EGM Circular DD 10 October-10

CIRCULAR DATED 10 OCTOBER 2011

This Circular is issued by C.K. Tang Limited and is important as it contains the recommendation

of the Independent Directors (as defined herein) of C.K. Tang Limited and the advice of CIMB

Bank Berhad, Singapore Branch to the Independent Directors of C.K. Tang Limited. This

Circular requires your immediate attention. Please read it carefully.

If you are in any doubt in relation to this Circular, the Selective Capital Reduction (as defined

herein) or as to the action that you should take, you should consult your stockbroker, bank

manager, solicitor or other professional adviser immediately.

If you have sold or transferred all your issued and fully paid-up ordinary shares in C.K. Tang Limited,

you should immediately forward this Circular together with the Notice of Extraordinary General Meeting

and the attached proxy form to the purchaser or transferee or to the bank, stockbroker or agent through

whom you effected the sale or transfer, for onward transmission to the purchaser or transferee.

This Circular shall not be construed as, may not be used for the purposes of, and does not constitute

a notice or proposal or advertisement or an offer or invitation or solicitation in any jurisdiction or in any

circumstance in which such a notice or proposal or advertisement or an offer or invitation or solicitation

is unlawful or not authorised, or to any person to whom it is unlawful to make such a notice or proposal

or advertisement or an offer or invitation or solicitation.

C.K. TANG LIMITED(Incorporated in Singapore)

(Company Registration No.: 196100023H)

CIRCULAR TO SHAREHOLDERS

IN RELATION TO THE

PROPOSED SELECTIVE CAPITAL REDUCTION BY C.K. TANG LIMITED

PURSUANT TO THE COMPANIES ACT, CHAPTER 50 OF SINGAPORE

Independent Financial Adviser to the Independent Directors of C.K. Tang Limited

CIMB Bank Berhad (13491-P)

Singapore Branch(Incorporated in Malaysia)

IMPORTANT DATES AND TIMES

Last date and time for lodgement of Proxy Form : 25 October 2011 at 9.30 a.m.

Date and time of Extraordinary General Meeting : 27 October 2011 at 9.30 a.m.

Venue of Extraordinary General Meeting : RELC International Hotel

30 Orange Grove Road

Level 5 (Room 507)

Singapore 258352

CONTENTS PAGE

1. INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

2. SELECTIVE CAPITAL REDUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

3. CONFIRMATION OF FINANCIAL RESOURCES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9

4. RATIONALE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9

5. TU3 LLP’S INTENTIONS FOR THE COMPANY AND NO RIGHT OF COMPULSORY

ACQUISITION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10

6. SHAREHOLDERS’ APPROVAL. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

7. ADMINISTRATIVE PROCEDURES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

8. EXEMPTIONS BY THE SIC. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12

9. ADVICE OF THE IFA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12

10. INDEPENDENCE AND RECOMMENDATION OF THE DIRECTORS . . . . . . . . . . . . . . 14

11. EXTRAORDINARY GENERAL MEETING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15

12. ACTION TO BE TAKEN BY SHAREHOLDERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15

13. INFORMATION RELATING TO CPFIS INVESTORS . . . . . . . . . . . . . . . . . . . . . . . . . . 15

14. RESPONSIBILITY STATEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15

APPENDIX 1 — LETTER FROM TU3 LLP DATED 8 SEPTEMBER 2011 . . . . . . . . . . . . . . 17

APPENDIX 2 — REPORT OF THE FA IN CONNECTION WITH THE SELECTIVE CAPITAL

REDUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18

APPENDIX 3 — VALUATION SUMMARY ISSUED BY JONES LANG LASALLE PROPERTY

CONSULTANTS PTE LTD . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27

APPENDIX 4 — VALUATION REPORT ISSUED BY JONES LANG LASALLE PROPERTY

CONSULTANTS PTE LTD . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34

APPENDIX 5 — LETTER FROM THE IFA TO THE INDEPENDENT DIRECTORS OF C.K.

TANG LIMITED . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57

APPENDIX 6 — ADDITIONAL INFORMATION ON TU3 LLP . . . . . . . . . . . . . . . . . . . . . . . . 82

APPENDIX 7 — ADDITIONAL INFORMATION ON THE COMPANY . . . . . . . . . . . . . . . . . . 86

APPENDIX 8 — GENERAL INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93

APPENDIX 9 — AUDITED CONSOLIDATED FINANCIAL STATEMENTS FOR THE GROUP

FOR FY 2011 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 108

NOTICE OF EXTRAORDINARY GENERAL MEETING . . . . . . . . . . . . . . . . . . . . . . . . . . . . 153

TABLE OF CONTENTS

1

Except where the context otherwise requires, the following definitions apply throughout this Circular:

“Articles” : Articles of Association of the Company

“Books Closure Date” : The date (to be determined by the Company) on which the

Transfer Books and the Register of Members are closed for

the purposes of the Selective Capital Reduction

“Cash Distribution” : Shall have the meaning ascribed to it in paragraph 2.4 of

this Circular

“Circular” : This circular to Shareholders issued by the Company in

relation to the proposed Selective Capital Reduction

“Code” : The Singapore Code on Take-overs and Mergers

“Companies Act” : The Companies Act, Chapter 50 of Singapore

“Company” or “CKT” : C.K. Tang Limited

“Company Securities” : Shall have the meaning ascribed to it in paragraph 6.1 of

Appendix 6 to this Circular

“Concert Parties” : Parties acting or deemed to be acting in concert with TU3

LLP in connection with the Selective Capital Reduction

“Court” : High Court of the Republic of Singapore

“CPF” : The Central Provident Fund

“CPF Agent Banks” : Agent banks included under the CPFIS

“CPFIS” : CPF Investment Scheme

“CPFIS Investors” : Investors who purchased Shares using their CPF savings

under the CPFIS

“Delisting” : The voluntary delisting of the Company from the Official List

of the SGX-ST under Rules 1307 and 1309 of the Listing

Manual

“Delisting Date” : Shall have the meaning ascribed to it in paragraph 1.3 of

this Circular

“Delisting Proposal” : Shall have the meaning ascribed to it in paragraph 1.3 of

this Circular

“Department Store Property” : The portions of the property at 310/320 Orchard Road

Singapore 238864/238865, which are owned by the Group

and are the subject of the Valuation Summary and Valuation

Report, as set out in Appendices 3 and 4 to this Circular

“Directors” : The directors of the Company (including the Independent

Directors) as at the Latest Practicable Date

DEFINITIONS

2

“EGM” : Extraordinary general meeting of the Company as

adjourned to be held on 27 October 2011, notice of which is

set out on page 153 of this Circular, or any adjournment

thereof

“Exit Offer” : The exit offer made on 31 July 2009 by Oversea-Chinese

Banking Corporation Limited, for and on behalf of TU3 LLP,

to acquire all the Shares other than those held by TU3 LLP

for S$0.83 per Share, conditional upon the approval of the

resolution to approve the Delisting

“FA” or “PwCCF” : PricewaterhouseCoopers Corporate Finance Pte Ltd, the

financial adviser to the Company for the Selective Capital

Reduction

“Fair Market Value” : Shall have the meaning ascribed to it in paragraph 2.4(iii) of

this Circular

“FA Report” : Report from the FA in connection with the Selective Capital

Reduction

“First EGM” : Extraordinary general meeting of the Company that was

proposed to be held on 15 September 2011 and was

subsequently adjourned

“First Notice of EGM” : Notice of extraordinary general meeting of the Company

held on 15 September 2011, which was subsequently

adjourned

“FY” : Financial year ended or ending (as the case may be) on 31

March of a particular year as stated

“Group” : The Company and its subsidiaries

“IFA” or “CIMB Bank Berhad” : CIMB Bank Berhad, Singapore Branch, the independent

financial adviser to the Independent Directors for the

Selective Capital Reduction

“Independent Directors” : The Directors who consider themselves to be independent

for the purposes of making the recommendation to

Participating Shareholders in relation to the Selective

Capital Reduction, namely, Ernest Seow Teng Peng, Cecil

Vivian Richard Wong, Foo Tiang Sooi and Michel Grunberg

“Latest Practicable Date” : 3 October 2011, being the latest practicable date prior to the

printing of this Circular

“Letter” : Letter dated 18 August 2011 sent by the Company to the

Shareholders in relation to the proposed Selective Capital

Reduction

“Listing Manual” : The SGX-ST Listing Manual

DEFINITIONS

3

“LLP Act” : Limited Liability Partnerships Act, Chapter 163A of

Singapore

“Memorandum” : Memorandum of Association of the Company

“Non-Participating

Shareholders”

: Shall have the meaning ascribed to it in paragraph 1.3 of

this Circular

“Notice Date” : 18 August 2011, being the date of the Letter

“Notice of EGM” : Notice of EGM of the Company to be held on 27 October

2011, a copy of which was enclosed in a letter to

Shareholders dated 27 September 2011

“NTA” : Net tangible assets

“Participating Shareholders” : Shall have the meaning ascribed to it in paragraph 2.1 of

this Circular

“Registered Address” : The address of each Shareholder as set out in the Register

of Members

“Register of Members” : The register of holders of the Shares, as maintained by the

Share Registrar

“Selective Capital Reduction” : Selective capital reduction to be undertaken by the

Company pursuant to the Companies Act

“SGX-ST” : Singapore Exchange Securities Trading Limited

“Shareholders” : Registered holders of the Shares

“Share Registrar” : Boardroom Corporate & Advisory Services Pte. Ltd.

“Shares” : Issued and paid-up ordinary shares in the Company

“SIC” : Securities Industry Council of Singapore

“S$” and “cents” : Singapore dollars and cents respectively, being the lawful

currency of the Republic of Singapore

“Tang Holdings” : Tang Holdings Private Limited

“Transfer Books” : The transfer books of the Company, as maintained by the

Share Registrar

“TU2 LLP” : Tang UnityTwo LLP, a limited liability partnership registered

under the LLP Act

“TU3 LLP” : Tang UnityThree LLP, a limited liability partnership registered

under the LLP Act

“TU3 LLP Letter” : The unsolicited letter dated 8 September 2011 from TU3 LLP

to the Company

“TU3 LLP Partners” : TWS and UPL

DEFINITIONS

4

“TU3 Securities” : Shall have the meaning ascribed to it in paragraph 6.1 of

Appendix 7 to this Circular

“TWK” : Tang Wee Kit

“TWS” : Tang Wee Sung

“UPL” : Untien Pte. Ltd.

“Valuation Report” : The valuation report dated 3 October 2011 of the Department

Store Property from the Valuer setting out, inter alia, their

valuation of the Department Store Property which is

reproduced in Appendix 4 to this Circular

“Valuation Summary” : The valuation summary dated 30 June 2011 of the

Department Store Property from the Valuer setting out, inter

alia, their valuation of the Department Store Property which is

reproduced in Appendix 3 to this Circular

“Valuer” : Jones Lang LaSalle Property Consultants Pte Ltd, the valuer

appointed by the Company, in connection with the Selective

Capital Reduction, to value the Department Store Property

and to issue the Valuation Summary and the Valuation

Report

“%” or “per cent.” : Per centum or percentage

The headings in this Circular are inserted for convenience only and shall be ignored in construing this

Circular.

Any discrepancies in the tables in this Circular between the listed amounts and the totals thereof are

due to rounding.

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

the masculine gender shall, where applicable, include the feminine and neuter genders and vice versa.

References to persons shall, where applicable, include corporations.

Any reference in this Circular to any enactment is a reference to that enactment as for the time being

amended or re-enacted. Any word defined under the Companies Act, the Code or any statutory

modification thereof and not otherwise defined in this Circular shall, where applicable, have the same

meaning assigned to it under the Companies Act, the Code or any statutory modification thereof, as the

case may be, unless the context otherwise requires.

Any reference to a time of day and date in this Circular is made by reference to Singapore time and date

respectively unless otherwise stated.

DEFINITIONS

5

All statements other than statements of historical facts included in this Circular are or may be

forward-looking statements. Forward-looking statements include but are not limited to those using

words such as “expect”, “anticipate”, “believe”, “intend”, “project”, “plan”, “strategy”, “forecast” and

similar expressions or future or conditional verbs such as “if”, “will”, “would”, “should”, “could”, “may”

and “might”. These statements reflect the Company’s and the Non-Participating Shareholders’ current

expectations, beliefs, hopes, intentions or strategies regarding the future and assumptions in light of

currently available information. Such forward-looking statements are not guarantees of future

performance or events and involve known and unknown risks and uncertainties. Accordingly, actual

results may differ materially from those described in such forward-looking statements. Shareholders

and investors should not place undue reliance on such forward-looking statements, and neither the

Company, the Non-Participating Shareholders, the Valuer, the FA nor the IFA undertakes any obligation

to update publicly or revise any forward-looking statements, subject to compliance with all applicable

laws and regulations and/or any other regulatory or supervisory body or agency.

FORWARD-LOOKING STATEMENTS

6



Directors: Registered Office:

Ernest Seow Teng Peng

Cecil Vivian Richard Wong

Foo Tiang Sooi

Michel Grunberg

Soh Yew Hock

310 Orchard Road

Singapore 238864

10 October 2011

To: The Shareholders of C.K. Tang Limited

Dear Sir/Madam

PROPOSED SELECTIVE CAPITAL REDUCTION BY C.K. TANG LIMITED PURSUANT TO THE

COMPANIES ACT

1. INTRODUCTION

1.1 First Notice of EGM and Adjournment. On 18 August 2011, the Company issued a First

Notice of EGM to the Shareholders to seek the approval of Shareholders for the proposed

Selective Capital Reduction to be undertaken by the Company. On 13 September 2011, two

days before the First EGM, the Company was directed by the SIC to ask for an adjournment of

the First EGM for the purpose of appointing an independent financial adviser to opine on the

proposed Selective Capital Reduction. In line with this direction, the Directors proposed and the

Shareholders approved that the First EGM be adjourned to 9.30 a.m. on 27 October 2011.

1.2 Circular. The purpose of this Circular is to provide Shareholders with relevant information as

at the Latest Practicable Date pertaining to the Company and to set out the advice of the IFA to

the Independent Directors and the recommendation of the Independent Directors with regard to

the proposed Selective Capital Reduction to be tabled at the EGM. This Circular contains all

information in relation to the proposed Selective Capital Reduction as set out in the Letter.

1.3 Background. On 8 May 2009, the Company and TU3 LLP jointly announced that the Company

had received a delisting proposal (“Delisting Proposal”) from TU3 LLP to seek the voluntary

delisting of the Company from the Official List of the SGX-ST pursuant to Rules 1307 and 1309

of the Listing Manual (“Delisting”). Under the Delisting Proposal, Oversea-Chinese Banking

Corporation Limited, for and on behalf of TU3 LLP, made an exit offer (“Exit Offer”) to acquire

all the Shares other than those held by TU3 LLP for S$0.83 per Share, conditional upon the

approval of the resolution to approve the Delisting. The Exit Offer was made on 24 June 2009,

and on 31 July 2009, the Shareholders voted in favour of the resolution to approve the Delisting

and accordingly, the Exit Offer became unconditional.

The Exit Offer closed on 14 August 2009 and the Company was delisted from the Official List of

the SGX-ST on 24 August 2009 (“Delisting Date”). As at the Latest Practicable Date, TU3 LLP,

TU2 LLP, Kerith Holdings LLP and TWK (the “Non-Participating Shareholders”) own or control

LETTER TO SHAREHOLDERS

7

232,601,053 Shares, representing approximately 98.2 per cent. of the total number of Shares1

and the remaining Shares representing 1.8 per cent. of the total number of Shares are held by

other Shareholders.

2. SELECTIVE CAPITAL REDUCTION

2.1 Realise Value of Shares. The Company proposes to implement the Selective Capital

Reduction and cancel all the Shares held by the Shareholders, except those held by the

Non-Participating Shareholders, to provide the remaining Shareholders (the “Participating

Shareholders”) with an avenue to realise the value of their Shares following the Delisting.

2.2 Reduce Share Capital. The Selective Capital Reduction will involve reducing the share capital

of the Company from S$47,848,113.86 comprising 236,984,226 Shares to S$42,149,988.96

comprising 232,601,053 Shares, representing a reduction of the issued share capital of the

Company by approximately 1.8 per cent.

2.3 Process. The Selective Capital Reduction will be effected by:

(i) cancelling the amount of S$5,698,124.90 constituting part of the total paid-up share capital

of the Company held by the Participating Shareholders; and

(ii) cancelling 4,383,173 of the said Shares constituting part of the total issued share capital

of the Company held by the Participating Shareholders.

2.4 Cash Distribution. The aggregate sum of S$5,698,124.90 arising from the Selective Capital

Reduction (the “Cash Distribution”) will be returned to the Participating Shareholders, on the

basis of S$1.30 for each Share held by each Participating Shareholder that is cancelled as a

result of the Selective Capital Reduction.

The price of S$1.30 for each Share so cancelled represents:

(i) a premium of 44.4 per cent. over S$0.90 per Share which was the highest price per Share

transacted on the SGX-ST in the 10-year period prior to the Delisting Date;

(ii) a premium of 56.6 per cent. over S$0.83 per Share which was the last transacted price on

the SGX-ST on 6 August 2009;

(iii) a premium of 15.0 per cent. over the fair market value per Share of S$1.13 as set out in

the FA Report (“Fair Market Value”); and

(iv) a premium of 27.5 per cent. over the book value per Share of S$1.02 as at 31 March 2011.

Participating Shareholders will be entitled to any dividends declared, paid or made by the

Company the record date for which is on or before the Books Closure Date.

1 Unless otherwise stated, references in this Circular to percentages of total number of Shares are based on a total of

236,984,226 Shares, which is the total number of issued and paid-up Shares.


8

2.5 TU3 LLP Proposal. On 8 September 2011, TU3 LLP wrote to and informed the Company that

it will pay another S$0.70 for each Share held by each Participating Shareholder that is

cancelled as a result of the Selective Capital Reduction, bringing the aggregate payment of each

such cancelled Share to S$2.00. The TU3 LLP Letter was sent to all Shareholders and provides

that such payment is conditional upon the Selective Capital Reduction becoming effective. The

TU3 LLP Letter is set out in Appendix 1 to this Circular.

The aggregate price of S$2.00 for each Share so cancelled represents:

(i) a premium of 122.2 per cent. over S$0.90 per Share which was the highest transacted

price on the SGX-ST in the 10-year period before the Delisting Date;

(ii) a premium of 141.0 per cent. over $0.83 per Share which was the last transacted price on

the SGX-ST on 6 August 2009;

(iii) a premium of 77.0 per cent. over the Fair Market Value; and

(iv) a premium of 96.1 per cent. over the book value per Share of S$1.02 as at 31 March 2011.

3. CONFIRMATION OF FINANCIAL RESOURCES

Oversea-Chinese Banking Corporation Limited confirms that sufficient financial resources are

available to (i) TU3 LLP to satisfy payment of the sum of S$3,068,221.10 representing the total

sum that TU3 LLP will pay to all Participating Shareholders if the Selective Capital Reduction is

effective in accordance with the Companies Act (the “TU3 LLP Payment”) and (ii) the Company

to pay the Cash Distribution if the Selective Capital Reduction becomes effective.

The Company confirms that it has received the TU3 LLP Payment, and that it is authorised to

pay, on behalf of TU3 LLP, to all Participating Shareholders S$0.70 for each Share cancelled

pursuant to the Selective Capital Reduction.

The Directors are of the opinion that the financial resources available to the Company and the

Company’s share capital base following the Selective Capital Reduction will be sufficient for the

foreseeable near-term operating needs of the Company.

4. RATIONALE

The Selective Capital Reduction is an internal corporate exercise that is proposed by the

Company for the Participating Shareholders.

The Selective Capital Reduction would enable the Company to return the aggregate sum of

S$5,698,124.90 to the Participating Shareholders in respect of the cancellation of the Shares

held by them.

Following the Delisting, it has been difficult for the Participating Shareholders to realise their

investment in the Shares given the lack of a public market for the Shares. With the Selective

Capital Reduction, the Participating Shareholders will have an opportunity to realise the value of

their Shares.

If the Participating Shareholders do not approve the Selective Capital Reduction, there is no

guarantee another opportunity will arise in the future for them to realise the value of their Shares.


9

PwCCF has been appointed the financial adviser for the Selective Capital Reduction. The FA

Report is set out in Appendix 2 to this Circular. The FA Report, amongst other things, sets out

the analysis for the valuation of the Group. In the analysis set out in the FA Report, the FA has

relied on information contained in the Valuation Summary issued by Jones Lang LaSalle

Property Consultants Pte Ltd as set out in Appendix 3 to this Circular. Based on the analysis set

out in the FA Report, including the qualifications made therein, the FA is of the opinion that the

Fair Market Value per Share is S$1.13.

Although the Fair Market Value per Share is S$1.13, there is no guarantee that the Fair Market

Value will not change as it is dependent on the Company’s future performance and future

economic conditions in Singapore, as well as the impact of the uncertainties surrounding the

current global economic climate. The Non-Participating Shareholders have confirmed that they

have no plans for the redevelopment of the Department Store Property in the foreseeable future.

The Cash Distribution of S$1.30 per Share represents:

(i) an excess of S$0.17 per Share over the Fair Market Value; and

(ii) a premium of 15.0 per cent. over the Fair Market Value.

The Cash Distribution of S$1.30 per Share includes a premium of S$0.17 per Share over and

above the Fair Market Value which is intended to recognise the cost savings and elimination of

the administrative burden borne by maintaining the status of a public company and having

numerous minority shareholders. It is also to provide a gesture of goodwill to the Participating

Shareholders.

5. TU3 LLP’S INTENTIONS FOR THE COMPANY AND NO RIGHT OF COMPULSORY

ACQUISITION

The Company’s retail business was founded by the late Mr. Tang Choon Keng, the father of TWS

and TWK, and has been part of the family’s business for more than half a century. The Company

has a rich history and tradition as Singapore’s premier department store with its flagship store

in the heart of Singapore’s most famous shopping district.

In view of the above, TWS and TWK currently have no intention of (i) discontinuing the traditional

retail business started by their father, (ii) disposing of the Department Store Property, (iii)

redeveloping the Department Store Property, or (iv) entering into any arrangements for a real

estate investment trust in respect of the Department Store Property.

TU3 LLP currently has no intention to (i) propose any major changes to the businesses of the

Company, (ii) redeploy the fixed assets of the Company, or (iii) discontinue the employment of

any of the employees of the Group, other than in the ordinary course of business.

TU3 LLP is not entitled to, and will not avail itself of, the rights of compulsory acquisition under

Section 215 of the Companies Act. It should also be noted that Participating Shareholders

will also have no right and are not entitled to require TU3 LLP to acquire their Shares

under Section 215(3) of the Companies Act.


10

6. SHAREHOLDERS’ APPROVAL

Shareholders’ approval is being sought for the proposed Selective Capital Reduction in

accordance with the provisions of the Companies Act.

Pursuant to Section 78G of the Companies Act, the Selective Capital Reduction requires

(i) a special resolution2 to be passed by the Shareholders approving the Selective Capital

Reduction and (ii) the approval and confirmation by the Court of the Selective Capital

Reduction.

A copy of the Order of Court approving the Selective Capital Reduction will subsequently

be lodged with the Registrar of Companies of Singapore (“Registrar”).

The Non-Participating Shareholders and their concert parties will not be voting on the

special resolution relating to the Selective Capital Reduction at the EGM.

7. ADMINISTRATIVE PROCEDURES

The following paragraphs set out the administrative procedures for the Selective Capital

Reduction.

7.1 Books Closure Date. Participating Shareholders registered in the Register of Members as at

the Books Closure Date will be entitled to receive S$1.30 for each Share registered in their

respective names as at the Books Closure Date.

7.2 Settlement of Cash Distribution. Subject to the conditions in paragraph 6 above being

satisfied, on the lodgement of a copy of the Order of Court confirming the Selective Capital

Reduction together with the other documents prescribed under the Companies Act with the

Registrar, the special resolution for the Selective Capital Reduction shall take effect, and

payment of the Cash Distribution pursuant to the Selective Capital Reduction will be made as set

out below.

Participating Shareholders whose Shares are registered in the Register of Members as at the

Books Closure Date will have the cheques for payment of their entitlements to the Cash

Distribution despatched to them by ordinary post at their own risk at the Registered Addresses.

A Participating Shareholder who wishes to record any change in his Registered Address

should notify the Share Registrar, Boardroom Corporate & Advisory Services Pte. Ltd. at

50 Raffles Place, #32-01 Singapore Land Tower, Singapore 048623 of such change before

the Books Closure Date.

7.3 Settlement of TU3 LLP Payment. The Company has received the TU3 LLP Payment and has

been authorised by TU3 LLP to utilise that amount to pay, on TU3 LLP’s behalf, to all

Participating Shareholders S$0.70 for each Share cancelled pursuant to the Selective Capital

Reduction. Participating Shareholders whose Shares are registered in the Register of Members

as at the Books Closure Date will have the cheques for payment of their entitlements to the TU3

LLP Payment despatched to them by ordinary post at their own risk at the Registered Addresses.

A Participating Shareholder who wishes to record any change in his Registered Address

should notify the Share Registrar, Boardroom Corporate & Advisory Services Pte. Ltd. at

50 Raffles Place, #32-01 Singapore Land Tower, Singapore 048623 of such change before

the Books Closure Date.

2 A special resolution requires the approval by a majority of not less than 75% of Shareholders present and voting at the EGM.


11

8. EXEMPTIONS BY THE SIC

8.1 Exemptions by the SIC. In its letter dated 4 October 2011, the SIC exempted the proposed

Selective Capital Reduction from Rules 14, 15, 16, 17, 20.1, 21, 22, 28, 29 and 33.2 and Note

1(b) on Rule 19 of the Code, subject to the following conditions:

(i) the Non-Participating Shareholders and their concert parties abstain from voting on the

proposed Selective Capital Reduction;

(ii) the Directors who are acting in concert with the Non-Participating Shareholders abstain

from making a recommendation on the proposed Selective Capital Reduction to the

Shareholders; and

(iii) the Company appoints an independent financial adviser to advise the Shareholders on the

proposed Selective Capital Reduction.

8.2 Independence of Director. In its letter dated 4 October 2011, the SIC ruled that Mr. Soh Yew

Hock is exempted from the requirement to make a recommendation to Participating

Shareholders on the Selective Capital Reduction as he faces a conflict of interest in doing so

being a party acting in concert with the Non-Participating Shareholders. Mr. Soh is a

non-executive director of Tang Holdings which is majority owned (indirectly) and controlled by

TWK. TWK is a Non-Participating Shareholder for the purposes of the Selective Capital

Reduction. Tang Holdings is therefore a party acting in concert with the Non-Participating

Shareholders. Accordingly, Mr. Soh as a director of Tang Holdings is presumed to be a party

acting in concert with the Non-Participating Shareholders and would face a conflict of interest

that would render him inappropriate to join the remaining Directors in making a recommendation

to Participating Shareholders on the Selective Capital Reduction.

8.3 Scope of Responsibility. In view of the relationships between Mr. Soh Yew Hock and Tang

Holdings and between Tang Holdings and TWK as set out in the paragraph above, and as Mr.

Soh faces a conflict of interest with respect to the requirement to make a recommendation to

Participating Shareholders on the Selective Capital Reduction, Mr. Soh has been exempted by

the SIC from the requirement under the Code to make a recommendation to the Participating

Shareholders on the Selective Capital Reduction. However, Mr. Soh remains responsible for the

accuracy of the facts stated or opinions expressed in documents and advertisements issued by,

or on behalf of, the Company in connection with the Selective Capital Reduction.

9. ADVICE OF THE IFA

9.1 IFA. CIMB Bank Berhad, Singapore Branch has been appointed as the independent financial

adviser to advise the Independent Directors in respect of the Selective Capital Reduction.

Shareholders should consider carefully the advice of the IFA to the Independent Directors and

the recommendation of the Independent Directors before deciding whether to vote in favour of

the Selective Capital Reduction at the EGM. The IFA’s advice is set out in its letter dated

7 October 2011 which is reproduced in Appendix 5 to this Circular (the “IFA Letter”).

9.2 Key Factors Taken into Consideration by the IFA. In arriving at its advice, the IFA has relied

on the following key considerations as set out in section 6 of the IFA Letter and reproduced in

italics below. The considerations set out below should be considered and read in conjunction

with, and in the context of, the full text of the IFA Letter. Unless otherwise defined or the context

otherwise requires, all capitalised terms below shall have the same meanings as defined in the

IFA Letter.


12

“In arriving at our advice to the Independent Directors on the Selective Capital Reduction,

we have considered, inter alia, the following factors which should be considered and read

in the context of the full text of this Letter:

(i) The P/E, EV/EBITDA and P/NTA multiples as implied by the SCR Consideration is

significantly higher than the mean and median of these multiples of the Comparable

Companies (on a historical basis);

(ii) The SCR Consideration represents a premium of 96.2% over the NTA of the Group as at

FY2011, and represents a premium of 96.2% and 104.7% respectively over the Revalued

NTA of the Group on an existing use basis and on a redevelopment basis, as at FY2011;

(iii) The implied EV/EBITDA and P/E multiples of the Company based on the SCR

Consideration is significantly higher than the range of multiples of the target companies

based on the Precedent Departmental Store Transactions;

(iv) The implied EV/Sales multiple of the Company based on the SCR Consideration is higher

than the EV/Sales of the target companies based on the Precedent Departmental Store

Transactions;

(v) The implied P/NTA multiple of the Company based on the SCR Consideration is higher

than the mean and median P/NTA of the target companies based on the Precedent

Departmental Store Transactions;

(vi) The P/NTA and P/RNTA multiples as implied by the SCR Consideration is higher than the

P/NTA and P/RNTA multiples of the target companies based on the Precedent Real Estate

Transactions;

(vii) The SCR Consideration represents a significant premium over all historical VWAP

benchmark of the Shares in the preceding 10 years prior to the Delisting Date, and up until

the announcement of the Selective Capital Reduction;

(viii) The SCR Consideration represents a significant premium of 140.96% over the Delisting

Offer price;

(ix) The SCR Consideration represents a premium of 122.22% over the highest closing price

of the Shares of S$0.900 over the last 10 years prior to the Delisting Offer;

(x) The EV/Sales, P/E, P/NTA and P/RNTA multiples as implied by the SCR Consideration is

more favourable when compared with these multiples as implied by the Delisting Offer;

(xi) The premia implied by the SCR Consideration represents a significant premium to the

average premium implied by the Precedent Delistings;

(xii) No dividend has been paid by the Company in the last 5 financial years;

(xiii) The Offeror already has statutory control of the Company as it owns, or controls, directly

and indirectly, 98.2% of the Shares;

(xiv) The Offeror does not intend to dispose of the Department Store Property, or redevelop the

Department Store Property;


13

(xv) The Selective Capital Reduction is currently the only offer available to Participating

Shareholders; and

(xvi) The Shares are illiquid as the Shares has been delisted from the SGX-ST subsequent to

the Delisting Offer in August 2009, and the Offeror has stated that the Selective Capital

Reduction will be the final offer made by the Offeror in respect of the Shares, and that no

further offers will be made by the Offeror;”

9.3 Advice of the IFA. Based on the IFA’s assessment of the financial terms of the Selective

Capital Reduction from a financial point of view, the IFA has advised the Independent Directors

to make the following recommendations to the Participating Shareholders in relation to the

Selective Capital Reduction, as set out in section 6 of the IFA Letter and reproduced in italics

below. The recommendations set out below should be considered and read in conjunction with,

and in the context of, the full text of the IFA Letter. Unless otherwise defined or the context

otherwise requires, all capitalised terms below shall have the same meanings as defined in the

IFA Letter.

“Based upon, and having considered, inter alia, the factors described above and the

information that has been made available to us at the Latest Practicable Date, we are of

the opinion that as of the Latest Practicable date, the Selective Capital Reduction is on

balance, fair and reasonable from a financial point of view. Accordingly, we would advise

the Independent Directors to recommend that, in the absence of a superior offer,

Participating Shareholders should vote in favour of the Selective Capital Reduction.

We recommend that the Independent Directors advise the Participating Shareholders of

our opinion in this Circular. We would also advise the Independent Directors to caution

the Participating Shareholders that they should not rely on our advice to the Independent

Directors as the sole basis for deciding whether or not to vote in favour of the Selective

Capital Reduction.

In rendering the above advice, we have not had regard to the specific investment objectives,

financial situation, tax position or particular needs and constraints of any individual Shareholder.

As each Shareholder would have different investment objectives and profiles, we would advise

that any individual Shareholder who may require specific advice in relation to his investment

objectives or portfolio should consult his stockbroker, bank manager, solicitor, accountant, tax

adviser or other professional adviser immediately. Shareholders should note that the opinion and

advice of CIMB should not be relied upon by any Shareholder as the sole basis for deciding

whether or not to vote in favour of the Selective Capital Reduction.”

10. INDEPENDENCE AND RECOMMENDATION OF THE DIRECTORS

10.1 Independence. All Directors, save for Mr. Soh Yew Hock, consider themselves to be

independent for the purpose of making recommendations to the Participating Shareholders in

respect of the Selective Capital Reduction.

10.2 Recommendation of Independent Directors. The Independent Directors, having considered

carefully the terms of the Selective Capital Reduction and the advice given by the IFA, concur

with the advice given by the IFA in respect of the Selective Capital Reduction as extracted in

paragraph 9 above.


14

The Independent Directors are of the opinion that the Selective Capital Reduction is in the best

interests of the Company and accordingly recommend that the Participating Shareholders vote

in favour of the special resolution relating to the Selective Capital Reduction at the EGM.

SHAREHOLDERS ARE ADVISED TO READ THE IFA LETTER SET OUT IN APPENDIX 5 TO

THIS CIRCULAR CAREFULLY.

10.3 No Regard to Specific Objectives. In making their recommendation, the Independent

Directors have not had regard to the specific objectives, financial situation, tax status, risk

profiles or unique needs and constraints of any individual Shareholder. Accordingly, the

Independent Directors recommend that any individual Shareholder who may require advice in

the context of his specific investment portfolio should consult his stockbroker, bank manager,

solicitor, accountant or other professional adviser immediately.

11. EXTRAORDINARY GENERAL MEETING

The EGM will be held at RELC International Hotel, 30 Orange Grove Road, Level 5 (Room 507),

Singapore 258352 on 27 October 2011 at 9.30 a.m., for the purpose of considering and, if

thought fit, passing the special resolution set out in the Notice of EGM.

12. ACTION TO BE TAKEN BY SHAREHOLDERS

You will find enclosed with this Circular, the Notice of EGM and Proxy Form in relation to the

EGM. If you are unable to attend the EGM and wish to appoint a proxy to attend and vote on your

behalf, you should complete, sign and return the Proxy Form in accordance with the instructions

printed thereon as soon as possible and, in any event, so as to reach the registered office of the

Company at 310 Orchard Road, Singapore 238864 no later than forty-eight (48) hours before the

time fixed for the EGM. Your completion and return of the Proxy Form will not prevent you from

attending and voting in person at the EGM if you so wish, in place of your proxy.

If you have previously returned a duly executed Proxy Form to the Company prior to the

adjourned EGM held on 15 September 2011, you do not need to re-submit the Proxy Form

enclosed in this Circular. However, if you wish to re-submit your Proxy Form, you should

write to the Company expressly renouncing and withdrawing your previously submitted

Proxy Form, and submitting a new Proxy Form in its place.

A copy of this Circular is available on the website of the Company at http://www.tangs.com.

Please refer to the Company’s website for further announcements in relation to the Selective

Capital Reduction.

13. INFORMATION RELATING TO CPFIS INVESTORS

CPFIS Investors who wish to attend and vote at the EGM are advised to consult their respective

CPF Agent Banks should they require further information and if they are in any doubt as to the

action they should take, CPFIS Investors should seek independent professional advice.

14. RESPONSIBILITY STATEMENT

The Directors (including any who may have delegated detailed supervision of this Circular) have

taken all reasonable care to ensure that the facts stated and all opinions expressed in this

Circular (other than the FA Report at Appendix 2 to this Circular for which the FA has taken


15

responsibility, the Valuation Summary and the Valuation Report at Appendices 3 and 4 to this

Circular for which the Valuer has taken responsibility, the IFA Letter at Appendix 5 to this Circular

for which the IFA has taken responsibility, and paragraph 5 and Appendices 1 and 6 to this

Circular for which TU3 LLP has taken responsibility) are fair and accurate and that no material

facts have been omitted from this Circular, and they jointly and severally accept responsibility

accordingly. Where any information has been extracted or reproduced from published or publicly

available sources (other than the FA Report at Appendix 2 to this Circular for which the FA has

taken responsibility, the Valuation Summary and the Valuation Report at Appendices 3 and 4 to

this Circular for which the Valuer has taken responsibility, the IFA Letter at Appendix 5 to this

Circular for which the IFA has taken responsibility, and paragraph 5 and Appendices 1 and 6 to

this Circular for which TU3 LLP has taken responsibility), the sole responsibility of the Directors

has been to ensure through reasonable enquiries that such information is accurately extracted

from such sources or, as the case may be, reflected or reproduced in this Circular.

In respect of the IFA Letter, the sole responsibility of the Directors has been to ensure that the

facts stated with respect to the Group are fair and accurate.

Yours faithfully

For and on behalf of the Board of Directors of

C.K. TANG LIMITED

Ernest Seow Teng Peng

Director


16

17

APPENDIX 1LETTER FROM TU3 LLP DATED 8 SEPTEMBER 2011

18 August 2011

C.K. Tang Limited

310 Orchard Road

Singapore 238864

Dear Sirs

Report in connection with the Proposed Selective Capital Reduction to be undertaken by C.K.

Tang Limited Group (“CK Tang”)

1. INTRODUCTION

CK Tang was delisted from the Singapore Exchange on 14 August 2009 through TU3 LLP, Tang

UnityTwo LLP, Kerith Holdings LLP and Tang Wee Kit (the “Non-Participating Shareholders”)

owning approximately 97.8% of the total number of shares. Subsequently, some of the remaining

minority shareholders had sold their shares to the Non-Participating Shareholders, resulting in

the Non-Participating Shareholders holding approximately 98.2% in CK Tang. Other than the

Non-Participating Shareholders, there are currently approximately another 472 registered

shareholders (the “Participating Shareholders”).

To provide an opportunity for the Participating Shareholders to realise their investments in CK

Tang, the Company is proposing to undertake a selective capital reduction exercise with the view

to cancel all the shares held by the Participating Shareholders (“Selective Capital Reduction”),

should the Participating Shareholders approve the resolution to be tabled at the EGM.

It is in this context that PricewaterhouseCoopers Corporate Finance Pte Ltd (“PwCCF”) has

been appointed to assist CK Tang to determine the underlying value of CK Tang.

2. TERMS OF REFERENCE

This valuation report (“Report”) has been prepared solely for the Board of CK Tang in connection

with the proposed Selective Capital Reduction and is not intended for any legal or court

proceedings.

PwCCF will estimate the Fair Market Value of CK Tang’s retail businesses (“Retail Business”)

so as to determine the sum-of-the-parts valuation of CK Tang as a group, inclusive of the market

value of the department store property (“Department Store Property”).

For the Department Store Property, we have been furnished with a valuation summary of the

Department Store Property (“Valuation Summary”) held by CK Tang. With respect to the

Valuation Summary, we are not experts and do not hold ourselves to be experts in the evaluation

or appraisal of the Department Store Property and have relied solely upon the Valuation

APPENDIX 2REPORT OF THE FA IN CONNECTION WITH THE SELECTIVE

CAPITAL REDUCTION

18

Summary prepared by the Jones Lang LaSalle Property Consultants Pte Ltd (the “Independent

Property Valuer”). The Valuation Summary prepared by the Independent Property Valuer is set

out in Appendix B of the Letter.

We have held discussions with the Directors and the management of the Company and have

examined publicly available information collated by us as well as information, written and verbal,

provided to us by the Directors and the management of the Company and its professional

advisers. We have not independently verified such information, whether written or verbal, and

accordingly we cannot and do not represent or warrant, expressly or impliedly, and do not accept

any responsibility for the accuracy, completeness or adequacy of such information. We have

nevertheless made enquiries and exercised our judgment as we deemed necessary or

appropriate in assessing such information and are not aware of any reason to doubt the reliability

of the information.

The financial information and key assumptions to our valuation analysis contained in this Report

remains the responsibility of management. We have relied on the information provided by the

management but we have not and are not required to carry out an audit or review of the financial

statement or forecast, or any component of the financial statements or forecast of CK Tang. We

have also not made an independent evaluation or appraisal of the assets and liabilities of CK

Tang.

3. SUMMARY OF THE INDICATIVE VALUATION OF CK TANG BASED ON SUM-OF-THE-

PARTS ANALYSIS

To determine the value of CK Tang, PwCCF has estimated the Fair Market Value of CK Tang’s

retail businesses and relied on the market value of the Department Store Property as appraised

by the Independent Property Valuer.

We set out below the indicative valuation of CK Tang as follows:

S$ million Reference

Enterprise Value (“EV”) of Retail Business 8.2 Refer to Section 4

Market Value of Department Store Property 360.0 Refer to Section 5

Enterprise Value 368.2

Less: Net Debt 100.9

Less: Minority Interest (0.003)

Equity Value of CK Tang 267.3

No. of Shares Outstanding (million) 236.99

Fair Market Value Per Share (S$) 1.13

As computed above, the Fair Market Value Per Share based on the sum-of-the-parts valuation

of CK Tang is S$1.13.


CAPITAL REDUCTION

19

4. VALUATION APPROACH OF THE RETAIL BUSINESS

The valuation approach for the Retail Business is its estimated Fair Market Value. Fair Market

Value is defined as the amount for which an asset could be exchanged, or a liability settled,

between knowledgeable, willing parties in an arm’s length transaction.

In arriving at our estimation of the Retail Business’ Fair Market Value, we have relied on the

accuracy and completeness of information furnished to us by the management and other

professional advisers. As such, we have not carried out any work to verify the accuracy,

correctness or completeness of such information. Accordingly, we will not be responsible for the

accuracy and completeness of such information.

By its nature, valuation work cannot be regarded as an exact science, and the conclusions

arrived at in many cases will of necessity be subjective and dependent on the exercise of

individual judgement. There is, therefore, no indisputable single value and we normally express

our valuation expectation as falling within expected ranges.

4.1 Explanation of the Market Approach

Under the Market Approach, the value of the business is determined based on an appropriate

capitalisation multiple derived from the current trading multiples of comparable companies and

applied to the earnings of a company.

The earnings are computed after making adjustments for any non-recurring or extraordinary

revenues or costs and only considering those revenues that are likely to be earned in the normal

course of business.

The market approach entails the following main steps:

— Determination of an appropriate earnings estimate

— Estimation of appropriate valuation multiple based on the comparable companies

— Application of multiple to earnings to determine value, adjusting for any discounts/premia

on the valuation.


CAPITAL REDUCTION

20

The computed enterprise value range for the Retail Business is as set out below:

S$ million Reference

Normalised FY11 EBITDA S$2.343 Refer to Section 4.2

EV/EBITDA Range 3.5x Refer to Section 4.3

Enterprise Value S$8.2

4.2 Estimation of FY11 Normalised Earnings

In estimating the normalised earnings of CK Tang, we have used the audited results for the

financial year ended 31 March 2011 (i.e. FY11). In computing the maintainable earnings, we

have adjusted for any non-recurring or exceptional items. In addition, we have noted

management’s views of the present and future economic and financial environment, expected

business strategies and the general market conditions that CK Tang will continue to operate

under. These assumptions are significant and could substantially impact our valuation analysis.

We have used the earnings before interest, tax, depreciation and amortisation expenses

(“EBITDA”) as the relevant earnings estimate and set out below are the adjustments made to

arrive at the FY11 Normalised EBITDA:

S$ million

FY11 EBITDA 16.906

Adjustment for rental expenses -14.563

Normalised FY11 EBITDA 2.343

4.3 Estimation of Valuation Multiples

The Market Approach requires PwCCF to generate a peer set of companies (“Comparable

Companies”) which have been selected based on similarity of business with CK Tang. PwCCF

has determined the earnings multiple based on the Comparable Companies.

We, however, recognise that the Comparable Companies listed here are not exhaustive and to

the best of our knowledge and belief and after discussion with the management of the Company,

there is no company listed on the SGX-ST which may be considered directly comparable to CK

Tang in terms of composition of business activities, scale of operations, geographical spread of

activities, track record, financial performance, future prospects, asset base, risk profile and other

relevant criteria. Accordingly, any comparisons made with respect to the Comparable

Companies can only serve as an illustrative guide.


CAPITAL REDUCTION

21

4.3.1 Analysis of the Comparable Companies

A brief description of the Comparable Companies is set out as below:

Comparable

Companies Description

Enterprise

Value(2)

Market

Capitalisation(1) Revenue(3)

(S$ million) (S$ million) (S$ million)

Isetan (Singapore)

Limited (“Isetan”)

The group’s principal

activities are operating

department

stores and supermarkets and

trading general merchandise.

The group operates in

Singapore.

64 146 334

Metro Holdings

Limited (“Metro”)

The group’s principal

activities are retailing and

department store operations,

property management and

holding companies. Other

activities include property

investment and development,

building contractors, leisure

operators and hoteliers. The

group operates a chain of

four Metro department stores

in Singapore and another

chain of four stores is held in

Jakarta and Bandung in

Indonesia. Operations of the

group are carried out in

ASEAN countries, Hong

Kong, China and Australia.

394 597 151

(Source: CapIQ as at Latest Practicable Date)

Notes:

(1) The market capitalisation of the Comparable Companies is as at the Latest Practicable Date (Source: Cap IQ).

(2) EV of the Comparable Companies is based on the market capitalisation as at the Latest Practicable Date and the

consolidated net debt and minority interest set out in their latest available announced results as at the Latest

Practicable Date (Source: Cap IQ, SGX-ST announcement).

(3) The revenue of the Comparable Companies is based on the latest available full-year results as at the Latest

Practicable Date (Source: Cap IQ, SGX-ST announcement, annual report).


CAPITAL REDUCTION

22

In our evaluation, we have considered the following widely used valuation parameters:

Valuation Parameters Description

EV/EBITDA “EV” or “Enterprise Value” is the sum of a company’s market

capitalisation, minority interests, short-term and long-term debt

less cash and cash equivalents. “EBITDA” stands for historical

earnings before interest, tax, depreciation and amortisation

expenses. The EV/EBITDA ratio compares the market value of a

company’s business to its pre-tax operating cashflow

performance. The EV/EBITDA multiple is an earnings-based

valuation methodology. However, unlike the P/E ratio, it does not

take into account the capital structure of a company as well as its

interest, taxation, depreciation and amortisation charges.

P/E “P/E” or “price-to-earnings” ratio is the ratio of the market

capitalisation relative to its profit after tax attributable to the

shareholders (the “PATMI”). The P/E ratio is affected by, inter

alia, the capital structure of a company, its tax position as well as

its accounting policies relating to depreciation and intangible

assets.

P/B “P/B” or “price-to-book value” ratio is the ratio of the market

capitalisation of a company relative to its book value. The P/B

ratio is affected by differences in their respective accounting

policies including their depreciation and asset valuation policies.

The book value of a company provide an estimate of the value of

a company assuming a hypothetical sale of all its assets and

repayment of its liabilities and obligations, with the balance being

available for distribution to its shareholders. It is an asset-based

valuation methodology and this approach is meaningful to the

extent that it measures the value of each share that is backed by

the assets of a company.


CAPITAL REDUCTION

23

For illustrative purposes only, the table below sets out the valuation ratios for the Comparable

Companies:

Comparable Companies

Financial

year ended EV/Revenue(1) EV/EBITDA(1) P/E(1) P/B(1)

(times) (times) (times) (times)

Isetan 31 Dec 2010 0.2 3.5 12.7 0.8

Metro(2) 31 Mar 2010 2.6* 7.5* 6.4* 0.6*

(Source: CapIQ as at Latest Practicable Date)

Notes:

* Outliers specifically excluded.

(1) The revenue, EBITDA, earnings after tax and book value of the Comparable Companies are based on the latest

available full-year results as at the Latest Practicable Date (Source: Cap IQ, SGX-ST announcement, annual

report).

(2) Based on the segmental information for the financial year 31 March 2010, the earnings of Metro is increasingly

derived from the property division which is involved in leasing of shopping and office spaces, operating of hotels and

investing in property related investment.

Hence, it is noted that Isetan is the only Comparable Company and that the only meaningful

valuation ratio is EV/EBITDA given that the normalized FY11 earnings for CK Tang is negative.

In our analysis, we have only used trading multiples based market approach as similar

transaction multiples were not available.

5. VALUATION OF THE DEPARTMENT STORE PROPERTY BY THE INDEPENDENT

PROPERTY VALUER

The Independent Property Valuer was commissioned to assess the market value of the

Department Store Property and has adopted the income capitalisation approach to determine

the value of the Department Store Property. The income capitalisation approach is a widely

accepted method for the purpose of valuing income producing properties.

Under the income capitalisation approach, the gross revenue is adjusted to reflect long term

vacancy, operating expenses, property tax and management fees, to determine the net income

of the property.

The net income is capitalized for the balance term of the lease tenure at a capitalisation rate

which is appropriate for the type of use, tenure and quality of the property. The capitalisation rate

adopted is based on the comparables sales of similar types.


CAPITAL REDUCTION

24

A copy of the Valuation Summary prepared by the Independent Property Valuer is attached at

Appendix B of the Letter. Their opinion of the market value of the Department Store Property for

its existing use as a department store, free from all encumbrances is S$360 million.

6. DETERMINATION OF THE FAIR MARKET VALUE PER SHARE

In determining the Fair Market Value Per Share of CK Tang, we have compared the computed

Fair Market Value Per Share to the revalued NAV (the “RNAV”) of the Group. RNAV is

determined after adjusting mainly for the revaluation of the Company’s key property assets

based on its estimated current market values.

6.1 Analysis of the RNAV of the Group

We have checked with management whether there are any tangible assets which should be

valued at an amount that is materially different from that which is recorded in the audited balance

sheet of the Group as at 31 March 2011.

The audited balance sheet of the Group as at 31 March 2011 has included the market value of

the department store property as appraised by the Independent Property Valuer at S$360 million

hence there is no revaluation surplus or deficit arising in respect of the Department Store

Property as at 31 March 2011.

The following table sets out an analysis of the historical RNAV of the Group:

FYE 31 March FY09 FY10 FY11

Department Store Property Value (S$ million) 340.0 350.0 360.0

Audited RNAV (S$ million) 219.6 223.6 241.5

Audited RNAV Per Share (S$) 0.93(1) 0.94(2) 1.02(3)

(Source: Relevant shareholder circulars, annual reports)

Notes:

(1) Computed based on 236,996,226 fully diluted Shares assuming full conversion of the 12,000 outstanding options

into 12,000 Shares as at 31 March 2009.





Based on the above, we note that the audited RNAV Per Share as at 31 March 2011 is higher

than both the historical audited RNAV Per Share as at 31 March 2009 and 31 March 2010.


CAPITAL REDUCTION

25

The higher audited RNAV Per Share as at 31 March 2011 is largely attributed to the increase in

the Department Store Property from S$340 million as at 31 March 2009 to S$ 360 million as at

31 March 2011.

The following table sets out a comparison of the Fair Market Value Per Share of S$1.13 against

the historical audited RNAV of the Group:

FYE 31 March FY09 FY10 FY11

Audited RNAV Per Share (S$) 0.93 0.94 1.02

Premium against the

Fair Market Value Per Share of S$1.13 21.5% 20.2% 10.8%

The Fair Market Value Per Share of S$1.13 represents a premium of 21.5% and 20.2% over the

historical audited RNAV Per Share as at 31 March 2009 and 31 March 2010 respectively.

As at 31 March 2011, the Fair Market Value Per Share of S$1.13 represents a premium of 10.8%

over the audited RNAV Per Share of S$1.02.

7. CONCLUSION AND RECOMMENDATION

Based on the above analysis including the qualifications made therein, we are of the opinion that

the Fair Market Value Per Share is S$1.13.

This letter is governed by, and construed in accordance, with the laws of Singapore, and is

strictly limited to the matters stated herein and does not apply by implication to any other matter.

Nothing herein shall confer or be deemed or is intended to confer any rights of benefits to any

third party and the Contracts (Rights of Third Parties) Act 2001 and any re-enactment thereof

shall not apply.

Yours truly

For and on behalf of

PricewaterhouseCoopers Corporate Finance Pte Ltd

Kan Yut Keong

Managing Director


CAPITAL REDUCTION

26

Jones Lang LaSalle Property Consultants Pte Ltd

Jones Lang LaSalle Property Management Pte Ltd

9 Ra�es Place #39-00 Republic Plaza Singapore 048619

tel +65 6220 3888 fax +65 6438 3362

Company Reg No. 198004794D Agency Licence No. L3007326E

Company Reg No. 197600508N

Certi!cate No. SG04/00074

Certi!cate no. SG04/00075

Valuation (Land & Building)

Your Ref :

Our Ref : TKC:CHH:aa:110477

C.K. Tang Limited

310 Orchard Road

Singapore 238864

June 30, 2011

Dear Sir,

VALUATION OF 310 ORCHARD ROAD TANGS STORE SINGAPORE 238864

(THE “PROPERTY”)

We have been instructed by the Board of Directors of C.K. Tang Limited to determine the market value

of the Department Store Property for its existing use belonging to C.K. Tang Properties (Singapore) Pte

Ltd, a wholly-owned subsidiary of C.K. Tang Limited.

We have prepared a valuation summary in accordance with the instructions of the Board of Directors

for the specific purpose of its inclusion in the Letter to be issued in connection with the Selective Capital

Reduction for C.K. Tang Limited.

Unless otherwise defined or the context otherwise requires, all terms defined in the Letter shall have

the same meaning herein.

RELIANCE ON THIS LETTER

The opinion of value contained in this Letter is not a guarantee or prediction but is based on the

information obtained from reliable and reputable agencies and sources, the Board of Directors and

other related parties. Whilst Jones Lang LaSalle Property Consultants Pte Ltd has endeavoured to

obtain accurate information, it has not independently verified all the information provided by the Board

of Directors or other reliable and reputable agencies.

The methodology used in valuing the Department Store Property namely, the capitalization approach

is used to determine the market value for its existing use.

APPENDIX 3VALUATION SUMMARY ISSUED BY JONES LANG LASALLE PROPERTY

CONSULTANTS PTE LTD

27

The resultant value is, in our opinion, the best estimate but it is not to be construed as a guarantee or

prediction and it is fully dependent upon the accuracy of the assumptions made. Every Shareholder

who intends to make a decision concerning the Selective Capital Reduction should understand the

assumptions and methodologies made in the Letter to appreciate the context in which the values are

arrived at and also carry out their independent assessment with regards to the Selective Capital

Reduction. We do not take any responsibility for any decision made by the Shareholders.

We have not carried out investigations on site in order to determine the suitability of ground conditions,

nor have we undertaken archaeological, ecological or environmental surveys. Our valuation is made on

the basis that the aforesaid conditions and surveys are satisfactory.

VALUATION RATIONALE

The valuation of the Department Store Property is assessed based on the market value for its existing

use as a department store.

Existing Use Value

In arriving at our opinion of market value, we have adopted the capitalisation of net income approach.

OPINION OF VALUE

A summary of our valuation and details relating to the Department Store Property is set out in the

following page.

DISCLAIMER

We have prepared this valuation summary which appears in the Letter and specifically disclaim liability

to any person in the event of any omission from or false or misleading statement included in the Letter,

other than in respect of the information provided within the valuation summary. We do not make any

warranty or representation as to the accuracy of the information in any part of the Letter other than as

expressly made or given in this valuation summary.

Jones Lang LaSalle has relied upon the Department Store Property’s data supplied by the Board of

Directors which we assume to be true and accurate. Jones Lang LaSalle takes no responsibility for

inaccurate data supplied by the client and subsequent conclusions related to such data.

The reported analyses, opinions and conclusions are limited only by the reported assumptions and

limiting conditions and are our unbiased professional analyses, opinions and conclusions. We have no

present or prospective interest in the Department Store Property and are not a related corporation of

nor do we have a relationship with the Board of Directors, adviser or other party/parties whom we are

contracting with. The valuers’ compensation is not contingent upon the reporting of a predetermined


CONSULTANTS PTE LTD

28

value or direction in value that favors the cause of the client, the amount of the value estimate, the

attainment of a stipulated result, or the occurrence of a subsequent event.

We hereby certify that our valuers undertaking these valuations are authorized to practise as valuers

and have the necessary expertise and experience in valuing similar types of properties.

We have enclosed the general principles adopted in the preparation of this valuation summary.

Yours faithfully,

JONES LANG LASALLE PROPERTY CONSULTANTS PTE LTD

Tan Keng Chiam

B.Sc. (Est. Mgt.) MSISV

AD041-2004796D

Regional Director


CONSULTANTS PTE LTD

29

VALUATION SUMMARY

Property : 310 Orchard Road

Tangs Store

Singapore 238864

(The “Property”)

Legal Description : Lots U4579P and U4580W Town Subdivision 27

Tenure : Estate In Fee Simple

Brief Description of

Department Store Property

: A 5-level department store with an office at the 7th storey located

within a 7-storey podium block with 2 basement levels of the

Department Store Property.

Strata Floor Area : Strata Lot No. Strata Floor Area

U4579P 11,649 sq.m.

U4580W 6,120 sq.m.

Total 17,769 sq.m.*

* including void, lift motor room and roof slabs

Owner : C.K. Tang Properties (Singapore) Ltd

Lease Agreement : The Department Store Property is leased to C.K. Tang Limited for a

term of 5 years commencing from July 1, 2008.

Master Plan Zoning

(2008 Edition)

: ‘Hotel’ with a gross plot ratio of 5.6+.

Market Value for its existing

use as at June 30, 2011

: S$360,000,000/-

(Singapore Dollars Three Hundred And Sixty Million).

JONES LANG LASALLE

TKC:CHH:aa:110477

June 30, 2011


CONSULTANTS PTE LTD

30

GENERAL PRINCIPLES ADOPTED IN THE PREPARATION OF VALUATIONS AND REPORTS

These are the general principles upon which our Valuations and Reports are normally prepared; they apply unless

we have specifically mentioned otherwise in the body of the report.

1) VALUATION STANDARDS

All work are carried out in accordance with the Singapore Institute of Surveyors and Valuers (SISV) Valuation

Standards and Guidelines and International Valuation Standards (IVS), subject to variations to meet local

laws, customs, practices and market conditions.

2) VALUATION BASIS

Our valuations are made on the basis of Market Value, defined by the SlSV as follows:

“Market Value is the estimated amount for which a property should exchange on the date of valuation

between a willing buyer and a willing seller in an arm’s-length transaction after proper marketing wherein the

parties had each acted knowledgeably, prudently, and without compulsion.”

3) CONFIDENTIALITY

Our Valuations and Reports are confidential to the party to whom they are addressed or their other

professional advisors for the specific purpose(s) to which they refer. No responsibility is accepted to any

other parties and neither the whole, nor any part, nor reference thereto may be included in any published

document, statement or circular, or published in any way, nor in any communication with third parties, without

our prior written approval of the form and context in which they will appear.

4) SOURCE OF INFORMATION

Where it is stated in the report that information has been supplied by the sources listed, this information is

believed to be reliable and we shall not be responsible for its accuracy nor make any warranty or

representation of the accuracy of the information. All other information stated without being attributed directly

to another party is obtained from our searches of records, examination of documents or enquiries with the

relevant authorities.

5) DOCUMENTATION

We do not normally read leases or documents of title and, where appropriate, we recommend that lawyer’s

advice on these aspects should be obtained. We assume, unless informed to the contrary, that all

documentation is satisfactorily drawn and that good title can be shown and there are no encumbrances,

restrictions, easements or other outgoings of an onerous nature which would have an effect on the value of

the interest under consideration.


CONSULTANTS PTE LTD

31

6) TOWN PLANNING AND OTHER STATUTORY REGULATIONS

Information on Town Planning is obtained from the set of Master Plan, Development Guide Plans (DGP) and

Written Statement published by the competent authority. Unless otherwise instructed, we do not normally

carry out requisitions with the various public authorities to confirm that the property is not adversely affected

by any public schemes such as road and drainage improvements. If reassurance is required, we recommend

that verification be obtained from your lawyers.

Our valuations are prepared on the basis that the premises and any improvements thereon comply with all

relevant statutory regulations. It is assumed that they have been, or will be issued with a Certificate of

Statutory Completion by the competent authority.

7) TENANTS

Enquiries as to the financial standing of actual or prospective tenants are not normally made unless

specifically requested. Where properties are valued with the benefit of lettings, it is therefore assumed that

the tenants are capable of meeting their obligations under the lease and that there are no arrears of rent or

undisclosed breaches of covenant.

8) STRUCTURAL SURVEYS

We have not carried out a building survey nor any testing of services, nor have we inspected those parts of

the property which are inaccessible. We cannot express an opinion about or advise upon the condition of

uninspected parts and this Report should not be taken as making any implied representation or statement

about such parts. Whilst any defects or items of disrepair are noted during the course of inspection, we are

not able to give any assurance in respect of rot, termite or past infestation or other hidden defects.

9) SITE CONDITIONS

We do not normally carry out investigations on site in order to determine the suitability of the ground

conditions and services for the existing or any new development, nor have we undertaken any

archaeological, ecological or environmental surveys. Unless we are otherwise informed, our valuations are

on the basis that these aspects are satisfactory and that, where development is proposed, no extraordinary

expenses or delays will be incurred during the construction period.

10) OUTSTANDING DEBTS

In the case of buildings where works are in hand or have recently been completed, we do not normally make

allowance for any liability already incurred, but not yet discharged, in respect of completed works, or

obligations in favour of contractors, sub-contractors or any members of the professional or design team.


CONSULTANTS PTE LTD

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11) INSURANCE VALUE

Our opinion of the insurance value is our assessment of the reinstatement cost for insurance purpose and

it comprises the total cost of completely rebuilding the property to be insured, together with allowances for

inflation, demolition and debris removal, professional fees, the prevailing G.S.T. (goods and services tax)

and, if applicable, compliance with current regulations and by-laws.

© Copyright Jones Lang LaSalle

Year 2009


CONSULTANTS PTE LTD

33

Our Ref : TKC:aa:110737

C.K. Tang Limited

310 Orchard Road

Singapore 238864

Certi!cate No. SG04/00074

Certi!cate no. SG04/00075

3 October 2011

Dear Sirs,

VALUATION OF DEPARTMENT STORE PROPERTY AS PART OF THE ENTIRE SITE COMPRISING

LOTS 972L, 973C, 974M AND 975W TOWN SUBDIVISION 27 (KNOWN AS TANG PLAZA SITE

(“TPS”)) LOCATED AT THE JUNCTION OF ORCHARD ROAD AND SCOTTS ROAD, SINGAPORE.

We have been instructed by the C.K. Tang Limited to estimate the value of the Department Store

Property, as apportioned from our opinion of the market value of TPS on the assumption that it is a

vacant redevelopment site as at June 30, 2011, after deducting development charges, in line with the

permissible planning parameters and guidelines, and subject to formal planning approval under the

Planning Act (Cap. 232).

We have prepared the valuation for the specific purpose of its inclusion in the Circular to be issued in

connection with the “Selective Capital Reduction” exercise.

Unless otherwise defined or the context otherwise requires, all terms defined in the Circular shall have

the same meaning herein.

1.0 RELIANCE ON THIS REPORT

This is a valuation report that we, Jones Lang LaSalle Property Consultants Pte Ltd, have

carried out for the purpose stated above.

The opinion of values contained in the valuation report is not a guarantee or prediction but is

based on the information obtained from reliable and reputable agencies and sources, C. K.

Tang Limited and other related parties. Whilst Jones Lang LaSalle Property Consultants Pte

Ltd has endeavoured to obtain accurate information, it has not independently verified all the

information provided by the company or other reliable and reputable agencies.

The methodologies used in valuing the TPS as a vacant redevelopment site are namely, the

direct comparison, capitalization approach and discounted cash flow approach to determine

the gross development value of the proposed development, and the residual approach and

direct comparison approach to determine the land value, are based on our professional opinion

and estimates of the current and future results and are not guarantees or predictions. The

valuation methodologies are summarized in this report. Each methodology is based on a set of

assumptions as to the income and expenses taking into consideration the changes in economic

conditions and other relevant factors affecting the values.

APPENDIX 4VALUATION REPORT ISSUED BY JONES LANG LASALLE

PROPERTY CONSULTANTS PTE LTD

34

1.0 RELIANCE ON THIS REPORT (CONT’D)

The resultant values are, in our opinion, the best estimate but they are not to be construed as

a guarantee or prediction and they are fully dependent upon the accuracy of the assumptions

made. Every Shareholder who intends to make a decision concerning the Offer should review

the valuation report to understand the assumptions and methodologies made in the valuation

report to appreciate the context in which the values are arrived at and also carry out their

independent assessment with regards to the Offer. We do not take any responsibility for any

decision made by the Shareholder.

We have not carried out investigations on site in order to determine the suitability of ground

conditions, nor have we undertaken archaeological, ecological or environmental surveys. Our

valuation is made on the basis that the aforesaid conditions and surveys are satisfactory.

2.0 BACKGROUND INFORMATION ON TANG PLAZA

2.1 Ownership

The Company has informed us that Tang Plaza is a strata titled development comprising 7

strata lots with two subsidiary proprietors namely Tang Holdings Private Limited and C.K. Tang

Properties (Singapore) Pte Ltd. The Management Corporation Strata Title Plan No. 1673 was

formed to manage all strata lots and the common properties within Tang Plaza such as the

carparks, driveways, walkways, kiosks and roofs, etc.

Tang Plaza currently occupies Lots 972L, 973C, 974M and 975W Town Subdivision 27.

Tang Holdings Private Limited, a private entity majority controlled by TWK, owns 5 strata lots

(approximately 71.7% by share value) comprising the 4 strata shops located on the 1st storey

and the strata lot comprising the hotel, known as Singapore Marriott Hotel, which is part

commercial and part hotel use.

C.K. Tang Properties (Singapore) Pte Ltd, a wholly owned subsidiary of CKT, owns 2 strata lots

(approximately 28.3% by share value) comprising the Department Store Property, which forms

part of the commercial use within Tang Plaza.

2.2 Statutory Provisions that may be relevant

As Tang Plaza is a strata subdivided development, the Land Titles (Strata) Act (Cap. 158) and

the Building Maintenance And Strata Management Act 2004 are applicable.

Should there be any collective sales made possible by the enhancement in the value of the land

over the existing use value, the disposition of the TPS is subject to the rules and regulations

within the statutes stated above.

C.K. Tang Limited

Department Store Property As Part Of The Entire Site Comprising

Lots 972L, 973C, 974M And 975W Town Subdivision 27

(Known As Tang Plaza Site (“TPS”)) Located At The Junction Of

Orchard Road And Scotts Road, Singapore. 3 October 2011



35

2.0 BACKGROUND INFORMATION ON TANG PLAZA (CONT’D)

Section 84A (1) Part VA of the Land Titles (Strata) Act (Cap. 158) provides as follows:

“84A.—(1) An application for an order for the sale of all the lots and common property in a strata

title plan may be made by —

(a) the subsidiary proprietors of the lots with not less than 90% of the share values and not

less than 90% of the total area of all the lots (excluding the area of any accessory lot) as

shown in the subsidiary strata certificates of title where less than 10 years have passed

since the date of the issue of the latest Temporary Occupation Permit on completion of

any building (not being any common property) comprised in the strata title plan or, if no

Temporary Occupation Permit was issued, the date of the issue of the latest Certificate of

Statutory Completion for any building (not being any common property) comprised in the

strata title plan, whichever is the later; or

(b) the subsidiary proprietors of the lots with not less than 80% of the share values and not

less than 80% of the total area of all the lots (excluding the area of any accessory lot) as

shown in the subsidiary strata certificates of title where 10 years or more have passed

since the date of the issue of the latest Temporary Occupation Permit on completion of

any building (not being any common property) comprised in the strata title plan or, if no

Temporary Occupation Permit was issued, the date of the issue of the latest Certificate of

Statutory Completion for any building (not being any common property) comprised in the

strata title plan, whichever is the later, who have agreed in writing to sell all the lots and

common property in the strata title plan to a purchaser under a sale and purchase

agreement which specifies the proposed method of distributing the sale proceeds to all

the subsidiary proprietors (whether in cash or kind or both), subject to an order being

made under subsection (6) or (7).

[21/99;46/2007] ”

For the avoidance of doubt, the extraction (and any conclusions that may be drawn or implied

from such extraction) should not be construed or deemed to be in the nature of a legal advice

or opinion for which all liability in respect thereof is hereby disclaimed. Please obtain

independent legal advice and counsel in your interpretation and understanding of these

extractions.

C.K. Tang Limited







36


2.3 Apportionment of Each Subsidiary Proprietor’s Interest in a Collective Sale

Methods of Distribution

The methods of distribution of the sale proceeds in a collective sale are prescribed in the

Valuation Standards and Guidelines issued by the Singapore Institute of Surveyors and Valuers

(SISV). The methods of distribution include the following:–

(i) Based purely on share value

This may be used when the units are of the same or similar strata/floor areas with same

or similar share values.

(ii) Based purely on strata/floor area

This may be used when the units are of the same strata/floor area.

(iii) Based on a combination of share value and strata/floor area

This may be used where there are wide differences in the share value and/or strata/floor

area among the various units.

(iv) Based on valuation

This may be used when the general attributes of the property are to be considered. A

valuation is made of a typical unit of each type or category disregarding renovations,

facing, floor level, etc. Alternatively, the valuation of the individual units can be carried out,

taking into account differences in unit size, orientation and storey/level, etc. All units in the

development are assumed to be in a fair and reasonable state of repair and maintenance.

In the case of retail units, the Valuer should also take into consideration the siting of the

unit. It should be noted that the valuation method will involve additional costs.

Besides these methods, there may be other variations or a combination of the above methods.

In all cases, the Valuer should justify in his report the recommended approach for the

distribution of sale proceeds. In the event of a disagreement in valuations, the dispute may be

referred to SISV for final adjudication by the SISV Valuation Review Panel.

C.K. Tang Limited







37


It is reasonable to expect that the method of distribution proposed for the majority and minority

unit owners may differ. Under such circumstances, the difference may be resolved by both

Valuers for the majority and minority owners or the majority and minority owners themselves

meeting to discuss their basis for the proposed method of distribution and to reconcile the

difference. In the event that the difference cannot be reconciled, the matter will be adjudicated

by the Strata Titles Board. It is essential to note that the final test of the proposed method is that

the opposing minority owners must not be disadvantaged by the method of distribution and the

proposed method is fair and reasonable to all owners.

2.4 Description of Tang Plaza

The entire development, known as Tang Plaza, is a strata titled retail-cum-hotel development

comprising 7 strata lots. The legal description, strata floor areas and the share values are

summarized as follows:

Use

Registered

Subsidiary

Proprietors*

Strata

Lot Nos

TS 27*

Share

Value*

Strata

Floor

Area*

(sq.m.)

Void

(sq.m.)

Net Floor

Area

(sq.m.)

Hotel/Commercial Tang Holdings

Private Limited

U4929M 7,125 46,278 2,835 43,443

Shop Tang Holdings

Private Limited

U4582P 12 75 0 75

Shop Tang Holdings

Private Limited

U4583T 11 66 0 66

Shop Tang Holdings

Private Limited

U4584A 11 65 0 65

Shop Tang Holdings

Private Limited

U4930L 10 61 0 61

Sub-Total 7,169 46,545 2,835 43,710

Department Store C.K. Tang

Properties

(Singapore)

Pte Ltd

U4579P 1,845 11,649 403 11,246

Department Store C.K. Tang

Properties

(Singapore)

Pte Ltd

U4580W 986 6,120 108 6,012

Sub-Total 2,831 17,769 511 17,258

Total 10,000 64,314 3,346 60,968

* Source: SLA

C.K. Tang Limited







38


2.4.1 Tang Holdings Private Limited’s Interest in Tang Plaza — Hotel and Shops

Tang Holdings Private Limited owns 5 strata lots comprising the 31-storey hotel/commercial

premises with a basement, known as the ‘Singapore Marriott Hotel’ and 4 shops located on the

1st storey. The total strata floor area is 46,545 sq.m. and the total share value is 7,169/10,000.

This forms approximately 71.7% of the total share values within Tang Plaza.

2.4.2 C.K. Tang Properties (Singapore) Pte Ltd’s Interest in Tang Plaza — Department Store

Property

The Department Store Property is a 7-storey retail podium with 2 basement levels which is part

of a retail-cum-hotel development known as Tang Plaza.

The Department Store Property comprises 2 strata lots namely: U4579P and U4580W TS 27

with strata floor areas of 11,649 sq.m. (including void of 403 sq.m.) and 6,120 sq.m. (including

void of 108 sq.m.) respectively (total: 17,769 sq.m.). The share values are 1,845/10,000 and

986/10,000 respectively (total: 2,831/10,000) and collectively form approximately 28.3% of the

total share values within Tang Plaza.

2.5 Description of TPS

TPS comprises 4 plots of land and together they form almost an ‘L’ shaped plot of land with

frontages of about 145m along Orchard Road and about 90m along Scotts Road. It is generally

flat and above the road level. The details of the site are summarized below:

Lot No.

(TS 27)

Site Area

(sq.m.)

Tenure Registered Proprietors

972L 12,610.7 Estate In Fee Simple All subsidiary proprietors of all the strata lots

973C 1,639.4 Estate In Fee Simple All subsidiary proprietors of all the strata lots

974M 297.0 Estate In Fee Simple All subsidiary proprietors of all the strata lots

975W 81.1 Estate In Fee Simple All subsidiary proprietors of all the strata lots

Total 14,628.2

C.K. Tang Limited







39


2.6 Legal Description Of Department Store Property

The detailed breakdown of the Department Store Property is shown below:

Level

UseableFloorArea

(sq.m.) Void

StrataFloorArea

(sq.m.)

UseableFloorArea

(sq.m.) Void

StrataFloorArea

(sq.m.)

Total StrataFloor Area

(sq.m.) Use

Lot NoTS 27

U4579P U4580W U4579Pand

U4580W

Commercial

2ndBasement

38 0 38 0 0 0 38 Lift Well

1stBasement

2,482 0 2,482 979 0 979 3,461 DepartmentStore

1st Storey 1,906 0 1,906 919 14 933 2,839 DepartmentStore

2nd Storey 2,658 42 2,700 1,153 0 1,153 3,853 DepartmentStore

3rd Storey 2,413 32 2,445 1,153 0 1,153 3,598 DepartmentStore

4th Storey 450 329 779 954 0 954 1,733 DepartmentStore

5th Storey 69 0 69 733 47 780 849 Roof

Roof 72 0 72 85 0 85 157 Roof

Lift MotorRoom

24 0 24 36 47 83 107 Lift MotorRoom

7th Storey 1,134 0 1,134 0 0 0 1,134 Office

Total 11,246 403 11,649 6,012 108 6,120 17,769

ShareValues

1,845 986 2,831

C.K. Tang Limited







40


2.7 Planning Guidelines

2.7.1 Master Plan 2008 Zoning and Uses

The site is zoned “Hotel”. At least 60% of the total floor area shall be used for hotel room floors

and hotel related uses as defined in the Planning (Development Charge) Rules.

Commercial and residential uses may be considered by the competent authority subject to

control on the use quantum as determined by the competent authority and they shall not

exceed 40% of the total floor area.

2.7.2 Detailed Control Plans

There must be activity-generating uses at the 1st storey and basement level along the

boundaries of Orchard Road and Scotts Road, and there must be activity-generating uses on

the 1st storey.

2.7.3 Baseline Plot Ratio and Development Potential

The baseline search was not carried out for the site. According to the written permission and

grant of provision permission number ES 20070611R0153 dated 19 December 2007 and 9 July

2007 respectively, the existing gross floor area indicated was 59,241.3 sq.m. comprising

33,040.2 sq.m. for commercial use and 26,201.1 sq.m. for hotel use. We have been informed

by the management corporation that development charge was paid in 2006. Therefore, we

assume that the baseline plot ratio is 4.05 representing a total gross floor area of approximately

59,241.3 sq.m. in the proportion stated above.

Existing Use Scenario 1 Scenario 2

Site Area 14,628.2 14,628.2 14,628.2

Gross Floor Area 59,241.3 90,109.7 90,109.7

Plot Ratio 4.05 6.16 6.16

Use Gross Floor Area (sq.m.) Gross Floor Area (sq.m.)

Commercial 33,040.2 36,038.4 19,368.1

Percentage of Use 55.77% 40.00% 21.50%

Residential 0 0 16,670.3

Percentage of Use 0 0 18.50%

Hotel 26,201.1 54,071.3 54,071.3

Percentage of Use 44.23% 60.00% 60.00%

C.K. Tang Limited







41


TPS is able to increase its gross floor area by approximately 30,868.4 sq.m. under the current

planning guidelines subject to payment of development charges. Of which 27,864.7 sq.m. or

90.2% of the additional allowable gross floor area is to be allocated for hotel and hotel related

uses. The rest of the 3,003.7 sq.m. or 9.8% are for commercial or residential uses.

2.7.4 Planning Application

As at date of this report, there is no planning application for the redevelopment of TPS.

2.7.5 Hotel Conversion

In the Circular No. URA/PB/2008/01-CUDD dated January 14, 2008, titled ‘Revised approach

to evaluating hotel conversion application’ issued by URA, addresses the conversion of hotel

as follows:

“Objective

The Urban Redevelopment Authority (URA) and the Singapore Tourism Board (STB) have

discontinued the Hotel Safeguarding Policy introduced in 1997. Applications to convert sites

zoned for Hotel use to other uses will be considered under the national planning framework,

taking into account the prevailing planning intentions as reflected in the Master Plan. URA will

also continue to take into account the sufficiency of hotel developments when evaluating such

applications. The change puts the land use regulatory framework for Hotels in line with other

uses. . . . . . . . . . . . . . . . . .

(i) Under the Hotel Safeguarding Policy introduced in 1997, hotels within designated areas

were not allowed to convert to other uses. Hotels located outside these designated areas

on the other hand could be converted to other uses such as residential or commercial,

subject to planning approval.

(ii) Henceforth, applications to convert sites zoned for Hotel use to other uses will be

considered under the national planning framework, taking into account the prevailing

planning intentions as reflected in the Master Plan. In addition, URA will continue to take

into account the sufficiency of hotel developments when evaluating such applications.

The change puts the land use regulatory framework for Hotels in line with other uses.

(iii) Under its Tourism 2015 plan, STB is targeting 17 million visitors and S$30 billion in

tourism receipts by 2015. To meet these targets, the number of hotel rooms would need

to be increased by 2015. The revised approach to evaluating hotel conversion

applications will ensure that the location and number of hotel rooms safeguarded are in

line with planning intentions and strategic planning objectives.

C.K. Tang Limited







42


(iv) As a general rule, hotels will not be allowed to be converted to other uses where:

(a) The hotels are located on sites zoned for hotel use in the Master Plan; and

(b) The hotels are located within sites zoned for other uses but where there is a specific

planning or sales requirement for a minimum hotel quantum to be provided.”

2.7.6 Urban Design Guidelines For Orchard Planning Area:

The development of TPS is subject to further planning guidelines and considerations that are

governed by the Urban Redevelopment Authority (URA). They are stipulated in the Urban

Design Guidelines for the Orchard Planning Area. We have highlighted amongst many others

the following:

2.7.6.1 Orchard Road Development Commission (ORDEC):

Circular No: URA/PB/2010/06-CUDG dated May 3, 2010

“The ORDEC was established as part of a series of incentives to enhance and rejuvenate

Orchard Road. The aim is to encourage bold, new, innovative developments that will create a

positive impact on Orchard Road. Redevelopment and major Addition & Alteration (A&A)

proposals that innovatively add value to Orchard Road and our city can be supported with

development incentives and be allowed to deviate from current planning parameters, upon the

ORDEC’s recommendation. Joint proposals between two or more developments which could

bring about enhancement and rejuvenation of the streetblock, are encouraged.

The parameters that can be considered by the ORDEC are:

• Gross plot ratio (GPR)/gross floor area (GFA);

• Land use and use quantum; and

• Building Height”

C.K. Tang Limited







43


2.7.6.2 Art Incentive — Revision To The Art Incentive Scheme For New Developments In Central

Area

Circular No: URA/PB/2009/06-CUDG dated April 29, 2009

“The Guidelines for the Art Incentive Scheme for New Developments In Central Area (Scheme)

were first introduced in September 2005 by the Urban Redevelopment Authority (URA) to

encourage the provision and integration of public art works within new developments in the

Central Area.

This Circular supersedes the earlier Circular URA/PB/2005/23-CUDD released on

5 September 2005 and is to be read in conjunction with the overall 10% bonus GFA budget in

URA’s Circular No: URA/PB/2009/03-DCG dated 29 April 2009 on “Framework for Managing

Bonus Gross Floor Area Incentives”.

Only cost items that directly affect and contribute to the value of the art work can be included

in the assessment of the value of the art work for the purpose of computing the additional GFA

that can be applied for under the Scheme. This excludes costs incurred in procuring the art

work (e.g. travel expenses, artist’s tools, freight charges, insurance, submission fees, etc.).

Under the Scheme, the additional GFA for the provision of integrated art work is capped at a

maximum of 1.0% of the total prescribed Gross Plot Ratio (GPR) for the development under the

Master Plan 2008 or 700 sq.m., whichever is lower.

The additional GFA for the provision of free-standing art work is capped at a maximum of 0.5%

of the total prescribed GPR for the development under the Master Plan 2008 or 350 sq.m.,

whichever is lower.”

2.7.6.3 Height Control

Circular: URA/PB/2006/13-CUDD dated June 5, 2006

Relaxation Of Residential Building Heights In The Downtown Core, Orchard And Rochor

(Part) Planning Areas Within Central Area

TPS is located within the zone whereby the maximum permissible height of 30 storeys.

However, the competent authority is prepared to consider higher level subject to further

evaluation.

C.K. Tang Limited







44

3.0 REDEVELOPMENT SCENARIOS OF TPS

The site is zoned “Hotel” with the permissible base plot ratio as prescribed under the Planning

Act Master Plan 2008 at 5.6+. TPS is within the demarcated boundary where it qualifies for a

10% increase above the base plot ratio i.e. 5.6 X 1.1 = 6.16.

We have not taken into consideration the various incentive schemes offered by the authorities

as each is to be evaluated on individual merits and are subject to various terms and conditions.

As such, we have broadly considered 2 possible redevelopment scenarios based on the

following planning parameters and guidelines, subject to formal planning approval as follows:

Site Area : Approximately 14,628.2 sq.m.

Existing Plot Ratio : 4.05

Existing Gross Floor Area : 33,040.2 sq.m. (commercial) and 26,201.1 sq.m.

(hotel) (Total: 59,241.3 sq.m.)

Allowable Plot Ratio : 6.16

Total Gross Floor Area : Approximately 90,109.7 sq.m.

Hotel Use : The Singapore Marriott Hotel is zoned ‘hotel’ in the

2008 Master Plan. As a general rule, the hotel cannot

be converted to other uses. Hence, at least 60% of the

total floor area shall be used for hotel room floors and

hotel related uses as defined in the Planning

(Development Charge) Rules.

3.1 Assumptions:

For both scenarios 1 and 2, the hotel component shall have a proposed gross floor of 60% of

the total gross floor areas for hotel and hotel related uses. In addition, it will require

approximately 5% out of the total 40% of commercial gross floor areas for commercial uses

such as ballrooms, meeting rooms and related uses. We assume that it will be a high-rise 5-star

hotel comprising approximately 837 rooms with rooms sizes ranging between 43 sq.m. to 90

sq.m. The hotel will have recreational amenities such as gym, spa and swimming pool.

The rest of the 35% for commercial use shall be allocated to retail use for scenario 1 and

retail-cum-residential uses for scenario 2.

The bases of gross floor area allocation and costing for the scenarios above are drawn on our

experience of past projects and, are indicative only. Suitably experienced technical assistance

from architects, hotel operators, quantity surveyors and planners are required to validate such

assumptions. Accordingly, further studies are necessary to verify and validate the findings in

this report.

C.K. Tang Limited







45

3.0 REDEVELOPMENT SCENARIOS OF TPS (CONT’D)

3.1.1 Scenario 1

We are proposing, for scenario 1, approximately 65% or 58,571.3 sq.m. of the total gross floor

area will be allocated for hotel use (including 5% commercial uses for the ballrooms, meeting

rooms and related uses) and the rest of the 35% or 31,538.4 sq.m. of total gross floor areas will

be for retail use. Assuming a site coverage of approximately 50% as the building footprint for

the retail podium, each retail level shall cover an average gross floor area of approximately

7,314 sq.m. The retail component could have about 4 to 5 levels or more levels depending on

the design considerations. The net lettable floor area is assumed to be 70% of the 31,538.4

sq.m.

3.1.2 Scenario 2

In this scenario, approximately 65% or 58,571.3 sq.m. of the total gross floor area will be for

hotel use (including 5% commercial uses for the ballrooms, meeting rooms and related uses).

The rest of the approximately 35% or 31,538.4 sq.m. of total gross floor areas will be for retail

use and residential use. There is a requirement for the basement and 1st storey to have

activity-generating uses. Assuming a site coverage of approximately 50% as the building

footprint for the retail podium and in order to meet the planning requirements of providing

activity-generating uses at the basement level and the 1st storey, the total gross floor area

required will be approximately 14,868.1 sq.m. (16.5%) and the rest of the gross floor areas of

16,670.3 sq.m. (18.5%) shall be for residential uses. We have applied an additional 10% bonus

plot ratio for use as balconies, therefore the total gross floor areas of the residential component

will be 18,337.3 sq.m. The saleable residential floor area is estimated to be approximately

17,420.5 sq.m. and it will accommodate about 87 (averaging 200 sq.m. each) luxurious

apartments with communal facilities.

C.K. Tang Limited







46

3.0 REDEVELOPMENT SCENARIOS OF TPS (CONT’D)

Scenario 1 Scenario 2

Use Gross Floor Area (sq.m.) Gross Floor Area (sq.m.)

Commercial 31,538.4 14,868.1

Percentage of Use 35% 16.50%

Residential — 16,670.3

(18,337.33 including additional 10%

of gross floor area for balconies)

Percentage of Use — 18.50%

Hotel 58,571.3 58,571.3

Percentage of Use 65% 65%

Basis of Proportion for

retail and hotel use

60% for Hotel and its related use

with 5% of commercial use for

ballrooms, meeting rooms and

related uses

35% is allocated to commercial use

60% for Hotel and its related use

with 5% of commercial use for

ballrooms, meeting rooms and

related uses

35% is allocated to commercial use

Subject to URA evaluation, 35%

of the commercial use may be

allocated to commercial and

residential. We are proposing

16.5% to be allocated to retail use

and 18.5% to residential use.

4.0 VALUATION RATIONALE

The valuation of the Department Store Property is assessed based on the market value of the

Department Store Property, as apportioned from our opinion of the market value of TPS on the

assumption that it is a vacant redevelopment site as at June 30, 2011, after deducting

development charges, in line with the permissible planning parameters and guidelines, and

subject to formal planning approval under the Planning Act (Cap. 232).

4.1 Methods of Valuation

4.1.1 Discounted Cash Flow Approach

In arriving at our valuation figure, we have adopted the DCF approach to ascertain the gross

development value of the hotel and retail components.

C.K. Tang Limited







47

4.0 VALUATION RATIONALE (CONT’D)

Under the DCF approach, the net incomes are discounted at an appropriate discount rate to

arrive at the net present values. The net incomes are derived by deducting from the gross

income, the vacancy, management fees, the operating expenses incurred in the maintenance

and service charges and other outgoings including property tax, leasing cost, agency fees and

other related expenses.

We have undertaken a discounted cash flow analysis over a 5/10-year period. The projected

net income is discounted to arrive at the present value. The terminal value of the hotel and retail

components are derived by capitalizing the 5th/10th year net income and they are discounted

to give the net present value. The 5/10 years discounted cash flow and present value of the

terminal value will give rise to the gross development value.

4.1.2 Capitalization Approach

The capitalization approach involves the addition of all income receivables and a deduction of

all outgoings after providing for structural vacancy to determine the net income of the retail

components. The net income receivables is assumed to be a level of annuity in accordance

with the tenure of the property and is capitalized using an appropriate capitalization rate

derived, where possible, from the analysis of relevant sales evidence and appropriate

adjustments for rental shortfalls and overages are made to arrive at the gross development

value.

4.1.3 Residual Approach

This method entails the determination of the gross development values of the TPS from which

the developer’s profit, marketing/legal fees, construction cost, financing cost, professional fees,

holding cost for the land, stamp duties and legal fees for the land and property tax and

development charges are deducted to arrive at the residual land values.

4.1.4 Direct Comparison Approach

In this method, we have taken into consideration the prevailing market conditions and have

made due adjustments for differences between the Property and the comparables in terms of

location, tenure, size, shape, design and layout, age and condition of buildings, dates of

transactions, development potential and other factors affecting its value to determine the gross

development value.

C.K. Tang Limited







48


4.2 Valuation Assumptions

4.2.1 Scenario 1

Hotel Retail

Gross Development Value Discounted Cashflow and

Direct Comparison Approach

Discounted Cashflow,

Direct Comparison Approach and

Direct Capitalisation

Land Value Residual Approach and


Residual Approach and


Valuation parameters and assumptions:

Gross Floor Area Hotel — 54,071.3 sq.m.

Commercial — 4,500 sq.m.

Commercial — 31,538.4 sq.m.

No. of Rooms 837 —

Average Room Rate S$407 for 1st year —

Building Efficiency — 70%

Net Floor Area — 22,076.9 sq.m.

Average Gross Rent — S$25 psf per month

Gross Development Value S$1,356,033 per room S$4,389 psf on net floor area

Occupancy Rate 67% for 1st year stabilised at 78%

from 4th year onwards

97%

Cost of Construction S$500 psf on GFA S$500 psf on GFA

Professional Fee 8% 8%

Capitalisation Rate — 5%

Discounted Rate 7.25% 8.00%

Terminal Yield 4.75% 5.25%

Final Cost 3.25% 3.25%

Period of Construction 3 years 3 years

Planning Period 9 months 9 months

C.K. Tang Limited







49


4.2.2 Scenario 2

Hotel Retail Residential

Gross Development Value Discounted Cashflow

and Direct Comparison

Approach

Discounted Cashflow,

Direct Comparison

Approach and Direct

Capitalisation

Direct Comparison

Land Value Residual Approach and

Direct Comparison

Approach

Residual Approach

and Direct Comparison

Approach

Residual Approach

Valuation parameters and assumptions:

Gross Floor AreaHotel — 54,071.3 sq.m.

Commercial — 4,500 sq.m.

Commercial

— 14,868 sq.m.

18,337 sq.m.

(including bonus plot

ratio for balconies)

No. of Rooms/Apartment 837 rooms — 87 apartments

Average Room Rate S$407 for 1st year — —

Building Efficiency — 75% 95%

Net Floor Area — 11,151.0 sq.m. 17,420.2 sq.m.

Average Gross Rent — S$30 psf per month —

Gross Development Value S$1,356,033 per room S$5,332 psf on net

floor area

S$4,500 psf on net

floor area

Occupancy Rate 67% for 1st year

stabilised at 78% from

4th year onwards

97% —

Cost of Construction S$500 psf on GFA S$500 psf on GFA S$500 psf on GFA

Professional Fee 8% 8% 8%

Capitalisation Rate — 5% —

Discounted Rate 7.25% 8.00% —

Terminal Yield 4.75% 5.25% —

Final Cost 3.25% 3.25% 3.25%

Period of Construction 3 years 3 years 3 years

Planning Period 9 months 9 months 9 months

C.K. Tang Limited







50

5.0 VALUATION RESULTS OF TPS

The results of our valuation of TPS are summarized as follows:–

Scenario 1

Hotel Retail Total

Gross Development Value S$1,135,000,000 S$1,043,000,000 S$2,178,000,000

Cost of Development such as cost

of construction, professional fees,

financing cost, contingencies,

stamp duty, legal fees, marketing

fees, holding cost, goods and

services tax and property tax,

and developer’s profit

S$ 491,000,000 S$ 478,000,000 S$ 969,000,000

Residual Land Value (including

Development Charges)S$ 644,000,000 S$ 565,000,000 S$1,209,000,000

Development Charges — — S$ 227,900,000

Residual Land Value (excluding

Development Charges)— — S$ 981,100,000

Scenario 2

Hotel Retail Residential Total

Gross Development

Value

S$1,135,000,000 S$640,000,000 S$844,000,000 S$2,619,000,000

Cost of Development

such as cost of

construction, professional

fees, financing cost,

contingencies, stamp

duty, legal fees,

marketing fees, holding

cost, goods and services

tax and property

tax, and developer’s

profit

S$ 491,000,000 S$266,500,000 S$357,000,000 S$1,114,500,000

Residual Land Value

(including Development

Charges)

S$ 644,000,000 S$373,500,000 S$487,000,000 S$1,504,500,000

Development Charges — — — S$ 267,600,000

Residual Land Value

(excluding Development

Charges)

— — — S$1,236,900,000

C.K. Tang Limited







51

6.0 OPINION OF VALUE

Based on the above, the following table outlines our opinion of the values for the Department

Store Property as apportioned from the market value of TPS as a vacant Redevelopment Site

as at June 30, 2011, according to the 2 scenarios are as follows:–

Description of Property Scenario 1 Scenario 2

Market values of TPS on the assumption that it is

available as a vacant redevelopment site after

deducting development charge, in line with the

permissible planning parameters and guidelines,

and subject to formal planning approval under the

Planning Act (Cap. 232)

S$981,100,000 S$1,236,900,000

Estimated values of the Department Store Property

as apportioned from the market values of TPS as a

vacant Redevelopment Site after deducting

development charges based on share value/net

floor area (28.3%)

S$277,700,000 S$ 350,000,000

The percentage of the Departmental Store Property as apportioned from market value of TPS

based on share values or net floor areas are the same at 28.3%.

We are unable to apportion using the valuation method or a combination of various methods

incorporating the valuation method as we are not able to obtain the necessary relevant

information to enable us to assess the existing use value of the Tang Holdings Private Limited’s

interest, which is required under the valuation method. Even if Tang Holdings Private Limited’s

interest can be established, the final apportionment is still subject to both parties agreeing on

the collective sale as well as the method of apportionment.

Whilst not expressing a legal opinion or rendering legal advice (for which all liability is hereby

disclaimed), our understanding of the extractions of the Land Titles (Strata) Act, as set out

earlier, is that the two subsidiary proprietors need to mutually agree and no single party can

move the motion to conduct a collective sale independently in order to fulfil the requirement of

having more than 80% share value agreeing.

7.0 DISCLAIMER

We have prepared this valuation summary which appears in the Circular and specifically

disclaim liability to any person in the event of any omission from or false or misleading

statement included in the Circular, other than in respect of the information provided within the

valuation reports. We do not make any warranty or representation as to the accuracy of the

information in any part of the Circular other than as expressly made or given in this valuation

report.

C.K. Tang Limited







52

7.0 DISCLAIMER (CONT’D)

Jones Lang LaSalle has relied upon the properties data supplied by the C.K Tang Limited which

we assume to be true and accurate. Jones Lang LaSalle takes no responsibility for inaccurate

data supplied by the client and subsequent conclusions related to such data.

The reported analyses, opinions and conclusions are limited only by the reported assumptions

and limiting conditions and are our personal, unbiased professional analyses, opinions and

conclusions. Our findings are based on our best knowledge with regards to the permissible

planning parameters and they may be subject to further changes, verifications and approvals

by the relevant authorities.

We have no present or prospective interest in the Department Store Property and are not a

related corporation of nor do we have a relationship with the C.K Tang Limited, adviser or other

party/parties whom we are contracting with. The valuers’ compensation is not contingent upon

the reporting of a predetermined value or direction in value that favors the cause of the client,

the amount of the value estimate, the attainment of a stipulated result, or the occurrence of a

subsequent event.

This letter is governed by, and construed in accordance with Singapore law, and is strictly

limited to the matters stated herein and does not apply by implication to any other matter. This

letter has been produced for the benefit of the C.K Tang Limited and may be relied upon by the

C.K Tang Limited, and the IFA for the sole purposes of the IFA’s Letter. No other person shall

be entitled to rely, reproduce, disseminate or quote this letter (or any part thereof) for any other

purposes at any time and in any manner except with our prior written consent in each specific

case.

We hereby certify that our valuers undertaking these valuations are authorized to practice as

valuers and have the necessary expertise and experience in valuing similar types of properties.

We have enclosed the general principles adopted in the preparation of this valuation and

report.

Yours faithfully,

JONES LANG LASALLE PROPERTY CONSULTANTS PTE LTD

Tan Keng Chiam

B. Sc. (Est. Mgt.) MSISV

Licence No: AD041-2004796D

Regional Director

C.K. Tang Limited







53

GENERAL PRINCIPLES ADOPTED IN THE PREPARATION

OF VALUATIONS AND REPORTS

These are the general principles upon which our valuations and reports are normally prepared; they

apply unless we have specifically mentioned otherwise in the body of the report.

(1) GUIDANCE NOTES

All work is carried out in accordance with the Practice Statements in the SISV’s Valuation

Standards and Guidelines and RICS Appraisal and Valuation Manual published by RICS Business

Services Limited, a wholly owned subsidiary of The Royal Institution of Chartered Surveyors

subject to variation to meet local established law, custom, practice and market conditions.

(2) VALUATION BASIS

Our valuations are made on the basis of open market value. This is intended to mean “the best

price at which the sale of an interest in the property would have been completed unconditionally

for cash consideration on the date of valuation, assuming:

(a) a willing seller;

(b) that, prior to the date of valuation, there had been a reasonable period (having regard to the

nature of the property and the state of the market) for the proper marketing of the interest,

for the negotiation and agreement of price and terms and for the completion of the sale;

(c) that the state of the market, level of values and other circumstances were, on any earlier

assumed date of exchange of contracts, the same as on the date of valuation;

(d) that no account is taken of any additional bid by a prospective purchaser with a special

interest; and

(e) that both parties to the transaction had acted knowledgeably, prudently and without

compulsion.”

No allowances are made for any expenses or taxation which might arise in the event of a disposal.

All property is considered as if free and clear of all mortgages, encumbrances and other

outstanding premiums, charges and liabilities.

(3) CONFIDENTIALITY

Our valuations and reports are confidential to the party to whom they are addressed or their other

professional advisors for the specific purpose(s) to which they refer. No responsibility is accepted

to any other parties and neither the whole, nor any part, nor reference thereto may be included

C.K. Tang Limited







54

in any published document, statement or circular, or published in any way, nor in any

communication with third parties, without our prior written approval of the form and context in

which it will appear.

(4) SOURCE OF INFORMATION

Where it is stated in the report that information has been supplied by the sources listed, this

information is believed to be reliable and there is no responsibility of this should it prove not to be

so. All other information stated without being attributed directly to another party is obtained from

our searches of records, examination of documents or enquiries with the relevant authorities.

(5) DOCUMENTATION

We do not normally read leases or documents of title and, where appropriate, we recommend that

lawyer’s advice on these aspects should be obtained. We assume, unless informed to the

contrary, that all documentation is satisfactorily drawn and that good title can be shown and there

are no encumbrances, restrictions, easements or other outgoings of an onerous nature which

would have an effect on the value of the interest under consideration.

(6) TOWN PLANNING AND OTHER STATUTORY REGULATIONS

Information on Town Planning is obtained from the set of Master Plan, Development Guide Plans

(DGP) and Written Statement published by the competent authority. Unless otherwise instructed,

we do not normally carry out requisitions with the various public authorities to confirm that the

property is not adversely affected by any public schemes such as road and drainage

improvements. If reassurance is required, we recommend that verification be obtained from your

lawyers.

Our valuations are prepared on the basis that the premises and any improvements thereon

comply with all relevant statutory regulations. It is assumed that they have been, or will be issued

with a Certificate of Statutory Completion by the competent authority.

(7) TENANTS

Enquiries as to the financial standing of actual or prospective tenants are not normally made

unless specifically requested. Where properties are valued with the benefit of lettings, it is

therefore assumed that the tenants are capable of meeting their obligations under the lease and

that there are no arrears of rent or undisclosed breaches of covenant.

C.K. Tang Limited







55

(8) STRUCTURAL SURVEYS

We have not carried out a building survey nor any testing of services, nor have we inspected those

parts of the property which are inaccessible. We cannot express an opinion about or advise upon

the condition of uninspected parts and this letter should not be taken as making any implied

representation or statement about such parts. Whilst any defects or items of disrepair are noted

during the course of inspection, we are not able to give any assurance in respect of rot, termite

or past infestation or other hidden defects.

(9) SITE CONDITIONS

We do not normally carry out investigations on site in order to determine the suitability of the

ground conditions and services for the existing or any new development, nor have we undertaken

any archaeological, ecological or environmental surveys. Unless we are otherwise informed, our

valuations are on the basis that these aspects are satisfactory and that, where development is

proposed, no extraordinary expenses or delays will be incurred during the construction period.

(10) OUTSTANDING DEBTS

In the case of buildings where works are in hand or have recently been completed, we do not

normally make allowance for any liability already incurred, but not yet discharged, in respect of

completed works, or obligations in favour of contractors, sub-contractors or any members of the

professional or design team.

(11) INSURANCE VALUE

Our opinion of the insurance value is our assessment of the reinstatement cost for insurance

purpose and it comprises the total cost of completely rebuilding the property to be insured,

together with allowances for inflation, demolition and debris removal, professional fees, the

prevailing G.S.T. (goods and services tax) and, if applicable, compliance with current regulations

and by-laws.

@ Copyright Jones Lang LaSalle

2011

C.K. Tang Limited







56

CIMB BANK BERHAD (13491-P)

SINGAPORE BRANCH

(Incorporated in Malaysia)

50 Raffles Place #09-01

Singapore Land Tower

Singapore 048623

7 October 2011

To: The Independent Directors

C.K. Tang Limited

310 Orchard Road,

Singapore 238864.

Dear Sirs,

SELECTIVE CAPITAL REDUCTION EXERCISE BY C.K. TANG LIMITED (THE “COMPANY”) TO

CANCEL ALL THE SHARES HELD BY THE SHAREHOLDERS OF THE COMPANY (THE

“SHAREHOLDERS”), EXCEPT THOSE HELD BY TANG UNITYTHREE LLP, TANG UNITYTWO LLP,

KERITH HOLDINGS LLP, TANG WEE KIT AND OTHER PARTIES ACTING IN CONCERT WITH

THESE SHAREHOLDERS (“NON-PARTICIPATING SHAREHOLDERS”)

1. INTRODUCTION

Following on and in relation to an offer made by Oversea-Chinese Banking Corporation Limited

for and on behalf of Tang UnityThree LLP (the “Offeror”) on 8 May 2009 (“Delisting Offer”),the

Company’s shares were delisted from the SGX-ST. (“Delisting Date”)

On 18 August 2011, the Company proposed a selective capital reduction to cancel the remaining

4,383,173 shares or 1.8% of the issued share capital of the Company (the “SCR Shares”) not

owned by the Non-Participating Shareholders (“Selective Capital Reduction”). The aggregate

sum of S$5,698,124.90 will be returned to the shareholders holding these shares

(“Participating Shareholders”) under the Selective Capital Reduction, on the basis of S$1.30

for each SCR Share held by each Participating Shareholder that is so cancelled as a result of

the Selective Capital Reduction.

On 8 September 2011, the Offeror agreed to pay an additional S$0.70 in cash for each SCR

Share, which effectively revised the amount that will be received by a Participating Shareholder

for the cancellation of each SCR Share to S$2.00 in cash.

The Securities Industry Council (“SIC”) has ruled that the Selective Capital Reduction falls within

the SIC’s definition of an exit offer in accordance with the Singapore Code on Take-Overs and

Mergers, and accordingly, an independent financial adviser will need to be appointed by the

Company pursuant to this Selective Capital Reduction.

CIMB Bank Berhad, Singapore Branch (“CIMB”) has been appointed as the independent

financial adviser to advise the Independent Directors of the Company.

APPENDIX 5LETTER FROM THE IFA TO THE INDEPENDENT DIRECTORS

OF C.K. TANG LIMITED

57

This Letter sets out, inter alia, our evaluation of the financial terms of the Selective Capital

Reduction and our advice thereon. It forms part of the circular dated 10 October 2011 issued by

the Company providing, inter alia, details of the Selective Capital Reduction and the

recommendations of the Independent Directors in respect thereof (together with the appendices

to the circular shall be collectively known herein as the “Circular”). The Non-Participating

Shareholders have agreed to abstain from voting on the resolution to approve the Selective

Capital Reduction and accordingly, only Participating Shareholders shall be entitled to vote on

the resolution to approve the Selective Capital Reduction.

Unless otherwise defined or the context otherwise requires, all terms defined in the Circular shall

have the same meanings herein. Any differences between the amounts and the totals thereof are

due to rounding. Accordingly, figures shown as totals may not be an arithmetic aggregation of the

figures that precede them.

2. TERMS OF REFERENCE

We have been appointed to advise on the financial terms of the Selective Capital Reduction and

whether Participating Shareholders should vote for or against the resolution to approve the

Selective Capital Reduction, pursuant to Rules 7.1 and 24.1(b) of the Code. We have not been

asked to conduct a valuation of the Company (and its assets) and we do not, whether expressly

or by implication, purport to do so. We have confined our evaluation to the financial terms of the

Selective Capital Reduction and our terms of reference do not require us to evaluate or comment

on the commercial risks and/or commercial merits of the Selective Capital Reduction or the

future prospects of the Company and its subsidiaries (the “Group”) or any of its associated

companies and we have not made such evaluation or comment. However, we may draw upon

the views of the Directors and/or the management of the Company or make such comments in

respect thereof (to the extent deemed necessary or appropriate by us) in arriving at our opinion

as set out in this Letter. We have not been requested, and we do not express any opinion on the

relative merits of the Selective Capital Reduction as compared to any other alternative

transaction. We have not been requested or authorized to solicit, and we have not solicited, any

indications of interest from any third party with respect to the issued and paid-up ordinary shares

in the capital of the Company (the “Shares”).

We have held discussions with the Directors and the management of the Company and have

examined and relied on publicly available information collated by us as well as information, both

written and verbal, provided to us by the Directors, the management of the Company and the

Company’s other professional advisers (especially the reports by Jones Lang LaSalle Property

Consultants Pte Ltd (the “Independent Property Valuers”) in their valuation summary dated 30

June 2011 (the “Valuation Summary”) and valuation report dated 3 October 2011 (the

“Valuation Report”) set out in Appendix 3 and 4 of the Circular respectively). We have not

independently verified such information, whether written or verbal, and accordingly we cannot

and do not warrant or make any representation (whether express or implied) regarding, or

accept any responsibility for, the accuracy, completeness or adequacy of such information.

However, we have made such enquiries and exercised our judgment as we deem necessary on

such information and have found no reason to doubt the reliability of the information.

We have relied upon the assurances of the Directors (including those who may have delegated

supervision of the Circular) that they have taken all reasonable care to ensure that the facts

stated and opinions expressed by them or the Company in the Circular are fair and accurate in

all material respects. The Directors have confirmed to us, that to the best of their knowledge and



58

belief, all material information relating to the Group, or its associated companies and the

Selective Capital Reduction have been disclosed to us, that such information is fair and accurate

in all material respects and that there are no other material facts and circumstances the omission

of which would make any statement in the Circular inaccurate, incomplete or misleading in any

material respect. The Directors have jointly and severally accepted such responsibility

accordingly.

We have not made any independent evaluation or appraisal of the assets and liabilities and of

the Group or of any of its associated companies and we have not been furnished with any such

evaluation or appraisal, except for the valuation report dated 30 June 2011 issued by

PricewaterhouseCoopers Corporate Finance Pte Ltd (“PwCCF”), the Valuation Summary and

Valuation Report dated 30 June 2011 and 3 October 2011 respectively issued by the

Independent Property Valuers, all three reports of which were issued in connection with the

Selective Capital Reduction. A copy of each of these three reports has been reproduced in

Appendix 2, 3 and 4 respectively in the Circular. With respect to such reports, we are not experts

in the evaluation or appraisal of the assets concerned and we have placed sole reliance on these

summary valuation reports for such asset appraisal and have not made any independent

verification of the contents thereof.

Our analysis and opinion are based upon market, economic, industry, monetary and other

conditions prevailing as at 3 October 2011 (the “Latest Practicable Date”), as well as the

information made available to us as at the Latest Practicable Date. Such conditions may change

significantly over a short period of time. Shareholders should take note of any documents

relevant to their consideration of the Selective Capital Reduction which may be released or

published by or on behalf of the Company, and the Offeror after the Latest Practicable Date.

In rendering our advice, we have not had regard to the specific investment objectives, financial

situation, tax position, risk profile or particular needs and constraints of any individual

Shareholder. As each Shareholder would have different investment objectives and profiles, any

Shareholder who may require specific advice in the context of his specific investment objectives

or portfolio should consult his stockbroker, bank manager, solicitor, accountant, tax adviser or

other professional adviser immediately.

The Company has been separately advised in the preparation of the Circular (other than this

Letter). We were not involved in and have not provided any advice in the preparation, review and

verification of the Circular (other than this Letter). Accordingly, we take no responsibility for, and

express no views (express or implied) on, the contents of the Circular (other than this Letter).

3. THE SELECTIVE CAPITAL REDUCTION

The Circular sets out, inter alia, the following key terms and conditions of the Selective Capital

Reduction:

3.1 Realise Value of Shares. The Company proposes to implement the Selective Capital

Reduction and cancel all the Shares held by the Shareholders, except those held by the

Non-Participating Shareholders, to provide the Participating Shareholders with an avenue to

realize the value of their Shares following the Delisting Offer.



59

3.2 Reduce Share Capital. The Selective Capital Reduction will involve reducing the share capital

of the Company from S$47,848,113.86 comprising 236,984,226 Shares to S$42,149,988.96

comprising 232,601,053 Shares, representing a reduction of the issued share capital of the

Company by approximately 1.8 per cent.

3.3 Process. The Selective Capital Reduction will be effected by:

(i) cancelling the amount of S$5,698,124.90 constituting part of the total paid-up share capital

of the Company held by the Participating Shareholders; and

(ii) cancelling 4,383,173 of the SCR Shares constituting part of the total issued share capital

of the Company held by the Participating Shareholders.

3.4 Cash Distribution. The aggregate sum of S$5,698,124.90 arising from the Selective Capital

Reduction (the “Cash Distribution”) will be returned to the Participating Shareholders, on the

basis of S$1.30 for each SCR Share held by each Participating Shareholder that is so cancelled

as a result of the Selective Capital Reduction.

Participating Shareholders will be entitled to any dividends declared, paid or made by the

Company, the record date for payment for which is on or before the Books Closure Date.

3.5 Offeror Proposal. On 8 September 2011, the Offeror wrote to and informed the Company that

it would pay an additional S$0.70 for each SCR Share held by the Participating Shareholder that

was so cancelled as a result of the Selective Capital Reduction, bringing the aggregate payment

of each SCR Share to S$2.00. The Offeror’s letter was sent to all Shareholders and provides that

such payment would be conditional upon the Selective Capital Reduction becoming effective.

The Offeror’s letter is set out in Appendix 1 to this Circular.

Collectively, the aggregate amount to be received by a Participating Shareholder for each

SCR Share is S$2.00 in cash (“SCR Consideration”), assuming the Selective Capital

Reduction becomes effective.

3.6 Shareholders Approval. Shareholders’ approval is accordingly being sought for the Selective

Capital Reduction. Under the Companies Act, Chapter 50 of Singapore (“Companies Act”), the

Selective Capital Reduction would require (i) a special resolution to be passed by the

Shareholders, and (ii) the approval and confirmation of the High Court of the Republic of

Singapore (“Court”) of the Selective Capital Reduction. The Non-Participating Shareholders will

not be voting on the special resolution relating to the approval of the Selective Capital Reduction

at the EGM (as defined below).

3.7 Extraordinary General Meeting. An Extraordinary General Meeting (“EGM”) will be held at

RELC International Hotel, 30 Orange Grove Road, Level 5 (Room 507), Singapore 258352 on

27 October 2011, as mentioned in the Circular, to seek Shareholders’ approval as per 3.6 above.

3.8 Rationale. The rationale for the Selective Capital Reduction is set out in Section 4 of the

Circular, parts of which has been reproduced in toto (and in italics for easy reference) below.

The Selective Capital Reduction is an internal corporate exercise that is proposed by the

Company for Participating Shareholders.



60

Following the delisting of the Company from SGX-ST, it has been difficult for the Participating

Shareholders to realise their investment in the Shares given the lack of a public market for the

Shares. With the Selective Capital Reduction, the Participating Shareholders will have an

opportunity to realise the value of their Shares.

If the Participating Shareholders do not approve the Selective Capital Reduction there is no

guarantee another opportunity will arise in the future for them to realise the value of their Shares.

Please read the Circular in its entirety in order to fully understand these key terms and the other

terms of the Selective Capital Reduction.

4. VALUATION REPORT PREPARED BY THE FINANCIAL ADVISER

For completeness, PwCCF, the financial adviser to the Company for the Selective Capital

Reduction, performed a valuation in connection with the Selective Capital Reduction, to estimate

the equity value of the Company as a group, (which would include the department store property

(“Department Store Property”). PwCCF’s valuation report, which has been appended as

Appendix 2 in the Circular, valued the Company at a fair market value per Share of S$1.13.

Section 3 of PwCCF’s valuation report, which provides a summary of the indicative valuation of

the Company, is shown below, and has been reproduced in toto (and in italics for easy reference)

below.

“SUMMARY OF THE INDICATIVE VALUATION OF CK TANG BASED ON SUM-OF-THE-

PARTS ANALYSIS

To determine the value of CK Tang, PwCCF has estimated the Fair Market value of CK Tang’s

retail businesses and relied on the market value of the Department Store Property as appraised

by the Independent Property Valuer.

We set out below the indicative valuation of CK Tang as follows:

S$ million


Market Value of Department Store Property 360.0


Less: Net Debt 100.9

Less: Minority Interest (0.003)

Equity Value of CK Tang 267.3

No. of Shares Outstanding (million) 236.99

Fair Market Value per Share (S$) 1.13

As computed above, the Fair Market Value Per Share based on the sum-of-the-parts valuation

of CK Tang is S$1.13.”



61

Shareholders are advised that the summary from PwCCF’s valuation report above should be

considered and read in conjunction with, and in the context of, the full text of the valuation report

as appended in Appendix 2 of the Circular. In particular, Shareholders should note that the

Department Store Property was then valued based on its existing use as a departmental store,

as stated in the Valuation Summary.

5. FINANCIAL EVALUATION OF THE TERMS OF THE SELECTIVE CAPITAL REDUCTION

5.1 Methodology

In assessing the financial terms of the Selective Capital Reduction, we have considered the

following:

(i) Valuation multiples of listed companies which are broadly comparable to the Group;

(ii) Net Tangible Asset and Revalued Net Tangible Asset of the Group;

(iii) Financial terms of comparable acquisitions of departmental stores in Malaysia and

Singapore;

(iv) Historical trading performance of the Shares;

(v) Comparison with the Delisting Offer;

(vi) Premia paid in selected delistings of companies listed on the SGX-ST;

(vii) Dividend track record of the Company and selected alternative investments; and

(viii) Other relevant considerations which have a significant bearing on our assessment.

General bases and assumptions

We have relied on the following general bases in our analysis:

(i) As at the Latest Practicable Date, the issued capital of the Company comprises of

236,984,226 Shares, with a share capital of S$47,848,113.86, of which 232,601,053 or

98.2% Shares are being held by the Non-Participating Shareholders, and the remaining

4,383,173 or 1.8% held by Participating Shareholders.

(ii) The underlying financial and market data used in our analysis, including securities prices,

trading volumes, free float data and foreign exchange rates have been extracted from

Bloomberg L.P., FactSet, MergerMarket, Thomson Research, SGX-ST and other public

filings as at the Latest Practicable Date. CIMB makes no representation or warranties,

express or implied, as to the accuracy or completeness of such information.



62

Valuation Ratios

We have applied the following valuation multiples in our analysis:

Valuation Multiples General Description

P/E

“P/E” or “price-to-earnings” multiple illustrates the market price of a

company’s shares relative to its earnings per share. The P/E multiple is

affected by, inter alia, the capital structure of a company, its tax position

as well as its accounting policies relating to depreciation and intangible

assets.

EV/EBITDA

“EV” or “enterprise value” is the sum of a company’s market

capitalization, preferred equity, minority interests, short and long term

debt less its cash and cash equivalents.

“EBITDA” stands for earnings before interest, tax, depreciation and

amortisation expenses, inclusive of share of associate’s income and

excluding exceptional items.

The EV/EBITDA multiple illustrates the market value of a company’s

business relative to its pre-tax operating cashflow performance, without

regard to the company’s capital structure.

P/NTA

“P/NTA” or “price-to-NTA” ratio is the ratio of the market capitalisation of

a company relative to its book net tangible asset. The P/NTA ratio is

affected by differences in their respective accounting policies including

their depreciation and asset valuation policies.

The NTA of a company provides an estimate of the value of a company

assuming a hypothetical sale of all its tangible assets and repayment of

its liabilities and obligations, with the balance being available for

distribution to its shareholders.

It is an asset-based valuation methodology and this approach is

meaningful to the extent that it measures the value of each share that is

backed by the tangible assets of a company.

5.2 Shares of the Company have been delisted

Shareholders should note that the Shares have been delisted from the SGX-ST, and that the

following are the implications or consequences which may arise as a result of the delisting of the

Shares:

(i) The delisted Shares are generally valued at a discount to the shares of comparable listed

companies as a result of lack of marketability;

(ii) Following the delisting of the Shares, it is likely to be difficult for the Company’s

shareholders to sell their Shares in the absence of a public market for the Shares as there

is no arrangement for such Shareholders to exit, other than provided for in this Selective

Capital Reduction; and

(iii) As the Company has been delisted from the Official List of the SGX-ST, it is no longer

obliged to comply with the requirements of the SGX-ST, in particular the continuing

corporate disclosure requirements under Chapter 7 and Appendices 7.1 to 7.4 of the



63

Listing Manual, and Shareholders no longer enjoy the same level of protection,

transparency and accountability afforded and imposed on the Company by the Listing

Manual. Nonetheless, as a company incorporated in Singapore, the Company will still need

to comply with the Companies Act and its memorandum and articles of association and the

interests of Shareholders will be protected to the extent provided for by the Companies Act.

However, our assessment of the financial terms of the Selective Capital Reduction necessitates

the review and analysis of publicly available information, which would include information of

other listed companies. Accordingly, when making a comparison with other listed companies,

shareholders should note the implications or consequences of the delisted status of the Shares

as mentioned above.

5.3 Comparable Companies Analysis

We have compared the valuation multiples of the Company implied by the SCR Consideration

with those of comparable listed companies (the “Comparable Companies”).

A brief description of the Comparable Companies is set out below.

Companies

Market

Capitalization

(S$ mil)

Sales

(S$ mil) Key Activities

Isetan Singapore Limited

(“Isetan”)

132.0 334.1 • Operates departmental stores in

Singapore.

• Trades general merchandise with

wholesale and retail operators.

Metro Holdings Limited

Singapore (“Metro

Holdings”)

547.9 175.2 • Operates departmental stores in

Singapore

• Develops and invests in properties

• Undertakes building contract works

• Distributes building and

construction materials

Source: Bloomberg L.P. and CIMB analysis

We wish to highlight that the Comparable Companies above are not exhaustive and they differ

from the Company in terms of, inter alia, market capitalization, size of operations, composition

of business activities, asset base, geographical spread, track record, financial performance,

operating and financial leverage, risk profile, liquidity, accounting policies, future prospects and

other relevant criteria.



64

The valuation multiples of the Comparable Companies set out below are based on their

respective last transacted share prices as at the Latest Practicable Date.

Historical


EV/EBITDA(1),(2)

(x)

P/NTA(3)

(x)

P/E(4)

(x)

Isetan 7.0x 0.7x 10.3x

Metro Holdings 3.8x 0.4x 6.1x

Mean 5.4x 0.6x 8.2x

Median 5.4x 0.6x 8.2x

Company

(Implied by the SCR Consideration)

33.2x 2.0x 67.7x

Source: Bloomberg L.P. and CIMB analysis

Notes:

(1) Based on earnings and EBITDA over last twelve months. EBITDA figures exclude exceptional items.

(2) The EV of the respective Comparable Companies are based on (i) their market capitalization as at the Latest

Practicable Date; (ii) their preferred equity, minority interests and net debt (if any) as set out in their respective latest

available financial statements as at the Latest Practicable Date.

(3) The P/NTA multiples of the Comparable Companies are based on their respective NTA values as set out in their

latest available results as at the Latest Practicable Date.

(4) Calculated as the last twelve months (“LTM”) P/E multiple.

The valuation multiples of the comparable companies above do not incorporate the premium

typically required to acquire control as they reflect the trades of non-controlling stakes.

We note that at the SCR Consideration:

(i) The P/E multiple of the Shares implied by the SCR Consideration is significantly higher

than the range of the P/E multiples of the Comparable Companies (on a historical basis);

(ii) The EV/EBITDA multiple of the Shares implied by the SCR Consideration is significantly

higher than the range of the EV/EBITDA multiples of the Comparable Companies (on a

historical basis);

(iii) The P/NTA multiple of the Shares implied by the SCR Consideration is significantly higher

than the range of the P/NTA multiple of the Comparable Companies.

This is despite the implications or consequences arising from the delisted status of the Shares.

5.4 Analysis of the NTA and RNTA of the Group

It is necessary to make a distinction between NTA and RNTA for the purpose of applying the

asset based valuation approach. NTA as reflected in the accounts of a company is based on the

value of a company’s net assets as determined by accounting procedures and does not

necessarily reflect the prevailing market value of the underlying assets. On the other hand,

RNTA is determined after adjusting for the revaluation of a company’s key assets based on their

estimated current market values.



65

Analysis of the NTA of the Group

Based on the Group’s latest audited consolidated financial statements for FY2011, the NTA of

the Group was approximately S$241.5 million or approximately S$1.02 per Share.

The table below sets out the premium of the SCR Consideration to the NTA per Share as at

FY2011:

As at FY2011

Implied Premium in

the SCR Consideration

NTA S$241.5 million —

NTA per Share S$1.02 96.2%

Source: Group’s audited financial statements for FY2011 and CIMB analysis

Based on the above, we note that the SCR Consideration represents a significant premium of

approximately 96.2% to the NTA per Share as at FY2011.

None of the assets of the Group were revalued in the above NTA analysis of the Group, save for

the Department Store Property, which was revalued to S$360 million in March 2011 for FY2011.

We note that the assets of the Group relate mainly to (i) property, plant and equipment, (ii) cash

and bank balances, and (iii) inventory. The material component of property, plant and equipment

relates to the freehold land on which the departmental store of the Group is situated.

Analysis of the RNTA of the Group

In carrying out our analysis of the RNTA of the Group, we will consider (i) the RNTA of the Group

based on the Department Store Property’s existing use, and (ii) the RNTA of the Group based

on the value of the Department Store Property as apportioned from the Independent Property

Valuer’s opinion of the market value of the entire site comprising Lots 972L, 973C, 974M and

975W Subdivision 27 (“Tang Plaza Site”) on the assumption that it is a vacant redevelopment

site and such other terms as set out in the Valuation Report. This value of the Department Store

Property is obtained from the Valuation Report (the “Redevelopment Site Value”).

From the Valuation Summary, the market value of the Department Store Property for its existing

use is S$360 million. From the Valuation Report, the estimated Redevelopment Site Value of the

Department Store Property is S$350 million (there are 2 estimated values in the report, arrived

at based on different scenarios, and this is the higher of both values).

(i) RNTA of the Group based on the Department Store Property’s existing use

Based on the Group’s latest audited consolidated financial statements for FY2011, the net

book value of the Department Store Property is S$360 million. Adopting the market value

of the Department Store Property as disclosed in the Valuation Summary, there will be no

revaluation surplus or deficit arising in respect of the Department Store Property, as the net

book value of the Department Store Property approximates the market value of the

Department Store Property for its existing use. As a result, the RNTA of the Group is the

same as the NTA of the Group as at FY2011, this being S$241.5 million.



66

The table below sets out the computation of the RNTA of the Group and the premium of the

SCR Consideration to the RNTA per Share based on the Department Store Property’s

existing use after taking into account adjustments for any relevant assets and liabilities as

follows:

NTA of the Group as at FY2011 (S$ million) 241.5

Add/(Less): Gross revaluation surplus/(deficit) on Department Store Property —

RNTA of the Group as at FY2011 (S$ million) 241.5

RNTA per Share as at FY2011 (S$) 1.02

Premium of SCR Consideration to RNTA per Share (%) 96.2

Source: Group’s audited financial statements for FY2011, Valuation Summary and CIMB analysis

Consequently, the RNTA per share of the Group as at FY2011 based on the Department

Store Property’s existing use is S$1.02 per share, and the SCR Consideration represents

a 96.2% premium to the RNTA per share of the Group based on the Department Store

Property’s existing use.

(ii) RNTA of the Group based on the Redevelopment Site Value of the Department Store

Property

In connection with the Selective Capital Reduction, the Company has commissioned the

Independent Property Valuers to independently estimate the value of the Department Store

Property as apportioned from their opinion of the market value of the Tang Plaza Site on

the assumption that it is a vacant redevelopment site as at 30 June 2011, after deducting

development charges, in line with the permissible parameters and guidelines, and subject

to formal planning approval under the Planning Act (Cap. 232).

In the Valuation Report, the Independent Property Valuer considered two scenarios, both

of which are described in full in the Valuation Report. One scenario gives a higher

estimated Redevelopment Site Value of the Department Store Property. Save for the

Department Store Property which has been valued in accordance with the Valuation

Report, the other assets of the Group have not been revalued for the specific purpose of

determining the RNTA of the Group in this subsection.

In the Valuation Report, the Independent Property Valuers have stipulated Tang Plaza

Site is zoned “Hotel”. The Independent Property Valuers have also cited Circular No.

URA/PB/2008/01-CUDD dated January 14, 2008, and reproduced an extract of that

circular, in the Valuation Report, which provides that “As a general rule, hotels will not be

allowed to be converted to other uses where:

(a) The hotels are located on sites zoned for hotel use in the Master Plan; and

(b) The hotels are located within sites zoned for other uses but where there is a specific

planning or sales requirement for a minimum hotel quantum to be provided.”

Please read and consider the Valuation Report in its entirety.



67

For the purposes of our analysis of the RNTA of the Group based on the Redevelopment

Site Value of the Department Store Property, we have used the higher estimated

Redevelopment Site Value of the Department Store Property.

From the Valuation Report, this higher estimated Redevelopment Site Value of the

Department Store Property is S$350 million. Based on the Group’s latest audited

consolidated financial statements for FY2011, the net book value of the Department Store

Property is S$360 million. Therefore, there will be a revaluation deficit of S$10 million

arising from the Redevelopment Site Value of the Department Store Property.

The table below sets out the computation of the RNTA of the Group and the premium of the

SCR Consideration to the RNTA per Share based on the Redevelopment Site Value of the

Department Store Property (and using the higher estimated value in the Valuation Report),

after taking into account adjustments for any relevant assets and liabilities as follows:

NTA of the Group as at FY2011 (S$ million) 241.5

(Less): Gross revaluation deficit arising from the Redevelopment Site Value of the

Department Store Property (S$ million)

(10.0)

RNTA of the Group as at FY2011 (S$ million) 231.5

RNTA per Share as at FY2011 (S$) 0.98

Premium of SCR Consideration to RNTA per Share (%) 104.7

Source: Group’s audited financial statements for FY2011, Valuation Report dated 3 October 2011 and CIMB

analysis

Based on the table above, the RNTA per Share as of FY2011 is S$0.98. The SCR

Consideration of S$2.00 represents a premium of approximately 104.7% to the RNTA per

Share as at FY2011.

The Independent Directors should note that, although the RNTA per Share based on the

Redevelopment Site Value of the Department Store Property forms part of our analyses,

whether the value is realizable or not in the market is at best uncertain, and more likely than

not, will not be realised in the forseeable future in the light of the intention of the Offeror

stated below. In the Appendix 1 of the Circular, which reproduces the letter to the

Shareholders dated 18 August 2011, the Company states that the “Non-Participating

Shareholders have confirmed that they have no plans for the redevelopment of the portions

of property at 310/320 Orchard Road, Singapore 238864/238865 which are owned by the

Company and its subsidiaries, in the forseeable future”. In that letter, the “Non-Participating

Shareholders” are the Offeror, Tang UnityTwo LLP, Kerith Holdings LLP and TWK. It is also

stated on

(a) page 10 of the Circular that the Offeror “currently has no intention to (i) propose any

major changes to the business of the Company; (ii) redeploy the fixed assets of the

Company; or (iii) discontinue the employment of any of the employees of the Group,

other than in the ordinary course of business.”; and



68

(b) page 10 of the Circular that TWS and TWK currently have no intention of (i)

discontinuing the traditional retail business started by their father, (ii) disposing of the

Department Store Property, (iii) redeveloping the Department Store Property, or (iv)

entering into any arrangements for a real estate investment trust in respect of the

Department Store Property.

Please note that both the market value of the Department Store Property on an existing use

basis or the Redevelopment Site Value of the Department Store Property and the value of

the other assets of the Company may fluctuate depending on prevailing market conditions.

Shareholders should also note that the analysis of the RNTA of the Group based on the

Redevelopment Site Value of the Department Store Property should be considered and

read in conjunction with the entirety of the Valuation Report.

5.5 Precedent Transaction Analysis

We have identified and reviewed the financial terms of (i) successful acquisitions of

departmental store operators over the last 5 years prior to the Latest Practicable Date and for

which information is publicly available (the “Precedent Departmental Store Transactions”)

and (ii) successful privatisation or delistings of real estate companies over the last 2 years prior

to the Latest Practicable Date and for which information is publicly available (the “Precedent

Real Estate Transactions”)

Precedent Departmental Store Transactions

A brief description of the target companies comprising the Precedent Departmental Store

Transactions is set out below:

Target Acquirer

Transaction

Type

Year of

Completion

Location

of Target

Company’s

retail

operations

Deal Value

(S$ million)

Total Sales

of Target

Company

(S$ million)

Robinson

and

Company

Limited

(“Robinson”)

ALF Global

Private

Limited

Privatization 2008 Singapore 666.7 388.0

Courts

Singapore

Limited

(“Courts”)

Singapore

Retail Group

Ltd

Acquisition

of

controlling

stake

2007 Singapore 180.7 345.9

Parkson

Malaysia

Sdn Bhd

(“Parkson”)

East Crest

International

Limited

Acquisition

of

controlling

stake

2007 Malaysia 85.2 392.1

Source: Mergermarket and CIMB analysis



69

A comparison of the Selective Capital Reduction against the Precedent Departmental

Transactions is set out below:

Target

Deal Value

(S$ mil)

P/NTA(1)

(x)

EV/Sales(1)(2)

(x)

EV/EBITDA(1)(2)

(x)

P/E(1)

(x)

Robinson 666.7 2.4x 1.8x 19.4x 16.7x

Courts 180.7 0.8x 0.5x n/a 5.9x

Parkson 85.2 n/a 0.2x 0.2x 8.3x

Mean 1.6x 0.8x 9.8x 10.3x

Median 1.6x 0.5x 9.8x 8.3x

Company

(Implied by the SCR

Consideration)

2.0x 3.7x 33.2x 67.7x


Notes:

(1) Based on earnings, sales, net tangible assets and EBITDA over last twelve months prior to the relevant

announcement dates for each of the Precedent Departmental Store Transactions.

(2) The EV of the respective target companies above were based on (i) their implied equity value based on the

respective offer price; (ii) their preferred equity, minority interests and net debt (if any) as set out in their respective

latest available financial statements as at the relevant announcement date for each of the Precedent Departmental

Store Transactions.

Precedent Real Estate Transactions

A brief description of the target companies comprising the Precedent Real Estate Transactions

is set out below:

Target Acquirer

Transaction

Type

Year of

Completion

Location

of Target

Company’s

operations

Deal Value

(S$ million)

Total Sales

of Target

Company

(S$ million)

Allgreen

Properties

Ltd

(“Allgreen”)

Brookvale

Investments

Pte Ltd

Privatization 2011 Singapore 1,177.2 883.8

MCL Land

Limited

(“MCL

Land”)

Hongkong

Land

Holdings

Limited

Delisting 2010 Singapore 165.6 35.8

Soilbuild

Group

Holdings

Limited

(“Soilbuild”)

Dolphin

Acquisitions

Pte Ltd

Delisting 2010 Singapore 195.3 106.1

Source: Company offering documents and CIMB analysis



70

A comparison of the Selective Capital Reduction against the Precedent Real Estate

Transactions is set out below. Note that for the purposes of our analysis, we have only take into

consideration the P/NTA and P/RNTA ratios, as we deem that these ratios are the most relevant

in the context of our analysis.

Target

Deal Value

(S$ mil)

P/NTA(1)

(x)

P/RNTA(1)

(x)

Allgreen 1,177.2 1.0x 0.8x

MCL Land 165.6 0.9x 0.7x

Soilbuild 195.3 1.3x 1.1x

Mean 1.1x 0.9x

Median 1.0x 0.8x

Company (Implied by the SCR Consideration) 2.0x 2.0x(2)


Notes:

(1) Based on earnings, sales, net tangible assets, revalued net tangible assets and EBITDA over last twelve months

prior to the relevant announcement dates for each of the Precedent Real Estate Transactions.

(2) The P/RNTA multiple as implied by the SCR Consideration is based on Scenario 2, as set out in the Valuation

Report. We have used Scenario 2 for the purposes of our Precedent Real Estate Transaction analysis as this

scenario gives a higher value for the Department Store Property when compared with Scenario 1.

We wish to highlight that the Precedent Departmental Store Transactions and Precedent Real

Estate Transactions differ from the Selective Capital Reduction and may not be directly

comparable to the Selective Capital Reduction, in terms of, inter alia, transaction structure,

period of transaction and the characteristics of the target company and other relevant criteria. As

such, any comparison made is necessarily limited and merely serves only as an illustrative

guide.

(i) The implied EV/EBITDA and P/E multiples of the Company based on the SCR


based on the Precedent Departmental Store Transactions analysis above;

(ii) The implied EV/Sales multiple of the Company based on the SCR Consideration is higher


Transactions analysis above;

(iii) The implied P/NTA multiple of the Company based on the SCR Consideration is higher


Departmental Store analysis above; and

(iv) The implied P/NTA and P/RNTA multiples of the Company based on the SCR

Consideration is higher than the P/NTA and P/RNTA multiples of the target companies

based on the Precedent Real Estate Transaction analysis above.




71

5.6 Share Price Performance of the Company

We have compared the SCR Consideration to the historical price performance of the Shares and

considered the historical trading volume of the Shares prior the Delisting Date.

5.6.1 Market Price Performance and Trading Activity of the Shares

We set out below (i) the premia implied by the SCR Consideration over the historical volume

weighted average transacted price (“VWAP”) of the Shares; (ii) the historical trading volume of

the Shares for the 10-year period prior to and up until the Delisting Date; and (iii) the Shares

purchased by the Offeror for the period after the Delisting Date and up until the Latest

Practicable Date.

Price

Premium of

SCR

Consideration

over Price

Highest

closing

price

Lowest

closing

price

Average

daily

trading

volume(1)

Average daily

trading volume

as a percentage

of total number

of shares as at

the Latest

Practicable

Date(2)

(S$) (%) (S$) (S$) (%)

Period prior to and up until the Delisting Date

10-year VWAP 0.448 346.04 0.900 0.150 164,046 0.07

5-year VWAP 0.605 230.79 0.900 0.360 205,147 0.09

3-year VWAP 0.717 178.85 0.900 0.450 175,851 0.07

3-month prior to

Delisting Date

0.824 142.62 0.885 0.680 132,357 0.06

1-month prior to

Delisting Date

0.848 135.84 0.885 0.820 57,889 0.02

Last traded price

on Delisting Date

0.830 140.96 0.830 0.825 225,000 0.09

Delisting Offer price 0.830 140.96 n/a n/a n/a n/a



72

Price

Premium of

SCR

Consideration

over Price

Highest

price

Lowest

price

Number of

Shares

purchased

Average daily

trading volume

as a percentage

of total number

of shares as at

the Latest

Practicable

Date(2)

(S$) (%) (S$) (S$) (%)

Share purchase by the Offeror after the Delisting Date and up until the Latest Practicable Date

Share purchase

− 4 Nov 2009

0.830 140.96 n/a 623,100 0.26

Share purchase

− 25 Nov 2009

0.830 140.96 n/a 127,000 0.05

Share purchase

− 31 Mar 2010

0.830 140.96 n/a 96,001 0.06

Share purchase

− 15 Jul 2010

0.830 140.96 n/a 77,000 0.03

Share purchase

− 8 Sep 2010

0.830 140.96 n/a 21,000 0.01

Share purchase

− 31 Dec 2010

0.830 140.96 n/a 10,000 0.00

Share purchase

− 16 Feb 2011

0.830 140.96 n/a 1,750 0.00

Source: Bloomberg L.P., Company information and CIMB Analysis

Notes:

(1) The average daily trading volume of the Shares is calculated based on the total volume of Shares traded during the

relevant period divided by the number of days in which the Shares were traded during that period.

(2) Total number of ordinary shares of the Company as at the Latest Practicable Date is 236,984,226.

We note the following:

(i) The Shares have never traded at or above the SCR Consideration during the preceding 10

years prior to the Delisting Date;

(ii) The SCR Consideration represented a significant premium of 122.22% over the highest

closing price of the Shares of S$0.900 over the last 10 years prior to the Delisting Date;

(iii) During the 3-months and 1-month period preceding the Delisting Date, the SCR

Consideration represented a significant premium of between approximately 142.62% and

135.84% respectively over the corresponding VWAP of the Shares;

(iv) The SCR Consideration represented a significant premium of approximately 140.96% over

the closing price of the Shares on the last traded Market Day prior to Delisting Date;

(v) The SCR Consideration represented a significant premium of approximately 140.96% over

the Delisting Offer price;



73

(vi) The SCR Consideration represented a significant premium of approximately 140.96% over

the transacted price of the shares in the period after the Delisting Date and up until the

Latest Practicable Date; and

Shareholders should also note that the Shares have been delisted from the SGX-ST and

that although there has been some transactions in the Shares subsequent to the Delisting

Date, there is no assurance that there will be a ready market for the Shares and hence

Shareholders may not be able to sell their Shares (or at prices they expect) in the future

when they wish to do so.

5.7 Comparison with the Delisting Offer

On 8 May 2009, the Offeror made the Delisting Offer for all the Shares in the capital of the

Company that the Offeror and other Non-Participating Shareholders does not already own. The

price offered by the Offeror in this Delisting Offer was S$0.83 in cash for each of the Shares

pursuant to this corporate exercise.

The table below sets out a comparison of the financial terms of the Delisting Offer and the

Selective Capital Reduction:

Delisting Offer

Selective

Capital

Reduction

Relevant Offer Price S$ 0.83 S$ 2.00

Implied EV/Sales 1.4x 3.7x

Implied EV/EBITDA 59.5x 33.2x

Implied P/E n.m(1) 67.7

Implied P/NTA 0.9x 2.0x

Implied P/RNTA 0.9x 2.0x

Note:

(1) This P/E multiple is not meaningful as the Company incurred a loss after taxation in the financial year ended

31 March 2009.

Based on the above, we note that:

(i) The SCR Consideration of S$2.00 is significantly higher than the Delisting Offer price of

S$0.83; and

(ii) The SCR Consideration is more favourable when compared to the Delisting Offer in terms

of Implied EV/Sales, Implied P/E, Implied P/NTA and Implied P/RNTA, but less favourable

in terms of Implied EV/EBITDA. However, Shareholders should note that the Company

incurred a loss in the financial year ended 31 March 2009.



74

Shareholders should note that the above comparison of the Delisting Offer and the Selective

Capital Reduction offer did not take into consideration the market conditions then prevailing, the

general sentiments of market with regards to shares as well as the relative demand for shares

of the particular industry, actual or perceived growth prospects of the industry and the Company

concerned as well as the financial performance or expected financial performance during the

period.

5.8 Precedent Delistings Analysis

For the purpose of providing an illustrative guide as to whether the financial terms of the

Selective Capital Reduction is attractive, we have compared the financial terms of the Selective

Capital Reduction with those in recent successful delisting of companies listed on the SGX-ST,

as well as privatization of companies where the offeror already has control of the target, in the

last 2 years (“Precedent Delistings”).

Shareholders should note that in the Selective Capital Reduction, the Offeror already has

statutory control of the Company, and that the Company has already been delisted subsequent

to the Delisting Offer. This analysis merely serves as an analysis and a basis for us to form an

opinion on the financial terms of the Selective Capital Reduction when compared with Precedent

Delistings, and this analysis should be considered in conjunction with and in the context of the

implications or consequences of delisted shares as mentioned in Section 5.2 of this Letter.

We wish to highlight that the premium that an offeror pays in any particular delisting offer

depends on various factors such as the potential synergy that the offeror can gain by acquiring

the target, the presence of competing bids for the target, prevailing market conditions and

sentiments, attractiveness and profile of the target’s business and assets, size of consideration

and existing and desired level of control in the target. The comparison below is made without

taking into consideration the underlying liquidity of the shares and the performance of the shares

of the relevant companies above. Further, the list of target companies involved in the Precedent

Delistings set out in the analysis above are not directly comparable with the Company in terms

of size of operations, market capitalization, business activities, asset base, geographical spread,

track record, accounting policy, financial performance, operating and financial leverage, future

prospects and other relevant criteria. Hence, the comparison of the Selective Capital Reduction

with the Precedent Delistings set out above is for illustration purpose only. Conclusion drawn

from the comparisons made may not reflect any perceived market valuation of the Company.



75

A summary of the relevant financial terms of the Precedent Delistings is set out below.

Premium/(Discount) prior to Pre-

Announcement Share Price(1)

P/NTA

Implied

by Offer

Price(2)

Date of

Announcement

Last

transacted

price

(%)

1-month

(%)

3-month

(%)

Privatizations

China Video Surveillance

Limited

2-Feb-10 140.9 132.9 91.9 0.8x

Avaplus Ltd 12-Mar-10 122.2 122.1 109.5 1.1x

Jurong Cement Limited(3) 25-Jan-10 95.3 97.5 119.3 0.8x

Eng Kong Holdings Limited 02-Jun-10 37.2 20.9 19.1 1.2x

RSH Limited 23-Jul-10 41.7 N/A N/A 1.9x

Kim Eng Holdings Limited(4) 06-Jan-11 55.8 62.6 67.9 1.8x

Passion Holdings Limited 09-Mar-11 23.8 30.7 27.5 1.1x

Sinomem Technology Limited 05-Mar-11 28.4 33.8 34.6 1.3x

JK Yaming International

Holdings Ltd

04-May-11 4.8 4.7 7.5 1.5x

All Green Properties Ltd 23-May-11 39.1 40.6 45.3 1.0x

Delistings

Man Wah Holdings Ltd 05-Jun-09 9.5 10.8 32.7 1.0x

Giant Wireless Technology

Limited

30-Jun-09 (26.0) (32.5) (41.6) 2.9x

Evergro Properties Limited 12-Jul-09 16.0 39.6 56.0 1.8x

China Precision Technology

Ltd

03-Sep-09 19.2 25.8 49.3 0.9x

Chartered Semiconductor

Manufacturing Ltd.(6)

7-Sep-09 22.9 41.0 64.0 1.1x

Iconic Holdings Limited 26-Oct-09 9.7 18.1 18.1 0.9x

Aqua-Terra Supply Co. Ltd(7) 8-Dec-09 33.6 38.6 31.5 1.0x

SSH Corporation Ltd.(8) 8-Dec-09 19.2 21.4 27.4 1.4x

China Lifestyle Food &

Beverages Group Limited

09-Dec-09 22.8 12.7 2.9 0.8x

Keda Communications Ltd. 25-Feb-10 47.1 43.7 56.3 0.7x

Ionics EMS, Inc. 02-Mar-10 — — (17.1) 1.9x

Jurong Cement Limited 06-Apr-10 95.3 97.5 119.3 1.4x

Zhongguo Pengjie Fabrics

Limited

10-May-10 58.6 57.5 52.3 0.7x

Eastern Asia Technology

Limited

04-Aug-10 31.4 39.0 38.1 0.6x



76

Premium/(Discount) prior to Pre-

Announcement Share Price(1)

P/NTA

Implied

by Offer

Price(2)

Date of

Announcement

Last

transacted

price

(%)

1-month

(%)

3-month

(%)

MCL Land Limited 26-Aug-10 25.6 27.3 31.4 0.9x

Soilbuild Group Holdings Ltd 21-Sep-10 13.5 15.6 18.5 1.3x

IDT Holdings (Singapore)

Limited(5)

05-Oct-10 14.9 17.4 20.0 0.9x

Reyoung Pharmaceutical

Holdings Limited

30-Nov-10 23.3 20.5 25.9 1.6x

Map Technology Holdings

Limited

03-Dec-10 30.0 33.1 18.0 1.6x

Financial One Corp 22-Dec-10 15.5 18.9 19.9 0.7x

Time Watch Investments

Limited

22-Mar-11 14.9 28.0 35.7 1.3x

EDMI Limited 03-Jun-11 14.1 24.1 22.9 1.5x

Mean 35.5 38.1 38.8 1.2x

Median 23.8 29.4 31.5 1.1x

Company (Implied by the

SCR Consideration over the

Delisting Offer Price)(9)

18-Aug-11 141.0 136.1 142.6 2.0x

Source: Relevant offer documents and Bloomberg L.P.

Notes:

(1) Market premia/discounts calculated relative to the closing price of the respective target companies one day prior

to the respective announcement dates and VWAP of the 1-month and 3-month period prior to the respective

announcement dates.

(2) The P/NTA ratio is based on the offering document of the respective target companies as implied by the offer price.

(3) The market premia were computed based on the final offer price of S$2.50 for each share and prices over the

relevant periods prior to the first voluntary unconditional offer announcement on 18 December 2009.

(4) The market premia were computed based on prices over the relevant periods prior 16 December 2010 being the

date which the holding announcement in relation to a potential offer was announced.

(5) The market premia were computed based on the offer price of S$0.361 for each share after adjusting for the

dividend for the financial year ending December 2011 of S$0.011 per Share, which the offeror has renounced in

favour of the accepting shareholders.

(6) The market premia were computed based on prices over the relevant periods prior to 29 May 2009 being the date

which the holding announcement in relation to a potential offer was announced.

(7) The market premia were computed based on the consideration of S$0.2300 in cash and 0.1250 new shares in KS

Energy Services Limited at the corresponding implied KS Energy share price as at the latest practicable date of the

circular issued in relation to the Selective Capital Reduction of arrangement.

(8) The market premia were computed based on the consideration of S$0.1600 in cash and 0.1000 new shares in KS

Energy at the corresponding implied KS Energy share price as at the latest practicable date of the circular issued

in relation to the Selective Capital Reduction of arrangement.

(9) The Company’s pre-announcement share price refers to the last transacted price of S$0.83 on 6 August 2009,

being the last day that the Company’s shares were publicly traded on SGX-ST pursuant to the Delisting Offer.



77

We note that the market price premia multiples implied by the SCR Consideration are

significantly above the corresponding mean and median premia of the Precedent Delistings,

while the P/NTA multiple implied by the SCR Consideration is above the corresponding mean

and median P/NTA multiple of the Precedent Delistings.


5.9 Dividend Analysis

For the purpose of assessing the Selective Capital Reduction, we have considered the historical

dividend record of the Shares for the last 5 financial years from FYE07 to FYE11 and compared

them with the returns which a Shareholder may potentially obtain by re-investing the proceeds

from the Selective Capital Reduction in other selected alternative equity investments.

5.9.1 Historical dividends paid by the Company

We note that no dividends has been paid from FYE07 to FYE11. Moreover the Company

incurred losses in each of the fiscal years from FYE07 to FYE10.

5.9.2 Investment in selected alternative investments

Shareholders who vote in favour the Selective Capital Reduction may re-invest the proceeds

from the Selective Capital Reduction in selected alternative equity investments including the

equity of the Comparable Companies and/or a broad market index instrument such as the STI

Exchange Traded Fund (“STI ETF”).

For illustration purpose, the dividend yields of these selected alternative investments based on

their ordinary dividends declared in respect of their respective last financial year are as follows.

Dividend Yield(1)


Isetan 2.36%

Metro Holdings 2.56%

Mean 2.46%

Median 2.46%

STI ETF 2.04%

Source: Bloomberg L.P., annual reports of the Comparable Companies and CIMB analysis

Note:

(1) Dividend yield of each selected alternative investment is computed as the ordinary dividend per share divided by

the closing market price on the Latest Practicable Date (or where there was no trading on such date, the last

available closing market price prior thereto).

The above analysis suggests that a shareholder who receives the SCR Consideration may

potentially experience an increase in investment income if he re-invests the proceeds from the

SCR Consideration in the shares of the Comparable Companies or the STI ETF. This is on the



78

assumption that the Comparable Companies and the STI ETF maintain their respective net

dividend per share at the same level as that set out above.

We wish to highlight that the above dividend analysis serves only as an illustrative guide and is

not an indication of the Company’s future dividend policy nor that of any of the Comparable

Companies or the STI ETF. Furthermore, an investment in the equity of the Comparable

Companies or the STI ETF also presents different risk-return profiles compared to an investment

in the Shares. Moreover, there is no assurance that the Company or any of the above selected

alternative investments will continue to pay dividends in the future or maintain the level of

dividends paid in past periods.

5.10 Other Considerations

5.10.1 Offeror already has statutory control of the Company

As at the Latest Practicable Date, the Offeror owns or controls 232,601,053 Shares,

representing approximately 98.2 per cent. of the existing issued share capital of the Company,

and has statutory control of the Company, which places the Offeror in a position to significantly

influence, inter alia, the management, operating and financial policies of the Company and is in

a position to pass all ordinary and special resolutions on matters in which the Offeror and its

concert parties do not have an interest, at general meetings of Shareholders.

5.10.2 Liquidity of Shares

The Shares have been delisted from the SGX-ST. Shareholders should note that shares of

unquoted companies are generally valued at a discount to the shares of comparable listed

companies due to the lack of marketability.

Following the Delisting Offer, it may have been difficult for Participating Shareholders to realize

their investment in the Shares given the lack of a public market for the Shares. The Selective

Capital Reduction however, provides an opportunity for Participating Shareholders to realize the

value of their Shares at a premium to the shares of comparable listed companies.

We have not been provided with any information that leads us to believe that another opportunity

will arise in the future for the Participating Shareholders to realize the value of their Shares.

Hence, if the Participating Shareholders do not approve the Selective Capital Reduction, there

is no assurance that another opportunity will arise in the future for them to realize the value of

their Shares. In this connection, it is relevant to know that in the Offeror’s letter to the

Company dated 8 September 2011, it is stipulated that

“We wish to state that this will be our final gesture of goodwill. In the event the Selective

Capital Reduction is not approved we will be content for the relevant shareholders

holding in total 1.8% of the issued share capital to remain as Minority shareholders of the

Company indefinitely.”

The above extract has been reproduced in toto and implies that the Offeror will not make

any further offers to the Participating Shareholders with regards to the SCR Shares, after

the Selective Capital Reduction.



79

6. SUMMARY OF ANALYSIS

In arriving at our advice to the Independent Directors on the Selective Capital Reduction, we

have considered, inter alia, the following factors which should be considered and read in the

context of the full text of this Letter:

(i) The P/E, EV/EBITDA and P/NTA multiples as implied by the SCR Consideration is

significantly higher than the mean and median of these multiples of the Comparable

Companies (on a historical basis);

(ii) The SCR Consideration represents a premium of 96.2% over the NTA of the Group as at

FY2011, and represents a premium of 96.2% and 104.7% respectively over the Revalued

NTA of the Group on an existing use basis and on a redevelopment basis, as at FY2011;

(iii) The implied EV/EBITDA and P/E multiples of the Company based on the SCR


based on the Precedent Departmental Store Transactions;

(iv) The implied EV/Sales multiple of the Company based on the SCR Consideration is higher


Transactions;

(v) The implied P/NTA multiple of the Company based on the SCR Consideration is higher


Departmental Store Transactions;

(vi) The P/NTA and P/RNTA multiples as implied by the SCR Consideration is higher than the

P/NTA and P/RNTA multiples of the target companies based on the Precedent Real Estate

Transactions;

(vii) The SCR Consideration represents a significant premium over all historical VWAP

benchmark of the Shares in the preceding 10 years prior to the Delisting Date, and up until

the announcement of the Selective Capital Reduction;

(viii) The SCR Consideration represents a significant premium of 140.96% over the Delisting

Offer price;

(ix) The SCR Consideration represents a premium of 122.22% over the highest closing price

of the Shares of S$0.900 over the last 10 years prior to the Delisting Offer;

(x) The EV/Sales, P/E, P/NTA and P/RNTA multiples as implied by the SCR Consideration is

more favourable when compared with these multiples as implied by the Delisting Offer;

(xi) The premia implied by the SCR Consideration represents a significant premium to the

average premium implied by the Precedent Delistings;

(xii) No dividend has been paid by the Company in the last 5 financial years;

(xiii) The Offeror already has statutory control of the Company as it owns, or controls, directly

and indirectly, 98.2% of the Shares;



80

(xiv) The Offeror does not intend to dispose of the Department Store Property, or redevelop the

Department Store Property;

(xv) The Selective Capital Reduction is currently the only offer available to Participating

Shareholders; and

(xvi) The Shares are illiquid as the Shares has been delisted from the SGX-ST subsequent to

the Delisting Offer in August 2009, and the Offeror has stated that the Selective Capital

Reduction will be the final offer made by the Offeror in respect of the Shares, and that no

further offers will be made by the Offeror;

Based upon, and having considered, inter alia, the factors described above and the

information that has been made available to us at the Latest Practicable Date, we are of

the opinion that as of the Latest Practicable date, the Selective Capital Reduction is on

balance, fair and reasonable from a financial point of view. Accordingly, we would advise

the Independent Directors to recommend that, in the absence of a superior offer,

Participating Shareholders should vote in favour of the Selective Capital Reduction.

We recommend that the Independent Directors advise the Participating Shareholders of

our opinion in this Circular. We would also advise the Independent Directors to caution

the Participating Shareholders that they should not rely on our advice to the Independent

Directors as the sole basis for deciding whether or not to vote in favour of the Selective

Capital Reduction.

In rendering the above advice, we have not had regard to the specific investment objectives,

financial situation, tax position or particular needs and constraints of any individual Shareholder.

As each Shareholder would have different investment objectives and profiles, we would advise

that any individual Shareholder who may require specific advice in relation to his investment

objectives or portfolio should consult his stockbroker, bank manager, solicitor, accountant, tax

adviser or other professional adviser immediately. Shareholders should note that the opinion and

advice of CIMB should not be relied upon by any Shareholder as the sole basis for deciding

whether or not to vote in favour of the Selective Capital Reduction.

Yours faithfully

For and on behalf of

CIMB BANK BERHAD, SINGAPORE BRANCH

MAH KAH LOON

HEAD

CORPORATE FINANCE

ERIC WONG

DIRECTOR

CORPORATE FINANCE



81

1. REGISTERED OFFICE

The registered office of TU3 LLP is at 320 Orchard Road, #04-00, Marriott Hotel, Singapore

238865.

2. PARTNERS

The names, addresses and descriptions of the partners of TU3 LLP (the “TU3 LLP Partners”)

as at the Latest Practicable Date are as follows:

Name Address Description

Tang Wee Sung 4 Victoria Park Close, Singapore 266552 Partner

Untien Pte. Ltd. 320 Orchard Road, #04-00, Marriott Hotel

Singapore 238865

Partner

In addition, TWS holds a majority of the voting rights of TU3 LLP.

3. PRINCIPAL ACTIVITIES

TU3 LLP carries on an investment holding business. TU3 LLP is a limited liability partnership

registered under the LLP Act on 8 April 2009.

As at the Latest Practicable Date, TU3 LLP does not own any subsidiaries, but holds 27,579,292

Shares, representing approximately 11.6 per cent. of the total number of Shares.

4. SUMMARY OF FINANCIAL INFORMATION

The following table summarises the audited income statement of TU3 LLP for the financial period

from 8 April 2009 (date of registration) to 31 December 2009, as well as for the financial year

ended 31 December 2010:

(a) Income Statement3

TU3 LLP

For the financial

period from

8 April 2009

(date of registration)

to 31 December 2009

For the financial

year from

1 January 2010 to

31 December 2010

S$’000 S$’000

(Audited) (Audited)

Interest income 7 —

Other operating expenses (20) (36)

Financial expenses — —

Loss from operations before taxation (13) (36)

Taxation — —

Net loss for the year (13) (36)

3 TU3 LLP, as a limited liability partnership, does not issue dividends.

APPENDIX 6ADDITIONAL INFORMATION ON TU3 LLP

82

The following table summarises the audited balance sheet of TU3 LLP as at 31 December

2010:

(b) Balance Sheet

TU3 LLP

As at

31 December 2010

S$’000

(Audited)

Equity

Capital 15,643

Accumulated losses (49)

Total equity 15,594

Investment in an associate 23,540

Current assets

Cash & bank balances 366

Total current assets 366

Current liabilities

Accrued operating expenses 5

Non-trade payable to a partner 8,307

Total current liabilities 8,312

Net current liabilities (7,946)

Net Assets 15,594

5. MATERIAL CHANGES IN FINANCIAL POSITION

5.1 Financial Position. Save as a result of the TU3 LLP Payment, there have been no known

material changes in the financial position of TU3 LLP since 31 December 2010, being the date

to which the last published audited accounts of TU3 LLP were made up.

5.2 General. Save as disclosed in this Circular, as at the Latest Practicable Date, there have been

no material changes to the information previously published by or on behalf of TU3 LLP since the

Notice Date.

5.3 Company. Save as disclosed in publicly available information on the Company, as at the

Latest Practicable Date, there have been, within the knowledge of TU3 LLP, no known material

changes in the financial position or prospects of the Company since 31 March 2011, being the

date to which the Company’s last published audited accounts were made up.


83

5.4 Accounting Policies. As at the Latest Practicable Date, there are no significant accounting

policies nor any points from the notes of the accounts of TU3 LLP which are of major relevance

for the interpretation of the accounts of TU3 LLP referred to in this Circular.

As at the Latest Practicable Date, there are no changes in the accounting policies of TU3 LLP

which will cause the figures disclosed in paragraph 4 of this Appendix 6 to be not comparable

to a material extent.

6. DISCLOSURE OF INTEREST OF TU3 LLP AND CONCERT PARTIES IN THE SHARES

6.1 Holdings of the Shares. Save as disclosed in this paragraph 6.1, as at the Latest Practicable

Date, none of TU3 LLP, the TU3 LLP Partners or the Concert Parties, owns, controls or has

agreed to acquire any Shares or securities which carry voting rights in the Company, or

instruments convertible into, rights to subscribe for or options in respect of such Shares or such

securities (“Company Securities”).

(i) As at the Latest Practicable Date, TU3 LLP holds 27,579,292 Shares4, representing

approximately 11.6 per cent. of the total number of Shares.

(ii) As at the Latest Practicable Date, no TU3 LLP Partner has direct interests in Shares.

(iii) Save as disclosed below and in paragraphs 6.1(i) and 6.1(ii) above, as at the Latest

Practicable Date, no other Concert Party has any interest in the Shares.

Concert Parties Number of Shares

Percentage of Total

Number of Shares

TU2 LLP(1) 163,385,129 68.9

Kerith Holdings LLP(2) 29,246,632 12.3

TWK 12,390,000 5.2

Total 205,021,761 86.5

Notes:

(1) TU2 LLP is a limited liability partnership registered under the LLP Act. The partners of TU2 LLP are (i) TWS

and (ii) UPL. TU2 LLP carries on an investment holding business. UPL is a private limited company

incorporated in Singapore. The entire issued share capital of UPL comprises one ordinary share held by

TWK. As at the Latest Practicable Date, UPL does not own any Shares. TWS holds a majority of the voting

rights of TU2 LLP and therefore has an interest in the Shares held by TU2 LLP.

(2) Kerith Holdings LLP is a limited liability partnership registered under the LLP Act. The partners of Kerith

Holdings LLP are (i) TWS, (ii) UPL and (iii) TWK. Kerith Holdings LLP carries on an investment holding

business. TWS holds a majority of the voting rights of Kerith Holdings LLP and therefore has an interest in

the Shares held by Kerith Holdings LLP.

7. DEALINGS

None of the persons referred to in paragraph 6 above has dealt for value in any Shares during

the period commencing three months prior to the Notice Date and ending on the Latest

Practicable Date.

8. MARKET PRICES

As the Company was delisted from the SGX-ST on 24 August 2009, the Shares are not quoted

on the SGX-ST. Accordingly, no closing prices are available for the Shares (i) on the Latest

Practicable Date, (ii) the latest business day immediately preceding the Notice Date and (iii) at

the end of each of and during the six calendar months preceding the Notice Date.

4 TWS holds a majority of the voting rights of TU3 LLP and therefore has an interest in the Shares held by TU3 LLP.


84

9. GENERAL

9.1 No Agreement having any Connection with or Dependence upon the Selective Capital

Reduction. Except as disclosed in the TU3 LLP Letter and this Appendix 6, as at the Latest

Practicable Date, there is no agreement, arrangement or understanding between (i) TU3 LLP or

any of the Concert Parties and (ii) any of the current or recent directors of the Company or any

of the current or recent Shareholders or any person having any connection with or dependence

upon the Selective Capital Reduction.

9.2 Transfer of Shares. TU3 LLP and its Concert Parties reserve the right to transfer any Shares

to any of its Concert Parties or TU3 LLP (as the case may be) or for the purpose of granting

security in favour of financial institutions which have extended or shall extend credit facilities to

it.

9.3 No Payment or Benefit to Directors of the Company. As at the Latest Practicable Date,

there is no agreement, arrangement or understanding for any payment or other benefit to be

made or given to any Director or any director of a related corporation (as defined in Section 6

of the Companies Act) of the Company as compensation for loss of office or otherwise in

connection with the Selective Capital Reduction.

9.4 Transfer Restrictions. The Memorandum and Articles do not contain any restrictions on the

right to transfer Shares, which has the effect of requiring holders of such Shares, before

transferring them, to offer them for purchase to members of the Company or to any person.

9.5 Indemnity and Other Arrangements. As at the Latest Practicable Date, neither TU3 LLP nor

any of its Concert Parties has entered into any arrangement with any person of the kind referred

to in Note 7 on Rule 12 of the Code, including indemnity or option arrangements, and any

agreement or understanding, formal or informal, or whatever nature, relating to the Shares which

may be an inducement to deal or refrain from dealing in the Shares.

9.6 Irrevocable Undertakings. As at the Latest Practicable Date, neither TU3 LLP nor any

Concert Party has received any irrevocable undertaking from any party to vote in favour of the

Selective Capital Reduction.

10. RESPONSIBILITY STATEMENT FROM TU3 LLP PARTNERS

The TU3 LLP Partners (including any who may have delegated detailed supervision of

paragraph 5 and Appendices 1 and 6 to this Circular) have taken all reasonable care to ensure

that the facts stated and all opinions expressed in paragraph 5 and Appendices 1 and 6 to this

Circular in so far as they relate solely to TU3 LLP, are fair and accurate and that no material facts

relating solely to TU3 LLP have been omitted from paragraph 5 and Appendices 1 and 6 to this

Circular, and they jointly and severally accept responsibility accordingly.

Where any information in paragraph 5 and Appendices 1 and 6 to this Circular relating to TU3

LLP and the Selective Capital Reduction has been extracted or reproduced from published or

otherwise publicly available sources or obtained from the Company, the sole responsibility of the

TU3 LLP Partners has been to ensure through reasonable enquiries that such information is

accurately extracted from such sources or, as the case may be, reflected or reproduced in

paragraph 5 and Appendices 1 and 6 to this Circular.


85

1. THE COMPANY

1.1 Registered Office. The registered office of the Company is at 310 Orchard Road, Singapore

238864.

1.2 Principal Activities. The principal activities of the Company are those of departmental store

retailing and general merchandising. The Company has subsidiaries, which are mainly engaged

in the wholesaling and retailing of merchandise.

2. DIRECTORS

The names, addresses and descriptions of the Directors as at the Latest Practicable Date are

set out below:

Name Address Designation

Ernest Seow Teng Peng 2 Avon Road, Singapore 439780 Director

Cecil Vivian Richard Wong 14 Joan Road, Singapore 298892 Director

Foo Tiang Sooi 1C Victoria Park Road, Singapore 266481 Director

Michel Grunberg 953 Bukit Timah Road, #07-05

The Nexus, Singapore 589651

Director

Soh Yew Hock 100 Arthur Road, Singapore 439831 Director

3. SHARE CAPITAL

3.1 Share Capital of the Company. As at the Latest Practicable Date, the Company has only one

class of shares comprising ordinary shares and an issued and fully paid-up share capital of

S$47,848,113.86 divided into 236,984,226 Shares.

There has been no issue of new Shares by the Company since 31 March 2011.

3.2 Capital, Dividends and Voting Rights. The rights of Shareholders in respect of capital,

dividends and voting are contained in the Articles. For ease of reference, selected texts of the

Articles relating to the rights of Shareholders in respect of capital, dividends and voting have

been reproduced in Appendix 8 to this Circular.

3.3 Convertible Instruments. As at the Latest Practicable Date, except for 4,000 options issued

under the C.K. Tang Share Option Scheme 2002, there are no outstanding instruments

convertible into, rights to subscribe for, and options in respect of Shares or securities which carry

voting rights affecting Shares.

3.4 Sale of Shares. During the period commencing six months prior to the Notice Date, and

ending on the Latest Practicable Date, there were no sales of Shares by the Shareholders.5

5 As at 4 October 2011, 28,000 Shares were transferred from various nominee banks to the beneficial owners of such Shares.

APPENDIX 7ADDITIONAL INFORMATION ON THE COMPANY

86

4. SUMMARY OF FINANCIAL PERFORMANCE AND POSITION

4.1 Financial Information of the Group. A summary of the consolidated income statement of the

Group for the past three financial years ended 31 March 2009, 2010 and 2011 is set out below.

The following summary financial information should be read together with the audited financial

statements and related notes thereto:

(a) Consolidated Income Statement

Group

FY 2009 FY 2010 FY 2011

S$’000 S$’000 S$’000

(Audited) (Audited) (Audited)

Turnover 165,485 158,105 154,147

Other operating income 4,383 3,845 2,878

Changes in stocks of finished goods and

goods-in-transit

(7,796) (11,522) (1,651)

Purchases and related expenses (86,345) (79,304) (78,940)

Staff costs (27,022) (24,350) (24,841)

Marketing related expenses (17,540) (14,491) (12,622)

Depreciation (7,201) (6,801) (5,546)

Other operating expenses (25,700) (31,622) (22,262)

Financial expenses (3,763) (3,343) (2,358)

Financial income 5 3 4

Share of net profit of associated company 497 384 197

(Loss)/Profit from operations before taxation (4,997) (9,096) 9,006

Taxation (641) (1,121) (2,006)

Net (loss)/profit for the year (5,638) (10,217) 7,000

(Loss)/profit per Share (cents) (2.4) (4.3) 3.0

NTA per Share (cents) 93 94 102

Dividend per Share (cents) — — —


87

The following table summarises the audited consolidated balance sheet of the Group as at

31 March 2011:

(b) Consolidated Balance Sheet

Group

FY 2011

S$’000

(Audited)

Share Capital and reserves

Share capital 47,848

Reserves 193,687

Shareholders’ equity 241,535

Non-controlling interests (3)

Total equity 241,532

Fixed assets 370,713

Associated company 704

Available-for-sale investments 1

Current assets

Stocks 16,894

Trade and other debtors 5,880

Available-for-sale investments 376

Cash & cash equivalents 17,891

Total current assets 41,041

Current liabilities

Trade and other creditors 46,513

Deferred revenue 143

Bank borrowings 500

Provision for tax 2,915

Total current liabilities 50,071

Net current liabilities (9,030)

Non-current liabilities

Bank borrowings 118,250

Deferred tax liabilities 2,606

Net Assets 241,532

4.2 Accounting Policies. As at the Latest Practicable Date, there are no significant accounting

policies nor any points from the notes of the accounts of the Group which are of major relevance

for the interpretation of the accounts of the Group referred to in this Circular.


88

As at the Latest Practicable Date, there are no changes in the accounting policies of the Group

which will cause the figures disclosed in this paragraph 4 to be not comparable to a material

extent.

5. MATERIAL CHANGES

5.1 Financial Position. Save as disclosed in publicly available information on the Group, as at the

Latest Practicable Date, there have been no known material changes in the financial position of

the Company since 31 March 2011, being the date to which the Company’s last published

audited accounts were made up.

5.2 General. As at the Latest Practicable Date, there have been no material changes to the

information previously published by or on behalf of the Group since the Notice Date.

5.3 NTA per Share. As at the Latest Practicable Date, the Directors are not aware of any fact or

circumstance that would significantly change the NTA per Share as at 31 March 2011.

6. DISCLOSURE OF INTERESTS

6.1 Disclosure of Interests of the Company and the Directors

(i) As at the Latest Practicable Date, the Company and its subsidiaries do not own any shares

or instruments convertible into, rights to subscribe for and options in respect of shares of

TU3 LLP or securities which carry voting rights in TU3 LLP (“TU3 Securities”), whether

directly or indirectly.

(ii) Neither the Company nor its subsidiaries have dealt for value in the TU3 Securities during

the period commencing six months prior to the Notice Date and ending on the Latest

Practicable Date.

(iii) As at the Latest Practicable Date, none of the Directors has any direct or deemed interests

in the TU3 Securities.

(iv) None of the Directors has dealt for value in the TU3 Securities during the period

commencing six months prior to the Notice Date and ending on the Latest Practicable

Date.

(v) As at the Latest Practicable Date, none of the Directors has any direct or deemed interests

in the Shares.

(vi) None of the Directors has dealt for value in the Shares during the period commencing six

months prior to the Notice Date, and ending on the Latest Practicable Date.

(vii) There (i) are no service contracts between any Director or proposed director with the

Company or any of its subsidiaries with more than 12 months to run, which the employing

company cannot, within the next 12 months, terminate without payment of compensation

and (ii) were no such service contracts entered into or amended between any of the

Directors or proposed director and the Company or any of its subsidiaries during the period

between the start of the six months immediately preceding the Notice Date and the Latest

Practicable Date.


89

(viii) There are no payments or other benefits which will be made or given to any Director or any

director of any corporation, which is by virtue of Section 6 of the Companies Act, deemed

to be related to the Company, as compensation for loss of office or otherwise in connection

with the Selective Capital Reduction.

(ix) There are no agreements or arrangements made between any Director and any other

person in connection with or which are conditional upon the outcome of the Selective

Capital Reduction.

(x) As at the Latest Practicable Date, none of the Directors has entered into any material

contract with the Group in the period beginning three years before the Notice Date.

(xi) As at the Latest Practicable Date, none of the Directors has any material personal interest,

whether direct or indirect, in any material contract entered into by TU3 LLP.

6.2 Disclosure of Interests of PwCCF

(i) None of PwCCF, its related corporations or funds whose investments are managed by

PwCCF or its related corporations on a discretionary basis, owns or controls any Shares

as at the Latest Practicable Date.

(ii) None of PwCCF, its related corporations or funds whose investments are managed by

PwCCF or its related corporations on a discretionary basis has dealt for value in the Shares

during the period commencing six months prior to the Notice Date and ending on the Latest

Practicable Date.

6.3 Disclosure of Interests of IFA

(i) None of the IFA, its related corporations or funds whose investments are managed by the

IFA or its related corporations on a discretionary basis, owns or controls any Shares as at

the Latest Practicable Date.

(ii) None of the IFA, its related corporations or funds whose investments are managed by the

IFA or its related corporations on a discretionary basis has dealt for value in the Shares

during the period commencing six months prior to the Notice Date and ending on the Latest

Practicable Date.

7. MATERIAL CONTRACTS WITH INTERESTED PERSONS

Neither the Company nor any of its subsidiaries has entered into any material contracts (other

than those entered into in the ordinary course of business) with interested persons (as defined

in the Note on Rule 23.12 of the Code) during the period beginning three years before the Notice

Date and ending on the Latest Practicable Date.

8. MATERIAL LITIGATION

As at the Latest Practicable Date, the Directors are not aware of any litigation, claims or

proceedings pending or threatened against the Company or any of its subsidiaries, or any facts

likely to give rise to any litigation, claims or proceedings which might materially affect the

financial position of the Group.


90

9. VALUATION REPORT

9.1 Bases of Valuation. The valuation of the Department Store Property was arrived on the bases

of valuation as set out in section 4.0 entitled “Valuation Rationale” and the section entitled

“General Principles Adopted in the Preparation of Valuations and Reports” of the Valuation

Report, which should be considered and read in conjunction with, and in the context of, the full

text of the Valuation Report.

9.2 Potential Tax Liability. Based on the higher valuation of the Department Store Property on a

redevelopment basis as set out in Scenario 2 of the Valuation Report (“Valuation Amount”), on

the assumption that the Department Store Property would be sold at the Valuation Amount, and

on the basis that the Company is holding the Department Store Property for long-term

investment purposes and has no plans to be in the business of trading and dealing in property,

the potential income tax liability on gains realised on such a sale on the Company would be nil.

The Company has no immediate plans to dispose of its interests in the Department Store

Property. Accordingly, the Valuation Amount of the Department Store Property does not take into

consideration any potential income tax liability.

10. GENERAL

10.1 No Restriction on Transfer of Shares. There is no restriction in the Memorandum or Articles

on the right to transfer any Shares, which has the effect of requiring the holders of such Shares,

before transferring them, to offer them for purchase to members of the Company or to any

person.

10.2 Consent of the Share Registrar. The Share Registrar has given and has not withdrawn its

written consent to the issue of this Circular with the inclusion of its name and all references to

itself in the form and context in which they respectively appear in this Circular.

10.3 Consent of the FA. PwCCF has given and has not withdrawn its written consent to the issue

of this Circular with the inclusion of its FA Report dated 18 August 2011 to the Directors as set

out in Appendix 2 and the inclusion of its name and all references to itself and the FA Report in

the form and context in which they respectively appear in this Circular.

10.4 Consent of the Valuer. The Valuer has given and has not withdrawn its written consent to the

issue of this Circular with the inclusion of the Valuation Summary and the Valuation Report as

set out in Appendices 3 and 4 and the inclusion of its name and all references to itself and the

Valuation Summary and the Valuation Report in the form and context in which they respectively

appear in this Circular.

10.5 Consent of the IFA. CIMB Bank Berhad, Singapore Branch has given and has not withdrawn

its written consent to the issue of this Circular with the inclusion of its letter dated 7 October 2011

to the Independent Directors as set out in Appendix 5 and the inclusion of its name and all

references to itself and the said letter in the form and context in which they respectively appear

in this Circular.


91

11. DOCUMENTS AVAILABLE FOR INSPECTION

Copies of the following documents will be available for inspection at the registered office of the

Company at 310 Orchard Road, Singapore 238864 during normal business hours, from the date

of this Circular until the date of the EGM:

(i) the Memorandum and Articles;

(ii) the Directors’ Report and audited accounts of the Company for FY 2011;

(iii) the Letter;

(iv) the TU3 LLP Letter set out in Appendix 1 to this Circular;

(v) the FA Report set out in Appendix 2 to this Circular;

(vi) the Valuation Summary and Valuation Report set out in Appendices 3 and 4 to this Circular;

(vii) the IFA Letter set out in Appendix 5 to this Circular; and

(viii) the letters of consent referred to in paragraph 10 above.


92

1.1.1 Rights in respect of Capital

SHARES

5. (A) Save to the extent permitted by the Act, none of the funds of

the Company or of any subsidiary thereof shall be directly or

indirectly employed in the purchase or subscription of or in

loans upon the security of the Company’s shares.

(B) Notwithstanding the provisions of Article 5(A) but subject to

the Act, the Company may purchase or otherwise acquire its

issued shares on such terms and in such manner as the

Company may from time to time think fit. If required by the

Act, any share that is so purchased or acquired by the

Company shall, unless held in treasury in accordance with

the Act, be deemed to be cancelled immediately on

purchase or acquisition by the Company. On the

cancellation of a share as aforesaid, the rights and

privileges attached to that share shall expire. In any other

instance, the Company may hold or deal with any such

share which is so purchased or acquired by it in such

manner as may be permitted by, and in accordance with, the

Act.

6. Save as provided by Section 161 of the Act, no shares may be

issued by the Directors without the prior approval of the Company

in General Meeting but subject thereto and to the provisions of

these Articles, the Directors may allot and issue shares or grant

options over or otherwise dispose of the same to such persons on

such terms and conditions and at such time as the Company in

General Meeting may approve.

7. The rights attached to shares issued upon special conditions

shall be clearly defined in the Memorandum of Association of the

Company or these Articles. Without prejudice to any special right

previously conferred on the holders of any existing shares or

class of shares but subject to the Act and these Articles, shares

in the Company may be issued by the Directors and any such

shares may be issued with such preferred, deferred, or other

special rights or such restrictions, whether with regard to

dividend, voting, return of capital or otherwise as the Directors

may determine.

1. CAPITAL, DIVIDENDS AND VOTING RIGHTS

1.1 The rights of Shareholders in respect of capital, dividends and voting are contained in the

Articles, the relevant provisions of which are set out below:

Prohibition against

financial

assistance.

Issue of Shares.

Special Rights.

APPENDIX 8GENERAL INFORMATION

93

8. The Company shall not exercise any right in respect of treasury

shares other than as provided by the Act. Subject thereto, the

Company may deal with its treasury shares in the manner

authorised by, or prescribed pursuant to, the Act.

9. If at any time the share capital is divided into different classes, the

rights attached to any class (unless otherwise provided by the

terms of issue of the shares of that class) may, subject to the

provisions of the Act, whether or not the Company is being wound

up, be varied or abrogated with the sanction of a Special

Resolution passed at a separate General Meeting of the holders

of shares of the class and to every such Special Resolution the

provisions of Section 184 of the Act shall with such adaptations as

are necessary apply. To every such separate General Meeting the

provisions of these Articles relating to General Meetings shall

mutatis mutandis apply. Provided Always That:

(a) the necessary quorum shall be two persons at least holding

or representing by proxy or by attorney one-third of the

issued shares of the class and that any holder of shares of

the class present in person or by proxy or by attorney may

demand a poll, but where the necessary majority for such a

Special Resolution is not obtained at the Meeting, consent

in writing if obtained from the holders of three-fourths of the

issued shares of the class concerned within two months of

the Meeting shall be as valid and effectual as a Special

Resolution carried at the Meeting; or

(b) where all the issued shares of the class are held by one

person, the necessary quorum shall be one person and

such holder of shares of the class present in person or by

proxy or by attorney may demand a poll.

10. The rights conferred upon the holders of the shares of any class

issued with preferred or other rights shall, unless otherwise

expressly provided by the terms of issue of the shares of that

class or by these Articles as are in force at the time of such issue,

be deemed to be varied by the creation or issue of further shares

ranking equally therewith.

11. The Company may pay commissions or brokerage on any issue

of shares at such rate or amount and in such manner as the

Directors may deem fit. Such commission or brokerage may be

satisfied by the payment of cash or the allotment of fully or partly

paid shares or partly in one way and partly in the other.

12. If any shares of the Company are issued for the purpose of

raising money to defray the expenses of the construction of any

works or the provisions of any plant which cannot be made

profitable for a long period, the Company may, subject to the

conditions and restrictions mentioned in the Act pay interest on

Treasury Shares.

Variation of rights.

Creation or issue

of further shares

with special rights.

Power to pay

commission and

brokerage.

Power to charge

interest on capital.


94

such of the shares (excluding treasury shares) as is for the time

being paid up and may charge the same to capital as part of the

cost of the construction or provision.

13. Except as required by law, no person shall be recognised by the

Company as holding any share upon any trust and the Company

shall not be bound by or compelled in any way to recognise (even

when having notice thereof) any equitable, contingent, future or

partial interest in any share or any interest in any fractional part of

a share or (except only as by these Articles or by law otherwise

provided) any other rights in respect of any share, except an

absolute right to the entirety thereof in the registered holder.

14. If two or more persons are registered as joint holders of any

share, any one of such persons may give effectual receipts for

any dividend payable in respect of such share and the joint

holders of a share shall, subject to the provisions of the Act, be

severally as well as jointly liable for the payment of all instalments

and calls and interest due in respect of such shares. Such joint

holders shall be deemed to be one Member and the delivery of a

certificate for a share to one of several joint holders shall be

sufficient delivery to all such holders.

15. No person shall be recognised by the Company as having title to

a fractional part of a share or otherwise than as the sole or a joint

holder of the entirety of such share.

16. If by the conditions of allotment of any shares the whole or any

part of the amount of the issue price thereof shall be payable by

instalments, every such instalment shall, when due, be paid to the

Company by the person who for the time being shall be the

registered holder of the share or his personal representatives, but

this provision shall not affect the liability of any allottee who may

have agreed to pay the same.

ALTERATION OF CAPITAL

47. Subject to any special rights for the time being attached to any

existing class of shares, any new shares in the Company shall be

issued upon such terms and conditions and with such rights and

privileges annexed thereto as the General Meeting resolving

upon the creation thereof shall direct and if no direction be given

as the Directors shall determine subject to the provisions of these

Articles and in particular (but without prejudice to the generality of

the foregoing) such shares may be issued with a preferential or

qualified right to dividends and in the distribution of assets of the

Company or otherwise.

48. Unless otherwise determined by the Company in General

Meeting any new shares shall before issue be offered in the first

instance to all the then holders of any class of shares in

Exclusion of

equities.

Joint holders.

Fractional part of a

share.

Payment of

instalments.

Rights and

privileges of new

shares.

Issue of new

shares to

Members.


95

proportion as nearly as may be to the number of the existing

shares to which they are entitled. In offering such shares in the

first instance to all the then holders of any class of shares the

offer shall be made by notice specifying the number of shares

offered and limiting the time within which the offer if not accepted

will be deemed to be declined and after the expiration of that time

or on the receipt of an intimation from the person to whom the

offer is made that he declines to accept the shares offered, the

Directors may dispose of those shares in such manner as they

think most beneficial to the Company and the Directors may

dispose of or not issue any such shares which by reason of the

proportion borne by them to the number of holders entitled to any

such offer or by reason of any other difficulty in apportioning the

same cannot, in the opinion of the Directors, be conveniently

offered under this Article.

49. Except so far as otherwise provided by the conditions of issue or

by these Articles all new shares shall be subject to the provisions

of these Articles with reference to allotments, payment of calls,

liens, transfers, transmissions, forfeiture and otherwise.

50. The Company may by Ordinary Resolution:

(a) consolidate and divide all or any of its share capital;

(b) subdivide its shares or any of them (subject nevertheless to

the provisions of the Act). Provided always that in such

subdivision the proportion between the amount paid and the

amount (if any) unpaid on each reduced share shall be the

same as it was in the case of the share from which the

reduced share is derived; and

(c) subject to the provisions of these Articles and the Act,

convert any class of shares into any other class of shares.

51. The Company may by Special Resolution reduce its share capital

in any manner and with and subject to any incident authorised

and consent required by law.

Without prejudice to the generality of the foregoing, upon

cancellation of a share purchased or otherwise acquired by the

Company pursuant to these Articles and the Act, the number of

issued shares of the Company shall be diminished by the number

of the shares so cancelled, and, where any such cancelled share

was purchased or acquired out of the capital of the Company, the

amount of share capital of the Company shall be reduced

accordingly.

New shares

otherwise subject

to provisions of

Articles.

Power to

consolidate

subdivide and

convert shares.

Power to reduce

capital.


96

1.1.2 Rights in respect of Dividends

DIVIDENDS

117. The Company may by Ordinary Resolution declare dividends but

(without prejudice to the powers of the Company to pay interest

on share capital as hereinbefore provided) no dividend shall be

payable except out of the profits of the Company, or in excess of

the amount recommended by the Directors.

118. Subject to any rights or restrictions attached to any shares or

class of shares and except as otherwise permitted under the Act:

(a) all dividends in respect of shares shall be paid in proportion

to the number of shares held by a Member but where shares

are partly paid all dividends shall be apportioned and paid

proportionately to the amounts paid or credited as paid on

the partly paid shares; and

(b) all dividends shall be apportioned and paid proportionately

to the amounts so paid or credited as paid during any

portion or portions of the period in respect of which the

dividend is paid.

For the purposes of this Article, an amount paid or credited as

paid on a share in advance of a call is to be ignored.

119. If and so far as in the opinion of the Directors the profits of the

Company justify such payments, the Directors may pay the fixed

preferential dividends on any class of shares carrying a fixed

preferential dividend expressed to be payable on a fixed date on

the half-yearly or other dates (if any) prescribed for the payment

thereof by the terms of issue of the shares, and subject thereto

may also from time to time pay to the holders of any other class

of shares interim dividends thereon of such amounts and on such

dates as they may think fit.

120. No dividend or other moneys payable on or in respect of a share

shall bear interest against the Company.

121. The Directors may deduct from any dividend or other moneys

payable to any Member on or in respect of a share all sums of

money (if any) presently payable by him to the Company on

account of calls or in connection therewith.

122. The Directors may retain any dividend or other moneys payable

on or in respect of a share on which the Company has a lien and

may apply the same in or towards satisfaction of the debts,

liabilities or engagements in respect of which the lien exists.

Payment of

dividends.

Apportionment of

dividends.

Payment of

preference and

interim dividends.

Dividends not to

bear interest.

Deduction for debts

due to Company.

Retention of

dividends on

shares subject to

lien.


97

123. The Directors may retain the dividends payable on shares in

respect of which any person is under the provisions as to the

transmission of shares hereinbefore contained entitled to become

a Member or which any person under those provisions is entitled

to transfer until such person shall become a Member in respect of

such shares or shall duly transfer the same.

124. The payment by the Directors of any unclaimed dividends or

other moneys payable on or in respect of a share into a separate

account shall not constitute the Company a trustee in respect

thereof. All dividends and other moneys payable on or in respect

of a share that are unclaimed after first becoming payable may be

invested or otherwise made use of by the Directors for the benefit

of the Company and any dividend or moneys unclaimed after a

period of six years from the date they are first payable may be

forfeited and if so shall revert to the Company but the Directors

may at any time thereafter at their absolute discretion annul any

such forfeiture and pay the moneys so forfeited to the person

entitled thereto prior to the forfeiture.

125. The Company may, upon the recommendation of the Directors,

by Ordinary Resolution direct payment of a dividend in whole or

in part by the distribution of specific assets and in particular of

paid up shares or debentures of any other company or in any one

or more of such ways; and the Directors shall give effect to such

Resolution and where any difficulty arises in regard to such

distribution, the Directors may settle the same as they think

expedient and in particular may fix the value for distribution of

such specific assets or any part thereof and may determine that

cash payments shall be made to any Members upon the footing

of the value so fixed in order to adjust the rights of all parties and

may vest any such specific assets in trustees as may seem

expedient to the Directors.

126. Any dividend or other moneys payable in cash on or in respect of

a share may be paid by cheque or warrant sent through the post

to the registered address of the Member or person entitled

thereto, or, if several persons are registered as joint holders of the

share or are entitled thereto in consequence of the death or

bankruptcy of the holder to any one of such persons or to such

persons and such address as such persons may by writing direct.

Every such cheque or warrant shall be made payable to the order

of the person to whom it is sent or to such person as the holder

or joint holders or person or persons entitled to the share in

consequence of the death or bankruptcy of the holder may direct

and payment of the cheque if purporting to be endorsed or the

receipt of any such person shall be a good discharge to the

Company. Every such cheque or warrant shall be sent at the risk

of the person entitled to the money represented thereby.

127. A transfer of shares shall not pass the right to any dividend

declared on such shares before the registration of the transfer.

Retention of

dividends on

shares pending

transmission.

Unclaimed

dividends or other

moneys.

Payment of

dividend in specie.

Dividends payable

by cheque.

Effect of transfer.


98

RESERVES

128. The Directors may from time to time set aside out of the profits of

the Company and carry to reserve such sums as they think

proper which, at the discretion of the Directors, shall be

applicable for meeting contingencies or for the gradual liquidation

of any debt or liability of the Company or for repairing or

maintaining the works, plant and machinery of the Company or

for special dividends or bonuses or for equalising dividends or for

any other purpose to which the profits of the Company may

properly be applied and pending such application may either be

employed in the business of the Company or be invested.

129. The Directors may divide the reserve into such special funds as

they think fit and may consolidate into one fund any special funds

or any parts of any special funds into which the reserve may have

been divided. The Directors may also without placing the same to

reserve carry forward any profits which they may think it not

prudent to divide.

BONUS ISSUES AND CAPITALISATION OF PROFITS AND RESERVES

130. The Company may, upon the recommendation of the Directors,

by Ordinary Resolution:

(a) issue bonus shares for which no consideration is payable to

the Company, to the Members holding shares in the

Company in proportion to their then holdings of shares;

and/or

(b) capitalise any sum for the time being standing to the credit

of any of the Company’s reserve accounts or any sum

standing to the credit of the profit and loss account or

otherwise available for distribution, provided that such sum

be not required for paying the dividends on any shares

carrying a fixed cumulative preferential dividend and

accordingly that the Directors be authorised and directed to

appropriate the sum resolved to be capitalised to the

Members holding shares in the Company in the proportions

in which such sum would have been divisible amongst them

had the same been applied or been applicable in paying

dividends and to apply such sum on their behalf either in or

towards paying up the amounts (if any) for the time being

unpaid on any shares held by such Members respectively,

or in paying up in full new shares or debentures of the

Company, such shares or debentures to be allotted and

distributed and credited as fully paid up to and amongst

such Members in the proportion aforesaid or partly in one

way and partly in the other.

Power to carry

profit to reserve.

Manner of dealing

with reserves.

Power to issue free

bonus shares

and/or to capitalise

profits.


99

131. Whenever such a Resolution as aforesaid shall have been

passed, the Directors may do all acts and things considered

necessary or expedient to give effect to any such bonus issue

and/or capitalisation with full power to the Directors to make such

provisions as they think fit for any fractional entitlements which

would arise on the basis aforesaid (including provisions whereby

fractional entitlements are disregarded or the benefit thereof

accrues to the Company rather than to the Members concerned).

The Directors may authorise any person to enter on behalf of all

the Members interested into an agreement with the Company

providing for any such bonus issue or capitalisation and matters

incidental thereto and any agreement made under such authority

shall be effective and binding on all such Members.

1.1.3 Rights in respect of Voting

GENERAL MEETINGS

52. (A) Subject to the provisions of the Act, the Company shall in

each year hold a General Meeting as its Annual General

Meeting in addition to any other meetings in that year and

not more than fifteen months shall elapse between the date

of one Annual General Meeting of the Company and that of

the next; provided that so long as the Company holds its

First Annual General Meeting within eighteen months of its

incorporation, it need not hold it in the year of its

incorporation or in the following year.

(B) All General Meetings other than Annual General Meetings

shall be called Extraordinary General Meetings.

53. The time and place of any General Meeting shall be determined

by the Directors.

54. The Directors may, whenever they think fit, convene an

Extraordinary General Meeting and Extraordinary General

Meetings shall also be convened on such requisition or, in default,

may be convened by such requisitionists, as provided by Section

176 of the Act. If at any time there are not within Singapore

sufficient Directors capable of acting to form a quorum at a

meeting of Directors, any Director may convene an Extraordinary

General Meeting in the same manner as nearly as possible as

that in which meetings may be convened by the Directors.

NOTICE OF GENERAL MEETINGS

55. Subject to the provisions of the Act, at least fourteen days’ notice

in writing (exclusive both of the day on which the notice is served

or deemed to be served and of the day for which the notice is

given) of every General Meeting shall be given in the manner

hereinafter mentioned to such persons (including the Auditors) as

Power of Directors

to give effect to

bonus issue and/or

capitalisations.

Annual General

Meeting.

Extraordinary

General Meetings.

Time and place.

Calling of

Extraordinary

General Meetings.

Notice of Meetings.


100

are under the provisions herein contained and the Act entitled to

receive notice from the Company. Provided that a General

Meeting notwithstanding that it has been called by a shorter

notice than that specified above shall be deemed to have been

duly called if it is so agreed:

(a) in the case of an Annual General Meeting by all the

Members entitled to attend and vote thereat; and

(b) in the case of an Extraordinary General Meeting by that

number or majority in number of the Members having a right

to attend and vote thereat, being a majority together holding

not less than 95 per cent. of the total voting rights of all the

Members having a right to vote at that General Meeting.

Provided also that the accidental omission to give notice to, or the

non-receipt by any person entitled thereto, shall not invalidate the

proceedings at any General Meeting.

56. (A) Every notice calling a General Meeting shall specify the

place and the day and hour of the Meeting, and there shall

appear with reasonable prominence in every such notice a

statement that a Member entitled to attend and vote is

entitled to appoint a proxy to attend and to vote instead of

him and that a proxy need not be a Member.

(B) In the case of an Annual General Meeting, the notice shall

also specify the Meeting as such.

(C) In the case of any General Meeting at which business other

than routine business is to be transacted, the notice shall

specify the general nature of the business; and if any

resolution is to be proposed as a Special Resolution or as

requiring special notice, the notice shall contain a statement

to that effect.

57. Routine business shall mean and include only business

transacted at an Annual General Meeting of the following classes,

that is to say:

(a) declaring dividends;

(b) reading, considering and adopting the balance sheet, the

reports of the Directors and Auditors, and other accounts

and documents required to be annexed to the balance

sheet;

(c) appointing Auditors and fixing the remuneration of Auditors

or determining the manner in which such remuneration is to

be fixed; and

(d) fixing the remuneration of the Directors proposed to be paid

under Article 85.

Contents of Notice.

Routine Business.


101

PROCEEDINGS AT GENERAL MEETINGS

58. No business shall be transacted at any General Meeting unless a

quorum is present. Except as herein otherwise provided, two

Members shall form a quorum save that:

(a) in the event of a corporation being beneficially entitled to the

whole of the issued shares in the capital of the Company

one person representing such corporation shall be a

quorum and shall be deemed to constitute a Meeting and, if

applicable, the provisions of Section 179 of the Act shall

apply; and

(b) in the event the Company has only one Member, the

Company may pass a resolution by that Member recording

the resolution and signing the record in accordance with the

provisions of Section 184G of the Act.

For the purpose of this Article, “Member” includes a person

attending by proxy or by attorney or as representing a corporation

which is a Member.

59. If within half an hour from the time appointed for the Meeting a

quorum is not present, the Meeting if convened on the requisition

of Members shall be dissolved. In any other case it shall stand

adjourned to the same day in the next week at the same time and

place, or to such other day and at such other time and place as

the Directors may determine, and if at such adjourned Meeting a

quorum is not present within fifteen minutes from the time

appointed for holding the Meeting, the Meeting shall be dissolved.

No notice of any such adjournment as aforesaid shall be required

to be given to the Members.

60. Subject to the provisions of the Act, the Members may participate

in a General Meeting by means of a conference telephone or a

video conference telephone or similar communications

equipment by which all persons participating in the General

Meeting are able to hear and be heard by all other Members

without the need for a Member to be in the physical presence of

another Member(s) and participation in the General Meeting in

this manner shall be deemed to constitute presence in person at

such meeting. The Members participating in any such General

Meeting shall be counted in the quorum for such General Meeting

and subject to there being a requisite quorum under these

Articles, all resolutions agreed by the Members in such General

Meeting shall be deemed to be as effective as a resolution

passed at a meeting in person of the Members duly convened

and held. A General Meeting conducted by means of a

conference telephone or a video conference telephone or similar

communications equipment as aforesaid is deemed to be held at

the place agreed upon by the Members attending the General

Quorum.

Adjournment if

quorum not

present.

General Meeting

via conference

telephone, video

conference

telephone or

similar

communications

equipment.


102

Meeting, provided that at least one of the Members present at the

General Meeting was at that place for the duration of the General

Meeting.

61. Subject to any additional requirements as may be imposed by the

Act, all resolutions of the Members shall be adopted by a simple

majority vote of the Members present and voting.

62. Subject to the provisions of the Act, a resolution in writing signed

by every Member of the Company entitled to vote or being a

corporation by its duly authorised representative shall have the

same effect and validity as an Ordinary Resolution of the

Company passed at a General Meeting duly convened, held and

constituted, and may consist of several documents in the like

form, each signed by one or more of such Members.

63. The Chairman of the Board of Directors shall preside as

Chairman at every General Meeting. If there be no such

Chairman or if at any Meeting he be not present within ten

minutes after the time appointed for holding the Meeting or be

unwilling to act, the Members present shall choose some Director

to be Chairman of the Meeting or, if no Director be present or if all

the Directors present decline to take the Chair, one of their

number present, to be Chairman.

64. The Chairman may, with the consent of any Meeting at which a

quorum is present (and shall if so directed by the Meeting in

accordance with Article 64) adjourn the Meeting from time to time

(or sine die) and from place to place, but no business shall be

transacted at any adjourned Meeting except business which

might lawfully have been transacted at the Meeting from which

the adjournment took place. When a Meeting is adjourned for

thirty days or more or sine die, notice of the adjourned Meeting

shall be given as in the case of the original Meeting. Save as

aforesaid, it shall not be necessary to give any notice of an

adjournment or of the business to be transacted at an adjourned

Meeting.

65. At any General Meeting a resolution put to the vote of the Meeting

shall be decided on a show of hands unless a poll be (before or

on the declaration of the result of the show of hands) demanded:

(a) by the Chairman; or

(b) by at least two Members present in person or by proxy or by

attorney or in the case of a corporation by a representative

and entitled to vote at the meeting;

(c) by any Member or Members present in person or by proxy

or by attorney or in the case of a corporation by a

representative and representing not less than one-tenth of

the total voting rights of all the Members having the right to

vote at the Meeting; or

Voting.

Resolutions in

writing.

Chairman.

Adjournment.

Method of Voting.


103

(d) by a Member or Members present in person or by proxy or

by attorney or in the case of a corporation by a

representative, holding not less than 10 per cent. of the total

number of paid-up shares of the Company (excluding

treasury shares).

Unless a poll be so demanded (and the demand be not

withdrawn) a declaration by the Chairman that a resolution has

been carried or carried unanimously or by a particular majority or

lost and an entry to that effect in the minute book shall be

conclusive evidence of the fact without proof of the number or

proportion of the votes recorded in favour of or against the

resolution. A demand for a poll may be withdrawn.

66. If a poll be duly demanded (and the demand be not withdrawn) it

shall be taken in such manner (including the use of ballot or

voting papers) as the Chairman may direct and the result of a poll

shall be deemed to be the resolution of the Meeting at which the

poll was demanded. The Chairman may appoint scrutineers and

may adjourn the Meeting to some place and time fixed by him for

the purpose of declaring the result of the poll.

67. If any votes be counted which ought not to have been counted or

might have been rejected, the error shall not vitiate the result of

the voting unless it be pointed out at the same Meeting or at any

adjournment thereof and not in any case unless it shall in the

opinion of the Chairman be of sufficient magnitude.

68. In the case of equality of votes, whether on a show of hands or on

a poll, the Chairman of the Meeting at which the show of hands

takes place or at which the poll is demanded shall be entitled to

a second or casting vote.

69. A poll demanded on any question shall be taken either

immediately or at such subsequent time (not being more than

thirty days from the date of the Meeting) and place as the

Chairman may direct. No notice need be given of a poll not taken

immediately.

70. The demand for a poll shall not prevent the continuance of a

Meeting for the transaction of any business, other than the

question on which the poll has been demanded.

VOTES OF MEMBERS

71. Subject to these Articles and to any special rights or restrictions

as to voting attached to any class of shares hereinafter issued on

a show of hands every Member entitled to vote who is present in

person or by proxy or attorney or in the case of a corporation by

Taking a poll.

Votes counted in

error.

Chairman’s casting

vote.

Time for taking a

poll.

Continuance of

business after

demand for a poll.

Voting rights of

Members.


104

a representative shall have one vote and on a poll every such

Member shall have one vote for every share of which he is the

holder.

72. Where there are joint registered holders of any share any one of

such persons may vote and be reckoned in a quorum at any

Meeting either personally or by proxy or by attorney or in the case

of a corporation by a representative as if he were solely entitled

thereto and if more than one of such joint holders be so present

at any Meeting that one of such persons so present whose name

stands first in the Register in respect of such share shall alone be

entitled to vote in respect thereof. Several executors or

administrators of a deceased Member in whose name any share

stands shall for the purpose of this Article be deemed joint holders

thereof.

73. A Member of unsound mind or whose person or estate is liable to

be dealt with in any way under the law relating to mental disorders

may vote whether on a show of hands or on a poll by his

committee, curator bonis or such other person as properly has

the management of his estate and any such committee, curator

bonis or other person may vote by proxy or attorney. Provided

that such evidence as the Directors may require of the authority

of the person claiming to vote shall have been deposited at the

Office not less than forty-eight hours before the time appointed for

holding the Meeting.

74. Subject to the provisions of these Articles and the Act every

Member shall be entitled to be present and to vote at any General

Meeting either personally or by proxy or by attorney or in the case

of a corporation by a representative and to be reckoned in a

quorum in respect of shares fully paid and in respect of partly paid

shares where calls are not due and unpaid.

75. No objection shall be raised to the qualification of any voter

except at the Meeting or adjourned Meeting at which the vote

objected to is given or tendered and every vote not disallowed at

such Meeting shall be valid for all purposes. Any such objection

made in due time shall be referred to the Chairman of the Meeting

whose decision shall be final and conclusive.

76. On a poll votes may be given either personally or by proxy or by

attorney or in the case of a corporation by its representative and

a person entitled to more than one vote need not use all his votes

or cast all the votes he uses in the same way.

77. An instrument appointing a proxy shall be in writing and:

(a) in the case of an individual shall be signed by the appointor

or by his attorney; and

Voting rights of

joint holders.

Voting rights of

Members of

unsound mind.

Right to vote

Objections.

Votes on a poll.

Appointment of

proxies.


105

(b) in the case of a corporation shall be either under the

common seal or signed by its attorney or by an officer on

behalf of the corporation.

The Directors may, but shall not be bound to, require evidence of

the authority of any such attorney or officer.

78. A proxy need not be a Member.

79. An instrument appointing a proxy or the power of attorney or other

authority, if any, must be left at the Office or such other place (if

any) as is specified for the purpose in the notice convening the

Meeting not less than forty-eight hours before the time appointed

for the holding of the Meeting or adjourned Meeting (or in the

case of a poll before the time appointed for the taking of the poll)

at which it is to be used and in default shall not be treated as valid

unless the Directors otherwise determine.

80. An instrument appointing a proxy shall be in the following form

with such variations if any as circumstances may require or in

such other form as the Directors may accept and shall be deemed

to include the right to demand or join in demanding a poll, to move

any resolution or amendment thereto and to speak at the

meeting:

C.K. TANG LIMITED

“I/We,

“of

“a Member/Members of the abovenamed Company

“hereby appoint

“of

“or whom failing

“of

“to vote for me/us and on my/our behalf

“at the (Annual, Extraordinary or Adjourned,

“as the case may be) General Meeting of

“the Company to be held on the day

“of and at every adjournment thereof.

“As Witness my/our hand this day of .”

An instrument appointing a proxy shall, unless the contrary is

stated thereon, be valid as well for any adjournment of the

Meeting as for the Meeting to which it relates and need not be

witnessed.

81. A vote given in accordance with the terms of an instrument of

proxy (which for the purposes of these Articles shall also include

a power of attorney) shall be valid notwithstanding the previous

death or insanity of the principal or revocation of the proxy, or of

the authority under which the proxy was executed or the transfer

of the share in respect of which the proxy was given. Provided

Proxy need not be

a Member.

Deposit of proxies.

Form of proxies.

Intervening death

or insanity of

principal not to

revoke proxy.


106

that no intimation in writing of such death, insanity, revocation or

transfer shall have been received by the Company at the Office

(or such other place as may be specified for the deposit of

instruments appointing proxies) before the commencement of the

Meeting or adjourned Meeting (or in the case of a poll before the

time appointed for the taking of the poll) at which the proxy is

used.

82. Any corporation which is a Member may by resolution of its

directors or other governing body authorise such person as it

thinks fit to act as its representative at any Meeting of the

Company or of any class of Members. The person so authorised

shall be entitled to exercise the same powers on behalf of the

corporation as the corporation could exercise if it were an

individual Member and such corporation shall for the purposes of

these Articles (but subject to the Act) be deemed to be present in

person at any such Meeting if a person so authorised is present

thereat. The Company shall be entitled to treat a certificate under

the seal of the corporation as conclusive evidence of the

appointment of representative under this Article.

Corporations acting

by representatives.


107

108

APPENDIX 9 AUDITED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE GROUP FOR FY 2011

Co. Reg. No. 196100023H

C.K. Tang Limited and its subsidiaries Annual Financial Statements 31 March 2011

109



C.K. Tang Limited and its subsidiaries General Information Directors Ernest Seow Teng Peng Cecil Vivian Richard Wong Foo Tiang Sooi Michel Grunberg Soh Yew Hock (Appointed on 1 February 2011) Company Secretary Cecilia Tan La Hiong (Appointed on 4 May 2011) Foo Siang Larng (Resigned on 4 May 2011) Registered Office 310 Orchard Road Singapore 238864 Tel: (65) 67375500 Fax: (65) 67371130 Auditors Ernst & Young LLP Banker Oversea-Chinese Banking Corporation Limited United Overseas Bank Share Registrar Boardroom Corporate & Advisory Services Pte Ltd 50 Raffles Place #32-01 Singapore Land Tower Singapore 048623 Tel: (65) 65365355 Fax: (65) 65361360 Index Page

Directors’ Report 1

Statement by Directors 3

Independent Auditors’ Report 4

Balance Sheets 5

Consolidated Statement of Comprehensive Income 6

Statements of Changes in Equity 7

Consolidated Cash Flow Statement 9

Notes to the Financial Statements 10

110



C.K. Tang Limited and its subsidiaries Directors’ Report

- 1 -

The directors are pleased to present their report to the members together with the audited consolidated financial statements of C.K. Tang Limited (the “Company”) and its subsidiaries (collectively, the “Group”) and the balance sheet and statement of changes in equity of the Company for the financial year ended 31 March 2011. Directors The directors of the Company in office at the date of this report are: Ernest Seow Teng Peng Cecil Vivian Richard Wong Foo Tiang Sooi Michel Grunberg Soh Yew Hock (Appointed on 1 February 2011) Arrangements to enable directors to acquire shares and debentures Except for the C.K. Tang Share Option Scheme 2002 (the “Scheme”) as disclosed below, neither at the end of nor at any time during the financial year was the Company a party to any arrangement whose objects are, or one of whose objects is, to enable the directors of the Company to acquire benefits by means of the acquisition of shares or debentures of the Company or any other body corporate. Directors’ interests in shares and debentures According to the register of directors’ shareholdings required to be kept under Section 164 of the Singapore Companies Act, Cap. 50, no director of the Company who held office at the end of the financial year had any interest in shares of the Company or of related corporations, either at the beginning of the financial year or at the end of the financial year. Share options Details of the options to subscribe for ordinary shares of the Company pursuant to the Scheme are as follows:

Date of grant

Exercise period

Exercise price

Options granted

during the year

Aggregate

options granted since

commencement of Scheme to end

of financial year

Aggregate options

exercised/ expired/

cancelled since commencement

of Scheme to end of financial year

Options outstanding

as at 31.3.2011

$

2.5.2002 2.5.2003 to 2.5.2012

0.20 – 4,213,000 (4,209,000) 4,000

111



C.K. Tang Limited and its subsidiaries Directors’ Report

- 2 -

Share options (cont’d) The options under the Scheme do not entitle the holders to participate in any share issue of any other corporation in the Group by virtue of the options. Except for the above, no other options to take up unissued shares of the Company or any subsidiary were granted and no shares were issued by virtue of the exercise of options to take up unissued shares of the Company or any subsidiary. There were no unissued shares of any subsidiary under option at the end of the financial year. Directors’ contractual benefits Except as disclosed in the financial statements, since the end of the previous financial year, no director of the Company has received or become entitled to receive a benefit by reason of a contract made by the Company or a related corporation with the director, or with a firm of which the director is a member, or with a company in which the director has a substantial financial interest. Auditors Ernst & Young LLP have expressed their willingness to accept reappointment as auditors. On behalf of the Board of Directors Cecil Vivian Richard Wong Director Foo Tiang Sooi Director Singapore 1 August 2011

112



C.K. Tang Limited and its subsidiaries

- 3 -

Statement by Directors We, Cecil Vivian Richard Wong and Foo Tiang Sooi, being two of the directors of C.K. Tang Limited, do

hereby state that, in the opinion of the directors,

(a) the accompanying balance sheets, consolidated statement of comprehensive income, statements of

changes in equity and consolidated cash flow statement together with notes thereto are drawn up so

as to give a true and fair view of the state of affairs of the Group and of the Company as at 31 March

2011, and the results of the business, changes in equity and cash flows of the Group and the

changes in equity of the Company for the financial year ended on that date, and

(b) 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 Cecil Vivian Richard Wong Director Foo Tiang Sooi Director Singapore 1 August 2011

113




- 4 -

Independent Auditors’ Report To the members of C.K. Tang Limited Report on the consolidated financial statements We have audited the accompanying consolidated financial statements of C.K. Tang Limited (the "Company") and its subsidiaries (collectively, the "Group") set out on pages 5 to 43, which comprise the balance sheets of the Group and the Company as at 31 March 2011, the statements of changes in equity of the Group and the Company, the consolidated statement of comprehensive income and consolidated cash flow statement of the Group for the financial year then ended, and a summary of significant accounting policies and other explanatory information. Management's responsibility for the consolidated financial statements Management is responsible for the preparation of consolidated financial statements that give a true and fair view in accordance with the provisions of the Singapore Companies Act (the "Act") and Singapore Financial Reporting Standards, and for devising and maintaining a system of internal accounting controls sufficient to provide a reasonable assurance that assets are safeguarded against loss from unauthorised use or disposition; and transactions are properly authorised and that they are recorded as necessary to permit the preparation of true and fair profit and loss accounts and balance sheets and to maintain accountability of assets. Auditors' responsibility Our responsibility is to express an opinion on these consolidated financial statements based on our audit. We conducted our audit in accordance with Singapore Standards on Auditing. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. The procedures selected depend on the auditor's judgement, including the assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation of the consolidated financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. 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 consolidated financial statements of the Group and the balance sheet and statement of changes in equity of the Company are properly drawn up in accordance with the provisions of the Act and Singapore Financial Reporting Standards so as to give a true and fair view of the state of affairs of the Group and of the Company as at 31 March 2011 and the results, changes in equity and cash flows of the Group and the changes in equity of the Company for the year ended on that date. Report on other legal and regulatory requirements In our opinion, the accounting and other records required by the Act to be kept by the Company and by those subsidiaries incorporated in Singapore of which we are the auditors have been properly kept in accordance with the provisions of the Act. Ernst & Young LLP Public Accountants and Certified Public Accountants Singapore 1 August 2011

114




- 5 -

Balance Sheets as at 31 March 2011 Group Company Note 2011 2010 2011 2010 $’000 $’000 $’000 $’000 Share capital and reserves Share capital 4 47,848 47,848 47,848 47,848 Reserves 5 193,687 175,715 40,660 40,414

Shareholders’ equity 241,535 223,563 88,508 88,262 Non-controlling interests (3) 7 – –

Total equity 241,532 223,570 88,508 88,262

Fixed assets 6 370,713 361,949 10,039 10,532 Subsidiaries 7 – – 93,865 101,011

Associated company 8 704 790 – –

Available-for-sale investments 9 1 1 1 1 Current assets Stocks 10 16,894 18,545 15,590 14,613 Trade and other debtors 11 5,880 7,328 4,215 4,610 Available-for-sale investments 9 376 377 376 377 Cash and cash equivalents 21 17,891 11,135 10,527 5,621

41,041 37,385 30,708 25,221

Current liabilities Trade and other creditors 12 46,513 40,948 44,147 37,580 Deferred revenue 143 341 143 341 Bank borrowings 13 500 12,400 – 9,400 Provision for tax 2,915 1,408 991 246 Derivatives 14 – 69 – –

50,071 55,166 45,281 47,567

Net current liabilities (9,030) (17,781) (14,573) (22,346) Non-current liabilities Bank borrowings 13 118,250 118,750 – – Deferred tax liabilities 20 2,606 2,639 824 936

241,532 223,570 88,508 88,262

The accounting policies and explanatory notes form an integral part of the financial statements.

115




- 6 -

Consolidated Statement of Comprehensive Income for the year ended 31 March 2011 Group Note 2011 2010 $’000 $’000 Turnover 15 154,147 158,105 Other operating income 16 2,878 3,845 Changes in stocks of finished goods and goods-in-transit (1,651) (11,522) Purchases and related expenses (78,940) (79,304) Staff costs 18 (24,841) (24,350) Marketing related expenses (12,622) (14,491) Depreciation 6 (5,546) (6,801) Other operating expenses (22,262) (31,622) Financial expenses 19 (2,358) (3,343) Financial income 19 4 3 Share of net profit of associated company 197 384

Profit/(loss) from operations before taxation 17 9,006 (9,096) Taxation 20 (2,006) (1,121)

Net profit/(loss) for the year 7,000 (10,217)

Other comprehensive income: Currency translation differences 433 2,593 Translation differences on advances to subsidiaries (576) 368 Net surplus on revaluation of freehold property net of deferred

tax 6, 20 11,093 11,050 Net gain on available-for-sale investment 9 12 145

Other comprehensive income for the year, net of tax 10,962 14,156

Total comprehensive income for the year 17,962 3,939

Net profit/(loss) attributable to: Equity holders of the Company 7,010 (10,210) Non-controlling interests (10) (7)

7,000 (10,217)

Total comprehensive income attributable to: Equity holders of the Company 17,972 3,943 Non-controlling interests (10) (4)

17,962 3,939


116


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774

(10,

984)

13

3

– (4

9,26

8)

171,

655

128

219,

631

Net

loss

for t

he y

ear

– –

– –

–

(10,

210)

(1

0,21

0)

(7)

(10,

217)

O

ther

com

preh

ensi

ve in

com

e fo

r the

ye

ar

– 11

,050

2,

958

145

–

– 14

,153

3

14,1

56

Tota

l com

preh

ensi

ve in

com

e/(lo

ss) f

or

the

year

–

11,0

50

2,95

8 14

5

– (1

0,21

0)

3,94

3 (4

) 3,

939

Acq

uisi

tion

of n

on-c

ontro

lling

inte

rest

s –

– –

–

– –

– (1

17)

(117

) D

isco

unt o

n ac

quis

ition

of

non

-con

trolli

ng in

tere

sts

– –

– –

11

7 –

117

– 11

7

Bal

ance

at 3

1 M

arch

201

0 47

,848

24

2,82

4 (8

,026

) 27

8

117

(59,

478)

17

5,71

5 7

223,

570

Net

pro

fit/(l

oss)

for t

he y

ear

– –

– –

–

7,01

0 7,

010

(10)

7,

000

Oth

er c

ompr

ehen

sive

inco

me/

(loss

) for

th

e ye

ar

– 11

,093

(1

43)

12

–

– 10

,962

–

10,9

62

Tota

l com

preh

ensi

ve in

com

e/(lo

ss) f

or

the

year

–

11,0

93

(143

) 12

– 7,

010

17,9

72

(10)

17

,962

Bal

ance

at 3

1 M

arch

201

1 47

,848

25

3,91

7 (8

,169

) 29

0

117

(52,

468)

19

3,68

7 (3

) 24

1,53

2

The

acco

untin

g po

licie

s an

d ex

plan

ator

y no

tes

form

an

inte

gral

par

t of t

he fi

nanc

ial s

tate

men

ts.

117




- 8 -

Statements of Changes in Equity for the year ended 31 March 2011 (cont’d)

Share capital

Fair valueadjustment

reserve Revenue reserve

Total

reserves

Total

equity Company $’000 $’000 $’000 $’000 $’000 Balance at 1 April 2009 47,848 133 47,390 47,523 95,371

Net loss for the year – – (7,254) (7,254) (7,254) Other comprehensive income for the year – 145 – 145 145

Total comprehensive income/(loss) for the year – 145 (7,254) (7,109) (7,109)

Balance at 31 March 2010 47,848 278 40,136 40,414 88,262

Net profit for the year – – 234 234 234 Other comprehensive income for the year – 12 – 12 12

Total comprehensive income for the year – 12 234 246 246

Balance at 31 March 2011 47,848 290 40,370 40,660 88,508


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- 9 -

Consolidated Cash Flow Statement for the year ended 31 March 2011 Group Note 2011 2010 $’000 $’000 Cash flows from operating activities Profit/(loss) before taxation 9,006 (9,096) Adjustments: Depreciation 5,546 6,801 Fixed assets written off 117 43 Stocks written off 422 834 Write-back of impairment on fixed assets (21) (76) (Write-back of)/allowance for stocks obsolescence (795) 2,030 Allowance for impairment loss relating to debtors 263 180 Provision for/(write-back of) closure costs 438 (70) Loss/(gain) on disposal of fixed assets 15 (27) Loss on disposal of investment in a subsidiary – 8,482 Reversal of provision for expired liabilities (227) (1,199) Interest expense 2,358 3,343 Interest income (4) (3) Dividends received from available-for-sale investments (26) (18) Gain on disposal of available-for-sale investments (47) – Exchange differences, net (161) (33) Share of net profit of associated company (197) (384) Fair value loss on derivatives – 69

Operating profit before working capital changes 16,687 10,876 Decrease in stocks 2,024 5,306 Decrease/(increase) in trade and other debtors 1,185 (11) Increase/(decrease) in trade and other creditors 5,354 (2,693) (Decrease)/increase in deferred revenue (198) 217

Cash generated from operations 25,052 13,695 Interest paid (2,475) (3,002) Income taxes paid (611) (246)

Net cash flows from operating activities 21,966 10,447

Cash flows from investing activities Proceeds from disposal of investment in a subsidiary – 511 Proceeds from sale of available-for sale investments 60 – Proceeds from sale of fixed assets 39 48 Purchase of fixed assets (3,222) (3,005) Dividends received from available-for-sale investments 26 18 Interest received 4 3 Dividends received from associated company 283 283

Net cash flows used in investing activities (2,810) (2,142)

Cash flows from financing activities Repayment of bank loan (12,400) (5,230) Decrease/(increase) in fixed deposits pledged 3 (9)

Net cash flows used in financing activities (12,397) (5,239)

Net increase in cash and cash equivalents 6,759 3,066 Cash and cash equivalents at beginning of year 10,938 7,872

Cash and cash equivalents at end of year 21 17,697 10,938


119



C.K. Tang Limited and its subsidiaries Notes to the Financial Statements - 31 March 2011

- 10 -

1. Corporate information C.K. Tang Limited (the “Company”) is a limited liability company incorporated in Singapore. On 24 August 2010, the Company was delisted from the Singapore Exchange Securities Trading Limited and remains as a public limited liability company. The registered office and principal place of business of the Company is located at 310 Orchard Road, Singapore 238864. The principal activities of the Company are those of departmental store retailing and general merchandising. The principal activities of the subsidiaries are disclosed in Note 7 to the financial statements.

2. Summary of significant accounting policies

2.1 Basis of preparation The financial statements have been prepared in accordance with Singapore Financial Reporting Standards (“FRS”) and on a historical cost basis, except as discussed in the accounting policies below. The financial statements are presented in Singapore Dollars (“SGD” or “$”) and all values are rounded to the nearest thousand (“$’000”) except where otherwise indicated.

2.2 Changes in accounting policies

The accounting policies adopted are consistent with those of the previous financial year except in the current financial year, the Group has adopted all the new and revised standards and Interpretations of FRS (INT FRS) that are effective for annual periods beginning on or after 1 April 2010. The adoption of these standards and interpretations did not have any effect on the financial performance or position of the Group and the Company except as disclosed below: FRS 103 Business Combinations (revised) and FRS 27 Consolidated and Separate Financial Statements (revised) The revised FRS 103 Business Combinations and FRS 27 Consolidated and Separate Financial Statements are applicable for annual periods beginning on or after 1 July 2009. As of 1 April 2010, the Group adopted both revised standards at the same time in accordance with their transitional provisions. FRS 103 Business Combinations (revised) The revised FRS 103 introduces a number of changes to the accounting for business combinations that will impact the amount of goodwill recognised, the reported results in the period that an acquisition occurs, and future reported results. Changes in significant accounting policies resulting from the adoption of the revised FRS 103 include: - Transaction costs would no longer be capitalised as part of the cost of acquisition but will be

expensed immediately; - Consideration contingent on future events are recognised at fair value on the acquisition date

and any changes in the amount of consideration to be paid will no longer be adjusted against goodwill but recognised in profit or loss;

- The Group elects for each acquisition of a business, to measure non-controlling interest at fair

value, or at the non-controlling interest’s proportionate share of the acquiree’s identifiable net assets, and this impacts the amount of goodwill recognised; and

- When a business is acquired in stages, the previously held equity interests in the acquiree is

remeasured to fair value at the acquisition date with any corresponding gain or loss recognised in profit or loss, and this impacts the amount of goodwill recognised.

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2. Summary of significant accounting policies (cont’d) 2.2 Changes in accounting policies (cont’d)

FRS 103 Business Combinations (revised) (cont’d) According to its transitional provisions, the revised FRS 103 has been applied prospectively. Assets and liabilities that arose from business combinations whose acquisition dates are before 1 April 2010 are not adjusted. The adoption of the revised FRS 103 does not impact the Group’s consolidated financial statements. The changes will affect future acquisitions. FRS 27 Consolidated and Separate Financial Statements (revised) Changes in significant accounting policies resulting from the adoption of the revised FRS 27 include: - A change in the ownership interest of a subsidiary that does not result in a loss of control is

accounted for as an equity transaction. Therefore, such a change will have no impact on goodwill, nor will it give rise to a gain or loss recognised in profit or loss;

- Losses incurred by a subsidiary are allocated to the non-controlling interest even if the losses

exceed the non-controlling interest in the subsidiary’s equity; and - When control over a subsidiary is lost, any interest retained is measured at fair value with the

corresponding gain or loss recognised in profit or loss. According to its transitional provisions, the revised FRS 27 has been applied prospectively, and does not impact the Group’s consolidated financial statements in respect of transactions with non-controlling interests, attribution of losses to non-controlling interests and disposal of subsidiaries before 1 April 2010. The changes will affect future transactions with non-controlling interests.

2.3 Standards issued out but net yet effective The Group has not adopted the following standards and interpretations that have been issued but not yet effective:

Reference Description

Effective for annual periods beginning

on or after FRS 12 Amendments to FRS 12 Deferred Tax – Recovery of Underlying

Assets 1 January 2012

FRS 24 Related Party Disclosures (Revised) 1 January 2011 FRS 107 Amendment to FRS 107 Disclosures – Transfers of Financial

Assets 1 July 2011

INT FRS 114 FRS 19-The Limit on a Defined Benefit Asset, Minimum Funding Requirement and their Interaction – amendments relating to Prepayments of a Minimum Funding Requirements

1 January 2011

INT FRS 115 Agreements for the Construction of Real Estate 1 January 2011 INT FRS 119 Extinguishing Financial Liabilities with Equity Instruments 1 July 2010 Improvements to FRSs issued in 2010 FRS 101 - Amendments to First-time Adopting of Financial

Reporting Standards1 January 2011

FRS 103 - Amendments to Business Combinations 1 July 2010 FRS 107 - Amendments to Financial Instruments: Disclosures 1 January 2011 FRS 1 - Amendments to Presentation of Financial Statements 1 January 2011 FRS 34 - Amendments to Interim Financial Reporting 1 January 2011 INT FRS 113 - Amendments to Customer Loyalty Programmes 1 January 2011

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2. Summary of significant accounting policies (cont’d) 2.3 Standards issued out but net yet effective (cont’d)

Except for the revised FRS 24, the directors expect that the adoption of the other standards and interpretations above will have no material impact on the financial statements in the period of initial application. The nature of the impending changes in accounting policy on adoption of the revised FRS 24 is described below. Revised FRS 24 Related Party Disclosures The revised FRS 24 clarifies the definition of a related party to simplify the identification of such relationships and to eliminate inconsistencies in its application. The revised FRS 24 expands the definition of a related party and would treat two entities as related to each other whenever a person (or a close member of that person’s family) or a third party has control or joint control over the entity, or has significant influence over the entity. The revised standard also introduces a partial exemption of disclosure requirements for government-related entities. The Group is currently determining the impact of the changes to the definition of a related party has on the disclosure of related party transaction. As this is a disclosure standard, it will have no impact on the financial position or financial performance of the Group when implemented in the financial year ending 31 March 2012.

2.4 Basis of consolidation Business combinations from 1 April 2010 The consolidated financial statements comprise the financial statements of the Company and its subsidiaries as at the end of the reporting period. The financial statements of the subsidiaries used in the preparation of the consolidated financial statements are prepared for the same reporting date as the Company. Consistent accounting policies are applied to like transactions and events in similar circumstances. All intra-group balances, income and expenses and unrealised gains and losses resulting from intra-group transactions are eliminated in full. Subsidiaries are consolidated from the date of acquisition, being the date on which the Group obtains control, and continue to be consolidated until the date that such control ceases. Business combinations are accounted for by applying the acquisition method. Identifiable assets acquired and liabilities assumed in a business combination are measured initially at their fair values at the acquisition date. Acquisition-related costs are recognised as expenses in the periods in which the costs are incurred and the services are received. When the Group acquires a business, it assesses the financial assets and liabilities assumed for appropriate classification and designation in accordance with the contractual terms, economic circumstances and pertinent conditions as at the acquisition date. This includes the separation of embedded derivatives in host contracts by the acquiree. Any contingent consideration to be transferred by the acquirer will be recognised at fair value at the acquisition date. Subsequent changes to the fair value of the contingent consideration which is deemed to be an asset or liability, will be recognised in accordance with FRS 39 either in profit or loss or as change to other comprehensive income. If the contingent consideration is classified as equity, it is not be remeasured until it is finally settled within equity. In business combinations achieved in stages, previously held equity interests in the acquiree are remeasured to fair value at the acquisition date and any corresponding gain or loss is recognised in profit or loss. The Group elects for each individual business combination, whether non-controlling interest in the acquiree (if any) is recognised on the acquisition date at fair value, or at the non-controlling interest’s proportionate share of the acquiree identifiable net assets.

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2. Summary of significant accounting policies (cont’d) 2.4 Basis of consolidation (cont’d)

Business combinations from 1 April 2010 (cont’d) Any excess of the sum of the fair value of the consideration transferred in the business combination, the amount of non-controlling interest in the acquiree (if any), and the fair value of the Group’s previously held equity interest in the acquiree (if any), over the net fair value of the acquiree’s identifiable assets and liabilities is recorded as goodwill. In instances where the latter amount exceeds the former, the excess is recognised as gain on bargain purchase in profit or loss on the acquisition date. Business combinations before 1 April 2010 In comparison to the above mentioned requirements, the following differences applied: Business combinations are accounted for by applying the purchase method. Transaction costs directly attributable to the acquisition formed part of the acquisition costs. The non-controlling interest (formerly known as minority interest) was measured at the proportionate share of the acquiree’s identifiable net assets. Business combinations achieved in stages were accounted for as separate steps. Adjustments to those fair values relating to previously held interests are treated as a revaluation and recognised in equity. When the Group acquired a business, embedded derivatives separated from the host contract by the acquiree are not reassessed on acquisition unless the business combination results in a change in the terms of the contract that significantly modifies the cash flows that would otherwise be required under the contract. Contingent consideration was recognised if, and only if, the Group had a present obligation, the economic outflow was more likely than not and a reliable estimate was determinable. Subsequent measurements to the contingent consideration affected goodwill.

2.5 Transactions with non-controlling interests Non-controlling interest represents the equity in subsidiaries not attributable, directly or indirectly, to owners of the Company, and are presented separately in the consolidated statement of comprehensive income and within equity in the consolidated balance sheet, separately from equity attributable to owners of the Company. Changes in the Company owners’ ownership interest in a subsidiary that do not result in a loss of control are accounted for as equity transactions. In such circumstances, the carrying amounts of the controlling and non-controlling interests are adjusted to reflect the changes in their relative interests in the subsidiary. Any difference between the amount by which the non-controlling interest is adjusted and the fair value of the consideration paid or received is recognised directly in equity and attributed to owners of the parent.

2.6 Foreign currency 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 closing rate of exchange ruling at the balance sheet date. 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. Non-monetary items measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value was determined.

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- 14 -

2. Summary of significant accounting policies (cont’d)

2.6 Foreign currency (cont’d) Exchange differences arising on the settlement of monetary items or on translating monetary items at the balance sheet date are recognised in profit or loss except for exchange differences arising on monetary items that form part of the Group’s net investment in foreign operations, which are recognised initially in other comprehensive income and accumulated under foreign currency translation reserve in equity. The foreign currency translation reserve is reclassified from equity to profit or loss of the Group on disposal of the foreign operation. The assets and liabilities of foreign operations are translated into SGD at the closing exchange rate ruling at that balance sheet date and their statement of comprehensive income are translated at average exchange rates for the year. All resulting exchange differences are taken directly to other comprehensive income. On disposal of a foreign operation, the cumulative amount of exchange differences recognised in other comprehensive income relating to that particular foreign operation is recognised in profit or loss as a component of the gain or loss on disposal.

2.7 Fixed assets All items of fixed assets are initially recorded at cost. The cost of fixed assets includes all costs that are directly attributable to bringing the assets to the location and working condition. Dismantlement, removal and restoration costs are included in fixed assets if the obligation for dismantling and removing the items or restoring the site is incurred as a consequence of acquiring or using the assets. Subsequent to recognition, fixed assets are stated at cost or valuation less accumulated depreciation and any accumulated impairment losses. The carrying values of fixed assets are reviewed for impairment when events or changes in circumstances indicate that the carrying value may not be recoverable. Land and buildings are subsequently revalued on an asset-by-asset basis, to their fair values. Fair value is determined from market-based evidence by appraisal that is undertaken by professionally qualified valuers. Revaluations are made annually to ensure that their carrying amount does not differ materially from their fair value at the balance sheet date. When an asset is revalued, any increase in the carrying amount is recognised in other comprehensive income and accumulated in equity under the asset revaluation reserve, except to the extent that it reverses a revaluation decrease of the same asset previously recognised in profit or loss, in which case the increase is recognised in profit or loss. A revaluation deficit is recognised in profit or loss, except to the extent that it offsets existing surplus on the same asset carried in the asset revaluation reserve. Any accumulated depreciation as at the revaluation date is eliminated against the gross carrying amount of the asset and the net amount is restated to the revalued amount of the asset. The revaluation surplus included in the asset revaluation reserve in respect of an asset, is transferred directly to revenue reserve on retirement or disposal of the asset. Freehold land has an unlimited useful life and therefore is not depreciated. Depreciation of an asset begins when it is available for use and is computed on a straight-line basis over the estimated useful life of the asset as follows: Years Freehold building 50 Building improvements 5 - 10 Fixtures, fittings, furniture and equipment 3 - 10 Motor vehicles 5 Freehold property is located at 310 and 320 Orchard Road, Singapore and comprises building improvements, freehold land and building. Building improvements represent the integral part of the freehold property which is not moveable.

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- 15 -


2.7 Fixed assets (cont’d) Construction-in-progress is not depreciated until such time as the relevant assets are completed and put into operational use. The residual values, useful life and depreciation method are reviewed at each financial year-end to ensure that the amount, period and method of depreciation are consistent with previous estimates and the expected pattern of consumption of the future economic benefits embodied in the items of fixed assets. An item of fixed assets is derecognised upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss arising on derecognition of the asset is included in profit or loss in the year the asset is derecognised.

2.8 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 to sell 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 group 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. In assessing value in use, the estimated future cash flows expected to be generated by the asset are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. In determining fair value less costs to sell, an appropriate valuation model is used. These calculations are corroborated by valuation multiples, quoted share prices for publicly traded subsidiaries or other available fair value indicators. Impairment losses of continuing operations are recognised in profit or loss in those expense categories consistent with the function of the impaired asset, except for assets that are previously revalued where the revaluation was taken to other comprehensive income. In this case, the impairment is also recognised in other comprehensive income up to the amount of any previous revaluation. For assets excluding goodwill, an assessment is made at each reporting date as to whether there is any indication that previously recognised impairment losses may no longer exist or may have decreased. If such indication exists, the Group estimates the asset’s or cash-generating unit’s recoverable amount. 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 unless the asset is measured at revalued amount, in which case the reversal is treated as a revaluation increase.

2.9 Subsidiaries A subsidiary is an entity over which the Group has the power to govern the financial and operating policies so as to obtain benefits from its activities. In the Company’s separate financial statements, investments in subsidiaries are accounted for at cost less any impairment loss.

125




- 16 -


2.10 Associated company An associated company is an entity, not being a subsidiary or a joint venture, in which the Group has significant influence. An associated company is equity accounted for from the date the Group obtains significant influence until the date the Group ceases to have significant influence over the associated company. The Group’s investments in associated company is accounted for using the equity method. Under the equity method, the investment in associated company is carried in the balance sheet at cost plus post-acquisition changes in the Group’s share of net assets of the associated company. Goodwill relating to associated company is included in the carrying amount of the investment and is neither amortised nor tested individually for impairment. Any excess of the Group’s share of the net fair value of the associated company’s identifiable asset, liabilities and contingent liabilities over the cost of the investment is deducted from the carrying amount of the investment and is recognised as income as part of the Group’s share of results of the associated company in the period in which the investment is acquired. The profit or loss reflects the share of the results of operations of the associated company. Where there has been a change recognised in other comprehensive income by the associated company, the Group recognises its share of such changes in other comprehensive income. Unrealised gains and losses resulting from transactions between the Group and the associated company are eliminated to the extent of the interest in the associated company. The Group’s share of the profit or loss of its associated company is shown on the face of profit or loss after tax and non-controlling interests in the subsidiaries of associated company. When the Group’s share of losses in an associated company equals or exceeds its interest in the associated company, Group does not recognise further losses, unless it has incurred obligations or made payments on behalf of the associated company. After application of the equity method, the Group determines whether it is necessary to recognise an additional impairment loss on the Group’s investment in its associated company. The Group determines at the end of each reporting period whether there is any objective evidence that the investment in the associated company is impaired. If this is the case, the Group calculates the amount of impairment as the difference between the recoverable amount of the associated company and its carrying value and recognises the amount in profit or loss. The financial statements of the associated companies are prepared as of the same reporting date as the Company. Where necessary, adjustments are made to bring the accounting policies in line with those of the Group. Upon loss of significant influence over the associated company, the Group measures any retained investment at its fair value. Any difference between the carrying amount of the associated company upon loss of significant influence and the fair value of the aggregate of the retained investment and proceeds from disposal is recognised in profit or loss. The most recent available audited financial statements of the associated company is used by the Group in applying the equity method. Where the dates of the audited financial statements used are not co-terminous with those of the Group, the share of results is arrived at from the last audited financial statements available and unaudited management financial statements to the end of the Group’s accounting period. Consistent accounting policies are applied for like transactions and events in similar circumstances.

126




- 17 -


2.11 Financial assets Financial assets are recognised on the balance sheet 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 financial asset is derecognised where the contractual right to receive cash flows from the asset has expired. On derecognition 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 has been recognised directly in other comprehensive income is recognised in profit or loss. All regular purchases and sales of financial assets are recognised or derecognised on the trade date i.e. the date that the Group commits to purchase or sell the asset. Regular purchases or sales are purchases or sales of financial assets that require delivery of assets within the period generally established by regulation or convention in the marketplace concerned. (a) Loans and receivables

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.

(b) Available-for-sale financial assets Available-for-sale financial assets include equity and debt securities. Equity investments classified as available-for sale are those, which are neither classified as held for trading nor designated at fair value through profit or loss. Debt securities in this category are those which are intended to be held for an indefinite period of time and which may be sold in response to needs for liquidity or in response to changes in the market conditions. After initial recognition, available-for-sale financial assets are subsequently measured at fair value. Any gains or losses from changes in fair value of the financial asset are recognised in other comprehensive income, except that impairment losses, foreign exchange gains and losses on monetary instruments and interest calculated using the effective interest method are recognised in profit or loss. The cumulative gain or loss previously recognised in other comprehensive income is reclassified from equity to profit or loss as a reclassification adjustment when the financial asset is derecognised. Investments in equity instruments whose fair value cannot be reliably measured are measured at cost less impairment loss.

127




- 18 -


2.12 Impairment of financial assets The Group assesses at each balance sheet date whether there is any objective evidence that a financial asset is impaired. (a) Financial assets carried at amortised cost

For financial assets carried at amortised cost, the Group first assesses individually 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. The carrying amount of the asset is reduced through the use of an allowance account. The amount of the loss is recognised in profit or loss. When the asset becomes uncollectible, the carrying amount of impaired financial assets 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. 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 value of the asset does not exceed its amortised cost at the reversal date. The amount of reversal is recognised in profit or loss.

(b) Available-for-sale financial assets

In the case of equity investments classified as available-for-sale, objective evidence of impairment include (i) significant financial difficulty of the issuer or obligor, (ii) information about significant changes with an adverse effect that have taken place in the technological, market, economic or legal environment in which the issuer operates, and indicates that the cost of the investment in equity instrument may not be recovered; and (iii) a significant or prolonged decline in the fair value of the investment below its costs. ‘Significant’ is to be evaluated against the original cost of the investment and ‘prolonged’ against the period in which the fair value has been below its original cost. If an available-for-sale financial asset is impaired, an amount comprising the difference between its acquisition cost (net of any principal repayment and amortisation) and its current fair value, less any impairment loss previously recognised in profit or loss, is transferred from other comprehensive income and recognised in profit or loss. Reversals of impairment losses in respect of equity instruments are not recognised in profit or loss; increase in their fair value after impairment are recognised directly in other comprehensive income.

128




- 19 -


2.13 Cash and cash equivalents Cash and cash equivalents comprise cash on hand and deposits with financial institutions which are subject to an insignificant risk of changes in value.

2.14 Stocks Stocks are stated at the lower of cost (determined on the weighted average basis) and net realisable value. Cost includes all costs in bringing the stocks to their present location and condition. Net realisable value is the estimated normal selling price, less estimated costs necessary to make the sale. Provision is made for deteriorated, damaged, obsolete and slow-moving stocks.

2.15 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 will be required to settle the obligation and the amount of the obligation can be estimated reliably. Provisions are reviewed at each balance sheet date and adjusted to reflect the current best estimate. If it is no longer probable that an outflow of economic resources 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.

2.16 Government grants Government grants are recognised at their fair value where there is reasonable assurance that the grant will be received and all attaching conditions will be complied with. Where the grant relates to an expense item, it is recognised in the profit or loss over the period necessary to match them on a systematic basis to the costs that it is intended to compensate.

2.17 Deferred revenue Deferred revenue represents the revenue allocated to the rebate dollars issued under the Tangs Fashion Lifestyle loyalty programme (see Note 2.22(a)) that are expected to be redeemed but are still outstanding as at the balance sheet date.

2.18 Financial liabilities Initial recognition and measurement Financial liabilities are recognised on the balance sheet 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 and in the case of other financial liabilities, plus directly attributable transaction costs.

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2.18 Financial liabilities (cont’d) Subsequent measurement The measurement of financial liabilities depends on their classification as follows: Financial liabilities at fair value through profit or loss Financial liabilities at fair value through profit or loss includes financial liabilities held for trading and financial liabilities designated upon initial recognition as at fair value. Financial liabilities are classified as held for trading if they are acquired for the purpose of selling in the near term. This category includes derivative financial instruments entered into by the Group that are not designated as hedging instruments in hedge relationships. Separated embedded derivatives are also classified as held for trading unless they are designated as effective hedging instruments. Subsequent to initial recognition, financial liabilities at fair value through profit or loss are measured at fair value. Any gains or losses arising from changes in fair value of the financial liabilities are recognised in profit or loss. The Group has not designated any financial liabilities upon initial recognition at fair value through profit or loss. Other financial liabilities After initial recognition, other financial liabilities are subsequently measured at amortised cost using the effective interest rate method. Gains and losses are recognised in profit or loss when the liabilities are derecognised, and through the amortisation process. Derecognition A financial liability is derecognised 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 derecognition of the original liability and the recognition of a new liability, and the difference in the respective carrying amounts is recognised in profit or loss.

2.19 Borrowing costs Borrowing costs are generally expensed as incurred except to the extent that they are capitalised. Borrowing costs are capitalised if they are directly attributable to the acquisition, construction or production of a qualifying asset. Capitalisation of borrowing costs commences when the activities to prepare the asset for its intended use or sale are in progress and the expenditure and borrowing costs are being incurred. Borrowing costs are capitalised until the assets are ready for their intended use.

2.20 Employee benefits (a) Defined contribution plan

The Group and the Company participate in the national pension schemes as defined by the laws of the countries in which they have operations. The Singapore companies in the Group make contributions to the Central Provident Fund (“CPF”) scheme in Singapore and its subsidiary companies outside Singapore make contributions to their respective countries’ pension schemes. Contributions to defined contribution pension schemes are recognised as an expense in the period in which the related services are performed.

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2.20 Employee benefits (cont’d) (b) Employee leave entitlement

Employee entitlements to annual leave are recognised as a liability when they accrue to employees. The estimated liability for annual leave is recognised for services rendered by employees up to balance sheet date.

(c) Employee share option plans

Employees of the Group receive remuneration in the form of share options as consideration for services rendered.

Equity-settled transactions

The cost of equity-settled transactions with employees is measured by reference to the fair value at the date on which the share options are granted. In valuing the share options, no account is taken of any performance conditions, other than conditions linked to the price of the shares of the Company (‘market conditions’), if applicable.

The cost of equity-settled transactions is recognised in profit or loss together with a corresponding increase in the employee share option reserve, over the period in which the performance and/or service conditions are fulfilled, ending on the date on which the relevant employees become fully entitled to the award (‘the vesting date’). The cumulative expense recognised for equity-settled transactions at each reporting date until the vesting date reflects the extent to which the vesting period has expired and the Group’s best estimate of the number of options that will ultimately vest. The charge or credit to profit or loss for a period represents the movement in cumulative expense recognised as at the beginning and end of that period.

The employee share option reserve is transferred to share capital when the options are exercised if new shares are issued.

2.21 Leases

The determination of whether an arrangement is, or contains a lease is based on the substance of the arrangement at inception date: whether fulfilment of the arrangement is dependent on the use of a specific asset or assets or the arrangement conveys a right to use the asset. For arrangements entered into prior to 1 January 2005, the date of inception is deemed to be 1 January 2005 in accordance with the transitional requirements of INT FRS 104. (a) 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.

(b) As lessor

Leases where the Group retains substantially all the risks and rewards of ownership of the asset are classified as operating leases. Initial direct costs incurred in negotiating an operating lease are added to the carrying amount of the leased asset and recognised over the lease term on the same bases as rental income. The accounting policy for rental income is set out in Note 2.22(e).

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2.22 Revenue recognition 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. Revenue is measured at the fair value of consideration received or receivable. (a) Sale of goods

Revenue is recognised upon the transfer of significant risks and rewards of ownership of the goods to the customer, which generally coincides with delivery and acceptance of the goods sold. Revenue is not recognised to the extent where there are significant uncertainties regarding recovery of the consideration due, associated costs or the possible return of goods.

The Group operates the Tangs Fashion Lifestyle loyalty programme which allows customers to accumulate rebate dollars when they purchase products in the Group’s stores. The rebate dollars can be redeemed to offset future purchases from the Group’s stores. The Group has recognised the full revenue from the sale of goods and recognised a separate liability for the obligation to exchange the rebate dollars for awards.

(b) Revenue on rebate dollars

Revenue on rebate dollars is recognised based on the number of rebate dollars that have been redeemed to offset purchase of goods .

(c) Interest income

Interest income is recognised using the effective interest method. (d) Dividend income

Dividend income is recognised when the Group’s right to receive payment is established. (e) Rental income

Rental income from operating leases (net of any incentives given to the lessee) from the letting of premises is recognised on a straight-line basis over the lease terms.

2.23 Income tax

(a) Current 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 by 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 income tax is provided using the liability method on temporary differences at the balance sheet date between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes.

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2.23 Income tax (cont’d) (b) Deferred tax (cont’d)

Deferred tax liabilities are recognised for all taxable 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 accounting profit nor taxable profit or loss; and

� In respect of taxable temporary differences associated with investments in subsidiaries and

associated companies, 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.

� In respect of deductible temporary differences and carry-forward of unused tax credits and

unused tax losses, if it is not probable that taxable profit will be available against which the deductible temporary differences and carry-forward of unused tax credits and unused tax losses can be utilised.

The carrying amount of deferred income tax assets is reviewed at each balance sheet date 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 income tax asset to be utilised. Unrecognised deferred income tax assets are reassessed at each balance sheet date and are recognised to the extent that it has become probable that future taxable profit will allow the deferred tax asset to be recorded. Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply to 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 balance sheet date. Deferred income tax relating to items recognised outside profit or loss is recognised outside profit or loss. Deferred tax items are recognised in correlation to the underlying transaction either in other comprehensive income or directly in equity and deferred tax arising from a business combination is adjusted against goodwill on acquisition. Deferred income tax assets and deferred income tax liabilities are offset, if a legally enforceable right exists to set off current income tax assets against current income tax liabilities and the deferred income taxes relate to the same taxable entity and the same taxation authority.

(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. The net amount of sales tax recoverable from, or payable to, the taxation authority is included as part of receivables or payables in the balance sheet.

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2.24 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. 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.

2.25 Related parties

A party is considered to be related to the Group if: (a) The party, directly or indirectly through one or more intermediaries,

(i) controls, is controlled by, or is under common control with, the Group; (ii) has an interest in the Group that gives it significant influence over the Group; or (iii) has joint control over the Group;

(b) The party is an associate; (c) The party is a jointly-controlled entity; (d) The party is a member of the key management personnel of the Group or its parent; (e) The party is a close member of the family of any individual referred to in (a) or (d); or (f) The party is an entity that is controlled, jointly controlled or significantly influenced by or for

which significant voting power in such entity resides with, directly or indirectly, any individual referred to in (d) or (e); or

(g) The party is a post-employment benefit plan for the benefit of the employees of the Group, or of

any entity that is a related party of the Group.

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3. Significant accounting estimates and judgements Estimates and assumptions concerning the future and judgements are made in the preparation of the financial statements. They affect the application of the Group’s and the Company’s accounting policies, reported amounts of assets, liabilities, income and expenses, and disclosures made. They are assessed on an on-going basis and are based on experience and relevant factors, including expectations of future events that are believed to be reasonable under the circumstances. (a) Key sources of estimation uncertainty

The key assumptions concerning the future and other key sources of estimation uncertainty at the balance sheet date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below:

(i) Impairment of investments in subsidiaries and advances to subsidiaries

The Company assesses at each reporting date whether there is an indication that the investments in subsidiaries and advances to subsidiaries may be impaired. This requires an estimation of the value in use of the cash generating units. Estimating the value in use requires the Company to make an estimate of the expected future cash flows from the cash-generating units and also to choose a suitable discount rate in order to calculate the present value of those cash flows. The carrying amounts of the Company’s investments in subsidiaries and advances to subsidiaries at 31 March 2011 are disclosed in Note 7 to the financial statements.

(ii) Useful lives of fixtures, fittings, furniture and equipment

The cost of fixtures, fittings, furniture and equipment is depreciated on a straight-line basis over their respective useful lives. Management estimates the useful lives of these fixtures, fittings, furniture and equipment to be 3-10 years. These are common life expectancies applied in the industry. The carrying amounts of the Group’s and the Company’s fixtures, fittings, furniture and equipment at 31 March 2011 are disclosed in Note 6 to the financial statements. Changes in the expected level of usage could impact the economic useful lives and the residual values of these assets, therefore future depreciation charges could be revised.

(iii) Valuation of freehold property

The Group has revalued the freehold property located at 310/320 Orchard Road, Singapore 238864/238865, based on the valuation report by an independent professional valuer on an open market basis. This requires an estimation of the market value of the freehold property based on available market information. Any changes in the market value would create an impact on the valuation of the freehold property. The carrying amount of the Group’s freehold property is disclosed in Note 6 to the financial statements.

(iv) Income taxes

The Group has exposure to income taxes in Singapore and Malaysia jurisdictions. Significant judgement is involved in determining the group-wide provision for income taxes. There are certain transactions and computations for which the ultimate tax determination is uncertain during the ordinary course of business. The Group recognises liabilities for expected tax issues based on estimates of whether additional taxes will be due. Where the final tax outcome of these matters is different from the amounts that were initially recognised, such differences will impact the income tax and deferred tax provisions in the period in which such determination is made. The carrying amounts of the Group’s tax payables and deferred tax liabilities at 31 March 2011 were $2,915,000 (2010: $1,408,000) and $2,606,000 (2010: $2,639,000) respectively.

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3. Significant accounting estimates and judgements (cont’d) (a) Key sources of estimation uncertainty (cont’d)

(v) Allowance for stocks obsolescence

A review is made periodically on stocks for excess stocks, obsolescence and declines in net realisable value below cost and an allowance is recorded against the stocks balance for any such declines. These reviews require management to estimate future demand for the products. Possible changes in these estimates could result in revisions to the valuation of stocks.

(vi) Accrued closure costs

The Group has recognised accrued closure costs associated with the reinstatement costs and termination of lease agreements costs for store premises. In determining the amount, assumptions and estimates are made in relation to expected costs of reinstatement/termination and the timing of these costs. The carrying amount of accrued closure costs as of 31 March 2011 was $2,010,000 (2010: $1,560,000).

(b) Critical judgements made in applying accounting policies

The following is the judgement made by management in the process of applying the Group’s accounting policies that have the most significant effect on the amounts recognised in the financial statements.

Impairment review of fixed assets and financial assets The Group follows the guidance of FRS 36 and 39 in determining when a fixed asset or financial asset is impaired. The determination requires significant judgement of, among other factors, the duration and extent to which the fair value of the asset is less than its carrying value; and the financial health of and near-term business outlook for the business operations or financial asset, including factors such as industry and sector performance, changes in operating and financing cash flow. The carrying amounts of the Group’s and Company’s fixed assets and financial assets at 31 March 2011 are disclosed in Note 6, Note 9 and Note 11 to the financial statements respectively.

4. Share capital

Group and Company 2011 2010 No. of

shares Amount No. of shares

Amount

'000 $'000 '000 $'000 Issued and fully paid At beginning and end of financial year 236,984 47,848 236,984 47,848

The holders of ordinary shares are entitled to receive dividends as and when declared by the Company. All ordinary shares carry one vote per share without restriction. The ordinary shares have no par value. The C.K. Tang Share Option Scheme 2002 (the “Scheme”) approved by the members of the Company provides an opportunity for employees of the Company and its subsidiaries, other than substantial shareholders of the Company, to participate in the equity of the Company. The Scheme shall continue to be in force for a period of 10 years from 31 January 2002. However the period may be extended with the approval of members at a general meeting of the Company and of any relevant authorities which may then be required.

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4. Share capital (cont’d) At the end of the financial year, details of the options granted under the Scheme on the unissued ordinary shares of the Company were as follows:

Date of grant

Balance as at

1.4.2010 Options granted

Options lapsed/

cancelledOptions

exercised

Balance as at

31.3.2011

No. of holders

as at 31.3.2011

Exercise price

$ Exercise period

2.5.2002 4,000 – – – 4,000 1 0.20 2.5.2003 -

2.5.2012 5. Reserves

Group Company 2011 2010 2011 2010 $’000 $’000 $’000 $’000 Asset revaluation reserve 253,917 242,824 – – Translation reserve (8,169) (8,026) – – Fair value adjustment reserve 290 278 290 278 Revenue reserve (52,468) (59,478) 40,370 40,136 Discount on acquisition of non-controlling interests 117 117 –

–

193,687 175,715 40,660 40,414

(a) The asset revaluation reserve represents increases in the fair value of freehold land and

building and decreases to the extent that such decrease relates to an increase on the same asset previously recognised in other comprehensive income.

(b) The translation reserve represents exchange differences arising from the translation of the

financial statements of foreign operations whose functional currencies are different from that of the Group’s presentation currency.

(c) The fair value adjustment reserve represents the cumulative fair value changes of available-for-

sale financial assets until they are disposed of or impaired. (d) The discount on acquisition of non-controlling interests represents the difference between the

consideration and the book value of the interest acquired of $117,000.

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6. Fixed assets At valuation At cost

Group

Freehold land

Building and building

improvements

Fixtures, fittings, furniture

and equipment

Motor vehicles

Construction-in-progress Total

$’000 $’000 $’000 $’000 $’000 $’000 Cost or valuation At 1 April 2009 308,921 31,079 65,512 675 315 406,502 Additions – – 3,005 – – 3,005 Disposals/write-offs – – (3,667) (124) – (3,791)Disposal of subsidiary – – (7,349) (136) – (7,485)Reclassifications – – 307 – (307) – Revaluation surplus 9,086 2,120 – – – 11,206 Elimination of accumulated depreciation on revaluation – (1,206) – – – (1,206)Exchange differences – – 272 4 – 276

At 31 March 2010 and 1 April 2010 318,007 31,993 58,080 419 8 408,507 Additions – – 3,179 – 43 3,222 Disposals/write-offs – – (2,549) (60) – (2,609)Revaluation surplus 10,220 1,029 – – – 11,249 Elimination of accumulated depreciation on revaluation – (1,249) – – – (1,249)Exchange differences – – (84) – – (84)

At 31 March 2011 328,227 31,773 58,626 359 51 419,036 Accumulated depreciation and impairment

At 1 April 2009 – – 46,828 500 – 47,328 Charge for the financial year – 1,206 5,509 86 – 6,801 Disposals/write-offs – – (3,603) (124) – (3,727)Disposal of subsidiary – – (2,638) (86) – (2,724)Write-back of impairment loss – – (76) – – (76)Elimination due to upward revaluation – (1,206) – – – (1,206)Exchange differences – – 159 3 – 162

At 31 March 2010 and 1 April 2010 – – 46,179 379 – 46,558 Charge for the financial year – 1,249 4,273 24 – 5,546 Disposals/write-offs – – (2,378) (60) – (2,438)Write-back of impairment loss – – (21) – – (21)Elimination due to upward revaluation – (1,249) – – – (1,249)Exchange differences – – (73) – – (73)

At 31 March 2011 – – 47,980 343 – 48,323 Net carrying amount At 31 March 2010 318,007 31,993 11,901 40 8 361,949

At 31 March 2011 328,227 31,773 10,646 16 51 370,713

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6. Fixed assets (cont’d) At cost

Company

Fixtures, fittings,

furniture and equipment

Motor vehicles

Construction-in-

progress

Total Cost $’000 $’000 $’000 $’000 At 1 April 2009 48,256 540 178 48,974 Additions 2,518 – – 2,518 Disposals/write-offs (2,712) (124) – (2,836) Reclassifications 178 – (178) – At 31 March 2010 and 1 April 2010 48,240 416 – 48,656 Additions 3,040 – 43 3,083 Disposals/write-offs – (60) – (60) At 31 March 2011 51,280 356 43 51,679 Accumulated depreciation and impairment At 1 April 2009 36,908 454 – 37,362 Charge for the financial year 3,535 63 – 3,598 Disposals/write-offs (2,712) (124) – (2,836) At 31 March 2010 and 1 April 2010 37,731 393 – 38,124 Charge for the financial year 3,553 23 – 3,576 Disposals/write-offs – (60) – (60) At 31 March 2011 41,284 356 – 41,640 Net carrying amount At 31 March 2010 10,509 23 – 10,532

At 31 March 2011 9,996 – 43 10,039 As at 31 March 2011, the value of the freehold property of the Group located at 310/320 Orchard Road, Singapore 238864/238865, was $360,000,000 (2010 : $350,000,000) based on an independent professional valuation report dated 31 March 2011. The valuation was carried out by Jones Lang LaSalle Property Consultants Pte Ltd, a firm of professional valuers, on an open market existing use basis. Had the freehold property been stated at cost, its carrying amount at the end of the financial year would have been approximately $68,627,000 (2010 : $69,238,000). Freehold land and building of the Group with a carrying amount of $360,000,000 (2010: $350,000,000) have been pledged to secure banking facilities as stated in Note 13 to the financial statements. As at 31 March 2011, the freehold land of the Group has been stated at a valuation of approximately $328,227,000 (2010: $318,007,000). No depreciation is provided on the freehold land in accordance with the Group’s accounting policy.

7. Subsidiaries

Company 2011 2010 $’000 $’000 Unquoted equity shares at cost 165,958 165,958 Impairment losses (45,258) (45,258) 120,700 120,700 Advances to subsidiaries 39,304 37,086 Impairment losses (37,086) (37,086) 2,218 – Advances from subsidiaries (29,053) (19,689) Total 93,865 101,011

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7. Subsidiaries (cont’d) The advances to subsidiaries are unsecured, interest-free and are not expected to be repayable within the next twelve months from the balance sheet date. The impairment loss on advances to subsidiaries is measured as the difference between the carrying amount of the advances and the present value of estimated future cash flows discounted at the respective subsidiaries’ effective borrowing rates. Details of the subsidiaries are as follows:

Country of incorporation and place of

Effective equity interest held by

the Group Cost of

investment Name of company Principal activities business 2011 2010 2011 2010 % % $’000 $’000 Clinton (Pte.) Ltd Dormant Singapore 100 100 750 750 Associated Catering Pte Ltd

Food catering, operation of beverage outlets and cafes

Singapore 100 100 101 101

Gamut Marketing Pte Ltd

Retailing of fashion apparel and trading in general merchandise

Singapore 100 100 22,000 22,000

C.K. Tang Properties (Singapore) Pte Ltd

Maintaining and owning property

Singapore 100 100 120,700 120,700

Tangs Department Store (Holdings) Sdn Bhd

Dormant Malaysia 100 100 14,000 14,000

C.K.Tang Sdn. Bhd Dormant Malaysia 100 100 ** ** Gamut Marketing Sdn Bhd


Malaysia 100 100 8,407 8,407

Held by subsidiaries Island Shop International Pte. Ltd.


Singapore 100 100 – –

C.K. Tang Properties (M) Sdn Bhd

Dormant Malaysia 100 100 – –

Timeless Value Sdn Bhd

Dormant Malaysia 100 100 – –

Island Catering Sdn Bhd

Food catering, operation of beverage outlets and cafes

Malaysia 70 70 – –

165,958 165,958

** Denotes amounts less than $1,000. 8. Associated company

Group 2011 2010 $’000 $’000 Unquoted equity shares at cost 3 3 Share of post-acquisition reserves 701 787

704 790

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8. Associated company (cont’d)

Name of company Principal activities

Country of incorporation and place of

business

Effective equity interest held by

the Group Cost of

investment 2011 2010 2011 2010 Held by C.K.Tang % % $’000 $’000 Properties (Singapore) Pte Ltd

Legacy (Tang Plaza) Pte Ltd

Letting out premises and equipment and provision of related ancillary services

Singapore 28.31 28.31 3 3

The summarised financial information of the associated company is as follows: 2011 2010 $’000 $’000 Assets and liabilities: Total assets 4,278 3,371 Total liabilities (1,843) (575) Results: Revenue 2,419 1,989 Net profit for the financial year 696 1,356

9. Available-for-sale investments

Group Company 2011 2010 2011 2010 $’000 $’000 $’000 $’000 Non-current Equity shares at cost - unquoted 131 131 1 1 Impairment loss (130) (130) – –

1 1 1 1

Current Equity shares at cost - quoted 86 99 86 99 Fair value adjustment reserve 290 278 290 278

Equity shares at fair value - quoted 376 377 376 377

Total available-for-sale financial assets 377 378 377 378 The above unquoted investment includes a 26% interest in Bianca (S) Pte Ltd (“Bianca”), a company incorporated in Singapore, amounting to $130,000 by Gamut Marketing Pte Ltd (“Gamut”). In the opinion of the directors, Gamut does not exercise significant influence over Bianca’s financial and operating policy decisions. Accordingly, the investment has not been accounted for as an associated company. Other than the amount invested, Gamut has no further financial commitment in respect of Bianca. The fair value of unquoted equity shares above cannot be reliably determined as these equity shares do not have quoted market prices in an active market nor are other methods of reasonably estimating the fair values readily available. Accordingly, these investments are not re-measured to their fair values. Movements in fair value adjustment reserve during the financial year: Group and Company 2011 2010 $’000 $’000 At beginning of financial year 278 133 Disposal of investments (27) – Net unrealised gain on investments 39 145

At end of the financial year 290 278

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10. Stocks Group Company 2011 2010 2011 2010 $’000 $’000 $’000 $’000 Balance sheets: Goods-in-transit 174 258 71 129 Raw materials – 74 – – Finished goods 16,720 18,213 15,519 14,484

16,894 18,545 15,590 14,613

Statement of comprehensive income: Stocks recognised as an expense in cost of sales 80,698

84,024

69,337 69,989

Inclusive of the following charges: - Stocks (written-back)/written-down (795) 2,030 516 (16) - Stocks written-off 422 834 239 143

The write-back of allowance for stocks obsolescence is made during the current financial year when the related stocks were sold.

11. Trade and other debtors Group Company 2011 2010 2011 2010 $’000 $’000 $’000 $’000 Trade debtors 4,884 5,675 3,843 3,731 Rental and other deposits 712 1,028 218 381 Prepayments 316 343 252 258 Tax recoverable 56 47 13 13 Sundry debtors 293 513 155 409 Allowance for impairment (381) (278) (266) (182)

Total trade and other debtors 5,880 7,328 4,215 4,610 Less: Prepayments (316) (343) (252) (258) Add: Cash and cash equivalents (Note 21) 17,891 11,135 10,527 5,621

Total loans and receivables 23,455 18,120 14,490 9,973 Trade and sundry debtors are non-interest bearing and are generally on 30 days’ terms. They are recognised at their original invoice amounts which represent their fair value on initial recognition. Trade debtors that are past due but not impaired The Group and the Company have trade debtors amounting to $1,274,000 (2010: $1,558,000) and $709,000 (2010: $819,000) that are past due at the balance sheet date but not impaired. These debtors are unsecured and the analysis of their aging at the balance sheet date is as follows:- Less than 30 days 944 870 489 336 30 to 60 days 175 27 147 7 61 to 90 days 59 147 38 68 91 to 120 days 9 3 – 51 More than 120 days 87 511 35 357

1,274 1,558 709 819

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11. Trade and other debtors (cont’d) Trade and other debtors that are impaired The Group’s and Company’s trade and other debtors that are individually impaired at the balance sheet date and the movement of the allowance accounts used to record the impairment are as follows: Group Company 2011 2010 2011 2010 $’000 $’000 $’000 $’000 Trade debtors - nominal amounts 298 210 249 182 Other debtors - nominal amounts 83 68 17 – Allowance for impairment - trade debtors (298) (210) (249) (182) - other debtors (83) (68) (17) –

– – – – Movement in allowance account:- (i) Trade debtors

At 1 April 210 91 182 81 Charge for the financial year 248 180 223 152 Write-back against allowance (160) (61) (156) (51)

At 31 March 298 210 249 182 (ii) Other debtors

At 1 April 68 103 – – Charge for the financial year 17 – 17 – Write-back against allowance (2) – – – Written off – (35) – –

At 31 March 83 68 17 – Trade and other debtors that are individually determined to be impaired at the balance sheet date relate to debtors that are in significant financial difficulties and have defaulted on payments. These receivables are not secured by any collateral or credit enhancements.

12. Trade and other creditors

Trade creditors 35,828 31,486 35,249 30,005 Other creditors 2,966 2,761 2,788 2,565 Accrued retirement benefits and unutilised leave 71 188 62 163 Accrued closure costs 2,010 1,560 1,310 1,265 Other accrued operating expenses 5,638 4,953 4,738 3,582

Total trade and other creditors 46,513 40,948 44,147 37,580 Add: Bank borrowings (Note 13) 118,750 131,150 – 9,400

Total financial liabilities at amortised cost 165,263 172,098 44,147 46,980 Trade and other creditors are non-interest bearing and are generally on 30 to 60 days’ terms. They are recognised at their original invoice amounts which represent their fair value on initial recognition. During the year, there was a reversal of provision for expired liabilities of $227,000 (2010: $1,199,000) (Note 16). As at 31 March 2011, other creditors included deposits received of $283,000 (2010: $280,000). Accrued closure costs relate mainly to provision for reinstatement costs and termination of lease agreements costs.

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13. Bank borrowings Group Company 2011 2010 2011 2010 $’000 $’000 $’000 $’000 Current (secured): Loan A: SGD fixed rate – 11,900 – 9,400 Loan B: SGD floating rate 500 500 – –

500 12,400 – 9,400 Non-current (secured): Loan B: SGD floating rate 118,250 118,750 – –

The Group’s and Company’s bank Loan A and Loan B balances are secured by the following: - Open mortgage over freehold land and building (Note 6) at 310/320 Orchard Road, Singapore

238864/238865 which is owned by a wholly-owned subsidiary, C.K. Tang Properties (Singapore) Pte Ltd;

- Corporate Guarantee from the Company; and - Lease Agreement between wholly-owned subsidiary, C.K. Tang Properties (Singapore) Pte Ltd and

the Company, and the rental proceeds thereto, to be assigned to the Bank. Loan A The Group’s and the Company’s bank Loan A amounting to $11,900,000 and $9,400,000 respectively were fully repaid as at 31 March 2011. The Group’s and the Company’s bank loan A carried an effective interest rate of 2.5% p.a. (2010: 2.92% p.a.) and 2.37% p.a. (2010: 2.92% p.a.) respectively. Loan B The Group’s bank Loan B amounting to $118,750,000 (2010: $119,250,000) carries a floating interest rate of 1.73% p.a. (2010: 1.89% p.a.) which is re-priced at one to six months duration. The loan is repayable in 9 equal semi-annual principal instalments of $250,000 each commencing on 31 December 2008 and a lump sum payment of $117,750,000 on 30 June 2013. The fourth and fifth instalments amounting to $500,000 have been paid during the year. As at 31 March 2011, the effective interest rate for the term loan was 1.79% p.a. (2010: 2.34% p.a.).

14. Derivatives

2011 $'000

2010 $'000

Group Contract/

notional amount Assets LiabilitiesContract/

notional amount Assets Liabilities Interest rate swap – – – 15,000 – 69 Interest rate swap In 2010, an interest rate swap was entered into by the Group to partially hedge the interest rate risk arising from a floating rate term loan amounting to $15,000,000. Under the interest rate swap arrangement, the Group effectively received a floating interest equal to 6-month SIBOR and paid fixed interest rate of 1.23% per annum. The interest rate swap had a notional amount of $15,000,000 and matured in November 2010. The Group did not apply hedge accounting in respect of the above interest rate swap contract. As at 31 March 2010, the total fair value of the interest rate swap was $69,000. No new interest rate swaps were entered into by the Company during the current financial year.

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15. Turnover Turnover represents invoiced value of the sale of the Group’s own goods and concessionaire sales on net basis, net of discounts and excluding goods and services tax. Intra-group transactions have been excluded from the Group’s turnover.

16. Other operating income

Group 2011 2010 $’000 $’000 Dividend income from available-for-sale investments 26 18Rental income 1,621 2,022 Reversal of provision for expired liabilities 227 1,199 Sale of scrapped stocks 424 50 Others 580 556 2,878 3,845

17. Profit/(loss) from operations before taxation

This is determined after charging/(crediting) the following: Depreciation of fixed assets 5,546 6,801Directors’ emoluments 605 496 Directors’ fees - directors of the Company 104 174 - directors of the subsidiaries 15 48 Foreign exchange gain, net (120) (54) Fixed assets written off 117 43 Stocks written off 422 834 Loss/(gain) on disposal of fixed assets 15 (27) Loss on disposal of investment in a subsidiary – 8,482 Operating lease expenses 6,986 9,390 Allowance for impairment loss relating to debtors, net 263 180 (Write-back of)/allowance for stocks obsolescence, net (795) 2,030 Reversal of provision for expired liabilities (227) (1,199) Write-back of impairment on fixed assets (21) (76) Provision for/(write-back of) closure costs 438 (70)

18. Staff costs

Wages, salaries and bonuses 21,193 22,113Provident fund contributions 2,226 2,364 Other staff related expenses 1,500 1,015 Jobs Credit subsidy (78) (1,142) 24,841 24,350 On 22 January 2009, the Singapore Finance Minister announced the introduction of a Jobs Credit Scheme (the “Scheme”). Under this Scheme, the Group received a 12% cash grant on the first $2,500 of each month’s wages for each employee on their Central Provident Fund payroll. Subsequently, the Group received 6% and 3% for the remaining 2 quarters respectively. The Scheme was for one and a half years.

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18. Staff costs (cont’d) The above included key management personnel emoluments. The details are as follows: Group 2011 2010 $’000 $’000Key management personnel emoluments: Salaries and bonuses (net of Jobs Credit subsidy) 1,535 1,569 Provident fund contributions 49 74 Other staff related expenses 174 173 1,758 1,816 Comprising amounts paid to : Directors of the Company 605 496 Other key management personnel 1,153 1,320 1,758 1,816

19. Financial expenses/(income) Financial expenses comprise interest expense on bank borrowings, of $2,358,000 (2010: $3,343,000). Financial income comprises interest income on fixed deposits, of $4,000 (2010: $3,000).

20. Taxation The major components of income tax expense for the years ended 31 March are as follows: Group 2011 2010 $’000 $’000(i) Statement of comprehensive income

Current taxation - current year 2,118 906 - (overprovision)/underprovision in respect of prior year (155) 354

1,963 1,260

Deferred taxation - current year 43 (139)

43 (139)

Total income tax charge 2,006 1,121 (ii) Statements of changes in equity

Deferred income tax related to items charged directly to equity Net surplus on revaluation of freehold property 156 156

Income tax expense reported in equity 156 156 The reconciliation of the tax expense and the product of accounting profit/(loss) multiplied by the applicable tax rate is as follows: Accounting profit/(loss) 9,006 (9,096) Tax at 17% (2010 : 17%) 1,531 (1,546) Adjustments: Tax effect of expenses not deductible for tax purposes 2,422 8,937 Tax effect of income not subject to tax (1,856) (6,550) Tax effect of different tax rate in Malaysia (85) (430) Current tax – (overprovision)/underprovision in respect of prior year (155) 354 Utilisation of deferred tax assets previously not recognised (206) (139) Deferred tax assets not recognised 380 483 Others (25) 12

2,006 1,121

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20. Taxation (con’td) Deferred taxation as at 31 March related to the following: Group Company 2011 2010 2011 2010 $’000 $’000 $’000 $’000 Deferred tax liability: Revaluation of freehold property to fair value 1,782 1,703

–

–

Differences in depreciation 824 936 824 936

2,606 2,639 824 936

Unrecognised tax losses As at 31 March 2011, the Group had unutilised tax losses of approximately $27,862,000 (2010: $29,233,000) and unabsorbed capital allowances of approximately $3,732,000 (2010: $4,761,000) available for set off against future profits, and giving rise to deferred tax assets of $5,334,000 (2010: $5,779,000). The deferred tax assets are not recognised due to uncertainty of its recoverability. The use of the unutilised tax losses and unabsorbed capital allowances is subject to the agreement of the tax authorities and compliance with certain provisions of the tax legislation of the respective countries in which the companies operate.

21. Cash and cash equivalents

Group Company 2011 2010 2011 2010 $’000 $’000 $’000 $’000 Fixed deposits 694 197 – – Cash and bank balances 17,197 10,938 10,527 5,621

Cash and cash equivalents 17,891 11,135 10,527 5,621

Bank balances do not earn interest. Fixed deposits are placed for varying periods of between one day and three months depending on the immediate cash requirements of the Group, and earn interest at the respective fixed deposit rates. The fixed deposits as at 31 March 2011 earned an effective interest rate of 2.65% p.a. (2010: 1.50% p.a.). As at 31 March 2011, $194,000 of fixed deposits (2010: $197,000) had been pledged to secure banking facilities. For the purpose of the consolidated cash flow statement, cash and cash equivalents comprise the following at the balance sheet date: Group 2011 2010 $’000 $’000 Fixed deposits, cash and bank balances 17,891 11,135 Less: Fixed deposits pledged (194) (197)

Cash and cash equivalents 17,697 10,938

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22. Related party information

Besides the related party information disclosed elsewhere in the financial statements, there are no other related party transactions.

23. Contingent liabilities and commitments

(a) Contingent liabilities

Contingent liabilities not provided for in the financial statements: Company 2011 2010 $’000 $’000

Guarantees provided by the Company to secure banking and other facilities of certain subsidiaries 122,827

136,231

In addition to the above, in the ordinary course of business, to enable its subsidiaries to operate as going concerns for at least twelve months from the financial year end, the Company has given undertakings to provide continuing financial support to certain subsidiaries.

(b) Non-cancellable operating lease commitments

The Group has various operating lease agreements for the retail outlets and most of these leases contain renewal options with provision for rental adjustments.

Group 2011 2010 $’000 $’000

Future minimum lease payments - not later than 1 year 7,601 9,471 - 1 year to 5 years 23,747 5,831 - more than 5 years 2,785 –

34,133 15,302

24. Future rental income

Rental income receivable from non-cancellable operating leases Group and Company 2011 2010 $’000 $’000 Future minimum rental income receivable - not later than 1 year 1,476 1,495 - 1 year to 5 years 7 –

1,483 1,495

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25. Financial instruments Financial risk management objectives and policies The main risks arising from the Group’s financial instruments are interest rate risk, liquidity risk, foreign currency risk and credit risk. The Group’s risk management approach seeks to minimise the potential material effects from such risk exposure. The Board reviews and agrees policies for managing each of these risks and ensures appropriate measures are implemented in a timely and effective manner. Interest rate risk The Group obtains additional financing through bank borrowings. The Group’s exposure to market risk for changes in interest rates results mainly from its debt obligations. The Group uses derivative financial instruments to partially hedge its interest rate risk and manages its interest cost partially by using a mix of fixed and variable debt. To manage this mix in a cost-efficient manner, the Group enters into interest rate swaps. At the balance sheet date, after taking into account the effect of an interest rate swap, approximately Nil% (2010: 11%) of the Group’s borrowings are at fixed rates of interest. The Group’s loans at floating rates are contractually re-priced at intervals of 1 to 6 months. Sensitivity analysis for interest rate risk At 31 March 2011, if SGD interest rates had been 50 (2010: 50) basis points lower/higher with all other variables held constant, the Group’s profit net of taxation (2010: Group’s loss net of taxation) would have been $121,515 (2010: $119,315) higher/lower (2010: lower/higher), arising mainly as a result of lower/higher interest expense on floating rate bank borrowings. Information relating to the Group’s interest rate exposure is disclosed in the notes on the Group’s borrowings. Liquidity risk In the management of its liquidity risk, the Group monitors and maintains a level of cash and cash equivalents deemed adequate to finance the Group’s operations and mitigate the effects of fluctuations in cash flows. The management monitors the utilisation of bank borrowings and ensures compliance with loan covenants. The Group relies on bank borrowings as a significant source of liquidity. As at 31 March 2011, the Group and the Company have available unutilised overdraft and short-term bank loan facilities of approximately $37.59 million (2010: $24.20 million) and $36.06 million (2010: $23.30 million) respectively.

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25. Financial instruments (cont’d) Liquidity risk (cont’d) Analysis of financial instruments by the remaining contractual maturities The table below summarises the maturity profile of the Group’s and the Company’s financial assets and liabilities at the balance sheet date based on contractual undiscounted payments. 2011 2010

Group Within 1 year

Within 2 to 5 years Total

Within 1 year

Within 2 to 5 years Total

$’000 $’000 $’000 $’000 $’000 $’000 Financial assets: Available-for-sale investments 376 1 377 377 1 378 Trade and other debtors (excluding

prepayments) 5,564 – 5,564 6,985 – 6,985 Cash and cash equivalents 17,891 – 17,891 11,135 – 11,135

Total undiscounted financial assets 23,831 1 23,832 18,497 1 18,498 Financial liabilities: Trade and other creditors 46,513 – 46,513 40,948 – 40,948 Bank borrowings 2,039 121,312 123,351 14,016 124,343 138,359 Derivatives – – – 69 – 69

Total undiscounted financial liabilities 48,552 121,312 169,864 55,033 124,343 179,376

Total net undiscounted financial liabilities (24,721) (121,311) (146,032) (36,536) (124,342) (160,878)

Company Financial assets: Available-for-sale investments 376 1 377 377 1 378 Trade and other debtors (excluding

prepayments) 3,963 – 3,963 4,352 – 4,352 Cash and cash equivalents 10,527 – 10,527 5,621 – 5,621

Total undiscounted financial assets 14,866 1 14,867 10,350 1 10,351 Financial liabilities: Trade and other creditors 44,147 – 44,147 37,580 – 37,580 Bank borrowings – – – 9,423 – 9,423 Advances from subsidiaries – 29,053 29,053 – 19,689 19,689

Total undiscounted financial liabilities 44,147 29,053 73,200 47,003 19,689 66,692

Total net undiscounted financial liabilities (29,281) (29,052) (58,333) (36,653) (19,688) (56,341)

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25. Financial instruments (cont’d) Foreign currency risk The Group purchases stocks from several countries and, as a result, is exposed to movements in foreign currency rates. The Company is also exposed to foreign exchange movements on its investments in and advances to foreign subsidiaries. Currently, the Group does not normally hedge its foreign currency exposure using derivative financial instruments. However, management monitors foreign currency exposure and will consider hedging significant foreign currency exposure should the need arise. It is the policy of the Group not to trade in derivative foreign currency contracts. Whenever possible, in their respective dealings with third parties, the companies in the Group use their respective functional currencies to minimise foreign currency risk. The Group’s foreign exchange exposures are primarily from US dollar (USD), Malaysian Ringgit (MYR), Euro (EUR), Hong Kong dollar (HKD) and Sterling Pound (GBP). The following balances of the Group and the Company are denominated in foreign currencies: 2011 2010 MYR USD EUR HKD GBP MYR USD EUR HKD GBP $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 Group Trade and other debtors 952 – – – – 1,300 – – – –Cash and cash equivalents 3,578 5 62 – – 1,941 8 27 – –Trade and other creditors 399 20 35 49 49 701 225 254 21 265

Company Cash and cash equivalents – – 62 – – – 1 27 – –Trade and other creditors 11 15 36 49 43 – 23 253 21 6

Sensitivity analysis for foreign currency risk The Group’s profit/(loss) net of taxation does not change significantly to a reasonably possible change in the exchange rates except for MYR. The following table demonstrates the sensitivity to a reasonably possible change in the MYR (against SGD), with all other variables held constant, of the Group’s profit/(loss) net of tax. Group 2011 2010 $’000 $’000 Profit net

of taxation Loss net

of taxation Increase/

(decrease) Increase/

(decrease) MYR - strengthened 3% (2010: 3%) 103 (63) - weakened 3% (2010: 3%) (103) 63

The Company’s profit/(loss) net of taxation does not change significantly to a reasonably possible change in the exchange rates.

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25. Financial instruments (cont’d) Credit risk The Group’s maximum exposure to credit risk in the event of the counterparties’ failure to perform their obligations as at 31 March 2011 in relation to each class of recognised financial asset is the carrying amount of those assets as stated in the balance sheets. Credit risk is managed through the application of credit approvals, credit limits and monitoring procedures. The credit risk concentration profile of the Group’s net trade debtors by geographical locations as at 31 March is as follows: Group 2011 2010 $’000 % of total $’000 % of total Singapore 3,339 73 4,015 73 Malaysia 1,247 27 1,450 27

4,586 100 5,465 100 The Group has no significant concentration of credit risk in relation to any single external debtor. Financial assets that are neither past due or impaired Trade and other debtors that are neither past due nor impaired mainly comprise debtors with good payment records. Cash and cash equivalents and investment securities are placed with or entered into with reputable financial institutions or companies with high credit ratings and no history of defaults. Financial assets that are impaired Information regarding financial assets that are either past due or impaired is disclosed in Note 11 to the financial statements. Market price risk Market price risk is the risk that the fair value or future cash flows of the Group’s financial instruments will fluctuate because of changes in market prices (other than interest or exchange rates). The Group’s exposure to equity price risk is not significant as the Group does not have significant investment in quoted equity instruments. The Group does not have exposure to commodity price risk.

26. Fair values of financial instruments

A. Fair value of financial instruments that are carried at fair value

Fair value hierarchy The Group classifies fair value measurement using a fair value hierarchy that reflects the significance of the inputs used in making the measurements. The fair value hierarchy has the following levels: � Level 1 – Quoted prices (unadjusted) in active markets for identical assets or liabilities � Level 2 – Inputs other than quoted prices included within Level 1 that are observable

for the asset or liability, either directly (i.e., as prices) or indirectly (i.e., derived from prices), and

� Level 3 – Inputs for the asset or liability that are not based on observable market data (unobservable inputs)

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26. Fair values of financial instruments (cont’d)

A. Fair value of financial instruments that are carried at fair value (cont’d) Fair value hierarchy (cont’d) The following table shows an analysis of financial instruments carried at fair value by level of fair value hierarchy:

Group

Quoted pricesin active

markets for identical

instruments

Significant other

observable inputs

Significant unobservable

inputs Total (Level 1) (Level 2) (Level 3) Financial assets: $’000 $’000 $’000 $’000 Available-for-sale financial assets

(Note 9): - Equity instruments (quoted) 376 – – 376

At 31 March 2011 376 – – 376

Determination of fair value Equity instruments (quoted) (Note 9): Fair value is determined directly by reference to their published market bid price at the balance sheet date. Derivatives (Note 14): Interest rate swaps are valued using a valuation technique with market observable inputs. The most frequently applied valuation techniques include swap models, using present value calculations. The models incorporate various inputs including the credit quality of counterparties and interest rate curves.

B. Fair value of financial instruments by classes that are not carried at fair value and whose

carrying amounts are reasonable approximation of fair value Cash and cash equivalents, trade and other debtors, trade and other creditors The carrying amount approximates fair value due to their short-term nature. Bank borrowings The fair values of bank borrowings with interest rates that are repriced frequently between one to six months approximate their carrying amounts.

27. Capital management

The primary objective of the Group’s capital management is to ensure that it maintains healthy capital ratios in order to support its business operations and investments and to maximise shareholder value.

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. The Group also monitors its compliance with bank borrowings covenants. No changes were made in the objectives, policies or processes during the years ended 31 March 2011 and 31 March 2010.

28. Authorisation of financial statements

The financial statements for the financial year ended 31 March 2011 were authorised for issue in accordance with a resolution of the directors on 1 August 2011.



NOTICE OF EXTRAORDINARY GENERAL MEETING

NOTICE IS HEREBY GIVEN THAT an Extraordinary General Meeting of C.K. Tang Limited (the

“Company”) adjourned by the Shareholders on 15 September 2011 will be held at RELC International

Hotel, 30 Orange Grove Road, Level 5 (Room 507), Singapore 258352 on 27 October 2011 at 9.30

a.m., for the purpose of considering and, if thought fit, passing the following resolution as a Special

Resolution:

“SPECIAL RESOLUTION

That pursuant to Article 51 of the Articles of Association of the Company, and subject to the confirmation

of the High Court of the Republic of Singapore, the share capital of the Company be reduced from

S$47,848,113.86 comprising 236,984,226 ordinary shares to S$42,149,988.96 comprising

232,601,053 ordinary shares, and that such reduction be effected by:

(i) cancelling the amount of S$5,698,124.90 constituting part of the total paid-up share capital of the

Company held by all the shareholders of the Company (excluding Tang UnityThree LLP, Tang

UnityTwo LLP, Kerith Holdings LLP and Tang Wee Kit), such shareholders holding in aggregate

4,383,173 of the said ordinary shares constituting part of the total issued share capital of the

Company (the “Participating Shareholders”); and

(ii) cancelling 4,383,173 of the said ordinary shares constituting part of the total issued share capital

of the Company held by the Participating Shareholders,

and the aggregate sum of S$5,698,124.90 arising from such reduction of the share capital be returned

to the Participating Shareholders, on the basis of S$1.30 for each ordinary share in the capital of the

Company held by each Participating Shareholder so cancelled.”

BY ORDER OF THE BOARD

ERNEST SEOW TENG PENG

DIRECTOR

Singapore

27 September 2011

Notes:

1. A shareholder of the Company entitled to attend and vote at the Extraordinary General Meeting is entitled to appoint a proxy

to attend and vote on his behalf. A proxy need not also be a shareholder.

2. The instrument appointing a proxy must be lodged at the registered office of the Company at 310 Orchard Road, Singapore

238864 not less than 48 hours before the time appointed for the Extraordinary General Meeting.

3. A corporation which is a shareholder of the Company may by resolution of its directors or other governing body authorise

such person as it thinks fit to act as its representative at the Extraordinary General Meeting in accordance with Section 179

of the Companies Act, Chapter 50 of Singapore.

NOTICE OF EXTRAORDINARY GENERAL MEETING

153

This page has been intentionally left blank.



Proxy Form

Extraordinary General Meeting

I/We (Name), with NRIC/Passport Number

of (Address)

being a member/members of C.K. Tang Limited (the “Company”), hereby appoint:

Name* Address

NRIC/

Passport Number

Proportion of

Shareholdings

No. of Shares %

and/or failing him/her (delete as appropriate)

Name* Address

NRIC/

Passport Number

Proportion of

Shareholdings

No. of Shares %

as my/our proxy/proxies to attend and to vote for me/us on my/our behalf and, if necessary, to demand a poll, at

the Extraordinary General Meeting of the Company to be held on 27 October 2011 at 9.30 a.m. at RELC

International Hotel, 30 Orange Grove Road, Level 5 (Room 507), Singapore 258352, and at any adjournment

thereof. The proxy is to vote on the business before the Extraordinary General Meeting of the Company as

indicated below. If no specific direction as to voting is given, the proxy will vote or abstain from voting at his/her

discretion, as he/she will on any other matter arising at the Extraordinary General Meeting of the Company.

NUMBER OF VOTES**

SPECIAL RESOLUTION For Against

To approve the reduction of the share capital of the Company from

S$47,848,113.86 comprising 236,984,226 ordinary shares to

S$42,149,988.96 comprising 232,601,053 ordinary shares

Dated this day of 2011

Total Number of Shares held

in the Register of Members:

Signature(s) of Member(s) or Common Seal

* If no person is named in the space below, the Chairman of the Extraordinary General Meeting shall be my/our proxy to vote,

for or against the Special Resolution to be proposed at the Extraordinary General Meeting as indicated below, for me/us and

on my/our behalf at the Extraordinary General Meeting and at any adjournment thereof.

** Please indicate how you wish to vote, i.e. either “For” or “Against”. If you wish to exercise all your votes “For” or “Against”,

please indicate with an “X” within the box provided. Otherwise, please indicate the number of votes to be used “For” and

“Against”.

-----------------------------------------------------------------------------------------------------------------------------------------------

"

IMPORTANT (PLEASE READ THE NOTES BELOW)

Notes:

1. Please insert the total number of ordinary shares of the Company (“Shares”) held by you. If no number is inserted, this proxy

form shall be deemed to relate to all the Shares held by you.

2. A shareholder of the Company entitled to attend and vote at a meeting of the Company is entitled to appoint one or two

proxies to attend and vote on his behalf. Such proxy need not be a shareholder of the Company. Your completion and return

of this proxy form will not prevent you from attending and voting in person at the Extraordinary General Meeting if you so

wish, in place of your proxy or proxies.

3. Where a shareholder appoints more than one proxy, he shall specify the proportion of his shareholding to be represented

by each proxy. If no such proportion or number is specified the first named proxy may be treated as representing 100% of

the shareholding and any second named proxy as an alternate to the first named.

4. The instrument appointing a proxy or proxies, together with the power of attorney or other authority (if any) under which it

is signed or a notarially certified copy thereof, shall be deposited at the registered office of the Company at 310 Orchard

Road, Singapore 238864, not less than 48 hours before the time set for holding the Extraordinary General Meeting.

5. The instrument appointing a proxy or proxies shall be in writing under the hand of the appointor or of his attorney duly

authorised in writing; or if such appointor is a corporation under its common seal, or under the hand of its director/officer/

attorney duly authorised in writing. An instrument appointing a proxy or proxies to vote at a meeting shall be deemed to

include the power to demand or concur in demanding a poll on behalf of the appointor.

6. A corporation which is a shareholder may authorise by resolution of its directors or other governing body, such person as

it thinks fit to act as its representative at the Extraordinary General Meeting, in accordance with Section 179 of the

Companies Act, Chapter 50 of Singapore.

General:

The Company shall be entitled to reject the instrument appointing a proxy or proxies if it is incomplete, improperly completed or

illegible or where the true intentions of the appointor are not ascertainable from the instructions of the appointor specified in the

instrument appointing a proxy or proxies.

TOPPAN VITE PTE. LTD. SCR1110002

EGM Circular DD 10 October-10

Documents

Transcript of EGM Circular DD 10 October-10