forms of application as the Joint Issue Managers, Bookrunners and Underwriters
may in its absolute discretion deem appropriate, agree that the aggregate Offering Price
for the Placement Shares applied for is due and payable to our Company upon
application;
(e) (i) consent to the collection, use, processing and disclosure of your name,
NRIC/passport number or company registration number, address, nationality,
permanent resident status, Securities Account number, share application amount,
share application details, the outcome of your application (including the number of
New Shares allocated to you pursuant to your application) and other personal data
(“Personal Data”) by the Share Registrar, CDP, Securities Clearing and Computer
Services (Pte) Ltd (“SCCS”), the SGX-ST, the Participating Banks, our Company,
the Joint Issue Managers, Bookrunners and Underwriters and/or other authorised
operators (the “Relevant Persons”) for the purpose of facilitating your application
for the New Shares, and in order for the Relevant Persons to comply with any
applicable laws, listing rules, regulations and/or guidelines and warrant that such
Personal Data is true, accurate and correct, and (ii) warrant that where you, as an
approved nominee company, disclose the Personal Data of the beneficial owner(s)
to the Relevant Persons, such disclosure is in compliance with applicable law
(collectively, the “Personal Data Privacy Terms”);
APPENDIX J – TERMS, CONDITIONS AND PROCEDURES FOR APPLICATION
AND ACCEPTANCE OF THE NEW SHARES IN SINGAPORE
J-6
(f) 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 in
determining whether to accept your application and/or whether to allocate any New
Shares to you;
(g) 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 nor
the Joint Issue Managers, Bookrunners and Underwriters will infringe any such laws as
a result of the acceptance of your application;
(h) agree and confirm that you are outside the United States; and
(i) understand that the New Shares have not been and will not be registered under the US
Securities Act or the securities laws of any state of the United States and may not be
offered or sold in the United States except pursuant to an exemption from, or in a
transaction not subject to, the registration requirements of the US Securities Act and
applicable state securities laws. There will be no public offer of the New Shares in the
United States. Any failure to comply with this restriction may constitute a violation of the
United States securities laws.
(24) Acceptance of applications will be conditional upon, among others, our Company being
satisfied that:
(a) permission has been granted by the SGX-ST to deal in and for the quotation of all of
(i) the Shares in the Company already issued; (ii) New Shares to be issued pursuant to
the Offering, (iii) Cornerstone Shares, (iv) Option Shares, (v) Award Shares, and
(vi) Additional Shares on the Main Board of the SGX-ST;
(b) each of the Management and Underwriting Agreement and the Placement Agreement,
referred to in the section on “Plan of Distribution” in this Prospectus, has become
unconditional and has not been terminated; and
(c) the Authority has not served a stop order which directs that no or no further New Shares
to which this Prospectus relates be allotted or issued (“Stop Order”). The Securities
and Futures Act provides that the Authority shall not serve a Stop Order if all the New
Shares have been issued and listed for quotation on the SGX-ST and trading in them
has commenced.
(25) In the event that a Stop Order in respect of the New Shares is served by the Authority or other
competent authority, and:
(a) where the New Shares have not been issued, (i) the Securities and Futures Act provides
that all applications shall be deemed to be withdrawn and cancelled; and (ii) our
Company shall refund the application monies (without interest or any share of revenue
or other benefit arising therefrom) to you within 14 days of the date of the Stop Order;
or
(b) where the New Shares have already been issued but trading has not commenced, (i)
the Securities and Futures Act provides that the issue will be deemed void; and (ii) our
APPENDIX J – TERMS, CONDITIONS AND PROCEDURES FOR APPLICATION
AND ACCEPTANCE OF THE NEW SHARES IN SINGAPORE
J-7
Company shall refund your payment for the New Shares (without interest or any share
of revenue or other benefit arising therefrom) to you within 14 days from the date of the
Stop Order.
This shall not apply where only an interim Stop Order has been served.
(26) In the event that an interim Stop Order in respect of the New Shares is served by the
Authority or other competent authority, no New Shares shall be issued to you until the
Authority revokes the interim Stop Order. The Authority is not able to serve a Stop Order in
respect of the New Shares if the New Shares have been issued and listed on the SGX-ST
and trading in them has commenced.
(27) Additional terms and conditions for applications by way of Application Forms are set out in
the section entitled “Additional Terms and Conditions for Applications using Printed
Application Forms” on pages J-9 to J-11 of this Prospectus.
(28) Additional terms and conditions for applications by way of Electronic Applications are set out
in the section entitled “Additional Terms and Conditions for Electronic Applications” on pages
J-14 to J-20 of this Prospectus.
(29) All payments in respect of any application for Public Offer Shares, and all refunds where (a)
an application is rejected or accepted in part only, or (b) the Offering does not proceed for
any reason, shall be made in Singapore dollars.
(30) All payments in respect of any application for Placement Shares, and all refunds where (a)
an application is rejected or accepted in part only, or (b) the Offering does not proceed for
any reason, shall be made in Singapore dollars.
(31) No application will be held in reserve.
(32) This Prospectus is dated 4 December 2014. No New Shares shall be allotted or allocated on
the basis of this Prospectus later than 6 months after the date of registration of this
Prospectus by the Authority.
APPENDIX J – TERMS, CONDITIONS AND PROCEDURES FOR APPLICATION
AND ACCEPTANCE OF THE NEW SHARES IN SINGAPORE
J-8
Additional Terms and Conditions for Applications using Printed Application Forms
Applications by way of an Application Form shall be made on, and subject to the terms and
conditions of this Prospectus, including but not limited to the terms and conditions set out below,
as well as those set out under the section entitled “Terms, Conditions and Procedures for
Application and Acceptance of the New Shares in Singapore” on pages J-1 to J-27 of this
Prospectus and the Memorandum and Articles of Association of our Company.
(1) Applications for the Public Offer Shares must be made using the printed WHITE Public Offer
Shares Application Forms and printed WHITE official envelopes “A” and “B”, accompanying
and forming part of this Prospectus.
Applications for the Placement Shares must be made using the printed BLUE Placement
Shares Application Forms (or in such manner as the Joint Issue Managers, Bookrunners and
Underwriters may in its absolute discretion deem appropriate), accompanying and forming
part of this Prospectus.
Without prejudice to the rights of our Company and the Joint Issue Managers, Bookrunners
and Underwriters, the Joint Issue Managers, Bookrunners and Underwriters, as agent of our
Company, have been authorised to accept, for and on behalf of our Company, such other
forms of application, as the Joint Issue Managers, Bookrunners and Underwriters may (in
consultation with our Company) deem appropriate.
Your attention is drawn to the detailed instructions contained in the Application Forms and
this Prospectus for the completion of the Application Forms, which must be carefully
followed. Our Company reserves the right to reject applications which do not conform
strictly to the instructions set out in the Application Forms and this Prospectus or
which are illegible, incomplete, incorrectly completed or which are accompanied by
improperly drawn remittances or improper form of remittances.
(2) You must complete your Application Forms in English. Please type or write clearly in ink
using BLOCK LETTERS.
(3) You must complete all spaces in your Application Forms except those under the heading
“FOR OFFICIAL USE ONLY” and you must write the words “NOT APPLICABLE” or “N.A.”
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 name as it
appears on your NRIC (if you have such an identification document) or in your passport and
in the case of a corporation, in your full name as registered with a competent authority. If you
are not an individual, 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 Share Registrar. Our Company
reserves the right to require you to produce documentary proof of identification for
verification purposes.
APPENDIX J – TERMS, CONDITIONS AND PROCEDURES FOR APPLICATION
AND ACCEPTANCE OF THE NEW SHARES IN SINGAPORE
J-9
(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 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
have an interest in the aggregate of more than 50.0% of the issued share capital of or
interests in such corporation. If you are an approved nominee company, you are required to
declare whether the beneficial owner of the New 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 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) You may apply and make payment for your application for the Public Offer Shares in
Singapore currency only in cash. Each application must be accompanied by a cash
remittance in Singapore currency for the full amount payable in Singapore dollars of the
Offering Price of S$0.95 for each Public Offer Share, in respect of the number of Public Offer
Shares applied for. The remittance must be in the form of a BANKER’S DRAFT or
CASHIER’S ORDER drawn on a bank in Singapore, made out in favour of “IFAST SHARE
ISSUE ACCOUNT” crossed “A/C PAYEE ONLY” with your name, Securities Account number
and address written clearly on the reverse side. Applications not accompanied by any
payment or accompanied by any other form of payment (unless otherwise permitted hereto)
will not be accepted. No combined Banker’s Draft or Cashier’s Order for different Securities
Accounts shall be accepted. Remittances bearing “NOT TRANSFERABLE” or
“NON-TRANSFERABLE” crossings will be rejected.
No acknowledgement of receipt will be issued for applications and application monies
received.
The manner and method for applications and acceptances of payment under the Placement
will be determined by the Joint Issue Managers, Bookrunners and Underwriters in their sole
discretion.
(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,
in the event of oversubscription for the Public Offer Shares, within 24 hours of the balloting
(or such shorter period as the SGX-ST may require), 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 Market Days after
the close of the Offering, PROVIDED THAT the remittance accompanying such application
APPENDIX J – TERMS, CONDITIONS AND PROCEDURES FOR APPLICATION
AND ACCEPTANCE OF THE NEW SHARES IN SINGAPORE
J-10
which has been presented for payment or other processes has been honoured and the
application monies received in the designated share issue account. If the Offering does not
proceed for any reason, the full amount of application monies (without interest or any share
of revenue or other benefit arising therefrom) will be returned to you at your own risk within
three (3) Market Days after the Offering is discontinued.
(9) Capitalised terms used in the Application Forms and defined in this Prospectus shall bear the
meanings assigned to them in this Prospectus.
(10) By completing and delivering the Application Forms, you agree that:
(a) in consideration of our Company having distributed the Application Form to you and by
completing and delivering the Application Form before the close of the Offering:
(i) your application is irrevocable;
(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; and
(iii) you represent and agree that you are located outside the United States (within the
meaning of Regulation S).
(b) all applications, acceptances or contracts resulting therefrom under the Offering 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;
(c) in respect of the Public Offer Shares for which your application has been received and
not rejected, acceptance of your application shall be constituted by written notification
by or on behalf of our Company and not otherwise, notwithstanding any remittance
being presented for payment by or on behalf of our Company;
(d) you will not be entitled to exercise any remedy of rescission for misrepresentation at
any time after acceptance of your application;
(e) reliance is placed solely on information contained in this Prospectus and that none of
our Company, the Joint Issue Managers, Bookrunners and Underwriters or any other
person involved in the Offering shall have any liability for any information not contained
therein;
(f) you accept and agree to the Personal Data Privacy Terms set out in this Prospectus;
and
(g) you irrevocably agree and undertake to subscribe for the number of Public Offer Shares
applied for as stated in the Application Form or any smaller number of such Public Offer
Shares that may be allocated to you in respect of your application. In the event that our
Company decides to allocate any smaller number of Public Offer Shares or not to
allocate any Public Offer Shares to you, you agree to accept such decision as final.
APPENDIX J – TERMS, CONDITIONS AND PROCEDURES FOR APPLICATION
AND ACCEPTANCE OF THE NEW SHARES IN SINGAPORE
J-11
Procedures Relating to Applications for the Public Offer Shares by Way of Printed
Application Forms
(1) Your application for the Public Offer Shares by way of printed Application Forms MUST be
made using the WHITE Public Offer Shares Application Forms and WHITE official envelopes
“A” and “B”.
(2) You must:
(a) enclose the WHITE Public Offer Shares Application Form, duly completed and signed,
together with the correct remittance for the full amount payable at the Offering Price in
Singapore currency in accordance with the terms and conditions of this Prospectus and
its accompanying documents, in the WHITE official envelope “A” provided;
(b) in appropriate spaces on the WHITE official envelope “A”:
(i) write your name and address;
(ii) state the number of Public Offer Shares applied for;
(iii) tick the relevant box to indicate form of payment; and
(iv) affix adequate Singapore postage.
(c) SEAL THE WHITE OFFICIAL ENVELOPE “A”;
(d) write, in the special box provided on the larger WHITE official envelope “B” addressed
to IFAST CORPORATION LTD., c/o TRICOR BARBINDER SHARE REGISTRATION
SERVICES, 80 ROBINSON ROAD, #02-00, SINGAPORE 068898, the number of
Public Offer Shares you have applied for;
(e) insert the WHITE official envelope “A” into the WHITE official envelope “B” and seal the
WHITE official envelope “B”; and
(f) affix adequate Singapore postage on the WHITE official envelope “B” (if dispatching by
ordinary post) and thereafter DESPATCH BY ORDINARY POST OR DELIVER BY
HAND the documents at your own risk to IFAST CORPORATION LTD., c/o TRICOR
BARBINDER SHARE REGISTRATION SERVICES, 80 ROBINSON ROAD, #02-00,
SINGAPORE 068898, so as to arrive by 12.00 p.m. on 9 December 2014 or such other
date(s) and time(s) as our Company may agree with the Joint Issue Managers,
Bookrunners and Underwriters. Courier services or Registered Post must NOT be
used.
(3) Applications that are illegible, incomplete or incorrectly completed or accompanied by
improperly drawn remittances or which are not honoured upon their first presentation are
liable to be rejected. Except for applications for the Placement Shares where remittance is
permitted to be submitted separately, applications for the Public Offer Shares not
accompanied by any payment or any other form of payment will not be accepted.
APPENDIX J – TERMS, CONDITIONS AND PROCEDURES FOR APPLICATION
AND ACCEPTANCE OF THE NEW SHARES IN SINGAPORE
J-12
(4) ONLY ONE APPLICATION should be enclosed in each envelope. No acknowledgement of
receipt will be issued for any application or remittance received.
Procedures Relating to Applications for the Placement Shares by Way of Printed
Application Forms
(1) Your application for the Placement Shares by way of printed Application Forms MUST be
made using the BLUE Placement Shares Application Forms.
(2) The completed and signed BLUE Placement Shares Application Form and your remittance,
in accordance with the terms and conditions of this Prospectus, for the full amount payable
at the Offering Price, as the case may be, for each Placement Share in respect of the number
of Placement Shares applied for, with your name, Securities Account number and address
clearly written 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, IFAST CORPORATION LTD., c/o
TRICOR BARBINDER SHARE REGISTRATION SERVICES, 80 ROBINSON ROAD, #02-00,
SINGAPORE 068898, to arrive by 12.00 p.m. on 9 December 2014 or such other date(s) and
time(s) as our Company may agree with the Joint Issue Managers, Bookrunners and
Underwriters. Courier services or Registered Post must NOT be used.
(3) In respect of an application for Placement Shares, you may alternatively remit your
application monies by electronic transfer to the account of DBS Bank Marina Bay Financial
Centre Branch, Current Account No. 003-710569-4 in favour of “IFAST SHARE ISSUE
ACCOUNT” by 12.00 p.m. on 9 December 2014 or such other date(s) and time(s) as our
Company may agree with the Joint Issue Managers, Bookrunners and Underwriters subject
to any limitation under applicable laws and regulations and the rules of the SGX-ST.
Applicants who remit their application monies via electronic transfer should send a copy of
the telegraphic transfer advice slip to DBS Bank Ltd., Capital Markets Group, 12 Marina
Boulevard, Level 46, Marina Bay Financial Centre Tower 3, Singapore 018982, to arrive by
12.00 p.m. on 9 December 2014 or such other date(s) and time(s) as our Company may
agree with the Joint Issue Managers, Bookrunners and Underwriters.
(4) Applications that are illegible, incomplete or incorrectly completed or accompanied by
improperly drawn remittances or which are not honoured upon their first presentation are
liable to be rejected.
(5) ONLY ONE APPLICATION should be enclosed in each envelope. No acknowledgement of
receipt will be issued for any application or remittance received.
APPENDIX J – TERMS, CONDITIONS AND PROCEDURES FOR APPLICATION
AND ACCEPTANCE OF THE NEW SHARES IN SINGAPORE
J-13
Additional Terms and Conditions for Electronic Applications
Electronic Applications shall be made on and subject to the terms and conditions of this
Prospectus, including but not limited to the terms and conditions set out below and those under
the section “Terms, Conditions and Procedures for Application and Acceptance of the New Shares
in Singapore” on pages J-1 to J-27 of this Prospectus, as well as the Memorandum and Articles
of Association of our Company.
(1) The procedures for Electronic Applications are set out on the ATM screens of the relevant
Participating Banks (in the case of ATM Electronic Applications), the IB website screens of
the relevant Participating Banks (in the case of Internet Electronic Applications) and the
mobile banking interface of DBS Bank (“mBanking Interface”) (in the case of mBanking
Applications). Currently, DBS Bank, OCBC Bank and UOB Group (each as defined below)
are the Participating Banks through which Internet Electronic Applications and ATM
Electronic Applications may be made and DBS Bank is the only Participating Bank through
which mBanking Applications may be made.
(2) For illustration purposes, the procedures for Electronic Applications for Public Offer Shares
through ATMs, the IB website and the mBanking Interface of DBS Bank (together the
“Steps”) are set out in pages J-21 to J-27 of this Prospectus. The Steps set out the actions
that you must take at ATMs, the IB website or the mBanking Interface of DBS Bank to
complete an Electronic Application. The actions that you must take at the ATMs or the IB
websites of the other Participating Banks are set out on the ATM screens or the IB website
screens of the respective Participating Banks. Please read carefully the terms and conditions
of this Prospectus and its accompanying documents (including the Application Forms), the
Steps and the terms and conditions for Electronic Applications set out below before making
an Electronic Application.
(3) Any reference to “you” or the “Applicant” in these Additional Terms and Conditions for
Electronic Applications and the Steps shall refer to you making an application for Public Offer
Shares through an ATM of one of the relevant Participating Banks or the IB website of a
relevant Participating Bank or the mBanking Interface of DBS Bank.
(4) If you are making an ATM Electronic Application:
(a) You must have an existing bank account with and be an ATM cardholder of one of the
Participating Banks. An ATM card issued by one Participating Bank cannot be used to
apply for Public Offer Shares at an ATM belonging to other Participating Banks.
(b) 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 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 Electronic Application liable to
be rejected.
APPENDIX J – TERMS, CONDITIONS AND PROCEDURES FOR APPLICATION
AND ACCEPTANCE OF THE NEW SHARES IN SINGAPORE
J-14
(c) Upon the completion of your ATM Electronic Application, you will receive an ATM
transaction slip (“Transaction Record”), confirming the details of your ATM Electronic
Application. The Transaction Record is for your retention and should not be submitted
with any printed Application Form.
(5) If you are making an Internet Electronic Application or an mBanking Application:
(a) You must have an existing bank account with, and a User Identification (“User ID”) as
well as a Personal Identification Number (“PIN”) given by, the relevant Participating
Bank.
(b) You must ensure that the mailing address of your account selected for the application
is in Singapore and you must declare that the application is being made in Singapore.
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 you make the application.
(c) Upon the completion of your Internet Electronic Application through the IB website of
the relevant Participating Bank or your mBanking Application through the mBanking
Interface of DBS Bank, there will be an on-screen confirmation (“Confirmation
Screen”) of the application which can be printed out or screen captured by you for your
record. This printed record or screen capture of the Confirmation Screen is for your
retention and should not be submitted with any printed Application Form.
(6) In connection with your Electronic Application for Public Offer Shares, you are required to
confirm statements to the following effect in the course of activating the Electronic
Application:
(a) that you have received a copy of the Prospectus (in the case of ATM Electronic
Applications) and have read, understood and agreed to all the terms and conditions of
application for the Public Offer Shares and the Prospectus prior to effecting the
Electronic Application and agree to be bound by the same;
(b) that, for the purposes of facilitating your application, you consent to the collection, use
and disclosure, by the relevant Participating Bank, of your name, NRIC/passport
number, address, nationality, Securities Account number, CPF investment account
number, share application details and other personal data (the “Relevant Particulars”)
from your records with the relevant Participating Bank, to our Share Registrar, the
SGX-ST, CDP, CPF, SCCS, our Company and the Joint Issue Managers, Bookrunners
and Underwriters (the “Relevant Parties”); and
(c) where you are applying for the Public Offer Shares, that this is your only application for
the Public Offer Shares and it is made in your name and at your own risk.
Your application will not be successfully completed and cannot be recorded as a completed
transaction unless you press the “Enter” or “OK” or “Confirm” or “Yes” 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 or the mBanking Interface. By doing so, you shall
be treated as signifying your confirmation of each of the three (3) statements above. In
respect of statement 6(b) above, your confirmation, by pressing the “Enter” or “OK” or
“Confirm” or “Yes” or any other relevant key in the ATM or clicking “Confirm” or “OK” or
APPENDIX J – TERMS, CONDITIONS AND PROCEDURES FOR APPLICATION
AND ACCEPTANCE OF THE NEW SHARES IN SINGAPORE
J-15
“Submit” or “Continue” or “Yes” or any other relevant button on the IB website screen or the
mBanking Interface, 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 that Participating Bank of the Relevant
Particulars of your account(s) with that Participating Bank to the Relevant Parties.
By making an Electronic Application you confirm that you are not applying for the Public 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 shall make only one
Electronic Application for the Public Offer Shares and shall not make any other application
for the Public Offer Shares whether at the ATMs of any Participating Bank, the IB websites
of the relevant Participating Banks or the mBanking Interface of DBS Bank or on the
Application Forms. Where you have made an application for the Public Offer Shares on an
Application Form, you shall not make an Electronic Application for the Public Offer Shares
and vice versa.
(7) You must have sufficient funds in your bank account with your Participating Bank at the time
you make your ATM Electronic Application, Internet Electronic Application or mBanking
Application, failing which such Electronic Application will not be completed. Any Electronic
Application which does not conform strictly to the instructions set out in this Prospectus or
on the screens of the ATMs or on the IB website of the relevant Participating Bank or the
mBanking Interface of DBS Bank, as the case may be, through which your Electronic
Application is being made shall be rejected.
(8) You may apply and make payment for your application for the Public Offer Shares in
Singapore currency through any ATM or IB website of your Participating Bank or the
mBanking Interface of DBS Bank (as the case may be) by authorising your Participating Bank
to deduct the full amount payable from your bank account(s) with such Participating Bank.
(9) You irrevocably agree and undertake to subscribe for and to accept the number of Public
Offer Shares applied for as stated on the Transaction Record or the Confirmation Screen or
any lesser number of such Public Offer Shares that may be allocated to you in respect of your
Electronic Application. In the event that our Company decides to allocate any lesser number
of such Public Offer Shares or not to allocate any Public 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 “OK” or “Confirm” or “Yes” or any other relevant key
in the ATM or clicking “Confirm” or “OK” or “Submit” or “Continue” or “Yes” or any other
relevant button on the IB website screen or the mBanking Interface of DBS Bank) of the
number of Public Offer Shares applied for shall signify and shall be treated as your
acceptance of the number of Public Offer Shares that may be 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
renounce any instrument of transfer and/or other documents required for the transfer of the
Public Offer Shares that may be allocated to you and your agreement to be bound by the
Memorandum and Articles of Association of our Company.
APPENDIX J – TERMS, CONDITIONS AND PROCEDURES FOR APPLICATION
AND ACCEPTANCE OF THE NEW SHARES IN SINGAPORE
J-16
(10) Our Company will not keep any application in reserve. Where your Electronic Application is
unsuccessful, the full amount of the application monies will be returned (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, at your own risk within 24 hours of the
balloting (or such shorter period as the SGX-ST may require) provided that the remittance in
respect of such application which has been presented for payment or other processes has
been honoured and the application monies received in the designated share issue account.
Where your Electronic Application is rejected or accepted in part only, the balance of the
application monies, as the case may be, will be returned (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, at your own risk within 14 Market Days after the close
of the Offering provided that the remittance in respect of such application which has been
presented for payment or other processes has been honoured and the application monies
received in the designated share issue account.
In the case of the Public Offer, if the Offering does not proceed for any reason, the full
amount of application monies (without interest or any share of revenue or other benefit
arising therefrom) will be returned to you at your own risk within three (3) Market Days after
the Offering is discontinued.
Responsibility for timely refund of application monies (whether from unsuccessful or partially
successful Electronic Applications or otherwise) 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 money to you from an unsuccessful
or partially successful Electronic Application, to determine the exact number of Public Offer
Shares, if any, allocated to you before trading the Shares on the SGX-ST. None of the
SGX-ST, CDP, SCCS, the Participating Banks, our Company or the Joint Issue Managers,
Bookrunners and Underwriters 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.
(11) If your Electronic Application is unsuccessful, no notification will be sent by the relevant
Participating Bank.
APPENDIX J – TERMS, CONDITIONS AND PROCEDURES FOR APPLICATION
AND ACCEPTANCE OF THE NEW SHARES IN SINGAPORE
J-17
(12) Applicants who make ATM Electronic Applications through the ATMs of the following
Participating Banks may check the provisional results of their ATM Electronic Applications as
follows:
Bank Telephone Other Channels Operating Hours
Service
expected
from
DBS Bank Ltd.
(including POSB)
(“DBS Bank”)
1800 339 6666
(for POSB
account holders)
1800 111 1111
(for DBS account
holders)
IBhttp://www.dbs.com
(1)
24 hours a day Evening of the
balloting day
Oversea-Chinese
Banking
Corporation
Limited
(“OCBC Bank”)
1800 363 3333 Phone Banking/ATM/IBhttp://www.ocbc.com
(2)
24 hours a day Evening of the
balloting day
United Overseas
Bank Limited
(“UOB”) and its
subsidiary, Far
Eastern Bank
Limited
(“UOB Group”)
1800 222 2121 ATM (Other Transactions
“IPO Results
Enquiry”)/Phone
Banking/Internet Bankinghttp://www.uobgroup.com
(3)
24 hours a day Evening of the
balloting day
Notes:
(1) Applicants who have made Internet Electronic Applications through the IB websites of DBS Bank or mBanking
Applications through the mBanking Interface of DBS Bank may also check the results of their applications
through the same channels listed in the table above in relation to ATM Electronic Applications made at the
ATMs of DBS Bank.
(2) Applicants who have made Electronic Application through the ATMs of OCBC Bank may check the results of
their applications through OCBC Bank Personal Internet Banking, OCBC Bank ATMs or OCBC Bank Phone
Banking services.
(3) Applicants who have made Electronic Application through the ATMs or the IB website of the UOB Group may
check the results of their applications through UOB Personal Internet Banking, UOB Group ATMs or UOB
Phone Banking services.
(13) ATM Electronic Applications shall close at 12.00 p.m. on 9 December 2014 or such other
date(s) and time(s) as our Company may agree with the Joint Issue Managers, Bookrunners
and Underwriters. All Internet Electronic Applications and mBanking Applications must be
received by 12.00 p.m. on 9 December 2014, or such other date(s) and time(s) as our
Company may agree with the Joint Issue Managers, Bookrunners and Underwriters. Internet
Electronic Applications and mBanking Applications are deemed to be received when they
enter the designated information system of the relevant Participating Bank.
(14) You are deemed to have irrevocably requested and authorised our Company to:
(a) register the Public Offer Shares allocated to you in the name of CDP for deposit into
your Securities Account;
(b) send the relevant Share certificate(s) to CDP;
APPENDIX J – TERMS, CONDITIONS AND PROCEDURES FOR APPLICATION
AND ACCEPTANCE OF THE NEW SHARES IN SINGAPORE
J-18
(c) return or refund (without interest or any share of revenue earned or other benefit arising
therefrom) the application monies, should your Electronic Application be rejected, by
automatically crediting your bank account with your Participating Bank, at your own risk
with the relevant amount within 24 hours after balloting (or such shorter period as the
SGX-ST may require), or within three (3) Market Days if the Offering does not proceed
for any reason, after the close or discontinuation (as the case may be) of the Offering,
PROVIDED THAT the remittance in respect of such application which has been
presented for payment or such other processes has been honoured and application
monies received in the designated share issue account; 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
rejected or accepted in part only, by automatically crediting your bank account with your
Participating Bank, at your risk, with the relevant amount within 14 Market Days after
the close of the Offering, PROVIDED THAT the remittance in respect of such
application which has been presented for payment or such other processes has been
honoured and application monies received in the designated share issue account.
(15) You irrevocably agree and acknowledge that your Electronic Application is subject to risks of
electrical, electronic, technical and computer-related faults and breakdown, fires, acts of God
and other events beyond the control of the Participating Banks, our Company and the Joint
Issue Managers, Bookrunners and Underwriters, and if, in any such event our Company, the
Joint Issue Managers, Bookrunners and Underwriters, CDP and/or the relevant Participating
Bank do not receive your Electronic Application, or any 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, the Joint Issue Managers, Bookrunners and Underwriters, CDP and/or the
relevant Participating Bank for any Public Offer Shares applied for or for any compensation,
loss or damage.
(16) The existence of a trust will not be recognised. Any Electronic Application by a trustee must
be made in his own name and without qualification. Our Company shall reject any application
by any person acting as nominee (other than approved nominee companies).
(17) All your particulars in the records of your Participating Bank at the time you make your
Electronic Application shall be deemed to be true and correct and your Participating Bank
and the Relevant Persons shall be entitled to rely on the accuracy thereof. If there has been
any change in your particulars after making your Electronic Application, you must promptly
notify your Participating Bank.
(18) 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 allocation will be sent to your address last registered with
CDP.
APPENDIX J – TERMS, CONDITIONS AND PROCEDURES FOR APPLICATION
AND ACCEPTANCE OF THE NEW SHARES IN SINGAPORE
J-19
(19) By making and completing an Electronic Application, you are deemed to have agreed that:
(a) in consideration of our Company making available the Electronic Application facility,
through the Participating Banks acting as agents of our Company, at the ATMs and IB
websites of the relevant Participating Banks and the mBanking Interface of DBS Bank:
(i) your Electronic Application is irrevocable;
(ii) your Electronic Application, the acceptance by our Company and the contract
resulting therefrom under the Public Offer 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; and
(iii) you represent and agree that you are not located in the United States (within the
meaning of Regulation S);
(b) none of CDP, our Company, the Joint Issue Managers, Bookrunners and Underwriters
and the Participating Banks 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 or the SGX-ST due to breakdowns or failure of
transmission, delivery or communication facilities or any risks referred to in paragraph
15 above or to any cause beyond their respective controls;
(c) in respect of the Public 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 for rescission for misrepresentation at
any time after acceptance of your application;
(e) reliance is placed solely on information contained in this Prospectus and that none of
our Company, the Joint Issue Managers, Bookrunners and Underwriters or any other
person involved in the Offering shall have any liability for any information not contained
therein; and
(f) you irrevocably agree and undertake to subscribe for the number of Public Offer Shares
applied for as stated in your Electronic Application or any smaller number of such Public
Offer Shares that may be allocated to you in respect of your Electronic Application. In
the event our Company decides to allocate any smaller number of such Public Offer
Shares or not to allocate any Public Offer Shares to you, you agree to accept such
decision as final.
APPENDIX J – TERMS, CONDITIONS AND PROCEDURES FOR APPLICATION
AND ACCEPTANCE OF THE NEW SHARES IN SINGAPORE
J-20
Steps for ATM Electronic Applications for Public Offer Shares through ATMs of DBS Bank
(including POSB ATMs)
Instructions for ATM Electronic Applications will appear on the ATM screens of the respective
Participating Bank. For illustration purposes, the steps for making an ATM Electronic Application
through a DBS Bank or POSB ATM are shown below. Certain words appearing on the screen are
in abbreviated form (“A/C”, “amt”, “appln”, “&”, “I/C”, “No.”, “SGX” and “Max” refer to “Account”,
“amount”, “application”, “and”, “NRIC”, “Number”, “SGX-ST” and “Maximum”, respectively).
Instructions for ATM Electronic Applications on the ATM screens of Participating Banks (other than
DBS Bank (including POSB)), may differ slightly from those represented below.
Step 1: Insert your personal DBS Bank or POSB ATM Card.
2: Enter your Personal Identification Number.
3: Select “MORE SERVICES”.
4: Select language (for customers using multi-language card).
5: Select “ESA-IPO SHARE/INVESTMENTS”.
6: Select “ELECTRONIC SECURITY APPLN (IPOS/BOND/ST-OTES/SECURITIES)”.
7: Read and understand the following statements which will appear on the screen:
• THE OFFER OF SECURITIES (OR UNITS OF SECURITIES) WILL BE MADE
IN, OR ACCOMPANIED BY, A COPY OF THE PROSPECTUS/DOCUMENT OR
PROFILE STATEMENT (AND IF APPLICABLE, A COPY OF THE
REPLACEMENT OR SUPPLEMENTARY PROSPECTUS/DOCUMENT OR
PROFILE STATEMENT) WHICH CAN BE OBTAINED FROM ANY DBS/POSB
BRANCH IN SINGAPORE AND, WHERE APPLICABLE, THE VARIOUS
PARTICIPATING BANKS DURING BANKING HOURS, SUBJECT TO
AVAILABILITY.
• (IN THE CASE OF SECURITIES OFFERING THAT IS SUBJECT TO A
PROSPECTUS/OFFER INFORMATION/DOCUMENT REGISTERED WITH
THE MONETARY AUTHORITY OF SINGAPORE) ANYONE WISHING TO
ACQUIRE THESE SECURITIES (OR UNITS OF SECURITIES) SHOULD READ
THE PROSPECTUS/DOCUMENT OR PROFILE STATEMENT (AS
SUPPLEMENTED OR REPLACED, IF APPLICABLE) BEFORE SUBMITTING
HIS APPLICATION WHICH WILL NEED TO BE MADE IN THE MANNER SET
OUT IN THE PROSPECTUS/DOCUMENT OR PROFILE STATEMENT (AS
SUPPLEMENTED OR REPLACED, IF APPLICABLE). A COPY OF THE
PROSPECTUS/DOCUMENT OR PROFILE STATEMENT, AND IF
APPLICABLE, A COPY OF THE REPLACEMENT OR SUPPLEMENTARY
PROSPECTUS/DOCUMENT OR PROFILE STATEMENT HAS BEEN LODGED
WITH AND REGISTERED BY THE MONETARY AUTHORITY OF SINGAPORE
WHO ASSUMES NO RESPONSIBILITY FOR ITS OR THEIR CONTENTS.
APPENDIX J – TERMS, CONDITIONS AND PROCEDURES FOR APPLICATION
AND ACCEPTANCE OF THE NEW SHARES IN SINGAPORE
J-21
• (IN THE CASE OF SECURITIES OFFERING THAT DOES NOT REQUIRE A
PROSPECTUS TO BE REGISTERED WITH THE MONETARY AUTHORITY OF
SINGAPORE) THE OFFER OF SECURITIES (OR UNITS OF SECURITIES)
MAY BE MADE IN A NOTICE PUBLISHED IN A NEWSPAPER AND/OR A
CIRCULAR/DOCUMENT DISTRIBUTED TO SECURITY HOLDERS. ANYONE
WISHING TO ACQUIRE SUCH SECURITIES (OR UNITS OF SECURITIES)
SHOULD READ THE NOTICE/CIRCULAR/DOCUMENT BEFORE
SUBMITTING THIS APPLICATION, WHICH WILL NEED TO BE MADE IN THE
MANNER SET OUT IN THE NOTICE/CIRCULAR/DOCUMENT.
PRESS THE “ENTER” KEY TO CONFIRM THAT YOU HAVE READ AND
UNDERSTOOD.
8: Select “IFAST” to display details.
9: Press the “ENTER” key to acknowledge.
• YOU HAVE READ, UNDERSTOOD AND AGREED TO ALL TERMS OF THE
APPLICATION AND (WHERE APPLICABLE) THE PROSPECTUS, OFFER
INFORMATION STATEMENT, DOCUMENT, PROFILE STATEMENT,
REPLACEMENT OR SUPPLEMENTARY PROSPECTUS/ DOCUMENT/
PROFILE STATEMENT NOTICE AND/OR CIRCULAR.
• FOR THE PURPOSES OF FACILITATING YOUR APPLICATION, YOU
CONSENT TO THE BANK COLLECTING AND USING YOUR NAME,
NRIC/PASSPORT NUMBER, ADDRESS, NATIONALITY, CDP SECURITIES
ACCOUNT NUMBER, CPF INVESTMENT ACCOUNT NUMBER, APPLICATION
DETAILS AND OTHER PERSONAL DATA AND DISCLOSING THE SAME
FROM OUR RECORDS TO REGISTRARS OF SECURITIES OF THE ISSUER,
SGX, CDP, CPF, ISSUER/VENDOR(S) AND ISSUE MANGER(S).
• FOR FIXED AND MAX PRICE SECURITIES APPLICATION, THIS IS YOUR
ONLY APPLICATION AND IT IS MADE IN YOUR OWN NAME AND AT YOUR
OWN RISK.
• THE MAXIMUM PRICE FOR EACH SECURITY IS PAYABLE IN FULL ON
APPLICATION AND SUBJECT TO REFUND IF THE FINAL PRICE IS LOWER.
• FOR TENDER SECURITIES APPLICATION, THIS IS YOUR ONLY
APPLICATION AT THE SELECTED TENDER PRICE AND IT IS MADE IN YOUR
OWN NAME AND AT YOUR OWN RISK.
• YOU ARE NOT A US PERSON AS REFERRED TO IN (WHERE APPLICABLE)
THE PROSPECTUS, OFFER INFORMATION STATEMENT, DOCUMENT,
PROFILE STATEMENT, REPLACEMENT OR SUPPLEMENTARY
PROSPECTUS/DOCUMENT/PROFILE STATEMENT, NOTICE AND/OR
CIRCULAR.
APPENDIX J – TERMS, CONDITIONS AND PROCEDURES FOR APPLICATION
AND ACCEPTANCE OF THE NEW SHARES IN SINGAPORE
J-22
• THERE MAY BE A LIMIT ON THE MAXIMUM NUMBER OF SECURITIES THAT
YOU CAN APPLY FOR SUBJECT TO AVAILABILITY. YOU MAY BE
ALLOCATED A SMALLER NUMBER OF SECURITIES THAN YOU APPLIED
FOR OR (IN THE CASE OF AN EARLIER CLOSURE UPON FULL
SUBSCRIPTION) YOUR APPLICATION MAY BE REJECTED IF ALL THE
AVAILABLE SECURITIES HAVE BEEN FULLY ALLOCATED TO EARLIER
APPLICANTS.
10: Select your nationality.
11: Select the DBS Bank account (Autosave/Current/Savings/Savings Plus) or the POSB
account (Current/Savings) from which to debit your application monies.
12: Enter the number of securities you wish to apply for using cash.
13: Enter or confirm (if your CDP Securities Account number has already been stored in
DBS’s records) your own 12-digit CDP Securities Account number (Note: This step
will be omitted automatically if your Securities Account Number has already been
stored in DBS’s records).
14: Check the details of your securities application, your CDP Securities Account
number, number of securities and application amount on the screen and press the
“ENTER” key to confirm your application.
15: Remove the Transaction Record for your reference and retention only.
APPENDIX J – TERMS, CONDITIONS AND PROCEDURES FOR APPLICATION
AND ACCEPTANCE OF THE NEW SHARES IN SINGAPORE
J-23
Steps for Internet Electronic Application for Public Offer Shares through the IB Website of
DBS Bank
For illustrative purposes, the steps for making an Internet Electronic Application through the DBS
IB website are shown below. Certain words appearing on the screen are in abbreviated form
(“A/C”, “&”, “amt”, “I/C” and “No.” refer to “Account”, “and”, “Amount”, “NRIC” and “Number”,
respectively).
Step 1: Click on DBS website (www.dbs.com).
2: Login to Internet banking.
3: Enter your User ID and PIN.
4: Enter your DBS iB Secure PIN.
5: Select “Electronic Security Application (ESA)”.
6: Click “Yes” to proceed and to warrant, among others, that you are currently in
Singapore, you have observed and complied with all applicable laws and regulations
and that your mailing address for DBS mailing address for DBS Internet Banking is
in Singapore and that you are not a U.S. person (as such term is defined in
Regulation S under the United States Securities Act of 1933, amended).
7: Select your country of residence and click “I confirm”.
8: Click on “IFAST” and click “Submit”.
9: Click on “I Confirm” to confirm, among others:
• You have read, understood and agreed to all terms of this application and the
Prospectus/Document or Profile Statement and if applicable, the
Supplementary or Replacement Prospectus/Document or Profile Statement.
• For the purposes of facilitating your application, you consent to the Bank
collecting and using your name, NRIC/passport number, address, nationality,
CDP securities account number, CPF investment account number, application
details and other personal data and disclosing the same from our records to
registrars of securities of the issuer, SGX, CDP, CPF, issuer/vendor(s) and issue
manger(s).
• You are not a U.S. Person (as such term is defined in Regulation S under the
United States Securities Act of 1933, as amended).
APPENDIX J – TERMS, CONDITIONS AND PROCEDURES FOR APPLICATION
AND ACCEPTANCE OF THE NEW SHARES IN SINGAPORE
J-24
• You understand that the securities mentioned herein have not been and will not
be registered under the United States Securities Act of 1933, as amended (the
“US Securities Act”) or the securities laws of any state of the United States and
may not be offered or sold in the United States or to, or for the account or benefit
of any “US person” (as defined in Regulation S under the US Securities Act)
except pursuant to an exemption from or in a transaction not subject to, the
registration requirements of the US Securities Act and applicable state
securities laws. There will be no public offer of the securities mentioned herein
in the United States. Any failure to comply with this restriction may constitute a
violation of the United States securities laws.
• This application is made in your own name and at your own risk.
• For FIXED/MAX price securities application, this is your only application. For
TENDER price securities application, this is your only application at the
selected tender price.
• 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 S$, based on the Bank’s prevailing board rates at the time of
application. Any refund monies will be credited in S$ based on the Bank’s
prevailing board rates at the time of refund. The different prevailing board rates
at the time of application and the time of refund of application monies may result
in either a foreign exchange profit or loss or application monies may be debited
and refund credited in S$ at the same exchange rate.
• For 1ST-COME-1ST-SERVE securities, the number of securities applied for
may be reduced, subject to availability at the point of application.
10: Fill in details for securities application and click “Submit”.
11: Check the details of your securities application, your CDP Securities A/C No. and
click “Confirm” to confirm your application.
12: Print the Confirmation Screen (optional) for your reference and retention only.
APPENDIX J – TERMS, CONDITIONS AND PROCEDURES FOR APPLICATION
AND ACCEPTANCE OF THE NEW SHARES IN SINGAPORE
J-25
Steps for mBanking Applications for Public Offer Shares through the mBanking Interface of
DBS Bank
For illustrative purposes, the steps for making an mBanking Application are shown below. Certain
words appearing on the screen are in abbreviated from (“A/C”, “&”, “amt”, “I/C”, “SGX” and “No.”
refer to “Account”, “and”, “Amount”, “NRIC”, “SGX-ST” and “Number”, respectively).
Step 1: Click on DBS Bank mBanking application using your User ID and PIN.
2: Select “Investment Services”.
3: Select “Electronic Securities Application”.
4: Select “Yes” to proceed and to warrant, among others, that you are currently in
Singapore, you have observed and complied with all applicable laws and regulations
and that your mailing address for DBS Internet Banking is in Singapore and that you
are not a U.S. Person (as such term is defined in Regulation S under the United
States Securities Act of 1933 as amended).
5: Select your country of residence.
6: Select “IFAST”.
7: Select “Yes” to confirm, among others:
• You have read, understood and agreed to all terms of this application and the
Prospectus/Document or Profile Statement and if applicable, the
Supplementary or Replacement Prospectus/Document or Profile Statement.
• For the purposes of facilitating your application, you consent to the Bank
collecting and using your name, NRIC/passport number, address, nationality,
CDP securities account number, CPF investment account number, application
details and other personal data and disclosing the same from our records to
registrars of securities of the issuer, SGX, CDP, CPF, issuer/vendor(s) and issue
manger(s).
• You are not a U.S. Person (as such term is defined in Regulation S under the
United States Securities Act of 1933, as amended).
• You understand that the securities mentioned herein have not been and will not
be registered under the United States Securities Act of 1933, as amended (the
“US Securities Act”) or the securities laws of any state of the United States and
may not be offered or sold in the United States or to, or for the account or benefit
of any “US person” (as defined in Regulation S under the US Securities Act)
except pursuant to an exemption from or in a transaction subject to, the
registration requirements of the US Securities Act and applicable state
securities laws. There will be no public offer of the securities mentioned herein
in the United States. Any failure to comply with this restriction may constitute a
violation of the United States securities laws.
• This application is made in your own name and at your own risk.
APPENDIX J – TERMS, CONDITIONS AND PROCEDURES FOR APPLICATION
AND ACCEPTANCE OF THE NEW SHARES IN SINGAPORE
J-26
• For FIXED/MAX price securities application, this is your only application. For
TENDER price securities application, this is your only application at the
selected tender price.
• 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 S$, based on the Bank’s prevailing board rates at the time of
application. Any refund monies will be credited in S$ based on the Bank’s
prevailing board rates at the time of refund. The different prevailing board rates
at the time of application and the time of refund of application monies may result
in either a foreign exchange profit or loss or application monies may be debited
and refund credited in S$ at the same exchange rate.
• FOR 1ST-COME-1ST-SERVE securities, the number of securities applied for
may be reduced, subject to availability at the point of application.
8: Fill in details for securities application and click “Submit”.
9: Check the details of your securities application, your CDP Securities A/C No. and
click “Confirm” to confirm your application.
10: Where applicable, capture Confirmation Screen (optional) for your reference and
retention only.
APPENDIX J – TERMS, CONDITIONS AND PROCEDURES FOR APPLICATION
AND ACCEPTANCE OF THE NEW SHARES IN SINGAPORE
J-27
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Joint Issue Managers, Bookrunners and Underwriters
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.
This is an inital public ofering of ordinary shares (the “Shares”) in the capital
of iFAST Corporaton Ltd. (the “Company”). We are making an ofering of
32,800,000 Shares (“New Shares”) which consists of (i) an internatonal
placement of 30,000,000 Shares (the “Placement”) to investors, including
insttutonal and other investors in Singapore and outside the United States
in compliance with Regulaton S (“Regulaton S”) under the United States
Securites Act of 1933, as amended (the “US Securites Act”), and (ii) a public
ofer of 2,800,000 Shares in Singapore (the “Public Ofer”, and together with
the Placement, the “Ofering”). The ofering price for each Share (the “Ofering
Price”) is S$0.95.
Separate from the Ofering, each of FIL Investment Management (Hong Kong)
Limited and OWW Investments III Limited (collectvely, the “Cornerstone
Investors”) has entered into a cornerstone subscripton agreement with
the Company (collectvely, the “Cornerstone Subscripton Agreements”) to
subscribe for an aggregate of 19,000,000 new Shares at the Ofering Price (the
“Cornerstone Shares”), conditonal upon, inter alia, the Management and
Underwritng Agreement (as defned herein) and the Placement Agreement
(as defned herein) having been entered into and not having been terminated
pursuant to their terms on or prior to the Listng Date (as defned herein) (the
“Cornerstone Tranche”).
We have made an applicaton to the Singapore Exchange Securites Trading
Limited (the “SGX-ST”) for permission to deal in, and for quotaton of, all the
Shares already issued, the New Shares which are the subject of the Ofering, the
Cornerstone Shares, the new shares which may be issued upon the exercise of
(i) the existng optons granted pursuant to the 2003 ESOS and the 2013 ESOS as
well as (ii) the optons to be granted pursuant to the iFAST ESOS (the new Shares
which may be issued upon the exercise of (i) and (ii) collectvely referred to as
the “Opton Shares”), the new Shares which may be issued upon the release of
the share awards to be granted pursuant to the iFAST Performance Share Plan
(the “Award Shares”) and the new Shares (the “Additonal Shares”) which may
be issued pursuant to the exercise of an over-allotment opton described below
(the “Over-allotment Opton”). Such permission will be granted when we have
been admited to the Ofcial List of the SGX-ST. The dealing in and quotaton of
our Shares will be in Singapore dollars.
Acceptance of applicatons will be conditonal upon, inter alia, permission
being granted by the SGX-ST to deal in, and for quotaton of, all of the existng
issued Shares, the New Shares, the Cornerstone Shares, the Opton Shares,
the Award Shares and the Additonal Shares. If permission is not granted or
the Ofering is not completed for any reason, monies paid in respect of any
applicaton accepted will be returned to you at your own risk, without interest
or any share of revenue or other beneft arising therefrom, and you will not
have any right or claim whatsoever against us and any of the Joint Issue
Managers, Bookrunners and Underwriters (as defned herein).
We have received a leter of eligibility-to-list from the SGX-ST for the listng
and quotaton of our existng issued Shares, the New Shares, the Cornerstone
Shares, the Opton Shares, the Award Shares and the Additonal Shares. The
SGX-ST assumes no responsibility for the correctness of any of the statements
made, opinions expressed or reports contained in this Prospectus. Admission
to the Ofcial List of the SGX-ST is not to be taken as an indicaton of the merits
of the Ofering, our Company, our subsidiaries, our existng issued Shares, the
New Shares, the Cornerstone Shares, the Opton Shares, the Award Shares or
the Additonal Shares.
Our Shares are being ofered and sold outside the United States in an ofshore
transacton as such term is defned in Regulaton S under the US Securites Act.
Our Shares have not been and will not be registered under the US Securites Act
and may not be re-ofered, re-sold, pledged, or otherwise transferred except in
an ofshore transacton in compliance with Regulaton S or pursuant to another
exempton from the registraton requirements of the US Securites Act.
In connecton with the Ofering, we have granted DBS Bank Ltd., as the
stabilising manager (the “Stabilising Manager”), on behalf of the Joint
Issue Managers, Bookrunners and Underwriters, the Over-allotment Opton
exercisable by the Stabilising Manager, in whole or in part, on its own behalf
and on behalf of the Joint Issue Managers, Bookrunners and Underwriters, on
one or more occasions, during the period commencing from the Listng Date
untl the earlier of (i) the date falling 30 days from the Listng Date; or (ii) the
date when the Stabilising Manager (or persons actve on its behalf) has bought
on the SGX-ST an aggregate of 3,280,000 Shares, representng not more than
10% of the Ofering, to undertake stabilising actons. Pursuant to the Over-
allotment Opton, the Stabilising Manager may subscribe and/or procure
subscribers for up to an aggregate of 3,280,000 Additonal Shares (which in
aggregate is not more than 10% of the Ofering) at the Ofering Price solely to
cover the over-allotment of Shares, if any. The total number of issued Shares
immediately afer the completon of the Ofering (and prior to the exercise of
the Over-allotment Opton) will be 256,225,334 Shares. If the Over-allotment
Opton is exercised in full, the total number of issued Shares immediately afer
the completon of the Ofering will be 259,505,334 Shares.
A copy of this Prospectus has been lodged with and registered by the Monetary
Authority of Singapore (the “Authority”) on 21 November 2014 and 4 December
2014, respectvely. The Authority assumes no responsibility for the contents of
this Prospectus. Registraton of this Prospectus by the Authority does not imply
that the Securites and Futures Act (Chapter 289) of Singapore, or any other
legal or regulatory requirements, have been complied with. The Authority has
not, in any way, considered the merits of our existng issued Shares, the New
Shares, the Cornerstone Shares, the Opton Shares, the Award Shares or the
Additonal Shares, as the case may be, being ofered for investment. We have
not lodged or registered this Prospectus in any other jurisdicton.
No Shares shall be alloted and/or allocated on the basis of this Prospectus
later than six (6) months afer the date of registraton of this Prospectus by
the Authority.
Investng in our Shares involves risks which are described in the secton
enttled “Risk Factors” of this Prospectus.
We are an Internet-based investment products distribution and administration platform with assets
under administration (AUA) of approximately S$5.13 billion as at end September 2014.
Headquartered in Singapore, we are also present in Hong Kong, Malaysia and China.
Incorporated in year 2000 in Singapore, we first launched Fundsupermart.com,
our Business-to-Consumer (B2C) website targeted at DIY investors.
Fundsupermart.com has approximately S$1.32 billion in AUA as at end September 2014.
In 2002, we launched our Business-to-Business (B2B) platform to cater to the specialised needs of
financial advisory (FA) companies and financial institutions.
Over 150 FA companies and financial institutions, and more than 5,000 FA representatives,
use our B2B platform.
We distribute over 1,800 Investment Products (including more than 1,600 funds) and provide a
comprehensive range of services, including:
the execution of investment transactions
IT services and software tools
research and investment trainings
backroom functions
Corporate Profile
iFAST Financial (B2B Business) Fundsupermart.com (B2C Business)
iFAST Corporation Ltd.
(Company Registration Number: 200007899C)
10 Collyer Quay,
#26-01 Ocean Financial Centre,
Singapore 049315
Phone: +65 6535 8033
Email Address: [email protected]
www.ifastcorp.com
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PROSPECTUS DATED 4 DECEMBER 2014
(Registered by the Monetary Authority of Singapore on 4 December 2014)
Ofering in respect of 32,800,000 New Shares (subject to the Over-allotment Opton
as defned herein) comprising:
(i)
2,800,000 Public Ofer Shares at S$0.95 for each Public Ofer Share by way of the Public
Ofer; and
(ii) 30,000,000 Placement Shares at S$0.95 for each Placement Share by way of the Placement,
payable in full on applicaton.
iFAST Corporation Ltd.
(Company Registraton Number: 200007899C)
(Incorporated in the Republic of Singapore on 11 September 2000)
doc_961830169.pdf
This is an initial public offering of ordinary shares (the Shares) in the capital of iFAST Corporation Ltd.
Joint Issue Managers, Bookrunners and Underwriters
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.
This is an inital public ofering of ordinary shares (the “Shares”) in the capital
of iFAST Corporaton Ltd. (the “Company”). We are making an ofering of
32,800,000 Shares (“New Shares”) which consists of (i) an internatonal
placement of 30,000,000 Shares (the “Placement”) to investors, including
insttutonal and other investors in Singapore and outside the United States
in compliance with Regulaton S (“Regulaton S”) under the United States
Securites Act of 1933, as amended (the “US Securites Act”), and (ii) a public
ofer of 2,800,000 Shares in Singapore (the “Public Ofer”, and together with
the Placement, the “Ofering”). The ofering price for each Share (the “Ofering
Price”) is S$0.95.
Separate from the Ofering, each of FIL Investment Management (Hong Kong)
Limited and OWW Investments III Limited (collectvely, the “Cornerstone
Investors”) has entered into a cornerstone subscripton agreement with
the Company (collectvely, the “Cornerstone Subscripton Agreements”) to
subscribe for an aggregate of 19,000,000 new Shares at the Ofering Price (the
“Cornerstone Shares”), conditonal upon, inter alia, the Management and
Underwritng Agreement (as defned herein) and the Placement Agreement
(as defned herein) having been entered into and not having been terminated
pursuant to their terms on or prior to the Listng Date (as defned herein) (the
“Cornerstone Tranche”).
We have made an applicaton to the Singapore Exchange Securites Trading
Limited (the “SGX-ST”) for permission to deal in, and for quotaton of, all the
Shares already issued, the New Shares which are the subject of the Ofering, the
Cornerstone Shares, the new shares which may be issued upon the exercise of
(i) the existng optons granted pursuant to the 2003 ESOS and the 2013 ESOS as
well as (ii) the optons to be granted pursuant to the iFAST ESOS (the new Shares
which may be issued upon the exercise of (i) and (ii) collectvely referred to as
the “Opton Shares”), the new Shares which may be issued upon the release of
the share awards to be granted pursuant to the iFAST Performance Share Plan
(the “Award Shares”) and the new Shares (the “Additonal Shares”) which may
be issued pursuant to the exercise of an over-allotment opton described below
(the “Over-allotment Opton”). Such permission will be granted when we have
been admited to the Ofcial List of the SGX-ST. The dealing in and quotaton of
our Shares will be in Singapore dollars.
Acceptance of applicatons will be conditonal upon, inter alia, permission
being granted by the SGX-ST to deal in, and for quotaton of, all of the existng
issued Shares, the New Shares, the Cornerstone Shares, the Opton Shares,
the Award Shares and the Additonal Shares. If permission is not granted or
the Ofering is not completed for any reason, monies paid in respect of any
applicaton accepted will be returned to you at your own risk, without interest
or any share of revenue or other beneft arising therefrom, and you will not
have any right or claim whatsoever against us and any of the Joint Issue
Managers, Bookrunners and Underwriters (as defned herein).
We have received a leter of eligibility-to-list from the SGX-ST for the listng
and quotaton of our existng issued Shares, the New Shares, the Cornerstone
Shares, the Opton Shares, the Award Shares and the Additonal Shares. The
SGX-ST assumes no responsibility for the correctness of any of the statements
made, opinions expressed or reports contained in this Prospectus. Admission
to the Ofcial List of the SGX-ST is not to be taken as an indicaton of the merits
of the Ofering, our Company, our subsidiaries, our existng issued Shares, the
New Shares, the Cornerstone Shares, the Opton Shares, the Award Shares or
the Additonal Shares.
Our Shares are being ofered and sold outside the United States in an ofshore
transacton as such term is defned in Regulaton S under the US Securites Act.
Our Shares have not been and will not be registered under the US Securites Act
and may not be re-ofered, re-sold, pledged, or otherwise transferred except in
an ofshore transacton in compliance with Regulaton S or pursuant to another
exempton from the registraton requirements of the US Securites Act.
In connecton with the Ofering, we have granted DBS Bank Ltd., as the
stabilising manager (the “Stabilising Manager”), on behalf of the Joint
Issue Managers, Bookrunners and Underwriters, the Over-allotment Opton
exercisable by the Stabilising Manager, in whole or in part, on its own behalf
and on behalf of the Joint Issue Managers, Bookrunners and Underwriters, on
one or more occasions, during the period commencing from the Listng Date
untl the earlier of (i) the date falling 30 days from the Listng Date; or (ii) the
date when the Stabilising Manager (or persons actve on its behalf) has bought
on the SGX-ST an aggregate of 3,280,000 Shares, representng not more than
10% of the Ofering, to undertake stabilising actons. Pursuant to the Over-
allotment Opton, the Stabilising Manager may subscribe and/or procure
subscribers for up to an aggregate of 3,280,000 Additonal Shares (which in
aggregate is not more than 10% of the Ofering) at the Ofering Price solely to
cover the over-allotment of Shares, if any. The total number of issued Shares
immediately afer the completon of the Ofering (and prior to the exercise of
the Over-allotment Opton) will be 256,225,334 Shares. If the Over-allotment
Opton is exercised in full, the total number of issued Shares immediately afer
the completon of the Ofering will be 259,505,334 Shares.
A copy of this Prospectus has been lodged with and registered by the Monetary
Authority of Singapore (the “Authority”) on 21 November 2014 and 4 December
2014, respectvely. The Authority assumes no responsibility for the contents of
this Prospectus. Registraton of this Prospectus by the Authority does not imply
that the Securites and Futures Act (Chapter 289) of Singapore, or any other
legal or regulatory requirements, have been complied with. The Authority has
not, in any way, considered the merits of our existng issued Shares, the New
Shares, the Cornerstone Shares, the Opton Shares, the Award Shares or the
Additonal Shares, as the case may be, being ofered for investment. We have
not lodged or registered this Prospectus in any other jurisdicton.
No Shares shall be alloted and/or allocated on the basis of this Prospectus
later than six (6) months afer the date of registraton of this Prospectus by
the Authority.
Investng in our Shares involves risks which are described in the secton
enttled “Risk Factors” of this Prospectus.
We are an Internet-based investment products distribution and administration platform with assets
under administration (AUA) of approximately S$5.13 billion as at end September 2014.
Headquartered in Singapore, we are also present in Hong Kong, Malaysia and China.
Incorporated in year 2000 in Singapore, we first launched Fundsupermart.com,
our Business-to-Consumer (B2C) website targeted at DIY investors.
Fundsupermart.com has approximately S$1.32 billion in AUA as at end September 2014.
In 2002, we launched our Business-to-Business (B2B) platform to cater to the specialised needs of
financial advisory (FA) companies and financial institutions.
Over 150 FA companies and financial institutions, and more than 5,000 FA representatives,
use our B2B platform.
We distribute over 1,800 Investment Products (including more than 1,600 funds) and provide a
comprehensive range of services, including:
the execution of investment transactions
IT services and software tools
research and investment trainings
backroom functions
Corporate Profile
iFAST Financial (B2B Business) Fundsupermart.com (B2C Business)
iFAST Corporation Ltd.
(Company Registration Number: 200007899C)
10 Collyer Quay,
#26-01 Ocean Financial Centre,
Singapore 049315
Phone: +65 6535 8033
Email Address: [email protected]
www.ifastcorp.com
i
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A
S
T
C
o
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o
r
a
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L
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d
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PROSPECTUS DATED 4 DECEMBER 2014
(Registered by the Monetary Authority of Singapore on 4 December 2014)
Ofering in respect of 32,800,000 New Shares (subject to the Over-allotment Opton
as defned herein) comprising:
(i)
2,800,000 Public Ofer Shares at S$0.95 for each Public Ofer Share by way of the Public
Ofer; and
(ii) 30,000,000 Placement Shares at S$0.95 for each Placement Share by way of the Placement,
payable in full on applicaton.
iFAST Corporation Ltd.
(Company Registraton Number: 200007899C)
(Incorporated in the Republic of Singapore on 11 September 2000)
Joint Issue Managers, Bookrunners and Underwriters
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.
This is an inital public ofering of ordinary shares (the “Shares”) in the capital
of iFAST Corporaton Ltd. (the “Company”). We are making an ofering of
32,800,000 Shares (“New Shares”) which consists of (i) an internatonal
placement of 30,000,000 Shares (the “Placement”) to investors, including
insttutonal and other investors in Singapore and outside the United States
in compliance with Regulaton S (“Regulaton S”) under the United States
Securites Act of 1933, as amended (the “US Securites Act”), and (ii) a public
ofer of 2,800,000 Shares in Singapore (the “Public Ofer”, and together with
the Placement, the “Ofering”). The ofering price for each Share (the “Ofering
Price”) is S$0.95.
Separate from the Ofering, each of FIL Investment Management (Hong Kong)
Limited and OWW Investments III Limited (collectvely, the “Cornerstone
Investors”) has entered into a cornerstone subscripton agreement with
the Company (collectvely, the “Cornerstone Subscripton Agreements”) to
subscribe for an aggregate of 19,000,000 new Shares at the Ofering Price (the
“Cornerstone Shares”), conditonal upon, inter alia, the Management and
Underwritng Agreement (as defned herein) and the Placement Agreement
(as defned herein) having been entered into and not having been terminated
pursuant to their terms on or prior to the Listng Date (as defned herein) (the
“Cornerstone Tranche”).
We have made an applicaton to the Singapore Exchange Securites Trading
Limited (the “SGX-ST”) for permission to deal in, and for quotaton of, all the
Shares already issued, the New Shares which are the subject of the Ofering, the
Cornerstone Shares, the new shares which may be issued upon the exercise of
(i) the existng optons granted pursuant to the 2003 ESOS and the 2013 ESOS as
well as (ii) the optons to be granted pursuant to the iFAST ESOS (the new Shares
which may be issued upon the exercise of (i) and (ii) collectvely referred to as
the “Opton Shares”), the new Shares which may be issued upon the release of
the share awards to be granted pursuant to the iFAST Performance Share Plan
(the “Award Shares”) and the new Shares (the “Additonal Shares”) which may
be issued pursuant to the exercise of an over-allotment opton described below
(the “Over-allotment Opton”). Such permission will be granted when we have
been admited to the Ofcial List of the SGX-ST. The dealing in and quotaton of
our Shares will be in Singapore dollars.
Acceptance of applicatons will be conditonal upon, inter alia, permission
being granted by the SGX-ST to deal in, and for quotaton of, all of the existng
issued Shares, the New Shares, the Cornerstone Shares, the Opton Shares,
the Award Shares and the Additonal Shares. If permission is not granted or
the Ofering is not completed for any reason, monies paid in respect of any
applicaton accepted will be returned to you at your own risk, without interest
or any share of revenue or other beneft arising therefrom, and you will not
have any right or claim whatsoever against us and any of the Joint Issue
Managers, Bookrunners and Underwriters (as defned herein).
We have received a leter of eligibility-to-list from the SGX-ST for the listng
and quotaton of our existng issued Shares, the New Shares, the Cornerstone
Shares, the Opton Shares, the Award Shares and the Additonal Shares. The
SGX-ST assumes no responsibility for the correctness of any of the statements
made, opinions expressed or reports contained in this Prospectus. Admission
to the Ofcial List of the SGX-ST is not to be taken as an indicaton of the merits
of the Ofering, our Company, our subsidiaries, our existng issued Shares, the
New Shares, the Cornerstone Shares, the Opton Shares, the Award Shares or
the Additonal Shares.
Our Shares are being ofered and sold outside the United States in an ofshore
transacton as such term is defned in Regulaton S under the US Securites Act.
Our Shares have not been and will not be registered under the US Securites Act
and may not be re-ofered, re-sold, pledged, or otherwise transferred except in
an ofshore transacton in compliance with Regulaton S or pursuant to another
exempton from the registraton requirements of the US Securites Act.
In connecton with the Ofering, we have granted DBS Bank Ltd., as the
stabilising manager (the “Stabilising Manager”), on behalf of the Joint
Issue Managers, Bookrunners and Underwriters, the Over-allotment Opton
exercisable by the Stabilising Manager, in whole or in part, on its own behalf
and on behalf of the Joint Issue Managers, Bookrunners and Underwriters, on
one or more occasions, during the period commencing from the Listng Date
untl the earlier of (i) the date falling 30 days from the Listng Date; or (ii) the
date when the Stabilising Manager (or persons actve on its behalf) has bought
on the SGX-ST an aggregate of 3,280,000 Shares, representng not more than
10% of the Ofering, to undertake stabilising actons. Pursuant to the Over-
allotment Opton, the Stabilising Manager may subscribe and/or procure
subscribers for up to an aggregate of 3,280,000 Additonal Shares (which in
aggregate is not more than 10% of the Ofering) at the Ofering Price solely to
cover the over-allotment of Shares, if any. The total number of issued Shares
immediately afer the completon of the Ofering (and prior to the exercise of
the Over-allotment Opton) will be 256,225,334 Shares. If the Over-allotment
Opton is exercised in full, the total number of issued Shares immediately afer
the completon of the Ofering will be 259,505,334 Shares.
A copy of this Prospectus has been lodged with and registered by the Monetary
Authority of Singapore (the “Authority”) on 21 November 2014 and 4 December
2014, respectvely. The Authority assumes no responsibility for the contents of
this Prospectus. Registraton of this Prospectus by the Authority does not imply
that the Securites and Futures Act (Chapter 289) of Singapore, or any other
legal or regulatory requirements, have been complied with. The Authority has
not, in any way, considered the merits of our existng issued Shares, the New
Shares, the Cornerstone Shares, the Opton Shares, the Award Shares or the
Additonal Shares, as the case may be, being ofered for investment. We have
not lodged or registered this Prospectus in any other jurisdicton.
No Shares shall be alloted and/or allocated on the basis of this Prospectus
later than six (6) months afer the date of registraton of this Prospectus by
the Authority.
Investng in our Shares involves risks which are described in the secton
enttled “Risk Factors” of this Prospectus.
We are an Internet-based investment products distribution and administration platform with assets
under administration (AUA) of approximately S$5.13 billion as at end September 2014.
Headquartered in Singapore, we are also present in Hong Kong, Malaysia and China.
Incorporated in year 2000 in Singapore, we first launched Fundsupermart.com,
our Business-to-Consumer (B2C) website targeted at DIY investors.
Fundsupermart.com has approximately S$1.32 billion in AUA as at end September 2014.
In 2002, we launched our Business-to-Business (B2B) platform to cater to the specialised needs of
financial advisory (FA) companies and financial institutions.
Over 150 FA companies and financial institutions, and more than 5,000 FA representatives,
use our B2B platform.
We distribute over 1,800 Investment Products (including more than 1,600 funds) and provide a
comprehensive range of services, including:
the execution of investment transactions
IT services and software tools
research and investment trainings
backroom functions
Corporate Profile
iFAST Financial (B2B Business) Fundsupermart.com (B2C Business)
iFAST Corporation Ltd.
(Company Registration Number: 200007899C)
10 Collyer Quay,
#26-01 Ocean Financial Centre,
Singapore 049315
Phone: +65 6535 8033
Email Address: [email protected]
www.ifastcorp.com
i
F
A
S
T
C
o
r
p
o
r
a
t
i
o
n
L
t
d
.
PROSPECTUS DATED 4 DECEMBER 2014
(Registered by the Monetary Authority of Singapore on 4 December 2014)
Ofering in respect of 32,800,000 New Shares (subject to the Over-allotment Opton
as defned herein) comprising:
(i)
2,800,000 Public Ofer Shares at S$0.95 for each Public Ofer Share by way of the Public
Ofer; and
(ii) 30,000,000 Placement Shares at S$0.95 for each Placement Share by way of the Placement,
payable in full on applicaton.
iFAST Corporation Ltd.
(Company Registraton Number: 200007899C)
(Incorporated in the Republic of Singapore on 11 September 2000)
Competitive Strengths
November 2008:
iFAST Corporation —2nd position at
the Enterprise 50 Awards 2008 (jointly
organised by KPMG and
The Business Times)
November 2013:
iFAST HK —“Outstanding Achiever” in
the “Investment Platform - Independent”
category (Benchmark Wealth
Management Awards 2013)
Fundsupermart.com (HK) —“Best-
in-Class” award, “Online Usability
- Independent” category (Benchmark
Wealth Management Awards 2013)
August 2009:
iFAST HK —“Fund Platform Award”,
at the Best Practice Financial
Services Award 2009 (organised by
Benchmark Magazine and Best Practice
Management Magazine)
Fundsupermart.com (HK) —“Online
Usability” award (The Best Practice
Financial Services Award 2009)
December 2010:
iFAST HK —“Best-in-Class” award in the
“Advisers Choice of the Year” category
(Benchmark Wealth Management
Awards 2010)
Fundsupermart.com (HK) —“Outstanding
Achiever” award in the “Online Capabilities
Award” category (Benchmark Wealth
Management Awards 2010)
December 2011:
iFAST HK —“Best-in-Class” award
in the “Platform Provider of the Year
- Professional” category (Benchmark
Wealth Management Awards 2011)
Fundsupermart.com (HK) —“Best-in-
Class” award in the “Best in Online
Usability” category (Benchmark Wealth
Management Awards 2011)
January 2014:
Fundsupermart.com —Silver award,
in the “Most Informative Use of Mobile”
category (Mob-Ex Awards)
2010 2008 2009
2014 2013 2011
Business Model Overview
Key Investment Highlights
Business Model Scalability
iFAST B2B
Platforms
Distribution Network
and Sales Force
of over 150 FA
companies and
financial institutions,
as well as over 5,000
FA representatives
Fundsupermart.com
(B2C)
Leverages on the
Internet to reach out
to DIY investors
AUA of
Fundsupermart.
com stands at
approximately
S$1.32 billion
Proprietary IT
System
Proprietary platform
enables scaling of
our AUA without
corresponding
increase in operating
costs
Grow our Net Revenue,
Increase our Profit Margins and ROE
Scalability of Our Business Model
Scalable Business Model
Leverages on more than 150 FA companies and financial institutions,
as well as over 5,000 FA representatives
Internet-based model reaches out to over 190,000 Business-to-
Business adviser-assisted and Business-to-Customer accounts
Revenue Growth driven by Recurring Revenue which is based
on Assets under Administration (“AUA”)
The average contribution of recurring net revenue, which comprise
recurring fees calculated based on AUA, was approximately 81.6%
of net revenue for the period FY2011-9M2014
Continued Growth of Investment Platforms in Asia ex-Japan
Growth of investment platforms to be driven by demand for financial
services and greater adoption of platform by banks and financial
institutions
Proprietary IT System
Our proprietary platform has minimised our reliance on third party
developers, reduced our operating costs and we have the flexibility
to deliver reliable and innovative services to our customers
Why invest in
A Leading and Established Funds and
Investments Distribution Platform
Scalable Business Model
Revenue Growth driven by Recurring Revenue
which is based on Assets under Administration
(“AUA”)
Continued Growth of Investment Platforms in
Asia ex-Japan
A Leading and Established Funds and Investments Distribution Platform
Award-winning B2B and B2C platform in Singapore, Hong Kong and Malaysia, and establishment of China operations in 2014
Approximately S$5.13 billion in AUA (as at end September 2014), 10-year Compound Annual Growth Rate (CAGR) of approximately 26.8%
Over 1,800 investment products, including more than 1,600 funds
Financial Highlights and Dividend Policy
Financial Highlights
1
FY2011 FY2012 FY2013 9M2013 9M2014
Net revenue (S$’million) 25.20 26.29 31.58 23.51 27.33
Net revenue (YoY change) N.A.
2
+4.4% +20.1% N.A.
2
+16.2%
Profit attributable to owners of the
Company from continuing operations
(S$’million)
2.77 3.74 8.47 5.59 7.61
PBT margin (based on net revenue) 9.4% 15.0% 27.9% 25.3% 29.1%
EPS (cents) 1.38 1.86 4.20 2.77 3.75
Dividend per share (cents) 0.44 0.54 1.98
3
1.33 4.70
Notes:
1. Based on the results of the iFAST Group from continuing operations.
2. N.A. represents information not applicable for the period FY2011-9M2014.
3. Excludes the interim dividend by way of a distribution in specie during FY2013.
Dividend Policy
We currently do not have a fixed dividend policy
However, our Directors intend to recommend and distribute dividends of 60% of our net profit after tax (excluding exceptional items) for the fourth
quarter of FY2014, and dividends of 60% of our net profit after tax (excluding exceptional items) for FY2015
Banks
Financial Advisory
companies (FAs)
Financial Institutions
Companies
Fundsupermart.com
Adviser-assisted Investors
Pensions for employees
B2B customers select investment products distributed on iFAST platform
on behalf of adviser-assisted investors
DIY investors select investment products distributed on Fundsupermart.com.
Fund Houses
Banks (Bond Dealers)
Insurance Companies
Product providers provide investment
products for distribution on iFAST platform
DIY Investors
Competitive Strengths
November 2008:
iFAST Corporation —2nd position at
the Enterprise 50 Awards 2008 (jointly
organised by KPMG and
The Business Times)
November 2013:
iFAST HK —“Outstanding Achiever” in
the “Investment Platform - Independent”
category (Benchmark Wealth
Management Awards 2013)
Fundsupermart.com (HK) —“Best-
in-Class” award, “Online Usability
- Independent” category (Benchmark
Wealth Management Awards 2013)
August 2009:
iFAST HK —“Fund Platform Award”,
at the Best Practice Financial
Services Award 2009 (organised by
Benchmark Magazine and Best Practice
Management Magazine)
Fundsupermart.com (HK) —“Online
Usability” award (The Best Practice
Financial Services Award 2009)
December 2010:
iFAST HK —“Best-in-Class” award in the
“Advisers Choice of the Year” category
(Benchmark Wealth Management
Awards 2010)
Fundsupermart.com (HK) —“Outstanding
Achiever” award in the “Online Capabilities
Award” category (Benchmark Wealth
Management Awards 2010)
December 2011:
iFAST HK —“Best-in-Class” award
in the “Platform Provider of the Year
- Professional” category (Benchmark
Wealth Management Awards 2011)
Fundsupermart.com (HK) —“Best-in-
Class” award in the “Best in Online
Usability” category (Benchmark Wealth
Management Awards 2011)
January 2014:
Fundsupermart.com —Silver award,
in the “Most Informative Use of Mobile”
category (Mob-Ex Awards)
2010 2008 2009
2014 2013 2011
Business Model Overview
Key Investment Highlights
Business Model Scalability
iFAST B2B
Platforms
Distribution Network
and Sales Force
of over 150 FA
companies and
financial institutions,
as well as over 5,000
FA representatives
Fundsupermart.com
(B2C)
Leverages on the
Internet to reach out
to DIY investors
AUA of
Fundsupermart.
com stands at
approximately
S$1.32 billion
Proprietary IT
System
Proprietary platform
enables scaling of
our AUA without
corresponding
increase in operating
costs
Grow our Net Revenue,
Increase our Profit Margins and ROE
Scalability of Our Business Model
Scalable Business Model
Leverages on more than 150 FA companies and financial institutions,
as well as over 5,000 FA representatives
Internet-based model reaches out to over 190,000 Business-to-
Business adviser-assisted and Business-to-Customer accounts
Revenue Growth driven by Recurring Revenue which is based
on Assets under Administration (“AUA”)
The average contribution of recurring net revenue, which comprise
recurring fees calculated based on AUA, was approximately 81.6%
of net revenue for the period FY2011-9M2014
Continued Growth of Investment Platforms in Asia ex-Japan
Growth of investment platforms to be driven by demand for financial
services and greater adoption of platform by banks and financial
institutions
Proprietary IT System
Our proprietary platform has minimised our reliance on third party
developers, reduced our operating costs and we have the flexibility
to deliver reliable and innovative services to our customers
Why invest in
A Leading and Established Funds and
Investments Distribution Platform
Scalable Business Model
Revenue Growth driven by Recurring Revenue
which is based on Assets under Administration
(“AUA”)
Continued Growth of Investment Platforms in
Asia ex-Japan
A Leading and Established Funds and Investments Distribution Platform
Award-winning B2B and B2C platform in Singapore, Hong Kong and Malaysia, and establishment of China operations in 2014
Approximately S$5.13 billion in AUA (as at end September 2014), 10-year Compound Annual Growth Rate (CAGR) of approximately 26.8%
Over 1,800 investment products, including more than 1,600 funds
Financial Highlights and Dividend Policy
Financial Highlights
1
FY2011 FY2012 FY2013 9M2013 9M2014
Net revenue (S$’million) 25.20 26.29 31.58 23.51 27.33
Net revenue (YoY change) N.A.
2
+4.4% +20.1% N.A.
2
+16.2%
Profit attributable to owners of the
Company from continuing operations
(S$’million)
2.77 3.74 8.47 5.59 7.61
PBT margin (based on net revenue) 9.4% 15.0% 27.9% 25.3% 29.1%
EPS (cents) 1.38 1.86 4.20 2.77 3.75
Dividend per share (cents) 0.44 0.54 1.98
3
1.33 4.70
Notes:
1. Based on the results of the iFAST Group from continuing operations.
2. N.A. represents information not applicable for the period FY2011-9M2014.
3. Excludes the interim dividend by way of a distribution in specie during FY2013.
Dividend Policy
We currently do not have a fixed dividend policy
However, our Directors intend to recommend and distribute dividends of 60% of our net profit after tax (excluding exceptional items) for the fourth
quarter of FY2014, and dividends of 60% of our net profit after tax (excluding exceptional items) for FY2015
Banks
Financial Advisory
companies (FAs)
Financial Institutions
Companies
Fundsupermart.com
Adviser-assisted Investors
Pensions for employees
B2B customers select investment products distributed on iFAST platform
on behalf of adviser-assisted investors
DIY investors select investment products distributed on Fundsupermart.com.
Fund Houses
Banks (Bond Dealers)
Insurance Companies
Product providers provide investment
products for distribution on iFAST platform
DIY Investors
Note: Information determined or calculated as at 30 September 2014.
Group AUA
Singapore: 75.5% Hong Kong: 20.5% Malaysia: 4.0%
Recurring vs Non-recurring Net Revenue
Average contribution of recurring net
revenue to net revenue for the period
2004-2007: approximately 34.2%
Average contribution of recurring net
revenue to net revenue (for the period
FY2011-9M2014): approximately 81.6%
Net Revenue and Operating Expenses as a Ratio
of Average AUA
PBT Margin (based on Net Revenue)
Note: The ratio for 9M2014 has been computed based on annualised net revenue and
operating expenses figures for 9M2014.
Key Financial Charts
Note: Information determined or calculated as at 30 September 2014.
5,000
4,000
3,000
2,000
1,000
-
D
e
c
-
0
0
N
o
v
-
0
1
O
c
t
-
0
2
S
e
p
-
0
3
A
u
g
-
0
4
J
u
l
-
0
5
J
u
n
-
0
6
M
a
y
-
0
7
A
p
r
-
0
8
M
a
r
-
0
9
F
e
b
-
1
0
J
a
n
-
1
1
D
e
c
-
1
1
N
o
v
-
1
2
O
c
t
-
1
3
S
e
p
-
1
4
B2B B2C
S$’Million
AUA (As at end September 2014): S$5.13 billion
B2B: 74.3%
B2C: 25.7%
1
0
-
y
e
a
r
C
A
G
R
:
2
6
.
8
%
9.4%
15.0%
29.1%
35%
30%
25%
20%
15%
10%
5%
0%
FY2011 FY2012 FY2013 9M2014
27.9%
35
30
25
20
15
10
5
0
2
0
0
4
2
0
0
5
2
0
0
6
2
0
0
7
2
0
0
8
2
0
0
9
2
0
1
0
2
0
1
1
2
0
1
2
2
0
1
3
9
M
2
0
1
4
Recurring Non-recurring
4.3
6.9
12.8
28.8
25.3
15.9
21.8
25.2
26.3
31.6
27.3
S$’Million
0.651%
0.526%
0.588%
0.672%
0.571% 0.573%
0.708%
0.574%
0.529%
0.745%
0.593%
0.536%
0.800%
0.700%
0.600%
0.500%
0.400%
0.300%
0.200%
0.100%
0.000%
FY2011 FY2012 FY2013 9M2014
Net revenue/Average AUA Recurring net revenue/Average AUA Opera?ng expenses/Average AUA
Future Plans
Market share of investment platforms in developed markets such as Australia and the UK
is far higher than in Asia ex-Japan.
Factors that contribute to continued growth of investment platforms in Asia ex-Japan:
Rapid economic growth in Asia ex-Japan and greater adoption of investment platforms
Greater trend for investors to move to online channels
Rapid emergence of banks, FAs and financial institutions in Asia’s wealth management centres
Regulatory changes and trans-border funds recognition schemes in Asia ex-Japan
Enhancement of our Product Capabilities,
IT and Services
Including more investment products such as ETFs,
bonds, and eventually shares and securities
B2C segment: Improving tools to bring in higher
traffic; investing in more consumer educational efforts
while continuing to stay competitive in pricing
B2B segment: FAs to seamlessly advise across
multiple asset classes will allow us to grow our AUA
at a faster pace
Well-placed to provide specialised services to
potential customers such as financial institutions
who want to tap on the scale of the Internet to
expand their customer base with efficiently-managed
websites and mobile applications
Mergers and Acquisitions Strategy
Actively evaluating opportunities to acquire
related
businesses with sizeable AUA and customer base
that can complement our existing investment platform
business
Exploring the possibilities of entering new markets
in the Asia-Pacific region through acquisitions,
joint ventures and/or strategic partnerships
Expansion of our Business in the Chinese Market
Offshore and onshore opportunity: There are substantial
opportunities for us to tap into China-based investors
that are onshore (within China) as well as offshore
(through the financial centres of Hong Kong and
Singapore)
Tapping on our existing experience and network:
Collaborate with our B2B customers and leverage
on our presence in Hong Kong and Singapore
Prospects
Incorporation of
iFAST Platform Services
(Shenzhen) Qianhai in China
2014
Launch of B2B operations
in Hong Kong
2008
Launch of B2B and B2C mobile
applications for iPhone, iPad
and Android devices
(e.g. FSM Mobile)
2011-2012
Acquisition of ING Platform
Services in Hong Kong,
strengthening our presence
in Hong Kong
2009
Launch of
B2B and B2C operations
in Malaysia
2008
Launch of Fundsupermart.com
in Hong Kong
2007
Launch of the
B2B Pensions platform
2006
iFAST
p e n s i o n s
Launch of B2B operations
in Singapore
2002
Launch of Fundsupermart.com
in Singapore
2000
Launch of iFAST Global Prestige
(iGP), a dedicated investment
platform for HNWIs in Singapore,
and subsequently in
Hong Kong in 2010
2009
Our Milestones
TABLE OF CONTENTS
CORPORATE INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
GLOSSARY OF TECHNICAL TERMS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
CAUTIONARY NOTE ON FORWARD-LOOKING STATEMENTS . . . . . . . . . . . . . . . . . . . 21
THE OFFERING. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
LISTING ON THE SGX-ST. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
INDICATIVE TIMETABLE FOR LISTING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
DETAILS OF THE OFFERING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
USE OF PROCEEDS AND OFFERING EXPENSES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
DIVIDEND POLICY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
EXCHANGE CONTROLS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
OVERVIEW OF OUR GROUP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
RISK FACTORS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
RISKS RELATING TO OUR INDUSTRY, BUSINESS AND OPERATIONS. . . . . . . . . . . 42
RISKS RELATING TO OWNERSHIP OF OUR SHARES. . . . . . . . . . . . . . . . . . . . . . . . 53
SELECTED CONSOLIDATED FINANCIAL INFORMATION . . . . . . . . . . . . . . . . . . . . . . . 60
SELECTED PRO FORMA FINANCIAL INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . 63
MANAGEMENT’S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND
FINANCIAL POSITION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
OVERVIEW . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
INFLATION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
SEASONALITY. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
REVIEW OF PAST OPERATING PERFORMANCE . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
REVIEW OF PAST FINANCIAL POSITION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86
LIQUIDITY AND CAPITAL RESOURCES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 91
CAPITAL EXPENDITURE AND DIVESTMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 96
COMMITMENTS AND CONTINGENT LIABILITIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . 97
FOREIGN EXCHANGE EXPOSURE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 98
CAPITALISATION AND INDEBTEDNESS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 99
OFFERING STATISTICS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 101
DILUTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 103
1
RESTRUCTURING EXERCISE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 104
INTRODUCTION TO THE RESTRUCTURING. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 104
RESTRUCTURING. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 104
GROUP STRUCTURE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 109
SHARE CAPITAL. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 112
HISTORY OF OUR SHAREHOLDING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 115
CHANGES IN ISSUED AND PAID-UP SHARE CAPITAL OF OUR COMPANY AND OUR
SUBSIDIARIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 115
HISTORY OF OUR SHARE OPTION SCHEMES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 119
SHAREHOLDERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 124
SIGNIFICANT CHANGES IN PERCENTAGE OF OWNERSHIP . . . . . . . . . . . . . . . . . . 127
MORATORIUM. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 127
OUR BUSINESS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 135
OVERVIEW . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 135
HISTORY AND DEVELOPMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 136
B2B BUSINESS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 140
B2C BUSINESS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 142
OTHER SERVICES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 143
OUR BUSINESS MODEL. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 143
COMPETITION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 150
OUR COMPETITIVE STRENGTHS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 151
QUALITY ASSURANCE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 154
MAJOR CUSTOMERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 154
MAJOR SUPPLIERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 155
ORDER BOOK . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 156
INVENTORY MANAGEMENT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 156
INTELLECTUAL PROPERTY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 156
RESEARCH AND DEVELOPMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 162
MARKETING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 163
PROPERTIES AND FIXED ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 164
INSURANCE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 165
REGULATORY COMPLIANCE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 166
INDUSTRY OVERVIEW . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 169
INVESTMENT PLATFORMS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 169
2
PROSPECTS, BUSINESS STRATEGIES AND PLANS. . . . . . . . . . . . . . . . . . . . . . . . . . . 179
PROSPECTS AND TREND INFORMATION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 179
BUSINESS STRATEGIES AND FUTURE PLANS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 181
GOVERNMENT REGULATIONS AND LICENSING. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 184
SINGAPORE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 184
MALAYSIA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 186
HONG KONG. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 187
REGULATORY LICENCES, PERMITS AND APPROVALS. . . . . . . . . . . . . . . . . . . . . . . 188
OTHER PERMITS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 192
REGULATORY INSPECTIONS AND INVESTIGATIONS . . . . . . . . . . . . . . . . . . . . . . . . 192
DIRECTORS, MANAGEMENT AND STAFF . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 198
MANAGEMENT REPORTING STRUCTURE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 198
DIRECTORS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 199
EXECUTIVE OFFICERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 204
LEGAL REPRESENTATIVE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 207
DIRECTORS’ AND EXECUTIVE OFFICERS’ REMUNERATION . . . . . . . . . . . . . . . . . . 208
SERVICE AGREEMENT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 209
OUR EMPLOYEES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 212
STAFF TRAINING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 212
CORPORATE GOVERNANCE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 214
AUDIT COMMITTEE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 214
REMUNERATION COMMITTEE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 218
NOMINATING COMMITTEE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 220
RISK COMMITTEE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 221
CORPORATE SOCIAL RESPONSIBILITY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 223
IFAST PSP. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 224
IFAST ESOS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 235
INTERESTED PERSON TRANSACTIONS AND CONFLICT OF INTERESTS . . . . . . . . . 243
PRESENT AND ON-GOING INTERESTED PERSON TRANSACTIONS . . . . . . . . . . . . 243
REVIEW PROCEDURES FOR FUTURE INTERESTED PERSON TRANSACTIONS . . 245
OTHER TRANSACTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 246
POTENTIAL CONFLICT OF INTERESTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 247
MITIGATION OF POTENTIAL CONFLICTS OF INTERESTS . . . . . . . . . . . . . . . . . . . . 248
CLEARANCE AND SETTLEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 250
3
PLAN OF DISTRIBUTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 252
THE OFFERING. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 252
INTERESTS OF THE JOINT ISSUE MANAGERS, BOOKRUNNERS AND
UNDERWRITERS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 255
DISTRIBUTION AND SELLING RESTRICTIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 256
GENERAL AND STATUTORY INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 259
INFORMATION ON DIRECTORS AND EXECUTIVE OFFICERS . . . . . . . . . . . . . . . . . 259
MATERIAL CONTRACTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 261
LITIGATION AND ARBITRATION PROCEEDINGS . . . . . . . . . . . . . . . . . . . . . . . . . . . . 263
MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 263
INTERESTS OF INDEPENDENT MARKET RESEARCH CONSULTANTS . . . . . . . . . . 265
CONSENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 265
RESPONSIBILITY STATEMENT BY OUR DIRECTORS . . . . . . . . . . . . . . . . . . . . . . . . 266
DOCUMENTS AVAILABLE FOR INSPECTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 266
APPENDIX A – AUDITED CONSOLIDATED FINANCIAL STATEMENTS FOR THE
FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012 AND 2013. A-1
APPENDIX B – UNAUDITED INTERIM CONSOLIDATED FINANCIAL
STATEMENTS FOR THE NINE MONTHS ENDED 30 SEPTEMBER
2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-1
APPENDIX C – UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL
INFORMATION FOR THE FINANCIAL YEAR ENDED
31 DECEMBER 2013 AND THE NINE MONTHS ENDED
30 SEPTEMBER 2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . C-1
APPENDIX D – SUMMARY OF OUR ARTICLES OF ASSOCIATION. . . . . . . . . . . . . D-1
APPENDIX E – DESCRIPTION OF OUR SHARES . . . . . . . . . . . . . . . . . . . . . . . . . . E-1
APPENDIX F – RULES OF THE IFAST PSP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-1
APPENDIX G – RULES OF THE IFAST ESOS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . G-1
APPENDIX H – INFORMATION ON THE SHARE BUY BACK MANDATE. . . . . . . . . H-1
APPENDIX I – TAXATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-1
APPENDIX J – TERMS, CONDITIONS AND PROCEDURES FOR APPLICATION
AND ACCEPTANCE OF THE NEW SHARES IN SINGAPORE . . . . J-1
4
BOARD OF DIRECTORS : Lim Chung Chun (Chairman and Chief
Executive Officer)
Lim Wee Kian (Non-Executive Director)
Low Huan Ping (Non-Executive Director)
Yao Chih Matthias (Lead Independent Director)
Ling Peng Meng (Independent Director)
Kok Chee Wai (Independent Director)
Ng Loh Ken Peter (Independent Director)
COMPANY SECRETARY : Chan Lai Yin (ACIS)
Low Siew Tian (ACIS)
REGISTERED OFFICE AND
PRINCIPAL OFFICE
: 10 Collyer Quay
#26-01, Ocean Financial Centre
Singapore 049315
SHARE REGISTRAR : Tricor Barbinder Share Registration
Services
(a division of Tricor Singapore Pte. Ltd.)
80 Robinson Road, #02-00
Singapore 068898
JOINT ISSUE MANAGERS,
BOOKRUNNERS AND
UNDERWRITERS
: DBS Bank Ltd.
12 Marina Boulevard
Marina Bay Financial Centre Tower 3
Singapore 018982
DMG & Partners Securities Pte Ltd
10 Collyer Quay
#09-08, Ocean Financial Centre
Singapore 049315
LEGAL ADVISERS TO THE
OFFERING AND OUR COMPANY AS
TO SINGAPORE LAW
: Stamford Law Corporation
10 Collyer Quay
#27-00, Ocean Financial Centre
Singapore 049315
LEGAL ADVISERS TO THE JOINT
ISSUE MANAGERS, BOOKRUNNERS
AND UNDERWRITERS AS TO
SINGAPORE LAW
: Rajah & Tann Singapore LLP
9 Battery Road
#25-01, Straits Trading Building
Singapore 049910
LEGAL ADVISERS TO OUR
COMPANY AS TO MALAYSIAN LAW
: Christopher & Lee Ong
Level 22, Quill 7
No. 9, Jalan Stesen Sentral 5
Kuala Lumpur Sentral
50470 Kuala Lumpur
Malaysia
CORPORATE INFORMATION
5
LEGAL ADVISERS TO OUR
COMPANY AS TO HONG KONG LAW
: Angela Wang & Co
14th Floor South China Building
1-3 Wyndham Street
Central, Hong Kong
LEGAL ADVISERS TO OUR
COMPANY AS TO PRC LAW
: Yuan Tai Law Offices
14/F, Huaxia Bank Plaza
256 South Pudong Road
Shanghai 200120, PRC
INDEPENDENT AUDITORS AND
REPORTING ACCOUNTANTS
: KPMG LLP
16 Raffles Quay
#22-00, Hong Leong Building
Singapore 048581
Partner-in-charge: Jeya Poh Wan
S/O K. Suppiah
(Chartered Accountant, a member of the
Institute of Singapore Chartered Accountants)
PRINCIPAL BANKERS : DBS Bank Ltd.
12 Marina Boulevard
Marina Bay Financial Centre Tower 3
Singapore 018982
Standard Chartered Bank
8 Marina Boulevard, #27-01
Marina Bay Financial Centre Tower 1
Singapore 018981
RECEIVING BANK : DBS Bank Ltd.
12 Marina Boulevard
Marina Bay Financial Centre Tower 3
Singapore 018982
INDEPENDENT MARKET RESEARCH
CONSULTANTS
: The Platforum
Centaur Communications Ltd
Wells Point
79 Wells Street
London, W1T 3QN
Investment Trends Pty Limited
Suite 2102
Level 21, 1 Alfred Street
Sydney, NSW 2000
Australia
Cerulli Associates Asia Pte Ltd
28 Maxwell Road
#02-04
Singapore 069120
CORPORATE INFORMATION
6
In this Prospectus, the accompanying Application Forms and, in relation to the Electronic
Applications, the instructions appearing on the screens of the ATMs of Participating Banks, the IB
websites of the relevant Participating Banks or the mobile banking platform of DBS Bank
(including POSB), unless the context otherwise requires, the following definitions apply
throughout where the context so admits:
Group Companies
“Company” or “iFAST” : iFAST Corporation Ltd.
“Group” : Our Company and our subsidiaries
“FCCC” : FA Corporate & Compliance Consultancy Pte. Ltd.
“FCCC Malaysia” : FA Corporate and Compliance Consultancy Sdn Bhd
“iFAST Capital” : iFAST Capital Ltd.
“iFAST Capital Malaysia” : iFAST Capital Sdn Bhd
“iFAST China” : iFAST Platform Services (Shenzhen) Qianhai Limited
(º1)1´(ï¹)J(([´+)
“iFAST Financial” : iFAST Financial Pte. Ltd.
“iFAST HK” : iFAST Financial (HK) Limited (º¸A(|¡)([´+)
“iFAST Malaysia” : iFAST Malaysia Sdn. Bhd. (formerly known as iFAST-OSK
Sdn. Bhd.)
“iFAST Nominees” : iFAST Nominees Pte. Ltd.
“iFAST Nominees HK” : iFAST Nominees (HK) Limited (º¦l´(|¡)([´+)
“iFAST Nominees
Malaysia”
: iFAST Nominees Sdn Bhd
“iFAST Platform” or
“IPS HK”
: iFAST Platform Services (HK) Limited (º¦`)1(|¡)
([´+) (formerly known as ING PLATFORM SERVICES
LIMITED ({|¦`)1([´+))
“iFAST Service Centre” : iFAST Service Centre Sdn Bhd
Other Companies, Organisations and Agencies
“Authority” or “MAS” : The Monetary Authority of Singapore
“CDP” : The Central Depository (Pte) Limited
DEFINITIONS
7
“CPF” : The Central Provident Fund
“CPFB” : The Central Provident Fund Board
“CPFIA” : CPF-Investment Administrator
“DBS Bank” : DBS Bank Ltd.
“DMG” : DMG & Partners Securities Pte Ltd
“FIMM” : Federation of Investment Managers Malaysia
“iFAST India” : iFAST India Investments Pte. Ltd.
“ING Platform Services” : ING PLATFORM SERVICES LIMITED ({|¦`)1([
´+) (now known as iFAST Platform Services (HK) Limited
(º¦`)1(|¡)([´+))
“IRAS” : Inland Revenue Authority of Singapore
“Joint Issue Managers,
Bookrunners and
Underwriters”
: DBS Bank and DMG
“MPFSA” : Mandatory Provident Fund Schemes Authority
“Participating Banks” : DBS Bank (including POSB), Oversea-Chinese Banking
Corporation Limited (“OCBC Bank”) and United Overseas
Bank Limited and its subsidiary, Far Eastern Bank Limited
(“UOB Group”) and “Participating Bank” means any of the
abovementioned
“Pecuniam” : Pecuniam Pte. Ltd.
“Providend” : Providend Holding Private Limited
“Receiving Bank” : DBS Bank
“RHB” : RHB Investment Bank Berhad
“SAFE” : State Administration of Foreign Exchange of the PRC
“SC” : Securities Commission of Malaysia
“SFC” : Securities and Futures Commission of Hong Kong
“SGX-ST” or “Exchange” : Singapore Exchange Securities Trading Limited
DEFINITIONS
8
“SPH” : Singapore Press Holdings Limited
“SPH AsiaOne” : SPH AsiaOne Ltd
“Stabilising Manager” : DBS Bank
General
“2003 ESOS” : The employee share option scheme adopted by our Company
on 28 March 2003
“2013 ESOS” : The employee share option scheme adopted by our Company
on 23 May 2013
“4Q” : The three (3) months period commencing 1 October and
ended or, as the case may be, ending on 31 December
“9M” : The nine (9) months period commencing 1 January and ended
or, as the case may be, ending on 30 September
“Additional Shares” : Up to an aggregate of 3,280,000 additional new Shares which
may be issued pursuant to the exercise of the Over-allotment
Option
“Application Forms” : The printed application forms to be used for the purpose of the
Offering and which form part of this Prospectus
“Articles” or “Articles of
Association”
: The articles of association of our Company as amended,
supplemented or modified from time to time
“Associate” : In the case of a company,
(a) in relation to any director, chief executive officer,
substantial shareholder or controlling shareholder (being
an individual) means:
(i) his immediate family;
(ii) the trustees of any trust of which he or his
immediate family is a beneficiary or, in the case of
a discretionary trust, is a discretionary object; or
(iii) any company in which he and his immediate family
together (directly or indirectly) have an interest of
30.0% or more; or
DEFINITIONS
9
(b) in relation to a substantial shareholder or a controlling
shareholder (being a company) means any other
company which is its subsidiary or holding company or is
a subsidiary of such holding company or one (1) in the
equity of which it and/or such other company or
companies taken together (directly or indirectly) have an
interest of 30.0% or more
“ATM” : Automated teller machine of a Participating Bank
“Audit Committee” : The audit committee of our Company as at the date of this
Prospectus
“Award Shares” : The Shares which may be issued or transferred upon the
release of the share awards granted pursuant to the iFAST
PSP
“Board” or “Board of
Directors”
: The board of Directors of our Company
“CEO” : The chief executive officer of our Company as at the date of
this Prospectus
“CFO” : The chief financial officer of our Company as at the date of
this Prospectus
“CMSA” : The Capital Markets and Services Act 2007 of Malaysia as
amended, supplemented or modified from time to time
“Code of Corporate
Governance”
: The Code of Corporate Governance issued by the Authority on
2 May 2012
“Companies Act” or
“the Act”
: The Companies Act (Chapter 50) of Singapore, as amended,
supplemented or modified from time to time
“Controlling Shareholder” : A person who:
(a) holds directly or indirectly 15% or more of the total
number of issued shares in the company (excluding
treasury shares). The SGX-ST may determine that a
person who satisfies this paragraph is not a controlling
shareholder; or
(b) in fact exercises control over a company
“COO” : Chief operating officer
“Cornerstone Investors” : FIL Investment Management (Hong Kong) Limited and OWW
Investments III Limited
DEFINITIONS
10
“Cornerstone Tranche” : The subscription of the Cornerstone Shares by the
Cornerstone Investors, conditional upon, inter alia, the
Management and Underwriting Agreement and Placement
Agreement having been entered into and not having been
terminated pursuant to their terms on or prior to the Listing
Date
“Cornerstone Shares” : The 19,000,000 new Shares which the Cornerstone Investors
have agreed to subscribe to at the Offering Price
“Cornerstone Subscription
Agreements”
: The cornerstone agreements that each of the Cornerstone
Investors has entered into to subscribe for the Cornerstone
Shares, conditional upon, inter alia, the Management and
Underwriting Agreement and the Placement Agreement
having been entered into and not having been terminated
pursuant to their terms on or prior to the Listing Date
“Directors” : The directors of our Company as at the date of this
Prospectus
“Electronic Applications” : Applications for the Public Offer Shares made through an ATM
or the IB websites of the relevant Participating Banks or
through the mobile banking platform of DBS Bank (including
POSB), subject to and on the terms and conditions of this
Prospectus
“EPS” : Earnings per Share
“Executive Officers” : The executive officers of our Group as at the date of this
Prospectus, who are also key executives as defined under the
SFR
“Financial Advisers Act” or
“FAA”
: The Financial Advisers Act (Chapter 110) of Singapore, as
amended, supplemented or modified from time to time
“FY” : Financial year ended or, as the case may be, ending 31
December
“GDP” : Gross domestic product
“GST” : Singapore goods and services tax
“IB” : Internet banking
“iFAST ESOS” : The employee share option scheme adopted by our Company
on 21 October 2014
“iFAST PSP” : The performance share plan adopted by our Company on
21 October 2014
DEFINITIONS
11
“Independent Directors” : The independent Directors of our Company as at the date of
this Prospectus
“Independent Market
Research Consultants”
: The Platforum, Investment Trends Pty Limited, and Cerulli
Associates Asia Pte Ltd
“Insurance Act” : The Insurance Act (Chapter 142) of Singapore, as amended,
supplemented or modified from time to time
“Latest Practicable Date” : 10 November 2014, being the latest practicable date prior to
the lodgement of this Prospectus with the Authority
“Listing” : Listing of our Company on the Mainboard of the SGX-ST
“Listing Date” : The date of commencement of dealing in our Shares on the
SGX-ST
“Listing Manual” : Listing manual of the SGX-ST, as amended, supplemented or
modified from time to time
“Management and
Underwriting Agreement”
: The management and underwriting agreement dated 4
December 2014 entered into between our Company, DBS
Bank and DMG
“Market Day” : A day on which the SGX-ST is open for trading in securities
“Memorandum” or
“Memorandum of
Association”
: The memorandum of association of our Company
“N.A.” : Not applicable
“NAV” : Net asset value
“New Shares” : The 32,800,000 new Shares for which our Company invites
applications to subscribe pursuant to the Offering, subject to
and on the terms and conditions of this Prospectus (subject to
the Over-allotment Option)
“Nominating Committee” : The nominating committee of our Company as at the date of
this Prospectus
“Non-Executive Directors” : The non-executive Directors of our Company as at the date of
this Prospectus
“Offering” : The Public Offer and the Placement
“Offering Price” : S$0.95 for each New Share
DEFINITIONS
12
“Options” : The existing share options which were granted pursuant to the
2003 ESOS, the 2013 ESOS, and the options to be granted
pursuant to the iFAST ESOS
“Option Shares” : The new Shares which may be allotted and issued on the
exercise of the Options
“Over-allotment Option” : The over-allotment option granted by us to the Stabilising
Manager, on behalf of the Joint Issue Managers, Bookrunners
and Underwriters, exercisable by the Stabilising Manager, in
whole or in part, on its own behalf and on behalf of the Joint
Issue Managers, Bookrunners and Underwriters, during the
period commencing on the Listing Date until the earlier of (i)
the date falling 30 days from the Listing Date or (ii) the date
when the Stabilising Manager (or persons acting on its behalf)
has bought on the SGX-ST an aggregate of 3,280,000
Shares, representing not more than 10% of the Offering, to
undertake stabilising actions, solely to cover the over-
allotment of Shares, if any
Unless otherwise indicated, all information in this Prospectus
assumes that the Over-allotment Option will not be exercised
“Period Under Review” : The period which comprises FY2011, FY2012, FY2013 and
9M2014
“Placement” : The international placement of 30,000,000 New Shares to
investors, including international and other investors in
Singapore and outside the United States in reliance on
Regulation S
“Placement Agreement” : The placement agreement dated 4 December 2014 entered
into between our Company, DBS Bank and DMG
“Placement Shares” : The 30,000,000 New Shares which are the subject of the
Placement
“PRC” or “China” : The People’s Republic of China (which excludes the Special
Administrative Regions of Hong Kong and Macau and Taiwan
area for the purposes of this Prospectus)
“Prospectus” : This prospectus dated 4 December 2014 issued by our
Company in respect of the Offering
“Public Offer” : The offer of 2,800,000 New Shares to the public in Singapore
for subscription at the Offering Price, subject to and on the
terms and conditions set out in this Prospectus
“Public Offer Shares” : The 2,800,000 New Shares which are the subject of the Public
Offer
DEFINITIONS
13
“Remuneration Committee” : The remuneration committee of our Company as at the date of
this Prospectus
“Restructuring Exercise” : The restructuring exercise that we carried out to dispose of
our India business, iFAST India, as described in the section
entitled “Restructuring Exercise” of this Prospectus
“Regulation S” : Regulation S under the US Securities Act
“Risk Committee” : The risk committee of our Company as at the date of this
Prospectus
“Securities Account” : Securities account maintained by a depositor with CDP but
does not include a securities sub-account
“Securities and Futures
Act” or “SFA”
: The Securities and Futures Act (Chapter 289) of Singapore,
as amended, supplemented or modified from time to time
“Service Agreement” : The service agreement entered into between our Company
and Mr. Lim Chung Chun, as described in the section entitled
“Directors, Management and Staff – Service Agreement” of
this Prospectus
“SFO” : Securities and Futures Ordinance (Cap 571) of Hong Kong
“SFR” : The Securities and Futures (Offers of Investment) (Shares
and Debentures) Regulations 2005 of Singapore, as
amended, supplemented or modified from time to time
“SGXNET” : The corporate announcement system maintained by the
SGX-ST for the submission of announcements by listed
companies
“Shareholders” : Registered shareholders of our Company, except where the
registered holder is CDP, the term “Shareholders” shall, in
relation to such Shares, mean the depositors whose
Securities Accounts are credited with Shares
“Shares” : Fully paid ordinary shares in the capital of our Company
“Share Lending Agreement” : The share lending agreement dated 4 December 2014
entered into between Mr. Lim Chung Chun and the Stabilising
Manager in connection with the Over-allotment Option
“Sub-division” : The sub-division of every one (1) Share in the share capital of
our Company into six (6) Shares
“Substantial Shareholder” : A person who holds, directly or indirectly, 5% or more of the
total issued share capital of our Company
DEFINITIONS
14
“Take-over Code” : The Singapore Code on Take-overs and Mergers, which is
administered by the Securities Industry Council in Singapore
“TCA” : The Trust Companies Act (Chapter 336) of Singapore, as
amended, supplemented or modified from time to time
“UK” : The United Kingdom
“US” or “U.S.” : The United States of America
“US Securities Act” : United States Securities Act of 1933, as amended
Currencies, Units and Others
“HK$” and “HK cents” : Hong Kong dollars and cents, respectively, being the lawful
currency of Hong Kong
“RM” and “sen” : Malaysian ringgit and cents, respectively, being the lawful
currency of Malaysia
“RMB” and “RMB cents” : Renminbi dollars and cents, respectively, being the lawful
currency of the PRC
“S$” or “$” and “cents” : Singapore dollars and cents, respectively, being the lawful
currency of Singapore
“US$” : United States dollars, being the lawful currency of the U.S.
“%” or “per cent.” : Per centum or percentage
“sq ft” : Square feet
Any reference to “our”, “ourselves”, “us”, “we” or other grammatical variations thereof in this
Prospectus is a reference to our Company, our Group or any member of our Group as the context
requires.
The terms “Depositor”, “Depository Agent” and “Depository Register” shall have the meanings
ascribed to them respectively in Section 130A of the Companies Act.
The term “entity” shall have the same meaning ascribed to it in Section 2 of the Securities and
Futures Act, while the terms “associated companies”, “associated entity”, “controlling
interest-holder”, “related corporation”, “related entity”, “subsidiary”, “subsidiary entity” and
“substantial interest-holder” shall have the same meanings ascribed to them respectively in
paragraph 1 of the Fourth Schedule of the SFR.
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.
DEFINITIONS
15
Any reference in this Prospectus, the Application Forms or the Electronic Applications to any
statute or enactment is a reference to that statute or enactment for the time being amended or
re-enacted. Any word defined in the Companies Act, the Securities and Futures Act or any
statutory modification thereof or the Listing Manual and used in this Prospectus, the Application
Forms and Electronic Applications shall, where applicable, have the meaning assigned to it under
the Companies Act, the Securities and Futures Act or such statutory modification, or the Listing
Manual, as the case may be.
Any reference in this Prospectus, the Application Forms or the Electronic Applications to Shares
being allotted to an applicant includes allotment to CDP for the account of that applicant.
Any reference to a time of day or dates in this Prospectus, the Application Forms or the Electronic
Applications shall be a reference to Singapore time and dates, unless otherwise stated.
Any discrepancies in the tables included in this Prospectus between the listed amounts and the
totals thereof are due to rounding. Accordingly, figures shown in totals in certain tables may not
be an arithmetic aggregation of the figures which precede them.
In addition, unless we indicate otherwise, all information in this Prospectus assumes that no New
Shares have been re-allocated between the Placement and the Public Offer.
DEFINITIONS
16
This glossary contains an explanation of certain terms used in this Prospectus in connection with
our Group and our business. The terms and their assigned meanings may not correspond to
standard industry or common meanings or usage of these terms.
“adviser-assisted investors” : Investors who carry out transactions in Investment
Products with the assistance of a FA, a bank or a
financial institution
“Appointed Representative” : An appointed representative pursuant to Section 99B of
the SFA in respect of certain types of activities regulated
by the MAS
“Assets Under Administration” or
“AUA”
: The value of investments administered by our Group
“B2B” : Business-to-Business
“B2C” : Business-to-Customer
“B2B Business” : Our Group’s business which relates to the provision of a
Platform to banks, financial institutions and FAs via our
iFAST Financial Website or otherwise (including our
Pensions Business)
“B2B Customers” : Customers of our Group’s B2B Business (including FAs
who maintain an investment account with us via a
nominee arrangement and adviser-assisted investors
who instruct their FAs to maintain an investment account
with us)
“B2C Business” : Our Group’s business which relates to the provision of a
Platform to investors via our Fundsupermart.com
Website
“B2C Customers” : Customers of our Group’s B2C Business (including DIY
Investors who use the Fundsupermart.com Website to
maintain an investment account with us)
“CMS Licence” : A capital markets services licence that is granted by the
MAS under Section 86 of the SFA to a person to carry on
a business regulated by the SFA
“CMSL” : A capital markets services licence that is granted by the
SC under Section 61 of the CMSA
“CPFIS” : CPF Investment Scheme
GLOSSARY OF TECHNICAL TERMS
17
“Customers” : (1) B2B Customers;
(2) B2C Customers; and/or
(3) any other person or institution who uses the
services provided by our Group
“CUTA” : Corporate Unit Trust Adviser
“DIY” : Do-it-yourself
“DIY Investors” : Investors who prefer to make and execute their own
investment decisions and/or invest in Investment
Products by themselves without the assistance of any FA
“FA” or “Financial Advisers” : Any persons and institutions carrying on the business of
providing financial advisory service
“FA Licence” : A licence that is granted by the MAS under Section 13 of
the FAA in respect of a FA
“financial advisory service” : (1) Advising others, either directly or through
publications or writings, and whether in electronic,
print or other form, concerning any investment
products, other than:
(a) in the manner set out in paragraph (2) of the
Second Schedule to the FAA; or
(b) advising on corporate finance within the
meaning of the SFA;
(2) Advising others by issuing or promulgating
research analyses or research reports, whether in
electronic, print or other form, concerning any
investment products;
(3) Marketing of any collective investment scheme; and
(4) Arranging of any contract of insurance in respect of
life policies
“Fundsupermart.com Website” : The B2C arm of our Platform accessible over the Internet
via the website www.fundsupermart.com
“GFC” : The global financial crisis in 2008 and 2009
“HNW” : High Net Worth
GLOSSARY OF TECHNICAL TERMS
18
“iFAST Financial Website” : The B2B arm of our Platform accessible over the Internet
via the website www.ifastfinancial.com
“iFAST Pensions Website” : The pensions arm of our Platform accessible over the
Internet via the website www.ifastpensions.com
“iGP” : iFAST Global Prestige
“iGP Website” : The B2B arm of our Platform which services financial
institutions and FA companies with HNW clients,
accessible over the Internet via the website
www.ifastgp.com
“Investment Products” : Funds (including unit trusts) and SGS Bonds in
Singapore, funds (including unit trusts) in Malaysia, and
funds (including unit trusts) and corporate bonds in Hong
Kong, and such other financial products as we may
provide or distribute from time to time
“IPRA” : Institutional PRS Adviser
“IT” : Information technology
“IUTA” : Institutional Unit Trust Adviser
“Pensions Business” : Our Group’s business which relates to the provision of a
Platform to assist companies with administering pension
schemes for their employees, and provide administrative
support and specialist services to help companies start
up and administer employee retirement benefit plans
“Platform” : The Internet-based Investment Products distribution and
administration platforms developed, owned and
operated by our Group
“Platform Fees” : The fees that are paid by Customers to us for the
services we provide
“PRS” : Private retirement schemes in Malaysia
“representative” : A person in the direct employment of or acting for or by
arrangement with a FA, who performs for the FA any of
the functions of a FA (other than work ordinarily
performed by accountants, clerks or cashiers), whether
his remuneration is by way of salary, wages, commission
or otherwise, and includes an officer of the FA who
performs for the FA any of those functions, whether or
not his remuneration is aforesaid
GLOSSARY OF TECHNICAL TERMS
19
“SGS Bonds” : Singapore government securities issued by the
Government of Singapore through the MAS, which may
comprise treasury bills and bonds
“Subscription” : Purchase of Investment Products measured in monetary
value
“Suppliers” : Fund houses that provide us with Investment Products
“Switching” : Redemption from one investment product and
subsequent subscription into another investment product
“Trailer Fees” : The fees that are paid to us by a fund house based on
AUA attributable to such fund house
“Transfer-in” : Monetary value of the investment products transferred
from any third-party platform onto our Platform
“Transfer-out” : Monetary value of the investment products transferred
from our Platform to any third-party platform
“Wrap Fees” : In relation to our B2B Business, the fees that we receive
from adviser-assisted investors for the services provided
to them by the FAs and us
GLOSSARY OF TECHNICAL TERMS
20
All statements contained in this Prospectus, statements made in the press releases and oral
statements that may be made by us or our Directors, Executive Officers or employees acting on
our behalf, that are not statements of historical fact, constitute “forward-looking statements”.
Some of these statements can be identified by forward-looking terms such as “anticipate”,
“believe”, “could”, “estimate”, “expect”, “if”, “intend”, “may”, “plan”, “possible”, “probable”,
“project”, “should”, “will” and “would” or similar words. However, these words are not the exclusive
means of identifying forward-looking statements. All statements regarding our Group’s expected
financial position, business strategies, plans and prospects and the future prospects of our
industry are forward-looking statements. These forward-looking statements, including but not
limited to statements as to our Group’s revenue and profitability, prospects, future plans, other
expected industry trends and other matters discussed in this Prospectus regarding matters that
are not historic facts, are only predictions.
These forward-looking statements involve known and unknown risks, uncertainties and other
factors that may cause our Group’s actual future results, performance or achievements to be
materially different from any future results, performance or achievements expected, expressed or
implied by such forward-looking statements. These factors include, amongst others, changes in
the political, social and economic conditions and regulatory environment in Singapore and other
countries where we may conduct our business, changes in competitive conditions and other
factors beyond our control. Some of these factors are discussed in more detail in the section
entitled “Risk Factors” of this Prospectus.
All forward-looking statements made by or attributable to us, or persons acting on our behalf,
contained in this Prospectus are expressly qualified in their entirety by such factors. Given the
risks and uncertainties that may cause our Group’s actual future results, performance or
achievements to be materially different from that expected, expressed or implied by the
forward-looking statements in this Prospectus, undue reliance must not be placed on these
statements.
Neither our Company, any of the Joint Issue Managers, Bookrunners and Underwriters, our
respective advisers nor any other person represents or warrants that our Group’s actual future
results, performance or achievements will be as discussed in those forward-looking statements.
Our actual results may differ materially from those anticipated in these forward-looking
statements.
Further, our Company, any of the Joint Issue Managers, Bookrunners and Underwriters, our
respective advisers and any other person 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, even if new information
becomes available or other events occur in the future. We are, however, subject to the provisions
of the Securities and Futures Act and the Listing Manual regarding corporate disclosure. In
particular, pursuant to Section 241 of the Securities and Futures Act, if after this Prospectus is
registered but before the close of the Offering, we become aware of: (a) a false or misleading
statement or matter in this Prospectus; (b) an omission from this Prospectus of any information
that should have been included in it under Section 243 of the Securities and Futures Act; or (c)
a new circumstance that has arisen since this Prospectus was lodged with the Authority and would
have been required by Section 243 of the Securities and Futures Act to be included in this
Prospectus, if it had arisen before this Prospectus was lodged and that is materially adverse from
the point of view of an investor, we may lodge a supplementary or replacement prospectus with
the Authority.
CAUTIONARY NOTE ON FORWARD-LOOKING STATEMENTS
21
LISTING ON THE SGX-ST
We have made an application to the SGX-ST for permission to deal in, and for quotation of, all our
Shares already issued, the New Shares, the Cornerstone Shares, the Option Shares, the Award
Shares and the Additional Shares. Such permission will be granted when our Company has been
admitted to the Official List of the SGX-ST.
Our acceptance of applications will be conditional upon, inter alia, permission being granted by
the SGX-ST to deal in, and for quotation of, all of our existing issued Shares, the New Shares, the
Cornerstone Shares, the Option Shares, the Award Shares and the Additional Shares. If the
Offering is not completed because such permission is not granted for any reason, monies paid in
respect of any application accepted will be returned to you, without interest or any share of
revenue or other benefit arising therefrom and at your own risk, and you will not have any claims
whatsoever against us and the Joint Issue Managers, Bookrunners and Underwriters.
We have received a letter of eligibility-to-list from the SGX-ST for our existing issued Shares, the
New Shares, the Cornerstone Shares, the Option Shares, the Award Shares and the Additional
Shares. The SGX-ST assumes no responsibility for the correctness of any of the statements
made, opinions expressed or reports contained in this Prospectus. Admission to the Official List
of the SGX-ST is not to be taken as an indication of the merits of the Offering, our Company, our
subsidiaries, our existing issued Shares, the New Shares, the Cornerstone Shares, the Option
Shares, the Award Shares and the Additional Shares.
In connection with the Offering, we have granted the Stabilising Manager an Over-allotment
Option exercisable by the Stabilising Manager, in whole or in part, on one or more occasions,
during the period commencing from the Listing Date until the earlier of (i) the date falling 30 days
from the Listing Date; or (ii) the date when the Stabilising Manager (or persons acting on its
behalf) has bought on the SGX-ST an aggregate of 3,280,000 Shares, representing not more than
10% of the Offering, to undertake stabilizing actions. Pursuant to the Over-allotment Option, the
Stabilising Manager may subscribe and/or procure subscribers for up to an aggregate of
3,280,000 Additional Shares (which in aggregate is not more than 10% of the Offering) at the
Offering Price, solely to cover the over-allotment of Shares, if any.
In connection with the Offering, the Stabilising Manager (or persons acting on behalf of the
Stabilising Manager), may, in its discretion, but subject always to applicable laws and regulations,
over-allot Shares or effect transactions with a view to supporting the market price of the Shares
at a level higher than that which would otherwise prevail in the open market. Such transactions
may be effected on the SGX-ST and other jurisdictions where it is permissible to do so, in each
case in compliance with all applicable laws and regulations. Such transactions, if commenced,
may be discontinued at any time by the Stabilising Manager without notice (unless such notice is
required by law) and shall not be effected after the earlier of (i) the date falling 30 days from the
Listing Date or (ii) the date when the Stabilising Manager or its appointed agent has bought on the
SGX-ST an aggregate of 3,280,000 Shares, representing not more than 10% of the Offering, to
undertake stabilising actions.
This Prospectus has been reviewed and approved by our Directors and they individually and
collectively accept full responsibility for the accuracy of the information given in this Prospectus
and confirm after making all reasonable enquiries that, to the best of their knowledge and belief,
this Prospectus constitutes full and true disclosure of all material facts about the Offering, our
Company and its subsidiaries, and our Directors are not aware of any facts the omission of which
would make any statement in this Prospectus misleading. Where information in this Prospectus
has been extracted from published or otherwise publicly available sources or obtained from a
THE OFFERING
22
named source, the sole responsibility of the Directors has been to ensure that such information
has been accurately and correctly extracted from those sources and/or reproduced in this
Prospectus in its proper form and context.
None of us or any of the Joint Issue Managers, Bookrunners and Underwriters or any of our or
their respective affiliates, directors, officers, employees, agents, representatives or advisers nor
any other parties involved in the Offering is making any representation to any person regarding the
legality of an investment in our Shares by such person under any investment or other laws or
regulations.
No information in this Prospectus should be considered to be business, legal or tax advice
regarding an investment in our Shares. You should consult your own legal, financial, tax or other
professional adviser 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 Prospectus in connection with the Offering and, if given or made, such
information or representation must not be relied upon as having been authorised by us and the
Joint Issue Managers, Bookrunners and Underwriters. Neither the delivery of this Prospectus and
the Application Forms nor the Offering shall, under any circumstances, constitute a continuing
representation or create any suggestion or implication that the information herein is correct as of
any date subsequent to the date hereof or that there has been no change in the affairs of our
Company or our Group or in any statement of fact or information contained in this Prospectus
since the date of this Prospectus. Where such changes occur, we may make an announcement of
the same to the SGX-ST and the public, and if required, lodge a supplementary document or
replacement document pursuant to Section 241 of the Securities and Futures Act and take
immediate steps to comply with Section 241 of the Securities and Futures Act. You should take
note of any such announcement and/or documents issued by us in compliance with the Securities
and Futures Act and, upon release of such announcement and/or documents, shall be deemed to
have notice of such changes.
Save as expressly stated in this Prospectus, nothing herein is, or may be relied upon as, a promise
or representation as to our future performance or policies. This Prospectus has been prepared
solely for the purpose of the Offering and may not be relied upon by any persons other than
yourself in connection with your application for the New Shares or for any other purpose. This
Prospectus does not constitute an offer or invitation or solicitation to subscribe for the
New Shares in any jurisdiction in which such offer, invitation or solicitation is unauthorised
or unlawful nor does it constitute an offer or invitation or solicitation to any person to
whom it is unlawful to make such an offer or invitation or solicitation.
The New Shares have not been, and will not be, registered under the US Securities Act and
accordingly, may not be offered or sold within the United States. The New Shares are only being
offered and sold outside the United States in offshore transactions as defined in, and in reliance
on, Regulation S.
A copy of this Prospectus has been lodged with and registered by the Authority. The Authority
assumes no responsibility of the contents of this Prospectus. Registration of this Prospectus by
the Authority does not imply that the Securities and Futures Act, or any other legal or regulatory
requirements, have been complied with. The Authority has not, in any way, considered the merits
of our existing Shares, the New Shares, the Cornerstone Shares, the Option Shares, the Award
Shares or the Additional Shares, as the case may be, being offered for investment.
THE OFFERING
23
No Shares shall be allotted or allocated on the basis of this Prospectus later than six (6) months
after the date of registration of this Prospectus by the Authority.
We are subject to the provisions of the Securities and Futures Act and the Listing Manual
regarding corporate disclosure. In particular, if after this Prospectus is registered but before the
close of the Offering, we become aware of:
(a) a false or misleading statement in this Prospectus;
(b) an omission from this Prospectus of any information that should have been included in it
under Section 243 of the Securities and Futures Act; or
(c) a new circumstance that has arisen since this Prospectus was lodged with the Authority
which would have been required by Section 243 of the Securities and Futures Act to be
included in this Prospectus, if it had arisen before this Prospectus was lodged,
that is materially adverse from the point of view of an investor, we may lodge a supplementary or
replacement prospectus with the Authority pursuant to Section 241 of the Securities and Futures
Act.
Where prior to the lodgement of the supplementary or replacement prospectus, applications have
been made under this Prospectus to subscribe for the New Shares and:
(a) where the New Shares have not been issued to you, our Company shall either:
(i) within two (2) days (excluding any Saturday, Sunday or public holiday) from the date of
lodgement of the supplementary or replacement prospectus, give you notice in writing
of how to obtain, or arrange to receive, a copy of the supplementary or replacement
prospectus, as the case may be, and provide you with an option to withdraw your
applications and take all reasonable steps to make available within a reasonable period
the supplementary or replacement prospectus, as the case may be, to you if you have
indicated that you wish to obtain, or have arranged to receive, a copy of the
supplementary or replacement prospectus;
(ii) within seven (7) days from the date of lodgement of the supplementary or replacement
prospectus, give you the supplementary or replacement prospectus, as the case may
be, and provide you with an option to withdraw your application; or
(iii) treat the applications as withdrawn and cancelled, in which case your application shall
be deemed to have been withdrawn and cancelled and our Company shall, within seven
(7) days from the date of lodgement of the supplementary or replacement prospectus,
return all monies paid in respect of any application for the New Shares, without interest
or any share of revenue or other benefit arising therefrom and at your own risk; or
(b) where the New Shares have been issued to you, our Company shall either:
(i) within seven (7) days from the date of lodgement of the supplementary or replacement
prospectus, give you the supplementary or replacement prospectus, as the case may
be, and provide you with an option to return to our Company the New Shares which you
do not wish to retain title in; or
THE OFFERING
24
(ii) treat the issuance of New Shares as void, in which case the issue shall be deemed void
and our Company shall within seven (7) days from the date of lodgement of the
supplementary or replacement prospectus, return all monies paid in respect of any
application for the New Shares, without interest or any share of revenue or other benefit
arising therefrom and at your own risk.
If you wish to exercise your option under paragraph (a)(i) above to withdraw your application in
respect of the New Shares, you shall, within 14 days from the date of lodgement of the
supplementary or replacement prospectus, notify our Company of this, whereupon our Company
shall, within seven (7) days from the receipt of such notification, pay to you all monies paid by you
on account of your application for such New Shares, without interest or any share of revenue or
other benefit arising therefrom and at your own risk.
If you wish to exercise your option under paragraph (b)(i) above to return the New Shares issued
to you, you shall, within 14 days from the date of lodgement of the supplementary or replacement
prospectus, notify our Company of this and return all documents, if any, purporting to be evidence
of title to those Shares, to our Company, whereupon our Company shall, within seven (7) days
from the receipt of such notification and documents, if any, pay to you all monies paid by you on
account of your application for those New Shares, without interest or any share of revenue or
other benefit arising therefrom and at your own risk and the issuance of those New Shares shall
be deemed to be void.
Under the Securities and Futures Act, the Authority may, in certain circumstances issue a stop
order pursuant to Section 242 of the Securities and Futures Act (the “Stop Order”) to our
Company, directing that no New Share or no further Share to which this Prospectus relates, be
allotted or issued. Such circumstances will include a situation where this Prospectus (i) contains
a statement or matter, which in the opinion of the Authority, is false or misleading; (ii) omits any
information that should be included in accordance with Section 243 of the Securities and Futures
Act; (iii) does not, in the opinion of the Authority, comply with the requirements of the Securities
and Futures Act; or (iv) the Authority is of the opinion that it is in the public interest to do so.
Where applications to subscribe for the New Shares to which the Prospectus relates have been
made prior to the Stop Order, then:
(a) where the New Shares have not been issued to you, your application for the New Shares
shall be deemed to have been withdrawn and cancelled, and our Company shall, within 14
days from the date of the Stop Order, pay to you all monies which you have paid on account
of your application for the New Shares; or
(b) where the New Shares have been issued to you, the issuance of New Shares shall be
deemed to be void, and our Company shall, within 14 days from the date of the Stop Order,
pay to you all monies which you have paid on account of your application for the New Shares.
In each of the above instances where monies are refunded to you, it shall be paid to you without
interest or any share of revenue or other benefit arising therefrom and at your own risk, and you
will not have any claims against our Company, the Joint Issue Managers, Bookrunners and
Underwriters.
THE OFFERING
25
Copies of this Prospectus, the Application Forms and envelopes may be obtained on request,
subject to availability, during office hours from:
DBS Bank Ltd.
12 Marina Boulevard, Level 46
Marina Bay Financial Centre Tower 3
Singapore 018982
DMG & Partners Securities Pte Ltd
10 Collyer Quay,
#09-08, Ocean Financial Centre
Singapore 049315
and where applicable, members of the Association of Banks in Singapore, members of the SGX-ST
and merchant banks in Singapore. A copy of this Prospectus is also available on the SGX-ST websitehttp://www.sgx.com and the Authority’s OPERA website athttp://opera.mas.gov.sg/ExtPortal.
The Public Offer will open at 7.00 p.m. on 4 December 2014 and will close at 12.00 p.m. on
9 December 2014 or such other period or periods as our Company may, in consultation with
the Joint Issue Managers, Bookrunners and Underwriters, at its absolute discretion decide,
subject to any limitations under all applicable laws. In the event a supplementary document
or replacement document is lodged with the Authority, the Offering will remain open for at
least 14 days after the lodgement of the supplementary or replacement prospectus.
Details of the procedures for application for the New Shares are set out in Appendix J of this
Prospectus.
INDICATIVE TIMETABLE FOR LISTING
The indicative timetable for the Public Offer and trading in our Shares is set out below for your
reference:
Indicative date/time Event
7.00 p.m. on 4 December 2014 Opening date and time for the Public Offer
12.00 p.m. on 9 December 2014 Closing date and time for the Public Offer
10 December 2014 Balloting of applications, if necessary (in the event of
an over-subscription for the Public Offer Shares)
Commence returning or refunding of application
monies to unsuccessful or partially successful
applicants
9.00 a.m. on 11 December 2014 Commence trading on a “ready” basis
16 December 2014 Settlement date for all trades done on a “ready” basis
on 11 December 2014
The above timetable is only indicative and is subject to change at our discretion, with the
agreement of the Joint Issue Managers, Bookrunners and Underwriters as it assumes that the
date of closing for the Public Offer will be 9 December 2014, the date of admission of our Company
to the Official List of the SGX-ST will be 11 December 2014, the SGX-ST’s shareholding spread
requirement will be complied with and the New Shares will be issued and fully paid-up prior to
THE OFFERING
26
11 December 2014. The actual date on which our Shares will commence trading on a “ready” basis
will be announced when it is confirmed by the SGX-ST. All dates and times referred to above are
Singapore dates and times.
The above timetable and procedure may be subject to such modifications as the SGX-ST may, at
its discretion, decide, including the decision to permit trading on a “ready” basis and the
commencement date of such trading. The commencement of trading on a “ready” basis will
be entirely at the discretion of the SGX-ST. All persons trading in our Shares before their
Securities Accounts with CDP are credited with the relevant number of Shares do so at the
risk of selling Shares which neither they nor their nominees, as the case may be, have been
allotted or are otherwise beneficially entitled to.
We may, at our discretion, with the agreement of the Joint Issue Managers, Bookrunners and
Underwriters, subject to all applicable laws and regulations and the rules of the SGX-ST, agree to
extend or shorten the period during which the Offering is open, provided that such period shall not
be shorter than two (2) Market Days.
In the event of any changes in the closure of the Public Offer or the time period during which the
Public Offer is open, we will publicly announce the same:
(i) through a SGXNET announcement to be posted on the SGX-ST’s website athttp://www.sgx.com; and
(ii) in one (1) or more major Singapore newspapers such as The Straits Times, The Business
Times and Lianhe Zaobao.
Results of the Public Offer including the allotment of the New Shares and balloting (in the event
of an over-subscription for the Public Offer Shares) will be provided through the channels in (i) and
(ii) above.
Investors should consult the SGX-ST announcement on the “ready” listing date on the Internet (at
the SGX-ST’s website athttp://www.sgx.com) or the newspapers, or check with their brokers on
the date on which trading on a “ready” basis will commence.
We reserve the right to reject or accept, in whole or in part, or to scale down or ballot any
application for the Public Offer Shares, without assigning any reason therefore, and no enquiry
and/or correspondence on our decision will be entertained.
THE OFFERING
27
DETAILS OF THE OFFERING
The Issuer : iFAST Corporation Ltd.
The Offering : 32,800,000 New Shares by way of the Public Offer and
the Placement, subject to the Over-Allotment Option.
The New Shares will, upon allotment and issue, rank pari
passu in all respects with our existing issued Shares.
Offering Price : S$0.95 for each New Share.
Purpose of the Offering : The purpose of the Offering is to secure the admission of
our Company to the Official List of the SGX-ST. Our
Directors believe that the listing of our Company and the
quotation of our Shares on the Official List of the
SGX-ST will enhance the corporate profile of our Group
locally and overseas and enable us to tap the capital
markets to fund the expansion of our operations.
The Offering will also provide members of the public, our
employees, business associates and those who have
contributed to the success of our Group with an
opportunity to participate in the equity of our Company.
The Public Offer : 2,800,000 Public Offer Shares offered to the public in
Singapore to subscribe for at the Offering Price.
The Placement : 30,000,000 Placement Shares by way of a placement to
investors, including institutional and other investors in
Singapore and outside the United States in reliance on
Regulation S.
Cornerstone Tranche : Concurrently but separate from the Offering, each of the
Cornerstone Investors has entered into a Cornerstone
Subscription Agreement with our Company to subscribe
for an aggregate of 19,000,000 Cornerstone Shares at
the Offering Price, conditional upon, inter alia, the
Management and Underwriting Agreement and the
Placement Agreement having been entered into and not
having been terminated pursuant to its terms on or prior
to the date of Listing.
The Cornerstone Shares will in aggregate constitute
approximately 7.4% of the total number of issued Shares
as at the date of Listing. The Cornerstone Shares
acquired by the Cornerstone Investors are not subject to
any lock-up restrictions in respect of their shareholding
interests in our Company.
THE OFFERING
28
In the event that any one (1) or more Cornerstone
Investors fails to pay for the Cornerstone Shares which
they have committed to subscribe, such Cornerstone
Shares will be reallocated to the Placement and the
Offering may still proceed and, if so, the subscribers of
the New Shares will still be required to pay for and
complete their subscription pursuant to the Offering.
Clawback and Reallocation : The New Shares may be re-allocated between the Public
Offer and the Placement at the discretion of the Joint
Issue Managers, Bookrunners and Underwriters in the
event of excess applications in one (1) and a deficit of
applications in the other.
Application for Public Offer
Shares under the Public Offer
: Investors applying for Public Offer Shares under the
Public Offer must follow the application procedures set
out in Appendix J of this Prospectus.
Applications must be paid for in Singapore dollars in
integral multiples of 1,000 Public Offer Shares subject to
a minimum application for 1,000 Public Offer Shares.
Over-allotment Option : In connection with the Offering, we have granted the
Stabilising Manager an Over-allotment Option
exercisable by the Stabilising Manager, in whole or in
part, on its own behalf and on behalf of the Joint Issue
Managers, Bookrunners and Underwriters on one or
more occasions, to subscribe and/or procure subscribers
for up to an aggregate of 3,280,000 Additional Shares
(which in aggregate is not more than 10% of the Offering)
at the Offering Price, from the Listing Date until the
earlier of (i) the date falling 30 days from the Listing
Date; or (ii) the date when the Stabilising Manager (or
persons acting on its behalf) has bought on the SGX-ST
an aggregate of 3,280,000 Shares, representing not
more than 10% of the Offering, to undertake stabilising
actions, solely to cover the over-allotment of Shares, if
any. The Additional Shares will, upon allotment and
issue, rank pari passu in all respects with the existing
issued Shares.
Unless we indicate otherwise, all information in this
Prospectus assumes that the Stabilising Manager does
not exercise the Over-allotment Option.
THE OFFERING
29
Stabilisation : In connection with the Offering, the Stabilising Manager
(or persons acting on behalf of the Stabilising Manager),
may, in its discretion, but subject always to applicable
laws and regulations, over-allot Shares or effect
transactions with a view to supporting the market price of
the Shares at a level higher than that which would
otherwise prevail in the open market. Such transactions
may be effected on the SGX-ST and other jurisdictions
where it is permissible to do so, in each case in
compliance with all applicable laws and regulations.
Such transactions, if commenced, may be discontinued
at any time by the Stabilising Manager without notice
(unless such notice is required by law) and shall not be
effected after the earlier of (i) the date falling 30 days
from the Listing Date or (ii) the date when the Stabilising
Manager or its appointed agent has bought on the
SGX-ST an aggregate of 3,280,000 Shares,
representing not more than 10% of the Offering, to
undertake stabilising actions solely to cover the over-
allotment of Shares, if any.
Listing Status : Our Shares will be quoted in S$ on the Mainboard of the
SGX-ST, subject to the admission of our Company to the
Official List of the SGX-ST and permission for dealing in
and for quotation of our Shares being granted by the
SGX-ST and the Authority not issuing a Stop Order.
Settlement : We expect to receive payment for all the New Shares
from the Placement and the Public Offer on or about 11
December 2014. We will deliver the global share
certificates representing the New Shares to CDP for
deposit into the Securities Accounts of successful
applicants on or about 11 December 2014. Please refer
to the section entitled “Clearance and Settlement” in this
Prospectus for more details.
Risk Factors : Investing in our Shares involves risks which are set out
in the section entitled “Risk Factors” of this Prospectus.
THE OFFERING
30
Based on the Offering Price, we will raise gross proceeds of approximately S$49.2 million from the
Offering and the Cornerstone Tranche (assuming the Over-allotment Option is not exercised). The
estimated net proceeds from the Offering and the Cornerstone Tranche (after deducting the
estimated expenses in relation to the Offering and the Cornerstone Tranche of approximately
S$4.6 million) will be approximately S$44.6 million. The estimated expenses incurred in relation
to the Offering and the Cornerstone Tranche will be borne by our Company.
We intend to use the proceeds from the Offering and the Cornerstone Tranche as follows:
Use of Proceeds
Estimated
amount
(S$ ’million)
Estimated amount
allocated for each
dollar of the gross
proceeds raised from
the Offering and the
Cornerstone Tranche
(cents)
As a percentage
of the gross
proceeds from the
Offering and the
Cornerstone Tranche
(%)
Mergers and
acquisitions strategy
(1)
27.2 55.3 55.3
Expansion of our
business in the Chinese
market
(1)
7.0 14.2 14.2
Enhancement of our
product capabilities,
IT and services
(1)
8.0 16.3 16.3
Working capital
purposes 2.4 4.9 4.9
Net Proceeds 44.6 90.7 90.7
Estimated expenses
incurred in connection
with the Offering
Professional fees 1.6 3.2 3.2
Underwriting and
placement commission 1.8 3.7 3.7
Miscellaneous
expenses (including
listing fees) 1.2 2.4 2.4
Total 49.2 100.0 100.0
Note:
(1) For further details, please refer to the section entitled “Prospects, Business Strategies and Plans” in this Prospectus.
USE OF PROCEEDS AND OFFERING EXPENSES
31
Assuming the Over-allotment Option is exercised in full, we will receive additional net proceeds
of approximately S$3.0 million which will be used for working capital purposes.
Pending the deployment of net proceeds as aforesaid, the net proceeds will be placed in short
term deposits with financial institutions or used to invest in bonds, unit trusts and/or short-term
money market instruments with risk and return profiles that our Directors may deem appropriate.
We will make periodic announcements on the use of net proceeds from the Offering and the
Cornerstone Tranche as and when the funds are materially disbursed, and provide a status report
on the use of proceeds in our annual report.
In the event that any part of our proposed use of net proceeds from the Offering and the
Cornerstone Tranche does not materialise or proceed as planned, our Directors will carefully
evaluate the situation and may reallocate the proceeds to other purposes and/or hold such funds
on short-term deposits with financial institutions or use such funds to invest in bonds, unit trusts
and/or short-term money market instruments with risk and return profiles that our Directors may
deem appropriate, for so long as our Directors deem it to be in the interest of our Company. Any
change in the use of the net proceeds will be subject to the listing rules of the SGX-ST and
appropriate announcements will be made by our Company on SGXNET.
In the opinion of our Directors, no minimum amount must be raised from the Offering and the
Cornerstone Tranche.
USE OF PROCEEDS AND OFFERING EXPENSES
32
In respect of the Period Under Review up to the Latest Practicable Date, we have declared and
paid dividends as follows:
FY2011 FY2012 FY2013
1 January 2014 up to the
Latest Practicable Date
Dividend per Share
(1)
(cents) 0.44 0.54 1.98
(2)
4.70
Notes:
(1) The Dividend per Share is calculated on a post Sub-division basis.
(2) Excluding the interim dividend by way of a distribution in specie during FY2013. Please refer to the section entitled
“Restructuring Exercise” of this Prospectus for further details on the distribution in specie during FY2013.
We may declare dividends by ordinary resolution of our Shareholders at a general meeting, but
we may not pay dividends in excess of the amount recommended by our Directors. The
declaration and payment of dividends will be determined at the sole discretion of our Directors,
subject to the approval of our Shareholders. Our Directors may also declare an interim dividend
without the approval of our Shareholders. In making their recommendations, our Directors will
consider, inter alia, our retained earnings, expected future earnings, operations, cash flow, capital
requirements, general business and financing conditions, as well as other factors which our
Directors may determine appropriate.
We currently do not have a fixed dividend policy.
However, our Directors intend to recommend and distribute dividends of 60% of our net profit after
tax (excluding exceptional items) for 4Q2014, and dividends of 60% of our net profit after tax
(excluding exceptional items) for FY2015 (collectively, the “Proposed Dividend”), as we wish to
reward Shareholders for participating in our Group’s growth. However, investors should note that
all the foregoing statements, including the statement 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 or the dividends declared and paid by our subsidiaries as an indication of our
Group’s future dividend policy. No inference should be or can be made from any of the foregoing
statements as to our actual future profitability or ability to pay dividends. Please also see the
section entitled “Risk Factors – We may not be able to pay dividends in future” in this Prospectus
for the risk factor relating to our ability to declare dividends in relation to the Shares.
For information relating to taxes payable on dividends, please refer to Appendix I of this
Prospectus.
DIVIDEND POLICY
33
Singapore
Currently, no foreign exchange control restrictions are in force in Singapore.
Hong Kong
There are currently no foreign exchange control restrictions in Hong Kong or similar laws,
decrees, regulatory or other requirements that may affect the following:
(a) The ability to transfer funds by or to our Company in the form of repatriation of capital and
remittance of profits;
(b) The availability of cash and cash equivalents for use by our Company; and
(c) The remittance of dividends, interest or other payments to holders of our Company’s
securities provided that dividends of a Hong Kong private company can only be distributed
out of profits available for distribution, which generally refer to its accumulated, realised
profits, so far as not previously used by distribution or capitalisation, less its accumulated,
realised loss, so far as not previously written off in a reduction or reorganisation of capital.
Malaysia
A non-resident is free to repatriate any amount of its own funds in Malaysia at any time, including
capital, divestment proceeds, profits, dividends, rental, fees and interest arising from investment
in Malaysia, provided that the repatriation is made in foreign currency.
As our Company is neither incorporated nor registered in Malaysia, we are a non-resident as
defined under Section 213 of the Malaysian Financial Services Act 2013 Act 758 (“FSA”), for the
purposes of the Foreign Exchange Administration notices (“FEA Notices”) issued pursuant to the
FSA.
Under Subsection 214(2) of the FSA, no person shall undertake or engage in any transaction set
out in Schedule 14 (“Schedule 14”) except with the written approval of Bank Negara Malaysia
(“Bank”). Paragraph 3 of the Schedule 14 prohibits, the making of any payment by a person to
another person including a payment:
(a) to or for the credit of a non-resident;
(b) by a resident or a non-resident;
(c) as a consideration for or in association with:
(i) the receipt of a payment or the acquisition of a property, outside Malaysia, by any
person; or
(ii) the creation in favour of, or the transfer to, any person, of a right to receive a payment
or to acquire a property, outside Malaysia;
(d) under a judgment or order of any court or an award of any arbitrator or under any written law
in favour of a non-resident, or a resident outside Malaysia; or
(e) for settlement of property in favour of a non-resident, or a resident outside Malaysia,
EXCHANGE CONTROLS
34
other than:
(A) payment in ringgit between residents in Malaysia; and
(B) payment in foreign currency between non-residents outside Malaysia.
Paragraph 4 of the Schedule 14 further prohibits, the receiving of any payment in paragraph 3 of
the Schedule 14.
Under Notice 4 (which is one (1) of the series of FEA Notices regulating payments made in any
foreign currency or Ringgit Malaysia), a resident is permitted:
(a) to pay to a non-resident any amount in foreign currency for any import of goods and services;
(b) to pay to a non-resident for services such as salaries, wages, commissions and fees
(rendered in Malaysia), subject to payments being made in foreign currency when remitting
abroad;
(c) to pay to a non-resident profits, dividends, fees, rental and royalty, subject to payments being
made in foreign currency when remitting abroad;
(d) to pay to a non-resident for the purchase of a Ringgit asset, subject to payments being made
in foreign currency when remitting abroad;
(e) to pay in foreign currency to residents to settle any security, Islamic security, financial
instrument or Islamic financial instrument approved by the Bank; or
(f) to pay in foreign currency to residents to settle a commodity murabahah transaction through
a resident commodity trading service provider.
A resident individual is allowed to make or receive payment in foreign currency, for any purpose
to or from an immediate family member.
Further to the relaxation of the foreign exchange administration rules, Notice 3 of the FEA Notices
provides, that residents (companies on a corporate group basis) without domestic Ringgit credit
facilities are free to invest any amount abroad. Residents (companies on corporate group basis
or individuals) with domestic Ringgit credit facilities are also allowed to fund their investment
abroad as follows:
(a) any amount of own foreign currency funds retained onshore or offshore;
(b) up to RM1 million equivalent in aggregate per calendar year for individuals; and
(c) up to RM50 million equivalent in aggregate per calendar year for resident corporations.
With effect from 30 January 2004, the Bank abolished the requirement for resident payors to
complete the “Form P” in hard copy for payments to non-residents exceeding RM50,000.
However, banks would still require similar information as those required in Form P as they have
an obligation to report to the Bank, including their own payments, through an online system called
the International Transactions Information System (“ITIS”). ITIS was implemented by the Bank on
1 January 2004, among others to record payments between residents for payments between
residents and non-residents through the banking system. With effect from 1 October 2007, the
reporting threshold was increased from RM50,000 to RM200,000.
EXCHANGE CONTROLS
35
A “resident” under the FSA means:
(a) a citizen of Malaysia, excluding a person who has obtained permanent resident status in a
country or territory outside Malaysia and is residing outside Malaysia;
(b) a non-citizen of Malaysia who has obtained permanent resident status in Malaysia and is
ordinarily residing in Malaysia;
(c) a body corporate incorporated or established, or registered with or approved by any
authority, in Malaysia;
(d) an unincorporated body registered with or approved by any authority in Malaysia; or
(e) the Government or any State Government.
Prior permission of the Bank is required for a resident to pay a non-resident or agent of
non-resident relating to derivative products or futures contracts denominated in foreign currency
offered by the non-resident not transacted on a derivatives market outside Malaysia.
China
Restrictions on Conversion of RMB into Foreign Currency
The principal regulation governing foreign currency exchange in China is the Foreign Exchange
Administration Rules which was issued by the State Council in January 1996, became effective in
April 1996 and was amended in January 1997 and August 2008. Under these rules, RMB is freely
convertible for payments of current account items, including trade and service related foreign
exchange transactions and dividend payments, but not for capital account expenses, including
direct investment, loan or investment in securities outside China. RMB may only be converted for
capital account expenses once the prior approval of the SAFE has been obtained. Under the
Foreign Exchange Administration Rules, foreign-invested enterprises (“FIEs”) in China may
purchase foreign exchange without the approval of the SAFE for trade and service-related foreign
exchange transactions by providing commercial documents evidencing such transactions to
commercial banks which are allowed to engage in foreign exchange business.
According to the Regulations on the Administration of Settlement, Sale and Payment of Foreign
Exchange as issued on 20 June 1996, the Rules for Implementation of Guideline of Regulations
on Service Trade as issued on 18 July 2013, and the Announcement on Tax Filing of Payment
Outside of the PRC Relating to Service Trade and Other Items issued on 9 July 2013, a FIE may
convert RMB-denominated profits into foreign exchange and remit the same offshore by
presenting certain documents to commercial banks which are allowed to engage in foreign
exchange business, without the prior approval of, or registration with, the SAFE. Such documents
include the (i) Audited Financial Report on relevant year issued by certified accounting firms, (ii)
resolution(s) of the board of directors on profit distribution, (iii) the latest capital verification report,
and (iv) the Tax Filing Form for Payment Outside of the PRC for Service Trade and Other Items
required for a single payment equivalent to or over US$50,000.
Save as disclosed above, there is no restriction on the ability of our subsidiaries or our associated
company to transfer funds to our Company in the form of cash dividends, loans or advances.
EXCHANGE CONTROLS
36
The following summary is qualified in its entirety by, and is subject to, the more detailed
information and financial statements (including the notes thereto) appearing elsewhere in this
Prospectus. Terms defined elsewhere in this Prospectus have the same meanings when used
herein. Prospective investors should carefully consider all the information presented in this
Prospectus, particularly the matters set out in the section entitled “Risk Factors” before making an
investment decision.
INTRODUCTION
We were incorporated in Singapore on 11 September 2000 as “Fundsupermart Holdings Pte. Ltd.”
and changed our name to “iFAST Corporation Pte. Ltd.” on 26 March 2003. Since our
incorporation in 2000, we have expanded our business to three (3) other jurisdictions in Asia,
namely, Hong Kong in 2007, Malaysia in 2008 and China in 2014. Our net revenue has grown from
S$25.2 million in FY2011 to S$31.6 million in FY2013, while our average AUA has grown from
S$3.88 billion in FY2011 to S$5.13 billion as at end September 2014.
Our core business is embodied by the name of our Company, “iFAST”, which stands for
“Investments and Funds Administration, Services and Transactions”. Specifically, we are an
internet-based Investment Products distribution and administration platform and provide a
comprehensive range of services, including the execution of investment transactions, investment
administration, research and investment trainings, software tools, IT services and backroom
functions to more than 150 FAs and financial institutions and more than 5,000 FA representatives
in the jurisdictions in which we operate.
Since our incorporation, we have steadily built and established a reputation for providing easy
access to investment products, namely, funds (including unit trusts) and SGS Bonds in Singapore,
funds (including unit trusts) in Malaysia, and funds (including unit trusts) and corporate bonds in
Hong Kong as well as providing a Platform which enables investors to transact and invest at
competitive rates. iFAST Financial, our wholly-owned subsidiary, is also an investment
administrator under the CPF Investment Scheme in Singapore.
Via our Platform, we provide a whole range of services to FAs, financial institutions and their
respective clients and also enable DIY Investors to make informed investment decisions and
execute online investment transactions by equipping them with a wide range of user-friendly
investment and planning tools. We primarily conduct our business in two (2) business divisions,
namely, the B2B Business and the B2C Business divisions.
B2B Business
We conduct our B2B Business via our iFAST Financial Website, iFAST Pensions Website, and iGP
Website which services financial institutions and FAs, companies seeking to administer pension
schemes for their employees, and HNW clients respectively. We provide our B2B Customers with
an efficient and reliable Platform to handle their back-end transactional and operational needs. As
part of our B2B Business, we also provide regular research updates on Investment Products, as
well as Internet-based tools and mobile-friendly applications for financial institutions and FAs to
utilise in their portfolio and investment planning.
OVERVIEW OF OUR GROUP
37
B2C Business
We conduct our B2C Business via our Fundsupermart.com Website which services DIY Investors
seeking alternative investment channels that provide them with more control in the decision-
making and execution process of investing. We established our B2C Business in Singapore in
2000 and we launched our B2C Business in Hong Kong in 2007 and subsequently, Malaysia in
2008. We provide our B2C Customers with a reliable website which offers Investment Products,
Investment Products research, portfolio research, tools for analyses of Investment Products, a
strong emphasis on customer service, and a competitive and transparent fee structure.
OUR COMPETITIVE STRENGTHS
We are a leading and established funds and investments distribution platform in Singapore,
Malaysia and Hong Kong
From our discussions and checks with our Suppliers and B2B Customers who are FAs, we
understand that based on our market share of AUA and investment transactions, we are a leading
and established funds and investments distribution platform, providing a range of services
including distribution of Investment Products, investment administration, execution of
transactions, research and investment trainings, software tools, IT services and backroom
functions to more than 150 FAs and financial institutions in Singapore, Malaysia and Hong Kong.
In addition, according to independent asset management research firm, Cerulli Associates Asia
Pte Ltd (“Cerulli Associates”), our Group is a leading distribution platform among independent
financial advisory firms and the online channel (DIY Investors) in Singapore. For further details,
please refer to the section entitled “Industry Overview – Investment platforms in Asia ex-Japan:
History and growth potential” in this Prospectus. The expansion in our business in terms of AUA
and the size of our customer base has given us a certain scale which benefits our Customers.
Our business relationships with a large number of Suppliers mean that we can offer a wide range
of Investment Products to our B2B and B2C Customers. With our Suppliers, many of whom are
international fund houses, and over 1,800 Investment Products (including more than 1,600 funds)
distributed in our existing markets, our Customers can rely on us as a one-stop investment
platform which provides a wide range of Investment Products for their financial planning.
In addition, we believe the scale of our operations allows us to work out a more efficient fee
sharing structure with our Suppliers. This translates to cost-savings to our Customers.
Furthermore, it will be more convenient and efficient for B2B Customers to use our Platform
instead of entering into individual distribution agreements with each product provider. Individually,
B2B Customers may find it more difficult to obtain the same fee structure from product providers
which we have obtained.
Our B2B and B2C Businesses have received recognition for the quality of the services we provide.
We have received a number of awards over the years. In November 2008, we came in second at
the Enterprise 50 Awards 2008, an event that was jointly organized by KPMG and The Business
Times, improving from ninth position in 2007. In August 2009, at The Best Practice Financial
Services Award 2009, which was organised by Benchmark Magazine and Best Practice
Management Magazine, iFAST HK won the “Fund Platform” award. In December 2010, iFAST
Financial (HK) received the “Best-in-Class” award in the “Advisers Choice of the Year” category.
In December 2011, at the Benchmark Wealth Management Awards 2011, iFAST HK received the
OVERVIEW OF OUR GROUP
38
“Best-in-Class” award in the “Platform Provider of the Year – Professional” category. In November
2013, at the Benchmark Wealth Management Awards 2013, iFAST HK was named “Outstanding
Achiever” in the “Investment Platform – Independent” category.
We are able to stay nimble and react to changes in the markets
We believe our organisational structure is relatively flat and this makes us more efficient in our
decision making. Being able to stay nimble means we are able to roll out at a fast rate, new
initiatives that we believe can serve our Customers better. If our B2B Customers request for
customised solutions, we believe we are able to respond with these solutions promptly. For
example, we were able to create a customised mobile application for tablets within four (4) months
of a request from one of our customers. Besides our in-house IT resources, we have a team of
business development members who are proactively working with our B2B Customers to find
solutions to their business issues. If regulations require changes in our business, we believe we
are able to effect the necessary changes quickly. We are also able to roll-out new and innovative
services to B2C Customers fairly fast. An example is the launch of our mobile application which
provides our users with various tools and allows our users to keep in touch with markets and
Investment Products within a relatively short design time of four (4) months.
We have a scalable business model
We are able to reach out to more customers and grow our AUA by leveraging on our
Internet-based model and representatives from various FAs and financial institutions in the
jurisdictions in which we operate, without employing a large in-house sales team. We have
focused on building our core in-house capabilities, including IT, operations and settlement, client
services, and research functions. Our proprietary IT and operational system is built to be scalable,
and our Platform, which is Internet-based, can be customised and upgraded by our in-house IT
staff to scale with our growing AUA, so that we can handle higher transaction volumes arising from
a larger customer base as well as a higher AUA, without significant increases in our operating
costs. As such, our net revenue tends to grow at a higher rate than our operating costs. With our
strong IT capabilities and proprietary technology, our Group is able to control our operating costs
and keep it relatively low. In FY2011, FY2012, FY2013 and 9M2014 (annualised), our net
revenue/average AUA ratio was 0.651%, 0.672%, 0.708% and 0.745% respectively, whereas the
operating expenses/average AUA ratio was lower at 0.588%, 0.573%, 0.529% and 0.536%
respectively.
Further, the development of our proprietary Platform has minimised our reliance on third-party
developers, reduced our operating costs and given us the flexibility to innovate and scale our
business.
Our Platform is established in Singapore, Malaysia and Hong Kong and we believe that it can be
easily customised for other markets.
We have a cost advantage
We have focused on building our core capabilities in-house and we have derived cost savings as
our in-house capabilities reduce our need to outsource various functions to external parties. The
core capabilities we focus on building in-house include our IT, operations and settlement, client
services, and research functions. It will not be cost effective for a competitor to set up a similar
platform because of the high costs and specific industry knowledge and experience required for
OVERVIEW OF OUR GROUP
39
the IT infrastructure and system. We are also able to expand to other markets on a cost-
competitive basis as we own our Platform, and without the need for additional licensing and the
payment of service fees to third parties.
We possess strong IT capabilities and proprietary technology
We believe our IT capabilities are important in our ability to deliver reliable, quick and innovative
services to our Customers. We have been aided by the technological improvements which have
helped to lower our costs and improve the speed at which we deliver services to our Customers.
We believe our focus on continuously improving our websites and mobile applications, the ease
of navigation and a user-friendly interface will help us remain competitive in both our B2B and B2C
Business divisions.
Additionally, having our own in-house IT capabilities means we are able to control our operating
costs and keep it relatively low. Our in-house IT capabilities also allow us to develop and roll-out
new IT initiatives quickly.
Besides providing various tools on our websites to B2B and B2C Customers, such as “Funds
Selector” and “Chart Centre” for the comparison of funds, we have also created mobile
applications for our Customers. For instance, our B2C Customers can download our mobile
application, “FSM Mobile”, free and make use of the tools to research and analyse funds, as well
as keep themselves updated on more recent funds-related and markets-related news and view
their holdings. Our B2B Customers can also read articles and analyse funds on iPad mobile
applications.
Our efforts to stay innovative in the provision of our IT services have been recognised in recent
years. In August 2009, Fundsupermart.com (HK) won the “Online Usability” award at The Best
Practice Financial Services Award 2009, which was organised by Benchmark Magazine and Best
Practice Management Magazine. In December 2010, Fundsupermart.com (HK) was named
“Outstanding Achiever” award in the “Online Capabilities Award” at the Benchmark Wealth
Management Awards 2010. In December 2011, Fundsupermart.com (HK) received the
“Best-in-Class” award in the “Best in Online Usability” category at the Benchmark Wealth
Management Awards 2011. In November 2013, Fundsupermart.com (HK) received the
“Best-in-Class” award in the “Online Usability – Independent” category at the Benchmark Wealth
Management Awards 2013. In 2014, our Company was awarded a Silver award in the “Most
Informative Use of Mobile” category at the Mob-Ex Awards.
We offer a range of services that assists our Customers in their business
We have focused on offering a range of services with the intention of enabling our B2B Customers
who are FAs to focus on their core business. One such service that we provide is the efficient
calculation and settlement of upfront commissions and recurring wrap fees and trailer fees for B2B
Customers who are FAs. Our execution and settlement system typically processes the fees on a
quarterly basis and the fees would subsequently be paid to the B2B Customers who are FAs. A
B2B Customer who is an FA can focus on its business by leaving the execution and settlement of
transactions, and collection and processing of fees, to us.
We have also dedicated efforts to help our B2B Customers stay in touch with global trends in the
wealth management industry and the changes to financial regulations. Our “iFAST Global Wealth
Advisers Symposium” brings together wealth advisers from the markets in which we operate, as
well as the industry practitioners from the wealth management industry (for example, from markets
such as the UK and Australia, where investment platforms play an important role in the wealth
OVERVIEW OF OUR GROUP
40
management industry), to share their experiences and views on best business practices as well
as the investment and regulatory trends in the various markets. The last three (3) symposiums
were held in Switzerland, US and Greece.
Our B2C Customers can read articles written by our in-house research team on investment
products and financial planning. Our B2B Customers can also stay updated with research views
via regular seminars that our research team conducts. Our research members provide views in the
media, including ChannelNewsAsia and Lianhe Zaobao in Singapore; iMoney, am730, ET Net
Chinese, ATV, Cable TV, Metro Webtv and Metro Finance Column in Hong Kong; and Busy
Weekly, Yahoo!, and Borneo Post in Malaysia.
Our experienced and committed key management team
Our operations are led by our Chairman and CEO, Mr. Lim Chung Chun and our Group COO, Mr.
Wong Soon Shyan, who each has more than 20 years of working experience in the investment
industry. The experience and in-depth knowledge of our key management team have enabled our
Group to understand the industry, anticipate market trends, and address the needs of customers.
Mr. Lim Chung Chun is the co-founder of our Group as well as a Controlling Shareholder of our
Company. Mr. Wong Soon Shyan has been with our Group since 2000. Both Mr. Lim Chung Chun
and Mr. Wong Soon Shyan have steered our Group through various economic crises. They have
been actively driving the business and our Group’s expansion in various jurisdictions. The
experience and business reputations of Mr. Lim Chung Chun and Mr. Wong Soon Shyan have
assisted us to establish close working relationships with our partners in the industry, including
fund houses and financial institutions, which have been instrumental in the success and growth
of our operations.
OUR CONTACT DETAILS
Our registered address and principal place of business is 10 Collyer Quay, #26-01 Ocean
Financial Centre, Singapore 049315. Our telephone and fax numbers are +65 6535 8033 and
+65 6223 4839 respectively. Our company registration number is 200007899C. Our website
address ishttp://www.ifastcorp.com. Our B2B Business’ and our B2C Business’ websites can also
be accessed via www.fundsupermart.com, www.ifastfinancial.com, www.ifastpensions.com and
www.ifastgp.com. Information contained in our websites does not constitute part of this
Prospectus and should not be relied on.
OVERVIEW OF OUR GROUP
41
Prospective investors should carefully consider and evaluate each of the following risk factors
(which are not intended to be exhaustive) and all other information set forth in this Prospectus
before deciding to invest in our Shares. Some of the following risk factors relate principally to the
industry in which our Group operates and the business of our Group in general. Other risk factors
relate principally to general social, economic, political and regulatory conditions, the securities
market and ownership of our Shares, including possible future sales of our Shares.The following
does not state risks unknown to us now but which could occur in the future, and risks which we
currently believe to be immaterial, which could turn out to be material. Should any of these risks
and uncertainties develops into actual events, our business, financial condition, results of
operations and prospects could be materially and adversely affected. In such cases, the price of
our Shares could decline due to any of these risks and uncertainties and you may lose all or part
of your investment in our Shares.
This Prospectus also contains forward-looking statements having direct and/or indirect
implications on our future performance. Investors should also consider the information provided
below in connection with the forward-looking statements in this Prospectus and the warning
regarding forward-looking statements at the beginning of this Prospectus. Our actual results may
differ materially from those anticipated by these forward-looking statements due to certain factors,
including the risks and uncertainties faced by us, as described below and in the sections entitled
“Management’s Discussion and Analysis of Results of Operations and Financial Position” and
elsewhere in this Prospectus.
RISKS RELATING TO OUR INDUSTRY, BUSINESS AND OPERATIONS
We operate in a highly regulated industry and our business may be affected by changes in
government regulations relating to the securities and financial services industry in
Singapore and in the other jurisdictions in which we operate
The securities and financial services industry is highly regulated and our business is subject to
regulation under various applicable laws, regulations, rules, guidelines and codes in Singapore
and in the other jurisdictions in which we operate or any extraterritoriality legislation that we might
be subject to as our business is conducted via the Internet (the “Applicable Legislation”). For
example, the laws and regulations we are subject to in Singapore include the SFA (in respect of
capital markets activities), the FAA (in respect of financial advisory services), the subsidiary
regulations promulgated under the SFA and the FAA and directions and guidelines issued by the
MAS. In Hong Kong and Malaysia, we are regulated by the SFC and SC respectively. For further
details of the Applicable Legislation, please refer to the section entitled “Government Regulations
and Licensing” in this Prospectus.
We may be subject to investigations, enforcement actions or potential liabilities under the
Applicable Legislation and if we are found to be in contravention of any of the Applicable
Legislation, the penalties or adverse actions taken against us could have a material adverse effect
on our business, financial condition, results of operations and prospects. For further details,
please see the risk factors entitled “We have been subject to and expect to continue to be subject
to regulatory inspections and audits” and “We are subject to ongoing regulatory investigation by
SFC”.
RISK FACTORS
42
Our business is subject to evolving laws and regulations relating to the securities and
financial services industry, user privacy, data protection, and other related matters
We are subject to a variety of laws and regulations in Singapore and in other jurisdictions in which
we operate that involve matters related to our business, including but not limited to securities, fee
structure, commissions, user privacy, data protection, intellectual property, competition, consumer
protection, taxation, and online payment services. In addition, the application and interpretation of
these laws and regulations may be uncertain, particularly in relation to new legislation. New or
revised legislation can also be costly to comply with and can delay our operations or increase our
operating costs, decrease our fees and/or commissions, eliminate our ability to charge fees and/or
commissions, require significant management time and attention, and subject us to claims or other
remedies, including fines or demands that we modify or cease existing business practices. Any
claims, increased costs, reduction of or inability to collect fees and/or commissions, obligations for
compliance, changes to our business practices may materially and adversely affect our business,
financial condition, results of operations and prospects.
In addition, there is no assurance that our interpretation of the applicability of any existing or new
laws, rules, regulations or policies will not differ from the interpretation of the regulators or the
authorities in the jurisdictions in which we operate. If we are found non-compliant in respect of any
licensing, registration or other legal or regulatory requirements, we may be subject to negative
consequences, including monetary fines or the revocation of licences, that may materially and
adversely affect our business, financial condition, results of operations and prospects.
We have been subject to and expect to continue to be subject to regulatory inspections and
audits
We periodically receive inquiries from regulators regarding our compliance with laws, regulations
and other matters such as statutory notices and requirements and licences conditions. For
example, both MAS in Singapore and SFC in Hong Kong have conducted inspections and audited
aspects of our business including, but not limited to, our products, services, business activities,
operations, compliance and practices. We expect to continue to be the subject of regulatory audits
and inspections in the future by regulators in Singapore and in the other jurisdictions in which we
operate. It is possible that a regulatory inquiry might result in changes to our policies or practices.
Any finding by a regulator of our non-compliance or violation of regulations, legislation and orders
could subject us to warnings, reprimands, substantial monetary fines, revocation of licences and
other penalties that could materially and adversely affect our business, financial condition, results
of operations and prospects. In addition, it is possible that future orders issued by, or enforcement
actions initiated by regulatory authorities could require us to change our business practices or
cause us to incur substantial costs in a manner that could have a material adverse effect on our
business, financial condition, results of operations and prospects.
While we have taken steps and implemented procedures with regard to the findings and
recommendations of such inspections to ensure compliance with the applicable laws, regulations,
guidelines and/or notices, there is no assurance that these measures will adequately address the
current and/or any future breaches and/or non-compliance with the applicable laws, regulations,
guidelines and/or notices to the satisfaction of the relevant authorities. In the event we are not
able to address the concerns of the relevant authorities and our licences are suspended or
revoked, there could be a material adverse impact on our business, financial condition, results of
operations and prospects. For details of regulatory inspections and investigations by the relevant
authorities, please refer to the section entitled “Government Regulations and Licensing –
Regulatory Inspections and Investigations” in this Prospectus.
RISK FACTORS
43
We are subject to ongoing regulatory investigation by SFC
Our subsidiary, iFAST HK is a holder of a licence for Type 1 regulated activities (Dealing in
Securities) and Type 4 regulated activities (Advising on Securities) and is subject to periodic SFC
inspections. iFAST HK and two (2) of its responsible officers (both of whom are neither Directors
nor Executive Officers) are subject to an ongoing regulatory investigation by SFC under Section
182(1) of the SFO as of the Latest Practicable Date. Any findings of our non-compliance,
deficiencies or violation of regulations, legislation and orders could subject iFAST HK and its key
employees to warnings, reprimands, substantial monetary fines and other penalties or
proceedings that could materially and adversely affect our business, financial condition, results of
operations and prospects. In addition, it is possible that future orders issued by, or enforcement
actions initiated by the SFC could require us to change our business practices or cause us to incur
substantial costs that may result in a materially adverse effect on our business, financial condition,
results of operations and prospects. Our business, financial condition, results of operations and
prospects may also be materially and adversely affected if the SFC suspends or revokes iFAST
HK’s licence for Type 1 and/or Type 4 regulated activities. Please see the sections entitled
“Government Regulations and Licensing” and “General and Statutory Information –
Miscellaneous” for further details on the SFC investigation.
Our Customers, Suppliers and us operate in the securities and financial services industry
and a changing regulatory landscape in such industry could alter our relationships
The securities and financial services industry has been subject to increasing and changing
regulations in recent years. We derive substantially all of our revenue from the provision of
Investment Products and services to our Customers. Changes in the regulatory conditions of the
securities and financial services industry in Singapore and in other jurisdictions in which we
operate could directly affect our Customers, our Suppliers and us as well as alter the relationship
between us and our Suppliers and Customers in a manner that could materially and adversely
affect our business, financial condition, results of operation and prospects. For example, our
Customers, and Suppliers’ incentive for dealing with us and the supply or demand for our
Investment Products and services could be altered by changes in regulations and we could also
be made to limit or alter our range of Investment Products or services to comply with regulatory
requirements. Such changes could materially and adversely affect our business, financial
condition, results of operation and prospects.
Our business may be affected by any revocation, suspension or non-renewal of the
licences and permits held by our licensed entities in Singapore and the other jurisdictions
in which we operate
We are required to obtain various licences and permits in order to operate and these licences and
permits are subject to the fulfilment of conditions stipulated in them and/or compliance with
relevant laws and regulations under which such licences and permits are issued. In addition, some
of our licences and permits are subject to annual or periodic renewals. If any of our licences or
permits are revoked or suspended, or if we are unable to renew these licences or permits in a
timely manner or at all, all or part of our operations may have to be suspended or ceased. For
details of our licences, please refer to the section entitled “Government Regulations and
Licensing” in this Prospectus.
RISK FACTORS
44
Our subsidiary, iFAST Financial is a holder of a CMS Licence and FA Licence and is subject to
periodic MAS inspections which may give rise to enforcement actions such as supervisory
warnings, reprimands or fines for breaches or non-compliance with the relevant regulations in
Singapore. As a licensed entity, there is also a risk of iFAST Financial’s licence being suspended
or revoked by the MAS for non-compliance. We derive a substantial portion of our revenue and
profits from iFAST Financial and the suspension or revocation of iFAST Financial’s licence could
have a material adverse effect on our business, financial condition, results of operations and
prospects. For information on past enforcement actions, please refer to the section entitled
“Government Regulations and Licensing” in this Prospectus.
Similarly, our licensed entities iFAST Capital Malaysia in Malaysia, and iFAST HK and IPS HK in
Hong Kong are subject to licensing conditions and inspections and supervision by the SC and
FIMM in Malaysia and the SFC and MPFSA in Hong Kong.
Further, any change to current laws and regulations, or the introduction of new laws and
regulations may have a material adverse impact on our business, financial condition, results of
operations and prospects. For details of our licences, please refer to the section entitled
“Government Regulations and Licensing” in this Prospectus.
We face intense competition in our business
We face intense competition in our business, both as a provider of Investment Products and an
Internet-based investment platform for such Investment Products because we believe the
securities and financial services industry is characterised by the continuous roll-out of new
investment products and technological infrastructure.
In relation to the Investment Products offered on our Platform, we face competition from other
players in the securities and financial services industry such as banks, FAs and insurance
companies who provide other investment products which our Customers could invest in as
opposed to investing in the Investment Products offered on our Platform. If our Customers or
potential Customers view our competitors’ investment products as superior to those offered on our
Platform, such Customers or potential Customers could withdraw their investment(s) with us
and/or make new investments with our competitors or choose not to invest in the Investment
Products offered on our Platform respectively. This will have a negative impact on our AUA.
Competition also arises from existing and new investment platform service providers. While we
believe that there are no dominant players with an independent investment platform similar to ours
which serves both the B2B and B2C market segments in Hong Kong and Malaysia, we do face
competition from (i) existing investment platform providers who compete with us in certain aspects
of our business (for example, compete with our B2B Business or our B2C Business); and (ii) new
investment platform service providers. If we are unable to compete effectively and successfully
against the new entrants and existing competitors, our business, financial condition, results of
operations and prospects could be adversely affected. For more details of our competitors, please
refer to the section entitled “Our Business – Competition” in this Prospectus.
We may not be able to compete effectively with some of our competitors which may have greater
financial, technical and marketing resources, stronger public relations expertise and longer
operating track records than our Group. These competitors may also have the ability to offer more
competitive pricing, adapt quicker to new or emerging technologies, respond faster to changes in
customer preferences and devote more resources to the promotion of their investment products
and/or services than us.
RISK FACTORS
45
Additionally, as our Platform is a substantial part of our business, we have to continue to develop
and enhance our Platform in order to remain competitive. Such development or enhancement may
require us to acquire additional equipments and software and engage independent consultants
and developers. Please refer to the section entitled “Use of Proceeds and Offering Expenses” for
additional information on our intended use of proceeds for the enhancement of our product
capabilities, IT and services. There is no assurance that we will be able to continue to design,
develop, implement and maintain a competitive Platform in a cost-effective manner. As a result,
we face the risk of our customers migrating to alternative investment platforms or services with
superior technologies or competitive pricing. Inability on our part to produce or procure a
competitive Platform, any interruption to or decline in the performance of our Platform or any
increase in costs arising from the development or enhancement of our Platform could have a
material adverse effect on our business, financial condition, results of operations and prospects.
Our recurring revenue may be affected by a reduction in our Trailer Fees, Platform Fees,
Wrap Fees and/or Assets Under Administration
Our recurring revenue accounted for 73.3%, 77.6%, 70.1% and 68.2% of our Group’s revenue in
FY2011, FY2012, FY2013 and 9M2014, respectively. Our recurring revenue comprises Trailer
Fees, Platform Fees and Wrap Fees, which are calculated based on a percentage of average AUA
of our Investment Products supplied by our Suppliers. We earn Trailer Fees from our Suppliers
which are negotiated separately with each of our Suppliers. Each of the distribution agreements
we enter into with our Suppliers are for an indefinite term but are subject to termination clauses
which can be triggered by events which include the loss of our licence and insolvency. None of the
termination clauses in such distribution agreements make reference to the shareholdings of our
Shareholders and/or our Directors. These distribution agreements do not provide for a fixed Trailer
Fee, which is to be agreed between us and each of our Suppliers. The distribution agreements
also do not provide for regular or periodic review of Trailer Fees. Factors that affect the
determination of Trailer Fees include our business volume, AUA, our relationship with the relevant
Supplier and the support and services we can provide to the Supplier. For example, a larger
business volume and AUA value tends to lead to higher Trailer Fees.
The attractiveness of the Investment Products our Customers invest in via our Platform depends
on, amongst other factors, their investment performance, which is not within our control. For
example, investors may withdraw or reduce their investments when markets are volatile or
economic conditions are unfavourable or when their investments objectives are reached.
Significant or prolonged underperformance of our Investment Products may negatively impact the
value of our AUA. For more details on our fee structure, please refer to the section entitled
“Management’s Discussion and Analysis of Results of Operations and Financial Position – Our
key performance drivers” of this Prospectus.
There is no assurance that we will be able to grow or maintain our AUA or that we will continue
to receive Trailer Fees from our Suppliers at the agreed rate or at all, or that we will continue to
receive Wrap Fees from our adviser-assisted investors, or that we will continue to receive Platform
Fees from our adviser-assisted investors and DIY investors. The reduction or cessation of Trailer
Fees we receive from our Suppliers, the reduction or cessation of Wrap Fees from our
adviser-assisted investors, the reduction or cessation of Platform Fees from our adviser-assisted
investors and DIY investors, and/or the reduction of our AUA would either alone or in the
aggregate negatively impact our recurring revenue and could have a material adverse effect on
our business, financial condition, results of operations and prospects.
RISK FACTORS
46
In addition, our Group’s revenues are dependent on the performance and value of our AUA which
may be materially and adversely affected by economic instability or a prolonged economic
downturn in the jurisdictions in which we operate, regionally, or globally. Fluctuations in financial
markets for example, equity markets, may adversely affect the performance and value of our AUA
and investor confidence. A sudden or sustained deterioration of the financial markets or
investment market conditions may prompt investors to sell investments held through our Platform.
Additionally, negative sentiment surrounding the financial markets may cause potential investors
to be less willing to make new investments and there is no assurance that we will be able to attract
new AUA. Inability on our part to maintain and/or increase the value of our AUA could have a
material adverse effect on our business, financial condition, results of operations and prospects.
Our non-recurring revenue is exposed to risks arising from volatility
Our non-recurring revenue comprises (a) commission income derived mainly from investment
subscription via upfront commissions or processing fees; (b) service fees arising mainly from the
provision of currency conversion administration services to adviser-assisted investors and the
provision of administration services to FAs; (c) advertising fees earned mainly from
advertisements placed by third parties on iFAST Financial Websites and in iFAST’s in-house
magazines; and (d) other miscellaneous income such as magazine sales and software licence
revenue. We face risks arising from the volatile nature of our non-recurring income. For example,
our commission income as a percentage of our revenue has ranged from 19.3% to 28.4% for the
Period Under Review.
We are dependent on a few FAs and fund houses for a significant portion of our net revenue
or net recurring revenue
We are dependent on a few FAs and fund houses for a significant portion of our net revenue. For
FY2011, FY2012, FY2013 and 9M2014, 34.2%, 33.1%, 29.4% and 27.2%, respectively, of our net
revenue came from three (3) FAs who accounted for 5.0% or more of our net revenue. For FY2011,
FY2012, FY2013 and 9M2014, 58.1%, 55.5%, 52.0% and 46.8%, respectively, of our net recurring
revenue came from six (6) fund houses who accounted for 5.0% or more of our net recurring
revenue for at least one (1) of these financial periods. If such FAs and fund houses, whether alone
or in aggregate are unable to honour their contracts with us, terminate such contracts or decide
not to contract with us in the future, we may be unable to obtain contracts on comparable terms
and we could suffer a loss of revenue that could materially and adversely affect our business,
financial condition, results of operations and prospects. Please refer to the sections entitled “Our
Business – Major Customers” and “Our Business – Major Suppliers” in this Prospectus for more
information.
We may not have sufficient insurance coverage or the cost of insurance may increase
significantly
Our business entails the risk of liability related to litigation from our Customers and third parties.
There is no assurance that any claims made or decided against us will be covered by insurance,
or if covered, will not exceed the limits of our coverage. As at the Latest Practicable Date, on a
Group basis, we currently have FAs professional liability, financial institutions professional
indemnity, directors and officers liability, and cyber risk insurance policies. There is no certainty
whether any or all of our insurers will remain solvent and meet their contracted obligations to
provide the coverage we are contracted for or that such coverage will continue to be made
available to us at a reasonable premium for future renewals. Increased costs of maintaining our
RISK FACTORS
47
existing insurance coverage or obtaining additional coverage not covered by our existing
insurance could have a material adverse effect on our business, financial condition, results of
operations and prospects.
We may also be subject to liabilities or losses resulting from business interruptions or other
disruptions to our Platform, services or technological infrastructure, against which we have not
insured adequately, or at all, or cannot insure. The occurrence of an adverse event and the
damages from which are not covered or fully covered or honoured by our insurers, could have a
material adverse effect on our business, financial condition, results of operations and prospects.
Our business is dependent on the reputation of our brand
Our iFAST brand is key to establishing and maintaining good relationships with our Suppliers,
Customers and market participants in general. Any negative news, information, opinion or
publicity about us, especially in relation to integrity, including any incident of employee
misconduct, inability to manage price sensitive information, confidential information and conflicts
of interest, among others, will affect the level of confidence that we have built in our Suppliers,
Customers and market participants and their willingness to continue or consider working with us
in the future. Any negative publicity and/or perceptions about us resulting in the loss of confidence
of our Suppliers, Customers and market participants in us could have a material adverse effect on
our business, financial condition, results of operations and prospects.
We rely heavily on information technology in the administration of our business
We utilise a proprietary Platform to distribute our products, to manage customers and to provide
trade functionalities. Security breaches, errors, malfunctions or breakdowns of our information
technology systems either as a one-off event or repeatedly could result in adverse publicity and
reputational damage to our business or could also cause us to materially breach our contracts with
our suppliers and customers. Security breaches could also expose us to claims from our suppliers
or customers or subject us to disciplinary action by governmental and regulatory authorities. For
instance, we possess sensitive personal and confidential data of our suppliers and customers
which could be compromised and made public by a security breach. Inability to maintain
confidentiality of data in our possession due to security breaches, errors, malfunctions or
breakdowns of our information technology systems could cause customer confidence in us to
decline and subject us to liability under data protection laws or breach of confidentiality provisions,
which, either alone or in aggregate could have a material adverse effect on our business, financial
condition, results of operations and prospects.
Our Platform is Internet-based and we also provide our services via the Internet which is not
controlled by any single entity or regulated by a single jurisdiction. Our Platform and provision of
services over the Internet exposes us to cyber risks which include but are not limited to, security
and hacking threats, and distributed denial of service attacks, which could result in the failure of
the associated physical infrastructure. The manifestation of such risks either alone or in
aggregate, have a material adverse effect on our business, financial condition, results of
operations and prospects.
Our business may be affected by the inability to protect or enforce our intellectual property
rights
Our intellectual property portfolio comprises our proprietary Platform, our trademarks, brand
names and registered domain names. The success of our business is highly dependent on our
ability to protect our intellectual property and other proprietary rights. We rely on trademarks,
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trade secrets, copyrights and unfair competition laws as well as licence agreements and other
contractual provisions to protect our intellectual property and other proprietary rights. There is no
assurance that any steps we take to protect our intellectual property rights and other proprietary
rights including registering and/or applying for registration of our trademarks are adequate to
protect the intellectual property we currently own or may develop in the future. It may be possible
for third parties to unlawfully pass-off our trademarks, Platform or services as theirs or we may
unknowingly infringe on the intellectual property rights of third parties. Intellectual property
litigation for enforcing of our intellectual property rights and defending any infringement claims
made against us could be costly and divert the attention of our management away from the
day-to-day operations of our business. This could have a material adverse effect on our business,
financial condition, results of operations and prospects. We may also face the risk of losing our
rights to the intellectual property in question which could result in the interruption or cessation of
our business.
We have no registered intellectual property rights over the source code of our proprietary Platform
due to commercial sensitivities, and rely instead on the copyright protection that arises from the
creation of such source code and its expression in a tangible form. There is no assurance that
such copyright protection will be adequate to withstand a challenge to our ownership and the
originality of such source code. There is also no assurance that our source code will not be copied,
reverse engineered, or de-compiled by our Customers for whom we provide customisable
Platforms or anyone who is granted or otherwise gains access to our source code. In addition, the
design of our Platform’s user interface and some other “visible” intellectual property may be
copied by any user of our Platforms. Any failure to protect our intellectual property may result in
another party copying or otherwise obtaining and using our Platform without authorisation.
Policing unauthorised use of proprietary information is difficult and expensive and we may not be
able to detect and prevent infringement or loss of our intellectual property. Our inability to keep our
source code confidential could have a material adverse effect on our business, financial condition,
results of operations and prospects.
We have registered and currently own the exclusive right to use domain names relating to our
business. The registration of such domain names requires periodic renewal. There is no
assurance that we will be able to successfully renew the domain names we own or that we will be
able to register domain names that have or may become relevant to our business. In addition, we
may be unable to prevent third parties from acquiring and using domain names that infringe or
otherwise decrease the value of our intellectual property and other proprietary rights. Failure to
renew and/or protect our domain names and an inability to register domain names that have or
may become relevant to our business could adversely affect our business and make our websites
more difficult to locate and/or access. This could have a material adverse effect on our business,
financial condition, results of operations and prospects.
For further details of our Group’s intellectual property, please refer to the section entitled “Our
Business – Intellectual Property” in this Prospectus.
We rely heavily on a limited number of service providers for our business operations in
Singapore
In Singapore, our business depends on certain key service providers, including (i) a data center
to support our information system needs and (ii) a mailing and logistics service provider to support
the dissemination of transaction and fund information. Both service providers are key to our
day-to-day operations and there is no assurance that such service providers will not cease to
provide us with their services. In the event that such service providers cease to provide us with
their services, there can be no assurance that we can find suitable alternatives in a timely manner
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so as to minimise disruption to our business and operations. If we are unable to find suitable
alternatives in a timely manner, or are required to engage suitable alternatives at higher prices,
this could have a material adverse effect on our business, financial condition, results of operations
and prospects.
Our business depends on the contractual relationships we have with our Suppliers
The products we offer and market to our Customers via our Platform are obtained from our
Suppliers with whom we have entered into a series of distribution contracts. There is no assurance
that the parties we contract with will adequately fulfil their respective contractual obligations or
that such contractual relationships will not be terminated. Inability to maintain such contractual
relationships or find suitable replacements, alternatives or new parties to contract with could have
a material adverse effect on our business, financial condition, results of operations and prospects.
For example, we depend on our ability to distribute a large number of Investment Products. As at
the Latest Practicable Date, we have entered into at least 115 distribution agreements with our
Suppliers to distribute a range of Investment Products. If we are unable to renew our distribution
agreements with such Suppliers when they expire or if such Suppliers prematurely terminate their
distribution agreements with us and we are unable to enter into new distribution agreements with
replacement Suppliers in a timely manner, the range of Investment Products we can make
available to our customers will be reduced or limited.
Any failure of our contracting partners to perform their obligations under our contracts or
agreements with them may have a material and adverse effect on our business, financial
condition, results of operations and prospects. If our contracting partners fail to perform their
obligations under their respective agreements with us, we may have to rely on legal remedies,
including seeking specific performance or injunctive relief, which may not be effective.
We may be affected by claims in respect of our investment research and analysis
As part of our business, we provide investment research and analysis to our Customers. We are
exposed to the risk that our Customers who believe that they suffered losses due to or in
connection with our investment research and analysis may bring claims against us. Whilst we
protect ourselves by ensuring that our investment research and analysis are provided subject to
disclaimers of liability and taking up professional indemnity insurance for protection against such
risks, there is no assurance that these measures will adequately protect us from any claims
brought against us by our customers. In addition, any negative publicity arising from such claims,
whether justified or not, will have an adverse effect on our reputation which may in turn have a
material adverse effect on our business, financial condition, results of operations and prospects.
We may be affected by claims in respect of non-execution or delay in execution of our
Customers’ transactions
The core of our business is our Platform, a distribution and administration platform for Investment
Products. Our Customers, depending on whether they are DIY investors or adviser-assisted
investors, use the Fundsupermart.com Website or iFAST Financial Website (as the case may be)
to carry out transactions of financial investment products. This means that if the
Fundsupermart.com Website or iFAST Financial Website (as the case may be) is unable to
execute, or if there is a delay in executing our Customers’ transactions of financial investment
products, we may be exposed to claims from our Customers. Even though we protect ourselves
from such claims through disclaimers of liability, there can be no assurance that such disclaimers
will adequately protect us from such claims. If we are subject to successful claims, our business,
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financial condition, results of operations and prospects may be adversely affected. In addition, any
negative publicity (whether justified or not) or any adverse findings arising from such claims will
have an adverse effect on our reputation and may have a material adverse effect on our business,
financial condition, results of operations and prospects.
We are dependent on the continued services of our key management and operational
personnel
Our Group’s operations have been dependent on the experience, knowledge and skills of our key
management and operational personnel. This includes our Chairman and CEO, Mr. Lim Chung
Chun and our Group COO, Mr. Wong Soon Shyan who each has more than 20 years of working
experience in the investment industry. They individually and collectively constitute an essential
part of our key management team and assist us to establish close working relationships with our
partners in the industry, including fund houses and financial institutions, which have been
instrumental in the success and growth of our operations. The continued success and growth of
our Group is therefore dependent on our ability to retain their services. The loss of the services
of certain key personnel without timely and suitable replacement or the inability to attract and
retain experienced personnel could have a material adverse effect on our business, financial
condition, results of operations and prospects. Details of our CEO and Executive Officers and their
working experience are disclosed under the section entitled “Directors, Management and Staff” in
this Prospectus.
We may seek opportunities for growth through acquisitions, joint ventures, investments
and partnerships, which may not be successful
Our Group has grown substantially in recent years. Such growth is principally derived from the
growth in our AUA coupled with the expansion of our operations to jurisdictions outside of
Singapore. There is no assurance that our Group can sustain such growth, or otherwise to
maintain our financial performance or to meet anticipated financial performance expectations.
We may seek opportunities for growth through acquisitions, joint ventures, investments and
partnerships. There is no assurance that such transactions and initiatives or any of these efforts
will be successful. The acquisitions and investments that our Group may make, or joint ventures
and partnerships that our Group may enter into, may expose our Group to additional business or
operating risks or uncertainties, including but not limited to the following:
• inability to effectively integrate and manage the acquired businesses;
• inability of our Group to exert control over the actions of its joint venture partners, including
any non-performance, default or bankruptcy of the joint venture partners;
• time and resources expended to coordinate internal systems, controls, procedures and
policies;
• disruption to ongoing business and diversion of management’s time and attention from our
day-to-day operations and other business concerns;
• risk of entering markets that our Group may have no or limited prior experience or dealing
with new counterparties;
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• potential loss of key employees and customers of the existing business and acquired
businesses;
• risk that an investment or acquisition may reduce our Group’s future earnings; and
• exposure to unknown liabilities.
Our wholly-owned subsidiary in China was incorporated on 7 July 2014. The commencement of
our business in China may expose us to the risks related to a new business venture as well as to
the risks of operating in a new jurisdiction that has economic, legal and regulatory conditions that
are different from the existing jurisdictions that we operate in. Accordingly, there is no assurance
of our success or the sustainability of our business in China. Inability to adapt or assimilate our
operations to the Chinese market could have a material adverse effect on our business, financial
condition, results of operations and prospects.
If our Group is unable to successfully implement our growth strategy or is unable to address the
risks associated with our Group’s acquisitions, joint ventures, investments and partnerships, or if
our Group encounters unforeseen expenses, difficulties, complications or delays frequently
encountered in connection with the integration of acquired businesses and the expansion of
operations, or fails to achieve acquisition synergies, our business, financial condition, results of
operations and prospects may be materially and adversely affected.
We are exposed to foreign exchange risks
As a result of the geographic diversity of our business, we are affected by changes in foreign
currency rates. Foreign currency fluctuations affect us because of mismatches between our
reporting currency and the currencies in which our revenues are received and operational costs
are incurred. Any fluctuations in foreign exchange rates between our reporting currency and the
currencies in which we receive our revenues and incur operational costs could have a material
adverse effect on our business, financial condition, results of operations and prospects. Please
refer to the section entitled “Management Discussion & Analysis – Foreign Exchange Exposure”
in this Prospectus for additional information on our hedging policy.
Our business is subject to economic, political and social conditions, as well as
governmental policies in Singapore and each of the other jurisdictions in which we operate
Our operations in Singapore, Malaysia, Hong Kong and China are subject to local economic, legal
and regulatory conditions in these jurisdictions including the amount and degree of government
regulation, growth rate and degree of development, uniformity in the implementation and
enforcement of laws, content of and control over capital investment, control of foreign exchange
and allocation of resources. Any unfavourable factor or change in the economic, political and
social conditions and/or the policies in the jurisdictions in which we operate could have a material
adverse effect on our business, financial condition, results of operations and prospects.
Tax authorities in Singapore and in other jurisdictions in which we operate could challenge
our allocation of taxable income which could increase our consolidated tax liabilities
There can be no assurance that tax authorities reviewing our tax returns would agree with our
allocation of taxable income. If any tax authority in Singapore or in other jurisdictions in which we
operate finds that our allocation of taxable income is not in compliance with the relevant tax
legislation of such jurisdiction, such tax authority could require us to reallocate the income or
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adjust the taxable income to accurately reflect the reallocated income. Any such reallocation or
adjustment could result in a higher overall tax liability for us and may materially and adversely
affect our business, financial condition, results of operations and prospects.
We may be affected by epidemic diseases in the jurisdictions in which we operate and
elsewhere
Several countries in Asia, have suffered from outbreaks of communicable diseases such as SARS
and avian flu. Although the long-term effect of such diseases cannot be predicted, previous
occurrences of SARS and avian flu had an adverse effect on the economies of those countries in
which they were most prevalent, including Singapore and Hong Kong, both of which are
jurisdictions in which we operate. A new and prolonged outbreak of communicable diseases could
have a material adverse effect on our business, financial condition, results of operations and
prospects.
RISKS RELATING TO OWNERSHIP OF OUR SHARES
We are subject to shareholding restrictions under regulations or due to requirements of
regulatory authorities
In Singapore, the SFA and the FAA prohibits a person from entering into an arrangement to
acquire or hold, directly or indirectly, 20% or more of the issued share capital or voting rights of
the holder of a CMS license and a licensed FA respectively. Any shareholder holding 20% or more
of the issued share capital or controlling 20% or more of the voting power of our Company would
indirectly obtain effective control over iFAST Financial, our licensed entity. Our Chairman and
CEO, Mr. Lim Chung Chun holds 20% or more of the shares of our Company. While he is not
subject to the aforementioned SFA and FAA shareholding restrictions as he is already a
shareholder, there is no assurance that MAS will not impose shareholding restrictions on Mr. Lim
Chung Chun which may have a material and adverse effect on the market price of our shares.
In Hong Kong, to become or to continue to be a substantial shareholder of a licensed corporation,
prior approval under Section 132(1)(a) of the SFO is required (the “Hong Kong Shareholding
Restrictions”). Under Section 6 of Schedule 1 of the SFO, a person is regarded as a substantial
shareholder of a licensed corporation if:
(a) he holds an interest in shares in the licensed corporation:
(i) the aggregate number of which shares is equal to more than 10% of the total number
of issued shares of the licensed corporation; or
(ii) which entitles him, either alone or with any of his associates and either directly or
indirectly, to exercise or control the exercise of more than 10% of the voting power at
general meetings of the licensed corporation; or
(b) he holds shares in any other corporation which entitles him, either alone or with any of his
associates and either directly or indirectly, to exercise or control the exercise of 35% or more
of the voting power at general meetings of that other corporation, or of a further corporation,
where that other corporation is itself entitled, either alone or with its associates and either
directly or indirectly, to exercise or control the exercise of more than 10% of the voting power
at general meetings of the licensed corporation.
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The Hong Kong Shareholding Restrictions are applicable to (i) our Company (which is entitled to
exercise or control the exercise of more than 10% of the voting power at general meetings of the
licensed corporations, iFAST HK and iFAST Platform); and (ii) if applicable, a shareholder of our
Company or any other corporation (the “Other Corporation”) which is entitled to exercise or
control the exercise of 35% or more of the voting power at general meetings of our Company (or,
if applicable, a further corporation which is entitled to exercise or control the exercise of 35% or
more of the voting power at general meetings of the Other Corporation).
Pursuant to Section 3(1)(c) of the Securities and Futures (Licensing And Registration)
(Information) Rules (Cap 571S), the application should be made by a person for approval to
become or continue to be a substantial shareholder of a licensed corporation.
The substantial shareholder should be a fit and proper person as set out in Section 129 of the
SFO. Approval is made by lodging an Application Form 4 with the prescribed fee and supporting
documents and, if applicable, Supplement 2 (information on corporate substantial shareholder) for
a corporate applicant or Supplement 3 (statement of personal information) for an individual
applicant. Section 135(3) of the SFO provides that, where there is a change in the information
provided to the SFC by a licensed corporation and/or a substantial shareholder of a licensed
corporation, a written notice of change in the information containing full description of the change
must be given to the SFC within seven (7) business days of the change. Such shareholding
restrictions and approval or notification requirements imposed by the regulatory authorities may
have a downward pressure on our Share price.
In Malaysia, iFAST Capital Malaysia requires SC’s prior approval if a change of shareholding in
iFAST Capital Malaysia will result in a change in iFAST Capital Malaysia’s controller even though
there is no specific shareholding restriction imposed by the SC when iFAST Capital Malaysia was
initially set up. The controller is defined under Section 60(7) of the CMSA as a person who (a) is
entitled to exercise, or control the exercise of, not less than 15% of the votes attached to the voting
shares in iFAST Capital Malaysia; (b) has the power to appoint or cause to be appointed a majority
of the directors of iFAST Capital Malaysia; or (c) has the power to make or cause to be made,
decisions in respect of the business or administration of iFAST Capital Malaysia, and to give effect
to such decisions or cause them to be given effect to. SC’s prior approval is also required when
iFAST Capital Malaysia is establishing a new business or acquiring shares/interests in or outside
Malaysia in relation to capital market-based activities.
However, SC only needs to be notified within 14 days of the following occurrence of events:
(a) if the change of shareholding of iFAST Capital Malaysia does not result in a change of iFAST
Capital Malaysia’s controller; or
(b) if iFAST Capital Malaysia is establishing a new business or acquisition of shares/interests in
or outside Malaysia in relation to non-capital market-based activities; or
(c) if iFAST Capital Malaysia is disposing a business or shares/interests in or outside Malaysia.
The above restrictions on change of shareholding in Malaysia would apply to our Company, who
is deemed to be the controller of iFast Capital Malaysia. iFAST Capital Malaysia will need to obtain
the prior approval of SC for any direct or indirect change in its controller. Shareholders of our
Company who intend to become a controller by, inter alia, holding at least 15% of the voting
Shares of the Company, will also need to obtain the prior approval of the SC through iFAST Capital
Malaysia.
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54
The shareholding restrictions under the relevant regulations or due to the requirements of the
relevant regulatory authorities may discourage or prevent certain types of transactions which
includes such transactions or arrangements which involve an actual or threatened change of
control of our Company. Our Shareholders, which may include you, may therefore be
disadvantaged as such shareholding restrictions might adversely affect the liquidity, demand and
price of our Shares. In addition, our Company may be adversely affected in our fund raising efforts
due to such shareholding restrictions.
In the event any Shareholder fails to obtain the requisite approvals and/or fails to comply with any
relevant shareholding restrictions, such Shareholder may be subject to negative consequences,
including monetary fines, imprisonment and/or such other powers that may be available to the
relevant regulatory authorities.
For further details on these shareholding restrictions, please refer to the section entitled
“Government Regulations and Licensing – Shareholding Restrictions” of this Prospectus.
Our Shares may not be a suitable investment for all investors
Each prospective investor in the Shares must determine the suitability of that investment in light
of his/her own circumstances. In particular, each prospective investor should:
• have sufficient knowledge and experience to make a meaningful evaluation of the Shares,
our Company, the merits and risks of investing in the Shares and the information contained
or incorporated by reference in this Prospectus;
• have access to, and knowledge of, appropriate analytical tools to evaluate, in the context of
its particular financial situation, an investment in the Shares and the effect the Shares will
have on its overall investment portfolio;
• have sufficient financial resources and liquidity to bear all of the risks of an investment in the
Shares, including where the currency of the Shares is different from the prospective
investor’s currency;
• understand thoroughly the terms of the Shares; and
• be able to evaluate (either alone or with the help of a FA) possible scenarios for economic
and other factors that may affect its investment and its ability to bear the applicable risks.
Any future sale of our Shares could adversely affect our Share price
Following the Offering, we will have 256,225,334 Shares, of which 130,395,708 Shares, or 50.9%
of our post-Offering share capital, will be collectively held by our existing major Shareholders, Mr.
Lim Chung Chun, his spouse Mdm. Neo Lay Kien, SPH AsiaOne and Accretion Investment Pte Ltd
together with the rest of our Directors.
Under the moratorium arrangements (as described in the section entitled “Shareholders –
Moratorium” of this Prospectus), the transfer of our Shares by, inter alia, Mr. Lim Chung Chun,
Mdm. Neo Lay Kien, SPH AsiaOne and Accretion Investments Pte Ltd together with the rest of our
Directors will be restricted for a period until the date falling six (6) months from the Listing Date.
If upon the expiration of the moratorium period, any of Mr. Lim Chung Chun, Mdm. Neo Lay Kien,
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SPH AsiaOne, Accretion Investments Pte Ltd and our Directors sells or is perceived as intending
to sell a substantial amount of Shares, the market price for our Shares could be adversely
affected.
Following the Offering, approximately 7.4% of our Shares will be owned by the Cornerstone
Investors. The Cornerstone Shares acquired by the Cornerstone Investors are not subject to any
moratorium arrangement. Existing Public Shareholders of our Company hold 64,671,894 Shares
or approximately 25.2% of our post-Offering share capital, of which 16,783,026 Shares are under
a moratorium arrangement. The remaining 47,888,868 shares held by existing public
Shareholders (“Non-moratorised Public Shareholders”) are not subject to any moratorium
arrangement. Therefore, if the Cornerstone Investors or the Non-moratorised Public
Shareholders, directly or indirectly, sell or are perceived as intending to sell a substantial amount
of Shares, the market price of the Shares may be adversely affected.
Any future sale or availability of our Shares can have a downward pressure on our Share price.
The sale of a significant amount of our Shares in the public market after the Offering, or the
perception that such sales may occur, could materially affect the market price of our Shares.
Our Controlling Shareholders will retain significant control over our Company after the
Offering, which may allow them to influence the outcome of decisions requiring the
approval of Shareholders
Upon completion of the Offering, our Controlling Shareholders, Mr. Lim Chung Chun who is our
Chairman and CEO, SPH AsiaOne Ltd. and SPH, will have an aggregate direct and deemed
interest in approximately 38.6% of our post-Offering issued share capital (assuming that the
Over-allotment Option is not exercised). Therefore, these persons may be able to exercise
significant influence over matters requiring Shareholders’ approval, including the election of
directors and the approval of significant corporate transactions.
In particular, Mr. Lim Chung Chun, as a Controlling Shareholder and a member of the key
management of our Group, is responsible for setting the strategic direction of our Group together
with the Board and overseeing the entire overall management of our Group. He may be able to
influence matters requiring approval by our Shareholders, including the election of directors and
the approval of significant corporate transactions in a manner that could conflict with the interests
of our public shareholders.
Investors in our Shares would face immediate and substantial dilution in NAV per Share and
may experience future dilution
Our Offering Price is higher than our Group’s NAV per Share of 24.74 cents as at 30 September
2014 (adjusted for the effects of the issuance of the Cornerstone Shares and the Offering and
based on our post-Offering issued share capital). Thus, there is an immediate and substantial
dilution in the book value per Share for investors who purchase our Shares. If we were liquidated
for NAV immediately following the Offering, each Shareholder subscribing to the Offering would
receive less than the price they paid for their Shares. Please refer to the section entitled “Dilution”
in this Prospectus for further details.
In addition, we intend to issue Options under our iFAST ESOS and share awards under our iFAST
PSP. To the extent that new Shares are issued pursuant to the exercise of our Options, or such
awards are released and new Shares are issued pursuant to such release, there will be further
dilution to investors participating in the Offering. Further details of the iFAST PSP and iFAST
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ESOS are described under the sections entitled “iFAST PSP” and “iFAST ESOS” of this
Prospectus and in Appendix F and G in this Prospectus where the rules of the iFAST PSP and
iFAST ESOS are set out respectively.
Our Shares have not been previously quoted on a securities exchange prior to the Offering
Our Shares have not been previously quoted on a securities exchange prior to the Offering. The
Offering Price may not be indicative of the market price for our Shares after the completion of the
Offering. Therefore, there is no assurance that an active trading market for our Shares will develop
or, if developed, will be sustained.
Further, there is also no assurance that the market price of our Shares will not decline below the
Offering Price after the Offering. The Offering Price of our Shares under the Offering has been
determined following a book-building process by agreement between the Joint Issue Managers,
Bookrunners and Underwriters and us and may not be indicative of prices that will prevail in the
trading market. You may not be able to resell your Shares at a price that is attractive to you.
Although it is intended that our Shares will remain listed on the SGX-ST, there is no guarantee of
the continued listing of the Shares.
Our Share price may fluctuate following the Offering
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:
• changes in conditions affecting our industry, general economic and stock market conditions;
• variations in our operating results;
• changes in securities analysts’ recommendations or estimates of our financial performance;
• changes in market valuations and share prices of companies with similar businesses to our
Company and which are listed on the SGX-ST;
• announcements by our competitors or us of gain or loss of significant contracts, acquisitions,
strategic partnerships, joint ventures or capital commitments;
• departures of key management personnel;
• fluctuations in stock price and trading volume;
• involvements in litigation or arbitration;
• success or failure of our management team in implementing business and growth strategies;
and/or
• negative publicity involving our Company, any of our Directors, Executive Officers or
Substantial Shareholders, whether or not it is justified.
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We may not be able to pay dividends in future
Our ability to declare dividends in relation to the Shares will depend on, among others, our
operating results, financial condition, other cash requirements including capital expenditures, the
terms of borrowing arrangements, other contractual restrictions and other factors deemed
relevant by our Directors. This is in turn dependent on the successful implementation of our
strategy and financial, regulatory and general economic conditions and other factors that may be
specific to us or specific to our industry, many of which are beyond our control.
In addition, we operate substantially all of our business through our subsidiaries. Therefore, our
ability to pay dividends is affected by the ability of our subsidiaries to declare and pay us dividends
or other distributions. The ability of our subsidiaries to declare and pay dividends to us will be
dependent on the cash income and cash available to such subsidiary and the operating results,
financial condition, other cash requirements including capital expenditures, the terms of borrowing
arrangements and other contractual restrictions of the relevant subsidiary and may be restricted
under applicable law or regulation. If any of our subsidiaries are unable or are restricted in their
ability to declare and pay dividends or other distributions to us, our ability to pay dividends on our
Shares may be adversely affected. In addition, if our subsidiaries enter into loan agreements in the
future, and covenants in such loan documents restrict the ability of our subsidiaries to declare
and/or pay dividends to us, such covenants will affect our ability to declare and pay dividends. See
the section entitled “Dividend Policy” in this Prospectus for a discussion of our dividend policy.
Singapore law contains provisions that could discourage a takeover of our Company
Sections 138, 139 and 140 of the Securities and Futures Act and the Singapore Code on
Take-overs and Mergers (collectively, the “Singapore Take-over Laws and Regulations”)
contain certain provisions that may delay, deter or prevent a future takeover or change in control
of our Company for so long as our Shares are listed for quotation on the SGX-ST. Any person
acquiring an interest, either on his own or together with parties acting in concert with him, in 30%
or more of our Shares, or, if such person holds, either on his own or together with parties acting
in concert with him, between 30% and 50% (both inclusive) of our Shares, and he (or parties
acting in concert with him) acquires additional Shares representing more than one (1) per cent. of
our voting Shares in any six-month period, must, except with the consent of the Securities Industry
Council, extend a takeover offer for the remaining Shares in accordance with the provisions of the
Singapore Take-over Laws and Regulations. While the Singapore Take-over Laws and
Regulations seek to ensure equality of treatment among Shareholders, their provisions may
discourage or prevent certain types of transactions involving an actual or threatened change of
control of our Company. Some of our Shareholders, which may include you, may therefore be
disadvantaged as a transaction of that kind might have allowed the sale of shares at a price above
the prevailing market price.
Additional funds raised through issuance of the new Shares for our future growth will dilute
existing Shareholders’ equity interest
We may, in the future, expand our capabilities and business through acquisitions, joint ventures
and strategic partnerships with parties. We may also require additional equity funding after the
Offering. By financing future expansion, acquisitions, joint ventures and strategic partnership via
issuance of new Shares, our Shareholders will face dilution of their shareholdings.
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Overseas Shareholders may not be able to participate in future rights offerings or certain
other equity issues we may make
If we offer or cause to be offered to our Shareholders rights to subscribe for additional Shares or
any right of any other nature, we will have discretion as to the procedure to be followed in making
such rights available to our Shareholders or in disposing of such rights for the benefit of such
Shareholders and making the net proceeds available to such Shareholders. We may choose not
to offer such rights to our Shareholders having an address in a jurisdiction outside Singapore. For
instance, we will not offer such rights to our Shareholders who are US persons (as defined in
Regulation S) or have a registered address in the United States unless:
(a) a registration statement is in effect, if a registration statement under the US Securities Act
is required in order for us to offer such rights to Shareholders and sell the securities
represented by such rights; or
(b) the offering and sale of such rights or the underlying securities to such Shareholders are
exempt from registration under the provisions of the US Securities Act.
We have no obligation to prepare or file any registration statement under the US Securities Act.
Accordingly, Shareholders who are US persons (as defined in Regulation S) or have a registered
address in the United States may be unable to participate in rights offerings and may experience
a dilution in their holdings as a result.
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The following selected consolidated financial information should be read in conjunction with the
full text of this Prospectus, including the section entitled “Management’s Discussion and Analysis
of Results of Operations and Financial Position” of this Prospectus, and the sections entitled
“Audited Consolidated Financial Statements for the Financial years ended 31 December 2011,
2012 and 2013”, “Unaudited Interim Consolidated Financial Statements for the Nine Months
ended 30 September 2014” and “Unaudited Pro Forma Consolidated Financial Information for the
Financial Year ended 31 December 2013 and the Nine Months ended 30 September 2014” as set
out in Appendix A, Appendix B and Appendix C of this Prospectus respectively.
Results of Our Group
Audited Unaudited
FY2011 FY2012 FY2013 9M2013 9M2014
S$’000 S$’000 S$’000 S$’000 S$’000
Continuing operations
Revenue 61,123 56,414 69,470 52,686 58,595
Commission and fee paid or
payable to third party financial
advisers (35,919) (30,123) (37,884) (29,176) (31,267)
25,204 26,291 31,586 23,510 27,328
Other operating income 58 85 164 72 209
Gain on distribution to owners
of the Company – – 618 – –
Depreciation of plant and
equipment (979) (787) (703) (528) (580)
Amortisation of intangible
assets (335) (71) (169) (121) (144)
Staff costs (12,305) (11,918) (13,311) (9,981) (11,250)
Other operating expenses (9,191) (9,632) (9,399) (7,022) (7,679)
Results from operating activities 2,452 3,968 8,786 5,930 7,884
Finance income 59 45 39 31 74
Finance expense (137) (72) (10) (10) –
2,374 3,941 8,815 5,951 7,958
Share of result of associate,
net of tax – – – – –
(1)
Profit before tax 2,374 3,941 8,815 5,951 7,958
Tax expense (252) (685) (573) (550) (381)
Profit from continuing
operations 2,122 3,256 8,242 5,401 7,577
Discontinued operation
Loss from discontinued
operation, net of tax (1,945) (1,631) (3,152) (635) –
Profit for the year/period 177 1,625 5,090 4,766 7,577
Note:
(1) Less than S$1,000
SELECTED CONSOLIDATED FINANCIAL INFORMATION
60
Audited Unaudited
FY2011 FY2012 FY2013 9M2013 9M2014
S$’000 S$’000 S$’000 S$’000 S$’000
Attributable to:
Loss attributable to non-
controlling interests from
discontinued operation (1,177) (970) (439) (439) –
Loss attributable to non-
controlling interests from
continuing operations (649) (485) (232) (194) (38)
Loss attributable to owners of
the Company from discontinued
operation (768) (661) (2,713) (196) –
Profit attributable to owners
of the Company from
continuing operations 2,771 3,741 8,474 5,595 7,615
Profit for the year/period 177 1,625 5,090 4,766 7,577
Earnings per share from
continuing operations
EPS based on weighted
average number of shares
(cents)
(1)
1.38 1.86 4.20 2.77 3.75
Diluted EPS based on weighted
average number of shares
(cents)
(2)
1.36 1.84 4.09 2.72 3.65
EPS based on pre-Offering
share capital (cents)
(3)
1.36 1.83 4.15 2.74 3.73
EPS based on post-Offering
share capital (cents)
(4)
1.08 1.46 3.31 2.18 2.97
Notes:
(1) EPS is computed based on our weighted average number of shares (assuming Sub-division had occurred) of
200,616,486 Shares in FY2011, 201,008,604 Shares in FY2012, 202,051,128 Shares in FY2013, 201,834,300
Shares in 9M2013 and 203,298,840 Shares in 9M2014.
(2) Diluted EPS is computed based on our weighted average number of shares adjusted to take into account the dilutive
effect arising from the dilutive share options issued under the 2003 ESOS and 2013 ESOS with the potential ordinary
shares weighted for the period outstanding. Such weighted average number of shares (assuming Sub-division had
occurred) were 203,044,188 Shares in FY2011, 203,105,268 Shares in FY2012, 207,225,420 Shares in FY2013,
205,438,458 Shares in 9M2013 and 208,444,074 Shares in 9M2014.
(3) For comparative purposes, EPS for the Period Under Review is computed based on profit attributable to owners of
our Company from continuing operations and our Company’s pre-Offering Share Capital of 204,425,334 Shares.
(4) For comparative purposes, EPS for the Period Under Review is computed based on profit attributable to owners of
our Company from continuing operations and our Company’s post-Offering Share Capital of 256,225,334 Shares.
SELECTED CONSOLIDATED FINANCIAL INFORMATION
61
Financial Position of our Group
Audited Unaudited
As at
31 December
2013
As at
30 September
2014
S$’000 S$’000
Assets
Plant and equipment 1,634 1,727
Intangible assets 664 1,339
Associate – 401
Deferred tax assets 35 22
Other investments 2,011 1,802
Club membership 11 11
Total non-current assets 4,355 5,302
Current tax receivable 5 30
Trade and other receivables 16,764 17,940
Prepayments 614 497
Cash at bank and in hand 16,293 15,149
Money market funds 426 36
Total current assets 34,102 33,652
Held under trust
Client bank accounts 100,599 121,552
Client ledger balances (100,599) (121,552)
– –
Total assets 38,457 38,954
Equity
Share capital 10,670 11,379
Reserves 13,296 7,362
Equity attributable to owners of the Company 23,966 18,741
Non-controlling interests 658 –
Total equity 24,624 18,741
Liabilities
Deferred tax liabilities 77 125
Other payables 353 177
Total non-current liabilities 430 302
Trade and other payables 12,835 19,536
Current tax payable 568 375
Total current liabilities 13,403 19,911
Total liabilities 13,833 20,213
Total equity and liabilities 38,457 38,954
NAV per Share (cents) 11.40
(1)
9.17
(2)
Notes:
(1) Subsequent to 31 December 2013, a final dividend of approximately S$1.3 million in respect of FY2013 was
declared on 14 February 2014 and subsequently paid on 7 May 2014. Please refer to the section entitled “Dividend
Policy” in this Prospectus for more details. The NAV per Share as at 31 December 2013 is computed based on our
pre-Offering issued share capital of 204,425,334 Shares and assumes that the final dividend of approximately S$1.3
million had been paid as at 31 December 2013.
(2) The NAV per Share as at 30 September 2014 is computed based on our pre-Offering issued share capital of
204,425,334 Shares.
SELECTED CONSOLIDATED FINANCIAL INFORMATION
62
The following selected pro forma financial information should be read in conjunction with the
section entitled “Unaudited Pro Forma Consolidated Financial Information for the Financial Year
ended 31 December 2013 and the Nine Months ended 30 September 2014” (the “Pro Forma
Financial Statements”) as set out in Appendix C of this Prospectus.
Our Group had restructured and disposed our India operation during the period between 1
January 2013 and the date of registration of this Prospectus with the MAS. In addition, our Group
had declared and paid dividends during the period between 31 December 2013 and the date of
registration of this Prospectus with the MAS. The relevant disposal and declaration and payment
of dividends (the “Transactions”) are described in Note 2 to the Pro Forma Financial Statements.
The Pro Forma Financial Statements have been prepared for illustrative purpose only and is
based on certain assumptions set out in Note 3 to the Pro Forma Financial Statements, to
illustrate what:
(i) the financial results of our Group for the year ended 31 December 2013 and the nine (9)
months ended 30 September 2014 would have been if the Transactions had occurred on 1
January 2013;
(ii) the financial position of our Group as at 31 December 2013 and 30 September 2014 would
have been if the Transactions had occurred on 31 December 2013 and 30 September 2014
respectively; and
(iii) the cash flows of our Group for the year ended 31 December 2013 and the nine (9) months
ended 30 September 2014 would have been if the Transactions had occurred on 1 January
2013,
as set out in the following tables.
The objective of the Pro Forma Financial Statements is to show what the financial position,
financial performance and cash flows of our Group might have been, had the Transactions
occurred at the respective dates as described above. However, the Pro Forma Financial
Statements is not necessarily indicative of the financial position, financial performance and cash
flows of our Group that would have been attained had the Transactions actually occurred on those
dates. The Pro Forma Financial Statements have been prepared for illustrative purposes only and,
because of its nature, may not give a true picture of our Group’s actual financial position, financial
performance or cash flows.
SELECTED PRO FORMA FINANCIAL INFORMATION
63
Selected pro forma consolidated statements of profit or loss
Unaudited
FY2013 9M2014
S$’000 S$’000
Continuing operations
Revenue 69,639 58,595
Commission and fee paid or payable to third party
financial advisers (37,884) (31,267)
31,755 27,328
Other operating income 164 209
Gain on distribution to owners of the Company 618 –
Depreciation of plant and equipment (703) (580)
Amortisation of intangible assets (169) (144)
Staff costs (13,311) (11,250)
Other operating expenses (9,399) (7,679)
Results from operating activities 8,955 7,884
Finance income 39 74
Finance expense (10) –
8,984 7,958
Share of result of associate, net of tax –
(1)
Profit before tax 8,984 7,958
Tax expense (573) (381)
Profit from continuing operations 8,411 7,577
Discontinued operation
Loss from discontinued operation, net of tax (2,517) –
Profit for the year/period 5,894 7,577
Attributable to:
Loss attributable to non-controlling interests from
continuing operations (232) (38)
Loss attributable to owners of the Company from
discontinued operation (2,517) –
Profit attributable to owners of the Company from
continuing operations 8,643 7,615
Profit for the year/period 5,894 7,577
Note:
(1) Less than S$1,000
SELECTED PRO FORMA FINANCIAL INFORMATION
64
Selected pro forma consolidated statements of financial position
Unaudited
As at
31 December
2013
As at
30 September
2014
S$’000 S$’000
Assets
Plant and equipment 1,634 1,727
Intangible assets 664 1,339
Associate – 401
Deferred tax assets 35 22
Other investments 2,011 1,802
Club membership 11 11
Total non-current assets 4,355 5,302
Current tax receivable 5 30
Trade and other receivables 16,764 17,940
Prepayments 614 497
Cash at bank and in hand 5,374 8,335
Money market funds 426 36
Total current assets 23,183 26,838
Held under trust
Client bank accounts 100,599 121,552
Client ledger balances (100,599) (121,552)
– –
Total assets 27,538 32,140
Equity
Share capital 10,670 11,379
Reserves 2,377 7,362
Equity attributable to owners of the Company 13,047 18,741
Non-controlling interests 658 –
Total equity 13,705 18,741
Liabilities
Deferred tax liabilities 77 125
Other payables 353 177
Total non-current liabilities 430 302
Trade and other payables 12,835 12,722
Current tax payable 568 375
Total current liabilities 13,403 13,097
Total liabilities 13,833 13,399
Total equity and liabilities 27,538 32,140
SELECTED PRO FORMA FINANCIAL INFORMATION
65
Selected pro forma consolidated statements of cash flows
Unaudited
FY2013 9M2014
S$’000 S$’000
Net cash from operating activities 8,654 7,136
Net cash used in investing activities (1,722) (1,763)
Net cash used in financing activities (14,659) (2,830)
Net (decrease)/increase in cash and cash equivalents (7,727) 2,543
Cash and cash equivalents at beginning of the year/period 13,541 5,801
Effect of exchange rate fluctuations on cash held (14) 27
Cash and cash equivalents at end of the year/period 5,800 8,371
SELECTED PRO FORMA FINANCIAL INFORMATION
66
The following discussion and analysis of our results of operations and financial position has been
prepared by our management and should be read in conjunction with the Audited Consolidated
Financial Statements of iFAST Corporation Ltd. and its subsidiaries for the Financial Years ended
31 December 2011, 2012 and 2013 and the Unaudited Interim Consolidated Financial Statements
of iFAST Corporation Ltd. and its subsidiaries for the nine (9) months ended 30 September 2014
set out in Appendices A and B of this Prospectus, respectively.
This discussion and analysis contains forward-looking statements that reflect our current views
with respect to future events and our financial performance and they involve risks and
uncertainties. Our actual results may differ significantly from those anticipated in the forward-
looking statements as a result of any number of factors, including those set forth in this section
and under the sections entitled “Risk Factors” and “Cautionary Note on Forward-looking
Statements”. Factors that might cause future results to differ significantly from those projected in
the forward-looking statements include, but are not limited to, those discussed below and
elsewhere in this Prospectus, particularly in the section entitled “Risk Factors”. Under no
circumstances should the inclusion of such forward-looking statements herein be regarded as a
representation, warranty or prediction with respect to the accuracy of the underlying assumptions
by our Company, the Joint Issue Managers, the Joint Underwriters or the placement agents of the
Offering or any other person. Investors are cautioned not to place undue reliance on these
forward-looking statements that speak only as at the date hereof. Please refer to the sections
entitled “Risk Factors” and “Cautionary Note on Forward-Looking Statements” in this Prospectus.
OVERVIEW
Based on our discussions and checks with our Suppliers and B2B Customers who are FAs, we
understand that based on our market share of their AUA and investment transactions, we are a
leading and established funds and investments distribution platform, providing a range of services
including distribution of Investment Products, investment administration, execution of
transactions, research and investment trainings, software tools, IT services and backroom
functions to more than 150 financial advisory companies and financial institutions in Singapore,
Malaysia and Hong Kong. In addition, according to Cerulli Associates, our Group is a leading
distribution platform among independent financial advisory firms and the online channel (DIY
Investors) in Singapore. For further details, please refer to the section entitled “Industry Overview
– Investment platforms in Asia ex-Japan: History and growth potential” in this Prospectus.
Through our distribution platforms, we provide a whole range of services to independent financial
advisers, financial institutions and adviser-assisted investors as well as DIY Investors to enable
them to make informed investment decisions and execute online transactions by equipping them
with a wide range of user-friendly investment and planning tools.
We conduct our business in two (2) main business divisions, namely:
(1) B2B Business
Our B2B Business focuses on servicing FAs by providing them with an efficient and reliable
investment platform to handle their back-end transactional and operational needs. Through
our B2B Business, we partner with financial institutions and FAs and assist with their
Investment Products distribution, administration, execution and settlement needs. As part of
our B2B Business, we also provide regular research updates on Investment Products, as well
MANAGEMENT’S DISCUSSION AND ANALYSIS OF RESULTS OF
OPERATIONS AND FINANCIAL POSITION
67
as Internet-based tools and mobile-friendly applications for financial institutions and FAs to
utilise in their portfolio and investment planning. Our Group’s B2B Platform can be accessed
via iFAST Financial’s website, www.ifastfinancial.com.
In addition, our B2B Business division also includes our Pensions Business that assists our
pension corporate clients to establish tax-effective retirement benefits schemes for their
employees and provides administrative support and specialist services to help these
corporate clients implement and administer employee retirement benefit plans. Services
rendered under our Pensions Business include advising corporate clients on the various
retirement benefit solutions for employees, helping to set up retirement benefit plans and the
day-to-day administration of the retirement benefit plans. These services are important for
companies that want to offer extra pensions benefits to retain their employees; or in cases
where their employees are mostly foreigners such as in multinational companies. Our iFAST
Pensions Website Customers include various multinational companies, including
international banks and educational groups. Revenue generated from Pensions Business
has not been significant since its inception. Our iFAST Pensions Website’s address is
www.ifastpensions.com.
(2) B2C Business
Our B2C Business began in Singapore in 2000 and we launched in Hong Kong in 2007 and
subsequently, Malaysia in 2008. Our B2C Business focuses on providing a reliable website
which offers Investment Products, Investment Products research, portfolio research, tools for
analyses of Investment Products, a strong emphasis on customer service, and a competitive
and transparent fees structure. Our B2C Business is targeted at DIY Investors seeking
alternative investment channels that provide them with more control in the decision-making
and execution process of investing. Products and services offered via Fundsupermart.com,
our B2C Platform, include the offering of Investment Products, free switching of unit trusts
and bond unit trusts sold at 0% upfront sales charges. Our B2C Platform can be accessed
via our Fundsupermart.com Website, www.fundsupermart.com. Please refer to the section
entitled “Our Business – Overview” in this Prospectus for more information on our Business.
Our key performance drivers
Since the commencement of our operations, we have experienced significant growth in our
business. In our business, the size of our AUA is a good indicator of our Group’s net revenue,
which represents revenue earned by our Group after deducting commission and fee paid or
payable to third party financial advisers. As at end September 2014, our AUA has a value of
approximately S$5.13 billion and in the last ten (10) years has grown at a CAGR of approximately
26.8% for our Group.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF RESULTS OF
OPERATIONS AND FINANCIAL POSITION
68
The following chart illustrates the growth of our AUA size since the commencement of our
operations to end September 2014.
S$ ’million
-
1,000
2,000
3,000
4,000
5,000
B2B B2C
While there has been a general uptrend in the value of our AUA in the last ten (10) years, such
an uptrend trend was interrupted during the GFC in which the financial markets experienced
heightened volatility. Our AUA was affected negatively as some Customers redeemed their
investments and some of the unit trusts’ net asset value (NAV) declined. These two (2) factors led
to the decline in our AUA during that period. After the GFC, our AUA has grown and resumed a
general uptrend as our business across the markets improved due to better market and investor
sentiments.
Our recurring revenue is driven by the size of our AUA. For illustrative purposes, the following
tables show (i) the breakdown of our net revenue by recurring net revenue and non-recurring net
revenue and our operating expenses; (ii) our average AUA; and (iii) our recurring net revenue,
non-recurring net revenue, net revenue and operating expenses as a percentage of our average
AUA, for the periods indicated:
FY2011
S$’000
FY2012
S$’000
FY2013
S$’000
9M2013
S$’000
9M2014
S$’000
Recurring net revenue 20,378 22,339 25,623 18,909 21,760
Non-recurring net revenue 4,826 3,952 5,963 4,601 5,568
Net revenue 25,204 26,291 31,586 23,510 27,328
Operating expenses 22,810 22,408 23,582 17,652 19,653
FY2011
S$’billion
FY2012
S$’billion
FY2013
S$’billion
9M2013
S$’billion
9M2014
S$’billion
Average AUA
(1)
3.88 3.91 4.46 4.42 4.89
MANAGEMENT’S DISCUSSION AND ANALYSIS OF RESULTS OF
OPERATIONS AND FINANCIAL POSITION
69
Net revenue and operating
expenses as a percentage of
average AUA
FY2011
%
FY2012
%
FY2013
%
9M2013
(3)
%
9M2014
(3)
%
Recurring net revenue
(2)
/AUA 0.526 0.571 0.574 0.570 0.593
Non-recurring net
revenue/AUA 0.125 0.101 0.134 0.139 0.152
Net revenue/AUA 0.651 0.672 0.708 0.709 0.745
Operating expenses/AUA 0.588 0.573 0.529 0.532 0.536
Notes:
(1) The average AUA is the average of the month-end AUAs for the relevant period.
(2) Our recurring net revenue comprises Trailer Fees which are calculated at up to 0.9% per annum of our average AUA,
Platform Fees which are calculated at up to 0.5% per annum of our average AUA and Wrap Fees which are
calculated at up to 0.2% per annum of our average AUA.
(3) The ratios are calculated based on annualised revenue and operating expenses figures for 9M2013 and 9M2014.
The following table shows the key drivers of our AUA excluding the effects arising from the general
economic conditions and financial market performance.
FY2011
S$’million
FY2012
S$’million
FY2013
S$’million
9M2013
S$’million
9M2014
S$’million
Subscription
(1)
947 941 1,365 1,080 1,138
Net inflows
(2)
55 193 458 416 348
Notes:
(1) Exclude switching between unit trusts.
(2) Net inflows mean subscription (excluding switching) plus transfer-in and less both redemption and transfer-out.
We have achieved significant scale and growth in our business. Our Group’s net revenue
increased by approximately 4.3% from S$25.2 million in FY2011 to S$26.3 million in FY2012,
increased by approximately 20.1% from S$26.3 million in FY2012 to S$31.6 million in FY2013,
and increased by approximately 16.2% from S$23.5 million for the nine (9) months ended 30
September 2013 to S$27.3 million for the same period in 2014. Our Group’s profit after tax from
continuing operations increased by approximately 57.1% from S$2.1 million in FY2011 to S$3.3
million in FY2012, increased by approximately 148.5% from S$3.3 million in FY2012 to S$8.2
million in FY2013, and increased by approximately 40.7% from S$5.4 million for the nine (9)
months ended 30 September 2013 to S$7.6 million for the same period in 2014.
Revenue
Revenue derived from our B2B Business includes (i) recurring revenue driven by AUA, comprising
Trailer Fees, Platform Fees and Wrap Fees; and (ii) non-recurring revenue that comprises (a)
commission income derived mainly from investment subscription via front-end load commissions
or processing fees; (b) service fees arising mainly from the provision of currency conversion
administration services to adviser-assisted investors and the provision of administration services
to FAs; (c) advertising fee earned mainly from advertisements placed by third parties on iFAST
Financial Websites and in iFAST in-house magazines and; (d) other miscellaneous income such
as magazine sales and software licence revenue.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF RESULTS OF
OPERATIONS AND FINANCIAL POSITION
70
Revenue derived from our B2C Business includes: (i) recurring revenue driven by AUA,
comprising Trailer Fees and Platform Fees; and (ii) non-recurring revenue that comprises (a)
commission income derived mainly from investment subscription via front-end load commissions
or processing fees; (b) service fees arising mainly from the provision of currency conversion
administration services to DIY investors; and (c) advertising fee earned mainly from
advertisements placed by third parties on Fundsupermart.com Website and its mobile application.
Commission and fee income and service fees are recognised on the completion of services
rendered. Magazine sales and software licence revenue are recognised when the significant risks
and rewards of ownership have been transferred to the buyer. Advertising revenue, which is
earned in the form of upfront and variable payments, is deferred and recognised over the period
to which the contract relates.
Our B2B and B2C Businesses have distribution agreements with many Fund Houses for the
distribution of a large variety of Investment Products. Please refer to the section entitled “Our
Business – Major Suppliers” in this Prospectus for more information on the list of major Fund
Houses with whom our Group has entered into agreements for the distribution of Investment
Products.
On the other hand, our Customers include DIY investors (for our B2C Business) and adviser-
assisted investors and FAs who maintain investment accounts with us via nominee arrangements
(for our B2B Business). Please refer to the section entitled “Our Business – Major Customers” in
this Prospectus for more information on the list of major FAs.
Currently, our Group carries out our B2B and B2C Businesses in Singapore, Hong Kong and
Malaysia. In prior years, our Group carried out an operation in India, which was discontinued in
FY2013 as a result of the Restructuring Exercise undertaken by our Company. Please refer to the
section entitled “Restructuring Exercise” in this Prospectus for further details on the Restructuring
Exercise.
The following table shows the breakdown of our revenue from continuing operations by
geographical segments:
Geographical
segment
FY2011 FY2012 FY2013 9M2013 9M2014
S$’000 % S$’000 % S$’000 % S$’000 % S$’000 %
Revenue
Singapore 48,879 80.0 42,867 76.0 52,455 75.5 40,013 75.9 40,444 69.0
Hong Kong 11,382 18.6 12,396 22.0 15,041 21.7 11,224 21.3 15,897 27.1
Malaysia 862 1.4 1,151 2.0 1,974 2.8 1,449 2.8 2,254 3.9
61,123 100.0 56,414 100.0 69,470 100.0 52,686 100.0 58,595 100.0
MANAGEMENT’S DISCUSSION AND ANALYSIS OF RESULTS OF
OPERATIONS AND FINANCIAL POSITION
71
The following table shows the breakdown of our revenue by business divisions:
Revenue –
B2B Business
FY2011 FY2012 FY2013 9M2013 9M2014
S$’000 % S$’000 % S$’000 % S$’000 % S$’000 %
Recurring
revenue 38,530 73.1 37,448 77.6 41,220 69.7 30,625 68.2 33,741 67.2
Non-recurring
revenue:
Commission
income 13,011 24.7 9,739 20.1 16,374 27.7 13,166 29.3 15,171 30.2
Service fees 960 1.8 865 1.8 1,360 2.3 961 2.2 1,019 2.0
Advertising fees 40 0.1 83 0.2 41 0.1 25 0.1 77 0.1
Other
miscellaneous
income 164 0.3 132 0.3 118 0.2 99 0.2 239 0.5
52,705 100.0 48,267 100.0 59,113 100.0 44,876 100.0 50,247 100.0
Revenue from our B2B Business in FY2011, FY2012, FY2013, 9M2013 and 9M2014 were
approximately S$52.7 million, S$48.3 million, S$59.1 million, S$44.9 million and S$50.2 million,
respectively and these accounted for 86.3%, 85.6%, 85.0%, 85.2% and 85.7% of our total revenue
in FY2011, FY2012, FY2013, 9M2013 and 9M2014, respectively.
Revenue –
B2C Business
FY2011 FY2012 FY2013 9M2013 9M2014
S$’000 % S$’000 % S$’000 % S$’000 % S$’000 %
Recurring
revenue 6,284 74.6 6,313 77.5 7,460 72.1 5,523 70.7 6,241 74.8
Non-recurring
revenue:
Commission
income 1,730 20.6 1,157 14.2 1,972 19.0 1,589 20.3 1,485 17.8
Service fees 261 3.1 320 3.9 465 4.5 351 4.5 432 5.2
Advertising fees 143 1.7 357 4.4 460 4.4 347 4.5 190 2.2
8,418 100.0 8,147 100.0 10,357 100.0 7,810 100.0 8,348 100.0
Revenue from our B2C Business in FY2011, FY2012, FY2013, 9M2013 and 9M2014 were
approximately S$8.4 million, S$8.1 million, S$10.4 million, S$7.8 million and S$8.3 million,
respectively and these accounted for 13.7%, 14.4%, 15.0%, 14.8% and 14.3% of our total revenue
in FY2011, FY2012, FY2013, 9M2013 and 9M2014, respectively.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF RESULTS OF
OPERATIONS AND FINANCIAL POSITION
72
The key factors that can affect our revenue include the following:
(a) general economic and financial market conditions which will have an impact on the general
demand for Investment Products by our Customers and the size of our AUA;
(b) number of competitors and the level of competition which will impact our market share and
profit margins;
(c) our ability to adapt to changes in customers’ expectations and changes in market conditions
through the development of new services or enhancement of existing services, which is
consequential to our ability to retain our existing customer base and to grow our market
share; and
(d) changes in laws and regulations governing capital market activities and financial advisory
services which will have an impact on our ability to conduct businesses.
A detailed account of the risk factors affecting our business activities are set out under the section
entitled “Risk Factors” in this Prospectus.
Commission and fee paid or payable to third party financial advisers
This represents the commission that we pay to the FAs, who transact with us on behalf of
adviser-assisted investors, under our B2B Business. There is no commission paid or payable for
our B2C Business division as the Customers are DIY investors.
The commission and fee that we pay to the FAs is variable and based on a commission and fee
sharing arrangement between such FAs and us. The following table shows the breakdown of the
commission and fee paid or payable to our FAs, by recurring and non-recurring basis:
Commission
and fee paid or
payable –
B2B Business
FY2011 FY2012 FY2013 9M2013 9M2014
S$’000 % S$’000 % S$’000 % S$’000 % S$’000 %
Share of
commission and
fee income from
recurring
revenue 24,436 68.0 21,422 71.1 23,057 60.9 17,239 59.1 18,222 58.3
Share of
commission
income from
non-recurring
revenue 11,483 32.0 8,701 28.9 14,827 39.1 11,937 40.9 13,045 41.7
35,919 100.0 30,123 100.0 37,884 100.0 29,176 100.0 31,267 100.0
Commission and fee payouts in FY2011, FY2012, FY2013, 9M2013 and 9M2014 were
approximately S$35.9 million, S$30.1 million, S$37.9 million, S$29.2 million and S$31.3 million,
respectively. These represented 58.8%, 53.4%, 54.5%, 55.4% and 53.4% of our total revenue in
FY2011, FY2012, FY2013, 9M2013 and 9M2014, respectively.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF RESULTS OF
OPERATIONS AND FINANCIAL POSITION
73
Net revenue
Net revenue represents revenue earned by our Group after commission and fee paid or payable
to third party financial advisers. Net revenue in FY2011, FY2012, FY2013, 9M2013 and 9M2014
were approximately S$25.2 million, S$26.3 million, S$31.6 million, S$23.5 million and S$27.3
million, respectively and these accounted for 41.2%, 46.6%, 45.5%, 44.6% and 46.6% of our total
revenue in FY2011, FY2012, FY2013, 9M2013 and 9M2014, respectively.
The following table shows the breakdown of our net revenue by recurring and non-recurring basis:
Net revenue –
B2B Business
& B2C
Business
FY2011 FY2012 FY2013 9M2013 9M2014
S$’000 % S$’000 % S$’000 % S$’000 % S$’000 %
Recurring
revenue 20,378 80.9 22,339 85.0 25,623 81.1 18,909 80.4 21,760 79.6
Non-recurring
revenue:
Commission
income 3,258 12.9 2,195 8.3 3,519 11.1 2,818 12.0 3,611 13.2
Service fee 1,221 4.8 1,185 4.5 1,825 5.8 1,312 5.6 1,451 5.3
Advertising fee 183 0.7 440 1.7 501 1.6 372 1.6 267 1.0
Other
miscellaneous
income 164 0.7 132 0.5 118 0.4 99 0.4 239 0.9
25,204 100.0 26,291 100.0 31,586 100.0 23,510 100.0 27,328 100.0
The following table shows the breakdown of our net revenue from continuing operations by
geographical segments:
Net revenue by
geographical
segment
FY2011 FY2012 FY2013 9M2013 9M2014
S$’000 % S$’000 % S$’000 % S$’000 % S$’000 %
Net revenue
from third
parties
Singapore 21,149 83.9 21,325 81.1 24,101 76.3 18,020 76.6 19,203 70.3
Hong Kong 3,655 14.5 4,393 16.7 6,503 20.6 4,767 20.3 7,046 25.8
Malaysia 400 1.6 573 2.2 982 3.1 723 3.1 1,079 3.9
25,204 100.0 26,291 100.0 31,586 100.0 23,510 100.0 27,328 100.0
MANAGEMENT’S DISCUSSION AND ANALYSIS OF RESULTS OF
OPERATIONS AND FINANCIAL POSITION
74
Other operating income
Other operating income relates mainly to investment income, government grant and gain or loss
on disposal of plant and equipment. Other operating income represented approximately 0.2%,
0.3%, 0.5%, 0.3% and 0.8% of our net revenue in FY2011, FY2012, FY2013, 9M2013 and
9M2014, respectively.
Gain on distribution to owners of our Company
Gain on distribution to owners of our Company in FY2013 arose due to the Restructuring Exercise
undertaken by our Company in FY2013 in relation to the disposal of our India business as
described in the section entitled “Restructuring Exercise” in this Prospectus. During the
Restructuring Exercise, our Company declared a dividend in specie of S$3.8 million via the pro
rata distribution of our Company’s entire investment in the India business to the shareholders of
our Company. This gain arose from the difference between the value of the declared dividend in
specie of S$3.8 million as mentioned above and the carrying amount of the net assets distributed
in our India business, as a result of the dividend in specie, of S$3.2 million. Please refer to the
section entitled “Restructuring Exercise” in this Prospectus for further details on the Restructuring
Exercise.
Operating expenses
The following table shows the changes in our total operating expenses as compared to the
changes in our net revenue in the last three (3) financial years and for the nine (9) months ended
30 September 2014.
FY2011 FY2012 FY2013 9M2013 9M2014
S$’000 S$’000 S$’000 S$’000 S$’000
Total operating expenses 22,810 22,408 23,582 17,652 19,653
Change in total operating
expenses (%) – (1.8) 5.2 – 11.3
Net revenue 25,204 26,291 31,586 23,510 27,328
Change in net revenue (%) – 4.3 20.1 – 16.2
Our operating expenses include depreciation of plant and equipment, amortisation of intangible
assets, staff costs and other operating expenses. These represented approximately 90.5%,
85.2%, 74.6%, 75.1% and 71.9% of our net revenue in FY2011, FY2012, FY2013, 9M2013 and
9M2014, respectively.
Depreciation of plant and equipment accounted for approximately 4.3%, 3.5%, 3.0%, 3.0% and
3.0% of operating expenses in FY2011, FY2012, FY2013, 9M2013 and 9M2014, respectively.
Amortisation of intangible assets accounted for approximately 1.5%, 0.3%, 0.7%, 0.7% and 0.7%
of operating expenses in FY2011, FY2012, FY2013, 9M2013 and 9M2014, respectively.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF RESULTS OF
OPERATIONS AND FINANCIAL POSITION
75
Staff costs accounted for approximately 53.9%, 53.2%, 56.4%, 56.5% and 57.2% of operating
expenses in FY2011, FY2012, FY2013, 9M2013 and 9M2014, respectively. Our staff costs mainly
comprise wages, salaries, bonus, employer’s contribution to defined contribution plans, staff
welfare and benefits.
Other operating expenses accounted for approximately 40.3%, 43.0%, 39.9%, 39.8% and 39.1%
of operating expenses in FY2011, FY2012, FY2013, 9M2013 and 9M2014, respectively. Other
operating expenses mainly comprise advertising and promotion expenses, office rental, bank
charges, information technology service and maintenance expenses, postage and courier and
printing and stationery expenses.
Tax expense
Our tax expense for FY2011, FY2012, FY2013, 9M2013 and 9M2014 comprises current tax
expense and deferred tax expense. Current tax expense is the expected tax payable on the
taxable income for FY2011, FY2012, FY2013, 9M2013 and 9M2014 using tax rates enacted or
substantively enacted at the respective reporting dates, and any adjustment to tax payable in
respect of previous years. Deferred tax is recognised in respect of temporary differences between
the carrying amounts of assets and liabilities for financial reporting purposes and the amounts
used for taxation purposes.
Deferred tax assets are recognised for unused tax losses and deductible temporary differences,
to the extent that it is probable that future taxable profits will be available against which they can
be utilised.
Our operations in Singapore, Malaysia and Hong Kong are subject to corporate tax rates of 17.0%,
25.0% and 16.5%, respectively.
Our tax expense and the effective tax rates are set out below:
FY2011 FY2012 FY2013 9M2013 9M2014
S$’000 S$’000 S$’000 S$’000 S$’000
Current tax expense 376 685 555 573 319
Deferred tax expense (124) – 18 (23) 62
Tax expense 252 685 573 550 381
Effective tax rate (%) 10.6 17.4 6.5 9.2 4.8
Other than in FY2012, the effective tax rates were lower than the statutory tax rates in the
countries that our Group operates in, mainly due to effects of utilisation of unabsorbed capital
allowances and tax losses from prior years, partial tax exemption and relief, tax rebates and tax
incentives. The effective tax rate in FY2012 was close to the statutory corporate tax rate in
Singapore.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF RESULTS OF
OPERATIONS AND FINANCIAL POSITION
76
Profit from continuing operations
The following table shows the breakdown of our profit after tax from continuing operations by
geographical segments:
Profit/(loss) after tax
FY2011 FY2012 FY2013 9M2013 9M2014
S$’000 S$’000 S$’000 S$’000 S$’000
Singapore 5,533 5,637 8,436
(1)
5,649 6,451
Hong Kong (1,973) (1,188) 400 237 1,589
Malaysia (1,438) (1,193) (594) (485) (84)
China
(2)
– – – – (379)
2,122 3,256 8,242 5,401 7,577
Notes:
(1) The profit after tax in our Singapore operation includes a one-off gain on distribution to owners of our Company of
S$0.6 million as a result of the Restructuring Exercise undertaken by our Company in October 2013. Please refer
to the section entitled “Restructuring Exercise” in this Prospectus for more details.
(2) We started our operation in China in 2014, which is still in the start-up phase.
INFLATION
The impact of inflation on our financial performance over the Periods Under Review was not
significant.
SEASONALITY
Our business is generally not subject to any annual seasonal trend. However, based on our
experience, the nature of our business activity is subject to the volatility in financial markets. We
are dependent mainly on the size of our AUA, the growth of new subscribers to our Platform and
the number of financial advisers using our Platform. The above-mentioned factors are generally
subject to cyclical movements in financial markets.
REVIEW OF PAST OPERATING PERFORMANCE
FY2011 vs FY2012
Revenue
Revenue decreased by approximately S$4.7 million or 7.7%, from S$61.1 million in FY2011 to
S$56.4 million in FY2012. This was due to the decrease in revenue from our B2B Business of
S$4.4 million or 8.3%, from S$52.7 million in FY2011 to S$48.3 million in FY2012 and the
decrease in revenue from our B2C Business of S$0.3 million or 3.6%, from S$8.4 million in
FY2011 to S$8.1 million in FY2012.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF RESULTS OF
OPERATIONS AND FINANCIAL POSITION
77
The decrease in revenue from our B2B Business was due mainly to the following reasons:
(i) a decrease in commission income from non-recurring revenue by approximately S$3.3
million or 25.4%, from S$13.0 million in FY2011 to S$9.7 million in FY2012, which was due
mainly to the decrease in unit trusts subscriptions from S$664.0 million in FY2011 to S$628.0
million in FY2012; and
(ii) a decrease in recurring revenue by approximately S$1.1 million or 2.9%, from S$38.5 million
in FY2011 to S$37.4 million in FY2012. This was due mainly to the decrease in wrap fee
commission from S$20.0 million in FY2011 to S$18.9 million in FY2012 as a result of wrap
fee rate revision in July 2011, following the capping of the wrap fees chargeable to CPF
investment accounts at 1.00% per annum with effect from 1 July 2012 by the CPFB. The
average AUA for our B2B business in FY2012 was approximately S$2.96 billion, which was
unchanged as compared to FY2011.
The decrease in revenue from our B2C Business was due mainly to a decrease in commission
income from non-recurring revenue by approximately S$0.5 million or 29.4%, from S$1.7 million
in FY2011 to S$1.2 million in FY2012. The average AUA for our B2C Business in FY2012 and
FY2011 was approximately S$0.95 billion and S$0.94 billion respectively, and the unit trusts
subscriptions increased from S$283.0 million in FY2011 to S$313.0 million in FY2012. The
decrease in commission income from non-recurring revenue was due mainly to an increase in unit
trust subscription with lower margins. This was partially offset by an increase in revenue from
advertising fees by approximately S$0.2 million or 200.0%, from S$0.1 million in FY2011 to S$0.3
million in FY2012, which was due mainly to an increase in advertising income from the fund
houses.
Commission and fee paid or payable to third party financial advisers
Commission and fee paid or payable to third party financial advisers decreased by approximately
S$5.8 million or 16.2%, from S$35.9 million in FY2011 to S$30.1 million in FY2012. The decrease
was mainly due to a decrease in revenue from our B2B Business and a one-off payment to our FAs
in 2011 for the administrative costs incurred by our FAs when we implemented a Platform Fees
structure.
Net revenue
As a result of the factors discussed above, net revenue for the year increased by approximately
S$1.1 million or 4.4%, from S$25.2 million in FY2011 to S$26.3 million in FY2012, and net revenue
as a proportion of average AUA for the year increased from 0.651% in FY2011 to 0.672% in
FY2012.
Breaking down by business divisions, the net revenue generated from our B2B Business
increased from approximately S$16.8 million in FY2011 to S$18.2 million in FY2012. The net
revenue generated from our B2C Business decreased from S$8.4 million in FY2011 to S$8.1
million in FY2012.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF RESULTS OF
OPERATIONS AND FINANCIAL POSITION
78
Breaking down by geographical segments, the net revenue generated from our Singapore
operation increased from S$21.1 million in FY2011 to S$21.3 million in FY2012. The net revenue
generated from our Hong Kong operation increased from S$3.7 million in FY2011 to S$4.4 million
in FY2012. The net revenue generated from our Malaysian operation increased from S$0.4 million
in FY2011 to S$0.6 million in FY2012.
Other operating income
Other operating income increased by approximately S$27,000 or 46.6%, from S$58,000 in
FY2011 to S$85,000 in FY2012. The increase was due mainly to increases in investment income
and other miscellaneous income.
Operating expenses
Depreciation of plant and equipment decreased by approximately S$0.2 million or 20.0%, from
S$1.0 million in FY2011 to S$0.8 million in FY2012 as certain plant and equipment were fully
depreciated in FY2011 and FY2012.
Amortisation of intangible assets decreased by approximately S$0.2 million or 66.6%, from S$0.3
million in FY2011 to S$0.1 million in FY2012 as certain intangible assets were fully amortised in
FY2011 and FY2012.
Staff costs decreased by approximately S$0.4 million or 3.3%, from S$12.3 million in FY2011 to
S$11.9 million in FY2012 due mainly to a decrease in payroll and staff-related expenses. Our staff
number decreased from 229 as at 31 December 2011 to 200 as at 31 December 2012.
Other operating expenses increased by approximately S$0.4 million or 4.3%, from S$9.2 million
in FY2011 to S$9.6 million in FY2012. The increase was due mainly to increases in advertising
and promotion expenses, IT maintenance and services and office rental as a result of relocation
of our Singapore office in April 2011.
Overall, total operating expenses decreased by approximately S$0.4 million or 1.8%, from S$22.8
million in FY2011 to S$22.4 million in FY2012.
Finance income
Finance income decreased by approximately S$14,000 or 23.7%, from S$59,000 in FY2011 to
S$45,000 in FY2012. Finance income comprises mainly interest income from banks and money
market funds.
Finance expense
Finance expense decreased by approximately S$65,000 or 47.4%, from S$137,000 in FY2011 to
S$72,000 in FY2012. Finance expense comprises mainly interest expense from bank borrowings.
Profit before tax
Profit before tax increased by approximately S$1.5 million or 62.5%, from S$2.4 million in FY2011
to S$3.9 million in FY2012.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF RESULTS OF
OPERATIONS AND FINANCIAL POSITION
79
Tax expense
Tax expense increased by approximately S$0.4 million or 133.3%, from S$0.3 million in FY2011
to S$0.7 million in FY2012 due mainly to the increase in our taxable income. Our effective tax
rates for FY2011 and FY2012 were 10.6% and 17.4% respectively. The lower effective tax rate for
FY2011 was due mainly to tax benefits arising from writing-down allowances on our intellectual
property which was fully claimed by our Company during five years from FY2007 to FY2011.
Profit from continuing operations
Profit from continuing operations increased by approximately S$1.2 million or 57.1%, from S$2.1
million in FY2011 to S$3.3 million in FY2012.
Breaking down by geographical segments, the profit generated from our Singapore operation
increased from S$5.5 million in FY2011 to S$5.6 million in FY2012. The loss incurred by our Hong
Kong operation decreased from S$2.0 million in FY2011 to S$1.2 million in FY2012. The loss
incurred by our Malaysian operation decreased from S$1.4 million in FY2011 to S$1.2 million in
FY2012.
Loss from discontinued operation, net of tax
Loss from discontinued operation, net of tax decreased by approximately S$0.3 million or 15.8%,
from S$1.9 million in FY2011 to S$1.6 million in FY2012.
Profit for the year
Profit for the year increased by approximately S$1.4 million or 700.0%, from S$0.2 million in
FY2011 to S$1.6 million in FY2012.
FY2012 vs FY2013
Revenue
Revenue increased by approximately S$13.1 million or 23.2%, from S$56.4 million in FY2012 to
S$69.5 million in FY2013. This was due to the increase in revenue from our B2B Business of
S$10.8 million or 22.4%, from S$48.3 million in FY2012 to S$59.1 million in FY2013, and the
increase in revenue from our B2C Business of S$2.3 million or 28.4%, from S$8.1 million in
FY2012 to S$10.4 million in FY2013.
The increase in revenue from our B2B Business was due mainly to the following reasons:
(i) an increase in commission income from non-recurring revenue by approximately S$6.7
million or 69.1%, from S$9.7 million in FY2012 to S$16.4 million in FY2013. This was due to
an increase in unit trusts subscriptions from S$628.0 million in FY2012 to S$890.0 million in
FY2013, arising from improved market sentiments and market conditions and the higher
growth rate of our operations in Hong Kong and Malaysia; and
(ii) an increase in recurring revenue by approximately S$3.8 million or 10.2%, from S$37.4
million in FY2012 to S$41.2 million in FY2013. This was due to an increase in the average
AUA for our B2B Business from approximately S$2.96 billion in FY2012 to approximately
S$3.34 billion in FY2013, arising from improved market sentiments and market conditions
and the inflow of investments from our Customers.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF RESULTS OF
OPERATIONS AND FINANCIAL POSITION
80
The increase in revenue from our B2C Business was due mainly to the following reasons:
(i) increase in recurring revenue by approximately S$1.2 million or 19.0%, from S$6.3 million in
FY2012 to S$7.5 million in FY2013. This was due to an increase in the average AUA for our
B2C Business from approximately S$0.95 billion in FY2012 to approximately S$1.12 billion
in FY2013; and
(ii) increase in commission income from non-recurring revenue by approximately S$0.8 million
or 66.7%, from S$1.2 million in FY2012 to S$2.0 million in FY2013. This was due to an
increase in unit trusts subscriptions from S$313.0 million for FY2012 to S$475.0 million for
FY2013.
Commission and fee paid or payable to third party financial advisers
Commission and fee paid or payable to third party financial advisers increased by approximately
S$7.8 million or 25.9%, from S$30.1 million in FY2012 to S$37.9 million in FY2013. The increase
was in line with the increase in revenue from our B2B Business.
Net revenue
As a result of the factors discussed above, net revenue for the year increased by approximately
S$5.3 million or 20.2%, from S$26.3 million in FY2012 to S$31.6 million in FY2013, and net
revenue as a proportion of average AUA for the year increased from 0.672% in FY2012 to 0.708%
in FY2013.
Breaking down by business divisions, the net revenue generated from our B2B Business
increased from S$18.2 million in FY2012 to S$21.2 million in FY2013. The net revenue generated
from our B2C Business increased from S$8.1 million in FY2012 to S$10.4 million in FY2013.
Breaking down by geographical segments, the net revenue generated from our Singapore
operation increased from S$21.3 million in FY2012 to S$24.1 million in FY2013. The net revenue
generated from our Hong Kong operation increased from S$4.4 million in FY2012 to S$6.5 million
in FY2013. The net revenue generated from our Malaysian operation increased from S$0.6 million
in FY2012 to S$1.0 million in FY2013.
Other operating income
Other operating income increased by approximately S$0.1 million or 100.0%, from S$0.1 million
in FY2012 to S$0.2 million in FY2013. The increase was due mainly to an increase in our
investment income.
Gain on distribution to owners of our Company
A gain on distribution to owners of the Company was approximately S$0.6 million in FY2013. It
arose due to the Restructuring Exercise undertaken by our Company in October 2013. Please
refer to the section entitled “Restructuring Exercise” in this Prospectus for further details on the
Restructuring Exercise.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF RESULTS OF
OPERATIONS AND FINANCIAL POSITION
81
Operating expenses
Depreciation of plant and equipment decreased by approximately S$0.1 million or 12.5%, from
S$0.8 million in FY2012 to S$0.7 million in FY2013 as certain plant and equipment were fully
depreciated in FY2012 and FY2013.
Amortisation of intangible assets increased by approximately S$0.1 million or 100.0%, from S$0.1
million in FY2012 to S$0.2 million in FY2013. This was due mainly to additions of intangible assets
in FY2013.
Staff costs increased by approximately S$1.4 million or 11.8%, from S$11.9 million in FY2012 to
S$13.3 million in FY2013 due mainly to an increase in payroll and staff-related expenses. Our staff
number increased from 200 as at 31 December 2012 to 210 as at 31 December 2013.
Other operating expenses decreased by approximately S$0.2 million or 2.1%, from S$9.6 million
in FY2012 to S$9.4 million in FY2013. This was due mainly to a decrease in advertising and
promotion expense.
Overall, total operating expenses increased by approximately S$1.2 million or 5.2%, from S$22.4
million in FY2012 to S$23.6 million in FY2013.
Finance income
Finance income decreased by approximately S$6,000 or 13.3%, from S$45,000 in FY2012 to
S$39,000 in FY2013. Finance income comprises mainly interest income from banks and money
market funds.
Finance expense
Finance expense decreased by approximately S$62,000 or 86.1%, from S$72,000 in FY2012 to
S$10,000 in FY2013 due to the full repayment of bank borrowing in FY2013.
Profit before tax
Profit before income tax increased by approximately S$4.9 million or 125.6%, from S$3.9 million
in FY2012 to S$8.8 million in FY2013.
Tax expense
Tax expense decreased by approximately S$0.1 million or 14.3%, from S$0.7 million in FY2012
to S$0.6 million in FY2013, due mainly to effects of utilisation of unabsorbed tax losses from prior
years by our Hong Kong operation and tax incentives enjoyed by our Singapore operation in
FY2013. Our effective tax rates for FY2012 and FY2013 were 17.4% and 6.5% respectively.
Profit from continuing operations
Profit from continuing operations increased by approximately S$5.0 million or 156.3%, from S$3.2
million in FY2012 to S$8.2 million in FY2013.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF RESULTS OF
OPERATIONS AND FINANCIAL POSITION
82
Breaking down by geographical segment and after excluding the one-off gain of approximately
S$0.6 million on distribution to owners of our Company in FY2013, the profit generated from our
Singapore operation increased from S$5.7 million in FY2012 to S$7.8 million in FY2013. Our Hong
Kong operation managed a turnaround from a loss of S$1.2 million in FY2012 to a profit of S$0.4
million in FY2013. The loss incurred by our Malaysian operation decreased from S$1.2 million in
FY2012 to S$0.6 million in FY2013.
Loss from discontinued operation, net of tax
Loss from discontinued operation, net of tax increased by approximately S$1.6 million or 100.0%,
from S$1.6 million in FY2012 to S$3.2 million in FY2013. This was due mainly to an accumulative
exchange difference of S$2.8 million that was reclassified from equity to profit or loss as a result
of the disposal of our India operation in FY2013. For more details on the disposal of our India
operations, please refer to the section entitled “Restructuring Exercise” in this Prospectus.
Profit for the year
Profit for the year increased by approximately S$3.5 million or 218.8%, from S$1.6 million in
FY2012 to S$5.1 million in FY2013.
9M2013 vs 9M2014
Revenue
Revenue increased by approximately S$5.9 million or 11.2%, from S$52.7 million in 9M2013 to
S$58.6 million in 9M2014. This was due to an increase in revenue from our B2B Business of S$5.3
million or 11.8%, from S$44.9 million in 9M2013 to S$50.2 million in 9M2014, and the increase in
revenue from our B2C Business of S$0.5 million or 6.4%, from S$7.8 million in 9M2013 to S$8.3
million in 9M2014.
The increase in revenue from our B2B Business was due mainly to the following reasons:
(i) an increase in recurring revenue by approximately S$3.1 million or 10.1%, from S$30.6
million in 9M2013 to S$33.7 million in 9M2014. This was due to an increase in the average
AUA for our B2B Business from approximately S$3.31 billion in 9M2013 to approximately
S$3.63 billion in 9M2014, arising from the inflow of investments from our Customers; and
(ii) an increase in commission income from non-recurring revenue by approximately S$2.0
million or 15.2%, from S$13.2 million in 9M2013 to S$15.2 million in 9M2014. This was due
to an increase in unit trusts subscriptions from S$700.0 million in 9M2013 to S$773.0 million
in 9M2014 arising from the continued growth of our operations in Hong Kong and Malaysia.
The increase in revenue from our B2C Business was due mainly to an increase in recurring
revenue by approximately S$0.7 million or 12.7%, from S$5.5 million in 9M2013 to S$6.2 million
in 9M2014. This was due to an increase of approximately S$0.15 billion or 13.5% in the average
AUA for our B2C Business from approximately S$1.11 billion in 9M2013 to approximately S$1.26
billion in 9M2014. The increase in recurring revenue was partially offset by a decrease in
commission income from non-recurring revenue by approximately S$0.1 million or 6.3%, from
S$1.6 million in 9M2013 to S$1.5 million in 9M2014 due mainly to a decrease in unit trusts
subscriptions from S$380.0 million in 9M2013 to S$365.0 million in 9M2014.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF RESULTS OF
OPERATIONS AND FINANCIAL POSITION
83
Commission and fee paid or payable to third party financial advisers
Commission and fee paid or payable to third party financial advisers increased by approximately
S$2.1 million or 7.2%, from S$29.2 million in 9M2013 to S$31.3 million in 9M2014. The increase
was in line with the increase in revenue from our B2B Business.
Net revenue
As a result of the factors discussed above, net revenue increased by approximately S$3.8 million
or 16.2%, from S$23.5 million in 9M2013 to S$27.3 million in 9M2014, and annualised net revenue
as a proportion of average AUA for the period increased from 0.709% in 9M2013 to 0.745% in
9M2014.
Breaking down by business divisions, the net revenue generated from our B2B Business
increased from S$15.7 million in 9M2013 to S$18.9 million in 9M2014. The net revenue generated
from our B2C Business increased from S$7.8 million in 9M2013 to S$8.3 million in 9M2014.
Breaking down by geographical segments, the net revenue generated from our Singapore
operation increased from S$18.0 million in 9M2013 to S$19.2 million in 9M2014. The net revenue
generated from our Hong Kong operation increased from S$4.8 million in 9M2013 to S$7.0 million
in 9M2014. The net revenue generated from our Malaysian operation increased from S$0.7 million
in 9M2013 to S$1.1 million in 9M2014.
Other operating income
Other operating income increased by approximately S$137,000 or 190.3%, from S$72,000 in
9M2013 to S$209,000 in 9M2014. The increase was due mainly to increases in investment income
and government grant receipts. The government grant received in 9M2014 comprised of (i) a
one-off bonus of S$22,000 under the Productivity and Innovation Credit scheme, and (ii) refunds
of approximately S$46,000 under the Wage Credit Scheme, and the Wage Credit Scheme is valid
for the period of FY2013 to FY2015.
Operating expenses
There were no significant changes in depreciation of plant and equipment and amortisation of
intangible assets.
Staff costs increased by approximately S$1.2 million or 12.0%, from approximately S$10.0 million
in 9M2013 to S$11.2 million in 9M2014 due mainly to an increase in payroll and staff-related
expenses. Our staff number increased from 208 as at 30 September 2013 to 237 as at 30
September 2014.
Other operating expenses increased by approximately S$0.7 million or 10.0%, from S$7.0 million
in 9M2013 to S$7.7 million in 9M2014. The increase was due mainly to increases in IT
maintenance and services, insurance costs and business development costs for set up of our new
operation in the PRC in 9M2014. In addition, in 9M2014, an amount of approximately S$0.5 million
arising from outstanding Wrap Fees receivables from our adviser-assisted investors for previous
years was written off. As these Wrap Fees receivables consist of commission income significantly
payable to third party financial advisers, a bad debt of approximately S$36,000 arising from the
aforementioned write-off was recognised in profit or loss in 9M2014, after taking into consideration
MANAGEMENT’S DISCUSSION AND ANALYSIS OF RESULTS OF
OPERATIONS AND FINANCIAL POSITION
84
the amount payable to third party financial advisers and an impairment allowance of approximately
S$14,000 arising from these Wrap Fee receivables that had been recognised in the Group’s
consolidated financial statements for FY2013. Currently, our Group experiences minimal
instances of non-payment from our adviser-assisted investors of the Wrap Fees due to us as a
majority of our adviser-assisted investors have converted to our current Wrap Fees collection
method which involves the redemption of unit trusts from unit holdings of such adviser-assisted
investors. Save as disclosed above, our Group does not have any issues with the collection of
material amounts of trade and other receivables outstanding as at 30 September 2014.
Overall, total operating expenses increased by approximately S$2.0 million or 11.3%, from S$17.7
million in 9M2013 to S$19.7 million in 9M2014.
Finance income
Finance income increased by approximately S$43,000 or 138.7%, from S$31,000 in 9M2013 to
S$74,000 in 9M2014. Finance income comprises mainly interest income from banks and money
market funds.
Finance expense
There was no finance expense incurred in 9M2014, as our remaining bank borrowing was fully
repaid in 9M2013.
Share of result of associate, net of tax
Share of result of associate, net of tax was less than S$1,000 in 9M2014. In July 2014, our Group
acquired a 19.9% stake in Providend by acquiring 30,384 newly issued preferred shares at
S$13.17 per preferred share for an aggregate consideration of approximately S$400,157. Please
refer to the section entitled “Our Business – History and Development” in this Prospectus for
further details on the acquisition.
Profit before tax
Profit before tax increased by approximately S$2.0 million or 33.3%, from S$6.0 million in 9M2013
to S$8.0 million in 9M2014.
Tax expense
Tax expense decreased by approximately S$0.2 million or 33.3%, from S$0.6 million in 9M2013
to S$0.4 million in 9M2014, due mainly to continued utilisation of unabsorbed tax losses from prior
years by our Hong Kong operation and tax incentives enjoyed by our Singapore operation in
9M2014 under the Productivity and Innovation Credit (“PIC”) Scheme. The PIC Scheme is valid
for the period from FY2010 to FY2017. Our effective tax rates for 9M2013 and 9M2014 were 9.2%
and 4.8% respectively.
Profit from continuing operations
Profit from continuing operations increased by approximately S$2.2 million or approximately
40.7%, from approximately S$5.4 million in 9M2013 to approximately S$7.6 million in 9M2014.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF RESULTS OF
OPERATIONS AND FINANCIAL POSITION
85
Breaking down by geographical segments and after excluding the business development costs of
S$0.4 million incurred for set up of our new operation in the PRC in 9M2014, the profit generated
from our Singapore operation increased from S$5.7 million in 9M2013 to S$6.5 million in 9M2014.
The profit from our Hong Kong operation grew further from S$0.2 million in 9M2013 to S$1.6
million in 9M2014. The loss incurred by our Malaysian operation decreased from S$0.5 million in
9M2013 to S$0.1 million in 9M2014.
Loss from discontinued operation, net of tax
Loss from discontinued operation, net of tax was approximately S$0.6 million in 9M2013. The
operation was discontinued in October 2013 as a result of the Restructuring Exercise undertaken
by our Company in FY2013. Please refer to the section entitled “Restructuring Exercise” in this
Prospectus for further details on the Restructuring Exercise.
Profit for the period
Profit for the period increased by approximately S$2.8 million or 58.3%, from S$4.8 million in
9M2013 to S$7.6 million in 9M2014.
REVIEW OF PAST FINANCIAL POSITION
Audited consolidated statement of financial position as at 31 December 2013
A review of our financial position based on the audited consolidated statement of financial position
of our Group as at 31 December 2013 is set out below.
Non-current assets
Our non-current assets comprised mainly (a) plant and equipment; (b) intangible assets; (c)
deferred tax assets; (d) other investments; and (e) club membership. Non-current assets
amounted to approximately S$4.4 million as at 31 December 2013. These non-current assets
represented approximately 11.4% of our total assets as at 31 December 2013.
These non-current assets comprised the following:
(a) Plant and equipment amounted to approximately S$1.6 million and accounted for 37.5% of
our total non-current assets as at 31 December 2013. Plant and equipment comprised
computer equipment, office equipment, furniture and fittings and office renovation;
(b) Intangible assets amounted to approximately S$0.7 million and accounted for 15.2% of our
total non-current assets as at 31 December 2013. Intangible assets comprised development
costs, computer software, intellectual properties and customer lists;
(c) Deferred tax assets amounted to approximately S$35,000 and accounted for 0.8% of our
total non-current assets as at 31 December 2013;
(d) Other investments amounted to approximately S$2.0 million and accounted for 46.2% of our
total non-current assets as at 31 December 2013. Other investments comprised our
investments in available-for-sale quoted securities; and
MANAGEMENT’S DISCUSSION AND ANALYSIS OF RESULTS OF
OPERATIONS AND FINANCIAL POSITION
86
(e) Club membership amounted to approximately S$11,000 and accounted for 0.3% of our total
non-current assets as at 31 December 2013.
Current assets
Our current assets comprised mainly (a) current tax receivable; (b) trade and other receivables;
(c) prepayments; (d) cash at bank and in hand; and (e) money market funds. Current assets
amounted to approximately S$34.1 million as at 31 December 2013. These current assets
represented approximately 88.6% of our total assets as at 31 December 2013.
These current assets comprised the following:
(a) Current tax receivable amounted to approximately S$5,000 and accounted for less than 0.1%
of our total current assets as at 31 December 2013;
(b) Trade and other receivables amounted to approximately S$16.8 million and accounted for
49.3% of our total current assets as at 31 December 2013. Trade and other receivables
comprised net trade receivables, accrued revenue and deposits and other receivables which
amounted to S$7.1 million, S$7.9 million and S$1.8 million respectively;
(c) Prepayments amounted to approximately S$0.6 million and accounted for 1.8% of our total
current assets as at 31 December 2013. Prepayments comprised mainly of insurance
premium, license fees, maintenance fees and advance payment to vendors;
(d) Cash at bank and in hand amounted to approximately S$16.3 million and accounted for
47.8% of our total current assets as at 31 December 2013; and
(e) Money market funds amounted to approximately S$0.4 million and accounted for 1.1% of our
total current assets as at 31 December 2013. Money market funds are considered fully liquid
investment readily convertible into known amount of cash and cash equivalents which are
subject to an insignificant risk of changes in value.
Held under trust
Some of the subsidiaries in our Group receive and hold monies deposited by DIY investors,
adviser-assisted investors and other institutions in the course of our conduct of the regulated
activities. These clients’ monies are maintained in one (1) or more trust bank accounts which are
separately maintained from the bank accounts of our Group. Depending on the banks at which
such trust bank accounts are maintained and the prevailing interest rates, the Group may earn
interest income from the monies held under trust.
Non-current liabilities
Our non-current liabilities comprised mainly deferred tax liabilities and other payables. Non-
current liabilities amounted to approximately S$0.4 million as at 31 December 2013. These
non-current liabilities represented approximately 2.9% of our total liabilities as at 31 December
2013.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF RESULTS OF
OPERATIONS AND FINANCIAL POSITION
87
These non-current liabilities comprised the following:
(a) Deferred tax liabilities amounted to approximately S$77,000 and accounted for 17.9%, of our
total non-current liabilities as at 31 December 2013; and
(b) Other payables amounted to approximately S$0.4 million and accounted for 82.1%, of our
total non-current liabilities as at 31 December 2013. Other payables comprised the
non-current portion of accrued operating expenses payable to a third party.
Current liabilities
Our current liabilities comprised mainly (a) trade and other payables and (b) current tax payable.
Current liabilities amounted to approximately S$13.4 million as at 31 December 2013. These
current liabilities represented approximately 97.1% of our total liabilities as at 31 December 2013.
These current liabilities comprised the following:
(a) Trade and other payables amounted to approximately S$12.8 million and accounted for
95.5% of our total current liabilities as at 31 December 2013. Trade and other payables
comprised trade payables, accrued operating expenses and deposits received which
amounted to S$1.0 million, S$11.4 million and S$0.4 million respectively; and
(b) Current tax payable amounted to approximately S$0.6 million and accounted for 4.5% of our
total current liabilities as at 31 December 2013.
Equity attributable to owners of our Company
Equity attributable to owners of our Company comprises share capital, fair value reserve, foreign
currency translation reserve, share option reserve, equity reserve and accumulated profits.
As at 31 December 2013, our Shareholders’ equity amounted to approximately S$24.6 million.
Consolidated statement of financial position as at 30 September 2014
A review of our financial position based on the unaudited consolidated statement of financial
position of our Group as 30 September 2014 is set out below.
Non-current assets
Our non-current assets comprised mainly (a) plant and equipment; (b) intangible assets; (c)
investment in associate; (d) deferred tax assets; (e) other investments; and (f) club membership.
Non-current assets amounted to approximately S$5.3 million as at 30 September 2014. These
non-current assets represented approximately 13.6% of our total assets as at 30 September 2014.
These non-current assets comprised the following:
(a) Plant and equipment amounted to approximately S$1.7 million and accounted for 32.6% of
our total non-current assets as at 30 September 2014. Plant and equipment comprised
computer equipment, office equipment, furniture and fittings and office renovation;
MANAGEMENT’S DISCUSSION AND ANALYSIS OF RESULTS OF
OPERATIONS AND FINANCIAL POSITION
88
(b) Intangible assets amounted to approximately S$1.3 million and accounted for 25.2% of our
total non-current assets as at 30 September 2014. Intangible assets comprised development
costs, computer software, intellectual properties and customer lists;
(c) Investment in associate amounted to approximately S$0.4 million and accounted for 7.6% of
our total non-current assets as at 30 September 2014;
(d) Deferred tax assets amounted to approximately S$22,000 and accounted for 0.4% of our
total non-current assets as at 30 September 2014;
(e) Other investments amounted to approximately S$1.8 million and accounted for 34.0% of our
total non-current assets as at 30 September 2014. Other investments comprised our
investments in available-for-sale quoted securities; and
(f) Club membership amounted to approximately S$11,000 and accounted for 0.2% of our total
non-current assets as at 30 September 2014.
Current assets
Our current assets comprised mainly (a) current tax receivable; (b) trade and other receivables;
(c) prepayments; (d) cash at bank and in hand; and (e) money market funds. Current assets
amounted to approximately S$33.6 million as at 30 September 2014. These current assets
represented approximately 86.4% of our total assets as at 30 September 2014.
These current assets comprised the following:
(a) Current tax receivable amounted to approximately S$30,000 and accounted for 0.1% of our
total current assets as at 30 September 2014;
(b) Trade and other receivables amounted to approximately S$17.9 million and accounted for
53.3% of our total current assets as at 30 September 2014. Trade and other receivables
comprised net trade receivables, accrued revenue and deposits and other receivables which
amounted to S$7.0 million, S$8.4 million and S$2.5 million respectively;
(c) Prepayments amounted to approximately S$0.5 million and accounted for 1.5% of our total
current assets as at 30 September 2014. Prepayments comprised mainly from insurance
premium, license fees, maintenance fees and advance payment to vendors;
(d) Cash at bank and in hand amounted to approximately S$15.1 million and accounted for
45.0% of our total current assets as at 30 September 2014; and
(e) Money market funds amounted to approximately S$36,000 and accounted for 0.1% of our
total current assets as at 30 September 2014. Money market funds are considered fully liquid
investment readily convertible into known amount of cash and cash equivalents which are
subject to an insignificant risk of changes in value.
Held under trust
Some of the subsidiaries in our Group receive and hold monies deposited by DIY investors,
adviser-assisted investors and other institutions in the course of the conduct of the regulated
activities. These clients’ monies are maintained in one (1) or more trust bank accounts which are
separately maintained from the bank accounts of our Group. Depending on the banks at which
such trust bank accounts are maintained and the prevailing interest rates, the Group may earn
interest income from the monies held under trust.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF RESULTS OF
OPERATIONS AND FINANCIAL POSITION
89
Non-current liabilities
Our non-current liabilities comprise mainly (a) deferred tax liabilities and (b) other payables.
Non-current liabilities amounted to approximately S$0.3 million as at 30 September 2014. These
non-current liabilities represented approximately 1.5% of our total liabilities as at 30 September
2014.
These non-current liabilities comprised the following:
(a) Deferred tax liabilities amounted to approximately S$0.1 million and accounted for 41.4% our
total non-current liabilities as at 30 September 2014; and
(b) Other payables amounted to approximately S$0.2 million and accounted for 58.6% of our
total non-current liabilities as at 30 September 2014. Other payables comprised the
non-current portion of accrued operating expenses payable to a third party.
Current liabilities
Our current liabilities comprise mainly (a) trade and other payables and (b) current tax payable.
Current liabilities amounted to approximately S$19.9 million as at 30 September 2014. These
current liabilities represented approximately 98.5% of our total liabilities as at 30 September 2014.
These current liabilities comprised the following:
(a) Trade and other payables amounted to approximately S$19.5 million and accounted for
98.1% of our total current liabilities as at 30 September 2014. Trade and other payables
comprised trade payables, accrued operating expenses, dividend payable and deposits
received which amounted to S$2.1 million, S$10.3 million, S$6.8 million and S$0.3 million
respectively; and
(b) Current tax payable amounted to approximately S$0.4 million and accounted for 1.9% of our
total current liabilities as at 30 September 2014.
Equity attributable to owners of our Company
Equity attributable to owners of our Company comprises share capital, fair value reserve, foreign
currency translation reserve, share option reserve, equity reserve and accumulated profits.
As at 30 September 2014, our Shareholders’ equity amounted to approximately S$18.7 million.
Dividends declared and paid
Subsequent to 31 December 2013, the Board of Directors declared a final dividend in respect of
FY2013 of approximately S$1.3 million on 14 February 2014. The dividend was paid on 7 May
2014.
During 9M2014, the Board of Directors declared the first interim dividend in respect of FY2014 of
approximately S$0.8 million on 28 April 2014, which was paid on 7 May 2014. The second interim
dividend in respect of FY2014 of approximately S$1.9 million was declared on 1 August 2014 and
paid on 29 August 2014. Another interim dividend in respect of FY2014 of approximately S$6.8
million was declared on 1 September 2014 and paid on 5 November 2014.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF RESULTS OF
OPERATIONS AND FINANCIAL POSITION
90
LIQUIDITY AND CAPITAL RESOURCES
We funded our growth and operations mainly through a combination of shareholders’ equity and
cash generated from operations.
The principal uses of these funds are for working capital purposes as well as for our capital
expenditure. Our material sources of unused liquidity as at the Latest Practicable Date are our
cash at bank and in hand.
Our Group does not have any borrowings and gearing as at the Latest Practicable Date.
As at the Latest Practicable Date, we had cash at hand and in bank of approximately S$12.3
million, money market fund of approximately S$0.1 million and unutilised banking facilities of
approximately S$6.0 million.
Our Directors are of the reasonable opinion that, as at the Latest Practicable Date, after taking into
account the cash flows generated from our operations, the available banking facilities and the
existing cash at bank and in hand balances and money market funds, our Group has adequate
working capital to meet our present requirements and for twelve (12) months from the date of
listing of our Company on the Official List of the SGX-ST.
We set out below a summary of our cash flow for the period under review:
FY2011 FY2012 FY2013 9M2014
S$’000 S$’000 S$’000 S$’000
Net cash from
operating activities 1,400 2,333 7,126 7,136
Net cash from/(used in) investing
activities 3,896 624 (174) (1,763)
Net cash used in
financing activities (3,734) (1,799) (3,741) (6,934)
Net increase in cash and
cash equivalents 1,562 1,158 3,211 (1,561)
Effect of exchange rate
fluctuations on cash held (38) (229) (8) 27
Cash and cash equivalents
(1)
at
beginning of the year/period 11,063 12,587 13,516 16,719
Cash and cash equivalents
(1)
at the
end of the financial year/period 12,587 13,516 16,719 15,185
Note:
(1) The money market funds held by our Group are included as our cash and cash equivalents as they are considered
fully liquid investment readily convertible into known amount of cash and cash equivalents which are subject to an
insignificant risk of changes in value.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF RESULTS OF
OPERATIONS AND FINANCIAL POSITION
91
FY2011
Net cash from operating activities
Net cash from operating activities was approximately S$1.4 million. This comprised operating
cash flows before changes in working capital of S$1.7 million, and there was no significant change
in working capital. In addition, we received interest income of S$59,000 and there was income tax
paid of S$0.2 million and interest paid of S$0.1 million.
Net cash from investing activities
Net cash from investing activities was approximately S$3.9 million, arising mainly from the
proceeds from redemption of quoted debts securities of S$12.4 million. This was partially offset
by the cash outflows of S$1.7 million in connection with purchase of plant and equipment and
intangible assets and the purchase of available-for-sale quoted debt securities of S$6.8 million.
Net cash used in financing activities
Net cash used in financing activities was approximately S$3.7 million, mainly attributable to
dividend paid to the owners of our Company of S$0.6 million, payment on acquisition of additional
interests in subsidiaries of S$0.8 million, payment on capital reduction to non-controlling interests
of S$1.9 million and repayment of unsecured bank loan of S$1.3 million. These were partially
offset by the proceeds received from issue of shares by a subsidiary of our Group to
non-controlling interests of S$0.8 million and the proceeds received from the issue of shares by
our Company of S$64,000.
Effect of exchange rate fluctuations on cash held
Effect of exchange rate fluctuations was a decrease of approximately S$38,000 in cash and cash
equivalents. It arose mainly from the conversion of cash balances held by our Group in foreign
currencies into the Singapore dollar equivalent.
FY2012
Net cash from operating activities
Net cash from operating activities was approximately S$2.3 million. This comprised operating
cash flows before changes in working capital of S$3.1 million, and adjusted by a decrease of
working capital of S$0.6 million. The decrease in working capital was due to net cash outflows
arising from the decrease in trade and other receivables of S$0.2 million and the decrease in trade
and other payables of S$0.8 million. In addition, we received interest income of S$45,000 and
there was income tax paid of S$0.2 million and interest paid of S$72,000.
Net cash from investing activities
Net cash from investing activities was approximately S$0.6 million, arising mainly from the
proceeds from redemption of quoted debts securities and quoted equity securities of S$4.5
million. This was partially offset by the cash outflows of S$0.2 million in connection with purchase
of plant and equipment and intangible assets and the purchase of available-for-sale quoted debt
securities of S$3.7 million.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF RESULTS OF
OPERATIONS AND FINANCIAL POSITION
92
Net cash used in financing activities
Net cash used in financing activities was approximately S$1.8 million, mainly attributable to
dividend paid to the owners of our Company of S$0.7 million, payment on acquisition of additional
interests in subsidiaries of S$0.3 million and repayment of unsecured bank loan of S$1.3 million.
These were partially offset by the proceeds received from issue of shares by a subsidiary of our
Group to non-controlling interests of S$0.3 million and the proceeds received from the issue of
shares by our Company of S$0.2 million.
Effect of exchange rate fluctuations on cash held
Effect of exchange rate fluctuations was a decrease of approximately S$0.2 million in cash and
cash equivalents. It arose mainly from the conversion of cash balances held by our Group in
foreign currencies into the Singapore dollar equivalent.
FY2013
Net cash from operating activities
Net cash from operating activities was approximately S$7.1 million. This comprised operating
cash flows before changes in working capital of S$7.9 million, and adjusted by a decrease of
working capital of S$0.1 million. The decrease in working capital was due to net cash outflows
arising from the increase in trade and other receivables of S$2.5 million and the increase in trade
and other payables of S$2.4 million. In addition, we received interest income of S$40,000 and
there was income tax paid of S$0.6 million and interest paid of S$10,000.
Net cash used in investing activities
Net cash used in investing activities was approximately S$0.2 million, mainly attributable to the
purchase of plant and equipment and intangible assets of S$1.0 million, the purchase of
available-for-sale quoted debt securities of S$2.1 million and the net cash outflow arising on
disposal of discontinued operation of S$2.2 million. These were partially offset by the proceeds
received from redemption of quoted debts securities of S$5.1 million.
Net cash used in financing activities
Net cash used in financing activities was approximately S$3.7 million, mainly attributable to
dividend paid to the owners of our Company of S$3.4 million and repayment of unsecured bank
loan of S$0.7 million. These were partially offset by the proceeds received from the issue of
shares by our Company of S$0.4 million.
Effect of exchange rate fluctuations on cash held
Effect of exchange rate fluctuations was a decrease of approximately S$8,000 in cash and cash
equivalents. It arose mainly from the conversion of cash balances held by our Group in foreign
currencies into the Singapore dollar equivalent.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF RESULTS OF
OPERATIONS AND FINANCIAL POSITION
93
9M2014
Net cash from operating activities
Net cash from operating activities was approximately S$7.1 million. This comprised operating
cash flows before changes in working capital of S$8.8 million, and adjusted by a decrease of
working capital of S$1.2 million. The decrease in working capital was due to net cash outflows
arising from an increase in trade and other receivables of S$1.5 million and an increase in trade
and other payables of S$0.3 million. In addition, we received interest income of S$73,000 and
there was income tax paid of S$0.5 million.
Net cash used in investing activities
Net cash used in investing activities was approximately S$1.8 million, mainly attributable to the
purchase of plant and equipment and intangible assets of S$1.7 million, the acquisition of interest
in an associate of S$0.4 million and the purchase of available-for-sale quoted debt securities of
S$3.0 million. These were partially offset by the proceeds from redemption of available-for-sale
quoted debts securities of S$3.3 million.
Net cash used in financing activities
Net cash used in financing activities was approximately S$6.9 million, mainly attributable to
dividend paid to the owners of our Company of S$4.1 million and payment in relation to the
acquisition of additional interests in subsidiaries of S$3.5 million to non-controlling interests. This
was partially offset by the proceeds received from the issue of shares by our Company of S$0.7
million.
Effect of exchange rate fluctuations on cash held
Effect of exchange rate fluctuations was an increase of approximately S$27,000 in cash and cash
equivalents. It arose mainly from the conversion of cash balances held by our Group in foreign
currencies into the Singapore dollar equivalent.
TRADE RECEIVABLES AND TRADE PAYABLES
We accrue our revenue on commission and fee that we will receive from fund houses and
Customers on a monthly basis. We generally bill the fund houses and Customers on quarterly
basis and recognise the amount billed as trade receivables.
When we accrue our revenue on commission and fee that we will receive from fund houses and
Customers, we also accrue the corresponding portion of the commission and fee that are payable
to third party financial advisers. Upon our receipt of the commission and fee from fund houses and
Customers, the corresponding amounts of commission and fee accrued to third party financial
advisers are recognised as trade payables.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF RESULTS OF
OPERATIONS AND FINANCIAL POSITION
94
The following tables show our net trade receivables, accrued revenue, trade payables and
accrued operating expenses as at 31 December 2013 and 30 September 2014 respectively.
As at
31 December
2013
As at
30 September
2014
S$’000 S$’000
Net trade receivables 7,079 6,972
Accrued revenue 7,907 8,436
14,986 15,408
As at
31 December
2013
As at
30 September
2014
S$’000 S$’000
Trade payables 1,068 2,069
Accrued operating expenses 11,744 10,525
12,812 12,594
The following tables show the ageing of our net trade receivables and trade payables as at
31 December 2013 and 30 September 2014 respectively.
As at
31 December 2013
As at
30 September 2014
Ageing of net trade receivables: S$’000 % S$’000 %
Not past due 6,260 88.4 6,805 97.6
Past due 0 – 30 days 181 2.6 13 0.2
Past due 31 – 120 days 57 0.8 43 0.6
Past due more than 120 days but less
than 1 year 41 0.6 13 0.2
Past due more than 1 year 540 7.6 98 1.4
7,079 100.0 6,972 100.0
As at
31 December 2013
As at
30 September 2014
Ageing of trade payables: S$’000 % S$’000 %
Not past due 1,068 100.0 2,069 100.0
MANAGEMENT’S DISCUSSION AND ANALYSIS OF RESULTS OF
OPERATIONS AND FINANCIAL POSITION
95
Our Company generally grants credit terms of 30 days in relation to our receivables, and credit
terms of 30 days are generally granted to our Company in respect of our payables.
Ageing of trade receivables and trade payables as at 31 December 2013
The amounts of our trade receivables not past due, past due within 30 days, past due more than
30 days but less than 1 year, and past due more than 1 year were approximately S$6.3 million,
S$0.2 million, S$0.1 million and S$0.5 million respectively and these accounted for 88.4%, 2.6%,
1.4% and 7.6% of our trade receivables as at 31 December 2013, respectively.
The amounts of our trade payables not past due were approximately S$1.1 million, which
accounted for 100.0% of our trade payables as at 31 December 2013.
Ageing of trade receivables and trade payables as at 30 September 2014
The amounts of our trade receivables not past due, past due within 30 days, past due more than
30 days but less than 1 year, and past due more than 1 year were approximately S$6.8 million,
less than S$0.1 million, S$0.1 million and S$0.1 million respectively and these accounted for
97.6%, 0.2%, 0.8% and 1.4% of our trade receivables as at 30 September 2014 respectively.
The amounts of our trade payables not past due were approximately S$2.1 million, which
accounted for 100.0% of our trade payables as at 30 September 2014.
CAPITAL EXPENDITURE AND DIVESTMENTS
The table below sets forth the material capital expenditure and divestments made by our Group
for FY2011, FY2012, FY2013 and 9M2014 and for the period from 1 October 2014 up to the Latest
Practicable Date:
FY2011 FY2012 FY2013 9M2014
1 October 2014
up to the Latest
Practicable Date
S$’000 S$’000 S$’000 S$’000 S$’000
Capital Expenditure
Computer equipment 242 85 815 631 116
Office equipment 14 4 25 5 6
Furniture and fittings 69 1 1 7 4
Office renovation 1,365 2 3 27 21
Development costs – – – 212 77
Computer software 24 122 14 607
(1)
7
Intellectual properties – – – – –
Customer lists – – 707
(2)
– –
Total 1,714 214 1,566 1,489 231
MANAGEMENT’S DISCUSSION AND ANALYSIS OF RESULTS OF
OPERATIONS AND FINANCIAL POSITION
96
FY2011 FY2012 FY2013 9M2014
1 October 2014
up to the Latest
Practicable Date
S$’000 S$’000 S$’000 S$’000 S$’000
Divestments
Computer equipment 1 2 17 – –
Office equipment 16 – 6 – –
(3)
Furniture and fittings 7 – 5 – –
Office renovation 7 – 10 – –
(3)
Development costs – – – – –
Computer software – – 3 – –
Intellectual properties – – 77 – –
Customer lists – – – – –
Total 31 2 118 – –
Notes:
(1) Our Group acquired various computer software from third-party vendors, including the upgraded version of the
Microsoft Windows operating system, database software and investment analysis software.
(2) Our Group acquired the customer list from a third party financial institution with a cash consideration of
approximately S$707,000.
(3) Less than S$1,000.
The above capital expenditures were incurred by our Group to support our business expansion in
the countries that our Group operates in and financed mainly by funds generated from our
operations.
The divestments of approximately S$118,000 in FY2013 were mainly attributable to the
discontinued operation as a result of the Restructuring Exercise undertaken by our Company in
FY2013.
COMMITMENTS AND CONTINGENT LIABILITIES
Capital commitments
As at the Latest Practicable Date, our Group has committed to the purchase of computer
equipment and computer software up to approximately S$0.2 million.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF RESULTS OF
OPERATIONS AND FINANCIAL POSITION
97
Operating lease commitments
As at the Latest Practicable Date, our Group has operating lease commitments in respect of
non-cancellable operating leases as follows:
As at the Latest
Practicable Date
Future minimum lease payments S$’000
Within one year 4,555
Within two to five years 7,714
12,269
Our Group leases a number of office premises under operating leases. Such leases have fixed
terms ranging from three (3) to six (6) years, with some leases having an option to renew the lease
after the expiry of the initial fixed term for a further term of one (1) to two (2) years. Our Group
expects to meet our operating lease commitments using cash generated from our operations.
Contingent liabilities
Our Group does not have any material contingent liabilities as at the Latest Practicable Date.
FOREIGN EXCHANGE EXPOSURE
Our operations in foreign countries are valued in the functional currency of our operations in each
country. As our reporting currency is Singapore dollar, we translate the assets and liabilities of our
foreign operations from their respective local currency into Singapore dollar at the rate prevailing
as at the balance sheet date. Fluctuations in exchange rates will affect the reported value of our
foreign operations from period to period.
Presently, we do not have any hedging policy with respect to foreign currency exposure as we did
not have significant foreign exchange risk exposure. In future, we may hedge our material foreign
currency transactions after taking into consideration the quantum and impact of our foreign
exchange risk exposure as well as the transaction costs of any hedging policy, and the prevailing
economic and operating conditions. All proposed hedging policies will be reviewed and approved
by our Board of Directors and the Audit Committee before implementation by our Group. The
Company will seek the approval of the Board of Directors for entering into any foreign exchange
hedging transactions, and the Company will put in place adequate measures which will be
reviewed and approved by the Audit Committee, who will also monitor the implementation of the
hedging policies, including reviewing the instruments, processes and practices in accordance with
the hedging policies approved by the Board of Directors and the Audit Committee.
Please refer to the section entitled “Risk Factors – We are exposed to foreign exchange risks” in
this Prospectus for further details.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF RESULTS OF
OPERATIONS AND FINANCIAL POSITION
98
You should read this in conjunction with the section entitled “Management’s Discussion and
Analysis of Financial Condition and Results of Operations” of this Prospectus, and the sections
entitled “Audited Consolidated Financial Statements for the Financial years ended 31 December
2011, 2012 and 2013”, “Unaudited Interim Consolidated Financial Statements for the Nine Months
ended 30 September 2014” and “Unaudited Pro Forma Consolidated Financial Statements for the
Financial Year ended 31 December 2013 and the Nine Months Ended 30 September 2014” as set
out in Appendix A, Appendix B and Appendix C of this Prospectus respectively.
The following table shows our cash and cash equivalents, capitalisation and indebtedness of our
Group as at the Latest Practicable Date:
(i) on an actual basis; and
(ii) as adjusted to give effect to the issuance of 32,800,000 New Shares pursuant to the Offering
and the 19,000,000 new Shares arising from the issuance of the Cornerstone Shares and the
application of the net proceeds.
Unaudited Actual As adjusted
S$’000 S$’000
Cash and cash equivalents 12,378 57,027
Indebtedness
Current loan and borrowings
– Secured and guaranteed – –
Non-current loans and borrowings
– Secured and guaranteed – –
Total indebtedness – –
Shareholders’ equity
Share capital 11,379 60,589
(1)
Reserves 8,364 8,364
(2)
Total shareholders’ equity 19,743 68,953
Total capitalisation and indebtedness 19,743 68,953
Notes:
(1) Not adjusted for costs arising from the Offering and the issuance of the Cornerstone Shares which shall be
capitalised.
(2) Not adjusted for costs arising from the Offering which shall be recognised as an expense.
CAPITALISATION AND INDEBTEDNESS
99
As at 30 September 2014 and the Latest Practicable Date, the total banking facilities of our Group,
all of which are unutilised, are as follows:
Borrowing Subsidiary Name of Bank
Type of Credit
Facility
Amount of
facilities
granted
Amount of
facilities
utilised
iFAST Financial Standard
Chartered Bank
Overdraft S$5.0 million –
iFAST HK Standard
Chartered Bank
(Hong Kong)
Limited
Overdraft US$0.5 million
(available in
multiple
currencies)
–
iFAST Capital
Malaysia
Standard
Chartered
Bank Malaysia
Berhad
Overdraft RM1 million –
The overdraft facility granted by Standard Chartered Bank is supported by a letter of set-off over
the deposit and the balances in the name of iFAST Financial, and Standard Chartered Bank may
at any time in its sole discretion suspend the availability of prime-based funds by reason of
circumstances affecting the money market including but not limited to volatile rate fluctuations or
tight liquidity. In addition, drawings under this facility are at all times subject to the availability of
funds. The overdraft facility granted by Standard Chartered Bank Malaysia Berhad is supported
by a corporate guarantee provided by our Company for the amount of RM1 million. The overdraft
facility granted by Standard Chartered Bank (Hong Kong) Limited is available in multiple
currencies and is supported by a corporate guarantee provided by our Company for the amount
of US$1 million.
As at the Latest Practicable Date, to the best of our Directors’ knowledge, we are not in breach
of any of the terms and conditions or covenants associated with any credit arrangement or bank
loans which could materially affect our financial position and results or business operations. Since
30 September 2014 to the Latest Practicable Date, there has been no material change to our
Group’s capitalisation or indebtedness.
As at the Latest Practicable Date, we have no outstanding borrowings which are due for
repayment within the next twelve (12) months.
CAPITALISATION AND INDEBTEDNESS
100
Offering Price S$0.95
NAV
(1)
The NAV per Share based on the consolidated balance sheet of our Group as
at 30 September 2014 (“NAV per Share”):
(a) before adjusting for the estimated net proceeds from the issuance of the
Cornerstone Shares and the New Shares and based on our pre-Offering
share capital of 204,425,334 Shares
9.17 cents
(b) after adjusting for the estimated net proceeds from the issuance of the
Cornerstone Shares and the New Shares and based on our post-
Offering enlarged share capital of 256,225,334 Shares
24.74 cents
Premium of the Offering Price over our NAV per Share:
(a) before adjusting for the estimated net proceeds from the issuance of the
Cornerstone Shares and the New Shares and based on our pre-Offering
share capital of 204,425,334 Shares
936.2%
(b) after adjusting for the estimated net proceeds from the issuance of the
Cornerstone Shares and the New Shares and based on our post-
Offering enlarged share capital of 256,225,334 Shares
284.0%
Earnings
Historical EPS for FY2013 based on the audited consolidated profit
attributable to owners of our Company from continuing operations and our
pre-Offering share capital of 204,425,334 Shares
4.15 cents
Historical EPS for FY2013 based on the audited consolidated profit
attributable to owners of our Company from continuing operations, assuming
that the Service Agreement had been in effect from the beginning of FY2013,
and based on our pre-Offering share capital of 204,425,334 Shares
4.13 cents
(1)
Price earnings ratio
Historical PER for FY2013 based on the audited consolidated profit
attributable to owners of our Company from continuing operations and our
pre-Offering share capital of 204,425,334 Shares
22.9 times
Historical PER for FY2013 based on the audited consolidated profit
attributable to owners of our Company from continuing operations, assuming
that the Service Agreement had been in effect from the beginning of FY2013,
and based on our pre-Offering share capital of 204,425,334 Shares
23.0 times
(1)
Net cash from operating activities
(2)
Historical net cash from operating activities per Share for FY2013 based on
the pre-Offering share capital of 204,425,334 Shares
3.5 cents
OFFERING STATISTICS
101
Historical net cash from operating activities per Share for FY2013, assuming
that the Service Agreement had been in effect from the beginning of FY2013,
based on the pre-Offering share capital of 204,425,334 Shares
3.5 cents
(1)
Ratio of Offering Price to net operating cash flow
Ratio of Offering Price to historical net cash from operating activities per
Share for FY2013 based on the pre-Offering share capital of 204,425,334
Shares
27.3 times
Ratio of Offering Price to historical net cash from operating activities per
Share for FY2013, assuming that the Service Agreement had been in effect
from the beginning of FY2013, based on the pre-Offering share capital of
204,425,334 Shares
27.4 times
(1)
Market capitalisation
Market capitalisation based on the post-Offering share capital of 256,225,334
Shares and the Offering Price of S$0.95
S$243.4 million
Notes:
(1) Had the Service Agreement been in effect from the beginning of FY2013, our Group’s audited consolidated profit
attributable to owners of our Company from continuing operations for FY2013 would be approximately S$8,433,000
and our consolidated net cash from operating activities for FY2013 would be approximately S$7,084,000.
(2) Net cash from operating activities is defined as net cash from operating activities as set out in our audited
consolidated cash flow statements for FY2013 as set out in Appendix A of this Prospectus.
OFFERING STATISTICS
102
Dilution is the amount by which the Offering Price paid by new investors for our New Shares in the
Offering exceeds our NAV per Share after adjusting for net proceeds from the issuance of the
Cornerstone Shares and the Offering.
Our NAV (which is the amount of our total assets minus the amount of our total liabilities) as at
30 September 2014 was S$18,741,441, or 9.17 cents per Share (based on the pre-Offering share
capital of 204,425,334 Shares).
Our NAV, as adjusted for the effects of the issuance of the Cornerstone Shares and the Offering,
will be S$63,390,727 or 24.74 cents per Share (based on the post-Offering share capital of
256,225,334 Shares).
This represents an immediate increase in NAV per Share of 15.57 cents (or 169.8%) to our
existing Shareholders and an immediate dilution in NAV per Share of 70.26 cents (or 74.0%) to
new investors subscribing for New Shares in the Offering. The following table illustrates the
dilution per Share:
Cents
Offering Price per New Share 95.00
NAV per Share as at 30 September 2014 based on the pre-Offering share
capital of 204,425,334 Shares 9.17
Increase in NAV per Share attributable to existing Shareholders 15.57
NAV per Share after the issuance of the Cornerstone Shares and the
Offering 24.74
Dilution in NAV per Share to our new investors 70.26
The following table summarises the total number of Shares acquired by our Directors and
Substantial Shareholders and their Associates, the total consideration paid for such Shares and
the average price per Share during the three (3) years before the date of lodgement of this
Prospectus:
Directors and their Associates
Number of
Shares
acquired
Consideration
S$’000
Average Price
per Share
S$
Lim Chung Chun 2,629,722 1,767 0.68
Lim Wee Kian 5,326,302 3,835 0.72
Ling Peng Meng 1,896,390 1,426 0.75
Kok Chee Wai 203,400 164 0.80
Low Huan Ping 906,594 591 0.65
Yao Chih Matthias 48,000 40 0.83
Ng Loh Ken Peter 84,000 70 0.83
Neo Lay Kien 5,222,340 4,347 0.83
Accretion Investments Pte Ltd 1,192,032 715 0.60
Substantial Shareholders
and their Associates
Lim Wee Kiong 475,020 224 0.47
SPH AsiaOne Ltd 7,348,260 4,421 0.60
DILUTION
103
INTRODUCTION TO THE RESTRUCTURING
In 2013, our Company undertook and completed a restructuring exercise, where the operations of
our Group in India, comprising the distribution of unit trusts in India (“India Business”) and our
Company’s 51% owned subsidiary, iFAST India, were transferred out of our Group (the
“Restructuring”). iFAST India was a joint venture with Deutsche Asia Pacific Holdings Ltd
(“DAPH”), which held the remaining 49% of iFAST India. The India Business was carried out
through iFAST India and iFAST India’s previously wholly-owned subsidiary, iFAST Financial India
Private Limited (“IFI”).
DAPH had expressed intentions to exit the joint venture that it had established with our Company.
In addition, the India Business was loss-making and had not obtained the relevant licences for the
efficient running of an investment platform business. To facilitate the exit of DAPH and to prepare
for the Listing, our Company undertook the restructuring. Accordingly, our Company had
undertaken the Restructuring such that iFAST India and the India Business are no longer part of
our Group. Please refer to the section entitled “Interested Person Transactions and Conflict of
Interests – Potential Conflict of Interests” for further details.
RESTRUCTURING
At the extraordinary general meeting of our Company held on 12 August 2013 (the “12 August
EGM”), the Shareholders approved, inter alia, the transfer of all the shares of iFAST India held by
our Company to Pecuniam for a total consideration of S$1.699 million
(1)
(the “Sale”). Pecuniam is
a Singapore incorporated Company, and Mr. Wong Sui Jau was the sole shareholder of Pecuniam.
Mr. Wong Sui Jau was not a director of our Company at the relevant time. He was, and continues
to be, the general manager of Fundsupermart.com in Singapore, and is an Executive Officer of our
Group. The following diagram illustrates the shareholding structure prior to the Restructuring:
Mr. Wong Sui Jau
100%
Pecuniam
iFAST
iFAST India
IFI
100%
DAPH
51% 49%
Businesses in
other
jurisdictions
(2)
RESTRUCTURING EXERCISE
104
At the 12 August EGM, the Shareholders also approved:
(a) the provision of an interest-free convertible loan of S$3.332 million by our Company to
Pecuniam (the “Convertible Loan”), to fund Pecuniam’s acquisition of the entire issued and
paid up share capital of iFAST India. The Convertible Loan has a conversion price of S$1.00
per ordinary share in the capital of Pecuniam (“Pecuniam Shares”) and is convertible at the
discretion of our Company;
(b) the provision for a cash injection of S$500,000 to Pecuniam for its working capital needs so
as to minimise related party transactions between our Company and Pecuniam; and
(c) a dividend in specie amounting to a pro-rata dividend of all the Pecuniam Shares held by our
Company from time to time be declared and distributed to the Shareholders (the “Dividend
in Specie”).
Pursuant to the terms of the shareholders’ agreement dated 7 April 2008 entered into between
iFAST India, our Company and DAPH, DAPH exercised its right to tag-along to the Sale and
transferred all the shares of iFAST India held by it to Pecuniam for a total consideration of S$1.733
million
(3)
on 3 October 2013.
Notes:
(1) The consideration was determined based on a premium of 5% to the net tangible asset value of iFAST India based
on the unaudited consolidated management accounts of iFAST India as at 30 June 2013.
(2) Prior to the Restructuring, with the exception of iFAST OSK Sdn. Bhd. (now known as iFAST Malaysia), of which we
had a 61.73% shareholding interest, our other businesses in the jurisdictions in which we operate were all
wholly-owned subsidiaries. For further details on our subsidiaries, please refer to the section entitled “Group
Structure” of this Prospectus.
(3) The consideration was determined based on a premium of 5% to the net tangible asset value of iFAST India based
on the unaudited consolidated management accounts of iFAST India as at 30 June 2013 and an additional
S$100,000 pursuant to commercial negotiations between Pecuniam and DAPH.
RESTRUCTURING EXERCISE
105
On 3 October 2013, Pecuniam acquired all the shares of iFAST India from our Company and
DAPH, which was financed by a Convertible Loan from our Company to Pecuniam. On 25 October
2013, our Company exercised our right of conversion and converted the entire Convertible Loan
into approximately 3.33 million Pecuniam Shares, and also separately subscribed for a further
approximately 30.43 million Pecuniam Shares for an aggregate amount of S$500,000 to provide
for Pecuniam’s further working capital needs. The following diagram illustrates the
aforementioned changes to the shareholding structure:
iFAST
Pecuniam
iFAST India
100%
Mr. Wong Sui Jau
N.M.
(1)
IFI
100%
99.9%
Businesses in
other
jurisdictions
(2)
On 30 October 2013, our Company declared the proposed Dividend in Specie of S$3.832 million
(3)
via the pro rata distribution of all the Pecuniam Shares held by our Company to the Shareholders.
In order for Pecuniam to remain as a private company by having less than 50 shareholders, a few
other Shareholders (including Mr. Lim Chung Chun) (collectively, the “Offerees”) had concurrently
offered to purchase the Pecuniam Shares that Shareholders would have been entitled to pursuant
to the proposed Dividend in Specie. The Shareholders who had accepted the offer had
subsequently renounced their Pecuniam Shares to the respective Offerees. A total of 1,839,578
Pecuniam Shares were acquired by the Offerees for an aggregate consideration of S$183,957.80
at a price of S$0.10 per Pecuniam Share (including the 414,578 Pecuniam Shares which were
acquired by Mr. Lim Chung Chun for a consideration of S$41,457.80) (“Pecuniam Transfer”).
Notes:
(1) N.M. means not meaningful.
(2) As at 30 October 2013, with the exception of iFAST OSK Sdn. Bhd. (now known as iFAST Malaysia), of which we
had a 61.73% shareholding interest, our other businesses in the jurisdictions in which we operate were all
wholly-owned subsidiaries. For further details on our subsidiaries, please refer to the section entitled “Group
Structure” of this Prospectus.
(3) Being the aggregate of S$3.332 million and S$500,000.
RESTRUCTURING EXERCISE
106
Mr. Wong Sui Jau transferred his Pecuniam Shares to our Company on 25 October 2013 for a
consideration of S$1.00 and he subsequently resigned from the board of directors of Pecuniam on
29 November 2013.
Subsequent to the Pecunium Transfer and as at the Latest Practicable Date, iFAST India and the
India Business are owned by Pecuniam. Most of Pecuniam’s shareholders are also existing or
previous Shareholders and/or employees of our Company.
As at the Latest Practicable Date, the Substantial Shareholders of Pecuniam are set out in the
table below:
S/N Substantial Shareholder
Direct Interest Deemed Interest
Number of
Shares
Shareholding
(%)
Number of
Shares
Shareholding
(%)
1. Lim Chung Chun 8,041,711 23.82 718,178
(1)
2.13
2. SPH AsiaOne Ltd 6,120,547 18.13 – –
3. DMG & Partners Securities
Pte Ltd 3,641,504 10.79 – –
4. Lim Wee Kian 2,450,231 7.26 587,685
(2)
1.74
5. Crouzet Limited
(3)
1,748,446 5.18 – –
Notes:
(1) Mr. Lim Chung Chun is deemed to be interested in the shares held by Accretion Investments Pte Ltd and his spouse,
Mdm. Neo Lay Kien. Accretion Investments Pte Ltd is a company incorporated in the British Virgin Islands. Mr. Lim
Chung Chun and Mr. Lim Wee Kian hold 51% and 49% of the ordinary voting shares of Accretion Investments Pte
Ltd respectively.
(2) Mr. Lim Wee Kian is deemed to be interested in the shares held by Accretion Investments Pte Ltd. Accretion
Investments Pte Ltd is a company incorporated in the British Virgin Islands. Mr. Lim Chung Chun and Mr. Lim Wee
Kian hold 51% and 49% of the ordinary voting shares of Accretion Investments Pte Ltd respectively.
(3) Crouzet Limited is a company incorporated in the British Virgin Islands, and is an investment vehicle for various
current and previous employees of our Company. Crouzet Limited does not hold any shares in our Company.
RESTRUCTURING EXERCISE
107
Local shareholders in India, including employees of IFI, had purchased shares in IFI on 30
December 2013 amounting to 8.32% of the shares of IFI from iFAST India. Subsequently, an
employee stock option plan for IFI employees was created on 17 April 2014, pursuant to which
16.99% of the shares of IFI were issued. As at the Latest Practicable Date, iFAST India has a
shareholding of approximately 74.69% in IFI, and the remaining shareholders of IFI are local
shareholders in India and employees of IFI (“IFI Transfer and Subscription”). The following
diagram illustrates the shareholding structure upon completion of the Dividend in Specie, the
Pecuniam Transfer; and the IFI Transfer and Subscription:
Shareholders of
iFAST
100%
iFAST
IFI
74.69% 25.31%
Shareholders of
Pecuniam, most of
whom are also
existing or previous
Shareholders and/or
employees of iFAST
100%
Pecuniam
iFAST India
100%
Local Shareholders
in India and
employees of IFI
Businesses in
other jurisdictions i.e.
Singapore, Malaysia
and Hong Kong
(1)
Note:
(1) Immediately upon the completion of the Dividend in Specie, the Pecuniam Transfer; and the IFI Transfer and
Subscription, with the exception of iFAST OSK Sdn. Bhd. (now known as iFAST Malaysia), of which we had a
65.12% shareholding interest, our other businesses in the jurisdictions in which we operate were all wholly-owned
subsidiaries. For further details on our subsidiaries, please refer to the section entitled “Group Structure” of this
Prospectus.
As at the Latest Practicable Date, Pecuniam has 42 shareholders.
RESTRUCTURING EXERCISE
108
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109
The details of our subsidiaries and associated company as at the date of this Prospectus are as
follows:
Name of Company
Date and Country of
Incorporation
Principal Business
Activities
Principal
Place of
Business
Issued/
Registered and
Paid Up Capital
Effective
equity
interest
held by our
Company
Subsidiaries
iFAST Financial Pte
Ltd
10 January 2000,
Singapore
Marketing of
unit trusts and
securities through
website and
corporate finance
advisory services
Singapore S$8,344,123.48 100%
iFAST Nominees Pte
Ltd
(1)
27 October 2006,
Singapore
Trustee, fiduciary
and custody
services
Singapore S$2.00 100%
FA Corporate and
Compliance
Consultancy Pte Ltd
11 December 2007,
Singapore
Provision of
compliance
consultancy and
services
Singapore S$1.00 100%
iFAST Capital Ltd. 24 April 2009,
Singapore
Corporate finance
services; and other
financial service
activities (except
insurance and
pension funding)
Singapore S$1.00 100%
iFAST Financial (HK)
Limited
30 September 2005,
Hong Kong
Investment Platform
Provider and
securities distributor
Hong Kong HK$82,000,000.00 100%
iFAST Nominees
(HK) Limited
(2)
21 April 2009,
Hong Kong
Provision of
nominee services
Hong Kong HK$1.00 100%
iFAST Platform
Services (HK) Limited
25 January 2006,
Hong Kong
Regional provider of
platform services
and technologies
Hong Kong HK$152,843,037.00 100%
iFAST Platform
Services (Shenzhen)
Qianhai Limited (º
1)1´(ï¹)J((
[´+)
(3)
7 July 2014,
PRC
Undertake
outsourcing
services in
management and
maintenance of
system application,
information
technology support
management,
background
services for bank
and financial
enterprises,
software
development, data
processing and
other information
technology and
business process
outsourcing
services to provide
consultancy
services
PRC Registered capital:
RMB20,000,000.00
Paid-up capital:
RMB5,000,000.00
100%
GROUP STRUCTURE
110
Name of Company
Date and Country of
Incorporation
Principal Business
Activities
Principal
Place of
Business
Issued/
Registered and
Paid Up Capital
Effective
equity
interest
held by our
Company
iFAST Malaysia Sdn
Bhd
22 October 2007,
Malaysia
Investment holding Malaysia RM26,350,000 100%
FA Corporate and
Compliance
Consultancy Sdn
Bhd
(4)
30 May 2008,
Malaysia
Provision of
compliance
consultancy to
financial advisers
companies
Malaysia RM100,000.00 100%
iFAST Service Centre
Sdn Bhd
20 March 2006,
Malaysia
Provision of
managerial,
administrative,
consultancy and
internet related
services to our
Group
Malaysia RM2.00 100%
iFAST Capital Sdn
Bhd
(5)
1 August 2007,
Malaysia
Marketing of unit
trusts through a
website and acting
as an investment
advisor, dealer and
custodian in respect
to unit trusts
Malaysia RM26,150,000 100%
iFAST Nominees
Sdn Bhd
(6)
16 July 2008,
Malaysia
Provision of
nominee services
Malaysia RM2.00 100%
Associated Company
Providend Holding
Private Limited
(7)(8)
22 January 2009,
Singapore
Investment holding
company
Singapore S$450,900.00 19.9%
Notes:
(1) iFAST Nominees is a wholly owned subsidiary of iFAST Financial.
(2) iFAST Nominees HK is a wholly owned subsidiary of iFAST HK.
(3) iFAST China is a wholly owned subsidiary of iFAST HK.
(4) FCCC Malaysia is a wholly owned subsidiary of iFAST Malaysia.
(5) iFAST Capital Malaysia is a wholly owned subsidiary of iFAST Malaysia.
(6) iFAST Nominees Malaysia is a wholly owned subsidiary of iFAST Capital Malaysia.
(7) Please refer to the section entitled “General and Statutory Information – Material Contracts” for more details.
(8) As at 30 September 2014, the other shareholders of Providend comprises 14 individuals namely, Chin Wei-Li Audrey
Marie, Phoon Chiong Tuck, Loh Mei Kuen, Ng Lai Hong Eleanor, Koh Kuay Heng, Tey Seok Hu, Hong Xiu Luan,
Cheong Jee Meng Eddy, Tan Hian Yau, Ernest Low Ong Huat, Evelyn Goh Wee Cheng, Ng Cho Huat, Huan Nam
Guan James and Liew Hsien, Daryl.
None of our subsidiaries is listed on any stock exchange.
GROUP STRUCTURE
111
Our Company was incorporated in Singapore on 11 September 2000 under the Companies Act as
a limited exempt private company and was formerly known as “Fundsupermart Holdings Pte Ltd”
up until 26 March 2003, when our Company changed our name to “iFAST Corporation Pte. Ltd.”
On 18 November 2014, pursuant to our conversion into a public company limited by shares, we
changed our name to “iFAST Corporation Ltd.”
As at the date of incorporation, the authorised share capital of our Company was S$400,000
comprising ordinary shares of 4,000,000 shares with a par value of S$0.10 each and the issued
and paid up capital of our Company comprised 20 ordinary shares of S$0.10 each. Mr. Lim Chung
Chun and Mr. Moh Hon Meng were the initial subscribers and were issued and allotted with 10
ordinary shares each.
On 30 January 2006, the Companies (Amendment) Act 2005 came into effect to amend the
Companies Act. Such amendments included the abolishment of the concepts of par value,
authorised share capital, share premium, capital redemption reserves and share discounts.
Since the date of our Company’s incorporation, we have issued and allotted ordinary shares and
non-redeemable cumulative preference shares at various points of time. Our 105,556 non-
redeemable cumulative preference shares were converted into 950,004 ordinary shares on 24
February 2006. For further details, please refer to the section entitled “Share Capital – History of
our Shareholding” in this Prospectus.
Pursuant to resolutions passed in general meeting by our Shareholders on 20 August 2014 and
21 October 2014, our Shareholders approved, inter alia, the following:
(a) the conversion of our Company into a public company limited by shares;
(b) the adoption of our new Articles of Association;
(c) the change of our name to “iFAST Corporation Ltd.”;
(d) the Sub-division;
(e) the issuance of the New Shares pursuant to the Offering and the Cornerstone Shares
pursuant to the Cornerstone Subscription Agreements;
(f) the listing and quotation of the issued ordinary shares of our Company (including the New
Shares and the Cornerstone Shares to be issued pursuant to Resolution (e) above) on the
Official List of the SGX-ST;
(g) the authorisation of our Directors to allot and issue Shares and/or convertible securities
(where the maximum number of Shares to be issued upon conversion can be determined at
the time of issuance of such convertible securities) from time to time (whether by way of
rights, bonus or otherwise) and upon such terms and conditions and for such purposes and
to such persons as our Directors may in their absolute discretion deem fit, (notwithstanding
the authority conferred by such authority may have ceased to be in force) issue Shares in
pursuance of any instrument made or granted by our Directors while such authority was in
force, provided that the aggregate number of Shares and/or convertible securities which may
be issued pursuant to such authority shall not exceed 50% of the issued shares of our
Company, of which the aggregate number of Shares and/or convertible securities which may
be issued other than on a pro-rata basis to the existing Shareholders of our Company shall
not exceed 20% of the issued shares of our Company (the percentage of issued shares being
SHARE CAPITAL
112
based on the post-Offering issued shares of our Company after adjusting for new Shares
arising from the conversion or exercise of any convertible securities or employee share
options on issue at the time such authority is given and any subsequent consolidation or
sub-division of shares) and, unless revoked or varied by our Company in a general meeting,
such authority shall continue in force until the conclusion of the next annual general meeting
of our Company or on the date by which the next annual general meeting is required by law
to be held, whichever is earlier;
(h) the adoption of the iFAST PSP, the rules of which are set out in Appendix F of this Prospectus
and that our Directors be authorised to allot and issue Award Shares upon the vesting of
share awards granted under the iFAST PSP;
(i) the adoption of the iFAST ESOS, the rules of which are set out in Appendix G of this
Prospectus and that our Directors be authorised to allot and issue new Shares as may be
required to be issued pursuant to the exercise of Options granted under the iFAST ESOS;
and
(j) that:
1. for the purposes of the Companies Act, purchase or otherwise acquire the Shares not
exceeding in aggregate the Prescribed Limit (as hereafter de?ned), at such price(s) as
may be determined by the Directors of our Company from time to time up to the
Maximum Price (as hereafter de?ned), whether by way of:
(i) on-market purchases (“Market Purchase”), transacted on the SGX-ST or, as the
case may be, any other stock exchange on which the Shares may for the time
being listed and quoted, through one (1) or more duly licensed stockbrokers
appointed by our Company for the purpose; and/or
(ii) off-market purchases (“Off-Market Purchase”) (if effected otherwise than on the
SGX-ST) in accordance with an equal access scheme(s) as may be determined or
formulated by the Directors as they may consider ?t, which scheme(s) shall satisfy
all the conditions prescribed by the Companies Act and the Listing Manual,
and otherwise in accordance with all other provisions of the Companies Act and the
Listing Manual as may for the time being be applicable (the “Share Buy-back
Mandate”);
2. any Share that is purchased or otherwise acquired by our Company pursuant to the
Share Buy-back Mandate shall, at the discretion of the Directors of our Company, either
be cancelled or held in treasury and dealt with in accordance with the Companies Act;
3. unless varied or revoked by our Company in general meeting, have the authority
pursuant to the Share Buy-back Mandate exercisable at any time and from time to time
during the period commencing from the passing of this Resolution and expiring on the
earlier of:
(i) the date on which the next annual general meeting of our Company is held or
required by law to be held;
(ii) the date on which the share buy backs are carried out to the full extent mandated;
or
SHARE CAPITAL
113
(iii) the date on which the authority contained in the Share Buy-back Mandate is varied
or revoked;
4. in this Resolution:
“Prescribed Limit” means 10% of the issued ordinary share capital of our Company as
at the date of passing of this Resolution unless the Company has effected a reduction
of the share capital of our Company in accordance with the applicable provisions of the
Companies Act, at any time during the Relevant Period, in which event the issued
ordinary share capital of our Company shall be taken to be the amount of the issued
ordinary share capital of our Company as altered (excluding any treasury shares that
may be held by our Company from time to time);
“Relevant Period” means the period commencing from the date on which the last AGM
was held and expiring on the date the next AGM is held or is required by law to be held,
whichever is the earlier, after the date of this Resolution; and
“Maximum Price” in relation to a Share to be purchased, means an amount (excluding
brokerage, stamp duties, applicable goods and services tax and other related
expenses) not exceeding:
(i) in the case of a Market Purchase: 105% of the Average Closing Price;
(ii) in the case of an Off-Market Purchase: 120% of the Average Closing Price, where:
“Average Closing Price” means the average of the closing market prices of a Share over
the last ?ve market days, on which transactions in the Shares were recorded, preceding
the day of the Market Purchase, and deemed to be adjusted for any corporate action
that occurs after the relevant 5-day period; and
“day of the making of the offer” means the day on which our Company announces its
intention to make an offer for the purchase of Shares from shareholders of our Company
stating the purchase price (which shall not be more than the Maximum Price calculated
on the foregoing basis) for each Share and the relevant terms of the equal access
scheme for effecting the Off-Market Purchase;
5. complete and do all such acts and things (including executing such documents as may
be required) as they may consider expedient or necessary to give effect to the
transactions contemplated by this Resolution.
For further details on the Share Buy-back Mandate, please refer to the section entitled
“Information on the Share Buy-back Mandate” as set out in Appendix H of this Prospectus.
As at the Latest Practicable Date, the issued and paid-up share capital of our Company is
S$11,379,244.20 divided into 204,425,334 Shares. Upon the allotment of the New Shares which
are the subject of the Offering and the Cornerstone Shares, the resultant issued share capital of
our Company will be increased to S$58,356,516.20 comprising 256,225,334 Shares.
As at the Latest Practicable Date, we have only one (1) class of shares in the capital of our
Company. The rights and privileges of our Shares are stated in our Articles of Association. There
are no founder, management or deferred shares reserved for issuance for any purpose.
SHARE CAPITAL
114
The New Shares and the Cornerstone Shares shall have the same interest and voting rights as
our existing Shares that were issued prior to the Offering and there are no restrictions on the free
transferability of our Shares.
HISTORY OF OUR SHAREHOLDING
Between May 2003 and June 2003, we undertook an exercise to acquire iFAST Financial from its
shareholders by issuing the corresponding securities to the then shareholders, optionholders and
warrantholders of iFAST Financial in an amount equivalent to the number of shares, options and
warrants such shareholders, optionholders and warrantholders held in iFAST Financial. On
completion of such exercise, iFAST Financial became our wholly-owned subsidiary and we had a
share capital of S$2,491,322 comprising 24,913,220 Shares, 105,556 non-redeemable
cumulative preference shares, 462,963 warrants and 910,714 options to subscribe for Shares.
On 24 February 2006, the holders of the 105,556 non-redeemable cumulative preference shares
converted them into 950,004 Shares. On 17 October 2006 and 14 November 2006, the
warrantholders converted 137,869 and 303,798 warrants respectively, to an aggregate of 441,667
Shares and all holders of options exercised the 910,714 options to subscribe for 910,714 Shares.
21,296 warrants lapsed as the relevant warrantholders failed to convert them into Shares. As at
the date of this Prospectus, none of the 462,963 warrants and 910,714 options remain
outstanding.
CHANGES IN ISSUED AND PAID-UP SHARE CAPITAL OF OUR COMPANY AND OUR
SUBSIDIARIES
The shareholders’ equity of our Company as at the date of incorporation and after the issue of the
New Shares and the Cornerstone Shares, is set out below:
Shareholders’ equity
As at the date
of incorporation
S$
Immediately after
the Offering
S$
Issued and paid-up share capital 2 58,356,516
(1)
Reserves – 8,363,995
(2)
Total shareholders’ equity 2 66,720,511
Notes:
(1) Adjusted for costs arising from the Offering and the issuance of the Cornerstone Shares which shall be capitalised.
(2) Not adjusted for costs arising from the Offering which shall be recognised as an expense.
SHARE CAPITAL
115
The issued and paid-up share capital of our Company as at the date of incorporation and
immediately after the issue of the New Shares and the Cornerstone Shares, is set out below:
Event
Number of new
Shares issued
Resultant issued and
paid-up share capital
(Number of Shares)
Resultant issued
and paid-up share
capital
(S$)
Incorporation 20 20 2
Sub-division 170,354,445 204,425,334 11,379,244.20
Pre-Offering share capital – 204,425,334 11,379,244.20
Cornerstone Shares to be
issued 19,000,000 223,425,334 29,429,244.20
New Shares to be issued
pursuant to the Offering 32,800,000 256,225,334 60,589,244.20
After capitalising costs arising
from the Offering and the
issuance of the Cornerstone
Shares – 256,225,334 58,356,516.20
Post-Offering share capital – 256,225,334 58,356,516.20
There are no Shares issued that have not been fully paid-up.
Save as disclosed below, there were no changes in the issued and paid-up share capital of our
Company, and our subsidiaries within the three (3) years preceding the Latest Practicable Date:
Our Company
Date Event
Number of
Shares
issued
(1)
Issue price
(1)
(S$)
Resultant
number of
Shares
(1)
Resultant
issued share
capital
(S$)
16 March 2012 Allotment and issue 840 1.60 33,458,644 10,144,497.20
16 March 2012 Allotment and issue 5,000 1.20 33,463,644 10,150,497.20
28 May 2012 Allotment and issue 5,200 1.60 33,468,844 10,158,817.20
29 August 2012 Allotment and issue 5,000 0.70 33,473,844 10,162,317.20
29 August 2012 Allotment and issue 30,000 1.20 33,503,844 10,198,317.20
29 August 2012 Allotment and issue 36,310 1.60 33,540,154 10,256,413.20
27 November 2012 Allotment and issue 15,000 1.20 33,555,154 10,274,413.20
27 November 2012 Allotment and issue 18,500 1.60 33,573,654 10,304,013.20
12 March 2013 Allotment and issue 5,000 1.20 33,578,654 10,310,013.20
12 March 2013 Allotment and issue 9,000 1.60 33,587,654 10,324,413.20
12 March 2013 Allotment and issue 4,000 2.40 33,591,654 10,334,013.20
27 May 2013 Allotment and issue 6,000 1.20 33,597,654 10,341,213.20
27 May 2013 Allotment and issue 20,250 1.60 33,617,904 10,373,613.20
27 May 2013 Allotment and issue 10,600 2.40 33,628,504 10,399,053.20
1 August 2013 Allotment and issue 5,400 0.49 33,633,904 10,401,699.20
SHARE CAPITAL
116
Date Event
Number of
Shares
issued
(1)
Issue price
(1)
(S$)
Resultant
number of
Shares
(1)
Resultant
issued share
capital
(S$)
1 August 2013 Allotment and issue 21,000 0.70 33,654,904 10,416,399.20
1 August 2013 Allotment and issue 9,000 1.20 33,663,904 10,427,199.20
1 August 2013 Allotment and issue 18,260 1.60 33,682,164 10,456,415.20
1 August 2013 Allotment and issue 11,200 1.96 33,693,364 10,478,367.20
1 August 2013 Allotment and issue 40,000 2.01 33,733,364 10,558,767.20
1 August 2013 Allotment and issue 25,300 2.40 33,758,664 10,619,487.20
15 November 2013 Allotment and issue 17,305 0.70 33,775,969 10,631,600.70
15 November 2013 Allotment and issue 10,100 1.60 33,786,069 10,647,760.70
15 November 2013 Allotment and issue 4,000 1.96 33,790,069 10,655,600.70
15 November 2013 Allotment and issue 6,000 2.40 33,796,069 10,670,000.70
22 January 2014 Allotment and issue 1,800 1.96 33,797,869 10,673,528.70
22 January 2014 Allotment and issue 2,100 2.40 33,799,969 10,678,568.70
24 February 2014 Allotment and issue 2,500 1.20 33,802,469 10,681,568.70
24 February 2014 Allotment and issue 1,000 1.96 33,803,469 10,683,528.70
24 February 2014 Allotment and issue 6,000 2.40 33,809,469 10,697,928.70
22 April 2014 Allotment and issue 500 1.20 33,809,969 10,698,528.70
22 April 2014 Allotment and issue 14,725 1.60 33,824,694 10,722,088.70
22 April 2014 Allotment and issue 5,000 1.96 33,829,694 10,731,888.70
22 April 2014 Allotment and issue 19,200 2.40 33,848,894 10,777,968.70
25 April 2014 Allotment and issue 20,000 2.80 33,868,894 10,833,968.70
2 May 2014 Allotment and issue 3,000 2.40 33,871,894 10,841,168.70
25 August 2014 Allotment and issue 2,100 0.49 33,873,994 10,842,197.70
25 August 2014 Allotment and issue 28,695 0.70 33,902,689 10,862,284.20
25 August 2014 Allotment and issue 2,000 1.20 33,904,689 10,864,684.20
25 August 2014 Allotment and issue 26,000 1.60 33,930,689 10,906,284.20
25 August 2014 Allotment and issue 8,000 1.96 33,938,689 10,921,964.20
25 August 2014 Allotment and issue 32,200 2.40 33,970,889 10,999,244.20
5 September 2014 Allotment and issue 100,000 3.80 34,070,889 11,379,244.20
20 November 2014 Sub-division of
every one (1) Share
into six (6) Shares
170,354,445
(2)
– 204,425,334 11,379,224.20
Notes:
(1) This is on a pre-subdivision basis.
(2) Additional number of Shares to be issued as a result of the Sub-division.
SHARE CAPITAL
117
Our Subsidiaries
Subsidiary Date Event
Number
of Shares
issued
Issue
price per
Share
Resultant
number of
Shares
Resultant
issued share
capital
iFAST
Financial (HK)
Ltd
30 April 2012 Allotment to
iFAST
Corporation
Pte. Ltd.
4,000,000 HK$1 79,000,000 HK$79,000,000
4 August 2014 Allotment to
iFAST
Corporation
Pte. Ltd.
3,000,000 HK$1 82,000,000 HK$82,000,000
iFAST
Platform
Services (HK)
Limited
18 January
2012
Allotment to
iFAST
Corporation
Pte. Ltd.
3,000,000 HK$1 152,843,037 HK$152,843,037
iFAST
Platform
Services
(Shenzhen)
Qianhai
Limited
(1)
18 August
2014
Allotment to
iFAST Financial
(HK) Limited
5,000,000 RMB1 5,000,000 RMB5,000,000
iFAST
Malaysia Sdn
Bhd
(3)
30 November
2011
Allotment to
iFAST
Corporation
Pte. Ltd.
1,000,000 RM1 22,000,000 RM22,000,000
29 February
2012
Allotment to
iFAST
Corporation
Pte. Ltd.
1,000,000 RM1 23,000,000 RM23,000,000
21 September
2012
Allotment to
OSK Investment
Bank Berhad
700,000 RM1 23,700,000 RM23,700,000
27 December
2013
Allotment to
iFAST
Corporation
Pte. Ltd.
2,300,000 RM1 26,000,000 RM26,000,000
6 August 2014 Allotment to
iFAST
Corporation
Pte. Ltd.
350,000 RM1 26,350,000 RM26,350,000
iFAST Capital
Sdn Bhd
(2)
30 November
2011
Allotment to
iFAST-OSK
Sdn Bhd
1,000,000 RM1 22,000,000 RM22,000,000
29 February
2012
Allotment to
iFAST-OSK
Sdn Bhd
1,000,000 RM1 23,000,000 RM23,000,000
28 June 2012 Allotment to
iFAST-OSK
Sdn Bhd
500,000 RM1 23,500,000 RM23,500,000
SHARE CAPITAL
118
Subsidiary Date Event
Number
of Shares
issued
Issue
price per
Share
Resultant
number of
Shares
Resultant
issued share
capital
28 August
2012
Allotment to
iFAST-OSK
Sdn Bhd
500,000 RM1 24,000,000 RM24,000,000
27 November
2012
Allotment to
iFAST-OSK
Sdn Bhd
500,000 RM1 24,500,000 RM24,500,000
31 January
2013
Allotment to
iFAST-OSK
Sdn Bhd
500,000 RM1 25,000,000 RM25,000,000
28 March
2013
Allotment to
iFAST-OSK
Sdn Bhd
500,000 RM1 25,500,000 RM25,500,000
20 August
2013
Allotment to
iFAST-OSK
Sdn Bhd
300,000 RM1 25,800,000 RM25,800,000
29 January
2014
Allotment to
iFAST-OSK
Sdn Bhd
150,000 RM1 25,950,000 RM25,950,000
2 May 2014 Allotment to
iFAST-OSK
Sdn Bhd
200,000 RM1 26,150,000 RM26,150,000
Notes:
(1) iFAST China is a wholly owned subsidiary of iFAST HK.
(2) iFAST Capital Malaysia is a wholly owned subsidiary of iFAST Malaysia.
(3) iFAST Malaysia Sdn Bhd was formerly known as iFAST-OSK Sdn. Bhd.
HISTORY OF OUR SHARE OPTION SCHEMES
2003 ESOS
On 3 May 2000, iFAST Financial implemented an employee share option scheme for its
employees. Following our acquisition of the entire issued share capital of iFAST Financial, we had
on 28 March 2003, implemented the 2003 ESOS for eligible employees of our Group.
As at the Latest Practicable Date and prior to adjustments arising from the Sub-division
undertaken in conjunction with the Offering, an aggregate of 4,479,753 options were granted
under the 2003 ESOS to 113 participants, of which 3,432,136 options were exercised and
3,432,136 Shares were issued pursuant to the exercise of these options, and 818,867 options
granted under the 2003 ESOS have lapsed. Following the Sub-division undertaken in conjunction
with the Offering, adjustments were made to the number of outstanding options and the exercise
price of each option and as at the Latest Practicable Date, 1,372,500 options granted under the
2003 ESOS remain outstanding. These outstanding options will entitle the holders of these
options to subscribe for 1,372,500 Shares representing approximately 0.54 per cent. of our
post-Offering share capital. The options typically vest over a two-year or three-year period
provided the employee continues to be employed by us unless varied by the Remuneration
Committee and the Shareholders. Each option granted under the 2003 ESOS entitles the holder
thereof to subscribe for one (1) Share at the exercise price.
SHARE CAPITAL
119
2013 ESOS
On 23 May 2013, we obtained shareholders’ approval in general meeting to establish and
implement the 2013 ESOS for eligible employees of our Group and terminate the 2003 ESOS.
As at the Latest Practicable Date and prior to adjustments arising from the Sub-division
undertaken in conjunction with the Offering, an aggregate of 2,229,979 options were granted
under the 2013 ESOS to 134 participants, of which 160,000 options were exercised and 160,000
Shares were issued pursuant to the exercise of these options, and 110,063 options granted under
the 2013 ESOS have lapsed. Following the Sub-division undertaken in conjunction with the
Offering, adjustments were made to the number of outstanding options and the exercise price of
each option and as at the Latest practicable Date, 11,759,496 options granted under the 2013
ESOS remain outstanding. These outstanding options will entitle the holders of these options to
subscribe for 11,759,496 Shares representing approximately 4.59 per cent. of our post-Offering
share capital. The options typically vest over a three-year period provided the employee continues
to be employed by us unless varied by the Remuneration Committee and the Shareholders. Each
option granted under the 2013 ESOS entitles the holder thereof to subscribe for one (1) Share at
the exercise price.
As at the date of this Prospectus, Options have been granted to employees and directors of our
Group pursuant to the 2003 ESOS and the 2013 ESOS. The details of Options granted to our
Directors, as adjusted for the Sub-division undertaken in conjunction with the Offering, are set out
below. Save for Mr. Lim Chung Chun, no Options were granted to our Controlling Shareholders,
their associates and the associates of our Directors.
Directors
Number of
Options granted
(1)
Date of grant
Number of
Options exercised
and shares issued
upon exercise
Lim Chung Chun 514,566 30 May 2003 514,566
300,000 1 July 2014 300,000
900,000 21 August 2014 600,000
Lim Wee Kian 150,000 1 January 2007 150,000
240,000 1 July 2013 –
120,000 1 April 2014 –
Low Huan Ping 240,000 1 July 2013 240,000
120,000 1 April 2014 120,000
Yao Chih Matthias 120,000 1 April 2014 –
Ling Peng Meng 150,000 1 January 2007 150,000
240,000 1 July 2013 –
120,000 1 April 2014 –
SHARE CAPITAL
120
Directors
Number of
Options granted
(1)
Date of grant
Number of
Options exercised
and shares issued
upon exercise
Kok Chee Wai 120,000 1 April 2014 –
Ng Loh Ken Peter 120,000 1 April 2014 –
Note:
(1) Each option granted under the 2003 ESOS and 2013 ESOS entitles the holder thereof to subscribe for one (1) Share
at the exercise price.
After the Listing, our Company will not be issuing any more Options under the 2003 ESOS and the
2013 ESOS, and instead will issue Options under the iFAST ESOS. The 2003 ESOS and 2013
ESOS will be terminated without prejudice to the rights accrued to Options which have been
granted and accepted in accordance with the 2003 ESOS or 2013 ESOS. As at the Latest
Practicable Date, save for the Options and the Over-allotment Option, to the best of the knowledge
of our Directors, no person has been, or is permitted to be, given an option to subscribe for or
purchase any securities of our Company or any of our subsidiaries. As at the Latest Practicable
Date, save for the Options and the Over-allotment Option, to the best of the knowledge of our
Directors, no option to subscribe for Shares in our Company has been granted to, or was
exercised by, any of our Directors or Executive Officers. Please refer to Appendix G for the rules
of the iFAST ESOS.
As at the Latest Practicable Date (after adjustment for the Sub-division undertaken in conjunction
with the Offering), Options in respect of an aggregate of 13,131,996 Shares (representing 5.13%
of the issued share capital of our Company immediately after the Offering and the issuance of the
Cornerstone Shares) have been granted to 147 individuals and remain outstanding under 2003
ESOS and the 2013 ESOS. All of the outstanding Options were granted to employees and/or
directors of our Group. The aggregate vesting expenses to be recognised from 4Q2014 to 2017
for these Options will amount to approximately S$1.0 million. Details of outstanding Options
granted to Directors and Executive Officers, including the exercise price payable upon exercise of
such outstanding Options, the date of grant and the expiry date are set out below (after adjustment
for the Sub-division undertaken in conjunction with the Offering). The consideration for the
Options granted under the 2003 ESOS and 2013 ESOS is S$1.00.
Option Holders
Number of
Shares (in
respect of the
outstanding
Options)
Exercise price
(S$)
Period During
which the Option
is Exercisable Expiration Date
Directors
Lim Chung Chun 300,000 0.63 21 August 2014 to
20 August 2024
20 August 2024
Lim Wee Kian 240,000 0.42 1 July 2016 to
30 June 2023
30 June 2023
120,000 0.60 1 April 2017 to
31 March 2024
31 March 2024
SHARE CAPITAL
121
Option Holders
Number of
Shares (in
respect of the
outstanding
Options)
Exercise price
(S$)
Period During
which the Option
is Exercisable Expiration Date
Yao Chih Matthias 120,000 0.60 1 April 2017 to
31 March 2024
31 March 2024
Ling Peng Meng 240,000 0.42 1 July 2016 to
30 June 2023
30 June 2023
120,000 0.60 1 April 2017 to
31 March 2024
31 March 2024
Kok Chee Wai 120,000 0.60 1 April 2017 to
31 March 2024
31 March 2024
Ng Loh Ken Peter 120,000 0.60 1 April 2017 to
31 March 2024
31 March 2024
Executive Officers (excluding Lim Chung Chun)
Wong Soon Shyan 150,000 0.12 1 July 2008 to
30 June 2016
30 June 2016
60,000 0.27 1 July 2011 to
30 Jun 2019
30 June 2019
60,000 0.40 1 July 2012 to
30 Jun 2020
30 June 2020
246,000 0.42 1 July 2016 to
30 June 2023
30 June 2023
60,000 0.60 1 April 2017 to
31 March 2024
31 March 2024
Leung Fung Yat
David
18,000 0.33 1 April 2009 to
31 March 2017
31 March 2017
60,000 0.40 1 July 2012 to
30 Jun 2020
30 June 2020
126,000 0.42 1 July 2016 to
30 June 2023
30 June 2023
60,000 0.60 1 April 2017 to
31 March 2024
31 March 2024
Lim Wee Kiong 60,000 0.27 1 July 2011 to
30 June 2019
30 June 2019
60,000 0.40 1 July 2012 to
30 June 2020
30 June 2020
126,000 0.42 1 July 2016 to
30 June 2023
30 June 2023
60,000 0.60 1 April 2017 to
31 March 2024
31 March 2024
Wong Sui Jau 126,000 0.42 1 July 2016 to
30 June 2023
30 June 2023
60,000 0.60 1 April 2017 to
31 March 2024
31 March 2024
SHARE CAPITAL
122
Option Holders
Number of
Shares (in
respect of the
outstanding
Options)
Exercise price
(S$)
Period During
which the Option
is Exercisable Expiration Date
Dennis Tan Yik Kuan 60,000 0.40 1 July 2012 to
30 June 2020
30 June 2020
126,000 0.42 1 July 2016 to
30 June 2023
30 June 2023
60,000 0.60 1 April 2017 to
31 March 2024
31 March 2024
Kelvin Yip 126,000 0.42 1 July 2016 to
30 June 2023
30 June 2023
60,000 0.60 1 April 2017 to
31 March 2024
31 March 2024
Other employees
and previous
directors
9,000 0.12 1 July 2008 to
30 June 2016
30 June 2016
174,000 0.20 1 January 2009 to
31 December
2016
31 December 2016
24,000 0.33 1 April 2009 to
31 March 2017
31 March 2017
173,100 0.27 1 July 2011 to
30 June 2019
30 June 2019
464,400 0.40 1 July 2012 to
30 June 2020
30 June 2020
5,385,612 0.42 1 July 2016 to
30 June 2023
30 June 2023
120,000 0.60 1 April 2017 to
31 March 2024
31 March 2024
3,610,884 0.60 1 July 2017 to
30 June 2024
30 June 2024
120,000 0.63 21 August 2014
to 20 August 2024
20 August 2024
Total 13,224,996
SHARE MATCHING EXERCISE
We held a quarterly share matching exercise to provide eligible employees under our employee
share option schemes with opportunities to exit their shareholdings obtained from their respective
grant and exercise of share options. We facilitated the quarterly share matching exercise by
matching Shareholders who to wish sell their shares with persons willing to acquire such shares
for an agreed price. As of the Latest Practicable Date, we no longer hold such quarterly share
matching exercises.
SHARE CAPITAL
123
Our Directors and Substantial Shareholders as well as their respective shareholdings immediately
before the Offering and immediately after the Offering are set out below (assuming our Directors
and Substantial Shareholders do not subscribe for New Shares under the Offering):
Before the Offering After the Offering
Direct Interest Deemed Interest Direct Interest Deemed Interest
Directors
No. of
Shares %
No. of
Shares %
No. of
Shares %
No. of
Shares %
Lim Chung Chun 46,967,964 22.98 11,134,380
(1)
5.45
(1)
46,967,964 18.33 11,134,380
(1)
4.35
(1)
Lim Wee Kian 18,837,120 9.21 4,201,458
(2)
2.06
(2)
18,837,120 7.35 4,201,458
(2)
1.64
(2)
Ling Peng Meng 10,493,580 5.13 – – 10,493,580 4.10 – –
Kok Chee Wai 1,243,428 0.61 – – 1,243,428 0.49 – –
Low Huan Ping
(4)
906,594 0.44 – – 906,594 0.35 – –
Yao Chih Matthias 48,000 0.02 – – 48,000 0.02 – –
Ng Loh Ken Peter 84,000 0.04 – – 84,000 0.03 – –
Directors of other
iFAST entities 9,357,732 4.58 – – 9,357,732 3.65 – –
Substantial/Controlling
Shareholders
Neo Lay Kien 932,922 0.46 52,967,964
(3)
25.91
(3)
932,922 0.36 52,967,964
(3)
20.67
(3)
SPH AsiaOne Ltd
(4)
40,680,642 19.90 – – 40,680,642 15.88 – –
SPH
(4)
– – 40,680,642 19.90 – – 40,680,642 15.88
Other Shareholders
Accretion Investments
Pte Ltd
(6)
4,201,458 2.06 – – 4,201,458 1.64 – –
RHB Bank Nominees
Pte Ltd
(5)
6,000,000 2.94 – – 6,000,000 2.34 – –
Public
Existing Public
Shareholders
(7)
64,671,894 31.64 – – 64,671,894 25.24 – –
Public Shareholders
arising from the
Offering and the
issuance of the
Cornerstone Shares
(8)
– – – – 51,800,000 20.22 – –
Total Share Capital 204,425,334 100.00 256,225,334 100.00
Notes:
(1) Mr. Lim Chung Chun is deemed interested in our Shares held by Accretion Investments Pte Ltd, RHB Bank
Nominees Pte Ltd and his spouse, Mdm. Neo Lay Kien.
(2) Mr. Lim Wee Kian is deemed interested in our Shares held by Accretion Investments Pte Ltd.
(3) Mdm. Neo Lay Kien is deemed interested in our Shares held by RHB Bank Nominees Pte Ltd and her spouse, Mr.
Lim Chung Chun.
(4) SPH AsiaOne is a wholly-owned subsidiary of SPH, a Singapore-incorporated company listed on the Mainboard of
the SGX-ST. Accordingly, SPH is deemed to be interested in our Shares held by SPH AsiaOne. SPH AsiaOne’s
principal activity is holding investments. SPH AsiaOne acquired its stake in our Company in 2000 and is a long-term
passive investor of our Company. Mr. Low Huan Ping, a non-executive non-independent director of our Company,
is a nominee director of SPH AsiaOne. SPH, SPH AsiaOne and Mr. Low Huan Ping are not involved in the day-to-day
management of our Group.
(5) Mr. Lim Chung Chun and Mdm. Neo Lay Kien had pledged 6,000,000 Shares to RHB Bank Nominees Pte Ltd, and
they are deemed interested in the 6,000,000 Shares held by RHB Bank Nominees Pte Ltd.
SHAREHOLDERS
124
(6) Accretion Investments Pte Ltd is a company incorporated in the British Virgin Islands. Mr. Lim Chung Chun and Mr.
Lim Wee Kian hold 51% and 49% of the ordinary voting shares of Accretion Investments Pte Ltd respectively.
Accretion Investments Pte Ltd’s holders of preference shares (which do not carry voting rights) are Mr. Lim Chung
Chun, his spouse, Mdm. Neo Lay Kien, Mr. Lim Wee Kian and such other individuals unrelated to our Directors.
(7) Included in the shareholdings of existing public shareholders are 16,783,026 shares which are under moratorium.
Adjusting for these 16,783,026 shares, shares held by existing public shareholders would account for approximately
18.69% of our Company’s post-Offering share capital.
(8) The Cornerstone Investors are FIL Investment Management (Hong Kong) Limited and OWW Investments III Limited.
Our Directors and Substantial Shareholders as well as their respective shareholdings immediately
before the Offering and immediately after the Offering are set out below to illustrate the maximum
exercise scenario of our outstanding Options and Over-allotment Option (assuming Directors and
Substantial Shareholders are not subscribing to the Offering:
Before the Offering
After the Offering
(assuming that the outstanding
Options and Over-allotment
Option are fully exercised)
Direct Interest Deemed Interest Direct Interest Deemed Interest
Directors
No. of
Shares %
No. of
Shares %
No. of
Shares %
No. of
Shares %
Lim Chung Chun 46,967,964 22.98 11,134,380
(1)
5.45
(1)
47,267,964 17.34 11,134,380
(1)
4.08
(1)
Lim Wee Kian 18,837,120 9.21 4,201,458
(2)
2.06
(2)
19,197,120 7.04 4,201,458
(2)
1.54
(2)
Ling Peng Meng 10,493,580 5.13 – – 10,853,580 3.98 – –
Kok Chee Wai 1,243,428 0.61 – – 1,363,428 0.50 – –
Low Huan Ping
(4)
906,594 0.44 – – 906,594 0.33 – –
Yao Chih Matthias 48,000 0.02 – – 168,000 0.06 – –
Ng Loh Ken Peter 84,000 0.04 – – 204,000 0.07 – –
Directors of other iFAST
entities 9,357,732 4.58 – – 12,383,232 4.54 – –
Substantial/Controlling
Shareholders
Neo Lay Kien 932,922 0.46 52,967,964
(3)
26.00
(3)
932,922 0.34 53,267,964
(3)
19.54
(3)
SPH AsiaOne Ltd
(4)
40,680,642 19.90 – – 40,680,642 14.92 – –
SPH
(4)
– – 40,680,642 19.90 – – 40,680,642 14.92
Other Shareholders
Accretion Investments
Pte Ltd
(6)
4,201,458 2.06 – – 4,201,458 1.54 – –
RHB Bank Nominees Pte
Ltd
(5)
6,000,000 2.94 – – 6,000,000 2.20 – –
Public
Existing Public
Shareholders
(7)
64,671,894 31.64 – – 73,398,390 26.92 – –
Public Shareholders
arising from the Offering
and the issuance of the
Cornerstone Shares
(8)
– – – – 55,080,000 20.20 – –
Total Share Capital 204,425,334 100.00 272,637,330 100.00
SHAREHOLDERS
125
Notes:
(1) Mr. Lim Chung Chun is deemed interested in our Shares held by Accretion Investments Pte Ltd, RHB Bank
Nominees Pte Ltd and his spouse, Mdm. Neo Lay Kien.
(2) Mr. Lim Wee Kian is deemed interested in our Shares held by Accretion Investments Pte Ltd.
(3) Mdm. Neo Lay Kien is deemed interested in our Shares held by RHB Bank Nominees Pte Ltd and her spouse, Mr.
Lim Chung Chun.
(4) SPH AsiaOne is a wholly-owned subsidiary of SPH, a Singapore-incorporated company listed on the Mainboard of
the SGX-ST. Accordingly, SPH is deemed to be interested in our Shares held by SPH AsiaOne. SPH AsiaOne’s
principal activity is holding investments. SPH AsiaOne acquired its stake in our Company in 2000 and is a long-term
passive investor of our Company. Mr. Low Huan Ping, a non-executive non-independent director of our Company,
is a nominee director of SPH AsiaOne. SPH, SPH AsiaOne and Mr. Low Huan Ping are not involved in the day-to-day
management of our Group.
(5) Mr. Lim Chung Chun and Mdm. Neo Lay Kien had pledged 6,000,000 Shares to RHB Bank Nominees Pte Ltd, and
they are deemed interested in the 6,000,000 Shares held by RHB Bank Nominees Pte Ltd.
(6) Accretion Investments Pte Ltd is a company incorporated in the British Virgin Islands. Mr. Lim Chung Chun and Mr.
Lim Wee Kian hold 51% and 49% of the ordinary voting shares of Accretion Investments Pte Ltd respectively.
Accretion Investments Pte Ltd’s holders of preference shares (which do not carry voting rights) are Mr Lim Chung
Chun, his spouse, Mdm. Neo Lay Kien, Mr. Lim Wee Kian and such other individuals unrelated to our Directors.
(7) Included in the shareholdings of existing public shareholders are 16,783,026 shares which are under moratorium.
Adjusting for these 16,783,026 shares, shares held by existing public shareholders would account for approximately
20.77% of our Company’s post-Offering share capital.
(8) The Cornerstone Investors are FIL Investment Management (Hong Kong) Limited and OWW Investments III Limited.
To the best knowledge of our Directors, there is no known arrangement, the operation of which
may, at a subsequent date, result in a change of control of our Company.
Save as disclosed in this Prospectus, to the best of the knowledge of our Directors, our Company
is not directly or indirectly owned or controlled by any corporation, government or other natural or
legal person, whether severally or jointly.
CORNERSTONE INVESTORS
Concurrent but separate from the Offering, each of the Cornerstone Investors has entered into a
Cornerstone Subscription Agreement with our Company to subscribe for an aggregate of
19,000,000 Cornerstone Shares at the Offering Price, conditional upon, inter alia, the
Management and Underwriting Agreement having been entered into, and not having been
terminated pursuant to its terms on or prior to the date of Listing.
Details of the Cornerstone Investors are as set out below:
FIL Investment Management (Hong Kong) Limited
FIL Investment Management (Hong Kong) Limited, acting as professional fiduciary for certain
accounts, is incorporated in Hong Kong. Its principal business activity is asset management.
OWW Investments III Limited
OWW Capital Partners, fund manager of OWW Investments III Limited, is a Singapore-based
private equity investment firm that focuses on investments in infocomm technology, logistics,
education/training, healthcare, financial services and consumer services sectors. OWW Capital
Partners has invested in a number of B2B and B2C IT companies in South-east Asia and China.
SHAREHOLDERS
126
SIGNIFICANT CHANGES IN PERCENTAGE OF OWNERSHIP
Save as disclosed below, there has been no change in the percentage of ownership of Shares
held by our Directors, Controlling Shareholders and Substantial Shareholders in the Period Under
Review up to the Latest Practicable Date:
As at
31 December 2011
As at
31 December 2012
As at
31 December 2013
As at the Latest
Practicable Date
Directors
Number of
Shares
held %
Number of
Shares
held %
Number of
Shares
held %
Number of
Shares
held %
Lim Chung Chun 45,271,164 22.55 45,271,164 22.47 46,296,492 22.83 46,967,964 22.98
Lim Wee Kian 14,145,276 7.05 14,601,834 7.25 14,932,548 7.36 18,837,120 9.21
Ling Peng Meng 8,597,190 4.28 8,74,7190 4.34 8,945,304 4.41 10,493,580 5.13
Kok Chee Wai 1,040,028 0.52 1,040,028 0.52 1,061,604 0.52 1,243,428 0.61
Low Huan Ping – 0.00 – 0.00 243,774 0.12 906,594 0.44
Yao Chih Matthias – 0.00 – 0.00 – 0.00 48,000 0.02
Ng Loh Ken Peter – 0.00 – 0.00 – 0.00 84,000 0.04
Substantial/Controlling
Shareholders
SPH AsiaOne Ltd 34,897,392 17.38 36,474,618 18.11 37,300,716 18.39 40,680,642 19.90
Note: The percentage ownership of Shares held by our Directors, Controlling Shareholders and Substantial Shareholders
in the table above does not include the deemed interests (if any) of such Directors, Controlling Shareholders or
Substantial Shareholders.
MORATORIUM
To demonstrate their commitment to our Group, certain Shareholders have agreed with the Joint
Issue Managers, Bookrunners and Underwriters, from the Listing Date until the date falling six (6)
months after the Listing Date (both dates inclusive) (the “Moratorium Period”), to subject all or
a part of their shareholding held at the time of Listing (as the case may be) to certain moratorium
arrangements. Further details of the moratorium arrangements are set out below.
The aggregate number of Shares which will be moratorised are as follows:
Number of Shares under
moratorium
Percentage of
enlarged share capital
immediately after the
Offering
Percentage of
enlarged share capital
immediately after the
Offering (assuming the
outstanding Options
are fully exercised)
157,701,647 61.55% 57.84%
Controlling Shareholders and Directors
To demonstrate their commitment to our Group, our Controlling Shareholder Mr. Lim Chung Chun,
Mdm. Neo Lay Kien, Accretion Investments Pte Ltd and SPH AsiaOne, together with its holding
company SPH, and the rest of our Directors, who hold or have an interest in an aggregate of
130,395,708 Shares, representing approximately 50.9% of our issued share capital immediately
after the Offering, have each agreed with the Joint Issue Managers, Bookrunners and
Underwriters that they will not without the prior written consent of the Joint Issue Managers,
SHAREHOLDERS
127
Bookrunners and Underwriters, for the Moratorium Period, directly or indirectly, in respect of all
their Shares held or in which they have an interest at the time of Listing (including any DMG Sale
Shares):
(a) offer, pledge (save for 6,000,000 Shares pledged to RHB Bank Nominees Pte Ltd (the
“Pledgee”) by Mr. Lim Chung Chun and Mdm. Neo Lay Kien as at the Latest Practicable
Date, provided there is no enforcement of the aforementioned pledged shares by the
Pledgee during the Moratorium Period), sell, contract to sell, sell any option or contract to
purchase, purchase any option or contract to sell grant any option, right or warrant to
purchase, lend, hypothecate or encumber or otherwise transfer or dispose of, any of their
Shares (including any interests or securities convertible into or exchangeable for any Shares
or which carry rights to subscribe for or purchase any Shares);
(b) enter into any swap, hedge or other arrangement that transfers to another, in whole or in part,
any of the economic consequences of ownership of the Shares or any interests or securities
convertible into or exercisable or exchangeable for or which carry rights to subscribe or
purchase any Shares, whether such swap, hedge or other arrangement is to be settled by
delivery of Shares or other securities, in cash or otherwise;
(c) deposit any of their Shares (including any interests or securities convertible into or
exercisable or exchangeable for, or which carry rights to subscribe for or purchase any
Shares) in any depository receipt facilities, whether any such transaction is to be settled by
delivery of Shares or other securities, in cash or otherwise;
(d) enter into any transaction or other arrangement having an economic effect similar, in whole
or in part, to the foregoing (a), (b) or (c); or
(e) offer to, or agree to, or publicly announce any intention to do any of the above.
The foregoing restrictions do not apply to the Shares which are lent by Mr. Lim Chung Chun to the
Stabilising Manager under the Share Lending Agreement provided that the restrictions shall apply
to the Shares returned to Mr. Lim Chung Chun pursuant to the Share Lending Agreement.
Shareholders of Accretion Investments Pte Ltd
Mr. Lim Chung Chun and Mr. Lim Wee Kian holds 51% and 49% of the voting shares of Accretion
Investments Pte Ltd respectively, and Mr. Lim Chung Chun, his spouse, Mdm. Neo Lay Kien, Mr.
Lim Wee Kian also hold preference shares (which does not carry voting rights) of Accretion
Investments Pte Ltd (such preference shares together with the voting shares, the “Accretion
Shares”). Accretion Investments Pte Ltd in turn holds 4,201,458 Shares representing
approximately 1.64% of our issued share capital immediately after the Offering.
Mr. Lim Chung Chun, his spouse, Mdm. Neo Lay Kien and Mr. Lim Wee Kian have also each
agreed with the Joint Issue Managers, Bookrunners and Underwriters that they will not without the
prior written consent of the Joint Issue Managers, Bookrunners and Underwriters, for the
Moratorium Period, directly or indirectly, in respect of all the Accretion Shares held or in which they
have an interest at the time of Listing:
(a) offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any
option or contract to sell grant any option, right or warrant to purchase, lend, hypothecate or
encumber or otherwise transfer or dispose of, any of their Accretion Shares (including any
interests or securities convertible into or exchangeable for any Accretion Shares or which
carry rights to subscribe for or purchase any Accretion Shares);
SHAREHOLDERS
128
(b) enter into any swap, hedge or other arrangement that transfers to another, in whole or in part,
any of the economic consequences of ownership of the Accretion Shares or any interests or
securities convertible into or exercisable or exchangeable for or which carry rights to
subscribe or purchase any Accretion Shares, whether such swap, hedge or other
arrangement is to be settled by delivery of Accretion Shares or other securities, in cash or
otherwise;
(c) deposit any of their Accretion Shares (including any interests or securities convertible into or
exercisable or exchangeable for, or which carry rights to subscribe for or purchase any
Accretion Shares) in any depository receipt facilities, whether any such transaction is to be
settled by delivery of Accretion Shares or other securities, in cash or otherwise;
(d) enter into any transaction or other arrangement having an economic effect similar, in whole
or in part, to the foregoing (a), (b) or (c); or
(e) offer to, or agree to, or publicly announce any intention to do any of the above.
SPH in respect of the shares of SPH AsiaOne
SPH holds 100% of the shares in the capital of SPH AsiaOne (the “SPH AsiaOne Shares”). SPH
AsiaOne in turn holds 40,680,642 Shares representing approximately 15.88% of our issued share
capital immediately after the Offering.
SPH has also agreed with the Joint Issue Managers, Bookrunners and Underwriters that it will not
without the prior written consent of the Joint Issue Managers, Bookrunners and Underwriters, for
the Moratorium Period, directly or indirectly, in respect of all the SPH AsiaOne Shares held or in
which they have an interest at the time of Listing:
(a) offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any
option or contract to sell grant any option, right or warrant to purchase, lend, hypothecate or
encumber or otherwise transfer or dispose of, any of its SPH AsiaOne Shares (including any
interests or securities convertible into or exchangeable for any SPH AsiaOne Shares or
which carry rights to subscribe for or purchase any SPH AsiaOne Shares);
(b) enter into any swap, hedge or other arrangement that transfers to another, in whole or in part,
any of the economic consequences of ownership of the SPH AsiaOne Shares or any interests
or securities convertible into or exercisable or exchangeable for or which carry rights to
subscribe or purchase any SPH AsiaOne Shares, whether such swap, hedge or other
arrangement is to be settled by delivery of SPH AsiaOne Shares or other securities, in cash
or otherwise;
(c) deposit any of its SPH AsiaOne Shares (including any interests or securities convertible into
or exercisable or exchangeable for, or which carry rights to subscribe for or purchase any
SPH AsiaOne Shares) in any depository receipt facilities, whether any such transaction is to
be settled by delivery of SPH AsiaOne Shares or other securities, in cash or otherwise;
(d) enter into any transaction or other arrangement having an economic effect similar, in whole
or in part, to the foregoing (a), (b) or (c); or
(e) offer to, or agree to, or publicly announce any intention to do any of the above.
SHAREHOLDERS
129
DMG Sale Shares
On 12 November 2014, DMG had disposed its entire shareholding in our Company, comprising
21,849,024 Shares (the “DMG Sale Shares”), to certain Shareholders at a price of approximately
S$0.83 per Share (or S$5 per share before the Sub-division undertaken in conjunction with the
Offering and the issuance of the Cornerstone Shares) (the “First Sale”). Subsequently on 19
November 2014, following the conversion of our Company into a public company limited by shares
and the adoption of our new Articles of Association, some of the Shareholders had further
transfered some or all of the DMG Sale Shares they received through the First Sale to other
existing and/or new Shareholders (the “Second Sale”). A total of 41 persons acquired DMG Sale
Shares through the First Sale and/or the Second Sale.
Each of the persons who acquired the DMG Sale Shares, whether through the First Sale or the
Second Sale, has agreed with the Joint Issue Managers, Bookrunners and Underwriters that they
will not without the prior written consent of the Joint Issue Managers, Bookrunners and
Underwriters, for the Moratorium Period, directly or indirectly in respect of all the DMG Sale
Shares held or in which they have an interest at the time of Listing:
(a) offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any
option or contract to sell, grant any option, right or warrant to purchase, lend, hypothecate
or encumber or otherwise transfer or dispose of, any of their DMG Sale Shares (including any
interests or securities convertible into or exchangeable for any DMG Sale Shares or which
carry rights to subscribe for or purchase any DMG Sale Shares);
(b) enter into any swap, hedge or other arrangement that transfers to another, in whole or in part,
any of the economic consequences of ownership of the DMG Sale Shares or any interests
or securities convertible into or exercisable or exchangeable for or which carry rights to
subscribe or purchase any DMG Sale Shares, whether such swap, hedge or other
arrangement is to be settled by delivery of DMG Sale Shares or other securities, in cash or
otherwise;
(c) enter into any transaction or other arrangement having an economic effect similar, in whole
or in part, to the foregoing (a) or (b);
(d) deposit any of their DMG Sale Shares (including any interests or securities convertible into
or exercisable or exchangeable for, or which carry rights to subscribe for or purchase any
DMG Sale Shares) in any depository receipt facilities, whether any such transaction is to be
settled by delivery of DMG Sale Shares or other securities, in cash or otherwise; or
(e) offer to, or agree to, or publicly announce any intention to do any of the above.
Shareholders to which Rule 229(4) of the Listing Manual applies
33 of our existing Shareholders (the “Rule 229(4) Shareholders”) hold or have an interest in our
Shares that are subject to a six-month moratorium pursuant to the formula specified in Rule 229(4)
of the Listing Manual.
17 of the 33 Rule 229(4) Shareholders have agreed to subject a larger proportion of their
shareholding to the moratorium arrangements which are described in greater detail below. For the
avoidance of doubt, a larger number of Shares will be moratorised than what is required pursuant
to the formula specified in Rule 229(4) of the Listing Manual.
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The remaining 16 Rule 229(4) Shareholders have agreed with the Joint Issue Managers,
Bookrunners and Underwriters that they will not without the prior written consent of the Joint Issue
Managers, Bookrunners and Underwriters, for the Moratorium Period, directly or indirectly in
respect of a proportion of their Shares held or in which they have an interest as determined based
on the formula set out in Rule 229(4) of the Listing Manual (but excluding the DMG Sale Shares,
all of which will be subject to the moratorium arrangements for the Moratorium Period)(the “Rule
229(4) Moratorised Shares”):
(a) offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any
option or contract to sell grant any option, right or warrant to purchase, lend, hypothecate or
encumber or otherwise transfer or dispose of, any of their Rule 229(4) Moratorised Shares
(including any interests or securities convertible into or exchangeable for any Rule 229(4)
Moratorised Shares or which carry rights to subscribe for or purchase any Rule 229(4)
Moratorised Shares);
(b) enter into any swap, hedge or other arrangement that transfers to another, in whole or in part,
any of the economic consequences of ownership of the Rule 229(4) Moratorised Shares or
any interests or securities convertible into or exercisable or exchangeable for or which carry
rights to subscribe or purchase any Rule 229(4) Moratorised Shares, whether such swap,
hedge or other arrangement is to be settled by delivery of Rule 229(4) Moratorised Shares
or other securities, in cash or otherwise;
(c) deposit any of their Rule 229(4) Moratorised Shares (including any interests or securities
convertible into or exercisable or exchangeable for, or which carry rights to subscribe for or
purchase any Rule 229(4) Moratorised Shares) in any depository receipt facilities, whether
any such transaction is to be settled by delivery of Rule 229(4) Moratorised Shares or other
securities, in cash or otherwise;
(d) enter into any transaction or other arrangement having an economic effect similar, in whole
or in part, to the foregoing (a), (b) or (c); or
(e) offer to, or agree to, or publicly announce any intention to do any of the above.
Directors and employees of our Group Companies
11 of the Rule 229(4) Shareholders and four (4) of our existing Shareholders are directors and
employees of our Group Companies, and have agreed with the Joint Issue Managers,
Bookrunners and Underwriters that they will not without the prior written consent of the Joint Issue
Managers, Bookrunners and Underwriters, for the Moratorium Period, directly or indirectly in
respect of 70% of their Shares held or in which they have an interest at the time of Listing
(excluding the DMG Sale Shares, all of which will be subject to the moratorium arrangements for
the Moratorium Period)(the “70% Moratorised Shares”):
(a) offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any
option or contract to sell grant any option, right or warrant to purchase, lend, hypothecate or
encumber or otherwise transfer or dispose of, any of their 70% Moratorised Shares (including
any interests or securities convertible into or exchangeable for any 70% Moratorised Shares
or which carry rights to subscribe for or purchase any 70% Moratorised Shares);
(b) enter into any swap, hedge or other arrangement that transfers to another, in whole or in part,
any of the economic consequences of ownership of the 70% Moratorised Shares or any
interests or securities convertible into or exercisable or exchangeable for or which carry
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rights to subscribe or purchase any 70% Moratorised Shares, whether such swap, hedge or
other arrangement is to be settled by delivery of 70% Moratorised Shares or other securities,
in cash or otherwise;
(c) deposit any of their 70% Moratorised Shares (including any interests or securities convertible
into or exercisable or exchangeable for, or which carry rights to subscribe for or purchase any
70% Moratorised Shares) in any depository receipt facilities, whether any such transaction
is to be settled by delivery of 70% Moratorised Shares or other securities, in cash or
otherwise;
(d) enter into any transaction or other arrangement having an economic effect similar, in whole
or in part, to the foregoing (a), (b) or (c); or
(e) offer to, or agree to, or publicly announce any intention to do any of the above.
Certain existing Shareholders
Six (6) Rule 229(4) Shareholders and two (2) of our existing Shareholders have agreed with the
Joint Issue Managers, Bookrunners and Underwriters that they will not without the prior written
consent of the Joint Issue Managers, Bookrunners and Underwriters, for the Moratorium Period,
directly or indirectly in respect of 45% of their Shares held or in which they have an interest at the
time of Listing (excluding the DMG Sale Shares, all of which will be subject to the moratorium
arrangements for the Moratorium Period)(the “45% Moratorised Shares”):
(a) offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any
option or contract to sell grant any option, right or warrant to purchase, lend, hypothecate or
encumber or otherwise transfer or dispose of, any of their 45% Moratorised Shares (including
any interests or securities convertible into or exchangeable for any 45% Moratorised Shares
or which carry rights to subscribe for or purchase any 45% Moratorised Shares);
(b) enter into any swap, hedge or other arrangement that transfers to another, in whole or in part,
any of the economic consequences of ownership of the 45% Moratorised Shares or any
interests or securities convertible into or exercisable or exchangeable for or which carry
rights to subscribe or purchase any 45% Moratorised Shares, whether such swap, hedge or
other arrangement is to be settled by delivery of 45% Moratorised Shares or other securities,
in cash or otherwise;
(c) deposit any of their 45% Moratorised Shares (including any interests or securities convertible
into or exercisable or exchangeable for, or which carry rights to subscribe for or purchase any
45% Moratorised Shares) in any depository receipt facilities, whether any such transaction
is to be settled by delivery of 45% Moratorised Shares or other securities, in cash or
otherwise;
(d) enter into any transaction or other arrangement having an economic effect similar, in whole
or in part, to the foregoing (a), (b) or (c); or
(e) offer to, or agree to, or publicly announce any intention to do any of the above.
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No sale of similar securities by our Company
We have agreed with the Joint Issue Managers, Bookrunners and Underwriters that, from the
Listing Date until the date falling six (6) months after Listing Date (both dates inclusive), we will
not, without the prior written consent of the Joint Issue Managers, Bookrunners and Underwriters,
directly or indirectly:
(a) allot, offer, issue, sell, contract to issue, grant any option, warrant or other right to subscribe
or purchase, grant security over, encumber (whether by way of mortgage, assignment of
rights, charge, pledge, pre-emption rights, rights of first refusal or otherwise), or otherwise
dispose of or transfer, any Shares or any other securities of our Company or any subsidiary
of ours (including any equity-linked securities, perpetual securities and any securities
convertible into or exchangeable for, or which carry rights to subscribe for or purchase such
Shares or any other securities of our Company or any subsidiary of ours), whether such
transaction is to be settled by delivery of Shares or other securities of our Company or any
subsidiary of ours, or in cash or otherwise;
(b) enter into any swap, hedge or other arrangement that transfers to another, in whole or in part,
any of the economic consequences of ownership of any Shares or any other securities of our
Company or any subsidiary of ours, or any interest in any of the foregoing (including any
securities convertible into or exchangeable for, or which carry rights to subscribe or purchase
Shares or any other securities of our Company or any subsidiary of ours), whether such
transaction is to be settled by delivery of Shares or other securities of our Company or any
subsidiary of ours, or in cash or otherwise;
(c) deposit any Shares or any other securities of our Company or any subsidiary of ours
(including any interests or securities convertible into or exercisable or exchangeable for, or
which carry rights to subscribe or purchase such Shares or any other securities of our
Company or any subsidiary of ours) in any depository receipt facilities whether any such
transaction is to be settled by delivery of the Shares or other securities of our Company or
any subsidiary of ours, or in cash or otherwise;
(d) enter into any transaction or other arrangement with the same economic effect, in whole or
in part, as any transaction described in the foregoing (a), (b) or (c); or
(e) offer or agree to or make any announcement with respect to any of the foregoing
transactions.
The foregoing restriction does not apply to the New Shares issued under the Offering, the
Cornerstone Shares, the Option Shares, the Award Shares and the Additional Shares or utilisation
of treasury shares issued in accordance with the Companies Act.
Persons intending to subscribe for Shares in the Offering
While some of our Directors (including Directors who are Substantial Shareholders) intend to
subscribe for the New Shares, none of our other Substantial Shareholders intends to subscribe for
the New Shares. In the event that any of our Directors or Substantial Shareholders subscribe for
any New Shares, we will, pursuant to Rule 240(1) of the Listing Manual, announce details of such
subscription.
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To the best of our knowledge, we are not aware of any person who intends to subscribe for more
than 5.0% of the New Shares. However, through a book-building process to assess market
demand for our Shares, there may be person(s) who may indicate interest to subscribe for more
than 5.0% of the New Shares.
No Shares shall be allotted or allocated on the basis of this Prospectus later than six (6) months
after the date of registration of this Prospectus by the Authority.
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134
OVERVIEW
Our core business is embodied by the name of our Company, “iFAST”, which stands for
“Investments and Funds Administration, Services and Transactions”. Specifically, we are an
internet-based Investment Products distribution and administration platform and provide a
comprehensive range of services, including the execution of investment transactions, investment
administration, research and investment trainings, software tools, IT services and backroom
functions to more than 150 FAs and financial institutions and more than 5,000 FA representatives
in the jurisdictions in which we operate.
We were incorporated in Singapore on 11 September 2000, and subsequently expanded to Hong
Kong in 2007, Malaysia in 2008 and China in 2014.
Since our incorporation, we have steadily built and established a reputation for providing easy
access to investment products, namely, funds (including unit trusts) and SGS Bonds in Singapore,
funds (including unit trusts) in Malaysia, and funds (including unit trusts) and corporate bonds in
Hong Kong as well as providing a Platform which enables investors to transact and invest at
competitive rates. iFAST Financial, our wholly-owned subsidiary, is also an investment
administrator under the CPF Investment Scheme in Singapore.
In Singapore, our core market, we are a leading and established funds and investments
distribution platform for more than 50 independently-owned FAs and financial institutions, and
over 2,500 FA representatives. According to Cerulli Associates, our Group is a leading distribution
platform among independent financial advisory firms and the online channel (DIY Investors) in
Singapore. As at end September 2014, our subsidiary iFAST Financial administers approximately
S$3.88 billion in AUA. Please refer to the section entitled “Our Business – Our Business Model”
in this Prospectus for more details on the importance of AUA to our business.
Via our Platform, we are able to provide a whole range of services to FAs, financial institutions and
their respective clients and also enable DIY Investors to make informed investments decisions
and execute online investment transactions by equipping them with a wide range of user-friendly
investment and planning tools. We primarily conduct our business in two (2) business divisions,
namely, the B2B Business and the B2C Business divisions.
B2B Business
Our B2B Business began in Singapore in 2002 and we launched in Hong Kong and Malaysia in
2008. Our B2B Business focuses on servicing FAs by providing them with an efficient and reliable
investment platform to handle their back-end transactional and operational needs. Through our
B2B Business, we partner with financial institutions and FAs and assist with their Investment
Products distribution, administration, execution and settlement needs. As part of our B2B
Business, we also provide regular research updates on Investment Products, as well as
Internet-based tools and mobile-friendly applications for financial institutions and FAs to utilise in
their portfolio and investment planning. Our Group’s B2B Platform can be accessed via our iFAST
Financial Website, www.ifastfinancial.com.
B2C Business
Our B2C Business began in Singapore in 2000 and we launched our B2C Business in Hong Kong
in 2007 and subsequently, Malaysia in 2008. Our B2C Business focuses on providing a reliable
website which offers Investment Products, Investment Products research, portfolio research, tools
for analyses of Investment Products, a strong emphasis on customer service, and a competitive
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and transparent fee structure. Our B2C Business is targeted at DIY Investors seeking alternative
investment channels that provide them with more control in the decision-making and execution
process of investing. Products and services offered via Fundsupermart.com, our B2C Platform,
include the offering of Investment Products, free switching of unit trusts and bond unit trusts sold
at 0% upfront sales charges. Our B2C Platform can be accessed via our Fundsupermart.com
Website, www.fundsupermart.com.
Our business grew during the Period Under Review. Our net revenue was approximately S$25.2
million in FY2011, S$26.3 million in FY2012, S$31.6 million in FY2013 and S$27.3 million in
9M2014. Additionally, our average AUA was approximately S$3.88 billion in FY2011, S$3.91 billion
in FY2012, S$4.46 billion in FY2013 and S$4.89 billion in 9M2014.
HISTORY AND DEVELOPMENT
We were incorporated in Singapore on 11 September 2000 as “Fundsupermart Holdings Pte. Ltd.”
and changed our name to “iFAST Corporation Pte. Ltd.” on 26 March 2003. Since our
incorporation in 2000, we have expanded our business to three (3) other jurisdictions in Asia,
namely, Malaysia, Hong Kong and China and our net revenue has grown from S$25.2 million in
FY2011 to S$31.6 million in FY2013, while our average AUA has grown from S$3.88 billion in
FY2011 to S$5.13 billion as at end September 2014.
Our business began from an observation made by our founders in 1999 that the then dominant
distribution channels in the unit trusts industry could be made more efficient and cost-effective
through the use of the Internet. This observation led our founders, one of whom is Mr. Lim Chung
Chun, to establish Fundsupermart.com Pte. Ltd. (now known as iFAST Financial) in early 2000 to
provide a website which offered Investment Products, Investment Products research, portfolio
research, tools for analyses of Investment Products, a strong emphasis on customer service, and
a competitive and transparent fee structure. The roll-out of our Fundsupermart.com Website
coincided with the rise of Internet-based businesses in the US and was embraced by DIY investors
looking for alternative ways to make self-directed investments. Fundsupermart’s services
continue to remain a mainstay of our B2C Business today even as we have expanded the breadth
and depth of our services and increased the range of Investment Products we offer.
Between 2001 and 2002, the regulatory framework of the financial services industry in Singapore
changed with the proposed introduction of the FAA. The increase in the number of new FAs as a
result of the enactment of the FAA in 2002 presented an opportunity for our Group to diversify into
the B2B Business by modifying our Platform to support the businesses of FAs. Further to the
addition of our new business division, we re-organised the companies in our Group in March 2003.
Our Company changed our name to “iFAST Corporation Pte. Ltd.” and “Fundsupermart.com Pte.
Ltd.” was renamed “iFAST Financial Pte. Ltd.”
In addition, two (2) separate business divisions were set up under iFAST Financial, one (1) to
operate the B2C Business and the other to operate the B2B Business. At about the same time, we
acquired the entire share capital of iFAST Financial from its shareholders through a share swap
pursuant to which shareholders of iFAST Financial received our Shares as consideration for the
sale of their shares in iFAST Financial to our Company. iFAST Financial subsequently became a
wholly-owned subsidiary of our Company.
Our B2B Business benefited from the demand from FA companies for an efficient investment
platform that could handle their back-end transactional and operational needs which included
administering the distribution of Investment Products and handling settlement logistics.
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In March 2006, we expanded our B2B services by establishing our Pensions Business. Via our
iFAST Pensions Website, we assist companies to administer pension schemes for their
employees. We also provide administrative support and specialist services to help companies
implement and administer employee retirement benefit plans in Singapore. In November 2006, we
also obtained an MAS exemption from the requirements under the TCA to carry out the trust
business (including acting as the trustee) of any corporate pension plans.
Our geographical expansion began in 2007, with the incorporation of iFAST HK, a wholly-owned
subsidiary of our Company. iFAST HK obtained the necessary licences to carry out business in
Hong Kong in March 2007 and commenced its B2C Business, Fundsupermart.com, in July 2007.
This was followed by the launch of its B2B Business in 2008. In March 2009, we grew our
presence further in the B2B division in Hong Kong by acquiring from ING Insurance Asia Pacific
a 100% stake in ING Platform Services, a Hong Kong-based investment platform and the service
provider of I-Wrap/Private Portfolio Service in Hong Kong and Singapore.
To take advantage of lower costs in Malaysia and to complement our regional development plans,
we set up a wholly-owned subsidiary, iFAST Service Centre, in Malaysia in March 2006 to provide
call centre and other support services such as IT and operational support to our Group. In
November 2007, we entered into a joint venture agreement with OSK Investment Bank Bhd (a
wholly-owned subsidiary of OSK Holdings Bhd, listed in Bursa Malaysia) and formed iFAST-OSK
Sdn Bhd in which we had a majority stake and management control. In July 2008, iFAST-OSK’s
wholly-owned subsidiary iFAST Capital Malaysia was awarded the CMSL by the SC and we
launched Fundsupermart.com and iFAST platform services for Corporate Unit Trust Advisers
(CUTAs) in Malaysia (the equivalent of a FA Company in Singapore or Type 4 licensed corporation
in Hong Kong) in September and October 2008 respectively.
In 2009, we further expanded our B2B services in Singapore by offering a dedicated website, iGP,
to cater to the needs of HNW clients. iGP focuses on providing distribution, administration,
operational and transactional services to financial institutions and FA companies servicing HNW
clients. The demand for the differentiated services targeted at FA representatives and their HNW
clients was also strongly evident in HK, and we subsequently launched iGP in Hong Kong in July
2010.
In December 2013, we further increased our shareholding in iFAST-OSK from 61.73% to 65.12%
pursuant to a capital injection of RM2.3 million.
On 20 June 2014, we took an investment stake of 19.9% stake in Providend by acquiring 30,384
newly issued preferred shares at S$13.17 per preferred share for an aggregate consideration of
approximately S$400,157.28, satisfied through the capitalisation into preferred shares of the
convertible loans granted pursuant to the convertible loan letters dated 15 November 2013 and 13
January 2014 from our Company to Providend granting a loan of S$70,000 and S$180,000 to
Providend respectively, with the remainder in cash. Since the enactment of the FAA in Singapore
in 2002, the FA industry has grown steadily in terms of the number of companies and advisers and
assets under administration. As an early entrant to Singapore’s wealth management industry, we
saw potential in Providend as a FA company to partner with and grow the presence of FA
companies in the wealth management scene in Singapore. Our acquisition of a 19.9% stake in
Providend was approved by MAS and was completed on 25 July 2014. For further details on
Providend, please refer to the sections entitled “Group Structure” and “General and Statutory
Information” in this Prospectus.
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On 7 March 2014, we entered into a sale and purchase agreement to acquire the minority stake
of 34.88% in iFAST-OSK for a consideration of RM9.07 million from RHB our joint venture partner
in the iFAST Capital Malaysia business. The consideration of RM9.07 million was determined on
a willing buyer willing seller basis, after taking into consideration (i) the cost of investment that
RHB had incurred since 2007; and (ii) the current performance and future prospects of
iFAST-OSK. Subsequent to this acquisition, iFAST-OSK has been renamed iFAST Malaysia Sdn.
Bhd.. Our acquisition of RHB’s stake was approved by the SC on 9 June 2014 and was completed
on 18 July 2014.
On 7 July 2014, we entered the Chinese market by incorporating iFAST China, a wholly-owned
subsidiary of iFAST HK. iFAST China will operate in China as a provider of platform services in
China, including IT and business process outsourcing services such as system application
management and maintenance, IT technology management, back office services, software
development, and data processing. As of the Latest Practicable Date, iFAST China is still in the
set-up stage of its business and is developing its in-house IT system, which is expected to be
completed by the first half of 2015. Based on its current business model, iFAST China has
obtained the licences required for it to commence operation.
Our Group may also apply for additional licences from the relevant regulatory authorities from time
to time as part of our Group’s efforts to expand our business, services offered and types of
Investment Products available. For example, in August 2014, iFAST HK had written to SFC, the
relevant regulatory authority in Hong Kong, to apply for the addition of Type 9 regulated activities
(Asset Management) to its licence. As at the Latest Practicable Date, our application is still under
consideration and has not been approved. iFAST HK is currently a holder of a licence for Type 1
regulated activities (Dealing in Securities) and Type 4 regulated activities (Advising on Securities).
Please see the sections entitled “Government Regulations and Licensing” for further details on our
licences.
The table below sets forth our key milestones and awards since incorporation:
Year Event
2000 Incorporation of our Company and commencement of operations of our B2C
Platform in Singapore, Fundsupermart.com, targeted at retail investors.
Fundsupermart.com distinguished itself from its competitors by focusing on
providing a website which offered Investment Products, Investment Products
research, portfolio research, tools for analyses of Investment Products, a strong
emphasis on customer service, and a competitive and transparent fee structure.
2002 Launch of B2B Business in Singapore targeted at banks, financial institutions and
FAs to tap on the demand from mostly FAs for an efficient investments platform that
could handle their back-end transactional and operational needs.
2006 Launch of iFAST Pensions Website in Singapore with the expansion of the B2B
Business. The iFAST Pensions Website assists companies to administer pension
schemes for their employees, and provides administrative support and specialist
services to help companies implement and administer employee retirement benefit
plans.
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Year Event
Incorporation of iFAST Service Centre Sdn. Bhd. in Malaysia to take advantage of
lower costs in Malaysia and to provide support, especially IT and operational, to
our Group in view of our plans to expand into new markets.
2007 Establishment of our B2C operations in Hong Kong after our wholly-owned
subsidiary, iFAST Financial (HK) Ltd, obtained the necessary licences.
Ranked 9th at the Enterprise 50 Awards organised by Singapore’s The Business
Times to recognise the top 50 most enterprising privately-owned companies that
have contributed to Singapore’s economic development.
2008 Establishment of our B2B operations in Hong Kong.
Establishment of our B2B and B2C operations in Malaysia after our wholly-owned
subsidiary, iFAST Capital Sdn Bhd, obtained the necessary licences.
Ranked 2nd at the Enterprise 50 Awards organised by Singapore’s The Business
Times to recognise the top 50 most enterprising privately-owned companies that
have contributed to Singapore’s economic development.
2009 Acquisition of 100% interest in ING Platform Services Limited from ING Insurance
Asia/Pacific. ING Platform Services Limited is a Hong Kong-based investment
platform and the service provider of I-Wrap/Private Portfolio Service in Hong Kong
and Singapore.
Launch of specialised B2B division, iFAST Global Prestige, in Singapore to focus
on the distribution, administration, operational and transactional services to
financial institutions and FA companies servicing high net worth clients.
2010 Launch of specialised B2B division, iFAST Global Prestige, in Hong Kong to focus
on the distribution, administration, operational and transactional services to
financial institutions and FA companies servicing high net worth clients.
2011 Creation and launch of “FSM Mobile”, our first mobile application for the iPhone
which offers investors a free tool that enables them to use popular tools found on
the Fundsupermart.com Website, as well as other new features. This was
eventually rolled out on other mobile platforms, as well as in Hong Kong and
Malaysia.
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Year Event
2009-2013 In August 2009, iFAST HK and Fundsupermart.com (HK) won the “Fund Platform”
and “Online Usability” awards respectively at The Best Practice Financial Services
Award 2009, which was organised by Benchmark & Best Practice Management
Magazine.
In December 2010, iFAST HK received the “Best-in-Class” award in the “Advisers
Choice of the Year” category and Fundsupermart.com (HK) was named
“Outstanding Achiever” award in the “Online Capabilities Award” category at the
Benchmark Wealth Management Awards 2010.
In December 2011, iFAST HK received the “Best-in-Class” award in the “Platform
Provider of the Year – Professional” category and Fundsupermart.com (HK)
received the “Best-in-Class” award in the “Best in Online Usability” category at the
Benchmark Wealth Management Awards 2011.
In November 2013, Fundsupermart.com (HK) received the “Best-in-Class” award
in the “Online Usability – Independent” category at the Benchmark Wealth
Management Awards 2013. At the same awards, iFAST HK was named
“Outstanding Achiever” in the “Investment Platform – Independent” category.
2014 Establishment of our China operations with the incorporation of iFAST China.
Company was awarded a Silver award in the “Most Informative Use of Mobile”
category at the Mob-Ex Awards.
iFAST HK was awarded the “Friendly-Family Employer 2013/14” by the Family
Council of the government of Hong Kong SAR. iFAST HK was also awarded the
Caring Company Logo 2013/14 by the Hong Kong Council of Social Service, in
recognition for its commitment in Caring for the Community, Caring for the
Employees and Caring for the Environment over the past year.
B2B BUSINESS
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Our B2B Business focuses on servicing FAs by providing them with an efficient and reliable
investment platform to handle their back-end transactional and operational needs. Through our
B2B Business, we partner with financial institutions and FAs and assist with their Investment
Products distribution, administration, execution and settlement needs. As part of our B2B
Business, we also provide regular research updates on Investment Products, as well as
Internet-based tools and mobile-friendly applications for financial institutions and FAs to utilise in
their portfolio and investment planning. Our Group’s B2B Platform can be accessed via our iFAST
Financial Website, www.ifastfinancial.com.
iFAST Pensions Website
Our B2B division also includes our Pensions Business that assists our pension corporate clients
to establish tax-effective retirement benefits schemes for their employees and provides
administrative support and specialist services to help these corporate clients implement and
administer employee retirement benefit plans. Services rendered under our Pensions Business
include advising corporate clients on the various retirement benefit solutions for employees,
helping to set up retirement benefit plans and the day-to-day administration of the retirement
benefit plans. These services are important for companies that want to offer extra pensions
benefits to retain their employees; or in cases where their employees are mostly foreigners such
as in multinational companies. Our iFAST Pensions Website Customers include various
multinational companies, including international banks and educational groups. Revenue
generated from our Pensions Business has not been significant since inception. Our iFAST
Pensions Website’s address is www.ifastpensions.com.
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iFAST Global Prestige
In 2009 and 2010, we launched a specialised B2B division, iFAST Global Prestige in Singapore
and Hong Kong, respectively. iFAST Global Prestige focuses on the distribution, administration,
operational and transactional services to financial institutions and FA companies servicing HNW
clients. The range of products offered by iFAST Global Prestige is more extensive and includes
products that are suitable for accredited investors (as defined under Singapore’s regulations), as
well as more specialised services to FA representatives servicing the HNW market segment.
B2C BUSINESS
Our B2C Business began in Singapore in 2000 and we subsequently expanded our operations to
Hong Kong in 2007 and, Malaysia in 2008. Our B2C Business focuses on providing a reliable
website which offers Investment Products, Investment Products research, portfolio research, tools
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for analyses of Investment Products, a strong emphasis on customer service, and a competitive
and transparent fee structure. Our B2C Business is targeted at DIY Investors seeking alternative
investment channels that provide them with more control in the decision-making and execution
process of investing. Products and services offered via Fundsupermart.com, our B2C Platform,
include SGS Bonds in Singapore, corporate bonds in Hong Kong, free switching of unit trusts and
bond unit trusts. Our B2C Platform can be accessed via our Fundsupermart.com Website,
www.fundsupermart.com.
OTHER SERVICES
Apart from the administrative and transactional services available via our Platform, we also
provide investment seminars for our B2B and B2C Customers. In Singapore, our licensed entity,
iFAST Financial is licensed to provide custodial services for funds (including unit trusts) and
Singapore Government Securities (SGS). Similar custodial services are localised for our business
in Hong Kong and Malaysia as well.
OUR BUSINESS MODEL
Our Platform is the core of our business. Our Suppliers provide us with Investment Products which
we distribute via our Platform to our Customers. B2B Customers (banks, FAs, financial institutions
and companies) select Investment Products distributed on our Platform via our iFAST Financial
Website on behalf of adviser-assisted investors and (in the case of our Pensions Business) via our
iFAST Pensions Website on behalf of employees. DIY Investors select Investment Products
distributed on our Platform via our Fundsupermart.com Website. The diagram below illustrates our
business model and the relationship we have with our Suppliers and Customers.
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Proprietary Platform and Services Offered
We believe our business model, while commonly seen in developed financial markets such as the
US, Europe and Australia, is fairly unique in Asia. We differentiate ourselves from our competitors
in the region by offering our Customers consolidated services that we believe can only be obtained
from the concurrent engagement of several different service providers. For example, financial
institutions can leave the administration, settlement, operational and transactional side of their
business to our Platform as well as rely on our Platform to source investment products from
multiple product providers and to arrange fees. Such financial institutions can then focus on their
core business, including clients’ acquisitions, portfolio advice and service. In turn, we can
aggregate the demand for Investment Products from the financial institutions we work with and
enjoy greater bargaining power when approaching product providers with an aggregated number
of Customers and leverage on an aggregated AUA. We believe this arrangement also benefits
product providers, as our aggregation of Customers also reduces the number of parties they have
to negotiate with and service. The consolidation of services we provide typically brings cost
savings and efficiency to our B2B and B2C Customers as well as product providers.
Specifically, our B2B Customers can avoid the need to sign individual distribution agreements with
each product provider and via our Platform, continue to have access to a competitive fee-sharing
structure, transactional capabilities, execution and settlement functionality, efficient collection of
advisory fees, and services which include research, seminars and client services. In particular, in
relation to our collection of Wrap Fees, our current Wrap Fees collection method which involves
the redemption of unit trusts from the unit holdings of our adviser-assisted investors has increased
the efficiency and quality of our collection of Wrap Fees as compared to when Wrap Fees due to
us were typically paid by way of cheque. Under such current collection method, an amount of unit
trusts, the value of which is equivalent to the amount of Wrap Fees due to us, is deducted from
the unit holdings of adviser-assisted investors. We currently experience minimal instances of
non-payment from our adviser-assisted investors of the Wrap Fees due to us as a majority of our
adviser-assisted investors have converted to our current Wrap Fees collection method.
Previously, when Wrap Fees due to us were typically paid by way of cheque, we had occasionally
experienced instances of an inability to collect such fees due to us. None of the past incidences
of our inability to collect Wrap Fees has resulted in a material and adverse impact to our business.
Additionally, for our B2C Customers, the advantages they have from using our Platform include
the ability to conduct research, execute transactions and monitor their investments via a single
operator. Further, our Platform provides our B2C Customers with a range of Investment Products
at a competitive cost. Our B2C Customers are also given access to seminars conducted by us.
The number of FA representatives using our Platform increased from about 110 in 2002 to over
5,000 FA representatives as at the Latest Practicable Date. As at the Latest Practicable Date, we
have over 190,000 B2B adviser-assisted and B2C accounts that have been opened using our
Platform and over 150 financial advisory companies and financial institutions Customers. We
believe that our offering of an efficient and reliable Platform developed in-house and the steady
growth in the number of our Customers form the foundation for us to build a long-term business
that relies mostly on recurring revenue sources as opposed to relying on shorter-term
commissions the amount of which tends to be less predictable.
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Distribution of Investment Products
We distribute Investment Products in Singapore, Hong Kong and Malaysia through our licensed
entities in these jurisdictions. Please see the section entitled “Government Regulations and
Licensing” for more details on our licensed entities and the types of licences they hold in their
respective jurisdictions.
We distribute over 1,800 Investment Products (including more than 1,600 funds) in Singapore,
Hong Kong and Malaysia. The distribution of such Investment Products must comply with the
regulations in the respective jurisdictions. As at the Latest Practicable Date, we do not distribute
cross-border Investment Products in the markets in which we operate. This means that an investor
who has a Fundsupermart.com account or a B2B account in Singapore, can only invest in
Investment Products distributed on our Platform that are recognised by MAS. The same applies
for the local jurisdictions of Hong Kong and Malaysia.
Transaction Process of a B2B Customer
Our B2B Customer is typically an adviser-assisted customer who opens an iFAST account with our
licensed entity with the assistance of his/her FA (or equivalent). A B2B adviser-assisted customer
who opens an iFAST account in Singapore will be able to transact in Investment Products
distributed by the licensed entity in Singapore. This Singapore B2B adviser-assisted customer will
not be able to invest in Investment Products distributed in the other jurisdictions in which we
operate, for example, iFAST HK, unless his/her FA (or equivalent) assists the such customer in
fulfilling the necessary local requirements for opening a separate iFAST account in Hong Kong.
The FA representatives and adviser-assisted customer can log into their account at
www.ifastfinancial.com.
Transaction Process of a B2C Customer
Our B2C Customer is typically a DIY Investor who opens an account with Fundsupermart.com.
Depending on the jurisdiction in which the B2C Customer is initiating the account opening
process, there may be certain regulatory requirements that such B2C Customer has to meet. For
example, in Singapore, a potential B2C Customer who wants to open a Fundsupermart.com
account has to satisfy a Customer Knowledge Assessment (“CKA”) which involves an assessment
of such B2C Customer’s financial knowledge and understanding of the risks and features of
Investment Products before they are allowed to invest. The CKA was implemented by the MAS to
safeguard the interests of investors, especially those who may not have the relevant knowledge
or experience in investing in certain Investment Products. In Singapore, B2C Customers who do
not meet the CKA requirements will be referred to our “Client Investment Specialist” team, who will
provide investment advice and transactional support. In the other jurisdictions in which we
operate, we also have a “Client Investment Specialist” team available to assist any B2C
Customers if they wish to have investment advice. Similar to the B2B Customer process, a DIY
investor who opens a Fundsupermart.com account in Singapore can only transact in Investment
Products distributed via Fundsupermart.com in Singapore and may not invest in Investment
Products distributed via Fundsupermart.com Hong Kong or Fundsupermart.com Malaysia without
opening a separate Fundsupermart.com account in Hong Kong or Malaysia respectively.
Via the Fundsupermart.com Website, DIY Investors have access to fund tools, for example,
“Funds Selector” and “Chart Centre” which they can use to compare Investment Products and
view their Investment Product holdings. DIY Investors are also able to download our “FSM Mobile”
application to analyse Investment Products and/or financial markets as well as to access research
articles.
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Assets Under Administration
In our business, our AUA is the source of our recurring revenue. Factors that led to an increase
in AUA include better portfolio management, better market conditions and new clients’
acquisitions. As at end September 2014, our AUA has a value of approximately S$5.13 billion and
in the last ten (10) years has grown at a CAGR of approximately 26.8% for our Group.
As at end September 2014, the percentage AUA contribution by Singapore, Hong Kong and
Malaysia was 75.5%, 20.5% and 4.0% respectively. The percentage of AUA contribution by our
B2B and B2C Businesses as at end September 2014 was 74.3% and 25.7%, respectively.
While there has been a general uptrend in the value of our AUA in the last ten (10) years, such
an upward trend was interrupted during the GFC in which the financial markets experienced
heightened volatility. Our AUA was affected negatively as some Customers redeemed their
investments and some of the unit trusts’ net asset value declined. These two (2) factors led to the
decline in our AUA. After the GFC, our AUA has grown and resumed a general uptrend as our
business across the markets improved due to better market and investor sentiments.
The following chart illustrates the growth of our AUA since our operations commenced to end
September 2014 (in S$ ’million):
-
1,000
2,000
3,000
4,000
5,000
B2B B2C
Note: The AUA illustrated is based on month-end AUA.
AUA growth, excluding the effects arising from the general economic conditions and financial
market performance, is largely dependent on subscriptions (excluding switching between unit
trusts) and net inflows. The following table shows the breakdown of our Subscriptions and net
inflows in each of FY2011, FY2012, FY2013, 9M2013 and 9M2014 respectively.
S$ ’million FY2011 FY2012 FY2013 9M2013 9M2014
Subscription
(1)
947 941 1,365 1,080 1,138
Net inflows
(2)
55 193 458 416 348
Notes:
(1) Excludes switching between unit trusts.
(2) Net inflows mean subscription (excluding Switching) plus Transfer-in and less both redemption and Transfer-out.
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Profit Before Tax Margin Calculated Based on Net Revenue
Our business has shown to be scalable, with our net revenue growth outpacing our operating
expenses growth once we have achieved a certain level of AUA. As illustrated by the following
chart, our profit before tax from continuing operations was approximately S$2.4 million in FY2011,
S$3.9 million in FY2012, S$8.8 million in FY2013, and S$8.0 million in 9M2014. Using profit before
tax from continuing operations and net revenue to calculate our profit margin, our Group’s profit
margin has improved from approximately 9.4% in FY2011 to approximately 29.1% in 9M2014
driven by the scalability of our business and the higher contributions from our Group’s operations
in Singapore and Hong Kong.
9.4%
15.0%
27.9%
29.1%
0%
5%
10%
15%
20%
25%
30%
35%
2011 2012 2013 9M2014
Source of Revenue
Our revenue is primarily derived from (i) recurring revenue driven by our AUA, which is calculated
based on a certain percentage of AUA value; and (ii) non-recurring revenue that comprises mainly
of commission derived from investment subscription via front-end load commissions or processing
fees. Please refer to the section entitled “Management Discussion & Analysis of Results of
Operations and Financial Position” in this Prospectus for additional information.
Non-recurring revenue and recurring revenue
Revenue derived from our B2B Business includes (i) recurring revenue driven by AUA, comprising
Trailer Fees, Platform Fees and Wrap Fees; and (ii) non-recurring revenue that comprises (a)
commission income derived mainly from investment subscription via front-end load commissions
or processing fees; (b) service fees arising mainly from the provision of currency conversion
administration services to adviser-assisted investors and the provision of administration services
to FAs; (c) advertising fee earned mainly from advertisements placed by third parties on iFAST
Financial Websites and in iFAST in-house magazines and (d) other miscellaneous income such as
magazine sales and software licence revenue.
Revenue derived from our B2C Business includes: (i) recurring revenue driven by AUA,
comprising Trailer Fees and Platform Fees; and (ii) non-recurring revenue that comprises (a)
commission income derived mainly from investment subscription via front-end load commissions
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or processing fees; (b) service fees arising mainly from the provision of currency conversion
administration services to DIY investors; and (c) advertising fee earned mainly from
advertisements placed by third parties on our Fundsupermart.com Website and its mobile
application.
During the initial growth stage of our business, our recurring revenue contributed less to our net
revenue. As our business grew, our recurring revenue increased its contribution to our net
revenue. In line with the increase in our average AUA, the average contribution from recurring
revenue sources was 34.2% in the four-year period from 2004 to 2007, and grew to 71.4% during
the four-year period from 2008 to 2011. Our average AUA over the four-year period from 2004 to
2007 was approximately S$1.47 billion, and this increased to approximately S$3.63 billion during
the four-year period from 2008 to 2011. During the Period Under Review, the average contribution
from our recurring revenue sources have grown to approximately 81.6% of our net revenue and
average AUA was approximately S$4.29 billion.
The following chart illustrates the relationship and breakdown between recurring and non-
recurring net revenue (in S$’million):
0
5
10
15
20
25
30
35
Recurring Non-recurring
27.3
31.6
26.3
25.2
15.9
25.3
28.8
12.8
6.9
4.3
21.8
Our recurring and non-recurring net revenue (in S$’million) for the Period Under Review is as
follows:
S$ ’million FY2011 FY2012 FY2013 9M2014
Recurring net revenue 20.4 22.3 25.6 21.8
Non-recurring net revenue 4.8 4.0 6.0 5.6
For 9M2014, 59.0% of our recurring net revenue is derived from our net trailer fee, 30.6% is from
our net platform fee and 10.4% is from our net wrap fee.
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Net revenue as a percentage of average AUA during the Period Under Review has increased from
0.651% in 2011 to 0.745% in 9M2014. The contribution from recurring net revenue as a
percentage of average AUA is higher than the contribution from non-recurring revenue as a
percentage of AUA. Recurring net revenue as a percentage of average AUA increased from
0.526% in 2011 to 0.593% in 9M2014, while non-recurring revenue as a percentage of average
AUA increased from 0.125% in 2011 to 0.152% in 9M2014.
Net revenue as a percentage
of average AUA
FY2011
(%)
FY2012
(%)
FY2013
(%)
9M2013
(3)
(%)
9M2014
(3)
(%)
Recurring net revenue
(2)
/AUA 0.526 0.571 0.574 0.570 0.593
Non-recurring net
revenue/AUA 0.125 0.101 0.134 0.139 0.152
Net revenue/AUA 0.651 0.672 0.708 0.709 0.745
Operating expenses/AUA 0.588 0.573 0.529 0.532 0.536
Average AUA
(1)
(S$’billion) 3.88 3.91 4.46 4.42 4.89
Notes:
(1) The average AUA is the average of the month-end AUAs for the relevant period.
(2) Our recurring net revenue comprises Trailer Fees which are calculated at up to 0.9% per annum of our average AUA,
Platform Fees which are calculated at up to 0.5% per annum of our average AUA and Wrap Fees which are
calculated at up to 0.2% per annum of our average AUA.
(3) The ratios are calculated based on annualised revenue and operating expenses figures for 9M2013 and 9M2014.
The following chart illustrates our recurring net revenue as a percentage of average AUA for the
Period Under Review:
0.480%
0.500%
0.520%
0.540%
0.560%
0.580%
0.600%
2011
0.526%
2012 2013 9M2014
0.571%
0.574%
0.593%
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Geographical Breakdown of Net Revenue Contribution
Singapore is the most important contributor of our Group’s net revenue accounting for
approximately 83.9%, 81.1%, 76.3% and 70.3% of our Group’s net revenue in FY2011, FY2012,
FY2013 and 9M2014, respectively. As our Hong Kong and Malaysia businesses continue to grow,
their percentage contributions to our Group’s net revenue have been increasing, with Hong Kong’s
net revenue contribution increasing from 14.5% in 2011 to 25.8% in 9M2014, and Malaysia’s net
revenue contribution increasing from 1.6% in 2011 to 3.9% in 9M2014.
COMPETITION
We believe that our B2B and B2C functionalities have positioned us as a leading funds and
investments distribution platform in Asia. From our discussions and checks with our Suppliers and
B2B Customers who are FAs, we understand that based on our market share of AUA and
investment transactions, we are a leading and established funds and investments distribution
platform in Singapore, Malaysia and Hong Kong. In addition, according to Cerulli Associates, our
Group is a leading distribution platform among independent financial advisory firms and the online
channel (DIY Investors) in Singapore. For further details, please refer to the section entitled
“Industry Overview – Investment platforms in Asia ex-Japan: History and growth potential” in this
Prospectus. We face direct competition from businesses offering either a B2B and/or B2C
investment platform as part of their business, and indirect competition from businesses which are
offering other investment products.
In Singapore, we believe that our principal competitors include (i) Aviva Ltd’s Navigator, a B2B
investment platform and Dollardex, a B2C investment platform, and (ii) Phillips Securities Pte
Ltd’s FAME B2B investment platform and POEMS B2C investment platform. Additionally, we also
face competition from banks which are involved in the distribution of funds.
In Hong Kong, we believe that our competition is mostly restricted to the B2C division, with no
comparable independent investment platform in the B2B division. In the B2C division, competitors
include banks which offer their own online distribution channels, for example, Hang Seng Bank
Limited and The Hongkong and Shanghai Banking Corporation Limited, which have a large
customer base and strong branding in Hong Kong, as well as fund houses which distribute funds
online, for example, Fidelity’s Fundsnetwork.
In Malaysia, we believe that we face competition in both B2B and B2C divisions, the largest being
Public Mutual Berhad. Similar to the Singapore and Hong Kong markets, we also compete with
banks in Malaysia that have started offering funds online.
Aside from competition in respect of our Platform, we face indirect competition from other
businesses in respect of our product offerings, especially in the Singapore and Hong Kong
markets. For instance, our products compete with insurance ‘wrapper’ products, which essentially
wrap a fund or a bond into an investment-linked insurance product. Such products, which are
known as backend investment-linked insurance policies (“ILPs”) in Singapore, or Investment
Linked Assurance Schemes (“ILAS”) or “101 products” in Hong Kong, have been sold by various
financial institutions, and often generate higher commissions for the agents. As our Platform
distributes funds and bonds in a non-wrapper format, the fees we receive are substantially lower.
As insurance ‘wrapper’ products offer larger commissions, they have been aggressively marketed
by some investment industry players and indirectly compete with the Investment Products
distributed on our Platform. However, we believe regulatory changes in Hong Kong that will come
into effect on 1 January 2015 will likely make the marketing and sale of ILAS less attractive to the
investment industry players due to a ban on indemnity commission paid to financial institutions
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and agents selling ILAS. Please refer to the section entitled “Prospects, Business Strategies and
Plans – Increased demand for transparency on fees and commissions” in this Prospectus for
additional information.
OUR COMPETITIVE STRENGTHS
We believe that our position as one of the leading players in the industry is based on the following
competitive strengths.
We are a leading and established funds and investments distribution platform in Singapore,
Malaysia and Hong Kong
From our discussions and checks with our Suppliers and B2B Customers who are FAs, we
understand that based on our market share of AUA and investment transactions, we are a leading
and established funds and investments distribution platform, providing a range of services
including distribution of Investment Products, investment administration, execution of
transactions, research and investment trainings, software tools, IT services and backroom
functions to more than 150 FAs and financial institutions in Singapore, Malaysia and Hong Kong.
In addition, according to Cerulli Associates, our Group is a leading distribution platform among
independent financial advisory firms and the online channel (DIY Investors) in Singapore. For
further details, please refer to the section entitled “Industry Overview – Investment platforms in
Asia ex-Japan: History and growth potential” in this Prospectus. The expansion in our business in
terms of AUA and the size of our customer base has given us a certain scale which benefits our
Customers.
Our business relationships with a large number of Suppliers mean that we can offer a wide range
of Investment Products to our B2B and B2C Customers. With our Suppliers, many of whom are
international fund houses, and over 1,800 Investment Products (including more than 1,600 funds)
distributed in our existing markets, our Customers can rely on us as a one-stop investment
platform which provides a wide range of Investment Products for their financial planning.
In addition, we believe the scale of our operations allows us to work out a more efficient fee
sharing structure with our Suppliers. This translates to cost-savings to our Customers.
Furthermore, it will be more convenient and efficient for B2B Customers to use our Platform
instead of entering into individual distribution agreements with each product provider. Individually,
B2B Customers may find it more difficult to obtain the same fee structure from product providers
which we have obtained.
Our B2B and B2C Businesses have received recognition for the quality of the services we provide.
We have received a number of awards over the years. In November 2008, we came in second at
the Enterprise 50 Awards 2008 an event that was jointly organised by KPMG and The Business
Times, improving from ninth position in 2007. In August 2009, at The Best Practice Financial
Services Award 2009, which was organised by Benchmark Magazine and Best Practice
Management Magazine iFAST HK won the “Fund Platform” award. In December 2010, iFAST
Financial (HK) received the “Best-in-Class” award in the “Advisers Choice of the Year” category.
In December 2011, at the Benchmark Wealth Management Awards 2011, iFAST HK received the
“Best-in-Class” award in the “Platform Provider of the Year – Professional” category. In November
2013 at the Benchmark Wealth Management Awards 2013, iFAST HK was named “Outstanding
Achiever” in the “Investment Platform – Independent” category.
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We are able to stay nimble and react to changes in the markets
We believe our organisational structure is relatively flat and this makes us more efficient in our
decision making. Being able to stay nimble means we are able to roll out at a fast rate, new
initiatives that we believe can serve our Customers better. If our B2B Customers request for
customised solutions, we believe we are able to respond with these solutions promptly. For
example, we were able to create a customised mobile application for tablets within four (4) months
of a request from one of our customers. Besides our in-house IT resources, we have a team of
business development members who are proactively working with our B2B Customers to find
solutions to their business issues. If regulations require changes in our business, we believe we
are able to effect the necessary changes quickly. We are also able to roll-out new and innovative
services to B2C Customers fairly fast. An example is the launch of our mobile application which
provides our users with various tools and allows our users to keep in touch with markets and
Investment Products within a relatively short design time of four (4) months.
We have a scalable business model
We are able to reach out to more customers and grow our AUA by leveraging on our
Internet-based model and representatives from various FAs and financial institutions in the
jurisdictions in which we operate, without employing a large in-house sales team. We have
focused on building our core in-house capabilities, including IT, operations and settlement, client
services, and research functions. Our proprietary IT and operational system is built to be scalable,
and our Platform, which is Internet-based, can be customised and upgraded by our in-house IT
staff to scale with our growing AUA, so that we can handle higher transaction volumes arising from
a larger customer base as well as a higher AUA, without significant increases in our operating
costs. As such, our net revenue tends to grow at a higher rate than our operating costs. With our
strong IT capabilities and proprietary technology, our Group is able to control our operating costs
and keep it relatively low. In FY2011, FY2012, FY2013 and 9M2014 (annualised), our net
revenue/average AUA ratio was 0.651%, 0.672%, 0.708% and 0.745%, respectively, whereas the
operating expenses/average AUA ratio was lower at 0.588%, 0.573%, 0.529% and 0.536%,
respectively.
Further, the development of our proprietary Platform has minimised our reliance on third-party
developers, reduced our operating costs and given us the flexibility to innovate and scale our
business.
Our Platform is established in Singapore, Malaysia and Hong Kong and we believe that it can be
easily customised for other markets.
We have a cost advantage
We have focused on building our core capabilities in-house and we have derived cost savings as
our in-house capabilities reduce our need to outsource various functions to external parties. The
core capabilities we focus on building in-house include our IT, operations and settlement, client
services, and research functions. It will not be cost effective for a competitor to set up a similar
platform because of the high costs and specific industry knowledge and experience required for
the IT infrastructure and system. We are also able to expand to other markets on a cost-
competitive basis as we own our Platform, and without the need for additional licensing and the
payment of service fees to third parties.
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We possess strong IT capabilities and proprietary technology
We believe our IT capabilities are important in our ability to deliver reliable, quick and innovative
services to our Customers. We have been aided by the technological improvements which have
helped to lower our costs and improve the speed at which we deliver services to our Customers.
We believe our focus on continuously improving our websites and mobile applications, the ease
of navigation and a user-friendly interface will help us remain competitive in both our B2B and B2C
Business divisions.
Additionally, having our own in-house IT capabilities means we are able to control our operating
costs and keep it relatively low. Our in-house IT capabilities also allow us to develop and roll-out
new IT initiatives quickly.
Besides providing various tools on our websites to B2B and B2C Customers, such as “Funds
Selector” and “Chart Centre” for the comparison of funds, we have also created mobile
applications for our Customers. For instance, our B2C Customers can download our mobile
application, “FSM Mobile”, free and make use of the tools to research and analyse funds, as well
as keep themselves updated on more recent funds-related and markets-related news and view
their holdings. Our B2B Customers can also read articles and analyse funds on iPad mobile
applications.
Our efforts to stay innovative in the provision of our IT services have been recognised in recent
years. In August 2009, Fundsupermart.com (HK) won the “Online Usability” award at The Best
Practice Financial Services Award 2009, which was organised by Benchmark Magazine and Best
Practice Management Magazine. In December 2010, Fundsupermart.com (HK) was named
“Outstanding Achiever” award in the “Online Capabilities Award” at the Benchmark Wealth
Management Awards 2010. In December 2011, Fundsupermart.com (HK) received the
“Best-in-Class” award in the “Best in Online Usability” category at the Benchmark Wealth
Management Awards 2011. In November 2013, Fundsupermart.com (HK) received the
“Best-in-Class” award in the “Online Usability – Independent” category at the Benchmark Wealth
Management Awards 2013. In January 2014, our Company was awarded a Silver award in the
“Most Informative Use of Mobile” category at the Mob-Ex Awards.
We offer a range of services that assists our Customers in their business
We have focused on offering a range of services with the intention of enabling our B2B Customers
who are FAs to focus on their core business. One such service that we provide is the efficient
calculation and settlement of upfront commissions and recurring wrap fees and trailer fees for B2B
Customers who are FAs. Our execution and settlement system typically processes the fees on a
quarterly basis and the fees would subsequently be paid to the B2B Customers who are FAs. A
B2B Customer who is an FA can focus on its business by leaving the execution and settlement of
transactions, and collection and processing of fees, to us.
We have also dedicated efforts to help our B2B Customers stay in touch with global trends in the
wealth management industry and the changes to financial regulations. Our “iFAST Global Wealth
Advisers Symposium” brings together wealth advisers from the markets in which we operate, as
well as the industry practitioners from the wealth management industry (for example, from markets
such as the UK and Australia, where investment platforms play an important role in the wealth
management industry), to share their experiences and views on best business practices as well
as the investment and regulatory trends in the various markets. The last three (3) symposiums
were held in Switzerland, US and Greece.
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Our B2C Customers can read articles written by our in-house research team on investment
products and financial planning. Our B2B Customers can also stay updated with research views
via regular seminars that our research team conducts. Our research members provide views in the
media, including ChannelNewsAsia and Lianhe Zaobao in Singapore; iMoney, am730, ET Net
Chinese, ATV, Cable TV, Metro Webtv and Metro Finance Column in Hong Kong; and Busy
Weekly, Yahoo!, and Borneo Post in Malaysia.
Our experienced and committed key management team
Our operations are led by our Chairman and CEO, Mr. Lim Chung Chun and our Group COO, Mr.
Wong Soon Shyan, who each has more than 20 years of working experience in the investment
industry. The experience and in-depth knowledge of our key management team have enabled our
Group to understand the industry, anticipate market trends, and address the needs of customers.
Mr. Lim Chung Chun is the co-founder of our Group as well as a Controlling Shareholder of our
Company. Mr. Wong Soon Shyan has been with our Group since 2000. Both Mr. Lim Chung Chun
and Mr. Wong Soon Shyan have steered our Group through various economic crises. They have
been actively driving the business and our Group’s expansion in various jurisdictions. The
experience and business reputations of Mr. Lim Chung Chun and Mr. Wong Soon Shyan have
assisted us to establish close working relationships with our partners in the industry, including
fund houses and financial institutions, which have been instrumental in the success and growth
of our operations.
QUALITY ASSURANCE
Our Group recognises that the fund distribution industry in the markets in which we operate is
competitive, and it is vital to provide quality services and maintain high standards in our
operations. To attract and retain our customers and to reduce disruptions to our services, we have
adopted various policies and standards for protection of data and information and appointed a
professional third party data centre operator.
To monitor quality and service levels, we also have customer service teams in the jurisdictions in
which we operate who are contactable by phone, email, or on Live Chat via our website and
mobile applications. Any feedback or complaint from the public about our services is documented
and resolved in accordance with our Company’s guidelines.
MAJOR CUSTOMERS
Our Customers include FAs who maintain an investment account with us via a nominee
arrangement, adviser-assisted investors who instruct their FAs to maintain an investment account
with us, DIY Investors who use the Fundsupermart.com Website to maintain an investment
account with us, and any other person who uses the services provided by our Group. The revenue
generated from each individual DIY Investor and adviser-assisted investor is not significant in the
context of our net revenue. However, the aggregation of transactions from FAs who transact with
us on behalf of adviser-assisted investors account for a relatively more significant portion of our
net revenue.
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The following table shows the list of FAs who have transacted with us on behalf of adviser-
assisted investors and who accounted for 5% or more of our Group’s net revenue in the Period
Under Review:
Name of FA
FY2011
%
FY2012
%
FY2013
%
9M2014
%
Financial Alliance Pte Ltd 7.4 7.8 7.7 7.5
Professional Investment Advisory
Services Pte Ltd 11.3 12.6 11.4 11.2
IPP Financial Advisers Pte Ltd 15.5 12.7 10.3 8.5
The contribution of IPP Financial Advisers Pte Ltd decreased from 15.5% in FY2011 to 8.5% in
9M2014 as a result of our Group’s increasing net revenue and the decreasing net revenue
contribution from IPP Financial Advisers Pte Ltd in dollar value over the Period Under Review.
As part of our business model, we have a commission and fee sharing arrangement with the FAs
who have transacted with us on behalf of the adviser-assisted investors. The following table
shows the list of FAs that accounted for 5% or more of our Group’s commission and fee paid or
payable to all FAs for the Period Under Review:
Name of FA
FY2011
%
FY2012
%
FY2013
%
9M2014
%
CIMB Bank Berhad 0.9 1.6 5.7 5.2
Financial Alliance Pte Ltd 10.8 11.0 10.1 9.7
Finexis Advisory Pte Ltd 5.4 6.1 5.1 4.8
IPP Financial Advisers Pte Ltd 22.4 18.1 16.4 11.0
Professional Investment Advisory
Services Pte Ltd 16.6 16.5 14.6 15.3
Unicorn Financial Solutions Pte
Limited 1.1 4.4 6.3 6.1
The amount of commission and fee paid or payable to a FA is correlated to the amount of net
revenue derived from adviser-assisted investors who have transacted with us through such FA.
As at the Latest Practicable Date, to the best of our Directors’ knowledge, we are not aware of any
information or arrangement which would lead to a cessation or termination of our relationship with
any of our major Customers. As at the Latest Practicable Date, none of our Directors or
Substantial Shareholders has any interest, direct or indirect, in any of our major Customers.
MAJOR SUPPLIERS
Our core business is the distribution of Investment Products. We obtain such Investment Products
from our Suppliers with whom we have entered into a number of distribution agreements. As at the
Latest Practicable Date, we have entered into more than 115 distribution agreements with our
Suppliers for the distribution of Investment Products.
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The following table shows our Suppliers who accounted for 5% or more of our Group’s net
recurring revenue for the Period Under Review. Our recurring revenue includes Trailer Fees,
which are calculated based on certain percentages of the average AUA of our Investment
Products supplied by fund houses:
Name of Fund House
FY2011
%
FY2012
%
FY2013
%
9M2014
%
Aberdeen Asset Management Asia
Limited 18.5 18.3 18.0 15.4
Deutsche Asset Management (Asia) 6.4 5.7 4.5 4.4
Eastspring Investments (Singapore)
Limited 6.0 6.0 5.9 5.6
First State Investments (Singapore) 15.0 13.7 12.9 12.0
Lion Global Investors Limited 6.7 6.5 5.0 4.2
Schroder Investment Management 5.5 5.3 5.7 5.2
The amount of net recurring revenue derived from the AUA of Investment Products supplied by the
fund houses is correlated to the amount of net revenue derived from DIY Investors and
adviser-assisted investors.
None of our Directors or Substantial Shareholders has any interest, direct or indirect, in any of our
major Suppliers.
ORDER BOOK
Due to the nature of our business and operations, we do not have an order book.
INVENTORY MANAGEMENT
Due to the nature of our business and operations, we do not maintain any inventory.
INTELLECTUAL PROPERTY
We own or license the intellectual property rights including our internet domain names,
trademarks, logos, software programmes and technology platform programming codes used in the
course of our business. We are dependent on the continued ownership and/or licensing of such
intellectual property rights for the operation of our business and for branding and marketing our
services to our customers.
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As at the Latest Practicable Date, our Group has registered the following trademarks
(1)
:
Trademark Country Class
Trademark
Number Validity Period
Singapore 36 T0205133B 15-04-2012 to
15-04-2022
Hong Kong 36 300585757 22-02-2006 to
21-02-2016
Australia 36 1239479 07-05-2008 to
07-05-2018
Japan 36 5204643 20-02-2009 to
20-02-2019
Taiwan 36 01342537 16-12-2008 to
15-12-2018
Fundsupermart.com
FundSupermart.com
FundSuperMart.com
fundsupermart.com
FUNDSUPERMART.COM
Malaysia 36 06001868 10-02-2006 to
10-02-2016
Note:
(1) Excludes trademarks which are not material and not in use.
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Trademark Country Class
Trademark
Number Validity Period
Singapore 36 T06/28140E 20-12-2006 to
20-12-2016
Hong Kong 36 301067094 07-03-2008 to
06-03-2018
Malaysia 36 06001867 10-02-2006 to
10-02-2016
Japan 09 5213795 13-03-2009 to
13-03-2019
Australia 36 1240161 12-05-2008 to
12-05-2018
China 36 6605845 21-03-2012 to
20-03-2022
Singapore 36 T06128140E 20-12-2006 to
20-12-2016
Hong Kong 36 301067094 07-03-2008 to
06-03-2018
Malaysia 36 06001867 10-02-2006 to
10-02-2016
Australia 36 1240162 12-05-2008 to
12-05-2018
Japan 36 5204642 20-02-2009 to
20-02-2019
Taiwan 36 01342538 16-12-2008 to
15-12-2018
Hong Kong 36 300585766 22-02-2006 to
21-02-2016
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Trademark Country Class
Trademark
Number Validity Period
Singapore 36 T0720149I 11-10-2007 to
11-10-2017
Hong Kong 36 300869428 11-05-2007 to
10-05-2017
Malaysia 36 07017238 03-09-2007 to
03-09-2017
South Korea 36 41-0169172 23-06-2008 to
23-06-2018
Mauritius 36 05685/2008 21-12-2007 to
21-12-2017
Philippines 36 4-2007-500603 21-01-2008 to
21-01-2018
Taiwan 36 01313484 01-06-2008 to
31-05-2018
Benelux 36 0831788 07-11-2007 to
02-08-2017
Japan 36 5174384 17-10-2008 to
17-10-2018
Singapore 36 T0910821F 28-09-2009 to
28-09-2019
Hong Kong 36 301452825 19-10-2009 to
18-10-2019
Singapore 09 T0707634A 10-04-2007 to
10-04-2017
Hong Kong 09 301067120 07-03-2008 to
06-03-2018
Malaysia 09 08004469 07-03-2008 to
07-03-2018
Japan 09 5213795 13-03-2009 to
13-03-2019
South Korea 09 40-789498 20-05-2009 to
20-05-2019
Taiwan 09 01343765 01-01-2009 to
31-12-2018
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Trademark Country Class
Trademark
Number Validity Period
Singapore 09 T0707636H 10-04-2007 to
10-04-2017
Hong Kong 09 301067139 07-03-2008 to
06-03-2018
Malaysia 09 08004470 07-03-2008 to
07-03-2018
Singapore 09 T0710454Z 15-05-2007 to
15-05-2017
Hong Kong 09 301067111 07-03-2008 to
06-03-2018
Malaysia 09 08004471 07-03-2008 to
07-03-2018
China 09 6605844 19-03-2008 to
06-03-2020
Japan 09 5192911 26-12-2008 to
26-12-2018
South Korea 09 40-789501 20-05-2009 to
20-05-2019
Taiwan 09 01343766 01-01-2009 to
31-12-2018
Singapore 09 T0710457D 15-05-2007 to
15-05-2017
Hong Kong 09 301067102 07-03-2008 to
06-03-2018
Malaysia 09 08004567 10-03-2008 to
10-03-2018
China 09 6605848 19-03-2008 to
20-06-2020
Australia 09 1240160 12-05-2008 to
12-05-2018
Singapore 36 T1205158J 11-04-2012 to
11-04-2022
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Trademark Country Class
Trademark
Number Validity Period
Hong Kong 36 301776295 30-11-2010 to
29-11-2020
As at the Latest Practicable Date, our Group owns the following domain names:
Domain Name Registration Date Renewal Due Date
ifastcorporation.com.sg 09-04-2003 09-04-2016
ifastfinancial.com.sg 10-04-2003 10-04-2016
fundsupermart.sg 03-01-2005 03-01-2015
ifastfinancial.sg 03-01-2005 03-01-2015
fundsupermart.in 03-08-2007 03-08-2017
fundsupermart.hk 03-08-2007 03-08-2016
fundsupermart.co.in 03-08-2007 03-08-2017
ifastfinancial.in 03-08-2007 03-08-2017
ifastfinancial.hk 03-08-2007 03-08-2016
ifastfinancial.co.in 03-08-2007 03-08-2017
ifastfinancial.com.tw 03-08-2007 03-08-2016
ifastfinancial.co.kr 03-08-2007 03-08-2016
ifastcapital.com 03-08-2007 03-08-2016
facompliance.com 23-01-2008 23-01-2015
facompliance.com.sg 23-01-2008 23-01-2015
facompliance.sg 23-01-2008 23-01-2015
ifastpensions.hk 13-03-2008 13-03-2017
ifastpensions.cn 13-03-2008 13-03-2017
vervetec.com.sg 26-03-2008 26-03-2016
vervetec.com.cn 26-03-2008 26-03-2016
vervetec.com.my 01-04-2008 01-04-2016
vervetec.com.hk 04-04-2008 17-04-2016
ifastnetwork.my 01-07-2008 01-07-2016
ifastcorporation.my 01-07-2008 01-07-2016
vervetec.my 30-06-2008 30-06-2016
ifastpensions.my 01-07-2008 01-07-2016
ifastnetwork.com.my 30-06-2008 30-06-2016
ifastnetwork.hk 25-06-2008 25-06-2016
ifastcorporation.com.my 30-06-2008 30-06-2016
ifastcorporation.hk 25-06-2008 25-06-2016
ifastcorporation.cn 25-06-2008 25-06-2016
ifastpensions.com.my 30-06-2008 30-06-2016
bondsupermart.com 29-09-2004 29-09-2016
facompliance.my 31-07-2008 31-07-2016
facompliance.com.my 31-07-2008 31-07-2016
ifastcorp.com 03-01-2007 03-01-2015
fundsupermart.com.hk 04-10-2005 25-10-2016
ifastfinancial.com.hk 07-12-2005 08-12-2016
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Domain Name Registration Date Renewal Due Date
ifastfinancial.com 08-04-2003 08-04-2019
ifastcorporation.com 08-04-2003 08-04-2019
fundsupermart.com.tw 19-03-2007 19-03-2016
fundsupermart.my 06-03-2009 08-03-2016
ifastcapital.my 06-03-2009 08-03-2016
ifastgp.com 26-05-2009 26-05-2015
ifastgp.com.hk 22-06-2009 22-06-2016
ifastgp.com.sg 06-08-2009 06-08-2016
ifastgp.sg 06-08-2009 06-08-2016
fundsupermart.com.sg 08-02-2000 08-02-2015
vervetec.com 12-03-2007 12-03-2016
ifastcapital.com.my 06-08-2007 06-08-2016
fundsupermart.com.my 26-09-2006 26-09-2016
myfsm.in 19-03-2012 19-03-2016
fsm.com.hk 22-03-2012 22-03-2015
fsm.hk 22-03-2012 22-03-2015
ifastpensions.com 27-04-2006 27-04-2017
connectifast.com 30-05-2012 30-05-2016
ifast.com.hk 07-12-2005 08-12-2015
ifastps.com.cn 04-04-2014 04-04-2016
Our Group has not encountered any issues with the renewal of our domain names in the past.
Barring any unforeseen circumstances, we do not foresee any issues with the future renewal of
domain names which are material to our Group’s business and operations.
Save as disclosed above, we do not use or own any other registered patents, trademarks or
intellectual property which are material to our business. Our business and profitability are also not
materially dependent on any other patent or licence or any other intellectual property rights. As at
the Latest Practicable Date, we do not have any pending applications for registration of intellectual
property rights.
RESEARCH AND DEVELOPMENT
Our business and operations are largely Internet-based and it is important for us to stay abreast
of technological changes in order to remain competitive. We focus our research and development
on the areas of software and technology. We have been developing our IT platform services and
infrastructure since our incorporation and we have a significant number of employees who are
hired to focus on developing new and business-friendly applications for our Platform. We have
obtained a number of awards and recognitions for our IT capabilities. Additionally, our Platform
capabilities including tools such as the “Funds Selector” and “Chart Center”, are used by our DIY
investors, looking to carry out their own funds comparisons and analyses.
In April 2011, in line with the shift of Internet-based users to mobile interfaces, we developed our
first mobile application for the iPhone, “FSM Mobile” in Singapore. “FSM Mobile” is a free mobile
application that our Customers can download to access popular tools found on our
Fundsupermart.com Website, as well as enjoy features of Fundsupermart.com specifically
designed for mobile users. “FSM Mobile” has since been rolled out on other electronic devices
such as iPads and Androids and in other markets such as Hong Kong and Malaysia. In January
OUR BUSINESS
162
2014, we were awarded a Silver award at the Mob-Ex Awards 2014, in the “Most Informative Use
of Mobile” category. Please refer to the section entitled “Our Business – History and
Development ” above for further details of our awards.
We have also developed an iPad application for the FAs using our B2B Platform in Singapore,
Hong Kong and Malaysia.
Notwithstanding the above, our research and development expenditure is not material as
compared to our net revenue for the Period Under Review.
MARKETING
Our branding and marketing strategies are spearheaded by our Chairman and CEO, Mr. Lim
Chung Chun. He is supported by our business division heads that are responsible for developing
strategies based on geographical markets and business divisions to increase our Group’s brand
awareness and recognition amongst DIY Investors, financial institutions and FAs. We seek
potential new partnerships to explore the possibilities of distributing various funds offered by
financial institutions, and we also promote our services through media relationships and social
media platforms.
In respect of our B2B Business, our marketing and business development activities are carried out
by our business development team and executives. We organise regular seminars, workshops
and presentations by fund houses to equip and update FAs with Investment Products information
and investment knowledge. We also organise seminars to teach them to use the functions
available on the iFAST Financial Website. We also publish “iGP INSIGHTS”, a magazine catered
for FAs and their clients.
In respect of our B2C Business, our marketing activities are carried out primarily through our
Fundsupermart.com Website. We also organise public seminars which include the provision of
economic outlooks and market updates and presentations from various fund houses. We also
conduct workshops periodically to help our customers gain familiarity with the functions and tools
available on our Fundsupermart.com Website and acquire basic knowledge about investing in
Investment Products.
We have also dedicated efforts to help our B2B Customers stay in touch with global trends in the
wealth management industry and the changes to financial regulations. Our “iFAST Global Wealth
Advisers Symposium” brings together wealth advisers from the markets in which we operate, as
well as the industry practitioners from the wealth management industry (for example, from markets
such as the UK and Australia, where investment platforms play an important role in the wealth
management industry), to share their experiences and views on best business practices as well
as the investment and regulatory trends in the various markets. The last three (3) symposiums
were held in Switzerland, US and Greece.
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PROPERTIES AND FIXED ASSETS
As at the Latest Practicable Date, we do not own any properties. As at the Latest Practicable Date,
our Group leases the following properties:
Properties
Lessee Lessor Location Tenure
Approximate
Built-in area
(sq ft)
Annual rental
Use of
property
iFAST
Financial
Pte Ltd
Ocean
Properties
Private
Limited
10 Collyer Quay,
#26-01 to 05
Ocean Financial
Centre, Singapore
049315
14 April 2011 to
13 April 2017
18,299 S$1,712,786.40 Office
iFAST
Financial
Pte Ltd
(1)
Chan Lai
Wang
10 Bukit Batok
Crescent,
The Spire,
#09-03,
Singapore 658079
23 December 2011
to 22 December
2014
(1)
700 S$21,600.00 Office for
Business
Continuity
Plan
iFAST
Financial
Pte Ltd
(1)
VAP
Universe
Private
Limited
73 Ubi Road 1,
#07-60
Oxley Bizhub,
Singapore 408733
23 December 2014
to 22 December 2017
976 S$25,200.00 Office for
Business
Continuity
Plan
iFAST
Capital
Sdn Bhd
ING
Insurance
BHD
Level 28 and 29,
Menara Standard
Chartered,
30 Jalan Sultan
Ismail, 50250
Kuala Lumpur
15 June 2011 to
14 June 2016
16,714 RM1,083,067.20 Office
iFAST
Capital
Sdn Bhd
Ooi Khye
Siang
No. 24-1
Persiaran Bayan
Indah, Bayan Bay,
11900 Bayan
Lepas, Penang
1 September 2014
to 31 August 2016
1,345 RM38,400.00 Office
iFAST
Financial
(HK)
Limited
The
Hongkong
Land
Property
Company,
Limited
Suites 4601 and
4606-4608, 46/F
Two Exchange
Square, 8
Connaught Place,
Central, Hong
Kong
1 October 2012 to
31 December 2017
8,800 HKD8,472,960.00
for 1 October
2012 to
31 December
2014
HKD12,179,880.00
for 1 January
2015 to
31 December
2017
Office
iFAST
Platform
Services
(Shenzhen)
Qianhai
Limited
Ke Xue
Xia
Room 1307,
East Wing,
Hai’an Building,
Hai De Three
Avenue,
Central Business
& Culture Zone,
Nanshan District,
Shenzhen
1 June 2014 to
31 May 2016
1,692 RMB341,631.84
(to be
increased to
RMB358,713.43
from 1 June
2015)
Office
Note:
(1) iFAST Financial does not intend to renew the lease, and will be leasing the premises at 73 Ubi Road 1, #07-60 Oxley
Bizhub, Singapore 408733, for its business continuity plan.
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164
Fixed Assets
As at 31 December 2013 and 30 September 2014, our fixed assets comprise computer equipment,
office equipment, furniture and fittings and office renovation:
Description
Net Book Value as at
31 December 2013
S$’000
Net Book Value as at
30 September 2014
S$’000
Computer Equipment 748 1,062
Office Equipment 32 30
Furniture and Fittings 39 30
Office Renovation 815 605
Total 1,634 1,727
There are no major encumbrances on the use of all our major equipment and all our major
equipment are fully insured.
There are no regulatory or environmental requirements that may materially affect the utilisation of
our fixed assets.
INSURANCE
As at the Latest Practicable Date, our Group has taken the following insurance coverage:
(a) group term life insurance;
(b) hospitalisation and surgery insurance;
(c) cyber risk insurance;
(d) directors and officers liability insurance;
(e) financial advisers professional indemnity;
(f) financial institutions professional indemnity; and
(g) all risks insurance.
Our Directors are of the opinion that the above insurance policies are adequate for our existing
business and operations and we will review and procure the necessary additional insurance
coverage as and when the need arises. However, significant disruption to our operations or
damage to our properties or assets, whether as a result of fire and/or other causes, may still have
a material adverse impact on our results of operations or financial condition. There is no
assurance that any claims made or decided against us will be covered by insurance, or if covered,
will not exceed the limits of our coverage. For further details, please refer to the section entitled
“Risk Factors” of this Prospectus.
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REGULATORY COMPLIANCE
Compliance Team
As part of our efforts to ensure that our Group complies with both regulatory and licensing matters,
we have compliance teams in Singapore, Hong Kong and Malaysia. The Singapore compliance
team comprises an assistant director, the head of the department, who oversees the work of four
(4) staff organised into two (2) teams to support the B2B and B2C Businesses. The head of
department in turn reports directly to our Group COO, Mr. Wong Soon Shyan. In Hong Kong, our
compliance department has three (3) employees, and in Malaysia, our compliance department has
two (2) employees.
The work of the compliance team can be broadly categorised as:
(a) advising business units on regulatory requirements and procedures to ensure compliance;
(b) monitoring of business activities and reporting, including checks and reports on anti-money
laundering and countering financial terrorism matters;
(c) working with business units on rectifications or areas of improvements; and
(d) licensing and appointment of representatives as well as regulatory reporting.
Compliance Training
When a new staff joins our Company’s compliance department, the head of the department will
conduct an introductory briefing for such staff. This briefing will cover various aspects including
but not limited to our Company’s licensing status, business overview, applicable rules,
regulations, licence conditions and past regulatory/compliance issues.
All compliance staff are also required to take and pass the Capital Markets and Financial Advisory
Services Module 5 (Regulations). In addition, our Company also sends our compliance staff for a
Diploma in Compliance, which is a course conducted by the International Compliance Association
(“ICA”). This is a diploma course comprising of five (5) modules conducted over a 10-month
period. The five (5) modules are as follows:
(a) compliance function;
(b) compliance culture;
(c) regulatory environment;
(d) industry and product knowledge; and
(e) compliance and the business unit.
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After the completion of the Diploma in Compliance, our Company continues to encourage our
compliance staff to participate in continuing education including attending courses, workshops
and/or obtaining relevant certifications. The continuing education programmes which our staff
attends include:
(a) Diploma in Anti-Money Laundering offered by ICA;
(b) Certified Compliance Risk Officer course conducted by the Asia Risk Management Institute;
(c) Certified Financial Services Auditor course conducted by the Institute of Internal Auditors;
(d) part time law degree offered by the University of London;
(e) seminar on advisory and suitability obligations conducted by the Singapore Management
University School of Law; and
(f) external workshops on topics such as Personal Data Protection, Foreign Account Tax
Compliance Act and legal/regulatory issues relating to cloud computing.
In relation to other new joiners of our Company who are in non-compliance roles, these employees
are required to go through compulsory training (which includes a quiz) on Anti-Money Laundering
and Countering the Financing of Terrorism and Fair Dealing. Annual refresher trainings sessions
are also carried out for all staff. For the quiz at both the initial and annual refresher trainings, all
staff are required to achieve a score of at least 80% to be considered as having passed the quiz
and met the training requirements.
In addition, employees providing financial advisory services are provided annual training on our
Company’s advisory policies and procedures, which covers regulatory areas such as:
(a) making recommendations with a reasonable basis (fact-find) and taking into account the
results of the customer knowledge assessment;
(b) various product information and remuneration disclosures;
(c) marketing requirements; and
(d) fair dealing.
Annual training sessions are conducted for our employees involved in operations and settlement
to keep them aware and up to date on regulatory requirements relating to their functions. Topics
covered in these training sessions include:
(a) administration of customer trust accounts;
(b) segregation of customers’ securities and money;
(c) depositing and withdrawal of customers’ securities and money; and
(d) sending contract notes and statements.
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If our Company’s staff or employees need to seek advice or clarifications on legal and regulatory
issues, they are encouraged to consult our Company’s in-house legal counsel, and if necessary,
they are also encouraged to seek the advice of external law firms that our Company works closely
with.
Risk Management
To improve the robustness of our risk management, we have also set up:
(a) an internal audit team to review risk exposures based on risk matrices and compliance with
performance audits. The internal audit team has a staff strength of three (3) members and
carries out quarterly reviews. The internal audit team reports to our Audit Committee every
quarter, with an administrative reporting line to our CEO;
(b) an IT risk team to manage various technology risks by identifying, assessing, recommending
and putting in place appropriate technology security policies, systems and monitoring
processes. The IT risk team has a staff strength of two (2) members and has the committed
resources to expand the team as necessary to adequately cope with the growth of our
business; and
(c) a management risk committee to assess the risk of new and existing products and services,
including risks related to operations, regulatory, compliance, services and processes. The
management risk committee is guided by the Board’s risk committee.
Save as disclosed above and in the sections entitled “Risk Factors” and “Government Regulations
and Licensing” in this Prospectus, as at the Latest Practicable Date, our business is not subject
to any special legislation or regulatory controls which have a material effect on our business, other
than those generally applicable to companies and businesses.
Save as disclosed above and in the sections entitled “Risk Factors” and “Government Regulations
and Licensing” in this Prospectus, we have obtained all requisite approvals, and are in compliance
with the laws and regulations that would materially affect our business operations.
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The following section on “Investment Platforms” includes extracts from information and data
prepared by The Platforum, Investment Trends Pty Limited and Cerulli Associates Asia Pte Ltd as
Independent Market Research Consultants, for use in this Prospectus. You should note that no
independent verification has been carried out on any facts or statistics that are directly or
indirectly derived from such prepared information and data, official government and non-official
sources.
The information and data in this section that has been provided by the Independent Market
Research Consultants may reflect estimates from publicly available secondary sources and trade
survey analysis of the opinions and perspectives of leading industry players, and such information
and data were prepared primarily as a market research reference. Research by each Independent
Market Research Consultant should not be considered as the opinion of such Independent Market
Research Consultant as to the value of any security or the advisability of investing, or not
investing, in us.
While we believe that the information and data are reliable, we cannot ensure the accuracy of the
information or data, and neither our Group, any of the Joint Issue Managers, Bookrunners and
Underwriters nor any of our respective affiliates or advisers have independently verified this
information or data. You should not place undue reliance on any of such information contained in
this section of this Prospectus. There may have been changes in our industry and the various
other sectors which could affect the accuracy or completeness of the information in this section.
INVESTMENT PLATFORMS
In Asia, investment platforms have a relatively short history. The evolution of investment platforms
in the developed financial markets of the UK and Australia offers valuable insights on the future
development and potential of investment platforms in Asia. In the UK and Australia, investment
platforms have been playing an important role in the wealth management business for a number
of years.
1. Evolution of UK investment platforms (source: Platforum)
In the UK, investment platforms have been around since 2000 (a number of online
stockbrokers existed prior to this). There are currently around 23 investment platforms in the
industry operating via financial advisers and 15 working directly with end customers. The
assets under administration and fund sales going to investment platforms have seen
significant growth since 2000, indicating the considerable importance they play in the wealth
management industry. In the UK, the majority of retail assets are invested via financial
advisers. The significant growth in UK investment platform assets has been primarily due to
advisers moving customers’ assets on-platform.
INDUSTRY OVERVIEW
169
1.1 Assets under administration and fund sales via UK adviser platforms
From 2001 to 2013, assets under administration on adviser platforms has grown from £10.4
billion to £265.3 billion – an annualised growth rate of 30.1%. At the end of 2001, assets
under administration on adviser platforms was 4.4% of the size of IMA (Investment
Management Association) members’ funds under management. By the end of 2013, this has
risen to 35.0%, demonstrating the substantial increase in the proportion of assets that are
held on adviser platforms.
1
Figure 1. Historical assets under administration of UK adviser platforms
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£50
£100
£150
£200
£250
£300
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/
2
0
0
5
1
2
/
1
/
2
0
0
5
6
/
1
/
2
0
0
6
1
2
/
1
/
2
0
0
6
6
/
1
/
2
0
0
7
1
2
/
1
/
2
0
0
7
6
/
1
/
2
0
0
8
1
2
/
1
/
2
0
0
8
6
/
1
/
2
0
0
9
1
2
/
1
/
2
0
0
9
6
/
1
/
2
0
1
0
1
2
/
1
/
2
0
1
0
6
/
1
/
2
0
1
1
1
2
/
1
/
2
0
1
1
6
/
1
/
2
0
1
2
1
2
/
1
/
2
0
1
2
6
/
1
/
2
0
1
3
1
2
/
1
/
2
0
1
3
B
i
l
l
i
o
n
s
Source: Platforum
Gross sales via adviser platforms have grown from £8.03 billion per quarter to £17.08 billion
per quarter from 4Q2011 to 4Q2013, a 45.9% annualised increase. At the end of 2011,
financial advisers were placing 67% of their new investment business on-platform. This had
risen to 80% by the end of 2013.
1
The figures from the Investment Management Association (IMA) – the trade body for UK investment management firms
– do not represent the total assets that are available on platforms. The figures are used as a basis of comparison to
demonstrate platforms’ increasing overall share of UK retail investment assets. Total UK investable assets, including
workplace pensions and direct holdings of securities, are higher.
Source: Investment Management Association on its website:http://www.investmentfunds.org.uk/fund-statistics/full-
figures/. Investment Management Association has not provided its consent, for the purposes of Section 249 of the
Securities and Futures Act, to the inclusion of the information extracted from its website, and is therefore not liable for such
information under Sections 253 and 254 of the Securities and Futures Act. While we and the Joint Issue Managers,
Bookrunners and Underwriters have taken reasonable actions to ensure that the relevant information from Investment
Management Association’s website has been reproduced in its proper form and context, and that the relevant information
has been extracted accurately and fairly from such website, neither we nor the Joint Issue Managers, Bookrunners and
Underwriters nor any other party has conducted an independent review of the information contained in that website or
verified the accuracy of the contents of the relevant information.
INDUSTRY OVERVIEW
170
Figure 2. Quarterly adviser platform gross sales
£0
£2
£4
£6
£8
£10
£12
£14
£16
£18
£20
Q4
2011
Q1
2012
Q2
2012
Q3
2012
Q4
2012
Q1
2013
Q2
2013
Q3
2013
Q4
2013
Q1
2014
B
i
l
l
i
o
n
s
Source: Platforum
Figure 3. Proportion of advised investments being placed on-platform
67%
69%
71%
67%
69%
67%
76% 76% 76%
5%
5%
4%
5%
4%
6%
6% 7%
6%
28%
26%
25%
28% 27% 27%
18% 17% 18%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Q4
2011
Q1
2012
Q2
2012
Q3
2012
Q4
2012
Q1
2013
Q2
2013
Q3
2013
Q4
2013
Off -platform (other)
Directly with fund
manager
On-platform
Source: Platforum
Note: “Off-platform” and “On-platform” refers to (i) investments being placed through distribution channels other
than an investment platform and (ii) investments being placed through an investment platform, respectively.
1.2 Factors contributing to investment platforms’ growth in the UK
The UK investment platforms have grown at a rapid pace over the past 14 years due primarily
to the following factors:
(a) Investment platforms offered access to funds at a lower cost than going directly to fund
houses. For advisers and end consumers, the investment platform was initially paid out
of rebates from fund managers. Tax-efficient accounts and administration services were
often included, so the investment platform appeared cost-neutral. Although payments
from fund managers to investment platforms are now prohibited (because of regulatory
changes), investing via investment platforms remains cheaper that investing directly via
fund managers.
INDUSTRY OVERVIEW
171
(b) Advisers used investment platforms to operate more efficient business models,
managing investments online rather than via phone and paper-based services.
Investment platforms are also able to administer advisers’ fees.
(c) Investment platforms were able to provide consumers and advisers access to a wider
range of products.
(d) Regulation has required financial advisers to treat customers in a consistent manner.
Investment platforms have given advisers a consolidated view of their clients’
investments, facilitating a broad view of their clients and enabling a consistent business
approach.
(e) Recently, there has been a rise in the use of model portfolios and outsourced portfolio
management by advisers. Investment platforms have enabled advisers to use these to
efficiently manage the needs of multiple clients.
1.3 Projections
The UK market is expected to continue growing in the next five (5) years and investment
platforms’ contribution via funds sales and assets under administration is expected to see
annual adviser platform growth rates of 22.5% until the end of 2016, before slowing to around
10% per year in 2017 and 2018. Assets on adviser platforms are expected to increase from
£265 billion at the end of 2013 to £585 billion at the end of 2018.
Figure 4. Projected increase in assets under administration via investment platforms from
2013 to 2018
£0
£100
£200
£300
£400
£500
£600
1
2
/
1
/
2
0
0
7
6
/
1
/
2
0
0
8
1
2
/
1
/
2
0
0
8
6
/
1
/
2
0
0
9
1
2
/
1
/
2
0
0
9
6
/
1
/
2
0
1
0
1
2
/
1
/
2
0
1
0
6
/
1
/
2
0
1
1
1
2
/
1
/
2
0
1
1
6
/
1
/
2
0
1
2
1
2
/
1
/
2
0
1
2
6
/
1
/
2
0
1
3
1
2
/
1
/
2
0
1
3
6
/
1
/
2
0
1
4
1
2
/
1
/
2
0
1
4
6
/
1
/
2
0
1
5
1
2
/
1
/
2
0
1
5
6
/
1
/
2
0
1
6
1
2
/
1
/
2
0
1
6
6
/
1
/
2
0
1
7
1
2
/
1
/
2
0
1
7
6
/
1
/
2
0
1
8
1
2
/
1
/
2
0
1
8
B
i
l
l
i
o
n
s
6
/
1
/
2
0
1
4
2
0
1
4
6
/
1
/
2
0
1
5
2
0
1
5
6
/
1
/
2
0
1
6
2
0
1
6
6
/
1
/
2
0
1
7
2
0
1
7
6
/
1
/
2
0
1
8
2
0
1
8
Source: Platforum
INDUSTRY OVERVIEW
172
2. Evolution of Australian investment platforms (Source: Investment Trends)
Figure 6. Size of the Australian platform industry by funds under management (FUM)
$275
billion
$260
billion
$332
billion
2011 2012
Superannuation & pension accounts Investment accounts
2013
28% 29%
70% 71% 72%
30%
Source: Investment Trends
Figure 7. Average proportion of new client inflows invested via platforms
78% 78%
82%
78%
79%
75%
72% 72%
76%
74%
70%
75%
74%
64%
66%
68%
70%
72%
74%
76%
78%
80%
82%
84%
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Note: Projection in 2015 is from the 2012 survey, projection for 2016 is from the 2013 survey and projection for 2017
is from the 2014 survey.
Source: Investment Trends, Australian Planner Technology Report, May 2014
INDUSTRY OVERVIEW
173
2.1 Factors contributing to investment platforms’ growth in Australia
Investment platforms are indispensible to Australian financial planners and are expected to
continue growing due to factors such as:
(a) Australia’s growing pool of superannuation and pension assets.
(b) Helping planners run their business more efficiently and see more clients in a time of
increased administrative and compliance burden from regulatory changes.
(c) Aiding in client retention by helping planners demonstrate value.
(d) Supporting planners’ evolving appetite for a wider range of products.
The key driver of past and future investment platform business growth in Australia is the
growing pool of superannuation and pension assets, which currently make up 72% of
investment platform assets. There is a total of AUD$1.8 trillion of superannuation assets in
Australia, and this number is set to keep increasing with 9.5% (eventually increasing to 12%)
of every Australian worker’s wage flowing into their superannuation accounts. Consumers
are more likely to see planners as they get older and their balances grow larger, which is
beneficial for investment platforms as planners currently use them to administer most of their
clients’ superannuation assets.
Nearly all Australian financial planners use investment platforms because they help them
conduct their business more efficiently – a necessity following the Future of Financial Advice
reforms and the increased compliance and administrative burden it created. By simplifying
administration, saving them time in managing clients and transacting on a broad range of
assets across multiple clients simultaneously, planners can service a larger number of
clients.
The reporting tools offered by investment platforms help planners better understand a client’s
entire position through consolidated reporting on their investments, and assist in
demonstrating value to clients during periodic review meetings. From a business
perspective, planners are also able to generate business level reports, such as cash
positions of all their clients, and set up automated alerts (messaging from the investment
platform) to help better identify business opportunities and risks.
Investment platforms provide financial planners access to a wide range of investments.
Australian investment platforms not only offer cost effective exposure to mutual funds
(including at wholesale rates), they have evolved their functionality to support financial
planners’ increased use of listed investments such as direct shares and exchange-traded
funds (“ETFs”). Australian investment platforms now receive a greater proportion of
planners’ direct share transactions than online brokers and full service brokers combined.
Investment platforms also help facilitate the administration of clients’ insurance policies and
the payment of premiums through their investment and superannuation accounts. Planners
who derive over a quarter of their revenue from insurance recommendations, currently write
half of their insurance business via investment platforms.
INDUSTRY OVERVIEW
174
2.2 Projections
Assets on adviser platforms are expected to remain high in the Australian market, with new
client inflows invested via platforms at or above 70% from 2014 to 2017.
3. Investment platforms in Asia ex-Japan: History and growth potential
3.1 Background
There are fewer investment platforms in Asia ex-Japan and they have a shorter history
compared to their counterparts in the UK and Australia. In the investment platforms space,
we understand from our discussions and checks with our Suppliers and B2B Customers who
are FAs, that based on our market share of AUA and investment transactions, our Group is
a leading funds and investments distribution platform in Singapore, Hong Kong and
Malaysia. According to Cerulli Associates, our Group is a leading distribution platform among
independent financial advisory firms and the online channel (DIY Investors) in Singapore. We
have initiated plans to enter the Chinese market as well. In Hong Kong and Malaysia, we
believe that there are no dominant players with an independent investment platform similar
to ours which serves both the B2B and B2C market segments, putting us in a position to
benefit from various trends emerging in Asia ex-Japan, including rising wealth, demand for
more wealth management options, entrance of more foreign financial institutions and
regulatory changes.
Similar to the trends seen in UK and Australia, Asia ex-Japan has seen the rapid expansion
of new players (both local and foreign) in the wealth management industry. This has been
noticeable in Singapore and Hong Kong, which are seen as Asia’s wealth management
centres. Both have attracted global wealth management firms to set up office locally, to have
a share of the growing wealth management business due to the growing economies of China,
India and other parts of Asia.
An efficient investment platform that can provide a quick and effective solution to existing and
new financial institutions to rapidly start their business in Asia ex-Japan would stand out in
the wealth management industry. In the case of our Company, we helped a financial
institution to start business quickly and effectively, with our IT infrastructure and award-
winning websites and mobile applications that effectively meet the operational and
transactional requirements of financial institutions and their end clients. Our B2B Platform
offers a suite of Investment Products with multiple product providers, making it easier for B2B
firms to focus on their core business of acquiring and maintaining their client relationships.
The trend in Asia ex-Japan is also moving towards greater usage of the Internet and DIY
Investors are increasingly seeking to invest via online investment platforms. Our B2C
Business has benefited from this trend in Singapore, Hong Kong and Malaysia. This trend
has been bolstered by the demand from investors for a reliable online investment platform
that is cost-competitive versus traditional channels such as banks and insurance agencies,
as well as having a transactional website that offers strong research capabilities to meet their
investment requirements.
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175
3.2 Assets under administration and fund sales via investment platforms in Asia ex-Japan
(Source: Cerulli)
According to Cerulli, from 2011 to 2013, the market share of assets under administration from
investment platforms and financial advisers had grown from 7.5% to 11.4%. The increase in
assets under administration market share from investment platforms and financial advisers
was the highest among the various distribution channels in Asia ex-Japan during the
2011-2013 period.
Figure 8: Asia ex-Japan mutual fund assets under administration by distribution channel,
2011-2013
10.9% 11.5% 12.4%
63.3% 62.6% 59.9%
13.7% 13.3%
11.6%
7.5% 8.0%
11.4%
4.5% 4.7% 4.8%
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
70.0%
80.0%
90.0%
100.0%
2011 2012 2013
Insurance
Independent financial advisors/platforms
Securities companies
Banks
Direct
Source: Cerulli
3.3 Future growth of investment platforms in Asia ex-Japan
The growth of investment platforms in the UK and Australia offers interesting insights, as the
investment platforms have grown to be an integral and dominant part of the funds
management business. In Australia, according to Investment Trends Pty Limited, new client
money inflows via investment platforms have stood at between 72% and 82% in the period
2005-2013. According to the statistics from Platforum, financial advisers in the UK were
placing 80% of their new business via investment platforms by end of 2013. The market
share of assets under administration via investment platforms in the UK had grown from
4.4% at the end of 2001 to 35.0% by the end of 2013, which shows the value of using
investment platforms for financial advisers.
INDUSTRY OVERVIEW
176
According to statistics from Cerulli, with assets under administration market share from
investment platforms in Asia ex-Japan at the single-digit level over a three-year average from
2011 to 2013, the assets under administration market share from investment platforms has
the potential to grow further in the coming years. While we do not expect assets under
administration market share from investment platforms and financial advisers to increase in
the near term to the levels in the UK (where new business from financial advisers via
investment platforms stood at 80% in 2013, according to Platforum) and Australia (where
new client money inflows via investment platforms stood at between 72 to 82% between 2005
to 2013, according to Investment Trends Pty Limited), we believe there to be potential for
growth in the medium to long term.
Based on the growth we have seen in the markets we have been operating in for a number
of years (Singapore, Hong Kong and Malaysia) and the potential of the PRC market as well
as the various future trends expected in the financial and regulatory environment in Asia
ex-Japan, we believe the market share from investment platforms in Asia ex-Japan will
continue to grow in the coming years.
3.4 Factors that contribute to the future growth of investment platforms in Asia ex-Japan
(a) Rapid economic growth in Asia ex-Japan and greater adoption of investment platforms:
Rapid economic growth has led to rising wealth among a rapidly growing middle class.
This will lead to more individuals seeking wealth management advice and solutions
from banks, financial advisers and financial institutions (a market segment that uses
investment platforms). We expect greater adoption by banks and financial institutions of
investment platforms as they tap onto these new opportunities as an investment
platform can offer them convenience in operations and products distribution and a ready
one-stop solution for funds and investments distribution to their clients.
(b) Greater trend for investors to move to online channels:
With Internet penetration at high levels in markets such as Singapore and Hong Kong
and with rapid growth in the Internet penetration rate in other Asian markets ex-Japan
such as Malaysia and China, more investors could be doing their investments online.
With greater comfort in using the Internet for e-commerce transactions, online investing
can be expected to take off among more investors in these Asian markets ex-Japan, a
trend that investment platforms can tap onto.
(c) Rapid emergence of banks, financial advisers and financial institutions in Asia’s wealth
management centres:
With Singapore and Hong Kong positioning themselves as leading wealth management
centres in Asia, financial players, both global and local, are positioning themselves to
have a business presence in these markets. As these new players set up their
operations in Asia ex-Japan, they will need an efficient investment platform that can
help with the distribution of investment products as well as a reliable
operational/transactional system, which established investment platforms can offer at
competitive rates. Working with an established investment platform with existing
distribution network with global fund houses and other product providers, the
operational costs for the financial institutions will be lower than having their own
individual business agreements with each fund house.
INDUSTRY OVERVIEW
177
(d) Regulatory changes and trans-border funds recognition schemes in Asia ex-Japan:
Regulatory changes (including Financial Advisory Industry Review or FAIR in
Singapore, and disclosure of commissions in Hong Kong on insurance products) and
trans-border funds recognition schemes (including ASEAN Funds Passport, Cross
Border Funds Recognition Scheme between Hong Kong and China, and Asia Region
Funds Passport) will open up the funds distribution markets further, and we believe that
established investment platforms are well-positioned to offer financial institutions,
banks and financial advisers a ready investment platform to enable them to quickly tap
onto these new business opportunities.
INDUSTRY OVERVIEW
178
PROSPECTS AND TREND INFORMATION
Our Directors believe that the key drivers for the prospects of our Group will be the increasing
proportion of funds flowing through investment platforms in Asia. Specifically, the B2C division
would benefit from an increasing number of DIY Investors while in the B2B division, from the
increasing adoption of investment platforms by banks, FAs and financial institutions.
As more financial institutions see potential in and enter the wealth management industry, such
financial institutions may look to pre-existing services like ours for front-end and back-end support
and capabilities. We believe that financial institutions that utilise our services can quickly become
equipped to execute Investment Product transactions.
Continued growth of our AUA
We expect our AUA to continue to grow for our Group in both our B2B and B2C divisions.
Singapore’s wealth management industry has built a reputation in the world for having a strong
regulatory framework and for offering investors multiple options for wealth management solutions.
As one of the key wealth management centres in Asia, Singapore is expected to see an influx of
global investors who look to Singapore as a reliable jurisdiction for investments. This is expected
to contribute to our AUA growth.
For our Hong Kong and Malaysia operations, we expect AUA growth to continue to be stronger
than our core market in Singapore because our businesses in Hong Kong and Malaysia are still
at an earlier stage of growth compared to Singapore. In Hong Kong, we believe our B2B Platform
is recognised in the wealth management industry and our presence in Hong Kong has
strengthened due to our acquisition of ING Platform Services. Our Hong Kong business has
enjoyed growth from the influx of investor funds from overseas, especially via the Capital
Investment Entrant Scheme (“CIES”). CIES is an investment scheme in Hong Kong allowing
permanent residency status for foreigners, including Chinese nationals with permanent resident
status in a foreign country. A number of our Investment Products that are distributed in Hong Kong
are CIES-qualified. Our B2C Business is also expected to see growth as a result of an increasing
number of DIY Investors.
Malaysia remains our smallest market in terms of AUA, but had offered a higher AUA growth
among the jurisdictions in which we operate as it commenced from a lower AUA base. Growth is
expected to come from increasing numbers of B2B and B2C Customers.
An increase in our AUA will result in an increase in our recurring revenue. However, an increase
in our AUA will not require a corresponding increase in our operating costs, hence giving rise to
economies of scale in our business.
Increased public awareness of investments and financial planning
Certain of our Investment Products are commonly used for long term investments and financial
planning. We have observed an increased public awareness in respect of long term investments
and financial planning. For example, through MoneySENSE, a national financial education
programme for Singapore, the Singapore government has made efforts to enhance the basic
financial literacy of consumers. We believe that this would lead to an increased number of DIY
Investors and adviser-assisted investors turning to FAs for financial planning advice.
PROSPECTS, BUSINESS STRATEGIES AND PLANS
179
Increased demand for transparency on fees and commissions
We believe that the demand for greater transparency on fees and commissions has been led by
regulatory authorities in markets such as the UK (with the Retail Distribution Review (“RDR”)
changes), Netherlands, and Australia. In Asia, we also see an increasing demand for greater
transparency on fees and commissions, albeit at a slower and more gradual pace. In Hong Kong,
for instance, a regulatory requirement to disclose insurance brokerage commissions in dollar
terms has been in place since 2013. We believe that the regulatory trend towards greater
transparency on fees and commissions is a positive development for clients because they will be
able to see for themselves the amount of fees they pay, compare products and distributors on the
competitiveness of such fees, and make a decision on which option to choose.
We believe that an investment platform business like ours will benefit from a trend towards greater
transparency of fees and commissions because it provides awareness to both our customers and
non-customers of how much they are being charged or potentially will be charged for a certain set
of services. To illustrate, our indirect competitors who are the distributors of portfolio bonds or “101
products”, as they are named in Hong Kong, charge their customers a complicated fee structure
coupled with high commissions. We expect that a trend towards greater fee transparency will
highlight to customers of portfolio bonds or “101 products” the high fees they are subject to and
provide awareness of the availability of alternatives such as funds and bonds that are priced more
competitively and distributed via our Platform.
The Guidance Note on Underwriting Class C Business published by the Office of the
Commissioner of Insurance in Hong Kong on 30 July 2014 (the “Guidance Note”) has indicated
that in respect of ILAS products, “indemnity commission, or any standing arrangement that offers
advance payment of commission, is strictly prohibited.” In addition, the Guidance Note states that
commission payable by insurers should be on an earned basis and spread over an appropriate
duration to encourage good after-sale service and duly reward long-term relationship between
intermediaries and policyholders. The Guidance Note will come into effect on 1 January 2015. Our
Group does not distribute ILAS products on our Platform. Barring unforeseen circumstances, we
do not foresee the implementation of the Guidance Note to have a direct adverse impact on our
Group’s business. We are of the view that the implementation of the Guidance Note may result in
the distribution of ILAS products becoming less attractive for intermediaries and may result in
intermediaries becoming more active in the distribution of investment products such as those
distributed on our Group’s platform in Hong Kong.
Increase in operating and other expenses due to our expansion plans
We also expect our operating and other expenses to increase, mainly due to the expansion of our
business with the setting up of our new operations in PRC as well as any proposed acquisitions
and/or investments in other markets in Asia.
Save as disclosed above and under the sections entitled “Risk Factors” and “Management’s
Discussion and Analysis of Results of Operations and Financial Condition” of this Prospectus and
barring unforeseen circumstances, our Directors are not aware of any other known recent trends,
uncertainties, demands, commitments or events that are reasonably likely to have a material
effect on our net sales or revenues, profitability, liquidity or capital resources, or that would cause
financial information disclosed in this Prospectus to be not necessarily indicative of our future
operating results or financial condition. Please also refer to the section entitled “Cautionary Note
on Forward-Looking Statements” of this Prospectus.
PROSPECTS, BUSINESS STRATEGIES AND PLANS
180
BUSINESS STRATEGIES AND FUTURE PLANS
Increasing the penetration of our Platform
We believe there will be a potential increase in the proportion of investments flowing through
investment platforms as compared to traditional investment channels in the markets in which we
operate. Accordingly, we believe our Platform is well-positioned to benefit from this trend.
For our B2B Business, we will continue to broaden the base of B2B Customers using our Platform.
We are working on signing up more banks, insurance companies, FAs and other financial
institutions (including those outside the jurisdictions that we operate in) in this regard. As more
FAs gradually transition to a pricing model based on fees that are calculated as a percentage of
AUA (as compared to an upfront commission-based model), we believe we will be one of the key
beneficiaries.
For our B2C Business, we will continue our efforts to increase the number of DIY Investors using
our Platform. Through improving and broadening the tools, research and information available on
our Fundsupermart.com Website and mobile applications, we intend to attract a higher level of
traffic from customers looking for research and information. We will also continue to invest in
consumer educational efforts, while remaining competitive in the pricing of our services.
Enhancement of our product capabilities, IT and services
While we expect unit trusts to continue to be the key product that we distribute, we intend to
broaden the range of Investment Products that we carry on our Platform, to include more ETFs,
bonds, and eventually shares and securities, subject to relevant regulatory approvals.
Having an investment platform that allows FAs to seamlessly advise across multiple asset classes
is an important consideration in ensuring that we remain a market leader in our business in the
long run. It will also allow us to grow our AUA at a faster pace.
Rather than just focusing on providing purely transactional capabilities, we will be empowering the
FAs to earn ongoing advisory fees across the different asset classes. We will also continue to
improve and broaden the range of tools and supporting services that we provide to FAs and DIY
Investors.
We also have experience in developing B2C capabilities such as websites and mobile applications
to reach out to our B2C Customers. We believe that we are well-placed to provide specialised
services to potential customers such as financial institutions who want to tap on the scale of the
Internet to expand their customer base by providing them with customised and efficiently-
managed websites and mobile applications.
We intend to set aside S$8.0 million from the net proceeds of the issuance of the New Shares and
the Cornerstone Shares for the enhancement of our product capabilities, IT and services.
Mergers and acquisitions strategy
Historically, we have principally grown our AUA organically. While we see the ability to grow our
AUA as key to our long term success, growth strategies through mergers and acquisitions will be
used as ways to boost our potential AUA growth.
PROSPECTS, BUSINESS STRATEGIES AND PLANS
181
We will continue to focus on building a business that has an attractive return on equity and strong
cash-generation capabilities. The scalable nature of our business, together with our internal
resources and the proceeds to be raised from the Listing, will allow us to explore various
acquisition opportunities.
In our existing markets of Singapore, Hong Kong and Malaysia, we believe there are few
investment platforms available for acquisitions. However, there are related businesses with
sizeable AUA and customer base that can complement our existing investment platform business.
We will be actively evaluating these opportunities.
We will also be exploring the possibilities of entering new markets within the Asia-Pacific region
through acquisitions, joint ventures and/or strategic partnerships.
We intend to set aside S$27.2 million from the net proceeds of the issuance of the New Shares
and the Cornerstone Shares for our mergers and acquisitions strategy which includes potential
acquisition opportunities in our existing markets (Singapore, Hong Kong and Malaysia) and in new
markets (China and others).
Expansion of our business in the Chinese market
We feel that there is a substantial market opportunity for the investment platform business in
China given the size of the market. We believe China will be one of the biggest markets in the
world for wealth management products. The wealth management industry in China still lags
behind other key financial markets in terms of sophistication in a number of ways (for example, the
range of available asset classes), but with various regulatory changes and liberalisation,
opportunities for the investment platform business in China will arise.
There are also substantial opportunities for us to tap into China-based investors that are onshore
(within China) as well as offshore (through the financial centres of Hong Kong and Singapore).
To tap into the onshore Chinese market, we have incorporated iFAST China. iFAST China will
operate in China as a provider of platform services in China, including IT and business process
outsourcing services such as system application management and maintenance, IT technology
management, back office services, software development, and data processing. The China IT
platform is currently being developed and we intend to launch it in the second half of 2015. We
are looking to work with local partners that already have a good distribution reach in China, to
ensure that we are able to scale up our business in China as soon as practicable. From our
discussions and checks with our Suppliers and B2B Customers who are FAs, we understand that
based on our market share of AUA and investment transactions, we are a leading and established
funds and investments distribution platform in Singapore, Malaysia and Hong Kong. In addition,
according to independent asset management research firm, Cerulli Associates, our Group is a
leading distribution platform among independent financial advisory firms and the online channel
(DIY Investors) in Singapore. For further details, please refer to the section entitled “Industry
Overview – Investment platforms in Asia ex-Japan: History and growth potential” in this
Prospectus. We believe that our reputation as a leading funds and investments distribution
platform in Hong Kong and Singapore, together with our established network of global partners,
will help our market entry into China. For further details, please refer to the section entitled
“Industry Overview – Investment platforms in Asia ex-Japan: History and growth potential” in this
Prospectus.
PROSPECTS, BUSINESS STRATEGIES AND PLANS
182
To tap into the offshore Chinese market, we will collaborate with our B2B Customers and leverage
on our established presence as a leading funds and investments distribution platform in both Hong
Kong and Singapore, our established base of fund house partners (including many leading global
names), our extensive range of investment products in Hong Kong and Singapore, and our good
reputation within the wealth management industry.
Based on its current business model, iFAST China has obtained the licences required for it to
commence operation. Our Group will apply for additional licences from the relevant regulatory
authorities from time to time as part of our Group’s efforts to expand our business, services offered
and types of Investment Products available.
We intend to set aside S$7.0 million from the net proceeds of the issuance of the New Shares and
the Cornerstone Shares for the expansion of business in the Chinese market, excluding
acquisitions.
PROSPECTS, BUSINESS STRATEGIES AND PLANS
183
Save as disclosed in this section and in the section entitled “Risk Factors” in this Prospectus, as
at the Latest Practicable Date, our business operations in Singapore are not subject to any special
legislation or regulatory controls which have a material effect on our business and operations,
other than those generally applicable to companies and businesses incorporated and/or operating
in Singapore, Malaysia, Hong Kong and China.
SINGAPORE
The regulatory body relevant to our business in Singapore is the Monetary Authority of Singapore.
The key pieces of legislation applicable are the Securities and Futures Act and the Financial
Advisers Act.
The SFA provides a legal framework for the licensing and conduct of the business of capital
markets activities in Singapore. The FAA provides a legal framework for the licensing and conduct
of the business of financial advisory services in Singapore. Our business includes both capital
market activities and financial advisory services and is accordingly, subject to the licensing and
conduct of business provisions of the SFA and the FAA. Our licensed entity in Singapore is iFAST
Financial.
CMS Licence
On 1 February 2011, pursuant to the change in the MAS licensing regime which no longer requires
the renewal of CMS licences, MAS re-issued to iFAST Financial a single CMS Licence (Licence
Number CMS000137-6). The CMS Licence enables it to deal in securities and provide custodial
services for securities subject to certain conditions. For example, as we are a CMS Licence
holder, pursuant to Section 97A of the SFA, no shareholder of our Company may hold more than
20% of our Shares unless he has obtained the prior approval of MAS to enter into the
arrangement.
Pursuant to Section 97E(2)(a) of the SFA, MAS has the authority to require the holder of a CMS
Licence to immediately take any action or to do or not to do any act or thing whatsoever in relation
to its business as the Authority may consider necessary if the holder of a CMS Licence is unable
to meet its obligations. Any holder of a CMS Licence that fails to comply with a requirement
imposed by the Authority under Subsection (2)(a) shall be guilty of an offence and shall be liable
on conviction to a fine not exceeding S$150,000 and, in the case of a continuing offence, to a
further fine not exceeding S$15,000 for every day or part thereof during which the offence
continues after conviction. The CMS Licence does not need to be renewed, and is valid until (i)
the licence holder files a cessation notification to the MAS, (ii) the licence has lapsed upon the
winding up or dissolution of the licence holder or (iii) the licence has been revoked or suspended
by the MAS.
FA Licence
On 1 February 2011, pursuant to the change in the MAS licensing regime which no longer requires
the renewal of FA licences, MAS re-issued to iFAST Financial a single FA Licence (Licence
Number FA000022-5). The FA Licence enables it to:
(a) advise on life policies, securities (other than collective investment schemes) and collective
investment schemes, either directly or through publications or writings other than in the
manner specified in paragraph 2 of the Second Schedule to the FAA or advising on corporate
finance within the meaning of the SFA;
GOVERNMENT REGULATIONS AND LICENSING
184
(b) issue or promulgate research analyses or research reports on life policies and securities
(other than collective investment schemes) and collective investment schemes;
(c) market collective investment schemes; or
(d) arrange contracts of insurance in respect of life policies,
subject to the licence conditions as prescribed by MAS.
Section 19 of the FAA provide MAS with the authority to revoke a FA Licence on certain grounds
provided that the FA Licence holder is, subject to Subsection (5), given an opportunity to be heard.
Once an FA Licence is revoked or suspended, the FA shall cease to act as a FA because failure
to do so is an offence under Section 19(9) which warrants a fine not exceeding S$150,000 and,
in the case of a continuing offence, to a further fine not exceeding S$15,000 for every day or part
thereof during which the offence continues after conviction. In addition, pursuant to Section
19E(7), the FA whose licence is revoked or suspended must immediately inform all its
representatives by notice in writing of such revocation or suspension, and the representative who
are so informed shall cease to act as representatives of that licensed FA. Any FA which
contravenes Subsection (7) shall be guilty of an offence and shall be liable on conviction to a fine
not exceeding S$50,000 and, in the case of a continuing offence, to a further fine not exceeding
S$5,000 for every day or part thereof during which the offence continues after conviction. The FA
Licence does not need to be renewed, and is valid until (i) the licence holder files a cessation
notification to the MAS, (ii) the licence has lapsed upon the winding up or dissolution of the licence
holder or (iii) the licence has been revoked or suspended by the MAS.
iFAST Financial has appointed certain of its employees as CMS and FA representatives to carry
out their duties. A CMS or FA Licence holder may submit a notification to MAS to appoint a
particular individual as an appointed representative to represent such CMS or FA Licence holder.
Once MAS updates the public register of representatives, the appointed representative can start
conducting the regulated activities for which he is appointed to perform.
Licence for Trust Business
MAS has exempted iFAST Financial from the requirement to obtain a licence in respect of its trust
business relating to employee pension schemes pursuant to Section 80(2) of the TCA subject to
iFAST Financial’s compliance with certain conditions as follows:
(a) iFAST Financial shall only provide the proposed trust business services to corporations with
net assets exceeding S$10 million in value (or its equivalent in a foreign currency) (“Trust
Business Customers”) as determined by:
(i) the most recent audited balance sheet of the corporation; or
(ii) where the corporation is not required to prepare audited accounts regularly, a balance
sheet of the corporation certified by the corporation as giving a true and fair view of the
state of affairs of the corporation as of the date of the balance-sheet, which date shall
be within the preceding twelve (12) months;
(b) all investment decisions with respect to the employee pension schemes shall be made solely
by the Trust Business Customers and/or its employees under the employee pension
schemes (“Employees”);
GOVERNMENT REGULATIONS AND LICENSING
185
(c) iFAST Financial shall at all times comply with the Securities and Futures (Licensing and
Conduct of Business) Regulations (“LCBR”) when administering the employee pension
schemes; and
(d) unless otherwise agreed between iFAST Financial and its Trust Business Customers, iFAST
Financial shall draw to the attention of its Trust Business Customers that it is only
responsible to them and require the Trust Business Customers to inform their Employees of
the same.
Exempt Insurance Broker
As iFAST Financial holds a CMS Licence as well as a FA Licence, it is an exempt insurance broker
pursuant to Section 35ZN of the Insurance Act.
Technology Risk Management
MAS has also issued a set of notices which took effect as of 1 July 2014 setting out legal
requirements relating to technology risk management that are imposed on financial institutions
which include, requirements for a high level of reliability, availability, and recoverability of critical
information technology systems. Financial institutions are required to implement information
technology systems to protect customer information from unauthorised access or disclosure. As
at the Latest Practicable Date, our Group has implemented the necessary policies, procedures
and IT solutions in accordance with the MAS notices.
CPF-Investment Administrator
Separately, iFAST Financial is a registered CPFIA and acting in such capacity, has to adhere to
the CPFIA Terms and Conditions issued by the CPF Board.
MALAYSIA
The regulatory bodies relevant to our business in Malaysia are the SC and the FIMM. The key
pieces of legislation are the CMSA and the Anti-Money Laundering and Counter Financing of
Terrorism Act 2001. In addition, our business in Malaysia also takes into consideration the
Licensing Handbook, Code of Ethics and Rules of Professional Conduct (Unit Trust Funds).
Our licensed entity in Malaysia is iFAST Capital Malaysia which is regulated by the SC pursuant
to the CMSA which came into force on 28 September 2007. iFAST Capital Malaysia is a holder of
a CMSL from the SC which was granted to us on 29 April 2008 and which was subsequently
re-issued on 1 October 2012 pursuant to changes in the licence conditions. iFAST Capital
Malaysia’s CMSL is for three (3) regulated activities, namely dealing in securities (restricted to unit
trusts), dealing in private retirement schemes and the provision of investment advice. Our licence
is valid in perpetuity unless it is revoked or suspended by the SC. It is a licensing requirement for
iFAST Capital Malaysia to submit an annual return to the SC. The date of submission of the last
annual return for iFAST Capital Malaysia to the SC was 19 June 2014.
Under the Licensing Handbook, iFAST Capital Malaysia must have at least two (2) CMSL holders
for each regulated activity. If the number of CMSL holders falls below the minimum requirement
of two (2), iFAST Capital Malaysia must take immediate steps to recruit a new candidate.
GOVERNMENT REGULATIONS AND LICENSING
186
In addition, as iFAST Capital Malaysia is (i) licensed for dealing in unit trust products and is
registered with the FIMM as an Institutional Unit Trust Adviser (“IUTA”) and (ii) licensed for dealing
in private retirement schemes and is registered with the FIMM as an Institutional Private
Retirement Scheme Adviser (“IPRA”), it must have at least two (2) individuals who are registered
with FIMM. The IUTA and the IPRA are subject to annual renewal and the payment of annual fees,
and will continue until it is withdrawn or revoked.
HONG KONG
The regulatory bodies relevant to our business in Hong Kong are the SFC and the MPFSA. The
key pieces of legislation are the SFO, Companies Ordinance, Anti-Money Laundering and
Counter-Terrorist Financing (Financial Institutions) Ordinance (“AMLO”), SFC codes and
guidelines such as Code of Conduct for Persons Licensed by or Registered with the SFC,
Personal Data (Privacy) Ordinance (“PDPO”), and the Mandatory Provident Fund Schemes
Ordinance (Cap 485) (“MPFSO”).
Our licensed entities in Hong Kong are iFAST HK and IPS HK (formerly known as ING Platform
Services), which are regulated by the SFC pursuant to the SFO.
iFAST HK is the holder of a SFC licence for carrying out Type 1 regulated activities (Dealing in
Securities) and Type 4 regulated activities (Advising on Securities). iFAST HK’s licence for Type
1 regulated activities and Type 4 regulated activities was first granted on 30 March 2007 and were
re-issued on 17 June 2013 because of changes in the licence conditions. iFAST HK’s licence for
Type 1 regulated activities is subject to the condition that iFAST HK shall not engage in stock
brokering activities. As of the Latest Practicable Date, there are no licence conditions on iFAST
HK’s licence for Type 4 regulated activities.
IPS HK is the holder of a SFC licence for carrying out Type 1 regulated activities (Dealing in
Securities) and Type 4 regulated activities (Advising on Securities). IPS HK’s licence for Type 1
regulated activities was effective on 12 February 2008 and its Type 4 licence was effective on 15
October 2012. IPS HK’s licence for Type 1 regulated activities is subject to the condition that IPS
HK shall not engage in stock brokering activities. As of the Latest Practicable Date, there are no
licence conditions on IPS HK’s licence for Type 4 regulated activities.
In relation to the licences held by each of iFAST HK and IPS HK, none of the licences have expiry
or renewal dates. However, it is a licensing requirement that each of iFAST HK and IPS HK submit
an annual return to the SFC. The date of submission of the last annual return for both iFAST HK
and IPS HK was 24 March 2014.
iFAST HK and IPS HK are also registered principal intermediaries under the MPFSO and must
deliver to the MPFSA an annual return. The date of submission of the last annual return for both
iFAST HK and IPS HK was 3 January 2014.
In August 2014, iFAST HK had written to SFC to apply for the addition of Type 9 regulated
activities (Asset Management) to its licence. As at the Latest Practicable Date, our application is
still under consideration and has not been approved.
GOVERNMENT REGULATIONS AND LICENSING
187
REGULATORY LICENCES, PERMITS AND APPROVALS
Our Group has obtained the following licences, permits and approvals in relation to our business:
Type of licence,
permit or approval Issued to Purpose
Issuing/
Licensing
Body Date of Issue
Financial Adviser’s Licence iFAST
Financial
Provision of financial
advisory services
MAS 1 February 2011
Capital Markets Services
Licence
iFAST
Financial
Dealing in securities and
provision of custodial
services (both are restricted
to unit trusts and Singapore
Government Securities)
MAS 1 February 2011
CPFIA Agreement iFAST
Financial
Provision of CPF investment
administration services
CPF Board Deed of Indemnity
signed on
1 December 2004
Exempt Insurance Broker iFAST
Financial
Provision of insurance
broking services
MAS Commenced on
2 January 2004
Capital Market Services
Licence
iFAST Capital
Malaysia
Dealing in securities
(restricted to unit trusts),
provision of investment
advice and dealing in private
retirement schemes
SC Date of grant:
29 April 2008
FIMM Approval as IUTA
and IPRA
iFAST Capital
Malaysia
Marketing and distribution of
unit trusts and private
retirement scheme
FIMM IUTA granted on
2 April 2008
IPRA granted on
18 October 2012
SFC Licence for Type 1
Regulated Activities
iFAST HK Provision of financial
services in relation to the
dealing in securities (except
engaging in stock brokering
activities)
SFC 17 June 2013
SFC Licence for Type 4
Regulated Activities
iFAST HK Provision of financial
services in relation to
advising on securities
SFC 17 June 2013
SFC Licence for Type 1
Regulated Activities
IPS HK Provision of financial
services in relation to the
dealing in securities (except
engaging in stock brokering
activities)
SFC 15 October 2012
(1)
SFC Licence for Type 4
Regulated Activities
IPS HK Provision of financial
services in relation to
advising on securities
SFC 15 October 2012
MPFSA approval on
intermediary registration
iFAST HK Engaging in MPF sales and
marketing activities, and
providing advisory services in
relation to MPF Schemes
MPFSA Letter dated
7 September 2012
MPFSA approval on
intermediary registration
IPS HK Engaging in MPF sales and
marketing activities, and
providing advisory services in
relation to MPF Schemes
MPFSA Letter dated
7 September 2012
Note:
(1) IPS HK’s licence for Type 1 regulated activities was effective on 12 February 2008.
GOVERNMENT REGULATIONS AND LICENSING
188
The relevant business licences, certificates and approvals necessary for our business operations
generally do not need to be renewed, save for our registration as an IUTA and IPRA with the FIMM
which is subject to annual renewal and the payment of annual fees.
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 and in the section
entitled “Risk Factors” in this Prospectus, 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, none of the
aforesaid licences, permits and approvals have been suspended, revoked or cancelled and to the
best of our knowledge and belief, we are not aware of any facts or circumstances which would
cause such licences, permits and approvals to be suspended, revoked or cancelled as the case
may be, or for any applications for, or renewal of any of these licences, permits and approvals to
be rejected by the relevant authorities.
Shareholding Restrictions
Singapore
Section 97A(2) of the SFA and Section 57A(2) of the FAA prohibit a person from entering into an
arrangement to acquire or hold, directly or indirectly, 20% or more of the issued share capital of
the holder of a CMS license and a licensed FA respectively or to control, directly or indirectly, 20%
or more of the voting power in the holder of a CMS license and a licensed FA respectively. Prior
approval of MAS is required before any person (individuals and bodies corporate or
unincorporated) may enter into any arrangement in relation to shares in the licensed entity that
would result in such person obtaining effective control of the licensed entity. An application for
MAS’ approval must be made in writing. MAS may approve the application as well as subject such
approval to conditions if it is satisfied that (a) the applicant is a fit and proper person to have
effective control of the licensed entity; (b) having regard to the applicant’s likely influence, the
licensed entity is likely to continue to conduct its business prudently and comply with the
provisions of the applicable legislation and directions made thereunder; and (c) the applicant
satisfies such other criteria as may be prescribed or as may be specified in written directions by
MAS.
Section 97A(1) and 57A(1) state that Section 97A and Section 57A, respectively, apply to all
individuals whether resident in Singapore or not and whether citizens of Singapore or not, and to
all bodies corporate or unincorporated, whether incorporate or carrying on business in Singapore
or not. Accordingly, Shareholders of the Company who may enter into an arrangement to acquire
or hold, directly or indirectly, 20% or more of the issued share capital of iFAST Financial or to
control, directly or indirectly, 20% or more of the voting power of iFAST Financial must obtain the
prior approval of MAS to enter into such an arrangement.
Pursuant to Section 97A(7), any person who contravenes Section 97A(2) or 57A(2) shall be guilty
of an offence and shall be liable on conviction to a fine not exceeding S$150,000 or to
imprisonment for a term not exceeding 3 years or to both.
GOVERNMENT REGULATIONS AND LICENSING
189
Hong Kong
In Hong Kong, to become or to continue to be a substantial shareholder of a licensed corporation,
prior approval under Section 132(1)(a) of the SFO is required (the “Hong Kong Shareholding
Restrictions”). Under Section 6 of Schedule 1 of the SFO, a person is regarded as a substantial
shareholder of a licensed corporation if:
(a) he holds an interest in shares in the licensed corporation:
(i) the aggregate number of which shares is equal to more than 10% of the total number
of issued shares of the licensed corporation; or
(ii) which entitles him, either alone or with any of his associates and either directly or
indirectly, to exercise or control the exercise of more than 10% of the voting power at
general meetings of the licensed corporation; or
(b) he holds shares in any other corporation which entitles him, either alone or with any of his
associates and either directly or indirectly, to exercise or control the exercise of 35% or more
of the voting power at general meetings of that other corporation, or of a further corporation,
where that other corporation is itself entitled, either alone or with its associates and either
directly or indirectly, to exercise or control the exercise of more than 10% of the voting power
at general meetings of the licensed corporation.
The Hong Kong Shareholding Restrictions are applicable to (i) our Company (which is entitled to
exercise or control the exercise of more than 10% of the voting power at general meetings of the
licensed corporations, iFAST HK and iFAST Platform); and (ii) if applicable, a shareholder of our
Company or any other corporation (the “Other Corporation”) which is entitled to exercise or
control the exercise of 35% or more of the voting power at general meetings of our Company (or,
if applicable, a further corporation which is entitled to exercise or control the exercise of 35% or
more of the voting power at general meetings of the Other Corporation).
Pursuant to Section 3(1)(c) of the Securities and Futures (Licensing And Registration)
(Information) Rules (Cap 571S), the application should be made by a person for approval to
become or continue to be a substantial shareholder of a licensed corporation.
Pursuant to Section 131(1) of the SFO, a person should not become and continue to be a
substantial shareholder of a licensed corporation without first being approved by the SFC under
Section 132(1)(a).
The substantial shareholder should be a fit and proper person as set out in Section 129 of the
SFO. Approval is made by lodging an Application Form 4 with the prescribed fee and supporting
documents and, if applicable, Supplement 2 (information on corporate substantial shareholder) for
a corporate applicant or Supplement 3 (statement of personal information) for an individual
applicant.
Under Section 131(2) of the SFO, a person who is in breach of Section 131(1) may be liable as
follows:
(a) on conviction on indictment to a fine of HK$1,000,000 and to imprisonment for 2 years, and
to a further fine of HK$5,000 for every day during which the person continues to be such a
substantial shareholder without the SFC’s approval; or
GOVERNMENT REGULATIONS AND LICENSING
190
(b) on summary conviction to a fine at level 6 (i.e. HK$100,000) and to imprisonment for 6
months, and to a further fine of HK$500 for every day during which the person continues to
be such substantial shareholder without the SFC’s approval.
If a person becomes a substantial shareholder of a licensed corporation without the SFC’s prior
approval by virtue of:
(a) a transfer of shares;
(b) an issue of shares; or
(c) a transfer of the right to be issued with shares,
then, unless and until the SFC approves the person to continue to be a substantial shareholder
of the licensed corporation, the voting rights conferred by the shares concerned are not
exercisable. If the person purportedly exercises any voting right that is not exercisable, he
commits an offence and is liable: (i) on conviction on indictment to a fine of $200,000 and to
imprisonment for 1 year; or (ii) on summary conviction to a fine at level 6 and to imprisonment for
6 months.
In addition, under Section 133 of the SFO, where a person became a substantial shareholder
without the SFC’s prior approval, whether or not he has applied for approval to continue to be such
shareholder and regardless of whether such approval is granted or not, the SFC may by notice in
writing give directions to the licensed corporation concerned, including requiring the licensed
corporation to deem void and of no effect any votes cast by the person and any of his associates
at any meeting of the licensed corporation. Where the SFC refuses to approve an application for
a person to continue to be a substantial shareholder, SFC may by notice in writing direct the
person to reduce his interest in the licensed corporation.
Section 135(3) of the SFO provides that, where there is a change in the information provided to
the SFC by a licensed corporation and/or a substantial shareholder of a licensed corporation, a
written notice of change in the information containing full description of the change must be given
to the SFC within seven (7) business days of the change.
Malaysia
In Malaysia, iFAST Capital Malaysia requires SC’s prior approval if a change of shareholding in
iFAST Capital Malaysia will result in a change in iFAST Capital Malaysia’s controller even though
there is no specific shareholding restriction imposed by the SC when iFAST Capital Malaysia was
initially set up. The controller is defined under Section 60(7) of the CMSA as a person who (a) is
entitled to exercise, or control the exercise of, not less than 15% of the votes attached to the voting
shares in iFAST Capital Malaysia; (b) has the power to appoint or cause to be appointed a majority
of the directors of iFAST Capital Malaysia; or (c) has the power to make or cause to be made,
decisions in respect of the business or administration of iFAST Capital Malaysia, and to give effect
to such decisions or cause them to be given effect to. SC’s prior approval is also required when
iFAST Capital Malaysia is establishing a new business or acquiring shares/interests in or outside
Malaysia in relation to capital market-based activities.
However, SC only needs to be notified within 14 days of the following occurrence of events:
(a) if the change of shareholding of iFAST Capital Malaysia does not result in a change of iFAST
Capital Malaysia’s controller; or
GOVERNMENT REGULATIONS AND LICENSING
191
(b) if iFAST Capital Malaysia is establishing a new business or acquisition of shares/interests in
or outside Malaysia in relation to non-capital market-based activities; or
(c) if iFAST Capital Malaysia is disposing a business or shares/interests in or outside Malaysia.
The above restrictions on change of shareholding would apply to our Company, who is deemed
to be the controller of iFast Capital Malaysia. iFAST Capital Malaysia will need to obtain the prior
approval of SC for any direct or indirect change in its controller. Shareholders of our Company who
intend to become a controller by, inter alia, holding at least 15% of the voting Shares of the
Company, will also need to obtain the prior approval of the SC through iFAST Capital Malaysia.
If there is a breach of any of the conditions in the Licensing Handbook by a licensed entity and
the SC is satisfied that it is appropriate to take action against such licensed entity, the SC may
take one or more of the following actions as specified under section 356 of the CMSA:
(a) direct the person in breach to comply with, observe, enforce or give effect to any requirement
or provision of the CMSA, any securities laws, any guidelines, written notice, any condition
of, or restriction on, a licence granted under or pursuant to the CMSA, as the case may be;
(b) impose a penalty in proportion to the severity or gravity of the breach on the person in
breach, but which in any event shall not exceed RM500,000.00;
(c) reprimand the person in breach; and/or
(d) require the person in breach to take such steps as the SC may direct to remedy the breach
or to mitigate the effect of such breach, including making restitution to any other person
aggrieved by such breach.
OTHER PERMITS
iFAST Financial holds the following permits to print, publish, sell or distribute a newspaper under
the Newspaper and Printing Presses Act (Chapter 206) of Singapore:
Name of
Publication Frequency Permit No. Date of Issue Date of Expiry
iGP INSIGHTS Semi-annually MCI (P) 174/02/2014 27 February
2014
26 February
2015
REGULATORY INSPECTIONS AND INVESTIGATIONS
As our business operates in a highly regulated industry, we are periodically subject to inspections
by the securities regulators in the jurisdictions in which we operate, namely, MAS in Singapore,
SFC in Hong Kong, and SC in Malaysia. In the course of these inspections, the relevant authorities
have in the past highlighted certain breaches and/or non-compliance with the applicable laws,
regulations, guidelines and/or notices and provided various findings and recommendations on our
policies, procedures, controls and systems. Our Group has taken steps and implemented
procedures with regards to the findings and recommendations of such inspections to ensure
compliance with the applicable laws, regulations, guidelines and/or notices. For further details,
please refer to the section entitled “Our Business – Regulatory Compliance” of this Prospectus.
GOVERNMENT REGULATIONS AND LICENSING
192
The outcome of certain inspections as well as any pending and/or ongoing investigations are set
out below. Save as disclosed below and in this Prospectus, our Group has not received or been
subjected to any fines, offer of composition, supervisory warnings and/or any other penalties.
Singapore
Previous Transgressions by our Group
2011 – Offering of administration services for products not approved by CPF
iFAST Financial had offered administration services for insurance products which were not
previously approved by CPF for iFAST Financial to offer under the investment administrator
platform. iFAST Financial failed to write to the CPF Board for approval prior to offering
administration services for such insurance products as it had understood that approval was
required only for unit-trust products but not insurance products. In addition, iFAST Financial had
also accepted CPFIS transactions from Target Insurance Brokers Pte Ltd (“TGT”), which was
barred from all CPFIS transactions, including and not limited to unit trusts and insurance products.
In its letter dated 1 March 2011, CPF had issued a warning to iFAST Financial for breaching the
terms and conditions of the CPFIS, but no penalties were imposed on iFAST Financial. TGT is also
no longer an FA company that uses iFAST Financial’s B2B Platform and iFAST Financial no longer
offers administration services for such insurance products and the relevant insurance distribution
agreement was terminated on 23 March 2011.
To prevent the provision of administrative services for insurance products to CPF barred financial
advisers, all new businesses that involve CPF funds will have to be pre-approved by our
Company’s compliance department.
2009 – Handling of unit trusts redemption moneys from other customers
In 2006, iFAST Financial had set up a wholly-owned subsidiary, iFAST Nominees to provide
nominee services for unit trusts of the customers of iFAST Financial. iFAST Financial had thought
that having iFAST Nominees as a separate legal entity would more clearly separate customers’
assets from the assets of iFAST Financial. Accordingly, iFAST Nominees opened and operated
four (4) bank accounts with Standard Chartered Bank to handle unit trusts redemption moneys
from the customers of iFAST Financial.
This was in contravention of, inter alia, Section 104(1)(b) of the SFA read with regulation 16(1)(b)
of the LCBR, which requires iFAST Financial to deposit such moneys in a trust account maintained
in its own name with specified financial institutions. In addition, the transfer of customer’s
redemption moneys from iFAST Financial’s trust accounts to iFAST Nominees’ bank accounts was
in contravention of Section 104(1)(b) of the SFA read with regulation 21 of the LCBR which
prohibits iFAST Financial from withdrawing any money from a customer’s trust account except for
the purposes specified in that regulation. By transferring the end-of-day balances of clients’
redemption moneys to the bank accounts maintained in the name of iFAST Nominees, iFAST
Financial had withdrawn money from iFAST Financial’s trust accounts for a purpose not specified
in regulation 21.
MAS did not find any losses suffered directly by iFAST Financial’s customers as a result of these
contraventions. iFAST Financial had also cooperated fully with MAS and rectified the
contraventions by 10 November 2008.
GOVERNMENT REGULATIONS AND LICENSING
193
In its letter dated 4 September 2009, MAS had reprimanded iFAST Financial, and made an offer
of composition for a total of S$25,000 provided that iFAST Financial furnished MAS with:
(a) iFAST Financial’s agreement that the offence be dealt with under Section 336(2) of the SFA
and iFAST Financial’s acceptance of the offer of composition made by MAS; and
(b) a cheque for the sum of S$25,000 in settlement of the compounded sum.
On 15 September 2009, iFAST Financial accepted and paid the offer of composition made by
MAS. iFAST Nominees had closed the bank accounts with Standard Chartered Banks after
transferring the trust monies back to iFAST Financial, and the contraventions had been rectified
by 10 November 2008.
Our Company no longer uses iFAST Nominees to provide nominee services. The regulated entity,
iFAST Financial has taken over as provider of such nominee service. iFAST Nominees had
become dormant subsequently.
2008 – Compliance with the Notice to Capital Markets Licensees and Exempt Persons on
Prevention of Money Laundering and Countering the Financing of Terrorism
The MAS has issued the Notice to Capital Markets Licensees and Exempt Persons on Prevention
of Money Laundering and Countering the Financing of Terrorism (“AML/CFT Notice”). On 19
December 2008, as iFAST Financial had not fully complied with the AML/CFT Notice. For
example, iFAST Financial did not verify customers’ contact numbers prior to the opening of new
accounts, nor did it adhere to the specified timeline in the AML/CFT Notice for the completion of
the verification of customers’ details for customer due diligence. Accordingly, the MAS had issued
a supervisory warning to iFAST Financial requiring it to take immediate steps to ensure full
compliance. No penalties or fines were imposed.
iFAST Financial has since enhanced its system and operational procedures to ensure compliance.
For example, iFAST Financial has enhanced its system to tackle customer identification issues
and ensure its customers have a valid residential address and contact number. Its system is
designed to reject an address when it is recognised to be a P.O. Box. Additional checks are also
made to ensure that telephone numbers provided by customers have a minimum number of digits.
iFAST Financial has also emphasised to its frontline and operations staff to reject new account
openings without proper customer information, including those lacking a contact number and
address.
In addition, iFAST Financial has implemented a procedure which imposes a finite time limit for
verification of its customers’ details to ensure its customer due diligence is in compliance with the
AML/CFT Notice and its guidelines.
iFAST Financial also performs customer due diligence on any declared beneficial owner, including
screening all beneficial owners and joint account holders at account opening and on an on-going
basis and regardless of nationality.
GOVERNMENT REGULATIONS AND LICENSING
194
2007 – Breach of licence conditions for not obtaining the prior approval of MAS before setting up
iFAST Nominees
The CMS Licence of iFAST Financial requires it to obtain the prior approval of the MAS before
acquiring or holding, whether directly or indirectly, an interest of 20% or more of the share capital
of any corporation, or establish any branch (whether in Singapore or elsewhere). On 27 October
2006, iFAST Financial had incorporated iFAST Nominees without first obtaining the approval of
MAS. Thereafter, it had written to MAS to seek approval for the incorporation of iFAST Nominees.
In its letter dated 27 September 2007, the MAS (i) approved the incorporation of iFAST Nominees;
and (ii) had issued a supervisory warning to iFAST Financial to comply with the applicable laws
and regulatory requirements at all times. iFAST Nominees is currently a dormant company with no
business activities. No penalties or fines were imposed.
iFAST Financial has since enhanced its monitoring system to ensure compliance with its CMS
Licence. In addition, all incorporations and acquisitions of new subsidiaries must be pre-approved
by our Company’s compliance department and approval of MAS will thereafter be sought by our
Company.
2006 – Breach of contract notes requirements of SGS Bonds
In respect of contract notes issued by iFAST Financial to its B2B Customers for transactions in
SGS Bonds for the period end-December 2003 to end-March 2005, iFAST Financial was in breach
of Section 118 of the SFA read with:
(a) regulation 42(1)(a) of the LCBR, as iFAST Financial did not state in the contract notes issued
to its customers the address of its principal place at which it carries on business; and
(b) regulation 42(2) of the LCBR, which prescribed that contract notes shall be issued no later
than the business day immediately following the trade date, as iFAST Financial had issued
contract notes to its customers four (4) to eight (8) business days after the trade date.
In its letter dated 29 May 2006, the MAS had issued a supervisory warning to iFAST Financial to
comply with the applicable laws and regulatory requirements at all times. No penalties or fines
were imposed.
iFAST Financial has since rectified the abovementioned contravention and enhanced its systems
and operational procedures to send out contract notes in accordance with the SFA and LCBR. For
example, system enhancements have been put in place to automate the process of sending out
contract notes and ensure such contract notes are sent out in a timely manner. iFAST Financial’s
form of contract notes has since been amended to include the address of its principal place of
business. In addition, iFAST Financial has implemented a system of sampling checks by its
compliance department, which involves matching a sample of transactions against contract notes
that were sent out to ensure a timely despatch of the contract notes.
2005 – Publishing of article without a relevant representative licence
iFAST Financial had published two (2) articles by a previous employee of iFAST Financial in our
Group’s magazine titled “Fundsupermart”. At the relevant time of these articles, the employee did
not have the requisite representative’s licence under the FAA.
GOVERNMENT REGULATIONS AND LICENSING
195
In its letter dated 30 December 2005, the MAS had recommended that iFAST Financial review all
the activities of its employees to ascertain if each of them holds a valid representative’s licence
under the FAA and put in place appropriate measures to ensure compliance with all applicable
provisions in the FAA, Financial Advisers Regulations (the “FAR”) and the Notices issued by MAS
in relation to the FAA and the FAR. No penalties or fines were imposed.
In addition, our Company had put in place requirements and procedures to ensure that only
licensed representatives write articles and such articles are subject to an approval process with
sampling checks conducted by the compliance department. The compliance department will also
select sample articles and ensure that the respective authors are licensed.
2004 – Late filing of quarterly report of misconduct
iFAST Financial is required, as an exempt insurance broker, to submit a quarterly report of
misconduct not later than 14 days after the end of each quarter, setting out any disciplinary action,
including formal warnings, taken against its broking staff for misconduct in the prescribed term. A
“nil” report is required if no such disciplinary action has been taken against its broking staff in the
preceding quarter. This is in accordance with the Notice on Reporting of Misconduct of Broking
Staff by Insurance Brokers issued by MAS pursuant to Section 64(2) of the Insurance Act.
iFAST Financial had lodged its report for the quarter ending 30 June 2004 on 30 July 2004, after
the prescribed 14 days period. In its letter dated 6 September 2004, MAS issued a reprimand and
had recommended that iFAST Financial put in place appropriate measures to ensure compliance
with all applicable provisions in the Insurance Act as well as relevant notices and regulations. No
penalties or fines were imposed.
As recommended by MAS, iFAST Financial has also implemented procedures to ensure
compliance with all applicable provisions in the Insurance Act as well as relevant notices and
regulations. In particular, to ensure timely reporting, the filing of a quarterly report has been
included as an item in the compliance department’s monthly checklist. iFAST Financial has since
been filing the required quarterly reports, including “nil” reports, promptly after the end of each
quarter.
2003 – Acting as a representative without a valid licence
Mr. Wong Sui Jau is currently the general manager of Fundsupermart.com in Singapore, and is an
Executive Officer of our Group.
On 26 February 2003, when Mr. Wong Sui Jau was a part of the research team at
Fundsupermart.com, he had received a letter from MAS, reprimanding him for acting as a
representative of Fundsupermart.com without holding a valid representative licence under the
FAA. His previous licence had expired on 9 January 2003, but the renewal application was
submitted only on 20 January 2003, and he was deemed to have acted as a representative during
this period without a valid licence. No penalties or fines were imposed and iFAST Financial’s
compliance department had, until the revision to the licensing system with regard to renewals,
been tracking the renewal of licences closely. Such tracking was done through the creation of a
register of licensed representatives containing the corresponding licence expiry dates of such
licensed representatives. The register was used for monitoring the expiry of licences and ensuring
their timely renewal. Mr. Wong Sui Jau currently holds a valid representative licence.
GOVERNMENT REGULATIONS AND LICENSING
196
Under the current licensing system, both iFAST Financial and its representatives’ licences are not
subject to a renewal requirement. Such licences only have an issue date but no expiry date and
these licences will remain valid until the company ceases business or until revoked. Please see
corresponding disclosure in the section entitled “General and Statutory Information” of this
Prospectus.
As the compliance department is responsible for carrying out the implemented measures to
prevent a recurrence of the abovementioned transgressions, our Company has improved the
robustness of its risk management and compliance functions over the years and has expanded its
compliance department from one (1) full-time compliance officer in 2003 to its current five (5)
member compliance team. The compliance department has an established work plan which
addresses compliance audit, monitoring, regulatory reporting, review and implementation of new
or amended regulations and advisory to business units on potential new businesses. For further
details relating to compliance, please refer to the section entitled “Our Business – Regulatory
Compliance” of this Prospectus.
Hong Kong
SFC Investigation
On 20 September 2012, iFAST HK received a notice of inspection under Section 180 of the SFO
from the SFC (the “Inspection”). This was the first time such an inspection was conducted since
iFAST HK began its operations in 2007.
Subsequent to the Inspection, the inspection findings were referred to the Enforcement Division
of the SFC. Since 16 July 2013, the Enforcement Division of the SFC has been conducting
investigations on iFAST HK under Section 182(1) of the SFO. As of the date of the Prospectus,
the SFC has not concluded its investigation on whether there are potential breaches under the
SFO or other applicable laws and regulations.
According to Section 194 in Part IX of the SFO, the maximum fine that the SFC may impose,
among other sanctions including a suspension or revocation of licence of iFAST HK and/or its
responsible officers that could be imposed concurrently, is up to a maximum of HK$10 million or
three (3) times of the profit gained/loss avoided, whichever is higher.
For the year ended 31 December 2013, the B2C operations in Hong Kong accounted for less than
4% of our Group’s consolidated net revenue and less than 2% of our Group’s consolidated net
profit after tax. For 9M2014, the B2C operations in Hong Kong accounted for approximately less
than 4% of our Group’s consolidated net revenue. For the year ended 31 December 2013, the
operations of iFAST HK accounted for approximately less than 15% of our Group’s consolidated
net revenue and less than 5% of our Group’s consolidated net profit after tax. For 9M2014, the
operations of iFAST HK accounted for approximately less than 15% of our Group’s consolidated
net revenue (besides iFAST HK, we have another licensed entity in Hong Kong, IPS HK).
The Company intends to provide an update on the outcome of the SFC investigation via SGXNET
in compliance with the Listing Rules.
Please see the section entitled “General and Statutory Information – Miscellaneous” for further
details on the SFC investigation.
GOVERNMENT REGULATIONS AND LICENSING
197
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198
DIRECTORS
Our Board is entrusted with the responsibility for the overall management of our Group. The
particulars of our Directors are as follows:
Name Age Address Position
Lim Chung Chun 46 c/o 10 Collyer Quay, #26-01,
Ocean Financial Centre,
Singapore 049315
Chairman and CEO
Lim Wee Kian
(1)
46 c/o 10 Collyer Quay, #26-01,
Ocean Financial Centre,
Singapore 049315
Non-Executive Director
Low Huan Ping
(2)
58 c/o 10 Collyer Quay, #26-01,
Ocean Financial Centre,
Singapore 049315
Non-Executive Director
Yao Chih Matthias 58 c/o 10 Collyer Quay, #26-01,
Ocean Financial Centre,
Singapore 049315
Lead Independent Director
Ling Peng Meng 46 c/o 10 Collyer Quay, #26-01,
Ocean Financial Centre,
Singapore 049315
Independent Director
Kok Chee Wai 46 c/o 10 Collyer Quay, #26-01,
Ocean Financial Centre,
Singapore 049315
Independent Director
Ng Loh Ken Peter 61 c/o 10 Collyer Quay, #26-01,
Ocean Financial Centre,
Singapore 049315
Independent Director
Notes:
(1) Mr. Lim Wee Kian is the brother of our Executive Officer, Mr. Lim Wee Kiong, General Manager, Platform Services
Singapore.
(2) Mr. Low Huan Ping is a nominee director of SPH AsiaOne. SPH AsiaOne is a wholly-owned subsidiary of SPH, a
Singapore-incorporated company listed on the Mainboard of the SGX-ST. SPH AsiaOne’s principal activity is holding
investments. SPH AsiaOne acquired its stake in our Company in 2000 and is a long-term passive investor of our
Company. SPH, SPH AsiaOne and Mr. Low Huan Ping are not involved in the day-to-day management of our Group.
None of our Independent Directors sits on the board of any of our principal subsidiaries that are
based in jurisdictions other than Singapore.
Information on the business and working experience of our Directors is set out below:
Mr. Lim Chung Chun is the Chairman and CEO of our Group, and is also our founder. As
Chairman and CEO of our Group, Mr. Lim is responsible for setting the strategic direction of our
Group together with the Board and oversees the entire overall management of our Group. From
1991 to 1993 and from 1993 to 1997, Mr. Lim was an investment analyst with Schroder Securities
Singapore Pte. Ltd. and ING Baring Securities Pte Ltd respectively. From 1997 to 1998, he was
the Head of Research at ING Barings Securities Pte Ltd. In 1999, Mr. Lim ran a boutique fund
DIRECTORS, MANAGEMENT AND STAFF
199
management firm, before co-founding Fundsupermart.com Pte. Ltd. in early 2000. Mr. Lim
graduated with a Bachelor of Engineering (Electrical) from the National University of Singapore in
1991, and obtained a Diploma in Investment from the Institute of Banking and Finance in 1993.
Mr. Lim Wee Kian is a Non-Executive Director of our Company and was appointed to our Board
on 28 April 2004. From 1998 to 2000, he was the Director, Short Term Interest Rate Desk of UBS
AG, Singapore. From 2000 to 2003, he was the Director, Head Global FX, Asia ex-Japan, of
Barclays Capital, Singapore. From 2003 to 2004, he was the Director, Hedge Fund Manager of JL
Capital Pte Ltd. Mr. Lim is currently a Managing Director in the Foreign Exchange and
Commodities desk, Treasury and Markets at DBS Bank and has been with the bank since August
2004. Mr. Lim graduated with a Bachelor of Business from Nanyang Technological University in
1992.
Mr. Low Huan Ping is a Non-Executive Director of our Company. Mr. Low was appointed to our
Board on 30 June 2005. Mr. Low is the Executive Vice-President, Technology (IT & Production) of
SPH. He has been with the SPH Group since 1987. Mr. Low is also a director of M1 Limited,
MediaCorp Press Ltd and Shareinvestor.com Holdings Ltd. Mr. Low graduated with a Bachelor of
Arts (Honours) and Master of Arts from Cambridge University in 1978 and 1982, respectively,
where he read Engineering and graduated with a Master of Science from the National University
of Singapore in 1983. He also graduated from Harvard Business School’s Advanced Management
Program in 1993.
Mr. Yao Chih Matthias is the Lead Independent Director and was appointed to our Board on 1
January 2014. Mr. Yao was appointed as a member of the HDB Board in October 2009. He is the
Chairman of EM Services Pte Ltd, a subsidiary of HDB and Chairman of the Board of Trustees of
NTUC Eldercare Trust. He is also Managing Director of Agmonton Pte Ltd and a director of iFAST
Financial Pte Ltd. From 1997 to 1999, Mr. Yao was the Minister of State at the Ministry of Defence.
From 1999 to 2001 and from 2001 to 2004, he was the Minister of State at the Prime Minister’s
Office and Senior Minister of State at the Prime Minister’s Office respectively. From 2004 to 2011,
he was the Mayor of South East District for seven (7) years. From 2006 to 2011, he was the
Deputy Speaker of Parliament, and from 1991 to 2011, he was a Member of Parliament for the
MacPherson Single Member Constituency. Mr. Yao was awarded the Overseas Merit Scholarship
in 1975 and graduated with a Bachelor of Commerce (Honours) from the University of
Birmingham, UK in 1978.
Mr. Ling Peng Meng is an Independent Director of our Company and was appointed to our Board
on 10 March 2006. Mr. Ling has been a Managing Director and Head of Fixed Income, Greater
China at DBS Bank since April 2013. From July 1992 to April 1993, he started his career as an
officer with DBS Bank before moving to Schroder International Merchant Bankers Ltd between
May 1993 to October 1997 and Credit Agricole Indosuez Merchant Bank Ltd between October
1997 to December 1999. Mr. Ling was at Standard Chartered Bank between 1999 and 2013 where
his last held position was a Managing Director and Head of Capital Markets (South East Asia). He
is currently based in Hong Kong. Mr. Ling graduated with a Bachelor of Accountancy (Second
Class Honours (Upper Division)) from the National University of Singapore in 1992.
Mr. Kok Chee Wai is an Independent Director of our Company and was appointed to our Board
on 1 January 2014. Mr. Kok has been a Partner in Allen & Gledhill LLP since 1998 and presently
Co-Heads its Banking Practice. He has broad experience in domestic and international financings,
which includes acting for lenders and major corporates on domestic and cross-border syndicated
loans, structured and acquisition financing and debt restructuring. Mr. Kok graduated from the
National University of Singapore with an LLB (Hons) degree in 1991. He was admitted to the
Singapore Bar in 1992, when he joined Allen & Gledhill LLP.
DIRECTORS, MANAGEMENT AND STAFF
200
Mr. Ng Loh Ken Peter is an Independent Director and was appointed to our Board on 1 January
2014. Mr. Ng has been Managing Director of Peterson Asset Management Pte Ltd since 2000 and
is also a director of OWW Investments III Limited. Mr. Ng served as General Manager of
Investments in Hong Leong Assurance Bhd from 1996 to 2000. From 1987 to 1996, Mr. Ng was
at The Great Eastern Life Assurance Company Limited and was their Head of Treasury,
Investment and Corporate divisions at various stages of his career. He was senior manager of an
international public accounting firm and had worked in their Australian and Singapore offices from
1977 to 1986. From 2009 to 2010, Mr. Ng also served as a member on the ACRA Investment
Committee. Mr. Ng graduated from the National University of Singapore with a Bachelor of
Accountancy degree (with Honours) in 1977. He is also a Chartered Financial Analyst. Mr. Ng
completed the Advance Management Program at Harvard Business School in 1993.
The list of present and past directorships held by our Directors in the last five (5) years preceding
the Latest Practicable Date (excluding those held in our Company) are as follows:
Name Present Directorships Past Directorships
Lim Chung Chun Group Companies
• iFAST Financial Pte. Ltd.
• iFAST Nominees Pte. Ltd.
• iFAST Capital Ltd.
• iFAST Malaysia Sdn Bhd
• iFAST Capital Sdn Bhd
• iFAST Financial (HK) Limited
• iFAST Platform Services (HK)
Limited
Group Companies
Nil
Other Companies
• Accretion Investments Pte Ltd
Other Companies
• iFAST India Investments
Pte. Ltd.
• Pecuniam Pte. Ltd.
(formerly known as iFAST
International Pte Ltd)
Lim Wee Kian Group Companies
Nil
Other Companies
• Accretion Investments Pte Ltd
Group Companies
Nil
Other Companies
Nil
DIRECTORS, MANAGEMENT AND STAFF
201
Name Present Directorships Past Directorships
Low Huan Ping Group Companies
Nil
Group Companies
Nil
Other Companies
• SPH Multimedia Private Limited
• M1 Limited
• SPH AsiaOne Ltd
• Zaobao.com Ltd
• Mediacorp Press Ltd
• Mediacorp TV Holdings Pte. Ltd.
(alternate director)
• Shareinvestor.com Holdings
Pte. Ltd.
• ShareInvestor Pte. Ltd.
• SI.com (Thailand) Co Ltd
• clickTRUE Pte. Ltd.
• Kyosei Ventures Pte. Ltd.
• 701 Search Pte. Ltd.
(alternate director)
• Invest Media Pte. Ltd.
• Magzter, INC
• SPH Media Fund Pte. Ltd.
• Digi Ventures Private Limited
• CoSine Holdings Pte. Ltd.
(alternate director)
• StreetSine Singapore Pte Ltd
(alternate director)
• StreetSine Hongkong Limited
(alternate director)
Other Companies
• SPH Search Pte. Ltd.
(alternate director)
Yao Chih Matthias Group Companies
• iFAST Financial Pte. Ltd.
Other Companies
• Housing & Development Board
• Chairman of Board of Trustees
of NTUC Eldercare Trust
• Agmonton Pte. Ltd.
• E M Services Private Limited
Group Companies
Nil
Other Companies
• NTUC Income Insurance
Co-operative
• Eastpace Pte. Ltd.
DIRECTORS, MANAGEMENT AND STAFF
202
Name Present Directorships Past Directorships
Ling Peng Meng Group Companies
• iFAST Financial Pte. Ltd.
Other Companies
Nil
Group Companies
Nil
Other Companies
• Tanyong Developments
Pte. Ltd. (Struck off)
Kok Chee Wai Group Companies
• iFAST Financial Pte. Ltd.
Group Companies
Nil
Other Companies
Nil
Other Companies
Nil
Ng Loh Ken Peter Group Companies
• iFAST Financial Pte. Ltd.
Other Companies
• Peterson Asset Management
Pte Ltd
• OWW Investments III Limited
(1)
Group Companies
Nil
Other Companies
• Creative Master Bermuda
Limited
• OWW Investments V
Limited
Note:
(1) Mr. Ng Loh Ken Peter is not a shareholder of OWW Investments III Limited. He does not have any executive or
management role in OWW Investments III Limited and is not involved in its day-to-day operations.
One (1) of our Directors, Mr. Low Huan Ping, has prior and current experience as a director of a
public listed company in Singapore, and one (1) of our Directors, Mr. Ng Loh Ken Peter, has prior
experience as a director of a public listed company in Singapore, and they are familiar with the
roles and responsibilities of a director of a public listed company in Singapore. Our five (5)
remaining Directors do not have prior experience as directors of public listed companies in
Singapore but have received relevant training to familiarise themselves with the roles and
responsibilities of a director of a public listed company in Singapore.
DIRECTORS, MANAGEMENT AND STAFF
203
EXECUTIVE OFFICERS
Our CEO is assisted by a team of experienced Executive Officers who are responsible for the
various functions of our Group. The particulars of our Executive Officers are as follows:
Name Age Address Principal Occupation
Wong Soon Shyan 48 c/o 10 Collyer Quay, #26-01,
Ocean Financial Centre,
Singapore 049315
Group COO
Leung Fung Yat David 45 c/o 10 Collyer Quay, #26-01,
Ocean Financial Centre,
Singapore 049315
CFO
Lim Wee Kiong
(1)
42 c/o 10 Collyer Quay, #26-01,
Ocean Financial Centre,
Singapore 049315
General Manager, Platform
Services Singapore
Wong Sui Jau 40 c/o 10 Collyer Quay, #26-01,
Ocean Financial Centre,
Singapore 049315
General Manager,
Fundsupermart.com
Singapore
Dennis Tan Yik Kuan 36 c/o 10 Collyer Quay, #26-01,
Ocean Financial Centre,
Singapore 049315
Managing Director, iFAST
Capital Malaysia
Kelvin Yip Hok Yin 39 c/o 10 Collyer Quay, #26-01,
Ocean Financial Centre,
Singapore 049315
COO, iFAST HK
Note:
(1) Mr. Lim Wee Kiong is the brother of our Non-Executive Director, Mr. Lim Wee Kian.
Information on the business and working experience of our Executive Officers is set out below:
Mr. Wong Soon Shyan is Group COO and joined our Group in October 2000. As Group COO, Mr.
Wong is responsible for the day-to-day management of our Group. Mr. Wong is also our Chief Risk
Officer. Prior to joining our Group, Mr. Wong was with a well-known fund management company
as a manager responsible for the marketing, product development, sales administration and sales
in respect of funds from 1994 to 2000. From 1989 to 1991, Mr. Wong worked briefly as an external
auditor before joining a foreign bank as a credit analyst, and from 1992 to 1994, he worked as an
accountant. Mr. Wong graduated with a Bachelor of Accountancy from the National University of
Singapore in 1989. He is also a Chartered Financial Analyst.
Mr. Leung Fung Yat David is CFO of our Group. Mr. Leung joined our Group in August 2006 and
is responsible for our Group’s financial and accounting matters. Mr. Leung has more than 20 years
of experience in auditing, accounting, taxation and financial management. Prior to joining our
Group, Mr. Leung worked as an auditor in the Hong Kong and Singapore offices of an international
accounting firm from 1991 to 1998 and was promoted to assistant manager in 1996. From 1999
to 2006, Mr. Leung held various financial and accounting positions in companies in different
industries including, companies in the business of machinery and equipment manufacturing, the
provision of e-commerce services, investment holdings, electronics and semiconductors, retail
and the manufacture and trading of health food products. Mr. Leung graduated with a Bachelor of
Arts in Accountancy with Honours from the Hong Kong Polytechnic University in 1991 and
DIRECTORS, MANAGEMENT AND STAFF
204
obtained a Master of Business Administration from Imperial College London, United Kingdom in
2005. Mr. Leung is also a fellow member of The Association of Chartered Certified Accountants
and the Hong Kong Institute of Certified Public Accountants and is a non-practising member of the
Institute of Singapore Chartered Accountants.
Mr. Lim Wee Kiong is General Manager of Platform Services Singapore. Mr. Lim joined our Group
in April 2001 and is responsible for the overall management of our B2B Business. Prior to joining
our Group, Mr. Lim worked as a credit and marketing officer in a local bank and a product and
marketing executive at a company dealing in automation products. From 1995 to 1997, Mr. Lim
worked as an insurance agent with two (2) life insurance companies. Mr. Lim graduated with a
Bachelor of Business (Banking and Finance) from Monash University, Australia in 2000. He also
obtained a Diploma in Investment from the Institute of Banking and Finance in 1998 and a Diploma
in Computer Studies from Ngee Ann Polytechnic in 1995.
Mr. Wong Sui Jau is General Manager of Fundsupermart.com Singapore. Mr. Wong joined our
Group in October 2000. Since assuming the position of General Manager in August 2005, Mr.
Wong has been responsible for the overall management of our B2C Business. He is also in charge
of the research arm of our Group. Prior to joining our Group, Mr. Wong worked as a tax associate
and was subsequently promoted to tax senior at an international accounting firm between 1998
and 2000. Mr. Wong graduated with a Bachelor of Accountancy from the Nanyang Technological
University in 1998.
Mr. Dennis Tan Yik Kuan is Managing Director of iFAST Capital Malaysia. With over 10 years of
experience in the funds industry, Mr. Tan oversees both the B2B and B2C divisions of our business
in Malaysia. Mr. Tan joined our Company in 2002 as an IT Manager and was involved in the
development of end-user portfolio and investment software tools and applications for B2B
Customers. In 2004, he took on the position of Business Development Manager responsible for
the growth of the software division business. In 2006, Mr. Tan was promoted to Managing Director
of iFAST Service Centre Sdn Bhd and in 2007, he took on the role of Managing Director of iFAST
Capital Sdn Bhd. Mr. Tan is also the Executive Director for iFAST Malaysia Sdn Bhd and FA
Corporate and Compliance Consultancy Sdn Bhd. Prior to joining our Company, Mr. Tan was a
software engineer with a software house. He is a Computer Science graduate from University
Putra Malaysia and is a Certified Financial Planner (CFP). He has been appointed as one (1) of
two (2) Vice-Presidents of Financial Planning Association of Malaysia (FPAM) for the period of
2013 to 2015.
Mr. Kelvin Yip Hok Yin is COO of iFAST HK, a position he’s held since April 2014. FromApril 2009
to March 2014, Mr. Yip was General Manager of our B2B business in Hong Kong. Prior to joining
our Company, he was an environmental engineer in a major construction group responsible for
setting up an environmental management system for a civil engineering division as well as
managing the environmental aspects of civil and building projects on site from 2001 to 2003. From
1999 to 2001, Mr. Yip worked as an environmental representative for a global apparel group
conducting environmental audits in factories from various countries in Asia. Mr. Yip graduated with
a Bachelor of Applied Science in Bio-Resource Engineering from the University of British
Columbia, Canada in 1999. He also holds a Master of Science in Mechanical Engineering from the
Hong Kong Polytechnic University in 2004 and a Master of Business Administration degree from
the Chinese University of Hong Kong in 2006.
DIRECTORS, MANAGEMENT AND STAFF
205
The list of present and past directorships held by our Executive Officers in the last five (5) years
preceding the Latest Practicable Date (excluding those held in our Company) are as follows:
Name Present Directorships Past Directorships
Wong Soon Shyan Group Companies
• iFAST Financial Pte. Ltd.
• iFAST Nominees Pte. Ltd.
• iFAST Service Centre Sdn Bhd
• iFAST Nominees Sdn Bhd
Group Companies
• iFAST Corporation Ltd.
• iFAST Capital Sdn Bhd
(Alternate Director)
Other Companies
Nil
Other Companies
• Pecuniam Pte. Ltd.
(formerly known as iFAST
International Pte Ltd)
Leung Fung Yat David Group Companies
Nil
Group Companies
Nil
Other Companies
Nil
Other Companies
Nil
Lim Wee Kiong Group Companies
• FA Corporate and Compliance
Consultancy Pte Ltd
Group Companies
Nil
Other Companies
• Providend Holding Private
Limited
Other Companies
Nil
Wong Sui Jau Group Companies
Nil
Group Companies
Nil
Other Companies
Nil
Other Companies
• Pecuniam Pte. Ltd.
(formerly known as iFAST
International Pte Ltd)
DIRECTORS, MANAGEMENT AND STAFF
206
Name Present Directorships Past Directorships
Dennis Tan Yik Kuan Group Companies
• iFAST Service Centre Sdn Bhd
• iFAST Malaysia Sdn Bhd
• iFAST Capital Sdn Bhd
• FA Corporate and Compliance
Consultancy Sdn Bhd
• iFAST Nominees Sdn Bhd
• iFAST Platform Services
(Shenzhen) Qianhai Limited
Group Companies
Nil
Other Companies
Nil
Other Companies
Nil
Kelvin Yip Hok Yin Group Companies
• iFAST Financial (HK) Limited
• iFAST Platform Services (HK)
Limited
• iFAST Nominees (HK) Limited
Group Companies
Nil
Other Companies
• Treasure Crown Limited
Other Companies
Nil
Save as disclosed above in this section, none of our Directors and/or Executive Officers is related
to any of our Directors, Executive Officers or Substantial Shareholders.
Save as disclosed above in the section entitled “Directors, Management and Staff – Directors” of
this Prospectus, there is no arrangement or understanding with any of our Substantial
Shareholders, customers, suppliers or any other person, pursuant to which any of our Directors
or Executive Officers was appointed.
LEGAL REPRESENTATIVE
Our wholly-owned subsidiary, iFAST China, is incorporated in the PRC. Mr. Dennis Tan Yik Kuan,
the Managing Director of iFAST Capital Malaysia and one (1) of our Executive Officers is the legal
representative of iFAST China.
In accordance with PRC law, Mr. Dennis Tan Yik Kuan has the following powers in relation to all
iFAST China:
(i) to act as representative of iFAST China; and
(ii) to execute contracts on behalf of iFAST China.
DIRECTORS, MANAGEMENT AND STAFF
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Our Board has noted that there are risks in relation to the appointment of Mr. Dennis Tan Yik Kuan
as the legal representative of iFAST China, including concentration of authority. After noting that
the articles of association of iFAST China allow its sole shareholder to, inter alia, remove the legal
representative of the respective company, the Board is of the view that there are adequate
processes and procedures in place to mitigate the risks in relation to the appointment of Mr.
Dennis Tan Yik Kuan as the legal representative of iFAST China. Our Company will monitor and
periodically review the processes and procedures in relation to the appointment and removal of
iFAST China’s legal representative and the avoidance of concentration of authority of the legal
representatives of iFAST China, to ensure their effectiveness and robustness.
DIRECTORS’ AND EXECUTIVE OFFICERS’ REMUNERATION
The compensation (which includes salary, bonus, benefits-in-kind, CPF contributions and
directors’ fees) paid or payable to our Directors and Executive Officers for services rendered to us
in all capacities for FY2012 and FY2013, as well as the estimated compensation for FY2014, were
or are as follows:
Directors FY2012
(1)
FY2013
(1)
FY2014
(1)(2)
Lim Chung Chun
(3)
A A B
Lim Wee Kian A A A
Low Huan Ping A A A
Yao Chih Matthias
(4)
N.A. N.A. A
Ling Peng Meng A A A
Kok Chee Wai
(4)
N.A. N.A. A
Ng Loh Ken Peter
(4)
N.A. N.A. A
Executive Officers
Wong Soon Shyan
(5)
A A A
Leung Fung Yat David A A A
Lim Wee Kiong A A A
Wong Sui Jau A A A
Dennis Tan Yik Kuan A A A
Kelvin Yip Hok Yin A A A
Notes:
(1) Remuneration bands:
“A”: Remuneration of less than S$250,000 per annum
“B”: Remuneration between S$250,000 and S$499,999 per annum
(2) The estimated amount of remuneration paid and to be paid for FY2014. The estimated amount for FY2014 does not
take into account the performance bonus that our CEO is entitled to receive under his Service Agreement, further
details of which are set out in the section entitled “Directors, Management and Staff – Service Agreement” in this
Prospectus.
(3) Mr. Lim Chung Chun is also our CEO.
(4) Mr. Yao Chih Matthias, Mr. Kok Chee Wai, and Mr. Ng Loh Ken Peter were each appointed as Director on 1 January
2014.
(5) Mr. Wong Soon Shyan ceased directorship on 1 January 2014 but remains as an Executive Officer in the role of
Group COO.
DIRECTORS, MANAGEMENT AND STAFF
208
Save for contributions made for our employees by our Company for CPF contributions (or
equivalent), no amounts have been set aside or accrued by our Company or our subsidiaries to
provide for pension, retirement or similar benefits for our Directors and Executive Officers.
SERVICE AGREEMENT
On 1 September 2014, our Company entered into a service agreement (the “Service Agreement”)
with our Chairman and CEO, Mr. Lim Chung Chun for an initial term of forty (40) months
commencing from 1 September 2014 (the “Initial Term”), subject to earlier termination as
provided in the Service Agreement. Upon the expiry of the Initial Term, unless either Mr. Lim
Chung Chun or the Company notifies the other party in writing at least three (3) months prior to
the last day of the Initial Term, the Service Agreement shall be renewed for a further period of
three (3) years on such terms as may be agreed to by the Remuneration Committee and Mr. Lim
Chung Chun.
During the Initial Term, either party may terminate the Service Agreement at any time by giving to
the other party six (6) months’ notice in writing or, in lieu of such notice, an amount equivalent to
six (6) months’ basic salary based on the last drawn monthly salary of Mr. Lim Chung Chun.
The employment of Mr. Lim Chung Chun may be terminated forthwith upon notice in writing to him
if he:
(a) becomes bankrupt or makes any arrangement or composition with his creditors generally;
(b) is convicted of any criminal offence (save for an offence under any road traffic legislation for
which he is not sentenced to any term of immediate or suspended imprisonment) and
sentenced to any term of immediate or suspended imprisonment;
(c) is or may be suffering from a mental disorder; or
(d) by reason of ill health or injury caused by his own default becomes unable to perform any of
his duties under the Service Agreement for a period of 120 days or more.
We may also terminate the employment of Mr. Lim Chung Chun forthwith without any notice or
payment in lieu of notice if, in the reasonable opinion of the Board, he:
(a) is guilty of any wilful misconduct in the discharge of his duties as set out in the Service
Agreement; or
(b) breaches any material provision of the Service Agreement.
We may also terminate the employment of Mr. Lim Chung Chun forthwith upon notice, without
prejudice to any remedy which we may have against him for the breach or non-performance of any
of the provisions of the Service Agreement if he:
(a) commits any act that is reported in general or trade press or otherwise achieves general
notoriety which involves conduct that is likely to be regarded as illegal, immoral or
scandalous and which, in the reasonable opinion of the Board is likely to discredit Mr. Lim
Chung Chun to a degree which materially reduces the value of his services to our Group or
may discredit our Group through association with him; or
(b) is in the reasonable opinion of the Board, incompetent in the performance of his duties.
DIRECTORS, MANAGEMENT AND STAFF
209
Pursuant to the terms of his Service Agreement, Mr. Lim Chung Chun is entitled to a monthly basic
salary of S$20,000 per calendar month payable in arrear on the last working day of every month
(the “Basic Salary”) adjustable as follows:
(a) when the profit after tax and minority interests of our Group, for any financial year is more
than S$12,000,000, the Basic Salary will be adjusted to S$25,000 beginning from the month
immediately following the end of such financial year; and
(b) should any subsequent profit after tax and minority interests of our Group, for any financial
year fall below S$12,000,000, the Basic Salary will revert back to S$20,000 beginning from
the month immediately following the end of such financial year.
Mr. Lim Chung Chun is also entitled to an annual profit sharing bonus (the “Profit Sharing
Bonus”, and together with the Basic Salary, the “Salary”) in respect of each financial year
commencing from and including FY2014, which is calculated based on the consolidated profit
before tax, excluding extraordinary items, non-recurring items, minority interests and inter-
company transactions within our Group (the “PBTC”) (before deducting for such Profit Sharing
Bonus) of our Group as follows:
PBTC of our Group Profit Sharing Bonus
Amount up to S$8,000,000 No Profit Sharing Bonus
Amount in excess of S$8,000,000 S$75,000 plus 3.5 per cent. of the PBTC in
excess of S$8,000,000 for that financial year
For the sole purpose of illustration, assuming that the PBTC of our Group (before deducting for
the Profit Sharing Bonus) is S$12,000,000, the Profit Sharing Bonus to be received Mr. Lim Chung
Chun will be S$215,000, being the sum of (i) S$75,000 and (ii) 3.5% of S$4,000,000.
The Profit Sharing Bonus may be paid in the form of cash, share options or performance shares
in accordance with the prevailing scheme to be determined by our Remuneration Committee. The
full payment of the Profit Sharing Bonus will be subject to the compliance and fair dealing KPI
scorecard determined and agreed by our Remuneration Committee and Mr. Lim Chung Chun. Our
Remuneration Committee is currently discussing the details of the KPI scorecard, which will be
finalised prior to the payment of the Profit Sharing Bonus. For the avoidance of doubt, the Profit
Sharing Bonus sets out the maximum bonus payable. Our Remuneration Committee will further
review the performance of Mr. Lim Chung Chun based on the KPI scorecard, which may result in
a reduction of the Profit Sharing Bonus paid based on factors such as compliance and fair dealing
considerations.
Our Remuneration Committee will review the KPI scorecard annually and when necessary, and
the KPI scorecard will be updated to take into account the then-existing operating conditions and
regulatory landscape. Any changes to the KPI scorecard will be determined and agreed by our
Remuneration Committee and Mr. Lim Chung Chun.
To ensure that the total annual compensation, while remaining competitive, contains necessary
safeguards against excessive compensation, the profit sharing bonus formula will be reviewed in
January 2017.
DIRECTORS, MANAGEMENT AND STAFF
210
Mr. Lim Chung Chun is also entitled to such other payments, allowances or benefits as may be
determined at the absolute discretion of the Board (as recommended by the Remuneration
Committee).
All travelling and travel-related expenses, entertainment expenses and other out-of-pocket
expenses reasonably incurred by Mr. Lim Chung Chun in the process of discharging his duties on
behalf of our Group, will be borne by us, subject to any vouchers or other evidence of actual
payment of such expenses we may require Mr. Lim Chung Chun to provide.
Mr. Lim Chung Chun has agreed, among other things, in his Service Agreement that he will not
during his employment with our Company and for a period of twelve (12) months after the
termination of his employment with our Company, in all territories where we or any Group
Company operates directly or indirectly, except with our prior written consent:
(a) either on his own account or for any other person directly or indirectly solicit, interfere with
or endeavour to entice away from any Group Company any person who to his knowledge is
now or has been a client, customer or employee of, or in the habit of dealing with, any Group
Company;
(b) save for his current interests either alone or jointly with or as a manager, agent for or
employee of any person, directly or indirectly carry on or be engaged or concerned or
interested in any business which shall be in competition with the business carried on by any
Group Company as at the date hereof or as at the time of cessation of employment (as the
case may be) (the “Relevant Business”);
(c) act as a director or otherwise of any other person, firm or company engaging directly or
indirectly in the Relevant Business which is in competition with the business of any Group
Company; and
(d) cause or permit any person or entity directly or indirectly under his control or in which he has
any beneficial interests to do any of the foregoing acts or things.
Had the Service Agreement been in effect from the beginning of FY2013, the Profit Sharing Bonus
would have been approximately S$84,000, and our Group’s audited consolidated profit
attributable to owners of our Company from continuing operations for FY2013 would have been
approximately S$8,433,000, and our basic EPS based on the pre-Offering share capital of
204,425,334 Shares would have been 4.13 cents.
Saved as disclosed above, there are no existing or proposed service agreements entered or to be
entered into by our Directors with our Company or any of our Group Companies. There is also no
existing or proposed service contract entered or to be entered into by our Directors with our
Company or any of our Group Companies which provide for benefits upon termination of
employment.
DIRECTORS, MANAGEMENT AND STAFF
211
OUR EMPLOYEES
As at the Latest Practicable Date, we have 240 full-time employees. A breakdown of our full-time
staff by job functions and geographic locations as at 31 December 2011, 31 December 2012,
31 December 2013 and as at the Latest Practicable Date is as follows:
As at 31 December
As at the Latest
Practicable Date Job Function 2011 2012 2013
Management 10 12 13 14
B2B Business 45 36 36 41
B2C Business 47 44 39 41
Information Technology 38 25 31 47
Operations and Settlement 57 53 56 56
Finance, Human Resources,
Legal and Compliance 32 30 35 41
Total 229 200 210 240
As at 31 December
As at the Latest
Practicable Date Geographic Location 2011 2012 2013
Singapore 99 91 94 103
Malaysia 79 63 69 73
Hong Kong 51 46 47 52
China – – – 12
Total 229 200 210 240
The decrease in the number of employees from 229 as at 31 December 2011 to 200 as at 31
December 2012 is due to natural attrition. We do not employ a significant number of temporary
staff and do not experience any significant seasonal fluctuation in the number of employees. All
our employees in our Group are not unionised. We believe that the relationship and cooperation
between our management and employees have been good and this is expected to continue. There
has not been any incidence of work stoppages or labour disputes. Except for CPF contributions
in Singapore, Employee’s Provident Fund in Malaysia, Mandatory Provident Fund in Hong Kong,
and social insurance and housing fund in PRC, we have not set aside or accrued any amounts for
our employees to provide for pension, retirement or similar benefits.
STAFF TRAINING
We are guided by the principle that training enhances our staff’s work competencies. Our staff
training is an ongoing process and comprises both in-house and external training. Our training
often ties in with government training and skills upgrading initiatives for the purpose of cost
effectiveness.
DIRECTORS, MANAGEMENT AND STAFF
212
In-house Training
Our new staff are trained on-the-job by our senior managers. We expect all our staff to take on the
role of a trainer as they become proficient in their work and to provide guidance to new staff and
staff covering their work in their absence. We believe that placing the responsibility on our staff
to serve as a trainer in their respective capacities provides them with a push to master their work
and helps them develop their confidence and encourages them to take on leadership positions.
We believe that giving our staff the opportunity to gain experience internally helps ensure that we
are constantly staffed with able people.
External Training
We are supportive of our staff in their pursuits for self-enrichment through courses that will add
value to their work.
Being in the financial industry, our staff are encouraged to enhance and validate their financial
knowledge and foundation through the achievement of professional certifications such as Certified
Financial Planner, Associate Financial Planner, or Chartered Financial Analyst. They also attend
short-term courses, seminars and conferences to ensure that they are equipped with industry
updates, knowledge and best practices which are relevant to their area of work.
The amount of expenditure on staff training for the Period under Review and up to the Latest
Practicable Date as a percentage of our Group’s revenue was insignificant.
Please refer to the section entitled “Our Business – Regulatory Compliance” of this Prospectus for
further details of our staff training.
DIRECTORS, MANAGEMENT AND STAFF
213
Our Directors recognise the importance of good corporate governance and the offering of high
standards of accountability to our Shareholders. Our Board of Directors has formed four (4)
committees: (i) the Audit Committee, (ii) the Remuneration Committee, (iii) the Nominating
Committee, and (iv) the Risk Committee.
Mr. Yao Chih Matthias is our Lead Independent Director. As the Lead Independent Director, he is
the contact person for our Shareholders where there are concerns or issues which remain
unresolved despite communication with our Chairman and CEO, Mr. Lim Chung Chun or where
such communication is inappropriate.
The overall management is overseen by our CEO, Mr. Lim Chung Chun, who is also our Chairman.
Our business and operations are presently under the management and close supervision of Mr.
Lim Chung Chun who is assisted by a team of Executive Officers.
AUDIT COMMITTEE
Our Audit Committee comprises Mr. Ng Loh Ken Peter, Mr. Kok Chee Wai, and Mr. Yao Chih
Matthias. Our Audit Committee is chaired by Mr. Ng Loh Ken Peter.
Our Audit Committee will meet at least four (4) times a year (to coincide with key dates in the
company’s financial reporting cycle) to discuss and carry out the duties set out below.
(i) Overseeing financial reporting by:
(a) monitoring the integrity of the financial information provided by our Company, in
particular by reviewing the relevance and consistency of the accounting standards used
by our Company (i.e. entity level) and our Group (i.e. consolidation level);
(b) assessing and challenging, where necessary, the correctness, completeness, and
consistency of financial information (including interim reports) before submission to the
Board for approval or made public;
(c) paying particular attention to critical accounting policies and practices, and any
changes in them, decisions requiring a significant element of judgment, the extent to
which the financial statements are affected by any unusual transactions in the year and
how they are disclosed, clarity of disclosures, significant adjustments resulting from the
audit, going concern assumption, compliance with stock exchange and other legal
requirements, significant financial reporting issues with both executive management
and the external auditor, and other topics at the request of the Board; and
(d) reviewing and approving any policies related to hedging (if any) including but not limited
to reviewing and approving the measures put in place and monitoring the
implementation of the hedging policies, including reviewing the instruments, processes
and practices in accordance with the approved hedging policies.
(ii) Overseeing internal control (including risk management if delegated by the Board) by:
(a) assessing the effectiveness of the internal control (including risk management) systems
established by management to identify, assess, manage, and disclose financial and
non-financial risks (including those relating to compliances with existing legislation and
regulation) at least once a year;
(b) coordinating with the Risk Committee on its oversight of financial reporting matters;
CORPORATE GOVERNANCE
214
(c) reviewing the statements included in the annual report on our Company’s internal
controls and risk management framework (if delegated by the Board);
(d) reviewing management’s and the internal auditors’ reports on the effectiveness of the
systems for internal control, financial reporting, and risk management; and
(e) reviewing (jointly with the Risk Committee) our Company’s procedures for detecting
fraud and whistle-blowing, and ensuring that arrangements are in place by which staff
may, in confidence, raise concerns about possible improprieties in matters of financial
reporting, financial control, or any other matters.
(iii) Overseeing internal and external audit processes by:
Internal Audit
(a) monitoring and assessing the role and effectiveness of the internal audit function in the
overall context of the company’s risk management system;
(b) reviewing the Group’s compliance with regulatory rules;
(c) ensuring that the internal audit function is adequately resourced and skilled in line with
our Company’s nature, size, and complexity;
(d) ensuring an adequate budget is allocated to the internal audit function, assuring its
proper functioning;
(e) reviewing the internal audit program with regard to the complementary roles of the
internal and external audit functions;
(f) receiving the internal audit reports or a periodic summary thereof;
(g) receiving a report on the results of the internal auditors’ work on a periodic basis;
(h) reviewing and monitoring management’s responsiveness to the internal auditor’s
findings and recommendations;
(i) ensuring that the head of internal audit has direct and unrestricted access to the
Chairman of the Board and the Audit Committee;
(j) participating in the selection and approving the appointment or dismissal of the head of
internal audit; and
(k) assessing the performance and determining the remuneration of the head of internal
audit, within our Company’s guidelines.
External Audit
(a) overseeing our Company’s relations with external auditor(s);
(b) in connection with the terms of engagement of the external auditor(s), to make
recommendations to the Board on the selection, appointment, reappointment, and
resignation of the external auditor(s) based upon a thorough assessment of the external
auditor(s)’ functioning with such proposal to be submitted to the general meeting of
shareholders for approval;
CORPORATE GOVERNANCE
215
(c) reviewing the Group’s audit plan;
(d) reviewing the external audit fees and recommending it for approval by the Board;
(e) monitoring and assessing the external auditor(s)’ independence by seeking
reassurance that the auditors and their staff have no family, financial, employment,
investment, or business relationship with our Group (other than in the normal course of
business), based on a forwarded report by the external auditor(s), seeking from the
audit firm, on an annual basis, information about policies and processes for maintaining
independence and monitoring the external auditor(s)’ compliance with relevant
regulatory requirements (e.g. audit partner rotation requirements, level of fees our
Company pays in proportion to the overall income of the firm, etc.), and agreeing with
the Board and monitoring our Company’s policy for the employment of former
employees of external auditor;
(f) keeping the nature and extent of non-audit services provided by the external auditor(s)
under review to ensure the external auditor’s independence or objectivity is not
impaired by setting and applying a formal policy specifying the types of non-audit
services: (A) from which the external auditors are excluded; (B) for which the external
auditors can be engaged without referral to the Audit Committee; (C) for which a
case-by-case decision is necessary by the Audit Committee, considering whether the
skills and experience of the audit firm make it a suitable supplier of the non-audit
services, ensuring safeguards are in place to provide assurance that the external
auditor’s objectivity and independence is not impaired when performing non-audit
services, and considering the nature of the non-audit service and the related fee levels
(both individually and in aggregate) relative to the audit fee;
(g) assessing, at the end of the audit cycle, the effectiveness of the audit process by
reviewing the external auditor’s findings arising from the audit (including any issues that
have subsequently been resolved), giving particular considerations to the key
accounting and audit judgments (including why certain errors might remain unadjusted),
the level of errors identified during the audit, and the obtained explanation from
management, reviewing whether the auditor has met the agreed audit plan, and
understanding the reasons for any changes, including changes in perceived audit risks,
and the work undertaken by the external auditors to address those risks, assessing the
accuracy of the auditors in their handling of the key accounting and identified audit
judgments, their responding to questions from the Audit Committee, and their
commentary on the systems of internal control, and obtaining feedback about the
conduct of the audit from the key people involved;
(h) discussing with external auditors in respect of any issues regarding fraud and
irregularities;
(i) reviewing the audit representation letters before consideration by the Board, giving
particular consideration to matters that relate to non-standard issues;
(j) reviewing the content of the external auditor’s management letter in order to assess
whether it is based on a good understanding of our Company’s business, and monitor
the responsiveness of management to the recommendations made (or the reasons why
they have not been acted upon); and
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216
(k) ensuring that the external auditors have direct and unrestricted access to the Chairman
of the Audit Committee and the Chairman of the Board.
(iv) Overseeing interested persons transactions by:
(a) reviewing any potential conflicts of interest, including monitoring undertakings by any
interested person(s);
(b) reviewing interested persons transactions to consider whether they are on normal
commercial terms and are not prejudicial to the interests of our Company or its minority
shareholders;
(c) considering the need for a general mandate for interested persons transactions;
(d) appointing an independent FA to advise on a general mandate;
(e) where a general mandate is being renewed, considering whether the methods or
procedures for determining the transaction prices are sufficient to ensure that the
transactions will be carried out on normal commercial terms and will not be prejudicial
to the interests of the issuer and its minority shareholders;
(f) requiring direct management to present the rationale, cost-benefit analysis and other
details relating to interested persons transactions subject to a specific mandate;
(g) considering the need from independent advisers to advise on interested persons
transactions subject to specific mandates;
(h) receiving reports from management and independent advisers on interested persons
transactions;
(i) reporting to minority shareholders on its recommendations on general and specific
mandates;
(j) reviewing on a periodic basis the framework and processes established for the
implementation of the terms of the ROFR (as defined in the section entitled “Interested
Person Transactions and Conflict of Interests – Potential Conflict of Interest –
Discontinued India Operations”) and the Non-Compete Undertaking (as defined in the
section entitled “Interested Person Transactions and Conflict of Interests – Potential
Conflicts of Interest – Discontinued India Operations”) in order to ensure that such
framework and processes remain appropriate;
(k) reviewing and assessing from time to time whether additional processes are required to
be put in place to manage any material conflicts of interest with our Directors,
Controlling Shareholders and their respective associates and propose, where
appropriate, the relevant measures for the management of such conflicts; and
(l) reviewing and proposing, where appropriate, the relevant measures for the
management of all conflicts of interest matters referred to it.
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Audit Committee’s Opinion of our CFO
Mr. Leung Fung Yat David has served as our Group’s Financial Controller since August 2006 when
he joined our Group and as Group Financial Controller in January 2010 after re-designation of his
role. Mr. Leung Fung Yat David was appointed as our CFO on 1 July 2014. In considering the
suitability of Mr. Leung Fung Yat David as our CFO, our Audit Committee has considered his
qualifications and past working experience and his years of service with our Group (as described
in the section entitled “Directors, Management and Staff – Executive Officers” of this Prospectus)
and has noted his abilities, familiarity and diligence in relation to financial matters and information
of our Group. In addition, our Audit Committee has also interacted with Mr. Leung Fung Yat David
in his capacity as Financial Controller and as CFO and with other members of our Group’s finance
team, held discussions with our Group’s external auditors and considered the views of and
feedback from the executive management team of our Group.
Based on the foregoing, our Audit Committee is satisfied and is of the opinion that Mr. Leung Fung
Yat David has the relevant knowledge, expertise and experience to be appointed as the 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 to cause them to believe that Mr.
Leung Fung Yat David does not have the competence, character and integrity expected of a chief
financial officer of a company listed on the SGX-ST.
Internal Controls
Notwithstanding the duties of the Audit Committee, the Board retains the responsibility for the
review of the effectiveness of the system of internal control, and must form its own opinion despite
aspects of internal control review being delegated to the Audit Committee.
Based on the internal controls established and maintained by our Group, work performed by the
internal and external auditors, and reviews performed by the management, various Board
Committees and the Board, the Audit Committee and our Board are of the opinion that our Group’s
internal controls adequately address financial, operational and compliance risks. Our Board notes
that all internal controls systems contain inherent limitations and no system of internal controls
can provide absolute assurance against the occurrence of material errors, poor judgement in
decision making, human error, losses, fraud or other irregularities.
REMUNERATION COMMITTEE
Our Remuneration Committee comprises Mr. Yao Chih Matthias, Mr. Ling Peng Meng, and Mr. Low
Huan Ping. Our Remuneration Committee is chaired by Mr. Yao Chih Matthias.
Our Remuneration Committee will review, recommend to our Board for approval, and where
authority is delegated by the Board, approve the remuneration of our Company’s directors, senior
management and employees.
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Our Remuneration Committee will meet at least twice a year and otherwise as required to properly
discharge its duties as set out below:
(i) Taking into account remuneration principles, practices and standards that may be specified
by MAS from time to time, make recommendations to the Board on:
(a) the remuneration, including salaries, allowances, bonuses and incentives to be
awarded against the achievement of prescribed goals and targets for our CEO and each
executive director, if any, to ensure its alignment with shareholders’ and stakeholders’
interest and long-term value creation for our Company, if any
(b) the compensation arrangements for the loss or termination of office, or dismissal or
removal of the CEO and each executive director;
(c) the framework and policies for determining non-executive directors’ remuneration; and
(d) the specific remuneration packages for each director.
(ii) In determining such policy, taking into account all factors which it deems necessary including
relevant legal and regulatory requirements, the provisions and recommendations of the
Singapore Corporate Governance Code and MAS guidance. The objective of such policy
shall be to ensure that the members of the executive management of the company are
provided with appropriate incentives to encourage performance and are, in a fair and
responsible manner, rewarded for their individual contributions to the success of our
Company.
(iii) When setting remuneration policy for the directors, review and have regard to the
remunerations trends across our Company and our Group.
(iv) Review the ongoing appropriateness and relevance of the remuneration policy and seek to
ensure that the remuneration policies are in line with the strategic objectives and corporate
values of our Company, and do not give rise to conflicts between the objectives of our
Company and the interests of individual directors and senior management.
(v) Be exclusively responsible for establishing the selection criteria, selecting, appointing and
setting the terms of reference for any remuneration consultants who advise the committee.
(vi) Review the design of all share incentive plans for approval by the board and shareholders.
For any such plans, determine each year whether awards will be made, and if so, the overall
amount of such awards, the individual awards to senior executives and the performance
targets to be used.
(vii) Oversee any major changes in employee benefits structures throughout our Company or our
Group.
(viii) Seek inputs from board risk committee and ensure that remuneration practices do not create
incentives for excessive or inappropriate risk-taking behaviour.
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NOMINATING COMMITTEE
Our Nominating Committee comprises Mr. Ling Peng Meng, Mr. Ng Loh Ken Peter, and Mr. Lim
Chung Chun. Our Nominating Committee is chaired by Mr. Ling Peng Meng.
Mr. Yao Chih Matthias, our Lead Independent Director is not a member of the Nominating
Committee as he is already a member of the other three (3) sub-committees, and is a Chairman
of two (2) of the sub-committees. In the interest of ensuring that we do not have an
over-concentration of responsibilities on any one (1) of the board members, the Board is of the
opinion that for now, the Lead Independent Director does not have to be a member of the
Nominating Committee.
Our Directors do not have fixed terms of office. At each annual general meeting, one-third of the
Directors for the time being (or, if their number is not a multiple of three (3), the number nearest
to but not less than one-third) shall retire from office by rotation. The Directors to retire in every
year shall be those who have been longest in office since their last re-election or appointment. All
Directors shall retire from office at least once every three (3) years. A retiring Director shall be
eligible to stand for re-election.
Our Nominating Committee is accountable to the Board for the selection of new directors,
succession planning for the Board and the CEO and the effectiveness of our Company’s corporate
governance framework and policies, including the board evaluation process.
The Nominating Committee has been set up to take the responsibility for the following:
(a) identify candidates and review all nominations for the approval of the Board, for the
appointment, reappointment or termination of directors, the CEO, and the members of the
various Board Committees;
(b) make recommendations to our Board on the matters described in (a) above, how the Board’s
performance may be evaluated and propose objective performance criteria and the
succession plan for the CEO;
(c) review the succession plan for the CEO, the results of the Board’s performance evaluation
and the actions taken on issues and matters arising from the Board’s performance
evaluation; and
(d) develop a process for evaluation of the performance of the Board, its committees and
Directors.
The criteria for identifying candidates and reviewing nominations for the appointments referred to
in the above paragraph shall include the following:
(i) the Board shall comprise at least a majority of directors independent from management and
business relationships with the Company;
(ii) at least half of the Board shall be independent directors when the Chairman and the CEO is
the same person, otherwise at least one-third of directors shall be independent directors; and
(iii) at least a majority of directors shall be independent from any shareholder who holds a 10%
or more interest in the Company.
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When assessing a candidate, the Nominating Committee shall, in addition to the fit and proper
criteria set out in the Code of Corporate Governance, consider the candidate’s track record, age,
experience, and capabilities.
Nominating Committee’s view of our Independent Directors
The Nominating Committee, having taken into consideration the following:
(i) the number of listed company directorships by each of our Independent Directors;
(ii) the principal commitments of our Independent Directors;
(iii) the confirmations by our Independent Directors stating that they are each able to devote
sufficient time and attention to the matters of our Company;
(iv) the confirmations by our Independent Directors that each of them is not accustomed or under
an obligation, whether formal or informal, to act in accordance with the directions,
instructions or wishes of any Controlling Shareholder, has no relationship with our Company,
its related corporations or with any directors of these corporations, any of its Shareholders
who each holds a 10% or more interest in the Company or its officers that could interfere or
be reasonably perceived to interfere, with the exercise of his or her independent business
judgment with a view to the best interests of our Company;
(v) our Independent Directors’ working experience and expertise in different areas of
specialisation; and
(vi) the composition of our Board,
is of the view that (a) each of our Independent Directors is individually and collectively able to
devote sufficient time to the discharge of their duties and are suitable and possess relevant
experience as Independent Directors of our Company and (b) our Independent Directors, as a
whole, represent a strong and independent element on our Board which is able to exercise
objective judgment on corporate affairs independently from the Controlling Shareholders.
DBS Bank is the principal banker of our Group, a Joint Issue Manager, Bookrunner and
Underwriter and a placement agent of the Offering. Notwithstanding the aforementioned business
relationships between our Group and DBS Bank, our Nominating Committee and our Directors
(save for Mr. Ling Peng Meng) consider Mr. Ling Peng Meng to be independent for the purposes
of the Code of Corporate Governance.
RISK COMMITTEE
Our Risk Committee comprises Mr. Yao Chih Matthias, Mr. Low Huan Ping, Mr. Kok Chee Wai, Mr.
Ng Loh Ken Peter, and Mr. Lim Chung Chun. Our Risk Committee is chaired by Mr. Yao Chih
Matthias.
The Risk Committee was established to assist our Board in discharging its duties to shareholders
on risk management, and to help improve our Board’s monitoring of the risk management system,
framework and processes of our Company and Group.
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The Risk Committee, which has written terms of reference approved by our Board, meets at least
twice per year or as and when circumstances or events merit it and performs the following
functions:
(i) advise our Board on our Company’s overall risk exposure and strategy;
(ii) oversee and advise our Board on the current risk exposures and future risk strategy of our
Company;
(iii) in relation to risk assessment
(a) keep under review our Company‘s overall risk assessment processes that inform our
Board‘s decision making;
(b) review regularly and approve the parameters used in these measures and the
methodology adopted; and
(c) set a process for the accurate and timely monitoring of large exposures and certain risk
types of critical importance;
(iv) review our Company‘s capability to identify and manage new risk types;
(v) before a decision to proceed is taken by our Board, advise our Board on proposed strategic
transactions, focusing in particular on risk aspects and implications for the risk tolerance of
our Company, and taking independent external advice where appropriate and available;
(vi) review reports on any material breaches of risk limits and the adequacy of proposed action;
(vii) keep under review the effectiveness of our Company‘s internal controls and risk
management systems and review and approve the statements to be included in the annual
report concerning the effectiveness of our Company‘s internal control and risk management
systems;
(viii) provide advice to the Remuneration Committee on risk weightings to be applied to
performance objectives incorporated in executive remuneration;
(ix) review (jointly with the Audit Committee) our Company’s procedures for detecting fraud,
including the whistleblowing policy (if any). The Risk Committee shall ensure that these
arrangements allow proportionate and independent investigation of such matters and
appropriate follow up action;
(x) monitor the independence of risk management functions throughout the organisation;
(xi) review promptly all relevant risk reports on our Company; and
(xii) review and monitor management’s responsiveness to the Risk Committee’s findings.
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CORPORATE SOCIAL RESPONSIBILITY
Over the years, our Group has organised seminars for investors to promote investment education
and knowledge. Our Group has also been supportive of various sports-related initiatives.
In Hong Kong, iFAST HK was the title sponsor for the “iFAST Metro Race 2013”, a race organised
to support the cause of social inclusion and in the spirit of contributing to the society. With the
Unleash Foundation appointed as the beneficiary organisation, all charitable proceeds raised from
the race will be channelled towards the Unleash Foundation’s education projects benefitting
physically-challenged youths. The “iFAST Metro Race 2014” held on 7 November 2014.
Our Group has also been a supporter of Oxfam Trailwalker events. Our employees travelled to
Sydney in 2013 and Hong Kong in 2011 and 2012 to complete a 100km trek within 48 hours in
teams of four (4). Oxfam aims to raise funds to alleviate poverty and injustice and it is held across
different countries each year.
In Singapore, for two (2) consecutive years in 2012 and 2013, iGP, a division of iFAST Financial,
was the title sponsor of iFAST Singapore Corporate Karting Challenge, in a bid to promote the
sport to the wealth management industry players in Singapore.
Our Group has been recognised for our focus on improving the well-being of our employees. In
2014, iFAST HK was awarded the Caring Company Logo 2013/14 by the Hong Kong Council of
Social Service, in recognition for its commitment in Caring for the Community, Caring for the
Employees and Caring for the Environment over the past year.
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On 21 October 2014, our Shareholders approved a share scheme which is known as the iFAST
Corporation Performance Share Plan (the “iFAST PSP”), the rules of which are set out in Appendix
F of this Prospectus. The iFAST PSP complies with the relevant rules as set out in Chapter 8 of
the Listing Manual.
The iFAST PSP 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 iFAST PSP, which forms an integral and important component of a compensation plan,
is designed to primarily reward and retain executive directors, non-executive directors and
employees whose services are vital to our well-being and success.
The iFAST PSP shall be administered by our Remuneration Committee. As at the Latest
Practicable Date, no Awards have been granted under the iFAST PSP.
Rationale for the iFAST PSP
The iFAST PSP allows our Company to target specific performance objectives and to provide an
incentive for participants to achieve these targets. Our Directors believe that the plan will provide
our Company with a flexible approach to provide performance incentives to our staff and
non-executive directors and, consequently, to improve performance and achieve sustainable
growth for our Company in the changing business environment, and to foster a greater ownership
culture amongst key senior management, senior executives and non-executive directors.
Unlike the options granted under the iFAST ESOS (as detailed in the section entitled “iFAST
ESOS”), the iFAST PSP is designed to reward eligible participants with Awards comprising fully
paid Shares, or the equivalent in cash or a combination of both. The reason for having the iFAST
PSP in addition to the iFAST ESOS is to give our Company greater flexibility in structuring the
compensation packages of eligible participants and providing an additional tool to motivate and
retain staff members through the offering of compensation packages that are market competitive.
Share Awards under the iFAST PSP
Awards granted under the iFAST PSP are principally performance-based with performance targets
to be set over a performance period and may vary from one (1) performance period to another
performance period and from one (1) grant to another grant. The performance targets are intended
to be based on medium-term corporate objectives covering market competitiveness, quality of
returns, business growth and productivity growth. Such performance targets and performance
periods will be set according to the specific roles of each participant, and may differ from
participant to participant. The performance targets are stretched targets aimed at sustaining
long-term growth. These targets will be tied in with our Company’s corporate key performance
indicators.
The iFAST PSP uses methods fairly common among major local and multinational companies to
incentivise and motivate senior executives and key senior management to achieve predetermined
targets which create and enhance economic value for Shareholders. Our Company believes that
the iFAST PSP will be an effective tool in motivating senior executives, key senior management
and non-executive directors to work towards stretched goals.
The iFAST PSP contemplates the award of fully paid Shares, when and after pre-determined
performance or service conditions are accomplished.
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A participant’s award under the iFAST PSP will be determined at the sole discretion of our
Remuneration Committee. In considering an award to be granted to a participant who is an
employee, our Remuneration Committee may take into account, inter alia, the participant’s
capability, creativity, entrepreneurship, innovativeness, scope of responsibility and skills set. In
considering an award to be granted to a participant who is a non-executive director, our
Remuneration Committee may take into account, inter alia, the services and contributions made
to the growth of our Group, attendance and participation in meetings and the years of service.
Currently, it is envisaged that directors and employees of our Group may be granted awards under
the iFAST PSP.
Under the iFAST PSP, participants are encouraged to continue serving our Group beyond the
achievement date of the pre-determined performance targets. Our Remuneration Committee has
the discretion to impose a further vesting period after the performance period to encourage the
participant to continue serving our Group for a further period of time.
Maximum Limits on Shares
In order to reduce the dilutive impact of the iFAST PSP, the maximum number of Shares issuable
or to be transferred by our Company under the iFAST PSP, when aggregated with the aggregate
number of Shares over which options or awards are granted under any other share option
schemes or share schemes of our Company, will be 15% of our Company’s total number of issued
Shares (excluding Shares held by our Company as treasury shares) from time to time.
Summary of iFAST PSP
A summary of the rules of the iFAST PSP is set out as follows:
1. Eligibility
Executive directors and confirmed employees of our Group and our associated companies
who have attained the age of twenty-one (21) years as of the award date, and who hold such
rank as may be designated by our Remuneration Committee from time to time, and
non-executive directors (including our Independent Directors) of our Group, shall be eligible
to participate in the iFAST PSP. For this purpose, a company is our “associated company” if
we and/or our subsidiaries hold at least 20% but not more than 50% of the issued shares in
that company and provided our Company has control (as defined in the Listing Manual) over
the associated company. Our Company does not have control over our associated company,
Providend.
Controlling Shareholders and their Associates who meet the criteria as set out above are
eligible to participate in the iFAST PSP, provided that the participation of each Controlling
Shareholder or his Associate and each grant of an Award to any of them may only be effected
with the specific prior approval of independent Shareholders in general meeting by a
separate resolution.
2. Awards
Awards represent the right of a participant to receive fully paid Shares free of charge,
provided that certain prescribed performance targets (if any) are met and upon expiry of the
prescribed performance period.
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Shares which are allotted and issued or transferred to a participant pursuant to the release
of an award shall not be transferred, charged, assigned, pledged or otherwise disposed of,
in whole or in part, during a specified period (as prescribed by our Remuneration Committee
in the award letter), except to the extent approved by our Remuneration Committee.
3. Participants
The selection of a participant and the number of Shares (which are the subject of each
award) to be granted to a participant in accordance with the iFAST PSP shall be determined
at the absolute discretion of our Remuneration Committee, which shall take into account
criteria such as his rank, job performance, creativity, innovativeness, entrepreneurship,
years of service and potential for future development, his contribution to the success and
development of our Group and, if applicable, the extent of effort and resourcefulness
required to achieve the performance target(s) within the performance period.
4. Details of awards
Our Remuneration Committee shall decide, in relation to each award to be granted to a
participant:
(a) the date on which the award is to be granted;
(b) the number of Shares which are the subject of the award;
(c) the performance target(s) and the performance period during which such performance
target(s) are to be satisfied, if any;
(d) the extent to which Shares, which are the subject of that award, shall be released on
each prescribed performance target(s) being satisfied (whether fully or partially) or
exceeded or not being satisfied, as the case may be, at the end of the performance
period; and
(e) any other condition which our Remuneration Committee may determine in relation to
that award including but not limited to the vesting period (if any).
5. Timing
While our Remuneration Committee has the discretion to grant awards at any time in the
year, it is currently anticipated that awards would in general be made once a year. An award
letter confirming the award and specifying (inter alia) the number of Shares which are the
subject of the award, the prescribed performance target(s), the performance period during
which the prescribed performance target(s) are to be attained or fulfilled and the schedule
setting out the extent to which Shares will be released on satisfaction of the prescribed
performance target(s), will be sent to each participant as soon as reasonably practicable
after the making of an award.
Our 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 our Remuneration Committee
decides that a participant deserves for meeting his performance targets.
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6. Events Prior to Vesting
Special provisions for the vesting and lapsing of awards apply in certain circumstances
including the following:
(i) the misconduct on the part of a participant as determined by our Remuneration
Committee in its discretion;
(ii) the participant ceasing to be in the employment of our Group for any reason whatsoever
(other than as specified in paragraph (v) below);
(iii) an order being made or a resolution passed for the winding-up of our Company on the
basis, or by reason, of its insolvency;
(iv) the bankruptcy of a participant or the happening of any other event which results in his
being deprived of the legal or beneficial ownership of the award;
(v) the participant ceases to be in the employment of our Group by reason of:
(1) ill health, injury or disability (in each case, evidenced to the satisfaction of our
Remuneration Committee);
(2) redundancy;
(3) retirement at or after the legal retirement age;
(4) retirement before the legal retirement age with the consent of our Remuneration
Committee;
(5) the company by which he is employed or to which he is seconded, as the case may
be, ceasing to be a company within our Group, or the undertaking or part of the
undertaking of such company being transferred otherwise than to another
company within our Group, as the case may be;
(6) any other event approved by our Remuneration Committee;
(vi) any other event approved by our Remuneration Committee; or
(vii) a take-over, reconstruction or amalgamation of our Company or an order being made or
a resolution passed for the winding-up of our Company (other than as provided in
paragraph (iii) above or for amalgamation or reconstruction).
Upon the occurrence of any of the events specified in paragraphs (i), (ii) and (iii), an award
then held by a participant shall, subject as provided in the rules of the iFAST PSP and to the
extent not yet released, immediately lapse without any claim whatsoever against our
Company.
Upon the occurrence of any of the events specified in paragraphs (iv), (v) and (vi) above, our
Remuneration Committee may, in its absolute discretion, preserve all or any part of any
award and decide either to vest some or all of the Shares which are the subject of the award
or to preserve all or part of any award until the end of the relevant performance period. In
exercising its discretion, our Remuneration Committee will have regard to all circumstances
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227
on a case-by-case basis, including (but not limited to) the contributions made by that
participant and, in the case of performance-related awards, the extent to which the
applicable performance conditions and targets have been satisfied.
Upon the occurrence of the event specified in paragraph (vii) above, our Remuneration
Committee will consider, at its discretion, whether or not to release any award, and will take
into account all circumstances on a case-by-case basis, including (but not limited to) the
contributions made by that participant. If our Remuneration Committee decides to release
any award, then in determining the number of Shares to be vested in respect of such award,
our Remuneration Committee will have regard to the proportion of the performance period
which has elapsed and the extent to which the applicable performance conditions and targets
have been satisfied.
7. Size and Duration of the iFAST PSP
The total number of Shares which may be issued or transferred pursuant to awards granted
under the iFAST PSP, when aggregated with the aggregate number of Shares over which
options are granted under any other share option schemes of our Company, shall not exceed
15% of the total number issued Shares (excluding Shares held by our Company as treasury
shares) from time to time.
The total number of Shares over which Awards may be granted under the iFAST PSP to
Controlling Shareholders and their Associates shall not exceed twenty five per cent. (25%)
of the Shares available under the iFAST PSP, and the number of Shares over which an Award
may be granted under the iFAST PSP to each Controlling Shareholder or his Associate shall
not exceed ten per cent. (10%) of the Shares available under the iFAST PSP.
The iFAST PSP shall continue in force at the discretion of our Remuneration Committee,
subject to a maximum period of 10 years commencing on the date on which the iFAST PSP
is adopted by our Company in general meeting, provided always that the iFAST PSP may
continue beyond the above stipulated period with the approval of Shareholders in general
meeting and of any relevant authorities which may then be required.
Notwithstanding the expiry or termination of the iFAST PSP, any awards made to participants
prior to such expiry or termination will continue to remain valid.
8. Operation of the iFAST PSP
Subject to the prevailing legislation, our Company will deliver Shares to participants upon
vesting of their awards by way of either (i) an issuance of new Shares; or (ii) a transfer of
Shares then held by our Company in treasury.
In determining whether to issue new Shares to participants upon vesting of their awards, our
Company will take into account factors such as (but not limited to) the number of Shares to
be delivered, the prevailing market price of the Shares and the cost to our Company of
issuing new Shares or delivering existing Shares.
New Shares allotted and issued and existing Shares procured by our Company for transfer
on the release of an award shall be eligible 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 relevant date of issue or, as the case may be, delivery, and
shall in all other respects rank pari passu with other existing Shares then in issue.
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Our Remuneration Committee shall have the discretion to determine whether the
performance condition has been satisfied (whether fully or partially) or exceeded, and in
making any such determination, our Remuneration Committee shall have the right to make
computational adjustments to the audited results of our Company or our Group, to take into
account such factors as our 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 target(s) if our Remuneration Committee decides that a changed
performance target would be a fairer measure of performance.
9. Abstention from voting
Shareholders who are eligible to participate in the iFAST PSP are to abstain from voting on
any shareholders’ resolution relating to the iFAST PSP.
We have made an application to the SGX-ST for permission to deal in and for quotation of the
Award Shares which may be issued upon the release of the share awards to be granted under the
iFAST. The approval of the SGX-ST is not to be taken as an indication of the merits of the Offering,
our Company, our subsidiaries, our existing issued Shares, the New Shares, the Cornerstone
Shares, the Option Shares, the Award Shares or the Additional Shares.
Adjustments and Alterations to the iFAST PSP
The following describes the adjustment events under, and provisions relating to alterations of, the
iFAST PSP.
1. Adjustment Events
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, reduction, subdivision, consolidation or
distribution, or otherwise) shall take place, then:
(i) the class and/or number of Shares which are the subject of an award to the extent not
yet vested; and/or
(ii) the class and/or number of Shares over which future awards may be granted under the
iFAST PSP,
shall be adjusted in such manner as our Remuneration Committee may determine to be
appropriate, provided that no adjustment shall be made if as a result, the participant receives
a benefit that a Shareholder does not receive.
The issuance of securities as consideration for an acquisition or a private placement of
securities or 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 shall not normally be regarded as a circumstance requiring
adjustment, unless our Remuneration Committee considers an adjustment to be appropriate.
Any adjustment (except in relation to a capitalisation issue) must be confirmed in writing by
our Company’s auditors (acting only as experts and not as arbitrators) to be in their opinion,
fair and reasonable.
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2. Modifications or Alterations to the iFAST PSP
The iFAST PSP may be modified and/or altered from time to time by a resolution of our
Remuneration Committee subject to the prior approval of the SGX-ST and such other
regulatory authorities as may be necessary.
However, no modification or alteration shall adversely affect the rights attached to awards
granted prior to such modification or alteration except with the written consent of such
number of participants under the iFAST PSP who, if their awards were released to them,
would thereby become entitled to not less than three-quarters in number of all the Shares
which would be issued or transferred in full of all outstanding awards under the iFAST PSP.
No alteration shall be made to particular rules of the iFAST PSP to the advantage of the
holders of the awards except with the prior approval of Shareholders in general meeting.
Rationale for participation by Controlling Shareholder(s) and their Associates
Our Company is of the view that all employees of our Group, including those who are Controlling
Shareholders or Associates of Controlling Shareholders, should be remunerated for their
contribution to our Group on the same basis with no differentiation between employees who are
Controlling Shareholders or Associates of Controlling Shareholders and employees who are not.
Allowing Controlling Shareholders or their Associates to participate in the iFAST PSP will ensure
that they are equally entitled, with the other Group Employees who are not Controlling
Shareholders or Associates of Controlling Shareholders, to take part and benefit from this system
of remuneration.
The Company is of the view that Controlling Shareholders or Associates of Controlling
Shareholders should not be unduly discriminated against by virtue only for their shareholdings in
the Company. The Company is also of the view that the extension of the iFAST PSP to Controlling
Shareholders or Associates of Controlling Shareholders will enhance their long-term commitment
to our Group as it will ensure that they will continue to have a stake in the Company even if they
decrease their shareholdings in the Company in the future.
As a safeguard against abuse, all members of the Board (and not just members of the Committee)
who are neither Controlling Shareholders nor their Associates will be involved in deliberations in
respect of Awards to be granted to or held by Controlling Shareholders or their Associates and the
terms and conditions, including the vesting periods attached to such Awards. Furthermore,
specific approval of the independent Shareholders is required for the grant of Awards to
Controlling Shareholders and/or their Associates as well as the actual number of and terms of
such Awards.
Specific approval for Mr. Lim Chung Chun has been sought and obtained for his participation in
the iFAST PSP at the extraordinary general meeting held on 21 October 2014. As Chairman and
CEO of the Company, Mr. Lim Chung Chun plays a major role in the overall management of the
operations, strategic direction and business opportunities of our Group. Our Group benefits much
from his strategic directions and looks to him to continue leading our Group in its businesses. Mr.
Lim is also in charge of overseeing the day-to-day management of our Group as well as our
Group’s strategic and business development. Mr. Lim has been instrumental in developing and
guiding our Group since our incorporation in 2000. As Mr. Lim has extensive experience in the
business, he has been using his wealth of experience and expertise to further the business goals
of our Group. Mr. Lim is also responsible for the effective management of business relations with
our Suppliers and Customers. He has been instrumental in successfully implementing the
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230
expansion of our Group’s businesses outside of Singapore to Hong Kong and Malaysia. Mr. Lim’s
leadership and management skills are invaluable to our Group. The extension of the iFAST PSP
to him will serve not only as recognition of his valuable contributions to our Group but also give
him a stronger stake in the future performance of our Group. Participation in the iFAST PSP will
serve as a means to motivate him to achieve and maintain a high level of performance which is
vital to the success of our Group. Save for the specific approval for Mr. Lim Chung Chun’s
participation in the iFAST PSP, there are no other approvals obtained for the participation of any
other Controlling Shareholders and/or their Associates.
Rationale for participation of executive directors and employees of our associated
companies and non-executive directors (including our Independent Directors) of our Group
in the iFAST PSP
The extension of the iFAST PSP to executive directors and employees of our associated
companies and non-executive directors (including our Independent Directors) of our Group allows
our Group to have a fair and equitable system to reward directors and employees who have made
and who continue to make significant contributions to the long-term growth of our Group.
We believe that the iFAST PSP will also enable us to attract, retain and provide incentives to its
participants to achieve higher standards of performance as well as encourage greater dedication
and loyalty by enabling our Company to give recognition to past contributions and services as well
as motivating participants generally to contribute towards the long-term growth of our Group.
Although the non-executive directors are not involved in the day-to-day running of our Group’s
business, they, nonetheless, play an invaluable role in furthering the business interests of our
Group by contributing their experience and expertise. The participation by the non-executive
directors in the iFAST PSP 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.
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 awards
under the iFAST PSP to such non-executive directors.
Financial Effects of the iFAST PSP
The iFAST PSP is considered a share-based payment that falls under Financial Reporting
Standards (“FRS”) 102 where participants will receive Shares and the awards will be accounted
for as equity-settled share-based payment 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 increase in equity. Vesting conditions, other than
market conditions, shall be taken into account by adjusting the number of Shares included in the
measurement of the transaction amount. During the vesting period, charge to the profit or loss will
be recognised based on the best estimate of the number of shares expected to vest and shall
revised that estimate, if necessary. After the vesting date, no adjustment to the charge to the profit
or loss is made.
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231
The amount charged to the 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 estimate of the length
of the expected vesting period shall be consistent with the assumptions used in estimating the fair
value of the award granted, and shall not be subsequently revised. 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 the profit or loss at each accounting date, based
on an assessment by our Chief Financial Officer 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 cumulative charge to the profit or loss if the awards do not
ultimately vest.
The following sets out the financial effects of the iFAST PSP.
(a) Share capital
The iFAST PSP will result in an increase in our Company’s issued share capital when new
Shares are issued to participants. The number of new Shares issued will depend on, inter
alia, the size of the awards granted under the iFAST PSP. In any case, the iFAST PSP
provides that the number of Shares to be issued or transferred under the iFAST PSP, when
aggregated with the aggregate number of Shares over which options are granted under any
other share option schemes of our Company, will be subject to the maximum limit of 15% of
our Company’s total number of issued Shares (excluding Shares held by our Company as
treasury shares) from time to time. If instead of issuing new Shares to participants, treasury
shares are transferred to participants or our Company pays the equivalent cash value, the
iFAST PSP will have no impact on our Company’s issued share capital.
(b) NAV
As described in paragraph (c) below on EPS, the iFAST PSP is likely to 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 iFAST PSP, there would be no effect on the NAV. However, if
instead of issuing new Shares to participants, existing Shares are purchased for delivery to
participants, the NAV will be impacted by the cost of the Shares purchased. It should be
noted that the delivery of Shares to participants under the iFAST PSP will generally be
contingent upon the eligible participants meeting prescribed performance targets and
conditions.
(c) EPS
The iFAST PSP is likely to result in a charge to earnings 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 iFAST PSP will
generally be contingent upon the participants meeting the prescribed performance targets
and conditions.
(d) Dilutive impact
The issuance of new Shares under the iFAST PSP will have a dilutive impact on our
consolidated EPS.
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Reporting Requirements
Under the Listing Manual, an immediate announcement must be made on the date of grant of an
award under the iFAST PSP and provide details of the grant, including the following:
(a) date of grant;
(b) number of Shares granted under the award;
(c) market price of the Shares on the date of grant of the award;
(d) number of Shares granted to Directors under the award, if any; and
(e) the vesting period in relation to the award.
Disclosures in Annual Report
Our Company will make such disclosures in our annual report for so long as the iFAST PSP
continues in operation as from time to time required by the Listing Manual including the following
(where applicable):
(a) the names of the members of our Remuneration Committee administering the iFAST PSP;
(b) in respect of the following participants of the iFAST PSP:
(i) Directors of our Company; and
(ii) participants (other than those in paragraph (i) above) who have received Shares
pursuant to the release of awards granted under the iFAST PSP which, in aggregate,
represent 5% or more of the aggregate of the total number of Shares available under
the iFAST PSP,
the following information:
(A) the name of the participant;
(B) the aggregate number of Shares comprised in awards which have been granted to such
participant during the financial year under review;
(C) the aggregate number of Shares comprised in awards granted to such participant since
the commencement of the iFAST PSP to the end of the financial year under review;
(D) the aggregate number of Shares comprised in awards granted to such participant which
have vested during the financial year under review and in respect of such awards, the
proportion of new Shares issued and existing Shares transferred (and where existing
Shares were purchased for delivery, the range of prices at which such Shares were
purchased) upon the release of the vested awards; and
(E) the aggregate number of Shares comprised in awards granted to such participant which
have not been released as at the end of the financial year under review;
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(c) in relation to the iFAST PSP:
(i) the aggregate number of Shares comprised in awards vested since the commencement
of the iFAST PSP to the end of the financial year under review;
(ii) the aggregate number of new Shares comprised in awards vested during the financial
year under review; and
(iii) the aggregate number of Shares comprised in awards granted under the iFAST PSP
which have not been released as at the end of the financial year under review; and
(d) such other information as may be required by the Listing Manual and/or the Securities and
Futures Act.
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On 21 October 2014, our Shareholders approved a share option scheme known as the iFAST
Employee Share Option Scheme (the “iFAST ESOS”), the rules of which are set out in Appendix
H of this Prospectus. The iFAST ESOS complies with the relevant rules as set out in Chapter 8
of the Listing Manual.
The iFAST 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 iFAST ESOS, which forms an integral and important component of a
compensation plan, is designed to primarily reward and retain executive directors, non-executive
directors and employees whose services are vital to our well-being and success.
The iFAST ESOS shall be administered by our Remuneration Committee. As at the Latest
Practicable Date, no options have been granted under the iFAST ESOS.
Rationale of the iFAST ESOS
The rationale for adopting the iFAST ESOS is to allow our Company:
(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.
Unlike the Awards granted under the iFAST PSP (as detailed in the section entitled “iFAST PSP”),
the iFAST ESOS is designed to provide eligible participants with an opportunity to participate in
the equity of our Company through the grant of options, and to motivate them towards better
performance through increased dedication and loyalty. The reason for having the iFAST ESOS in
addition to the iFAST PSP is to give our Company greater flexibility in structuring the
compensation packages of eligible participants and providing an additional tool to motivate and
retain staff members through the offering of compensation packages that are market competitive.
Summary of the iFAST ESOS
A summary of the rules of the iFAST ESOS is set out as follows:
1. Participants
Under the rules of the iFAST ESOS, executive directors and confirmed employees of our
Group and our associated companies (“Group Employees”) and non-executive directors
(including our Independent Directors) of our Group, are eligible to participate in the iFAST
ESOS. For this purpose, a company is our “associated company” if we and/or our
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235
subsidiaries hold at least 20% but not more than 50% of the issued shares in that company
and provided our Company has control (as defined in the Listing Manual) over the associated
company. Our Company does not have control over our associated company, Providend.
Controlling Shareholders and their Associates who meet the criteria as set out above are
eligible to participate in the iFAST ESOS, provided that the participation of each Controlling
Shareholder or his Associate and each grant of an Option to any of them may only be
effected with the specific prior approval of Independent Shareholders in general meeting by
a separate resolution.
2. Scheme administration
The iFAST ESOS shall be administered by our Remuneration Committee (further details of
such Committee can be found in the section entitled “Corporate Governance” of this
Prospectus) with powers to determine, inter alia, the following:
(a) persons to be granted options;
(b) number of options to be granted; and
(c) recommendations for modifications to the iFAST ESOS.
Our Remuneration Committee may consist of Directors (including Directors or persons who
may be participants of the iFAST ESOS). A member of our Remuneration Committee who is
also a participant of the iFAST ESOS must not be involved in its deliberation in respect of
options granted or to be granted to him.
3. Size of the iFAST ESOS
The aggregate number of shares over which our Remuneration Committee may grant options
on any date, when added to the number of Shares issued and issuable or transferred and to
be transferred in respect of all options granted under the iFAST ESOS and the number of
Shares issued and issuable or transferred and to be transferred in respect of all options or
awards granted under any other share option schemes or share schemes of our Company,
shall not exceed 15% of the total number of issued Shares (excluding Shares held by our
Company as treasury shares) on the day immediately preceding the date on which an offer
to grant an option is made.
The total number of Shares over which Options may be granted under the iFAST ESOS to
Controlling Shareholders and their Associates shall not exceed twenty five per cent. (25%)
of the Shares available under the iFAST ESOS, and the number of Shares over which an
Option may be granted under the iFAST ESOS to each Controlling Shareholder or his
Associate shall not exceed ten per cent. (10%) of the Shares available under the iFAST
ESOS.
Our Company believes that this 15% limit set by the SGX-ST gives our Company sufficient
flexibility to decide the number of Option Shares to offer to its existing and new employees.
The number of eligible participants is expected to grow over the years. Our Company, in line
with its goals 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 iFAST ESOS is limited, our Company may only be
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236
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 sufficient
number of options to offer to new employees as well as to existing ones. The number of
options offered must also be significant enough to serve as a meaningful reward for
contributions to our Group. However, it does not necessarily mean that our Remuneration
Committee will definitely issue Option Shares up to the prescribed limit. Our 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.
4. Maximum entitlements
The aggregate number of Shares comprised in any options to be offered to a grantee shall
be determined at the absolute discretion of our Remuneration Committee, which shall take
into account (where applicable) criteria such as rank, past performance, years of service and
potential for future development of that grantee.
5. Options, exercise period and exercise price
The options that are granted under the iFAST ESOS may have exercise prices that are, at
our Remuneration Committee’s discretion, set at a price (the “Market Price”) equal to the
average of the last dealt prices for a Share on the Official List of the SGX-ST for the five (5)
consecutive market days immediately preceding the date on which an offer to grant an option
is made; or at a discount to the Market Price (subject to a maximum discount of 20%).
Options which are fixed at the Market Price (“Market Price Option”) may be exercised after
the first anniversary of the date on which an offer to grant that option is made while options
exercisable at a discount to the Market Price may be exercised after the second anniversary
from the date on which an offer to grant that option is made (“Incentive Option”). Options
granted under the iFAST ESOS will have a life span of 10 years for options granted to Group
Employees (other than non-executive directors and/or employees of associated companies)
and five (5) years for options granted to non-executive directors and/or employees of
associated companies.
6. Grant of options
Under the rules of the iFAST ESOS, there are no fixed periods for the grant of options. As
such, offers of the grant of options may be made at any time from time to time at the
discretion of our 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 on or after the third market day from the date on which
the aforesaid announcement is made.
7. Termination of options
Special provisions in the rules of the iFAST 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.
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237
8. Acceptance of options
The grant of options shall be accepted within 30 days from the date of the offer. Offers of
options made to grantees, if not accepted before the closing date, will lapse. Upon
acceptance of the offer, the grantee must pay our Company a consideration of S$1.00.
9. Rights of shares arising
Subject to the prevailing legislation, our Company will deliver Shares to participants upon
exercise of their options by way of either (i) an issue of new Shares; or (ii) a transfer of
Shares then held by our Company in treasury.
In determining whether to issue new Shares to participants upon exercise of their options,
our Company will take into account factors such as (but not limited to) the number of Shares
to be delivered, the prevailing market price of the Shares and the cost to our Company of
issuing new Shares or delivering existing Shares.
The financial effects of the above methods are discussed below.
Shares arising from the exercise of options are subject to the provisions of the Memorandum
of Association and Articles of our Company. Shares allotted and issued, and existing Shares
procured by our Company for transfer, upon the exercise of an option shall rank pari passu
in all respects with the then existing issued Shares, save for any dividends, rights, allotments
or distributions, the record date (“Record Date”) for which is prior to the relevant exercise
date of the option. Record Date means the date as at the close of business on which
Shareholders must be registered in order to participate in any dividends, rights, allotments
or other distributions (as the case may be).
10. Duration of the iFAST ESOS
The iFAST ESOS shall continue in operation for a maximum duration of 10 years 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.
11. Abstention from voting
Shareholders who are eligible to participate in the iFAST ESOS are to abstain from voting on
any shareholders’ resolution relating to the iFAST ESOS and should not accept nominations
as proxy or otherwise for voting unless specific instructions have been given in the proxy
form on how the vote is to be cast.
Grant of options with a discounted exercise price
The ability to offer options to participants of the iFAST ESOS with exercise prices set at a discount
to the prevailing market prices of the Shares 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
more on improving the profitability and return of our Group above a certain level which will benefit
all Shareholders when these are eventually reflected through share price appreciation. The iFAST
ESOS will also serve to recruit new group employees whose contributions are important to the
long-term growth and profitability of our Group. Discounted options would be perceived in a more
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238
positive light by the participants, inspiring them to work hard and produce results in order to be
offered options at a discount as only employees who have made outstanding contributions to the
success and development of our Group would be granted options at a discount.
At present, our Company foresees that options may be granted with a discount principally in the
following circumstances:
(a) Firstly, where it is considered more effective to reward and retain talented employees by way
of a discounted price 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 price 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 such options at a discount would allow our Company to grant
options on a more realistic and economically feasible basis. Furthermore, options granted at
a discount will give an opportunity to group employees to realise some tangible benefits even
if external events cause the share price to remain largely static.
(b) Secondly, where it is more meaningful and attractive to acknowledge a participant’s
achievements through a discounted price option rather than paying him a cash bonus. For
example, options granted at a discount 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 price options, as part of eligible employees’ compensation packages. The
iFAST ESOS will provide 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 the Shares after the vesting period.
(c) Thirdly, where due to speculative forces and having regard to the historical performance of
the Share price, the market price of the Shares at the time of the grant of the options may
not be reflective of financial performance indicators such as return on equity and/or earnings
growth.
Our Remuneration Committee will have the absolute discretion to grant options where the
exercise price is discounted, to determine the level of discount (subject to a maximum discount of
20% 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 iFAST
ESOS at a discount not exceeding the maximum discount as aforesaid.
In deciding whether to give a discount and the quantum of such discount (subject to the aforesaid
limit), our Remuneration Committee will have regard to the financial and other performance of our
Company and our Group, the years of service and individual performance of the grantee, the
contribution of the grantee to the success and development of our Group and the prevailing
market conditions.
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239
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 Controlling Shareholder(s) and their Associates
Our Company is of the view that all employees of our Group, including those who are Controlling
Shareholders or Associates of Controlling Shareholders, should be remunerated for their
contribution to our Group on the same basis with no differentiation between employees who are
Controlling Shareholders or Associates of Controlling Shareholders and employees who are not.
Allowing Controlling Shareholders or their Associates to participate in the iFAST ESOS will ensure
that they are equally entitled, with the other Group Employees who are not Controlling
Shareholders or Associates of Controlling Shareholders, to take part and benefit from this system
of remuneration.
The Company is of the view that Controlling Shareholders or Associates of Controlling
Shareholders should not be unduly discriminated against by virtue only for their shareholdings in
the Company. The Company is also of the view that the extension of the iFAST ESOS to
Controlling Shareholders or Associates of Controlling Shareholders will enhance their long-term
commitment to our Group as it will ensure that they will continue to have a stake in the Company
even if they decrease their shareholdings in the Company in the future.
As a safeguard against abuse, all members of the Board (and not just members of the Committee)
who are neither Controlling Shareholders nor their Associates will be involved in deliberations in
respect of Options to be granted to or held by Controlling Shareholders or their Associates and the
terms and conditions, including the vesting periods attached to such Options. Furthermore,
specific approval of the independent Shareholders is required for the grant of Options to
Controlling Shareholders and/or their Associates as well as the actual number of and terms of
such Options.
Specific approval for Mr. Lim Chung Chun has been sought and obtained for his participation in
the iFAST ESOS at the extraordinary general meeting held on 21 October 2014. As Chairman and
CEO of the Company, Mr. Lim Chung Chun plays a major role in the overall management of the
operations and business opportunities of our Group. Our Group benefits much from his strategic
directions and looks to him to continue leading our Group in its businesses. Mr. Lim is also in
charge of overseeing the day-to-day management of our Group as well as our Group’s strategic
and business development. Mr. Lim has been instrumental in developing and guiding our Group
since our incorporation in 2000. As Mr. Lim has extensive experience in the business, he has been
using his wealth of experience and expertise to further the business goals of our Group. Mr. Lim
is also responsible for the effective management of business relations with our Suppliers and
Customers. He has been instrumental in successfully implementing the expansion of our Group’s
businesses outside of Singapore to Hong Kong and Malaysia. Mr. Lim’s leadership and
management skills are invaluable to our Group. The extension of the iFAST ESOS to him will serve
not only as recognition of his valuable contributions to our Group but also give him a stronger
stake in the future performance of our Group. Participation in the iFAST ESOS will serve as a
means to motivate him to achieve and maintain a high level of performance which is vital to the
success of our Group. Save for the specific approval for Mr. Lim Chung Chun’s participation in the
iFAST ESOS, there are no other approvals obtained for the participation of any other Controlling
Shareholders and/or their Associates.
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Rationale for participation of executive directors and employees of our associated
companies and non-executive directors (including our Independent Directors) of our Group
in the iFAST ESOS
The extension of the iFAST ESOS to executive directors and employees of our associated
companies and non-executive directors (including our Independent Directors) of our Group allows
our Group to have a fair and equitable system to reward directors and employees who have made
and who continue to make significant contributions to the long-term growth of our Group.
We believe that the iFAST ESOS will also enable us to attract, retain and provide incentives to its
participants to achieve higher standards of performance as well as encourage greater dedication
and loyalty by enabling our Company to give recognition to past contributions and services as well
as motivating participants generally to contribute towards the long-term growth of our Group.
Although the non-executive directors are not involved in the day-to-day running of our Group’s
business, they, nonetheless, play an invaluable role in furthering the business interests of our
Group by contributing their experience and expertise. The participation by the non-executive
directors in the iFAST 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.
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
under the iFAST ESOS to such non-executive directors.
Financial Effects of the iFAST ESOS
Any Options granted under the iFAST ESOS will have a fair value. Where such options are granted
at a consideration below their fair value, there will be a cost to our Company, the amount of which
will depend on whether the Options are granted at the Market Price or at a discount to the Market
Price. The cost to our Company of granting Options under the iFAST ESOS will be as follows:
(i) the exercise of an Option at a discounted exercise price will 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 will represent the
monetary cost to our Company of granting Options with a discounted exercise price;
(ii) as the monetary cost of granting Options with a discounted exercise price is borne by our
Company, the earnings of our Company will 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 will, accordingly, result in the dilution of our Company’s EPS;
(iii) the effect of the issue and allotment of new Shares upon the exercise of Options on our
Company’s NAV per Share will be accretive if the exercise price is above the NAV per Share,
but dilutive otherwise; and
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(iv) the grant of Options under the ESOS will have an impact on our Company’s reported profit
because under FRS 102, share-based payments require the recognition of an expense in
respect of Options granted under the ESOS. The expense will be based on the fair value of
the Options at the date of grant and will be recognised over the vesting period.
The financial effects discussed above in (i), (ii) and (iii) will only materialise upon the exercise of
the relevant Options. The cost of granting Options discussed in (iv) above will be recognised in the
financial statements even if the Options discussed in (iv) above are not exercised.
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
will have 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 will 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 FRS 102. The cost to our Company in granting an Option will vary depending on the
number of Options granted pursuant to the ESOS, whether these Options are granted at Market
Price or at a discount to the Market Price and the validity period of the Options. Generally, a
greater discount and a longer validity period for an Option will result in a higher potential cost to
our Company.
iFAST ESOS
242
In general, transactions between our Group and any of our interested persons (namely, our
Directors or Controlling Shareholders of our Company or their associates) are interested person
transactions for the purposes of Chapter 9 of the Listing Manual.
Certain terms such as “Associate”, “control”, “Controlling Shareholder”, “entity at risk” and
“interested person” used in this section have the meanings ascribed to them in the Listing Manual
and/or the SFR as the context so requires.
Save as disclosed below and in line with Rules 905(3) and 906(2) of Chapter 9 of the Listing
Manual which provides that the requirements relating to interested person transactions under
Chapter 9 of the Listing Manual do not apply to any transaction below S$100,000, a transaction
below S$100,000 is not considered material in the context of the Offering and is not taken into
account for the purposes of aggregation in this section.
Save as disclosed below and in the section entitled “Restructuring Exercise” of this Prospectus,
there are no transactions undertaken between our Group and any of our interested persons during
the Period Under Review up to the Latest Practicable Date which are material in the context of the
Offering.
PRESENT AND ON-GOING INTERESTED PERSON TRANSACTIONS
Advertisements and subscription of online newspaper with SPH and its related
corporations
Our Controlling Shareholder SPH AsiaOne is a wholly-owned subsidiary of SPH, a Singapore-
incorporated company listed on the Mainboard of the SGX-ST. Accordingly, SPH is deemed to be
interested in our Shares held by SPH AsiaOne and is an “interested person”.
Our Group periodically places print advertisements in newspapers and electronic advertisements
on websites owned by SPH or its related corporations and had subscribed for online newspapers
with SPH. The following table sets out the aggregate amount of fees our Group had paid SPH for
such advertisements and subscription (excluding fees paid to ShareInvestor Pte Ltd, a wholly-
owned subsidiary of SPH, further details of which are set out below). Please see below for more
information on transactions between our Group and ShareInvestor Pte Ltd.
FY2011
S$’000
FY2012
S$’000
FY2013
S$’000
1 January 2014
up to the Latest
Practicable Date
S$’000
Print advertisements in newspapers
and electronic advertisements on
websites 48 10 4 –
Subscription for online newspapers – – 1 –
The Directors believe that the sums paid for the advertisements and the subscription for online
newspapers were in accordance with then market rates and the terms had been negotiated on an
arm’s length basis, taking into consideration the Group’s needs and requirements for such
services.
INTERESTED PERSON TRANSACTIONS AND CONFLICT OF INTERESTS
243
Advertisements and investor relations services with ShareInvestor Pte Ltd
ShareInvestor Pte Ltd is a wholly-owned subsidiary of SPH. Accordingly, it is an “associate” of
SPH, our Controlling Shareholders, and is an “interested person”.
Our Group periodically (i) places print advertisements in newspapers through ShareInvestor Pte
Ltd; and (ii) places electronic advertisements on websites owned by ShareInvestor Pte Ltd.
On 31 October 2014, our Company has also entered into an agreement to engage ShareInvestor
Pte Ltd for investor relations services, such as the development of our Group’s investor relations
website and marketing and advertisements relating to our Listing, over a period of approximately
one (1) year for a fee of approximately S$41,200.
The following table sets out the aggregate amount of fees our Group had paid ShareInvestor Pte
Ltd for such advertisements and investor relations services.
FY2011
S$’000
FY2012
S$’000
FY2013
S$’000
1 January 2014
up to the Latest
Practicable Date
S$’000
Print advertisements in newspapers
and electronic advertisements on
websites 9 – 6 –
Investor relations services – – – –
(1)
Note:
(1) As at the Latest Practicable Date, approximately S$41,200 has not been paid pursuant to the agreement for the
provision of investor relations services. Approximately S$20,600 was paid on 18 November 2014 and the remaining
S$20,600 will be paid after Listing.
Our Directors believe that the sums we paid for the advertisements are in accordance with then
market rates, and the sums we are paying for the investor relations services are in accordance
with current market rates, and the terms have been negotiated on an arm’s length basis, taking
into consideration our needs and requirements for such services.
Advertisements taken out by ShareInvestor Pte Ltd with our Group
ShareInvestor Pte Ltd had previously taken out advertisements with our Group’s in-house
magazine titled “iGP INSIGHTS”.The following table sets out the aggregate amount of fees
ShareInvestor Pte Ltd had paid the Group for such advertisements:
FY2011
S$’000
FY2012
S$’000
FY2013
S$’000
1 January 2014
up to the Latest
Practicable Date
S$’000
Print advertisements in magazine 5 – – –
INTERESTED PERSON TRANSACTIONS AND CONFLICT OF INTERESTS
244
Our Directors believe that the sums we receive for the advertisements are in accordance with then
market rates and the terms have been negotiated on an arm’s length basis, taking into
consideration our needs and requirements.
The Group intends to continue to enter into similar transactions as set out above with SPH and/or
its related corporations, including ShareInvestor Pte Ltd. Such arrangements will be subject to the
review procedures as set out in the section titled “Interested Person Transactions and Conflict of
Interests ? Review Procedures for Future Interested Person Transactions” of the Prospectus, and
will be subject to Chapter 9 of the Listing Manual.
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 Shareholders. Our Audit
Committee will adopt the following procedures when reviewing interested person transactions:
(a) when purchasing items from or engaging the services of an interested person, two (2) other
quotations from non-interested persons will be obtained for comparison to ensure that the
interests of minority Shareholders are not disadvantaged. The purchase price or fee for
services shall not be higher than the most competitive price or fee of the two (2) other
quotations from non-interested persons. In determining the most competitive purchase price
or fee, all pertinent factors, including but not limited to quality, delivery time and track record
will be taken into consideration;
(b) when selling items or supplying services to an interested person, the price or the fee and
terms of two (2) other successful transactions of a similar nature with non-interested persons
will be used as comparison to ensure that the interests of minority Shareholders are not
disadvantaged. The sale price or fee for the supply of services shall not be lower than the
lowest sale price or fee of the two (2) other successful transactions with non-interested
persons;
(c) when renting properties from or to an interested person, appropriate steps will be taken to
ensure that such rent is commensurate with 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 (where necessary). The
rent payable shall be based on the most competitive market rental rates of similar properties
in terms of size and location, based on the results of the relevant enquiries;
(d) when selling properties to an interested person, our Directors shall take appropriate steps to
ensure that such sale price is commensurate with the prevailing market rates for similar
properties and obtaining necessary reports or reviews published by property agents
(including an independent valuation report by a property valuer, when considered
appropriate); and
(e) an interested person transaction above S$100,000 is to be approved prior to entry by a
Director who shall not be an interested person in respect of that transaction. An interested
person transaction below S$100,000 does not require such approval. Any sale or purchase
contract to be made with an interested person shall not be approved unless the pricing is:
(i) determined in accordance with our usual business practices and policies;
INTERESTED PERSON TRANSACTIONS AND CONFLICT OF INTERESTS
245
(ii) consistent with the usual margin given or price received by us for the same or
substantially similar type of transactions between us and unrelated third parties; and
(iii) the terms are no more favourable to the interested person than those extended to or
received from unrelated third parties.
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 in accordance with the procedures
outlined above. It will take into account all relevant non-quantitative factors. In the event that a
member of our Audit Committee is interested in any such transaction, he will abstain from
reviewing that particular transaction. Furthermore, if during these periodic reviews, our Audit
Committee believes that the guidelines and procedures as stated above are not sufficient to
ensure that interests of minority Shareholders are not prejudiced; our Audit Committee will adopt
new guidelines and procedures.
In addition, our Audit Committee will include the review of interested person transactions as part
of its standard procedures while examining the adequacy of our internal controls. Our Board will
also ensure that all disclosure, approval and other requirements on interested person
transactions, including those required by prevailing legislation, the Listing Manual and accounting
standards, are complied with. In addition, such transactions will also be subject to Shareholders’
approval if required by the Listing Manual.
Under Chapter 9 of the Listing Manual, a listed company may seek a shareholders’ mandate for
recurrent transactions of revenue or trading nature or those necessary for its day-to-day
operations such as supplies and materials, which may be carried out with the listed company’s
interested persons, but not for the purchase or sale of assets, undertakings or businesses. There
is currently no general mandate from our Shareholders for recurrent interested person
transactions of revenue or trading nature or those necessary for our day-to-day operations. In the
event that such a general mandate is required in the future, we shall obtain it in accordance with
the provisions of the Listing Manual.
OTHER TRANSACTIONS
The following disclosures are not interested person transactions but we are disclosing them in the
interest of full disclosure.
Outsourcing fees charged to iFAST India
iFAST India is wholly-owned by Pecuniam. Pecuniam is owned by various shareholders, most of
whom are also existing or previous shareholders and/or employees of our Company. In addition,
both Pecuniam and our Company have common Controlling Shareholders, Mr. Lim Chung Chun
and SPH AsiaOne Ltd.
We have entered into an agreement with iFAST Financial India Private Limited to provide them
with IT outsourcing services. iFAST Financial India Private Limited is a subsidiary of iFAST India.
The IT outsourcing fee paid by iFAST Financial India Private Limited to us was approximately
S$0.31 million in FY2011, S$0.23 million in FY2012, S$0.23 million in FY2013 and S$0.19 million
for the Period Under Review up to the Latest Practicable Date. There was an adjustment in IT
outsourcing fees to lower such fees from FY2012 onwards. The aforementioned fees charged are
on a commercial arms’ length basis.
INTERESTED PERSON TRANSACTIONS AND CONFLICT OF INTERESTS
246
POTENTIAL CONFLICT OF INTERESTS
Save as disclosed in this Prospectus in the sections entitled “Directors, Management and Staff”
and “Interested Person Transactions and Conflict of Interests”, none of our Directors, Executive
Officers or Controlling Shareholder or their Associates has any interest, direct or indirect, in:
(a) any company carrying on the same business or dealing in similar products as us;
(b) any company that is our Group’s customer or supplier of goods and services; and
(c) any material transactions to which our Group was or is a party.
Discontinued India Operations
Our discontinued India Business and iFAST India which is wholly-owned by Pecuniam presents a
potential conflict of interest situation. Pecuniam is owned by certain of our Shareholders, including
Mr. Lim Chung Chun. iFAST India is owned by Pecuniam as a result of DAPH’s exit of the joint
venture that it had established with our Company. In addition, the India Business is loss-making
and has not obtained the relevant licences for the efficient running of an investment platform
business. Please refer to the section entitled “Restructuring Exercise” of this Prospectus for
further details.
To mitigate any conflict of interest that may arise in relation to iFAST India and the India Business,
our Company has entered into a deed of arrangement with Pecuniam (the “Deed of
Arrangement”) in which Pecuniam has granted a right of first refusal (“ROFR”) to our Group for
so long as there are common controlling shareholders (“ROFR Period”). The ROFR covers any
proposed offer by a third party to purchase Pecuniam’s interest in iFAST India and/or the whole
or any part of iFAST India’s B2C Business and/or the B2B Business in India (the “Relevant
Assets”) or any proposed sale or disposal by Pecuniam of the Relevant Assets, which shall be
notified by Pecuniam to our Group in writing. In the event that our Group fails or does not wish to
exercise the ROFR within 45 days (or such longer period as may be mutually agreed between our
Company and Pecuniam), Pecuniam will be entitled to dispose of the Relevant Assets on terms
no more favourable than what was offered to our Group. The exercise of the ROFR will be at the
discretion of our Company’s Directors who do not have any interests in iFAST India (the
“Non-interested Directors”) and Audit Committee.
In addition, within the ROFR, Pecuniam has undertaken during the ROFR Period (the “Non-
Compete Undertaking”) that, unless with the approval from the Non-interested Directors and the
Audit Committee, it shall not, and shall procure that iFAST India and its subsidiaries shall not,
directly or indirectly, outside of India:
(i) either solely or jointly with or on behalf of any person, firm or corporation, carry on, be
engaged in or interested in any capacity in a business, trade or occupation which competes
with the B2B Business and/or the B2C Business of our Group; or
(ii) hire, solicit, entice or in any manner persuade any employee of our Group to discontinue or
terminate his employment with our Group.
Please refer to the section entitled “Restructuring” for further details of the discontinued India
Business and iFAST India.
INTERESTED PERSON TRANSACTIONS AND CONFLICT OF INTERESTS
247
Notwithstanding that Chapter 9 of the Listing Manual does not apply to arrangements, matters or
transactions between our Group and iFAST India which are not of a revenue or trading nature or
those necessary for our Group’s day-to-day operations, such arrangements, matters and
transactions shall be approved by our Audit Committee.
MITIGATION OF POTENTIAL CONFLICTS OF INTERESTS
In addition to the ROFR and the Non-Compete Undertaking described above, we also believe that
any potential conflicts of interests, whether with our Directors, Controlling Shareholders and their
respective associates or otherwise (including those mentioned above), are mitigated as follows:
a. our Directors have a duty to disclose their interests in respect of any contract, proposal,
transaction or any other matter whatsoever in which they have any personal material interest,
directly or indirectly, or any actual or potential conflicts of interest (including conflicts of
interest that arise from their directorship(s) or executive position(s) or personal investments
in any other corporation(s)) that may involve them. Upon such disclosure, such Directors
shall not participate in any proceedings of our Board of Directors, and shall in any event
abstain from voting in respect of any such contract, arrangement, proposal, transaction or
matter in which the conflict of interest arises, unless and until our Audit Committee has
determined that no such conflict of interest exists;
b. our Audit Committee is required to examine the internal control procedures and review
procedures put in place by our Company to determine if such procedures put in place are
sufficient to ensure that interested person transactions are conducted on normal commercial
terms and will not be prejudicial to our Company and our minority Shareholders;
c. our Audit Committee will review any actual or potential conflicts of interest that may involve
our Directors as disclosed by them to our Board and the exercise of Directors’ fiduciary duties
in this respect. Upon disclosure of an actual or potential conflict of interests by a Director, our
Audit Committee will consider whether a conflict of interests does in fact exist. A Director who
is a member of our Audit Committee will not participate in any proceedings of our Audit
Committee in relation to the review of a conflict of interests relating to him. The review will
include an examination of the nature of the conflict and such relevant supporting data, as our
Audit Committee may deem reasonably necessary;
d. upon our listing on the SGX-ST, we will be subject to Chapter 9 of the Listing Manual in
relation to interested person transactions. The objective of these rules is to ensure that our
interested person transactions do not prejudice the interests of our Shareholders as a whole.
These rules require us to make prompt announcements, disclosures in our annual report
and/or seek Shareholders’ approval for certain material interested person transactions. Our
Audit Committee may also have to appoint independent financial advisers to review such
interested person transactions and opine on whether such transactions are fair and
reasonable to us, not prejudicial to our interests and the interests of our minority
Shareholders. Under the Listing Manual, our Shareholders’ Mandate is required to be
renewed at each annual general meeting and disclosure must be made in our annual report
of the aggregate value of interested person transactions conducted pursuant to such
mandate during each financial year, and in the annual reports for the subsequent years
during which such mandate is in force. We must also adopt a new mandate if for any reason
the review policies and procedures under our current Shareholders’ Mandate are
inappropriate;
INTERESTED PERSON TRANSACTIONS AND CONFLICT OF INTERESTS
248
e. our Audit Committee will also monitor the investments in our customers, suppliers and
competitors made by our Directors, Controlling Shareholders and their respective associates
who are involved in the management of or have shareholding interests in similar or related
business of our Company (to the extent as disclosed by them to our Audit Committee) and
make assessments on whether there are any potential conflicts of interest;
f. notwithstanding the appointment of one of our Directors by our Controlling Shareholder
(namely, Mr. Loh Huan Ping who is a nominee director of SPH AsiaOne, a Controlling
Shareholder), our Directors owe fiduciary duties to us, including the duty to act in good faith
and in our best interests. In addition, a Director may only disclose information (not otherwise
available to him) which he has obtained in his capacity as a director, to the Controlling
Shareholder whose interests he represents, when certain conditions stipulated in Section
158 of the Companies Act are met. These conditions are that: the relevant director declares
at a meeting of the Directors the person to whom such information is to be disclosed and
particulars of such information; our Board authorises him to make such disclosure; and the
disclosure will not be likely to prejudice us. In addition, the relevant director shall abstain
from voting in respect of any decision of our Board to authorise him to make such disclosure.
Therefore, any non-public information regarding us that any of our Directors wishes to
disclose to the Controlling Shareholder whose interests he represents can only be so
disclosed if our Board authorises such disclosure and our Board is satisfied that such
disclosure will not be likely to prejudice us. Our Directors are also subject to a duty of
confidentiality that precludes a Director from disclosing to any third party (including any of
our Shareholders or their Associates) information that is confidential; and
g. Our Audit Committee will, following the listing of our Company on the SGX-ST, undertake the
following additional responsibilities:
(i) review on a periodic basis the framework and processes established above for the
implementation of the terms of the ROFR and the Non-Compete Undertaking in order
to ensure that such framework and processes remain appropriate;
(ii) review and assess from time to time whether additional processes are required to be put
in place to manage any material conflicts of interest with our Directors, Controlling
Shareholders and their respective associates and propose, where appropriate, the
relevant measures for the management of such conflicts; and
(iii) review and propose, where appropriate, the relevant measures for the management of
all conflicts of interest matters referred to it.
INTERESTED PERSON TRANSACTIONS AND CONFLICT OF INTERESTS
249
Upon listing and quotation on the SGX-ST, our Shares will be traded under the book-entry
(scripless) settlement system of CDP, and all dealings in and transactions of our Shares through
the SGX-ST will be effected in accordance with the terms and conditions for the operation of
Securities Accounts with CDP, as amended from time to time.
CDP, a wholly-owned subsidiary of the Singapore Exchange Limited, is incorporated under the
laws of Singapore and acts as a depository and clearing organisation. CDP holds securities for its
account holders and facilitates the clearance and settlement of securities transactions between
account holders through electronic book-entry changes in the Securities Accounts maintained by
such account holders with CDP.
Our Shares will be registered in the name of CDP or its nominees 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 the laws of
Singapore and our Articles, as members of our Company in respect of the number of our Shares
credited to their respective Securities Accounts.
Persons holding our Shares in a Securities Account with CDP may withdraw the number of Shares
they own from the book-entry settlement system in the form of physical share certificates. Such
share certificates will not, however, be valid for delivery pursuant to trades transacted on the
SGX-ST, 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 will be payable to CDP 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) will be payable to
our Share Registrar for each share certificate issued and 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 the SGX-ST 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 our Shares deposited before they can effect the desired trades. A fee of S$10.00,
subject to GST at the prevailing rate (currently seven per cent. (7%)), is payable upon the deposit
of each instrument of transfer with CDP. The above fees may be subject to such changes 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 our Shares sold and the buyer’s Securities
Account being credited with the number of our Shares acquired. No transfer stamp duty is
currently payable for the transfer of our Shares that are settled on a book-entry basis.
A Singapore clearing fee for trades in our Shares on the SGX-ST is payable at the rate of 0.04 per
cent. (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 are subject to GST at the
prevailing rate (currently seven per cent. (7%)).
CLEARANCE AND SETTLEMENT
250
Dealings in our Shares will be carried out in Singapore dollars and will be effected for settlement
in CDP on a scripless basis. Settlement of trades on a normal “ready” basis on the SGX-ST
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 Securities Account with CDP or a
securities sub-account with a depository agent. A depository agent may be a member company of
the SGX-ST, bank, merchant bank or trust company.
CLEARANCE AND SETTLEMENT
251
THE OFFERING
The Offering consists of: (i) the Placement of 30,000,000 Placement Shares to investors, including
institutional and other investors in Singapore and outside the United States in compliance with
Regulation S under the US Securities Act, and (ii) the Public Offer of 2,800,000 Offer Shares in
Singapore. The New Shares may be re-allocated between the Placement and the Public Offer at
the sole discretion of the Joint Issue Managers, Bookrunners and Underwriters in the event of
over-subscription in one (1) and under-subscription in the other.
Separate from the Offering, each of the Cornerstone Investors, being FIL Investment Management
(Hong Kong) Limited and OWW Investments III Limited, has entered into their respective
Cornerstone Subscription Agreements with the Company to subscribe for an aggregate of
19,000,000 Cornerstone Shares at the Offering Price, conditional upon the Management and
Underwriting Agreement and the Placement Agreement having been entered into and not having
been terminated pursuant to their terms on or prior to the Listing Date. The Cornerstone Shares
will in aggregate constitute approximately 7.4% of the total number of issued Shares as at the date
of Listing. The Cornerstone Shares acquired by the Cornerstone Investors are not subject to any
lock-up restrictions in respect of their shareholding interests in our Company. In the event that any
one (1) or more Cornerstone Investors fails to pay for the Cornerstone Shares which they have
committed to subscribe, such Cornerstone Shares will be reallocated to the Placement the
Offering may still proceed and, if so, the subscribers of the New Shares will still be required to pay
for and complete their subscription pursuant to the Offering.
We and the Joint Issue Managers, Bookrunners and Underwriters have entered into the
Management and Underwriting Agreement and the Placement Agreement. Subject to the terms
and conditions contained in the Management and Underwriting Agreement and the Placement
Agreement, the Joint Issue Managers, Bookrunners and Underwriters have agreed to procure
subscriptions and payment, failing which to subscribe and pay, for the number of New Shares set
forth opposite its name below at the Offering Price.
Number of New Shares
DBS Bank 22,960,000
DMG 9,840,000
Total 32,800,000
The Management and Underwriting Agreement and the Placement Agreement may be terminated
at any time prior to delivery of the New Shares pursuant to the terms of the Management and
Underwriting Agreement and the Placement Agreement and upon the occurrence of certain
events, including, among other things, certain force majeure events. The closing of the Offering
is conditional upon certain events, including the fulfilment, or waiver by the SGX-ST, of all
conditions contained in the letter of eligibility from the SGX-ST for the listing and quotation of all
our issued Shares, the New Shares, the Cornerstone Shares, the Option Shares, Award Shares
and the Additional Shares on the Official List of the SGX-ST.
The Joint Issue Managers, Bookrunners and Underwriters may make sub-placement
arrangements in respect of their obligations under the Management and Underwriting Agreement
and the Placement Agreement, upon such terms and conditions as they deem fit.
PLAN OF DISTRIBUTION
252
The completion of the Placement and the Public Offer are each conditional upon the completion
of the other.
The Offering Price was determined following a book-building process by agreement among, us,
and the Joint Issue Managers, Bookrunners and Underwriters. Among the factors that were taken
into account in determining the Offering Price are the demand for the New Shares, the prevailing
conditions in the securities market, current market valuations of publicly traded companies that
we, and the Joint Issue Managers, Bookrunners and Underwriters believe to be reasonably
comparable to us, an assessment of our recent historical performance, estimates of our business
potential and earnings prospects, the current state of our development and the current state of our
industry and economy as a whole.
The New Shares are being offered and sold outside the United States in offshore transactions in
reliance on Regulation S under the US Securities Act.
Commission
Pursuant to the Management and Underwriting Agreement between our Company and the Joint
Issue Managers, Bookrunners and Underwriters, our Company appointed the Joint Issue
Managers, Bookrunners and Underwriters to manage the Offering. The Joint Issue Managers,
Bookrunners and Underwriters will receive a management fee from our Company for services
rendered in connection with the Offering.
We will pay the Joint Issue Managers, Bookrunners and Underwriters an underwriting and
placement commission (excluding GST) of 3.5% of total gross proceeds of the Offering (including
proceeds raised from the sale of the Additional Shares, if the Over-allotment Option is exercised)
and the issuance of the Cornerstone Shares.
Purchasers of Shares, other than those in the Public Offer, may be required to pay to the Joint
Issue Managers, Bookrunners and Underwriters a brokerage fee up to 1.0% of the Offering Price
at the time of settlement.
Indemnities
Under the Management and Underwriting Agreement and the Placement Agreement, our
Company shall hold the Joint Issue Managers, Bookrunners and Underwriters, its sub-
underwriters and sub-placement agents, their affiliates, associated and related companies and
corporations, as well as their respective directors, employees and agents (including the directors
and employees of such agents) (collectively, the “Indemnified Persons”) fully and effectively
indemnified against all liabilities, costs and expenses due to any claim which may be brought or
threatened to be brought against any of them in relation to the Offering (whether or not such claim
is successful, compromised or settled) arising out of, inter alia:
(a) any delay or failure by our Company to comply with any terms of the Management and
Underwriting Agreement, the Placement Agreement or requirements of any statute or
statutory regulation, the Listing Manual, governmental or ministerial order or decree, or
decision, notice, regulation, guidance note or circular of any governmental or quasi-
sovereign authority, the SGX-ST or the Securities Industry Council or any other authority
(including without limitation to the foregoing, any directive or order by the Authority pursuant
to the Securities and Futures Act);
PLAN OF DISTRIBUTION
253
(b) this Prospectus (or any amendment or supplement thereto) not containing or being alleged
not to contain all information material in the context of the Offering and the Cornerstone
Tranche, or any statement contained herein or in any information which is otherwise supplied
by our Company to the Joint Issue Managers, Bookrunners and Underwriters in connection
with the Offering being untrue, incorrect or misleading;
(c) any actual or alleged misrepresentation or omission contained in this Prospectus; and
(d) any breach or alleged breach of our Company of any of the representations, warranties and
undertakings in the Management and Underwriting Agreement and the Placement
Agreement or any of the obligations of the Company or any of their respective directors,
officers or employees contained in the Management and Underwriting Agreement and
Placement Agreement,
including in each case (but without prejudice to the generality of the foregoing) all costs, charges
and expenses which the Indemnified Persons may properly incur or bear in disputing any such
claim made against them or in establishing any claim on their part under the foregoing, in each
case except in relation to any claim arising out of the gross negligence, fraud or wilful default of
the Indemnified Person as may be determined by a final judgment of a court of competent
jurisdiction.
The indemnity provides that where the indemnification is unavailable or insufficient, the Company
shall contribute to the amount payable by the Indemnified Person in such proportion as is
appropriate to reflect the relative benefits received by the Company and the Joint Issue Managers,
Bookrunners and Underwriters from the Offering.
Where such allocation is prohibited by applicable law, then the Company and the Joint Issue
Managers, Bookrunners and Underwriters shall contribute proportionately to reflect both the
relative benefits and relative fault of the Company and the Joint Issue Managers, Bookrunners and
Underwriters, as the case may be, in connection with the statements or omissions which resulted
in such losses claims, damages or liabilities (or actions in respect thereof), as well as any other
relevant equitable considerations. The relative benefits received by the Company and the Joint
Issue Managers, Bookrunners and Underwriters shall be deemed to be in the same proportion as
the total net proceeds from the Offering (but before deducting total underwriting commissions to
be paid to the Joint Issue Managers, Bookrunners and Underwriters) to be received by the
Company bear to the total underwriting commissions to be received by the Joint Issue Managers,
Bookrunners and Underwriters in respect of the Offering. The relative fault is determined by
reference to, among other things, whether the untrue or alleged untrue statement of a material fact
or the omission or alleged omission to state a material fact relates to information supplied by the
Company or the Joint Issue Managers, Bookrunners and Underwriters, as the case may be, and
the respective parties’ relative intent, knowledge, access to information and opportunity to correct
or prevent such statement or omission. No Joint Issue Manager, Bookrunner and Underwriter is
required to contribute any amount in excess of the amount by which the total price at which the
Shares underwritten by it and distributed to the public under the Offering exceeds the amount of
damages which such Joint Issue Manager, Bookrunner and Underwriter has otherwise been
required to pay by reason of such untrue or alleged untrue statement of material fact or omission
or alleged omission.
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254
OVER-ALLOTMENT OPTION AND PRICE STABILISATION
In connection with the Offering, we have granted the Stabilising Manager, an Over-allotment
Option exercisable by the Stabilising Manager, in whole or in part, on its own behalf and on behalf
of the Joint Issue Managers, Bookrunners and Underwriters, on one or more occasions, during the
period commencing on the Listing Date until the earlier of (i) the date falling 30 days from the
Listing Date or (ii) the date when the Stabilising Manager (or persons acting on its behalf) has
bought, on the SGX-ST, an aggregate of 3,280,000 Additional Shares, representing an aggregate
of not more than 10% of the Offering, to undertake stabilising actions (“Expiry Date”) solely to
cover the over-allotment of Shares, if any.
In connection with the Offering, the Stabilising Manager (or persons acting on behalf of the
Stabilising Manager), may, in its discretion, but subject always to applicable laws and regulations,
over-allot Shares or effect transactions with a view to supporting the market price of the Shares
at a level higher than that which would otherwise prevail in the open market. Such transactions
may be effected on the SGX-ST and other jurisdictions where it is permissible to do so, in each
case in compliance with all applicable laws and regulations. Such transactions, if commenced,
may be discontinued at any time by the Stabilising Manager without notice (unless such notice is
required by law) and shall not be effected after the Expiry Date.
Neither we, nor the Joint Issue Managers, Bookrunners and Underwriters make any
representation or prediction as to the direction or magnitude of any effect that the transactions
described above may have on the price of our Shares. In addition, neither we, nor the Joint Issue
Managers, Bookrunners and Underwriters make any representation that the Stabilising Manager
will engage in such transactions or that such transactions once commenced, will not be
discontinued without notice (unless such notice is required by law). The Stabilising Manager will
be required to make a public announcement through the SGX-ST on the cessation of the
stabilising action and the amount of the Over-allotment Option that has been exercised no later
than the start of the trading day of the SGX-ST immediately after the day of cessation of stabilising
action.
SHARE LENDING AGREEMENT
In connection with settlement and stabilisation, the Stabilising Manager has entered into a share
lending agreement (the “Share Lending Agreement”) with Mr. Lim Chung Chun pursuant to which
the Stabilising Manager may borrow up to 3,280,000 Shares for the sole purpose of facilitating
settlement of over-allocations, if any, made in connection with the Offering. Any Shares that may
be borrowed by the Stabilising Manager under the Share Lending Agreement will be returned by
the Stabilising Manager to Mr. Lim Chung Chun either through the purchase of Shares in the open
market by the Stabilising Manager in the conduct of stabilisation activities or through the exercise
of the Over-allotment Option by the Stabilising Manager.
INTERESTS OF THE JOINT ISSUE MANAGERS, BOOKRUNNERS AND UNDERWRITERS
Each of the Joint Issue Managers, Bookrunners and Underwriters engages in transactions with
and performs services for us in the ordinary course of business and have engaged, and may in
the future engage, in commercial banking, trading and/or investment banking transactions with
our Group, for which it has received, and may in future, receive customary fees. DBS is also our
Principal Banker and Receiving Bank.
PLAN OF DISTRIBUTION
255
In addition, pursuant to the Management and Underwriting Agreement and the Placement
Agreement, we have appointed each of the Joint Issuer Managers, Bookrunners and Underwriters
as the joint issue managers, bookrunners and underwriters and placement agents of the Offering
and we will pay each of the Joint Issuer Managers, Bookrunners and Underwriters a fee for
providing such services to us, the details of which are set out above.
Save as disclosed above in the section entitled “Shareholders” of this Prospectus, we do not have
any material relationship with the Joint Issue Managers, Bookrunners and Underwriters.
DISTRIBUTION AND SELLING RESTRICTIONS
The distribution of this document or any offering material and the offering, sale or delivery of
Shares is restricted by law in certain jurisdictions. Therefore, persons who may come into
possession of this document or any offering material are advised to consult with their own legal
advisers as to what restrictions may be applicable to them and to observe such restrictions. This
document may not be used for the purpose of an offer or invitation in any circumstances with
which such offer or invitation is not authorised.
No action has been or will be taken in any jurisdiction that would permit a public offering of the
Shares being offered outside Singapore or the possession, circulation or distribution of this
document or any other material relating to us or the Shares in any jurisdiction where action for the
purpose is required. Accordingly, the Shares may not be offered or sold, directly or indirectly, and
neither this document nor any other offering material or advertisement in connection with the
Shares may be distributed or published, in or from any country or jurisdiction except under
circumstances that will be in compliance with any applicable rules or regulations of any such
country or jurisdiction.
United States of America
The New Shares have not been and will not be registered under the US Securities Act, and may
not be offered or sold within the United States except in certain transactions exempt from the
registration requirements of the US Securities Act. The Joint Issue Managers, Bookrunners and
Underwriters will only sell the New Shares outside the United States in offshore transactions in
reliance on Regulation S under the US Securities Act. Terms used in this paragraph have the
meanings given to them by Regulation S under the US Securities Act.
Hong Kong
This Prospectus does not constitute an offer to the public in Hong Kong to subscribe for the
Shares. The contents of this Prospectus have not been reviewed by any regulatory authority in
Hong Kong and no action has been taken in Hong Kong to authorise or register this Prospectus
or to permit the distribution of this Prospectus or any document issued in connection with it.
No Shares of our Company have been or may be offered or sold in Hong Kong or offered or
directed from outside Hong Kong to any person in Hong Kong, by means of any document, other
than (a) to “professional investors” as defined in the SFO and any rules made under that
Ordinance; or (b) in other circumstances which do not result in the document being a “prospectus”
as defined in the Companies (Winding Up and Miscellaneous Provisions) Ordinance (Cap. 32) of
Hong Kong or which do not constitute an offer to the public within the meaning of that Ordinance.
PLAN OF DISTRIBUTION
256
No advertisement, invitation or document relating to the Shares of our Company, which is directed
at, or the contents of which are likely to be accessed or read by, the public in Hong Kong has been
or will be issued other than with respect to such Shares which are or are intended to be disposed
of only to persons outside Hong Kong or only to “professional investors” as defined in the SFO and
any rules made under that Ordinance.
Malaysia
No prospectus or other offering material or document in connection with the offer and sale of the
New Shares has been or will be registered with the SC pursuant to the CMSA and no approval for
the offering of the New Shares has been obtained from the SC pursuant to the CMSA. Accordingly,
this offering document and any other document or material in connection with the offer or sale, or
invitation for subscription or purchase, of the New Shares may not be circulated or distributed, nor
may the New Shares be offered or sold, or be made the subject of an invitation for subscription
or purchase, whether directly or indirectly, to persons in Malaysia other than (i) a closed end fund
approved by the SC; (ii) a holder of a CMSL; (iii) a person who acquires the New Shares, as
principal, if the aggregate consideration for the acquisition is not less than Ringgit 250,000 (or
equivalent in a foreign currency) for each transaction whether such amount is paid for in cash or
otherwise; (iv) a corporation with total net assets exceeding Ringgit 10 million (or equivalent in a
foreign currency) based on the latest audited accounts; (v) a bank licensee or insurance licensee
as defined in the Labuan Financial Services and Securities Act 2010; or (vi) any other person as
may be specified by the SC in any guideline issued under Section 377 of the CMSA; provided that,
in each of the preceding categories (i) to (vi), the distribution of the New Shares is made by a
holder of a CMSL who carries on the business of dealing in securities. This offering document
does not constitute and may not be used for the purpose of a public offering or an issue, offer for
subscription or purchase, invitation to subscribe for or purchase any securities requiring the
registration of a prospectus with the SC under the CMSA.
United Kingdom
This Prospectus does not constitute an approved prospectus for the purposes of and as defined
in Section 85 of the Financial Services and Markets Act 2000 (as amended) (the “FSMA”), has not
been prepared in accordance with the prospectus rules issued by the UK Financial Conduct
Authority (the “FCA”) pursuant to Section 73A of the FSMA and has not been approved by or filed
with the FCA or by any other authority which would be a competent authority for the purposes of
the Prospectus Directive. The New Shares may not be offered or sold and will not be offered or
sold to the public in the UK (within the meaning of Sections 85 and 102B of the FSMA) save in the
circumstances where it is lawful to do so without an approved prospectus (within the meaning of
Section 85 of the FSMA) being made available to the public before the offer is made. In addition,
no person may communicate or cause to be communicated any invitation or inducement to engage
in investment activity (within the meaning of Section 21 of the FSMA) received by it in connection
with the issue or sale of any New Shares except in circumstances in which Section 21(1) of the
FSMA does not apply to our Company.
This Prospectus is only distributed to and is only directed at persons in the United Kingdom what
are qualified investors within the meaning of Article 2(1)(e) of the Prospectus Directive: (i) who
have professional experience in matters relating to investments falling within Article 19(5) of the
Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (as amended) (the
“Order”); and/or (ii) who are high net worth bodies corporate, unincorporated associations and
partnerships and trustees of high value trusts as described in Article 49(2)(a) to (d) of the Order;
or (iii) who are persons to whom it may otherwise be lawfully communicated (all such persons
referred to in (i) to (iii) above together being referred to as “Relevant Persons”. The New Shares
PLAN OF DISTRIBUTION
257
are only available to, and an investment activity will only be engaged with, Relevant Persons. Any
person that is not a Relevant Person should not act on or rely on this document or any of its
contents.
European Economic Area
This Prospectus is not a prospectus for the purposes of the Prospectus Directive (as defined
below).
In relation to each Member State of the European Economic Area that has implemented the
Prospectus Directive (each, a “Relevant Member State”) an offer to the public of any New Shares
which are the subject of the offer contemplated by this Prospectus may not be made in that
Relevant Member State except that an offer to the public in that Relevant Member State of any
New Shares may be made at any time under the following exemptions under the Prospectus
Directive, if they have been implemented in that Relevant Member State:
(a) to any legal entity that is a qualified investor as defined in the Prospectus Directive;
(b) to fewer than 100 or, if the Relevant Member State has implemented the relevant provisions
of the 2010 PD Amending Directive, 150 natural or legal persons (other than qualified
investors as defined in the Prospectus Directive) as permitted under the Prospectus
Directive, subject to obtaining the prior consent of the Joint Issue Managers, Bookrunners
and Underwriters nominated by our Company for such offer; or
(c) in any other circumstances falling within Article 3(2) of the Prospectus Directive,
provided that no such offer of New Shares shall result in a requirement for the publication by our
Company or the Joint Issue Managers, Bookrunners and Underwriters of a prospectus pursuant
to Article 3 of the Prospectus Directive.
Neither our Company nor the Joint Issue Managers, Bookrunners and Underwriters have
authorised, nor do they authorise, the making of any offer of New Shares through any financial
intermediary, other than offers made by the Joint Issue Managers, Bookrunners and Underwriters
which constitute the final offering of New Shares contemplated in this Prospectus. Accordingly, no
purchaser of New Shares, other than the Joint Issue Managers, Bookrunners and Underwriters,
is authorised to make any further offer of the New Shares on behalf of our Company.
For purposes of this provision, the expression an “offering to the public” in relation to any New
Shares in any Relevant Member Sate means the communication in any form and by any means
of sufficient information on the terms of the offer and any New Shares to be offered so as to enable
an investor to decide to purchase any New Shares, as the same may be varied in that Relevant
Member State by any measure implementing the Prospectus Directive in that Relevant Member
State and the expression “Prospectus Directive” means Directive 2003/71EC (and amendments
thereto, including the 2010 PD Amending Directive to the extent implemented in the Relevant
Member State) and includes any relevant implementing measure in each Relevant Member State
and the expression “2010 PD Amending Directive” means Directive 2010/73/EU.
PLAN OF DISTRIBUTION
258
1. INFORMATION ON DIRECTORS AND EXECUTIVE OFFICERS
(a) There is no shareholding qualification for Directors in our Articles of Association.
(b) Save as disclosed below, as at the date of this Prospectus, none of our Directors or
Executive Officers:
(i) has, at any time during the last ten (10) years, had 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 or at any time within two (2) years from the
date he ceased to be a partner;
(ii) has, at any time during the last ten (10) years, had 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) has any unsatisfied judgment against him;
(iv) has ever been convicted 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) has ever been convicted 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) has at any time during the last ten (10) years, had judgment entered against him
in any civil proceedings 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 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) has ever been convicted in Singapore or elsewhere of any offence in connection
with the formation or management of any entity or business trust;
(viii) has ever been disqualified from acting as a director of any 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;
GENERAL AND STATUTORY INFORMATION
259
(x) has ever, to his knowledge, been concerned with the management or conduct, in
Singapore or elsewhere, of the affairs of:
(aa) any corporation which has been investigated for a breach of any law or
regulatory requirement governing corporations in Singapore or elsewhere;
(bb) 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;
(cc) any business trust which has been investigated for a breach of any law or
regulatory requirement governing business trusts in Singapore or elsewhere;
or
(dd) 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; or
(xi) has been the subject of any current or past investigation or disciplinary
proceedings, or has been reprimanded or issued by warning, by the Authority or
any other regulatory authority, exchange, professional body or government
agency, whether in Singapore or elsewhere.
Disclosures relating to Mr. Lim Chung Chun
In his capacity as CEO and as a director of iFAST HK, Mr. Lim is concerned with the
management in relation to iFAST HK which is being investigated by the SFC pursuant to
182(1) of the SFO and which has also been subject to periodic inspections by SFC. Please
refer to the section entitled “Government Regulations and Licensing” of this Prospectus for
further details of the SFC Investigation.
In his capacity as CEO and as a director of iFAST Financial, Mr. Lim is concerned with the
management in relation to iFAST Financial, which has been subject to periodic inspections
by MAS in the past. iFAST Financial has also received various supervisory warnings,
reprimands and received an offer of composition in the past in relation to breaches of the
relevant laws, regulations, guidelines and/or notices. Please refer to the section entitled
“Government Regulations and Licensing” of this Prospectus for further details.
Disclosures relating to Mr. Yao Chih Matthias, Mr. Ling Peng Meng, Mr. Kok Chee Wai
and Mr. Ng Loh Ken Peter
Mr. Yao Chih Matthias, Mr. Ling Peng Meng, Mr. Kok Chee Wai and Mr. Ng Loh Ken Peter
are independent directors of our Company. Mr. Yao Chih Matthias, Mr. Ng Loh Ken Peter and
Mr. Kok Chee Wai were appointed as directors of iFAST Financial on 1 August 2013, and Mr.
Ling Peng Meng was appointed as a director of iFAST Financial on 4 September 2013.
GENERAL AND STATUTORY INFORMATION
260
iFAST Financial has been subject to periodic inspections by MAS in the past. iFAST Financial
has also received various supervisory warnings, reprimands and received an offer of
composition in the past in relation to breaches of the relevant laws, regulations, guidelines
and/or notices. Please refer to the section entitled “Government Regulations and Licensing”
of this Prospectus for further details.
Disclosures relating to Mr. Low Huan Ping
Mr. Low was the director of iFAST Financial from 30 June 2005 to 6 March 2006, which has
been subject to periodic inspections by MAS in the past. iFAST Financial has also received
various supervisory warnings, reprimands and received an offer of composition in the past in
relation to breaches of the relevant laws, regulations, guidelines and/or notices. Please refer
to the section entitled “Government Regulations and Licensing” of this Prospectus for further
details.
Mr. Low is also the non-executive director of M1 Limited (“M1”), and was appointed to the
board of director of M1 on 1 September 1994. M1 had been fined in the past by the Infocomm
Development Authority (“IDA”) for certain breaches and non-compliance including (i)
breaches to the Code of Practice for Telecommunication Service Resiliency and the Code of
Practice for Telecommunication Outage Reporting due to mobile service disruptions, and (ii)
failure to comply with the IDA’s Quality of Service Standards for 3G Mobile Services.
Disclosures relating to Mr. Kelvin Yip Hok Yin
In his capacity as COO of iFAST HK, Mr. Kelvin Yip Hok Yin is concerned with the
management in relation to iFAST HK which is being investigated by the SFC pursuant to
182(1) of the SFO. Please refer to the section titled “Government Regulations and Licensing”
of this Prospectus for further details of the SFC Investigation.
Disclosures relating to Mr. Wong Sui Jau
As a part of the research team at Fundsupermart.com, Mr. Wong Sui Jau had received a
letter from MAS dated 26 February 2003, reprimanding him for acting as a representative of
Fundsupermart.com without holding a valid representative licence under the FAA. Please
refer to the section titled “Government Regulations and Licensing – Regulatory Inspections
and Investigations” of this Prospectus for further details.
2. MATERIAL CONTRACTS
The following contracts, not being contracts entered into in the ordinary course of business,
have been entered into by our Group within the two (2) years preceding the date of
lodgement of this Prospectus and are or may be material:
(a) Management Agreement and Underwriting Agreement dated 4 December 2014;
(b) Placement Agreement dated 4 December 2014;
(c) The Deed of Arrangement dated 17 November 2014 between our Company and
Pecuniam in which Pecuniam has granted a right of first refusal for so long as there are
common controlling shareholders in respect of its interest in iFAST India and also
undertaken not to expand its business and operations outside of India unless it has
approval from our Company’s Board and Audit Committee;
GENERAL AND STATUTORY INFORMATION
261
(d) Convertible Loan Letters dated 15 November 2013 and 13 January 2014 from our
Company to Providend granting a loan of S$70,000 and S$180,000 to Providend
respectively. Both loans were granted at an interest rate of five per cent (5%) per
annum, with no collateral and/or security required from Providend in consideration for
the loans. Pursuant to the terms stated in the letters, the loans will be converted as part
of our Company’s investment stake in Providend upon MAS’ approval of our Company’s
investment stake in Providend. The aggregate loan amount of S$250,000 was
capitalised into preferred shares in the capital of Providend as part of the consideration
for the acquisition of 30,384 newly issued preferred shares at S$13.17 per preferred
share pursuant to the Share Purchase Agreement dated 20 June 2014;
(e) Share Purchase Agreement dated 20 June 2014 between our Company and Providend
pursuant to which we:
(i) acquired 30,384 newly issued preferred shares at S$13.17 per preferred share for
a 19.9% shareholding interest in Providend which was completed on 25 July 2014.
The aggregate consideration of approximately S$400,157 was satisfied through
the capitalisation of the S$250,000 in aggregate amount of convertible loans
granted pursuant to the convertible loan letters dated 15 November 2013 and
13 January 2014, with the remainder in cash;
(ii) were provided with the option to purchase an additional 22,032 preferred shares
of Providend for a total purchase consideration of S$319,244. Our exercise of such
option to purchase preferred shares will increase our shareholding interest in
Providend to 30.0%. For further details on our acquisition, please refer to the
section entitled “Our Business – History and Development ” of this Prospectus for
further details;
(f) Transfer Notice dated 12 August 2013 from our Company to DAPH and iFAST India
setting out our Company’s desire to transfer the 67,154 shares held by us in iFAST India
at a price of S$25.31 per share (“iFAST India Sale Shares”), which is equivalent to a
premium of 5% on the net tangible asset value attributable to iFAST India’s shares
based on iFAST India’ unaudited consolidated management accounts as at 30 June
2013;
(g) Non-allocation Notice dated 11 September 2013 from iFAST India to DAPH and our
Company notifying our Company that DAPH had not applied for any of the iFAST India
Sale Shares within the prescribed period and that our Company is therefore entitled to
transfer all of the iFAST India Sale Shares;
(f) Tag-along Notice dated 11 September 2013 and Supplemental Tag-along Notice dated
24 September 2013 from our Company to DAPH in connection with the Tag-along Offer
and Supplemental Tag-along Offer made by Pecuniam to DAPH dated 11 September
2013 and 24 September 2013 respectively;
(g) Sale and Purchase Agreement dated 3 October 2013 between our Company and
Pecuniam pursuant to which we sold 67,154 ordinary shares in the capital of iFAST
India, representing all of the ordinary shares in iFAST India held by us for an aggregate
cash consideration of S$1,699,667.74;
(h) Convertible Loan Agreement dated 3 October 2013 between our Company and
Pecuniam pursuant to which we made a loan of S$3,322,668.94 to Pecuniam whereby
GENERAL AND STATUTORY INFORMATION
262
for as long as the loan remains outstanding, such loan can be converted into ordinary
shares of Pecuniam prior to 8 October 2013 or such other date as we and Pecuniam
may agree to in writing;
(i) Sale and Purchase Agreement dated 7 March 2014 between our Company and RHB
pursuant to which we acquired RHB’s 34.88% shareholding interest in iFAST-OSK Sdn
Bhd comprising 9,070,000 ordinary shares of RM1.00 each which was completed on 18
July 2014; and
(j) the Cornerstone Subscription Agreements in relation to the subscription of the
Cornerstone Shares by the Cornerstone Investors, as referred to in the section titled
“Shareholders – Cornerstone Investors” of this Prospectus.
3. LITIGATION AND ARBITRATION PROCEEDINGS
To the best of our knowledge and belief, having made all reasonable enquiries, neither the
Company nor any of our subsidiaries is engaged in any litigation or arbitration proceedings
including those which are pending or known to be contemplated which may have, or which
have had in the twelve (12) months preceding the date of lodgement of this Prospectus, a
material effect on the financial position or profitability of our Group.
4. MISCELLANEOUS
(a) 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. In the ordinary course
of business, the Receiving Bank will deploy these monies in the inter-bank money
market. All profits derived from the deployment of such monies will accrue to 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.
(b) 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 another corporation or units of another business trust,
which has occurred during the period between 1 January 2013 and the Latest
Practicable Date.
(c) Save as disclosed in this Prospectus, our Directors are not aware of any event which
has occurred since the end of the period covered by the most recent interim financial
statements included in this Prospectus to the Latest Practicable Date which may have
a material effect on the financial information of our Group provided in this Prospectus.
(d) Save as disclosed in this Prospectus in the sections entitled “Risk Factors”,
“Management’s Discussion and Analysis of Results of Operations and Financial
Position” and “Prospects, Business Strategies and Plans” of this Prospectus, the
financial conditions and operations of our Group are not likely to be affected by any of
the following:
(i) 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;
GENERAL AND STATUTORY INFORMATION
263
(ii) material commitments for capital expenditure;
(iii) unusual or infrequent events or transactions or any significant economic changes
that will material affect the amount of reported income from operations; and
(iv) known trends or uncertainties that have had or that we reasonably expect to have
a material favourable or unfavourable impact on revenue or operating income.
(e) We currently have no intention of changing our Group’s present auditors after the listing
of our Company on the SGX-ST.
Details including the names, addresses and professional qualifications (including
membership in a professional body) of the auditors of our Company for the last three (3)
financial years ended 31 December 2013 and up to the date of lodgement of this
Prospectus are as follows:
Name/Address Professional Body
Partner-in-charge/
Professional
Qualification
KPMG LLP/16
Raffles Quay #22-00
Hong Leong Building
Singapore 048581
Institute of Singapore
Chartered Accountants
Jeya Poh Wan S/O K.
Suppiah/Chartered
Accountant of Singapore
(f) Each of Stamford Law Corporation and Rajah & Tann Singapore LLP does not make, or
purport to make, any statement in this Prospectus or any statement upon which a
statement in this Prospectus 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 opinion in this Prospectus.
(g) The disclosures in this Prospectus which relate to SFC’s inspection and investigation of
iFAST HK are made pursuant to the requirements of the laws, legislations, regulations
and/or statutory requirements in Singapore. Any content in this Prospectus related to
the SFC or the aforementioned inspection and investigation have not been reviewed,
endorsed or approved by the SFC.
GENERAL AND STATUTORY INFORMATION
264
5. INTERESTS OF INDEPENDENT MARKET RESEARCH CONSULTANTS
None of the Independent Market Research Consultants named in this Prospectus:
(i) is employed on a contingent basis by our Company or our subsidiaries;
(ii) has a material interest, whether direct or indirect, in our Shares or in the shares of our
subsidiaries; or
(iii) has a material economic interest, whether direct or indirect, in our Company, including
an interest in the success of the Offering.
6. CONSENTS
(a) The Independent Auditors and Reporting Accountants have given and have not
withdrawn their written consent to the issue of this Prospectus with the inclusion herein
of the “Audited Consolidated Financial Statements for the Financial Years Ended
31 December 2011, 2012 and 2013”, “Unaudited Interim Consolidated Financial
Statements for the Nine Months Ended 30 September 2014” and “Unaudited Pro Forma
Consolidated Financial Information for the Financial Year Ended 31 December 2013
and Nine Months Ended 30 September 2014” as set out in Appendix A, Appendix B and
Appendix C of this Prospectus respectively in the form and context in which they are
included and references to their name in the form and context in which it appears in this
Prospectus and to act in such capacity in relation to this Prospectus.
(b) Each of DBS Bank and DMG has given and has not withdrawn its written consent to
being named in the Prospectus as Joint Issue Managers, Bookrunners and
Underwriters and to act in such capacity in relation to this Prospectus.
(c) Each of The Platforum and Investment Trends Pty Limited has given and has not
withdrawn its written consent to the issue of this Prospectus with the inclusion herein of
(i) its name and all references herein, (ii) the statements attributable to and issued by
it for purpose of inclusion in the section entitled “Industry Overview” of this Prospectus,
in the form and context in which they are included and appear in this Prospectus and
to act in such capacity in relation to this Prospectus.
(d) Cerulli Associates Asia Pte Ltd has given and has not withdrawn its written consent to
the issue of this Prospectus with the inclusion herein of (i) its name and all references
herein, (ii) the statements attributable to and issued by it for purpose of inclusion in the
section entitled “Industry Overview” of this Prospectus, and (iii) the statements
attributable to it in the sections entitled “Overview of Our Group – Our Competitive
Strengths”, “Management’s Discussion and Analysis of Results of Operations and
Financial Position”, “Our Business” and “Prospects, Business Strategies and Plans” of
this Prospectus, in the form and context in which they are included and appear in this
Prospectus and to act in such capacity in relation to this Prospectus.
(e) The Legal Advisers to the Offering and to the Company as to Singapore Law, the Legal
Advisers to the Joint Issue Managers, Bookrunners and Underwriters as to Singapore
Law, the Legal Advisers to the Company as to Malaysia Law, Hong Kong Law and PRC
Law the Share Registrar, the Principal Bankers and Receiving Bank do not make or
purport to make any statement in this Prospectus or any statement upon which a
statement in this Prospectus is based and each of them makes no representation
GENERAL AND STATUTORY INFORMATION
265
regarding any statement in this Prospectus and to the maximum extent permitted by
law, expressly disclaim and takes no responsibility for any liability to any person which
is based on, or arises out of, any statement, information or opinions in, or omission
from, this Prospectus.
7. RESPONSIBILITY STATEMENT BY OUR DIRECTORS
This Prospectus has been reviewed and approved by our Directors and they individually and
collectively accept full responsibility for the accuracy of the information given in this
Prospectus and confirm after having made all reasonable enquiries that, to the best of their
knowledge and belief, this Prospectus constitutes full and true disclosure of all material facts
about the Offering, our Company and its subsidiaries, and our Directors are not aware of any
facts the omission of which would make any statement in this Prospectus misleading.
Where information in this Prospectus has been extracted from published or otherwise
publicly available sources or obtained from a named source, the sole responsibility of the
Directors has been to ensure that such information has been accurately and correctly
extracted from those sources and/or reproduced in this Prospectus in its proper form and
context.
8. DOCUMENTS AVAILABLE FOR INSPECTION
The following documents may be inspected at our registered office at 10 Collyer Quay,
#26-01 Ocean Financial Centre, Singapore 049315 during normal business hours for a
period of six (6) months from the date of registration of this Prospectus:
(a) the Memorandum and Articles of Association of our Company;
(b) the “Audited Consolidated Financial Statements for the Financial Years Ended 31
December 2011, 2012 and 2013”, “Unaudited Interim Consolidated Financial
Statements for the Nine Months Ended 30 September 2014” and “Unaudited Pro Forma
Consolidated Financial Information for the Financial Year Ended 31 December 2013
and Nine Months Ended 30 September 2014” as set out in Appendix A, Appendix B and
Appendix C of this Prospectus respectively;
(c) the respective audited financial statements of our Company and our subsidiaries, where
applicable, for FY2011, FY2012 and FY2013;
(d) the material contracts referred to in paragraph 2 of this section;
(e) the information prepared by each of The Platforum, Investment Trends Pty Limited and
Cerulli Associates Asia Pte Ltd;
(f) the letters of consent referred to in paragraph 6 of this section; and
(g) the Service Agreement referred to in the section entitled “Directors, Management and
Staff – Service Agreement” of this Prospectus.
GENERAL AND STATUTORY INFORMATION
266
iFAST Corporation Ltd.
and its Subsidiaries
Registration Number: 200007899C
Consolidated Financial Statements
Financial years ended 31 December 2011, 2012 and 2013
APPENDIX A – AUDITED CONSOLIDATED FINANCIAL STATEMENTS FOR
THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012 AND 2013
A-1
Independent auditors’ report
The Board of Directors
iFAST Corporation Ltd. and its subsidiaries
Report on the financial statements
We have audited the accompanying financial statements of iFAST Corporation Ltd. (the Company)
and its subsidiaries (the Group), which comprise the consolidated statements of financial position
as at 31 December 2011, 2012 and 2013, the consolidated statements of profit or loss, statements
of comprehensive income, statements of changes in equity and statements of cash flows for the
years then ended 31 December 2011, 2012 and 2013, and a summary of significant accounting
policies and other explanatory information, as set out on pages A-4 to A-64.
Management’s responsibility for the financial statements
Management is responsible for the preparation and fair presentation of these consolidated
financial statements in accordance with Singapore Financial Reporting Standards, and for
devising and maintaining a system of internal accounting controls sufficient to provide a
reasonable assurance that assets are safeguarded against loss from unauthorised use or
disposition; and transactions are properly authorised and that they are recorded as necessary to
permit the preparation of true and fair profit and loss accounts and balance sheets and to maintain
accountability of assets.
Auditors’ responsibility
Our responsibility is to express an opinion on these consolidated 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 consolidated financial statements are free from
material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and
disclosures in the consolidated financial statements. The procedures selected depend on the
auditor’s judgement, including the assessment of the risks of material misstatement of the
consolidated financial statements, whether due to fraud or error. In making those risk
assessments, the auditor considers internal control relevant to the entity’s preparation and fair
presentation of consolidated financial statements 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 consolidated financial
statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a
basis for our audit opinion.
APPENDIX A – AUDITED CONSOLIDATED FINANCIAL STATEMENTS FOR
THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012 AND 2013
A-2
Opinion
In our opinion, the consolidated financial statements of the Group are properly drawn up in
accordance with Singapore Financial Reporting Standards to present fairly, in all material
respects, the state of affairs of the Group as at 31 December 2011, 2012 and 2013 and the results
of operations, changes in equity and cash flows of the Group for the years ended 31 December
2011, 2012 and 2013.
Restriction on distribution and use
This report is made solely to you as a body and for the inclusion in the prospectus to be issued
in relation to the proposed offering of the shares of the Company in connection with the
Company’s listing on the Singapore Exchange Securities Trading Limited.
KPMG LLP
Public Accountants and
Chartered Accountants
Singapore
4 December 2014
Jeya Poh Wan S/O K. Suppiah
Partner
APPENDIX A – AUDITED CONSOLIDATED FINANCIAL STATEMENTS FOR
THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012 AND 2013
A-3
Consolidated statements of financial position
As at 31 December 2011, 2012 and 2013
Note 2011 2012 2013
$ $ $
Assets
Plant and equipment 4 2,367,813 1,570,265 1,633,848
Intangible assets 5 402,392 296,023 663,838
Deferred tax assets 14 24,229 27,811 34,559
Other investments 9 1,754,357 3,455,810 2,011,502
Club membership 7 11,429 11,429 11,429
Total non-current assets 4,560,220 5,361,338 4,355,176
Current tax receivable – 16,784 5,489
Other investments 9 6,257,845 3,889,287 –
Trade and other receivables 8 15,315,940 14,652,693 16,763,911
Prepayments 603,343 732,774 613,549
Cash at bank and in hand 10 10,724,589 12,379,553 16,292,523
Money market funds 10 1,862,821 1,136,676 426,386
Total current assets 34,764,538 32,807,767 34,101,858
Held under trust
Client bank accounts 11 91,264,661 84,014,198 100,599,080
Client ledger balances 11 (91,264,661) (84,014,198) (100,599,080)
– – –
Total assets 39,324,758 38,169,105 38,457,034
Equity
Share capital 12 10,143,153 10,304,013 10,670,001
Reserves 12 11,142,325 13,108,398 13,295,747
Equity attributable to owners of the
Company 21,285,478 23,412,411 23,965,748
Non-controlling interests 4,396,723 2,842,884 658,049
Total equity 25,682,201 26,255,295 24,623,797
Liabilities
Unsecured bank loan 13 748,189 – –
Deferred tax liabilities 14 48,052 51,980 76,746
Other payables 15 – – 353,400
Total non-current liabilities 796,241 51,980 430,146
Unsecured bank loan 13 1,282,608 748,189 –
Trade and other payables 15 11,410,926 10,450,713 12,835,357
Current tax payable 152,782 662,928 567,734
Total current liabilities 12,846,316 11,861,830 13,403,091
Total liabilities 13,642,557 11,913,810 13,833,237
Total equity and liabilities 39,324,758 38,169,105 38,457,034
The accompanying notes form an integral part of these financial statements.
APPENDIX A – AUDITED CONSOLIDATED FINANCIAL STATEMENTS FOR
THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012 AND 2013
A-4
Consolidated statements of profit or loss
Financial years ended 31 December 2011, 2012 and 2013
Note 2011 2012 2013
$ $ $
Continuing operations
Revenue 16 61,122,834 56,413,970 69,470,123
Commission and fee paid or payable to third
party financial advisers (35,919,228) (30,123,194) (37,884,235)
25,203,606 26,290,776 31,585,888
Other operating income 17 57,874 84,922 163,971
Gain on distribution to owners of the Company 20 – – 617,650
Depreciation of plant and equipment (978,768) (786,603) (703,506)
Amortisation of intangible assets (335,020) (70,675) (168,621)
Staff costs (12,304,546) (11,918,447) (13,310,605)
Other operating expenses (9,190,915) (9,632,430) (9,398,966)
Results from operating activities 2,452,231 3,967,543 8,785,811
Finance income 59,380 45,858 39,528
Finance expense (137,198) (71,840) (10,376)
Net finance income/(expense) (77,818) (25,982) 29,152
Profit before tax 2,374,413 3,941,561 8,814,963
Tax expense 19 (252,352) (685,143) (572,751)
Profit from continuing operations 2,122,061 3,256,418 8,242,212
Discontinued operation
Loss from discontinued operation, net of tax 20 (1,945,319) (1,631,317) (3,151,835)
Profit for the year 18 176,742 1,625,101 5,090,377
Profit attributable to:
Owners of the Company from continuing
operations 2,771,516 3,741,551 8,474,397
Owners of the Company from discontinued
operation (767,881) (661,130) (2,713,106)
Non-controlling interests from continuing
operations (649,455) (485,133) (232,185)
Non-controlling interests from discontinued
operation (1,177,438) (970,187) (438,729)
Profit for the year 176,742 1,625,101 5,090,377
Earnings per share from continuing
operations
Basic earnings per share (cents) 22 1.4 1.9 4.2
Diluted earnings per share (cents) 22 1.4 1.9 4.1
Earnings per share
Basic earnings per share (cents) 22 1.0 1.5 2.9
Diluted earnings per share (cents) 22 1.0 1.5 2.8
The accompanying notes form an integral part of these financial statements.
APPENDIX A – AUDITED CONSOLIDATED FINANCIAL STATEMENTS FOR
THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012 AND 2013
A-5
Consolidated statements of comprehensive income
Financial years ended 31 December 2011, 2012 and 2013
Note 2011 2012 2013
$ $ $
Profit for the year 176,742 1,625,101 5,090,377
Other comprehensive income
Items that are or may be reclassified
subsequently to profit or loss:
Net change in fair value of available-for-sale
financial assets 736,899 592,628 235,403
Net change in fair value of available-for-sale
financial assets reclassified to profit or loss 18 (657,075) (397,776) (732,457)
Fair value of available-for-sale financial
assets on disposal of discontinued operation
reclassified to profit or loss 20 – – (250,430)
Foreign currency translation differences for
foreign operations (1,316,112) (726,420) (327,573)
Foreign currency translation differences on
disposal of discontinued operation
reclassified to profit or loss 20 – – 2,849,138
Other comprehensive income for the year,
net of tax (1,236,288) (531,568) 1,774,081
Total comprehensive income for the year (1,059,546) 1,093,533 6,864,458
Attributable to:
Owners of the Company 1,390,915 2,767,446 7,946,593
Non-controlling interests (2,450,461) (1,673,913) (1,082,135)
Total comprehensive income for the year (1,059,546) 1,093,533 6,864,458
Attributable to:
Owners of the Company
Total comprehensive income from continuing
operations, net of tax 2,780,518 3,634,391 8,470,967
Total comprehensive income from
discontinued operation, net of tax (1,389,603) (866,945) (524,374)
Total comprehensive income for the year
attributable to owners of the Company 1,390,915 2,767,446 7,946,593
The accompanying notes form an integral part of these financial statements.
APPENDIX A – AUDITED CONSOLIDATED FINANCIAL STATEMENTS FOR
THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012 AND 2013
A-6
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A-12
Consolidated statements of cash flows
Financial years ended 31 December 2011, 2012 and 2013
Note 2011 2012 2013
$ $ $
Cash flows from operating activities
Profit for the year 176,742 1,625,101 5,090,377
Adjustments for:
Depreciation of plant and equipment 4 1,103,801 856,300 743,682
Plant and equipment written off 30,003 – –
(Gain)/loss on disposal of plant and equipment (150) – 112
Amortisation of intangible assets 5 515,222 204,110 259,208
Impairment (reversal)/loss on trade receivables,
net (17,719) 2,615 7,857
Bad debt written off – – 2,073
Equity settled share-based payment
transactions 47,890 (3,574) 62,301
Dividend income on available-for-sale quoted
debt securities, net – – (20,432)
Gain on redemption of quoted debt securities (657,075) (397,776) (732,457)
Unrealised exchange loss, net 193,784 110,320 12,245
Gain on realisation of intangible assets 20 – – (81,895)
Gain on distribution to owners of the Company 20 – – (617,650)
Translation reserve realised, loss 20 – – 2,849,138
Fair value reserve realised, gain 20 – – (250,430)
Finance income (59,380) (45,858) (39,528)
Finance expense 137,198 71,840 10,376
Tax expense 252,352 685,143 572,751
1,722,668 3,108,221 7,867,728
Change in trade and other receivables 751,213 205,921 (2,521,309)
Change in trade and other payables (801,888) (763,674) 2,383,865
Cash generated from operations 1,671,993 2,550,468 7,730,284
Taxes paid (194,427) (191,231) (633,834)
Interest received 59,380 45,858 39,528
Interest paid (137,198) (71,840) (10,376)
Net cash from operating activities 1,399,748 2,333,255 7,125,602
Cash flows from investing activities
Purchase of plant and equipment (1,689,610) (91,849) (844,693)
Purchase of intangible assets (24,236) (122,036) (131,699)
Proceeds from disposal of plant and equipment 1,129 1,994 460
Proceeds from redemption of quoted equity
securities – 55,452 –
Proceeds from redemption of quoted debt
securities 12,366,158 4,525,164 5,125,468
Purchase of available-for-sale quoted debt
securities (6,756,683) (3,744,874) (2,065,906)
Disposal of discontinued operation, net of cash
disposed off 20 – – (2,257,709)
Net cash from/(used in) investing activities 3,896,758 623,851 (174,079)
The accompanying notes form an integral part of these financial statements.
APPENDIX A – AUDITED CONSOLIDATED FINANCIAL STATEMENTS FOR
THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012 AND 2013
A-13
Consolidated statements of cash flows
Financial years ended 31 December 2011, 2012 and 2013 (cont’d)
Note 2011 2012 2013
$ $ $
Cash flows from financing activities
Dividends paid to owners of the Company (622,315) (677,725) (3,358,575)
Proceeds from exercise of share options 63,504 160,860 365,988
Proceeds from issue of shares to non-
controlling interests 815,000 280,560 –
Payment on acquisition of additional interests in
subsidiaries (807,600) (280,560) –
Payment on capital reduction to non-controlling
interests (1,900,000) – –
Repayment of unsecured bank loan (1,282,609) (1,282,608) (748,189)
Net cash used in financing activities (3,734,020) (1,799,473) (3,740,776)
Net increase in cash and cash equivalents 1,562,486 1,157,633 3,210,747
Cash and cash equivalents at 1 January 11,063,036 12,587,410 13,516,229
Effect of exchange rate fluctuations on cash
held (38,112) (228,814) (8,067)
Cash and cash equivalents at 31 December 10 12,587,410 13,516,229 16,718,909
The accompanying notes form an integral part of these financial statements.
APPENDIX A – AUDITED CONSOLIDATED FINANCIAL STATEMENTS FOR
THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012 AND 2013
A-14
Notes to the financial statements
These notes form an integral part of the financial statements.
The financial statements were authorised for issue by the Board of Directors on 4 December 2014.
1 Domicile and activities
iFAST Corporation Ltd. (the Company) is incorporated in the Republic of Singapore and has
its registered office at 10 Collyer Quay, #26-01 Ocean Financial Centre Building, Singapore
049315. The Company changed its name to iFAST Corporation Ltd. upon its conversion to
a public company on 18 November 2014.
The principal activities of the Group are those relating to investment holding, development
of software, marketing of unit trusts and Singapore government securities through websites
and acting as an investment advisor, dealer and custodian in respect to unit trusts and
Singapore government securities.
The consolidated financial statements of the Group as at and for the years ended 31
December 2011, 2012 and 2013 relate to the Company and its subsidiaries (together
referred to as the Group).
2 Basis of preparation
2.1 Statement of compliance
The financial statements have been prepared in accordance with Singapore Financial
Reporting Standards (FRS).
2.2 Basis of measurement
The financial statements have been prepared on the historical cost basis except as
otherwise described in the notes below.
2.3 Functional and presentation currency
These financial statements are presented in Singapore dollars which is the Company’s
functional currency.
2.4 Use of estimates and judgements
The preparation of the financial statements in conformity with FRSs requires management
to make judgements, estimates and assumptions that affect the application of accounting
policies and the reported amounts of assets, liabilities, income and expenses. Actual results
may differ from these estimates.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to
accounting estimates are recognised in the period in which the estimates are revised and
in any future periods affected.
APPENDIX A – AUDITED CONSOLIDATED FINANCIAL STATEMENTS FOR
THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012 AND 2013
A-15
In particular, information about assumptions and estimation uncertainties that have the
significant effect on the amount recognised in the financial statements is included in note
21 – share options.
Measurement of fair values
A number of the Group’s accounting policies and disclosures require the measurement of
fair values, for both financial and non-financial assets and liabilities.
The Group has an established control framework with respect to the measurement of fair
values. When measuring the fair value of an asset or a liability, the Group uses market
observable data as far as possible. Fair values are categorised into different levels in a fair
value hierarchy based on the inputs used in the valuation techniques as follows:
• Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities.
• Level 2: inputs other than quoted prices included in Level 1 that are observable for the
asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).
• Level 3: inputs for the asset or liability that are not based on observable market data
(unobservable inputs).
If the inputs used to measure the fair value of an asset or a liability might be categorised
in different levels of the fair value hierarchy, then the fair value measurement is categorised
in its entirety in the same level of the fair value hierarchy as the lowest level input that is
significant to the entire measurement (with Level 3 being the lowest).
The Group recognises transfers between levels of the fair value hierarchy as of the end of
the reporting period during which the change has occurred.
Further information about the assumptions made in measuring fair values is included in
note 24 – financial risk management.
3 Significant accounting policies
The accounting policies set out below have been applied consistently to all periods
presented in these financial statements, and have been applied consistently by Group
entities.
The statements of profit or loss and statements of comprehensive income for the years
ended 31 December 2011 and 2012 have been re-presented as if an operation discontinued
in October 2013 had been discontinued from the start of the respective years (see Note 20).
APPENDIX A – AUDITED CONSOLIDATED FINANCIAL STATEMENTS FOR
THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012 AND 2013
A-16
3.1 Basis of consolidation
(i) Business combinations
Business combinations are accounted for using the acquisition method in accordance with
FRS 103 Business Combination as at the acquisition date, which is the date on which
control is transferred to the Group. Control is the power to govern the financial and
operating policies of an entity so as to obtain benefits from its activities. In assessing
control, the Group takes into consideration potential voting rights that are currently
exercisable.
The Group measures goodwill at the acquisition date as:
• the fair value of the consideration transferred; plus
• the recognised amount of any non-controlling interests in the acquiree; plus
• if the business combination is achieved in stages, the fair value of the pre-existing
equity interest in the acquiree,
over the net recognised amount (generally fair value) of the identifiable assets acquired and
liabilities assumed. Any goodwill that arises is tested annually for impairment.
When the excess is negative, a bargain purchase gain is recognised immediately in profit
or loss.
The consideration transferred does not include amounts related to the settlement of
pre-existing relationships. Such amounts are generally recognised in profit or loss.
Any contingent consideration payable is recognised at fair value at the acquisition date and
included in the consideration transferred. If the contingent consideration is classified as
equity, it is not remeasured and settlement is accounted for within equity. Otherwise,
subsequent changes to the fair value of the contingent consideration are recognised in
profit or loss.
When share-based payment awards (replacement awards) are exchanged for awards held
by the acquiree’s employees (acquiree’s awards) and relate to past services, then all or a
portion of the amount of the acquirer’s replacement awards is included in measuring the
consideration transferred in the business combination. This determination is based on the
market-based value of the replacement awards compared with the market-based value of
the acquiree’s awards and the extent to which the replacement awards relate to past and/or
future service.
Non-controlling interests that are present ownership interests and entitle their holders to a
proportionate share of the acquiree’s net assets in the event of liquidation are measured
either at fair value or at the non-controlling interests’ proportionate share of the recognised
amounts of the acquiree’s identifiable net assets, at the acquisition date. The measurement
basis taken is elected on a transaction-by-transaction basis. All other non-controlling
interests are measured at acquisition-date fair value, unless another measurement basis is
required by FRSs.
APPENDIX A – AUDITED CONSOLIDATED FINANCIAL STATEMENTS FOR
THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012 AND 2013
A-17
Costs related to the acquisition, other than those associated with the issue of debt or equity
securities, that the Group incurs in connection with a business combination are expensed
as incurred.
Changes in the Group’s interest in a subsidiary that do not result in a loss of control are
accounted for as transactions with owners in their capacity as owners and therefore no
adjustments are made to goodwill and no gain or loss is recognised in profit or loss.
Adjustments to non-controlling interests arising from transactions that do not involve the
loss of control are based on a proportionate amount of the net assets of the subsidiary.
(ii) Subsidiaries
Subsidiaries are entities controlled by the Group. The financial statements of subsidiaries
are included in the consolidated financial statements from the date that control commences
until the date that control ceases.
The accounting policies of subsidiaries have been changed when necessary to align them
with the policies adopted by the Group. Losses applicable to the non-controlling interests
in a subsidiary are allocated to the non-controlling interests even if doing so causes the
non-controlling interests to have a deficit balance.
(iii) Loss of control
Upon the loss of control, the Group derecognises the assets and liabilities of the subsidiary,
any non-controlling interests and the other components of equity related to the subsidiary.
Any surplus or deficit arising on the loss of control is recognised in profit or loss. If the
Group retains any interest in the previous subsidiary, then such interest is measured at fair
value at the date that control is lost. Subsequently, it is accounted for as an equity-
accounted investee or as an available-for-sale financial asset depending on the level of
influence retained.
(iv) Acquisition of non-controlling interests
Acquisition of non-controlling interests are accounted for as transactions with owners in
their capacity as owners and therefore the carrying amounts of assets and liabilities are not
changed and goodwill is not recognised as a result of such transactions. The adjustments
to non-controlling interests are based on a proportionate amount of the net assets of the
subsidiary. Any difference between the adjustment to non-controlling interests and the fair
value of consideration paid is recognised directly in equity and presented as part of equity
attributable to owners of the Company.
(v) Transactions eliminated on consolidation
Intra-group balances and transactions, and any unrealised income or expenses arising from
intra-group transactions, are eliminated in preparing the consolidated financial statements.
APPENDIX A – AUDITED CONSOLIDATED FINANCIAL STATEMENTS FOR
THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012 AND 2013
A-18
3.2 Foreign currency
(i) Foreign currency transactions
Transactions in foreign currencies are translated to the respective functional currencies of
the Group entities at exchange rates at the dates of the transactions. Monetary assets and
liabilities denominated in foreign currencies at the end of the reporting period are
retranslated to the functional currency at the exchange rate at that date. The foreign
currency gain or loss on monetary items is the difference between amortised cost in the
functional currency at the beginning of the year, adjusted for effective interest and
payments during the year, and the amortised cost in foreign currency translated at the
exchange rate at the end of the year.
Non-monetary assets and liabilities denominated in foreign currencies that are measured at
fair value are retranslated to the functional currency at the exchange rate at the date that
the fair value was determined. Non-monetary items in a foreign currency that are measured
in terms of historical cost are translated using the exchange rate at the date of the
transaction. Foreign currency differences arising on retranslation are recognised in profit or
loss, except for differences arising on the retranslation of available-for-sale equity
instruments (except on impairment in which case foreign currency differences that have
been recognised in other comprehensive income are reclassified to profit or loss), which are
recognised in other comprehensive income.
(ii) Foreign operations
The assets and liabilities of foreign operations, excluding goodwill and fair value
adjustments arising on acquisition, are translated to Singapore dollars at exchange rates at
the end of the reporting period. The income and expenses of foreign operations are
translated to Singapore dollars at exchange rates at the dates of the transactions. Goodwill
and fair value adjustments arising on the acquisition of a foreign operation on or after 1
January 2005 are treated as assets and liabilities of the foreign operation and translated at
the exchange rates at the end of the reporting period. For acquisitions prior to 1 January
2005, the exchange rates at the date of acquisition were used.
Foreign currency differences are recognised in other comprehensive income, and
presented in the foreign currency translation reserve (translation reserve) in equity.
However, if the operation is a non-wholly-owned subsidiary, then the relevant proportionate
share of the translation difference is allocated to the non-controlling interests. When a
foreign operation is disposed of such that control is lost, the cumulative amount in the
translation reserve related to that foreign operation is reclassified to profit or loss as part of
the gain or loss on disposal. When the Group disposes of only part of its interest in a
subsidiary that includes a foreign operation while retaining control, the relevant proportion
of the cumulative amount is reattributed to non-controlling interests.
When the settlement of a monetary item receivable from or payable to a foreign operation
is neither planned nor likely to occur in the foreseeable future, foreign exchange gains and
losses arising from such a monetary item are considered to form part of a net investment
in a foreign operation. These are recognised in other comprehensive income, and are
presented in the translation reserve in equity.
APPENDIX A – AUDITED CONSOLIDATED FINANCIAL STATEMENTS FOR
THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012 AND 2013
A-19
3.3 Plant and equipment
(i) Recognition and measurement
Items of plant and equipment are measured at cost less accumulated depreciation and
accumulated impairment losses.
Cost includes expenditure that is directly attributable to the acquisition of the asset. The
cost of self-constructed assets includes the cost of materials and direct labour, any other
costs directly attributable to bringing the asset to a working condition for its intended use,
and the cost of dismantling and removing the items and restoring the site on which they are
located and capitalised borrowing costs. Cost also may include transfers from other
comprehensive income of any gain or loss on qualifying cash flow hedges of foreign
currency purchases of plant and equipment. Purchased software that is integral to the
functionality of the related equipment is capitalised as part of that equipment.
When parts of an item of plant and equipment have different useful lives, they are
accounted for as separate items (major components) of plant and equipment.
The gain or loss on disposal of an item of plant and equipment (calculated as the difference
between the net proceeds from disposal and the carrying amount of the item) is recognised
net within other income/other expense in profit or loss.
(ii) Subsequent costs
The cost of replacing a component of an item of plant and equipment is recognised in the
carrying amount of the item if it is probable that the future economic benefits embodied
within the component will flow to the Group and its cost can be measured reliably. The
carrying amount of the replaced component is derecognised. The costs of the day-to-day
servicing of plant and equipment are recognised in profit or loss as incurred.
(iii) Depreciation
Depreciation is based on the cost of an asset, less its residual value. Significant
components of individual assets are assessed and if a component has a useful life that is
different from the remainder of that asset, that component is depreciated separately.
Depreciation is recognised as an expense in profit or loss on a straight-line basis over the
estimated useful lives of each component of an item of plant and equipment. Leased assets
are depreciated over the shorter of the lease term and their useful lives unless it is
reasonably certain that the Group will obtain ownership by the end of the lease term.
The estimated useful lives for the current and comparative periods are as follows:
Computer equipment 3 years
Office equipment 5 years
Furniture and fittings 5 years
Office renovation 5 years or based on lease term
Depreciation methods, useful lives and residual values are reviewed at the end of each
reporting period and adjusted if appropriate.
APPENDIX A – AUDITED CONSOLIDATED FINANCIAL STATEMENTS FOR
THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012 AND 2013
A-20
3.4 Intangible assets
Development costs
Development activities involve a plan or design for the production of new or substantially
improved products and processes. Development expenditure is capitalised only if
development costs can be measured reliably, the product or process is technically and
commercially feasible, future economic benefits are probable, and the Group intends to and
has sufficient resources to complete development and to use or sell the asset. The
expenditure capitalised includes the cost of materials, direct labour and costs that are
directly attributable to creating, producing and preparing the assets for its intended use.
Other development expenditure is recognised in profit or loss as incurred.
Capitalised development expenditure is measured at cost less accumulated amortisation
and impairment losses. Amortisation is recognised in profit or loss on a straight-line basis
over the estimated useful lives of 3 years. Development costs are amortised from the date
the development has been completed.
Computer software
Computer software that are acquired by the Group and not integral to the functionality of the
equipment, which have finite useful lives, are measured at cost less accumulated
amortisation and impairment losses. Computer software are amortised in profit or loss on
a straight-line basis over their estimated useful lives of 3 years, from the date on which they
are available for use.
Intellectual properties
Intellectual properties that are acquired by the Group, which have finite useful lives, are
measured at cost less accumulated amortisation and impairment losses. Intellectual
properties are amortised in profit or loss on a straight-line basis over their estimated useful
lives of 5 years, from the date on which they are available for use.
Customer lists
Customer lists that are acquired by the Group and have finite useful lives are measured at
cost less accumulated amortisation and accumulated impairment losses. Customer lists are
amortised in profit or loss on a straight-line basis over their estimated useful lives of 5
years, from the date the acquisition has been completed.
The above amortisation methods, useful lives and residual values are reviewed at the end
of each reporting period and adjusted if appropriate.
3.5 Club membership
Club membership is stated at cost less impairment losses.
APPENDIX A – AUDITED CONSOLIDATED FINANCIAL STATEMENTS FOR
THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012 AND 2013
A-21
3.6 Financial instruments
(i) Non-derivative financial assets
The Group initially recognises loans and receivables and deposits on the date that they are
originated. All other financial assets are recognised initially on the trade date, which is the
date that the Group becomes a party to the contractual provisions of the instrument.
The Group derecognises a financial asset when the contractual rights to the cash flows from
the asset expire, or it transfers the rights to receive the contractual cash flows on the
financial asset in a transaction in which substantially all the risks and rewards of ownership
of the financial asset are transferred. Any interest in transferred financial assets that is
created or retained by the Group is recognised as a separate asset or liability.
Financial assets and liabilities are offset and the net amount presented in the statement of
financial position when, and only when, the Group has a legal right to offset the amounts
and intends either to settle on a net basis or to realise the asset and settle the liability
simultaneously.
The Group classifies non-derivative financial assets into the following category: loans and
receivables and available-for-sale financial assets.
Loans and receivables
Loans and receivables are financial assets with fixed or determinable payments that are not
quoted in an active market. Such assets are recognised initially at fair value plus any
directly attributable transaction costs. Subsequent to initial recognition, loans and
receivables are measured at amortised cost using the effective interest method, less any
impairment losses.
Loans and receivables comprise cash and cash equivalents and trade and other
receivables.
Cash and cash equivalents
Cash and cash equivalents comprise cash balances, bank deposits and money market
funds.
Available-for-sale financial assets
Available-for-sale financial assets are non-derivative financial assets that are designated
as available for sale or are not classified in any of the above categories of financial assets.
Available-for-sale financial assets are recognised initially at fair value plus any directly
attributable transaction costs. Subsequent to initial recognition, they are measured at fair
value and changes therein, other than impairment losses and foreign currency differences
on available-for-sale debt financial instruments, are recognised in other comprehensive
income and presented in the fair value reserve in equity. When an investment is
derecognised, the gain or loss accumulated in equity is reclassified to profit or loss.
Available-for-sale financial assets comprise quoted equity securities and debt securities.
APPENDIX A – AUDITED CONSOLIDATED FINANCIAL STATEMENTS FOR
THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012 AND 2013
A-22
(ii) Non-derivative financial liabilities
All financial liabilities are recognised initially on the trade date, which is the date that the
Group becomes a party to the contractual provisions of the instrument.
The Group derecognises a financial liability when its contractual obligations are discharged,
cancelled or expire.
Financial assets and liabilities are offset and the net amount presented in the statement of
financial position when, and only when, the Group has a legal right to offset the amounts
and intends either to settle on a net basis or to realise the asset and settle the liability
simultaneously.
The Group classifies non-derivative financial liabilities into the other financial liabilities
category. Such financial liabilities are recognised initially at fair value plus any directly
attributable transaction costs. Subsequent to initial recognition, these financial liabilities are
measured at amortised cost using the effective interest method.
Other financial liabilities comprise unsecured bank loan and trade and other payables.
(iii) Share capital
Ordinary shares
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue
of ordinary shares are recognised as a deduction from equity, net of any tax effects.
Distribution of non-cash assets to owners of the Company
The Group measures a liability to distribute non-cash assets as a dividend to the owners of
the Company at the fair value of the assets to be distributed. The carrying amount of the
dividend is remeasured at each reporting date and at the settlement date, with any changes
recognised directly in equity as adjustments to the amount of the distribution. On settlement
of the transaction, the Group recognises the difference, if any, between the carrying amount
of the assets distributed and the carrying amount of the liability in profit or loss.
(iv) Intra-group financial guarantees in the separate financial statements
Financial guarantees are financial instruments issued by the Company that requires the
issuer to make specified payments to reimburse the holder for the loss it incurs because a
specified debtor fails to meet payment when due in accordance with the original or modified
terms of a debt instrument.
Financial guarantees are recognised initially at fair value and are classified as financial
liabilities. Subsequent to initial measurement, the financial guarantees are stated at the
higher of the initial fair value less cumulative amortisation and the amount that would be
recognised if they were accounted for as contingent liabilities. When financial guarantees
are terminated before their original expiry date, the carrying amount of the financial
guarantees is transferred to profit or loss.
APPENDIX A – AUDITED CONSOLIDATED FINANCIAL STATEMENTS FOR
THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012 AND 2013
A-23
3.7 Impairment
(i) Non-derivative financial assets
A financial asset not carried at fair value through profit or loss is assessed at the end of
each reporting period to determine whether there is objective evidence that it is impaired.
A financial asset is impaired if objective evidence indicates that a loss event has occurred
after the initial recognition of the asset, and that the loss event has a negative effect on the
estimated future cash flows of that asset that can be estimated reliably.
Objective evidence that financial assets (including equity securities) are impaired can
include default or delinquency by a debtor, restructuring of an amount due to the Group on
terms that the Group would not consider otherwise, indications that a debtor or issuer will
enter bankruptcy, adverse changes in the payment status of borrowers or issuers in the
Group, economic conditions that correlate with defaults or the disappearance of an active
market for a security. In addition, for an investment in an equity security, a significant or
prolonged decline in its fair value below its cost is objective evidence of impairment.
Loans and receivables
The Group considers evidence of impairment for loans and receivables at both a specific
asset and collective level. All individually significant loans and receivables are assessed for
specific impairment. All individually significant receivables found not to be specifically
impaired are then collectively assessed for any impairment that has been incurred but not
yet identified. Loans and receivables that are not individually significant are collectively
assessed for impairment by grouping together loans and receivables with similar risk
characteristics.
In assessing collective impairment, the Group uses historical trends of the probability of
default, the timing of recoveries and the amount of loss incurred, adjusted for
management’s judgement as to whether current economic and credit conditions are such
that the actual losses are likely to be greater or less than suggested by historical trends.
An impairment loss in respect of a financial asset measured at amortised cost is calculated
as the difference between its carrying amount and the present value of the estimated future
cash flows discounted at the asset’s original effective interest rate. Losses are recognised
in profit or loss and reflected in an allowance account against loans and receivables.
Interest on the impaired asset continues to be recognised. When a subsequent event (e.g.
repayment by a debtor) causes the amount of impairment loss to decrease, the decrease
in impairment loss is reversed through profit or loss.
Available-for-sale financial assets
Impairment losses on available-for-sale financial assets are recognised by reclassifying the
losses accumulated in the fair value reserve in equity to profit or loss. The cumulative loss
that is reclassified from equity to profit or loss is the difference between the acquisition cost,
net of any principal repayment and amortisation, and the current fair value, less any
impairment loss recognised previously in profit or loss. Changes in cumulative impairment
provisions attributable to application of the effective interest method are reflected as a
component of interest income.
APPENDIX A – AUDITED CONSOLIDATED FINANCIAL STATEMENTS FOR
THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012 AND 2013
A-24
If, in a subsequent period, the fair value of an impaired available-for-sale debt security
increases and the increase can be related objectively to an event occurring after the
impairment loss was recognised, then the impairment loss is reversed. The amount of the
reversal recognised in profit or loss. However, any subsequent recovery in the fair value of
an impaired available-for-sale equity security is recognised in other comprehensive income.
(ii) Non-financial assets
The carrying amounts of the Group’s non-financial assets are reviewed at each reporting
date to determine whether there is any indication of impairment. If any such indication
exists, then the asset’s recoverable amount is estimated. For intangible assets that have
indefinite useful lives or that are not yet available for use, the recoverable amount is
estimated each year at the same time. An impairment loss is recognised if the carrying
amount of an asset or its related cash-generating unit (CGU) exceeds its estimated
recoverable amount.
The recoverable amount of an asset or CGU is the greater of its value in use and its fair
value less costs to sell. 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 or CGU. For the
purpose of impairment testing, assets that cannot be tested individually are grouped
together into the smallest group of assets that generates cash inflows from continuing use
that are largely independent of the cash inflows of other assets or CGU.
Impairment losses are recognised in profit or loss. Impairment losses recognised in respect
of CGUs are allocated first to reduce the carrying amount of any goodwill allocated to the
CGU (group of CGUs), and then to reduce the carrying amounts of the other assets in the
CGU (group of CGUs) on a pro rata basis.
Impairment losses recognised in prior periods are assessed at each reporting date for any
indications that the loss has decreased or no longer exists. An impairment loss is reversed
if there has been a change in the estimates used to determine the recoverable amount. 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.
3.8 Leases
Where the Group has the use of assets under operating leases, payments made under the
leases are recognised in profit or loss on a straight-line basis over the term of the lease.
Lease incentives received are recognised in profit or loss as an integral part of the total
lease expense, over the term of the lease.
Contingent lease payments are accounted for by revising the minimum lease payments
over the remaining term of the lease when the lease adjustment is confirmed.
APPENDIX A – AUDITED CONSOLIDATED FINANCIAL STATEMENTS FOR
THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012 AND 2013
A-25
3.9 Employee benefits
Defined contribution plans
A defined contribution plan is a post-employment benefit plan under which an entity pays
fixed contributions into a separate entity and will have no legal or constructive obligation to
pay further amounts. Obligations for contributions to defined contribution pension plans are
recognised as an employee benefit expense in profit or loss in the periods during which
services are rendered by employees.
Short-term employee benefits
Short-term employee benefit obligations are measured on an undiscounted basis and are
expensed as the related service is provided. These include salaries, annual bonuses and
paid annual leave.
A liability is recognised for the amount expected to be paid under short-term cash bonus or
profit-sharing plans if the Group has a present legal or constructive obligation to pay this
amount as a result of past service provided by the employee, and the obligation can be
estimated reliably.
Employee leave entitlements
Employee entitlements to annual leave are recognised when they accrue to employees. A
provision is made for the estimated liability for annual leave as a result of service rendered
by employees up to the reporting date.
Share-based payment transactions
The share option programme allows directors and executives to acquire shares of the
Company. The fair value of options granted is recognised as an employee expense, with a
corresponding increase in equity. The fair value is measured at grant date and spread over
the vesting period during which the employees become unconditionally entitled to the
options. At each reporting date, the Company revises its estimates of the number of options
that are expected to become exercisable. It recognises the impact of the revision of original
estimates in employee expense and in a corresponding adjustment to equity over the
remaining vesting period. The proceeds received net of any directly attributable
transactions costs are credited to share capital when the options are exercised.
3.10 Provisions
A provision is recognised if, as a result of a past event, the Group has a present legal or
constructive obligation that can be estimated reliably, and it is probable that an outflow of
economic benefits will be required to settle the obligation. Provisions are determined by
discounting the expected future cash flows at a pre-tax rate that reflects current market
assessments of the time value of money and the risks specific to the liability. The unwinding
of the discount is recognised as finance cost.
APPENDIX A – AUDITED CONSOLIDATED FINANCIAL STATEMENTS FOR
THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012 AND 2013
A-26
3.11 Revenue recognition
Revenue represents advertising fees, commission and fee income, service fees, income
from sale of magazines and software licences fees.
Advertising revenue, which is earned in the form of upfront and variable payments, is
deferred and recognised over the period to which the contract relates.
Commission and fee income and service fees are recognised on the completion of services
rendered.
Magazine sales and software licence revenue are recognised when the significant risks and
rewards of ownership have been transferred to the buyer.
3.12 Government grants
Government grants are recognised initially as deferred income at fair value when there is
reasonable assurance that they will be received and the Group will comply with the
conditions associated with the grant. Grants that compensate the Group for expenses
incurred are recognised in profit or loss as revenue on a systematic basis in the same
periods in which the expenses are recognised.
SME Cash Grant
Cash grants received from the government in relation to the SME Cash Grant are
recognised as income upon receipt.
3.13 Finance income and finance costs
Finance income comprises interest income from money market funds, bank deposits and
client’s bank account. Interest income is recognised as it accrues in profit or loss, using the
effective interest method. Finance costs comprise interest expense on borrowings which is
recognised in profit and loss using the effective interest method.
3.14 Tax
Tax expense comprises current and deferred tax. Current tax and deferred tax are
recognised in profit or loss except to the extent that it relates to a business combination, or
items recognised directly in equity or in other comprehensive income.
Current tax is the expected tax payable or receivable on the taxable income or loss for the
year, using tax rates enacted or substantively enacted at the reporting date, and any
adjustment to tax payable in respect of previous years.
APPENDIX A – AUDITED CONSOLIDATED FINANCIAL STATEMENTS FOR
THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012 AND 2013
A-27
Deferred tax is recognised in respect of temporary differences between the carrying
amounts of assets and liabilities for financial reporting purposes and the amounts used for
taxation purposes. Deferred tax is not recognised for:
• temporary differences on the initial recognition of assets or liabilities in a transaction
that is not a business combination and that affects neither accounting nor taxable
profit or loss; and
• temporary differences related to investments in subsidiaries to the extent that it is
probable that they will not reverse in the foreseeable future.
The measurement of deferred taxes reflects the tax consequences that would follow the
manner in which the Group expects, at the end of the reporting period, to recover or settle
the carrying amount of its assets and liabilities. Deferred tax is measured at the tax rates
that are expected to be applied to temporary differences when they reverse, based on the
laws that have been enacted or substantively enacted by the reporting date.
Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset
current tax liabilities and assets, and they relate to income taxes levied by the same tax
authority on the same taxable entity, or on different tax entities, but they intend to settle
current tax liabilities and assets on a net basis or their tax assets and liabilities will be
realised simultaneously.
A deferred tax asset is recognised for unused tax losses, tax credits and deductible
temporary differences, to the extent that it is probable that future taxable profits will be
available against which they can be utilised. Deferred tax assets are reviewed at each
reporting date and are reduced to the extent that it is no longer probable that the related tax
benefit will be realised.
In determining the amount of current and deferred tax, the Group takes into account the
impact of uncertain tax positions and whether additional taxes and interest may be due. The
Group believes that its accruals for tax liabilities are adequate for all open tax years based
on its assessment of many factors including interpretations of tax law and prior experience.
This assessment relies on estimates and assumptions and may involve a series of
judgements about future events. New information may become available that causes the
Group to change its judgement regarding the adequacy of existing tax liabilities, such
changes to tax liabilities will impact tax expense in the period that such a determination is
made.
3.15 Discontinued operation
A discontinued operation is a component of the Group’s business, the operations and cash
flows of which can be clearly distinguished from the rest of the Group and which:
• represents a separate major line of business or geographical area of operations; or
• is part of a single co-ordinated plan to dispose of a separate major line of business or
geographical area of operations;
APPENDIX A – AUDITED CONSOLIDATED FINANCIAL STATEMENTS FOR
THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012 AND 2013
A-28
Classification as a discontinued operation occurs upon disposal or when the operation
meets the criteria to be classified as held for sale, if earlier. When an operation is classified
as a discontinued operation, the comparative statement of profit or loss is re-presented as
if the operation had been discontinued from the start of the comparative year.
3.16 Earnings per share
The Group presents basic and diluted earnings per share data for its ordinary shares. Basic
earnings per share is calculated by dividing the profit or loss attributable to ordinary
shareholders of the Company by the weighted average number of ordinary shares
outstanding during the year, adjusted for own shares held. Diluted earnings per share is
determined by adjusting the profit or loss attributable to ordinary shareholders and the
weighted average number of ordinary shares outstanding, adjusted for own shares held, for
the effect of all dilutive potential ordinary shares, which comprise share options granted to
employees.
3.17 Segment reporting
An operating segment is a component of the Group that engages in business activities from
which it may earn revenues and incur expenses, including revenues and expenses that
relate to transactions with any of the Group’s other components. All operating segments’
operating results are reviewed regularly by the Group’s CEO (the chief operating decision
maker) to make decisions about resources to be allocated to the segment and to assess its
performance, and for which discrete financial information is available.
Segment results that are reported to the Group’s CEO include items directly attributable to
a segment as well as those that can be allocated on a reasonable basis. Unallocated items
comprise mainly corporate assets (primarily the Company’s headquarters), head office
expenses, and income tax assets and liabilities.
Segment capital expenditure are total costs incurred during the year to acquire plant and
equipment and intangible assets.
3.18 New standards and interpretations not yet adopted
A number of new standards, amendments to standards and interpretations are effective
after the date of these financial statements, and have not been applied in preparing these
financial statements. None of these are expected to have a significant effect on the financial
statements of the Group.
APPENDIX A – AUDITED CONSOLIDATED FINANCIAL STATEMENTS FOR
THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012 AND 2013
A-29
4 Plant and equipment
Computer
equipment
Office
equipment
Furniture
and
fittings
Office
renovation Total
$ $ $ $ $
Cost
At 1 January 2011 4,129,610 571,954 504,887 1,934,757 7,141,208
Additions 242,039 14,387 68,289 1,364,895 1,689,610
Disposals/written-off (1,634,343) (97,671) (85,364) (817,624) (2,635,002)
Translation differences on
consolidation (50,452) (8,601) (9,140) (31,081) (99,274)
At 31 December 2011 2,686,854 480,069 478,672 2,450,947 6,096,542
Additions 84,730 3,795 1,224 2,100 91,849
Disposals/written-off (10,389) – – – (10,389)
Translation differences on
consolidation (53,615) (12,534) (13,270) (50,761) (130,180)
At 31 December 2012 2,707,580 471,330 466,626 2,402,286 6,047,822
Additions 815,069 25,062 1,466 3,096 844,693
Disposals/written-off (110,547) (1,188) – – (111,735)
Attributable to discontinued operation (201,668) (32,841) (28,482) (121,163) (384,154)
Translation differences on
consolidation (42,447) (6,763) (8,433) (18,354) (75,997)
At 31 December 2013 3,167,987 455,600 431,177 2,265,865 6,320,629
Accumulated depreciation
At 1 January 2011 3,385,910 359,246 318,463 1,226,957 5,290,576
Depreciation for the year 549,016 86,845 79,288 388,652 1,103,801
Disposals/written-off (1,633,038) (82,424) (77,656) (810,902) (2,604,020)
Translation differences on
consolidation (39,293) (3,841) (4,358) (14,136) (61,628)
At 31 December 2011 2,262,595 359,826 315,737 790,571 3,728,729
Depreciation for the year 274,020 69,271 72,370 440,639 856,300
Disposals/written-off (8,395) – – – (8,395)
Translation differences on
consolidation (48,818) (9,295) (9,873) (31,091) (99,077)
At 31 December 2012 2,479,402 419,802 378,234 1,200,119 4,477,557
Depreciation for the year 277,481 37,538 46,418 382,245 743,682
Disposals/written-off (110,214) (949) – – (111,163)
Attributable to discontinued operation (185,379) (26,913) (23,827) (110,900) (347,019)
Translation differences on
consolidation (40,736) (6,192) (8,319) (21,029) (76,276)
At 31 December 2013 2,420,554 423,286 392,506 1,450,435 4,686,781
Carrying amounts
At 1 January 2011 743,700 212,708 186,424 707,800 1,850,632
At 31 December 2011 424,259 120,243 162,935 1,660,376 2,367,813
At 31 December 2012 228,178 51,528 88,392 1,202,167 1,570,265
At 31 December 2013 747,433 32,314 38,671 815,430 1,633,848
APPENDIX A – AUDITED CONSOLIDATED FINANCIAL STATEMENTS FOR
THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012 AND 2013
A-30
5 Intangible assets
Development
costs
Computer
software
Intellectual
properties
Customer
lists Total
$ $ $ $ $
Cost
At 1 January 2011 46,225 1,784,181 1,178,413 – 3,008,819
Additions – 24,236 – – 24,236
Disposals/written-off (27,050) (123,719) – – (150,769)
Translation differences on
consolidation – (34,694) (125,863) – (160,557)
At 31 December 2011 19,175 1,650,004 1,052,550 – 2,721,729
Additions – 122,036 – – 122,036
Translation differences on
consolidation – (36,873) (73,445) – (110,318)
At 31 December 2012 19,175 1,735,167 979,105 – 2,733,447
Additions – 13,899 – 706,800 720,699
Attributable to discontinued operation – (90,355) (524,552) – (614,907)
Translation differences on
consolidation – (40,755) (85,301) – (126,056)
At 31 December 2013 19,175 1,617,956 369,252 706,800 2,713,183
Accumulated amortisation
At 1 January 2011 46,225 1,346,323 651,078 – 2,043,626
Amortisation for the year – 372,617 142,605 – 515,222
Disposals/written-off (27,050) (123,719) – – (150,769)
Translation differences on
consolidation – (26,785) (61,957) – (88,742)
At 31 December 2011 19,175 1,568,436 731,726 – 2,319,337
Amortisation for the year – 80,817 123,293 – 204,110
Translation differences on
consolidation – (34,451) (51,572) – (86,023)
At 31 December 2012 19,175 1,614,802 803,447 – 2,437,424
Amortisation for the year – 66,748 86,440 106,020 259,208
Attributable to discontinued operation – (87,366) (445,870) – (533,236)
Translation differences on
consolidation – (39,286) (74,765) – (114,051)
At 31 December 2013 19,175 1,554,898 369,252 106,020 2,049,345
Carrying amounts
At 1 January 2011 – 437,858 527,335 – 965,193
At 31 December 2011 – 81,568 320,824 – 402,392
At 31 December 2012 – 120,365 175,658 – 296,023
At 31 December 2013 – 63,058 – 600,780 663,838
In 2013, customer lists were acquired by the Group from a third party with a cash
consideration of $706,800 payable in twelve quarterly instalments. The amounts of
$117,800 have been paid to the third party as at 31 December 2013.
APPENDIX A – AUDITED CONSOLIDATED FINANCIAL STATEMENTS FOR
THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012 AND 2013
A-31
6 Subsidiaries
Details of subsidiaries are as follows:
Country of
incorporation
Effective equity held by the Group
Name of subsidiaries 2011 2012 2013
% % %
iFAST Financial Pte. Ltd.
1
and its
subsidiary:
Singapore 100 100 100
iFAST Nominees Pte. Ltd.
1
Singapore 100 100 100
FA Corporate & Compliance
Consultancy Pte. Ltd.
1
Singapore 100 100 100
iFAST Capital Ltd.
1
Singapore 100 100 100
iFAST Financial (HK) Limited
2
and its subsidiary:
Hong Kong 100 100 100
iFAST Nominees (HK) Limited
2
Hong Kong 100 100 100
iFAST Platform Services (HK)
Limited
2
Hong Kong 100 100 100
iFAST Service Centre Sdn. Bhd.
3
Malaysia 100 100 100
iFAST Malaysia Sdn. Bhd.
(formerly known as iFAST-OSK
Sdn. Bhd.)
3
and its subsidiaries:
Malaysia 62 62 65
FA Corporate and Compliance
Consultancy Sdn. Bhd.
3
Malaysia 62 62 65
iFAST Capital Sdn. Bhd.
3
and
its subsidiary:
Malaysia 60 62 65
iFAST Nominees Sdn. Bhd.
3
Malaysia 60 62 65
iFAST India Investments Pte.
Ltd.
1
and its subsidiary:
Singapore 51 51 –
iFAST Financial India Pvt Ltd
4
India 51 51 –
1
KPMG LLP Singapore is the auditor
2
BDO Limited Hong Kong is the auditor
3
BDO Limited Malaysia is the auditor
4
BSR & Co. LLP India is the auditor
Effect on acquisition of additional interests in subsidiaries
In September 2011 and September 2012, the Group’s subsidiary, iFAST Malaysia Sdn.
Bhd., acquired an additional interest in iFAST Capital Sdn. Bhd. for cash consideration of
$807,600 and $280,560 respectively.
In addition, in 2011, 2012 and 2013, iFAST Malaysia Sdn. Bhd. and iFAST Capital Sdn. Bhd.
issued new shares to their holding companies, resulting in changes in the Group’s
ownership interests in iFAST Malaysia Sdn. Bhd. and its subsidiaries without a change of
control.
APPENDIX A – AUDITED CONSOLIDATED FINANCIAL STATEMENTS FOR
THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012 AND 2013
A-32
For the years ended 31 December 2011, 2012 and 2013, the Group recognised amounts of
$105,791, $23,450 and $276,657, and $913,391, $257,110 and $276,657 on acquisition of
additional interests in subsidiaries in non-controlling interests and equity reserve
respectively (Note 12).
Effect on disposal of subsidiaries
As referred to in Note 20, the Company’s shareholding in iFAST India Investments Pte. Ltd.
and its subsidiary was disposed following a distribution in specie on 30 October 2013.
The Group recognised an amount of $1,379,357 and $353,644 on disposal of its interest in
subsidiaries in non-controlling interests and reserves (equity reserve and accumulated
profits) respectively (Note 12) for the year ended 31 December 2013.
Capital reduction in a subsidiary
A Restructuring Agreement dated 31 March 2011 between the Company, iFAST India
Investments Pte. Ltd. (iFAST India) and Deutsche Asia Pacific Holdings Pte. Ltd., a
shareholder of iFAST India, agreed that the issued share capital of iFAST India be reduced
by $4,900,000 without any cancellation in the number of shares held by each shareholder
of iFAST India (Capital Reduction).
On 28 April 2011, the High Court of the Republic of Singapore approved the Capital
Reduction.
On 13 May 2011, $1,900,000 was returned to Deutsche Asia Pacific Holdings Pte. Ltd. and
$3,000,000 was returned to the Company.
7 Club membership
2011 2012 2013
$ $ $
Club membership, at cost 11,429 11,429 11,429
8 Trade and other receivables
2011 2012 2013
$ $ $
Trade receivables 6,627,566 6,312,837 7,092,762
Impairment losses (3,788) (6,403) (14,260)
Net receivables 6,623,778 6,306,434 7,078,502
Accrued revenue 6,699,707 6,302,812 7,907,105
Deposits and other receivables 1,992,455 2,043,447 1,778,304
Loans and receivables 15,315,940 14,652,693 16,763,911
APPENDIX A – AUDITED CONSOLIDATED FINANCIAL STATEMENTS FOR
THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012 AND 2013
A-33
Trade receivables and accrued revenue consist mainly of commission and fee income that
shall only be due and payable to third party financial advisers upon the Group’s receipt of
the corresponding amounts from customers.
The Group’s exposure to credit and impairment losses related to trade receivables are
disclosed in Note 24.
9 Other investments
2011 2012 2013
$ $ $
Non-current
Available-for-sale quoted debt securities 1,754,357 3,455,810 2,011,502
Current
Available-for-sale quoted debt securities 6,206,349 3,889,287 –
Available-for-sale quoted equity securities 51,496 – –
6,257,845 3,889,287 –
The quoted debt and equity securities classified as available-for-sale of the Group
represent investments in marketable bond and equity funds respectively.
The quoted debt securities under current assets are denominated in Indian Rupees and the
quoted debt securities under non-current assets are denominated in Singapore dollar.
The quoted equity securities are denominated in Singapore dollar.
The maximum exposures to credit risk of the quoted debt and equity securities at the
reporting date are the carrying amounts.
The Group’s exposure to price risk and fair value information are disclosed in Note 24.
10 Cash and cash equivalents
2011 2012 2013
$ $ $
Cash at bank and in hand 10,724,589 12,379,553 16,292,523
Money market funds 1,862,821 1,136,676 426,386
Cash and cash equivalents in the
consolidated statement of cash flows 12,587,410 13,516,229 16,718,909
The money market funds are included as cash and cash equivalents as they are considered
fully liquid investment readily convertible into known amount of cash and cash equivalents
which are subject to an insignificant risk of changes in value.
APPENDIX A – AUDITED CONSOLIDATED FINANCIAL STATEMENTS FOR
THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012 AND 2013
A-34
The weighted average effective interest rate per annum relating to cash and cash
equivalents and client bank accounts as at 31 December 2011, 2012 and 2013 for the
Group were 0.06%, 0.08% and 0.08% respectively. Interest rates reprice on a daily basis.
11 Held under trust
Some of the subsidiaries in the Group receive and hold monies deposited by clients and
other institutions in the course of the conduct of the regulated activities. These clients’
monies are maintained in one or more trust bank accounts which are separately maintained
from the bank accounts of the Group.
12 Share capital and reserves
Share capital
Note 2011 2012 2013
No. of
shares
No. of
shares
No. of
shares
Fully paid ordinary shares,
with no par value:
Ordinary shares:
At 1 January 33,410,964 33,457,804 33,573,654
Exercise of share options
(Share Option Scheme) 21 46,840 115,850 222,415
At 31 December 33,457,804 33,573,654 33,796,069
222,415 ordinary shares were issued as a result of the exercise of vested options arising
from the share option programmes granted to full-time executives (2012: 115,850 shares;
2011: 46,840 shares). Options were exercised at an average price of $1.6455 (2012:
$1.3885; 2011: $1.36) per option. All issued shares are fully paid.
The holders of ordinary shares are entitled to receive dividends as declared from time to
time and are entitled to one vote per share at meetings of the Company. All ordinary shares
rank equally with regard to the Company’s residual assets.
As at the end of each financial year, there were 1,555,685 (2012: 592,985; 2011: 736,485)
shares reserved for issue under options.
APPENDIX A – AUDITED CONSOLIDATED FINANCIAL STATEMENTS FOR
THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012 AND 2013
A-35
Reserves
2011 2012 2013
$ $ $
Fair value reserve 290,373 435,830 34,602
Foreign currency translation reserve (1,518,467) (1,976,899) (748,886)
Share option reserve 500,444 496,870 559,171
Equity reserve 1,951,908 1,831,834 (1,368,829)
Accumulated profits 9,918,067 12,320,763 14,819,689
11,142,325 13,108,398 13,295,747
Fair value reserve
The fair value reserve comprises the cumulative net change in the fair value of available-
for-sale financial assets until the investments are derecognised or impaired.
Foreign currency translation reserve
The foreign currency translation reserve comprises foreign exchange differences arising
from the translation of the financial statements of foreign operations.
Share option reserve
The share option reserve comprises the cumulative value of employee services received for
the issue of share options.
Equity reserve
The equity reserve represents:
(i) effects of changes in ownership interests in subsidiaries when there are no changes
in control;
(ii) premium received from non-controlling interests on issue of shares by a subsidiary
without change in ownership interests; and
(iii) premium received from capital reduction in a subsidiary without change in ownership
interests.
APPENDIX A – AUDITED CONSOLIDATED FINANCIAL STATEMENTS FOR
THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012 AND 2013
A-36
13 Unsecured bank loan
2011 2012 2013
$ $ $
Non-current
Unsecured bank loan 748,189 – –
Current
Unsecured bank loan 1,282,608 748,189 –
2,030,797 748,189 –
In 2009, a wholly owned subsidiary obtained a bank loan which was extended under the
Bridging Loan Program in conjunction with SPRING Singapore. Information on the
unsecured bank loan are as follows:
Currency
Nominal
interest rate
Year of
maturity
Face
value
Carrying
amount
$ $
31 December 2013
Unsecured bank loan SGD 5.0% fixed
per annum
2013 – –
31 December 2012
Unsecured bank loan SGD 5.0% fixed
per annum
2013 748,189 748,189
31 December 2011
Unsecured bank loan SGD 5.0% fixed
per annum
2013 2,030,797 2,030,797
The unsecured bank loan was repayable on a monthly basis over 4 years. The Group’s
exposure to liquidity risk is disclosed in Note 24.
14 Deferred tax
Unrecognised deferred tax assets and liabilities
At 31 December 2013, the deferred tax assets in respect of tax losses and deductible
temporary differences amounting to $49,665,868 (2012: $59,609,956; 2011: $58,655,142)
have not been recognised because it is not probable that future taxable profits will be
available against which the Group can utilise the benefits.
The tax losses are subject to agreement by the tax authorities and compliance with tax
regulations in the respective countries in which certain subsidiaries operate. The deductible
temporary differences do not expire under current tax legislation.
APPENDIX A – AUDITED CONSOLIDATED FINANCIAL STATEMENTS FOR
THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012 AND 2013
A-37
Recognised deferred tax assets and liabilities
Deferred tax liabilities and assets are offset when there is a legally enforceable right to set
off current tax assets against current tax liabilities and when the deferred taxes relate to the
same taxation authority. The following amount, determined after appropriate offsetting is
included in the statement of financial position as follows:
2011 2012 2013
$ $ $
Deferred tax assets 24,229 27,811 34,559
Deferred tax liabilities 48,052 51,980 76,746
Deferred tax assets and liabilities are attributable to the following:
Assets Liabilities
2011 2012 2013 2011 2012 2013
$ $ $ $ $ $
Plant and equipment – (8,175) (6,402) 97,017 89,800 189,709
Trade receivables (643) (1,088) (2,425) – – –
Trade and other
payables (28,978) (14,914) (22,449) – – –
Employee benefits (43,573) (41,454) (116,246) – – –
Deferred tax
(assets)/liabilities (73,194) (65,631) (147,522) 97,017 89,800 189,709
Set off of tax 48,965 37,820 112,963 (48,965) (37,820) (112,963)
Net deferred tax
(assets)/liabilities (24,229) (27,811) (34,559) 48,052 51,980 76,746
APPENDIX A – AUDITED CONSOLIDATED FINANCIAL STATEMENTS FOR
THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012 AND 2013
A-38
Movements in deferred tax assets and liabilities of the Group (prior to offsetting of
balances) during the year were as follows:
At
1 January
2011
Recognised
in profit
or loss
(Note 19)
At
31 December
2011
Recognised
in profit
or loss
(Note 19)
At
31 December
2012
Recognised
in profit
or loss
(Note 19)
At
31 December
2013
$ $ $ $ $ $
Deferred tax
assets
Plant and
equipment – – – (8,175) (8,175) 1,773 (6,402)
Employee
benefits (25,609) (17,964) (43,573) 2,119 (41,454) (74,792) (116,246)
Trade and
other
receivables (7,957) 7,314 (643) (445) (1,088) (1,337) (2,425)
Trade and
other
payables – (28,978) (28,978) 14,064 (14,914) (7,535) (22,449)
Unutilised
capital
allowances (1,417) 1,417 – – – – –
(34,983) (38,211) (73,194) 7,563 (65,631) (81,891) (147,522)
Deferred tax
liabilities
Plant and
equipment 182,293 (85,276) 97,017 (7,217) 89,800 99,909 189,709
147,310 (123,487) 23,823 346 24,169 18,018 42,187
APPENDIX A – AUDITED CONSOLIDATED FINANCIAL STATEMENTS FOR
THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012 AND 2013
A-39
15 Trade and other payables
2011 2012 2013
$ $ $
Current
Trade payables 930,886 1,135,275 1,068,351
Accrued operating expenses 10,413,253 9,151,278 11,390,914
Deposits received 66,787 164,160 376,092
11,410,926 10,450,713 12,835,357
Non-current
Accrued operating expenses – – 353,400
Trade payables and accrued operating expenses consist mainly of commission and fee
income that shall only be due and payable to third party financial advisers upon the Group’s
receipt of the corresponding amounts from customers.
Included in the Group’s accrued operating expenses as at 31 December 2011, 2012 and
2013, are amounts payable to a third party as indicated in Note 5 amounting to $589,000,
where $235,600 and $353,400 are the current and non-current portion respectively.
The Group’s exposure to liquidity risk related to trade and other payables is disclosed in
Note 24.
16 Revenue
Continuing operations
Discontinued operation
(see note 20) Total
2011 2012 2013 2011 2012 2013 2011 2012 2013
$ $ $ $ $ $ $ $ $
Commission and
fee income 59,554,971 54,657,033 67,026,255 528,237 746,381 588,770 60,083,208 55,403,414 67,615,025
Service fees 1,221,359 1,185,050 1,825,166 – – – 1,221,359 1,185,050 1,825,166
Advertising fees 182,598 439,696 500,703 – – – 182,598 439,696 500,703
Others 163,906 132,191 117,999 51 – – 163,957 132,191 117,999
61,122,834 56,413,970 69,470,123 528,288 746,381 588,770 61,651,122 57,160,351 70,058,893
APPENDIX A – AUDITED CONSOLIDATED FINANCIAL STATEMENTS FOR
THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012 AND 2013
A-40
17 Other operating income
2011 2012 2013
$ $ $
Investment income 4,548 11,363 96,702
Government grant 10,000 10,000 8,000
Others 43,326 63,559 59,269
57,874 84,922 163,971
18 Profit for the year
The following items have been included in arriving at profit for the year:
2011 2012 2013
$ $ $
Interest income
– from cash at bank (8,128) (2,448) (3,088)
– from trust accounts (5,600) (2,372) (11,960)
– from money market funds (45,652) (41,038) (24,058)
– from loans and receivables – – (422)
Impairment losses/(reversal) on trade
receivables, net (17,719) 2,615 7,857
Unrealised exchange loss, net 193,784 110,320 12,245
Value of employee services received for
issue of share options, included in staff
costs 47,890 (3,574) 62,301
Contributions to defined contribution plans,
included in staff costs 1,020,950 1,041,496 1,054,702
Operating lease expense 3,974,063 4,297,308 4,180,983
Net change in fair value of available-for-
sale financial assets transferred from
equity (657,075) (397,776) (732,457)
19 Tax expense
2011 2012 2013
$ $ $
Current tax expense
Current year 127,060 687,687 614,064
Adjustment for prior periods 248,779 (2,890) (59,331)
375,839 684,797 554,733
APPENDIX A – AUDITED CONSOLIDATED FINANCIAL STATEMENTS FOR
THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012 AND 2013
A-41
2011 2012 2013
$ $ $
Deferred tax expense
Origination and reversal of temporary
differences (99,088) (4,308) 3,696
Adjustment for prior periods (24,399) 4,654 14,322
(123,487) 346 18,018
Tax expense from continuing operations 252,352 685,143 572,751
There is no tax expense from the discontinued operation (see Note 20).
As at 31 December 2013, the Inland Revenue Authority of Singapore (“IRAS”) was
reviewing the writing-down allowance claims made by the Company on its intellectual
property. On 7 August 2014, IRAS has completed its review and accepted the writing-down
allowance claims made by the Company in prior years.
Reconciliation of effective tax rate
2011 2012 2013
$ $ $
Profit for the year from continuing
operations 2,122,061 3,256,418 8,242,212
Tax expense from continuing operations 252,352 685,143 572,751
Profit before tax from continuing operations 2,374,413 3,941,561 8,814,963
Tax using Singapore tax rate at 17% 403,650 670,065 1,498,544
Effect of tax rates in foreign jurisdictions (104,128) (88,227) (49,174)
Income not subject to tax (13,119) (33,244) (136,263)
Tax incentives – (138,031) (481,347)
Non-deductible expenses 125,176 105,103 118,981
Current period tax losses and temporary
differences for which no deferred tax asset
was recognised 857,471 506,268 155,541
Recognition of tax effect of previously
unrecognised tax losses and temporary
differences – (346,957) (489,211)
Under/(over) provided in prior years 224,380 1,764 (45,009)
Tax benefit arising from intra-group sale of
assets (1,220,600) – –
Others (20,478) 8,402 689
252,352 685,143 572,751
APPENDIX A – AUDITED CONSOLIDATED FINANCIAL STATEMENTS FOR
THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012 AND 2013
A-42
20 Discontinued operation
On 3 October 2013, the Company and Deutsche Asia Pacific Holdings Pte. Ltd. sold their
entire shares in iFAST India Investment Pte. Ltd. (“iFAST India”) and its subsidiary to
Pecuniam Pte. Ltd. (“Pecuniam”), for considerations of $1,699,668 and $1,733,001
respectively, which was financed by a convertible loan receivable of $3,332,669 and an
advance of $100,000 from the Company to Pecuniam. The convertible loan receivable was
converted to Pecuniam shares subsequently. In addition, the Company injected $400,000
into Pecuniam. On 30 October 2013, the Company declared a special interim dividend
amounting to $3,832,669 to be satisfied by way of a distribution in specie of the entire
Pecuniam shares (“assets”) held by the Company, being the fair value of the assets
distributed by the Group and Company.
iFAST India and its subsidiary were not previously presented as a discontinued operation
or classified as held for sale as at 31 December 2011 and 2012 and thus the statements of
profit or loss for the years ended 31 December 2011 and 2012 have been re-presented to
show the discontinued operation separately from continuing operations. Management
committed to a plan to sell iFAST India and its subsidiary in 2013 following a strategic
decision to place greater focus on the Group’s core operation segments, being the
operations in Singapore, Hong Kong and Malaysia.
2011 2012 2013
$ $ $
Results of discontinued operation
Revenue 528,288 746,381 588,770
Other operating income 652,678 385,403 738,006
Expenses (3,126,285) (2,763,101) (1,879,903)
Results from operating activities,
net of tax (1,945,319) (1,631,317) (553,127)
Translation reserve realised, loss – – (2,849,138)
Fair value reserve realised, gain – – 250,430
Loss for the year (1,945,319) (1,631,317) (3,151,835)
Included in other operating income for the year ended 31 December 2013 is the realisation
of intangible assets during the year amounting to $81,895.
APPENDIX A – AUDITED CONSOLIDATED FINANCIAL STATEMENTS FOR
THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012 AND 2013
A-43
Of the loss from discontinued operation of $3,151,835 (2012: $1,631,317; 2011:
$1,945,319), an amount of $2,713,106 (2012: $661,130; 2011: $767,881) is attributable to
the owners of the Company. Of the profit from continuing operations of $8,242,212 (2012:
$3,256,418; 2011: $2,122,061), an amount of $8,474,397 (2012: $3,741,551; 2011:
$2,771,516) is attributable to the owners of the Company.
2011 2012 2013
$ $ $
Net cash used in operating activities (2,613,340) (2,308,217) (1,375,554)
Net cash from investing activities 7,349,910 2,354,468 1,548,129
Net cash used in financing activities (4,839,485) (85,590) (128,152)
Net cash flows for the year (102,915) (39,339) 44,423
Effect of disposal and distribution on the financial position of the Group
2013
$
Plant and equipment 37,135
Intangible assets 163,566
Trade and other receivables 784,382
Other investments 2,269,086
Prepayments 55,133
Cash and cash equivalents 124,708
Trade and other payables (612,754)
Current tax payable (6,237)
Carrying amount of net assets of subsidiaries disposed to Pecuniam 2,815,019
Cash injected to Pecuniam 400,000
Carrying amount of net assets distributed 3,215,019
Dividend to shareholders 3,832,669
Carrying amount of net assets distributed (3,215,019)
Gain on distribution to owners of the Company 617,650
Net cash outflow arising on disposal of discontinued operation:
Cash paid to non-controlling interest (1,733,001)
Cash injected to Pecuniam (400,000)
Cash and cash equivalents of subsidiaries disposed off (124,708)
(2,257,709)
APPENDIX A – AUDITED CONSOLIDATED FINANCIAL STATEMENTS FOR
THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012 AND 2013
A-44
21 Share options
Share Option Scheme
Share option scheme 2003
(i) The Share Option Scheme (the 2003 Scheme) of the Company was approved and
adopted by its members at an Extraordinary General Meeting held on 28 March 2003.
(ii) The 2003 Scheme is administered by a Committee appointed by the Board of
Directors. The Committee comprises 3 directors, Lim Chung Chun, Lim Wee Kian and
Low Huan Ping as at 31 December 2011, 2012 and 2013.
(iii) Other information regarding the 2003 Scheme are set out below:
• those eligible to participate in the 2003 Scheme comprise confirmed full-time
executives, including directors, who have been employed by the Company and/or
its subsidiaries for a continuous period of at least six months and any non-
executive directors and consultants of the Company and/or its subsidiaries who,
in the absolute discretion of the Committee, are selected to participate in the
2003 Scheme.
• subject to adjustments arising from certain variation in the issued share capital of
the Company:
• the total number of shares in respect of which options may be offered on any
offering date, when added to the number of shares issuable in respect of
outstanding options already granted under the 2003 Scheme, shall not
exceed 3,785,611 (2011 and 2012: 3,785,611) as at 31 December 2013; and
• the offer price in respect of which an option is exercisable shall be at least
85% of the fair value of the shares as at the time of offer of the options to
be determined by the Committee.
• subject to the provisions in the rules of the 2003 Scheme, the option granted
expires on (i) (in the case of executives) the day preceding the tenth anniversary
of the date of the grant of the option or (ii) (in the case of non – executive
directors and consultants) the day preceding the fifth anniversary of the date of
the grant of the option.
• the options granted by the Company do not entitle the holders of the options, by
virtue of such holding, to any rights to participate in any share issue of any other
company.
(iv) The 2003 Scheme was terminated on 23 May 2013 by a resolution passed by its
members at an Annual General Meeting. This will not affect all options remaining
unexercised.
APPENDIX A – AUDITED CONSOLIDATED FINANCIAL STATEMENTS FOR
THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012 AND 2013
A-45
Share option scheme 2013
(i) The 2013 Share Option Scheme (the 2013 Scheme) of the Company was approved
and adopted by its members at an Annual General Meeting held on 23 May 2013.
(ii) The 2013 Scheme is administered by a Committee appointed by the Board of
Directors. The Committee comprises 3 directors, Lim Chung Chun, Lim Wee Kian and
Low Huan Ping as at 31 December 2013.
(iii) Other information regarding the 2013 Scheme are set out below:
• those eligible to participate in the 2013 Scheme comprise confirmed full-time
executives, including directors, who have been employed by the Company and/or
its subsidiaries for a continuous period of at least three months and any
non-executive directors and consultants of the Company and/or its subsidiaries
who, in the absolute discretion of the Committee, are selected to participate in
the Scheme.
• the 2013 Scheme will continue in operation at the discretion of the Committee,
subject to a maximum period of 10 years commencing on 23 May 2013, provided
that the 2013 Scheme may continue beyond the above stipulated period with the
approval of the Company’s shareholders by ordinary resolution in general
meeting.
• subject to adjustments arising from certain variation in the issued share capital of
the Company:
• the total number of shares in respect of which options may be offered on any
offering date, when added to the number of shares issuable in respect of
outstanding options already granted under the 2013 Scheme, shall not
exceed 4,781,725 as at 31 December 2013; and
• the offer price in respect of which an option is exercisable shall be
determined by the Committee at its absolute discretion, fixed by the
Committee and approved by the Shareholders of the Company in general
meeting at a price which is set at a discount, provided that the maximum
discount shall not exceed 20% of the last dealt prices for the share. In
determining the quantum of such discount, the Committee shall take into
consideration the following criteria:
i. the performance of the Company
ii. the individual performance of the participant of the 2013 Scheme
iii. the contribution of the participant of the 2013 Scheme to the success
and development of the Company
APPENDIX A – AUDITED CONSOLIDATED FINANCIAL STATEMENTS FOR
THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012 AND 2013
A-46
At the end of the financial year, details of the options granted under both the 2003 and the
2013 Scheme in respect of unissued ordinary shares of the Company are as follows:
Date of
grant of
options
Exercise
price
per share
Options
outstanding
at 1 January
2011
Options
granted
Options
exercised
Options
forfeited/
expired
Options
outstanding at
31 December
2011
Number of
option
holders at
31 December
2011
Date of
expiration
1/1/2006 $0.49 7,500 – – – 7,500 2 31/12/2015
1/7/2006 $0.70 98,500 – – – 98,500 6 30/6/2016
1/1/2007 $1.20 132,600 – 28,600 – 104,000 13 31/12/2016
1/4/2007 $1.96 43,000 – – 5,000 38,000 3 31/3/2017
1/7/2009 $1.60 236,625 – 18,240 4,800 213,585 45 30/6/2019
1/7/2010 $2.40 287,900 – – 13,000 274,900 55 30/6/2020
806,125 – 46,840 22,800 736,485
Date of
grant of
options
Exercise
price
per share
Options
outstanding
at 1 January
2012
Options
granted
Options
exercised
Options
forfeited/
expired
Options
outstanding at
31 December
2012
Number of
option
holders at
31 December
2012
Date of
expiration
1/1/2006 $0.49 7,500 – – – 7,500 2 31/12/2015
1/7/2006 $0.70 98,500 – 5,000 – 93,500 5 30/6/2016
1/1/2007 $1.20 104,000 – 50,000 – 54,000 9 31/12/2016
1/4/2007 $1.96 38,000 – – – 38,000 3 31/3/2017
1/7/2009 $1.60 213,585 – 60,850 5,550 147,185 28 30/6/2019
1/7/2010 $2.40 274,900 – – 22,100 252,800 50 30/6/2020
736,485 – 115,850 27,650 592,985
Date of
grant of
options
Exercise
price
per share
Options
outstanding
at 1 January
2013
Options
granted
Options
exercised
Options
forfeited/
expired
Options
outstanding at
31 December
2013
Number of
option
holders at
31 December
2013
Date of
expiration
1/1/2006 $0.49 7,500 – 5,400 – 2,100 1 31/12/2015
1/7/2006 $0.70 93,500 – 38,305 – 55,195 4 30/6/2016
1/1/2007 $1.20 54,000 – 20,000 – 34,000 6 31/12/2016
1/4/2007 $1.96 38,000 – 15,200 – 22,800 3 31/3/2017
1/7/2009 $1.60 147,185 – 57,610 – 89,575 17 30/6/2019
1/7/2010 $2.40 252,800 – 45,900 27,000 179,900 36 30/6/2020
1/7/2013 $2.01 – 40,000 40,000 – – – –
1/7/2013 $2.50 – 1,198,865 – 26,750 1,172,115 113 30/6/2023
592,985 1,238,865 222,415 53,750 1,555,685
APPENDIX A – AUDITED CONSOLIDATED FINANCIAL STATEMENTS FOR
THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012 AND 2013
A-47
Movements in the number of share options and their related weighted average exercise
prices are as follows:
Share option
scheme 2003
Share option
scheme 2003
Share option
scheme 2003
Share option
scheme 2013
Weighted
average
exercise
price
2011
No. of
options
2011
Weighted
average
exercise
price
2012
No. of
options
2012
Weighted
average
exercise
price
2013
No. of
options
2013
Weighted
average
exercise
price
2013
No. of
options
2013
At January 1.72 806,125 1.73 736,485 1.77 592,985 – –
Granted – – – – – – 2.48 1,238,865
Exercised 1.36 (46,840) 1.39 (115,850) 1.57 (182,415) 2.01 (40,000)
Forfeited/Expired 2.14 (22,800) 2.24 (27,650) 2.40 (27,000) 2.50 (26,750)
At 31
December 1.73 736,485 1.77 592,985 1.83 383,570 2.50 1,172,115
Number of
options
exercisable at
31 December 1.21 323,210 1.56 441,305 1.83 383,570 – –
Options were exercised on a regular basis throughout the year. The weighted average
share price during the year was $3.32 (2012: $2.08; 2011: $2.34) per share.
Measurement of fair values
The fair value of services received in return for share options granted are measured by
reference to the fair value of share options granted. The estimate of the fair value of the
services received is measured based on the Binomial Model. The share prices applied to
the model are based on last-transacted prices of the Company’s ordinary shares. The
expected life used in the model has been adjusted based on management’s best estimate,
for the effects of non-transferability, exercise restrictions and behavioural considerations.
Fair value of share options and assumptions
Date of grant of
options
1 January
2006
1 July
2006
1 January
2007
1 April
2007
1 July
2009
1 July
2010
1 July
2013
Fair value at
measurement date 0.24 0.24 0.32 0.56 0.48 0.21 0.49
Share price $0.58 $0.70 $1.20 $1.96 $1.60 $2.40 $2.50
Exercise price $0.49 $0.70 $1.20 $1.96 $1.60 $2.40 $2.50
Expected volatility 12.0% 13.2% 20.8% 22.0% 38.9% 7.4% 21.4%
Expected option life
(days) 3,650 3,650 2,190 2,190 1,460 1,460 1,460
Expected dividends – – $0.04 $0.04 $0.10 $0.10 $0.03
Risk-free interest rate 3.50% 3.50% 3.75% 3.75% 3.13% 2.50% 2.25%
The expected volatility is based on the one year historic volatility of the Company’s share
price, adjusted for any expected changes to future volatility.
APPENDIX A – AUDITED CONSOLIDATED FINANCIAL STATEMENTS FOR
THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012 AND 2013
A-48
There are no market conditions associated with the share option grants. Service conditions
and non-market performance conditions are not taken into account in the measurement of
the fair value of the services to be received at the grant date.
22 Earnings per share
Basic earnings per share
2011 2012 2013
Continuing
operations
Discontinued
operation Total
Continuing
operations
Discontinued
operation Total
Continuing
operations
Discontinued
operation Total
$ $ $ $ $ $ $ $ $
Basic earnings per
share is based on:
Net profit/(loss)
attributable to
ordinary
shareholders 2,771,516 (767,881) 2,003,635 3,741,551 (661,130) 3,080,421 8,474,397 (2,713,106) 5,761,291
2011 2012 2013
No. of shares No. of shares No. of shares
As previously reported
Issued ordinary shares at beginning
of the year 33,410,964 33,457,804 33,573,654
Effect of share options exercised
(Share Option Scheme) 25,117 43,630 101,534
Weighted average number of ordinary
shares at the end of the year 33,436,081 33,501,434 33,675,188
Basic earnings per share (cents)
from continuing operations 8.3 11.2 25.2
Basic earnings per share (cents) 6.0 9.2 17.1
As restated*
Weighted average number of ordinary
shares at the end of the year 200,616,486 201,008,604 202,051,128
Basic earnings per share (cents)
from continuing operations 1.4 1.9 4.2
Basic earnings per share (cents) 1.0 1.5 2.9
* adjusted for sub-division of every 1 ordinary share into 6 ordinary shares as completed by the Company on
20 November 2014.
APPENDIX A – AUDITED CONSOLIDATED FINANCIAL STATEMENTS FOR
THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012 AND 2013
A-49
Diluted earnings per share
For the purpose of calculating the diluted earnings per ordinary share, the weighted
average number of ordinary shares in issue is adjusted to take into account the dilutive
effect arising from the dilutive share options under the Share Option Scheme, with the
potential ordinary shares weighted for the period outstanding.
2011 2012 2013
Continuing
operations
Discontinued
operation Total
Continuing
operations
Discontinued
operation Total
Continuing
operations
Discontinued
operation Total
$ $ $ $ $ $ $ $ $
Diluted earnings per
share is based on:
Net profit/(loss)
attributable to ordinary
shareholders 2,771,516 (767,881) 2,003,635 3,741,551 (661,130) 3,080,421 8,474,397 (2,713,106) 5,761,291
The effect of the exercise of share options on the weighted average number of ordinary
shares in issue is as follows:
2011 2012 2013
No. of shares No. of shares No. of shares
As previously reported
Weighted average number of:
Ordinary shares used in the calculation
of basic earnings per share 33,436,081 33,501,434 33,675,188
Potential ordinary shares issuable
under:
– share options (Share Option
Scheme) 404,617 349,444 862,382
Weighted average number of ordinary
shares issued and potential shares
issuable assuming full conversion at
the end of the year 33,840,698 33,850,878 34,537,570
Diluted earnings per share (cents)
from continuing operations 8.2 11.1 24.5
Diluted earnings per share (cents) 5.9 9.1 16.7
As restated*
Weighted average number of ordinary
shares issued and potential shares
issuable assuming full conversion
at the end of the year 203,044,188 203,105,268 207,225,420
Diluted earnings per share (cents)
from continuing operations 1.4 1.9 4.1
Diluted earnings per share (cents) 1.0 1.5 2.8
* adjusted for sub-division of every 1 ordinary share into 6 ordinary shares as completed by the Company on
20 November 2014.
APPENDIX A – AUDITED CONSOLIDATED FINANCIAL STATEMENTS FOR
THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012 AND 2013
A-50
Options to purchase 22,800 shares at $1.96 per share (2011 and 2012: 38,000 shares at
$1.96 per share) issued in April 2007 and 179,900 shares at $2.40 per share (2012: 252,800
shares at $2.40 per share) issued in July 2010 were outstanding in 2013 but not included
in the computation of diluted earnings per share for the corresponding year because these
options were anti-dilutive. The options, which expire on 31 March 2017 and 30 June 2020
are still outstanding as at 31 December 2013.
23 Operating segments
The Group has four reportable segments, as described below, which are the Group’s
strategic business locations. The strategic business locations are managed separately. For
each of the strategic business locations, the Chairman and CEO reviews internal
management reports on monthly basis.
Information regarding the results of each reportable segment is included below.
Performance is measured based on segment profit before tax, as included in the internal
management reports that are reviewed by the Chairman and CEO. Segment profit is used
to measure performance as management believes that such information is the most
relevant in evaluating the results of certain segments relative to other entities that operate
within these industries. Inter-segment pricing is determined on an arm’s length basis.
In presenting information on the basis of geographical segments, segment revenue is
based on a geographical location of customers. Segment non-current assets are based on
the geographical location of the assets.
APPENDIX A – AUDITED CONSOLIDATED FINANCIAL STATEMENTS FOR
THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012 AND 2013
A-51
Geographical segments are analysed by four principal geographical areas as follows:
Information about reportable segments
Singapore Hong Kong Malaysia
India
(Discontinued
operation) Total
$ $ $ $ $
2011
Revenue and expenses
Revenue from external
customers 48,878,695 11,381,746 862,393 528,288 61,651,122
Inter-segment revenue 311,080 – 1,993,342 – 2,304,422
Total revenue 49,189,775 11,381,746 2,855,735 528,288 63,955,544
Finance income 5,612 981 52,787 – 59,380
Finance expense (137,198) – – – (137,198)
Depreciation of plant and
equipment (514,637) (152,241) (311,890) (125,033) (1,103,801)
Amortisation of intangible
assets (74,002) (17,214) (243,804) (180,202) (515,222)
Reportable segment
profit/(loss) before tax 6,097,100 (1,972,941) (1,438,666) (2,256,399) 429,094
Assets and liabilities
Reportable segment assets 23,111,796 5,248,463 3,408,128 7,556,371 39,324,758
Capital expenditure 1,592,804 34,960 56,543 29,539 1,713,846
Segment liabilities 10,097,381 2,496,561 642,969 405,646 13,642,557
2012
Revenue and expenses
Revenue from external
customers 42,867,420 12,395,666 1,150,884 746,381 57,160,351
Inter-segment revenue 221,750 – 1,603,936 – 1,825,686
Total revenue 43,089,170 12,395,666 2,754,820 746,381 58,986,037
Finance income 2,385 297 43,176 – 45,858
Finance expense (71,840) – – – (71,840)
Depreciation of plant and
equipment (456,249) (132,911) (197,443) (69,697) (856,300)
Amortisation of intangible
assets (25,461) (10,943) (34,271) (133,435) (204,110)
Reportable segment
profit/(loss) before tax 6,543,960 (1,188,000) (1,192,649) (1,853,067) 2,310,244
Assets and liabilities
Reportable segment assets 25,706,958 5,168,088 2,090,965 5,203,094 38,169,105
Capital expenditure 108,290 13,192 67,703 24,700 213,885
Segment liabilities 8,466,724 2,608,875 450,690 387,521 11,913,810
APPENDIX A – AUDITED CONSOLIDATED FINANCIAL STATEMENTS FOR
THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012 AND 2013
A-52
Singapore Hong Kong Malaysia
India
(Discontinued
operation) Total
$ $ $ $ $
2013
Revenue and expenses
Revenue from external
customers 52,455,323 15,040,847 1,973,953 588,770 70,058,893
Inter-segment revenue 168,750 – 1,609,538 – 1,778,288
Total revenue 52,624,073 15,040,847 3,583,491 588,770 71,837,181
Finance income 1,882 390 37,256 – 39,528
Finance expense (10,376) – – – (10,376)
Depreciation of plant and
equipment (490,470) (111,142) (101,894) (40,176) (743,682)
Amortisation of intangible
assets (129,878) (4,371) (34,372) (90,587) (259,208)
Reportable segment
profit/(loss) before tax 9,177,667 400,430 (594,384) (3,320,585) 5,663,128
Assets and liabilities
Reportable segment assets 30,389,101 6,636,239 1,431,694 – 38,457,034
Capital expenditure 1,516,075 21,769 16,416 – 1,554,260
Segment liabilities 9,630,867 3,619,665 582,705 – 13,833,237
Reconciliations of reportable segment revenues, profit and loss, assets and liabilities and
other material items:
2011 2012 2013
$ $ $
Revenue
Total revenue for reporting segments 63,955,544 58,986,037 71,837,181
Elimination of inter-segment revenue (2,304,422) (1,825,686) (1,778,288)
Elimination of discontinued operation (528,288) (746,381) (588,770)
Consolidated revenue 61,122,834 56,413,970 69,470,123
Profit or loss
Total profit before tax for reportable segments 429,094 2,310,244 5,663,128
Elimination of segment loss before income tax
from discontinued operation 2,256,399 1,853,067 3,320,585
Elimination of inter-segment sales to
discontinued operation (311,080) (221,750) (168,750)
Consolidated profit before tax 2,374,413 3,941,561 8,814,963
Assets
Total assets for reportable segments 39,324,758 38,169,105 38,457,034
Liabilities
Total liabilities for reportable segments 13,642,557 11,913,810 13,833,237
APPENDIX A – AUDITED CONSOLIDATED FINANCIAL STATEMENTS FOR
THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012 AND 2013
A-53
Reportable
segment
total Adjustment
Consolidated
total
$ $ $
2011
Other material items
Finance income 59,380 – 59,380
Finance expense (137,198) – (137,198)
Capital expenditure 1,713,846 – 1,713,846
Depreciation and amortisation (1,619,023) – (1,619,023)
2012
Other material items
Finance income 45,858 – 45,858
Finance expense (71,840) – (71,840)
Capital expenditure 213,885 – 213,885
Depreciation and amortisation (1,060,410) – (1,060,410)
2013
Other material items
Finance income 39,528 – 39,528
Finance expense (10,376) – (10,376)
Capital expenditure 1,554,260 – 1,554,260
Depreciation and amortisation (1,002,890) – (1,002,890)
24 Financial risk management
Overview
The Group has exposure to the following risks from its use of financial instruments:
• credit risk
• liquidity risk
• foreign currency risk
• interest rate risk
• price risk
This note present information about the Group’s exposure to each of the above risks, the
Group’s objectives, policies and processes for measuring and managing risk, and the
Group’s management of capital. Further quantitative disclosures are included throughout
these financial statements.
APPENDIX A – AUDITED CONSOLIDATED FINANCIAL STATEMENTS FOR
THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012 AND 2013
A-54
Risk management framework
Risk management is integral to the whole business of the Group. The Group has a system
of controls in place to create an acceptable balance between the cost of risks occurring and
the cost of managing the risks. The management continually monitors the Group’s risk
management process to ensure that an appropriate balance between risk and control is
achieved. Risk management policies and systems are reviewed regularly to reflect changes
in market conditions and the Group’s activities.
The Board of Directors oversees how management monitors compliance with the Group’s
risk management policies and procedures and reviews the adequacy of the risk
management framework in relation to the risks faced by the Group.
Credit risk
The Group has a credit policy in place and exposure to credit risk is monitored on an
ongoing basis.
At the reporting date, other than bank balances which are placed with regulated financial
institutions and quoted debt securities managed by fund managers, there were no
significant concentrations of credit risk. The maximum exposure to credit risk is represented
by the carrying amount of each financial asset in the statement of financial position. The
maximum exposure to credit risk for trade and other receivables (excluding accrued
revenue) at the reporting date by type of counterparty was:
2011 2012 2013
$ $ $
Distributors 678,778 467,227 645,199
Retail customers 5,945,000 5,839,207 6,433,303
Others 1,992,455 2,043,447 1,778,304
8,616,233 8,349,881 8,856,806
The Group’s concentration of credit risk relating to trade and other receivables is limited
due to the Group’s many varied customers and the credit quality of its trade and other
receivables is within acceptable risk. The Group’s historical experience in the collection of
trade and other receivable falls within the recorded allowances. Due to these factors,
management believes that no additional credit risk beyond amounts provided for collection
losses is inherent in the Group’s trade and other receivables.
APPENDIX A – AUDITED CONSOLIDATED FINANCIAL STATEMENTS FOR
THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012 AND 2013
A-55
Impairment losses
The ageing of trade and other receivables (excluding accrued revenue) at the reporting date
was:
Gross
Impairment
losses Gross
Impairment
losses Gross
Impairment
losses
2011 2011 2012 2012 2013 2013
$ $ $ $ $ $
Not past due 7,971,698 – 7,651,956 – 8,038,218 –
Past due 0 – 30 days 91,879 – 113,390 – 181,149 –
Past due 31 – 120 days 36,078 – 32,215 – 56,867 –
Past due more than 120 days
but less than 1 year 45,417 – 34,280 – 41,037 –
Past due more than 1 year 474,949 (3,788) 524,443 (6,403) 553,795 (14,260)
8,620,021 (3,788) 8,356,284 (6,403) 8,871,066 (14,260)
The movement in the allowance for impairment losses in respect of trade and other
receivables during the year was as follows:
2011 2012 2013
$ $ $
At 1 January 46,807 3,788 6,403
Impairment losses recognised in the year 115 2,730 7,857
Reversal of impairment losses recognised
in prior years (17,834) (115) –
Amount written-off against allowance (25,300) – –
At 31 December 3,788 6,403 14,260
The trade and other receivables that are past due more than 1 year consist mainly of
commission and fee income significantly payable to third party financial advisers. The
Group’s maximum exposure will be the outstanding balance after the payable amount to
third party financial advisers.
The Group believes that, apart from the above, no additional impairment allowance is
required in respect of the remaining trade and other receivables as these amounts mainly
relate to customers with good credit and payment records with the Group.
Liquidity risk
The Group monitors its liquidity risk and maintains a level of cash and cash equivalents
deemed adequate by management to finance the Group’s operations and to mitigate the
effects of fluctuations in cash flows.
APPENDIX A – AUDITED CONSOLIDATED FINANCIAL STATEMENTS FOR
THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012 AND 2013
A-56
The following are contractual maturities of financial liabilities, including estimated interest
payments and excluding the impact of netting agreements:
Carrying
amounts
Contractual
cash flows
Within
1 year
Within
1 to 5 years
$ $ $ $
2011
Non-derivative financial
liabilities
Unsecured bank loan 2,030,797 2,114,840 1,354,221 760,619
Trade and other payables 11,410,926 11,410,926 11,410,926 –
13,441,723 13,525,766 12,765,147 760,619
2012
Non-derivative financial
liabilities
Unsecured bank loan 748,189 760,619 760,619 –
Trade and other payables 10,450,713 10,450,713 10,450,713 –
11,198,902 11,211,332 11,211,332 –
2013
Non-derivative financial
liabilities
Unsecured bank loan – – – –
Trade and other payables 13,188,757 13,188,757 12,835,357 353,400
13,188,757 13,188,757 12,835,357 353,400
Foreign currency risk
Exposure to foreign currency risk is insignificant as the Group’s incomes and expenses,
assets and liabilities are substantially denominated in the respective functional currencies
of Group entities. The exposure is monitored on an ongoing basis and the Group
endeavours to keep the net exposure at an acceptable level.
APPENDIX A – AUDITED CONSOLIDATED FINANCIAL STATEMENTS FOR
THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012 AND 2013
A-57
The Group’s exposures to foreign currency risk was as follows based on notional amounts:
US dollar Euro Pound
Australia
dollar
Chinese
yuan
$ $ $ $ $
31 December 2011
Cash and cash
equivalents 1,055,855 291,017 40,789 94,835 –
31 December 2012
Cash and cash
equivalents 908,603 177,751 43,850 94,184 75,555
31 December 2013
Cash and cash
equivalents 928,274 135,518 68,674 105,746 120,934
Sensitivity analysis
A 5% strengthening of Singapore dollar, as indicated below, against the following currencies
at 31 December would decrease profit or loss by the amounts shown below. This analysis
is based on foreign currency exchange rate variances that the Group considered to be
reasonably possible at the end of the reporting period. The analysis assumes that all other
variables, in particular interest rates, remain constant. The analysis is performed on the
same basis for 2011 and 2012.
Profit or loss
31 December
2011
31 December
2012
31 December
2013
$ $ $
US dollar 52,793 45,430 46,414
Euro 14,551 8,888 6,776
Pound 2,039 2,193 3,434
Australian dollar 4,742 4,709 5,287
Chinese yuan – 3,778 6,047
74,125 64,998 67,958
A 5% weakening of Singapore dollar against the above currencies at 31 December would
have had the equal but opposite effect on the above currencies to the amounts shown
above, on the basis that all other variables remain constant.
APPENDIX A – AUDITED CONSOLIDATED FINANCIAL STATEMENTS FOR
THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012 AND 2013
A-58
Interest rate risk
The Group’s exposure to changes in interest rates relates primarily to interest-bearing
financial assets and liabilities. Interest rate risk is managed by the Group on an ongoing
basis with the primary objective of limiting the extent to which interest income could be
impacted from an adverse movement in interest rates.
Sensitivity analysis for variable rate instruments
For interest-bearing financial instruments, a change of 15 basis points (bp) in interest rate
at the reporting date would increase/(decrease) profit or loss by the amounts shown below.
This analysis assumes that all other variables, in particular foreign currency rates, remain
constant. The analysis is performed on the same basis for 2011 and 2012.
31 December 2011 31 December 2012 31 December 2013
Profit or loss Profit or loss Profit or loss
15 bp
increase
15 bp
decrease
15 bp
increase
15 bp
decrease
15 bp
increase
15 bp
decrease
$ $ $ $ $ $
Cash and cash
equivalents 155,778 (62,311) 146,296 (78,024) 175,977 (93,854)
Price risk
The Group’s exposure to price risk relates to changes in the dealing price of unit trust and
Singapore government securities for unexecuted orders placed. The Group has established
procedures to detect such orders and to report such incidences to management. The
management has also taken up a professional indemnity insurance and the amount insured
is reviewed annually. The Group’s exposure to price risk also includes the risk that changes
in market prices will affect the Group’s income or the value of its holdings in investments in
debt/equity securities.
Sensitivity analysis – securities price risk
A 5% increase in the underlying security prices of the Group’s available-for-sale quoted
debt/equity securities at the reporting date would increase equity by $100,575 (2012:
$367,255; 2011: $400,610). This analysis assumes that all other variables remain constant.
A 5% decrease in the underlying security prices would have had the equal but opposite
effect to the amounts shown above, on the basis that all other variables remain constant.
Capital management
The primary objective of the Group’s capital management is to ensure that it maintains
healthy capital ratios in order to support its business and maximise shareholders value.
The Group manages its capital structure and makes alignment to it, in light of changes in
economic conditions. To maintain or adjust the capital structure, the Group may align the
dividend payment to shareholders, return capital to shareholders or issue new shares.
APPENDIX A – AUDITED CONSOLIDATED FINANCIAL STATEMENTS FOR
THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012 AND 2013
A-59
There were no changes in the Group’s approach to capital management during the year.
Some of the subsidiaries are required to maintain sufficient financial resources by the local
regulators in the respective jurisdictions in which they operate to ensure that the relevant
regulatory limits are complied with.
Determination of fair values
A number of the Group’s accounting policies and disclosures require the determination of
fair value for financial assets and liabilities. Fair values have been determined for
measurement and/or disclosure purposes based on the following methods. When
applicable, further information about the assumptions made in determining fair values is
disclosed in the notes specific to that asset or liability.
Investment in quoted debt/equity securities
The fair value of available-for-sale quoted debt/equity securities is determined by reference
to its bid price at the reporting date.
Intra-group financial guarantees
The value of financial guarantees provided by the Company to its subsidiaries is determined
by reference to the difference in the interest rates, by comparing the actual rates charged
by the bank with these guarantees made available, with the estimated rates that the banks
would have charged had these guarantees not been available.
Other financial assets and liabilities
The carrying amounts of financial assets and liabilities with a maturity of less than one year
(including trade and other receivables, cash and cash equivalents and trade and other
payables) are assumed to approximate their fair values because of the short period to
maturity. For unsecured bank loan, the fair value is calculated based on the present value
of future principal and interest cash flows, discounted at the market rate of interest at the
reporting date.
APPENDIX A – AUDITED CONSOLIDATED FINANCIAL STATEMENTS FOR
THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012 AND 2013
A-60
Fair values versus carrying amounts
The fair values of financial assets and liabilities, together with the amounts shown in the
statement of financial position, are as follows:
2011 2012 2013
Total
carrying
amount Fair value
Total
carrying
amount Fair value
Total
carrying
amount Fair value
$ $ $ $ $ $
Cash and cash
equivalents 12,587,410 12,587,410 13,516,229 13,516,229 16,718,909 16,718,909
Trade and other
receivables 15,315,940 15,315,940 14,652,693 14,652,693 16,763,911 16,763,911
Available-for-sale
financial assets
– quoted debt securities 7,960,706 7,960,706 7,345,097 7,345,097 2,011,502 2,011,502
– quoted equity
securities 51,496 51,496 – – – –
Other financial liabilities
within the scope of
FRS39 (13,441,723) (13,441,723) (11,198,902) (11,198,902) (13,188,757) (13,188,757)
Fair values hierarchy
The tables below analyse fair value measurements for financial assets and financial
liabilities, by the levels in the fair value hierarchy based on the inputs to valuation
techniques. The different levels are defined as follows:
• Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities.
• Level 2: inputs other than quoted prices included in Level 1 that are observable for the
asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).
• Level 3: inputs for the asset or liability that are not based on observable market data
(unobservable inputs).
APPENDIX A – AUDITED CONSOLIDATED FINANCIAL STATEMENTS FOR
THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012 AND 2013
A-61
Level 1 Level 2 Level 3 Total
$ $ $ $
Financial assets and financial liabilities carried at fair value
2011
Available-for-sale financial
assets:
– quoted debt securities 7,960,706 – – 7,960,706
– quoted equity securities 51,496 – – 51,496
8,012,202 – – 8,012,202
2012
Available-for-sale financial
assets:
– quoted debt securities 7,345,097 – – 7,345,097
2013
Available-for-sale financial
assets:
– quoted debt securities 2,011,502 – – 2,011,502
* Excludes financial assets and financial liabilities whose carrying amounts measured on the amortised cost
basis approximate their fair values due to their short-term nature and where the effect of discounting is
immaterial.
25 Commitments
As at the reporting dates, the Group have the following commitments:
(a) Future minimum lease payments in respect of non-cancellable operating leases are as
follows:
2011 2012 2013
$ $ $
Within 1 year 4,251,669 4,095,529 3,908,357
Within 2 to 5 years 13,536,613 9,791,121 5,283,689
After 5 years 565,439 – –
18,353,721 13,886,650 9,192,046
The Group leases a number of office premises under operating leases. The leases
typically run for initial period of three to six years, with an option to renew the lease
after that date.
APPENDIX A – AUDITED CONSOLIDATED FINANCIAL STATEMENTS FOR
THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012 AND 2013
A-62
(b) Capital expenditure in respect of plant and equipment are as follows:
2011 2012 2013
$ $ $
Contracted but not provided for 51,174 150,000 35,428
(c) Under regulatory requirements, some of the subsidiaries are required to maintain
sufficient capital to ensure that the relevant regulatory limits as set out by the
authorities are complied with. The Company has commitment to contribute additional
capital as and when the subsidiaries’ capital fall below the relevant regulatory limits.
26 Related parties
Key management personnel compensation
Compensation paid or payable to key management personnel comprise:
2011 2012 2013
$ $ $
Fees to non-executive directors 207,724 182,000 254,083
Remuneration paid or payable to key
management personnel
– short-term employment benefits 2,002,213 2,026,314 2,192,941
– shared-based payment 21,932 10,883 35,101
Directors and key management personnel also participate in the Company’s Share Option
Scheme. In 2013, 395,250 share options (2011 and 2012: nil) was granted to directors and
key management personnel of the Group. As at 31 December 2013, 531,420 (2012:
233,575; 2011: 281,075) of those share options were outstanding.
Other related party transactions
For the purpose of these financial statements, parties are considered to be related to the
Group if the Group entities have the ability, directly or indirectly, to control the party or
exercise significant influence over the party in making financial and operating decisions, or
vice versa, or where the Group entities are subject to common control or common
significant influence. Related parties may be individuals or entities.
Other than disclosed elsewhere in the financial statements, there were no other
transactions with the Group and related parties during the financial year.
APPENDIX A – AUDITED CONSOLIDATED FINANCIAL STATEMENTS FOR
THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012 AND 2013
A-63
27 Subsequent events
On 14 February 2014, a one-tier tax-exempt 2013 final dividend of 3.9 cents per share was
proposed by the Board of Directors. This one-tier tax-exempt dividend has not been
provided for.
On 7 March 2014, the Company entered into an agreement with RHB Investment Bank
Berhad to acquire the remaining interest in a subsidiary of the Group, iFAST-OSK Sdn. Bhd.
(“iFAST-OSK”), with cash consideration of RM 9,070,000. The acquisition was completed
on 18 July 2014. Following this transfer, iFAST-OSK has become a wholly-owned subsidiary
of the Company. With effect from 12 August 2014, its name has changed from iFAST-OSK
Sdn. Bhd. to iFAST Malaysia Sdn. Bhd..
On 20 June 2014, the Company entered into an agreement with Providend Holding Private
Limited (“Providend”) to acquire a 19.9% stake holding in Providend with cash
consideration of $400,157. The agreement also gives the Company a call option to
purchase a further 10.1% stake holding in Providend with cash consideration of $319,244
within two years from the completion of the first acquisition. The acquisition was completed
on 25 July 2014. Following this acquisition, Providend has become an associate of the
Company.
On 7 July 2014, iFAST Financial (HK) Limited, a subsidiary of the Company, incorporated
a wholly-owned subsidiary, iFAST Platform Services (Shenzhen) Qianhai Limited, in China.
On 28 April, 1 August and 1 September 2014, one-tier 2014 tax-exempt interim dividends
of 2.5 cents per share, 5.7 cents per share and 20.0 cents per share were proposed by the
Board of Directors on the respective dates. These dividends have not been provided for in
these financial statements.
On 14 November 2014, the Board of Directors of the Company approved for every 1
ordinary share in the issued and paid-up share capital of the Company be sub-divided into
6 ordinary shares in the capital of the Company. The sub-division was completed on 20
November 2014.
APPENDIX A – AUDITED CONSOLIDATED FINANCIAL STATEMENTS FOR
THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012 AND 2013
A-64
iFAST Corporation Ltd.
and its Subsidiaries
Registration Number: 200007899C
Interim Consolidated Financial Statements
For the nine months ended 30 September 2014
APPENDIX B – UNAUDITED INTERIM CONSOLIDATED FINANCIAL
STATEMENTS FOR THE NINE MONTHS ENDED 30 SEPTEMBER 2014
B-1
Independent auditors’ report on review of interim consolidated financial statements
The Board of Directors
iFAST Corporation Ltd. and its subsidiaries
Introduction
We have reviewed the accompanying consolidated statement of financial position of iFAST
Corporation Ltd. and its subsidiaries (the Group) as at 30 September 2014, the related
consolidated statement of profit or loss, statement of comprehensive income, changes in equity
and cash flows for the nine months then ended, and a summary of significant accounting policies
and other explanatory notes (the Interim Consolidated Financial Statements). Management is
responsible for the preparation and fair presentation of these Interim Consolidated Financial
Statements in accordance with Singapore Financial Reporting Standard (FRS) 34 Interim
Financial Reporting. Our responsibility is to express a conclusion on these Interim Consolidated
Financial Statements based on our review.
Scope of review
We conducted our review in accordance with Singapore Standard on Review Engagements 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 Consolidated Financial Statements do not present fairly, in all material
respects, the financial position of the Group as at 30 September 2014, and of its financial
performance and its cash flows for the nine months then ended in accordance with FRS 34 Interim
Financial Reporting.
APPENDIX B – UNAUDITED INTERIM CONSOLIDATED FINANCIAL
STATEMENTS FOR THE NINE MONTHS ENDED 30 SEPTEMBER 2014
B-2
Restriction on distribution and use
This report is made solely to you as a body and for the inclusion in the prospectus to be issued
in relation to the proposed offering of the shares of the Company in connection with the
Company’s listing on the Singapore Exchange Securities Trading Limited.
KPMG LLP
Public Accountants and
Chartered Accountants
Singapore
4 December 2014
Jeya Poh Wan S/O K. Suppiah
Partner
APPENDIX B – UNAUDITED INTERIM CONSOLIDATED FINANCIAL
STATEMENTS FOR THE NINE MONTHS ENDED 30 SEPTEMBER 2014
B-3
Consolidated statement of financial position
As at 30 September 2014
Note
30 September
2014
31 December
2013
$ $
Assets
Plant and equipment 4 1,726,598 1,633,848
Intangible assets 5 1,339,369 663,838
Associate 7 400,539 –
Deferred tax assets 14 21,618 34,559
Other investments 10 1,802,402 2,011,502
Club membership 8 11,429 11,429
Total non-current assets 5,301,955 4,355,176
Current tax receivable 29,935 5,489
Trade and other receivables 9 17,940,430 16,763,911
Prepayments 497,284 613,549
Cash at bank and in hand 11 15,148,947 16,292,523
Money market funds 11 36,267 426,386
Total current assets 33,652,863 34,101,858
Held under trust
Client bank accounts 12 121,552,395 100,599,080
Client ledger balances 12 (121,552,395) (100,599,080)
– –
Total assets 38,954,818 38,457,034
Equity
Share capital 13 11,379,244 10,670,001
Reserves 13 7,362,197 13,295,747
Equity attributable to owners of the Company 18,741,441 23,965,748
Non-controlling interests – 658,049
Total equity 18,741,441 24,623,797
Liabilities
Deferred tax liabilities 14 125,385 76,746
Other payables 15 176,700 353,400
Total non-current liabilities 302,085 430,146
Trade and other payables 15 19,536,373 12,835,357
Current tax payable 374,919 567,734
Total current liabilities 19,911,292 13,403,091
Total liabilities 20,213,377 13,833,237
Total equity and liabilities 38,954,818 38,457,034
The accompanying notes form an integral part of these interim financial statements.
APPENDIX B – UNAUDITED INTERIM CONSOLIDATED FINANCIAL
STATEMENTS FOR THE NINE MONTHS ENDED 30 SEPTEMBER 2014
B-4
Consolidated statement of profit or loss
For the nine months ended 30 September 2014
Note
1 January
2014 to
30 September
2014
1 January
2013 to
30 September
2013
$ $
Continuing operations
Revenue 16 58,594,961 52,686,167
Commission and fee paid or payable to third party
financial advisers (31,267,490) (29,176,269)
27,327,471 23,509,898
Other operating income 17 208,863 72,666
Depreciation of plant and equipment (579,825) (528,497)
Amortisation of intangible assets (143,920) (120,768)
Staff costs (11,249,735) (9,981,268)
Other operating expenses (7,679,447) (7,021,579)
Results from operating activities 7,883,407 5,930,452
Finance income 73,980 30,675
Finance expense – (10,376)
Net finance income 73,980 20,299
Share of result of associate, net of tax 7 382 –
Profit before tax 7,957,769 5,950,751
Tax expense 19 (380,566) (550,144)
Profit from continuing operations 7,577,203 5,400,607
Discontinued operation
Loss from discontinued operation, net of tax 20 – (635,022)
Profit for the period 18 7,577,203 4,765,585
Profit attributable to:
Owners of the Company from continuing operations 7,614,892 5,594,547
Owners of the Company from discontinued operation – (196,293)
Non-controlling interests from continuing operations (37,689) (193,940)
Non-controlling interests from discontinued operation – (438,729)
Profit for the period 7,577,203 4,765,585
Earnings per share from continuing operations
Basic earnings per share (cents) 22 3.7 2.8
Diluted earnings per share (cents) 22 3.6 2.7
Earnings per share
Basic earnings per share (cents) 22 3.7 2.7
Diluted earnings per share (cents) 22 3.6 2.6
The accompanying notes form an integral part of these interim financial statements.
APPENDIX B – UNAUDITED INTERIM CONSOLIDATED FINANCIAL
STATEMENTS FOR THE NINE MONTHS ENDED 30 SEPTEMBER 2014
B-5
Consolidated statement of comprehensive income
For the nine months ended 30 September 2014
Note
1 January
2014 to
30 September
2014
1 January
2013 to
30 September
2013
$ $
Profit for the period 7,577,203 4,765,585
Other comprehensive income
Items that are or may be reclassified
subsequently to profit or loss:
Net change in fair value of available-for-sale
financial assets 76,990 215,349
Net change in fair value of available-for-sale
financial assets reclassified to profit or loss (99,464) (656,056)
Foreign currency translation differences for foreign
operations 63,073 (347,088)
Other comprehensive income for the period,
net of tax 40,599 (787,795)
Total comprehensive income for the period 7,617,802 3,977,790
Attributable to:
Owners of the Company 7,650,152 5,019,189
Non-controlling interests (32,350) (1,041,399)
Total comprehensive income for the period 7,617,802 3,977,790
Attributable to:
Owners of the Company
Total comprehensive income from continuing
operations, net of tax 7,650,152 5,625,459
Total comprehensive income from discontinued
operation, net of tax – (606,270)
Total comprehensive income for the period
attributable to owners of the Company 7,650,152 5,019,189
The accompanying notes form an integral part of these interim financial statements.
APPENDIX B – UNAUDITED INTERIM CONSOLIDATED FINANCIAL
STATEMENTS FOR THE NINE MONTHS ENDED 30 SEPTEMBER 2014
B-6
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B-10
Consolidated statement of cash flows
For the nine months ended 30 September 2014
Note
1 January
2014 to
30 September
2014
1 January
2013 to
30 September
2013
$ $
Cash flows from operating activities
Profit for the period 7,577,203 4,765,585
Adjustments for:
Depreciation of plant and equipment 4 579,825 568,674
Gain on disposal of plant and equipment (39) –
Amortisation of intangible assets 5 143,920 211,356
Impairment losses on trade receivables, net 2,818 5,448
Bad debt written off 35,452 2,073
Equity settled share-based payment transactions 248,016 13,111
Dividend income on available-for-sale quoted debt
securities, net (16,753) (16,256)
Gain on redemption of quoted debt securities (99,464) (656,056)
Share of result of associate (382) –
Dividend income on investment in associate (3,727) –
Unrealised exchange loss, net 35,409 10,669
Finance income (73,980) (30,675)
Finance expense – 10,376
Tax expense 380,566 550,144
8,808,864 5,434,449
Change in trade and other receivables (1,516,664) (1,323,966)
Change in trade and other payables 306,124 1,848,661
Cash generated from operations 7,598,324 5,959,144
Taxes paid (536,238) (628,620)
Interest received 73,980 30,675
Interest paid – (10,376)
Net cash from operating activities 7,136,066 5,350,823
Cash flows from investing activities
Purchase of plant and equipment (670,191) (608,017)
Purchase of intangible assets (995,730) (67,000)
Proceeds from disposal of plant and equipment 39 333
Acquisition of associate 7 (400,157) –
Proceeds from redemption of quoted debt securities 3,302,844 3,625,167
Purchase of available-for-sale quoted debt securities (3,000,000) (2,065,906)
Net cash (used in)/from investing activities (1,763,195) 884,577
The accompanying notes form an integral part of these interim financial statements.
APPENDIX B – UNAUDITED INTERIM CONSOLIDATED FINANCIAL
STATEMENTS FOR THE NINE MONTHS ENDED 30 SEPTEMBER 2014
B-11
Consolidated statement of cash flows
For the nine months ended 30 September 2014 (cont’d)
Note
1 January
2014 to
30 September
2014
1 January
2013 to
30 September
2013
$ $
Cash flows from financing activities
Dividends paid to owners of the Company (4,104,141) (2,040,534)
Proceeds from exercise of share options 709,243 315,474
Payment on acquisition of additional interests in
subsidiaries 6 (3,539,098) –
Repayment of unsecured bank loan – (748,189)
Net cash used in financing activities (6,933,996) (2,473,249)
Net (decrease)/increase in cash and cash equivalents (1,561,125) 3,762,151
Cash and cash equivalents at 1 January 16,718,909 13,516,229
Effect of exchange rate fluctuations on cash held 27,430 (22,287)
Cash and cash equivalents at 30 September 11 15,185,214 17,256,093
The accompanying notes form an integral part of these interim financial statements.
APPENDIX B – UNAUDITED INTERIM CONSOLIDATED FINANCIAL
STATEMENTS FOR THE NINE MONTHS ENDED 30 SEPTEMBER 2014
B-12
Notes to the interim financial statements
These notes form an integral part of the interim financial statements.
The interim financial statements were authorised for issue by the Board of Directors on
4 December 2014.
1 Domicile and activities
iFAST Corporation Ltd. (the Company) is incorporated in the Republic of Singapore and has
its registered office at 10 Collyer Quay, #26-01 Ocean Financial Centre Building, Singapore
049315. The Company changed its name to iFAST Corporation Ltd. upon its conversion to
a public company on 18 November 2014.
The interim financial statements relate to the Company and its subsidiaries (together
referred to as the Group).
The principal activities of the Group are those relating to investment holding, development
of software, marketing of unit trusts and Singapore government securities through websites
and acting as an investment advisor, dealer and custodian in respect to unit trusts and
Singapore government securities.
2 Basis of preparation
2.1 Statement of compliance
The financial statements have been prepared in accordance with Singapore Financial
Reporting Standards (FRS).
2.2 Basis of measurement
The financial statements have been prepared on the historical cost basis except as
otherwise described in the notes below.
2.3 Functional and presentation currency
These financial statements are presented in Singapore dollars which is the Company’s
functional currency.
2.4 Use of estimates and judgements
The preparation of the financial statements in conformity with FRSs requires management
to make judgements, estimates and assumptions that affect the application of accounting
policies and the reported amounts of assets, liabilities, income and expenses. Actual results
may differ from these estimates.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to
accounting estimates are recognised in the period in which the estimates are revised and
in any future periods affected.
APPENDIX B – UNAUDITED INTERIM CONSOLIDATED FINANCIAL
STATEMENTS FOR THE NINE MONTHS ENDED 30 SEPTEMBER 2014
B-13
In particular, information about assumptions and estimation uncertainties that have a
significant risk of resulting in a material adjustment within the next financial period are
included in Note 21 – share options.
Measurement of fair values
A number of the Group’s accounting policies and disclosures require the measurement of
fair values, for both financial and non-financial assets and liabilities.
The Group has an established control framework with respect to the measurement of fair
values. When measuring the fair value of an asset or a liability, the Group uses market
observable data as far as possible. Fair values are categorised into different levels in a fair
value hierarchy based on the inputs used in the valuation techniques as follows:
• Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities.
• Level 2: inputs other than quoted prices included in Level 1 that are observable for the
asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).
• Level 3: inputs for the asset or liability that are not based on observable market data
(unobservable inputs).
If the inputs used to measure the fair value of an asset or a liability might be categorised
in different levels of the fair value hierarchy, then the fair value measurement is categorised
in its entirety in the same level of the fair value hierarchy as the lowest level input that is
significant to the entire measurement (with Level 3 being the lowest).
The Group recognises transfers between levels of the fair value hierarchy as of the end of
the reporting period during which the change has occurred.
Further information about the assumptions made in measuring fair values is included in
Note 24 – financial risk management.
2.5 Changes in accounting policies
(i) Subsidiaries
As a result of FRS 110 Consolidated Financial Statements, the Group has changed its
accounting policy for determining whether it has control over and consequently whether it
consolidates it investees. FRS 110 introduces a new control model that focuses on whether
the Group has power over the investee, exposure or rights to variable returns from its
involvement with the investee and ability to use its power to affect those returns.
(ii) Disclosure of interests in other entities
From 1 January 2014, as a result of FRS 112 Disclosure of Interests in Other Entities, the
Group has expanded its disclosures about its interests in subsidiaries and associate.
APPENDIX B – UNAUDITED INTERIM CONSOLIDATED FINANCIAL
STATEMENTS FOR THE NINE MONTHS ENDED 30 SEPTEMBER 2014
B-14
(iii) Offsetting of financial assets and financial liabilities
Under the Amendments to FRS 32 Financial Instruments: Presentation – Offsetting
Financial Assets and Financial Liabilities, to qualify for offsetting, the right to set off a
financial asset and a financial liability must not be contingent on a future event and must be
enforceable both in the normal course of business and in the event of default, insolvency or
bankruptcy of the entity and all counterparties.
The adoption of these standards and amendments has no significant effect on the
consolidated financial statements of the Group.
3 Significant accounting policies
The accounting policies set out below have been applied consistently to all periods
presented in these financial statements, and have been applied consistently by Group
entities, except as explained in note 2.5, which addresses changes in accounting policies.
3.1 Basis of consolidation
(i) Business combinations
Business combinations are accounted for using the acquisition method in accordance with
FRS 103 Business Combination as at the acquisition date, which is the date on which
control is transferred to the Group.
The Group measures goodwill at the acquisition date as:
• the fair value of the consideration transferred; plus
• the recognised amount of any non-controlling interests (NCI) in the acquiree; plus
• if the business combination is achieved in stages, the fair value of the pre-existing
equity interest in the acquiree,
over the net recognised amount (generally fair value) of the identifiable assets acquired and
liabilities assumed. Any goodwill that arises is tested annually for impairment.
When the excess is negative, a bargain purchase gain is recognised immediately in profit
or loss.
The consideration transferred does not include amounts related to the settlement of
pre-existing relationships. Such amounts are generally recognised in profit or loss.
Any contingent consideration payable is recognised at fair value at the acquisition date and
included in the consideration transferred. If the contingent consideration is classified as
equity, it is not remeasured and settlement is accounted for within equity. Otherwise,
subsequent changes to the fair value of the contingent consideration are recognised in profit
or loss.
APPENDIX B – UNAUDITED INTERIM CONSOLIDATED FINANCIAL
STATEMENTS FOR THE NINE MONTHS ENDED 30 SEPTEMBER 2014
B-15
When share-based payment awards (replacement awards) are exchanged for awards held
by the acquiree’s employees (acquiree’s awards) and relate to past services, then all or a
portion of the amount of the acquirer’s replacement awards is included in measuring the
consideration transferred in the business combination. This determination is based on the
market-based value of the replacement awards compared with the market-based value of
the acquiree’s awards and the extent to which the replacement awards relate to past and/or
future service.
NCI that are present ownership interests and entitle their holders to a proportionate share
of the acquiree’s net assets in the event of liquidation are measured at fair value or at the
NCI’s proportionate share of the recognised amounts of the acquiree’s identifiable net
assets, at the acquisition date. All other NCI are measured at acquisition-date fair value,
unless another measurement basis is required by FRSs.
Costs related to the acquisition, other than those associated with the issue of debt or equity
securities, that the Group incurs in connection with a business combination are expensed
as incurred.
Changes in the Group’s interest in a subsidiary that do not result in a loss of control are
accounted for as transactions with owners in their capacity as owners and therefore no
adjustments are made to goodwill and no gain or loss is recognised in profit or loss.
Adjustments to NCI arising from transactions that do not involve the loss of control are
based on a proportionate amount of the net assets of the subsidiary.
(ii) Subsidiaries
Subsidiaries are entities controlled by the Group. The Group controls an entity when it is
exposed to, or has rights to, variable returns from its involvement with the entity and has the
ability to affect those returns through its power over the entity. The financial statements of
subsidiaries are included in the consolidated financial statements from the date that control
commences until the date that control ceases.
The accounting policies of subsidiaries have been changed when necessary to align them
with the policies adopted by the Group. Losses applicable to the NCI in a subsidiary are
allocated to the NCI even if doing so causes the NCI to have a deficit balance.
(iii) Loss of control
Upon the loss of control, the Group derecognises the assets and liabilities of the subsidiary,
any NCI and the other components of equity related to the subsidiary. Any surplus or deficit
arising on the loss of control is recognised in profit or loss. If the Group retains any interest
in the previous subsidiary, then such interest is measured at fair value at the date that
control is lost. Subsequently, it is accounted for as an equity-accounted investee or as an
available-for-sale financial asset depending on the level of influence retained.
(iv) Investment in associate (equity-accounted investee)
Associate is an entity in which the Group has significant influence, but not control or joint
control, over the financial and operating policies of this entity. Significant influence is
presumed to exist when the Group holds 20% or more of the voting power of another entity.
APPENDIX B – UNAUDITED INTERIM CONSOLIDATED FINANCIAL
STATEMENTS FOR THE NINE MONTHS ENDED 30 SEPTEMBER 2014
B-16
Investment in associate is accounted for using the equity method. They are recognised
initially at cost, which includes transaction costs. Subsequent to initial recognition, the
consolidated financial statements include the Group’s share of the profit or loss and other
comprehensive income of equity-accounted investee, after adjustments to align the
accounting policies with those of the Group, from the date that significant influence or joint
control commences until the date that significant influence ceases.
When the Group’s share of losses exceeds its interest in an equity-accounted investee, the
carrying amount of the investment, together with any long-term interests that form part
thereof, is reduced to zero, and the recognition of further losses is discontinued except to
the extent that the Group has an obligation to fund the investee’s operations or has made
payments on behalf of the investee.
(v) Transactions eliminated on consolidation
Intra-group balances and transactions, and any unrealised income or expenses arising from
intra-group transactions, are eliminated in preparing the consolidated financial statements.
Unrealised gains arising from transactions with equity-accounted investee are eliminated
against the investment to the extent of the Group’s interest in the investee. Unrealised
losses are eliminated in the same way as unrealised gains, but only to the extent that there
is no evidence of impairment.
3.2 Foreign currency
(i) Foreign currency transactions
Transactions in foreign currencies are translated to the respective functional currencies of
the Group entities at exchange rates at the dates of the transactions. Monetary assets and
liabilities denominated in foreign currencies at the end of the reporting period are
retranslated to the functional currency at the exchange rate at that date. The foreign
currency gain or loss on monetary items is the difference between amortised cost in the
functional currency at the beginning of the year, adjusted for effective interest and payments
during the year, and the amortised cost in foreign currency translated at the exchange rate
at the end of the year.
Non-monetary assets and liabilities denominated in foreign currencies that are measured at
fair value are retranslated to the functional currency at the exchange rate at the date that
the fair value was determined. Non-monetary items in a foreign currency that are measured
in terms of historical cost are translated using the exchange rate at the date of the
transaction. Foreign currency differences arising on retranslation are recognised in profit or
loss, except for the differences arising on the retranslation of available-for-sale equity
instruments (except on impairment in which case foreign currency differences that have
been recognised in other comprehensive income are reclassified to profit or loss), which are
recognised in other comprehensive income.
APPENDIX B – UNAUDITED INTERIM CONSOLIDATED FINANCIAL
STATEMENTS FOR THE NINE MONTHS ENDED 30 SEPTEMBER 2014
B-17
(ii) Foreign operations
The assets and liabilities of foreign operations, excluding goodwill and fair value
adjustments arising on acquisition, are translated to Singapore dollars at exchange rates at
the reporting date. The income and expenses of foreign operations are translated to
Singapore dollars at exchange rates at the dates of the transactions. Goodwill and fair value
adjustments arising on the acquisition of a foreign operation on or after 1 January 2005 are
treated as assets and liabilities of the foreign operation and translated at the reporting rate.
For acquisitions prior to 1 January 2005, the exchange rates at the date of acquisition were
used.
Foreign currency differences are recognised in other comprehensive income, and
presented in the foreign currency translation reserve (translation reserve) in equity.
However, if the operation is a non-wholly-owned subsidiary, then the relevant proportionate
share of the translation difference is allocated to the NCI. When a foreign operation is
disposed of such that control is lost, the cumulative amount in the translation reserve
related to that foreign operation is reclassified to profit or loss as part of the gain or loss on
disposal. When the Group disposes of only part of its interest in a subsidiary that includes
a foreign operation while retaining control, the relevant proportion of the cumulative amount
is reattributed to NCI.
When the settlement of a monetary item receivable from or payable to a foreign operation
is neither planned nor likely in the foreseeable future, foreign exchange gains and losses
arising from such a monetary item are considered to form part of a net investment in a
foreign operation. These are recognised in other comprehensive income, and are presented
in the translation reserve in equity.
3.3 Plant and equipment
(i) Recognition and measurement
Items of plant and equipment are measured at cost less accumulated depreciation and
accumulated impairment losses.
Cost includes expenditure that is directly attributable to the acquisition of the asset. The
cost of self-constructed assets includes the cost of materials and direct labour, any other
costs directly attributable to bringing the asset to a working condition for its intended use,
and the cost of dismantling and removing the items and restoring the site on which they are
located and capitalised borrowing costs. Cost also may include transfers from other
comprehensive income of any gain or loss on qualifying cash flow hedges of foreign
currency purchases of plant and equipment. Purchased software that is integral to the
functionality of the related equipment is capitalised as part of that equipment.
When parts of an item of plant and equipment have different useful lives, they are accounted
for as separate items (major components) of plant and equipment.
The gain or loss on disposal of an item of plant and equipment (calculated as the difference
between the net proceeds from disposal and the carrying amount of the item) is recognised
net within other income/other expense in profit or loss.
APPENDIX B – UNAUDITED INTERIM CONSOLIDATED FINANCIAL
STATEMENTS FOR THE NINE MONTHS ENDED 30 SEPTEMBER 2014
B-18
(ii) Subsequent costs
The cost of replacing a component of an item of plant and equipment is recognised in the
carrying amount of the item if it is probable that the future economic benefits embodied
within the component will flow to the Group and its cost can be measured reliably. The
carrying amount of the replaced component is derecognised. The costs of the day-to-day
servicing of plant and equipment are recognised in profit or loss as incurred.
(iii) Depreciation
Depreciation is based on the cost of an asset, less its residual value. Significant
components of individual assets are assessed and if a component has a useful life that is
different from the remainder of that asset, that component is depreciated separately.
Depreciation is recognised as an expense in profit or loss on a straight-line basis over the
estimated useful lives of each component of an item of plant and equipment. Leased assets
are depreciated over the shorter of the lease term and their useful lives unless it is
reasonably certain that the Group will obtain ownership by the end of the lease term.
The estimated useful lives for the current and comparative periods are as follows:
Computer equipment 3 years
Office equipment 5 years
Furniture and fittings 5 years
Office renovation 5 years or based on lease term
Depreciation methods, useful lives and residual values are reviewed at the end of each
reporting period and adjusted if appropriate.
3.4 Intangible assets
Development costs
Development activities involve a plan or design for the production of new or substantially
improved products and processes. Development expenditure is capitalised only if
development costs can be measured reliably, the product or process is technically and
commercially feasible, future economic benefits are probable, and the Group intends to and
has sufficient resources to complete development and to use or sell the asset. The
expenditure capitalised includes the cost of materials, direct labour and costs that are
directly attributable to creating, producing and preparing the assets for its intended use.
Other development expenditure is recognised in profit or loss as incurred.
Capitalised development expenditure is measured at cost less accumulated amortisation
and impairment losses. Amortisation is recognised in profit or loss on a straight-line basis
over the estimated useful lives of 3 years. Development costs are amortised from the date
the development has been completed.
APPENDIX B – UNAUDITED INTERIM CONSOLIDATED FINANCIAL
STATEMENTS FOR THE NINE MONTHS ENDED 30 SEPTEMBER 2014
B-19
Computer software
Computer software that are acquired by the Group and not integral to the functionality of the
equipment, which have finite useful lives, are measured at cost less accumulated
amortisation and impairment losses. Computer software are amortised in profit or loss on a
straight-line basis over their estimated useful lives of 3 years, from the date on which they
are available for use.
Intellectual properties
Intellectual properties that are acquired by the Group, which have finite useful lives, are
measured at cost less accumulated amortisation and impairment losses. Intellectual
properties are amortised in profit or loss on a straight-line basis over their estimated useful
lives of 5 years, from the date on which they are available for use.
Customer lists
Customer lists that are acquired by the Group and have finite useful lives are measured at
cost less accumulated amortisation and accumulated impairment losses. Customer lists are
amortised in profit or loss on a straight-line basis over their estimated useful lives of 5 years,
from the date the acquisition has been completed.
The above amortisation methods, useful lives and residual values are reviewed at the end
of each reporting period and adjusted if appropriate.
3.5 Club membership
Club membership is stated at cost less impairment losses.
3.6 Financial instruments
(i) Non-derivative financial assets
The Group initially recognises loans and receivables and deposits on the date that they are
originated. All other financial assets are recognised initially on the trade date, which is the
date that the Group becomes a party to the contractual provisions of the instrument.
The Group derecognises a financial asset when the contractual rights to the cash flows from
the asset expire, or it transfers the rights to receive the contractual cash flows on the
financial asset in a transaction in which substantially all the risks and rewards of ownership
of the financial asset are transferred. Any interest in transferred financial assets that is
created or retained by the Group is recognised as a separate asset or liability.
Financial assets and liabilities are offset and the net amount presented in the statement of
financial position when, and only when, the Group has a legal right to offset the amounts
and intends either to settle on a net basis or to realise the asset and settle the liability
simultaneously.
The Group classifies non-derivative financial assets into the following category: loans and
receivables and available-for-sale financial assets.
APPENDIX B – UNAUDITED INTERIM CONSOLIDATED FINANCIAL
STATEMENTS FOR THE NINE MONTHS ENDED 30 SEPTEMBER 2014
B-20
Loans and receivables
Loans and receivables are financial assets with fixed or determinable payments that are not
quoted in an active market. Such assets are recognised initially at fair value plus any
directly attributable transaction costs. Subsequent to initial recognition, loans and
receivables are measured at amortised cost using the effective interest method, less any
impairment losses.
Loans and receivables comprise cash and cash equivalents and trade and other
receivables.
Cash and cash equivalents
Cash and cash equivalents comprise cash balances, bank deposits and money market
funds.
Available-for-sale financial assets
Available-for-sale financial assets are non-derivative financial assets that are designated as
available for sale or are not classified in any of the above categories of financial assets.
Available-for-sale financial assets are recognised initially at fair value plus any directly
attributable transaction costs. Subsequent to initial recognition, they are measured at fair
value and changes therein, other than impairment losses and foreign currency differences
on available-for-sale debt financial instruments, are recognised in other comprehensive
income and presented in the fair value reserve in equity. When an investment is
derecognised, the gain or loss accumulated in equity is reclassified to profit or loss.
Available-for-sale financial assets comprise quoted debt securities.
(ii) Non-derivative financial liabilities
All financial liabilities are recognised initially on the trade date, which is the date that the
Group becomes a party to the contractual provisions of the instrument.
The Group derecognises a financial liability when its contractual obligations are discharged,
cancelled or expire.
Financial assets and liabilities are offset and the net amount presented in the statement of
financial position when, and only when, the Group has a legal right to offset the amounts
and intends either to settle on a net basis or to realise the asset and settle the liability
simultaneously.
The Group classifies non-derivative financial liabilities into the other financial liabilities
category. Such financial liabilities are recognised initially at fair value plus any directly
attributable transaction costs. Subsequent to initial recognition, these financial liabilities are
measured at amortised cost using the effective interest method.
Other financial liabilities comprise trade and other payables.
APPENDIX B – UNAUDITED INTERIM CONSOLIDATED FINANCIAL
STATEMENTS FOR THE NINE MONTHS ENDED 30 SEPTEMBER 2014
B-21
(iii) Share capital
Ordinary shares
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue
of ordinary shares are recognised as a deduction from equity, net of any tax effects.
Distribution of non-cash assets to owners of the Company
The Group measures a liability to distribute non-cash assets as a dividend to the owners of
the Company at the fair value of the assets to be distributed. The carrying amount of the
dividend is remeasured at each reporting date and at the settlement date, with any changes
recognised directly in equity as adjustments to the amount of the distribution. On settlement
of the transaction, the Group recognises the difference, if any, between the carrying amount
of the assets distributed and the carrying amount of the liability in profit or loss.
(iv) Intra-group financial guarantees in the separate financial statements
Financial guarantees are financial instruments issued by the Company that requires the
issuer to make specified payments to reimburse the holder for the loss it incurs because a
specified debtor fails to meet payment when due in accordance with the original or modified
terms of a debt instrument.
Financial guarantees are recognised initially at fair value and are classified as financial
liabilities. Subsequent to initial measurement, the financial guarantees are stated at the
higher of the initial fair value less cumulative amortisation and the amount that would be
recognised if they were accounted for as contingent liabilities. When financial guarantees
are terminated before their original expiry date, the carrying amount of the financial
guarantees is transferred to profit or loss.
3.7 Impairment
(i) Non-derivative financial assets
A financial asset not carried at fair value through profit or loss is assessed at the end of each
reporting period to determine whether there is objective evidence that it is impaired. A
financial asset is impaired if objective evidence indicates that a loss event has occurred
after the initial recognition of the asset, and that the loss event has a negative effect on the
estimated future cash flows of that asset that can be estimated reliably.
Objective evidence that financial assets (including equity securities) are impaired can
include default or delinquency by a debtor, restructuring of an amount due to the Group on
terms that the Group would not consider otherwise, indications that a debtor or issuer will
enter bankruptcy, adverse changes in the payment status of borrowers or issuers in the
group, economic conditions that correlate with defaults or the disappearance of an active
market for a security. In addition, for an investment in an equity security, a significant or
prolonged decline in its fair value below its cost is objective evidence of impairment.
APPENDIX B – UNAUDITED INTERIM CONSOLIDATED FINANCIAL
STATEMENTS FOR THE NINE MONTHS ENDED 30 SEPTEMBER 2014
B-22
Loans and receivables
The Group considers evidence of impairment for loans and receivables at both a specific
asset and collective level. All individually significant loans and receivables are assessed for
specific impairment. All individually significant receivables found not to be specifically
impaired are then collectively assessed for any impairment that has been incurred but not
yet identified. Loans and receivables that are not individually significant are collectively
assessed for impairment by grouping together loans and receivables with similar risk
characteristics.
In assessing collective impairment, the Group uses historical trends of the probability of
default, the timing of recoveries and the amount of loss incurred, adjusted for
management’s judgement as to whether current economic and credit conditions are such
that the actual losses are likely to be greater or less than suggested by historical trends.
An impairment loss in respect of a financial asset measured at amortised cost is calculated
as the difference between its carrying amount and the present value of the estimated future
cash flows discounted at the asset’s original effective interest rate. Losses are recognised
in profit or loss and reflected in an allowance account against loans and receivables.
Interest on the impaired asset continues to be recognised. When the Group considers that
there are no realistic prospects of recovery of the asset, the relevant amounts are written
off. If the amount of impairment loss subsequently decreases and the decrease can be
related objectively to an event occurring after the impairment was recognised, then the
previously recognised impairment loss is reversed through profit or loss.
Available-for-sale financial assets
Impairment losses on available-for-sale financial assets are recognised by reclassifying the
losses accumulated in the fair value reserve in equity to profit or loss. The cumulative loss
that is reclassified from equity to profit or loss is the difference between the acquisition cost,
net of any principal repayment and amortisation, and the current fair value, less any
impairment loss recognised previously in profit or loss. Changes in cumulative impairment
provisions attributable to application of the effective interest method are reflected as a
component of interest income.
If, in a subsequent period, the fair value of an impaired available-for-sale debt security
increases and the increase can be related objectively to an event occurring after the
impairment loss was recognised, then the impairment loss is reversed. The amount of the
reversal is recognised in profit or loss. However, any subsequent recovery in the fair value
of an impaired available-for-sale equity security is recognised in other comprehensive
income.
Associate
An impairment loss in respect of an associate is measured by comparing the recoverable
amount of the investment with its carrying amount in accordance with Note 3.7(ii). An
impairment loss is recognised in profit or loss. An impairment loss is reversed if there has
been a favourable change in the estimates used to determine the recoverable amount.
APPENDIX B – UNAUDITED INTERIM CONSOLIDATED FINANCIAL
STATEMENTS FOR THE NINE MONTHS ENDED 30 SEPTEMBER 2014
B-23
(ii) Non-financial assets
The carrying amounts of the Group’s non-financial assets are reviewed at each reporting
date to determine whether there is any indication of impairment. If any such indication
exists, then the asset’s recoverable amount is estimated. For intangible assets that have
indefinite useful lives or that are not yet available for use, the recoverable amount is
estimated each year at the same time. An impairment loss is recognised if the carrying
amount of an asset or its related cash-generating unit (CGU) exceeds its estimated
recoverable amount.
The recoverable amount of an asset or CGU is the greater of its value in use and its fair
value less costs to sell. 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 or CGU. For the
purpose of impairment testing, assets that cannot be tested individually are grouped
together into the smallest group of assets that generates cash inflows from continuing use
that are largely independent of the cash inflows of other assets or CGU.
Impairment losses are recognised in profit or loss. Impairment losses recognised in respect
of CGUs are allocated first to reduce the carrying amount of any goodwill allocated to the
CGU (group of CGUs), and then to reduce the carrying amounts of the other assets in the
CGU (group of CGUs) on a pro rata basis.
Impairment losses recognised in prior periods are assessed at each reporting date for any
indications that the loss has decreased or no longer exists. An impairment loss is reversed
if there has been a change in the estimates used to determine the recoverable amount. 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.
3.8 Leases
Where the Group has the use of assets under operating leases, payments made under the
leases are recognised in profit or loss on a straight-line basis over the term of the lease.
Lease incentives received are recognised in profit or loss as an integral part of the total
lease expense, over the term of the lease.
Contingent lease payments are accounted for by revising the minimum lease payments over
the remaining term of the lease when the lease adjustment is confirmed.
3.9 Employee benefits
Defined contribution plans
A defined contribution plan is a post-employment benefit plan under which an entity pays
fixed contributions into a separate entity and will have no legal or constructive obligation to
pay further amounts. Obligations for contributions to defined contribution pension plans are
recognised as an employee benefit expense in profit or loss in the periods during which
services are rendered by employees.
APPENDIX B – UNAUDITED INTERIM CONSOLIDATED FINANCIAL
STATEMENTS FOR THE NINE MONTHS ENDED 30 SEPTEMBER 2014
B-24
Short-term employee benefits
Short-term employee benefit obligations are measured on an undiscounted basis and are
expensed as the related service is provided. These include salaries, annual bonuses and
paid annual leave.
A liability is recognised for the amount expected to be paid under short-term cash bonus or
profit-sharing plans if the Group has a present legal or constructive obligation to pay this
amount as a result of past service provided by the employee, and the obligation can be
estimated reliably.
Employee leave entitlements
Employee entitlements to annual leave are recognised when they accrue to employees. A
provision is made for the estimated liability for annual leave as a result of service rendered
by employees up to the reporting date.
Share-based payment transactions
The share option programme allows directors and executives to acquire shares of the
Company. The fair value of options granted is recognised as an employee expense, with a
corresponding increase in equity. The fair value is measured at grant date and spread over
the vesting period during which the employees become unconditionally entitled to the
options. At each reporting date, the Company revises its estimates of the number of options
that are expected to become exercisable. It recognises the impact of the revision of original
estimates in employee expense and in a corresponding adjustment to equity over the
remaining vesting period. The proceeds received net of any directly attributable
transactions costs are credited to share capital when the options are exercised.
3.10 Provisions
A provision is recognised if, as a result of a past event, the Group has a present legal or
constructive obligation that can be estimated reliably, and it is probable that an outflow of
economic benefits will be required to settle the obligation. Provisions are determined by
discounting the expected future cash flows at a pre-tax rate that reflects current market
assessments of the time value of money and the risks specific to the liability. The unwinding
of the discount is recognised as finance cost.
3.11 Revenue recognition
Revenue represents advertising fees, commission and fee income, service fees, income
from sale of magazines and software licences fees.
Advertising revenue, which is earned in the form of upfront and variable payments, is
deferred and recognised over the period to which the contract relates.
Commission and fee income and service fees are recognised on the completion of services
rendered.
Magazine sales and software licence revenue are recognised when the significant risks and
rewards of ownership have been transferred to the buyer.
APPENDIX B – UNAUDITED INTERIM CONSOLIDATED FINANCIAL
STATEMENTS FOR THE NINE MONTHS ENDED 30 SEPTEMBER 2014
B-25
3.12 Government grants
Government grants are recognised initially as deferred income at fair value when there is
reasonable assurance that they will be received and the Group will comply with the
conditions associated with the grant. Grants that compensate the Group for expenses
incurred are recognised in profit or loss as revenue on a systematic basis in the same
periods in which the expenses are recognised.
SME Cash Grant
Cash grants received from the government in relation to the SME Cash Grant are
recognised as income upon receipt.
3.13 Finance income and finance costs
Finance income comprises interest income from money market funds, bank deposits and
client’s bank account. Interest income is recognised as it accrues in profit or loss, using the
effective interest method. Finance costs comprise interest expense on borrowings which is
recognised in profit and loss using the effective interest method.
3.14 Tax
Tax expense comprises current and deferred tax. Current tax and deferred tax are
recognised in profit or loss except to the extent that it relates to a business combination, or
items recognised directly in equity or in other comprehensive income.
Current tax is the expected tax payable or receivable on the taxable income or loss for the
year, using tax rates enacted or substantively enacted at the reporting date, and any
adjustment to tax payable in respect of previous years.
Deferred tax is recognised in respect of temporary differences between the carrying
amounts of assets and liabilities for financial reporting purposes and the amounts used for
taxation purposes. Deferred tax is not recognised for:
• temporary differences on the initial recognition of assets or liabilities in a transaction
that is not a business combination and that affects neither accounting nor taxable profit
or loss; and
• temporary differences related to investments in subsidiaries to the extent that it is
probable that they will not reverse in the foreseeable future.
The measurement of deferred taxes reflects the tax consequences that would follow the
manner in which the Group expects, at the reporting date, to recover or settle the carrying
amount of its assets and liabilities. Deferred tax is measured at the tax rates that are
expected to be applied to temporary differences when they reverse, based on the laws that
have been enacted or substantively enacted by the reporting date.
APPENDIX B – UNAUDITED INTERIM CONSOLIDATED FINANCIAL
STATEMENTS FOR THE NINE MONTHS ENDED 30 SEPTEMBER 2014
B-26
Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset
current tax liabilities and assets, and they relate to income taxes levied by the same tax
authority on the same taxable entity, or on different tax entities, but they intend to settle
current tax liabilities and assets on a net basis or their tax assets and liabilities will be
realised simultaneously.
A deferred tax asset is recognised for unused tax losses, tax credits and deductible
temporary differences, to the extent that it is probable that future taxable profits will be
available against which they can be utilised. Deferred tax assets are reviewed at each
reporting date and are reduced to the extent that it is no longer probable that the related tax
benefit will be realised.
In determining the amount of current and deferred tax, the Group takes into account the
impact of uncertain tax positions and whether additional taxes and interest may be due. The
Group believes that its accruals for tax liabilities are adequate for all open tax years based
on its assessment of many factors including interpretations of tax law and prior experience.
This assessment relies on estimates and assumptions and may involve a series of
judgements about future events. New information may become available that causes the
Group to change its judgement regarding the adequacy of existing tax liabilities, such
changes to tax liabilities will impact tax expense in the period that such a determination is
made.
3.15 Discontinued operation
A discontinued operation is a component of the Group’s business, the operations and cash
flows of which can be clearly distinguished from the rest of the Group and which:
• represents a separate major line of business or geographical area of operations; or
• is part of a single co-ordinated plan to dispose of a separate major line of business or
geographical area of operations;
Classification as a discontinued operation occurs upon disposal or when the operation
meets the criteria to be classified as held for sale, if earlier. When an operation is classified
as a discontinued operation, the comparative statement of profit or loss is re-presented as
if the operation had been discontinued from the start of the comparative year.
3.16 Earnings per share
The Group presents basic and diluted earnings per share data for its ordinary shares. Basic
earnings per share is calculated by dividing the profit or loss attributable to ordinary
shareholders of the Company by the weighted-average number of ordinary shares
outstanding during the year, adjusted for own shares held. Diluted earnings per share is
determined by adjusting the profit or loss attributable to ordinary shareholders and the
weighted-average number of ordinary shares outstanding, adjusted for own shares held, for
the effect of all dilutive potential ordinary shares, which comprise share options granted to
employees.
APPENDIX B – UNAUDITED INTERIM CONSOLIDATED FINANCIAL
STATEMENTS FOR THE NINE MONTHS ENDED 30 SEPTEMBER 2014
B-27
3.17 Segment reporting
An operating segment is a component of the Group that engages in business activities from
which it may earn revenues and incur expenses, including revenues and expenses that
relate to transactions with any of the Group’s other components. All operating segments’
operating results are reviewed regularly by the Group’s CEO (the chief operating decision
maker) to make decisions about resources to be allocated to the segment and to assess its
performance, and for which discrete financial information is available.
Segment results that are reported to the Group’s CEO include items directly attributable to
a segment as well as those that can be allocated on a reasonable basis. Unallocated items
comprise mainly corporate assets (primarily the Company’s headquarters), head office
expenses, and tax assets and liabilities.
Segment capital expenditure are total costs incurred during the period to acquire plant and
equipment and intangible assets.
3.18 New standards and interpretations not yet adopted
A number of new standards, amendments to standards and interpretations are effective for
annual periods beginning after 1 January 2014, and have not been applied in preparing
these financial statements. None of these are expected to have a significant effect on the
financial statements of the Group.
APPENDIX B – UNAUDITED INTERIM CONSOLIDATED FINANCIAL
STATEMENTS FOR THE NINE MONTHS ENDED 30 SEPTEMBER 2014
B-28
4 Plant and equipment
Computer
equipment
Office
equipment
Furniture
and
fittings
Office
renovation Total
$ $ $ $ $
Cost
At 1 January 2013 2,707,580 471,330 466,626 2,402,286 6,047,822
Additions 815,069 25,062 1,466 3,096 844,693
Disposals/written-off (110,547) (1,188) – – (111,735)
Attributable to discontinued
operation (201,668) (32,841) (28,482) (121,163) (384,154)
Translation differences on
consolidation (42,447) (6,763) (8,433) (18,354) (75,997)
At 31 December 2013 3,167,987 455,600 431,177 2,265,865 6,320,629
Additions 630,751 5,158 7,103 27,179 670,191
Disposals/written-off (177,700) (375) – – (178,075)
Translation differences on
consolidation 10,042 2,866 2,575 7,364 22,847
At 30 September 2014 3,631,080 463,249 440,855 2,300,408 6,835,592
Accumulated depreciation
At 1 January 2013 2,479,402 419,802 378,234 1,200,119 4,477,557
Depreciation for the year 277,481 37,538 46,418 382,245 743,682
Disposals/written-off (110,214) (949) – – (111,163)
Attributable to discontinued
operation (185,379) (26,913) (23,827) (110,900) (347,019)
Translation differences on
consolidation (40,736) (6,192) (8,319) (21,029) (76,276)
At 31 December 2013 2,420,554 423,286 392,506 1,450,435 4,686,781
Depreciation for the period 317,584 8,014 16,245 237,982 579,825
Disposals/written-off (177,700) (375) – – (178,075)
Translation differences on
consolidation 8,356 2,796 2,396 6,915 20,463
At 30 September 2014 2,568,794 433,721 411,147 1,695,332 5,108,994
Carrying amounts
At 1 January 2013 228,178 51,528 88,392 1,202,167 1,570,265
At 31 December 2013 747,433 32,314 38,671 815,430 1,633,848
At 30 September 2014 1,062,286 29,528 29,708 605,076 1,726,598
APPENDIX B – UNAUDITED INTERIM CONSOLIDATED FINANCIAL
STATEMENTS FOR THE NINE MONTHS ENDED 30 SEPTEMBER 2014
B-29
5 Intangible assets
Development
costs
Computer
software
Intellectual
properties
Customer
lists Total
$ $ $ $ $
Cost
At 1 January 2013 19,175 1,735,167 979,105 – 2,733,447
Additions – 13,899 – 706,800 720,699
Attributable to discontinued
operation – (90,355) (524,552) – (614,907)
Translation differences on
consolidation – (40,755) (85,301) – (126,056)
At 31 December 2013 19,175 1,617,956 369,252 706,800 2,713,183
Additions 212,355 606,675 – – 819,030
Translation differences on
consolidation – 8,959 6,125 – 15,084
At 30 September 2014 231,530 2,233,590 375,377 706,800 3,547,297
Accumulated
amortisation
At 1 January 2013 19,175 1,614,802 803,447 – 2,437,424
Amortisation for the year – 66,748 86,440 106,020 259,208
Attributable to discontinued
operation – (87,366) (445,870) – (533,236)
Translation differences on
consolidation – (39,286) (74,765) – (114,051)
At 31 December 2013 19,175 1,554,898 369,252 106,020 2,049,345
Amortisation for the period – 37,900 – 106,020 143,920
Translation differences on
consolidation – 8,538 6,125 – 14,663
At 30 September 2014 19,175 1,601,336 375,377 212,040 2,207,928
Carrying amounts
At 1 January 2013 – 120,365 175,658 – 296,023
At 31 December 2013 – 63,058 – 600,780 663,838
At 30 September 2014 212,355 632,254 – 494,760 1,339,369
In 2013, customer lists were acquired by the Group from a third party with a cash
consideration of $706,800 payable in twelve quarterly instalments. The amounts of
$294,500 have been paid to the third party as at 30 September 2014 (2013: $117,800).
APPENDIX B – UNAUDITED INTERIM CONSOLIDATED FINANCIAL
STATEMENTS FOR THE NINE MONTHS ENDED 30 SEPTEMBER 2014
B-30
6 Subsidiaries
Details of subsidiaries are as follows:
Effective equity held
by the Group
Name of subsidiaries
Country of
incorporation
30 September
2014
31 December
2013
% %
iFAST Financial Pte. Ltd.
1
and its
subsidiary: Singapore 100 100
iFAST Nominees Pte. Ltd.
1
Singapore 100 100
FA Corporate & Compliance
Consultancy Pte. Ltd.
1
Singapore 100 100
iFAST Capital Ltd.
1
Singapore 100 100
iFAST Financial (HK) Limited
2
and
its subsidiary: Hong Kong 100 100
iFAST Nominees (HK) Limited
2
Hong Kong 100 100
iFAST Platform Services
(Shenzhen) Qianhai Limited
4
China 100 –
iFAST Platform Services (HK)
Limited
2
Hong Kong 100 100
iFAST Service Centre Sdn. Bhd.
3
Malaysia 100 100
iFAST Malaysia Sdn. Bhd. (formerly
known as iFAST-OSK Sdn. Bhd.)
3
and its subsidiaries: Malaysia 100 65
FA Corporate and Compliance
Consultancy Sdn. Bhd.
3
Malaysia 100 65
iFAST Capital Sdn. Bhd.
3
and its
subsidiary: Malaysia 100 65
iFAST Nominees Sdn. Bhd.
3
Malaysia 100 65
1
KPMG LLP Singapore is the auditor
2
BDO Limited Hong Kong is the auditor
3
BDO Limited Malaysia is the auditor
4
ShineWing CPA, Shenzhen branch is the auditor
On 7 July 2014, iFAST Financial (HK) Limited, a subsidiary of the Company, incorporated
a wholly-owned subsidiary, iFAST Platform Services (Shenzhen) Qianhai Limited, in China.
With effect from 12 August 2014, iFAST-OSK Sdn. Bhd. changed its name to iFAST
Malaysia Sdn. Bhd..
APPENDIX B – UNAUDITED INTERIM CONSOLIDATED FINANCIAL
STATEMENTS FOR THE NINE MONTHS ENDED 30 SEPTEMBER 2014
B-31
Impairment testing
Some of the subsidiaries are in the initial growth phase and cash flow projections with a set
of assumptions that require significant judgements are prepared to determine if there is any
indication of impairment of the Company’s investments in subsidiaries. In making these
judgements, the Company evaluates, amongst other factors, the market and economic
environments in which the subsidiaries operate, economic performances of the subsidiaries
and the extent of which the carrying amounts of its investment in subsidiaries exceed their
tangible net asset values.
Based on the Company’s assessment, the recoverable amounts of its investments in
subsidiaries are higher than the carrying amounts of its investments in subsidiaries so no
allowances for impairment losses are required.
Effect on acquisition of additional interests in subsidiaries
On 18 July 2014, the Company completed the acquisition of the remaining interest in a
subsidiary of the Group, iFAST Malaysia Sdn. Bhd. for a cash consideration of RM9,070,000
(approximately $3,539,098). For the period ended 30 September 2014, the Group
recognised an amount of $2,913,399 on acquisition of additional interests in subsidiaries in
reserve.
7 Associate
Details of associate are as follows:
Effective equity held
by the Group
Name of associate
Country of
incorporation
30 September
2014
31 December
2013
% %
Providend Holding Private Limited Singapore 19.9 –
On 20 June 2014, the Company entered into an agreement with Providend Holding Private
Limited (“Providend”) to acquire a 19.9% stake holding in Providend with cash consideration
of $400,157. The agreement also gives the Company a call option to purchase a further
10.1% stake holding in Providend with cash consideration of $319,244 within two years from
the completion of the acquisition. The acquisition was completed on 25 July 2014. Although
the Group has less than 20% of the voting rights in Providend, the Group has determined
that it has significant influence given its potential voting rights in Providend.
APPENDIX B – UNAUDITED INTERIM CONSOLIDATED FINANCIAL
STATEMENTS FOR THE NINE MONTHS ENDED 30 SEPTEMBER 2014
B-32
Information about the Group’s investment in associate that is immaterial to the Group are
as follows:
30 September
2014
31 December
2013
$ $
Group’s interest in associate at beginning of period – –
Acquisition of interests in associate 400,157 –
Group’s share of profit after tax of associate 382 –
Carrying amount of Group’s interests in associate
(equity accounted) 400,539 –
8 Club membership
30 September
2014
31 December
2013
$ $
Club membership, at cost 11,429 11,429
9 Trade and other receivables
30 September
2014
31 December
2013
$ $
Trade receivables 6,975,314 7,092,762
Impairment losses (2,818) (14,260)
Net receivables 6,972,496 7,078,502
Accrued revenue 8,435,550 7,907,105
Deposits and other receivables 2,532,384 1,778,304
Loans and receivables 17,940,430 16,763,911
Trade receivables and accrued revenue consist mainly of commission and fee income that
shall only be due and payable to third party financial advisers upon the Group’s receipt of
the corresponding amounts from customers.
The Group’s exposures to credit and impairment losses related to trade receivables are
disclosed in Note 24.
APPENDIX B – UNAUDITED INTERIM CONSOLIDATED FINANCIAL
STATEMENTS FOR THE NINE MONTHS ENDED 30 SEPTEMBER 2014
B-33
10 Other investments
30 September
2014
31 December
2013
$ $
Non-current
Available-for-sale quoted debt securities 1,802,402 2,011,502
The quoted debt securities classified as available-for-sale of the Group represent
investments in marketable bond funds.
The quoted debt securities are denominated in Singapore dollar.
The maximum exposures to credit risk of the quoted debt securities at the reporting date are
the carrying amounts.
The Group’s exposure to price risk and fair value information related to other investments
are disclosed in Note 24.
11 Cash and cash equivalents
30 September
2014
31 December
2013
$ $
Cash at bank and in hand 15,148,947 16,292,523
Money market funds 36,267 426,386
Cash and cash equivalents 15,185,214 16,718,909
The money market funds are included as cash and cash equivalents as they are considered
fully liquid investments readily convertible into known amount of cash and cash equivalents
which are subject to an insignificant risk of changes in value.
The weighted average effective interest rate per annum relating to cash and cash
equivalents and client bank accounts as at 30 September 2014 for the Group was 0.09%
(2013: 0.08%). Interest rates reprice on a daily basis.
APPENDIX B – UNAUDITED INTERIM CONSOLIDATED FINANCIAL
STATEMENTS FOR THE NINE MONTHS ENDED 30 SEPTEMBER 2014
B-34
For the purpose of the consolidated statement of cash flows, cash and cash equivalents
comprise the following:
30 September
2014
30 September
2013
$ $
Cash at bank and in hand 15,148,947 16,486,791
Money market funds 36,267 769,302
Cash and cash equivalents in the consolidated
statement of cash flows 15,185,214 17,256,093
12 Held under trust
Some of the subsidiaries in the Group receive and hold monies deposited by clients and
other institutions in the course of the conduct of the regulated activities. These clients’
monies are maintained in one or more trust bank accounts which are separately maintained
from the bank accounts of the Group.
13 Share capital and reserves
Share capital
Note
30 September
2014
31 December
2013
No. of shares No. of shares
Fully paid ordinary shares,
with no par value:
Ordinary shares:
At 1 January 33,796,069 33,573,654
Exercise of share options
(Share Option Scheme) 21 274,820 222,415
At reporting date 34,070,889 33,796,069
274,820 ordinary shares were issued as a result of the exercise of vested options arising
from the share option programmes granted to full-time executives (2013: 222,415 shares).
Options were exercised at an average price of $2.58 (2013: $1.65) per option. All issued
shares are fully paid.
The holders of ordinary shares are entitled to receive dividends as declared from time to
time and are entitled to one vote per share at meetings of the Company. All ordinary shares
rank equally with regard to the Company’s residual assets.
APPENDIX B – UNAUDITED INTERIM CONSOLIDATED FINANCIAL
STATEMENTS FOR THE NINE MONTHS ENDED 30 SEPTEMBER 2014
B-35
At the reporting date, there were 2,204,166 (2013: 1,555,685) shares reserved for issue
under options.
Reserves
30 September
2014
31 December
2013
$ $
Fair value reserve 12,128 34,602
Foreign currency translation reserve (812,740) (748,886)
Share option reserve 807,187 559,171
Equity reserve (4,160,640) (1,368,829)
Accumulated profits 11,516,262 14,819,689
7,362,197 13,295,747
Fair value reserve
The fair value reserve comprises the cumulative net change in the fair value of available-
for-sale financial assets until the investments are derecognised or impaired.
Foreign currency translation reserve
The foreign currency translation reserve comprises foreign exchange differences arising
from the translation of the financial statements of foreign operations whose functional
currencies are different from the functional currency of the Group.
Share option reserve
The share option reserve comprises the cumulative value of employee services received for
the issue of share options.
Equity reserve
The equity reserve represents:
(i) effects of changes in ownership interests in subsidiaries when there are no changes
in control; and
(ii) premium received from non-controlling interests on issue of shares by a subsidiary
without change in ownership interests.
APPENDIX B – UNAUDITED INTERIM CONSOLIDATED FINANCIAL
STATEMENTS FOR THE NINE MONTHS ENDED 30 SEPTEMBER 2014
B-36
14 Deferred tax
Unrecognised deferred tax assets and liabilities
At 30 September 2014, a deferred tax asset in respect of tax losses and deductible
temporary differences amounting to $45,658,388 (2013: $49,665,868) were not recognised
because it is not probable that future taxable profits will be available against which the
Group can utilise the benefits.
The tax losses are subject to agreement by the tax authorities and compliance with tax
regulations in the respective countries in which certain subsidiaries operate. The deductible
temporary differences do not expire under current tax legislation.
Recognised deferred tax assets and liabilities
Deferred tax liabilities and assets are offset when there is a legally enforceable right to set
off current tax assets against current tax liabilities and when the deferred taxes relate to the
same taxation authority. The following amount, determined after appropriate offsetting is
included in the statement of financial position as follows:
30 September
2014
31 December
2013
$ $
Deferred tax assets 21,618 34,559
Deferred tax liabilities 125,385 76,746
Deferred tax assets and liabilities are attributable to the following:
Assets Liabilities
30 September
2014
31 December
2013
30 September
2014
31 December
2013
$ $ $ $
Plant and equipment – (6,402) 183,143 189,709
Trade receivables (479) (2,425) – –
Trade and other
payables (15,564) (22,449) – –
Employee benefits (63,333) (116,246) – –
Deferred tax
(assets)/liabilities (79,376) (147,522) 183,143 189,709
Set off of tax 57,758 112,963 (57,758) (112,963)
Net deferred tax
(assets)/liabilities (21,618) (34,559) 125,385 76,746
APPENDIX B – UNAUDITED INTERIM CONSOLIDATED FINANCIAL
STATEMENTS FOR THE NINE MONTHS ENDED 30 SEPTEMBER 2014
B-37
Movements in deferred tax assets and liabilities of the Group (prior to offsetting of balances)
during the year/period were as follows:
At
1 January
2013
Recognised
in profit
or loss
At
31 December
2013
Recognised
in profit
or loss
(Note 19)
At
30 September
2014
$ $ $ $ $
Deferred tax assets
Plant and equipment (8,175) 1,773 (6,402) 6,402 –
Employee benefits (41,454) (74,792) (116,246) 52,913 (63,333)
Trade receivables (1,088) (1,337) (2,425) 1,946 (479)
Trade and other
payables (14,914) (7,535) (22,449) 6,885 (15,564)
(65,631) (81,891) (147,522) 68,146 (79,376)
Deferred tax
liabilities
Plant and equipment 89,800 99,909 189,709 (6,566) 183,143
24,169 18,018 42,187 61,580 103,767
15 Trade and other payables
30 September
2014
31 December
2013
$ $
Current
Trade payables 2,068,995 1,068,351
Accrued operating expenses 10,348,638 11,390,914
Dividends payable 6,814,178 –
Deposits received 304,562 376,092
19,536,373 12,835,357
Non-current
Accrued operating expenses 176,700 353,400
Trade payables and accrued operating expenses consist mainly of commission and fee
income that shall only be due and payable to third party financial advisers upon the Group’s
receipt of the corresponding amounts from customers.
APPENDIX B – UNAUDITED INTERIM CONSOLIDATED FINANCIAL
STATEMENTS FOR THE NINE MONTHS ENDED 30 SEPTEMBER 2014
B-38
Included in the Group’s accrued operating expenses are amounts payable to a third party
as indicated in Note 5 amounting to $412,300 (2013: $589,000), where $235,600 (2013:
$235,600) and $176,700 (2013: $353,400) are the current and non-current portion
respectively.
The Group’s exposure to liquidity risk related to trade and other payables is disclosed in
Note 24.
16 Revenue
Continuing operations
Discontinued operation
(see note 20) Total
1 January
2014 to
30 September
2014
1 January
2013 to
30 September
2013
1 January
2014 to
30 September
2014
1 January
2013 to
30 September
2013
1 January
2014 to
30 September
2014
1 January
2013 to
30 September
2013
$ $ $ $ $ $
Commission
and fee income 56,638,292 50,903,434 – 588,770 56,638,292 51,492,204
Service fees 1,451,130 1,312,151 – – 1,451,130 1,312,151
Advertising
fees 266,596 372,041 – – 266,596 372,041
Others 238,943 98,541 – – 238,943 98,541
58,594,961 52,686,167 – 588,770 58,594,961 53,274,937
17 Other operating income
1 January
2014 to
30 September
2014
1 January
2013 to
30 September
2013
$ $
Investment income 119,944 16,256
Government grant 68,193 8,000
Others 20,726 48,410
208,863 72,666
APPENDIX B – UNAUDITED INTERIM CONSOLIDATED FINANCIAL
STATEMENTS FOR THE NINE MONTHS ENDED 30 SEPTEMBER 2014
B-39
18 Profit for the period
The following items have been included in arriving at profit for the period:
1 January
2014 to
30 September
2014
1 January
2013 to
30 September
2013
$ $
Interest income
– from cash at bank (40,353) (2,733)
– from trust accounts (20,202) (8,645)
– from money market funds (6,746) (19,297)
– from loans and receivables (6,679) –
Impairment losses on trade receivables, net 2,818 5,448
Unrealised exchange loss, net 35,409 10,669
Value of employee services received for issue of
share options, included in staff costs 248,016 13,111
Contributions to defined contribution plans, included
in staff costs 819,424 798,961
Operating lease expense 3,024,351 3,185,730
Net change in fair value of available-for-sale financial
assets reclassified from equity (99,464) (656,056)
19 Tax expense
1 January
2014 to
30 September
2014
1 January
2013 to
30 September
2013
$ $
Current tax expense
Current period 318,986 585,681
Adjustment for prior periods – (12,423)
318,986 573,258
Deferred tax expense
Origination and reversal of temporary differences 61,654 (37,651)
Adjustment for prior periods (74) 14,537
61,580 (23,114)
Tax expense from continuing operations 380,566 550,144
There was no tax expense from the discontinued operation (see Note 20).
APPENDIX B – UNAUDITED INTERIM CONSOLIDATED FINANCIAL
STATEMENTS FOR THE NINE MONTHS ENDED 30 SEPTEMBER 2014
B-40
Reconciliation of effective tax rate
1 January
2014 to
30 September
2014
1 January
2013 to
30 September
2013
$ $
Profit for the period from continuing operations 7,577,203 5,400,607
Tax expense from continuing operations 380,566 550,144
Profit before tax from continuing operations 7,957,769 5,950,751
Tax using Singapore tax rate at 17% 1,352,821 1,011,628
Effect of tax rates in foreign jurisdictions (21,686) (40,123)
Effect of result of equity-accounted investee
presented net of tax (65) –
Income not subject to tax (28,081) (30,638)
Tax incentives (546,520) (268,734)
Non-deductible expenses 149,897 74,035
Current period tax losses and temporary differences
for which no deferred tax asset was recognised 25,729 135,040
Recognition of tax effect of previously unrecognised
tax losses and temporary differences (551,650) (334,252)
(Over)/Under provided in prior years (74) 2,114
Others 195 1,074
380,566 550,144
20 Discontinued operation
In 2013, the Company disposed iFAST India Investment Pte. Ltd. and its subsidiary
following a strategic decision to place greater focus on the Group’s core operation
segments, being the operations in Singapore, Hong Kong and Malaysia.
APPENDIX B – UNAUDITED INTERIM CONSOLIDATED FINANCIAL
STATEMENTS FOR THE NINE MONTHS ENDED 30 SEPTEMBER 2014
B-41
For the period ended 30 September 2013, of the loss from discontinued operation of
$635,022, an amount of $196,293 was attributable to the owners of the Company, and of the
profit from continuing operations of $5,400,607, an amount of $5,594,547 was attributable
to the owners of the Company.
1 January
2013 to
30 September
2013
$
Results of discontinued operation
Revenue 588,770
Other operating income 656,111
Expenses (1,879,903)
Loss for the period (635,022)
Cash flows from discontinued operation
Net cash used in operating activities (1,375,554)
Net cash from investing activities 1,548,129
Net cash used in financing activities (128,152)
Net cash flows for the period 44,423
21 Share options
Share Option Scheme
Share option scheme 2003
(i) The Share Option Scheme (the 2003 Scheme) of the Company was approved and
adopted by its members at an Extraordinary General Meeting held on 28 March 2003.
(ii) The 2003 Scheme is administered by a Committee appointed by the Board of
Directors. The Committee comprises 3 directors, Yao Chih Matthias, Ling Peng Meng
and Low Huan Ping as at 30 September 2014.
APPENDIX B – UNAUDITED INTERIM CONSOLIDATED FINANCIAL
STATEMENTS FOR THE NINE MONTHS ENDED 30 SEPTEMBER 2014
B-42
(iii) Other information regarding the 2003 Scheme are set out below:
• those eligible to participate in the 2003 Scheme comprise confirmed full-time
executives, including directors, who have been employed by the Company and/or
its subsidiaries for a continuous period of at least six months and any non-
executive directors and consultants of the Company and/or its subsidiaries who,
in the absolute discretion of the Committee, are selected to participate in the
2003 Scheme.
• subject to adjustments arising from certain variation in the issued share capital of
the Company:
• the total number of shares in respect of which options may be offered on any
offering date, when added to the number of shares issuable in respect of
outstanding options already granted under the 2003 Scheme, shall not
exceed 3,785,611 (2013: 3,785,611) as at 30 September 2014; and
• the offer price in respect of which an option is exercisable shall be at least
85% of the fair value of the shares as at the time of offer of the options to
be determined by the Committee.
• subject to the provisions in the rules of the 2003 Scheme, the option granted
expires on (i) (in the case of executives) the day preceding the tenth anniversary
of the date of the grant of the option or (ii) (in the case of non – executive directors
and consultants) the day preceding the fifth anniversary of the date of the grant
of the option.
• the options granted by the Company do not entitle the holders of the options, by
virtue of such holding, to any rights to participate in any share issue of any other
company.
(iv) The 2003 Scheme was terminated on 23 May 2013 by a resolution passed by its
members at an Annual General Meeting. This will not affect all options remaining
unexercised.
Share option scheme 2013
(i) The 2013 Share Option Scheme (the 2013 Scheme) of the Company was approved
and adopted by its members at an Annual General Meeting held on 23 May 2013.
(ii) The 2013 Scheme is administered by a Committee appointed by the Board of
Directors. The Committee comprises 3 directors, Yao Chih Matthias, Ling Peng Meng
and Low Huan Ping as at 30 September 2014.
APPENDIX B – UNAUDITED INTERIM CONSOLIDATED FINANCIAL
STATEMENTS FOR THE NINE MONTHS ENDED 30 SEPTEMBER 2014
B-43
(iii) Other information regarding the 2013 Scheme is set out below:
• those eligible to participate in the 2013 Scheme comprise confirmed full-time
executives, including directors, who have been employed by the Company and/or
its subsidiaries for a continuous period of at least three months and any
non-executive directors and consultants of the Company and/or its subsidiaries
who, in the absolute discretion of the Committee, are selected to participate in the
Scheme.
• the 2013 Scheme will continue in operation at the discretion of the Committee,
subject to a maximum period of 10 years commencing on 23 May 2013, provided
that the 2013 Scheme may continue beyond the above stipulated period with the
approval of the Company’s shareholders by ordinary resolution in general
meeting.
• subject to adjustments arising from certain variation in the issued share capital of
the Company:
• the total number of shares in respect of which options may be offered on any
offering date, when added to the number of shares issuable in respect of
outstanding options already granted under the 2013 Scheme, shall not
exceed 4,781,725 (2013: 4,781,725) as at 30 September 2014; and
• the offer price in respect of which an option is exercisable shall be
determined by the Committee at its absolute discretion, fixed by the
Committee and approved by the Shareholders of the Company in general
meeting at a price which is set at a discount, provided that the maximum
discount shall not exceed 20% of the last dealt prices for the share. In
determining the quantum of such discount, the Committee shall take into
consideration the following criteria:
i. the performance of the Company
ii. the individual performance of the participant of the 2013 Scheme
iii. the contribution of the participant of the 2013 Scheme to the success
and development of the Company.
APPENDIX B – UNAUDITED INTERIM CONSOLIDATED FINANCIAL
STATEMENTS FOR THE NINE MONTHS ENDED 30 SEPTEMBER 2014
B-44
At the end of the financial year/period, details of the options granted under both the 2003
and the 2013 Scheme in respect of unissued ordinary shares of the Company are as
follows:
Date of
grant of
options
Exercise
price per
share
Options
outstanding
at
1 January
2013
Options
granted
Options
exercised
Options
forfeited/
expired
Options
outstanding
at
31 December
2013
Number
of option
holders at
31 December
2013
Date of
expiration
1/1/2006 $0.49 7,500 – 5,400 – 2,100 1 31/12/2015
1/7/2006 $0.70 93,500 – 38,305 – 55,195 4 30/6/2016
1/1/2007 $1.20 54,000 – 20,000 – 34,000 6 31/12/2016
1/4/2007 $1.96 38,000 – 15,200 – 22,800 3 31/3/2017
1/7/2009 $1.60 147,185 – 57,610 – 89,575 17 30/6/2019
1/7/2010 $2.40 252,800 – 45,900 27,000 179,900 36 30/6/2020
1/7/2013 $2.01 – 40,000 40,000 – – – –
1/7/2013 $2.50 – 1,198,865 – 26,750 1,172,115 113 30/6/2023
592,985 1,238,865 222,415 53,750 1,555,685
Date of
grant of
options
Exercise
price per
share
Options
outstanding
at
1 January
2014
Options
granted
Options
exercised
Options
forfeited/
expired
Options
outstanding
at
30 September
2014
Number
of option
holders at
30 September
2014
Date of
expiration
1/1/2006 $0.49 2,100 – 2,100 – – – –
1/7/2006 $0.70 55,195 – 28,695 – 26,500 2 30/6/2016
1/1/2007 $1.20 34,000 – 5,000 – 29,000 3 31/12/2016
1/4/2007 $1.96 22,800 – 15,800 – 7,000 2 31/3/2017
1/7/2009 $1.60 89,575 – 40,725 – 48,850 9 30/6/2019
1/7/2010 $2.40 179,900 – 62,500 – 117,400 22 30/6/2020
1/7/2013 $2.50 1,172,115 – – 48,513 1,123,602 107 30/6/2023
1/4/2014 $2.80 – 20,000 20,000 – – – –
1/4/2014 $3.60 – 801,114 – 19,300 781,814 142 31/3/2024
21/8/2014 $3.80 – 170,000 100,000 – 70,000 2 20/8/2024
1,555,685 991,114 274,820 67,813 2,204,166
APPENDIX B – UNAUDITED INTERIM CONSOLIDATED FINANCIAL
STATEMENTS FOR THE NINE MONTHS ENDED 30 SEPTEMBER 2014
B-45
Movements in the number of share options and their related weighted average exercise
prices are as follows:
Share option
scheme 2013
Share option
scheme 2003
Weighted average
exercise price
No. of
options
Weighted average
exercise price
No. of
options
2013 2013 2013 2013
At 1 January 2013 – – 1.77 592,985
Granted 2.48 1,238,865 – –
Exercised 2.01 (40,000) 1.57 (182,415)
Forfeited/Expired 2.50 (26,750) 2.40 (27,000)
At 31 December 2013 2.50 1,172,115 1.83 383,570
Number of options
exercisable at
31 December 2013 – – 1.83 383,570
Share option
scheme 2013
Share option
scheme 2003
Weighted average
exercise price
No. of
options
Weighted average
exercise price
No. of
options
2014 2014 2014 2014
At 1 January 2014 2.50 1,172,115 1.83 383,570
Granted 3.62 991,114 – –
Exercised 3.63 (120,000) 1.76 (154,820)
Forfeited/Expired 2.81 (67,813) – –
At 30 September 2014 2.98 1,975,416 1.87 228,750
Number of options
exercisable at
30 September 2014 – – 1.87 228,750
Options were exercised on a regular basis throughout the year. The weighted average share
price during the period was $3.67 (2013: $3.32) per share.
APPENDIX B – UNAUDITED INTERIM CONSOLIDATED FINANCIAL
STATEMENTS FOR THE NINE MONTHS ENDED 30 SEPTEMBER 2014
B-46
Measurement of fair values
The fair value of services received in return for share options granted are measured by
reference to the fair value of share options granted. The estimate of the fair value of the
services received is measured based on the Binomial Model. The share prices applied to
the model are based on last-transacted prices of the Company’s ordinary shares. The
expected life used in the model has been adjusted based on management’s best estimate,
for the effects of non-transferability, exercise restrictions and behavioural considerations.
Fair value of share options and assumptions
Date of grant of
options
21 August
2014
1 April
2014
1 July
2013
1 July
2010
1 July
2009
1 April
2007
1 January
2007
1 July
2006
1 January
2006
Fair value at
measurement date 0.85 0.80 0.49 0.21 0.48 0.56 0.32 0.24 0.24
Share price $3.80 $3.60 $2.50 $2.40 $1.60 $1.96 $1.20 $0.70 $0.58
Exercise price $3.80 $3.60 $2.50 $2.40 $1.60 $1.96 $1.20 $0.70 $0.49
Expected volatility 31.3% 25.8% 21.4% 7.4% 38.9% 22.0% 20.8% 13.2% 12.0%
Expected option life
(days) 1,095 1,460 1,460 1,460 1,460 2,190 2,190 3,650 3,650
Expected dividends $0.12 $0.12 $0.03 $0.10 $0.10 $0.04 $0.04 – –
Risk-free interest rate 2.75% 2.75% 2.25% 2.50% 3.13% 3.75% 3.75% 3.50% 3.50%
The expected volatility is based on the one year historic volatility of the Company’s share
price, adjusted for any expected changes to future volatility.
There are no market conditions associated with the share option grants. Service conditions
and non-market performance conditions are not taken into account in the measurement of
the fair value of the services to be received at the grant date.
22 Earnings per share
Basic earnings per share
1 January 2014 to
30 September 2014
1 January 2013 to
30 September 2013
Continuing
operations
Discontinued
operation Total
Continuing
operations
Discontinued
operation Total
$ $ $ $ $ $
Basic earnings per
share is based on:
Net profit/(loss)
attributable to
ordinary
shareholders 7,614,892 – 7,614,892 5,594,547 (196,293) 5,398,254
APPENDIX B – UNAUDITED INTERIM CONSOLIDATED FINANCIAL
STATEMENTS FOR THE NINE MONTHS ENDED 30 SEPTEMBER 2014
B-47
30 September
2014
30 September
2013
No. of shares* No. of shares*
Issued ordinary shares at beginning of the period 202,776,414 201,441,924
Effect of share options exercised (Share Option
Scheme) 522,426 392,376
Weighted average number of ordinary shares at
the end of the period 203,298,840 201,834,300
* adjusted for sub-division of every 1 ordinary share into 6 ordinary shares as completed by the Company on 20
November 2014.
Diluted earnings per share
For the purpose of calculating the diluted earnings per ordinary share, the weighted average
number of ordinary shares in issue is adjusted to take into account the dilutive effect arising
from the dilutive share options under the Share Option Scheme, with the potential ordinary
shares weighted for the period outstanding.
1 January 2014 to
30 September 2014
1 January 2013 to
30 September 2013
Continuing
operations
Discontinued
operation Total
Continuing
operations
Discontinued
operation Total
$ $ $ $ $ $
Diluted earnings per
share is based on:
Net profit/(loss)
attributable to ordinary
shareholders 7,614,892 – 7,614,892 5,594,547 (196,293) 5,398,254
The effect of the exercise of share options on the weighted average number of ordinary
shares in issue is as follows:
30 September
2014
30 September
2013
No. of shares* No. of shares*
Weighted average number of:
Ordinary shares used in the calculation of basic
earnings per share 203,298,840 201,834,300
Potential ordinary shares issuable under:
– share options (Share Option Scheme) 5,145,234 3,604,158
Weighted average number of ordinary issued and
potential shares issuable assuming full conversion
at the end of the period 208,444,074 205,438,458
* adjusted for sub-division of every 1 ordinary share into 6 ordinary shares as completed by the Company on 20
November 2014.
APPENDIX B – UNAUDITED INTERIM CONSOLIDATED FINANCIAL
STATEMENTS FOR THE NINE MONTHS ENDED 30 SEPTEMBER 2014
B-48
Options to purchase 7,000 shares at $1.96 per share (2013: 22,800 shares at $1.96 per
share) issued in April 2007, 117,400 shares at $2.40 per share (2013: 179,900 shares at
$2.40 per share) issued in July 2010, 781,814 shares at $3.60 per share (2013: Nil) issued
in April 2014 and 70,000 shares at $3.80 per share (2013: Nil) issued in August 2014 were
outstanding during the reporting period but not included in the computation of diluted
earnings per share for the corresponding period because these options were anti-dilutive.
The options, which expire on 31 March 2017, 30 June 2020, 31 March 2024 and 20 August
2024 respectively, are still outstanding as at 30 September 2014.
23 Operating segments
The Group has four reportable segments, namely its operations in Singapore, Hong Kong,
Malaysia and China, which are the Group’s strategic business locations. In the prior years,
the Group carried out the operation in India. However, this was discontinued in 2013 (see
Note 20). In 2014, the Group starts its operations in China. The operation in China is still
in the start-up phase.
The strategic business locations are managed separately. For each of the strategic
business locations, the Chairman and CEO reviews internal management reports on
monthly basis.
Information regarding the results of each reportable segment is included below.
Performance is measured based on segment profit before tax, as included in the internal
management reports that are reviewed by the Chairman and CEO. Segment profit is used
to measure performance as management believes that such information is the most
relevant in evaluating the results of certain segments relative to other entities that operate
within these industries. Inter-segment pricing is determined on an arm’s length basis.
In presenting information on the basis of geographical segments, segment revenue is based
on a geographical location of customers. Segment non-current assets are based on the
geographical location of the assets.
APPENDIX B – UNAUDITED INTERIM CONSOLIDATED FINANCIAL
STATEMENTS FOR THE NINE MONTHS ENDED 30 SEPTEMBER 2014
B-49
Geographical segments are analysed by four primary geographical areas as follows:
Information about reportable segments
Singapore Hong Kong Malaysia
India
(Discontinued
operation) China Total
$ $ $ $ $ $
For the nine months
ended 30 September 2014
Revenue and expenses
Revenue from external
customers 40,444,239 15,897,266 2,253,456 – – 58,594,961
Inter-segment revenue 328,500 – 1,389,213 – – 1,717,713
Total revenue 40,772,739 15,897,266 3,642,669 – – 60,312,674
Finance income 46,238 381 27,038 – 323 73,980
Depreciation of plant and
equipment (466,434) (90,787) (20,001) – (2,603) (579,825)
Amortisation of intangible
assets (126,747) (1,125) (15,893) – (155) (143,920)
Reportable segment
profit/(loss) before tax 6,814,585 1,588,494 (66,601) – (379,091) 7,957,387
Share of result of associate 382 – – – – 382
As at 30 September 2014
Assets and liabilities
Reportable segment assets 27,713,236 8,545,554 1,312,840 – 982,649 38,554,279
Equity-accounted associate 400,539 – – – – 400,539
Capital expenditure 1,282,309 66,472 44,980 – 95,460 1,489,221
Reportable segment
liabilities 15,524,626 4,079,603 585,060 – 24,088 20,213,377
For the nine months
ended 30 September 2013
Revenue and expenses
Revenue from external
customers 40,013,100 11,224,212 1,448,855 588,770 – 53,274,937
Inter-segment revenue 168,750 – 1,186,098 – – 1,354,848
Total revenue 40,181,850 11,224,212 2,634,953 588,770 – 54,629,785
Finance income 1,374 256 29,045 – – 30,675
Finance expense (10,376) – – – – (10,376)
Depreciation of plant and
equipment (348,335) (83,958) (96,205) (40,176) – (568,674)
Amortisation of intangible
assets (88,487) (3,300) (28,982) (90,587) – (211,356)
Reportable segment
profit/(loss) before tax 6,356,848 236,672 (474,019) (803,772) – 5,315,729
As at 31 December 2013
Assets and liabilities
Reportable segment assets 30,389,101 6,636,239 1,431,694 – – 38,457,034
Capital expenditure 1,516,075 21,769 16,416 – – 1,554,260
Reportable segment
liabilities 9,630,867 3,619,665 582,705 – – 13,833,237
APPENDIX B – UNAUDITED INTERIM CONSOLIDATED FINANCIAL
STATEMENTS FOR THE NINE MONTHS ENDED 30 SEPTEMBER 2014
B-50
Reconciliations of reportable segment revenues, profit and loss, assets and liabilities and
other material items:
1 January 2014
to 30 September
2014
1 January 2013
to 30 September
2013
$ $
Revenue
Total revenue for reporting segments 60,312,674 54,629,785
Elimination of inter-segment revenue (1,717,713) (1,354,848)
Elimination of discontinued operation – (588,770)
Consolidated revenue 58,594,961 52,686,167
Profit or loss
Total profit before tax for reportable segments 7,957,387 5,315,729
Elimination of segment loss before tax from
discontinued operation – 803,772
Elimination of inter-segment sales to
discontinued operation – (168,750)
Share of result of associate 382 –
Consolidated profit before tax 7,957,769 5,950,751
30 September
2014
31 December
2013
$ $
Assets
Total assets for reportable segments 38,554,279 38,457,034
Investment in associate 400,539 –
Consolidated total assets 38,954,818 38,457,034
Liabilities
Total liabilities for reportable segments 20,213,377 13,833,237
Reportable
segment total Adjustment
Consolidated
total
$ $ $
For the nine months ended
30 September 2014
Other material items
Finance income 73,980 – 73,980
Capital expenditure 1,489,221 – 1,489,221
Depreciation and amortisation (723,745) – (723,745)
For the nine months ended
30 September 2013
Other material items
Finance income 30,675 – 30,675
Finance expense (10,376) – (10,376)
Capital expenditure 1,322,917 – 1,322,917
Depreciation and amortisation (780,030) – (780,030)
APPENDIX B – UNAUDITED INTERIM CONSOLIDATED FINANCIAL
STATEMENTS FOR THE NINE MONTHS ENDED 30 SEPTEMBER 2014
B-51
24 Financial risk management
Overview
The Group has exposure to the following risks from its use of financial instruments:
• credit risk
• liquidity risk
• foreign currency risk
• interest rate risk
• price risk
This note present information about the Group’s exposure to each of the above risks, the
Group’s objectives, policies and processes for measuring and managing risk, and the
Group’s management of capital. Further quantitative disclosures are included throughout
these financial statements.
APPENDIX B – UNAUDITED INTERIM CONSOLIDATED FINANCIAL
STATEMENTS FOR THE NINE MONTHS ENDED 30 SEPTEMBER 2014
B-52
Risk management framework
Risk management is integral to the whole business of the Group. The Group has a system
of controls in place to create an acceptable balance between the cost of risks occurring and
the cost of managing the risks. The management continually monitors the Group’s risk
management process to ensure that an appropriate balance between risk and control is
achieved. Risk management policies and systems are reviewed regularly to reflect changes
in market conditions and the Group’s activities.
The Board of Directors oversees how management monitors compliance with the Group’s
risk management policies and procedures and reviews the adequacy of the risk
management framework in relation to the risks faced by the Group.
Credit risk
Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial
instrument fails to meet its contractual obligations, and arises principally from the Group’s
receivables from customers and investment securities.
The Group has a credit policy in place and exposure to credit risk is monitored on an
ongoing basis.
At the reporting date, other than bank balances which are placed with regulated financial
institutions and quoted, liquid debt securities managed by fund managers, there were no
significant concentrations of credit risk. The maximum exposure to credit risk is represented
by the carrying amount of each financial asset in the statement of financial position. The
maximum exposure to credit risk for trade and other receivables (excluding accrued
revenue) at the reporting date by type of counterparty was:
30 September
2014
31 December
2013
$ $
Distributors 607,778 645,199
Retail customers 6,364,718 6,433,303
Others 2,532,384 1,778,304
9,504,880 8,856,806
The Group’s concentration of credit risk relating to trade and other receivables is limited due
to the Group’s many varied customers and the credit quality of its trade and other
receivables is within acceptable risk. The Group’s historical experience in the collection of
trade receivable falls within the recorded allowances. Due to these factors, management
believes that no additional credit risk beyond amounts provided for collection losses is
inherent in the Group’s trade and other receivables.
APPENDIX B – UNAUDITED INTERIM CONSOLIDATED FINANCIAL
STATEMENTS FOR THE NINE MONTHS ENDED 30 SEPTEMBER 2014
B-53
Impairment losses
The ageing of trade and other receivables (excluding accrued revenue) at the reporting date
was:
Gross
Impairment
losses Gross
Impairment
losses
30 September
2014
30 September
2014
31 December
2013
31 December
2013
$ $ $ $
Not past due 9,336,938 – 8,038,218 –
Past due 0 – 30 days 12,633 – 181,149 –
Past due 31 – 120 days 43,245 – 56,867 –
Past due more than
120 days but less than
1 year 13,335 – 41,037 –
Past due more than
1 year 101,547 (2,818) 553,795 (14,260)
9,507,698 (2,818) 8,871,066 (14,260)
The movement in the allowance for impairment losses in respect of trade and other
receivables during the year/period was as follows:
30 September
2014
31 December
2013
$ $
At 1 January 14,260 6,403
Impairment losses recognised 2,818 7,857
Amounts written off (14,260) –
At reporting date 2,818 14,260
The trade and other receivables that are past due more than 1 year consist mainly of
commission and fee income significantly payable to third party financial advisers. The
Group’s maximum exposure will be the outstanding balance after the payable amount to
third party financial advisers.
The Group believes that, apart from the above, no additional impairment allowance is
required in respect of the remaining trade and other receivables as these amounts mainly
relate to customers with good credit and payment records with the Group.
APPENDIX B – UNAUDITED INTERIM CONSOLIDATED FINANCIAL
STATEMENTS FOR THE NINE MONTHS ENDED 30 SEPTEMBER 2014
B-54
Liquidity risk
Liquidity risk is the risk that the Group will encounter difficulty in meeting the obligations
associated with its financial liabilities that are settled by delivering cash or other financial
asset. The Group monitors its liquidity risk and maintains a level of cash and cash
equivalents deemed adequate by management to finance the Group’s operations and to
mitigate the effects of fluctuations in cash flows.
The following are contractual maturities of financial liabilities, including estimated interest
payments and excluding the impact of netting agreements:
Carrying
amounts
Contractual
cash flows
Within
1 year
Within
1 to 5 years
$ $ $ $
30 September 2014
Non-derivative financial
liabilities
Trade and other payables 19,713,073 19,713,073 19,536,373 176,700
31 December 2013
Non-derivative financial
liabilities
Trade and other payables 13,188,757 13,188,757 12,835,357 353,400
Currency risk
Exposure to foreign currency risk is insignificant as the Group’s incomes and expenses,
assets and liabilities are substantially denominated in the respective functional currencies
of Group entities. The exposure is monitored on an ongoing basis and the Group
endeavours to keep the net exposure at an acceptable level.
The summary of quantitative data about the Group’s exposure to currency risk as reported
to the management of the Group is as follows:
US dollar Euro Pound
Australia
dollar
Chinese
yuan
$ $ $ $ $
30 September 2014
Cash and cash
equivalents 1,090,559 191,992 79,558 184,213 174,741
31 December 2013
Cash and cash
equivalents 928,274 135,518 68,674 105,746 120,934
APPENDIX B – UNAUDITED INTERIM CONSOLIDATED FINANCIAL
STATEMENTS FOR THE NINE MONTHS ENDED 30 SEPTEMBER 2014
B-55
Sensitivity analysis
A 5% strengthening of Singapore dollar, as indicated below, against the following currencies
at reporting date would decrease profit or loss by the amounts shown below. This analysis
is based on foreign currency exchange rate variances that the Group considered to be
reasonably possible at the end of the reporting period. The analysis assumes that all other
variables, in particular interest rates, remain constant. The analysis is performed on the
same basis for 2013.
Profit or loss
30 September
2014
31 December
2013
$ $
US dollar 54,528 46,414
Euro 9,600 6,776
Pound 3,978 3,434
Australian dollar 9,211 5,287
Chinese yuan 8,737 6,047
86,054 67,958
A 5% weakening of Singapore dollar against the above currencies at the reporting date
would have had the equal but opposite effect on the above currencies to the amounts shown
above, on the basis that all other variables remain constant.
Interest rate risk
The Group’s exposure to changes in interest rates relates primarily to interest-bearing
financial assets and liabilities. Interest rate risk is managed by the Group on an ongoing
basis with the primary objective of limiting the extent to which interest income could be
impacted from an adverse movement in interest rates.
Sensitivity analysis for variable rate instruments
For interest-bearing financial instruments, a change of 15 basis points (bp) in interest rate
at the reporting date would increase/(decrease) profit or loss by the amounts shown below.
This analysis assumes that all other variables, in particular foreign currency rates, remain
constant. The analysis is performed on the same basis for 2013.
30 September 2014 31 December 2013
Profit or loss Profit or loss
15 bp
increase
15 bp
decrease
15 bp
increase
15 bp
decrease
$ $ $ $
Cash and cash equivalents 205,106 (123,064) 175,977 (93,854)
APPENDIX B – UNAUDITED INTERIM CONSOLIDATED FINANCIAL
STATEMENTS FOR THE NINE MONTHS ENDED 30 SEPTEMBER 2014
B-56
Price risk
The Group’s exposure to price risk relates to changes in the dealing price of unit trust and
Singapore government securities for unexecuted orders placed. The Group has established
procedures to detect such orders and to report such incidences to management. The
management has also taken up a professional indemnity insurance and the amount insured
is reviewed annually. The Group’s exposure to price risk also includes the risk that changes
in market prices will affect the Group’s income or the value of its holdings in investments in
debt/equity securities.
Sensitivity analysis – securities price risk
A 5% increase in the underlying security prices of the Group’s available-for-sale quoted debt
securities at the reporting date would increase equity by $90,120 (2013: $100,575). This
analysis assumes that all other variables remain constant.
A 5% decrease in the underlying security prices would have had the equal but opposite
effect to the amounts shown above, on the basis that all other variables remain constant.
Capital management
The primary objective of the Group’s capital management is to ensure that it maintains
healthy capital ratios in order to support its business and maximise shareholders value.
The Group manages its capital structure and makes alignment to it, in light of changes in
economic conditions. To maintain or adjust the capital structure, the Group may align the
dividend payment to shareholders, return capital to shareholders or issue new shares.
There were no changes in the Group’s approach to capital management during the period.
Some of the subsidiaries are required to maintain sufficient financial resources by the local
regulators in the respective jurisdictions in which they operate to ensure that the relevant
regulatory limits are complied with.
Determination of fair values
A number of the Group’s accounting policies and disclosures require the determination of
fair value for financial assets and liabilities. Fair values have been determined for
measurement and/or disclosure purposes based on the following methods. When
applicable, further information about the assumptions made in determining fair values is
disclosed in the notes specific to that asset or liability.
Investment in quoted debt securities
The fair value of available-for-sale quoted debt securities is determined by reference to its
bid price at the reporting date.
APPENDIX B – UNAUDITED INTERIM CONSOLIDATED FINANCIAL
STATEMENTS FOR THE NINE MONTHS ENDED 30 SEPTEMBER 2014
B-57
Intra-group financial guarantees
The value of financial guarantees provided by the Company to its subsidiaries is determined
by reference to the difference in the interest rates, by comparing the actual rates charged
by the bank with these guarantees made available, with the estimated rates that the banks
would have charged had these guarantees not been available.
Other financial assets and liabilities
The carrying amounts of financial assets and liabilities with a maturity of less than one year
(including trade and other receivables, cash and cash equivalents and trade and other
payables) are assumed to approximate their fair values because of the short period to
maturity. For unsecured bank loan, the fair value is calculated based on the present value
of future principal and interest cash flows, discounted at the market rate of interest at the
reporting date.
Accounting classifications and fair values
The carrying amounts and fair values of financial assets and liabilities, including their levels
in the fair value hierarchy are as follows. It does not include fair value information for
financial assets and financial liabilities not measured at fair value if the carrying amount is
a reasonable approximation of fair value.
APPENDIX B – UNAUDITED INTERIM CONSOLIDATED FINANCIAL
STATEMENTS FOR THE NINE MONTHS ENDED 30 SEPTEMBER 2014
B-58
Total carrying amount Fair value
Note
Loans and
receivables
Available-
for-sale
Other
financial
liabilities Total Level 1
$ $ $ $ $
As at 30 September
2014
Financial assets
measured at fair value
Available-for-sale debt
securities 10 – 1,802,402 – 1,802,402 1,802,402
Financial assets not
measured at fair value
Cash and cash
equivalents 11 15,185,214 – – 15,185,214
Trade and other
receivables 9 17,940,430 – – 17,940,430
33,125,644 – – 33,125,644
Financial liabilities not
measured at fair value
Trade and other
payables 15 – – (19,713,073) (19,713,073)
As at 31 December
2013
Financial assets
measured at fair value
Available-for-sale debt
securities 10 – 2,011,502 – 2,011,502 2,011,502
Financial assets not
measured at fair value
Cash and cash
equivalents 11 16,718,909 – – 16,718,909
Trade and other
receivables 9 16,763,911 – – 16,763,911
33,482,820 – – 33,482,820
Financial liabilities not
measured at fair value
Trade and other
payables 15 – – (13,188,757) (13,188,757)
APPENDIX B – UNAUDITED INTERIM CONSOLIDATED FINANCIAL
STATEMENTS FOR THE NINE MONTHS ENDED 30 SEPTEMBER 2014
B-59
25 Commitments
As at 30 September 2014, the Group have the following commitments:
(a) Future minimum lease payments in respect of non-cancellable operating leases are as
follows:
30 September
2014
31 December
2013
$ $
Within 1 year 4,442,535 3,908,357
Within 2 to 5 years 8,112,033 5,283,689
12,554,568 9,192,046
The Group leases a number of office premises under operating leases. The leases
typically run for initial period of three to six years, with an option to renew the lease
after that date.
(b) Capital expenditure in respect of plant and equipment are as follows:
30 September
2014
31 December
2013
$ $
Contracted but not provided for 141,115 35,428
(c) Under regulatory requirements, some of the subsidiaries are required to maintain
sufficient capital to ensure that the relevant regulatory limits as set out by the
authorities are complied with. The Company has commitment to contribute additional
capital as and when the subsidiaries’ capital fall below the relevant regulatory limits.
26 Related parties
Key management personnel compensation
Compensation paid or payable to key management personnel comprise:
1 January
2014 to
30 September
2014
1 January
2013 to
30 September
2013
$ $
Fees to non-executive directors 294,000 159,700
Remuneration paid or payable to key management
personnel
– short-term employment benefits 1,980,066 1,542,451
– shared-based payment 90,987 18,995
APPENDIX B – UNAUDITED INTERIM CONSOLIDATED FINANCIAL
STATEMENTS FOR THE NINE MONTHS ENDED 30 SEPTEMBER 2014
B-60
Directors and key management personnel also participate in the Company’s Share Option
Scheme. During the period ended 30 September 2014, 453,000 share options (30
September 2013: 416,250) was granted to directors and key management personnel of the
Group. As at 30 September 2014, 829,250 (2013: 531,420) of those share options were
outstanding.
Other related party transactions
For the purpose of these financial statements, parties are considered to be related to the
Group if the Group entities have the ability, directly or indirectly, to control the party or
exercise significant influence over the party in making financial and operating decisions, or
vice versa, or where the Group entities are subject to common control or common significant
influence. Related parties may be individuals or entities.
Other than disclosed elsewhere in the financial statements, there were no other
transactions with the Group and related parties during the reporting period.
27 Subsequent event
On 14 November 2014, the Board of Directors of the Company approved for every 1
ordinary share in the issued and paid-up share capital of the Company be sub-divided into
6 ordinary shares in the capital of the Company. The sub-division was completed on 20
November 2014.
28 Comparative information
The comparative financial information for the nine months ended 30 September 2013 have
not been audited nor reviewed.
APPENDIX B – UNAUDITED INTERIM CONSOLIDATED FINANCIAL
STATEMENTS FOR THE NINE MONTHS ENDED 30 SEPTEMBER 2014
B-61
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iFAST Corporation Ltd.
and its Subsidiaries
Registration Number: 200007899C
Unaudited Pro Forma Consolidated Financial Information
Financial year ended 31 December 2013 and
nine months ended 30 September 2014
APPENDIX C – UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL
INFORMATION FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2013
AND THE NINE MONTHS ENDED 30 SEPTEMBER 2014
C-1
Independent auditors’ report on the compilation of Unaudited Pro Forma Consolidated
Financial Information included in a Prospectus
The Board of Directors
iFAST Corporation Ltd. and its subsidiaries
We have completed our assurance engagement to report on the compilation of pro forma
consolidated financial information of iFAST Corporation Ltd. (the Company) by the management
of the Company (the Management). The pro forma consolidated financial information of the
Company and its subsidiaries (the “Pro Forma Group”) consists of the:
(a) pro forma consolidated statements of financial position as at 31 December 2013 and
30 September 2014;
(b) pro forma consolidated statements of profit or loss and consolidated statements of
comprehensive income for the year ended 31 December 2013 and the nine months ended
30 September 2014;
(c) pro forma consolidated statements of cash flows for the year ended 31 December 2013 and
the nine months ended 30 September 2014; and
related notes (the Unaudited Pro Forma Consolidated Financial Information) as set out on pages
C-5 to C-27 of the prospectus (the Prospectus) to be issued in connection with the offering of
shares in the Company (the Offering). The Unaudited Pro Forma Consolidated Financial
Information of the Group has been prepared for illustrative purposes only and are based on certain
assumptions, after making certain adjustments. The applicable criteria (the Criteria) on the basis
of which the Management has compiled the Unaudited Pro Forma Consolidated Financial
Information are described in Note 3.
The Unaudited Pro Forma Consolidated Financial Information has been compiled by the
Management to illustrate the impact of the following transactions (the Transactions) set out in
Note 2 on the Pro Forma Group’s financial position as at 31 December 2013 and 30 September
2014 as if the Transactions had taken place on 31 December 2013 and 30 September 2014
respectively, and its financial performance and cash flows for the year ended 31 December 2013
and the nine months ended 30 September 2014 as if the Transactions had taken place on
1 January 2013:
(a) the disposal of iFAST India Investment Pte. Ltd. (“iFAST India”) and its subsidiary to
Pecuniam Pte. Ltd. (the Disposal); and
(b) the declaration and payment of dividends subsequent to 31 December 2013 (the Dividend
Payment).
As part of this process, information about the Pro Forma Group’s financial position, financial
performance and cash flows has been extracted by the Management from the audited
consolidated financial statements of the Group for the year ended 31 December 2013 and the
unaudited consolidated financial statements of the Group for the nine months ended
30 September 2014.
APPENDIX C – UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL
INFORMATION FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2013
AND THE NINE MONTHS ENDED 30 SEPTEMBER 2014
C-2
The Management’s responsibility for the Unaudited Pro Forma Consolidated Financial Information
The Management is responsible for compiling the Unaudited Pro Forma Consolidated Financial
Information on the basis of the Criteria.
The Reporting Accountants’ responsibility
Our responsibility is to express an opinion about whether the Unaudited Pro Forma Financial
Information has been compiled, in all material respects, by the Management on the basis of the
Criteria.
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 (the ISCA). This standard requires that the Reporting Accountants comply with
ethical requirements and plan and perform procedures to obtain reasonable assurance about
whether the Management has compiled, in all material respects, the Unaudited Pro Forma
Consolidated Financial Information on the basis of the Criteria.
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 Unaudited Pro Forma
Consolidated Financial Information, nor have we, in the course of this engagement, performed an
audit or review of the financial information used in compiling the Unaudited Pro Forma
Consolidated Financial Information.
The purpose of pro forma consolidated financial information included in a Prospectus is solely to
illustrate the impact of a significant event or 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 consolidated financial
information has been compiled, in all material respects, on the basis of the Criteria involves
performing procedures to assess whether the Criteria used by the Management in the compilation
of the pro forma consolidated 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 basis of Criteria; and
• the pro forma consolidated financial information reflects the proper application of those
adjustments to the unadjusted financial information.
The procedures selected depend on the Reporting Accountants’ judgement, having regard to his
understanding of the nature of the company, event or transaction in respect of which the pro forma
consolidated financial information has been compiled, and other relevant engagement
circumstances.
The engagement also involves evaluating the overall presentation of the pro forma consolidated
financial information.
APPENDIX C – UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL
INFORMATION FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2013
AND THE NINE MONTHS ENDED 30 SEPTEMBER 2014
C-3
We believe that the evidence we have obtained is sufficient and appropriate to provide a basis for
our opinion.
Opinion
In our opinion:
(a) the Unaudited Pro Forma Consolidated Financial Information has been compiled:
(i) in a manner consistent with the accounting policies adopted by the Company in its latest
audited consolidated financial statements, which are in accordance with Singapore
Financial Reporting Standards; and
(ii) on the basis of the Criteria stated in Note 3 of the Unaudited Pro Forma Consolidated
Financial Information; and
(b) each material adjustment made to the information used in the preparation of the Unaudited
Pro Forma Consolidated Financial Information is appropriate for the purpose of preparing
such unaudited financial information.
This letter has been prepared for inclusion in the Prospectus of the Company to be issued in
connection with the initial public offering of the shares by the Company.
KPMG LLP
Public Accountants and
Chartered Accountants
Singapore
4 December 2014
Jeya Poh Wan S/O K. Suppiah
Partner
APPENDIX C – UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL
INFORMATION FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2013
AND THE NINE MONTHS ENDED 30 SEPTEMBER 2014
C-4
Unaudited pro forma consolidated statements of financial position
As at 31 December 2013 and 30 September 2014
Note
31 December
2013
30 September
2014
$ $
Assets
Plant and equipment 1,633,848 1,726,598
Intangible assets 663,838 1,339,369
Associate – 400,539
Deferred tax assets 34,559 21,618
Other investments 2,011,502 1,802,402
Club membership 11,429 11,429
Total non-current assets 4,355,176 5,301,955
Current tax receivable 5,489 29,935
Trade and other receivables 16,763,911 17,940,430
Prepayments 613,549 497,284
Cash at bank and in hand 5 5,374,204 8,334,769
Money market funds 5 426,386 36,267
Total current assets 23,183,539 26,838,685
Held under trust
Client bank accounts 100,599,080 121,552,395
Client ledger balances (100,599,080) (121,552,395)
– –
Total assets 27,538,715 32,140,640
Equity
Share capital 10,670,001 11,379,244
Reserves 2,377,428 7,362,197
Equity attributable to owners of the Company 13,047,429 18,741,441
Non-controlling interests 658,049 –
Total equity 13,705,478 18,741,441
Liabilities
Deferred tax liabilities 76,746 125,385
Other payables 353,400 176,700
Total non-current liabilities 430,146 302,085
Trade and other payables 12,835,357 12,722,195
Current tax payable 567,734 374,919
Total current liabilities 13,403,091 13,097,114
Total liabilities 13,833,237 13,399,199
Total equity and liabilities 27,538,715 32,140,640
The accompanying notes form an integral part of these financial information.
APPENDIX C – UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL
INFORMATION FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2013
AND THE NINE MONTHS ENDED 30 SEPTEMBER 2014
C-5
Unaudited pro forma consolidated statements of profit or loss
Year ended 31 December 2013 and nine months ended 30 September 2014
Note
Year ended
31 December
2013
Nine months
ended
30 September
2014
$ $
Continuing operations
Revenue 6 69,638,873 58,594,961
Commission and fee paid or payable to
third party financial advisers (37,884,235) (31,267,490)
31,754,638 27,327,471
Other operating income 163,971 208,863
Gain on distribution to owners of the Company 617,650 –
Depreciation of plant and equipment (703,506) (579,825)
Amortisation of intangible assets (168,621) (143,920)
Staff costs (13,310,605) (11,249,735)
Other operating expenses (9,398,966) (7,679,447)
Results from operating activities 8,954,561 7,883,407
Finance income 39,528 73,980
Finance expense (10,376) –
Net finance income 29,152 73,980
Share of result of associate, net of tax – 382
Profit before tax 8,983,713 7,957,769
Tax expense (572,751) (380,566)
Profit from continuing operations 8,410,962 7,577,203
Discontinued operation
Loss from discontinued operation, net of tax 7 (2,516,813) –
Profit for the year/period 8 5,894,149 7,577,203
Profit attributable to:
Owners of the Company from continuing
operations 8,643,147 7,614,892
Owners of the Company from discontinued
operation (2,516,813) –
Non-controlling interests from continuing
operations (232,185) (37,689)
Profit for the year/period 5,894,149 7,577,203
Earnings per share from continuing
operations
Basic earnings per share (cents) 9 4.3 3.8
Diluted earnings per share (cents) 9 4.2 3.7
The accompanying notes form an integral part of these financial information.
APPENDIX C – UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL
INFORMATION FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2013
AND THE NINE MONTHS ENDED 30 SEPTEMBER 2014
C-6
Unaudited pro forma consolidated statements of comprehensive income
Year ended 31 December 2013 and nine months ended 30 September 2014
Note
Year ended
31 December
2013
Nine months
ended
30 September
2014
$ $
Profit for the year/period 5,894,149 7,577,203
Other comprehensive income
Items that are or may be reclassified
subsequently to profit or loss:
Net change in fair value of available-for-sale
financial assets 35,562 76,990
Net change in fair value of available-for-sale
financial assets reclassified to profit or loss (76,402) (99,464)
Fair value of available-for-sale financial assets on
disposal of discontinued operation reclassified to
profit or loss (250,430) –
Foreign currency translation differences for
foreign operations 20,088 63,073
Foreign currency translation differences on
disposal of discontinued operation reclassified to
profit or loss 2,849,138 –
Other comprehensive income for the
year/period, net of tax 2,577,956 40,599
Total comprehensive income for the
year/period 8,472,105 7,617,802
Attributable to:
Owners of the Company 8,721,612 7,650,152
Non-controlling interests (249,507) (32,350)
Total comprehensive income for the
year/period 8,472,105 7,617,802
The accompanying notes form an integral part of these financial information.
APPENDIX C – UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL
INFORMATION FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2013
AND THE NINE MONTHS ENDED 30 SEPTEMBER 2014
C-7
Unaudited pro forma consolidated statements of cash flows
Year ended 31 December 2013 and nine months ended 30 September 2014
Year ended
31 December
2013
Nine months
ended
30 September
2014
$ $
Cash flows from operating activities
Profit for the year/period 5,894,149 7,577,203
Adjustments for:
Depreciation of plant and equipment 703,506 579,825
Loss/(Gain) on disposal of plant and equipment 112 (39)
Amortisation of intangible assets 168,621 143,920
Impairment loss on trade receivables, net 7,857 2,818
Bad debts written off 2,073 35,452
Equity settled share-based payment transactions 62,301 248,016
Dividend income on available-for-sale quoted
debt securities, net (20,432) (16,753)
Gain on redemption of quoted debt securities (76,402) (99,464)
Share of result of associate – (382)
Dividend income on investment in associate – (3,727)
Unrealised exchange (gain)/loss, net (27,187) 35,409
Gain on realisation of intangible assets (81,895) –
Gain on distribution to owners of the Company (617,650) –
Translation reserve realised, loss 2,849,138 –
Fair value reserve realised, gain (250,430) –
Finance income (39,528) (73,980)
Finance expense 10,376 –
Tax expense 572,751 380,566
9,157,360 8,808,864
Change in trade and other receivables (2,233,796) (1,516,664)
Change in trade and other payables 2,335,391 306,124
Cash generated from operations 9,258,955 7,598,324
Taxes paid (633,834) (536,238)
Interest received 39,528 73,980
Interest paid (10,376) –
Net cash from operating activities 8,654,273 7,136,066
Cash flows from investing activities
Purchase of plant and equipment (833,561) (670,191)
Purchase of intangible assets (131,699) (995,730)
Proceeds from disposal of plant and equipment 460 39
Acquisition of associate – (400,157)
Proceeds from redemption of quoted debt
securities 1,500,302 3,302,844
Purchase of available-for-sale quoted debt
securities – (3,000,000)
Disposal of discontinued operation, net of cash
disposed of (2,257,709) –
Net cash used in investing activities (1,722,207) (1,763,195)
The accompanying notes form an integral part of these financial information.
APPENDIX C – UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL
INFORMATION FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2013
AND THE NINE MONTHS ENDED 30 SEPTEMBER 2014
C-8
Unaudited pro forma consolidated statements of cash flows
Year ended 31 December 2013 and nine months ended 30 September 2014 (cont’d)
Note
Year ended
31 December
2013
Nine months
ended
30 September
2014
$ $
Cash flows from financing activities
Dividends paid to owners of the Company (14,276,894) –
Proceeds from exercise of share options 365,988 709,243
Payment on acquisition of additional interests in
subsidiaries – (3,539,098)
Repayment of unsecured bank loan (748,189) –
Net cash used in financing activities (14,659,095) (2,829,855)
Net (decrease)/increase in cash and cash
equivalents (7,727,029) 2,543,016
Cash and cash equivalents at 1 January 13,540,693 5,800,590
Effect of exchange rate fluctuations on cash held (13,074) 27,430
Cash and cash equivalents at 31 December/
30 September 5 5,800,590 8,371,036
The accompanying notes form an integral part of these financial information.
APPENDIX C – UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL
INFORMATION FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2013
AND THE NINE MONTHS ENDED 30 SEPTEMBER 2014
C-9
Notes to the Unaudited Pro Forma Consolidated Financial Information
These notes form an integral part of the financial information.
1 Introduction
The unaudited pro forma consolidated financial information has been prepared for inclusion
in the prospectus (the Prospectus) to be issued in connection with the proposed Listing of
iFAST Corporation Ltd. (the Company) on the Singapore Exchange Securities Trading
Limited (the SGX-ST).
The unaudited pro forma consolidated financial information comprise the unaudited pro
forma consolidated statements of financial position of the Company and its subsidiaries (the
Group) as at 31 December and 30 September 2014, the unaudited pro forma consolidated
statements of profit or loss, the unaudited pro forma consolidated statements of
comprehensive income and the unaudited pro forma consolidated statements of cash flows
of the Group for the year ended 31 December 2013 and the nine months ended 30
September 2014, and the notes thereon (collectively, the Unaudited Pro Forma Consolidated
Financial Information). The Unaudited Pro Forma Consolidated Financial Information should
be read in conjunction with the audited consolidated financial statements of the Group for the
financial year ended 31 December 2013 and the unaudited interim consolidated financial
statements of the Group for the nine months ended 30 September 2014 as set out in
Appendix A and Appendix B of the Prospectus respectively.
2 Transactions
2.1 Disposal of iFAST India Investment Pte. Ltd. and its subsidiary (the Disposal)
On 3 October 2013, the Company and Deutsche Asia Pacific Holdings Pte. Ltd. sold their
entire shares in iFAST India Investment Pte. Ltd. (“iFAST India”) and its subsidiary to
Pecuniam Pte. Ltd. (“Pecuniam”), for considerations of $1,699,668 and $1,733,001
respectively, which was financed by a convertible loan receivable of $3,332,669 and an
advance of $100,000 from the Company to Pecuniam. The convertible loan receivable was
converted to Pecuniam shares subsequently. In addition, the Company injected $400,000
into Pecuniam.
On 30 October 2013, the Company declared a special interim dividend amounting to
$3,832,669, satisfied by way of a distribution in specie of the entire Pecuniam shares held
by the Company.
The Group excluding iFAST India and its subsidiary are herein referred to as the “Pro Forma
Group” for the purposes of this unaudited pro forma consolidated financial information.
2.2 Declaration and payment of dividends subsequent to 31 December 2013 include:–
(i) 2013 final dividend of 3.9 cents per share amounting to $1,321,004 declared on 14
February 2014 and paid on 7 May 2014;
(ii) 2014 interim dividend of 2.5 cents per share amounting to $846,797 declared on 28
April 2014 and paid on 7 May 2014;
APPENDIX C – UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL
INFORMATION FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2013
AND THE NINE MONTHS ENDED 30 SEPTEMBER 2014
C-10
(iii) 2014 interim dividend of 5.7 cents per share amounting to $1,936,340 declared on 1
August 2014 and paid on 29 August 2014; and
(iv) 2014 interim dividend of 20.0 cents per share amounting to $6,814,178 declared on 1
September 2014 and to be paid on 5 November 2014.
2.3 The above transactions are collectively referred to as the Transactions.
3 Basis of criteria of the unaudited pro forma consolidated financial information
The unaudited pro forma consolidated financial information set out in this report, expressed
in Singapore dollars, has been prepared for illustrative purposes only and is based on certain
assumptions, after making certain adjustments, to show that:
(i) the unaudited pro forma consolidated statements of financial position of the Group as
at 31 December 2013 and 30 September 2014 would have been if the Transactions had
occurred on 31 December 2013 and 30 September 2014, respectively;
(ii) the unaudited pro forma consolidated statements of profit or loss and statements of
comprehensive income of the Group for the year ended 31 December 2013 and nine
months ended 30 September 2014 would have been if the Transactions had occurred
on 1 January 2013; and
(iii) the unaudited pro forma consolidated statements of cash flows of the Group for the year
ended 31 December 2013 and nine months ended 30 September 2014 would have been
if the Transactions had occurred on 1 January 2013.
3.1 Objective of unaudited pro forma consolidated financial information
The objective of the unaudited pro forma consolidated financial information is to show what
the financial position, financial performance and cash flows of the Pro Forma Group might
have been, had the Transactions occurred at the respective dates as described above.
However, the unaudited pro forma consolidated financial information of the Group is not
necessarily indicative of the financial position, financial performance and cash flows of the
Pro Forma Group that would have been attained had the Transactions actually occurred on
those dates. The unaudited pro forma consolidated financial information has been prepared
for illustrative purposes only and, because of its nature, may not give a true picture of the Pro
Forma Group’s actual financial position, financial performance or cash flows.
The unaudited pro forma consolidated financial information of the Pro Forma Group for the
year ended 31 December 2013 and nine months ended 30 September 2014 have been
compiled based on the following:
(i) the audited consolidated financial statements of the Group for the year ended
31 December 2013 and the unaudited interim consolidated financial statements of the
Group for the nine months ended 30 September 2014 which were prepared in
accordance with the Singapore Financial Reporting Standards.
APPENDIX C – UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL
INFORMATION FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2013
AND THE NINE MONTHS ENDED 30 SEPTEMBER 2014
C-11
The audited consolidated financial statements of the Group for the year ended 31
December 2013 and the unaudited interim consolidated financial statements of the
Group for the nine months ended 30 September 2014 were audited and reviewed by
KPMG LLP Singapore, Public Accountants and Chartered Accountants. The auditors’
report on these consolidated financial statements was not subject to any qualifications,
modifications or disclaimers.
(ii) the accounting policies of the Group as set out in the audited consolidated financial
statements for the years ended 31 December 2011, 2012 and 2013 and unaudited
interim consolidated financial statements for the nine months ended 30 September
2014 included in Appendix A and Appendix B of the Prospectus respectively.
3.2 Unaudited pro forma consolidated statements of financial position
In arriving at the unaudited pro forma consolidated statements of financial position as at 31
December 2013 and 30 September 2014, the following key adjustment was made:
(i) Adjustments to reflect the declaration and payment of dividends subsequent to 31
December 2013 as described in Note 2.2, as if the declaration and payment of these
dividends had taken place on 31 December 2013 and 30 September 2014.
3.3 Unaudited pro forma consolidated statements of profit or loss and statements of
comprehensive income
In arriving at the unaudited pro forma consolidated statements of profit or loss and
statements of comprehensive income for the year ended 31 December 2013 and the nine
months ended 30 September 2014, the following key adjustments and assumptions were
made:
(i) The disposal of iFAST India and its subsidiary to Pecuniam and the distribution in
specie of the entire Pecuniam shares are accounted for as if the Disposal had taken
place at 1 January 2013 based on the same information set out under Note 2.1.
Therefore, no adjustments are made to the considerations and carrying amounts of net
assets disposed. Accordingly, no adjustment is made to the gain on distribution to
owners of the Company arising from the distribution in specie.
(ii) Adjustments to reverse the results attributable to the Disposal, comprising the
followings:
a. Loss from iFAST India and its subsidiary for the nine months ended 30 September
2013; and
b. Service fee charged to iFAST India and its subsidiary for the nine months ended
30 September 2013.
APPENDIX C – UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL
INFORMATION FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2013
AND THE NINE MONTHS ENDED 30 SEPTEMBER 2014
C-12
3.4 Unaudited pro forma consolidated statements of cash flows
In arriving at the unaudited pro forma consolidated statements of cash flows for the year
ended 31 December 2013 and the nine months ended 30 September 2014, the following key
adjustments and assumptions were made:
(i) The disposal of iFAST India and its subsidiary to Pecuniam and the distribution in
specie of the entire Pecuniam shares are accounted for as if the Disposal had taken
place at 1 January 2013 based on the same information set out under Note 2.1.
Therefore, no adjustments are made to the considerations and carrying amounts of net
assets disposed. Accordingly, no adjustment is made to the gain on distribution to
owners of the Company arising from the distribution in specie.
(ii) Adjustments to reverse the results attributable to the Disposal, comprising the
followings:
a. Loss from iFAST India and its subsidiary for the nine months ended 30 September
2013; and
b. Service fee charged to iFAST India and its subsidiary for the nine months ended
30 September 2013.
(iii) Adjustments to reflect the declaration and payment of dividends subsequent to 31
December 2013 as described in Note 2.2.
4 Pro forma adjustments
Statement of adjustments for the unaudited pro forma consolidated statements of
financial position of the pro forma group
The unaudited pro forma consolidated statements of financial position of the pro forma group
as at 31 December 2013 and 30 September 2014 has been prepared for inclusion in the
Prospectus and is presented below. Details of the pro forma adjustments and assumptions
made are set out in the Basis of Criteria of the Unaudited Pro Forma Consolidated Financial
Information in Note 3.
APPENDIX C – UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL
INFORMATION FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2013
AND THE NINE MONTHS ENDED 30 SEPTEMBER 2014
C-13
Statement of adjustments for the unaudited pro forma consolidated statements of
financial position of the pro forma group
As at 31 December 2013
Note
Audited
Consolidated
Statement of
Financial
Position
Pro Forma
Adjustment
Note 3.2(i)
Unaudited
Pro Forma
Consolidated
Statement of
Financial
Position
$ $ $
Assets
Plant and equipment 1,633,848 – 1,633,848
Intangible assets 663,838 – 663,838
Deferred tax assets 34,559 – 34,559
Other investments 2,011,502 – 2,011,502
Club membership 11,429 – 11,429
Total non-current assets 4,355,176 – 4,355,176
Current tax receivable 5,489 – 5,489
Trade and other receivables 16,763,911 – 16,763,911
Prepayments 613,549 – 613,549
Cash at bank and in hand 5 16,292,523 (10,918,319) 5,374,204
Money market funds 5 426,386 – 426,386
Total current assets 34,101,858 (10,918,319) 23,183,539
Held under trust
Client bank accounts 100,599,080 – 100,599,080
Client ledger balances (100,599,080) – (100,599,080)
– – –
Total assets 38,457,034 (10,918,319) 27,538,715
Equity
Share capital 10,670,001 – 10,670,001
Reserves 13,295,747 (10,918,319) 2,377,428
Equity attributable to owners
of the Company 23,965,748 (10,918,319) 13,047,429
Non-controlling interests 658,049 – 658,049
Total equity 24,623,797 (10,918,319) 13,705,478
Liabilities
Deferred tax liabilities 76,746 – 76,746
Other payables 353,400 – 353,400
Total non-current liabilities 430,146 – 430,146
Trade and other payables 12,835,357 – 12,835,357
Current tax payable 567,734 – 567,734
Total current liabilities 13,403,091 – 13,403,091
Total liabilities 13,833,237 – 13,833,237
Total equity and liabilities 38,457,034 (10,918,319) 27,538,715
APPENDIX C – UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL
INFORMATION FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2013
AND THE NINE MONTHS ENDED 30 SEPTEMBER 2014
C-14
Statement of adjustments for the unaudited pro forma consolidated statements of
financial position of the pro forma group
As at 30 September 2014
Note
Unaudited
Consolidated
Statement of
Financial
Position
Pro Forma
Adjustment
Note 3.2(i)
Unaudited
Pro Forma
Consolidated
Statement of
Financial
Position
$ $ $
Assets
Plant and equipment 1,726,598 – 1,726,598
Intangible assets 1,339,369 – 1,339,369
Associate 400,539 – 400,539
Deferred tax assets 21,618 – 21,618
Other investments 1,802,402 – 1,802,402
Club membership 11,429 – 11,429
Total non-current assets 5,301,955 – 5,301,955
Current tax receivable 29,935 – 29,935
Trade and other receivables 17,940,430 – 17,940,430
Prepayments 497,284 – 497,284
Cash at bank and in hand 5 15,148,947 (6,814,178) 8,334,769
Money market funds 5 36,267 – 36,267
Total current assets 33,652,863 (6,814,178) 26,838,685
Held under trust
Client bank accounts 121,552,395 – 121,552,395
Client ledger balances (121,552,395) – (121,552,395)
– – –
Total assets 38,954,818 (6,814,178) 32,140,640
Equity
Share capital 11,379,244 – 11,379,244
Reserves 7,362,197 – 7,362,197
Equity attributable to owners
of the Company 18,741,441 – 18,741,441
Non-controlling interests – – –
Total equity 18,741,441 – 18,741,441
Liabilities
Deferred tax liabilities 125,385 – 125,385
Other payables 176,700 – 176,700
Total non-current liabilities 302,085 – 302,085
Trade and other payables 19,536,373 (6,814,178) 12,722,195
Current tax payable 374,919 – 374,919
Total current liabilities 19,911,292 (6,814,178) 13,097,114
Total liabilities 20,213,377 (6,814,178) 13,399,199
Total equity and liabilities 38,954,818 (6,814,178) 32,140,640
APPENDIX C – UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL
INFORMATION FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2013
AND THE NINE MONTHS ENDED 30 SEPTEMBER 2014
C-15
Statement of adjustments for the unaudited pro forma consolidated statements of profit or
loss of the pro forma group
The unaudited pro forma consolidated statements of profit or loss and statements of
comprehensive income of the pro forma group for the year ended 31 December 2013 and the nine
months ended 30 September 2014 have been prepared for inclusion in the Prospectus and is
presented below. Details of the pro forma adjustments and assumptions made are set out in the
Basis of Criteria of the Unaudited Pro Forma Consolidated Financial Information in Note 3.
Year ended 31 December 2013
Note
Audited
Consolidated
Statement of
Profit or Loss
Pro Forma
Adjustments
Note 3.3(ii)
Unaudited
Pro Forma
Consolidated
Statement of
Profit or Loss
$ $ $
Continuing operations
Revenue 6 69,470,123 168,750 69,638,873
Commission and fee paid or
payable to third party financial
advisers (37,884,235) – (37,884,235)
31,585,888 168,750 31,754,638
Other operating income 163,971 – 163,971
Gain on distribution to owners of the
Company 617,650 – 617,650
Depreciation of plant and equipment (703,506) – (703,506)
Amortisation of intangible assets (168,621) – (168,621)
Staff costs (13,310,605) – (13,310,605)
Other operating expenses (9,398,966) – (9,398,966)
Results from operating activities 8,785,811 168,750 8,954,561
Finance income 39,528 – 39,528
Finance expense (10,376) – (10,376)
Net finance income 29,152 – 29,152
Profit before tax 8,814,963 168,750 8,983,713
Tax expense (572,751) – (572,751)
Profit from continuing operations 8,242,212 168,750 8,410,962
Discontinued operation
Loss from discontinued operation,
net of tax 7 (3,151,835) 635,022 (2,516,813)
Profit for the year 8 5,090,377 803,772 5,894,149
Profit attributable to:
Owners of the Company from
continuing operations 8,474,397 168,750 8,643,147
Owners of the Company from
discontinued operation (2,713,106) 196,293 (2,516,813)
Non-controlling interests from
continuing operations (232,185) – (232,185)
Non-controlling interest from
discontinued operation (438,729) 438,729 –
Profit for the year 5,090,377 803,772 5,894,149
APPENDIX C – UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL
INFORMATION FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2013
AND THE NINE MONTHS ENDED 30 SEPTEMBER 2014
C-16
Statement of adjustments for the unaudited pro forma consolidated statement of
comprehensive income of the pro forma group
Year ended 31 December 2013
Audited
Consolidated
Statement of
Comprehensive
Income
Pro Forma
Adjustments
Note 3.3(ii)
Unaudited
Pro Forma
Consolidated
Statement of
Comprehensive
Income
$ $ $
Profit for the year 5,090,377 803,772 5,894,149
Other comprehensive income
Items that are or may be
reclassified subsequently to
profit or loss:
Net change in fair value of
available-for-sale financial
assets 235,403 (199,841) 35,562
Net change in fair value of
available-for-sale financial
assets reclassified to profit or
loss (732,457) 656,055 (76,402)
Fair value of available-for-sale
financial assets on disposal of
discontinued operation
reclassified to profit or loss (250,430) – (250,430)
Foreign currency translation
differences for foreign operations (327,573) 347,661 20,088
Foreign currency translation
differences on disposal of
discontinued operation
reclassified to profit or loss 2,849,138 – 2,849,138
Other comprehensive income
for the year, net of tax 1,774,081 803,875 2,577,956
Total comprehensive income
for the year 6,864,458 1,607,647 8,472,105
Attributable to:
Owners of the Company 7,946,593 775,019 8,721,612
Non-controlling interests (1,082,135) 832,628 (249,507)
Total comprehensive income
for the year 6,864,458 1,607,647 8,472,105
APPENDIX C – UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL
INFORMATION FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2013
AND THE NINE MONTHS ENDED 30 SEPTEMBER 2014
C-17
Statement of adjustments for the unaudited pro forma consolidated statement of profit or
loss of the pro forma group
Nine months ended 30 September 2014
Note
Unaudited
Consolidated
Statement of
Profit or Loss
Pro Forma
Adjustments
Note 3.3(ii)
Unaudited
Pro Forma
Consolidated
Statement of
Profit or Loss
$ $ $
Continuing operations
Revenue 6 58,594,961 – 58,594,961
Commission and fee paid or payable
to third party financial advisers (31,267,490) – (31,267,490)
27,327,471 – 27,327,471
Other operating income 208,863 – 208,863
Depreciation of plant and equipment (579,825) – (579,825)
Amortisation of intangible assets (143,920) – (143,920)
Staff costs (11,249,735) – (11,249,735)
Other operating expenses (7,679,447) – (7,679,447)
Results from operating activities 7,883,407 – 7,883,407
Finance income 73,980 – 73,980
Finance expense – – –
Net finance income 73,980 – 73,980
Share of result of associate,
net of tax 382 382
Profit before tax 7,957,769 – 7,957,769
Tax expense (380,566) – (380,566)
Profit from continuing operations 7,577,203 – 7,577,203
Discontinued operation
Loss from discontinued operation,
net of tax 7 – – –
Profit for the period 8 7,577,203 – 7,577,203
Profit attributable to:
Owners of the Company from
continuing operations 7,614,892 – 7,614,892
Non-controlling interests from
continuing operations (37,689) – (37,689)
Profit for the period 7,577,203 – 7,577,203
APPENDIX C – UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL
INFORMATION FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2013
AND THE NINE MONTHS ENDED 30 SEPTEMBER 2014
C-18
Statement of adjustments for the unaudited pro forma consolidated statement of
comprehensive income of the pro forma group
Nine months ended 30 September 2014
Note
Unaudited
Consolidated
Statement of
Comprehensive
Income
Pro Forma
Adjustments
Note 3.3(ii)
Unaudited
Pro Forma
Consolidated
Statement of
Comprehensive
Income
$ $ $
Profit for the period 7,577,203 – 7,577,203
Other comprehensive income
Items that are or may be
reclassified subsequently to
profit or loss:
Net change in fair value of
available-for-sale financial
assets 76,990 – 76,990
Net change in fair value of
available-for-sale financial
assets reclassified to profit
or loss (99,464) – (99,464)
Foreign currency translation
differences for foreign operations 63,073 – 63,073
Other comprehensive income
for the period, net of tax 40,599 – 40,599
Total comprehensive income
for the period 7,617,802 – 7,617,802
Attributable to:
Owners of the Company 7,650,152 – 7,650,152
Non-controlling interests (32,350) – (32,350)
Total comprehensive income
for the period 7,617,802 – 7,617,802
APPENDIX C – UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL
INFORMATION FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2013
AND THE NINE MONTHS ENDED 30 SEPTEMBER 2014
C-19
Statement of adjustments for the unaudited pro forma consolidated statement of cash
flows of the pro forma group
The unaudited pro forma consolidated statements of cash flows of the pro forma group for the year
ended 31 December 2013 and the nine months ended 30 September 2014 have been prepared
for inclusion in the Prospectus and is presented below. Details of the pro forma adjustments and
assumptions made are set out in the Basis of Criteria of the Unaudited Pro Forma Consolidated
Financial Information in Note 3.
Year ended 31 December 2013
Note
Audited
Consolidated
Statement of
Cash Flows
Pro Forma Adjustments
Unaudited
Pro Forma
Consolidated
Statement of
Cash Flows Note 3.4(ii) Note 3.4(iii)
$ $ $ $
Cash flows from operating
activities
Profit for the year 5,090,377 803,772 – 5,894,149
Adjustments for:
Depreciation of plant and equipment 743,682 (40,176) – 703,506
Loss on disposal of plant and
equipment 112 – – 112
Amortisation of intangible assets 259,208 (90,587) – 168,621
Impairment losses on trade
receivables, net 7,857 – – 7,857
Bad debt written off 2,073 – – 2,073
Equity settled share-based
payment transactions 62,301 – – 62,301
Dividend income on available-for-
sale quoted debt securities, net (20,432) – – (20,432)
Gain on redemption of quoted debt
securities (732,457) 656,055 – (76,402)
Unrealised exchange loss, net 12,245 (39,432) – (27,187)
Gain on realisation of intangible
assets (81,895) – – (81,895)
Gain on distribution to owners of the
Company (617,650) – – (617,650)
Translation reserve realised, loss 2,849,138 – – 2,849,138
Fair value reserve realised, gain (250,430) – – (250,430)
Finance income (39,528) – – (39,528)
Finance expense 10,376 – – 10,376
Tax expense 572,751 – – 572,751
7,867,728 1,289,632 – 9,157,360
Change in trade and other
receivables (2,521,309) 287,513 – (2,233,796)
Change in trade and other payables 2,383,865 (48,474) – 2,335,391
Cash generated from operations 7,730,284 1,528,671 – 9,258,955
APPENDIX C – UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL
INFORMATION FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2013
AND THE NINE MONTHS ENDED 30 SEPTEMBER 2014
C-20
Statement of adjustments for the unaudited pro forma consolidated statement of cash
flows of the pro forma group (cont’d)
Year ended 31 December 2013
Note
Audited
Consolidated
Statement of
Cash Flows
Pro Forma Adjustments
Unaudited
Pro Forma
Consolidated
Statement of
Cash Flows Note 3.4(ii) Note 3.4(iii)
$ $ $ $
Cash generated from operations
(balance brought forward) 7,730,284 1,528,671 – 9,258,955
Taxes paid (633,834) – – (633,834)
Interest received 39,528 – – 39,528
Interest paid (10,376) – – (10,376)
Net cash from operating activities 7,125,602 1,528,671 – 8,654,273
Cash flows from investing
activities
Purchase of plant and equipment (844,693) 11,132 – (833,561)
Purchase of intangible assets (131,699) – – (131,699)
Proceeds from disposal of plant and
equipment 460 – – 460
Proceeds from redemption of quoted
debt securities 5,125,468 (3,625,166) – 1,500,302
Purchase of available-for-sale
quoted debt securities (2,065,906) 2,065,906 – –
Disposal of discontinued operation,
net of cash disposed of (2,257,709) – – (2,257,709)
Net cash used in investing
activities (174,079) (1,548,128) – (1,722,207)
Cash flows from financing
activities
Dividends paid to owners of the
Company (3,358,575) – (10,918,319) (14,276,894)
Proceeds from exercise of share
options 365,988 – – 365,988
Repayment of unsecured bank loan (748,189) – – (748,189)
Net cash used in financing
activities (3,740,776) – (10,918,319) (14,659,095)
Net increase/(decrease) in cash
and cash equivalents 3,210,747 (19,457) (10,918,319) (7,727,029)
Cash and cash equivalents at
1 January 13,516,229 24,464 – 13,540,693
Effect of exchange rate fluctuations
on cash held (8,067) (5,007) – (13,074)
Cash and cash equivalents at
31 December 5 16,718,909 – (10,918,319) 5,800,590
APPENDIX C – UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL
INFORMATION FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2013
AND THE NINE MONTHS ENDED 30 SEPTEMBER 2014
C-21
Statement of adjustments for the unaudited pro forma consolidated statement of cash
flows of the pro forma group
Nine months ended 30 September 2014
Note
Unaudited
Consolidated
Statement of
Cash Flows
Pro Forma Adjustment
Unaudited
Pro Forma
Consolidated
Statement of
Cash Flows Note 3.4(ii) Note 3.4(iii)
$ $ $ $
Cash flows from operating
activities
Profit for the period 7,577,203 – – 7,577,203
Adjustments for:
Depreciation of plant and equipment 579,825 – – 579,825
Gain on disposal of plant and
equipment (39) – – (39)
Amortisation of intangible assets 143,920 – – 143,920
Impairment losses on trade
receivable, net 2,818 – – 2,818
Bad debt written off 35,452 – – 35,452
Equity settled share-based payment
transactions 248,016 – – 248,016
Dividend income on available-for-
sale quoted debt securities, net (16,753) – – (16,753)
Gain on redemption of quoted debt
securities (99,464) – – (99,464)
Share of result of associate (382) – – (382)
Dividend income on investment in
associate (3,727) – – (3,727)
Unrealised exchange loss, net 35,409 – – 35,409
Finance income (73,980) – – (73,980)
Tax expense 380,566 – – 380,566
8,808,864 – – 8,808,864
Change in trade and other
receivables (1,516,664) – – (1,516,664)
Change in trade and other payables 306,124 – – 306,124
Cash generated from operations 7,598,324 – – 7,598,324
Taxes paid (536,238) – – (536,238)
Interest received 73,980 – – 73,980
Net cash from operating activities 7,136,066 – – 7,136,066
APPENDIX C – UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL
INFORMATION FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2013
AND THE NINE MONTHS ENDED 30 SEPTEMBER 2014
C-22
Statement of adjustments for the unaudited pro forma consolidated statement of cash
flows of the pro forma group (cont’d)
Nine months ended 30 September 2014
Note
Unaudited
Consolidated
Statement of
Cash Flows
Pro Forma Adjustment
Unaudited
Pro Forma
Consolidated
Statement of
Cash Flows Note 3.4(i) Note 3.4(ii)
$ $ $ $
Cash flows from investing
activities
Purchase of plant and equipment (670,191) – – (670,191)
Purchase of intangible assets (995,730) – – (995,730)
Proceeds from disposal of plant and
equipment 39 – – 39
Acquisition of associate (400,157) – – (400,157)
Proceeds from redemption of quoted
debt securities 3,302,844 – – 3,302,844
Purchase of available-for-sale
quoted debt securities (3,000,000) – – (3,000,000)
Net cash used in investing
activities (1,763,195) – – (1,763,195)
Cash flows from financing
activities
Dividends paid to owners of the
Company (4,104,141) – 4,104,141 –
Proceeds from exercise of share
options 709,243 – – 709,243
Payment of acquisition of additional
interest in subsidiaries (3,539,098) – – (3,539,098)
Net cash used in financing
activities (6,933,996) – 4,104,141 (2,829,855)
Net (decrease)/increase in cash
and cash equivalents (1,561,125) – 4,104,141 2,543,016
Cash and cash equivalents at
1 January 16,718,909 – (10,918,319) 5,800,590
Effect of exchange rate fluctuations
on cash held 27,430 – – 27,430
Cash and cash equivalents at
30 September 5 15,185,214 – (6,814,178) 8,371,036
APPENDIX C – UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL
INFORMATION FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2013
AND THE NINE MONTHS ENDED 30 SEPTEMBER 2014
C-23
5 Cash and cash equivalents
31 December
2013
30 September
2014
$ $
Cash at bank and in hand 5,374,204 8,334,769
Money market funds 426,386 36,267
Cash and cash equivalents in the
statements of cash flows 5,800,590 8,371,036
The money market funds are included as cash and cash equivalents as they are considered
fully liquid investments readily convertible into known amount of cash and cash equivalents
which are subject to an insignificant risk of changes in value.
6 Revenue
Year ended
31 December
2013
Nine months ended
30 September
2014
$ $
Commission and fee income 67,026,255 56,638,292
Service fees 1,993,916 1,451,130
Advertising fees 500,703 266,596
Others 117,999 238,943
69,638,873 58,594,961
7 Loss from discontinued operation, net of tax
Year ended
31 December
2013
Nine months ended
30 September
2014
$ $
Gain on realisation of intangible assets 81,895 –
Translation reserve realised, loss (2,849,138) –
Fair value reserve realised, gain 250,430 –
(2,516,813) –
APPENDIX C – UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL
INFORMATION FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2013
AND THE NINE MONTHS ENDED 30 SEPTEMBER 2014
C-24
8 Profit for the year/period
The following items have been included in arriving at profit for the year/period:
Year ended
31 December
2013
Nine months ended
30 September
2014
$ $
Interest income
– from cash at bank (3,088) (40,353)
– from trust accounts (11,960) (20,202)
– from money market funds (24,058) (6,746)
– from loans and receivables (422) (6,679)
Impairment losses on trade
receivables, net 7,857 2,818
Unrealised exchange (gain)/loss, net (27,187) 35,409
Value of employee services received for
issue of share options, included
in staff costs 62,302 248,015
Contributions to defined contribution
plans, included in staff costs 1,020,636 819,424
Operating lease expense 3,988,787 3,024,351
Net change in fair value of available-for-
sale financial assets reclassified from
equity (76,402) (99,464)
9 Earnings per share from continuing operations
Basic earnings per share
Year ended
31 December
2013
Nine months ended
30 September
2014
$ $
Basic earnings per share is based on:
Net profit attributable to ordinary
shareholders 8,643,147 7,614,892
APPENDIX C – UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL
INFORMATION FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2013
AND THE NINE MONTHS ENDED 30 SEPTEMBER 2014
C-25
31 December
2013
31 December
2013
30 September
2014
No. of shares
As previously
reported
No. of shares
As restated*
No. of shares
Issued ordinary shares at
beginning of
the year/period 33,573,654 201,441,924 202,776,414
Effect of share options exercised
(Share Option Scheme) 101,534 609,204 522,426
Weighted average number of
ordinary shares at the end of the
year/period 33,675,188 202,051,128 203,298,840
Basic earnings per share (cents) 25.6 4.3 3.8
* adjusted for sub-division of every 1 ordinary share into 6 ordinary shares as completed by the Company on 20
November 2014
Diluted earnings per share
For the purpose of calculating the diluted earnings per ordinary share, the weighted average
number of ordinary shares in issue is adjusted to take into account the dilutive effect arising
from the dilutive share options under the Share Option Scheme, with the potential ordinary
shares weighted for the period outstanding.
Year ended
31 December
2013
Nine months ended
30 September
2014
$ $
Diluted earnings per share is based on:
Net profit attributable to ordinary
shareholders 8,643,147 7,614,892
APPENDIX C – UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL
INFORMATION FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2013
AND THE NINE MONTHS ENDED 30 SEPTEMBER 2014
C-26
The effect of the exercise of share options on the weighted average number of ordinary
shares in issue is as follows:
Year ended
31 December
2013
31 December
2013
Nine months
ended 30
September
2014
No. of shares
As previously
reported
No. of shares
As restated*
No. of shares
Weighted average number of:
Ordinary shares used in the
calculation of basic earnings per
share 33,675,188 202,051,128 203,298,840
Potential ordinary shares issuable
under:
– share options (Share Option
Scheme) 862,382 5,174,292 5,145,234
Weighted average number of
ordinary shares issued and
potential shares issuable
assuming full conversion at the
end of the year/period 34,537,570 207,225,420 208,444,074
Diluted earnings per share (cents) 25.0 4.2 3.7
* adjusted for sub-division of every 1 ordinary share into 6 ordinary shares as completed by the Company on 20
November 2014
Options to purchase 7,000 shares at $1.96 per share (2013: 22,800 shares at $1.96 per
share) issued in April 2007, and 117,400 shares at $2.40 per share (2013: 179,900 shares
at $2.40 per share) issued in July 2010, 781,814 shares at $3.60 per share (2013: Nil) issued
in April 2014 and 70,000 shares at $3.80 per share (2013: Nil) issued in August 2014 were
outstanding during the reporting period but not included in the computation of diluted
earnings per share for the corresponding period because these options were anti-dilutive.
The options, which expire on 31 March 2017, 30 June 2020, 31 March 2024 and 20 August
2024 respectively, are still outstanding as at 30 September 2014.
APPENDIX C – UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL
INFORMATION FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2013
AND THE NINE MONTHS ENDED 30 SEPTEMBER 2014
C-27
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The discussion below provides information about certain provisions of our Memorandum and
Articles of Association and the laws of Singapore. This description is only a summary and is
qualified by reference to Singapore law and our Articles.
The instruments that constitute and define our Company are the Memorandum and Articles of
Association of our Company.
REGISTRATION NUMBER
We are registered with the Accounting and Corporate Regulatory Authority (ACRA) under the
registration number 200007899C.
SUMMARY OF OUR ARTICLES OF ASSOCIATION
Directors
(a) Ability of interested directors to vote
Article 100
A Director shall not vote in respect of any contract or arrangement or any other proposal
whatsoever in which he has any personal material interest, directly or indirectly. A Director
shall not be counted in the quorum at a meeting in relation to any resolution on which he is
debarred from voting.
(b) Remuneration
Article 77
The ordinary remuneration of the Directors, which shall from time to time be determined by
an Ordinary Resolution of the Company, shall not be increased except pursuant to an
Ordinary Resolution passed at a General Meeting where notice of the proposed increase
shall have been given in the notice convening the General Meeting and shall (unless such
resolution otherwise provides) be divisible among the Directors as they may agree, or failing
agreement, equally, except that any Director who shall hold office for part only of the period
in respect of which such remuneration is payable shall be entitled only to rank in such
division for a proportion of remuneration related to the period during which he has held office.
Article 78
Any Director who holds any executive office, or who serves on any committee of the
Directors, or who otherwise performs services which in the opinion of the Directors are
outside the scope of the ordinary duties of a Director, may be paid such extra remuneration
by way of salary, commission or otherwise as the Directors may determine, provided that
such extra remuneration (in case of an executive Director) shall not be by way of commission
on or a percentage of turnover and (in the case of a non-executive Director) shall be a fixed
sum, and not by a commission on or a percentage of profits or turnover.
APPENDIX D – SUMMARY OF OUR ARTICLES OF ASSOCIATION
D-1
Article 79
The Directors may repay to any Director all such reasonable expenses as he may incur in
attending and returning from meetings of the Directors or of any committee of the Directors
or General Meetings or otherwise in or about the business of the Company.
Article 80
The Directors shall have power to pay and agree to pay pensions or other retirement,
superannuation, death or disability benefits to (or to any person in respect of) any Director
for the time being holding any executive office and for the purpose of providing any such
pensions or other benefits to contribute to any scheme or fund or to pay premiums.
(c) Borrowing
Article 108
Subject as hereinafter provided and to the provisions of the Statutes, the Directors may
exercise all the powers of the Company to borrow money, to mortgage or charge its
undertaking, property and uncalled capital and to issue debentures and other securities,
whether outright or as collateral security for any debt, liability or obligation of the Company
or of any third party.
(d) Retirement Age Limit
Article 89
At each Annual General Meeting, one-third of the Directors for the time being (or, if their
number is not a multiple of three (3), the number nearest to but not less than one-third) shall
retire from office by rotation, provided that no Director holding office as Managing Director
shall be subject to retirement by rotation or be taken into account in determining the number
of Directors to retire. For the avoidance of doubt, each Director (other than a Director holding
office as Managing Director) shall retire at least once every three (3) years.
Article 90
The Directors to retire by rotation shall include (so far as necessary to obtain the number
required) any Director who is due to retire at a General Meeting by reason of age or who
wishes to retire and not to offer himself for re-election. Any further Directors so to retire shall
be those of the other Directors subject to retirement by rotation who have been longest in
office since their last re-election or appointment and so that as between persons who
became or were last re-elected Directors on the same day, those to retire shall (unless they
otherwise agree among themselves) be determined by ballot. A retiring Director shall be
eligible for re-election.
APPENDIX D – SUMMARY OF OUR ARTICLES OF ASSOCIATION
D-2
Article 91
The Company at any General Meeting at which a Director retires under any provision of
these Articles may by Ordinary Resolution fill the office being vacated by electing thereto the
retiring Director or some other person eligible for appointment. In default, the retiring Director
shall be deemed to have been re-elected except in any of the following cases:–
(a) where at such meeting it is expressly resolved not to fill such office or a resolution for
the re-election of such Director is put to the meeting and lost; or
(b) where such Director has given notice in writing to the Company that he is unwilling to
be re-elected; or
(c) where the default is due to the moving of a resolution in contravention of the next
following Article; or
(d) where such Director has attained any retiring age applicable to him as Director.
The retirement shall not have effect until the conclusion of the meeting except where a
resolution is passed to elect some other person in the place of the retiring Director or a
resolution for his re-election is put to the meeting and lost and accordingly a retiring Director
who is re-elected or deemed to have been re-elected will continue in office without a break.
Article 92
A resolution for the appointment of two (2) or more persons as Directors by a single
resolution shall not be moved at any General Meeting unless a resolution that it shall be so
moved has first been agreed to by the meeting without any vote being given against it, and
any resolution moved in contravention of this provision shall be void.
(e) Shareholding Qualification
Article 76
A Director shall not be required to hold any shares of the Company by way of qualification.
A Director who is not a Member of the Company shall nevertheless be entitled to receive
notice of and to attend and speak at General Meetings.
Share Rights and Restrictions
(a) Rights, preferences and restrictions attaching to each class of shares
Article 3
(A) Subject to the Act and to these Articles, no shares may be issued by the Directors
without the prior approval of the Company in General Meeting pursuant to Section 161
of the Act, but subject thereto and the terms of such approval, and to Article 5, and to
any special rights attached to any shares for the time being issued, the Directors may
allot and issue shares or grant options over or otherwise dispose of the same to such
persons on such terms and conditions and for such consideration and at such time and
whether or not subject to the payment of any part of the amount thereof in cash or
otherwise as the Directors may think fit, and any shares may, subject to compliance with
APPENDIX D – SUMMARY OF OUR ARTICLES OF ASSOCIATION
D-3
Sections 70 and 75 of the Act, be issued with such preferential, deferred, qualified or
special rights, privileges, conditions or restrictions, whether as regards Dividend, return
of capital, participation in surplus assets and profits, voting, conversion or otherwise, as
the Directors may think fit, and preference shares may be issued which are or at the
option of the Company are liable to be redeemed, the terms and manner of redemption
being determined by the Directors in accordance with the Act, provided always that no
options shall be granted over unissued shares except in accordance with the Act and
the Designated Stock Exchange’s listing rules. The rights attached to any such shares
issued upon special conditions shall be clearly defined in these Articles.
(B) The Directors may, at any time after the allotment of any share but before any person
has been entered in the Register of Members as the holder, recognise a renunciation
thereof by the allottee in favour of some other person and may accord to any allottee
of a share a right to effect such renunciation upon and subject to such terms and
conditions as the Directors may think fit to impose.
(C) Except so far as otherwise provided by the conditions of issue or by these Articles, all
new shares shall be issued subject to the provisions of the Statutes and of these Articles
with reference to allotment, payment of calls, lien, transfer, transmission, forfeiture or
otherwise.
Article 8
(A) Preference shares may be issued subject to such limitation thereof as may be
prescribed by the Designated Stock Exchange. In particular, the total number of issued
preference shares shall not exceed the total number of issued ordinary shares issued
at any time. Preference shareholders shall have the same rights as ordinary
shareholders as regards receiving notices, reports and balance-sheets and attending
General Meetings of the Company, and preference shareholders shall also have the
right to vote at any General Meeting convened for the purpose of reducing capital or
winding-up or sanctioning a sale of the undertaking of the Company or where the
proposal to be submitted to the General Meeting directly affects their rights and
privileges or when the Dividend on the preference shares is in arrear for more than six
(6) months.
(B) The Company has power to issue further preference capital ranking equally with, or in
priority to, preference shares already issued.
Article 9
(A) Whenever the share capital of the Company is divided into different classes of shares,
the variation or abrogation of the special rights attached to any class may, subject to the
provisions of the Act, only be made either with the consent in writing of the holders of
three-quarters of the total voting rights of all the shares of the class or with the sanction
of a Special Resolution passed at a separate General Meeting of the holders of the
shares of the class (but not otherwise) and may be so made either whilst the Company
is a going concern or during or in contemplation of a winding-up. To every such separate
General Meeting all the provisions of these Articles relating to General Meetings of the
Company and to the proceedings thereat shall mutatis mutandis apply, except that the
necessary quorum shall be two (2) or more persons holding at least one-third of the total
voting rights of all the shares of the class present in person or by proxy or attorney and
that any holder of shares of the class present in person or by proxy or attorney may
APPENDIX D – SUMMARY OF OUR ARTICLES OF ASSOCIATION
D-4
demand a poll and that every such holder shall on a poll have one (1) vote for every
share of the class held by him where the class is a class of equity shares within the
meaning of Section 64(1) of the Act or at least one (1) vote for every share of the class
where the class is a class of preference shares within the meaning of Section 180(2) of
the Act, provided always that where the necessary majority for such a Special
Resolution is not obtained at such General Meeting, the consent in writing, if obtained
from the holders of three-quarters of the total voting rights of all the shares of the class
concerned within two (2) months of such General Meeting, shall be as valid and
effectual as a Special Resolution carried at such General Meeting.
(B) The provisions in Article 9(A) shall mutatis mutandis apply to any repayment of
preference capital (other than redeemable preference capital) and any variation or
abrogation of the rights attached to preference shares or any class thereof.
(C) The special rights attached to any class of shares having preferential rights shall not
unless otherwise expressly provided by the terms of issue thereof be deemed to be
varied by the creation or issue of further shares ranking as regards participation in the
profits or assets of the Company in some or all respects pari passu therewith but in no
respect in priority thereto.
Article 14
Every person whose name is entered as a Member in the Register of Members shall be
entitled, within ten market days (or such period as the Directors may determine having regard
to any limitation thereof as may be prescribed by the Designated Stock Exchange from time
to time) after the closing date of any application for shares or (as the case may be) the date
of lodgement of a registrable transfer to receive one (1) certificate for all his shares of any
one (1) class or to several certificates in reasonable denominations each for a part of the
shares so allotted or transferred.
Article 41
A reference to a Member shall be a reference to a registered holder of shares in the
Company, or where such registered holder is CDP, the Depositors on behalf of whom CDP
holds the shares, provided that:–
(a) a Depositor shall only be entitled to attend any General Meeting and to speak and vote
thereat if his name appears on the Depository Register maintained by CDP forty-eight
(48) hours before the General Meeting as a Depositor on whose behalf CDP holds
shares in the Company, the Company being entitled to deem each such Depositor, or
each proxy of a Depositor who is to represent the entire balance standing to the
Securities Account of the Depositor, to represent such number of shares as is actually
credited to the Securities Account of the Depositor as at such time, according to the
records of CDP as supplied by CDP to the Company, and where a Depositor has
apportioned the balance standing to his Securities Account between two (2) proxies, to
apportion the said number of shares between the two (2) proxies in the same proportion
as previously specified by the Depositor in appointing the proxies; and accordingly no
instrument appointing a proxy of a Depositor shall be rendered invalid merely by reason
of any discrepancy between the proportion of Depositor’s shareholding specified in the
instrument of proxy, or where the balance standing to a Depositor’s Securities Account
has been apportioned between two (2) proxies the aggregate of the proportions of the
APPENDIX D – SUMMARY OF OUR ARTICLES OF ASSOCIATION
D-5
Depositor’s shareholding they are specified to represent, and the true balance standing
to the Securities Account of a Depositor as at the time of the General Meeting, if the
instrument is dealt with in such manner as is provided above;
(b) the payment by the Company to CDP of any Dividend payable to a Depositor shall to
the extent of the payment discharge the Company from any further liability in respect of
the payment;
(c) the delivery by the Company to CDP of provisional allotments or share certificates in
respect of the aggregate entitlements of Depositors to new shares offered by way of
rights issue or other preferential offering or bonus issue shall to the extent of the
delivery discharge the Company from any further liability to each such Depositor in
respect of his individual entitlement; and
(d) the provisions in these Articles relating to the transfers, transmissions or certification of
shares shall not apply to the transfer of book-entry securities (as defined in the
Statutes).
Article 42
Except as required by the Statutes or law, no person shall be recognised by the Company as
holding any share upon any trust, and the Company shall not be bound by or compelled in
any way to recognise (even when having notice thereof) any equitable, contingent, future or
partial interest in any share, or any interest in any fractional part of a share, or (except only
as by these Articles or by the Statutes or law otherwise provided) any other right in respect
of any share, except an absolute right to the entirety thereof in the registered holder and
nothing in these Articles contained relating to CDP or to Depositors or in any depository
agreement made by the Company with any common depository for shares shall in any
circumstances be deemed to limit, restrict or qualify the above.
Article 63
In the case of joint holders of a share, any one (1) of such persons shall be entitled to vote,
but if more than one (1) of such persons is present at a meeting, the vote of the senior who
tenders a vote, whether in person or by proxy, shall be accepted to the exclusion of the votes
of the other joint holders and for this purpose seniority shall be determined by the name
which stands first in the Register of Members or, as the case may be, the order in which the
names appear in the Depository Register in respect of the joint holding.
Article 64
Where in Singapore or elsewhere a receiver or other person (by whatever name called) has
been appointed by any court claiming jurisdiction in that behalf to exercise powers with
respect to the property or affairs of any Member on the ground (however formulated) of
mental disorder, the Directors may in their absolute discretion, upon or subject to production
of such evidence of the appointment as the Directors may require, permit such receiver or
other person on behalf of such Member, to vote in person or by proxy at any General
Meeting, or to exercise any other right conferred by Membership in relation to meetings of the
Company.
APPENDIX D – SUMMARY OF OUR ARTICLES OF ASSOCIATION
D-6
Article 65
No Member shall be entitled in respect of shares held by him to vote at a General Meeting
either personally or by proxy or to exercise any other right conferred by Membership in
relation to General Meetings if any call or other sum payable by him to the Company in
respect of such shares remains unpaid. Conversely, a Member shall be entitled to be
present, and to vote in respect of shares held by him, at a General Meeting either personally
or by proxy or to exercise any other right conferred by membership in relation to General
Meetings if all call or other sums payable by him to the Company in respect of such shares
have been paid.
(b) Change in Capital
Article 10
The Company may by Ordinary Resolution:–
(a) consolidate and divide all or any of its share capital;
(b) sub-divide its shares, or any of them, provided always that in such subdivision the
proportion between the amount paid and the amount (if any) unpaid on each reduced
share shall be same as it was in the case of the share from which the reduced share is
derived;
(c) convert or exchange any class of shares into or for any other class of shares; and/or
(d) cancel the number of any shares which, at the date of the passing of the resolution in
that behalf have not been taken or agreed to be taken by any person or which have
been forfeited and diminish the amount of its share capital by the number of the shares
so cancelled.
Article 11
(A) The Company may reduce its share capital or any other undistributable reserve in any
manner permitted, and with, and subject to, any incident authorised, and consent or
confirmation required, by law.
(B) The Company may purchase or otherwise acquire its issued shares subject to and in
accordance with the provisions of the Statutes and any applicable rules of the
Designated Stock Exchange (hereafter, the “Relevant Laws”), on such terms and
subject to such conditions as the Company may in General Meeting prescribe in
accordance with the Relevant Laws. Any shares purchased or acquired by the Company
as aforesaid shall, unless held in treasury in accordance with the Act, be deemed to be
cancelled immediately on purchase or acquisition by the Company. On the cancellation
of any share as aforesaid, the rights and privileges attached to that share shall expire.
In any other instance, the Company may hold or deal with any such share which is so
purchased or acquired by it in such manner as may be permitted by, and in accordance
with the Relevant Laws. Without prejudice to the generality of the foregoing, upon
cancellation of any share purchased or otherwise acquired by the Company pursuant to
these Articles and the Statutes, the number of issued shares of the Company shall be
diminished by the number of shares so cancelled, and, where any such cancelled share
was purchased or acquired out of the capital of the Company, the amount of share
capital of the Company shall be reduced accordingly.
APPENDIX D – SUMMARY OF OUR ARTICLES OF ASSOCIATION
D-7
(c) Change in the Respective Rights of the Various Classes of Shares
Article 9
(A) Whenever the share capital of the Company is divided into different classes of shares,
the variation or abrogation of the special rights attached to any class may, subject to the
provisions of the Act, only be made either with the consent in writing of the holders of
three-quarters of the total voting rights of all the shares of the class or with the sanction
of a Special Resolution passed at a separate General Meeting of the holders of the
shares of the class (but not otherwise) and may be so made either whilst the Company
is a going concern or during or in contemplation of a winding-up. To every such separate
General Meeting all the provisions of these Articles relating to General Meetings of the
Company and to the proceedings thereat shall mutatis mutandis apply, except that the
necessary quorum shall be two (2) or more persons holding at least one-third of the total
voting rights of all the shares of the class present in person or by proxy or attorney and
that any holder of shares of the class present in person or by proxy or attorney may
demand a poll and that every such holder shall on a poll have one (1) vote for every
share of the class held by him where the class is a class of equity shares within the
meaning of Section 64(1) of the Act or at least one (1) vote for every share of the class
where the class is a class of preference shares within the meaning of Section 180(2) of
the Act, provided always that where the necessary majority for such a Special
Resolution is not obtained at such General Meeting, the consent in writing, if obtained
from the holders of three-quarters of the total voting rights of all the shares of the class
concerned within two (2) months of such General Meeting, shall be as valid and
effectual as a Special Resolution carried at such General Meeting.
(B) The provisions in Article 9(A) shall mutatis mutandis apply to any repayment of
preference capital (other than redeemable preference capital) and any variation or
abrogation of the rights attached to preference shares or any class thereof.
(C) The special rights attached to any class of shares having preferential rights shall not
unless otherwise expressly provided by the terms of issue thereof be deemed to be
varied by the creation or issue of further shares ranking as regards participation in the
profits or assets of the Company in some or all respects pari passu therewith but in no
respect in priority thereto.
(d) Dividends and Distribution
Article 123
The Company may by Ordinary Resolution declare Dividends but no such Dividend shall
exceed the amount recommended by the Directors.
Article 124
If and so far as in the opinion of the Directors, the profits of the Company justify such
payments, the Directors may declare and pay the fixed Dividends on any class of shares
carrying a fixed Dividend expressed to be payable on fixed dates on the half-yearly or other
dates prescribed for the payment thereof and may also from time to time declare and pay
interim Dividends on shares of any class of such amounts and on such dates and in respect
of such periods as they think fit.
APPENDIX D – SUMMARY OF OUR ARTICLES OF ASSOCIATION
D-8
Article 125
Subject to any rights or restrictions attached to any shares or class of shares and except as
otherwise permitted under the Act:–
(a) all Dividends in respect of shares must be paid in proportion to the number of shares
held by a Member, but where shares are partly paid, all Dividends must be apportioned
and paid proportionately to the amounts paid or credited as paid on the partly paid
shares; and
(b) all Dividends must be apportioned and paid proportionately to the amounts so paid or
credited as paid during any portion or portions of the period in respect of which the
Dividend is paid.
For the purposes of this Article, an amount paid or credited as paid on a share in advance
of a call is to be ignored.
Article 126
(A) No Dividend shall be paid otherwise than out of profits available for distribution under
the provisions of the Statutes. The payment by the Directors of any unclaimed dividends
or other moneys payable on or in respect of a share into a separate account shall not
constitute the Company a trustee in respect thereof. All Dividends remaining unclaimed
after one (1) year from having been first payable may be invested or otherwise made
use of by the Directors for the benefit of the Company, and any Dividend or any such
moneys unclaimed after six (6) years from having been first payable shall be forfeited
and shall revert to the Company provided always that the 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 CDP returns any such
Dividend or moneys to the Company, the relevant Depositor shall not have any right or
claim in respect of such Dividend or moneys against the 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.
(B) A payment by the Company to CDP of any Dividend or other moneys payable to a
Depositor shall, to the extent of the payment made, discharge the Company from any
liability to the Depositor in respect of that payment.
Article 127
No Dividend or other monies payable on or in respect of a share shall bear interest as against
the Company.
Article 128
(A) The Directors may retain any Dividend or other monies payable on or in respect of a
share on which the 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.
(B) The Directors may retain the Dividends payable upon shares in respect of which any
person is under the provisions as to the transmission of shares hereinbefore contained
entitled to become a Member, or which any person is under those provisions entitled to
transfer, until such person shall become a Member in respect of such shares or shall
transfer the same.
APPENDIX D – SUMMARY OF OUR ARTICLES OF ASSOCIATION
D-9
Article 129
The waiver in whole or in part of any Dividend on any share by any document (whether or not
under seal) shall be effective only if such document is signed by the Member (or the person
entitled to the share in consequence of the death or bankruptcy of the holder) and delivered
to the Company and if or to the extent that the same is accepted as such or acted upon by
the Company.
Article 130
The Company may upon the recommendation of the Directors by Ordinary Resolution direct
payment of a Dividend in whole or in part by the distribution of specific assets (and in
particular of paid-up shares or debentures of any other company) and the Directors shall give
effect to such resolution. Where any difficulty arises with regard to such distribution, the
Directors may settle the same as they think expedient and in particular, may issue fractional
certificates, may fix the value for distribution of such specific assets or any part thereof, may
determine that cash payments shall be made to any Member upon the footing of the value
so fixed in order to adjust the rights of all parties and may vest any such specific assets in
trustees as may seem expedient to the Directors.
Article 131
Any Dividend or other monies payable in cash on or in respect of a share may be paid by
cheque or warrant sent through the post to the registered address appearing in the Register
of Members or (as the case may be) the Depository Register of the Member or person
entitled thereto (or, if two (2) or more persons are registered in the Register of Members or
(as the case may be) entered in the Depository Register as joint holders of the share or are
entitled thereto in consequence of the death or bankruptcy of the holder, to any one (1) of
such persons) or to such person and such address as such Member or person or persons
may by writing direct.
Every such cheque or warrant shall be made payable to the order of the person to whom it
is sent or to such person as the holder or joint holders or person or persons entitled to the
share in consequence of the death or bankruptcy of the holder may direct and payment of the
cheque or warrant by the banker upon whom it is drawn shall be a good discharge to the
Company. Every such cheque or warrant shall be sent at the risk of the person entitled to the
money represented thereby.
Article 132
If two (2) or more persons are registered in the Register of Members or (as the case may be)
the Depository Register as joint holders of any share, or are entitled jointly to a share in
consequence of the death or bankruptcy of the holder, any one (1) of them may give effectual
receipts for any Dividend or other moneys payable or property distributable on or in respect
of the share.
APPENDIX D – SUMMARY OF OUR ARTICLES OF ASSOCIATION
D-10
(e) Limitation on the Right to Own Shares
Article 5
(A) Subject to any direction to the contrary that may be given by the Company in General
Meeting or except as permitted by the rules of the Designated Stock Exchange, all new
shares shall, before issue, be offered to such persons who as at the date of the offer are
entitled to receive notices from the Company of General Meetings in proportion, as far
as the circumstances admit, to the number of the existing shares to which they are
entitled. The offer shall be made by notice specifying the number of shares offered, and
limiting a time within which the offer, if not accepted, will be deemed to be declined, and,
after the expiration of the aforesaid time or on the receipt of an intimation from the
person to whom the offer is made that he declines to accept the shares offered, the
Directors may dispose of those shares in such manner as they think most beneficial to
the Company. The Directors may likewise dispose of any new shares which (by reason
of the ratio which the new shares bear to shares held by persons entitled to an offer of
new shares) cannot, in the opinion of the Directors, be conveniently offered under this
Article 5(A).
(B) Notwithstanding Article 5(A) above, the Company may by Ordinary Resolution in
General Meeting give to the Directors a general authority, either unconditionally or
subject to such conditions as may be specified in the Ordinary Resolution, to:–
(a) (i) issue shares in the capital of the Company (“shares”) whether by way of
rights, bonus or otherwise; and/or
(ii) make or grant offers, agreements or options (collectively, “Instruments”) that
might or would require shares to be issued, including but not limited to the
creation and issue of (as well as adjustments to) warrants, debentures or
other instruments convertible into shares; and
(b) (notwithstanding the authority conferred by the Ordinary Resolution may have
ceased to be in force) issue shares in pursuance of any Instrument made or
granted by the Directors while the Ordinary Resolution was in force,
provided that:–
(1) the aggregate number of shares to be issued pursuant to the Ordinary Resolution
(including shares to be issued in pursuance of Instruments made or granted
pursuant to the Ordinary Resolution) shall be subject to such limits and manner of
calculation as may be prescribed by the Designated Stock Exchange;
(2) in exercising the authority conferred by the Ordinary Resolution, the Company
shall comply with the provisions of the listing rules of the Designated Stock
Exchange for the time being in force (unless such compliance is waived by the
Designated Stock Exchange) and these Articles; and
(3) (unless revoked or varied by the Company in General Meeting) the authority
conferred by the Ordinary Resolution shall not continue in force beyond the
conclusion of the Annual General Meeting of the Company next following the
APPENDIX D – SUMMARY OF OUR ARTICLES OF ASSOCIATION
D-11
passing of the Ordinary Resolution, or the date by which such Annual General
Meeting of the Company is required by law to be held, or the expiration of such
other period as may be prescribed by the Act (whichever is the earliest).
(C) The Company may, notwithstanding Articles 5(A) and 5(B) above, authorise the
Directors not to offer new shares to Members to whom by reason of foreign securities
laws, such offers may not be made without registration of the shares or a prospectus or
other document, but to sell the entitlements to the new shares on behalf of such
Members on such terms and conditions as the Company may direct.
Article 34
(A) There shall be no restriction on the transfer of fully paid up shares (except where
required by law or by the rules, bye-laws or listing rules of the Designated Stock
Exchange) but the Directors may in their discretion decline to register any transfer of
shares upon which the Company has a lien, and in the case of shares not fully paid up,
may refuse to register a transfer to a transferee of whom they do not approve, provided
always that in the event of the Directors refusing to register a transfer of shares, the
Company shall within ten market days (or such period as the Directors may determine
having regard to any limitation thereof as may be prescribed by the Designated Stock
Exchange from time to time) after the date on which the application for a transfer of
shares was made, serve a notice in writing to the applicant stating the facts which are
considered to justify the refusal as required by the Statutes.
(B) The Directors may decline to register any instrument of transfer unless:–
(a) such fee not exceeding S$2.00 (or such other fee as the Directors may determine
having regard to any limitation thereof as may be prescribed by the Designated
Stock Exchange from time to time) as the Directors may from time to time require
is paid to the Company in respect thereof;
(b) the amount of proper duty (if any) with which each instrument of transfer is
chargeable under any law for the time being in force relating to stamps is paid;
(c) the instrument of transfer is deposited at the Office or at such other place (if any)
as the Directors may appoint accompanied by a certificate of payment of stamp
duty (if stamp duty is payable on such instrument of transfer in accordance with
any law for the time being in force relating to stamp duty), the certificates of the
shares to which it relates, and such other evidence as the Directors may
reasonably require to show the right of the transferor to make the transfer and, if
the instrument of transfer is executed by some other person on his behalf, the
authority of the person so to do; and
(d) the instrument of transfer is in respect of only one (1) class of shares.
Article 42
Except as required by the Statutes or law, no person shall be recognised by the Company as
holding any share upon any trust, and the Company shall not be bound by or compelled in
any way to recognise (even when having notice thereof) any equitable, contingent, future or
partial interest in any share, or any interest in any fractional part of a share, or (except only
as by these Articles or by the Statutes or law otherwise provided) any other right in respect
APPENDIX D – SUMMARY OF OUR ARTICLES OF ASSOCIATION
D-12
of any share, except an absolute right to the entirety thereof in the registered holder and
nothing in these Articles contained relating to CDP or to Depositors or in any depository
agreement made by the Company with any common depository for shares shall in any
circumstances be deemed to limit, restrict or qualify the above.
(f) Approval for the Issue of New Ordinary Shares
Article 5(B)
(B) Notwithstanding Article 5(A) above, the Company may by Ordinary Resolution in
General Meeting give to the Directors a general authority, either unconditionally or
subject to such conditions as may be specified in the Ordinary Resolution, to:–
(a) (i) issue shares in the capital of the Company (“shares”) whether by way of
rights, bonus or otherwise; and/or
(ii) make or grant offers, agreements or options (collectively, “Instruments”) that
might or would require shares to be issued, including but not limited to the
creation and issue of (as well as adjustments to) warrants, debentures or
other instruments convertible into shares; and
(b) (notwithstanding the authority conferred by the Ordinary Resolution may have
ceased to be in force) issue shares in pursuance of any Instrument made or
granted by the Directors while the Ordinary Resolution was in force,
provided that:–
(1) the aggregate number of shares to be issued pursuant to the Ordinary Resolution
(including shares to be issued in pursuance of Instruments made or granted pursuant
to the Ordinary Resolution) shall be subject to such limits and manner of calculation as
may be prescribed by the Designated Stock Exchange;
(2) in exercising the authority conferred by the Ordinary Resolution, the Company shall
comply with the provisions of the listing rules of the Designated Stock Exchange for the
time being in force (unless such compliance is waived by the Designated Stock
Exchange) and these Articles; and
(3) (unless revoked or varied by the Company in General Meeting) the authority conferred
by the Ordinary Resolution shall not continue in force beyond the conclusion of the
Annual General Meeting of the Company next following the passing of the Ordinary
Resolution, or the date by which such Annual General Meeting of the Company is
required by law to be held, or the expiration of such other period as may be prescribed
by the Act (whichever is the earliest).
(g) Registration and Recognition as Members of the Company
Article 32
All transfers of the legal title in shares shall be effected by the registered holders thereof by
transfer in writing in the form for the time being approved by the Directors and the Designated
Stock Exchange. The instrument of transfer of any share shall be signed by or on behalf of
both the transferor and the transferee and be witnessed, provided always that an instrument
APPENDIX D – SUMMARY OF OUR ARTICLES OF ASSOCIATION
D-13
of transfer in respect of which the transferee is the CDP shall be effective although not signed
or witnessed by or on behalf of the CDP. The transferor shall be deemed to remain the holder
of the shares concerned until the name of the transferee is entered in the Register of
Members in respect thereof.
Article 33
The Registers of Members and of Transfers may be closed at such times and for such
periods as the Directors may from time to time determine, provided always that such
Registers shall not be closed for more than thirty days in any year, and that the Company
shall give prior notice of each such closure, as may be required, to the Designated Stock
Exchange, stating the period and purpose or purposes for which such closure is made.
Article 42
Except as required by the Statutes or law, no person shall be recognised by the Company as
holding any share upon any trust, and the Company shall not be bound by or compelled in
any way to recognise (even when having notice thereof) any equitable, contingent, future or
partial interest in any share, or any interest in any fractional part of a share, or (except only
as by these Articles or by the Statutes or law otherwise provided) any other right in respect
of any share, except an absolute right to the entirety thereof in the registered holder and
nothing in these Articles contained relating to CDP or to Depositors or in any depository
agreement made by the Company with any common depository for shares shall in any
circumstances be deemed to limit, restrict or qualify the above.
Article 133
Any resolution declaring a Dividend on shares of any class, whether a resolution of the
Company in General Meeting or a resolution of the Directors, may specify that the same shall
be payable to the persons registered as the holders of such shares in the Register of
Members or (as the case may be) the Depository Register at the close of business on a
particular date and thereupon the Dividend shall be payable to them in accordance with their
respective holdings so registered, but without prejudice to the rights inter se in respect of
such Dividend of transferors and transferees of any such shares.
(h) Transfer of Ordinary Shares and Replacement of Share Certificates
Article 34
(A) There shall be no restriction on the transfer of fully paid up shares (except where
required by law or by the rules, bye-laws or listing rules of the Designated Stock
Exchange) but the Directors may in their discretion decline to register any transfer of
shares upon which the Company has a lien, and in the case of shares not fully paid up,
may refuse to register a transfer to a transferee of whom they do not approve, provided
always that in the event of the Directors refusing to register a transfer of shares, the
Company shall within ten market days (or such period as the Directors may determine
having regard to any limitation thereof as may be prescribed by the Designated Stock
Exchange from time to time) after the date on which the application for a transfer of
shares was made, serve a notice in writing to the applicant stating the facts which are
considered to justify the refusal as required by the Statutes.
APPENDIX D – SUMMARY OF OUR ARTICLES OF ASSOCIATION
D-14
(B) The Directors may decline to register any instrument of transfer unless:–
(a) such fee not exceeding S$2.00 (or such other fee as the Directors may determine
having regard to any limitation thereof as may be prescribed by the Designated
Stock Exchange from time to time) as the Directors may from time to time require
is paid to the Company in respect thereof;
(b) the amount of proper duty (if any) with which each instrument of transfer is
chargeable under any law for the time being in force relating to stamps is paid;
(c) the instrument of transfer is deposited at the Office or at such other place (if any)
as the Directors may appoint accompanied by a certificate of payment of stamp
duty (if stamp duty is payable on such instrument of transfer in accordance with
any law for the time being in force relating to stamp duty), the certificates of the
shares to which it relates, and such other evidence as the Directors may
reasonably require to show the right of the transferor to make the transfer and, if
the instrument of transfer is executed by some other person on his behalf, the
authority of the person so to do; and
(d) the instrument of transfer is in respect of only one (1) class of shares.
Article 16
Subject to the provisions of the Statutes, if any share certificate shall be defaced, worn out,
destroyed, lost or stolen, it may be renewed on such evidence being produced and a letter
of indemnity (if required) being given by the shareholder, transferee, person entitled,
purchaser, member company of the Designated Stock Exchange or on behalf of its or their
client or clients as the Directors shall require, and in the case of defacement or wearing out,
on delivery of the old certificate, and in any case on payment of such sum not exceeding
S$2.00 (or such other fee as the Directors may determine having regard to any limitation
thereof as may be prescribed by the Designated Stock Exchange from time to time) as the
Directors may from time to time require. In the case of destruction, loss or theft, a
shareholder or person entitled to whom such renewed certificate is given shall also bear the
loss and pay to the Company all expenses incidental to the investigations by the Company
of the evidence of such destruction or loss.
(i) General Meeting of Shareholders
Article 46
An Annual General Meeting shall be held once in every year, at such time (within a period of
not more than fifteen months after the holding of the last preceding Annual General Meeting)
and place as may be determined by the Directors. All other General Meetings shall be called
Extraordinary General Meetings. The interval between the close of a financial year of the
Company and the date of the Company’s Annual General Meeting shall not exceed four (4)
months or such other period as prescribed by the Act and the byelaws and listing rules of the
Designated Stock Exchange or other legislation applicable to the Company from time to time.
Article 47
The Directors may whenever they think fit, and shall on requisition in accordance with the
Statutes, proceed with proper expedition to convene an Extraordinary General Meeting.
APPENDIX D – SUMMARY OF OUR ARTICLES OF ASSOCIATION
D-15
Article 49
(A) Every notice calling a General Meeting shall specify the place, day and hour of the
meeting, and there shall appear with reasonable prominence in every such notice a
statement that a Member entitled to attend and vote is entitled to appoint a proxy to
attend and vote instead of him and that a proxy need not be a Member of the Company.
(B) In the case of an Annual General Meeting, the notice shall also specify the meeting as
such.
(C) In the case of any General Meeting at which business other than routine business
(“special business”) is to be transacted, the notice shall specify the general nature of
such business, and if any resolution is to be proposed as a Special Resolution, the
notice shall contain a statement to that effect.
Article 68
(A) A Member shall not be entitled to appoint more than two (2) proxies to attend and vote
at the same General Meeting, provided that if the Member is a Depositor, the Company
shall be entitled and bound:–
(a) to reject any instrument of proxy lodged if the Depositor, is not shown, to have any
shares entered against his name in the Depository Register as at 48 hours before
the time of the relevant General Meeting as certified by CDP to the Company; and
(b) to accept as the maximum number of votes which in aggregate the proxy or proxies
appointed by the Depositor is or are able to cast on a poll a number which is the
number of shares entered into against the name of that Depositor in the Depository
Register as at 48 hours before the time of the relevant General Meeting as certified
by CDP to the Company, whether that number is greater or smaller than the
number specified in any instrument of proxy executed by or on behalf of that
Depositor.
(B) Where a Member appoints more than one (1) proxy, the Member shall specify the
proportion of his shares to be represented by each such proxy, failing which the
nomination shall be deemed to be alternative.
(C) A proxy need not be a Member of the Company.
Article 53
No business other than the appointment of a Chairman shall be transacted at any General
Meeting unless a quorum is present at the time when the meeting proceeds to business.
Save as herein otherwise provided, the quorum at any General Meeting shall be two (2)
Members present in person or by proxy, provided that (i) a proxy representing more than one
(1) Member shall only count as one (1) Member for purpose of determining if the quorum
aforesaid is present; and (ii) where a Member is represented by more than one (1) proxy,
such proxies of such Member shall only count as one (1) Member for purposes of determining
if the quorum aforesaid is present.
APPENDIX D – SUMMARY OF OUR ARTICLES OF ASSOCIATION
D-16
Article 58
At any General Meeting a resolution put to the vote of the meeting shall be decided on a show
of hands unless a poll is required by the listing rules of any Designated Stock Exchange upon
which the Company may be listed or (before or on the declaration of the result of the show
of hands) demanded by:–
(a) the chairman of the meeting; or
(b) not less than two (2) Members present in person or by proxy and entitled to vote; or
(c) any Member present in person or by proxy, or where such a member has appointed two
(2) proxies any one (1) of such proxies, or any number or combination of such Members
or proxies, holding or representing as the case may be not less than one-tenth of the
total voting rights of all the Members having the right to vote at the General Meeting; or
(d) any Member present in person or by proxy, or where such a Member has appointed two
(2) proxies any one (1) of such proxies, or any number or combination of such Members
or proxies, holding shares conferring a right to vote at the General Meeting, of which an
aggregate sum has been paid up equal to not less than 10 per cent. of the total sum paid
up on all the shares conferring that right,
provided always that no poll shall be demanded on the choice of the chairman of the meeting
or on a question of adjournment. A demand for a poll may be withdrawn only with the
approval of the meeting.
Article 146
If the Company shall be wound up (whether the liquidation is voluntary, under supervision,
or by the court) the liquidator may, with the authority of a Special Resolution, divide among
the Members in specie or in kind the whole or any part of the assets of the Company and
whether or not the assets shall consist of property of one (1) kind or shall consist of
properties of different kinds, and may for such purpose set such value as he deems fair upon
any one (1) or more class or classes of property and may determine how such division shall
be carried out as between the Members of different classes of Members. The Liquidator may,
with the like authority, vest any part of the assets in trustees upon such trusts for the benefit
of Members as the Liquidator with the like authority shall think fit, and the liquidation of the
Company may be closed and the Company dissolved, but so that no contributory shall be
compelled to accept any shares or other property in respect of which there is a liability.
Article 11
(A) The Company may reduce its share capital or any other undistributable reserve in any
manner permitted, and with, and subject to, any incident authorised, and consent or
confirmation required, by law.
(B) The Company may purchase or otherwise acquire its issued shares subject to and in
accordance with the provisions of the Statutes and any applicable rules of the
Designated Stock Exchange (hereafter, the “Relevant Laws”), on such terms and
subject to such conditions as the Company may in General Meeting prescribe in
accordance with the Relevant Laws. Any shares purchased or acquired by the Company
as aforesaid shall, unless held in treasury in accordance with the Act, be deemed to be
APPENDIX D – SUMMARY OF OUR ARTICLES OF ASSOCIATION
D-17
cancelled immediately on purchase or acquisition by the Company. On the cancellation
of any share as aforesaid, the rights and privileges attached to that share shall expire.
In any other instance, the Company may hold or deal with any such share which is so
purchased or acquired by it in such manner as may be permitted by, and in accordance
with the Relevant Laws. Without prejudice to the generality of the foregoing, upon
cancellation of any share purchased or otherwise acquired by the Company pursuant to
these Articles and the Statutes, the number of issued shares of the Company shall be
diminished by the number of shares so cancelled, and, where any such cancelled share
was purchased or acquired out of the capital of the Company, the amount of share
capital of the Company shall be reduced accordingly.
Article 48
Subject to the Statutes, any General Meeting at which it is proposed to pass a Special
Resolution, shall be called by twenty-one days’ notice in writing at the least. An Annual
General Meeting or any other Extraordinary General Meeting shall be called by fourteen
days’ notice in writing at the least. The period of notice shall in each case be exclusive of the
day on which it is served or deemed to be served and of the day on which the General
Meeting is to be held and shall be given in manner hereinafter mentioned to all Members
other than those who are not under the provisions of these Articles entitled to receive such
notices from the Company, provided that a General Meeting which has been called by a
shorter notice than that specified above shall be deemed to have been duly called if it is so
agreed:–
(a) in the case of an Annual General Meeting by all the Members entitled to attend and vote
thereat; and
(b) in the case of an Extraordinary General Meeting by a majority in number of the Members
having a right to attend and vote thereat, being a majority together holding not less than
95 per cent. of the total voting rights of all the Members having a right to vote at that
meeting;
provided also that the accidental omission to give notice to or the non-receipt of notice by any
person entitled thereto shall not invalidate the proceedings at any General Meeting. At least
fourteen days’ notice of any General Meeting shall be given by advertisement in the daily
press and in writing to the Designated Stock Exchange, provided always that in the case of
any Extraordinary General Meeting at which it is proposed to pass a Special Resolution, at
least twenty-one days’ notice in writing of such Extraordinary General Meeting shall be given
to the Designated Stock Exchange.
Article 58
At any General Meeting a resolution put to the vote of the meeting shall be decided on a show
of hands unless a poll is required by the listing rules of any Designated Stock Exchange upon
which the Company may be listed or (before or on the declaration of the result of the show
of hands) demanded by:–
(a) the chairman of the meeting; or
(b) not less than two (2) Members present in person or by proxy and entitled to vote; or
APPENDIX D – SUMMARY OF OUR ARTICLES OF ASSOCIATION
D-18
(c) any Member present in person or by proxy, or where such a Member has appointed two
(2) proxies any one (1) of such proxies, or any number or combination of such Members
or proxies, holding or representing as the case may be not less than one-tenth of the
total voting rights of all the Members having the right to vote at the General Meeting; or
(d) any Member present in person or by proxy, or where such a Member has appointed two
(2) proxies any one (1) of such proxies, or any number or combination of such Members
or proxies, holding shares conferring a right to vote at the General Meeting, of which an
aggregate sum has been paid up equal to not less than 10 per cent. of the total sum paid
up on all the shares conferring that right,
provided always that no poll shall be demanded on the choice of the chairman of the meeting
or on a question of adjournment. A demand for a poll may be withdrawn only with the
approval of the meeting.
(j) Voting Rights
Article 62
Subject to any special rights or restrictions as to voting attached by or in accordance with
these Articles to any class of shares, and to Article 4, each Member entitled to vote may vote
in person or by proxy. On a show of hands every Member who is present in person or by
proxy shall have one (1) vote (provided that in the case of a Member who is represented by
two (2) proxies, only one (1) of the two (2) proxies as determined by that Member or, failing
such determination, by the Chairman of the General Meeting (or by a person authorised by
him) in his sole discretion shall be entitled to vote on a show of hands) and on a poll every
Member who is present in person or by proxy shall have one (1) vote for every share of which
he holds or represents. For the purposes of determining the number of votes which a
Member, being a Depositor, or his proxy may cast at any General Meeting on a poll, the
references to shares held or represented shall, in relation to shares of that Depositor, be the
number of shares entered against his name in the Depository Register as at 48 hours before
the time of the relevant General Meeting as certified by CDP to the Company. A Member who
is bankrupt shall not, while his bankruptcy continues, be entitled to exercise his rights as a
Member, or attend, vote or act at any General Meeting.
Article 49
(A) Every notice calling a General Meeting shall specify the place, day and hour of the
meeting, and there shall appear with reasonable prominence in every such notice a
statement that a Member entitled to attend and vote is entitled to appoint a proxy to
attend and vote instead of him and that a proxy need not be a Member of the Company.
(B) In the case of an Annual General Meeting, the notice shall also specify the meeting as
such.
(C) In the case of any General Meeting at which business other than routine business
(“special business”) is to be transacted, the notice shall specify the general nature of
such business, and if any resolution is to be proposed as a Special Resolution, the
notice shall contain a statement to that effect.
APPENDIX D – SUMMARY OF OUR ARTICLES OF ASSOCIATION
D-19
Article 68
(A) A Member shall not be entitled to appoint more than two (2) proxies to attend and vote
at the same General Meeting, provided that if the Member is a Depositor, the Company
shall be entitled and bound:–
(a) to reject any instrument of proxy lodged if the Depositor, is not shown, to have any
shares entered against his name in the Depository Register as at 48 hours before
the time of the relevant General Meeting as certified by CDP to the Company; and
(b) to accept as the maximum number of votes which in aggregate the proxy or proxies
appointed by the Depositor is or are able to cast on a poll a number which is the
number of shares entered into against the name of that Depositor in the Depository
Register as at 48 hours before the time of the relevant General Meeting as certified
by CDP to the Company, whether that number is greater or smaller than the
number specified in any instrument of proxy executed by or on behalf of that
Depositor.
(B) Where a Member appoints more than one (1) proxy, the Member shall specify the
proportion of his shares to be represented by each such proxy, failing which the
nomination shall be deemed to be alternative.
(C) A proxy need not be a Member of the Company.
Article 53
No business other than the appointment of a Chairman shall be transacted at any General
Meeting unless a quorum is present at the time when the meeting proceeds to business.
Save as herein otherwise provided, the quorum at any General Meeting shall be two (2)
Members, present in person or by proxy, provided that (i) a proxy representing more than one
(1) Member shall only count as one (1) Member for purpose of determining if the quorum
aforesaid is present; and (ii) where a Member is represented by more than one (1) proxy,
such proxies of such Member shall only count as one (1) Member for purposes of determining
if the quorum aforesaid is present.
Article 59
Unless a poll is required, a declaration by the chairman of the General Meeting that a
resolution has been carried, or carried unanimously, or by a particular majority, or lost, and
an entry to that effect in the minute book, shall be conclusive evidence of that fact without
proof of the number or proportion of the votes recorded for or against such resolution. If a poll
is required, it shall be taken in such manner (including the use of ballot or voting papers or
tickets) as the chairman of the General Meeting may direct, and the result of the poll shall
be deemed to be the resolution of the meeting at which the poll was demanded. The
chairman of the General Meeting may (and if so directed by the meeting shall) appoint
scrutineers and may adjourn the meeting to some place and time fixed by him for the purpose
of declaring the result of the poll.
APPENDIX D – SUMMARY OF OUR ARTICLES OF ASSOCIATION
D-20
Article 60
In the case of an equality of votes, whether on a show of hands or on a poll, the chairman
of the General Meeting at which the show of hands takes place or at which the poll is
demanded shall be entitled to a casting vote.
(k) Capitalisation and Rights Issue
Article 134
(A) The Directors may, with the sanction of an Ordinary Resolution of the Company
(including any Ordinary Resolution passed pursuant to Article 5(B)):
(a) issue bonus shares for which no consideration is payable to the Company to the
persons registered as holders of shares in the Register of Members or (as the case
may be) the Depository Register at the close of business on:
(i) the date of the Ordinary Resolution (or such other date as may be specified
therein or determined as therein provided); or
(ii) (in the case of an Ordinary Resolution passed pursuant to Article 5(B)) such
other date as may be determined by the Directors, in proportion to their then
holdings of shares; and/or
(b) capitalise any sum standing to the credit of any of the Company’s reserve
accounts or other undistributable reserve or any sum standing to the credit of profit
and loss account by appropriating such sum to the persons registered as holders
of shares in the Register of Members or (as the case may be) in the Depository
Register at the close of business on:
(i) the date of the Ordinary Resolution (or such other date as may be specified
therein or determined as therein provided); or
(ii) (in the case of an Ordinary Resolution passed pursuant to Article 5(B)) such
other date as may be determined by the Directors, in proportion to their then
holdings of shares and applying such sum on their behalf in paying up in full
unissued shares (or, subject to any special rights previously conferred on any
shares or class of shares for the time being issued, unissued shares of any
other class not being redeemable shares) for allotment and distribution
credited as fully paid up to and amongst them as bonus shares in the
proportion aforesaid.
(B) The Directors may do all acts and things considered necessary or expedient to give
effect to any such bonus issue or capitalisation under this Article 134, with full power to
the Directors to make such provisions as they think fit for any fractional entitlements
which would arise on the basis aforesaid (including provisions whereby fractional
entitlements are disregarded or the benefit thereof accrues to the Company rather than
to the Members concerned). The Directors may authorise any person to enter on behalf
of all the Members interested into an agreement with the Company providing for any
such bonus issue or capitalisation and matters incidental thereto and any agreement
made under such authority shall be effective and binding on all concerned.
APPENDIX D – SUMMARY OF OUR ARTICLES OF ASSOCIATION
D-21
(C) In addition and without prejudice to the powers provided for by this Article 134, the
Directors shall have power to issue shares for which no consideration is payable and to
capitalise any undivided profits or other moneys of the Company not required for the
payment or provision of any Dividend on any shares entitled to cumulative or
non-cumulative preferential Dividends (including profits or other moneys carried and
standing to any reserve or reserves) and to apply such profits or other moneys in paying
up in full, in each case on terms that such shares shall, upon issue, be held by or for
the benefit of participants of any share incentive or option scheme or plan implemented
by the Company and approved by Members in General Meeting and on such terms as
the Directors shall think fit.
(l) Indemnity
Article 147
Subject to the provisions of and so far as may be permitted by the Statutes, every Director,
Auditor, Secretary or other officer of the Company shall be entitled to be indemnified by the
Company against all costs, charges, losses, expenses and liabilities incurred by him in the
execution and discharge of his duties or in relation thereto including any liability by him in
defending any proceedings, civil or criminal, which relate to anything done or omitted or
alleged to have been done or omitted by him as an officer or employee of the Company and
in which judgment is given in his favour (or the proceedings otherwise disposed of without
any finding or admission of any material breach of duty on his part) or in which he is acquitted
or in connection with any application under any statute for relief from liability in respect of any
such act or omission in which relief is granted to him by the court unless the same shall
happen through his own negligence, fraud, wilful default, breach of fiduciary duties or breach
of trust. Without prejudice to the generality of the foregoing, no Director, Manager, Secretary
or other officer of the Company shall be liable for the acts, receipts, neglect or defaults of any
other Director or officer or for joining in any receipt or other act for conformity or for any loss
or expense happening to the Company through the insufficiency or deficiency of title to any
property acquired by order of the Directors for or on behalf of the Company or for the
insufficiency or deficiency of any security in or upon which any of the moneys of the Company
shall be invested or for any loss or damage arising from the bankruptcy, insolvency or
tortious act of any person with whom any moneys, securities or effects shall be deposited or
left or for any other loss, damage or misfortune whatsoever which shall happen in the
execution of the duties of his office or in relation thereto unless the same shall happen
through his own negligence, wilful default, breach of duty or breach of trust.
APPENDIX D – SUMMARY OF OUR ARTICLES OF ASSOCIATION
D-22
The following statements are brief summaries of the rights and privileges of shareholders
conferred by the laws of Singapore and the Articles of Association (the “Articles”) of our
Company. These statements summarise the material provisions of the Articles but are qualified in
entirety by reference to the Articles.
Ordinary Shares
We have only one (1) class of shares, namely, our ordinary shares which have identical rights in
all respects and rank equally with one (1) another. Our Articles of Association provide that we may
issue shares of a different class with preferential, deferred, qualified or special rights, privileges
or conditions as our Board of Directors may think fit, and may issue preference shares which are,
or at our option are, redeemable, subject to certain limitations. All of the ordinary shares are in
registered form. Our Company may, subject to the provisions of the Companies Act and the rules
of the SGX-ST, purchase its own ordinary shares. However, it may not, except in circumstances
permitted by the Companies Act, grant any financial assistance for the acquisition or proposed
acquisition of its own ordinary shares.
New Shares
New shares may only be issued with the prior approval in a general meeting of the shareholders
of the Company. The aggregate number of shares to be issued pursuant to a general authority
granted by our shareholders may not exceed 50% (or such other limit as may be prescribed by the
SGX-ST) of its 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 its Shareholders may not exceed 20% (or such other
limit as may be prescribed by the SGX-ST) of its issued share capital for the time being (the
percentage of issued share capital being based on its 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 its 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. Subject
to the foregoing, the provisions of the Companies Act and any special rights attached to any class
of shares currently issued, all new ordinary shares are under the control of the board of Directors
of the Company (the “Board of Directors”) 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 the 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 ordinary shares, are recognised as shareholders of the
Company. The Company will not, except as required by law, recognise any equitable, contingent,
future or partial interest in any ordinary share or other rights for any ordinary share other than the
absolute right thereto of the registered holder of that ordinary share or of the person whose name
is entered in the depository register for that ordinary share. The Company may close the register
of shareholders for any time or times if it provides the Accounting and Corporate Regulatory
Authority of Singapore at least 14 days’ notice and the SGX-ST at least 10 clear market days’
notice. However, the register may not be closed for more than 30 days in aggregate in any
calendar year. The Company typically closes the register to determine shareholders’ entitlement
to receive dividends and other distributions.
APPENDIX E – DESCRIPTION OF OUR SHARES
E-1
Transfer of Shares
There is no restriction on the transfer of fully paid ordinary shares except where required by law
or the listing rules or the rules or by-laws of any stock exchange on which the Company is listed.
The Board of Directors may decline to register any transfer of ordinary shares which are not fully
paid shares, or ordinary shares on which the Company has a lien. Ordinary shares may be
transferred by a duly signed instrument of transfer in a form approved by any stock exchange on
which the Company is listed. The Board of Directors 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. The
Company will replace lost or destroyed certificates for ordinary shares if it is properly notified and
if the applicant pays a fee which will not exceed S$2 and furnishes any evidence and indemnity
that the Board of Directors may require.
General Meetings of Shareholders
The Company is required to hold an annual general meeting every year. The Board of Directors
may convene an Extraordinary General Meeting whenever it thinks fit and must do so if
shareholders representing not less than 10% 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% of the total number of issued shares of the Company (excluding treasury shares) may
call a meeting. Unless otherwise required by law or by the Articles, 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% of the votes cast at the meeting, is
necessary for certain matters under Singapore law, including voluntary winding up, amendments
to the Memorandum of Association and the Articles, a change of the corporate name and a
reduction in the share capital. The Company 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 has supplied the Company with an address in Singapore for the giving of notices 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.
Proxies need not be a shareholder. A person who holds ordinary shares through the CDP
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 the Articles, two (2) or more shareholders must be
present in person or by proxy to constitute a quorum at any general meeting. Under the 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 in his sole discretion 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
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 10% of the total voting rights of all shareholders having the right to
APPENDIX E – DESCRIPTION OF OUR SHARES
E-2
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 a tie vote, whether on a show of hands or a poll, the chairman of
the meeting shall be entitled to a casting vote.
Dividends
The Company may, by ordinary resolution of its shareholders, declare dividends at a general
meeting, but it may not pay dividends in excess of the amount recommended by the Board of
Directors. The Company must pay all dividends out of its profits. The Board of Directors may also
declare an interim dividend without the approval of its shareholders. All dividends are paid pro rata
among the 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 provides 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 the
Company 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 the Company from any
liability to that shareholder in respect of that payment.
Bonus and Rights Issues
The Board of Directors may, with approval by the shareholders at a general meeting, capitalise
any reserves or profits (including profit or moneys carried and standing to any reserve or other
undistributable reserve) and distribute the same as bonus shares credited as paid-up to the
shareholders in proportion to their shareholdings. The Board of Directors may also issue rights to
take up additional ordinary 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 the Company is listed.
Takeovers
The Securities and Futures Act and the Singapore Code on Takeovers and Mergers 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 the Company. Any person acquiring an
interest, either on his own or together with parties acting in concert with him, in 30% or more of
the voting shares in the Company must extend a takeover offer for the remaining voting shares in
accordance with the provisions of the Singapore Code on Takeovers and Mergers. “Parties acting
in concert” include a company and its related and associated companies, a company and its
directors (including their close relatives), a company and its pension funds and employee share
schemes, a person and any investment company, unit trust or other fund whose investment such
person manages on a discretionary basis, and a financial advisor and its client in respect of shares
held by the financial advisor and shares in the client held by funds managed by the financial
advisor on a discretionary basis. An offer for consideration other than cash must be accompanied
by a cash alternative at not less than the highest price paid by the offeror or parties acting in
concert with the offeror within the preceding six (6) months. 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% and 50% of the voting shares acquires, or any party acting in concert with
him acquires, additional voting shares representing more than 1% of the voting shares in any six
(6) month period.
APPENDIX E – DESCRIPTION OF OUR SHARES
E-3
Liquidation or Other Return of Capital
If the Company liquidates or in the event of any other return of capital, holders of ordinary 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.
Indemnity
As permitted by Singapore law, the Articles provide that, subject to the Companies Act, the Board
of Directors and officers shall be entitled to be indemnified by the Company against any liability
incurred in defending any proceedings, whether civil or criminal, which relate to anything done or
omitted to have been done as an officer, director or employee and in which judgment 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. The Company may
not indemnify directors and officers against any liability which by law would otherwise attach to
them in respect of any negligence, default, breach of duty or breach of trust of which they may be
guilty in relation to the Company.
Limitations on Rights to Hold or Vote on Shares
Except as described in “Voting Rights” and “Takeovers” above, there are no limitations imposed
by Singapore law or by the Articles on the rights of non-resident shareholders to hold or vote on
ordinary shares.
Substantial Shareholdings
Under the Securities and Futures Act, a person has a substantial shareholding in our Company if
he 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 5.0% of the
aggregate of the total votes attached to all voting shares (excluding treasury shares) in our
Company.
The Securities and Futures Act requires our Substantial Shareholders, or if they cease to be our
Substantial Shareholders, to give notice to us of particulars of the voting shares in our Company
in which they have or had an interest (or interests) and the nature and extent of that interest or
those interests, and of any change in the percentage level of their interest.
In addition, the deadline for a substantial Shareholder to make disclosure to our Company under
the Securities and Futures Act is two (2) Singapore business days after he becomes aware:
(a) that he is or (if he had ceased to be one (1)) had been a substantial Shareholder;
(b) of any change in the percentage level in his interest;
(c) that he had ceased to be a substantial Shareholder,
there being a conclusive presumption of a person being “aware” of a fact or occurrence at the time
at which he would, if he had acted with reasonable diligence in the conduct of his affairs, have
been aware.
APPENDIX E – DESCRIPTION OF OUR SHARES
E-4
Following the above, we will in turn announce or otherwise disseminate the information stated in
the notice to the SGX-ST as soon as practicable and in any case, no later than the end of the
Singapore business day following the day on which we received the notice.
“Percentage level”, in relation to a Substantial Shareholder in our Company, means the
percentage figure ascertained by expressing the total votes attached to all the voting shares in our
Company in which the Substantial Shareholder has an interest (or interests) immediately before
or (as the case may be) immediately after the relevant time as a percentage of the total votes
attached to all the voting shares (excluding treasury shares) in our Company, and, if it is not a
whole number, rounding that figure down to the next whole number.
While the definition of an “interest” in our voting shares for the purposes of substantial shareholder
disclosure requirements under the Securities and Futures Act is similar to that under the
Companies Act, the Securities and Futures Act provides that a person who has authority (whether
formal or informal, or express or implied) to dispose of, or to exercise control over the disposal of,
a voting share is regarded as having an interest in such share, even if such authority is, or is
capable of being made, subject to restraint or restriction in respect of particular voting shares.
Minority Rights
The rights of minority shareholders of Singapore-incorporated companies 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 shareholder of the Company, as they think fit to remedy any of the
following situations:–
(a) the affairs of the Company are being conducted or the powers of the Board of Directors are
being exercised in a manner oppressive to, or in disregard of the interests of, one (1) or more
of the shareholders; or
(b) the Company takes an action, or threatens to take an action, or the shareholders pass a
resolution, or propose to pass a resolution, which unfairly discriminates against, or is
otherwise prejudicial to, one (1) or more of the shareholders, including the applicant.
Singapore courts have wide discretion as to the reliefs they may grant and those reliefs are in no
way limited to those listed in the Companies Act itself. Without prejudice to the foregoing,
Singapore courts may:–
(a) direct or prohibit any act or cancel or vary any transaction or resolution;
(b) regulate the conduct of the affairs of the Company in the future;
(c) authorise civil proceedings to be brought in the name of, or on behalf of, the Company by a
person or persons and on such terms as the court may direct;
(d) provide for the purchase of a minority shareholder’s shares by the other shareholders or by
the Company and, in the case of a purchase of shares by the Company, a corresponding
reduction of its share capital; or
(e) provide that the Company be wound up.
APPENDIX E – DESCRIPTION OF OUR SHARES
E-5
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1. NAME OF THE PLAN
1.1 The Plan shall be called the “iFAST Corporation Performance Share Plan”.
2. DEFINITIONS
2.1 In the Plan, unless the context otherwise requires, the following words and expressions
shall have the following meanings:
“Act” The Companies Act, Chapter 50 of Singapore as
amended from time to time.
“Adoption Date” The date on which the Plan is adopted by the Company
in general meeting.
“Associate” Shall have the meaning assigned to it in the Listing
Manual.
“Associated Company” A company in which at least 20% but not more than
50% of its issued shares are held by the Company or
the Group and over which the Company has Control.
“Auditors” The auditors of the Company for the time being.
“Award” A contingent award of Shares granted under Rule 5.
“Award Date” In relation to an Award, the date on which the Award is
granted pursuant to Rule 5.
“Award Letter” A letter in such form as the Committee shall approve
confirming an Award granted to a Participant by the
Committee.
“CDP” The Central Depository (Pte) Limited.
“Committee” The Remuneration Committee of the Company.
“Company” iFAST Corporation Ltd., a company incorporated in
Singapore.
“Control” The capacity to dominate decision-making, directly or
indirectly, in relation to the financial and operating
policies of the Company.
APPENDIX F – RULES OF THE IFAST PSP
F-1
“Controlling Shareholder” A person who holds directly or indirectly 15% or more of
the total number of issued Shares (excluding Shares
held by the Company as treasury shares) (unless
otherwise determined by the Singapore Exchange that
a person who satisfies this subparagraph is not a
controlling shareholder); or in fact exercises Control
over the Company.
“Group” The Company and its subsidiaries and Associated
Companies (as they may exist from time to time).
“Group Executive” Any confirmed employee of the Group (including any
Group Executive Director who meet the relevant
criteria and who shall be regarded as a Group
Executive for the purposes of the Plan) selected by the
Committee to participate in the Plan in accordance with
Rule 4.
“Group Executive Director” A director of the Company and/or any of its subsidiaries
and/or any of its Associated Companies, as the case
may be, who performs an executive function.
“Listing Manual” The Listing Manual of the Singapore Exchange.
“Non-executive Director” A director of the Company and/or its subsidiaries, other
than one (1) who performs an executive function.
“Participant” A person who has been granted an Award pursuant to
the Plan.
“Performance Condition” In relation to an Award, the condition specified on the
Award Date in relation to that Award.
“Performance Period” The period, as may be determined by the Committee at
its discretion, during which the Performance Condition
is to be satisfied.
“Plan” The iFAST Corporation Performance Share Plan, as
the same may be modified or altered from time to time.
“Release” In relation to an Award, the release at the end of the
Performance Period relating to that Award of all or
some of the Shares to which that Award relates in
accordance with Rule 7 and, to the extent that any
Shares which are the subject of the Award are not
released pursuant to Rule 7, the Award in relation to
those Shares shall lapse accordingly, and “Released”
shall be construed accordingly.
APPENDIX F – RULES OF THE IFAST PSP
F-2
“Release Schedule” In relation to an Award, a schedule in such form as the
Committee shall approve, setting out the extent to
which Shares which are the subject of that Award shall
be released on the Performance Condition being
satisfied (whether fully or partially) or exceeded or not
being satisfied, as the case may be, at the end of the
Performance Period.
“Released Award” An Award which has been released in accordance with
Rule 7.
“Retention Period” Such retention period as may be determined by the
Committee and notified to the Participant at the grant of
the relevant Award to that Participant.
“Shares” Ordinary shares in the capital of the Company.
“Singapore Exchange” The Singapore Exchange Securities Trading Limited.
“Trading Day” A day on which the Shares are traded on the Singapore
Exchange.
“Vesting” In relation to Shares which are the subject of a
Released Award, the absolute entitlement to all or
some of the Shares which are the subject of a
Released Award and “Vest” and “Vested” shall be
construed accordingly.
“Vesting Date” In relation to Shares which are the subject of a
Released Award, the date (as determined by the
Committee and notified to the relevant Participant) on
which those Shares have Vested pursuant to Rule 7.
2.2 Words importing the singular number shall, where applicable, include the plural number and
vice versa. Words importing the masculine gender shall, where applicable, include the
feminine and neuter genders.
2.3 Any reference to a time of a day in the Plan is a reference to Singapore time.
2.4 Any reference in the Plan to any enactment is a reference to that enactment as for the time
being amended or re-enacted. Any word defined under the Act or any statutory modification
thereof and not otherwise defined in the Plan and used in the Plan shall have the meaning
assigned to it under the Act or any statutory modification thereof, as the case may be.
3. OBJECTIVES OF THE PLAN
The Plan has been proposed in order to:
(a) foster an ownership culture within the Group which aligns the interests of Group
Executives and Non-executive Directors with the interests of shareholders;
APPENDIX F – RULES OF THE IFAST PSP
F-3
(b) motivate Participants to achieve key financial and operational goals of the Company
and/or their respective business units; and
(c) make total employee remuneration sufficiently competitive to recruit and retain staff
having skills that are commensurate with the Company’s ambition to become a
world-class company.
4. ELIGIBILITY OF PARTICIPANTS
4.1 The following persons (unless they are also Controlling Shareholders or Associates of
Controlling Shareholders) will be eligible to participate in the Plan at the absolute discretion
of the Committee:
(a) Group Executives of our Group and our associated companies who have attained the
age of twenty-one (21) years and hold such rank as may be designated by the
Committee from time to; and
(b) Non-executive Directors (including our Independent Directors).
4.2 Persons who are Controlling Shareholders or their Associates who meet the criteria as set
out above are eligible to participate in the iFAST PSP, provided that:
(a) the participation of each Controlling Shareholder or his Associate and each grant of an
Award to any of them may only be effected with the specific prior approval of
independent Shareholders in general meeting by a separate resolution;
(b) the actual number and terms of any Awards to be granted to them have been
specifically approved by independent Shareholders at a general meeting in separate
resolutions for each such Controlling Shareholder or his Associates where such
resolution sets out the specific number and terms of the Awards to be granted; and
(c) all conditions for their participation in the iFAST PSP as may be required by the
regulations of the SGX-ST from time to time are satisfied. In this regard, pursuant to
Rule 845 of the Listing Manual, (1) the aggregate number of Shares available to
Controlling Shareholders and their Associates must not exceed 25% of the Shares
available under the iFAST PSP; and (2) the number of Shares available to each
Controlling Shareholder or his Associate must not exceed 10% of the shares available
under the iFAST PSP.
5. GRANT OF AWARDS
5.1 Subject as provided in Rule 8, the Committee may grant Awards to Group Executives and
Non-executive Directors (unless they are also Controlling Shareholders or Associates of
Controlling Shareholders) as the Committee may select, in its absolute discretion, at any
time during the period when the Plan is in force.
5.2 The number of Shares which are the subject of each Award to be granted to a Participant
in accordance with the Plan shall be determined at the absolute discretion of the
Committee, which shall take into account criteria such as his rank, job performance,
creativity, innovativeness, entrepreneurship, years of service and potential for future
APPENDIX F – RULES OF THE IFAST PSP
F-4
development, his contribution to the success and development of our Group and, if
applicable, the extent of effort and resourcefulness with which the Performance Condition
may be achieved within the Performance Period.
5.3 The Committee shall decide in relation to an Award:
(a) the Participant;
(b) the Award Date;
(c) the Performance Period;
(d) the number of Shares which are the subject of the Award;
(e) the Performance Condition;
(f) the Release Schedule; and
(g) any other condition which the Committee may determine in relation to that Award.
5.4 The Committee may amend or waive the Performance Period, the Performance Condition
and/or the Release Schedule in respect of any Award:
(a) in the event of a take-over offer being made for the Shares or if under the Act, 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 or in the event of a proposal to liquidate or sell
all or substantially all of the assets of the Company; or
(b) if anything happens which causes the Committee to conclude that:
(i) a changed Performance Condition and/or Release Schedule would be a fairer
measure of performance, and would be no less difficult to satisfy; or
(ii) the Performance Condition and/or Release Schedule should be waived, and shall
notify the Participants of such change or waiver.
5.5 As soon as reasonably practicable after making an Award, the Committee shall send to
each Participant an Award Letter confirming the Award and specifying in relation to the
Award:
(a) the Award Date;
(b) the Performance Period;
(c) the number of Shares which are the subject of the Award;
(d) the Performance Condition;
(e) the Release Schedule; and
(f) any other condition which the Committee may determine in relation to that Award.
APPENDIX F – RULES OF THE IFAST PSP
F-5
5.6 Participants are not required to pay for the grant of Awards.
5.7 An Award or Released Award shall be personal to the Participant to whom it is granted and,
prior to the allotment and/or transfer to the Participant of the Shares to which the Released
Award relates, shall not be transferred, charged, assigned, pledged or otherwise disposed
of, in whole or in part, except with the prior approval of the Committee and if a Participant
shall do, suffer or permit any such act or thing as a result of which he would or might be
deprived of any rights under an Award or Released Award without the prior approval of the
Committee, that Award or Released Award shall immediately lapse.
6. EVENTS PRIOR TO THE VESTING DATE
6.1 An Award shall, to the extent not yet Released, immediately lapse without any claim
whatsoever against the Company:
(a) in the event of misconduct on the part of the Participant as determined by the
Committee in its discretion;
(b) subject to Rule 6.2(b), upon the Participant ceasing to be in the employment of the
Group for any reason whatsoever; or
(c) in the event of an order being made or a resolution passed for the winding-up of the
Company on the basis, or by reason, of its insolvency.
For the purpose of Rule 6.1(b), the 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.
6.2 In any of the following events, namely:
(a) 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 an Award;
(b) where the Participant ceases to be in the employment of the Group by reason of:
(i) ill health, injury or disability (in each case, evidenced to the satisfaction of the
Committee);
(ii) redundancy;
(iii) retirement at or after the legal retirement age;
(iv) retirement before the legal retirement age with the consent of the Committee;
(v) the company by which he is employed or to which he is seconded, as the case
may be, ceasing to be a company within the Group, or the undertaking or part
of the undertaking of such company being transferred otherwise than to another
company within the Group, as the case may be;
(vi) (where applicable) his transfer of employment between companies within the
Group;
APPENDIX F – RULES OF THE IFAST PSP
F-6
(vii) his transfer to any government ministry, governmental or statutory body or
corporation at the direction of any company within the Group; or
(viii) any other event approved by the Committee;
(c) the death of a Participant; or
(d) any other event approved by the Committee,
the Committee may, in its absolute discretion, preserve all or any part of any Award and
decide as soon as reasonably practicable following such event either to Vest some or all of
the Shares which are the subject of any Award or to preserve all or part of any Award until
the end of the Performance Period and subject to the provisions of the Plan. In exercising
its discretion, the Committee will have regard to all circumstances on a case-by-case basis,
including (but not limited to) the contributions made by that Participant and the extent to
which the Performance Condition has been satisfied.
6.3 Without prejudice to the provisions of Rule 5.4, if before the Vesting Date, any of the
following occurs:
(a) a take-over offer for the Shares becomes or is declared unconditional;
(b) 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 being approved by shareholders of the Company and/or
sanctioned by the court under the Act; or
(c) an order being made or a resolution being passed for the winding-up of the Company
(other than as provided in Rule 6.1(c) or for amalgamation or reconstruction),
the Committee will consider, at its discretion, whether or not to Release any Award, and will
take into account all circumstances on a case-by-case basis, including (but not limited to)
the contributions made by that Participant. If the Committee decides to Release any Award,
then in determining the number of Shares to be Vested in respect of such Award, the
Committee will have regard to the proportion of the Performance Period which has elapsed
and the extent to which the Performance Condition has been satisfied. Where Awards are
Released, the Committee will, as soon as practicable after the Awards have been Released,
procure the allotment or transfer to each Participant of the number of Shares so determined,
such allotment or transfer to be made in accordance with Rule 7.
7. RELEASE OF AWARDS
7.1 Review of Performance Condition
7.1.1 As soon as reasonably practicable after the end of each Performance Period, the
Committee shall review the Performance Condition specified in respect of each
Award and determine at its discretion whether it has been satisfied and, if so, the
extent to which it has been satisfied, and provided that the relevant Participant has
continued to be a Group Executive or a Non-executive Director from the Award Date
up to the end of the Performance Period, shall Release to that Participant all or part
(as determined by the Committee at its discretion in the case where the Committee
has determined that there has been partial satisfaction of the Performance Condition)
APPENDIX F – RULES OF THE IFAST PSP
F-7
of the Shares to which his Award relates in accordance with the Release Schedule
specified in respect of his Award on the Vesting Date. If not, the Awards shall lapse
and be of no value.
If the Committee determines in its sole discretion that the Performance Condition has
not been satisfied or (subject to Rule 6) if the relevant Participant has not continued
to be a Group Executive or a Non-executive Director from the Award Date up to the
end of the relevant Performance Period, that Award shall lapse and be of no value
and the provisions of Rules 7.2 to 7.4 shall be of no effect.
The Committee shall have the discretion to determine whether the Performance
Condition has been satisfied (whether fully or partially) or exceeded and in making
any such determination, the Committee shall have the right to make computational
adjustments to the audited results of the Company or the Group, to take into account
such factors as the Committee may determine to be relevant, including changes in
accounting methods, taxes and extraordinary events, and further the right to amend
the Performance Condition if the Committee decides that a changed performance
target would be a fairer measure of performance.
7.1.2 Shares which are the subject of a Released Award shall be Vested to a Participant
on the Vesting Date, which shall be a Trading Day falling as soon as practicable after
the review by the Committee referred to in Rule 7.1.1 and, on the Vesting Date, the
Committee will procure the allotment or transfer to each Participant of the number of
Shares so determined.
7.1.3 Where new Shares are allotted upon the Vesting of any Award, the Company shall,
as soon as practicable after such allotment, apply to the Singapore Exchange for
permission to deal in and for quotation of such Shares.
7.2 Release of Award
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 the securities account of
that Participant maintained with CDP or the securities sub-account of that Participant
maintained with a Depository Agent, in each case, as designated by that Participant.
7.3 Ranking of Shares
New Shares allotted and issued, and existing Shares procured by the Company for transfer,
on the Release of an Award shall:
(a) be subject to all the provisions of the Memorandum and Articles of Association of the
Company; and
(b) 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 relevant Vesting Date, and shall in all other respects rank pari passu with
other existing Shares then in issue.
For the purposes of this Rule 7.3, “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.
APPENDIX F – RULES OF THE IFAST PSP
F-8
7.4 Moratorium
Shares which are allotted and issued or transferred to a Participant pursuant to the Release
of an Award shall not be transferred, charged, assigned, pledged or otherwise disposed of,
in whole or in part, during the Retention Period, except to the extent set out in the Award
Letter or with the prior approval of the Committee. The Company may take steps that it
considers necessary or appropriate to enforce or give effect to this disposal restriction
including specifying in the Award Letter the conditions which are to be attached to an Award
for the purpose of enforcing this disposal restriction.
8. LIMITATION ON THE SIZE OF THE PLAN
8.1 The aggregate number of Shares which may be issued or transferred pursuant to Awards
granted under the Plan on any date, when aggregated with the aggregate number of Shares
over which options or awards are granted under any other share option schemes or share
schemes of the Company, shall not exceed 15% of the total number of issued Shares
(excluding Shares held by the Company as treasury shares) on the day preceding that date.
8.2 The aggregate number of Shares for which Awards may be granted under the iFAST PSP
to Controlling Shareholders and their Associates shall not exceed 25% of the Shares
available under the iFAST PSP, and the number of Shares over which an Award may be
granted under the iFAST PSP to each Controlling Shareholder or his Associate shall not
exceed 10% of the Shares available under the iFAST PSP.
8.3 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 Plan.
9. ADJUSTMENT EVENTS
9.1 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, 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 in respect of which future Awards may be granted
under the Plan,
shall be adjusted in such manner as the Committee may determine to be appropriate,
provided that no adjustment shall be made if as a result, the Participant receives a benefit
that a shareholder of the Company does not receive.
9.2 Unless the Committee considers an adjustment to be appropriate, the issuance of securities
as consideration for an acquisition or a private placement of securities, or 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 Singapore Exchange during the period
when a share purchase mandate granted by shareholders of the Company (including any
renewal of such mandate) is in force, shall not normally be regarded as a circumstance
requiring adjustment.
APPENDIX F – RULES OF THE IFAST PSP
F-9
9.3 Notwithstanding the provisions of Rule 9.1, 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.
9.4 Upon any adjustment required to be made pursuant to this Rule 9, 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.
10. ADMINISTRATION OF THE PLAN
10.1 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 of directors of the Company, provided
that no member of the Committee shall participate in any deliberation or decision in respect
of Awards to be granted to him or held by him.
10.2 The Committee shall have the power, from time to time, to make and vary such
arrangements, guidelines and/or regulations (not being inconsistent with the Plan) for the
implementation and administration of the Plan, to give effect to the provisions of the Plan
and/or to enhance the benefit of the Awards and the Released Awards to the Participants,
as it may, in its absolute discretion, think fit. Any matter pertaining or pursuant to the Plan
and any dispute and uncertainty as to the interpretation of the Plan, any rule, regulation or
procedure thereunder or any rights under the Plan shall be determined by the Committee.
10.3 Neither the Plan nor the grant of Awards under the Plan shall impose on the Company or
the Committee or any of its members any liability whatsoever in connection with: (a) the
lapsing of any Awards pursuant to any provision of the Plan; (b) the failure or refusal by the
Committee to exercise, or the exercise by the Committee of, any discretion under the Plan;
and/or (c) any decision or determination of the Committee made pursuant to any provision
of the Plan.
10.4 Any decision or determination of the Committee made pursuant to any provision of the Plan
(other than a matter to be certified by the Auditors) shall be final, binding and conclusive
(including for the avoidance of doubt, any decisions pertaining to disputes as to the
interpretation of the Plan or any rule, regulation or procedure hereunder or as to any rights
under the Plan). The Committee shall not be required to furnish any reasons for any
decision or determination made by it.
10.5 As a safeguard against abuse, pursuant to the Listing Manual, a Participant who is a
member of the Committee shall not be involved in its deliberation in respect of Awards (if
any) to be granted to him. Further, where Awards are proposed to be granted to or held by
Group Executive Directors, Controlling Shareholders or their Associates, all members of the
Board (and not just members of the Committee) who are not Group Executive Directors,
Controlling Shareholders or Associates of Controlling Shareholders, will be involved in
deliberation on the same.
APPENDIX F – RULES OF THE IFAST PSP
F-10
11. NOTICES AND COMMUNICATIONS
11.1 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 (including electronic mail
addresses) or facsimile number, and marked for the attention of the Committee, as may be
notified by the Company to him in writing.
11.2 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, electronic mail
address or facsimile number according to the records of the Company or the last known
address, electronic mail address or facsimile number of the Participant.
11.3 Any notice or other communication from a Participant to the Company shall be irrevocable,
and shall not be effective until received by the Company. Any other notice or communication
from the Company to a Participant shall be deemed to be received by that Participant, when
left at the address specified in Rule 11.2 or, if sent by post, on the day following the date
of posting or, if sent by electronic mail or facsimile transmission, on the day of despatch.
12. MODIFICATIONS TO THE PLAN
12.1 Any or all the provisions of the Plan may be modified and/or altered at any time and from
time to time by a resolution of the Committee, except that:
(a) no modification or alteration shall alter adversely the rights attached to any Award
granted prior to such modification or alteration except with the consent in writing of
such number of Participants who, if their Awards were Released to them upon the
Performance Conditions for their Awards being satisfied in full, would become entitled
to not less than three-quarters in number of all the Shares which would fall to be
Vested upon Release of all outstanding Awards upon the Performance Conditions for
all outstanding Awards being satisfied in full;
(b) the definitions of “Associated Company”, “Group Executive”, “Group Executive
Director”, “Non-executive Director”, “Participant”, “Performance Period” and “Release
Schedule” and the provisions of Rules 4, 5, 6, 7, 8, 9, 10 and this Rule 12 shall not be
altered to the advantage of Participants except with the prior approval of the
Company’s shareholders in general meeting; and
(c) no modification or alteration shall be made without the prior approval of the Singapore
Exchange and such other regulatory authorities as may be necessary.
For the purposes of Rule 12.1(a), the opinion of the Committee as to whether any
modification or alteration would adversely affect the rights attached to any Award shall be
final, binding and conclusive.
For the avoidance of doubt, nothing in this Rule 12.1 shall affect the right of the Committee
under any other provision of the Plan to amend or adjust any Award.
APPENDIX F – RULES OF THE IFAST PSP
F-11
12.2 Notwithstanding anything to the contrary contained in Rule 12.1, the Committee may at any
time by resolution (and without other formality, save for the prior approval of the Singapore
Exchange) amend or alter the Plan in any way to the extent necessary or desirable, in the
opinion of the Committee, to cause the Plan to comply with, or take into account, any
statutory provision (or any amendment or modification thereto, including amendment of or
modification to the Act) or the provision or the regulations of any regulatory or other relevant
authority or body (including the Singapore Exchange).
12.3 Written notice of any modification or alteration made in accordance with this Rule 12 shall
be given to all Participants.
13. ABSTENTION FROM VOTING
Shareholders who are eligible to participate in the Plan are to abstain from voting on any
shareholders’ resolution relating to the Plan, including resolutions pertaining to (a) the
implementation of the iFAST PSP; and (b) participation by and Awards granted to
Controlling Shareholders and their Associates.
14. TERMS OF EMPLOYMENT UNAFFECTED
The terms of employment of a Participant shall not be affected by his participation in the
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.
15. DURATION OF THE PLAN
15.1 The Plan shall continue to be in force at the discretion of the Committee, subject to a
maximum period of ten (10) years commencing on the Adoption Date, provided always that
the 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.
15.2 The Plan may be terminated at any time by the Committee or, at the discretion of the
Committee, by resolution of the Company in general meeting, subject to all relevant
approvals which may be required and if the Plan is so terminated, no further Awards shall
be granted by the Committee hereunder.
15.3 The expiry or termination of the Plan shall not affect Awards which have been granted prior
to such expiry or termination, whether such Awards have been Released (whether fully or
partially) or not.
16. TAXES
All taxes (including income tax) arising from the grant or Release of any Award granted to
any Participant under the Plan shall be borne by that Participant.
APPENDIX F – RULES OF THE IFAST PSP
F-12
17. COSTS AND EXPENSES OF THE PLAN
17.1 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 Release of any Award 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.
17.2 Save for the taxes referred to in Rule 15 and such other costs and expenses expressly
provided in the Plan to be payable by the Participants, all fees, costs and expenses incurred
by the Company in relation to the Plan including but not limited to the fees, costs and
expenses relating to the allotment and issue, or transfer, of Shares pursuant to the Release
of any Award shall be borne by the Company.
18. DISCLAIMER OF LIABILITY
Notwithstanding any provisions herein contained, 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 procuring the transfer of, the Shares or applying for or procuring the
listing of new Shares on the Singapore Exchange in accordance with Rule 7.1.3.
19. DISCLOSURES IN ANNUAL REPORTS
The Company shall make the following disclosure (as applicable) in its annual report:
(a) The names of the members of the Committee administering the Plan;
(b) The information required in the table below for the following Participants of the Plan:
(i) Participants who are Directors of the Company;
(ii) Participants who are Controlling Shareholders and their Associates; and
(iii) Participants, other than those in (i) and (ii) above, who receive 5% or more of the
total number of Shares available under the Plan; and
Name of
Participant
Total
number of
Shares
comprised
in Awards
under the
iFAST PSP
during the
financial
year under
review
(including
terms)
Aggregate
number of
Shares
comprised in
Awards vested
to such
Participant
since
commencement
of the iFAST
PSP to the end
of the financial
year under
review
Aggregate
number of
Shares
comprised in
Awards issued
since
commencement
of the iFAST
PSP to the end
of the financial
year under
review
Aggregate
number of
Shares
comprised
in Awards
which have
not been
released as
at the end
of the
financial
year under
review
APPENDIX F – RULES OF THE IFAST PSP
F-13
(c) the number and proportion of Shares comprised in Awards granted at a discount
during the financial year under review in respect of every 10% discount range, up to
the maximum quantum of discount granted; and
(d) any other information required to be so disclosed pursuant to the Listing Manual and
all other applicable laws and requirements,
provided that if any of the above requirements are not applicable, an appropriate negative
statement should be included therein.
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. GOVERNING LAW
The Plan shall be governed by, and construed in accordance with, the laws of the Republic
of Singapore. The Participants, by accepting grants of Awards in accordance with the Plan,
and the Company submit to the exclusive jurisdiction of the courts of the Republic of
Singapore.
22. CONTRACTS (RIGHTS OF THIRD PARTIES) ACT, CHAPTER 53B
No person other than the Company or a Participant shall have any right to enforce any
provision of the Plan or any Award by the virtue of the Contracts (Rights of Third Parties)
Act, Chapter 53B of Singapore.
APPENDIX F – RULES OF THE IFAST PSP
F-14
1. DEFINITIONS
In this Scheme, unless the context otherwise requires, the following words and expressions
shall have the following meanings:
“Act” The Companies Act, Chapter 50 of Singapore, as
amended or modified from time to time.
“Associate” Shall have the meaning assigned to it in the Listing
Rules.
“Associated Company” A company in which at least 20% but not more than
50% of its issued shares are held by the Company or
the Group and over which the Company has Control.
“Associated Company
Employee”
Any confirmed employee (including directors) of an
Associated Company selected by the Committee to
participate in the Scheme.
“Auditors” The auditors of the Company for the time being.
“Board” The board of Directors of the Company for the time
being.
“CDP” The Central Depository (Pte) Limited.
“Committee” The Remuneration Committee of the Company.
“Company” iFAST Corporation Ltd.
“Control” The capacity to dominate decision-making, directly or
indirectly, in relation to the financial and operating
policies of the Company.
“Controlling Shareholder” A shareholder who:
(a) holds directly or indirectly 15% or more of the total
number of issued Shares (excluding Shares held
by the Company as treasury shares) (unless
otherwise determined by the SGX-ST that a
person who satisfies this subparagraph is not a
controlling shareholder); or
(b) in fact exercises Control over the Company.
“Date of Grant” The date on which an Option is granted to a Participant
pursuant to Rule 7.
APPENDIX G – RULES OF THE IFAST ESOS
G-1
“Director” A person holding office as a director for the time being
of the Company.
“EGM” Extraordinary General Meeting.
“Executive Director” A director who is an employee of the Group and who
performs an executive function.
“Exercise Price” The price at which a Participant shall acquire each
Share upon the exercise of an Option, as determined in
accordance with Rule 9, or such adjusted price as may
be applicable pursuant to Rule 10.
“Financial Year” Each period of twelve (12) months or more or less than
twelve (12) months, at the end of which the balance of
accounts of the Company are prepared and audited, for
the purpose of laying the same before an annual
general meeting of the Company.
“Grantee” The person to whom an offer of an Option is made.
“Group” The Company, its subsidiaries and Associated
Companies (as they may exist from time to time).
“Group Employee” Any confirmed employee of the Group (including an
Executive Director) selected by the Committee to
participate in the Scheme in accordance with Rule 4.
“Listing Rules” The rules constituted in the Listing Manual of the
SGX-ST.
“Market Day” A day on which the SGX-ST is open for trading of
securities.
“Market Price” The average of the last dealt prices for a Share
determined by reference to the daily Official List
published by the SGX-ST for a period of five (5)
consecutive Market Days immediately prior to the
relevant Offer Date provided always that in the case of
a Market Day on which the Shares are not traded on
the SGX-ST, the last dealt price for Shares on such
Market Day shall be deemed to be the last dealt price
of the Shares on the immediately preceding Market
Day on which the Shares were traded, rounded up to
the nearest whole cent in the event of fractional prices.
“Non-executive Director” A director of the Company and/or its subsidiaries, other
than one (1) who performs an executive function.
APPENDIX G – RULES OF THE IFAST ESOS
G-2
“Offer Date” The date on which an offer to grant an Option is made
pursuant to the Scheme.
“Option” The right to acquire Shares granted or to be granted to
a Group Employee or a Non-executive Director
pursuant to the Scheme and for the time being
subsisting.
“Option Period” Subject as provided in Rules 11 and 15, the period for
the exercise of an Option being:
(a) in the case of an Option granted to a Group
Employee (other than Options granted to Non-
executive Directors and/or Associated Company
Employees), a period commencing after the first
anniversary of the Offer Date and expiring on (and
including) the date immediately preceding the
tenth anniversary of the Offer Date or such other
shorter period determined by the Committee; and
(b) in the case of an Option granted to Non-executive
Directors and/or Associated Company
Employees, a period commencing after the first
anniversary of the Offer Date and expiring on (and
including) the date immediately preceding the fifth
anniversary of the Offer Date or such other
shorter period determined by the Committee,
provided that where the Exercise Price for the Shares
comprised in an Option is set at a discount to the
Market Price, such Option may not be exercised before
the second anniversary of such Offer Date.
“Participant” The holder of an Option.
“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.
“Scheme” The iFAST ESOS as modified or amended from time to
time.
“S$” Singapore dollars.
“SGX-ST” The Singapore Exchange Securities Trading Limited.
“Shares” Ordinary shares in the capital of the Company.
APPENDIX G – RULES OF THE IFAST ESOS
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“Shareholders” The registered holders for the time being of the Shares
(other than CDP) or in the case of Depositors,
Depositors who have Shares entered against their
names in the Depository Register.
“Subsidiary” A company which is for the time being a subsidiary of
the Company as defined by Section 5 of the Act.
The terms “Depositor”, “Depository Register” and “Depository Agent” shall have the
meanings ascribed to them respectively by Section 130A of the Act.
Words denoting the singular shall, where applicable, include the plural and vice versa and
words denoting the masculine gender shall, where applicable, include the feminine and
neuter gender. References to persons shall include corporations.
Any reference in the Scheme to any enactment is a reference to that enactment as for the
time being amended or re-enacted. Any word defined under the Act or any statutory
modification thereof and used in this Scheme shall, where applicable, have the same
meaning assigned to it under the Act. Any reference in this Scheme to a time of day shall
be a reference to Singapore time unless otherwise stated.
2. NAME OF THE SCHEME
The Scheme shall be called the “iFAST ESOS”.
3. OBJECTIVES OF THE SCHEME
The Scheme will provide an opportunity for Group Employees who have contributed
significantly to the growth and performance of the Group and Non-executive Directors and
who satisfy the eligibility criteria as set out in Rule 4 of the Scheme, to participate in the
equity of the Company.
The Scheme is primarily a share incentive scheme. It recognises the fact that the services
of Group Employees and Non-executive Directors are important to the success and
continued well-being of the Group. Implementation of the Scheme will enable the Company
to give recognition to the contributions made by such Group Employees and Non-executive
Directors. At the same time, it will give such Group Employees and Non-executive Directors
an opportunity to have a direct interest in the Company at no direct cost to its profitability
and will also help to achieve the following positive objectives:
(a) to motivate Participants to optimise their 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 prosperity of the Group;
(c) to instill loyalty to, and a stronger identification by Participants with the long-term
prosperity of, the Group;
APPENDIX G – RULES OF THE IFAST ESOS
G-4
(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 Participants with the interests of the Shareholders.
4. ELIGIBILITY
4.1 The following persons shall be eligible to participate in the Scheme at the absolute
discretion of the Committee:
(a) Group Employees (including Executive Directors) who have attained the age of
twenty-one (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, and
who have, as of the Date of Grant, been in the employment of the Group for a period
of at least twelve (12) months, or such shorter period as the Committee may
determine; and
(b) Non-executive Directors.
Directors and employees of the Company’s parent company and its Subsidiaries (other than
the Company and the Company’s Subsidiaries) are not entitled to participate in the
Scheme.
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.
4.2 Controlling Shareholders and their Associates who satisfy the criteria set out in Paragraph
4.1 above shall be eligible to participate in the Scheme provided that:
(a) their participation; and
(b) the actual or maximum number of Shares and terms of any Options to be granted to
them,
have been approved by independent shareholders of the Company at a general meeting in
separate resolutions for each such person and, in respect of each such person, in separate
resolutions for each of (i) his participation and (ii) the actual or maximum number of Shares
and terms of any Options to be granted to him, provided always that it shall not be
necessary to obtain the approval of the independent shareholders of the Company for the
participation in the Scheme of a Controlling Shareholder or his Associate who is, at the
relevant time, already a Participant.
5. MAXIMUM ENTITLEMENT
Subject to Rule 4 and Rule 10, the aggregate number of Shares in respect of which Options
may be offered to a Grantee for acquisition in accordance with the Scheme 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 Grantee.
APPENDIX G – RULES OF THE IFAST ESOS
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6. LIMITATION ON SIZE OF THE SCHEME
6.1 The aggregate number of Shares over which the Committee may grant Options on any date,
when added to the number of Shares issued and issuable or transferred and to be
transferred in respect of all Options granted under the Scheme and the number of Shares
issued and issuable or transferred and to be transferred in respect of all options or awards
granted under any other share option schemes or share schemes of the Company, shall not
exceed 15% of the total number of issued Shares (excluding Shares held by the Company
as treasury shares) on the day immediately preceding the Offer Date of the Option.
6.2 The aggregate number of Shares which may be issued or transferred pursuant to Options
under the Scheme to Participants who are Controlling Shareholders and their Associates
shall not exceed twenty-five (25) per cent. of the Shares available under the Scheme.
6.3 The number of Shares which may be issued or transferred pursuant to Options under the
Scheme to each Participant who is a Controlling Shareholder or his Associate shall not
exceed ten (10) per cent. of the Shares available under the Scheme.
7. OFFER DATE
7.1 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 Scheme is in force, except that no Options shall be granted during the period of
thirty (30) days immediately preceding the date of announcement of the Company’s interim
and/or final results (whichever 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 to grant Options may only be made on or after the third
Market Day on which such announcement is released.
7.2 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 Annex 1, subject to such
amendments as the Committee may determine from time to time.
8. ACCEPTANCE OF OFFER
8.1 An Option offered to a Grantee pursuant to Rule 7 may only be accepted by the Grantee
within thirty (30) days after the relevant Offer Date and not later than 5.00 p.m. on the
thirtieth (30th) day from such Offer Date (a) by completing, signing and returning to the
Company the Acceptance Form in or substantially in the form set out in Annex 2, subject to
such modification as the Committee may from time to time determine, accompanied by
payment of S$1.00 as consideration or such other amount and such other documentation
as the Committee may require 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 Scheme in accordance with these Rules.
8.2 If a grant of an Option is not accepted strictly in the manner as provided in this Rule 8, such
offer shall, upon the expiry of the thirty (30) day period, automatically lapse and shall
forthwith be deemed to be null and void and be of no effect.
8.3 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 (as defined in Rule 12) given pursuant to
Rule 12 which does not strictly comply with the terms of the Scheme.
APPENDIX G – RULES OF THE IFAST ESOS
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8.4 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.
8.5 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. The Committee
shall, within fifteen (15) Market Days of receipt of the Acceptance Form and consideration,
acknowledge receipt of the same.
8.6 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.
8.7 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 Rule 8.1 within the thirty (30) day
period; or
(b) the Participant dies prior to his acceptance of the Option; or
(c) the Participant is adjudicated a bankrupt or enters into composition with his creditors
prior to his acceptance of the Option; or
(d) the Grantee, being a Group Employee, ceases to be in the employment of the Group
or (being an Executive 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.
9. EXERCISE PRICE
9.1 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 at its absolute
discretion, and shall be fixed by the Committee at:
(a) the Market Price; or
(b) a price which is set at a discount to the Market Price, provided that:
(i) the maximum discount which may be given in respect of any Option shall not
exceed 20% of the Market Price in respect of that Option (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 aforesaid.
APPENDIX G – RULES OF THE IFAST ESOS
G-7
9.2 In making any determination under Rule 9.1(b) 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, its Subsidiaries and Associated Companies, as the
case may be, taking into account financial parameters such as net profit after tax,
return on equity and earnings growth;
(b) the years of service and individual performance of the eligible Group Employee;
(c) the contribution of the eligible Group Employee to the success and development of the
Company and/or the Group; and
(d) the prevailing market conditions.
9.3 In the event that the Company is no longer listed on the Mainboard of the SGX-ST or any
other relevant stock exchange or trading in the Shares on the Mainboard of the SGX-ST or
such stock exchange is suspended for any reason for fourteen (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, subdivision, consolidation or distribution,
or otherwise howsoever) should take place, then:
(a) the Exercise Price in respect of the Shares comprised in the Option to the extent
unexercised; and/or
(b) the class and/or number of Shares comprised in the Option to the extent unexercised
and the rights attached thereto; and/or
(c) the maximum entitlement in any one (1) Financial Year; and/or
(d) the class and/or number of Shares in respect of which additional Options may be
granted to Participants,
may, at the option of the Committee, 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 considers it equitable to
do so.
APPENDIX G – RULES OF THE IFAST ESOS
G-8
10.3 The issue of securities as consideration for an acquisition of any assets by the Company or
a private placement of securities or the cancellation of issued Shares purchased or
acquired by the Company by way of a market purchase of such Shares, in accordance with
the Listing Rules, undertaken by the Company on the SGX-ST during the period when a
share repurchase mandate granted by the Shareholders (including any renewal of such
mandate) is in force, will 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
or transferred 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, 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 and the maximum entitlement in any one (1)
Financial Year.
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 (other than Options granted
to Non-executive Directors and/or Associated Company Employees) shall be exercised
before the tenth anniversary of the relevant Offer Date and Options granted to Non-
executive Directors and/or Associated Company Employees shall be exercised before the
fifth 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
(other than Options granted to Non-executive Directors and/or Associated Company
Employees) shall be exercised before the tenth anniversary of the relevant Offer Date and
Options granted to Non-executive Directors and/or Associated Company Employees shall
be exercised before the fifth 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
APPENDIX G – RULES OF THE IFAST ESOS
G-9
(b) 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 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.
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 Option
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 an Executive Director or a Non-executive Director (as the case
may be), 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.
APPENDIX G – RULES OF THE IFAST ESOS
G-10
12. EXERCISE OF OPTIONS, ALLOTMENT OR TRANSFER 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 Annex 3 (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 said 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 (including
any approvals required from the SGX-ST); and
(b) compliance with the Rules of the Scheme and the Memorandum and Articles 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 ten (10) Market Days after the date of the exercise of the Option in
accordance with Rule 12.1, allot the Shares or, as the case may be, procure the transfer of
existing Shares (which may include, where desired, any Shares held by the Company as
treasury shares), in respect of which such Option has been exercised by the Participant and
where required, or as the case may be, 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 as soon as practicable after the exercise of an Option, apply to the
SGX-ST or any other stock exchange on which the Shares are quoted or listed for
permission to deal in and for 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 all allotted or transferred on the exercise of an Option by a Participant
shall be issued, as the Participant may elect, in the name of, or transferred to, CDP to the
credit of the securities account of the Participant maintained with CDP or the Participant’s
securities sub-account with a Depository Agent.
12.5 Shares allotted and issued, and existing Shares procured by the Company for transfer,
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 except for any dividends, rights, allotments or other
distributions, the Record Date for which is prior to the date such Option is exercised.
APPENDIX G – RULES OF THE IFAST ESOS
G-11
12.6 Except as set out in Rule 12 and subject to Rule 10, an Option does not confer on a
Participant any right to participate in any new issue of Shares.
13. ALTERATIONS AND AMENDMENTS TO THE SCHEME
13.1 Any or all of the provisions of the Scheme 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 three-quarters (3/4) in number of all the Shares which
would fall to be issued and allotted or transferred upon exercise in full of all
outstanding Options;
(b) any modification or alteration which would be to the advantage of Participants under
the Scheme shall be subject to the prior approval of Shareholders at a general
meeting; and
(c) no modification or alteration shall be made without due compliance with the Listing
Manual, the prior approval of the SGX-ST or (if required) any other stock exchange on
which the Shares are quoted or 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 any other formality save for the prior approval of the
SGX-ST) amend or alter the Scheme in any way to the extent necessary to cause the
Scheme to comply with any statutory provision or the provisions or the regulations of any
regulatory or other relevant authority or body (including the SGX-ST).
13.3 Written notice of any modification or alteration made in accordance with this Rule shall be
given to all Participants.
14. DURATION OF THE SCHEME
14.1 The Scheme shall continue to be in force at the discretion of the Committee, subject to a
maximum period of ten (10) years, commencing on the date on which the Scheme is
adopted by Shareholders in the EGM. Subject to compliance with any applicable laws and
regulations in Singapore, the Scheme 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 Scheme may be terminated at any time by the Committee or by resolution of the
Shareholders at a general meeting subject to all other relevant approvals which may be
required and if the Scheme is so terminated, no further Options shall be offered by the
Company hereunder.
APPENDIX G – RULES OF THE IFAST ESOS
G-12
14.3 The termination, discontinuance or expiry of the Scheme 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
Rule 11.1 and 11.2) holding Options as yet unexercised shall, notwithstanding Rule 11 and
Rule 12 but subject to Rule 15.5, be entitled to exercise such Options in full or in part in 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 SGX-ST, 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 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, remain exercisable
until the expiry of the Option Period.
15.2 If, under the Act, 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, Participants (including Participants
holding Options which are then not exercisable pursuant to the provisions of Rule 11.1 and
Rule 11.2) shall notwithstanding Rule 11 and Rule 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 sixty (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 (other than an Option granted to a
Non-executive Director or an Associated Company Employee) shall be before the tenth
anniversary of the Offer Date.
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.
APPENDIX G – RULES OF THE IFAST ESOS
G-13
15.4 In the event of a members’ solvent voluntary winding-up (other than for amalgamation or
reconstruction), Participants (including Participants holding Options which are then not
exercisable pursuant to the provisions of Rule 11.1 and Rule 11.2) shall, subject to Rule
15.5, be entitled within thirty (30) days of the passing of the resolution of such winding-up
(but not after the expiry of the Option Period relating thereto) to exercise in full any
unexercised Option, after which such unexercised Option shall lapse and become null and
void.
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 To the extent that an Option is not exercised within the periods referred to in this Rule 15,
it shall lapse and become null and void.
16. ADMINISTRATION OF THE SCHEME
16.1 The Scheme shall be administered by the Committee in its absolute discretion with such
powers and duties as are conferred on 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 Scheme) for the implementation and administration of the
Scheme as it thinks fit.
16.3 Any decision of the Committee, made pursuant to any provision of the Scheme (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 Scheme or any rule, regulation, or
procedure thereunder or as to any rights under the Scheme).
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.
16.5 As a safeguard against abuse, pursuant to the Listing Manual, a Participant who is a
member of the Committee shall not be involved in its deliberation in respect of Options (if
any) to be granted to him. Further, where Options are proposed to be granted to or held by
Group Executive Directors, Controlling Shareholders or their Associates, all members of the
Board (and not just members of the Committee) who are not Group Executive Directors,
Controlling Shareholders or Associates of Controlling Shareholders, will be involved in
deliberation on the same.
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.
APPENDIX G – RULES OF THE IFAST ESOS
G-14
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.
18. TERMS OF EMPLOYMENT UNAFFECTED
18.1 The Scheme or any Option shall not form part of any contract of employment between the
Company, any Subsidiary or Associated Company (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 the Group shall not be affected by his participation in the Scheme
or any right which he may have to participate in it or any Option which he may hold and the
Scheme 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 Scheme shall not confer on any person any legal or equitable rights (other than those
constituting the Options themselves) against the Company, any Subsidiary and/or
Associated Company directly or indirectly or give rise to any cause of action at law or in
equity against the Company, any Subsidiary or Associated Company.
19. TAXES
All taxes (including income tax) arising from the exercise of any Option granted to any
Participant under the Scheme shall be borne by the Participant.
20. COSTS AND EXPENSES OF THE SCHEME
20.1 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 exercise of any Option in
CDP’s name, the deposit of share certificate(s) with CDP, the Participant’s security account
with CDP or the Participant’s securities sub-account with his Depository Agent 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 Scheme to be payable by the
Participants, all fees, costs, and expenses incurred by the Company in relation to the
Scheme including but not limited to the fees, costs and expenses relating to the issue and
allotment or transfer of the Shares pursuant to the exercise of any Option shall be borne by
the Company.
21. DISCLAIMER OF LIABILITY
Notwithstanding any provisions herein contained and subject to the 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 Scheme including but not limited to the Company’s
delay or failure in issuing and allotting, or procuring the transfer of, the Shares or in applying
for or procuring the listing of and quotation for the Shares on the SGX-ST or any other stock
exchanges on which the Shares are quoted or listed.
APPENDIX G – RULES OF THE IFAST ESOS
G-15
22. 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 of the Company;
(ii) Participants who are Controlling Shareholders and their Associates; and
(iii) Participants, other than those in (i) and (ii) above, who receive 5% or more of the
total number of Options available under the Scheme; and
Name of
Participant
Options
granted
during
financial
year under
review
(including
terms)
Aggregate
Options
granted since
commencement
of the Scheme
to end of
financial year
under review
Aggregate
Options
exercised since
commencement
of the Scheme
to end of
financial year
under review
Aggregate
Options
outstanding
as at end of
financial
year under
review
(c) The names of and number and terms of options granted to each director or employee
of the parent company and its subsidiaries who receives 5% 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 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.
(d) The number and proportion of Options granted at the following discounts to the Market
Price in the financial year under review:
(i) options granted at up to 10% discount; and
(ii) options granted at between 10% but not more than 20% discount.
If any of the above requirements in this clause 25 is not applicable, an appropriate negative
statement must be included.
23. ABSTENTION FROM VOTING
Shareholders who are eligible to participate in the iFAST ESOS must abstain from voting on
any resolution relating to the ESOS, including resolutions pertaining to (a) the
implementation of the iFAST ESOS; (b) discount quantum of the iFAST ESOS; and (c)
participation by and options grant to Controlling Shareholders and their Associates.
APPENDIX G – RULES OF THE IFAST ESOS
G-16
24. DISPUTES
Any disputes or differences of any nature in connection with the Scheme shall be referred
to the Committee and its decision shall be final and binding in all respects.
25. CONDITION OF OPTION
Every Option shall be subject to the condition that no Shares shall be issued or transferred
pursuant to the exercise of an Option 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.
26. GOVERNING LAW
The Scheme shall be governed by and construed in accordance with the laws of the
Republic of Singapore. The Company and the Participants, by accepting the offer of the
grant of Options in accordance with the Scheme, shall submit to the exclusive jurisdiction
of the courts of the Republic of Singapore.
APPENDIX G – RULES OF THE IFAST ESOS
G-17
ANNEX 1
iFAST ESOS
LETTER OF OFFER
Serial No:
PRIVATE AND CONFIDENTIAL
Date:
To: [Name]
[Designation]
[Address]
Dear Sir/Madam
We are pleased to inform you that you have been nominated by the Remuneration Committee of
the Board of Directors of iFAST Corporation Ltd. (the “Company”) to participate in the iFAST ESOS
(the “Scheme”). Terms as defined in the Scheme shall have the same meaning when used in this
letter.
Accordingly, an offer is hereby made to grant you an Option, in consideration of the payment of
a sum of S$1.00, to acquire ordinary shares in the capital of the Company
at the price of S$ per ordinary share. The Option shall be subject to the terms
of this Letter of Offer and the Scheme (as the same may be amended from time to time pursuant
to the terms and conditions of the Scheme), a copy of which is enclosed herewith.
The Option is personal to you and may not be sold, mortgaged, transferred, charged, assigned,
pledged or otherwise disposed of or encumbered in whole or in part or in any way whatsoever.
If you wish to accept the offer, please sign and return the enclosed Acceptance Form with a sum
of S$1.00 not later than a.m./p.m. on the day of
failing which this offer will forthwith lapse.
Yours faithfully
For and on behalf of
iFAST Corporation Ltd.
Name:
Designation:
APPENDIX G – RULES OF THE IFAST ESOS
G-18
ANNEX 2
iFAST ESOS
ACCEPTANCE FORM
Serial No:
To: The Remuneration Committee
iFAST ESOS
c/o The Company Secretary
iFAST Corporation Ltd.
[Address]
Closing Time and Date for Acceptance of Option :
No. of Shares in respect of which Option is offered :
Exercise Price per Share : S$
Total Amount Payable on Acceptance of Option
(exclusive of the relevant CDP charges) : S$
I have read your Letter of Offer dated (the “Offer Date”) and agree to be
bound by the terms thereof and of the iFAST ESOS stated therein. 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 acquire such shares.
I hereby accept the Option to acquire ordinary shares in the capital of iFAST
Corporation Ltd. (the “Shares”) at S$ per Share and enclose cash/banker’s
draft/cashier’s order/postal order no. for S$1.00 being payment for the
purchase of the Option.
I understand that I am not obliged to exercise the Option.
I also understand that I shall be responsible for all the fees of CDP relating to or in connection with
the issue and allotment or transfer of any Shares in CDP’s name, the deposit of share certificates
with CDP, my securities account with CDP or my securities sub-account with a Depository Agent
(as the case may be) (collectively, the “CDP charges”).
I confirm that as at the date hereof:
(a) I am not less than 21 years old nor an undischarged bankrupt nor have I entered into a
composition with any of my creditors;
(b) I satisfy the eligibility requirements to participate in the Scheme as defined in Rule 4 of the
Scheme; and
(c) I satisfy the other requirements to participate in the Scheme as set out in the Rules of the
Scheme.
APPENDIX G – RULES OF THE IFAST ESOS
G-19
I hereby acknowledge that you have not made any representation or warranty or given me any
expectation of employment or continued employment to induce me to accept the offer and that the
terms of the Letter of Offer and this Acceptance Form constitute the entire agreement between us
relating to the offer.
I agree to keep all information pertaining to the grant of the Option to me confidential.
APPENDIX G – RULES OF THE IFAST ESOS
G-20
PLEASE PRINT IN BLOCK LETTERS
Name in full :
Designation :
Address :
Nationality :
*NRIC/Passport No. :
Signature :
Date :
* Delete as appropriate
Notes:
(1) Option must be accepted in full or in multiples of 1,000 Shares.
(2) The Acceptance Form must be forwarded to the Company Secretary in an envelope marked “Private and
Confidential”.
(3) The Participant shall be informed by the Company of the relevant CDP charges payable at the time of the exercise
of an Option.
APPENDIX G – RULES OF THE IFAST ESOS
G-21
ANNEX 3
iFAST ESOS
EXERCISE NOTICE
To: The Remuneration Committee
iFAST ESOS
c/o The Company Secretary
iFAST Corporation Ltd.
[Address]
Total Number of ordinary shares (the “Share”) at
S$ per Share under an Option
granted on (the “Offer Date”) :
Number of Shares previously allotted and issued or
transferred thereunder :
Outstanding balance of Shares which may be
allotted and issued or transferred thereunder :
Number of Shares now to be acquired
(in multiples of 1,000) :
1. Pursuant to your Letter of Offer dated (the “Offer Date”) and my
acceptance thereof, I hereby exercise the Option to acquire Shares in iFAST Corporation Ltd.
(the “Company”) at S$ per Share.
2. I hereby request the Company to allot and issue or transfer to me the number of Shares
specified in paragraph 1 in the name of The Central Depository (Pte) Limited (“CDP”) to the
credit of my Securities Account with the CDP/Securities Sub-Account with a Depository
Agent specified below and to deliver the share certificates relating thereto to CDP at my own
risk. I further agree to bear such fees or other charges as may be imposed by CDP (the “CDP
charges”) and any stamp duties in respect thereof:
*(a) Direct Securities Account Number :
*(b) Securities Sub-Account Number :
Name of Depository Agent :
APPENDIX G – RULES OF THE IFAST ESOS
G-22
3. I enclose a cheque/cashier’s order/bank draft/postal order no. for
S$ in payment for the Exercise Price of S$ for the
total number of the said Shares and the CDP charges of S$ .
4. I agree to acquire the Shares subject to the terms of the Letter of Offer, the iFAST ESOS (as
the same may be amended pursuant to the terms thereof from time to time) and the
Memorandum and Articles of Association of the Company.
5. I declare that I am acquiring the Shares for myself and not as a nominee for any other person.
APPENDIX G – RULES OF THE IFAST ESOS
G-23
PLEASE PRINT IN BLOCK LETTERS
Name in full :
Designation :
Address :
Nationality :
*NRIC/Passport No. :
Signature :
Date :
* Delete as appropriate
Notes:
(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.
(2) The form entitled “Exercise Notice” must be forwarded to the Company Secretary in an envelope marked “Private
and Confidential”.
APPENDIX G – RULES OF THE IFAST ESOS
G-24
RATIONALE FOR THE SHARE BUY-BACK MANDATE
Our Directors constantly seek to increase Shareholders’ value and to improve, inter alia, the return
on equity of the Group. The Share Buy-back Mandate would give us the flexibility to undertake buy
backs of our Shares at any time, subject to market conditions, during the period when the Share
Buy-back Mandate is in force. A Share Buy-back at the appropriate price level is one (1) of the
ways through which the return on equity of the Group may be enhanced. Further, amongst others,
a Share Buy-back provides us with a mechanism to facilitate the return of surplus cash over and
above its ordinary capital requirements in an expedient and cost-efficient manner. Our Directors
also expect that a Share Buy-back may also help mitigate against short term volatility of share
price, offset the effects of short term speculation and bolster Shareholders’ confidence. A Share
Buy-back will also allow our Directors greater control over our share capital structure, dividend
payout and cash reserves.
The buy back of Shares may, depending on market conditions and funding arrangements at the
time, lead to an enhancement of our EPS and/or NTA per Share and the Group, and will only be
made when our Directors believe that such buy back would benefit our Shareholders and us.
Shareholders should note that purchases or acquisitions of Shares pursuant to the Share
Buy-back Mandate via market purchases or off-market purchases will only be made when our
Directors believe that such purchases or acquisitions would be made in circumstances which
would not have a material adverse effect on our financial position.
MANDATE
Any purchase or acquisition of Shares by us would have to be made in accordance with and in the
manner prescribed by, the Companies Act and the rules of the Listing Manual and such other laws
and regulations as may, for the time being, be applicable.
It is also a requirement that a company which wishes to purchase or acquire its own shares should
obtain approval of its shareholders and to do so at a general meeting. As set out in the section
entitled “Share Capital” of this Prospectus, Shareholder approval has been obtained for the Share
Buy-back Mandate and for our purchase or acquisition of our issued Shares. The Share Buy-back
Mandate will take effect from the date of its approval and continue in force until the date of the next
AGM of the Company or such date as the next AGM is required by law or by the Articles to be held,
unless prior thereto, Share Buy-backs are carried out to the full extent mandated or we revoke or
vary the Share Buy-back Mandate in a general meeting.
TERMS OF THE SHARE BUY BACK MANDATE
The authority for and limitations placed on our purchases of Shares under the Share Buy-back
Mandate, are summarised below:
(a) Maximum Number of Shares
We may only purchase or acquire Shares which are issued and fully paid-up.
The total number of Shares that may be purchased or acquired is limited to that number of
Shares representing not more than 10% of our issued share capital (excluding treasury
shares), ascertained as at the date of the general meeting at which the Share Buy-back
Mandate is approved (the “Approval Date”), unless a reduction of our share capital has been
effected in accordance with the applicable provisions of the Companies Act, at any time
APPENDIX H – INFORMATION ON THE SHARE BUY BACK MANDATE
H-1
during the Relevant Period, in which event the total number of our Shares shall be taken to
be the total number of our Shares as altered. For purposes of calculating the percentage of
issued Shares above, any of the Shares which are held as treasury shares will be
disregarded.
Based on our existing issued and paid-up share capital of 204,425,334 Shares as at the
Approval Date, we may not purchase or acquire more than 20,442,533 Shares (representing
10% of the Shares in issue as at that date) pursuant to the proposed Share Buy-back
Mandate.
(b) Duration of Authority
Purchases or acquisitions of Shares may be made, at any time and from time to time, from
the Approval Date up to the earlier of:
(i) the date on which our next AGM is held or required by law or our Articles to be held;
(ii) the date on which the authority contained in the Share Buy-back Mandate is varied or
revoked by our Shareholders in a general meeting; or
(iii) the date on which the Share Buy-back is carried out to the full extent mandated.
The Share Buy-back Mandate may be renewed at each of our AGM or other general meeting.
(c) Manner of Purchase of Shares
Purchases or acquisitions of Shares may be made by way of, inter alia:
(i) on-market purchases (“Market Purchase”), transacted on the SGX-ST through the
ready market or, as the case may be, any other stock exchange on which our Shares
may for the time being be listed and quoted, through one (1) or more duly licensed
stockbrokers appointed by us for the purpose; and/or
(ii) off-market purchases (“Off-Market Purchase”) (if effected otherwise than on the
SGX-ST) in accordance with any equal access scheme(s) as may be determined or
formulated by our Directors as they may consider fit, which scheme(s) shall satisfy all
the conditions prescribed by the Companies Act and Listing Manual.
Our Directors may impose such terms and conditions, which are consistent with the Share
Buy-back Mandate, the Listing Manual and the Companies Act, as they consider fit in our
interests of the Company in connection with or in relation to an equal access scheme or
schemes. Under the Companies Act, an equal access scheme must satisfy all the following
conditions:
(i) offers for the purchase of issued Shares shall be made to every person who holds
issued Shares to purchase the same percentage of their issued Shares;
(ii) all of those persons shall be given a reasonable opportunity to accept the offers made;
and
APPENDIX H – INFORMATION ON THE SHARE BUY BACK MANDATE
H-2
(iii) the terms of the offers are the same, except that there shall be disregarded:
(A) differences in consideration attributable to the fact that offers may relate to Shares
with different accrued dividend entitlements;
(B) (if applicable) differences in consideration attributable to the fact that offers relate
to Shares with different amounts remaining unpaid; and
(C) differences in the offers introduced solely to ensure that each person is left with a
whole number of Shares.
In addition, the Listing Manual provides that, in making an Off-Market Purchase in
accordance with an equal access scheme, we must issue an offer document to all
Shareholders which must contain at least the following information:
(i) the terms and conditions of the offer;
(ii) the period and procedures for acceptances;
(iii) the reasons for the proposed Share Buy-back;
(iv) the consequences, if any, of our Share Buy-backs that will arise under the Take-over
Code or other applicable takeover rules;
(v) whether the Share Buy-back, if made, would have any effect on the listing of the Shares
on the SGX-ST;
(vi) details of any Share Buy-backs (whether Market Purchases or Off-Market Purchases in
accordance with an equal access scheme) we have made in the previous twelve (12)
months, giving the total number of Shares purchased, the purchase price per Share or
the highest and lowest prices paid for the purchases, where relevant, and the total
consideration paid for the purchases; and
(vii) whether the Shares purchased will be cancelled or kept as treasury shares.
(d) Maximum Purchase Price
The purchase price (excluding brokerage, stamp duties, applicable goods and services tax
and other related expenses) to be paid for the Shares will be determined by our Directors.
However, the purchase price to be paid for a Share as determined by our Directors must not
exceed:
(i) in the case of a Market Purchase, one hundred and five per cent. (105%) of the Average
Closing Price (as defined hereinafter); and
(ii) in the case of an Off-Market Purchase pursuant to an equal access scheme, one
hundred and twenty per cent. (120%) of the Average Closing Price (as defined
hereinafter),
(the “Maximum Price”) in either case, excluding related expenses of the purchase.
APPENDIX H – INFORMATION ON THE SHARE BUY BACK MANDATE
H-3
For the above purposes:
“Average Closing Price” means the average of the closing market prices of the Shares over
the last five (5) Market Days on the SGX-ST, on which transactions in the Shares were
recorded, immediately preceding the day of the Market Purchase or, as the case may be, the
day of the making of the offer pursuant to the Off-Market Purchase, and deemed to be
adjusted for any corporate action that occurs after such five-Market Day period;
“day of the making of the offer” means the day on which we announce our intention to make
an offer for the purchase of Shares from Shareholders, stating the purchase price (which
shall not be more than the Maximum Price calculated on the foregoing basis) for each Share
and the relevant terms of the equal access scheme for effecting the Off-Market Purchase.
STATUS OF PURCHASED SHARES UNDER THE SHARE BUY-BACK MANDATE
A Share purchased or acquired by us is deemed cancelled immediately on purchase or acquisition
(and all rights and privileges attached to the Share will expire on such cancellation) unless such
Share is held by us as a treasury share in accordance with the Companies Act. Accordingly, the
total number of issued Shares will be diminished by the number of Shares purchased or acquired
by us and which are not held as treasury shares.
TREASURY SHARES
Under the Companies Act, Shares purchased or acquired by us may be held or dealt with as
treasury shares. Some of the provisions on treasury shares under the Companies Act are
summarised below:
(a) Maximum Holdings
The number of Shares held as treasury shares cannot at any time exceed 10% of the total
number of issued Shares.
(b) Voting and Other Rights
We cannot exercise any right in respect of treasury shares. In particular, we cannot exercise
any right to attend or vote at meetings and for the purposes of the Companies Act, we shall
be treated as having no right to vote and the treasury shares shall be treated as having no
voting rights.
In addition, no dividend may be paid, and no other distribution of our assets may be made,
to us in respect of treasury shares. However, the allotment of shares as fully paid bonus
shares in respect of treasury shares is allowed. Also, a subdivision or consolidation of any
treasury share into treasury shares of a smaller amount is allowed so long as the total value
of the treasury shares after the subdivision or consolidation is the same as before.
APPENDIX H – INFORMATION ON THE SHARE BUY BACK MANDATE
H-4
(c) Disposal and Cancellation
Where Shares are held as treasury shares, we may at any time:
(i) sell the treasury shares for cash;
(ii) transfer the treasury shares for the purposes of or pursuant to an employees’ share
scheme;
(iii) transfer the treasury shares as consideration for the acquisition of shares in or assets
of another company or assets of a person;
(iv) cancel the treasury shares; or
(v) sell, transfer or otherwise use the treasury shares for such other purposes as may be
prescribed by the Minister for Finance.
SOURCE OF FUNDS FOR SHARE BUY BACK
In buying back Shares, we may only apply funds legally available for such purchase in accordance
with our Articles, and the applicable laws in Singapore. We may not buy Shares on the Official List
of the SGX-ST for a consideration other than cash or for settlement otherwise than in accordance
with the trading rules of the SGX-ST. Our buy back of Shares may be made out of our profits or
capital so long as we are solvent.
When Shares are purchased or acquired, and cancelled:
(a) if the Shares are purchased or acquired entirely out of our capital, we shall reduce the
amount of our share capital by the total amount of the purchase price we paid for the Shares
(excluding brokerage, stamp duties, applicable goods and services tax, clearance fees and
other related expenses) (the “Purchase Price”);
(b) if the Shares are purchased or acquired entirely out of our profits, we shall reduce the
amount of our profits available for the distribution of cash dividends by the total amount of
the Purchase Price; or
(c) where the Shares are purchased or acquired out of both our capital and profits, we shall
reduce the amount of its share capital and profits available for the distribution of cash
dividends proportionately by the total amount of the Purchase Price.
We may use internal resources and/or external borrowings to fund purchases of Shares pursuant
to the Share Buy-back Mandate.
Our Directors do not propose to exercise the Share Buy-back Mandate in a manner and to such
extent that the liquidity and capital adequacy position of the Group would be materially adversely
affected.
APPENDIX H – INFORMATION ON THE SHARE BUY BACK MANDATE
H-5
FINANCIAL EFFECTS OF THE SHARE BUY BACK MANDATE
Shareholders should note that the financial effects illustrated below are for illustration purposes
only. In particular, it is important to note that the financial analysis set out below are based on the
audited consolidated financial statements for FY2013 and are not necessarily representative of
future financial performance of the Group. Although the proposed Share Buy-back Mandate would
authorise the Company to buy back up to 10% of the Company’s issued Shares, the Company may
not necessarily buy back or be able to buy back 10% of the issued Shares in full.
It is not possible for the Company to realistically calculate or quantify the impact of purchases that
may be made pursuant to the Share Buy-back Mandate on the financial effects as it would depend
on factors such as the aggregate number of Shares purchased or acquired, the purchase prices
paid at the relevant time, the amount (if any) borrowed by the Company to fund the purchases,
whether the purchase or acquisition is made out of profits or capital, and whether the Shares
purchased are held in treasury or cancelled. The purchase price paid by the Company for the
Shares (excluding brokerage, stamp duties, applicable goods and services tax and other related
expenses) will correspondingly reduce the amount available for the distribution of cash dividends
by the Company. The Directors do not propose to exercise the Share Buy-back Mandate to such
an extent that it would have a material adverse effect on the working capital requirements of the
Group. The purchase of the Shares will only be effected after considering relevant factors such as
the working capital requirement, availability of financial resources, the expansion and investment
plans of the Group, and the prevailing market conditions. The proposed Share Buy-back Mandate
will be exercised with a view to enhance the EPS and/or NTA per Share of the Group. The financial
effects presented in this section of the Appendix are based on the assumptions set out below:
(a) Information as at the Approval Date
As at the Approval Date, our issued share capital comprised 204,425,334 Shares. There are
no treasury shares and no Shares are reserved for issue by us as at the Approval Date.
(b) Illustrative Financial Effects
Purely for illustrative purposes, on the basis of 204,425,334 Shares in issue as at the
Approval Date and no Shares are held by us as treasury shares on or prior to the general
meeting approving the Share Buy-back Mandate, our purchase of 10% of our issued Shares
will result in the purchase of 20,442,533 Shares.
In the case of Market Purchases by us and assuming that we purchase or acquire 20,442,533
Shares at the Maximum Price of S$1.00 for each Share (being the price equivalent to 105%
of the Offering Price), the maximum amount of funds required for the purchase or acquisition
of 20,442,533 Shares is S$20,442,533.00.
In the case of Off-Market Purchases by us and assuming that we purchase or acquire
20,442,533 Shares at the Maximum Price of S$1.14 for each Share (being the price
equivalent to 120% of the Offering Price), the maximum amount of funds required for the
purchase or acquisition of 20,442,533 Shares is S$23,304,487.62.
APPENDIX H – INFORMATION ON THE SHARE BUY BACK MANDATE
H-6
For illustrative purposes only and on the basis of the assumptions set out above as well as
the following:
(i) the Share Buy-back Mandate had been effective on 1 January 2013; and
(ii) such Share purchases are funded solely by internal resources,
the financial effects on the audited consolidated financial results of the Group for FY2013,
are set out below:
Market Purchase Off-Market Purchase
Before
Share
Purchase
After
Share
Purchase
Before
Share
Purchase
After
Share
Purchase
S$’000 S$’000 S$’000 S$’000
Profit attributable to owners of
the Company continuing
operations 8,474 8,474 8,474 8,474
As at 31 December 2013
Share capital 10,670 10,670 10,670 10,670
Retained earnings 14,820 14,820 14,820 14,820
Share option reserve 559 559 559 559
Equity reserve (1,369) (1,369) (1,369) (1,369)
Fair value reserve 35 35 35 35
Translation reserve (749) (749) (749) (749)
Treasury shares – (20,443) – (23,304)
Shareholders’ equity 23,966 3,523 23,966 662
Total equity 24,624 4,181 24,624 1,320
Net assets value (NAV) 24,624 4,181 24,624 1,320
Other investments 2,011 – 2,011 –
Current assets 34,102 15,670 34,102 12,809
Current liabilities 13,403 13,403 13,403 13,403
Working capital 20,699 2,267 20,699 (594)
Total borrowings – – – –
Cash and cash equivalents 16,719 – 16,719 –
Net cash (16,719) – (16,719) –
Number of Shares as at 31
December 2013 (after sub-
division of shares) (’000) 202,776 182,333 202,776 182,333
Weighted average number of
Shares as at 31 December 2013
(after sub-division of shares)
(’000) 202,051 181,608 202,051 181,608
APPENDIX H – INFORMATION ON THE SHARE BUY BACK MANDATE
H-7
Market Purchase Off-Market Purchase
Before
Share
Purchase
After
Share
Purchase
Before
Share
Purchase
After
Share
Purchase
S$’000 S$’000 S$’000 S$’000
Profit attributable to owners of
the Company continuing
operations 8,474 8,474 8,474 8,474
Financial Ratios
NAV per Share (cents)
(1)
12.14 2.29 12.14 0.72
Gearing Ratio (times)
(2)
0.00 0.00 0.00 0.00
Current Ratio (times)
(3)
2.54 1.17 2.54 0.96
Basic EPS (cents)
(4)
4.20 4.67 4.20 4.67
Notes:
(1) Total Equity divided by the number of shares as at 31 December 2013.
(2) Total borrowings divided by total equity.
(3) Current assets divided by current liabilities.
(4) Profit attributable to owners of the Company divided by the weighted average number of Shares as at 31
December 2013.
The financial effects set out above are for illustrative purposes only. Although the Share
Buy-back Mandate would authorise the Company to purchase up to 10% of the issued
Shares, the Company may not necessarily purchase or be able to purchase the entire 10%
of the issued Shares. In addition, the Company may cancel all or part of the Shares
repurchased or hold all or part of the Shares repurchased in treasury.
TAX IMPLICATIONS
Shareholders who are in doubt as to their respective tax positions or the tax implications of a
share buy-back by us or who may be subject to tax, whether in or outside Singapore, should
consult their own professional advisers.
LISTING MANUAL
The Listing Manual requires a listed company to ensure that at least 10% of any class of its listed
securities must be held by public shareholders. As at the Latest Practicable Date, approximately
31.64% of our issued share capital are held in the hands of the public. “Public” means persons
other than Directors, chief executive officer, Substantial Shareholders or Controlling Shareholders
of our Company and its subsidiaries, as well as the associates of such persons. Assuming that we
repurchased the maximum of 10% of our issued share capital as at the Latest Practicable Date
from members of the public by way of a Market Purchase, the percentage of Shares held by the
public would be approximately 24.04%. Accordingly, the Company is of the view that there is a
sufficient number of the Shares in issue held by public shareholders which would permit the
Company to undertake purchases or acquisitions of its Shares through Market Purchases up to
the full ten per cent. (10%) limit pursuant to the Share Buy-back Mandate without affecting the
listing status of the Shares on the SGX-ST, and that the number of Shares remaining in the hands
of the public will not fall to such a level as to cause market illiquidity or to affect orderly trading.
APPENDIX H – INFORMATION ON THE SHARE BUY BACK MANDATE
H-8
Our Directors will use their best efforts to ensure that we do not effect buy back of Shares if the
buy back of Shares would result in the number of Shares remaining in the hands of the public
falling to such a level as to cause market illiquidity, adversely affect the orderly trading of our
Shares or adversely affect our listing status.
Under the Listing Manual, a listed company may only purchase shares by way of a market
acquisition at a price which is not more than 5% above the average closing market price. The term
average closing market price is defined as the average of the closing market prices of shares over
the last 5 market days, on which transactions in the shares were recorded, before the day on
which purchases are made. The Maximum Price for a Share in relation to Market Purchases by
us, referred to in paragraph (d) of the section entitled “The Terms of the Share Buy-back Mandate”
of this Appendix, conforms to this restriction.
Additionally, the Listing Manual also specifies that a listed company shall report all purchases or
acquisitions of its shares to the SGX-ST not later than 9.00 a.m.:
(a) in the case of a Market Purchase, on the Market Day following the day of purchase of any
of its shares; and
(b) in the case of an Off-Market Purchase under an equal access scheme, on the second Market
Day after the close of acceptances of the offer.
While the Listing Manual does not expressly prohibit any purchase of shares by a listed company
during any particular time, because the listed company would be regarded as an “insider” in
relation to any proposed purchase or acquisition of its issued shares, we will not undertake any
purchase or acquisition of Shares pursuant to the Share Buy-back Mandate at any time after any
matter or development of a price-sensitive nature has occurred or has been the subject of
consideration and/or a decision of the Board until such price-sensitive information has been
publicly announced. Further, in conformity with the best practices on dealing with securities under
the Listing Manual, we will not purchase or acquire any Shares through Market Purchases during
the period commencing two (2) weeks before the announcement of our financial statements for
each of the first three-quarters of our FY, or one (1) month immediately preceding our annual
(full-year) results announcement respectively.
TAKE-OVER OBLIGATIONS
Appendix 2 of the Take-over Code contains the Share Buy-Back Guidance Note applicable as at
the Latest Practicable Date. The take-over implications arising from any purchase or acquisition
by us of our Shares are set out below:
(a) Obligation to Make a Take-over Offer
Pursuant to the Take-over Code, an increase of a shareholder’s proportionate interest in our
voting rights resulting from a share buy back by us will be treated as an acquisition for the
purposes of Rule 14 of the Take-over Code (“Rule 14”).
Under Rule 14, a Shareholder and persons acting in concert with the Shareholder will incur
an obligation to make a mandatory take-over offer if, inter alia, he and persons acting in
concert with him increase their voting rights in the Company to 30% or more or, if they,
together holding between 30% and 50% of the Company’s voting rights, increase their voting
rights in the Company by more than 1% in any period of 6 months.
APPENDIX H – INFORMATION ON THE SHARE BUY BACK MANDATE
H-9
(b) Persons Acting in Concert
Under the Take-over Code, persons acting in concert comprise individuals or companies
who, pursuant to an agreement or understanding (whether formal or informal), cooperate,
through the acquisition by any of them of shares in a company, to obtain or consolidate
effective control of that company.
Unless the contrary is established, the following persons will, inter alia, be presumed to be
acting in concert:
(i) 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);
(ii) A company with its parent company, subsidiaries, its fellow subsidiaries, any associated
companies of the above companies, and any company whose associated companies
include any of the above companies. For this purpose, a company is an associated
company of another company if the second company owns or controls at least 20% but
not more than 50% of the voting rights of the first-mentioned company;
(iii) A company with any of its pension funds and employee share schemes;
(iv) A person with any investment company, unit trust or other fund in respect of the
investment account which such person manages on a discretionary basis;
(v) A financial or other professional adviser, with its clients in respect of the shareholdings
of the adviser and the persons controlling, controlled by or under the same control as
the adviser and all the funds which the adviser manages on a discretionary basis, where
the shareholding of the adviser and any of those funds in the client total 10% or more
of the client’s equity share capital;
(vi) Directors of a company, together with their close relatives, related trusts and companies
controlled by any of them, which is subject to an offer where they have reason to believe
a bona fide offer for their company may be imminent;
(vii) Partners; and
(viii) An individual, his close relatives, his related trusts, and any person who is accustomed
to act according to the instructions and companies controlled by any of the above.
The circumstances under which our Shareholders (including our Directors) and persons
acting in concert with them respectively will incur an obligation to make a take-over offer
under Rule 14 after a purchase or acquisition of our Shares by us are set out in Appendix 2
of the Take-over Code.
(c) Effect of Rule 14 and Appendix 2 of the Take-over Code
In general terms, the effect of Rule 14 and Appendix 2 is that, unless exempted, directors of
a company and persons acting in concert with them will incur an obligation to make a
take-over offer for the company under Rule 14 if, as a result of the company purchasing or
acquiring its shares, the voting rights of such directors and their concert parties would
APPENDIX H – INFORMATION ON THE SHARE BUY BACK MANDATE
H-10
increase to 30% or more, or if the voting rights of such directors and their concert parties fall
between 30% and 50% of the company’s voting rights, the voting rights of such directors and
their concert parties would increase by more than 1% in any period of six (6) months.
Under Appendix 2, a shareholder not acting in concert with the directors of the company will
not be required to make a take-over offer under Rule 14 if, as a result of the company
purchasing or acquiring its shares, the voting rights of such shareholder of the company
would increase to 30% or more, or, if such shareholder holds between 30% and 50% of the
company’s voting rights, the voting rights of such shareholder would increase by more than
1% in any period of six (6) months. Such shareholder need not abstain from voting in respect
of the resolution authorising the Share Purchase Mandate unless so required under the
Companies Act.
Save as disclosed above, our Directors have confirmed that they are not aware of any facts
or factors which suggest or imply that any particular person(s) and/or Shareholders are, or
may be regarded as parties acting in concert such that their respective interests in voting
shares in our capital should or ought to be consolidated, and consequences under the
Take-over Code would ensue as a result of a Share Buy-back.
The statements in this Appendix do not purport to be a comprehensive or exhaustive
description of all implications that may arise under the Take-over Code. Shareholders
are advised to consult their professional advisers and/or the Securities Industry
Council and/or other relevant authorities at the earliest opportunity as to whether an
obligation to make a take-over offer would arise by reason of any share purchases or
acquisitions by the Company.
SHARES PURCHASED BY THE COMPANY
We have not made any purchase of Shares in the 12 months preceding the Latest Practicable
Date.
REPORTING REQUIREMENTS UNDER THE COMPANIES ACT
Within 30 days of the passing of a Shareholders’ resolution to approve our purchase of Shares,
we shall lodge a copy of such resolution with ACRA. Within 30 days of a purchase of Shares on
the Official List of SGX-ST or otherwise, we shall lodge with ACRA the notice of the purchase in
the prescribed form, such notification including inter alia, details of the purchase, the total number
of Shares purchased by us, the total number of Shares cancelled, the number of Shares held as
treasury shares, our issued ordinary share capital before the purchase and after the purchase of
Shares, the amount of consideration we paid for the purchase, and whether the Shares were
purchased out of our profits or capital.
APPENDIX H – INFORMATION ON THE SHARE BUY BACK MANDATE
H-11
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TAXATION
The following discussions regarding taxation are general in nature and based on the current tax
legislation of Singapore and administrative guidelines issued by the relevant authorities in force
as at the date of this Prospectus 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, where
such 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 discussions below are not to be regarded as
legal or tax advice. The discussion is limited to a general description of certain tax consequences
in Singapore with respect to the subscription for, acquisition, holding and disposal of our Shares
by investors, and does not purport to be a comprehensive nor exhaustive description of all of the
tax considerations that may be relevant to the subscription for, acquisition, holding and disposal
of our Shares. Prospective investors should consult their tax advisors regarding Singapore tax
and other tax consequences of subscribing for, acquiring, holding and disposing our Shares. It is
emphasised that neither our Company, our Directors nor any other persons involved in the
Offering accepts responsibility for any tax effects or liabilities resulting from the subscription for,
acquisition, holding or disposal of our Shares.
SINGAPORE INCOME TAX
General
Singapore tax residents are subject to Singapore income tax on income that is accrued in or
derived from Singapore and on foreign income received in Singapore, subject to certain
exceptions.
Non-resident corporate taxpayers are subject to income tax on income that is accrued in or
derived from Singapore, and on foreign income received in Singapore, subject to certain
exceptions. All individual resident and non-resident, subject to certain exceptions, are subject to
income tax on the income accrued in or derived from Singapore. All foreign-source income
received in Singapore by all individuals will be exempt from Singapore tax. The latter exemption
will not apply to such income received from a partnership in Singapore.
A company is tax resident in Singapore if the control and management of its business is exercised
in Singapore. An individual is tax resident in Singapore in a year of assessment if, in the preceding
year, he was physically present in Singapore or exercised an employment in Singapore (other
than as a director of a company) for 183 days or more, or if he resides in Singapore.
With effect from year of assessment 2010 (i.e. financial year ending 2009), the corporate tax rate
is 17%. In addition, 75% of the first S$10,000 and 50% of the next S$290,000 of the company’s
income chargeable to tax at the prevailing corporate tax rate will be exempt from corporate income
tax. In addition, companies will receive a 30% corporate tax rebate for the years of assessment
2013, 2014 and 2015, subject to a cap of S$30,000 per year of assessment.
For a Singapore tax resident individual, the rate of tax varies according to the individual’s
circumstances but is subject to a current maximum rate of 20%.
APPENDIX I – TAXATION
I-1
Dividend Distributions
Singapore operates a one-tier corporate tax system under which the tax on corporate profits is a
final tax and all dividends paid by Singapore tax resident companies to their shareholders are
exempt from further Singapore tax (referred hereinafter as “one-tier tax exempt dividends”).
Furthermore, there is no dividend withholding tax in Singapore.
Gains on Disposal of our Shares
Singapore does not impose tax on capital gains. However, there are no specific laws or
regulations which deal with the characterisation of capital gains. Accordingly, gains arising from
the disposal of our Shares may be construed to be of an income nature (and hence subject to
corporate income tax) to the extent that the gains arise from activities which the IRAS regards as
the carrying on of a trade in Singapore.
In addition, shareholders who apply, or who are required to apply, the Singapore Financial
Reporting Standard 39 – Financial Instruments: Recognition and Measurement (“FRS 39”) for the
purposes of Singapore income tax may be required to recognise gains or losses (not being gains
or losses in the nature of capital) in accordance with the provisions of FRS 39 (as modified by the
applicable provisions of Singapore income tax law) even though no sale or disposal of our Shares
is made. Shareholders who may be subject to this tax treatment should consult their accounting
and tax advisers regarding the Singapore income tax consequences of their subscription for,
acquisition, holding and disposal of our Shares.
Stamp Duty
There is no stamp duty payable on the subscription of our Shares.
Stamp duty is payable on the instrument of transfer of our Shares at the rate of S$2.00 for every
S$1,000 of the consideration for, or the market value of, our Shares whichever is higher.
The purchaser is liable for stamp duty, unless there is an agreement to the contrary. No stamp duty
is payable if no instrument of transfer is executed or the instrument of transfer is executed outside
Singapore. However, stamp duty will generally be payable if the instrument of transfer which is
executed outside Singapore is received in Singapore.
The abovementioned stamp duty is not applicable to electronic transfers of our shares through the
CDP.
Goods and Services Tax (“GST”)
The sale of our Shares by a GST-registered investor belonging in Singapore to another person
belonging in Singapore is an exempt supply not subject to GST. In this regard, the GST incurred
by the GST-registered investor in making such supplies will generally not be recoverable to the
GST-registered person.
Where our Shares are sold 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 will be considered a
taxable supply subject to GST at zero-rate (i.e. 0%). Subject to the provision of the GST Act, any
GST incurred by the GST-registered investor in the making of such taxable supply in the course
of or furtherance of a business, may be recoverable from the Comptroller of GST.
APPENDIX I – TAXATION
I-2
Services such as brokerage, handling and clearing services, 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 in connection with the investor’s subscription for, acquisition, sale or
disposal of our Shares will be subject to GST at the prevailing standard rate of 7%. Similar
services rendered to an investor belonging outside Singapore, and who is outside Singapore when
the services are supplied, will be subject to GST at zero-rate.
APPENDIX I – TAXATION
I-3
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Applications are invited for the subscription of the New Shares at the offering price of S$0.95 per
New Share (the “Offering Price”) on the terms and conditions set out below and in the printed
application forms to be used for the purpose of the Offering and which forms part of the
Prospectus (the “Application Forms”) or, as the case may be, the Electronic Applications (as
defined below).
Investors applying for the New Shares in the Offering by way of Application Forms or Electronic
Applications are required to pay, in Singapore dollars, the Offering Price of S$0.95 per New Share,
subject to a refund of the full amount or, as the case may be, the balance of the application monies
(in each case without interest or any share of revenue or other benefit arising therefrom and
without any right or claim against us and the Joint Issue Managers, Bookrunners and
Underwriters) where (i) an application is rejected or accepted in part only, or (ii) if the Offering
does not proceed for any reason.
(1) Your application must be made in lots of 1,000 New Shares or integral multiples
thereof. Your application for any other number of New Shares will be rejected.
(2) You may apply for the New Shares only during the period commencing at 7.00 p.m. on 4
December 2014 and expiring at 12.00 p.m. on 9 December 2014. The Offering period may
be extended or shortened to such date and/or time as our Company may, in consultation with
the Joint Issue Managers, Bookrunners and Underwriters, decide, subject to all applicable
laws and regulations and the rules of the SGX-ST.
(3) (a) Your application for the New Shares offered in the Public Offer (the “Public Offer
Shares”) may be made by way of the printed WHITE Public Offer Shares Application
Forms or by way of Automated Teller Machines (“ATM”) belonging to the Participating
Banks (“ATM Electronic Applications”) or the Internet Banking (“IB”) website of the
relevant Participating Banks (“Internet Electronic Applications”), or DBS Bank’s
mobile banking interface of DBS Bank (“mBanking Applications” which, together with
ATM Electronic Applications and Internet Electronic Applications, shall be referred to as
“Electronic Applications”).
(b) Your application for the New Shares offered in the Placement (the “Placement Shares”)
may be made by way of the printed BLUE Placement Shares Application Forms (or in
such other manner as the Joint Issue Managers, Bookrunners and Underwriters may in
its absolute discretion deem appropriate).
(4) UNLESS PERMISSIBLE IN SUCH OTHER JURISDICTION, YOU MUST BE IN
SINGAPORE AT THE TIME OF MAKING THE APPLICATION FOR THE INVITATION
SHARES. YOU MAY NOT USE YOUR CENTRAL PROVIDENT FUND OR CPF INVESTIBLE
SAVINGS TO APPLY FOR THE INVITATION SHARES.
(5) Only one application may be made for the benefit of one person for the Public Offer
Shares in his own name. Multiple applications for the Public Offer Shares will be
rejected, except in the case of applications by approved nominee companies where
each application is made on behalf of a different beneficiary.
You may not submit multiple applications for the Public Offer Shares via the Public
Offer Shares Application Form, or Electronic Applications. A person who is submitting
an application for the Public Offer Shares by way of the Public Offer Shares
Application Form may not submit another application for the Public Offer Shares by
way of Electronic Applications and vice versa.
APPENDIX J – TERMS, CONDITIONS AND PROCEDURES FOR APPLICATION
AND ACCEPTANCE OF THE NEW SHARES IN SINGAPORE
J-1
A person, other than an approved nominee company, who is submitting an application
for the Public Offer Shares in his own name should not submit any other applications
for the Public Offer Shares, whether on a printed Public Offer Shares Application Form
or by way of an Electronic Application, for any other person. Such separate
applications will be deemed to be multiple applications and shall be rejected.
Joint or multiple applications for the Public Offer Shares shall be rejected. Persons
submitting or procuring submissions of multiple applications for the Public Offer
Shares may be deemed to have committed an offence under the Penal Code, Chapter
224 of Singapore and the Securities and Futures Act, and such applications may be
referred to the relevant authorities for investigation. Multiple applications or those
appearing to be or suspected of being multiple applications (other than as provided
herein) will be liable to be rejected at our discretion.
(6) Multiple applications may be made in the case of applications by any person for (i) the
Placement Shares only (via Placement Shares Application Forms or such other form of
application as the Joint Issue Managers, Bookrunners and Underwriters may in their
absolute discretion deem appropriate) or (ii) the Placement Shares together with a
single application for the Public Offer Shares.
(7) Applications from any person under the age of 18 years, undischarged bankrupts, sole
proprietorships, partnerships, chops or non-corporate bodies, joint Securities Account
holders of CDP will be rejected.
(8) Applications from any person whose addresses (furnished in their printed Application Forms
or, in the case of Electronic Applications, contained in the records of the relevant
Participating Bank, as the case may be) bear post office box numbers will be rejected. 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 deceased’s name at the time of the application.
(9) The existence of a trust will not be recognised. Any application by a trustee or trustees must
be made in his/her or their own name(s) and without qualification or, where the application
is made by way of a printed Application Form by a nominee, in the name(s) of an approved
nominee company or approved nominee companies after complying with paragraph 10
below.
(10) Nominee applications may only be made by approved nominee companies. 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 nominees other than approved nominee companies will be
rejected.
(11) 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 application, your application will
be rejected (if you apply by way of an Application Form) or you will not be able to complete
your 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 your Application Form or in your Electronic
Application, as the case may be, your application is liable to be rejected.
APPENDIX J – TERMS, CONDITIONS AND PROCEDURES FOR APPLICATION
AND ACCEPTANCE OF THE NEW SHARES IN SINGAPORE
J-2
(12) Subject to paragraphs 15 and 16 below, your application is liable to be rejected if your
particulars such as name, National Registration Identity Card (“NRIC”) number or passport
number or company registration number, nationality and permanent residence status, and
Securities Account number provided in your Application Form, or in the case of an Electronic
Application, contained in the 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 by CDP. If you have more than one individual direct Securities
Account with CDP, your application shall be rejected.
(13) 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
allocation from CDP will be sent to your address last registered with CDP.
(14) This Prospectus and its accompanying documents (including the Application Forms) have
not been registered in any jurisdiction other than in Singapore. The distribution of this
Prospectus and its accompanying documents (including the Application Forms) may be
prohibited or restricted (either absolutely or unless various securities requirements, whether
legal or administrative, are complied with) in certain jurisdictions under the relevant
securities laws of those jurisdictions.
Without limiting the generality of the foregoing, neither this Prospectus and its accompanying
documents (including the Application Forms) nor any copy thereof may be taken, transmitted,
published or distributed, whether directly or indirectly, in whole or in part in or into the United
States or any other jurisdiction (other than Singapore) and they do not constitute an offer to
sell or a solicitation of an offer to buy any securities in any jurisdiction where it is unlawful
to do so. The New Shares have not been, and will not be, registered under the US Securities
Act or the securities laws of any state of the United States and may not be offered or sold
within the United States (as defined in Regulation S). The New Shares are being offered and
sold outside the United States (including to institutional and other investors in Singapore) in
offshore transactions as defined in, and in reliance on, Regulation S. There will be no public
offer of New Shares in the United States. Any failure to comply with this restriction may
constitute a violation of securities laws of applicable jurisdictions.
Our Company reserves the right to reject any application for New Shares where our
Company believes or has reason to believe that such applications may violate the
securities laws or any applicable legal or regulatory requirements of any jurisdiction.
No person in any jurisdiction outside Singapore receiving this Prospectus or its
accompanying documents (including the Application Forms) may treat the same as an offer
or invitation to subscribe for any New Shares unless such an offer or invitation could lawfully
be made without compliance with any regulatory or legal requirements in those jurisdictions.
(15) Our Company reserves the right to reject any application which does not conform strictly to
the instructions or with the terms and conditions set out in this Prospectus (including the
instructions set out in the accompanying Application Forms, in the ATMs and IB websites of
the relevant Participating Banks and the mobile banking interface (“mBanking Interface”) of
DBS Bank) or, in the case of an application by way of an Application Form, the contents of
which is illegible, incomplete, incorrectly completed or which is accompanied by an
improperly drawn up or improper form of remittance.
APPENDIX J – TERMS, CONDITIONS AND PROCEDURES FOR APPLICATION
AND ACCEPTANCE OF THE NEW SHARES IN SINGAPORE
J-3
Without prejudice to the rights of the Company, the Joint Issue Managers, Bookrunners and
Underwriters, as agents of the Company, have been authorised to accept, for and on behalf
of the Company, such other forms of application as the Joint Issue Managers, Bookrunners
and Underwriters deem appropriate.
(16) Our Company further reserves the right to treat as valid any applications not completed or
submitted or effected in all respects in accordance with the instructions and terms and
conditions set out in this Prospectus (including the instructions set out in the accompanying
Application Forms and in the ATMs and IB websites of the relevant Participating Banks and
the mBanking Interface of DBS Bank), 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.
(17) Our Company reserves 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 none of our Company
and/or the Joint Issue Managers, Bookrunners and Underwriters will entertain any enquiry
and/or correspondence on the decision of our Company. This right applies to applications
made by way of Application Forms and by way of Electronic Applications and by such other
forms of application as the Joint Issue Managers, Bookrunners and Underwriters may, in
consultation with our Company, deem appropriate. In deciding the basis of allocation, our
Company, in consultation with Joint Issue Managers, Bookrunners and Underwriters, will
give due consideration to the desirability of allocating the New Shares to a reasonable
number of applicants with a view to establishing an adequate market for the New Shares.
(18) In the event that our Company lodges a supplementary or replacement prospectus
(“Relevant Document”) pursuant to the Securities and Futures Act or any applicable
legislation in force from time to time prior to the close of the Offering, and the New Shares
have not been issued, our Company will (as required by law) 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; or
(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 refund your application monies
(without interest or any share of revenue or other benefit arising therefrom) to you within
seven (7) days from the lodgement of the Relevant Document.
Any applicant who wishes to exercise his option under paragraphs 18(a) and (b) above to
withdraw his application shall, within 14 days from the date of lodgement of the Relevant
Document, notify our Company whereupon our Company shall, within seven (7) days from
the receipt of such notification, return all monies in respect of such application (without
interest or any share of revenue or other benefit arising therefrom).
APPENDIX J – TERMS, CONDITIONS AND PROCEDURES FOR APPLICATION
AND ACCEPTANCE OF THE NEW SHARES IN SINGAPORE
J-4
In the event that the New Shares have already been issued at the time of the lodgement of
the Relevant Document but trading has not commenced, our Company will (as required by
law) either:
(i) 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 return to our
Company the New 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; or
(ii) 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 New Shares
which you do not wish to retain title in; or
(iii) deem your application as withdrawn and cancelled and refund your payment for the
New Shares (without interest or any share of revenue or other benefit arising therefrom)
within seven (7) days from the lodgement of the Relevant Document.
Any applicant who wishes to exercise his option under paragraphs 18(i) and (ii) above to
return the New Shares issued to him shall, within 14 days from the date of lodgement of the
Relevant Document, notify our Company of this and return all documents, if any, purporting
to be evidence of title of those New Shares, whereupon our Company shall, within seven (7)
days from the receipt of such notification and documents, pay to him all monies paid by him
for the New Shares without interest or any share of revenue or other benefit arising therefrom
and at his own risk, and the New Shares issued to him shall be deemed to 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, may be found in such
Relevant Document.
(19) The New Shares may be reallocated between the Placement and the Public Offer for any
reason, including in the event of excess applications in one and a deficit of applications in the
other at the discretion of the Joint Issue Managers, Bookrunners and Underwriters, in
consultation with our Company, subject to any applicable laws.
(20) Subject to your provision of a valid and correct Securities Account number, share certificates
in respect of the New Shares will be registered in the name of CDP or its nominee and will
be forwarded only to CDP, at your own risk. If your application is successful, it is expected
that CDP will send to you, at your own risk, within 15 Market Days after the close of the
Offering, a statement of account stating that your Securities Account has been credited with
the number of New Shares allocated to you. This will be the only acknowledgement of
application monies received and is not an acknowledgement by our Company. 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 or transfer of the
New Shares allocated to you. This authorisation applies to applications made both by way of
Application Forms and by way of Electronic Applications.
(21) You irrevocably authorise CDP to disclose the outcome of your application, including the
number of New Shares allocated to you pursuant to your application, to our Company, the
Joint Issue Managers, Bookrunners and Underwriters and any other parties so authorised by
CDP, our Company and/or the Joint Issue Managers, Bookrunners and Underwriters.
APPENDIX J – TERMS, CONDITIONS AND PROCEDURES FOR APPLICATION
AND ACCEPTANCE OF THE NEW SHARES IN SINGAPORE
J-5
(22) Any reference to “you” or the “Applicant” in this section shall include an individual, a
corporation, an approved nominee company and trustee applying for the New Shares by way
of an Application Form or by way of Electronic Application or by such other manner as the
Joint Issue Managers, Bookrunners and Underwriters may, in its absolute discretion, deem
appropriate.
(23) By completing and delivering an Application Form and, in the case of: (i) an ATM Electronic
Application, by pressing the “Enter” or “OK” or “Confirm” or “Yes” key or any other relevant
key on the ATM, or (ii) in the case of an Internet Electronic Application or mBanking
Application, by clicking “Submit” or “Continue” or “Yes” or “Confirm” or any other button on
the IB website screen of the relevant Participating Bank or the mBanking Interface of DBS
Bank in accordance with the provisions herein, you:
(a) irrevocably agree and undertake to subscribe for the number of New Shares specified
in your application (or such smaller number for which the application is accepted) at the
Offering Price for each New Share and agree that you will accept such number of New
Shares as may be allocated to you, in each case on the terms of, and subject to the
conditions set out in, the Prospectus and its accompanying documents (including the
Application Forms) 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 Prospectus and its accompanying documents (including the
Application Forms) and those set out in the IB websites, ATMs of the Participating
Banks or the mBanking Interface of DBS Bank, the terms and conditions set out in the
Prospectus and its accompanying documents (including the Application Forms) shall
prevail;
(c) in the case of an application by way of a Public Offer Shares Application Form or an
Electronic Application, agree that the aggregate Offering Price for the Public Offer
Shares applied for is due and payable to our Company upon application;
(d) in the case of an application by way of a Placement Shares Application Form or such
other forms of application as the Joint Issue Managers, Bookrunners and Underwriters
may in its absolute discretion deem appropriate, agree that the aggregate Offering Price
for the Placement Shares applied for is due and payable to our Company upon
application;
(e) (i) consent to the collection, use, processing and disclosure of your name,
NRIC/passport number or company registration number, address, nationality,
permanent resident status, Securities Account number, share application amount,
share application details, the outcome of your application (including the number of
New Shares allocated to you pursuant to your application) and other personal data
(“Personal Data”) by the Share Registrar, CDP, Securities Clearing and Computer
Services (Pte) Ltd (“SCCS”), the SGX-ST, the Participating Banks, our Company,
the Joint Issue Managers, Bookrunners and Underwriters and/or other authorised
operators (the “Relevant Persons”) for the purpose of facilitating your application
for the New Shares, and in order for the Relevant Persons to comply with any
applicable laws, listing rules, regulations and/or guidelines and warrant that such
Personal Data is true, accurate and correct, and (ii) warrant that where you, as an
approved nominee company, disclose the Personal Data of the beneficial owner(s)
to the Relevant Persons, such disclosure is in compliance with applicable law
(collectively, the “Personal Data Privacy Terms”);
APPENDIX J – TERMS, CONDITIONS AND PROCEDURES FOR APPLICATION
AND ACCEPTANCE OF THE NEW SHARES IN SINGAPORE
J-6
(f) 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 in
determining whether to accept your application and/or whether to allocate any New
Shares to you;
(g) 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 nor
the Joint Issue Managers, Bookrunners and Underwriters will infringe any such laws as
a result of the acceptance of your application;
(h) agree and confirm that you are outside the United States; and
(i) understand that the New Shares have not been and will not be registered under the US
Securities Act or the securities laws of any state of the United States and may not be
offered or sold in the United States except pursuant to an exemption from, or in a
transaction not subject to, the registration requirements of the US Securities Act and
applicable state securities laws. There will be no public offer of the New Shares in the
United States. Any failure to comply with this restriction may constitute a violation of the
United States securities laws.
(24) Acceptance of applications will be conditional upon, among others, our Company being
satisfied that:
(a) permission has been granted by the SGX-ST to deal in and for the quotation of all of
(i) the Shares in the Company already issued; (ii) New Shares to be issued pursuant to
the Offering, (iii) Cornerstone Shares, (iv) Option Shares, (v) Award Shares, and
(vi) Additional Shares on the Main Board of the SGX-ST;
(b) each of the Management and Underwriting Agreement and the Placement Agreement,
referred to in the section on “Plan of Distribution” in this Prospectus, has become
unconditional and has not been terminated; and
(c) the Authority has not served a stop order which directs that no or no further New Shares
to which this Prospectus relates be allotted or issued (“Stop Order”). The Securities
and Futures Act provides that the Authority shall not serve a Stop Order if all the New
Shares have been issued and listed for quotation on the SGX-ST and trading in them
has commenced.
(25) In the event that a Stop Order in respect of the New Shares is served by the Authority or other
competent authority, and:
(a) where the New Shares have not been issued, (i) the Securities and Futures Act provides
that all applications shall be deemed to be withdrawn and cancelled; and (ii) our
Company shall refund the application monies (without interest or any share of revenue
or other benefit arising therefrom) to you within 14 days of the date of the Stop Order;
or
(b) where the New Shares have already been issued but trading has not commenced, (i)
the Securities and Futures Act provides that the issue will be deemed void; and (ii) our
APPENDIX J – TERMS, CONDITIONS AND PROCEDURES FOR APPLICATION
AND ACCEPTANCE OF THE NEW SHARES IN SINGAPORE
J-7
Company shall refund your payment for the New Shares (without interest or any share
of revenue or other benefit arising therefrom) to you within 14 days from the date of the
Stop Order.
This shall not apply where only an interim Stop Order has been served.
(26) In the event that an interim Stop Order in respect of the New Shares is served by the
Authority or other competent authority, no New Shares shall be issued to you until the
Authority revokes the interim Stop Order. The Authority is not able to serve a Stop Order in
respect of the New Shares if the New Shares have been issued and listed on the SGX-ST
and trading in them has commenced.
(27) Additional terms and conditions for applications by way of Application Forms are set out in
the section entitled “Additional Terms and Conditions for Applications using Printed
Application Forms” on pages J-9 to J-11 of this Prospectus.
(28) Additional terms and conditions for applications by way of Electronic Applications are set out
in the section entitled “Additional Terms and Conditions for Electronic Applications” on pages
J-14 to J-20 of this Prospectus.
(29) All payments in respect of any application for Public Offer Shares, and all refunds where (a)
an application is rejected or accepted in part only, or (b) the Offering does not proceed for
any reason, shall be made in Singapore dollars.
(30) All payments in respect of any application for Placement Shares, and all refunds where (a)
an application is rejected or accepted in part only, or (b) the Offering does not proceed for
any reason, shall be made in Singapore dollars.
(31) No application will be held in reserve.
(32) This Prospectus is dated 4 December 2014. No New Shares shall be allotted or allocated on
the basis of this Prospectus later than 6 months after the date of registration of this
Prospectus by the Authority.
APPENDIX J – TERMS, CONDITIONS AND PROCEDURES FOR APPLICATION
AND ACCEPTANCE OF THE NEW SHARES IN SINGAPORE
J-8
Additional Terms and Conditions for Applications using Printed Application Forms
Applications by way of an Application Form shall be made on, and subject to the terms and
conditions of this Prospectus, including but not limited to the terms and conditions set out below,
as well as those set out under the section entitled “Terms, Conditions and Procedures for
Application and Acceptance of the New Shares in Singapore” on pages J-1 to J-27 of this
Prospectus and the Memorandum and Articles of Association of our Company.
(1) Applications for the Public Offer Shares must be made using the printed WHITE Public Offer
Shares Application Forms and printed WHITE official envelopes “A” and “B”, accompanying
and forming part of this Prospectus.
Applications for the Placement Shares must be made using the printed BLUE Placement
Shares Application Forms (or in such manner as the Joint Issue Managers, Bookrunners and
Underwriters may in its absolute discretion deem appropriate), accompanying and forming
part of this Prospectus.
Without prejudice to the rights of our Company and the Joint Issue Managers, Bookrunners
and Underwriters, the Joint Issue Managers, Bookrunners and Underwriters, as agent of our
Company, have been authorised to accept, for and on behalf of our Company, such other
forms of application, as the Joint Issue Managers, Bookrunners and Underwriters may (in
consultation with our Company) deem appropriate.
Your attention is drawn to the detailed instructions contained in the Application Forms and
this Prospectus for the completion of the Application Forms, which must be carefully
followed. Our Company reserves the right to reject applications which do not conform
strictly to the instructions set out in the Application Forms and this Prospectus or
which are illegible, incomplete, incorrectly completed or which are accompanied by
improperly drawn remittances or improper form of remittances.
(2) You must complete your Application Forms in English. Please type or write clearly in ink
using BLOCK LETTERS.
(3) You must complete all spaces in your Application Forms except those under the heading
“FOR OFFICIAL USE ONLY” and you must write the words “NOT APPLICABLE” or “N.A.”
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 name as it
appears on your NRIC (if you have such an identification document) or in your passport and
in the case of a corporation, in your full name as registered with a competent authority. If you
are not an individual, 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 Share Registrar. Our Company
reserves the right to require you to produce documentary proof of identification for
verification purposes.
APPENDIX J – TERMS, CONDITIONS AND PROCEDURES FOR APPLICATION
AND ACCEPTANCE OF THE NEW SHARES IN SINGAPORE
J-9
(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 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
have an interest in the aggregate of more than 50.0% of the issued share capital of or
interests in such corporation. If you are an approved nominee company, you are required to
declare whether the beneficial owner of the New 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 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) You may apply and make payment for your application for the Public Offer Shares in
Singapore currency only in cash. Each application must be accompanied by a cash
remittance in Singapore currency for the full amount payable in Singapore dollars of the
Offering Price of S$0.95 for each Public Offer Share, in respect of the number of Public Offer
Shares applied for. The remittance must be in the form of a BANKER’S DRAFT or
CASHIER’S ORDER drawn on a bank in Singapore, made out in favour of “IFAST SHARE
ISSUE ACCOUNT” crossed “A/C PAYEE ONLY” with your name, Securities Account number
and address written clearly on the reverse side. Applications not accompanied by any
payment or accompanied by any other form of payment (unless otherwise permitted hereto)
will not be accepted. No combined Banker’s Draft or Cashier’s Order for different Securities
Accounts shall be accepted. Remittances bearing “NOT TRANSFERABLE” or
“NON-TRANSFERABLE” crossings will be rejected.
No acknowledgement of receipt will be issued for applications and application monies
received.
The manner and method for applications and acceptances of payment under the Placement
will be determined by the Joint Issue Managers, Bookrunners and Underwriters in their sole
discretion.
(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,
in the event of oversubscription for the Public Offer Shares, within 24 hours of the balloting
(or such shorter period as the SGX-ST may require), 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 Market Days after
the close of the Offering, PROVIDED THAT the remittance accompanying such application
APPENDIX J – TERMS, CONDITIONS AND PROCEDURES FOR APPLICATION
AND ACCEPTANCE OF THE NEW SHARES IN SINGAPORE
J-10
which has been presented for payment or other processes has been honoured and the
application monies received in the designated share issue account. If the Offering does not
proceed for any reason, the full amount of application monies (without interest or any share
of revenue or other benefit arising therefrom) will be returned to you at your own risk within
three (3) Market Days after the Offering is discontinued.
(9) Capitalised terms used in the Application Forms and defined in this Prospectus shall bear the
meanings assigned to them in this Prospectus.
(10) By completing and delivering the Application Forms, you agree that:
(a) in consideration of our Company having distributed the Application Form to you and by
completing and delivering the Application Form before the close of the Offering:
(i) your application is irrevocable;
(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; and
(iii) you represent and agree that you are located outside the United States (within the
meaning of Regulation S).
(b) all applications, acceptances or contracts resulting therefrom under the Offering 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;
(c) in respect of the Public Offer Shares for which your application has been received and
not rejected, acceptance of your application shall be constituted by written notification
by or on behalf of our Company and not otherwise, notwithstanding any remittance
being presented for payment by or on behalf of our Company;
(d) you will not be entitled to exercise any remedy of rescission for misrepresentation at
any time after acceptance of your application;
(e) reliance is placed solely on information contained in this Prospectus and that none of
our Company, the Joint Issue Managers, Bookrunners and Underwriters or any other
person involved in the Offering shall have any liability for any information not contained
therein;
(f) you accept and agree to the Personal Data Privacy Terms set out in this Prospectus;
and
(g) you irrevocably agree and undertake to subscribe for the number of Public Offer Shares
applied for as stated in the Application Form or any smaller number of such Public Offer
Shares that may be allocated to you in respect of your application. In the event that our
Company decides to allocate any smaller number of Public Offer Shares or not to
allocate any Public Offer Shares to you, you agree to accept such decision as final.
APPENDIX J – TERMS, CONDITIONS AND PROCEDURES FOR APPLICATION
AND ACCEPTANCE OF THE NEW SHARES IN SINGAPORE
J-11
Procedures Relating to Applications for the Public Offer Shares by Way of Printed
Application Forms
(1) Your application for the Public Offer Shares by way of printed Application Forms MUST be
made using the WHITE Public Offer Shares Application Forms and WHITE official envelopes
“A” and “B”.
(2) You must:
(a) enclose the WHITE Public Offer Shares Application Form, duly completed and signed,
together with the correct remittance for the full amount payable at the Offering Price in
Singapore currency in accordance with the terms and conditions of this Prospectus and
its accompanying documents, in the WHITE official envelope “A” provided;
(b) in appropriate spaces on the WHITE official envelope “A”:
(i) write your name and address;
(ii) state the number of Public Offer Shares applied for;
(iii) tick the relevant box to indicate form of payment; and
(iv) affix adequate Singapore postage.
(c) SEAL THE WHITE OFFICIAL ENVELOPE “A”;
(d) write, in the special box provided on the larger WHITE official envelope “B” addressed
to IFAST CORPORATION LTD., c/o TRICOR BARBINDER SHARE REGISTRATION
SERVICES, 80 ROBINSON ROAD, #02-00, SINGAPORE 068898, the number of
Public Offer Shares you have applied for;
(e) insert the WHITE official envelope “A” into the WHITE official envelope “B” and seal the
WHITE official envelope “B”; and
(f) affix adequate Singapore postage on the WHITE official envelope “B” (if dispatching by
ordinary post) and thereafter DESPATCH BY ORDINARY POST OR DELIVER BY
HAND the documents at your own risk to IFAST CORPORATION LTD., c/o TRICOR
BARBINDER SHARE REGISTRATION SERVICES, 80 ROBINSON ROAD, #02-00,
SINGAPORE 068898, so as to arrive by 12.00 p.m. on 9 December 2014 or such other
date(s) and time(s) as our Company may agree with the Joint Issue Managers,
Bookrunners and Underwriters. Courier services or Registered Post must NOT be
used.
(3) Applications that are illegible, incomplete or incorrectly completed or accompanied by
improperly drawn remittances or which are not honoured upon their first presentation are
liable to be rejected. Except for applications for the Placement Shares where remittance is
permitted to be submitted separately, applications for the Public Offer Shares not
accompanied by any payment or any other form of payment will not be accepted.
APPENDIX J – TERMS, CONDITIONS AND PROCEDURES FOR APPLICATION
AND ACCEPTANCE OF THE NEW SHARES IN SINGAPORE
J-12
(4) ONLY ONE APPLICATION should be enclosed in each envelope. No acknowledgement of
receipt will be issued for any application or remittance received.
Procedures Relating to Applications for the Placement Shares by Way of Printed
Application Forms
(1) Your application for the Placement Shares by way of printed Application Forms MUST be
made using the BLUE Placement Shares Application Forms.
(2) The completed and signed BLUE Placement Shares Application Form and your remittance,
in accordance with the terms and conditions of this Prospectus, for the full amount payable
at the Offering Price, as the case may be, for each Placement Share in respect of the number
of Placement Shares applied for, with your name, Securities Account number and address
clearly written 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, IFAST CORPORATION LTD., c/o
TRICOR BARBINDER SHARE REGISTRATION SERVICES, 80 ROBINSON ROAD, #02-00,
SINGAPORE 068898, to arrive by 12.00 p.m. on 9 December 2014 or such other date(s) and
time(s) as our Company may agree with the Joint Issue Managers, Bookrunners and
Underwriters. Courier services or Registered Post must NOT be used.
(3) In respect of an application for Placement Shares, you may alternatively remit your
application monies by electronic transfer to the account of DBS Bank Marina Bay Financial
Centre Branch, Current Account No. 003-710569-4 in favour of “IFAST SHARE ISSUE
ACCOUNT” by 12.00 p.m. on 9 December 2014 or such other date(s) and time(s) as our
Company may agree with the Joint Issue Managers, Bookrunners and Underwriters subject
to any limitation under applicable laws and regulations and the rules of the SGX-ST.
Applicants who remit their application monies via electronic transfer should send a copy of
the telegraphic transfer advice slip to DBS Bank Ltd., Capital Markets Group, 12 Marina
Boulevard, Level 46, Marina Bay Financial Centre Tower 3, Singapore 018982, to arrive by
12.00 p.m. on 9 December 2014 or such other date(s) and time(s) as our Company may
agree with the Joint Issue Managers, Bookrunners and Underwriters.
(4) Applications that are illegible, incomplete or incorrectly completed or accompanied by
improperly drawn remittances or which are not honoured upon their first presentation are
liable to be rejected.
(5) ONLY ONE APPLICATION should be enclosed in each envelope. No acknowledgement of
receipt will be issued for any application or remittance received.
APPENDIX J – TERMS, CONDITIONS AND PROCEDURES FOR APPLICATION
AND ACCEPTANCE OF THE NEW SHARES IN SINGAPORE
J-13
Additional Terms and Conditions for Electronic Applications
Electronic Applications shall be made on and subject to the terms and conditions of this
Prospectus, including but not limited to the terms and conditions set out below and those under
the section “Terms, Conditions and Procedures for Application and Acceptance of the New Shares
in Singapore” on pages J-1 to J-27 of this Prospectus, as well as the Memorandum and Articles
of Association of our Company.
(1) The procedures for Electronic Applications are set out on the ATM screens of the relevant
Participating Banks (in the case of ATM Electronic Applications), the IB website screens of
the relevant Participating Banks (in the case of Internet Electronic Applications) and the
mobile banking interface of DBS Bank (“mBanking Interface”) (in the case of mBanking
Applications). Currently, DBS Bank, OCBC Bank and UOB Group (each as defined below)
are the Participating Banks through which Internet Electronic Applications and ATM
Electronic Applications may be made and DBS Bank is the only Participating Bank through
which mBanking Applications may be made.
(2) For illustration purposes, the procedures for Electronic Applications for Public Offer Shares
through ATMs, the IB website and the mBanking Interface of DBS Bank (together the
“Steps”) are set out in pages J-21 to J-27 of this Prospectus. The Steps set out the actions
that you must take at ATMs, the IB website or the mBanking Interface of DBS Bank to
complete an Electronic Application. The actions that you must take at the ATMs or the IB
websites of the other Participating Banks are set out on the ATM screens or the IB website
screens of the respective Participating Banks. Please read carefully the terms and conditions
of this Prospectus and its accompanying documents (including the Application Forms), the
Steps and the terms and conditions for Electronic Applications set out below before making
an Electronic Application.
(3) Any reference to “you” or the “Applicant” in these Additional Terms and Conditions for
Electronic Applications and the Steps shall refer to you making an application for Public Offer
Shares through an ATM of one of the relevant Participating Banks or the IB website of a
relevant Participating Bank or the mBanking Interface of DBS Bank.
(4) If you are making an ATM Electronic Application:
(a) You must have an existing bank account with and be an ATM cardholder of one of the
Participating Banks. An ATM card issued by one Participating Bank cannot be used to
apply for Public Offer Shares at an ATM belonging to other Participating Banks.
(b) 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 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 Electronic Application liable to
be rejected.
APPENDIX J – TERMS, CONDITIONS AND PROCEDURES FOR APPLICATION
AND ACCEPTANCE OF THE NEW SHARES IN SINGAPORE
J-14
(c) Upon the completion of your ATM Electronic Application, you will receive an ATM
transaction slip (“Transaction Record”), confirming the details of your ATM Electronic
Application. The Transaction Record is for your retention and should not be submitted
with any printed Application Form.
(5) If you are making an Internet Electronic Application or an mBanking Application:
(a) You must have an existing bank account with, and a User Identification (“User ID”) as
well as a Personal Identification Number (“PIN”) given by, the relevant Participating
Bank.
(b) You must ensure that the mailing address of your account selected for the application
is in Singapore and you must declare that the application is being made in Singapore.
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 you make the application.
(c) Upon the completion of your Internet Electronic Application through the IB website of
the relevant Participating Bank or your mBanking Application through the mBanking
Interface of DBS Bank, there will be an on-screen confirmation (“Confirmation
Screen”) of the application which can be printed out or screen captured by you for your
record. This printed record or screen capture of the Confirmation Screen is for your
retention and should not be submitted with any printed Application Form.
(6) In connection with your Electronic Application for Public Offer Shares, you are required to
confirm statements to the following effect in the course of activating the Electronic
Application:
(a) that you have received a copy of the Prospectus (in the case of ATM Electronic
Applications) and have read, understood and agreed to all the terms and conditions of
application for the Public Offer Shares and the Prospectus prior to effecting the
Electronic Application and agree to be bound by the same;
(b) that, for the purposes of facilitating your application, you consent to the collection, use
and disclosure, by the relevant Participating Bank, of your name, NRIC/passport
number, address, nationality, Securities Account number, CPF investment account
number, share application details and other personal data (the “Relevant Particulars”)
from your records with the relevant Participating Bank, to our Share Registrar, the
SGX-ST, CDP, CPF, SCCS, our Company and the Joint Issue Managers, Bookrunners
and Underwriters (the “Relevant Parties”); and
(c) where you are applying for the Public Offer Shares, that this is your only application for
the Public Offer Shares and it is made in your name and at your own risk.
Your application will not be successfully completed and cannot be recorded as a completed
transaction unless you press the “Enter” or “OK” or “Confirm” or “Yes” 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 or the mBanking Interface. By doing so, you shall
be treated as signifying your confirmation of each of the three (3) statements above. In
respect of statement 6(b) above, your confirmation, by pressing the “Enter” or “OK” or
“Confirm” or “Yes” or any other relevant key in the ATM or clicking “Confirm” or “OK” or
APPENDIX J – TERMS, CONDITIONS AND PROCEDURES FOR APPLICATION
AND ACCEPTANCE OF THE NEW SHARES IN SINGAPORE
J-15
“Submit” or “Continue” or “Yes” or any other relevant button on the IB website screen or the
mBanking Interface, 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 that Participating Bank of the Relevant
Particulars of your account(s) with that Participating Bank to the Relevant Parties.
By making an Electronic Application you confirm that you are not applying for the Public 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 shall make only one
Electronic Application for the Public Offer Shares and shall not make any other application
for the Public Offer Shares whether at the ATMs of any Participating Bank, the IB websites
of the relevant Participating Banks or the mBanking Interface of DBS Bank or on the
Application Forms. Where you have made an application for the Public Offer Shares on an
Application Form, you shall not make an Electronic Application for the Public Offer Shares
and vice versa.
(7) You must have sufficient funds in your bank account with your Participating Bank at the time
you make your ATM Electronic Application, Internet Electronic Application or mBanking
Application, failing which such Electronic Application will not be completed. Any Electronic
Application which does not conform strictly to the instructions set out in this Prospectus or
on the screens of the ATMs or on the IB website of the relevant Participating Bank or the
mBanking Interface of DBS Bank, as the case may be, through which your Electronic
Application is being made shall be rejected.
(8) You may apply and make payment for your application for the Public Offer Shares in
Singapore currency through any ATM or IB website of your Participating Bank or the
mBanking Interface of DBS Bank (as the case may be) by authorising your Participating Bank
to deduct the full amount payable from your bank account(s) with such Participating Bank.
(9) You irrevocably agree and undertake to subscribe for and to accept the number of Public
Offer Shares applied for as stated on the Transaction Record or the Confirmation Screen or
any lesser number of such Public Offer Shares that may be allocated to you in respect of your
Electronic Application. In the event that our Company decides to allocate any lesser number
of such Public Offer Shares or not to allocate any Public 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 “OK” or “Confirm” or “Yes” or any other relevant key
in the ATM or clicking “Confirm” or “OK” or “Submit” or “Continue” or “Yes” or any other
relevant button on the IB website screen or the mBanking Interface of DBS Bank) of the
number of Public Offer Shares applied for shall signify and shall be treated as your
acceptance of the number of Public Offer Shares that may be 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
renounce any instrument of transfer and/or other documents required for the transfer of the
Public Offer Shares that may be allocated to you and your agreement to be bound by the
Memorandum and Articles of Association of our Company.
APPENDIX J – TERMS, CONDITIONS AND PROCEDURES FOR APPLICATION
AND ACCEPTANCE OF THE NEW SHARES IN SINGAPORE
J-16
(10) Our Company will not keep any application in reserve. Where your Electronic Application is
unsuccessful, the full amount of the application monies will be returned (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, at your own risk within 24 hours of the
balloting (or such shorter period as the SGX-ST may require) provided that the remittance in
respect of such application which has been presented for payment or other processes has
been honoured and the application monies received in the designated share issue account.
Where your Electronic Application is rejected or accepted in part only, the balance of the
application monies, as the case may be, will be returned (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, at your own risk within 14 Market Days after the close
of the Offering provided that the remittance in respect of such application which has been
presented for payment or other processes has been honoured and the application monies
received in the designated share issue account.
In the case of the Public Offer, if the Offering does not proceed for any reason, the full
amount of application monies (without interest or any share of revenue or other benefit
arising therefrom) will be returned to you at your own risk within three (3) Market Days after
the Offering is discontinued.
Responsibility for timely refund of application monies (whether from unsuccessful or partially
successful Electronic Applications or otherwise) 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 money to you from an unsuccessful
or partially successful Electronic Application, to determine the exact number of Public Offer
Shares, if any, allocated to you before trading the Shares on the SGX-ST. None of the
SGX-ST, CDP, SCCS, the Participating Banks, our Company or the Joint Issue Managers,
Bookrunners and Underwriters 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.
(11) If your Electronic Application is unsuccessful, no notification will be sent by the relevant
Participating Bank.
APPENDIX J – TERMS, CONDITIONS AND PROCEDURES FOR APPLICATION
AND ACCEPTANCE OF THE NEW SHARES IN SINGAPORE
J-17
(12) Applicants who make ATM Electronic Applications through the ATMs of the following
Participating Banks may check the provisional results of their ATM Electronic Applications as
follows:
Bank Telephone Other Channels Operating Hours
Service
expected
from
DBS Bank Ltd.
(including POSB)
(“DBS Bank”)
1800 339 6666
(for POSB
account holders)
1800 111 1111
(for DBS account
holders)
IBhttp://www.dbs.com
(1)
24 hours a day Evening of the
balloting day
Oversea-Chinese
Banking
Corporation
Limited
(“OCBC Bank”)
1800 363 3333 Phone Banking/ATM/IBhttp://www.ocbc.com
(2)
24 hours a day Evening of the
balloting day
United Overseas
Bank Limited
(“UOB”) and its
subsidiary, Far
Eastern Bank
Limited
(“UOB Group”)
1800 222 2121 ATM (Other Transactions
“IPO Results
Enquiry”)/Phone
Banking/Internet Bankinghttp://www.uobgroup.com
(3)
24 hours a day Evening of the
balloting day
Notes:
(1) Applicants who have made Internet Electronic Applications through the IB websites of DBS Bank or mBanking
Applications through the mBanking Interface of DBS Bank may also check the results of their applications
through the same channels listed in the table above in relation to ATM Electronic Applications made at the
ATMs of DBS Bank.
(2) Applicants who have made Electronic Application through the ATMs of OCBC Bank may check the results of
their applications through OCBC Bank Personal Internet Banking, OCBC Bank ATMs or OCBC Bank Phone
Banking services.
(3) Applicants who have made Electronic Application through the ATMs or the IB website of the UOB Group may
check the results of their applications through UOB Personal Internet Banking, UOB Group ATMs or UOB
Phone Banking services.
(13) ATM Electronic Applications shall close at 12.00 p.m. on 9 December 2014 or such other
date(s) and time(s) as our Company may agree with the Joint Issue Managers, Bookrunners
and Underwriters. All Internet Electronic Applications and mBanking Applications must be
received by 12.00 p.m. on 9 December 2014, or such other date(s) and time(s) as our
Company may agree with the Joint Issue Managers, Bookrunners and Underwriters. Internet
Electronic Applications and mBanking Applications are deemed to be received when they
enter the designated information system of the relevant Participating Bank.
(14) You are deemed to have irrevocably requested and authorised our Company to:
(a) register the Public Offer Shares allocated to you in the name of CDP for deposit into
your Securities Account;
(b) send the relevant Share certificate(s) to CDP;
APPENDIX J – TERMS, CONDITIONS AND PROCEDURES FOR APPLICATION
AND ACCEPTANCE OF THE NEW SHARES IN SINGAPORE
J-18
(c) return or refund (without interest or any share of revenue earned or other benefit arising
therefrom) the application monies, should your Electronic Application be rejected, by
automatically crediting your bank account with your Participating Bank, at your own risk
with the relevant amount within 24 hours after balloting (or such shorter period as the
SGX-ST may require), or within three (3) Market Days if the Offering does not proceed
for any reason, after the close or discontinuation (as the case may be) of the Offering,
PROVIDED THAT the remittance in respect of such application which has been
presented for payment or such other processes has been honoured and application
monies received in the designated share issue account; 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
rejected or accepted in part only, by automatically crediting your bank account with your
Participating Bank, at your risk, with the relevant amount within 14 Market Days after
the close of the Offering, PROVIDED THAT the remittance in respect of such
application which has been presented for payment or such other processes has been
honoured and application monies received in the designated share issue account.
(15) You irrevocably agree and acknowledge that your Electronic Application is subject to risks of
electrical, electronic, technical and computer-related faults and breakdown, fires, acts of God
and other events beyond the control of the Participating Banks, our Company and the Joint
Issue Managers, Bookrunners and Underwriters, and if, in any such event our Company, the
Joint Issue Managers, Bookrunners and Underwriters, CDP and/or the relevant Participating
Bank do not receive your Electronic Application, or any 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, the Joint Issue Managers, Bookrunners and Underwriters, CDP and/or the
relevant Participating Bank for any Public Offer Shares applied for or for any compensation,
loss or damage.
(16) The existence of a trust will not be recognised. Any Electronic Application by a trustee must
be made in his own name and without qualification. Our Company shall reject any application
by any person acting as nominee (other than approved nominee companies).
(17) All your particulars in the records of your Participating Bank at the time you make your
Electronic Application shall be deemed to be true and correct and your Participating Bank
and the Relevant Persons shall be entitled to rely on the accuracy thereof. If there has been
any change in your particulars after making your Electronic Application, you must promptly
notify your Participating Bank.
(18) 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 allocation will be sent to your address last registered with
CDP.
APPENDIX J – TERMS, CONDITIONS AND PROCEDURES FOR APPLICATION
AND ACCEPTANCE OF THE NEW SHARES IN SINGAPORE
J-19
(19) By making and completing an Electronic Application, you are deemed to have agreed that:
(a) in consideration of our Company making available the Electronic Application facility,
through the Participating Banks acting as agents of our Company, at the ATMs and IB
websites of the relevant Participating Banks and the mBanking Interface of DBS Bank:
(i) your Electronic Application is irrevocable;
(ii) your Electronic Application, the acceptance by our Company and the contract
resulting therefrom under the Public Offer 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; and
(iii) you represent and agree that you are not located in the United States (within the
meaning of Regulation S);
(b) none of CDP, our Company, the Joint Issue Managers, Bookrunners and Underwriters
and the Participating Banks 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 or the SGX-ST due to breakdowns or failure of
transmission, delivery or communication facilities or any risks referred to in paragraph
15 above or to any cause beyond their respective controls;
(c) in respect of the Public 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 for rescission for misrepresentation at
any time after acceptance of your application;
(e) reliance is placed solely on information contained in this Prospectus and that none of
our Company, the Joint Issue Managers, Bookrunners and Underwriters or any other
person involved in the Offering shall have any liability for any information not contained
therein; and
(f) you irrevocably agree and undertake to subscribe for the number of Public Offer Shares
applied for as stated in your Electronic Application or any smaller number of such Public
Offer Shares that may be allocated to you in respect of your Electronic Application. In
the event our Company decides to allocate any smaller number of such Public Offer
Shares or not to allocate any Public Offer Shares to you, you agree to accept such
decision as final.
APPENDIX J – TERMS, CONDITIONS AND PROCEDURES FOR APPLICATION
AND ACCEPTANCE OF THE NEW SHARES IN SINGAPORE
J-20
Steps for ATM Electronic Applications for Public Offer Shares through ATMs of DBS Bank
(including POSB ATMs)
Instructions for ATM Electronic Applications will appear on the ATM screens of the respective
Participating Bank. For illustration purposes, the steps for making an ATM Electronic Application
through a DBS Bank or POSB ATM are shown below. Certain words appearing on the screen are
in abbreviated form (“A/C”, “amt”, “appln”, “&”, “I/C”, “No.”, “SGX” and “Max” refer to “Account”,
“amount”, “application”, “and”, “NRIC”, “Number”, “SGX-ST” and “Maximum”, respectively).
Instructions for ATM Electronic Applications on the ATM screens of Participating Banks (other than
DBS Bank (including POSB)), may differ slightly from those represented below.
Step 1: Insert your personal DBS Bank or POSB ATM Card.
2: Enter your Personal Identification Number.
3: Select “MORE SERVICES”.
4: Select language (for customers using multi-language card).
5: Select “ESA-IPO SHARE/INVESTMENTS”.
6: Select “ELECTRONIC SECURITY APPLN (IPOS/BOND/ST-OTES/SECURITIES)”.
7: Read and understand the following statements which will appear on the screen:
• THE OFFER OF SECURITIES (OR UNITS OF SECURITIES) WILL BE MADE
IN, OR ACCOMPANIED BY, A COPY OF THE PROSPECTUS/DOCUMENT OR
PROFILE STATEMENT (AND IF APPLICABLE, A COPY OF THE
REPLACEMENT OR SUPPLEMENTARY PROSPECTUS/DOCUMENT OR
PROFILE STATEMENT) WHICH CAN BE OBTAINED FROM ANY DBS/POSB
BRANCH IN SINGAPORE AND, WHERE APPLICABLE, THE VARIOUS
PARTICIPATING BANKS DURING BANKING HOURS, SUBJECT TO
AVAILABILITY.
• (IN THE CASE OF SECURITIES OFFERING THAT IS SUBJECT TO A
PROSPECTUS/OFFER INFORMATION/DOCUMENT REGISTERED WITH
THE MONETARY AUTHORITY OF SINGAPORE) ANYONE WISHING TO
ACQUIRE THESE SECURITIES (OR UNITS OF SECURITIES) SHOULD READ
THE PROSPECTUS/DOCUMENT OR PROFILE STATEMENT (AS
SUPPLEMENTED OR REPLACED, IF APPLICABLE) BEFORE SUBMITTING
HIS APPLICATION WHICH WILL NEED TO BE MADE IN THE MANNER SET
OUT IN THE PROSPECTUS/DOCUMENT OR PROFILE STATEMENT (AS
SUPPLEMENTED OR REPLACED, IF APPLICABLE). A COPY OF THE
PROSPECTUS/DOCUMENT OR PROFILE STATEMENT, AND IF
APPLICABLE, A COPY OF THE REPLACEMENT OR SUPPLEMENTARY
PROSPECTUS/DOCUMENT OR PROFILE STATEMENT HAS BEEN LODGED
WITH AND REGISTERED BY THE MONETARY AUTHORITY OF SINGAPORE
WHO ASSUMES NO RESPONSIBILITY FOR ITS OR THEIR CONTENTS.
APPENDIX J – TERMS, CONDITIONS AND PROCEDURES FOR APPLICATION
AND ACCEPTANCE OF THE NEW SHARES IN SINGAPORE
J-21
• (IN THE CASE OF SECURITIES OFFERING THAT DOES NOT REQUIRE A
PROSPECTUS TO BE REGISTERED WITH THE MONETARY AUTHORITY OF
SINGAPORE) THE OFFER OF SECURITIES (OR UNITS OF SECURITIES)
MAY BE MADE IN A NOTICE PUBLISHED IN A NEWSPAPER AND/OR A
CIRCULAR/DOCUMENT DISTRIBUTED TO SECURITY HOLDERS. ANYONE
WISHING TO ACQUIRE SUCH SECURITIES (OR UNITS OF SECURITIES)
SHOULD READ THE NOTICE/CIRCULAR/DOCUMENT BEFORE
SUBMITTING THIS APPLICATION, WHICH WILL NEED TO BE MADE IN THE
MANNER SET OUT IN THE NOTICE/CIRCULAR/DOCUMENT.
PRESS THE “ENTER” KEY TO CONFIRM THAT YOU HAVE READ AND
UNDERSTOOD.
8: Select “IFAST” to display details.
9: Press the “ENTER” key to acknowledge.
• YOU HAVE READ, UNDERSTOOD AND AGREED TO ALL TERMS OF THE
APPLICATION AND (WHERE APPLICABLE) THE PROSPECTUS, OFFER
INFORMATION STATEMENT, DOCUMENT, PROFILE STATEMENT,
REPLACEMENT OR SUPPLEMENTARY PROSPECTUS/ DOCUMENT/
PROFILE STATEMENT NOTICE AND/OR CIRCULAR.
• FOR THE PURPOSES OF FACILITATING YOUR APPLICATION, YOU
CONSENT TO THE BANK COLLECTING AND USING YOUR NAME,
NRIC/PASSPORT NUMBER, ADDRESS, NATIONALITY, CDP SECURITIES
ACCOUNT NUMBER, CPF INVESTMENT ACCOUNT NUMBER, APPLICATION
DETAILS AND OTHER PERSONAL DATA AND DISCLOSING THE SAME
FROM OUR RECORDS TO REGISTRARS OF SECURITIES OF THE ISSUER,
SGX, CDP, CPF, ISSUER/VENDOR(S) AND ISSUE MANGER(S).
• FOR FIXED AND MAX PRICE SECURITIES APPLICATION, THIS IS YOUR
ONLY APPLICATION AND IT IS MADE IN YOUR OWN NAME AND AT YOUR
OWN RISK.
• THE MAXIMUM PRICE FOR EACH SECURITY IS PAYABLE IN FULL ON
APPLICATION AND SUBJECT TO REFUND IF THE FINAL PRICE IS LOWER.
• FOR TENDER SECURITIES APPLICATION, THIS IS YOUR ONLY
APPLICATION AT THE SELECTED TENDER PRICE AND IT IS MADE IN YOUR
OWN NAME AND AT YOUR OWN RISK.
• YOU ARE NOT A US PERSON AS REFERRED TO IN (WHERE APPLICABLE)
THE PROSPECTUS, OFFER INFORMATION STATEMENT, DOCUMENT,
PROFILE STATEMENT, REPLACEMENT OR SUPPLEMENTARY
PROSPECTUS/DOCUMENT/PROFILE STATEMENT, NOTICE AND/OR
CIRCULAR.
APPENDIX J – TERMS, CONDITIONS AND PROCEDURES FOR APPLICATION
AND ACCEPTANCE OF THE NEW SHARES IN SINGAPORE
J-22
• THERE MAY BE A LIMIT ON THE MAXIMUM NUMBER OF SECURITIES THAT
YOU CAN APPLY FOR SUBJECT TO AVAILABILITY. YOU MAY BE
ALLOCATED A SMALLER NUMBER OF SECURITIES THAN YOU APPLIED
FOR OR (IN THE CASE OF AN EARLIER CLOSURE UPON FULL
SUBSCRIPTION) YOUR APPLICATION MAY BE REJECTED IF ALL THE
AVAILABLE SECURITIES HAVE BEEN FULLY ALLOCATED TO EARLIER
APPLICANTS.
10: Select your nationality.
11: Select the DBS Bank account (Autosave/Current/Savings/Savings Plus) or the POSB
account (Current/Savings) from which to debit your application monies.
12: Enter the number of securities you wish to apply for using cash.
13: Enter or confirm (if your CDP Securities Account number has already been stored in
DBS’s records) your own 12-digit CDP Securities Account number (Note: This step
will be omitted automatically if your Securities Account Number has already been
stored in DBS’s records).
14: Check the details of your securities application, your CDP Securities Account
number, number of securities and application amount on the screen and press the
“ENTER” key to confirm your application.
15: Remove the Transaction Record for your reference and retention only.
APPENDIX J – TERMS, CONDITIONS AND PROCEDURES FOR APPLICATION
AND ACCEPTANCE OF THE NEW SHARES IN SINGAPORE
J-23
Steps for Internet Electronic Application for Public Offer Shares through the IB Website of
DBS Bank
For illustrative purposes, the steps for making an Internet Electronic Application through the DBS
IB website are shown below. Certain words appearing on the screen are in abbreviated form
(“A/C”, “&”, “amt”, “I/C” and “No.” refer to “Account”, “and”, “Amount”, “NRIC” and “Number”,
respectively).
Step 1: Click on DBS website (www.dbs.com).
2: Login to Internet banking.
3: Enter your User ID and PIN.
4: Enter your DBS iB Secure PIN.
5: Select “Electronic Security Application (ESA)”.
6: Click “Yes” to proceed and to warrant, among others, that you are currently in
Singapore, you have observed and complied with all applicable laws and regulations
and that your mailing address for DBS mailing address for DBS Internet Banking is
in Singapore and that you are not a U.S. person (as such term is defined in
Regulation S under the United States Securities Act of 1933, amended).
7: Select your country of residence and click “I confirm”.
8: Click on “IFAST” and click “Submit”.
9: Click on “I Confirm” to confirm, among others:
• You have read, understood and agreed to all terms of this application and the
Prospectus/Document or Profile Statement and if applicable, the
Supplementary or Replacement Prospectus/Document or Profile Statement.
• For the purposes of facilitating your application, you consent to the Bank
collecting and using your name, NRIC/passport number, address, nationality,
CDP securities account number, CPF investment account number, application
details and other personal data and disclosing the same from our records to
registrars of securities of the issuer, SGX, CDP, CPF, issuer/vendor(s) and issue
manger(s).
• You are not a U.S. Person (as such term is defined in Regulation S under the
United States Securities Act of 1933, as amended).
APPENDIX J – TERMS, CONDITIONS AND PROCEDURES FOR APPLICATION
AND ACCEPTANCE OF THE NEW SHARES IN SINGAPORE
J-24
• You understand that the securities mentioned herein have not been and will not
be registered under the United States Securities Act of 1933, as amended (the
“US Securities Act”) or the securities laws of any state of the United States and
may not be offered or sold in the United States or to, or for the account or benefit
of any “US person” (as defined in Regulation S under the US Securities Act)
except pursuant to an exemption from or in a transaction not subject to, the
registration requirements of the US Securities Act and applicable state
securities laws. There will be no public offer of the securities mentioned herein
in the United States. Any failure to comply with this restriction may constitute a
violation of the United States securities laws.
• This application is made in your own name and at your own risk.
• For FIXED/MAX price securities application, this is your only application. For
TENDER price securities application, this is your only application at the
selected tender price.
• 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 S$, based on the Bank’s prevailing board rates at the time of
application. Any refund monies will be credited in S$ based on the Bank’s
prevailing board rates at the time of refund. The different prevailing board rates
at the time of application and the time of refund of application monies may result
in either a foreign exchange profit or loss or application monies may be debited
and refund credited in S$ at the same exchange rate.
• For 1ST-COME-1ST-SERVE securities, the number of securities applied for
may be reduced, subject to availability at the point of application.
10: Fill in details for securities application and click “Submit”.
11: Check the details of your securities application, your CDP Securities A/C No. and
click “Confirm” to confirm your application.
12: Print the Confirmation Screen (optional) for your reference and retention only.
APPENDIX J – TERMS, CONDITIONS AND PROCEDURES FOR APPLICATION
AND ACCEPTANCE OF THE NEW SHARES IN SINGAPORE
J-25
Steps for mBanking Applications for Public Offer Shares through the mBanking Interface of
DBS Bank
For illustrative purposes, the steps for making an mBanking Application are shown below. Certain
words appearing on the screen are in abbreviated from (“A/C”, “&”, “amt”, “I/C”, “SGX” and “No.”
refer to “Account”, “and”, “Amount”, “NRIC”, “SGX-ST” and “Number”, respectively).
Step 1: Click on DBS Bank mBanking application using your User ID and PIN.
2: Select “Investment Services”.
3: Select “Electronic Securities Application”.
4: Select “Yes” to proceed and to warrant, among others, that you are currently in
Singapore, you have observed and complied with all applicable laws and regulations
and that your mailing address for DBS Internet Banking is in Singapore and that you
are not a U.S. Person (as such term is defined in Regulation S under the United
States Securities Act of 1933 as amended).
5: Select your country of residence.
6: Select “IFAST”.
7: Select “Yes” to confirm, among others:
• You have read, understood and agreed to all terms of this application and the
Prospectus/Document or Profile Statement and if applicable, the
Supplementary or Replacement Prospectus/Document or Profile Statement.
• For the purposes of facilitating your application, you consent to the Bank
collecting and using your name, NRIC/passport number, address, nationality,
CDP securities account number, CPF investment account number, application
details and other personal data and disclosing the same from our records to
registrars of securities of the issuer, SGX, CDP, CPF, issuer/vendor(s) and issue
manger(s).
• You are not a U.S. Person (as such term is defined in Regulation S under the
United States Securities Act of 1933, as amended).
• You understand that the securities mentioned herein have not been and will not
be registered under the United States Securities Act of 1933, as amended (the
“US Securities Act”) or the securities laws of any state of the United States and
may not be offered or sold in the United States or to, or for the account or benefit
of any “US person” (as defined in Regulation S under the US Securities Act)
except pursuant to an exemption from or in a transaction subject to, the
registration requirements of the US Securities Act and applicable state
securities laws. There will be no public offer of the securities mentioned herein
in the United States. Any failure to comply with this restriction may constitute a
violation of the United States securities laws.
• This application is made in your own name and at your own risk.
APPENDIX J – TERMS, CONDITIONS AND PROCEDURES FOR APPLICATION
AND ACCEPTANCE OF THE NEW SHARES IN SINGAPORE
J-26
• For FIXED/MAX price securities application, this is your only application. For
TENDER price securities application, this is your only application at the
selected tender price.
• 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 S$, based on the Bank’s prevailing board rates at the time of
application. Any refund monies will be credited in S$ based on the Bank’s
prevailing board rates at the time of refund. The different prevailing board rates
at the time of application and the time of refund of application monies may result
in either a foreign exchange profit or loss or application monies may be debited
and refund credited in S$ at the same exchange rate.
• FOR 1ST-COME-1ST-SERVE securities, the number of securities applied for
may be reduced, subject to availability at the point of application.
8: Fill in details for securities application and click “Submit”.
9: Check the details of your securities application, your CDP Securities A/C No. and
click “Confirm” to confirm your application.
10: Where applicable, capture Confirmation Screen (optional) for your reference and
retention only.
APPENDIX J – TERMS, CONDITIONS AND PROCEDURES FOR APPLICATION
AND ACCEPTANCE OF THE NEW SHARES IN SINGAPORE
J-27
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Joint Issue Managers, Bookrunners and Underwriters
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.
This is an inital public ofering of ordinary shares (the “Shares”) in the capital
of iFAST Corporaton Ltd. (the “Company”). We are making an ofering of
32,800,000 Shares (“New Shares”) which consists of (i) an internatonal
placement of 30,000,000 Shares (the “Placement”) to investors, including
insttutonal and other investors in Singapore and outside the United States
in compliance with Regulaton S (“Regulaton S”) under the United States
Securites Act of 1933, as amended (the “US Securites Act”), and (ii) a public
ofer of 2,800,000 Shares in Singapore (the “Public Ofer”, and together with
the Placement, the “Ofering”). The ofering price for each Share (the “Ofering
Price”) is S$0.95.
Separate from the Ofering, each of FIL Investment Management (Hong Kong)
Limited and OWW Investments III Limited (collectvely, the “Cornerstone
Investors”) has entered into a cornerstone subscripton agreement with
the Company (collectvely, the “Cornerstone Subscripton Agreements”) to
subscribe for an aggregate of 19,000,000 new Shares at the Ofering Price (the
“Cornerstone Shares”), conditonal upon, inter alia, the Management and
Underwritng Agreement (as defned herein) and the Placement Agreement
(as defned herein) having been entered into and not having been terminated
pursuant to their terms on or prior to the Listng Date (as defned herein) (the
“Cornerstone Tranche”).
We have made an applicaton to the Singapore Exchange Securites Trading
Limited (the “SGX-ST”) for permission to deal in, and for quotaton of, all the
Shares already issued, the New Shares which are the subject of the Ofering, the
Cornerstone Shares, the new shares which may be issued upon the exercise of
(i) the existng optons granted pursuant to the 2003 ESOS and the 2013 ESOS as
well as (ii) the optons to be granted pursuant to the iFAST ESOS (the new Shares
which may be issued upon the exercise of (i) and (ii) collectvely referred to as
the “Opton Shares”), the new Shares which may be issued upon the release of
the share awards to be granted pursuant to the iFAST Performance Share Plan
(the “Award Shares”) and the new Shares (the “Additonal Shares”) which may
be issued pursuant to the exercise of an over-allotment opton described below
(the “Over-allotment Opton”). Such permission will be granted when we have
been admited to the Ofcial List of the SGX-ST. The dealing in and quotaton of
our Shares will be in Singapore dollars.
Acceptance of applicatons will be conditonal upon, inter alia, permission
being granted by the SGX-ST to deal in, and for quotaton of, all of the existng
issued Shares, the New Shares, the Cornerstone Shares, the Opton Shares,
the Award Shares and the Additonal Shares. If permission is not granted or
the Ofering is not completed for any reason, monies paid in respect of any
applicaton accepted will be returned to you at your own risk, without interest
or any share of revenue or other beneft arising therefrom, and you will not
have any right or claim whatsoever against us and any of the Joint Issue
Managers, Bookrunners and Underwriters (as defned herein).
We have received a leter of eligibility-to-list from the SGX-ST for the listng
and quotaton of our existng issued Shares, the New Shares, the Cornerstone
Shares, the Opton Shares, the Award Shares and the Additonal Shares. The
SGX-ST assumes no responsibility for the correctness of any of the statements
made, opinions expressed or reports contained in this Prospectus. Admission
to the Ofcial List of the SGX-ST is not to be taken as an indicaton of the merits
of the Ofering, our Company, our subsidiaries, our existng issued Shares, the
New Shares, the Cornerstone Shares, the Opton Shares, the Award Shares or
the Additonal Shares.
Our Shares are being ofered and sold outside the United States in an ofshore
transacton as such term is defned in Regulaton S under the US Securites Act.
Our Shares have not been and will not be registered under the US Securites Act
and may not be re-ofered, re-sold, pledged, or otherwise transferred except in
an ofshore transacton in compliance with Regulaton S or pursuant to another
exempton from the registraton requirements of the US Securites Act.
In connecton with the Ofering, we have granted DBS Bank Ltd., as the
stabilising manager (the “Stabilising Manager”), on behalf of the Joint
Issue Managers, Bookrunners and Underwriters, the Over-allotment Opton
exercisable by the Stabilising Manager, in whole or in part, on its own behalf
and on behalf of the Joint Issue Managers, Bookrunners and Underwriters, on
one or more occasions, during the period commencing from the Listng Date
untl the earlier of (i) the date falling 30 days from the Listng Date; or (ii) the
date when the Stabilising Manager (or persons actve on its behalf) has bought
on the SGX-ST an aggregate of 3,280,000 Shares, representng not more than
10% of the Ofering, to undertake stabilising actons. Pursuant to the Over-
allotment Opton, the Stabilising Manager may subscribe and/or procure
subscribers for up to an aggregate of 3,280,000 Additonal Shares (which in
aggregate is not more than 10% of the Ofering) at the Ofering Price solely to
cover the over-allotment of Shares, if any. The total number of issued Shares
immediately afer the completon of the Ofering (and prior to the exercise of
the Over-allotment Opton) will be 256,225,334 Shares. If the Over-allotment
Opton is exercised in full, the total number of issued Shares immediately afer
the completon of the Ofering will be 259,505,334 Shares.
A copy of this Prospectus has been lodged with and registered by the Monetary
Authority of Singapore (the “Authority”) on 21 November 2014 and 4 December
2014, respectvely. The Authority assumes no responsibility for the contents of
this Prospectus. Registraton of this Prospectus by the Authority does not imply
that the Securites and Futures Act (Chapter 289) of Singapore, or any other
legal or regulatory requirements, have been complied with. The Authority has
not, in any way, considered the merits of our existng issued Shares, the New
Shares, the Cornerstone Shares, the Opton Shares, the Award Shares or the
Additonal Shares, as the case may be, being ofered for investment. We have
not lodged or registered this Prospectus in any other jurisdicton.
No Shares shall be alloted and/or allocated on the basis of this Prospectus
later than six (6) months afer the date of registraton of this Prospectus by
the Authority.
Investng in our Shares involves risks which are described in the secton
enttled “Risk Factors” of this Prospectus.
We are an Internet-based investment products distribution and administration platform with assets
under administration (AUA) of approximately S$5.13 billion as at end September 2014.
Headquartered in Singapore, we are also present in Hong Kong, Malaysia and China.
Incorporated in year 2000 in Singapore, we first launched Fundsupermart.com,
our Business-to-Consumer (B2C) website targeted at DIY investors.
Fundsupermart.com has approximately S$1.32 billion in AUA as at end September 2014.
In 2002, we launched our Business-to-Business (B2B) platform to cater to the specialised needs of
financial advisory (FA) companies and financial institutions.
Over 150 FA companies and financial institutions, and more than 5,000 FA representatives,
use our B2B platform.
We distribute over 1,800 Investment Products (including more than 1,600 funds) and provide a
comprehensive range of services, including:
the execution of investment transactions
IT services and software tools
research and investment trainings
backroom functions
Corporate Profile
iFAST Financial (B2B Business) Fundsupermart.com (B2C Business)
iFAST Corporation Ltd.
(Company Registration Number: 200007899C)
10 Collyer Quay,
#26-01 Ocean Financial Centre,
Singapore 049315
Phone: +65 6535 8033
Email Address: [email protected]
www.ifastcorp.com
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PROSPECTUS DATED 4 DECEMBER 2014
(Registered by the Monetary Authority of Singapore on 4 December 2014)
Ofering in respect of 32,800,000 New Shares (subject to the Over-allotment Opton
as defned herein) comprising:
(i)
2,800,000 Public Ofer Shares at S$0.95 for each Public Ofer Share by way of the Public
Ofer; and
(ii) 30,000,000 Placement Shares at S$0.95 for each Placement Share by way of the Placement,
payable in full on applicaton.
iFAST Corporation Ltd.
(Company Registraton Number: 200007899C)
(Incorporated in the Republic of Singapore on 11 September 2000)
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