awards and accolades received - listed …katrinagroup.listedcompany.com/misc/offer-document.pdf•...

(Company Registration Number: 201608344N) (Incorporated in the Republic of Singapore on 31 March 2016)

1 Sims Lane #05-05 Singapore 387355

• ION Orchard, Orchard• JEM, Jurong East

• Clarke Quay

• Clarke Quay

• Clarke Quay• Plaza Singapura, Orchard

• Clarke Quay

• 112 Katong, East Coast Road• Causeway Point, Woodlands• IMM Building, Jurong East• NEX, Serangoon• Resorts World Sentosa, Sentosa Gateway• Suntec City Mall, Temasek Boulevard• West Mall, Bukit Batok• The Seletar Mall, Sengkang• Waterway Point, Punggol• Gemdale Plaza, Chaoyang District,

Beijing, China• Raffles City, Dongcheng District,

Beijing, China

• IMM Building, Jurong East• NEX, Serangoon• Bukit Panjang Plaza, Bukit Panjang• City Square Mall, Kitchener Road• E!Hub Downtown East, Pasir Ris• One KM, Tanjong Katong Road• Resorts World Sentosa (Asian Cafe), Sentosa Gateway

• Bugis Junction, Victoria Street• NEX, Serangoon

• Novena Square, Thomson Road• Parkway Parade, Marine Parade Road• JEM, Jurong East• NEX, Serangoon• Paragon, Orchard• Tampines Mall, Tampines• Waterway Point, Punggol

AN ESTABLISHED AND RECOGNISED F&B GROUP WITH MULTI-CUISINE CONCEPTS

Northern Chinese cuisine• 1 restaurant in Singapore

Mexican cuisine• 2 restaurants in Singapore

Authentic Balinese favourites• 1 restaurant in Singapore

Traditional Thai cuisine• 1 restaurant in Singapore

CORPORATE PROFILE

OUR CUISINESKA

TRIN

A G

RO

UP

LTD.

KATRINA GROUP LTD. (Incorporated in the Republic of Singapore on 31 March 2016)

(Company Registration Number: 201608344N)

Sponsor, Issue Manager and Placement Agent

Placement of 35,800,000 New Shares at S$0.21 for each Share,

payable in full on application.

HONG LEONG FINANCE LIMITED(Incorporated in the Republic of Singapore)

(Company Registration Number: 196100003D)

OFFER DOCUMENT DATED 15 JULY 2016(Registered by the Singapore Exchange Securities Trading Limited

acting as agent on behalf of the Monetary Authority of Singapore on 15 July 2016)

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).

Hong Leong Finance Limited (the “Sponsor and Issue Manager”) has 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 and the new Shares (the “New Shares”) which are the subject of the Placement (as defined herein) on Catalist. 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 SGX-ST Mainboard. 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 Placement is made in or accompanied by this Offer Document that has been registered by the SGX-ST acting as agent on behalf of the Monetary Authority of Singapore (the “Authority”). We have not lodged or registered this Offer Document in any other jurisdiction.

Neither the Authority nor the SGX-ST has examined or approved the contents of this Offer Document. Neither the Authority nor the SGX-ST assumes any responsibility for the contents of this Offer Document, including the correctness of any of the statements or opinions made or reports

contained in this Offer Document. The SGX-ST does not normally review the application for admission but relies on the Sponsor and Issue Manager confirming that the Company is suitable to be listed on Catalist and complies with the rules of the SGX-ST Listing Manual (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.

Acceptance of applications will be conditional upon the issue of the New Shares and the listing and quotation of all our existing issued Shares and the New Shares on Catalist. If the admission and listing do not proceed, 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 claims against us, the Sponsor, Issue Manager and the Placement Agent (as defined herein).

After the expiration of six months from the date of registration of this Offer Document, no person shall make an offer of securities, or allot, issue or sell any securities, on the basis of this Offer Document; and no officer or equivalent person or promoter of the Company will authorise or permit the offer of any securities or the allotment, issue or sale of any securities, on the basis of this Offer Document.

Investing in the Shares involves risks which are described in the “RISK FACTORS” section of this Offer Document.

We own and operate:• 32 restaurants in Singapore• 2 restaurants in the PRC• 9 proprietary F&B brands• 4 Halal-certified brands

Each brand serves authentic cuisines of different ethnicity:• Indonesian • Yunnan• Thai • Northern Chinese• Hong Kong • Mexican • Vietnamese

restaurants inSINGAPORE

32 2restaurantsin the PRC

Casual Dining (Generally located in the heartlands)

Contemporary Upmarket (Located within the central business district vicinity)

Contemporary Hong Kong cuisine • 7 cafes in Singapore

Authentic Indonesian cuisine• 2 cafes in Singapore

Specialties from Yunnan• 2 restaurants in Singapore

Popular Vietnamese street food • 7 cafes in Singapore

Indonesian and Thai cuisine• 9 restaurants in Singapore and 2 in Beijing, PRC

CAGR: Compounded Annual Growth Rate FY: Financial year ended 31 December

1 Adjusted gross profit margin refers to (revenue – cost of beverage and food ingredients) / revenue


Revenue and adjusted gross profit margin1 (Audited)

Profit before tax and profit before tax margin (Audited)

S$’000

S$’000

79.2%

10.7%

FY2013 FY2014 FY2015

79.1%

9.2%

79.6%

9.8%

52,443

5,116

45,410

4,169

40,700

4,338

Revenue Adjusted gross profit margin

Profit before tax Profit before tax margin

CAGR: 13.5%

CAGR: 8.6%

COMPETITIVE STRENGTHS:

Proprietary brands with different F&B concepts catering to wide market segment• Appeal to a wide range of customers with varying

degrees of spending power• Potentially better locations at preferential rental

terms, with clustering of different brand restaurants in same shopping mall

4 Halal-certified brands allow access to larger market• Growing demand for Singapore Halal-certified

products and services from overseas• High barriers of entry in attaining Halal certification

due to stringent food safety requirements and standards

Dedicated key management personnel and staff with extensive local F&B experience• Led by Executive Chairman and Executive Director,

each with more than 20 years of F&B experience• Supported by dedicated, loyal and experienced

staff, with most, including chefs, having been with the Group for more than 10 years

Established reputation in our marketplace• In operations since 1995• Growth over past 2 decades despite difficult F&B

industry environments in the past

Good relationships with suppliers and landlords• Able to negotiate prices of food ingredients and

reduce risks of late or non-delivery of supplies• Enable retention of strategic locations where

restaurants have been operating

PROSPECTS

Increase in popularity of food delivery services• Trend of busy consumers who are more willing to pay

for convenience1 • Reduces overheads and rental costs for physical

dining spaces• Huge potential within Singapore with the growth of

online shopping

Affluence growth and increase of households dining out in Singapore• Rising hectic lifestyle and increase in consumer

affluence• Increasing trend of average monthly house

expenditure on food2 and median monthly household income3

• Change in dining preference with customers looking towards mid-range restaurants4

Completion of new retail and F&B spaces and refurbishment of older shopping complexes• Possibility of opening new establishments or

expanding existing operations into new retail locations

Regional growth opportunities• Large domestic markets and growing middle income

group in the ASEAN region• Overseas expansion plans in Malaysia, Vietnam and

Indonesia• Halal certification enables us to cater to Muslim

patrons within the ASEAN region

STRATEGIES AND FUTURE PLANS

Launch of online food ordering and delivery system• Extends reach to a wider spectrum of customers and

increases efficiency of delivery process• Plan to expand services to all 9 F&B brands in 2016

from 3 currently

Grow restaurants for 3 “Halal” certified brands • Intensify expansion of Bali Thai, So Pho and Streats

brands in Singapore, Malaysia and Indonesia• Capitalise on potential demand for “Halal” certified

Asian food other than Malay cuisine

Geographical expansion into new regional markets• Plan to open and operate at least 2 restaurants in

Kuala Lumpur, Malaysia in the next 12 months under the So Pho and Streats brands

• Identified Malaysia, Vietnam and Indonesia as potential markets for expansion

Expansion through strategic alliances, acquisitions and joint ventures• Through such strategies, look to strengthen market

position, expand operations and expand into new complementary businesses

FINANCIAL HIGHLIGHTS

PROPOSED DIVIDENDSIntends to distribute dividends of not less than 60.0% of net profits

attributable to Shareholders in respect of FY2016

AWARDS AND ACCOLADES RECEIVED

THRIVING AND GROWING BUSINESS

1 Information extracted from a news article entitled “More players jumping on the food delivery wagon” published in The Straits Times found at http://www.straitstimes.com/tech/games-apps/more-players-jumping-on-the-food-delivery-wagon

2 Information extracted from RHB Research Report entitled “Confessions of a Shopaholic” dated 6 August 2015 found at http://research.rhbinvest.com.sg:9898/UploadPDF/SG_Consumer%20Sector%20-%20Great%20Singapore%20Sale_Sector%20Update_20150806_RHB.pdf

3 Information extracted from a news article entitled “Median monthly household income from work in 2015 up 4.9% on year in Singapore” found at http://www.businesstimes.com.sg/government-economy/median-monthly-household-income-from-work-in-2015-up-49-on-year-in-singapore

4 Information extracted from a report entitled “Food Forward Trends Report 2014 – Singapore” published by Weber Shandwick found at http://webershandwick.asia/wp-content/uploads/2014/04/FF-SINGAPORE-16April.pdf

FY2013 FY2014 FY2015

Enterprise 50 AwardBrand awarded:

2012 Katrina Holdings Pte Ltd


Awarded by Enterprise 50 Association

Singapore’s Top RestaurantBrands awarded:

2015 Indobox

2015 Hutong

2015 Muchos

2015 Bali Thai

2015 RENNthai

2008 Bayang

2008 RENNthai

2008 Bali Thai

Awarded by Wine & Dine Experience Pte Ltd

Bronze Singapore HEALTH AwardBrand awarded:


Awarded by Singapore Health Promotion Board

Singapore Service Star AwardBrands awarded:

2011 Streats

2011 RENNthai

2011 Bayang

2011 Hutong

2011 Honguo

Awarded by Singapore Tourism Board

Certificate of Excellence in Singapore for Brand Strategy in Marketing Excellence Awards

Brand awarded:

2013 Bali Thai

Awarded by Marketing Magazine

Singapore’s Best RestaurantBrands awarded:

2004 Bali Thai

2004 RENNthai

2003 Bali Thai

2003 RENNthai

2002 Bali Thai

2002 RENNthai

Awarded by Singapore Tatler

CORPORATE INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS . . . . . . . . . . . 11

SELLING RESTRICTIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

DETAILS OF THE PLACEMENT

LISTING ON CATALIST . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

INDICATIVE TIMETABLE FOR LISTING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18

OFFER DOCUMENT SUMMARY

OVERVIEW OF OUR GROUP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20

FINANCIAL HIGHLIGHTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22

THE PLACEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23

PLAN OF DISTRIBUTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24

USE OF PROCEEDS FROM THE PLACEMENT AND EXPENSES INCURRED . . . . . . . 25

MANAGEMENT AND PLACEMENT ARRANGEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . 27

RISK FACTORS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30

ISSUE STATISTICS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39

DILUTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41

CAPITALISATION AND INDEBTEDNESS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42

DIVIDEND POLICY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44

SUMMARY OF OUR FINANCIAL INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45

MANAGEMENT’S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND

FINANCIAL POSITION

OVERVIEW . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48

REVIEW OF PAST OPERATING PERFORMANCE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51

REVIEW OF PAST FINANCIAL POSITION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54

LIQUIDITY AND CAPITAL RESOURCES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57

CAPITAL EXPENDITURES, DIVESTMENTS, COMMITMENTS AND CONTINGENT

LIABILITIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61

FOREIGN EXCHANGE MANAGEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63

SIGNIFICANT ACCOUNTING POLICY CHANGE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64

GENERAL INFORMATION ON OUR GROUP

SHARE CAPITAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65

RESTRUCTURING EXERCISE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67

GROUP STRUCTURE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68

OUR SUBSIDIARIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69

SHAREHOLDERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70

MORATORIUM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71

CONTENTS

1

BUSINESS

OUR HISTORY. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72

BUSINESS OVERVIEW . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75

BRANDING AND MARKETING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80

QUALITY ASSURANCE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80

MAJOR CUSTOMERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81

MAJOR SUPPLIERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81

CREDIT MANAGEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82

RESEARCH AND DEVELOPMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82

INTELLECTUAL PROPERTY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83

INVENTORY MANAGEMENT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85

PROPERTIES AND FIXED ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85

STAFF TRAINING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 91

INSURANCE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 91

COMPETITION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 92

OUR COMPETITIVE STRENGTHS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 92

PROSPECTS, BUSINESS STRATEGIES AND FUTURE PLANS

PROSPECTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 95

TREND INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 97

ORDER BOOK . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 97

BUSINESS STRATEGIES AND FUTURE PLANS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 97

GOVERNMENT REGULATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 99

EXCHANGE CONTROLS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 107

DIRECTORS, EXECUTIVE OFFICER AND STAFF

MANAGEMENT REPORTING STRUCTURE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 108

DIRECTORS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 108

EXECUTIVE OFFICER. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 113

STAFF . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 114

REMUNERATION OF DIRECTORS, EXECUTIVE OFFICER AND RELATED STAFF . . . . 115

SERVICE AGREEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 116

CORPORATE GOVERNANCE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 118

BOARD PRACTICES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 121

INTERESTED PERSON TRANSACTIONS

INTERESTED PERSONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 122

PAST TRANSACTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 122

PRESENT AND ON-GOING TRANSACTIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 127

REVIEW PROCEDURES FOR FUTURE INTERESTED PERSON TRANSACTIONS . . . . 129

POTENTIAL CONFLICTS OF INTERESTS

INTERESTS OF DIRECTORS, CONTROLLING SHAREHOLDERS OR THEIR

ASSOCIATES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 131

INTERESTS OF EXPERTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 131

INTERESTS OF SPONSOR, ISSUE MANAGER AND PLACEMENT AGENT . . . . . . . . . . 131

CLEARANCE AND SETTLEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 132

GENERAL AND STATUTORY INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 133

CONTENTS

2

APPENDIX A INDEPENDENT AUDITOR’S REPORT AND THE AUDITED COMBINED

FINANCIAL STATEMENTS OF KATRINA GROUP LTD. FOR THE

FINANCIAL YEARS ENDED 31 DECEMBER 2013, 2014 AND 2015 . . . A-1

APPENDIX B INDEPENDENT PRACTITIONER’S ASSURANCE REPORT AND THE

UNAUDITED PRO FORMA COMBINED FINANCIAL INFORMATION FOR

THE FINANCIAL YEAR ENDED 31 DECEMBER 2015 . . . . . . . . . . . . . . B-1

APPENDIX C SUMMARY OF CONSTITUTION OF OUR COMPANY . . . . . . . . . . . . . . C-1

APPENDIX D SUMMARY OF RELEVANT PRC LAWS AND REGULATIONS . . . . . . . . D-1

APPENDIX E DESCRIPTION OF OUR SHARES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . E-1

APPENDIX F TAXATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-1

APPENDIX G TERMS, CONDITIONS AND PROCEDURES FOR APPLICATIONS . . . . G-1

CONTENTS

3

BOARD OF DIRECTORS : Alan Goh Keng Chian (CEO and Executive Chairman)

Madaline Catherine Tan Kim Wah (Executive Director)

Goh Shen Shu Donovan (Non-Executive Director)

Ang Miah Khiang (Lead Independent Director)

Chow Wen Kwan (Independent Director)

Eric Low Siak Meng (Independent Director)

COMPANY SECRETARY : Kwan Hon Kay @ Lawrence Kwan, FCS, FCIS

REGISTERED OFFICE

AND PRINCIPAL PLACE

OF BUSINESS

: 1 Sims Lane #05-05

Singapore 387355

SHARE REGISTRAR

AND SHARE

TRANSFER OFFICE

: B.A.C.S. Private Limited

8 Robinson Road

#03-00 ASO Building

Singapore 048544

SPONSOR, ISSUE

MANAGER AND

PLACEMENT AGENT

: Hong Leong Finance Limited

16 Raffles Quay

#01-05 Hong Leong Building

Singapore 048581

INDEPENDENT AUDITOR

AND REPORTING

ACCOUNTANT

: Ernst & Young LLP

One Raffles Quay

North Tower, Level 18

Singapore 048583

Partner-in-charge: Tan Peck Yen (A practising member of

the Institute of Singapore Chartered Accountants)

SOLICITORS TO THE

PLACEMENT

: Opal Lawyers LLC

30 Raffles Place

#19-04 Chevron House

Singapore 048622

LEGAL ADVISERS TO

THE COMPANY ON

PRC LAW

: Shanghai City Development Law Firm

31F, Hongkong Plaza

283 Huaihai Road (M)

Shanghai 200021

RECEIVING BANKER : The Bank of East Asia, Limited

Singapore Branch

60 Robinson Road

BEA Building

Singapore 068892

PRINCIPAL BANKER : DBS Bank Ltd

12 Marina Boulevard

Level 3 Marina Bay Financial Centre Tower 3

Singapore 018982

CORPORATE INFORMATION

4

In this Offer Document and the accompanying Application Forms, unless the context otherwise

requires, the following definitions apply throughout where the context so admits:–

Companies within our Group

“Beijing BaliThai” : Beijing BaliThai Restaurants Co., Ltd.

“Company” : Katrina Group Ltd.

“Group” : Our Company and our subsidiaries

“Katrina Singapore” : Katrina Holdings Pte Ltd

“Renn Thai” : Renn Thai Pte Ltd

Other Corporations and Agencies

“ACRA” : Accounting Corporate Regulatory Authority of Singapore

“Authority” : The Monetary Authority of Singapore

“CDP” : The Central Depository (Pte) Limited

“COMPASS” : Composers and Authors Society of Singapore Limited

“CPF” : The Central Provident Fund

“MOM” : Ministry of Manpower

“MUIS” : Majlis Ugama Islam Singapura (also known as the Islamic

Religious Council of Singapore)

“NEA” : National Environment Agency

“SGX-ST” : Singapore Exchange Securities Trading Limited

“Sponsor”, “Issue

Manager”, “Placement

Agent”, or “HLF”

: Hong Leong Finance Limited

General

“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 the subscription of the Placement

Shares

DEFINITIONS

5

“ASEAN” : Association of Southeast Asian Nations

“Associate” : (a) in relation to any director, CEO, substantial shareholder

or controlling shareholder (being an individual) means:–

(i) his immediate family;

(ii) the trustees of any trust of which he or his

immediate family is a beneficiary or, in the case of

a discretionary trust, is a discretionary object; or

(iii) any company in which he and his immediate family

together (directly or indirectly) have an interest of

30% or more of the aggregate of the nominal

amount of all the voting shares;

(b) in relation to a substantial shareholder or a controlling

shareholder (being a company) means any other

company which is its subsidiary or holding company or is

a fellow subsidiary of any such holding company or one

in the equity of which it and/or such other company or

companies taken together (directly or indirectly) have an

interest of 30% or more

“Associated Company” : In relation to a corporation, means:–

(a) any corporation in which the corporation or its subsidiary

has, or the corporation and its subsidiary together have,

a direct interest of not less than 20% but not more than

50% of the aggregate of the nominal amount of all the

voting shares; or

(b) any corporation, other than a subsidiary of the

corporation or a corporation which is an associated

company by virtue of paragraph (a), the policies of which

the corporation or its subsidiary, or the corporation

together with its subsidiary, is able to control or influence

materially

“Audit Committee” : The audit committee of our Company as at the date of this

Offer Document, unless otherwise stated

“Audited Combined

Financial Statements”

: The Audited Combined Financial Statements for the Financial

Years Ended 31 December 2013, 2014 and 2015 as set out in

Appendix A of this Offer Document

“Board” or “Board of

Directors”

: The board of Directors of our Company as at the date of this


“Catalist” : The sponsor-supervised listing platform of the SGX-ST

DEFINITIONS

6

“Catalist Rules” : Any or all of the rules in the Section B: Rules of Catalist of the

Listing Manual of the SGX-ST, as may be amended, varied or

supplemented from time to time

“CEO” : Chief Executive Officer

“CFO” : Chief Financial Officer

“China” or “PRC” : The People’s Republic of China, excluding Hong Kong Special

Administrative Region and Macau Special Administrative

Region for the purposes of this Offer Document

“Companies Act” : The Companies Act (Chapter 50) of Singapore, as may be

amended, varied or supplemented from time to time

“Constitution” : The constitution of our Company

“Controlling Shareholder” : A person who has an interest in our Shares of an aggregate of

not less than 15% of the total votes attached to all our Shares,

or in fact exercises control over our Company

“Copyright Act” : The Copyright Act (Chapter 63) of Singapore, as may be

amended, varied or supplemented from time to time

“Directors” : The directors of our Company as at the date of this Offer

Document, unless otherwise stated

“entity” : Includes a corporation, an unincorporated association, a

partnership and the government of any state, but does not

include a trust

“EPS” : Earnings per Share

“Executive Directors” : The executive Directors of our Company as at the date of this


“Executive Officers” : The executive officers of our Group as at the date of this Offer

Document, unless otherwise stated

“F&B” : Food and beverage

“FY” : Financial year ended or ending 31 December, as the case

may be

“GST” : Goods and Services Tax

“Independent Directors” : The non-executive independent Directors of our Company as

at the date of this Offer Document, unless otherwise stated

DEFINITIONS

7

“Latest Practicable Date” : 17 June 2016, being the latest practicable date prior to the

lodgement of this Offer Document with the SGX-ST acting as

agent on behalf of the Authority

“Listing Manual” : The listing manual of the SGX-ST, as may be amended, varied

or supplemented from time to time

“Market Day” : A day on which the SGX-ST is open for trading in securities

“New Shares” : The 35,800,000 new Shares for which our Company invites

applications to subscribe, pursuant to the Placement, subject

to and on the terms and conditions of this Offer Document

“Nominating Committee” : The nominating committee of our Company as at the date of

this Offer Document, unless otherwise stated

“Non-Executive Director” : The non-executive Director of our Company (including

Independent Directors) as at the date of this Offer Document,

unless otherwise stated

“NTA” : Net tangible assets (after non-controlling interests)

“Offer Document” : This offer document dated 15 July 2016 issued by our

Company in respect of the Placement

“PAT” : Profit after tax

“PBT” : Profit before tax

“PER” : Price earnings ratio

“periods under review” : The period which comprises FY2013, FY2014 and FY2015

“Placement” : The placement by the Placement Agent of the Placement

Shares on behalf of our Company for subscription at the

Placement Price, subject to and on the terms and conditions

of this Offer Document

“Placement Price” : S$0.21 for each Placement Share

“Placement Shares” : The 35,800,000 New Shares

“Relevant Period” : The periods under review and the period from 1 January 2016

to the Latest Practicable Date

“Remuneration Committee” : The remuneration committee of our Company as at the date of

this Offer Document, unless otherwise stated

DEFINITIONS

8

“Restructuring Exercise” : The corporate restructuring exercise undertaken in

connection with the Placement, as described in the

“Restructuring Exercise” section of this Offer Document

“Securities Account” : The securities account maintained by a Depositor with CDP,

but does not include a securities sub-account

“Service Agreements” : The service agreements entered into between our Company

and our CEO and Executive Chairman, Alan Goh and our

Executive Director, Catherine Tan, as described in the

“Service Agreements” section of this Offer Document

“SFA” : The Securities and Futures Act (Chapter 289) of Singapore,

as may be amended, varied or supplemented from time to

time

“SGXNET” : The corporate announcement system maintained by the

SGX-ST for the submission of announcements by listed

companies

“Shareholders” : Registered holders of Shares, except where the registered

holder is CDP, the term “Shareholders” shall, in relation to

such Shares, mean the Depositors whose Securities Accounts

are credited with Shares

“Shares” : Ordinary shares in the capital of our Company

“Sub-division” : The sub-division of 1,165,006 Shares in the capital of our

Company into 195,721,008 Shares as described in the

“Restructuring Exercise” section of this Offer Document

“Substantial Shareholder” : A person who has an interest in the Shares the total votes

attached to which is not less than 5% of the total votes

attached to all the voting shares in our Company

“Unaudited Pro Forma

Combined Financial

Information”

: The unaudited pro forma combined financial information for

the financial year ended 31 December 2015

Currencies, Units and Others

“RM” : Ringgit Malaysia, being the lawful currency of Malaysia

“RMB” : Renminbi, being the lawful currency of the PRC

“S$”, “$” and “cents” : Singapore dollar and cent, respectively

“sq ft” : Square feet

DEFINITIONS

9

“sq m” : Square metre

“%” : Percentage

“nm” : Not meaningful

The terms “Depositor”, “Depository Agent” and “Depository Register” shall have the meanings

ascribed to them respectively in Section 81SF of SFA or any statutory modification thereof, as the

case may be.

Words importing the singular shall, where applicable, include the plural and vice versa and words

importing the masculine gender shall, where applicable, include the feminine and neuter genders

and vice versa. References to persons shall include corporations.

Any reference in this Offer Document and/or the Application Forms to any statute or enactment is

a reference to that statute or enactment as for the time being amended or re-enacted. Any word

defined under the Companies Act, the SFA 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 or any statutory modification thereof, as the case may be.

Any reference in this Offer Document and/or the Application Forms to Shares being allotted and/or

allocated to an applicant includes allotment and/or allocation to CDP for the account of that

applicant.

Any reference to a time of day in this Offer Document and/or the Application Forms shall be a

reference to Singapore time, unless otherwise stated.

Any reference to “we”, “us”, “our”, “ourselves” or their other grammatical variations thereof in this

Offer Document is a reference to our Company, our Group or any member of our Group as the

context requires.

Any discrepancies in the tables included herein between the listed amounts and the total thereof

are due to rounding. Accordingly, figures shown as totals in certain tables may not be an arithmetic

aggregation of the figures which precede them.

Any reference to “Alan Goh” in this Offer Document is a reference to Alan Goh Keng Chian.

Any reference to “Catherine Tan” in this Offer Document is a reference to Madaline Catherine Tan

Kim Wah.

DEFINITIONS

10

All statements contained in this Offer Document, statements made in press releases and oral

statements that may be made by us or our Directors, Executive Officers or employees acting on

our behalf that are not statements of historical fact, constitute “forward-looking statements”. You

can identify some of these forward-looking statements by terms such as “expects”, “believes”,

“plans”, “intends”, “estimates”, “anticipates”, “may”, “will”, “would” and “could” or similar words.

However, you should note that these words are not the exclusive means of identifying

forward-looking statements. All statements regarding our expected financial position, business

strategies, plans and prospects are forward-looking statements.

These forward-looking statements, including without limitation, statements as to:–

(a) our revenue and profitability;

(b) expected growth in demand;

(c) expected industry trends;

(d) anticipated expansion plans; and

(e) other matters discussed in this Offer Document regarding matters that are not historical fact,

are only predictions. These forward-looking statements involve known and unknown risks,

uncertainties and other factors that may cause our actual results, performance or achievements

to be materially different from any future results, performance or achievements expected,

expressed or implied by these forward-looking statements. These risks, uncertainties and other

factors include, among others:–

(a) changes in political, social, economic and stock or securities market conditions and the

regulatory environment in the countries in which we conduct business;

(b) changes in currency exchange or interest rates;

(c) our anticipated growth strategies and expected growth;

(d) changes in the availability and prices of food we served in our restaurants;

(e) changes in the availability and prices of raw materials we need to operate our business;

(f) changes in customers’ preference;

(g) changes in competitive conditions and our ability to compete under these conditions;

(h) changes in our future capital needs and the availability of financing and capital to fund these

needs;

(i) the factors described in the “Risk Factors” section of this Offer Document; and

(j) other factors beyond our control.

All forward-looking statements made 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.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

11

Given the risks and uncertainties that may cause our actual future results, performance or

achievements to be materially different from those expected, expressed or implied by the

forward-looking statements in this Offer Document, we advise you not to place undue reliance on

those statements which apply only as at the date of this Offer Document. Neither our Company,

the Sponsor, Issue Manager and Placement Agent nor any other person represents or warrants

to you that our actual future results, performance or achievements will be as discussed in those

statements. Further, our Company, the Sponsor, Issue Manager and Placement Agent disclaim

any responsibility to update any of those forward-looking statements to reflect future

developments, events or circumstances for any reason, 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 this Offer Document is

registered but before the close of the Placement, we become aware of (a) a false or misleading

statement in this Offer Document; (b) an omission from this Offer Document of any information

that should have been included in it under Section 243 of the SFA; or (c) a new circumstance has

arisen since the Offer Document was lodged with the SGX-ST acting as agent on behalf of the

Authority and would have been required by Section 243 of the SFA to be included in 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, we may, in consultation with the Sponsor, Issue Manager and

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

12

This Offer Document does not constitute an offer, solicitation or invitation to subscribe for the

Placement Shares in any jurisdiction in which such offer, solicitation or invitation is unlawful or is

not authorised or to any person to whom it is unlawful to make such offer, solicitation or invitation.

No action has been or will be taken under the requirements of the legislation or regulations of, or

of the legal or regulatory requirements of any jurisdiction, except for the lodgement and/or

registration of this Offer Document in Singapore in order to permit a public offering of the

Placement Shares and the public distribution of this Offer Document in Singapore. The distribution

of this Offer Document and the offering of the Placement Shares in certain jurisdictions may be

restricted by the relevant laws in such jurisdictions. Persons who may come into possession of this

Offer Document are required by us, the Sponsor, Issue Manager and 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 Sponsor, Issue Manager and Placement Agent.

Persons to whom a copy of this Offer Document has been issued shall not circulate to any other

person, reproduce or otherwise distribute this Offer Document or any information herein for any

purpose whatsoever nor permit or cause the same to occur.

SELLING RESTRICTIONS

13

LISTING ON CATALIST

The Sponsor and Issue Manager has made an application to the SGX-ST for permission to deal

in, and for quotation of, all our existing issued Shares already issued and the New Shares which

are the subject of the Placement on Catalist. The dealing in, and quotation for, our Shares and the

New 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 Mainboard of the SGX-ST. In particular, companies may list

on Catalist without a track record of profitability and there is no assurance that there will be a liquid

market in the shares or units of shares traded on Catalist. Applicants should be aware of the risks

of investing in such companies and should make the decision to invest only after careful

consideration and, if appropriate, consultation with their professional adviser(s).

The Placement is made in or accompanied by this Offer Document that has been registered by the

SGX-ST acting as agent on behalf of the Authority. We have not lodged or registered this Offer

Document in any other jurisdiction.

Neither the Authority nor the SGX-ST has examined or approved the contents of this Offer

Document. Neither the Authority nor the SGX-ST assumes any responsibility for the contents of

this Offer Document, including the correctness of any of the statements or opinions made or

reports contained in this Offer Document. The SGX-ST does not normally review the application

for admission but relies on the Sponsor and Issue Manager confirming that our Company is

suitable to be listed on Catalist and complies with the Catalist Rules. Neither the Authority nor the

SGX-ST has in any way considered the merits of the Shares being offered for investment.

The registration of this Offer Document by the SGX-ST acting as agent on behalf of the Authority

does not imply that the SFA, or any other legal or regulatory requirements, or requirements under

the SGX-ST’s listing rules, has been complied with.

Acceptance of applications will be conditional upon the issue of New Shares and the listing and

quotation of all our existing issued Shares and the New Shares. 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, if the admission and listing do not proceed, and you will

not have any claims against us, the Sponsor, Issue Manager and Placement Agent or our advisers

or agents.

After the expiration of six months from the date of registration of this Offer Document, no person

shall make an offer of securities, 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 our Shares, on the basis

of this Offer Document.

We are subject to the provisions of the SFA and the Catalist Rules regarding corporate disclosure.

In particular, pursuant to Section 241 of the SFA, if after this Offer Document is registered but

before the close of the Placement, we become aware of:–

(a) a false or misleading statement in this Offer Document;

(b) an omission from this Offer Document of any information that should have been included in

it under Section 243 of the SFA; or


14

(c) a new circumstance that has arisen since this Offer Document was lodged which would have

been required by Section 243 of the SFA 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, we may lodge a supplementary

or replacement offer document pursuant to Section 241 of the SFA.

In the event that a supplementary or replacement offer document is lodged, 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) within two days (excluding any Saturday, Sunday or public holiday) from the date of

lodgement of the supplementary or replacement offer document, give the applicants

notice in writing of how to obtain, or arrange to receive, a copy of the same and provide

the applicants with an option to withdraw their applications, and take all reasonable

steps to make available within a reasonable period the supplementary or replacement

offer document to the applicants who have indicated they wish to obtain, or who have

arranged to receive, a copy of the supplementary or replacement offer document;

(ii) within seven days from the date of lodgement of the supplementary or replacement offer

document, give the applicants the supplementary or replacement offer document, as the

case may be, and provide the applicants with an option to withdraw their applications;

or

(iii) treat the applications as withdrawn and cancelled, in which case the applications shall

be deemed to have been withdrawn and cancelled, and we shall, within seven days from

the date of lodgement of the supplementary or replacement offer document, return 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, we shall either:–

(i) within two days (excluding any Saturday, Sunday or public holiday) from the date of

lodgement of the supplementary or replacement offer document, give the applicants

notice in writing of how to obtain, or arrange to receive, a copy of the 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 take all reasonable steps to make available within a

reasonable period the supplementary or replacement offer document 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;


15

(ii) within seven days from the date of lodgement of the supplementary or replacement offer

document, give the applicants the supplementary or replacement offer document, as the

case may be, and provide the applicants with an option to return to us the Placement

Shares which they do not wish to retain title in; or

(iii) treat the issue of the Placement Shares as void, in which case the issue shall be

deemed void and we shall within seven days from the date of lodgement of the

supplementary or replacement offer document, return the applicants all monies the

applicants have paid on account of their applications for the Placement Shares.

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 days from the receipt of such

notification, return to him all monies paid by him on account of his application for those Shares.

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, 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 days from the receipt of such notification and documents, if any, return to him all monies

paid by him for those Placement Shares, and the issue of those Placement Shares shall be

deemed to be void.

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’ opinion, is false or

misleading (ii) omits any information that should have been included in it under the SFA, or (iii)

does not, in the Authority’s opinion, comply with the requirements of the SFA.

In the event that the Authority issues a Stop Order and applications to subscribe for the Placement

Shares have been made prior to the Stop Order, then:–

(a) where the Placement Shares have not been issued to the applicants, the applications for the

Placement Shares shall be deemed to have been withdrawn and cancelled and our Company

shall, within 14 days from the date of the Stop Order, return 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 shall be deemed to be void and our Company shall, (i) if no documents purporting to

evidence title to those Placement Shares have been issued to the applicants, within seven

days from the date of the Stop Order, return the applicants all monies the applicants have

paid on account of their applications for the Placement Shares, or (ii) if documents purporting

to evidence title to those Placement Shares have been issued to the applicants, within seven

days from the date of the Stop Order, inform the applicants to return such documents to our

Company within 14 days from that date and within seven days from the date of receipt of

such documents or the date of the Stop Order, whichever is the later, return the applicants

all monies the applicants have paid on account of their applications for the Placement

Shares.


16

Where monies are to be returned to applicants for the Placement Shares, it shall be paid to the

applicants without any interest or share of revenue or benefit arising therefrom at the applicants’

own risk, and the applicants will not have any claim against our Company, the Sponsor, Issue

Manager and Placement Agent.

This Offer Document has been seen and approved by our Directors, and they individually and

collectively accept full responsibility for the accuracy of the information given in this Offer

Document and confirm, having made all reasonable enquiries, that to the best of their knowledge

and belief, (i) the facts stated and the opinions, intentions and expectations expressed in this Offer

Document are true, fair and accurate and not misleading in all material respects as at the date of

this Offer Document, (ii) there are no material facts the omission of which would make any

statement in this Offer Document misleading, and (iii) this Offer Document constitutes a full and

true disclosure of all material facts about the Placement, our Group and our Shares.

Neither our Company, the Sponsor, Issue Manager, and Placement Agent nor any other parties

involved in the Placement is making any representation to any person regarding the legality of an

investment in our Shares by such person under any investment or other laws or regulations. No

information in this 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 legal,

financial, tax or other professional adviser regarding an investment in our Shares.

The Placement Shares are offered for subscription solely on the basis of the information contained

and the representations made in this Offer Document.

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

Sponsor, Issue Manager and Placement Agent. Neither the delivery of this Offer Document and

the Application Forms nor any document relating to 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 are required to be disclosed by law, we will

promptly make an announcement of the same to the SGX-ST and if required under the SFA, a

supplementary or replacement offer document will be issued and made available to the public

after a copy thereof has been lodged with the SGX-ST acting as agent on behalf of the Authority.

All applicants should take note of any such announcement, and/or supplementary or replacement

offer document and, upon the release of such an announcement, and/or supplementary or

replacement offer document, shall be deemed to have notice of such changes.

Save as expressly stated in this Offer Document, nothing herein is, or may be relied upon as, a

promise or representation as to the future performance or policies of our Company, or our

subsidiaries.

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 is not authorised or to any person to whom it is unlawful to make such offer,

solicitation or invitation.


17

Copies of this Offer Document may be obtained on request, subject to availability, during office

hours from:–

HONG LEONG FINANCE LIMITED

16 Raffles Quay

#01-05 Hong Leong Building

Singapore 048581

An electronic copy of this Offer Document is also available on the SGX-ST website at

http://www.sgx.com.

The Application List will open immediately upon registration of the Offer Document by the

SGX-ST acting as agent of the Authority and will remain open until 12.00 noon on 22 July

2016 or for such further period or periods as our Directors may, in consultation with the

Sponsor, Issue Manager and Placement Agent, in their absolute discretion decide, subject

to any limitation under all applicable laws. In the event a supplementary or replacement

offer document is lodged with the SGX-ST acting as agent on behalf of the Authority, the

Application List will remain open for at least 14 days after the lodgement of the

supplementary or replacement offer document.

Details of the procedures for applications to subscribe for the Placement Shares are set out in

Appendix G of this Offer Document.

INDICATIVE TIMETABLE FOR LISTING

An indicative timetable is set out below for your reference:–

Indicative Date and Time Event

22 July 2016, 12.00 noon Close of Application List

26 July 2016, 9.00 a.m. Commence trading on a “ready” basis

29 July 2016 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 22 July 2016, the date of admission of our Company to Catalist is 26 July 2016, the SGX-ST’s

shareholding spread requirement will be complied with and the New Shares will be issued and

fully paid-up prior to 9.00 a.m. on 26 July 2016.

The Placement will be open from 15 July 2016 (immediately upon registration of the Offer

Document) to 12.00 noon on 22 July 2016.

The above timetable and procedures may be subject to such modification as the SGX-ST may in

its discretion decide, including the commencement date of trading on a “ready” basis.

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:–

(i) through a SGXNET announcement to be posted on the internet at the SGX-ST website

http://www.sgx.com; and

(ii) in major English language newspaper(s) in Singapore.


18

We will provide details of the results of the Placement (including the level of subscription for the

Placement Shares), as soon as practicable after the closure of the Application List through the

channels described in (i) and (ii) above.

We reserve the right to reject or accept, in whole or in part, or to scale down or ballot any

application for the Placement Shares, without assigning any reason therefor, and no enquiry

and/or correspondence on our decision will be entertained. In deciding the basis of allotment

and/or allocation, due consideration will be given to, inter alia, the desirability of allotting and/or

allocating the Placement Shares to a reasonable number of applicants with a view to establish an

adequate market for our Shares.

Investors should consult the SGX-ST announcement on the “ready” trading date on the

internet (at the SGX-ST website http://www.sgx.com) or newspapers, or check with their

brokers on the date on which trading on a “ready” basis will commence.


19

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 the information that

potential Investors should consider before investing in the Shares of our Company. Potential

Investors should read this entire Offer Document carefully, especially the matters set out in the

“Risk Factors” section of this Offer Document, before deciding to invest in our Shares.

OVERVIEW OF OUR GROUP

Our Company was incorporated in Singapore on 31 March 2016 under the Companies Act as a

private company limited by shares under the name of “Katrina Group Pte. Ltd.”. On 9 July 2016,

our Company was converted into a public company limited by shares and our name was changed

to “Katrina Group Ltd.”.

Our Business

We are an operator of chains of restaurants and cafes under different F&B brands and concepts.

Our Group owns and operates restaurants under nine different F&B brands that are developed

and owned by us as at the Latest Practicable Date. Each brand provides different dining options

in order to cater to a wide spectrum of patrons and different market segments.

Each of our brands serves authentic cuisines of different ethnicity, namely Indonesian, Thai, Hong

Kong, Yunnan, northern Chinese cuisine, Mexican and Vietnamese. In addition, each brand is

accompanied by tailored décor and designs in our restaurants and cafes in order to provide

patrons with comfortable ambience. Amongst our nine own proprietary brands, restaurants under

four of our own proprietary brands namely Bali Thai, So Pho, Streats and Indobox, are certified

“Halal” in Singapore, save for the Bali Thai restaurant at IMM Building as disclosed in the

“Government Regulations” section of this Offer Document.

Our restaurants are located in Singapore and overseas. Within Singapore, our casual dining

brands are generally located in the heartlands of Singapore, such as Jurong East and Tampines.

Meanwhile, the contemporary upmarket brands are located within the central business district

vicinity of Singapore. We also operate restaurants outside Singapore, currently located in Beijing,

PRC. In the PRC, our Group owns and operates two Bali Thai restaurants. Food served in our Bali

Thai restaurants in the PRC has been tailored and fine-tuned to suit the tastes of the local

consumers in the PRC. We have identified certain locations within Malaysia, Vietnam and

Indonesia for our overseas expansion. Please refer to the “Business Strategies and Future Plans”

section of this Offer Document for more details.

As at the Latest Practicable Date, our Group owns and operates 32 restaurants in Singapore and

two restaurants in the PRC under our nine own proprietary F&B brands. In addition, we provide

catering service from one of our restaurants in Singapore for various private and corporate events.

In seeking the opportunity to reach out to increasing needs of consumers ordering food online and

requiring food delivery services, we have launched our own customised online food ordering and

delivery system which allows customers to place orders and make payments directly on our

website without going through a third party application or system. Following the placing of orders

and payment online, customers may elect to collect their orders from their desired restaurant or

to request food delivery to their doorstep. Through this online food ordering and delivery system,

consumers have easier access to enjoyment of food served by our restaurants as the system

allows consumers to have a cashless transaction by making direct payment to us via our website.

Further details are set out in the “Business Overview” section of this Offer Document.


20

Our Competitive Strengths

Our Directors believe our competitive strengths are as follows:–

• We have various proprietary brands with different F&B concepts catering to a wide market

segment

• Our restaurants under four of our own proprietary brands are Halal-certified

• We have dedicated key management personnel and staff with extensive experience in the

local F&B industry

• We have an established reputation in our marketplace

• We maintain good relationships with suppliers and landlords

Further details are set out in the “Competitive Strengths” section of this Offer Document.

Our Business Strategies and Future Plans

Our business strategies and future plans are as follows:–

• Launch of our online food ordering and delivery system

• Growing our restaurants for three “Halal” certified brands

• Geographical expansion into new regional markets

• Expansion through strategic alliances, acquisitions and joint ventures

Further details are set out in the “Business Strategies and Future Plans” section of this Offer

Document.

Where you can find us

Our registered office is located at 1 Sims Lane #05-05 Singapore 387355. Our telephone and

facsimile numbers are +65 6292 4748 and +65 6292 4238 respectively. Our company registration

number is 201608344N. Our internet address is www.katrinagroup.com.


21


You should read the following summary financial information in conjunction with the full text of this

Offer Document, including the Audited Combined Financial Statements and the “Management’s

Discussion and Analysis of Results of Operations and Financial Position” section of this Offer

Document.

Selected items from the Combined Statements of Comprehensive Income(1)

Audited

(S$’000) FY2013 FY2014 FY2015

Revenue 40,700 45,410 52,443

Gross profit 7,477 8,477 8,831

Profit before tax 4,338 4,169 5,116

Profit for the year, representing profit attributable

to owners of the Company 3,701 3,292 4,262

EPS (cents)(2)(4) 1.89 1.68 2.18

EPS (as adjusted for the Placement) (cents)(3)(4) 1.60 1.42 1.84

Selected items from the Combined Statements of Financial Position(5)

Audited

(S$’000)

As at

31 December 2014

As at

31 December 2015

Current assets 9,564 12,618

Non-current assets 9,676 10,865

Current liabilities 6,738 6,741

Non-current liabilities 995 967

Total equity 11,507 15,775

NTA per Share (cents)(6) 5.88 8.06

Notes:–

(1) Our combined statements of comprehensive income for the periods under review have been prepared on the basis

that our Group had been in existence throughout the periods under review.

(2) EPS is computed based on the net profit attributable to owners of the Company divided by the pre-Placement share

capital of 195,721,008 Shares.

(3) EPS (as adjusted for the Placement) is computed based on the net profit attributable to owners of the Company

divided by the post-Placement share capital of 231,521,008 Shares.

(4) Had the Service Agreements been in place with effect from 1 January 2015, the PAT for FY2015 would have been

approximately S$3.5 million, and the EPS and EPS (as adjusted for the Placement) would be 1.78 cents and 1.51

cents, respectively.

(5) Our combined statements of financial position as at 31 December 2014 and 31 December 2015 have been prepared

on the basis that our Group has been in existence on the respective dates.

(6) The NTA per Share as at 31 December 2014 and 31 December 2015 has been computed based on our

pre-Placement share capital of 195,721,008 Shares.


22

Issue size : 35,800,000 New Shares. The New Shares will, upon issue

and allotment, rank pari passu in all respects with the existing

issued Shares.

Placement Price : S$0.21 for each Placement Share.

The Placement : The Placement comprises an offering by the Placement Agent

on behalf of our Company of 35,800,000 Placement Shares at

the Placement Price by way of placement, 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 internationally and enable us to tap into the

capital markets to fund our business growth. The Placement

will also provide members of the public, our business

associates and employees, and others who have contributed

to the success of our Group with an opportunity to participate

in the equity of our Company.

Listing status : Our Shares will be quoted on Catalist in Singapore dollars,

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.

Risk factors : Investing in our Shares involves risks which are described in

the “Risk Factors” section of this Offer Document.

THE PLACEMENT

23

The Placement Price is determined by us in consultation with the Sponsor, Issue Manager and

Placement Agent after taking into consideration, inter alia, prevailing market conditions and

estimated market demand for the Placement Shares determined through a book-building process.

The Placement Price is the same for all the Placement Shares and is payable in full on application.

Placement Shares

Application for the Placement Shares may only be made by way of Placement Shares Application

Forms. The terms, conditions and procedures for applications are described in Appendix G of this

Offer Document.

Subscribers of Placement Shares may be required to pay a brokerage of up to 1.0% of the

Placement Price (plus GST thereon, if applicable) to the Placement Agent or any sub-placement

agent that may be appointed by the Placement Agent.

None of our Directors or Substantial Shareholders or their immediate family intends to subscribe

for the Placement Shares in the Placement. None of our members, management or employees

intends to subscribe for more than 5% of the Placement Shares in the Placement.

To the best of our knowledge and belief, we are not aware of any person who intends to subscribe

for more than 5% of the Placement Shares. However, through a book-building process to assess

market demand for our Shares, there may be person(s) who may indicate his interest to subscribe

for more than 5% of the Placement Shares. If such person(s) were to make an application for more

than 5% of the Placement Shares pursuant to the Placement and are subsequently allotted and/or

allocated such number of Shares, we will make the necessary announcements at the appropriate

time. The final allotment and/or allocation of Shares will be in accordance with the shareholding

spread and distribution guidelines as set out in the Catalist Rules.

No Shares shall be allotted and/or allocated on the basis of this Offer Document later than six

months after the date of registration of this Offer Document by the SGX-ST acting as agent on

behalf of the Authority.

PLAN OF DISTRIBUTION

24

The net proceeds to be raised by our Company from the issue of the New Shares, after deducting

the estimated expenses of approximately S$1.2 million, are approximately S$6.3 million.

The allocation of each principal intended use of proceeds and the estimated listing expenses are

set out below:–

As a percentage of

gross proceeds

from the Placement

S$’000 (%)

Use of proceeds

Business expansion through:

• Increasing the number of restaurants for the

“Halal” certified brands

• Online food ordering and delivery business in

Singapore;

• Geographical expansion into new regional

markets; and

• Forming alliances, acquisition and joint

ventures

5,070 67.4%

General working capital and corporate purposes 1,200 16.0%

Net proceeds from the Placement 6,270 83.4%

Expenses to be borne by our Company(1)

Listing and processing fees 32 0.4%

Professional fees and expenses(2) 928 12.4%

Placement commission 263 3.5%

Miscellaneous expenses 25 0.3%

Gross proceeds from the Placement 7,518 100.0

Notes:–

(1) Of the total estimated listing expenses to be borne by our Company of approximately S$1.2 million, approximately

S$0.4 million will be capitalised against share capital and the balance of the estimated listing expenses will be

charged to profit or loss.

(2) This includes the sponsor fee, audit fee and legal fee.

In the reasonable opinion of our Directors, there is no minimum amount which must be raised from

the Placement.

Please refer to the “Business Strategies and Future Plans” section of this Offer Document for

further details on our future plans.

Pending the deployment of the net proceeds as aforesaid, the funds will be placed in short-term

deposits with financial institutions and/or used to invest in short-term money market instruments

and/or used for working capital requirements as our Directors may deem appropriate.

USE OF PROCEEDS FROM THE PLACEMENT AND EXPENSES INCURRED

25

We will make periodic announcements on the use of the net proceeds from the Placement as and

when the funds are materially disbursed, and provide a status report on the use of the proceeds

in our annual report.

In the event that any part of our proposed uses of the net proceeds from the Placement does not

materialise or proceed as planned, our Directors will carefully evaluate the situation and may

re-allocate the intended funding to other purposes and/or hold such funds on short-term deposits

for so long as our Directors deem it to be in the interests of our Company and our Shareholders,

taken as a whole. Any change in the use of the net proceeds will be subject to the Catalist Rules

and appropriate announcements will be made by our Company on SGXNET.

USE OF PROCEEDS FROM THE PLACEMENT AND EXPENSES INCURRED

26

Pursuant to a full sponsorship and management agreement dated 15 July 2016 (the “Management

Agreement”) entered into between our Company and HLF, our Company appointed HLF to

sponsor and manage the Placement. HLF will receive a fee from our Company for such services

rendered in connection with the Placement.

Pursuant to the placement agreement dated 15 July 2016 (the “Placement Agreement”) entered

into between our Company and HLF, HLF agreed to subscribe for and/or procure subscribers for

the Placement Shares at the Placement Price for a placement commission of three and a half per

cent (3.5)% of the aggregate Placement Price for the total number of Placement Shares

successfully subscribed, payable by our Company. HLF may, at its absolute discretion, appoint

one or more sub-placement agents for the Placement Shares.

Subscribers of the Placement Shares may be required to pay a brokerage of up to 1.0% of the

Placement Price (plus GST thereon, if applicable) to the Placement Agent or any sub-placement

agent that may be appointed by the Placement Agent.

Save as aforesaid, no commission, discount or brokerage, has been paid or other special terms

granted by our Company within the two years preceding the date of this Offer Document 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 in, or

debentures of, our Company and our subsidiaries.

If there shall have been, since the date of the Management Agreement and prior to the close of

the Application List:–

(a) any breach of the warranties or undertakings by our Company in the Management Agreement

which comes to the knowledge of HLF; or

(b) any occurrence of certain specified events which comes to the knowledge of HLF; or

(c) any adverse change, or any development involving a prospective adverse change, in the

condition (financial or otherwise) of our Company or of our Group as a whole; or

(d) any introduction or prospective introduction of or any change or prospective change in any

legislation, regulation, order, policy, rule, guideline or directive in Singapore or elsewhere

(whether or not having the force of law) and including, without limitation, any directive or

request issued by the Authority, the Securities Industry Council of Singapore or the SGX-ST

or relevant authorities elsewhere, in the interpretation or application thereof by any court,

government body, regulatory authority or other competent authority in Singapore or

elsewhere; or

(e) any change, or any development involving a prospective change, in local, national or

international financial (including stock market, foreign exchange market, inter-bank market

or interest rates or money market), political, industrial, economic, legal or monetary

conditions, taxation or exchange controls (including without limitation, the imposition of any

moratorium, suspension or restriction on trading in securities generally on the SGX-ST due

to exceptional financial circumstances or otherwise, adverse changes in foreign exchange

controls in Singapore and overseas or any combination of any such changes or

developments or crisis, or any deterioration of any such conditions); or

MANAGEMENT AND PLACEMENT ARRANGEMENTS

27

(f) any imminent threat or occurrence of any local, national or international outbreak or

escalation of hostilities, insurrection, terrorist attacks or armed conflict (whether or not

involving financial markets) in any jurisdiction; or

(g) any regional or local outbreak of disease that may have an adverse effect on the financial

markets; or

(h) any other occurrence of any nature whatsoever,

which has resulted or is in the reasonable opinion of the Sponsor and Issue Manager likely to

result in a material adverse fluctuation or material adverse conditions in the stock market in

Singapore or overseas; or is likely to materially prejudice the success of the Placement; or it

becoming impracticable, inadvisable, inexpedient or uncommercial to proceed with any of the

transactions contemplated under the Management Agreement or the Placement; or the business,

trading position, operations or prospects of our Group being materially and adversely effected;

results or is likely to result in the issue of a notice of refusal to an admission of our Company to

the Official List of Catalist by the SGX-ST to the Sponsor and Issue Manager at any point prior to

listing of our Shares; or makes it uncommercial or otherwise contrary to or outside the usual

commercial practices in Singapore for the Sponsor and Issue Manager to observe or perform or

be obliged to observe or perform the terms of the Management Agreement, the Sponsor and Issue

Manager may at any time prior to the close of the Application List rescind or terminate the

Management Agreement.

The Sponsor and Issue Manager may terminate the Management Agreement if:–

(a) at any time up to the close of the Application List, a notice of refusal to an admission to the

Official List of Catalist is issued by the SGX-ST to the Sponsor and Issue Manager; or

(b) at any time after the registration of this Offer Document with the SGX-ST but before the close

of the Application List, our Company fails and/or neglects to lodge a supplementary or

replacement offer document (as the case may be) if we become aware of:–

(i) a false or misleading statement in this Offer Document;

(ii) an omission from this Offer Document of any information that should have been

included in it under the SFA; or

(iii) 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 would have been required by the

SFA 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; or

(c) the Shares have not been admitted to Catalist on or before 26 July 2016 (or such other date

as our Company and the Sponsor and Issue Manager may agree).


28

The obligations under the Placement Agreement are conditional upon the Management

Agreement not being determined or rescinded pursuant to the provisions of the Management

Agreement. In the case of the non-fulfilment of any of the conditions in the Management

Agreement or the release or discharge of the Sponsor and Issue Manager from its obligations

under or pursuant to the Management Agreement, the Placement Agreement shall be terminated

and the parties shall be released from their respective obligations under the Placement

Agreement.

In the event that the Management Agreement and/or the Placement Agreement is terminated, our

Directors reserve the right, at their absolute discretion, to cancel the Placement.

Save as disclosed above, we do not have any material relationship with the Sponsor, Issue

Manager and Placement Agent.


29

Prospective investors should consider carefully and evaluate the following risk factors and all

other information contained in this Offer Document, before deciding to invest in 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 or results of operations or cash flows or prospects 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 in our Shares. To the best of our Directors’ belief and knowledge, all the

risk factors that are material to investors in making an informed judgment in our Company have

been set out below.

RISKS RELATING TO OUR BUSINESS OR OUR INDUSTRY

We are subject to regulatory requirements for our operations

Our business in Singapore is subject to various laws, rules and regulations, including but not

limited to the Environmental Public Health Act and the Sale of Food Act. We are also required to

comply with the regulations and policies of relevant authorities, such as the NEA. Our business

and operations in the PRC are subject to the laws and regulations in the PRC. Please refer to the

“Government Regulations” section of this Offer Document for further details of these laws and

regulations.

We may be required to comply with any further and/or stricter requirements if there are changes

to the applicable laws, regulations or policies in Singapore or PRC. This may restrict or hamper

our business or result in higher operating costs which may adversely affect our business and

financial performance. In addition, there can be no assurance that we are able to comply with the

requirements of such new laws, regulations and policies in Singapore and/or PRC.

Regulatory licences are required for the operations of our restaurants in Singapore and PRC.

Such licences are granted for fixed periods of time and need to be renewed upon expiry. There can

be no assurance that such licences will be processed, issued or renewed in time or at all. Any

failure to obtain, maintain or renew any of such licences may materially and adversely affect our

business, operations and financial performance.

Further, if we are found to be in breach of any applicable laws, regulations, conditions or policies,

the relevant government or regulatory authority may take action against us.

Since the commencement of operations of our restaurants and prior to 1 May 2016, we have been

providing music to the public in these premises without a copyright music licence from COMPASS.

Under the Copyright Act, parties which provide music to the public without the requisite licence

from COMPASS will be committing an offence and offenders are liable to penalties as set out

under the Copyright Act. We applied for the copyright music licence on 28 April 2016 and our

Group has been issued the necessary copyright music licences from COMPASS for the provision

of music in our restaurants on 9 June 2016 for the duration from 1 May 2016 to 30 April 2017. On

10 May 2016, we also wrote in to notify COMPASS of the provision of music to the public in our

restaurants prior to 1 May 2016 and to seek its understanding regarding any non-compliance of

our Group prior to 1 May 2016. Our Group had on 1 June 2016 received an acknowledgement from

COMPASS for their receipt of our letter dated 10 May 2016 and confirmed that our Group has

obtained the copyright music licences for our restaurants. While we have obtained the licence

from COMPASS, there is no absolute assurance that we will not be imposed with the penalties as

set out in the Copyright Act for our possible past breaches. The Solicitors to the Placement has

RISK FACTORS

30

advised that under the provisions of the Copyright Act, copyright infringement may amount to a

criminal offence and owners of a copyright may also bring civil action for infringement of their

copyrights. In general, a person who does any act that constitutes a wilful infringement of a

copyright and the extent of such infringement is significant and/or the person does the act to

obtain a commercial advantage, the person shall be guilty of an offence and shall be liable to a

fine not exceeding S$20,000 or to imprisonment for a term not exceeding six months or to both.

Further, if such offence was committed with the consent or wilful act of a director, manager,

secretary or similar office of a body corporate, the officer as well as the body corporate is liable

and a fine or a term of imprisonment of up to two years or both may be imposed. Under the

provisions of the Copyright Act, in a civil action for an infringement brought by the owner of the

copyright, the types of relief that the court may grant include injunction, damages, an account of

profits, or statutory damages of not more than S$10,000 for each work but not more than

S$200,000 in the aggregate (unless the plaintiff proves that his actual loss from such infringement

exceeds S$200,000). The Solicitors to the Placement has also advised that the Copyright Act does

not stipulate the minimum or maximum damages our Group may be liable to and however, the

court generally takes the stance that the damages awarded under the Copyright Act in relation to

civil actions are meant to be compensatory.

Our CEO and Executive Chairman, Alan Goh, has provided an indemnity to indemnify our Group

for all claims (both civil, statutory or criminal in nature), fines, penalties, damages, losses,

liabilities, arising from or in connection with the breaches and infringement of copyright or the

relevant provisions of the Copyright Act for providing music to the public for the period prior to

1 May 2016 without obtaining the necessary licence and the indemnity shall be valid and effective

from 20 June 2016 for so long as our Group suffers any loss.

As our Group has taken active steps to inform the relevant authorities on the aforementioned

possible past breaches and has also rectified such matters where possible, our Directors are of

the view that such possible breaches are unlikely to have any grave consequences on the

business operations and financial performance of our Group.

Our Group may be affected by any increase in the rental rates or the failure to renew our

existing leases

All our restaurants are housed in leased properties. For FY2013, FY2014, FY2015, rental

expenses for the restaurants accounted for approximately 22.4%, 23.1%, and 22.7% of our

Group’s total revenue respectively. Majority of our leases are entered for periods of three years.

Upon expiry of such leases, the landlords have the right to review and alter the terms and

conditions of the leases. We face the risk of increases in rental charges or changes in terms and

conditions that may turn unfavourable to us. If there is any increase in the rental charges or

changes in terms and conditions that there are unfavourable to us, our operational expenses may

inevitably increase, and our financial performance may be negatively affected.

We face intense competition and may not be able to maintain our competitiveness

The F&B industry is highly competitive, and barriers of entry are low. We face competition from a

large and diverse group of restaurant chains and individual restaurants in the markets where we

have a presence. Our competitors are well-established in the markets in which we operate and

may have substantially greater financial, marketing and other resources than us. Further, entrance

of new competitors into our markets could affect the business and profitability of our restaurants.

We compete by offering different dining concepts, quality food, competitive pricing, good customer

service and strategic locations for our restaurants. While we endeavour to distinguish our

RISK FACTORS

31

restaurants from those of our competitors, we are aware that there are other restaurants that offer

similar dining concepts and pricing. In the event we are unable to maintain our competitiveness,

our financial performance may be negatively affected.

Our Group may be affected by customer complaints and negative publicity

Negative publicity concerning food quality and hygiene of food served at our restaurants and cafes

or illness concerning food products served by our restaurants and cafes will result in an adverse

impact on our business. Such negative allegations, particularly complaints of illnesses caused by

the consumption of our food, may result in the closure of our restaurants. We may also be the

subject of malicious and groundless rumours which may be quickly transmitted and spread over

social media platforms. Publicised instances of poor food or general hygiene may damage our

reputation, reduce customers’ confidence in our products leading to reduction in patronage of our

restaurants. This may in turn have an adverse impact on our Group’s profitability and financial

performance. As at the Latest Practicable Date, our Group has not encountered any such

incidents that had a material impact on our Group’s operations and financial performance.

Our business may be affected by macroeconomic factors and other factors beyond our

control

Macroeconomic factors, such as general economic conditions, market sentiment and consumer

confidence, may affect our business. Various factors may influence these macroeconomic

conditions, including without limitation, unemployment rates and real disposable income, inflation,

recession, stock market performance, the interest rate environment, the availability of consumer

credit, and regulatory (including fiscal and other governmental policies), social or political change,

all of which are beyond our control. Any adverse macroeconomic conditions may lead customers

to becoming more budget conscious which will result in a decrease in discretionary consumer

spending.

Further, unforeseeable circumstances and other factors such as changes in consumer

preferences, labour disputes, severe weather conditions and natural disasters, may disrupt our

operations and cause loss and damage to our restaurants. Terrorist attacks or other acts of

violence, may also materially and adversely affect the global businesses and general consumer

confidence.

If any of these events occur, our business, operations and financial performance may be

materially and adversely affected.

Our business may be affected by the spread or an outbreak of any contagious or virulent

disease in livestock or food scares

Any outbreak of diseases in livestock, for instance, Avian Influenza or Nipah encephalitis virus,

may lead to a disruption in supply and reduction in the consumption of the affected types of meat

or food by the patrons. Where there is any outbreak of any contagious or virulent disease, for

instance, severe acute respiratory syndrome (SARS), consumer sentiments may be adversely

affected and the willingness of our patrons to dine at our restaurants will reduce. As a

consequence, consumer confidence will drop leading to a decline in the patronage at our

restaurants and thereby materially and adversely affecting our business. As at the Latest

Practicable Date, our Group has not encountered any such incidents that had a material impact

on our Group’s operations and financial performance.

RISK FACTORS

32

We are dependent on key management personnel for our continued success and growth

The expertise of our key management personnel contributes to our success to-date. Our key

management personnel, particularly, our CEO and Executive Chairman, Alan Goh and our

Executive Director, Catherine Tan, each have extensive experience and knowledge of the F&B

industry. Our continued success and growth will depend, to a large extent, on our ability to retain

the services of our Executive Directors. The loss of services of any key management personnel

without suitable and timely replacements may materially and adversely affect our business and

financial performance. Further, in order to attract and/or retain any key management personnel,

we may need to increase employee compensation levels substantially resulting in increase of

costs and thus, affecting our financial performance.

Our Group is exposed to the risk of manpower shortage in the F&B industry in Singapore

Our industry requires large amount of labour, in particular skilled and experienced personnel, for

our operations. There is a supply shortage of qualified individuals with requisite skills in the F&B

industry in Singapore and thus, the competition for these personnel especially skilled master chefs

is intense. Our continued success is dependent on our ability to attract, recruit, motivate and

retain a sufficient number of suitable employees at competitive remuneration. Any material

increase in employee turnover rates in any of our existing restaurants or failure to recruit suitable

personnel and to retain our key employees may have an adverse impact on our operations and

expansion plans. In addition, competition for qualified employees may require us to pay higher

wages to attract and retain sufficient and capable employees. This could result in higher labour

and related expenses and adversely affect our profitability.

In addition, due to the nature of the industries we operate in, we are reliant on foreign workers to

assist in the conduct of our business operations. As at 31 December 2015, we employ a total of

250 foreign workers. There is no guarantee that we will be able to continue attracting foreign

workers at the current level of wages or that our existing foreign workers will continue to be

employed by us. If there is an increase in the competition for foreign workers, in Singapore or

globally, we may be required to increase our wages to attract or retain them. An increase in labour

costs may in turn cause prices of our products and services to increase. If these costs cannot be

passed on to our customers, our financial condition may be materially and adversely affected. In

the event that there is a shortage of foreign or local workers to meet our operational requirements,

we may not be able to fulfil our customers’ demands in a timely manner or our labour costs may

increase. This is likely to lead to an adverse effect on our business, financial condition and

prospects.

We are subject to labour and immigration laws and policies that govern the employment of

foreign workers

Any changes in applicable laws, regulations or policies of Singapore or those of the foreigners’

countries of origin may result in labour shortages and/or increase our operating costs. In

Singapore, the availability of foreign workers is regulated by MOM through policy instruments

such as the imposition of levies and quotas. We are susceptible to any increase in such levies and

any changes in the supply and/or quota of foreign workers that we are permitted to hire and thus,

our labour costs may increase. Further, we may be restricted from hiring more foreign workers and

could face difficulties in procuring alternative sources of foreign workers with the same or lower

costs. If our labour costs increase substantially, our business, operations and financial

performance may be materially and adversely affected.

RISK FACTORS

33

In addition, we are required to comply with the conditions stipulated in work permits issued to our

foreign workers, and may be liable if we contravene such conditions. If we contravene the

conditions stipulated in the work permits issued to our foreign workers, such contravention may

result in a statutory penalty, a curb in our foreign workers’ quota and/or a ban by the MOM on our

applications and renewals of work permits for foreign workers. Such an event may result in the

disruption of our operations and/or an increase in our labour costs, which may materially and

adversely affect our business and financial performance. As at the Latest Practicable Date, our

Group has not encountered any such events that had a material impact on our Group’s operations

and financial performance.

Our business will be adversely affected by the revocation of Halal certification

MUIS may issue a Halal certificate in relation to the operation of restaurants and regulate the

holder of such certificate to ensure that the requirements to maintain the Halal certification issued

to our restaurants are complied with in the operation of that restaurant. As at the Latest

Practicable Date, save for one of our Bali Thai restaurants as disclosed below, our other

restaurants operating under four F&B brands, Bali Thai, So Pho, Streats and Indobox in Singapore

are certified “Halal” by MUIS.

On 4 February 2016, we received a letter from MUIS on a breach of the MUIS Halal Certification

Terms and Conditions in respect of the Bali Thai restaurant at IMM Building due to its kitchen staff

being found to have consumed alcohol and the presence of empty beer cans in the kitchen

storeroom. Pursuant to such breach, MUIS has suspended the Halal certificate for our Bali Thai

restaurant at IMM Building for three months with effect from 2 May 2016 during which we are not

allowed to display or use any Halal-related signages or make any Halal-related claims at the

restaurant. Save as disclosed above, our Group has not received any other suspension by MUIS

in the past. Please refer to the “Government Regulations” section of this Offer Document for

further details.

There can be no assurance that the Halal certification issued to our restaurants will not be revoked

or will be renewed. In the event such Halal certification is revoked or not renewed for a substantial

number of our restaurants, our customer base will be reduced thus resulting in an adverse effect

on our business and financial performance.

Our Group may not be able to secure new strategic locations to expand its business

Our Group’s growth is dependent on its network of restaurants at strategic locations which allows

us to reach out to wide customer bases. Our business development team constantly seeks new

strategic locations for the purposes of our business expansion. However, as the competition for

strategic locations is very high in Singapore, there is no assurance that we will be able to continue

to secure strategic locations for our new restaurants. Any failure to secure strategic locations for

new restaurants may result in the slowdown of future business expansion and may present

opportunities to our competitors to increase their market share, thereby affecting our Group’s

business and financial performance.

In respect of new locations for restaurants secured by our Group, there is no assurance that we

can generate the expected levels of revenue for such new restaurants. Notwithstanding so, our

Group would have to incur the fixed costs and expenses for the setting up and operation of such

restaurants, which will include rentals for the entire duration of the lease term for such premises

and staff costs, regardless of the expected levels of revenue of each new restaurant. This will in

turn negatively affect our Group’s business and financial performance.

RISK FACTORS

34

We face food contamination and tampering risks, and may be exposed to negative publicity,

customer complaints and potential litigation

Food contamination and tampering is a risk inherent to F&B operations. Our business mainly uses

fresh ingredients purchased from various suppliers. Fresh ingredients are perishable and

susceptible to contamination and tampering if not properly stored or packed. They may also be

contaminated during the food preparation process as a result of lapses in food handling hygiene

or cleanliness of our restaurants. Poor food handling and storage can also cause pest infestation.

Such incidents have caused us to incur demerit points for some of our restaurants from time to

time under the system administrated by NEA for regulating food establishments. Contaminated

ingredients may result in customers falling ill and may give rise to bad publicity, and we may be

ordered by the relevant authorities to suspend or cease all or part of our business operations,

which will materially affect our business. As at the Latest Practicable Date, our Group has not

encountered any such incidents that had a material impact on our Group’s financial performance

and operations.

We may also be adversely affected by negative publicity or health concerns about certain food

groups. Further, our restaurants may also be subject to customer complaints regarding food or

service quality. Bad publicity, whether merited or not, may adversely affect our reputation and

business. In the event of legal actions taken by customers, we would have to divert management

resources and expend costs, thereby further affecting our business and financial performance.

There is no assurance that material litigation will not be brought against us in future. Any loss,

liability or expense incurred pursuant to such claims may adversely affect our financial position

and results of operations. As at the Latest Practicable Date, our Group has not encountered any

such events that had a material impact on our Group’s operations and financial performance.

Our business is subject to changes in consumer preferences and consumer spending

The continued growth of our business depends on the popularity of our food, dining experience

and our ability to innovate and adapt to the consumers’ preferences. There is no assurance that

we will be able to anticipate and react quickly and effectively to changes in the consumer trends.

If we fail to do so or if consumers are not receptive to our menus or brands, we may not be able

to compete effectively. Our business is also subject to prevailing economic conditions in

Singapore which may be aggravated by the uncertainties and financial crisis in the global market.

Any adverse changes in Singapore’s economic conditions may in turn affect consumers’

disposable income and consumer spending.

We may be adversely affected by a shortage of ingredients and are susceptible to increases

in the costs of ingredients

We purchase key ingredients such as seafood, meats and vegetables on a daily basis from our

approved suppliers to ensure the freshness of these ingredients. As such, we are highly

dependent on a consistent and sufficient supply of ingredients that meet our quality standards.

Please refer to the “Major Suppliers” section of this Offer Document for more details. If our

suppliers are unable to supply us with sufficient key ingredients which meet our stringent quality

standards, this may result in disruptions to our business and operations which may in turn

materially and adversely affect our business and financial performance.

RISK FACTORS

35

Our business may be negatively affected in the event of an infringement of our intellectual

property rights

We believe that our trademarks have significant value and are an integral part of our

brand-building efforts and the marketing of our restaurants’ concept. Although we have registered

our trademarks, we cannot ensure that our trademarks will not be infringed upon. Any

unauthorised use of our trademarks may harm our Group’s image and seriously impact our

business. If any third party alleges proprietary rights over our trademarks or if we deem necessary

to take action to stop infringement of our trademarks, we may be involved in legal proceedings

brought against us or by us against a third party. These legal proceedings may result in monetary

losses or may prevent us from further using such brands and trademarks. In these circumstances,

there will be a negative impact on our Group’s financial performance.

Our Group may be affected by pilferage, theft and vandalism

A substantial portion of our Group’s sales is on a cash basis and our employees handle the cash

sales on a daily basis. Lapses in internal controls may occur, resulting in pilferage. There is also

a risk of misappropriation of cash in the event of any lapse of cash management or control

measures by our Group. In the event of a material pilferage, theft and vandalism, there will be a

negative impact on our business and financial performance. As at the Latest Practicable Date, our

Group has not encountered any such events that had a material impact on our Group’s operations

and financial performance.

Our insurance coverage may not be adequate

We maintain insurance coverage for our material assets and operations, including all risks

insurance for our properties and insurance for, inter alia, public liability risks. However, we do not

or are not able to obtain insurance in respect of losses arising from certain operating risks such

as acts of terrorism. Please refer to the “Insurance” section of this Offer Document for further

details of our insurance coverage.

Our Group faces uncertainties associated with our future plans

Our Group intends to expand in accordance with our future plans as out in the “Business

Strategies and Future Plans” section of this Offer Document. Our Group’s expansion plans involve

numerous risks, including but not limited to, our ability to secure good locations to operate our new

restaurants, obtaining the relevant licences and/or permits required to operate in our overseas

locations, the financial costs of setting up new restaurants and incurring working capital

requirements. We cannot assure that our future plans will achieve sales that commensurate with

our investment costs, or that we will be successful in securing more customers for our new

restaurants. In the event we do not achieve a sufficient level of revenue, we will not be able to

recover our investment and our future financial performance would be adversely affected.

We are subject to the laws and regulations, economic and political conditions in the PRC

Our Group operates restaurants in PRC and accordingly, we are subject to the laws and

regulations, as well as the risks associated with business operations in PRC. Our business,

operations, financial condition and prospects may be materially and adversely affected by a

variety of factors in the PRC, including but not limited to:

(a) inflation, interest rates and general conditions;

RISK FACTORS

36

(b) civil unrest, military conflict, terrorism, change in political climate and general security

concerns;

(c) changes in legal and regulatory conditions;

(d) import and export criteria;

(e) changes in duties payable and taxation rates;

(f) natural disasters;

(g) imposition of restrictions on foreign currency conversion or the transfer of funds; or

(h) expropriation or nationalisation of private enterprise or confiscation of private property or

assets.

In the event of an adverse development of any of the abovementioned factors and we are unable

to adapt our business strategies or operations accordingly, our business, operations, financial

condition, and prospects may be materially and adversely affected.

RISKS RELATING TO OWNERSHIP OF OUR SHARES

There has been no prior market for our Shares and this offering may not result in an active

or liquid market

Prior to the Placement, there has been no public market for our Shares. Although we have made

an application to the SGX-ST to list our Shares on the Catalist, there is no assurance that an

active trading market for our Shares will develop, or if it develops, be sustained. Active or liquid

markets generally result in lower price volatility and more efficient execution of buy and sell orders

for investors. Liquidity in the market for a particular security is often a function of the volume of

the underlying shares that are publicly held by unrelated parties.

There is also no assurance that the market price for our Shares will not decline below the

Placement Price. The market price of our Shares could be subject to significant fluctuations due

to various external factors and events including the liquidity of our Shares in the market, difference

between our actual financial or operating results and those expected by investors and analysts,

the general market conditions and broad market fluctuations.

Investments in securities quoted on the Catalist involve a higher degree of risk and can be

less liquid than shares quoted on the Mainboard of the SGX-ST

Our application is for our Shares to be admitted to the Catalist, a listing platform primarily

designed for fast growing and emerging or smaller companies. An investment in shares quoted on

the Catalist may carry a higher risk than an investment in shares quoted on the Mainboard of the

SGX-ST. Pursuant to the Listing Manual, our Company will be required, inter alia, to retain a

sponsor at all times after our admission to the Catalist. In particular, unless approved by the

SGX-ST, the Sponsor and Issue Manager must act as our continuing sponsor for at least three

years after our admission to the Catalist.

RISK FACTORS

37

We may require additional funding for our future growth

The net proceeds from the Placement may not be sufficient to fully implement all our business

strategies as set out in the “Business Strategies and Future Plans” section of this Offer Document.

We may also find other opportunities to grow which cannot be predicted at this juncture. Under

such circumstances, we may require additional funding either by way of secondary issue of

securities after the Placement or by way of borrowings to raise the required capital to develop

these growth opportunities. If new Shares placed to new and/or existing Shareholders are issued

after the Placement, they may be priced at a discount to the then prevailing market price of our

Shares trading on the Catalist and existing Shareholders’ equity interest may also be diluted.

If we fail to utilise the new equity to generate a commensurate increase in earnings, our EPS will

be diluted, and this could lead to a decline in our share price. 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, our growth or financial performance

will be adversely affected.

Future sales of Shares could adversely affect the share price

Except as described in this Offer Document, there are no restrictions on the ability of our

Shareholders to sell their Shares. Any future sales or availability of a significant amount of Shares

may exert downward pressure on our share price. The sale of a significant amount of Shares in

the public market after the Placement, or the perception that such sales may occur, could

materially affect the market price of our Shares. These factors may also affect our ability to attract

subscription of additional equity securities in the future.

Investors in our Shares will face immediate and substantial dilution in NTA per Share and

may experience future dilution

Our Placement Price of 21.00 cents per Share is higher than our NTA per Share of 5.20 cents

based on the unaudited pro forma NTA and the post-Placement issued and paid-up share capital

adjusted for the net proceeds from the issue of New Shares. If we were liquidated immediately

following the Placement, each investor subscribing for the New Shares would receive less than

the price he paid for the Shares. Please refer to the “Dilution” section of this Offer Document for

further information.

We may not be able to pay dividends in the future

Our ability to declare dividends to our Shareholders in the future is dependent on, inter alia, our

future financial performance, distributable reserves and cash flows. This may be affected by

numerous factors including but not limited to general economic conditions, market sentiment,

market competition and the success of our future plans and business strategies, many of which

are beyond our control. As such, there is no assurance that we will be able to pay dividends to our

Shareholders.

RISK FACTORS

38

PLACEMENT PRICE 21.00 cents

NTA

NTA per Share based on the unaudited pro forma combined financial

information of our Group as at 31 December 2015:–

(a) before adjusting for the estimated net proceeds from the issue of the

New Shares and based on our Company’s pre-Placement share capital

of 195,721,008 Shares

2.95 cents

(b) after adjusting for the estimated net proceeds from the issue of the New

Shares and based on our Company’s post-Placement share capital of

231,521,008 Shares

5.20 cents

Premium of Placement Price over the pro forma NTA per Share of our Group

as at 31 December 2015:–

(a) before adjusting for the estimated net proceeds from the issue of the

New Shares and based on our Company’s pre-Placement share capital

of 195,721,008 Shares

611.9%

(b) after adjusting for the estimated net proceeds from the issue of the New

Shares and based on our Company’s post-Placement share capital of

231,521,008 Shares

303.8%

EPS

Historical net EPS of our Group for FY2015 based on our Company’s pre-

Placement share capital of 195,721,008 Shares

2.18 cents

Historical net EPS of our Group for FY2015 based on our Company’s pre-

Placement share capital of 195,721,008 Shares, assuming that the Service

Agreements had been in place from the beginning of FY2015

1.78 cents

PER

Historical PER based on the historical net EPS of our Group for FY2015 9.6 times

Historical PER based on the historical net EPS of our Group for FY2015,

assuming that the Service Agreements had been in place from the beginning

of FY2015

11.8 times

Net Cash Flow from Operations(1)

Historical net cash flow from operations per Share for FY2015 based on our

Company’s pre-Placement share capital of 195,721,008 Shares

3.43 cents

Historical net cash flow from operations per Share for FY2015 based on our

Company’s pre-Placement share capital of 195,721,008 Shares, assuming

that the Service Agreements had been in place from the beginning of FY2015

3.03 cents

ISSUE STATISTICS

39

Price to Net Cash Flow from Operations Ratio

Placement Price to historical net cash flow from operations per Share for

FY2015

6.1 times

Placement Price to historical net cash flow from operations per Share for

FY2015, assuming that the Service Agreements had been in place from the

beginning of FY2015

6.9 times

Market Capitalisation

Our market capitalisation based on the Placement Price and our Company’s

post-Placement share capital of 231,521,008 Shares

S$48.6 million

Note:–

(1) Net cash flow from operations is defined as net cash generated from operating activities as referred to in the Audited

Combined Financial Statements set out in Appendix A of this Offer Document.

ISSUE STATISTICS

40

Dilution is the amount by which the Placement Price to be paid by investors for our Placement

Shares (“New Investors”) exceeds the NTA per Share immediately after the Placement. Our

unaudited pro forma NTA per Share as at 31 December 2015 before adjusting for the estimated

net proceeds from the issue of the New Shares and based on our Company’s pre-Placement share

capital of 195,721,008 Shares, was 2.95 cents.

Taking into account the 35,800,000 New Shares at the Placement Price in connection with the

Placement, our NTA per Share after adjusting for the estimated net proceeds from the issue of the

New Shares and based on our Company’s post-Placement share capital of 231,521,008 Shares,

would be 5.20 cents. This represents an immediate increase in NTA per Share of 2.25 cents to our

existing Shareholders and an immediate dilution in NTA per Share of 15.80 cents to our New

Investors.

The following table illustrates such dilution on a per Share basis as at 31 December 2015:–

Cents

Placement Price 21.00

Unaudited pro forma NTA per Share as at 31 December 2015 based on our

Company’s Pre-Placement share capital and before adjusting for the

Placement 2.95

Increase in NTA per Share attributable to existing Shareholders 2.25

NTA per Share after the Placement(1) 5.20

Dilution in NTA per Share to New Investors 15.80

Dilution in NTA per Share to New Investors as a percentage of Placement

Price 75.2%

Note:–

(1) The computed NTA per Share after the Placement does not take into account our actual financial performance from

1 January 2016. Depending on our actual financial results, our NTA per Share after Placement may be higher or

lower than the above computed NTA.

The following table shows the average effective cost per Share paid by our existing Shareholdersfor Shares acquired by them during the period of three years prior to the date of lodgement of thisOffer Document and the price per Share to be paid by our New Investors pursuant to thePlacement:–

Number of Shares

Acquired

Total

Consideration

Average Effective

Cost per Share

(S$) (cents)

Existing Shareholders

Alan Goh(1) 97,860,504 582,503 0.60

Catherine Tan(1) 97,860,504 582,503 0.60

New Investors 35,800,000 7,518,000 21.00

Note:–

(1) Catherine Tan is the spouse of Alan Goh.

Save as disclosed above and in the “Restructuring Exercise” and “Share Capital” sections of this

Offer Document, none of our Directors, Substantial Shareholders or their Associates has acquired

any Shares during the period of three years prior to the date of lodgement of this Offer Document.

DILUTION

41

The following table shows the cash and cash equivalents as well as capitalisation and

indebtedness of our Group as at 31 May 2016:–

(a) based on the unaudited management accounts of our Group as at 31 May 2016; and

(b) as adjusted for the net proceeds from the issue of the New Shares.

You should read this in conjunction with the Audited Combined Financial Statements and the

“Management’s Discussion and Analysis of Results of Operations and Financial Position” section

of this Offer Document.

(S$’000)

As at

31 May 2016

As adjusted for the net

proceeds from the issue

of the New Shares

Cash and cash equivalents 10,739 17,009

Indebtedness

Current

– secured and guaranteed 85 85

– secured and non-guaranteed – –

– unsecured and guaranteed – –

– unsecured and non-guaranteed – –

85 85

Non-current

– secured and guaranteed – –

– secured and non-guaranteed – –

– unsecured and guaranteed – –

– unsecured and non-guaranteed – –

– –

Total indebtedness 85 85

Total shareholders’ equity 16,863 23,133

Total capitalisation and indebtedness 16,948 23,218

There were no material changes in our total capitalisation and indebtedness from 1 January 2016

to the Latest Practicable Date, save for the scheduled monthly repayments of our borrowings and

changes in our retained earnings arising from the day-to-day operations in the ordinary course of

business.

CAPITALISATION AND INDEBTEDNESS

42

Borrowings

Details of our borrowings and indebtedness as at 31 December 2015 are as follows:–

Financial

institution

Type of

facilities

Amount of

facilities

granted

Amount

owing

Amount

unutilised Securities

(S$’000) (S$’000) (S$’000)

United

Overseas Bank

Limited

Commercial

Property Loan

1,015 169 – (a) Mortgage over

1 Sims Lane

#05-05

Singapore

387355

(b) Joint and several

personal

guarantees by

our Executive

Directors

Total 1,015 169 –

As at 31 December 2015, we have total indebtedness of approximately S$169,000 relating to a

bank term loan. The term loan is repayable over 60 monthly instalments commencing 7 November

2011. For FY2015, the bank term loan bears interest of 2.5% per annum over the bank’s three

months SWAP Offer Rate, and the effective interest rate of the term loan is 3.38% per annum. The

term loan is secured by a legal mortgage and pledge over the Group’s freehold property and is

jointly and severally guaranteed by our Executive Directors.

To the best of our Directors’ knowledge, as at the Latest Practicable Date, we are not in breach

of any of the terms and conditions or covenants associated with any credit arrangement or bank

loan which could materially affect our financial position and results or business operations, or the

investments by our Shareholders.

Save as aforesaid and as disclosed in the “Liquidity and Capital Resources” section of this Offer

Document, our Group does not have any material unused sources of liquidity.

Please refer to the “Interested Person Transactions” section of this Offer Document for more

details of the guarantees provided by our Executive Directors and Controlling Shareholders.

CAPITALISATION AND INDEBTEDNESS

43

Our Company was incorporated on 31 March 2016 and has not distributed any cash dividend on

our Shares since incorporation. Our Group has declared and paid dividends of S$2.0 million and

S$2.0 million in FY2013 and FY2014 respectively.

On 30 June 2016, Katrina Singapore declared final tax exempt dividends of an aggregate of

S$10.0 million to the then shareholders, Alan Goh and Catherine Tan. The sum of S$7.0 million

out of S$10.0 million shall be paid within one month from the date of commencement of trading

of our Shares on Catalist and the remaining balance being S$3.0 million will be paid as and when

our Group has available funds provided such payment shall be subject to the approval of our Audit

Committee and Board from time to time taking into consideration the liquidity and financial

commitments of our Group as at the time of the proposed payment. Barring unforeseen

circumstances, the remaining balance of S$3.0 million is intended to be settled by 31 May 2017,

subject to the liquidity and cash flows of our Group at that time.

Save as disclosed above, no dividends have been declared or paid by our Company or

subsidiaries during the periods under review and the period from 1 January 2016 to the Latest

Practicable Date.

We currently do not have a fixed dividend policy. The form, frequency and amount of future

dividends on our Shares will depend on our earnings, financial position, results of operations,

cash flow, capital needs, the terms of the borrowing arrangements (if any), plans for expansion

and other factors which our Directors may deem appropriate (“Dividend Factors”).

Subject to our Constitution 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 Constitution 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 may pay all dividends out of our profits. For information relating to taxes payable on

dividends, please refer to the “Taxation” section in Appendix F of 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.

Subject to the above, our Directors intend to recommend and distribute dividends of not less than

60.0% of our net profits attributable to our Shareholders in respect of FY2016 (“Proposed

Dividend”). However, investors should note that all foregoing statements, including the statements

on the Proposed Dividend, are merely statements of our present intention and do not constitute

a legally binding obligation on the part of our Company in respect of the payment of any dividends,

which may be subject to modification (including any reduction or non-declaration thereof) in our

Directors’ sole and absolute discretion.

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. The form, frequency and amount of future

dividends will depend on the Dividend Factors.

DIVIDEND POLICY

44

The following selected financial information should be read in conjunction with the full text of this

Offer Document, including the Audited Combined Financial Statements set out in Appendix A of

this Offer Document.

Combined Statements of Comprehensive Income(1)

Audited

(S$’000) FY2013 FY2014 FY2015

Revenue 40,700 45,410 52,443

Cost of sales (33,223) (36,933) (43,612)

Gross profit 7,477 8,477 8,831

Other income 435 444 579

Selling and distribution costs (1,273) (1,086) (1,391)

Administrative expenses (2,258) (2,359) (2,878)

Interest expense (43) (11) (9)

Other expenses – (1,296) (16)


Income tax expense (637) (877) (854)

Profit for the year, representing profit

attributable to owners of the Company 3,701 3,292 4,262

Other comprehensive income:

Foreign currency translation 53 (57) 6

Total comprehensive income for the year,

representing total comprehensive income to

the owners of the Company 3,754 3,235 4,268

EPS (cents)(2)(4) 1.89 1.68 2.18

EPS (as adjusted for the Placement) (cents)(3)(4) 1.60 1.42 1.84

Notes:–

(1) Our combined statements of comprehensive income for the periods under review have been prepared on the basis

that our Group had been in existence throughout the periods under review.

(2) EPS is computed based on the net profit attributable to owners of the Company divided by the pre-Placement share

capital of 195,721,008 Shares.

(3) EPS (as adjusted for the Placement) is computed based on the net profit attributable to owners of the Company

divided by the post-Placement share capital of 231,521,008 Shares.

(4) Had the Service Agreements been in place with effect from 1 January 2015, the PAT for FY2015 would have been

approximately S$3.5 million, and the EPS and EPS (as adjusted for the Placement) would be 1.78 cents and 1.51

cents, respectively.

SUMMARY OF OUR FINANCIAL INFORMATION

45

Combined Statements of Financial Position(1)

Audited Unaudited

(S$’000)

As at

31 December

2014

As at

31 December

2015

Pro Forma

As at

31 December

2015

Assets

Non-current assets

Property, plant and equipment 6,789 7,347 7,347

Intangible assets 2 2 2

Refundable deposits 2,885 3,511 3,511

Deferred tax assets – 5 5

Total non-current assets 9,676 10,865 10,865

Current assets

Trade receivables 251 242 242

Other receivables 223 418 418


Prepayments 124 342 342

Amount due from director 162 – –

Fixed deposits pledged 265 – –

Cash and cash equivalents 7,124 10,290 10,290(2)

Total current assets 9,564 12,618 12,618

Total assets 19,240 23,483 23,483

Equity and liabilities

Current liabilities

Trade and other payables 3,808 4,257 4,257

Other liabilities 517 996 996

Provision 207 300 300

Amount due to director 1,000 – –

Dividends payable – – 10,000

Loans and borrowings 203 169 169

Provision for taxation 1,003 1,019 1,019

Total current liabilities 6,738 6,741 16,741

Net current assets/(liabilities) 2,826 5,877 (4,123)

Non-current liabilities

Loans and borrowings 169 – –

Other payables 211 384 384

Provision 605 583 583

Deferred tax liabilities 10 – –

Total non-current liabilities 995 967 967

Total liabilities 7,733 7,708 17,708

Net assets 11,507 15,775 5,775


46

Audited Unaudited

(S$’000)

As at

31 December

2014

As at

31 December

2015

Pro Forma

As at

31 December

2015

Equity attributable to the owners of

the Company

Share capital 1,771 1,771 1,771

Other reserves (6) – –

Retained earnings 9,742 14,004 4,004

Total equity 11,507 15,775 5,775

Total equity and liabilities 19,240 23,483 23,483

NTA per Share (cents)(3) 5.88 8.06 2.95

Notes:–

(1) Our combined statements of financial position as at 31 December 2014 and 31 December 2015 have been prepared

on the basis that our Group has been in existence on the respective dates.

(2) The amount of S$10,290,000 has not taken into account the declaration of an aggregate of S$10.0 million of final

dividends.

(3) The NTA per Share as at 31 December 2014 and 31 December 2015 has been computed based on our

pre-Placement share capital of 195,721,008 Shares.

Basis of preparation of the Unaudited Pro Forma Combined Financial Information as

included in Appendix B of this Offer Document

The Unaudited Pro Forma Combined Financial Information of the Group has been prepared for

illustrative purposes only, and is based on the assumption and after making certain adjustments

to illustrate the impact of the declaration of an aggregate of S$10.0 million of final tax exempt

dividends in respect of FY2015 by our subsidiary on the Group’s combined statement of financial

position as at 31 December 2015.

The Unaudited Pro Forma Combined Financial Information has been compiled from the combined

statement of financial position as at 31 December 2015 as extracted by management from the

Audited Combined Financial Statements which have been included in Appendix A of this Offer

Document.

No unaudited pro forma combined statement of comprehensive income and combined statement

of cash flows have been presented as the pro forma adjustments arising from the declaration of

final tax exempt dividends does not impact the statement of comprehensive income and statement

of cash flow.


47

The following discussion of our results of operations and financial position has been prepared by

our management and should be read in conjunction with the Audited Combined Financial

Statements. 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 “Risk Factors” section 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 Sponsor, Issue Manager, and 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 “Cautionary Note Regarding

Forward-Looking Statements” section of this Offer Document.

Except as otherwise indicated, the following discussion is based on our Audited Combined

Financial Statements which have been prepared in accordance with the Singapore Financial

Reporting Standards.

OVERVIEW

As at the Latest Practicable Date, we operate a chain of 34 restaurants; 32 in Singapore and two

in the PRC under our own nine proprietary brands. We provide catering services from one of our

restaurants, Bali Thai at West Mall. In addition, we have established our central kitchen facility

within two of our restaurants, namely So Pho at Serangoon NEX and Streats at One KM, that

prepares and distributes sauces and chilli pastes to our restaurants for consistency in our food

quality. In December 2015, we launched our customised online ordering and delivery services for

three eatery chains operating under the brands, Bali Thai, So Pho and Streats in Singapore to

further reach out to our customers.

Please refer to the “Business Overview” section of this Offer Document for further details.

Revenue

Our revenue is derived from the sale of F&B items through our chain of restaurants and is

recognised upon the delivery of the food items to our customers. Revenue is denominated in S$

or RMB in the countries which we operate, with payments mainly on cash terms (including credit

card and electronic payments) on completion of the sale of the F&B items.

Our revenue is primarily affected by, inter alia, the following factors:

(a) the number of restaurants we operate and our ability to source and secure strategic locations

for our restaurants;

(b) our ability to compete successfully with our competitors in terms of food varieties, quality of

food, services, pricing as well as brand image;

(c) negative publicity (genuine or otherwise) concerning quality and hygiene of food served at

our restaurants or other operational issues relating to our restaurants;

MANAGEMENT’S DISCUSSION AND ANALYSIS OFRESULTS OF OPERATIONS AND FINANCIAL POSITION

48

(d) changes in macroeconomic factors in the countries which we operate, which may affect the

sentiments of consumers, consumers’ disposable income and their level of discretionary

spending;

(e) our ability to continually keep up with changing consumers’ tastes and preferences; and

(f) outbreak of any contagious or virulent disease in livestock or food scares.

Please refer to the “Risk Factors” and “Trend Information” sections of this Offer Document for

further information on the above factors and other factors that may affect our revenue.

A breakdown of our revenue by geographical segments for the periods under review is as follows:

FY2013 FY2014 FY2015

(S$’000) % (S$’000) % (S$’000) %

Singapore 38,165 93.8 42,404 93.4 50,056 95.4

PRC 2,535 6.2 3,006 6.6 2,387 4.6

Total 40,700 100.0 45,410 100.0 52,443 100.0

Cost of sales

Our cost of sales accounted for 81.6%, 81.3% and 83.2% of revenue in FY2013, FY2014 and

FY2015, respectively. Cost of sales as a proportion of revenue remained relatively consistent for

the periods under review.

The key components of cost of sales are salaries and employee benefits, cost of beverages and

food ingredients, rental and other expenses.

Salaries and employee benefits cover CPF contributions or national pension schemes as defined

by the laws of the countries in which we have operations, allowances, bonuses, foreign workers’

levy, staff training, staff incentives, staff welfare and other labour-related expenses have been

consistent for the periods under review. It accounted for 33.0%, 33.4% and 35.7% of our cost of

sales for FY2013, FY2014 and FY2015, respectively.

Another key contributor to our cost of sales is the cost of beverages and food ingredients required

for the preparation of the food items sold at our restaurants (such as soup base, noodles,

vegetables, meats, seafood, sauces, liquor and beverages). Cost of beverages and food

ingredients accounted for 25.5%, 25.7% and 24.5% of our cost of sales for FY2013, FY2014 and

FY2015, respectively.

Rental expenses for our restaurants accounted for 27.4%, 28.5% and 27.3% of our cost of sales

for FY2013, FY2014 and FY2015, respectively.

Other expenses are primarily depreciation of furniture and fittings, renovation, kitchen and

restaurant equipment, utilities, and other operating expenses. These costs accounted for 14.1%,

12.4% and 12.5% of our cost of sales for FY2013, FY2014 and FY2015, respectively.


49

Our cost of sales may be affected by, inter alia, the following factors:

(a) our ability to obtain favourable pricing from our suppliers and availability of food ingredients;

(b) our ability to control and reduce food wastage;

(c) an increase in prices of food ingredients generally (which may in turn be affected by outbreak

of diseases in livestock, food scares, adverse changes in climate, natural disasters, oil prices

or other circumstances that may affect global food supply and demand);

(d) our ability to retain and recruit employees at competitive remuneration;

(e) changes in government policies and regulations relating to foreign workers such as foreign

workers levy and the permitted dependency ratio of local to foreign workers in our industry;

(f) availability and cost of recruiting contract, temporary and/or part-time workers; and

(g) our ability to negotiate for favourable rental terms for our restaurants and the central kitchen

facility.

Please refer to the “Risk Factors” section of this Offer Document for other factors that may affect

our cost of sales. Please also refer to the “Properties and Fixed Assets” section of this Offer

Document for details of our rental terms.

Other income

Other income comprises mainly (i) government grants and incentives relating to, inter alia,

Capability Development Grant, Special Employment Credit and Wage Credit Scheme, staff

training grants from the Workforce Development Agency, grants from SPRING Singapore; and

(ii) one-off proceeds of S$45,000 from transfer of “Greyhound Café” trademark. Please refer to the

“Material Contracts” section of this Offer Document.

Selling and distribution costs

Selling and distribution costs comprise (i) marketing, advertising and promotion,

(ii) entertainment, (iii) sales discount allowed, (iv) credit cards and electronic payments charges;

and (v) transportation and upkeep of motor vehicles. Selling and distribution costs accounted for

35.6%, 22.9% and 32.4% of our total operating expenses for FY2013, FY2014 and FY2015,

respectively.

Administrative expenses

Administrative expenses comprise (i) salaries (including CPF contributions and bonuses) of our

administrative staff, (ii) directors’ remuneration, (iii) depreciation of our corporate office fixed

assets, (iv) office and general maintenance expenses, (v) professional fees; and (vi) other

expenses. Our administrative expenses accounted for 63.2%, 49.6% and 67.0% of our total

operating expenses for FY2013, FY2014, and FY2015, respectively.


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Interest expense

Interest expense is related to a term loan to finance the purchase of our freehold property at

1 Sims Lane #05-05 Singapore 387355, which is our corporate office, and is secured by a legal

mortgage and pledge over the freehold property and is jointly and severally guaranteed by our

CEO and Executive Chairman, Alan Goh and our Executive Director, Catherine Tan. Our interest

expense accounted for 1.2%, 0.2% and 0.2% of our total operating expenses for FY2013, FY2014,

and FY2015, respectively.

Other expenses

Other expense is a one-off bad debt due from Shanghai Katrina Restaurants Co., Ltd. written off

in FY2014 as a result of losses incurred by the subsidiary which was voluntarily liquidated and

de-registered by its shareholder as the restaurant in Shanghai was not doing well and was

incurring loss. The subsidiary was approved by Shanghai governmental authority to be closed in

February 2015 and was de-registered in May 2015. Our other expenses accounted for 0%, 27.3%

and 0.4% of our total operating expenses for FY2013, FY2014 and FY2015, respectively. Please

refer to the “Interested Person Transactions” section of this Offer Document for further

information.

Income tax expense

Our Company and our subsidiaries are subject to income tax at the applicable tax rates of 17.0%

in Singapore and 25.0% in the PRC. Our effective tax rates were approximately 14.7%, 21.0% and

16.7% in FY2013, FY2014 and FY2015, respectively. Effective tax rate in FY2014 was higher than

the statutory tax rates mainly due to non-deductible expenses. Effective tax rates in FY2013 and

FY2015 were lower than the statutory tax rate mainly due to certain tax exemptions in the

respective tax years.

REVIEW OF PAST OPERATING PERFORMANCE

FY2014 vs FY2013

Revenue

Revenue increased by 11.5% or S$4.7 million from S$40.7 million in FY2013 to S$45.4 million in

FY2014. The increase in revenue was mainly attributed to the net addition of four restaurants

between 31 December 2013 and 31 December 2014, bringing the total number of restaurants to

31. In FY2014, we opened five new restaurants and closed one restaurant in Singapore. We also

received revenue from the full year sales registered by our two overseas’ restaurants opened in

March 2013 and May 2013, respectively.

Cost of sales

Cost of sales increased by 11.1% or S$3.7 million from S$33.2 million in FY2013 to S$36.9 million

in FY2014. The increase in cost of sales was in line with the increase in revenue.


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Gross profit

Gross profit increased by 13.3% or S$1.0 million from S$7.5 million in FY2013 to S$8.5 million in

FY2014. The gross profit margin remained relatively consistent at 18.7% of revenue in FY2014 as

compared to 18.4% in FY2013.

Other income

Other income comprises mainly government grants and incentives including Capability

Development Grant, Special Employment Credit and Wage Credit Scheme. Other income

remained the same at S$0.4 million for FY2013 and FY2014.


Selling and distribution cost decreased by 15.4% or S$0.2 million from S$1.3 million in FY2013 to

S$1.1 million in FY2014. The decrease was mainly due to a drop in our sales discount allowed by

S$0.1 million as we ceased a promotion campaign in FY2014 and the absence of a one-off

branding expense incurred and recognised in FY2013.


Administrative expenses increased by 4.3% or S$0.1 million from S$2.3 million in FY2013 to

S$2.4 million in FY2014 mainly due to the professional fees incurred for consultancy services to

improve our marketing system and staff training.

Other expenses

Other expenses of S$1.3 million was a one-off bad debts from Shanghai Katrina Restaurants Co.,

Ltd. as a result of losses incurred by the subsidiary which was voluntarily liquidated and

de-registered by its shareholder as the restaurant in Shanghai was not doing well and was

incurring loss. The subsidiary was approved by Shanghai governmental authority to be closed in

February 2015 and was de-registered in May 2015. Please refer to the “Interested Person

Transactions” section of this Offer Document for further information.

Income tax expense

Income tax expense increased by 50.0% or S$0.3 million from S$0.6 million in FY2013 to S$0.9

million in FY2014 due to higher profit and non-deductible expenses relating to the aforesaid

one-off bad debt due from a subsidiary written off in FY2014.

Net profit

As a result of the above, our net profit attributable to shareholders declined by 10.8% or S$0.4

million from S$3.7 million in FY2013 to S$3.3 million in FY2014.


52

FY2014 vs FY2015

Revenue

Revenue increased by 15.4% or S$7.0 million from S$45.4 million in FY2014 to S$52.4 million in

FY2015. The increase in revenue was mainly attributed to the net addition of one restaurant

between 31 December 2014 and 31 December 2015, bringing the total number of restaurants to

32. In FY2015, we opened five new restaurants and closed four restaurants. We also received

revenue from the full year sales registered by the five restaurants opened in FY2014 (one

restaurant in January 2014, two restaurants in October 2014 and two restaurants in November

2014).

Cost of sales

Cost of sales increased by 18.2% or S$6.7 million from S$36.9 million in FY2014 to S$43.6 million

in FY2015. The increase in cost of sales was in line with the increase in revenue and increase in

operations and restaurants staff costs.

Gross profit

Gross profit increased by 3.5% or S$0.3 million from S$8.5 million in FY2014 to S$8.8 million in

FY2015. Gross profit margin declined slightly from 18.7% in FY2014 to 16.8% in FY2015 primarily

due to the increase in the operations and restaurants staff costs.

Other income

Other income comprises mainly government grants and incentives including Special Employment

Credit and Wage Credit Scheme. Other income increased by 50.0% or S$0.2 million from S$0.4

million in FY2014 to S$0.6 million in FY2015 mainly due to increase in government grants from the

Wage Credit Scheme, Temporary Employment Credit and Special Employment Credit.


Selling and distribution cost increased by 27.3% or S$0.3 million from S$1.1 million in FY2014 to

S$1.4 million in FY2015. The increase was mainly due to an increase in sales discount allowed

arising from new restaurants opened in FY2015, namely So Pho cafe at Novena Square, So Pho

cafe at Parkway Parade, Streats Cafe at Serangoon NEX and Streats Cafe at Resorts World

Sentosa, which was in line with the increase in revenue, as well as one-for-one beer and wine

promotions at our restaurants at Clarke Quay and Plaza Singapura. There was also an increase

in credit card and electronic payments charges as a result of the increase in revenue in FY2015.


Administrative expenses increased by 20.8% or S$0.5 million from S$2.4 million in FY2014 to

S$2.9 million in FY2015. The increase was mainly due to an increase in administrative staff costs

and professional fees incurred in connection with the initial public offering.


53

Other expenses

Other expenses decreased by 100.0% or S$1.3 million from S$1.3 million in FY2014 to nil in

FY2015. The decrease was due to a one-off bad debts written-off due from Shanghai Katrina

Restaurants Co., Ltd. as a result of losses incurred by the subsidiary which was voluntarily

liquidated and de-registered by its shareholder as the restaurant in Shanghai was not doing well

and was incurring loss. The subsidiary was approved by Shanghai governmental authority to be

closed in February 2015 and was de-registered in May 2015. Please refer to the “Interested

Person Transactions” section of this Offer Document for further information.

Income tax expense

Income tax expense remained consistent at S$0.9 million for FY2014 and FY2015.

Net profit

As a result of the above, our net profit attributable to shareholders increased by 30.3% or S$1.0

million from S$3.3 million in FY2014 to S$4.3 million in FY2015.

REVIEW OF PAST FINANCIAL POSITION

A review of the financial position of our Group as at 31 December 2014 and 31 December 2015

are set out below:

Non-current assets

Non-current assets are property, plant and equipment, intangible assets, refundable deposits and

deferred taxation, which amounted to S$9.7 million and S$10.9 million and accounted for 50.5%

and 46.4% of our total assets as at 31 December 2014 and 31 December 2015, respectively.

Property, plant and equipment, comprising computer, freehold property, furniture and fittings,

motor vehicle, office, kitchen and restaurant equipment and renovation amounted to S$6.8 million

and S$7.4 million and accounted for 35.4% and 31.5% of our total assets as at 31 December 2014

and 31 December 2015, respectively. The increase in property, plant and equipment is due mainly

to renovation of premises, additions to office, kitchen and restaurant equipment and furniture and

fittings for new restaurants for So Pho and Streats.

The non-current portion of refundable deposits, amounting to S$2.9 million and S$3.5 million

which accounted for 15.1% and 14.9% of our total assets as at 31 December 2014 and

31 December 2015, respectively. The non-current portion of refundable deposits is related to

rental deposits with the landlords for the leases of our restaurants which are due more than one

year and recoverable upon the expiry of the lease tenure.

Current assets

Current assets comprise trade receivables, other receivables, refundable deposits, prepayments,

amounts due from director, fixed deposits pledged and cash and cash equivalents, which

amounted to S$9.6 million and S$12.6 million, accounting for 49.5% and 53.6% of our total assets

as at 31 December 2014 and 31 December 2015, respectively.


54

Trade receivables amounted to S$0.3 million and S$0.2 million and accounted for 1.6% and 0.9%

of our total assets as at 31 December 2014 and 31 December 2015, respectively. Trade

receivables are related to amounts receivable from credit card companies for our customers’

payments via credit cards or direct debit from bank accounts.

Other receivables amounted to S$0.2 million and S$0.4 million and accounted for 1.0% and 1.7%

of our total assets as at 31 December 2014 and 31 December 2015, respectively. Other

receivables are mainly related to grants receivables from Wage Credit Scheme and Special

Employment Credit.

The current portion of refundable deposits, amounting to S$1.4 million and S$1.3 million which

accounted for 7.3% and 5.5% of our total assets as at 31 December 2014 and 31 December 2015,

respectively. The current portion of refundable deposits mainly relates to rental deposits placed

with the landlords for the leases of our restaurants which are due within one year and recoverable

upon the expiry of the lease tenure.

Prepayments amounted to S$0.1 million and S$0.4 million and accounted for 0.5% and 1.7% of

our total assets as at 31 December 2014 and 31 December 2015, respectively. Prepayments are

primarily advance payments for rental space for our restaurants, renovations and purchase of

kitchen and restaurant equipment for two of our new restaurants, Bali Thai Waterway Point and

So Pho Waterway Point, which are capitalised upon completion of the renovations.

Amount due from director amounted to S$0.1 million and accounted for 0.5% of our total assets

as at 31 December 2014. This balance relates to advances provided by our Group to a director.

There was no amount due from director as at 31 December 2015.

Fixed deposits pledged amounted to S$0.3 million and accounted for 1.6% of our total assets as

at 31 December 2014. There were no fixed deposits pledged as at 31 December 2015.

Cash and cash equivalents, comprising cash and bank balances, amounted to S$7.1 million and

S$10.3 million, accounting for 37.0% and 43.8% of our total assets as at 31 December 2014 and

31 December 2015, respectively.

Current liabilities

Current liabilities comprise trade and other payables, other liabilities, provision, amount due to

director, loans and borrowings and provision for taxation, amounting to S$6.7 million and S$6.7

million and accounted for 87.0% and 87.0% of our total liabilities as at 31 December 2014 and


Trade and other payables, comprise staff costs payables, trade payables, GST payable, other

payables and deferred rental payables, amounted to S$3.8 million and S$4.2 million and

accounted for 49.4% and 54.5% of our total liabilities as at 31 December 2014 and 31 December

2015, respectively. The increase in trade and other payables were mainly due to increase in staff

costs payables and trade payables.

Staff costs payables and trade payables are the two main components of trade and other

payables, which amounted to S$2.5 million and S$3.1 million and accounted for 65.8% and 73.8%

of trade and other payables as at 31 December 2014 and 31 December 2015, respectively. The


55

increase in both staff costs payables and trade payables were primarily due to new restaurants for

So Pho and Streats opened in FY2015, which resulted in an increase in employee head counts

and the increase is in line with the increase in revenue.

Other liabilities, comprising accrued operating expenses which include accrued bonus, advances

received from customers and accrued unconsumed leave, amounted to S$0.5 million and S$1.0

million and accounted for 6.5% and 13.0% of our total liabilities as at 31 December 2014 and


The current portion of provision comprises provision for restoration costs, which relates to the

estimated costs of reinstating our leased premises to their original state upon lease expiry,

amounted to S$0.2 million and S$0.3 million, which accounted for 2.6% and 3.9% of our total

liabilities as at 31 December 2014 and 31 December 2015, respectively.

Amount due to director amounted to S$1.0 million and accounted for 13.0% of our total liabilities

as at 31 December 2014. Amount due to director is related to dividend declared. There was no

amount due to director as at 31 December 2015.

The current portion of loans and borrowings to finance the acquisition of our corporate office at

1 Sims Lane #05-05 Singapore 387355 amounted to S$0.2 million as at 31 December 2014 and

31 December 2015 and accounted for 2.6% of our total liabilities as at 31 December 2014 and

31 December 2015, respectively. Please refer to the “Capitalisation and Indebtedness” section of

this Offer Document for further information on our banking facilities.

Provision for taxation amounted to S$1.0 million for FY2014 and FY2015, representing 13.0% of

our total liabilities as at 31 December 2014 and 31 December 2015, respectively.


Non-current liabilities comprise loans and borrowings, other payables, provision, and deferred

taxation, which amounted to S$1.0 million for FY2014 and FY2015, representing 13.0% of our

total liabilities as at 31 December 2014 and 31 December 2015, respectively. The non-current

portion of loans and borrowings is to finance the purchase of our corporate office at 1 Sims Lane

#05-05 Singapore 387355 amounted to S$0.2 million and 2.6% of our total liabilities as at 31

December 2014. There was no non-current portion of bank borrowing as at 31 December 2015.

Please refer to the “Capitalisation and Indebtedness” section of this Offer Document for further

information on our banking facilities.

The non-current portion of other payables, comprises the non-current portion of deferred rental

payables, amounted to S$0.2 million and S$0.4 million and accounted for 2.6% and 5.2% of our

total liabilities as at 31 December 2014 and 31 December 2015, respectively.

The non-current portion of provision comprises the non-current portion of provision for restoration

costs, which relates to the estimated costs of reinstating our leased premises to their original state

upon lease expiry and amounted to S$0.6 million for FY2014 and FY2015, representing 7.9% and

7.8% of our total liabilities as at 31 December 2014 and 31 December 2015, respectively.


56

Total Equity

Total equity amounted to S$11.5 million and S$15.8 million as at 31 December 2014 and


Reconciliation of audited and unaudited pro forma combined statements of financial

position as at 31 December 2015

Non-current assets

Based on the unaudited pro forma combined statement of financial position as at 31 December

2015, no adjustments were made to our non-current assets.

Current assets


2015, no adjustments were made to our current assets.

Current liabilities

Based on the unaudited pro forma combined statement of financial position, our Group’s current

liabilities amounted to S$16.7 million as at 31 December 2015, representing an increase of S$10.0

million. The net increase of S$10.0 million was amount due to director, as a result of the

declaration of final dividends by our subsidiary, being dividend payable to Alan Goh and Catherine

Tan.



2015, no adjustments were made to our non-current liabilities.

Total equity

Based on the unaudited pro forma combined statement of financial position, our Group’s total

equity amounted to S$5.8 million as at 31 December 2015, representing a net decrease of S$10.0

million. The net decrease of S$10.0 million was due to decrease in retained earnings as a result

of the declaration of final dividends by our subsidiary.

LIQUIDITY AND CAPITAL RESOURCES

Our Group has nil gearing ratio for FY2013, FY2014 and FY2015, respectively. We financed our

growth and operations through a combination of shareholders’ equity (share capital and retained

profits) and net cash generated from operating activities with minimal bank borrowings. Our

principal uses of cash have been for working capital requirements and to fund our capital

investment in property, plant and equipment as we expand our network of restaurants in

Singapore and overseas.

As at 31 December 2014, we had cash and cash equivalents of approximately S$7.1 million and

net current assets of S$2.8 million. Our shareholders’ equity amounted to S$11.5 million and our

total borrowings amounted to S$0.4 million (comprising a bank term loan).


57

As at 31 December 2015, we had cash and cash equivalents of approximately S$10.3 million and

net current assets of S$5.9 million. Our shareholders’ equity amounted to S$15.8 million and our

total borrowings amounted to S$0.2 million (comprising a bank term loan).

Based on our unaudited pro forma combined statement of financial position as at 31 December

2015, we would have been in a net current liabilities position of S$4.1 million which arose mainly

due to the declaration of the final dividends of S$10.0 million.

Please refer to the “Review of Financial Position” section of this Offer Document for more

information.

In assessing whether our Group has sufficient working capital (taking into consideration the

declaration and payment of the final dividends), our Directors have considered the following:

(i) based on the unaudited pro forma combined statement of financial position as at

31 December 2015, our Group had cash and cash equivalents of approximately S$10.3

million. As at the Latest Practicable Date, our Group had cash and cash equivalents of

approximately S$9.1 million and our total borrowings amounted to S$0.1 million (comprising

a bank term loan).

(ii) our Group had generated positive operating cash flows in FY2013, FY2014 and FY2015

amounting to S$6.0 million, S$5.8 million and S$6.7 million, respectively;

(iii) our Group’s sales transactions are substantially conducted on a cash basis (including credit

card and electronic payments, which we typically receive from the banks within seven days

from the transaction date). In comparison, our Group’s suppliers generally extend credit

terms of 30 to 45 days to our Group;

(iv) our Group presently does not rely on banking facilities for our working capital requirements

except for a banking facility taken during the periods under review, by way of a term loan for

the purchase of our freehold property which is used as part of our corporate headquarters

and will be fully repaid by November 2016. As at the end of FY2013, FY2014 and FY2015,

our Group’s loans and borrowings amounted to S$0.6 million, S$0.4 million and S$0.2

million, respectively, and our gearing ratio (defined as net debt divided by total capital plus

net debt) was nil as at each of the respective dates;

(v) going forward, in considering the level of dividend payments, our Group will take into account

various factors, such as our expected working capital requirements to support our future

growth, financial position, cash flows and investment plans. Please refer to the “Dividend

Policy” section of this Offer Document for further details; and

(vi) our Group’s future plans as set out in the “Business Strategies and Future Plans” section of

this Offer Document will be partially funded by net proceeds from the Placement and the

extent and timing of the future plans may be managed and based on the amount raised from

the Placement.


58

Our Directors are of the reasonable opinion that, as at the date of lodgement of this Offer

Document, after taking into consideration our present cash position and cash generated from our

operations, 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 and Issue Manager is of the reasonable opinion, that after having made due and

careful enquiry and after taking into account the cash flows generated from our Group’s operations

and existing cash and cash equivalents, the working capital available to our Group as at the date

of lodgement of this Offer Document is sufficient for present requirements and for at least 12

months after the listing of our Company on Catalist.

We set out below a summary of our Group’s net cash flows for FY2013, FY2014 and FY2015. The

following net cash flow summary should be read in conjunction with the full text of this Offer

Document, including the Audited Combined Financial Statements set out in Appendix A of this

Offer Document.

Audited

FY2013 FY2014 FY2015

S$’000 S$’000 S$’000

Net cash generated from operating activities 5,994 5,777 6,713

Net cash used in investing activities (3,938) (2,039) (2,772)

Net cash used in financing activities (3,011) (1,623) (776)

Net (decrease)/increase in cash and bank

balances (955) 2,115 3,165

Effects of exchange rate changes on cash and

cash equivalents 18 5 1

Cash and cash equivalents at the beginning of

the financial year 5,941 5,004 7,124

Cash and cash equivalents at the end of the

financial year 5,004 7,124 10,290

FY2013

Net cash generated from operating activities

In FY2013, we generated net cash from operating activities of S$6.0 million. This was a result of

operating cash flow before working capital changes of S$5.6 million and working capital inflows

of S$1.2 million, partially offset by income taxes paid and interest paid of S$0.8 million. The net

working capital inflows were due to inflows from changes in trade and other payables,

prepayments, trade and other receivables and other liabilities by S$0.9 million, S$0.3 million,

S$0.2 million and S$0.2 million, respectively. The net working capital inflows were partially offset

by outflows from changes in refundable deposits by S$0.4 million.


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Net cash used in investing activities

In FY2013, net cash used in investing activities amounted to S$3.9 million were used to purchase

plant and equipment for our restaurants.

Net cash from financing activities

In FY2013, our net cash used in financing activities of S$3.0 million was primarily dividends paid

of S$2.0 million, settlement of amount due to directors of S$1.3 million (net of dividend and

advances), repayment of loans and borrowings of S$0.2 million, and partially offset by proceeds

from increase of share capital to a subsidiary accounted for on common control basis, amounting

to S$0.3 million and decrease in fixed deposit pledged of S$0.2 million.

FY2014


In FY2014, net cash generated from operating activities was S$5.8 million. This was a result of

operating cash flow before working capital changes of S$7.0 million, partially offset by working

capital outflows of S$0.6 million, income taxes paid and interest paid totalling S$0.6 million. The

net working capital outflows were due to outflows from changes in refundable deposits and trade

and other receivables by S$0.8 million and S$0.5 million, respectively. The net working capital

outflows were partially offset by inflows from changes in trade and other payables and other

liabilities by S$0.6 million and S$0.1 million, respectively.


In FY2014, net cash used in investing activities amounted to S$2.0 million were used to purchase

plant and equipment for our restaurants.


In FY2014, our net cash used in financing activities of S$1.6 million was due to dividends paid of

S$2.0 million, repayment of loans and borrowings of S$0.2 million and partially offset by an

increase in amounts due to directors of S$0.5 million and decrease in fixed deposits pledged of

S$0.1 million.

FY2015


In FY2015, we generated net cash from operating activities of S$6.7 million. This was a result of

operating cash flow before working capital changes of S$7.4 million and working capital inflows

of S$0.2 million, partially offset by income taxes and interest paid totalling S$0.9 million. The net

working capital inflows were due to inflows from changes in trade and other payables and other

liabilities by S$0.6 million and S$0.5 million, respectively. The net working capital inflows were

partially offset by outflows from changes in refundable deposits, prepayments, trade and other

receivables by S$0.5 million, S$0.2 million and S$0.2 million, respectively.


60


In FY2015, our net cash used in investing activities amounted to S$2.8 million due mainly to the

purchases of plant and equipment for our restaurants.


In FY2015, our net cash used in financing activities of S$0.7 million was due to net repayment of

amount due to directors of S$0.8 million and repayment of loans and borrowings of S$0.2 million,

partially offset by decrease in fixed deposit pledged of S$0.3 million.

CAPITAL EXPENDITURES, DIVESTMENTS, COMMITMENTS AND CONTINGENT LIABILITIES

Capital Expenditures and Divestments

Capital expenditures and divestments made by us during the periods under review and for the

period from 1 January 2016 to the Latest Practicable Date were as follows:

Additions(1)

FY2013 FY2014 FY2015

1 January 2016

to the Latest

Practicable Date

S$’000 S$’000 S$’000 S$’000

Computers 149 100 124 51

Furniture and fittings 256 114 175 175

Kitchen and restaurant

equipment 665 457 429 130

Office equipment 1 – – 1

Renovation(3) 3,067 1,426 2,115 715

Total 4,138 2,097 2,843 1,072

Disposals(2)

FY2013 FY2014 FY2015

1 January 2016

to the Latest

Practicable Date

S$’000 S$’000 S$’000 S$’000

Computers – – 1 14

Furniture and fitting 8 4 21 1

Kitchen and restaurant

equipment 5 7 36 5

Renovation(3) 50 22 263 22

Total 63 33 321 42


61

Notes:

(1) This relates to the cost of plant and equipment acquired during the respective financial years/periods.

(2) This relates to the net book value of plant and equipment disposed of during the respective financial years/periods.

(3) This amount includes provision for restoration costs.

The above capital expenditures were funded by internally generated funds.

Capital Commitments

As at the Latest Practicable Date, there is no material capital or investment commitment.

Operating lease commitment

As at 31 December 2015 and Latest Practicable Date, we have operating lease payment

commitments as follows:

As at

31 December 2015

S$’000

As at Latest

Practicable Date

S$’000

No later than one year 11,861 11,604

Later than one year but not later than five years 12,960 13,523

24,821 25,127

Our operating lease commitments relate to rentals and service charges payable to the landlords

of the premises of our restaurants.

We intend to finance the payments of the operating lease commitments by internally generated

funds.

Contingent liabilities

As at the Latest Practicable Date, we do not have any material contingent liabilities.

SEASONALITY

Our business is not subject to any seasonal fluctuations although generally we experience higher

sales during festive seasons and school holidays.

INFLATION

Our operation and performance has not been materially affected by inflation during the periods

under review.


62

FOREIGN EXCHANGE MANAGEMENT

Accounting treatment of foreign currencies

The accounting records for the companies within our Group will be maintained in their respective

functional currencies of S$ and RMB, reflecting the primary economic environment in which the

respective entities operate. The combined balance sheets of our Group are presented in S$, which

is the functional currency of our Group and the presentation currency for the combined balance

sheets.

Transactions in currencies other than each entity’s functional currency are measured and

recorded in the functional currency at exchange rates approximating those ruling at the

transactions dates. At the end of each reporting period, monetary items denominated in foreign

currencies are translated at the rates prevailing at the end of the reporting period. Non-monetary

items that are measured in terms of historical cost in a foreign currency are translated using the

exchange rates as at the dates of the initial transactions.

Exchange differences arising on the settlement of monetary items, and on translation of monetary

items at the end of reporting period are recognised in profit or loss for the period. For FY2013, our

Group recorded an exchange loss of S$8,000 and an exchange gain of S$36,000 for FY2014.

There was no exchange gain or loss for FY2015.

For the purpose of presenting combined financial statements, the assets and liabilities of our

Group’s foreign operations are expressed in S$ using exchange rates prevailing at the end of the

reporting period. Income and expense items are translated at the average exchange rates for the

period. Exchange differences arising, if any, are recognised in other comprehensive income and

accumulated in a separate component of equity under foreign currency translation reserve.

Foreign currency exposure

Our reporting currency is in S$ and our operations are carried out in Singapore and overseas.

The percentage of our revenue, cost of sales and expenses denominated in the different

currencies for the periods under review were as follows:

Percentage of revenue denominated in

FY2013 FY2014 FY2015

(%) (%) (%)

S$ 93.8 93.4 95.4

RMB 6.2 6.6 4.6

100.0 100.0 100.0


63

Percentage of cost of sales denominated in

FY2013 FY2014 FY2015

(%) (%) (%)

S$ 92.7 92.5 94.5

RMB 7.3 7.5 5.5

100.0 100.0 100.0

Percentage of expenses denominated in

FY2013 FY2014 FY2015

(%) (%) (%)

S$ 90.4 97.3 95.3

RMB 9.6 2.7 4.7

100.0 100.0 100.0

At present, we do not have a formal policy for hedging against foreign exchange exposure. We will

continue to monitor our foreign exchange exposure and may employ hedging instruments to

manage our foreign exchange exposure should the need arise. Should we enter into any hedging

transaction in the future, such transaction shall be subject to the review of our Board. In addition,

should we establish any formal hedging policy in the future, such policy shall be subject to the

review and approval by our Board prior to implementation. Our Audit Committee will review

periodically the hedging policies, all types of instruments used for hedging as well as the foreign

exchange policies and practices of our Group.

SIGNIFICANT ACCOUNTING POLICY CHANGE

There has been no significant change in the accounting policies of our Group in the periods under

review.

Please refer to the Audited Combined Financial Statements set out in Appendix A of this Offer

Document for details of our Group’s accounting policies.


64

SHARE CAPITAL

Our Company was incorporated in Singapore on 31 March 2016 under the Companies Act as a

private company limited by shares under the name of “Katrina Group Pte. Ltd.”. On 9 July 2016,

our Company was converted into a public company limited by shares and our name was changed

to “Katrina Group Ltd.”.

As at the date of incorporation, the issued and paid-up share capital of our Company was S$2

comprising two Shares held by Alan Goh (one Share) and Catherine Tan (one Share).

Our then Shareholders have approved at an extraordinary general meeting, inter alia, the

following:–

(a) the allotment and issue of 1,165,004 Shares in the share capital of our Company pursuant

to the Restructuring Exercise;

(b) the sub-division of 1,165,006 Shares in the issued and paid-up capital of our Company into

195,721,008 Shares;

(c) the conversion of our Company into a public company limited by shares;

(d) the adoption of a new set of Constitution;

(e) the issue of the New Shares pursuant to the Placement, which when allotted, issued and fully

paid, will rank pari passu in all respects with the existing issued Shares;

(f) the approval of the listing and quotation of all the New Shares to be allotted and issued

pursuant to the Placement on Catalist; and

(g) the authorisation for our Directors, pursuant to Section 161 of the Companies Act and the

Catalist Rules to: (a)(i) issue (in addition to the New Shares) Shares whether by way of

rights, bonus or otherwise; and/or (ii) make or grant offers, agreements or options

(collectively “Instruments”) that might or would require Shares to be issued, including but not

limited to the creation and issue of (as well as adjustments to) options, warrants, debentures

or other instruments convertible into Shares, at any time and upon such terms and conditions

and for such purposes and to such persons as the Directors may in their absolute discretion

deem fit; and (b) (notwithstanding this authorisation conferred may have ceased to be in

force) issue Shares in pursuance of any Instruments made or granted by the Directors while

this authorisation was in force, provided that:–

(1) the aggregate number of Shares (including Shares to be issued in pursuance of the

Instruments, made or granted pursuant to this authorisation) and Instruments to be

issued pursuant to this authorisation shall not exceed 100% of the total number of

issued Shares (excluding treasury shares) in the capital of the Company (as calculated

in accordance with sub-paragraph (2) below), of which the aggregate number of Shares

to be issued (including Shares to be issued pursuant to the Instruments) other than on

a pro rata basis to existing Shareholders shall not exceed 50% of the total number of

issued Shares (excluding treasury shares) in the capital of the Company (as calculated

in accordance with sub-paragraph (2) below);


65

(2) (subject to such calculation as may be prescribed by the SGX-ST) for the purpose of

determining the aggregate number of Shares (including Shares to be issued pursuant

to the Instruments) that may be issued under sub-paragraph (1) above, the percentage

of Shares that may be issued shall be based on the post-Placement issued Share

capital of our Company (excluding treasury shares), after adjusting for: (a) new Shares

arising from the conversion or exercise of the Instruments or any convertible securities;

(b) new Shares arising from exercising share options or vesting of share awards

outstanding and subsisting at the time of the passing of this authority; and (c) any

subsequent bonus issue, consolidation or subdivision of Shares; and

(3) unless revoked or varied by the Company in a general meeting, such authority shall

continue in force until (i) the conclusion of the next annual general meeting of the

Company or (ii) the date by which the next annual general meeting of the Company is

required by law to be held, whichever is earlier.

As at the date of this Offer Document, our Company has only one class of shares, being ordinary

shares. The rights and privileges of our Shares are stated in our Constitution. There is no founder,

management or deferred shares. No person has been, or is entitled to be, given an option to

subscribe for or purchase any securities of our Company or our subsidiaries.

As at the Latest Practicable Date, the issued and paid-up capital of our Company is S$2


As at the date of this Offer Document, the issued and paid-up share capital of our Company is

S$1,165,006 comprising 195,721,008 Shares. Upon the allotment and issue of the New Shares

which are the subject of the Placement, the resultant issued and paid-up share capital of our

Company will be S$8,683,006 comprising 231,521,008 Shares.

Details of the changes in the issued and paid-up share capital of our Company since incorporation

and immediately after the Placement are as follows:–

Number of

Shares

Resultant

Issued and Paid-up

Share Capital

(S$)

Issued and paid-up Shares as at our incorporation 2 2

Issue of Shares pursuant to the Restructuring

Exercise 1,165,004 1,165,006

Sub-division 195,721,008 1,165,006

Pre-Placement issued and paid-up share capital 195,721,008 1,165,006

Issue of New Shares pursuant to the Placement 35,800,000 7,518,000(1)

Post-Placement issued and paid-up share capital 231,521,008 8,683,006

Notes:–

(1) Based on the gross proceeds from the issue of the New Shares pursuant to the Placement, before taking into

account the capitalisation of approximately S$0.4 million being a portion of the listing expenses incurred in relation

to the Placement. After taking into account such capitalisation, the adjusted resultant share capital will be S$7.1

million.


66

The Shareholders’ equity of our Company as at the date of incorporation (being 31 March 2016),

as adjusted for the Restructuring Exercise, and final dividend declared by our subsidiary and after

the Placement is set out below:–

As at the date

of incorporation

After adjusting for

the Restructuring

Exercise

After the

Placement

(S$’000) (S$’000) (S$’000)

Shareholders’ equity

Share capital *(1) 1,165 8,268(2)

Accumulated profits – 4,004 3,171

Total Shareholders’ equity *(1) 5,169 11,439

Note:

(1) * means less than S$1,000.

(2) This takes into account a portion of the listing expenses incurred in relation to the Placement of approximately S$0.4

million being capitalised against share capital.

RESTRUCTURING EXERCISE

We undertook the following Restructuring Exercise to streamline and rationalise our Group

structure in connection with the Placement:–

(a) Incorporation of our Company

Our Company was incorporated in Singapore on 31 March 2016 under the Companies Act as

a private limited company by shares with an issued and paid-up share capital of S$2


(b) Acquisition of Katrina Singapore by our Company

Pursuant to a restructuring agreement dated 30 June 2016 (the “Restructuring Agreement”)

entered in between our Company and the then shareholders of Katrina Singapore, namely,

Alan Goh (50%) and Catherine Tan (50%), our Company acquired the entire issued and

paid-up share capital of Katrina Singapore for a consideration of S$1,165,004 which was

determined based on the amount of issued and paid-up capital of Katrina Singapore as at the

date of the Restructuring Agreement. The consideration was satisfied by the allotment and

issue of 1,165,004 new Shares (before the Sub-division) credited as fully paid, by our

Company to the then shareholders of Katrina Singapore as follows:–

Name

Number of

Shares Consideration

(S$)

Alan Goh 582,502 582,502

Catherine Tan 582,502 582,502

Total 1,165,004 1,165,004


67

Upon the completion of the Restructuring Agreement, Katrina Singapore became our

wholly-owned subsidiary.

The resultant shareholding in our Company (after taking into account the two subscriber

shares held by Alan Goh and Catherine Tan) before the Sub-division was as follows:

Name

Number of

Shares Shareholding

(%)

Alan Goh 582,503 50.0

Catherine Tan 582,503 50.0

Total 1,165,006 100.0

(c) Sub-division

On 11 July 2016, 1,165,006 Shares in the capital of our Company were sub-divided into

195,721,008 Shares.

Following the completion of the Sub-division, the shareholders of our Company were as

follows:–

Name

Number of

Shares Shareholdings

(%)

Alan Goh 97,860,504 50.0

Catherine Tan 97,860,504 50.0

Total 195,721,008 100.0

GROUP STRUCTURE

Our Group structure as at the date of this Offer Document is as follows:–

Katrina Singapore(1)

Renn Thai

Bayang at

the Quay

Pte. Ltd.

Bali Thai

Food

Catering

Pte. Ltd.

Beijing

BaliThai(2)

100%100%

100%

100%100%

Company

Katrina

Online Pte.

Ltd.

100%

Katrina

Holdings

Sdn. Bhd.(3)

100%


68

Notes:

(1) Katrina Singapore wholly owns the following businesses as the sole-proprietor:

(a) Indobox Cafe

(b) Muchos Mexican Bar & Restaurant

(c) So Pho Viet Cafe

(d) Streats Hong Kong Cafe

The above businesses are currently dormant. These businesses were registered merely to protect the

respective restaurant brands, whereas the restaurant operations under such restaurant brands are

conducted by Katrina Singapore. We have subsequently applied for the relevant trademark registrations to

protect our intellectual property rights under these restaurant brands and we intend to de-register these

businesses after completion of the trademark registration. Please refer to the “Intellectual Property” section

of this Offer Document for more information on our trademark applications.

(2) Beijing BaliThai wholly owns a branch in Beijing, PRC. Prior to 1 January 2016, the entire equity interest in

Beijing BaliThai was held on trust by Katrina Singapore in favour of Alan Goh and Catherine Tan equally. On

1 January 2016, Katrina Singapore acquired the entire equity interest in Beijing BaliThai from Alan Goh and

Catherine Tan. Accordingly, the aforesaid trust arrangement was revoked. Please refer to the “Interested

Person Transaction” section of this Offer Document for more information.

(3) The entire equity interest of Katrina Holdings Sdn. Bhd. is held on trust by Alan Goh and Catherine Tan in

favour of Katrina Singapore since incorporation of Katrina Holdings Sdn. Bhd.

OUR SUBSIDIARIES

The details of our subsidiaries as at the date of this Offer Document are as follows:–

Name

Date and

Place of

Incorporation

Principal

Place of

Business

Principal

Activity

Issued and

Paid-up

Share Capital

Equity

Interest

Held by

Our Group

Katrina

Singapore(1)

29 June 1995

Singapore

Singapore Restaurant

management and

operations

S$1,165,004 100%

Bayang at the

Quay Pte. Ltd.

19 January 2000

Singapore


management and

operations

S$180,000 100%

Renn Thai 19 December

2000

Singapore


management and

operations

S$164,000 100%

Beijing BaliThai(2) 11 September

2009

PRC

PRC Restaurant

management

RMB3,000,000 100%

Bali Thai Food

Catering Pte. Ltd.

28 August 2002

Singapore

Singapore Catering S$2 100%

Katrina Online

Pte. Ltd.

15 April 2016

Singapore

Singapore Online ordering

and food delivery

S$1 100%

Katrina Holdings

Sdn. Bhd.(3)

17 June 2016

Malaysia

Malaysia Restaurant

management

RM100 100%


69

None of our subsidiaries is listed on any stock exchange. We do not have any associated

companies.

Notes:

(1) Please refer to footnote (1) of the “Group Structure” section of this Offer Document for more information.



Our Group had several past subsidiaries, save for Lulu Restaurant Pte. Ltd., which were

incorporated in Singapore mainly to operate food stalls in food courts, and these past subsidiaries

were subsequently de-registered following the phasing out of food stalls as disclosed in the

“History” section of this Offer Document. In respect of Lulu Restaurant Pte. Ltd., it was operating

a restaurant offering Shanghainese cuisine in Raffles City, Singapore, which was closed after its

initial lease had expired as that restaurant business could not be sustained due to the proposed

increase of the rental for the premises by its landlord.

SHAREHOLDERS

Our Shareholders and their respective shareholdings immediately before and after the Placement

are set out below:–

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

Alan Goh(1)(2) 97,860,504 50.0 97,860,504 50.0 97,860,504 42.3 97,860,504 42.3

Catherine Tan(1)(2) 97,860,504 50.0 97,860,504 50.0 97,860,504 42.3 97,860,504 42.3

Goh Shen Shu

Donovan(2) – – – – – – – –

Ang Miah Khiang – – – – – – – –

Chow Wen Kwan – – – – – – – –

Eric Low Siak Meng – – – – – – – –

Others

Shareholders

holding less than 5%

Public – – – – 35,800,000 15.4 – –

Total 195,721,008 100.0 231,521,008 100.0

Notes:–


(2) Goh Shen Shu Donovan is the son of Alan Goh and Catherine Tan.

Save as disclosed above, there are no other relationships among our Directors and Substantial

Shareholders.


70

The Shares held by our Directors and Substantial Shareholders do not carry different voting rights

from the New Shares which are the subject of the Placement.

Save as disclosed above, our Company is not directly or indirectly owned or controlled, whether

severally or jointly, by any person or government.

There is no known arrangement, the operation of which may, at a subsequent date, result in a

change in the control of our Company.

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 2015 and the Latest Practicable Date.

Significant Changes in the Percentage of Ownership

Save as disclosed in the “Restructuring Exercise” section of this Offer Document, there were no

significant changes in the percentage of ownership of the shares in our Company since 31 March

2016, being the date of incorporation of our Company and up to the Latest Practicable Date.

MORATORIUM

Our Controlling Shareholders, namely Alan Goh and Catherine Tan, who hold an aggregate of

195,721,008 Shares (representing 84.6% of our Company’s issued share capital after the

Placement), have each undertaken not to, directly or indirectly, 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 respective shareholdings in the share capital of our

Company immediately after the Placement (adjusted for any bonus issue or sub-division of

Shares) for a period of six months commencing from the date of admission of our Company to

Catalist, and for a period of six months thereafter, not to, directly or indirectly, sell, contract to sell,

offer, realise, transfer, assign, pledge, grant any option to purchase, grant any security over,

encumber or otherwise dispose of, more than 50% of their respective original shareholdings in our

Company.


71

OUR HISTORY

Katrina Singapore was incorporated in Singapore in June 1995, and founded by Alan Goh together

with his wife, Catherine Tan.

In the mid-nineties, Alan Goh and Catherine Tan started our F&B business by operating food stalls

mainly under “Katrina Nasi Padang”, which served Indonesian and/or Malay cuisine in different

food courts in Singapore to leverage on the popularity of air-conditioned food courts emerging in

Singapore. Within few years, we were operating many food stalls in various food courts across

Singapore.

In the early 2000, due to the restrictions imposed on food stall licences and limited potential

growth of food stalls, we shifted focus to developing restaurant businesses under our own

proprietary brands and concepts. As we ventured into the restaurant business and started

developing our own proprietary brands for different F&B concepts, we began to phase out and

subsequently ceased our food stall business.

The following sets out the history and development of our restaurant businesses under our own

proprietary brands:

Bali Thai: Indonesian and Thai cuisine

Around 1997, demands for restaurant spaces in Singapore were generally higher in the east and

in the city. Thus, rental prices for restaurant spaces in the west were generally lower at that time.

We leveraged on this opportunity to introduce our first restaurant brand business, Bali Thai, and

started the first Bali Thai restaurant in West Mall, located in the west of Singapore in 1998.

Despite the Asian financial crisis in late nineties, Bali Thai performed well. Between 1998 and

2003, we opened two more Bali Thai restaurants, one in IMM Building and another in Tampines

Mall. Within a year from December 2006, two more Bali Thai restaurants were opened near the

central business district of Singapore, in Novena Square and Suntec City Mall.

During mid-2009, we brought the Bali Thai concept to Beijing, PRC by opening our first overseas

restaurant in Raffles City Beijing.

In 2011, we opened two more Bali Thai restaurants, one in the east region in 112 Katong and

another in the northeast region in Serangoon NEX.

Between 2012 and 2013, we opened two more Bali Thai restaurants in Beijing, PRC. In October

2014, we completed the acquisition of the entire equity interest in Shanghai Katrina Restaurants

Co., Ltd. (“Shanghai Katrina”) from our CEO and Executive Chairman, Alan Goh, at a

consideration of RMB1.0 million, following which Shanghai Katrina became a wholly-owned

subsidiary of Katrina Singapore. Please refer to the “Interested Person Transactions” section of

this Offer Document for more information. At the time of acquisition, Shanghai Katrina operated

one Bali Thai restaurant in Shanghai, which ceased operations in December 2014. One of the

restaurants in Beijing was also closed in December 2014 due to pre-mature termination of the

lease by the management of the mall. We have taken legal actions against the mall and have

received the damages awarded to us, hence there is no adverse impact to our Group’s operations

and financial performance. Please refer to the “Litigation” section of this Offer Document for more

information. The remaining two Bali Thai restaurants in Beijing, PRC are wholly-owned and

managed directly by us.

BUSINESS

72

In addition to the overseas restaurants, we also opened three more Bali Thai restaurants in

Singapore from 2013 to 2014, one of which is located at Resorts World Sentosa. In January 2016,

we further opened one more Bali Thai restaurant in the northeast region in Punggol.

RENNthai: Thai cuisine

In December 2000, Renn Thai, a wholly-owned subsidiary of Katrina Singapore, was incorporated

as a step to venture into the upmarket dining fare. In 2001, Renn Thai opened its first restaurant

under the brand “RENNthai” in Ngee Ann City. Due to a series of unforeseen events namely, the

terrorist attacks on the New York World Trade Centre in September 2001, Bali bombing and the

SARS epidemic which resulted in a sharp decline of tourists, RENNthai at Ngee Ann City was

closed. In December 2004, the RENNthai restaurant was set up in Clarke Quay, where its

business grew.

Bayang: Indonesian cuisine

With our continuing focus on introducing new brands and developing existing brands for

restaurants concepts, we developed a new brand of “Bayang” to target for the higher end of

restaurant patrons. Bayang is an Indonesian/Balinese concept restaurant which has been

operating since May 2006.

Streats: Hong Kong Cafe

In November 2006, we developed a new chain of cafes under the F&B brand, Streats. The first

Streats cafe is located in IMM Building. In the next three years, one Streats cafe is opened each

year. In October 2014, we opened one more Streats cafe in One KM. Between June 2015 and July

2015, we further opened two more Streats cafes in Resorts World Sentosa and Serangoon NEX.

Honguo (紅鍋): Yunnan cuisine

In December 2007, we developed our first chain of Chinese restaurants under the brand known

as Honguo, whose signature dish is the Yunnan “Cross Bridge Vermicelli” (過橋米線). Honguo was

created to cater to the increasing number of affluent immigrant Chinese office workers and

students from the PRC. We set up the first restaurant operating under the name of Honguo in

Bugis Junction. In December 2010, we set up another Honguo restaurant in Serangoon NEX and

in December 2012, we opened another Honguo restaurant in Chinatown Point which ceased

operations in December 2015.

Hutong (胡同): Northern Chinese cuisine

In April 2008, we introduced an additional upmarket brand under the name of Hutong to cater to

the Chinese expatriates and tourists in Singapore. This restaurant sits along the Singapore River

in Clarke Quay, offering a contemporary twist on traditional northern Chinese cuisine.

Muchos: Mexican cuisine

In 2010, we developed our first non-Asian brand under the name of Muchos. Muchos is a Mexican

bar and restaurant. We set up the first Muchos restaurant in Clarke Quay in February 2010. Two

years later, we opened another Muchos restaurant in Plaza Singapura to attract the younger

crowds in the city.

BUSINESS

73

So Pho: Vietnamese Cuisine

In 2013, we developed and introduced our first Vietnamese brand under the name of So Pho. The

first So Pho cafe was opened in JEM in June 2013. Between 2013 and 2015, we opened five more

So Pho cafes. In January 2016, we further opened one more So Pho cafe in the northeast region

in Waterway Point, Punggol.

Indobox: Indonesian Cuisine

In 2013, we also developed a new Indonesian brand under the name of Indobox. We set up our

first Indobox cafe in JEM in June 2013. Four months later, we opened another Indobox cafe in ION

Orchard.

We also established our central kitchen facility within two of our restaurants, namely Streats at

One KM and So Pho at Serangoon NEX. The central kitchen facility prepares and distributes

sauces and chilli pastes, for instance, assam paste, belachan and Thai chilli sauce to all our

restaurants. This central kitchen helps to ensure consistency in our food quality and also increase

efficiency and productivity in our restaurants.

In December 2015, we launched our online food ordering and delivery services for three eatery

chains operating under the brands Bali Thai, So Pho and Streats. Under this online food ordering

system, consumers are able to enjoy their desired food simply by visiting our website to place an

order and make payment online. We have plans to expand our online food ordering and delivery

services to all our nine F&B brands in 2016. Please refer to the “Business Strategies and Future

Plans” section of this Offer Document for more details.

Awards and Accolades

We have received the following awards and accolades in recognition of our achievements:

Year Awards and Accolades Brands Awarded by

2002 Singapore’s Best Restaurant Bali Thai Singapore Tatler, Gourmet Guide

2002 Singapore’s Best Restaurant RENNthai Singapore Tatler, Gourmet Guide





2008 Wine & Dine – Singapore’s

Top Restaurants

Bayang The Lexicon Group Limited


Top Restaurants

Bali Thai The Lexicon Group Limited


Top Restaurants

RENNthai The Lexicon Group Limited

2010 Enterprise 50 Award Katrina Singapore Enterprise 50 Association

2011 Singapore Service

Star Award

Streats Singapore Tourism Board

BUSINESS

74

Year Awards and Accolades Brands Awarded by


Star Award

RENNthai Singapore Tourism Board


Star Award

Bayang Singapore Tourism Board


Star Award

Hutong Singapore Tourism Board


Star Award

Honguo Singapore Tourism Board

2012 Enterprise 50 Award Katrina Singapore Enterprise 50 Association

2013 Certificate of Excellence in

Singapore for Brand

Strategy in Marketing

Excellence Awards

Bali Thai Marketing Magazine

2014 Bronze Singapore

HEALTH Award

Katrina Singapore Singapore Health Promotion

Board

2015 Singapore’s Top Restaurant Indobox Wine & Dine Experience Pte Ltd

2015 Singapore’s Top Restaurant Bali Thai Wine & Dine Experience Pte Ltd

2015 Singapore’s Top Restaurant Hutong Wine & Dine Experience Pte Ltd

2015 Singapore’s Top Restaurant Muchos Wine & Dine Experience Pte Ltd

2015 Singapore’s Top Restaurant RENNthai Wine & Dine Experience Pte Ltd

BUSINESS OVERVIEW

We are an operator of chains of restaurants and cafes under different F&B brands and concepts.

Our Group owns and operates restaurants under nine different F&B brands that are developed

and owned by us as at the Latest Practicable Date. Each brand provides different dining options

in order to cater to a wider spectrum of patrons and different market segments.

Each of our brands serves authentic cuisines of different ethnicity, namely Indonesian, Thai, Hong

Kong, Yunnan, northern Chinese cuisine, Mexican and Vietnamese. In addition, each brand is

accompanied by tailored décor and designs in our restaurants and cafes in order to provide

patrons with comfortable ambience. Amongst our nine own proprietary brands, restaurants under

four of our own proprietary brands namely Bali Thai, So Pho, Streats and Indobox, are certified

“Halal” in Singapore, save for the Bali Thai restaurant at IMM Building as disclosed in the

“Government Regulations” section of this Offer Document.

Our restaurants are located in Singapore and overseas. Within Singapore, our casual dining

brands are generally located in the heartlands of Singapore, such as Jurong East and Tampines.

Meanwhile, the contemporary upmarket brands are located within the central business district

vicinity of Singapore. We also operate restaurants outside Singapore, currently located in Beijing,

PRC. In the PRC, our Group owns and operates two Bali Thai restaurants. Food served in our Bali

Thai restaurants in the PRC has been tailored and fine-tuned to suit the tastes of the local

consumers in the PRC. We have identified certain locations within Malaysia, Vietnam and

Indonesia for our overseas expansion. Please refer to the “Business Strategies and Future Plans”

section of this Offer Document for more details.

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As at the Latest Practicable Date, our Group owns and operates 32 restaurants in Singapore and

two restaurants in the PRC under our nine own proprietary F&B brands. In addition, we provide

catering services from one of our restaurants in Singapore for various private and corporate

events.

Online Food Ordering and Delivery Services

In seeking the opportunity to reach out to increasing needs of consumers ordering food online and

requiring food delivery services, we have launched our own customised online food ordering and

delivery system which allows customers to place orders and make payments directly on our

website without going through a third party application or system. Following the placing of orders

and payment online, customers may elect to collect their orders from their desired restaurant or

to request food delivery to their doorstep. Through this online food ordering and delivery system,

consumers have easier access to enjoyment of food served by our restaurants as the system

allows consumers to have a cashless transaction by making direct payment to us via our website.

Our F&B Concepts

Our brands can be classified into two distinct restaurant concepts, as follows:

Casual Dining

Bali Thai

Bali Thai is the first restaurant brand that our Company developed on its own. Bali Thai is a

concept of housing two cuisines under one roof. Unlike fusion restaurants where different cuisines

are merged into totally new dishes, Bali Thai offers perennial favourites of both Indonesian and

Thai cuisines.

Bali Thai serves popular delights from Thailand and Bali, Indonesia including the famous “Crispy

Whole Fish with Thai Chilli Sauce”, “Combi Bakar” and “Tauhu Telur”. All Bali Thai restaurants are

designed to be casual and modern with the intention to offer a cosy ambience to the patrons. In

Beijing, food served in our Bali Thai restaurants are fine-tuned to suit the tastes of the local

Chinese market.

All our Bali Thai restaurants in Singapore are certified “Halal” by MUIS, save for the Bali Thai

restaurant at IMM Building as disclosed in the “Government Regulations” section of this Offer

Document. As at the Latest Practicable Date, we have nine Bali Thai restaurants in Singapore and

two in Beijing, PRC.

Streats

The concept of Streats is that of a “cha chan teng”, also known as Hong Kong cafe in Chinese.

Food in Streats cafe are served in relatively small portions to retain its Hong Kong origins. Streats

cafe serves Hong Kong specialities including the “Hot Coke with Ginger” and other contemporary

Hong Kong snacks, such as “Pumpkin Fries with Salted Egg Yolk Batter” and “Hong Kong Shrimp

Dumpling Noodles (Soup)”. The layout of our Streats cafe follows closely that of a “cha chan teng”

which is casual and simple to create friendly and comfortable atmosphere for people of all ages.

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All our Streats cafes are certified “Halal” in order to stand out amongst the plentiful Hong Kong

cafes in Singapore. With the addition of the “Halal” certification, Streats cafe is able to

accommodate the Malay-Muslim community, which traditionally has limited options for Chinese

cuisines.

As at the Latest Practicable Date, we have seven Streats cafes. Barring unforeseen

circumstances, we plan to open four more Streats cafes, three in Singapore and one in Malaysia

in the next 12 months.

Honguo (紅鍋)

Honguo means red pot in Chinese. Honguo’s signature dish is the “Cross Bridge Vermicelli” (過橋米線), which is one of the best-known dishes of Yunnan, a province in southwestern PRC. This

famous dish is served in a large bowl containing piping hot soup boiled for hours with duck,

chicken and pork. The large bowl is accompanied by a bowl of noodles and at least nine other

ingredients including mushroom, prawns, quail eggs, ham, vegetables and others. All our Honguo

restaurants are decorated with paintings and posters of interesting places, people and things in

Yunnan to complement the authentic Yunnan dish and to provide a taste of the Yunnan

experience.

As at the Latest Practicable Date, there are two Honguo restaurants in Singapore.

So Pho

“Pho”, pronounced as “fur”, means noodle soup in Vietnamese which is a famous street food in

Vietnam. Beyond just noodle soup and other authentic Vietnamese cuisine, the concept offers

popular Vietnamese street food in casual and contemporary settings at reasonable prices.

Our So Pho cafes are decorated in simplicity with neutral colours of white and black furnishing.

The white lanterns and the bursts of greenery spread across the restaurants provide a casual,

bright and comfortable ambience.

All our So Pho cafes are certified “Halal” by MUIS. As at the Latest Practicable Date, there are

seven So Pho cafes in Singapore. Barring unforeseen circumstances, we plan to open two more

So Pho cafes, one in Singapore and one in Malaysia in the next 12 months.

Indobox

Indobox serves a wide range of authentic Indonesian cuisines. The Indobox cafes are decorated

with natural wood finishes with warm lighting giving the cafes a calm and classy layout. All our

Indobox restaurants are certified “Halal”.

As at the Latest Practicable Date, there are two Indobox cafes in Singapore.

Contemporary Upmarket

RENNthai

RENNthai serves traditional Thai cuisine. RENNthai has both indoor and outdoor seating which

offers two separate dining experiences under one roof. Its warm interior is furnished with exotic

embellishments, while the alfresco area offers the waterfront view.

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As at the Latest Practicable Date, there is one RENNthai restaurant in Singapore.

Bayang

The term “Bayang” means shadow in Indonesian language. This is illustrated by the restaurant’s

warm-Balinese décor that features inlays inspired by traditional Balinese shadow puppets. Our

Bayang restaurant serves authentic Balinese favourites like “Bebek Betutu” (baked duck in

banana leaves). Bayang’s chefs are hired from Indonesia to ensure authenticity of its cuisine.

As at the Latest Practicable Date, there is one Bayang restaurant in Singapore.

Muchos

Muchos Mexican Bar and Restaurant caters classic Mexican dishes. There are two Muchos

restaurants, one in Clarke Quay that caters to expatriates and tourists, while the other in Plaza

Singapura which has more street food selections to cater to different target segments of the

market.

As at the Latest Practicable Date, there are two Muchos restaurants in Singapore.

Hutong (胡同)

Hutong means back alley in Chinese. Hutong offers traditional northern Chinese cuisine, while its

décor is based on element of the traditional Chinese culture. The restaurant is intended to exude

the charm of old China, with antique dark-wooded screens and tables, billowing Chinese silk

drapes and red lanterns creating a sentimental vibe of reminiscence of the beauty and ancient

Beijing. Despite the traditional and ancient décor of Hutong, the restaurant offers a contemporary

twist on traditional northern Chinese cuisines.

As at the Latest Practicable Date, there is one Hutong restaurant in Singapore.

The following table summarises the types of cuisine and location for each of our Group’s

restaurants as at the Latest Practicable Date:

F&B brand Type of food Location of restaurants and cafes

Bali Thai Indonesian and Thai

cuisine

1. 112 Katong, East Coast Road

2. Causeway Point, Woodlands

3. IMM Building, Jurong East

4. NEX, Serangoon

5. Resorts World Sentosa,

Sentosa Gateway

6. Suntec City Mall, Temasek Boulevard

7. West Mall, Bukit Batok

8. The Seletar Mall, Sengkang

9. Waterway Point, Punggol

10. Gemdale Plaza Chaoyang District,

Beijing, PRC

11. Raffles City, Dongcheng District,

Beijing, PRC

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F&B brand Type of food Location of restaurants and cafes

Streats Contemporary Hong Kong

cuisine

1. IMM Building, Jurong East

2. NEX, Serangoon

3. Bukit Panjang Plaza, Bukit Panjang

4. City Square Mall, Kitchener Road

5. E!Hub Downtown East, Pasir Ris

6. One KM, Tanjong Katong Road

7. Resorts World Sentosa (Asian Cafe),

Sentosa Gateway

Honguo (紅鍋) Specialities from Yunnan 1. Bugis Junction, Victoria Street

2. NEX, Serangoon

So Pho Vietnamese cuisine 1. Novena Square, Thomson Road

2. Parkway Parade, Marine Parade Road

3. JEM, Jurong East

4. NEX, Serangoon

5. Paragon, Orchard

6. Tampines Mall, Tampines

7. Waterway Point, Punggol

Indobox Indonesian cuisine 1. ION Orchard, Orchard

2. JEM, Jurong East

Muchos Mexican cuisine 1. Clarke Quay

2. Plaza Singapura, Orchard

RENNthai Thai cuisine Clarke Quay

Bayang Traditional Indonesian

cuisine

Clarke Quay

Hutong (胡同) Traditional northern

Chinese cuisine

Clarke Quay

In addition, barring unforeseen circumstances, the following restaurants will be opened in the next

12 months:

F&B brand Location of restaurants and cafes

So Pho MyTOWN, Kuala Lumpur, Malaysia

Streats 1. Marina One The Heart, Marina Bay, Singapore

2. Clementi Mall, Clementi, Singapore

3. MyTOWN, Kuala Lumpur, Malaysia

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BRANDING AND MARKETING

Our marketing division spearheads our marketing strategies and is focused at promoting

awareness of our own proprietary brands and restaurants which we operate. Our marketing

division is headed by a senior marketing manager and assisted by a marketing executive.

Our marketing strategies include:

(a) Promotional brochures, flyers and various online channels including collaboration with social

media and food bloggers; and

(b) Advertisements and banners on social media platform, online websites, magazines and

publications accessible by the general public in Singapore.

QUALITY ASSURANCE

We are committed to maintain high standards of food quality and service as we believe that quality

of food and service are the fundamental factors to gain a competitive edge in the F&B business.

The quality of food and service in our restaurants and cafes are primarily overseen by our CEO

and Executive Chairman, Alan Goh and our Executive Director, Catherine Tan together with our

operations team headed by our operations director.

Quality of Food

Our restaurants and cafes adopt quality food control measures to ensure the quality of our food

and the measures adopted are briefly summarised as follows:

(a) Incoming supplies

Our key ingredients are purchased on a daily basis ensuring freshness of ingredients. Our

personnel at our restaurants check each incoming ingredient to ensure they meet our quality

standards. Ingredients which meet the standards will be stored in the refrigerator of an

optimum temperature.

(b) Food preparation

All our chefs and kitchen crews involved in food preparation processes must maintain a high

standard of personal hygiene. They are required to observe good hygiene practices at all

times, including wearing protective coverings over clean clothes, hair restraints and aprons,

and sanitising their hands before handling food.

Quality of Service

We aim to achieve a high level of responsiveness to our customers’ needs. Our employees are

provided with training programmes which place emphasis on the importance of service standards

and familiarity with the menus. We also require our employees to maintain high standards of

personal hygiene, cleanliness of uniforms and overall appearances.

We regularly encourage customers to provide feedback and suggestions through interaction with

the customers or survey forms. We aim to respond efficiently to our customers’ feedback,

regardless positive or negative. Based on the feedback, we will take steps to improve our

customers’ dining experience and improve our service standards.

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Quality Control for Halal Certification

We closely monitor all food processing in our restaurants which are certified “Halal” including the

manufacturing, packing, transporting and storage to ensure that we are in compliance with the

prescribed requirements to maintain the Halal certification issued to our restaurants.

MAJOR CUSTOMERS

Due to the nature of our F&B business as operators of restaurants and cafes, none of our

customers accounted for 5% or more of our revenue of each of the past three financial years. The

majority of our sales are transacted via cash or credit card.

MAJOR SUPPLIERS

We generally do not enter into long-term or exclusive agreements with any of our suppliers. As

such, we retain the flexibility to evaluate and select new suppliers, based on their abilities to

provide us with the highest quality products at the most competitive pricing. Our Directors believe

that we are not materially dependent on any of our suppliers, as the food ingredients are easily

available in the markets. In addition, in order to ensure the continuity and sufficiency of supply, we

maintain at least two approved suppliers for each ingredient.

We set out below a list of our major suppliers which accounted for 5% or more of our purchases

during the periods under review:–

Major supplier

Main products

supplied

Percentage of total purchases (%)

FY2013 FY2014 FY2015

Atlantic Coast Food Industries Seafood 15.9 15.0 15.1

Chia & Thai Food Supplies

Pte. Ltd. Dry goods 15.1 14.9 15.8

Toh Thye San Farm Meat 11.8 10.4 10.2

Choon Huat Trading Co. Vegetables 8.5 8.8 10.3

Hua Kun Food Industry

Pte. Ltd. Meat 1.6 5.4(1) 7.9

Note:

(1) The increase in the total purchases from Hua Kun Food Industry Pte. Ltd. from 1.6% in FY2013 to 5.4% in FY2014

was mainly due to the expansion of our Vietnamese cafes under the brand “So Pho”.

None of our Directors, Executive Officers or Substantial Shareholders has any interest, direct or

indirect, in any of the above suppliers.

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CREDIT MANAGEMENT

Credit terms to our customers

As the transactions in our restaurants and cafes are conducted on a cash basis (including credit

card and electronic payments), we do not give any credit terms to our customers. There is no

credit given to customers except for credit period of a few days for receipt of credit card payment

from banks.

We also provide catering from time to time. However, our catering business represents less than

1.0% of our business revenue. Payment for our catering service is usually settled by way of cash

or cheque upon food delivery. There is no credit given to customers and where the customer elects

to pay by credit card, such customer is required to make the payment at the restaurant or cafe

before the event date.

Credit term from our suppliers

We receive invoices and delivery orders every day. Payment terms granted by our suppliers vary

from supplier to supplier. Our suppliers generally grant us credit terms of between 30 and 45 days

from the date of invoice.

Our average trade payables turnover days during the periods under review were as follows:–

FY2013 FY2014 FY2015

Average trade payables turnover days(1) 49(2) 46(2) 47(2)

Notes:

(1) Average trade payables turnover days were determined based on the average of trade payables divided by the

relevant purchases for the financial year, multiplied by 365 days.

(2) The average trade payables turnover days during the periods under review exceeded the credit terms of our

suppliers due to delayed payments in the PRC. Settlements of our suppliers’ invoices during the periods under

review were generally between 30 to 52 days.

RESEARCH AND DEVELOPMENT

In the context of our F&B business, our Directors believe that it is important to continuously

innovate and keep ourselves up to date with the prevailing market trends and tastes. In this

regard, we ensure that we constantly update our menus to cater to the latest trends and

development of consumers’ preference.

Our research and development includes the use of feedback forms at each restaurant and via

social media and online surveys. In addition, our CEO and Executive Chairman, Alan Goh and our

Executive Director, Catherine Tan, regularly attend food exhibition and hold regular discussions

with our operations team, executive chefs and external consultants.

The expenses incurred in relation to our research and development during the periods under

review have not been significant.

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INTELLECTUAL PROPERTY

Trademarks

Save as disclosed below, we do not own nor are we dependent on any registered trademark,

patent or other intellectual property rights:–

Name of

applicant Trademark

Trademark/

Application

number

Registration

class

Country of

registration Status

Katrina

Singapore

T0807496B Class 43(1) Singapore Registered

Katrina

Singapore

T0807497J Class 43(1) Singapore Registered

Katrina

Singapore

40201604367S Class 43(1) Singapore Registered

Katrina

Singapore

40201604368U Class 43(1) Singapore Pending

Registration

Katrina

Singapore

40201604369Y Class 43(1) Singapore Registered

Katrina

Singapore

40201604370P Class 43(1) Singapore Registered

Katrina

Singapore

40201604371S Class 43(1) Singapore Registered

Katrina

Singapore

40201604372Q Class 43(1) Singapore Pending

Registration

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Name of

applicant Trademark

Trademark/

Application

number

Registration

class

Country of

registration Status

Katrina

Singapore

40201604373W Class 43(1) Singapore Pending

Registration

Katrina

Singapore

40201604374U Class 43(1) Singapore Registered

Beijing

BaliThai

10559780 Class 43(2) PRC Registered

Beijing

BaliThai


Beijing

BaliThai


Beijing

BaliThai


Notes:

(1) The class of Specification of Goods and Services in Singapore is described as follows:

Class 43: Under the International Specifications of Goods and Services related to services for providing food and

drink; temporary accommodation. Class 43 includes mainly services provided by persons or establishments whose

aim is to prepare food and drink for consumption.

(2) The classes of Specification of Goods and Services in the PRC are described as follows:

Class 35: Services for online advertisement on data communication networks; advertisement; special permit

business management; marketing; human resources; seeking sponsorship; promotions and advertisement; input of

computer data information; agent for import and export; restaurant management.

Class 43: Fast-food restaurants; tea shops; restaurants; banquets; dining halls; rental of chairs, tables, clothes and

glass utensils; provider of camping facilities; accommodation for animals; nursery; day-care for children.

As at the Latest Practicable Date, our business or profitability is not materially dependent on any

registered or pending registration trademark, patent or other intellectual property rights. Barring

unforeseen circumstances, our Directors believe that there will be no impediments registering

those trademarks pending registration.

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INVENTORY MANAGEMENT

Our purchases comprise mainly food ingredients such as fresh and frozen meat, poultry, seafood

and vegetables, and goods such as bottled beverages, utensils, packing materials and paper

napkins. As most of our food ingredients and goods are perishable in nature and readily available

in the markets, we do not maintain a significant level of inventory.

Our restaurants generally purchase food ingredients on a daily basis from our local suppliers. The

approved list of suppliers is frequently evaluated by our management team based on several

factors such as pricing, quality of products and timeliness of delivery. The kitchen managers and

chefs-in-charge of each restaurant are responsible for determining the amount of daily purchases

of food ingredients and goods it requires, and placing orders directly with selected local suppliers.

The food ingredients are delivered directly to the kitchens of each of our restaurants.

Our purchases consist of mainly fresh and perishable ingredients which are usually consumed

within a day, thus they are charged to the income statement as cost of sales.

PROPERTIES AND FIXED ASSETS

We currently own the following property:–

Singapore location Tenure

Approximate

area

(sq ft)

Use of

property Encumbrances

1 Sims Lane #05-05

Singapore 387355

Freehold 2,067 Office Mortgage in

favour of United

Overseas Bank

Limited

BUSINESS

85

We currently lease the following properties to be used as restaurants and cafes:-


Approximate

area

(sq ft)

Use of

property Lessor

112 East Coast Road,#02-11 112 Katong,Singapore 428802

3 years from6 January 2016to 5 January2019

2,337 Bali Thairestaurant at112 Katong

DBS TrusteeLimited astrustee ofPerennial KatongRetail Trust

1 Woodlands Square,#05-05 Causeway Point,Singapore 738099

3 years from8 February2016 to7 February2019

1,550 Bali Thairestaurant atCausewayPoint

HSBCInstitutional TrustServices(Singapore)Limited astrustee ofFrasersCentrepoint Trust

2 Jurong East Street 21,#01-21 IMM Building,Singapore 609601

3 years from21 November2015 to20 November2018

2,395 Bali Thairestaurant atIMM Building

HSBCInstitutional TrustServices(Singapore)Limited astrustee ofCapitaMall Trust

23 Serangoon Central,#02-13 NEX,Singapore 556083

3 years from20 January2014 to19 January2017

2,206 Bali Thairestaurant atSerangoonNEX

Gold RidgePte. Ltd.

26 Sentosa Gateway,#B1-221 The Forum,Singapore 098138

3 years from3 August 2013to 2 August2016(2)

1,162 Bali Thairestaurant atResort WorldSentosa

Resorts World atSentosa Pte. Ltd.

3 Temasek Boulevard#B1-121 Suntec City Mall,Singapore 038983

3 years from1 February2016 to31 January2019

2,006 Bali Thairestaurant atSuntec CityMall

HSBCInstitutional TrustServices(Singapore)Limited astrustee of SuntecReal EstateInvestment Trust

33 Sengkang WestAvenue, #02-01/02The Seletar Mall,Singapore 797653

3 years from31 October2014 to30 October2017

1,931 Bali Thairestaurant atThe SeletarMall

The Seletar MallPte. Ltd.

1 Bukit Batok CentralLink, #03-03 West Mall,Singapore 658713

3 years from22 August 2013to 21 August2016(1)

1,841 Bali Thairestaurant atWest Mall

Alprop Pte. Ltd.

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Approximate

area

(sq ft)

Use of

property Lessor

83 Punggol Central,#B1-13, Waterway Point,Singapore 828761


1,846 Bali Thairestaurant atWaterwayPoint

FC Retail TrusteePte. Ltd. astrustee-managerof Sapphire StarTrust andEmerald StarPte. Ltd.

Block 3A River ValleyRoad, #01-05 Merchants’Court, and OutdoorRefreshment Area,Singapore 179020

3 years from19 July 2015 to18 July 2018

1,733 Bayangrestaurant atClarke Quay


200 Victoria Street,#B1-06 Bugis Junction,Singapore 188021

3 years from1 December2013 to30 November2016(2)

1,206 Honguorestaurant atBugisJunction


23 Serangoon Central,#B1-75 NEX,Singapore 556083

3 years from2 December2013 to1 December2016(1)

1,274 Honguorestaurant atSerangoonNEX

Gold RidgePte. Ltd.

Block 3D River ValleyRoad, #01-07 ShophouseRow, and OutdoorRefreshment Area,Singapore 179023

3 years from10 April 2014to 9 April 2017

2,088 Hutongrestaurant atClarke Quay


2 Orchard Turn,#B3-24, ION Orchard,Singapore 238801

Area A:4 years from21 September2013 to20 September2017

Area B:3 years11 months and2 days from19 October2013 to20 September2017

Area A:1,033

Area B:388

Total:1,421

Indobox cafeat IONOrchard

Orchard TurnRetail InvestmentPte. Ltd.

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Approximate

area

(sq ft)

Use of

property Lessor

50 Jurong Gateway Road,#03-22 Jem, Singapore608549


1,644 Indobox cafeat JEM

Lend LeaseRetailInvestments 3Pte. Ltd.

Block 3D, River ValleyRoad, #01-04 OutdoorRefreshment Area andShophouse Row,Singapore 179023

3 years from10 February2016 to9 February2019

3,132 Muchosrestaurant atClarke Quay


68 Orchard Road,#01-34C and #01-34COutdoor RefreshmentArea Plaza Singapura,Singapore 238839


1,582 Muchosrestaurant atPlazaSingapura


Block 3D, River ValleyRoad, #01-05 ShophouseRow and OutdoorRefreshment Area,Singapore 179023


2,304 Rennthairestaurant atClarke Quay


50 Jurong Gateway Road,#B1-08 Jem, Singapore608549

3 years from15 June 2016to 14 June2019

2,028 So Pho cafeat JEM

Lend LeaseRetailInvestments 3Pte. Ltd.

238 Thomson Road,#02-43/45 NovenaSquare, Singapore307683

3 years from1 November2015 to31 October2018

1,173 So Pho cafeat NovenaSquare

Novena SquareInvestments Ltd.

290 Orchard Road,#B1-20 Paragon,Singapore 238859


1,367 So Pho cafeat Paragon

DBS TrusteeLimited astrustee of SPHREIT

80 Marine Parade Road,#03-30D ParkwayParade, Singapore449269


1,238 So Pho cafeat ParkwayParade

Prime AssetHoldings Limited

BUSINESS

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Approximate

area

(sq ft)

Use of

property Lessor

4 Tampines Central 5,#04-30/31 Tampines Mall,Singapore 529510

3 years from9 October 2014to 8 October2017

1,098 So Pho cafeat TampinesMall


83 Punggol Central,#01-28 Waterway Point,Singapore 828761


1,783 So Pho cafeat WaterwayPoint

FC Retail TrusteePte. Ltd. astrustee-managerof Sapphire StarTrust andEmerald StarPte. Ltd.

23 Serangoon Central,#B1-15 NEX,Singapore 556083


2,539 So Pho cafeatSerangoonNEX

Gold RidgePte. Ltd.

2 Jurong East Street 21,#02-17/17A IMM Building,Singapore 609601

3 years from19 September2015 to18 September2018

2,239 Streats cafeat IMMBuilding


23 Serangoon Central,#03-08/09 NEX,Singapore 556083


2,374 Streats cafeatSerangoonNEX

Gold RidgePte. Ltd.

1 Jelebu Road, #02-17Bukit Panjang Plaza,Singapore 677743

3 years from18 December2014 to17 December2017

1,744 Streats cafeat BukitPanjangPlaza


180 Kitchener Road,#01-01/02/03 City SquareMall, Singapore 208539

3 years from5 December2015 to4 December2018

2,142 Streats cafeat CitySquare Mall

CityDevelopmentsLimited

1 Pasir Ris Close#02-104/105E!Hub@Downtown East,Singapore 519599

3 years from1 May 2014 to30 April 2017

2,416 Streats cafeat E!HubDowntownEast

ResortsConceptsPte. Ltd.

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Approximate

area

(sq ft)

Use of

property Lessor

11 Tanjong Katong Road,#02-19/20 One KM,Singapore 437157


2,110 Streats cafeat One KM

UOL PropertyInvestmentsPte Ltd and UOLResidentialDevelopmentPte Ltd

26 Sentosa Gateway#01-205, Singapore098138

3 years from10 June 2015to 9 June 2018

1,741 Streats cafeat ResortWorldSentosa

Resorts World atSentosa Pte. Ltd.

PRC location Tenure

Approximate

area

(sq ft)

Use of

property Lessor

Beijing Raffles Shopping

Mall, 05-02, No. 1 South

Avenue, Dongzhimen,

Dongcheng District,

Beijing

Unit 05-02, 北京來福士購物中心, 北京市東城東直門南大街1號

4 years from

1 July 2014 to

30 June 2018

3,232 Bali Thai

restaurant at

Raffles City

Beijing

Beijing Xinjie

Real Estate

Development

Co., Ltd.

北京新捷房地產開發有限公司

Jindi Center, Building C,

Unit L312 and L315,

Floor 3, No. 7 Building,

No. 91 Jianguo Road,

Chaoyang District,

Beijing

Unit L312 and L315 at

Level 3, 金地中心C座,

北京朝陽區建國路91號

4 years from

1 May 2013 to

30 April 2017

2,543 Bali Thai

restaurant at

Gemdale

Plaza

Beijing Jindi

Hongyu Real

Estate

Development

Co., Ltd.

北京金地鴻運房地產開發有限公司

Notes:–

(1) These leases are subject to renewal in the second half of 2016. Barring unforeseen circumstances, our Directors

believe that these leases will be renewed prior to the expiry of their tenure.

(2) These leases have been renewed for a further three years period.

To the best of our Directors’ knowledge, there are no regulatory requirements or environmental

issues that may materially affect our utilisation of the above properties and fixed assets, save as

disclosed in the “Government Regulations” section of this Offer Document.

BUSINESS

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STAFF TRAINING

The F&B business is a people-centric business and we regard our employees as our primary

asset. Our Directors believe that training and development for our employees are crucial in

continually enhancing and improving our standards of food and service.

To this regard, we are committed to provide all employees with opportunities to improve their skills

and widen their knowledge. We have implemented a structured in-house capability training for all

service employees. The training programmes offered under the capability training varies

depending on their job functions. The capability training includes core and elective modules

covering core values and brand promise, on-job-training for operations and workforce skills

qualification for various topics.

In addition to the internal training, from time to time, we also send our employees for external

training by third parties such as SPRING Singapore and Workforce Development Authority.

Our staff training expenses for FY2013, FY2014 and FY2015 were insignificant as training

programmes were mostly conducted internally.

INSURANCE

Our Group has taken up, inter alia, the following insurance policies including:–

(i) work injury compensation insurance in relation to our employees;

(ii) foreign workers’ medical insurance for medical benefits for our foreign workers;

(iii) public liability insurance for our restaurants and cafes and our office at 1 Sims Lane #05-05

Singapore 387355;

(iv) fire, extraneous perils and burglary insurance;

(v) motor vehicle insurance;

(vi) personal accident insurance for our CEO and Executive Chairman, Alan Goh, and Executive

Director, Catherine Tan; and

(vii) fidelity guarantee insurance for the loss of money or property sustained as a direct result of

acts of fraud, theft or dishonesty by an employee in the course of employment.

Our Directors are of the view that the above insurance policies are adequate for our existing

operations. However, significant damage to our operations, whether as a result of fire or other

causes, may still have a material adverse effect on our results of operations or financial position.

We are not insured against business interruption and if such event were to occur, our business

may be materially or adversely affected. Please refer to the “Risk Factors – Our insurance

coverage may not be adequate” section of this Offer Document for more details. We will review our

insurance coverage from time to time to ensure that our Group has sufficient insurance coverage.

BUSINESS

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COMPETITION

The F&B industry has always been highly competitive as its barriers of entry are comparatively

low. Our Group’s competitors include upmarket eateries and chain restaurants which offer a wide

variety of cuisines. Our Group considers those chain restaurants which offer similar types of food

targeting the similar market to be our potential competitors. Such restaurants or chains of

restaurants or cafes include:

• Bangkok Jam

• NamNam Noodle Bar

• Patara

• ThaiExpress

• Xin Wang Hong Kong Cafe

• Siam Kitchen

To the best of our Directors’ knowledge, there are no published statistics that can be used to

accurately measure the market share of our business within Singapore.

As at the date of this Offer Document, none of our Directors or Substantial Shareholders or their

Associates has any interest, indirect or direct, in any of the abovementioned competitors.

OUR COMPETITIVE STRENGTHS

Our Directors believe that our Group is able to compete effectively against our competitors with

the following competitive strengths:

We have various proprietary brands with different F&B concepts catering to a wide market

segment

As at the Latest Practicable Date, we own nine proprietary brands which were built and developed

by us. Each of our own proprietary brands offers different F&B concepts. Such variety of brands

and concepts enable us to offer different types of cuisines at different settings and prices. In doing

so, our Group manages to appeal to a wide range of customers with varying degrees of spending

power. Our customers range from the heartlanders to tourists and expatriates.

Our multi-brand strategy allows our Group to operate two or more restaurants of different brands

in the same location, such as shopping malls, to provide additional choices of food for our

customers as well as to different market segments. The clustering of restaurants of different

brands in the same shopping mall has enabled us to negotiate with our landlords for better

locations at preferential rental terms.

We have been able to identify, develop and introduce new brands with market potential to capture

our target consumer base. In addition, we believe that with our track record in the past two

decades, we will be able to monitor changing market trends and customers’ preferences, which

will enable us to continue to innovate and develop new food options for our existing brands in

order to create fresh dining experience for our regular and new customers.

Our Directors believe that we are able to distinguish ourselves from our competitors with our own

proprietary brand strategy and our strength to innovate existing brands and to develop new F&B

brands and concepts.

BUSINESS

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Our restaurants under four of our own proprietary brands are Halal-certified

The restaurants and cafes operating under four out of our nine own proprietary brands, Bali Thai,

So Pho, Streats and Indobox are Halal-certified (save for the Bali Thai restaurant at IMM Building

as further disclosed in the “Government Regulations” section of this Offer Document) so that we

can reach out to the Muslim community. The Halal sector is a niche sector within the F&B industry

and there is a growing demand for Singapore Halal-certified products and services from overseas.

With the Halal certification, our restaurants and cafes can have access to a larger market

segment, particularly the growing Halal market in the region.

In addition, the barriers of entry to attain Halal certification are high as there are stringent food

safety requirements and standards to be satisfied in order to be certified Halal. Please refer to the

“Government Regulations” section of this Offer Document for more details.

Our Directors believe that the Halal certification of our restaurants and cafes allows us to serve

a larger market place and also provides an assurance to customers that such restaurants and

cafes will serve food which meets the standards required under the Halal regime.

We have dedicated key management personnel and staff with extensive experience in the

local F&B industry

We have a dedicated management team spearheading our business operations and driving our

future growth plans. Our management team is led by our CEO and Executive Chairman, Alan Goh

and our Executive Director, Catherine Tan, each of whom has more than 20 years of experience

in the F&B industry. Our management team’s experience and knowledge of the F&B industry has

enabled us to identify new business opportunities and introduce fresh ideas and new food

products into the local and overseas market.

Our management team is supported by our experienced staff. Most of our staff, including our

chefs, has been with our Group for more than 10 years. The F&B business is a customer-centric

industry and our staff plays important roles in the sustainability of our business. Our Directors

believe that the dedication and loyalty of our staff will enable our Group to expand and thrive.

We have an established reputation in our marketplace

Katrina Singapore has been in operations since 1995 and we have established and have been

enhancing our market presence for our F&B brands across Singapore. Some of our brands have

a long-time presence, particularly Bali Thai, whose first restaurant was opened in Singapore since

1998. We believe that our established reputation will enable us to compete effectively against our

existing and potential competitors.

Over the past two decades, our business had gone through the Asian financial crisis in the late

nineties, high turnover of manpower and other difficult environmental factors in the F&B industry.

Despite these hardships, our business has continued to thrive and grow.

In addition, we are dedicated to provide enjoyable dining experience by delivering quality food and

services at reasonable prices to attract recurring customers. Our Directors believe that we have

been consistent in maintaining good standards of food and quality. Further, we strive to manage

our expenses and operating costs which allows us to price our food reasonably without affecting

our financial performance.

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We maintain good relationships with suppliers and landlords

Over the past 10 years, we have been on good terms with our suppliers. Some of the suppliers

have been doing business with us for more than 10 years. We believe that our good relationships

with the suppliers have enabled us to negotiate the prices of the food ingredients and to reduce

any risks of late or non-delivery of food ingredients.

In addition, we maintain good relationships with our landlords. Most of our restaurants have not

relocated since their first opening, for example, our first Bali Thai restaurant has not moved from

its first location in West Mall since its opening in 1998. Our Directors believe that the good

relationships with our landlords is important to enable us to retain the strategic locations in which

our restaurants have been operating.

BUSINESS

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PROSPECTS

The F&B industry is closely connected to the general economic outlook and the increasing

affluence in any country. Our Directors believe that the outlook for the F&B industry in Singapore

and the ASEAN region is expected to remain positive, taking into consideration the following

factors:–

Increase in popularity of food delivery services

In the recent years, Singapore saw an increase in the demand for food delivery services due to

changing lifestyle and increasing trend of busy consumers who are more willing to pay for

convenience.1 Restaurants are taking this opportunity to introduce ways to boost their revenue by

leveraging on such trends. At the same time, food delivery to the consumer could also reduce

overheads and rental costs for physical dining spaces.

The potential of food delivery services within Singapore is huge with the growth of online shopping

in Singapore that is characterised by strong consumer demand due to a growing generation of

young, internet-savvy individuals coupled with greater high speed internet penetration across the

island and the development of advanced mobile applications. This has led to the emergence of

food delivery service players such as Food Panda and Deliveroo2 in recent years. Such food

delivery service providers cater to different restaurants and food establishments in their needs to

fulfil online food orders from their customers.

As such, our Directors believe that our newly introduced online food ordering and delivery services

will contribute positively to the business outlook of our restaurants and cafes in the near future.

Affluence growth and increase of households dining out in Singapore

Our Directors believe that there is an upward trend of people spending on food due to the growth

of consumer affluence and purchasing power in Singapore. According to Singapore’s Department

of Statistics, the median monthly household income of Singapore has been on an increasing

trend.3 In addition, the increase of women and elderly in the workforce leads to lesser time

available for home cooking and thus, households are gradually spending more on dining out.4

1 Information extracted from a news article entitled “More players jumping on the food delivery wagon” published in

The Straits Times found at http://www.straitstimes.com/tech/games-apps/more-players-jumping-on-the-food-

delivery-wagon

2 Information extracted from an article entitled “Foodpanda’s drone deliveries reduce time by 50%” published on the

website of Singapore Business Review found at http://sbr.com.sg/food-beverage/exclusive/foodpandas-drone-

deliveries-reduce-time-50

3 Information extracted from a news article entitled “Median monthly household income from work in 2015 up 4.9%

on year in Singapore” found at http://www.businesstimes.com.sg/government-economy/median-monthly-household-

income-from-work-in-2015-up-49-on-year-in-singapore

4 Information extracted from an article entitled “Chart of the Day: Here’s solid proof that dining out is all the rage in

Singapore” published on the website of Singapore Business Review found at http://sbr.com.sg/food-

beverage/news/chart-day-heres-solid-proof-dining-out-all-rage-in-singapore


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Due to the rising hectic lifestyle and an increase in affluence among consumers in Singapore,

there is generally a greater willingness of consumers to spend on dining out. The average monthly

house expenditure on food has increased gradually over the years from 2002 to 2013.5

In addition, Ministry of Trade and Industry (“MTI”) announced on 25 November 2015 that the

Singapore economy is expected to grow by 1.0 to 3.0 per cent in 2016.6 In particular, the food

services sector has improved year-on-year.

With the change in the dining preference, consumers are more looking towards mid-range

restaurants offering small dishes and sharing platters.7 As such, our Directors believe that the

business outlook of our restaurants, which are mainly in the mid-range, will remain positive.

Completion of new retail and F&B spaces and refurbishment of older shopping complexes

The completion of new shopping complexes and refurbishment of older shopping complexes have

also contributed to the positive retail trends in Singapore and Malaysia. With the completion of

these new retail spaces and refurbishment of existing spaces, this will lead to the possibility of

opening new establishments or expanding our existing operations into these new retail locations.

Regional growth opportunities

There is potential for further growth in the ASEAN region due to large domestic markets and a

growing middle income group within the ASEAN region. The ASEAN countries, particularly

Philippines and Vietnam are expected to grow at the fastest rate within the ASEAN region.8 We

have plans to ride on such growth opportunities through our overseas expansion plans in

Malaysia, Vietnam and Indonesia. In addition, the Halal certification of our restaurants and cafes

will enable us to cater to our Muslim patrons in Muslim countries within the ASEAN region.

For more details, please refer to the “Business Strategies and Future Plans” section of this Offer

Document.

5 Information extracted from RHB Research Report entitled “Confessions of a Shopaholic” dated 6 August 2015 found

at http://research.rhb invest.com.sg:9898/UploadPDF/SG_Consumer%20Sector%20-%20Great%20Singapore%20

Sale_Sector%20Update_20150806_RHB.pdf

6 Information extracted from a press release by the MTI dated 25 November 2015 entitled “MTI Forecasts GDP to

Grow by “Close to 2.0 Per Cent” in 2015 and “1.0 to 3.0 Per Cent” in 2016” found at

http://www.singstat.gov.sg/docs/default-source/default-document-library/news/press_releases/gdp3q2015.pdf

7 Information extracted from a report entitled “Food Forward Trends Report 2014 – Singapore” published by Weber

Shandwick found at http://webershandwick.asia/wp-content/uploads/2014/04/FF-SINGAPORE-16April.pdf

8 Information extracted from an article entitled “Economic Snapshot for ASEAN” published on the website of Focus

Economics found at http://www.focus-economics.com/regions/asean

Each of the above organisations or corporations (as the case may be) has not consented to the inclusion of the

above information in this Offer Document for the purpose of Section 249 of the SFA and is therefore not liable for

the relevant information under Sections 253 and 254 of the SFA. While our Directors have taken reasonable action

to ensure that the information is extracted accurately and fairly, and has been included in this Offer Document in its

proper form and context, they have not independently verified the accuracy of the relevant information.


96

TREND INFORMATION

For the current financial year ending 31 December 2016, our Directors have observed the

following trends based on the revenue and operations of our Group as at the Latest Practicable

Date:–

(a) There was an increase of revenue mainly due to the opening of new restaurants, and cafes

as well as continuous increased contribution from our existing restaurants and cafes. Barring

unforeseen circumstances, our revenue is expected to continue increasing in line with the

opening of new restaurants and cafes in Singapore.

(b) In tandem with the increase in revenue, our operating costs and expenses are expected to

increase accordingly which is mainly attributable to (i) the increase in staff costs as a result

of higher headcounts, and (ii) increase in rental expenses as a result of setting up new

restaurants and cafes.

Save as discussed above, in the “Risk Factors”, “Management’s Discussion and Analysis of

Results of Operations and Financial Position” and “Prospects, Business Strategies and Future

Plans” sections of this Offer Document and in the Unaudited Pro Forma Combined Financial

Information set out in Appendix B of this Offer Document and barring any unforeseen

circumstances, our Directors are not aware of any significant recent trends or any other known

trends, uncertainties, demands, commitments or events that are reasonably likely to have a

material effect on our Group’s revenue, profitability, liquidity or capital resources, or that would

cause the financial information disclosed in this Offer Document to be not necessarily indicative

of the future operating results or financial condition of our Group. Please also refer to the

“Cautionary Note Regarding Forward-Looking Statements” section of this Offer Document for

further information.

ORDER BOOK

Due to the nature of our F&B business as operators of restaurants and cafes, we do not have an

order book.

BUSINESS STRATEGIES AND FUTURE PLANS

Our business strategies and future plans are as follows:

1. Launch of our online food ordering and delivery system

We have our own customised online food ordering and delivery system which allows

customers to place orders and make payments directly on our website without going through

a third party application or system. Following the placing of orders and payment online,

customers may elect to collect their orders from their desired restaurant or to request food

delivery to their doorstep. In December 2015, we launched our online food ordering services

for three eatery chains operating under the brands, Bali Thai, So Pho and Streats. We have

plans to expand our online ordering and food delivery services to all our nine F&B brands in

2016. We believe that such an online ordering system will enable us to reach out to a wider

spectrum of customers and it will increase the efficiency of our delivery process.


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2. Growing our restaurants for three “Halal” certified brands

To the best of our knowledge, we believe that there are potential demands for “Halal” certified

Asian food other than Malay cuisine. Our Group intends to intensify the expansion of our

three “Halal” certified brands, namely Bali Thai, So Pho and Streats, in Singapore, Malaysia

and Indonesia. We plan to set up more restaurants under these three brands across

Singapore to attain an overall increase in revenue. While set-up costs may affect our

financials in the initial period, the continued growth in the number of our restaurants under

our Group will increase our revenue and eventually contribute significantly to the growth of

our Group.

3. Geographical expansion into new regional markets

As at the Latest Practicable Date, our market is predominantly in Singapore with 32

restaurants and cafes operating under nine different F&B brands and concepts. We believe

that with our established presence in Singapore, there is a good potential to develop our F&B

brands outside Singapore. We have identified Malaysia, Vietnam and Indonesia as potential

markets for our business expansion. Barring unforeseen circumstances, we are planning to

open and operate at least two restaurants in Kuala Lumpur, Malaysia in the next 12 months

under the brands of So Pho and Streats.

4. Expansion through strategic alliances, acquisitions and joint ventures

Our Group may consider expanding our business through strategic alliances, acquisitions or

joint ventures with parties who will add values to our existing business. Through such

strategic alliances, acquisitions or joint ventures, we will look to strengthen our market

position, expand our business operations, as well as expand into new businesses

complementary to our current business. We believe that if our Company achieves its status

as listed company, there will be more room for expansion. Should such opportunities arise,

we will seek approval, where necessary, from our Shareholders, Sponsor and/or the relevant

authorities in accordance with the requirements of the applicable laws and regulations.

We intend to use approximately S$6.3 million of our net proceeds from the Placement

towards our future plans set out above.


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GOVERNMENT REGULATIONS, LICENCES, PERMITS, APPROVALS AND CERTIFICATES

Singapore

The material licences, permits, approvals and certificates which we require to operate restaurants

in Singapore are as follows:–

Type of licence Licensing body Description

Foodshop Licence NEA Under the Environmental Public Health Act,

the Environmental Health Department

requires that a licence be obtained from the

Director-General of Public Health for the

purposes of carrying on the business of a

retail eating or catering establishment. The

foodshop licence is usually granted for a

period of one year and is renewable at the

discretion of the Director-General and

subject to such restrictions and conditions

as the Director-General may think fit.

Grading Scheme for

Licensed Eating

Establishments and

Food Stalls

NEA All licensed eating establishments and food

stalls are appraised and graded by the NEA

in order to motivate eating establishments

to achieve and maintain high standards of

overall hygiene and housekeeping. All food

establishments in Singapore are awarded a

grade ranging from A to D.

Liquor Licence Liquors Licensing

Board of the Police

Licensing and

Regulatory

Department

The Liquor Control (Supply and

Consumption) Act 2015 of Singapore

requires any person who supplies any liquor

to obtain a liquor licence.

Copyright Music

Licence

COMPASS The proprietor of a business who provides

music to the public in its premises is

required to obtain a copyright music

licence, which allows the licensee to use

the repertoire of songwriters and

composers protected by COMPASS.

Halal certification MUIS Eating establishment, which fulfil all Halal

requirements including but not limited to the

Singapore Muis Halal Quality Management

System, may apply to MUIS for Halal

certification.

Electrical Installation

Licence

Energy Market

Authority (“EMA”)

Under the Electricity Act (Chapter 89A) and

the Electricity (Electrical Installations)

Regulations 2002, the use and operation of

electrical and supply installations require

licensing by the EMA to ensure that they are

operated and maintained by licenced

electrical workers and are safe to use.

GOVERNMENT REGULATIONS

99

Since the commencement of operations of certain of our restaurants and prior to 1 May 2016, we

have been providing music to the public in these premises without a copyright music licence from

COMPASS. Under the Copyright Act, parties which provide music to the public without the

requisite licence from COMPASS will be committing an offence and offenders are liable to

penalties as set out under the Copyright Act. We applied for the copyright music licence on 28 April

2016 and our Group has been issued the necessary copyright music licences from COMPASS for

the provision of music in our restaurants on 9 June 2016 for the duration from 1 May 2016 to 30

April 2017. On 10 May 2016, we also wrote in to notify COMPASS of the provision of music to the

public in our restaurants prior to 1 May 2016 and to seek its understanding regarding any

non-compliance of our Group prior to 1 May 2016. Our Group had on 1 June 2016 received an

acknowledgement from COMPASS for their receipt of our letter dated 10 May 2016 and confirmed

that our Group has obtained the copyright music licences for our restaurants. While we have

obtained the licence from COMPASS, there is no absolute assurance that we will not be imposed

with the penalties as set out in the Copyright Act for our possible past breaches. Under the

provisions of the Copyright Act, copyright infringement may amount to a criminal offence and

owners of a copyright may also bring civil action for infringement of their copyrights. In general,

a person who does any act that constitutes a willful infringement of a copyright and the extent of

such infringement is significant and/or the person does the act to obtain a commercial advantage,

the person shall be guilty of an offence and shall be liable to a fine not exceeding S$20,000 or to

imprisonment for a term not exceeding six months or to both. Further, if such offence was

committed with the consent or wilful act of a director, manager, secretary or similar office of a body

corporate, the officer as well as the body corporate is liable and a fine or a term of imprisonment

of up to two years or both may be imposed. Under the provisions of the Copyright Act, in a civil

action for an infringement brought by the owner of the copyright, the types of relief that the court

may grant include injunction, damages, an account of profits, or statutory damages of not more

than S$10,000 for each work but not more than S$200,000 in the aggregate (unless the plaintiff

proves that his actual loss from such infringement exceeds S$200,000). The Copyright Act does

not stipulate the minimum or maximum damages our Group may be liable to. However, the court

generally takes the stance that the damages awarded under the Copyright Act in relation to civil

actions are meant to be compensatory.

In addition, on 4 February 2016, we received a letter from MUIS on a breach of the MUIS Halal

Certification Terms and Conditions in respect of the Bali Thai restaurant at IMM Building due to its

kitchen staff being found to have consumed alcohol and the presence of empty beer cans in the

kitchen storeroom. Pursuant to such breach, MUIS has suspended the Halal certificate for our Bali

Thai restaurant at IMM Building for three months with effect from 2 May 2016 during which we are

not allowed to display or use any Halal-related signages or make any Halal-related claims at the

restaurant. After aforesaid breach, we have implemented additional checks and measures,

including conducting:

(a) daily spot check of our staff working in the Halal certified restaurants by the restaurant

manager;

(b) regular spot checks and regular viewing of closed-circuit television of Halal certified

restaurants; and

(c) authority is given to restaurant manager to take disciplinary actions including dismissal

against staff who breaches any Halal certification requirements.

We believe that there is no material impact on our business because the above incident is an

isolated occurrence and it only affects one of our Bali Thai restaurants.


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PRC

For our operations in the PRC, we hold the F&B Service Permits issued by the Bureau of Health

of Chaoyang District Branch, Beijing and the Bureau of Health of Dongcheng District Branch,

Beijing, the Registration Form for Alcohol Retail issued by the Commission of Commerce,

Chaoyang District Branch, Beijing.

Our Directors confirm that we have obtained all the requisite licences, permits, approvals, and/or

exemptions necessary for our current operations in the PRC. As at the Latest Practicable Date,

to the best of our Directors’ knowledge, there are no facts or circumstances which may result in

the suspension, revocation or cancellation of or otherwise adversely affect any of our licences,

permits, approvals and/or exemptions in the PRC.

Singapore

A summary of the key government regulations in Singapore that are applicable to our business are

as follows:–

Environmental laws and regulations

The Environmental Public Health Act (“EPHA”) requires, inter alia, a person who operates or uses

a food establishment to obtain a licence from the Director-General of Public Health (“Food Shop

Licence”). Under the EPHA, “food establishment” includes any retail food establishments where

food is sold wholly by retail, such as restaurants and any catering establishments providing a

catering service whereby food is prepared, packed and thereafter delivered to a consumer for his

consumption or use. Any retail food establishments or catering establishments that are part of a

food processing establishment governed by the Sale of Food Act (“Sale of Food Act”) are

exempted from obtaining a licence under the EPHA.

The Environmental Public Health (Food Hygiene) Regulations (“EPHR”) requires a licensee

holding a Food Shop Licence to exhibit such licence in a conspicuous and accessible position

within the licensed premises. The EFHR also provides that a licensee holding a Food shop

Licence must adhere to certain requirements in relation to, inter alia:

• Registration of any employees who are engaged in the sale or preparation for sale of food

with the Director-General of Public Health;

• Storage and refrigeration, packaging, transportation, sale and preparation of food;

• Cleanliness of equipment used in the licensed premises;

• Upkeep of the licensed premises; and

• Personal cleanliness of any persons who are engaged in the sale or preparation for sale of

food.

Demerit points are awarded for violations of the environmental legislations depending on severity,

and food processing establishments which accumulate 12 or more demerit points within any

12-month period, its licence to operate may be suspended for a certain period of time or revoked.


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Under the EPHR, no licensee for a catering establishment shall sell or supply any food for

consumption which has been maintained at a temperature not below five degree Celsius and not

above 60 degree Celsius for an aggregate period exceeding four hours after it was first prepared

for consumption. In addition, every licensee of a catering establishment is required to time-stamp

any catered food in accordance with the EPHR.

From 1 June 2014, the NEA requires all catering establishments to implement a HACCP-based

Food Safety Management System (“FSMS”), which promotes compliance with food hygiene

regulations and ensure that the food prepared for sale is safe for consumption. An existing

catering establishment will have to submit an FSMS plan at least three months prior to the renewal

date of its Food Shop Licence, starting with any Food Shop Licence expiring from 1 September

2014. A HACCP-certified catering establishment shall submit a copy of its HACCP certificate for

its catering premises to fulfil the FSMS requirement.

Grading Scheme for Licensed Eating Establishments and Food Stalls

The NEA has implemented the Grading System for Eating Establishments and Food Stalls, a

structured system of appraisal which motivates retail food establishments are assessed by high

standards of overall hygiene and housekeeping. Retail food establishments are assessed by the

NEA and awarded a grade ranging from A to D. All retail food establishments are advised to

display the certificate indicating their grade, to enable the public to make more informed choices.

As at the Latest Practicable Date, all our restaurants have attained the A grade under the NEA’s

grading system.

Halal certification

Under the Administration of Muslim Law Act, MUIS may issue a Halal certificate in relation to the

operation of an eating establishment and regulate the certificate holder to ensure the operations

of such eating establishment are in compliance with the prescribed requirements to maintain the

Halal certification. MUIS may, in issuing the Halal certificate, impose such conditions as it thinks

fit and may at any time, vary, remove or add to such conditions.

Liquor Control (Supply and Consumption) Act 2015

The Liquor Control (Supply and Consumption) Act 2015 of Singapore (“LCA”) requires any person

who supplies any liquor to obtain a liquor licence (“Liquor Licence”). The Liquor Licence is valid

for a two-year period. The Liquors Licensing Board may, in its discretion, cancel or suspend any

licence.

The LCA also requires any licensee holding a Liquor Licence to adhere to further requirements,

such as not supply any liquor or allowing any liquor to be consumer within the licensed premises

outside of the trading hours specified in the Liquor Licence.

Workplace and Health Safety Measures

Under the MOM’s Workplace Safety and Health Act (“WSHA”), every employer has the duty to

take, so far as is reasonably practicable, such measures as are necessary to ensure the safety

and health of his employees at work. These measures include providing and maintaining for the

employees a work environment which is safe, without risk to health, and adequate as regards

facilities and arrangements for their welfare at work, ensuring that adequate safety measures are

taken in respect of any machinery, equipment, plant, article or process used by the employees,


102

ensuring that the employees are not exposed to hazards arising out of the arrangement, disposal,

manipulation, organisation, processing, storage, transport, working or use of things in their

workplace or near their workplace and under the control of the employer, developing and

implementing procedures for dealing with emergencies that may arise while those persons are at

work and ensuring that the person at work has adequate instruction, information, training and

supervision as is necessary for that person to perform his work.

Employment Act

The Employment Act (Chapter 91) of Singapore (“EA”) is administered by the MOM and sets out

the basic terms and conditions of employment and the rights and responsibilities of employers as

well as employees who are covered under the EA (“relevant employees”).

In particular, Part IV of the EA sets out requirements for rest days, hours of work and other

conditions of service for workmen who receive salaries not exceeding S$4,500 a month and

employees (other than workmen) who receive salaries not exceeding S$2,500 a month. Section

38(8) of the EA provides that a relevant employee is not allowed to work for more than 12 hours

in any one day except in specified circumstances, such as where the work is essential to the life

of the community, defence or security. In addition, Section 38(5) of the EA limits the extent of

overtime work that a relevant employee can perform to 72 hours a month.

Employers must seek the prior approval of the Commissioner for Labour (the “Commissioner”) for

exemption if they require a relevant employee or class of relevant employees to work for more

than 12 hours a day or work overtime for more than 72 hours a month. The Commissioner may,

after considering the operational needs of the employer and the health and safety of the relevant

employee or class of relevant employees, by order in writing exempt such relevant employees

from the overtime limits subject to such conditions as the Commissioner thinks fit. Where such

exemptions have been granted, the employer shall display the order or a copy thereof

conspicuously in the place where such employees are employed.

Employment of Foreign Workers

The availability and the employment cost of skilled and unskilled foreign workers are affected by

the government’s policies and regulations on the immigration and employment of foreign workers

in Singapore. The policies and regulations are set out in, inter alia, the Employment of Foreign

Manpower Act and the relevant Government Gazettes.

In relation to the employment of semi-skilled or unskilled foreign workers, employers must ensure

that such persons apply for a “Work Permit”. In relation to the employment of foreign mid-level

skilled workers, employers must ensure that such persons apply for a “S Pass”.

In relation to the employment of foreign professionals, employers must ensure that such persons

apply for an “Employment Pass”.

As at 31 December 2015, we had approximately 250 foreign employees in Singapore.

The Employment of Foreign Manpower (Work Passes) Regulations 2012 (“EFMR”) requires

employers of work permit holders, inter alia, to:

• Subsidise medical expenses of foreign worker (unless agreed otherwise);

• Provide safe working conditions;


103

• Provide acceptable accommodation consistent with any law or governmental regulations;

and

• Provide and maintain medical insurance for inpatient care and day surgery, with coverage of

at least S$15,000 per every 12-month period.

The EMFR also requires employers of S Pass holders, inter alia, to:

• Subsidise medical expenses of foreign worker (unless agreed otherwise); and

• Provide and maintain medical insurance for inpatient care and day surgery, with coverage of

at least S$15,000 per every 12-month period.

An employer of foreign workers is also subject to, inter alia, the provisions set out in the

Employment Act (Chapter 91), the Employment of Foreign Manpower Act (Chapter 91A), the

Immigration Act (Chapter 133) and the Immigration Regulations.

Work Injury Compensation

The Work Injury Compensation Act (“WICA”), which is regulated by the MOM, applies to workmen

in all industries in respect of injury suffered by them in the course of their employment and sets

out, inter alia, the amount of compensation they are entitled to and the method(s) of calculating

such compensation. The WICA provides that if in any employment, personal injury by accident

arising out of and in the course of the employment is caused to a workman, the employer shall be

liable to pay compensation in accordance with the provisions of the WICA.

The WICA provides, inter alia, that, where any person (referred to as the principal) in the course

of its business or for the purpose of his trade or business contracts with any other person (referred

to as the contractor) for the execution by the contractor of the whole or any part of any work

undertaken by the principal, the principal shall be liable to pay to any workman employed in the

execution of the work any compensation which he would have been liable to pay if that workman

had been immediately employed by the principal.

PRC

A summary of the key government regulations in the PRC that are applicable to our business are

as follows:–

The laws and regulations relating to the F&B industry in the PRC are set out in PRC national laws

and regulations, as well as regional laws, regulations and measures promulgated by the provincial

or municipal authorities. The following is a summary of the main laws and regulations of PRC that

are relevant to our business operations in the PRC. Please refer to Appendix D of this Offer

Document entitled “Summary of Relevant PRC Laws and Regulations” for more information.

Foreign Investment in the F&B Industry in the PRC

In accordance with the Catalogue for the Guidance of Foreign Investment Industries as issued and

amended by the National Development and Reform Commission, consumer F&B services and

general food production and distribution have been classified as industries in which foreign

investment is allowed.


104

F&B Licensing Requirements

(a) Food Safety Law

The Food Safety Law of the PRC (“Food Safety Law”) came into force on 1 October 2015.

Pursuant to the Food Safety Law, restaurants, fast food shops, beverage stores, canteens

and other F&B outlets must apply for the F&B Service Permit (“F&B Service Permit”).

Under the Food Safety Law, if found to be in violation of the Food Safety Law, the food

producer or distributer shall be penalised with warning, rectification orders, forfeiture of

illegal gains, as well as tools, equipment, materials and other objects used for illegal

production and distribution, fines, suspension of production and/or operation, revocation of

production and/or business licence, or criminal liabilities. Any gains and other assets of any

restaurant operating without the requisite license will be confiscated, and the relevant

restaurant may suffer a governmental fine up to ten times of the prices of food sold.

(b) Food Safety Regulations

The Implemented Regulations of the Food Safety Law provide further details of (i) the

measures to be taken by food producers and business operators in order to ensure food

safety; and (ii) situations where penalties under the Food Safety Law may be imposed.

(c) Licensing of F&B Services

Under the Administrative Measures for Licensing of F&B Services, the Food and Drug

Administration of the PRC (“FDA”) is responsible for the nationwide administration of the

licensing for F&B services, and the local FDA departments are responsible for the

administration of the licensing for F&B services within their respective administration

regions.

F&B outlets are required to obtain the F&B Service Permit for each location at which F&B

services are provided.

A F&B Service Permit is typically valid for three years and may not be transferred in respect

of another location or to another person.

Alcohol Distribution Measures

Under the Measures for Administration of Alcohol Distribution, a person or an entity wholesaling

or retailing alcohol must within 60 days of acquiring a business licence, make certain filings in

respect of alcohol distribution. Failure to comply may result in a fine of up to RMB2,000 being

imposed by the relevant authority.

Notwithstanding the foregoing, the Alcohol Distribution Measures further specify that in regions

where a licensing system has been established, the licensing system shall continue to be effective

and the licence for alcohol distribution will be deemed as the filings for alcohol distribution.


105

Fire Protection Law

Under the Fire Protection Law of the PRC, before the use or start of business of public places,

such as ballroom, cinema, hotel, restaurant, shopping centre, and trade market, an application

shall be submitted to the department for fire protection of the local public security agency for

inspection. These places may only be put to use or start business operation when they pass the

inspection for security against fire.

Environmental Protection Law

Under the Environmental Protection Law of the PRC, all entities and individuals have an obligation

to protect the environment. All construction, rebuilding and expansion of F&B and entertainment

service facilities, and change from leasing buildings to F&B and entertainment service facilities

are required to apply to the local environmental protection administrative authorities for approvals.

Our subsidiary in the PRC, which is mainly engaged in the F&B services, has obtained the

aforesaid approvals from local authorities.

As at the Latest Practicable Date, to the best of our Directors’ knowledge, our Group is in

compliance with all applicable laws and regulations that are material to our business operations.


106

Singapore

Currently there are no Singapore governmental laws, decrees, regulations and other legislation

that may affect the following:–

(a) the import or export of capital, including the availability of cash and cash equivalents for use

by our Group; and

(b) the remittance of dividends, interest or other payments to non-resident holders of our

Company’s securities.

PRC

The Regulation of the PRC on Foreign Exchange Administration (“Foreign Exchange

Administrative Regulation”) was first adopted on 1 April 1996, amended on 14 January 1997 and

was further amended on 5 August 2008. The Foreign Exchange Administrative Regulation is one

of the most critical legal bases for the supervision and administration on foreign exchange by the

PRC government authorities.

According to the Foreign Exchange Administrative Regulation, (1) for foreign exchange payments

under current account, organisations in the PRC, including foreign-invested enterprises, may

purchase, sell and/or remit foreign currencies at the banks authorised to conduct foreign

exchange business upon the enterprise providing valid commercial documents evidencing the

international transactions; (2) for foreign exchange payments under capital account items, those

payments of foreign currencies and purchase of foreign currencies shall be made using

self-owned foreign currency or foreign currency purchased from financial institutions engaging in

conversion and sale of foreign currencies by presenting the valid documentation where statutory

approval formalities shall be processed prior to making foreign exchange payments.

If a foreign-invested enterprise is legally terminated, after liquidation and tax payment in

accordance with related regulations and rules of the PRC, the RMB owned by foreign investor(s)

can be wired abroad by financial institutions which operate the foreign exchange sale or

settlement business.

EXCHANGE CONTROLS

107

MANAGEMENT REPORTING STRUCTURE

Our management reporting structure as at the Latest Practicable Date is set out below:

Board of Directors

CEO and Executive Chairman

Alan Goh

Executive Director

Catherine TanChief Financial Officer

Lee Li Eng

DIRECTORS

Our Directors are entrusted with the responsibility for our overall management. The particulars of

our Directors as at the date of this Offer Document are set out below:–

Name Age Address Designation

Alan Goh(1)(2) 56 c/o 1 Sims Lane #05-05

Singapore 387355

CEO and Executive

Chairman

Catherine Tan(1)(2) 56 c/o 1 Sims Lane #05-05

Singapore 387355

Executive Director

Goh Shen Shu Donovan(2) 27 c/o 1 Sims Lane #05-05

Singapore 387355

Non-Executive Director

Ang Miah Khiang 62 c/o 1 Sims Lane #05-05

Singapore 387355

Lead Independent Director

Chow Wen Kwan 42 c/o 1 Sims Lane #05-05

Singapore 387355

Independent Director

Eric Low Siak Meng 67 c/o 1 Sims Lane #05-05

Singapore 387355

Independent Director

Notes:–


(2) Goh Shen Shu Donovan is the son of Alan Goh and Catherine Tan.


108

Information on the business and working experiences, education and professional qualifications,

if any, and areas of responsibilities of our Directors is set out below:-

Alan Goh is our CEO and Executive Chairman. He is the founder and managing director of Katrina

Singapore. He is responsible for the formulation of our Group’s strategic directions and expansion

plans in Singapore and overseas markets, and managing our Group’s overall business

development. He is responsible for implementing the goals and objectives of our Group, and

sourcing new business opportunities and new strategic locations within Singapore and overseas.

Alan Goh obtained his Technician Diploma in Civil Engineering from Singapore Polytechnic in

1979 and his Diploma in Marketing Management from Ngee Ann Polytechnic in 1987. Thereafter,

Alan Goh attained his Masters of Business Administration (General Business Administration) from

University of Hull in 1995.

Catherine Tan is our Executive Director. She is our co-founder and director of Katrina Singapore.

She is responsible for the formulation and introduction of our Group’s new concept ideas and

menus for the new and existing brands. She assists our CEO and Executive Chairman in

managing the Group’s overall business development and operations, and is actively involved in

formulating strategies to improve the processes in our Group’s restaurants and cafes and to

continually raise the standards of quality and service. Catherine Tan attained a GCE “O” Level

certification in 1975.

Goh Shen Shu Donovan is our Non-Executive Director and was appointed to our Board on

29 June 2016. Goh Shen Shu Donovan started his career with Toshiba Singapore Pte. Ltd. in 2011

as a business specialist. From 2011 to 2013, he joined CIMB Securities (Singapore) Pte. Ltd. as

assistant vice president involved in equity sales. Goh Shen Shu Donovan is currently the director

of CDG Capital Pte. Ltd. where he is responsible for the management and operations. He is also

a director of IT Works Solutions Pte. Ltd. which is a company that offers assistance to businesses

by providing information technology solutions. Goh Shen Shu Donovan can contribute in regard

to information technology matters relating to our Group. He graduated with a Bachelor of

Commerce in Finance from University of New South Wales in 2009.

Ang Miah Khiang is our Lead Independent Director and was appointed to our Board on

29 June 2016. Ang Miah Khiang served with GE Commercial Financing (Singapore) Ltd. (formerly

known as Heller Financial (Singapore) Ltd) from 1979 to 2004, where he was a general manager

in 1984, and held the position of managing director from 1991 to 2004, and was concurrently

acting as the regional director for the Asia Pacific region from 2001 to 2004. From 2004 to 2008,

Ang Miah Khiang was appointed executive director of DP Information Network Pte. Ltd., and from

2010 to 2011, he served as director, corporate advisory, with Stone Forest Corporate Advisory Pte.

Ltd.. Ang Miah Khiang also serves as an independent director on the board of Baker Technology

Limited, which is listed on the Mainboard of the SGX-ST, and PS Group Holdings Ltd. and Soo Kee

Group Ltd. which are listed on Catalist. Ang Miah Khiang graduated with a Bachelor of

Accountancy from the National University of Singapore and is a Fellow of the Institute of

Singapore Chartered Accountants.


109

Chow Wen Kwan is our Independent Director and was appointed to our Board on 29 June 2016.

He is currently a partner of Bird & Bird ATMD LLP in Singapore. Chow Wen Kwan has more than

15 years of experience in legal practice and his practice focuses on mergers and acquisitions,

private equity and equity and debt capital markets. He had worked in Fried, Frank, Harris, Shriver

& Jacobson in New York, Hogan Lovells in Hong Kong and White & Case LLP and Drew & Napier

LLC in Singapore. Chow Wen Kwan graduated with a Bachelor of Laws from the National

University of Singapore in 1998 and a Master of Laws from the University of Virginia in 1999. He

also holds a certificate in Governance as Leadership from Harvard Kennedy School. Chow Wen

Kwan is qualified to practise in Singapore and New York, United States of America.

Eric Low Siak Meng is our Independent Director and was appointed to our Board on 29 June

2016. Eric Low Siak Meng served as the business development director of Overseas Assurance

Corporation Ltd. from 1999 to 2001 and from 2001 to 2003, he was an executive director of Sim

Lian Group Limited. In July 2003, he joined Guy Carpenter & Company Pte. Ltd. as a consultant

and from August 2003, he also served as the chief executive officer of Marina Country Club Pte.

Ltd.. Eric Low Siak Meng is currently the managing director of Generic Consulting Pte. Ltd.. He

also serves as a board member and internal audit committee chairman for the People’s

Association and a board member and finance committee member for the Singapore Red Cross.

Eric Low Siak Meng was conferred the Public Service Medal (PBM) in 1989, the Public Service

Star (BBM) in 1999 and in 2008 the Public Service Star Bar – BBM(L). On 1 September 2015, Eric

Low Siak Meng was appointed a Justice of Peace for Singapore for a period of five years. He

obtained a Diploma in General Insurance from the Australian Insurance Institute.

Ang Miah Khiang, Chow Wen Kwan and Eric Low Siak Meng have prior experience as directors

of public listed companies in Singapore. Alan Goh, Catherine Tan and Goh Shen Shu Donovan do

not have prior experience as directors of public listed companies in Singapore but have received

the relevant training to familiarise themselves with the roles and responsibilities of a director of a

company listed on Catalist.

Save for (i) our Executive Director, Catherine Tan who is the spouse of our CEO and Executive

Chairman, Alan Goh; and (ii) our Non-Executive Director, Goh Shen Shu Donovan who is the son

of Alan Goh and Catherine Tan, none of our Directors has any family relationship with another

Director or with any Executive Officer or Substantial Shareholder of our Company.

There was no agreement or arrangement with our Substantial Shareholders, customers or

suppliers pursuant to which we will appoint any of them or any person nominated by any of them

as our Director.


110

None of our Independent Directors sits on the board of any of our subsidiaries. The list of present

and past directorships of each Director over the last five years preceding the date of this Offer

Document excluding those held in our Company, is set out below:–

Name Present Directorships Past Directorships

Alan Goh Group corporations

Bali Thai Food Catering Pte. Ltd.

Bayang at the Quay Pte. Ltd.

Beijing BaliThai Restaurants Co., Ltd.

Katrina Holdings Sdn. Bhd.

Katrina Online Pte. Ltd.

Katrina Singapore Pte Ltd

Renn Thai Pte Ltd

Other corporations

Nil

Group corporations

AKDK Foods Pte Ltd(1)

Honguo (BJ) Pte. Ltd.(1)

Hutong (CQ) Pte. Ltd.(1)

Katrina (Scotts YTF) Pte. Ltd.(1)

Katrina (NRTHPT) Pte Ltd(1)

Katrina Parkway Pte. Ltd.(1)

Katrina Toa Payoh Pte. Ltd.(1)

Streets Restaurants Pte. Ltd.(1)

Streets (IMM) Pte. Ltd.(1)

Streets (EHUB) Pte. Ltd.(1)

Streets (RC) Pte. Ltd.(1)

Other corporations

Nil

Catherine Tan Group corporations

Bali Thai Food Catering Pte. Ltd.

Bayang at the Quay Pte. Ltd.

Katrina Holdings Sdn. Bhd.

Katrina Online Pte. Ltd.

Katrina Singapore Pte Ltd

Renn Thai Pte Ltd

Other corporations

Nil

Group corporations

AKDK Foods Pte Ltd (1)

Balithai Restaurants Pte. Ltd.(1)

Bali Thai (IMM) Pte. Ltd.(1)

Bali Thai (TM) Pte. Ltd.(1)

Bali Thai (Sun) Pte. Ltd.(1)

Bali Thai (ION) Pte. Ltd.(1)

Bali Thai (WM) Pte. Ltd.(1)

Bali Thai (NS) Pte. Ltd.(1)

Honguo (BJ) Pte. Ltd.(1)

Hutong (CQ) Pte. Ltd.(1)

Katrina (Scotts YTF) Pte. Ltd.(1)

Katrina (NRTHPT) Pte Ltd(1)

Katrina Parkway Pte. Ltd.(1)

Katrina Toa Payoh Pte. Ltd.(1)

Other corporations

Nil


111


Goh Shen Shu

Donovan

Group corporations

Nil

Other corporations

CDG Capital Pte. Ltd.

IT Works Mobile Apps Pte. Ltd.

IT Works ERP Systems Pte. Ltd.

IT Works Property App Pte. Ltd.

IT Works Inventory Systems Pte. Ltd.

IT Works HR Systems Pte. Ltd.

IT Works Accounting Systems

Pte. Ltd.

IT Works Solutions Pte. Ltd.

Singapore Enterprise Systems

Pte. Ltd.

Sunspot Pte. Ltd.

Group corporations

Nil

Other corporations

Alcohol Delivery Pte. Ltd.(1)

Bizfunding Pte. Ltd.(1)

Fitness & Healthcare Mobile

Systems Pte. Ltd.(1)

IT Works Insurance App

Pte. Ltd.(1)

IT Works Taxi App Pte. Ltd.(1)

SDK Holdings Pte. Ltd.(1)

SG Business Training

Pte. Ltd.(1)

Transport & Delivery Mobile

Systems Pte. Ltd.(1)

Ang Miah Khiang Group corporations

Nil

Other corporations

Baker Technology Limited

PS Group Holdings Ltd.

Soo Kee Group Ltd.

SPRING Equity Investments

Pte. Ltd.

Group corporations

Nil

Other corporations

DP Information Network Pte Ltd

Heng Long International Ltd.

Ley Choon Group Holdings

Limited

SEF Group Ltd.

SPRING SEEDS Capital

Pte. Ltd.

Uni-Asia Holdings Limited

Chow Wen Kwan Group corporations

Nil

Other corporations

Hafary Holdings Limited

SMJ International Holdings Ltd.

Versalink Holdings Limited

Group corporations

Nil

Other corporations

Aras Kuasa Resources Pte. Ltd.

Ley Choon Group Holdings

Limited

Weiye Holdings Limited

Zhongxin Fruit and Juice Limited

Eric Low Siak

Meng

Group corporations

Nil

Other corporations

Generic Consulting Pte. Ltd.

Group corporations

Nil

Other corporations

Aptitude Management

Consulting Pte. Ltd.

Note:

(1) This company has been struck-off.


112

EXECUTIVE OFFICER

Our Executive Directors are assisted by our Executive Officer, whose particulars are set out

below:

Name Age Address Designation

Lee Li Eng 52 c/o 1 Sims Lane #05-05

Singapore 387355

CFO

Information on the business and working experience, education and professional qualifications, if

any, and areas of responsibilities of our Executive Officer are set out below:–

Lee Li Eng joined our Company as CFO in October 2015 where she is responsible for the overall

financial management, reporting and internal controls matters for our Group. She is also part of

the management team to steer the strategic direction of the Group. Lee Li Eng has approximately

30 years of diverse experience in audit and accounting. She started her career as an auditor from

1985 to 1988 in a mid-tier Certified Public Accountant (CPA) firm. In 1988, she joined Hong Leong

Group as an internal auditor. Between 1991 and 2009, she held various finance positions and

spent the last 15 years working in the capacity of controller and business partner roles in

multi-national corporations in the oil and gas, engineering, manufacturing and chemicals sectors,

including Flowserve Corporation, Cytec Solvay Group and McDermott International Inc.. Prior to

joining our Group, she was the group financial controller at EnGro Corporation Limited, a company

listed on the Mainboard of the SGX-ST, for five years since August 2009. Lee Li Eng graduated

with a Bachelor of Accountancy from the National University of Singapore. She is a member of the

Institute of Singapore Chartered Accountants.

Our Executive Officer does not have any family relationship with any Directors or Substantial

Shareholders of our Company.

There was no agreement or arrangement with our Substantial Shareholders, customers or

suppliers pursuant to which we will appoint any of them or any person nominated by any of them

as our Executive Officer.

The list of present and past directorships of the Executive Officer over the last five years

preceding the date of this Offer Document excluding those held in our Company, is set out below:


Lee Li Eng Group corporations

Nil

Other corporations

Nil

Group corporations

Nil

Other corporations

HB Investments (China) Pte. Ltd.(1)

HBS Investments Pte Ltd(1)

Ho Bee Cove Pte. Ltd.(1)

Note:–

(1) Lee Li Eng was appointed as the alternate director of these companies.


113

STAFF

As at 31 March 2016, we have a workforce of approximately 467 full-time staff, 268 permanent

part-time staff, 36 temporary part-time staff and 16 trainees. We do not experience any significant

seasonal fluctuations in our number of staff. None of our staff is unionised. There has not been

any incidence of work stoppages or labour disputes that affected our operations. Accordingly, we

consider our relationship with our staff to be good.

The number of staff of our Group as at the end of each of periods under review, segmented by

function are as follows:–

< Number of Staff(2) >

As at

31 December

2013

As at

31 December

2014

As at

31 December

2015

Function

Management(1) 2 2 3

Marketing 1 1 2

Finance, Human Resource

and Administration 17 17 14

Restaurant Operations 629 700 709

Total 649 720 728

Notes:–

(1) Executive Directors and Executive Officer are classified under management.

(2) The number of staff includes staff in Singapore and overseas, permanent part-time staff, temporary part-time staff

and trainees.


114

REMUNERATION OF DIRECTORS, EXECUTIVE OFFICER AND RELATED STAFF

Directors and Executive Officer

The remuneration paid to our Directors and Executive Officer (which includes benefits-in-kind and

bonuses) for services rendered to us on an aggregate basis and in remuneration bands of

S$250,000(1)

during FY2014 and FY2015 (being the two most recent completed financial years)

and as estimated for FY2016 excluding bonus under any profit-sharing plan or any other

profit-linked agreement(s) is as follows:–

FY2014 FY2015 FY2016(2)

(estimated)

Directors

Alan Goh Band A Band A Band C

Catherine Tan Band A Band A Band B

Goh Shen Shu Donovan N.A(3) N.A(3) Band A

Ang Miah Khiang N.A(3) N.A(3) Band A

Chow Wen Kwan N.A(3) N.A(3) Band A

Eric Low Siak Meng N.A(3) N.A(3) Band A

Executive Officer

Lee Li Eng N.A(3) Band A Band A

Notes:–

(1) Band A: Compensation from S$0 to S$250,000 per annum.

Band B: Compensation from S$250,001 to S$500,000 per annum.

Band C: Compensation from S$500,001 to S$750,000 per annum.

(2) The estimated amount for FY2016 does not take into account the performance bonuses that our Executive Directors

are entitled to receive under their respective Service Agreements, further details of which are set out in the “Service

Agreements” section of this Offer Document.

(3) Not under our appointment as at the relevant period.

Related Employee

Save for Goh Keng Hwee, restaurant manager of Bali Thai at Serangoon NEX who is the brother

of our CEO and Executive Chairman, Alan Goh, as at the Latest Practicable Date, we do not have

other employees who are related to our Directors or Substantial Shareholders.

The remuneration of any staff who are related to our Directors or Substantial Shareholders will be

reviewed annually by our Remuneration Committee to ensure that their remuneration packages

are in line with our staff remuneration guidelines and commensurate with their respective job

scopes and level of responsibilities. Any bonuses, pay increases and/or promotions for these

related staff will also be subject to the review and approval of our Remuneration Committee. In

addition, any new employment of related staff and the proposed terms of their employment will

also be subject to the review and approval of our Remuneration Committee. In the event that a

member of our Remuneration Committee is related to the staff under review, he will abstain from

the review.


115

SERVICE AGREEMENTS

Our Company has entered into separate Service Agreements with our CEO and Executive

Chairman, Alan Goh and our Executive Director, Catherine Tan. The Service Agreements are valid

for an initial period of three years upon admission of our Company on Catalist. Upon the expiry

of the initial period of three years, the employment of the Executive Directors shall be

automatically renewed for a period of three years (and thereafter automatically renewed every

three years) on such terms and conditions as the parties may agree. During the initial period of

three years, either party may terminate the Service Agreements at any time by giving to the other

party not less than six months’ notice in writing, or in lieu of notice, payment of an amount

equivalent to six months’ salary based on the Executive Director’s last drawn monthly salary. Our

Group may also terminate the employment of any of the Executive Directors at any time without

notice or payment in lieu of notice under the following circumstances:–

(i) if the Executive Director is guilty of any gross default or grave misconduct in connection with

or affecting the business of our Group;

(ii) in the event of any serious or repeated breach or non-observance by the Executive Director

of any of the stipulations contained in the Service Agreements;

(iii) if the Executive Director becomes bankrupt or makes any composition or enters into any

deed of arrangement with his creditors;

(iv) if the Executive Director shall become of unsound mind; or

(v) If the Executive Director commits any act of criminal breach of trust or dishonesty.

Pursuant to the terms of the Service Agreements, our CEO and Executive Chairman, Alan Goh

and our Executive Director, Catherine Tan are entitled to a monthly salary of S$35,000 and

S$25,000, respectively. All reasonable travelling, hotel, entertainment, and other expenses

incurred by the Executive Directors in connection with our business will also be borne by our

Group. In addition, all reasonable medical, mobile, land line, internet and internet television

expenses of our Executive Directors in accordance with our personnel policy shall be reimbursed

by our Group. Our CEO and Executive Chairman, Alan Goh, is entitled to the use of a car (with

an initial acquisition price of a budget not exceeding S$480,000) and our Executive Director,

Catherine Tan, is entitled to the use of a car (with an initial acquisition price of a budget not

exceeding S$290,000) that are or will be owned by our Company, and our Executive Directors may

top up the balance price for their respective cars where it exceeds the budget. The cars, to which

our CEO and Executive Chairman, Alan Goh, and our Executive Director, Catherine Tan, will be

entitled to use, will be accounted for as fixed assets of our Company.


116

Our Executive Directors are also entitled to a fixed bonus of three months’ salary in respect of

each financial year and an annual performance bonus based on the audited PBT of our Group.

Where the employment of the Executive Directors is less than a full financial year, the fixed bonus

and incentive bonus for that financial year shall be apportioned in respect of the actual number of

days of the employment of the Executive Director on the basis of a 365-day financial year. PBT

shall in relation to each financial year means our Group’s audited consolidated profit before tax

(after deducting profit before tax attributable to minority interests) and before the performance

bonus. The amount of performance bonus will be determined as follows:–

Performance Bonus

Alan Goh Catherine Tan

Where PBT is S$6

million or less

5% of PBT 4% of PBT

Where PBT is more

than S$6 million but is

S$9 million or less

S$300,000 plus 6% of PBT in

excess of S$6 million



Where PBT is more

than S$9 million but is

S$11 million or less





Where PBT is more

than S$11 million





Under the Service Agreements, the salary of the Executive Directors is subject to review by the

Remuneration Committee after the financial statements of our Group for the immediate preceding

financial year have been audited. The relevant Executive Director shall abstain from voting in

respect of any resolution or decision to be made by our Board in relation to the terms and renewal

of his or her Service Agreements.

Under the Service Agreements, each Executive Director has covenanted that he/she or his/her

associates will not do business with any person who has done business with us or entice away any

of our employees in connection with the carrying on of any business similar to or in competition

with our business for 12 months after ceasing to be employed by our Group. Each Executive

Director has also covenanted that he/she or his/her associates will not carry on any activity or

business in competition with us within Singapore or any country in which we have operations or

carried on business, for 12 months after ceasing to be employed under his/her Service

Agreements.

Directors’ fees do not form part of the terms of the Service Agreements as these will only be paid

out to Directors after the approval of Shareholders at our Company’s annual general meeting.

Had the Service Agreements been in existence since the beginning of FY2015, the aggregate

remuneration paid to the Executive Directors would have been approximately S$1.3 million

instead of S$0.4 million and our PBT would have been approximately S$4.2 million (instead of

S$5.1 million) and our PAT would have been approximately S$3.5 million (instead of S$4.3

million).

Save as disclosed, there are no existing or proposed service agreements between our Group 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 our subsidiaries which provide for benefits upon

termination of employment.


117

CORPORATE GOVERNANCE

Our Directors recognise the importance of corporate governance and the offering of high

standards of accountability to our Shareholders. Our Board of Directors has formed three

committees: (i) the Audit Committee, (ii) the Remuneration Committee and (iii) the Nominating

Committee.

Nominating Committee

Our Nominating Committee comprises Ang Miah Khiang, Chow Wen Kwan and Eric Low Siak

Meng. The chairman of the Nominating Committee is Eric Low Siak Meng.

Our Nominating Committee will be responsible for:–

(a) re-nomination of our Directors having regard to each Director’s contribution and

performance;

(b) determining the composition of the Board, taking into account the future requirements of our

Company, the need for diversity in regard to the Board composition and other considerations

such as those set out in Guideline 2.6 of the Code of Corporate Governance 2012;

(c) determining annually whether or not a Director is independent;

(d) deciding whether or not a Director is able to and has been adequately carrying out his duties

as a director; and

(e) assessing the effectiveness of the Board as a whole and the contribution of each Director to

the effectiveness of the Board.

Each member of the Nominating Committee shall abstain from voting any resolutions in respect

of the assessment of his performance or re-nomination as Director.

Generally, the Nominating Committee does not appoint new directors, but nominates them to the

Board which retains the final discretion in appointing such new directors.

Our Nominating Committee, after having:–

(a) noted that our Independent Directors are aware of their responsibilities and obligations owing

to each of the companies whom they serve as directors as well as the time commitment and

duties required from them given their past experience acting as directors of listed companies;

and

(b) considered that Independent Directors are supported by their respective staff in carrying out

the duties of their full time employments,

is of the opinion that Ang Miah Khiang, Chow Wen Kwan and Eric Low Siak Meng are suitable to

be appointed as our Independent Directors, notwithstanding that Chow Wen Kwan and Eric Low

Siak Meng are concurrently holding full time employment and serving as an independent director

of other listed companies. Each of the Independent Directors had also informed the respective

nominating committees of the listed companies whom they serve as directors with regard to their

appointments as our Independent Directors.


118

Our Sponsor and Issue Manager, after having considered the opinion of our Nominating

Committee as disclosed above, and its interactions with our Independent Directors, is of the view

that Ang Miah Khiang, Chow Wen Kwan and Eric Low Siak Meng are able to devote sufficient time

to our Company to carry out their duties as our Independent Directors.

Remuneration Committee

Our Remuneration Committee comprises Chow Wen Kwan, Ang Miah Khiang and Eric Low Siak

Meng. The chairman of the Remuneration Committee is Chow Wen Kwan.

Our Remuneration Committee will recommend to our Board a framework of remuneration for our

Directors and Executive Officers, and determine specific remuneration packages for each

Executive Director.

The recommendations of our Remuneration Committee should be submitted for endorsement by

the entire Board. All aspects of remuneration, including but not limited to Directors’ fees, salaries,

allowances, bonuses, options and benefits-in-kind shall be covered by our Remuneration

Committee. Each member of the Remuneration Committee shall abstain from voting any

resolutions in respect of his remuneration package. The remuneration of employees who are

related to our Directors or Substantial Shareholders will also be reviewed annually by our

Remuneration Committee to ensure that their remuneration package are in line with our staff

remuneration guideline and to commensurate with their respective job scopes and level of

responsibilities.

Audit Committee

Our Audit Committee comprises Ang Miah Khiang, Chow Wen Kwan and Eric Low Siak Meng. The

chairman of the Audit Committee is Ang Miah Khiang.

Our Independent Directors do not have any existing business or professional relationship of a

material nature with our Group, our Directors or Substantial Shareholders.

Our Audit Committee will assist our Board in discharging their responsibility to safeguard our

assets, maintain adequate accounting records and develop and maintain effective systems of

internal control, with the overall objective of ensuring that our management creates and maintains

an effective control environment in our Group.

Our Audit Committee will provide a channel of communication between our Board, our

management and our external auditor on matters relating to audit.

Our Audit Committee shall meet periodically to perform the following functions:–

(a) review the audit plans of our external auditor and internal auditor, including the results of our

external and internal auditors’ review and evaluation of our system of internal controls

including cash management controls;

(b) review the annual consolidated financial statements and our external auditor’s report on

those financial statements, and discuss any significant adjustments, major risk areas,

changes in accounting policies, compliance with Singapore Financial Reporting Standards,

concerns and issues arising from their audits including any matters which the auditor may

wish to discuss in the absence of management, where necessary, before submission to our

Board for approval;


119

(c) review the periodic consolidated financial statements comprising the profit and loss

statements and the balance sheets and such other information required by the Catalist

Rules, before submission to our Board for approval;

(d) review and discuss with our external and internal auditors (if any), any suspected fraud,

irregularity or infringement of any relevant laws, rules and regulations, which has or is likely

to have a material impact on our Group’s operating results or financial position and our

management’s response;

(e) review the co-operation given by our management to our external auditor;

(f) consider the appointment or re-appointment of the external auditor;

(g) review and ratify any interested person transactions falling within the scope of Chapter 9 of

the Catalist Rules;

(h) review potential conflicts of interests (if any);

(i) review the procedures by which employees of our Group may, in confidence, report to the

chairman of the Audit Committee, possible improprieties in matters of financial reporting or

other matters and ensure that there are arrangements in place for independent investigation

and follow-up actions thereto;

(j) undertake such other reviews and projects as may be requested by our Board, and report to

our Board its findings from time to time on matters arising and requiring the attention of our

Audit Committee; and

(k) undertake generally such other functions and duties as may be required by law or the Catalist

Rules, and by such amendments made thereto from time to time.

Apart from the duties listed above, our Audit Committee shall commission and review the findings

of internal investigations into matters where there is any suspected fraud or irregularity, or failure

of internal controls or infringement of any Singapore law, rule or regulation which has or is likely

to have a material impact on our Group’s operating results and/or financial position. Each member

of the Audit Committee shall abstain from voting from any resolutions in respect of matters in

which he is interested.

Our Audit Committee shall also commission an annual internal control audit until such time as our

Audit Committee is satisfied that our Group’s internal controls are robust and effective enough to

mitigate our Group’s internal control weakness (if any). Prior to decommission of such annual

audit, our Board is required to report to the SGX-ST and the Sponsor on how the key internal

control weaknesses have been rectified, and the basis for the decision to decommission the

annual internal control audit. Thereafter, such audits may be initiated by our Audit Committee as

and when it deems fit to satisfy itself that our Group’s internal controls remain robust and effective.

Upon completion of the internal control audit, appropriate disclosure will be made via SGXNET of

any material, price-sensitive internal control weaknesses and any follow-up actions to be taken by

our Board.


120

Currently, based on the risk management and internal controls established and maintained by our

Group, work performed by the internal and external auditors, and reviews performed by our

management and our Board, our Board, to the best of its knowledge and belief, with the

concurrence of our Audit Committee, is of the opinion that the risk management and internal

controls of our Group are adequate to address financial, operational, compliance and information

technology risks of our Group.

Our Audit Committee, after having:–

(a) conducted interviews with Lee Li Eng;

(b) considered the qualifications and past working experiences of Lee Li Eng (as described in

the “Directors, Executive Officer and Staff” section of this Offer Document); and

(c) noted the absence of negative feedback on Lee Li Eng from Ernst & Young LLP, the

Independent Auditor and Reporting Accountant,

is of the view that Lee Li Eng is suitable for the position of CFO of our Group.

Further, after making all reasonable enquiries, and to the best of their knowledge and belief,

nothing has come to the attention of our Audit Committee members to cause them to believe that

Lee Li Eng does not have the competence, character and integrity expected of a CFO of a listed

issuer.

BOARD PRACTICES

Our Constitution provides that our Board will consist of not less than two Directors. None of our

Directors is appointed for any fixed terms.

Generally, our Directors are appointed by our Shareholders at a general meeting, and an election

of Directors takes place annually. One-third (or the number nearest one-third) of our Directors, are

required to retire from office at each annual general meeting. Every Director must retire from office

at least once in every three years. However, a retiring Director is eligible for re-election at the

meeting at which he retires.


121

In general, transactions between our Group and any of its interested persons (namely, our

Directors or Controlling Shareholders or their respective Associates) are known as interested

person transactions. The following discussions on material interested person transactions for the

Relevant Period, is based on our Group and interested persons as construed accordingly.

Save as disclosed below and in the “Dividend Policy” and “Restructuring Exercise” sections of this

Offer Document, none of our Directors, Controlling Shareholders or their respective Associates

(each, an Interested Person) was or is interested in any material transaction undertaken by our

Group for the 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 PERSONS

The following persons or companies are considered “Interested Persons” for the purposes of this

section:

Alan Goh : Our CEO, Executive Chairman and Controlling Shareholder

(who is also the spouse of Catherine Tan)

Catherine Tan : Our Executive Director and Controlling Shareholder (who is

also the spouse of Alan Goh)

IT Works Solutions Pte Ltd : A private company incorporated in Singapore which is

primarily engaged in the business of providing information

technology services and 50% of its issued shares are owned

by Goh Shen Shu Donovan. He is our Non-Executive Director

and the son of Alan Goh and Catherine Tan.

PAST TRANSACTIONS

Advances from our Group to our CEO and Executive Chairman

Our Group had provided advances to our CEO and Executive Chairman, Alan Goh, during the

Relevant Period for his personal requirements, which were made on a preferential basis as they

were interest-free, unsecured and had no fixed terms of repayment. The amounts of advances

provided by our Group to our CEO and Executive Chairman, Alan Goh, as at the end of each of

the Relevant Period and as the Latest Practicable Date were as follows:

Amounts owing from

Interested Person

As at

31 December

2013

(S$’000)

As at

31 December

2014

(S$’000)

As at

31 December

2015

(S$’000)

As at the Latest

Practicable Date

(S$’000)

Alan Goh 628 162 – –


122

During the Relevant Period, the largest amount due from our CEO and Executive Chairman, Alan

Goh, was approximately S$1.4 million. As at the Latest Practicable Date, all the aforesaid

amounts due from our CEO and Executive Chairman, Alan Goh, have been fully settled by him.

As these advances were interest-free, unsecured and had no fixed terms of repayment, our

Directors are of the view that these transactions were not conducted on an arm’s length basis and

were not on normal commercial terms. However, these transactions were not prejudicial to the

interests of our Group or our Company’s minority shareholders as Alan Goh has fully settled the

amounts due. Following the admission of our Company to Catalist, we have no intention to provide

such advances to him.

Advances from our Executive Director to our Group

Declared dividends which were not paid were treated as advances to our Group from our

Executive Director, Catherine Tan during the Relevant Period. These advances were made on a

preferential basis as they were interest-free, unsecured and had no fixed terms of repayment. The

amounts owing by our Group to our Executive Director, Catherine Tan, as at the end of each of

the Relevant Period and as the Latest Practicable Date were as follows:

Amounts owing to

Interested Person

As at

31 December

2013

(S$’000)

As at

31 December

2014

(S$’000)

As at

31 December

2015

(S$’000)

As at the Latest

Practicable Date

(S$’000)

Catherine Tan 1,000 1,000 – –

During the Relevant Period, the largest amount due to our Executive Director, Catherine Tan, was

approximately S$1.0 million. As at the Latest Practicable Date, all the aforesaid amounts owing to

our Executive Director, Catherine Tan, have been settled by our Group. As these advances were

interest-free, unsecured and had no fixed terms of repayment, our Directors are of the view that

these transactions were not conducted on an arm’s length basis and were not on normal

commercial terms but these transactions were not prejudicial to the interests of our Group or our

Company’s minority shareholders. Following the admission of our Company to Catalist, we have

no intention to obtain such advances from her.

Provision of personal guarantees by our CEO and Executive Chairman, and our Executive

Director for lease granted to Katrina Singapore

During the Relevant Period, our CEO and Executive Chairman, and our Executive Director,

provided joint and several personal guarantees for a lease granted to Katrina Singapore for one

of our restaurants in Singapore. Details of the lease commitment secured by personal guarantees

provided by these Interested Persons during the Relevant Period are as follows:

Landlord Purpose

Largest amount

guaranteed during

the Relevant Period

Amount guaranteed

as at the Latest

Practicable Date

(S$’000)

Novena Square

Development Ltd

To secure the lease

of the Bali Thai

restaurant at Novena

Square

597(1) –


123

Note:

(1) The amount disclosed is the minimum lease payment under operating lease (such as base rent, advertising and

promotion fees, and service charges). The lease contained provision for payment components such as sales

commission and percentages of gross turnover payable to the landlord, which were variable, were payable at

different intervals and were also secured by the above mentioned lease guarantees. For comparable purposes,

therefore, these variable payment components have been excluded from the disclosure above.

As no consideration was paid to Alan Goh or Catherine Tan for the provision of the aforesaid

personal guarantees, our Directors are of the view that these transactions were not conducted on

an arm’s length basis and were not on normal commercial terms but they were not prejudicial to

the interests of our Group or our Company’s minority shareholders. The aforesaid lease has

expired and the aforesaid personal guarantees have also ceased.

Assignment of Trademark

On 17 February 2016, Hutong (CQ) Pte. Ltd. assigned to Katrina Singapore the “Hutong”

trademark that is registered for the operation of restaurants. Please refer to the “Intellectual

Property” section of this Offer Document for further details of the aforesaid trademark. The

aforesaid trademark was assigned at a nominal consideration of S$1.00, which has been settled.

The transaction was not conducted on an arm’s length basis and not on normal commercial terms

as the consideration was for a nominal sum but they were not prejudicial to the interests of our

Group or our Company’s minority shareholders.

Acquisition of equity interest in Beijing BaliThai

Beijing BaliThai was incorporated on 11 September 2009 and since incorporation, Katrina

Singapore held the entire equity interest in Beijing BaliThai on trust in favour our CEO and

Executive Chairman, Alan Goh and our Executive Director, Catherine Tan, equally. Please see

“Our Subsidiaries” section of this Offer Document for more details. On 1 January 2016, Katrina

Singapore had agreed to acquire the entire equity interest in Beijing BaliThai from our CEO and

Executive Chairman, Alan Goh and our Executive Director, Catherine Tan at an aggregate cash

consideration of S$602,124.51. The parties mutually agreed on the consideration and the terms

of the transaction were determined based on the registered capital of Beijing BaliThai.

Accordingly, the aforesaid trust arrangement was revoked. Please refer to the “Material Contracts”

section of this Offer Document. Katrina Singapore has paid the consideration to Alan Goh and

Catherine Tan in February 2016. Our Directors are of the view that the above transaction was not

carried out on an arm’s length basis and not on normal commercial terms as there was no

independent valuation of the equity interest in Beijing BaliThai, but they were not prejudicial to the

interests of our Group or our Company’s minority shareholders.


124

Transaction with director-related company

(i) Advances from our Group for the benefit of Shanghai Katrina Restaurants Co., Ltd.

(“Shanghai Katrina”)

Shanghai Katrina was incorporated on 9 February 2012 with our CEO and Executive

Chairman, Alan Goh, as the sole shareholder with the intention for our Group to expand its

F&B business to Shanghai. The advances provided for the benefit of Shanghai Katrina as at

the end of each of the Relevant Period and as the Latest Practicable Date were as follows:

As at

31 December

2013

(S$’000)

As at

31 December

2014

(S$’000)

As at

31 December

2015

(S$’000)

As at the Latest

Practicable

Date

(S$’000)

Advances for the

benefit of

Shanghai Katrina

764 1,072 – –

During the Relevant Period, our Group had provided advances of an aggregate of

S$1,072,000 for the working capital requirements of Shanghai Katrina and the largest

amount of advance for the benefit of Shanghai Katrina was approximately S$126,000. Our

Directors are of the view that such advances were not carried out on an arm’s length basis

and not on normal commercial terms because they were interest-free, unsecured and had no

fixed terms of repayment, but they were not prejudicial to the interests of our Group or our

Company’s minority shareholders.

Due to the subsequent openings of restaurants offering similar cuisines in the shopping mall

in which Shanghai Katrina was operating, Shanghai Katrina’s business suffered due to the

intense competition. Consequently, in 2014, such advances were treated as a one-off bad

debt and were written off as a result of losses incurred by Shanghai Katrina which was

voluntarily liquidated and de-registered by its shareholder as the restaurant in Shanghai was

not doing well and was incurring loss. Shanghai Katrina was approved by Shanghai

governmental authority to be closed in February 2015 and was de-registered in May 2015.

(ii) Acquisition of equity interest in Shanghai Katrina

In January 2014, Katrina Singapore entered into an agreement with our CEO and Executive

Chairman, Alan Goh, to acquire the entire equity interest of Shanghai Katrina held by him and

completed the acquisition in October 2014, at an aggregate consideration of RMB1.0 million,

following which Shanghai Katrina became a wholly-owned subsidiary of Katrina Singapore.

Shanghai Katrina was incorporated in February 2012 with our CEO and Executive Chairman,

Alan Goh, as the sole individual shareholder due to the time constraint then to set up the Bali

Thai restaurant in Shanghai and the lengthy process involved in incorporating a wholly-

owned foreign subsidiary in the PRC, which required obtaining the approval from the relevant

authorities in the PRC prior to incorporation. The lease for the premises for the Bali Thai

restaurant in Shanghai was then for a period of five years.


125

Shanghai Katrina had used the same brand name and carried on the same business as our

Group since incorporation, and was always intended to form part of our Group. Since the

start, our founders had intended for Shanghai Katrina to be a wholly-owned subsidiary of

Singapore Katrina as they both operate Bali Thai restaurants. The acquisition of Shanghai

Katrina was in line with Katrina Singapore’s overseas expansion to develop the PRC

markets. In fact, between 2012 and 2013, our Group set up another two restaurants in Beijing

to tap the PRC markets.

Although Shanghai Katrina was incurring a loss in January 2014 when Katrina Singapore had

entered into the agreement to acquire the equity interest of Shanghai Katrina, it was always

part of our Group’s plan to have Shanghai Katrina to become a wholly-owned subsidiary of

Katrina Singapore and Shanghai Katrina had a remaining lease term of approximately three

years for the restaurant premises at the date of the acquisition agreement. At that time, it was

also then part of our Group’s plans to set up more restaurants in Shanghai in order to

continue penetrating the Shanghai markets. Unfortunately, the restaurant in Shanghai

continued to incur loss and its business did not perform within our expectation. This was

further aggravated by the intense competition faced by Shanghai Katrina from subsequent

openings of restaurants offering similar cuisines in the same shopping mall. Katrina

Singapore eventually ceased the operation of the restaurant in Shanghai in order to prevent

further losses, hence Shanghai Katrina was liquidated and de-registered in May 2015 as

disclosed above.

The consideration and the terms of the transaction were determined based on the registered

capital of Shanghai Katrina. Katrina Singapore has paid the consideration to Alan Goh. Our

Directors are of the view that the above transaction was not carried out on an arm’s length

basis and not on normal commercial terms as there was no independent valuation of the

equity interest in Shanghai Katrina, but they were not prejudicial to the interests of our Group

or our Company’s minority shareholders.

Provision of IT services by IT Works Solutions Pte Ltd

IT Works Solutions Pte Ltd (“IT Works”) is a company in which the son of our CEO and Executive

Chairman, Alan Goh, holds 50% shareholding interest. On 28 May 2013, our Group engaged IT

Works to provide certain information technology services, including the development of a

customer relationship management system, the creation of micro sites with book management

system and the design of a responsive website for our Group. The total fees paid to IT Works for

the IT services in FY2013 and FY2014 were S$9,000 and S$6,000, respectively. The parties

mutually agreed to terminate the contract on 25 February 2016.

Our Directors are of the view that the above transaction is conducted on an arm’s length basis,

on normal commercial terms and is not prejudicial to the interests of our Group or our Company’s

minority shareholders.


126

PRESENT AND ON-GOING TRANSACTIONS

Provision of personal guarantees by our CEO and Executive Chairman, and our Executive

Director

During the Relevant Period, our CEO and Executive Chairman, Alan Goh, and our Executive

Director, Catherine Tan, provided personal guarantees and securities for certain credit and trade

facilities and leases granted to our Group. Details of the amounts (based on month-end balances)

secured by personal guarantees provided by these Interested Persons during the Relevant Period

are as follows:

Financial institution/

Landlord Purpose

Largest amount

of facilities

guaranteed

Amount guaranteed

as at the Latest

Practicable Date

(S$’000)

United Overseas Bank

Limited

Commercial Property

Loan for the property at

1 Sims Lane #05-05

Singapore 387355

1,015 85

Novena Square

Development Ltd

To secure the lease of

the So Pho cafe at

Novena Square

549(1) 435(1)

UOL Residential

Development Pte. Ltd.

and UOL Property

Investments Pte. Ltd.

To secure the lease of

the Streats cafe at One

KM

975(1) 433(1)

Note:

(1) The amounts disclosed are the minimum lease payments under operating leases (such as base rent, advertising and

promotion fees, and service charges). Certain of the leases contained provision for payment components such as

sales commission and percentages of gross turnover payable to the landlord, which were variable, were payable at

different intervals and were also secured by the above mentioned lease guarantees. For comparable purposes,

therefore, these variable payment components have been excluded from the disclosures above.

As no consideration was paid to Alan Goh or Catherine Tan for the provision of the aforesaid

personal guarantees, our Directors are of the view that these transactions are not conducted on

an arm’s length basis and are not on normal commercial terms but they were not prejudicial to the

interests of our Group or our Company’s minority shareholders.

Subsequent to the Placement, the above-named guarantors intend to obtain a release and

discharge of the above guarantees from the respective financial institutions and landlords by

substituting the same with other securities to be furnished by our Group that are acceptable to

these financial institutions and landlords, if required. Should any of the financial institutions or

landlords be unwilling to release and discharge the above guarantees, the guarantors will

continue to provide the guarantees.


127

Indemnities provided by our CEO and Executive Chairman, and our Executive Director

We are required to furnish to the MOM a security bond of S$5,000 for each foreign worker we

engage. Our Group has made arrangements with certain insurers for the insurers to issue letters

of guarantee in lieu of the security bonds. Our CEO and Executive Chairman, Alan Goh, and our

Executive Director, Catherine Tan, have in turn provided indemnities to the insurers in respect of

any amounts claimed under the letters of guarantee.

Details of the aggregate indemnities provided by these Interested Persons in connection with the

security bonds during the Relevant Period are as follows:

As at

31 December

2013

(S$’000)

As at

31 December

2014

(S$’000)

As at

31 December

2015

(S$’000)

As at the Latest

Practicable

Date

(S$’000)

Aggregate indemnity in

connection with the

security bonds

235 315 280 315

Based on the number of foreign workers employed by our Singapore operations as at the end of

each of FY2013, FY2014, FY2015, and as at the Latest Practicable Date, the largest indemnity

amount is S$315,000. As at the Latest Practicable Date, the aggregate amount of the security

bonds furnished is approximately S$315,000.

As no compensation was paid by our Group to Alan Goh or Catherine Tan for the provision of the

indemnities, our Directors are of the view that the indemnities were not provided on an arm’s

length basis and were not on commercial terms but they were not prejudicial to the interests of our

Group or our Company’s minority shareholders.

Following the admission of our Company to Catalist, we intend to request the discharge of the

abovementioned indemnities provided by Alan Goh and Catherine Tan, and replace them with

corporate guarantees provided by our Group. In the event that any insurer does not agree to the

substitution, Alan Goh and Catherine Tan have each undertaken to continue to provide the

relevant indemnities until such time we are able to secure suitable alternatives.

Chapter 9 of the Catalist Rules

Under Chapter 9 of the Catalist Rules, where a listed company or any of its subsidiaries or

associated companies over which the listed company has control (other than a subsidiary or

associated company that is listed on a foreign stock exchange) proposes to enter into a

transaction with the listed company’s interested persons, shareholders’ approval and/or an

immediate announcement is required in respect of the transaction if the value of the transaction

is equal to or exceeds certain financial threshold. In particular, shareholders’ approval is required

where the value of such transaction is not below S$100,000 and is:–

(i) equal to or more than 5% of the latest audited NTA of the listed company; or

(ii) equal to or more than 5% of the latest audited NTA, when aggregated with other transactions

entered into with the same interested person during the same financial year.


128

Definitions under the Catalist Rules

Under the Catalist Rules:–

(a) the term “interested person” is defined to mean a director, CEO, or controlling shareholder

of the listed company or an associate of any such director, CEO or controlling shareholder;

and

(b) the term “associate” is defined to mean:–

(i) in relation to any director, CEO, substantial shareholder or controlling shareholder

(being an individual):–

• his immediate family;

• the trustee of any trust of which he and his immediate family is a beneficiary or, in

the case of a discretionary trust, is a discretionary object; and

• any company in which he and his immediate family (that is, the spouse, child,

adopted child, step child, sibling or parent) together (directly or indirectly) have an

interest of 30% or more;

(ii) 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.

REVIEW PROCEDURES FOR FUTURE INTERESTED PERSON TRANSACTIONS

To ensure that future transactions with interested persons are undertaken on normal commercial

terms and are consistent with our Group’s usual business practices and policies, which are

generally no more favourable than those extended to unrelated third parties, the following

procedures will be implemented by our Group.

In relation to any purchase of products or procurement of services from interested persons, quotes

from at least two unrelated third parties in respect of the same or substantially the same type of

transactions will be used as comparison wherever possible. The purchase price, procurement

price or fee for services shall not be higher than the most competitive price of the two comparative

prices from the two unrelated third parties. The Audit Committee will review the comparables,

taking into account, the suitability, quality and cost of the product or service, and the experience

and expertise of the supplier.

In relation to any sale of products or provision of services to interested persons, the price and

terms of two other completed transactions of the same or substantially the same type of

transactions to unrelated third parties are to be used as comparison wherever possible. The

interested persons shall not be charged at rates lower than that charged to the unrelated third

parties.


129

All interested persons transactions above S$100,000 are to be approved by a Director who shall

not be an interested person in respect of the particular transaction. Any contracts to be made with

an interested person shall not be approved unless the pricing is determined in accordance with our

usual business practices and policies, consistent with the usual margin given or price received by

us for the same or substantially similar type of transactions between us and unrelated parties and

the terms are no more favourable than those extended to or received from unrelated parties.

For the purposes above, where applicable, contracts for the same or substantially similar type of

transactions entered into between us and unrelated third parties will be used as a basis for

comparison to determine whether the price and terms offered to or received from the interested

person are no more favourable than those extended to unrelated parties.

In addition, we shall monitor all interested person transactions entered into by us categorising the

transactions as follows:–

(i) a “category one” interested person transaction is one where the value thereof is in excess of

5% of the NTA of our Group; and

(ii) a “category two” interested person transaction is one where the value thereof is below or

equal to 5% of the NTA of our Group.

“Category one” interested person transactions must be approved by our Audit Committee prior to

entry. “Category two” interested person transactions need not be approved by our Audit

Committee prior to entry but shall be reviewed on a half-yearly basis by our Audit Committee.

Before any agreement or arrangement with an interested person that is not in the ordinary course

of business of our Group is transacted, prior approval must be obtained from our Audit Committee.

In the event that a member of our Audit Committee is interested in any interested person

transactions, he will abstain from reviewing that particular transaction. Any decision to proceed

with such an agreement or arrangement would be recorded for review by our Audit Committee.

We will also comply with the provisions in Chapter 9 of the Catalist Rules in respect of all future

interested person transactions, and if required under the Catalist Rules, the Companies Act or the

SFA, we will seek independent Shareholders’ approval for such transactions.


130

INTERESTS OF DIRECTORS, CONTROLLING SHAREHOLDERS OR THEIR ASSOCIATES

In general, a conflict of interest arises when any of our Directors, CEO, Controlling Shareholders

or their Associates is carrying on or has any interest in any other corporation carrying on the same

business or dealing in similar products or services as our Group. Save as disclosed in the

“Interested Person Transactions” section of this Offer Document, during the periods under review

and the period from 1 January 2016 to the Latest Practicable Date:–

(a) none of our Directors, Controlling Shareholders or any of their respective Associates has any

interest, direct or indirect, in any transactions to which our Company or any of our

subsidiaries was or is a party;

(b) none of our Directors, Controlling Shareholders or any of their respective Associates has any

interest, direct or indirect, in any entity carrying on the same business or dealing in similar

products which competes materially and directly with the existing business of our Group; and

(c) none of our Directors, Controlling Shareholders or any of their respective Associates has any

interest, direct or indirect, in any enterprise or company that is our customer or supplier of

goods and services.

INTERESTS OF EXPERTS

None of the experts named in this Offer Document:–

(i) is employed on a contingent basis by our Company or our subsidiaries;

(ii) has a material interest, whether direct or indirect, in our Shares or in the shares of our

subsidiaries; or

(iii) has a material economic interest, whether direct or indirect, in our Company, including

having an interest in the success of the Placement.

INTERESTS OF SPONSOR, ISSUE MANAGER AND PLACEMENT AGENT

In the reasonable opinion of our Directors, the Sponsor, Issue Manager and Placement Agent do

not have a material relationship with our Company save that HLF is the Sponsor and Issue

Manager of the Placement and the Placement Agent for the Placement. Please refer to the

“Management and Placement Arrangements” section of this Offer Document for further details on

our management and placement arrangements.

POTENTIAL CONFLICTS OF INTERESTS

131

Upon listing and quotation on Catalist, our Shares will be traded under the book-entry settlement

system of the 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

the CDP, as amended from time to time.

Our Shares will be registered in the name of CDP or its nominee and held by CDP for and on

behalf of persons who maintain, either directly or through Depository Agents, Securities Accounts

with CDP. Persons named as direct Securities Account holders and Depository Agents in the

Depository Register maintained by the CDP, rather than CDP itself, will be treated, under our

Constitution and the Companies Act, as members of our Company in respect of the number of

Shares credited to their respective Securities Accounts.

Persons holding the 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

Constitution. 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 0.0325% 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 Singapore 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

132

INFORMATION ON DIRECTORS AND EXECUTIVE OFFICER

1. Save as disclosed below, none of our Directors, Executive Officer or Controlling

Shareholders is or was involved in any of the following events:–

(a) had at any time during the last ten years, an application or a petition under any

bankruptcy laws of any jurisdiction filed against him or against a partnership of which

he was a partner at the time when he was a partner or at any time within two years from

the date he ceased to be a partner;

(b) had at any time during the last ten years, an application or a petition under any law of

any jurisdiction filed against an entity (not being a partnership) of which he was a

director or an equivalent person or a key executive, at the time when he was a director

or an equivalent person or a key executive of that entity or at any time within two 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) has any unsatisfied judgment against him;

(d) has ever been convicted of any offence, in Singapore or elsewhere, involving fraud or

dishonesty, which is punishable with imprisonment, or has been the subject of any

criminal proceedings (including any pending criminal proceedings of which he is aware)

for such purpose;

(e) has 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

pending criminal proceedings of which he is aware) for such breach;

(f) at any time during the last 10 years, had judgment entered against him in any civil

proceedings in Singapore or elsewhere involving a breach of any law or regulatory

requirement that relates to the securities or futures industry in Singapore or elsewhere,

or a finding of fraud, misrepresentation or dishonesty on his part, or been the subject

of any civil proceedings (including any pending civil proceedings of which he is aware)

involving an allegation of fraud, misrepresentation or dishonesty on his part;

(g) has been convicted in Singapore or elsewhere of any offence in connection with the

formation or management of any entity or business trust;

(h) has 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) has 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

133

(j) has ever, to his knowledge, been concerned with the management or conduct, in

Singapore or elsewhere, of the 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 a 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; or

(k) has 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 governmental agency, whether in Singapore

or elsewhere.

Specific Disclosures

Eric Low Siak Meng was appointed as an independent director of Sim Lian Group Limited on

21 September 2000 and became an executive director subsequently. He resigned as director

of Sim Lian Group Limited on 31 July 2003. In 2003, two directors of Sim Lian Group Limited

(not being Eric Low Siak Meng) were being charged in a Singapore court for misinformation

contained in the prospectus issued by Sim Lian Group Limited on 27 September 2000 in

connection with its initial public offering exercise.

In addition, Eric Low Siak Meng was an independent director of FerroChina Limited since 11

April 2005 and was the lead independent director when he resigned on 12 February 2009. On

11 March 2010, FerroChina Limited was delisted from SGX-ST and on 7 March 2011, a

winding-up order was made by the Supreme Court of Bermuda (Commercial Court) against

FerroChina Limited.

Fines imposed by regulatory and statutory bodies

We have, in the course of our business, been fined by regulatory and statutory bodies such

as MOM and NEA for infringement of certain environmental and safety rules and regulations.

We have paid an aggregate of S$1,000 in FY2013 for infringement of food hygiene

regulations and S$1,300 in FY2014 for infringement of food hygiene regulations and for

failing to update worker’s address. We have not incurred any fines for FY2015. In March

2016, Beijing BaliThai has been fined RMB30,000 by the Fire Safety Department for

infringement of certain fire safety rules and regulations.


134

We have endeavoured to take all such steps to mitigate and wherever possible eliminate

such contravention of rules and regulations. We have taken efforts to improve and revise our

internal safety standards, given firm instructions to our branch managers and kitchen staff to

carry out more frequent checks at the kitchen. We indoctrinate our staff on a daily basis on

the need to have a clean and safe environment. We have set in place mechanisms where any

breaches of environmental and safety rules and regulations are to be immediately reported

and attended to by our management personnel.

CHANGES IN SHARE CAPITAL

2. Save as disclosed below, there were no changes in the issued and paid-up capital of our

Company and subsidiaries within the three years preceding the date of lodgement of this

Offer Document:–

Singapore

Name of

Company

Date of

Issue

Number of

Shares Issued Purpose

Consideration

Per Share

Resultant

Issued

Share Capital

Katrina Group

Ltd.

31 March

2016

2 Incorporation S$1 S$2

9 July

2016

1,165,004 Restructuring

Exercise

S$1 S$1,165,006

Katrina Holdings

Sdn. Bhd.

17 June

2016

100 Incorporation RM1 RM100

Katrina Online

Pte. Ltd.

15 April

2016

1 Incorporation S$1 S$1

Bayang at the

Quay Pte. Ltd.

27 October

2014

55,000 Capital

Contribution

S$1 S$180,000

3. Save as disclosed above and in the “Restructuring Exercise” section of this Offer Document,

no shares in our Company or subsidiaries have been issued for a consideration other than

cash during the three years preceding the date of lodgement of this Offer Document.

MATERIAL CONTRACTS

4. The following contracts, not being contract entered into in the ordinary course of business,

have been entered into by our Company and subsidiaries within the two years preceding the

date of lodgement of this Offer Document and is or may be material:–

(a) Share transfer agreement dated 11 January 2014 entered into between Katrina

Singapore and Alan Goh in relation to the acquisition of the entire equity interest in

Shanghai Katrina from Alan Goh;

(b) Deed of assignment dated 7 August 2014 entered into between Katrina Singapore and

Greyhound Cafe Company Limited in relation to the transfer of the “Greyhound Café”

trademark from Katrina Singapore to Greyhound Cafe Company Limited;


135

(c) Deed of assignment dated 17 February 2016 entered into between Katrina Singapore

and Hutong (CQ) Pte. Ltd. in relation to the transfer of the “Hutong” trademark from

Hutong (CQ) Pte. Ltd. to Katrina Singapore;

(d) Deed of revocation dated 12 February 2016 entered into by Katrina Singapore in

relation to the equity interest in Beijing BaliThai; and

(e) Restructuring agreement dated 30 June 2016 entered into between our Company, Alan

Goh and Catherine Tan as described in the “Restructuring Exercise” section of this Offer

Document.

LITIGATION

5. In September 2012, Beijing BaliThai entered into an agreement with Beijing Huarun Xinzhen

Real Estate Co. Ltd. (北京華潤新鎮置業有限責任公司) (“Huarun”) in relation to the lease for

the premises at Unit L561, Huarun Zhidi Wuchai Development Project for a period of five

years from 16 September 2012 to 15 September 2017. On 24 December 2014, Huarun

unilaterally terminated the agreement and requested us to remove all belongings by 31

January 2015. Beijing BaliThai subsequently referred the dispute to Beijing Arbitration

Centre and commenced action against Huarun on 15 April 2015, claiming, inter alia, for

refund of rental deposit and damages for breach of agreement. Huarun counterclaimed

against Beijing BaliThai for breach of agreement.

On 18 January 2016, the tribunal decided in favour of Beijing BaliThai and dismissed the

counterclaim. The tribunal ordered Huarun to pay approximately RMB565,000 to Beijing

BaliThai for (i) refund of rental deposit; (ii) damages for breach of agreement; and (iii) legal

costs. On 23 March 2016, Beijing BaliThai received the payment of approximately

RMB565,000 from Huarun in its compliance with the arbitral award.

As at the Latest Practicable Date, neither our Company nor subsidiaries is engaged in any

legal or arbitration proceedings, including those which are pending or known to be

contemplated, which may have or have had during the last 12 months before the date of this

Offer Document, a material effect on our Group’s financial position or profitability save as

disclosed above.

MISCELLANEOUS

6. Save as disclosed in the “Event occurring after the reporting period” section in Appendix A

of this Offer Document, our Directors are not aware of any event which has occurred since

31 December 2015 to the Latest Practicable Date, which may have a material effect on the

financial information provided in the Audited Combined Financial Statements set out in

Appendix A of this Offer Document.

7. We currently have no intention of changing the auditors of our Company and subsidiaries

after the admission of our Company to Catalist.


136

CONSENTS

8. Ernst & Young LLP, the Independent Auditor and Reporting Accountant, has given and has

not withdrawn its written consent to the issue of this Offer Document with the inclusion herein

of its name and all reference thereto and the:

(i) Independent Auditor’s report in relation to the Audited Combined Financial Statements

of Katrina Group Ltd. and its subsidiaries for the financial years ended 31 December

2013, 2014 and 2015 as set out in Appendix A of this Offer Document; and

(ii) Independent Practitioner’s Assurance Report on the Unaudited Pro Forma Combined

Financial Information of Katrina Group Ltd. and its subsidiaries for the financial year

ended 31 December 2015 as set out in Appendix B of this Offer Document,

in the form and context in which they are included in this Offer Document and to act in such

capacity in relation to this Offer Document.

9. HLF, the Sponsor, Issue Manager and Placement Agent, has given and has not withdrawn its

written consent to the issue of this Offer Document with the inclusion herein of its name and

references thereto in the form and context in which it appears in this Offer Document and to

act in such capacity as in relation to this Offer Document.

10. Opal Lawyers LLC, the Solicitors to the Placement, has given and has not withdrawn its

written consent to the issue of this Offer Document with the inclusion herein of its name and

references thereto in the form and context in which it appears in this Offer Document and to

act in such capacity in relation to this Offer Document.

11. Shanghai City Development Law Firm, the Legal Advisers to the Company on PRC Law, has

given and has not withdrawn its written consent to the issue of this Offer Document with the

inclusion herein of its name and references thereto in the form and context in which it

appears in this Offer Document and to act in such capacity in relation to this Offer Document.

12. Unless otherwise expressly stated herein, each of the Solicitors to the Placement, Legal

Advisers to the Company on PRC Law, the Share Registrar and Share Transfer Office, the

Principal Banker and the Receiving Banker 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 each of them makes no representation regarding any statement in this Offer

Document and to the maximum extent permitted by law, expressly disclaim and takes no

responsibility for any liability to any person which is based on, or arises out of, any statement,

information or opinions in, or omission from, this Offer Document.

DOCUMENTS AVAILABLE FOR INSPECTION

13. Copies of the following documents may be inspected at the registered address of our

Company during normal business hours for a period of six months from the date of

registration by the SGX-ST acting as agent on behalf of the Authority, of this Offer

Document:–

(a) the Constitution of our Company;

(b) the Audited Combined Financial Statements set out in Appendix A of this Offer

Document;


137

(c) the Unaudited Pro Forma Combined Financial Information set out in Appendix B of this

Offer Document;

(d) the material contracts referred to in paragraph 4 above;

(e) the audited financial statements of Katrina Singapore, Renn Thai, Bayang at the Quay

Pte. Ltd., Bali Thai Food Catering Pte. Ltd., and Beijing BaliThai for FY2013, FY2014

and FY2015;

(f) the letters of consent referred to in paragraphs 8 to 11 above; and

(g) the Service Agreements.

RESPONSIBILITY STATEMENT BY OUR DIRECTORS

14. 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, our Company and our subsidiaries, and our Directors are not

aware of any facts the omission of which would make any statement in this Offer Document

misleading. Where information in this Offer Document has been extracted from published or

otherwise publicly available sources or obtained from a named source, the sole responsibility

of our Directors has been to ensure that such information has been accurately and correctly

extracted from those sources and/or reproduced in this Offer Document in its proper form and

context.


138

Katrina Group Ltd. and its Subsidiaries

Audited Combined Financial Statements

For the financial years ended 31 December 2013, 2014 and 2015

APPENDIX AINDEPENDENT AUDITOR’S REPORT AND THE AUDITED

COMBINED FINANCIAL STATEMENTS OF KATRINA GROUP LTD. FORTHE FINANCIAL YEARS ENDED 31 DECEMBER 2013, 2014 AND 2015

A-1

Index Page

Statement by directors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-3

Independent auditor’s report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-4

Combined statements of comprehensive income. . . . . . . . . . . . . . . . . . . . . . . . . . A-6

Combined statements of financial position . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-7

Combined statements of changes in equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-8

Combined statements of cash flows . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-11

Notes to the combined financial statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-13



A-2

Statement by directors


In the opinion of the directors,

(i) the combined financial statements of the Group are drawn up so as present fairly, in all

material respects, the financial positions of the Group as at 31 December 2013, 2014 and

2015 and the financial performance, changes in equity and cash flows of the Group for the

financial years ended 31 December 2013, 2014 and 2015; 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,

Alan Goh Keng Chian

Director

Madaline Catherine Tan Kim Wah

Director

Singapore

15 July 2016



A-3

Independent auditor’s report in relation to the audited combined financial statements

of Katrina Group Ltd. and its subsidiaries


The Board of Directors

Katrina Group Ltd.

1 Sims Lane

#05-05 One Sims Lane

Singapore 387355

Report on the combined financial statements

We have audited the accompanying combined financial statements of Katrina Group Ltd. (the

“Company”) and its subsidiaries (collectively, the “Group”) set out on pages A-6 to A-54, which

comprise the combined statements of financial position of the Group as at 31 December 2013,

2014 and 2015, and 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 2013, 2014 and 2015, and a summary of significant accounting policies and other

explanatory information.

Management’s responsibility for the combined 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 such internal

control as management determines is necessary to enable the preparation of financial statements

that are free from material misstatement, whether due to fraud or error.

Auditor’s responsibility

Our responsibility is to express an opinion on these combined financial statements based on our

audit. We conducted our audit in accordance with Singapore Standards on Auditing. Those

standards require that we comply with ethical requirements and plan and perform the audit to

obtain reasonable assurance about whether the 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 judgment, including the assessment of the risks of material misstatement of the

combined financial statements, whether due to fraud or error. In making those risk assessments,

the auditor considers internal control relevant to the entity’s preparation 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.



A-4

Independent auditor’s report in relation to the audited combined financial statements

of Katrina Group Ltd. and its subsidiaries


We believe that the audit evidence we have obtained is sufficient and appropriate to provide a

basis for our audit opinion.

Opinion

In our opinion, the combined financial statements present fairly, in all material respects, the

financial positions of the Group as at 31 December 2013, 2014 and 2015 and its financial

performance and changes in equity and cash flows for each of the financial years ended

31 December 2013, 2014 and 2015 in accordance with Singapore Financial Reporting Standards.

Restriction on distribution and use

This report is made solely to you as a body for the inclusion in the Offer Document of the Company

to be issued in relation to the proposed offering of the shares of the Company in connection with

the Company’s listing on the Catalist Board of Singapore Exchange Securities Trading Limited.

Ernst & Young LLP

Public Accountants and

Chartered Accountants

Singapore

15 July 2016

Partner-in-Charge: Tan Peck Yen



A-5

Combined statements of comprehensive income


(Amounts in Singapore dollars)

Note 2013 2014 2015

$’000 $’000 $’000

Revenue 4 40,700 45,410 52,443

Cost of sales 5 (33,223) (36,933) (43,612)

Gross profit 7,477 8,477 8,831

Other income 6 435 444 579

Selling and distribution costs (1,273) (1,086) (1,391)

Administrative expenses (2,258) (2,359) (2,878)

Interest expense (43) (11) (9)

Other expenses 7 – (1,296) (16)

Profit before tax 8 4,338 4,169 5,116

Income tax expense 10 (637) (877) (854)

Profit for the year, representing profit

attributable to owners of the Company 3,701 3,292 4,262

Other comprehensive income:

Foreign currency translation 53 (57) 6

Total comprehensive income for the

year, representing total

comprehensive income attributable to

the owners of the Company 3,754 3,235 4,268

Earnings per share attributable to

owners of the Company

– Basic (cents) 11 1.89 1.68 2.18

– Diluted (cents) 11 1.89 1.68 2.18

The accompanying accounting policies and explanatory notes form an integral part of the combined financial statements.



A-6

Combined statements of financial position

As at 31 December 2013, 2014 and 2015


Note 2013 2014 2015$’000 $’000 $’000

AssetsNon-current assetsProperty, plant and equipment 12 6,347 6,789 7,347Intangible asset 2 2 2Refundable deposits 14 2,638 2,885 3,511Deferred tax assets 10 – – 5

8,987 9,676 10,865Current assetsTrade receivables 15 401 251 242Other receivables 16 131 223 418Refundable deposits 14 816 1,415 1,326Prepayments 118 124 342Amount due from a related party 17 764 – –Amount due from director 22 628 162 –Fixed deposits pledged 18 379 265 –Cash and cash equivalents 18 5,004 7,124 10,290

8,241 9,564 12,618

Total assets 17,228 19,240 23,483

Equity and liabilitiesCurrent liabilitiesTrade and other payables 19 3,035 3,808 4,257Other liabilities 20 455 517 996Provision 21 114 207 300Amount due to director 22 1,000 1,000 –Loans and borrowings 23 203 203 169Provision for taxation 765 1,003 1,019

5,572 6,738 6,741

Net current assets 2,669 2,826 5,877

Non-current liabilitiesLoans and borrowings 23 372 169 –Other payables 19 363 211 384Provision 21 640 605 583Deferred tax liabilities 10 9 10 –

1,384 995 967

Total liabilities 6,956 7,733 7,708

Net assets 10,272 11,507 15,775

Equity attributable to the owners of the CompanyShare capital 24 1,771 1,771 1,771Reserves 25 51 (6) –Retained earnings 8,450 9,742 14,004

Total equity 10,272 11,507 15,775

Total equity and liabilities 17,228 19,240 23,483




A-7

Combined statements of changes in equity



Attributable to owners of the Company

Equity,

total

Share

capital

Statutory

reserve

fund

(Note 25)

Foreign

currency

translation

reserve

(Note 25)

Retained

earnings

$’000 $’000 $’000 $’000 $’000

Opening balance at 1 January 2013 8,207 1,460 1 (3) 6,749

Profit for the year 3,701 – – – 3,701

Other comprehensive income

Foreign currency translation 53 – – 53 –

Total comprehensive income for

the year 3,754 – – 53 3,701

Contributions by and distributions

to owners

Dividend on ordinary shares (Note 26) (2,000) – – – (2,000)

Share capital contribution to a

subsidiary accounted for on

common control basis 311 311 – – –

Total contribution by and distribution

to owners (1,689) 311 – – (2,000)

Closing balance at 31 December 2013 10,272 1,771 1 50 8,450




A-8





Equity,

total

Share

capital

Statutory

reserve

fund

(Note 25)

Foreign

currency

translation

reserve

(Note 25)

Retained

earnings

$’000 $’000 $’000 $’000 $’000

Opening balance at 1 January 2014 10,272 1,771 1 50 8,450



Foreign currency translation (57) – – (57) –


the year 3,235 – – (57) 3,292

Contributions by and distributions

to owners

Dividend on ordinary shares (Note 26) (2,000) – – – (2,000)

Total contribution by and distribution

to owners (2,000) – – – (2,000)

Closing balance at 31 December 2014 11,507 1,771 1 (7) 9,742




A-9





Equity,

total

Share

capital

Statutory

reserve

fund

(Note 25)

Foreign

currency

translation

reserve

(Note 25)

Retained

earnings

$’000 $’000 $’000 $’000 $’000

Opening balance at 1 January 2015 11,507 1,771 1 (7) 9,742



Foreign currency translation 6 – – 6 –


the year 4,268 – – 6 4,262

Closing balance at 31 December 2015 15,775 1,771 1 (1) 14,004




A-10

Combined statements of cash flows



Note 2013 2014 2015

$’000 $’000 $’000

Operating activities


Adjustments for:

Depreciation of property, plant and

equipment 1,159 1,642 1,973

Bad debts written-off on non-trade advances

to and investment in Shanghai Katrina – 1,272 –

Write-off of property, plant and equipment 63 33 321

Interest expense 43 11 9

Interest income – (14) (42)

Currency realignment 3 (81) (4)

Total adjustments 1,268 2,863 2,257

Operating cash flows before changes in

working capital 5,606 7,032 7,373

Changes in working capital

Decrease/(increase) in trade and other

receivables 179 (452) (186)

Increase in refundable deposits (443) (846) (537)

Decrease/(increase) in prepayments 339 (6) (218)

Increase in trade and other payables 932 621 622

Increase in other liabilities 200 62 479

Total changes in working capital 1,207 (621) 160

Cash flows from operations 6,813 6,411 7,533

Income taxes paid (776) (637) (853)

Interest paid (43) (11) (9)

Interest received – 14 42

Net cash flows generated from operating

activities 5,994 5,777 6,713

Investing activity

Purchase of property, plant and equipment A (3,938) (2,039) (2,772)

Net cash flows used in investing activity (3,938) (2,039) (2,772)




A-11

Combined statements of cash flows



Note 2013 2014 2015

$’000 $’000 $’000

Financing activities

(Decrease)/increase in amounts due

to directors (1,323) 466 (838)

Repayment of loans and borrowings (203) (203) (203)

Share capital contribution to a subsidiary

accounted for on common control basis 311 – –

Fixed deposits pledged 204 114 265

Dividends paid on ordinary shares (2,000) (2,000) –

Net cash flows used in financing

activities (3,011) (1,623) (776)

Net (decrease)/increase in cash and

cash equivalents (955) 2,115 3,165

Effects of exchange rate changes on

cash and cash equivalents 18 5 1

Cash and cash equivalents at 1 January 5,941 5,004 7,124

Cash and cash equivalents at

31 December 18 5,004 7,124 10,290

A. Property, plant and equipment

Note 2013 2014 2015

$’000 $’000 $’000

Current year additions to property,

plant and equipment 12 (4,138) (2,097) (2,843)

Less: Provision for restoration cost 21 200 58 71

Net cash outflow for purchase of

property, plant and equipment (3,938) (2,039) (2,772)




A-12

Notes to the combined financial statements


1. Corporate information

1.1 The Company

Katrina Group Pte. Ltd. (the “Company”) was incorporated as a private limited company

domiciled in Singapore on 31 March 2016. On 9 July 2016, the Company was converted into

a public company limited by shares and changed its name to Katrina Group Ltd..

The registered office of the Company is located at 1 Sims Lane #05-05 One Sims Lane

Singapore 387355.

The principal activities of the Company are those of investment holding. The principal

activities of the subsidiaries are disclosed in Note 13 to the financial statements.

1.2 (i) The Restructuring Exercise

A restructuring exercise was carried out to streamline and rationalise the Group

structure in connection with the placement (the “Restructuring Exercise”). The

following steps were taken pursuant to the Restructuring Exercise:

(a) Incorporation of the Company

The Company was incorporated on 31 March 2016 with an initial share capital of

$2 comprising one share held by each of Mr. Alan Goh and Mdm. Catherine Tan.

(b) Acquisition of Katrina Holdings Pte. Ltd. by our Company

Pursuant to a Restructuring Agreement dated 30 June 2016 entered into between

the Company and the then shareholders of Katrina Holdings Pte. Ltd. (“KHPL”),

namely Mr. Alan Goh and Mdm. Catherine Tan, the Company acquired the entire

issued and paid-up share capital of KHPL for a consideration of $1,165,000 which

was determined based on the amount of issued and paid-up capital of KHPL as

at the date of the Restructuring Agreement. The consideration was satisfied by

the allotment and issue of 1,165,004 new shares of the Company.

(c) Sub-division of shares

On 11 July 2016, 1,165,006 shares in the capital of the Company were

sub-divided into 195,721,008 shares (the “Sub-Division”).



A-13



1. Corporate information (cont’d)

(ii) Acquisition of interest in Beijing BaliThai Restaurants Co., Ltd.

Beijing BaliThai Restaurants Co., Ltd. (“BJBT”) was incorporated on 11 September

2009, and since incorporation, KHPL held the entire equity interest in BJBT on trust in

favour of Mr. Alan Goh and Mdm. Catherine Tan equally. On 1 January 2016, KHPL

acquired the entire equity interest in BJBT from Mr. Alan Goh and Mdm. Catherine Tan

at an aggregate consideration of approximately S$602,000.

2. Summary of significant accounting policies

2.1 Basis of preparation

The combined financial statements of the Group have been prepared in accordance with

Singapore Financial Reporting Standards (“FRS”).

The combined financial statements have been prepared on the historical cost basis except

as disclosed in the accounting policies below.

The combined financial statements are presented in Singapore dollars (“SGD” or “$”) and

all values in the tables are rounded to the nearest thousand (“$’000”), except when

otherwise indicated.

2.2 Changes in accounting policies

The accounting policies have been constantly applied by the Group during the financial

years ended 31 December 2013, 2014 and 2015 except that during the financial years

ended 31 December 2013, 2014 and 2015, the Group has adopted all the new and revised

standards which are effective for annual financial periods beginning on or after 1 January

2013, 2014 and 2015 respectively. The adoption of these standards did not have any effect

on the financial performance or position of the Group.



A-14



2. Summary of significant accounting policies (cont’d)

2.3 Standards issued but not yet effective

The Group has not adopted the following standards that have been issued but not yet

effective:

Description

Effective for

annual periods

beginning on or after

Amendments to FRS 16 and FRS 38 Clarification of

Acceptable Methods of Depreciation and Amortisation

1 January 2016

Improvements to FRSs (November 2014) 1 January 2016

Amendments to FRS 1 Disclosure Initiative 1 January 2016

Amendments to FRS 7 Disclosure Initiative 1 January 2017

Amendments to FRS 12 Recognition of Deferred Tax Assets for

Unrealised Losses

1 January 2017

FRS 115 Revenue from Contracts with Customers 1 January 2018

FRS 109 Financial Instruments 1 January 2018

FRS 116 Leases 1 January 2019

The directors expect that the adoption of the standards above will have no material impact

on the combined financial statements in the period of initial application, except for FRS 116.

FRS 116 requires lessees to recognise for most leases, a liability to pay rentals with a

corresponding asset, and recognise interest expense and depreciation separately. The new

standard is effective for annual periods beginning on or after 1 January 2019.

The Group is currently assessing the impact of the new standard and plans to adopt the new

standard on the required effective date. The Group expects the adoption of the new

standard will result in increase in total assets and total liabilities, earnings before interest,

tax, depreciation and amortisation.

2.4 Basis of consolidation

The combined financial statements comprise the financial statements of the Company and

its subsidiaries as at the end of the reporting periods. The financial statements of the

subsidiaries are prepared for the same reporting date as the Company. Consistent

accounting policies are applied for like transactions and events in similar circumstances.

All intra-group balances, income and expenses and unrealised gains and losses resulting

from intra-group transactions that are recognised in assets are eliminated in full.



A-15




2.4 Basis of consolidation (cont’d)

The combined financial statements of the Group for the financial years ended 31 December

2013, 2014 and 2015 comprising Katrina Holdings Pte. Ltd. and its subsidiaries (“KHPL

Group”) and Beijing BaliThai Restaurants Co., Ltd. (“BJBT”) have been prepared using the

pooling of interest method as the entities were held by Mr Alan Goh and Mdm. Catherine

Tan and thus were under common control. Such manner of presentation reflects the

economic substance of the combining companies as a single economic enterprise, although

the legal parent-subsidiary relationship was not established until after the end of the

reporting periods. These combined financial statements of the Group are a combination or

aggregation of the financial statements of KHPL Group and BJBT as at and for the years

ended 31 December 2013, 2014 and 2015.

Pursuant to this:

– Assets, liabilities, reserves, revenue and expenses of combined entities are reflected

at their existing amounts;

– No amount is recognised for goodwill; and

– The retained earnings recognised in the combined financial statements referred to the

retained earnings of KHPL Group and BJBT as at 1 January 2013. The share capital

reflected in the combined statements of financial position comprises the summation of

the share capital of KHPL Group and BJBT.

2.5 Foreign currency

The financial statements are presented in Singapore dollars, which is also the Company’s

functional currency. Each entity in the Group determines its own functional currency and

items included in the financial statements of each entity are measured using that functional

currency.

(a) Transactions and balances

Transactions in foreign currencies are measured in the respective functional

currencies of the Company and its subsidiaries and are recorded on initial recognition

in the functional currencies at exchange rates approximating those ruling at the

transaction dates. Monetary assets and liabilities denominated in foreign currencies

are translated at the rate of exchange ruling at the end of the reporting period.

Non-monetary items that are measured in terms of historical cost in a foreign currency

are translated using the exchange rates as at the dates of the initial transactions.

Exchange differences arising on the settlement of monetary items or on translating

monetary items at the end of the reporting period are recognised in profit or loss.



A-16




2.5 Foreign currency (cont’d)

(b) Combined financial statements

The assets and liabilities of foreign operations are translated into SGD at the rate of

exchange ruling at the end of the reporting period and their profit or loss are translated

at the exchange rates prevailing at the date of the transactions. The exchange

differences arising on the translation are recognised in other comprehensive income.

On disposal of a foreign operation, the component of other comprehensive income

relating to that particular foreign operation is recognised in profit or loss.

2.6 Property, plant and equipment

All items of property, plant and equipment are initially recorded at cost. Subsequent to

recognition, property, plant and equipment are measured at cost less accumulated

depreciation and any accumulated impairment losses.

Depreciation is computed on a straight-line basis over the estimated useful lives of the

assets as follows:

Years

Computers 3 years

Furniture and fittings 5 years

Office, kitchen and restaurant equipment 5 years

Renovation 5 years

Motor vehicle 5 years

Freehold property 25 years

Assets under construction included in plant and equipment are not depreciated as these

assets are not yet available for use.

The carrying values of property, plant and equipment are reviewed for impairment when

events or changes in circumstances indicate that the carrying value may not be

recoverable.

The residual value, useful life and depreciation method are reviewed at each financial

year-end, and adjusted prospectively, if appropriate.

An item of property, plant and equipment is de-recognised upon disposal or when no future

economic benefits are expected from its use or disposal. Any gain or loss on de-recognition

of the asset is included in profit or loss in the year the asset is de-recognised.



A-17




2.7 Impairment of non-financial assets

The Group assesses at each reporting date whether there is an indication that an asset may

be impaired. If any indication exists, or when an annual impairment testing for an asset is

required, the Group makes an estimate of the asset’s recoverable amount.

An asset’s recoverable amount is the higher of an asset’s or cash-generating unit’s fair

value less costs of disposal and its value in use and is determined for an individual asset,

unless the asset does not generate cash inflows that are largely independent of those from

other assets or groups of assets. Where the carrying amount of an asset or cash-generating

unit exceeds its recoverable amount, the asset is considered impaired and is written down

to its recoverable amount.

Impairment losses are recognised in profit or loss.

A previously recognised impairment loss is reversed only if there has been a change in the

estimates used to determine the asset’s 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. That increase cannot exceed the carrying amount that would have

been determined, net of depreciation, had no impairment loss been recognised previously.

Such reversal is recognised in profit or loss.

2.8 Financial instruments

(a) Financial assets

Initial recognition and measurement

Financial assets are recognised when, and only when, the Group becomes a party to

the contractual provisions of the financial instrument. The Group determines the

classification of its financial assets at initial recognition.

When financial assets are recognised initially, they are measured at fair value, plus, in

the case of financial assets not at fair value through profit or loss, directly attributable

transaction costs.



A-18




2.8 Financial instruments (cont’d)

(a) Financial assets (cont’d)

Subsequent measurement

Non-derivative financial assets with fixed or determinable payments that are not

quoted in an active market are classified as loans and receivables. Subsequent to

initial recognition, loans and receivables are measured at amortised cost using the

effective interest method, less impairment. Gains and losses are recognised in profit

or loss when the loans and receivables are derecognised or impaired, and through the

amortisation process.

De-recognition

A financial asset is de-recognised where the contractual right to receive cash flows

from the asset has expired. On de-recognition of a financial asset in its entirety, the

difference between the carrying amount and the sum of the consideration received and

any cumulative gain or loss that had been recognised in other comprehensive income

is recognised in profit or loss.

(b) Financial liabilities

Initial recognition and measurement

Financial liabilities are recognised when, and only when, the Group becomes a party

to the contractual provisions of the financial instrument. The Group determines the

classification of its financial liabilities at initial recognition.

All financial liabilities are recognised initially at fair value plus directly attributable

transaction costs.

Subsequent measurement

After initial recognition, financial liabilities that are not carried at fair value through

profit or loss are subsequently measured at amortised cost using the effective interest

method. Gains and losses are recognised in profit or loss when the liabilities are

derecognised, and through the amortisation process.



A-19




2.8 Financial instruments (cont’d)

(b) Financial liabilities (cont’d)

De-recognition

A financial liability is de-recognised when the obligation under the liability is

discharged or cancelled or expires. When an existing financial liability is replaced by

another from the same lender on substantially different terms, or the terms of an

existing liability are substantially modified, such an exchange or modification is treated

as a de-recognition 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.

2.9 Impairment of financial assets

The Group assesses at each reporting date whether there is any objective evidence that a

financial asset is impaired.

Financial assets carried at amortised cost

For financial assets carried at amortised cost, the Group first assesses whether objective

evidence of impairment exists individually for financial assets that are individually

significant, or collectively for financial assets that are not individually significant. If the

Group determines that no objective evidence of impairment exists for an individually

assessed financial asset, whether significant or not, it includes the asset in a group of

financial assets with similar credit risk characteristics and collectively assesses them for

impairment. Assets that are individually assessed for impairment and for which an

impairment loss is, or continues to be recognised are not included in a collective

assessment of impairment.

If there is objective evidence that an impairment loss on financial assets carried at

amortised cost has been incurred, the amount of the loss is measured as the difference

between the asset’s carrying amount and the present value of estimated future cash flows

discounted at the financial asset’s original effective interest rate. If a loan has a variable

interest rate, the discount rate for measuring any impairment loss is the current effective

interest rate. The carrying amount of the asset is reduced through the use of an allowance

account. The impairment loss is recognised in profit or loss.

When the asset becomes uncollectible, the carrying amount of impaired financial asset is

reduced directly or if an amount was charged to the allowance account, the amounts

charged to the allowance account are written off against the carrying value of the financial

asset.



A-20




2.9 Impairment of financial assets (cont’d)

To determine whether there is objective evidence that an impairment loss on financial

assets has been incurred, the Group considers factors such as the probability of insolvency

or significant financial difficulties of the debtor and default or significant delay in payments.

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 was recognised, the

previously recognised impairment loss is reversed to the extent that the carrying amount of

the asset does not exceed its amortised cost at the reversal date. The amount of reversal

is recognised in profit or loss.

2.10 Cash and cash equivalents

Cash and cash equivalents comprise cash at banks and on hand and fixed deposits that are

readily convertible to known amount of cash and which are subject to an insignificant risk

of changes in value.

2.11 Provisions

Provisions are recognised when the Group has a present obligation (legal or constructive)

as a result of a past event, it is probable that an outflow of resources embodying economic

benefits will be required to settle the obligation and the amount of the obligation can be

estimated reliably.

Provisions are reviewed at the end of each reporting period and adjusted to reflect the

current best estimate. If it is no longer probable that an outflow of resources embodying

economic benefits will be required to settle the obligation, the provision is reversed. If the

effect of the time value of money is material, provisions are discounted using a current

pre-tax rate that reflects, where appropriate, the risks specific to the liability. When

discounting is used, the increase in the provision due to the passage of time is recognised

as a finance cost.

2.12 Government grants

Government grants are recognised when there is reasonable assurance that the grant will

be received and all attaching conditions will be complied with. Government grants shall be

recognised in profit or loss on a systematic basis over the periods in which the entity

recognises as expenses the related costs for which the grants are intended to compensate.

Grants related to income are presented as a credit in profit or loss, under “Other income”.



A-21




2.13 Borrowing costs

Borrowing costs are capitalised as part of the cost of a qualifying asset if they are directly

attributable to the acquisition, construction or production of that asset. Capitalisation of

borrowing costs commences when the activities to prepare the asset for its intended use or

sale are in progress and the expenditures and borrowing costs are incurred. Borrowing

costs are capitalised until the assets are substantially completed for their intended use or

sale. All other borrowing costs are expensed in the period they occur. Borrowing costs

consist of interest and other costs that an entity incurs in connection with the borrowing of

funds.

2.14 Employee benefits

(a) Defined contribution plans

The Group participates in the national pension schemes as defined by the laws of the

countries in which it has operations. In particular, the Singapore companies in the

Group make contributions to the Central Provident Fund scheme in Singapore, a

defined contribution pension scheme. Contributions to defined contribution pension

schemes are recognised as an expense in the period in which the related service is

performed.

The subsidiary incorporated in the People’s Republic of China (“PRC”) is required to

provide certain staff pension benefits to their employees under existing PRC

legislation. Pension contributions are provided at rates stipulated by PRC legislation

and are contributed to a pension fund managed by government agencies, which are

responsible for paying pensions to the PRC subsidiary’s retired employees.

(b) Employee leave entitlement

Employee entitlements to annual leave are recognised as a liability when they accrue

to employees. The undiscounted estimated liability for leave expected to be settled

wholly before twelve months after the end of the reporting period is recognised for

services rendered by employees up to the end of the reporting period.

2.15 Leases

As lessee

Operating lease payments are recognised as an expense in profit or loss on a straight-line

basis over the lease term. The aggregate benefit of incentives provided by the lessor is

recognised as a reduction of rental expense over the lease term on a straight-line basis.



A-22




2.16 Revenue

Revenue is recognised to the extent that it is probable that the economic benefits will flow

to the Group and the revenue can be reliably measured, regardless of when the payment

is made. Revenue is measured at the fair value of consideration received or receivable,

taking into account contractually defined terms of payment and excluding taxes or duty.

(a) Revenue from restaurant operations

Revenue from restaurant operations is recognised upon the transfer of significant risk

and rewards of ownership i.e. when the food and beverages are delivered to

customers.

(b) Interest income

Interest income is recognised using the effective interest method.

2.17 Taxes

(a) Current income tax

Current income tax assets and liabilities for the current and prior periods are

measured at the amount expected to be recovered from or paid to the taxation

authorities. The tax rates and tax laws used to compute the amount are those that are

enacted or substantively enacted at the end of the reporting period, in the countries

where the Group operates and generates taxable income.

Current income taxes are recognised in profit or loss except to the extent that the tax

relates to items recognised outside profit or loss, either in other comprehensive

income or directly in equity. Management periodically evaluates positions taken in the

tax returns with respect to situations in which applicable tax regulations are subject to

interpretation and establishes provisions where appropriate.

(b) Deferred tax

Deferred tax is provided using the liability method on 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.



A-23




2.17 Taxes (cont’d)

(b) Deferred tax (cont’d)

Deferred tax liabilities are recognised for all temporary differences, except:

– Where the deferred tax liability arises from the initial recognition of goodwill or of

an asset or liability in a transaction that is not a business combination and, at the

time of the transaction, affects neither the accounting profit nor taxable profit or

loss; and

– In respect of taxable temporary differences associated with investments in

subsidiaries, where the timing of the reversal of the temporary differences can be

controlled and it is probable that the temporary differences will not reverse in the

foreseeable future.

Deferred tax assets are recognised for all deductible temporary differences, the carry

forward of unused tax credits and unused tax losses, to the extent that it is probable

that taxable profit will be available against which the deductible temporary differences,

and the carry forward of unused tax credits and unused tax losses can be utilised

except:

– Where the deferred tax asset relating to the deductible temporary difference

arises from the initial recognition of an asset or liability in a transaction that is not

a business combination and, at the time of the transaction, affects neither the

accounting profit nor taxable profit or loss; and

– In respect of deductible temporary differences associated with investments in

subsidiaries, deferred tax assets are recognised only to the extent that it is

probable that the temporary differences will reverse in the foreseeable future and

taxable profit will be available against which the temporary differences can be

utilised.

The carrying amount of deferred tax assets is reviewed at the end of each reporting

period and reduced to the extent that it is no longer probable that sufficient taxable

profit will be available to allow all or part of the deferred tax asset to be utilised.

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 profit

will allow the deferred tax asset to be recovered.

Deferred tax assets and liabilities are measured at the tax rates that are expected to

apply in the year when the asset is realised or the liability is settled, based on tax rates

(and tax laws) that have been enacted or substantively enacted at the end of each

reporting period.



A-24




2.17 Taxes (cont’d)

(b) Deferred tax (cont’d)

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.

(c) Sales tax

Revenues, expenses and assets are recognised net of the amount of sales tax except:

– Where the sales tax incurred on a purchase of assets or services is not

recoverable from the taxation authority, in which case the sales tax is recognised

as part of the cost of acquisition of the asset or as part of the expense item as

applicable; and

– Receivables and payables that are stated with the amount of sales tax included.

2.18 Share capital and share issuance expenses

Proceeds from issuance of ordinary shares are recognised as share capital in equity.

Incremental costs directly attributable to the issuance of ordinary shares are deducted

against share capital.

2.19 Contingencies

A contingent liability is:

(a) a possible obligation that arises from past events and whose existence will be

confirmed only by the occurrence or non-occurrence of one or more uncertain future

events not wholly within the control of the Group; or

(b) a present obligation that arises from past events but is not recognised because:

(i) It is not probable that an outflow of resources embodying economic benefits will

be required to settle the obligation; or

(ii) The amount of the obligation cannot be measured with sufficient reliability.

A contingent asset is a possible asset that arises from past events and whose existence will

be confirmed only by the occurrence or non-occurrence of one or more uncertain future

events not wholly within the control of the Group.



A-25




2.19 Contingencies (cont’d)

Contingent liabilities and assets are not recognised on the balance sheet of the Group,

except for contingent liabilities assumed in a business combination that are present

obligations and which the fair values can be reliably determined.

3. Significant accounting judgments and estimates

The preparation of the combined financial statements requires management to make

judgments, estimates and assumptions that affect the reported amounts of revenues,

expenses, assets and liabilities, and the disclosure of contingent liabilities at the end of

each reporting period. Uncertainty about these assumptions and estimates could result in

outcomes that could require a material adjustment to the carrying amount of the asset or

liability affected in the future periods.

3.1 Judgments made in applying accounting policies

In the process of applying the Group’s accounting policies, management is of the opinion

that there is no significant judgement made in applying accounting policies.

3.2 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 are discussed below. The Group based its assumptions

and estimates on parameters available when the combined financial statements were

prepared. Existing circumstances and assumptions about future developments, however,

may change due to market changes or circumstances arising beyond the control of the

Group. Such changes are reflected in the assumptions when they occur.

(a) Provision for restoration costs

The Group recognises provision for restoration costs when the Group entered into

lease agreements for the premises. In determining the amount of the provision for

restoration costs, estimates are made in relation to the expected costs to reinstate the

premises back to their original state upon the expiration of the lease terms based on

quotations provided by a third-party contractor. The carrying amount of the provision

for restoration costs as at 31 December 2015 was $883,000 (2014: $812,000; 2013:

$754,000). If the estimated provision had been 5% higher/lower than management’s

estimate, the carrying amount of the provision would have been $44,000 (2014:

$41,000; 2013: $38,000) higher/lower.



A-26



3. Significant accounting judgments and estimates (cont’d)

3.2 Key sources of estimation uncertainty (cont’d)

(b) Impairment of property, plant and equipment

The Group assesses whether there are any indicators of impairment for property, plant

and equipment at the end of each reporting period. Property, plant and equipment are

tested for impairment when there are indicators that the carrying amounts may not be

recoverable.

In particular, management assesses impairment of property, plant and equipment of

loss making restaurants by considering factors such as the maturity of the restaurants

and operational strategies.

When value in use calculations are undertaken, management must estimate the

expected future cash flows from the asset or cash-generating unit, including:

estimating the revenue growth rate for the restaurants. If the estimated revenue

growth rate had been lowered by 1%, the impairment amount would have been

$47,000 for the financial year ended 31 December 2015.

4. Revenue

Revenue represents sales of food and beverage in the normal course of business.

5. Cost of sales

Cost of sales mainly comprises food and beverages cost, payroll cost of restaurants

employees, restaurants rental and utilities expenses and other restaurant support costs.



A-27



6. Other income

2013 2014 2015

$’000 $’000 $’000

Government grant

– PIC bonus 9 30 6

– SME cash grant 5 – –

– Special employment credit 47 73 95

– Capability development grant 147 10 –

– Wage credit scheme 101 181 213

– Workplace health promotion grant 36 – 20

– Temporary employment credit – – 65

– Singapore Workforce Development

Agency funding – – 19

– Max Talent Place-and-Train Programme

grant – – 5

Interest income on fixed deposits – 14 42

Compensation income from landlord in

respect of early termination of operating

lease – – 65

Gain on deed of assignment – 45 –

Marketing incentive from beverage

suppliers 43 33 9

Others 47 58 40

435 444 579

The Wage Credit Scheme was introduced as a 2013 Budget Initiative to help businesses

which may face rising wage costs in a tight labour market. Under this scheme, the

Singapore Government will co-fund 40% of wage increases given to the Group’s

Singaporean employees earning a gross monthly wage of $4,000 and below in the years

2013 to 2015.



A-28



7. Other expenses

2013 2014 2015

$’000 $’000 $’000

Bad debts written-off on non-trade

advances to and investment in Shanghai

Katrina (Note 27a) – 1,272 –

Others – 24 16

– 1,296 16

8. Profit before tax

The following expense items have been included in arriving at profit before tax:

2013 2014 2015

$’000 $’000 $’000

Depreciation of property, plant and

equipment 1,159 1,642 1,973

Employee benefits 12,680 14,201 17,456

Professional fees 140 214 330

Fixed rental expense on operating leases 8,670 10,082 11,362

Contingent rental expense on

operating leases 429 430 562

Write-off of property, plant and equipment 63 33 321

9. Employee benefits

2013 2014 2015

$’000 $’000 $’000

Employee benefits expenses (including

director’s remuneration):

Salaries, bonuses and other costs 10,513 11,559 14,211

Central Provident Fund and other

pension costs 958 1,095 1,386

Other personnel costs 1,209 1,547 1,859

12,680 14,201 17,456

Other personnel costs include staff allowances, housing benefits, training and other

employee welfare.



A-29



10. Income tax expense

Major components of income tax expense

The major components of income tax expense for the years ended 31 December 2013,

2014 and 2015 are:

2013 2014 2015

$’000 $’000 $’000

Combined statements of comprehensive income:

Current income tax

– Current year 718 836 869

– (Over)/under provision in respect of previous years (1) 40 –

Deferred income tax

– Current year 7 (2) (12)

– (Over)/under provision in respect of previous years (87) 3 (3)

Income tax expense recognised in the combined

statements of comprehensive income 637 877 854

Relationship between tax expense and profit before tax

A reconciliation between tax expense and the product of profit before tax multiplied by the

applicable corporate tax rate for the years ended 31 December 2013, 2014 and 2015 are

as follows:

2013 2014 2015

$’000 $’000 $’000


Tax at the domestic rates applicable to profits in

the countries where the Group operates 718 712 836

Adjustments:

Non-deductible items 170 404 320

Income not subject to taxation (1) (1) –

Effects of partial tax exemption (207) (266) (298)

(Over)/under-provision in prior year (88) 43 (3)

Deferred tax assets not recognised 45 – 2

Others – (15) (3)

Total income tax expense 637 877 854

The above reconciliation is prepared by aggregating separate reconciliations for each

national jurisdiction.



A-30



10. Income tax expense (cont’d)

The Company and the Singapore subsidiaries

The companies in Singapore are subjected to tax rate of 17% for the years under review.

No provision for income tax has been made for Hutong (CQ) Pte Ltd and Bayang At The

Quay Pte. Ltd. as these subsidiaries have no taxable income for the financial years ended

31 December 2013, 2014 and 2015.

PRC subsidiary

Beijing BaliThai Restaurants Co., Ltd.

The income tax rate applicable to this PRC subsidiary is 25% for the years under review.

Deferred tax

Deferred tax as at 31 December relates to the following:

Combined statements of

financial position

Combined statements of

comprehensive income

2013 2014 2015 2013 2014 2015

$’000 $’000 $’000 $’000 $’000 $’000

Deferred tax

liabilities/(assets):

Differences in depreciation for

tax purposes 147 143 163 58 (4) 20

Deferred rental payables (65) (54) (78) (65) 11 (24)

Provision for restoration cost (73) (79) (90) (73) (6) (11)

9 10 (5) (80) 1 (15)

Unrecognised tax losses

As at 31 December 2015, the Group has tax losses of approximately $775,000

(2014: $448,000; 2013: $517,000) that are available for offset against future taxable profits

of the companies in which the losses arose, for which no deferred tax asset is recognised

due to uncertainty of its recoverability. The use of these tax losses is subject to the

agreement of the tax authorities and compliance with the relevant provisions of the tax

legislation of the respective countries in which the companies operate.



A-31



11. Earnings per share

Basic earnings per share are calculated by dividing profit for the year, net of tax, attributable

to the owners of the Company by the pre-placement share capital of the Company. The

Company’s pre-placement number of ordinary shares of 195,721,008 has been used in the

calculation of basic and diluted earnings per share for all periods presented in accordance

with FRS 33, as pre-placement number of ordinary shares reflects the weighted average

number of shares for the 3 years after adjusting for changes in number of shares arising

from the Restructuring as disclosed in Note 1.2 (i)(c).

Diluted earnings per share are the same as basic earnings per share as there were no

potential dilutive ordinary shares existing during the respective years.



A-32

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A-34



12. Property, plant and equipment (cont’d)

Restoration costs

Included in the Group’s net carrying amount of renovations is $295,000 (2014: $286,000;

2013: $273,000) relating to provision for restoration costs.

Asset pledged as security

The Group’s freehold property with a net carrying amount of $1,208,000 (2014: $1,266,000;

2013: $1,324,000) are subject to a legal mortgage to secure the Group’s banking facilities

(Note 23).

Impairment of assets

Property, plant and equipment are tested for impairment when there are indicators that the

carrying amounts may not be recoverable. In particular, management assesses impairment

of property, plant and equipment of loss making restaurants by considering factors such as

the maturity of the restaurants and operational strategies.

The recoverable amount of the property, plant and equipment relating to restaurants with

indicators of impairment were determined based on their value in use and the pre-tax

discount rate used was 10%.

Property, plant and equipment amounting to $321,000 (2014: $33,000; 2013: $63,000) were

written-off mainly due to the closure or planned closure of restaurants. These amounts are

included in “Cost of Sales”.



A-35



13. Investment in subsidiaries

The Group has investment in the following subsidiaries as at year end:

Name

Country of

incorporation Principal activities

Proportion (%) of

ownership interest

2013 2014 2015

Held by the Company

(1) Katrina Holdings Pte.

Ltd. (“KHPL”)

Singapore Investment holding

and restaurant

operator

100 100 100

Held by KHPL

(1) Bali Thai Food Catering

Pte. Ltd.

Singapore Provision of

services to related

companies

100 100 100

(1) Bayang At The Quay

Pte. Ltd.

Singapore Restaurant operator 100 100 100

(1) Renn Thai Pte Ltd Singapore Restaurant operator 100 100 100

(3) Hutong (CQ) Pte Ltd Singapore Dormant 90 90 90

Shanghai Katrina

Restaurants Co., Ltd.

(“Shanghai Katrina”)

China Liquidated – 100 –

(2),(4) Beijing BaliThai

Restaurants Co., Ltd.

(“BJBT”)

China Restaurant operator 100 100 100

(1) Audited by Ernst & Young LLP, Singapore

(2) Audited by Ernst & Young Hua Ming LLP, Shanghai Branch for consolidation purposes.

(3) Deregistered on 6 June 2016.

(4) On 1 January 2016, the entire equity interest in BJBT held on trust by KHPL in favour of Mr. Alan Goh and

Mdm. Catherine Tan were acquired by KHPL.



A-36



14. Refundable deposits

2013 2014 2015

$’000 $’000 $’000

Current

Refundable rental deposits 524 1,043 924

Utilities deposits 227 290 313

Other refundable deposits 65 82 89

816 1,415 1,326

Non-current

Refundable rental deposits 2,638 2,885 3,511

Total refundable deposits 3,454 4,300 4,837

Other refundable deposits of the Group mainly comprise of design and fittings deposits

placed with landlords.

15. Trade receivables

Trade receivables are non-interest bearing and are generally within 30 days terms. They

are recognised at their original invoice amounts which represent their fair values on initial

recognition.

Trade receivables that are past due but not impaired

The Group has no trade receivables that are past due but not impaired at the end of each

of the reporting period.

16. Other receivables

2013 2014 2015

$’000 $’000 $’000

Grants receivables 126 218 289

Other debtors 5 5 129

Total other receivables 131 223 418

Add:

– Trade receivables 401 251 242

– Refundable Deposit 3,454 4,300 4,837

– Amount due from a related party 764 – –

– Amount due from director 628 162 –

– Cash and fixed deposits 5,383 7,389 10,290

Total loans and receivables 10,761 12,325 15,787

Grants receivables of the Group mainly relate to payroll-related grants.



A-37



17. Amount due from a related party

These amounts are unsecured, interest-free, repayable on demand and are to be settled in

cash.

Amount due from a related party that is impaired

At the end of each of the reporting periods, the Group has written-off nil (2014: $1,072,000;

2013: nil) for impairment of the amount due from a related party with nominal amount of nil

(2014: $1,072,000; 2013: $764,000).

18. Cash and fixed deposits

2013 2014 2015

$’000 $’000 $’000

Cash at banks and on hand 4,800 6,930 10,290

Fixed deposits 583 459 –

Cash and fixed deposits 5,383 7,389 10,290

Cash at banks earn interest at floating rates based on daily bank deposits rates. Fixed

deposits are made for a varying periods between 1 to 2 years depending on the immediate

cash requirements of the Group and earn interest rates ranging from 0.05% to 0.55% per

annum. Fixed deposits of $nil (2014: $63,000; 2013: $63,000) are held in trust by one of the

directors on behalf of the Group.

Fixed deposits of $379,000 and $265,000 were pledged to bank as security for banker’s

guarantees issued in lieu of the Group’s rental deposits as at 31 December 2013 and 2014

respectively.

In addition to the fixed deposits pledged for banker’s guarantees issued in lieu of the

Group’s rental deposits, a pledge has been placed on the fixed deposits as security for the

Group’s bank term loan as disclosed in Note 23.

For the purpose of the combined statements of cash flows, cash and cash equivalents

comprise the following at the end of the reporting period:

2013 2014 2015

$’000 $’000 $’000

Cash and fixed deposits 5,383 7,389 10,290

Less: Fixed deposits pledged (379) (265) –

Cash and cash equivalents 5,004 7,124 10,290



A-38



19. Trade and other payables

2013 2014 2015

$’000 $’000 $’000

Current

Trade payables 1,149 1,266 1,456

Other payables:

– CPF and salaries payables 976 1,258 1,627

– GST payable 324 380 442

– Deferred rental payables 96 172 121

– Other creditors 490 732 611

3,035 3,808 4,257

Non-current

Deferred rental payables 363 211 384

Total trade and other payables 3,398 4,019 4,641

Add:

– Other liabilities (Note 20) 455 517 996

– Amount due to director (Note 22) 1,000 1,000 –

– Bank term loan (Note 23) 575 372 169

Less:

– GST payable (324) (380) (442)

– Deferred rental payables (459) (383) (505)

Total financial liabilities carried at

amortised cost 4,645 5,145 4,859

Trade and other payables

These amounts are non-interest bearing and are normally settled on 30 to 60 days terms.

Deferred rental payables

The deferred rental balance represents a deferred rental liability resulting from the

straight-lining effect of the Group’s operating lease payments.



A-39



20. Other liabilities

2013 2014 2015

$’000 $’000 $’000

Accrued operating expenses 153 174 325

Accrued bonus 149 189 516

Advances received from customers – 5 3

Accrued unconsumed leave 153 149 152

455 517 996

21. Provision

Provision for restoration costs refer to the estimated cost of reinstating the leased

properties.

Movements in provision for restoration costs:

2013 2014 2015

$’000 $’000 $’000

At beginning of the year 554 754 812

Additions 200 142 140

Utilisation – (84) (69)

At end of the year 754 812 883

22. Amount due from/to director

The amount due from/to director are non-trade related, unsecured, interest free, repayable

upon demand.



A-40



23. Loans and borrowings

2013 2014 2015

$’000 $’000 $’000

Current:

Bank term loan at 3-months

SWAP Offer Rate 203 203 169

Non-current:

Bank term loan at 3-months

SWAP Offer Rate 372 169 –

575 372 169

Bank term loan at 3-months SWAP Offer Rate

The bank term loan is payable over 60 monthly instalments commencing 7 November 2011.

It bears interest of 1.18% per annum over the bank’s 3-months SWAP Offer Rate for the first

year, 1.35% per annum over the bank’s 3-months SWAP Offer Rate for the second year,

2.00% per annum over the bank’s 3-months SWAP Offer Rate for the third year and 2.50%

per annum over the bank’s 3-months SWAP Offer Rate for the subsequent years. It is

secured by a legal mortgage and pledge of the Group’s freehold property and guaranteed

jointly and severally by the two executive directors. As at 31 December 2013 and 2014, it

was also secured by fixed deposits pledged.

24. Share capital

2013 2014 2015

No. of

shares

’000 $’000

No. of

shares

’000 $’000

No. of

shares

’000 $’000

Issued and fully paid

Ordinary shares 1,165 1,771 1,165 1,771 1,165 1,771

The Company was incorporated on 31 March 2016 comprising 2 shares of $2. Accordingly,

the share capital in the combined statements of financial position as at 31 December 2013,

2014 and 2015 comprises the summation of the share capital of its subsidiaries, KHPL and

BJBT. Subsequent to 31 December 2015, the Company issued 1,165,004 shares as

consideration for acquisition of KHPL pursuant to the Restructuring Exercise.

The holders of ordinary shares are entitled to receive dividends as and when declared by

the Company. All ordinary shares with no par value carry one vote per share without

restriction.

On 11 July 2016, 1,165,006 shares in the capital of the Company were sub-divided into

195,721,008 shares.



A-41



25. Reserves

2013 2014 2015

$’000 $’000 $’000

Statutory reserve fund 1 1 1

Foreign currency translation reserve 50 (7) (1)

51 (6) –

(a) Statutory reserve fund

In accordance with the Foreign Enterprise Law applicable to the subsidiaries in the

PRC, the subsidiaries are required to make appropriation to a Statutory Reserve Fund

(“SRF”). At least 10% of the statutory profits after tax as determined in accordance

with the applicable PRC accounting standards and regulations must be allocated to

the SRF until the cumulative total of the SRF reaches 50% of the subsidiaries’

registered capital. Subject to approval from the relevant PRC authorities, the SRF may

be used to offset any accumulated losses or increase the registered capital of the

subsidiaries. The SRF is not available for dividend distribution to shareholders.

(b) Foreign currency translation reserve

The foreign currency translation reserve represents exchange differences arising from

the translation of the financial statements of the Group’s PRC subsidiary whose

functional currency is different from that of the Group’s presentation currency.

26. Dividends

2013 2014 2015

$’000 $’000 $’000

Interim tax exempt dividends paid

$nil (2014: $1.7168; 2013: $1.7168)

per share by a subsidiary, KHPL to

its then existing shareholders 2,000 2,000 –

On 30 June 2016, KHPL declared final tax exempt dividends of $8.58 per share amounting

to S$10,000,000 in respect of the financial year ended 2015 to its then existing

shareholders.



A-42



27. Related party transactions

In addition to those related party information disclosed elsewhere in the combined financial

statements, the following significant transactions between the Group and related parties

took place on terms agreed between the parties during the financial years:

(a) Significant related party transactions

2013 2014 2015

$’000 $’000 $’000

Directors

Advances to 1,193 – –

Repayment of advances – (200) (163)

Settlement of liabilities on behalf by – (66) –

Settlement of liabilities on behalf for 130 – –

IT services provided by 9 6 –

Acquisition of Shanghai Katrina

Restaurant Co., Ltd* – (200) –

Director-related party

Advances to Shanghai Katrina 89 308 –

Bad debts written off on non-trade

advances to and investment in

Shanghai Katrina – (1,272) –

* Shanghai Katrina Restaurant Co., Ltd (“Shanghai Katrina”) was incorporated in February 2012 by a

shareholder. In October 2014, the Group completed the acquisition of the entire equity interest in

Shanghai Katrina for a consideration of RMB1.0 million.



A-43



27. Related party transactions (cont’d)

(b) Compensation of key management personnel:

Key management personnel of the Group are those persons having the authority and

responsibility for planning, directing and controlling the activities, directly or indirectly,

of the Group. The directors of the Group and the key management of the Group are

considered as key management personnel of the Group.

2013 2014 2015

$’000 $’000 $’000

Salaries, bonuses and other costs 479 582 463

Central Provident Fund and other

pension costs 45 43 41

524 625 504

Comprise amounts paid to:

Directors of the Company 524 625 464

Other key management personnel – – 40

524 625 504

28. Commitments

The Group has entered into commercial leases relating to the restaurant premises. These

non-cancellable leases have remaining non-cancellable lease terms of 1 to 3 years. Lease

terms do not contain restrictions on the Group’s activities concerning dividends, additional

debt or further leasing.

Minimum lease payments recognised as an expense in profit or loss for the financial year ended

31 December 2015 amounted to $11,362,000 (2014: $10,082,000, 2013: $8,670,000).

Future minimum rental payable under non-cancellable operating leases at the end of the

reporting periods are as follows:

2013 2014 2015

$’000 $’000 $’000

Not later than one year 9,997 10,185 11,861

Later than one year but not later than

five years 15,106 9,195 12,960

25,103 19,380 24,821



A-44



28. Commitments (cont’d)

Under the terms of certain lease arrangements, the Group is required to pay a monthly

contingent rental expense on operating leases, computed based on a certain percentage of

monthly gross revenue generated by the Group’s operations at the leased premises. The

base lease rental for 23 lease arrangements increases over the lease terms. Contingent

rental expense on operating leases recognised as an expense in profit or loss for the

financial year ended 31 December 2015 amounted to $562,000 (2014: $430,000;

2013: $429,000).

29. Fair value of financial instruments

The Group categorises fair value measurements using a fair value hierarchy that is

dependent on the valuation inputs used as follow:

Level 1 – Quoted prices (unadjusted) in active market for identical assets or liabilities that

the Group can access at the measurement date,

Level 2 – Inputs other than quoted prices included within Level 1 that are observable for the

assets or liabilities, either directly or indirectly, and

Level 3 – Unobservable inputs for the assets or liabilities.

Fair value measurement that use inputs of different hierarchy levels are categorised in its

entirety in the same level of the fair value hierarchy as the lowest level input that is

significant to the entire measurement.

The carrying amount of financial assets and liabilities are reasonable approximation of fair

values, either due to their short-term nature or that they are floating rate instruments that

are re-priced to market interest rates on or near the end of the reporting period. Fair value

of non-current refundable deposits are not materially different from their carrying amounts

as the remaining lease terms are not more than 3 years. The Group does not anticipate that

the carrying amounts recorded at the end of the reporting period would be significantly

different from the values that would eventually be received or settled.

At the reporting period, the Group does not have any financial instruments carried at fair

value.



A-45



30. Segment information

For management purposes, the Group is organised into business units based on their

geographical areas as follows:

2013 2014 2015

$’000 $’000 $’000

Revenue from external customers

Singapore 38,165 42,404 50,056

PRC 2,535 3,006 2,387

40,700 45,410 52,443

Segment profit/(loss)

Singapore 3,936 3,249 4,490

PRC (235) 43 (228)

3,701 3,292 4,262

Interest expense

Singapore 43 11 9

PRC – – –

43 11 9

Write-off of Property, plant and equipment

Singapore 63 33 188

PRC – – 133

63 33 321

Interest income

Singapore – 3 1

PRC – 11 41

– 14 42

Depreciation

Singapore 1,064 1,464 1,834

PRC 95 178 139

1,159 1,642 1,973

For the financial years ended 31 December 2013, 2014 and 2015, the Group’s operations

derive revenue from the two geographical areas as indicated above.



A-46



30. Segment information (cont’d)

Management monitors the revenue of its business units separately for the purpose of

making decisions about resource allocation and performance assessment. Segment

performance is evaluated based on operating profit or loss.

Revenue by major customer

Due to the nature of the Group’s business, none of the Group’s customers individually

represents over 10% of total revenue.

2013 2014 2015

$’000 $’000 $’000

Non-current assets

Intangible asset

Singapore – – –

PRC 2 2 2

2 2 2

Property, plant and equipment

Singapore 5,686 6,283 7,099

PRC 661 506 248

6,347 6,789 7,347

Segment assets

Singapore 15,595 18,306 22,622

PRC 1,633 934 856

Deferred tax assets – – 5

17,228 19,240 23,483

Segment liabilities

Singapore 5,828 6,434 6,264

PRC 354 286 425

Provision for taxation 765 1,003 1,019

Deferred tax liabilities 9 10 –

6,956 7,733 7,708

Non-current assets information presented above consists of property, plant and equipment

and intangible assets.



A-47



31. Financial risk management objectives and policies

The Group is exposed to financial risks arising from its operations and the use of financial

instruments. The key financial risks include credit risk and liquidity risk. The directors

review and agree policies and procedures for the management of these risks, which are

executed by the Chief Financial Officer. It is, and has been throughout the current and

previous financial years, the Group’s policy that no trading in derivatives for speculative

purposes shall be undertaken except for use as hedging instruments where appropriate and

cost-efficient. The Group does not apply hedge accounting.

The following sections provide details regarding the Group’s exposure to the above-

mentioned financial risks and the objectives, policies and processes for the management of

these risks.

There has been no change to the Group’s exposure to these financial risks or the manner

in which it manages and measures the risks.

(a) Credit risk

Credit risk is the risk of loss that may arise on outstanding financial instruments should

a counterparty default on its obligations. The Group’s exposure to credit risk arises

primarily from trade and other receivables. For other financial assets (including cash

and fixed deposits), the Group minimises credit risk by dealing exclusively with high

credit rating counterparties.

The Group’s objective is to seek continual revenue growth while minimising losses

incurred due to increased credit risk exposure. Credit policies with guidelines on credit

terms and limits set the basis for risk control. It is the Group’s policy that all customers

who wish to trade on credit terms are subject to credit verification procedures. In

addition, appropriate allowances are made for probable losses when necessary for

identified debtors.

Exposure to credit risk

At the end of the reporting period, the Group’s maximum exposure to credit risk is

represented by the carrying amount of each class of financial assets recognised in the

balance sheet. No other financial assets carry a significant exposure to credit risk.



A-48



31. Financial risk management objectives and policies (cont’d)

(a) Credit risk (cont’d)

Credit risk concentration profile

The Group has no significant concentration of credit risk. Trade receivables are spread

over a broad base of customers and mainly relate to receivables from credit card

sales.

Credit risk with respect to trade receivables is minimal as the Group’s revenue is

mainly generated from cash and credit card sales.

Financial assets that are neither past due nor impaired

Trade and other receivables that are neither past due nor impaired are creditworthy

debtors with good payment record with the Group. Cash and fixed deposits that are

neither past due nor impaired are placed with or entered into with reputable financial

institutions or companies with high credit ratings and no history of default.

Financial assets that are either past due or impaired

Information regarding financial assets that are either past due or impaired is disclosed

in amount due from a related party (Note 17).

(b) Liquidity risk

Liquidity risk is the risk that the Group will encounter difficulty in meeting financial

obligations due to shortage of funds. The Group’s exposure to liquidity risk arises

primarily from possible mismatches of the maturities of financial assets and liabilities.

The Group’s objective is to maintain a balance between continuity of funding and

flexibility through the use of standby credit facilities.

To manage liquidity risk, the Group monitors its net operating cash flow and maintains

an adequate level of cash and cash equivalents and secured committed funding

facilities from financial institutions, if deemed necessary. In assessing the adequacy of

these funding facilities, management reviews its working capital requirements

regularly.



A-49




(b) Liquidity risk (cont’d)

Analysis of financial instruments by remaining contractual maturities

The table below summarises the maturity profile of the Group’s financial assets and

liabilities at the end of the reporting period based on contractual undiscounted

repayment obligations.

One year

or less

One to

five years Total

$’000 $’000 $’000

2013

Financial assets:

Trade receivables 401 – 401

Other receivables 131 – 131

Refundable deposits 816 2,638 3,454

Amount due from a related party 764 – 764

Amount due from director 628 – 628

Cash and fixed deposits 5,383 – 5,383

Total undiscounted financial assets 8,123 2,638 10,761

Financial liabilities:

Trade and other payables 2,615 – 2,615

Other liabilities 455 – 455

Amount due to director 1,000 – 1,000


Total undiscounted financial liabilities 4,281 387 4,668

Total net undiscounted financial assets 3,842 2,251 6,093



A-50





Analysis of financial instruments by remaining contractual maturities (cont’d)

One year

or less

One to

five years Total

$’000 $’000 $’000

2014

Financial assets:




Amount due from director 162 – 162






Amount due to director 1,000 – 1,000


Total undiscounted financial liabilities 4,982 174 5,156




A-51





Analysis of financial instruments by remaining contractual maturities (cont’d)

One year

or less

One to

five years Total

$’000 $’000 $’000

2015

Financial assets:









Loans and borrowings 172 – 172

Total undiscounted financial liabilities 4,862 – 4,862


32. Capital management

Capital includes debt and equity items as disclosed in the table below.

The primary objective of the Group’s capital management is to ensure that it maintains a

strong capital base so as to maintain investor, creditor and market confidence and to

sustain future development of the business.

The Group manages its capital structure and makes adjustments to it, in light of changes

in economic conditions. To maintain or adjust the capital structure, the Group may adjust

the dividend payment to shareholders, return capital to shareholders or issue new shares.

No changes were made in the objectives, policies or processes during the years ended 31

December 2013, 2014 and 2015.



A-52



32. Capital management (cont’d)

As disclosed in Note 25(a), a subsidiary of the Group is required by the Foreign Enterprise

Law of the PRC to contribute to and maintain a non-distributable statutory reserve fund

whose utilisation is subject to approval by the relevant PRC authorities. This externally

imposed capital requirement has been complied with by the subsidiary for the financial

years ended 31 December 2013, 2014 and 2015.

The Group monitors capital using a gearing ratio, which is net debt divided by total capital

plus net debt. The Group includes within net debt, loans and borrowings, trade and other

payables, less cash and short-term deposits. Capital comprises equity attributable to the

owners of the Company less the abovementioned restricted statutory reserve fund.

2013 2014 2015

$’000 $’000 $’000

Loans and borrowings (Note 23) 575 372 169

Trade and other payables 2,939 3,636 4,136

Less: – cash and fixed deposits (Note 18) (5,383) (7,389) (10,290)

Net cash (1,869) (3,381) (5,985)

Equity attributable to the owners of

the Company 10,272 11,507 15,775

Less: – statutory reserve fund (1) (1) (1)

Total capital 10,271 11,506 15,774

Gearing ratio N.A. N.A. N.A.

33. Event occurring after the reporting period

Dividend declaration

On 30 June 2016, a subsidiary, KHPL, declared final tax-exempt one-tier dividend of $8.58

per share amounting to $10,000,000 in respect of the financial year ended 31 December

2015.



A-53



33. Event occurring after the reporting period (cont’d)

Incorporation of subsidiaries

On 15 April 2016, a subsidiary, KHPL, incorporated Katrina Online Pte. Ltd. with an issued

and paid up capital of $1.

Subsequent to 31 December 2015, Katrina Holdings Sdn Bhd with an issued and paid up

share capital comprising of 100 shares of Malaysian Ringgit 1 was incorporated. The entire

equity interest of Katrina Holdings Sdn. Bhd. is held on trust by Alan Goh and Catherine Tan

in favour of KHPL since incorporation of Katrina Holdings Sdn. Bhd.

34. Authorisation of financial statements for issue

The combined financial statements for the financial years ended 31 December 2013, 2014

and 2015 were authorised for issue in accordance with a resolution of the directors on

15 July 2016.



A-54

Index Page

Independent Practitioner’s Assurance Report. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-2

Unaudited Pro Forma Combined Statement of Financial Position . . . . . . . . . . . . . . . B-5

Statement of Adjustments for the Unaudited Pro Forma Combined Statement of

Financial Position . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-6

Notes to the Unaudited Pro Forma Combined Financial Information . . . . . . . . . . . . . B-7

APPENDIX BINDEPENDENT PRACTITIONER’S ASSURANCE REPORT AND THE

UNAUDITED PRO FORMA COMBINED FINANCIAL INFORMATION FORTHE FINANCIAL YEAR ENDED 31 DECEMBER 2015

B-1

INDEPENDENT PRACTITIONER’S ASSURANCE REPORT ON THE UNAUDITED PRO FORMA

COMBINED FINANCIAL INFORMATION OF KATRINA GROUP LTD. AND ITS SUBSIDIARIES

FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2015

The Board of Directors

Katrina Group Ltd.

1 Sims Lane

#05-05 One Sims Lane

Singapore 387355

Report on the compilation of Pro Forma Combined Financial Information

We have completed our assurance engagement to report on the compilation of pro forma financial

information of Katrina Group Ltd. (the “Company”) and its subsidiaries (collectively, the “Group”)

by management. The pro forma financial information consists of the pro forma combined

statement of financial position as at 31 December 2015 and related notes as set out on pages B-5

to B-8 of the Offer Document issued by the Company. The applicable criteria on the basis of which

management has compiled the pro forma financial information are described in Note 3.

The pro forma financial information has been compiled by management to illustrate the impact of

the event set out in Note 2 on the Group’s financial position as at 31 December 2015 as if the

event had taken place at 31 December 2015. As part of this process, information about the

Group’s financial position has been extracted by management from the Group’s combined

financial statements for the year ended 31 December 2015, on which an audit report has been

included in the Offer Document as set out in Appendix A.

Management’s Responsibility for the Pro Forma Financial Information

Management is responsible for compiling the pro forma combined financial information on the

basis as described in Note 3.

Practitioner’s Responsibilities

Our responsibility is to express an opinion about whether the pro forma combined financial

information has been compiled, in all material respects, by management on the basis as described

in Note 3.

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 practitioner 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 as described in

Note 3.



B-2




Practitioner’s Responsibilities (cont’d)

For purposes of this engagement, we are not responsible for updating or reissuing any reports oropinions on any historical financial information used in compiling the pro forma financialinformation, nor have we, in the course of this engagement, performed an audit or review of thefinancial information used in compiling the pro forma financial information.

The purpose of pro forma financial information included in an Offer Document is solely to illustratethe impact of a significant event or transaction on unadjusted financial information of the entity asif the event had occurred or the transaction had been undertaken at an earlier date selected forpurposes of the illustration. Accordingly, we do not provide any assurance that the actual outcomeof the event or transaction at 31 December 2015 would have been as presented.

A reasonable assurance engagement to report on whether the pro forma financial information hasbeen compiled, in all material respects, on the basis of the applicable criteria involves performingprocedures to assess whether the applicable criteria used by management in the compilation ofthe pro forma financial information provide a reasonable basis for presenting the significant effectsdirectly attributable to the event or transaction, and to obtain sufficient appropriate evidence aboutwhether:

(i) the related pro forma adjustments give appropriate effect to those criteria; and

(ii) the pro forma financial information reflects the proper application of those adjustments to theunadjusted financial information.

The procedures selected depend on the practitioner’s judgment, having regard to thepractitioner’s understanding of the nature of the company, the event or transaction in respect ofwhich the pro forma financial information has been compiled, and other relevant engagementcircumstances.

The engagement also involves evaluating the overall presentation of the pro forma financialinformation.

We believe that the evidence we have obtained is sufficient and appropriate to provide a basis forour opinion.

Opinion

In our opinion,

(a) the pro forma financial information has been compiled:

(i) in a manner consistent with the accompanying policies adopted by Katrina Group Ltd.and its subsidiaries in the audited combined financial statements as included inAppendix A of the Offer Document, which are in accordance with Singapore FinancialReporting Standards;

(ii) on the basis stated in Note 3 to the pro forma financial information; and



B-3




Opinion (cont’d)

(b) each material adjustment made to the information used in the preparation of the pro formafinancial information is appropriate for the purpose of preparing such pro forma financialinformation.

Other matters

This report has been prepared solely for inclusion in the Offer Document of the Company to be

issued in connection with the proposed listing of the Company’s shares on the Catalist Board of

Singapore Exchange Securities Trading Limited.

Ernst & Young LLP

Public Accountants and

Chartered Accountants

Singapore

15 July 2016

Partner in charge: Tan Peck Yen



B-4

UNAUDITED PRO FORMA COMBINED STATEMENT OF FINANCIAL POSITION

AS AT 31 DECEMBER 2015

(Amounts expressed in Singapore dollars)

31.12.2015$’000

AssetsNon-current assetsProperty, plant and equipment 7,347Intangible asset 2Refundable deposits 3,511Deferred tax assets 5

10,865

Current assetsTrade receivables 242Other receivables 418Refundable deposits 1,326Prepayments 342Cash and cash equivalents 10,290

12,618

Total assets 23,483

Equity and liabilitiesCurrent liabilitiesTrade and other payables 4,257Other liabilities 996Provision 300Dividends payable 10,000Loans and borrowings 169Provision for taxation 1,019

16,741

Net current liabilities (4,123)

Non-current liabilitiesOther payables 384Provision 583

967

Total liabilities 17,708

Net assets 5,775

Equity attributable to the owner of the CompanyShare capital 1,771Retained earnings 4,004

Total equity 5,775

Total equity and liabilities 23,483

The accompanying accounting policies and explanatory notes form an integral part of the

unaudited pro forma combined financial information.



B-5

STATEMENT OF ADJUSTMENTS FOR THE UNAUDITED PRO FORMA COMBINED

STATEMENT OF FINANCIAL POSITION

AS AT 31 DECEMBER 2015

(Amounts expressed in Singapore dollars)

Audited CombinedStatement of

Financial Position

Pro FormaAdjustments

(Note 2)

Unaudited Pro FormaCombined Statementof Financial Position

$’000 $’000AssetsNon-current assetsProperty, plant and equipment 7,347 7,347Intangible asset 2 2Refundable deposits 3,511 3,511Deferred tax assets 5 5

10,865 10,865

Current assetsTrade receivables 242 242Other receivables 418 418Refundable deposits 1,326 1,326Prepayments 342 342Cash and cash equivalents 10,290 10,290

12,618 12,618

Total assets 23,483 23,483

Equity and liabilitiesCurrent liabilitiesTrade and other payables 4,257 4,257Other liabilities 996 996Provision 300 300Dividends payable – 10,000 10,000Loans and borrowings 169 169Provision for taxation 1,019 1,019

6,741 16,741

Net current assets/(liabilities) 5,877 (4,123)

Non-current liabilitiesOther payables 384 384Provision 583 583

967 967

Total liabilities 7,708 17,708

Net assets 15,775 5,775

Equity attributable to theowner of the CompanyShare capital 1,771 1,771Retained earnings 14,004 (10,000) 4,004

Total equity 15,775 5,775

Total equity and liabilities 23,483 23,483



B-6

NOTES TO THE UNAUDITED PRO FORMA COMBINED FINANCIAL INFORMATION

1. Corporate information

Katrina Group Ltd. (the “Company”) was incorporated as a private limited company domiciled

in Singapore. On 9 July 2016, the Company was converted into a public company limited by

shares and changed its name from Katrina Group Pte Ltd. to Katrina Group Ltd..

The registered office of the Company is located at 1 Sims Lane #05-05 One Sims Lane

Singapore 387355.

The principal activity of the Company is that of investment holding.

2. Significant event and Pro Forma Adjustment

Declaration of final tax exempt dividends

On 30 June 2016, Katrina Holdings Pte Ltd, a subsidiary of the Group, declared final tax

exempt dividends of an aggregate of $10,000,000 to the then shareholders, Alan Goh and

Catherine Tan.

Accordingly, the Pro Forma adjustment refers to the deduction of the final tax exempt

dividend of $10,000,000 from retained earnings and corresponding increase in dividends

payable (current liabilities) to the then-existing shareholders of the subsidiary, on the

assumption that the final tax exempt dividend declared were approved as at 31 December

2015.

3. Basis of preparation of the unaudited pro forma combined financial information

(a) The unaudited pro forma combined financial information of the Group is expressed in

Singapore dollars (“SGD” or “$”) and all values in the tables are rounded to the nearest

thousand ($’000) except as otherwise indicated. The financial information has been

prepared for illustrative purposes only. It has been prepared based on certain

assumptions and after making certain adjustments to show what the unaudited pro

forma combined statement of financial position of the Group as at 31 December 2015

would have been if the declaration and approval of final dividends as described in Note

2 had taken place on that date.

The objective of the unaudited pro forma combined financial information of the Group

is to show what the historical financial information would have been had the declaration

and approval of final dividends occurred as at 31 December 2015. However, the

unaudited pro forma combined financial information of the Group is not necessarily

indicative of the related effects on financial position that would have been obtained had

the event actually existed earlier.

(b) The unaudited pro forma combined financial information of the Group is based on the

audited combined financial statements of Katrina Group Ltd. and its subsidiaries for the

financial year ended 31 December 2015, which have been prepared in accordance with

Singapore Financial Reporting Standards.



B-7

NOTES TO THE UNAUDITED PRO FORMA COMBINED FINANCIAL INFORMATION

3. Basis of preparation of the unaudited pro forma combined financial information

(cont’d)

The audited combined financial statements of Katrina Group Ltd. and its subsidiaries for

the financial year ended 31 December 2015 was audited in accordance with Singapore

Standards on Auditing by Ernst & Young LLP, Public Accountants and Chartered

Accountants, Singapore. The independent auditor’s report relating to the

abovementioned audited combined financial statements was not subject to any

qualification.

(c) The unaudited pro forma combined statement of comprehensive income and unaudited

pro forma combined statement of cash flows of the Group for the financial year ended

31 December 2015 have not been disclosed as the declaration and approval of final tax

exempt dividends, assumed to be on 31 December 2015, would not have had an impact

on the combined statement of comprehensive income and combined statement of cash

flows of the Group for the financial year ended 31 December 2015.

4. Significant accounting policies

The unaudited pro forma combined financial information is prepared using the same

accounting policies as the audited combined financial statements of the Group for the

financial year ended 31 December 2015 as disclosed in Note 2 to the Audited Combined

Financial Statements of Katrina Group Ltd. and its subsidiaries for the financial years ended

31 December 2013, 2014 and 2015 set out as Appendix A of the Offer Document.

5. Authorisation of pro forma combined financial information

The unaudited pro forma combined financial information for the financial year ended 31

December 2015 was authorised for issue in accordance with a resolution of the directors on

15 July 2016.



B-8

The discussion below provides a summary of the principal objects of our Company set out in our

Constitution and certain provisions of our Constitution and the laws of Singapore. This discussion

is only a summary and is qualified by reference to Singapore law and our Constitution.

CONSTITUTION AND REGISTRATION NUMBER

We are registered in Singapore with ACRA. Our company registration number is 201608344N. Our

Constitution sets out the objects for which our Company was formed, including carrying on

business as, inter alia, an investment holding company.

SUMMARY OF OUR CONSTITUTION

1. Directors

(a) Ability of interested directors to vote

A director shall not vote in respect of any contract, proposed contract or arrangement

or any other proposal in which he has any personal material interest, and he shall not

be counted in the quorum present at the meeting except under circumstances set out

in the Constitution.

(b) Remuneration

Fees payable to Non-Executive Directors shall be a fixed sum (not being a commission

on or a percentage of profits or turnover of the Company) as shall from time to time be

determined by the Company in general meeting. Fees payable to Directors shall not be

increased except at a general meeting convened by a notice specifying the intention to

propose such increase.

Any Director who holds any executive office, or who serves on any committee of the

Directors, or who performs services outside the ordinary duties of a Director, may be

paid extra remuneration by way of salary or otherwise (not being a commission on or a

percentage of profits or turnover of the Company), as the Directors may determine.

The remuneration of a CEO shall be fixed by the Directors and may be by way of salary

or commission or participation in profits or by any or all of these modes but shall not be

by a commission on or a percentage of turnover.

The Directors shall have power to pay pensions or other retirement, superannuation,

death or disability benefits to (or to any person in respect of) any Director for the time

being holding any executive office and for the purpose of providing any such pensions

or other benefits, to contribute to any scheme or fund or to pay premiums.

(c) Borrowing

Our Directors may exercise all the powers of our Company to raise or borrow money,

to mortgage or charge its undertaking, property and uncalled capital, and to secure any

debt, liability or obligation of our Company.

APPENDIX CSUMMARY OF CONSTITUTION OF OUR COMPANY

C-1

(d) Retirement Age Limit

There is no retirement age limit for Directors under our Constitution.

(e) Shareholding Qualification

There is no shareholding qualification for Directors in the Constitution of our Company.

2. Share rights and restrictions

Our Company currently has one class of shares, namely, ordinary shares. Only persons who

are registered on our register of Shareholders and in cases in which the person so registered

is CDP, the persons named as the depositors in the depository register maintained by CDP

for the ordinary shares, are recognised as our Shareholders.

(a) Dividends and distribution

We may, by ordinary resolution of our Shareholders, declare dividends at a general

meeting, but we may not pay dividends in excess of the amount recommended by our

Board. We must pay all dividends out of our profits and we may satisfy dividends by the

issue of shares to our Shareholders. All dividends are paid pro-rata amongst our

Shareholders in proportion to the amount paid-up on each Shareholder’s ordinary

shares, unless the rights attaching to an issue of any ordinary share provide otherwise.

Unless otherwise directed, dividends are paid by cheque, warrant or post office order

sent through the post to each Shareholder at his registered address. Notwithstanding

the foregoing, the payment by us to CDP of any dividend payable to a Shareholder

whose name is entered in the depository register shall, to the extent of payment made

to CDP, discharge us from any liability to that shareholder in respect of that payment.

The payment by the Directors of any unclaimed dividends or other monies 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. Any dividend

unclaimed after a period of six years after having been declared may be forfeited and

shall revert to the Company but the Directors may thereafter at their discretion annul

any such forfeiture and pay the dividend so forfeited to the person entitled thereto prior

to the forfeiture.

The Directors may retain any dividends or other monies payable on or in respect of a

share on which our Company has a lien, and may apply the same in or towards

satisfaction of the debts, liabilities or engagements in respect of which the lien exists.

(b) Voting rights

A holder of our ordinary shares is entitled to attend, speak and vote at any general

meeting, in person or by proxy. Proxies need not be a Shareholder. A person who holds

ordinary shares through the SGX-ST book-entry settlement system will only be entitled

to vote at a general meeting as a shareholder if his name appears on the depository

register maintained by CDP 72 hours before the general meeting. Except as otherwise

provided in our Constitution, two or more Shareholders must be present in person or by

proxy to constitute a quorum at any general meeting. Under our Constitution, on a show


C-2

of hands, every Shareholder present in person and by proxy shall have one vote, and

on a poll, every Shareholder present in person or by proxy shall have one vote for each

ordinary share which he holds or represents. A poll may be demanded in certain

circumstances, including by the Chairman of the meeting or by any Shareholder present

in person or by proxy and representing not less than one-tenth of the total voting rights

of all Shareholders having the right to attend and vote at the meeting or by any two

Shareholders present in person or by proxy and entitled to vote. In the case of a tie vote,

whether on a show of hands or a poll, the Chairman of the meeting shall be entitled to

a casting vote.

3. Change in capital

Changes in the capital structure of our Company (for example, consolidation, cancellation,

sub-division or conversion of our share capital) require Shareholders to pass an ordinary

resolution. Ordinary resolutions generally require at least 14 days’ notice in writing. The

notice must be given to each of our Shareholders who have supplied us with an address in

Singapore for the giving of notices and must set forth the place, the day and the hour of the

meeting. However, we are required to obtain our Shareholders’ approval by way of a special

resolution for any reduction of our share capital or other undistributable reserve, subject to

the conditions prescribed by law.

4. Variation of rights of existing shares or classes of shares

Subject to the Companies Act, whenever the share capital of the Company is divided into

different classes of shares, the special rights attached to any class may be varied or

abrogated either with the consent in writing of the holders of three-quarters of the total

number 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 the shares of the class. To every such

separate general meeting the provisions of our Constitution relating to general meetings of

the Company and to the proceedings thereat shall mutatis mutandis apply, except that the

necessary quorum shall be two persons at least holding or representing by proxy at least

one-third of the total number of the issued shares of the class, and that any holder of shares

of the class present in person or by proxy may demand a poll and that every such holder shall

on a poll have one vote for every share of the class held by him, provided always that where

the necessary majority for such a special resolution is not obtained at such general meeting,

consent in writing if obtained from the holders of three-quarters of the total number of the

issued shares of the class concerned within two months of such general meeting shall be as

valid and effectual as a special resolution carried at such general meeting. These provisions

shall apply to the variation or abrogation of the special rights attached to some only of the

shares of any class as if each group of shares of the class differently treated formed a

separate class the special rights whereof are to be varied or abrogated.

The relevant Constitution does not impose more significant conditions than the Companies

Act in this regard.

5. Limitations on foreign or non-resident Shareholders

There are no limitations imposed by Singapore law or by our Constitution on the rights of our

Shareholders including those who are regarded as non-residents of Singapore, to hold or

vote their shares.


C-3

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The Catalogue for the Guidance of Foreign Investment Industries

Foreign investors and foreign companies investing in the PRC should abide by the Catalogue for

the Guidance of Foreign Investment Industries (Revision 2015) (“Catalogue”), promulgated by the

National Development and Reform Commission of PRC and Ministry of Commerce of PRC on 10

March 2015. This Catalogue, which came into force on 10 April 2015, lists specific guidance on

foreign investment into the market and provides detailed industry guidelines on encouraged,

limited and restricted industries. According to the Catalogue, foreign investment is allowed in the

industry of providing F&B services and general production and sale of food.

Law of the People’s Republic of China on Foreign-funded Enterprises

The Law of the PRC on Foreign-funded Enterprises (“Law of Foreign-funded Enterprises”), which

was first adopted by the National People’s Congress of PRC on 12 April 1986 and revised on 31

October 2000, is the basic legal principles for the Chinese government to supervise and

administer the foreign-funded enterprises. According to the Law of Foreign-funded Enterprises,

applications for the establishment of a wholly foreign-owned enterprise (“WFOE”) shall be

submitted for examination and approval to the department under the PRC State Council in charge

of foreign trade and economic cooperation, or to an organisation authorised by the PRC State

Council. In the event of a split, merger or other major change, a WFOE shall report to and seek

approval from, the authorities in charge of examination and approval, and register the change with

the industry and commerce administration authority. A WFOE shall conduct their operations and

management in accordance with its approved articles of association, and shall be free from any

interference. Foreign investors may remit abroad the legitimate profits earned by the foreign-

funded enterprise, as well as other legitimate earnings and any funds remaining after the

enterprise is liquidated.

The Implementation Regulations for the Law of the PRC on Wholly Foreign-owned Enterprises,

which was formulated pursuant to the Law of Foreign-funded Enterprises, came into force on 1

March 2014. These regulations set out various aspects of the business operation for a WFOE in

the PRC, such as the establishment procedure, business scope and type, capital, accounting and

employment issues, as guidance to WFOE, as well as supplement the Company Law of the PRC

which was revised and came into force on 1 March 2014 and which a WFOE shall also comply

with.

Food Safety Law

The Food Safety Law of the PRC (Revision 2015) (“Food Safety Law”) and the Implemented

Regulations of the Food Safety Law of the PRC, which came into force on 1 October 2015 and 20

July 2009 respectively, are formulated for the purposes of ensuring food safety and safeguarding

the physical health and life safety of the public. F&B service providers shall comply with the Food

Safety Law.

According to the Food Safety Law, the PRC State Council shall establish a food safety commission

whose job duties shall be stipulated by the PRC State Council. The health administration

department under the PRC State Council shall organise risk monitoring and evaluation on food

safety, and shall coordinate with the Food and Drug Administration (“FDA”) under the PRC State

Council to formulate and issue food safety standards. The FDA shall supervise and administer the

food production and distribution in accordance with the Food Safety Law.

APPENDIX DSUMMARY OF RELEVANT PRC LAWS AND REGULATIONS

D-1

Under the Food Safety Law, if found to be in violation of the Food Safety Law, the food producer

or distributer shall be penalised with warning, rectification orders, forfeiture of illegal gains, as well

as tools, equipment, materials and other objects used for illegal production and distribution, fines,

suspension of production and/or operation, revocation of production and/or business license, or

criminal liabilities. Any gains and other assets of any restaurant operating without the requisite

license will be confiscated, and the relevant restaurant may suffer a governmental fine up to 10

times of the prices of food sold.

The Implemented Regulations of the Food Safety Law further specifies the penalties on violations

and measures required to be taken by the food producers and business operators to ensure food

safety.

Licensing of F&B Services

The Administrative Measures for the Licensing of F&B Services and the Administrative Measures

for the Supervision and Administration of Food Safety in Catering Services were promulgated on

4 March 2010 and came into force on 1 May 2010.

According to the Administrative Measures for the Licensing of F&B Services, the local FDA

departments are responsible for the administration of licensing of F&B services. F&B service

providers shall obtain a F&B service permit (“F&B Service Permit”) and assume the food safety

responsibilities for F&B services. The F&B Service Permit cannot be transferred, borrowed, sold

or leased. F&B service providers shall apply for distinctive F&B Service Permit for each of its

branches in different locations. The F&B service providers shall re-apply for the F&B Service

Permit if there is any change to any of its business location. The validity period of F&B Service

Permit is three (3) years. Any temporary F&B service shall obtain a temporary F&B Service Permit

with a validity period of no more than six (6) months. For the extension of the F&B Service Permit,

the F&B service provider shall apply to the original permit issuance department for the extension

at least 30 days before the expiry date of the F&B Service Permit. The delay in such extension

application shall result in a fresh application for a new F&B Service Permit. After receiving the

extension application, the original permit issuance department will conduct checks on the

business venue, layout, sanitation, and the basic requirements to obtain the F&B Service Permit.

If the extension application is approved, a new F&B Service Permit will be issued. The F&B

service provider shall operate in accordance with the permitted scope of the F&B Service Permit,

and shall display the F&B Service Permit in the restaurant.

Measures for Administration of Alcohol Distribution

Pursuant to the Measures for Administration of Alcohol Distribution which was promulgated on

7 November 2005 by the Ministry of Commerce of PRC and came into effect on 1 January 2006,

a filing and registration system and a traceable system for operators engaged in the distribution

of alcohol are implemented in the PRC. Under these systems, entities or individuals who are

engaged in alcohol wholesale or retail (“Alcohol Managers”) shall register with the commerce

department at the same level as the industry and commerce administration department at their

place of registration within 60 days after obtaining their business licence. In purchasing alcohol

products, Alcohol Managers shall ask for the copies of the suppliers’ business licence, health

permit, production permit (only applicable for alcohol producers), registration form, and the

authorisation letter for alcohol marketing (only applicable for alcohol producers).


D-2

In addition, Alcohol Managers shall establish an alcohol operation purchase and sales account

and maintain such account for at least three years. Where any entity or individual violates any of

the above measures will be given a warning and will be ordered to make rectification within the

time prescribed by the competent department of commerce and the punishment may be published

to the general public. If the entity or individual refuses to rectify, the competent department of

commerce may impose a fine up to RMB5,000 depending on the circumstances and the

punishment will be published to the general public.

Fire Protection Law

The Fire Protection Law of the PRC (“Fire Protection Law”) was first adopted on 29 April 1998 and

revised on 28 October 2008. According to the Fire Protection Law in the PRC, the Public Security

Department under the PRC State Council shall supervise and administer the fire protection

throughout the country and the public security agencies of the local people’s governments at or

above the county level shall supervise and administer the work of fire protection within their own

administrative regions.

Under the Fire Protection Law, before the use or start of business of public places, such as

ballroom, cinema, hotel, restaurant, shopping centre, and trade market, an application shall be

submitted to the department for fire protection of the local public security agency for inspection.

These places may only be put to use or start business operation when they pass the inspection

for security against fire. If there is any violation of the Fire Protection Law, the department for fire

protection of the local public security agency may impose a fine between RMB30,000 and

RMB300,000.

According to the Measures for the Supervision and Administration of Fire Protection on

Construction Project, restaurants and shopping malls with the total construction area of more than

10,000m2 and recreational restaurants with the total construction area of more than 500m2 shall

apply to the department for fire protection of the local public security agency for fire safety

inspection after completion of construction.

Environment Protection Law

The Environment Protection Law of the PRC (“Environment Protection Law”) was first

promulgated and adopted on 26 December 1989 and was amended on 24 April 2014. The latest

version came into force on 1 January 2015. The Environment Protection Law is formulated for the

purposes of environmental protection and improvement, prevention and treatment of pollution and

other hazards, and protection of public health.

According to the Environment Protection Law and other related laws and regulations in the PRC,

the Ministry of Environmental Protection of the PRC and its local authorities shall conduct unified

supervision and management of environmental protection work within their respective

administrative regions.

According to the Environmental Impact Assessment Law of the PRC, which came into effect on 1

September 2003, and the Reply to the Environmental Impact Assessment Which Applies To The

Newly Built F&B and Entertainment Service Facilities, which came into effect on 20 January 1999,

all construction, rebuilding and expansion of F&B and entertainment service facilities, and change

from leasing buildings to F&B and entertainment service facilities are required to apply to the local

environmental protection administrative authorities for approvals.


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Water Pollution Prevention and Control Law

The Water Pollution Prevention and Control Law of the PRC (“Water Pollution Prevention and

Control Law”) was first promulgated on 11 May 1984, amended on 15 May 1996 and further

amended on 28 February 2008. The Water Pollution Prevention and Control Law applies to the

prevention and control of pollution of rivers, lakes, canals, irrigation channels, reservoirs and

other surface waters and ground waters within the territory of the PRC. According to the Water

Pollution Prevention and Control Law, the environmental protection departments of the people’s

governments at various levels shall exercise unified supervision and management of prevention

and control of water pollution.

In addition, according to the Water Pollution Prevention and Control Law and the Notice of

Collecting Pollutant Discharge Fee on Enterprises and F&B and Entertainment Industry from the

Bureau of National Environmental Protection, enterprises which directly discharge pollutants into

the waters shall pay a pollutant discharge fee according to the PRC regulations and if the

discharge exceeds the limits set by the national or local standards, they shall pay an additional fee

for excess discharge.

Trademark Law

Registered trademarks are protected under the Trademark Law of the PRC (“Trademark Law”)

which was adopted in 1982 and last amended in 2013. The Trademark Office of the State

Administration of Industry and Commerce under the PRC State Council is responsible for the

registration and administration of trademarks throughout China. The Trademark Law adopts a

“first-to-file” principle with respect to trademark registration. Any person applying for the

registration of a trademark shall not infringe upon the prior legitimate rights of others, nor shall any

person register in advance a trademark that has already been used by another person and has

already gained “sufficient degree of reputation” through that person’s use. The registered

trademark is valid for a renewable ten-year period, unless otherwise revoked by the Trademark

Office. The administrative authority for industry and commerce is authorised to investigate and

deal with any infringement of registered trademarks. Where a crime is suspected to have been

committed, the administrative authority for industry and commerce shall promptly turn over the

case to the judicial department to be dealt with in accordance with the law.

Labour Law

According to the Labour Law of the PRC which came into effect on 1 January 1995, enterprises

and organisations shall establish and promote the safety and health of the work place, comply with

the national rules and standards of the safety and health at work place, and educate the workers

accordingly. Enterprises and organisations are obliged to provide the workers with a safe and

healthy working environment as required by the national regulations and the implemented

measures on work safety.

In addition, the Labour Contract Law of the PRC (“Labour Contract Law”), which was first

promulgated on 29 June 2007 and amended on 28 December 2012, is formulated to improve the

labour contract system, define the rights and obligations of parties under a labour contract, protect

the legitimate rights and interests of workers and to establish and develop a harmonious and

stable labour relationship. Under the Labour Contract Law, an employer must conclude an

individual written employment contract with each full-time employee. The Labour Contract Law

imposes stricter regulations on employers in relation to fixed-term labour contract, hiring and


D-4

terminating temporary employees. An employer shall not compel any of its employees to work

overtime or do so in a disguised form. If an employer arranges for an employee to work overtime,

the employer shall pay such employee overtime pay according to the relevant provisions of the

PRC. In addition, the salary of the employees shall be no less than the local minimum salary

standard, and shall be paid on time to the employees.

Employment Promotion Law

The Employment Promotion Law of the PRC (“Employment Promotion Law”) was adopted on 30

August 2007 and was amended on 24 April 2015. The Employment Protection Law is enacted to

promote employment and the balance between economic development and the expansion of

employment opportunities, and to promote social harmony and stability. According to the

Employment Promotion Law, the PRC State Council shall establish a sound unemployment

insurance system to ensure the basic living need of the unemployed and promote their

employment. The State shall also encourage enterprises to increase the number of job

opportunities. The people’s governments at all levels shall take measures to gradually improve

and implement labour and social insurance policies applicable to the flexible employment of

part-time employee and to provide assistance and services for employees under flexible

employment.

Safe Production Law

According to the Safe Production Law of the PRC (“Safe Production Law”), which was amended

and was effective from 31 August 2014, enterprises and institutions shall satisfy the safe

production conditions as required under the Safe Production Law and other related laws,

regulations, rules and implemented measures. Those enterprises and institutions which do not

satisfy any of the safe production conditions will not be allowed to carry on production and

business activities. Enterprises and institutions are required to provide their employees with safe

production education and training programmes. The design, manufacture, installment, utility,

examination, maintenance, rebuild and scrap of the safety equipment shall meet the national or

industrial standards. Additionally, enterprises and institutions are required to provide their

employees with work protections in accordance with national or industrial standards, and to

supervise and educate their employees on the utilities according to the rules.

Regulations on Work-Related Insurance

According to the Regulations on Work-Related Injury Insurance promulgated on 27 April 2003 and

amended on 20 December 2010, the Trail Measures on Childbirth Insurance for Workers in

Enterprises which came into effect on 1 January 1995, the Interim Regulations on Collection and

Payment of Social Insurance Premiums which came into effect on 22 January 1999, and the

Administrative Regulations on Housing Fund adopted on 3 April 1999 and amended on 24 March

2002, enterprises and institutions shall offer benefit packages to employees, including insurance

for retirement, unemployment, childbirth, work-related injuries and medical care, housing fund and

other benefit packages.

The Social Insurance Law of the PRC was adopted on 28 October 2010 and came into force on

1 July 2011. This law consolidates social insurance systems such as basic pension insurance,

basic medical insurance, employment injury insurance, unemployment insurance and maternity

insurance so as to protect the rights of citizens in receiving material assistance from the state and


D-5

society when getting old, ill, injured at work, unemployed and giving birth. In addition, this law sets

out the employers’ responsibilities and the legal liabilities for any violation of the laws and

regulations relating to social insurance.

According to the Administrative Regulations on Housing Fund adopted on 3 April 1999 and

amended on 24 March 2002, both employer and employee must make regular contributions into

the employee’s housing fund. The employer’s contribution shall be no less than 5.0% of the

employee’s average monthly salary of the previous year.

Enterprise Income Tax Law

The Enterprise Income Tax Law of the PRC was adopted on 16 March 2007 and came into force

on 1 January 2008. The enterprise income tax rate shall be 25.0% for the incomes acquired from

the enterprises and institutions in the PRC.

Business Tax

The business tax of foreign-invested enterprises is administered under and is subject to the

Interim Regulations of the PRC on Business Tax, which was adopted on 5 November 2008 and

came into force on 1 January 2009. According to these interim regulations, an enterprise in the

service industry shall pay 5.0% of its business volume.

Value Added Tax

The value added tax of foreign-invested enterprises is administered under and is subject to the

Interim Regulations of the PRC on Value Added Tax (“VAT”), which was adopted on 5 November

2008 and came into force on 1 January 2009. Entities and individuals engaged in the sale of

goods, supply of processing, repair and replacement services, and import of goods within the

territory of the PRC shall pay VAT in accordance with these interim regulations. The VAT rate is

17.0% for general VAT taxpayers.


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The following statements are brief summaries of the rights and privileges of our Shareholders

conferred by the laws of Singapore, the Catalist Rules and our Constitution. These statements

summarise the material provisions of our Constitution but are qualified in entirety by reference to

our Constitution, a copy of which is available for inspection at our registered office during normal

business hours for a period of six months from the date of this Offer Document.

Ordinary Shares

All of our Shares are in registered form. We may, subject to the provisions of the Companies Act

and the rules of the SGX-ST, purchase our 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 Shares.

New Shares

New Shares may only be issued with the prior approval of our Shareholders in a general meeting.

The aggregate number of Shares to be issued pursuant to such approval may not exceed the limit

as may be prescribed by the SGX-ST), of which the aggregate number of Shares to be issued

other than on a pro rata basis to our Shareholders may not exceed the limit as may be prescribed

by the SGX-ST). The approval, if granted, will lapse at the conclusion of the annual general

meeting following the date on which the approval was granted or the date by which the annual

general meeting is required by law to be held, whichever is the earlier. Subject to the foregoing,

the provisions of the Companies Act and any special rights attached to any class of shares

currently issued, all New Shares are under the control of our Board of Directors who may allot and

issue the same with such rights and restrictions as it may think fit.

Shareholders

Only persons who are registered in our Register of Shareholders and, in cases in which the person

so registered is CDP, the persons named as the Depositors in the Depository Register maintained

by CDP for the Shares, are recognised as our Shareholders. We will not, except as required by

law, recognise any equitable, contingent, future or partial interest in any Share or other rights for

any Share other than the absolute right thereto of the registered holder of that Share or of the

person whose name is entered in the Depository Register for that Share. We may close our

Register of Shareholders for any time or times if we provide the SGX-ST at least 10 clear Market

Days’ notice. However, the Register of Shareholders may not be closed for more than 30 days in

aggregate in any calendar year. We typically close our Register of Shareholders to determine

Shareholders’ entitlement to receive dividends and other distributions.

Transfer of Shares

There is no restriction on the transfer of fully paid Shares except where required by law or the

Catalist Rules or the rules or by-laws of any stock exchange on which our Company is listed. Our

Board of Directors may decline to register any transfer of Shares which are not fully paid Shares

or Shares on which we have a lien. Our Shares may be transferred by a duly signed instrument

of transfer in a form approved by the SGX-ST or any stock exchange on which our Company is

listed. 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. We will replace lost or

APPENDIX EDESCRIPTION OF OUR SHARES

E-1

destroyed certificates for Shares if it is properly notified and if the applicant pays a fee which will

not exceed S$2 and furnishes any evidence and indemnity that our Board of Directors may

require.

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% 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% of our

issued share capital may call a meeting. Unless otherwise required by law or by our Constitution,

voting at general meetings is by ordinary resolution, requiring an affirmative vote of a simple

majority of the votes cast at the meeting. An ordinary resolution suffices, for example, for the

appointment of directors. A special resolution, requiring the affirmative vote of at least 75% of the

votes cast at the meeting, is necessary for certain matters under Singapore law, including

voluntary winding up, amendments to our Constitution, a change of our corporate name and a

reduction in our share capital. We must give at least 21 days’ notice in writing for every general

meeting convened for the purpose of passing a special resolution. Ordinary resolutions generally

require at least 14 days’ notice in writing. The notice must be given to each of our Shareholders

who have supplied us with an address in Singapore for the giving of notices and must set forth the

place, the day and the hour of the meeting and, in the case of special business, the general nature

of that business.

Voting Rights

A holder of our Shares is entitled to attend, speak and vote at any general meeting, in person or

by proxy. Proxies need not be Shareholders. 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 72 hours before the general

meeting. Except as otherwise provided in our Constitution, two or more Shareholders must be

present in person or by proxy to constitute a quorum at any general meeting. Under our

Constitution, on a show of hands, every Shareholder present in person and by proxy shall have

one vote and on a poll, every Shareholder present in person or by proxy shall have one vote for

each Share which he holds or represents. A poll may be demanded in certain circumstances,

including by the chairman of the meeting or by any Shareholder present in person or by proxy and

representing not less than one-tenth of the total voting rights of all Shareholders having the right

to attend and vote at the meeting or by any two Shareholders present in person or by proxy and

entitled to vote. In the case of an equality of votes, whether on a show of hands or a poll, the

chairman of the meeting shall be entitled to a casting vote.

Dividends

We may, by ordinary resolution of our Shareholders, declare dividends at a general meeting, but

we may not pay dividends in excess of the amount recommended by our Board of Directors. We

must pay all dividends out of our profits and we may satisfy dividends by the issue of Shares to

our Shareholders. All dividends are paid pro rata among our 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. Unless otherwise directed, dividends are paid by cheque or warrant

sent through the post to each Shareholder at his registered address. Notwithstanding the


E-2

foregoing, the payment by us to CDP of any dividend payable to a Shareholder whose name is

entered in the Depository Register shall, to the extent of payment made to CDP, discharge us from

any liability to that Shareholder in respect of that payment.

Bonus and Rights Issue

Our Board of Directors may, with approval of our Shareholders at a general meeting, capitalise

any reserves or profits and distribute the same as bonus Shares credited as paid-up to our

Shareholders in proportion to their shareholdings. 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 stock exchange on

which we are listed.

Takeovers

Under the Singapore Code on Take-overs and Mergers (“Singapore Take-over Code”), issued by

the Authority pursuant to section 321 of the SFA, any person acquiring an interest, either on his

own or together with parties acting in concert with him, in 30% or more of the voting Shares must

extend a takeover offer for the remaining voting Shares in accordance with the provisions of the

Singapore Take-over Code. In addition, a mandatory takeover offer is also required to be made if

a person holding, either on his own or together with parties acting in concert with him, between

30% and 50% of the voting shares acquires additional voting shares representing more than 1%

of the voting shares in any 6 month period. Under the Singapore Take-over Code, the following

individuals and companies will be presumed to be persons acting in concert with each other

unless the contrary is established:–

(a) the following companies:–

(i) a company;

(ii) the parent company of (i);

(iii) the subsidiaries of (i);

(iv) the fellow subsidiaries of (i);

(v) the associated companies of (i), (ii), (iii) or (iv); and

(vi) companies whose associated companies include any of (i), (ii), (iii), (iv) or (v);

(b) a company with any of its directors (together with their close relatives, related trusts as well

as companies controlled by any of the directors, their close relatives and related trusts);

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

(d) a person with any investment company, unit trust or other fund whose investment such

person manages on a discretionary basis, but only in respect of the investment account

which such person manages;


E-3

(e) a financial or other professional adviser, including a stockbroker, with its customer in respect

of the shareholdings of:–

(i) the adviser and persons controlling, controlled by or under the same control as the

adviser; and

(ii) all the funds which the adviser manages on a discretionary basis, where the

shareholdings of the adviser and any of those funds in the customer total 10% or more

of the customer’s equity share capital;

(f) directors of a company (together with their close relatives, related trusts and companies

controlled by any of such directors, their close relatives and related trusts) which is subject

to an offer or where the directors have reason to believe a bona fide offer for their company

may be imminent;

(g) partners; and

(h) the following persons and entities:–

(i) an individual;

(ii) the close relatives of (i);

(iii) the related trusts of (i);

(iv) any person who is accustomed to act in accordance with the instructions of (i); and

(v) companies controlled by any of (i), (ii), (iii) or (iv).

Under the Singapore Take-over Code, a mandatory offer made with consideration other than cash

must be accompanied by a cash alternative at not less than the highest price paid by the offeror

or any person acting in concert within the preceding six months.

Liquidation or Other Return of Capital

If we liquidate or in the event of any other return of capital, holders of our Shares will be entitled

to participate in any surplus assets in proportion to their shareholdings, subject to any special

rights attaching to any other class of shares.

Indemnity

As permitted by Singapore law, our Constitution provide that, subject to the Companies Act, our

Board of Directors and officers shall be entitled to be indemnified by us 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 judgement is given in

their favour or in which they are acquitted or in connection with any application under any statute

for relief from liability in respect thereof in which relief is granted by the court. We may not

indemnify our Directors and officers against 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 us.


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Limitations on Rights to Hold or Vote Shares

Except as described in “Voting Rights” and “Takeovers” above, there are no limitations imposed

by Singapore law or by our Constitution on the rights of non-resident Shareholders to hold or vote

in respect of our Shares.

Minority Rights

The rights of minority Shareholders of Singapore-incorporated companies are protected under

Section 216 of the Companies Act, which gives the Singapore courts a general power to make any

order, upon application by any of our Shareholders, as they think fit to remedy any of the following

situations where:–

(a) 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

(b) we take an action, or threaten to take an action, or our Shareholders pass a resolution, or

propose to pass a resolution, which unfairly discriminates against, or is otherwise prejudicial

to, one or more of our Shareholders, including the applicant.

Singapore courts have a wide discretion as to the reliefs they may grant and those reliefs are in

no way limited to those listed in the Companies Act itself. Without prejudice to the foregoing, the

Singapore courts may:–

(a) direct or prohibit any act or cancel or vary any transaction or resolution;

(b) regulate the conduct of our affairs in the future;

(c) authorise civil proceedings to be brought in our name of, or on behalf of, by a person or

persons and on such terms as the court may direct;

(d) provide for the purchase of a minority Shareholder’s Shares by our other Shareholders or by

us and, in the case of a purchase of Shares by us, a corresponding reduction of our share

capital; or

(e) provide that we be wound up.


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The following is a summary of certain Singapore income tax, stamp duty and goods and services

tax consequences of purchasing, holding or disposal of our Shares. This summary is based on

current tax laws in Singapore, regulations and decisions now in effect, all of which are subject to

change (possibly with retroactive effect). This summary is not intended to be or to be regarded as

advice on the tax position of any investor or of any person purchasing, holding or otherwise

dealing with our Shares. The statements made herein do not purport to be a comprehensive nor

exhaustive description of all of the tax considerations that may be relevant to a decision to

purchase, hold or dispose of our Shares and do not purport to deal with the tax consequences

applicable to all categories of investors. Prospective investors should consult their own

professional tax advisors regarding the Singapore and foreign income tax, stamp duty, estate duty

and other tax consequences of purchasing, holding or disposing of our Shares. It is emphasised

that neither we, our Directors, nor any other persons involved in this Placement accept

responsibility for any tax effects or liabilities resulting from the purchase, holding or disposal of our

Shares.

Income Tax

Corporate Income Tax

A corporate taxpayer is generally subject to Singapore income tax on the following:

(a) income accruing in or derived from Singapore; and

(b) unless otherwise exempt, income derived from outside Singapore which is received in

Singapore or deemed to have been received in Singapore by the operation of law.

A company is tax resident in Singapore if the control and management of its business is exercised

in Singapore. Generally, the control and management of a company is vested in the board of

directors and is regarded as exercised at the place where the board of directors meets to hold their

board meetings where strategic policies are discussed and formulated.

The prevailing corporate income tax is 17% with the first S$300,000 of normal chargeable income

of a company being generally exempt from tax as follows:

(a) 75% of up to the first S$10,000 of normal chargeable income; and

(b) 50% of up to the next S$290,000 of normal chargeable income.

A 50% corporate income tax rebate capped at S$20,000 per year of assessment (“YA”) is available

for YA 2016 and YA 2017.

Tax exemption is granted to a Singapore-resident company on its foreign-sourced dividend,

foreign branch profits or foreign-sourced service income received in Singapore on or after 1 June

2003 if certain prescribed conditions are met.

In respect of foreign-sourced income received in Singapore and on which foreign tax has been

paid or deducted at source, the Singapore-resident company is entitled to claim a foreign tax

credit for the foreign tax paid subject to meeting certain conditions. The amount of foreign tax

credit to be granted is based on the lower of the Singapore income tax payable on the

foreign-sourced income and the actual foreign taxes paid on that income.

APPENDIX FTAXATION

F-1

Under the foreign tax credit pooling system (“FTC pooling system”), a resident taxpayer may elect

to pool the foreign taxes paid (including any underlying tax, where applicable) on any items of its

foreign-sourced income, provided that all of the following conditions are met:

(a) income tax must have been paid on the income in the foreign territory from which the income

is derived;

(b) at the time the foreign-sourced income is received in Singapore, the highest corporate tax

rate (headline tax rate) of the foreign territory from which the income is derived is at least

15%;

(c) there must be Singapore income tax payable on the foreign-sourced income; and

(d) the taxpayer is entitled to claim foreign tax credits under sections 50, 50A or 50B of the

Singapore Income Tax Act on its foreign-sourced income.

The amount of foreign tax credit to be granted under the FTC pooling system is based on the lower

of the total Singapore tax payable on the pooled foreign-sourced income and the pooled foreign

taxes paid on that income.

Individual Income Tax

Individuals, whether Singapore residents or not, generally are liable to Singapore income tax on

income accruing in or derived from Singapore. They are generally exempt from Singapore income

tax on income derived from outside Singapore.

An individual is regarded as tax resident in Singapore for any YA if, during the year preceding the

YA, the individual is physically present in Singapore for 183 days or more or resides in Singapore

except for such temporary absences therefrom as may be reasonable and not inconsistent with a

claim by such individual to be resident in Singapore, or exercises an employment (other than a

director of a company) in Singapore for 183 days or more.

Singapore resident individuals are taxed (on income subject to Singapore income tax) at

progressive rates, currently ranging from 0% to 20% up to YA 2016. With effect from YA 2017, the

highest individual income tax rate would be 22%. Non-Singapore resident individuals are

generally taxed (on income subject to Singapore income tax) at the rate of 20%. This would be

increased to 22% with effect from YA 2017.

Dividend Distributions

Singapore currently adopts the one-tier corporate tax system (“one-tier system”). Under the

one-tier system, dividends paid by a company resident in Singapore are exempt from Singapore

income tax in the hands of its shareholders, regardless of whether the shareholders are

corporates or individuals or whether the shareholders are tax resident in Singapore. These

dividends are also not subject to Singapore withholding tax.

APPENDIX FTAXATION

F-2

Gains on Disposal of Shares

Singapore currently does not impose tax on capital gains. Any gains considered to be capital in

nature made from the sale of our Shares will not be taxable in Singapore. However, any gains

derived from the sale of our Shares may be considered to be income in nature and taxable if the

gains arose from activities which the Comptroller regards as the carrying on of a trade or business

in Singapore. Such gains may also be considered income in nature, even if they do not arise from

an activity in the ordinary course of trade or business or an ordinary incident of some other

business activity if the intention of the investor was not to hold our Shares as long-term

investments.

There are currently no specific laws or regulations that address the characterisation of gains. The

characterisation of gains arising from the sale of our Shares will depend on the facts and

circumstances of each Shareholder.

Gains derived by a divesting company from the disposal of ordinary shares in an investee

company are exempt from tax if immediately prior to the date of share disposal, the divesting

company had held at least 20% of the ordinary shares in the investee company for a continuous

period of at least 24 months. This tax exemption is applicable to disposals made during the period

1 June 2012 to 31 May 2017 (both dates inclusive). As announced during the Singapore Budget

2016, the tax exemption will be extended to cover disposals made during the period from 1 June

2017 to 31 May 2022 (both dates inclusive).

The above tax exemption does not apply in limited circumstances, for example disposal of shares

in an unlisted investee company that is in the business of trading or holding Singapore immovable

properties (other than property development).

Shareholders who have adopted or are required to adopt Singapore Financial Reporting Standard

39 – Financial Instruments: Recognition and Measurement (“FRS 39”) for financial reporting

purposes may for Singapore income tax purposes be required to recognise gains or losses (not

being gains or losses in the nature of capital) on our Shares, irrespective of disposal. If so, the

gains or losses recognised may be taxed or allowed as a deduction even though they are

unrealised. Shareholders should consult their own accounting and tax advisers regarding the

Singapore income tax consequences of their ownership and disposal of our Shares arising from

the adoption of FRS 39.

Stamp Duty

There is no stamp duty payable on the subscription of our Shares.

Where an instrument of transfer is executed in respect of our Shares, stamp duty is payable on

such instrument of transfer at the rate of 0.2% of the purchase consideration or market value of

our Shares, whichever is higher.

The purchaser is liable for stamp duty, unless otherwise agreed. No stamp duty is payable if no

instrument of transfer is executed or the instrument of transfer is executed outside Singapore.

However, stamp duty would be payable if the instrument of transfer which is executed outside

Singapore is subsequently received in Singapore.

Stamp duty is not applicable to electronic transfers of our Shares through the CDP system.

APPENDIX FTAXATION

F-3

Goods & Services Tax (“GST”)

The disposal of our Shares by a GST-registered Shareholder belonging in Singapore for GST

purposes through a SGX-ST member or to another person belonging in Singapore for GST

purposes is an exempt supply not subject to GST.

Any input GST (for example, GST on brokerage) incurred by the GST-registered Shareholder in

making such an exempt supply is generally not recoverable from the Singapore Comptroller of

GST unless the Shareholder satisfies the conditions prescribed under the GST legislation or under

certain GST concessions.

Where our Shares are sold by a GST-registered Shareholder contractually to and for the direct

benefit of a person belonging outside Singapore (and who is outside Singapore at the time of

supply), the sale is a taxable supply subject to GST at 0%. Any input GST (for example, GST on

brokerage) incurred by him in the making of this zero-rated supply for the purpose of his business

will, subject to the provisions under the GST legislation, be recoverable as an input tax credit in

his GST returns.

Investors and/or Shareholders should seek their own tax advice on the recoverability of GST

incurred on expenses in connection with the purchase and disposal of our Shares.

Services such as brokerage and handling services rendered by a GST-registered person to an

investor belonging in Singapore for GST purposes in connection with the investor’s purchase,

ownership or disposal of our Shares will be subject to GST at the standard rate of 7%. Similar

services rendered contractually to and for the direct benefit of an investor belonging outside

Singapore for GST purposes (and who is outside Singapore at the time of supply) will be subject

to GST at 0%.

Estate Duty

Singapore estate duty has been abolished with effect from 15 February 2008.

APPENDIX FTAXATION

F-4

You are invited to apply and subscribe for the Placement Shares at the Placement Price, 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.

YOU MAY NOT USE CPF FUNDS TO APPLY FOR THE PLACEMENT SHARES.

3. You are allowed to submit only one (1) application in your own name for the Placement

Shares.

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 and the Sponsor, Issue Manager and the Placement Agent.

Joint and multiple applications for Placement Shares shall be rejected. If you submit

or procure submissions of multiple share applications for the 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 and the Sponsor, Issue Manager and the Placement Agent.

4. We will not accept applications from any person under the age of 18 years, undischarged

bankrupts, sole proprietorships, partnerships or non-corporate bodies, joint Securities

Account holders of CDP and from applicants whose addresses (as furnished in their

Application Forms) 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

deceased name at the time of application.

5. We will not recognise the existence of a trust. Any application by a trustee or trustees must

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 approved nominee companies after complying with paragraph 6 below.

6. WE WILL NOT ACCEPT APPLICATIONS FROM NOMINEES EXCEPT THOSE MADE BY

APPROVED NOMINEE COMPANIES ONLY. Approved nominee companies are defined as

banks, merchant banks, finance companies, insurance companies and licensed securities

dealers in Singapore and nominee companies controlled by them. Applications made by

nominees other than approved nominee companies shall be rejected.

APPENDIX GTERMS, CONDITIONS AND PROCEDURES FOR APPLICATIONS

G-1

7. IF YOU ARE NOT AN APPROVED NOMINEE COMPANY, YOU MUST MAINTAIN A

SECURITIES ACCOUNT WITH CDP IN YOUR OWN NAME AT THE TIME OF YOUR

APPLICATION. If you do not have an existing Securities Account with CDP in your own name

at the time of your application, your application will be rejected. If you 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 8 below, your application shall be rejected if your

particulars such as name, NRIC/passport number, nationality, permanent residence status

and CDP Securities Account number provided in your Application Form differ from those

particulars in your Securities Account as maintained with CDP. If you have more than one

individual direct Securities Account with CDP, your application shall be rejected.

8. 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 correspondences from

CDP will be sent to your address last registered with CDP.

9. Our Company and the Sponsor, Issue Manager and Placement Agent reserves the right

to reject any application which does not conform strictly to the instructions set out in

the Application Forms and in this Offer Document or with the terms and conditions of

this Offer Document or, in the case of an application by way of an Application Form,

which is illegible, incomplete, incorrectly completed or which is accompanied by an

improperly drawn up or improper form of remittance or remittances which are not

honoured upon the first presentation.

10. Our Company and the Sponsor, Issue Manager and 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.

11. Our Company and the Sponsor, Issue Manager and Placement Agent reserves the right to

reject or accept, in whole or in part, or to scale down any application, without assigning any

reason therefor, and no enquiry and/or correspondence on our decision of our Company will

be entertained. In deciding the basis of allotment which shall be at the discretion of our

Company and the Sponsor, Issue Manager and Placement Agent, due consideration will be

given to the desirability of allotting Placement Shares to a reasonable number of applicants

with a view to establishing an adequate market for our Shares.

12. Share certificates will be registered in the name of CDP or its nominee and will be forwarded

only to CDP. It is expected that CDP will send to you, at your own risk, within 15 Market Days

after the close of the Application List, 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 and the Sponsor, Issue Manager

and Placement Agent. You irrevocably authorise CDP to complete and sign on your behalf,

as transferee or renounce, any instrument of transfer and/or other documents required for

the issue or transfer of the Placement Shares allotted to you.


G-2

13. In the event that we lodge 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 sole and absolute discretion either:

(i) 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; or

(ii) 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 13(i) 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 (7) 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 but trading has not commenced, we will (as

required by law), and subject to the SFA, either:

(iii) 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

(iv) 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 13(iii) 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, subject to the SFA, 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.

Additional terms and instructions applicable upon the lodgement of the Relevant Document,

including instructions on how you can exercise the option to withdraw, may be found in such

Relevant Document.

14. 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, and the

Sponsor, Issue Manager and Placement Agent, and any other parties so authorised by the

foregoing persons.


G-3

15. 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 Placement Agent or its designated sub-placement agent.

16. By completing and delivering an Application Form in accordance with the provisions of this

Offer Document, you:–

(i) Irrevocably offer, 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, subject to the conditions set out in this

Offer Document and the Constitution of our Company;

(ii) agree that the aggregate Placement Price for the Placement Shares applied for is due

and payable to our Company upon application with;

(iii) consent to the collection, use and disclosure of your name, NRIC/passport number or

company registration number, address, nationality, permanent resident status,

Securities Account number, share application amount, share application details and

other personal data (“Personal Data”) by the Share Registrar, CDP, Securities Clearing

and Computer Services (Pte.) Ltd (“SCCS”), SGX-ST, our Company, the Sponsor, Issue

Manager and Placement Agent and/or other authorised operators (the “Relevant

Persons”) for the purpose of facilitating your application for the Placement Shares;

(iv) warrant that where you, as an approved nominee company, disclose the Personal Data

of the beneficial owner(s) to the Relevant Persons, such disclosure is in compliance

with the applicable laws (collectively, the “Personal Data Privacy Terms”);

(v) warrant the truth and accuracy of the information contained, and representations and

declarations made, in your application, and acknowledge and agree that such

information, representations and declarations will be relied on by our Company and

Sponsor, Issue Manager and Placement Agent in determining whether to accept your

application and/or whether to allot any Placement Shares to you; and

(vi) 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 and

Sponsor, Issue Manager and Placement Agent will infringe any such laws as a result of

the acceptance of your application.

17. Our acceptance of applications will be conditional upon, inter alia, our Company and

Sponsor, Issue Manager and Placement Agent being satisfied that:

(i) permission has been granted by the SGX-ST to deal in and for quotation of all our

existing Shares, the Placement Shares, the Performance Shares and the Option Shares

on Catalist;

(ii) the Management Agreement and the Placement Agreement referred to in the section

“Management and Placement Arrangements” of this Offer Document have become

unconditional and have not been terminated or cancelled prior to such date as our

Company may determine; and


G-4

(iii) the Authority has not served a stop order (“Stop Order”) which directs that no or no

further shares to which this Offer Document relates be allotted.

18. In the event that a Stop Order in respect of the Placement Shares is served by the Authority

or other competent authority, and

(i) the Placement Shares have not been issued, we will (as required by law), and subject

to the SFA, deem all applications withdrawn and cancelled and we shall refund the

application monies (without interest or any share of revenue or other benefit arising

therefrom) to you within 14 days of the date of the Stop Order; or

(ii) if the Placement Shares have already been issued but trading has not commenced, the

issue of the Placement Shares will (as required by law) be deemed void and:

(a) 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; and

(b) our Company will refund the application monies (without interest or any share of

revenue or other benefit arising therefrom) to you within 7 days from the date of

receipt of those documents (if applicable) or the date of the Stop Order, whichever

is later.

This shall not apply where only an interim stop order has been served.

19. In the event that an interim stop order in respect of the Placement Shares is served by the

Authority or other competent authority, no Placement Shares shall be issued to you when the

interim Stop Order is in force.

20. 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.

21. 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 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 generally circulating daily press.

22. We will not hold any application in reserve.

23. We will not allot shares on the basis of this Offer Document later than six (6) months after

the date of registration of this Offer Document by the SGX-ST, acting as an agent on behalf

of the Authority.

24. Additional terms and conditions for applications by way of an Application Form are set out on

pages G-6 to G-8 of this Offer Document.


G-5

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 the section entitled “Appendix G – Terms, Conditions And

Procedures For Applications and Acceptance” of this Offer Document as well as the Constitution

of our Company.

1. Your application for the Placement Shares must be made using the BLUE Application Form

for Placement Shares 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 and the Sponsor, Issue Manager and 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

Documents or which are illegible, incomplete, incorrectly completed or which are

accompanied by improperly drawn remittances or improper form of remittances which

are not honoured upon their first presentation.

2. Your Application Forms must be completed in English. Please type or write clearly in ink

using BLOCK LETTERS.

3. All spaces in the Application Forms, except those under the heading “FOR OFFICIAL USE

ONLY”, must be completed and the words “NOT APPLICABLE” or “N.A.” should be written

in any space that is not applicable.

4. Individuals, corporations, approved nominee companies and trustees must give their names

in full. If you are an individual, you must make your application using your full names as they

appear in your identity cards (if you have such identification document) or in your passports

and, in the case of 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 Constitution or equivalent constitutive documents of the

corporation. If you are a corporate applicant and your application is successful, a copy of

your Constitution or equivalent constitutive documents must be lodged with our Company’s

Share Registrar and Share Transfer Office. Our Company and the Sponsor, Issue Manager

and Placement Agent, reserve the right to require you to produce documentary proof of

identification for verification purposes.

5. (a) You must complete Sections A and B and sign on 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.


G-6

6. You (whether you are an individual or corporate applicant, whether incorporated or

unincorporated and wherever incorporated or constituted) will be required to declare whether

you are a citizen or permanent resident of Singapore or a corporation in which citizens or

permanent residents of Singapore or any body corporate constituted under any statute of

Singapore having an interest in the aggregate of more than 50.0 per cent 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 Placement Shares is a citizen or

permanent resident of Singapore or a corporation, whether incorporated or unincorporated

and wherever incorporated or constituted, in which citizens or permanent residents of

Singapore or any body corporate whether incorporated or unincorporated and wherever

incorporated or constituted under any statute of Singapore have an interest in the aggregate

of more than 50.0 per cent. of the issued share capital of or interests in such corporation.

7. Your application must be accompanied by a remittance in Singapore currency for the full

amount payable, in respect of the number of 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 “KATRINA SHARE ISSUE ACCOUNT” crossed “A/C PAYEE ONLY”, 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 us or the Sponsor, Issue Manager and Placement Agent for applications and

application monies received.

8. Monies paid in respect of unsuccessful applications are expected to be returned (without

interest or any share of revenue or other benefit arising therefrom) to you by ordinary post

within 24 hours of balloting of applications at your own risk. Where your application is

rejected or accepted in part only, the full amount or the balance of the application monies, as

the case may be, will be refunded (without interest or any share of revenue or other benefit

arising therefrom) to you by ordinary post at your own risk within fourteen (14) days after the

close of the Application List, provided that the remittance accompanying such application

which has been presented for payment or other processes has been honoured and

application monies have been received in the designated share issue account. In the event

that the Placement is cancelled by us following the termination of the Sponsorship and

Management Agreement and the Underwriting and 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 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 an agent on behalf of the Authority, the

application monies received will be refunded (without interest or any share of revenue or

other benefit arising therefrom) to you by ordinary post at your own risk within fourteen (14)

days from the date of the Stop Order.

9. Capitalised terms used in the Application Forms and defined in this Offer Document shall

bear the meanings assigned to them in this Offer Document.

10. You irrevocably agree and acknowledge that your application is subject to risks of fire, acts

of God and other events beyond the control of our Company, our Directors and the Sponsor,

Issue Manager and Placement Agent and/or any other party involved in the Placement and

if, in any such event, our Company and/or the Sponsor, Issue Manager and Placement Agent


G-7

do not receive your Application Form, you shall have no claim whatsoever against our

Company and/or the Sponsor, Issue Manager and Placement Agent, any other party involved

in the Placement for the Placement Shares applied for or for any compensation, loss or

damage.

11. By completing and delivering the Application Form, you agree that:

(i) in consideration of our Company having distributed the Application Form to you and

agreeing to close the Application List at 12.00 noon on 22 July 2016 or such other time

or date as our Company may, in consultation with the Sponsor, Issue Manager and

Placement Agent, decide and by completing and delivering the Application Form, you

agree that:

(a) your application is irrevocable; and

(b) 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;

(ii) neither our Company and the Sponsor, Issue Manager and Placement Agent, Sub-

Placement Agent nor any party involved in the Placement shall be liable for any delays,

failures or inaccuracies in the rewarding, storage or in the transmission or delivery of

data relating to your application to us or CDP due to breakdowns or failure of

transmission, delivery or communication facilities or any risks referred to in paragraph

10 above or to any cause beyond their respective controls;

(iii) 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;

(iv) 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;

(v) you will not be entitled to exercise any remedy of rescission for misrepresentation at

any time after acceptance of your application;

(vi) in making your application, reliance is placed solely on the information contained in this

Offer Document and that none of our Company or the Sponsor, Issue Manager and

Placement Agent, or any other person involved in the Placement shall have any liability

for any information not so contained;

(vii) you accept and agree to the Personal Data Privacy Terms set out in this Offer

Document; and

(viii) 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 decides to allot any smaller number of Placement Shares or not to allot any

Placement Shares to you, you agree to accept such decision as final.


G-8


1 Adjusted gross profit margin refers to (revenue – cost of beverage and food ingredients) / revenue


Revenue and adjusted gross profit margin1 (Audited)

Profit before tax and profit before tax margin (Audited)

S$’000

S$’000

79.2%

10.7%

FY2013 FY2014 FY2015

79.1%

9.2%

79.6%

9.8%

52,443

5,116

45,410

4,169

40,700

4,338

Revenue Adjusted gross profit margin

Profit before tax Profit before tax margin

CAGR: 13.5%

CAGR: 8.6%

COMPETITIVE STRENGTHS:

Proprietary brands with different F&B concepts catering to wide market segment• Appeal to a wide range of customers with varying

degrees of spending power• Potentially better locations at preferential rental

terms, with clustering of different brand restaurants in same shopping mall

4 Halal-certified brands allow access to larger market• Growing demand for Singapore Halal-certified

products and services from overseas• High barriers of entry in attaining Halal certification

due to stringent food safety requirements and standards

Dedicated key management personnel and staff with extensive local F&B experience• Led by Executive Chairman and Executive Director,

each with more than 20 years of F&B experience• Supported by dedicated, loyal and experienced

staff, with most, including chefs, having been with the Group for more than 10 years

Established reputation in our marketplace• In operations since 1995• Growth over past 2 decades despite difficult F&B

industry environments in the past

Good relationships with suppliers and landlords• Able to negotiate prices of food ingredients and

reduce risks of late or non-delivery of supplies• Enable retention of strategic locations where

restaurants have been operating

PROSPECTS

Increase in popularity of food delivery services• Trend of busy consumers who are more willing to pay

for convenience1 • Reduces overheads and rental costs for physical

dining spaces• Huge potential within Singapore with the growth of

online shopping

Affluence growth and increase of households dining out in Singapore• Rising hectic lifestyle and increase in consumer

affluence• Increasing trend of average monthly house

expenditure on food2 and median monthly household income3

• Change in dining preference with customers looking towards mid-range restaurants4

Completion of new retail and F&B spaces and refurbishment of older shopping complexes• Possibility of opening new establishments or

expanding existing operations into new retail locations

Regional growth opportunities• Large domestic markets and growing middle income

group in the ASEAN region• Overseas expansion plans in Malaysia, Vietnam and

Indonesia• Halal certification enables us to cater to Muslim

patrons within the ASEAN region

STRATEGIES AND FUTURE PLANS

Launch of online food ordering and delivery system• Extends reach to a wider spectrum of customers and

increases efficiency of delivery process• Plan to expand services to all 9 F&B brands in 2016

from 3 currently

Grow restaurants for 3 “Halal” certified brands • Intensify expansion of Bali Thai, So Pho and Streats

brands in Singapore, Malaysia and Indonesia• Capitalise on potential demand for “Halal” certified

Asian food other than Malay cuisine

Geographical expansion into new regional markets• Plan to open and operate at least 2 restaurants in

Kuala Lumpur, Malaysia in the next 12 months under the So Pho and Streats brands

• Identified Malaysia, Vietnam and Indonesia as potential markets for expansion

Expansion through strategic alliances, acquisitions and joint ventures• Through such strategies, look to strengthen market

position, expand operations and expand into new complementary businesses


PROPOSED DIVIDENDSIntends to distribute dividends of not less than 60.0% of net profits

attributable to Shareholders in respect of FY2016

AWARDS AND ACCOLADES RECEIVED

THRIVING AND GROWING BUSINESS

1 Information extracted from a news article entitled “More players jumping on the food delivery wagon” published in The Straits Times found at http://www.straitstimes.com/tech/games-apps/more-players-jumping-on-the-food-delivery-wagon

2 Information extracted from RHB Research Report entitled “Confessions of a Shopaholic” dated 6 August 2015 found at http://research.rhbinvest.com.sg:9898/UploadPDF/SG_Consumer%20Sector%20-%20Great%20Singapore%20Sale_Sector%20Update_20150806_RHB.pdf

3 Information extracted from a news article entitled “Median monthly household income from work in 2015 up 4.9% on year in Singapore” found at http://www.businesstimes.com.sg/government-economy/median-monthly-household-income-from-work-in-2015-up-49-on-year-in-singapore

4 Information extracted from a report entitled “Food Forward Trends Report 2014 – Singapore” published by Weber Shandwick found at http://webershandwick.asia/wp-content/uploads/2014/04/FF-SINGAPORE-16April.pdf

FY2013 FY2014 FY2015

Enterprise 50 AwardBrand awarded:



Awarded by Enterprise 50 Association

Singapore’s Top RestaurantBrands awarded:

2015 Indobox

2015 Hutong

2015 Muchos

2015 Bali Thai

2015 RENNthai

2008 Bayang

2008 RENNthai

2008 Bali Thai

Awarded by Wine & Dine Experience Pte Ltd

Bronze Singapore HEALTH AwardBrand awarded:


Awarded by Singapore Health Promotion Board

Singapore Service Star AwardBrands awarded:

2011 Streats

2011 RENNthai

2011 Bayang

2011 Hutong

2011 Honguo

Awarded by Singapore Tourism Board

Certificate of Excellence in Singapore for Brand Strategy in Marketing Excellence Awards

Brand awarded:

2013 Bali Thai

Awarded by Marketing Magazine

Singapore’s Best RestaurantBrands awarded:

2004 Bali Thai

2004 RENNthai

2003 Bali Thai

2003 RENNthai

2002 Bali Thai

2002 RENNthai

Awarded by Singapore Tatler

(Company Registration Number: 201608344N) (Incorporated in the Republic of Singapore on 31 March 2016)

1 Sims Lane #05-05 Singapore 387355

• ION Orchard, Orchard• JEM, Jurong East

• Clarke Quay

• Clarke Quay

• Clarke Quay• Plaza Singapura, Orchard

• Clarke Quay

• 112 Katong, East Coast Road• Causeway Point, Woodlands• IMM Building, Jurong East• NEX, Serangoon• Resorts World Sentosa, Sentosa Gateway• Suntec City Mall, Temasek Boulevard• West Mall, Bukit Batok• The Seletar Mall, Sengkang• Waterway Point, Punggol• Gemdale Plaza, Chaoyang District,

Beijing, China• Raffles City, Dongcheng District,

Beijing, China

• IMM Building, Jurong East• NEX, Serangoon• Bukit Panjang Plaza, Bukit Panjang• City Square Mall, Kitchener Road• E!Hub Downtown East, Pasir Ris• One KM, Tanjong Katong Road• Resorts World Sentosa (Asian Cafe), Sentosa Gateway

• Bugis Junction, Victoria Street• NEX, Serangoon

• Novena Square, Thomson Road• Parkway Parade, Marine Parade Road• JEM, Jurong East• NEX, Serangoon• Paragon, Orchard• Tampines Mall, Tampines• Waterway Point, Punggol

AN ESTABLISHED AND RECOGNISED F&B GROUP WITH MULTI-CUISINE CONCEPTS

Northern Chinese cuisine• 1 restaurant in Singapore

Mexican cuisine• 2 restaurants in Singapore

Authentic Balinese favourites• 1 restaurant in Singapore

Traditional Thai cuisine• 1 restaurant in Singapore

CORPORATE PROFILE

OUR CUISINESKA

TRIN

A G

RO

UP

LTD.

KATRINA GROUP LTD. (Incorporated in the Republic of Singapore on 31 March 2016)

(Company Registration Number: 201608344N)

Sponsor, Issue Manager and Placement Agent

Placement of 35,800,000 New Shares at S$0.21 for each Share,

payable in full on application.

HONG LEONG FINANCE LIMITED(Incorporated in the Republic of Singapore)

(Company Registration Number: 196100003D)

OFFER DOCUMENT DATED 15 JULY 2016(Registered by the Singapore Exchange Securities Trading Limited

acting as agent on behalf of the Monetary Authority of Singapore on 15 July 2016)

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).

Hong Leong Finance Limited (the “Sponsor and Issue Manager”) has 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 and the new Shares (the “New Shares”) which are the subject of the Placement (as defined herein) on Catalist. 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 SGX-ST Mainboard. 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 Placement is made in or accompanied by this Offer Document that has been registered by the SGX-ST acting as agent on behalf of the Monetary Authority of Singapore (the “Authority”). We have not lodged or registered this Offer Document in any other jurisdiction.

Neither the Authority nor the SGX-ST has examined or approved the contents of this Offer Document. Neither the Authority nor the SGX-ST assumes any responsibility for the contents of this Offer Document, including the correctness of any of the statements or opinions made or reports

contained in this Offer Document. The SGX-ST does not normally review the application for admission but relies on the Sponsor and Issue Manager confirming that the Company is suitable to be listed on Catalist and complies with the rules of the SGX-ST Listing Manual (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.

Acceptance of applications will be conditional upon the issue of the New Shares and the listing and quotation of all our existing issued Shares and the New Shares on Catalist. If the admission and listing do not proceed, 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 claims against us, the Sponsor, Issue Manager and the Placement Agent (as defined herein).

After the expiration of six months from the date of registration of this Offer Document, no person shall make an offer of securities, or allot, issue or sell any securities, on the basis of this Offer Document; and no officer or equivalent person or promoter of the Company will authorise or permit the offer of any securities or the allotment, issue or sale of any securities, on the basis of this Offer Document.

Investing in the Shares involves risks which are described in the “RISK FACTORS” section of this Offer Document.

We own and operate:• 32 restaurants in Singapore• 2 restaurants in the PRC• 9 proprietary F&B brands• 4 Halal-certified brands

Each brand serves authentic cuisines of different ethnicity:• Indonesian • Yunnan• Thai • Northern Chinese• Hong Kong • Mexican • Vietnamese

restaurants inSINGAPORE

32 2restaurantsin the PRC

Casual Dining (Generally located in the heartlands)

Contemporary Upmarket (Located within the central business district vicinity)

Contemporary Hong Kong cuisine • 7 cafes in Singapore

Authentic Indonesian cuisine• 2 cafes in Singapore

Specialties from Yunnan• 2 restaurants in Singapore

Popular Vietnamese street food • 7 cafes in Singapore

Indonesian and Thai cuisine• 9 restaurants in Singapore and 2 in Beijing, PRC