vision lives
TRANSCRIPT
Placement in respect of 70,000,000 Placement Shares at S$0.28 for each Placement Share, payable in full on application
Placement AgentIssue Manager and Sponsor
MAYBANK KIM ENG SECURITIES PTE. LTD.(Company Registration No.: 197201256N)(Incorporated in the Republic of Singapore)
PRIMEPARTNERS CORPORATE FINANCE PTE. LTD.(Company Registration No.: 200207389D)(Incorporated in the Republic of Singapore)
CORPORATE PROFILE We are a comprehensive medical eye care service provider with ambulatory surgical centres in Malaysia and Singapore. Our team of doctors are specialised in the fields of cataract and refractive surgery (including LASIK), vitreoretinal diseases, corneal and external eye diseases, glaucoma, uveitis, oculoplastics, facial cosmetics and aesthetics surgery,
adult strabismus and paediatric ophthalmology.
Many of our specialist doctors are key opinion leaders in their respective subspecialty fields.
Our vision is to provide high quality, compassionate, world-class eye care at an affordable level to the local and regional community. Using state-of-the-art technology and facilities, our specialist doctors provide patients with excellent
medical eye care services.
HEALTHCARE
ISEC HEALTHCARE LTD.(Company Registration No.: 201400185H)
(Incorporated in the Republic of Singapore on 2 January 2014)
Restoring
Vision Enriching
Lives
OFFER DOCUMENT DATED 14 OCTOBER 2014
(Registered by the Singapore Exchange Securities Trading Limited, acting as agent on behalf of the Monetary Authority of Singapore (the “Authority”) on 14 October 2014)
This document is important. If you are in any doubt as to the action you should take, you should consult your legal, financial, tax or other professional adviser(s).
PrimePartners Corporate Finance Pte. Ltd. (“PPCF” or the “Issue Manager and Sponsor”) has on behalf of ISEC Healthcare Ltd. (the “Company”) made an application to the Singapore Exchange Securities Trading Limited (the “SGX-ST”) for permission to deal in, and for quotation of, all the ordinary shares (the “Shares”) in the capital of the Company already issued, the new Shares (the “Placement Shares”) which are the subject of the Placement (as defined herein) and the new Shares which may be issued upon the exercise of the options to be granted under the ISEC Healthcare Share Option Scheme (the “Option Shares”), on Catalist (as defined herein).
Acceptance of applications will be conditional upon, inter alia, the issue of the Placement Shares, permission being granted by the SGX-ST for the listing and quotation of all our existing Shares, the Placement Shares and the Option Shares on Catalist. Monies paid in respect of any application accepted will be returned to you at your own risk, without interest or any share of revenue or other benefit arising therefrom and you will not have any claim against us, the Issue Manager and Sponsor and/or the Placement Agent (as defined herein) if the admission and listing do not proceed. The dealing in and quotation of the Shares will be in Singapore Dollars.
Companies listed on Catalist may carry higher investment risk when compared with larger or more established companies listed on the Main Board of the SGX-ST. In particular, companies may list on Catalist without a track record of profitability and there is no assurance that there will be a liquid market in the shares or
units of shares traded on Catalist. You should be aware of the risks of investing in such companies and should make the decision to invest only after careful consideration and, if appropriate, consultation with your professional adviser(s).
This offer of Placement Shares is made in or accompanied by an offer document that has been registered by the SGX-ST, acting as agent on behalf of the Authority.
A copy of this Offer Document has been lodged with and registered by the SGX-ST, acting as agent on behalf of the Authority. Neither the Authority nor the SGX-ST has examined or approved the contents of this Offer Document. Neither the Authority nor the SGX-ST assumes any responsibility for the contents of this Offer Document, including the correctness of any of the statements or opinions made or reports contained in this Offer Document. The SGX-ST does not normally review the application for admission but relies on the Issue Manager and Sponsor confirming that our Company is suitable to be listed and complies with the Catalist Rules (as defined herein). Neither the Authority nor the SGX-ST has in any way considered the merits of the Shares or units of Shares, being offered for investment. The registration of this Offer Document by the SGX-ST does not imply that the Securities and Futures Act (Chapter 289) of Singapore, or any other legal or regulatory requirements, or requirements under the SGX-ST’s listing rules, have been complied with.
Investing in our Shares involves risks which are described in the section entitled “RISK FACTORS” of this Offer Document.
After the expiration of six (6) months from the date of registration of this Offer Document, no person shall make an offer of our Shares, or allot, issue or sell any of our Shares, on the basis of this Offer Document; and no officer or equivalent person or promoter of our Company will authorise or permit the offer of any of our Shares or the allotment, issue or sale of any of our Shares, on the basis of this Offer Document.
HEALTHCARE
ISEC HEALTHCARE LTD.(Company Registration No.: 201400185H)
(Incorporated in the Republic of Singapore on 2 January 2014)
101 Thomson Road#09-04 United Square
Singapore 307591www.isechealthcare.com
ISE
C H
EA
LT
HC
AR
E L
TD
.
OUR BUSINESS
MALAYSIA SINGAPORE
ISEC KL ISEC SINGAPORE
• Established in 2007
• 12 full-time ophthalmologists; 2 visiting ophthalmologists
• 15 consultation rooms, 5 laser suites, 4 operating theatres, executive suites and full general anaesthetic services
• Joint Commission International (JCI) accredited eye care centre
• FY2013: Over 5,000 major surgeries performed, over 70,000 patients served
• Opened in August 2014 at Mount Elizabeth Novena Specialist Centre
• 3 full-time ophthalmologists
• State-of-the-art ophthalmology equipment such as Alcon’s latest Wavelight Refractive Suite, Zeiss’ latest Cataract Suite and an oculoplastics and facial aesthetics surgery suite
ISEC PENANG LEE HUNG MING EYE CENTRE
• Opened in February 2014
• 3 full-time ophthalmologists
• 4 clinic consultation rooms, 2 optometry rooms, 2 operating theatres, 2 treatment rooms and various facilities for visual field testing, laser and electrocardiography
• Established in 2007 at Gleneagles Hospital, Singapore
• Where ISEC Eye provides its services and helmed by specialist medical ophthalmologist, Dr Lee Hung Ming
• State-of-the-art technology and facilities
HEA
LTHCA
RE
Placement in respect of 70,000,000 Placement Shares at S$0.28 for each Placement Share, payable in full on application
Placement AgentIssue Manager and Sponsor
MAYBANK KIM ENG SECURITIES PTE. LTD.(Company Registration No.: 197201256N)(Incorporated in the Republic of Singapore)
PRIMEPARTNERS CORPORATE FINANCE PTE. LTD.(Company Registration No.: 200207389D)(Incorporated in the Republic of Singapore)
CORPORATE PROFILE We are a comprehensive medical eye care service provider with ambulatory surgical centres in Malaysia and Singapore. Our team of doctors are specialised in the fields of cataract and refractive surgery (including LASIK), vitreoretinal diseases, corneal and external eye diseases, glaucoma, uveitis, oculoplastics, facial cosmetics and aesthetics surgery,
adult strabismus and paediatric ophthalmology.
Many of our specialist doctors are key opinion leaders in their respective subspecialty fields.
Our vision is to provide high quality, compassionate, world-class eye care at an affordable level to the local and regional community. Using state-of-the-art technology and facilities, our specialist doctors provide patients with excellent
medical eye care services.
HEALTHCARE
ISEC HEALTHCARE LTD.(Company Registration No.: 201400185H)
(Incorporated in the Republic of Singapore on 2 January 2014)
Restoring
Vision Enriching
Lives
OFFER DOCUMENT DATED 14 OCTOBER 2014
(Registered by the Singapore Exchange Securities Trading Limited, acting as agent on behalf of the Monetary Authority of Singapore (the “Authority”) on 14 October 2014)
This document is important. If you are in any doubt as to the action you should take, you should consult your legal, financial, tax or other professional adviser(s).
PrimePartners Corporate Finance Pte. Ltd. (“PPCF” or the “Issue Manager and Sponsor”) has on behalf of ISEC Healthcare Ltd. (the “Company”) made an application to the Singapore Exchange Securities Trading Limited (the “SGX-ST”) for permission to deal in, and for quotation of, all the ordinary shares (the “Shares”) in the capital of the Company already issued, the new Shares (the “Placement Shares”) which are the subject of the Placement (as defined herein) and the new Shares which may be issued upon the exercise of the options to be granted under the ISEC Healthcare Share Option Scheme (the “Option Shares”), on Catalist (as defined herein).
Acceptance of applications will be conditional upon, inter alia, the issue of the Placement Shares, permission being granted by the SGX-ST for the listing and quotation of all our existing Shares, the Placement Shares and the Option Shares on Catalist. Monies paid in respect of any application accepted will be returned to you at your own risk, without interest or any share of revenue or other benefit arising therefrom and you will not have any claim against us, the Issue Manager and Sponsor and/or the Placement Agent (as defined herein) if the admission and listing do not proceed. The dealing in and quotation of the Shares will be in Singapore Dollars.
Companies listed on Catalist may carry higher investment risk when compared with larger or more established companies listed on the Main Board of the SGX-ST. In particular, companies may list on Catalist without a track record of profitability and there is no assurance that there will be a liquid market in the shares or
units of shares traded on Catalist. You should be aware of the risks of investing in such companies and should make the decision to invest only after careful consideration and, if appropriate, consultation with your professional adviser(s).
This offer of Placement Shares is made in or accompanied by an offer document that has been registered by the SGX-ST, acting as agent on behalf of the Authority.
A copy of this Offer Document has been lodged with and registered by the SGX-ST, acting as agent on behalf of the Authority. Neither the Authority nor the SGX-ST has examined or approved the contents of this Offer Document. Neither the Authority nor the SGX-ST assumes any responsibility for the contents of this Offer Document, including the correctness of any of the statements or opinions made or reports contained in this Offer Document. The SGX-ST does not normally review the application for admission but relies on the Issue Manager and Sponsor confirming that our Company is suitable to be listed and complies with the Catalist Rules (as defined herein). Neither the Authority nor the SGX-ST has in any way considered the merits of the Shares or units of Shares, being offered for investment. The registration of this Offer Document by the SGX-ST does not imply that the Securities and Futures Act (Chapter 289) of Singapore, or any other legal or regulatory requirements, or requirements under the SGX-ST’s listing rules, have been complied with.
Investing in our Shares involves risks which are described in the section entitled “RISK FACTORS” of this Offer Document.
After the expiration of six (6) months from the date of registration of this Offer Document, no person shall make an offer of our Shares, or allot, issue or sell any of our Shares, on the basis of this Offer Document; and no officer or equivalent person or promoter of our Company will authorise or permit the offer of any of our Shares or the allotment, issue or sale of any of our Shares, on the basis of this Offer Document.
HEALTHCARE
ISEC HEALTHCARE LTD.(Company Registration No.: 201400185H)
(Incorporated in the Republic of Singapore on 2 January 2014)
101 Thomson Road#09-04 United Square
Singapore 307591www.isechealthcare.com
ISE
C H
EA
LT
HC
AR
E L
TD
.
OUR BUSINESS
MALAYSIA SINGAPORE
ISEC KL ISEC SINGAPORE
• Established in 2007
• 12 full-time ophthalmologists; 2 visiting ophthalmologists
• 15 consultation rooms, 5 laser suites, 4 operating theatres, executive suites and full general anaesthetic services
• Joint Commission International (JCI) accredited eye care centre
• FY2013: Over 5,000 major surgeries performed, over 70,000 patients served
• Opened in August 2014 at Mount Elizabeth Novena Specialist Centre
• 3 full-time ophthalmologists
• State-of-the-art ophthalmology equipment such as Alcon’s latest Wavelight Refractive Suite, Zeiss’ latest Cataract Suite and an oculoplastics and facial aesthetics surgery suite
ISEC PENANG LEE HUNG MING EYE CENTRE
• Opened in February 2014
• 3 full-time ophthalmologists
• 4 clinic consultation rooms, 2 optometry rooms, 2 operating theatres, 2 treatment rooms and various facilities for visual field testing, laser and electrocardiography
• Established in 2007 at Gleneagles Hospital, Singapore
• Where ISEC Eye provides its services and helmed by specialist medical ophthalmologist, Dr Lee Hung Ming
• State-of-the-art technology and facilities
HEA
LTHCA
RE
COMPETITIVE STRENGTHS TEAM OF HIGHLY QUALIFIED AND EXPERIENCED SPECIALIST DOCTORS
• All our specialist doctors have over 15 years of clinical experience, some are considered key opinion leaders in their fields of subspecialty and provided advice for major eye care multinational companies including Alcon Group, Bausch & Lomb and Zeiss
• Dr Lee Hung Ming, our Executive Vice Chairman:
- Over 25 years of clinical experience
- Key opinion leader in cataract surgery, LASIK surgery and treatment of cornea and external eye diseases
- Noted for having consistently performed innovative surgeries and successfully adopted the latest technologies as they were introduced in the respective regions
- He was Head of Refractive Surgery at Tan Tock Seng Hospital between 2000 and 2007 and Clinical Director of Vision Correction Centre at National University Hospital from 2002 to 2007
• Dr Wong Jun Shyan, our Chief Executive Officer:
- Over 23 years of clinical experience including from world renowned medical institutions: Royal Victorian Eye and Ear Hospital, University of Melbourne, the Beetham Eye Institute of Joslin Diabetes Centre, Boston and the Department of Ophthalmology at Harvard Medical School
- Key opinion leader in vitreoretinal diseases
- Involved in Asia Pacific advisory boards for key corporations in the eye care industry such as Bayer Healthcare, Alcon Laboratories, Novartis Ophthalmic and Allergen Inc
PROVIDE HIGH QUALITY AND COMPREHENSIVE RANGE OF EYE CARE SERVICES
• JCI accredited eye ambulatory surgical centre
• Offer one-stop specialist medical eye care services
• Tertiary centre treating patients with complicated medical eye diseases who have been referred from doctors across the South- East Asia region
WELL POSITIONED TO CAPTURE THE GROWING DEMAND FOR PRIVATE EYE CARE SERVICES
• South-East Asia’s ageing population, rising income levels, increasing private insurance coverage and growing medical tourism sector has led to rising demand for private eye care services
ASSET-LIGHT, STRONG CASH FLOW BUSINESS MODEL
• Operating premises and some medical equipment are leased and shared amongst specialist doctors to maximise asset utilisation
• Allows us to generate recurring cash flows to fund future expansion plans and/or for dividend payments
ABLE TO LEVERAGE ON SCALE OF BUSINESS AND REPLICATE BUSINESS MODEL FEATURING STATE-OF-THE-ART- TECHNOLOGY ACROSS ASIA PACIFIC
• Strong relationships with major suppliers, able to enjoy significant economies of scale when we negotiate for bulk purchases
• Able to continuously invest in state-of-the-art equipment to improve patient outcome and safety
BUSINESS MODEL ALIGNS INTERESTS OF OUR SPECIALIST DOCTORS WITH OUR GROUP AND SHAREHOLDERS
• Most of our specialist doctors are also shareholders and the Group has been able to attract and retain experienced and highly qualified specialist doctors
• We share consultancy fees with our specialist doctors and offer them the opportunity to participate in our Share Option Scheme
• ISEC brand attracts new patients and centralised administrative structure allows our specialist doctors to dedicate themselves principally to clinical matters
BUSINESS STRATEGIES & FUTURE PLANSGROWING THE ISEC BRAND NAME AND TO EXPAND IN ASIA PACIFIC
• Expand into other Malaysian states such as Johor and Melaka
• Identified Indonesia, Myanmar, Philippines and Taiwan as markets with high growth potential
EXPANDING OUR TALENT POOL OF SPECIALIST DOCTORS AND MANAGEMENT STAFF
• Recruit and retain highly qualified and talented management and healthcare professionals to better provide for our patients and to expand the breadth and depth of our subspecialty services
BUILDING OUR REGIONAL NETWORK
• Build relationships with referral centres which will refer patients requiring more complicated surgical procedures or medical consultations to our centres
INVESTING IN THE LATEST TECHNOLOGY WHICH ALLOWS OUR SPECIALIST DOCTORS TO KEEP UP TO DATE WITH NEWEST PROCEDURES
• Keeping abreast of the latest technology and keeping up to date with innovative procedures in the ophthalmology field
PROSPECTS(1) COMMON DRIVERS FOR PRIVATE OPHTHALMOLOGY SERVICES IN MALAYSIA AND SINGAPORE:
Ageing population
• Growing demand from expanding elderly population suffering from age-related eye conditions such as cataract or vitreoretinal diseases
Increasing awareness
• Increased information technology penetration increases patients’ awareness of eye diseases and likelihood to seek treatment
Rising income level
• Rising affluence among Malaysians and Singaporeans increases the affordability of private ophthalmology services
Increased uptake of private insurance
• Serves as driver to encourage more people to seek private medical services including ophthalmology-related services
Growth in medical tourism
• Malaysia: Revenue from medical tourism is estimated to grow at a CAGR of 26.7% from S$106.0 million in 2009 to S$894.0 million by 2018
• Singapore: Ophthalmology procedures are currently the second most popular medical procedures amongst medical tourists. Medical tourists is estimated to increase from 604,000 in 2013 to over 1 million in 2018
The region is underserved by qualified ophthalmologists:
MALAYSIA 0.01 ophthalmologist per 1,000 population
SINGAPORE 0.04 ophthalmologist per 1,000 population
WORLD AVERAGE 0.036 ophthalmologist per 1,000 population
OTHER MODERNISED NATIONS
0.05-0.11 ophthalmologist per 1,000 population
FINANCIAL HIGHLIGHTS (FYE 31 December)
REVENUE (S$’m)
NET PROFIT (S$’m) & NET PROFIT MARGIN (%)
FY2011
FY2011
FY2012
FY2012
FY2013
FY2013
1Q2013
1Q2013
1Q2014
1Q2014
25.027.6 25.3
18.620.6
22.3
1.31.8
CAGR 9.5%
FY2012
GROSS PROFIT (S$’m) & GROSS PROFIT MARGIN (%)
FY2011
51.4 51.8 51.5
46.4
53.4
11.5
2.33.1
10.79.6
FY2013 1Q2013 1Q2014
GPM
5.1 5.9
4.7
5.7 5.7
Note:
(1) Source: Frost & Sullivan (S) Pte Ltd. See “Appendix L – Singapore and Malaysia Opthalmology Market Overview”.
25.1
30.4NPM
COMPETITIVE STRENGTHS TEAM OF HIGHLY QUALIFIED AND EXPERIENCED SPECIALIST DOCTORS
• All our specialist doctors have over 15 years of clinical experience, some are considered key opinion leaders in their fields of subspecialty and provided advice for major eye care multinational companies including Alcon Group, Bausch & Lomb and Zeiss
• Dr Lee Hung Ming, our Executive Vice Chairman:
- Over 25 years of clinical experience
- Key opinion leader in cataract surgery, LASIK surgery and treatment of cornea and external eye diseases
- Noted for having consistently performed innovative surgeries and successfully adopted the latest technologies as they were introduced in the respective regions
- He was Head of Refractive Surgery at Tan Tock Seng Hospital between 2000 and 2007 and Clinical Director of Vision Correction Centre at National University Hospital from 2002 to 2007
• Dr Wong Jun Shyan, our Chief Executive Officer:
- Over 23 years of clinical experience including from world renowned medical institutions: Royal Victorian Eye and Ear Hospital, University of Melbourne, the Beetham Eye Institute of Joslin Diabetes Centre, Boston and the Department of Ophthalmology at Harvard Medical School
- Key opinion leader in vitreoretinal diseases
- Involved in Asia Pacific advisory boards for key corporations in the eye care industry such as Bayer Healthcare, Alcon Laboratories, Novartis Ophthalmic and Allergen Inc
PROVIDE HIGH QUALITY AND COMPREHENSIVE RANGE OF EYE CARE SERVICES
• JCI accredited eye ambulatory surgical centre
• Offer one-stop specialist medical eye care services
• Tertiary centre treating patients with complicated medical eye diseases who have been referred from doctors across the South- East Asia region
WELL POSITIONED TO CAPTURE THE GROWING DEMAND FOR PRIVATE EYE CARE SERVICES
• South-East Asia’s ageing population, rising income levels, increasing private insurance coverage and growing medical tourism sector has led to rising demand for private eye care services
ASSET-LIGHT, STRONG CASH FLOW BUSINESS MODEL
• Operating premises and some medical equipment are leased and shared amongst specialist doctors to maximise asset utilisation
• Allows us to generate recurring cash flows to fund future expansion plans and/or for dividend payments
ABLE TO LEVERAGE ON SCALE OF BUSINESS AND REPLICATE BUSINESS MODEL FEATURING STATE-OF-THE-ART- TECHNOLOGY ACROSS ASIA PACIFIC
• Strong relationships with major suppliers, able to enjoy significant economies of scale when we negotiate for bulk purchases
• Able to continuously invest in state-of-the-art equipment to improve patient outcome and safety
BUSINESS MODEL ALIGNS INTERESTS OF OUR SPECIALIST DOCTORS WITH OUR GROUP AND SHAREHOLDERS
• Most of our specialist doctors are also shareholders and the Group has been able to attract and retain experienced and highly qualified specialist doctors
• We share consultancy fees with our specialist doctors and offer them the opportunity to participate in our Share Option Scheme
• ISEC brand attracts new patients and centralised administrative structure allows our specialist doctors to dedicate themselves principally to clinical matters
BUSINESS STRATEGIES & FUTURE PLANSGROWING THE ISEC BRAND NAME AND TO EXPAND IN ASIA PACIFIC
• Expand into other Malaysian states such as Johor and Melaka
• Identified Indonesia, Myanmar, Philippines and Taiwan as markets with high growth potential
EXPANDING OUR TALENT POOL OF SPECIALIST DOCTORS AND MANAGEMENT STAFF
• Recruit and retain highly qualified and talented management and healthcare professionals to better provide for our patients and to expand the breadth and depth of our subspecialty services
BUILDING OUR REGIONAL NETWORK
• Build relationships with referral centres which will refer patients requiring more complicated surgical procedures or medical consultations to our centres
INVESTING IN THE LATEST TECHNOLOGY WHICH ALLOWS OUR SPECIALIST DOCTORS TO KEEP UP TO DATE WITH NEWEST PROCEDURES
• Keeping abreast of the latest technology and keeping up to date with innovative procedures in the ophthalmology field
PROSPECTS(1) COMMON DRIVERS FOR PRIVATE OPHTHALMOLOGY SERVICES IN MALAYSIA AND SINGAPORE:
Ageing population
• Growing demand from expanding elderly population suffering from age-related eye conditions such as cataract or vitreoretinal diseases
Increasing awareness
• Increased information technology penetration increases patients’ awareness of eye diseases and likelihood to seek treatment
Rising income level
• Rising affluence among Malaysians and Singaporeans increases the affordability of private ophthalmology services
Increased uptake of private insurance
• Serves as driver to encourage more people to seek private medical services including ophthalmology-related services
Growth in medical tourism
• Malaysia: Revenue from medical tourism is estimated to grow at a CAGR of 26.7% from S$106.0 million in 2009 to S$894.0 million by 2018
• Singapore: Ophthalmology procedures are currently the second most popular medical procedures amongst medical tourists. Medical tourists is estimated to increase from 604,000 in 2013 to over 1 million in 2018
The region is underserved by qualified ophthalmologists:
MALAYSIA 0.01 ophthalmologist per 1,000 population
SINGAPORE 0.04 ophthalmologist per 1,000 population
WORLD AVERAGE 0.036 ophthalmologist per 1,000 population
OTHER MODERNISED NATIONS
0.05-0.11 ophthalmologist per 1,000 population
FINANCIAL HIGHLIGHTS (FYE 31 December)
REVENUE (S$’m)
NET PROFIT (S$’m) & NET PROFIT MARGIN (%)
FY2011
FY2011
FY2012
FY2012
FY2013
FY2013
1Q2013
1Q2013
1Q2014
1Q2014
25.027.6 25.3
18.620.6
22.3
1.31.8
CAGR 9.5%
FY2012
GROSS PROFIT (S$’m) & GROSS PROFIT MARGIN (%)
FY2011
51.4 51.8 51.5
46.4
53.4
11.5
2.33.1
10.79.6
FY2013 1Q2013 1Q2014
GPM
5.1 5.9
4.7
5.7 5.7
Note:
(1) Source: Frost & Sullivan (S) Pte Ltd. See “Appendix L – Singapore and Malaysia Opthalmology Market Overview”.
25.1
30.4NPM
CORPORATE INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
GLOSSARY OF TECHNICAL TERMS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS . . . . . . . . . . . 16
SELLING RESTRICTIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
DETAILS OF THE PLACEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
LISTING ON CATALIST . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
INDICATIVE TIMETABLE FOR LISTING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
PLAN OF DISTRIBUTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
OFFER DOCUMENT SUMMARY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
THE PLACEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
EXCHANGE RATES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
PLACEMENT STATISTICS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
RISK FACTORS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
USE OF PROCEEDS AND EXPENSES OF THE PLACEMENT . . . . . . . . . . . . . . . . . . . . 50
DIVIDEND POLICY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
SHARE CAPITAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
SHAREHOLDERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
OWNERSHIP STRUCTURE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
SIGNIFICANT CHANGES IN PERCENTAGE OF OWNERSHIP . . . . . . . . . . . . . . . . . . . . 57
MORATORIUM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
DILUTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
RESTRUCTURING EXERCISE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
GROUP STRUCTURE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
SUMMARY OF OUR PRO FORMA FINANCIAL INFORMATION . . . . . . . . . . . . . . . . . . . 65
MANAGEMENT’S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS
AND FINANCIAL POSITION OF OUR PRO FORMA COMBINED FINANCIAL
INFORMATION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
OVERVIEW . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
REVIEW OF RESULTS OF OPERATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
REVIEW OF FINANCIAL POSITION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78
LIQUIDITY AND CAPITAL RESOURCES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81
CAPITAL EXPENDITURES, DIVESTMENTS AND COMMITMENTS . . . . . . . . . . . . . . . . . 84
CONTINGENT LIABILITIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86
INFLATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86
FOREIGN EXCHANGE MANAGEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86
TABLE OF CONTENTS
1
SIGNIFICANT ACCOUNTING POLICIES CHANGES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87
CAPITALISATION AND INDEBTEDNESS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87
INDUSTRY OVERVIEW . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89
PROSPECTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89
TREND INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 91
GENERAL INFORMATION ON OUR GROUP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 92
HISTORY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 92
BUSINESS OVERVIEW . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94
SERVICES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 98
TECHNOLOGY. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 103
SERVICE QUALITY CONTROL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 104
MAJOR CUSTOMERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 106
MAJOR SUPPLIERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 106
MATERIAL PROPERTIES AND FIXED ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 107
SALES AND MARKETING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 109
INVENTORY MANAGEMENT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 109
CREDIT POLICY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 110
ENVIRONMENT, HEALTH AND SAFETY. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 110
ORDER BOOK . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 110
INTELLECTUAL PROPERTY RIGHTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 110
MATERIAL LICENCES, PERMITS, REGISTRATIONS AND APPROVALS. . . . . . . . . . . . . 111
INSURANCE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 113
COMPETITION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 113
COMPETITIVE STRENGTHS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 114
BUSINESS STRATEGIES AND FUTURE PLANS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 117
CORPORATE SOCIAL RESPONSIBILITY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 119
SEASONALITY. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 119
INTERESTED PERSON TRANSACTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 120
PAST INTERESTED PERSON TRANSACTIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 121
PRESENT AND ON-GOING INTERESTED PERSON TRANSACTIONS . . . . . . . . . . . . . . 123
GUIDELINES AND REVIEW PROCEDURES FOR FUTURE INTERESTED PERSON
TRANSACTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 123
POTENTIAL CONFLICTS OF INTERESTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 125
DIRECTORS, EXECUTIVE OFFICERS AND EMPLOYEES . . . . . . . . . . . . . . . . . . . . . . . 126
MANAGEMENT REPORTING STRUCTURE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 126
DIRECTORS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 127
EXECUTIVE OFFICERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 133
TABLE OF CONTENTS
2
REMUNERATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 138
EMPLOYEES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 139
SERVICE AGREEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 140
ISEC HEALTHCARE SHARE OPTION SCHEME . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 142
CORPORATE GOVERNANCE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 150
EXCHANGE CONTROLS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 155
CLEARANCE AND SETTLEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 157
GENERAL AND STATUTORY INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 158
APPENDIX A – INDEPENDENT AUDITORS’ REPORT AND UNAUDITED PRO FORMA
COMBINED FINANCIAL INFORMATION FOR THE FINANCIAL YEARS ENDED
31 DECEMBER 2011, 2012, 2013 AND FOR THE FINANCIAL PERIOD FROM
1 JANUARY 2014 TO 31 MARCH 2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-1
APPENDIX B – INDEPENDENT AUDITORS’ REPORT AND AUDITED COMBINED
FINANCIAL STATEMENTS FOR THE FINANCIAL YEARS ENDED 31 DECEMBER 2011,
2012 AND 2013 IN RESPECT OF ISEC HEALTHCARE LTD. AND ITS SUBSIDIARIES. B-1
APPENDIX C – INDEPENDENT AUDITORS’ REPORT AND AUDITED COMBINED
FINANCIAL STATEMENTS FOR THE FINANCIAL YEARS ENDED 31 DECEMBER 2011,
2012 AND 2013 IN RESPECT OF ISEC EYE PTE. LTD. . . . . . . . . . . . . . . . . . . . . . . . . . C-1
APPENDIX D – INDEPENDENT AUDITORS’ REVIEW REPORT AND THE UNAUDITED
INTERIM CONDENSED COMBINED FINANCIAL STATEMENTS FOR THE FINANCIAL
PERIOD FROM 1 JANUARY 2014 TO 31 MARCH 2014 IN RESPECT OF ISEC
HEALTHCARE LTD. AND ITS SUBSIDIARIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . D-1
APPENDIX E – INDEPENDENT AUDITORS’ REVIEW REPORT AND THE UNAUDITED
INTERIM CONDENSED COMBINED FINANCIAL STATEMENTS FOR THE FINANCIAL
PERIOD FROM 1 JANUARY 2014 TO 31 MARCH 2014 IN RESPECT OF ISEC EYE
PTE. LTD. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . E-1
APPENDIX F – TERMS AND CONDITIONS AND PROCEDURES FOR APPLICATION . F-1
APPENDIX G – SUMMARY OF SELECTED ARTICLES OF ASSOCIATION OF OUR
COMPANY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . G-1
APPENDIX H – DESCRIPTION OF OUR SHARES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . H-1
APPENDIX I – SUMMARY OF RELEVANT MALAYSIA AND SINGAPORE LAWS AND
REGULATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-1
APPENDIX J – SUMMARY OF MALAYSIA LAW AND SINGAPORE LAW RELATING TO
TAXATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . J-1
APPENDIX K – RULES OF THE ISEC HEALTHCARE SHARE OPTION SCHEME . . . . . K-1
APPENDIX L – SINGAPORE AND MALAYSIA OPHTHALMOLOGY MARKET
OVERVIEW . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . L-1
TABLE OF CONTENTS
3
BOARD OF DIRECTORS : Sitoh Yih Pin (Non-Executive Chairman and Independent
Director)
Dr Lee Hung Ming (Executive Vice Chairman)
Dr Wong Jun Shyan (Executive Director and CEO)
Professor Low Teck Seng (Independent Director)
Lim Wee Hann (Independent Director)
COMPANY SECRETARY : Yoo Loo Ping (ACIS)
REGISTERED OFFICE : 101 Thomson Road
#09-04 United Square
Singapore 307591
PRINCIPAL PLACES OF
BUSINESS
: Malaysia
Level 7 & 8, Centrepoint South
The Boulevard, Mid Valley City
59200 Kuala Lumpur
Malaysia
229-G Jalan Burma
10050 Pulau Pinang
Malaysia
Singapore
Mount Elizabeth Novena Specialist Centre
38 Irrawaddy Road
Units #08-58 to 63
Singapore 329563
Lee Hung Ming Eye Centre
6A Napier Road
#03-00 Gleneagles Hospital
Singapore 258500
ISSUE MANAGER AND
SPONSOR
: PrimePartners Corporate Finance Pte. Ltd.
20 Cecil Street
#21-02 Equity Plaza
Singapore 049705
PLACEMENT AGENT : Maybank Kim Eng Securities Pte. Ltd.
50 North Canal Road
#03-01
Singapore 059304
SHARE REGISTRAR AND
SHARE TRANSFER OFFICE
: Boardroom Corporate & Advisory Services Pte. Ltd.
50 Raffles Place
#32-01 Singapore Land Tower
Singapore 048623
CORPORATE INFORMATION
4
SOLICITORS TO THE
PLACEMENT AND LEGAL
ADVISER TO OUR COMPANY
AS TO SINGAPORE LAW
: Rajah & Tann Singapore LLP
9 Battery Road
#25-01 Straits Trading Building
Singapore 049910
LEGAL ADVISER 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
INDEPENDENT AUDITORS
AND REPORTING
ACCOUNTANTS
: BDO LLP
21 Merchant Road
#05-01
Singapore 058267
Partner-in-charge: Leong Hon Mun Peter (a member of
the Institute of Singapore Chartered Accountants)
INDUSTRY RESEARCH
CONSULTANT
: Frost & Sullivan (S) Pte Ltd
100 Beach Road
#29-01/11 Shaw Tower
Singapore 189702
PRINCIPAL BANKERS : Malaysia
AmBank (M) Berhad
Level 26, Menara AmBank
8, Jalan Yap Kwan Seng
50450 Kuala Lumpur
Malaysia
Malayan Banking Berhad
Mid Valley Branch
G(E)-016, Ground Floor
Mid Valley Megamall, Mid Valley City
59200 Kuala Lumpur
Malaysia
Singapore
United Overseas Bank Limited
Shenton Way Branch
2 Shenton Way
#01-01 SGX Centre 1
Singapore 068804
RECEIVING BANKER : Malayan Banking Berhad
2 Battery Road
Maybank Tower
Singapore 049907
CORPORATE INFORMATION
5
In this Offer Document and the accompanying Application Forms, the following definitions applywhere the context so admits:
Group Companies
“Company” or “ISEC” : ISEC Healthcare Ltd.
“Group” : Our Company and our subsidiaries
“ISEC Eye” : ISEC Eye Pte. Ltd.
“ISEC KL” : ISEC Sdn. Bhd.
“ISEC Penang” : ISEC (Penang) Sdn. Bhd.
“ISEC Singapore” : International Specialist Eye Centre Pte. Ltd.
Other Corporations and Agencies
“Authority” or “MAS” : The Monetary Authority of Singapore
“CDP” : The Central Depository (Pte) Limited
“CPF” : The Central Provident Fund
“EPF” : The Employee Provident Fund
“Independent Auditors andReporting Accountants”
: BDO LLP
“IRAS” : The Inland Revenue Authority of Singapore
“Issue Manager andSponsor” or “PPCF”
: PrimePartners Corporate Finance Pte. Ltd.
“Lee Hung Ming EyeCentre” or “LHM EyeCentre”
: Lee Hung Ming Eye Centre, the name of the clinic andbusiness operated by Parkway Eye Centre (a soleproprietorship with Business Registration No. 53092774Lowned by PHS). Prior to September 2014, the clinic wasknown as Parkway Eye Centre
“MMC” : Malaysian Medical Council
“MOH Malaysia : The Ministry of Health, Government of Malaysia
“MOH Singapore” : The Ministry of Health, Government of Singapore
“PHS” : Parkway Hospitals Singapore Pte. Ltd.
DEFINITIONS
6
“Placement Agent” or
“MKES”
: Maybank Kim Eng Securities Pte. Ltd.
“Receiving Banker” : Malayan Banking Berhad
“SGX-ST” : Singapore Exchange Securities Trading Limited
“Share Registrar” : Boardroom Corporate & Advisory Services Pte. Ltd.
“SMC” : Singapore Medical Council
General
“1Q” : The three-month financial period ended, or as the case may
be, ending 31 March
“Application Forms” : The printed application 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 subscription for the Placement
Shares
“Articles” or “Articles of
Association”
: The articles of association of our Company
“associate” : (a) in relation to any Director, Chief Executive Officer,
Substantial Shareholder or Controlling Shareholder
(being an individual) means:
(i) his immediately family;
(ii) the trustees of any trust for which he or his
immediate family is a beneficiary or, in the case of
a discretionary trust, is a discretionary object; and
(iii) any company in which he or his immediate family
together (directly or indirectly) have an interest of
30% or more
(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 in the
equity of which it and/or such other company or
companies taken together (directly or indirectly) have an
interest of 30% or more
“Audit Committee” : The audit committee of our Company as at the date of this
Offer Document, unless otherwise stated
DEFINITIONS
7
“Audited Combined
Financial Statements”
: The “Independent Auditors’ Report and Audited Combined
Financial Statements for the Financial Years ended 31
December 2011, 2012 and 2013 in respect of ISEC
Healthcare Ltd. and its subsidiaries” and “Independent
Auditors’ Report and Audited Combined Financial Statements
for the Financial Years ended 31 December 2011, 2012 and
2013 in respect of ISEC Eye Pte. Ltd.” as set out in Appendix
B and Appendix C to this Offer Document, respectively
“Board” or “Board of
Directors”
: The board of Directors of our Company as at the date of this
Offer Document, unless otherwise stated
“Business Acquisition” : The business acquisition of the entire business of the LHM
Companies, as described in the section entitled
“Restructuring Exercise” of this Offer Document
“CAGR” : Compound Annual Growth Rate
“Catalist” : The sponsor-supervised listing platform of the SGX-ST
“Catalist Rules” : Section B of the Listing Manual of the SGX-ST, as amended,
modified or supplemented from time to time
“Centres of Excellence” : The centres of excellence as described in the section entitled
“General Information on Our Group − Business Overview −
Corporate Philosophy” of this Offer Document
“CEO” : Chief Executive Officer
“CFO” : Chief Financial Officer
“Companies Act” : The Companies Act, (Chapter 50) of Singapore, as amended,
modified or supplemented from time to time
“Controlling Shareholder” : (a) a person who holds directly or indirectly 15% or more of
the total number of issued shares excluding treasury
shares in our Company (unless otherwise determined by
the SGX-ST); or
(b) a person who in fact exercises control over our Company
“DGHM” : Director General of Health of Malaysia
“Directors” : The directors of our Company as at the date of this Offer
Document, unless otherwise stated
“DMS” : Director of Medical Services of Singapore
“EPS” : Earnings per Share
DEFINITIONS
8
“Executive Directors” : The executive Directors of our Company as at the date of this
Offer Document, unless otherwise stated
“Executive Officers” : The executive officers of our Group as at the date of this Offer
Document, unless otherwise stated
“FY” : Financial year ended or, as the case may be, ending 31
December
“GDP” : Gross domestic product
“GST” : Goods and services tax
“Independent Directors” : The independent Directors of our Company as at the date of
this Offer Document, unless otherwise stated
“Latest Practicable Date” : 16 September 2014, being the latest practicable date for the
purposes of lodgement of this Offer Document with the
SGX-ST, acting as agent on behalf of the Authority
“Listing” : The proposed listing and quotation of all our Shares on
Catalist
“Management Agreement” : The full sponsorship and management agreement dated
14 October 2014 entered into between our Company and the
Issue Manager and Sponsor pursuant to which the Issue
Manager and Sponsor agreed to manage and sponsor the
Placement, details as described in the section entitled “Plan of
Distribution – Management and Placement Arrangements” of
this Offer Document
“Market Day” : A day on which the SGX-ST is open for trading in securities
“Medical Act” : Medical Act 1971, Malaysia
“Medical Registration Act” : Medical Registration Act, Chapter 174 of Singapore
“Memorandum” : The memorandum of association of our Company
“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
Independent Directors) as at the date of this Offer Document,
unless otherwise stated
“NTA” : Net tangible assets
DEFINITIONS
9
“Offer Document” : This offer document dated 14 October 2014 issued by our
Company in respect of the Placement
“Options” : The share options which may be granted by our Company
pursuant to the Share Option Scheme
“Option Shares” : The new Shares which may be allotted and issued from time
to time upon the exercise of the Options
“our centres” : ISEC KL, ISEC Penang, ISEC Singapore and Lee Hung Ming
Eye Centre, where ISEC Eye provides its services
“PER” : Price earnings ratio
“Period Under Review” : The period which comprises FY2011, FY2012, FY2013 and
1Q2014
“PHFS Act” : Private Healthcare Facilities and Services Act 1998, Malaysia
“PHFS Regulations” : Private Healthcare Facilities and Services (Private Hospitals
and Other Private Healthcare Facilities) Regulations 2006,
Malaysia
“PHMC Act” : Private Hospitals and Medical Clinics Act, Chapter 248 of
Singapore, as amended, modified or supplemented from time
to time
“PHMC Regulations” : Private Hospitals and Medical Clinics Regulations 2003 of
Singapore
“PHS Service Agreement” : The service agreement dated 26 August 2014 entered into
between ISEC Eye and PHS, relating to services to be
provided by ISEC Eye to PHS in relation to LHM Eye Centre
“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
of this Offer Document
“Placement Agreement” : The placement agreement dated 14 October 2014 entered
into between our Company and the Placement Agent pursuant
to which the Placement Agent agreed to subscribe and/or
procure subscribers for the Placement Shares, details as
described in the section entitled “Plan of Distribution –
Management and Placement Arrangements” of this Offer
Document
“Placement Price” : S$0.28 for each Placement Share
DEFINITIONS
10
“Placement Shares” : The 70,000,000 new Shares which are the subject of the
Placement
“Pro Forma Combined
Financial Statements”
: The “Independent Auditors’ Report and Unaudited Pro Forma
Combined Financial Statements for the Financial Years ended
31 December 2011, 2012, 2013 and the Financial Period from
1 January 2014 to 31 March 2014” as set out in Appendix A to
this Offer Document
“Remuneration Committee” : The remuneration committee of our Company as at the date of
this Offer Document, unless otherwise stated
“Restructuring Exercise” : The corporate restructuring exercise undertaken in
connection with the Placement, as described in the section
entitled “Restructuring Exercise” of this Offer Document
“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 or modified from time to time
“SFR” : Securities and Futures (Offers of Investments) (Share and
Debentures) Regulations 2005 of Singapore
“Share Option Scheme” : The ISEC Healthcare Share Option Scheme, the terms of
which are set out in Appendix K to this Offer Document
“Share(s)” : Ordinary share(s) in the capital of our Company
“Shareholder(s)” : Person(s) who are registered as holder(s) of Shares in the
register of members of our Company, or where CDP is the
registered holder, the term “Shareholders” shall, in relation to
such Shares, mean Depositors whose Securities Accounts are
credited with Shares
“Substantial Shareholders” : Persons who have an interest in the Shares, where the total
votes attached to those Shares is not less than 5% of the total
votes attached to all Shares
“Unaudited Interim
Condensed Combined
Financial Information”
: The “Independent Auditors’ Review Report and Unaudited
Interim Condensed Combined Financial Statements for the
Financial Period from 1 January 2014 to 31 March 2014 in
respect of ISEC Healthcare Ltd. and its subsidiaries” and
“Independent Auditors’ Review Report and Unaudited Interim
Condensed Combined Financial Statements for the Financial
Period from 1 January 2014 to 31 March 2014 in respect of
ISEC Eye Pte. Ltd.” as set out in Appendix D and Appendix E
to this Offer Document, respectively
DEFINITIONS
11
Currencies, Units and Others
“%” or “per cent.” : Per centum
“m” : Metre
“RM” or “Ringgit Malaysia” : The lawful currency of Malaysia
“S$” or “Singapore Dollar” : The lawful currency of Singapore
“sq ft” : Square feet
All references to Dr Alan Ang in this Offer Document shall be a reference to Dr Alan Ang Jin Soon.
All references to Dr Cordelia Chan in this Offer Document shall be a reference to Dr Chan Mei Lan
Cordelia.
All references to Macy Thong in this Offer Document shall be a reference to Thong Mee Chee.
The expressions “associated company”, “associated entity”, “related corporation”, “Interested
Person”, “Interested Person Transaction”, “subsidiary”, “subsidiary entity” and “Substantial
Shareholder” shall have the meanings ascribed to them respectively in the SFA, the SFR, the
Companies Act and/or the Catalist Rules, as the case may be.
The expressions “Depositor”, “Depository Agent” and “Depository Register” shall have the
meanings ascribed to them respectively in Section 130A of the Companies Act.
Any word defined under the Companies Act, the SFA, the SFR, the Catalist Rules or any statutory
modification thereof and used in this Offer Document and the Application Forms shall, where
applicable, have the meaning ascribed to it under the Companies Act, the SFA, the SFR, the
Catalist Rules or any statutory modification thereto, as the case may be.
Words importing the singular shall, where applicable, include the plural and vice versa and words
importing the masculine gender shall, where applicable, include the feminine and neuter genders
and vice versa. References to persons shall include corporations.
The exchange rates used in this Offer Document are for reference only. No representation is made
that any Ringgit Malaysia amounts were, could have been, will be or could be converted into
Singapore Dollar amounts at any of the exchange rates used in this Offer Document, at any other
rate or at all. Please refer to the section entitled “Exchange Rate” of this Offer Document for
certain historical information on the exchange rate between Ringgit Malaysia and Singapore
Dollars.
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 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 shall be a
reference to Singapore time unless otherwise stated.
DEFINITIONS
12
References in this Offer Document to “our Group”, “we”, “our”, and “us” or any other grammatical
variations thereof shall unless otherwise stated, mean our Company, our Group or any member
of our Group as the context requires. For purposes of the section entitled “General Information on
Our Group – History”, reference to “our Group”, “we”, “our”, and “us” includes our Group and the
businesses acquired pursuant to the Business Acquisition.
Any discrepancies in the tables included herein between the listed amounts and the totals thereof
are due to rounding. Accordingly, figures shown as totals in certain tables may not be an arithmetic
aggregation of the figures that precede them. Where applicable, figures and percentages are
rounded off.
DEFINITIONS
13
To facilitate a better understanding of the business of our Group, the following glossary contains
an explanation and description of certain terms used in this Offer Document in connection with our
Group. The terms and their assigned meanings may not correspond to standard industry or
common meanings, as the case may be, or usage of these terms.
“anti-VEGF” : Anti Vascular Endothelial Growth Factor
“atropine 0.01% and 0.5%” : Eye drop used to reduce progression of myopia
“Blepharoplasty” : Plastic surgery on eyelids
“cataract” : Opacity of the natural lens resulting in reduced vision
“corneal transplantation” : Procedure whereby the diseased cornea is replaced with a
donor cornea in order to improve vision
“Epi-LASIK” : A form of LASIK which removes the epithelium of the cornea
instead of creating a cornea flap before laser ablation
“epiretinal” : The layer which is adjacent to the retina
“fluorescein angiography” : The study of retinal vasculature through intravenous injection
of a special chemical called fluorescein
“glaucoma” : Eye condition whereby the optic nerve is damaged
predominantly due to raised intraocular (eye) pressure
“ICG dyes” : Indocyanine green dyes
“intraocular lens” : Man-made lens implant which is typically used for cataract
surgery
“keratoconus” : Progressive corneal condition whereby the cornea becomes
conical shape resulting in poor vision
“LASEK” : Laser Assisted Epithelial Keratomileusis
“LASIK” : Laser Assisted in-situ Keratomileusis, a laser surgical
procedure for the correction of refractive errors
“microkeratome” : Mechanised high precision surgical blade used in LASIK
surgery
“oculoplastics” : Corrective or aesthetic plastic surgery performed near or
around the eye
“ophthalmologist” : Medical doctor or surgeon specialising in eye diseases
“ophthalmology” : Medical subspecialty in eye diseases
GLOSSARY OF TECHNICAL TERMS
14
“optometrist” : Professional specialising in refraction and glasses
prescription
“orbital reconstruction” : Surgery involving reconstruction of the structures around the
eye and eye socket
“orthoptics” : Medical specialty in the management of squint eye condition
and amblyopia (lazy eye)
“phacoemulsification” : Ultrasound-based surgical procedure for the removal of
cataract
“PRK” : Photorefractive Keratectomy
“pterygium” : Corneal condition whereby there is an abnormal growth of the
conjunctiva into the surface of the cornea
“Retinal Laser
Photocoagulation”
: Application of argon lasers on the retina to treat conditions
such as diabetic retinopathy and retinal tear
“retinopathy” : Disease of the retina
“strabismus” : Condition whereby there is an eye misalignment (squint)
“uveitis” : Inflammatory eye condition involving the inner structures of
the eye
“vitreoretinal” : Condition affecting the vitreous humour and the retina
GLOSSARY OF TECHNICAL TERMS
15
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 statements by forward-looking terms such as “anticipate”, “believe”,
“could”, “estimate”, “profit estimate”, “expect”, “intend”, “may”, “plan”, “will” and “would” or similar
words. However, you should note that these words are not the exclusive means of identifying
forward-looking statements. All statements regarding our expected financial position, trend
information, business strategies, plans and prospects are forward-looking statements.
These forward-looking statements, including without limitation, statements as to our revenue and
profitability, cost measures, planned strategy and anticipated expansion plans, expected growth
in demand, expected industry trends and any 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, the following:
(i) our dependence on our specialist doctors, health care professionals and management
personnel;
(ii) changes in political, social and economic conditions, the regulatory environment, laws and
regulations and interpretation thereof in the jurisdictions where we conduct business or
expect to conduct business;
(iii) the risk that we may be unable to realise our anticipated growth strategies and expected
internal growth;
(iv) changes in currency exchange rates;
(v) changes in the availability and prices of equipment which we require to operate our business;
(vi) changes in patient preferences and needs;
(vii) changes in competitive conditions and our ability to compete under such conditions, locally
and internationally;
(viii) changes in our future capital needs and the availability of financing and capital to fund these
needs; and
(ix) other factors beyond our control.
Some of these risk factors are discussed in greater detail in this Offer Document, in particular, but
not limited to, the discussions under the sections entitled “Risk Factors” and “Management’s
Discussion and Analysis of Results of Operations and Financial Position of our Pro Forma
Combined Financial Information” of this Offer Document. All forward-looking statements by or
attributable to us, or persons acting on our behalf, contained in this Offer Document are expressly
qualified in their entirety by such factors. These forward-looking statements are applicable only as
of the date of this Offer Document.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
16
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. None of us, the Issue Manager and Sponsor and the Placement Agent or any other
person represents or warrants that our actual future results, performance or achievements will be
as discussed in those statements.
Our actual future results may differ materially from those anticipated in these forward-looking
statements as a result of the risks faced by us. We, the Issue Manager and Sponsor and the
Placement Agent disclaim any responsibility to update any of those forward-looking statements or
publicly announce any revisions to those forward-looking statements to reflect future
developments, events or circumstances, 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 this Offer Document
but before the close of the Placement, we become aware of:
(a) a false or misleading statement or matter in this Offer Document;
(b) an omission from this Offer Document of any information that should have been included in
it under the SFA, the SFR or the Catalist Rules; or
(c) a new circumstance that has arisen since this Offer Document was lodged with the SGX-ST,
acting as agent on behalf of the Authority, which would have been required by the SFA, the
SFR or the Catalist Rules to be included in this Offer Document if it had arisen before this
Offer Document was lodged,
and that is materially adverse from the point of view of an investor, our Company may in
consultation with the Issue Manager and Sponsor and the Placement Agent, lodge a
supplementary or replacement offer document with the SGX-ST, acting as agent on behalf of the
Authority.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
17
Singapore
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 legal or regulatory requirements
of any jurisdiction, except as disclosed below and 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 us, the Issue Manager and Sponsor and the Placement Agent to inform themselves
about, and to observe and comply with, any such restrictions at their own expense and without
liability to us, the Issue Manager and Sponsor and the Placement Agent.
Malaysia
No approval, authorisation or recognition of or from the Securities Commission of Malaysia (the
“Commission”) has been applied for or will be obtained for the making available, offering for
subscription or purchase, or issuing an invitation to subscribe for or purchase, the Placement
Shares in Malaysia. Neither has nor will any prospectus been or will be registered with the
Commission.
Accordingly, the making available, offering for subscription or purchase, or issuing an invitation to
subscribe for or purchase, the Placement Shares in Malaysia may only be undertaken by the
holder of a Capital Markets Services Licence issued under the Capital Markets and Services Act
2007 (the “CMSA”) who carries on the business of dealing in securities and then only to Qualified
Persons (as hereinafter defined).
This Offer Document will only be lodged as a disclosure document with the Commission.
Accordingly, this Offer Document or any amendment or supplement to it may not be distributed in
Malaysia directly or indirectly for the purpose of making available, offering for subscription or
purchase, or issuing an invitation to subscribe for or purchase, the Placement Shares in Malaysia
except to a Qualified Person.
A “Qualified Person” is any of the following persons, and who by their acceptance of the delivery
of this Offer Document to them represent themselves as falling with the definition of one of such
persons:
(i) a closed end fund approved by the Commission;
(ii) a holder of a Capital Markets Services Licence under the CMSA;
(iii) a person who, if they acquire the Placement Shares, does so only pursuant to a private
placement, and as principal on terms that the Placement Shares are acquired at a
consideration of not less than RM250,000 or its equivalent in foreign currencies;
(iv) an individual whose total net personal assets, or total net joint assets with his or her spouse,
exceeds RM3,000,000 or its equivalent in foreign currencies, excluding the value of the
primary residence of the individual;
SELLING RESTRICTIONS
18
(v) an individual who has a gross annual income exceeding RM300,000 or its equivalent in
foreign currencies per annum in the preceding 12 months;
(vi) an individual who, jointly with his or her spouse, has a gross annual income RM400,000 or
its equivalent in foreign currencies per annum in the preceding 12 months;
(vii) a corporation with total net assets exceeding RM10,000,000 or its equivalent in foreign
currencies based on the last audited accounts;
(viii) a partnership with total net assets exceeding RM10,000,000 or its equivalent in foreign
currencies;
(ix) a bank licensee or insurance licensee as defined in the Labuan Financial Services and
Securities Act 2010 (Act 704); and
(x) an Islamic bank licensee or takaful licensee as defined in the Labuan Islamic Financial
Services and Securities Act 2010 (Act 705).
SELLING RESTRICTIONS
19
LISTING ON CATALIST
An application has been made to the SGX-ST for permission to deal in, and for listing and
quotation of, all our Shares already issued, the Placement Shares and the Option Shares, on
Catalist. Such permission will be granted when our Company has been admitted to Catalist. Our
acceptance of applications and the allotment of the Placement Shares will be conditional upon,
among others, the completion of the Placement, which is subject to certain conditions, including
permission being granted by the SGX-ST to deal in, and for quotation of, all our Shares, including
the Placement Shares and the Option Shares, on Catalist. 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 applicant’s own risk, if the completion of the Placement does not
occur because the said permission is not granted or for any reason, and the applicant will not have
any claim against us, the Issue Manager and Sponsor and the Placement Agent. No Shares will
be allotted on the basis of this Offer Document later than six (6) months after the date of
registration of this Offer Document by the SGX-ST, acting as agent on behalf of the Authority.
Companies listed on Catalist may carry higher investment risk when compared with larger or more
established companies listed on the Main Board of the SGX-ST. In particular, companies may list
on Catalist without a track record of profitability and there is no assurance that there will be a liquid
market in the shares or units of shares traded on Catalist. You should be aware of the risks of
investing in such companies and should make the decision to invest only after careful
consideration and, if appropriate, consultation with your professional adviser(s).
Neither the Authority nor the SGX-ST has examined or approved the contents of this Offer
Document. Neither the Authority nor the SGX-ST assumes any responsibility for the contents of
this Offer Document, including the correctness of any of the statements or opinions made or
reports contained in this Offer Document. The SGX-ST does not normally review the application
for admission but relies on the Issue Manager and 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 Placement 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 or the Option
Shares.
A copy of this Offer Document has been lodged with and registered by the SGX-ST, acting as
agent on behalf of the Authority. Registration of the Offer Document by the SGX-ST, acting as
agent on behalf of the Authority, does not imply that the SFA, 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 or the Option Shares,
as the case may be, being offered or in respect of which an invitation is made, for investment.
Save as disclosed in this Offer Document, we have not lodged or registered this Offer Document
in any other jurisdiction.
We are subject to the provisions of the SFA and the Catalist Rules regarding corporate disclosure.
In particular, 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 this Offer Document;
(b) an omission from this Offer Document of any information that should have been included in
it under the requirements of the SFA, the SFR or the Catalist Rules; or
DETAILS OF THE PLACEMENT
20
(c) a new circumstance that has arisen since this Offer Document was lodged with the SGX-ST,
acting as agent on behalf of the Authority, and which would have been required by the
requirements of the SFA, the SFR or the Catalist Rules to be included in this Offer Document
if it had arisen before this Offer Document was lodged,
that is materially adverse from the point of view of an investor, we 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,
acting as agent on behalf of the Authority, 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, we shall either:
(i) (A) within two (2) days (excluding any Saturday, Sunday or public holiday) from the date
of lodgement of the supplementary or replacement offer document, give the applicants
notice in writing of how to obtain, or arrange to receive, a copy of the supplementary or
replacement offer document, as the case may be, and provide the applicants with an
option to withdraw their applications; and (B) take all reasonable steps to make
available within a reasonable period the supplementary or replacement offer document,
as the case may be, to the applicants who have indicated they wish to obtain, or who
have arranged to receive, a copy of the supplementary or replacement offer document;
(ii) within seven (7) days from the date of lodgement of the supplementary or replacement
offer document, give the applicants the supplementary or replacement offer document,
as the case may be, and provide the applicants with an option to withdraw their
applications; or
(iii) (A) treat the applications as withdrawn and cancelled, in which case the applications
shall be deemed to have been withdrawn and cancelled; and (B) we shall within seven
(7) days from the date of lodgement of the supplementary or replacement offer
document, as the case may be, 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, we shall either:
(i) (A) within two (2) days (excluding any Saturday, Sunday or public holiday) from the date
of lodgement of the supplementary or replacement offer document, as the case may be,
give the applicants notice in writing of how to obtain, or arrange to receive, a copy of
the same and provide the applicants with an option to return to us the Placement Shares
which they do not wish to retain title in; and (B) take all reasonable steps to make
available within a reasonable period the supplementary or replacement offer document,
as the case may be, to the applicants who have indicated they wish to obtain, or who
have arranged to receive, a copy of the supplementary or replacement offer document;
DETAILS OF THE PLACEMENT
21
(ii) within seven (7) days from the date of lodgement of the supplementary or replacement
offer document, give the applicants the supplementary or replacement offer document,
as the case may be, and provide the applicants with an option to return to us the
Placement Shares which they do not wish to retain title in; or
(iii) (A) treat the issue of the Placement Shares as void, in which case the issue of the
Placement Shares shall be deemed void; and (B) we shall within seven (7) days from
the date of lodgement of the supplementary or replacement offer document, as the case
may be, return all monies paid in respect of any application, without interest or any
share of revenue or other benefit arising therefrom and at the applicant’s own risk.
An applicant who wishes to exercise his option under paragraph (a)(i) or (ii) to withdraw his
application shall, within 14 days from the date of lodgement of the supplementary or replacement
offer document, notify us of this, whereupon we shall, within seven (7) days from the receipt of
such notification, pay to him all monies paid by him on account of his application for the Placement
Shares without interest or any share of revenue or other benefit arising therefrom and at the
applicant’s own risk and the applicant shall not have any claim against us, the Issue Manager and
Sponsor and/or the Placement Agent.
An applicant who wishes to exercise his option under paragraph (b)(i) or (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, as the case may be, notify us of this and return all
documents, if any, purporting to be evidence of title to those Placement Shares, to us, whereupon
we shall, within seven (7) days from the receipt of such notification and documents, if any, pay to
him all monies paid by him for those 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 shall not have any claim against us, the Issue Manager and
Sponsor and/or the 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 or no further Shares to which this Offer
Document relates, be allotted or issued. Such circumstances will include a situation where this
Offer Document (i) contains any statement or matter which, in the Authority’s opinion, is false or
misleading (ii) omits any information that should have been included in it under the SFA, (iii) does
not, in the Authority’s opinion, comply with the requirements of the SFA, or (iv) 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 of the
Placement Shares pursuant to the Placement 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 Placement
Shares pursuant to the Placement 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.
DETAILS OF THE PLACEMENT
22
Such monies paid in respect of an application will be returned to the applicants at their own risk,
without interest or any share of revenue or other benefit arising therefrom, and they will not have
any claim against our Company, the Issue Manager and Sponsor and/or the Placement Agent.
This Offer Document has been seen and approved by our Directors, and they collectively and
individually accept full responsibility for the accuracy of the information given in this Offer
Document and confirm, after making all reasonable enquiries, that to the best of their knowledge
and belief, this Offer Document constitutes full and true disclosure of all material facts about the
Listing, our Company and its subsidiaries and our Directors are not aware of any facts the
omission of which would make any statement in this Offer Document misleading.
Neither our Company, the Issue Manager and Sponsor, the 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 other advisers for business, legal or tax advice regarding an investment in our
Shares.
No person has been or is authorised to give any information or to make any representation not
contained in this Offer Document in connection with the Placement and, if given or made, such
information or representation must not be relied upon as having been authorised by us, the Issue
Manager and Sponsor and the 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 in the affairs of our Company or our subsidiaries or in
any statements of fact or information contained in this Offer Document since the date of this Offer
Document. Where such changes occur and are material or required to be disclosed by law, the
SGX-ST and/or any other regulatory or supervisory body or agency, we will comply with the
relevant provisions and, if required, make an announcement of the same to the SGX-ST and to the
public and/or lodge a supplementary or replacement offer document with the SGX-ST, acting as
agent on behalf of the Authority. You should take note of any such announcement and, upon
release of such an announcement, shall be deemed to have been given notice of such changes.
Save as expressly stated in this Offer Document, nothing herein is, or may be relied upon as, a
promise or representation as to our future performance or policies. The Placement Shares are
offered for subscription solely on the basis of the instructions contained and representations made
in the Offer Document.
This Offer Document has been prepared solely for the purpose of the Placement and may not be
relied upon by any 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 to subscribe for
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
23
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
Maybank Kim Eng Securities Pte. Ltd.
50 North Canal Road
#03-01
Singapore 059304
An electronic copy of this Offer Document is also available on the SGX-ST website,
http://www.sgx.com.
The Placement will be open immediately upon the registration of the Offer Document by the
SGX-ST, acting as agent on behalf of the Authority (the “Registration”) and will remain open
until 12.00 noon on 23 October 2014 or for such further period or periods as our Directors
may, in consultation with the Issue Manager and Sponsor and the 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, as the case may be.
Details of the procedures to subscribe for the Placement Shares are set out in “Appendix
F – Terms and Conditions and Procedures for Application” to this Offer Document.
DETAILS OF THE PLACEMENT
24
An indicative timetable for the Placement and trading in our Shares is set out below:
Indicative date/time Event
23 October 2014 at 12.00 noon Close of Application List
28 October 2014 at 9.00 a.m. Commence trading on a “ready” basis
31 October 2014 Settlement date for all trades done on a “ready” basis
The above timetable is only indicative as it assumes that the date of closing of the Application List
is 23 October 2014, the date of admission of our Company to Catalist is 28 October 2014, the
SGX-ST’s shareholding spread requirement will be complied with and the Placement Shares will
be issued and fully paid-up prior to 28 October 2014.
The above timetable and procedures may be subject to such modifications as the SGX-ST may,
in its absolute discretion, decide, including the decision to permit commencement of trading on a
“ready” basis and the commencement date of such trading.
In the event of any changes in the closure of the Application List or the time period during which
the 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 newspaper(s) in Singapore.
We will publicly announce the level of subscription and the results of the distribution of the
Placement Shares as soon as it is practicable after the close of the Application List through
the channels described in (a) and (b) above.
Investors should consult the SGX-ST’s 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 their brokers on the date on which trading on a “ready” basis will commence.
INDICATIVE TIMETABLE FOR LISTING
25
THE PLACEMENT
The Placement is for 70,000,000 Placement Shares 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 our Company following consultation with the Issue Manager and Sponsor and the
Placement Agent, taking into consideration, inter alia, the prevailing market conditions and
estimated market demand for our 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 “Plan of Distribution – Management and Placement Arrangements” of this Offer
Document, we have appointed PPCF and PPCF has agreed to act as full sponsor for the Listing.
The Issue Manager and Sponsor will receive a management fee for its services rendered in
connection with the Placement.
The Placement Shares are made available to retail and institutional investors. Applications for the
Placement Shares may be made by way of printed Application Forms or such other forms of
application as the Issue Manager and Sponsor and the Placement Agent deem appropriate. The
terms and conditions and procedures for application and acceptance are set out in “Appendix F
− Terms and Conditions and Procedures for Application” to this Offer Document.
Pursuant to the terms and conditions contained in the Placement Agreement as disclosed in the
section entitled “Plan of Distribution – Management and Placement Arrangements” of this Offer
Document, the Placement Agent has agreed to subscribe for and/or procure subscribers for the
Placement Shares, at the Placement Price. The Placement Agent may, at its absolute discretion,
appoint one or more sub-placement agents for the Placement Shares.
Subscribers for the Placement Shares may be required to pay brokerage of up to 1.0% of the
Placement Price (and the prevailing goods and services tax thereon, if applicable) to the
Placement Agent or any sub-placement agent as may be appointed by the Placement Agent as
well as stamp duties and other charges.
SUBSCRIPTION FOR THE PLACEMENT SHARES
Each of our Independent Directors intends to subscribe for Placement Shares. Save as disclosed,
none of our Directors or Substantial Shareholders intends to subscribe for the Placement Shares
pursuant to the Placement. As far as we are aware, none of our Independent Directors, the
members of our Company’s management or employees intends to subscribe for more than 5.0%
of the Placement Shares in the Placement.
To the best of our knowledge, 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.
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 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 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
26
No Shares shall be issued and allotted on the basis of this Offer Document later than six (6)
months after the date of registration of this Offer Document by SGX-ST, acting as agent on behalf
of the Authority.
MANAGEMENT AND PLACEMENT ARRANGEMENTS
Pursuant to the Management Agreement dated 14 October 2014 between our Company and PPCF
as the Issue Manager and Sponsor, our Company appointed PPCF to manage and sponsor the
Listing. PPCF will receive a management fee for such services rendered.
Subject to the consent of the SGX-ST being obtained, the Management Agreement may be
terminated by the Issue Manager and Sponsor at any time before the close of the Application List
on the occurrence of certain events including the following:
(a) PPCF becomes aware of any material breach by our Company and/or its agent(s) of any
warranties, representations, covenants or undertakings given by our Company to PPCF in
the Management Agreement;
(b) there shall have been, since the date of the Management Agreement, any change or
prospective change in or any introduction or prospective introduction of any legislation,
regulation, policy, directive, guideline, rule or byelaw by any relevant government or
regulatory body, whether or not having the force of law, or any other occurrence of similar
nature that would materially change the scope of work, responsibility or liability required of
PPCF; or
(c) there is a conflict of interest for PPCF, or any dispute, conflict or disagreement with our
Company or our Company wilfully fails to comply with any advice from or recommendation
of PPCF.
Pursuant to the Placement Agreement dated 14 October 2014 between our Company and MKES
as the Placement Agent, our Company appointed MKES as the Placement Agent, and MKES
agreed to procure subscriptions for the Placement Shares at the Placement Price for a placement
commission of 3.0% of the Placement Price per Placement Share, payable by our Company. Our
Company will also pay the Placement Agent an incentive fee of up to 3.1% of the Placement Price
per Placement Share. MKES may, at its absolute discretion, appoint one or more sub-placement
agents for the Placement.
Other than pursuant to the Management Agreement and the Placement Agreement, there are no
contracts, agreements or understandings between our Company and any person or entity that
would give rise to any claim for brokerage commission, finder’s fees or other payments in
connection with the subscription of the Placement Shares.
Save as aforesaid, no commission, discount or brokerage, has been paid or other special terms
granted within the two (2) years preceding the Latest Practicable Date or is payable to any
Director, promoter, expert, proposed Director or any other person for subscribing or agreeing to
subscribe or procuring or agreeing to procure subscriptions for any Shares or debentures in our
Company.
PLAN OF DISTRIBUTION
27
INTERESTS OF THE ISSUE MANAGER AND SPONSOR
In the reasonable opinion of our Directors, PPCF does not have a material relationship with our
Company save as disclosed below and in the section entitled “Plan of Distribution – Management
and Placement Arrangements” of this Offer Document:
(a) PPCF is the Issue Manager and Sponsor in relation to the Listing; and
(b) PPCF will be the continuing sponsor of our Company for a period of at least three (3) years
from the date our Company is admitted and listed on Catalist.
INTERESTS OF THE PLACEMENT AGENT
In the reasonable opinion of our Directors, MKES does not have a material relationship with our
Company save as disclosed below and in the section entitled “Plan of Distribution – Management
and Placement Arrangements” of this Offer Document:
(a) MKES is the Placement Agent in relation to the Placement;
(b) Malayan Banking Berhad, an associated company of MKES, is one of our Principal Bankers
and our Receiving Banker; and
(c) MKES, its associated companies and/or its affiliates (including Malayan Banking Berhad)
(“Maybank Group of Companies”) may, in the ordinary course of business, extend credit
facilities or engage in commercial banking, investment banking, private banking, securities
trading, asset and funds management, research, insurance and/or advisory services with any
member of our Group, their respective affiliates and/or our Shareholders, and may receive
a fee in respect thereof. In addition, in the ordinary course of its business, any member of the
Maybank Group of Companies may at any time offer or provide services to or engage in any
transactions (on its own account or otherwise) with any member of our Group, their
respective affiliates, our Shareholders, or any other entity or person, and may receive a fee
in respect thereof. This may include but is not limited to, holding long or short term positions
in securities issued by any member of our Group and their respective affiliates, and trading
or otherwise effecting transactions, for its own account or the accounts of its customers, in
debt or equity (or related derivative instruments) of any member of our Group and their
affiliates.
PLAN OF DISTRIBUTION
28
The information contained in this summary is derived from, and should be read in conjunction with,
the full text of this Offer Document. As it is a summary, it does not contain all of the information
that prospective investors should consider before investing in our Shares. Prospective investors
should read this entire Offer Document carefully, especially the section entitled “Risk Factors” of
this Offer Document and our financial statements and related notes before deciding on whether
or not to invest in our Shares.
OUR COMPANY
Our Company was incorporated in the Republic of Singapore on 2 January 2014 under the
Companies Act as a private limited company, under the name “ISEC Healthcare Pte. Ltd.”. Our
Company’s registration number is 201400185H. Our Company was converted into a public limited
company and the name of our Company was changed to “ISEC Healthcare Ltd.” in connection
therewith on 24 September 2014. Our Company became the holding company of our Group
following the completion of the Restructuring Exercise on 26 September 2014. For more
information, please refer to the section entitled “Restructuring Exercise” of this Offer Document.
BUSINESS OVERVIEW
We are a comprehensive medical eye care service provider with ambulatory surgical centres in
Malaysia and Singapore. Our doctors are specialised in the fields of cataract and refractive
surgery (including LASIK), vitreoretinal diseases, corneal and external eye diseases, glaucoma,
uveitis, oculoplastics, facial cosmetics and aesthetics surgery, adult strabismus and paediatric
ophthalmology, and most of our specialist doctors are shareholders of our Company.
Further details are set out in the sections entitled “General Information on Our Group – History”
and “General Information on Our Group – Business Overview” of this Offer Document.
COMPETITIVE STRENGTHS
Our competitive strengths are:
• We are a team of highly qualified and experienced specialist doctors;
• We provide high quality and comprehensive range of eye care services;
• We are well positioned to capture the growing demand for private eye care services arising
from an ageing population, rising income levels, increasing private insurance coverage and
the growing medical tourism sector in South-East Asia;
• We operate on an asset-light, strong cash flow business model;
• We are able to leverage on the scale of our business and replicate our business model, which
features state-of-the-art technology, across other markets in the Asia Pacific region; and
• Our business model aligns the interests of our specialist doctors with our Group and with our
Shareholders and we have been able to retain and grow our pool of specialist doctors.
Further details are set out in the section entitled “General Information on Our Group – Competitive
Strengths” of this Offer Document.
OFFER DOCUMENT SUMMARY
29
PROSPECTS
Overall, the continuous growth of the ophthalmology services market in Malaysia and Singapore
shows that there remains an unmet demand for current ophthalmology market players to expand
and for market entrants to tap on. Common market drivers for the private ophthalmology services
market include:
• Ageing population;
• Increased awareness;
• Rising income level;
• Increased uptake of private insurance; and
• Growth of medical tourism market.
A detailed discussion of our prospects and an overview of our industry is set out in the section
entitled “Industry Overview – Prospects” and “Appendix L – Singapore and Malaysia
Ophthalmology Market Overview” of this Offer Document respectively.
BUSINESS STRATEGIES AND FUTURE PLANS
Our business strategies and future plans are:
• Growing the ISEC brand name as a Centre of Excellence for eye care services and
expanding into the Asia Pacific region;
• Expanding our talent pool of specialist doctors and management staff;
• Building our regional network; and
• Investing in the latest technology and allowing our specialist doctors to keep up to date with
the newest procedures.
Further details are set out in the section entitled “General Information on Our Group – Business
Strategies and Future Plans” of this Offer Document.
OUR CONTACT DETAILS
Our registered office is at 101 Thomson Road, #09-04 United Square, Singapore 307591. The
telephone and facsimile numbers for our registered office of business are +65 6258 2262 and
+65 6258 2272, respectively. Our internet address is http://www.isechealthcare.com. Information
contained on our website does not constitute part of this Offer Document.
OFFER DOCUMENT SUMMARY
30
Placement Size : 70,00,000 Placement Shares.
The Placement Shares will, upon issue and allotment, rank
pari passu in all respects with the existing issued Shares.
Placement Price : S$0.28 for each Placement Share, payable in full on
application.
The Placement : The Placement comprises an offering of 70,000,000
Placement Shares at the Placement Price, subject to and on
the terms and conditions of this Offer Document.
Purpose of the Placement : Our Directors believe that the listing of our Company and the
quotation of our Shares on Catalist will enhance our public
image locally and overseas and enable us to raise funds from
the capital markets for the expansion of our business
operations.
Listing Status : Prior to the Listing, there has been no public market for our
Shares. Our Shares will be quoted in Singapore Dollars on
Catalist, subject to admission of our Company to Catalist and
permission for dealing in, and for quotation of, our Shares
being granted by the SGX-ST.
Use of Proceeds : Please refer to the section entitled “Use of Proceeds and
Expenses of the Placement” of this Offer Document for more
details.
Risk Factors : Investing in our Shares involves risks which are
described in the section entitled “Risk Factors” of this
Offer Document.
THE PLACEMENT
31
The exchange rate between RM and S$ as at the Latest Practicable Date is RM2.5600 to S$1.00.
The table below sets out the highest and lowest exchange rates between RM and S$1.00 in each
of the six (6) months prior to the Latest Practicable Date. The table indicates how much RM may
be bought with S$1.00 in each such month.
RM: S$1.00
Highest(1) Lowest(1)
March 2014 2.6052 2.5773
April 2014 2.6071 2.5816
May 2014 2.6074 2.5608
June 2014 2.5818 2.5598
July 2014 2.5723 2.5499
August 2014 2.5732 2.5206
1 September 2014 to the Latest Practicable Date 2.5600 2.5229
The table below sets out, for each of the financial years and period included, the average and
closing exchange rates between RM and S$. The average exchange rate is calculated by using
the average of the exchange rates on the last day of each month during each financial year/period.
Where applicable, the exchange rates in this table are used for the translation of our Group’s
financial statements disclosed elsewhere in this Offer Document.
RM: S$1.00
Average(1) Closing(1)
FY2011 2.4338 2.4456
FY2012 2.4720 2.5041
FY2013 2.5178 2.5912
1Q2014 2.5990 2.5923
The above exchange rates should not be construed as representations that the RM amounts
actually represent such S$ amounts or could be converted into S$, at the rates indicated, at any
other rate or at all.
Note:
(1) The above exchange rates have been quoted or calculated with reference to exchange rates quoted from Bloomberg
L.P.. Bloomberg L.P. has not provided its consent, for the purposes of Section 249 of the SFA, to the inclusion of
the information extracted from the relevant reports and is therefore not liable for such information under Sections
253 and 254 of the SFA. While we have taken reasonable actions to ensure that the information is extracted
accurately and fairly from such reports, and has been included in this Offer Document in its proper form and context,
neither we nor any party has conducted an independent review of the information contained in such reports nor
verified the accuracy of the contents of the relevant information.
EXCHANGE RATES
32
Placement Price 28 cents
NAV(1)
Pro forma NAV per Share based on the unaudited pro forma combined
statements of financial position of our Group as at 31 March 2014 (the
“Pro forma NAV”):
(a) before adjusting for the estimated net proceeds of the Placement
and based on the pre-Placement share capital of 388,500,000
Shares
3.28 cents
(b) after adjusting for the estimated net proceeds of the Placement
and based on the post-Placement share capital of 458,500,000
Shares
6.34 cents
Premium of Placement Price over the Pro forma NAV per Share:
(a) before adjusting for the estimated net proceeds of the Placement
and based on the pre-Placement share capital of 388,500,000
Shares
753.66%
(b) after adjusting for the estimated net proceeds of the Placement
and based on the post-Placement share capital of 458,500,000
Shares
341.64%
NTA(2)
Pro forma NTA per Share based on the unaudited pro forma combined
statements of financial position of our Group as at 31 March 2014 (the
“Pro forma NTA”):
(a) before adjusting for the estimated net proceeds of the Placement
and based on the pre-Placement share capital of 388,500,000
Shares
2.78 cents
(b) after adjusting for the estimated net proceeds of the Placement
and based on the post-Placement share capital of 458,500,000
Shares
5.91 cents
Premium of Placement Price over the Pro forma NTA per Share:
(a) before adjusting for the estimated net proceeds of the Placement
and based on the pre-Placement share capital of 388,500,000
Shares
907.19%
(b) after adjusting for the estimated net proceeds of the Placement
and based on the post-Placement share capital of 458,500,000
Shares
373.77%
EPS(3)
Pro forma EPS based on the unaudited pro forma combined statements
of comprehensive income of our Group for FY2013 and our Company’s
pre-Placement share capital of 388,500,000 Shares
1.55 cents
PLACEMENT STATISTICS
33
Pro forma EPS based on the unaudited pro forma combined statements
of comprehensive income of our Group for FY2013 and our Company’s
pre-Placement share capital of 388,500,000 Shares, assuming that the
Service Agreements had been in place since the beginning of FY2013
1.44 cents
PER
Ratio of Placement Price to pro forma EPS of our Group for FY2013
based on our Company’s pre-Placement share capital of 388,500,000
Shares
18.06 times
Ratio of Placement Price to pro forma EPS of our Group for FY2013
based on our Company’s pre-Placement share capital of 388,500,000
Shares, assuming that the Service Agreements had been in place since
the beginning of FY2013
19.44 times
Net Operating Cash Flow(4)
Pro forma net operating cash flow per Share based on the unaudited pro
forma combined statements of cash flows of our Group for FY2013 and
our Company’s pre-Placement share capital of 388,500,000 Shares
2.14 cents
Pro forma net operating cash flow per Share based on the unaudited pro
forma combined statements of cash flows of our Group for FY2013 and
our Company’s pre-Placement share capital of 388,500,000 Shares,
assuming that the Service Agreements had been in place since the
beginning of FY2013
2.03 cents
Price to Net Operating Cash Flow
Ratio of Placement Price to pro forma net operating cash flow per Share
of our Group for FY2013 based on our Company’s pre-Placement share
capital of 388,500,000 Shares
13.08 times
Ratio of Placement Price to pro forma net operating cash flow per Share
of our Group for FY2013 based on our Company’s pre-Placement share
capital of 388,500,000 Shares, assuming that the Service Agreements
had been in place since the beginning of FY2013
13.79 times
Market Capitalisation
Market capitalisation based on the Placement Price and post-Placement
share capital of 458,500,000 Shares
S$128,380,000
Notes:
(1) This is computed based on net asset value attributable to owners of the parent.
(2) This is computed based on net tangible assets attributable to owners of the parent.
(3) This is computed based on profit attributable to owners of the parent.
(4) Net operating cash flow refers to the net cash flows from operating activities.
PLACEMENT STATISTICS
34
Investors should consider carefully the following risk factors and all other information contained
in this Offer Document before deciding to invest in our Shares. Some of the following
considerations relate principally to the industry in which we operate and our business in general.
Other considerations relate principally to general social, economic, political and regulatory
conditions, the securities market and ownership of our Shares, including possible future dilution
in the value of our Shares.
You should also note that certain of the statements set forth below constitute “forward-looking
statements” that involve risks and uncertainties. If any of the following risk factors and
uncertainties develops into actual events, our business, financial condition, results of business
operations or cash flows may be adversely affected. In such circumstances, the trading price of
our Shares could decline and investors may lose all or part of their investment. To the best of our
Directors’ belief and knowledge, all the risk factors that are material to investors in making an
informed judgement have been set out below.
RISKS RELATING TO OUR BUSINESS
We are dependent on our Executive Vice Chairman, Dr Lee Hung Ming, and Chief Executive
Officer, Dr Wong Jun Shyan, and our specialist doctors
Our Company’s specialist medical eye care services business is spearheaded by our Executive
Vice Chairman, Dr Lee Hung Ming, and Chief Executive Officer, Dr Wong Jun Shyan, who each
plays an instrumental role in our Group. Although we strive to continue to develop our talent pool
in order to ensure management continuity, the loss of the services of Dr Lee Hung Ming or Dr
Wong Jun Shyan may have a material adverse effect on our Group’s management, business,
financial condition, results of business operations and prospects.
Our Group’s performance and growth will depend substantially on its ability to attract and retain
doctors with the requisite expertise in the specialist medical eye care service field. The type of
services our Group may provide is partly determined by our specialist doctors and the skills which
they possess. We also rely on our specialist doctors for their knowledge and experience in
corporate management, strategic planning and business practices of the medical industry. We are
also dependent on the technical expertise of our Medical Board, which comprise 10 of our senior
specialist doctors. Please refer to the section entitled “General Information on Our Group –
Service Quality Control – Medical Board” of this Offer Document for details on our Medical Board.
The demand for experienced specialist doctors is highly competitive and the supply in this field is
comparatively limited. Many of our existing specialist doctors have established patient bases and
referral networks. If any of them are no longer with our Group, their respective patient bases and
referral networks may choose specialist medical eye care services elsewhere. Our patient base,
business, financial condition, results of business operations and prospects may be materially and
adversely affected if we cannot attract and retain doctors with the requisite expertise in the
specialist medical eye care service field.
We are dependent on our healthcare professionals and our management personnel
Our Group’s performance and growth will depend on our ability to attract and retain other
healthcare professionals such as optometrists, nurses, clinical staff and pharmacy technicians to
support the services provided by our Group. Healthcare professionals require professional
licences to practise and it may take several years to train as a healthcare professional. The fact
that doctors and nurses qualified in one country may not be recognised in another country makes
it challenging for our Group to employ doctors and nurses qualified to work in the countries in
which our Group operates or countries which our Group wishes to expand to. Our continued
RISK FACTORS
35
success is also dependent on our ability to retain our key management personnel, who have
extensive experience in the medical industry and who are responsible for formulating and
implementing our growth, corporate development and overall business strategies. If our Group is
unable to attract or retain the necessary personnel or are subject to increased manpower costs,
this may materially and adversely affect the quality of the services provided by our Group, our
business, financial condition, results of business operations and prospects.
The PHS Service Agreement between our subsidiary, ISEC Eye, and PHS if terminated or not
renewed, may have a material disruption to our business
Pursuant to the PHS Service Agreement, ISEC Eye shall provide specialist medical
ophthalmology services to PHS in relation to LHM Eye Centre, located at Gleneagles Hospital, to
be performed by our specialist doctor(s). Under the PHS Service Agreement, PHS manages the
daily operations of LHM Eye Centre. As such, ISEC Eye is not involved in the administration of
LHM Eye Centre and its doctors utilise the infrastructure and administrative framework provided
by PHS. In addition, it is a term of the PHS Service Agreement that Dr Lee Hung Ming shall
practise exclusively at LHM Eye Centre (through ISEC Eye). ISEC Eye contributed to
approximately 48.4%, 49.9%, 40.8% and 39.4% of our Group’s combined gross profit in FY2011,
FY2012, FY2013 and 1Q2014, respectively.
The terms of the PHS Service Agreement is for a period of five (5) years and will expire on
31 August 2019 unless terminated or renewed. Upon the expiry of the PHS Service Agreement,
the parties have the right to review and revise the terms and conditions and we may not be able
to renew the agreement on terms and conditions favourable to us or agree to any renewal. Either
PHS or ISEC Eye may terminate the PHS Service Agreement at any time by giving to the other
party not less than three (3) months’ prior written notice. In the event that the PHS Service
Agreement is terminated prematurely or is not renewed, our specialist doctor(s) practicing at LHM
Eye Centre, in particular, Dr Lee Hung Ming, will need time to relocate their practice to alternative
premises and may not continue to receive referrals from PHS. Under the PHS Service Agreement,
patient records of all patients whom our specialist doctor(s) attend to at LHM Eye Centre belong
to PHS. Please refer to the section entitled “General Information on Our Group – Business
Overview – Our Business” of this Offer Document for more details. In the event that the PHS
Service Agreement is terminated or not renewed, such patient records will remain with PHS. The
termination or non-renewal of the PHS Service Agreement, and/or disruptions due to relocation
may have a material adverse effect on our Group’s business, financial condition, results of
business operations, and prospects.
Furthermore, under the PHS Service Agreement, doctors outside of our Group may consult and
perform services at LHM Eye Centre. In the event that there is any negative press in relation to
LHM Eye Centre whether or not due to any of our specialist doctors, our Group may be materially
and adversely affected.
Our insurance coverage and indemnities may not cover all our damages and losses
We are exposed to potential liability risks that are inherent to the provision of healthcare services
and healthcare-related assets. There is no assurance that our insurance coverage would be
sufficient to cover all damages and losses and as such, any uninsured damages and loss in
excess of insured limits may materially and adversely affect our business and financial
performance.
RISK FACTORS
36
We have maintained insurance coverage for medical malpractice indemnity. In the event of any
claim or litigation arising from medical negligence of our specialist doctors which is not covered
by our Group’s medical malpractice indemnity insurance, we cover our risk with back-to-back
arrangements with our specialist doctors and rely on the insurance coverage of our specialist
doctors’ medical professional liability insurance. However, we cannot assure you that such
insurance coverage or indemnity arrangements will be sufficient to cover all potential liabilities
and risks that we face. There is also no certainty whether any or all of our insurers or specialist
doctors will remain solvent and meet their contracted obligations to provide the coverage we are
contracted for. If our arrangements for insurance or indemnification are not sufficient to cover
claims, including in the case of claims exceeding policy aggregate limitations or exceeding the
resources of the indemnifying party, we may be required to make substantial payments, which
may have a material adverse effect on our business, financial position, results of business
operations and prospects.
We experience competition from other similar eye care specialist providers
The healthcare business is highly competitive, and competition among healthcare providers for
patients has intensified in recent years. We compete with clinics, government-owned hospitals,
private hospitals, hospitals affiliated with medical colleges and other medical facilities in the area
of specialist medical eye care services in the regions in which we operate. Moreover, some of
these competitors may have longer operating histories, be more established and have greater
financial, personnel and other resources than us. Competitors may price their services at a lower
quantum than ours and exert pricing pressures on us. Some of our competitors may also have
plans to expand their facilities, which may exert further pricing and recruitment pressure on us.
Increased competition may result in lower profit margins and a loss of market share. Competitors
may also offer greater convenience or better services or facilities than what we provide.
In addition, quality measures required in countries in which we operate may trend towards greater
clinical transparency. This may have an unanticipated impact on our competitive position and
patient volumes. If we achieve poor results (or results that are lower than our competitors) in
respect of these quality measures or on patient satisfaction surveys or if our standard charges are
higher than our competitors, our patient volumes could decline.
Our success depends on our ability to compete effectively against our competitors. If we are
forced to reduce the price of our services or are unable to attract patients and specialist doctors
and other healthcare professionals to our Group, our business, financial position, results of
business operations and prospects may be materially and adversely affected.
Increase in operating costs, namely lease rental rates, and risk of relocation may cause
disruption to our business operations
Our Group leases the premises of our existing centres (save for LHM Eye Centre). Our present
lease terms for these centres range from periods of three (3) years to 10 years. Upon the expiry
of the leased tenure, the landlords have the right to review and revise the terms and conditions
of the lease agreements. We face the possibility of an increase in rental by the landlords or not
being able to renew the leases at all or on terms and conditions favourable to us. Any increase in
rentals would inevitably increase our operating costs, thereby affecting our profits. If the leases for
these centres are not renewed, we may incur additional costs and our business and operations
may suffer from disruptions due to relocation and loss of prime locations. The details of the leases
of each of these centres are set out in the section entitled “General Information on Our Group –
Material Properties and Fixed Assets” of this Offer Document.
RISK FACTORS
37
Our business may be affected if we are removed from the panel of preferred healthcare
providers of insurance companies
Certain of our centres are currently on the panel of preferred healthcare providers of various
insurance companies. Patients who have taken up insurance policies with the respective
insurance companies may conveniently direct the payment of our fees from medical services
provided at our centres to their insurers. For further details, please refer to the section entitled
“General Information on Our Group – Competitive Strengths” of this Offer Document. Our
business, results of business operations may be materially and adversely affected in the event
that the relevant centres are removed from such panels of preferred healthcare providers of
insurance companies.
Compliance with applicable governmental regulations may be costly and adversely affect
our competitive position and results of business operations
We are subject to laws, rules and regulations in Malaysia and Singapore governing, among other
things:
• conduct of our business operations;
• additions to facilities and services;
• adequacy of medical care;
• quality of medical facilities, equipment and services;
• purchase of medications and pharmaceutical drugs;
• noise pollution, discharge of pollutants to air and water and handling and disposal of
bio-medical and other hazardous waste;
• qualifications of medical and support personnel;
• confidentiality, maintenance and security issues associated with health-related information
and medical records; and
• screening, stabilisation and transfer of patients who have emergency medical conditions.
The medical healthcare industry is a highly regulated industry and we are also subject to safety,
health and environmental laws and regulations in the countries we operate in. These regulations
are stringent and are subject to constant change and amendments. It is possible that they will
become significantly more stringent in the future and result in higher operating and compliance
costs. If we are held to be in violation of relevant regulatory requirements, including conditions in
the permits required for our business operations, by courts or governmental agencies, we may
have to pay fines, modify, suspend or discontinue our business operations, incur additional
operating costs or make capital expenditures. The relevant authorities may suspend, or deny
renewal of our Group’s or our specialist doctors’ licences or qualifications. Our employees may
also be faced with criminal charges in some instances. In addition, proceedings against us related
to such safety, health or environmental matters could also result in financial and reputation
damage to our Group. These scenarios may have a material and adverse effect on our business,
financial condition, results of business operations and prospects.
RISK FACTORS
38
There is no assurance that upon the expiration of the licences, approvals or permits under which
our Group carries on its business operations, our Group will be able to successfully renew them
in a timely manner or at all, or that the renewal of these licences will be granted on terms
acceptable to us, or that if the relevant authorities enact new laws and regulations, our Group will
be able to successfully comply with these requirements.
We are reliant, to some extent, on the brand names and trademarks in our business
Our key subsidiaries, ISEC KL, ISEC Penang, ISEC Singapore and ISEC Eye, each rely upon
certain brand names and trademarks in their respective businesses. For example, our “ISEC”
trademark is utilised by members of the Group. If we fail to protect and enhance our brand
identities or intellectual property, the market recognition of each of our brands and trademarks
may deteriorate. Any claims and legal actions brought forward by our patients may also have a
negative impact on our brand image. In addition, ISEC Eye provides services to PHS in relation
to Lee Hung Ming Eye Centre located at Gleneagles Hospital and ISEC Singapore is located at
Mount Elizabeth Novena Specialist Centre, which are medical facilities of Parkway Holdings
Limited, and we may be adversely affected by negative perceptions of the “Gleneagles”, “Mount
Elizabeth”, “Novena Specialist Centre” or “Parkway” brands and trademarks. PHS had, prior to
September 2014, operated Lee Hung Ming Eye Centre under the name of Parkway Eye Centre.
Pursuant to the PHS Service Agreement, PHS may rename LHM Eye Centre at its discretion. We
are unable to assure that our patient referrals and business operations would not be affected by
any name changes. In such events, we may not be able to operate our healthcare businesses at
optimum level and, as a result, our business, financial condition, results of business operations
and prospects may be materially and adversely affected.
We may not be able to successfully integrate our business operations
We may face difficulties integrating our existing business operations in Malaysia and Singapore.
In the event we expand our business we may also face difficulties integrating such new
businesses with our existing business operations. We may not be able to coordinate and
consolidate our corporate and administrative functions, including the integration of internal
controls. In the event that we are unable to effectively or successfully manage and integrate our
business operations, we may not be able to realise the expected synergies, cost savings and
growth of our Group. As a result, our business, financial condition, results of business operations
and prospects may be materially and adversely affected.
There is no assurance that our future plans will be successful
Our Group’s business has been in specialist medical eye care services in general. We intend to
expand our business operations in markets in the Asia Pacific region. Such expansion plans may
include the setting up of new subsidiaries, establishment of joint ventures, expansion of existing
centres and the acquisition of assets, businesses and companies complementary to our existing
business operations.
We may not be able to effectively manage such a larger enterprise or achieve the desired
profitability from such expansion. Significant funding will also be required for such expansion
plans. In the event that we do not have sufficient internal funds available and are unable to secure
third party financing on acceptable terms, or at all, to fund such expansion plans, we may not be
able to proceed with our expansion plans.
RISK FACTORS
39
The scope and complexity of our business operations would also increase significantly due to the
expansion of our geographical reach. The future ventures we plan to undertake could be subject
to certain risks, including but not limited to:
(a) difficulties arising from operating a significantly larger and more complex organisation and
expanding into new territories such as having to deal with unfamiliar government authorities
and regulations;
(b) difficulties in the integration of the assets and business operations of new centres, strategic
alliances and joint ventures with our existing facilities and centres;
(c) the failure to realise expected profitability or growth;
(d) the failure to realise expected synergies and cost savings;
(e) unforeseen legal, regulatory, contractual, labour or other issues; and
(f) difficulties arising from language, cultural and geographical barriers.
In the event that we are unable to effectively or successfully manage our expansion, our business,
financial condition, results of business operations and prospects may be materially and adversely
affected.
We may not be able to identify expansion opportunities or experience difficulties in
implementing such projects
Our growth depends, to a certain extent, on our ability to fund, establish or acquire and manage
additional centres, strategic alliances and joint ventures. Such expansions are capital expenditure
intensive. We may not be able to identify suitable sites for new centres or facilities, or expand,
improve and augment our existing businesses. The number of suitable acquisition or expansion
opportunities may be limited and we may not be able to negotiate attractive terms for such
acquisitions or expansions, which may command high valuations. We may also be unable to
secure the necessary financing for such opportunities. If our Group is unable to successfully
identify opportunities for the aforementioned expansions or face difficulties in the process of such
expansions, our Group’s business, financial condition, results of business operations and
prospects may be materially and adversely affected.
Our Group may also expand to other cities where we do not possess the same level of familiarity
with the regulations and business climate in those cities. We cannot assure investors that we will
be able to obtain the requisite licences, approvals and permits in those cities. Any failure by our
Group to obtain the requisite licences, approvals and permits in a timely manner and any
unforeseen difficulties arising from the new and unfamiliar territories may have a material adverse
effect on our Group’s business, financial condition, results of business operations and prospects.
RISK FACTORS
40
RISKS RELATING TO THE MEDICAL HEALTHCARE INDUSTRY
Our revenue is dependent on the provision of specialised healthcare services to individual
patients who opt for private healthcare services, which could decline due to a variety of
factors
We may be affected by the financial ability and the willingness of individual patients to pay for
private healthcare services. A slowdown in the economies in which we operate may lead to a
decrease in demand for private healthcare services as more individual patients may opt for
subsidised public healthcare services or treatment from other private healthcare providers that are
more price competitive. In the event of changes in the coverage of our patients’ insurance policies,
certain medical procedures and services we offer may no longer be subsidised and/or may be
considered elective. In addition, some of the services which we provide are elective in nature and
individual patients may consider delaying or postponing such procedures. Our revenue would be
materially and adversely affected if individual patients are more cautious about their medical
expenses and less keen to pay for private healthcare services. A decrease in the demand for
private healthcare services and/or private specialist medical eye care from individual patients may
have a material adverse effect on our business, financial performance and prospects.
We may be affected by the spread or outbreak of any contagious or virulent diseases
The spread of any contagious or virulent diseases may potentially affect our business operations.
In the event that any of the employees in our centres is infected with any contagious or virulent
diseases, we may be required to temporarily shut down our centres for an uncertain period of time
to contain the spread of such disease. Potential patients from overseas may also decide to seek
medical treatment from healthcare providers in other countries. This would negatively impact our
business.
Challenges faced by the healthcare industry may also have an effect on our Group
Our business, financial condition, results of business operations and prospects may be affected
by the challenges currently faced by the healthcare industry, including but not limited to:
(a) economic and business climate at local, regional and international levels;
(b) increase in the threat of terrorism and occurrence of natural and man-made disasters that
affect travel security or the global economy may reduce the number of medical travellers;
(c) improvements in the quality of healthcare services in other countries may affect the number
of medical travellers coming to our Group’s centres and facilities for the specialist medical
eye care services;
(d) technological and pharmaceutical improvements that increase the cost of provide, or reduce
the demand for, healthcare;
(e) rising costs of medicines and pharmaceutical drugs;
(f) stricter laws and regulations relating to the protection of patient information from
unauthorised disclosure;
(g) stricter laws and regulations governing the purchase and dispensation of medicines and
pharmaceutical drugs; and
RISK FACTORS
41
(h) reputational and potential financial risk to our business operations caused by the
independent actions or negative publicity of doctors, including the process they charge for
their services.
For example, many medical supplies (especially medical drugs) are patented products and
equipment maintenance and consumables are typically tied to the original equipment
manufacturer. As such, healthcare institutions, including our Group which makes purchases
(including those of equipment and supplies) for our operations, may have lesser bargaining power
as there may be fewer available alternatives. If our Group is unable to effectively address the
abovementioned challenges, there may be a material adverse effect on our Group’s business,
financial condition, results of business operations and prospects.
We are subject to risks of medical and legal claims, regulatory actions and professional
liability arising from the provision of our specialist medical eye care services and business
operations
The provision of healthcare and medical services entails inherent risks of liability. Our Group may
be subject to complaints or legal action arising out of the conduct of our business and the
performance of services provided by us. Complaints, allegations and legal actions, with or without
merit, may be made or taken against us and/or our healthcare professionals in relation to, inter
alia, our services, the marketing activities we conduct, negligence or medical malpractice. Such
complaints, allegations and legal actions, regardless of their validity, may lead to negative
publicity, which may affect the number of patients visiting our centres.
Our Group’s financial performance may be materially and adversely affected if (a) the damages
assessed and the legal costs incurred are substantial and (b) judgment is made against our Group
which may harm our professional standing and market reputation. Medical malpractice litigation
or disciplinary actions from governing professional bodies may be brought against our specialist
doctors. If such medical malpractice litigation or disciplinary action is not decided in our favour or
our specialist doctors’ favour, our business, financial position, results of business operations and
prospects may be materially and adversely affected. There is also no assurance that the medical
and legal claims that may be made against us will not be in excess of the amount covered by our
insurance policies or that such insurance policies are comprehensive and cover all types of
claims.
We may be involved from time to time in material disputes with various parties in the ordinary
course of our business. These disputes may lead to legal or other proceedings, and may result in
damage to our reputation, substantial costs and diversion of our resources and management’s
attention. If such legal proceedings occur, we cannot assure you as to their outcome, and any
negative outcome may materially and adversely affect our business, financial condition and
results of business operations.
We may be exposed to risks in relation to the disposal of medical waste and the use of
certain medical equipment
Part of our operations will involve the disposal of medical waste such as needles, used surgical
items and other common by-products of clinics and day surgery centres, which we dispose of
through accredited contractors. We are required to dispose of medical waste and use our medical
equipment in accordance with procedures prescribed by law. Failure to comply with these
procedures may expose us to fines or suspension by the relevant authorities and any injury or
damage caused by the wrongful disposal of medical waste or misuse of medical equipment may
RISK FACTORS
42
expose us to civil claims from injured parties. If the above were to occur, our financial
performance, financial condition, professional standing and market reputation will be materially
and adversely affected.
We may be affected by technological advances or failures and other challenges related to
our medical equipment and information technology systems
Our medical equipment include sophisticated and expensive equipment, including without
limitation such equipment used for cataract surgery, LASIK and retinal disease treatment. Medical
equipment often needs to be upgraded as innovation can make existing equipment obsolete.
Replacement, upgrading or maintenance of equipment may involve significant costs. In addition,
because of the high costs of medical equipment, we may not maintain back-up equipment, and,
therefore, if such equipment is damaged, our ability to provide the relevant services to our patients
may be impaired. If we are unable to keep up with technological advances, our patients may turn
to other medical facilities which have more advanced equipment and our competitive edge will be
reduced, which may have a material adverse effect on our business, financial condition, results of
business operations and prospects. Please refer to the section entitled “General Information on
Our Group – Technology” of this Offer Document for more information on our medical equipment
and technology.
Our information technology systems help us manage clinical systems, medical records and
inventory. Any technical failures associated with our information technology systems, including
those caused by computer viruses and unauthorised tampering, or if our systems are not
upgraded as needed, we may experience interruptions in our business, which may materially and
adversely affect our business operations.
We may be exposed to risks in relation to the confidentiality of our patients’ medical
records under data protection regulations in Malaysia and Singapore
We are subject to regulations protecting personal data, including patients’ medical records, in the
regions in which we operate. As a healthcare provider, we may be subject to liability as the result
of any theft or misuse of our patients’ personal information stored in our system. In Malaysia,
regulations governing private healthcare facilities require such healthcare facilities to maintain an
appropriate patient medical records system to keep medical records for each patient and to be
responsible for safeguarding the information on the patients’ medical records against loss,
tampering or use by unauthorised persons. Under the Malaysian Personal Data Protection Act
2010, failure to keep personal data from theft or misuse may be considered an offence. Any
contravention of these regulations would render the person committing the offence liable on
conviction to a fine or imprisonment. Similarly, in Singapore, regulations governing the business
operations of medical clinics as well as the Personal Data Protection Act (No. 26 of 2012) require
relevant organisations to keep and maintain proper medical records. In addition, we are required
to take all reasonable steps to ensure that medical records are accurate, complete and up-to-date
and to implement adequate safeguards to protect the medical records in our possession and
under our control against accidental or unlawful loss or modification, or unauthorised access, use
or similar risks. We are unable to assure the security of such data in the event we are subject to
unauthorised tampering or suffer technical failures, which may have a material and adverse effect
on our business, results of business operations, financial condition and prospects.
RISK FACTORS
43
RISKS RELATING TO OUR COUNTRIES OF OPERATION
We are subject to political, economic and social developments as well as the laws,
regulations and licensing requirements in Malaysia, Singapore and elsewhere
Our business, prospects, financial condition and results of business operations may be materially
and adversely affected by political, economic, social and legal developments that are beyond our
control in the countries in which we operate in. Such political and economic uncertainties may
include risks of war, terrorism, nationalism, expropriation or nullification of contracts, changes in
interest rates, economic growth, national fiscal and monetary policies, inflation, deflation,
methods of taxation and tax policy. Negative developments in the socio-political climate of
Malaysia, Singapore and the region may also materially and adversely affect our Group’s
business, financial condition, results of business operations and prospects. Countries in the
region are in a state of rapid political, economic and social changes, which will entail risks to our
business and operations if we are to expand in the region in future. As such, we are unable to
assure you that we will be able to adapt to the local conditions, regulations and business practices
and customs in future. Any changes implemented by the governments of the countries in which we
operate resulting, inter alia, in currency and interest rate fluctuations, capital restrictions, and
changes in duties and taxes detrimental to our business could materially and adversely affect our
business operations and financial performance.
Our Group may be adversely affected by the uncertain global economic outlook
Our business is susceptible to the general economic conditions in Malaysia, Singapore and other
countries in which we operate. Factors such as GDP growth, disposable income and
unemployment rates may indirectly affect our business operations.
Given the uncertainties of the future economic outlook, there is no assurance that we will be able
to grow our business, or that we will be able to react promptly to any change in economic
conditions. In the event that we fail to react promptly to the changing economic conditions, our
performance and profitability could be adversely affected. Our business performance, future plans
and business operations may be materially and adversely affected if these conditions deteriorate
in the future.
Exchange rate instability may adversely affect our business, financial condition, results of
business operations and prospects
Our Company and certain of our subsidiaries are incorporated in Singapore and the reporting
currency of our statutory financial statements is presented in Singapore Dollar. However, a
significant proportion of our subsidiaries’ functional currencies are Ringgit Malaysia, and must be
translated into Singapore Dollar for consolidation into our Group’s consolidated financial
statements. For this purpose, the accounts of our subsidiaries whose functional currency is in
Ringgit Malaysia must be translated into Singapore Dollar at every reporting date.
Generally, monetary assets and liabilities are translated from the respective functional currencies
into Singapore Dollar using the exchange rate of the relevant reporting balance sheet date, while
non-monetary assets and liabilities are translated using their historical dates. Statements of
comprehensive income are generally translated using the average exchange rate for the reporting
period. Any currency exchange gain or loss arising from the translation process is recognised as
other comprehensive income and accumulated in the foreign currency translation reserve under
RISK FACTORS
44
equity. If the resulting translation differences are significant, they may materially and adversely
affect the results and shareholders’ fund position of our Group. Further, the computation of bank
covenants and debt servicing ratios may also be affected.
In addition, our Group is exposed to foreign exchange risk on sales, purchases, cash and cash
equivalents, receivables and payables that are denominated in a currency other than the
respective functional currencies of our Group entities. Any decline in the value of Singapore Dollar
or Ringgit Malaysia may lead to a decrease in our net income and cash flow amounts. The above
may also cause effective increases in payments of interest expenses and repayment of principal
amounts on fixed obligations and indebtedness denominated in currencies other than the
functional currencies of our key subsidiaries. Such situations may have a material adverse effect
on our business, financial condition, results of business operations and prospects.
We may be exposed to foreign exchange control risk
Our Group may be subject to exchange control or repatriation restrictions in relation to our
foreign-incorporated subsidiaries in their respective countries of operation and our Group may
encounter difficulties or delay in relation to the receipt of divestments and dividends due to such
exchange controls existing in such countries.
In Malaysia, there are no longer any exchange controls with respect to the repatriation of foreign
portfolio funds (largely consisting of proceeds from the sale of stocks listed on Bursa Malaysia
Securities Berhad). However, there is no assurance that the government of Malaysia will not
re-impose exchange control measures in the future. In the event of such re-imposition or
introduction of new exchange control measures, investors may not be able to carry out the
repatriation or payment between resident companies and non-resident companies of Malaysia for
a specified period of time, or may only do so after paying tax or levy, or by obtaining consent from
Bank Negara Malaysia (“BNM”).
Under the current exchange control notices issued by the Foreign Exchange Administration
(“FEA”) of BNM, resident companies, such as ISEC KL and ISEC Penang, are allowed to make
or receive payment in Ringgit Malaysia in Malaysia to or from non-resident companies under
circumstances such as, amongst others, settlement of services, income earned or expense
incurred in Malaysia. For the purpose of payment arising from the settlement of services, resident
companies are allowed to receive such payment in foreign currency from non-resident companies
in any manner. If payments between resident and non-resident companies are for purposes other
than as set out above, the express written consent of BNM will be required. Any change of such
exchange control regulations in Malaysia may materially and adversely affect our business,
financial condition, results of business operations and prospects.
RISKS RELATING TO INVESTMENT IN OUR SHARES
Investments in securities quoted on Catalist involve a higher degree of risk and can be less
liquid than shares quoted on the Main Board of the SGX-ST
An application has been made for our Shares to be listed for quotation on Catalist, a listing
platform designed primarily for fast-growing and emerging or smaller companies to which a higher
investment risk tends to be attached as compared to larger or more established companies. An
investment in shares quoted on Catalist may carry a higher risk than an investment in shares
quoted on the Main Board of the SGX-ST. Catalist was newly formed in December 2007 and the
future success and liquidity in the market of our Shares cannot be guaranteed.
RISK FACTORS
45
There has been no prior public market for our Shares and there may not be an active or
liquid market for our Shares affecting the trading price of our Shares
Prior to the listing of our Shares on Catalist, there has been no public market for our Shares.
Although we have made an application to the SGX-ST for our Shares to be listed for quotation on
Catalist, there can be no assurance that an active public market will develop or be sustained after
the listing of our Shares on Catalist. There is also no assurance that the market price for our
Shares will not decline below the Placement Price. Liquidity of a securities market is often a
function of the volume of the underlying shares that are publicly held by unrelated parties. Active,
liquid trading markets generally result in lower price volatility and more efficient execution of buy
and sell orders for investors. If an active public market for our Shares does not develop after the
listing of our Shares on Catalist, the market price and liquidity of our Shares may be materially and
adversely affected.
The Placement Price may not necessarily be indicative of the market price of the Shares after the
Listing is complete and investors may be unable to resell their Shares at or above the Placement
Price. The prices at which our Shares will trade after the Listing will be determined by the market
and may be influenced by many factors, including:
(a) our financial results, our past and present business operations, and the prospects for, and
timing of, our future revenues and cost structures;
(b) our present development and prospects, and those of the industry in which we compete;
(c) the valuation of publicly-traded companies that are engaged in business activities similar to
ours; and
(d) any volatility in the securities markets of Singapore.
New investors will incur immediate dilution in NAV per Share
The Placement Price of our Shares is substantially higher than our Pro forma NAV per Share
based on the post-Placement issued share capital. Investors who subscribe for Shares in the
Placement will therefore experience immediate and significant dilution of approximately 77.4 per
cent per Share. If we are liquidated based on the Pro forma NAV immediately following the
Placement, each investor who subscribed for Shares would receive less than the price they paid
for the Share.
Our share price may fluctuate significantly in future and you may lose all or part of your
investment, and litigation may be brought against us
The market price of our Shares may fluctuate significantly and rapidly as a result of, amongst
others, the following factors, some of which are beyond our control:
(a) variation in our results of business operations;
(b) changes in securities analysts’ estimates of our results of business operations and
recommendations;
(c) announcements by us of significant contracts, acquisitions, strategic alliances or joint
ventures or capital commitments;
RISK FACTORS
46
(d) additions or departures of key personnel;
(e) fluctuations in stock market prices and volume;
(f) involvement in litigation and/or investigations by government authorities;
(g) general economic and stock market conditions; and
(h) discrepancies between our actual operating results and those expected by investors and
securities analysts.
The stock markets have from time to time experienced significant price and volume fluctuations
that have affected the market prices of securities. These fluctuations often have been unrelated
or disproportionate to the operating performance of publicly-traded companies. In the past,
following periods of volatility in the market price of a particular company’s securities, an investor
may lose all or part of his investment and litigation has sometimes been brought against that
company. If similar litigation is instituted against us, it could result in substantial costs and divert
management’s attention and resources from our core business.
Future issuance of Shares by us and sale of Shares by our existing Shareholders may
adversely affect the price of our Shares
In the event we issue or our Shareholders sell substantial amounts of our Shares in the public
market following this Placement, the price of our Shares may be materially and adversely affected.
Such issues or sales may also make it difficult for us to issue new Shares and raise the necessary
funds in the future at a time and price we deem appropriate.
Except as otherwise described in the section entitled “Shareholders – Moratorium” of this Offer
Document, there will be no restriction on the ability of our Shareholders to sell their Shares either
on the SGX-ST or otherwise.
Investors may not be able to participate in future rights issues or certain other equity
issues of our Shares
In the event that we issue new Shares, we will be under no obligation to offer those Shares to our
existing Shareholders at the time of issue, except where we elect to conduct a rights issue.
However, in electing to conduct a rights issue or certain other equity issues, we will have the
discretion and may also be subject to certain regulations as to the procedures to be followed in
making such rights available to Shareholders or in disposing of such rights for the benefit of such
Shareholders and making the net proceeds available to them. In addition, we may not offer such
rights to our existing Shareholders having an address in jurisdictions outside of Singapore.
Accordingly, certain Shareholders may be unable to participate in future equity offerings by us and
may experience dilution in their shareholdings as a result.
RISK FACTORS
47
Negative publicity which includes those relating to any of our Directors, Executive Officers
or Controlling Shareholder may adversely affect our Share price
Negative publicity or announcements relating to any of our Directors, Executive Officers or
Controlling Shareholder may materially and adversely affect the market perception of our Group
or the performance of the price of our Shares, whether or not it is justified. For instance, such
negative publicity may arise from unsuccessful attempts in joint ventures, acquisitions or
take-overs, or involvement in insolvency proceedings.
Control by our Controlling Shareholder of our share capital after the Placement may limit
your ability to influence the outcome of decisions requiring the approval of Shareholders
After the completion of the Placement, our Controlling Shareholder, namely Dr Lee Hung Ming, will
hold in aggregate approximately 34.4% of the issued share capital of our Company. As a result,
our Controlling Shareholder will be able to significantly influence our corporate actions such as
mergers or take-over attempts in a manner which may not be in line with the interests of our public
Shareholders. He will also have veto power in relation to any shareholder action or approval
requiring a vote by way of special resolution except in situations where they are required by the
Catalist Rules, the SGX-ST or undertakings given by him and his associates to abstain from
voting. Such concentration of ownership may also have the effect of delaying, preventing or
deterring a change in control of our Group which may not benefit our Shareholders.
We may require additional funding in the form of equity or debt for our future growth which
may cause dilution in Shareholders’ equity interest and/or restrict our business operations
We have attempted to estimate our funding requirements for the implementation of our growth
plans as set out in the section entitled “General Information on Our Group – Business Strategies
and Future Plans” of this Offer Document.
In the event that the costs of implementing such plans should exceed these estimates significantly
or if we come across opportunities to grow through joint ventures, strategic alliances, acquisitions
or investment opportunities, which cannot be predicted at this juncture, and if our funds generated
from our business operations prove insufficient for such purposes, we may need to raise additional
funds to meet these funding requirements. These additional funds may be raised by issuing equity
or debt securities or by borrowing from banks or other resources. We cannot ensure that we will
be able to obtain any additional financing on terms that are acceptable to us, or at all. If we are
unable to do so, our future plans and growth may be materially and adversely affected.
Such financing, even if obtained, may be accompanied by conditions that limit our ability to pay
dividends or require us to seek lenders’ consent for payment of dividends, or restrict our freedom
to operate our business by requiring lenders’ consent for certain corporate actions. Any additional
debt financing may, apart from increasing interest expense and gearing, contain restrictive
covenants with respect to dividends, future fund raising exercises and other financial and
operational matters. If we are unable to procure the additional funding that may be required on
acceptable terms or at all or if we are unable to service our potential new debt financing, our
financial position and results, business operations, future growth and prospects will be materially
and adversely affected.
An issue of Shares or other securities to raise funds will dilute Shareholders’ equity interests and
may, in the case of a rights issue, require additional investments by Shareholders. Further, an
issue of Shares below the then prevailing market price will also affect the value of Shares then
held by investors.
RISK FACTORS
48
Dilution in Shareholders’ equity interests may occur even if the issue of shares is at a premium to
the market price. In addition, any additional debt funding may restrict our freedom to operate our
business as it may have conditions that:
(a) limit our ability to pay dividends or require us to seek consents for the payment of dividends;
(b) increase our vulnerability to general adverse economic and industry conditions;
(c) require us to dedicate a portion of our cash flow from business operations to repayments of
our debt, thereby reducing the availability of our cash flow for capital expenditures, working
capital and other general corporate purposes; and
(d) limit our flexibility in planning for, or reacting to, changes in our business and our industry.
The current disruptions, volatility or uncertainty of the credit markets could limit our ability to
borrow funds or cause our borrowings to be more expensive. As such, we may be forced to pay
unattractive interest rates, thereby increasing our interest expense, decreasing our profitability
and reducing our financial flexibility if we take on additional debt financing.
We may not be able to pay dividends in the future
Our ability to declare dividends to our Shareholders in the future will be contingent on our future
financial performance and distributable reserves of our Company. This is in turn dependent on our
ability to implement our future plans, and on regulatory, competitive and technical factors and
other factors such as general economic conditions, demand for and selling prices of our products
and services and other factors exclusive to the medical healthcare industry. Any of these factors
could have a material adverse effect on our business, financial position and results of business
operations, and hence there is no assurance that we will be able to pay dividends to our
Shareholders after the completion of the Placement.
Further, in the event that we are required to enter into any loan arrangements with any financial
institutions, covenants in the loan agreements may also limit when and how much dividends we
can declare and pay out.
RISK FACTORS
49
USE OF PROCEEDS
The estimated net proceeds to be raised from the Placement, after deducting estimated expenses
incurred in relation to the Placement of approximately S$3.3 million, will be approximately S$16.3
million.
We intend to use our gross proceeds from the issue of Placement Shares primarily as follows:
Use of proceeds
Amount in
aggregate
As a percentage
of gross proceeds
from the
Placement
(S$’000) (%)
Business expansion in the Asia Pacific region
(including Malaysia and Singapore) 13,800 70.4
General working capital purposes 2,500 12.8
Listing expenses 3,300 16.8
Total 19,600 100.0
Further details of our use of proceeds may be found in the section entitled “General Information
on Our Group – Business Strategies and Future Plans” of this Offer Document.
The foregoing discussion represents our best estimate of our allocation of the proceeds of the
Placement based on our current plans and estimates regarding our anticipated expenditures. The
Audit Committee will monitor the allocation and use of the proceeds. Actual expenditures may vary
from these estimates and we may find it necessary or advisable to reallocate the net proceeds
within the categories described above or to use portions of the net proceeds for other purposes.
In the event that we decide to reallocate the net proceeds of the Placement for other purposes,
we will publicly announce our intention to do so through a SGXNET announcement to be posted
on the internet at the SGX-ST website, http://www.sgx.com. In addition, our Company will make
periodic announcements on the use of the proceeds from the Placement as and when the
proceeds from the Placement are materially disbursed, and provide a status report on the use of
the proceeds attributable to our Company from the Placement in our annual reports.
Pending the deployment of the net proceeds to be raised from the Placement as aforesaid, we
may use the funds as working capital or invest in short-term money market instruments as our
Directors may, in their absolute discretion, deem fit.
In the opinion of our Directors, no minimum amount must be raised by the Placement.
None of the proceeds of the Placement will be used to discharge, reduce or retire any
indebtedness of our Group.
USE OF PROCEEDS AND EXPENSES OF THE PLACEMENT
50
EXPENSES OF THE PLACEMENT
The estimated amount of expenses of the Placement and of the application for listing, including
placement commission, management fees, audit and legal fees, advertising and printing
expenses, fees payable to the SGX-ST and all other incidental expenses in relation to this
Placement is approximately S$3.3 million. Such expenses will be borne by us and deducted from
the gross proceeds from the Placement.
A breakdown of these estimated expenses to be borne by us in relation to the Placement is as
follows:
Expenses
Amount in
aggregate
As a percentage
of gross proceeds
from the
Placement
(S$’000) (%)
Listing and application fees 40 1.2
Professional fees 1,552 47.0
Placement commission and incentive fees(1) 1,192 36.1
Miscellaneous expenses 516 15.7
Total 3,300 100.0
Note:
(1) Pursuant to the Placement Agreement dated 14 October 2014 between our Company and MKES as the Placement
Agent, our Company appointed MKES as the Placement Agent, and MKES agreed to procure subscriptions for the
Placement Shares at the Placement Price for a placement commission of 3.0% of the Placement Price per
Placement Share, payable by our Company. Our Company will also pay the Placement Agent an incentive fee of up
to 3.1% of the Placement Price per Placement Share.
USE OF PROCEEDS AND EXPENSES OF THE PLACEMENT
51
Our Company was incorporated on 2 January 2014 and has not distributed any cash dividend on
our Shares since incorporation. Our subsidiary ISEC KL has distributed cash dividends amounting
to an aggregate of approximately S$951,271, S$1,118,880 and S$3,002,350 in FY2011, FY2012
and FY2013, respectively. Our Group did not distribute any cash dividends in 1Q2014. Save as
disclosed, none of our subsidiaries has distributed any cash dividends on our Shares in the Period
Under Review.
Although we do not have a formal dividend policy, subject to the Dividend Factors, we currently
intend to distribute an annual dividend of no less than 25.0% of our net profits attributable to
Shareholders as dividends, as we wish to reward our shareholders for participating in our Group’s
growth.
The form, frequency and amount of future dividends on our Shares will depend on our actual and
projected financial performance, results of business operations, level of our cash and retained
earnings, our projected capital expenditure and other investment plans, the terms of the borrowing
arrangements (if any), plans for expansion and other factors which our Directors may deem
appropriate (the “Dividend Factors”).
Subject to our Articles of Association and in accordance with the Companies Act, our Company
may declare an annual dividend subject to the approval of our Shareholders in a general meeting
but no dividend or distribution shall be declared in excess of the amount recommended by our
Directors. Subject to our Articles of Association and in accordance with the Companies Act, our
Directors may also from time to time declare an interim dividend without the approval of our
Shareholders. Our Company must pay all dividends out of our profits. For information relating to
taxes payable on dividends, please refer to “Appendix J – Summary of Malaysia Law and
Singapore Law Relating to Taxation” to this Offer Document.
All dividends are paid pro-rata among the Shareholders in proportion to the amount paid up on
each Shareholder’s Shares, unless the rights attaching to an issue of any Share provides
otherwise. Notwithstanding the foregoing, the payment by our 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 our Company from any liability to that Shareholder in respect
of that payment.
The amount of dividends declared and paid by us should not be taken as an indication of the
dividends payable in the future. No inference shall or can be made from any of the foregoing
statements as to our actual future profitability or ability to pay dividends in any of the periods
discussed. There can be no assurance that dividends will be paid in the future or of the amount
or timing of any dividends that will be paid in the future.
DIVIDEND POLICY
52
Our Company (Registration No. 201400185H) was incorporated in Singapore on 2 January 2014
under the Companies Act as a private limited company, under the name of “ISEC Healthcare Pte.
Ltd.”. Our Company was converted into a public limited company and the name of our Company
was changed to “ISEC Healthcare Ltd.” in connection therewith on 24 September 2014.
As at the date of incorporation, our issued and paid-up share capital was S$100.00 comprising
100 ordinary shares of S$1.00 each. As at the date of this Offer Document, our issued and paid-up
ordinary share capital was S$12.5 million comprising 388,500,000 Shares.
Pursuant to written resolutions passed on 22 September 2014 and 26 September 2014, our
Shareholders approved, inter alia, the following:
(a) the conversion of our Company into a public company limited by shares and the change of
our name to “ISEC Healthcare Ltd.”;
(b) the adoption of a new set of Articles of Association;
(c) the allotment and issue of the Placement Shares which are the subject of the Placement, on
the basis that the Placement Shares, when allotted, issued and fully paid-up, will rank pari
passu in all respects with the existing issued Shares;
(d) the adoption of the Share Option Scheme (details of which are set in the sections entitled
“ISEC Healthcare Share Option Scheme” of this Offer Document, and also in “Appendix K –
Rules of the ISEC Healthcare Share Option Scheme” to this Offer Document) and the
authorisation of our Directors, pursuant to Section 161 of the Companies Act, to allot and
issue Shares upon the exercise of Options granted under the Share Option Scheme;
(e) the approval of the listing and quotation of all the issued Shares (including the Placement
Shares to be allotted and issued pursuant to the Placement and the Option Shares) on
Catalist; and
(f) the authorisation to our Directors, pursuant to Section 161 of the Companies Act and by way
of ordinary resolution in a general meeting, to:
(i) (A) issue Shares whether by way of rights, bonus or otherwise;
(B) make or grant offers, agreements or options (collectively, “Instruments”) that
might or would require Shares to be issued during the continuance of this authority
or thereafter, including but not limited to the creation and issue of (as well as
adjustments to) warrants, debentures, convertible securities or other instruments
convertible into Shares;
(C) notwithstanding that such authority may have ceased to be in force at the time that
Instruments are to be issued, issue additional Instruments arising from
adjustments made to the number of Instruments previously issued in the event of
rights, bonus or other capitalisation issues, at any time and upon such terms and
conditions and for such purposes and to such persons as our Directors may in their
absolute discretion deem fit; and
SHARE CAPITAL
53
(ii) issue Shares in pursuance of any Instrument made or granted by our Directors pursuant
to (A) above, while such authority was in force (notwithstanding that such issue of
Shares pursuant to the Instruments may occur after the expiration of the authority
contained in this resolution), provided that:
(A) the aggregate number of Shares to be issued pursuant to such authority (including
the Shares to be issued in pursuance of Instruments made or granted pursuant to
this authority but excluding Shares which may be issued pursuant to any
adjustments (“Adjustments”) effected under any relevant Instrument, which
Adjustment shall be made in compliance with the provisions of the Catalist Rules
for the time being in force (unless such compliance has been waived by the
SGX-ST) and the Articles of Association for the time being of our Company) does
not exceed 100.0% of the post-Placement issued share capital excluding treasury
shares, and provided further that the aggregate number of Shares to be issued
other than on a pro-rata basis to Shareholders (including Shares to be issued in
pursuance of Instruments made or granted pursuant to such authority but
excluding Shares which may be issued pursuant to any Adjustments effected
under any relevant Instrument) shall not exceed 50.0% of the post-Placement
issued share capital excluding treasury shares;
(B) in exercising such authority, our Company shall comply with the provisions of the
Catalist Rules for the time being in force (unless such compliance has been
waived by the SGX-ST) and the Articles of Association for the time being of our
Company; and
(C) unless revoked or varied by our Company in general meeting by ordinary
resolution, the authority so conferred shall continue in force until the conclusion of
the next annual general meeting of our Company or the date by which the next
annual general meeting of our Company is required by law to be held, whichever
is the earlier.
For the purpose of this resolution, the “post-Placement issued share capital” shall mean
the total number of issued Shares of our Company (excluding treasury shares)
immediately after the Placement, after adjusting for (i) new Shares arising from the
conversion or exercise of any convertible securities; (ii) new Shares arising from
exercising share options or vesting of share awards outstanding or subsisting at the
time such authority is given, provided the options or share awards were granted in
compliance with the Catalist Rules; and (iii) any subsequent bonus issue, consolidation
or sub-division of Shares.
As at the date of this Offer Document, there is only one class of shares in the capital of our
Company, being the Shares. A summary of our Articles of Association relating to, among others,
the voting rights of our Shareholders is set out in “Appendix G – Summary of Selected Articles of
Association of our Company” to this Offer Document.
Upon the issue and allotment of Placement Shares which are the subject of the Placement, the
resultant issued and paid-up share capital of our Company will be increased to S$30,447,168
comprising 458,500,000 Shares.
There is no founder, management, deferred or unissued Shares reserved for issuance for any
purpose. The Placement Shares shall have the same interest and voting rights as our existing
Shares that were issued prior to this Placement and there are no restrictions to the free
SHARE CAPITAL
54
transferability of our Shares. Save for the share options which may be granted under the Share
Option Scheme, no person has been, or is permitted to be, given an option to subscribe for any
securities of our Company or any of our subsidiaries.
Details of the changes in the issued and paid-up share capital of our Company since the date of
incorporation and the resultant issued and paid-up share capital immediately after the Placement
are as follows:
Number of
Shares issued
Resultant Issued
and Paid-Up
Share Capital
(S$)
Issued and paid-up share capital as at date of
incorporation 100 100
Issue of Shares pursuant to the Restructuring
Exercise 55,499,900 12,500,000
Share Split –(1) 12,500,000
Issue of Placement Shares pursuant to the
Placement 70,000,000 30,447,168(2)
Post-Placement issued and paid-up share capital 458,500,000 30,447,168(2)
Note:
(1) The number of Shares after the Share Split was 388,500,000.
(2) Taking into account the capitalisation of listing expenses estimated to be approximately S$1.7 million.
The issued share capital and the shareholders’ equity of our Company as at incorporation,
immediately before the Placement, and immediately after the Placement, are set forth below.
As at
Incorporation
Immediately
before the
Placement
Immediately
after the
Placement
Issued and fully paid-up Shares (number of
Shares) 100 388,500,000 458,500,000
Issued and fully paid-up share capital (S$) 100 12,500,000 30,447,168(1)
Total shareholders’ equity (S$) 100 12,567,203 28,867,203
Note:
(1) Taking into account the capitalisation of listing expenses estimated to be approximately S$1.7 million.
Save as disclosed above, there were no changes in the issued and paid-up share capital of our
Company since incorporation.
SHARE CAPITAL
55
OWNERSHIP STRUCTURE
Our Directors and Substantial Shareholders and their respective shareholdings immediately
before the Placement (as at the date of the Offer Document) and immediately after the Placement
are set out as follows:
Before the Placement After the Placement
Direct Interest Deemed Interest Direct Interest Deemed Interest
Number of
Shares %
Number of
Shares %
Number of
Shares %
Number of
Shares %
Directors
Sitoh Yih Pin(1) – – – – 400,000 0.1 – –
Dr Lee Hung Ming 157,500,000 40.5 – – 157,500,000 34.4 – –
Dr Wong Jun Shyan 42,079,905 10.8 – – 42,079,905 9.2 – –
Professor Low Teck
Seng(1) – – – – 400,000 0.1 – –
Lim Wee Hann(1) – – – – 400,000 0.1 – –
Executive Officers
Macy Thong 700,000 0.2 – – 700,000 0.2 – –
Dr Fang Seng Kheong 16,023,245 4.1 – – 16,023,245 3.5 – –
Dr Choong Yee Fong 17,436,699 4.5 – – 17,436,699 3.8 – –
Dr Alan Ang – – – – – – – –
Dr Cordelia Chan 5,600,000 1.4 – – 5,600,000 1.2 – –
Substantial Shareholders (other than Directors)
Oh Chin Beng 26,615,680 6.9 – – 26,615,680 5.8 – –
Other Shareholders
Other Moratorised
Shareholders(2) 74,820,375 19.3 – – 74,820,375 16.3 – –
Other Specialist
Doctors(3) 47,724,096 12.3 – – 47,724,096 10.4 – –
Public – – – – 68,800,000 15.0 – –
Total 388,500,000 100.0 458,500,000 100.0(4)
Notes:
(1) As of the date of this Offer Document, the Independent Directors have indicated their interests to subscribe for
400,000 Placement Shares each, representing approximately 0.1% each of our post-Placement share capital.
(2) Other Moratorised Shareholders include Chua Seng Yong, Loh Foong Han, Irene Kang, Dr Lim Cheok Peng, Tan Kar
Tek and Tony Tan Choon Keat. Loh Foong Han is the spouse of Dr Lim Cheok Peng. Irene Kang is the spouse of
Tan Kar Tek.
(3) Other Specialist Doctors include Dr Goh Siew Ching, Dr Barkeh Hanim Binti Jumaat, Dr Cheah May Hong, Dr Chua
Leng Leng Jocelyn, Dr Kamala Devi A/P S.D. Lingam, Dr Kok Howe Sen, Dr Lim Kian Seng, Dr Lim Lee Hooi, Dr
Michael Law Sie Haur, Dr Ronald Arun Das and Dr Then Kong Yong.
(4) The percentage does not add up to 100.0% due to rounding.
SHAREHOLDERS
56
Save as disclosed in the section entitled “Directors, Executive Officers and Employees” of this
Offer Document, there are no relationships among our Directors, Substantial Shareholders and
Executive Officers.
Save as disclosed above, to the best of the knowledge of our Directors, we are not directly or
indirectly owned or controlled, whether severally or jointly, by any other corporation, any
government or other natural or legal person.
The Shares held by our Directors and Substantial Shareholders do not carry different voting rights
from the Placement Shares which are the subject of the Placement.
As at the Latest Practicable Date, our Company has only one class of shares. There is no
restriction on the transfer of fully paid Shares in scripless form except where required by law or
the Catalist Rules.
There has been no public takeover offer by a third party in respect of our Shares or by our
Company in respect of the shares of another corporation or units of business trust which has
occurred between the date of the incorporation of our Company and the Latest Practicable Date.
There are no Shares in our Company that are held by or on behalf of our Company or by the
subsidiaries of our Company.
Our Directors are not aware of any arrangement the operation of which may, at a subsequent date,
result in a change in control of our Company.
SIGNIFICANT CHANGES IN PERCENTAGE OF OWNERSHIP
Save as disclosed in this section and the sections entitled “Share Capital” and “Restructuring
Exercise” of this Offer Document, there has been no significant changes in the percentage
ownership of our Shares from the incorporation of our Company until the Latest Practicable Date.
MORATORIUM
To demonstrate their commitment to the Group and for purposes of consistency, each of the
moratorised shareholders (as set out in the table below, collectively, “Relevant Shareholders”)
has undertaken to our Company, the Issue Manager and Sponsor and the Placement Agent, inter
alia, that, from the date of admission of our Company to Catalist, for a period of six (6) months
thereafter (“Initial Period”), he or she will not, directly or indirectly:
(a) sell, contract to sell, offer, realise, transfer, assign, pledge, grant any option to purchase,
grant any security over, encumber or otherwise dispose of, any part of their interests in the
share capital of the Company (“Lock-Up Shares”);
(b) enter into any transaction or other arrangement, in whole or in part, (including any swap,
hedge or derivative transaction) with a similar economic effect to the foregoing, whether such
transaction is to be settled by delivery of the Lock-Up Shares, in cash or otherwise;
(c) deposit all of his or her effective interest, in any Lock-Up Shares in any depository receipt
facility;
(d) enter into a transaction which is designed or which may reasonably be expected to result in
any of the above; or
(e) publicly announce any intention to do any of the above.
SHAREHOLDERS
57
For the six (6) months period after the Initial Period, the restriction shall apply to 50% of the
Shares held directly by the Relevant Shareholders.
The restriction shall apply to all Shares held directly by the Relevant Shareholders immediately
after the Placement, being 388,500,000 Shares (representing 84.7%) of our Company’s post-
Placement share capital. The total number of Shares which will be moratorised are as follows:
Shareholders Number of Shares
Percentage of
post-Placement
share capital (%)
Dr Lee Hung Ming(1) 157,500,000 34.4
Dr Wong Jun Shyan(1) 42,079,905 9.2
Oh Chin Beng 26,615,680 5.8
Tony Tan Choon Keat 19,284,895 4.2
Loh Foong Han(2) 18,234,895 4.0
Irene Kang(3) 18,234,895 4.0
Dr Choong Yee Fong(1) 17,436,699 3.8
Dr Michael Law Sie Haur(1) 16,142,539 3.5
Dr Fang Seng Kheong(1) 16,023,245 3.5
Dr Lim Kian Seng(1) 8,430,674 1.8
Dr Barkeh Hanim Binti Jumaat(1) 7,692,321 1.7
Dr Kok Howe Sen(1) 7,359,156 1.6
Dr Lim Cheok Peng(2) 7,000,000 1.5
Tan Kar Tek(3) 7,000,000 1.5
Dr Cordelia Chan(1) 5,600,000 1.2
Chua Seng Yong 5,065,690 1.1
Dr Ronald Arun Das(1) 2,011,163 0.4
Dr Lim Lee Hooi(1) 1,750,000 0.4
Dr Cheah May Hong(1) 1,393,112 0.3
Dr Kamala Devi A/P S.D. Lingam(1) 870,618 0.2
Dr Goh Siew Ching(1) 700,000 0.2
Dr Chua Leng Leng Jocelyn(1) 700,000 0.2
Macy Thong(1) 700,000 0.2
Dr Then Kong Yong(1) 674,513 0.1
Total 388,500,000 84.7
Notes:
(1) Employees of our Group as at the Latest Practicable Date.
(2) Loh Foong Han is the spouse of Dr Lim Cheok Peng.
(3) Irene Kang is the spouse of Tan Kar Tek.
SHAREHOLDERS
58
Dilution is the amount by which the Placement Price paid by subscribers of our Placement Shares
in this Placement exceeds our Pro forma NAV per Share after the Placement. The Pro forma NAV
of our Company as at 31 March 2014 was 3.28 cents per Share before adjusting for the estimated
net proceeds of the Placement. Pro forma NAV per Share is determined by dividing our Pro forma
NAV as at 31 March 2014 by the pre-Placement share capital of 388,500,000 Shares prior to the
Placement.
Based on the issue of 70,000,000 Placement Shares at an Placement Price of 28.00 cents per
Share pursuant to the Placement and after adjusting for the estimated net proceeds of the
Placement and based on the post-Placement share capital of 458,500,000 Shares, the Pro forma
NAV of our Company as at 31 March 2014 would have been 6.34 cents per Share. This represents
an immediate increase in Pro forma NAV of 3.06 cents per Share to our existing Shareholders and
an immediate dilution in Pro forma NAV of 21.66 cents per Share to our new investors. The
following table illustrates this per Share dilution:
Placement Price per Share 28.00 cents
Pro forma NAV per Share, before adjusting for the estimated net proceeds of the
Placement and based on the pre-Placement share capital of 388,500,000
Shares
3.28 cents
Increase in Pro forma NAV per Share attributable to existing Shareholders
based on the post-Placement share capital of 458,500,000 Shares
3.06 cents
Pro forma NAV per Share after the issue of Placement Shares and based on the
post-Placement share capital of 458,500,000 Shares
6.34 cents
Dilution in Pro forma NAV per Share to new investors 21.66 cents
Dilution in Pro forma NAV per Share to new investors as a percentage of
Placement Price
77.36%
The following table shows the average cash cost per Share paid by our existing Shareholders for
Shares acquired by them since incorporation of our Company and the price per Share to be paid
by our new investors pursuant to the Placement:
Total Number of
Shares
Total
Consideration
Average Cash
Cost Per Share
(S$) (cents)
Directors
Dr Lee Hung Ming 157,500,000 1,000,400 0.64
Dr Wong Jun Shyan 42,079,905 575,540 1.37
Executive Officers
Macy Thong 700,000 100,000 14.29
Dr Fang Seng Kheong 16,023,245 31,374 0.20
Dr Choong Yee Fong 17,436,699 34,141 0.20
Dr Cordelia Chan 5,600,000 800,000 14.29
DILUTION
59
Total Number of
Shares
Total
Consideration
Average Cash
Cost Per Share
(S$) (cents)
Substantial Shareholders
(other than Directors)
Oh Chin Beng 26,615,680 298,688 1.12
Other Shareholders
Tony Tan Choon Keat 19,284,895 185,704 0.96
Loh Foong Han(1) 18,234,895 35,704 0.20
Irene Kang(2) 18,234,895 35,704 0.20
Dr Michael Law Sie Haur 16,142,539 31,607 0.20
Dr Lim Kian Seng 8,430,674 16,507 0.20
Dr Barkeh Hanim Binti Jumaat 7,692,321 15,062 0.20
Dr Kok Howe Sen 7,359,156 14,409 0.20
Dr Lim Cheok Peng(1) 7,000,000 1,000,000 14.29
Tan Kar Tek(2) 7,000,000 1,000,000 14.29
Chua Seng Yong 5,065,690 256,492 5.06
Dr Ronald Arun Das 2,011,163 3,938 0.20
Dr Lim Lee Hooi 1,750,000 250,000 14.29
Dr Cheah May Hong 1,393,112 2,728 0.20
Dr Kamala Devi A/P S.D. Lingam 870,618 1,705 0.20
Dr Goh Siew Ching 700,000 100,000 14.29
Dr Chua Leng Leng Jocelyn 700,000 100,000 14.29
Dr Then Kong Yong 674,513 1,321 0.20
New investors 70,000,000 19,600,000 28.00
Notes:
(1) Loh Foong Han is the spouse of Dr Lim Cheok Peng.
(2) Irene Kang is the spouse of Tan Kar Tek.
DILUTION
60
Pursuant to a restructuring exercise to rationalise the structure of our Company and its
subsidiaries in preparation for the Listing, our Company became the holding company of our
Group. The Restructuring Exercise involved the following:
(1) Incorporation of our Company
Our Company was incorporated in the Republic of Singapore on 2 January 2014 under the
Companies Act as a private limited company. Our principal activity is that of an investment
holding company. At the time of incorporation, we had an issued and paid-up share capital
of S$100 comprising 100 shares held by Dr Lee Hung Ming and Dr Wong Jun Shyan in equal
proportions.
(2) Incorporation of ISEC Singapore
ISEC Singapore was incorporated in the Republic of Singapore on 2 January 2014 under the
Companies Act as a private limited company. The principal activity of ISEC Singapore is in
specialised medical services (including day surgical centres). At the time of incorporation,
ISEC Singapore had an issued and paid-up share capital of S$100 comprising 100 shares
held by Dr Lee Hung Ming and Dr Wong Jun Shyan in equal proportions. On 30 April 2014,
the entire issued and paid-up share capital of ISEC Singapore was transferred to our
Company.
(3) Incorporation of ISEC Eye
ISEC Eye was incorporated in the Republic of Singapore on 15 July 2014 as a private limited
company for purposes of the acquisition described in paragraph 5 below as well as to be the
party signing the PHS Service Agreement entered into with PHS in relation to services in
respect of LHM Eye Centre. For more details on the PHS Service Agreement, please refer
to the section entitled “General Information on Our Group – Business Overview” of this Offer
Document. At the time of incorporation, ISEC Eye had an issued and paid-up share capital
of S$100 comprising 100 shares held solely by Dr Lee Hung Ming.
(4) Issuance of Shares in our Company
We had issued Shares to the following persons between July 2014 and September 2014 as
follows:
(a) 1,000,000 Shares to Loh Foong Han;
(b) 1,000,000 Shares to Tan Kar Tek;
(c) 999,950 Shares to Dr Lee Hung Ming;
(d) 800,000 Shares to Dr Cordelia Chan;
(e) 499,950 Shares to Dr Wong Jun Shyan;
(f) 250,000 Shares to Chua Seng Yong;
(g) 250,000 Shares to Dr Lim Lee Hooi;
(h) 250,000 Shares to Oh Chin Beng;
RESTRUCTURING EXERCISE
61
(i) 150,000 Shares to Tony Tan Choon Keat;
(j) 100,000 Shares to Macy Thong;
(k) 100,000 Shares to Dr Chua Leng Leng Jocelyn; and
(l) 100,000 Shares to Dr Goh Siew Ching.
(5) Acquisition of business by ISEC Eye
Pursuant to a service agreement dated 18 September 2009 between PHS and Lee HM & Co
Pte Ltd (“Lee HM & Co”), Lee HM & Co provided specialist medical ophthalmology services
to PHS. It was arranged that revenue from the service agreement with Lee HM & Co for the
various types of medical procedures were directed by Lee HM & Co to be taken into account
by Lee HM & Co, Singapore LASIK Hub Pte Ltd, Perfect Vision Eye Centre Pte Ltd and Lee
Hung Ming Eye Centre Pte Ltd (collectively, the “LHM Companies”, each wholly-owned by
Dr Lee Hung Ming).
In order to streamline our business operations, the entire business of each of the LHM
Companies was acquired by ISEC Eye for purposes of the Restructuring Exercise
(“Business Acquisition”) pursuant to a business acquisition agreement dated
22 September 2014 between ISEC Eye and each of the LHM Companies (“Business
Acquisition Agreement”). The Business Acquisition allows for the track record of the LHM
Companies whose businesses were conducted by Dr Lee Hung Ming to be taken into account
by our Company after the Restructuring Exercise. Pursuant to the signing of the PHS Service
Agreement between PHS and ISEC Eye, the businesses previously undertaken by the LHM
Companies is undertaken by ISEC Eye. It is a term of the Business Acquisition that Dr Lee
Hung Ming procures that the LHM Companies be struck off so that the LHM Companies will
not be able to compete with our Group. In accordance with the Business Acquisition
Agreement, the aggregate consideration of S$1,153,461 shall be satisfied by the allocation
and issuance of 1,153,461 fully paid-up shares in the share capital of ISEC Eye to Dr Lee
Hung Ming (as nominated by the LHM Companies). The consideration of the acquisition was
determined based on a willing-buyer-willing-seller basis, taking into account the net tangible
assets of the business acquired.
(6) Acquisition of Subsidiaries
ISEC KL was 51% and 49% held by Exquisite Season Sdn. Bhd. and Ophthalmic Consultants
Malaysia Sdn. Bhd., respectively. The shareholders of Exquisite Season Sdn. Bhd. comprise
Oh Chin Beng, Loh Foong Han, Irene Kang, Tony Tan Choon Keat and Chua Seng Yong. The
shareholders of Ophthalmic Consultants Malaysia Sdn. Bhd. comprise Dr Wong Jun Shyan,
Dr Fang Seng Kheong, Dr Choong Yee Fong, Dr Michael Law Sie Haur, Dr Kok Howe Sen,
Dr Barkeh Hanim Binti Jumaat and Dr Lim Kian Seng.
Our Company entered into sale and purchase agreements dated 26 September 2014 (“Share
Swap Agreements”) with the respective shareholders (“Vendors”) of ISEC Eye and ISEC KL
(“Subsidiaries”) to acquire the entire issued and paid-up share capital of the Subsidiaries at
the following aggregate purchase consideration:
(a) S$3,010,000 for ISEC Eye(1); and
(b) S$3,990,000 for ISEC KL(1).
RESTRUCTURING EXERCISE
62
Pursuant to the Share Swap Agreements, the purchase considerations were satisfied by the
allotment and issuance of Shares (“Consideration Shares”) to the Vendors and such
persons nominated by the Vendors as follows:
(i) 21,500,000 Shares to Dr Lee Hung Ming;
(ii) 5,511,415 Shares to Dr Wong Jun Shyan;
(iii) 3,552,240 Shares to Oh Chin Beng;
(iv) 2,604,985 Shares to Irene Kang;
(v) 2,604,985 Shares to Tony Tan Choon Keat;
(vi) 2,490,957 Shares to Dr Choong Yee Fong;
(vii) 2,306,077 Shares to Dr Michael Law Sie Haur;
(viii) 2,289,035 Shares to Dr Fang Seng Kheong;
(ix) 1,604,985 Shares to Loh Foong Han;
(x) 1,204,382 Shares to Dr Lim Kian Seng;
(xi) 1,098,903 Shares to Dr Barkeh Hanim Binti Jumaat;
(xii) 1,051,308 Shares to Dr Kok Howe Sen;
(xiii) 1,000,000 Shares to Dr Lim Cheok Peng;
(xiv) 473,670 Shares to Chua Seng Yong;
(xv) 287,309 Shares to Dr Ronald Arun Das;
(xvi) 199,016 Shares to Dr Cheah May Hong;
(xvii) 124,374 Shares to Dr Kamala Devi A/P S.D. Lingam; and
(xviii) 96,359 Shares to Dr Then Kong Yong.
Note:
(1) The consideration of acquisition was determined based on a willing-buyer-willing-seller basis, taking into
consideration the profitability of ISEC Eye and ISEC KL.
After the Listing, our Group may explore ways to rationalise our group structure to improve the
management of our business operations and costs, where feasible or appropriate. If and when
such decisions to rationalise take place, the necessary announcements will be made by our
Company.
RESTRUCTURING EXERCISE
63
Our Group structure immediately after the Restructuring Exercise is as follows:
ISEC Healthcare Ltd.
International Specialist Eye Centre Pte. Ltd.
ISEC EyePte. Ltd.
ISEC (Penang) Sdn. Bhd.
ISEC Sdn. Bhd.
100% 100%
66%
100%
Details of our subsidiaries are as follows:
Name of Company
Date and Place of
Incorporation
Principal business/
Principal country of
business Effective ownership
(%)
ISEC Sdn. Bhd. 8 January 2007
Malaysia
Medical eye care
services
Malaysia
100%
ISEC (Penang) Sdn.
Bhd.
29 February 2012
Malaysia
Medical eye care
services
Malaysia
66%(1)
International
Specialist Eye Centre
Pte. Ltd.
2 January 2014
Singapore
Medical eye care
services
Singapore
100%
ISEC Eye Pte. Ltd. 15 July 2014
Singapore
Medical eye care
services
Singapore
100%
Note:
(1) The remaining 34% of ISEC (Penang) Sdn. Bhd. is held by Pearl Eye Specialists Sdn. Bhd., which is held in equal
proportions by Dr Alan Ang and Dr Ung Chuin Tsiang. Dr Ung Chuin Tsiang is the spouse of Dr Alan Ang.
Save as disclosed above, there are no other subsidiaries, subsidiary entities, associated
companies and associated entities of our Group.
None of our subsidiaries is listed on any stock exchange.
GROUP STRUCTURE
64
The following selected financial information of our Group should be read in conjunction with the
“Independent Auditors’ Report and Unaudited Pro Forma Combined Financial Statements for the
Financial Years ended 31 December 2011, 2012, 2013 and for the Financial Period from 1 January
2014 to 31 March 2014” as set out in Appendix A of this Offer Document, as well as the section
entitled “Management’s Discussion and Analysis of Results of Operations and Financial Position
of Our Pro Forma Combined Financial Information” of this Offer Document.
UNAUDITED PRO FORMA COMBINED STATEMENTS OF COMPREHENSIVE INCOME
S$ FY2011 FY2012 FY2013 1Q2013 1Q2014
Revenue 18,622,372 20,613,812 22,342,305 5,058,727 5,857,198
Cost of sales (9,055,505) (9,927,396) (10,832,622) (2,712,044) (2,729,294)
Gross profit 9,566,867 10,686,416 11,509,683 2,346,683 3,127,904
Other items of income
Interest income 6,023 15,191 31,716 5,776 5,640
Other income 69,750 75,667 98,679 12,109 15,045
Other items of expense
Selling and distribution expenses (112,837) (96,609) (123,060) (29,671) (30,145)
Administrative expenses (3,615,548) (3,879,754) (4,227,819) (743,969) (903,835)
Other expenses – – – – (32,952)
Finance costs (22,482) (2,188) (29,206) (26,425) (11,207)
Profit before income tax 5,891,773 6,798,723 7,259,993 1,564,503 2,170,450
Income tax expense (1,231,858) (1,109,845) (1,598,734) (295,072) (387,232)
Profit for the financial year 4,659,915 5,688,878 5,661,259 1,269,431 1,783,218
Other comprehensive income:
Items that may be reclassified
subsequently to profit or loss
Foreign currency translation
differences – foreign operations (35,232) (53,545) (104,491) 8,826 (210)
Reclassification arising from
disposal of foreign subsidiary – – – – 33,166
Income tax relating to items that
will or may be reclassified – – – – –
Other comprehensive income for
the financial year, net of tax (35,232) (53,545) (104,491) 8,826 32,956
Total comprehensive income for
the financial year 4,624,683 5,635,333 5,556,768 1,278,257 1,816,174
Profit attributable to:
Owners of the parent 4,709,406 5,767,090 6,031,773 1,350,605 1,835,739
Non-controlling interests (49,491) (78,212) (370,514) (81,174) (52,521)
4,659,915 5,688,878 5,661,259 1,269,431 1,783,218
Total comprehensive income
attributable to:
Owners of the parent 4,676,721 5,715,380 5,935,901 1,358,328 1,858,709
Non-controlling interests (52,038) (80,047) (379,133) (80,071) (42,535)
4,624,683 5,635,333 5,556,768 1,278,257 1,816,174
Pre-Placement EPS (cents)(1) 1.21 1.48 1.55 0.35 0.47
Post-Placement EPS (cents)(2) 1.03 1.26 1.32 0.29 0.40
SUMMARY OF OUR PRO FORMA FINANCIAL INFORMATION
65
Notes:
(1) For comparative purpose, pre-Placement EPS for the Period Under Review has been computed based on the profit
for the year attributable to owners of the parent and our pre-Placement share capital of 388,500,000 Shares.
(2) For comparative purpose, post-Placement EPS for the Period Under Review has been computed based on the profit for
the year attributable to owners of the parent and our post-Placement share capital of 458,500,000 Shares.
UNAUDITED PRO FORMA COMBINED STATEMENTS OF FINANCIAL POSITION
S$
As at
31 December 2013
As at
31 March 2014
ASSETS
Non-current assets
Plant and equipment 4,855,194 4,744,352
Intangible assets 1,953,022 1,946,621
6,808,216 6,690,973
Current assets
Inventories 406,437 386,659
Trade and other receivables 2,164,096 2,091,064
Prepayments 154,916 232,150
Cash and cash equivalents 10,492,920 11,483,637
13,218,369 14,193,510
Total assets 20,026,585 20,884,483
EQUITY AND LIABILITIES
Equity
Share capital 8,928,000 8,928,100
Retained earnings 2,147,835 3,983,574
Foreign currency translation account (182,422) (159,452)
Equity attributable to owners of the parent 10,893,413 12,752,222
Non-controlling interests (81,946) (185,019)
Total equity 10,811,467 12,567,203
LIABILITIES
Non-current liabilities
Deferred tax liabilities 977 977
Current liabilities
Trade and other payables 7,302,917 6,888,523
Bank borrowings 747,038 708,191
Current income tax payable 1,164,186 719,589
9,214,141 8,316,303
Total liabilities 9,215,118 8,317,280
Total equity and liabilities 20,026,585 20,884,483
NAV per Share (cents)(1) 2.80 3.28
Note:
(1) The NAV per Share has been computed based on NAV attributable to the owners of the parent and pre-Placement
share capital of 388,500,000 Shares.
SUMMARY OF OUR PRO FORMA FINANCIAL INFORMATION
66
BASIS OF PREPARATION
The unaudited pro forma combined financial information of the Group for the financial years ended
31 December 2011, 2012, 2013 and for the financial period from 1 January 2014 to 31 March 2014
have been compiled based on the followings:
(a) The combined financial information of the Group for the financial years ended 31 December
2011, 2012, 2013 and for the financial period from 1 January 2014 to 31 March 2014, which
were prepared in accordance with Singapore Financial Reporting Standards.
(b) The accounting policies of the Group as set out in the audited combined financial statements
for the financial years ended 31 December 2011, 2012 and 2013 as set out in Appendix B and
Appendix C to this Offer Document and unaudited interim condensed combined financial
statements for the financial period from 1 January 2014 to 31 March 2014 as set out in
Appendix D and Appendix E to this Offer Document.
(c) The following key adjustments and assumptions were made for the preparation of the
unaudited pro forma combined financial information of the Group:
(i) acquisition of ISEC Eye by our Company subsequent to acquisition by ISEC Eye of the
businesses from LHM Companies, which was assumed to have taken place on 1
January 2011;
(ii) increase in capital injection by issuance of 5,500,000 Shares with consideration of
S$5,500,000; which was assumed to have taken place on 1 January 2013; and
(iii) increase in capital expenditure for plant and equipment amounting to S$2,379,006 for
opening of our new clinic in Mount Elizabeth Novena Specialist Centre, which was
assumed to have taken place on 1 January 2013.
SUMMARY OF OUR PRO FORMA FINANCIAL INFORMATION
67
The unaudited pro forma combined financial information of the Group may not be indicative of the
results of operations, financial position and cash flows that would have been attained by the Group
had the Group actually existed earlier. Therefore, the unaudited pro forma combined financial
information of the Group may not give a true and fair picture of the Group’s actual results of
operations, financial position and cash flows.
The following discussion of our results of operations, financial position and cash flows has been
prepared by our management and should be read in conjunction with the “Independent Auditors’
Report and Unaudited Pro Forma Combined Financial Information for the Financial Years ended
31 December 2011, 2012, 2013 and for the Financial Period from 1 January 2014 to 31 March
2014” as set out in Appendix A to this Offer Document, and the section entitled “Summary of our
Pro Forma Financial Information” of this Offer Document. This discussion contains forward-
looking statements that involve risks and uncertainties. Our actual results may differ significantly
from those projected in the 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 Offer Document, particularly in the section
entitled “Risk Factors” of this Offer Document. 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 Issue Manager
and Sponsor, the Placement Agent, 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 section entitled “Cautionary Note Regarding Forward-Looking Statements” of this
Offer Document.
OVERVIEW
Revenue
We are a comprehensive medical eye care service provider with ambulatory surgical centres in
Malaysia and Singapore. Our doctors are specialised in the fields of cataract and refractive
surgery (including LASIK), vitreoretinal diseases, corneal and external eye diseases, glaucoma,
uveitis, oculoplastics, facial cosmetics and aesthetics surgery, adult strabismus and paediatric
ophthalmology, and most of our specialist doctors are shareholders of our Company.
Our revenue is derived from our eye specialist services provided by all our centres which includes
the below:
(a) fees for clinical consultation, imaging, surgeries, treatment procedures, services rendered
and sale of medication; and
(b) profit sharing from fees for eye specialist services provided by ISEC Eye to PHS in relation
to LHM Eye Centre (which operated its business as Parkway Eye Centre prior to September
2014) after deducting related operating expenses.
Revenue from all our services above are recognised upon the completion of services rendered
and sale of the product. Fees charged to our patients vary depending on the length of
consultation, type of consultation, types of imaging performed, types and complexity of the
surgeries and treatment procedures and expertise of our specialist doctors.
MANAGEMENT’S DISCUSSION AND ANALYSIS OFRESULTS OF OPERATIONS AND FINANCIAL POSITION OFOUR PRO FORMA COMBINED FINANCIAL INFORMATION
68
Our revenue is mainly dependent on the following factors:
(a) nature, complexity and duration of consultation and treatment;
(b) types of surgeries required by our patients;
(c) level of medical expertise required;
(d) demand factor from patients as a result of individual preferences, requirements and
affordability;
(e) our ability to attract and retain experienced and qualified specialist doctors;
(f) changes in government policies and regulations;
(g) the outbreak of diseases that may affect the demand for our services; and
(h) our ability to maintain a good reputation in the ophthalmology service sector.
Please refer to the section entitled “Risk Factors” of this Offer Document for other factors which
may affect our revenue.
Our revenue breakdown according to geographical locations is as follows:
FY2011 FY2012 FY2013 1Q2013 1Q2014
S$’000 % S$’000 % S$’000 % S$’000 % S$’000 %
Malaysia 13,844 74.3 15,089 73.2 17,482 78.2 4,042 79.9 4,585 78.3
Singapore 4,778 25.7 5,525 26.8 4,860 21.8 1,017 20.1 1,272 21.7
Total 18,622 100.0 20,614 100.0 22,342 100.0 5,059 100.0 5,857 100.0
Revenue from Malaysia accounted for 74.3%, 73.2%, 78.2%, 79.9% and 78.3% for FY2011,
FY2012, FY2013, 1Q2013 and 1Q2014 respectively while revenue from Singapore accounted for
25.7%, 26.8%, 21.8%, 20.1% and 21.7% for FY2011, FY2012, FY2013, 1Q2013 and 1Q2014
respectively. During the Period Under Review, our revenue from Singapore were recorded from (i)
the profits sharing from fees for eye specialist services provided by Lee HM & Co to PHS after
deducting related operating expenses and (ii) fees received by our specialist doctor(s) for
surgeries and treatment procedures performed in Gleneagles Hospital and Mount Elizabeth
Hospital.
Cost of sales
Our cost of sales breakdown according to geographical locations are as follows:
FY2011 FY2012 FY2013 1Q2013 1Q2014
S$’000 % S$’000 % S$’000 % S$’000 % S$’000 %
Malaysia 8,911 98.4 9,733 98.0 10,666 98.5 2,651 97.8 2,691 98.6
Singapore 144 1.6 194 2.0 166 1.5 61 2.2 38 1.4
Total 9,055 100.0 9,927 100.0 10,832 100.0 2,712 100.0 2,729 100.0
MANAGEMENT’S DISCUSSION AND ANALYSIS OFRESULTS OF OPERATIONS AND FINANCIAL POSITION OFOUR PRO FORMA COMBINED FINANCIAL INFORMATION
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Cost of sales from Malaysia accounted for 98.4%, 98.0%, 98.5%, 97.8% and 98.6% in FY2011,
FY2012, FY2013, 1Q2013 and 1Q2014 respectively while cost of sales from Singapore accounted
for 1.6%, 2.0%, 1.5%, 2.2% and 1.4% in FY2011, FY2012, FY2013, 1Q2013 and 1Q2014
respectively. Lower cost of sales in Singapore was mainly due to under our arrangement with
PHS, the operation of LHM Eye Centre was managed by PHS and the cost of sales had been
deducted in arriving at the revenue as mentioned above. Accordingly, the cost of sales in
Singapore incurred mainly from the procurement of certain lenses in the course of the
performance of surgeries by our specialist doctor(s) in Gleneagles Hospital and Mount Elizabeth
Hospital.
Cost of sales comprises cost of inventories, doctors’ consultancy fees and depreciation as follows:
FY2011 FY2012 FY2013 1Q2013 1Q2014
S$’000 % S$’000 % S$’000 % S$’000 % S$’000 %
Cost of inventories 3,286 36.3 3,652 36.8 4,673 43.1 1,073 39.6 1,217 44.6
Doctors’ consultancy
fees 5,182 57.2 5,739 57.8 5,710 52.7 1,531 56.4 1,434 52.5
Depreciation 587 6.5 536 5.4 449 4.1 108 4.0 78 2.9
Total 9,055 100.0 9,927 100.0 10,832 100.0 2,712 100.0 2,729 100.0
Cost of inventories:–
This cost relates to the purchases of drugs and medicine, intra ocular lens, medical supplies and
consumables used in the course of the provision of various eye surgeries provided by our Group.
These costs accounted for approximately 17.6%, 17.7%, 20.9%, 21.2% and 20.8% of our total
revenue for FY2011, FY2012, FY2013, 1Q2013 and 1Q2014 respectively.
Doctors’ consultancy fees:–
This cost relates to consultancy fees and surgeon fees which are paid to our specialist doctors for
their provision of consultancy services and surgeries performed in our facilities. This cost
accounted for approximately 27.8%, 27.8%, 25.6%, 30.3% and 24.5% of our total revenue for
FY2011, FY2012 FY2013, 1Q2013 and 1Q2014 respectively. Specialist doctors’ consultancy fees
were higher 30.3% in 1Q2013 as compared to 24.5% in 1Q2014 mainly due to revision to lower
consultancy fees paid to our specialist doctors in 1Q2014.
Depreciation:–
This cost relates to depreciation of plant and equipment that refers mainly to depreciation of
medical equipment over their useful economic lives of between 5 years to 8 years. Our
depreciation of plant and equipment accounted for approximately 3.2%, 2.6%, 2.0%, 2.1% and
1.3% of our total revenue for FY2011, FY2012, FY2013, 1Q2013 and 1Q2014 respectively.
MANAGEMENT’S DISCUSSION AND ANALYSIS OFRESULTS OF OPERATIONS AND FINANCIAL POSITION OFOUR PRO FORMA COMBINED FINANCIAL INFORMATION
70
Our cost of sales may be affected by the following factors:
(a) revision in consultancy fees as per the fee schedules provided under the applicable laws and
regulations or as prescribed by the relevant authorities including the following:
(i) Malaysian Medical Association; and
(ii) The Ministry of Health Malaysia;
(b) changes in prices of drugs and medicine and other consumables; and
(c) increase in depreciation due to additions of plant and equipment.
Gross profit
Our gross profit breakdown according to geographical locations is as follows:
FY2011 FY2012 FY2013 1Q2013 1Q2014
S$’000 % S$’000 % S$’000 % S$’000 % S$’000 %
Malaysia 4,933 51.6 5,356 50.1 6,816 59.2 1,391 59.3 1,894 60.6
Singapore 4,634 48.4 5,330 49.9 4,694 40.8 956 40.7 1,234 39.4
Total 9,567 100.0 10,686 100.0 11,510 100.0 2,347 100.0 3,128 100.0
Gross profit from Malaysia accounted for 51.6%, 50.1%, 59.2%, 59.3% and 60.6% for FY2011,
FY2012, FY2013, 1Q2013 and 1Q2014 respectively while gross profit from Singapore accounted
for 48.4%, 49.9%, 40.8%, 40.7% and 39.4% for FY2011, FY2012, FY2013, 1Q2013 and 1Q2014
respectively.
Other incomes
Other incomes mainly consist of offsite consultancy and surgeon fees received by our specialist
doctors from their services rendered as visiting consultants to hospitals and other eye centres
outside of our Group, and foreign exchange gain. Other incomes accounted for 0.4%, 0.4%, 0.4%,
0.2% and 0.3% of our revenue for FY2011, FY2012, FY2013, 1Q2013 and 1Q2014 respectively.
Other items of expense
Other items of expense comprise selling and distribution expenses, administrative expenses and
finance costs.
Selling and distribution expenses
Selling and distribution expenses are relatively low as a percentage of our revenue as the main
source of our patients is from our existing patients’ referral or by word of mouth. Our marketing
activities that were carried out are mainly roadshows and marketing trips, in Malaysia, Singapore
and overseas, especially in Indonesia, to promote our services. Marketing expenses also include
advertisement costs incurred in promoting our services on the internet and the printing costs of
MANAGEMENT’S DISCUSSION AND ANALYSIS OFRESULTS OF OPERATIONS AND FINANCIAL POSITION OFOUR PRO FORMA COMBINED FINANCIAL INFORMATION
71
marketing related materials and brochures. Selling and distribution expenses incurred accounted
for approximately 0.6%, 0.5%, 0.6%, 0.6% and 0.5% of our revenue for FY2011, FY2012, FY2013,
1Q2013 and 1Q2014 respectively.
Administrative expenses
Administrative expenses mainly comprise employee benefits expense, directors’ fees, rental of
premises and depreciation of plant and equipment.
Employee benefits expense:–
Employee benefits expense comprises mainly remuneration paid to nurses, optometrists, as well
as other medical and administrative support staff. These include fixed and variable components
of salaries and wages, allowances, bonuses, CPF and EPF contributions and other government
contributions.
All our employees are remunerated on a fixed salary scheme and their variable component of the
salary scheme is tied to the performance of the individual employee evaluated on our internal key
performance indicator as communicated to employees at the beginning of each year. Our
employee costs accounted for approximately 8.0%, 8.5%, 8.1%, 7.8% and 9.0% of our revenue for
FY2011, FY2012, FY2013, 1Q2013 and 1Q2014 respectively.
Directors’ fees:–
Directors’ fees are paid in accordance with the approved directors’ fees at the subsidiary
companies’ annual general meeting. Our Directors’ fees accounted for approximately 2.8%, 2.6%
and 2.4% of our revenue for FY2011, FY2012 and FY2013 respectively. There were no such
payment for Directors’ fees for 1Q2013 and 1Q2014.
Rental of premises:–
Rental of premises are incurred in respect of the rental paid to landlord for the space leased for
our operations. The lease term of our rented properties range from 3 years to 10 years. Rental of
premises accounted for approximately 2.6%, 2.5%, 2.4%, 3.5% and 2.4% of our revenue for
FY2011, FY2012, FY2013, 1Q2013 and 1Q2014 respectively.
Depreciation of plant and equipment:–
Depreciation of plant and equipment refers mainly to depreciation of computer equipment,
electrical equipment, motor vehicles, office equipment, furniture and fittings and renovation over
their useful economic lives of between 5 years to 10 years. Our depreciation of plant and
equipment accounted for approximately 1.7%, 1.3%, 1.6%, 0.8% and 0.7% of our total revenue for
FY2011, FY2012, FY2013, 1Q2013 and 1Q2014 respectively.
Our operating costs may be affected by the following factors:
(a) changes in marketing related expenses and the extent and mode/methods of our marketing
activities;
MANAGEMENT’S DISCUSSION AND ANALYSIS OFRESULTS OF OPERATIONS AND FINANCIAL POSITION OFOUR PRO FORMA COMBINED FINANCIAL INFORMATION
72
(b) changes in payroll and related costs which are largely due to the salaries and incentives that
we will pay to our existing employees, and additional staff head counts in line with our
business growth and changes in government policies and regulations such as CPF and EPF
contributions, minimum wage policy and restriction of professional passes and permits;
(c) increase in depreciation due to addition of plant and equipment; and
(d) renewal or new rental lease agreements which may be entered into and dependent on our
requirements and the property market conditions in the location in which we operate.
Finance costs
Our finance costs comprise interest expenses on bank overdraft from bank and financial
institutions. Our finance costs accounted for approximately 0.1%, 0.01%, 0.1%, 0.5% and 0.2% of
our revenue for FY2011, FY2012, FY2013, 1Q2013 and 1Q2014 respectively.
Income tax expense
The pro forma combined effective tax rate for FY2011, FY2012, FY2013, 1Q2013 and 1Q2014
were 20.9%, 16.3%, 22.0%, 18.9% and 17.8% respectively.
The effective tax rate for our subsidiary in Singapore for FY2011, FY2012, FY2013, 1Q2013 and
1Q2014 were 14.9%, 13.5%, 15.5% 8.5% and 9.3% respectively. The Singapore statutory
corporate tax rates for FY2011, FY2012, FY2013, 1Q2013 and 1Q2014 were 17%. Our effective
tax rate for FY2011, FY2012, FY2013, 1Q2013 and 1Q2014 were lower than the Singapore
statutory corporate tax rates mainly due to income not subject to income tax and exempt income.
The effective tax rate for our subsidiaries in Malaysia for FY2011, FY2012, FY2013, 1Q2013 and
1Q2014 were 32.2%, 22.0% 29.9%, 35.2% and 27.0% respectively. The Malaysia statutory
corporate tax rates for FY 2011, FY2012, FY2013, 1Q2013 and 1Q2014 were 25%. Our effective
tax rate for FY2011, FY2013, 1Q2013 and 1Q2014 were higher than the Malaysia statutory
corporate tax rates mainly due to expenses not allowable for tax deduction purposes and deferred
tax assets not recognised during the financial years. In FY2012, our effective tax rate was lower
than the Malaysia statutory corporate tax rates mainly due to adjustments for over provision of
income tax in prior financial years.
REVIEW OF RESULTS OF OPERATIONS
FY2012 vs FY2011
Revenue
Revenue grew from S$18.6 million in FY2011 to S$20.6 million in FY2012 or 10.7% as revenue
from Malaysia and Singapore grew by 9.0% and 15.6% respectively.
Our revenue from Malaysia increased as the strength of our medical personnel increased from 10
full-time specialist doctors in FY2011 to 11 full-time specialist doctors and two (2) visiting doctors
in FY2012. We also managed to capture more overseas patients mainly from Indonesia due to our
marketing efforts in various parts of Indonesia and word of mouth referrals of existing patients in
Singapore, Malaysia and overseas.
MANAGEMENT’S DISCUSSION AND ANALYSIS OFRESULTS OF OPERATIONS AND FINANCIAL POSITION OFOUR PRO FORMA COMBINED FINANCIAL INFORMATION
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Increase in our revenue from Singapore was mainly due to the increase in number of surgeries
performed as we introduced new treatment options for our cataract patients.
Cost of sales and gross profit
Our cost of sales increased by S$872,000 or approximately 9.6% from S$9.1 million in FY2011 to
S$9.9 million in FY2012. In general, our cost of sales increased as a result of an increase in
business volume in FY2012. Higher specialist doctors’ consultancy fees of S$5.7 million were paid
in FY2012 as compared to S$5.2 million in FY2011. Similarly higher cost of inventories of S$3.7
million were incurred in FY2012 as compared to S$3.3 million in FY2011, in line with increased
business from the higher number of procedures performed and cases seen in our centres. Our
gross profit increased from S$9.6 million in FY2011 to S$10.7 million in FY2012 due mainly to our
revenue increased more than the increase in our cost of sales.
Other incomes
In FY2012, other incomes were S$76,000 compared to S$70,000 in FY2011. This was mainly due
to a motor insurance claim of S$10,000 received by ISEC KL in FY2012.
Other items of expense
Other items of expense comprise selling and distribution expenses, administrative expenses, and
finance costs.
Selling and distribution expenses
Selling and distribution expenses incurred in FY2012 of S$97,000 was lower by S$16,000 as
compared to S$113,000 in FY2011 mainly due to decrease in advertisement costs incurred in our
Malaysian operations of approximately S$8,000 and in overseas exhibition expenses of
approximately S$7,000 in FY2012.
Administrative expenses
Administrative expenses increased by S$264,000 from S$3.6 million in FY2011 to S$3.9 million in
FY2012 mainly due to higher employee benefits expense of S$248,000 incurred by way of higher
bonuses paid to employees in FY2012 as well as increase in the headcounts in line with the
increase in volume of business of the Group. We had 78 staff as at 31 December 2012 as
compared to 75 as at 31 December 2011. Apart from that, there was a slight increase in rental from
S$488,000 to S$521,000 as the rental for ISEC (Ampang) Sdn. Bhd. (“ISEC Ampang”, a
then-subsidiary) was for a period of 8 months only in FY2011 as it commenced business
operations in mid 2011.
Finance costs
Finance costs in FY2012 was approximately S$2,000 which was lower as compared to FY2011 of
S$22,000. This was mainly due to lower interest expenses incurred on term loan as we had repaid
most of our term loan obligations.
MANAGEMENT’S DISCUSSION AND ANALYSIS OFRESULTS OF OPERATIONS AND FINANCIAL POSITION OFOUR PRO FORMA COMBINED FINANCIAL INFORMATION
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Profit before income tax
Our profit before income tax increased by S$0.9 million in FY2012 as compared to FY2011
primarily due to higher profit generated from higher sales in FY2012.
Income tax expense
Income tax expense decreased by S$122,000 or approximately 9.9% from S$1.2 million in FY2011
to S$1.1 million in FY2012 as a result of higher income not subjected to income tax in FY2012 and
over provision of prior years’ income tax. As such, our effective tax rate decreased from
approximately 20.9% in FY2011 to 16.3% in FY2012.
FY2013 vs FY2012
Revenue
The Group revenue increased from S$20.6 million in FY2012 to S$22.3 million in FY2013 or 8.4%,
mainly due to the increase in revenue from Malaysia of S$2.4 million which was offset by slight
decrease in revenue from Singapore of S$665,000.
Increase in our revenue from Malaysia was mainly due to increase in revenue from patients who
were covered under their insurance policies as ISEC KL’s reputation as an ambulatory care centre
with state-of-the-art equipment and cutting edge technology providing high quality, compassionate
and professional patient care continue to rise through our continuing marketing efforts as well as
by word of mouth referrals from our existing patients. Ambulatory care centres are fast gaining
popularity amongst insurers as most eye cases can be done generally at a cheaper cost in an
ambulatory care centre as compared to private hospital. Our overseas patients also increased due
to our continuing marketing efforts in Indonesia.
The slight decrease in revenue from Singapore was due to fewer number of treatments and
surgeries performed.
Cost of sales and gross profit
Our cost of sales increased by S$905,000 or approximately 9.1% from S$9.9 million FY2012 to
S$10.8 million in FY2013. In general, our cost of sales increased in tandem with the increase in
business volume in FY2013. The 28.0% increase in our cost of inventories of S$4.7 million
incurred in FY2013 as compared to S$3.7 million in FY2012 was a result of higher medicine cost
and pharmaceutical cost in FY2013. Generally cost of medicine increased in FY2013 due to price
adjustment in the market by most major pharmaceutical companies in response to the rising cost
of research and development and production.
Our gross profit increased from S$10.7 million in FY2012 to S$11.5 million in FY2013 as our
revenue increased more than the increase in our cost of sales.
MANAGEMENT’S DISCUSSION AND ANALYSIS OFRESULTS OF OPERATIONS AND FINANCIAL POSITION OFOUR PRO FORMA COMBINED FINANCIAL INFORMATION
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Other incomes
Other incomes increased by S$23,000 from $76,000 in FY2012 to S$99,000 in FY2013. The
increase was mainly contributed by government grants received of S$36,000 by LHM Companies
against S$6,000 received in FY2012 offset by lower miscellaneous income of S$5,000 in FY2013
as compared to S$10,000 in FY2012.
Other items of expense
Other items of expense increased by 10.0% or S$400,000 from S$4.0 million in FY2012 to S$4.4
million in FY2013. This was mainly due to increase in selling and distribution expense,
administrative expenses and finance cost of S$26,000, S$348,000 and S$27,000 respectively.
Selling and distribution expense
Selling and distribution expense incurred was S$26,000 higher at S$123,000 in FY2013 as
compared to S$97,000 in FY2012. This was mainly due to higher sales and marketing costs of
S$21,000 incurred in advertising on the internet for our Malaysia operations.
Administrative expenses
Administrative expenses increased from S$3.9 million in FY2012 to S$4.2 million in FY2013. This
S$348,000 increase was mainly due to higher employee benefits expenses of S$65,000 and plant
and equipment written off of S$140,000 as a result of cessation of business operations by a
then-subsidiary in Malaysia and higher administrative expenses incurred by ISEC Penang.
Finance costs
Increase in finance costs of S$27,000 from S$2,000 in FY2012 to S$29,000 in FY2013 was mainly
due to utilisation of our bank overdraft facility to finance addition of plant and equipment, mainly
medical equipment and electrical equipment, and renovation costs of our centre in Penang,
Malaysia.
Profit before income tax
Our profit before income tax increased by S$461,000 in FY2013 as compared to FY2012 primarily
due to higher profit generated from higher sales in FY2013.
Income tax expense
Income tax expense increased by S$489,000 or approximately 44.1% from S$1.1 million in
FY2012 to S$1.6 million in FY2013 as a result of higher income being subjected to income tax. Our
effective tax rate increased from approximately 16.3% in FY2012 to 22.0% in FY2013 mainly due
to over-provision of income tax in prior financial years and income not subject to income tax being
adjusted in FY2012.
MANAGEMENT’S DISCUSSION AND ANALYSIS OFRESULTS OF OPERATIONS AND FINANCIAL POSITION OFOUR PRO FORMA COMBINED FINANCIAL INFORMATION
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1Q2014 vs 1Q2013
Revenue
The Group revenue increased by 15.8% from S$5.1 million in 1Q2013 to S$5.9 million in 1Q2014,
mainly due to the increase in revenue from Malaysia of approximately S$544,000 or 13.4% and
increase in revenue from Singapore of S$255,000 or 25.1% respectively. Increase in revenue for
both Malaysia and Singapore was mainly due to revision in price of services in Malaysia and
Singapore.
Cost of sales and gross profit
Cost of sales increased slightly by approximately S$17,000 in 1Q2014 due to the increase in
business activities. The doctors’ consultancy fees decreased from S$1.5 million in 1Q2013 to
S$1.4 million in 1Q2014 due mainly to the revision of consultancy fees paid to our specialist
doctors.
Our gross profit increased from S$2.3 million in 1Q2013 to S$3.1 million in 1Q2014 due mainly to
our revenue increased more than the increase in our cost of sales.
Other incomes
There was a slight increase in other incomes by S$3,000 from S$12,000 in 1Q2013 to S$15,000
in 1Q2014 due mainly to gain on disposal of plant and equipment.
Other items of expense
Other items of expense consist of mainly selling and distribution expenses, administrative
expenses, other expenses and finance costs.
Selling and distribution expenses
There was a slight increase in our selling and distribution expenses in 1Q2014 as compared to
1Q2013. The selling and distribution costs were about S$30,000 in both 1Q2013 and 1Q2014.
Administrative expenses
Administrative expenses increased by S$160,000 from S$744,000 in 1Q2013 to S$904,000 in
1Q2014 mainly due to salary paid to directors with effective from 1 January 2014.
Other expenses
Other expenses of S$33,000 incurred in 1Q2014 mainly due to the loss from the disposal of ISEC
Ampang.
Finance costs
Lower finance costs incurred in 1Q2014 of S$11,000 as compared to S$26,000 in 1Q2013 was
due mainly to a decrease in overdraft utilisation in Malaysian operations.
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Profit before income tax
Our profit before income tax increased by S$606,000 in 1Q2014 as compared to 1Q2013 primarily
due to higher profit generated from higher revenue for the 1Q2014 as compared to 1Q2013.
Income tax expense
Income tax expense increased by S$92,000 or approximately 31.2% from S$295,000 in 1Q2013
to S$387,000 in 1Q2014 as a result of profits generated in 1Q2014.
REVIEW OF FINANCIAL POSITION
As at 31 December 2013
Non-current assets
Our non-current assets comprise plant and equipment and intangible assets. As at 31 December
2013, the net carrying amount of our plant and equipment was S$4.9 million. This has taken into
account additions of plant and equipment of S$2.4 million mainly for our new centre, ISEC
Singapore. These comprise computer hardware of S$108,000, medical equipment and
instruments of S$1.4 million, office equipment, furniture and fittings of S$232,000 and renovations
of S$678,000.
Intangible assets of S$1.9 million mainly comprise goodwill which arose as a result of our
acquisition of ISEC Eye.
Current assets
Our current assets comprise inventories, trade and other receivables, prepayments and cash and
cash equivalents. As at 31 December 2013, our current assets of S$13.2 million accounted for
approximately 66.0% of our total assets.
Inventories, which mainly comprised surgical supplies, artificial teardrops, and medicines
accounted for approximately 3.1% of our total current assets.
Trade and other receivables consist of trade receivables of S$1.6 million, non-trade receivables
of S$404,000 and deposits of S$208,000. Our trade receivables are generally low as most of our
transactions are conducted on cash terms, whereby patients pay in cash, by credit cards or
through NETS. As at 31 December 2013, our trade receivables of S$1.6 million constituted
approximately 6.9% of our total revenue for FY2013.
Prepayments consist mainly of payments made for computer hardware and software
maintenance, software development, advertisement and insurance premiums. As at 31 December
2013, our prepayments of S$155,000 accounted for approximately 1.2% of our total current
assets.
Our cash and cash equivalents as at 31 December 2013 amounted to S$10.5 million or
approximately 79.4% of our total current assets, which included the cash proceeds of S$5.5
million received from the issue of Shares.
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Shareholders’ equity
As at 31 December 2013, our shareholders’ equity amounted to S$10.9 million comprising of
S$8.9 million of issued and paid up share capital and S$2.1 million of accumulated profits. The
issued and paid up share capital included shares issued of S$3.01 million on acquisition of ISEC
Eye and subscription of our Shares of S$5.5 million.
Non-current liabilities
As at 31 December 2013, our non-current liabilities comprised solely of deferred tax liabilities of
S$977 representing approximately 0.01% of our total liabilities.
Current liabilities
Our current liabilities comprise trade and other payables, bank borrowings and current income tax
payable. As at 31 December 2013, our current liabilities amounted to S$9.2 million or
approximately 99.9% of our total liabilities.
Trade payables were mainly due to third parties and constituted approximately 6.6% of our total
current liabilities. Generally, our suppliers grant us credit terms between 30 to 90 days.
Non-trade payables to third parties amounted to S$2.7 million which constituted approximately
29.1% of our total current liabilities.
Dividend payments amounting to S$3.6 million as at 31 December 2013 constituted approximately
39.2% of total current liabilities.
Accrued expenses of S$356,000 constituted approximately 3.9% of our total current liabilities. The
accrued expenses of S$244,000 in Malaysia comprised mainly EPF and other government
contributions, auditors’ remuneration, tax agents’ fees, staff bonuses and directors’ fees and
S$112,000 in Singapore comprised mainly bonus and directors fees.
GST payables of S$44,000 constituted approximately 0.5% of our total current liabilities and these
were net GST payable.
As at 31 December 2013, outstanding bank borrowings stood at S$747,000 and were in respect
of unsecured overdraft facilities subject to repayment on demand.
Income tax payable as at 31 December 2013 was S$1.2 million and constituted approximately
12.6% of our total current liabilities.
As at 31 March 2014
Non-current assets
Our non-current assets comprise plant and equipment and intangible assets. As at 31 March 2014,
the net carrying amount of our plant and equipment was S$4.7 million. These comprised computer
hardware of S$171,000, electrical fittings of S$369,000, motor vehicles of S$37,000, medical
equipment of S$2.7 million, office equipment, furniture and fittings of S$335,000 and renovations
of S$1.1 million.
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Intangible assets of S$1.9 million mainly comprised goodwill which arose as a result of our
acquisition of ISEC Eye.
Current assets
Our current assets comprise inventories, trade and other receivables, prepayments and cash and
cash equivalents. As at 31 March 2014, our current assets of S$14.2 million accounted for
approximately 68.0% of our total assets.
Inventories, which mainly comprised surgical supplies, artificial teardrops, and medicines
accounted for approximately 2.7% of our total current assets.
Trade and other receivables consisted of trade receivables of S$1.7 million, non-trade receivables
of S$203,000 and deposits of S$176,000. Our trade receivables are generally low as most of our
transactions are conducted on cash terms, whereby patients pay in cash, by credit cards or
through NETS.
Prepayments consisted mainly of payments made for computer hardware and software
maintenance, software development, advertisement and insurance premiums. As at 31 March
2014, our prepayments of S$232,000 accounted for approximately 1.6% of our total current
assets.
Our cash and cash equivalents as at 31 March 2013 amounted to S$11.5 million or approximately
80.9% of our total current assets.
Shareholders’ equity
As at 31 March 2014, our shareholders’ equity amounted to S$12.8 million comprising of S$8.9
million of issued and paid up share capital and S$4.0 million of accumulated profits.
Non-current liabilities
As at 31 March 2014, our non-current liabilities comprised solely of deferred tax liabilities of
S$977 representing approximately 0.01% of our total liabilities.
Current liabilities
Our current liabilities comprise trade and other payables, bank borrowings and current income tax
payable. As at 31 March 2014, our current liabilities amounted to S$8.3 million or approximately
99.9% of our total liabilities.
Trade payables were mainly due to third parties and constituted approximately 9.5% of our total
current liabilities. Generally, our suppliers grant us credit terms between 30 to 90 days.
Non-trade payables of S$5.8 million constituted approximately 69.7% of our total current
liabilities. These amounts comprised mainly amounts due to third parties of S$4.0 million and
amount due to director of the Company of S$1.8 million.
MANAGEMENT’S DISCUSSION AND ANALYSIS OFRESULTS OF OPERATIONS AND FINANCIAL POSITION OFOUR PRO FORMA COMBINED FINANCIAL INFORMATION
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Accrued expenses of S$239,000 constituted approximately 2.9% of our total current liabilities. The
accrued expenses of S$127,000 in Malaysia comprised mainly EPF and other government
contributions, auditors’ remuneration, tax agents’ fees, staff bonuses and directors’ fees and
S$112,000 in Singapore comprised mainly bonus and directors fees.
GST payables of S$64,000 constituted approximately 0.8% of our total current liabilities and these
were net GST payable for our Singapore operations.
As at 31 March 2014, outstanding bank borrowings stood at S$708,000 and were in respect of
unsecured overdraft facilities subject to repayment on demand in Malaysia.
Income tax payable as at 31 March 2014 was S$720,000 and constituted approximately 8.7% of
our total current liabilities and income tax payable in Malaysia was S$533,000 and in Singapore
was S$187,000.
LIQUIDITY AND CAPITAL RESOURCES
Cash flow summary
The following table sets out a summary of our Group’s cash flow for FY2011, FY2012, FY2013 and
1Q2014 in Singapore Dollars:
FY2011 FY2012 FY2013 1Q2014
Net cash from operating activities 6,482,022 6,593,645 8,311,678 896,654
Net cash (used in)/from investing
activities (1,121,999) (1,127,799) (3,887,375) 144,477
Net cash used in financing activities (5,310,321) (2,787,747) (1,129,684) (11,107)
Net change in cash and cash
equivalents 49,702 2,678,099 3,294,619 1,030,024
Cash and cash equivalents at beginning
of financial year/period 3,854,486 3,865,941 6,510,721 9,745,882
Effect of exchange rate changes on
cash and cash equivalents (38,247) (33,319) (59,458) (460)
Cash and cash equivalents at end of
financial year/period 3,865,941 6,510,721 9,745,882 10,775,446
FY2011
In FY2011, we generated approximately S$6.9 million net cash from operating activities before
changes in working capital. Net cash used in working capital amounted to approximately
S$999,000. This was due mainly to increase in inventories of S$37,000, decrease in receivables
by approximately S$134,000 and increase in prepayments of S$24,000, increase in trade and
other payables of S$926,000. In FY2011, we paid income tax of approximately S$1.4 million. The
net cash generated from operating activities amounted to approximately S$6.5 million.
Net cash flow used in investing activities of S$1.1 million was mainly incurred for the acquisition
of plant and equipment of S$1.1 million for the setting up of our new eye centre in ISEC Ampang.
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Net cash flow used in financing activities amounting to S$5.3 million was mainly due to dividend
payment of S$3.9 million, redemption of redeemable preference share of S$737,000 and
repayment of term loan of S$619,000.
As at 31 December 2011, our cash and cash equivalents balance as per combined statements of
cash flow was S$3.9 million.
FY2012
In FY2012, we generated approximately S$7.6 million net cash from operating activities before
changes in working capital. Net cash used in working capital amounted to approximately
S$189,000. This was due mainly to increase in inventories of S$121,000, increase in receivables
by approximately S$114,000 and increase in prepayments of S$66,000 million, increase in trade
and other payables of S$490,000. In FY2012, we paid income tax of S$1.2 million. The net cash
generated from operating activities amounted to approximately S$6.6 million.
Net cash flow used in investing activities of S$1.1 million was incurred mainly for the acquisition
of medical equipment and instruments for our then-subsidiary in ISEC Ampang and also for ISEC
Penang in line with our ongoing policy of keeping abreast of the latest technology so as to
maintain our competitive edge as a leader in eye care.
Net cash flow used in financing activities amounting to S$2.8 million was mainly due to dividend
payment of S$3.0 million, which was offset by the subscription of shares in our then-subsidiary
ISEC Ampang and in our subsidiary ISEC Penang, by non-controlling interests of S$304,000.
As at 31 December 2012, our cash and cash equivalents balance as per combined statements of
cash flow was S$6.5 million.
FY2013
In FY2013, we generated approximately S$8.2 million net cash from operating activities before
changes in working capital. Net cash used in working capital amounted to approximately S$1.3
million. This was due mainly to increase in inventories of S$34,000, decrease in receivables by
approximately S$932,000 and increase in prepayments of S$21,000, increase in trade and other
payables of S$392,000. In FY2013, we paid income tax of approximately S$1.2 million. The net
cash generated from operating activities amounted to approximately S$8.3 million.
Net cash flow used in investing activities of S$3.9 million was mainly incurred on renovation costs
and the acquisition of plant and equipment comprising mainly medical equipment and electrical
equipment for ISEC Penang and ISEC Singapore which was offset by proceeds from disposal of
plant and equipment of S$385,000 in ISEC Ampang.
Net cash flow used in financing activities amounting to S$1.1 million was mainly due to dividend
payment of S$6.4 million and payment made for redemption of redeemable preference share of
S$174,000 which was offset by proceeds from our Shares issued of S$5.5 million.
As at 31 December 2013, our cash and cash equivalents balance as per combined statements of
cash flow was S$9.7 million.
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82
1Q2014
In 1Q2014, we generated approximately S$2.3 million net cash from operating activities before
changes in working capital. Net cash generated from working capital amounted to approximately
S$601,000. This was due mainly to decrease in inventories of S$20,000, increase in receivables
by approximately S$130,000 and increase in prepayments of S$78,000 million, decrease in trade
and other payables of S$414,000. In 1Q2014, we paid income tax of approximately S$832,000.
The net cash generated from operating activities amounted to approximately S$897,000.
Net cash flow from investing activities of S$144,000 was mainly due to proceeds of S$142,000
received from disposal of our then-subsidiary in Malaysia, ISEC Ampang.
Net cash flow used in financing activities of S$11,000 was mainly due to interest paid during the
period.
As at 31 March 2014, our cash and cash equivalents balance as per combined statements of cash
flow was S$10.8 million.
Source of liquidity
Our operations requirements are funded mainly from internally generated funds and some
external sources of funds. Our internal funds are mainly generated from profits from our
operations as well as our existing cash and bank balances. External sources of funds are mainly
credit terms as extended by our suppliers and credit facilities such as term loans and overdraft
granted by banks.
Our principal usage of cash are mainly for operating expenses, working capital requirement,
purchase of medical equipment, repayment of credit facilities and capital expenditure.
As at 31 March 2014, our cash and cash equivalents amounted to S$10.8 million. As at the Latest
Practicable Date, our cash and cash equivalents amounted to S$9.5 million.
Our Directors are of the reasonable opinion that, after having made due and careful enquiry and
after taking into account the cash flows generated from our operations and our existing cash and
cash equivalents, the working capital available to us as at the date of lodgement of this Offer
Document is sufficient for present requirements and for at least 12 months after the listing of our
Company on Catalist.
The Sponsor is of the reasonable opinion that, after having made due and careful enquiry and
after taking into account the cash flows generated from operations and the existing cash and cash
equivalents, the working capital available to the Group as at the date of lodgement of this Offer
Document is sufficient for present requirements and for at least 12 months after the listing of the
Company on Catalist.
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CAPITAL EXPENDITURES, DIVESTMENTS AND COMMITMENTS
Capital Expenditure
The following table summarises our capital expenditure:
FY2011 FY2012 FY2013
1 January
2014 to
the Latest
Practicable
Date
$’000 $’000 $’000 $’000
Computer equipment 47 28 42 105
Electrical equipment 8 293 185 –
Motor vehicles – 70 – –
Medical equipment 739 568 1,183 910
Office equipment, furniture and fittings 61 9 94 34
Renovation 219 127 418 246
Total 1,074 1,095 1,922(1) 1,295(1)
Note:
(1) The above capital expenditure represents the addition incurred for FY2013 and the period from 1 January 2014 to
the Latest Practicable Date, taking into account certain additions of plant and equipment for the new clinic at Mount
Elizabeth Novena Specialist Centre. For the purpose of preparing the Unaudited Pro Forma Combined Financial
Information, such addition for the new clinic in Mount Elizabeth Novena Specialist Centre was assumed to have
taken place on 1 January 2013.
The above capital expenditure were largely financed by internally generated resources and
shareholders’ equity injection.
Capital expenditure incurred in FY2011 and FY2012 were mainly medical equipment and
renovation for ISEC Ampang and capital expenditure incurred in FY2013 were mainly medical
equipment and renovation for ISEC Penang. Capital expenditure incurred from 1 January 2014 to
the Latest Practicable Date was mainly medical equipment and renovation for ISEC Singapore.
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Capital Divestment
The following table summarises our capital divestment:
FY2011 FY2012 FY2013
1 January
2014 to
the Latest
Practicable
Date
$’000 $’000 $’000 $’000
Computer equipment – – 20 –
Motor vehicles – 60 – –
Medical equipment – – 761 37
Office equipment, furniture and fittings – – 18 –
Total – 60 798 37
The divestment of medical equipment in FY2013 was mainly related to the closure of ISEC
Ampang in FY2013.
Capital Commitments
As at 31 March 2014 and as at the Latest Practicable Date, the capital commitments our Group
are as follows:
As at
31 March 2014
As at the Latest
Practicable Date
$’000 $’000
Computer equipment – 6
Medical equipment – 1,348
Office equipment, furniture and fittings – 263
Renovation – 365
Total – 1,982
The capital commitments as at the Latest Practicable Date were mainly contracted for the
renovation and purchase of equipment for ISEC Singapore. We intend to finance the above capital
commitments with internally generated funds.
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Operating Lease Commitments
As at 31 March 2014 and as at the Latest Practicable Date, we have the following operating lease
payment commitments relating to the annual rental pursuant to the tenancy of our eye centres,
offices and office equipment as disclosed in the section entitled “General Information on Our
Company – Material Properties and Fixed Assets” of this Offer Document. We intend to finance the
below operating lease commitments with internally generated funds.
As at
31 March 2014
As at the Latest
Practicable Date
$’000 $’000
Not later than 1 year 557 1,071
Later than 1 year but not later than 5 years 923 1,715
More than 5 years 466 413
Total 1,946 3,199
Operating lease commitments more than 5 years are mainly lease payment commitments for ISEC
Penang.
CONTINGENT LIABILITIES
As at the Latest Practicable Date, we do not have any contingent liabilities.
INFLATION
Our financial performance for the Period Under Review was not materially affected by inflation.
FOREIGN EXCHANGE MANAGEMENT
Our Group’s transactions are largely denominated in Ringgit Malaysia and Singapore Dollars, and
we have limited exposure to foreign exchange risk. Our foreign exchange gains and losses for the
Period Under Review have been insignificant.
We are subject to foreign currency translation exposure as our Group’s financial statements are
presented in S$ while the financial statements of certain subsidiaries are presented in RM, which
are the currencies of the primary economic environment in which the entities operate. Any
significant change in the exchange rate of the relevant currency against S$ may adversely affect
our financial performance and financial condition. Please refer to the section entitled “Risk Factors
– Risk Relating to our Countries of Operation – Exchange rate instability may adversely affect our
business, financial condition, results of business operations and prospects” for further details.
Our Group does not currently have a formal hedging policy though we may, subject to the approval
of our Board, enter into relevant transactions where necessary, to hedge our exposure to foreign
currency fluctuations. We will also put in place, where necessary, procedures to hedge our
exposure to foreign currency fluctuations. Such procedures will be reviewed and approved by our
Audit Committee and our Board.
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86
SIGNIFICANT ACCOUNTING POLICIES CHANGES
There is no significant accounting policies change during the Period Under Review.
CAPITALISATION AND INDEBTEDNESS
The following table shows the cash and cash equivalents as well as capitalisation and borrowings
of our Group:
(i) as at 31 March 2014 based on “Unaudited Pro Forma Combined Financial Information for the
Financial Years ended 31 December 2011, 2012, 2013 and for the Financial Period from 1
January 2014 to 31 March 2014”;
(ii) as at the Latest Practicable Date based on our management accounts; and
(ii) as adjusted for the net proceeds from the Placement.
As at
31 March
2014
As at the
Latest
Practicable
Date
As
adjusted
for the net
proceeds
from the
Placement
$’000 $’000 $’000
Cash and cash equivalents as per combined
statements of financial position 11,484 9,548 25,848(1)
Indebtedness
Current
– unsecured and guaranteed 708 718 718
Total indebtedness 708 718 718
Total shareholders’ equity 12,567 14,647 30,947(1)
Total capitalisation and indebtedness 13,275 15,365 31,665
Note:
(1) Adjusted to include the net proceeds from the Placement of approximately S$16.3 million.
MANAGEMENT’S DISCUSSION AND ANALYSIS OFRESULTS OF OPERATIONS AND FINANCIAL POSITION OFOUR PRO FORMA COMBINED FINANCIAL INFORMATION
87
Indebtedness
As at 31 March 2014, bank borrowings taken up by our Group comprise only overdraft and no
other forms of borrowings. Our overdraft utilisation of S$708,000 are unsecured supported by
guarantees provided by shareholders of ISEC Penang. The overdraft had an interest rate of base
lending rate minus 0.75% per annum and payable on demand.
As at the Latest Practicable Date, save for the overdraft of S$718,000, there are no loans or
borrowings taken up by our Group. As at the Latest Practicable Date, our Group has unutilised
overdraft facilities of approximately S$63,000.
To the best of our Directors’ knowledge, as at the Latest Practicable Date, our Group is not in
breach of any of the terms and conditions or covenants associated with any of our financing
arrangements which could materially affect our Company’s financial position, results of business
operations or the investments of our shareholders.
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88
PROSPECTS
The following write-up has been extracted from the Singapore and Malaysia Ophthalmology
Market Overview, which is set out in full in Appendix L to this Offer Document. Please refer to the
Singapore and Malaysia Ophthalmology Market Overview for further details.
Both Malaysia and Singapore have huge growth potential for their respective ophthalmology
market, particularly in the areas of cataract surgery, LASIK and vitreoretinal surgeries. Having
identified the healthcare sector as a National Key Economic Area (NKEA), Malaysia’s healthcare
expenditure is expected to experience strong growth of 7.0% CAGR from S$12.0 billion in 2008
to S$23.5 billion in 2018. Similarly, with an ageing population, Singapore is also experiencing an
increase in healthcare expenditure, which is expected to reach S$32.1 billion in 2018 from S$8.1
billion in 2008 at a CAGR of 14.8%.
Both Singaporeans and Malaysians suffer from several common eye disorders such as dry eyes,
cataract, myopia, glaucoma, age-related macular degeneration (AMD). Common market drivers
for the private ophthalmology services market include:
• Ageing population
The number of elderly citizens (above 65 years old) in Malaysia is expected to reach 1.5
million by 2020 from the current amount of 1.0 million and is also coupled with a growing
number of people above age 40. In Singapore, the number of elderly citizens (above 65 years
old) is expected to triple to 900,000 by 2030 and is also coupled with a growing number of
people above age 40. This expanding elderly population in Malaysia and Singapore will
translate into a larger elderly patient group suffering from cataract or vitreoretinal diseases.
These two eye disorders are age-related where the prevalence is much higher among the
elderly.
• Increased awareness
The introduction of the Malaysian Information, Communication and Multimedia Services 886
Strategy (MyICMS 886) has resulted in an increase in information technology (IT)
penetration in Malaysia in recent years. This is exemplified by the increase in number of
internet users in Malaysia from 55.8 per 100 people in 2008 to 67 per 100 people in 2013.
This increase in internet literacy has allowed Malaysians to seek better and more relevant
information from the internet regarding to eye disorders and also treatments available for
various eye disorders (e.g. LASIK). This in turn increases their likelihood to seek treatment.
With the increase in internet penetration over the years as witnessed by the increase in
number of internet users from 69 per 100 people in 2008 to 73 per 100 people in 2013, a
greater proportion of Singaporean is likely to gain awareness of eye diseases and treatments
available for various eye diseases (e.g. LASIK) online. This would result in an increase in the
demand for ophthalmology services.
• Rising income level
The rising affluence among Malaysians, reported by the 2012 Household Income Survey
where the Malaysian household monthly income rose from S$1,532 in 2009 to S$1,903 in
2012, and among Singaporeans, where an increase in the median monthly household
income from work (S$7,570 in 2012 to S$7,870 in 2013), increases the affordability of private
ophthalmology services where prices are much higher than those in the public sector.
INDUSTRY OVERVIEW
89
• Increased uptake of private insurance
It is forecasted that the medical and personal accident insurance market in Malaysia would
increase at a CAGR of 13.6% from 2013 to 2018 and this will serve as a driver to encourage
more people to seek private medical services including ophthalmology-related medical
procedures as it is subsidised by insurance.
It is forecasted that the annual premium growth in Singapore between 2013 and 2020 is
11.8% and this would serve as a driver to encourage people to seek ophthalmology-related
medical procedures as well.
• Growth of medical tourism market
As one of the key focus of Malaysia’s Economic Transformation Program, huge amount of
funds and effort are directed towards the growth of Malaysia’s medical tourism industry. This
would in turn serve to increase the number of medical tourists visiting Malaysia for medical
procedures including ophthalmology. It is estimated that the revenue from medical tourism
will grow at a CAGR of 26.7% from S$106.0 million in 2009 to S$894.0 million by 2018.
Ophthalmology currently is the second most popular medical procedure amongst medical
tourists coming to Singapore. It is expected that the medical tourists coming to Singapore will
increase from 604,000 in 2013 to more than 1 million in 2018. This increase represents a key
driver pushing Singapore’s ophthalmology market.
• Rising incidence of diabetes
In respect of Malaysia only, currently approximately 12.0% of Malaysians are suffering from
diabetes and this number is growing. There is a higher incidence of cataracts and glaucoma
in diabetic patients, and diabetic retinopathy may require laser treatment, injection of
medication into the eye or surgery. This would contribute to the growth of more eye patients.
Cataract surgery, LASIK and vitreoretinal surgery are the most common ophthalmological surgery
procedures in both Malaysia and Singapore. While the prices for cataract, LASIK and vitreoretinal
surgeries are generally lower in the public sector than in the private sector (with the exception of
Malaysia’s LASIK surgery which is only offered by the private sector), it was found that both
Malaysians and Singaporeans who can afford the price charged by private healthcare providers
prefer private healthcare services over public healthcare services. This is attributed to the shorter
waiting time, higher quality as well as more personalised treatment and patient care offered by the
private ophthalmology services providers. As these procedures typically require constant follow-
up, use of laser and injection of medication, private ophthalmology services providers are often
the patients preferred choice due to the few aforementioned attributes.
There is huge opportunity for private ophthalmology players. However, new entrants need to
consider certain barriers of entry in both countries, such as:
• Reputation of ophthalmologist
The reputation of the ophthalmologist is vital for success in the private ophthalmology
market. A more experienced and reputable ophthalmologist is likely to have an adequate
number of patients in order to sustain the business.
INDUSTRY OVERVIEW
90
Therefore, for an ophthalmologist wanting to enter the private sector, it is advised that one
stays in the public sector to build up his/her reputation or enter into collaboration with a
reputable ophthalmologist.
• High start-up cost
The investment cost to setup a private eye clinic is high and represents an obstacle for most
ophthalmologists. The two major costs are the rental or purchase of a premise to setup the
clinic and the purchase of the necessary equipment to perform eye surgeries.
For a single ophthalmologist to setup his own clinic, a high start-up cost is required (e.g.
rental, equipment for treatment, manpower). This makes it prohibitive for ophthalmologists in
many cases.
• Strict regulations
In Malaysia, there are many criteria to be met under the requirements of the Private
Healthcare Facilities and Services Act 2006. This forms a significant barrier for those looking
to setup an ambulatory care centre.
Overall, the continuous growth of the ophthalmology services market in Malaysia and Singapore
shows that there remains an unmet demand for current ophthalmology market players to expand
and for market entrants to tap on. With a well-planned business strategy, both current players and
new entrants could prosper in the ophthalmology services market.
TREND INFORMATION
In FY2014, we expect an increase in expenses mainly due to costs associated with the Listing and
the setting up of our new centre in Singapore. In FY2015, we expect the imposition of GST in
Malaysia to increase our cost of sales and we expect to adjust the selling prices of our services
in Malaysia to provide for such increase in cost of sales.
Save as discussed above and under the section entitled “Risk Factors”, “Management’s
Discussion and Analysis of Results of Operations and Financial Position of our Pro Forma
Combined Financial Information” and the “Singapore and Malaysia Ophthalmology Market
Overview” in Appendix L of this Offer Document, and barring any unforeseen circumstances, our
Directors are not aware of any significant recent trends in sales and inventories, the costs and
selling prices of our services or other known trends, uncertainties, demands, commitments or
events in FY2014, that are reasonably likely to have a material and adverse effect on our revenue,
profitability, liquidity or capital resources, or may cause financial information disclosed in this Offer
Document to be not necessarily indicative of our future operating results or financial condition.
Please also refer to the section entitled “Cautionary Note Regarding Forward-Looking
Statements” of this Offer Document.
INDUSTRY OVERVIEW
91
HISTORY
Our Company was incorporated in Singapore on 2 January 2014 under the Companies Act as a
private company limited by shares, under the name of “ISEC Holdings Pte. Ltd.” Our Company’s
registration number is 201400185H. Our Company was converted into a public limited company
and the name of our Company was changed to “ISEC Healthcare Ltd.” in connection therewith on
24 September 2014. Our Company became the holding company of our Group following
completion of the Restructuring Exercise. For more information, please refer to the section entitled
“Restructuring Exercise” of this Offer Document.
Key Milestones
2007 – January ISEC KL was formed by seven (7) specialist doctors (namely, Dr Wong
Jun Shyan, Dr Fang Seng Kheong, Dr Choong Yee Fong, Dr Michael
Law Sie Haur, Dr Kok Howe Sen, Dr Lim Kian Seng and Dr Barkeh
Hanim Binti Jumaat), which acquired the business of Retina Associates
(an eye clinic owned by Dr Wong Jun Shyan)
2007 – May Dr Lee Hung Ming, in collaboration with PHS, spearheaded Lee Hung
Ming Eye Centre (then known as Parkway Eye Centre) at Gleneagles
Hospital, Singapore
Dr Lee Hung Ming successfully performed bladeless corneal transplant
surgery using femtosecond-laser (the then-latest technology in Asia)
2007 – November We, namely the business of the LHM Companies acquired pursuant to
the Restructuring Exercise, began providing specialist medical
ophthalmology services to LHM Eye Centre (then known as Parkway
Eye Centre), helmed by Dr Lee Hung Ming
2007 to 2008 Dr Lee Hung Ming conducted a prospective multicentre trial to evaluate
Personalised Treatment Aspheric Algorithm when used in Wave-front
guided LASIK treatment at LHM Eye Centre (then known as Parkway
Eye Centre)
2008 – January Official opening of ISEC KL as the first private comprehensive tertiary
eye centre by Datuk Seri Dr Fong Chan Onn, the then-Minister of Human
Resources of Malaysia
ISEC KL held its first symposium on “Subspecialty Updates For The
General Ophthalmologist”
Memorandum of Understanding signed between ISEC KL and Singapore
National Eye Centre on the cooperation and collaboration on specified
programmes in ophthalmic services, education and research and
development
GENERAL INFORMATION ON OUR GROUP
92
2009 – February ISEC KL granted Joint Commission International (“JCI”) accreditation
status on achieving international quality care in compliance with the JCI
ambulatory care standards for a period of three (3) years. ISEC KL was
the first eye ambulatory surgical centre accredited in South-East Asia
and Far East region. The ceremony to commemorate the accreditation in
June 2009 was attended by Datuk Seri Liow Tiong Lai, the then-Health
Minister of Malaysia. For more information on our JCI accreditation,
please refer to the section entitled “General Information on Our Group –
Service Quality Control” of this Offer Document
ISEC KL held its second scientific symposium entitled “Oculoplastic
Symposium”
2009 – April ISEC KL and CIBA VISION® collaborate in relation to the launch of CIBA
VISION® Academy for Eyecare Excellence, which provides professional
education to eye care professionals
2009 – June Memorandum of Understanding signed between ISEC KL with Sau Seng
Lum Dialysis and Stroke Rehabilitation Center for free electronic
medical screening and subsidised care for its members
2010 – March ISEC KL held its third scientific symposium on “Ophthalmology
Symposium For Primary Eye Health Providers”
Memorandum of Understanding signed between ISEC KL and Universiti
Kebangsaan Malaysia in respect of a joint collaboration on academic
programs, research and related academic training, staff and student
attachments
2010 – May Dr Lee Hung Ming successfully treated Presbyopia (old-sightedness)
using IntraCor laser treatment (the then-cutting edge technology in
South-East Asia)
2011 – July ISEC KL held its fourth scientific symposium on “Ophthalmology
Symposium For Primary Care Physicians”
2012 – April ISEC KL successfully completed an innovative surgery, cultivated oral
mucosa epithelial transplantation (COMET), a revolutionary eye
treatment involving stem cells, performed by Dr Then Kong Yong
Dr Lee Hung Ming successfully performed blade-less cataract surgery
using femtosecond laser (the then-latest technology for treatment of
cataract in Singapore)
ISEC KL successfully treated patients with presbyopia using supracor
LASIK (the then-latest technology), performed by Dr Choong Yee Fong
2012 – May ISEC KL renewed its JCI accreditation status on achieving international
quality care in compliance with JCI ambulatory care standards for
another period of three (3) years
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93
2012 – September Dr Lee Hung Ming successfully performed bladeless LASIK using the 5th
generation 150 kHz IFS laser for LASIK (Advanced Medical Optics’s
most advanced femtosecond laser technology)
2014 – February ISEC Penang soft opening
2014 – August ISEC Singapore soft opening
2014 – September The name of the clinic Parkway Eye Centre was changed to Lee Hung
Ming Eye Centre
BUSINESS OVERVIEW
We are a comprehensive medical eye care service provider with ambulatory surgical centres in
Malaysia and Singapore. Our doctors are specialised in the fields of cataract and refractive
surgery (including LASIK), vitreoretinal diseases, corneal and external eye diseases, glaucoma,
uveitis, oculoplastics, facial cosmetics and aesthetics surgery, adult strabismus and paediatric
ophthalmology, and most of our specialist doctors are shareholders of our Company.
As at the Latest Practicable Date, our Group currently provides specialist medical eye care
services with 19 specialist doctors at four (4) locations in Malaysia and Singapore. The majority
of our specialists doctors have consulted at prominent local teaching university hospitals, and are
amongst the leading eye specialist doctors in the region. Our specialist doctors possess the
necessary training and clinical experiences with previous clinical appointments in renowned eye
centres including those in Singapore, India, Australia, United Kingdom, Canada and the United
States. Many of our specialist doctors are key opinion leaders in their respective subspecialty
fields. They are involved in research and conducting clinical trials for pharmaceutical companies,
and have presented extensively at both regional and international eye care conferences.
Corporate Philosophy
We aim to operate, manage and further establish centres which we term as Centres of Excellence
specialising in ophthalmology, with the vision of providing high quality, compassionate, world-
class eye care at an affordable level to the local and regional community.
Our existing Centres of Excellence refer to ISEC KL, ISEC Penang and ISEC Singapore which are
centres where our teams of specialist doctors, using state-of-the-art technology and facilities,
provide our patients with excellent medical eye care services as well as undertake best practices,
research, support and training in the field of ophthalmology.
Our Business
Malaysia
Kuala Lumpur
ISEC KL is an ambulatory surgical centre with 12 full-time ophthalmologists and two (2) visiting
consultant ophthalmologists as at the Latest Practicable Date. ISEC KL’s premises are spread
over approximately 23,000 square feet, fully integrated with electronic patient medical record
system and equipped with state-of-the-art ophthalmic facilities. At ISEC KL, we have 15
consultation rooms, five (5) laser suites, four (4) operating theatres, executive suites and full
general anaesthetic services. In FY2013, at ISEC KL, we performed over 5,000 major surgeries
GENERAL INFORMATION ON OUR GROUP
94
and served more than 70,000 patients, including patients who travel from overseas to seek
consultation and services from our specialist doctors. ISEC KL was the first eye care centre to
obtain JCI accreditation in the South-East Asia and Far East Region. For more information on our
JCI accreditation, please refer to the section entitled “General Information on Our Group – Service
Quality Control” of this Offer Document.
Penang
ISEC Penang opened in early 2014 with a newly renovated centre housing state-of-the-art
diagnostic and surgical equipment to provide the up to date eye care services in a contemporary
setting. ISEC Penang has three (3) full-time ophthalmologists at a centre of approximately 9,500
square feet, which is equipped with four (4) clinic consultation rooms, two (2) optometry rooms,
two (2) operating theatres, two (2) treatment rooms as well as various facilities for visual field
testing, laser and electrocardiography.
Singapore
Mount Elizabeth Novena Hospital
We have expanded our reach in Singapore by opening our new clinic at Mount Elizabeth Novena
Hospital in August 2014 with three (3) full-time ophthalmologists. ISEC Singapore, which occupies
an area of approximately 3,229 square feet, is equipped with state-of-the-art ophthalmology
equipment and facilities such as Alcon’s latest Wavelight Refractive Suite, Zeiss’ latest Cataract
Suite, an oculoplastics and facial aesthetics surgery suite, adult and paediatric glaucoma
screening and treatment tools and other state-of-the-art investigative tools.
Lee Hung Ming Eye Centre – Gleneagles Hospital
In addition to the above centres, the LHM Companies have been providing specialist medical
ophthalmology services to LHM Eye Centre (formerly known as Parkway Eye Centre) since 2007.
We acquired the business of the LHM Companies as part of the Restructuring Exercise. In August
2014, ISEC Eye entered into the PHS Service Agreement with PHS in relation to the provision of
specialist medical ophthalmology services to LHM Eye Centre to be performed by ISEC Eye’s
specialist doctor(s), which as at the Latest Practicable Date comprises our Executive Vice
Chairman, Dr Lee Hung Ming. The PHS Service Agreement is for a term of five (5) years and will
expire on 31 August 2019, unless terminated or renewed. Either PHS or ISEC Eye may terminate
the PHS Service Agreement at any time by giving to the other party not less than three (3) months’
prior written notice. Save for Dr Lee Hung Ming who shall practise as a specialist medical
ophthalmologist exclusively at LHM Eye Centre (through ISEC Eye), the PHS Service Agreement
does not restrict any of ISEC Eye’s specialist doctor(s) from providing similar services at any other
location or related corporation of ISEC Eye. In addition, the PHS Service Agreement does not
require more than one specialist doctor providing services at LHM Eye Centre at any time.
GENERAL INFORMATION ON OUR GROUP
95
Our Specialist Doctors
Our Group has 19 specialist doctors as at the Latest Practicable Date. The qualifications and
areas of subspecialty of our specialist doctors who are Directors and Executive Officers are set
out below:
Specialist Doctor Qualifications Subspecialty
Years of
Clinical
Experience
Medical
Association
Memberships
Dr Lee Hung Ming • Fellow of the
Academy of
Medicine,
Singapore in
Ophthalmology
• Bachelor of
Medicine and
Bachelor of
Surgery
• Master of
Medicine in
Ophthalmology
• Fellow of the
Royal College of
Surgeons of
Edinburgh
• Cataract and
Implant Surgery
• Cornea, External
Eye Diseases
and Refractive
Surgery
25 • Asia-Pacific
Association of
Ophthalmologists
• Asia Pacific
Society of
Cataract and
Refractive
Surgeons
• College of
Ophthalmologists
of Singapore
• Singapore
Society of
Ophthalmology
Dr Wong Jun Shyan • Bachelor of
Medicine and
Bachelor of
Surgery
• Master of
Medicine in
Ophthalmology
• Fellow of the
Royal College of
Surgeons of
Edinburgh
• Fellow of the
Academy of
Medicine
Malaysia
• Cataract and
Implant Surgery
• Vitreoretinal
Diseases
23 • The Retina
Society (USA)
GENERAL INFORMATION ON OUR GROUP
96
Specialist Doctor Qualifications Subspecialty
Years of
Clinical
Experience
Medical
Association
Memberships
Dr Fang Seng
Kheong
• Bachelor of
Medicine and
Bachelor of
Surgery
• Master of
Surgery in
Ophthalmology
• Fellow of the
Academy of
Medicine
Malaysia
• Cataract and
Implant Surgery
• Glaucoma
28 • American
Academy of
Ophthalmology
• Asia Pacific
Academy of
Ophthalmology
• Asia Pacific
Cataract and
Refractive
Surgery Society
• Asia Pacific
Glaucoma
Society
• Asian Angle
Closure
Glaucoma Club
• College of
Surgeons,
Malaysia
• Malaysian
Medical
Association
• Malaysia Society
of Ophthalmology
• South-East Asia
Glaucoma
Interest Group
Dr Choong Yee
Fong
• Bachelor of
Medicine and
Bachelor of
Surgery
• Fellow of the
Royal College of
Ophthalmologists,
London
• Fellow of the
Academy of
Medicine
Malaysia
• Cataract and
Implant Surgery
• Adult Strabismus
and Paediatric
Ophthalmology
18 • Malaysia Medical
Association
• World Society of
Paediatric
Ophthalmology
and Strabismus
GENERAL INFORMATION ON OUR GROUP
97
Specialist Doctor Qualifications Subspecialty
Years of
Clinical
Experience
Medical
Association
Memberships
Dr Alan Ang • Bachelor of
Medicine,
Bachelor of
Surgery and
Bachelor of
Obstetrics
• Fellow of the
Royal College of
Ophthalmologists,
London
• Cataract and
Implant Surgery
• Vitreoretinal
Diseases
21 • European Society
of Cataract and
Refractive
Surgery
Dr Cordelia Chan • Bachelor of
Medicine and
Bachelor of
Surgery
• Master of
Medicine in
Ophthalmology
• Fellow of the
Royal College of
Surgeons of
Edinburgh
• Fellow of the
Academy of
Medicine,
Singapore in
Ophthalmology
• Cataract and
Implant Surgery
• Cornea, External
Eye Diseases
and Refractive
Surgery
23 • American Society
of Cataract and
Refractive
Surgery
• Asia Pacific
Academy of
Cataract and
Refractive
Surgery
Please refer to the section entitled “Directors, Executive Officers and Employees” of this Offer
Document for more information on our senior specialist doctors.
SERVICES
We strive to provide high quality, compassionate, world-class eye care to the local and regional
community. We provide a wide range of tertiary specialty ophthalmology services at each of our
locations and the services we provide are set out below:
• Cataract and Intraocular Lens Implants
Cataract refers to the clouding of the normally clear lens of the eye and is treated by
removing the cataract and implanting an intraocular lens (“IOL”), a tiny, lightweight, clear
plastic disk placed in the eye. The IOL replaces the focusing power of the eye’s natural lens.
GENERAL INFORMATION ON OUR GROUP
98
Our specialist doctors generally perform cataract surgery using the phacoemulsification
method, which does not require injections or suturing. A special devise utilising high
frequency ultrasound energy is used to soften and breakdown the cataract so that it can be
removed by suction. Using our state-of-the-art technology, a cataract surgery may be
successfully completed within 15 minutes.
Our specialist doctors also perform complicated cataract surgeries treating conditions such
as dislocated cataract, traumatic cataract and paediatric cataract.
We offer state-of-the-art bladeless cataract surgery using femtosecond laser technology. Our
specialist doctors also implant a wide array of lenses including multifocal and astigmatic
corrective lenses.
• Refractive Surgery
LASIK is the most popular form of laser eye surgery. LASIK eye surgery reshapes the cornea
of the eye and thereby corrects and enhances eyesight. All our centres offer our patients
LASIK surgery and consultation. We offer all forms of refractive surgery, which include the
bladeless femtosecond-laser LASIK surgery, Refractive Lenticule Extraction ReLex™ and
ReLEx® SMILE™, Microkeratome LASIK surgery, Epi-LASIK, LASEK, PRK, Phakic
Intraocular Lens Implant such as Implantable Contact Lens (ICL), as well as SupraCor
Presbyopic Laser Surgery.
• Vitreous and Retinal Diseases
Our specialist doctors are well-versed in performing retinal detachment surgery (involving
the reattachment of retinal tear), macular hole surgery, epiretinal membrane surgery
(removal of the layer of semitransparent scaring which grows on the inner surface of the
retina, and causes distortion in vision and vision loss) and diabetic eye disease
management. With uncontrolled diabetes, the eye is an important organ which will be
affected by retinopathy, which may eventually lead to permanent damage to the eye and
vision. Our specialist doctors are skilled in the laser treatment for retinopathy, which prevents
deterioration in retinopathy and reduces the risk of blindness by more than 95%.
• Cornea, External Eye Diseases and Anterior Segment
We have a full corneal diagnostic and clinic facility. Our specialist doctors are skilled in
pterygium surgery (surgery to removal of fleshy tissue that grows over the cornea, which
occurs more commonly in people who spend long periods of time outdoors in sunny
climates), corneal transplant surgery, anterior segment reconstruction (involving techniques
used to repair a defective or damaged pupil) as well as cornea collagen cross-linking (an
advanced treatment for keratoconus, the degenerative disorder of the eye in which structural
changes within the cornea causes it to thin and change from a normal spherical shape,
resulting in a distortion of vision).
We also treat ocular surface problems and perform limbal stem-cell transplantation.
• Adult Strabismus and Paediatric Ophthalmology
We offer a wide range of visual screening for children. Our specialist doctors are skilled at
paediatric cataract surgery, retinopathy of prematurity management as well as childhood
tumour management. Strabismus refers to misaligned eyes which often develop because the
GENERAL INFORMATION ON OUR GROUP
99
eye muscles are uncoordinated and do not move the eyes together. This condition usually
begins in infancy or childhood and children, unlike adults, often compensate for strabismus
by squinting or covering one eye. Strabismus is often treated by surgically adjusting the
tension on the eye muscles.
We also offer atropine 0.01% and 0.5% eye drop treatments to control childhood myopia.
• Glaucoma Diagnostics and Therapeutics
Glaucoma is a disease of the optic nerve, which causes blind spots and vision loss. At our
centres, we offer the Humphrey Visual Field Test, which draws a map of a patient’s field of
vision. We also offer Optical Coherent Tomography testing, which is a non-invasive imaging
test that uses light waves to take cross-section pictures of the anterior segment, optic nerve
head and the retina. Using these tests, we are able to help our patients with early detection,
diagnosis and treatment for glaucoma, retinal diseases and other conditions.
We employ specialised lasers, such as Laser Iridotomy, Laser Iridoplasty, Laser Suturelysis,
Argon Laser Trabeculoplasty, Nd:YAG Laser (neodymium-doped yttrium aluminium garnet),
Transcleral Cyclophotocoagulation and Selective Laser Trabeculoplasty, to treat glaucoma.
Our specialist doctors also perform routine glaucoma surgery (trabeculectomy) and complex
glaucoma surgery involving glaucoma drainage devices.
• Medical Retinal Diseases
Our technology and testing facilities assist our specialist doctors in establishing accurate
diagnoses of medical retinal diseases. At our centres, we offer patients angiogram testing,
which uses fluorescein and ICG dyes and a camera to take pictures and evaluate the blood
flow through the vessels in the back of the eye.
We offer intravitreal injection treatments such as anti-VEGF and steroid injections.
• Oculoplastics, Facial Cosmetics and Aesthetics Surgery
Our oculoplastic services offered, amongst others, include lid and orbit abnormality
correction surgery, removal of tumours, reconstruction, eyelid procedures such as ‘double
eyelid’ surgery, Botox, filler injections for facial rejuvenation and implants. Our specialist
doctors provide medical and surgical solutions to thyroid eye diseases and aesthetic
surgeries. We also perform complex orbital surgeries such as orbital reconstruction and
decompression procedures.
• Uveitis
Uveitis refers to the inflammation of the uvea of the eye. At our centres, we provide
comprehensive ocular inflammation diseases diagnosis and therapeutic services.
• Optometry and Orthoptics
At our centres, in addition to our specialist doctors, we also engage in-house and visiting
optometrists and orthoptists to provide comprehensive services to our patients.
GENERAL INFORMATION ON OUR GROUP
100
The services provided at each of our centres are set out below:
Services Provided
ISEC
KL
ISEC
Penang
ISEC
Singapore
Lee Hung
Ming
Eye Centre
Cataract and Intraocular Lens Implant
Mature Cataract Management* Y Y Y Y
Child Cataract Management* Y Y Y Y
Refractive Lens Exchange* Y Y
Refractive Surgery
LASIK, PRK, LASEK and Epi-LASIK Y Y Y Y
Phakic Intraocular Lens Implant* Y Y Y Y
Refractive Lenticule Extraction (ReLEx™
and ReLEx® SMILE™)
Y
SupraCor Presbyopic Laser Surgery Y Y
Vitreous and Retinal Diseases
Retinal Detachment Surgery* Y Y Y Y
Macular Hole Surgery* Y Y Y Y
Epiretinal Membrane Surgery* Y Y Y Y
Diabetic Eye Disease Management* Y Y Y Y
Retinal Laser Photocoagulation Y Y Y Y
Cornea, External Eye Diseases and
Anterior Segment
Pterygium Surgery Y Y Y Y
Corneal Transplant Surgery* Y Y Y Y
Anterior Segment Reconstruction* Y Y Y Y
Cornea Collagen Cross-Linking Y Y Y Y
Adult Strabismus and Paediatric
Ophthalmology
Visual Screening Y Y Y Y
Paediatric Cataract Surgery* Y Y Y Y
Retinopathy of Prematurity Management* Y Y
Squint Surgery* Y Y
Childhood Tumour Management* Y Y
Paediatric Myopia Y Y Y Y
GENERAL INFORMATION ON OUR GROUP
101
Services Provided
ISEC
KL
ISEC
Penang
ISEC
Singapore
Lee Hung
Ming
Eye Centre
Glaucoma Diagnostics and Therapeutics
Adult Glaucoma Treatment Y Y Y Y
Child Glaucoma Treatment Y Y Y
Humphrey Visual Field Test Y Y Y Y
Optical Coherent Tomography Y Y Y Y
Glaucoma Surgery and Lasers* Y Y Y Y
Medical Retinal Diseases
Fluorescein Angiography Y Y Y Y
Optical Coherent Tomography Y Y Y Y
Anti-VEGF Therapy Y Y Y Y
Photodynamic Therapy Y Y Y Y
Oculoplastics, Facial Cosmetics and
Aesthetics Surgery
Lids
Ptosis Correction in Adults & Children* Y Y Y Y
Correction of Lid Abnormalities* Y Y Y Y
Lid Lacerations* Y Y Y Y
Brow Lift* Y Y Y Y
Removal of Lid Tumours and
Reconstruction*
Y Y Y Y
Orbit
Management of Orbital Floor Fracture* Y Y Y
Removal of Tumours and Reconstruction* Y Y Y
Evisceration, Enucleation and
Reconstruction with Orbital Implant*
Y Y Y Y
Exenteration for Extensive Tumours* Y Y Y Y
Management of Tear Duct Obstruction Y Y Y
Management of Canalicular Laceration Y Y Y
Thyroid Eye Disease (Medical & Surgical) Y Y Y Y
Removal of Lesions on Face and Lid Y Y Y Y
Blepharoplasty Y Y Y
Skin Crease Formation (Double Eye Lid) Y Y Y Y
Aesthetic Facial Fillers and Botox Y Y Y
Uveitis Y Y Y Y
Ocular Immunology Y Y
Optometry and Orthoptics Y Y Y Y
Note: Major surgeries are indicated with an asterix(*)
GENERAL INFORMATION ON OUR GROUP
102
TECHNOLOGY
Our centres use state-of-the-art technology in the medical eye care services industry, including:
Equipment/Technology Description/Advantages
Alcon Wavelight Refractive Suite –
FS200 Femtosecond Laser and
EX500 Excer Laser Machine
An advanced bladeless LASIK platform
Avedro Collagen Cross Linking
Machine
New technique to treat keratoconus and keratectasia
Centurion® and Infiniti®
Phacoemulsification cataract
technology
An advanced cataract surgery platform for high
precision cataract surgery
Colvard® Puillometry For measurement of papillary size under photopic and
scoptic conditions utilised for assessment for LASIK
and intraocular phakic lens implant
Constellation® Vitrectomy System
and Small Gauge Vitrectomy Surgery
High speed/small incision and sutureless technology
for vitrectomy and retinal surgery
Digital Anterior and Posterior
Segment Photography and
Angiography
Latest high definition digital imaging for the eye
Humphrey® Automated Perimetry Automated visual filed analyser utilised for glaucoma
screening, diagnosis and monitoring
iCARE® tonometer and Reichert
TONO-PEN® XL Applanation
Tonometer
Handheld technology for intraocular pressure
measurement suitable for children and patients with
corneal diseases
Intralase IFS Femto Laser An advanced bladeless LASIK platform
Konan® Cornea Specular Microscopy
and Nidek
Technology for corneal endothelial cell analysis
utilised in corneal transplant
Laser Inferometry A-scan (IOL
Master®)
Latest technology in intraocular lens power calculation
from Zeiss for higher refraction outcome following
cataract surgery
Optical Coherence Tomography
(OCT)
A high precision retinal laser scanning device which is
able to reproduce 2D and 3D digital images of the
retina
Orbscan® and Zywave® Abberometry Advanced scanning laser corneal topography with
wavefront/aberration analysis used in LASIK and
corneal transplant assessment
Pattern-Scanning (PASCAL®) Retinal
Laser
A high speed laser device used in the treatment of
retinal diseases, which reduces treatment time by 80%
Technolas Zyoptix® Excimer Laser Advanced excimer laser platform for LASIK and
PresbyLASIK (LASIK correction for presbyopia)
USS Cornea Pachymetry An ultrasound based instrument for measurement of
corneal thickness
GENERAL INFORMATION ON OUR GROUP
103
Equipment/Technology Description/Advantages
Victus® Femtosecond Laser and
LenSx Femtosecond Laser
A state-of-the-art femtosecond laser platform for
bladeless LASIK and bladeless cataract surgery
Zeiss® Cataract Suite – Lumera700
with Calisto and IOL Master 500
An integrated diagnostic and biometry system for
cataract surgery
Zeiss® Operating Microscopes State-of-the-art operating microscopes by Zeiss®
SERVICE QUALITY CONTROL
Our Group’s mission statement is “Restoring Vision.Enriching Lives” which we aim to uphold
through exemplifying our core values and strengths of Integrity, Skill, Excellence and
Compassion. Our team consists of experienced and dedicated specialist doctors as well as highly
skilled clinical, surgical and administration professionals. Our team of professionals maintains
integrity and passion for what they do, providing patients with not only excellent medical services
but treating them with care and compassion.
In providing our patients with quality personalised care, our clinical decisions are made based on
patients’ interests and contemporary evidence-based medicine. The clinical judgment of our team
of subspecialty-trained and comprehensive ophthalmologists are influenced by well established
clinical guidelines and extensive experience in their specialties.
Our specialist doctors make a continuous effort to update themselves on the latest medical
developments and equipment and seek opportunities to capitalise on scientific and technological
advancements, in order to benefit our patients with enhanced treatments and standard of care.
In February 2009, ISEC KL obtained JCI accreditation, being the first eye care centre to obtain the
international accreditation in the South-East Asia and Far East Region. JCI surveys hospitals
outside of the United States, with the purpose of continuously improving the safety and quality of
care provided to the public through the provision of healthcare accreditation and related services
that support performance improvement in healthcare organisations. JCI accreditation is based on
self-assessment and external peer assessment to accurately evaluate an organisation’s level of
performance in relation to established standards and to implement ways to continuously improve,
with a strong focus on quality of patient services, competency and credentials of staff, facilities,
safety and ethics.
Under the Continuing Medical Education Programme administered by the SMC, medical
practitioners in Singapore are required to continually upgrade their knowledge and skills in order
to maintain their competency to practise. Similarly, our employees in Singapore and Malaysia are
also encouraged to attend workshops and seminars to keep abreast of developments in the
medical sector and acquire new skills to improve their job competency.
Our managers undergo training to lead their respective teams, use quality improvement tools,
perform analysis of their team’s work performance and to effectively communicate with their team.
We also provide training for our customer service staff on soft skills such as managing difficult
situations and equipping them with effective communication skills.
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104
We also conduct in-house basic life support certification courses for our specialist doctors,
paramedical and nursing staff. Periodic customer care training is conducted in-house for all front
line and new staff and we have regular continuing professional development lectures for all
specialist doctors and employees. All our specialist doctors and employees are required to
operate in accordance with our in-house workplace safety and health guidelines.
Medical Board
Our Medical Board comprises representatives from each of our subsidiaries, namely:
• Dr Fang Seng Kheong (Chairman)
• Dr Barkeh Hanim Binti Jumaat (Secretary)
• Dr Alan Ang
• Dr Cordelia Chan
• Dr Choong Yee Fong
• Dr Kok Howe Sen
• Dr Michael Law Siew Haur
• Dr Lim Kian Seng
• Dr Lee Hung Ming (ex officio)
• Dr Wong Jun Shyan (ex officio)
The Chairman of our Medical Board is Dr Fang Seng Kheong and the Secretary is Dr Barkeh
Hanim Binti Jumaat. Our Executive Vice Chairman, Dr Lee Hung Ming, and Chief Executive
Officer, Dr Wong Jun Shyan, serve as ex officio members of the Medical Board.
The terms of reference of our Medical Board include:
• Implementing and governing of the compliance code of ethics of specialist doctors within our
Group;
• Overseeing matters pertaining to patients’ interests, including clinical related complaints;
• Governing internal disciplinary matters;
• Managing the research and training issues for the medical staff; and
• Monitoring medical outcome and audit programmes.
GENERAL INFORMATION ON OUR GROUP
105
Research and Development
We conduct clinical trials from time to time. We are currently conducting collaborative clinical trials
with international pharmaceutical companies on glaucoma intervention and age related macular
degeneration therapeutic outcomes. Some of the research and development projects we have
successfully completed through collaboration with international pharmaceutical companies
include:
(a) US Food and Drug Administration surgical trial on a glaucoma drainage device;
(b) drug clinical trial on eye drops for treating patients with open-angle glaucoma or ocular
hypertension; and
(c) contact lens trial.
In respect of the clinical trials we participate in, our costs and expenses relating to the trials are
reimbursed by our collaborative partners.
MAJOR CUSTOMERS
Our customer base comprises individual patients and our business and profitability are not
materially dependent on any single individual patient. There are no individual patients who each
accounted for 5% or more of our Group’s total historical combined revenue in the Period Under
Review.
To the best of our Directors’ knowledge and belief, there are no arrangements or understanding
with any customers pursuant to which any of our Directors and Executive Officers were appointed.
MAJOR SUPPLIERS
The following are the suppliers that supplied 5% or more of our purchases in the Period Under
Review:
Percentage of total purchases (%)
Supplier Product supplied FY2011 FY2012 FY2013 1Q2014
Alcon
Laboratories (M)
Sdn. Bhd.(1)
Drugs, consumables
and lenses
42.9 44.2 12.2 –
Zuellig Pharma
Sdn. Bhd.(2)
Drugs, consumables
and lenses
24.9 19.6 22.3 23.4
DKSH Malaysia
Sdn. Bhd.(3)
Drugs, consumables
and lenses
11.9 16.4 30.7 41.1
Summit Pte. Ltd. Drugs and
consumables
7.0 7.9 8.1 10.1
Swissmed Company
(M) Sdn. Bhd.(4)
Lenses – – 11.5 8.6
GENERAL INFORMATION ON OUR GROUP
106
Notes:
(1) Our Group’s decrease in purchases from 44.2% in FY2012 to 12.2% in FY2013 and nil in 1Q2014, as a percentage
of total purchases, was due to Alcon Laboratories (M) Sdn. Bhd. appointing DKSH Malaysia Sdn. Bhd. as its
warehouse and logistics provider for lenses with effect from June 2013. Our Group also began purchasing
specialised multifocal intraocular lenses and toric lenses from Swissmed Company (M) Sdn. Bhd. in FY2013.
(2) Our Group reduced our purchases from Zuellig Pharma Sdn. Bhd. from 24.9% in FY2011 to 19.6% in FY2012, as
a percentage of total purchases, due to competitive prices offered by other distributors.
(3) Our Group’s increase in purchases from 16.4% in FY2012 to 30.7% in FY2013 and 41.1% in 1Q2014, as a
percentage of total purchases, was due to Alcon Laboratories (M) Sdn. Bhd. appointing DKSH Malaysia Sdn. Bhd.
as its warehouse and logistics provider for lenses with effect from 1 June 2013.
(4) Our Group began purchasing specialised multifocal intraocular lenses and toric lenses from Swissmed Company (M)
Sdn. Bhd. in FY2013.
Certain of our equipment were made available by equipment manufacturers (e.g. the Alcon group)
to the Group without any upfront payment required but with committed purchase obligations by the
Group of the manufacturer’s products such as lenses and consumables over an agreed period. As
at the Latest Practicable Date, we have been able to meet and exceed such committed purchase
obligations for all our equipment arrangements with suppliers.
Save as disclosed above, our business and profitability are not materially dependent on any single
supplier.
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 current relationship with any of our major
suppliers.
None of our Directors, Executive Officers or their respective associates has any interest, direct or
indirect, in any of the above major suppliers.
MATERIAL PROPERTIES AND FIXED ASSETS
As at the Latest Practicable Date, our Group leased or licensed the following material properties:
Leased/
Licensed
By Location Tenure
Approximate
Gross Area
(sq ft)
Monthly
Rental
Lessor/
Licensor Usage
Malaysia
ISEC KL Level 7 & 8,
Centrepoint
South, Mid
Valley City,
Lingkaran Syed
Putra, 59200
Kuala Lumpur,
Malaysia
3 years from
1 April 2013
to 31 March
2016
23,165 RM97,293 MVC
Centrepoint
South Sdn.
Bhd.
Eye care centre
and
administrative
office
GENERAL INFORMATION ON OUR GROUP
107
Leased/
Licensed
By Location Tenure
Approximate
Gross Area
(sq ft)
Monthly
Rental
Lessor/
Licensor Usage
ISEC KL No. 47-9,
Ground Floor,
The Boulevard,
Mid Valley City,
Lingkaran Syed
Putra, 59200
Kuala Lumpur,
Malaysia
3 years from
1 July 2014
to 30 June
2017
2,024 RM7,488.80 Insas Plaza
Sdn. Bhd.
Administrative
office
ISEC
Penang
229-G Jalan
Burma, 10050
Penang,
Malaysia
10 years
from 15
November
2012 to
14 August
2022
10,444 RM15,000 to
RM27,830(1)
Famoh
Sdn. Bhd.
Eye care centre
and
administrative
office
Singapore
ISEC 101 Thomson
Road, #09-04
United Square,
Singapore
307591
3 years from
1 September
2014 to
31 August
2017
1,087 S$7,826.40 UOL
Property
Investments
Pte. Ltd.
Administrative
office
ISEC
Singapore
Mount Elizabeth
Novena
Specialist
Centre, 38
Irrawaddy Road,
Units #08-58 to
59, Singapore
329563
3 years from
15 July 2014
to 14 July
2017(2)
1,055 S$8,440 Trenic
Healthcare
Pte. Ltd.
Eye care centre
ISEC
Singapore
Mount Elizabeth
Novena
Specialist
Centre, 38
Irrawaddy Road,
Units #08-60 to
63, Singapore
329563
3 years from
1 August
2014 to
31 July
2017(2)
2,174 S$17,392 Clinic C.P.
Lim Pte Ltd
Eye care centre
Notes:
(1) RM15,000 (12 months commencing in November 2012); RM21,000 (12 months commencing in November 2013);
RM23,000 (12 months commencing in November 2014); RM25,000 (12 months commencing in November 2015);
RM25,300 (24 months commencing from November 2016); RM27,500 (12 months commencing from November
2018); and RM27,830 (36 months commencing in August 2019).
(2) Renewable for a period of three (3) years at the prevailing market rent but no more than 30% of the rent agreed in
respect of the initial term.
As at the Latest Practicable Date, we had material medical equipment (including diagnostic
equipment for optical coherence tomography and angiography, intraocular lens equipment for
treatment of cataract, surgical microscopes for ophthalmology surgery, lasers for LASIK surgery,
photocoagulation lasers for treatment of retinal diseases, equipment sterilisers and anaesthesia
GENERAL INFORMATION ON OUR GROUP
108
workstation systems) with net book value of approximately S$1.6 million. None of our medical
equipment is encumbered. Save as disclosed in “Appendix I – Summary of Relevant Malaysia and
Singapore Laws and Regulations” to this Offer Document, there are no regulatory requirements
that may materially affect our Group’s utilisation of a tangible fixed asset.
SALES AND MARKETING
In order to disseminate information readily on our specialist doctors’ expertise and the wide range
of services available at our centres, we adopt various marketing strategies, including the
following:
(a) Our specialist doctors regularly participate in exhibitions and conventions locally and
overseas, where we offer free eye screenings, including for events such as World Glaucoma
Week and Retinal Diseases Awareness Week.
(b) Our specialist doctors and optometrists organise and present at public education
programmes and private corporate talks, seminars and eye screenings, in order to increase
awareness and to provide existing and potential patients with more information on various
specialist eye care issues as well as services we provide.
(c) Many of our specialist doctors also contribute articles to medical journals and magazines,
which highlights the profile of our specialist doctors and our Group among other medical
professionals and the public.
(d) We work with overseas medical tourist facilitators who assist patients that travel to Malaysia
and Singapore for medi-tourism from Indonesia, Vietnam, Bangladesh, Cambodia and the
African region.
(e) We use advertorials and write-ups, print media advertising, as well as social media and our
Group’s website to showcase our range of specialist eye care services.
(f) Through the use of social media websites, our Group targets potential patients who favour
private healthcare, in particular, we emphasise that our specialist doctors provide high
quality, comfortable, efficient, and attentive medical services.
Our marketing activities are regulated by applicable guidelines issued by MOH Malaysia and MOH
Singapore and other relevant laws and regulations in Malaysia and Singapore. Please refer to
“Appendix I − Summary of Relevant Malaysia and Singapore Laws and Regulations” to this Offer
Document for more information on these guidelines.
INVENTORY MANAGEMENT
Our inventory comprises surgical supplies (including medical and anaesthetic supplies, sutures,
artificial teardrops, glaucoma medications and lenses), surgical consumables (including injection
and solution) and related products.
In order to respond to the needs of our patients and at the same time manage our cashflow
effectively, we aim to stock a reasonable level of inventory of our products. We typically procure
our inventory based on historical movements of and anticipated demand for surgeries and
treatments. We maintain an inventory management system, which enables us to monitor and
manage our inventory turnover for these products in a real-time manner.
GENERAL INFORMATION ON OUR GROUP
109
As at the Latest Practicable Date, our Directors are not aware of any information or reasons that
our Group may have to make material provision or write-down our inventory.
CREDIT POLICY
Generally, our patients pay by way of cash or credit card at the time of consultation and/or surgery.
For patients where part or all of their medical fees are covered by insurance or Medisave, they
would not be required to pay us at the time of consultation and/or surgery as we will seek payment
directly from the relevant insurance companies or Medisave, as the case may be, instead. In
accordance with the PHS Service Agreement, receivables from PHS are generally settled within
30 to 60 days of our date of invoice. Fees receivable from insurance companies in relation to fees
payable by patients covered by insurance are generally settled within 60 days of our date of
invoice.
Our average receivables’ turnover days were as follows:
FY2011 FY2012 FY2013 1Q2014
Average receivables turnover days 37.6 20.7 25.4 26.7
Generally, our suppliers grant us credit terms ranging from 30 to 60 days from delivery of products.
The payment terms granted by our suppliers vary and are dependent on, amongst others, the size
of the transaction and our relationship with the supplier.
Our average trade payable turnover days were as follows:
FY2011 FY2012 FY2013 1Q2014
Average payable turnover days 27.8 28.0 20.6 26.4
ENVIRONMENT, HEALTH AND SAFETY
Our business operations are subject to regulatory requirements and potential liabilities arising
under applicable environmental, health or safety-related laws and regulations in each of the
countries in which we operate.
We believe that we are in compliance in all material respects with applicable environmental
regulations in Malaysia and Singapore. As at the Latest Practicable Date, no material
environmental, health or safety-related incident involving us or any of our subsidiaries has
occurred.
ORDER BOOK
Due to the nature of our business, the concept of an order book is not meaningful to us. Although
our centres maintain a register for advance patient appointments, these appointments are not
legally binding and may be cancelled or postponed easily, and therefore do not constitute our
orders on hand.
INTELLECTUAL PROPERTY RIGHTS
Currently, our business and profitability are not materially dependent on any intellectual property
such as patents, patent rights, licences and processes or other intangible assets. We have not
paid or received royalties for any licence or use of an intellectual property.
GENERAL INFORMATION ON OUR GROUP
110
As at the Latest Practicable Date, the following trademarks have been registered by and/or
applied for by our Group:
Trademark
Application/
Registration
Number
Place of
Registration
Registered
Owner Class
Application/
Registration
Date Expiry Date
Image mark: 07002018 Malaysia ISEC KL 44(1) 9 April 2011 5 February
2017
Image mark: T1015428E Singapore ISEC KL 44(2) 18 November
2010
18 November
2020
Word slogan:
“RESTORING VISION.
ENRICHING LIVES”
07004112 Malaysia ISEC KL 44(1) 9 March
2007
9 March
2017
Website domain:
“http://www.isec.my”
DA018802 Malaysia ISEC KL Not
applicable
21 July 2009 21 July 2015
Website domain:
“http://www.isec
malaysia.com”
Not
applicable
Malaysia ISEC KL Not
applicable
18 January
2007
18 January
2015
Website domain:
“http://isecpenang.my”
D6A105660 Malaysia ISEC
Penang
Not
applicable
17 October
2012
17 October
2015
Website domains:
“http://www.isec.sg”
“http://www.isec
healthcare.sg”
“http://www.isec
healthcare.com.sg”
Not
applicable
Malaysia ISEC
Singapore
Not
applicable
16 April 2014 16 April 2015
Website domain:
“http://www.isec
healthcare.com”
Not
applicable
Malaysia ISEC KL Not
applicable
23 July 2014 23 July 2015
Notes:
(1) Class 44, Malaysia: Medical care, treatment and surgery relating to the eyes; testing and examination of eyesight;
vision testing; treatment of dyslexia and services relating to it; organisation of medical care, treatment, tests and
surgery relating to the eyes, carried out in hospitals and clinics; optometry and related services; information;
consultancy and advisory services relating to the aforesaid services; all included in Class 44.
(2) Class 44, Singapore: Medical care, treatment and surgery relating to the eyes; testing and examination of eyesight;
vision testing; treatment of dyslexia; provision of medical care, medical treatment, tests and surgery relating to the
eyes, carried out in hospitals and clinics; optometry services; information, consultancy and advisory services
relating to the aforesaid services.
MATERIAL LICENCES, PERMITS, REGISTRATIONS AND APPROVALS
Our specialist doctors, nurses, optometrists and opticians are registered under the respective
governing regulations, and are responsible for maintaining their respective practising certificates
and/or licences.
GENERAL INFORMATION ON OUR GROUP
111
As at the Latest Practicable Date, our Group has the following material licences, permits,
registrations and approvals:
Licence Name/Authority/Number Licence Holder Effective Date Expiry Date
Licence to operate or provide private healthcare
services as an International Specialist Eye
Centre in Level 7 & 8 Centrepoint South, The
Boulevard, Mid Valley City, Lingkaran Syed
Putra, 559200 Kuala Lumpur, Malaysia
Ministry of Health, Malaysia (Kementerian
Kesihatan Malaysia)
No. 931401-000006-03/2013
ISEC KL 14 December
2013
13 December
2015
Certificate to occupy building for ISEC KL Mid
Valley property
No. 31217
Mid Valley City
Development
Sdn. Bhd.
12 July 2013 NA
Approval to Dr Fang Seng Kheong for the drug
clinical trial on eye drops for treating patients
with open-angle glaucoma or ocular
hypertension
No. (9) KKM/NIHSEC/08/0804/P11-349
NA 23 April 2012 NA
Approval to Dr Wong Jun Shyan for the drug
clinical trial on age related macular
degeneration therapeutic outcomes
No. (11) KKM/NIHSEC/P14-195
NA 21 May 2014 NA
Licence to operate or provide private healthcare
services as an International Specialist Eye
Centre (Penang) at 229-G, Jalan Burmah,
10050 Georgetown, Pulau Pinang, Malaysia
Ministry of Health, Malaysia (Kementerian
Kesihatan Malaysia)
No. 930704-00094-03/2014
ISEC Penang 23 January
2014
22 January
2016
Certificate of completion and compliance for
ISEC Penang property
No. 3912
Famoh Sdn.
Bhd.
11 November
2013
NA
Licence under the Private Hospitals and
Medical Clinics Act (Chapter 248) to operate a
Medical Clinic at Mount Elizabeth Novena
Specialist Centre, 38 Irrawaddy Road, Units
#08-58 to #08-63, Singapore 329563, known as
International Specialist Eye Centre
Ministry of Health, Singapore
No. 14MO244/01/142
ISEC Singapore 18 August 2014 17 August 2016
GENERAL INFORMATION ON OUR GROUP
112
As at the Latest Practicable Date, we have all the necessary licences and permits for our business
operations.
INSURANCE
As at the Latest Practicable Date, we maintain the following material insurance policies to cover,
amongst others, our risks relating to business operations, human resource and fixed assets:
(a) Fire insurance;
(b) All risks insurance to cover the loss or damage to our medical and surgical equipment;
(c) Burglary insurance for our premises and medical materials;
(d) Money insurance to cover any loss of money in transit or money kept at our premises;
(e) Public liability insurance to cover any accidents relating to our employees; and
(f) Medical malpractice indemnity insurance for our Group.
All our specialist doctors at ISEC KL and ISEC Penang are members of medical defence and
protection societies, which provide medical indemnity and advice to healthcare professionals. All
our specialist doctors in Singapore maintain professional indemnity insurances.
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.
COMPETITION
We compete with other eye care service providers although some of these providers may only
offer a limited range of eye care services. We believe that the following healthcare service
providers are our main competitors:
Malaysia
• Tun Hussein Onn National Eye Centre
• KPJ Healthcare Berhad, Centre for Sight
• Sunway Medical Eye Centre
• Optimax Eye Specialist Centre
• Vista Eye Centre
Singapore
• Singapore National Eye Centre
• The Eye Institute, Tan Tock Seng Hospital
GENERAL INFORMATION ON OUR GROUP
113
• Department of Ophthalmology, National University Hospital
• Eagle Eye Centre
• Ophthalmic Consultants Pte. Ltd.
• Shinagawa Lasik and Cataract Centre
• Eye & Retina Surgeons
• The Lasik Surgery Clinic
None of our Directors, Executive Officers or their associates has any interest, direct or indirect,
in any of our competitors listed above.
COMPETITIVE STRENGTHS
We believe that we are able to compete effectively with the following competitive strengths:
• We are a team of highly qualified and experienced specialist doctors
All our specialist doctors have postgraduate medical degrees and have completed their
respective specialty, as well as subspecialty training and are internationally recognised
medical professionals in their fields of specialty. Our team of 19 full-time specialist doctors
have proven track records in the ophthalmology industry and they hold impressive
credentials. A number of our specialist doctors are regarded as key opinion leaders in their
respective specialty and subspecialty fields. Dr Lee Hung Ming, our Executive Vice
Chairman, and Dr Wong Jun Shyan, our Chief Executive Officer, have over 25 and 23 years
of clinical experience, respectively. Both Dr Lee Hung Ming and Dr Wong Jun Shyan have
strong clinical and management experience and have been instrumental to our success thus
far. Dr Wong Jun Shyan, as our Chief Executive Officer, is in charge of the day-to-day
management of our Group’s business operations and Dr Lee Hung Ming, as our Executive
Vice Chairman, is tasked to spearhead the overseas expansion of our Group’s business.
Dr Lee Hung Ming is recognised as a key opinion leader in the fields of ophthalmology and
specialist medical eye care, specifically in respect of cataract surgery, LASIK surgery and
treatment of cornea and external eye diseases. He was Head of Refractive Surgery in Tan
Tock Seng Hospital and Clinical Director of Vision Correction Centre at National University
Hospital in Singapore, before collaborating with Gleneagles Hospital to spearhead LHM Eye
Centre (formerly known as Parkway Eye Centre). Dr Lee Hung Ming is noted for having
consistently performed innovative surgeries and successfully adopted the latest
technologies as they were introduced in the respective regions, such as the new bladeless
corneal transplant using femtosecond laser in Asia in 2007, the new Wave-front guided
LASIK surgery using active iris-tracking technology by Bausch & Lomb in the world in 2007,
the new IntraCor laser treatment for presbyopia (old-sightedness) in South-East Asia in 2010
and the new bladeless cataract surgery using femtosecond laser in Singapore in 2012.
Dr Wong Jun Shyan has experience from various world renowned medical institutions
including the Royal Victorian Eye and Ear Hospital, University of Melbourne, the Beetham
Eye Institute of Joslin Diabetes Centre, Boston and the Department of Ophthalmology at
Harvard Medical School. Dr Wong Jun Shyan started the Vitreoretinal Diseases of the
Department of Ophthalmology at Universiti Kebangsaan Malaysia and is a regular contributor
GENERAL INFORMATION ON OUR GROUP
114
to medical publications, and is considered a key opinion leader in the subspecialty field of
vitreoretinal diseases. He is regularly invited to speak at international conferences on
vitreoretinal diseases, as well as to participate in panel discussions in related scientific
symposiums. Dr Wong Jun Shyan is involved with the Asia Pacific advisory boards for key
corporations in the eye care industry, such as Bayer Healthcare, Alcon Laboratories, Novartis
Ophthalmic and Allergan Inc. and contributes his valuable insights in the development of eye
care equipments and technology.
We have established our industry reputation as evidenced by the various awards received by
certain of our specialist doctors and their appointments as medical examiners for fellowship
examinations for ophthalmology. Please refer to the section entitled “Directors, Executive
Officers and Employees” of this Offer Document for more information.
Some of our specialist doctors are active members in the medical industry in Malaysia and
Singapore and have held or hold positions in well-recognised organisations such as the
College of Ophthalmologist of Singapore, the Singapore Society of Ophthalmologists, the
Malaysia Society of Ophthalmology, Asia Pacific Contact Lens Association of
Ophthalmologists and College of Surgeons Malaysia. As further evidence of their established
industry reputation, they are also regularly invited to speak at regional conferences and
symposiums such as Asia Pacific Association of Ophthalmology, Asia Pacific Society of
Cataract and Refractive Surgery, American Academy of Ophthalmology, American Society of
Cataract and Refractive Surgeons, and European Society of Cataract and Refractive
Surgery.
All of our specialist doctors have over 15 years of clinical experience and certain of these
doctors are considered key opinion leaders in their fields of subspecialty, which include
vitreoretinal diseases, adult strabismus and paediatric ophthalmology, corneal topography,
Wave-front sciences, femtosecond laser, intraocular lens and cataract surgery, cornea,
external eye diseases, cataract and refractive surgery. Certain of our specialist doctors have
consulted with major eye care multinational companies including, inter alia, Alcon Group,
Bausch & Lomb, Zeiss, as well as regularly contribute to publications in peer review journals
and publish articles and papers in ophthalmology.
• We provide high quality and comprehensive range of eye care services
Our Centres of Excellence adhere to stringent clinical standards imposed by various
healthcare regulatory authorities in Malaysia and Singapore in respect of clinical
governance. We are the first eye ambulatory surgical centre to possess the prestigious JCI
accreditation in South-East Asia and Far East Region in 2009. This goes beyond the
regulatory requirements and we strive towards providing our patients with the best medical
care possible. The JCI accreditation is an assessment of the global standards for quality care
and patient safety in the healthcare industry. Our Group’s policy is for us to continue to
adhere strictly to the highest healthcare standards, in order to maintain our reputation, as a
high quality eye care service provider.
Our centres offer one-stop specialist medical eye care services, ranging from sophisticated
LASIK surgery to complex vitreoretinal, orbital reconstruction and corneal transplantation
surgeries. We treat various eye diseases, including glaucoma, cataract, vitreous and retinal
diseases. We also offer oculoplastic and facial aesthetic services, which include lid and orbit
correction surgery, removal of tumours, as well as aesthetic reconstruction and implant
surgeries. The comprehensive range of services also enables cross-referrals of patients to
GENERAL INFORMATION ON OUR GROUP
115
our various subspecialties. We are a tertiary centre treating patients with complicated
medical eye diseases who have been referred from doctors across the South-East Asia
region.
As such, we believe we are a preferred choice for patients seeking medical eye care
services.
• We are well positioned to capture the growing demand for private eye care services
arising from an ageing population, rising income levels, increasing private insurance
coverage and the growing medical tourism sector in South-East Asia
Numerous eye disorders are age-related, and the ageing population and rising income levels
in the South-East Asia region have created rising demand for high quality private eye care
services. For more information, please refer to the “Singapore and Malaysia Ophthalmology
Market Overview” set out in Appendix L to this Offer Document. Our Centres of Excellence
which offer comprehensive range of eye care services are strategically located in Kuala
Lumpur, Penang and Singapore to cater for patients seeking high quality private eye care
services from the South-East Asia region.
We believe private healthcare insurance coverage is expected to grow and certain of our
centres are on the panel of healthcare providers for major insurance companies including,
amongst others, American International Assurance Co Ltd, Prudential Financial, Inc. and The
Great Eastern Life Assurance Company Limited. Patients who are under private insurance
coverage usually select healthcare providers on the panel of the relevant insurers. We
believe our patients who are covered by private healthcare insurance will grow with
increased private healthcare insurance coverage. We are poised to service such part of
growth in our patient base.
In addition, our existing pool of internationally recognised and highly specialised medical
professionals are experienced in rendering treatment to foreign patients who may come from
a different culture. We believe that our specialist doctors are poised to meet such growing
demand from foreign patients.
• We operate on an asset-light, strong cash flow business model
Our business is asset-light as we lease our operating premises and some of our medical
equipment. Our facilities and equipment are shared amongst our team of specialist doctors.
This allows us to make efficient use of the facilities and equipment and keep our capital
expenditure low.
Our business model allows us to generate recurring cash flows enabling us to fund our future
expansion plans and/or for dividend payments.
• We are able to leverage on the scale of our business and replicate our business model,
which features state-of-the-art technology, across other markets in the Asia Pacific
region
We have successfully established Centres of Excellence in Kuala Lumpur, Penang and
Singapore where we provide a comprehensive suite of services in each of these centres. The
scale of our business have allowed us to establish strong relationships with our major
suppliers and enjoy significant economies of scale when we negotiate for bulk purchase of
consumables, medicines and equipment not only in Malaysia and Singapore but regionally as
GENERAL INFORMATION ON OUR GROUP
116
well, as we expand. Due to our scale, we have been able to continuously invest in
state-of-the-art medical equipment to improve patient outcome and safety. The scale of our
business will also allow us to maximise our marketing and branding efforts.
In addition, we are developing our own in-house electronic medical record system that will
allow effective recording of patients’ medical records and this system can be rolled out to our
centres (excluding LHM Eye Centre) in the future.
We believe we will be able to replicate our business model across other markets in the Asia
Pacific region.
• Our business model aligns the interests of our specialist doctors with our Group and
with our Shareholders and we have been able to retain and grow our pool of specialist
doctors
We believe the expertise and experience of our specialist doctors have contributed largely to
the success of our Group. Since the inception of our business in 2007, we have been able
to attract and retain experienced and highly qualified specialist doctors.
To align their interest with our Group, most of our specialist doctors are also shareholders of
our Company. We also offer our specialist doctors the opportunity to participate in our Share
Option Scheme. In addition, we share the consultancy fees with our specialist doctors.
The ISEC brand that we have developed attracts new patients, to the benefit of our specialist
doctors. Our team of specialist doctors comprises wide-ranging areas of subspecialty, and
we are able to cross-refer patients so they may be treated by our specialist doctors with the
appropriate expertise and subspecialty training. Our specialist doctors are also able to share
innovative medical advances and knowledge.
Our specialist doctors at ISEC KL, ISEC Penang and ISEC Singapore are able to work
efficiently by utilising our Group’s infrastructure and centralised administrative framework,
and such costs of overheads and administrative fees are shared between our Group and our
specialist doctors. A centralised financial reporting function has been adopted for our Group
and our finance team will consolidate financial statements in respect of the Group’s
subsidiaries, including ISEC Eye, and undertake requisite regulatory financial reporting
functions. The high start-up costs and risks involved for a new medical practice may pose
barriers to entry for some healthcare professionals. With a reliable administrative structure
to support our specialist doctors, our specialist doctors can enjoy an assured patient flow and
dedicate themselves principally to clinical matters.
BUSINESS STRATEGIES AND FUTURE PLANS
Our business strategies and future plans for the growth and expansion of our businesses are
further described below.
• Growing the ISEC brand name as a Centre of Excellence for eye care services and
expanding into the Asia Pacific region
We intend to continue to build our ISEC brand as an established specialist medical eye care
service provider, offering a comprehensive range of eye care services with quality medical
professionals and state-of-the-art technology. With the in-depth industry knowledge and
GENERAL INFORMATION ON OUR GROUP
117
network of Dr Lee Hung Ming, our Executive Vice Chairman, and Dr Wong Jun Shyan, our
Chief Executive Officer, we intend to replicate our business model in markets in the Asia
Pacific region.
With the ageing population and the rising income levels in Malaysia and Singapore, we aim
to reach more patients in locations where we currently operate, as well as new locations. We
may expand into other states in Malaysia such as Johor and Melaka.
We also believe that there are tremendous growth opportunities in other markets in the Asia
Pacific region. The management team have identified Indonesia, Myanmar, Philippines and
Taiwan as markets with high growth potential and we intend to expand our business in these
markets depending on the opportunities which arise.
Our expansion plans may include the setting up of new subsidiaries, establishment of joint
ventures, expansion of existing centres and the acquisition of assets, businesses and
companies complementary to our existing business operations. We believe we will be able
to replicate our business model across these markets and that a wider market reach will
strengthen our brand, expand our market share and enhance our competitive edge.
• Expanding our talent pool of specialist doctors and management staff
We intend to recruit and retain highly qualified and talented management and healthcare
professionals to better provide for our patients as well as to expand the breadth and depth
of subspecialty services we provide. In addition, we plan to provide them with opportunity
and time to further their professional development and expertise in their subspecialty areas.
We intend to grow our team of specialist doctors and management staff in our current centres
as well as in such new centres we may set up.
We believe this will be achieved through a long term rewarding career with opportunities to
increase the individual subspecialties of our sizable talent pool of specialist doctors. We will
dedicate our efforts to maintaining our high service standards and strive to give our patients
the best medical care to meet their needs.
• Building our regional network
As we expand our presence throughout the Asia Pacific region, we intend to build
relationships with referral centres which will refer patients requiring more complicated
surgical procedures or medical consultation of a different subspecialty to our centres in
Singapore and Malaysia. We may also set up or acquire such referral centres. As such, we
may arrange for our patients to have follow-up consultations at our centres or at referral
centres in their home countries. For example, patients from such referral centres may prefer
to have his surgical procedure performed in one of our centres but to have the follow-up
consultations in their home country.
We hope to offer patients lower cost options depending on geographical location as well as
added comfort and convenience of receiving follow-up treatment and consultations in their
home country.
GENERAL INFORMATION ON OUR GROUP
118
• Investing in the latest technology and allowing our specialist doctors to keep up to
date with the newest procedures
We take pride in our Centres of Excellence. As such, we intend to constantly upgrade our
Group by improving our medical equipment and keeping abreast of the latest technology, as
well as keep up to date with innovative procedures and discoveries in the ophthalmology
field, to ensure that we are at the forefront of our industry.
We have earmarked S$13.8 million of our proceeds from the Placement to be used for our
business expansion in the Asia Pacific region as outlined above.
CORPORATE SOCIAL RESPONSIBILITY
We promote corporate social responsibility within our Group. Integrated directly into our business
model, corporate social responsibility plays an important role in our business strategies and
conduct of our business activities.
In Malaysia, we engage in public education, free professional development program for
optometrists and opticians, free eye screening and participate in pro bono programme for retinal
photography reading with Sau Seng Lum Foundation to identify patients with diabetic retinopathy.
ISEC KL is also an appointed teaching centre for the Faculty of Allied Health Universiti
Kebangsaan Malaysia where our specialist doctors provide pro bono teaching and training to
optometrist students. Our specialist doctors regularly contribute articles in various newspapers,
magazines and medical journals.
Dr Lee Hung Ming is involved in Khazanah IHH Healthcare Fund’s “Vision of Hope” program,
which offers free cataract surgery to elderly patients.
Our specialist doctors frequently speak at events to raise the medical awareness in the public, as
well as at professional seminars and symposiums to share valuable insight with local, regional and
international medical communities.
SEASONALITY
Due to the reliance of our businesses on our patients and the elective nature of certain surgeries
performed by our specialist doctors, our business may be subject to seasonal fluctuations. Our
business generally increases during the school holiday months. We also experience a higher
number of foreign patients during holiday periods.
GENERAL INFORMATION ON OUR GROUP
119
For purposes of this section, the following definitions will apply:
1. “our Group” means:
(a) our Company;
(b) a subsidiary of our Company that is not listed on the SGX-ST or any approved
exchange; or
(c) an associated company of our Company that is not listed on the SGX-ST or any
approved exchange and which our Group and our interested person(s) have control.
2. “approved exchange” means a stock exchange that has rules which safeguard the interests
of shareholders against interested person transactions according to similar principles in
Chapter 9 of the Catalist Rules.
3. “interested person” means:
(a) a director, chief executive officer, or controlling shareholder of our Company; or
(b) an associate of any such director, chief executive officer, or controlling shareholder.
Certain terms such as “associate”, “control”, “controlling shareholder”, and “interested person”
used in this section have the meanings as provided in the Catalist Rules and in the SFR, unless
the context specifically requires the application of the definitions in one or the other as the case
may be.
In general, transactions between our Group and any of our interested persons would constitute
interested person transactions for the purposes of Chapter 9 of the Catalist Rules.
Details of the present and ongoing transactions as well as past transactions between our Group
and Interested Persons which are material in the context of the Placement are set out below. Save
as disclosed in this section and the section entitled “Restructuring Exercise” of this Offer
Document, there are no material interested person transactions for FY2011, FY2012, FY2013 and
for the period from 1 January 2014 to the Latest Practicable Date (“Relevant Period”).
In line with the rules set out in Chapter 9 of the Catalist Rules, a transaction which value is less
than S$100,000 is not considered material in the context of the Placement and is not taken into
account for the purposes of aggregation in this section.
INTERESTED PERSON TRANSACTIONS
120
PAST INTERESTED PERSON TRANSACTIONS
(a) Consultancy fees paid to Dr Wong Jun Shyan
Our Group had paid consultancy fees to Dr Wong Jun Shyan during the Relevant Period. The
aggregate value of the consultancy fees paid to Dr Wong Jun Shyan for the Relevant Period
are as follows:
FY2011 FY2012 FY2013
1 January 2014
until the Latest
Practicable Date
(S$) (S$) (S$) (S$)
Aggregate value of consultancy
fees
1,409,654 1,374,710 1,128,828 806,201
Our Directors are of the opinion that the above transactions were undertaken on normal
commercial terms and on arm’s length basis. With effect from 16 September 2014, Dr Wong
Jun Shyan’s consultancy agreement has been terminated. Dr Wong Jun Shyan has entered
into a service agreement with the Company and a letter of employment with ISEC KL with
effect from 17 September 2014 pursuant to which he is employed by the Group and shall
serve as CEO and a specialist doctor respectively.
(b) Dr Wong Jun Shyan’s personal guarantee
In April 2007, Dr Wong Jun Shyan, together with certain of our shareholders, provided a
personal guarantee for the benefit of AmBank (M) Berhad in connection with a loan entered
into between ISEC KL and AmBank (M) Berhad. The principal amounts outstanding under the
loan during the Relevant Period were as follows:
FY2011 FY2012 FY2013
1 January 2014
until the Latest
Practicable Date
Largest amount
outstanding
during the
Relevant Period
(S$) (S$) (S$) (S$) (S$)
Total principal
amount outstanding 92,553 – – – 92,553
Our Directors are of the opinion that the above transactions were undertaken on normal
commercial terms and on arm’s length basis. The loan was fully repaid in February 2012. As
at the Latest Practicable Date, ISEC KL has made arrangements to terminate the loan and
discharge the personal guarantee. We do not intend to enter into similar transactions where
personal guarantees are required following the listing of the Company on Catalist.
INTERESTED PERSON TRANSACTIONS
121
(c) Payments made on behalf of Dr Lee Hung Ming by the LHM Companies as well as
payments by Dr Lee Hung Ming on behalf of the LHM Companies
Certain payments were made on behalf of Dr Lee Hung Ming by the LHM Companies for his
expenses and purchases. The aggregate amounts of such payments made by the LHM
Companies during the Relevant Period were as follows:
FY2011 FY2012 FY2013
1 January 2014
until the Latest
Practicable Date
(S$) (S$) (S$) (S$)
Aggregate amount of payments 978,915 1,054,903 5,626,216 1,092,862
Payments were also made by Dr Lee Hung Ming on behalf of certain LHM Companies for
their administrative and other expenses. The aggregate amounts of such payments made
during the Relevant Period were as follows:
FY2011 FY2012 FY2013
1 January 2014
until the Latest
Practicable Date
(S$) (S$) (S$) (S$)
Aggregate amount of payments 65,086 62,225 12,612 195
Separately, each of the LHM Companies had inter-company balances due from other LHM
Companies as at 31 December 2013. On 31 December 2013, the LHM Companies which had
balances due to it as at 31 December 2013 had assigned to Dr Lee Hung Ming the benefit
of these amounts owed to it which amounted to approximately S$4,338,146. Accordingly,
subsequent to such assignment, these amounts were taken to be payments made by Dr Lee
Hung Ming on behalf of the LHM Companies.
As at 27 August 2014, the resulting position of amounts due from Dr Lee Hung Ming to the
LHM Companies in connection with transactions abovementioned and applicable set-offs,
have been fully settled by way of dividends declared by the respective LHM Companies to
Dr Lee Hung Ming.
The above payments were not on normal commercial terms and not on arm’s length basis.
The LHM Companies are not subsidiaries of the Group and we have included the transaction
above for completeness of information. With effect from completion of the Restructuring
Exercise, payments made on behalf of Dr Lee Hung Ming by the LHM Companies will not be
interested person transactions as defined under the Catalist Rules.
INTERESTED PERSON TRANSACTIONS
122
(d) Directors’ fees paid to Dr Lee Hung Ming’s associate
The LHM Companies had paid directors’ fees to Lee Yen Fen, the spouse of Dr Lee Hung
Ming, in respect of her directorship of the LHM Companies. The aggregate value of the
directors’ fees paid to Lee Yen Fen during the Relevant Period are as follows:
FY2011 FY2012 FY2013
1 January 2014
until the Latest
Practicable Date
(S$) (S$) (S$) (S$)
Aggregate value of directors’
fees
390,000 390,000 390,000 –
The above transactions were not undertaken on normal commercial terms and not on arm’s
length basis. The LHM Companies are not subsidiaries of the Group and we have included
the transaction above for completeness of information. With effect from completion of the
Restructuring Exercise, directors’ fees paid by the LHM Companies will not be interested
person transactions as defined under the Catalist Rules.
PRESENT AND ON-GOING INTERESTED PERSON TRANSACTIONS
Our Group does not have any present and on-going interested person transactions.
GUIDELINES AND REVIEW PROCEDURES FOR FUTURE INTERESTED PERSON
TRANSACTIONS
Our Audit Committee will review and approve all interested person transactions to ensure that they
are on normal commercial terms and on arm’s length basis, that is, the transactions are transacted
on terms and prices not more favourable to the Interested Persons than if they were transacted
with a third party and are not prejudicial to the interests of our Group and our minority
Shareholders in any way.
To ensure that all future interested person transactions are carried out on normal commercial
terms and will not be prejudicial to the interests of our Group or our minority Shareholders, the
following procedures will be implemented by our Group:
(a) when purchasing any products or engaging any services from an Interested Person, two
other quotations from non-Interested Persons will be obtained for comparison to ensure that
the interests of our Group and 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
other quotations from non-Interested Persons. In determining the most competitive price or
fee, all pertinent factors, including but not limited to quality, requirements, specifications,
delivery time and track record will be taken into consideration;
(b) when selling any products or supplying any services to an Interested Person, the price or fee
and terms of two other successful transactions of a similar nature with non-Interested
Persons will be used as comparison to ensure that the interests of our Group or minority
Shareholders are not disadvantaged. The price or fee for the supply of products or services
shall not be lower than the lowest price or fee of the two other successful transactions with
non-Interested Persons;
INTERESTED PERSON TRANSACTIONS
123
(c) in the case of renting properties from or to an Interested Person, the Audit Committee shall
take appropriate steps to ensure that the rent is commensurate with the prevailing market
rates, including adopting measures such as making relevant inquiries with landlords of
similar properties and/or obtaining necessary reports or reviews published by property
agents (including an independent valuation report by a property valuer, where considered
appropriate). The amount payable shall be based on the most competitive market rental rate
of similar properties in terms of size, suitability for purpose and location, based on the results
of the relevant inquiries;
(d) where it is not possible to compare against the terms of other transactions with unrelated
third parties and given that the products or services may be purchased only from an
Interested Person, the interested person transaction will be approved by either our Chief
Executive Officer, if he has no interest in the transaction, or failing which, the Audit
Committee, in accordance with our usual business practices and policies. In determining the
transaction price payable to the Interested Person for such products and/or service, factors
such as, but not limited to, quantity, requirements and specifications will be taken into
account; and
(e) in addition, we shall monitor all interested person transactions entered into by us and
categorise these transactions as follows:
(i) a Category 1 interested person transaction is one where the value thereof is equal or
in excess of 3.0% of the latest audited NTA of our Group; and
(ii) a Category 2 interested person transaction is one where the value thereof is below 3.0%
of the latest audited NTA of our Group.
All Category 1 interested person transactions must be approved by our Audit Committee prior
to entry whereas Category 2 interested person transactions need not be approved by our
Audit Committee prior to entry but shall be reviewed on a quarterly basis by our Audit
Committee.
Our Audit Committee will review all interested person transactions, if any, on a quarterly
basis 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 participating in review and approval process in relation to that particular
transaction.
We shall prepare all the relevant information to assist the Audit Committee in its review and
will keep a register recording all interested person transactions. The register shall also
record the basis for entry into the transactions, including the quotations and other evidence
obtained to support such basis.
In addition, the Audit Committee and the Board will also ensure that all disclosure, approval
and other requirements on interested person transactions, including those required by
prevailing legislation, the Catalist Rules (in particular, Chapter 9) and relevant accounting
standards, are complied with. The annual internal audit plan shall incorporate a review of all
interested person transactions entered into at least on an annual basis. Such transactions
will also be subject to the approval of our Shareholders if required by the Catalist Rules. We
will also endeavour to comply with the recommendations set out in the Code of Corporate
Governance.
INTERESTED PERSON TRANSACTIONS
124
These internal audit reports will be reviewed by the Audit Committee to ascertain whether the
guidelines and procedures established to monitor interested person transactions have been
complied with. The Audit Committee shall also review from time to time such guidelines and
procedures to determine if they are adequate and/or commercially practicable in ensuring
that interested person transactions are conducted on normal commercial terms, on an arm’s
length basis and do not prejudice our interests and the interests of our minority
Shareholders. Further, if during these periodic reviews by the Audit Committee, the Audit
Committee is of the opinion that the guidelines and procedures as stated above are not
sufficient to ensure that interested person transactions will be on normal commercial terms,
on an arm’s length basis and not prejudicial to our interests and the interests of our minority
Shareholders, the Audit Committee will adopt such new guidelines and review procedures for
future interested person transactions as may be appropriate.
Disclosure will be made in our annual report of the aggregate value of interested person
transactions during the relevant financial year under review.
POTENTIAL CONFLICTS OF INTERESTS
Save as disclosed in the sections entitled “Interested Person Transactions”, “Directors, Executive
Officers and Employees – Service Agreements” and “Restructuring Exercise” of this Offer
Document, none of our Directors, Executive Officers, Controlling Shareholder or any of their
associates has an interest, direct or indirect:
(a) in any transaction to which our Group was or is to be a party;
(b) in any entity carrying on the same business or dealing in similar services which competes
materially and directly with the existing business of our Group; and
(c) in any enterprise or company that is our Group’s customer or supplier of goods and services.
Save as disclosed in the sections entitled “Interested Person Transactions” and “Directors,
Executive Officers and Employees – Service Agreements” of this Offer Document, none of our
Directors has any interest in any existing contract or arrangement which is significant in relation
to the business of our Company and its subsidiaries, taken as a whole.
Interests of Experts
No expert (i) is employed on a contingent basis by our Company or its subsidiaries; or (ii) has a
material interest, whether direct or indirect, in our Shares or 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 Placement.
Interests of the Issue Manager and Sponsor
In the reasonable opinion of our Directors, save as disclosed below and in the sections entitled
“Plan of Distribution – Management and Placement Arrangement” of this Offer Document, our
Company does not have any material relationship with PPCF:
(a) PPCF is the Issue Manager and Sponsor in relation to the Listing; and
(b) PPCF will be the continuing sponsor of our Company for a period of at least three (3) years
from the date our Company is admitted and listed on Catalist.
INTERESTED PERSON TRANSACTIONS
125
MANAGEMENT REPORTING STRUCTURE
The following chart shows our management reporting structure as at the Latest Practicable Date.
Chief Financial
Officer
Macy Thong
Kuala Lumpur
Centre Director
Dr Choong Yee Fong
Penang
Centre Director
Dr Alan Ang
Singapore
Centre Director
Dr Cordelia Chan
Chief Executive Officer
Dr Wong Jun Shyan(1)
Board of Directors
Sitoh Yih Pin
Non-Executive Chairman
Dr Lee Hung Ming(1)
Executive Vice Chairman
Dr Wong Jun Shyan
Executive Director and
Chief Executive Officer
Professor Low Teck Seng
Independent Director
Lim Wee Hann
Independent Director
Medical Board
Dr Fang Seng Kheong
Chairman
Lee Hung Ming
Eye Centre
Director
Dr Lee Hung Ming(2)
Notes:
(1) Dr Wong Jun Shyan, as our Chief Executive Officer, is in charge of the day-to-day management of our Group’s
business operations and Dr Lee Hung Ming, as our Executive Vice Chairman, is tasked to spearhead the overseas
expansion of the Group’s business.
(2) In respect of his duties and role as specialist doctor and Lee Hung Ming Eye Centre Director, Dr Lee Hung Ming will
report to the Chief Executive Officer.
DIRECTORS, EXECUTIVE OFFICERS AND EMPLOYEES
126
DIRECTORS
Our Board of Directors is entrusted with the responsibility for the overall management of our
Group. Our Directors’ particulars are listed below:
Name Age Address Designation
Mr Sitoh Yih Pin 50 101 Thomson Road
#09-04 United Square
Singapore 307591
Non-Executive Chairman
and Independent Director
Dr Lee Hung Ming 50 101 Thomson Road
#09-04 United Square
Singapore 307591
Executive Vice Chairman
and Lee Hung Ming Eye
Centre Director
Dr Wong Jun Shyan 48 101 Thomson Road
#09-04 United Square
Singapore 307591
Executive Director and
Chief Executive Officer
Professor Low Teck Seng 59 101 Thomson Road
#09-04 United Square
Singapore 307591
Independent Director
Mr Lim Wee Hann 47 101 Thomson Road
#09-04 United Square
Singapore 307591
Independent Director
Information on the business and working experience of our Directors are set out below:
Mr Sitoh Yih Pin is our Non-Executive Chairman and Independent Director and was appointed to
our Board on 29 September 2014.
Mr Sitoh is a Chartered Accountant and is currently the Chairman of Nexia TS Public Accounting
Corporation, an accounting firm in Singapore. Prior to that, he worked as an Audit Manager at
KPMG. Mr Sitoh currently serves as the Member of Parliament of Potong Pasir Constituency, the
Chairman of Potong Pasir Town Council, the Advisor to the Potong Pasir Grassroots
Organisations and the Chairman of the Government Parliamentary Committee for Defence and
Foreign Affairs. He is also currently a Management Committee Member of the Singapore Turf
Club.
Mr Sitoh graduated from the National University of Singapore with a Bachelor of Accountancy
(Honours) in 1987. He is also a fellow member of both the Institute of Chartered Accountants in
Australia and the Institute of Singapore Chartered Accountants.
Dr Lee Hung Ming is our Executive Vice Chairman, an ex-officio member of our Medical Board
and Centre Director of Lee Hung Ming Eye Centre since 2007.
Dr Lee is a Senior Consultant Ophthalmologist, currently spearheading Lee Hung Ming Eye
Centre (formerly known as Parkway Eye Centre) at Gleneagles Hospital. He is a renowned LASIK
and cataract specialist and is considered a key opinion leader in his fields of subspecialty, namely
cornea, refractive surgery, external eye disease, cataract and implant surgery. Dr Lee held the
position of Senior Consultant for Cataract, Cornea & Refractive Surgery Service at The Eye
Institute, National Group, Singapore, which he joined in 2003. Dr Lee currently also sits on the
Asia Refractive Council of Bausch & Lomb.
DIRECTORS, EXECUTIVE OFFICERS AND EMPLOYEES
127
Between 2002 and 2007, he was also Clinical Director of the LASIK Centre of the National
University Hospital.
From 2000 to 2007, Dr Lee was appointed as Head & Senior Consultant in Tan Tock Seng
Hospital, Refractive Surgery.
He completed his residency in ophthalmology at Tan Tock Seng Hospital and the Singapore
National Eye Centre, and completed a clinical fellowship in Cornea, External Eye Disease and
Refractive Surgery at the University of Toronto.
He has sat on board of various professional associations, such as the College of
Ophthalmologists, Surgeons and Singapore Society of Ophthalmologist and Bausch & Lomb’s
Asia Refractive Council. He has also been the examiner for the specialist post-graduate
examination by the National University of Singapore and the Royal College of Surgeons,
Edinburgh (UK), University Sains Malaysia and University Malaya. He was also visiting professor
at University Sains Malaysia. Dr Lee has also presented widely at regional and international
ophthalmology conferences.
Dr Lee has received various awards, including the A.C.E. Award (APSCRS Certified Educator
Award) in 2003 for excellence in training and education of eye surgeons in the Asia Pacific region
by the Asia Pacific Society of Cataract and Refractive Surgery, the International Gold Medal in
2011 by the Indian Intraocular Implant and Refractive Society for outstanding contribution in the
field of ophthalmology, as well as the University of Toronto John Gaby Research Prize. Dr Lee is
a licensed medical practitioner in Singapore, the United Kingdom and Canada. He is a member
of the Chapter of Ophthalmologist at the Academy of Medicine, Singapore.
Dr Lee graduated from the National University of Singapore with a Bachelor of Medicine and
Bachelor of Surgery in 1989 and subsequently obtained his Master of Medicine in Ophthalmology
from the Graduate School of Medical Studies, National University of Singapore, FRCS from the
Royal College of Edinburgh Scotland and FAMS (Ophth) from the Academy of Medicine,
Singapore.
Dr Wong Jun Shyan is our Executive Director and Chief Executive Officer and is an ex-officio
member of our Medical Board. Dr Wong was one of the founding members of ISEC KL and has
been a Consultant Ophthalmologist at ISEC KL since 2007. He is considered a key opinion leader
in his fields of subspecialty and Honorary Part Time Lecturer for the Department of Optometry,
Faculty of Allied Health Sciences in Universiti Kebangsaan Malaysia.
In 2001, Dr Wong started the Vitreoretinal (VR) Diseases Division of the Department of
Ophthalmology at Universiti Kebangsaan Malaysia. Dr Wong has lectured and instructed at
numerous regional and international conference presentations as well as various academic
institutions, including Harvard Medical School. Dr Wong has sat on the board of various
professional associations, amongst others, as Vice-Chairman of the Ophthalmologic Society of
Malaysian Medical Association and Chairman of the Malaysian Small Incision Surgery (MASIS)
Panel.
Dr Wong was a recipient of the American Academy of Ophthalmology Leadership Development
Programme in 2006. He has been a fellow of the Royal College of Surgeons of Edinburgh since
1996 and a member of The Retina Society of the USA since 2007.
DIRECTORS, EXECUTIVE OFFICERS AND EMPLOYEES
128
Dr Wong graduated from the National University of Singapore with a Bachelor of Medicine and
Bachelor of Surgery in 1991 and obtained his Master of Medicine (Ophthalmology) in 1996. He
completed his residency as Chief Resident in Ophthalmology at the National University Hospital
Singapore and continued as Registrar and was a Retina Fellow at the Singapore National Eye
Centre. Dr Wong then pursued clinical fellowships in VitreoRetinal (VR) Disease at The Royal
Victorian Eye and Ear Hospital, University of Melbourne, the Beetham Eye Institute of Joslin
Diabetes Centre, Boston, the Department of Ophthalmology at Harvard Medical School and the
Massachusetts Eye and Ear Infirmary, Beth Israel Deaconess Medical Centre and Brigham and
Women’s Hospital.
Professor Low Teck Seng is our Independent Director and was appointed to our Board on 29
September 2014.
Professor Low is currently Chief Executive Officer of the National Research Foundation,
Singapore. Professor Low is a tenured Professor at the National University of Singapore and
Nanyang Technological University, and sits on the board of public listed companies, including
SingPost Ltd and ExcelPoint Systems Ltd and also participates in national committees which
develop plans for education, technology and leadership in Singapore.
Prior to his appointment at the National Research Foundation, Professor Low was the Managing
Director of A*STAR from 2009 to 2012. Between 2008 and 2009, Professor Low was Group Senior
Vice President and Chief Executive Officer of Parkway Education (a subsidiary of Parkway Heath
Group). He also sat on the Board of the Health Science Authority in Singapore from 2004 to 2010.
In 2002, Professor Low led a team to start Republic Polytechnic and was Principal and Chief
Executive Officer from 2002 to 2008. Between 1983 and 2008, he was an academic staff in the
Department of Electrical Engineering of the National University of Singapore and was Dean of the
Faculty of Engineering between 1998 and 2001.
In 1992, Professor Low founded the Magnetics Technology Centre, the predecessor of the Data
Storage Institute, a national research institute focusing on technologies in magnetic and optics
relevant to data storage.
In 2007, Professor Low was awarded the Public Administration Medal (Gold) by the President of
Singapore for his outstanding contributions to the development of technical education and
management of science and technology for the nation. He was awarded the National Science and
Technology Medal, Singapore’s highest honour for science and technology, in 2004 for his
distinguished, sustained and exceptional contributions through the promotion and management of
research and development. Professor Low is a fellow of Institute of Electrical and Electronics
Engineers. In 2009, he was conferred the Honorary Doctor of Science by Southampton University
in recognition of his contributions to Singapore and his profession internationally.
Professor Low graduated with First Class Honours in Electrical & Electronic Engineering in 1978
from Southampton University and subsequently received his PhD from the same university in
1982.
DIRECTORS, EXECUTIVE OFFICERS AND EMPLOYEES
129
Mr Lim Wee Hann is our Independent Director and was appointed to our Board on 29 September
2014.
Mr Lim currently practises as an advocate and solicitor and is an Equity Partner, Co-Head of the
Mergers & Acquisitions Practice Group at Rajah & Tann Singapore LLP and Executive Committee
Member of Rajah & Tann LCT Lawyers. He is also called to the Malaysian Bar and is an Equity
Partner of Messrs Christopher & Lee Ong, the Malaysian member firm of Rajah & Tann Asia.
He has over 23 years of experience in the legal sector and specialises in cross-border
investments, private mergers and acquisitions and other corporate transactions, labour and
employment law, and also has significant biotechnology, health and pharmaceutical practice
background. Mr Lim has been a recommended lawyer in the Practical Law Company’s Which
Lawyer? (2006 to 2013) for his work in the life sciences industry and has been listed by The
International Who’s Who of Life Sciences Lawyers (2008 to 2014) as one of the world’s leading
practitioners in the field of life sciences. He currently also sits on the board of A. Menarini
Asia-Pacific Holdings Pte. Ltd., part of Menarini group, the largest Italian multinational
biopharmaceutical company.
Between January and July 2013, Mr Lim was also an Equity Partner at Messrs Kamilah & Chong,
Malaysia.
Between 2000 and 2007, Mr Lim was a Director of Drew & Napier LLC. Between 1996 and 2000,
Mr Lim was a partner of Drew & Napier, and between 1992 and 1995, he was a legal associate
at Drew & Napier. Between 1991 and 1992, he was with Colin Ng & Partners as a legal associate.
Mr Lim is a member of the Law Society of Singapore, the Singapore Academy of Law and the Bar
Council of Malaysia.
Mr Lim graduated from the National University of Singapore with a Bachelor of Law (Honours) in
1990.
Rule 406(3)(a) of the Catalist Rules states that as a pre-quotation disclosure requirement, a listing
applicant must release a statement (via SGXNET or in the offer document) identifying for each
director, whether the person has prior experience (and what) or, if the director has no prior
experience as a director of a listed company, whether the person has undertaken training in the
roles and responsibilities of a director of a listed company. With regard to Rule 406(3)(a) of the
Catalist Rules, two (2) of our Independent Directors, Sitoh Yih Pin and Professor Low Teck Seng,
have prior and current experience as directors of other public listed companies in Singapore, and
are familiar with the roles and responsibilities of a director of a public listed company in Singapore.
Our other Directors, Dr Lee Hung Ming, Dr Wong Jun Shyan and Lim Wee Hann, had attended the
relevant training at the Singapore Institute of Directors to familiarise themselves with the roles and
responsibilities of a director of a public listed company in Singapore.
DIRECTORS, EXECUTIVE OFFICERS AND EMPLOYEES
130
The list of present and past directorships of each Director over the last five (5) years up to the
Latest Practicable Date, excluding that held in our Company, is set out below:
Name Present directorships Past directorships
Mr Sitoh Yih Pin Group Companies Group Companies
Nil Nil
Other Companies Other Companies
Allied Technologies Limited
Lian Beng Group Ltd
Nexia China Pte. Ltd.
Nexia TS Advisory Pte. Ltd.
Nexia TS Pte Ltd
Nexia TS Public Accounting
Corporation
Nexia TS Risk Advisory Pte. Ltd.
Nexia TS Tax Services Pte. Ltd.
Nexia TS Technology Pte. Ltd.
NTS Asia Advisory Pte. Ltd.
NTS Asia Advisory Sdn. Bhd.
NTS Myanmar Company Limited
PAP Community Foundation
SMA Charity Fund
Talkmed Group Limited
TSA Capital Pte Ltd
TSA Recruitment Consultants
Pte Ltd
United Food Holdings Limited
Chinasing Investment Holdings
Limited
Meiban Group Pte. Ltd.
Nera Telecommunications Ltd
PNE Micron Holdings Ltd
Dr Lee Hung Ming Group Companies Group Companies
International Specialist Eye
Centre Pte. Ltd.
ISEC Eye Pte. Ltd.
Nil
Other Companies Other Companies
Edinburgh International Pte. Ltd.
Glasgow Capital Pte. Ltd.
Oxford Capital Pte. Ltd.
Toronto Capital Pte. Ltd.
Vancouver Capital Pte. Ltd.
Edinburgh Property Pte. Ltd.
DIRECTORS, EXECUTIVE OFFICERS AND EMPLOYEES
131
Name Present directorships Past directorships
Dr Wong Jun Shyan Group Companies Group Companies
International Specialist Eye
Centre Pte. Ltd.
ISEC (Penang) Sdn. Bhd.
Nil
Other Companies Other Companies
Eastwest Healthcare Sdn. Bhd.
EyeMD Associates Sdn. Bhd.
Kumpulan Pakar Mata (KL)
Sdn. Bhd.
Ophthalmic Consultants Malaysia
Sdn. Bhd.
ISEC (Ampang) Sdn. Bhd.
Professor Low Teck
Seng
Group Companies Group Companies
Nil Nil
Other Companies Other Companies
Berkeley Education Alliance for
Research in Singapore Limited
Cambridge Centre for Advanced
Research in Energy Efficiency
in Singapore Ltd.
ETH Singapore Sec Ltd.
ExcelPoint Technology Ltd.
General Storage Company
Pte. Ltd.
IEEE Asia-Pacific Limited
NRF Holdings Pte. Ltd.
Parkway Education Pte. Ltd.
Revantha Technologies Pte. Ltd.
Singapore Post Limited
Singapore-MIT Alliance for
Research and Technology
Centre
Tum Create Limited
Biomedical Sciences Institutes
Data Storage Institute
EchoMRI Corporation Pte. Ltd.
Exploit Technologies Pte Ltd
Frencken Group Limited
Innotek Limited
Institute for Infocomm Research
Institute of Chemical and
Engineering Sciences
Institute of High Performance
Computing
Institute of Materials Research
and Engineering
Institute of Microelectronics
IPI
KRDL Pte Ltd
Precico Singapore Pte Ltd
Science and Engineering
Institutes
Singapore Institute of
Manufacturing Technology
Singapore Maritime Institute
Mr Lim Wee Hann Group Companies Group Companies
Nil Nil
Other Companies Other Companies
A. Menarini Asia-Pacific Holdings
Pte. Ltd.
R&T Vietnam LLC
Nil
DIRECTORS, EXECUTIVE OFFICERS AND EMPLOYEES
132
None of our Independent Directors sits on the board of our subsidiaries.
EXECUTIVE OFFICERS
The particulars of our Executive Officers are set out below:
Name Age Address Designation
Macy Thong 41 101 Thomson Road
#09-04 United Square
Singapore 307591
Chief Financial Officer
Dr Fang Seng Kheong 52 101 Thomson Road
#09-04 United Square
Singapore 307591
Chairman of Medical Board
Dr Choong Yee Fong 44 101 Thomson Road
#09-04 United Square
Singapore 307591
Kuala Lumpur Centre
Director
Dr Alan Ang 41 101 Thomson Road
#09-04 United Square
Singapore 307591
Penang Centre Director
Dr Cordelia Chan 45 101 Thomson Road
#09-04 United Square
Singapore 307591
Singapore Centre Director
Information on the business and working experience of our Executive Officers are set out below:
Macy Thong is our CFO and joined the Group in April 2014.
Ms Thong has over 16 years’ experience in finance specialising in corporate finance and is
experienced in financial reporting, financial management and administration.
Ms Thong was with the SENA Group of Companies (“SENA Group”) from 2007 to 2012 as Senior
Manager, Management Services of Sena Diecasting Industries Sdn. Bhd. (“SDI”), an Original
Equipment Manufacturer (“OEM”) of Aluminium Die-cast parts. SENA Group is involved in the
healthcare, OEM manufacturing, design & engineering services and consultancy, information
technology/system integration and construction business. During her tenure with SDI, Ms Thong
had oversight of the operation of financial management and reporting and was involved in
strategic planning of the annual business plan and budget, review of internal controls and
managing finance, administration, human resource and information technology staff.
Between 2009 and 2011, Ms Thong was seconded to Optimax Eye Specialist Centre Sdn. Bhd. as
General Manager, and her work involved corporate finance, operations and marketing.
Between 2004 and 2007, she was Vice President, Group Corporate Finance at Megan Media
Holdings Berhad. Between 2000 and 2004, Ms Thong was with NV Multi Corporation Berhad in the
Corporate Affairs division and dealt with investor relations, corporate finance, management
accounting and budgetary control. Ms Thong started her career as an audit assistant in KPMG in
1997.
DIRECTORS, EXECUTIVE OFFICERS AND EMPLOYEES
133
Ms Thong has been a Fellow Member of the Association of Chartered Certified Accountants,
United Kingdom, since 2005 and has been a Member of the Malaysia Institute of Accountants
since 2001.
Ms Thong graduated from Tunku Abdul Rahman College (TARC) Malaysia with a Diploma in
Commerce (Financial Accounting) in 1996.
Dr Fang Seng Kheong is the Chairman of our Medical Board. Dr Fang was one of the founding
members of ISEC KL and has been a Consultant Ophthalmologist in our Group since 2007.
Dr Fang is currently the president of the Malaysian Society of Ophthalmology (MSO).
Prior to joining our Group, Dr Fang was a consultant ophthalmologist and glaucoma specialist at
The Tun Hussein Onn National Eye Hospital in Petaling Jaya, Selangor from 1999 to 2007.
Between 1995 and 1999, he was a Consultant Ophthalmologist and Chief of Glaucoma Service at
Hospital Kuala Lumpur.
In 1995, Dr Fang was a clinical fellow at the Prince of Wales Hospital, Sydney, Australia and
obtained subspecialty training in glaucoma and medical retina.
Between 1994 and 1995, Dr Fang was a clinic specialist in ophthalmology at Kuala Lumpur
Hospital. Prior to that, he was a trainee in the Masters of Surgery (Ophthalmology) programme at
Universiti Kebangsaan Malaysia, Kuala Lumpur between 1990 and 1994. Prior to that, Dr Fang
worked in the District Hospital, Tapah between 1988 and 1990. From 1987 to 1988, and in 1990,
Dr Fang worked as a medical officer at General Hospital, Ipoh.
Between 1986 and 1987, Dr Fang completed his medical housemanship at University Hospital,
Kuala Lumpur.
Dr Fang has been a life member of the Malaysian Medical Association since 1992. Dr Fang is also
member of numerous medical associations such as the College of Surgeons Malaysia, Malaysian
Society of Transplantation, American Academy of Ophthalmology, Asia-Oceanic Glaucoma
Society where he has been the regional representative since 2005 and the American Society of
Cataract and Refractive Surgeons. He is also a founding member of the Malaysian Society of
Ophthalmology. Dr Fang has been the Honorary Secretary of South East Asia Glaucoma Society
since 2002 and Honorary Secretary of Asia Pacific Glaucoma Society since 2012. He is also a
council member of Asia Pacific Academy of Ophthalmology (“APAO”) and its Regional Secretary
representing Malaysia since 2010 and is currently Chairman of the Young Ophthalmologist
Standing Committee of the APAO since 2013. He received the Distinguished Service Award from
APAO in 2007. He is also on the Editorial Board of the International Glaucoma Review of the World
Glaucoma Association, Asian Journal of Ophthalmology, Ophthalmic Surgery News APAO Edition
and EyeWorld Asia Pacific.
Dr Fang graduated with a Bachelor of Medicine and Bachelor of Surgery from University of Malaya
in 1986. In 1994, he obtained his Masters in Surgery (Ophthalmology) from National University of
Malaysia (Universiti Kebangsaan Malaysia).
Dr Choong Yee Fong is our Kuala Lumpur Centre Director. He was one of the founding members
of ISEC KL and has been a Consultant Ophthalmologist in our Group since 2007.
DIRECTORS, EXECUTIVE OFFICERS AND EMPLOYEES
134
Dr Choong is also a Visiting Consultant Ophthalmologist at Gleneagles Kuala Lumpur, Malaysia,
and is considered a key opinion leader in the subspecialty fields of adult strabismus and paediatric
ophthalmology and refractive cataract surgery.
Between 2003 and 2006, Dr Choong practiced with Hospital Selayang in Kuala Lumpur, Malaysia.
Between 2002 and 2003, he completed his Fellowship in Paediatric Ophthalmology and
Strabismus with Great Ormond Street Hospital for Children and Kings College University Hospital
in London, UK. Between 1997 and 2002, Dr Choong completed the Leeds Senior House Officer
Rotation in Ophthalmology with the United Leeds Teaching Hospitals NHS Trust and the All Wales
Specialist Registrar Rotation in Ophthalmology. Between 1995 and 1996, Dr Choong completed
his housemanship in the UK with The General Infirmary at Leeds, Dewbury District Hospital and
York District Hospital.
In 1990, Dr Choong received the British High Commissioner’s Award, a prestigious academic
scholarship for medical studies. Dr Choong continued to receive various awards and recognition
throughout his medical studies and was awarded the Welsh Office Research and Development
Grant by the Government of Wales in 2001.
Dr Choong is currently a member of the Academy of Medicine Malaysia, the Malaysia Medical
Association and a founding member of the World Society of Paediatric Ophthalmology and
Strabismus.
Dr Choong graduated with a Bachelor of Medicine and Bachelor of Surgery from University of
Leeds, UK in 1995. He has been a Fellow of the Royal College of Ophthalmologists, London, UK
since 1998.
Dr Alan Ang is our Penang Centre Director and joined our Group in October 2012.
Dr Ang specialises in cataract and vitreoretinal surgery and is considered a key opinion leader in
his fields of subspecialty.
Between 2006 and 2012, Dr Ang was a Consultant Vitreoretinal Surgeon at the Royal Hollamshire
Hospital in Sheffield, UK.
Between 2004 and 2005, Dr Ang completed his Vitreoretinal Fellowship at Addenbrooke’s Hospital
in Cambridge and Oxford Radcliffe Infirmary.
Between 2000 and 2004, he completed his specialist registrar training (East Anglican Deanery) at
West Norwich Hospital, Ipswich NHS Trust Hospital, Norfolk and Norwich University Hospital and
Addenbrooke’s Hospital in Cambridge.
Between 1996 and 2000, Dr Ang completed his housemanship at City Hospital in Belfast, Queen’s
Medical Centre in Nottingham and West Norwich Hospital in Norwich.
He is a member of the United Kingdom Ireland Society of Cataract and Refractive Surgery and the
European Society of Cataract and Refractive Surgery.
Dr Ang graduated with a Bachelor of Medicine, Bachelor of Surgery and Bachelor of Obstetrics
from Queen’s University of Belfast, UK in 1996. He has been a Fellow of the Royal College of
Ophthalmologists, London, UK since 1999 where he received his Certificate of Specialist Training
in Ophthalmology in 2004.
DIRECTORS, EXECUTIVE OFFICERS AND EMPLOYEES
135
Dr Cordelia Chan is our Singapore Centre Director and joined our Group in August 2014.
Since 2012, Dr Chan has also been a Clinical Senior Lecturer at the National University Yong Loo
Lin School of Medicine.
In 2012, Dr Chan was appointed as Head of Refractive Surgery Service, Senior Consultant of
Cornea and External Eye Disease Service and a member of the Management Committee at the
Singapore National Eye Centre, which she had joined in 1993. She also held various
administrative positions at the Singapore National Eye Centre, such as sitting on the Education
Board from 1997 to 1998 and was a member of the Residency Advisory Committee between 2011
and 2014.
Between 1991 and 1992, she practiced at Tan Tock Seng Hospital, Singapore General Hospital
and Changi Hospital Surgery.
In 1998, Dr Chan was awarded the National Eye Centre Young Researcher Award for her
contributions to research on blood flow patterns in pterygium.
She has held leadership roles in various professional societies such as Treasurer General of
WORLDEYES Surgeons Society from 1998 to 1999 and Treasurer of Asia Pacific Contact Lens
Association of Ophthalmologists from 2007 to 2011 and has been on the expert panel of the
National Transplant Registry from 2003 to 2004.
Dr Chan has been an International Member of the American Society of Cataract and Refractive
Surgery since 2005. She currently also sits on the Work Injury Compensation Medical Board as
a Medical Specialist and is a member of the Singapore Medical Council Complaints Panel. She is
currently a member of the Residency Advisory Committee for Ophthalmology in Singapore and a
Peer Reviewer for the Cochrane Eyes and Vision Group Intervention Cochrane Protocol 2012.
Dr Chan graduated from the National University of Singapore with a Bachelor of Medicine and
Bachelor of Surgery in 1991 and received her Master of Medicine from the National University of
Singapore in 1996. She has been a Fellow of the Royal College of Surgeons of Edinburgh since
1996.
The list of present and past directorships of each Executive Officer over the last five (5) years up
to the Latest Practicable Date, excluding that held in our Company, is set out below:
Name Present directorships Past directorships
Macy Thong Group Companies Group Companies
Nil Nil
Other Companies Other Companies
Nil Nil
DIRECTORS, EXECUTIVE OFFICERS AND EMPLOYEES
136
Name Present directorships Past directorships
Dr Fang Seng Kheong Group Companies Group Companies
Nil Nil
Other Companies Other Companies
Asia-Pacific Glaucoma Society
Ophthalmic Consultants Malaysia
Sdn. Bhd.
SK Fang Corporation Sdn. Bhd.
Spectacular Vision Sdn. Bhd.
Nil
Dr Choong Yee Fong Group Companies Group Companies
ISEC Sdn. Bhd.
ISEC (Penang) Sdn. Bhd.
Nil
Other Companies Other Companies
CL Vision Sdn. Bhd.
Ophthalmic Consultants Malaysia
Sdn. Bhd.
ISEC (Ampang) Sdn. Bhd.
Dr Alan Ang Group Companies Group Companies
ISEC (Penang) Sdn. Bhd. Nil
Other Companies Other Companies
Pearl Eye Specialists Sdn. Bhd. Nil
Dr Cordelia Chan Group Companies Group Companies
Nil Nil
Other Companies Other Companies
Nil Nil
Save as disclosed in the section entitled “Directors, Executive Officers and Employees” of this
Offer Document, none of our Directors or Executive Officers are related by blood or marriage to
one another nor are they so related to any Substantial Shareholders of our Company.
To the best of our knowledge and belief, there are no arrangements or understandings with any
Substantial Shareholders, customers, suppliers or others, pursuant to which any of our Directors
and Executive Officers was appointed.
DIRECTORS, EXECUTIVE OFFICERS AND EMPLOYEES
137
REMUNERATION
The compensation (which includes consultancy fees, benefits-in-kind, contributions to CPF,
directors’ fees and bonuses) paid to our Directors and our Executive Officers for services rendered
to us and our subsidiaries on an individual basis and in remuneration bands during FY2012,
FY2013 and the estimated compensation (including consultancy fees, benefits-in-kind,
contributions to CPF, directors’ fees and bonuses) expected to be paid for the current financial
year is as follows:
Names FY2012 FY2013 FY2014
(estimated)
Directors
Sitoh Yih Pin – – Band A
Dr Lee Hung Ming Band A Band A Band C
Dr Wong Jun Shyan Band F Band E Band E
Professor Low Teck Seng – – Band A
Lim Wee Hann – – Band A
Executive Officers
Macy Thong – – Band A
Dr Fang Seng Kheong Band C Band C Band C
Dr Choong Yee Fong Band D Band D Band D
Dr Alan Ang Band A Band A Band B
Dr Cordelia Chan – – Band C
Notes:
(1) Band A: Compensation of between S$0 to S$250,000 per annum.
(2) Band B: Compensation of between S$250,001 to $500,000 per annum
(3) Band C: Compensation of between S$500,000 to S$750,000 per annum.
(4) Band D: Compensation of between S$750,001 to S$1,000,000 per annum
(5) Band E: Compensation of between S$1,000,001 to S$1,250,000 per annum.
(6) Band F: Compensation from S$1,250,001 to S$1,500,000 per annum.
Save as described in the section entitled “Directors, Executive Officers and Employees – Service
Agreements” of this Offer Document, as at the date of this Offer Document, we do not have in
place any formal bonus or profit-sharing plan or any other profit-linked agreement or arrangement
with any of our employees and bonus is paid on a discretionary basis.
Save for the Share Option Scheme, no remuneration was paid or is to be paid in the form of share
options to any of our Directors, Executive Officers or employees.
As at the Latest Practicable Date, other than the amounts set aside or accrued as required for
compliance with the applicable laws, no amounts have been set aside or accrued by our Group
to provide for pension, retirement or similar benefits for any of our employees.
DIRECTORS, EXECUTIVE OFFICERS AND EMPLOYEES
138
EMPLOYEES
The breakdown of the number of employees of our Group by business function as at 31 December
2011, 31 December 2012, 31 December 2013, 31 March 2014 and as at the Latest Practicable
Date is as follows:
Function
As at
31 December
2011
As at
31 December
2012
As at
31 December
2013
As at
31 March
2014
As at the Latest
Practicable Date
Specialist
Doctors(1) – – – – 19
Management 3 3 4 4 6
Administration 5 5 5 5 6
Finance 4 4 7 6 10
Marketing 1 1 2 2 3
Nursing 49 50 57 60 68
Others 13 15 16 16 18
Total 75 78 91 93 130
Note:
(1) As at 31 December 2011, 31 December 2012, 31 December 2013 and 31 March 2014, we had no specialist doctors
on an employment basis; however, 10, 11, 13 and 13 specialist doctors, respectively, provided services on a
consultancy basis to our businesses. As at each of 31 December 2012, 31 December 2013 and 31 March 2014, we
had 2 visiting doctors.
All our specialist doctors have entered into employment letters with the Group with effect from 17
September 2014, pursuant to which the specialist doctors are employees of the Group.
The geographical distribution of our Group’s employees at 31 December 2011, 31 December
2012, 31 December 2013, 31 March 2014 and as at the Latest Practicable Date is as follows:
Geographical
As at
31 December
2011
As at
31 December
2012
As at
31 December
2013
As at
31 March
2014
As at
the Latest
Practicable Date
Malaysia 75 78 91 93 116
Singapore – – – – 14
Total 75 78 91 93 130
Note:
(1) As at 31 December 2011, 31 December 2012, 31 December 2013 and 31 March 2014, we had no specialist doctors
on an employment basis; however, 10, 11, 13 and 13 specialist doctors, respectively, provided services on a
consultancy basis to our businesses. As at each of 31 December 2012, 31 December 2013 and 31 March 2014, we
had 2 visiting doctors.
As at the Latest Practicable Date, we have 130 full-time employees.
As at the Latest Practicable Date, none of our employees are related to our Directors.
DIRECTORS, EXECUTIVE OFFICERS AND EMPLOYEES
139
Our employees are not unionised. The relationship and cooperation between the management
and staff have been good and are expected to continue to remain so in the future. There has not
been any incidence of work stoppages or labour disputes which affected our business operations.
As at the Latest Practicable Date, we do not have any employee who is hired on a temporary
basis.
SERVICE AGREEMENTS
Our Company has entered into separate service agreements (the “Service Agreements”) with our
Executive Directors, namely, Dr Lee Hung Ming and Dr Wong Jun Shyan. The Service Agreements
will take effect from the Listing Date and shall continue for a period of five (5) years (the “Initial
Term”) and thereafter continue from year to year. Dr Lee Hung Ming and Dr Wong Jun Shyan have
also entered into employment letters with ISEC Eye and ISEC KL respectively as specialist
doctors. The Service Agreements shall be effective for the Initial Term and may not be terminated
by either party by giving notice of termination during the Initial Term. After the expiry of the Initial
Term, each Service Agreement may be terminated by either party with six (6) months’ notice.
Notwithstanding the foregoing, we may also forthwith terminate the respective Service Agreement
if either of them, amongst other things, is disqualified to act as director under any applicable laws
or regulations, committed any act of dishonesty, gross misconduct or wilful neglect of duty,
committed any continued material breach of the terms of their respective Service Agreements,
committed an act which jeopardises the professional integrity or reputation of our Group, becomes
bankrupt or is convicted of any criminal offence (other than an offence which does not affect his
position in our Company). In the event of termination of the Service Agreement, the respective
employment of Dr Lee Hung Ming or Dr Wong Jun Shyan with ISEC Eye and ISEC KL (as may be
the case) shall terminate, and vice versa.
We may, at our discretion, extend the Initial Term by a further period of five (5) years by giving
notice of not less than six (6) months to the Executive Director prior to the scheduled expiry of the
Initial Term, provided always that the extension shall be on terms no less favourable than the
current terms contained in the Service Agreement.
None of these Executive Directors will be entitled to any benefits upon termination of their
respective Service Agreement. The Service Agreements cover the terms of employment,
specifically salaries and bonuses.
Pursuant to the terms of their respective Service Agreement, each of Dr Lee Hung Ming and Dr
Wong Jun Shyan is entitled to a monthly salary of S$5,000 and S$10,000, respectively, and an
annual discretionary bonus. Their salary under the employment letters in connection with the
provision of medical services for Dr Lee Hung Ming and Dr Wong Jun Shyan with ISEC Eye and
ISEC KL respectively shall be S$44,000 and RM217,000, respectively. Accordingly, the aggregate
salary for Dr Lee Hung Ming under his Service Agreement and employment letter is S$49,000. The
aggregate monthly salary for Dr Wong Jun Shyan under his Service Agreement and employment
letter is S$10,000 and RM217,000, respectively. The abovementioned salary shall be subject to
annual review by the Board and/or the Remuneration Committee, and may be amended after such
review by the Board and/or the Remuneration Committee. If the Executive Director is a member
of the Remuneration Committee, he shall not participate in the deliberation or vote on any matter
in which he is interested. In additional, Dr Lee Hung Ming is entitled to a fixed annual bonus of
S$276,000 commencing from FY2015 to FY2019, in respect of the medical services he provides
to the Group.
DIRECTORS, EXECUTIVE OFFICERS AND EMPLOYEES
140
Directors’ fees do not form part of the terms of the Service Agreements as these require the
approval of Shareholders in our Company’s annual general meeting.
Our Executive Directors will be reimbursed for all travelling, accommodation, entertainment and
other out-of-pocket expenses reasonably incurred by them in or about the discharge of their duties
hereunder.
Had the Service Agreements been in place with effect from 1 January 2013, the aggregate
remuneration paid to our Executive Directors for FY2013 would have been approximately S$1.85
million instead of approximately S$1.29 million and our profit before tax for FY2013 would have
decreased from approximately S$7.26 million to approximately S$6.70 million.
Save as disclosed above, there are no existing or proposed service agreements between our
Company, our subsidiaries and any of our Directors. There are no existing or proposed service
agreements entered or to be entered into by our Directors with our Company or any of our
subsidiaries which provide for benefits upon termination of employment.
DIRECTORS, EXECUTIVE OFFICERS AND EMPLOYEES
141
On 26 September 2014, our Shareholders adopted a share option scheme known as the ISEC
Healthcare Share Option Scheme (the “Share Option Scheme”), the rules of which are set out in
Appendix K of this Offer Document. Capitalised terms as used throughout this section, unless
otherwise defined, shall bear the meanings as defined in “Appendix K – Rules of the ISEC
Healthcare Share Option Scheme”.
The Share Option Scheme complies with the relevant rules as set out in Chapter 8 of the Catalist
Rules. The Share Option Scheme 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 Share Option Scheme, which forms an integral and
important component of a compensation plan, is designed to primarily reward and retain Directors
(including Independent Directors) and Employees of the Group whose services are vital to our
well-being and success.
As at the Latest Practicable Date, no Options have been granted under the Share Option Scheme.
Objectives of the Share Option Scheme
The objectives of the Share Option Scheme are as follows:
(a) to retain key Employees and Directors of our Group whose contributions are essential to the
long-term growth and prosperity of our Group;
(b) to instill loyalty to, and a stronger identification by Participants with the long-term prosperity
of, our Company;
(c) to attract potential employees with relevant skills to contribute to our Group and to create
value for our Shareholders; and
(d) to align the interests of Participants with the interests of our Shareholders.
Summary of the Share Option Scheme
The Rules of the Share Option Scheme may be inspected by Shareholders at the business office
of our Company in Singapore for a period of six (6) months from the date of registration of this
Offer Document. The following is a summary of the rules of the Share Option Scheme:
Participants
The Share Option Scheme allows for participation by full-time employees of our Group and
Directors (including Independent Directors) who have attained the age of 21 years on or before
the relevant Date of Grant of the Option, provided that none shall be an undischarged bankrupt
or have entered into a composition with his creditors. The aggregate number of Shares which may
be offered by way of grant of Options to our Controlling Shareholder and their respective
Associates under the Share Option Scheme shall not exceed 25% of the total number of Shares
available under the Share Option Scheme, with the number of Shares which may be offered by
way of grant of Options to each Controlling Shareholder and his respective Associate not
exceeding 10.0% of the total number of Shares available under the Share Option Scheme.
ISEC HEALTHCARE SHARE OPTION SCHEME
142
Administration of the Share Option Scheme
The Share Option Scheme shall be administered by a committee comprising members of our
Board of Directors (the “Committee”), with powers to determine, among others, the following:
(a) persons to be granted Options;
(b) number of Options to be offered; and
(c) recommendations for modifications to the Share Option Scheme.
However, in compliance with the requirements of the Catalist Rules, a Participant of the Share
Option Scheme who is a member of the Committee will not be involved in any deliberation or
decision in respect of Options to be granted to that Participant.
Size of the Share Option Scheme
The total number of shares over which the Committee may grant Options on any date, when added
to the number of shares issued and issuable in respect of all Options granted under the Share
Option Scheme (including any other share option schemes of our Company) shall not exceed 15%
of the number of all issued Shares (excluding treasury shares) on the day preceding the date of
the relevant grant.
Our Directors believe that such a limit gives us sufficient flexibility to decide on the number of
Option Shares to offer to the employees of the Group. 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. Our employee base, and thus the number of eligible
Participants, will increase as a result. The number of Options offered must also be significant
enough to serve as a meaningful reward for contribution to our Group. The Committee shall
exercise its discretion in deciding the number of Option Shares to be granted to each Employee
of the Group which will depend on the performance and value of the Employee to our Group.
Options entitlements
The number of Option Shares to be offered to a Participant shall be determined at the absolute
discretion of the Committee, which shall take into account criteria such as rank, contribution, past
performance, years of service and potential for future development of that Participant.
Options, exercise period and exercise price
The Options that are granted under the Share Option Scheme may have Exercise Prices that are,
at the discretion of the Committee:
(a) set at a discount to a price (the “Market Price”) equal to the average of the last dealt prices
for the Shares on the SGX-ST for the five (5) consecutive Market Days immediately
preceding the relevant Date of Grant of the relevant Option (subject to a maximum discount
of 20%) (the “Incentive Options”); or
(b) fixed at the Market Price (the “Market Price Options”).
ISEC HEALTHCARE SHARE OPTION SCHEME
143
Subject as provided in the Share Option Scheme and any other conditions as may be introduced
by the Committee from time to time, a Market Price Option or an Incentive Option, as the case may
be, shall be exercisable, in whole or in part, as follows
(a) in the case of a Market Price Option, during the period commencing after the first anniversary
of the Date of Grant and expiring on the tenth anniversary of such Date of Grant (or such
shorter period if so determined by the Committee); and
(b) in the case of an Incentive Option, during the period commencing after the second
anniversary of the Date of Grant and expiring on the tenth anniversary of such Date of Grant
(or such shorter period if so determined by the Committee).
Grant of Options
There are no fixed periods for the grant of Options. As such, offers of the grant of Options may be
made at any time at the discretion of the Committee.
However, in the event that an announcement on any matter of an exceptional nature involving
unpublished price sensitive information is made, Options may only be granted on or after the
second Market Day from the date on which the aforesaid announcement is made.
Termination of Options
Options may lapse or be exercised earlier in circumstances which include the termination of the
employment of the Participant 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.
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.
Rights of Shares arising from the Exercise of Options
Subject to the Catalist Rules and prevailing legislation, our Company shall have the flexibility to
deliver Shares to Participants upon exercise of their Options by way of:
(a) allotment of new Shares; and/or
(b) transfer of existing Shares, including (subject to applicable laws) any Shares acquired by our
Company pursuant to a share purchase mandate and/or held by our Company as treasury
shares.
Shares to be issued arising from the exercise of Options, when allotted and issued, shall be
subject to all the provisions of the Memorandum and Articles of Association of our Company and
shall rank pari passu in all respects with the then existing issued Shares, save for any dividends,
rights, allotments or distributions, the Record Date of which falls on or before the relevant exercise
date of the Options.
ISEC HEALTHCARE SHARE OPTION SCHEME
144
Duration of the Share Option Scheme
The Share Option Scheme shall continue in operation for a maximum period of 10 years
commencing on the date on which the Share Option Scheme is adopted by our Company in
general meeting, provided that the Share Option Scheme may continue 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.
Abstention from voting
Shareholders who are eligible to participate in the Share Option Scheme shall abstain from voting
on any resolution relating to the Share Option Scheme and any modification thereof. Such
Shareholders who are eligible to participate in the Share Option Scheme may, however, act as
proxies of other Shareholders in respect of the votes of such other Shareholders in relation to any
such resolutions, provided that specific instructions have been given in the proxy forms on how the
votes are to be cast in respect of the resolution.
Modifications to the Share Option Scheme
The Share Option Scheme may be modified and/or altered from time to time by a resolution of the
Committee (as defined in the Share Option Scheme), subject to the compliance with the
requirements of the Catalist Rules and the requirements of any other regulatory authorities as may
be necessary.
However, no modification or alteration shall adversely affect the rights attached to Options granted
prior to such modification or alteration except with the written consent of such number of
Participants under the Share Option Scheme who, if they exercise their Options in full, would
thereby become entitled to not less than 75% of the number of all the Shares which would fall to
be allotted upon exercise in full of all outstanding Options under the Share Option Scheme.
No alteration to the Share Option Scheme which would be to the advantage of Participants under
the Share Option Scheme shall be made except with the prior approval of our Shareholders in a
general meeting.
Grant of Incentive Options with a discounted exercise price
The ability to offer Incentive Options to Participants of the Share Option Scheme with exercise
prices set at a discount to the prevailing Market Prices of our Shares will operate as a means to
recognise the performance of Participants as well as to motivate them to continue to excel.
Incentive Options would be perceived in a more positive light by the Participants, inspiring them
to work hard and produce results in order to be offered Incentive Options, as only Employees of
the Group who have made outstanding contributions to the success and development of our
Group would be granted Incentive Options.
The flexibility to grant Incentive Options is also intended to cater to situations where the stock
market performance has overrun the general market conditions. In such events, the Committee
will have absolute discretion to:
(a) grant Incentive Options set at a discount to the Market Price of a Share (subject to a
maximum limit of 20%); and
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(b) determine the Participants to whom, and the Incentive Options to which, such reduction in
Exercise Prices will apply.
In determining whether to give a discount and the quantum of the discount, the Committee shall
be at liberty to take into consideration factors including the performance of our Company, our
Group, the performance of the Participant concerned, the contribution of the Participant to the
success and development of our Group and the prevailing market conditions. The Committee (in
its absolute discretion) will determine on a case-by-case basis whether a discount will be given,
and if so, the quantum of the discount, taking into account the objective that is desired to be
achieved by our Company and the prevailing market conditions. As the actual discount given will
depend on the relevant circumstances, the extent of the discount may vary from one case to
another, and from time to time, subject to a maximum discount of 20% of the Market Price of a
Share. The discretion to grant Incentive Options will, however, be used judiciously.
It is envisaged that our Company may consider granting the Incentive Options under
circumstances including (but not limited to) the following:
(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
Share Option Scheme 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.
Such flexibility in determining the quantum of discount would enable the Committee to tailor the
incentives in the grant of Incentive Options to be commensurate with the performance and
contribution of each individual Participant. By individually recognising the degree of performance
and contribution of each Participant, the granting of Incentive Options at a commensurate
discount would enable the Committee to provide incentives for better performance, greater
dedication and loyalty of the Participants.
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Our Company may also grant Market Price Options without any discount to the Market Price of our
Shares. 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 our Executive Directors and employees of the Group in the
Share Option Scheme
The extension of the Share Option Scheme to Employees of the Group allows us to have a fair and
equitable system to reward our Executive Directors and Employees of the Group who have made
and who continue to make significant contributions to the long-term growth of our Group.
We believe that the grant of Options to the Employees of the Group will enable us to attract, retain
and provide incentives to our Directors and Employees of the Group to produce 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.
Rationale for participation by our Non-Executive Directors (including Independent
Directors) in the Share Option Scheme
Although our Non-Executive Directors are not involved in the day-to-day running of our Group’s
operations, they play an invaluable role in furthering the business interests of our Group by
contributing their experience and expertise. The participation by Non-Executive Directors in the
Share Option Scheme will provide our Company with a further avenue to acknowledge and
recognise their services and contributions to our Group as it may not always be possible to
compensate them fully or appropriately by increasing the directors’ fees or other forms of cash
payment. For instance, the Non-Executive Directors may bring strategic or other value to our
Company which may be difficult to quantify in monetary terms. The grant of Options to
Non-Executive Directors will allow our Company to attract and retain experienced and qualified
persons from different professional backgrounds to join our Company as Non-Executive Directors,
and to motivate existing Non-Executive Directors to take extra efforts to promote the interests of
our Company and/or our Group.
In deciding whether to grant Options to the Non-Executive Directors, our Committee will take into
consideration, among other things, the contributions made to the growth, development and
success of our Group and the years of service of a particular Non-Executive Director. Our
Committee may also, where it considers relevant, take into account other factors such as
economic conditions and our Company’s performance.
In order to minimise any potential conflict of interests and to not compromise the independence
of the Non-Executive Directors, our Company intends to grant only a nominal number of Options
under the Share Option Scheme to Non-Executive Directors.
Rationale for participation of Controlling Shareholders and their Associates
An employee who is a Controlling Shareholder of our Company or an Associate of a Controlling
Shareholder shall be eligible to participate in the Share Option Scheme if (a) his participation in
the Share Option Scheme and (b) the actual number and terms of the options to be granted to him
have been approved by independent Shareholders of our Company in separate resolutions for
ISEC HEALTHCARE SHARE OPTION SCHEME
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each such person. The relevant Employee is required to abstain from voting on, and (in the case
of Employees who are Directors) refrain from making any recommendation on, the resolutions in
relation to the Share Option Scheme.
One of the main objectives of the Share Option Scheme is to motivate Participants to optimise
their performance standards and efficiency and to maintain a high level of contribution to our
Group. The objectives of the Share Option Scheme apply equally to our Employees who are
Controlling Shareholders or their respective Associates. Our view is that all deserving and eligible
Participants should be motivated, regardless of whether they are Controlling Shareholders or their
respective Associates. It is our interest to incentivise outstanding Employees who have
contributed to the growth of our Group to continue to remain with us.
Although our Controlling Shareholders and their respective Associates have or may already have
shareholding interests in our Company, the extension of the Share Option Scheme to allow
Controlling Shareholders and their respective Associates the opportunity to participate in the
Share Option Scheme will ensure that they are equally entitled, with the other Employees of our
Group, to participate in and benefit from this system of remuneration. The Share Option Scheme
is intended to be part of our Company’s system of employee remuneration and our Company is
of the view that Employees who are Controlling Shareholders or their respective Associates
should not be unduly discriminated against by virtue only of their shareholding in our Company.
Financial Effects of the Share Option Scheme
Any Options granted under the Share Option Scheme would have a fair value. In the event that
such Options are granted at prices below the fair value of the Options, there will be a cost to our
Company. The amounts of such costs may be more significant in the case of Incentive Options,
where such Options are granted with exercise prices set at a discount to the prevailing Market
Price of our Shares. The cost to our Company of granting Options under the Share Option Scheme
would be as follows:
(a) the exercise of an Incentive Option at the discounted Exercise Price would translate into a
reduction of the proceeds from the exercise of such Option, 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 proceeds from the exercise
of such Option would represent the monetary cost to our Company;
(b) as the monetary cost of granting Incentive Options is borne by our Company, the earnings
of our Company would effectively be reduced by an amount corresponding to the reduced
interest earnings that our Company would have received from the difference in proceeds
from the Exercise Price with no discount versus the discounted Exercise Price. Such
reduction would, accordingly, result in the dilution of our Company’s EPS; and
(c) the effect of the issue of new Shares upon the exercise of Options, is that our Company’s
NTA per Share will increase if the Exercise Price is above the NTA per Share and decrease,
if the Exercise Price is below the NTA per Share.
The costs as discussed above would only materialise upon the exercise of the relevant Options.
Share options have value because the option to buy a company’s share for a fixed price during
an extended future time period is a valuable right, even if there are restrictions attached to such
an option. As our Company is required to account for share-based awards granted to the
Employees of the Group, the cost of granting Options will affect our financial results as this cost
to our Company would be required to be charged to our Company’s income statement
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commencing from the time Options are granted. Subject as aforesaid, as and when Options are
exercised, the cash inflow will add to the NTA of our Company and its share capital base will grow.
Where Options are granted with subscription prices that are set at a discount to the Market Prices
for our Shares prevailing at the time of the grant of such Options, the amount of the cash inflow
to our Company on the exercise of such Options would be diminished by the quantum of the
discount given, as compared with the cash inflow that would have been received by our Company
had the Options been granted at the market price of our Shares prevailing at the time of the grant.
The grant of Options will have an impact on our Company’s reported profit under the accounting
rules in the Singapore Financial Reporting Standards. It requires the recognition of an expense in
respect of Options granted. The expenses will be based on the fair value of the Options at the Date
of Grant (as determined by an option-pricing model) and will be recognised over the vesting
period.
Details of the number of Options granted pursuant to the Share Option Scheme, the number of
Options exercised and the Exercise Price (as well as any applicable discounts) will be disclosed
in our annual report.
We have made an application to the SGX-ST for permission to deal in and for quotation of the
Option Shares which may be issued upon the exercise of the options to be granted under the
Share Option Scheme. The approval of the SGX-ST is not to be taken as an indication of the
merits of our Company, our Subsidiaries, our Shares, the Placement Shares or the Option Shares.
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Our Articles provide that our Board of Directors will consist of not less than two (2) Directors. Save
as disclosed in this Offer Document, none of our Directors are appointed for any fixed terms, but
one-third of our Directors are required to retire at every annual general meeting of our Company.
Directors who retire are eligible to stand for re-election.
Our Directors recognise the importance of corporate governance and the maintenance of high
standards of accountability to Shareholders of our Company. Accordingly, our Board has
established three (3) committees: (i) the Audit Committee; (ii) the Nominating Committee; and (iii)
the Remuneration Committee.
Audit Committee
Our Audit Committee comprises our Independent Directors, Sitoh Yih Pin, Professor Low Teck
Seng and Lim Wee Hann. The Chairman of our Audit Committee is Sitoh Yih Pin.
The Audit Committee is responsible for:
(a) assisting our Board of Directors in discharging its statutory responsibilities on financing and
accounting matters;
(b) reviewing significant financial reporting issues and judgments to ensure the integrity of the
financial statements and any formal announcements relating to financial performance;
(c) reviewing the scope and results of the audit and its cost effectiveness, and the independence
and objectivity of the external auditors;
(d) reviewing the external auditor’s audit plan and audit report, and the external auditor’s
evaluation of the system of internal accounting controls, including financial, operational,
compliance and information technology controls;
(e) reviewing the key financial risk areas, the risk management structure and any oversight of
the risk management process and activities to mitigate and manage risk at acceptable levels
determined by our Board of Directors;
(f) reviewing the statements to be included in the annual report concerning the adequacy and
effectiveness of our risk management and internal controls systems, including financial,
operational, compliance controls, and information technology controls;
(g) reviewing any interested person transactions and monitoring the procedures established to
regulate interested person transactions, including ensuring compliance with our Company’s
internal control system and the relevant provisions of the Catalist Rules, as well as all
conflicts of interests to ensure that proper measures to mitigate such conflicts of interests
have been put in place (please refer to the section entitled “Interested Person Transactions
and Conflicts of Interests – Guidelines and Review Procedures for Future Interested Person
Transactions” of this Offer Document);
(h) reviewing the scope and results of the internal audit procedures, and at least annually, the
adequacy and effectiveness of our internal audit function;
(i) approving the hiring, removal, evaluation and compensation of the head of the internal audit
function, or the accounting/auditing firm or corporation to which the internal audit function is
outsourced;
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(j) appraising and reporting to our Board of Directors on the audits undertaken by the external
auditors and internal auditors, the adequacy of disclosure of information;
(k) making recommendations to our Board of Directors on the proposals to Shareholders on the
appointment, reappointment and removal of the external auditor, and approving the
remuneration and terms of engagement of the external auditor;
(l) undertaking such other reviews and projects as may be requested by our Board of Directors,
and report to our Board its findings from time to time on matters arising and requiring the
attention of our Audit Committee; and
(m) undertaking generally such other functions and duties as may be required by law or the
Catalist Rules, and by amendments made thereto from time to time.
Apart from the duties listed above, the Audit Committee will ensure that arrangements are in place
for employees to raise concerns, in confidence, about possible wrongdoing in financial reporting
or other matters. The Audit Committee will commission and review the findings of internal
investigations into such matters or matters where there is any suspected fraud or irregularity, or
failure of internal controls, or infringement of any law, rule or regulation which has or is likely to
have a material impact on our Group’s operating results and financial position. The Audit
Committee will also ensure that the appropriate follow-up actions are taken.
Our Audit Committee will review the effectiveness of the internal audit function and, where
deemed necessary, expand the internal audit function to ensure its effectiveness within our Group.
Our Board, after making all reasonable enquiries, with the concurrence of our Audit Committee,
is of the opinion that our internal controls are adequate to address the financial, operational and
compliance risks.
Our Audit Committee having (i) conducted an interview with Ms Macy Thong; (ii) considered the
qualifications and past working experience of Ms Thong (as described in the section entitled
“Directors, Executive Officers and Employees – Executive Officers” of this Offer Document); (iii)
observed her abilities, familiarity and diligence in relation to the financial matters and information
of our Group; and (iv) noted the absence of negative feedback from our Reporting Accountants,
is of the view that Ms Thong is suitable for the position of CFO.
After making all reasonable enquiries, and to the best of the knowledge and belief of our Audit
Committee, nothing has come to the attention of the members of our Audit Committee to cause
them to believe that Ms Macy Thong does not have the competence, character, integrity expected
of a CFO (or its equivalent rank) of a listed issuer.
Nominating Committee
The Nominating Committee comprises Professor Low Teck Seng, Sitoh Yih Pin and Lim Wee
Hann. The Chairman of our Nominating Committee is Professor Low Teck Seng. The Nominating
Committee is responsible for:
(a) making recommendations to our Board of Directors on relevant matters relating to (i) the
review of board succession plans for Directors, in particular, our Chairman and the Chief
Executive Officer, (ii) the reviewing of training and professional development programs for
our Board and (iii) the appointment and re-appointment of our Directors (including alternate
Directors, if applicable);
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(b) reviewing and determining annually, and as and when circumstances require, if a Director is
independent, in accordance with the Code of Corporate Governance and any other salient
factors;
(c) reviewing the composition of our Board of Directors annually to ensure that our Board of
Directors and our Board committees comprise Directors who as a group provide an
appropriate balance and diversity of skills, expertise, gender and knowledge of our Group
and provide core competencies such as accounting or finance, business or management
experience, industry knowledge, strategic planning experience and customer-based
experience and knowledge; and
(d) where a Director has multiple board representations, deciding whether the Director is able to
and has been adequately carrying out his duties as Director, taking into consideration the
Director’s number of listed company board representation and other principal commitments.
In addition, our Nominating Committee will make recommendations to our Board of Directors on
the development of a process for evaluation and performance of the Board, its board committees
and directors. In this regard, our Nominating Committee will decide how our Board of Directors’
performance is to be evaluated and propose objective performance criteria which address how our
Board of Directors has enhanced long-term shareholder value. The Nominating Committee will
also implement a process for assessing the effectiveness of our Board of Directors as a whole and
our Board committees and for assessing the contribution of our Chairman and each individual
Director to the effectiveness of our Board of Directors. Our Chairman will act on the results of the
performance evaluation of our Board of Directors, and in consultation with our Nominating
Committee, propose, where appropriate, new members to be appointed to our Board of Directors
or seek the resignation of Directors.
Each member of the Nominating Committee is required to abstain from voting, approving or
making a recommendation on any resolutions of the Nominating Committee in which he has a
conflict of interest in the subject matter under consideration.
Nominating Committee’s view of our Independent Directors
The Nominating Committee, having taken into consideration the following:
(a) the number of listed company directorships by each of our Independent Directors;
(b) the principal commitments of our Independent Directors;
(c) the confirmations by our Independent Directors stating that they are each able to devote
sufficient time and attention to the matters of our Company;
(d) 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, its 10% shareholders 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;
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(e) our Independent Directors’ working experience and expertise in different areas of
specialisation; and
(f) the composition of the Board,
is of the view that (i) 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 (ii) our Independent Directors, as a
whole, represent a strong and independent element on the Board which is able to exercise
objective judgment on corporate affairs independently from any Controlling Shareholder.
Mr Lim Wee Hann, our Independent Director, is a partner of Rajah & Tann Singapore LLP,
Solicitors to the Placement and Legal Adviser to our Company as to Singapore Law and of
Christopher & Lee Ong, the Legal Adviser to our Company as to Malaysian Law. Rajah & Tann
Singapore LLP and Christopher & Lee Ong are member firms of Rajah & Tann Asia. Mr Lim Wee
Hann is not involved in the day-to-day operations and management of Christopher & Lee Ong and
his responsibilities with regard to Christopher & Lee Ong are mainly from the perspective of
liaising with Christopher & Lee Ong as a member firm of Rajah & Tann Asia. Mr Lim Wee Hann
is not involved in the provision of legal services by Rajah & Tann Singapore LLP and Christopher
& Lee Ong to our Company and was not involved in the negotiations, deliberations and the
delivery of services by Rajah & Tann Singapore LLP and Christopher & Lee Ong to our Group.
Fees charged by Rajah & Tann Singapore LLP and Christopher & Lee Ong to our Group were on
an arm’s length basis and were based on normal commercial terms. Mr Lim Wee Hann has not
previously provided any legal services to the Group. Mr Lim Wee Hann will abstain from and will
not be involved in any decision of our Board in relation to any transactions or dealings with Rajah
& Tann Singapore LLP and Christopher & Lee Ong.
Based on the foregoing, our Board believes that the engagement of Rajah & Tann Singapore LLP
and Christopher & Lee Ong for the provision of legal services would not interfere, or be reasonably
perceived to interfere, with the exercise of Mr Lim Wee Hann’s independent business judgment as
an Independent Director with a view to the best interests of our Company. Also, the independence
of Mr Lim Wee Hann, as is the case with our other Independent Directors, will be reviewed by the
Nominating Committee on an annual basis. In reviewing the independence of Mr Lim Wee Hann,
in particular, the Nominating Committee will have regard to the value of the transactions between
Rajah & Tann Singapore LLP and Christopher & Lee Ong and our Company.
Remuneration Committee
Our Remuneration Committee comprises Lim Wee Hann, Sitoh Yih Pin and Professor Low Teck
Seng. The Chairman of our Remuneration Committee is Lim Wee Hann.
Our Remuneration Committee is responsible for:
(a) reviewing and recommending to our Board of Directors, in consultation with the Chairman of
our Board of Directors, for endorsement, a comprehensive remuneration policy framework
and guidelines for remuneration of our Directors, the Chief Executive Officer and other
persons having authority and responsibility for planning, directing and controlling the
activities of our Company (“Key Management Personnel”);
(b) reviewing and recommending to our Board of Directors, for endorsement, the specific
remuneration packages for each of our Directors and Key Management Personnel;
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(c) reviewing and approving the design of all share option plans, performance share plans
and/or other equity based plans;
(d) in the case of service contracts, reviewing our Company’s obligations arising in the event of
termination of the Directors’ or Key Management Personnels’ contracts of service, to ensure
that such contracts of service contain fair and reasonable termination clauses which are not
overly generous, with a view to being fair and avoiding the reward of poor performance; and
(e) approving performance targets for assessing the performance of each of the Key
Management Personnel and recommend such targets as well as employee specific
remuneration packages for each of such Key Management Personnel, for endorsement by
our Board of Directors.
Our Remuneration Committee also periodically considers and reviews remuneration packages in
order to maintain their attractiveness, to retain and motivate our Directors to provide good
stewardship of our Company and Executive Officers to successfully manage our Company, and to
align the level and structure of remuneration with the long term-interests and risk policies of our
Company.
If a member of our Remuneration Committee has an interest in a matter being reviewed or
considered by our Remuneration Committee, he will abstain from voting on the matter.
Arrangements or Understanding
None of our Directors or Executive Officers has any arrangement or understanding with any of our
substantial shareholders, customers or suppliers or other person pursuant to which such Director
or Executive Officer was appointed as a Director or as an Executive Officer.
Board Practices
Our Directors are to be appointed by our Shareholders at a general meeting and an election of
Directors is held annually. One third (or the number nearest to one third) of our Directors are
required to retire from office at least once every three (3) years. However, a retiring Director is
eligible for re-election at the meeting at which he retires. Further details on the appointment and
retirement of Directors can be found in “Appendix G – Summary of Selected Articles of Association
of our Company” to this Offer Document.
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Malaysia
Exchange control in Malaysia is implemented under the Malaysian Financial Services Act 2013
and the government authority is the Foreign Exchange Administration (“FEA”) of Bank Negara
Malaysia (“BNM”). Payments or repatriation of moneys from our subsidiaries in Malaysia to our
Company are considered payments from “residents” to “non-residents” for the purposes of
exchange control.
The government of Malaysia (“GOM”) had, on 1 September 1998, as part of its package of policy
responses to the 1997 economic crisis in South-East Asia, introduced selective exchange control
measures. Subsequently in 1999, the GOM has liberalised these exchange control measures to
allow foreign investors to repatriate principal capital and profits, subject to an exit levy based on
a percentage of profits repatriated. This levy was in turn revised on 1 February 2001 to apply only
to profits made from portfolio investments retained in Malaysia for less than one year. On 2 May
2001, all such controls with respect to the repatriation of foreign portfolio funds (largely consisting
of proceeds from the sale of stocks listed on Bursa Malaysia Securities Berhad) were lifted.
It cannot be confirmed, at this time, if the GOM may re-impose these exchange control measures
in the future. In the event of such re-imposition or introduction of other exchange control
measures, investors may not be able to carry out the repatriation or payment between residents
and non-residents of Malaysia for a specified period of time, or may only do so after paying tax
or levy, or obtaining consent from BNM.
Under the current exchange control notices issued by the FEA, a resident is allowed to make or
receive payment in Ringgit Malaysia in Malaysia to or from a non-resident under the following
circumstances:
(a) settlement of a Ringgit Malaysia asset including any income and profit due from the Ringgit
Malaysia asset;
(b) settlement of trade in goods;
(c) settlement of services, in any manner;
(d) income earned or expense incurred in Malaysia;
(e) settlement of a commodity Murabahah transaction between a resident and non-resident
participant undertaken through a resident commodity trading service provider;
(f) settlement of reinsurance for domestic insurance business or Retakaful for domestic Takaful
business between a resident and a person licensed to undertake Labuan insurance or
Takaful business;
(g) settlement of a non-financial guarantee denominated in ringgit issued by a person licensed
to undertake Labuan banking business in favour of a resident; or
(h) for any purpose between immediate family members.
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With respect to foreign currencies, making and receiving payments may be made between a
resident and a non-resident under the following circumstances:
(a) a derivative denominated in foreign currency offered by the resident save where is it has
been approved by BNM;
(b) a derivative denominated in foreign currency offered by the non-resident; or
(c) a derivative denominated in or referenced to ringgit save where it has been approved by
BNM.
Notwithstanding the above, payment in foreign currency is allowed for:
(a) a derivative denominated in foreign currency, other than exchange rate derivative with
reference to ringgit, purchased by a licensed onshore bank for its own account;
(b) an interest rate swap denominated in foreign currency between a resident and Labuan banks
to manage interest rate exposure arising from borrowing in foreign currency; or
(c) derivative denominated in foreign currency, other than exchange rate derivatives, offered on
a Specified Exchange stipulated under the Malaysian Capital Markets and Services Act 2007
undertaken through a resident futures broker by a resident with firm commitment.
For the purpose of payment arising from the settlement of services, a resident is allowed to
receive such payment in foreign currency from a non-resident in any manner.
If the payment between resident and non-resident are for purposes not as set out above, the
parties would be required to obtain the express written consent of BNM to proceed with such
payment.
Singapore
There are no exchange controls in Singapore.
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Upon listing and quotation on Catalist, our Shares will be traded under the book-entry settlement
system of CDP, and all dealings in and transactions of our Shares through Catalist will be effected
in accordance with the terms and conditions for the operation of Securities Accounts with CDP, as
amended, modified or supplemented from time to time.
Our Shares will be registered in the name of CDP or its nominee and held by CDP for and on
behalf of persons who maintain, either directly or through Depository Agents, Securities Accounts
with CDP. Persons named as direct Securities Account holders and Depository Agents in the
Depository Register maintained by CDP, rather than CDP itself, will be treated, under our Articles
of Association and the Companies Act, as members of our Company in respect of the number of
Shares credited to their respective Securities Accounts.
Persons holding our Shares in Securities Accounts with CDP may withdraw the number of Shares
they own from the book-entry settlement system in the form of physical share certificates. Such
share certificates will, however, not be valid for delivery pursuant to trades transacted on Catalist,
although they will be prima facie evidence of title and may be transferred in accordance with our
Articles of Association. A fee of S$10.00 for each withdrawal of 1,000 Shares or less and a fee of
S$25.00 for each withdrawal of more than 1,000 Shares is payable upon withdrawing our Shares
from the book entry settlement system and obtaining physical share certificates. In addition, a fee
of S$2.00 or such other amount as our Directors may decide, is payable to the share registrar for
each share certificate issued and a stamp duty of S$10.00 is also payable where our Shares are
withdrawn in the name of the person withdrawing our Shares or S$0.20 per S$100.00 or part
thereof of the last transacted price where it is withdrawn in the name of a third party. Persons
holding physical share certificates who wish to trade on Catalist must deposit with CDP their share
certificates together with the duly executed and stamped instruments of transfer in favour of CDP,
and have their respective Securities Accounts credited with the number of Shares deposited
before they can effect the desired trades. A fee of S$10.00 is payable upon the deposit of each
instrument of transfer with CDP. The above fees may be subject to such charges as may be in
accordance with CDP’s prevailing policies or the current tax policies that may be in force in
Singapore from time to time.
Transactions in our Shares under the book-entry settlement system will be reflected by the seller’s
Securities Account being debited with the number of Shares sold and the buyer’s Securities
Account being credited with the number of Shares acquired. No transfer of stamp duty is currently
payable for our Shares that are settled on a book-entry basis.
A Singapore clearing fee for trades in our Shares on Catalist is payable at the rate of 0.04% of the
transaction value subject to a maximum of S$600.00 per transaction. The clearing fee, instrument
of transfer deposit fee and share withdrawal fee may be subject to GST at the prevailing rate of
7% (or such other rate prevailing from time to time).
Dealing in our Shares will be carried out in Singapore Dollars and will be effected for settlement
on CDP on a scripless basis. Settlement of trades on a normal “ready” basis on Catalist generally
takes place on the third Market Day following the transaction date, and payment for the securities
is generally settled on the following business day. CDP holds securities on behalf of investors in
Securities Accounts. An investor may open a direct account with CDP or a sub-account with a CDP
Depository Agent. The CDP Depository Agent may be a member company of the SGX-ST, bank,
merchant bank or trust company.
CLEARANCE AND SETTLEMENT
157
INFORMATION ON DIRECTORS AND EXECUTIVE OFFICERS
1. Save as disclosed below, as at the date of this Offer Document, none of our Directors,
Executive Officers or Controlling Shareholder has:
(a) during the last 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 at
the time when he was a partner or at any time within two (2) years from the date he
ceased to be a partner;
(b) during the last 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;
(c) any unsatisfied judgments against him;
(d) 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;
(e) 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;
(f) during the last 10 years, had judgment entered against him in any civil proceeding in
Singapore or elsewhere involving a breach of any law or regulatory requirement that
relates to the securities or futures industry in Singapore or elsewhere, or a finding of
fraud, misrepresentation or dishonesty on his part, or has been the subject of any civil
proceedings (including any pending civil proceedings of which he is aware) involving an
allegation of fraud, misrepresentation or dishonesty on his part;
(g) ever been convicted in Singapore or elsewhere of any offence in connection with the
formation or management of any entity or business trust;
(h) ever been disqualified from acting as a director or an equivalent person of any entity
(including the trustee of a business trust), or from taking part directly or indirectly in the
management of any entity or business trust;
(i) 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
158
(j) ever, to his knowledge, been concerned with the management or conduct, in Singapore
or elsewhere, of affairs of:
(i) any corporation which has been investigated for a breach of any law or regulatory
requirement governing corporations in Singapore or elsewhere;
(ii) 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;
(iii) any business trust which has been investigated for breach of any law or regulatory
requirement governing business trusts in Singapore or elsewhere; or
(iv) any entity or business trust which has been investigated for a breach of any law
or regulatory requirement that relates to the securities or futures industry in
Singapore or elsewhere,
in connection with any matter occurring or arising during the period when he was so
concerned with the entity or business trust; and
(k) ever been the subject of any current or past investigation or disciplinary proceedings,
or has been reprimanded or issued any warning, by the Authority or any other regulatory
authority, exchange, professional body or government agency, whether in Singapore or
elsewhere.
Disclosure relating to our Chief Executive Officer, Dr Wong Jun Shyan, our Kuala
Lumpur Centre Director, Dr Choong Yee Fong and our Penang Centre Director, Dr Alan
Ang
Dr Wong Jun Shyan, Dr Choong Yee Fong and Dr Alan Ang are directors of our subsidiary,
ISEC Penang, which had between June and July 2013 operated as a medical clinic without
the requisite licence and was imposed with a penalty of RM150,000. ISEC Penang had paid
the said fine to MOH Malaysia on 19 September 2013 and has subsequently obtained the
licence on 23 January 2014. The background in relation to the above lapse is as follow:
In 2012, ISEC Penang entered into an agreement to rent its current premises from the eye
doctor who was then practicing in those premises (the “Landlord”) and submitted plans to
the relevant authorities to renovate the premises. The renovation was completed in April
2013 and ISEC Penang submitted its application to the Malaysian Ministry of Health to obtain
its operating licence. While awaiting the relevant inspection and certification from the Fire
and Safety Department as part of the licence approval process, ISEC Penang was operating
under the clinic licence held by the Landlord. Accordingly, the Landlord and our specialist
doctors started seeing patients in the renovated clinic under ISEC Penang’s name in May
2013. In June 2013, the Landlord ceased practice at ISEC Penang and consequently, ISEC
Penang inadvertently continued to operate without a clinic licence. On 17 July 2013, ISEC
Penang was ordered to close for operating without a licence. ISEC Penang has subsequently
obtained its licence on 23 January 2014.
GENERAL AND STATUTORY INFORMATION
159
Disclosure relating to our Chief Financial Officer, Macy Thong
Ms Macy Thong had previously worked at Megan Media Holdings Berhad (“MMHB”) as Vice
President, Group Corporate Finance specialising in investor relations and corporate finance
between November 2004 and March 2007. Subsequent to her employment with MMHB, in
2007, Ms Thong assisted the Securities Commission of Malaysia (the “Commission”) with
regards to the investigation on MMHB. Subsequently, charges were made against the former
financial controller and former executive chairman and director of MMHB for abetting MMHB
in furnishing to Bursa Malaysia false revenue figures and for furnishing a false statement
relating to the revenue figure in MMHB’s quarterly report on consolidated results respectively(1). In addition, she was called as a witness to provide statements in the High Court of
Malaysia in relation to charges made against the former executive chairman of MMHB. We
understand from the Commission that Ms Thong was not the subject of the Commission’s
investigations and there were no charges or convictions made against her.
2. There is no shareholding qualification for Directors under our Articles of Association.
3. No option to subscribe for shares in, or debentures of, our Company or any of our
subsidiaries has been granted to, or was exercised by, any Director or Executive Officer
within the last two (2) years preceding the date of this Offer Document.
4. Save as disclosed in the sections entitled “Restructuring Exercise” and “Interested Person
Transactions” of this Offer Document, no Director or expert is interested, directly or indirectly,
in the promotion of, or in any property or assets which have, within the two (2) years
preceding the date of this Offer Document, been acquired or disposed of by or leased to us
or any of our subsidiaries, or are proposed to be acquired or disposed of by or leased to us
or any of our subsidiaries.
5. No sum or benefit has been paid or is agreed to be paid to any Director or expert, or to any
firm in which such Director or expert is a partner or any corporation in which such Director
or expert holds shares or debentures, in cash or shares or otherwise, by any person to
induce him to become, or to qualify him as, a Director, or otherwise for services rendered by
him or by such firm or corporation in connection with the promotion or formation of our
Company.
SHARE CAPITAL
6. As at the Latest Practicable Date, there is only one (1) class of shares in the capital of our
Company, being ordinary shares in the share capital of our Company. There is no founder,
management or deferred share. Our existing Shares do not carry voting rights which are
different from the Placement Shares. The rights and privileges attached to our Shares are
stated in our Articles.
1 Extracted from press release of the Securities Commission Malaysia dated 10 December 2007 entitled “SC charges
Megan Media financial controller and executive chairman – Seeking Interpol help to arrest Megan Media executive
director”.
GENERAL AND STATUTORY INFORMATION
160
7. Save as disclosed below and in the sections entitled “Share Capital” and “Restructuring
Exercise” of this Offer Document, there were no changes in the share capital or the number
and classes of shares of our Company or our subsidiaries within the three (3) years
preceding the date of this Offer Document.
Date of issue
Number of
ordinary shares
issued(1)
Aggregate issue/
redemption price
Purpose of
issue
Resultant issued
share capital
Our
Company
2 January
2014
100 S$100 Allotment on
incorporation
S$100
24 July 2014 2,250,000 S$2,250,000 Allotment S$2,250,100
8 September
2014
3,249,900 S$3,249,900 Allotment S$5,500,000
26 September
2014
50,000,000 S$7,000,000 Issue of
Consideration
Shares
S$12,500,000
ISEC KL 26 August
2013
450,000
redeemable
preference shares
redeemed
RM445,500
(at RM0.99
premium per
redeemable
preference share)
Redemption of
redeemable
preference
shares
RM0
(redeemable
preference shares)
RM1,000,000
(ordinary shares)
ISEC
Penang
29 February
2012
100 RM100 Allotment on
incorporation
RM100
22 November
2012
999,900 RM999,900 Working
capital
RM1,000,000
ISEC
Singapore
2 January
2014
100 S$100 Allotment on
incorporation
S$100
ISEC Eye 15 July 2014 100 S$100 Allotment on
incorporation
S$100
22 September
2014
1,153,461 S$1,153,461 Allotment S$1,153,561
Note:
(1) Save as otherwise disclosed
8. Save as disclosed in the sections entitled “Share Capital” and “Restructuring Exercise” of this
Offer Document, no shares in, or debentures of, our Company or any of our subsidiaries have
been issued, or are proposed to be issued, as fully or partly paid-up for cash, or for a
consideration other than cash, during the last three (3) years preceding the date of this Offer
Document.
9. Save as disclosed under the section entitled “Share Capital” of this Offer Document, as at the
Latest Practicable Date, no person has been, or is entitled to be, given an option to subscribe
for any shares in or debentures of our Company or any of our subsidiaries.
GENERAL AND STATUTORY INFORMATION
161
MEMORANDUM AND ARTICLES OF ASSOCIATION
10. Our Company is registered in Singapore with the Accounting and Corporate Regulatory
Authority with a registration number 201400185H.
11. A summary of our Articles of Association relating to, among others, Directors’ powers to vote
on contracts in which they are interested, Directors’ remuneration, Directors’ borrowing
powers, Directors’ retirement, Directors’ share qualification, rights pertaining to shares,
convening of general meetings and alteration of capital are set out in “Appendix G –
Summary of Selected Articles of Association of our Company” to this Offer Document. Our
Articles of Association are available for inspection at our registered office in accordance with
paragraph 27 in the section entitled “General and Statutory Information – Documents
Available for Inspection” of this Offer Document.
MATERIAL CONTRACTS
12. The following contracts, not being contracts entered into in the ordinary course of business,
have been entered into by us within the two (2) years preceding the date of lodgement of this
Offer Document and are or may be material:
(a) Business Acquisition Agreement dated 22 September 2014. Please refer to the section
entitled “Restructuring Exercise” of this Offer Document for more details.
(b) Share Swap Agreement dated 26 September 2014 in respect of the acquisition of ISEC
Eye. Please refer to the section entitled “Restructuring Exercise” of this Offer Document
for more details.
(c) Share Swap Agreement dated 26 September 2014 in respect of the acquisition of ISEC
KL. Please refer to the section entitled “Restructuring Exercise” of this Offer Document
for more details.
(d) Sale and purchase agreement dated 28 March 2014 entered into between ISEC KL, Dr
Wong Jun Shyan and HSC Healthcare Sdn. Bhd. in respect of the disposal of shares in
ISEC (Ampang) Sdn. Bhd.
LITIGATION
13. Our Group was not engaged in any legal or arbitration proceedings in the last 12 months
before the date of the lodgement of this Offer Document, as plaintiff or defendant in respect
of any claims or amounts which are material in the context of the Placement and our
Directors have no knowledge of any proceedings pending or threatened against our
Company or any member of our Group or any facts likely to give rise to any litigation, claims
or proceedings which might materially affect the financial position or profitability of our
Group.
MISCELLANEOUS
14. There has been no previous offer for sale of our Shares to the public within the two (2) years
preceding the date of this Offer Document.
GENERAL AND STATUTORY INFORMATION
162
15. There has not been any public take-over offer by a third party in respect of our Shares, or by
our Company in respect of shares of another corporation or units of a business trust, which
has occurred between 1 January 2013 and the Latest Practicable Date.
16. Save as disclosed in the section entitled “Plan of Distribution – Management and Placement
Arrangements” of this Offer Document, no commission, discount or brokerage has been paid
or other special terms granted within the two (2) years preceding the Latest Practicable Date
or is payable to any Director, promoter, expert, proposed director or any other person for
subscribing for and/or purchasing or agreeing to subscribe for and/or purchase or procuring
or agreeing to procure subscription for and/or purchase of any shares in or debentures of our
Company or any of our subsidiaries.
17. No expert employed on a contingent basis by our Company or any of our subsidiaries, has
a material interest, whether direct or indirect, in the shares of our Company or our
subsidiaries, or has a material economic interest, whether direct or indirect, in our Company,
including an interest in the success of the Placement.
18. 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 Banker. 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.
19. Save as disclosed in this Offer Document, the financial condition and operations of our Group
are not likely to be affected by any of the following:
(a) known trends or demands, commitments, events or uncertainties that will result in or are
reasonably likely to result in our Group’s liquidity increasing or decreasing in any
material way;
(b) material commitments for capital expenditure;
(c) unusual or infrequent events or transactions or any significant economic changes that
may materially affect the amount of reported income from our business operations; and
(d) known trends or uncertainties that have had or that we reasonably expect to have a
material favourable or unfavourable impact on revenues or operating income.
20. Save as disclosed in the sections entitled “Risk Factors” and “Management’s Discussion and
Analysis of Results of Operations and Financial Position of our Pro Forma Combined
Financial Information – Liquidation and Capital Resources” of this Offer Document, our
Directors are not aware of any event which has occurred between the 31 March 2014 and the
Latest Practicable Date, which may have a material effect on the financial position and
results of business operations of our Group or the financial information provided in this Offer
Document.
21. We currently have no intention of changing the auditors of the companies in our Group after
the listing of our Company on Catalist.
GENERAL AND STATUTORY INFORMATION
163
CONSENTS
22. The Independent Auditors and Reporting Accountants have given and have not withdrawn its
written consent to the issue of this Offer Document with the inclusion herein of, and all
references to, (i) its name; (ii) “Appendix A – Independent Auditors’ Report and Unaudited
Pro Forma Combined Financial Statements for the Financial Years ended 31 December
2011, 2012, 2013 and for the Financial Period from 1 January 2014 to 31 March 2014”; (iii)
“Appendix B – Independent Auditors’ Report and Audited Combined Financial Statements for
the Financial Years ended 31 December 2011, 2012 and 2013 in respect of ISEC Healthcare
Ltd. and its subsidiaries”; (iv) “Appendix C – Independent Auditors’ Report and Audited
Combined Financial Statements for the Financial Years ended 31 December 2011, 2012 and
2013 in respect of ISEC Eye Pte. Ltd.”; (v) “Appendix D – Independent Auditors’ Review
Report and Unaudited Interim Condensed Combined Financial Statements for the Financial
Period from 1 January 2014 to 31 March 2014 in respect of ISEC Healthcare Ltd. and its
subsidiaries”; and (vi) “Appendix E – Independent Auditors’ Review Report and Unaudited
Interim Condensed Combined Financial Statements for the Financial Period from 1 January
2014 to 31 March 2014 in respect of ISEC Eye Pte. Ltd.”, in the form and context in which
they appear in this Offer Document and to act in such capacity in relation to this Offer
Document.
23. The Issue Manager and Sponsor, the Placement Agent, the Solicitors to the Placement and
Legal Adviser to our Company as to Singapore Law, the Legal Adviser to our Company as to
Malaysian Law, the Share Registrar, the Receiving Banker and the Principal Bankers have
each given and have not withdrawn its written consents to the issue of this Offer Document
with the inclusion herein of their names and references thereto in the form and context in
which they respectively appear in this Offer Document and to act in such respective
capacities in relation to this Offer Document.
24. The Industry Research Consultant has given and has not withdrawn its written consent to the
issue of this Offer Document with the inclusion herein of, and all references to, (i) its name;
(ii) “Appendix L – Singapore and Malaysia Ophthalmology Market Overview”, which was
prepared for the purpose of incorporation in this Offer Document; and (iii) statements
attributable to it in the section entitled “Industry Overview – Prospects” of this Offer
Document, in the form and context in which they appear in this Offer Document and to act
in such capacity in relation to this Offer Document.
25. Each of the Solicitors to the Placement and Legal Adviser to our Company as to Singapore
Law, the Legal Adviser to our Company as to Malaysian Law, the Share Registrar, the
Receiving Banker and the Principal Bankers does not make, or purport to make, any
statement in this Offer Document or any statement upon which a statement in this Offer
Document is based and, to the maximum extent permitted by law, expressly disclaim and
take no responsibility for any liability to any person which is based on, or arises out of, the
statements, information or opinions in this Offer Document.
RESPONSIBILITY STATEMENT BY OUR DIRECTORS
26. This Offer Document has been seen and approved by our Directors and they collectively and
individually accept full responsibility for the accuracy of the information given in this Offer
Document and confirm after making all reasonable enquiries, that to the best of their
knowledge and belief, this Offer Document constitutes full and true disclosure of all material
facts about the 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
GENERAL AND STATUTORY INFORMATION
164
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
those sources and/or reproduced in this Offer Document in its proper form and context.
DOCUMENTS AVAILABLE FOR INSPECTION
27. The following documents or copies thereof may be inspected at our registered office during
normal business hours for a period of six (6) months from the date of registration of this Offer
Document by the SGX-ST acting as agent on behalf of the Authority:
(a) the Memorandum and Articles of Association of our Company;
(b) the Pro Forma Combined Financial Statements as set out in Appendix A to this Offer
Document;
(c) the Audited Combined Financial Statements as set out in Appendix B and Appendix C
to this Offer Document;
(d) the Unaudited Interim Condensed Combined Financial Statements as set out in
Appendix D and Appendix E to this Offer Document;
(e) the “Singapore and Malaysia Ophthalmology Market Overview” as set out in Appendix
L to this Offer Document;
(f) the material contracts referred to in the section entitled “General and Statutory
Information – Material Contracts” of this Offer Document;
(g) the letters of consent referred to in the section entitled “General and Statutory
Information – Consents” of this Offer Document;
(h) the Service Agreements referred to in the section entitled “Directors, Executive Officer
and Employees – Service Agreements” in this Offer Document;
(i) the audited financial statements of ISEC KL for FY2011 to FY2013;
(j) the audited financial statements of ISEC Penang for FY2012 to FY2013; and
(k) the audited financial statements of ISEC Ampang for FY2011 to FY2013.
GENERAL AND STATUTORY INFORMATION
165
This page has been intentionally left blank.
ISEC HEALTHCARE LTD.
and its subsidiaries
Unaudited Pro Forma Combined Financial Information of the Group
For the financial years ended 31 December 2011, 2012, 2013 and
for the financial period from 1 January 2014 to 31 March 2014
APPENDIX A – INDEPENDENT AUDITORS’ REPORT AND UNAUDITEDPRO FORMA COMBINED FINANCIAL INFORMATION FOR THE FINANCIAL
YEARS ENDED 31 DECEMBER 2011, 2012, 2013 AND FOR THE FINANCIALPERIOD FROM 1 JANUARY 2014 TO 31 MARCH 2014
A-1
INDEPENDENT AUDITORS’ REPORT ON THE PRO FORMA FINANCIAL INFORMATION OF
THE GROUP FOR THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012, 2013 AND
FOR THE FINANCIAL PERIOD FROM 1 JANUARY 2014 TO 31 MARCH 2014
14 October 2014
The Board of Directors
ISEC Healthcare Ltd.
101 Thomson Road
#09-04 United Square
Singapore 307591
Dear Sirs
Report on the compilation of pro forma financial information
We have completed our assurance engagement to report on the compilation of pro forma financial
information of ISEC Healthcare Ltd. (the “Company”) and its subsidiaries (the “Group”). The pro
forma financial information consists of the pro forma statements of financial position as at
31 December 2013 and 31 March 2014, the pro forma statements of comprehensive income and
pro forma statements of cash flows for the financial years ended 31 December 2011, 2012, 2013
and for the financial period from 1 January 2014 to 31 March 2014, and related notes as set out
on pages A-5 to A-51 of the Offer Document issued by the Company. The applicable criteria on the
basis of which the management has compiled the pro forma financial information are described in
Note 4.
The pro forma financial information has been compiled by the management to illustrate the impact
of the significant events (the “Significant Events”) set out in Note 5.1 on:
(i) The financial position of the Group as at 31 December 2013 and 31 March 2014 as if the
Significant Events had taken place on those dates, and;
(ii) The financial performance and cash flows of the Group for the financial years ended
31 December 2011, 2012, 2013 and for the financial period from 1 January 2014 to 31 March
2014 as if the Significant Events had taken place on 1 January 2011.
As part of this process, information about the Group’s financial position, financial performance and
cash flows has been extracted by management from the audited combined financial statements of
ISEC Healthcare Ltd. and its subsidiaries (“ISEC Group”) and ISEC Eye Pte. Ltd. (“ISEC Eye”) for
the financial years ended 31 December 2011, 2012, 2013 and unaudited interim condensed
combined financial statements for the financial period from 1 January 2014 to 31 March 2014, on
which audit reports and review reports have been published respectively.
Management responsibility for the unaudited pro forma financial information
The management is responsible for compiling the pro forma financial information on the basis of
the applicable criteria.
A-2
INDEPENDENT AUDITORS’ REPORT ON THE PRO FORMA FINANCIAL INFORMATION OF
THE GROUP FOR THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012, 2013 AND
FOR THE FINANCIAL PERIOD FROM 1 JANUARY 2014 TO 31 MARCH 2014 (Continued)
Report on the compilation of pro forma financial information (Continued)
Reporting accountants’ responsibilities
Our responsibility is to express an opinion about whether the pro forma financial information has
been compiled, in all material respects, by management on the basis of the applicable 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. This standard requires that the reporting accountant comply with ethical
requirements and plan and perform procedures to obtain reasonable assurance about whether
management has compiled, in all material respects, the pro forma financial information on the
basis of the applicable 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 pro forma financial
information, nor have we, in the course of this engagement, performed an audit or review of the
financial information used in compiling the pro forma financial information.
The purpose of pro forma financial information included in the Offer Document is solely to illustrate
the impact of the Significant Events on unadjusted financial information of the Group 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 31 December 2013 and 31 March 2014 would have been as
presented.
A reasonable assurance engagement to report on whether the pro forma financial information has
been compiled, in all material respects, on the basis of the applicable criteria involves performing
procedures to assess whether the applicable criteria used by the management in the compilation
of the pro forma financial information provide a reasonable basis for presenting the significant
effects directly attributable to the event or transaction, and to obtain sufficient appropriate
evidence about whether:
• The related pro forma adjustments give appropriate effect to those criteria; and
• The pro forma financial information reflects the proper application of those adjustments to the
unadjusted financial information.
The procedures selected depend on the reporting accountant’s judgement, having regard to the
reporting accountant’s understanding of the nature of the Company, the event or transaction in
respect of which the financial information has been compiled, and other relevant engagement
circumstances.
The engagement also involves evaluating the overall presentation of the pro forma financial
information.
We believe that the evidence we have obtained is sufficient and appropriate to provide a basis for
our opinion.
A-3
INDEPENDENT AUDITORS’ REPORT ON THE PRO FORMA FINANCIAL INFORMATION OF
THE GROUP FOR THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012, 2013 AND
FOR THE FINANCIAL PERIOD FROM 1 JANUARY 2014 TO 31 MARCH 2014 (Continued)
Report on the compilation of pro forma financial information (Continued)
Reporting accountants’ responsibilities (Continued)
Opinion
In our opinion:
(a) the pro forma financial information has been compiled:
(i) in a manner consistent with the accounting policies adopted by the ISEC Healthcare
Ltd. and its subsidiaries and ISEC Eye Pte. Ltd. in their latest audited financial
statements, which are in accordance with Singapore Financial Reporting Standards;
(ii) on the basis of the significant events stated in Note 5.1 of the pro forma financial
information; and
(b) each material adjustment made to the information used in the preparation of the pro forma
financial information is appropriate for the purpose of preparing such unaudited combined
financial information.
Restriction on Distribution and Use
This report is made solely to you as a body and for inclusion in the Offer Document of the
Company in connection with the initial public offering of ordinary shares of the Company on
Catalist, the sponsor-supervised listing platform of the Singapore Exchange Securities Trading
Limited.
BDO LLP
Public Accountants and
Chartered Accountants
Singapore
Leong Hon Mun Peter
Partner-in-charge
A-4
ISEC HEALTHCARE LTD.
AND ITS SUBSIDIARIES
UNAUDITED PRO FORMA COMBINED STATEMENTS OF FINANCIAL POSITION
AS AT 31 DECEMBER 2013 AND 31 MARCH 2014
Note 31.12.2013 31.3.2014
$ $
ASSETS
Non-current assets
Plant and equipment 6 4,855,194 4,744,352
Intangible assets 7 1,953,022 1,946,621
6,808,216 6,690,973
Current assets
Inventories 8 406,437 386,659
Trade and other receivables 9 2,164,096 2,091,064
Prepayments 154,916 232,150
Cash and cash equivalents 10 10,492,920 11,483,637
13,218,369 14,193,510
Total assets 20,026,585 20,884,483
EQUITY AND LIABILITIES
Equity
Share capital 11 8,928,000 8,928,100
Retained earnings 2,147,835 3,983,574
Foreign currency translation account 12 (182,422) (159,452)
Equity attributable to owners of the parent 10,893,413 12,752,222
Non-controlling interests (81,946) (185,019)
Total equity 10,811,467 12,567,203
Non-current liabilities
Deferred tax liabilities 13 977 977
Current liabilities
Trade and other payables 14 7,302,917 6,888,523
Bank overdrafts 15 747,038 708,191
Current income tax payable 1,164,186 719,589
9,214,141 8,316,303
Total liabilities 9,215,118 8,317,280
Total equity and liabilities 20,026,585 20,884,483
The accompanying notes form an integral part of these financial statements.
A-5
ISEC HEALTHCARE LTD.
AND ITS SUBSIDIARIES
UNAUDITED PRO FORMA COMBINED STATEMENTS OF COMPREHENSIVE INCOME
FOR THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012, 2013 AND
FOR THE FINANCIAL PERIOD FROM 1 JANUARY 2014 TO 31 MARCH 2014
Note
Yearended
31.12.2011
Yearended
31.12.2012
Yearended
31.12.2013
Periodended
31.3.2013
Periodended
31.3.2014
$ $ $ $ $
Revenue 16 18,622,372 20,613,812 22,342,305 5,058,727 5,857,198
Cost of sales (9,055,505) (9,927,396) (10,832,622) (2,712,044) (2,729,294)
Gross profit 9,566,867 10,686,416 11,509,683 2,346,683 3,127,904
Other items of income
Interest income 6,023 15,191 31,716 5,776 5,640
Other income 17 69,750 75,667 98,679 12,109 15,045
Other items of expense
Selling and distribution expenses (112,837) (96,609) (123,060) (29,671) (30,145)
Administrative expenses (3,615,548) (3,879,754) (4,227,819) (743,969) (903,835)
Other expenses – – – – (32,952)
Finance costs 18 (22,482) (2,188) (29,206) (26,425) (11,207)
Profit before income tax 19 5,891,773 6,798,723 7,259,993 1,564,503 2,170,450
Income tax expense 20 (1,231,858) (1,109,845) (1,598,734) (295,072) (387,232)
Profit for the financial year 4,659,915 5,688,878 5,661,259 1,269,431 1,783,218
Other comprehensive income:
Items that may be reclassifiedsubsequently to profit or loss
Foreign currency translationdifferences – foreign operations (35,232) (53,545) (104,491) 8,826 (210)
Reclassification arising from disposalof foreign subsidiary – – – – 33,166
Income tax relating to items thatmay be reclassified – – – – –
Other comprehensive income forthe financial year, net of tax (35,232) (53,545) (104,491) 8,826 32,956
Total comprehensive income forthe financial year 4,624,683 5,635,333 5,556,768 1,278,257 1,816,174
Profit attributable to:
Owners of the parent 4,709,406 5,767,090 6,031,773 1,350,605 1,835,739
Non-controlling interests (49,491) (78,212) (370,514) (81,174) (52,521)
4,659,915 5,688,878 5,661,259 1,269,431 1,783,218
Total comprehensive incomeattributable to:
Owners of the parent 4,676,721 5,715,380 5,935,901 1,358,328 1,858,709
Non-controlling interests (52,038) (80,047) (379,133) (80,071) (42,535)
4,624,683 5,635,333 5,556,768 1,278,257 1,816,174
Earnings per share 21
– pre-placement (in cents) 1.21 1.48 1.55 0.35 0.47
The accompanying notes form an integral part of these financial statements.
A-6
ISEC HEALTHCARE LTD.
AND ITS SUBSIDIARIES
UNAUDITED PRO FORMA COMBINED STATEMENTS OF CASH FLOWS
FOR THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012, 2013 AND
FOR THE FINANCIAL PERIOD FROM 1 JANUARY 2014 TO 31 MARCH 2014
Year ended
31.12.2011
Year ended
31.12.2012
Year ended
31.12.2013
Period
ended
31.3.2013
Period
ended
31.3.2014
$ $ $ $ $
Operating activities
Profit before income tax 5,891,773 6,798,723 7,259,993 1,564,503 2,170,450
Adjustments for:
Amortisation of intangible assets 55,998 16,882 28,247 7,062 6,433
Bad receivables written off 26,242 – 5,885 – –
Depreciation of plant and equipment 912,221 795,242 799,499 146,880 117,685
Gain on disposals of plant and
equipment – (9,990) – – (3,455)
Intangible assets written off – – 7,158 – –
Interest expenses 22,482 2,188 29,206 26,425 11,207
Interest income (6,023) (15,191) (31,716) (5,776) (5,640)
Loss on disposal of a subsidiary – – – – 32,952
Plant and equipment written off – – 140,454 76,226 –
Operating cash flows before working
capital changes 6,902,693 7,587,854 8,238,726 1,815,320 2,329,632
Working capital changes:
Inventories (36,819) (120,801) (33,627) 220,316 19,904
Trade and other receivables 133,634 (113,552) 931,828 (55,352) (129,602)
Prepayments (24,381) (66,408) (20,643) 43,921 (77,707)
Trade and other payables 926,307 489,715 391,829 398,714 (413,633)
Cash generated from operations 7,901,434 7,776,808 9,508,113 2,422,919 1,728,594
Income tax paid (1,419,412) (1,183,163) (1,196,435) (389,348) (831,940)
Net cash from operating activities 6,482,022 6,593,645 8,311,678 2,033,571 896,654
Investing activities
Interest received 6,023 15,191 31,716 5,776 5,640
Proceeds from disposals of intangible
assets – – 6,072 – –
Proceeds from disposals of plant and
equipment – 47,952 384,898 151,144 24,452
Proceed from disposal of a subsidiary – – – – 141,470
Purchase of intangible assets (53,607) (96,289) (8,600) – –
Purchase of plant and equipment (1,074,415) (1,094,653) (4,301,461) (1,273,448) (27,085)
Net cash (used in)/from investing
activities (1,121,999) (1,127,799) (3,887,375) (1,116,528) 144,477
A-7
ISEC HEALTHCARE LTD.
AND ITS SUBSIDIARIES
UNAUDITED PRO FORMA COMBINED STATEMENTS OF CASH FLOWS
FOR THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012, 2013 AND
FOR THE FINANCIAL PERIOD FROM 1 JANUARY 2014 TO 31 MARCH 2014 (Continued)
Year ended
31.12.2011
Year ended
31.12.2012
Year ended
31.12.2013
Period
ended
31.3.2013
Period
ended
31.3.2014
$ $ $ $ $
Financing activities
Dividends paid (3,931,271) (2,998,917) (6,426,148) – –
Interest paid (22,482) (2,188) (29,206) (26,425) (11,207)
Proceed from issuance of share capital – – 5,500,000 – 100
Redemption of preference shares (737,460) – (174,330) – –
Repayments of term loans (619,108) (90,338) – – –
Subscription of shares in subsidiaries by
non-controlling interests – 303,696 – – –
Net cash used in financing activities (5,310,321) (2,787,747) (1,129,684) (26,425) (11,107)
Net change in cash and cash
equivalents 49,702 2,678,099 3,294,619 890,618 1,030,024
Cash and cash equivalents at beginning
of financial year/period 3,854,486 3,865,941 6,510,721 6,510,721 9,745,882
Effect of exchange rate changes on
cash and cash equivalents (38,247) (33,319) (59,458) 5,330 (460)
Cash and cash equivalents at end of
financial year/period 3,865,941 6,510,721 9,745,882 7,406,669 10,775,446
The accompanying notes form an integral part of these financial statements.
A-8
The unaudited pro forma financial information should be read in conjunction with the Audited
Combined Financial Statements of ISEC Healthcare Ltd. and its subsidiaries and ISEC Eye Pte.
Ltd. for the financial years ended 31 December 2011, 2012 and 2013 and the unaudited interim
condensed combined financial statements for the financial period from 1 January 2014 to
31 March 2014.
1. Introduction
In connection with the proposed listing of the Company on the Catalist of Singapore
Exchange Securities Trading Limited, the Directors of ISEC Healthcare Ltd. (“ISEC” or the
“Company”) have prepared, for illustrative purposes, the pro forma financial information of
the Group in accordance with the basis set out in Note 3 below for inclusion in the offer
document (the “Offer Document”) dated 14 October 2014.
2. General corporate information
The Company was incorporated in the Republic of Singapore on 2 January 2014 under the
Singapore Companies Act, Chapter 50 (the “Act”) as a private limited liability company in the
name of ISEC Healthcare Pte. Ltd. In connection with its conversion into a public company
limited by shares, the Company changed its name from ISEC Healthcare Pte. Ltd. to ISEC
Healthcare Ltd. The Company’s registration number is 201400185H.
The address of the Company’s registered office and principal place of business is 101
Thomson Road #09-04 United Square Singapore 307591.
The principal activity of the Company is that of an investment holding company.
The principal activities of the subsidiaries are those of providing medical eye care services.
3. Chronological sequence of events leading to the creation of the Group (the
“Restructuring Exercise”)
i. Incorporation of the Company
The Company was incorporated in the Republic of Singapore on 2 January 2014 under
the Act as a private limited liability company. The principal activity is that of an
investment holding company. At the time of incorporation, the Company had an issued
and paid-up share capital of $100 comprising 100 shares held by Dr Lee Hung Ming and
Dr Wong Jun Shyan in equal proportions.
ISEC HEALTHCARE LTD.
AND ITS SUBSIDIARIES
NOTES TO THE UNAUDITED PRO FORMA COMBINED FINANCIAL INFORMATION
FOR THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012, 2013 AND
FOR THE FINANCIAL PERIOD FROM 1 JANUARY 2014 TO 31 MARCH 2014
A-9
3. Chronological sequence of events leading to the creation of the Group (the
“Restructuring Exercise”) (Continued)
ii. Incorporation of International Eye Specialist Centre Pte. Ltd. (“ISEC Singapore”)
ISEC Singapore was incorporated in the Republic of Singapore on 2 January 2014
under the Act as a private limited company. The principal activity of ISEC Singapore is
in specialised medical services (including day surgical centres). At the time of
incorporation, ISEC Singapore had an issued and paid-up share capital of $100
comprising 100 shares held by Dr Lee Hung Ming and Dr Wong Jun Shyan in equal
proportions. On 30 April 2014, the entire issued and paid-up share capital of ISEC
Singapore was transferred to the Company.
iii. Incorporation of ISEC Eye Pte. Ltd. (“ISEC Eye”)
ISEC Eye was incorporated in the Republic of Singapore on 15 July 2014 as a private
limited liability company for purposes of the acquisition described in step v below as
well as to be the party signing the Service Agreement (“PEC Service Agreement”)
entered into between ISEC Eye and Parkway Hospitals Singapore Pte. Ltd. (“PHS”),
relating to services to be provided by ISEC Eye to PHS in relation to Lee Hung Ming Eye
Centre at Gleneagles Hospital, Singapore. At the time of incorporation, ISEC Eye had
an issued and paid-up share capital of $100 comprising 100 shares held solely by Dr
Lee Hung Ming.
iv. Issuance of shares by the Company
The Company had issued shares to the following persons between July 2014 and
September 2014 as follows:
(a) 1,000,000 Shares to Loh Foong Han;
(b) 800,000 Shares to Dr Cordelia Chan;
(c) 250,000 Shares to Dr Lim Lee Hooi;
(d) 100,000 Shares to Dr Chua Leng Leng Jocelyn;
(e) 100,000 Shares to Macy Thong;
(f) 999,950 Shares to Dr Lee Hung Ming;
(g) 499,950 Shares to Dr Wong Jun Shyan;
(h) 1,000,000 Shares to Tan Kar Tek;
(i) 250,000 Shares to Oh Chin Beng;
ISEC HEALTHCARE LTD.
AND ITS SUBSIDIARIES
NOTES TO THE UNAUDITED PRO FORMA COMBINED FINANCIAL INFORMATION
FOR THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012, 2013 AND
FOR THE FINANCIAL PERIOD FROM 1 JANUARY 2014 TO 31 MARCH 2014 (Continued)
A-10
3. Chronological sequence of events leading to the creation of the Group (the
“Restructuring Exercise”) (Continued)
iv. Issuance of shares by the Company (Continued)
(j) 250,000 Shares to Chua Seng Yong;
(k) 150,000 Shares to Tony Tan Choon Keat; and
(l) 100,000 Shares to Dr Goh Siew Ching.
v. Acquisition of business by ISEC Eye
Pursuant to a service agreement dated 18 September 2009 between PHS and Lee HM
& Co Pte. Ltd. (“Lee HM & Co”), Lee HM & Co provided specialist medical
ophthalmology services to PHS. It was arranged that revenue from the service
agreement with Lee HM & Co for the various types of medical procedures were directed
by Lee HM & Co to be taken into account by Lee HM & Co, Singapore Lasik Hub Pte.
Ltd., Perfect Vision Eye Centre Pte. Ltd. and Lee Hung Ming Eye Centre Pte. Ltd.
(collectively, the “LHM Companies”, each wholly-owned by Dr Lee Hung Ming).
In order to streamline operations, the entire business of each of the LHM Companies
was acquired by ISEC Eye for purposes of the Restructuring Exercise (“Business
Acquisition”). The Business Acquisition allows for the track record of the LHM
companies whose businesses were conducted by Dr Lee Hung Ming to be taken into
account by the Group after the Restructuring Exercise. Pursuant to the signing of the
PEC Service Agreement between PHS and ISEC Eye, the businesses previously
undertaken by the LHM Companies is undertaken by ISEC Eye. It is a term of the
Business Acquisition that Dr Lee Hung Ming procures that the LHM Companies be
struck off so that the LHM Companies will not be able to compete with the Group.
vi. Acquisition of Subsidiaries
On 26 September 2014, the Company entered into a share swap agreement (“Share
Swap Agreement”) with the respective shareholders (“Vendors”) of ISEC Eye, and ISEC
Sdn. Bhd. (“Subsidiaries”) to acquire the entire issued and paid-up share capital of the
Subsidiaries at the following aggregate purchase consideration:
a. $3,010,000 for ISEC Eye;
b. $3,990,000 for ISEC Sdn. Bhd.
ISEC HEALTHCARE LTD.
AND ITS SUBSIDIARIES
NOTES TO THE UNAUDITED PRO FORMA COMBINED FINANCIAL INFORMATION
FOR THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012, 2013 AND
FOR THE FINANCIAL PERIOD FROM 1 JANUARY 2014 TO 31 MARCH 2014 (Continued)
A-11
3. Chronological sequence of events leading to the creation of the Group (the
“Restructuring Exercise”) (Continued)
vi. Acquisition of Subsidiaries (Continued)
Pursuant to the Share Swap Agreement, the purchase considerations shall be satisfied
by the allotment and issuance of Shares (“Consideration Shares”) as follows:
a. 21,500,000 Shares to Dr Lee Hung Ming;
b. 5,511,415 Shares to Dr Wong Jun Shyan;
c. 3,552,240 Shares to Oh Chin Beng;
d. 2,604,985 Shares to Irene Kang;
e. 2,604,985 Shares to Tony Tan Choon Keat;
f. 2,490,957 Shares to Dr Choong Yee Fong;
g. 2,306,077 Shares to Dr Michael Law Sie Haur;
h. 2,289,035 Shares to Dr Fang Seng Kheong;
i. 1,604,985 Shares to Loh Foong Han;
j. 1,204,382 Shares to Dr Lim Kian Seng;
k. 1,098,903 Shares to Dr Barkeh Hanim Binti Jumaat;
l. 1,051,308 Shares to Dr Kok Howe Sen;
m. 1,000,000 Shares to Dr Lim Cheok Peng;
n. 473,670 Shares to Chua Seng Yong;
o. 287,309 Shares to Dr Ronald Arun Das;
p. 199,016 Shares to Dr Cheah May Hong;
q. 124,374 Shares to Dr Kamala Devi A/P S.D. Lingam; and
r. 96,359 Shares to Dr Then Kong Yong.
ISEC HEALTHCARE LTD.
AND ITS SUBSIDIARIES
NOTES TO THE UNAUDITED PRO FORMA COMBINED FINANCIAL INFORMATION
FOR THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012, 2013 AND
FOR THE FINANCIAL PERIOD FROM 1 JANUARY 2014 TO 31 MARCH 2014 (Continued)
A-12
4. Basis of preparation
The unaudited pro forma combined financial information of the Group for the financial years
ended 31 December 2011, 2012, 2013 and for the financial period from 1 January 2014 to
31 March 2014 were prepared based on audited combined financial statements and
unaudited interim condensed combined financial statements of ISEC Healthcare Ltd. and its
subsidiaries and ISEC Eye Pte. Ltd., taking into consideration of adjustments as set out in
Note 5.2.
The unaudited pro forma combined financial information of the Group for the financial years
ended 31 December 2011, 2012 and 2013 and for the financial period from 1 January 2014
to 31 March 2014 have been prepared in a manner consistent with the accounting policies
of the ISEC Group and ISEC Eye which are in accordance with Singapore Financial
Reporting Standards.
The unaudited pro forma combined financial information of the Group has been prepared for
illustrative purposes only and is based on certain assumptions after making certain
adjustments as set out in Note 5.1 to show what:
(i) The financial position of the Group as at 31 December 2013 and 31 March 2014 as if
the transactions had occurred on those dates; and
(ii) Financial performance and cash flows of the Group for the financial years ended 31
December 2011, 2012, 2013 and for the financial period from 1 January 2014 to 31
March 2014 as if the transactions had occurred on 1 January 2011.
The unaudited pro forma combined financial information of the Group is not necessarily
indicative of the results of operations, financial position and cash flows that would have been
attained by the Group had the Group actually existed earlier. Therefore, the unaudited pro
forma combined financial information of the Group may not give a true and fair picture of the
Group’s actual results of operations, financial position and cash flows.
ISEC HEALTHCARE LTD.
AND ITS SUBSIDIARIES
NOTES TO THE UNAUDITED PRO FORMA COMBINED FINANCIAL INFORMATION
FOR THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012, 2013 AND
FOR THE FINANCIAL PERIOD FROM 1 JANUARY 2014 TO 31 MARCH 2014 (Continued)
A-13
4. Basis of preparation (Continued)
4.1 Details of subsidiaries
As at the date of this report after the Restructuring Exercise, the Company has the
following subsidiaries:
Effective equity interest
Name of company
Country of
incorporation Principal activities 31.12.2013 31.3.2014
% %
Held by
the Company
ISEC Sdn. Bhd. Malaysia Medical eye care
services
100 100
ISEC Eye Pte. Ltd. Singapore Medical eye care
services
– 100
International Eye
Specialist Centre
Pte. Ltd.
Singapore Medical eye care
services
– 100
Held by
ISEC Sdn. Bhd.
ISEC (Penang)
Sdn. Bhd.
Malaysia Medical eye care
services
66 66
5. Statement of adjustments
5.1 Significant events
Save for the following significant events (the “Significant Events”), the Directors of the
Company, as at the date of this report, are not aware of any significant transaction
which have occurred since 1 January 2014 and any significant changes made to the
capital structure of the Company subsequent to 31 December 2013:–
i. Acquisition of ISEC Eye Pte. Ltd. (“ISEC Eye”) by ISEC Healthcare Ltd.
subsequent to acquisition by ISEC Eye of the businesses from LHM Companies,
which was assumed to have occurred on 1 January 2011;
ii. Increase in capital injection by issuance of 5,500,000 shares with consideration of
$5,500,000 which was assumed to have occurred on 1 January 2013; and
iii. Increase in capital expenditure for plant and equipment amounting to $2,379,006
for opening of new clinic in Mount Elizabeth Specialist Centre, which was assumed
to have occurred place on 1 January 2013.
ISEC HEALTHCARE LTD.
AND ITS SUBSIDIARIES
NOTES TO THE UNAUDITED PRO FORMA COMBINED FINANCIAL INFORMATION
FOR THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012, 2013 AND
FOR THE FINANCIAL PERIOD FROM 1 JANUARY 2014 TO 31 MARCH 2014 (Continued)
A-14
5. Statement of adjustments (Continued)
5.2 Pro forma adjustments
The following adjustments were made assuming transactions occurred on 1 January
2011:
i. inclusion in pro forma financial information for the financial years ended
31 December 2011, 2012, 2013 and for the financial period from 1 January 2014
to 31 March 2014, where ISEC Eye enter into agreement with shareholder of Lee
HM & Co Pte. Ltd., Singapore Lasik Hub Pte. Ltd., Lee Hung Ming Eye Pte. Ltd.
and Perfect Vision Pte. Ltd. (collectively, the “LHM Group entities”) to acquire the
entire business of which all assets and liabilities were taken over by ISEC Eye
since 1 January 2011; and
ii. inclusion in pro forma financial information for the financial years ended
31 December 2011, 2012, 2013 and for the financial period from 1 January 2014
to 31 March 2014, where ISEC enter into share swap agreement with a
shareholder of ISEC Eye to acquire the entire issued and paid up share capital of
ISEC Eye by the issuance of 3,010,000 shares of $1 each credited as fully paid by
the ISEC to shareholder of ISEC Eye.
The following adjustments were made assuming transactions occurred on 1 January
2013:
iii. inclusion in pro forma financial information for the financial year ended 31
December 2013 and financial period from 1 January 2014 to 31 March 2014, the
Company issued 5,500,000 for a cash consideration of $5,500,000; and
iv. inclusion of pro forma financial information for the financial year ended 31
December 2013 and financial period from 1 January 2014 to 31 March 2014,
where the Group acquired plant and equipment amounting to $2,379,006 for
opening of new clinic.
ISEC HEALTHCARE LTD.
AND ITS SUBSIDIARIES
NOTES TO THE UNAUDITED PRO FORMA COMBINED FINANCIAL INFORMATION
FOR THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012, 2013 AND
FOR THE FINANCIAL PERIOD FROM 1 JANUARY 2014 TO 31 MARCH 2014 (Continued)
A-15
5. Statement of adjustments (Continued)
5.3 Statement of adjustments for the unaudited pro forma combined statement of
financial position
31.12.2013 Audited
Pro forma
adjustments
Note 5.2
Unaudited
pro forma
$ $ $
ASSETS
Non-current assets
Plant and equipment 2,475,402 2,379,792 (i), (iv) 4,855,194
Intangible assets 96,882 1,856,140 (ii) 1,953,022
2,572,284 6,808,216
Current assets
Inventories 406,437 406,437
Trade and other receivables 1,217,460 946,636 (i) 2,164,096
Prepayments 154,916 154,916
Cash and cash equivalents 2,167,715 8,325,105 (i), (iii) 10,492,920
3,946,528 13,218,369
Total assets 6,518,812 20,026,585
EQUITY AND LIABILITIES
Equity
Share capital 418,000 8,510,000 (ii), (iii) 8,928,000
Retained earnings 2,147,835 2,147,835
Foreign currency translation
account (182,422) (182,422)
Equity attributable to owners
of the parent 2,383,413 10,893,413
Non-controlling interests (81,946) (81,946)
Total equity 2,301,467 10,811,467
Non-current liabilities
Deferred tax liabilities – 977 (i) 977
Current liabilities
Trade and other payables 2,958,873 4,344,044 (i), (iv) 7,302,917
Bank borrowings 747,038 747,038
Current income tax payable 511,434 652,752 (i) 1,164,186
4,217,345 9,214,141
Total liabilities 4,217,345 9,215,118
Total equity and liabilities 6,518,812 20,026,585
ISEC HEALTHCARE LTD.
AND ITS SUBSIDIARIES
NOTES TO THE UNAUDITED PRO FORMA COMBINED FINANCIAL INFORMATION
FOR THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012, 2013 AND
FOR THE FINANCIAL PERIOD FROM 1 JANUARY 2014 TO 31 MARCH 2014 (Continued)
A-16
5. Statement of adjustments (Continued)
5.3 Statement of adjustments for the unaudited pro forma combined statement of
financial position (Continued)
31.3.2014 Audited
Pro forma
adjustments
Note 5.2
Unaudited
pro forma
$ $ $
ASSETS
Non-current assets
Plant and equipment 2,364,725 2,379,627 (i), (iv) 4,744,352
Intangible assets 90,481 1,856,140 (ii) 1,946,621
2,455,206 6,690,973
Current assets
Inventories 386,659 386,659
Trade and other receivables 1,034,458 1,056,606 (i) 2,091,064
Prepayments 232,150 232,150
Cash and cash equivalents 2,781,154 8,702,483 (i), (iii) 11,483,637
4,434,421 14,193,510
Total assets 6,889,627 20,884,483
EQUITY AND LIABILITIES
Equity
Share capital 418,100 8,510,000 (ii), (iii) 8,928,100
Retained earnings 2,999,508 984,066 (i) 3,983,574
Foreign currency translation
account (159,452) (159,452)
Equity attributable to owners
of the parent 3,258,156 12,752,222
Non-controlling interests (185,019) (185,019)
Total equity 3,073,137 12,567,203
Non-current liabilities
Deferred tax liabilities – 977 (i) 977
Current liabilities
Trade and other payables 2,575,456 4,313,067 (i), (iv) 6,888,523
Bank borrowings 708,191 708,191
Current income tax payable 532,843 186,746 (i) 719,589
3,816,490 8,316,303
Total liabilities 3,816,490 8,317,280
Total equity and liabilities 6,889,627 20,884,483
ISEC HEALTHCARE LTD.
AND ITS SUBSIDIARIES
NOTES TO THE UNAUDITED PRO FORMA COMBINED FINANCIAL INFORMATION
FOR THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012, 2013 AND
FOR THE FINANCIAL PERIOD FROM 1 JANUARY 2014 TO 31 MARCH 2014 (Continued)
A-17
5. Statement of adjustments (Continued)
5.4 Statement of adjustments for the unaudited pro forma combined statement of
comprehensive income
Year ended 31.12.2011 Audited
Pro forma
adjustments
Note 5.2
Unaudited
pro forma
$ $ $
Revenue 13,844,056 4,778,316 (i) 18,622,372
Cost of sales (8,911,356) (144,149) (i) (9,055,505)
Gross profit 4,932,700 9,566,867
Other items of income
Interest income 6,023 6,023
Other income 59,750 10,000 (i) 69,750
Other items of expense
Selling and distribution expenses (112,837) (112,837)
Administrative expenses (2,809,738) (3,615,548)
Finance costs (22,482) (22,482)
Profit before income tax 2,053,416 5,891,773
Income tax expense (661,784) (570,074) (i) (1,231,858)
Profit for the financial year 1,391,632 4,659,915
Other comprehensive income:
Items that may be reclassified
subsequently to profit or loss
Foreign currency translation
differences – foreign operations (35,232) (35,232)
Income tax relating to items that
may be reclassified – –
Other comprehensive income for
the financial year, net of tax (35,232) (35,232)
Total comprehensive income for
the financial year 1,356,400 4,624,683
Profit attributable to:
Owners of the parent 1,441,123 3,268,283 (i) 4,709,406
Non-controlling interests (49,491) (49,491)
1,391,632 4,659,915
Total comprehensive income
attributable to:
Owners of the parent 1,408,438 3,268,283 (i) 4,676,721
Non-controlling interests (52,038) (52,038)
1,356,400 4,624,683
ISEC HEALTHCARE LTD.
AND ITS SUBSIDIARIES
NOTES TO THE UNAUDITED PRO FORMA COMBINED FINANCIAL INFORMATION
FOR THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012, 2013 AND
FOR THE FINANCIAL PERIOD FROM 1 JANUARY 2014 TO 31 MARCH 2014 (Continued)
A-18
5. Statement of adjustments (Continued)
5.4 Statement of adjustments for the unaudited pro forma combined statement of
comprehensive income (Continued)
Year ended 31.12.2012 Audited
Pro forma
adjustments
Note 5.2
Unaudited
pro forma
$ $ $
Revenue 15,089,287 5,524,525 (i) 20,613,812
Cost of sales (9,732,718) (194,678) (i) (9,927,396)
Gross profit 5,356,569 10,686,416
Other items of income
Interest income 15,191 15,191
Other income 69,522 6,145 (i) 75,667
Other items of expense
Selling and distribution expenses (96,609) (96,609)
Administrative expenses (3,086,298) (793,456) (i) (3,879,754)
Finance costs (2,188) (2,188)
Profit before income tax 2,256,187 6,798,723
Income tax expense (496,722) (613,123) (i) (1,109,845)
Profit for the financial year 1,759,465 5,688,878
Other comprehensive income:
Items that may be reclassified
subsequently to profit or loss
Foreign currency translation
differences – foreign operations (53,545) (53,545)
Income tax relating to items that
may be reclassified – –
Other comprehensive income for
the financial year, net of tax (53,545) (53,545)
Total comprehensive income for
the financial year 1,705,920 5,635,333
Profit attributable to:
Owners of the parent 1,837,677 3,929,413 (i) 5,767,090
Non-controlling interests (78,212) (78,212)
1,759,465 5,688,878
Total comprehensive income
attributable to:
Owners of the parent 1,785,967 3,929,413 (i) 5,715,380
Non-controlling interests (80,047) (80,047)
1,705,920 5,635,333
ISEC HEALTHCARE LTD.
AND ITS SUBSIDIARIES
NOTES TO THE UNAUDITED PRO FORMA COMBINED FINANCIAL INFORMATION
FOR THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012, 2013 AND
FOR THE FINANCIAL PERIOD FROM 1 JANUARY 2014 TO 31 MARCH 2014 (Continued)
A-19
5. Statement of adjustments (Continued)
5.4 Statement of adjustments for the unaudited pro forma combined statement of
comprehensive income (Continued)
Year ended 31.12.2013 Audited
Pro forma
adjustments
Note 5.2
Unaudited
pro forma
$ $ $
Revenue 17,482,585 4,859,720 (i) 22,342,305
Cost of sales (10,666,542) (166,080) (i) (10,832,622)
Gross profit (6,816,043) 11,509,683
Other items of income
Interest income 31,716 31,716
Other income 62,273 36,406 (i) 98,679
Other items of expense
Selling and distribution expenses (123,060) (123,060)
Administrative expenses (3,458,415) (769,404) (i) (4,227,819)
Finance costs (29,206) (29,206)
Profit before income tax 3,299,351 7,259,993
Income tax expense (986,274) (612,460) (i) (1,598,734)
Profit for the financial year 2,313,077 5,661,259
Other comprehensive income:
Items that may be reclassified
subsequently to profit or loss
Foreign currency translation
differences – foreign operations (104,491) (104,491)
Income tax relating to items that
may be reclassified – –
Other comprehensive income for
the financial year, net of tax (104,491) (104,491)
Total comprehensive income for
the financial year 2,208,586 5,556,768
Profit attributable to:
Owners of the parent 2,683,591 3,348,182 (i) 6,031,773
Non-controlling interests (370,514) (370,514)
2,313,077 5,661,259
Total comprehensive income
attributable to:
Owners of the parent 2,587,719 3,348,182 (i) 5,935,901
Non-controlling interests (379,133) (379,133)
2,208,586 5,556,768
ISEC HEALTHCARE LTD.
AND ITS SUBSIDIARIES
NOTES TO THE UNAUDITED PRO FORMA COMBINED FINANCIAL INFORMATION
FOR THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012, 2013 AND
FOR THE FINANCIAL PERIOD FROM 1 JANUARY 2014 TO 31 MARCH 2014 (Continued)
A-20
5. Statement of adjustments (Continued)
5.4 Statement of adjustments for the unaudited pro forma combined statement of
comprehensive income (Continued)
Period ended 31.3.2014 Unaudited
Pro forma
adjustments
Note 5.2
Unaudited
pro forma
$ $ $
Revenue 4,585,090 1,272,108 (i) 5,857,198
Cost of sales (2,690,799) (38,495) (i) (2,729,294)
Gross profit 1,894,291 3,127,904
Other items of income
Interest income 5,640 5,640
Other income 15,045 15,045
Other items of expense
Selling and distribution expenses (30,145) (30,145)
Administrative expenses (746,091) (157,744) (i) (903,835)
Other expenses (32,952) (32,952)
Finance costs (11,207) (11,207)
Profit before income tax 1,094,581 2,170,450
Income tax expense (295,429) (91,803) (i) (387,232)
Profit for the financial year 799,152 1,783,218
Other comprehensive income:
Items that may be reclassified
subsequently to profit or loss
Foreign currency translation
differences – foreign operations (210) (210)
Reclassification arising from
disposal of foreign subsidiary 33,166 33,166
Income tax relating to items
that may be reclassified – –
Other comprehensive income for
the financial year, net of tax 32,956 32,956
Total comprehensive income for
the financial year 832,108 1,816,174
Profit attributable to:
Owners of the parent 851,673 984,066 (i) 1,835,739
Non-controlling interests (52,521) (52,521)
799,152 1,783,218
Total comprehensive income
attributable to:
Owners of the parent 874,643 984,066 (i) 1,858,709
Non-controlling interests (42,535) (42,535)
832,108 1,816,174
ISEC HEALTHCARE LTD.
AND ITS SUBSIDIARIES
NOTES TO THE UNAUDITED PRO FORMA COMBINED FINANCIAL INFORMATION
FOR THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012, 2013 AND
FOR THE FINANCIAL PERIOD FROM 1 JANUARY 2014 TO 31 MARCH 2014 (Continued)
A-21
5. Statement of adjustments (Continued)
5.5 Statement of adjustments for the unaudited pro forma combined statement of
cash flows
Year ended 31.12.2011 Audited
Pro forma
adjustments
Note 5.2
Unaudited
pro forma
$ $ $
Operating activities
Profit before income tax 2,053,416 3,838,357 (i) 5,891,773
Adjustments for:
Amortisation of intangible assets 55,998 55,998
Bad receivables written off 4,990 21,252 (i) 26,242
Depreciation of plant and
equipment 896,266 15,955 (i) 912,221
Interest expenses 22,482 22,482
Interest income (6,023) (6,023)
Operating cash flows before
working capital changes 3,027,129 6,902,693
Working capital changes:
Inventories (36,819) (36,819)
Trade and other receivables (266,183) 399,817 (i) 133,634
Prepayments (24,381) (24,381)
Trade and other payables 761,605 164,702 (i) 926,307
Cash generated from operations 3,461,351 7,901,434
Income tax paid (692,028) (727,384) (i) (1,419,412)
Net cash from operating activities 2,769,323 6,482,022
ISEC HEALTHCARE LTD.
AND ITS SUBSIDIARIES
NOTES TO THE UNAUDITED PRO FORMA COMBINED FINANCIAL INFORMATION
FOR THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012, 2013 AND
FOR THE FINANCIAL PERIOD FROM 1 JANUARY 2014 TO 31 MARCH 2014 (Continued)
A-22
5. Statement of adjustments (Continued)
5.5 Statement of adjustments for the unaudited pro forma combined statement of
cash flows (Continued)
Year ended 31.12.2011
(Continued) Audited
Pro forma
adjustments
Note 5.2
Unaudited
pro forma
$ $ $
Investing activities
Interest received 6,023 6,023
Purchase of intangible assets (53,607) (53,607)
Purchase of plant and equipment (1,069,962) (4,453) (i) (1,074,415)
Net cash used in investing activities (1,117,546) (1,121,999)
Financing activities
Dividends paid (951,271) (2,980,000) (i) (3,931,271)
Interest paid (22,482) (22,482)
Redemption of preference shares (737,460) (737,460)
Repayments of term loans (619,108) (619,108)
Net cash used in financing
activities (2,330,321) (5,310,321)
Net change in cash and cash
equivalents (678,544) 728,246 (i) 49,702
Cash and cash equivalents at
beginning of financial year 2,090,399 1,764,087 (i) 3,854,486
Effect of exchange rate changes on
cash and cash equivalents (38,247) (38,247)
Cash and cash equivalents at end
of financial year 1,373,608 3,865,941
ISEC HEALTHCARE LTD.
AND ITS SUBSIDIARIES
NOTES TO THE UNAUDITED PRO FORMA COMBINED FINANCIAL INFORMATION
FOR THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012, 2013 AND
FOR THE FINANCIAL PERIOD FROM 1 JANUARY 2014 TO 31 MARCH 2014 (Continued)
A-23
5. Statement of adjustments (Continued)
5.5 Statement of adjustments for the unaudited pro forma combined statement of
cash flows (Continued)
Year ended 31.12.2012 Audited
Pro forma
adjustments
Note 5.2
Unaudited
pro forma
$ $ $
Operating activities
Profit before income tax 2,256,187 4,542,536 (i) 6,798,723
Adjustments for:
Amortisation of intangible assets 16,882 16,882
Depreciation of plant and
equipment 780,910 14,332 (i) 795,242
Gain on disposals of plant and
equipment (9,990) (9,990)
Interest expenses 2,188 2,188
Interest income (15,191) (15,191)
Operating cash flows before
working capital changes 3,030,986 7,587,854
Working capital changes:
Inventories (120,801) (120,801)
Trade and other receivables 17,030 (130,582) (i) (113,552)
Prepayments (66,408) (66,408)
Trade and other payables 151,890 337,825 (i) 489,715
Cash generated from operations 3,012,697 7,776,808
Income tax paid (573,264) (609,899) (i) (1,183,163)
Net cash from operating activities 2,439,433 6,593,645
ISEC HEALTHCARE LTD.
AND ITS SUBSIDIARIES
NOTES TO THE UNAUDITED PRO FORMA COMBINED FINANCIAL INFORMATION
FOR THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012, 2013 AND
FOR THE FINANCIAL PERIOD FROM 1 JANUARY 2014 TO 31 MARCH 2014 (Continued)
A-24
5. Statement of adjustments (Continued)
5.5 Statement of adjustments for the unaudited pro forma combined statement of
cash flows (Continued)
Year ended 31.12.2012
(Continued) Audited
Pro forma
adjustments
Note 5.2
Unaudited
pro forma
$ $ $
Investing activities
Interest received 15,191 15,191
Proceeds from disposals of plant
and equipment 47,952 47,952
Purchase of intangible assets (96,289) (96,289)
Purchase of plant and equipment (1,094,653) (1,094,653)
Net cash used in investing activities (1,127,799) (1,127,799)
Financing activities
Dividends paid (1,118,880) (1,880,037) (i) (2,998,917)
Interest paid (2,188) (2,188)
Repayments of term loans (90,338) (90,338)
Subscription of shares in
subsidiaries by non-controlling
interests 303,696 303,696
Net cash used in financing
activities (907,710) (2,787,747)
Net change in cash and cash
equivalents 403,924 2,274,175 (i) 2,678,099
Cash and cash equivalents at
beginning of financial year 1,373,608 2,492,333 (i) 3,865,941
Effect of exchange rate changes on
cash and cash equivalents (33,319) (33,319)
Cash and cash equivalents at end
of financial year 1,744,213 6,510,721
ISEC HEALTHCARE LTD.
AND ITS SUBSIDIARIES
NOTES TO THE UNAUDITED PRO FORMA COMBINED FINANCIAL INFORMATION
FOR THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012, 2013 AND
FOR THE FINANCIAL PERIOD FROM 1 JANUARY 2014 TO 31 MARCH 2014 (Continued)
A-25
5. Statement of adjustments (Continued)
5.5 Statement of adjustments for the unaudited pro forma combined statement of
cash flows (Continued)
Year ended 31.12.2013 Audited
Pro forma
adjustments
Note 5.2
Unaudited
pro forma
$ $ $
Operating activities
Profit before income tax 3,299,351 3,960,642 (i) 7,259,993
Adjustments for:
Amortisation of intangible assets 28,247 28,247
Bad receivables written off – 5,885 (i) 5,885
Depreciation of plant and
equipment 794,536 4,963 (i) 799,499
Intangible assets written off 7,158 7,158
Interest expenses 29,206 29,206
Interest income (31,716) (31,716)
Plant and equipment written off 140,454 140,454
Operating cash flows before
working capital changes 4,267,236 8,238,726
Working capital changes:
Inventories (33,627) (33,627)
Trade and other receivables (538,715) 1,470,543 (i) 931,828
Prepayments (20,643) (20,643)
Trade and other payables (480,378) 872,207 (i), (iv) 391,829
Cash generated from operations 3,193,873 9,508,113
Income tax paid (556,016) (640,419) (i) (1,196,435)
Net cash from operating activities 2,637,857 8,311,678
ISEC HEALTHCARE LTD.
AND ITS SUBSIDIARIES
NOTES TO THE UNAUDITED PRO FORMA COMBINED FINANCIAL INFORMATION
FOR THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012, 2013 AND
FOR THE FINANCIAL PERIOD FROM 1 JANUARY 2014 TO 31 MARCH 2014 (Continued)
A-26
5. Statement of adjustments (Continued)
5.5 Statement of adjustments for the unaudited pro forma combined statement of
cash flows (Continued)
Year ended 31.12.2013
(Continued) Audited
Pro forma
adjustments
Note 5.2
Unaudited
pro forma
$ $ $
Investing activities
Interest received 31,716 31,716
Proceeds from disposals of
intangible assets 6,072 6,072
Proceeds from disposals of plant
and equipment 384,898 384,898
Purchase of intangible assets (8,600) (8,600)
Purchase of plant and equipment (1,922,455) (2,379,006) (iv) (4,301,461)
Net cash used in investing activities (1,508,369) (3,887,375)
Financing activities
Dividends paid (1,190,030) (5,236,118) (i) (6,426,148)
Interest paid (29,206) (29,206)
Proceed from issuance of share
capital – 5,500,000 (iii) 5,500,000
Redemption of preference shares (174,330) (174,330)
Net cash used in financing
activities (1,393,566) (1,129,684)
Net change in cash and cash
equivalents (264,078) 3,558,697
(i), (iii),
(iv) 3,294,619
Cash and cash equivalents at
beginning of financial year 1,744,213 4,766,508 (i) 6,510,721
Effect of exchange rate changes on
cash and cash equivalents (59,458) (59,458)
Cash and cash equivalents at end
of financial year 1,420,677 9,745,882
ISEC HEALTHCARE LTD.
AND ITS SUBSIDIARIES
NOTES TO THE UNAUDITED PRO FORMA COMBINED FINANCIAL INFORMATION
FOR THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012, 2013 AND
FOR THE FINANCIAL PERIOD FROM 1 JANUARY 2014 TO 31 MARCH 2014 (Continued)
A-27
5. Statement of adjustments (Continued)
5.5 Statement of adjustments for the unaudited pro forma combined statement of
cash flows (Continued)
Period ended 31.3.2014 Unaudited
Pro forma
adjustments
Note 5.2
Unaudited
pro forma
$ $ $
Operating activities
Profit before income tax 1,094,581 1,075,869 (i) 2,170,450
Adjustments for:
Amortisation of intangible assets 6,433 6,433
Depreciation of plant and
equipment 117,520 165 (i) 117,685
Gain on disposals of plant and
equipment (3,455) (3,455)
Interest expenses 11,207 11,207
Interest income (5,640) (5,640)
Loss on disposal of a subsidiary 32,952 32,952
Operating cash flows before
working capital changes 1,253,598 2,329,632
Working capital changes:
Inventories 19,904 19,904
Trade and other receivables (19,632) (109,970) (i) (129,602)
Prepayments (77,707) (77,707)
Trade and other payables (382,656) (30,977) (i) (413,633)
Cash generated from operations 793,507 1,728,594
Income tax paid (274,131) (557,809) (i) (831,940)
Net cash from operating activities 519,376 896,654
ISEC HEALTHCARE LTD.
AND ITS SUBSIDIARIES
NOTES TO THE UNAUDITED PRO FORMA COMBINED FINANCIAL INFORMATION
FOR THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012, 2013 AND
FOR THE FINANCIAL PERIOD FROM 1 JANUARY 2014 TO 31 MARCH 2014 (Continued)
A-28
5. Statement of adjustments (Continued)
5.5 Statement of adjustments for the unaudited pro forma combined statement of
cash flows (Continued)
Period ended 31.3.2014
(Continued) Unaudited
Pro forma
adjustments
Note 5.2
Unaudited
pro forma
$ $ $
Investing activities
Interest received 5,640 5,640
Proceed from disposal of a
subsidiary 141,470 141,470
Proceeds from disposals of plant
and equipment 24,452 24,452
Purchase of plant and equipment (27,085) (27,085)
Net cash from investing activities 144,477 144,477
Financing activities
Interest paid (11,207) (11,207)
Proceed from issuance of
share capital 100 100
Net cash used in financing
activities (11,107) (11,107)
Net change in cash and cash
equivalents 652,746 377,278 (i) 1,030,024
Cash and cash equivalents at
beginning of financial period 1,420,677 8,325,105 (i), (iii) 9,745,882
Effect of exchange rate changes
on cash and cash equivalents (460) (460)
Cash and cash equivalents at
end of financial period 2,072,963 10,775,446
ISEC HEALTHCARE LTD.
AND ITS SUBSIDIARIES
NOTES TO THE UNAUDITED PRO FORMA COMBINED FINANCIAL INFORMATION
FOR THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012, 2013 AND
FOR THE FINANCIAL PERIOD FROM 1 JANUARY 2014 TO 31 MARCH 2014 (Continued)
A-29
6. Plant and equipment
Computer
Electrical
equipment
Motor
vehicles
Medical
equipment
Office
equipment,
furniture
and fittings Renovation Total
$ $ $ $ $ $ $
31.12.2013
Cost
Balance at 1.1.2013 207,238 300,702 69,550 4,041,992 209,127 1,139,274 5,967,883
Additions 149,557 185,172 – 2,544,134 326,089 1,096,509 4,301,461
Disposals (20,476) – – (760,594) (17,922) – (798,992)
Written off (18,518) (8,910) – (19,163) (25,211) (201,845) (273,647)
Currency re-alignment (6,197) (11,281) (2,420) (141,203) (7,512) (40,645) (209,258)
Balance at 31.12.2013 311,604 465,683 67,130 5,665,166 484,571 1,993,293 8,987,447
Accumulated
depreciation
Balance at 1.1.2013 132,947 2,637 13,910 2,866,484 144,166 858,741 4,018,885
Depreciation for the
financial year 26,806 87,383 13,488 512,810 33,797 125,215 799,499
Disposals (10,579) – – (394,958) (8,557) – (414,094)
Written off (9,339) (4,190) – (10,484) (11,981) (97,199) (133,193)
Currency re-alignment (3,751) (478) (547) (98,981) (5,078) (30,009) (138,844)
Balance at 31.12.2013 136,084 85,352 26,851 2,874,871 152,347 856,748 4,132,253
Carrying amount
Balance at 31.12.2013 175,520 380,331 40,279 2,790,295 332,224 1,136,545 4,855,194
ISEC HEALTHCARE LTD.
AND ITS SUBSIDIARIES
NOTES TO THE UNAUDITED PRO FORMA COMBINED FINANCIAL INFORMATION
FOR THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012, 2013 AND
FOR THE FINANCIAL PERIOD FROM 1 JANUARY 2014 TO 31 MARCH 2014 (Continued)
A-30
6. Plant and equipment (Continued)
Computer
Electrical
equipment
Motor
vehicles
Medical
equipment
Office
equipment,
furniture
and fittings Renovation Total
$ $ $ $ $ $ $
31.3.2014
Cost
Balance at 1.1.2014 311,604 465,683 67,130 5,665,166 484,571 1,993,293 8,987,447
Additions – – – 15,603 8,409 3,073 27,085
Disposals – – – (36,849) (293) – (37,142)
Currency re-alignment 45 123 17 1,129 57 338 1,709
Balance at 31.3.2014 311,649 465,806 67,147 5,645,049 492,744 1,996,704 8,979,099
Accumulated
depreciation
Balance at 1.1.2014 136,084 85,352 26,851 2,874,871 152,347 856,748 4,132,253
Depreciation for the
financial period 4,966 11,656 3,360 78,075 5,649 13,979 117,685
Disposals – – – (16,140) (5) – (16,145)
Currency re-alignment 23 14 5 669 35 208 954
Balance at 31.3.2014 141,073 97,022 30,216 2,937,475 158,026 870,935 4,234,747
Carrying amount
Balance at 31.3.2014 170,576 368,784 36,931 2,707,574 334,718 1,125,769 4,744,352
ISEC HEALTHCARE LTD.
AND ITS SUBSIDIARIES
NOTES TO THE UNAUDITED PRO FORMA COMBINED FINANCIAL INFORMATION
FOR THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012, 2013 AND
FOR THE FINANCIAL PERIOD FROM 1 JANUARY 2014 TO 31 MARCH 2014 (Continued)
A-31
7. Intangible assets
Computer
software Goodwill Total
31.12.2013 $ $ $
Cost
Balance at 1.1.2013 396,144 1,856,140 2,252,284
Additions 8,600 – 8,600
Disposals (11,041) – (11,041)
Written off (15,159) – (15,159)
Currency re-alignment (13,701) – (13,701)
Balance at 31.12.2013 364,843 1,856,140 2,220,983
Accumulated amortisation
Balance at 1.1.2013 261,866 – 261,866
Amortisation for the financial year 28,247 – 28,247
Disposals (4,969) – (4,969)
Written off (8,001) – (8,001)
Currency re-alignment (9,182) – (9,182)
Balance at 31.12.2013 267,961 – 267,961
Carrying amount
Balance at 31.12.2013 96,882 1,856,140 1,953,022
ISEC HEALTHCARE LTD.
AND ITS SUBSIDIARIES
NOTES TO THE UNAUDITED PRO FORMA COMBINED FINANCIAL INFORMATION
FOR THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012, 2013 AND
FOR THE FINANCIAL PERIOD FROM 1 JANUARY 2014 TO 31 MARCH 2014 (Continued)
A-32
7. Intangible assets (Continued)
Computer
software Goodwill Total
31.3.2014 $ $ $
Cost
Balance at 1.1.2014 364,843 1,856,140 2,220,983
Currency re-alignment 95 – 95
Balance at 31.3.2014 364,938 1,856,140 2,221,078
Accumulated amortisation
Balance at 1.1.2014 267,961 – 267,961
Amortisation for the financial period 6,433 – 6,433
Currency re-alignment 63 – 63
Balance at 31.3.2014 274,457 – 274,457
Carrying amount
Balance at 31.3.2014 90,481 1,856,140 1,946,621
Goodwill arises from the acquisition of a subsidiary, ISEC Eye Pte. Ltd. Goodwill is arising
from the business combination was allocated to a single cash generating unit (“CGU”) that
is expected to benefit from the business combination.
Based on management’s review, no impairment charge was recognised during the financial
year ended 31 December 2013 and financial period from 1 January 2014 to 31 March 2014.
ISEC HEALTHCARE LTD.
AND ITS SUBSIDIARIES
NOTES TO THE UNAUDITED PRO FORMA COMBINED FINANCIAL INFORMATION
FOR THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012, 2013 AND
FOR THE FINANCIAL PERIOD FROM 1 JANUARY 2014 TO 31 MARCH 2014 (Continued)
A-33
8. Inventories
31.12.2013 31.3.2014
$ $
Medical and surgical supplies 406,437 386,659
9. Trade and other receivables
31.12.2013 31.3.2014
$ $
Trade receivables – third parties 1,552,538 1,712,427
Non-trade receivables
– third parties 306,893 185,542
– related party – 17,180
– a director of the Company 96,878 –
403,771 202,722
Deposits 207,787 175,915
2,164,096 2,091,064
Trade receivables are unsecured, non-interest bearing and generally on 30 days to 90 days’
credit terms.
The non-trade amounts due from related party and a director of the Company were
unsecured, non-interest bearing and repayable on demand.
Deposits mainly relate to the rental deposits of premises.
The currency profiles of trade and other receivables as at the end of the respective reporting
periods are as follows:
31.12.2013 31.3.2014
$ $
Singapore dollar 946,636 1,097,467
Ringgit Malaysia 1,217,460 993,597
2,164,096 2,091,064
ISEC HEALTHCARE LTD.
AND ITS SUBSIDIARIES
NOTES TO THE UNAUDITED PRO FORMA COMBINED FINANCIAL INFORMATION
FOR THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012, 2013 AND
FOR THE FINANCIAL PERIOD FROM 1 JANUARY 2014 TO 31 MARCH 2014 (Continued)
A-34
10. Cash and cash equivalents
31.12.2013 31.3.2014
$ $
Cash and cash equivalents, representing
cash and cash equivalents as per combined
statements of financial position 10,492,920 11,483,637
Bank overdrafts (747,038) (708,191)
Cash and cash equivalents as per combined
statements of cash flows 9,745,882 10,775,446
The currency profiles of cash and cash equivalents as per unaudited pro forma combined
statements of financial position as at the end of the respective reporting periods are as
follows:
31.12.2013 31.3.2014
$ $
Singapore dollar 8,325,105 8,717,468
Ringgit Malaysia 2,167,715 2,766,169
10,492,920 11,483,637
11. Share capital
For the purpose of preparing the unaudited pro forma combined financial statements, the
share capital represents the aggregation of paid-up share capital of ISEC Healthcare Ltd.
and ISEC Sdn. Bhd.
12. Foreign currency translation account
The foreign currency translation account comprises all foreign exchange differences arising
from the translation of the financial statements of foreign operations whose functional
currencies are different from that of the Group’s presentation currency and is non-
distributable.
13. Deferred tax liabilities
Deferred tax liabilities are attributable to temporary differences arising from accelerated tax
depreciation.
ISEC HEALTHCARE LTD.
AND ITS SUBSIDIARIES
NOTES TO THE UNAUDITED PRO FORMA COMBINED FINANCIAL INFORMATION
FOR THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012, 2013 AND
FOR THE FINANCIAL PERIOD FROM 1 JANUARY 2014 TO 31 MARCH 2014 (Continued)
A-35
14. Trade and other payables
31.12.2013 31.3.2014
$ $
Trade payables – third parties 610,812 788,532
Non-trade payables
– third parties 2,679,629 4,014,678
– a director of the company – 1,782,510
2,679,629 5,797,188
Accrued expenses 356,323 238,834
Dividend payable 3,612,320 –
Goods and services tax payables 43,833 63,969
7,302,917 6,888,523
Trade payables are unsecured, non-interest bearing and are normally settled between 30 to
90 days’ terms.
Non-trade payables due to a director of the Company are unsecured, non-interest bearing
and repayable on demand.
The currency profiles of trade and others payables as at the end of the respective reporting
periods are as follows:
31.12.2013 31.3.2014
$ $
Singapore dollar 4,344,044 4,483,067
Ringgit Malaysia 2,958,873 2,405,456
7,302,917 6,888,523
15. Bank overdrafts
Bank overdrafts are arranged at floating rates, thus exposing the Group to cash flow interest
rate risk as set out in Note 25.2 to the combined financial statements.
Bank overdrafts granted to the extent of $964,250 (RM2,500,000) are repayable on demand
and supported by corporate guarantees from ISEC Sdn. Bhd. and Pearl Eye Specialist Sdn,
Bhd.
The currency profile of bank overdrafts as at the end of the respective reporting periods is
Ringgit Malaysia.
ISEC HEALTHCARE LTD.
AND ITS SUBSIDIARIES
NOTES TO THE UNAUDITED PRO FORMA COMBINED FINANCIAL INFORMATION
FOR THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012, 2013 AND
FOR THE FINANCIAL PERIOD FROM 1 JANUARY 2014 TO 31 MARCH 2014 (Continued)
A-36
16. Revenue
Revenue represents the fees charged on medical, consultancy, treatment and surgery
services rendered.
17. Other income
Year
ended
31.12.2011
Year
ended
31.12.2012
Year
ended
31.12.2013
Period
ended
31.3.2013
Period
ended
31.3.2014
$ $ $ $ $
Foreign exchange gain, net 796 3,224 3,182 174 62
Gain on disposals of plant
and equipment – 9,990 – – 3,455
Offsite consultancy and
surgeon fees 52,988 46,428 54,282 – –
Government grants 10,000 5,885 36,406 – –
Others 5,966 10,140 4,809 11,935 11,528
69,750 75,667 98,679 12,109 15,045
18. Finance costs
Year
ended
31.12.2011
Year
ended
31.12.2012
Year
ended
31.12.2013
Period
ended
31.3.2013
Period
ended
31.3.2014
$ $ $ $ $
Interest expenses
– term loan 20,246 190 – – –
– bank overdrafts 2,236 1,998 29,206 26,425 11,207
22,482 2,188 29,206 26,425 11,207
The average effective interest rates per annum of the bank borrowings were as follows:
Year
ended
31.12.2011
Year
ended
31.12.2012
Year
ended
31.12.2013
Period
ended
31.3.2013
Period
ended
31.3.2014
% % % % %
Term loan 7.2% 7.2% – – –
Bank overdrafts – – 5.5% 5.5% 5.5%
ISEC HEALTHCARE LTD.
AND ITS SUBSIDIARIES
NOTES TO THE UNAUDITED PRO FORMA COMBINED FINANCIAL INFORMATION
FOR THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012, 2013 AND
FOR THE FINANCIAL PERIOD FROM 1 JANUARY 2014 TO 31 MARCH 2014 (Continued)
A-37
19. Profit before income tax
In addition to the charges and credits disclosed elsewhere in the notes to the combined
financial statements, the above includes the following charges:
Year
ended
31.12.2011
Year
ended
31.12.2012
Year
ended
31.12.2013
Period
ended
31.3.2013
Period
ended
31.3.2014
$ $ $ $ $
Cost of sales
Cost of inventories 3,285,601 3,652,127 4,673,275 1,073,208 1,217,285
Doctors’ consultancy fees 5,182,426 5,738,684 5,709,911 1,530,894 1,433,934
Selling and distribution
expenses
Advertisements 49,070 41,412 30,340 9,624 16,253
Exhibition expenses 22,849 15,536 31,901 13,241 2,006
Internet expenses 28,629 29,139 50,402 6,034 11,544
Administrative expenses
Amortisation of intangible
assets 55,998 16,882 28,247 7,062 6,433
Employee benefits expense
– salaries, bonus and other
benefits 1,348,472 1,563,007 1,624,911 352,378 483,776
– defined contribution plans 147,594 180,947 184,237 40,140 43,306
Bad receivables written off 26,242 – 5,885 – –
Directors’ fees 514,507 537,972 525,496 – –
Intangible assets written off – – 7,158 – –
Operating lease expense
– rental of equipment 6,291 7,306 8,815 2,121 2,430
– rental of premises 488,115 521,454 526,832 176,659 138,872
Plant and equipment written off – – 140,454 76,226 –
Other expenses
Loss on disposal of a subsidiary – – – – 32,952
ISEC HEALTHCARE LTD.
AND ITS SUBSIDIARIES
NOTES TO THE UNAUDITED PRO FORMA COMBINED FINANCIAL INFORMATION
FOR THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012, 2013 AND
FOR THE FINANCIAL PERIOD FROM 1 JANUARY 2014 TO 31 MARCH 2014 (Continued)
A-38
19. Profit before income tax (Continued)
Depreciation of plant and equipment are recognised in the following line items of profit or
loss:
Year
ended
31.12.2011
Year
ended
31.12.2012
Year
ended
31.12.2013
Period
ended
31.3.2013
Period
ended
31.3.2014
$ $ $ $ $
Cost of sales 587,478 536,386 449,368 107,942 78,075
Administrative expenses 324,743 258,856 350,131 38,938 39,610
912,221 795,242 799,499 146,880 117,685
Employee benefit expenses include the remuneration of Directors of the Company and
subsidiaries as disclosed in Note 22 to the combined financial statements.
20. Income tax expense
Year
ended
31.12.2011
Year
ended
31.12.2012
Year
ended
31.12.2013
Period
ended
31.3.2013
Period
ended
31.3.2014
$ $ $ $ $
Current income tax
– current financial year 1,231,822 1,186,414 1,595,035 295,072 387,232
– under/(over) provision in prior
financial years 36 (72,653) 3,699 – –
1,231,858 1,113,761 1,598,734 295,072 387,232
Deferred tax
– current financial year – (3,916) – – –
Total income tax recognised in
profit or loss 1,231,858 1,109,845 1,598,734 295,072 387,232
ISEC HEALTHCARE LTD.
AND ITS SUBSIDIARIES
NOTES TO THE UNAUDITED PRO FORMA COMBINED FINANCIAL INFORMATION
FOR THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012, 2013 AND
FOR THE FINANCIAL PERIOD FROM 1 JANUARY 2014 TO 31 MARCH 2014 (Continued)
A-39
20. Income tax expense (Continued)
Reconciliation of effective income tax rate
Year
ended
31.12.2011
Year
ended
31.12.2012
Year
ended
31.12.2013
Period
ended
31.3.2013
Period
ended
31.3.2014
$ $ $ $ $
Profit before income tax 5,891,773 6,798,723 7,259,993 1,564,503 2,170,450
Income tax calculated at
Singapore’s statutory
tax rate (2012: 17%, 2013:
17%, 2014: 17%) 1,001,602 1,155,782 1,234,199 265,966 368,977
Effect of different tax rate
in other country 164,273 180,495 263,948 50,437 88,207
Tax effect of income not
subject to income tax (95,061) (215,084) (94,504) (57,549) (74,213)
Tax effect of non-deductible
expenses for income tax
purposes 61,199 94,550 54,757 – 30,796
Deferred tax assets
not recognised 97,437 36,064 206,484 64,357 12,781
Utilisation of deferred tax
assets not recognised
previously – – (40,290) – –
(Over)/under-provision of
current income tax in
prior financial years 36 (72,653) 3,699 – –
Corporate tax rebate – (60,000) (30,000) (31,328) (39,343)
Others 2,372 (9,309) 441 3,189 27
1,231,858 1,109,845 1,598,734 295,072 387,232
Unrecognised deferred tax assets
31.12.2013 31.3.2014
$ $
Balance at beginning of financial year/period 131,290 302,283
Amount not recognised during financial year/period 206,484 12,781
Utilisation of deferred tax assets not recognisedpreviously (40,290) –
Currency realignment 4,799 –
Balance at end of financial year/period 302,283 315,064
ISEC HEALTHCARE LTD.
AND ITS SUBSIDIARIES
NOTES TO THE UNAUDITED PRO FORMA COMBINED FINANCIAL INFORMATION
FOR THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012, 2013 AND
FOR THE FINANCIAL PERIOD FROM 1 JANUARY 2014 TO 31 MARCH 2014 (Continued)
A-40
20. Income tax expense (Continued)
Unrecognised deferred tax assets are attributable to the following temporary differences:
31.12.2013 31.3.2014
$ $
Unutilised tax losses 154,460 167,241
Unabsorbed capital allowances 174,461 174,461
Others (26,638) (26,638)
302,283 315,064
21. Earnings per share
The calculations for earnings per share are based on pre-placement share capital and the
profit attributable to owners for the relevant periods under review on assumption that
pre-placement share capital of 388,500,000 ordinary shares are in issue.
22. Significant related party transactions
For the purpose of these combined financial statements, parties are considered to be related
to the Group if the Group has 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 and the party are subject to common control or common significant
influence. Related parties may be individuals or other entities.
In addition to the related party information disclosed elsewhere in the combined financial
information, the following were significant related party transactions at rates and terms
agreed between the Group with its related parties:
Year
ended
31.12.2011
Year
ended
31.12.2012
Year
ended
31.12.2013
Period
ended
31.3.2013
Period
ended
31.3.2014
$ $ $ $ $
With Directors of
the Company
Consultancy fees paid 1,409,654 1,374,710 1,128,828 620,681 292,264
Payment on behalf of 978,915 1,054,903 5,626,216 753,863 126,523
Payment on behalf by (65,086) (62,225) (12,612) (3,830) –
ISEC HEALTHCARE LTD.
AND ITS SUBSIDIARIES
NOTES TO THE UNAUDITED PRO FORMA COMBINED FINANCIAL INFORMATION
FOR THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012, 2013 AND
FOR THE FINANCIAL PERIOD FROM 1 JANUARY 2014 TO 31 MARCH 2014 (Continued)
A-41
22. Significant related party transactions (Continued)
Year
ended
31.12.2011
Year
ended
31.12.2012
Year
ended
31.12.2013
Period
ended
31.3.2013
Period
ended
31.3.2014
$ $ $ $ $
With directors of
the subsidiaries
Consultancy fees paid 1,313,410 1,422,663 1,503,897 340,616 369,266
Compensation of key management personnel
Key management personnel are directors of the Company and subsidiaries and those
persons having authority and responsibility for planning, directing and controlling the
activities of the Group, directly, or indirectly.
The remuneration of directors of the Company and subsidiaries during the financial
years/period under review were as follows:
Year
ended
31.12.2011
Year
ended
31.12.2012
Year
ended
31.12.2013
Period
ended
31.3.2013
Period
ended
31.3.2014
$ $ $ $ $
Director of the Company
– director’s fees – 11,988 11,622 – –
– short-term employee benefits 128,000 132,000 144,000 12,000 150,000
– post employment benefits 11,520 13,600 9,600 2,400 2,400
Director of a subsidiary
– director’s fees 4,507 15,984 15,496 – –
– short-term employee benefits – 14,386 – – –
144,027 187,958 180,718 14,400 152,400
ISEC HEALTHCARE LTD.
AND ITS SUBSIDIARIES
NOTES TO THE UNAUDITED PRO FORMA COMBINED FINANCIAL INFORMATION
FOR THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012, 2013 AND
FOR THE FINANCIAL PERIOD FROM 1 JANUARY 2014 TO 31 MARCH 2014 (Continued)
A-42
23. Operating lease commitments
The Group as lessee
The Group leases office spaces and warehouses under non-cancellable operating leases.
The operating lease commitments are based on existing rental rates. The leases have lease
terms ranging from 2 to 5 years and rentals are fixed during the lease term.
As at the end of the respective reporting periods, the future minimum lease payable under
non-cancellable operating leases contracted for but not recognised as liabilities were as
follows:
31.12.2013 31.3.2014
$ $
Within one financial year 558,776 556,996
After one financial year but within five financial years 823,347 923,061
After five financial years 499,990 465,976
1,882,113 1,946,033
24. Segment information
Management monitors the operating results of the segment separately for the purposes of
making decisions about resources to be allocated and of assessing performance. Segment
performance is evaluated based on operating profit or loss which is similar to the accounting
profit or loss.
The Group has only one primary business segment, which is that of providing medical care,
consultancy, treatment and surgery in the field of ophthalmology. The Group’s sales and
assets are mainly derived from Malaysia, accordingly, no business segment information are
presented during the financial year.
ISEC HEALTHCARE LTD.
AND ITS SUBSIDIARIES
NOTES TO THE UNAUDITED PRO FORMA COMBINED FINANCIAL INFORMATION
FOR THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012, 2013 AND
FOR THE FINANCIAL PERIOD FROM 1 JANUARY 2014 TO 31 MARCH 2014 (Continued)
A-43
24. Segment information (Continued)
Geographical information
Revenue is based on the country in which the customer is located. Non-current assets
comprise primarily of plant and equipment, and intangible assets. Non-current assets are
shown by the geographical area in which the assets are located.
Singapore Malaysia
$ $
Year ended 31.12.2011
Total revenue from external customers 4,778,316 13,844,056
Gross profit margin 4,634,167 4,932,700
Year ended 31.12.2012
Total revenue from external customers 5,524,525 15,089,287
Gross profit margin 5,329,847 5,356,569
Year ended 31.12.2013
Total revenue from external customers 4,859,720 17,482,585
Gross profit margin 4,693,640 6,816,043
As at 31.12.2013
Non-current assets 2,379,792 2,475,402
Period ended 31.3.2014
Total revenue from external customers 1,272,108 4,585,090
Gross profit margin 1,233,613 1,894,291
As at 31.3.2014
Non-current assets 2,379,627 2,364,725
Major customer
The revenue of the Group mainly derived from the walk-in patients which are general public.
Due to the diverse base of customers to whom the Group renders services in each of the
reporting periods, the Group is not reliant on any customer for its revenue and no one single
customer accounted for 5% or more of the Group’s total revenue for financial years ended 31
December 2011, 2012, 2013 and for the financial period from 1 January 2014 to 31 March
2014.
ISEC HEALTHCARE LTD.
AND ITS SUBSIDIARIES
NOTES TO THE UNAUDITED PRO FORMA COMBINED FINANCIAL INFORMATION
FOR THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012, 2013 AND
FOR THE FINANCIAL PERIOD FROM 1 JANUARY 2014 TO 31 MARCH 2014 (Continued)
A-44
25. Financial instruments, financial risks and capital management
The Group’s activities expose it to credit risks, market risks (including foreign currency risks
and interest rates risks) and liquidity risks arising in the ordinary course of business. The
Group’s overall risk management strategy seeks to minimise adverse effects from the
volatility of financial markets on the Group’s financial performance.
The Board of Directors is responsible for setting the objectives and underlying principles of
financial risk management for the Group. The management then establishes the detailed
policies such as risk identification and measurement, exposure limits and hedging strategies,
in accordance with the objectives and underlying principles approved by the Board of
Directors.
The Group does not hold or issue derivative financial instruments for trading purposes or to
hedge against fluctuations, if any, in interest rates and foreign exchange rates.
There has been no change to the Group’s exposure to these financial risks or the manner in
which it manages and measures the risk. If necessary, market risk exposures are measured
using sensitivity analysis indicated below.
25.1 Credit risks
Credit risks refer to the risk that counterparty will default on its contractual obligations
resulting in a loss to the Group. The Group has adopted a policy of only dealing with
creditworthy counterparties as a means of mitigating the risk of financial loss from
defaults. The Group performs ongoing credit evaluation of its counterparties’ financial
condition and generally does not require collaterals.
The Group does not have any significant credit exposure to any single counterparty or
any Group of counterparties having similar characteristics except for an amount due
from a third party trade receivable and non-trade amount due from director of the
Company amounting to $946,636 and $1,048,768 as at 31 December 2013 and 31
March 2014 respectively.
The carrying amounts of financial assets recorded in the combined financial
statements, grossed up for any allowances for impairment losses, represents the
Group’s maximum exposure to credit risks.
The Group’s major classes of financial assets are trade and other receivables and cash
and cash equivalents.
Trade receivables that are neither past due nor impaired are substantially companies
with good collection track record with the Group.
Bank deposits are mainly deposits with reputable banks with minimum risk of default.
ISEC HEALTHCARE LTD.
AND ITS SUBSIDIARIES
NOTES TO THE UNAUDITED PRO FORMA COMBINED FINANCIAL INFORMATION
FOR THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012, 2013 AND
FOR THE FINANCIAL PERIOD FROM 1 JANUARY 2014 TO 31 MARCH 2014 (Continued)
A-45
25. Financial instruments, financial risks and capital management (Continued)
25.1 Credit risks (Continued)
As at the end of the respective reporting periods, the age analysis of trade receivables
past due but not impaired is as follows:
31.12.2013 31.3.2014
$ $
Past due less than 1 month 82,135 –
Past due 1 to 2 months – 167,648
Past due more than 2 months 19,823 –
25.2 Market risks
Foreign currency risks
The Group does not have significant exposure to foreign currency risk at the end of the
reporting period as the Group mainly operates in Singapore and Malaysia and deals
with local customers and suppliers which transact in Singapore dollar and Ringgit
Malaysia.
Interest rate risks
The Group’s exposure to market risks for changes in interest rates relates primarily to
interest-bearing borrowings as shown in Note 15 to the financial statements.
The Group’s results are affected by changes in interest rates due to the impact of such
changes on interest income and expenses from time deposit and interest-bearing
borrowings which are floating interest rates. It is the Group’s policy to obtain quotes
from reputable banks to ensure that the most favourable rates are made available to the
Group.
The interest rate sensitivity analysis is not presented as the Group does not have
significant exposure to interest-bearing borrowings.
ISEC HEALTHCARE LTD.
AND ITS SUBSIDIARIES
NOTES TO THE UNAUDITED PRO FORMA COMBINED FINANCIAL INFORMATION
FOR THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012, 2013 AND
FOR THE FINANCIAL PERIOD FROM 1 JANUARY 2014 TO 31 MARCH 2014 (Continued)
A-46
25. Financial instruments, financial risks and capital management (Continued)
25.3 Liquidity risks
Liquidity risks refer to the risks in which the Group encounters difficulties in meeting its
short-term obligations. Liquidity risks are managed by matching the payment and
receipt cycle.
The Group actively manages its operating cash flows so as to ensure that all payment
needs are met. As part of its overall prudent liquidity management, the Group minimises
liquidity risk by ensuring the availability of funding through an adequate amount of
committed credit facilities from financial institutions and maintain sufficient levels of
cash to meet its working capital requirements.
Contractual maturity analysis
The following tables detail the Group’s remaining contractual maturity for its non-
derivative financial instruments. The tables have been drawn up based on undiscounted
cash flows of financial instruments based on the earlier of the contractual date or when
the Group is expected to receive or pay.
31.12.2013 31.3.2014
$ $
Within one financial year
Financial assets
Trade and other receivables 2,164,096 2,091,064
Cash and cash equivalents 10,492,820 11,483,537
Total undiscounted financial assets 12,656,916 13,574,601
Financial liabilities
Trade and other payables 7,302,917 6,888,523
Bank overdrafts 747,038 708,191
Total undiscounted financial liabilities 8,049,955 7,596,714
Total net undiscounted financial assets 4,606,961 5,977,887
ISEC HEALTHCARE LTD.
AND ITS SUBSIDIARIES
NOTES TO THE UNAUDITED PRO FORMA COMBINED FINANCIAL INFORMATION
FOR THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012, 2013 AND
FOR THE FINANCIAL PERIOD FROM 1 JANUARY 2014 TO 31 MARCH 2014 (Continued)
A-47
25. Financial instruments, financial risks and capital management (Continued)
25.4 Capital management policies and objectives
The Group manages capital to ensure that the Group is able to continue as a going
concern and maintain an optimal capital structure so as to maximise shareholders’
value.
The Group is not subject to any externally imposed capital requirements for the financial
year ended 31 December 2013 and for financial period from 1 January 2014 to 31 March
2014.
The management reviews the capital structure to ensure that the Group is able to
service any debt obligations (including principal repayment and interest) based on its
operating cash flows. Upon review, the Group will balance its overall capital structure
through new share issues and the issue of new debt or the redemption of existing debt,
if necessary. The Group’s overall strategy remains unchanged during the financial year
ended 31 December 2013 and for financial period from 1 January 2014 to 31 March
2014.
The Group monitors capital based on a gearing ratio, which is net debt divided by total
equity plus net debt. The Group includes within net debt, trade and other payables and
borrowings less cash and cash equivalents. Total equity comprises of share capital plus
reserves.
The gearing ratio is not disclosed as it is not meaningful because the Group’s cash and
cash equivalents are higher than the total of its financial liabilities.
25.5 Fair value of financial assets and financial liabilities
The fair values of financial assets and financial liabilities are determined as follows:
• the fair values of financial assets and financial liabilities with standard terms and
conditions and traded on active liquid markets are determined with reference to
quoted market prices; and
• the fair values of other financial assets and financial liabilities (excluding derivative
instruments) are determined in accordance with generally accepted pricing models
based on discounted cash flow analysis.
ISEC HEALTHCARE LTD.
AND ITS SUBSIDIARIES
NOTES TO THE UNAUDITED PRO FORMA COMBINED FINANCIAL INFORMATION
FOR THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012, 2013 AND
FOR THE FINANCIAL PERIOD FROM 1 JANUARY 2014 TO 31 MARCH 2014 (Continued)
A-48
25. Financial instruments, financial risks and capital management (Continued)
25.5 Fair value of financial assets and financial liabilities (Continued)
Fair value hierarchy
The Group classifies fair value measurements using a fair value hierarchy that reflects
the significance of the inputs used in making the measurements. The fair value
hierarchy has the following levels:
• Level 1 – quoted prices (unadjusted) in active markets for identical assets or
liabilities;
• Level 2 – inputs other than quoted prices included within Level 1 that are
observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e.
derived from prices); and
• Level 3 – inputs for the asset or liability that are not based on observable market
data (unobservable inputs).
Fair value of financial instruments that are not carried at fair value
The carrying amounts of the current financial assets and current financial liabilities that
are not carried at fair value approximate their respective fair values as at the end of the
reporting period due to the relatively short-term maturity of these financial instruments.
Fair value of financial instruments that are carried at fair value
The Group has no financial assets and financial liabilities carried at fair value as at 31
December 2013 and 31 March 2014.
25.6 Categories of financial instruments
The following table sets out the financial instruments as at the end of the respective
reporting periods:
31.12.2013 31.3.2014
$ $
Financial assets
Loans and receivables 12,656,916 13,574,601
Financial liabilities
Other financial liabilities, at amortised cost 8,049,955 7,596,714
ISEC HEALTHCARE LTD.
AND ITS SUBSIDIARIES
NOTES TO THE UNAUDITED PRO FORMA COMBINED FINANCIAL INFORMATION
FOR THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012, 2013 AND
FOR THE FINANCIAL PERIOD FROM 1 JANUARY 2014 TO 31 MARCH 2014 (Continued)
A-49
26. Events subsequent to reporting period
Subsequent to 31 December 2013, the following events have taken place:
26.1 On 28 March 2014, ISEC Sdn. Bhd. disposed the entire equity interest in ISEC
(Ampang) Sdn. Bhd. for total cash consideration of $141,470 (RM366,408).
26.2 On 22 September 2014 and 26 September 2014, the Restructuring Exercise was
carried out as set out in Note 3 to the audited combined financial statements.
Pursuant to written resolutions passed on 22 September 2014 and 26 September 2014,
the shareholders of the Company approved, inter alia, the following:
(a) the conversion of the Company into a public company limited by shares and the
change of the name to “ISEC Healthcare Ltd.”;
(b) the adoption of a new set of Articles of Association;
(c) the allotment and issue of the ordinary shares of the Company which are the
subject of the placement, on the basis that the ordinary shares of the Company,
when allotted, issued and fully paid-up, will rank pari passu in all respects with the
existing issued ordinary shares of the Company;
(d) the adoption of the Share Option Scheme of ISEC Healthcare Ltd. (“Share Option
Scheme”) and the authorisation of the Directors, pursuant to Section 161 of the
Companies Act, to allot and issue ordinary shares of the Company upon the
exercise of options granted under the Share Option Scheme and the authorisation
of the Directors, pursuant to Section 161 of the Companies Act, to allot and issue
ordinary shares of the Company upon the exercise of options granted under the
Share Option Scheme;
(e) the approval of the listing and quotation of all the issued ordinary shares of the
Company on Catalist; and
(f) the authorisation to the Directors, pursuant to Section 161 of the Companies Act
and by way of ordinary resolution in a general meeting, to:
(i) (A) issue ordinary shares of the Company whether by way of rights bonus or
otherwise; and/or
(B) make or grant offers, agreements or options (collectively, “Instruments”) that
might or would require ordinary shares of the Company to be issued during
the continuance of this authority or thereafter, including but not limited to the
creation and issue of (as well as adjustments to) warrants, debentures,
convertible securities or other instruments convertible into ordinary shares of
the Company; and/or
ISEC HEALTHCARE LTD.
AND ITS SUBSIDIARIES
NOTES TO THE UNAUDITED PRO FORMA COMBINED FINANCIAL INFORMATION
FOR THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012, 2013 AND
FOR THE FINANCIAL PERIOD FROM 1 JANUARY 2014 TO 31 MARCH 2014 (Continued)
A-50
26. Events subsequent to reporting period (Continued)
(C) notwithstanding that such authority may have ceased to be in force at the
time that Instruments are to be issued, issue additional Instruments arising
from adjustments made to the number of Instruments previously issued in the
event of rights, bonus or other capitalisation issues, at any time and upon
such terms and conditions and for such purposes and to such persons as the
Directors may in their absolute discretion deem fit; and
(ii) issue ordinary shares of the Company in pursuance of any Instrument made or
granted by the Directors pursuant to (A) above, while such authority was in force
(notwithstanding that such issue of ordinary shares of the Company pursuant to
the Instruments may occur after the expiration of the authority contained in this
resolution), provided that:
(A) the aggregate number of ordinary shares of the Company to be issued
pursuant to such authority does not exceed 100.0% of the post-placement
issued ordinary shares of the Company excluding treasury shares, and
provided further that the aggregate number of ordinary shares of the
Company to be issued other than on a pro-rata basis to shareholders shall
not exceed 50.0% of the post-placement issued ordinary shares of the
Company excluding treasury shares;
(B) in exercising such authority, the Company shall comply with the provisions of
the Catalist Rules for the time being in force (unless such compliance has
been waived by the SGX-ST) and the Articles of Association for the time
being of the Company; and
unless revoked or varied by the Company in general meeting by ordinary
resolution, the authority so conferred shall continue in force until the
conclusion of the next annual general meeting of the Company or the date by
which the next annual general meeting of the Company is required by law to
be held, whichever is the earlier.
ISEC HEALTHCARE LTD.
AND ITS SUBSIDIARIES
NOTES TO THE UNAUDITED PRO FORMA COMBINED FINANCIAL INFORMATION
FOR THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012, 2013 AND
FOR THE FINANCIAL PERIOD FROM 1 JANUARY 2014 TO 31 MARCH 2014 (Continued)
A-51
This page has been intentionally left blank.
ISEC HEALTHCARE LTD.
and its subsidiaries
Audited Combined Financial Statements
For the financial years ended 31 December 2011, 2012 and 2013
APPENDIX B – INDEPENDENT AUDITORS’ REPORT AND AUDITEDCOMBINED FINANCIAL STATEMENTS FOR THE FINANCIAL YEARS
ENDED 31 DECEMBER 2011, 2012 AND 2013 IN RESPECT OFISEC HEALTHCARE LTD. AND ITS SUBSIDIARIES
B-1
AUDITED COMBINED FINANCIAL STATEMENTS
FOR THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012 AND 2013
STATEMENT BY DIRECTORS
We, Wong Jun Shyan and Lee Hung Ming, being two of the directors of ISEC Healthcare Ltd. (the
“Company”), do hereby state that, in the opinion of the Board of Directors,
(i) the accompanying combined financial statements together with notes thereto are properly
drawn up in accordance with Singapore Financial Reporting Standards so as to present fairly,
in all material respects, the state of affairs of the Company and its subsidiaries (the “Group”)
as at 31 December 2011, 2012 and 2013 and of the results, changes in equity and cash flows
of the Group for the financial years ended on those dates, and
(ii) at the date of this statement, there are reasonable grounds to believe that the Company will
be able to pay its debts as and when they fall due.
On behalf of the Board of Directors
Wong Jun Shyan
Director
Lee Hung Ming
Director
Singapore
14 October 2014
B-2
INDEPENDENT AUDITORS’ REPORT ON AUDITED COMBINED FINANCIAL STATEMENTS
FOR THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012 AND 2013
14 October 2014
The Board of Directors
ISEC Healthcare Ltd.
101 Thomson Road
#09-04 United Square
Singapore 307591
Report on the Combined Financial Statements
We have audited the accompanying combined financial statements of ISEC Healthcare Ltd. (the
“Company”) and its subsidiaries (the “Group”) comprising the combined statements of financial
position as at 31 December 2011, 2012 and 2013, the combined statements of comprehensive
income, combined statements of changes in equity and combined statements of cash flows for
each of the financial years ended 31 December 2011, 2012 and 2013 and a summary of significant
accounting policies and other explanatory notes as set out on pages B-5 to B-50.
Management’s Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these combined 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 combined financial statements based on our
audits. We conducted our audits in accordance with Singapore Standards on Auditing. Those
standards require that we comply with ethical requirements and plan and perform the audits to
obtain reasonable assurance about whether the combined financial statements are free from
material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and
disclosures in the combined financial statements. The procedures selected depend on the
auditor’s judgement, including the assessment of the risks of material misstatement of the
combined financial statements, whether due to fraud or error. In making those risk assessments,
the auditor considers internal control relevant to the entity’s preparation and fair presentation of
combined 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 combined financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a
basis for our audit opinion.
B-3
INDEPENDENT AUDITORS’ REPORT ON AUDITED COMBINED FINANCIAL STATEMENTS
FOR THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012 AND 2013 (Continued)
Report on the Combined Financial Statements (Continued)
Opinion
In our opinion, the accompanying combined financial statements of the Group present fairly, in all
material respects, the state of affairs of the Group as at 31 December 2011, 2012 and 2013 and
of its results of operations, changes in equity and cash flows for each of the financial years ended
31 December 2011, 2012 and 2013 in accordance with the Singapore Financial Reporting
Standards.
Restriction on Distribution and Use
This report is made solely to you as a body and for inclusion in the Offer Document to be issued
in relation to the proposed initial public offering of ordinary shares of the Company in connection
with the Company’s listing on Catalist, the sponsor-supervised listing platform of the Singapore
Exchange Securities Trading Limited.
BDO LLP
Public Accountants and
Chartered Accountants
Singapore
Leong Hon Mun Peter
Partner-in-charge
B-4
ISEC HEALTHCARE LTD.
AND ITS SUBSIDIARIES
COMBINED STATEMENTS OF FINANCIAL POSITION
AS AT 31 DECEMBER 2011, 2012 AND 2013
Note 2011 2012 2013
$ $ $
ASSETS
Non-current assets
Plant and equipment 5 1,708,859 1,943,249 2,475,402
Intangible assets 6 56,252 134,278 96,882
1,765,111 2,077,527 2,572,284
Current assets
Inventories 7 272,222 386,411 406,437
Trade and other receivables 8 740,743 705,805 1,217,460
Prepayments 74,625 139,213 154,916
Cash and cash equivalents 9 1,373,608 1,744,213 2,167,715
2,461,198 2,975,642 3,946,528
Total assets 4,226,309 5,053,169 6,518,812
EQUITY AND LIABILITIES
Equity
Share capital 10 418,000 418,000 418,000
Retained earnings 1,747,797 2,466,594 2,147,835
Foreign currency translation account 11 (34,840) (86,550) (182,422)
Equity attributable to owners of the
parent 2,130,957 2,798,044 2,383,413
Non-controlling interests 73,538 297,187 (81,946)
Total equity 2,204,495 3,095,231 2,301,467
Non-current liabilities
Redeemable preference shares 12 184,230 179,775 –
Current liabilities
Trade and other payables 13 1,582,651 1,692,325 2,958,873
Bank borrowings 14 92,553 – 747,038
Current income tax payable 162,380 85,838 511,434
1,837,584 1,778,163 4,217,345
Total liabilities 2,021,814 1,957,938 4,217,345
Total equity and liabilities 4,226,309 5,053,169 6,518,812
The accompanying notes form an integral part of these financial statements.
B-5
ISEC HEALTHCARE LTD.
AND ITS SUBSIDIARIES
COMBINED STATEMENTS OF COMPREHENSIVE INCOME
FOR THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012 AND 2013
Note 2011 2012 2013
$ $ $
Revenue 15 13,844,056 15,089,287 17,482,585
Cost of sales (8,911,356) (9,732,718) (10,666,542)
Gross profit 4,932,700 5,356,569 6,816,043
Other items of income
Interest income 6,023 15,191 31,716
Other income 16 59,750 69,522 62,273
Other items of expense
Selling and distribution expenses (112,837) (96,609) (123,060)
Administrative expenses (2,809,738) (3,086,298) (3,458,415)
Finance costs 17 (22,482) (2,188) (29,206)
Profit before income tax 18 2,053,416 2,256,187 3,299,351
Income tax expense 19 (661,784) (496,722) (986,274)
Profit for the financial year 1,391,632 1,759,465 2,313,077
Other comprehensive income:
Items that may be reclassifiedsubsequently to profit or loss
Foreign currency translation
differences – foreign operations (35,232) (53,545) (104,491)
Income tax relating to items that may be
reclassified – – –
Other comprehensive income for
the financial year, net of tax (35,232) (53,545) (104,491)
Total comprehensive income for
the financial year 1,356,400 1,705,920 2,208,586
Profit attributable to:
Owners of the parent 1,441,123 1,837,677 2,683,591
Non-controlling interests (49,491) (78,212) (370,514)
1,391,632 1,759,465 2,313,077
Total comprehensive income
attributable to:
Owners of the parent 1,408,438 1,785,967 2,587,719
Non-controlling interests (52,038) (80,047) (379,133)
1,356,400 1,705,920 2,208,586
Earnings per share 20
– basic (in cents) 1.44 1.84 2.68
– diluted (in cents) 1.44 1.84 2.68
– pre-placement (in cents) 0.37 0.47 0.09
The accompanying notes form an integral part of these financial statements.
B-6
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B-7
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B-9
ISEC HEALTHCARE LTD.
AND ITS SUBSIDIARIES
COMBINED STATEMENTS OF CASH FLOWS
FOR THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012 AND 2013
Note 2011 2012 2013
$ $ $
Operating activities
Profit before income tax 2,053,416 2,256,187 3,299,351
Adjustments for:
Amortisation of intangible assets 55,998 16,882 28,247
Bad receivables written off 4,990 – –
Depreciation of plant and equipment 896,266 780,910 794,536
Gain on disposals of plant and equipment – (9,990) –
Intangible assets written off – – 7,158
Interest expenses 22,482 2,188 29,206
Interest income (6,023) (15,191) (31,716)
Plant and equipment written off – – 140,454
Operating cash flows before working
capital changes 3,027,129 3,030,986 4,267,236
Working capital changes:
Inventories (36,819) (120,801) (33,627)
Trade and other receivables (266,183) 17,030 (538,715)
Prepayments (24,381) (66,408) (20,643)
Trade and other payables 761,605 151,890 (480,378)
Cash generated from operations 3,461,351 3,012,697 3,193,873
Income tax paid (692,028) (573,264) (556,016)
Net cash from operating activities 2,769,323 2,439,433 2,637,857
Investing activities
Interest received 6,023 15,191 31,716
Proceeds from disposals of intangible assets – – 6,072
Proceeds from disposals of plant and equipment – 47,952 384,898
Purchase of intangible assets (53,607) (96,289) (8,600)
Purchase of plant and equipment (1,069,962) (1,094,653) (1,922,455)
Net cash used in investing activities (1,117,546) (1,127,799) (1,508,369)
Financing activities
Dividends paid (951,271) (1,118,880) (1,190,030)
Interest paid (22,482) (2,188) (29,206)
Redemption of preference shares (737,460) – (174,330)
Repayments of term loans (619,108) (90,338) –
Subscription of shares in subsidiaries by
non-controlling interests – 303,696 –
Net cash used in financing activities (2,330,321) (907,710) (1,393,566)
Net change in cash and cash equivalents (678,544) 403,924 (264,078)
Cash and cash equivalents at beginning of
financial year 2,090,399 1,373,608 1,744,213
Effect of exchange rate changes on cash and
cash equivalents (38,247) (33,319) (59,458)
Cash and cash equivalents at end of financial
year 9 1,373,608 1,744,213 1,420,677
The accompanying notes form an integral part of these financial statements.
B-10
These notes form an integral part and should be read in conjunction with the combined financial
statements.
These combined financial statements have been prepared for inclusion in the Offer Document of
ISEC Healthcare Ltd. (the “Company”) and its subsidiaries (the “Group”) and were authorised for
issue by the Directors of the Company on 14 October 2014.
1. General corporate information
1.1 Domicile and activities
The Company was incorporated in the Republic of Singapore on 2 January 2014 under
the Singapore Companies Act, Chapter 50 (the “Act”) as a private limited liability
company in the name of ISEC Healthcare Pte. Ltd. In connection with its conversion into
a public company limited by shares, the Company changed its name from ISEC
Healthcare Pte. Ltd. to ISEC Healthcare Ltd. The Company’s registration number is
201400185H.
The address of the Company’s registered office and principal place of business is
101 Thomson Road #09-04 United Square Singapore 307591.
The principal activity of the Company is that of an investment holding company.
The principal activities of the subsidiaries are set out in Note 1.3 to the combined
financial statements.
1.2 Basis of preparation of the combined financial statements
For the purpose of the presentation of the combined financial statements, the Group
consists of companies under common control, namely the Company and ISEC Sdn.
Bhd. and its subsidiaries as set out in Note 1.3 below.
Entities under common control are entities which are ultimately controlled by the same
parties and that control is not transitory. Control exists when the same parties have, as
a result of contractual agreements, ultimate collective power to govern the financial and
operating policies of each of the combining entities so as to obtain benefits from their
activities, and that ultimate collective power is not transitory. The financial statements
of common controlled entities are included in the combined financial statements from
the day that control commences until the date that control ceases.
Although the Company was only incorporated on 2 January 2014, the combined
financial statements of the Group for the financial years ended 31 December 2011, 2012
and 2013 have been prepared using the merger accounting principles as if the Group
had been existence for all the financial years presented.
ISEC HEALTHCARE LTD.
AND ITS SUBSIDIARIES
NOTES TO THE COMBINED FINANCIAL STATEMENTS
FOR THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012 AND 2013
B-11
1. General corporate information (Continued)
1.3 Details of subsidiaries
As at the date of this report after the Restructuring Exercise for entities under common
control, the Group has the following subsidiaries:
Name of company
Country of
incorporation
Principal
activities
Effective equity interest
2011 2012 2013
% % %
Held by the Company
ISEC Sdn. Bhd. Malaysia Medical eye
care services
100(1) 100(1) 100(2)
Held By ISEC Sdn. Bhd.
ISEC (Ampang) Sdn. Bhd. Malaysia Medical eye
care services
70(1) 70(1) 70(2)
ISEC (Penang) Sdn. Bhd. Malaysia Medical eye
care services
66(1) 66(1) 66(2)
The statutory audits were carried out by:
(1) Audited by Terrence Oh & Associates
(2) Audited by BDO Malaysia
2. Basis of preparation of combined financial statements
The combined financial statements of the Group for the financial years ended 31 December
2011, 2012 and 2013 have been prepared in accordance with Singapore Financial Reporting
Standards (“FRS”) and on the historical cost except as disclosed in the accounting policies
in Note 3 to the combined financial statements.
The preparation of combined financial statements in conformity with FRS requires the
management to exercise judgement in the process of applying the Group’s accounting
policies and requires the use of accounting estimates and assumptions that affect the
reported amounts of assets and liabilities and disclosures of contingent assets and liabilities
at the end of the reporting periods, and the reported amounts of revenue and expenses
throughout the financial years. Although these estimates are based on management’s best
knowledge of historical experience and other factors, including expectations of future events
that are believed to be reasonable under the circumstances, actual results may ultimately
differ from those estimates. The estimates and underlying assumptions are reviewed on an
on-going basis. Revisions to accounting estimates are recognised in the financial year in
which the estimate is revised if the revision affects only that financial year or in the financial
year of the revision and future financial years if the revision affects both current and future
financial years.
ISEC HEALTHCARE LTD.
AND ITS SUBSIDIARIES
NOTES TO THE COMBINED FINANCIAL STATEMENTS
FOR THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012 AND 2013 (Continued)
B-12
3. Summary of significant accounting policies
Critical accounting judgements and key sources of estimation uncertainty used that are
significant to the combined financial statements are disclosed in Note 4 to the combined
financial statements.
3.1 Changes in accounting policies
During the financial years ended 31 December 2011, 2012 and 2013, the Group
adopted the new or revised Singapore Financial Reporting Standards and
Interpretations of FRS (“INT FRS”) that are relevant to its operations and effective for
each annual period respectively. Changes to the Group’s accounting policies have been
made as required, in accordance with the relevant transitional provisions in the
respective FRS and INT FRS. The adoption of the new standards did not result in any
substantial changes to the Group’s accounting policies and has no material effect on the
amounts reported for the respective financial years.
FRS and INT FRS issued but not yet effective
As at the date of the authorisation of these financial statements, the Group has not
adopted the following FRS and INT FRS that have been issued but not yet effective:
Effective date
(annual periods
beginning on
or after)
FRS 19 : Amendments to FRS 19: Defined Benefit
Plans: Employee Contributions
1 July 2014
FRS 27 : Separate Financial Statements 1 January 2014
: Amendments to FRS 27 – Investment Entities 1 January 2014
FRS 28 : Investments in Associates and Joint Ventures 1 January 2014
FRS 32 : Amendments to FRS 32 – Offsetting Financial
Assets and Financial Liabilities
1 January 2014
FRS 36 : Amendments to FRS 36 – Recoverable
Amount Disclosures for Non-Financial
Assets
1 January 2014
FRS 39 : Amendments to FRS 39 – Novation of
Derivatives and Continuation of Hedge
Accounting
1 January 2014
FRS 110 : Consolidated Financial Statements 1 January 2014
Amendments to FRS 110 – Investment
Entities
1 January 2014
ISEC HEALTHCARE LTD.
AND ITS SUBSIDIARIES
NOTES TO THE COMBINED FINANCIAL STATEMENTS
FOR THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012 AND 2013 (Continued)
B-13
3. Summary of significant accounting policies (Continued)
3.1 Changes in accounting policies (Continued)
FRS and INT FRS issued but not yet effective (Continued)
Effective date
(annual periods
beginning on
or after)
FRS 111 : Joint Arrangements 1 January 2014
FRS 112 : Disclosure of Interests in Other Entities 1 January 2014
: Amendments to FRS 112 – Investment
Entities
1 January 2014
FRS 114 : Regulatory Deferral Accounts 1 January 2016
INT FRS 121 : Levies 1 January 2014
Improvements to FRSs (2014) 1 July 2014
Consequential amendments were also made to various standards as a result of these
new or revised standards.
The Group expects that the adoption of the above FRS and INT FRS, if applicable, will
have no material impact on the combined financial statements in the period of initial
adoption.
FRS 110 Consolidated Financial Statements and FRS 27 Separate Financial
Statements
FRS 110 replaces the control assessment criteria and consolidation requirements
currently in FRS 27 and INT FRS 12, Consolidation – Special Purpose Entities. FRS 110
defines the principle of control and establishes a new control model as the basis for
determining which entities are consolidated in the consolidated financial statements.
FRS 27 remains as a standard applicable only to separate financial statements. On
adoption of FRS 110 management will be required to exercise more judgement than
under the current requirements of FRS 27 in order to determine which entities are
controlled by the Group. These changes will take effect from the financial year
beginning on 1 January 2014 with full retrospective application.
Management is currently in the process of determining the impact on the Group, but
does not expect that there will be any changes to the entities being consolidated by the
Group.
ISEC HEALTHCARE LTD.
AND ITS SUBSIDIARIES
NOTES TO THE COMBINED FINANCIAL STATEMENTS
FOR THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012 AND 2013 (Continued)
B-14
3. Summary of significant accounting policies (Continued)
3.1 Changes in accounting policies (Continued)
FRS and INT FRS issued but not yet effective (Continued)
FRS 112 Disclosure of Interests in Other Entities
FRS 112 is a new standard which prescribes comprehensive disclosure requirements
for all types of interests in other entities. It requires an entity to disclose information that
helps users to assess the nature and financial effects of relationships with subsidiaries,
associates, joint arrangements and unconsolidated structured entities. This new
standard is likely to result in more extensive disclosures in the financial statements,
however, there will be no impact on the financial position or financial performance of the
Group on initial adoption of the standard in the financial year beginning on 1 January
2014.
3.2 Basis of combination
The combined financial statements comprise the financial statements of the Company
and its subsidiaries made up to the end of the respective financial reporting periods
ended 31 December 2011, 2012 and 2013. The financial statements of the subsidiaries
are prepared for the same reporting date as that of the parent.
Accounting policies of subsidiaries have been changed where necessary to align them
with the policies adopted by the Group to ensure consistency.
In preparing the combined financial statements, inter-company transactions, balances
and unrealised gains on transactions between entities within the Group are eliminated.
Unrealised losses are also eliminated unless the transaction provides evidence of an
impairment loss of the asset transferred.
Non-controlling interest in subsidiaries relate to the equity in subsidiaries which is not
attributable directly or indirectly to the owner of the parent. They are shown separately
in the statements of comprehensive income, financial position and changes in equity.
Non-controlling interests are identified separately from the Group’s equity therein.
Non-controlling interests in the acquiree may be initially measured either at fair value
or at the non-controlling interests’ proportionate share of the fair value of the acquiree’s
identifiable net assets. The choice of measurement basis is made on an acquisition-
by-acquisition basis. Subsequent to acquisition, the carrying amount of non-controlling
interests is the amount of those interests at initial recognition plus the non-controlling
interests’ share of subsequent changes in equity. Total comprehensive income is
attributed to non-controlling interests even if this results in the non-controlling interests
having a deficit balance.
ISEC HEALTHCARE LTD.
AND ITS SUBSIDIARIES
NOTES TO THE COMBINED FINANCIAL STATEMENTS
FOR THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012 AND 2013 (Continued)
B-15
3. Summary of significant accounting policies (Continued)
3.3 Subsidiaries
Subsidiaries are entities over which the Group has power to govern the financial and
operating policies, generally accompanying a shareholding of more than one half of the
voting rights. The existence and effect of potential voting rights that are currently
exercisable or convertible are considered when assessing whether the Group controls
another entity.
3.4 Plant and equipment
Plant and equipment are initially recorded at cost. Subsequent to initial recognition,
plant and equipment are stated at cost less accumulated depreciation and impairment
losses, if any.
The cost of plant and equipment includes expenditure that is directly attributable to the
acquisition of the items. Dismantlement, removal or restoration costs are included as
part of the cost of plant and equipment if the obligation for dismantlement, removal or
restoration is incurred as a consequence of acquiring or using the plant and equipment.
Subsequent expenditure relating to the plant and equipment that has already been
recognised is added to the carrying amount of the asset when it is probable that the
future economic benefits, in excess of the standard of performance of the asset before
the expenditure was made, will flow to the Group, and the cost can be reliably
measured. Other subsequent expenditure is recognised as an expense during the
financial year in which it is incurred.
An item of plant and equipment is derecognised upon disposal or when no future
economic benefits are expected from its use or disposal. Any gain or loss arising on
derecognition of the asset is included in profit or loss in the financial year the asset is
derecognised.
Depreciation is calculated using the straight-line method to allocate the depreciable
amounts of the plant and equipment over their estimated useful lives as follows:
Years
Computer equipment 5
Electrical equipment 5
Motor vehicles 5
Medical equipment 5
Office equipment, furniture and fittings 5
Renovation 5
ISEC HEALTHCARE LTD.
AND ITS SUBSIDIARIES
NOTES TO THE COMBINED FINANCIAL STATEMENTS
FOR THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012 AND 2013 (Continued)
B-16
3. Summary of significant accounting policies (Continued)
3.4 Plant and equipment (Continued)
The residual values, estimated useful lives and depreciation method are reviewed at
each financial year end to ensure that the residual values, period of depreciation and
depreciation method are consistent with previous estimates and expected pattern of
consumption of the future economic benefits embodied in the items of plant and
equipment.
3.5 Intangible assets
Intangible assets acquired separately are measured initially at cost. Following initial
recognition, intangible assets are carried at cost less accumulated amortisation and
impairment losses, if any.
The useful lives of intangible assets are assessed to be either finite or indefinite.
Intangible assets with finite lives are amortised on a straight-line basis over the
estimated economic useful lives and assessed for impairment whenever there is an
indication that the intangible asset may be impaired. The amortisation period and the
amortisation method for an intangible asset with a finite useful life are reviewed at least
at each financial year-end. Changes in the expected useful life or the expected pattern
of consumption of future economic benefits embodied in the asset is accounted for by
changing the amortisation period or method, as appropriate, and are treated as
changes in accounting estimates. The amortisation expense on intangible assets with
finite useful lives is recognised in profit or loss.
Intangible assets with indefinite useful lives or not yet available for use are tested for
impairment annually or more frequently if the events or changes in circumstances
indicate that the carrying amount may be impaired either individual or at the cash-
generating unit level. Such intangible assets are not amortised. The useful life of an
intangible asset with an indefinite useful life is reviewed annually to determine whether
the useful life assessment continues to be supportable. If not, the changes in useful life
from indefinite to finite is made on prospective basis.
Gains or losses arising from derecognition of an intangible asset are measured at the
difference between the net disposal proceeds and the carrying amount of the asset and
are recognised in profit and loss when the asset is derecognised.
Computer software
Acquired computer software are initially capitalised at cost which includes the purchase
price (net of any discounts and rebates) and other directly attributable costs of
preparing the software for its intended use. Direct expenditure which enhances or
extends the performance of computer software beyond its specifications and which can
be reliably measured is added to the original cost of the software. Costs associated with
maintaining computer software are recognised as an expense as incurred.
ISEC HEALTHCARE LTD.
AND ITS SUBSIDIARIES
NOTES TO THE COMBINED FINANCIAL STATEMENTS
FOR THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012 AND 2013 (Continued)
B-17
3. Summary of significant accounting policies (Continued)
3.5 Intangible assets (Continued)
Subsequent to initial recognition, computer software is carried at cost less accumulated
amortisation and accumulated impairment losses. The cost of computer software is
amortised to profit or loss using the straight-line method over the estimated useful life
of 5 years.
3.6 Impairment of non-financial assets
The carrying amounts of non-financial assets are reviewed at the end of each reporting
period to determine whether there is any indication of impairment loss and whenever
events or changes in circumstances indicate that the carrying amount may not be
recoverable. If any such indication exists, or when annual impairment testing for an
asset is required, the asset’s recoverable amount is estimated.
An impairment loss is recognised whenever the carrying amount of an asset or its
cash-generating unit exceeds its recoverable amount. A cash-generating unit is the
smallest identifiable asset group that generates cash flows that largely are independent
from other assets and groups of assets. Impairment loss is recognised in profit or loss
unless it reverses a previous revaluation credited to other comprehensive income, in
which case it is charged to other comprehensive income up to the amount of any
previous revaluation.
The recoverable amount of an asset or cash-generating unit is the higher of its fair value
less costs to sell and its value in use. Recoverable amount is determined for individual
asset, unless the asset does not generate cash inflows that are largely independent of
those from other assets or groups of assets. If this is the case, the recoverable amount
is determined for the cash-generating unit to which the assets belong. The fair value
less costs to sell is the amount obtainable from the sale of an asset or cash-generating
unit in an arm’s length transaction between knowledgeable willing parties less costs of
disposal. Value in use is the present value of estimated future cash flows expected to
be derived from the continuing use of an asset and from its disposal at the end of its
useful life, discounted at pre-tax rate that reflects current market assessment of the time
value of money and the risks specific to the asset or cash-generating unit for which the
future cash flow estimates have not been adjusted.
An assessment is made at the end of each reporting period as to whether there is any
indication that an impairment loss recognised in prior periods for an asset may no
longer exist or may have decreased. If such indication exists, the recoverable amount
is estimated. An impairment loss recognised in prior periods is reversed only if there has
been a change in the estimates used to determine the recoverable amount since the
last impairment loss was recognised. If that is the case, the carrying amount of the asset
is increased to its 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
ISEC HEALTHCARE LTD.
AND ITS SUBSIDIARIES
NOTES TO THE COMBINED FINANCIAL STATEMENTS
FOR THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012 AND 2013 (Continued)
B-18
3. Summary of significant accounting policies (Continued)
3.6 Impairment of non-financial assets (Continued)
recognised. Reversals of impairment loss are recognised in profit or loss unless the
asset is carried at revalued amount, in which case the reversal in excess of impairment
losses recognised in profit or loss in prior periods is treated as a revaluation increase.
After such a reversal, the depreciation or amortisation is adjusted in future periods to
allocate the asset’s revised carrying amount, less any residual value, on a systematic
basis over its remaining useful life.
3.7 Inventories
Inventories are stated at the lower of cost and net realisable value.
Cost is determined on a weighted average basis and includes all costs of purchase, cost
of conversion and other costs incurred in bringing the inventories to their present
location and condition.
Net realisable value is the estimated selling price at which inventories can be realised
in the ordinary course of business, less costs incurred in marketing and distribution.
Where necessary, the carrying values of inventories are adjusted to lower of cost and
net realisable value.
3.8 Financial assets
The Group classifies its financial assets as loans and receivables. The classification
depends on the purpose of which the assets were acquired. The management
determines the classification of the financial assets at initial recognition and re-
evaluates this designation at the end of the reporting period, where allowed and
appropriate.
(i) Loans and receivables
Loans and receivables are non-derivative financial assets with fixed or
determinable payments that are not quoted in an active market. Loans and
receivables are classified within “trade and other receivables” and “cash and cash
equivalents” on the combined statements of financial position.
Recognition and derecognition
Financial assets are recognised on the combined statements of financial position when,
and only when, the Group becomes a party to contractual provisions of the financial
instruments.
Regular way purchases and sales of financial assets are recognised on trade-date, the
date on which the Group commits to purchase or sell the asset.
ISEC HEALTHCARE LTD.
AND ITS SUBSIDIARIES
NOTES TO THE COMBINED FINANCIAL STATEMENTS
FOR THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012 AND 2013 (Continued)
B-19
3. Summary of significant accounting policies (Continued)
3.8 Financial assets (Continued)
Recognition and derecognition (Continued)
Financial assets are derecognised when the rights to receive cash flows from the
financial assets have expired or have been transferred and the Group has transferred
substantially all risks and rewards of ownership.
On derecognition of a financial asset, the difference between the carrying amount and
the net sale proceeds is recognised in profit or loss.
Initial and subsequent measurement
Financial assets are initially recognised at fair value plus in the case of financial assets
not at fair value through profit or loss, directly attributable transaction costs.
After initial recognition, loans and receivables are carried at amortised cost using the
effective interest method, less impairment loss, if any.
The effective interest method is a method of calculating the amortised cost of a financial
instrument and of allocating interest income or expense over the relevant period. The
effective interest rate is the rate that exactly discounts estimated future cash receipts
or payments through the expected life of the financial instrument, or where appropriate,
a shorter period, to the net carrying amount of the financial instrument. Income and
expense are recognised on an effective interest basis for debt instruments.
Impairment
The Group assesses at the end of each reporting period whether there is objective
evidence that a financial asset or a group of financial assets is impaired.
(i) Loans and receivables
An allowance for impairment loss of loans and receivables is recognised when
there is objective evidence that the Group will not be able to collect all amounts
due according to the original terms of the receivables. The amount of allowance is
the difference between the asset’s carrying amount and the present value of
estimated future cash flows, discounted at the original effective interest rate. The
carrying amount of the asset is reduced through the use of an allowance account.
The amount of the loss is recognised in profit or loss.
If, in a subsequent period, the amount of the impairment loss decreases and the
decrease can be related objectively to an event occurring after the impairment loss
was recognised, the previously recognised impairment loss is reversed either
directly or by adjusting an allowance account. Any subsequent reversal of an
impairment loss is recognised in profit or loss, to the extent that the carrying
amount of the asset does not exceed its amortised cost at the reversal date.
ISEC HEALTHCARE LTD.
AND ITS SUBSIDIARIES
NOTES TO THE COMBINED FINANCIAL STATEMENTS
FOR THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012 AND 2013 (Continued)
B-20
3. Summary of significant accounting policies (Continued)
3.9 Cash and cash equivalents
Cash and cash equivalents comprise cash on hand, cash and deposits with banks.
Cash and cash equivalents are short-term, highly liquid investments that are readily
convertible to known amounts of cash and which are subject to an insignificant risk of
change in value. For the purpose of combined statements of cash flows, cash and cash
equivalents comprise cash on hand, cash at bank and fixed deposits net of bank
overdrafts.
3.10 Equity instruments
An equity instrument is any contract that evidences a residual interest in the assets of
an entity after deducting all of its liabilities.
Incremental costs directly attributable to the issuance of new equity instruments are
shown in equity as a deduction from the proceeds.
Ordinary shares
Ordinary shares are classified as equity and recognised at the fair value of the
consideration received.
Preference shares
Preference shares capital is classified as equity if it is non-redeemable, or redeemable
only at the Company’s option, and any dividends are discretionary. Discretionary
dividends thereon are recognised as distributions within equity upon approval by the
Company’s shareholders.
Preference shares capital is classified as a financial liability if it is redeemable on a
specific date or at the option of the shareholders, or if dividend payments are not
discretionary. Non-discretionary dividends thereon are recognised as interest expense
in profit or loss as accrued.
3.11 Financial liabilities
Financial liabilities are classified as either financial liabilities at fair value through profit
or loss or other financial liabilities.
Financial liabilities are classified as at fair value through profit or loss if the financial
liability is either held for trading or it is designated as such upon initial recognition. The
Group has not designated any financial liabilities as fair value through profit or loss
upon initial recognition.
ISEC HEALTHCARE LTD.
AND ITS SUBSIDIARIES
NOTES TO THE COMBINED FINANCIAL STATEMENTS
FOR THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012 AND 2013 (Continued)
B-21
3. Summary of significant accounting policies (Continued)
3.11 Financial liabilities (Continued)
The accounting policies adopted for other financial liabilities are set out below:
(i) Trade and other payables
Trade and other payables are recognised initially at cost which represents the fair
value of the consideration to be paid in the future, less transaction cost, for goods
received or services rendered, whether or not billed to the Group, and are
subsequently measured at amortised cost using the effective interest method.
(ii) Bank borrowings
Borrowings are initially recognised at fair value, net of transaction costs incurred.
Borrowings are subsequently stated at amortised cost using the effective interest
method. Any difference between the proceeds (net of transaction costs) and the
redemption value is recognised to profit or loss over the period of the borrowings
using the effective interest method.
Borrowings which are due to be settled within 12 months after the end of the
reporting period are presented as current borrowings even though the original
terms were for a period longer than 12 months and an agreement to refinance, or
to reschedule payments, on a long-term basis is completed after the end of the
reporting period and before the combined financial statements are authorised for
issue. Other borrowings due to be settled more than 12 months after the end of the
reporting period are presented as non-current borrowings in the combined
statements of financial position.
Recognition and derecognition
Financial liabilities are recognised on the combined statements of financial position
when, and only when, the Group becomes a party to the contractual provisions of the
financial instruments.
Financial liabilities are derecognised when the contractual obligation has been
discharged or cancelled or expired. On derecognition of a financial liability, the
difference between the carrying amount and the consideration paid is recognised in
profit or loss.
When an existing liability is replaced by another form from the same lender on
substantially different terms, or the terms of an existing liability are substantially
modified, such exchange or modification is treated as derecognition of the original
liability and the recognition of a new liability, and the difference in the respective
carrying amounts is recognised in profit or loss.
ISEC HEALTHCARE LTD.
AND ITS SUBSIDIARIES
NOTES TO THE COMBINED FINANCIAL STATEMENTS
FOR THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012 AND 2013 (Continued)
B-22
3. Summary of significant accounting policies (Continued)
3.12 Revenue recognition
Revenue is measured at fair value of the consideration received or receivable for the
sale of goods and services rendered in the ordinary course of business. Revenue is
recognised to the extent that it is probable that the economic benefits will flow to the
entity and the revenue can be reliably measured. Revenue is presented, net of rebates,
discounts and sales related taxes.
Revenue from rendering of services is recognised when the services have been
performed and accepted by the customers in accordance with the relevant terms and
conditions of the contract.
Interest income is recognised on a time-proportion basis using the effective interest
method.
3.13 Employee benefits
Defined contribution plan
Contributions to defined contribution plans are recognised as expenses in profit or loss
in the same financial year as the employment that gives rise to the contributions.
3.14 Leases
When the Group is the lessee of operating leases
Leases of assets in which a significant portion of the risks and rewards of ownership are
retained by the lessor are classified as operating leases. Payments made under
operating leases (net of any incentives received from the lessor) are recognised in profit
or loss on a straight-line basis over the period of the lease.
When an operating lease is terminated before the lease period has expired, any
payment required to be made to the lessor by way of penalty is recognised as an
expense in the financial year in which termination takes place.
Contingent rents are recognised as an expense in profit or loss in the financial year in
which they are incurred.
3.15 Borrowing costs
Borrowing costs that are not directly attributable to the acquisition, construction or
production of a qualifying asset are recognised as expenses in profit or loss in the
financial year in which they are incurred. Borrowing costs are recognised on a
time-proportion basis in profit or loss using the effective interest method.
ISEC HEALTHCARE LTD.
AND ITS SUBSIDIARIES
NOTES TO THE COMBINED FINANCIAL STATEMENTS
FOR THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012 AND 2013 (Continued)
B-23
3. Summary of significant accounting policies (Continued)
3.16 Income tax
Income tax expense comprises current and deferred taxes. Income tax expense is
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 income tax expense is the expected tax payable on the taxable income for the
respective financial years, using tax rates enacted or substantively enacted by the end
of the reporting period, and any adjustment to income tax payable in respect of previous
financial years.
Deferred tax is provided, using the liability method, for temporary differences at the end
of the reporting period between the tax bases of assets and liabilities and their carrying
amounts for financial reporting purposes. Deferred tax is measured using the tax rates
expected to be applied to the temporary differences when they are realised or settled,
based on tax rates enacted or substantively enacted by the end of the reporting period.
Deferred tax assets are recognised only to the extent that it is probable that future
taxable profits will be available against which the temporary differences can be utilised.
Deferred tax assets are reviewed at the end of each reporting period and reduced to the
extent that it is no longer probable that the related tax benefit will be realised.
Unrecognised deferred tax assets are reassessed at the end of each reporting period
and are recognised to the extent that it has become probable that future taxable profits
will be available against which the temporary differences can be utilised.
Deferred tax relating to items recognised outside profit or loss is recognised outside
profit or loss. Deferred tax items are recognised in correlation to the underlying
transaction either in other comprehensive income or directly in equity and deferred tax
arising from a business combination is adjusted against goodwill on acquisition.
Deferred tax assets and liabilities are offset if a legally enforceable right exists to set off
current tax assets against current tax liabilities and the deferred taxes relate to the
same tax authority and where there is intention to settle the current tax assets and
liabilities on a net basis.
Deferred tax liabilities are recognised for all taxable temporary differences associated
with investments in subsidiaries, except where the timing of the reversal of the
temporary difference can be controlled by the Group and it is probable that the
temporary difference will not reverse in the foreseeable future.
ISEC HEALTHCARE LTD.
AND ITS SUBSIDIARIES
NOTES TO THE COMBINED FINANCIAL STATEMENTS
FOR THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012 AND 2013 (Continued)
B-24
3. Summary of significant accounting policies (Continued)
3.17 Foreign currencies
Items included in the individual financial statements of each entity in the Group are
measured using the currency of the primary economic environment in which the entity
operates (“functional currency”).
The functional currency of the Company is Ringgit Malaysia (“RM”). The financial
statements of the Company are presented in Singapore dollar (“$”) as the Company is
domiciled in Singapore and the Directors are of the view that presenting the financial
statements in Singapore dollar would be useful to the shareholders of the Company.
In preparing the financial statements, transactions in currencies other than the entity’s
functional currency (“foreign currencies”) are recorded at the rates of exchange
prevailing on the date of the transactions. At the end of each reporting period, monetary
items denominated in foreign currencies are re-translated at the rates prevailing at the
end of the reporting period. Non-monetary items carried at fair value that are
denominated in foreign currencies are re-translated at the rates prevailing on the date
when the fair value was determined. Non-monetary items that are measured in terms of
historical cost in a foreign currency are not re-translated.
Exchange differences arising on the settlement of monetary items and on re-translating
of monetary items are recognised in profit or loss for the financial year. Exchange
differences arising on the re-translation of non-monetary items carried at fair value are
recognised in profit or loss for the financial year except for differences arising on the
re-translation of non-monetary items in respect of which gains and losses are
recognised in other comprehensive income. For such non-monetary items, any
exchange component of that gain or loss is also recognised in other comprehensive
income.
For the purposes of presenting the combined financial statements, the financial
positions and results of the Group’s entities that have a functional currency different
from the presentation currency and are translated into the presentation currency as
follows:
(i) assets and liabilities are translated at the closing exchange rate at the end of the
reporting period;
(ii) income and expenses are translated at average exchange rate for the financial
year (unless this average is not a reasonable approximation of the cumulative
effect of the rates prevailing on the transaction dates, in which case income and
expenses are translated using the exchange rates at the dates of the
transactions); and
ISEC HEALTHCARE LTD.
AND ITS SUBSIDIARIES
NOTES TO THE COMBINED FINANCIAL STATEMENTS
FOR THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012 AND 2013 (Continued)
B-25
3. Summary of significant accounting policies (Continued)
3.17 Foreign currencies (Continued)
(iii) all resulting foreign currency exchange differences are recognised in other
comprehensive income and presented in the foreign currency translation account
in equity. Such translation differences are recognised in profit or loss in the period
in which the foreign operation is disposed of.
3.18 Dividends
Dividends are recognised when they become legally payable. Interim dividends are
recorded in the financial year in which they are declared payable. Final dividends are
recorded in the financial year in which the dividends are approved by shareholders.
3.19 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
relating to transactions with other components of the Group) and whose operating
results are regularly reviewed by the Group’s chief operating decision maker to make
decisions about resources to be allocated to the segment and assess its performance.
4. Critical accounting judgements and key sources of estimation uncertainty
4.1 Critical judgements made in applying the accounting policies
In the process of applying the Group’s accounting policies, the management is of the
opinion that there are no critical judgements involved that have a significant effect on
the amounts recognised in the combined financial statements except as discussed
below.
(i) Impairment of financial assets
The Group follows the guidance of FRS 39 in determining when a financial asset
is impaired. This determination requires significant judgement. The Group
evaluates, among other factors, the duration and extent to which the fair value of
a financial asset is less than its cost and the financial health of the near-term
business outlook for a financial asset, including factors such as industry and
sector performance, changes in technology and operational and financing cash
flows.
ISEC HEALTHCARE LTD.
AND ITS SUBSIDIARIES
NOTES TO THE COMBINED FINANCIAL STATEMENTS
FOR THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012 AND 2013 (Continued)
B-26
4. Critical accounting judgements and key sources of estimation uncertainty (Continued)
4.2 Key sources of estimation uncertainty
The key assumptions concerning the future and other key sources of estimation
uncertainty at the end of the reporting period that have a significant risk of causing a
material adjustment to the carrying amounts of assets and liabilities and the reported
amounts of revenue and expenses within the next financial year are discussed below.
(i) Depreciation of plant and equipment
Plant and equipment are depreciated on a straight-line method over their
estimated useful lives. The management estimates the useful lives of plant and
equipment to be 5 years. Changes in the expected level of usage and
technological developments could impact the economic useful lives and the
residual values of these assets, therefore future depreciation could be revised.
The carrying amounts of plant and equipment as at 31 December 2011, 2012 and
2013 were $1,708,859, $1,943,249 and $2,475,402 respectively.
(ii) Allowance for impairment loss on receivables
The management establishes allowance for impairment loss on receivables on a
case-by-case basis when they believe that payment of amounts owed is unlikely
to occur. In establishing these allowances, the management considers its
historical experience and changes to its customers’ financial position. If the
financial conditions of receivables were to deteriorate, resulting in impairment of
their abilities to make the required payments, additional allowances may be
required. The carrying amounts of trade and other receivables as at 31 December
2011, 2012 and 2013 were $740,743, $705,805 and $1,217,460 respectively.
(iii) Income taxes
The Group has exposure to income taxes in numerous jurisdictions. Significant
judgement is involved in determining the Group’s provision for income taxes. The
Group recognises expected assets and liabilities for tax based on an estimation of
the likely taxes due, which requires significant judgement as to the ultimate tax
determination of certain items. Where the actual liability arising from these issues
differs from these estimates, such differences will have an impact on income tax
and deferred tax provisions in the financial year when such determination is made.
The carrying amounts of current income tax payable as at 31 December 2011,
2012 and 2013 were $162,380, $85,838 and $511,434 respectively.
ISEC HEALTHCARE LTD.
AND ITS SUBSIDIARIES
NOTES TO THE COMBINED FINANCIAL STATEMENTS
FOR THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012 AND 2013 (Continued)
B-27
5. Plant and equipment
Computer
equipment
Electrical
equipment
Motor
vehicles
Medical
equipment
Office
equipment,
furniture
and
fittings Renovation Total
$ $ $ $ $ $ $
2011
Cost
Balance at 1.1.2011 110,969 – 62,625 2,839,925 146,831 834,950 3,995,300
Additions 44,597 8,194 – 737,603 60,697 218,871 1,069,962
Currency re-alignment (2,185) (6) (1,215) (55,638) (2,893) (16,359) (78,296)
Balance at 31.12.2011 153,381 8,188 61,410 3,521,890 204,635 1,037,462 4,986,966
Accumulated depreciation
Balance at 1.1.2011 62,282 – 10,438 1,674,686 85,513 596,718 2,429,637
Depreciation for the
financial year 27,500 820 12,291 635,944 34,531 185,180 896,266
Currency re-alignment (1,229) (1) (212) (32,957) (1,684) (11,713) (47,796)
Balance at 31.12.2011 88,553 819 22,517 2,277,673 118,360 770,185 3,278,107
Carrying amount
Balance at 31.12.2011 64,828 7,369 38,893 1,244,217 86,275 267,277 1,708,859
2012
Cost
Balance at 1.1.2012 153,381 8,188 61,410 3,521,890 204,635 1,037,462 4,986,966
Additions 28,089 292,785 69,567 567,838 9,443 126,931 1,094,653
Disposals – – (59,940) – – – (59,940)
Currency re-alignment (3,716) (271) (1,487) (85,308) (4,951) (25,119) (120,852)
Balance at 31.12.2012 177,754 300,702 69,550 4,004,420 209,127 1,139,274 5,900,827
Accumulated depreciation
Balance at 1.1.2012 88,553 819 22,517 2,277,673 118,360 770,185 3,278,107
Depreciation for the
financial year 21,051 1,838 13,914 608,225 28,675 107,207 780,910
Disposals – – (21,978) – – – (21,978)
Currency re-alignment (2,148) (20) (543) (55,230) (2,869) (18,651) (79,461)
Balance at 31.12.2012 107,456 2,637 13,910 2,830,668 144,166 858,741 3,957,578
Carrying amount
Balance at 31.12.2012 70,298 298,065 55,640 1,173,752 64,961 280,533 1,943,249
ISEC HEALTHCARE LTD.
AND ITS SUBSIDIARIES
NOTES TO THE COMBINED FINANCIAL STATEMENTS
FOR THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012 AND 2013 (Continued)
B-28
5. Plant and equipment (Continued)
Computer
equipment
Electrical
equipment
Motor
vehicles
Medical
equipment
Office
equipment,
furniture
and
fittings Renovation Total
$ $ $ $ $ $ $
2013
Cost
Balance at 1.1.2013 177,754 300,702 69,550 4,004,420 209,127 1,139,274 5,900,827
Additions 41,711 185,172 – 1,183,357 93,852 418,363 1,922,455
Disposals (20,476) – – (760,594) (17,922) – (798,992)
Written off (18,518) (8,910) – (19,163) (25,211) (201,845) (273,647)
Currency re-alignment (6,197) (11,281) (2,420) (141,203) (7,512) (40,645) (209,258)
Balance at 31.12.2013 174,274 465,683 67,130 4,266,817 252,334 1,315,147 6,541,385
Accumulated depreciation
Balance at 1.1.2013 107,456 2,637 13,910 2,830,668 144,166 858,741 3,957,578
Depreciation for the
financial year 23,348 87,383 13,488 511,305 33,797 125,215 794,536
Disposals (10,579) – – (394,958) (8,557) – (414,094)
Written off (9,339) (4,190) – (10,484) (11,981) (97,199) (133,193)
Currency re-alignment (3,751) (478) (547) (98,981) (5,078) (30,009) (138,844)
Balance at 31.12.2013 107,135 85,352 26,851 2,837,550 152,347 856,748 4,065,983
Carrying amount
Balance at 31.12.2013 67,139 380,331 40,279 1,429,267 99,987 458,399 2,475,402
6. Intangible assetsComputer software
2011 2012 2013
$ $ $
Cost
Balance at beginning of financial year 258,763 307,310 396,144
Additions 53,607 96,289 8,600
Disposal – – (11,041)
Written off – – (15,159)
Currency re-alignment (5,060) (7,455) (13,701)
Balance at end of financial year 307,310 396,144 364,843
Accumulated amortisation
Balance at beginning of financial year 198,960 251,058 261,866
Amortisation for the financial year 55,998 16,882 28,247
Disposal – – (4,969)
Written off – – (8,001)
Currency re-alignment (3,900) (6,074) (9,182)
Balance at end of financial year 251,058 261,866 267,961
Carrying amount
Balance at end of financial year 56,252 134,278 96,882
ISEC HEALTHCARE LTD.
AND ITS SUBSIDIARIES
NOTES TO THE COMBINED FINANCIAL STATEMENTS
FOR THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012 AND 2013 (Continued)
B-29
7. Inventories
2011 2012 2013
$ $ $
Medical and surgical supplies 272,222 386,411 406,437
8. Trade and other receivables
2011 2012 2013
$ $ $
Trade receivables – third parties 519,670 494,996 702,780
Non-trade receivables – third parties 46,642 24,217 306,893
Deposits 174,431 186,592 207,787
740,743 705,805 1,217,460
Trade receivables are unsecured, non-interest bearing and generally on 60 to 90 days’ credit
terms.
Deposits mainly relate to the rental deposits of premises.
The currency profile of trade and other receivables as at the end of the respective reporting
periods is Ringgit Malaysia.
9. Cash and cash equivalents
2011 2012 2013
$ $ $
Fixed deposits with banks 614,100 – –
Cash and bank balances 759,508 1,744,213 2,167,715
Cash and cash equivalents as per combined
statements of financial position 1,373,608 1,744,213 2,167,715
Bank overdrafts – – (747,038)
Cash and cash equivalents as per combined
statements of cash flows 1,373,608 1,744,213 1,420,677
The currency profile of cash and cash equivalents as at the end of the respective reporting
periods is Ringgit Malaysia.
ISEC HEALTHCARE LTD.
AND ITS SUBSIDIARIES
NOTES TO THE COMBINED FINANCIAL STATEMENTS
FOR THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012 AND 2013 (Continued)
B-30
10. Share capital
As the Company was incorporated subsequent to 31 December 2011, the share capital of the
Group presented relates to ISEC Sdn. Bhd.
11. Foreign currency translation account
The foreign currency translation account comprises all foreign exchange differences arising
from the translation of the financial statements of foreign operations whose functional
currencies are different from that of the Group’s presentation currency and is non-
distributable.
Movement in the foreign currency translation account is set out in the combined statements
of changes in equity.
12. Redeemable preference shares
2011
Number of
redeemable
preference
shares $
Balance at beginning of financial year 2,250,000 939,375
Redeemed during the financial year (1,800,000) (737,460)
Currency re-alignment – (17,685)
Balance at end of financial year 450,000 184,230
2012
Number of
redeemable
preference
shares $
Balance at beginning of financial year 450,000 184,230
Currency re-alignment – (4,455)
Balance at end of financial year 450,000 179,775
ISEC HEALTHCARE LTD.
AND ITS SUBSIDIARIES
NOTES TO THE COMBINED FINANCIAL STATEMENTS
FOR THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012 AND 2013 (Continued)
B-31
12. Redeemable preference shares (Continued)
2013
Number of
redeemable
preference
shares $
Balance at beginning of financial year 450,000 179,775
Redeemed during the financial year (450,000) (174,330)
Currency re-alignment – (5,445)
Balance at end of financial year – –
The redeemable preference shares relate to those issued by one of the subsidiaries, ISEC
Sdn. Bhd.
During the financial year ended 31 December 2011, 1,800,000 redeemable preference
shares were redeemed at RM 1 each (approximately $0.41 each).
During the financial year ended 31 December 2013, 450,000 redeemable preference shares
were redeemed at RM 1 each (approximately $0.38 each).
The general terms and conditions of the redeemable preference shares (“RPS”) issued are:
(i) They are for a tenure of 10 years commencing from the date of incorporation of ISEC
Sdn. Bhd.
(ii) They are redeemable, non-convertible and non-participating.
(iii) They carry a cumulative preference dividend at the rate of 10% per annum on the
distributable profits and to be paid annually in arrears on the anniversary of the issue
of RPS.
(iv) In the event that the ISEC Sdn. Bhd. is being wound up, where surplus assets are
available for distribution amongst its members, the RPS shall rank priority over any
other class of shares in the ISEC Sdn. Bhd., but shall not be entitled to any further or
other participation in the profits or assets of the Company.
(v) The ISEC Sdn. Bhd. may at its discretion redeem all or part of the RPS for cash, at the
nominal value of RM 0.01 with a premium of RM 0.99 on each RPS after the first
anniversary of the issuance of RPS.
ISEC HEALTHCARE LTD.
AND ITS SUBSIDIARIES
NOTES TO THE COMBINED FINANCIAL STATEMENTS
FOR THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012 AND 2013 (Continued)
B-32
13. Trade and other payables
2011 2012 2013
$ $ $
Trade payables – third parties 686,808 756,976 601,681
Non-trade payables
– third parties 748,963 750,491 300,623
– a director of the Company 1,259 1,229 –
750,222 751,720 300,623
Accrued expenses 145,621 183,629 244,249
Dividend payable – – 1,812,320
1,582,651 1,692,325 2,958,873
Trade payables are unsecured, non-interest bearing and are normally settled between 30 to
90 days’ terms.
Non-trade payables due to shareholders are unsecured, non-interest bearing and repayable
on demand.
The currency profiles of trade and others payables as at the end of the respective reporting
periods is Ringgit Malaysia.
14. Bank borrowings
2011 2012 2013
$ $ $
Current
Secured
Term loan 92,553 – –
Unsecured
Bank overdraft – – 747,038
92,553 – 747,038
During the financial years ended 31 December 2011, 2012 and 2013, the average effective
interest rates per annum of the borrowings were as follows:
2011 2012 2013
% % %
Term loan 7.2% – –
Bank overdrafts – – 5.5%
ISEC HEALTHCARE LTD.
AND ITS SUBSIDIARIES
NOTES TO THE COMBINED FINANCIAL STATEMENTS
FOR THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012 AND 2013 (Continued)
B-33
14. Bank borrowings (Continued)
Bank borrowings are arranged at floating rates, thus exposing the Group to cash flow interest
rate risk as set out in Note 25.2 to the combined financial statements.
Bank overdrafts are repayable on demand and supported by corporate guarantee from a
subsidiary and a related party.
The term loan is repayable over 12 months commencing from the date of full drawdown. As
at 31 December 2011, term loan is secured by the a fixed and floating charge over all present
and future assets of the ISEC Sdn. Bhd., a corporate guarantee provided by ISEC Sdn. Bhd.
and supported by joint and several guarantees of two Directors of the ISEC Sdn. Bhd. and
five specialist doctors of ISEC Sdn. Bhd. Term loan was fully settled during the financial year
ended 31 December 2012, and joint and several guarantees of two Directors and five third
parties was released by the bank.
As at the end of the respective reporting periods, the ISEC Sdn. Bhd. and ISEC (Penang)
Sdn. Bhd. had facilities as follows:
2011 2012 2013
$ $ $
Facilities granted 2,865,800 998,750 964,000
Facilities utilised 92,553 – 747,038
The currency profile of bank borrowings as at the end of the respective reporting periods is
Ringgit Malaysia.
15. Revenue
Revenue represents fees charged on medical, consultancy, treatment and surgery services
rendered.
16. Other income
2011 2012 2013
$ $ $
Foreign exchange gain, net 796 3,224 3,182
Gain on disposals of plant and equipment – 9,990 –
Offsite consultancy 52,988 46,428 54,282
Others 5,966 9,880 4,809
59,750 69,522 62,273
ISEC HEALTHCARE LTD.
AND ITS SUBSIDIARIES
NOTES TO THE COMBINED FINANCIAL STATEMENTS
FOR THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012 AND 2013 (Continued)
B-34
17. Finance costs
2011 2012 2013
$ $ $Interest expenses
– term loan 20,246 190 –
– bank overdrafts 2,236 1,998 29,206
22,482 2,188 29,206
18. Profit before income tax
In addition to the charges and credits disclosed elsewhere in the notes to the combined
financial statements, the above includes the following charges:
2011 2012 2013
$ $ $Cost of sales
Cost of inventories 3,150,271 3,465,742 4,508,700
Doctors’ consultancy fees 5,182,426 5,738,684 5,709,911
Selling and distribution expenses
Advertisements 49,070 41,142 30,340
Exhibition expenses 22,849 15,536 31,901
Internet expenses 28,629 29,139 50,402
Administrative expenses
Amortisation of intangible assets 55,998 16,882 28,247
Employee benefits expense
– salaries, bonus and other benefits 1,191,698 1,421,690 1,487,213
– defined contribution plans 135,078 167,347 174,637
Bad receivables written off 4,990 – –
Directors’ fees 4,507 27,972 15,496
Intangible assets written off – – 7,158
Operating lease expense
– rental of equipment 6,291 7,306 8,815
– rental of premises 488,115 521,454 526,832
Plant and equipment written off – – 140,454
ISEC HEALTHCARE LTD.
AND ITS SUBSIDIARIES
NOTES TO THE COMBINED FINANCIAL STATEMENTS
FOR THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012 AND 2013 (Continued)
B-35
18. Profit before income tax (Continued)
Depreciation of plant and equipment are recognised in the following line items of Group’s
profit or loss:
2011 2012 2013
$ $ $
Cost of sales 578,659 528,093 447,863
Administrative expenses 317,607 252,817 346,673
896,266 780,910 794,536
Employee benefit expenses include the remuneration of directors of the Company and
subsidiaries as disclosed in Note 22 to the combined financial statements.
19. Income tax expense
2011 2012 2013
$ $ $
Current income tax
– current financial year 661,748 569,375 982,575
– under/(over) provision in prior financial
years 36 (72,653) 3,699
661,784 496,722 986,274
Reconciliation of effective income tax rate
2011 2012 2013
$ $ $
Profit before income tax 2,053,416 2,256,187 3,299,351
Income tax calculated at Singapore’s
statutory tax rate (2011: 17%, 2012: 17%,
2013: 17%) 349,081 383,552 560,890
Effect of different tax rate in other countries 164,273 180,495 263,948
Tax effect of income not subject to
income tax (10,242) (125,286) (9,685)
Tax effect of non-deductible expenses for
income tax purposes 61,199 94,550 1,228
Deferred tax assets not recognised 97,437 36,064 206,484
Utilisation of deferred tax assets not
recognised previously – – (40,290)
Under/(Over) provision of current income tax
in prior financial years 36 (72,653) 3,699
661,784 496,722 986,274
ISEC HEALTHCARE LTD.
AND ITS SUBSIDIARIES
NOTES TO THE COMBINED FINANCIAL STATEMENTS
FOR THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012 AND 2013 (Continued)
B-36
19. Income tax expense (Continued)
Unrecognised deferred tax assets
2011 2012 2013
$ $ $
Balance at beginning of financial year – 97,365 131,290
Amount not recognised during financial year 97,437 36,064 206,484
Utilisation of deferred tax assets not
recognised previously – – (40,290)
Currency realignment (72) (2,139) 4,799
Balance at end of financial year 97,365 131,290 302,283
Unrecognised deferred tax assets are attributable to the following temporary differences:
2011 2012 2013
$ $ $
Unutilised tax losses 17,968 37,352 154,460
Unabsorbed capital allowances 52,839 60,740 174,461
Others 26,558 33,198 (26,638)
97,365 131,290 302,283
20. Earnings per share
The calculation of earnings per share is based on:
2011 2012 2013
$ $ $
Profit attributable to owners 1,441,123 1,837,677 2,683,591
Weighted number of ordinary shares in
issue during the financial year applicable
to basic earnings per share 1,000,000 1,000,000 1,000,000
Earnings per share (in cents)
– basic 1.44 1.84 2.68
– diluted 1.44 1.84 2.68
The calculations for earnings per share based on pre-placement share capital for the
relevant period is based on the profit attributable to owners for the financial years ended 31
December 2011, 2012 and 2013 on assumption that pre-placement share capital of
388,500,000 ordinary shares are in issue as at the date of the Offer Document.
ISEC HEALTHCARE LTD.
AND ITS SUBSIDIARIES
NOTES TO THE COMBINED FINANCIAL STATEMENTS
FOR THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012 AND 2013 (Continued)
B-37
21. Dividends
2011 2012 2013
$ $ $
ISEC Sdn. Bhd. paid the following dividends:
First interim tax exempt dividend of approximately
$0.95 (RM2.32) per ordinary share in respect of
financial year ended 31 December 2011 951,271 – –
First interim tax exempt dividend of approximately
$1.12 (RM2.80) per ordinary share in respect of
financial year ended 31 December 2012 – 1,118,880 –
First interim tax exempt dividend of approximately
$1.18 (RM3.05) per ordinary share in respect of
financial year ended 31 December 2013 – – 1,181,570
Second interim tax exempt dividend of
approximately $1.16 (RM3.00) per ordinary
share in respect of financial year ended
31 December 2013 – – 1,162,200
Third interim tax exempt dividend of
approximately $0.66 (RM1.70) per ordinary
share in respect of financial year ended
31 December 2013 – – 658,580
951,271 1,118,880 3,002,350
22. Significant related party transactions
For the purpose of these combined financial statements, parties are considered to be related
to the Group if the Group has 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 and the party are subject to common control or common significant
influence. Related parties may be individuals or other entities.
In addition to the related party information disclosed elsewhere in the combined financial
statements, the following were significant related party transactions at rates and terms
agreed between the Group with its related parties during the financial years ended 31
December 2011, 2012 and 2013:
2011 2012 2013
$ $ $
With director of the Company
Consultancy fees paid 1,409,654 1,374,710 1,128,828
With directors of the subsidiaries
Consultancy fees paid 1,313,410 1,422,663 1,503,897
ISEC HEALTHCARE LTD.
AND ITS SUBSIDIARIES
NOTES TO THE COMBINED FINANCIAL STATEMENTS
FOR THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012 AND 2013 (Continued)
B-38
22. Significant related party transactions (Continued)
Compensation of key management personnel
Key management personnel are directors of the Company and subsidiaries and those
persons having authority and responsibility for planning, directing and controlling the
activities of the Group, directly, or indirectly.
The remuneration of directors of the Company and subsidiaries during the financial years
ended 31 December 2011, 2012 and 2013 were as follows:
2011 2012 2013
$ $ $
Director of the Company
– director’s fees – 11,988 11,622
Director of a subsidiary
– director’s fees 4,507 15,984 15,496
– short-term employee benefits – 14,386 –
4,507 42,358 27,118
23. Operating lease commitments
The Group as lessee
The Group leases office spaces and warehouses under non-cancellable operating leases.
The operating lease commitments are based on existing rental rates. The leases have lease
terms ranging from 2 to 5 years and rentals are fixed during the lease term.
As at the end of the respective reporting periods, the future minimum lease payable under
non-cancellable operating leases contracted for but not recognised as liabilities were as
follows:
2011 2012 2013
$ $ $
Within one financial year 529,776 285,696 558,776
After one financial year but within five
financial years 229,613 420,629 823,347
After five financial years – 556,344 499,990
759,389 1,262,669 1,882,113
ISEC HEALTHCARE LTD.
AND ITS SUBSIDIARIES
NOTES TO THE COMBINED FINANCIAL STATEMENTS
FOR THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012 AND 2013 (Continued)
B-39
24. Segment information
Management monitors the operating results of the segment separately for the purposes of
making decisions about resources to be allocated and of assessing performance. Segment
performance is evaluated based on operating profit or loss which is similar to the accounting
profit or loss.
The Group has only one primary business segment, which is that of providing medical care,
consultancy, treatment and surgery in the field of ophthalmology. The Group’s sales and
assets are mainly derived from Malaysia, accordingly, no business segment and
geographical segment information are presented during the financial year.
Major customer
Revenue are mainly derived from the walk-in patients which are general public. Due to the
diverse base of customers to whom the Group renders services in each of the reporting
periods, the Group is not reliant on any customer for its sales and no one single customer
accounted for 5% or more of the Group’s total revenue for financial years ended 31
December 2011, 2012 and 2013.
25. Financial instruments, financial risks and capital management
The Group’s activities expose it to credit risks, market risks (including foreign currency risks
and interest rates risks) and liquidity risks arising in the ordinary course of business. The
Group’s overall risk management strategy seeks to minimise adverse effects from the
volatility of financial markets on the Group’s financial performance.
The Board of Directors is responsible for setting the objectives and underlying principles of
financial risk management for the Group. The management then establishes the detailed
policies such as risk identification and measurement, exposure limits and hedging strategies,
in accordance with the objectives and underlying principles approved by the Board of
Directors.
The Group does not hold or issue derivative financial instruments for trading purposes or to
hedge against fluctuations, if any, in interest rates and foreign exchange rates.
There has been no change to the Group’s exposure to these financial risks or the manner in
which it manages and measures the risk. If necessary, market risk exposures are measured
using sensitivity analysis indicated below.
25.1 Credit risks
Credit risks refer to the risk that counterparty will default on its contractual obligations
resulting in a loss to the Group. The Group has adopted a policy of only dealing with
creditworthy counterparties as a means of mitigating the risk of financial loss from
defaults. The Group performs ongoing credit evaluation of its counterparties’ financial
condition and generally does not require collaterals.
The Group does not have any significant credit exposure to any single counterparty or
any group of counterparties having similar characteristics.
ISEC HEALTHCARE LTD.
AND ITS SUBSIDIARIES
NOTES TO THE COMBINED FINANCIAL STATEMENTS
FOR THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012 AND 2013 (Continued)
B-40
25. Financial instruments, financial risks and capital management (Continued)
25.1 Credit risks (Continued)
The carrying amounts of financial assets recorded in the combined financial
statements, grossed up for any allowances for impairment losses, represents the
Group’s maximum exposure to credit risks.
The Group’s major classes of financial assets are trade and other receivables and cash
and cash equivalents.
Trade receivables that are neither past due nor impaired are substantially companies
with good collection track record with the Group.
Bank deposits are mainly deposits with reputable banks with minimum risk of default.
As at the end of the respective reporting periods, the age analysis of trade receivables
past due but not impaired is as follows:
2011 2012 2013
$ $ $
Past due over 3 months 59,019 9,194 19,823
25.2 Market risks
Foreign currency risks
The Group does not have significant exposure to foreign currency risk at the end of the
reporting period as the Group mainly operates in Malaysia and deals with local
customers and suppliers which transact in Ringgit Malaysia.
Interest rate risks
The Group’s exposure to market risks for changes in interest rates relates primarily to
interest-bearing borrowings as shown in Note 14 to the financial statements.
The Group’s results are affected by changes in interest rates due to the impact of such
changes on interest income and expenses from time deposit and interest-bearing
borrowings which are floating interest rates. It is the Group’s policy to obtain quotes
from reputable banks to ensure that the most favourable rates are made available to the
Group.
The interest rate sensitivity analysis is not presented as the Group does not have
significant exposure to interest-bearing borrowings.
ISEC HEALTHCARE LTD.
AND ITS SUBSIDIARIES
NOTES TO THE COMBINED FINANCIAL STATEMENTS
FOR THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012 AND 2013 (Continued)
B-41
25. Financial instruments, financial risks and capital management (Continued)
25.3 Liquidity risks
Liquidity risks refer to the risks in which the Group encounters difficulties in meeting its
short-term obligations. Liquidity risks are managed by matching the payment and
receipt cycle.
The Group actively manages its operating cash flows so as to ensure that all payment
needs are met. As part of its overall prudent liquidity management, the Group minimises
liquidity risk by ensuring the availability of funding through an adequate amount of
committed credit facilities from financial institutions and maintain sufficient levels of
cash to meet its working capital requirements.
Contractual maturity analysis
The following tables detail the Group’s remaining contractual maturity for its non-
derivative financial instruments. The tables have been drawn up based on undiscounted
cash flows of financial instruments based on the earlier of the contractual date or when
the Group is expected to receive or pay.
Within one
financial
year
After one
financial
year but
within five
financial
years Total
$ $ $
2011
Financial assets
Trade and other receivables 740,743 – 740,743
Cash and cash equivalents 1,373,608 – 1,373,608
Total undiscounted financial assets 2,114,351 – 2,114,351
Financial liabilities
Redeemable preference shares – 184,230 184,230
Trade and other payables 1,582,651 – 1,582,651
Bank borrowings 92,553 – 92,553
Total undiscounted financial liabilities 1,675,204 184,230 1,859,434
Total net undiscounted financial
assets/(liabilities) 439,147 (184,230) 254,917
ISEC HEALTHCARE LTD.
AND ITS SUBSIDIARIES
NOTES TO THE COMBINED FINANCIAL STATEMENTS
FOR THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012 AND 2013 (Continued)
B-42
25. Financial instruments, financial risks and capital management (Continued)
25.3 Liquidity risks (Continued)
Within one
financial
year
After one
financial
year but
within five
financial
years Total
$ $ $
2012
Financial assets
Trade and other receivables 705,805 – 705,805
Cash and cash equivalents 1,744,213 – 1,744,213
Total undiscounted financial assets 2,450,018 – 2,450,018
Financial liabilities
Redeemable preference shares – 179,775 179,775
Trade and other payables 1,692,325 – 1,692,325
Total undiscounted financial liabilities 1,692,325 179,775 1,872,100
Total net undiscounted financial
assets/(liabilities) 757,693 (179,775) 577,918
2013
Financial assets
Trade and other receivables 1,217,460 – 1,217,460
Cash and cash equivalents 2,167,715 – 2,167,715
Total undiscounted financial assets 3,385,175 – 3,385,175
Financial liabilities
Trade and other payables 2,958,873 – 2,958,873
Bank borrowings 747,038 – 747,038
Total undiscounted financial liabilities 3,705,911 – 3,705,911
Total net undiscounted financial
liabilities (320,736) – (320,736)
ISEC HEALTHCARE LTD.
AND ITS SUBSIDIARIES
NOTES TO THE COMBINED FINANCIAL STATEMENTS
FOR THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012 AND 2013 (Continued)
B-43
25. Financial instruments, financial risks and capital management (Continued)
25.4 Capital management policies and objectives
The Group manages capital to ensure that the Group is able to continue as a going
concern and maintain an optimal capital structure so as to maximise shareholders’
value.
The Group is not subject to any externally imposed capital requirements for the financial
years ended 31 December 2011, 2012 and 2013.
The management reviews the capital structure to ensure that the Group is able to
service any debt obligations (including principal repayment and interest) based on its
operating cash flows. Upon review, the Group will balance its overall capital structure
through new share issues and the issue of new debt or the redemption of existing debt,
if necessary. The Group’s overall strategy remains unchanged during the financial years
ended 31 December 2011, 2012 and 2013.
The Group monitors capital based on a gearing ratio, which is net debt divided by total
equity plus net debt. The Group includes within net debt, trade and other payables and
borrowings less cash and cash equivalents. Total equity comprises of share capital plus
reserves.
2011 2012 2013
$ $ $
Redeemable preference shares 184,230 179,775 –
Trade and other payables 1,582,651 1,692,325 2,958,873
Bank borrowings 92,553 – 747,038
Less: Cash and cash equivalents (1,373,608) (1,744,213) (2,167,715)
Net debt 485,826 127,887 1,538,196
Total equity 2,204,495 3,095,231 2,301,467
Total capital 2,690,321 3,223,118 3,839,663
Gearing ratio 18.1% 4.0% 40.0%
ISEC HEALTHCARE LTD.
AND ITS SUBSIDIARIES
NOTES TO THE COMBINED FINANCIAL STATEMENTS
FOR THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012 AND 2013 (Continued)
B-44
25. Financial instruments, financial risks and capital management (Continued)
25.5 Fair value of financial assets and financial liabilities
The fair values of financial assets and liabilities are determined as follows:
• the fair values of financial assets and financial liabilities with standard terms and
conditions and traded on active liquid markets are determined with reference to
quoted market prices; and
• the fair values of other financial assets and financial liabilities (excluding derivative
instruments) are determined in accordance with generally accepted pricing models
based on discounted cash flow analysis.
Fair value hierarchy
The Group classifies fair value measurements using a fair value hierarchy that reflects
the significance of the inputs used in making the measurements. The fair value
hierarchy has the following levels:
• Level 1 – quoted prices (unadjusted) in active markets for identical assets or
liabilities;
• Level 2 – inputs other than quoted prices included within Level 1 that are
observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e.
derived from prices); and
• Level 3 – inputs for the asset or liability that are not based on observable market
data (unobservable inputs).
Fair value of financial instruments that are not carried at fair value
The carrying amounts of the current financial assets and current financial liabilities that
are not carried at fair value approximate their respective fair values as at the end of the
reporting period due to the relatively short-term maturity of these financial instruments.
25.6 Categories of financial instruments
The following table sets out the financial instruments as at the end of the respective
reporting periods:
2011 2012 2013
$ $ $Financial assets
Loans and receivables 2,114,351 2,450,018 3,385,175
Financial liabilities
Other financial liabilities, at amortised
cost 1,859,434 1,872,100 3,705,911
ISEC HEALTHCARE LTD.
AND ITS SUBSIDIARIES
NOTES TO THE COMBINED FINANCIAL STATEMENTS
FOR THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012 AND 2013 (Continued)
B-45
26. Events subsequent to reporting period
Subsequent to 31 December 2013, the following events have taken place:
26.1 On 28 March 2014, ISEC Sdn. Bhd disposed the entire equity interest in ISEC (Ampang)
Sdn. Bhd. for total cash consideration of $141,470 (RM366,408).
26.2 Incorporation of the Company
The Company was incorporated in the Republic of Singapore on 2 January 2014 under
the Singapore Companies Act as a private limited liability company. The principal
activity is that of an investment holding company. At the time of incorporation, the
Company had an issued and paid-up share capital of $100 comprising 100 shares held
by Dr Lee Hung Ming and Dr Wong Jun Shyan in equal proportions.
26.3 Incorporation of International Eye Specialist Centre Pte. Ltd. (“ISEC Singapore”)
ISEC Singapore was incorporated in the Republic of Singapore on 2 January 2014
under the Singapore Companies Act as a private limited company. The principal activity
of ISEC Singapore is in specialised medical services (including day surgical centres).
At the time of incorporation, ISEC Singapore had an issued and paid-up share capital
of $100 comprising 100 shares held by Dr Lee Hung Ming and Dr Wong Jun Shyan in
equal proportions. On 30 April 2014, the entire issued and paid-up share capital of ISEC
Singapore was transferred to the Company.
26.4 Incorporation of ISEC Eye Pte. Ltd. (“ISEC Eye”)
ISEC Eye was incorporated in the Republic of Singapore on 15 July 2014 as a private
limited liability company for purposes of the acquisition described in step 26.6 below as
well as to be the party signing the Service Agreement (“PEC Service Agreement”)
entered into between ISEC Eye and Parkway Hospitals Singapore Pte Ltd (“PHS”),
relating to services to be provided by ISEC Eye to PHS in relation to Lee Hung Ming Eye
Centre at Gleneagles Hospital, Singapore. At the time of incorporation, ISEC Eye had
an issued and paid-up share capital of $100 comprising 100 shares held solely by
Dr Lee Hung Ming.
26.5 Issuance of shares by the Company
The Company had issued shares to the following persons between July 2014 and
September 2014 as follows:
(a) 1,000,000 Shares to Loh Foong Han;
(b) 800,000 Shares to Dr Cordelia Chan;
(c) 250,000 Shares to Dr Lim Lee Hooi;
ISEC HEALTHCARE LTD.
AND ITS SUBSIDIARIES
NOTES TO THE COMBINED FINANCIAL STATEMENTS
FOR THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012 AND 2013 (Continued)
B-46
26. Events subsequent to reporting period (Continued)
26.5 Issuance of shares by the Company (Continued)
(d) 100,000 Shares to Dr Chua Leng Leng Jocelyn;
(e) 100,000 Shares to Macy Thong;
(f) 999,950 Shares to Dr Lee Hung Ming;
(g) 499,950 Shares to Dr Wong Jun Shyan;
(h) 1,000,000 Shares to Tan Kar Tek;
(i) 250,000 Shares to Oh Chin Beng;
(j) 250,000 Shares to Chua Seng Yong;
(k) 150,000 Shares to Tony Tan Choon Keat; and
(l) 100,000 Shares to Dr Goh Siew Ching.
26.6 Acquisition of business by ISEC Eye
Pursuant to a service agreement dated 18 September 2009 between PHS and Lee HM
& Co Pte. Ltd. (“Lee HM & Co”), Lee HM & Co provided specialist medical
ophthalmology services to PEC. It was arranged that revenue from the service
agreement with Lee HM & Co for the various types of medical procedures were directed
by Lee HM & Co to be taken into account by Lee HM & Co, Singapore Lasik Hub Pte.
Ltd., Perfect Vision Eye Centre Pte. Ltd. and Lee Hung Ming Eye Centre Pte. Ltd.
(collectively, the “LHM Companies”, each wholly-owned by Dr Lee Hung Ming).
In order to streamline operations, the entire business of each of the LHM Companies
was acquired by ISEC Eye for purposes of the Restructuring Exercise (“Business
Acquisition”) pursuant to a business acquisition agreement dated 22 September 2014
between ISEC Eye and each of the LHM Companies (“Business Acquisition
Agreement”). The Business Acquisition allows for the track record of the LHM
companies whose businesses were conducted by Dr Lee Hung Ming to be taken into
account by our Company after the Restructuring Exercise. Pursuant to the signing of the
PEC Service Agreement between PHS and ISEC Eye, the businesses previously
undertaken by the LHM Companies is undertaken by ISEC Eye. It is a term of the
Business Acquisition that Dr Lee Hung Ming procures that the LHM Companies be
struck off so that the LHM Companies will not be able to compete with the Group. In
accordance with the Business Acquisition Agreement, the aggregate consideration of
$1,153,461 shall be satisfied by the allocation and issuance of 1,153,461 fully paid-up
shares in the share capital of ISEC Eye to Dr Lee Hung Ming (as nominated by the LHM
Companies).
ISEC HEALTHCARE LTD.
AND ITS SUBSIDIARIES
NOTES TO THE COMBINED FINANCIAL STATEMENTS
FOR THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012 AND 2013 (Continued)
B-47
26. Events subsequent to reporting period (Continued)
26.7 Acquisition of Subsidiaries
On 26 September 2014, the Company entered into a sale and purchase agreement
(“Share Swap Agreement”) with the respective shareholders (“Vendors”) of ISEC Eye,
and ISEC Sdn. Bhd. (“Subsidiaries”) to acquire the entire issued and paid-up share
capital of the Subsidiaries at the following aggregate purchase consideration:
a. $3,010,000 for ISEC Eye;
b. $3,990,000 for ISEC Sdn. Bhd.
Pursuant to the Share Swap Agreement, the purchase considerations shall be satisfied
by the allotment and issuance of Shares (“Consideration Shares”) as follows:
a. 21,500,000 Shares to Dr Lee Hung Ming;
b. 5,511,416 Shares to Dr Wong Jun Shyan;
c. 3,552,240 Shares to Oh Chin Beng;
d. 2,604,985 Shares to Irene Kang;
e. 2,604,985 Shares to Tony Tan Choon Keat;
f. 2,490,957 Shares to Dr Choong Yee Fong;
g. 2,306,077 Shares to Dr Michael Law Sie Haur;
h. 2,289,035 Shares to Dr Fang Seng Kheong;
i. 1,604,985 Shares to Loh Foong Han;
j. 1,204,382 Shares to Dr Lim Kian Seng;
k. 1,098,903 Shares to Dr Barkeh Hanim Binti Jumaat;
l. 1,051,308 Shares to Dr Kok Howe Sen;
m. 1,000,000 Shares to Dr Lim Cheok Peng;
n. 473,670 Shares to Chua Seng Yong;
o. 287,309 Shares to Dr Ronald Arun Das;
ISEC HEALTHCARE LTD.
AND ITS SUBSIDIARIES
NOTES TO THE COMBINED FINANCIAL STATEMENTS
FOR THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012 AND 2013 (Continued)
B-48
26. Events subsequent to reporting period (Continued)
26.7 Acquisition of Subsidiaries (Continued)
p. 199,016 Shares to Dr Cheah May Hong;
q. 124,374 Shares to Dr Kamala Devi A/P S.D. Lingam; and
r. 96,359 Shares to Dr Then Kong Yong.
26.8 Pursuant to written resolutions passed on 22 September 2014 and 26 September 2014,
the shareholders of the Company approved, inter alia, the following:
(a) the conversion of the Company into a public company limited by shares and the
change of the name to “ISEC Healthcare Ltd.”;
(b) the adoption of a new set of Articles of Association;
(c) the allotment and issue of the ordinary shares of the Company which are the
subject of the placement, on the basis that the ordinary shares of the Company,
when allotted, issued and fully paid-up, will rank pari passu in all respects with the
existing issued ordinary shares of the Company;
(d) the adoption of the Share Option Scheme of ISEC Healthcare Ltd. (“Share Option
Scheme”) and the authorisation of the Directors, pursuant to Section 161 of the
Companies Act, to allot and issue ordinary shares of the Company upon the
exercise of options granted under the Share Option Scheme and the authorisation
of the Directors, pursuant to Section 161 of the Companies Act, to allot and issue
ordinary shares of the Company upon the exercise of options granted under the
Share Option Scheme;
(e) the approval of the listing and quotation of all the issued ordinary shares of the
Company on Catalist; and
(f) the authorisation to the Directors, pursuant to Section 161 of the Companies Act
and by way of ordinary resolution in a general meeting, to:
(i) (A) issue ordinary shares of the Company whether by way of rights, bonus or
otherwise; and/or
(B) make or grant offers, agreements or options (collectively, “Instruments”) that
might or would require ordinary shares of the Company to be issued during
the continuance of this authority or thereafter, including but not limited to the
creation and issue of (as well as adjustments to) warrants, debentures,
convertible securities or other instruments convertible into ordinary shares of
the Company; and/or
ISEC HEALTHCARE LTD.
AND ITS SUBSIDIARIES
NOTES TO THE COMBINED FINANCIAL STATEMENTS
FOR THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012 AND 2013 (Continued)
B-49
26. Events subsequent to reporting period (Continued)
26.8 Pursuant to written resolutions passed on 22 September 2014 and 26 September 2014,
the shareholders of the Company approved, inter alia, the following: (Continued)
(C) notwithstanding that such authority may have ceased to be in force at the
time that Instruments are to be issued, issue additional Instruments arising
from adjustments made to the number of Instruments previously issued in the
event of rights, bonus or other capitalisation issues, at any time and upon
such terms and conditions and for such purposes and to such persons as the
Directors may in their absolute discretion deem fit; and
(ii) issue ordinary shares of the Company in pursuance of any Instrument made or
granted by the Directors pursuant to (A) above, while such authority was in force
(notwithstanding that such issue of ordinary shares of the Company pursuant to
the Instruments may occur after the expiration of the authority contained in this
resolution), provided that:
(A) the aggregate number of ordinary shares of the Company to be issued
pursuant to such authority does not exceed 100.0% of the post-placement
issued ordinary shares of the Company excluding treasury shares, and
provided further that the aggregate number of ordinary shares of the
Company to be issued other than on a pro-rata basis to shareholders shall
not exceed 50.0% of the post-placement issued ordinary shares of the
Company excluding treasury shares;
(B) in exercising such authority, the Company shall comply with the provisions of
the Catalist Rules for the time being in force (unless such compliance has
been waived by the SGX-ST) and the Articles of Association for the time
being of the Company; and
(C) unless revoked or varied by the Company in general meeting by ordinary
resolution, the authority so conferred shall continue in force until the
conclusion of the next annual general meeting of the Company or the date by
which the next annual general meeting of the Company is required by law to
be held, whichever is the earlier.
ISEC HEALTHCARE LTD.
AND ITS SUBSIDIARIES
NOTES TO THE COMBINED FINANCIAL STATEMENTS
FOR THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012 AND 2013 (Continued)
B-50
ISEC EYE PTE. LTD.
Audited Combined Financial Statements
For the financial years ended 31 December 2011, 2012 and 2013
APPENDIX C – INDEPENDENT AUDITORS’ REPORT AND AUDITED COMBINEDFINANCIAL STATEMENTS FOR THE FINANCIAL YEARS ENDED
31 DECEMBER 2011, 2012 AND 2013 IN RESPECT OF ISEC EYE PTE. LTD.
C-1
AUDITED COMBINED FINANCIAL STATEMENTS
FOR THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012 AND 2013
STATEMENT BY DIRECTORS
I, Lee Hung Ming, being the director of ISEC Eye Pte. Ltd. (the “Company”), do hereby state that,
in the opinion of Directors,
(i) the accompanying combined financial statements together with notes thereto are properly
drawn up in accordance with Singapore Financial Reporting Standards so as to present fairly,
in all material respects, the state of affairs of the Company as at 31 December 2011, 2012
and 2013 and of the results, changes in equity and cash flows of the Company for the
financial years ended on those dates, and
(ii) at the date of this statement, there are reasonable grounds to believe that the Company will
be able to pay its debts as and when they fall due.
Lee Hung Ming
Director
Singapore
14 October 2014
C-2
INDEPENDENT AUDITORS’ REPORT ON AUDITED COMBINED FINANCIAL STATEMENTS
FOR THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012 AND 2013
14 October 2014
The Board of Directors
ISEC Eye Pte. Ltd.
101 Thomson Road
#09-04 United Square
Singapore 307591
Report on the Combined Financial Statements
We have audited the accompanying combined financial statements of ISEC Eye Pte. Ltd. (the
“Company”) comprising the combined statements of financial position as at 31 December 2011,
2012 and 2013, the combined statements of comprehensive income, combined statements of
changes in equity and combined statements of cash flows for each of the financial years ended
31 December 2011, 2012 and 2013 and a summary of significant accounting policies and other
explanatory notes as set out on pages C-5 to C-32.
Management’s Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these combined 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 combined financial statements based on our
audits. We conducted our audits in accordance with Singapore Standards on Auditing. Those
standards require that we comply with ethical requirements and plan and perform the audits to
obtain reasonable assurance about whether the combined financial statements are free from
material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and
disclosures in the combined financial statements. The procedures selected depend on the
auditor’s judgement, including the assessment of the risks of material misstatement of the
combined financial statements, whether due to fraud or error. In making those risk assessments,
the auditor considers internal control relevant to the entity’s preparation and fair presentation of
combined 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 combined financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a
basis for our audit opinion.
C-3
INDEPENDENT AUDITORS’ REPORT ON AUDITED COMBINED FINANCIAL STATEMENTS
FOR THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012 AND 2013 (Continued)
Report on the Combined Financial Statements (Continued)
Opinion
In our opinion, the accompanying combined financial statements of the Company present fairly, in
all material respects, the state of affairs of the Company as at 31 December 2011, 2012 and 2013
and of its results of operations, changes in equity and cash flows for each of the financial years
ended 31 December 2011, 2012 and 2013 in accordance with the Singapore Financial Reporting
Standards.
Restriction on Distribution and Use
This report is made solely to you as a body and for inclusion in the Offer Document to be issued
in relation to the proposed initial public offering of ordinary shares of ISEC Healthcare Ltd.
(“ISEC”) in connection with the ISEC’s listing on Catalist, the sponsor-supervised listing platform
of the Singapore Exchange Securities Trading Limited.
BDO LLP
Public Accountants and
Chartered Accountants
Singapore
Leong Hon Mun Peter
Partner-in-charge
C-4
ISEC EYE PTE. LTD.
COMBINED STATEMENTS OF FINANCIAL POSITION
AS AT 31 DECEMBER 2011, 2012 AND 2013
Note 2011 2012 2013
$ $ $
ASSETS
Non-current asset
Plant and equipment 5 20,081 5,749 786
Current assets
Trade and other receivables 6 2,292,482 2,423,064 946,636
Cash and cash equivalents 7 2,492,333 4,766,508 2,825,205
4,784,815 7,189,572 3,771,841
Total assets 4,804,896 7,195,321 3,772,627
EQUITY AND LIABILITIES
Equity
Share capital 8 400 400 400
Retained earnings 2,792,020 4,841,396 1,153,460
Total equity 2,792,420 4,841,796 1,153,860
Non-current liability
Deferred tax liabilities 9 4,893 977 977
Current liabilities
Trade and other payables 10 1,334,012 1,671,837 1,965,038
Current income tax payable 673,571 680,711 652,752
2,007,583 2,352,548 2,617,790
Total liabilities 2,012,476 2,353,525 2,618,767
Total equity and liabilities 4,804,896 7,195,321 3,772,627
The accompanying notes form an integral part of these financial statements.
C-5
ISEC EYE PTE. LTD.
COMBINED STATEMENTS OF COMPREHENSIVE INCOME
FOR THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012 AND 2013
Note 2011 2012 2013
$ $ $
Revenue 11 4,778,316 5,524,525 4,859,720
Cost of sales (144,149) (194,678) (166,080)
Gross profit 4,634,167 5,329,847 4,693,640
Other item of income
Other income 12 10,000 6,145 36,406
Other item of expense
Administrative expenses (805,810) (793,456) (769,404)
Profit before income tax 13 3,838,357 4,542,536 3,960,642
Income tax expense 14 (570,074) (613,123) (612,460)
Profit for the financial year, representing
total comprehensive income for the
financial year 3,268,283 3,929,413 3,348,182
The accompanying notes form an integral part of these financial statements.
C-6
ISEC EYE PTE. LTD.
COMBINED STATEMENTS OF CHANGES IN EQUITY
FOR THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012 AND 2013
Note
Share
capital
Retained
earnings
Total
equity
$ $ $
2011
Balance at 1 January 2011 400 2,503,737 2,504,137
Profit for the financial year – 3,268,283 3,268,283
Total comprehensive income for the
financial year – 3,268,283 3,268,283
Distributions to owner
Dividends 15 – (2,980,000) (2,980,000)
Total transaction with owner – (2,980,000) (2,980,000)
Balance at 31 December 2011 400 2,792,020 2,792,420
2012
Balance at 1 January 2012 400 2,792,020 2,792,420
Profit for the financial year – 3,929,413 3,929,413
Total comprehensive income for the
financial year – 3,929,413 3,929,413
Distributions to owner
Dividends 15 – (1,880,037) (1,880,037)
Total transaction with owner – (1,880,037) (1,880,037)
Balance at 31 December 2012 400 4,841,396 4,841,796
2013
Balance at 1 January 2013 400 4,841,396 4,841,796
Profit for the financial year – 3,348,182 3,348,182
Total comprehensive income for the
financial year – 3,348,182 3,348,182
Distributions to owner
Dividends 15 – (7,036,118) (7,036,118)
Total transaction with owner – (7,036,118) (7,036,118)
Balance at 31 December 2013 400 1,153,460 1,153,860
The accompanying notes form an integral part of these financial statements.
C-7
ISEC EYE PTE. LTD.
COMBINED STATEMENTS OF CASH FLOWS
FOR THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012 AND 2013
Note 2011 2012 2013
$ $ $
Operating activities
Profit before income tax 3,838,357 4,542,536 3,960,642
Adjustments for:
Bad receivables written off 21,252 – 5,885
Depreciation of plant and equipment 15,955 14,332 4,963
Operating cash flows before working
capital changes 3,875,564 4,556,868 3,971,490
Working capital changes:
Trade and other receivables 399,817 (130,582) 1,466,167
Trade and other payables 164,702 337,825 (1,502,423)
Cash generated from operations 4,440,083 4,764,111 3,935,234
Income tax paid (727,384) (609,899) (640,419)
Net cash from operating activities 3,712,699 4,154,212 3,294,815
Investing activity
Purchase of plant and equipment,
representing net cash used in
investing activity (4,453) – –
Financing activity
Dividends paid, representing net cash
used in financing activity (2,980,000) (1,880,037) (5,236,118)
Net change in cash and cash
equivalents 728,246 2,274,175 (1,941,303)
Cash and cash equivalents at
beginning of financial year 1,764,087 2,492,333 4,766,508
Cash and cash equivalents at end of
financial year 7 2,492,333 4,766,508 2,825,205
The accompanying notes form an integral part of these financial statements.
C-8
These notes form an integral part and should be read in conjunction with the combined financial
statements.
These combined financial statements have been prepared for inclusion in the Offer Document of
ISEC Healthcare Ltd.. The combined financial statements of ISEC Eye Pte. Ltd. (the “Company”)
were authorised for issue by the Directors of the Company on 14 October 2014.
1. General corporate information
1.1 Domicile and activities
The Company was incorporated in the Republic of Singapore on 15 July 2014 under the
Singapore Companies Act, Chapter 50 (the “Act”) as a private limited liability company
in the name of ISEC Eye Pte. Ltd. The Company’s registration number is 201420664C.
The address of the Company’s registered office and principal place of business is 101
Thomson Road #09-04 United Square Singapore 307591.
The principal activities of the Company are those of providing medical eye care
services.
1.2 Restructuring exercise
i. Incorporation of the Company
The Company was incorporated in the Republic of Singapore on 15 July 2014 as
a private limited company for purposes of the acquisition described in Step ii below
as well as to be the party signing the Service Agreement (“PEC Service
Agreement”) to be entered into between the Company and Parkway Hospitals
Singapore Pte Ltd (“PHS”), relating to services to be provided by the Company to
PHS in relation to Lee Hung Ming Eye Centre at Gleneagles Hospital, Singapore.
ii Acquisition of business by the Company
Pursuant to a service agreement dated 18 September 2009 between PHS and Lee
HM & Co Pte. Ltd. (“Lee HM & Co”), Lee HM & Co provided specialist medical
ophthalmology services to PHS. It was arranged that revenue from the service
agreement with Lee HM & Co for the various types of medical procedures were
directed by Lee HM & Co to be taken into account by Lee HM & Co, Singapore
Lasik Hub Pte. Ltd., Perfect Vision Eye Centre Pte. Ltd. and Lee Hung Ming Eye
Centre Pte. Ltd. (collectively, the “LHM Companies”, each wholly-owned by Dr Lee
Hung Ming).
ISEC EYE PTE. LTD.
NOTES TO THE COMBINED FINANCIAL STATEMENTS
FOR THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012 AND 2013
C-9
1. General corporate information (Continued)
1.2 Restructuring exercise (Continued)
ii Acquisition of business by the Company (Continued)
In order to streamline operations, the entire business of each of the LHM
Companies was acquired by the Company for purposes of the Restructuring
Exercise (“Business Acquisition”). The Business Acquisition allows for the track
record of the LHM companies whose businesses were conducted by Dr Lee Hung
Ming to be taken into account by the Company after the Restructuring Exercise.
Pursuant to the signing of the PEC Service Agreement between PHS and the
Company, the businesses previously undertaken by the LHM Companies were
undertaken by the Company. It is a term of the Business Acquisition that Dr Lee
Hung Ming procures that the LHM Companies be struck off so that the LHM
Companies will not be able to compete with the Company.
2. Basis of preparation of combined financial statements
Upon the completion of the restructuring exercise as set out in Note 1.2 to the combined
financial statements, the entire business of each of the LHM companies became businesses
of the Company. Although the Company was incorporated on 15 July 2014 and the
restructuring exercise was completed in 26 September 2014, the combined financial
statements for the financial years ended 31 December 2011, 2012 and 2013 are presented
for the Company as a continuing entity as it is ultimately controlled by a common
shareholder/owner both before and after the restructuring exercise.
The combined financial statements of the Company for the financial years ended 31
December 2011, 2012 and 2013 were prepared using the merger accounting principles as if
the businesses had been operating under the Company as a single economic enterprise from
the beginning of the earliest comparative period covered or the dates of commencement of
the businesses. The assets and liabilities are brought into the combined financial statements
at their existing carrying amounts.
For the purpose of inclusion in the combined financial statements, BDO LLP, Singapore
audited the financial statements of Lee HM & Co Pte. Ltd., Singapore Lasik Hub Pte. Ltd.,
Perfect Vision Eye Centre Pte. Ltd. and Lee Hung Ming Eye Centre Pte. Ltd. for the financial
years ended 31 December 2011 and 2012 which were previously exempted under Singapore
Companies Act.
The audited combined financial statements of the Company for the financial years ended 31
December 2011, 2012 and 2013 have been prepared in accordance with Singapore Financial
Reporting Standards (“FRS”) and on a historical cost convention except as disclosed in the
accounting policies in Note 3 to the combined financial statements.
Items included in the financial statements are measured using the currency of the primary
economic environment in which the entity operates (“functional currency”).
ISEC EYE PTE. LTD.
NOTES TO THE COMBINED FINANCIAL STATEMENTS
FOR THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012 AND 2013 (Continued)
C-10
2. Basis of preparation of combined financial statements (Continued)
The combined financial statements are presented in Singapore dollar (“$”), which is the
functional currency of the Company and the presentation currency for the combined financial
statements.
The preparation of combined financial statements in conformity with FRS requires the
management to exercise judgement in the process of applying the Company’s accounting
policies and requires the use of accounting estimates and assumptions that affect the
reported amounts of assets and liabilities and disclosures of contingent assets and liabilities
at the end of the reporting periods, and the reported amounts of revenue and expenses
throughout the financial years. Although these estimates are based on management’s best
knowledge of historical experience and other factors, including expectations of future events
that are believed to be reasonable under the circumstances, actual results may ultimately
differ from those estimates. The estimates and underlying assumptions are reviewed on an
on-going basis. Revisions to accounting estimates are recognised in the financial year in
which the estimate is revised if the revision affects only that financial year or in the financial
year of the revision and future financial years if the revision affects both current and future
financial years.
3. Summary of significant accounting policies
Critical accounting judgements and key sources of estimation uncertainty used that are
significant to the combined financial statements are disclosed in Note 4 to the combined
financial statements.
3.1 Changes in accounting policies
During the financial years ended 31 December 2011, 2012 and 2013, the Company
adopted the new or revised Singapore Financial Reporting Standards and
Interpretations of FRS (“INT FRS”) that are relevant to its operations and effective for
each annual period respectively. Changes to the Company’s accounting policies have
been made as required, in accordance with the relevant transitional provisions in the
respective FRS and INT FRS. The adoption of the new or revised FRS and INT FRS did
not result in any substantial changes to the Company’s accounting policies and has no
material effect on the amounts reported for the respective financial years.
ISEC EYE PTE. LTD.
NOTES TO THE COMBINED FINANCIAL STATEMENTS
FOR THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012 AND 2013 (Continued)
C-11
3. Summary of significant accounting policies (Continued)
3.1 Changes in accounting policies (Continued)
FRS and INT FRS issued but not yet effective
As at the date of the authorisation of these financial statements, the Company has not
adopted the following FRS and INT FRS that have been issued but not yet effective:
Effective date
(annual periods
beginning on
or after)
FRS 19 : Amendments to FRS 19: Defined Benefit
Plans: Employee Contributions
1 July 2014
FRS 27 : Separate Financial Statements 1 January 2014
: Amendments to FRS 27 – Investment
Entities
1 January 2014
FRS 28 : Investments in Associates and Joint
Ventures
1 January 2014
FRS 32 : Amendments to FRS 32 – Offsetting
Financial Assets and Financial
Liabilities
1 January 2014
FRS 36 : Amendments to FRS 36 – Recoverable
Amount Disclosures for Non-Financial
Assets
1 January 2014
FRS 39 : Amendments to FRS 39 – Novation of
Derivatives and Continuation of Hedge
Accounting
1 January 2014
FRS 110 : Consolidated Financial Statements 1 January 2014
: Amendments to FRS 110 – Investment
Entities
1 January 2014
FRS 111 : Joint Arrangements 1 January 2014
FRS 112 : Disclosure of Interests in Other Entities 1 January 2014
: Amendments to FRS 112 – Investment
Entities
1 January 2014
FRS 114 : Regulatory Deferral Accounts 1 January 2016
INT FRS 121 : Levies 1 January 2014
Improvements to FRSs (2014) 1 July 2014
ISEC EYE PTE. LTD.
NOTES TO THE COMBINED FINANCIAL STATEMENTS
FOR THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012 AND 2013 (Continued)
C-12
3. Summary of significant accounting policies (Continued)
3.1 Changes in accounting policies (Continued)
FRS and INT FRS issued but not yet effective (Continued)
Consequential amendments were also made to various standards as a result of these
new or revised standards.
The Company expects that the adoption of the above FRS and INT FRS, if applicable,
will have no material impact on the combined financial statements in the period of initial
adoption.
3.2 Plant and equipment
Plant and equipment are initially recorded at cost. Subsequent to initial recognition,
plant and equipment are stated at cost less accumulated depreciation and impairment
losses, if any.
The cost of plant and equipment includes expenditure that is directly attributable to the
acquisition of the items. Dismantlement, removal or restoration costs are included as
part of the cost of plant and equipment if the obligation for dismantlement, removal or
restoration is incurred as a consequence of acquiring or using the plant and equipment.
Subsequent expenditure relating to the plant and equipment that has already been
recognised is added to the carrying amount of the asset when it is probable that the
future economic benefits, in excess of the standard of performance of the asset before
the expenditure was made, will flow to the Company, and the cost can be reliably
measured. Other subsequent expenditure is recognised as an expense during the
financial year in which it is incurred.
An item of plant and equipment is derecognised upon disposal or when no future
economic benefits are expected from its use or disposal. Any gain or loss arising on
derecognition of the asset is included in profit or loss in the financial year the asset is
derecognised.
Depreciation is calculated using the straight-line method to allocate the depreciable
amounts of the plant and equipment over their estimated useful lives as follows:
Years
Computer equipment 5
Medical equipment 5
The residual values, estimated useful lives and depreciation method are reviewed at the
end of each reporting period to ensure that the residual values, period of depreciation
and depreciation method are consistent with previous estimates and expected pattern
of consumption of the future economic benefits embodied in the items of plant and
equipment.
ISEC EYE PTE. LTD.
NOTES TO THE COMBINED FINANCIAL STATEMENTS
FOR THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012 AND 2013 (Continued)
C-13
3. Summary of significant accounting policies (Continued)
3.3 Impairment of non-financial assets
The carrying amounts of non-financial assets are reviewed at the end of each reporting
period to determine whether there is any indication of impairment loss and whenever
events or changes in circumstances indicate that the carrying amount may not be
recoverable. If any such indication exists, or when annual impairment testing for an
asset is required, the asset’s recoverable amount is estimated.
An impairment loss is recognised whenever the carrying amount of an asset or its
cash-generating unit exceeds its recoverable amount. A cash-generating unit is the
smallest identifiable asset group that generates cash flows that largely are independent
from other assets and groups of assets. Impairment loss is recognised in profit or loss
unless it reverses a previous revaluation credited to other comprehensive income, in
which case it is charged to other comprehensive income up to the amount of any
previous revaluation.
The recoverable amount of an asset or cash-generating unit is the higher of its fair value
less costs to sell and its value in use. Recoverable amount is determined for individual
asset, unless the asset does not generate cash inflows that are largely independent of
those from other assets or groups of assets. If this is the case, the recoverable amount
is determined for the cash-generating unit to which the assets belong. The fair value
less costs to sell is the amount obtainable from the sale of an asset or cash-generating
unit in an arm’s length transaction between knowledgeable willing parties less costs of
disposal. Value in use is the present value of estimated future cash flows expected to
be derived from the continuing use of an asset and from its disposal at the end of its
useful life, discounted at pre-tax rate that reflects current market assessment of the time
value of money and the risks specific to the asset or cash-generating unit for which the
future cash flow estimates have not been adjusted.
An assessment is made at the end of each reporting period as to whether there is any
indication that an impairment loss recognised in prior periods for an asset may no
longer exist or may have decreased. If such indication exists, the recoverable amount
is estimated. An impairment loss recognised in prior periods is reversed only if there has
been a change in the estimates used to determine the recoverable amount since the
last impairment loss was recognised. If that is the case, the carrying amount of the asset
is increased to its 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, if no impairment loss had been recognised.
Reversals of impairment loss are recognised in profit or loss unless the asset is carried
at revalued amount, in which case the reversal in excess of impairment losses
recognised in profit or loss in prior periods is treated as a revaluation increase. After
such a reversal, the depreciation is adjusted in future periods to allocate the asset’s
revised carrying amount, less any residual value, on a systematic basis over its
remaining useful life.
ISEC EYE PTE. LTD.
NOTES TO THE COMBINED FINANCIAL STATEMENTS
FOR THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012 AND 2013 (Continued)
C-14
3. Summary of significant accounting policies (Continued)
3.4 Financial assets
The Company classifies its financial assets as loans and receivables. The classification
depends on the purpose of which the assets were acquired. The management
determines the classification of the financial assets at initial recognition and re-
evaluates this designation at the end of the reporting period, where allowed and
appropriate.
(i) Loans and receivables
Loans and receivables are non-derivative financial assets with fixed or
determinable payments that are not quoted in an active market. Loans and
receivables are classified within “trade and other receivables” and “cash and cash
equivalents” on the combined statements of financial position.
Recognition and derecognition
Financial assets are recognised on the combined statements of financial position when,
and only when, the Company becomes a party to contractual provisions of the financial
instruments.
Regular way purchases and sales of financial assets are recognised on trade-date, the
date on which the Company commits to purchase or sell the asset.
Financial assets are derecognised when the rights to receive cash flows from the
financial assets have expired or have been transferred and the Company has
transferred substantially all risks and rewards of ownership.
On derecognition of a financial asset, the difference between the carrying amount and
the net sale proceeds is recognised in profit or loss.
Initial and subsequent measurement
Financial assets are initially recognised at fair value plus in the case of financial assets
not at fair value through profit or loss, directly attributable transaction costs.
After initial recognition, loans and receivables are carried at amortised cost using the
effective interest method, less impairment loss, if any.
The effective interest method is a method of calculating the amortised cost of a financial
instrument and of allocating interest income or expense over the relevant period. The
effective interest rate is the rate that exactly discounts estimated future cash receipts
or payments through the expected life of the financial instrument, or where appropriate,
a shorter period, to the net carrying amount of the financial instrument income and
expense are recognised on an effective interest basis for debt instruments.
ISEC EYE PTE. LTD.
NOTES TO THE COMBINED FINANCIAL STATEMENTS
FOR THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012 AND 2013 (Continued)
C-15
3. Summary of significant accounting policies (Continued)
3.4 Financial assets (Continued)
Impairment
The Company assesses at the end of each reporting period whether there is objective
evidence that a financial asset or a group of financial assets is impaired.
(i) Loans and receivables
An allowance for impairment loss of loans and receivables is recognised when
there is objective evidence that the Company will not be able to collect all amounts
due according to the original terms of the receivables. The amount of allowance is
the difference between the asset’s carrying amount and the present value of
estimated future cash flows, discounted at the original effective interest rate. The
carrying amount of the asset is reduced through the use of an allowance account.
The amount of the loss is recognised in profit or loss.
If, in a subsequent period, the amount of the impairment loss decreases and the
decrease can be related objectively to an event occurring after the impairment loss
was recognised, the previously recognised impairment loss is reversed either
directly or by adjusting an allowance account. Any subsequent reversal of an
impairment loss is recognised in profit or loss, to the extent that the carrying
amount of the asset does not exceed its amortised cost at the reversal date.
3.5 Cash and cash equivalents
Cash and cash equivalents comprise cash on hand, cash and deposits with banks.
Cash and cash equivalents are short-term, highly liquid investments that are readily
convertible to known amounts of cash and which are subject to an insignificant risk of
change in value.
3.6 Equity instruments
An equity instrument is any contract that evidences a residual interest in the assets of
an entity after deducting all of its liabilities.
Ordinary shares are classified as equity and recognised at the fair value of the
consideration received.
Incremental costs directly attributable to the issuance of new equity instruments are
shown in equity as a deduction from the proceeds.
ISEC EYE PTE. LTD.
NOTES TO THE COMBINED FINANCIAL STATEMENTS
FOR THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012 AND 2013 (Continued)
C-16
3. Summary of significant accounting policies (Continued)
3.7 Financial liabilities
Financial liabilities are classified as either financial liabilities at fair value through profit
or loss or other financial liabilities.
Financial liabilities are classified as fair value through profit or loss if the financial
liability is either held for trading or it is designated as such upon initial recognition. The
Company has not designated any financial liabilities as fair value through profit or loss
upon initial recognition.
The accounting policies adopted for other financial liabilities are set out below:
(i) Trade and other payables
Trade and other payables are recognised initially at cost which represents the fair
value of the consideration to be paid in the future, less transaction cost, for goods
received or services rendered, whether or not billed to the Company, and are
subsequently measured at amortised cost using the effective interest method.
Recognition and derecognition
Financial liabilities are recognised on the combined statements of financial position
when, and only when, the Company becomes a party to the contractual provisions of the
financial instruments.
Financial liabilities are derecognised when the contractual obligation has been
discharged or cancelled or expired. On derecognition of a financial liability, the
difference between the carrying amount and the consideration paid is recognised in
profit or loss.
When an existing liability is replaced by another form from the same lender on
substantially different terms, or the terms of an existing liability are substantially
modified, such exchange or modification is treated as derecognition of the original
liability and the recognition of a new liability, and the difference in the respective
carrying amounts is recognised in profit or loss.
3.8 Revenue recognition
Revenue is measured at fair value of the consideration received or receivable for the
sale of goods and services rendered in the ordinary course of business. Revenue is
recognised to the extent that it is probable that the economic benefits will flow to the
entity and the revenue can be reliably measured. Revenue is presented, net of rebates,
discounts and sales related taxes.
Revenue from rendering of services is recognised when the services have been
performed and accepted by the customers in accordance with the relevant terms and
conditions of the contract.
ISEC EYE PTE. LTD.
NOTES TO THE COMBINED FINANCIAL STATEMENTS
FOR THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012 AND 2013 (Continued)
C-17
3. Summary of significant accounting policies (Continued)
3.9 Grants
Grants are recognised at their fair value where there is reasonable assurance that the
grant will be received and all attaching conditions will be complied with. Where the grant
relates to expenditures, which are not capitalised, the fair value of grants are credited
to profit or loss as and when the underlying expenses are included and recognised in
profit or loss to match such related expenditures.
Where the grant relates to an asset, the fair value is recognised as deferred capital
grant on the statements of financial position and is amortised to profit or loss over the
expected useful life of the relevant asset by equal annual instalment.
3.10 Employee benefits
Defined contribution plan
Contributions to defined contribution plans are recognised as expenses in profit or loss
in the same financial year as the employment that gives rise to the contributions.
3.11 Income tax
Income tax expense comprises current and deferred taxes. Income tax expense is
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 income tax expense is the expected tax payable on the taxable income for the
respective financial years, using tax rates enacted or substantively enacted by the end
of the reporting period, and any adjustment to income tax payable in respect of previous
financial years.
Deferred tax is provided, using the liability method, for temporary differences at the end
of the reporting period between the tax bases of assets and liabilities and their carrying
amounts for financial reporting purposes. Deferred tax is measured using the tax rates
expected to be applied to the temporary differences when they are realised or settled,
based on tax rates enacted or substantively enacted by the end of the reporting period.
Deferred tax assets are recognised only to the extent that it is probable that future
taxable profits will be available against which the temporary differences can be utilised.
Deferred tax assets are reviewed at the end of each reporting period and reduced to the
extent that it is no longer probable that the related tax benefit will be realised.
Unrecognised deferred tax assets are reassessed at the end of each reporting period
and are recognised to the extent that it has become probable that future taxable profits
will be available against which the temporary differences can be utilised.
ISEC EYE PTE. LTD.
NOTES TO THE COMBINED FINANCIAL STATEMENTS
FOR THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012 AND 2013 (Continued)
C-18
3. Summary of significant accounting policies (Continued)
3.11 Income tax (Continued)
Deferred tax relating to items recognised outside profit or loss is recognised outside
profit or loss. Deferred tax items are recognised in correlation to the underlying
transaction either in other comprehensive income or directly in equity and deferred tax
arising from a business combination is adjusted against goodwill on acquisition.
Deferred tax assets and liabilities are offset if a legally enforceable right exists to set off
current tax assets against current tax liabilities and the deferred taxes relate to the
same tax authority and where there is intention to settle the current tax assets and
liabilities on a net basis.
3.12 Dividends
Dividends are recognised when they become legally payable. Interim dividends are
recorded in the financial year in which they are declared payable. Final dividends are
recorded in the financial year in which the dividends are approved by shareholders.
4. Critical accounting judgements and key sources of estimation uncertainty
4.1 Critical judgements made in applying the accounting policies
In the process of applying the Company’s accounting policies, the management is of the
opinion that there are no critical judgements involved that have a significant effect on
the amounts recognised in the combined financial statements except as discussed
below.
(i) Impairment of financial assets
The Company follows the guidance of FRS 39 in determining when a financial
asset is impaired. This determination requires significant judgement. The
Company evaluates, among other factors, the duration and extent to which the fair
value of a financial asset is less than its cost and the financial health of the
near-term business outlook for a financial asset, including factors such as industry
and sector performance, changes in technology and operational and financing
cash flows.
ISEC EYE PTE. LTD.
NOTES TO THE COMBINED FINANCIAL STATEMENTS
FOR THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012 AND 2013 (Continued)
C-19
4. Critical accounting judgements and key sources of estimation uncertainty (Continued)
4.2 Key sources of estimation uncertainty
The key assumptions concerning the future and other key sources of estimation
uncertainty at the end of the reporting period that have a significant risk of causing a
material adjustment to the carrying amounts of assets and liabilities and the reported
amounts of revenue and expenses within the next financial year are discussed below.
(i) Allowance for impairment loss on receivables
The management establishes allowance for impairment loss on receivables on a
case-by-case basis when they believe that payment of amounts owed is unlikely
to occur. In establishing these allowances, the management considers its
historical experience and changes to its customers’ financial position. If the
financial conditions of receivables were to deteriorate, resulting in impairment of
their abilities to make the required payments, additional allowances may be
required. The carrying amounts of trade and other receivables as at 31 December
2011, 2012 and 2013 were $2,292,482, $2,423,064 and $946,636 respectively.
(ii) Income taxes
The Company has exposure to income taxes in numerous jurisdictions. Significant
judgement is involved in determining the Company’s provision for income taxes.
The Company recognises expected assets and liabilities for tax based on an
estimation of the likely taxes due, which requires significant judgement as to the
ultimate tax determination of certain items. Where the actual liability arising from
these issues differs from these estimates, such differences will have an impact on
income tax and deferred tax provisions in the financial year when such
determination is made.
The carrying amounts of deferred tax liabilities as at 31 December 2011, 2012 and
2013 were $4,893, $977 and $977 respectively. The carrying amounts of current
income tax payable as at 31 December 2011, 2012 and 2013 were $673,571,
$680,711 and $652,752 respectively.
ISEC EYE PTE. LTD.
NOTES TO THE COMBINED FINANCIAL STATEMENTS
FOR THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012 AND 2013 (Continued)
C-20
5. Plant and equipment
Computer
equipment
Medical
equipment Total
$ $ $
2011
Cost
Balance at beginning of financial year 27,341 35,262 62,603
Additions 2,143 2,310 4,453
Balance at end of financial year 29,484 37,572 67,056
Accumulated depreciation
Balance at beginning of financial year 12,316 18,704 31,020
Depreciation for the financial year 7,136 8,819 15,955
Balance at end of financial year 19,452 27,523 46,975
Carrying amount
Balance at end of financial year 10,032 10,049 20,081
2012
Cost
Balance at beginning and end of financial
year 29,484 37,572 67,056
Accumulated depreciation
Balance at beginning of financial year 19,452 27,523 46,975
Depreciation for the financial year 6,039 8,293 14,332
Balance at end of financial year 25,491 35,816 61,307
Carrying amount
Balance at end of financial year 3,993 1,756 5,749
2013
Cost
Balance at beginning and end of financial
year 29,484 37,572 67,056
Accumulated depreciation
Balance at beginning of financial year 25,491 35,816 61,307
Depreciation for the financial year 3,458 1,505 4,963
Balance at end of financial year 28,949 37,321 66,270
Carrying amount
Balance at end of financial year 535 251 786
ISEC EYE PTE. LTD.
NOTES TO THE COMBINED FINANCIAL STATEMENTS
FOR THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012 AND 2013 (Continued)
C-21
6. Trade and other receivables
2011 2012 2013
$ $ $
Trade receivable – third party 1,398,808 673,053 849,758
Non-trade receivables
– third party 5,885 5,885 –
– a director of the Company 887,789 1,744,126 96,878
893,674 1,750,011 96,878
2,292,482 2,423,064 946,636
Trade receivables are unsecured, non-interest bearing and generally on 30 days credit
terms.
The non-trade amount due from a director of the Company was unsecured, non-interest
bearing and repayable on demand.
The currency profile of trade and other receivables as at the end of the respective reporting
periods is Singapore dollar.
7. Cash and cash equivalents
The currency profile of cash and cash equivalents as at the end of the respective reporting
periods is Singapore dollar.
8. Share capital
As the Company was incorporated only on 15 July 2014, for the purpose of these combined
financial statements, the share capital as at 31 December 2011, 2012 and 2013 represents
the aggregation of the issued and paid up capital of Lee HM & Co Pte. Ltd., Singapore Lasik
Hub Pte. Ltd., Perfect Vision Eye Centre Pte. Ltd. and Lee Hung Ming Eye Centre Pte. Ltd
whose businesses were acquired by the Company.
9. Deferred tax liabilities
2011 2012 2013
$ $ $
Balance at beginning of financial year 4,893 4,893 977
Charged to profit or loss – (3,916) –
Balance at end of financial year 4,893 977 977
Deferred tax liabilities are attributable to temporary differences between tax written down
values and the carrying amounts of plant and equipment computed at statutory income tax
rate.
ISEC EYE PTE. LTD.
NOTES TO THE COMBINED FINANCIAL STATEMENTS
FOR THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012 AND 2013 (Continued)
C-22
10. Trade and other payables
2011 2012 2013
$ $ $
Trade payables – third parties 1,739 5,321 9,131
Non-trade payables
– third parties – 125,035 –
– a director of the Company 612,769 716,733 –
– director of the related parties 641,112 750,000 –
1,253,881 1,591,768 –
Accrued expenses 18,221 18,223 112,074
Dividend payables – – 1,800,000
Goods and services tax payable 60,171 56,525 43,833
1,334,012 1,671,837 1,965,038
Trade payables are unsecured, non-interest bearing and normally on 30 days’ terms.
Non-trade payables due to a director of the Company and directors of related parties are
unsecured, non-interest bearing and repayable on demand.
The currency profile of trade and others payables as at the end of the respective reporting
periods is Singapore dollar.
11. Revenue
Revenue represents the fees charged on medical, consultancy, treatment and surgery
services rendered.
12. Other income
2011 2012 2013
$ $ $
Government grants 10,000 5,885 36,406
Others – 260 –
10,000 6,145 36,406
ISEC EYE PTE. LTD.
NOTES TO THE COMBINED FINANCIAL STATEMENTS
FOR THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012 AND 2013 (Continued)
C-23
13. Profit before income tax
In addition to the charges and credits disclosed elsewhere in the notes to the combined
financial statements, the above includes the following charges:
2011 2012 2013
$ $ $
Cost of sales
Cost of inventories 135,330 186,385 164,575
Administrative expenses
Bad receivables written off 21,252 – 5,885
Employee benefits expense
– salaries, bonus and other benefits 128,000 132,000 144,000
– defined contribution plans 11,520 13,600 9,600
Directors’ fees 510,000 510,000 510,000
Depreciation of plant and equipment are recognised in the following line items of Company’s
profit or loss:
2011 2012 2013
$ $ $
Cost of sales 8,819 8,293 1,505
Administrative expenses 7,136 6,039 3,458
15,955 14,332 4,963
Employee benefit expenses include the remuneration of Directors of the Company as
disclosed in Note 16 to the combined financial statements.
ISEC EYE PTE. LTD.
NOTES TO THE COMBINED FINANCIAL STATEMENTS
FOR THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012 AND 2013 (Continued)
C-24
14. Income tax expense
2011 2012 2013
$ $ $
Current income tax
– current financial year 570,074 617,039 612,460
Deferred tax
– current financial year – (3,916) –
570,074 613,123 612,460
Reconciliation of effective income tax rate
2011 2012 2013
$ $ $
Profit before income tax 3,838,357 4,542,536 3,960,642
Income tax calculated at Singapore’s
statutory tax rate (2011: 17%, 2012: 17%,
2013: 17%) 652,521 772,231 673,309
Tax effect of non-deductible expenses for
income tax purposes – – 53,529
Tax effect of tax exempt income (84,819) (89,798) (84,819)
Corporate tax rebate – (60,000) (30,000)
Others 2,372 (9,310) 441
570,074 613,123 612,460
ISEC EYE PTE. LTD.
NOTES TO THE COMBINED FINANCIAL STATEMENTS
FOR THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012 AND 2013 (Continued)
C-25
15. Dividends
2011 2012 2013
$ $ $
Lee HM & Co Pte. Ltd. paid the following dividends
(a) In respect of financial year ended
31 December 2011
First interim tax exempt dividend of $18,000.00
per ordinary share 1,800,000 – –
(b) In respect of financial year ended
31 December 2012
First interim tax exempt dividend of $13,436.83
per ordinary share – 1,343,683 –
(c) In respect of financial year ended
31 December 2013
First interim tax exempt dividend of $15,543.72
per ordinary share – – 1,554,372
Lee Hung Ming Eye Centre Pte. Ltd. paid the
following dividends
(a) In respect of financial year ended
31 December 2011
First interim tax exempt dividend of $8,000.00
per ordinary share 80,000 – –
(b) In respect of financial year ended
31 December 2012
First interim tax exempt dividend of $1,221.40
per ordinary share – 122,140 –
(c) In respect of financial year ended
31 December 2013
First interim tax exempt dividend of $5,432.25
per ordinary share – – 543,225
Singapore Lasik Hub Pte. Ltd. paid the following
dividends
(a) In respect of financial year ended
31 December 2013
First interim tax exempt dividend of $9,389.79
per ordinary share – – 938,979
Perfect Vision Eye Centre Pte. Ltd. paid the following
dividends
(a) In respect of financial year ended
31 December 2011
First interim tax exempt dividend of $11,000.00
per ordinary share 1,100,000 – –
(b) In respect of financial year ended
31 December 2012
First interim tax exempt dividend of $4,142.14
per ordinary share – 414,214 –
(c) In respect of financial year ended
31 December 2013
First interim tax exempt dividend of $39,995.42
per ordinary share – – 3,999,542
2,980,000 1,880,037 7,036,118
ISEC EYE PTE. LTD.
NOTES TO THE COMBINED FINANCIAL STATEMENTS
FOR THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012 AND 2013 (Continued)
C-26
16. Significant related party transactions
For the purpose of these combined financial statements, parties are considered to be related
to the Company if the Company has 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 Company and the party are subject to common control or common
significant influence. Related parties may be individuals or other entities.
In addition to the related party information disclosed elsewhere in the combined financial
statements, the following were significant related party transactions at rates and terms
agreed between the Company with its related parties during the financial years ended
31 December 2011, 2012 and 2013:
2011 2012 2013
$ $ $
With Director of the Company
Payment on behalf of 978,915 1,054,904 5,626,216
Payment on behalf by (65,086) (62,225) (12,612)
Compensation of key management personnel
Key management personnel are directors of the Company and those persons having
authority and responsibility for planning, directing and controlling the activities of the
Company, directly, or indirectly.
The remuneration of directors of the Company during the financial years ended 31 December
2011, 2012 and 2013 were as follows:
2011 2012 2013
$ $ $
Director of the Company
– short-term employee benefits 128,000 132,000 144,000
– post employment benefits 11,520 13,600 9,600
139,520 145,600 153,600
ISEC EYE PTE. LTD.
NOTES TO THE COMBINED FINANCIAL STATEMENTS
FOR THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012 AND 2013 (Continued)
C-27
17. Financial instruments, financial risks and capital management
The Company’s activities expose it to credit risks, market risks (including foreign currency
risks and interest rates risks) and liquidity risks arising in the ordinary course of business.
The Company’s overall risk management strategy seeks to minimise adverse effects from the
volatility of financial markets on the Company’s financial performance.
The Board of Directors is responsible for setting the objectives and underlying principles of
financial risk management for the Company. The management then establishes the detailed
policies such as risk identification and measurement, exposure limits and hedging strategies,
in accordance with the objectives and underlying principles approved by the Board of
Directors.
The Company does not hold or issue derivative financial instruments for trading purposes or
to hedge against fluctuations, if any, in interest rates and foreign exchange rates.
There has been no change to the Company’s exposure to these financial risks or the manner
in which it manages and measures the risk. If necessary, market risk exposures are
measured using sensitivity analysis indicated below.
17.1 Credit risks
Credit risks refer to the risk that counterparty will default on its contractual obligations
resulting in a loss to the Company. The Company has adopted a policy of only dealing
with creditworthy counterparties as a means of mitigating the risk of financial loss from
defaults. The Company performs ongoing credit evaluation of its counterparties’
financial condition and generally does not require collaterals.
The Company does not have any significant credit exposure to any single counterparty
or any company of counterparties having similar characteristics except for an amount
due from third party trade receivables and non-trade amount due from a director of the
Company amounting to $2,286,597, $2,417,179 and $946,636 as at 31 December 2011,
2012 and 2013 respectively.
The carrying amounts of financial assets recorded in the combined financial
statements, grossed up for any allowances for impairment losses, represents the
Company’s maximum exposure to credit risks.
The Company’s major classes of financial assets are trade and other receivables and
cash and cash equivalents.
Trade receivables that are neither past due nor impaired are substantially companies
with good collection track record with the Company.
Bank deposits are mainly deposits with reputable banks with minimum risk of default.
ISEC EYE PTE. LTD.
NOTES TO THE COMBINED FINANCIAL STATEMENTS
FOR THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012 AND 2013 (Continued)
C-28
17. Financial instruments, financial risks and capital management (Continued)
17.1 Credit risks (Continued)
As at the end of the respective reporting periods, the age analysis of trade receivables
past due but not impaired is as follows:
2011 2012 2013
$ $ $
Past due less than 1 month 399,535 92,545 82,135
Past due 1 to 2 months 290,929 – –
Past due more than 2 months 188,120 – –
17.2 Market risks
Foreign currency risks
The Company does not have exposure to foreign currency risk at the end of the
reporting period as the Company mainly operates in Singapore and deals with local
customers and suppliers which transact in Singapore dollar. Accordingly, no sensitivity
analysis is prepared.
Interest rate risks
The Company does not have interest-bearing financial assets.
17.3 Liquidity risks
Liquidity risks refer to the risks in which the Company encounters difficulties in meeting
its short-term obligations. Liquidity risks are managed by matching the payment and
receipt cycle.
The Company actively manages its operating cash flows so as to ensure that all
payment needs are met. As part of its overall prudent liquidity management, the
Company minimises liquidity risk by ensuring the availability of funding through an
adequate amount of committed credit facilities from financial institutions and maintain
sufficient levels of cash to meet its working capital requirements.
Contractual maturity analysis
The following tables detail the Company’s remaining contractual maturity for its
non-derivative financial instruments. The tables have been drawn up based on
undiscounted cash flows of financial instruments based on the earlier of the contractual
date or when the Company is expected to receive or pay.
ISEC EYE PTE. LTD.
NOTES TO THE COMBINED FINANCIAL STATEMENTS
FOR THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012 AND 2013 (Continued)
C-29
17. Financial instruments, financial risks and capital management (Continued)
17.3 Liquidity risks (Continued)
Contractual maturity analysis (Continued)
2011 2012 2013
$ $ $
Within one financial year
Financial assets
Trade and other receivables 2,292,482 2,423,064 946,636
Cash and cash equivalents 2,492,333 4,766,508 2,825,205
Total undiscounted financial assets 4,784,815 7,189,572 3,771,841
Financial liabilities
Trade and other payables, representing
total undiscounted financial liabilities 1,334,012 1,671,837 1,965,038
Total net undiscounted financial assets 3,450,803 5,517,735 1,806,803
17.4 Capital management policies and objectives
The Company manages capital to ensure that it is able to continue as a going concern
and maintain an optimal capital structure so as to maximise shareholders’ value.
The Company is not subject to any externally imposed capital requirements for the
financial years ended 31 December 2011, 2012 and 2013.
The management reviews the capital structure to ensure that the Company is able to
service any debt obligations (including principal repayment and interest) based on its
operating cash flows. Upon review, the Company will balance its overall capital
structure through new share issues and the issue of new debt or the redemption of
existing debt, if necessary. The Company’s overall strategy remains unchanged during
the financial years ended 31 December 2011, 2012 and 2013.
The Company monitors capital based on a gearing ratio, which is net debt divided by
total equity plus net debt. The Company includes within net debt, trade and other
payables and borrowings less cash and cash equivalents. Total equity comprises of
share capital plus reserves.
The gearing ratio is not disclosed as it is not meaningful because the cash and bank
balances are higher than the total of its financial liabilities.
ISEC EYE PTE. LTD.
NOTES TO THE COMBINED FINANCIAL STATEMENTS
FOR THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012 AND 2013 (Continued)
C-30
17. Financial instruments, financial risks and capital management (Continued)
17.5 Fair value of financial assets and financial liabilities
The fair values of financial assets and financial liabilities are determined as follows:
• the fair values of financial assets and financial liabilities with standard terms and
conditions and traded on active liquid markets are determined with reference to
quoted market prices; and
• the fair values of other financial assets and financial liabilities (excluding derivative
instruments) are determined in accordance with generally accepted pricing models
based on discounted cash flow analysis.
Fair value hierarchy
The Company classifies fair value measurements using a fair value hierarchy that
reflects the significance of the inputs used in making the measurements. The fair value
hierarchy has the following levels:
• Level 1 – quoted prices (unadjusted) in active markets for identical assets or
liabilities;
• Level 2 – inputs other than quoted prices included within Level 1 that are
observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e.
derived from prices); and
• Level 3 – inputs for the asset or liability that are not based on observable market
data (unobservable inputs).
Fair value of financial instruments that are not carried at fair value
The carrying amounts of the current financial assets and current financial liabilities that
are not carried at fair value approximate their respective fair values as at the end of the
reporting period due to the relatively short-term maturity of these financial instruments.
ISEC EYE PTE. LTD.
NOTES TO THE COMBINED FINANCIAL STATEMENTS
FOR THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012 AND 2013 (Continued)
C-31
17. Financial instruments, financial risks and capital management (Continued)
17.6 Categories of financial instruments
The following table sets out the financial instruments as at the end of the respective
reporting periods:
2011 2012 2013
$ $ $
Financial assets
Loans and receivables 4,784,815 7,189,572 3,771,841
Financial liabilities
Other financial liabilities, at amortised
cost 1,334,012 1,671,837 1,965,038
18. Events subsequent to the reporting period
Subsequent to 31 December 2013, the following events have taken place:
18.1 On 22 September 2014, the Restructuring Exercise was carried out as set out in Note
1.2 to the audited combined financial statements.
18.2 On 26 September 2014, the ISEC Healthcare Ltd. entered into a share swap agreement
with shareholder of the Company to acquire the entire issued and paid-up share capital
of the Company for a consideration of $3,010,000. Subsequent to this acquisition, the
Company became wholly owned subsidiary of ISEC Healthcare Ltd.
ISEC EYE PTE. LTD.
NOTES TO THE COMBINED FINANCIAL STATEMENTS
FOR THE FINANCIAL YEARS ENDED 31 DECEMBER 2011, 2012 AND 2013 (Continued)
C-32
ISEC HEALTHCARE LTD.
and its subsidiaries
Unaudited Interim Condensed Combined Financial Statements
For the financial period from 1 January 2014 to 31 March 2014
APPENDIX D – INDEPENDENT AUDITORS’ REVIEW REPORT AND THEUNAUDITED INTERIM CONDENSED COMBINED FINANCIAL STATEMENTSFOR THE FINANCIAL PERIOD FROM 1 JANUARY 2014 TO 31 MARCH 2014
IN RESPECT OF ISEC HEALTHCARE LTD. AND ITS SUBSIDIARIES
D-1
UNAUDITED INTERIM CONDENSED COMBINED FINANCIAL STATEMENTS
FOR THE FINANCIAL PERIOD FROM 1 JANUARY 2014 TO 31 MARCH 2014
STATEMENT BY DIRECTORS
We, Wong Jun Shyan and Lee Hung Ming, being two of the directors of ISEC Healthcare Ltd.
(the “Company”), do hereby state that, in the opinion of the Board of Directors,
(i) the accompanying interim condensed combined financial statements together with notes
thereto are properly drawn up in accordance with Singapore Financial Reporting Standards
so as to present fairly, in all material respects, the state of affairs of the Company and its
subsidiaries (the “Group”) as at 31 March 2014 and of the results, changes in equity and cash
flows of the Group for the financial period from 1 January 2014 to 31 March 2014, and
(ii) at the date of this statement, there are reasonable grounds to believe that the Company will
be able to pay its debts as and when they fall due.
On behalf of the Board of Directors
Wong Jun Shyan Lee Hung Ming
Director Director
Singapore
14 October 2014
D-2
INDEPENDENT AUDITORS’ REVIEW REPORT AND
THE UNAUDITED INTERIM CONDENSED COMBINED FINANCIAL STATEMENTS
FOR THE FINANCIAL PERIOD FROM 1 JANUARY 2014 TO 31 MARCH 2014
14 October 2014
The Board of Directors
ISEC Healthcare Ltd.
101 Thomson Road
#09-04 United Square
Singapore 307591
Dear Sirs,
Introduction
We have reviewed the accompanying unaudited interim condensed combined financial statements
of ISEC Healthcare Ltd. (the “Company”) and its subsidiaries (the “Group”) which comprise the
condensed combined statement of financial position of the Group as at 31 March 2014, and the
related condensed combined statements of comprehensive income, changes in equity and cash
flows of the Group for the financial period from 1 January 2014 to 31 March 2014, and selected
explanatory notes as set out on pages D-5 to D-21. Management is responsible for the preparation
and fair presentation of the unaudited interim condensed combined financial statements in
accordance with the Singapore Financial Reporting Standard 34, Interim Financial Reporting
(“FRS 34”). Our responsibility is to express a conclusion on the interim condensed combined
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 condensed combined financial statements do not present fairly, in all
material respects, the financial position of the Group as at 31 March 2014 and its financial
performance, changes in equity and cash flows for the three month period then ended, in
accordance with FRS 34.
D-3
INDEPENDENT AUDITORS’ REVIEW REPORT AND
THE UNAUDITED INTERIM CONDENSED COMBINED FINANCIAL STATEMENTS
FOR THE FINANCIAL PERIOD FROM 1 JANUARY 2014 TO 31 MARCH 2014 (Continued)
Restriction on Distribution and Use
This report is made solely to you as a body for inclusion in the Offer Document to be issued in
relation to the proposed initial public offering of the shares of the Company in connection with the
Company’s listing on the Catalist, the sponsor-supervised listing platform of the Singapore
Exchange Securities Trading Limited.
BDO LLP
Public Accountants and
Chartered Accountants
Singapore
Leong Hon Mun Peter
Partner-in-charge
D-4
ISEC HEALTHCARE LTD.
AND ITS SUBSIDIARIES
UNAUDITED INTERIM CONDENSED COMBINED STATEMENT OF FINANCIAL POSITION
AS AT 31 MARCH 2014
Note
31 March
2014
31 December
2013
(Unaudited) (Audited)
$ $
ASSETS
Non-current assets
Plant and equipment 5 2,364,725 2,475,402
Intangible assets 6 90,481 96,882
2,455,206 2,572,284
Current assets
Inventories 7 386,659 406,437
Trade and other receivables 8 1,034,458 1,217,460
Prepayments 232,150 154,916
Cash and cash equivalents 9 2,781,154 2,167,715
4,434,421 3,946,528
Total assets 6,889,627 6,518,812
EQUITY AND LIABILITIES
Equity
Share capital 10 418,100 418,000
Retained earnings 2,999,508 2,147,835
Foreign currency translation account 11 (159,452) (182,422)
Equity attributable to owners of the parent 3,258,156 2,383,413
Non-controlling interests (185,019) (81,946)
Total equity 3,073,137 2,301,467
Current liabilities
Trade and other payables 12 2,575,456 2,958,873
Bank overdrafts 13 708,191 747,038
Current income tax payable 532,843 511,434
Total liabilities 3,816,490 4,217,345
Total equity and liabilities 6,889,627 6,518,812
The accompanying notes form an integral part of the financial statements.
D-5
ISEC HEALTHCARE LTD.
AND ITS SUBSIDIARIES
UNAUDITED INTERIM CONDENSED COMBINED STATEMENT OF COMPREHENSIVE INCOME
FOR THE FINANCIAL PERIOD FROM 1 JANUARY 2014 TO 31 MARCH 2014
Note
Financial
period from
1 January 2014 to
31 March 2014
Financial
period from
1 January 2013 to
31 March 2013
(Unaudited) (Unaudited)
$ $
Revenue 14 4,585,090 4,041,550
Cost of sales (2,690,799) (2,651,059)
Gross profit 1,894,291 1,390,491
Other items of income
Interest income 5,640 5,776
Other income 15 15,045 12,109
Other items of expense
Selling and distribution expenses (30,145) (29,671)
Administrative expenses (746,091) (721,811)
Other expenses (32,952) –
Finance costs 16 (11,207) (26,425)
Profit before income tax 17 1,094,581 630,469
Income tax expense 18 (295,429) (221,974)
Profit for the financial period 799,152 408,495
Other comprehensive income:
Items that may be reclassified subsequently to profit or
loss
Foreign currency translation differences
– foreign operations (210) 8,826
Reclassification arising from disposal of foreign subsidiary 33,166 –
Income tax relating to items that may be reclassified – –
Other comprehensive income for the financial period,
net of tax 32,956 8,826
Total comprehensive income for the financial period 832,108 417,321
Profit attributable to:
Owners of the parent 851,673 489,669
Non-controlling interests (52,521) (81,174)
799,152 408,495
Total comprehensive income attributable to:
Owners of the parent 874,643 497,392
Non-controlling interests (42,535) (80,071)
832,108 417,321
Earnings per share 19
– basic (in cents) 0.85 0.49
– diluted (in cents) 0.85 0.49
– pre-placement (in cents) 0.22 0.13
The accompanying notes form an integral part of the financial statements.
D-6
ISEC HEALTHCARE LTD.
AND ITS SUBSIDIARIES
UNAUDITED INTERIM CONDENSED COMBINED STATEMENT OF CHANGES IN EQUITY
FOR THE FINANCIAL PERIOD FROM 1 JANUARY 2014 TO 31 MARCH 2014
Sharecapital
Retainedearnings
Foreigncurrency
translationaccount
Equityattributable
to ownersof theparent
Non-controlling
interestsTotal
equity
$ $ $ $ $ $
Unaudited
31 March 2014
Balance at 1 January 2014 418,000 2,147,835 (182,422) 2,383,413 (81,946) 2,301,467
Profit for the financial period – 851,673 – 851,673 (52,521) 799,152
Other comprehensive income:
Foreign currency translationdifferences
– foreign operations – – (246) (246) 36 (210)
Reclassification adjustment arisingfrom disposal of foreign subsidiary – – 23,216 23,216 9,950 33,166
Total comprehensive incomefor the financial period – 851,673 22,970 874,643 (42,535) 832,108
Transaction with owners of theparent
Issuance of subscriber’s sharesat date of incorporation of theCompany 100 – – 100 – 100
Total transaction with ownersof the parent 100 – – 100 – 100
Transaction with non-controllinginterests
Disposal of a subsidiary – – – – (60,538) (60,538)
Total transaction withnon-controlling interests – – – – (60,538) (60,538)
Balance at 31 March 2014 418,100 2,999,508 (159,452) 3,258,156 (185,019) 3,073,137
Unaudited
31 March 2013
Balance at 1 January 2013 418,000 2,466,594 (86,550) 2,798,044 297,187 3,095,231
Profit for the financial period – 489,669 – 489,669 (81,174) 408,495
Other comprehensive income:
Foreign currency translationdifferences
– foreign operations – – 7,723 7,723 1,103 8,826
Total comprehensive incomefor the financial period – 489,669 7,723 497,392 (80,071) 417,321
Balance at 31 March 2013 418,000 2,956,263 (78,827) 3,295,436 217,116 3,512,552
The accompanying notes from an integral part of the financial statements.
D-7
ISEC HEALTHCARE LTD.
AND ITS SUBSIDIARIES
UNAUDITED INTERIM CONDENSED COMBINED STATEMENT OF CASH FLOWS
FOR THE FINANCIAL PERIOD FROM 1 JANUARY 2014 TO 31 MARCH 2014
Financial
period from
1 January 2014
to
31 March 2014
Financial
period from
1 January 2013
to
31 March 2013
(Unaudited) (Unaudited)
$ $
Operating activities
Profit before income tax 1,094,581 630,469
Adjustments for:
Amortisation of intangible assets 6,433 7,062
Depreciation of plant and equipment 117,520 145,640
(Gain)/Loss on disposal of plant and equipment (3,455) 76,226
Interest income (5,640) (5,776)
Interest expenses 11,207 26,425
Loss on disposal of subsidiary 32,952 –
Operating cash flows before working capital changes 1,253,598 880,046
Working capital changes:
Inventories 19,904 (118,022)
Prepayments (77,707) 43,921
Trade and other receivables (19,632) (55,352)
Trade and other payables (382,656) 439,316
Cash generated from operations 793,507 1,189,909
Income tax paid (274,131) (165,651)
Net cash from operating activities 519,376 1,024,258
Investing activities
Interest received 5,640 5,776
Proceeds from disposal of plant and equipment 24,452 151,144
Proceeds from disposal of subsidiary 141,470 –
Purchase of plant and equipment (27,085) (1,273,448)
Net cash from/(used) in investing activities 144,477 (1,116,528)
Financing activities
Interest paid (11,207) (26,425)
Proceed from issue of share capital 100 –
Net cash used in financing activities (11,107) (26,425)
Net change in cash and cash equivalents 652,746 (118,695)
Cash and cash equivalents at beginning of financial period 1,420,677 1,744,213
Effect of exchange rate changes on cash and cash
equivalents (460) 5,330
Cash and cash equivalents at end of financial period 2,072,963 1,630,848
D-8
These notes form an integral part and should be read in conjunction with the unaudited interim
condensed combined financial statements.
1. General corporate information
The Company was incorporated in the Republic of Singapore on 2 January 2014 under the
Singapore Companies Act, Chapter 50 (the “Act”) as a private limited liability company in the
name of ISEC Healthcare Ltd. The Company’s registration number is 201400185H.
The address of the Company’s registered office and principal place of business is
101 Thomson Road #09-04 United Square Singapore 307591.
The principal activity of the Company is that of an investment holding company.
The principal activities of the subsidiaries are set out in Note 1.3 to the audited combined
financial statements for the financial years ended 31 December 2011, 2012 and 2013.
In preparation for the proposed listing of the Company on the Singapore Exchange Securities
Trading Limited (“SGX-ST”), the Company underwent a restructuring exercise to streamline
and rationalise the group structure which are disclosed in the audited combined financial
statements for the financial years ended 31 December 2011, 2012 and 2013.
These interim condensed combined financial statements have been prepared solely in
connection with the proposed listing of the Company on Catalist, the sponsor-supervised
board of the SGX-ST.
The interim condensed combined financial statements for the Group for the financial period
from 1 January 2014 to 31 March 2014 were authorised for issue by the Board of Directors
on 14 October 2014.
2. Basis of preparation of interim condensed combined financial statements
The interim condensed combined financial statements have been prepared for the financial
period from 1 January 2014 to 31 March 2014 in accordance with Singapore Financial
Reporting Standard 34 Interim Financial Reporting (“FRS 34”).
The interim condensed combined financial statements do not include all the information and
disclosures required in the annual financial statements, and should be read in conjunction
with the Group’s audited combined financial statements for the financial years ended 31
December 2011, 2012 and 2013.
ISEC HEALTHCARE LTD.
AND ITS SUBSIDIARIES
NOTES TO UNAUDITED INTERIM CONDENSED COMBINED FINANCIAL STATEMENTS
FOR THE FINANCIAL PERIOD FROM 1 JANUARY 2014 to 31 MARCH 2014
D-9
3. Summary of significant accounting policies
The accounting policies adopted in the preparation of the interim condensed combined
financial statements are consistent with those followed in the preparation of the Group’s
audited combined financial statements for the financial years ended 31 December 2011,
2012 and 2013.
4. Critical accounting judgements and key sources of estimation uncertainty
The critical judgements and key sources of estimation uncertainty made by the management
remain unchanged from the last audited financial year.
5. Plant and equipment
Computer
equipment
Electrical
equipment
Motor
vehicles
Medical
equipment
Office
equipment,
furniture
and
fittings Renovation Total
$ $ $ $ $ $ $
31 March 2014(Unaudited)
Cost
Balance at1 January 2014 174,274 465,683 67,130 4,266,817 252,334 1,315,147 6,541,385
Additions – – – 15,603 8,409 3,073 27,085
Disposals – – – (36,849) (293) – (37,142)
Currencyre-alignment 45 123 17 1,129 57 338 1,709
Balance at31 March 2014 174,319 465,806 67,147 4,246,700 260,507 1,318,558 6,533,037
Accumulateddepreciation
Balance at1 January 2014 107,135 85,352 26,851 2,837,550 152,347 856,748 4,065,983
Depreciation for thefinancial period 4,847 11,656 3,360 78,029 5,649 13,979 117,520
Disposals – – – (16,140) (5) – (16,145)
Currencyre-alignment 23 14 5 669 35 208 954
Balance at31 March 2014 112,005 97,022 30,216 2,900,108 158,026 870,935 4,168,312
Carrying amount
Balance at31 March 2014 62,314 368,784 36,931 1,346,592 102,481 447,623 2,364,725
ISEC HEALTHCARE LTD.
AND ITS SUBSIDIARIES
NOTES TO UNAUDITED INTERIM CONDENSED COMBINED FINANCIAL STATEMENTS
FOR THE FINANCIAL PERIOD FROM 1 JANUARY 2014 to 31 MARCH 2014 (Continued)
D-10
5. Plant and equipment (Continued)
Computer
equipment
Electrical
equipment
Motor
vehicles
Medical
equipment
Office
equipment,
furniture
and
fittings Renovation Total
$ $ $ $ $ $ $
31 December 2013
(Audited)
Cost
Balance at
1 January 2013 177,754 300,702 69,550 4,004,420 209,127 1,139,274 5,900,827
Additions 41,711 185,172 – 1,183,357 93,852 418,363 1,922,455
Disposals (20,476) – – (760,594) (17,922) – (798,992)
Written off (18,518) (8,910) – (19,163) (25,211) (201,845) (273,647)
Currency
re-alignment (6,197) (11,281) (2,420) (141,203) (7,512) (40,645) (209,258)
Balance at
31 December 2013 174,274 465,683 67,130 4,266,817 252,334 1,315,147 6,541,385
Accumulated
depreciation
Balance at
1 January 2013 107,456 2,637 13,910 2,830,668 144,166 858,741 3,957,578
Depreciation for the
financial year 23,348 87,383 13,488 511,305 33,797 125,215 794,536
Disposals (10,579) – – (394,958) (8,557) – (414,094)
Written off (9,339) (4,190) – (10,484) (11,981) (97,199) (133,193)
Currency
re-alignment (3,751) (478) (547) (98,981) (5,078) (30,009) (138,844)
Balance at
31 December 2013 107,135 85,352 26,851 2,837,550 152,347 856,748 4,065,983
Carrying amount
Balance at
31 December 2013 67,139 380,331 40,279 1,429,267 99,987 458,399 2,475,402
ISEC HEALTHCARE LTD.
AND ITS SUBSIDIARIES
NOTES TO UNAUDITED INTERIM CONDENSED COMBINED FINANCIAL STATEMENTS
FOR THE FINANCIAL PERIOD FROM 1 JANUARY 2014 to 31 MARCH 2014 (Continued)
D-11
6. Intangible assets
Computer software
31 March
2014
31 December
2013
(Unaudited) (Audited)
$ $
Cost
Balance at beginning of financial period/year 364,843 396,144
Additions – 8,600
Disposals – (11,041)
Written off – (15,159)
Currency re-alignment 95 (13,701)
Balance at end of financial period/year 364,938 364,843
Accumulated amortisation
Balance at beginning of financial period/year 267,961 261,866
Amortisation for the financial period 6,433 28,247
Disposals – (4,969)
Written off – (8,001)
Currency re-alignment 63 (9,182)
Balance at end of financial period/year 274,457 267,961
Carrying amount
Balance at end of financial period/year 90,481 96,882
7. Inventories
31 March
2014
31 December
2013
(Unaudited) (Audited)
$ $
Medical and surgical supplies 386,659 406,437
ISEC HEALTHCARE LTD.
AND ITS SUBSIDIARIES
NOTES TO UNAUDITED INTERIM CONDENSED COMBINED FINANCIAL STATEMENTS
FOR THE FINANCIAL PERIOD FROM 1 JANUARY 2014 to 31 MARCH 2014 (Continued)
D-12
8. Trade and other receivables
31 March
2014
31 December
2013
(Unaudited) (Audited)
$ $
Trade receivables – third parties 663,659 702,780
Non-trade receivables
– third parties 170,009 306,893
– related party 17,180 –
187,189 306,893
Deposits 175,915 207,787
Goods and services tax receivable 7,695 –
1,034,458 1,217,460
Trade receivables are granted credit terms which range from 60 to 90 (31 December 2013:
60 to 90) days.
Deposits mainly relate to the rental deposits of premises.
The currency profile of trade and other receivables as at the end of the reporting period is
Ringgit Malaysia.
9. Cash and cash equivalents
31 March
2014
31 December
2013
(Unaudited) (Audited)
$ $
Cash and bank balances, representing cash and
cash equivalents as per condensed combined
statement of financial position 2,781,154 2,167,715
Bank overdrafts (Note 13) (708,191) (747,038)
Cash and cash equivalents as per condensed
combined statement of cash flows 2,072,963 1,420,677
The currency profile of cash and cash equivalents as per condensed combined statement of
financial position as at the end of the reporting period is Ringgit Malaysia.
ISEC HEALTHCARE LTD.
AND ITS SUBSIDIARIES
NOTES TO UNAUDITED INTERIM CONDENSED COMBINED FINANCIAL STATEMENTS
FOR THE FINANCIAL PERIOD FROM 1 JANUARY 2014 to 31 MARCH 2014 (Continued)
D-13
10. Share capital
For the purpose of preparing the combined financial statements, the share capital represents
the paid-up share capital of the Company and ISEC Sdn. Bhd.
On 2 January 2014, the Company issued 100 subscriber’s share for a cash consideration of
$100 at the date of its incorporation.
11. Foreign currency translation account
The foreign currency translation account comprises all foreign exchange differences arising
from the translation of the financial statements of foreign operations whose functional
currencies are different from that of the Group’s presentation currency and is non-
distributable.
Movement in the foreign currency translation account is set out in the combined statements
of changes in equity.
12. Trade and other payables
31 March
2014
31 December
2013
(Unaudited) (Audited)
$ $
Trade payables – third parties 753,023 601,681
Non-trade payables
– third parties 1,635,672 300,623
– director of the Company 60,000 –
1,695,672 300,623
Accrued expenses 126,761 244,249
Dividend payable − 1,812,320
2,575,456 2,958,873
Trade payables are unsecured, non-interest bearing and are normally settled between 30 to
90 (31 December 2013: 30 to 90) days’ terms.
Non-trade payables due to a director of the Company are unsecured, non-interest bearing
and repayable on demand.
The currency profile of trade and others payables as at the end of the reporting period is
Ringgit Malaysia.
ISEC HEALTHCARE LTD.
AND ITS SUBSIDIARIES
NOTES TO UNAUDITED INTERIM CONDENSED COMBINED FINANCIAL STATEMENTS
FOR THE FINANCIAL PERIOD FROM 1 JANUARY 2014 to 31 MARCH 2014 (Continued)
D-14
13. Bank overdrafts
Bank overdrafts granted to the extent of $964,250 (RM2,500,000) (31 December 2013:
$964,000 (RM2,500,000)) are unsecured, interest bearing at 5.5% (31 December 2013:
5.5%) and repayable on demand and supported by corporate guarantee from ISEC Sdn. Bhd.
and Pearl Eye Specialist Sdn. Bhd.
The currency profile of bank borrowings as at the end of the respective reporting periods is
Ringgit Malaysia.
14. Revenue
Revenue represents fees charged on medical, consultancy, treatment and surgery services
rendered.
15. Other income
Financial
period from
1 January 2014
to
31 March 2014
Financial
period from
1 January 2013
to
31 March 2013
(Unaudited) (Unaudited)
$ $
Foreign exchange gain, net 62 174
Gain on disposals of plant and equipment 3,455 –
Others 11,528 11,935
15,045 12,109
16. Finance costs
Financial
period from
1 January 2014
to
31 March 2014
Financial
period from
1 January 2013
to
31 March 2013
(Unaudited) (Unaudited)
$ $
Interest expenses
– bank overdrafts 11,207 26,425
ISEC HEALTHCARE LTD.
AND ITS SUBSIDIARIES
NOTES TO UNAUDITED INTERIM CONDENSED COMBINED FINANCIAL STATEMENTS
FOR THE FINANCIAL PERIOD FROM 1 JANUARY 2014 to 31 MARCH 2014 (Continued)
D-15
17. Profit before income tax
In addition to the charges and credits disclosed elsewhere in the notes to the combined
financial statements, the above includes the following charges:
Financial
period from
1 January 2014
to
31 March 2014
Financial
period from
1 January 2013
to
31 March 2013
(Unaudited) (Unaudited)
$ $
Cost of sales
Cost of inventories 1,178,836 1,012,599
Doctors’ consultancy fees 1,433,934 1,530,894
In addition to the charges and credits disclosed elsewhere in the notes to the combined
financial statements, the above includes the following charges:
Financial
period from
1 January 2014
to
31 March 2014
Financial
period from
1 January 2013
to
31 March 2013
(Unaudited) (Unaudited)
$ $
Selling and distribution expenses
Advertisements 16,253 9,624
Exhibition expenses 2,006 13,241
Internet expenses 11,544 6,034
Administrative expenses
Amortisation of intangible assets 6,433 7,062
Employee benefits expense
– salaries, bonus and other benefits 333,738 337,340
– defined contribution plans 40,906 37,740
Operating lease expense
– rental of equipment 2,430 2,121
– rental of premises 138,872 176,659
Loss on disposals of plant and equipment – 76,226
Other expenses
Loss on disposal of subsidiary 32,952 –
ISEC HEALTHCARE LTD.
AND ITS SUBSIDIARIES
NOTES TO UNAUDITED INTERIM CONDENSED COMBINED FINANCIAL STATEMENTS
FOR THE FINANCIAL PERIOD FROM 1 JANUARY 2014 to 31 MARCH 2014 (Continued)
D-16
17. Profit before income tax (Continued)
Depreciation of plant and equipment is recognised in the following line items of Group’s profit
or loss:
Financial
period from
1 January 2014
to
31 March 2014
Financial
period from
1 January 2013
to
31 March 2013
(Unaudited) (Unaudited)
$ $
Cost of sales 78,029 107,566
Administrative expenses 39,491 38,074
117,520 145,640
Employee benefits expense include the remuneration of Directors as disclosed in Note 20 to
the combined financial statements.
18. Income tax expense
Financial
period from
1 January 2014
to
31 March 2014
Financial
period from
1 January 2013
to
31 March 2013
(Unaudited) (Unaudited)
$ $
Current income tax
– current financial period 295,429 221,974
ISEC HEALTHCARE LTD.
AND ITS SUBSIDIARIES
NOTES TO UNAUDITED INTERIM CONDENSED COMBINED FINANCIAL STATEMENTS
FOR THE FINANCIAL PERIOD FROM 1 JANUARY 2014 to 31 MARCH 2014 (Continued)
D-17
18. Income tax expense (Continued)
Reconciliation of effective income tax rate
Financial
period from
1 January 2014
to
31 March 2014
Financial
period from
1 January 2013
to
31 March 2013
(Unaudited) (Unaudited)
$ $
Profit before income tax 1,094,581 630,469
Income tax calculated at Singapore’s statutory tax
rate of 17% (2013: 17%) 186,079 107,179
Effect of different tax rate in other countries 88,207 50,438
Tax effect of non-deductible expenses for income tax
purposes 30,796 –
Deferred tax assets not recognised – 64,357
Tax effect of tax exempt income (9,653) –
295,429 221,974
Unrecognised deferred tax assets
Financial
period from
1 January 2014
to
31 March 2014
Financial
period from
1 January 2013
to
31 March 2013
(Unaudited) (Unaudited)
$ $
Balance at beginning of financial period 302,283 131,290
Amount not recognised during financial period 12,781 206,484
Utilisation of deferred tax assets not recognised
previously – (40,290)
Currency realignment – 4,799
Balance at end of financial period 315,064 302,283
ISEC HEALTHCARE LTD.
AND ITS SUBSIDIARIES
NOTES TO UNAUDITED INTERIM CONDENSED COMBINED FINANCIAL STATEMENTS
FOR THE FINANCIAL PERIOD FROM 1 JANUARY 2014 to 31 MARCH 2014 (Continued)
D-18
18. Income tax expense (Continued)
Unrecognised deferred tax assets (Continued)
Unrecognised deferred tax assets are attributable to the following temporary differences:
Financial
period from
1 January 2014
to
31 March 2014
Financial
period from
1 January 2013
to
31 March 2013
(Unaudited) (Unaudited)
$ $
Unutilised tax losses 167,241 154,460
Unabsorbed capital allowances 174,461 174,461
Others (26,638) (26,638)
315,064 302,283
19. Earnings per share
The calculation of earnings per share is based on:
Financial
period from
1 January 2014
to
31 March 2014
Financial
period from
1 January 2013
to
31 March 2013
(Unaudited) (Unaudited)
$ $
Profit attributable to owners 851,673 489,669
Weighted number of ordinary shares in issue during
the financial period applicable to basic earnings
per share 1,000,100 1,000,100
Earnings per share (in cents)
– basic 0.85 0.49
– diluted 0.85 0.49
The calculations for earnings per share based on pre-placement share capital for the
relevant period is based on the profit attributable to owners for the financial period from 1
January 2014 to 31 March 2014 on assumption that pre-placement share capital of
388,500,000 ordinary shares are in issue as at the date of the Offer Document.
ISEC HEALTHCARE LTD.
AND ITS SUBSIDIARIES
NOTES TO UNAUDITED INTERIM CONDENSED COMBINED FINANCIAL STATEMENTS
FOR THE FINANCIAL PERIOD FROM 1 JANUARY 2014 to 31 MARCH 2014 (Continued)
D-19
20. Significant related party transactions
For the purpose of these combined financial statements, parties are considered to be related
to the Group if the Group has 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 and the party are subject to common control or common significant
influence. Related parties may be individuals or other entities.
In addition to the related party information disclosed elsewhere in the combined financial
statements, the following were significant related party transactions at rates and terms
agreed between the Group with its related parties:
Financial
period from
1 January 2014
to
31 March 2014
Financial
period from
1 January 2013
to
31 March 2013
(Unaudited) (Unaudited)
$ $With director of the Company
Consultancy fees paid 292,264 620,681
With directors of the subsidiaries
Consultancy fees paid 369,266 340,616
21. Operating lease commitments
The Group as lessee
The Group leases office spaces and warehouses under non-cancellable operating leases.
The operating lease commitments are based on existing rental rates. The leases have lease
terms ranging from 2 to 5 years and rentals are fixed during the lease term.
As at the end of the respective reporting periods, the future minimum lease payable under
non-cancellable operating leases contracted for but not recognised as liabilities were as
follows:
Financial
period from
1 January 2014
to
31 March 2014
Financial
period from
1 January 2013
to
31 March 2013
(Unaudited) (Unaudited)
$ $
Within one financial year 556,996 558,776
After one financial year but within five financial years 923,061 823,347
After five financial years 465,976 499,990
1,946,033 1,882,113
ISEC HEALTHCARE LTD.
AND ITS SUBSIDIARIES
NOTES TO UNAUDITED INTERIM CONDENSED COMBINED FINANCIAL STATEMENTS
FOR THE FINANCIAL PERIOD FROM 1 JANUARY 2014 to 31 MARCH 2014 (Continued)
D-20
22. Segment information
The Group has only one primary business segment, which is that of providing medical care,
consultancy, treatment and surgery in the field of ophthalmology. The Group’s sales and
assets are mainly derived from Malaysia, accordingly, no business segment and
geographical segment information are presented during the financial period.
Major customer
The revenue of the Group is mainly derived from the walk-in patients which are general
public. Due to the diverse base of customers to whom the Group renders services in each of
the reporting period, the Group is not reliant on any customer for its sales and no one single
customer accounted for 5% or more of the Group’s total revenue for period from 1 January
2014 to 31 March 2014.
23. Financial instruments, financial risks and capital management
There has been no change in the financial risk management of the Group and the Group’s
overall capital risk management remains unchanged from last audited financial year.
ISEC HEALTHCARE LTD.
AND ITS SUBSIDIARIES
NOTES TO UNAUDITED INTERIM CONDENSED COMBINED FINANCIAL STATEMENTS
FOR THE FINANCIAL PERIOD FROM 1 JANUARY 2014 to 31 MARCH 2014 (Continued)
D-21
This page has been intentionally left blank.
ISEC EYE PTE. LTD.
Unaudited Interim Condensed Combined Financial Statements
For the financial period from 1 January 2014 to 31 March 2014
APPENDIX E – INDEPENDENT AUDITORS’ REVIEW REPORT AND THEUNAUDITED INTERIM CONDENSED COMBINED FINANCIAL STATEMENTSFOR THE FINANCIAL PERIOD FROM 1 JANUARY 2014 TO 31 MARCH 2014
IN RESPECT OF ISEC EYE PTE. LTD.
E-1
UNAUDITED INTERIM CONDENSED COMBINED FINANCIAL STATEMENTS
FOR THE FINANCIAL PERIOD FROM 1 JANUARY 2014 TO 31 MARCH 2014
STATEMENT BY DIRECTOR
I, Lee Hung Ming, being the director of ISEC Eye Pte. Ltd. (the “Company”), do hereby state that,
in the opinion of Director,
(i) the accompanying interim condensed combined financial statements together with notes
thereto are properly drawn up in accordance with Singapore Financial Reporting Standards
so as to present fairly, in all material respects, the state of affairs of the Company as at
31 March 2014 and of the results, changes in equity and cash flows of the Company for the
financial period from 1 January 2014 to 31 March 2014, and
(ii) at the date of this statement, there are reasonable grounds to believe that the Company will
be able to pay its debts as and when they fall due.
Lee Hung Ming
Director
Singapore
14 October 2014
E-2
INDEPENDENT AUDITORS’ REVIEW REPORT AND THE UNAUDITED INTERIM
CONDENSED COMBINED FINANCIAL STATEMENTS
FOR THE FINANCIAL PERIOD FROM 1 JANUARY 2014 TO 31 MARCH 2014
14 October 2014
The Board of Directors
ISEC Eye Pte. Ltd.
101 Thomson Road
#09-04 United Square
Singapore 307591
Dear Sirs,
Introduction
We have reviewed the accompanying unaudited interim condensed combined financial statements
of ISEC Eye Pte. Ltd. (the “Company”) which comprise the condensed combined statement of
financial position of the Company as at 31 March 2014, and the related condensed combined
statements of comprehensive income, changes in equity and cash flows of the Company for the
financial period from 1 January 2014 to 31 March 2014, and selected explanatory notes as set out
on pages E-5 to E-15. Management is responsible for the preparation and fair presentation of the
unaudited interim condensed combined financial statements in accordance with the Singapore
Financial Reporting Standard 34, Interim Financial Reporting (“FRS 34”). Our responsibility is to
express a conclusion on the interim condensed combined 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 unaudited interim condensed combined financial statements do not present fairly,
in all material respects, the financial position of the Company as at 31 March 2014 and its financial
performance, changes in equity and cash flows for the three month period then ended, in
accordance with FRS 34.
E-3
INDEPENDENT AUDITORS’ REVIEW REPORT AND THE UNAUDITED INTERIM
CONDENSED COMBINED FINANCIAL STATEMENTS
FOR THE FINANCIAL PERIOD FROM 1 JANUARY 2014 TO 31 MARCH 2014 (Continued)
Restriction on Distribution and Use
This report is made solely to you as a body for inclusion in the Offer Document to be issued in
relation to the proposed initial public offering of ordinary shares of ISEC Healthcare Ltd. (“ISEC”)
in connection with ISEC’s listing on the Catalist, the sponsor-supervised listing platform of the
Singapore Exchange Securities Trading Limited.
BDO LLP
Public Accountants and
Chartered Accountants
Singapore
Leong Hon Mun Peter
Partner-in-charge
E-4
ISEC EYE PTE. LTD.
UNAUDITED INTERIM CONDENSED COMBINED STATEMENT OF FINANCIAL POSITION
AS AT 31 MARCH 2014
Note
31 March
2014
31 December
2013
(Unaudited) (Audited)
$ $
ASSETS
Non-current asset
Plant and equipment 5 621 786
Current assets
Trade and other receivables 6 1,056,606 946,636
Cash and cash equivalents 7 3,202,483 2,825,205
4,259,089 3,771,841
Total assets 4,259,710 3,772,627
EQUITY AND LIABILITIES
Equity
Share capital 8 400 400
Retained earnings 2,137,526 1,153,460
Total equity 2,137,926 1,153,860
Non-current liability
Deferred tax liabilities 9 977 977
Current liabilities
Trade and other payables 10 1,934,061 1,965,038
Current income tax payable 186,746 652,752
2,120,807 2,617,790
Total liabilities 2,121,784 2,618,767
Total equity and liabilities 4,259,710 3,772,627
The accompanying notes form an integral part of the financial statements.
E-5
ISEC EYE PTE. LTD.
UNAUDITED INTERIM CONDENSED COMBINED STATEMENT OF COMPREHENSIVE
INCOME FOR THE FINANCIAL PERIOD FROM 1 JANUARY 2014 TO 31 MARCH 2014
Note
Financial
period from
1 January 2014
to
31 March 2014
Financial
period from
1 January 2013
to
31 March 2013
(Unaudited) (Unaudited)
$ $
Revenue 11 1,272,108 1,017,177
Cost of sales (38,495) (60,985)
Gross profit 1,233,613 956,192
Other item of expense
Administrative expenses (157,744) (22,158)
Profit before income tax 12 1,075,869 934,034
Income tax expense 13 (91,803) (73,098)
Profit for the financial period,
representing total comprehensive
income for the financial period 984,066 860,936
The accompanying notes form an integral part of the financial statements.
E-6
ISEC EYE PTE. LTD.
UNAUDITED INTERIM CONDENSED COMBINED STATEMENT OF CHANGES IN EQUITY
FOR THE FINANCIAL PERIOD FROM 1 JANUARY 2014 TO 31 MARCH 2014
Share
capital
Retained
earnings Total equity
$ $ $
Unaudited
31 March 2014
Balance at 1 January 2014 400 1,153,460 1,153,860
Profit for the financial period – 984,066 984,066
Total comprehensive income for the financial
period – 984,066 984,066
Balance at 31 March 2014 400 2,137,526 2,137,926
Unaudited
31 March 2013
Balance at 1 January 2013 400 4,841,396 4,841,796
Profit for the financial period – 860,936 860,936
Total comprehensive income for the financial
period – 860,936 860,936
Balance at 31 March 2013 400 5,702,332 5,702,732
The accompanying notes form an integral part of the financial statements.
E-7
ISEC EYE PTE. LTD.
UNAUDITED INTERIM CONDENSED COMBINED STATEMENT OF CASH FLOWS
FOR THE FINANCIAL PERIOD FROM 1 JANUARY 2014 TO 31 MARCH 2014
Financial
period from
1 January 2014
to
31 March 2014
Financial
period from
1 January 2013
to
31 March 2013
(Unaudited) (Unaudited)
$ $
Operating activities
Profit before income tax 1,075,869 934,034
Adjustments for:
Depreciation of plant and equipment 165 1,240
Operating cash flows before working capital changes 1,076,034 935,274
Working capital changes:
Trade and other receivables (109,970) 338,338
Trade and other payables (30,977) (40,602)
Cash generated from operations 935,087 1,233,010
Income tax paid (557,809) (223,697)
Net cash from operating activities 377,278 1,009,313
Net change in cash and cash equivalents 377,278 1,009,313
Cash and cash equivalents at beginning of financial
period 2,825,205 4,766,508
Cash and cash equivalents at end of financial period 3,202,483 5,775,821
The accompanying notes form an integral part of the financial statements.
E-8
These notes form an integral part and should be read in conjunction with the unaudited interim
condensed combined financial statements.
1. General corporate information
ISEC Eye Pte. Ltd. (the “Company”) was incorporated in the Republic of Singapore on
15 July 2014 under the Singapore Companies Act, Chapter 50 (the “Act”) as a private limited
liability company in the name of ISEC Eye Pte. Ltd. The Company’s registration number is
201420664C.
The address of the Company’s registered office and principal place of business is
101 Thomson Road #09-04 United Square Singapore 307591.
The principal activities of the Company are those of providing medical eye care services.
In preparation for the proposed listing of the Company on the Singapore Exchange Securities
Trading Limited (“SGX-ST”), the Company underwent a restructuring exercise to streamline
and rationalise the company structure which are disclosed in the audited combined financial
statements for the financial years ended 31 December 2011, 2012 and 2013.
These interim condensed combined financial statements have been prepared solely in
connection with the proposed listing of the Company on Catalist, the sponsor-supervised
board of the SGX-ST.
The interim condensed combined financial statements for the Company for the financial
period from 1 January 2014 to 31 March 2014 were authorised for issue by the Board of
Directors on 14 October 2014.
2. Basis of preparation of interim condensed combined financial statements
The interim condensed combined financial statements have been prepared for the financial
period from 1 January 2014 to 1 March 2014 in accordance with Singapore Financial
Reporting Standard 34 Interim Financial Reporting (“FRS 34”).
The interim condensed combined financial statements do not include all the information and
disclosures required in the annual financial statements, and should be read in conjunction
with the Company’s audited combined financial statements for the financial years ended 31
December 2011, 2012 and 2013.
3. Summary of significant accounting policies
The accounting policies adopted in the preparation of the interim condensed combined
financial statements are consistent with those followed in the preparation of the Company’s
audited combined financial statements for the financial years ended 31 December 2011,
2012 and 2013.
ISEC EYE PTE. LTD.
NOTES TO UNAUDITED INTERIM CONDENSED COMBINED FINANCIAL STATEMENTS
FOR THE FINANCIAL PERIOD FROM 1 JANUARY 2014 TO 31 MARCH 2014
E-9
4. Critical accounting judgements and key sources of estimation uncertainty
The critical judgements and key sources of estimation uncertainty made by the management
remain unchanged from the last audited financial year.
5. Plant and equipment
Computer
equipment
Medical
equipment Total
$ $ $
31 March 2014 (Unaudited)
Cost
Balance at 1 January 2014 and
31 March 2014 29,484 37,572 67,056
Accumulated depreciation
Balance at 1 January 2014 28,949 37,321 66,270
Depreciation for the financial period 119 46 165
Balance at 31 March 2014 29,068 37,367 66,435
Carrying amount
Balance at 31 March 2014 416 205 621
31 December 2013 (Audited)
Cost
Balance at 1 January 2013 and
31 December 2013 29,484 37,572 67,056
Accumulated depreciation
Balance at 1 January 2013 25,491 35,816 61,307
Depreciation for the financial year 3,458 1,505 4,963
Balance at 31 December 2013 28,949 37,321 66,270
Carrying amount
Balance at 31 December 2013 535 251 786
ISEC EYE PTE. LTD.
NOTES TO UNAUDITED INTERIM CONDENSED COMBINED FINANCIAL STATEMENTS
FOR THE FINANCIAL PERIOD FROM 1 JANUARY 2014 TO 31 MARCH 2014 (Continued)
E-10
6. Trade and other receivables
31 March
2014
31 December
2013
(Unaudited) (Audited)
$ $
Trade receivable – third party 1,048,768 849,758
Non-trade receivables
− a director of the Company – 96,878
− third parties 7,838 –
7,838 96,878
1,056,606 946,636
Trade receivables are generally on 30 (31 December 2013: 30) days credit terms.
The non-trade amount due from a director of the Company was unsecured, non-interest
bearing and repayable on demand.
The currency profile of trade and other receivables as at the end of the reporting periods is
Singapore dollar.
7. Cash and cash equivalents
The currency profile of cash and cash equivalents as at the end of the reporting period is
Singapore dollar.
8. Share capital
As the Company was incorporated on 15 July 2014, for the purpose of these combined
financial statements, the share capital as at 31 December 2011, 2012 and 2013 represents
the aggregation of the issued and paid up capital of Lee HM & Co Pte. Ltd., Singapore Lasik
Hub Pte. Ltd., Perfect Vision Eye Centre Pte. Ltd. and Lee Hung Ming Eye Centre Pte. Ltd.
whose businesses were acquired by the Company.
ISEC EYE PTE. LTD.
NOTES TO UNAUDITED INTERIM CONDENSED COMBINED FINANCIAL STATEMENTS
FOR THE FINANCIAL PERIOD FROM 1 JANUARY 2014 TO 31 MARCH 2014 (Continued)
E-11
9. Deferred tax liabilities
Deferred tax liabilities are attributable to temporary differences from accelerated tax
depreciation computed at statutory income tax rate of 17%.
10. Trade and other payables
31 March
2014
31 December
2013
(Unaudited) (Audited)
$ $
Trade payables – third parties 35,509 9,131
Non-trade payables – director of the Company 1,722,510 –
Accrued expenses 112,073 112,074
Dividend payables – 1,800,000
Goods and services tax payable 63,969 43,833
1,934,061 1,965,038
Trade payables are normally settled on 30 days’ terms.
Non-trade payables due to directors of the Company are unsecured, non-interest bearing
and repayable on demand.
The currency profile of trade and others payables as at the end of the reporting period is
Singapore dollar.
11. Revenue
Revenue represents the fees charged on medical, consultancy, treatment and surgery
services rendered.
ISEC EYE PTE. LTD.
NOTES TO UNAUDITED INTERIM CONDENSED COMBINED FINANCIAL STATEMENTS
FOR THE FINANCIAL PERIOD FROM 1 JANUARY 2014 TO 31 MARCH 2014 (Continued)
E-12
12. Profit before income tax
In addition to the charges and credits disclosed elsewhere in the notes to the interim
condensed combined financial statements, the above includes the following charges:
Financial
period from
1 January 2014
to
31 March 2014
Financial
period from
1 January 2013
to
31 March 2013
(Unaudited) (Unaudited)
$ $Cost of sales
Cost of inventories 38,449 60,609
Administrative expenses
Employee benefits expense
− salaries, bonus and other benefits 150,000 15,000
− defined contribution plans 2,400 2,400
Depreciation of plant and equipment is recognised in the following line items of profit or loss:
Financial
period from
1 January 2014
to
31 March 2014
Financial
period from
1 January 2013
to
31 March 2013
(Unaudited) (Unaudited)
$ $
Cost of sales 46 376
Administrative expenses 119 864
165 1,240
Employee benefits expense include the remuneration of directors of the Company as
disclosed in Note 14 to the unaudited interim condensed combined financial statements.
ISEC EYE PTE. LTD.
NOTES TO UNAUDITED INTERIM CONDENSED COMBINED FINANCIAL STATEMENTS
FOR THE FINANCIAL PERIOD FROM 1 JANUARY 2014 TO 31 MARCH 2014 (Continued)
E-13
13. Income tax expense
Financial
period from
1 January 2014
to
31 March 2014
Financial
period from
1 January 2013
to
31 March 2013
(Unaudited) (Unaudited)
$ $Current income tax
− current financial year 91,803 73,098
Reconciliation of effective income tax rate
Financial
period from
1 January 2014
to
31 March 2014
Financial
period from
1 January 2013
to
31 March 2013
(Unaudited) (Unaudited)
$ $
Profit before income tax 1,075,869 934,034
Income tax calculated at Singapore’s statutory
tax rate of 17% (2013: 17%) 182,898 158,786
Tax effect of tax exempt income (64,560) (57,549)
Corporate tax rebate (39,343) (31,328)
Deferred tax assets not recognised 12,781 –
Others 27 3,189
91,803 73,098
14. Significant related party transactions
For the purpose of these interim condensed combined financial statements, parties are
considered to be related to the Company if the Company has 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 Company and the party are subject to
common control or common significant influence. Related parties may be individuals or other
entities.
ISEC EYE PTE. LTD.
NOTES TO UNAUDITED INTERIM CONDENSED COMBINED FINANCIAL STATEMENTS
FOR THE FINANCIAL PERIOD FROM 1 JANUARY 2014 TO 31 MARCH 2014 (Continued)
E-14
14. Significant related party transactions (Continued)
In addition to the related party information disclosed elsewhere in the interim condensed
combined financial statements, the following were significant related party transactions at
rates and terms agreed between the Company with its related parties:
Financial
period from
1 January 2014
to
31 March 2014
Financial
period from
1 January 2013
to
31 March 2013
(Unaudited) (Unaudited)
$ $
With a director of the Company
Payment on behalf of 126,523 753,863
Payment of behalf by – (3,830)
Compensation of key management personnel
Key management personnel are directors of the Company and those persons having
authority and responsibility for planning, directing and controlling the activities of the
Company, directly, or indirectly.
The remuneration of director of the Company was as follows:
Financial
period from
1 January 2014
to
31 March 2014
Financial
period from
1 January 2013
to
31 March 2013
(Unaudited) (Unaudited)
$ $
Directors of the Company
− short-term employee benefits 150,000 15,000
− post employment benefits 2,400 2,400
152,400 17,400
15. Financial instruments, financial risks and capital management
There has been no change in the financial risk management of the Company and the
Company’s overall capital risk management remains unchanged from last audited financial
year.
ISEC EYE PTE. LTD.
NOTES TO UNAUDITED INTERIM CONDENSED COMBINED FINANCIAL STATEMENTS
FOR THE FINANCIAL PERIOD FROM 1 JANUARY 2014 TO 31 MARCH 2014 (Continued)
E-15
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You are invited to apply and subscribe for Placement Shares at the Placement Price for each
Placement Share subject to the following terms and conditions:
1. YOUR APPLICATION MUST BE MADE IN LOTS OF 1,000 PLACEMENT SHARES AND
INTEGRAL MULTIPLES THEREOF. YOUR APPLICATION FOR ANY OTHER NUMBER OF
SHARES WILL BE REJECTED.
2. Your application for the Placement Shares may only be made by way of printed Placement
Shares Application Forms or such manner as the Issue Manager and Sponsor and the
Placement Agent may in their absolute discretion deem fit.
3. YOU MAY NOT USE CPF FUNDS TO APPLY FOR THE PLACEMENT SHARES.
4. You are allowed to submit only one application in your own name for the Placement
Shares. Any separate application by you for the Placement Shares are be deemed to
be multiple applications and the Company, the Issue Manager and Sponsor and the
Placement Agent have the discretion whether to accept or reject such multiple
applications.
If you, being other than an approved nominee company, have submitted an application
for Placement Shares in your own name, you should not submit any other application
for Placement Shares for any other person. Such separate applications shall be
deemed to be multiple applications and may be rejected at the discretion of our
Company, the Issue Manager and Sponsor and the Placement Agent.
Joint applications shall be rejected. Multiple applications for Placement Shares shall
be liable to be rejected at the discretion of our Company, the Issue Manager and
Sponsor and the Placement Agent. If you submit or procure submissions of multiple
share applications for Placement Shares, you may be deemed to have committed an
offence under the Penal Code, Chapter 224 of Singapore and the SFA, and your
applications may be referred to the relevant authorities for investigation. Multiple
applications or those appearing to be or suspected of being multiple applications may
be rejected at the discretion of our Company, the Issue Manager and Sponsor and the
Placement Agent.
5. We will not accept 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 and from applicants whose addresses (furnished in their
Application Forms) bear post office box numbers. No person acting or purporting to act on
behalf of a deceased person is allowed to apply under the Securities Account with CDP in the
name of the deceased at the time of the application.
6. We will not recognise the existence of a trust. An application by a trustee or trustees must
therefore be made in his/her/their own name(s) and without qualification or, where the
application is made by way of an Application Form by a nominee, in the name(s) of an
approved nominee company or companies after complying with paragraph 7 below.
7. WE WILL ONLY ACCEPT APPLICATIONS FROM APPROVED NOMINEE COMPANIES
ONLY. Approved nominee companies are defined as banks, merchant banks, finance
companies, insurance companies, licensed securities dealers in Singapore and nominee
companies controlled by them. Applications made by nominees other than approved
nominee companies shall be rejected.
APPENDIX F − TERMS AND CONDITIONS ANDPROCEDURES FOR APPLICATION
F-1
8. IF YOU ARE NOT AN APPROVED NOMINEE COMPANY, YOU MUST MAINTAIN A
SECURITIES ACCOUNT WITH CDP IN YOUR OWN NAME AT THE TIME OF YOUR
APPLICATION. If you do not have an existing Securities Account with CDP in your own
name at the time of your application, your application will be rejected. If you have an existing
Securities Account with CDP but fail to provide your Securities Account number or provide an
incorrect Securities Account number in Section B of the Application Form, your application is
liable to be rejected. Subject to paragraph 9 below, your application shall be rejected if your
particulars such as name, NRIC/passport number, nationality and permanent residence
status provided in your Application Form differ from those particulars in your Securities
Account as maintained with CDP. If you possess more than one individual direct Securities
Account with CDP, your application shall be rejected.
9. If your address as stated in the Application Form is different from the address
registered with CDP, you must inform CDP of your updated address promptly, failing
which the notification letter on successful allotment and other correspondence from
CDP will be sent to your address last registered with CDP.
10. Our Company, in consultation with the Issue Manager and Sponsor and the Placement
Agent, reserve the right to reject any application which does not conform strictly to the
instructions set out in the Application Form and in this Offer Document or with the
terms and conditions of this Offer Document, which is illegible, incomplete,
incorrectly completed or which is accompanied by an improperly drawn remittance or
improper form of remittance or remittances which are not honoured upon the first
presentation.
11. Each of our Company, the Issue Manager and Sponsor and the Placement Agent
further reserves the right to treat as valid any applications not completed or submitted
or effected in all respects in accordance with the instructions set out in the Application
Forms or the terms and conditions of this Offer Document and also to present for
payment or other processes all remittances at any time after receipt and to have full
access to all information relating to, or deriving from, such remittances or the
processing thereof.
Without prejudice to the rights of our Company, the Issue Manager and Sponsor and
the Placement Agent, as agents of the Company, have been authorised to accept, for
and on behalf of the Company such other forms of application as the Issue Manager
and Sponsor and the Placement Agent deem appropriate.
12. Our Company, in consultation with the Issue Manager and Sponsor and the Placement
Agent, reserve the right to reject or to accept, in whole or in part, or to scale down or to ballot
any application, without assigning any reason therefor, and no enquiry and/or
correspondence on the decision of our Company, the Issue Manager and Sponsor and/or the
Placement Agent will be entertained. This right applies to applications made by way of
Application Forms. In deciding the basis of allotment which shall be at the discretion of our
Company, due consideration will be given to the desirability of allotting the Placement Shares
to a reasonable number of Applicants with a view to establishing an adequate market for the
Shares.
APPENDIX F − TERMS AND CONDITIONS ANDPROCEDURES FOR APPLICATION
F-2
13. Share certificates will be registered in the name of CDP and will be forwarded only to CDP.
It is expected that CDP will send to you, at your own risk, within 15 Market Days after the
close of the Placement, a statement of account stating that your Securities Account has been
credited with the number of Placement Shares allotted to you, if your application is
successful. This will be the only acknowledgement of application monies received and is not
an acknowledgement by our Company, the Issue Manager and Sponsor and the Placement
Agent. 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 Placement Shares allotted to you. This authorisation applies to applications
made by way of Application Forms.
14. In the event that our Company lodges a supplementary or replacement offer document
(“Relevant Document”) pursuant to the SFA or any applicable legislation in force from time
to time prior to the close of the Placement and the Placement Shares have not been issued,
we will (as required by law and subject to the SFA), at our Company’s sole and absolute
discretion, either:
(a) 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
(b) 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.
Where you have notified us within 14 days from the date of lodgement of the Relevant
Document of your wish to exercise your option under paragraph 14(a) above to withdraw your
application, we shall pay to you all monies paid by you on account of your application for the
Placement Shares without interest or any share of revenue or other benefit arising therefrom
and at your own risk, within seven days from the receipt of such notification.
In the event that at any time at the time of the lodgement of the Relevant Document, the
Placement Shares have already been issued and/or sold but trading has not commenced, we
will (as required by law and subject to the SFA), at our Company’s sole and absolute
discretion, either:−
(c) 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 Placement Shares;
or
(d) deem the issue as void and refund your payment for the Placement 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 paragraph 14(c) above to return the
Placement Shares issued to him shall, within 14 days from the date of lodgement of the
Relevant Document, notify us of this and return all documents, if any, purporting to be
evidence of title of those Placement Shares, whereupon we shall, within seven (7) days from
the receipt of such notification and documents, pay to him all monies paid by him for the
Placement Shares without interest or any share of revenue or other benefit arising therefrom
and at his own risk, and the Placement Shares issued to him shall be void.
APPENDIX F − TERMS AND CONDITIONS ANDPROCEDURES FOR APPLICATION
F-3
Additional terms and instructions applicable upon the lodgement of the Relevant Document,
including instructions on how you can exercise the option to withdraw your application or
return the Placement Shares allotted to you, may be found in such Relevant Document.
15. You irrevocably authorise CDP to disclose the outcome of your application, including the
number of Placement Shares allotted to you pursuant to your application, to us, the Issue
Manager and Sponsor and the Placement Agent and any other parties so authorised by the
forgoing persons.
16. Any reference to “you” or the “Applicant” in this section shall include an individual, a
corporation, an approved nominee and trustee applying for the Placement Shares through
the Issue Manager and Sponsor and the Placement Agent.
17. By completing and delivering an Application Form in accordance with the provisions of this
Offer Document, you:
(a) irrevocably agree and undertake to subscribe for the number of Placement Shares
specified in your application (or such smaller number for which the application is
accepted) at the Placement Price and agree that you will accept such Placement
Shares as may be allotted to you, in each case on the terms of, and subject to the
conditions set out in this Offer Document and the Memorandum and Articles of
Association of our Company;
(b) agree that the aggregate Placement Price for the Placement Shares applied for is due
and payable to our Company upon application; and
(c) 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 allot any Placement
Shares to you; and
(d) (i) consent to the collection, use, processing and disclosure of your name,
NRIC/passport number or company registration number, address, nationality,
permanent resident status, CDP Securities Account number, share application amount,
the outcome of your application (including the number of Placement Shares allocated
to you pursuant to your application) and other personal data (“Personal Data”) by the
Share Registrar, CDP, Securities Clearing Computer Services (Pte) Ltd (“SCCS”), the
SGX-ST, the Participating Banks, our Company, the Issue Manager and Sponsor, the
Placement Agent and/or other authorised operators (the “Relevant Parties”) for the
purpose of the processing of your application for the Placement Shares, and in order for
the Relevant Parties to comply with any applicable laws, listing rules, regulations and/or
guidelines (collectively, the “Purposes”) and warrant that such Personal Data is true,
accurate and correct, (ii) warrant that where you, as an approved nominee company,
disclose the Personal Data of the beneficial owner(s) to the Relevant Parties, you have
obtained the prior consent of such beneficial owner(s) for the collection, use,
processing and disclosure by the Relevant Parties of the Personal Data of such
beneficial owner(s) for the Purposes, (iii) agree that the Relevant Parties may do
anything or disclose any Personal Data or matters without notice to you if the Relevant
Parties consider them to be required or desirable in respect of any applicable policy,
APPENDIX F − TERMS AND CONDITIONS ANDPROCEDURES FOR APPLICATION
F-4
law, regulation, government entity, regulatory authority or similar body, and (iv) agree
that you will indemnify the Relevant Parties in respect of any penalties, liabilities,
claims, demands, losses and damages as a result of your breach of warranties. You
also agree that the Relevant Parties shall be entitled to enforce this indemnity
(collectively, the “Personal Data Privacy Terms”); and
(e) agree and warrant that, if the laws of any jurisdictions outside Singapore are applicable
to your application, you have complied with all such laws and none of our Company, the
Issue Manager and Sponsor and the Placement Agent will infringe any such laws as a
result of the acceptance of your application.
18. Our acceptance of applications will be conditional upon, inter alia, our Company, the Issue
Manager and Sponsor and the Placement Agent being satisfied that:
(a) permission has been granted by the SGX-ST to deal in and for quotation for all our
existing Shares, Placement Shares and the Shares which may be issued under the
ISEC Healthcare Share Option Scheme on Catalist;
(b) the Management Agreement and the Placement Agreement referred to in the section
entitled “Plan of Distribution – Management and Placement Arrangements” of this Offer
Document, have become unconditional and have not been terminated; and
(c) the SGX-ST, acting as agent on behalf of the Authority, has not served a Stop Order
under the SFA which directs that no or no further shares to which this Offer Document
relates be allotted.
19. Where the SGX-ST, acting as agent on behalf of the Authority, issued a Stop Order pursuant
to Section 242 of the SFA and applications to subscribe for the Placement Shares to which
this Offer Document relates have been made prior to the Stop Order, and:
(a) where the Placement Shares have not been issued to the applicants, the applications
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 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 but trading has not
commenced, the SFA provides that the issue of the Placement Shares shall be deemed
to be void and our Company 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
(c) if documents purporting to evidence title had been issued to you, our Company shall
inform you to return such documents to us within 14 days from that date.
Such monies paid in respect of your application will be returned to you at your own risk,
without interest or any share or revenue or other benefit arising therefrom, and you will not
have any claim against us, the Issue Manager and Sponsor and the Placement Agent.
This shall not apply where only an interim Stop Order has been served.
APPENDIX F − TERMS AND CONDITIONS ANDPROCEDURES FOR APPLICATION
F-5
20. In the event that an interim Stop Order in respect of the Placement Shares is served by the
SGX-ST, acting as agent on behalf of the Authority, or other competent authority, no
Placement Shares shall be issued to you until the SGX-ST, acting as agent on behalf of the
Authority, revokes the interim Stop Order.
21. The SGX-ST, acting as agent on behalf of the Authority or other competent authority, is not
able to serve a Stop Order in respect of the Placement Shares if the Placement Shares have
been issued and listed on a securities exchange and trading in them has commenced.
22. In the event of any changes in the closure of the Placement or the time period during which
the Placement is open, we will publicly announce the same through a SGXNET
announcement to be posted on the Internet at the SGX-ST website (http://www.sgx.com) and
through a paid advertisement in a local newspaper.
23. Our Company will not hold any application in reserve.
24. Our Company will not allot shares 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 on behalf of the
Authority.
25. Additional terms and conditions for applications by way of Application Form are set out in the
section entitled “Additional Terms and Conditions for Applications Using Application Forms”
on pages F-6 to F-9 of this Offer Document.
ADDITIONAL TERMS AND CONDITIONS FOR APPLICATIONS USING APPLICATION FORMS
Applications by way of an Application Form shall be made on, and subject to, the terms and
conditions of this Offer Document including but not limited to the terms and conditions appearing
below as well as those set out in this Appendix F “TERMS AND CONDITIONS AND
PROCEDURES FOR APPLICATION” of this Offer Document, as well as the Memorandum and
Articles of Association of our Company.
1. Your application must be made using the BLUE Application Forms for Placement Shares (or
in such other manner as the Issue Manager and Sponsor and the Placement Agent may in
their absolute discretion deem appropriate) accompanying and forming part of this Offer
Document. ONLY ONE APPLICATION should be enclosed in each envelope.
We draw your attention to the detailed instructions contained in the Application Form and this
Offer Document for the completion of the Application Form which must be carefully followed.
Our Company, in consultation with the Issue Manager and Sponsor and the Placement
Agent, reserve the right to reject applications which do not conform strictly to the
instructions set out in the Application Form and this Offer Document or to the terms
and conditions of this Offer Document or which are illegible, incomplete, incorrectly
completed or which are accompanied by improperly drawn remittances or improper
form of remittance.
2. Your Application Form must be completed in English. Please type or write clearly in ink using
BLOCK LETTERS.
APPENDIX F − TERMS AND CONDITIONS ANDPROCEDURES FOR APPLICATION
F-6
3. All spaces in the Application Form except those under the heading “FOR OFFICIAL USE
ONLY” must be completed and the words “NOT APPLICABLE” or “N.A.” should be written in
any space that is not applicable.
4. Individuals, corporations, approved nominee companies and trustees must give their names
in full. If you are an individual, you must make your application using your full names as it
appears in your identity cards (if you have such an identification document) or in your
passports and, in the case of a corporation, in your full name as registered with a competent
authority. If you are 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 Company’s Share Registrar. Our
Company reserves the right to require you to produce documentary proof of identification for
verification purposes.
5. (a) You must complete Sections A and B on page 2 and sign page 1 of the Application Form.
(b) You are required to delete either paragraph 7(a) or 7(b) on page 1 of the Application
Form. Where paragraph 7(a) is deleted, you must also complete Section C of the
Application Form with particulars of the beneficial owner(s).
(c) If you fail to make the required declaration in paragraph 7(a) or 7(b), as the case may
be, on page 1 of the Application Form, your application is liable to be rejected.
6. You (whether you are an individual or corporate applicant, whether incorporated or
unincorporated and wherever incorporated or constituted) will be required to declare whether
you are a citizen or permanent resident of Singapore or a corporation in which citizens or
permanent residents of Singapore or any body corporate constituted under any statute of
Singapore having an interest in the aggregate of more than fifty per cent. (50%) of the issued
share capital of or interests in such corporations. If you are an approved nominee company,
you are required to declare whether the beneficial owner of the Shares is a citizen or
permanent resident of Singapore or a corporation, whether incorporated or unincorporated
and wherever incorporated or constituted, in which citizens or permanent residents of
Singapore or any body corporate whether incorporated or unincorporated and wherever
incorporated or constituted under any statute of Singapore have an interest in the aggregate
of more than fifty per cent. (50%) of the issued share capital of or interests in such
corporation.
7. The completed and signed BLUE Placement Shares Application Form and the correct
remittance in full in respect of the number of Placement Shares applied for (in accordance
with the terms and conditions of this Offer Document) with your name and address written
clearly on the reverse side, must be enclosed and sealed in an envelope to be provided by
you. You must affix adequate postage (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 ISEC Healthcare Ltd. c/o Maybank Kim Eng Securities Pte. Ltd., 50
North Canal Road, #03-01, Singapore 059304, to arrive by 12.00 noon on 23 October
2014 or such other time as our Company may, in consultation with the Placement
Agent, in their absolute discretion, decide. Local Urgent Mail or Registered Post must
NOT be used. No acknowledgement of receipt will be issued for any application or
APPENDIX F − TERMS AND CONDITIONS ANDPROCEDURES FOR APPLICATION
F-7
remittance received. Your application must be accompanied by a remittance in Singapore
currency for the full amount payable, in respect of the number of Placement Shares applied
for, in the form of a BANKER’S DRAFT or CASHIER’S ORDER drawn on a bank in
Singapore, made out in favour of “ISEC HEALTHCARE SHARE ISSUE ACCOUNT” crossed
“A/C PAYEE ONLY”, and with your name, CDP 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 WILL NOT BE ACCEPTED. We will
reject remittances bearing “NOT TRANSFERABLE” or “NON TRANSFERABLE” crossings.
No acknowledgement or receipt will be issued by our Company or the Issue Manager and
Sponsor or the Placement Agent for applications and application monies received.
8. Applications that are illegible, incomplete or incorrectly completed or accompanied by
improperly drawn remittances or which are not honoured upon their first presentation may be
rejected.
9. ONLY ONE APPLICATION should be enclosed in each envelope.
10. 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 Placement. In the event that the Placement is cancelled
by us following the termination of the Management Agreement and/or the Placement
Agreement, the application monies received will be refunded (without interest or any share
of revenue or other benefit arising therefrom) to you by ordinary post or telegraphic transfer
at your own risk within five (5) Market Days of the termination of the Placement. In the event
that the Placement is cancelled by us following the issuance of a Stop Order by the SGX-ST,
acting as agent on behalf of the Authority, the application monies received will be refunded
(without interest or any share of revenue or other benefit arising therefrom) to you by
ordinary post or telegraphic transfer at your own risk within 14 Market Days from the date of
the Stop Order.
11. Capitalised terms used in the Application Form and defined in this Offer Document shall bear
the meanings assigned to them in this Offer Document.
12. You irrevocably agree and acknowledge that your application is subject to risks of fires, acts
of God and other events beyond the control of our Company, our Directors, the Issue
Manager and Sponsor, the Placement Agent and/or any party involved in the Placement, and
in any such event, our Company, the Issue Manager and Sponsor and/or the Placement
Agent does not receive your Application Form, you shall have no claim whatsoever against
our Company, the Issue Manager and Sponsor and the Placement Agent and/or any other
party involved in the Placement for the Placement Shares applied for or for any
compensation, loss or damage.
13. By completing and delivering the Application Form, you agree that:
(a) in consideration of our Company having distributed the Application Form to you and
agreeing to close the List at 12.00 noon on 23 October 2014 or such other time or date
as our Company may, in consultation with the Issue Manager and Sponsor and the
Placement Agent, decide and by completing and delivering the Application Form:
(i) your application is irrevocable; and
APPENDIX F − TERMS AND CONDITIONS ANDPROCEDURES FOR APPLICATION
F-8
(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;
(b) neither our Company, the Issue Manager and Sponsor, the Placement Agent nor any
other party involved in the Placement shall be liable for any delays, failures or
inaccuracies in the recording, storage or in the transmission or delivery of data relating
to your application to us or CDP due to breakdowns or failure of transmission, delivery
or communication facilities or any risks referred to in paragraph 12 above or to any
cause beyond their respective controls;
(c) all applications, acceptances and contracts resulting therefrom under the Placement
shall be governed by and construed in accordance with the laws of Singapore and that
you irrevocably submit to the non-exclusive jurisdiction of the Singapore courts;
(d) in respect of the Placement Shares for which your application has been received and
not rejected, acceptance of your application shall be constituted by written notification
and not otherwise, notwithstanding any remittance being presented for payment by or
on behalf of our Company;
(e) you will not be entitled to exercise any remedy of rescission for misrepresentation at
any time after acceptance of your application;
(f) in making your application, reliance is placed solely on the information contained in this
Offer Document and that none of our Company, the Issue Manager and Sponsor and the
Placement Agent or any other person involved in the Placement shall have any liability
for any information not so contained;
(g) you consent to the disclosure of your name, NRIC/passport number, address,
nationality, permanent resident status, Securities Account number, and share
application amount to our Share Registrar, CDP, SCCS, SGX-ST, our Company, the
Issue Manager and Sponsor and the Placement Agent or other authorised operators;
(h) you irrevocably agree and undertake to subscribe for the number of Placement Shares
applied for as stated in the Application Form or any smaller number of such Placement
Shares that may be allotted to you in respect of your application. In the event that our
Company decide to allot a smaller number of Placement Shares or not to allot any
Placement Shares to you, you agree to accept such decision as final; and.
(i) 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 Placement Shares that may be allotted to you.
APPENDIX F − TERMS AND CONDITIONS ANDPROCEDURES FOR APPLICATION
F-9
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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. Where portions of our Articles are
reproduced below, defined terms bear the meanings ascribed to them in our Articles.
The following summarises certain provisions of our Articles of Association relating to:
(a) the power of a Director to vote on a proposal, arrangement or contract in which he is
interested:
Article 109(2)
Every Director shall observe the provisions of Section 156 of the Act relating to the disclosure
of the interests of the Directors in contracts or proposed contracts with the Company or of
any office or property held by a Director which might create duties or interests in conflict with
his duties or interests as a Director. Notwithstanding such disclosure, a Director shall not
vote in regard to any contract or proposed contract or arrangement in which he has directly
or indirectly a personal material interest although he shall be taken into account in
ascertaining whether a quorum is present.
(b) the remuneration of our Directors:
Article 106
(1) The fees of the Directors shall be determined from time to time by an Ordinary
Resolution of the Company and such fees shall (unless such resolution otherwise
provides) 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 meeting. Such fees shall (unless such resolution otherwise
provides) be divided among the Directors in such proportions and manner as they may
agree and in default of agreement equally, except that in the latter event any Director
who shall hold office for part only of the period in respect of which such fee is payable
shall be entitled only to rank in such division for the proportion of fee related to the
period during which he has held office.
(2) Any Director who is appointed to any executive office or serves on any committee or
who otherwise performs or renders services, which in the opinion of the Directors are
outside the scope of his ordinary duties as a Director, may be paid such extra
remuneration as the Directors may determine, subject however as is hereinafter
provided in this Article.
(3) The remuneration (including any remuneration under Article 106(2) above) in the case
of a Director other than an Executive Director shall comprise: (i) fees which shall be a
fixed sum and/or (ii) such fixed number of shares in the capital of the Company, and
shall not at any time be by commission on, or percentage of, the profits or turnover, and
no Director whether an Executive Director or otherwise shall be remunerated by a
commission on, or percentage of turnover.
APPENDIX G − SUMMARY OF SELECTED ARTICLES OF
ASSOCIATION OF OUR COMPANY
G-1
(c) the borrowing powers exercisable by our Directors:
Article 125
Subject to the Statutes and the provisions of these Articles, the Directors may at their
discretion exercise all powers of the Company to borrow or otherwise raise money, to
mortgage, charge or hypothecate all or any of the property or business of the Company
including any uncalled or called but unpaid 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) the retirement or non-retirement of a Director under an age limit requirement:
There are no specific provisions in our Articles of Association relating to the retirement or
non-retirement of a Director under an age limit requirement. Section 153(1) (read with
Section 156(3)) of the Companies Act however, provides that no person of or over the age
of 70 years shall be appointed a director of a public company, unless he is by way of an
ordinary resolution passed at an annual general meeting of our Company appointed or
re-appointed as a director of our Company to hold office, or authorised to hold office, or
authorised to continue in office, until the next annual general meeting of our Company.
(e) the shareholding qualification of a Director:
Article 105
A Director need not be a Member and shall not be required to hold any shares of the
Company by way of qualification. A Director who is not a Member shall nevertheless be
entitled to receive notice of, attend and speak at all general meetings of the Company.
(f) any change in capital:
Article 6
Subject to the Act, no shares may be issued by the Directors without the prior approval of the
Company in general meeting but subject thereto and to Article 67, and to any special rights
attached to any shares for the time being issued, the Directors may issue, allot or grant
options over or otherwise deal with or dispose of the same to such persons on such terms
and conditions and at such time and subject or not to the payment of any part of the amount
thereof in cash as the Directors may think fit. Any such shares may be issued with such
preferential, deferred, qualified or special rights, privileges or conditions as the Directors
may think fit. 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 Provided always that the rights attaching to shares of a class other than ordinary
shares shall be expressed in the resolution creating the same.
APPENDIX G − SUMMARY OF SELECTED ARTICLES OF
ASSOCIATION OF OUR COMPANY
G-2
(g) any change in the respective rights of the various classes of shares including the action
necessary to change the rights, indicating where the conditions are different from those
required by the applicable law:
Article 10
If at any time the share capital is divided into different classes, the rights attached to any
class (unless otherwise provided by the terms of issue of the shares of that class) may,
subject to the provisions of the Act, whether or not the Company is being wound up, be varied
or abrogated either with the consent in writing of the holders of three-quarters of the issued
shares of the class or with the sanction of a Special Resolution passed at a separate general
meeting of the holders of shares of the class and to every such Special Resolution the
provisions of Section 184 of the Act shall with such adaptations as are necessary apply. To
every such separate general meeting, the provisions of these Articles relating to general
meetings shall mutatis mutandis apply.
Provided always that:
(i) the necessary quorum shall be two persons at least holding or representing by proxy or
by attorney one-third of the issued shares of the class and that any holder of shares of
the class present in person or by proxy or by attorney may demand a poll, but where the
necessary majority for such a Special Resolution is not obtained at the meeting,
consent in writing if obtained from the holders of three-fourths of the issued shares of
the class concerned within two months of the meeting shall be as valid and effectual as
a Special Resolution carried at the meeting; and
(ii) where all the issued shares of the class are held by one person, the necessary quorum
shall be one person and such holder of shares of the class present in person or by proxy
or by attorney may demand a poll.
(h) any time limit after which a dividend entitlement will lapse and an indication of the party in
whose favour this entitlement then operates:
Article 170
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 unclaimed after being declared may be invested or otherwise
made use of by the Directors for the benefit of the Company and any dividend unclaimed
after a period of six (6) years from the date of declaration of such dividend may be forfeited
and if so shall revert to the Company. If the Depository 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. For the avoidance of doubt no Member shall be entitled to any interest, share of
revenue or other benefit arising from any unclaimed dividends, howsoever and whatsoever.
APPENDIX G − SUMMARY OF SELECTED ARTICLES OF
ASSOCIATION OF OUR COMPANY
G-3
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The following statements are brief summaries of the more important rights and privileges of
Shareholders conferred by the laws of Singapore and our Articles of Association. These
statements summarise the material provisions of our Articles of Association, but are qualified in
its entirety by reference to our Articles of Association and the laws of Singapore.
The statements below provide, among other things, a description of Shareholders’ voting rights,
restrictions on the transferability of shareholdings and Shareholders’ rights to share in any surplus
in the event of liquidation, and provides information about our share capital.
ORDINARY SHARES AND PREFERENCE SHARES
Our Articles of Association provide that we may issue shares of a different class with preferential,
deferred, qualified or other special rights, privileges or conditions as our Board of Directors may
determine and may issue preference shares which are, or at our option are, subject to redemption,
subject to certain limitations. As of the date of this Offer Document, the total issued and paid-up
share capital of our Company is S$12,500,000 comprising 388,500,000 Shares, all of which are
fully paid up. There are no preference shares in issue. All of our ordinary shares are in registered
form. We may, subject to the provisions of the Companies Act and the Catalist Rules purchase our
own Shares. However, we may not, except in circumstances permitted by the Companies Act,
grant any financial assistance for the acquisition or proposed acquisition of our own ordinary
shares.
NEW ORDINARY SHARES
New Shares may only be issued with prior approval from a general meeting of our Shareholders.
Our Shareholders may by ordinary resolution give our Directors authority to allot and issue shares
and/or convertible securities in our Company. The maximum number of Shares to be issued upon
conversion is determinable at the time of the issue of such convertible securities (whether by way
of rights, bonus or otherwise), and shares and/or convertible securities may be issued at any time
and from time to time thereafter to such persons and on such terms and conditions and for such
purposes as the Directors may in their absolute discretion deem fit provided always that the
aggregate number of Shares (including Shares to be issued pursuant to such convertible
securities) must not exceed 100.0% of the issued share capital of our Company, of which the
aggregate number of Shares (including Shares to be issued pursuant to such convertible
securities) other than on a pro rata basis to existing Shareholders shall not exceed 50.0% of the
issued share capital of our Company (the percentage of issued share capital being based on the
issued share capital at the time of passing of the resolution after adjusting for new Shares arising
from the conversion of any convertible securities or share options in issue at the time such
authority is given and for any subsequent consolidation or subdivision of Shares). Unless revoked
or varied by our Shareholders at a general meeting, such authority shall continue in force until the
conclusion of the next annual general meeting of our Company or the expiration of the period
within which the next annual general meeting of our Company is required by law to be held,
whichever is the earlier.
SHAREHOLDERS
Only persons who are registered in our register of Shareholders and, in cases in which the person
so registered is CDP, the persons named as the depositors (as defined in the Companies Act) in
the depository register maintained by CDP for our ordinary shares, are recognised as
shareholders.
APPENDIX H − DESCRIPTION OF OUR SHARES
H-1
For the purpose of determining the number of votes which a Shareholder who is an account-holder
directly with CDP or a depository agent, or his proxy, may cast at any general meeting on a poll,
the reference to shares held or represented shall, in relation to shares of that Shareholder, be the
number of shares entered against his name in the register maintained with CDP 48 hours before
the time of the relevant general meetings as certified by CDP to us.
We 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 the ordinary share or of the person whose name is entered in
the depository register for that ordinary share.
We may close the register of Shareholders for any time or times if we provide the SGX-ST with
at least ten (10) clear Market Days’ notice. However, the register may not be closed for more than
30 days in aggregate in any calendar year. We would typically close the register to determine
Shareholders’ entitlement to receive dividends and other distributions.
TRANSFER OF ORDINARY SHARES
Our Board of Directors may decline to register any transfer of ordinary shares which are not fully
paid shares or ordinary shares on which we have a lien. Our 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. Ordinary shares may be transferred by a duly signed instrument of transfer in
any form approved by the Directors and the SGX-ST. There is no restriction on the transfer of fully
paid shares except where required by law or the Catalist Rules or by-laws of the SGX-ST. A
Shareholder may transfer any ordinary shares held through the SGX-ST book entry settlement
system by way of a book-entry transfer without the need for any instrument of transfer.
We will replace lost or destroyed certificates for Shares if we are properly notified and if the
applicant pays a fee which will not exceed S$2.00 and furnishes any evidence and indemnity that
our Board of Directors may require.
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 Shares through the SGX-ST book-entry
settlement system will only be entitled to vote at a general meeting as a Shareholder if his name
appears on the depository register maintained by CDP 48 hours before the general meeting.
VOTING RIGHTS
Except as otherwise provided in our Articles of Association, two or more Shareholders must be
present in person or by proxy to constitute a quorum at any general meeting. Under our Articles
of Association:
• on a show of hands, every Shareholder present in person or by proxy shall have one vote
(provided that in the case of a Shareholder who is represented by two proxies, only one of
the two proxies as determined by that Shareholder or, failing such determination, by the
chairman of the meeting (or by a person authorised by the chairman) shall be entitled to vote
on a show of hands); and
• on a poll, every Shareholder present in person or by proxy shall have one vote for each Share
which he holds or represents.
APPENDIX H − DESCRIPTION OF OUR SHARES
H-2
A poll may be demanded in certain circumstances, including:
• by the chairman of the meeting;
• by any two Shareholders present in person or by proxy and entitled to vote; or
• by any Shareholder present in person or by proxy and representing not less than 10.0% of
the total voting rights of all Shareholders having the right to attend and vote at the meeting.
However, no poll may be demanded on the election of the chairman of the meeting or on a
question of adjournment of the meeting. In the case of a tied vote, whether on a show of hands
or a poll, the chairman of the meeting shall be entitled to a casting vote.
GENERAL MEETINGS OF SHAREHOLDERS
We are required to hold an annual general meeting every year. Our Board of Directors may
convene an extraordinary general meeting whenever it thinks fit and must do so if Shareholders
representing not less than 10.0% of the total voting rights of all Shareholders request in writing
that such a meeting be held. In addition, two or more Shareholders holding not less than 10.0%
of our issued share capital may call a meeting. Unless otherwise required by law or by our Articles
of Association, voting at general meetings is by ordinary resolution, requiring an affirmative vote
of a simple majority of the votes cast at that meeting. An ordinary resolution suffices, for example,
for the appointment of directors. A special resolution, requiring the affirmative vote of at least
75.0% of the votes cast at the meeting, is necessary for certain matters under Singapore law, such
as the voluntary winding up of our Company, amendments to our Memorandum and Articles of
Association, a change of our Company’s corporate name and a reduction in our share capital.
We must give at least 21 days’ notice in writing for every general meeting convened for the
purpose of passing a special resolution. Ordinary resolutions generally require at least 14 days’
notice in writing. For so long as our Shares are listed on Catalist, at least 14 days’ notice of any
general meeting shall be given in writing to the SGX-ST and by advertisement in the daily press.
The notice must be given to every Shareholder holding shares conferring the right to attend and
vote at the meeting 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. All general meetings shall be held
in Singapore.
LIMITATIONS ON RIGHTS TO HOLD OR VOTE SHARES
Singapore law and our Articles of Association do not impose any limitations on the right of
non-resident or foreign Shareholders to hold or exercise voting rights attached to our Shares.
DIVIDENDS
We may, by ordinary resolution of our Shareholders, declare dividends at a general meeting, but
we may not pay dividends in excess of the amount recommended by our Board of Directors. Our
Board of Directors may also declare an interim dividend without the approval of our Shareholders.
We must pay all dividends out of our profits. All dividends we pay are pro rata in amount to our
Shareholders in proportion to the amount paid-up on each Shareholder’s Shares, unless the rights
attaching to an issue of any Share provide otherwise.
APPENDIX H − DESCRIPTION OF OUR SHARES
H-3
Unless otherwise directed, dividends are paid by cheque or warrant sent through the post to each
Shareholder at his registered address appearing in our register of members or (as the case may
be) the depository register. However, our payment to CDP of any dividend payable to a
Shareholder whose name is entered in the depository register shall, to the extent payment made
to CDP, discharge us from any liability to that Shareholder in respect of that payment.
BONUS AND RIGHTS ISSUE
Our Board of Directors may, with the approval from our Shareholders at a general meeting,
capitalise any amounts standing to the credit of our reserve funds or otherwise available for
distribution or accounts to the credit of the profit and loss account and distribute the same as
bonus Shares credited as paid-up to the Shareholders in proportion to their shareholdings.
Our Board of Directors may also issue bonus Shares to participants of any share incentive or
option scheme or plan implemented by our Company and approved by our Shareholders in such
manner and on such terms as our Board of Directors shall think fit.
Our Board of Directors may also issue rights to take up additional Shares to Shareholders in
proportion to their shareholdings. Such rights are subject to any conditions attached to such issue
and the regulations of any securities exchange upon which our Shares are listed.
TAKEOVERS
The Companies Act, the Securities and Futures Act and the Singapore Take-over Code regulate
the acquisition of ordinary shares of public companies and contain certain provisions that may
delay, deter or prevent a future takeover or change in control of the Company. Any person
acquiring an interest resulting in him, either on his own or together with parties acting in concert
with him, holding 30.0% or more of our voting shares, or, such person holds, either on his own or
together with parties acting in concert with him, between 30.0% and 50.0% (both inclusive) of our
voting shares and acquires (either on his own or together with parties acting in concert with him)
more than 1.0% of our voting Shares within any six-month period, must extend a takeover offer
for the remaining voting shares in accordance with the provisions of the Singapore Take-over
Code.
“Parties acting in concert” comprise individuals or companies who, pursuant to an arrangement
or understanding (whether formal or informal), co-operate, through the acquisition by any of them
of shares in a company, to obtain or consolidate effective control that company. Certain persons
are presumed (unless the presumption is rebutted) to be acting in concert with each other. They
are as follows:
• a company and its related companies, the associated companies of any of the company and
its related companies and companies whose associated companies include any of these
companies;
• any person who has provided financial assistance (other than a bank in the ordinary course
of business) to any of the entities set out immediately above for the purchase of voting rights;
• a company and its directors (together with their close relatives, related trusts and companies
controlled by any of the directors, their close relatives and related trusts);
• a company and its pension funds and share schemes;
APPENDIX H − DESCRIPTION OF OUR SHARES
H-4
• a person and any investment company, unit trust or other fund whose investment such
person manages on a discretionary basis, but only in respect of the investment account
which such person manages;
• a financial or other professional adviser including a stockbroker, with its clients in respect of
shares held by (i) the adviser and persons controlling, controlled by or under the same
control as the adviser and (ii) all the funds managed by the adviser on a discretionary basis,
where the shareholdings of the adviser and any of those funds in the client total 10.0% or
more of the client’s equity share capital;
• directors of a company (together with their close relatives, related trusts and companies
controlled by any of such directors, their close relatives and related trusts) which is subject
to an offer or where the directors have reason to believe a bona fide offer for the company
may be imminent;
• partners;
• an individual and his close relatives, related trusts, any person who is accustomed to act in
accordance with his instructions and companies controlled by the individual, his close
relatives, his related trusts or any person who is accustomed to act in accordance with his
instructions; and
• any person who has provided financial assistance (other than a bank in the ordinary course
of business) to any of the persons set out immediately above for the purchase of voting
rights.
A mandatory offer for consideration other than cash must, subject to certain exceptions, 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 six (6) months preceding the acquisition of shares that
triggered the mandatory offer obligation.
Under the Singapore Take-over Code, where effective control of a public company incorporated
in Singapore is acquired or consolidated by a person, or persons acting in concert, a general offer
to all other shareholders is normally required. An offeror must treat all shareholders of the same
class in an offeree company equally. A fundamental requirement is that shareholders in the
company subject to the takeover offer must be given sufficient information, advice and time to
consider and decide on the offer.
LIQUIDATION OR OTHER RETURN OF CAPITAL
If the Company liquidates or in the event of any other return of capital, holders of the Shares will
be entitled to participate in any surplus assets in proportion to their shareholdings, subject to any
special rights attaching to any other class of shares then existing.
INDEMNITY
As permitted by Singapore law, our Articles of Association provide that, subject to the Companies
Act, we will indemnify our Board of Directors and officers 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 his favour or if the
APPENDIX H − DESCRIPTION OF OUR SHARES
H-5
proceedings are 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 for relief which
is granted to him by the court.
We 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.
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 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) business days after he becomes aware:
• that he is or (if he had ceased to be one) had been a Substantial Shareholder;
• of any change in the percentage level in his interest; or
• 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.
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.
APPENDIX H − DESCRIPTION OF OUR SHARES
H-6
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:
• our affairs are being conducted or the powers of our Board of Directors are being exercised
in a manner oppressive to, or in disregard of the interests of, one or more of our
Shareholders; or
• we take an action, or threaten to take an action, or the Shareholders pass a resolution, or
threaten to pass a resolution, which unfairly discriminates against, or is otherwise prejudicial
to, one or more of our Shareholders, including the applicant.
Singapore courts have wide discretion as to the relief they may grant and that relief is in no way
limited to the relief listed in the Companies Act. Without prejudice to the foregoing, Singapore
courts may among other things:
• direct or prohibit any act or cancel or vary any transaction or resolution;
• regulate the conduct of our affairs in the future;
• authorise civil proceedings to be brought in our name, or on our behalf, by a person or
persons and on such terms as the court may direct;
• provide for the purchase of a minority Shareholder’s shares by our other Shareholders or by
the Company and, in the case of a purchase of shares by us, a corresponding reduction of
our share capital; or
• provide that the Company be wound up.
APPENDIX H − DESCRIPTION OF OUR SHARES
H-7
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We are in a highly regulated industry. Extensive guidelines, regulations and laws govern our
business operations in Malaysia and Singapore. The following description is a summary of
material laws and regulations applicable to our Group under Malaysian law and Singapore law.
The regulations and policies set out below are not exhaustive and are only intended to provide
general information to the investors and are neither designed nor intended to be a substitute for
professional advice. Prospective investors should consult their own advisers regarding the
implication of Malaysia and Singapore laws and regulations on our Group.
Malaysia Laws
Private Healthcare Facilities in Malaysia
Private healthcare facilities in Malaysia are closely regulated by the Director General of Health of
Malaysia (“DGHM”) under the purview of the Ministry of Health of Malaysia (“MOH Malaysia”) in
accordance with the Private Healthcare Facilities and Services Act 1998 of Malaysia (“PHFS Act”)
and its relevant regulations, chief being the Private Healthcare Facilities And Services (Private
Hospitals and Other Private Healthcare Facilities) Regulations 2006 of Malaysia (“PHFS
Regulations”). Both ISEC KL and ISEC Penang currently operating in Malaysia are private
healthcare facilities as defined under the PHFS Act.
The PHFS Act requires that a licence issued by the DGHM be obtained before any premises or
conveyance is used as a private healthcare facility, hospital, medical clinic, clinical laboratory or
healthcare establishment, among others.
Both ISEC KL and ISEC Penang hold licences issued by MOH Malaysia which are subject to the
provisions of the PHFS Act and any directions or guidelines as may be given or issued from time
to time by the DGHM.
The PHFS Act and PHFS Regulations provide for, inter alia, the factors that determine when a
license may be issued or refused, persons who may manage, inter alia, private healthcare
facilities and their duties, the suspension or revocation of licenses, the establishment of quality
assurance committees by the licensees of private healthcare facilities and the powers of the
DGHM.
In determining whether to issue or refuse to issue a licence, the DGHM shall have regard to, inter
alia, the following:
(a) if the applicant is capable of providing adequate healthcare facilities or services;
(b) if the applicant is capable of providing adequate and efficient management and
administration for the proper conduct of the private healthcare facility or service;
(c) where the applicant is a sole proprietor, if he has not been convicted of an offence involving
fraud or dishonesty or is not an undischarged bankrupt; and
(d) no one who has been convicted of an offence involving fraud or dishonesty or who is an
undischarged bankrupt:
(i) is a member of the board of directors, or is a person responsible for the body corporate,
if the application is made by a body corporate; or
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(ii) is a partner, if the application is made by a partnership; or
(iii) is an office bearer of a society, if the application is made by a society.
The licence may be issued to a sole proprietor who is a medical practitioner, a partnership
consisting at least one partner who is a registered medical practitioner or a body corporate whose
board of directors consists at least one person who is a registered medical practitioner. The
duration of the licence to operate and provide private healthcare facilities will be for a period of
two (2) years from the date of issuance and is renewable at the discretion of the DGHM and
subject to such restrictions and conditions as the DGHM may think fit. The licence may also be
suspended or revoked if there is amongst others, a breach of any of the provisions of the PHFS
Act.
Any person who fails to register will be liable to a fine or imprisonment, and any person who fails
to renew the licence within six (6) months before its expiration will be subject to a fine. The licence
may also be suspended or revoked if there is amongst others, a breach of any of the provisions
of the PHFS Act, or any terms and conditions set out in the license. In addition, the approval to
establish and maintain, and the license to operate and provide, private healthcare facilities, may
only be transferred with the prior written approval of the DGHM.
Additionally, the licensee of a private hospital, medical clinic or healthcare establishment is
required to keep and maintain proper medical records. Licensees are required under the PHFS
Regulations to take all reasonable steps, including implementing such processes as are
necessary, to ensure that a separate patient’s medical record is kept for each patient where each
patient is assigned with a registration number, all such medical records be properly dated and
authenticated, and to implement adequate safeguards to protect the patient’s medical record
against loss, tampering or use by unauthorised persons. Any infringement of these obligations
would render the person committing the offence liable on conviction to a fine or imprisonment.
Licensees are also required to ensure the records are not taken out of the private healthcare
facility save under a court order, and ensure the retention of the records for at least the specified
limitation period under the law.
Further, it is the duty of a licensed private healthcare facility to inform, within 14 days, the DGHM,
of any change in the person in charge of the private healthcare facility or service to which his or
its license or certificate of registration relates and the qualifications, training and experience of the
new person in charge.
The PHFS Regulations provide a fee schedule on the maximum chargeable fees for medical
examination, medical procedures and consultation fees in a private healthcare facility. Other
services and administrative charges such as medical supplies are unregulated and vary for each
private healthcare facility.
Ancillary Laws and Regulations
The operation of healthcare business in Malaysia is also subject to other ancillary laws and
regulations, including:
(a) Approvals, permits, and licences are required for the premises, facilities and use of
equipment of private healthcare facilities which include, among others:
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(i) the certificate of fitness to occupy building by the local authority; and
(ii) fire certificate by the Fire Department in accordance with the Fire Services Act 1998 of
Malaysia and Fire Services (Fire Certificate) Regulations 2011 of Malaysia;
(b) The Medicines (Advertisement and Sale) Act 1956 of Malaysia, the Medicine Advertisements
Board Regulations 1976 of Malaysia, and the Advertising Guidelines for Healthcare Facilities
and Services that govern the advertisement and dissemination of information to the general
public in relation to healthcare matters. All information in such advertisements must be
accurate and verifiable by the Medicine Advertisements Board, without misleading the public
with exaggerated, false or deceptive information on the services offered;
(c) The Poisons Act 1952 of Malaysia which requires pharmacist handling medicine in a private
healthcare facility to have a valid license to import, store and deal with the permitted poisons;
and
(d) The Prevention and Control of Infectious Diseases Act 1988 of Malaysia, which regulates the
surveillance and disease control and prevention activities.
Medical Practitioners in Malaysia
Pursuant to the Medical Act 1971 (“Medical Act”), in order to practise in Malaysia, medical
practitioners are required to register with the Malaysian Medical Council (“MMC”). The Medical Act
mandates medical practitioners to obtain an Annual Practising Certificate. Medical practitioners
are required to abide by the ethical codes and guidelines issued by the MMC, amongst them the
Code of Professional Conduct which sets out the minimum standards of conduct. A medical
practitioner is generally expected, inter alia, to:
(a) conscientious assessment of the history, symptoms and signs of a patient’s condition;
(b) sufficiently thorough professional attention, examination and where necessary, diagnostic
investigation;
(c) competent and considerate professional management;
(d) appropriate and prompt action upon evidence suggesting the existence of condition requiring
urgent medical intervention; and
(e) readiness, where the circumstances so warrant, to consult appropriate professional
colleagues.
A medical practitioner who breaches these minimum standards may be subjected to a disciplinary
hearing, which may result in reprimanding, suspension, a fine or being struck off from the register.
Personal Data Protection laws
The Malaysia Personal Data Protection Act 2010 (“Malaysia PDPA”), which came into force on 15
November 2013, regulates the processing of personal data in commercial transactions and
governs the collection, use and disclosure of such personal data. “Personal data” as defined in the
Malaysia PDPA covers data in commercial transactions which relates directly or indirectly to an
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individual, is identified or identifiable from that information or from that and other information in the
possession of an organisation. The Malaysia PDPA also governs the processing of sensitive
personal data (being information as to the physical or mental health or condition of a data subject,
his political opinions, his religious beliefs or other beliefs of a similar nature, the commission or
alleged commission by him of any offence) and expression of opinion about the individual.
Under the Malaysia PDPA, there are seven (7) personal data protection principles, being:
(a) General Principle – an entity may only process the personal data with the consent of the
individual subject matter of the personal data, for a lawful purpose, and such personal data
collected must not be excessive or beyond the requirement of the purpose.
(b) Notice & Choice Principle – an individual (“data subject”) must be provided written notice
that his personal data is being collected and processed for such specified purposes, and
whether it is obligatory or voluntary for the data subject to consent to such personal data be
collected and processed. If obligatory, the notice must set out the consequences for not
providing such consent.
(c) Disclosure Principle – an entity must only disclose personal data for purposes to such third
parties and for the purpose of which the data subject has consented to.
(d) Security Principle – an entity must take practical steps to protect the personal data from loss,
misuse, modification, unauthorised or accidental access or disclosure, alteration or
destruction.
(e) Retention Principle – an entity must not retain the personal data longer than necessary for
the fulfilment of the purpose for which it was collected.
(f) Data Integrity Principle – an entity must take reasonable steps to ensure the personal data
is accurate, complete, not misleading and kept up to date by having regard to the purpose
for which the personal data was collected.
(g) Access Principle – the data subject must be provided access to his personal data and to
correct it if it is inaccurate, incomplete, misleading or not up to date.
An infringement of the Malaysia PDPA is a criminal offence and upon conviction attracts a fine
and/or imprisonment.
Singapore Laws
Private Hospitals and Medical Clinics Act, Chapter 248 of Singapore (“PHMC Act”)
Private hospitals, medical clinics, clinical laboratories and healthcare establishments in Singapore
are regulated by the PHMC Act and relevant subsidiary legislation, primarily the Private Hospitals
and Medical Clinics Regulations 2003 (“PHMC Regulations”) and the Private Hospitals and
Medical Clinics (Publicity) Regulations. All our centres in Singapore are medical clinics as defined
under the PHMC Act.
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The PHMC Act requires that a licence issued by the Director of Medical Services (“DMS”) be
obtained before any premises or conveyance is used as a private hospital, medical clinic, clinical
laboratory or healthcare establishment.
All our centres in Singapore hold licences issued by MOH Singapore which are subject to the
provisions of the PHMC Act and any directions or guidelines as may be given or issued from time
to time by the DMS.
The PHMC Act and PHMC Regulations provide for, inter alia, the factors that determine when a
licence may be issued or refused, persons who may manage, inter alia, medical clinics or clinical
laboratories and their duties, the suspension or revocation of licences, the establishment of
quality assurance committees by the licensees of medical clinics or clinical laboratories and the
powers of the DMS.
In determining whether to issue or refuse to issue a licence, the DMS shall have regard to, inter
alia, the following:
(a) the character and fitness of the applicant to be issued with a licence or, where the applicant
is a body corporate, the character and fitness of the members of the board of directors or
committee or board of trustees or other governing body of the body corporate;
(b) the ability of the applicant to operate and maintain a private hospital, medical clinic, clinical
laboratory or healthcare establishment, as the case may be, in accordance with the
prescribed standards;
(c) the suitability of the premises or conveyance (including the facilities and equipment therein)
to be licensed for use as a private hospital, medical clinic, clinical laboratory or healthcare
establishment, as the case may be; and
(d) the adequacy of the nursing and other staff that are to be employed at the premises or
conveyance to be licensed.
The licence may be granted for a period of two (2) years and is renewable at the discretion of the
DMS and subject to such restrictions and conditions as the DMS may think fit. The licence may
also be suspended or revoked if there is amongst others, a breach of any of the provisions of the
PHMC Act.
Additionally, the licensee of a private hospital, medical clinic or healthcare establishment is
required to keep and maintain proper medical records. Licensees are required under the PHMC
Regulations to take all reasonable steps, including implementing such processes as are
necessary, to ensure that the medical records are as accurate, complete and up-to-date as are
necessary for the purposes for which they are to be used, and to implement adequate safeguards
(whether administrative, technical or physical) to protect the medical records against accidental or
unlawful loss, modification or destruction, or unauthorised access, disclosure, copying, use or
modification. Licensees are also required to periodically monitor and evaluate the safeguards to
ensure that they are effective and being complied with by the persons involved in handling the
medical records, as well as take reasonable care in the disposal or destruction of the medical
records so as to prevent unauthorised access to the records.
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Any changes in the appointment of any person as the manager or deputy manager of a licensee
of a private hospital, medical clinic or clinical laboratory or any intention by a licensee to cease
operating or to let, sell or in any way dispose of a private hospital, medical clinic, clinical laboratory
or healthcare establishment shall require notification to be made to the DMS.
The Private Hospital and Medical Clinics Guidelines 1993 also requires all medical and dental
clinics to make available to patients, prior to consultation, information on charges which are likely
to be incurred for consultation, investigation and treatment.
If a private hospital, medical clinic, clinical laboratory or healthcare establishment is not licensed
or is used otherwise than in accordance with the terms and conditions of its licence, every person
having the management or control thereof shall be guilty of an offence and shall be liable on
conviction to a fine not exceed S$20,000 or to imprisonment for a term not exceeding two (2) years
or to both.
Medical Registration Act, Chapter 174 of Singapore (“Medical Registration Act”)
The Medical Registration Act provides for, inter alia, the establishment of the SMC and the
registration of medical practitioners in Singapore.
The functions of the SMC include:
(a) keeping and maintaining registers of registered medical practitioners;
(b) issuing practising certificates to registered medical practitioners;
(c) approving or rejecting applications for registration under the Medical Registration Act or
approving any such application subject to such restrictions as it may think fit;
(d) making recommendations to the appropriate authorities for the training and education of
registered medical practitioners; and
(e) determining and regulating the conduct and ethics of registered medical practitioners.
No person shall practise as a medical practitioner unless he is registered under the Medical
Registration Act and has a valid practising certificate. Any person who is not qualified and, inter
alia, (a) practises medicine; (b) wilfully and falsely pretends to be a duly qualified medical
practitioner; (c) practises medicine or any branch of medicine, under the style or title of physician,
surgeon, doctor; or (d) advertises or holds himself out as a medical practitioner, shall be guilty of
an offence and shall be liable on conviction to a fine not exceeding $100,000 or to imprisonment
for a term not exceeding 12 months or to both. In the case of a second or subsequent conviction,
a fine not exceeding $200,000 or imprisonment for a term not exceeding two (2) years or both will
be imposed.
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Private Hospitals and Medical Clinics (Publicity) Regulations
The publicity of healthcare institutions, defined as private hospitals, medical clinics, clinical
laboratories and healthcare establishments, is regulated under the Private Hospitals and Medical
Clinics (Publicity) Regulations 2004. The licensee of a healthcare institution shall ensure that any
publicity of the services of the healthcare institution conducted by him or any other person on his
behalf in Singapore complies with the following requirements:
(a) the information contained in the publicity must be factually accurate and capable of being
substantiated, and must not be exaggerated, false, misleading or deceptive;
(b) the publicity must not be offensive, ostentatious or in bad taste such as to undermine the
honour and dignity of the medical, dental or nursing profession;
(c) the publicity must not contain any information that implies that the healthcare institution can
obtain results from treatment not achievable by other healthcare institutions or create an
unjustified expectation from the treatment provided; or compares and contrasts the quality of
the services of the healthcare institution with those provided by other healthcare institutions
or deprecate the services of other healthcare institutions;
(d) the publicity must not contain any laudatory statements (including statements of prominence
or uniqueness) or superlatives to describe the services of the healthcare institution;
(e) the information contained in the publicity must not contain any testimonial or endorsement of
the services, including the services of any employee of the healthcare institution; and
(f) the publicity must not provide information to the public in such a manner as to amount to
soliciting or encouraging the use of the services provided by or at any healthcare institution.
Ancillary laws and regulations
The operation of healthcare business in Singapore is also subject to other ancillary laws and
regulations, including:
(a) the Optometrists and Opticians Act, Chapter 213A of Singapore;
(b) Guidelines on Aesthetics Practices for Doctors;
(c) the Medicines Act, Chapter 176 of Singapore, which provides provisions relating to, inter alia,
general provisions for the manufacturing of and dealing in medicinal products, the
considerations of the licensing authority for granting licences, the regulation of pharmacies,
the labelling of medicines, the packaging of medicines and the content of materials
advertising and/or promoting the sale of medical products;
(d) the Poisons Act, Chapter 234 of Singapore, which regulates the importation, possession,
manufacture, compounding, storage, transport and sale of poisons;
(e) the Sale of Drugs Act, Chapter 282 of Singapore, which makes provisions for the sale of
drugs in a pure state so that consumers are supplied with the quantity and quality of drugs
demanded by them, explicitly or implicitly;
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(f) the Health Products Act, Chapter 122D of Singapore, which regulates the manufacture,
import, supply, presentation and advertisement of health products and active ingredients
used in the manufacture of health products;
(g) the Nurses and Midwives Act, Chapter 209 of Singapore, which provides for the registration
and enrolment of nurses and other matters connected therewith such as the regulation of
standards for the training and education of, among others, registered nurses and enrolled
nurses;
(h) the Pharmacists Registration Act, Chapter 230 of Singapore, which stipulates the
qualification requirements and application processes for registration of pharmacists, and
regulates the practice of pharmacy in Singapore;
(i) the Infectious Diseases Act, Chapter 137 of Singapore, which relates to the quarantine and
prevention of infectious diseases; and
(j) the Human Organ Transplant Act, Chapter 131A of Singapore, which stipulates provisions for
the removal of organs for transplantation, including the removal of organs after death and
organ transplants from living donors.
Singapore Medical Council Ethical Code and Ethical Guidelines
The Singapore Medical Council Ethical Code sets out the fundamental tenets of conduct and
behaviour expected of doctors practising in Singapore. Under the Singapore Medical Council
Ethical Code, a doctor is generally expected, inter alia, to:
(a) be dedicated to providing competent, compassionate and appropriate medical care to
patients;
(b) provide access to treatment and treat patients without prejudice of race, religion, creed,
social standing, disability or financial status;
(c) maintain the highest standards of moral integrity and intellectual honesty;
(d) keep confidential all medical information about patients; and
(e) keep abreast of medical knowledge relevant to practice and ensure that clinical and technical
skills are maintained.
The Singapore Medical Council Ethical Guidelines elaborate on the application of the Singapore
Medical Council Ethical Code and are intended as a guide to all medical practitioners as to what
the SMC regards as the minimum standards required of all medical practitioners in the discharge
of their professional duties and responsibilities in practice in Singapore.
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Some of the relevant guidelines provided include:
(a) doctors who have any financial or professional relationship with organisations offering
medical services have responsibility for the organisation’s standard of information output
about themselves and must therefore acquaint themselves with the nature and content of the
organisation’s information output as well as their press and media output; and
(b) doctors may provide information about their qualifications, areas of practice, practice
arrangements and contact details. Such information, where permitted, shall be factual,
accurate, verifiable and shall not be an extravagant claim, misleading, sensational,
persuasive, laudatory, comparative or disparaging.
Personal Data Protection Act
The Singapore Personal Data Protection Act (No. 26 of 2012) (“Singapore PDPA”) governs the
collection, use and disclosure of individuals’ personal data by organisations. An organisation is
required to comply with the following obligations:
(i) obtain the consent of the individual before collecting, using or disclosing his personal data;
(ii) may collect, use or disclose personal data about an individual only for purposes that a
reasonable person would consider appropriate in the circumstances and, if applicable, have
been notified to the individual concerned;
(iii) notify the individual of the purpose(s) for which it intends to collect, use or disclose the
individual’s personal data on or before such collection, use or disclosure of the personal
data;
(iv) upon request, (i) provide an individual with his or her personal data in the possession or
under the control of the organisation and information about the ways in which the personal
data may have been used or disclosed during the past year; and (ii) correct an error or
omission in an individual’s personal data that is in the possession or under the control of the
organisation;
(v) make a reasonable effort to ensure that personal data collected by or on behalf of the
organisation is accurate and complete if the personal data is likely to be used by the
organisation to make a decision that affects the individual concerned or disclosed by the
organisation to another organisation;
(vi) protect personal data in its possession or under its control by making reasonable security
arrangements to prevent unauthorised access, collection, use, disclosure, copying,
modification, disposal or similar risks;
(vii) cease to retain documents containing personal data, or remove the means by which the
personal data can be associated with particular individuals as soon as it is reasonable to
assume that (i) the purpose for which the personal data was collected is no longer being
served by retention of the personal data, and (ii) retention is no longer necessary for legal
or business purposes;
APPENDIX I − SUMMARY OF RELEVANT MALAYSIA ANDSINGAPORE LAWS AND REGULATIONS
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(viii) not transfer personal data to a country or territory outside Singapore except in accordance
with the requirements prescribed under the Singapore PDPA; and
(ix) implement the necessary policies and practices in order to meet its obligations under the
Singapore PDPA and make information about its policies and practices available on request.
If an organisation is found to be in breach of the Singapore PDPA, the Personal Data Protection
Commission may require the organisation to (i) stop collecting, using or disclosing person data in
contravention of the Singapore PDPA; (ii) destroy personal data collected in contravention of the
Singapore PDPA; (iii) provide access to or correct the personal data; and/or (iv) pay a financial
penalty of an amount not exceeding S$1 million.
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The following is a discussion of certain tax matters arising under the current tax laws in Singapore
and Malaysia and is not intended to be and does not constitute legal or tax advice.
While this discussion is considered to be a correct interpretation of existing laws in force as at the
date of this Offer Document, no assurance can be given that the courts or fiscal authorities
responsible for the administration of such laws will agree with this interpretation or that changes
in such law, which may be retrospective, will not occur. The discussion is limited to a general
description of certain tax consequences in Singapore and Malaysia with respect to ownership of
the Shares by Singapore investors, and does not purport to be a comprehensive or exhaustive
description of all of the tax considerations that may be relevant to a Shareholder’s decision with
regard to the ownership of the Shares.
Prospective investors should consult their tax advisers regarding Singapore and Malaysia tax and
other tax consequences of owning and disposing the Shares. It is emphasised that neither our
Company, the Vendors, our Directors nor any other persons involved in this Placement accepts
responsibility for any tax effects or liabilities resulting from the subscription, purchase, holding or
disposal of our Shares.
SINGAPORE TAXATION
The following discussion describes the material Singapore income tax, stamp duty, goods and
services tax and estate duty consequences of the purchase, ownership and disposal of the
Shares:
Singapore Income Tax
Individual income tax
Individual taxpayers who are Singapore tax residents are subject to tax on income accrued in or
derived from Singapore, subject to certain exceptions. All foreign-sourced income (except for
income received through a partnership in Singapore) received or deemed received in Singapore
by tax resident individuals will be generally exempt from tax. Certain Singapore-sourced
investment income received or deemed received by tax resident individuals is also exempt from
tax.
A Singapore tax resident individual is taxed at progressive rates up to a maximum rate of 20%.
Non-resident individuals, subject to certain exceptions, are generally subject to tax on income
accrued in or derived from Singapore at a flat rate of 20%, except that Singapore employment
income is taxed at a flat rate of 15% or at progressive resident rates with relief, whichever yields
a higher tax.
An individual is regarded as a tax resident in Singapore if in the calendar year preceding the year
of assessment, 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 ordinarily resides in
Singapore.
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Corporate income tax
A Singapore tax resident corporate taxpayer is subject to Singapore income tax on:
• income accrued in or derived from Singapore; and
• foreign-sourced income received or deemed received in Singapore, unless it is exempted
under the Singapore Income Tax Act (“SITA”).
Foreign-sourced income in the form of branch profits, dividends and service fee income
(collectively referred to as “specified foreign income”) received or deemed received in Singapore
by a Singapore tax resident corporate taxpayer on or after 1 June 2003 are exempted from
Singapore tax subject to meeting the following conditions:-
(i) At the time the income is received in Singapore, the highest rate of tax of a similar character
to income tax (by whatever name called) levied under the law of the territory from which the
income is received is at least 15%;
(ii) Such income is subject to tax of a similar character to income tax under the law of the
jurisdiction from which such income is received; and
(iii) IRAS is satisfied that the tax exemption would be beneficial to the recipient of the foreign
income.
A company is regarded as tax resident in Singapore if the control and management of the
company’s business is exercised in Singapore. Generally, control and management of the
company is vested in its board of directors and the place where the board of directors’ meetings
are held is regarded to be the place where the management and control of the Company is
exercised.
The corporate tax rate in Singapore is 17% after the partial tax exemption on the first S$300,000
of a company’s chargeable income as follows:
(i) 75% of the first S$10,000 of a company’s chargeable income; and
(ii) 50% of the next S$290,000 of a company’s chargeable income.
A start-up tax exemption scheme (“full tax exemption”) is granted to newly incorporated
Singapore companies for the first three (3) consecutive Years of Assessment (“YsA”), subject to
meeting the qualifying conditions. Under full tax exemption, the first S$300,000 of the company’s
normal chargeable income will be exempted as follows:
(i) 100% of the first S$100,000 of chargeable income; and
(ii) 50% of the next S$200,000 of chargeable income.
The remaining chargeable income (after the tax exemptions as mentioned above) will be taxed at
the prevailing corporate tax rate of 17%.
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However, full tax exemption is no longer available to the following companies incorporated after
25 February 2013:
• A company whose principal activity is that of investment holding; and
• A company whose principal activity is that of developing properties (i.e. a company that buys
or leases land and arranges for a building to be built on the land in order to lease, manage
or sell the building).
For the YsA 2013 to 2015, companies will be granted a 30% corporate income tax rebate, capped
at S$30,000 for each YsA.
Dividend Distributions
Singapore adopts the One-Tier Corporate Tax System. Under such system, the tax paid by a
Singapore resident company is a final tax and the after-tax profits of the company can be
distributed to its shareholders as one-tier tax exempt dividends, regardless of their tax residence
status or whether the shareholders are individual or corporate.
Further, there is no Singapore withholding tax applicable on dividends paid to both Singapore
resident shareholders as well as non-Singapore resident shareholders.
Capital Gains Tax
Singapore does not impose a tax on capital gains. However, there are no specific laws or
regulations which deal with the characterisation of capital gains, and hence, gains may be
construed to be of an income nature and therefore be subject to tax if they arise from activities
which the IRAS regards as the carrying on of a trade or business in Singapore. Any gains from the
disposal of the Shares are generally not taxable in Singapore unless the seller is regarded as
having derived gains of an income nature in Singapore, in which case, the gains would be taxable
as income.
For any disposal of our Shares made during the period 1 June 2012 to 31 May 2017 (both dates
inclusive) by companies, there is certainty that any gains derived by the seller (a divesting
company) from its disposal of our Shares would not be taxable if immediately prior to the date of
share disposal, the divesting company has held at least 20% of our Shares for a continuous period
of at least 24 months.
In addition, corporate 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 revenue gains or
losses (i.e. excluding capital gains or losses) in accordance with the provisions of SFRS 39 (as
modified by the applicable provisions of Singapore income tax law) even though no sale or
disposal of our Shares have been made.
Bonus Shares
Any bonus shares received by our Shareholders are not taxable.
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Estate Duty
Singapore estate duty has been abolished with effect from 15 February 2008.
Stamp Duty
There is no stamp duty payable on the subscription for, allotment or holding of shares.
Where shares evidenced in certificated form are acquired in Singapore, with effect from 22
February 2014, stamp duty is payable on the instrument of transfer of shares at the rate of 0.2%
of the purchase price or market value of the shares transferred, whichever is higher.
The purchaser is liable for stamp duty unless there is an agreement to the contrary. Stamp duty
is not applicable to electronic transfers of shares through the scripless trading system given that
that the transfer does not require instruments of transfer to be executed.
As our Shares will be listed on Catalist and their transfers will be “scripless” transfers via CDP, no
stamp duty will be imposed on the transfers of our Shares via CDP.
Goods and Services Tax (“GST”)
The sale of the Shares by a GST-registered investor belonging to Singapore through a SGX-ST
member is an exempt supply for GST purposes and hence, not subject to GST. Any GST directly
or indirectly incurred by the investor in respect of this exempt sale is not claimable from the
Comptroller of GST.
Where our Shares are sold by a GST-registered investor in the course of a business to a person
belonging outside Singapore, and that person is outside Singapore when the sale is executed, the
sale should generally, subject to satisfaction of certain conditions, be considered a taxable supply
subject to GST at zero-rate. Any GST incurred by a GST-registered investor in the making of this
supply in the course of furtherance of a business may, subject to the provisions of the Goods and
Services Tax Act, be recoverable from the Comptroller of GST as input tax.
Services such as brokerage, handling and clearing services rendered by a GST-registered person
to an investor belonging in Singapore in connection with the investor’s purchase, sale or holding
of our Shares will be subject to GST at the standard rate of 7%. Similar services rendered to an
investor belonging outside Singapore is generally subject to GST at zero-rate, provided that the
investor is outside Singapore when the services are performed and the services provided do not
benefit any Singapore persons.
Shareholders, whether or not domiciled in Singapore, should consult their own tax advisers
regarding the Singapore tax and estate duty consequences of their acquisition ownership and/or
disposal of our Shares.
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MALAYSIAN TAXATION
The following discussion describes the material Malaysian tax on dividend and tax on gains from
sale:
Dividend Distributions
Under Malaysian law, income tax is payable on income accruing or derived from Malaysia or
received in Malaysia. Dividends paid or credited by a company which is tax resident in Malaysia
(“Malaysian resident company”) would be deemed to be derived from Malaysia and are thus not
taxable in Malaysia under the Single Tier System.
Prior to 1 January 2011 (2008), Malaysia adopted the imputation system which required the
imposition of tax on the profit at corporate level and again at shareholders level. The principle
behind the imputation system is to overcome the double taxation of income. Under the imputation
system, companies resident in Malaysia are required to deduct tax at source at the prevailing
corporate tax rate on dividends paid to their shareholders. The same income would be taxed twice
if the credit is not imputed to the shareholders.
The single-tier tax system was introduced in Budget 2011(2008) to replace the imputation system
with effect from year of assessment 2011(2008). Under this system, corporate income is taxed at
corporate level and this is a final tax. Dividends distributed to the shareholders are tax-exempted
in their hands.
Subject to certain exceptions, the tax rate for year of assessment 2014 is 25%.
The income of any person, other than a Malaysian resident company carrying on the business of
banking, insurance or sea or air transport, for the basis year for a year of assessment derived from
sources outside Malaysia and received in Malaysia, is tax-exempt under the Malaysia Income Tax
Act.
Gains on Disposal of the Shares in a Malaysian company
There is no capital gains tax in Malaysia except for real property gains tax (“RPGT”) which is
charged upon gains arising from the disposal of real property in Malaysia or shares in a real
property company incorporated in Malaysia. Any gains from sales of shares in a Malaysian
company by a person who deals in shares may be regarded as income and is subject to income
tax under the Malaysia Income Tax Act.
APPENDIX J − SUMMARY OF MALAYSIA LAW ANDSINGAPORE LAW RELATING TO TAXATION
J-5
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1. NAME OF THE SCHEME
The Scheme shall be called the “ISEC Healthcare Share Option Scheme”.
2. DEFINITIONS
2.1 In the Scheme, unless the context otherwise requires, the following words and expressions
shall have the following meanings:
“Adoption Date” The date on which the Scheme is adopted by the
Company in general meeting
“Aggregate Subscription Cost” The total amount payable for Shares which may be
acquired on the exercise of an Option
“Articles” The Articles of Association of the Company, as
amended from time to time
“Associate” Has the meaning ascribed to it in the SGX-ST Catalist
Rules
“Auditors” The auditors of the Company for the time being
“Board” The board of directors of the Company
“CDP” The Central Depository (Pte) Limited
“Committee” The committee comprising directors of the Company
duly appointed to administer the Scheme from time to
time
“Companies Act” The Companies Act, Chapter 50 of Singapore, as
amended, modified or supplemented from time to time
“Company” ISEC Healthcare 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 person who: (a) holds directly or indirectly 15% or
more of the number of all voting shares in a company;
or (b) in fact exercises control over a company, unless
otherwise determined
“CPF” Central Provident Fund
“Date of Grant” In relation to an Option, the date on which the Option is
granted pursuant to Rule 6
APPENDIX K − RULES OF THE ISEC HEALTHCARESHARE OPTION SCHEME
K-1
“Director” A person holding office as a director for the time being
of the Company and/or its Subsidiaries, as the case
may be
“Employee” An employee of the Group selected by the Committee
to participate in the Scheme
“Executive Director” A director for the time being of the Company and/or any
of its Subsidiaries, holding office in an executive
capacity in the Company and/or such Subsidiary
“Exercise Period” The period for the exercise of an Option, being a period
commencing:
(a) after the first anniversary of the Date of Grant and
expiring on the tenth anniversary of such Date of
Grant in the case of a Market Price Option; and
(b) after the second anniversary of the Date of Grant
and expiring on the tenth anniversary of such Date
of Grant in the case of an Incentive Option
“Exercise Price” The price at which a Participant shall subscribe for
each Share upon the exercise of an Option which shall
be the price as determined in accordance with Rule 7,
as adjusted in accordance with Rule 12
“Grantee” The person to whom an offer of an Option is made
“Group” The Company and its Subsidiaries
“Incentive Option” An Option granted with the Exercise Price set at a
discount to the Market Price
“Market Day” A day on which the SGX-ST is open for trading in
securities
“Market Price” A price equal to the average of the last dealt prices for
the Shares on the SGX-ST over the five consecutive
Trading Days immediately preceding the Date of Grant
of that Option, as determined by the Committee by
reference to the daily official list or any other
publication published by the SGX-ST, rounded to the
nearest whole cent in the event of fractional prices
“Market Price Option” An Option granted with the Exercise Price set at the
Market Price
“Non-Executive Director” A director (other than an Executive Director) from time
to time of the Company and/or any of its Subsidiaries
APPENDIX K − RULES OF THE ISEC HEALTHCARESHARE OPTION SCHEME
K-2
“Option” The right to subscribe for Shares granted or to be
granted to an Employee pursuant to the Scheme and
for the time being subsisting
“Participant” The holder of an Option
“Record Date” The date as at the close of business (or such other time
as may have been prescribed by the Company) on
which Shareholders must be registered in order to
participate in the dividends, rights, allotments or other
distributions (as the case may be)
“Rules” Rules of the Scheme
“Scheme” The ISEC Healthcare Share Option Scheme, as the
same may be modified or altered from time to time
“Securities Account” The securities account maintained by a Depositor with
CDP
“Shareholders” The registered holders for the time being of Shares
“SGX-ST” Singapore Exchange Securities Trading Limited
“SGX-ST Catalist Rules” Catalist Rules of the SGX-ST
“Shares” Ordinary shares in the capital of the Company
“Subsidiary” A company (whether incorporated within or outside
Singapore and wheresoever resident) being a
subsidiary for the time being of the Company within the
meaning of Section 5 of the Companies Act
“Trading Day” A day on which the Shares are traded on the SGX-ST
“S$” Singapore Dollar
“%” Per centum or percentage
2.2 The terms “Depositor”, “Depository Agent” and “Depository Register” shall have the
meanings ascribed to them respectively by Section 130A of the Companies Act.
2.3 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 gender.
2.4 Any reference to a time of a day in the Scheme is a reference to Singapore time.
2.5 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 Companies Act or any
statutory modification thereof and used in the Scheme shall have the meaning assigned to
it under the Companies Act.
APPENDIX K − RULES OF THE ISEC HEALTHCARESHARE OPTION SCHEME
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3. OBJECTIVES OF THE SCHEME
3.1 The Scheme is a share incentive plan. The Scheme is proposed on the basis that it is
important to retain staff whose contributions are essential to the well-being and prosperity
of the Group and to give recognition to outstanding Employees who have contributed to the
growth of the Group.
3.2 The objectives of the Scheme are as follows:
(a) the retention of key employees of the Group whose contributions are essential to the
long-term growth and profitability of the Group;
(b) to instill loyalty to, and a stronger identification by the Participants with the long-term
prosperity of, the Company;
(c) to attract potential employees with relevant skills to contribute to the Group and to
create value for the Shareholders of the Company; and
(d) to align the interests of the Participants with the interests of the Shareholders.
4. ELIGIBILITY OF PARTICIPANTS
4.1 The Employee’s eligibility to participate in the Scheme shall be at the absolute discretion of
the Committee. Such person must:
(a) be a full-time employee confirmed in his/her employment with the Group;
(b) have attained the age of 21 years on or before the Date of Grant; and
(c) not be an undischarged bankrupt and must not have entered into a composition with
his creditors.
4.2 Non-Executive Directors who satisfy the eligibility requirements in Rules 4.1(b) and (c) shall
also be eligible to participate in the Scheme.
4.3 Persons who are Controlling Shareholders and their respective Associates shall, if each
such person meets the eligibility criteria in Rules 4.1 and 4.2, be eligible to participate in the
Scheme provided that:
(a) their participation in the Scheme is specifically approved by independent Shareholders
in a separate resolution for each such person;
(b) the aggregate number of Shares which may be offered by way of grant of Options to
all Controlling Shareholders and their respective Associates under the Scheme shall
not exceed 25% of the total number of Shares available under the Scheme; and
(c) the number of Shares which may be offered by way of grant of Options to each
Controlling Shareholder and his respective Associate under the Scheme shall not
exceed 10% of the total number of Shares available under the Scheme.
APPENDIX K − RULES OF THE ISEC HEALTHCARESHARE OPTION SCHEME
K-4
No Option shall be granted to such Controlling Shareholders or their respective Associates
unless the actual number and terms of Options to be granted shall be approved by
independent Shareholders in a separate resolution for each such person. A circular, letter
or notice to Shareholders proposing such a resolution shall include a clear rationale for the
proposed participation by such Controlling Shareholders or their respective Associates.
Such circular, letter or notice to Shareholders shall also include a clear rationale for the
number and terms (including Exercise Price) of the Options to be granted.
4.4 Subject to the Companies Act and any requirement of the SGX-ST, the terms of eligibility
for participation in the Scheme may be amended from time to time at the absolute discretion
of the Committee, which would be exercised judiciously.
5. MAXIMUM ENTITLEMENT
Subject to Rule 4, Rule 11 and Rule 12, the aggregate number of Shares in respect of which
Options may be offered to a Grantee for subscription in accordance with the Scheme shall
be determined at the discretion of the Committee, which would be exercised judiciously,
who shall take into account criteria such as the rank and responsibilities within the Group,
contribution and performance, years of service/appointment and potential for future
development of the Grantee and the performance of the Company.
6. GRANT AND ACCEPTANCE OF OPTIONS
6.1 Save as provided in Rule 11, the Committee may grant Options at any time during the
period when the Scheme is in force, provided that in the event that an announcement on
any matter of an exceptional nature involving unpublished price sensitive information is
made, Options may only be granted on or after the second Market Day from the date on
which such announcement is released.
6.2 The Letter of Offer to grant an Option shall be in, or substantially in, the form set out in
Schedule A, subject to such modification as the Committee may from time to time
determine.
6.3 An Option shall be personal to the person to whom it is granted and shall not be transferred
(other than to a Participant’s personal representative on the death of that Participant),
charged, assigned, pledged or otherwise disposed of, in whole or in part, except with the
prior approval of the Committee.
6.4 The grant of an Option under this Rule 6 shall be accepted by the Grantee within 30 days
from the Date of Grant of that Option and, in any event, not later than 5.00 p.m. on the
thirtieth day from such Date of Grant by completing, signing and returning the Acceptance
Form in or substantially in the form set out in Schedule B, subject to such modification as
the Committee may from time to time determine, accompanied by payment of S$1.00 as
consideration.
6.5 If a grant of an Option is not accepted in the manner as provided in Rule 6.4, such offer
shall, upon the expiry of the 30-day period, automatically lapse and become null, void and
of no effect.
APPENDIX K − RULES OF THE ISEC HEALTHCARESHARE OPTION SCHEME
K-5
6.6 In the event that the grant of an Option results in a contravention of any applicable law,
subsidiary legislation or other regulation, such grant shall be null, void and of no effect and
the relevant Participant shall have no claim whatsoever against the Company.
7. EXERCISE PRICE
7.1 Subject to any adjustment pursuant to Rule 12, the Exercise Price for each Share in respect
of which an Option is exercisable shall be determined by the Committee, in its absolute
discretion, on the Date of Grant, at:
(a) a price equal to the Market Price; or
(b) a price which is set at a discount to the Market Price, provided that:
(i) the maximum discount shall not exceed 20.0% of the Market Price (or such other
percentage or amount as may be determined by the Committee and permitted by
the SGX-ST); and
(ii) the Shareholders in general meeting shall have authorised, in a separate
resolution, the making of offers and grants of Options under the Scheme at a
discount not exceeding the maximum discount as aforesaid.
7.2 The Exercise Price shall in no event be less than the nominal value of a Share. When the
Exercise Price as determined above is less than the nominal value of a Share, the Exercise
Price shall be the nominal value.
8. RIGHTS TO EXERCISE OPTIONS
8.1 Subject as provided in Rule 8 and Rule 9 and any other conditions as may be introduced
by the Committee from time to time, a Market Price Option or an Incentive Option, as the
case may be, shall be exercisable, in whole or in part, as follows:
(a) in the case of a Market Price Option, during the period commencing after the first
anniversary of the Date of Grant and expiring on the tenth anniversary of such Date
of Grant (or such shorter period if so determined by the Committee); and
(b) in the case of an Incentive Option, during the period commencing after the second
anniversary of the Date of Grant and expiring on the tenth anniversary of such Date
of Grant (or such shorter period if so determined by the Committee)
In the event of an Option being exercised in part only, the balance of the option not thereby
exercised shall continue to be exercisable in accordance with the Scheme until such time
as it shall lapse in accordance with the Scheme.
APPENDIX K − RULES OF THE ISEC HEALTHCARESHARE OPTION SCHEME
K-6
8.2 An Option shall, to the extent unexercised, 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 8.3, where the Participant ceases at any time to be in the employment
of any of the Group, for any reason whatsoever;
(c) 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 Option; or
(d) the company by which he is employed 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.
For the purpose of Rule 8.2(b), the Participant shall be deemed to have ceased to be so
employed as of the last day of his employment. For avoidance of doubt, no Option shall
lapse pursuant to Rule 8.2(b) in the event of any transfer of employment of a Participant
between companies in the Group.
8.3 Where the Participant ceases at any time to be in the employment of the Group by reason
of:
(a) ill health, injury or disability (in each case, evidenced to the satisfaction of the
Committee);
(b) redundancy;
(c) retirement at or after the legal retirement age;
(d) retirement before the legal retirement age with the consent of the Committee; or
(e) completion of the term of his service contract,
or any other reason approved in writing by the Committee, he may, exercise any
unexercised Option within the relevant Option Period and such unexercised Option shall
continue to be exercisable by the Participant in the manner provided in the Scheme (unless
otherwise decided by the Committee at its absolute discretion), and upon the expiry of such
period, the Option shall immediately lapse and become null and void.
8.4 If a Participant dies, whether or not while still in the employment of any of the companies
in the Group and at the date of his death holds any unexercised Option, such Option shall
continue to be exercisable by the duly appointed personal representatives of the Participant
within the relevant Option Period and such unexercised Option shall continue to be
exercisable in the manner provided in the Scheme (unless otherwise decided by the
Committee at its absolute discretion), and upon the expiry of such period, the Option shall
immediately lapse and become null and void.
APPENDIX K − RULES OF THE ISEC HEALTHCARESHARE OPTION SCHEME
K-7
9. TAKE-OVER AND WINDING-UP OF THE COMPANY
9.1 Notwithstanding Rule 8 but subject to Rule 9.5, in the event of a take-over being made for
the Shares, a Participant shall be entitled to exercise any Option held by him and as yet
unexercised, in respect of such number of Shares comprised in that Option as may be
determined by the Committee in its absolute discretion, in the period commencing on the
date on which such offer is made or, if such offer is conditional, the date on which such offer
becomes or is declared unconditional, as the case may be, and ending on the earlier of:
(a) the expiry of six months thereafter, unless prior to the expiry of such six-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 (in either case, being a date
falling not later than the expiry of the Exercise Period relating thereto); or
(b) the date of expiry of the Exercise Period relating thereto, whereupon the Option then
remaining unexercised shall lapse.
Provided that if during such period, the offeror becomes entitled or bound to exercise rights
of compulsory acquisition under the provisions of the Companies Act and, being entitled to
do so, gives notice to the Participants that it intends to exercise such rights on a specified
date, the Option shall remain exercisable by the Participant until the expiry of such specified
date or the expiry of the Exercise Period relating thereto, whichever is earlier. Any Option
not so exercised shall lapse provided that the rights of acquisition or obligations to acquire
shall have been exercised or performed, as the case may be. If such rights or obligations
have not been exercised or performed, the Option shall, notwithstanding Rule 8, remain
exercisable until the expiry of the Exercise Period relating thereto.
9.2 If: (a) under any applicable laws, the court sanctions a compromise or arrangement
proposed for the purposes of, or in connection with, a scheme for the reconstruction of the
Company or its amalgamation with another company or companies, or (b) there is a change
of control of the Company, each Participant shall be entitled (subject to Rule 9.5), to
exercise any Option then held by him, in respect of such number of Shares comprised in
that Option, during the period: (i) in the case of scenario (a) above, commencing on the date
upon which the compromise or arrangement is sanctioned by the court and ending either on
the expiry of 60 days thereafter or the date upon which the compromise or arrangement
becomes effective, whichever is later, or (ii) in the case of scenario (b) above, commencing
on the date upon which the change of Control becomes effective and ending on the expiry
of 60 days thereafter (but in either case, not after the expiry of the Exercise Period relating
thereto), whereupon the Option shall lapse and become null and void.
9.3 If an order is made 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.
9.4 In the event a notice is given by the Company to its members to convene a general meeting
for the purposes of considering and, if thought fit, approving a resolution to voluntarily
wind-up the Company, the Company shall on the same date as or soon after it dispatches
such notice to each member of the Company give notice thereof to all Participants (together
with a notice of the existence of the provisions of this Rule 9.4) and thereupon, each
Participant (or his personal representative) shall be entitled to exercise all or any of his
Options at any time not later than two business days prior to the proposed general meeting
APPENDIX K − RULES OF THE ISEC HEALTHCARESHARE OPTION SCHEME
K-8
of the Company by giving notice in writing to the Company, accompanied by a remittance
for the full amount of the Aggregate Subscription Cost for the Shares in respect of which
notice is given whereupon the Company shall as soon as possible and, in any event, no
later than the business day immediately prior to the date of the proposed general meeting
referred to above, allot the relevant Shares to the Participant credited as fully paid.
9.5 If in connection with the making of a general offer referred to in Rule 9.1 or the scheme
referred to in Rule 9.2 or the winding-up referred to in Rule 9.4, arrangements are made
(which are confirmed in writing by the Auditors, acting only as experts and not as arbitrators,
to be fair and reasonable) for the compensation of Participants, whether by the continuation
of their Options or the payment of cash or the grant of other options or otherwise, a
Participant holding an Option, as yet not exercised, may not, at the discretion of the
Committee, be permitted to exercise that Option as provided for in this Rule 9.
9.6 To the extent that an Option is not exercised within the periods referred to in this Rule 9,
it shall lapse and become null and void.
10. EXERCISE OF OPTIONS, ALLOTMENT AND LISTING OF SHARES
10.1 Subject to Rule 8.1, an Option may be exercised, in whole or in part, by a Participant giving
notice in writing to the Company in or substantially in the form set out in Schedule C, subject
to such modification as the Committee may from time to time determine. Such notice must
be accompanied by payment in cash for the full amount of the Aggregate Subscription Cost
in respect of the Shares for which that Option is exercised and any other documentation the
Committee may require. An Option shall be deemed to be exercised upon receipt by the
Company of the said notice, duly completed, and the full amount of the Aggregate
Subscription Cost as aforesaid. All payments made shall be made by cheque, cashiers’
order, banker’s draft or postal order made out in favour of the Company or such other mode
of payment as may be acceptable to the Company.
10.2 Subject to the SGX-ST Catalist Rules and prevailing legislation, the Company shall have
the flexibility to deliver Shares to Participants upon exercise of their Options by way of:
(a) allotment of new Shares; and/or
(b) transfer of existing Shares, including (subject to applicable laws) any Shares acquired
by the Company pursuant to a share purchase mandate and/or held by the Company
as treasury shares.
In determining whether to issue new Shares or to deliver existing Shares to Participants
upon the exercise of their Options, the Company will take into account factors such as (but
not limited to):
(i) the prevailing Market Price of the Shares;
(ii) the prevailing Market Price of the Shares relative to the financial performance of the
Company;
(iii) the cash position of the Company;
APPENDIX K − RULES OF THE ISEC HEALTHCARESHARE OPTION SCHEME
K-9
(iv) the projected cash needs of the Company;
(v) the dilution impact (if any);
(vi) the cost to the Company of either issuing new Shares or purchasing existing Shares;
and
(vii) the liquidity of the Shares based on the average daily trading volume of the Shares,
and in particular whether the repurchase by the Company of existing Shares to deliver
to Participants upon exercise of their Options would materially impact the Market Price
of the Shares.
10.3 Subject to all such consents or other required action of any competent authority under any
regulations or enactment for the time being in force as may be necessary and subject to the
compliance with the terms of the Scheme and the Memorandum and Articles of Association
of the Company, the Company shall, within 10 Market Days after the exercise of an Option,
allott, transfer or procure the transfer (as the case may be) of the relevant Shares in respect
of which such Option has been exercised by the Participant and within five (5) Market Days
from the date of such allotment, despatch to CDP the relevant share certificates by ordinary
post or such other mode as the Committee may deem fit.
10.4 Where new Shares are allotted upon the exercise of an Option, the Company shall, as soon
as practicable after such allotment, apply to the SGX-ST for permission to deal in and for
quotation of such 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 in accordance
with Rule 12.
10.4 Shares which are allotted or transferred on the exercise of an Option by a Participant shall
be issued or registered (as the case may be), as the Participant may elect, in the name of
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.
10.5 Shares acquired upon the exercise of an Option shall:
(a) be subject to all the provisions of the Companies Act and the Memorandum and
Articles of Association of the Company; and
(b) rank in full for all entitlements, including dividends, rights, allotments 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 upon which such exercise
occurred, and shall in all other respects rank pari passu with other existing Shares
then in issue.
10.6 The Company shall keep available sufficient unissued Shares to satisfy the full exercise of
all Options for the time being remaining capable of being exercised.
APPENDIX K − RULES OF THE ISEC HEALTHCARESHARE OPTION SCHEME
K-10
11. LIMITATION ON THE SIZE OF THE SCHEME
The total number of new Shares over which the Committee may grant Options on any date,
when added to the number of new Shares issued and issuable in respect of (a) all Options
granted under the Scheme; and (b) all awards granted under any other share option, share
incentive, performance share or restricted share plan implemented by the Company and for
the time being in force, shall not exceed 15.0% of the number of all issued Shares
(excluding treasury shares) on the day preceding that date.
12. ADJUSTMENT EVENTS
12.1 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 Exercise Price of the Shares, class and/or number of Shares comprised in an
Option to the extent unexercised; and/or
(b) the class and/or number of Shares over which Options may be granted under the
Scheme,
shall be adjusted in such manner as the Committee may determine to be appropriate.
12.2 Unless the Committee considers an adjustment to be appropriate, the issue 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 SGX-ST during the period when a share
purchase mandate granted by the Shareholders (including any renewal of such mandate)
is in force, shall not normally be regarded as a circumstance requiring adjustment.
12.3 Notwithstanding the provisions of Rule 12.1:
(a) no such adjustment shall be made if as a result the Participant receives a benefit that
a Shareholder does not receive; and
(b) any adjustment (except in relation to a capitalisation issue) must be confirmed in
writing by the Auditors (acting only as experts and not as arbitrators) to be in their
opinion, fair and reasonable.
12.4 Upon any adjustment required to be made pursuant to this Rule 12, 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 Exercise Price thereafter in effect and class and/or number of
Shares thereafter to be issued on the exercise of the Option. Any adjustment shall take
effect upon such written notification being given.
APPENDIX K − RULES OF THE ISEC HEALTHCARESHARE OPTION SCHEME
K-11
13. ADMINISTRATION OF THE SCHEME
13.1 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, provided that no member of the
Committee shall participate in any deliberation or decision in respect of Options to be
granted to him or held by him.
13.2 The Committee shall have the power, from time to time, to make and vary such regulations
(not being inconsistent with the Scheme) for the implementation and administration of the
Scheme as they think fit. Any matter pertaining or pursuant to the Scheme and any dispute
and uncertainty as to the interpretation of the Scheme, any rule, regulation or procedure
thereunder or any rights under the Scheme shall be determined by the Committee.
13.3 Neither the Scheme nor the grant of Options under the Scheme shall impose on the
Company or the Committee any liability whatsoever in connection with:
(a) the lapsing or early expiry of any Options pursuant to any provision of the Scheme;
(b) the failure or refusal by the Committee to exercise, or the exercise by the Committee
of, any discretion under the Scheme; and/or
(c) any decision or determination of the Committee made pursuant to any provision of the
Scheme.
13.4 Any decision or determination of the Committee made pursuant to any provision of the
Scheme (other than a matter to be certified by the Auditors) shall be final, binding and
conclusive.
14. NOTICES
14.1 Any notice required to be given by a Participant to the Company shall be sent or made to
the principal place of business 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.
14.2 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.
14.3 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 14.2 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.
APPENDIX K − RULES OF THE ISEC HEALTHCARESHARE OPTION SCHEME
K-12
15. MODIFICATIONS TO THE SCHEME
15.1 Any or all 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) no modification or alteration shall alter adversely the rights attaching to any Option
granted prior to such modification or alteration except 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 75.0% of the number of all the Shares which would
fall to be allotted upon exercise in full of all outstanding Options;
(b) any modification or alteration which would be to the advantage of Participants under
the Scheme shall be subject to the prior approval of the Shareholders in general
meeting; and
(c) no modification or alteration shall be made without the prior approval of the SGX-ST
and such other regulatory authorities as may be necessary.
15.2 Notwithstanding anything to the contrary contained in Rule 15.1, the Committee may at any
time by resolution (and without 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 provision or the regulations of any regulatory or
other relevant authority or body (including the SGX-ST).
15.3 Written notice of any modification or alteration made in accordance with this Rule 15 shall
be given to all Participants.
16. TERMS OF EMPLOYMENT UNAFFECTED
The terms of employment of a Participant shall not be affected by his participation in the
Scheme, 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.
17. DURATION OF THE SCHEME
17.1 The Scheme shall continue to be in force at the discretion of the Committee, subject to a
maximum period of 10 years commencing on the Adoption Date, provided always that the
Scheme may continue beyond the above stipulated period with the approval of the
Shareholders by ordinary resolution in general meeting and of any relevant authorities
which may then be required.
17.2 The Scheme may be terminated at any time by the Committee, at the discretion of the
Committee, or by resolution of the Company in general meeting, subject to all relevant
approvals which may be required and if the Scheme is so terminated, no further Options
shall be offered by the Company hereunder.
17.3 The termination of the Scheme shall not affect Options which have been granted and
accepted as provided in Rule 6.4, whether such Options have been exercised (whether fully
or partially) or not.
APPENDIX K − RULES OF THE ISEC HEALTHCARESHARE OPTION SCHEME
K-13
18. TAXES
All taxes (including income tax) arising from the exercise of any Option granted to any
Participant under the Scheme shall be borne by that Participant.
19. COSTS AND EXPENSES OF THE SCHEME
19.1 Each Participant shall be responsible for all fees of CDP relating to or in connection with the
issue and allotment of any Shares pursuant to the exercise of any Option in CDP’s name,
the deposit of share certificate(s) with CDP, the Participant’s Securities Account with CDP,
or the Participant’s securities sub-account with a Depository Agent.
19.2 Save for the taxes referred to in Rule 18 and such other 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 allotment and issue of Shares pursuant to the exercise
of any Option shall be borne by the Company.
20. 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 the Shares or applying for or procuring the listing of the Shares on the
SGX-ST in accordance with Rule 10.4.
21. DISCLOSURE IN ANNUAL REPORT
The following disclosures (as applicable) will be made by the Company in its annual report
for so long as the Scheme continues in operation and for so long as the Shares are listed
on the SGX-ST:
(a) the names of the members of the Committee;
(b) the information in respect of Options granted to the following Participants in the table
set out below:
(i) Directors of the Company;
(ii) Participants who are Controlling Shareholders and/or their Associates; and
(iii) Participants, other than those in (i) and (ii) above, who receive 5.0% or more of
the total number of Shares comprised in Options available under the Scheme.
APPENDIX K − RULES OF THE ISEC HEALTHCARESHARE OPTION SCHEME
K-14
Name of
Participant
Number of
Shares
comprised in
Options
granted during
financial year
under review
(including
terms)
Aggregate
number of
Shares
comprised in
Options
granted since
commencement
of Scheme to
end of financial
year under
review
Aggregate
number of
Shares
comprised in
Options
exercised since
commencement
of Scheme to
end of financial
year under
review
Aggregate
number of
Shares
comprised in
Options
outstanding as
at end of
financial year
under review
(c) in respect of Incentive Options, the following disclosure shall be made:
(i) the number of Incentive Options granted at a discount of 10.0% or less and
proportion to Market Price Options during the financial year under review; and
(ii) the number of Incentive Options granted at a discount of more than 10.0% and
proportion to Market Price Options during the financial year under review
(d) If any of the above requirements is not applicable, an appropriate negative statement
shall be included therein.
22. ABSTENTION FROM VOTING
Shareholders who are eligible to participate in the Scheme shall abstain from voting on any
resolution relating to the Scheme and any modification thereof. Such Shareholders who are
eligible to participate in the Scheme may, however, act as proxies of other Shareholders in
respect of the votes of such other Shareholders in relation to any such resolutions, provided
that specific instructions have been given in the proxy forms on how the votes are to be cast
in respect of the resolution.
23. 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.
24. GOVERNING LAW
The Scheme shall be governed by, and construed in accordance with, the laws of the
Republic of Singapore. The Participants, by accepting Options in accordance with the
Scheme, and the Company submit to the exclusive jurisdiction of the courts of the Republic
of Singapore.
APPENDIX K − RULES OF THE ISEC HEALTHCARESHARE OPTION SCHEME
K-15
Schedule A
ISEC HEALTHCARE SHARE OPTION SCHEME
LETTER OF OFFER
Serial No:
Date:
To: [Name]
[Designation]
[Address]
Private and Confidential
Dear Sir/Madam,
1. We have the pleasure of informing you that, pursuant to the ISEC Healthcare Share Option
Scheme (the “Share Option Scheme”), you have been nominated to participate in the
Share Option Scheme by the Committee (the “Committee”) appointed by the Board of
Directors of ISEC Healthcare Ltd. (the “Company”) to administer the Share Option
Scheme. Terms as defined in the Share Option Scheme shall have the same meaning when
used in this letter.
2. Accordingly, in consideration of the payment of a sum of S$1.00, an offer is hereby made
to grant you an option (the “Option”), to subscribe for and be allotted
Shares at the price of S$ for each Share.
3. The Option is personal to you and shall not be transferred, charged, pledged, assigned or
otherwise disposed of by you, in whole or in part, except with the prior approval of the
Committee.
4. The Option shall be subject to the terms of the Share Option Scheme, a copy of which is
available for inspection at the business address of the Company.
5. If you wish to accept the offer of the Option on the terms of this letter, please sign and return
the enclosed Acceptance Form with a sum of S$1.00 not later than 5.00 p.m. on
, failing which this offer will lapse.
Yours faithfully,
For and on behalf of
ISEC Healthcare Ltd.
Name:
Designation:
APPENDIX K − RULES OF THE ISEC HEALTHCARESHARE OPTION SCHEME
K-16
Schedule B
ISEC HEALTHCARE SHARE OPTION SCHEME
ACCEPTANCE FORM
Serial No:
Date:
To: The Committee,
ISEC Healthcare Share Option Scheme
Closing Date for Acceptance of Offer:
Number of Shares Offered:
Exercise Price for each Share: S$
Total Amount Payable: S$
I have read your Letter of Offer dated and agree to be bound by the
terms of the Letter of Offer and the Share Option Scheme referred to therein. Terms defined in
your Letter of Offer shall have the same meanings when used in this Acceptance Form.
I hereby accept the Option to subscribe for Shares at S$
for each Share. I enclose cash for S$1.00 in payment for the purchase of the Option/I authorise
my employer to deduct the sum of S$1.00 from my salary in payment for the purchase of the
Option.
I understand that I am not obliged to exercise the Option.
I confirm that my acceptance of the Option will not result in the contravention of any applicable law
or regulation in relation to the ownership of shares in the Company or options to subscribe for such
shares.
I agree to keep all information pertaining to the grant of the Option to me confidential.
I further acknowledge that you have not made any representation to induce me to accept the offer
and that the terms of the Letter of Offer and this Acceptance Form constitute the entire agreement
between us relating to the offer.
Please print in block letters
Name in full :
Designation :
Address :
Nationality :
*NRIC/Passport No :
Signature :
Date :
Note:
* Delete accordingly
APPENDIX K − RULES OF THE ISEC HEALTHCARESHARE OPTION SCHEME
K-17
Schedule C
ISEC HEALTHCARE SHARE OPTION SCHEME
FORM OF EXERCISE OF OPTION
Total number of ordinary shares (the “Shares”)
offered at S$ for each
Share (the “Exercise Price”) under the
ISEC Healthcare Share Option Scheme
on (Date of Grant) :
Number of Shares previously allotted thereunder :
Outstanding balance of Shares to be allotted
thereunder :
Number of Shares now to be subscribed :
To: The Committee,
ISEC Healthcare Share Option Scheme
1. Pursuant to your Letter of Offer dated and my acceptance thereof,
I hereby exercise the Option to subscribe for Shares in ISEC Healthcare
Ltd. (the “Company”) at S$ for each Share.
2. I enclose a *cheque/cashier’s order/banker’s draft/postal order no. for
S$ by way of subscription for the total number of the said Shares.
3. I agree to subscribe for the said Shares subject to the terms of the Letter of Offer, the ISEC
Healthcare Share Option Scheme and the Memorandum and Articles of Association of the
Company.
4. I declare that I am subscribing for the said Shares for myself and not as a nominee for any
other person.
5. I request the Company to allot and issue the Shares in the name of The Central Depository
(Pte) Limited (“CDP”) for credit of my *Securities Account with CDP/Sub-Account with the
Depository Agent/CPF investment account with my Agent Bank specified below and I
hereby agree to bear such fees or other charges as may be imposed by CDP in respect
thereof.
APPENDIX K − RULES OF THE ISEC HEALTHCARESHARE OPTION SCHEME
K-18
Please print in block letters
Name in full :
Designation :
Address :
Nationality :
*NRIC/Passport No :
*Direct Securities Account No. :
OR
*Sub-Account No. :
Name of Depository Agent :
OR
*CPF Investment :
Account No. :
Name of Agent Bank :
Signature :
Date :
Note:
* Delete accordingly
APPENDIX K − RULES OF THE ISEC HEALTHCARESHARE OPTION SCHEME
K-19
This page has been intentionally left blank.
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APPENDIX L – SINGAPORE AND MALAYSIA OPHTHALMOLOGYMARKET OVERVIEW
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SINGAPORE AND MALAYSIA OPHTHALMOLOGY MARKET OVERVIEW
20 August 2014
FINAL REPORT
© 2014
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APPENDIX L – SINGAPORE AND MALAYSIA OPHTHALMOLOGYMARKET OVERVIEW
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TABLE OF CONTENT
Chapter 1: Executive Summary 3
Chapter 2: ASEAN
Healthcare expenditure 4
Ophthalmology expenditure 6
Chapter 3: Malaysia
Eye disorders market 7
Ophthalmology services market 7
Market drivers for private ophthalmology services 10
Trends 11
Regulatory environment 11
Barriers of entry to private ophthalmology sector 11
Competitive landscape 11
Chapter 4: Singapore Eye disorders market 13
Ophthalmology services market 13
Market drivers for private ophthalmology services 16
Trends 16
Regulatory environment 16
Barriers of entry to private ophthalmology sector 17
Competitive landscape 17
Chapter 5: Medical Tourism Malaysia 18
Singapore 20
Chapter 6: Summary 22
GLOSSARY 23
BIBLIOGRAPHY 25
ABBREVIATIONS 25
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APPENDIX L – SINGAPORE AND MALAYSIA OPHTHALMOLOGYMARKET OVERVIEW
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CHAPTER 1 Executive Summary
Both Malaysia and Singapore have huge growth potential for their respective ophthalmology market, particularly in the areas of cataract surgery, LASIK and vitreoretinal surgeries. Having identified the healthcare sector as a National Key Economic Areas (NKEA), Malaysia’s healthcare expenditure is expected to experience continuous growth of 7.0% CAGR from SGD 12.0 billion in 2008 to SGD 23.5 billion in 2018. Similarly, with an ageing population, Singapore is also experiencing an increase in healthcare expenditure, which is expected to reach SGD 32.1 billion in 2018 from SGD 8.1 billion in 2008 at a CAGR of 14.8%. Both Singaporeans and Malaysians suffer from several common eye disorders such as dry eyes, cataract, myopia, glaucoma, age-related macular degeneration (AMD). Common drivers for ophthalmology services market in Malaysia and Singapore include an ageing population, increased awareness of eye disorders, rising income level, increased uptake of private insurance and growth of medical tourism. In addition, the rising incidence level of diabetes is also a key driver for the ophthalmology services market in Malaysia. Cataract surgery, LASIK and vitreoretinal surgery are the most common ophthalmological surgery procedures in both Malaysia and Singapore. While the prices for cataract, LASIK and vitreoretinal surgeries are generally lower in the public sector than in the private sector (with the exception of Malaysia’s LASIK surgery which is only offered by the private sector), it was found that both Malaysians and Singaporeans who can afford the price charged by private healthcare providers prefer private healthcare services over public healthcare services. This is attributed to the shorter waiting time, higher quality as well as more personalized treatment and patient care offered by the private ophthalmology services providers. As these procedures typically require constant follow-up, use of laser and injection of medication, private ophthalmology services providers are often the patients preferred choice due to the few aforementioned attributes. There is huge opportunity for private ophthalmology players. However, new entrants need to consider certain barriers to entry in both countries. The high start-up costs required to setup a private clinic remains the main deterrence for those entering the private ophthalmology market in both countries. Additionally, the reputation of ophthalmologists is a key factor in determining one’s success in the private ophthalmology market. Besides that, specifically for Malaysia, there are stringent regulations under the Private Healthcare Facilities and Services Act 2006 that have to be adhered to in order to setup a private clinic. Overall, the continuous growth of the ophthalmology services market in Malaysia and Singapore shows that there remains an unmet demand for current ophthalmology market players to expand and for market entrants to tap on. With a well-planned business strategy, both current players and new entrants could prosper in the ophthalmology services market.
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APPENDIX L – SINGAPORE AND MALAYSIA OPHTHALMOLOGYMARKET OVERVIEW
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CHAPTER 2 ASEAN
The Association of South East Asian Nations (ASEAN) is a political and economic organization with ten member countries. The Member States are Indonesia, Thailand, Philippines, Malaysia, Singapore, Brunei, Myanmar, Vietnam, Laos and Cambodia. Based on the World Population data prepared by United Nations Population Division, the population of ASEAN is expected to increase from 633 million people in 2015 to 717 million in 2030 and 741 million people in 2035, at an average rate of 0.85% annually. The growth in population of some ASEAN countries and Taiwan is shown in Figure 1 below. The GDP of ASEAN has passed SGD 2.5 trillion in 2011 and is expected to reach SGD 3.8 trillion in 2015 and SGD 5.0 trillion in 20201.
Figure 1: Population in selected countries in 2008, 2013 and 2018. (Source: The World Bank)
Healthcare expenditure
Strong growth in Malaysia’s healthcare expenditure is projected to continue at a CAGR of 7.0% from SGD 12.0 billion in 2008 to SGD 23.5 billion in 2018 (Figure 2). One of the factors is the identification of the healthcare sector by the Malaysia government as one of the National Key Economic Areas (NKEA) to attract investment from multinationals. Malaysia’s healthcare expenditure stood at 3.8% of its GDP in 2013 and is expected to increase to 4.2% in 20182,3.
The healthcare expenditure in Singapore is projected to reach SGD 32.1 billion in 2018 with a CAGR of 14.8% from SGD 8.1 billion in 2008 (Figure 2). Healthcare expenditure of Singapore stood at 5.0% of their GDP in 2013 and is expected to increase to 6.4% in 20182,3. The key drivers of growth include Singapore’s rising affluent and the ageing population.
Healthcare expenditure in Indonesia is likely to continue its positive growth trend, particularly with the growing penetration of the universal public health insurance. The total healthcare expenditure in Indonesia is projected to increase at a CAGR of 14.8% from SGD 13.1 billion in 2008 to SGD 52.0 billion in 2018 (Figure 2). Healthcare expenditure as a percentage of GDP is estimated to be 2.7% in 2013 and is forecasted to decrease slightly to 2.5% of the GDP by 2018 as healthcare sector in Indonesia remains in the negative list for foreign investment where there is a limit in terms of foreign ownership2,3.
Healthcare expenditure in Thailand is likely to continue its positive growth trend due to its universal healthcare coverage that will continue to safeguard its people. The total healthcare expenditure in Thailand is projected to increase at a CAGR of 7.4% from SGD 13.6 billion in 2008 to SGD 27.9 billion (Figure 2). Healthcare expenditure as a percentage of GDP stood at 4.1% in 2013 and is forecasted to remain constant by 20182,3.
Healthcare expenditure in Philippines is likely to increase, particularly with the growing penetration of its universal public health insurance. The total healthcare expenditure in Philippines is projected to increase at a CAGR of 12.7%
27.34.8
234.2
66.290.4 85.1
51.2
22.929.75.4
249.9
67.0
98.4 89.7
53.3
23.231.86.0
262.9
69.0
115.597.0
58.0
23.3
Malaysia Singapore Indonesia Thailand Philippines Vietnam Myanmar Taiwan
Population (million), 2008-2018
2008 2013 2018F
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APPENDIX L – SINGAPORE AND MALAYSIA OPHTHALMOLOGYMARKET OVERVIEW
5
from SGD 8.0 billion in 2008 to SGD 26.6 billion in 2018 (Figure 2). Healthcare expenditure as a percentage of GDP is estimated to be 4.7% in 2013 and is forecasted to increase to 5.2% of the GDP by 20182,3.
Healthcare expenditure in Vietnam will continue to grow, owing to its strong economic growth. The increasing expenditure can be attributed to the establishment of new healthcare infrastructure in rural areas and efforts to ease access to basic medicine. The total healthcare expenditure in Vietnam is projected to increase at a CAGR of 13.7% from SGD 8.1 billion in 2008 to SGD 29.4 billion in 2018 (Figure 2). Healthcare expenditure as a percentage of GDP stood at 6.2% in 2013 and is forecasted to increase to 6.8% of the GDP by 20182,3.
The healthcare expenditure in Myanmar is projected to reach SGD 2.5 billion in 2018 with a CAGR of 14.9% from SGD 0.6 billion in 2008 (Figure 2). The key drivers of growth include the increase of investments by the government in the healthcare sector. Healthcare expenditure of Myanmar stood at 1.8% of their GDP in 2013 and is expected to remain similar in 20182,3.
The healthcare expenditure in Taiwan is projected to reach SGD 51.6 billion in 2018 with a CAGR of 5.3% from SGD 30.8 billion in 2008 (Figure 2). The key drivers of growth include efforts by Taiwanese government to promote the life science industry. Healthcare expenditure of Taiwan stood at 6.6% of their GDP in 2013 and is expected to decrease to 6.2% in 2018 because the government is cutting the cost spent on the public health insurance system due to financial constraints2,3.
Figure 2 below shows the total healthcare expenditure across 7 ASEAN countries and Taiwan. It is expected that the total healthcare expenditure will continue to grow from 2013 to 2018 in the eight countries.
Figure 2: Total healthcare expenditure for selected countries in 2008, 2013 and 2018. (Source: Trading Economics, The World Bank, Frost & Sullivan analysis)
The public-private split of the healthcare expenditure in 2013 among the above mentioned ASEAN countries is shown in Figure 3 below. It is expected that the public-private split for the above ASEAN countries will not deviate by more than 2.0% by 2018, except for Myanmar where the public spending is expected to increase to 45.2% of the total healthcare expenditure as the government is looking to improve the public healthcare facilities and services.
12.08.1
13.1 13.68.0 8.2
0.6
30.8
15.118.0
29.6
20.115.8
13.3
1.4
40.6
23.5
32.1
52.0
27.9 26.629.4
2.5
51.6
Malaysia Singapore Indonesia Thailand Philippines Vietnam Myanmar Taiwan
Total Healthcare Expenditure (SGD billion)
2008 2013 2018F
14.8%7.0%
14.8%
7.4%12.7% 13.7%
14.9%
5.3%
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APPENDIX L – SINGAPORE AND MALAYSIA OPHTHALMOLOGYMARKET OVERVIEW
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Figure 3: Public and private healthcare expenditure split for selected ASEAN countries in 2013. (Source: WHO)
Ophthalmology expenditure
In Malaysia, the proportion of eye care expenditure (including eye care products such as eye drop and contact lenses) is much higher at 9.3% of the overall healthcare expenditure or SGD 1.4 billion as shown in Figure 4 below. This is because the public sector in Malaysia does not provide comprehensive services as compared to the public sector in Singapore (e.g. LASIK is not offered in public sector) and therefore, eye patients in Malaysia need to spend more engaging services in the private sector. The eye care expenditure for Singapore in 2012 was approximately 6.7% of the overall healthcare expenditure or SGD 1.2 billion as shown in Figure 4 below. It is expected that the ophthalmology expenditure in both countries will continue to grow in the next 5 years due to the key drivers mentioned in Chapters 3 and 4.
Figure 4: Ophthalmology expenditure for Malaysia and Singapore in 2012. (Source: Health Medical Advisory, Frost & Sullivan analysis)
46.5 32.2 33.0
75.738.5 42.4 29.5
57.7
53.5 67.8 67.0
24.361.5 57.6 70.5
42.3
Public vs Private Healthcare Expenditure (%)
Public Private
1.41.2
0
0.4
0.8
1.2
1.6
2
Malaysia Singapore
Bill
ion
Ophthalmology Expenditure in 2012 (SGD Billion)
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APPENDIX L – SINGAPORE AND MALAYSIA OPHTHALMOLOGYMARKET OVERVIEW
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CHAPTER 3 Malaysia
Eye disorders market
Malaysia’s rural-urban divide is the key factor in explaining Malaysia’s eye disease prevalence. Although Malaysia has become increasingly urbanized, 27.0% of the population remains in rural areas4. The differences lifestyle and living conditions between rural and urban areas are contributing factors to the difference in prevalence of eye disease between the two areas. While refractive errors affect a large number of Malaysians, there are many who have yet to seek treatment. This represents a huge untapped market for ophthalmology services. Refractive errors currently accounts for 7.8% of eye patients in rural areas, and 11.0% of eye patients in urban areas. Prevalence of myopia across different racial groups in Malaysia differs. In a previous study, it was found that the Chinese has the highest prevalence of myopia at 30.9% followed by Indians at 12.5% and Malays at 9.2%5. In both urban and rural areas, cataract is the most common eye disorder, accounting for 22.9% of eye disorders in rural areas, and 32.9% of eye disorders in urban areas6. In particular, cataract is responsible for a large majority of severe visual impairments in rural areas, accounting for 11 out of 12 visual impairment cases. This is followed by vitreoretinal diseases, which accounts for 12.7% of eye disorders in rural areas. In urban areas, vitreoretinal diseases accounts for 14.5% of eye disorders6. In urban areas, the most common vitreoretinal disease is diabetic retinopathy, which accounts for close to two-thirds of patients with vitreoretinal diseases, or 9.7% of overall eye disorders. The prevalence for glaucoma is approximately 1.4-3.2% for Malaysians age over 407. These eye disorders can be treated by different methods. One of the most common methods is through surgery. Laser-Assisted in situ Keratomileusis (LASIK) is a type of refractive surgery using a laser to correct eye disorders such as myopia, hypermetropia and astigmatism. Cataract surgery is performed to remove the natural lens of the eye that has developed opacification. A synthetic lens is subsequently inserted to restore the lens transparency. Vitreoretinal surgery is conducted to treat age-related macular degeneration (AMD), retinal detachment, diabetic retinopathy and macular holes. Ophthalmology services market
Besides myopia, other eye disorders also plague Malaysia. Dry eyes affect 14.5% of Malaysian population while AMD affects 13.0% of Malaysian above 50 years old8,9. Cataract surgery, LASIK and vitreoretinal surgeries are the most common ophthalmology surgeries in Malaysia’s ophthalmology market. Cataract and vitreoretinal diseases are age-related and are relatively common among individuals above 40. Figure 5 below shows that the population above 40 years old is likely to reach 8.35 million in 2018 from 7.68 million in 2013 which would in turn translate into a higher number of Malaysians being potential sufferers of cataract and vitreoretinal diseases. The current ophthalmology services market for cataract surgery, LASIK and vitreoretinal surgeries by both number of surgery conducted annually and their respective expenditure are shown in Figure 6 below. Figure 6 below also shows that cataract surgery has the greatest demand among the 3 major ophthalmology services by both the number of surgery conducted and expenditure. LASIK treatment also attracts a significant number of patients due to rising affluence and a growing awareness of such a treatment method. While the market for vitreoretinal surgery remains small because of the high price per surgery, the rising affluence among Malaysians is likely to change this trend. In general, the market demand is high for ophthalmology services especially in the private sector where the quality of services is perceived to be much better than the public sector. In 2013, expenditure on cataract surgery was SGD 57.0 million, LASIK accounted for SGD 27.0 million, while vitreoretinal surgery stood at SGD 3.9 million as shown in Figure 6(b) below.
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APPENDIX L – SINGAPORE AND MALAYSIA OPHTHALMOLOGYMARKET OVERVIEW
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Figure 5: Population above 40 years old in Malaysia from 2008 to 2018. (Source: Department of Statistics, Malaysia)
05000
10000150002000025000300003500040000
Cataract Surgery LASIK VitreoretinalSurgery
No.
of
pati
ents
/yea
r
Public
Private
(a)
0
10
20
30
40
50
60
Cataract Surgery LASIK VitreoretinalSurgery
Expe
ndit
ure/
year
(SG
D M
illio
ns)
Public
Private
(b)
Figure 6: (a) Market size by number of patients (b) Market size by expenditure for cataract surgery, LASIK and vitreoretinal surgery in 2013 in Malaysia. (Source: Ministry of Health Malaysia, Frost & Sullivan analysis) Currently, the split for the number of cataract patients is 58.3% public, 41.7% private while expenditure is 12.3% public, 87.7% private (Figure 6). For LASIK, all the number of patients and expenditure is private as the public sector does not offer LASIK procedures because it is deemed as cosmetic surgery. For vitreoretinal surgery, the number of patients split is 81.9% public, 18.1% private while the expenditure split is 18.5% public, 81.5% private (Figure 6). While public sector is leading in cataract and vitreoretinal surgery in terms of number of patients, we believe that the private sector would take the lead in the years to come. This is because it was found that Malaysians would prefer the private sector over public sector if they can afford it due to the higher treatment quality in the private sector. The public sector will still continue to grow steadily as it caters for those that are not able to afford the expensive private treatment. As shown in Figure 7(a) and (b) below, both the private market size of cataract and LASIK will grow rapidly due to the increasing awareness of such treatments and the increasing affordability of these surgeries. In Figure 7(c) below, both public and private sectors will experience growth in demand for vitreoretinal surgery. However, public sector will still receive most of the patients with vitreoretinal diseases due to its subsidized price. The growth in the private sector will be driven mainly by experienced vitreoretinal surgeons joining the private sector. The overall market size for the three services is predicted to grow at a CAGR of 9.3% from 2013 to 2018 as shown in Figure 8 below.
7.05 7.68 8.35
0369
1215
2008 2013 2018F
Mill
ions
Year
Population above 40 in MalaysiaCAGR: 1.7%
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APPENDIX L – SINGAPORE AND MALAYSIA OPHTHALMOLOGYMARKET OVERVIEW
9
0
10
20
30
40
50
60
70
80
90
100
2013 2014F 2015F 2016F 2017F 2018F
Ex
pe
nd
itu
re/
ye
ar
(SG
D M
illi
on
s)
2013 2014F 2015F 2016F 2017F 2018F 2013 2014F 2015F 2016F 2017F 2018F
Private
Public
Figure 7: Market size by revenue in public and private sectors for (a) LASIK (b) cataract surgery and (c) vitreoretinal surgery from 2013 to 2018A in Malaysia. (Source: Frost & Sullivan analysis)
0
20
40
60
80
100
120
140
160
2013 2014F 2015F 2016F 2017F 2018F
Expe
nditu
re/y
ear
(SG
D M
illio
ns)
Vitreoretinal surgery
LASIK
Cataract surgery
Figure 8: Estimated and forecast market size of ophthalmology services for 2013-2018 in Malaysia. (Source: Frost & Sullivan analysis) Despite the current market size for cataract, LASIK and vitreoretinal surgery, Malaysia’s market for these three surgeries have huge growth potential. It was found that the total addressable marketB is approximately 1.4 million for cataract surgery, 0.3 million for LASIK and 0.5 million for vitreoretinal surgery3. These numbers are far larger
A The drivers include the ageing population, increased awareness of eye disorders and the treatments available, rising income level, uptake in private insurance, growing medical tourism market and an increase in diabetic patients. B Total addressable market represents the number of people who currently need, have access to and able to afford both public and private ophthalmology services as well as opting for them. For LASIK, the number includes those who undergo LASIK for cosmetic purposes.
CAGR: 9.0% CAGR: 7.1%
CAGR: 9.6%
CAGR: 9.3%
Cataract surgery LASIK Vitreoretinal surgery
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APPENDIX L – SINGAPORE AND MALAYSIA OPHTHALMOLOGYMARKET OVERVIEW
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than the current number of surgery for cataract (61,887), LASIK (11,600) and vitreoretinal (4,582) as seen in Figure 6(a) above and represent a significant unmet demand for Malaysia.
Figure 9: Estimated and forecast market size of private ophthalmology services for 2013-2018 in Malaysia. (Source: Frost & Sullivan analysis) Figure 9 above shows that the private ophthalmology services market in Malaysia is expected to be more than SGD 127.4 million in 2018 as compared to around SGD 80.2 million in 2013, increasing at a CAGR of 9.7%.
Market drivers for private ophthalmology services
Ageing population: The number of elderly citizens (above 65 years old) is expected to reach 1.5 million by 2020 from the current amount of 1.0 million and is also coupled with a growing number of people above age 40 in Figure 5 above. This expanding elderly population in Malaysia will translate into a larger elderly patient group suffering from cataract or vitreoretinal diseases. These two eye disorders are age-related where the prevalence is much higher among the elderly.
Increased awareness: The introduction of the Malaysian Information, Communication and Multimedia Services 886 Strategy (MyICMS 886) has resulted in an increase in information technology (IT) penetration in Malaysia in recent years10. This is exemplified by the increase in number of internet users in Malaysia from 55.8 per 100 people in 2008 to 67 per 100 people in 201311. This increase in internet literacy has allowed Malaysians to seek better and more relevant information from the internet regarding eye disorders and also treatments available for various eye disorders (e.g. LASIK). This in turn increases their likelihood to seek treatment.
Rising income level: The rising affluence among Malaysians, reported by the 2012 Household Income Survey where the Malaysian household monthly income rose from SGD 1532 in 2009 to SGD 1903 in 2012, increases the accessibility of private ophthalmology services where prices are much higher than those in the public sector.
Increased uptake of private insurance: It is forecasted that the medical and personal accident insurance market would increase at a CAGR of 13.6% from 2013 to 2018 and this will serve as a driver to encourage more people to seek private medical services including ophthalmology-related medical procedures as it is subsidized by insurance3.
Growth of medical tourism market: As one of the key focus of Malaysia’s Economic Transformation Program, huge amount of funds and effort are directed towards the growth of Malaysia’s medical tourism industry. This would in turn serve to increase the number of medical tourists visiting Malaysia for medical procedures including ophthalmology. It is estimated that the revenue from medical tourism will grow at a CAGR of 26.7% from SGD 106.0 million in 2009 to SGD 894.0 million by 2018 (Figure 16).
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Rising incidence of diabetes: Currently approximately 12.0% of Malaysians are suffering from diabetes and this number is growing8. There is a higher incidence of cataracts and glaucoma in diabetic patients, and diabetic retinopathy may require laser treatment, injection of medication into the eye or surgery. This would contribute to the growth of more eye patients.
Trends
One of the current trends in the Malaysia’s private ophthalmology services market is that most of the eye centers are in the urban areas. This is due to the higher income amongst the people living in the urban areas and their preference to engage in private ophthalmology services which offer higher quality or shorter waiting time if they can afford it. People in rural areas will either seek treatment in public hospitals or travel to the major cities. Despite so, the rural area is a huge market for growth as witnessed by the rise in income in the rural areas by CAGR of 6.4% from 2009 to 201212. This represents a potential market for private ophthalmology practice to be set up in these areas. The various drivers mentioned above would also increase the demand for ophthalmology services in Malaysia. For ophthalmology human resource, there are currently 287 ophthalmologist in Malaysia or 0.01 ophthalmologist per 1000 population in Malaysia; 154 of them are in private practice while the remaining 133 in public practice13. This number is currently far lower than the worldwide average of 0.036 ophthalmologists per 1000 population and even much lower than the ratio in developed countries like United Kingdom, US and Japan14, which signifies a lack of ophthalmologists in Malaysia. In addition, many ophthalmologists in the public sector are involved in training, administration and research-related roles and therefore unable to contribute all their time in seeing patients. Given so, there is a need for more ophthalmologists in Malaysia. Regulatory environment
There is currently no specific requirement to enter the ophthalmology services market in Malaysia. However, if there is a need to setup an ambulatory care centre there are criteria that need to be met under the Private Healthcare Facilities and Services Act 2006. Barriers of entry to private ophthalmology sector
Reputation of ophthalmologist: The reputation of the ophthalmologist is vital for success in the private ophthalmology market. A more experienced and reputable ophthalmologist is likely to have an adequate number of patients in order to sustain the business.
High start-up cost: The investment cost to setup a private eye clinic is high and represents an obstacle for most ophthalmologists. The two major costs are the rental or purchase of premise to setup the clinic and the purchase of the necessary equipment to perform eye surgeries.
Strict regulations: There are many criteria to be met under the requirements of the Private Healthcare Facilities and Services Act 2006. This forms a significant barrier for those looking to setup an ambulatory care centre.
Competitive landscape
Based on the 5th report of National Eye Database Malaysia, there are 39 public and university hospital ophthalmology departments and 59 private hospitals with ophthalmology departments in 2011. In addition, there are 2 eye centre chains and 45 private eye clinics. The 39 public hospitals are often visited by patients who prefer a lower treatment cost alternative. There are a substantial number of people in Malaysia who cannot afford private healthcare and thus would prefer public healthcare. This is more significant especially in rural areas. Public hospitals provide services for various eye disorders including cataract and vitreoretinal diseases. LASIK is not offered at public hospitals as this service is considered more for cosmetic purpose rather than a basic need of an eye patient. The prices for surgery in the public hospitals are very low because of government subsidy as shown in Table 1.
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Table 1C: Prices of common eye surgeries in public and private sector (Source: Primary interviews & Malaysia Health Travel Council) Public Price Rate (SGD) Private Price Rate (SGD) Cataract Surgery (per eye) 125-250 1500-2500 LASIK (both eyes) n/a 1500-3000 Vitreoretinal Surgery (per eye) 125-250 3500-4500 In private sector, most of the hospitals with ophthalmology department offer LASIK, cataract and vitreoretinal surgical procedures. One example is Tun Hussein Onn National Eye Hospital, one of the first eye hospitals in Malaysia that is located in Selangor. It started as a not-for-profit hospital but is currently privately owned. They offer various eye services from basic eye screening to conducting complicated surgery. While its prices are not much different from other private hospitals, the waiting time is also said to be longer relative to other private hospitals. Most Kumpulan Perubatan Johor (KPJ) and Pantai hospitals also offer ophthalmology services. KPJ also has its own eye centre called Centre For Sight located in Petaling Jaya and Kuala Lumpur. ISEC is a well-known eye clinic in Malaysia which is situated in Mid Valley and also has a branch in Penang. They have experienced ophthalmologists and are known to offer high quality services to treat many different kinds of eye diseases. On the other hand, eye centre chains such as the Vista and Optimax focus mainly on cataract and LASIK surgery. Price range for private surgery can be found in Table 1. Most eye centers, including ophthalmology department in private hospitals, offer various packages to cater to the needs of eye patients. Some of the common ones include basic screening, LASIK and cataract surgery. They tend to have promotion from time to time in order to attract a higher patient load.
C Prices do not include follow-up costs
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CHAPTER 4 Singapore
Eye disorders market
In Singapore, there are a number of eye disorders that require ophthalmological services. Common disorders leading to surgery include myopia, hypermetropia, astigmatism, cataract, diabetic retinopathy, retinal detachment, AMD and macular holes. The prevalence of these disorders varies according to genetics and environmental conditions. For example, the prevalence of myopia has been found to vary across different ethnic groups in Singapore. The prevalence for Chinese individuals was 40.1%, followed by Indian individuals at 34.1% and Malay individuals at 22.1%4. The prevalence for hyperopia and astigmatism in Singapore adults aged above 40 years old stands at 31.5% and 58.8% respectively15. While hypermetropia is more prevalent in older individuals, there has been an increasing trend of myopia and astigmatism in the younger population, with teenagers between the ages of 15 to 19 showing a 73.9% prevalence for myopia and 58.7% prevalence for astigmatism, far higher than the prevalence in the older age groups16. Additionally, childhood myopia is also very common amongst Singaporean school children, affecting 30.0% of children in primary one and 65.0% of children in primary six. For dry eyes, it was found that 1 in 2 Singaporean suffers from dry eyes17 and 5.6% of Singaporeans above 40 suffer from AMD18. For dry eyes and childhood myopia, there are often follow-up consultations.
Figure 10: Population above 40 years old in Singapore from 2008 to 2018. (Source: Department of Statistics, Singapore)
Figure 10 above shows that the population above 40 is expected to reach 3.06 million in 2018. This is likely to result in more eye patients. Cataracts are generally more common as one gets older, 63.6% of individuals between 60-64 and 94.6% of individuals above 75 suffers from cataract19. The prevalence for glaucoma is found to be 4.6% for population above 40 years old15. Vitreoretinal diseases also tend to affect older individuals. In Singapore, the prevalence of diabetes is equivalent to 11.3% of the total population20. Of these individuals, it was found that more than one fifth, or 2.5% of individuals in Singapore, suffers from diabetic retinopathy19. Two other vitreoretinal diseases, retinal detachment and macular holes, are less common, but nevertheless affect about 0.8% and 0.2% of Singaporeans respectively21. Ophthalmology services market
Similar to Malaysia, cataract, LASIK and vitreoretinal surgeries are the most common ophthalmology surgeries in Singapore’s ophthalmology services market. The current ophthalmology services market for cataract, LASIK and vitreoretinal surgeries is shown in Figure 11 below. Cataract surgery has the highest demand among the 3 major ophthalmology services by both the number of surgery conducted and the expenditure largely due to Singapore’s ageing population. Vitreoretinal surgery contributes more than LASIK in terms of the total expenditure for both public and private but there are more LASIK treatments conducted in both public and private as compared to vitreoretinal surgery. The demand for the three services remains strong with a growing ageing population and also due to the increasing awareness of eye disorders amongst the population. In 2013, expenditure for cataract surgery was SGD 55.1 million, LASIK stood at SGD 17.8 million and vitreoretinal surgery was SGD 21.3 million as shown in Figure 11(b) below.
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Figure 11: (a) Market size by number of patients (b) Market size by expenditure for cataract surgery, LASIK and vitreoretinal Surgery in Singapore (2013). (Source: Ministry of Health, Singapore, Frost & Sullivan analysis) The current split for number of cataract patients is 54.2% public, 45.8% private while expenditure is 44.1% public, 55.9% private (Figure 11). For LASIK, the split for number of patients is 22.7% public, 77.3% private while expenditure is 21.1% public, 78.9% private (Figure 11). For vitreoretinal surgery, the split for number of patients is 94.0% public, 6.0% private while expenditure is 88.8% public and 11.2% private (Figure 11). Given the rising medical tourists entering Singapore and increasing private health insurance holder in Singapore, it is likely that we will continue to observe strong performance in the private sector in the years to come. As mentioned, the private sector for cataract surgery would grow due to the increasing medical tourists who require cataract surgery (Figure 12a). Increasing private insurance holders would also play a role in contributing to the growth. The LASIK surgery market will experience continuous growth (Figure 12b). The LASIK surgery market in private sector will grow faster than the public sector as patients tend to prefer the private sector due to comparable prices between both sectors but shorter waiting time in the private sector. Public sector will continue to grow more rapidly than the private sector for vitreoretinal surgery market because of more experienced surgeons and also much lower price charged in the public sector (Figure 12c). Overall, the total market size for the three services will continue to grow at a CAGR of 6.2% from 2013 to 2018 (Figure 13).
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Figure 12: Market size by revenue in public and private sectors for (a) cataract surgery (b) LASIK and (c) vitreoretinal surgery from 2013 to 2018D in Singapore. (Source: Ministry of Health, Singapore, Frost & Sullivan analysis)
D The drivers include the ageing population, increased awareness of eye disorders and the treatments available, rising income level, increase in the uptake of private insurance as well as growing medical tourism market.
CAGR: 6.3%
CAGR: 7.1%
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Figure 13: Estimated and forecast market size of ophthalmology services for 2013-2018 in Singapore. (Source: Health Medical Advisory, Frost & Sullivan analysis)
Similarly for Singapore’s cataract, LASIK and vitreoretinal surgery market, these markets have growth potential as well. It was found that for cataract surgery, the total addressable marketE is approximately 0.5 million for cataract surgery, 115,000 for LASIK and 100,000 for vitreoretinal surgery3. These numbers are far larger than the current number of surgery for cataract (14,940), LASIK (5,160) and vitreoretinal (2,871) as seen in Figure 11(a), which represents a huge market growth potential for Singapore.
Figure 14: Estimated and forecast market size of private ophthalmology services for 2013-2018 in Singapore. (Source: Health Medical Advisory, Frost & Sullivan analysis)
E Total addressable market represents the number of people who currently need, have access to and able to afford both public and private ophthalmology services as well as opting for them. For LASIK, the number includes those who undergo LASIK for cosmetic purposes.
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CAGR: 6.2%
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Figure 14 above shows that the private ophthalmology services market in Singapore is expected to be over SGD 69.0 million in 2018 as compared to around SGD 47.1 million in 2013, increasing at a CAGR of 7.9%.
Market drivers for private ophthalmology services
Ageing population: The number of elderly citizens (above 65 years old) is expected to triple to 900,000 by 2030 and is also coupled with a growing number of people above age 40 (Figure 10, above). This expanding elderly population in Singapore will translate into a larger elderly patient group suffering from cataract or vitreoretinal diseases. These two eye disorders are age-related where the prevalence is much higher amongst the elderly.
Increased awareness: With the increase in internet penetration over the years as witnessed by the increase in number of internet users from 69 per 100 people in 2008 to 73 per 100 people in 201311, a greater proportion of Singaporean is likely to gain awareness of eye diseases and treatments available for various eye diseases (e.g. LASIK) online. This would result in an increase in the demand for ophthalmology services.
Rising income level: The rising affluence among Singaporeans, where an increase in the median monthly household income from work (SGD 7570 in 2012 to SGD 7870 in 2013), increases the affordability of private ophthalmology services.
Increase in uptake of private insurance: It is forecasted that the annual premium growth in Singapore between 2013 and 2020 is 11.8% and this would serve as a driver to encourage people to seek ophthalmology-related medical procedures as well3.
Growth in medical tourism: Ophthalmology currently is the second most popular medical procedure amongst medical tourists coming to Singapore. It is expected that the medical tourists coming to Singapore will increase from 604,000 in 2013 to more than 1 million in 2018 (Figure 18). This increase represents a key driver pushing Singapore’s ophthalmology market.
Trends
Demand for ophthalmology services in Singapore is currently growing due to a larger and ageing population. Yet on the ophthalmologist front, Singapore is experiencing a shortage. Currently, there are a total of 193 ophthalmologists or 0.04 ophthalmologists per 1000 population in which 65.3% of ophthalmologists are in the public sector while the remaining 34.7% is in the private sector20. While Singapore has a higher ophthalmologist: population ratio than the worldwide average of 0.036 per 1000, Singapore’s ratio is still lower than other modernized nations such as US (0.08 per 1000), UK (0.052 per 1000) and Japan (0.11 per 1000)14. Also, many senior ophthalmologists especially those in public sector are involved in education and research roles and thus there is an overall shortage of experienced ophthalmologists in Singapore. While the demand for public ophthalmology service is high, it is predicted that there will be more public sector ophthalmologists moving to the private sector. One key reason attracting ophthalmologists to the private sector is the ability to control the number of patients they see and consequently, greater control over one’s workload. On the demand side, the increasing number of patients is causing it to be increasingly difficult for the public sector to cope with the demand and thus driving patients into the private sector which typically has shorter waiting period and receives more personalized care and treatment. This in turn increases the growth of the private ophthalmology market and also encourages the shift of ophthalmologists from the public to private sector3. Regulatory environment
There is no specific regulation for a private medical group or individual to provide ophthalmology services in Singapore. The major criterion which is applicable to the private eye clinic market is that the ophthalmologists need to be on the Singapore’s Specialists Accreditation Board for a minimum of 3 years in order to be qualified to have their own clinic.
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Barriers of entry to private ophthalmology sector
High start-up cost: For a single ophthalmologist to setup his own clinic, a high start-up cost is required (e.g. rental, equipment for treatment, manpower). This makes it prohibitive for ophthalmologist in many cases. Reputation of ophthalmologist: The reputation of the ophthalmologist is vital for success in the private ophthalmology market. Therefore, for an ophthalmologist wanting to enter the private sector, it is advised that one stays in the public sector to build up his/her reputation or enter into collaboration with a reputable ophthalmologist.
Competitive landscape
Singapore’s public ophthalmology sector consists of 1 national eye centre and 7 public hospital departments whereas there are 57 private ophthalmology specialist clinics, including clinics within private hospitals under various healthcare groups such as the Parkway Eye Centre in Gleneagles Hospital. Singapore National Eye Centre (SNEC) is the major eye care institute within the public sector which receives the majority of the eye patients in Singapore. Other public hospitals that also provide ophthalmology services include Tan Tock Seng Hospital and National University Hospital. Most of the institutions in the public sector provide services such as cataract surgery, LASIK and vitreoretinal surgery. For pricing as seen in Table 2, private patients need to pay the full-fee whereas the patients who are eligible for Medisave subsidy will only pay the subsidized fees which are typically 30-50% of the full-fee. Table 2F: Prices for common eye surgeries in the public and private healthcare centres (Source: Primary interviews and MOH, Singapore) Public Price Rate (SGD) Private Price Rate (SGD) Cataract Surgery (per eye) 2500-4000 3000-6000 LASIK (for both eyes) 2500-4000 2500-4500 Vitreoretinal Surgery (per eye) 6000-7500 12500-15000 The public sector is primarily catered to the need of the patients (mostly elderly) who require treatments but cannot afford to pay the fee charged in the private sector. The public healthcare system in Singapore allows eye patients who are referred from primary healthcare practitioners to be subsidized regardless of their social or financial status. Thus, the public sector has a very high patient load as compared to the private sector. This has resulted in a long waiting time within the public sector and patients would prefer private treatment if they can afford it. In addition, complicated eye disorders will still be referred to the public sector and SNEC is also the referral centre for eye disorders in this region. In the private sector, there are two main types of private clinic: those which are privately owned by the ophthalmologists themselves and by a team of ophthalmologists as well as those that is part of a private hospital or private medical centre where experienced ophthalmologists are offered a space to setup their clinic within the institutions.
F Prices do not include follow-up costs
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CHAPTER 5 Medical Tourism
Malaysia
The ETP outlined by the Malaysian government has identified the healthcare sector as a focus area to transform Malaysia into a higher income economy. This target is expected to be achieved through various entry point projects under the ETP such as the implementation of marketing plans and collaborations with private healthcare services providers, foreign governments and insurance agencies in order to attract more medical travelers from countries such as Vietnam, Cambodia, Bangladesh, Canada, Brunei and countries of the Middle East. Currently, most medical tourists come to Malaysia for procedures such as heart bypass, angioplasty, hip replacement, hysterectomy, knee replacement and spinal fusion. Figure 15 below shows that Malaysia attracts most of its medical travelers from Indonesia due to the close proximity between the two countries and its affordable treatment prices. It is observed that patients from areas such as Sumatra tend to seek treatment in Penang or Melaka. On a separate note, an increasing number of Singapore medical tourists are visiting Malaysia due to the lower treatment costs in Malaysia and also because Singaporeans can use their national insurance fund (Medisave) for day surgery or in-hospital admissions at selected hospitals in Malaysia via appointed referral centresG. As of March 2012, there were 13 hospitals in Malaysia registered under this scheme.
Figure 15: Origin of the medical tourists in Malaysia for 2011. (Source: World Health Summit)
Key drivers of Malaysia’s medical tourism market include the ease of travel by various transportation methods (air and sea), affordable healthcare costs, the availability of high quality treatment and advanced medical infrastructure. Market growth of medical tourism in Malaysia is on an upward trend. In 2009, medical tourism in Malaysia generated approximately SGD 106.0 million in revenues and is predicted to generate more than SGD 894.0 million by 2018 with a CAGR of 26.7%, as shown in Figure 16 below. As of 2011, hospitals in Penang received the highest share of medical travel revenue at 49.0%, followed by hospitals within the Klang Valley at 21.0% and Melaka at 10.0%22. There are also several upcoming medical travel hubs in Malaysia such as the Medini Health Hub in the Iskandar Development Region and Kota Kinabalu, Sabah, which will further boost the medical tourism in Malaysia.
G Patients must be referred by the appointed referral centres (Balestier Clinic and Parkway East Hospital) recognised by the government of Singapore prior to travelling to Malaysia for treatment.
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Figure 16: Market size of medical tourism from 2009 to 2018 in Malaysia. (Source: Malaysian Healthcare Tourism Council, Frost & Sullivan analysis) Note: The number of travellers and revenues pertain to the actual medical travellers and the amount spent by the medical travellers on hospital treatment only. It does not include co-traveller(s) and incidental tourism related expenses. In order to promote medical tourism, international accreditation like Joint Commission International (JCI) is likely to become the prerequisite for healthcare services providers to gain the trust of patients in the quality of care. Currently, there are 10 JCI accredited hospitals and 2 JCI accredited ambulatory eye centres in Malaysia. ISEC is one out of the two eye centres with JCI accreditation.
336 393 583 660 753
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Singapore
Singapore is one of the most favored medical tourism destinations in Southeast Asia for complex treatments in the field of oncology, ophthalmology, organ transplants and neurological surgery. Currently, 26.0% of the medical tourists entering Singapore are seeking ophthalmology related medical procedures3. The high quality of its healthcare services has always been a driver for the country in attracting foreign patients. Figure 17 below shows that the main medical tourists entering Singapore in 2011 were from Indonesia (47.2%) and Malaysia (11.5%). Singapore’s strong policies and regulatory frameworks, which are recognized internationally, coupled with active governance by Singapore government, are the major factors that position Singapore as a destination of choice for medical travelers who put a strong focus on the quality of services.
Figure 17: Origin of the medical tourists in Singapore for 2011. (Source: International Medical Travel Journal)
In 2009, the global financial crisis led to a lower number of medical travelers and a fall in medical travel revenues from previous years. However, the industry recovered in 2010 and revenue increased to SGD 785.0 million which represented a growth of 10.1% over 2009 as seen in Figure 18 below. Figure 18 below also shows that the number of medical travelers to Singapore and the revenue from medical tourism are expected to grow at CAGRs of 13.0% and 13.6% respectively from 2009 to 2018. This is attributed to Singapore having established itself as a centre of referral for complex procedures. Besides that, the presence of highly qualified and specialized transplant surgeons and strong healthcare support infrastructure are also keys to its strong growth.
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Figure 18: Market size of medical tourism from 2009 to 2018 in Singapore. (Source: International Medical Travel Journal, Frost & Sullivan analysis) Note: The above numbers of medical travellers represent approximately 60.0% of the total medical travellers (patient and the accompanying family) that visited Singapore. The number of travellers and revenues pertain to the actual medical travellers and the amount spent by the medical traveller on hospital treatment only. It does not include co-traveller(s) and incidental tourism related expenses. The Singapore government supports medical tourism by encouraging the country’s hospitals to obtain international accreditations such as the JCI or International Organization for Standardization (ISO). One of the key factors that attract and strongly influence the decision of international patients to visit Singapore hospitals is the international accreditations that stand testimony to the quality of its healthcare delivery. For instance, as at 2011, 14 hospitals are JCI accredited (it has one of the highest percentages of JCI hospitals over total hospitals) and 11 hospitals are ISO certified. In addition, some hospitals in Singapore have set up overseas marketing and patient referral networks to expand their market coverage. The networks include marketing agent tie-ups, doctor (referral) networks, government and corporate payer networks. Private hospitals such as Mount Elizabeth Hospital, Gleneagles Hospital and Raffles Hospital are some of the key healthcare services providers that contribute greatly to the Singapore’s medical tourism industry.
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CHAPTER 6 Summary
1. Malaysia and Singapore present a strong outlook in the ophthalmology market front in the near future. The overall market size for cataract surgery, LASIK and vitreoretinal surgery in Malaysia is estimated at SGD 87.9 million in 2013, and expected to grow at a CAGR of 9.3% to reach SGD 137.2 million in 2018. For Singapore, this is expected to increase from SGD 94.1 million in 2013 to SGD 127.0 million in 2018 at a CAGR of 6.2%. The five key drivers are an ageing population, increased awareness of eye-related diseases, rising affluence, increase in private insurance holders and growth in medical tourism contributing to the growth of the ophthalmology services market in both Malaysia and Singapore.
2. Cataract surgery, LASIK and vitreoretinal surgery are the few common and popular ophthalmology services in both Malaysia and Singapore and are expected to experience continuous growth in the years to come. The cataract surgery market is forecasted to experience a CAGR of 9.6% in Malaysia and 7.1% in Singapore from 2013 to 2018, LASIK surgery market is expected to grow at a CAGR of 9.0% in Malaysia and 6.3% in Singapore while the vitreoretinal surgery market is expected to grow at 7.1% in Malaysia and 4.0% in Singapore from 2013 to 2018 (Figures 7 and 12).
3. Despite the lower cost in the public sector, Malaysians and Singaporeans prefer the private healthcare sector. This is largely attributed to the higher quality and personalized service provided by private healthcare service providers as well as shorter waiting time. There is also a significant unmet demand for quality ophthalmology services in both countries that the private ophthalmology services provider can tap on.
4. With the continuous growth in the ophthalmology services market as well as medical tourism in Malaysia and Singapore, there will be a demand for private healthcare service providers to tap on.
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GLOSSARY A
Age-related Macular Degeneration (AMD): Refers to a medical condition amongst older adults in which there is a loss of vision in the center of the visual field (the macula) as a result of damage to the retina.
Angioplasty: A technique of widening narrowing or obstructed arteries.
Astigmatism: Refers to an optical defect in which the vision is blurred due to the inability of the optics of the eye to focus a point object into a sharp focused image on the retina.
C
Cardiovascular: Refers to the organ system that cause blood to circulate and transport nutrients to other parts of the body.
Cataract: Refers to the clouding of the lens inside the eye which reduces one’s vision.
Cataract Surgery: Removal of the natural lens of the eyes that has been plagued by cataract.
D
Diabetic Retinopathy: Refers to damage to the retina as a result of complications of diabetes, which can eventually lead to blindness.
E
Economic Transformation Programme (ETP): An initiative by the Malaysian government to transform Malaysia into a high income economy by the year 2020.
G
Glaucoma: Refers to a condition that causes damage to the eye’s optic nerve and worsen over time.
H
Heart Bypass: Refers to the replacement of damaged arteries in the heart with blood vessels from another area of your body.
Hematopoietic Stem Cell: Blood cells that has the potential to give rise to all the other blood cells needed by the body.
Hematopoietic Stem Cell Transplantation: Transplantation of multipotent hematopoietic stem cell that is obtained usually from the bone marrow, peripheral blood or umbilical cord blood.
Hypermetropia: Refers to the condition of the eye in which there is difficulty focusing on near objects, most commonly known as farsightedness.
Hysterectomy: Refers to the surgical removal of the uterus. It may also involve the removal of the cervix, ovaries, fallopian tubes and other surrounding structures.
I
International Organization for Standardization (ISO): Refers to an international standard setting body comprising of representatives of various national standards organizations.
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APPENDIX L – SINGAPORE AND MALAYSIA OPHTHALMOLOGYMARKET OVERVIEW
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J
Joint Commission International (JCI): A branch of the Joint Commission that aims to improve the quality of patient care by assisting international health care organization, public health agencies and health ministries to evaluate, improve and demonstrate the quality of patient care and enhance patient safety.
L
LASIK (Laser-Assisted in situ Keratomileusis): Refers to a type of refractive surgery to correct myopia, hypermetropia and astigmatism.
M
Macular Hole: Refers to a small break in the macula; a region in the center of the retina.
Myopia: Refers to the condition of the eye in which light that comes into the eye does not directly focus on the retina but infront of it, causing the image that one sees when looking at a distant object to be out of focus. Most commonly known as shortsightedness.
N
National Key Economic Area: Refers to the area that would be focused in as part of the Malaysian government’s Economic Transformation Programme.
O
Ophthalmology: A branch of medical specialization that deals with the anatomy, physiology and diseases of the eyes.
R
Refractive Error: Refers to an error in the focusing of light by the eye, which includes myopia, hypermetropia and astigmatism.
Retinal Detachment: Refers to a disorder of the eye in which the retina peels away from its underlying layer of support tissue.
S
Spinal Fusion: Refers to a surgical technique used to join two or more vertebrae (the individual bones on the backbone).
V
Vitreoretinal Surgery: Refers to the treatment of disorder related to the retina, vitreous and macula.
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APPENDIX L – SINGAPORE AND MALAYSIA OPHTHALMOLOGYMARKET OVERVIEW
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BIBLIOGRAPHY
1. International Monetary Fund
2. Trading Economics
3. Frost & Sullivan analysis
4. World Bank
5. British Journal of Ophthalmology
6. Malaysian Family Physician
7. Medical Journal of Malaysia
8. University of Malaya Medical Center
9. Trade Press
10. Malaysian Communication and Multimedia Commission
11. World Development Indicators
12. Department of Statistics Malaysia
13. National Specialist Register Database Malaysia
14. International Council of Ophthalmology
15. Investigative Ophthalmology and Visual Science
16. National University of Singapore
17. Singapore National Eye Center
18. American Academy of Ophthalmology
19. National University Hospital
20. Ministry of Health Singapore
21. American Journal of Ophthalmology
22. Malaysian Healthcare Tourism Council
ABBREVIATIONS
AMD Age-Related Macular Degeneration ASEAN Association of South East Asian Nations CAGR Compounded Annual Growth Rate ETP Economic Transformation Programme GDP Gross Domestic Product GNI Gross National Income ISEC International Specialist Eye Center ISO International Organization for Standardization JCI Joint Commission International KPJ Kumpulan Perubatan Johor LASIK Laser-Assisted in situ Keratomileusis NKEA National Key Economic Areas SNEC Singapore National Eye Center
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Placement in respect of 70,000,000 Placement Shares at S$0.28 for each Placement Share, payable in full on application
Placement AgentIssue Manager and Sponsor
MAYBANK KIM ENG SECURITIES PTE. LTD.(Company Registration No.: 197201256N)(Incorporated in the Republic of Singapore)
PRIMEPARTNERS CORPORATE FINANCE PTE. LTD.(Company Registration No.: 200207389D)(Incorporated in the Republic of Singapore)
CORPORATE PROFILE We are a comprehensive medical eye care service provider with ambulatory surgical centres in Malaysia and Singapore. Our team of doctors are specialised in the fields of cataract and refractive surgery (including LASIK), vitreoretinal diseases, corneal and external eye diseases, glaucoma, uveitis, oculoplastics, facial cosmetics and aesthetics surgery,
adult strabismus and paediatric ophthalmology.
Many of our specialist doctors are key opinion leaders in their respective subspecialty fields.
Our vision is to provide high quality, compassionate, world-class eye care at an affordable level to the local and regional community. Using state-of-the-art technology and facilities, our specialist doctors provide patients with excellent
medical eye care services.
HEALTHCARE
ISEC HEALTHCARE LTD.(Company Registration No.: 201400185H)
(Incorporated in the Republic of Singapore on 2 January 2014)
Restoring
Vision Enriching
Lives
OFFER DOCUMENT DATED 14 OCTOBER 2014
(Registered by the Singapore Exchange Securities Trading Limited, acting as agent on behalf of the Monetary Authority of Singapore (the “Authority”) on 14 October 2014)
This document is important. If you are in any doubt as to the action you should take, you should consult your legal, financial, tax or other professional adviser(s).
PrimePartners Corporate Finance Pte. Ltd. (“PPCF” or the “Issue Manager and Sponsor”) has on behalf of ISEC Healthcare Ltd. (the “Company”) made an application to the Singapore Exchange Securities Trading Limited (the “SGX-ST”) for permission to deal in, and for quotation of, all the ordinary shares (the “Shares”) in the capital of the Company already issued, the new Shares (the “Placement Shares”) which are the subject of the Placement (as defined herein) and the new Shares which may be issued upon the exercise of the options to be granted under the ISEC Healthcare Share Option Scheme (the “Option Shares”), on Catalist (as defined herein).
Acceptance of applications will be conditional upon, inter alia, the issue of the Placement Shares, permission being granted by the SGX-ST for the listing and quotation of all our existing Shares, the Placement Shares and the Option Shares on Catalist. Monies paid in respect of any application accepted will be returned to you at your own risk, without interest or any share of revenue or other benefit arising therefrom and you will not have any claim against us, the Issue Manager and Sponsor and/or the Placement Agent (as defined herein) if the admission and listing do not proceed. The dealing in and quotation of the Shares will be in Singapore Dollars.
Companies listed on Catalist may carry higher investment risk when compared with larger or more established companies listed on the Main Board of the SGX-ST. In particular, companies may list on Catalist without a track record of profitability and there is no assurance that there will be a liquid market in the shares or
units of shares traded on Catalist. You should be aware of the risks of investing in such companies and should make the decision to invest only after careful consideration and, if appropriate, consultation with your professional adviser(s).
This offer of Placement Shares is made in or accompanied by an offer document that has been registered by the SGX-ST, acting as agent on behalf of the Authority.
A copy of this Offer Document has been lodged with and registered by the SGX-ST, acting as agent on behalf of the Authority. Neither the Authority nor the SGX-ST has examined or approved the contents of this Offer Document. Neither the Authority nor the SGX-ST assumes any responsibility for the contents of this Offer Document, including the correctness of any of the statements or opinions made or reports contained in this Offer Document. The SGX-ST does not normally review the application for admission but relies on the Issue Manager and Sponsor confirming that our Company is suitable to be listed and complies with the Catalist Rules (as defined herein). Neither the Authority nor the SGX-ST has in any way considered the merits of the Shares or units of Shares, being offered for investment. The registration of this Offer Document by the SGX-ST does not imply that the Securities and Futures Act (Chapter 289) of Singapore, or any other legal or regulatory requirements, or requirements under the SGX-ST’s listing rules, have been complied with.
Investing in our Shares involves risks which are described in the section entitled “RISK FACTORS” of this Offer Document.
After the expiration of six (6) months from the date of registration of this Offer Document, no person shall make an offer of our Shares, or allot, issue or sell any of our Shares, on the basis of this Offer Document; and no officer or equivalent person or promoter of our Company will authorise or permit the offer of any of our Shares or the allotment, issue or sale of any of our Shares, on the basis of this Offer Document.
HEALTHCARE
ISEC HEALTHCARE LTD.(Company Registration No.: 201400185H)
(Incorporated in the Republic of Singapore on 2 January 2014)
101 Thomson Road#09-04 United Square
Singapore 307591www.isechealthcare.com
ISE
C H
EA
LT
HC
AR
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TD
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OUR BUSINESS
MALAYSIA SINGAPORE
ISEC KL ISEC SINGAPORE
• Established in 2007
• 12 full-time ophthalmologists; 2 visiting ophthalmologists
• 15 consultation rooms, 5 laser suites, 4 operating theatres, executive suites and full general anaesthetic services
• Joint Commission International (JCI) accredited eye care centre
• FY2013: Over 5,000 major surgeries performed, over 70,000 patients served
• Opened in August 2014 at Mount Elizabeth Novena Specialist Centre
• 3 full-time ophthalmologists
• State-of-the-art ophthalmology equipment such as Alcon’s latest Wavelight Refractive Suite, Zeiss’ latest Cataract Suite and an oculoplastics and facial aesthetics surgery suite
ISEC PENANG LEE HUNG MING EYE CENTRE
• Opened in February 2014
• 3 full-time ophthalmologists
• 4 clinic consultation rooms, 2 optometry rooms, 2 operating theatres, 2 treatment rooms and various facilities for visual field testing, laser and electrocardiography
• Established in 2007 at Gleneagles Hospital, Singapore
• Where ISEC Eye provides its services and helmed by specialist medical ophthalmologist, Dr Lee Hung Ming
• State-of-the-art technology and facilities
HEA
LTHCA
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