LAFE CORPORATION LIMITED

Transcription

1 CIRCULAR DATED 19 NOVEMBER 2014 THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION. PLEASE READ IT CAREFULLY. This Circular is issued by Lafe Corporation Limited ( Company ). If you are in any doubt about its contents or the action you should take, you should consult your bank manager, stockbroker, solicitor, accountant or other professional adviser immediately. If you have sold or transferred all your ordinary shares in the Company, please forward this Circular, the Notice of Special General Meeting and the attached Proxy Forms immediately to the purchaser or transferee or to the bank, stockbroker or agent through whom the sale or transfer was effected for onward transmission to the purchaser or transferee. The SGX-ST assumes no responsibility for the contents of this Circular, including the accuracy of any of the statements or opinions made or reports contained in this Circular. LAFE CORPORATION LIMITED (Incorporated in Bermuda on 8 April 1999) (Company Registration No: 26304) CIRCULAR TO SHAREHOLDERS in relation to GRANT OF OPTIONS FOR AND THE PROPOSED SALE OF THE PROPERTIES AT 119 EMERALD HILL ROAD #07-02, #09-02, #10-02 AND #11-02 RESIDENCES AT EMERALD HILL, SINGAPORE TO MDM YU LO SI, ROSY (AN INTERESTED PERSON TRANSACTION UNDER CHAPTER 9 OF THE LISTING MANUAL) IMPORTANT DATES AND TIMES: Last date and time for lodgment of Proxy Form : 3 December 2014 at a.m. Date and time of Special General Meeting : 5 December 2014 at a.m. (or as soon as practicable immediately following the conclusion or adjournment of the Special General Meeting of the Company to be held at a.m. on the same day and at the same place) Place of Special General Meeting : Raffl es Town Club, Dunearn Ballroom 1, Level 1, 1 Plymouth Avenue, Singapore

2 CONTENTS DEFINITIONS... 3 LETTER TO SHAREHOLDERS INTRODUCTION REQUIREMENTS UNDER CHAPTER 9 OF THE LISTING MANUAL DETAILS OF THE INTERESTED PERSON DETAILS OF THE TRANSACTION BASES FOR AND RATIONALE OF THE TRANSACTION DETAILS OF OTHER TRANSACTIONS AGGREGATED PURSUANT TO RULE REQUIREMENT FOR APPROVAL BY SHAREHOLDERS INTEREST OF DIRECTORS AND SUBSTANTIAL SHAREHOLDERS INDEPENDENT PROFESSIONAL VALUATION OPINION FROM THE AUDIT COMMITTEE DIRECTORS OPINION AND RECOMMENDATION SHAREHOLDERS WHO WILL ABSTAIN FROM VOTING DIRECTORS RESPONSIBILITY STATEMENT SPECIAL GENERAL MEETING ACTION TO BE TAKEN BY SHAREHOLDERS CONSENTS DOCUMENTS AVAILABLE FOR INSPECTION APPENDIX NOTICE OF SPECIAL GENERAL MEETING

3 DEFINITIONS In this Circular, the following defi nitions apply throughout unless otherwise stated: AMS : Asia Manufacturing Services Limited associate : a) In relation to any Director, chief executive offi cer, Substantial Shareholder or Controlling Shareholder (being an individual) means: (i) (ii) (iii) his immediate family; the trustees of any trust of which he or his immediate family is a benefi ciary or, in the case of a discretionary trust, is a discretionary object; and any company in which he and his immediate family together (directly or indirectly) have an interest of 30% or more. (b) In relation to a Substantial Shareholder or Controlling Shareholder (being a company) means any company which is its subsidiary or holding company or is a subsidiary of any such holding company or one in the equity of which it and/or such other company or companies taken together (directly or indirectly) have an interest of 30% or more. Caprice : Caprice Group International Limited. CDP : The Central Depository (Pte) Limited. Chapter 9 : Chapter 9 of the Listing Manual. Committee : The Audit Committee of the board of Directors of the Company. Companies Act : The Companies Act (Chapter 50 of Singapore), as amended or modifi ed from time to time. Company : Lafe Corporation Limited. Completion : The completion of the sale and purchase of each Property under the terms of the respective Options. Controlling Shareholder : A person who: (i) (ii) holds directly or indirectly 15% or more of the total number of issued shares excluding treasury shares in the Company. The SGX-ST may determine that a person who satisfi es this paragraph is not a Controlling Shareholder; or in fact exercises control over a company. Development : The residential development project known as Residences at Emerald Hill situated at 119 Emerald Hill Road, Singapore Directors : The directors of the Company from time to time. 3

4 entity at risk : The Company, a subsidiary of the Company that is not listed on the SGX-ST or an approved exchange; or an associated company of the Company that is not listed on the SGX-ST or an approved exchange, provided that the Group, or the Group and its interested person(s), has control over the associated company. FY : Financial year ended or ending 31 December (as the case may be). Group : The Company and its subsidiaries. immediate family : In relation to a person, means the person s spouse, child, adopted child, step-child and parent. Independent Directors : The Directors who do not have any interest in the Transaction, namely Messrs Paul Law Kwok Fai, Kenny Suen Wai Cheung, Shum Sze Keong, Will, Eduard William Rudolf Helmuth and Ricky Sim Eng Huat. Independent Valuer : Knight Frank Pte Ltd. interested person : Director, chief executive offi cer or Controlling Shareholder of the Company, or an associate of any such director, chief executive offi cer or Controlling Shareholder. interested person transaction : A transaction between an entity at risk and an interested person. Latest Practicable Date : 14 November 2014, being the latest practicable date prior to the printing of this Circular. Listing Manual : The listing manual of the SGX-ST, as amended or modifi ed from time to time. Net Sale Price : the net sale price of each of the Properties, more particularly set out in Section 1 and Section of this Circular. NTA : Net tangible assets. Options : The 4 options dated 17 October 2014 relating to the sale of the Properties granted by Lafe (Emerald Hill) Development Pte. Ltd. to Mdm Yu Lo Si, Rosy, and Option shall mean any of them. Option Sale Price : the option sale price in respect of each of the Properties, more particularly set out in Section 1, Section 2.2 and Section of this Circular. Properties : 119 Emerald Hill Road, #07-02, #09-02, #10-02 and #11-02 Residences At Emerald Hill, Singapore , and Property shall mean any of them. Sale Price : the sale price in respect of each of the Properties, more particularly set out in Section 1 and Section of this Circular. Securities Account : The securities accounts maintained with CDP, but not including the securities accounts maintained with a Depository Agent. SGM : The Special General Meeting of the Company to be held on 5 December 2014, notice of which is set out on page 23 of this Circular. 4

5 SGX-ST : Singapore Exchange Securities Trading Limited. Shares : Ordinary shares in the share capital of the Company. Shareholders : Persons who are for the time being registered as holders of Shares in the Register of Members of the Company, except that where the registered holder is CDP, the term Shareholders shall, where the context admits, mean the Depositors whose Securities Accounts are credited with Shares Substantial Shareholder : A person who has an interest or interests in one or more voting shares in the Company representing not less than fi ve (5) per cent. of the total votes attached to all the voting shares in the Company. Transaction : Grant of the Options for and the sale by Lafe (Emerald Hill) Development Pte. Ltd. of the Properties to Mdm Yu Lo Si, Rosy. Unit #03-02 : 119 Emerald Hill Road, #03-02, Residences At Emerald Hill, Singapore Unit #08-02 : 119 Emerald Hill Road, #08-02, Residences At Emerald Hill, Singapore Unit #08-03 : 119 Emerald Hill Road, #08-03, Residences At Emerald Hill, Singapore S$ : Singapore Dollars. US$ : United States Dollars. % : Per centum or percentage. The terms Depositor, Depository Agent and Depository Register have the same meanings ascribed to them in section 130A of the Companies Act. The term subsidiary has the meaning ascribed to it in Section 5 of the Companies Act. Words importing the singular shall, where applicable, include the plural and vice versa, and words importing the masculine gender shall, where applicable, include the feminine and neuter genders and vice versa. Reference to persons shall include corporations. Any reference in this Circular to any Rule or Chapter is a reference to the relevant Rule or Chapter in the Listing Manual as amended, supplemented or modifi ed from time to time. Any reference in this Circular to any Appendix is a reference to an appendix of this Circular. Any reference in this Circular to any statute or enactment is a reference to that statute or enactment as for the time being amended or re-enacted. Any word defi ned under the Companies Act and used in this Circular shall have the same meaning ascribed to it in the Companies Act. Any reference to a time of day in this Circular is a reference to Singapore time unless otherwise stated. For purposes of this Circular, the S$ / US$ exchange rate shall be S$ / US$1.00 5

6 LETTER TO SHAREHOLDERS LAFE CORPORATION LIMITED (Incorporated in Bermuda) (Company Registration Number 26304) Directors: Mr Christopher Ho Wing-On Executive Chairman Mr Paul Law Kwok Fai Executive Director Mr Kenny Suen Wai Cheung Executive Director Mr Will, Eduard William Rudolf Helmuth Independent & Non-Executive Director Mr Shum Sze Keong Independent & Non-Executive Director Mr Ricky Sim Eng Huat Independent & Non-Executive Director Registered Office: #2 Reid Street Hamilton HM 11, Bermuda 19 November 2014 To: The Shareholders of Lafe Corporation Limited Dear Sir/Madam, GRANT OF OPTIONS FOR AND THE PROPOSED SALE OF THE PROPERTIES AT 119 EMERALD HILL ROAD #07-02, #09-02, #10-02 AND #11-02, RESIDENCES AT EMERALD HILL, SINGAPORE TO MDM YU LO SI, ROSY (AN INTERESTED PERSON TRANSACTION UNDER CHAPTER 9 OF THE LISTING MANUAL) 1. INTRODUCTION On 17 October 2014, the Company s subsidiary, Lafe (Emerald Hill) Development Pte. Ltd., granted the Options to Mdm Yu Lo Si, Rosy to sell the Properties to Mdm Yu Lo Si, Rosy. As at the Latest Practicable Date, the Options have not been exercised. The grant of the Options and the sale and purchase pursuant thereto are conditional upon Shareholders approval to be obtained at a special general meeting to be convened by the Company. Mdm Yu Lo Si, Rosy, is the spouse of Mr Christopher Ho Wing-On, a Director. She is an associate of Mr Christopher Ho Wing-On under Chapter 9 of the Listing Manual. Accordingly the Transaction is an interested person transaction under Chapter 9 of the Listing Manual. On 17 October 2014, the Company announced that: (a) (b) its subsidiary, Lafe (Emerald Hill) Development Pte. Ltd. had granted the Options to and was proposing to sell the Properties to Mdm Yu Lo Si, Rosy, the spouse of Mr Christopher Ho Wing-On, a Director, and an interested person defi ned under Chapter 9 of the Listing Manual; the Options were conditional upon the Company obtaining Shareholders approval, and that if such approval was not obtained, the Options and the sale and purchase of the Properties made pursuant thereto would become null and void and all moneys paid would be refunded without interest and neither Lafe (Emerald Hill) Development Pte. Ltd. nor Mdm Yu Lo Si, Rosy would thereafter make any claim or demand against each other; 6

7 (c) (d) both the Audit Committee and the Board had reviewed and approved the Transaction and were satisfi ed that the number and terms of the Transaction were fair and reasonable and were not prejudicial to the interests of the Company and its minority shareholders; and Mr Christopher Ho Wing-On had abstained from the Board review and approval of the Transaction. Details of the prices of the Properties were set out in the announcement and are set out below with further details: Description of Property/ Size (square feet) Option Sale Price (S$) Rebate on Option Sale Price (S$) Rebate on Option Sale Price (%) Sale Price (after Rebate) (S$) Director s discount (S$) Net Sale Price (S$) Net Sale Price per square foot (S$) #07-02/1,658 3,564, , (1) 3,316,000 Nil 3,316,000 2,000 #09-02/1,658 3,564, , (1) 3,316,000 Nil 3,316,000 2,000 #10-02/1,658 3,564, , (1) 3,316,000 Nil 3,316,000 2,000 #11-02/1,658 3,564, , (1) 3,316,000 Nil 3,316,000 2,000 Note: (1) The exact rebate was 6.977% and this percentage was rounded up to 7.0% in the announcement on 17 October 2014 and above. In accordance with Rule 906 and Rule 908, the approval of Shareholders is required for the Transaction under Rule 918 of the Listing Manual. The purpose of this Circular is to explain the reasons for and to provide Shareholders with information relating to the Transaction, the transactions which are required to be aggregated pursuant to Rule 906 (more particularly described in Section 2.4 of this Circular) and to seek Shareholders approval for the Transaction. 2. REQUIREMENTS UNDER CHAPTER 9 OF THE LISTING MANUAL 2.1 DETAILS OF THE INTERESTED PERSON The interested person in the Transaction is Mdm Yu Lo Si, Rosy, the spouse (being an immediate family member and an associate) of Mr Christopher Ho Wing-On, a Director. 2.2 DETAILS OF THE TRANSACTION The salient terms of the Options are as follows: Option in respect of Unit #07-02 Property : 119 Emerald Hill Road, #07-02 Residences At Emerald Hill, Singapore Purchaser : Mdm Yu Lo Si, Rosy (NRIC No. S H), 12 Cuscaden Walk #14-01, Singapore Vendor : Lafe (Emerald Hill) Development Pte. Ltd. (Company Registration Number D), 57 Cantonment Road, Singapore Option Sale Price : S$3,564,700 Option Money : S$35,647 paid by the Purchaser on the grant of the Option. 7

8 Option expiry date : 4 p.m on 5 December The Option will be null and void if not exercised before the said date and time. Deposit : 5% of Option Sale Price less Option Money to be paid on the exercise of the Option. Completion Date : On or before 16 weeks from the date of exercise of the Option. Terms of Sale : Subject to The Singapore Law Society s Conditions of Sale of 1999 insofar as the conditions and the terms of the Option are not contrary to or in confl ict with the Conveyancing & Law of Property (Conveyancing) Rules 2011 and the Singapore Academy of Law (Conveyancing Money) Rules 2011 if applicable. Condition : The Option and the sale and purchase of the Property made pursuant thereto are subject to the approval of Shareholders. If such approval is not obtained, the Option and the sale and purchase of the Property made pursuant thereto shall become null and void and all moneys paid shall be refunded to the Purchaser by the Vendor without interest and neither the Vendor nor the Purchaser shall thereafter have any claim or demand against each other Option in respect of Unit #09-02 Property : 119 Emerald Hill Road, #09-02 Residences At Emerald Hill, Singapore Purchaser : Mdm Yu Lo Si, Rosy (NRIC No. S H), 12 Cuscaden Walk #14-01, Singapore Vendor : Lafe (Emerald Hill) Development Pte. Ltd. (Company Registration Number D), 57 Cantonment Road, Singapore Option Sale Price : S$3,564,700 Option Money : S$35,647 paid by the Purchaser on the grant of the Option. Option expiry date : 4 p.m on 5 December The Option will be null and void if not exercised before the said date and time. Deposit : 5% of Option Sale Price less Option Money to be paid on the exercise of the Option. Completion Date : On or before 29 weeks from the date of exercise of the Option. Terms of Sale : Subject to The Singapore Law Society s Conditions of Sale of 1999 insofar as the conditions and the terms of the Option are not contrary to or in confl ict with the Conveyancing & Law of Property (Conveyancing) Rules 2011 and the Singapore Academy of Law (Conveyancing Money) Rules 2011 if applicable. 8

9 Condition : The Option and the sale and purchase of the Property made pursuant thereto are subject to the approval of Shareholders. If such approval is not obtained, the Option and the sale and purchase of the Property made pursuant thereto shall become null and void and all moneys paid shall be refunded to the Purchaser by the Vendor without interest and neither the Vendor nor the Purchaser shall thereafter have any claim or demand against each other Option in respect of Unit #10-02 Property : 119 Emerald Hill Road, #10-02 Residences At Emerald Hill, Singapore Purchaser : Mdm Yu Lo Si, Rosy (NRIC No. S H), 12 Cuscaden Walk #14-01, Singapore Vendor : Lafe (Emerald Hill) Development Pte. Ltd. (Company Registration Number D), 57 Cantonment Road, Singapore Option Sale Price : S$3,564,700 Option Money : S$35,647 paid by the Purchaser on the grant of the Option. Option expiry date : 4 p.m on 5 December The Option will be null and void if not exercised before the said date and time. Deposit : 5% of Option Sale Price less Option Money to be paid on the exercise of the Option. Completion Date : On or before 42 weeks from the date of exercise of the Option. Terms of Sale : Subject to The Singapore Law Society s Conditions of Sale of 1999 insofar as the conditions and the terms of the Option are not contrary to or in confl ict with the Conveyancing & Law of Property (Conveyancing) Rules 2011 and the Singapore Academy of Law (Conveyancing Money) Rules 2011 if applicable. Condition : The Option and the sale and purchase of the Property made pursuant thereto are subject to the approval of Shareholders. If such approval is not obtained, the Option and the sale and purchase of the Property made pursuant thereto shall become null and void and all moneys paid shall be refunded to the Purchaser by the Vendor without interest and neither the Vendor nor the Purchaser shall thereafter have any claim or demand against each other Option in respect of Unit #11-02 Property : 119 Emerald Hill Road, #11-02 Residences At Emerald Hill, Singapore Purchaser : Mdm Yu Lo Si, Rosy (NRIC No. S H), 12 Cuscaden Walk #14-01, Singapore

10 Vendor : Lafe (Emerald Hill) Development Pte. Ltd. (Company Registration Number D), 57 Cantonment Road, Singapore Option Sale Price : S$3,564,700 Option Money : S$35,647 paid by the Purchaser on the grant of the Option. Option expiry date : 4 p.m on 5 December The Option will be null and void if not exercised before the said date and time. Deposit : 5% of Option Sale Price less Option Money. Completion Date : On or before 54 weeks from the date of exercise of the Option. Terms of Sale : Subject to The Singapore Law Society s Conditions of Sale of 1999 insofar as the conditions and the terms of the Option are not contrary to or in confl ict with the Conveyancing & Law of Property (Conveyancing) Rules 2011 and the Singapore Academy of Law (Conveyancing Money) Rules 2011 if applicable. Condition : The Option and the sale and purchase of the Property made pursuant thereto are subject to the approval of Shareholders. If such approval is not obtained, the Option and the sale and purchase of the Property made pursuant thereto shall become null and void and all moneys paid shall be refunded to the Purchaser by the Vendor without interest and neither the Vendor nor the Purchaser shall thereafter have any claim or demand against each other. 2.3 BASES FOR AND RATIONALE OF THE TRANSACTION Sale Terms The terms of the Transaction were arrived at on a willing buyer - willing seller basis on arms length commercial terms, and on the standard sale terms of Lafe (Emerald Hill) Development Pte. Ltd. except that the Purchaser is given the discretion to stagger the completion date for the sale and purchase of each Property as follows: Property Completion Date (assuming that the Options are exercised on 5 December 2014) Unit #07-02 On or before 27 March Unit #09-02 On or before 26 June Unit #10-02 On or before 25 September Unit #11-02 On or before 18 December The above completion schedule is to accommodate the Purchaser s cash fl ow requirements. The Vendor had agreed to this after taking into consideration the fact that the Purchaser on exercising the Options would be committing to a bulk purchase of 4 units in the Development thereby providing the Vendor with the certainty of a committed cash-fl ow from the Transaction over each of the four quarters of FY

11 2.3.2 Sale Price The Net Sale Price for each Property was derived as follows: S$ S$ per square foot Option Sale Price 3,564,700 2,150 Less rebate of 7% (248,700) (150) Sale Price 3,316,000 2,000 Director s Discount Nil Nil Net Sale Price 3,316,000 2,000 The rebate of 7% is derived with reference to and is slightly less than the rebates granted for the two most recent transactions for the Development prior to the grant of the Options, which were transactions with unrelated third parties in September The rebate took into account the softening of the luxury residential property market in Singapore in FY 2013 and the fi rst three quarters of FY The Net Sale Price and rebate of 7% was based on the Vendor s own assessment of the market value of the Properties at time of the grant of the Options and the price at which the Vendor was willing, on arms length commercial terms, to sell the Properties to an unrelated third party. The quantum of this rebate was referenced to the book value of the Properties as refl ected in the Group s fi nancial statements at the time of the grant of the Options. This book value was based on a market valuation conducted for purposes of preparing the Group s audited fi nancial statements for FY No Director s discount was given to the Purchaser as the price agreed was a competitive market price for a bulk purchase Rationale and benefit of the Transaction The units in the Development were constructed for sale. Accordingly, the Transaction is part of the ordinary and usual course of business of the Group. The Directors are of the view that the Transaction is benefi cial to the Group in that it enables the Group (upon the exercise of the Options) to secure a committed purchaser for the Properties, and to be able to secure cash proceeds from the sale of the Properties in the course of FY These proceeds when received, can be used for the benefi t of the Group s businesses. The net proceeds of the Transaction after legal costs will, in aggregate, amount to approximately S$13,248,000. The Company intends to use the proceeds for the working capital of the Group. The Options, if exercised by the Purchaser on or before 5 December 2014, will also result in substantial savings to the Group of approximately S$438,000 for extension charges which would otherwise be payable to the Land Dealings (Approval) Unit, Controller of Residential Property for the grant of an extension of time to dispose of the unsold units in the Development. As at the Latest Practicable Date, including the Properties, there are a total of 25 unsold units in the Development. If the Options are exercised by the Purchaser on or before 5 December 2014, the number of unsold units in the Development and the extension charges (which are based on the number of unsold units in the Development) will be reduced accordingly. 2.4 DETAILS OF OTHER TRANSACTIONS AGGREGATED PURSUANT TO RULE Value at risk of the aggregated transactions expressed as percentage of the Group s latest consolidated audited NTA The Group has not obtained a general mandate from Shareholders for interested person transactions for FY The Group s latest audited consolidated NTA, being the Group s NTA for FY 2013 is US$ million. 11

12 As at 17 October 2014, the date of Options, the value of the interested person transactions for the Group was as follows: Name of interested person / description of transactions AMS (1) / property development and investment service fees accrued Caprice (2) / interest expense accrued Mdm Yu Lo Si, Rosy / proceeds from disposal of property Unit #03-02 at Emerald Hill Residences on or about 5 June 2014 and rental of Unit #08-02 and Unit #08-03 Aggregate value at risk of the Transaction (3) Aggregate of the value of transactions with AMS, Caprice and Mdm Yu Lo Si, Rosy (excluding the Transaction (3) ) Aggregate of the value of transactions with AMS, Caprice and Mdm Yu Lo Si, Rosy (including the Transaction (3) ) Aggregate value of all transactions (excluding transactions less than S$100,000 and transactions conducted under a shareholders mandate pursuant to Rule 920) ( US$ 000) ( % ) 2, , , , , Aggregate value of all interested person transactions (excluding transactions less than S$100,000 and transactions conducted under a shareholders mandate pursuant to Rule 920) as a percentage of the Group s latest audited consolidated NTA, being the audited consolidated NTA for FY 2013 Notes: (1) AMS is a subsidiary of The Ho Family Trust Ltd, a Controlling Shareholder of the Company. The Ho Family Trust Ltd, a discretionary trust, is an associate of Mr Christopher Ho Wing-On as Mr Christopher Ho Wing-On is one of the discretionary objects of The Ho Family Trust Ltd. Mdm Yu Lo Si, Rosy, is also one of the other discretionary objects of The Ho Family Trust Ltd. (2) Caprice is a subsidiary of The Ho Family Trust Ltd, a Controlling Shareholder of the Company. The Ho Family Trust Ltd, a discretionary trust, is an associate of Mr Christopher Ho Wing-On as Mr Christopher Ho Wing-On is one of the discretionary objects of The Ho Family Trust Ltd. Mdm Yu Lo Si, Rosy, is also one of the other discretionary objects of The Ho Family Trust Ltd. (3) Assuming that the Options were all exercised on 17 October As at the Latest Practicable Date, the Options have not been exercised. 12

13 For purposes of computing the value of interested person transactions with AMS, Caprice and Mdm Yu Lo Si, Rosy, all transactions with such persons for FY 2014 which have accrued, whether or not less than S$100,000, were aggregated for purposes of disclosure, as they were deemed to be a single transaction with AMS, Caprice or Mdm Yu Lo Si, Rosy, as the case may be Provision of services by AMS (a) The salient terms of the services provided by AMS were as follows: Service provider : AMS and/or its designates. Recipient of services : The Group. Description of services : Property development and investment services including human resources, legal, company secretarial, administration as well as general management services in connection therewith. Fees payable : Management fee. Payment terms : Monthly, accruing on the fi rst business day of each month and shall be payable before the end of the month. (b) (c) The terms for the above services were arrived at based on arms length commercial terms no less favourable to the Company than if such services had been provided by an independent third party. The fees payable for the above services from AMS were derived after taking into account the following factors: (i) (ii) (iii) all direct costs incurred by AMS and/or its designates in respect of services provided solely for the benefi t of the Group, including salaries of staff specially assigned to provide services solely to the Group on a full time basis and related staff expenses; a percentage of the aggregate indirect expenses incurred by AMS and/or its designates in respect of common services provided to the Group, calculated based on the number of employees of the Group for which services are provided vis-à-vis the total number of employees of members of AMS and its designates for which the same services are provided; and the proportion of the remuneration of the directors and executives of any member of AMS and/or its designates providing services to the Group and related expenses calculated based on the actual time spent by each such director or executive in managing the affairs of the Group vis-à-vis the total time spent by him/her at work as a director or executive of that member of AMS and/or its designates. (d) The rationale for and benefi t to the Company of the services are as follows: The provision of these services by AMS and its designates allows the Group to tap on the resources and expertise of AMS and provides the Group with fl exibility in determining the degree and level of usage of such services which are made available to the Group depending on its business needs. 13

14 2.4.3 Interest payable to Caprice (a) The salient terms related to the interest paid to Caprice are as follows: Description of underlying obligation Facility amount drawn down as at the Latest Practicable Date Largest amount drawn down on the Facility in FY 2014 : Unsecured loan facility. : US$2,237,650. : As at 31 July 2014, US$2,253,998 was drawn down on the loan facility. Lender : Caprice Borrower : Markwood Capital Limited, a subsidiary of the Company. Interest rate : 5.25% per annum. Interest payment : Accrues on the fi rst business day of each month and shall be payable before the end of the month. Loan repayment : On demand in writing by Caprice. (b) (c) (d) The terms for the above loan were arrived at based on arms length commercial terms no less favourable to the Company than if such loan had been provided by an independent third party. The interest rate for the loan is equal to the prevailing Hong Kong Dollar prime lending rate plus 0.25%. The rationale for and benefi t to the Company of the loan are as follows: The loan facility provides the Group with access to working capital and supplements the other banking facilities available to the Group Sale of Unit #03-02 (a) The salient terms of the option granted in respect of Unit #03-02 of the Development were as follows: Purchaser : Mdm Yu Lo Si, Rosy (NRIC No. S H), 12 Cuscaden Walk #14-01, Singapore Vendor : Lafe (Emerald Hill) Development Pte. Ltd. (Company Registration Number D), 57 Cantonment Road, Singapore Option sale price : S$3,316,000 Option money : S$33,160 Option expiry date : On or before 4 p.m. on 18 June

15 Deposit : 5% of option sale price less option money. Option exercise date : 5 June Completion Date : On or before 11 weeks from the date of exercise of the Option. Terms of Sale : Subject to The Singapore Law Society s Conditions of Sale of 1999 insofar as the conditions and the terms of the Option are not contrary to or in confl ict with the Conveyancing & Law of Property (Conveyancing) Rules 2011 and the Singapore Academy of Law (Conveyancing Money) Rules 2011 if applicable. Size of Unit : 1,658 square feet. (b) (c) The terms of the sale of Unit #03-02 were arrived at on a willing buyer - willing seller basis on arms length commercial terms, and on the standard sale terms of Lafe (Emerald Hill) Development Pte. Ltd (which provided for completion on or before 11 weeks from the date of exercise of the Option). The net sale price in respect of Unit #03-02 was derived as follows: S$ S$ per square foot Option sale price 3,316,000 2,000 Less rebate of 1.09% (36,289) (21.89) Sale price 3,279,711 1, Less Director s discount of 2.5% (81,993) (49.45) Net sale price 3,197,718 1, The Net Sale Price and rebate of 1.09% were based on the Vendor s own assessment of the market value of Unit #03-02 at time of the grant of the option and the price at which the Vendor was willing, on arms length commercial terms, to sell Unit #03-02 to an unrelated third party, and took into account the softening of the luxury residential property market in Singapore over the course of FY 2013 and the fi rst quarter of FY The discount of 2.5% was the rate of discount which the Vendor was willing to provide to the Purchaser after taking into account the relationship between the Purchaser and Mr Christopher Ho Wing-On in his capacity as a Director. (d) The rationale for and benefi t to the Company of the sale of Unit #03-02 were as follows: The units in the Development were constructed for sale. Accordingly, the sale of Unit #03-02 was part of the ordinary and usual course of business of the Group. The Directors were (at the time of the sale of Unit #03-02), of the view that the sale of Unit #03-02 was benefi cial to the Group in that it enabled the Group to realise cash proceeds so as to be able deploy its capital more effi ciently for the benefi t of the Group s business. The net proceeds from the sale of Unit #03-02 after legal costs amounted to approximately S$3,194,000. The Company used the proceeds for the working capital of the Group. Details of the sale of Unit #03-02 were announced by the Company on 3 June

16 2.4.5 Rental of Unit #08-02 and Unit #08-03 from Mdm Yu Lo Si, Rosy (a) the salient terms of the tenancy agreement for Unit #08-02 are as follows: Description of transaction : Tenancy. Landlord : Mdm Yu Lo Si, Rosy (NRIC No. S H), 12 Cuscaden Walk #14-01, Singapore Tenant : Lafe (Emerald Hill) Development Pte. Ltd. Term : 1 year commencing from 23 February Rental : S$10,000 per month. Purpose : Show Flat. Size of Unit : 1,658 square feet. (b) the salient terms of the tenancy agreement for Unit #08-03 are as follows: Description of transaction : Tenancy. Landlord : Mdm Yu Lo Si, Rosy (NRIC No. S H), 12 Cuscaden Walk #14-01, Singapore Tenant : Lafe (Emerald Hill) Development Pte. Ltd. Term : 6 months commencing from 29 March 2014 with an extension to 5 December Rental : S$12,000 per month. Purpose : Show Flat. Size of Unit : 2,282 square feet. (c) (d) The terms for the above tenancies were arrived at based on arms length commercial terms no less favourable to the Company than if the premises had been rented from an independent third party. The rental is supported by a valuation from an independent valuer. The rationale for and benefi t to the Company of the tenancies are as follows: Lafe (Emerald Hill) Development Pte. Ltd. is able to continue to use Unit #08-02 and Unit #08-03 as show fl ats for the Development even after having realised the proceeds from their sale. 16

17 3. REQUIREMENT FOR APPROVAL BY SHAREHOLDERS Under Rule 906 of the Listing Manual, the Company must obtain Shareholder approval for an interested person transaction of a value equal to or more than: (a) (b) 5% of the Group s latest audited NTA; or 5% of the Group s latest audited NTA, when aggregated with other transactions entered into with the same interested person during the same fi nancial year. However a transaction which has been approved by Shareholders, or is the subject of aggregation with another transaction that has been approved by Shareholders, need not be included in any subsequent aggregation. Rule 906 does not apply to any transaction below S$100,000. Under Rule 908 of the Listing Manual, in interpreting the term same interested person for purposes of aggregation in Rule 906, transactions between an entity at risk and interested persons who are members of the same group are deemed to be transactions between the entity at risk with the same person. AMS and Caprice are both subsidiaries of The Ho Family Trust Limited, a Controlling Shareholder of the Company. The Ho Family Trust Ltd is a discretionary trust of which Mr Christopher Ho Wing- On is one of the discretionary objects. Accordingly, The Ho Family Trust Ltd is an associate of Mr Christopher Ho Wing-On. Mdm Yu Lo Si, Rosy, is also one of the other discretionary objects of The Ho Family Trust Ltd. As subsidiaries of The Ho Family Trust Ltd, AMS and Caprice do not have any economic interest in The Ho Family Trust Ltd. Mr Christopher Ho Wing-On and Mdm Yu Lo Si, Rosy, have an economic interest in The Ho Family Trust Ltd solely because they are among the discretionary objects of The Ho Family Trust Ltd. Mr Christopher Ho Wing-On and Mdm Yu Lo Si, Rosy, do not have any management role in or control over The Ho Family Trust Ltd. Assuming that the Options were exercised on 17 October 2014 or will in any event be exercised on or before 5 December 2014: (a) (b) the value of the Transaction is more than 5% of the Group s latest audited NTA under Rule 906(1)(a) of the Listing Manual; and on the basis in Rule 908 that transactions between the Group and interested persons who are members of the same group are deemed to be transactions with the same interested person, the value of interested person transactions with AMS, Caprice and Mdm Yu Lo Si, Rosy (including the Transaction) when aggregated exceeds 5% of the Group s latest audited NTA under Rule 906(1)(b) of the Listing Manual. 4. INTEREST OF DIRECTORS AND SUBSTANTIAL SHAREHOLDERS Save as disclosed in Section 2 and Section 3 of this Circular in respect of Mr Christopher Ho Wing- On, none of the Directors or Substantial Shareholders of the Company have any direct or indirect interest in the Transaction. As at the Latest Practicable Date, the interests of the Directors in the Shares, as extracted from the Register of Directors shareholdings of the Company, and the interests of the Substantial Shareholders in the Shares, as extracted from the Register of Substantial Shareholders of the Company, are as follows: 17

18 Directors Direct Interests Deemed Interests No. of Shares % No. of Shares % Christopher Ho Wing-On (1) 635,548, Paul Law Kwok Fai Kenny Suen Wai Cheung Shum Sze Keong Will, Eduard William Rudolf Helmuth Ricky Sim Eng Huat Substantial Shareholders Christopher Ho Wing-On (1) 635,548, Clarendon Investments Capital Ltd 635,234, Brasilia Capital Limited (2) 635,234, The Ho Family Trust Ltd (3) 635,234, Accolade (PTC) Inc (4) 635,234, CTI Limited 80,543, Notes: (1) Mr Christopher Ho Wing-On is deemed interested in these shares as he is one of the benefi ciaries of a discretionary trust which owns the entire issued capital of Clarendon Investments Capital Ltd that owns directly 635,234,079 ordinary shares in the Company and Barrican Investments Corporation that owns 71.38% of The Grande Holdings Limited (In Liquidation) that in turn owns indirectly 313,996 ordinary shares in the Company. (2) Brasilia Capital Limited is the immediate holding company of Clarendon Investments Capital Ltd. (3) The Ho Family Trust Ltd is the immediate shareholder of Brasilia Capital Limited. (4) Accolade (PTC) Inc is the immediate shareholder of The Ho Family Trust Ltd and is the trustee of The Ho Family Trust. 5. INDEPENDENT PROFESSIONAL VALUATION The Company has appointed Knight Frank Pte Ltd as the independent valuer of the Company to conduct an independent valuation on the Properties, as at 16 October 2014, being the date prior to the grant of the Options. The aggregate market value for the Properties as determined by the Independent Valuer is S$13,260,000 as compared with their aggregate Net Sale Price of S$13,264,000. The valuation certifi cate for the Properties prepared by the Independent Valuer is reproduced in the Appendix to this Circular. 6. OPINION FROM THE AUDIT COMMITTEE As announced on 17 October 2014, in compliance with Rule 912, the Audit Committee (comprising Messrs Will, Eduard William Rudolf Helmuth, Shum Sze Keong and Ricky Sim Eng Huat) had confi rmed that it had reviewed and approved the Transaction and was satisfi ed that the number and terms of the Transaction were fair and reasonable and were not prejudicial to the interests of the Company and its minority shareholders. For purposes of this Circular, the Audit Committee is of the view that the Transaction (and all other transactions which are the subject of aggregation pursuant to Rule 906, namely transactions with namely transactions with AMS, Caprice and Mdm Yu Lo Si, Rosy, more particularly set out in Section 2.4. of this Circular) are on normal commercial terms and are not prejudicial to the interests of the Company and its minority shareholders. 18

19 7. DIRECTORS OPINION AND RECOMMENDATION Save as disclosed in this Circular, there is no other information known to the Company or any of its Directors that is material to Shareholders in deciding whether it is in the interests of the Company to approve the Transaction. As announced on 17 October 2014, the Board (other than Mr Christopher Ho Wing-On) was satisfi ed that the terms of the Transaction were fair and reasonable and were not prejudicial to the interests of the Company and its minority shareholders. For purposes of this Circular, the Board (other than Mr Christopher Ho Wing-On) is satisfi ed that the terms of the Transaction are fair and reasonable and are not prejudicial to the interests of the Company and its minority shareholders. In both instances, Mr Christopher Ho Wing-On, who has an interest in the Transaction abstained from the Board review and approval of the Transaction. Mr Christopher Ho Wing-On who has an interest in the Transaction and the subject matter of the resolution, has abstained from making any recommendation to Shareholders. The Independent Directors of the Company are of the view that the terms of the Transaction are on normal commercial terms and are not prejudicial to the Company and its minority Shareholders. Accordingly, the Independent Directors of the Company recommend that Shareholders vote in favour of the resolution set out in the Notice of SGM, at the SGM. 8. SHAREHOLDERS WHO WILL ABSTAIN FROM VOTING The associates of Mr Christopher Ho Wing-On who are Shareholders (including Clarendon Investments Capital Ltd) will abstain from voting in respect of their shareholdings in the Company at the SGM in relation to the ordinary resolution in the Notice of SGM. Mr Christopher Ho Wing- On and his associates will also decline to accept appointment as proxy for any Shareholder to vote in respect of the resolution, unless the Shareholder concerned shall have given instructions in his proxy form as to the manner in which the votes are to be cast in respect of the ordinary resolution. 9. DIRECTORS RESPONSIBILITY STATEMENT The Directors collectively and individually accept full responsibility for the accuracy of the information given in this Circular and confi rm after making all reasonable enquiries, that to the best of their knowledge and belief, this Circular constitutes full and true disclosure of all material facts about the Transaction (and all other transactions which were the subject of aggregation pursuant to Rule 906, namely transactions with AMS, Caprice and Mdm Yu Lo Si, Rosy, more particularly set out in Section 2.4 of this Circular), the Company and its subsidiaries, and the Directors are not aware of any facts the omission of which would make any statement in this Circular misleading. Where information in this Circular has been extracted from published or otherwise publicly available sources or obtained from a named source, the sole responsibility of the Directors has been to ensure that such information has been accurately and correctly extracted from those sources and/ or reproduced in the Circular in its proper form and context. 10. SPECIAL GENERAL MEETING The SGM, notice of which is set out on page 23 of this Circular, will be held on 5 December 2014 at Raffl es Town Club, Dunearn Ballroom 1, Level 1, 1 Plymouth Avenue, Singapore at a.m.,(or as soon as practicable immediately following the conclusion or adjournment of the Special General Meeting of the Company to be held at a.m. on the same day and at the same place) for the purpose of considering and, if thought fi t, passing with or without modifi cations, the ordinary resolution set out in the Notice of SGM on page 23 of this Circular. 11. ACTION TO BE TAKEN BY SHAREHOLDERS Shareholders who are unable to attend the SGM and wish to appoint a proxy to attend and vote at the SGM on their behalf will fi nd attached to this Circular the Shareholder Proxy Form which they are requested to complete, sign and return in accordance with the instructions printed thereon as soon as possible and in any event so as to arrive at the offi ce of the Company s Singapore Share Transfer Agent, M&C Services Private Limited at 112 Robinson Road #05-01, Singapore , 19

20 not less than 48 hours before the time fi xed for the SGM. Completion and return of the Shareholder Proxy Form by a Shareholder will not prevent him from attending and voting in person at the SGM if he so wishes. A Depositor shall not be regarded as a member of the Company entitled to attend the SGM to speak and vote thereat. Depositors who wish to attend and vote at the SGM and whose names are shown in the records of CDP not less than 48 hours prior to the commencement of the SGM may attend as the CDP s proxies. Depositors who are individuals and who wish to attend the SGM in person need not take any further action and can attend and vote at the SGM without the lodgment of any proxy form. Individual Depositors and Depositors who are not individuals who are unable to attend the SGM personally and wish to appoint their nominee(s) to attend and vote on their behalf, may complete, sign and return the Depositor Proxy Form enclosed in accordance with the instructions printed thereon as soon as possible and in any event, so as to reach the offi ce of the Company s Singapore Share Transfer Agent, M&C Services Private Limited at 112 Robinson Road #05-01, Singapore , not less than 48 hours before the time fi xed for the SGM. This appointment of a nominee or nominees by a Depositor (who is an individual) will not preclude him from attending and voting in person at the SGM, if he so wishes, but in the event of attendance by such Depositor, the Depositor Proxy Form appointing his nominees will be deemed to be revoked. 12. CONSENTS The Independent Valuer, Knight Frank Pte Ltd, has given and has not withdrawn its written consent to the issue of this Circular with the inclusion herein of its name, the valuation certifi cate dated 16 October 2014 attached hereto in the Appendix and all references thereto in the form and context in which they appear in this Circular. 13. DOCUMENTS AVAILABLE FOR INSPECTION Copies of the following documents may be inspected at the Corporate Offi ce of the Company in Singapore at 57 Cantonment Road, Singapore , during normal business hours from the date of this Circular up to and including the date of the SGM: (a) the Memorandum of Association and Bye-laws of the Company; (b) the Company s Annual Report 2013; (c) (d) the valuation report dated 16 October 2014 prepared by the Independent Valuer in respect of the Properties; the Options; (e) the option dated 4 June 2014 granted in respect of Unit #03-02; (f) (g) (h) (i) Caprice Term Sheet in relation to the loan facility; AMS Term Sheet in relation to property development and investment services; the Tenancy Agreements in respect of Unit #08-02 and Unit #08-0 3; and the valuation report dated 16 October 2014 prepared by the Independent Valuer in respect of the tenancies for Unit #08-02 and Unit # Yours faithfully Christopher Ho Wing-On Executive Chairman LAFE CORPORATION LIMITED 20

21 APPENDIX VALUATION CERTIFICATE 21

22 22

23 LAFE CORPORATION LIMITED (Company Registration No ) (Incorporated in Bermuda on 8 April 1999) NOTICE OF SPECIAL GENERAL MEETING NOTICE IS HEREBY GIVEN that a Special General Meeting of Lafe Corporation Limited (the Company ) will be held on 5 December 2014 at a.m. (or as soon as practicable immediately following the conclusion or adjournment of the Special General Meeting of the Company to be held at a.m. on the same day and at the same place) at Raffl es Town Club, Dunearn Ballroom 1, Level 1, 1 Plymouth Avenue, Singapore , for the purpose of considering and, if thought fi t, passing (with or without modifi cation) the following Ordinary Resolution: ORDINARY RESOLUTION THAT: (a) the grant of the Options for and the proposed sale of the Properties at 119 Emerald Hill Road, #07-02, #09-02, #10-02 and #11-02, Residences at Emerald Hill, Singapore to Mdm Yu Lo Si, Rosy, be and are hereby approved; and (b) the Directors of the Company and each of them (except Mr Christopher Ho Wing-On) be and is/are hereby authorised and empowered to complete and to do all such acts and things, and to approve, amend, modify, supplement and execute such documents, as they may consider necessary or expedient in connection with any of the aforesaid transactions or to give effect to any of the aforesaid transactions, and generally to do all such things as he deems necessary or expedient for all the foregoing purposes. All capitalised terms in the Ordinary Resolution shall, unless otherwise defi ned in this Notice, have the same meaning as in the Circular to Shareholders dated 19 November BY ORDER OF THE BOARD Paul Francis Gregory Binney Company Secretary 19 November 2014 Notes: 1. A Shareholder entitled to attend and vote at the SGM is entitled to appoint a proxy to attend and vote in his stead. A proxy need not be a member of the Company. 2. If a Shareholder is unable to attend the SGM and wishes to appoint a proxy to attend and vote at the SGM in his stead, then he should complete and sign the relevant Shareholder Proxy Form and deposit the duly completed Shareholder Proxy Form at the offi ce of the Company s Singapore Share Transfer Agent, M&C Services Private Limited at 112 Robinson Road, #05-01, Singapore , not later than 48 hours before the time appointed for the SGM. 3. A Depositor whose name is shown in the Depository Register of The Central Depository (Pte) Limited ( CDP ) as at a time not earlier than 48 hours prior to the time of the SGM who/which is (i) an individual but is unable to attend the SGM personally and wishes to appoint a nominee to attend and vote; or (ii) a corporation, must complete, sign and return the Depositor Proxy Form and deposit the duly completed Depositor Proxy Form at the offi ce of the Company s Singapore Share Transfer Agent, M&C Services Private Limited at 112 Robinson Road, #05-01, Singapore , not later than 48 hours before the time appointed for the SGM. 4. If a Shareholder who has Shares entered against his name in the Depository Register and Shares registered in his name in the Register of Members of the Company is unable to attend the SGM and wishes to appoint a proxy, he should use the Depositor Proxy Form and the Shareholder Proxy Form for, respectively, the Shares entered against his name in the Depository Register and the Shares registered in his name in the Register of Members of the Company. 5. A Depositor who is an individual and whose name is shown in the Depository Register as at a time not earlier than 48 hours prior to the time of the SGM and who wishes to attend the SGM in person need not take any further action and can attend and vote at the SGM as CDP s proxy without the lodgment of any proxy form. 23