1. business and industrial
2. company
3. annual report

OFFER DOCUMENT DATED 20 NOVEMBER 2014
THIS OFFER DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION. PLEASE
READ IT CAREFULLY.
If you are in any doubt about this Offer (as defined herein), you should consult your stockbroker, bank
manager, solicitor, accountant, tax adviser or other professional adviser immediately.
Credit Suisse (Singapore) Limited (“Credit Suisse”) is acting for and on behalf of New Precise Holdings
Limited (the “Offeror”), an indirect wholly-owned subsidiary of Nan Fung International Holdings Limited and
does not purport to advise the unitholders (the “Unitholders”) of Forterra Trust (“Forterra”). In preparing its
letter to the Unitholders on behalf of the Offeror, Credit Suisse has not had any regard to the general or
specific investment objectives, tax position, risk profiles, financial situation or particular needs and
constraints of any Unitholder.
If you have sold or transferred all your units in Forterra (the “Units”) held through The Central Depository
(Pte) Limited (“CDP”), you need not forward this Offer Document and the accompanying Form of Acceptance
and Authorisation for Offer Units (“FAA”) to the purchaser or transferee, as CDP will arrange for a separate
Offer Document and FAA to be sent to the purchaser or transferee. If you have sold or transferred all your
Units not held through CDP, you should immediately hand this Offer Document and the accompanying Form
of Acceptance and Transfer for Offer Units (“FAT”) to the purchaser or transferee or to the bank, stockbroker
or agent through whom you effected the sale for onward transmission to the purchaser or transferee.
The views of the directors of the Trustee-Manager (as defined herein) who are considered to be
independent for the purposes of the Offer (the “Forterra Independent Directors”) and those of the
independent financial adviser to the Forterra Independent Directors on the Offer will be made
available to you in due course in the circular to be despatched by the Trustee-Manager to Unitholders.
You may wish to consider their views before taking action in relation to the Offer.
The Singapore Exchange Securities Trading Limited assumes no responsibility for the correctness of any of
the statements made, reports contained or opinions expressed in this Offer Document.
MANDATORY CONDITIONAL CASH OFFER
by
CREDIT SUISSE (SINGAPORE) LIMITED
(Incorporated in the Republic of Singapore)
Company Registration No. 197702363D
for and on behalf of
NEW PRECISE HOLDINGS LIMITED
(Incorporated in the British Virgin Islands)
Company Registration No. 1767134
an indirect wholly-owned subsidiary of
NAN FUNG INTERNATIONAL HOLDINGS LIMITED
(Incorporated in the British Virgin Islands)
Company Registration No. 1665059
for
FORTERRA TRUST
(formerly known as TREASURY CHINA TRUST)
(Constituted in the Republic of Singapore pursuant to a trust deed dated 19 May 2010
and a supplemental trust deed dated 26 February 2013)
ACCEPTANCES SHOULD BE RECEIVED BY 5.30 P.M. ON
18 DECEMBER 2014 OR SUCH LATER DATE(S) AS MAY BE
ANNOUNCED FROM TIME TO TIME BY OR ON BEHALF OF THE OFFEROR.
The procedures for acceptance of the Offer are set out in Appendix 2 to this Offer Document and in the
accompanying FAA and FAT.
This page has been intentionally left blank.
CONTENTS
DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS . . . . . . . . . . .
8
LETTER TO UNITHOLDERS
1.
INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
9
2.
TERMS OF THE OFFER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
9
3.
WARRANTY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
11
4.
NO OPTIONS OFFER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
11
5.
DETAILS OF THE OFFER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
11
6.
PROCEDURES FOR ACCEPTANCE OF THE OFFER . . . . . . . . . . . . . . . . . . . . . . .
11
7.
INFORMATION ON THE OFFEROR AND NAN FUNG . . . . . . . . . . . . . . . . . . . . . . .
11
8.
INFORMATION ON FORTERRA AND THE TRUSTEE-MANAGER . . . . . . . . . . . . .
12
9.
RATIONALE FOR THE OFFER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
12
10. OFFEROR’S INTENTIONS IN RELATION TO FORTERRA . . . . . . . . . . . . . . . . . . .
12
11.
FINANCIAL EVALUATION OF THE OFFER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
14
12. CONFIRMATION OF FINANCIAL RESOURCES . . . . . . . . . . . . . . . . . . . . . . . . . . . .
14
13. DISCLOSURES OF HOLDINGS AND DEALINGS IN RELEVANT FORTERRA
SECURITIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
14
14. OVERSEAS UNITHOLDERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
15
15. GENERAL INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
16
16. RESPONSIBILITY STATEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
17
APPENDIX 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
18
APPENDIX 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
21
APPENDIX 3A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
27
APPENDIX 3B . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
28
APPENDIX 4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
31
APPENDIX 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
33
APPENDIX 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
34
APPENDIX 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
36
1
DEFINITIONS
Except where the context otherwise requires, the following definitions apply throughout this Offer
Document and the Relevant Acceptance Forms:
“3Q2014 Forterra Results”
:
The unaudited consolidated financial statements of Forterra
and its subsidiaries for the 9 months ended 30 September
2014, as announced by Forterra on 31 October 2014
“Acceptance Condition”
:
The condition set out in section 2.5 of the Letter to
Unitholders in this Offer Document
“Books Closure Date”
:
Shall have the meaning ascribed to it in section 2.4(i) of the
Letter to Unitholders in this Offer Document
“Business Day”
:
A day (other than Saturday or Sunday) on which banks are
open for general business in Singapore
“Business Trusts Act”
:
The Business Trusts Act, Chapter 31A of Singapore
“CDP”
:
The Central Depository (Pte) Limited
“China”
:
The People’s Republic of China
“Closing Date”
:
5.30 p.m. on 18 December 2014 or such later date(s) as may
be announced from time to time by or on behalf of the Offeror,
such date being the last day for the lodgement of acceptances
of the Offer
“Code”
:
The Singapore Code on Take-overs and Mergers
“Companies Act”
:
The Companies Act, Chapter 50 of Singapore
“Credit Suisse”
:
Credit Suisse (Singapore) Limited
“Date of Receipt”
:
The date of receipt by CDP, on behalf of the Offeror, of the
FAA or, in the case where such date of receipt is on the
Closing Date, as at 5.30 p.m. on the Closing Date (provided
always that the Date of Receipt falls on or before the Closing
Date)
“Despatch Date”
:
20 November 2014, being the date of despatch of this Offer
Document
“Directors”
:
The directors of the Offeror as at the Latest Practicable Date
“Dissenting Unitholders”
:
Shall have the meaning ascribed to it in section 10.3 of the
Letter to Unitholders in this Offer Document
“Distribution”
:
Shall have the meaning ascribed to it in section 2.3 of the
Letter to Unitholders in this Offer Document
2
DEFINITIONS
“Electronic Acceptance”
:
The SGX-SSH service provided by CDP as listed in Schedule
3 of the Terms and Conditions for User Services for
Depository Agents
“Encumbrances”
:
Shall have the meaning section 2.3 of the Letter to
Unitholders in this Offer Document
“FAA”
:
Form of Acceptance and Authorisation for Offer Units, which
forms part of this Offer Document and which is issued to
Unitholders whose Units are deposited with CDP
“FAT”
:
Forms of Acceptance and Transfer for Offer Units, which
forms part of this Offer Document and which is issued to the
Unitholders whose Units are not deposited with CDP
“Final Day Rule”
:
Shall have the meaning ascribed to it in paragraph 1.5 of
Appendix 1 of this Offer Document
“Forterra”
:
Forterra Trust
“Forterra Independent
Directors”
:
The directors of the Trustee-Manager who are considered to
be independent for the purposes of the Offer
“FY2012”
:
Financial year ended or ending 31 March 2012
“FY2013”
:
Financial year ended or ending 31 March 2013
“FY2014”
:
Financial year ended or ending 31 March 2014
“Hong Kong”
:
The Hong Kong Special Administrative Region of China
“in scrip form”
:
Shall have the meaning ascribed to it in paragraph 2.1 of
Appendix 1 to this Offer Document
“Last Trading Day”
:
3 November 2014, being the last full day of trading in the Units
on the SGX-ST preceding the Offer Announcement Date
“Latest Practicable Date”
:
17 November 2014, being the latest practicable date prior to
the printing of this Offer Document
“Listing Manual”
:
The listing manual of the SGX-ST
“Market Day”
:
A day on which the SGX-ST is open for the trading of
securities
“maximum potential total
units”
:
Shall have the meaning ascribed to it in section 2.5 of the
Letter to Unitholders in this Offer Document
3
DEFINITIONS
“Nan Fung”
:
Nan Fung International Holdings Limited
“Nan Fung Financial
Statements”
:
Shall have the meaning ascribed to it in paragraph 3 of
Appendix 3B to this Offer Document
“NF Group”
:
Shall have the meaning ascribed to it in section 7.2 of the
Letter to Unitholders in this Offer Document
“Offer”
:
The mandatory conditional cash offer made by Credit Suisse,
for and on behalf of the Offeror, to acquire all the Offer Units
on the terms and subject to the conditions set out in this Offer
Document and the Relevant Acceptance Forms, as such offer
may be amended, extended and revised from time to time by
or on behalf of the Offeror
“Offer Announcement”
:
The announcement relating to the Offer released by Credit
Suisse, for and on behalf of the Offeror, on the Offer
Announcement Date
“Offer Announcement
Date”
:
4 November 2014, being the date of the Offer Announcement
“Offer Document”
:
This document and any other document(s) which may be
issued by Credit Suisse, for and on behalf of the Offeror, to
amend, revise, supplement or update this document from time
to time
“Offer Period”
:
The period commencing on the Offer Announcement Date and
ending on the Closing Date
“Offer Price”
:
S$1.85 in cash for each Offer Unit
“Offer Units”
:
Shall have the meaning ascribed to it in section 2.2 of the
Letter to Unitholders in this Offer Document
“Offeror”
:
New Precise Holdings Limited
“Option Exercise”
:
Shall have the meaning ascribed to it in section 1.1 of the
Letter to Unitholders in this Offer Document
“Overseas Unitholders”
:
Shall have the meaning ascribed to it in section 14.1 of the
Letter to Unitholders in this Offer Document
“Reference Period”
:
The period commencing six months prior to the Offer
Announcement Date and ending on the Latest Practicable
Date
“Register”
:
The register of unitholders of Forterra
4
DEFINITIONS
“Registrar”
:
Boardroom Corporate & Advisory Services Pte. Ltd.
“Relevant Acceptance
Forms”
:
The FAA and/or the FAT
“Relevant Day”
:
Shall have the meaning ascribed to it in paragraph 3.1 of
Appendix 1 to this Offer Document
“Relevant Forterra
Securities”
:
(i) Units; (ii) securities which carry voting rights in Forterra;
and (iii) convertible securities, warrants, options or derivatives
in respect of the Units or securities which carry voting rights in
Forterra
“Relevant Persons”
:
(i) the Offeror and its directors, (ii) Nan Fung, and (iii) Credit
Suisse (each, a “Relevant Person”)
“Resultant Issued Units”
:
Shall have the meaning ascribed to it in section 1.1 of the
Letter to Unitholders in this Offer Document
“Rule 22.6 Period”
:
Shall have the meaning ascribed to it in paragraph 1.4 of
Appendix 1 to this Offer Document
“Securities Account”
:
A securities account maintained by a Depositor with CDP, but
does not include a securities sub-account
“SFA”
:
The Securities and Futures Act, Chapter 289 of Singapore
“SGXNET”
:
SGX-ST’s website at www.sgx.com
“SGX-ST”
:
Singapore Exchange Securities Trading Limited
“Shut-Off Notice”
:
Shall have the meaning ascribed to it in paragraph 1.4 of
Appendix 1 to this Offer Document
“SIC”
:
Securities Industry Council of Singapore
“Trust Deed”
:
Shall have the meaning ascribed to it in section 8 of the Letter
to Unitholders in this Offer Document
“Trustee-Manager”
:
Forterra Real Estate Pte. Ltd. (formerly known as Treasury
Holdings Real Estate Pte. Ltd.)
“Unitholders”
:
Persons who are registered as holders of Units in the Register
and Depositors who have Units entered against their names in
the Depository Register
“Unitholding
Requirement”
:
Shall have the meaning ascribed to it in section 10.2 of the
Letter to Unitholders in this Offer Document
5
DEFINITIONS
“Units”
:
Issued units in Forterra
“Unit Options”
:
Unit options granted under the Forterra Unit Option Scheme
to subscribe for units in Forterra
“VWAP”
:
Volume-weighted average price
“HK$”
:
Hong Kong dollars, the lawful currency of Hong Kong
“RMB”
:
Renminbi, being the lawful currency of China
“S$”
:
Singapore dollars, being the lawful currency of Singapore
“%” or “per cent.“
:
Percentage or per centum
Acting in Concert. The expression “acting in concert” shall have the same meaning ascribed to
it in the Code.
Announcement, Notice, etc. References to the making of an announcement or the giving of
notice by the Offeror shall include the release of an announcement by Credit Suisse or advertising
agents, for and on behalf of the Offeror, to the press or the delivery of or transmission by
telephone, telex, facsimile, SGXNET or otherwise of an announcement to the SGX-ST. An
announcement made otherwise than to the SGX-ST shall be notified simultaneously to the
SGX-ST.
Depositors, etc. The expressions “Depositor”, “Depository Agent” and “Depository Register”
shall have the meanings ascribed to them respectively in the Companies Act.
Genders. 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. References to persons shall, where applicable, include corporations.
Headings. The headings in this Offer Document are inserted for convenience only and shall be
ignored in construing this Offer Document.
Issued Units. In this Offer Document, the total number of Units in issue is 257,019,717 as at the
Latest Practicable Date.
Offer Document. References to “Offer Document” shall include the Relevant Acceptance Forms,
unless the context otherwise requires.
Rounding. Any discrepancies in the tables in this Offer Document between the listed 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.
Unitholders. References to “you”, “your” and “yours” in this Offer Document are, as the context
so determines, to Unitholders.
Statutes. Any reference in this Offer Document to any enactment is a reference to that enactment
as for the time being amended or re-enacted. Any word defined under the Business Trusts Act, the
Companies Act, the Code, the Listing Manual, the SFA or any modification thereof and used in this
6
DEFINITIONS
Offer Document shall, where applicable, have the meaning assigned to that word under the
Business Trusts Act, the Companies Act, the Code, the Listing Manual, the SFA or that
modification, as the case may be.
Time, Date. Any reference to a time of day and date in this Offer Document shall be a reference
to Singapore time and date, unless otherwise specified.
7
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
All statements other than statements of historical facts included in this Offer Document are or may
be forward-looking statements. Forward-looking statements include, but are not limited to, those
using words such as “seek”, “expect”, “anticipate”, “believe”, “intend”, “project”, “plan”, “strategy”,
“forecast”, “possible” and similar expressions or future or conditional verbs such as “will”, “would”,
“should”, “could”, “may” and “might”. These statements reflect the Offeror’s 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. Unitholders should not
place undue reliance on such forward-looking statements, and neither the Offeror nor Credit
Suisse undertakes any obligation to update publicly or revise any forward-looking statements,
subject to compliance with all applicable laws and regulations and/or rules of the SGX-ST and/or
any other regulatory or supervisory body or agency.
8
LETTER TO UNITHOLDERS
CREDIT SUISSE (SINGAPORE) LIMITED
(Incorporated in the Republic of Singapore)
Company Registration No. 197702363D
20 November 2014
To:
The Unitholders of Forterra Trust
Dear Sir/Madam
MANDATORY CONDITIONAL CASH OFFER BY CREDIT SUISSE, FOR AND ON BEHALF OF
THE OFFEROR, TO ACQUIRE THE OFFER UNITS
1.
INTRODUCTION
1.1
Offer Announcement. On 4 November 2014, Credit Suisse announced, for and on behalf
of the Offeror, an indirect wholly-owned subsidiary of Nan Fung, that the Offeror has
exercised 3,050,000 Unit Options in respect of 3,050,000 units in Forterra (the “Option
Exercise”), at S$0.34816 in cash per unit for each Unit Option exercised (the “Offer
Announcement”). After the issuance of the units pursuant to the Option Exercise, the total
number of issued units in Forterra is 257,019,717 (the “Resultant Issued Units”).
Together with the 76,083,379 Units held by the Offeror and any other Relevant Persons
prior to the Option Exercise, the Offeror and the other Relevant Persons own 79,133,379
Units after the Option Exercise, representing approximately 30.79% of the Resultant
Issued Units.
As a result and in accordance with Rule 14 of the Code, the Offeror has made a mandatory
conditional cash offer for all the Offer Units.
A copy of the Offer Announcement is available on SGXNET.
1.2
Offer Document. This Offer Document contains the formal offer by Credit Suisse, for and
on behalf of the Offeror, to acquire all the Offer Units. Unitholders are urged to read this
Offer Document carefully.
2.
TERMS OF THE OFFER
2.1
Offer Price. In accordance with Section 139 of the SFA and the Code, and subject to the
terms and conditions set out in this Offer Document, Credit Suisse hereby makes the Offer,
for and on behalf of the Offeror, on the following basis:
For each Offer Unit : S$1.85 in cash.
2.2
Offer Units. The Offer is extended to:
2.2.1
all issued Units, other than those already owned, controlled or agreed to be
acquired by the Offeror; and
9
LETTER TO UNITHOLDERS
2.2.2
all new units unconditionally issued or to be issued pursuant to the valid exercise,
prior to the Closing Date, of any Unit Options,
(collectively, the “Offer Units”).
2.3
No Encumbrances. The Offer Units will be acquired (i) fully paid; (ii) free from all claims,
charges, mortgages, liens, options, equity, power of sale, hypothecation, retention of title,
rights of pre-emption, rights of first refusal or other third party rights or security interests
of any kind or any agreements, arrangements or obligations to create any of the foregoing
(“Encumbrances”); and (iii) together with all rights, benefits and entitlements attached
thereto as at the Offer Announcement Date and thereafter attaching thereto, including the
right to receive and retain all dividends, rights and other distributions (if any)
(“Distribution”) declared, paid or made by Forterra on or after the Offer Announcement
Date.
2.4
Adjustments for Distribution. Accordingly, if any Distribution is declared, paid or made
by Forterra on the Offer Units on or after the Offer Announcement Date, and:
2.5
(i)
if the settlement date in respect of the Offer Units accepted pursuant to the Offer falls
on or before the books closure date for the determination of entitlements to the
Distribution (“Books Closure Date”), the Offeror will pay the relevant accepting
Unitholders the Offer Price for each Offer Unit, as the Offeror will receive the
Distribution in respect of those Offer Units from Forterra; and
(ii)
if the settlement date in respect of the Offer Units accepted pursuant to the Offer falls
after the Books Closure Date, the amount of the Distribution in respect of such Offer
Units will be deducted from the Offer Price payable for such Offer Units, as the
Offeror will not receive the Distribution in respect of those Offer Units from Forterra.
Acceptance Condition. The Offer will be subject to the Offeror having received, by the
Closing Date, valid acceptances (which have not been withdrawn) in respect of such
number of Offer Units which will result in the Offeror and parties acting or deemed to be
acting in concert with the Offeror holding Units representing more than 50 per cent. of the
voting rights attributable to all Units in issue as at the Closing Date (“Acceptance
Condition”).
Accordingly, the Offer will not become or be capable of being declared unconditional as to
acceptances until the Closing Date, unless at any time prior to the Closing Date, the
Offeror has received valid acceptances (which have not been withdrawn) in respect of
such number of Offer Units which, when taken together with the Units owned, controlled
or agreed to be acquired by the Offeror and parties acting or deemed to be acting in
concert with the Offerors, will result in the Offeror and parties acting or deemed to be
acting in concert with it holding more than 50 per cent. of the voting rights attributable to
the maximum potential total units. For these purposes, the “maximum potential total
units” means the total number of units which would be in issue if all the Unit Options (other
than those acquired or agreed to be acquired by the Offeror) were validly exercised as at
the date of such declaration.
Save for the Acceptance Condition, the Offer is unconditional in all other respects.
10
LETTER TO UNITHOLDERS
2.6
3.
Choices. A Unitholder can, in relation to all or part of his Offer Units, either:
(i)
accept the Offer in respect of such Offer Units in accordance with the procedures set
out in Appendix 2 to this Offer Document; or
(ii)
take no action and let the Offer lapse in respect of his Offer Units.
WARRANTY
A Unitholder who tenders his Offer Units in acceptance of the Offer will be deemed to
warrant that he sells such Offer Units as or on behalf of the beneficial owner(s) thereof,
(i) fully paid; (ii) free from all Encumbrances; and (iii) together with all rights, benefits and
entitlements attached thereto as at the Offer Announcement Date and thereafter attaching
thereto, including the right to receive and retain all Distribution (if any) declared, paid or
made by Forterra on or after the Offer Announcement Date.
4.
NO OPTIONS OFFER
As at the Latest Practicable Date, based on the latest information available to the Offeror,
Forterra has granted 2,510,000 outstanding Unit Options exercisable in respect of an
aggregate of 2,510,000 new units. Under the rules of the Forterra Unit Option Scheme, the
Unit Options are personal to the holders thereof and are not freely transferable, except
with the prior approval of the Unit Option Scheme Committee of Forterra. Accordingly, in
view of this restriction, the Offeror will not make an offer to acquire the Unit Options. For
the avoidance of doubt, the Offer will be extended to all new units unconditionally issued
or to be issued pursuant to the valid exercise of any Unit Options prior to the Closing Date.
5.
DETAILS OF THE OFFER
Appendix 1 to this Offer Document sets out further details on (i) the duration of the Offer;
(ii) the settlement of the consideration for the Offer; (iii) the requirements relating to the
announcement of the level of acceptances of the Offer; and (iv) the right of withdrawal of
acceptances of the Offer.
6.
PROCEDURES FOR ACCEPTANCE OF THE OFFER
Appendix 2 to this Offer Document sets out the procedures for acceptance of the Offer.
7.
INFORMATION ON THE OFFEROR AND NAN FUNG
7.1
The Offeror. The Offeror is a company incorporated in the British Virgin Islands on 28
March 2013, and its principal activity is investment holding. As at the Latest Practicable
Date, it has an issued and paid-up share capital of US$1,000.00 and is an indirect
wholly-owned subsidiary of Nan Fung. The directors of the Offeror are Mr. Eric Chung
Chun Kwong, Mr. Vincent Cheung Sai Sing and Mr. Benson Chu Wai Ming. Mr. Nelson
Tang Chun Wai is an alternate director to Mr. Vincent Cheung Sai Sing.
7.2
Nan Fung. Nan Fung is a company incorporated in the British Virgin Islands. Nan Fung
and its subsidiaries (collectively, “NF Group”) is one of the largest privately-owned
property developers in Hong Kong, with over 47 years of experience in real estate
development in Hong Kong and over 20 years in China. Major business activities of the NF
Group are, without limitation, real estate development and investment, hotel and
11
LETTER TO UNITHOLDERS
hospitality, construction, property management and financial investment. In China, Nan
Fung currently has participated in a number of projects in various regions, including
without limitation, Shanghai, Guangzhou, Wuxi, Dalian, Tianjin and Sanya. Other than
Hong Kong and China, Nan Fung also has investments in, without limitation, Singapore,
Malaysia, South Korea, the United Kingdom, the United States and New Zealand. NF
Group is also the second largest shareholder of a Hong Kong listed company, Sino-Ocean
Land Holdings Limited (HKEX stock code: 3377).
As at the Latest Practicable Date, the directors of Nan Fung are Ms. Vivien Chen Wai Wai,
Mr. Frank Seto Kai Shui, Mr. Leung Kam Chung, Mr. Eric Chung Chun Kwong, Mr. Vincent
Cheung Sai Sing, Mr. Donald Choi Wun Hing and Mr. Cheung Pui Kuen.
Appendix 3A and Appendix 3B to this Offer Document sets out additional information on
the Offeror and Nan Fung, respectively.
8.
INFORMATION ON FORTERRA AND THE TRUSTEE-MANAGER
Forterra is a Singapore registered business trust, constituted pursuant to a trust deed
dated 19 May 2010 and a supplemental trust deed dated 26 February 2013 (“Trust
Deed”), and was listed on the SGX-ST on 21 June 2010. Forterra Real Estate Pte. Ltd.
(formerly known as Treasury Holdings Real Estate Pte. Ltd.), a private limited company
incorporated in Singapore, is the trustee-manager of Forterra (“Trustee-Manager”).
Forterra is a leading owner, manager and developer of commercial real estate in China.
For the financial year ended 31 December 2013, Forterra earned gross revenue and net
property income of S$77.28 million and S$48.87 million, respectively. As at the end of the
financial year ended 31 December 2013, Forterra’s gross assets under management were
in excess of RMB11.11 billion (or S$2.32 billion).
As at the Latest Practicable Date, the directors of the Trustee-Manager are Mr. Eric Chung
Chun Kwong, Mr. John Lim Kok Min, Mr. Paul Cheng Kwok Kin, Mr. John Lee Ting Kong,
Dr. Tan Khee Giap, Mr. Yoon Wai Nam, Mr. Vincent Cheung Sai Sing, and Mr. Nelson Tang
Chun Wai.
Appendix 4 to this Offer Document sets out additional information on Forterra and the
Trustee-Manager.
9.
RATIONALE FOR THE OFFER
The Offeror is making the Offer in compliance with the requirements of the Code, as the
Offeror together with any other Relevant Persons hold an aggregate of 79,133,379 Units
(including the units issued pursuant to the Option Exercise), representing approximately
30.79% of the Resultant Issued Units.
10.
OFFEROR’S INTENTIONS IN RELATION TO FORTERRA
10.1
Offeror’s Future Plans for Forterra. It is the current intention of the Offeror that Forterra
continues with its existing activities and there are presently no plans to (a) introduce any
major changes to the business or operations of Forterra, (b) re-deploy any of the fixed
assets of Forterra or (c) discontinue the employment of any of the existing employees of
Forterra and/or of its subsidiaries, other than in the ordinary course of business. The
Offeror however reserves the right and discretion, subsequent to the Offer, to conduct a
12
LETTER TO UNITHOLDERS
review of Forterra’s management and operations and to evaluate any options or
opportunities in relation to Forterra which may present themselves which the Offeror
regards to be in the best interests of Forterra.
10.2
Listing Status of Forterra. Under Rule 723 of the Listing Manual, Forterra must ensure
that at least 10 per cent. of the total number of Units is at all times held by the public (the
“Unitholding Requirement”). Under Rule 1105 of the Listing Manual, in the event that the
Offeror and parties acting in concert with the Offeror should, as a result of the Offer or
otherwise, own or control more than 90 per cent. of the Units, the SGX-ST may suspend
the trading of the Units on the SGX-ST until such time when the SGX-ST is satisfied that
at least 10 per cent. of the issued Units are held by at least 500 Unitholders who are
members of the public. In addition, under Rule 724 of the Listing Manual, if the Unitholding
Requirement is not complied with, Forterra must, as soon as possible, announce that fact
and the SGX-ST may suspend trading of all the Units on the SGX-ST. Rule 725 of the
Listing Manual states that the SGX-ST may allow Forterra a period of three months, or
such longer period as the SGX-ST may agree, for the proportion of the Units held by
members of the public to be raised to at least 10 per cent., failing which Forterra may be
de-listed from the SGX-ST.
The Offeror does not have any present intention to actively pursue the delisting of
Forterra from the Mainboard of the SGX-ST. However, in the event that the
Unitholding Requirement is not satisfied at the Closing Date, and the SGX-ST
suspends trading in the Units, the Offeror does not currently intend to support any
action or take any steps to maintain the listing status of Forterra on the SGX-ST. The
Offeror reserves the right and discretion, if such event arises, to assess the options
available and there is no assurance that the current intention will be carried into effect.
10.3
Compulsory Acquisition Rights. Pursuant to Section 40A(1) of the Business Trusts Act,
if the Offeror receives valid acceptances pursuant to the Offer or acquires Units during the
offer period otherwise than through valid acceptances of the Offer, in respect of not less
than 90 per cent of the total number of Units in issue as at the Closing Date (other than
those already held by the Offeror, its related corporations or their respective nominees as
at the Despatch Date), the Offeror will be entitled to exercise its right to compulsorily
acquire, at the Offer Price, all Offer Units held by Unitholders who have not accepted the
Offer (“Dissenting Unitholders”).
In such event, the Offeror’s present intention is to exercise its right to compulsorily
acquire all the Offer Units not acquired under the Offer and proceed to delist
Forterra from the SGX-ST. The Offeror however reserves the right and discretion, if such
event arises, to assess the options available and there is no assurance that the current
intention will be carried into effect.
10.4
Dissenting Unitholders’ Rights. In addition, Dissenting Unitholders have the right under
and subject to Section 40A(4) of the Business Trusts Act to require the Offeror to acquire
their Units at the Offer Price in the event that the Offeror or its nominees acquire, pursuant
to the Offer, such number of Units which, together with the Units held by the Offeror, its
related corporations and/or their respective nominees, comprise 90 per cent. or more of
the total number of Units in issue. Dissenting Unitholders who wish to exercise such rights
are advised to seek their own independent legal advice.
13
LETTER TO UNITHOLDERS
11.
FINANCIAL EVALUATION OF THE OFFER
The Offer Price of S$1.85 represents the following premium over the prices of Units traded
on the SGX-ST on the below dates and periods:
Reference Price
(S$)
Premium
(%)
Last traded price per Unit as quoted on the
SGX-ST on 3 November 2014, being the
Last Trading Day
1.700
8.8
VWAP of the Units for the one-month period up
to and including the Last Trading Day
1.494
23.8
VWAP of the Units for the three-month period
up to and including the Last Trading Day
1.491
24.1
Source: Bloomberg L.P.
12.
CONFIRMATION OF FINANCIAL RESOURCES
Credit Suisse, as the financial adviser to the Offeror in connection with the Offer, confirms
that sufficient financial resources are available to the Offeror to satisfy full acceptance of
the Offer on the basis of the Offer Price.
13.
DISCLOSURES
SECURITIES
13.1
Holdings and Dealings. Based on the latest information available to the Offeror,
Appendix 5 to this Offer Document sets out details of:
13.2
OF
HOLDINGS
AND
DEALINGS
IN
RELEVANT
FORTERRA
(i)
the number of Units owned, controlled or agreed to be acquired by the Offeror, the
Directors and persons acting or deemed to be acting in concert with the Offeror in
connection with the Offer as at the Latest Practicable Date; and
(ii)
the dealings in Units by the Offeror, the Directors and persons acting or deemed to
be acting in concert with the Offeror in connection with the Offer during the Reference
Period.
No Other Holdings and Dealings. Save as disclosed in this Offer Document and based
on the latest information available to the Offeror:
(i)
none of the Offeror, the Directors and persons acting or deemed to be acting in
concert with the Offeror in connection with the Offer owns, controls or has agreed to
acquire any Relevant Forterra Securities as at the Latest Practicable Date; and
(ii)
none of the Offeror, the Directors and persons acting or deemed to be acting in
concert with the Offeror in connection with the Offer has dealt for value in any
Relevant Forterra Securities during the Reference Period.
14
LETTER TO UNITHOLDERS
13.3
Irrevocable Undertakings. None of the Offeror or persons acting or deemed to be acting
in concert with the Offeror has received any irrevocable undertaking from any party to
accept the Offer as at the Latest Practicable Date.
13.4
Other Arrangements. Save as disclosed in this Offer Document and based on the latest
information available to the Offeror, none of the Offeror, the Directors and persons acting
or deemed to be acting in concert with the Offeror has, as at the Latest Practicable Date:
(i)
granted a security interest related to any Relevant Forterra Securities to another
person, whether through a charge, pledge or otherwise,
(ii)
borrowed any Relevant Forterra Securities from another person (excluding borrowed
Relevant Forterra Securities which have been on-lent or sold), or
(iii) lent any Relevant Forterra Securities to another person.
13.5
Further Disclosures. Appendix 6 to this Offer Document sets out further disclosures
required to be made in connection with the Offer.
14.
OVERSEAS UNITHOLDERS
14.1
Overseas Unitholders. This Offer Document does not constitute an offer or a solicitation
to any person in any jurisdiction in which such offer or solicitation is unlawful. The Offer
is not being proposed in any jurisdiction in which the introduction or implementation of the
Offer would not be in compliance with the laws of such jurisdiction. However, the Offeror
may, in its sole discretion, take such action as it may deem necessary to extend the Offer
to Unitholders in any such jurisdiction. The availability of the Offer to Unitholders whose
mailing addresses are outside Singapore as shown in the Register or, as the case may be,
in the records of CDP (“Overseas Unitholders”) may be affected by the laws of the
relevant overseas jurisdictions. Accordingly, all Overseas Unitholders should inform
themselves about, and observe, any applicable legal requirements in their own
jurisdictions. For the avoidance of doubt, the Offer is made to all Unitholders including
those to whom this Offer Document and the Relevant Acceptance Forms and/or any
related documents have not been, or will not be, sent.
14.2
Overseas Jurisdiction. It is the responsibility of an Overseas Unitholder who wishes to
(i) request for this Offer Document, the Relevant Acceptance Forms and/or any related
documents, or (ii) accept the Offer to satisfy himself as to the full observance of the laws
of the relevant jurisdictions in that connection, including the obtaining of any governmental
or other consent which may be required, or compliance with all other necessary formalities
or legal requirements, or the payment of any taxes, imposts, duties or other requisite
payments due in such jurisdiction. Such Overseas Unitholder shall be liable for any taxes,
imposts, duties or other requisite payments payable and the Offeror and any person acting
on its behalf (including Credit Suisse and CDP) shall be fully indemnified and held
harmless by such Overseas Unitholder for any such taxes, imposts, duties or requisite
payments that may be required to be paid. In accepting the Offer, the Overseas Unitholder
represents and warrants to the Offeror, Credit Suisse and CDP that he is in fully
observance of the laws of the relevant jurisdiction and in that connection, and that he is
in full compliance with all necessary formalities or legal requirements.
15
LETTER TO UNITHOLDERS
If any Unitholder is in any doubt about his position, he should consult his
professional adviser in the relevant jurisdiction. All Overseas Unitholders should
inform themselves about, and observe, any applicable legal requirements in their
own jurisdictions.
14.3
Copies of the Offer Document. Unitholders may (subject to compliance with applicable
laws) obtain copies of this Offer Document, the Relevant Acceptance Forms and any
related documents, during normal business hours up to the Closing Date from the
Registrar (if he is a scripholder) from Boardroom Corporate & Advisory Services Pte. Ltd.,
50 Raffles Place, #32-01 Singapore Land Tower, Singapore 048623 or from CDP (if he is
a Depositor) at 9 North Buona Vista Drive, #01-19/20 The Metropolis, Singapore 138588.
Alternatively, Overseas Unitholders may (subject to compliance with applicable laws) write
to the Registrar (if he is a scripholder) at 50 Raffles Place, #32-01 Singapore Land Tower,
Singapore 048623 or to CDP (if he is a Depositor) at Robinson Road Post Office P.O. Box
1984, Singapore 903934, to request for this Offer Document, the Relevant Acceptance
Forms and any related documents to be sent to an address in Singapore by ordinary post
at his own risk, up to three Market Days prior to the Closing Date.
14.4
Notice. The Offeror and Credit Suisse each reserves the right to notify any matter,
including the fact that the Offer has been made, to any or all Unitholders and Overseas
Unitholders by announcement to the SGX-ST or paid advertisement in a daily newspaper
published and circulated in Singapore, in which case, such notice shall be deemed to have
been sufficiently given notwithstanding any failure by any Unitholder or Overseas
Unitholder to receive or see such announcement or advertisement.
15.
GENERAL INFORMATION
15.1
Valid Acceptances. The Offeror and Credit Suisse each reserves the right to treat
acceptances of the Offer as valid if received by or on behalf of either of them at any place
or places determined by them otherwise than as stated herein and/or in the Relevant
Acceptance Forms, as the case may be, or if made otherwise than in accordance with the
provisions herein and instructions printed on the respective Relevant Acceptance Forms.
15.2
Governing Law and Jurisdiction. The Offer, this Offer Document, the Relevant
Acceptance Forms, and all acceptances of the Offer and all contracts made pursuant
thereto and actions taken or made or deemed to be taken or made thereunder shall be
governed by, and construed in accordance with, the laws of the Republic of Singapore.
The Offeror and each accepting Unitholder who has accepted the Offer submit to the
non-exclusive jurisdiction of the Singapore courts.
15.3
No Third Party Rights. Unless expressly provided to the contrary in this Offer Document
and/or the Relevant Acceptance Forms, a person who is not a party to any contracts made
pursuant to the Offer, this Offer Document and/or the Relevant Acceptance Forms has no
rights under the Contracts (Rights of Third Parties) Act, Chapter 53B of Singapore, to
enforce any terms of such contracts. Notwithstanding any terms and/or conditions herein,
the consent of any third party is not required for any subsequent agreement by the parties
hereto to amend or vary (including any release or compromise of any liability) or terminate
such contracts. Where third parties are conferred rights under such contracts, those rights
are not assignable or transferable.
16
LETTER TO UNITHOLDERS
15.4
Accidental Omission. Accidental omission to despatch this Offer Document, the
Relevant Acceptance Forms or any notice or announcement required to be given under the
terms of the Offer or any failure to receive the same by any person to whom the Offer is
made or should be made, shall not invalidate the Offer in any way.
15.5
Independent Advice. Credit Suisse is acting for and on behalf of the Offeror and does not
purport to advise Unitholders or any other person. In preparing its letter to Unitholders on
behalf of the Offeror, Credit Suisse has not had regard to the general or specific
investment objectives, tax position, risk profiles, financial situation or particular needs and
constraints of any individual Unitholder.
The views of the Forterra Independent Directors and those of the independent financial
adviser to the Forterra Independent Directors on the Offer will be made available to
Unitholders in due course and in any event, they are required under the Code to despatch
their views within 14 days after the despatch of this Offer Document. Unitholders may wish
to consider their advice before taking any action in relation to the Offer.
15.6
General Information. Appendix 6 to this Offer Document sets out certain additional
general information relating to the Offer.
16.
RESPONSIBILITY STATEMENT
The Directors and the directors of Nan Fung (who may each have delegated detailed
supervision of this Offer Document) have taken all reasonable care to ensure that the facts
stated and all opinions expressed in this Offer Document are fair and accurate and that no
material facts have been omitted from this Offer Document, and they jointly and severally
accept responsibility accordingly. Where any information has been extracted or
reproduced from published or otherwise publicly available sources (including, without
limitation, in relation to the Forterra, its subsidiaries or the Trustee-Manager), the sole
responsibility of the Directors and the directors of Nan Fung 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 Offer Document.
Yours faithfully
Credit Suisse (Singapore) Limited
For and on behalf of
New Precise Holdings Limited
20 November 2014
Any enquiries relating to this Offer Document or the Offer should be directed during office
hours to:
Credit Suisse (Singapore) Limited
Tel: +65 6212 2000
17
APPENDIX 1 – DETAILS OF THE OFFER
1.
DURATION OF THE OFFER
1.1 First Closing Date. The Offer is open for acceptance by Unitholders for at least 28 days from
the Despatch Date, unless the Offer is withdrawn with the consent of the SIC and every
person is released from any obligation incurred thereunder. Accordingly, the Offer will
close at 5.30 p.m. on 18 December 2014 or such later date(s) as may be announced
from time to time by or on behalf of the Offeror.
1.2 Subsequent Closing Date(s). If the Offer is extended and:
1.2.1
is not unconditional as to acceptances as at the date of such extension, the
announcement of the extension must state the next Closing Date; or
1.2.2
is unconditional as to acceptances as at the date of such extension, the
announcement of the extension need not state the next Closing Date but may state
that the Offer will remain open until further notice. In such a case, the Offeror must
give Unitholders at least 14 days’ prior notice in writing before it may close the Offer.
1.3 No Obligation to Extend the Offer. The Offeror is not obliged to extend the Offer if the
Acceptance Condition specified in section 2.5 of the Letter to Unitholders in this Offer
Document is not fulfilled or waived (as the case may be) by the Closing Date.
1.4 Offer to Remain Open for 14 Days after Being Declared Unconditional as to
Acceptances. In order to give Unitholders who have not accepted the Offer the opportunity
to accept the Offer after the Offer has become or is declared unconditional as to
acceptances, the Offer will remain open for a period (the “Rule 22.6 Period”) of not less than
14 days after the date on which it would otherwise have closed.
This requirement does not apply if, before the Offer has become or is declared unconditional
as to acceptances, the Offeror has given Unitholders at least 14 days’ notice in writing
(“Shut-Off Notice”) that the Offer will not be open for acceptance beyond a specified Closing
Date, provided that:
1.4.1
the Offeror may not give a Shut-Off Notice in a competitive situation; and
1.4.2
the Offeror may not enforce a Shut-Off Notice, if already given, in a competitive
situation.
If a declaration that the Offer is unconditional as to acceptances is confirmed in accordance
with paragraph 4.2.1 of this Appendix 1, the Rule 22.6 Period will run from the date of such
confirmation or the date on which the Offer would otherwise have closed, whichever is later.
1.5 Final Day Rule. The Offer (whether revised or not) will not be capable:
1.5.1
of becoming or being declared unconditional as to acceptances after 5.30 p.m. on the
60th day after the Despatch Date; or
1.5.2
of being kept open after 5.30 p.m. on the 60th day after the Despatch Date unless the
Offer has previously become or been declared to be unconditional as to acceptances,
provided that the Offeror may extend the Offer beyond such 60-day period with the SIC’s
prior consent (“Final Day Rule”).
18
APPENDIX 1 – DETAILS OF THE OFFER
1.6 Revision. Pursuant to Rule 20.1 of the Code, the terms of the Offer, if revised, will remain
open for acceptance for a period of at least 14 days from the date of despatch of the written
notification of the revision to Unitholders. In any case, where the terms are revised, the
benefit of the Offer (as so revised) will be made available to each of the Unitholders who had
previously accepted the Offer.
2.
SETTLEMENT
2.1 When Settlement Due for All Unitholders. Subject to the Offer becoming or being declared
unconditional in all respects and to the receipt by the Offeror from accepting Unitholders of
valid acceptances and all relevant documents required by the Offeror which are complete in
all respects and in accordance with the instructions given in this Offer Document and in the
FAA or the FAT (as the case may be), and in the case of a Depositor, the receipt by the
Offeror of a confirmation satisfactory to it that the relevant number of Offer Units tendered by
the accepting Depositor in acceptance of the Offer stand to the credit of the “Free Balance”
of the Depositor’s Securities Account at the relevant time(s), remittances in the form of S$
cheques for the appropriate amounts will be despatched (or by such other manner as the
accepting Unitholders may have agreed with CDP for the payment of any cash distribution),
pursuant to Rule 30 of the Code, to the accepting Unitholders (or, in the case of Unitholders
holding Offer Units which are not deposited with CDP (“in scrip form”), their designated
agents, as they may direct) by ordinary post, at the risk of the accepting Unitholders, or in
such other manner as they may have agreed with CDP for payment of any cash distribution
as soon as practicable, and in any case:
2.1.1
in respect of acceptances of the Offer which are complete and valid in all respects
and are received on or before the date on which the Offer becomes or is declared
to be unconditional in accordance with its terms, within 10 days of that date; or
2.1.2
in respect of acceptances of the Offer which are complete and valid in all respects
and are received after the Offer becomes or is declared to be unconditional in
accordance with its terms, but before the Offer closes, within 10 days of the date of
such receipt.
2.2 Method of Settlement. Payment of the Offer Price will be made by way of cheques in S$ (or
by such other manner as the accepting Unitholders may have agreed with CDP for the
payment of any cash distribution) for the appropriate amounts.
3.
ANNOUNCEMENTS
3.1 Timing and Contents. Pursuant to Rule 28.1 of the Code, by 8.00 a.m. on the Market Day
(“Relevant Day”) immediately after the day on which the Offer is due to expire, or the Offer
becomes or is declared to be unconditional as to acceptances, or the Offer is revised or
extended (if applicable), the Offeror will announce and simultaneously inform the SGX-ST of
the total number of Units (as nearly as practicable):
3.1.1
for which valid acceptances of the Offer have been received;
3.1.2
held by the Offeror and any parties acting or deemed to be acting in concert with the
Offeror prior to the commencement of the Offer Period; and
3.1.3
acquired or agreed to be acquired by the Offeror and any parties acting or deemed
to be acting in concert with the Offeror during the Offer Period,
and will specify the percentages of the Units represented by such numbers.
19
APPENDIX 1 – DETAILS OF THE OFFER
3.2 Suspension. Under Rule 28.2 of the Code, if the Offeror is unable, within the time limit, to
comply with any of the requirements in paragraph 3.1 of this Appendix 1, the SIC will
consider requesting the SGX-ST to suspend dealings in the Units until the relevant
information is given.
3.3 Valid Acceptances for Offer Units. Subject to section 15.1 of the Letter to Unitholders in
this Offer Document, in computing the number of Offer Units represented by acceptances,
the Offeror will, at the time of making an announcement, take into account acceptances
which are valid in all respects. Acceptances of the Offer will only be treated as valid for the
purposes of the Acceptance Condition if the relevant requirements of Note 2 on Rule 28.1 of
the Code are met.
4.
RIGHT OF WITHDRAWAL
4.1 Acceptances Irrevocable. Except as expressly provided in this Offer Document and the
Code, acceptances of the Offer shall be irrevocable.
4.2 Right of Withdrawal of Unitholders. A Unitholder who has tendered acceptances under the
Offer may:
4.2.1
withdraw his acceptance immediately if the Offer has become or been declared to be
unconditional as to acceptances but the Offeror fails to comply with any of the
requirements set out in paragraph 3.1 of this Appendix 1 by 3.30 p.m. on the
Relevant Day. Subject to Rule 22.9 of the Code in relation to the Final Day Rule, the
Offeror may terminate this right of withdrawal not less than eight days after the
Relevant Day by confirming (if that be the case) that the Offer is still unconditional as
to acceptances and by complying with Rule 28.1 of the Code and the requirements
set out in paragraph 3.1 of this Appendix 1;
4.2.2
withdraw his acceptance after 14 days from the first Closing Date, if the Offer has not
by then become or been declared to be unconditional as to acceptances. Such
entitlement to withdraw will be exercisable until the Offer becomes or is declared to
be unconditional as to acceptances; and
4.2.3
withdraw his acceptance immediately if a competing offer for the Offer Units becomes
or is declared to be unconditional as to acceptances. This right of withdrawal also
applies in the converse situation: if the Offer becomes or is declared to be
unconditional as to acceptances, a Unitholder who has accepted a competing offer
may likewise withdraw his acceptance for such other offer immediately.
4.3 Procedures for Withdrawal of Acceptances. To withdraw his acceptance under the Offer:
4.3.1
a Unitholder holding Units which are not deposited with CDP must give written
notice to the Offeror at New Precise Holdings Limited c/o Boardroom Corporate &
Advisory Services Pte. Ltd., 50 Raffles Place, #32-01 Singapore Land Tower,
Singapore 048623; and
4.3.2
a Unitholder holding Units which are deposited with CDP must give written notice
to the Offeror at New Precise Holdings Limited c/o The Central Depository (Pte)
Limited, Robinson Road Post Office P.O. Box 1984, Singapore 903934.
A notice of withdrawal shall be effective only if signed by the accepting Unitholder or his
agent duly appointed in writing and evidence of whose appointment is produced in a form
satisfactory to the Offeror within the said notice and when actually received by the Offeror.
20
APPENDIX 2 – PROCEDURES FOR ACCEPTANCE OF THE OFFER
1.
THE OFFER
1.1 Depositors
1.1.1
Depositors whose Securities Accounts are credited with Offer Units. If you have
Offer Units standing to the credit of the “Free Balance” of your Securities Account,
you should receive this Offer Document together with a FAA. If you do not receive the
FAA, you may obtain a copy of such FAA, upon production of satisfactory evidence
that you are a Unitholder, from CDP at 9 North Buona Vista Drive, #01-19/20 The
Metropolis, Singapore 138588.
Acceptance. If you wish to accept the Offer, you should:
(i)
complete the FAA in accordance with this Offer Document and the instructions
printed on the FAA. In particular, you must state in Part A of the FAA the number
of Offer Units in respect of which you wish to accept the Offer. If you:
(a)
do not specify such number; or
(b)
specify a number which exceeds the number of Offer Units standing to the
credit of the “Free Balance” of your Securities Account as at 5.00 p.m. on
the Date of Receipt or, in the case where the Date of Receipt is on the
Closing Date, as at 5.30 p.m. on the Closing Date,
you shall be deemed to have accepted the Offer in respect of all the Offer Units
already standing to the credit of the “Free Balance” of your Securities Account
as at 5.00 p.m. on the Date of Receipt or 5.30 p.m. on the Closing Date (if
the FAA is received by CDP on the Closing Date);
(ii)
sign the FAA in accordance with this Appendix 2 and the instructions printed on
the FAA; and
(iii) deliver the completed and signed FAA in its entirety (no part may be detached
or otherwise mutilated):
(a)
by hand, to New Precise Holdings Limited c/o The Central Depository
(Pte) Limited, 9 North Buona Vista Drive, #01-19/20 The Metropolis,
Singapore 138588; or
(b)
by post, in the enclosed pre-addressed envelope at your own risk, to New
Precise Holdings Limited c/o The Central Depository (Pte) Limited,
Robinson Road Post Office P.O. Box 1984, Singapore 903934,
in either case so as to arrive not later than 5.30 p.m. on the Closing Date.
If the completed and signed FAA is delivered by post to the Offeror, please use
the enclosed pre-addressed envelope.
If you have sold or transferred all your Offer Units held through CDP, you need not
forward this Offer Document and the accompanying FAA to the purchaser or
transferee, as CDP will arrange for a separate Offer Document and FAA to be sent
to the purchaser or transferee. Purchasers of the Offer Units should note that CDP
21
APPENDIX 2 – PROCEDURES FOR ACCEPTANCE OF THE OFFER
will, for and on behalf of the Offeror, send a copy of this Offer Document and the FAA
by ordinary post at the purchasers’ own risk to their respective mailing addresses as
they appear in the records of CDP.
If you are a Depository Agent, you may accept the Offer via Electronic Acceptance.
Such Electronic Acceptance must be submitted not later than 5.30 p.m. on the
Closing Date. CDP has been authorised by the Offeror to receive Electronic
Acceptances on its behalf. Electronic Acceptances submitted will be subject to each
of the terms and conditions contained in the FAA and this Offer Document as if the
FAA had been completed and delivered to CDP.
1.1.2
Depositors whose Securities Accounts will be credited with Offer Units. If you
have purchased Offer Units on the SGX-ST after the Despatch Date, and such Offer
Units are in the process of being credited to the “Free Balance” of your Securities
Account, you should also receive this Offer Document together with a FAA. If you do
not receive the FAA, you may obtain a copy of such FAA, upon production of
satisfactory evidence that you have purchased the Offer Units on the SGX-ST, from
CDP at 9 North Buona Vista Drive, #01-19/20 The Metropolis, Singapore 138588.
Acceptance. If you wish to accept the Offer in respect of such Offer Units, you
should, after the “Free Balance” of your Securities Account has been credited with
such number of Offer Units purchased:
(i)
complete and sign the FAA in accordance with paragraph 1.1.1 of this
Appendix 2 and the instructions printed on the FAA; and
(ii)
deliver the completed and signed FAA in its entirety (no part may be detached
or otherwise mutilated):
(a)
by hand, to New Precise Holdings Limited c/o The Central Depository
(Pte) Limited, 9 North Buona Vista Drive, #01-19/20 The Metropolis,
Singapore 138588; or
(b)
by post, in the enclosed pre-addressed envelope at your own risk, to New
Precise Holdings Limited c/o The Central Depository (Pte) Limited,
Robinson Road Post Office P.O. Box 1984, Singapore 903934,
in either case so as to arrive not later than 5.30 p.m. on the Closing Date.
If the completed and signed FAA is delivered by post to the Offeror, please use
the enclosed pre-addressed envelope.
1.1.3
Depositors whose Securities Accounts are and will be credited with Offer Units.
If you have Offer Units credited to the “Free Balance” of your Securities Account, and
have purchased additional Offer Units on the SGX-ST which are in the process of
being credited to your Securities Account, you may accept the Offer in respect of the
Offer Units standing to the credit of the “Free Balance” of your Securities Account and
may accept the Offer in respect of the additional Offer Units purchased which are in
the process of being credited to your Securities Account only after the “Free Balance”
of your Securities Account has been credited with such number of additional Offer
Units purchased.
22
APPENDIX 2 – PROCEDURES FOR ACCEPTANCE OF THE OFFER
1.1.4
Rejection. If you purchase Offer Units on the SGX-ST during the Offer Period and on
a date close to the Closing Date, your acceptance of the Offer in respect of such Offer
Units is liable to be rejected if the “Free Balance” of your Securities Account is not
credited with such Offer Units by 5.00 p.m. on the Date of Receipt or 5.30 p.m. on the
Closing Date (if the FAA is received by CDP on the Closing Date). If upon receipt by
CDP, on behalf of the Offeror, of the FAA, it is established that such Offer Units have
not been or will not be credited to the “Free Balance” of your Securities Account (for
example, where you sell or have sold such Offer Units), your acceptance is liable to
be rejected.
None of CDP, Credit Suisse and the Offeror (and, for the avoidance of doubt, any of
the Offeror’s related corporations) accept any responsibility or liability in relation to
such rejections, including the consequences thereof.
1.1.5
FAAs received on Saturday, Sunday and public holidays. For the avoidance of
doubt, FAAs received by CDP, for and on behalf of the Offeror, on a Saturday, Sunday
or public holiday in Singapore will only be processed and validated on the next
Business Day.
1.1.6
General. No acknowledgement will be given by CDP for FAAs submitted by hand or
by post to CDP or deposited into boxes located at CDP’s premises. All
communications, notices, documents and remittances to be delivered or sent to you
will be sent by ordinary post at your own risk to your address as it appears in the
records of CDP. For reasons of confidentiality, CDP will not entertain telephone
enquiries relating to the number of Units credited to your Securities Account. You can
verify such number in your Securities Account: (i) through CDP Online if you have
registered for the CDP Internet Access Service, or (ii) through the CDP Phone
Service if you have a T-Pin.
1.1.7
Suspense Account. Upon receipt by CDP, for and on behalf of the Offeror, of the
duly completed and signed original of the FAA, CDP will take such measures as it
may consider necessary and expedient to prevent any trading of the Offer Units in
respect of which you have accepted the Offer during the period commencing on the
Date of Receipt and ending on the date of settlement of the Offer Price, in the event
the Offer becomes or is declared unconditional in all respects in accordance with its
terms (including, without limitation, earmarking, blocking and/or transferring the
relevant number of Offer Units in respect of which you have accepted the Offer from
the “Free Balance” of your Securities Account to a “Suspense Account”). Such Offer
Units will be held in the “Suspense Account” until the consideration for such Offer
Units has been despatched to you.
1.1.8
Notification. If you have accepted the Offer in accordance with the provisions
contained in this Appendix 2 and the FAA, upon the Offer becoming or being
declared to be unconditional in accordance with its terms, CDP will send you a
notification letter stating the number of Offer Units debited from your Securities
Account together with payment of the Offer Price by way of a cheque drawn on a
bank in Singapore for the appropriate amount, or in such other manner as you may
have agreed with CDP for the payment of any cash distributions at your own risk, as
soon as practicable and in any event:
23
APPENDIX 2 – PROCEDURES FOR ACCEPTANCE OF THE OFFER
1.1.9
(i)
in respect of acceptances of the Offer which are complete and valid in all
respects and are received on or before the date on which the Offer becomes or
is declared unconditional in accordance with its terms, within 10 days of that
date; or
(ii)
in respect of acceptances of the Offer which are complete and valid in all
respects and are received after the Offer becomes or is declared unconditional
in accordance with its terms, but before the Offer closes, within 10 days of the
date of such receipt.
Return of Offer Units. In the event that the Offer does not become or is not declared
to be unconditional in accordance with its terms, CDP will return the aggregate
number of Offer Units in respect of which you have accepted the Offer and tendered
for acceptance under the Offer to the “Free Balance” of your Securities Account as
soon as possible but, in any event, within 14 days from the lapse or withdrawal of the
Offer.
1.1.10 No Securities Account. If you do not have any existing Securities Account in your
own name at the time of acceptance of the Offer, your acceptance as contained in the
FAA will be rejected.
1.2 Scripholders
1.2.1
Unitholders whose Offer Units are not deposited with CDP. If you hold Offer Units
in scrip form, you should receive this Offer Document together with a FAT.
1.2.2
Acceptance. If you wish to accept the Offer in respect of all or any of your Offer
Units, you should:
(i)
complete the FAT in accordance with this Offer Document and the instructions
printed on the FAT. In particular, you must state in Part (A) of the FAT the
number of Offer Units in respect of which you wish to accept the Offer and state
in Part (B) of the FAT the confirmation note number(s) of the relevant
confirmation note(s) evidencing title to the relevant number of Offer Units. If
you:
(a)
do not specify a number in Part (A) of the FAT; or
(b)
specify a number in Part (A) of the FAT which exceeds the number of Offer
Units entered in the Register as being held by you,
you shall be deemed to have accepted the Offer in respect of all the Offer Units
entered in the Register as being held by you;
(ii)
sign the FAT in accordance with this Appendix 2 and the instructions printed on
the FAT; and
24
APPENDIX 2 – PROCEDURES FOR ACCEPTANCE OF THE OFFER
(iii) deliver:
(a)
the completed and signed FAT in its entirety (no part may be detached or
otherwise mutilated);
(b)
the confirmation note(s), other document(s) of title and/or other relevant
document(s) required by the Offeror relating to the Offer Units in respect
of which you wish to accept the Offer. If you are recorded in the Register
as holding Offer Units but do not have the relevant confirmation note(s)
relating to such Offer Units, you, at your own risk, are required to procure
Forterra to issue such confirmation note(s) in accordance with the Trust
Deed and then deliver such confirmation note(s) in accordance with the
procedures set out in this Offer Document and the FAT; and
(c)
any other relevant document(s),
either by hand to New Precise Holdings Limited c/o Boardroom Corporate &
Advisory Services Pte. Ltd., 50 Raffles Place, #32-01 Singapore Land Tower,
Singapore 048623; or by post, in the enclosed pre-addressed envelope at your
own risk, to New Precise Holdings Limited c/o Boardroom Corporate & Advisory
Services Pte. Ltd., 50 Raffles Place, #32-01 Singapore Land Tower, Singapore
048623, in either case so as to arrive not later than 5.30 p.m. on the Closing
Date. If the completed and signed FAT is delivered by post to the Offeror, please
use the enclosed pre-addressed envelope.
2.
1.2.3
Receipt. No acknowledgement of receipt of any FAT, confirmation note(s), other
document(s) of title and/or any other accompanying document(s) will be given by the
Offeror, Credit Suisse or the Registrar.
1.2.4
Return of Offer Units. In the event the Offer does not become or is not declared to
be unconditional in accordance with its terms, the FAT, confirmation note(s) and/or
any other accompanying document(s) will be returned to you as soon as possible but,
in any event, within 14 days of the lapse or withdrawal of the Offer.
1.2.5
FATs received on Saturday, Sunday and public holidays. For the avoidance of
doubt, FATs received by the Registrar, for or on behalf of the Offeror, on a Saturday,
Sunday or public holiday in Singapore will only be processed and validated on the
next Business Day.
GENERAL
2.1 Disclaimer. The Offeror, Credit Suisse, the Registrar and/or CDP will be entitled, at their sole
and absolute discretion, to reject any acceptance of the Offer through the FAA and/or the
FAT, as the case may be, which is not entirely in order or which does not comply with the
terms of this Offer Document and the Relevant Acceptance Forms or which is otherwise
incomplete, incorrect, signed but not in its originality, or invalid in any respect. If you wish to
accept the Offer, it is your responsibility to ensure that the FAA and/or FAT, as the case may
be, is properly completed and executed in all respects and submitted with original
signature(s) and that all required documents, where applicable, are provided. Any decision
to reject any acceptance will be final and binding and none of the Offeror (or, for the
25
APPENDIX 2 – PROCEDURES FOR ACCEPTANCE OF THE OFFER
avoidance of doubt, any of the Offeror’s related corporations), Credit Suisse, the Registrar
and/or CDP accept any responsibility or liability for such a decision, including the
consequences of such a decision.
2.2 Discretion. The Offeror and Credit Suisse each reserves the right to treat acceptances of the
Offer as valid if received by or on behalf of either of them at any place or places determined
by them otherwise than as stated in this Offer Document and in the FAA and/or the FAT, as
the case may be, or if made otherwise than in accordance with the provisions of this Offer
Document and in the FAA and/or the FAT, as the case may be. Any decision to treat as valid
such acceptances will be final and binding and none of the Offeror (or, for the avoidance of
doubt, any of the Offeror’s related corporations), Credit Suisse, the Registrar and/or CDP
accept any responsibility or liability for such a decision, including the consequences of such
a decision.
2.3 Scrip and Scripless Offer Units. If you hold some Offer Units in scrip form and others with
CDP, you should complete a FAT for the former and a FAA for the latter in accordance with
the respective procedures set out in this Appendix 2 and the Relevant Acceptance Forms if
you wish to accept the Offer in respect of such Offer Units.
2.4 Deposit Time. If you hold Offer Units in scrip form, the Offer Units may not be credited into
your Securities Account with CDP in time for you to accept the Offer by way of the FAA if you
were to deposit your Offer Units with CDP on such terms and subject to such conditions as
may be prescribed CDP or the Trustee-Manager after the Despatch Date and ending on the
Closing Date (both dates inclusive). If you wish to accept the Offer in respect of such Offer
Units held in scrip form, you should complete a FAT and follow the procedures set out in
paragraph 1.2 of this Appendix 2 and the Relevant Acceptance Forms.
2.5 Correspondences. All communications, certificates, notices, documents and remittances to
be delivered or sent to you (or in the case of scripholders, your designated agent or, in the
case of joint accepting Unitholders who have not designated any agent, to the one
first-named in the Register, as the case may be) will be sent by ordinary post to your
respective addresses as they appear in the records of CDP or the Register, as the case may
be, at the risk of the person(s) entitled thereto (or, for the purposes of remittances only, to
such different names and addresses as may be specified by you in the FAA or the FAT, as
the case may be, at your own risk).
2.6 Evidence of Title. Delivery of the duly completed and signed FAA and/or FAT, as the case
may be, together with the relevant confirmation note(s) and/or other documents of title and/or
other relevant document(s) required by the Offeror, (details of which are consistent with the
relevant entries in the Register) to CDP, the Registrar and/or the Offeror, as the case may be,
shall be conclusive evidence in favour of CDP, the Registrar and/or the Offeror (or its
nominee), as the case may be, of the right and title of the person(s) signing it to deal with the
same and with the Offer Units to which it relates.
2.7 Loss in Transmission. The Offeror, Credit Suisse, CDP and/or the Registrar, as the case
may be, shall not be liable for any loss in transmission of the FAA and/or the FAT.
2.8 Acceptances Irrevocable. Except as expressly provided in this Offer Document and the
Code, the acceptance of the Offer made by you by using the FAA and/or the FAT, as the case
may be, shall be irrevocable and any instructions or subsequent FAA(s) and/or FAT(s)
received by CDP and/or the Registrar, as the case may be, after the FAA and/or the FAT, as
the case may be, has been received shall be disregarded.
26
APPENDIX 3A – ADDITIONAL INFORMATION ON THE OFFEROR
1.
DIRECTORS
The names, addresses and descriptions of the Directors as at the Latest Practicable Date are
as follows:
2.
Name
Address
Description
Mr. Eric Chung Chun Kwong
c/o 23/F, Nan Fung Tower,
88 Connaught Road Central,
Central, Hong Kong
Director
Mr. Vincent Cheung Sai Sing
c/o 23/F, Nan Fung Tower,
88 Connaught Road Central,
Central, Hong Kong
Director
Mr. Benson Chu Wai Ming
c/o 23/F, Nan Fung Tower,
88 Connaught Road Central,
Central, Hong Kong
Director
Mr. Nelson Tang Chun Wai
c/o 23/F, Nan Fung Tower,
88 Connaught Road Central,
Central, Hong Kong
Alternate Director to
Mr. Vincent Cheung
Sai Sing
PRINCIPAL ACTIVITIES AND SHARE CAPITAL
2.1 The Offeror is a company limited by shares incorporated in the British Virgin Islands on 28
March 2013. The principal activity of the Offeror is that of investment holding.
2.2 As at the Latest Practicable Date, the Offeror has an issued and paid-up share capital of
US$1,000.00 comprising 1,000 shares and is an indirect wholly-owned subsidiary of Nan
Fung.
3.
REGISTERED OFFICE
The registered office of the Offeror is at P.O. Box 957, Offshore Incorporations Centre, Road
Town, Tortola, British Virgins Islands.
27
APPENDIX 3B – ADDITIONAL INFORMATION ON
NAN FUNG INTERNATIONAL HOLDINGS LIMITED
1.
DIRECTORS
The names, addresses and descriptions of the directors of Nan Fung as at the Latest
Practicable Date are as follows:
2.
Name
Address
Description
Ms. Vivien Chen Wai Wai
c/o 23/F, Nan Fung Tower,
88 Connaught Road Central,
Central, Hong Kong
Chairman
Mr. Frank Seto Kai Shui
c/o 23/F, Nan Fung Tower,
88 Connaught Road Central,
Central, Hong Kong
Vice Chairman
Mr. Leung Kam Chung
c/o 23/F, Nan Fung Tower,
88 Connaught Road Central,
Central, Hong Kong
Director
Mr. Eric Chung Chun Kwong
c/o 23/F, Nan Fung Tower,
88 Connaught Road Central,
Central, Hong Kong
Director
Mr. Vincent Cheung Sai Sing
c/o 23/F, Nan Fung Tower,
88 Connaught Road Central,
Central, Hong Kong
Executive Director
Mr. Donald Choi Wun Hing
c/o 23/F, Nan Fung Tower,
88 Connaught Road Central,
Central, Hong Kong
Director
Mr. Cheung Pui Kuen
c/o 23/F, Nan Fung Tower,
88 Connaught Road Central,
Central, Hong Kong
Director
PRINCIPAL ACTIVITIES
Nan Fung is a company limited by shares incorporated in the British Virgin Islands on 8
August 2011. The principal activity of Nan Fung is investment holding.
3.
FINANCIAL SUMMARY
Set out below are certain financial information extracted from Nan Fung’s audited
consolidated financial statements for FY2012, FY2013 and FY2014 (collectively, the “Nan
Fung Financial Statements”). Such financial information should be read in conjunction with
the Nan Fung Financial Statements, and the accompanying notes as set out therein.
28
APPENDIX 3B – ADDITIONAL INFORMATION ON
NAN FUNG INTERNATIONAL HOLDINGS LIMITED
Summary consolidated income statements
FY2012 (audited)
(in HK$’000)
FY2013 (audited)
(in HK$’000)
FY2014 (audited)
(in HK$’000)
Net Turnover
4,679,823
3,604,396
2,645,682
(1)
1,399,342
–
2,343,321
Net profit before tax
5,934,677
7,174,586
6,209,772
Net profit after tax
5,405,472
6,690,144
5,910,337
Minority interests
16,824
37,585
(147,109)
Net earnings per
share (cents) (2)
9.2
10.6
9.7
Net dividends per
share (3)
–
–
–
Exceptional items
(1)
Exceptional items includes excess of fair value of net assets acquired over the cost of recognition of
associates.
(2)
Net earnings per share is calculated based on 58,798,164,383 ordinary shares in NFIHL outstanding as at 31
March 2012 and 62,743,532,190 ordinary shares in NFIHL outstanding as at 31 March 2013 and 31 March
2014.
(3)
Prior to the incorporation of Nan Fung on 8 August 2011, an interim dividend of HK$3,768,000,000 was
declared on 7 July 2011 and fully paid on 15 July 2011 by an entity that became a subsidiary of Nan Fung
post-incorporation of Nan Fung.
Statement of Assets and Liabilities
As at
31 March 2014
(audited)
(in HK$’000)
Assets
Non-current assets
60,329,158
Current assets
45,910,615
Total assets
106,239,773
Liabilities and Equity
Non-current liabilities
14,262,352
Current liabilities
14,203,155
Shareholders’ equity
76,911,120
Non-controlling interests
863,146
Total liabilities and equity
106,239,773
29
APPENDIX 3B – ADDITIONAL INFORMATION ON
NAN FUNG INTERNATIONAL HOLDINGS LIMITED
4.
MATERIAL CHANGES IN FINANCIAL POSITION
Save for Nan Fung making and financing the Offer up to the Latest Practicable Date, there
have been no known material changes in the financial position of Nan Fung since the date
of the last audited accounts of Nan Fung laid before the sole shareholder of Nan Fung in
general meeting.
5.
SIGNIFICANT ACCOUNTING POLICIES
The significant accounting policies of Nan Fung set out in the notes to Nan Fung’s audited
consolidated financial statements for FY2014 are set out in Appendix 7 to this Offer
Document.
6.
CHANGES IN ACCOUNTING POLICIES
There has been no change in the accounting policies of Nan Fung which will cause the
figures set out in paragraph 3 of this Appendix 3B to be not comparable to a material extent.
7.
REGISTERED OFFICE
The registered office of Nan Fung is at P.O. Box 957, Offshore Incorporations Centre, Road
Town, Tortola, British Virgin Islands.
30
APPENDIX 4 – ADDITIONAL INFORMATION ON FORTERRA
AND TRUSTEE-MANAGER
1.
DIRECTORS
The names, addresses and descriptions of the directors of the Trustee-Manager as at the
Latest Practicable Date, based on the latest information available to the Offeror, are as
follows:
2.
Name
Address
Description
Mr. Eric Chung Chun Kwong
c/o 23/F, Nan Fung Tower,
88 Connaught Road Central,
Central, Hong Kong
Non-Independent
Non-Executive Chairman
Mr. John Lim Kok Min
c/o 65 Chulia Street,
#43-08 OCBC Centre,
Singapore 049513
Independent
Non-Executive Director
Mr. Paul Cheng Kwok Kin
c/o 65 Chulia Street,
#43-08 OCBC Centre,
Singapore 049513
Independent
Non-Executive Director
Mr. John Lee Ting Kong
c/o 65 Chulia Street,
#43-08 OCBC Centre,
Singapore 049513
Independent
Non-Executive Director
Dr. Tan Khee Giap
c/o 65 Chulia Street,
#43-08 OCBC Centre,
Singapore 049513
Independent
Non-Executive Director
Mr. Yoon Wai Nam
c/o 65 Chulia Street,
#43-08 OCBC Centre,
Singapore 049513
Independent
Non-Executive Director
Mr. Vincent Cheung Sai Sing
c/o 23/F, Nan Fung Tower,
88 Connaught Road Central,
Central, Hong Kong
Non-Independent
Non-Executive Director
Mr. Nelson Tang Chun Wai
c/o 23/F, Nan Fung Tower,
88 Connaught Road Central,
Central, Hong Kong
Non-Independent
Non-Executive Director
SHARE CAPITAL OF TRUSTEE-MANAGER
As at the Latest Practicable Date, based on the latest available information available to the
Offeror, the Trustee-Manager has an issued and paid-up share capital of US$100,000
comprising 100,000 shares in issue and no shares are held in treasury.
3.
UNITS IN FORTERRA
As at the Latest Practicable Date, based on the latest available information available to the
Offeror, Forterra has:
(i)
257,019,717 Units in issue; and
(ii)
2,510,000 outstanding Unit Options exercisable in respect of 2,510,000 units under the
Forterra Unit Option Scheme.
31
APPENDIX 4 – ADDITIONAL INFORMATION ON FORTERRA
AND TRUSTEE-MANAGER
4.
MATERIAL CHANGES IN FINANCIAL POSITION
Save as disclosed in this Offer Document, the 3Q2014 Forterra Results and any other
information on Forterra which is publicly available (including, without limitation, the
announcements released by Forterra on the SGXNET), there has not been, within the
knowledge of the Offeror, any material changes in the financial position or prospects of
Forterra since the date of the last balance sheet laid before Forterra in general meeting.
A copy of the 3Q2014 Forterra Results is available on SGXNET.
5.
REGISTERED OFFICE
The registered office of Forterra and the Trustee-Manager is at 65 Chulia Street, #43-08
OCBC Centre, Singapore 049513.
32
APPENDIX 5 – DISCLOSURES
1.
HOLDINGS OF UNITS BY OFFEROR, DIRECTORS AND PARTIES ACTING IN CONCERT
The table below sets out the number of Units owned, controlled or agreed to be acquired by
the Offeror, the Directors and parties acting or deemed to be acting in concert with the
Offeror as at the Latest Practicable Date. (1)
Direct Interests
No. of
Units
%
Offeror
79,133,379
Deemed Interests
No. of
Units
%
Total Interests
No. of
Units
%
30.79
0
0
79,133,379
30.79
Directors of the Offeror
Eric Chung
Chun Kwong
0
0
0
0
0
0
Vincent Cheung
Sai Sing
0
0
0
0
0
0
Benson Chu
Wai Ming
0
0
0
0
0
0
Nelson Tang
Chun Wai (2)
0
0
0
0
0
0
Parties acting or deemed to be acting in concert with the Offeror in connection
with the Offer
Nan Fung (3)
0
0
79,133,379
30.79
79,133,379
30.79
Credit Suisse
0
0
0
0
0
0
(1)
For the purposes of the unitholding percentages, the total number of issued Units as at the Latest Practicable
Date is 257,019,717 Units.
(2)
Mr. Nelson Tang Chun Wai is an alternate director to Mr. Vincent Cheung Sai Sing, a Director.
(3)
Nan Fung is deemed interested in the Units registered in the name of the Offeror, which is an indirect
wholly-owned subsidiary of Nan Fung. Nan Fung does not hold any interest in the Units other than through
the Offeror.
33
APPENDIX 6 – GENERAL INFORMATION
1.
DISCLOSURE OF INTERESTS
1.1 No Agreement having any Connection with or Dependence upon the Offer. As at the
Latest Practicable Date, save as disclosed in this Offer Document, there is no agreement,
arrangement or understanding between (i) the Offeror or any person acting or deemed to be
acting in concert with the Offeror and (ii) any of the current or recent directors of the
Trustee-Manager any of the current or recent Unitholders having any connection with or
dependence upon the Offer.
1.2 Transfer of Units. As at the Latest Practicable Date, save as disclosed in this Offer
Document, there is no agreement, arrangement or understanding between the Offeror or any
person acting or deemed to be acting in concert with the Offeror whereby any Units acquired
pursuant to the Offer will be transferred to any other person. However, the Offeror reserves
the right to transfer any of the Units to any of its shareholders (or their affiliates) or its related
corporations (as defined in Section 6 of the Companies Act) or for the purpose of granting
security in favour of financial institutions which have extended or shall extend credit facilities
to it.
1.3 No Payment or Benefit to Directors of Trustee-Manager. 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 of the Trustee-Manager or any of its related corporations
(as defined in Section 6 of the Companies Act) as compensation for loss of office or
otherwise in connection with the Offer.
1.4 No Agreement Conditional Upon Outcome of Offer. As at the Latest Practicable Date,
save as disclosed in this Offer Document, there is no agreement, arrangement or
understanding between (i) the Offeror and (ii) any of the directors of the Trustee-Manager or
any other person in connection with or conditional upon the outcome of the Offer or otherwise
connected with the Offer.
1.5 Transfer Restrictions. The Trust Deed does not contain any restrictions on the right to
transfer any Offer Units.
1.6 Indemnity and Other Arrangements. As at the Latest Practicable Date, save as disclosed
in this Offer Document, neither the Offeror nor any person acting or deemed to be acting in
concert with the Offeror has entered into any arrangement with any person of the kind
referred to in Note 7 of Rule 12 of the Code, including indemnity or option arrangements, and
any agreement or understanding, formal or informal, of whatever nature, relating to the Units
which may be an inducement to deal or refrain from dealing in the Units.
2.
GENERAL
2.1 Costs and Expenses. All costs and expenses of or incidental to the preparation and
circulation of the Offer Document and the Relevant Acceptance Forms (other than
professional fees and other costs incurred or to be incurred by Forterra or the TrusteeManager relating to the Offer) and stamp duty and transfer fees (if any) resulting from
acceptances of the Offer will be paid by the Offeror.
34
APPENDIX 6 – GENERAL INFORMATION
2.2 Consent. Credit Suisse, as financial adviser to the Offeror, and the Registrar have each
given and have not withdrawn their written consent to the issue of this Offer Document, the
Relevant Acceptance Forms and any documents incidental or ancillary to the Offer with the
inclusion of their names and all references to their names in the form and context in which
it appears in this Offer Document.
3.
MARKET QUOTATIONS
3.1 Closing Prices. The following table sets out, inter alia, the closing prices of the Units on the
SGX-ST (as reported by Bloomberg L.P.) (i) on the Latest Practicable Date; (ii) on the Last
Trading Day; and (iii) on the last Market Day of each month from May 2014 to October 2014
(being the six calendar months preceding the Offer Announcement Date) and the
corresponding premium or discount based on the Offer Price of S$1.85:
Closing Price
(S$)
Premium/(Discount)
based on
Offer Price of S$1.85
(%)
17 November 2014
(the Latest Practicable Date)
1.860
(0.5)
3 November 2014 (the Last Trading Day)
1.700
8.8
31 October 2014
1.600
15.6
30 September 2014
1.425
29.8
29 August 2014
1.500
23.3
31 July 2014
1.700
8.8
26 June 2014
1.650
12.1
30 May 2014
1.690
9.5
Date
3.2 Highest and Lowest Prices. The highest and lowest closing prices of the Units on the
SGX-ST (as reported by Bloomberg L.P.) during the Reference Period are S$1.870 and
S$1.370, respectively.
The highest closing price of S$1.870 was transacted on 5 November 2014 and the lowest
closing price of S$1.370 was transacted on 16 October 2014.
4.
DOCUMENTS FOR INSPECTION
Copies of the following documents may be inspected at Credit Suisse at One Raffles Link,
#03-01, South Lobby, Singapore 039393 during normal business hours for the period for
which the Offer remains open for acceptance:
(i)
the Memorandum and Articles of Association of the Offeror;
(ii)
the letters of consent of Credit Suisse and the Registrar referred to in paragraph 2.2
of this Appendix 6;
(iii) the Offer Announcement; and
(iv) the Nan Fung Financial Statements.
35
APPENDIX 7 – EXTRACT OF NAN FUNG FINANCIAL STATEMENTS
NAN FUNG INTERNATIONAL HOLDINGS LIMITED
(Incorporated in the British Virgin Islands with limited liability)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
2
Summary of significant accounting policies
The significant accounting policies applied in the preparation of these consolidated financial
statements are set out below. These accounting policies have been consistently applied to all the
years presented, unless otherwise stated.
(a)
Basis of preparation
These consolidated financial statements have been prepared in accordance with International
Financial Reporting Standards (“IFRSs”). The consolidated financial statements have been
prepared under the historical cost convention, as modified by the revaluation of investment
properties, available-for-sale financial assets, and financial assets and financial liabilities
(including derivative instruments) at fair value through profit or loss, which are carried at fair
values.
The preparation of financial statements in conformity with IFRSs requires the use of certain critical
accounting estimates. It also requires management to exercise its judgement in the process of
applying the Group’s accounting policies. The areas involving a higher degree of judgement or
complexity, or areas where assumptions and estimates are significant to the consolidated financial
statements are disclosed in note 4.
36
APPENDIX 7 – EXTRACT OF NAN FUNG FINANCIAL STATEMENTS
NAN FUNG INTERNATIONAL HOLDINGS LIMITED
(Incorporated in the British Virgin Islands with limited liability)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
2
Summary of significant accounting policies (Continued)
(a)
Basis of preparation (Continued)
(i)
New or revised standards, amendments to standards and interpretation adopted by the
Group
The new or revised standards, amendments to standards and interpretation which are
mandatory for the financial year beginning 1st April 2013 are as follows:
IAS 1 (Amendment)
IAS 19 (Amendment)
IAS 27 (Revised 2011)
IAS 28 (Revised 2011)
IFRS 1 (Amendment)
IFRS 7 (Amendment)
IFRS 10
IFRS 11
IFRS 12
IFRS 13
IFRS 10, IFRS 11 and
IFRS 12 (Amendments)
IFRS
IFRIC 20
Financial Statements Presentation
Employee Benefits
Separate Financial Statements
Investments in Associates and Joint Ventures
First Time Adoption on Government Loans
Disclosures – Offsetting Financial Assets and Financial Liabilities
Consolidated Financial Statements
Joint Arrangements
Disclosure of Interests in Other Entities
Fair Value Measurements
Consolidated Financial Statements, Joint Arrangements and
Disclosures of Interests in Other Entities — Transition Guidance
Annual Improvement 2011 and 2012
Stripping Costs in Production Phase of a Surface Mine
The effect of the adoption of these new or revised standards, amendments to standards
and interpretation are detailed below:
The main change resulting from IAS 1 (Amendment), “Financial statement presentation” is
a requirement for entities to group items presented in other comprehensive income on the
basis of whether they are potentially reclassifiable to profit or loss subsequently. The
adoptions of these amendments affect presentation only and had no impact to the Group’s
result and financial position.
Under IFRS 10, “Consolidated financial statements”, subsidiaries are all entities (including
structured entities) over which the Group has control. The Group controls an entity when
the Group has power over an entity, is exposed to, or has rights to, variable returns from
its involvement with the entity and has the ability to affect these returns through its power
over the entity. Subsidiaries are fully consolidated from the date on which control is
transferred to the Group. They are deconsolidated from the date that control ceases. The
Group has applied IFRS 10 retrospectively in accordance with the transition provisions of
IFRS 10. IFRS 10 had no impact on the consolidation of investments held by the Group.
Under IFRS 11, “Joint arrangements”, investments in joint arrangements are classified
either as joint operations or joint ventures, depending on the contractual rights and
obligations each investor has rather than the legal structure of the joint arrangement.
Proportionate consolidation to account for joint arrangement is no longer permitted. The
adoption of IFRS 11 had no impact on the Group’s result and financial position.
IFRS 12, “Disclosure of interests in other entities” includes the disclosure requirements for
all form of interests in other entities, including joint arrangements, associates, structured
entities and other off balance sheet vehicles. The adoption of IFRS 12 affects the disclosure
only and had no impact on the Group’s result and financial position.
IFRS 13, “Fair value measurement” aims to improve consistency and reduce complexity by
providing a precise definition of fair value and a single source of fair value measurement
and disclosure requirements for use across IFRS. Adoption of this standard affects the
disclosure only and had no impact to the Group’s result and financial position.
37
APPENDIX 7 – EXTRACT OF NAN FUNG FINANCIAL STATEMENTS
NAN FUNG INTERNATIONAL HOLDINGS LIMITED
(Incorporated in the British Virgin Islands with limited liability)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
2
Summary of significant accounting policies (Continued)
(a)
Basis of preparation (Continued)
(ii)
New or revised standards, amendments and interpretations which are not yet effective for
this financial year and have not been early adopted by the Group.
The Group has not early adopted the following new or revised standards, amendments and
interpretations that have been issued but are not yet effective for the year ended 31st
March 2014:
Effective for
accounting periods
beginning on or after
IAS 32 (Amendment)
IAS 36 (Amendment)
IAS 39 (Amendment)
IAS 27 (2011), IFRS 10 and
IFRS 12 (Amendments)
IFRIC 21
IFRS 9
IFRS 15
Offsetting Financial Assets and
Financial Liabilities
Impairment of Assets on Recoverable
Amount Disclosure
Novation of Derivatives
Investment entities
Levies
Financial Instruments
Revenue from Contracts with
Customers
1st January 2014
1st January 2014
1st January 2014
1st January 2014
1st January 2014
1st January 2018
1st January 2017
The Group will adopt the above new or revised standards, amendments and
interpretations as and when they become effective. The Group has already commenced the
assessment of the impact to the Group and is not yet in a position to state whether these
would have a significant impact on the results of operations and financial position of the
Group.
(b)
Consolidation
(i)
Subsidiaries
A subsidiary is an entity (including a structured entity) over which the Group has control.
The Group controls an entity when the Group is exposed to, or has rights to, variable
returns from its involvement with the entity and has the ability to affect those returns
through its power over the entity. Subsidiaries are consolidated from the date on which
control is transferred to the Group. They are deconsolidated from the date that control
ceases.
The Group applies the acquisition method to account for business combinations. The
consideration transferred for the acquisition of a subsidiary is the fair values of the assets
transferred, the liabilities incurred to the former owners of the acquiree and the equity
interests issued by the Group. The consideration transferred includes the fair value of any
asset or liability resulting from a contingent consideration arrangement. Identi¿able assets
acquired and liabilities and contingent liabilities assumed in a business combination are
measured initially at their fair values at the acquisition date. Acquisition-related costs are
expensed as incurred.
Inter-company transactions, balances and unrealised gains on transactions between group
companies are eliminated. Unrealised losses are also eliminated. Accounting policies of
subsidiaries have been changed where necessary to ensure consistency with the policies
adopted by the Group.
38
APPENDIX 7 – EXTRACT OF NAN FUNG FINANCIAL STATEMENTS
NAN FUNG INTERNATIONAL HOLDINGS LIMITED
(Incorporated in the British Virgin Islands with limited liability)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
2
Summary of significant accounting policies (Continued)
(b)
Consolidation (Continued)
(ii)
Transactions with non-controlling interests
Transactions with non-controlling interests that do not result in a loss of control are
accounted for as equity transactions. The difference between fair value of any
consideration paid and the relevant share acquired of the carrying amount of net assets of
the subsidiary is recorded in equity. Gains or losses on disposals to non-controlling
interests are also recorded in equity.
(iii)
Joint arrangements
Under IFRS 11 investments in joint arrangements are classified as either joint operations
or joint ventures depending on the contractual rights and obligations of each investor. The
Group has assessed the nature of its joint arrangements and determined them to be joint
ventures. Joint ventures are accounted for using the equity method.
Under the equity method of accounting, interests in joint ventures are initially recognised
at cost and adjusted thereafter to recognise the Group’s share of the post-acquisition
profits or losses and movements in other comprehensive income. When the Group’s share
of losses in a joint venture equals or exceeds its interest in the joint venture, the Group
does not recognise further losses, unless it has incurred obligations or made payments on
behalf of the joint venture.
(iv)
Associates
An associate is an entity over which the Group has significant influence but not control,
generally accompanying a shareholding of between 20% and 50% of the voting rights.
Investments in associates are accounted for using the equity method of accounting. Under
the equity method, the investment is initially recognised at cost, and the carrying amount
is increased or decreased to recognise the investor’s share of the profit or loss of the
investee after the date of acquisition. The Group’s investment in associates includes
goodwill identified on acquisition, net of any accumulated impairment loss.
The Group's share of post-acquisition profit or loss is recognised in the consolidated
income statement, and its share of post-acquisition movements in other comprehensive
income is recognised in other comprehensive income with a corresponding adjustment to
the carrying amount of the investment. When the Group's share of losses in an associate
equals or exceeds its interest in the associate, including any other unsecured receivables,
the Group does not recognise further losses, unless it has incurred legal or constructive
obligations or made payments on behalf of the associate.
The financial statements of the associates used for this purpose cover a year ended not
more than three months before the Company’s year end and serve as the most recent
available financial information. Where a significant event occurs between the associates’
year end and that of the Group, adjustments are made in the consolidated financial
statements for the effect of the event.
The Group determines at each reporting date whether there is any objective evidence that
the investment in the associate is impaired. If this is the case, the Group calculates the
amount of impairment as the difference between the recoverable amount of the associate
and its carrying value and recognises the amount adjacent to “share of results of associates”
in the consolidated income statement.
39
APPENDIX 7 – EXTRACT OF NAN FUNG FINANCIAL STATEMENTS
NAN FUNG INTERNATIONAL HOLDINGS LIMITED
(Incorporated in the British Virgin Islands with limited liability)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
2
Summary of significant accounting policies (Continued)
(c)
Foreign currency translation
(i)
Functional and presentation currency
Items included in the financial statements of each of the Group’s entities are measured
using the currency of the primary economic environment in which the entity operates (“the
functional currency”). The consolidated financial statements are presented in Hong Kong
dollar (“HK dollar”), which is the Group’s presentation currency and the Company’s
functional currency.
(ii)
Transactions and balances
Foreign currency transactions are translated into the functional currency using the
exchange rates prevailing at the dates of the transactions or valuation where items are remeasured. Foreign exchange gains and losses resulting from the settlement of such
transactions and from the translation at year-end exchange rates of monetary assets and
liabilities denominated in foreign currencies are recognised in the consolidated income
statement.
Foreign exchange gains and losses that relate to borrowings are presented in the
consolidated income statement within ‘finance income, net’. All other foreign exchange
gains and losses are presented in the consolidated income statement within ‘other gains,
net’.
Changes in the fair value of monetary securities denominated in foreign currency classified
as available-for-sale are analysed between translation differences resulting from changes
in the amortised cost of the security and other changes in the carrying amount of the
security. Translation differences related to changes in amortised cost are recognised in
consolidated income statement, and other changes in carrying amount are recognised in
other comprehensive income.
Translation differences on non-monetary financial assets and liabilities such as equities
held at fair value through profit or loss are recognised in consolidated income statement as
part of the fair value gain or loss.
(iii)
Group companies
The results and financial position of all the group entities (none of which has the currency
of a hyper-inflationary economy) that have a functional currency different from the
presentation currency are translated into the presentation currency as follows:
(a)
assets and liabilities for each balance sheet presented are translated at the closing
rate at the date of that balance sheet;
(b)
income and expenses for each income statement are translated at average
exchange rates (unless this average is not a reasonable approximation of the
cumulative effect of the rates prevailing on the transaction dates, in which case
income and expenses are translated at the rate on the dates of the transactions);
and
(c)
all resulting exchange differences are recognised in other comprehensive income.
When a foreign operation is partially disposed of or sold, exchange differences that were
recorded in equity are recognised in the consolidated income statement as part of the gain
or loss on sale.
40
APPENDIX 7 – EXTRACT OF NAN FUNG FINANCIAL STATEMENTS
NAN FUNG INTERNATIONAL HOLDINGS LIMITED
(Incorporated in the British Virgin Islands with limited liability)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
2
Summary of significant accounting policies (Continued)
(d)
Property, plant and equipment
Leasehold land classified as finance lease and all other property, plant and equipment is stated at
historical cost less depreciation. Historical cost includes expenditure that is directly attributable to
the acquisition of the items.
Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as
appropriate, only when it is probable that future economic bene¿ts associated with the item will
flow to the Group and the cost of the item can be measured reliably. The carrying amount of the
replaced part is derecognised. All other repairs and maintenance are charged to the consolidated
income statement during the financial period in which they are incurred.
Construction in progress, mainly representing buildings on which construction work has not been
completed, is stated at cost, which includes development and construction expenditure, interest
and other direct costs incurred during the construction period, less accumulated impairment losses,
if any. No depreciation is provided for in respect of construction in progress until the construction
and installation is completed. On completion, the construction in progress is transferred to the
appropriate categories of property, plant and equipment.
Leasehold land classified as finance lease commences amortisation from the time when the land
interest becomes available for its intended use. Depreciation on property, plant and equipment is
calculated using the straight-line method to allocate their cost to their residual values over their
estimated useful lives, as follows:
Freehold land
Leasehold land
Building and hotel properties
Furniture, fixtures and equipment
Hotel furniture, fixtures and equipment
Motor vehicles
Not depreciated
Lease term of 40 years
The shorter of the lease term of 40 years or estimated
useful lives
Initial charge of 30% on cost in the year of acquisition
and 10% per annum thereafter on cost
5% - 10% per annum on cost
25% per annum on cost
The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at the end of
each reporting period.
An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s
carrying amount is greater than its estimated recoverable amount (note 2(i)).
Gains and losses on disposals are determined by comparing the proceeds with the carrying amount
and are recognised within ‘other gains, net’ in the consolidated income statement.
(e)
Investment properties
Investment properties, principally comprising leasehold land and buildings, are held for long-term
rental yields or for capital appreciation or both, and that are not occupied by the Group. They also
include properties that are being constructed or developed for future use as investment properties.
Land held under operating leases are accounted for as investment properties when the rest of the
definition of an investment property is met. In such cases, the operating leases concerned are
accounted for as if they were finance leases. Investment properties are initially measured at cost,
including related transaction costs and where applicable borrowing costs. After initial recognition,
investment properties are carried at fair value, representing open market value determined at each
reporting date by external valuers. Fair value is based on active market prices, adjusted, if
necessary, for any difference in the nature, location or condition of the specific asset. If the
information is not available, the Group uses alternative valuation methods such as recent prices on
less active markets or discounted cash flow projections. Changes in fair values are recorded in the
consolidated income statement.
41
APPENDIX 7 – EXTRACT OF NAN FUNG FINANCIAL STATEMENTS
NAN FUNG INTERNATIONAL HOLDINGS LIMITED
(Incorporated in the British Virgin Islands with limited liability)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
2
Summary of significant accounting policies (Continued)
(e)
Investment properties (Continued)
Subsequent expenditure is charged to the asset’s carrying amount only when it is probable that
future economic benefits associated with the item will flow to the Group and the cost of the item
can be measured reliably. All other repairs and maintenance costs are expensed in the
consolidated income statement during the financial period in which they are incurred. Investment
properties that are being redeveloped for continuing use as investment properties continue to be
measured at fair value. Fair value measurement on properties under construction is only applied if
the fair value is considered to be reliably measurable.
Investment properties are derecognised either when they have been disposed of or when the
investment properties are permanently withdrawn from use and no future economic benefit is
expected from its disposal.
Where the Group disposes of an investment property, the transaction price less the carrying value
immediately prior to the sale is treated as gain/loss on disposal of investment property and
recorded in consolidated income statement within ‘other gains, net’.
(f)
Properties under development and properties for sale
Properties under development are investments in land and buildings on which construction work
and development have not been completed, and are stated at the lower of cost and net realisable
value. Borrowing costs incurred during the construction period and up to the date of completion of
construction are capitalised as development costs. On completion, the properties are reclassified to
properties for sale at the then carrying amount.
Properties for sale are stated at the lower of cost and estimated net realisable value. Net realisable
value is the estimated selling price in the ordinary course of business less selling expenses.
(g)
Leases
Leases in which a significant portion of the risks and rewards of ownership are retained by the
lessor are classified as operating leases. All other leases are classified as finance leases.
(i)
The Group as lessor
Rental income from operating leases is recognised in the consolidated income statement
on a straight-line basis over the term of the relevant lease.
(ii)
The Group as lessee
Operating lease payments are recognised as an expense on a straight-line basis over the
term of the relevant lease. Benefits received and receivable as an incentive to enter into an
operating lease are recognised as a reduction of rental expense over the lease term on a
straight-line basis.
(h)
Financial assets
(i)
Classification of financial assets
The Group classifies its financial assets in the following categories: at fair value through
profit or loss, loans and receivables and available-for-sale financial assets. The
classification depends on the purpose for which the financial assets were acquired.
Management determines the classification of its financial assets at initial recognition.
42
APPENDIX 7 – EXTRACT OF NAN FUNG FINANCIAL STATEMENTS
NAN FUNG INTERNATIONAL HOLDINGS LIMITED
(Incorporated in the British Virgin Islands with limited liability)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
2
(h)
Summary of significant accounting policies (Continued)
Financial assets (Continued)
(i)
Classification of financial assets (Continued)
(1)
Financial assets at fair value through pro¿t or loss
Financial assets at fair value through pro¿t or loss are ¿nancial assets held for trading.
An asset is classi¿ed in this category if acquired principally for the purpose of selling
in the short term. Derivatives are also categorised as held for trading unless they are
designated as hedges. Assets in this category are classi¿ed as current assets if
expected to be settled within 12 months; otherwise, they are classi¿ed as non-current.
(2)
Loans and receivables
Loans and receivables are non-derivative financial assets with ¿xed or determinable
payments that are not quoted in an active market. They are included in current assets,
except for maturities greater than 12 months after the end of the reporting period.
These are classi¿ed as non-current assets.
(3)
Available-for-sale financial assets
Available-for-sale financial assets are non-derivatives that are either designated in
this category or not classified in any of the other categories. They are included in noncurrent assets unless the investment matures or management intends to dispose of it
within 12 months of the end of the reporting period.
(ii)
Recognition and measurement
Regular purchases and sales of financial assets are recognised on the trade-date (the date on
which the Group commits to purchase or sell the asset). Investments are initially recognised
at fair value plus transaction costs for all financial assets not carried at fair value through
profit or loss. Financial assets carried at fair value through profit or loss are initially
recognised at fair value, and transaction costs are expensed in the consolidated income
statement. Financial assets are derecognised when the rights to receive cash from the
investments have expired or have been transferred and the Group has transferred
substantially all risks and rewards of ownership. Available-for-sale financial assets and
financial assets at fair value through profit or loss are subsequently carried at fair value.
Loans and receivables are subsequently carried at amortised cost using the effective interest
method.
Gains or losses arising from changes in the fair value of the “financial assets at fair value
through profit or loss” category are presented in the consolidated income statement as part of
revenue in the period in which they arise. Dividend income from financial assets at fair value
through profit or loss is recognised in the consolidated income statement as part of revenue
when the Group’s right to receive payments is established.
Changes in the fair value of monetary and non-monetary securities classified as available-forsale are recognised in other comprehensive income.
When securities classified as available-for-sale are sold or impaired, the accumulated fair
value adjustments recognised in equity are included in the consolidated income statement as
“other gains, net”.
Interest on available-for-sale securities calculated using the effective interest method is
recognised in the consolidated income statement as part of revenue. Dividends on availablefor-sale equity instruments are recognised in the consolidated income statement as part of
revenue when the Group’s right to receive payments is established.
43
APPENDIX 7 – EXTRACT OF NAN FUNG FINANCIAL STATEMENTS
NAN FUNG INTERNATIONAL HOLDINGS LIMITED
(Incorporated in the British Virgin Islands with limited liability)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
2
Summary of significant accounting policies (Continued)
(h)
Financial assets (Continued)
(iii)
Offsetting financial instruments
Financial assets and liabilities are offset and the net amount reported in the consolidated
balance sheet when there is a legally enforceable right to offset the recognised amounts
and there is an intention to settle on a net basis or realise the asset and settle the liability
simultaneously.
(iv)
Impairment of financial assets
(1)
Assets carried at amortised cost
The Group assesses at the end of each reporting period whether there is objective
evidence that a financial asset or group of financial assets is impaired. A financial
asset or a group of financial assets is impaired and impairment losses are incurred
only if there is objective evidence of impairment as a result of one or more events
that occurred after the initial recognition of the asset (a “loss event”) and that loss
event has an impact on the estimated future cash flow of the financial asset or
group of financial assets that can be reliably estimated.
For loans and receivables category, the amount of the loss is measured as the
difference between the asset’s carrying amount and the present value of estimated
future cash flow discounted at the financial asset’s original eơective interest rate.
The carrying amount of the asset is reduced and the amount of the loss is
recognised in the consolidated income statement.
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 reversal of the previously recognised impairment loss is recognised
in the consolidated income statement.
(2)
Assets classified as available-for-sale
The Group assesses at the end of each reporting period whether there is objective
evidence that a financial asset or a group of financial assets is impaired. In the case
of equity investments classified as available-for-sale, a significant or prolonged
decline in the fair value of the security below its cost is evidence that the assets are
impaired. If any such evidence exists for available-for-sale financial assets, the
cumulative loss - measured as the difference between the acquisition cost and the
current fair value, less any impairment loss on that financial asset previously
recognised in consolidated income statement - is removed from equity and
recognised in the separate income statement. Impairment losses recognised in the
separate income statement on equity instruments are not reversed through the
separate income statement. If, in a subsequent period, the fair value of a debt
instrument classified as available-for-sale increases and the increase can be
objectively related to an event occurring after the impairment loss was recognised
in consolidated income statement, the impairment loss is reversed through the
separate income statement.
44
APPENDIX 7 – EXTRACT OF NAN FUNG FINANCIAL STATEMENTS
NAN FUNG INTERNATIONAL HOLDINGS LIMITED
(Incorporated in the British Virgin Islands with limited liability)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
2
Summary of significant accounting policies (Continued)
(i)
Impairment of non-financial assets
Assets that have an indefinite useful life are not subject to amortisation and are tested annually for
impairment. Assets are reviewed for impairment whenever events or changes in circumstances
indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the
amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable
amount is the higher of an asset’s fair value less costs to sell and value in use. For the purposes of
assessing impairment, assets are grouped at the lowest levels for which there are separately
identifiable cash flows (cash-generating units). Non-financial assets other than goodwill that
suffered an impairment are reviewed for possible reversal of the impairment at each reporting date.
(j)
Derivatives
Derivatives are initially recognised at fair value on the date on which a derivative contract is
entered into and are subsequently remeasured at their fair value. Fair values are obtained from
quoted market prices in active markets, including recent market transactions, and valuation
techniques, including discounted cash flow models and options pricing models, as appropriate. All
derivatives are carried as assets when fair value is positive and as liabilities when fair value is
negative.
For derivative financial instruments do not qualify for hedge accounting, changes in fair value are
recognised immediately in consolidated income statement.
(k)
Trade and other receivables
Trade receivables are amounts due from customers for goods sold or services performed in the
ordinary course of business. If collection of trade and other receivables is expected in one year or
less (or in the normal operating cycle of the business if longer), they are classified as current assets.
If not, they are presented as non-current assets.
Trade and other receivables are recognised initially at fair value and subsequently measured at
amortised cost using the effective interest method, less provision for impairment.
(l)
Contracts in progress
Cost comprises materials, direct labour and overheads attributable to bringing the inventories and
work in progress to its present condition.
The Group presents as an asset the gross amount due from customers for contract work for all
contracts in progress for which costs incurred plus recognised profits (less recognised losses)
exceed progress billings. Progress billings not yet paid by customers and retention are included
under current assets. The Group presents as a liability the gross amount due to customers for
contract work for all contracts in progress for which progress billings exceed costs incurred plus
recognised profits (less recognised losses).
(m)
Cash and cash equivalents
In the consolidated statement of cash flows, cash and cash equivalents includes cash in hand,
deposits held at call with banks, other short-term highly liquid investments with original
maturities of three months or less and bank overdrafts. In the consolidated balance sheet, bank
overdrafts are shown within borrowings in current liabilities.
45
APPENDIX 7 – EXTRACT OF NAN FUNG FINANCIAL STATEMENTS
NAN FUNG INTERNATIONAL HOLDINGS LIMITED
(Incorporated in the British Virgin Islands with limited liability)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
2
Summary of significant accounting policies (Continued)
(n)
Employee benefits
(i)
Employee leave entitlements
Employee entitlements to annual leave are recognised when they accrue to employees. A
provision is made for the estimated liability for annual leave as a result of services
rendered by employees up to the balance sheet date.
Employee entitlements to sick leave and maternity leave are not recognised until the time
of leave.
(ii)
Pension obligations
The Group operates several defined contribution retirement schemes and mandatory
provident fund schemes which are available to all employees. The assets of the schemes
are held separately from those of the Group in independently administered funds. The
Group’s contributions under the schemes are expensed as incurred. The amount of the
Group’s contributions is based on specified percentages of the basic salaries of employees.
Any contributions forfeited by employees who leave the Group, relating to unvested
benefits, are used to reduce the Group’s ongoing contributions otherwise payable.
(iii)
Bonus entitlements
The expected cost of bonus payments is recognised as liability when the Group has a
present legal or constructive obligation as a result of services rendered by employees and a
reliable estimate of the obligation can be made.
(o)
Borrowings
Borrowings are recognised initially at fair value, net of transaction costs incurred. Borrowings are
subsequently carried at amortised cost; any difference between the proceeds (net of transaction
costs) and the redemption value is recognised in the consolidated income statement over the
period of the borrowings using the effective interest method.
Fees paid on the establishment of loan facilities are recognised as transaction costs of the loan to
the extent that it is probable that some or all of the facility will be drawn down. In this case, the fee
is deferred until the draw-down occurs. To the extent there is no evidence that it is probable that
some or all of the facility will be drawn down, the fee is capitalised as a pre-payment for liquidity
services and amortised over the period of the facility to which it relates.
Borrowings are classified as current liabilities unless the Group has an unconditional right to defer
settlement of the liability for at least 12 months after the end of the reporting period.
46
APPENDIX 7 – EXTRACT OF NAN FUNG FINANCIAL STATEMENTS
NAN FUNG INTERNATIONAL HOLDINGS LIMITED
(Incorporated in the British Virgin Islands with limited liability)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
2
Summary of significant accounting policies (Continued)
(p)
Trade payables
Trade payables are obligations to pay for goods or services that have been acquired in the ordinary
course of business from suppliers. Trade payables are classi¿ed as current liabilities if payment is
due within one year or less (or in the normal operating cycle of the business if longer). If not, they
are presented as non-current liabilities.
Trade payables are recognised initially at fair value and subsequently measured at amortised cost
using the effective interest method.
(q)
Current and deferred income tax
The tax expense for the period comprises current and deferred income tax. Tax is recognised in the
consolidated income statement, except to the extent that it relates to items recognised in other
comprehensive income or directly in equity. In this case, the tax is also recognised in other
comprehensive income or directly in equity, respectively.
The current income tax charge is calculated on the basis of the tax laws enacted or substantively
enacted at the balance sheet date in the countries where the Company and its subsidiaries operate
and generate taxable income. Management periodically evaluates positions taken in tax returns
with respect to situations in which applicable tax regulation is subject to interpretation. It
establishes provisions where appropriate on the basis of amounts expected to be paid to the tax
authorities.
Deferred income tax is recognised, using the liability method, on temporary differences arising
between the tax bases of assets and liabilities and their carrying amounts in the financial
statements. However, deferred income tax liabilities are not recognised if they arise from the initial
recognition of goodwill; deferred income tax is not accounted for if it arises from initial recognition
of an asset or liability in a transaction other than a business combination that at the time of the
transaction affects neither accounting nor taxable profit or loss. Deferred income tax is determined
using tax rates (and laws) that have been enacted or substantially enacted by the balance sheet date
and are expected to apply when the related deferred income tax asset is realised or the deferred
income tax liability is settled.
Deferred income tax assets are recognised only to the extent that it is probable that future taxable
profit will be available against which the temporary differences can be utilised.
Deferred income tax assets and liabilities are offset when there is a legally enforceable right to
offset current tax assets against current tax liabilities and when the deferred income taxes assets
and liabilities relate to income taxes levied by the same taxation authority on either the same
taxable entity or different taxable entities where there is an intention to settle the balances on a net
basis.
47
APPENDIX 7 – EXTRACT OF NAN FUNG FINANCIAL STATEMENTS
NAN FUNG INTERNATIONAL HOLDINGS LIMITED
(Incorporated in the British Virgin Islands with limited liability)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
2
Summary of significant accounting policies (Continued)
(r)
Provisions
Provisions are recognised when the Group has a present legal or constructive obligation as a result
of past events; it is probable that an outflow of resources will be required to settle the obligation;
and the amount has been reliably estimated. Provisions are not recognised for future operating
losses.
Provisions are measured at the present value of the expenditures expected to be required to settle
the obligation using a pre-tax rate that reflects current market assessments of the time value of
money and the risks specific to the obligation. The increase in the provision due to passage of time
is recognised as interest expense.
(s)
Financial guarantee contract
A financial guarantee contract is a contract that requires the issuer to make specified payments to
reimburse the beneficiary of the guarantee for a loss the holder incurs because a specified debtor
fails to make payment when due in accordance with the terms of a debt instrument. Such financial
guarantees are given to banks, financial institutions and other bodies on behalf of subsidiaries,
associates, joint ventures and related companies to secure loans, overdrafts and other banking
facilities.
The Group regards its financial guarantees provided to its subsidiaries, associates, joint ventures
and related companies as insurance contracts. The Group assesses at each balance sheet date the
liabilities under its insurance contracts using current estimates of future cash flows. Changes in
carrying amount of these insurance liabilities are recognised in the consolidated income statement.
(t)
Revenue and income recognition
(i)
Sale of properties
Revenue from sales of properties is recognised when the risks and rewards of the
properties transferred to the purchaser, which is when the construction of the relevant
properties have been completed and properties have been delivered to the purchaser
pursuant to the sale agreements and collectability of related receivables is reasonable
assured. Deposits and instalments received on properties sold prior to the date of revenue
recognition are included in current liabilities.
(ii)
Realised and unrealised gains and losses on trading securities
Realised gains and losses on financial assets at fair value through profit or loss and
derivatives are recognised on conclusion of sales contracts. Unrealised gains and losses on
financial assets at fair value through profit or loss and derivatives are recognised on the
basis set out in note 2(h)(ii) and note 2(j) respectively.
(iii)
Interest income
Interest income is recognised on a time proportion basis using the effective interest rate
method.
(iv)
Dividend income
Dividend income is recognised when the right to receive payment is established.
48
APPENDIX 7 – EXTRACT OF NAN FUNG FINANCIAL STATEMENTS
NAN FUNG INTERNATIONAL HOLDINGS LIMITED
(Incorporated in the British Virgin Islands with limited liability)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
2
Summary of significant accounting policies (Continued)
(t)
Revenue and income recognition (Continued)
(v)
Rental income
Rental income is recognised on a straight-line basis over the period of the lease.
(vi)
Hotel revenue
Hotel revenue comprises amounts earned in respect of services, facilities and goods
supplied by the hotel. Hotel revenue is recognised when services are rendered or goods are
delivered.
(vii)
Construction revenue
When the outcome of the construction contract can be estimated reliably:
(viii)
-
revenue from a fixed price contract is recognised using the percentage of
completion method, measured by reference to the percentage of contract costs
incurred to date to estimated total contact costs for the contract; and
-
revenue from a cost plus contract is recognised by reference to the recoverable
costs incurred during the period plus the fee earned, measured by the proportion
that costs incurred to date bear to the estimated total costs for the contract.
Others
Property management income, commission income and management fee income are
recognised when the services are rendered.
(u)
Share capital
Ordinary shares are classified as equity.
(v)
Borrowing costs
Borrowing costs that are directly attributable to the acquisition, construction or production of an
asset that necessarily takes a substantial period of time to get ready for its intended use or sale are
capitalised as part of the cost of that asset.
All other borrowing costs are charged to the consolidated income statement in the year in which
they are incurred.
(w)
Segment reporting
Operating segments are reported in a manner consistent with the internal reporting provided to
the chief operating decision-maker. The chief operating decision-maker, who is responsible for
allocating resources and assessing performance of the operating segments, has been identified as
the Executive Directors that makes strategic decisions.
49
APPENDIX 7 – EXTRACT OF NAN FUNG FINANCIAL STATEMENTS
NAN FUNG INTERNATIONAL HOLDINGS LIMITED
(Incorporated in the British Virgin Islands with limited liability)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
2
Summary of significant accounting policies (Continued)
(x)
Contingent liabilities
A contingent liability is a possible obligation that arises from past events and whose existence will
only be confirmed by the occurrence or non-occurrence of one or more uncertain future events not
wholly within the control of the Group. It can also be a present obligation arising from past events
that is not recognised because it is not probable that outflow of economic resources will be
required or the amount of obligation cannot be measured reliably.
A contingent liability is not recognised but is disclosed in the notes to the financial statements.
When a change in the probability of an outflow occurs so that outflow is probable, it will then be
recognised as a provision.
50
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TOPPAN VITE PTE. LTD. SCR1411029