(03) xyec offer document (clean).pdf
TRANSCRIPT
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LeVeragingtHe groWtHOF ENGINEERINGAND IT SERVICES
oer doCUMent dated 11 septeMber 2013(Registered by the Singapore Exchange Securities Trading Limited(the sgX-st), acting as agent on behal o the Monetary Authority oSingapore (the auh) on 11 September 2013)
THIS OFFER IS MADE IN OR ACCOMPANIED BY AN OFFERDOCUMENT (THE oer doCUMent) THAT HAS BEENREGISTERED BY THE SGX-ST, ACTING AS AGENT ONBEHALF OF THE AUTHORITY ON 11 SEPTEMBER 2013.THE REGISTRATION OF THIS OFFER DOCUMENT BY THESGX-ST ON BEHALF OF THE AUTHORITY DOES NOT IMPLYTHAT THE SECURITIES AND FUTURES ACT (CHAPTER 289)OF SINGAPORE, OR ANY OTHER LEGAL OR REGULATORY
REQUIREMENTS, OR REQUIREMENTS UNDER THE SGX-STSLISTING RULES, HAVE BEEN COMPLIED WITH.
th cum m. i u u h c u hul k, u hul cul u ll,fcl, x h l v().
PrimePartners Corporate Finance Pte. Ltd. (the s) hasmade an application to the SGX-ST or permission to deal in,and or quotation o, all the ordinary shares (the sh) inthe capital o Xyec Holdings Co., Ltd. (the Cm) alreadyissued, the new Shares which are the subject o this Placement(the plcm sh), the PPCF Shares (as defned herein)and the new Shares which may be issued upon the exercise othe options granted or to be granted under the Stock OptionScheme (the o sh) on Catalist (as defned herein).Acceptance o applications will be conditional upon, inter alia,issue o the Placement Shares and permission being grantedby the SGX-ST or the listing and quotation o all our existing
issued Shares, the Placement Shares, the PPCF Shares andthe Option Shares on Catalist. Monies paid in respect o anyapplication accepted will be returned i the admission andlisting do not proceed. The dealing in and quotation o theShares will be in Singapore dollars.
Companies listed on Catalist may carry higher investment riskwhen compared with larger or more established companieslisted on the Main Board o the SGX-ST. In particular, companiesmay list on Catalist without a track record o proftability andthere is no assurance that there will be a liquid market in theShares traded on Catalist. You should be aware o the riskso investing in such companies and should make the decisionto invest only ater careul consideration and, i appropriate,consultation with your proessional adviser(s).
Neither the Authority nor the SGX-ST has examined or approvedthe contents o this Oer Document. Neither the Authority
nor the SGX-ST assumes any responsibility or the contentso this Oer Document, including the correctness o any othe statements or opinions made or reports contained in thisOer Document. The SGX-ST does not normally review theapplication or admission to Catalist but relies on the Sponsorconfrming that our Company is suitable to be listed andcomplies with the Catalist Rules (as defned herein). Neitherthe Authority nor the SGX-ST has in any way considered themerits o the Shares being oered or investment.
We have not lodged this Oer Document in any other jurisdiction.
iv u sh vlv k whch c h c l rk c h o dcum.
a h x x mh m h h o dcum, hll mk u sh, ll, u ll u sh, h h o dcum; fc quvl
m u Cm wll uh mh u sh h llm, u l u sh, h h o dcum.
XyeC HoLdings Co., Ltd.(Company Registration Number: 0104-01-058968)
(Incorporated in Japan as a stock corporation (kabushiki kaisha)withlimited liability on 9 September 2005)
plcm 25,000,000 plcm
sh s$0.26 ch plcmsh, l ull lc
M, s plcm a
priMepartners Corporate inanCe pte. Ltd.(Company Registration No.: 200207389D)
(Incorporated in the Republic o Singapore)
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Corporate proiLe
Xc Hl C., L. provides engineering and IT consultancy andservices or major manuacturing industries in Japan. We have more than900 experienced sotware engineers. We provide engineering servicesto major manuacturing industries in Japan, such as the automobile andaerospace industries, and IT consultancy and services to companies in awide range o industries, including the IT and telecommunications industriesin Japan. Our customers include afliate companies o the Fujitsu group,
the Hitachi group, the Toyota group, and Denso group.
CoMpetitiVe strengtHs
1. W ha an xpncd manamnam wh a n ack cdf wkn h n pccf n Majority o our management members each
have more than 20 years o experience in theEngineering Services industry and IT industry.
Extensive experience in the Engineering
Services and IT industries, long termteamwork and the close relationships andnetworks which they have orged over theyears are key to the continued growth oour Group.
2. W a ab pd acmphn an f c andaby c- c Our wide range o business-related sotware
development services or companies in avariety o industries, allow us to satisy theIT requirements o our customers.
Able to leverage one line o our business tocross-sell other lines o business and serviceoerings.
Able to diversiy our business across a widevariety o industries, enabling us to ridethrough dierent business cycles o dierentindustries.
3. W pd n qay c Stringent quality assurance system in our
operations and processes.
Invest in training programmes or employees.
Have received several ISO accreditations.
4. W ha dpd nanhp wh cmhh c qay Established close working relationships with
customers.
Keep ourselves updated on customersproduct, technological and businessdevelopments to better understand their
requirements, in order to provide highervalue-added services.
Established operations and branch ofcesnear to customers in locations such as theAichi, Ishikawa, Okinawa, Osaka, Shizuoka,and Fukuoka Preectures, in Japan, andBangkok, Thailand.
Sales rom repeat customers accounted orapproximately 87% o total sales in the PeriodUnder Review.
5. W a ab aac and ankd nn Most o our employees have been with us or
more than fve years.
Relatively low sta turnover ratio that is belowthe industry average.
Employee benefts programme in place tolook ater our employees well-being.
6. F ach f bn mn, wha w-knwn and w-abhdMNC a cm ba Customers include afliate companies o the
Fujitsu group, the Hitachi group, and theToyota group. Such reputable MNCs enableus to keep up-to-date with market trends and
technological developments as well as testiyto our high service and product standards.
oUr bUsiness
eNgiNeeriNgserviCes
itserViCes
itsolutioNs
Business-related sotwaredevelopment or companies ina variety o industries, such asautomobile, IT, telecommunications,logistics and other manuacturingindustries, in accordance with ourcustomers requirements and or areassuch as customer relationship, andsupply chain management systemsand databases
Sotware development o automobileelectronic control units (eCU)
Computer aided engineering (Cae)services, which involves the design,analysis and testing o automobile andaerospace hardware components
ERP Consultancy Servicesto customers mainly in thetechnology and IT industries. Inaddition, we also sell and assistour customers in implementingour Elizea attendancemanagement sotware
Design, development and sale oour proprietary production andsales administration sotware,UNIMEX II and QuickOne
Our comprehensive range of services allows us to leverage one line of our business to cross-sellother lines of business and service offerings.
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gDP wth in Japan andlbally IT investments tend to
fuctuate in tandem with GDP.
Pump-priming measures bythe Japanese governmentsince December 2012.
IT investment in Japanexpected to increase in 2013due to last minute demandbeore consumption tax israised in April 2014.
u f eCu andmbddd ftwa inth atmbil indty Increasing proportion o car
electronics in the cost o anautomobile body, with carelectronics system expectedto constitute 40% o theautomobile body cost in 2015.
Development in the use oECU and embedded sotwarein the automobile industry.
Focus on model based design importance o sotware as anautomobile component, andin simulation in the early stageo product development.
Japanese automobilemanuacturers may strengthentheir global competitiveness,which may boost demand or
ECU and embedded sotware.
expanin f thJapan manfactinindty int vamakt Manuacturing companies
in Japan are expanding intooverseas markets.
Japanese companies involvedin the business o sotwaredevelopment have space orgrowth in overseas markets.
gwth in machiny-latd CAD/CAM/CAe makt in Japan tcntin The CAE market is expected
to grow by 12% in 2014due to the recovery o theautomobile and electric
appliance industries and theincreasing use o CAE bymanuacturers.
The machinery-related CAD/CAM/CAE market in Japanis expected to grow 12%and 11% in 2014 and 2015,respectively.
gwth in th erPpacka makt The ERP market is expected
to grow by 9.9% and 8.6% in2014 and 2015, respectively,due to the replacement ooutdated ERP systems witho-the-shel ERP systemsand the implementation oERP systems or the overseasoperations o Japanesecompanies.
indUstrydriVers & prospeCts Source: Industry Report by Yano Research Institute.
Well-Known and
Well-Established MNCs
as Our Customer Base
proposeddiVidends
We intend to pay
diVidends o 20%
o oUr net proit
ater taX to oUr
sHareHoLders or
y2014, y2015 and
y2016.
pv hh vlu-
vc h hcm, :
undertaking more complicatedprojects in Engineering Servicesand IT Services businesssegments; and
increasing the portolio or ITSolutions business segmentwhere margins are relativelyhigher.
w
groWtH strategies
tk v jc
u ch uh u m h x c ugu, c-ll uu vc .
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ov 900expincd
sftwa enin
inanCiaL HigHLigHts (Financial Year ended 31 March)
UtUre pLans
gw xitin bin mnt Expand Engineering Services business,
including developing sotware orAutomobile ECUs, CAE and CAD/CAM,and develop our proprietary sotware orAutomobile ECUs or the local automobilemakers in the PRC and in ASEANcountries.
Diversiy IT Services client portolio toinclude SMEs and expand the range o ourservice oerings using new technologies,such as open source inrastructureservices, cloud computing and thin clientcomputing.
Leverage on our growing customer baseand growing market reputation andincrease marketing eorts to target SMEsor our ERP Consultancy Services andother IT Solutions services.
Upgrade our proprietary sotwareUNIMEX II and Elizea, expandconsultancy and implementation servicesor Two-Tier ERP to new markets anddevelop new business-related and CRMsotware.
Dvlp nw capabiliti and nwbin mnt Establish a research and development
(r&d) unction and invest in a R&D
acility. Establish our own data centre rom which
we can host IT systems, networks andservers to aid in the delivery o our cloudcomputing and inormation securityservices.
expand thh nw lcatin,m and acqiitin, jintvnt and/ tatic allianc Establish an oce in Singapore to
support R&D initiatives and as a regionalsales oce or Southeast Asia.
Invest in or acquire companies whichhave expertise in IT network services,web sotware development, inormationsecurity, database, cloud computing and
sotware engineering service providers. Through Kowamex (Thailand), expand
customer base o Japanese automobilemakers and other manuacturingcompanies operating in Thailand, andthereore expand into Southeast Asia.
mll y2011 y2012 y2013
rvu 4,838s$75
5,583
s$896,225
s$93
g f 913s$14
1,162
s$181,367
s$20
o f 92s$1.4
235
s$3.7187(1)
s$2.8(1)
n f mcu
83
s$1.3162
s$2.682(2)
s$1.2(2)
FY2011 FY2012 FY2013
rvu bu sm (%)
14.5
44.0
41.5
15.2
41.3
13.5
Engineering ServicesIT ServicesIT solutions43.5
43.3
43.2
g pf g pf M (m)
CAGR: 22.4%
FY2011 FY2012 FY2013
913
18.9%
1,162
1,367
20.8%22.0%
Gross Prot Gross Prot Margin (1) Ater deducting approximately JPY86 mil o listing expenses(2) Ater deducting approximately JPY53 mil o listing expenses net o tax.
Note: Based on the average exchange rates o JPY64.31, JPY63.03, and JPY66.84 to S$1.00or FY2011, FY2012, and FY2013 respectively.
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Page
CORPORATE INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
GLOSSARY OF TECHNICAL TERMS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
CAUTIONARY NOTE ON FORWARD-LOOKING STATEMENTS . . . . . . . . . . . . . . . . . . . 14
SELLING RESTRICTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
DETAILS OF THE PLACEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
LISTING ON CATALIST . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
INDICATIVE TIMETABLE FOR LISTING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
PLAN OF DISTRIBUTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
INTERESTS OF MANAGER, SPONSOR AND PLACEMENT AGENT . . . . . . . . . . . . . . 24
OFFER DOCUMENT SUMMARY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
OUR COMPANY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
OUR BUSINESS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
OUR COMPETITIVE STRENGTHS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
OUR PROSPECTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
OUR GROWTH STRATEGY AND FUTURE PLANS. . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
OUR CONTACT DETAILS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
SUMMARY OF OUR FINANCIAL INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
THE PLACEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
EXCHANGE RATES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
RISK FACTORS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
RISKS RELATING TO OUR INDUSTRY AND OUR BUSINESS. . . . . . . . . . . . . . . . . . . 31
RISKS RELATING TO OWNERSHIP OF OUR SHARES . . . . . . . . . . . . . . . . . . . . . . . . 38
ISSUE STATISTICS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
USE OF PROCEEDS AND LISTING EXPENSES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45USE OF PROCEEDS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
LISTING EXPENSES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
DIVIDEND POLICY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
SHARE CAPITAL. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
SHAREHOLDERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
SHAREHOLDING AND OWNERSHIP STRUCTURE . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
SIGNIFICANT CHANGES IN PERCENTAGE OF OWNERSHIP. . . . . . . . . . . . . . . . . . . 54
MORATORIUM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
TABLE OF CONTENTS
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CAPITALISATION AND INDEBTEDNESS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
WORKING CAPITAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
DILUTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
GROUP STRUCTURE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
SELECTED CONSOLIDATED FINANCIAL INFORMATION . . . . . . . . . . . . . . . . . . . . . . . 64
RESULTS OF OPERATIONS OF OUR GROUP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
FINANCIAL POSITION OF OUR GROUP. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
MANAGEMENTS DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND
FINANCIAL POSITION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
OVERVIEW. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
RESULTS OF OPERATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71REVIEW OF PAST PERFORMANCE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
REVIEW OF FINANCIAL POSITION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
LIQUIDITY AND CAPITAL RESOURCES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84
CAPITAL EXPENDITURES AND DIVESTMENTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86
FOREIGN EXCHANGE MANAGEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86
INFLATION OR DEFLATION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88
SIGNIFICANT CHANGES IN ACCOUNTING POLICIES. . . . . . . . . . . . . . . . . . . . . . . . . 88
GENERAL INFORMATION ON OUR GROUP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 91HISTORY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 91
BUSINESS OVERVIEW . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93
OUR MAJOR CUSTOMERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 99
OUR MAJOR SUPPLIERS AND/OR SUB-CONTRACTORS. . . . . . . . . . . . . . . . . . . . . . 101
CREDIT POLICY. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102
INVENTORY MANAGEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 104
QUALITY ASSURANCE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 104
SALES AND MARKETING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 105
INSURANCE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 107
INTELLECTUAL PROPERTY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 108
LICENCES AND PERMITS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 108
STAFF TRAINING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 109
COMPETITION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 110
COMPETITIVE STRENGTHS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 111
SEASONALITY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 113
PROPERTIES AND FIXED ASSETS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 113
TABLE OF CONTENTS
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AWARDS AND CERTIFICATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 119
INDUSTRY OVERVIEW . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 120
PROSPECTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 127
OUR GROWTH STRATEGY AND FUTURE PLANS . . . . . . . . . . . . . . . . . . . . . . . . . . . . 129
ORDER BOOK . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 131
TREND INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 131
INTERESTED PERSON TRANSACTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 133
ON-GOING INTERESTED PERSON TRANSACTIONS . . . . . . . . . . . . . . . . . . . . . . . . . 133
GUIDELINES AND REVIEW PROCEDURES FOR ON-GOING AND FUTURE
INTERESTED PERSON TRANSACTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 134
POTENTIAL CONFLICT OF INTERESTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 135
INTERESTS OF EXPERTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 137
INTERESTS OF MANAGER, SPONSOR AND PLACEMENT AGENT . . . . . . . . . . . . . . 138
DIRECTORS, MANAGEMENT AND STAFF . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 139
DIRECTORS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 139
EXECUTIVE OFFICERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 144
MANAGEMENT REPORTING STRUCTURE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 147
EMPLOYEES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 148
REMUNERATION OF DIRECTORS, EXECUTIVE OFFICERS AND RELATEDEMPLOYEES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 149
SERVICE AGREEMENTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 150
XYEC EMPLOYEE STOCK SCHEMES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 153
SGX-ST REQUIREMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 163
RATIONALE FOR PARTICIPATION OF OUR NON-EXECUTIVE DIRECTORS . . . . . . . 163
COST OF STOCK OPTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 163
DISCLOSURES IN ANNUAL REPORTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 163
CORPORATE GOVERNANCE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 165
DESCRIPTION OF ORDINARY SHARES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 173
EXCHANGE CONTROLS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 178
TAXATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 180
CLEARANCE AND SETTLEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 184
TRADING, SETTLEMENT AND REGISTRATION OF SHARES . . . . . . . . . . . . . . . . . . 184
VOTING RIGHTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 184
VOTING INSTRUCTIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 185
CLEARING FEES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 185
TABLE OF CONTENTS
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GENERAL AND STATUTORY INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 186
INFORMATION ON DIRECTORS AND EXECUTIVE OFFICERS . . . . . . . . . . . . . . . . . . 186
SHARE CAPITAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 188
ARTICLES OF INCORPORATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 188
MATERIAL CONTRACTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 188
LITIGATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 189
MANAGEMENT AND PLACEMENT ARRANGEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . 189
MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 191
CONSENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 193
RESPONSIBILITY STATEMENT BY OUR DIRECTORS. . . . . . . . . . . . . . . . . . . . . . . . . 194
DOCUMENTS FOR INSPECTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 194
APPENDIX A INDEPENDENT AUDITORS REPORT ON THE CONSOLIDATED
FINANCIAL STATEMENTS OF XYEC HOLDINGS CO., LTD. AND
ITS SUBSIDIARIES FOR THE FINANCIAL YEARS ENDED
31 MARCH 2011, 2012 AND 2013 . . . . . . . . . . . . . . . . . . . . . . . . A-1
APPENDIX B COMPARISON BETWEEN SINGAPORE CORPORATE LAW AND
JAPAN CORPORATE LAW . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-1
APPENDIX C OUR ARTICLES OF INCORPORATION . . . . . . . . . . . . . . . . . . . . C-1
APPENDIX D COMPARISON BETWEEN OUR ARTICLES OF INCORPORATION
AND APPENDIX 4C OF THE CATALIST RULES . . . . . . . . . . . . . . D-1
APPENDIX E RULES OF THE STOCK OPTION SCHEME AND COMPLIANCE
CHECKLIST FOR THE ORIGINAL RULES OF XYEC EMPLOYEE
STOCK OPTION SCHEME AND RULES OF THE STOCK OPTION
SCHEME . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . E-1
APPENDIX F TERMS, CONDITIONS AND PROCEDURES FOR APPLICATION
AND ACCEPTANCE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-1
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BOARD OF DIRECTORS : Manabu Kobayashi (Executive Chairman, President and CEO)
Tatsushi Oshimi (Vice-President and Executive Director)
Minoru Funakoshi (Non-Executive Director)
Norio Ogiwara (Non-Executive Director)
Susumu Hanada (Lead Independent Director)
Yukihiro Shida (Independent Director)
Tan Poh Chye Allan (Independent Director appointment
subject to approval by Shareholders in a general meeting to be
held by 16 September 2013)
STATUTORY AUDITORS
(KANSAYAKU)
REPRESENTATIVE
DIRECTORS (DAIHYOTORISHIMARIYAKU)
: Kinji Adachi (Full time Statutory Auditor)
Yuji Imai (Part time Outside Statutory Auditor)
Junko Shirakawa (Part time Outside Statutory Auditor)
Manabu Kobayashi
Tatsushi Oshimi
REGISTERED OFFICE : 4-15, Konan 2-chome
Minato-ku, Tokyo
Japan
MANAGER, SPONSOR
AND PLACEMENT AGENT
: PrimePartners Corporate Finance Pte. Ltd.
20 Cecil Street
#21-02 Equity Plaza
Singapore 049705
INDEPENDENT AUDITORS
AND REPORTING
ACCOUNTANTS
: Ernst & Young ShinNihon LLC
Hibiya Kokusai Building, 2-2-3 Uchisaiwai-cho
Chiyoda-ku, Tokyo 100-0011
Japan
Partner-in-charge: Shinichiro Suzuki
Certified Public Accountants, Japan
INDUSTRY EXPERT : Yano Research Institute Ltd.
2-46-2 Honcho Nakano-ku
Tokyo, Japan
SOLICITORS TO THE
PLACEMENT AND LEGAL
ADVISER TO OUR
COMPANY ON
SINGAPORE LAW
: RHTLaw Taylor Wessing LLP
Six Battery Road
#10-01
Singapore 049909
LEGAL ADVISER TO OUR
COMPANY ON JAPAN
LAW
: Anderson Mori & Tomotsune
Akasaka K-Tower, 2-7 Motoakasaka 1-chome
Minato-ku, Tokyo 107-0051
Japan
CORPORATE INFORMATION
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LEGAL ADVISER TO OUR
COMPANY ON THAILAND
LAW
: Siam City Law Offices Limited
Rajanakarn Building, 20th Floor
183 South Sathorn Road, Yannawa
Sathorn, Bangkok 10120, Thailand
JAPAN SHARE
REGISTRAR
: Mitsubishi UFJ Trust and Banking Corporation
4-5 Marunouchi 1-chome
Chiyoda-ku, Tokyo
100-8212 Japan
SINGAPORE SHARE
REGISTRAR, TRANSFER
AGENT AND COLLATION
AGENT
: Boardroom Corporate & Advisory Services Pte. Ltd.
50 Raffles Place
#32-01 Singapore Land Tower
Singapore 048623
PRINCIPAL BANKER : Bank of Tokyo-Mitsubishi UFJ
Yotsuya Commercial Banking Office
2-1, Yotsuya 3-chome
Shinjuku-ku, Tokyo
160-0004, Japan
RECEIVING BANKER : The Bank of East Asia, Limited
60 Robinson Road
BEA Building
Singapore 068892
CORPORATE INFORMATION
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In this Offer Document and the accompanying Application Forms, unless the context otherwise
requires, the following definitions apply throughout where the context so admits:
Companies within our Group
ACLOX : ACLOX Co., Ltd., a company incorporated in Japan on
26 September 2007 and a wholly-owned subsidiary of our
Company
Company : Xyec Holdings Co., Ltd., a company incorporated in Japan on
9 September 2005
em-kei : em-kei Co., Ltd., a company incorporated in Japan on 8 July
1988 and a wholly-owned subsidiary of our Company
Group or GroupCompanies : Our Company and our Subsidiaries as at the date of this OfferDocument
Kowamex : Kowamex Co., Ltd., a company incorporated in Japan on
12 December 2006 and a wholly-owned subsidiary of our
Company
Kowamex (Thailand) : Kowamex (Thailand) Co., Ltd., a company incorporated in
Thail and on 22 June 2012 in whi ch Kowamex has a
shareholding interest of 48.99% and also exercises
management control
Neutral : Neutral Co., Ltd., a company incorporated in Japan on 24March 2000 and a wholly-owned subsidiary of our Company
NIHON UNITEC : NIHON UNITEC Co., Ltd., a company incorporated in Japan
on 26 May 1984 and a wholly-owned subsidiary of our
Company
NT Solutions : NT Solutions Co., Ltd., a company incorporated in Japan on 1
April 2009 and a wholly-owned subsidiary of our Company
Sial System : Sial System Co., Ltd., a company incorporated in Japan on 1
April 2001 and a wholly-owned subsidiary of our Company
Subsidiaries : The subsidiaries of our Group, namely ACLOX, Kowamex,
Kowamex (Thailand), em-kei, Neutral, NIHON UNITEC, NT
Solutions and Sial System
Other Companies, Organisations and Agencies
Authority : Monetary Authority of Singapore
CDP or Depository : The Central Depository (Pte) Limited
City Soken : City Soken Co., Ltd.
DEFINITIONS
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CPF : Central Provident Fund
Denso Techno : Denso Techno Co., Ltd., a wholly-owned subsidiary of Denso
Corporation Ltd, which in turn is 22.3% owned by Toyota
Motor Corporation as at 31 March 2013
ESHA : Xyec Holdings Employee Stock Holding Association, a
partnership (kumiai) formed under the Civil Code of Japan, by
the employees of the Company on 1 March 2007
FA Service : FA Service Co., Ltd., a wholly-owned subsidiary of our Group
which was disposed of on 30 September 2012
Former Xyec Holdings : The Japanese company named Xyec Holdings Co., Ltd.,
formed in November 2005 in a merger of Neutral and three
other Japanese companies, and merged with our Company inan Absorption-Type Merger in December 2006
Gifu Auto Body : Gifu Auto Body Co., Ltd.
Kowa Sekkei : Kowa Sekkei Co., Ltd.
Mamezou : Mamezou Holdings Co., Ltd., a company listed on the Tokyo
Stock Exchange and our Controlling Shareholder.
Manager, Sponsor,
Placement Agent or
PPCF
: PrimePartners Corporate Finance Pte. Ltd.
Receiving Bank : The Bank of East Asia, Limited
SCCS : Securities Clearing & Computer Services (Pte) Ltd
SGX-ST : Singapore Exchange Securities Trading Limited
Share Registrar : Boardroom Corporate & Advisory Services Pte. Ltd.
General
AGM : Annual general meeting of Shareholders
Application Forms : The off icial printed appl ication forms to be used for the
purpose of the Placement and which form part of this Offer
Document
Application List : The list of applications for the subscription of the Placement
Shares
Articles or Articles of
Incorporation
: The articles of incorporation of our Company, as amended,
supplemented or modified from time to time
DEFINITIONS
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Associate : (a) In relat ion to any director, chief executive off icer,
substantial shareholder or controlling shareholder (being
an individual) means:
(i) his immediate family;
( ii ) the trustees, acting in their capacity as such
trustees, of any trust of which he or his immediate
f amily is a beneficiary or, in the case of a
discretionary trust, is a discretionary object; and
(iii) any company in which he and his immediate family
together (directly or indirectly) have an interest of
30.0% or more of the total votes attached to all the
voting shares; and
(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 fellow subsidiary of any such holding company or one
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
Associated Company : In relation to a corporation, means:
(a) any corporation in which the corporation or its subsidiary
has, or the corporation and its subsidiary together have,
a direct interest of not less than 20.0% but not more than
50.0% of the aggregate of the total votes attached to all
the voting shares; or
( b) any corporation, other t han a subsidiar y of t he
corporation or a corporation which is an associated
company by virtue of paragraph (a), the policies of which
the corporation or its subsidiary, or the corporation
together with its subsidiary, is able to control or influence
materially
Audit Committee : The audit committee of our Company as at the date of this
Offer Document, unless otherwise stated
Board or Board of
Directors
: The board of Directors of our Company as at the date of this
Offer Document, unless otherwise stated
Board of Statutory
Auditors
(kansayakukai)
: Our Companys board of Statutory Auditors
Catalist : The sponsor-supervised listing platform of the SGX-ST
DEFINITIONS
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Catalist Rules : The rules in the SGX-ST Listing Manual Section B: Rules of
Catalist, as amended, supplemented or modified from time to
time
CDP Depositors : Depositors holding Shares under a direct account with CDP or
a securities sub-account with a Depository Agent (as defined
in section 130A of the Singapore Companies Act)
CEO : Chief executive officer
Controlling Shareholder : In relation to a corporation, means:
(a) a person who has an interest in the voting shares of a
corporation and who exercises control over the
corporation; or
(b) a person who has an interest of 15.0% or more of the
aggregate of the total votes attached to all the voting
shares in a corporation, unless he does not exercise
control over the corporation
Director : A director of our Company as at the dat e of t his Off er
Document
Entity at Risk : (a) The Company; (b) a subsidiary of the Company that is not
listed on the SGX-ST or an approved exchange; or (c) an
Associated Company that is not listed on the SGX-ST or an
approved exchange, provided that our Group or our Groupand our Interested Person(s), has control over the Associated
Company
EPS : Earnings per Share
Executive Directors : The executive Directors of our Company as at the date of this
Offer Document, unless otherwise stated
Executive Officers : The executive officers of our Company as at the date of this
Offer Document, who are also key executives as defined
under the Securities and Futures (Offers of Investments)
(Shares and Debentures) Regulations 2005, unless otherwise
stated
FY : Financial year ended or, as the case may be, ending 31 March
Independent Directors : The independent Directors of our Company as at the date of
this Offer Document, unless otherwise stated, including Tan
Poh Chye Allan whose appointment is subject to approval by
Shareholders in a general meeting to be held by 16
September 2013
DEFINITIONS
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Interested Person : ( a) A dir ect or, chi ef exec utive officer or Cont rolli ng
Shareholder of the Company; or
(b) an Associate of any such director, chief executive officer
or Controlling Shareholder
Interested Person
Transaction
: Means a transaction between an Entity at Risk and an
Interested Person
Issued Share Capital : Save where otherwise stated in this Offer Document, means
the total number of Shares that is in issue but excludes
treasury Shares
Japan Companies Act : The Companies Act of Japan, as amended, supplemented or
modified from time to time
Latest Practicable Date or
LPD
: 19 August 2013, being the latest practicable date before the
lodgment of this Offer Document with the SGX-ST
Listing : The listing of our Company and the quotation of our Shares on
Catalist
Listing Manual : SGX-ST Listing Manual Section B: Rules of Catalist, as
amended, supplemented or modified from time to time
Management Agreement : The full sponsorship and management agreement entered
into between our Company and PPCF pursuant to which
PPCF shall sponsor and manage the Listing, details asdescribed in the sections entitled Plan of Distribution and
General and Statutory Information Management and
Placement Arrangements of this Offer Document
Market Day : A day on which the SGX-ST is open for trading in securities
MNC : Multinational companies
NAV : Net asset value
Nominating Committee : The nominating committee of our Company as at the date of
this Offer Document, unless otherwise stated
Non-Executive Directors : The non-executive Directors of our Company (including the
Independent Directors) as at the date of this Offer Document,
unless otherwise stated
NTA : Net tangible assets, calculated as total assets less total
liabilities and any intangible assets
Offer Document : This offer document dated 11 September 2013 issued by our
Company in respect of the Placement
DEFINITIONS
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Option(s) : The option(s) which have been or which may be granted
pursuant to the Stock Option Scheme
Option Shares : The new Shares which may be allotted and issued upon
exercise of the Options
PER : Price earnings ratio
Period Under Review : The period which comprises FY2011, FY2012 and FY2013
PRC : Peoples Republic of China
Placement : The placement of the Placement Shares by the Placement
Agent on behalf of our Company for subscription at the
Placement Price subject to and on the terms and conditions as
set out in this Offer Document
Placement Agreement : The placement agreement between our Company and PPCF
pursuant to which PPCF agreed to procure subscriptions for
the Placement Shares at the Placement Price as described in
the sections entitled Plan of Distribution and General and
Statutory Information Management and Placement
Arrangements of this Offer Document
Placement Price : S$0.26 for each Placement Share
Placement Shares : The 25,000,000 new Shares for which our Company invites
applications to subscribe for pursuant to the Placement,subject to and on the terms and conditions set out in this Offer
Document
PPCF Shares : The 1,150,000 new Shares to be issued and allotted to PPCF
by our Company as part of PPCFs fees as the Manager and
Sponsor
Promoters : (a) Controlling Shareholders and their Associates; and (b)
Executive Directors with an interest of 5.0% or more of the
Issued Share Capital of our Company at the time of listing
Relevant Period : The period which comprises FY2011, FY2012, FY2013, andfrom 1 April 2013 to the Latest Practicable Date
Remuneration Committee : The remuneration committee of our Company as at the date of
this Offer Document, unless otherwise stated
R&D : Research and development
Securities Account : The 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
DEFINITIONS
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Service Agreements : The service agreements entered into between our Company
and each of Manabu Kobayashi, Tatsushi Oshimi and Takeshi
Hosaka, as described in the section entitled Directors,
Management and Staff Service Agreements of this Offer
Document
SFR : The Securities and Futures (Offers of Investments) (Shares
and Debentures) Regulations 2005 of Singapore, as
amended, supplemented or modified from time to time
Share(s) : Ordinary share(s) in the capital of our Company
Shareholder(s) : Registered holders of Shares, except where the registered
holder is CDP, the term Shareholder shall, in relation to such
Shares mean the Depositors whose Securities Accounts are
credited with Shares
Singapore : The Republic of Singapore
Singapore Companies Act : The Companies Act (Chapter 50) of Singapore, as amended,
supplemented or modified from time to time
Stock Option Scheme : The Xyec Employee Stock Option Scheme, first implemented
in 2006, as approved by our Shareholders, and amended to
be compliant with Chapter 8 Part VIII of the Catalist Rules,
approved by a majority of our Shareholders on 25 June 2013.
Please refer to Appendix E Rules of the Stock Option
Scheme and Compliance Checklist for the Original Rules ofXyec Employee Stock Option Scheme and Rules of the Stock
Option Scheme for more details
Sub-Division : Sub-division of each Share into 3,000 Shares, approved by
our Board of Directors in April 2013 and effected on 16 May
2013 with a record date of 31 March 2013
Subsidiary : A company in which shares of an amount exceeding 50.0% of
its paid-up capital are held directly or indirectly by our
Company, or a company in which we hold less than 50.0% of
its paid-up capital but in which we exercise management
control
Substantial Shareholders : Persons who have an interest in one or more voting shares,
and the total votes attaching to that share or those shares
representing not less than 5.0% of the total votes attaching to
all the voting shares in our Company
Currencies, Units and Others
JPY : Japanese yen
SGD, S$ and cents : Singapore dollars and cents respectively
DEFINITIONS
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THB : Thai baht
USD : United States dollars
% or per cent. : Per centum
Certain Japanese names and terms have been translated into English. Such translations are
provided solely for the convenience of Singapore-based investors, may not have been registered
with the relevant Japanese authorities and should not be construed as representations that the
English names and terms actually represent the Japanese names and terms.
The expression business trust has the same meaning ascribed to it in Section 2 of the Business
Trusts Act (Chapter 31A) of Singapore.
The expression Entity includes a corporation, an unincorporated association, a partnership and
the government of any state, but does not include a trust.
The expressions Depositor, Depository Agent and Depository Register shall have the
meanings ascribed to them respectively in Section 130A of the Singapore Companies Act.
References in this Offer Document to Appendix or Appendices are references to an appendix or
appendices respectively in this Offer Document.
Any discrepancies in tables included herein between the total sum of amounts listed and the totals
shown thereof are due to rounding. Accordingly, figures shown as totals in certain tables may not
be an arithmetic aggregation of the figures which precede them.
Words importing the singular shall, where applicable, include the plural and vice versaand words
importing the masculine gender shall, where applicable, include the feminine and neuter genders
and vice versa. References to persons shall include corporations.
Any reference in this Offer Document and the Application Forms to any statute or enactment is a
reference to that statute or enactment as for the time being amended or re-enacted.
Any word defined under the Singapore Companies Act, the SFA, SFR or any statutory modification
thereof and used in this Offer Document and the Application Forms shall, where applicable, have
the meaning ascribed to it under the Singapore Companies Act, the SFA, SFR or any statutory
modification thereto, as the case may be.
Any reference in this Offer Document and the Application Forms to Shares being allotted to an
applicant includes allotment to CDP for the account of that applicant.
Any reference to a time of day in this Offer Document and the Application Forms is a reference to
Singapore time unless otherwise stated.
Any reference in this Offer Document to the Group, we, our, us or their other grammatical
variations is a reference to our Company, or Group, or any member of our Group, as the context
requires.
Unless we indicate otherwise, all information in this Offer Document is presented on the basis ofour Group.
DEFINITIONS
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To facilitate a better understanding of the business of our Group, the following glossary provides
a description (which should not be treated as definitions of their meanings) of some of the
technical terms and abbreviations commonly used in our industry. The terms and their assigned
meanings may not correspond to standard industry or common meanings or usage of these terms:
3D : 3-dimensional
Absorption-Type Merger : A form of corporate reorganisation provided for in the Japan
Companies Act where one or more companies involved are
dissolved without a liquidation process, and a surviving
company assumes the rights and obligations of the dissolved
companies
Automobile ECUs : Automobile Electronic Control Units. An ECU is a generic term
for any embedded system that controls or regulates one or
more of the electronic system or sub-systems in anautomobile. The types of ECUs in an automobile include body
control modules (that control door locks, electric windows,
courtesy lights), electric power steering control units, human
machine interface, seat control units, speed control units,
brake control units and transmission control units
CAD/CAM : Computer Aided Design/Computer Aided Manufacturing,
which is the use of computer software to design and
manufacture machines, equipment and other products
CAE : Computer Aided Engineering, which is the broad usage ofcomputer software to aid in engineering tasks, and to analyse
the robustness and performance of components and
assemblies. It includes CAD/CAM and material requirements
planning
Cloud computing : The delivery or supply of computing resources as a service,
rather than a product, whereby shared resources, software
and data are provided to computers and other devices, as a
utility, over a public or private network
CRM : Cus tomer Relat ionship Management . A CRM syst emmanages a companys interactions with current and
prospective customers, through the use of technology to
organise, automate and synchronise sales, marketing,
customer service and technical support
Engineering Services : For the purpose of this Offer Document, the services which
our Group provides under our Engineering Services business
segment, details of which are set out in the section entitled
General Information on Our Group Business Overview
Our Business Segments (A) Engineering Services of this
Offer Document
GLOSSARY OF TECHNICAL TERMS
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ERP : Enterprise Resource Planning. A methodology for integrating
business applications such as finance, human resources and
order processing into a single system
ERP Consultancy
Services
: For the purposes of this Offer Document, the services which
our Group provides under our IT Solutions business segment,
details of which are set out in the section entitled General
Information on Our Group Business Overview Our
Business Segments (C) IT Solutions (i) ERP Consultancy
Services of this Offer Document
Incorporation-Type
Company Split
: A form of corporate reorganisation provided for in the Japan
Companies Act in which a company transfers all or part of its
rights and obligations to a newly established company. An
Incorporation-Type Company Split differs from the
incorporation of a new company and business transfer as (a)it is not necessary to take the steps of incorporation of a new
company and business transfer separately and (b) the
consent of third parties in relation to the transfer of obligations
is not required in principle for the Incorporation-Type
Company Split
IT Infrastructure : Information technology infrastructure, which is an integrated
set of hardware and software upon which an IT system
operates, includes data centres, computers, computer
networks, database management devices, and the
transmission media, including telephone lines and routers
IT Services : For the purposes of this Offer Document, the services which
our Group provides under our IT Services business segment,
details of which are set out in the section General Information
on Our Group Business Overview Our Business Segments
(B) IT Services of this Offer Document
IT Solutions : For the purposes of this Offer Document, the services which
our Group provides under our IT Solutions business segment,
details of which are set out in the section General Information
on Our Group Business Overview Our Business Segments (C) IT Solutions of this Offer Document
OEM : Or iginal Equipment Manufact ur er, whi ch includes a
manufacturer that purchases equipment from other
manufacturers and modifies or combines different
components for resale, and a manufacturer that manufactures
components or parts included in the finished product made by
another
OES : Original Equipment Supplier
GLOSSARY OF TECHNICAL TERMS
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Open source
infrastructure
: IT Infrastructure that is created using open source
programming, that is, any programme whose source code is
made available for use or modification as users or other
developers see fit
Outside Director (shagai
torishimariyaku)
: A director who is not, and has never been, a director with
executive duties, an executive officer, or an employee of our
Company or any of our Subsidiaries
Outside Statutory Auditor
(shagai kansayaku)
: A Statutory Auditor who has never been a director, an
accounting advisor (or a member of such an accounting
advisor), an executive officer, or an employee of our Company
or any of our Subsidiaries
Representative Director : Under the Japan Companies Act, at least one director is
required to be appointed from the board of directors of a stock
corporation, with the authority to do all acts pertaining to the
business of the stock corporation, on behalf of and in the
name of the stock corporation
SAP : Systems, Applications, and Products in Data Processing, and
an enterprise application software market leader
Statutory Auditor
(kansayaku)
: Our Companys statutory auditor
Supply chain
management
: The management of a network of interconnected businesses
involved in the provision of product and service packages
required by end customers in a supply chain. Supply chain
management spans across all movement and storage of raw
materials, inventory and finished goods from point of origin to
point of consumption
Thin client computing : A relatively low-cost form of computing that takes place in a
client-server environment, which main or sole function is to
process keyboard input and screen output and which
accesses most or all application programmes and data from a
central server via a network. Thin client computing isgenerally preferred in large establishments where a low total
cost of ownership is desirable
Two-Tier ERP : Enterprise Resource Planning software comprising software
and hardware that allows companies to run the equivalent of
two ERP systems at the same time: one at the corporate level,
and the other one at the division or subsidiary level
VOCS : Voice Ordering Communication Service
GLOSSARY OF TECHNICAL TERMS
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All statements contained in this Offer Document, statements made in press releases and oral
statements that may be made by us or our Directors, Executive Officers or employees acting on
our behalf, that are not statements of historical fact, constitute forward-looking statements. You
can identify some of these forward-looking statements by terms such as expects, believes,
plans, intends, estimates, anticipates, may, will, would and could or similar words.
However, you should note that these words are not the exclusive means of identifying
forward-looking statements. All statements regarding our expected financial position, business
strategies, plans and prospects are forward-looking statements.
These forward-looking statements, including without limitation, statements as to the following:
(a) our revenue and profitability;
(b) expected growth in demand;
(c) expected industry trends;
(d) anticipated expansion plans; and
(e) other matters discussed in this Offer Document regarding matters that are not historical fact,
are only predictions. These forward-looking statements involve known and unknown risks,
uncertainties and other factors that may cause our actual results, performance or achievements
to be materially different from any future results, performance or achievements expected,
expressed or implied by these forward-looking statements. These risks, uncertainties and other
factors include, among others:
(a) changes in political, social and economic conditions and the regulatory environment in Japan
in which we conduct the main bulk of our business;
(b) the risk that we may be unable to realise our anticipated growth strategies and expected
internal growth;
(c) changes in the availability and prices of human resource, materials and equipment which we
require for the operation of our business;
(d) changes in customers preferences;
(e) changes in competitive conditions and our ability to compete under such conditions;
(f) changes in our future capital needs and the availability of financing and capital to fund such
needs;
(g) changes in currency exchange rates; and
(h) other factors beyond our control.
Some of these risk factors are discussed in more detail in this Offer Document, in particular, but
not limited to, the discussions in the sections entitled Risk Factors and Managements
Discussion and Analysis of Results of Operations and Financial Position of this Offer Document.
CAUTIONARY NOTE ON FORWARD-LOOKING STATEMENTS
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All forward-looking statements attributable to us, or persons acting on behalf, contained in this
Offer Document are expressly qualified in their entirety by such factors. Those forward-looking
statements are applicable only as at the date of this Offer Document.
Given the risks and uncertainties that may cause our actual future results, performance or
achievements to be materially different from that expected, expressed or implied by the
forward-looking statements in this Offer Document, undue reliance must not be placed on these
statements which apply only as at the date of this Offer Document. Neither our Company, the
Manager, Sponsor and Placement Agent, nor any other person represents or warrants that our
Groups actual future results, performance or achievements will be as discussed in those
statements.
Our actual results may differ materially from those anticipated in these forward-looking statements
as a result of the risks faced by us. We and the Manager, Sponsor and Placement Agent, disclaim
any responsibility to update any of those forward-looking statements or publicly announce any
revisions to those forward-looking statements to reflect future developments, events orcircumstances even if new information becomes available or other events occur in the future. We
are, however, subject to the provisions of the SFA and the Catalist Rules regarding corporate
disclosure. In particular, pursuant to Section 241 of the SFA, if after the registration of the Offer
Document by the SGX-ST, acting as agent on behalf of the Authority, but before the close of the
Placement, our Company becomes aware of (a) a false or misleading statement or matter in the
Offer Document; (b) an omission from the Offer Document of any information that should have
been included in it under Section 243 of the SFA; or (c) a new circumstance that has arisen since
the Offer Document was lodged with the SGX-ST, acting as agent on behalf of the Authority, and
would have been required by Section 243 of the SFA to be included in the Offer Document if it had
arisen before the Offer Document was lodged, and that is materially adverse from the point of view
of an investor, our Company may lodge a supplementary or replacement offer document with the
SGX-ST, acting as agent on behalf of the Authority.
CAUTIONARY NOTE ON FORWARD-LOOKING STATEMENTS
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This Offer Document does not constitute an offer, solicitation or invitation to subscribe for the
Placement Shares in any jurisdiction in which such offer, solicitation or invitation is unlawful or is
not authorised or to any person to whom it is unlawful to make such offer, solicitation or invitation.
No action has been or will be taken under the requirements of the legislation or regulations of, or
of the legal or regulatory requirements of, any jurisdiction, except for the lodgement and/or
registration of this Offer Document in Singapore in order to permit a public offering of the
Placement Shares and the public distribution of this Offer Document in Singapore. The distribution
of this Offer Document and the offering of the Placement Shares in certain jurisdictions may be
restricted by the relevant laws in such jurisdictions. Persons who may come into possession of this
Offer Document are required by our Company and the Manager, Sponsor and Placement Agent
to inform themselves about, and to observe and comply with, any such restrictions at their own
expense and without liability to our Company and the Manager, Sponsor and Placement Agent.
SELLING RESTRICTIONS
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LISTING ON CATALIST
A copy of this Offer Document has been lodged with and registered by the SGX-ST, acting as
agent on behalf of the Authority. The registration of this Offer Document by the SGX-ST, acting as
agent on behalf of the Authority, does not imply that the SFA, the Catalist Rules or any other legal
or regulatory requirements, have been complied with. The SGX-ST has not, in any way,
considered the merits of our existing issued Shares, the Placement Shares and the Option
Shares, as the case may be, being offered or in respect of which an invitation is made, for
investment. We have not lodged this Offer Document in any other jurisdiction.
We have made an application to the SGX-ST for permission to deal in, and for the listing and
quotation of, all our Shares already issued, the Placement Shares which are the subject of the
Placement, the PPCF Shares and the Option Shares on Catalist. Such permission will be granted
when we have been admitted to Catalist. Acceptance of applications will be conditional upon, inter
alia, the issue of the Placement Shares and permission being granted by the SGX-ST to deal in,
and for the listing and quotation of, all our existing issued Shares, the Placement Shares, thePPCF Shares and the Option Shares on Catalist. If the admission, listing and trading of our Shares
already issued and the Placement Shares do not proceed or the said permission is not granted for
any reason, monies paid in respect of any application accepted will be returned, without interest
or any share of revenue or other benefit arising therefrom and at the applicants own risk, and the
applicant will not have any claim whatsoever against our Company and the Manager, Sponsor and
Placement Agent. No Shares will be allotted on the basis of this Offer Document later than six
months after the date of registration of this Offer Document by the SGX-ST, acting as agent on
behalf of the Authority.
Companies listed on Catalist may carry higher investment risk when compared with larger or more
established companies listed on the Main Board of the SGX-ST. In particular, companies may list
on Catalist without a track record of profitability and there is no assurance that there will be a liquid
market in the shares or units of shares traded on Catalist. Applicants should be aware of the risks
of investing in such companies and should make the decision to invest only after careful
consideration and, if appropriate, consultation with their professional adviser(s).
Neither the Authority nor the SGX-ST has examined or approved the contents of this Offer
Document. Neither the Authority nor the SGX-ST assumes any responsibility for the contents of
this Offer Document, including the correctness of any of the statements or opinions made or
reports contained in this Offer Document. The SGX-ST does not normally review the application
for admission to Catalist but relies on the Sponsor confirming that our Company is suitable to be
listed and complies with the Catalist Rules. Neither the Authority nor the SGX-ST has in any way
considered the merits of the Shares being offered for investment.
Admission to Catalist is not to be taken as an indication of the merits of the Placement, our
Company, our Subsidiaries, our existing issued Shares, the Placement Shares, the PPCF Shares
or the Option Shares.
We are subject to the provisions of the SFA and the Catalist Rules regarding corporate disclosure.
In particular, pursuant to section 241 of the SFA, if after the registration of this Offer Document but
before the close of the Placement, we become aware of:
(a) a false or misleading statement or matter in the Offer Document;
(b) an omission from the Offer Document of any information that should have been included in
it under Section 243 of the SFA; or
DETAILS OF THE PLACEMENT
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(c) a new circumstance that has arisen since the Offer Document was lodged with the SGX-ST,
acting as agent on behalf of the Authority, pursuant to Section 243 of the SFA to be included
in the Offer Document if it had arisen before this Offer Document was lodged,
that is materially adverse from the point of view of an investor, we may lodge a supplementary or
replacement offer document with the SGX-ST, acting as agent on behalf of the Authority.
In the event that a supplementary or replacement offer document is lodged with the SGX-ST, the
Placement shall be kept open for at least 14 days after the lodgement of such supplementary or
replacement offer document.
Where prior to the lodgement of the supplementary or replacement offer document, applications
have been made under this Offer Document to subscribe for the Placement Shares and:
(a) where the Placement Shares have not been issued to the applicants, our Company shall:
(i) within two days (excluding any Saturday, Sunday or public holiday) from the date of
lodgement of the supplementary or replacement offer document, give the applicants
notice in writing of how to obtain, or arrange to receive, a copy of the supplementary or
replacement offer document, and provide the applicants with an option to withdraw their
applications and take all reasonable steps to make available within a reasonable period
the supplementary or replacement offer document to the applicants who have indicated
that they wish to obtain, or have arranged to receive, a copy of the supplementary or
replacement offer document;
(ii) within seven days from the date of lodgement of the supplementary or replacement
offer document, give the applicants the supplementary or replacement offer document,
as the case may be, and provide the applicants with an option to withdraw their
applications; or
(iii) treat the applications as withdrawn and cancelled, in which case the applications shall
be deemed to have been withdrawn and cancelled, and our Company shall return all
monies paid in respect of any application, without interest or any share of revenue or
other benefit arising therefrom and at the applicants own risk; or
(b) where the Placement Shares have been issued to the applicants, our Company shall:
(i) within two days (excluding any Saturday, Sunday or public holiday) from the date of
lodgement of the supplementary or replacement offer document, give the applicantsnotice in writing of how to obtain, or arrange to receive, a copy of the supplementary or
replacement offer document, and provide the applicants with an option to return to our
Company the Placement Shares which they do not wish to retain title in, and take all
reasonable steps to make available within a reasonable period the supplementary or
replacement offer document to the applicants who have indicated that they wish to
obtain, or have arranged to receive, a copy of the supplementary or replacement offer
document;
(ii) within seven days from the date of lodgement of the supplementary or replacement offer
document, give the applicants the supplementary or replacement offer document, as the
case may be, and provide the applicants with an option to return to our Company thePlacement Shares, which they do not wish to retain title in; or
DETAILS OF THE PLACEMENT
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(iii) treat the issue of the Placement Shares as void, in which case the issue shall be
deemed void and our Company shall return all monies paid in respect of any issue of
the Placement Shares, without interest or any share of revenue or other benefit arising
therefrom and at the applicants own risk.
Any applicant who wishes to exercise his option under paragraph (a)(i) or (a)(ii) to withdraw his
application shall, within 14 days from the date of lodgement of the supplementary or replacement
offer document, notify our Company of this, whereupon our Company shall, within seven days
from the receipt of such notification, return the application monies without interest or any share of
revenue or other benefit arising therefrom and at his own risk, and he will not have any claim
against our Company or the Manager, Sponsor and Placement Agent.
An applicant who wishes to exercise his option under paragraph (b)(i) or (b)(ii) to return the
Placement Shares issued to him shall, within 14 days from the date of lodgement of the
supplementary or replacement offer document, notify our Company of this and return all
documents, if any, purporting to be evidence of title to those Placement Shares to our Company,whereupon our Company shall, within seven days from the receipt of such notification and
documents, if any, pay to him all monies paid by him for those Placement Shares, without interest
or any share of revenue or other benefit arising therefrom and at his own risk, and the issue of
those Placement Shares shall be deemed to be void, and he will not have any claim against our
Company or the Manager, Sponsor and Placement Agent.
Pursuant to Section 242 of the SFA, the Authority may, in certain circumstances issue a stop order
(the Stop Order) to our Company, directing that no Shares or no further Shares to which this
Offer Document relates, be allotted or issued. Such circumstances will include a situation where
this Offer Document (a) contains any statement or matter which, in the Authoritys opinion, is false
or misleading, (b) omits any information that should have been included in it under the SFA, (c)
does not, in the Authoritys opinion, comply with the requirements of the SFA, or (d) the Authority
is of the opinion that it is in the public interest to do so.
In the event that the Authority issues a Stop Order and applications to subscribe for the Placement
Shares have been made prior to the Stop Order, then:
(a) where the Placement Shares have not been issued to the applicants, the applications for the
Placement Shares shall be deemed to have been withdrawn and cancelled and we shall,
within 14 days from the date of the Stop Order, pay to the applicants all monies the applicants
have paid on account of their applications for the Placement Shares; or
(b) where the Placement Shares have been issued to the applicants, the issue of the PlacementShares shall be deemed to be void and we shall, within 14 days from the date of the Stop
Order, pay to the applicants all monies paid by them for the Placement Shares.
Such monies paid in respect of an application will be returned to the applicants at their own risk,
without interest or any share of revenue or other benefit arising therefrom, and they will not have
any claims against our Company or the Manager, Sponsor and Placement Agent.
If our Company is required by applicable Singapore laws to cancel issued Placement Shares and
repay application monies to applicants (including instances where a stop order under the SFA is
issued), subject to compliance with the Japan Companies Act, our Company will purchase the
Placement Shares at the Placement Price.
DETAILS OF THE PLACEMENT
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This Offer Document has been seen and approved by our Directors and they individually and
collectively accept full responsibility for the accuracy of the information given in this Offer
Document and confirm, after having made all reasonable enquiries, that to the best of their
knowledge and belief, this Offer Document constitutes full and true disclosure of all material facts
about the Placement and our Group and our Directors are not aware of any facts, the omission of
which would make any statement in this Offer Document misleading. Where information in this
Offer Document has been extracted from published or otherwise publicly available sources or
obtained from a named source, the sole responsibility of our Directors has been to ensure that
such information has been accurately and correctly extracted from these sources and/or
reproduced in this Offer Document in its proper form and context.
Neither our Company, the Manager, Sponsor and Placement Agent nor any other parties involved
in the Placement is making any representation to any person regarding the legality of an
investment by such person under any investment or other laws or regulations. No information in
this Offer Document should be considered as being business, legal or tax advice regarding an
investment in our Shares. Each prospective investor should consult his own professional or otheradvisers for business, legal or tax advice regarding an investment in our Shares.
No person has been or is authorised to give any information or to make any representation not
contained in this Offer Document in connection with the Placement and, if given or made, such
information or representation must not be relied upon as having been authorised by our Company
and/or the Manager, Sponsor and Placement Agent. Neither the delivery of this Offer Document
and the Application Forms nor any documents relating to the Placement, nor the Placement shall,
under any circumstances, constitute a continuing representation or create any suggestion or
implication that there has been no change or development reasonably likely to create any change
in our affairs, conditions or prospects, or in the Placement Shares or in the statements of fact or
information contained in this Offer Document since the date of this Offer Document. Where such
changes occur and are material or are required to be disclosed by law, the SGX-ST and/or any
other regulatory or supervisory body or agency, we may make an announcement of the same to
the SGX-ST and/or the Authority and/or the public and if required, we may lodge a supplementary
or replacement offer document with the SGX-ST, acting as agent on behalf of the Authority, and
will comply with the requirements of the SFA and/or any other requirements of the SGX-ST and/or
the Authority. All applicants should take note of any such announcements and, upon the release
of such an announcement, shall be deemed to have notice of such changes.
Save as expressly stated in this Offer Document, nothing herein is, or may be relied upon as, a
promise or representation as to our future performance or policies. The Placement Shares are
offered for subscription solely on the basis of the information contained and representations made
in this Offer Document.
This Offer Document has been prepared solely for the purpose of the Placement and may not be
relied upon by any other persons other than the applicants in connection with their application for
the Placement Shares or for any other purpose.
This Offer Document does not constitute an offer, solicitation or invitation of the Placement
Shares in any jurisdiction in which such offer, solicitation or invitation is unlawful or
unauthorised nor does it constitute an offer, solicitation or invitation to any person to
whom it is unlawful to make such offer, solicitation or invitation.
DETAILS OF THE PLACEMENT
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Copies of this Offer Document and the Application Forms may be obtained on request, subject to
availability during office hours, from:
PrimePartners Corporate Finance Pte. Ltd.
20 Cecil Street
#21-02 Equity Plaza
Singapore 049705
A copy of this Offer Document is also available on the SGX-ST website http://www.sgx.com.
The Placement will be open from 11 September 2013 (immediately upon the registration of
the Offer Document by the SGX-ST, acting as agent on behalf of the Authority (the
Registration)) to 16 September 2013.
The Application List will open immediately upon the Registration on 11 September 2013 and
will remain open until 12.00 noon on 16 September 2013 or for such further period orperiods as our Directors may, in consultation with the Manager, Sponsor and Placement
Agent, in their absolute discretion decide, subject to any limitation under all applicable
laws and regulations. In the event a supplementary offer document or replacement offer
document is lodged with the SGX-ST acting as agent on behalf of the Authority, the
Application List will remain open for at least 14 days after the lodgement of the
supplementary or replacement offer document.
Details of the procedures for application of the Placement Shares are set out in Appendix
F Terms, Conditions and Procedures for Application and Acceptance of this Offer
Document.
DETAILS OF THE PLACEMENT
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An indicative timetable on the trading of our Shares is set out below:
Indicative date/time Event
11 September 2013 (immediatelyupon Registration)
Open of Placement
16 September 2013 at 12.00 noon Close of Application List
18 September 2013 at 9.00 a.m. Commence trading on a ready basis
23 September 2013 Settlement date for all trades done on a ready basis
The above timetable is only indicative as it assumes that the date of closing of the Application List
will be on 16 September 2013, the date of admission of our Company to Catalist will be 18
September 2013, the SGX-ST shareholding spread requirement will be complied with and the
Placement Shares will be issued and fully paid-up prior to 18 September 2013.
The above timetable and procedures may be subject to such modification(s) as the SGX-ST may,
in its absolute discretion, decide, including the commencement of trading on a ready basis and
the commencement date of such trading.
In the event of any changes in the closure of the Application List or the time period during which
the Placement is open, we will publicly announce the same:
(a) through a SGXNET announcement to be posted on the Internet at the SGX-ST website
http://www.sgx.com; and
(b) in a local English language newspaper(s) such as The Straits Times or The Business Timesin Singapore.
We will publicly announce the level of subscription and the results of the distribution of the
Placement Shares pursuant to the Placement, as soon as it is practicable after the close of the
Application List through channels in (a) and (b) above.
You should consult the SGX-STs announcement on the ready trading date released on
the Internet (at the SGX-ST website http://www.sgx.com) or the local newspapers, or check
with your brokers on the date on which trading on a ready basis will commence.
INDICATIVE TIMETABLE FOR LISTING
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The Placement is for 25,000,000 Placement Shares offered in Singapore and the Listing is
managed and sponsored by PPCF.
Prior to the Placement, there has been no public market for our Shares. The Placement Price is
determined by us in consultation with the Manager, Sponsor and Placement Agent, taking into
account, inter alia, prevailing market conditions and the estimated market demand for the
Placement Shares determined through a book-building process. The Placement Price is the same
for all Placement Shares and is payable in full on application.
Pursuant to the Management Agreement entered into between us and PPCF as set out in the
section entitled General and Statutory Information Management and Placement Arrangements
of this Offer Document, we have appointed PPCF, and PPCF has agreed, to manage and to act
as full sponsor for the Listing. The Manager, Sponsor and Placement Agent will receive a
management fee for its services rendered in connection with the Placement
Placement Shares
The Placement Shares are made available to retail and institutional investors in Singapore who
may apply through their brokers or financial institutions by way of the Application Forms.
Application for the Placement Shares may only be made by way of the printed Application Forms
as described in Appendix F of this Offer Document. The terms, conditions and procedures for
application and acceptance are set out in Appendix F Terms, Conditions and Procedures for
Application and Acceptance of this Offer Document.
Pursuant to the Placement Agreement entered into between us and the Placement Agent as set
out in the section entitled General and Statutory Information Management and Placement
Arrangement of this Offer Document, we have appointed PPCF as the Placement Agent and
PPCF has agreed to procure subscriptions for the Placement Shares for a placement commission
of 5.0% of the aggregate Placement Price payable by our Company pursuant to the Placement.
Subject to any applicable laws and regulations, our Company agrees that PPCF may, at its
absolute discretion, appoint one or more sub-placement agents for the Placement Shares upon
such terms and conditions as the Placement Agent may deem fit.
Subscription for Placement Shares
Other than our Controlling Shareholder Mamezou, none of our Directors, Substantial
Shareholders or our Statutory Auditors intends to subscribe for the Placement Shares pursuant to
the Placement. As far as we are aware, none of our Independent Directors, our Statutory Auditors,
the members of our Companys management or employees intends to subscribe for more than5.0% of the Placement Shares in the Placement.
To the best of our knowledge and belief, as at the date of this Offer Document, we are not aware
of any person who intends to subscribe for more than 5.0% of the Placement Shares in the
Placement, save for our Controlling Shareholder Mamezou. However, through a book-building
process to assess market demand for our Shares, there may be person(s) who may indicate an
interest to subscribe for Shares amounting to more than 5.0% of the Placement Shares. If such
person(s) were to make an application for more than 5.0% of the Placement Shares pursuant to
the Placement and are subsequently allotted such number of Shares, we will make the necessary
announcements at an appropriate time. The final allotment of Shares will be in accordance with
the shareholding spread and distribution guidelines as set out in Rule 406 of the Catalist Rules.
PLAN OF DISTRIBUTION
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No Shares shall be issued and allotted on the basis of this Offer Document later than six months
after the date of registration of this Offer Document by SGX-ST, acting as agent on behalf of the
Authority.
INTERESTS OF MANAGER, SPONSOR AND PLACEMENT AGENT
In the reasonable opinion of our Directors, PPCF does not h