COLLINS STEWART PTE. LIMITED (Incorporated in the Republic of Singapore) (Company Registration No D)

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Q & M DENTAL GROUP (SINGAPORE) LIMITED (Incorporated in the Republic of Singapore on 7 January 2008) (Unique Entity Number 200800507R) Placement of

PROSPECTUS DATED 17 November 2009 (Registered by the Monetary Authority of Singapore on 17 November 2009) This document is important.

We have made an application to the Singapore Exchange Securities Trading Limited (the SGX-ST ) for permission to deal in, and for quotation of, all the

) which are the subject of this Placement (as defined herein).

The dealing in, and quotation of, our Shares and the New Shares will be in Singapore dollars.

SGX-ST to deal in, and for quotation of, all of our existing issued Shares and the New Shares.

accepted will be returned to you, subject to applicable laws, at your own risk, without interest or any share of revenue or other benefit arising

The SGX-ST assumes no responsibility for the correctness of any of the statements made, reports contained or opinions expressed in this Prospectus.

Shares or the New Shares. A copy of this Prospectus has been lodged with and registered by the Monetary Authority of Singapore (the Authority ).

Registration of this Prospectus by the Authority does not imply that the Securities and Futures Act (Chapter 289) of Singapore, or any other legal or

1 Q & M DENTAL GROUP (SINGAPORE) LIMITED (Incorporated in the Republic of Singapore on 7 January 2008) (Unique Entity Number R) Placement of 74,075,000 New Shares at $0.27 for each Share, payable in full on application. PROSPECTUS DATED 17 November 2009 (Registered by the Monetary Authority of Singapore on 17 November 2009) This document is important. If you are in any doubt as to the action you should take, you should consult your legal, financial, tax, or other professional adviser. We have made an application to the Singapore Exchange Securities Trading Limited (the SGX-ST ) for permission to deal in, and for quotation of, all the ordinary shares (the Shares ) in the capital of Q & M Dental Group (Singapore) Limited (the Company ) already issued and the new Shares (the New Shares ) which are the subject of this Placement (as defined herein). Such permission will be granted when our Company has been admitted to the Official List of the SGX-ST. The dealing in, and quotation of, our Shares and the New Shares will be in Singapore dollars. Acceptance of applications for the New Shares will be conditional upon, inter alia, the issue of the New Shares and permission being granted by the SGX-ST to deal in, and for quotation of, all of our existing issued Shares and the New Shares. If completion of the Placement does not occur because the SGX-ST s permission is not granted for any reason, monies paid in respect of any application accepted will be returned to you, subject to applicable laws, at your own risk, without interest or any share of revenue or other benefit arising therefrom and you will not have any claims against us, the Manager or the Placement Agent (as defined herein). The SGX-ST assumes no responsibility for the correctness of any of the statements made, reports contained or opinions expressed in this Prospectus. Admission to the Official List of the SGX-ST is not to be taken as an indication of the merits of the Placement, our Company, our subsidiaries, our Shares or the New Shares. A copy of this Prospectus has been lodged with and registered by the Monetary Authority of Singapore (the Authority ). The Authority assumes no responsibility for the contents of this Prospectus. Registration of this Prospectus by the Authority does not imply that the Securities and Futures Act (Chapter 289) of Singapore, or any other legal or regulatory requirements, have been complied with. The Authority has not, in any way, considered the merits of our Shares or the New Shares, as the case may be, being offered for investment. We have not lodged or registered this Prospectus in any other jurisdiction. No Shares will be allotted on the basis of this Prospectus later than six months after the date of registration of this Prospectus by the Authority. Investing in our Shares involves risks which are described in the RISK FACTORS section of this Prospectus. Manager and Placement Agent COLLINS STEWART PTE. LIMITED (Incorporated in the Republic of Singapore) (Company Registration No D)

2 Singapore s largest private dental healthcare group About Us We are Singapore s largest private dental healthcare group with 36 dental clinics which are strategically located island-wide, representing a market share (in terms of number of dental clinics in Singapore) of approximately 5.7%*, and a mobile dental clinic. Our proven 12-year track record is evidenced by our large patient pool, having treated more than 300,000 patients in Singapore between December 2005 and the Latest Practicable Date. With comprehensive quality services, competitive pricing and reliability, we have successfully built our reputation as an established and reliable dental healthcare service provider in Singapore. As at the Latest Practicable Date, we have 105 qualified and experienced dentists, nine oral health therapists, 302 dental surgery assistants, eight laboratory support staff and 21 finance, administrative and marketing personnel. We also have a dental laboratory which fabricates dental prosthesis such as crowns, bridges, dentures and retainers. *Based on a total of 632 registered private dental clinics in Singapore in 2008 as extracted from the SDC Annual Report 2008.

Singapore s largest private dental healthcare group Our Island-Wide Presence 36 dental clinics strategically located near amenities like bus interchanges and MRT stations Q&M Dental Clinics Sembawang

Town Aljunied Bukit Timah Tiong Bahru Our Comprehensive Dental Healthcare Services Service Description General Dental Treatment Endodontics Deals with the tooth pulp and tissues surrounding the root

dental pain Orthodontics Treatment of dento-facial irregularities or malocclusions (improper bites) Services: treatment involves fixed and/or removable braces Periodontics Diagnosis, prevention and

teeth and soft tissue, with an emphasis on restoring natural function and appearance Services: inlays, onlays, veneers, crowns, bridges, dentures, implant restorations, oral rehabilitation and

3 Singapore s largest private dental healthcare group Our Island-Wide Presence 36 dental clinics strategically located near amenities like bus interchanges and MRT stations Q&M Dental Clinics Sembawang New Town Woodlands New Town Yishun New Town Bukit Panjang Mobile Dental Clinic ( MDC ) Hougang New Town Ang Mo Kio New Town Bukit Batok New Town Jurong East New Town Upper Bukit Timah Tampines New Town Aljunied Bukit Timah Tiong Bahru Our Comprehensive Dental Healthcare Services Service Description General Dental Treatment Endodontics Deals with the tooth pulp and tissues surrounding the root end of a tooth Services: pulp capping, root canal treatment or retreatment, endodontic surgery, bleaching of discoloured nonvital teeth, treating traumatic tooth injuries and diagnosing and treating dental pain Orthodontics Treatment of dento-facial irregularities or malocclusions (improper bites) Services: treatment involves fixed and/or removable braces Periodontics Diagnosis, prevention and control of periodontal or gum diseases Services: supervised oral hygiene methods, non surgical and surgical scaling, and root planing Prosthodontics Restores tooth structure and replaces missing teeth and soft tissue, with an emphasis on restoring natural function and appearance Services: inlays, onlays, veneers, crowns, bridges, dentures, implant restorations, oral rehabilitation and managing parafunctional anomalies, such as bruxism (grinding of teeth), temporo-mandibular joint disorder (pain and inflammation affecting the jaw joint and associated muscles), snoring and obstructive sleep apnea Services: examination and diagnosis, treatment planning, scaling, polishing, fluoride treatment, fillings and extractions, treatments for dentine hypersensitivity and patient education All clinics are equipped with dental X-ray facilities, some with OPG and lateral cephalometric X-rays Paedodontics Deals with the provision of oral healthcare services to children aged one to 17 years Services: prescription of a comprehensive and personalised oral healthcare programme with both restorative and preventive components with emphasis on prevention and early interception of oral diseases, and trauma and emergency treatment Oral Surgery Diagnosis and management of diseases, injuries, and defects of the human mouth, jaw and associated facial structures Services: dentoalveolar and wisdom tooth surgeries, dental implants, sinus-lift procedure, bone grafting and adjunct surgery Dentists at our MDC perform simple procedures such as scaling, polishing and fillings As part of our corporate social responsibility initiatives, the MDC also provides free dental check-ups for students of junior colleges, polytechnics and universities as well as the underprivileged Changi Airport Toa Payoh Kallang Clementi New Town Commissioned in September 2008 to provide on-site dental healthcare services at diverse locations around Singapore Pasir Ris Serangoon Jurong West New Town Dental Implants Titanium fixtures placed in bone to replace the root of a missing tooth Restores appearance, function and speech and can eliminate discomforts associated with wearing dentures Aesthetic Dentistry Concerned with the appearance of a dental restoration as achieved through its form and colour Services: dentures, orthodontics, crowns and bridges, implants, bonding, veneers and teeth whitening Competitive Strengths Experienced and proven management team CEO, Dr Ng Chin Siau, has more than 17 years of industry experience in the dental healthcare industry Deputy CEO, Dr Ng Jet Wei and COO, Dr Ang Ee Peng Raymond, have more than 14 years and 15 years of industry experience, respectively Qualified and experienced dentists and oral health therapists Team of 105 qualified and experienced dentists and nine oral health therapists, supported by 302 well-trained dental surgery assistants 30 of our dentists have post-graduate training in the fields of endodontics, orthodontics, periodontics, prosthodontics, paedodontics, oral surgery and implant dentistry Goodwill of the Q&M brand, which we have built since our inception in 1996, has enabled us to attract and retain experienced and talented dentists to join our Group 18 Principal Shareholders, all of whom are dentists in our Group, have entered into 10-year service contracts commencing from January 2008 Well established presence at strategic locations island-wide in Singapore With more than 12 years of establishment, we believe that we are the largest private dental healthcare service provider in Singapore 36 dental clinics strategically and conveniently located near amenities like bus interchanges and MRT stations represent a market share (in terms of number of dental clinics in Singapore) of approximately 5.7%* Our Q&M brand is associated with comprehensive quality dental healthcare services Reputable and proven track record of having treated more than 300,000 patients island-wide in Singapore between December 2005 and the Latest Practicable Date Q&M brand enjoys significant goodwill with our patients, who are likely to have greater confidence in a larger dental healthcare group with multi-disciplinary expertise to deal with a wide spectrum of dental health problems *Based on a total of 632 registered private dental clinics in Singapore in 2008 as extracted from the SDC Annual Report 2008.

4 Singapore s largest private dental healthcare group Our Island-Wide Presence 36 dental clinics strategically located near amenities like bus interchanges and MRT stations Q&M Dental Clinics Sembawang New Town Woodlands New Town Yishun New Town Bukit Panjang Mobile Dental Clinic ( MDC ) Hougang New Town Ang Mo Kio New Town Bukit Batok New Town Jurong East New Town Upper Bukit Timah Tampines New Town Aljunied Bukit Timah Tiong Bahru Our Comprehensive Dental Healthcare Services Service Description General Dental Treatment Endodontics Deals with the tooth pulp and tissues surrounding the root end of a tooth Services: pulp capping, root canal treatment or retreatment, endodontic surgery, bleaching of discoloured nonvital teeth, treating traumatic tooth injuries and diagnosing and treating dental pain Orthodontics Treatment of dento-facial irregularities or malocclusions (improper bites) Services: treatment involves fixed and/or removable braces Periodontics Diagnosis, prevention and control of periodontal or gum diseases Services: supervised oral hygiene methods, non surgical and surgical scaling, and root planing Prosthodontics Restores tooth structure and replaces missing teeth and soft tissue, with an emphasis on restoring natural function and appearance Services: inlays, onlays, veneers, crowns, bridges, dentures, implant restorations, oral rehabilitation and managing parafunctional anomalies, such as bruxism (grinding of teeth), temporo-mandibular joint disorder (pain and inflammation affecting the jaw joint and associated muscles), snoring and obstructive sleep apnea Services: examination and diagnosis, treatment planning, scaling, polishing, fluoride treatment, fillings and extractions, treatments for dentine hypersensitivity and patient education All clinics are equipped with dental X-ray facilities, some with OPG and lateral cephalometric X-rays Paedodontics Deals with the provision of oral healthcare services to children aged one to 17 years Services: prescription of a comprehensive and personalised oral healthcare programme with both restorative and preventive components with emphasis on prevention and early interception of oral diseases, and trauma and emergency treatment Oral Surgery Diagnosis and management of diseases, injuries, and defects of the human mouth, jaw and associated facial structures Services: dentoalveolar and wisdom tooth surgeries, dental implants, sinus-lift procedure, bone grafting and adjunct surgery Dentists at our MDC perform simple procedures such as scaling, polishing and fillings As part of our corporate social responsibility initiatives, the MDC also provides free dental check-ups for students of junior colleges, polytechnics and universities as well as the underprivileged Changi Airport Toa Payoh Kallang Clementi New Town Commissioned in September 2008 to provide on-site dental healthcare services at diverse locations around Singapore Pasir Ris Serangoon Jurong West New Town Dental Implants Titanium fixtures placed in bone to replace the root of a missing tooth Restores appearance, function and speech and can eliminate discomforts associated with wearing dentures Aesthetic Dentistry Concerned with the appearance of a dental restoration as achieved through its form and colour Services: dentures, orthodontics, crowns and bridges, implants, bonding, veneers and teeth whitening Competitive Strengths Experienced and proven management team CEO, Dr Ng Chin Siau, has more than 17 years of industry experience in the dental healthcare industry Deputy CEO, Dr Ng Jet Wei and COO, Dr Ang Ee Peng Raymond, have more than 14 years and 15 years of industry experience, respectively Qualified and experienced dentists and oral health therapists Team of 105 qualified and experienced dentists and nine oral health therapists, supported by 302 well-trained dental surgery assistants 30 of our dentists have post-graduate training in the fields of endodontics, orthodontics, periodontics, prosthodontics, paedodontics, oral surgery and implant dentistry Goodwill of the Q&M brand, which we have built since our inception in 1996, has enabled us to attract and retain experienced and talented dentists to join our Group 18 Principal Shareholders, all of whom are dentists in our Group, have entered into 10-year service contracts commencing from January 2008 Well established presence at strategic locations island-wide in Singapore With more than 12 years of establishment, we believe that we are the largest private dental healthcare service provider in Singapore 36 dental clinics strategically and conveniently located near amenities like bus interchanges and MRT stations represent a market share (in terms of number of dental clinics in Singapore) of approximately 5.7%* Our Q&M brand is associated with comprehensive quality dental healthcare services Reputable and proven track record of having treated more than 300,000 patients island-wide in Singapore between December 2005 and the Latest Practicable Date Q&M brand enjoys significant goodwill with our patients, who are likely to have greater confidence in a larger dental healthcare group with multi-disciplinary expertise to deal with a wide spectrum of dental health problems *Based on a total of 632 registered private dental clinics in Singapore in 2008 as extracted from the SDC Annual Report 2008.

Prospects Rising affluence promotes greater awareness of dental health in Singapore Reputation of Singapore as a medical hub would augment the dental healthcare industry Potential of the PRC market

existing dental clinics to ensure optimal utilisation of space Acquire additional dental equipment such as dental chairs and OPG facilities Expanding into dental products and equipment distribution

those in overseas markets Enjoy greater cost benefits and generate additional revenue through this new business Establishment of a dental centre in Singapore Provide multi-disciplinary dental

5 Prospects Rising affluence promotes greater awareness of dental health in Singapore Reputation of Singapore as a medical hub would augment the dental healthcare industry Potential of the PRC market for quality dental healthcare services Business Strategies and Future Plans Expansion of our network of dental clinics and upgrading of existing facilities in Singapore Expand and/or renovate existing dental clinics to ensure optimal utilisation of space Acquire additional dental equipment such as dental chairs and OPG facilities Expanding into dental products and equipment distribution business Source for dental products and equipment mainly from overseas (including Europe, PRC and USA) to distribute to our dental clinics, third party dental clinics and other suppliers, including those in overseas markets Enjoy greater cost benefits and generate additional revenue through this new business Establishment of a dental centre in Singapore Provide multi-disciplinary dental healthcare services with emphasis in specialist dental healthcare services at a single location that is equipped with the latest technology available in the market Entered into a lease agreement commencing 17 December 2009 to lease a premise at City Square Mall for the establishment of our dental centre Expect our dental centre to commence operations by the first quarter of 2010 Expanding our dental practice into the PRC Significant potential for our dental healthcare services in the PRC due to the rising affluence, resulting in greater demand for better quality dental healthcare services Expansion through acquisitions, joint ventures and/or strategic alliances Strengthen our market position by expanding our network of dental clinics as well as expanding into new businesses complementary to our business

6 number of dental clinics and staff strength number of dental clinics/ staff strength number of dental clinics staff strength dividend PaYout our directors intend to recommend and distribute dividends as follows:- (a) for FY2009, not less than 50% of our net profit attributable to shareholders earned for the period from 1 July 2009 to 31 december 2009; and (b) for FY2010, not less than 50% of our net profit attributable to shareholders earned in that financial year, subject to the factors outlined in the dividend Policy section of this Prospectus. Financial HigHligHts (Year ended 31 december) revenue latest Practicable date 30,000 29,601 25,000 24,368 26,443 20,000 15,000 13,897 14,033 10,000 5,000 0 FY2006 FY2007 FY2008 HY2008 HY2009 audited unaudited Profit before tax from continuing operations ( PBt ) and profit attributable to equity holders of parent, net of tax ( Pat ) 5,000 4,767 4,000 3,960 3,641 4,237 4,061 4,392 3,000 Pat 2,000 1,983 1,790 2,122 1,946 PBt 1,000 0 FY2006 FY2007 FY2008 HY2008 HY2009 audited adjusted* unaudited *For illustrative purposes, adjusted to exclude the professional fees and expenses in relation to the Placement amounting to approximately S$649,000 incurred in FY2008

7 CONTENTS CORPORATE INFORMATION... 4 DEFINITIONS... 5 GLOSSARY OF TECHNICAL TERMS SELLING RESTRICTIONS CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS DETAILS OF THE PLACEMENT LISTING ON THE SGX-ST INDICATIVE TIMETABLE FOR LISTING PROSPECTUS SUMMARY OVERVIEW OF OUR GROUP SUMMARY OF OUR FINANCIAL INFORMATION THE PLACEMENT PLAN OF DISTRIBUTION USE OF PROCEEDS FROM THE PLACEMENT AND EXPENSES INCURRED MANAGEMENT AND PLACEMENT ARRANGEMENTS RISK FACTORS ISSUE STATISTICS DILUTION CAPITALISATION AND INDEBTEDNESS DIVIDEND POLICY SELECTED COMBINED FINANCIAL INFORMATION MANAGEMENT S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION OVERVIEW SEASONALITY INFLATION REVIEW OF RESULTS OF OPERATIONS REVIEW OF FINANCIAL POSITION LIQUIDITY AND CAPITAL RESOURCES CAPITAL EXPENDITURES, DIVESTMENTS, COMMITMENTS AND CONTINGENT LIABILITIES FOREIGN EXCHANGE MANAGEMENT

8 CONTENTS GENERAL INFORMATION ON OUR GROUP SHARE CAPITAL RESTRUCTURING EXERCISE GROUP STRUCTURE SUBSIDIARIES SHAREHOLDERS MORATORIUM HISTORY BUSINESS BUSINESS OVERVIEW SERVICE QUALITY CONTROL MARKETING AND BUSINESS DEVELOPMENT MAJOR CUSTOMERS MAJOR SUPPLIERS INVENTORY MANAGEMENT CREDIT MANAGEMENT RESEARCH AND DEVELOPMENT STAFF TRAINING INTELLECTUAL PROPERTY PROPERTIES AND FIXED ASSETS INSURANCE COVERAGE COMPETITION COMPETITIVE STRENGTHS PROSPECTS, BUSINESS STRATEGIES AND FUTURE PLANS PROSPECTS TREND INFORMATION BUSINESS STRATEGIES AND FUTURE PLANS GOVERNMENT REGULATIONS EXCHANGE CONTROLS INTERESTED PERSON TRANSACTIONS PAST TRANSACTIONS PRESENT AND ON-GOING TRANSACTIONS REVIEW PROCEDURES FOR FUTURE INTERESTED PERSON TRANSACTIONS POTENTIAL CONFLICTS OF INTERESTS

9 CONTENTS DIRECTORS, EXECUTIVE OFFICERS AND STAFF DIRECTORS EXECUTIVE OFFICERS MANAGEMENT REPORTING STRUCTURE STAFF REMUNERATION OF DIRECTORS, EXECUTIVE OFFICERS AND RELATED EMPLOYEES SERVICE AGREEMENTS CORPORATE GOVERNANCE CLEARANCE AND SETTLEMENT GENERAL AND STATUTORY INFORMATION APPENDIX A INDEPENDENT AUDITORS REPORT ON THE AUDITED COMBINED FINANCIAL STATEMENTS OF Q & M DENTAL GROUP (SINGAPORE) LIMITED A-1 APPENDIX B INDEPENDENT AUDITORS REVIEW REPORT ON THE UNAUDITED COMBINED INTERIM FINANCIAL STATEMENTS OF Q & M DENTAL GROUP (SINGAPORE) LIMITED... B-1 APPENDIX C TAXATION... C-1 APPENDIX D DESCRIPTION OF OUR SHARES... D-1 APPENDIX E SUMMARY OF MEMORANDUM AND ARTICLES OF ASSOCIATION OF OUR COMPANY... E-1 APPENDIX F TERMS, CONDITIONS AND PROCEDURES FOR APPLICATIONS... F-1 3

10 CORPORATE INFORMATION BOARD OF DIRECTORS : Narayanan Sreenivasan (Non-Executive Chairman) Dr Ng Chin Siau (Chief Executive Officer) Dr Ng Jet Wei (Deputy Chief Executive Officer) Dr Ang Ee Peng Raymond (Chief Operating Officer) Dr Chong Kai Chuan (Alternate Director to Dr Ng Chin Siau) Wong Hin Sun Eugene (Independent Director) Ng Weng Sui Harry (Independent Director) COMPANY SECRETARIES : Huang Jian, CPA (Singapore) Toon Choi Fan REGISTERED OFFICE : 67 Ayer Rajah Crescent #05-12/14 Ayer Rajah Industrial Estate Singapore SHARE REGISTRAR AND SHARE TRANSFER OFFICE : Tricor Barbinder Share Registration Services (A division of Tricor Singapore Pte. Ltd.) 8 Cross Street #11-00 PWC Building Singapore MANAGER AND PLACEMENT AGENT : Collins Stewart Pte. Limited 77 Robinson Road #21-02 Singapore AUDITORS AND REPORTING ACCOUNTANTS : RSM Chio Lim LLP 8 Wilkie Road #04-08 Wilkie Edge Singapore SOLICITORS TO THE PLACEMENT : Straits Law Practice LLC 36 Robinson Road 18 th Floor City House Singapore Partner-in-charge: Paul Lee Seng Meng (A member of the Institute of Certified Public Accountants of Singapore) RECEIVING BANKER : The Bank of East Asia, Limited BEA Building 60 Robinson Road Singapore PRINCIPAL BANKERS : United Overseas Bank Limited 80 Raffles Place UOB Plaza Singapore Oversea-Chinese Banking Corporation Limited 65 Chulia Street #29-02/04 OCBC Centre Singapore

11 DEFINITIONS In this Prospectus and the accompanying Application Forms, unless the context otherwise requires, the following definitions apply throughout where the context so admits:- Companies within our Group Company or Q&M : Q & M Dental Group (Singapore) Limited Group : Our Company and our subsidiaries, treated for the purpose of this Prospectus as if our group structure had been in existence since 1 January 2006 Q&M Admiralty : Q & M Dental Surgery (Admiralty) Pte. Ltd. Q&M Ang Mo Kio : Q & M Dental Surgery (Ang Mo Kio Central) Pte. Ltd. Q&M Boon Lay 1 : Q & M Dental Surgery (Boon Lay) Pte. Ltd. Q&M Boon Lay 2 : Q & M Dental Surgery (Boon Lay MRT) Pte. Ltd. Q&M Braddell : Q & M Dental Surgery (Braddell) Pte. Ltd. Q&M Bukit Batok 1 : Q & M Dental Surgery (Bukit Batok) Pte. Ltd. Q&M Bukit Batok 2 : Q & M Dental Clinic Pte. Ltd. Q&M Bukit Panjang : Q & M Dental Surgery (Bukit Panjang) Pte. Ltd. Q&M Bukit Timah : Q & M Dental Surgery (Bukit Timah) Pte. Ltd. Q&M Clementi 1 : Q & M Dental Surgery (Clementi Central) Pte. Ltd. Q&M Clementi 2 : Q & M Dental Surgery (Clementi) Pte. Ltd. Q&M Clementi 3 : Q & M Dental Clinic (Clementi) Pte. Ltd. Q&M Dental Centre : Q & M Dental Centre Pte. Ltd. Q&M Dental Group (China) : Q & M Dental Group (China) Pte. Ltd. Q&M Dental Institute : Q & M Dental Institute Pte. Ltd. Q&M Elias Mall : Q & M Dental Surgery (Elias Mall) Pte. Ltd. Q&M Gombak 1 : Q & M Dental Clinic (Gombak) Pte. Ltd. Q&M Gombak 2 : Q & M Dental Surgery (Gombak) Pte. Ltd. Q&M Gombak MRT : Q & M Dental Surgery (Gombak MRT) Pte. Ltd. Q&M Hougang 1 : Q & M Dental Surgery (Hougang Mall) Pte. Ltd. Q&M Hougang 2 : Q & M Dental Surgery (Hougang Central) Pte. Ltd. Q&M Hougang 3 : Q & M Dental Surgery (Hougang Plaza) Pte. Ltd. Q&M Jelapang : Q & M Dental Surgery (Jelapang) Pte. Ltd. Q&M Jurong : Q & M Dental Surgery (Jurong East Central) Pte. Ltd. Q&M Kallang : Q & M Dental Surgery (Kallang MRT) Pte. Ltd. 5

12 DEFINITIONS Q&M Khatib : Q & M Dental Surgery (Khatib) Pte. Ltd. Q&M Killiney : Killiney Dental Centre Pte. Ltd. Q&M Lab : Q & M Laboratory & Marketing Pte. Ltd. Q&M Marsiling : Q & M Dental Surgery (Marsiling) Pte. Ltd. Q&M Mgt : Q & M Management & Consultancy Pte. Ltd. Q&M Mobile Dental Clinic : Q & M Mobile Dental Clinic Pte. Ltd. Q&M Old Airport Rd : Q & M Dental Surgery (Old Airport Rd) Pte. Ltd. Q&M Pasir Ris : Q & M Dental Surgery (Pasir Ris) Pte. Ltd. Q&M Sembawang 1 : Q & M Dental Surgery (Sembawang) Pte. Ltd. Q&M Sembawang 2 : Q & M Dental Surgery (Sembawang MRT) Pte. Ltd. Q&M Serangoon 1 : Q & M Dental Surgery (Serangoon Central) Pte. Ltd. Q&M Serangoon 2 : Q & M Dental Surgery (Serangoon North) Pte. Ltd. Q&M Serangoon 3 : Q & M Dental Surgery (Serangoon) Pte. Ltd. Q&M Serangoon 4 : Q & M Dental Clinic (Serangoon Central) Pte. Ltd. Q&M Sims Place : Q & M Dental Surgery (Sims Place) Pte. Ltd. Q&M Tampines : Q & M Dental Surgery (Tampines), a branch under Q&M Pasir Ris Q&M Tiong Bahru 1 : Q & M Dental Surgery (Tiong Bahru) Pte. Ltd. Q&M Tiong Bahru 2 : Q & M Dental Clinic (Tiong Bahru) Pte. Ltd. Q&M Tiong Bahru 3 : Q & M Dental Surgery (Redhill MRT) Pte. Ltd. Q&M Toa Payoh 1 : Q & M Dental Surgery (Toa Payoh) Pte. Ltd. Q&M Toa Payoh 2 : Q & M Dental Surgery (Toa Payoh Central) Pte. Ltd. Q&M Toa Payoh 3 : Q & M Dental Clinic (Toa Payoh) Pte. Ltd. Q&M Toa Payoh 4 : Q & M Dental Clinic (Toa Payoh Central) Pte. Ltd. Q&M Yishun : Q & M Dental Surgery (Yishun Central) Pte. Ltd. Other Corporations and Organisations AIM : Alternative Investment Market ASME : Association of Small and Medium Enterprises CDP : The Central Depository (Pte) Limited Collins Stewart, Manager or Placement Agent : Collins Stewart Pte. Limited CPF : The Central Provident Fund 6

13 DEFINITIONS HDB : Housing and Development Board HKSE : Hong Kong Stock Exchange ISO : International Organisation for Standardisation, a worldwide federation of national standards bodies MAS or Authority : The Monetary Authority of Singapore MOH : Ministry of Health, Singapore Quan Min : Quan Min Holdings Pte. Ltd. SCCS : Securities Clearing & Computer Services (Pte) Ltd SDA : Singapore Dental Association SDC : Singapore Dental Council SGX-ST : Singapore Exchange Securities Trading Limited TÜV SÜD PSB Pte Ltd : Established on 1 April 2001 as a subsidiary of the former Singapore Productivity and Standards Board (now known as SPRING Singapore) General Act : The Companies Act (Chapter 50) of Singapore as amended, supplemented or modified from time to time Application Forms : The printed application forms to be used for the purpose of the Placement and which form part of this Prospectus Application List : The list of applications for subscription of the New Shares Articles of Association : The articles of association of our Company Associate : (a) in relation to an entity, means:- (i) (ii) in a case where the entity is a substantial shareholder, controlling shareholder, substantial interest-holder or controlling interest-holder, its related corporation, related entity, associated company or associated entity; or in any other case, (A) a director or an equivalent person, (B) where the entity is a corporation, a controlling shareholder of the entity, (C) where the entity is not a corporation, a controlling interest-holder of the entity, (D) a subsidiary, a subsidiary entity, an associated company, or an associated entity, or (E) a subsidiary, a subsidiary entity, an associated company, or an associated entity, of the controlling shareholder or controlling interest-holder, as the case may be, of the entity; and 7

14 DEFINITIONS (b) in relation to an individual, means:- (i) (ii) (iii) his immediate family (being spouse, child, adopted child, step-child, sibling and parent); a trustee of any trust of which the individual or any member of the individual s immediate family is (A) a beneficiary; or (B) where the trust is a discretionary trust, a discretionary object; when the trustee acts in that capacity; or any corporation in which he and his immediate family (whether directly or indirectly) have interests in voting shares of an aggregate of not less than 30% of the total votes attached to all voting shares The terms associated company, associated entity, controlling interest-holder, controlling shareholder, related corporation, related entity, subsidiary, subsidiary entity and substantial interest-holder shall have the same meanings ascribed to them respectively in the Securities and Futures (Offers of Investments) (Shares and Debentures) Regulations 2005 Audit Committee : The audit committee of our Company as at the date of this Prospectus, unless otherwise stated Board or Board of Directors : The board of Directors of our Company as at the date of this Prospectus, unless otherwise stated business trust : Has the same meaning as in Section 2 of the Business Trusts Act (Chapter 31A) of Singapore CEO : Chief Executive Officer Controlling Shareholder : A person who holds directly or indirectly 15% or more of the total votes attached to all our Shares, or in fact exercises control over our Company COO : Chief Operating Officer Director : A director of our Company as at the date of this Prospectus, unless otherwise stated entity : Includes a corporation, an unincorporated association, a partnership and the government of any state, but does not include a trust EPS : Earnings per Share Executive Directors : The executive Directors of our Company as at the date of this Prospectus, unless otherwise stated Executive Officers : The executive officers of our Group as at the date of this Prospectus, unless otherwise stated FY : Financial year ended or ending 31 December, as the case may be 8

15 DEFINITIONS GST : Goods and Services Tax (Singapore) HY2008 : Six-month financial period ended 30 June 2008 HY2009 : Six-month financial period ended 30 June 2009 Independent Directors : The non-executive independent Directors of our Company as at the date of this Prospectus, unless otherwise stated IPO : Initial public offering Issue Price : $0.27 for each New Share Latest Practicable Date : 4 October 2009, being the latest practicable date prior to the lodgement of this Prospectus with the Authority Listing Manual : The Listing Manual of the SGX-ST, as amended from time to time Market Day : A day on which the SGX-ST is open for trading in securities MRT : Mass Rapid Transit New Shares : The 74,075,000 new Shares for which our Company invites applications to subscribe pursuant to the Placement, subject to and on the terms and conditions of this Prospectus Nominating Committee : The nominating committee of our Company as at the date of this Prospectus, unless otherwise stated Non-Executive Directors : The non-executive Directors of our Company as at the date of this Prospectus, unless otherwise stated NTA : Net tangible assets PER : Price earnings ratio periods under review : The period which comprises FY2006, FY2007, FY2008 and HY2009 Placement : The placement by the Placement Agent of the New Shares on behalf of our Company for subscription at the Issue Price, subject to and on the terms and conditions of this Prospectus Placement Shares : The 74,075,000 New Shares which are the subject of the Placement PRC or China : The People s Republic of China, excluding Hong Kong and the Macau Special Administrative Region for the purposes of this Prospectus Principal Shareholders : Dr Ng Chin Siau, Dr Ng Jet Wei, Dr Chong Kai Chuan, Dr Wong Dai Chong, Dr Yap Kin Wai, Dr Kuan Chee Keong, Dr Ang Hwee Quan Susan, Dr Ang Ee Peng Raymond, Dr Chong Ling Sharon, Dr Mohanarajah A/L S. Senathirajah, Dr Loh Meow Song, Dr Ng Cheng Huat, Dr Chan Pui Kee, Dr Dalila Hashim, Dr Tan Shally, Dr Tai Mie Yen, Dr Goh Seng Teik and Dr Yeo Shulin Serene 9

16 DEFINITIONS Prospectus : This prospectus dated 17 November 2009 Remuneration Committee : The remuneration committee of our Company as at the date of this Prospectus, unless otherwise stated Restructuring Exercise : The restructuring exercise undertaken in connection with the Placement as described in the Restructuring Exercise section of this Prospectus Securities Account : The securities account maintained by a Depositor with CDP, but does not include a securities sub-account Service Agreements : The service agreements entered into between our Company and our Executive Directors as described in the Service Agreements Executive Directors section of this Prospectus SFA : The Securities and Futures Act (Chapter 289) of Singapore, as amended, modified or supplemented from time to time SGXNET : The corporate announcement system maintained by the SGX-ST for the submission of announcements by listed companies Shareholders : Registered holders of Shares, except where the registered holder is CDP, the term Shareholders shall, in relation to such Shares, mean the Depositors whose Securities Accounts are credited with Shares Shares : Ordinary shares in the capital of our Company Substantial Shareholder : A person who has an interest in voting shares of our Company the total votes attached to which is not less than 5% of the total votes attached to all our Shares UK : United Kingdom USA : United States of America Vendors : Dr Ng Chin Siau, Dr Ng Jet Wei, Dr Chong Kai Chuan, Dr Wong Dai Chong, Dr Yap Kin Wai, Dr Kuan Chee Keong, Dr Ang Hwee Quan Susan, Dr Ang Ee Peng Raymond, Dr Chong Ling Sharon, Dr Mohanarajah A/L S. Senathirajah, Dr Loh Meow Song, Dr Ng Seow Choon, Dr Ng Cheng Huat, Dr Chan Pui Kee, Dr Dalila Hashim, Dr Tan Shally, Dr Tai Mie Yen, Dr Goh Seng Teik and Dr Yeo Shulin Serene Currencies, Units and Others RMB : Renminbi S$ or $ and cents : Singapore Dollars and Cents, respectively sqm : Square metres % : Percentage 10

17 DEFINITIONS The terms Depositor, Depository Agent and Depository Register shall have the meanings ascribed to them respectively in Section 130A of the 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. References to persons shall include corporations. Any discrepancies in tables included herein between the total sum of amounts listed and the totals shown are due to rounding. Accordingly, figures shown as totals in certain tables may not be an arithmetic aggregation of the figures which precede them. Any reference in this Prospectus and the Application Forms to any statute or enactment is a reference to that statute or enactment as for the time being amended or re-enacted. Any word defined under the Act, the SFA or any statutory modification thereof and used in this Prospectus and the Application Forms shall, where applicable, have the meaning ascribed to it under the Act, the SFA or any statutory modification thereof, as the case may be. Any reference in this Prospectus and the Application Forms to Shares being allotted to an applicant includes allotment to CDP for the account of that applicant. Any reference to a time of day in this Prospectus and the Application Forms shall be a reference to Singapore time, unless otherwise stated. Any reference to we, us, our, ourselves or other grammatical variations thereof in this Prospectus is a reference to our Company, our Group or any member of our Group as the context requires. Narayanan N Sreenivasan is also known as Narayanan Sreenivasan. Any reference in this Prospectus to Narayanan Sreenivasan shall refer to Narayanan N Sreenivasan. San Yi Tan Yi Leong is also known as San Yi Leong. Any reference in this Prospectus to San Yi Leong shall refer to San Yi Tan Yi Leong. Dr Wong Dai Harris Wong is also known as Dr Wong Dai Chong. Any reference in this Prospectus to Dr Wong Dai Chong shall refer to Dr Wong Dai Harris Wong. 11

18 GLOSSARY OF TECHNICAL TERMS The glossary contains an explanation of certain terms used in this Prospectus in connection with our Group. The terms and their assigned meanings may not correspond to standard industry or common meanings, as the case may be, or usage of these terms. alveolar bone : The specialised bone structure that contains the sockets of the teeth and supports the teeth dental centre : A large dental clinic that is equipped with multiple dental operatories (usually more than 10 dental chairs) dentoalveolar : Relating to a tooth and the part of the alveolar bone that immediately surrounds it endodontics : A field of dentistry that deals with the tooth pulp and the tissues surrounding the root end of a tooth ISO9001:2008 : A constituent part of the ISO9000 series which specifies the requirements for a quality management system for any organisation that needs to demonstrate its ability to consistently provide products that meet customer and applicable requirements and aim to enhance customer satisfaction oral health therapist : An important member of a multi-disciplinary healthcare team who works in conjunction with licensed dental surgeons providing dental care to children, adolescents and young adults (up to age of 18) as well as using preventive, educational and therapeutic methods for controlling oral diseases to help adult patients achieve and maintain oral health oral surgery : A field of dentistry that deals with the diagnosis and management of the diseases, injuries, and defects of the human mouth, jaw, and associated facial structures orthodontics : A field of dentistry that is concerned with the treatment of dento-facial irregularities or malocclusions (improper bites), which may be a result of dental irregularity and disproportionate jaw relationships, amongst others orthopantomogram or OPG : A panoramic scanning dental X-ray of the upper and lower jaw paedodontics or paediatric dentistry : A field of dentistry that is concerned with the provision of oral healthcare services to children aged one to 17 years periodontics : A field of dentistry that involves the diagnosis, prevention and control of periodontal diseases or gum diseases private dental healthcare group : Excludes government and restructured public institutions such as polyclinics, hospitals and the National Dental Centre private dental healthcare services : Services provided by private dental healthcare groups private patients : Individual patients who pay full fees for dental healthcare services (excluding any individual patients who are subsidised by the government or any corporate patients) 12

19 GLOSSARY OF TECHNICAL TERMS public dental healthcare services : Services provided by government and restructured public institutions such as polyclinics, hospitals and the National Dental Centre prosthodontics : A field of dentistry that restores tooth structure and replaces missing teeth and soft tissue, with an emphasis on restoring natural function and appearance TÜV SÜD : TÜV SÜD, headquartered in Munich, Germany, is a major international service group operating in the industry, mobility and people business segments 13

20 SELLING RESTRICTIONS This Prospectus does not constitute an offer, solicitation or invitation to subscribe for our New Shares in any jurisdiction in which such offer, solicitation or invitation is unlawful or is not authorised or to any person to whom it is unlawful to make such offer, solicitation or invitation. No action has been or will be taken under the requirements of the legislation or regulations of, or of the legal or regulatory authorities of any jurisdiction, except for the filing and/or registration of this Prospectus in Singapore in order to permit a public offering of the New Shares and the public distribution of this Prospectus in Singapore. The distribution of this Prospectus and the offering of the New Shares in certain jurisdictions may be restricted by the relevant laws in such jurisdictions. Persons who may come into possession of this Prospectus are required by our Company, the Manager and the Placement Agent to inform themselves about, and to observe and comply with, any such restrictions at their own expense and without liability to our Company, the Manager and the Placement Agent. Persons to whom a copy of this Prospectus has been issued shall not circulate to any other person, reproduce or otherwise distribute this Prospectus or any information herein for any purpose whatsoever nor permit or cause the same to occur. 14

21 CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS All statements contained in this Prospectus, statements made in press releases and oral statements that may be made by us or our Directors, Executive Officers or employees acting on our behalf that are not statements of historical fact, constitute forward-looking statements. You can identify some of these forward-looking statements by terms such as expect, believe, plan, intend, estimate, anticipate, may, will, would and could or similar words and phrases. However, you should note that these words are not the exclusive means of identifying forward-looking statements. All statements regarding our expected financial position, business strategies, plans and prospects are forward-looking statements. These forward-looking statements, including statements as to:- (a) (b) (c) (d) (e) our revenue and profitability; expected growth in demand; expected industry trends; anticipated expansion plans; and other matters discussed in this Prospectus which are not historical facts, are only predictions. These forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expected, expressed or implied by these forward-looking statements. These risks, uncertainties and other factors include, among others:- (a) (b) (c) (d) (e) (f) (g) (h) (i) changes in political, social, economic and stock or securities market conditions and the regulatory environment in Singapore and other countries in which we conduct business; changes in currency exchange or interest rates; our anticipated growth strategies and expected internal growth; changes in the availability and prices of materials; changes in customer demand; changes in competitive conditions and our ability to compete under these conditions; changes in our future capital needs and the availability of financing and capital to fund these needs; other factors beyond our control; and the factors described in the Risk Factors section of this Prospectus. All forward-looking statements made by or attributable to us, or persons acting on our behalf, contained in this Prospectus are expressly qualified in their entirety by such factors. Given the risks and uncertainties that may cause our actual future results, performance or achievements to be materially different from that expected, expressed or implied by the forward-looking statements in this Prospectus, we advise you not to place undue reliance on those statements which apply only as at the date of this Prospectus. Neither our Company, the Manager and the Placement Agent nor any other person represents or warrants to you that our actual future results, performance or achievements will be as discussed in those statements. Further, our Company, the Manager and the Placement Agent disclaim any responsibility to update any of those forward-looking statements to reflect future developments, events or circumstances for any reason, even if new information becomes available or other events occur in the future. 15

22 CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS Our actual future results may differ materially from those anticipated in these forward-looking statements as a result of the risks faced by us. Our Company, the Manager and the Placement Agent disclaim any responsibility to update any of those forward-looking statements or publicly announce any revisions to those forward-looking statements to reflect future developments, events or circumstances. We are, however, subject to the provisions of the SFA and the Listing Manual regarding corporate disclosure. In particular, pursuant to Section 241 of the SFA, if after this Prospectus is registered but before the close of the Placement, we become aware of (a) a false or misleading statement or matter in this Prospectus; (b) an omission from this Prospectus of any information that should have been included in it under Section 243 of the SFA; or (c) a new circumstance that has arisen since this Prospectus was lodged with the Authority and would have been required by Section 243 of the SFA to be included in this Prospectus, if it had arisen before this Prospectus was lodged and that is materially adverse from the point of view of an investor, we may lodge a supplementary or replacement prospectus with the Authority. 16

23 DETAILS OF THE PLACEMENT LISTING ON THE SGX-ST We have made an application to the SGX-ST for permission to deal in, and for quotation of, all our Shares already issued and the New Shares, which are the subject of the Placement. Such permission will be granted when our Company has been admitted to the Official List of the SGX-ST. Our acceptance of applications will be conditional upon, inter alia, the issue of the New Shares and permission being granted by the SGX-ST to deal in, and for quotation of, all of our existing issued Shares and the New Shares. If the said permission is not granted for any reason, monies paid in respect of any application accepted will, subject to applicable laws, be returned to the applicants at their own risk, without interest or any share of revenue or other benefit arising therefrom, and the applicants will not have any claim whatsoever against our Company, the Manager or the Placement Agent. No Shares shall be allotted on the basis of this Prospectus later than six months after the date of registration of this Prospectus by the Authority. The SGX-ST assumes no responsibility for the correctness of any statements made, reports contained or opinions expressed in this Prospectus. Admission to the Official List of the SGX-ST is not to be taken as an indication of the merits of the Placement, our Company and subsidiaries, the Shares or the New Shares. A copy of this Prospectus has been lodged with and registered by the Authority. The Authority assumes no responsibility for the contents of this Prospectus. Registration of this Prospectus by the Authority does not imply that the SFA, or any other legal or regulatory requirements, have been complied with. The Authority has not, in any way, considered the merits of our existing issued Shares or the New Shares, as the case may be, being offered for investment. We have not lodged or registered this Prospectus in any other jurisdiction. We are subject to the provisions of the SFA and the Listing Manual regarding corporate disclosure. In particular, pursuant to Section 241 of the SFA, if after this Prospectus is registered but before the close of the Placement, we become aware of: (a) (b) (c) a false or misleading statement in this Prospectus; an omission from this Prospectus of any information that should have been included in it under Section 243 of the SFA; or a new circumstance that has arisen since this Prospectus was lodged with the Authority and would have been required by Section 243 of the SFA to be included in this Prospectus, if it had arisen before this Prospectus was lodged, that is materially adverse from the point of view of an investor, our Company may lodge a supplementary or replacement prospectus with the Authority. Where prior to the lodgement of the supplementary or replacement prospectus, applications have been made under this Prospectus to subscribe for the New Shares and: (a) where the New Shares have not been issued to the applicants, our Company shall either: (i) (ii) within two days (excluding any Saturday, Sunday or public holiday) from the date of lodgement of the supplementary or replacement prospectus, give the applicants notice in writing of how to obtain, or arrange to receive, a copy of the same and provide the applicants with an option to withdraw their applications, and take all reasonable steps to make available within a reasonable period the supplementary or replacement prospectus to the applicants who have indicated they wish to obtain, or who have arranged to receive, a copy of the supplementary or replacement prospectus; within seven days from the date of lodgement of the supplementary or replacement prospectus, give the applicants the supplementary or replacement prospectus, as the case may be, and provide the applicants with an option to withdraw their applications; or 17

24 DETAILS OF THE PLACEMENT (iii) treat the applications as withdrawn and cancelled, in which case the applications shall be deemed to have been withdrawn and cancelled, and our Company shall, within seven days from the date of lodgement of the supplementary or replacement prospectus, pay the applicants all monies the applicants have paid on account of their applications for the New Shares; or (b) where the New Shares have been issued to the applicants, our Company shall either: (i) (ii) (iii) within two days (excluding any Saturday, Sunday or public holiday) from the date of lodgement of the supplementary or replacement prospectus, give the applicants notice in writing of how to obtain, or arrange to receive, a copy of the same and provide the applicants with an option to return to our Company the New Shares which they do not wish to retain title in, and take all reasonable steps to make available within a reasonable period the supplementary or replacement prospectus to the applicants who have indicated they wish to obtain, or who have arranged to receive, a copy of the supplementary or replacement prospectus; within seven days from the date of lodgement of the supplementary or replacement prospectus, give the applicants the supplementary or replacement prospectus, as the case may be, and provide the applicants with an option to return to our Company the New Shares which they do not wish to retain title in; or treat the issue of the New Shares as void, in which case the issue shall be deemed void and our Company shall within seven days from the date of lodgement of the supplementary or replacement prospectus, pay the applicants all monies the applicants have paid on account of their applications for the New Shares. An applicant who wishes to exercise his option under paragraph (a)(i) or (ii) to withdraw his application shall, within 14 days from the date of lodgement of the supplementary or replacement prospectus, notify our Company of this, whereupon our Company shall, within seven days from the receipt of such notification, pay to him all monies paid by him on account of his application for those Shares. An applicant who wishes to exercise his option under paragraph (b)(i) or (ii) to return the New Shares issued to him shall, within 14 days from the date of lodgement of the supplementary or replacement prospectus, notify our Company of this and return all documents, if any, purporting to be evidence of title to those Shares, to our Company, whereupon our Company shall, within seven days from the receipt of such notification and documents, if any, pay to him all monies paid by him for those Shares, and the issue of those New Shares shall be deemed to be void. Pursuant to Section 242 of the SFA, the Authority may issue a stop order (the Stop Order ) if a prospectus that has been registered (i) contains any statement which, in the Authority s opinion, is false or misleading; (ii) omits any information that should have been included in it under Section 243 of the SFA; or (iii) does not in the Authority s opinion comply with the requirements of the SFA. In the event that the Authority issues the Stop Order, and applications to subscribe for the New Shares have been made prior to the Stop Order, then:- (a) (b) where the New Shares have not been issued to the applicants, the applications for the New Shares shall be deemed to have been withdrawn and cancelled and our Company shall, within 14 days from the date of the Stop Order, pay to the applicants all monies the applicants have paid on account of their applications for the New Shares; or where the New Shares have been issued to the applicants, the issue of the New Shares shall be deemed to be void and our Company shall, (i) if no documents purporting to evidence title to those New Shares have been issued to the applicants, within seven days from the date of the Stop Order, pay to the applicants all monies paid by them for those New Shares, or (ii) if documents purporting to evidence title to those New Shares have been issued to the applicants, within seven days from the date of the Stop Order, inform the applicants to return such documents to us within 14 days 18

25 DETAILS OF THE PLACEMENT from that date and within seven days from the date of receipt of such documents or the date of the Stop Order, whichever is the later, pay to the applicants all monies paid by them for those New Shares. If we are required by applicable Singapore laws to cancel issued New Shares and repay application monies to applicants (including instances where the Stop Order under the SFA is issued), we shall purchase the New Shares which have been issued at the Issue Price. Where monies are to be returned to applicants for the New Shares, it shall be paid to the applicants without any interest or share of revenue or benefit arising therefrom at the applicants own risk, and the applicants will not have any claim against our Company, the Manager or the Placement Agent. This Prospectus has been seen and approved by our Directors and they individually and collectively accept full responsibility for the accuracy of the information given in this Prospectus and confirm, having made all reasonable enquiries, that to the best of their knowledge and belief, (i) the facts stated and opinions, intentions and expectations expressed in this Prospectus are true, fair and accurate and not misleading in all material respects as at the date of this Prospectus, (ii) there are no material facts the omission of which would make any statement in this Prospectus misleading, and (iii) this Prospectus constitutes a full and true disclosure of all material facts about the Placement, our Group and our Shares. Neither our Company, the Manager, the Placement Agent or any parties involved in the Placement is making any representation to any person regarding the legality of an investment in our Shares by such person under any investment or any other laws or regulations. No information in this Prospectus should be considered as being business, legal or tax advice regarding an investment in our Shares. Each prospective investor should consult his own legal, financial, tax or other professional adviser regarding an investment in our Shares. The New Shares are offered for subscription solely on the basis of the information contained and the representations made in this Prospectus. No person has been or is authorised to give any information or to make any representation not contained in this Prospectus in connection with the Placement and, if given or made, such information or representation must not be relied upon as having been authorised by our Company, the Manager or the Placement Agent. Neither the delivery of this Prospectus and the Application Forms nor any document relating to the Placement shall, under any circumstances, constitute a continuing representation or create any suggestion or implication that there has been no change in the affairs of our Company or our subsidiaries or in any statement of fact or information contained in this Prospectus since the date of this Prospectus. Where such changes occur and are material or are required to be disclosed by law, we will promptly make an announcement of the same to the SGX-ST and if required under the SFA, a supplementary or replacement prospectus will be issued and made available to the public after a copy thereof has been lodged with the Authority. All applicants should take note of any such announcement, and/or supplementary or replacement prospectus and, upon the release of such an announcement, and/ or supplementary or replacement prospectus, shall be deemed to have notice of such changes. Save as expressly stated in this Prospectus, nothing herein is, or may be relied upon as, a promise or representation as to the future performance or policies of our Company or our subsidiaries. This Prospectus has been prepared solely for the purpose of the Placement and may not be relied upon by any persons other than the applicants in connection with their application for the New Shares or for any other purpose. This Prospectus does not constitute an offer, solicitation or invitation to subscribe for the New Shares in any jurisdiction in which such offer, solicitation or invitation is unlawful or is not authorised or to any person to whom it is unlawful to make such an offer, solicitation or invitation. 19

26 DETAILS OF THE PLACEMENT Copies of this Prospectus may be obtained on request, subject to availability, during office hours from:- Collins Stewart Pte. Limited 77 Robinson Road #21-02 Singapore An electronic copy of this Prospectus is also available on:- (a) (b) the SGX-ST website at and the Authority s OPERA website at The Application List will open immediately upon registration of this Prospectus by the Authority and will remain open until noon on 24 November 2009 or for such further period or periods as our Directors may, in consultation with the Manager and the Placement Agent, in their absolute discretion decide, subject to any limitation under all applicable laws. In the event a supplementary or replacement prospectus is lodged with the Authority, the Application List will remain open for at least 14 days after the lodgement of the supplementary or replacement prospectus. Details of the procedures for applications to subscribe for the New Shares are set out in Appendix F of this Prospectus. 20

27 DETAILS OF THE PLACEMENT INDICATIVE TIMETABLE FOR LISTING An indicative timetable is set out below for your reference:- Indicative date and time Event 24 November 2009, noon Close of Application List 26 November 2009, 9.00 a.m. Commence trading on a ready basis 2 December 2009 Settlement date for all trades done on a ready basis The above timetable is only indicative as it assumes that the date of closing of the Application List is 24 November 2009, the date of admission of our Company to the Official List of the SGX-ST is 26 November 2009, the SGX-ST s shareholding spread requirement will be complied with and the New Shares will be issued or allotted and fully paid-up prior to 26 November The above timetable and procedure may be subject to such modifications as the SGX-ST may in its discretion decide, including the commencement date of trading on a ready basis. In the event of any changes in the closure of the Application List or the time period during which the Placement is open, we will publicly announce the same:- (i) (ii) through a SGXNET announcement to be posted on the Internet at the SGX-ST website sgx.com; and in a major Singapore English newspaper. We will provide details of the level of subscription and the results of the distribution of the New Shares pursuant to the Placement, as soon as practicable after the closure of the Application List through the channels described in (i) and (ii) above. Investors should consult the SGX-ST announcement of the ready trading date on the Internet (at the SGX-ST website or newspapers, or check with their brokers on the date on which trading on a ready basis will commence. 21

28 PROSPECTUS SUMMARY The information contained in this summary is derived from and should be read in conjunction with the full text of this Prospectus. Because it is a summary, it does not contain all the information that potential investors should consider before investing in the Shares of our Company. Potential investors should read this entire Prospectus carefully, especially the matters set out under the Risk Factors section of this Prospectus, before deciding to invest in our Shares. OVERVIEW OF OUR GROUP Our Company was incorporated in Singapore on 7 January 2008 under the Act as a private company limited by shares, under the name Q & M Dental Group (Singapore) Pte. Ltd.. We were converted into a public limited company on 9 October 2009 and our name was changed to Q & M Dental Group (Singapore) Limited. Pursuant to the Restructuring Exercise, our Company became the holding company of our Group with the acquisition of our subsidiaries, as more fully described under the Restructuring Exercise section of this Prospectus. Our Business We are Singapore s largest private dental healthcare group with 36 dental clinics and a mobile dental clinic with 105 dentists, nine oral health therapists and 302 dental surgery assistants as at the Latest Practicable Date. We have treated more than 300,000 patients island-wide between December 2005 and the Latest Practicable Date. Our dental healthcare services include general dental treatment, endodontics, orthodontics, periodontics, prosthodontics, paedodontics, oral surgery, dental implants and aesthetic dentistry. We have a dental laboratory which fabricates dental prosthesis such as crowns, bridges, dentures and retainers. Further details are set out in the Business section of this Prospectus. Our Competitive Strengths Our Directors believe our competitive strengths are as follows:- Experienced and proven management team Qualified and experienced dentists and oral health therapists Well established presence at strategic locations island-wide in Singapore Our Q&M brand is associated with comprehensive quality dental healthcare services Further details are set out in the Competitive Strengths section of this Prospectus. Our Business Strategies and Future Plans Expansion of our network of dental clinics and upgrading of existing facilities in Singapore Expanding into dental products and equipment distribution business Establishment of a dental centre in Singapore Expanding our dental practice into the PRC Expansion through acquisitions, joint ventures and/or strategic alliances Further details are set out in the Business Strategies and Future Plans section of this Prospectus. Where you can find us Both our principal place of business and registered office are located at 67 Ayer Rajah Crescent #05-12/14 Ayer Rajah Industrial Estate Singapore We have a network of 36 dental clinics throughout Singapore as disclosed under the Business Overview section of this Prospectus. Our telephone and facsimile numbers are (65) and (65) , respectively. Our Unique Entity Number is R. Our website address is Information contained in our website does not constitute part of this Prospectus. 22

29 PROSPECTUS SUMMARY SUMMARY OF OUR FINANCIAL INFORMATION You should read the following summary financial information in conjunction with the full text of this Prospectus, including the Independent Auditors Report on the Audited Combined Financial Statements of Q & M Dental Group (Singapore) Limited and the Independent Auditors Review Report on the Unaudited Combined Interim Financial Statements of Q & M Dental Group (Singapore) Limited set out in Appendices A and B, respectively of this Prospectus and the Management s Discussion and Analysis of Results of Operations and Financial Condition section of this Prospectus. Selected items from the Combined Operating Results of our Group (1) Audited Adjusted (4) Unaudited () FY2006 FY2007 FY2008 FY2008 HY2008 HY2009 Revenue 24,368 26,443 29,601 29,601 13,897 14,033 Profit before tax from continuing operations 3,960 4,237 4,118 4,767 1,983 2,122 Profit from continuing operations, net of tax 3,773 4,125 3,723 4,372 1,791 1,936 Profit attributable to equity holders of parent, net of tax 3,641 4,061 3,743 4,392 1,790 1,946 EPS (cents) (2) EPS (fully diluted) (cents) (3) Selected items from the Combined Financial Positions of our Group (5) () Audited As at 31 December 2008 Unaudited As at 30 June 2009 Current assets 5,555 4,636 Non-current assets 2,815 3,511 Current liabilities 3,484 2,835 Non-current liabilities NTA 4,690 5,125 Shareholders equity 4,677 5,122 NTA per Share (cents) (6) Notes:- (1) Our combined operating results for the periods under review have been prepared on the basis that our Group had been in existence throughout the periods under review. (2) For comparative purposes, EPS for the periods under review have been computed based on the profit attributable to equity holders of parent, net of tax and our pre-placement share capital of 200,000,000 Shares. (3) For comparative purposes, EPS (fully diluted) for the periods under review have been computed based on the profit attributable to equity holders of parent, net of tax and our post-placement share capital of 274,075,000 Shares. (4) For illustrative purposes, adjusted to exclude the professional fees and expenses in relation to the Placement amounting to approximately $649,000 incurred in FY2008. (5) Our combined financial positions as at 31 December 2008 and 30 June 2009 have been prepared on the basis that our Group had been in existence on these dates. (6) The NTA per Share as at 31 December 2008 and 30 June 2009 have been computed based on our pre-placement share capital of 200,000,000 Shares. 23

30 PROSPECTUS SUMMARY THE PLACEMENT Issue size : 74,075,000 New Shares. The New Shares will, upon issue and allotment, rank pari passu in all respects with our existing issued Shares. Issue Price : $0.27 for each New Share. The Placement : Placement by the Placement Agent on behalf of our Company of 74,075,000 New Shares at the Issue Price by way of placement, subject to and on the terms and conditions of this Prospectus. Purpose of the Placement : Our Directors believe that the listing of our Company and the quotation of our Shares on the SGX-ST will enhance our public image locally and internationally and enable us to tap the capital markets to fund our business growth. The Placement will also provide members of the public, our employees, our business associates and others who have contributed to the success of our Group with an opportunity to participate in the equity of our Company. Listing status : Our Shares will be quoted on the SGX-ST in Singapore dollars, subject to admission of our Company to the Official List of the SGX-ST and permission for dealing in, and for quotation of, our Shares being granted by the SGX-ST and the Authority not issuing the Stop Order. Risk factors : Investing in our Shares involves risks which are described in the Risk Factors section of this Prospectus. 24

31 PLAN OF DISTRIBUTION The Placement is for 74,075,000 New Shares offered in Singapore by way of placement and managed by Collins Stewart. Prior to the Placement, there has been no public market for our Shares. The Issue Price is determined by us in consultation with the Manager and the Placement Agent after taking into consideration, inter alia, prevailing market conditions and estimated market demand for our New Shares determined through a book-building process. The Issue Price is the same for all New Shares and is payable in full on application. The New Shares are reserved for Placement to members of public and institutional investors in Singapore. Applications for the New Shares may only be made by way of Application Forms. The terms, conditions and procedures for applications are described in Appendix F of this Prospectus. Subscribers of the Placement Shares may be required to pay a brokerage of up to 1.0% of the Issue Price (including the prevailing GST, if applicable) to the Placement Agent or any sub-placement agent that may be appointed by the Placement Agent. Our Non-Executive Chairman, Narayanan Sreenivasan, and our Independent Directors, Wong Hin Sun Eugene and Ng Weng Sui Harry, intend to subscribe for 100,000 New Shares each in the Placement. Save as disclosed above, none of our Directors or Substantial Shareholder intends to subscribe for the New Shares in the Placement. To the best of our knowledge, we are not aware of any person who intends to subscribe for more than 5% of the New Shares. However, through a book-building process to assess market demand for our Shares, there may be person(s) who may indicate an interest to subscribe for more than 5% of the New Shares. If such person(s) were to make an application for more than 5% of the New Shares pursuant to the Placement and subsequently allotted such number of Shares, we will make the necessary announcements at an appropriate time. The final allotment of Shares will be in accordance with the shareholding spread and distribution guidelines set out in the Listing Manual. No Shares shall be allotted on the basis of this Prospectus later than six months after the date of registration of this Prospectus by the Authority. 25

32 USE OF PROCEEDS FROM THE PLACEMENT AND EXPENSES INCURRED The net proceeds from the issue of the New Shares (after deducting the estimated expenses in relation to the Placement of approximately $2.1 million to be borne by our Company) pursuant to this Placement are estimated to be approximately $17.9 million. The intended use of the proceeds from the Placement and estimated listing expenses are set out below:- Use of the proceeds from the Placement As a percentage of gross proceeds from the Placement (%) To fund the setting up of a dental centre in Singapore (including repayment of bank loans taken out for the purpose of renovation of the dental centre and funds for dental equipment and renovation) 2, To fund new dental clinics, acquisitions, joint ventures and/ or strategic alliances when opportunities arise, and for the general working capital purposes of our Group 15, Net proceeds from the Placement 17, Estimated listing expenses Listing and processing fees Professional fees and expenses 1, Placement commission Miscellaneous expenses Gross proceeds from the Placement 20, Please refer to the Business Strategies and Future Plans section of this Prospectus for further details on our plans above. In particular, our future plans may be funded apart from the proceeds from the Placement, either through internally generated funds and/or external borrowings. Pending the deployment of the net proceeds as aforesaid, the funds will be placed in short-term deposits with financial institutions, used to invest in short-term money market instruments and/or used for working capital requirements as our Directors may deem appropriate. We will make periodic announcements on the use of the net proceeds from the issue of the New Shares as and when the funds are materially disbursed, and provide a status report on the use of the net proceeds in our annual report. In the event that any part of our proposed uses of the net proceeds from the issue of the New Shares does not materialise or proceed as planned, our Directors will carefully evaluate the situation and may reallocate the intended funding to other purposes and/or hold such funds on short-term deposits for so long as our Directors deem it to be in the interest of our Company and our Shareholders, taken as a whole. Any change in the use of the net proceeds will be subject to the listing rules of the SGX-ST and appropriate announcements will be made by our Company on SGXNET. In the reasonable opinion of our Directors, there is no minimum amount which must be raised from the Placement. 26

33 MANAGEMENT AND PLACEMENT ARRANGEMENTS Pursuant to a management agreement dated 17 November 2009 (the Management Agreement ) entered into between our Company and Collins Stewart, our Company appointed Collins Stewart to manage the Placement. Collins Stewart will receive a management fee from our Company for its services rendered in connection with the Placement. Pursuant to the placement agreement dated 17 November 2009 (the Placement Agreement ) entered into between our Company and Collins Stewart as the Placement Agent, Collins Stewart agreed to subscribe for and/or procure subscribers for the Placement Shares at the Issue Price at a placement commission of 2.75% of the aggregate Issue Price for each Placement Share payable by our Company. Collins Stewart may, at its absolute discretion, appoint one or more sub-placement agents for the Placement Shares. Subscribers of Placement Shares may be required to pay a brokerage of up to 1.0% of the Issue Price for each Placement Share to the Placement Agent (including the prevailing GST, if applicable). Save as aforesaid, no commission, discount or brokerage, has been paid or other special terms granted by our Company within the two years preceding the date of this Prospectus or is payable to any Director, promoter, expert, proposed Director or any other person for subscribing or agreeing to subscribe or procuring or agreeing to procure subscriptions for any shares in, or debentures of, our Company or our subsidiary. If there shall have been, since the date of the Management Agreement and prior to the time and date of the commencement of trading of the Shares on the Official List of the SGX-ST:- (a) (b) (c) (d) (e) (f) (g) (h) the issue of a stop order by the Authority in accordance with Section 242 of the SFA; or any breach of the representations, warranties or undertakings by our Company in the Management Agreement or the Placement Agreement which comes to the knowledge of Collins Stewart; or any occurrence of certain specified events which comes to the knowledge of Collins Stewart; or any material adverse change, or any development involving a prospective adverse change, in the condition (business, trading, operational, financial or otherwise) of our Company or Group as a whole; or any introduction or prospective introduction of or any change or prospective change in any legislation, regulation, order, policy, rule, guideline or directive in Singapore or elsewhere (whether or not having the force of law and including, without limitation, any directive, notice or request issued by the Authority, the Accounting and Corporate Regulatory Authority, the Securities Industry Council of Singapore or the SGX-ST) or in the interpretation or application thereof by any court, government body, regulatory authority or other competent authority in Singapore or elsewhere including but not limited to foreign exchange controls in Singapore or overseas having a material adverse effect; or any change, or any development involving a prospective change, in local, national, regional or international financial (including stock market, foreign exchange market, inter-bank market or interest rates or money market), political, industrial, economic, legal or monetary conditions, taxation or exchange controls (including without limitation, the imposition of any moratorium, suspension or material restriction on trading in securities generally on the SGX-ST due to exceptional financial circumstances or otherwise, adverse changes in foreign exchange controls in Singapore or overseas, or any combination of any such changes or developments or crisis, or any deterioration of any such conditions) having a material adverse effect; or any imminent threat or occurrence of any local, national, regional or international outbreak or escalation of hostilities, insurrection, terrorist attacks or armed conflict (whether or not involving financial markets) in any jurisdiction having a material adverse effect; or any regional or local outbreak of disease that may have an adverse effect on the financial markets; or 27

34 MANAGEMENT AND PLACEMENT ARRANGEMENTS (i) (j) foreign exchange controls in Singapore and overseas or any occurance of a combination of any such changes or developments or crises, or any deterioration of any such conditions having a material adverse effect; or any other occurrence of any nature whatsoever, which event or events shall in the reasonable opinion of the Manager: (i) results or is likely to result in a material adverse fluctuation or material adverse conditions in the stock market in Singapore or overseas; or (ii) is likely to materially prejudice the success of the Placement; or (iii) makes it impracticable, inadvisable, inexpedient or not commercially viable to proceed with any of the transactions contemplated in the Placement Agreement or Management Agreement; or (iv) is likely to have a material adverse effect on the business, trading position, operations or prospects of our Company or Group; or (v) is such that no reasonable manager would have entered into the Placement Agreement or Management Agreement; or (vi) results or is likely to result in the issue of a Stop Order by the Authority; or (vii) makes it non-commercial or otherwise contrary to or outside the usual commercial customs or practices of managers in Singapore for the Manager to observe or perform or be obliged to observe or perform the terms of the Placement Agreement or Management Agreement, the Manager may at any time prior to the time and date of the commencement of trading of the Shares on the Official List of the SGX-ST by notice in writing to our Company rescind or terminate the Management Agreement. The Manager may by notice in writing to our Company terminate the Management Agreement if:- (a) (b) at any time up to the time and date of the commencement of trading of the Shares on the Official List of the SGX-ST, a Stop Order shall have been issued by the Authority in accordance with Section 242 of the SFA; or at any time after the registration of this Prospectus with the Authority but before the close of the Application List, our Company fails and/or neglects to lodge a supplementary or replacement prospectus (as the case may be) if we become aware of:- (i) (ii) (iii) a false or misleading statement in this Prospectus; an omission from this Prospectus of any information that should have been included in it under Section 243 of the SFA; or a new circumstance that has arisen since this Prospectus was lodged with the Authority and would have been required by Section 243 of the SFA to be included in this Prospectus if it had arisen before this Prospectus was lodged, that is materially adverse from the point of view of an investor; or (c) the Shares have not been admitted to the Official List of the SGX-ST on or before 26 November 2009 (or such other date as our Company and the Manager and the Placement Agent may agree). The obligations under the Placement Agreement are conditional upon, inter alia, the Management Agreement not being terminated or rescinded pursuant to the provisions of the Management Agreement. In the case of the non-fulfilment of any of the conditions in the Management Agreement or the release or discharge of the Manager from its obligations under or pursuant to the Management Agreement, the Placement Agreement shall be terminated and the parties shall (except as otherwise specifically provided therein) be released from their respective obligations under the Placement Agreement. In the event that the Management Agreement and/or the Placement Agreement is terminated, our Company reserves the right, at our absolute discretion, to cancel the Placement. Save as disclosed above, we do not have any material relationship with the Manager and the Placement Agent. 28

35 RISK FACTORS Prospective investors should carefully consider and evaluate each of the following considerations and all other information contained in this Prospectus before deciding to invest in our Shares. To the best of our Directors knowledge and belief, all risk factors which are material to investors in making an informed judgement of our Group have been set out below. If any of the following considerations, uncertainties or material risks develops into actual events, our business, financial condition and/or results of operations could be materially and adversely affected. In such cases, the trading price of our Shares could decline due to any of these considerations, uncertainties or material risks, and investors may lose all or part of their investment in our Shares. This Prospectus also contains forward-looking statements having direct and/or indirect implications on our future performance. Our actual results may differ materially from those anticipated by these forwardlooking statements due to certain factors, including the risks and uncertainties faced by us, as described below and elsewhere in this Prospectus. RISKS RELATING TO OUR BUSINESS AND INDUSTRY Our business will be affected by any adverse impact on our Q&M brand Over the past years, we have established our reputation in the dental healthcare industry in Singapore as a provider of a wide range of quality and accessible dental healthcare services. We believe that we have built significant goodwill in our Q&M brand and thus customer loyalty. Hence, if there are any major lapses in our services such as malpractices or negligence by our dentists and oral health therapists, whether actual or perceived, or due to circumstances beyond our control resulting in adverse publicity on us, our reputation will be affected and patients will lose confidence in our dental healthcare services. This will adversely affect our revenue, and hence our business and financial performance. Our business and reputation may be adversely affected if there are infringements of our intellectual property which may be difficult to protect Our ability to compete successfully is affected by our ability to protect our brand name, related marks and logos. Where possible, we have applied for the registration of trademarks which are material to our business both in Singapore and in the PRC. Please refer to the Intellectual Property section of this Prospectus for more details. As at the Latest Practicable Date, we have submitted an application in respect of our trademark in the PRC. The trademark application in the PRC is still pending approval and there is no guarantee that the application will be approved. In the event our application in the PRC is not approved, we will not be accorded legal recognition of our intellectual property in the PRC. Infringements of our intellectual property in Singapore as well as in the PRC could adversely affect the perception that our patients and our investors have of us as to our credibility, creditworthiness and abilities, which in turn may have a material adverse effect on our business, financial condition, results of operations and prospects. If we were to enforce our intellectual property rights through litigation, such litigation whether successful or unsuccessful, could result in substantial costs and diversion of resources. Our continued success is dependent on our key management personnel We are dependent to a significant extent on the continued services of our founder and CEO, Dr Ng Chin Siau, who has been instrumental in spearheading and implementing our growth, corporate development and overall business strategies. Our success is also dependent on our Executive Directors, Dr Ng Jet Wei and Dr Ang Ee Peng Raymond, who are responsible for implementing our business plans and driving our growth. These Executive Directors are supported by our Executive Officers and dentists (including our Principal Shareholders). There is no assurance that we will be able to retain the aforesaid key management personnel and dentists (notwithstanding the Service Agreements entered into with our Executive Directors, service contracts entered into with our Principal Shareholders and shareholders agreement entered into with our Principal Shareholders as described in the Service Agreements and Shareholders sections of this Prospectus). The loss of any key management personnel without suitable or timely replacement will have an adverse impact on our operations and financial performance. 29

36 RISK FACTORS Our performance is dependent on the general economic condition in Singapore Our revenue from dental healthcare services is derived from Singapore. We do not have significant service contracts with any individual or corporate client. The demand for our dental healthcare services is largely dependent on the financial ability of and the willingness by patients to pay for private dental healthcare services. General negative market sentiment or slowdown in the economy may lead to a decrease in demand for our dental healthcare services as more patients may opt for subsidised public dental healthcare services available at government hospitals. Moreover, our dental rates are affected by changes in government healthcare policies. Any adverse change in the general economic condition of Singapore and government healthcare policies will affect our revenue and financial performance. Our reputation may be adversely affected if there are complaints or medical negligence claims brought against our Group and/or dentists and oral health therapists by our patients From time to time, we receive complaints from patients regarding the adequacy of patient care, treatment outcome and pricing. These complaints may result in reviews, investigations or disciplinary actions by relevant regulatory and professional bodies and may affect the reputation of the relevant dentist, oral health therapist and our Group. Therefore, it is extremely important for our dentists and oral health therapists to educate our patients on the type of treatment they are receiving and its associated costs, benefits and risks so that our patients can make an informed decision. As such, our reputation will be adversely affected if there are complaints or medical negligence claims brought against our Group and/or dentists and oral health therapists by our patients. In the event that such complaints result in disciplinary actions or legal proceedings against our Group and/or dentists and oral health therapists, there may be an adverse effect on our reputation and hence, financial performance. As at the Latest Practicable Date, there is no such known material adverse event or legal proceedings against our Group and/or dentists and oral health therapists for medical malpractice that will have a material adverse impact on the financial position of our Group. In addition to the above, our dentists and oral health therapists may be subject to disciplinary actions from the relevant governing professional bodies and they may be fined and/or have their licences suspended or revoked. In the event of such claims or disciplinary actions against our dentists, oral health therapists, staff, or Group, there will be an adverse effect on our financial performance, professional standing and market reputation. We may not be able to recover all legal claims arising from medical negligence brought against our Group The provision of professional dental healthcare services entails inherent risks of potential liability arising from legal claims from patients and regulatory action. Our dentists and oral health therapists have each taken up professional indemnity to cover such risks. In addition, our Group obtains an indemnity from each of our dentists and oral health therapists for any legal claims arising from medical negligence brought against our Group. Neither our Company nor any of our subsidiaries are insured against professional liability. However, our Company is a corporate member of the Medical Protection Society Limited ( MPS ) whereby a discretionary indemnity may be granted by MPS to any qualifying applicant in respect of a qualifying claim and all losses, damages, costs, charges and expenses connected with a qualifying claim. Pursuant to the agreement entered into between our Company and MPS, there is no monetary cap specified for such qualifying claims. A qualifying applicant would include persons employed by or otherwise contracted by our Company for the provision of dental services as so notified to Dental Protection Limited. However, we may not be able to recover all such legal claims arising from medical negligence brought against our Group. Our insurance policies are renewed on an annual basis and there can be no assurance that we will be able to renew all our policies or obtain new policies on similar terms. The grant of the discretionary indemnity by MPS is entirely in the discretion of the council of the MPS who has the power to impose such terms and conditions on the grant of any indemnity as it thinks fit, and may in its absolute discretion limit or restrict each indemnity or decline altogether to grant the same. 30

37 RISK FACTORS In addition, our dentists and oral health therapists may be subject to disciplinary actions from the respective governing professional bodies and they may be fined and/or have their licences suspended or revoked. In the event of such claims or disciplinary actions against our dentists, oral health therapists, staff, or Group, there may be an adverse and material effect on our financial performance, professional standing and market reputation. Our inability to recruit adequate dentists in Singapore may adversely affect our growth Our dental clinics are currently based in Singapore. Our expansion plans entail the setting up of new dental clinics and acquisition of existing dental clinics in Singapore. Our continued expansion may be hampered if we are unable to employ sufficient dentists to staff these dental clinics. There has been a relatively tight supply of dentists in Singapore. Moreover, only a limited number of foreign graduates are allowed to practice dentistry in Singapore due to stringent requirements put in place by the SDC. Currently, SDC only accepts graduates from Australia, Canada, Hong Kong, New Zealand, Republic of Ireland, UK and USA to register and practice dentistry in Singapore. In addition, as our reputation grows, our competitors may seek to expand through recruiting our dentists. If we are unable to successfully manage our growth and expansion in Singapore through recruiting and retaining dentists, our operations and financial performance will be adversely affected. Increased competition in the dental healthcare industry may affect our ability to maintain our market share and growth Our competitors are mainly government hospitals or clinics and private dental healthcare and general healthcare groups. Some of these competitors possess greater financial resources and better infrastructure. Apart from market share, we also compete for the relatively limited talent pool of dentists. Failure to compete and differentiate our operations against these competitors will result in lower market share or fewer dentists joining us to meet the needs of our patients. These will adversely and materially affect our revenue and hence our profitability. Furthermore, we intend to expand our operations overseas and into the business of distribution of dental products and equipment. We will face competition from the established players in the respective markets. We may not be successful in competing against them and may expend significant resources, incur losses or poor returns from these new endeavours. If these develop into actual events, our financial performance and financial position will be adversely and materially affected. An inability to secure suitable sites for our dental clinics in a cost effective manner arising from relocation will adversely affect our operations We were able to reach out to our patients through our network of dental clinics. Accordingly, we located our dental clinics in properties at strategic locations at cost effective rental rates. However, due to the increase in rental and/or redevelopment and upgrading works being carried out by landlords at the relevant properties, we may be forced to relocate certain dental clinics or absorb the higher rental costs, as the case may be. Failure to renew any of these leases, or early termination may also force us to relocate the affected operations. Relocations will cause disruptions to our normal business operations and we may have to incur additional expenses associated with relocations. The inability to relocate our dental clinics to new premises that are in close proximity to the existing premises may lead to a loss of existing pool of patients. If these develop into actual events, our financial performance will be adversely and materially affected. The outbreak of communicable diseases, if uncontrolled, could affect our business In recent years, the outbreak of various communicable diseases such as Severe Acute Respiratory Syndrome, the Avian influenza and the H1N1 influenza have resulted in global economic and social uncertainties. There is no assurance that we will not be affected significantly if future outbreaks should occur. The resurgence of such communicable diseases, if uncontrolled, may potentially affect our business and operations. In addition, if any of the employees in our dental clinics is infected with communicable diseases, we may experience disruptions to our business or may be required to temporarily shut down the affected dental clinic for quarantine purposes. Accordingly, these disruptions to our business and operations may result in a negative impact on our financial performance. 31

38 RISK FACTORS Our financial performance will be affected by our inability to contain our operating expenses Employee benefits expense (including mainly professional fees paid to dentists and oral health therapists, and remuneration paid to dental surgery assistants) accounted for approximately 71.3%, 71.4%, 68.8% and 71.6% of our total operating expenses for FY2006, FY2007, FY2008 and HY2009 respectively. Competition for trained dentists, oral health therapists and dental surgery assistants may require us to enhance our remuneration package in order to compete with other employers to recruit or retain them. In addition, any changes in government policies may result in shortage of trained dentists, oral health therapists and dental surgery assistants and will likely increase the costs of recruiting and retaining such staff. If we are unable to pass on these increases to patients, an increase in employee benefits expenditure will have an adverse effect on our financial performance. Furthermore, we may also face higher costs associated with inflationary pressure in a global economy, which may also affect our profits adversely. An inability to keep abreast of advances in dental technology will affect our competitive edge and hence our financial performance adversely We need to continually keep up with advances in dental technology relevant to our business. Rapid changes in the dental healthcare industry require sourcing for and investing in new dental equipment and technology. From time to time, we also need to upgrade existing dental equipment and facilities. This may require significant capital expenditure. For further details on our capital expenditure for the periods under review, please refer to the Capital Expenditures, Divestments, Commitments and Contingent Liabilities section of this Prospectus. If we are unable to adapt to and to acquire such advances in dental technology, demand for our dental healthcare services may decline. There is also no assurance that we will be able to recover the financial outlay for these dental equipment and technology should patients expectations for these services are not met. As a result, our operations and financial performance may be adversely affected. Any adverse changes in the political, economic, regulatory or social conditions in the countries that we operate in or in which we intend to expand our business may have a material and adverse effect on our operations, financial performance and future growth We are governed by the laws, regulations and government policies in each of the countries that we operate in or in which we intend to expand our business and operations. Our business and future growth is dependent on the political, economic, regulatory and social conditions in these countries. Any economic downturn or changes in policies implemented by the governments in these countries, currency and interest rate fluctuations, capital controls or capital restrictions, labour laws, changes in environmental protection laws and regulations, duties, taxation and limitations on imports and exports could materially and adversely affect our operations, financial performance and future growth. We are subject to regulations and licensing requirements governing the dental healthcare industry In Singapore, our dental clinics are regulated by the MOH and our dentists and oral health therapists are regulated by the SDC. These regulatory bodies stipulate the criteria for the issue or renewal of dental licences to our dental clinics, dentists and oral health therapists for the provision of dental healthcare services. In addition, we are also subject to requirements of other statutory authorities, such as the National Environment Agency and Ministry of Manpower. Please refer to the Government Regulations section of this Prospectus for more information on the list of regulations and licences that are required of our Group. Changes to existing regulations may have a negative impact on our operations. The renewal of our licences is subject to compliance with the relevant regulations. There is no assurance that our licences will be renewed upon expiry. Failure to renew or withdrawal of such licences as a result of non-compliance will have an adverse effect on our operations and financial performance. 32

39 RISK FACTORS There is no assurance that our expansion plans will be successful As described under the Business Strategies and Future Plans section of this Prospectus, our growth strategies include expansion in Singapore by increasing our dental healthcare services and expanding into overseas markets such as the PRC. We also intend to undertake the distribution of dental products and equipment sourced from Europe, PRC and USA, which will be supplied mainly to dental clinics including those within our Group. These expansion plans will require substantial capital expenditure and financial resources. The success of our expansion plans depends on many factors, some of which are not within our control. In the event that we are not able to achieve a sufficient level of revenue or manage our costs effectively or the commencement of these planned expansion are delayed, our future financial performance and position will be adversely affected. There are risks inherent in doing business overseas. These risks include unexpected changes in healthcare regulations, difficulties in staffing and managing foreign operations, social and political instabilities, potentially adverse tax consequences, legal uncertainties regarding liabilities and enforcements, reduced protection for intellectual property rights in some countries, tariffs and other trade barriers, variable and unexpected changes in local laws and barriers to the repatriation of capital or profits. Any of the above factors could adversely affect our overseas operations and financial performance. Our general insurance coverage may not be adequate We maintain general insurance policies where practicable covering both our assets and employees in line with general business practices in the dental healthcare industry, with policy specifications and insured limits which we believe are reasonable. However, in the event that the amount of such claims exceed the coverage of the general insurance policies which we have taken up, we may be liable for shortfalls in the amounts claimed. If such events were to occur, our business, financial performance and financial position will be materially and adversely affected. Please refer to the Insurance Coverage section of this Prospectus for more details. RISKS RELATING TO INVESTMENT IN OUR SHARES Our Controlling Shareholder will retain significant control over our Group after the Placement which will allow them to influence the outcome of matters submitted to Shareholders for approval Upon the completion of the Placement, our Controlling Shareholder, Quan Min, will beneficially own in aggregate approximately 71.5% of our Company s post-placement share capital. As a result, our Controlling Shareholder will be able to exercise significant influence over matters requiring Shareholders approval, including the election of directors and the approval of significant corporate transactions. Our Controlling Shareholder will also have veto power with respect to any Shareholders action or approval requiring a majority vote except where they are required by the rules of the SGX-ST or the Listing Manual to abstain from voting. Such concentration of ownership may also have the effect of delaying, preventing or deterring a change in control of our Group which may not benefit Shareholders. Future sale of our Shares could adversely affect our Share price Any future sale or availability of our Shares can have a downward pressure on our Share price. The sale of a significant amount of Shares in the public market after the Placement, or the perception that such sales may occur, could adversely affect the market price of our Shares. These factors also affect our ability to sell additional equity securities. Except as otherwise described in the Moratorium section of this Prospectus, there will be no restrictions imposed on our existing Shareholders to dispose of their shareholdings in our Company. 33

40 RISK FACTORS Our Share price may fluctuate following the Placement The market price of our Shares may fluctuate significantly and rapidly in response to, inter alia, the following factors, some of which are beyond our control:- (a) (b) (c) (d) (e) (f) (g) (h) (i) variations in our operating results; changes in securities analysts recommendations, perceptions or estimates of our financial performance; changes in market valuations and share prices of companies with similar businesses to our Company that are/may be listed in Singapore; announcements by us of significant acquisitions, strategic alliances or joint ventures; fluctuations in stock market prices and volume; our involvement in material litigation; additions or departures of key personnel; success or failure of our management in implementing business and growth strategies; and changes in conditions affecting the industry, the general economic conditions or stock market sentiments or other events or factors. There is no prior market for our Shares and the Placement may not result in an active or liquid market for our Shares Prior to this Placement, there has been no public market for our Shares. The SGX-ST has approved our application to list our Shares on the SGX-ST. However, we cannot assure you that an active public market will develop or be sustained after the Placement. Active and liquid trading markets generally result in more efficient execution of buy and sell orders for investors. Liquidity of a securities market is often a function of the volume of the underlying shares that are publicly held by unrelated parties. New investors will suffer immediate dilution in NTA per Share Our Issue Price is higher than our Adjusted NTA per Share (adjusted for the net proceeds from the Placement). Investors who subscribe for the New Shares will therefore experience immediate dilution in the value of their Shares (please refer to the Dilution section of this Prospectus for more details). Further, if we were to raise funds in the future by way of placement of Shares, rights issues or other equity-linked securities, and if any Shareholders are unable or unwilling to participate in such fund raising, such Shareholders will suffer dilution in their shareholdings in our Company. Negative publicity, including those relating to any of our Directors, Substantial Shareholder, Principal Shareholders and Executive Officers, may adversely affect our Share Price Any negative publicity or announcement relating to any of our Directors, Substantial Shareholder, Principal Shareholders and Executive Officers may adversely affect the public s perception of our Group, whether or not this is justifiable. Such negative publicity or announcement may include, amongst other things, involvement in insolvency proceedings, failed attempts in takeovers and joint ventures. 34

41 ISSUE STATISTICS ISSUE PRICE 27 cents NTA The NTA per Share based on the unaudited combined interim balance sheet of our Group as at 30 June 2009 adjusted for the interim tax exempt (one-tier) dividends amounting to $1.9 million paid in August 2009 ( Adjusted NTA ):- (a) (b) before adjusting for the estimated net proceeds of the Placement and based on the pre-placement share capital of 200,000,000 Shares after adjusting for the estimated net proceeds of the Placement and based on the post-placement share capital of 274,075,000 Shares 1.6 cents 7.7 cents Premium of Issue Price over the Adjusted NTA per Share based on the unaudited combined interim balance sheet of our Group as at 30 June 2009:- (a) (b) before adjusting for the estimated net proceeds of the Placement and based on the pre-placement share capital of 200,000,000 Shares after adjusting for the estimated net proceeds of the Placement and based on the post-placement share capital of 274,075,000 Shares 1,587.5% 250.6% EPS Historical EPS based on the audited combined financial results of our Group for FY2008 (adjusted to exclude the professional fees and expenses in relation to the Placement amounting to approximately $649,000 incurred in FY2008) and the pre- Placement share capital of 200,000,000 Shares Historical EPS based on the audited combined financial results of our Group for FY2008 (adjusted to exclude the professional fees and expenses in relation to the Placement amounting to approximately $649,000 incurred in FY2008) and the pre-placement share capital of 200,000,000 Shares, assuming that the Service Agreements had been in place from the beginning of FY cents 2.2 cents PER Historical PER based on the historical EPS for FY2008 Historical PER based on the historical EPS for FY2008, assuming that the Service Agreements had been in place from the beginning of FY times 12.3 times Net Cash Flow from Operations (1) Historical net cash flow from operations per Share for FY2008 based on the pre- Placement share capital of 200,000,000 Shares Historical net cash flow from operations per Share for FY2008 based on the pre- Placement share capital of 200,000,000 Shares, assuming that the Service Agreements had been in place from the beginning of FY cents 2.4 cents 35

42 ISSUE STATISTICS Price to Net Cash Flow from Operations Ratio Issue Price to historical net cash flow from operations per Share for FY2008 Issue Price to historical net cash flow from operations per Share for FY2008, assuming that the Service Agreements had been in place from the beginning of FY times 11.3 times Market Capitalisation Market capitalisation based on the Issue Price and the post-placement share capital of 274,075,000 Shares $74.0 million Note:- (1) Net cash flow from operations is defined as profit attributable to equity holders of parent, net of tax (adjusted to exclude the professional fees and expenses in relation to the Placement amounting to approximately $649,000 incurred in FY2008) with depreciation expenses added back. 36

43 DILUTION Dilution is the amount by which the Issue Price to be paid by the applicants for our New Shares in the Placement ( New Investors ) exceeds the NTA per Share immediately after the Placement. Our Adjusted NTA per Share (as defined in the Issue Statistics section of this Prospectus) as at 30 June 2009 before adjusting for the estimated net proceeds from the Placement and based on the pre-placement share capital of 200,000,000 Shares, was 1.6 cents. Cents Issue Price 27.0 Adjusted NTA per Share as at 30 June 2009 before the Placement 1.6 Increase in the Adjusted NTA per Share attributable to existing Shareholders 6.1 Adjusted NTA per Share after the Placement (1) 7.7 Dilution in the Adjusted NTA per Share to New Investors 19.3 Pursuant to the Placement in respect of 74,075,000 New Shares at the Issue Price, our Adjusted NTA per Share after adjusting for the estimated net proceeds from the Placement and based on the post-placement share capital of 274,075,000 Shares, would have been 7.7 cents. This represents an immediate increase in the Adjusted NTA per Share of 6.1 cents to our existing Shareholders and an immediate dilution in the Adjusted NTA per Share of 19.3 cents to our New Investors. The following table illustrates such dilution on a per Share basis:- Note:- (1) The above computed NTA does not take into account our actual financial performance from 1 July 2009 up to the Latest Practicable Date. Depending on our actual financial results, our NTA per Share may be higher or lower than the above computed NTA. Director Total Average effective cost Number of Shares consideration per Share acquired ($) (cents) Dr Ng Chin Siau 4,000,046 62, Substantial Shareholder Quan Min (1) 195,999,954 3,060, New Investors 74,075,000 20,000, The following table shows the average effective cost per Share paid by Dr Ng Chin Siau and Quan Min for Shares acquired by them during the period of three years prior to the date of lodgement of this Prospectus and by our New Investors pursuant to the Placement:- Note:- (1) Quan Min is an investment holding company incorporated in Singapore. Its shareholders are Dr Ng Chin Siau (44.00%), Dr Ng Jet Wei (13.93%), Dr Chong Kai Chuan (8.95%), Dr Wong Dai Chong (8.84%), Dr Yap Kin Wai (4.74%), Dr Kuan Chee Keong (4.53%), Dr Ang Hwee Quan Susan (3.61%), Dr Ang Ee Peng Raymond (2.52%), Dr Chong Ling Sharon (2.12%), Dr Mohanarajah A/L S. Senathirajah (1.91%), Dr Loh Meow Song (1.67%), Dr Ng Cheng Huat (1.43%), Dr Chan Pui Kee (0.56%), Dr Dalila Hashim (0.47%), Dr Tan Shally (0.20%), Dr Tai Mie Yen (0.18%), Dr Goh Seng Teik (0.17%) and Dr Yeo Shulin Serene (0.17%). Dr Wong Dai Chong and Dr Dalila Hashim are husband and wife. The Shares were acquired via a share swap pursuant to the Restructuring Exercise. Please refer to the Restructuring Exercise section of this Prospectus for further details. 37

44 CAPITALISATION AND INDEBTEDNESS The following table shows the cash and cash equivalents as well as capitalisation and indebtedness of our Group as at 31 August 2009:- (a) (b) based on our management accounts as at 31 August 2009; and as adjusted for the net proceeds from the Placement. You should read this table in conjunction with the Independent Auditors Report on the Audited Combined Financial Statements of Q & M Dental Group (Singapore) Limited and the Independent Auditors Review Report on the Unaudited Combined Interim Financial Statements of Q & M Dental Group (Singapore) Limited set out in Appendices A and B, respectively of this Prospectus and the Management s Discussion and Analysis of Results of Operations and Financial Condition section of this Prospectus. () As at 31 August 2009 As adjusted for the net proceeds from the Placement Cash and cash equivalents 1,449 19,349 Indebtedness Current - secured and guaranteed secured and non-guaranteed - unsecured and guaranteed - unsecured and non-guaranteed Non-current - secured and guaranteed - secured and non-guaranteed - unsecured and guaranteed - unsecured and non-guaranteed Total indebtedness Total shareholders equity 3,977 22,603 Total capitalisation and indebtedness 3,998 22,624 There were no material changes in our total capitalisation and indebtedness, save for the scheduled monthly repayments on our finance leases and changes in our retained earnings arising from the day-today operations in the ordinary course of our business from 1 September 2009 to the Latest Practicable Date. Borrowings As at 30 June 2009, we do not have any borrowings from financial institutions save for finance leases amounting to approximately $24,000. As at the Latest Practicable Date, we have taken a term loan from United Overseas Bank Limited to finance the addition and alteration works to be carried out at our dental centre at 180 Kitchener Road #B1-13/14 City Square Mall Singapore The letter of offer from United Overseas Bank Limited was accepted on 28 September The amount of financing obtained was $0.6 million for a term of 24 months commencing 1 October 2009 at a fixed interest rate of 5.0% per annum. The securities provided for this term loan are (i) a joint and several guarantee by our Executive Directors, namely Dr Ng Chin Siau and Dr Ng Jet Wei and (ii) a corporate guarantee by our Company. Our Company proposes to use part of the proceeds from the Placement to repay this term loan in full (as described in the Use of Proceeds from the Placement and Expenses Incurred and Business Strategies and Future Plans sections of this Prospectus). 38

45 CAPITALISATION AND INDEBTEDNESS To the best of our Directors knowledge, we are not in breach of any of the terms and conditions or covenants associated with any credit arrangement or bank loan which could materially affect our financial position and results or business operations, or the investments of our Shareholders. Please refer to the Interested Person Transactions section of this Prospectus for further details of the guarantees provided by our Executive Directors, Executive Officers and their Associates. 39

46 DIVIDEND POLICY Certain of our subsidiaries had collectively declared and paid tax exempt (one-tier) dividends amounting to $2.9 million, $3.8 million and $5.3 million in FY2006, FY2007 and FY2008 respectively. Between 1 January 2009 and 31 August 2009, our Company declared and paid interim tax exempt (one-tier) dividends amounting to $3.4 million. Save as disclosed above, no dividends have been paid or proposed by our Company or our subsidiaries during the periods under review. We currently do not have a formal dividend policy. We may, by ordinary resolution of our Shareholders, declare dividends at a general meeting, but we may not pay dividends in excess of the amount recommended by our Directors. The declaration and payment of dividends will be determined at the sole discretion of our Directors subject to the approval of our Shareholders. Our Directors may also declare an interim dividend without the approval of our Shareholders. In making their recommendations, our Directors will consider, inter alia, our retained earnings and expected future earnings, operations, cash flows, capital requirements and general financing conditions, as well as general business conditions and other factors which our Directors may determine appropriate. Future dividends will be paid by us as and when approved by our Shareholders and Directors. Information relating to taxes payable on dividends is set out under Taxation in Appendix C of this Prospectus. The amount of dividends declared and paid by us should not be taken as an indication of the dividends payable in the future. No inference should or can be made from any of the foregoing statements as to our actual future profitability or our ability to pay dividends in any of the periods discussed. Our Directors intend to recommend and distribute dividends as follows:- (a) (b) for FY2009, not less than 50% of our net profit attributable to Shareholders earned for the period from 1 July 2009 to 31 December 2009; and for FY2010, not less than 50% of our net profit attributable to Shareholders earned in that financial year, subject to the factors outlined above. However, investors should note that the intention to recommend the aforesaid dividends should not be treated as a legal obligation on our Company nor should it be treated as an indication of our Company s future dividend policy. There can be no assurance that dividends will be paid in the future or of the amount or timing of any dividends that will be paid in the future. 40

47 SELECTED COMBINED FINANCIAL INFORMATION The following selected financial information should be read in conjunction with the full text of this Prospectus, including the Independent Auditors Report on the Audited Combined Financial Statements of Q & M Dental Group (Singapore) Limited and the Independent Auditors Review Report on the Unaudited Combined Interim Financial Statements of Q & M Dental Group (Singapore) Limited set out in Appendices A and B, respectively of this Prospectus. Combined Operating Results of Our Group (1) Audited Adjusted (5) Unaudited () FY2006 FY2007 FY2008 FY2008 HY2008 HY2009 Revenue 24,368 26,443 29,601 29,601 13,897 14,033 Other items of income Other credits 172 Other items of expense Consumables and dental supplies used (1,925) (2,315) (2,489) (2,489) (1,077) (947) Employee benefits expense (14,547) (15,851) (17,541) (17,541) (8,398) (8,653) Depreciation expense (329) (350) (400) (400) (185) (272) Rental expense (2,233) (2,214) (2,490) (2,490) (1,195) (1,283) Finance costs (2) (3) (3) (2) (2) Professional fees and expenses in relation to the Placement (649) (263) (60) Other expenses (1,361) (1,470) (1,856) (1,856) (794) (865) Other charges (13) (4) (55) (55) (1) Profit before tax from continuing operations 3,960 4,237 4,118 4,767 1,983 2,122 Income tax expense (187) (112) (395) (395) (192) (186) Profit from continuing operations, net of tax 3,773 4,125 3,723 4,372 1,791 1,936 Profit attributable to equity holders of parent, net of tax 3,641 4,061 3,743 (4) 4,392 1,790 1,946 Profit/(loss) attributable to minority interest, net of tax (20) (20) 1 (10) 3,773 4,125 3,723 4,372 1,791 1,936 EPS (cents) (2) (4) EPS (fully diluted) (cents) (3) (4) Notes:- (1) Our combined operating results for the periods under review have been prepared on the basis that our Group had been in existence throughout the periods under review. (2) For comparative purposes, EPS for the periods under review have been computed based on the profit attributable to equity holders of parent, net of tax and our pre-placement share capital of 200,000,000 Shares. (3) For comparative purposes, EPS (fully diluted) for the periods under review have been computed based on the profit attributable to equity holders of parent, net of tax and our post-placement share capital of 274,075,000 Shares. (4) Had the Service Agreements been in place with effect from 1 January 2008, the profit attributable to equity holders of parent, net of tax for FY2008 would have been approximately $3,710,000, and the EPS and EPS (fully diluted) would remain as 1.9 cents and 1.4 cents respectively. (5) For illustrative purposes, adjusted to exclude the professional fees and expenses in relation to the Placement amounting to approximately $649,000 incurred in FY

48 SELECTED COMBINED FINANCIAL INFORMATION Audited Unaudited () As at 31 December 2008 As at 30 June 2009 ASSETS Non-current assets: Plant and equipment 2,633 2,527 Other receivables Total non-current assets 2,815 3,511 Current assets: Inventories Trade and other receivables 1,016 1,327 Other assets Cash and cash equivalents 4,260 2,976 Total current assets 5,555 4,636 Total assets 8,370 8,147 EQUITY AND LIABILITIES Equity: Share capital 3,123 3,123 Retained earnings 1,554 1,999 Equity, attributable to equity holders of the parent, total 4,677 5,122 Minority interest 13 3 Total equity 4,690 5,125 Non-current liabilities: Provisions Deferred tax liabilities Finance leases 9 Total non-current liabilities Current liabilities: Income tax payable Trade and other payables 3,058 2,455 Finance leases Total current liabilities 3,484 2,835 Total liabilities 3,680 3,022 Total equity and liabilities 8,370 8,147 NTA per Share (cents) (2) Notes:- (1) Our combined financial positions as at 31 December 2008 and 30 June 2009 have been prepared on the basis that our Group had been in existence on these dates. (2) The NTA per Share as at 31 December 2008 and 30 June 2009 have been computed based on our pre-placement share capital of 200,000,000 Shares. 42

49 MANAGEMENT S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION The following discussion of our results of operations and financial condition has been prepared by our management and should be read in conjunction with the Independent Auditors Report on the Audited Combined Financial Statements of Q & M Dental Group (Singapore) Limited and the Independent Auditors Review Report on the Unaudited Combined Interim Financial Statements of Q & M Dental Group (Singapore) Limited set out in Appendices A and B, respectively of this Prospectus. This discussion contains forward-looking statements that involve risks and uncertainties. Our actual results may differ significantly from those projected in the forward-looking statements. Factors that might cause future results to differ significantly from those projected in the forward-looking statements include, but are not limited to, those discussed below and elsewhere in this Prospectus, particularly in the Risk Factors section of this Prospectus. Under no circumstances should the inclusion of such forward-looking statements herein be regarded as a representation, warranty or prediction with respect to the accuracy of the underlying assumptions by our Company, the Manager, the Placement Agent or any other person. Investors are cautioned not to place undue reliance on these forward-looking statements that speak only as of the date hereof. Please refer to the Cautionary Note Regarding Forward-Looking Statements section of this Prospectus. Except as otherwise indicated, the following discussion is based on our audited combined financial statements. OVERVIEW We are Singapore s largest private dental healthcare group with 36 dental clinics and a mobile dental clinic with 105 dentists, nine oral health therapists and 302 dental surgery assistants as at the Latest Practicable Date. We have treated more than 300,000 patients island-wide between December 2005 and the Latest Practicable Date. Our dental healthcare services include general dental treatment, endodontics, orthodontics, periodontics, prosthodontics, paedodontics, oral surgery, dental implants and aesthetic dentistry. We have a dental laboratory which fabricates dental prosthesis such as crowns, bridges, dentures and retainers. Revenue Our revenue is derived from the provision of dental healthcare services to our patients in Singapore. Our source of revenue comprises fees mainly from (i) clinical consultation and treatment procedures and (ii) sale of medicine and oral care products. Revenue is recognised upon completion of services rendered and when risks and benefits of ownership of products have been transferred to our customers. The fees from dental healthcare services vary, depending on the length of consultation, type of medical tests, complexity of treatment procedures, costs of medicine and expertise of the individual dentists and oral health therapists. The major factors that affect our revenue include:- (a) (b) (c) (d) (e) our ability to retain our existing patients and/or gain new patients. The demand for our dental healthcare services is mainly influenced by quality services, price competitiveness and accessibility of dental clinics; our ability to remain competitive in the dental healthcare industry by offering quality dental healthcare services at competitive pricing and at easily accessible locations. This industry is highly fragmented and competitive; our ability to recruit and retain experienced and qualified dentists and oral health therapists who have the expertise to provide quality and effective dental healthcare services to meet our patients demands; significant changes in government policies or regulations; and general negative market sentiment or slowdown in the economy. 43

50 MANAGEMENT S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION Other Items of Income Other items of income comprise mainly job credits arising from the Jobs Credit Scheme introduced by the government in the Singapore Budget 2009 to encourage businesses to preserve jobs in the downturn. Other Items of Expense Other items of expense include consumables and dental supplies used, employee benefits expense, depreciation expense, rental expense, finance costs, professional fees and expenses in relation to the Placement, other expenses and other charges. Consumables and dental supplies used The main components of our consumables and dental supplies used are medicine (local anaesthetics), dental prosthesis (crowns, bridges and dentures), dental supplies (materials used in dental procedures namely impression materials, filling materials and cements), dental instruments (extraction forceps, injection needles, root canal files and orthodontic brackets) and consumables (facial masks, disposable gloves, dental bibs, plastic cups and gauze) for utilisation at our dental clinics and dental laboratory. We purchase these directly from our suppliers located predominantly in Singapore. We generally do not enter into long-term or exclusive supply agreements with our major suppliers. Consumables and dental supplies used accounted for 9.4%, 10.4%, 9.8% and 7.8% of other items of expense in FY2006, FY2007, FY2008 and HY2009 respectively. Employee benefits expense Employee benefits expense consists of (1) professional fees paid to dentists and oral health therapists; (2) directors fees; and (3) remuneration paid to dental surgery assistants, laboratory support staff, finance, administrative and marketing staff. Typically, dentists and oral health therapists are remunerated on a variable basis, which is dependent on the performance of the relevant dentists and oral health therapists. Remuneration is usually a percentage of the professional fees, net of GST, dental laboratory charges and sale of oral care products, which he or she generates. The remuneration paid to dental surgery assistants, laboratory support staff, finance, administrative and marketing staff includes salaries, allowances, bonuses, CPF contributions and staff welfare. Employee benefits expense accounted for 71.3%, 71.4%, 68.8% and 71.6% of other items of expense in FY2006, FY2007, FY2008 and HY2009 respectively. Depreciation expense Depreciation expense refers to depreciation charges on our dental equipment, furniture, fixtures and fittings. Depreciation expense accounted for 1.6% of our other items of expense in FY2006, FY2007 and FY2008. In HY2009, depreciation expense accounted for 2.3% of our other items of expense. Rental expense Rental expense relates to the rental charges incurred in connection with our dental clinics, dental laboratory and office. Rental expense accounted for 10.9%, 10.0%, 9.8% and 10.6% of other items of expense in FY2006, FY2007, FY2008 and HY2009 respectively. Finance costs Finance costs relate mainly to interests incurred on finance leases. Professional fees and expenses in relation to the Placement In FY2008 and HY2009, we incurred professional fees and expenses in relation to the Placement of approximately $649,000 and $60,000 respectively. 44

51 MANAGEMENT S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION Other expenses Other expenses include credit card administrative charges, electronic payment transaction charges, legal and professional fees, repair and maintenance of dental equipment, utilities charges, printing and stationery costs, advertising expenses, bank charges and telecommunication expenses. Other expenses accounted for 6.7%, 6.6%, 7.3% and 7.2% of other items of expense in FY2006, FY2007, FY2008 and HY2009 respectively. Other charges Other charges relate mainly to loss on disposal of plant and equipment. Income Tax Expense Our Company and subsidiaries are subject to income tax at the applicable statutory tax rates in Singapore. FY2006 FY2007 FY2008 HY2009 Income tax expense () Profit before tax from continuing operations () 3,960 4,237 4,118 2,122 Effective tax rate (income tax expense as a percentage of profit before tax from continuing operations) (%) During the periods under review, provisions for income tax were made on income derived from our operations in Singapore. The prevailing statutory tax rates in Singapore were 20.0% in FY2006, 18.0% in FY2007 and FY2008, and 17.0% in HY2009. In FY2006 and FY2007, our effective tax rates of 4.7% and 2.6% respectively were significantly lower than the prevailing statutory tax rate due mainly to tax exemptions granted from the corporatisation of our sole-proprietorships and partnerships from April 2005 under the Tax Exemption Scheme for New Start-up Companies (Enhanced). Tax exemption is granted on up to $100,000 of the normal chargeable income (excluding Singapore franked dividends) of a qualifying company, for any of the first three consecutive years of assessment. The first year of assessment refers to the basis period during which the company is incorporated. The effective tax rate for FY2007 of 2.6% is lower than the effective tax rate for FY2006 of 4.7% due mainly to the decrease in statutory tax rates from 20% in FY2006 to 18% in FY2007. In FY2008 and HY2009, our effective tax rates of 9.6% and 8.8% respectively were significantly lower than the prevailing statutory tax rate due mainly to partial tax exemptions granted under the Partial Tax Exemption (Enhanced) Scheme. The effective tax rates of 9.6% and 8.8% in FY2008 and HY2009 respectively were higher than the effective tax rate of 2.6% in FY2007 due mainly to a majority of the companies in our Group ceased to enjoy the full tax exemption of the first $100,000 of the normal chargeable income under the Tax Exemption Scheme for New Start-up Companies (Enhanced) as described above, and professional fees and expenses in relation to the Placement which are not deductible for tax purposes. Our Company and subsidiaries will continue to enjoy the tax exemptions granted under the Partial Tax Exemption (Enhanced) Scheme until further updates are announced in the next Singapore government budget. SEASONALITY Generally, our business is not subject to any significant seasonal fluctuations that will affect the demand for our dental healthcare services. However, our revenue is generally higher in December as our Directors believe that this was due mainly to the expiration of annual healthcare benefits by the end of the calendar year. 45

52 MANAGEMENT S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION INFLATION Over the periods under review, inflation did not have a material impact on our performance. REVIEW OF RESULTS OF OPERATIONS Our principal business is the provision of dental healthcare services to patients in Singapore for the periods under review. The breakdown of revenue by activities and geographical market is therefore not meaningful. This analysis, provided below, should be read in conjunction with the Independent Auditors Report on the Audited Combined Financial Statements of Q & M Dental Group (Singapore) Limited and the Independent Auditors Review Report on the Unaudited Combined Interim Financial Statements of Q & M Dental Group (Singapore) Limited set out in Appendices A and B, respectively of this Prospectus. FY2007 vs FY2006 Revenue Revenue increased by $2.0 million or 8.5%, from $24.4 million in FY2006 to $26.4 million in FY2007 due mainly to higher revenue from our existing dental clinics. In FY2007, we had approximately 92,000 new patients visiting our dental clinics which contributed to the overall increase in our revenue. Consumables and dental supplies used Consumables and dental supplies used increased by $0.4 million or 20.3%, from $1.9 million in FY2006 to $2.3 million in FY2007 or 7.9% and 8.8% of our revenue in FY2006 and FY2007 respectively in line with the increase in our revenue. Employee benefits expense Employee benefits expense increased by $1.3 million or 9.0%, from $14.5 million in FY2006 to $15.8 million in FY2007 due mainly to increase in (i) professional fees paid to dentists by $1.0 million, largely in line with higher revenue and (ii) salary increments to our dental surgery assistants, laboratory support staff, finance, administrative and marketing staff by $0.2 million. Depreciation expense Depreciation expense remained largely unchanged at $0.3 million in FY2006 and FY2007. Rental expense Rental expense remained largely unchanged at $2.2 million in FY2006 and FY2007. Finance costs In FY2007, we incurred finance costs of approximately $2,000 arising from the interests on the lease of our dental equipment, furniture, fixtures and fittings. Other expenses Other expenses increased by $0.1 million or 8.0%, from $1.4 million in FY2006 to $1.5 million in FY2007 due mainly to increase in (i) credit card administrative charges by approximately $58,000 to support the increase in our clinical activities which generated revenue and (ii) printing and stationery costs by approximately $56,000 for promotional materials to increase awareness towards our Q&M brand as well as to educate patients on dental healthcare in FY2007. Profit before tax from continuing operations Our profit before tax from continuing operations increased by $0.3 million or 7.0%, from $3.9 million in FY2006 to $4.2 million in FY2007 due mainly to higher revenue, partly offset by higher expenses, comprising mainly employee benefits expense and consumables and dental supplies used. 46

53 MANAGEMENT S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION FY2008 vs FY2007 Revenue Revenue increased by $3.2 million or 11.9%, from $26.4 million in FY2007 to $29.6 million in FY2008. This was due mainly to higher revenue from our existing dental clinics, the addition of three dental clinics at Killiney Road, Boon Lay MRT and Gombak MRT. Existing dental clinics contributed to $1.7 million of the increase in revenue while the three additional dental clinics accounted for the remainder. Consumables and dental supplies used Consumables and dental supplies used increased by $0.2 million or 7.5%, from $2.3 million in FY2007 to $2.5 million in FY2008 or 8.8% and 8.4% of our revenue in FY2007 and FY2008 respectively in line with the increase in our revenue. Employee benefits expense Employee benefits expense increased by $1.7 million or 10.7%, from $15.8 million in FY2007 to $17.5 million in FY2008 due mainly to increase in (i) professional fees paid to dentists and oral health therapists by $1.0 million, largely in line with higher revenue; (ii) directors fees of $0.1 million; and (iii) remuneration paid to our dental surgery assistants, laboratory support staff, finance, administrative and marketing staff by $0.5 million as a result of salary increments and increase of 28 dental surgery assistants employed to support the increase in our business activities. Depreciation expense Depreciation expense increased by $0.1 million or 14.3%, from $0.3 million in FY2007 to $0.4 million in FY2008 due mainly to the additional dental equipment purchased in FY2008 and contribution from the addition of three dental clinics at Killiney Road, Boon Lay MRT and Gombak MRT. Rental expense Rental expense increased by $0.3 million or 12.5%, from $2.2 million in FY2007 to $2.5 million in FY2008 due mainly to overall increase in rental rates as well as additional rental expenses incurred as a result of our three new dental clinics in Killiney Road, Boon Lay MRT and Gombak MRT. Finance costs In FY2008, we incurred finance costs amounting to approximately $3,000 arising from the interests on the lease of our dental equipment, furniture, fixtures and fittings. Professional fees and expenses in relation to the Placement In FY2008, we incurred professional fees and expenses in relation to the Placement of approximately $649,000. Other expenses Other expenses increased by $0.4 million or 26.3%, from $1.5 million in FY2007 to $1.9 million in FY2008 due mainly to increase in (i) legal and professional fees by $0.2 million mainly from increase in audit fees; (ii) electronic payment transaction charges by $0.1 million to support the increase in our clinical activities which generated revenue; and (iii) utilities expenses by $0.1 million as a result of the addition of three dental clinics at Killiney Road, Boon Lay MRT and Gombak MRT, as well as increase in utilities charges by Singapore Power. Profit before tax from continuing operations Our profit before tax from continuing operations decreased by $0.1 million or 2.8%, from $4.2 million in FY2007 to $4.1 million in FY2008 due mainly to higher expenses, comprising mainly employee benefits expense, rental expense and professional fees and expenses in relation to the Placement, partly offset by higher revenue. 47

54 MANAGEMENT S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION HY2009 vs HY2008 Revenue Revenue increased by $0.1 million or 1.0%, from $13.9 million in HY2008 to $14.0 million in HY2009 due mainly to the addition of one dental clinic at Gombak MRT in September Revenue from our existing dental clinics remained largely unchanged due to the current global economic slowdown which affected growth in demand for our dental healthcare services. Other credits In HY2009, there were job credits amounting to $0.2 million arising from the Jobs Credit Scheme introduced by the government in the Singapore Budget 2009 to encourage businesses to preserve jobs in the downturn. Consumables and dental supplies used Consumables and dental supplies used decreased by approximately $130,000 or 12.1%, from $1.1 million in HY2008 to $0.9 million in HY2009 or 7.7% and 6.7% of our revenue in HY2008 and HY2009 respectively as we implemented tighter procurement control and management that involved the implementation of ISO processes for such purchases. Employee benefits expense Employee benefits expense increased by $0.3 million or 3.0%, from $8.4 million in HY2008 to $8.7 million in HY2009 due mainly to general salary increments paid to our staff and the increased headcount employed to support the future growth of our business. Depreciation expense Depreciation expense increased by $0.1 million or 47.0%, from $0.2 million in HY2008 to $0.3 million in HY2009 due mainly to the additional dental equipment, furniture, fixtures and fittings purchased in HY2009. Rental expense Rental expense increased by $0.1 million or 7.4%, from $1.2 million in HY2008 to $1.3 million in HY2009 due mainly to overall increase in rental rates. Finance costs In HY2008 and HY2009, we incurred finance costs amounting to approximately $2,000 in both periods arising from the interests on the lease of our dental equipment, furniture, fixtures and fittings. Professional fees and expenses in relation to the Placement In HY2008 and HY2009, we incurred professional fees and expenses in relation to the Placement of approximately $263,000 and $60,000 respectively. The professional fees and expenses were in relation to the preparatory work for this Placement which started at the end of Professional fees and expenses were higher in HY2008 due mainly to the progressive billings for such professional fees and expenses, the bulk of which were incurred in HY2008. Other expenses Other expenses increased by approximately $71,000 or 8.9%, from $0.8 million in HY2008 to $0.9 million in HY2009 due mainly to the addition of one dental clinic at Gombak MRT in September Profit before tax from continuing operations Our profit before tax from continuing operations increased by $0.1 million or 7.0%, from $2.0 million in HY2008 to $2.1 million in HY2009 due mainly to higher revenue and other credits, partly offset by higher expenses, comprising mainly employee benefits expense. 48

55 MANAGEMENT S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION REVIEW OF FINANCIAL POSITION Non-Current Assets Non-current assets comprise (i) plant and equipment (namely dental equipment, furniture, fixtures and fittings) and (ii) other receivables (being unsecured loans to certain dentists of our Group). As at 31 December 2008, the net book value of our plant and equipment amounted to $2.6 million or 31.5% of our total assets, comprising dental equipment of $1.9 million and furniture, fixtures and fittings of $0.7 million. Other receivables amounted to $0.2 million. As at 30 June 2009, the net book value of our plant and equipment amounted to $2.5 million or 31.0% of our total assets, comprising dental equipment of $1.5 million and furniture, fixtures and fittings of $1.0 million. Other receivables amounted to $1.0 million. The increase in non-current assets by $0.7 million was due mainly to the increase in other receivables as a result of the additional unsecured loans provided to certain dentists of our Group. Current Assets Current assets comprise inventories, trade and other receivables, other assets (namely professional fees and expenses in relation to the Placement, and prepayments for rental) and cash and cash equivalents. Other receivables comprise mainly deposits to secure services (mainly rental deposits), sign-on bonuses provided to our dentists and current portion of the unsecured loans to certain dentists of our Group. As at 31 December 2008, current assets amounted to $5.6 million or 66.4% of our total assets. Cash and cash equivalents were the largest component of our current assets, accounting for 76.7% of our current assets. Trade and other receivables accounted for 18.3% of our current assets. The remaining balance of current assets comprised inventories and other assets of approximately $69,000 and $0.2 million respectively. As at 30 June 2009, current assets amounted to $4.6 million or 56.9% of our total assets. Cash and cash equivalents were the largest component of our current assets, accounting for 64.2% of our current assets. Trade and other receivables accounted for 28.6% of our current assets. The remaining balance of current assets comprised inventories and other assets of approximately $80,000 and $0.3 million respectively. The decrease in current assets by $1.0 million was due mainly to the additional unsecured loans provided to certain dentists of our Group which in turn reduced our cash and cash equivalents. Non-Current Liabilities Non-current liabilities comprise provisions, deferred tax liabilities and finance leases. As at 31 December 2008, our non-current liabilities amounted to $0.2 million or 5.3% of our total liabilities. This comprised provision for reinstatement of leased premises (a provision based on estimated costs to be incurred in the event that we are required by the landlords to reinstate the leased premises to their respective original state and condition) of $0.2 million, finance leases of approximately $9,000 for dental equipment, furniture, fixtures and fittings purchased in FY2007 and deferred tax liabilities of approximately $26,000. As at 30 June 2009, our non-current liabilities amounted to $0.2 million or 6.2% of our total liabilities. This comprised provision for reinstatement of leased premises of $0.2 million and deferred tax liabilities of approximately $26,

56 MANAGEMENT S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION Current Liabilities Current liabilities comprise income tax payable, trade and other payables and current portion of finance leases. As at 31 December 2008, current liabilities amounted to $3.5 million or 94.7% of our total liabilities. Trade and other payables accounted for 87.8% of our current liabilities. Trade payables of $2.3 million related to purchase of consumables and dental supplies, and accrued liabilities. Other payables of $0.7 million comprised mainly of outstanding payments to suppliers for dental equipment purchased in FY2008 and deposits received from the sub-letting of our premises. The remaining current liabilities were made up of income tax payable of $0.4 million and current portion of finance leases of approximately $31,000. As at 30 June 2009, current liabilities amounted to $2.8 million or 93.8% of our total liabilities. Trade and other payables accounted for 86.6% of our current liabilities. Trade payables of $2.2 million related to purchase of consumables and dental supplies, and accrued liabilities. Other payables of $0.3 million comprised mainly owing to third parties and deposits received from the sub-letting of our premises. The remaining current liabilities were made up of income tax payable of $0.4 million and current portion of finance leases of approximately $24,000. The decrease in current liabilities by $0.7 million was due mainly to the repayments to suppliers for dental equipment purchased in FY2008. Shareholders Equity As at 31 December 2008 and 30 June 2009, shareholders equity amounted to $4.7 million and $5.1 million respectively. LIQUIDITY AND CAPITAL RESOURCES We financed our growth and operations through a combination of shareholders equity (including retained earnings), net cash generated from operating activities and indebtedness from financial institutions. Our principal uses of cash have been for working capital requirements and capital expenditures. As at 30 June 2009, our shareholders equity amounted to $5.1 million and indebtedness to financial institutions amounted to approximately $24,000 (mainly finance leases). Our gearing ratio (defined as the sum of indebtedness to financial institutions divided by shareholders equity) was times. Our net current assets amounted to $1.8 million and our working capital ratio (defined as current assets divided by current liabilities) was 1.6 times. As at 30 June 2009, we had an aggregate net cash surplus position of $3.0 million and no banking facilities. As at the Latest Practicable Date, we had an aggregate net cash surplus position of $1.8 million and term loan facility of $0.6 million, of which $0.5 million remained outstanding. The term loan was used in connection with the addition and alteration works to be carried out at our dental centre at 180 Kitchener Road #B1-13/14 City Square Mall Singapore The interest rate is fixed at 5.0% per annum and the tenure of the term loan is for 24 months commencing 1 October Our Directors are of the view that with the cash generated from operating activities, together with cash and cash equivalents and credit facilities from financial institutions, we will have sufficient funds to meet our present working capital requirements. We set out below a summary of our combined statements of cash flows for the periods under review. The following net cash flow summary should be read in conjunction with the full text of this Prospectus, including the Independent Auditors Report on the Audited Combined Financial Statements of Q & M Dental Group (Singapore) Limited and the Independent Auditors Review Report on the Unaudited Combined Interim Financial Statements of Q & M Dental Group (Singapore) Limited set out in Appendices A and B, respectively of this Prospectus. 50

57 MANAGEMENT S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION Audited Audited Audited Unaudited () FY2006 FY2007 FY2008 HY2009 Net cash generated from operating activities 3,439 5,138 4, Net cash used in investing activities (191) (262) (1,249) (167) Net cash used in financing activities (2,722) (2,944) (5,683) (1,519) Net increase/(decrease) in cash and cash equivalents 526 1,932 (2,443) (1,284) Cash and cash equivalents at beginning of financial year/ period 4,245 4,771 6,703 4,260 Cash and cash equivalents at end of financial year/ period 4,771 6,703 4,260 2,976 FY2006 In FY2006, we generated net cash from operating activities before changes in working capital of $4.3 million. Net cash used in working capital amounted to $0.8 million. This was due mainly to lower trade and other payables by $0.5 million and an increase in trade and other receivables by $0.4 million in line with our business activities. The above decrease in working capital was partly offset by a reduction in other assets by $0.1 million. We paid income tax of approximately $92,000 in FY2006. The net cash generated from operating activities amounted to $3.4 million. Net cash used in investing activities of $0.2 million was mainly for purchase of dental equipment, furniture, fixtures and fittings. Net cash used in financing activities of $2.7 million was due mainly to dividends paid of $2.9 million, partially offset by proceeds from the issue of new shares of $0.2 million. As a result of the above, there was a net increase of $0.5 million in our cash and cash equivalents, from $4.3 million as at 1 January 2006 to $4.8 million as at 31 December FY2007 In FY2007, we generated net cash from operating activities before changes in working capital of $4.6 million. Net cash generated from working capital amounted to $0.7 million. This was due mainly to an increase in trade and other payables by $0.8 million and decrease in trade and other receivables by $0.1 million, partly offset by an increase in other receivables (non-current) by $0.2 million in line with our business activities. We paid income tax of $0.2 million in FY2007. The net cash generated from operating activities amounted to $5.1 million. Net cash used in investing activities of $0.3 million was mainly for purchase of dental equipment, furniture, fixtures and fittings. Net cash used in financing activities of $2.9 million was due mainly to dividends paid of $3.8 million, partially offset by proceeds from the issue of new shares of $0.9 million. As a result of the above, there was a net increase of $1.9 million in our cash and cash equivalents, from $4.8 million as at 1 January 2007 to $6.7 million as at 31 December

58 MANAGEMENT S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION FY2008 In FY2008, we generated net cash from operating activities before changes in working capital of $4.6 million. Net cash generated from working capital amounted to approximately $14,000. This was due mainly to an increase in trade and other payables by $0.2 million, partly offset by an increase in other assets by $0.2 million. We paid income tax of $0.1 million in FY2008. The net cash generated from operating activities amounted to $4.5 million. Net cash used in investing activities of $1.2 million was mainly for purchase of dental equipment, furniture, fixtures and fittings. Net cash used in financing activities of $5.7 million was due mainly to dividends paid of $5.3 million and the effect of the restructuring exercise of $0.3 million. As a result of the above, there was a net decrease of $2.4 million in our cash and cash equivalents, from $6.7 million as at 1 January 2008 to $4.3 million as at 31 December HY2009 In HY2009, we generated net cash from operating activities before changes in working capital of $2.4 million. Net cash used in working capital amounted to $1.8 million. This was due mainly to lower trade and other payables by $0.6 million, an increase in other receivables (non-current) by $0.8 million, an increase in other assets by approximately $43,000, and an increase in trade and other receivables by $0.3 million in line with our business activities. We paid income tax of $0.2 million in HY2009. The net cash generated from operating activities amounted to $0.4 million. Net cash used in investing activities of $0.2 million was mainly for purchase of dental equipment, furniture, fixtures and fittings. Net cash used in financing activities of $1.5 million was due mainly to dividends paid of $1.5 million. As a result of the above, there was a net decrease of $1.3 million in our cash and cash equivalents, from $4.3 million as at 1 January 2009 to $3.0 million as at 30 June CAPITAL EXPENDITURES, DIVESTMENTS, COMMITMENTS AND CONTINGENT LIABILITIES Capital Expenditures and Divestments Capital expenditures and divestments made by us for the periods under review and for the period from 1 July 2009 to the Latest Practicable Date were as follows:- () FY2006 FY2007 FY2008 HY July 2009 to the Latest Practicable Date Expenditures Dental equipment Furniture, fixtures and fittings Total expenditures , Divestments Dental equipment Furniture, fixtures and fittings Total divestments The above capital expenditures were financed by finance leases and internally generated funds. 52

59 MANAGEMENT S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION Commitments Capital Commitments As at the Latest Practicable Date, we have material capital commitments as follows:- () Commitments to purchase plant and equipment 1,341 Commitments to purchase services (1) 894 () Not later than one year 3,139 Later than one year and not later than five years 5,500 Operating Lease Payment Commitments As at the Latest Practicable Date, we have operating lease payment as follows:- Note:- (1) These refer to sign-on bonuses for post-graduate students to join our Group upon graduation. Our operating lease commitments comprise rent payable by us for the leased properties as disclosed in the Properties and Fixed Assets section of this Prospectus. We intend to finance the above capital commitments and operating lease payment commitments by internally generated funds. Contingent Liabilities As at the Latest Practicable Date, our Company provided a corporate guarantee on a term loan of $0.6 million to United Overseas Bank Limited in connection with the addition and alteration works to be carried out at our dental centre at 180 Kitchener Road #B1-13/14 City Square Mall Singapore The tenure of the term loan is for 24 months commencing 1 October Our Company proposes to use part of the proceeds from the Placement to repay this term loan in full (as described in the Use of Proceeds from the Placement and Expenses Incurred and Business Strategies and Future Plans section of this Prospectus). Save as disclosed above, we do not have any material contingent liabilities as at the Latest Practicable Date. 8,639 FOREIGN EXCHANGE MANAGEMENT Accounting Treatment of Foreign Currencies The accounting records for the companies in our Group are maintained in Singapore dollars. In the event there are transactions in foreign currencies during the year, they will be recorded in Singapore dollars using exchange rates approximating those prevailing at the transaction dates. Foreign currency monetary assets and liabilities at the balance sheet date will be translated into Singapore dollars at exchange rates approximating those prevailing at that date. All resultant exchange differences will be dealt with through the income statements. 53

60 MANAGEMENT S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION Foreign Exchange Exposure Our revenue and purchases are primarily carried out in Singapore. We transact primarily in Singapore dollars. As such our foreign exchange exposure has been insignificant for the periods under review. At present, we do not have any formal policy for hedging against foreign exchange exposure. We have not in the past used any financial hedging instruments to manage our foreign exchange risks. As we intend to expand our operations in overseas markets, we will monitor our foreign exchange exposure and may employ hedging instruments to manage our foreign exchange exposure should the need arises. Prior to implementing any formal hedging policies, we will seek the approval of our Board on the policy and put in place adequate procedures which shall be reviewed and approved by our Audit Committee. Thereafter, all hedging transactions entered into by our Group will be in accordance with the set policies and procedures. 54

61 GENERAL INFORMATION ON OUR GROUP SHARE CAPITAL Our Company was incorporated in Singapore on 7 January 2008 under the Act as a private company limited by shares, under the name Q & M Dental Group (Singapore) Pte. Ltd.. On 9 October 2009, our Company changed its name to Q & M Dental Group (Singapore) Limited in connection with its conversion to a public company limited by shares. As at the date of incorporation, the issued and paid-up share capital of our Company was $1 comprising one Share. Pursuant to the completion of the Restructuring Exercise, our issued and paid-up share capital was increased by $3,123,368 comprising 39,042,100 Shares. At an extraordinary general meeting held on 6 October 2009, our Shareholders approved, inter alia, the following:- (a) (b) the conversion of our Company into a public company limited by shares and the consequential change of name to Q & M Dental Group (Singapore) Limited ; and the adoption of a new set of Articles of Association. At a subsequent extraordinary general meeting held on 14 October 2009, our Shareholders approved, inter alia, the following:- (a) the 39,042,101 Shares in the capital of our Company be subdivided into 200,000,000 Shares and be allotted in the following manner:- (i) Dr Ng Chin Siau 4,000,046 (ii) Quan Min 195,999,954 (b) (c) the issue of the New Shares pursuant to the Placement, which when allotted, issued and fully paid, will rank pari passu in all respects with the existing issued Shares; that authority be and is hereby given to our Directors pursuant to Section 161 of the Act and Rule 806 of the Listing Manual to:- (A) (i) issue shares in the capital of our Company (whether by way of rights, bonus or otherwise); and/or (ii) make or grant offers, agreements or options (collectively, Instruments ) that might or would require shares to be issued, including but not limited to the creation and issue of (as well as adjustments to) warrants, debentures or other instruments convertible into shares, at any time and upon such terms and conditions and for such purposes and to such persons as our Directors may in their absolute discretion deem fit; and (B) (notwithstanding the authority conferred by this resolution may have ceased to be in force) issue shares in pursuance of any Instrument made or granted by our Directors while this resolution was in force, (the Share Issue Mandate ) provided that:- (1) the aggregate number of shares to be issued pursuant to such authority (including shares to be issued in pursuance of Instruments made or granted pursuant to this authority) does not exceed 50% of the total number of issued shares (excluding treasury shares) in the capital of our Company (as calculated in accordance with subparagraph (3) below), of which the aggregate number of shares to be issued other than on a pro rata basis to our Shareholders (including shares to be issued in pursuance of Instruments made or granted pursuant to this 55

62 GENERAL INFORMATION ON OUR GROUP authority) does not exceed 20% of the total number of issued shares (excluding treasury shares) in the capital of our Company (as calculated in accordance with subparagraph (3) below); (2) the 50% limit in subparagraph (1) above may be increased to 100% for the issue of shares and/or Instruments by way of a renounceable rights issue where our Shareholders are entitled to participate in the same on a pro rata basis; (3) (subject to such manner of calculation as may be prescribed by the SGX-ST) for the purpose of determining the aggregate number of shares that may be issued under subparagraphs (1) and/or (2) above, the total number of issued shares (excluding treasury shares) in the capital of our Company shall be based on the total number of issued shares (excluding treasury shares) in the capital of our Company immediately following the close of the Placement, after adjusting for:- (i) (ii) new shares arising from the conversion or exercise of the Instruments or any convertible securities or share options or vesting of share awards which are outstanding or subsisting at the time this authority is passed; and any subsequent consolidation or subdivision of shares; (4) in exercising the authority conferred by this resolution, our Company shall comply with the provisions of the Listing Manual for the time being in force (unless such compliance has been waived by the SGX-ST) and the Articles of Association for the time being of our Company; and (5) (unless revoked or varied by our Company in general meeting) the authority conferred by this resolution shall continue in force until (i) the conclusion of the next annual general meeting of our Company or the date by which the next annual general meeting of our Company is required by law to be held, whichever is the earlier or (ii) in the case of shares to be issued in pursuance of the Instruments, made or granted pursuant to this resolution, until the issuance of such shares in accordance with the terms of the Instruments; and (d) that approval be given to our Directors to allot and issue shares (including shares to be issued in pursuance of the Instruments, made or granted pursuant to the Share Issue Mandate) other than on a pro rata basis at an issue price per share as our Directors may in their absolute discretion deem fit provided that such price shall not represent a discount of more than 20% to the weighted average price per share determined in accordance with the requirements of the SGX-ST. As at the date of this Prospectus, our Company has only one class of shares, being ordinary shares. The rights and privileges of our Shares are stated in our Articles of Association. There is no founder, management or deferred shares reserved for issuance for any purpose. No person has been, or is entitled to be, given an option to subscribe for or purchase any securities of our Company or any of our subsidiaries. As at the date of this Prospectus, the issued and paid-up share capital of our Company is $3,123,369 comprising 200,000,000 Shares. Upon the allotment and issue of the New Shares which are the subject of the Placement, the resultant issued and paid-up share capital of our Company will be $23,123,619 comprising 274,075,000 Shares. 56

63 GENERAL INFORMATION ON OUR GROUP Number of Shares Resultant issued and paid-up share capital ($) Issued and paid-up Shares as at our incorporation 1 1 Issue of Shares pursuant to the Restructuring Exercise 39,042,100 3,123,368 Pre-Placement issued and paid-up share capital 200,000,000 3,123,369 Issue of New Shares pursuant to the Placement 74,075,000 20,000,250 (1) Post-Placement issued and paid-up share capital 274,075,000 23,123,619 (2) Details of the changes in the issued and paid-up share capital of our Company since incorporation and immediately after the Placement are as follows:- Notes:- (1) Based on the gross proceeds from the issue of the New Shares pursuant to this Placement. (2) Based on the net proceeds from the issue of the New Shares pursuant to this Placement of approximately $17.9 million (after deducting estimated expenses in relation to the Placement as described in the Use of Proceeds from the Placement and Expenses Incurred section of this Prospectus), the post-placement issued and paid-up share capital would be $21.0 million. The shareholders equity of our Company as at incorporation, before and after adjustments to reflect the Restructuring Exercise and the Placement are set forth below:- As at date of incorporation After adjusting for the Restructuring Exercise After the Placement ($) ($) ($) Shareholders equity Share capital 1 3,123,369 23,123,619 Accumulated losses 234,000 Total shareholders equity 1 3,123,369 22,889,619 RESTRUCTURING EXERCISE We undertook the following Restructuring Exercise to streamline and rationalise our Group structure in connection with the Placement:- (a) Incorporation of our Company Our Company was incorporated on 7 January 2008 in Singapore in accordance with the Act as a private limited company with an issued and paid-up share capital of $1 comprising one ordinary Share held by Dr Ng Chin Siau (our CEO). The principal activities of our Company are that of a management and consultancy services and an investment holding. On 9 October 2009, our Company was converted into a public company limited by shares and changed its name to Q & M Dental Group (Singapore) Limited. (b) Acquisition of our dental clinics from the Vendors by way of shares Pursuant to a sale and purchase agreement dated 16 January 2008 (subsequently amended by a supplemental sale and purchase agreement dated 1 May 2008), our Company acquired from the Vendors their entire shareholdings in the following dental clinics, namely Q&M Admiralty, Q&M Ang Mo Kio, Q&M Boon Lay 1, Q&M Braddell, Q&M Bukit Batok 1, Q&M Bukit Batok 2, Q&M Bukit Panjang, Q&M Bukit Timah, Q&M Clementi 1, Q&M Clementi 2, Q&M Clementi 3, Q&M Elias Mall, Q&M Gombak 1, Q&M Gombak 2, Q&M Hougang 1, Q&M Hougang 2, Q&M Hougang 3, Q&M Jelapang, Q&M Jurong, Q&M Kallang, Q&M Khatib, Q&M Killiney, Q&M Old Airport Rd, Q&M Pasir Ris, Q&M Sembawang 1, Q&M Sembawang 2, Q&M Serangoon 1, Q&M Serangoon 2, Q&M 57

64 GENERAL INFORMATION ON OUR GROUP Serangoon 3, Q&M Serangoon 4, Q&M Sims Place, Q&M Tiong Bahru 1, Q&M Tiong Bahru 2, Q&M Toa Payoh 1, Q&M Toa Payoh 2, Q&M Toa Payoh 3, Q&M Toa Payoh 4 and Q&M Yishun (the 38 Dental Clinics ). The total consideration for the said acquisition of the 38 Dental Clinics was $3,123,368, which approximately equal to the unaudited NTA as at 29 February 2008 of the 38 Dental Clinics. The shares were alloted and issued to each of the Vendors based on the proportion of their respective shareholdings in Quan Min. The consideration was satisfied by the allotment and issue of 39,042,100 ordinary shares in the capital of our Company to each of the Vendors respectively. The Vendors nominated Quan Min to be allotted and issued their respective proportions of our Company s shares, resulting from the said acquisition. The shares were allotted on 16 June The said acquisition took effect on 16 January 2008 and was part of the restructuring exercise to consolidate the relevant businesses under one company, namely Q&M, so as to rationalise our Group structure. Quan Min is an investment holding company incorporated in Singapore. Its shareholders are Dr Ng Chin Siau (44.00%), Dr Ng Jet Wei (13.93%), Dr Chong Kai Chuan (8.95%), Dr Wong Dai Chong (8.84%), Dr Yap Kin Wai (4.74%), Dr Kuan Chee Keong (4.53%), Dr Ang Hwee Quan Susan (3.61%), Dr Ang Ee Peng Raymond (2.52%), Dr Chong Ling Sharon (2.12%), Dr Mohanarajah A/L S. Senathirajah (1.91%), Dr Loh Meow Song (1.67%), Dr Ng Cheng Huat (1.43%), Dr Chan Pui Kee (0.56%), Dr Dalila Hashim (0.47%), Dr Tan Shally (0.20%), Dr Tai Mie Yen (0.18%), Dr Goh Seng Teik (0.17%) and Dr Yeo Shulin Serene (0.17%). Dr Wong Dai Chong and Dr Dalila Hashim are husband and wife. (c) Acquisition of our dental clinics and dental support units from the Vendors by way of cash Pursuant to six sale and purchase agreements all dated 1 May 2008, our Company acquired from the Vendors the shareholdings in the following dental clinics and dental support units:- Dental clinic(s) Consideration ($) Basis of consideration Vendors Q&M Boon Lay 2 100,000 B ased on the unaudited NTA as at 31 December 2007 Q&M Gombak MRT 100,000 B ased on the unaudited NTA as at 31 December 2007 Q&M Marsiling 65,233 B ased on the unaudited NTA as at 31 December 2007 Dr Ng Chin Siau Dr Ng Chin Siau Dr Ng Chin Siau, Dr Ng Jet Wei, Dr Chong Kai Chuan, Dr Wong Dai Chong, Dr Yap Kin Wai, Dr Kuan Chee Keong, Dr Ang Hwee Quan Susan, Dr Ang Ee Peng Raymond, Dr Chong Ling Sharon, Dr Mohanarajah A.L S. Senathirajah, Dr Loh Meow Song, Dr Ng Seow Choon, Dr Ng Cheng Huat, Dr Chan Pui Kee and Dr Goh Seng Teik 58

65 GENERAL INFORMATION ON OUR GROUP Dental clinic(s) Consideration ($) Basis of consideration Vendors Q&M Tiong Bahru 3 52,064 B ased on the unaudited NTA as at 29 February 2008 and a premium of $20,000 Dr Ng Chin Siau, Dr Chan Pui Kee, Dr Chong Kai Chuan, Dr Chong Ling Sharon, Dr Ng Jet Wei, Dr Yap Kin Wai, Dr Wong Dai Chong, Dr Ang Hwee Quan Susan, Dr Kuan Chee Keong, Dr Loh Meow Song, Dr Goh Seng Teik, Dr Mohanarajah A.L S. Senathirajah, Dr Ng Seow Choon, Dr Ang Ee Peng Raymond and Dr Ng Cheng Huat Dental support unit(s) Consideration ($) Basis of consideration Vendors Q&M Lab (1) 57,134 B ased on the unaudited NTA as at 31 December 2007 Q&M Mgt 51,672 B ased on the unaudited NTA as at 31 December 2007 Dr Ng Chin Siau, Dr Ng Jet Wei, Dr Chong Kai Chuan, Dr Wong Dai Chong, Dr Yap Kin Wai, Dr Kuan Chee Keong, Dr Ang Hwee Quan Susan, Dr Ang Ee Peng Raymond, Dr Chong Ling Sharon, Dr Mohanarajah A.L S. Senathirajah, Dr Loh Meow Song, Dr Ng Seow Choon and Dr Chan Pui Kee Dr Ng Chin Siau, Dr Ng Jet Wei, Dr Chong Kai Chuan, Dr Wong Dai Chong, Dr Yap Kin Wai, Dr Kuan Chee Keong, Dr Ang Hwee Quan Susan, Dr Ang Ee Peng Raymond, Dr Chong Ling Sharon, Dr Mohanarajah A.L S. Senathirajah, Dr Loh Meow Song, Dr Ng Seow Choon and Dr Chan Pui Kee Note:- (1) Q&M Lab is owned by Q&M (76%) and Kadir Mualim (24%). Kadir Mualim is not related to any of our Directors, Controlling Shareholder or their Associates. As the shareholdings of the Vendors were already finalised following the completion of the acquisition of the 38 Dental Clinics from the Vendors in paragraph (b) above, the Vendors agreed to acquire these four additional dental clinics and two dental support units by way of cash instead of shares so as to maintain the agreed and finalised proportion of their respective shareholdings in Quan Min. The consideration was satisfied by cash payment by our Company to each of the Vendors respectively. The acquisition of the aforesaid dental clinics and dental support units was part of the restructuring exercise to consolidate the relevant businesses under one company, namely Q&M, so as to rationalise our Group structure. Upon the completion of the Restructuring Exercise as set out above, our dental clinics and dental support units became wholly-owned subsidiaries of our Company, except for Q&M Lab which we own 76%. 59

66 GENERAL INFORMATION ON OUR GROUP GROUP STRUCTURE Our Group structure as at the date of this Prospectus is as follows:- Q&M 100% 76% Q&M Lab Q&M Admiralty Q&M Bukit Panjang Q&M Elias Mall Q&M Jurong Q&M Pasir Ris Q&M Tiong Bahru 1 Q&M Ang Mo Kio Q&M Bukit Timah Q&M Gombak 1 Q&M Kallang Q&M Sembawang 1 Q&M Tiong Bahru 2 Q&M Boon Lay 1 Q&M Clementi 1 Q&M Gombak 2 Q&M Khatib Q&M Sembawang 2 Q&M Tiong Bahru 3 Q&M Boon Lay 2 Q&M Clementi 2 Q&M Gombak MRT Q&M Killiney Q&M Serangoon 1 Q&M Toa Payoh 1 Q&M Braddell Q&M Clementi 3 Q&M Hougang 1 Q&M Marsiling Q&M Serangoon 2 Q&M Toa Payoh 2 Q&M Bukit Batok 1 Q&M Dental Centre Q&M Hougang 2 Q&M Mgt Q&M Serangoon 3 Q&M Toa Payoh 3 Q&M Bukit Batok 2 Q&M Dental Group (China) Q&M Hougang 3 Q&M Mobile Dental Clinic Q&M Serangoon 4 Q&M Toa Payoh 4 Q&M Dental Institute Q&M Jelapang Q&M Old Airport Rd Q&M Sims Place Q&M Yishun 60

67 GENERAL INFORMATION ON OUR GROUP SUBSIDIARIES The details of our subsidiaries as at the date of this Prospectus are as follows:- Name Date / place of incorporation Principal place of business Issued and paid-up capital Effective interest held by our Company Q&M Admiralty 30 April 2005 / Singapore Q&M Ang Mo Kio 1 May 2005 / Singapore Q&M Boon Lay 1 3 May 2005 / Singapore Q&M Boon Lay 2 2 November 2007 / Singapore Q&M Braddell 3 May 2005 / Singapore Q&M Bukit Batok 1 14 April 2005 / Singapore Q&M Bukit Batok 2 (2) 20 April 2006 / Singapore Q&M Bukit Panjang 6 May 2005 / Singapore Q&M Bukit Timah 27 April 2005 / Singapore Q&M Clementi 1 18 April 2005 / Singapore Q&M Clementi 2 18 April 2005 / Singapore Q&M Clementi 3 (2) 17 April 2006 / Singapore Q&M Dental Centre 22 April 2008 / Singapore Q&M Dental Group (China) 6 May 2008 / Singapore Q&M Dental Institute 26 September 2008 / Singapore Q&M Elias Mall 30 August 2005 / Singapore Q&M Gombak 1 (2) 27 April 2005 / Singapore Q&M Gombak 2 3 May 2005 / Singapore Q&M Gombak MRT 4 September 2007 / Singapore Q&M Hougang 1 5 December 2005 / Singapore Q&M Hougang 2 28 April 2005 / Singapore Singapore $100, % Singapore $100, % Singapore $100, % Singapore $100, % Singapore $100, % Singapore $100, % Singapore $8 100% Singapore $100, % Singapore $100, % Singapore $100, % Singapore $100, % Singapore $80 100% Singapore $100, % Singapore $100, % Singapore $20, % Singapore $100, % Singapore $100, % Singapore $17, % Singapore $100, % Singapore $100, % Singapore $100, % 61

68 GENERAL INFORMATION ON OUR GROUP Name Date / place of incorporation Principal place of business Issued and paid-up capital Effective interest held by our Company Q&M Hougang 3 28 April 2005 / Singapore Q&M Jelapang 6 May 2005 / Singapore Q&M Jurong 29 April 2005 / Singapore Q&M Kallang 24 April 2005 / Singapore Q&M Khatib 25 April 2005 / Singapore Q&M Killiney 26 December 2007 / Singapore Q&M Lab 28 October 2004 / Singapore Q&M Marsiling 6 June 2006 / Singapore Q&M Mgt 10 April 2006 / Singapore Q&M Mobile Dental Clinic 6 May 2008 / Singapore Q&M Old Airport Rd 25 April 2005 / Singapore Q&M Pasir Ris 1 May 2005 / Singapore Q&M Sembawang 1 25 April 2005 / Singapore Q&M Sembawang 2 25 April 2005 / Singapore Q&M Serangoon 1 25 April 2005 / Singapore Q&M Serangoon 2 26 April 2005 / Singapore Q&M Serangoon 3 3 May 2005 / Singapore Q&M Serangoon 4 (2) 17 April 2006 / Singapore Q&M Sims Place 24 April 2005 / Singapore Q&M Tiong Bahru 1 1 May 2005 / Singapore Q&M Tiong Bahru 2 (2) 17 April 2006 / Singapore Q&M Tiong Bahru 3 25 May 2005 / Singapore Singapore $100, % Singapore $100, % Singapore $100, % Singapore $100, % Singapore $100, % Singapore $100, % Singapore $140,000 76% (1) Singapore $90, % Singapore $ % Singapore $50, % Singapore $100, % Singapore $100, % Singapore $100, % Singapore $100, % Singapore $100, % Singapore $100, % Singapore $100, % Singapore $80 100% Singapore $100, % Singapore $96, % Singapore $8, % Singapore $100, % 62

69 GENERAL INFORMATION ON OUR GROUP Name Date / place of incorporation Principal place of business Issued and paid-up capital Effective interest held by our Company Q&M Toa Payoh 1 20 April 2005 / Singapore Q&M Toa Payoh 2 20 April 2005 / Singapore Q&M Toa Payoh 3 (2) 17 April 2006 / Singapore Q&M Toa Payoh 4 (2) 17 April 2006 / Singapore Q&M Yishun 25 May 2005 / Singapore Singapore $100, % Singapore $100, % Singapore $ % Singapore $ % Singapore $100, % None of our subsidiaries is listed on any stock exchange. We do not have any associated companies. Notes:- (1) Q&M Lab is owned by Q&M (76%) and Kadir Mualim (24%). Kadir Mualim is not related to any of our Directors, Controlling Shareholder or their Associates. (2) These subsidiaries are dormant. SHAREHOLDERS Our Shareholders and their respective shareholdings immediately before and after the Placement are set out below:- Before the Placement After the Placement Direct Interest Deemed Interest Direct Interest Deemed Interest Number of Shares % Number of Shares % Number of Shares % Number of Shares % Directors Narayanan Sreenivasan Dr Ng Chin Siau 4,000, ,999, ,000, ,999, Dr Ng Jet Wei Dr Ang Ee Peng Raymond Dr Chong Kai Chuan Wong Hin Sun Eugene Ng Weng Sui Harry Substantial Shareholder Quan Min (1) 195,999, ,999, Public 74,075,000 (2) 27.0 Total 200,000, ,075,

70 GENERAL INFORMATION ON OUR GROUP Notes:- (1) Quan Min is an investment holding company incorporated in Singapore. Its shareholders are Dr Ng Chin Siau (44.00%), Dr Ng Jet Wei (13.93%), Dr Chong Kai Chuan (8.95%), Dr Wong Dai Chong (8.84%), Dr Yap Kin Wai (4.74%), Dr Kuan Chee Keong (4.53%), Dr Ang Hwee Quan Susan (3.61%), Dr Ang Ee Peng Raymond (2.52%), Dr Chong Ling Sharon (2.12%), Dr Mohanarajah A/L S. Senathirajah (1.91%), Dr Loh Meow Song (1.67%), Dr Ng Cheng Huat (1.43%), Dr Chan Pui Kee (0.56%), Dr Dalila Hashim (0.47%), Dr Tan Shally (0.20%), Dr Tai Mie Yen (0.18%), Dr Goh Seng Teik (0.17%) and Dr Yeo Shulin Serene (0.17%). Dr Wong Dai Chong and Dr Dalila Hashim are husband and wife. (2) Our Non-Executive Chairman, Narayanan Sreenivasan, and our Independent Directors, Wong Hin Sun Eugene and Ng Weng Sui Harry, intend to subscribe for 100,000 New Shares each in the Placement. Principal Shareholders Agreement in Relation to Shareholding in Quan Min On 16 January 2008, our Principal Shareholders entered into a shareholders agreement to record the financial, managerial, administrative and other arrangements between them (as amended by a supplemental shareholders agreement dated 6 August 2009), in relation to their shareholding in Quan Min. The shareholders agreement provided, inter alia, as follows:- No new shares in the capital of Quan Min will be issued without first offering such new shares to each of our Principal Shareholders in proportion to their existing shareholding in Quan Min; The voting rights and their entitlement to dividends are in proportion to their existing shareholding in Quan Min; Quan Min shall only hold shares in the capital of our Company; Each of our Principal Shareholders shall be entitled to appoint himself or herself as a director of Quan Min and our CEO shall be the chairman of the board of directors of Quan Min; Any (i) proposal to create, assume or incur, or become liable in respect of any indebtedness other than indebtedness in the course of business or make loans or provide guarantees, or extend or pledge credit to others, except in the course of business of Quan Min; (ii) increases in the issued and paid-up capital of Quan Min; (iii) changes in business of Quan Min; (iv) creation or issue of new shares or equity convertible loan; and/or (v) amalgamation or mergers of Quan Min, shall require the approval of 75% of the total shareholdings in Quan Min; Subject to the moratorium of the sale of shares (as described under the Moratorium section of this Prospectus), any sale of shares by our Principal Shareholders in Quan Min shall be made to the remaining Principal Shareholders unless our remaining Principal Shareholders do not exercise their rights to purchase. Principal Shareholders (other than the one(s) offering their shares for sale) holding at least 60% of the issued shares in Quan Min must approve the sale of such shares in Quan Min to a third party at terms no more favourable than what was offered to the other Principal Shareholders; Each of our Principal Shareholders shall enter into 10-year service contracts (commencing from January 2008) with our Company and that each of them shall not directly or indirectly have ownership or any interest in any dental practice in Singapore, or assist or otherwise promote, or be employed or provide professional services to any dental practice in Singapore as long as he remains a shareholder of Quan Min. Further, in the event of such termination during the initial 10 years, the shares of our Principal Shareholders in the capital of Quan Min will have to be sold based on the computed value of Quan Min s NTA as at the date the shares in the capital of Quan Min were alloted to our Principal Shareholders (being 16 June 2008) or the average weighted share price of our Company for the three successive months immediately prior to the date of the sale notice, whichever is lower. Please refer to the Service Agreements Principal Shareholders section of this Prospectus for details of the 10-year service contracts; Each of our Principal Shareholders shall continue to be restrained from competing with us for a period of 24 months, within two kilometres radius from any subsidiary or associate company of our Company of which he has worked in, after ceasing to be a shareholder of Quan Min; and The shareholders agreement shall expire on 15 January 2018, upon which Quan Min shall be wound up by way of voluntary winding up and the liquidator shall be instructed to distribute to each of our Principal Shareholders in specie the shares in the capital of our Company, in proportion to the shareholdings of our Principal Shareholders in the capital of our Company. 64

71 GENERAL INFORMATION ON OUR GROUP Save as disclosed above, there are no other relationships among our Directors and Substantial Shareholder. The Shares held by our Directors and Substantial Shareholder do not carry different voting rights from the New Shares which are the subject of the Placement. Save as disclosed above and to the extent known to us, our Company is not directly or indirectly owned or controlled by another corporation, any government or other natural or legal person whether severally or jointly. There is no known arrangement, the operation of which may, at a subsequent date, result in a change in the control of our Company. As at date of incorporation As at the Latest Practicable Date Direct Interest Deemed Interest Direct Interest Deemed Interest Number of Shares % Number of Shares % Number of Shares % Number of Shares % Directors Narayanan Sreenivasan Dr Ng Chin Siau ,000, ,999, Dr Ng Jet Wei Dr Ang Ee Peng Raymond Dr Chong Kai Chuan Wong Hin Sun Eugene Ng Weng Sui Harry Substantial Shareholder Quan Min (1) 195,999, Significant Changes in the Percentage of Ownership The significant changes in the percentage of ownership of our Company held by our Directors and Substantial Shareholder since 7 January 2008, being the date of incorporation and up to the Latest Practicable Date after the Restructuring Exercise are as follows:- Note:- (1) Quan Min is an investment holding company incorporated in Singapore. Its shareholders are Dr Ng Chin Siau (44.00%), Dr Ng Jet Wei (13.93%), Dr Chong Kai Chuan (8.95%), Dr Wong Dai Chong (8.84%), Dr Yap Kin Wai (4.74%), Dr Kuan Chee Keong (4.53%), Dr Ang Hwee Quan Susan (3.61%), Dr Ang Ee Peng Raymond (2.52%), Dr Chong Ling Sharon (2.12%), Dr Mohanarajah A/L S. Senathirajah (1.91%), Dr Loh Meow Song (1.67%), Dr Ng Cheng Huat (1.43%), Dr Chan Pui Kee (0.56%), Dr Dalila Hashim (0.47%), Dr Tan Shally (0.20%), Dr Tai Mie Yen (0.18%), Dr Goh Seng Teik (0.17%) and Dr Yeo Shulin Serene (0.17%). Dr Wong Dai Chong and Dr Dalila Hashim are husband and wife. 65

72 GENERAL INFORMATION ON OUR GROUP MORATORIUM Our Substantial Shareholder (namely Quan Min) and Dr Ng Chin Siau, who collectively hold 200,000,000 Shares representing approximately 73.0% of our Company s issued share capital after the Placement, have undertaken not to sell, realise, transfer or otherwise dispose of any part of their interests in the issued share capital of our Company immediately after the Placement (adjusted for any bonus issue or subdivision) for a period of six months commencing from the date of admission of our Company to the Official List of the SGX-ST. Our Principal Shareholders, who together hold the entire issued share capital of Quan Min, have each undertaken not to sell, realise, transfer or otherwise dispose of any part of their respective interests in the issued share capital of Quan Min immediately after the Placement (adjusted for any bonus issue or subdivision) for a period of six months commencing from the date of admission of our Company to the Official List of the SGX-ST. 66

73 HISTORY Our history can be traced back to 1996, when our founder and CEO, Dr Ng Chin Siau started his own dental practice as a sole proprietorship under the name Q & M Dental Surgery at Bukit Batok in Singapore. Dr Ng Chin Siau was then the only dentist assisted by his wife, Foo Siew Jiuan (our General Manager) and three dental surgery assistants, all of whom are still with our Group. In 1997, our Deputy CEO, Dr Ng Jet Wei, joined the Bukit Batok dental practice as an associate dental surgeon. In 1999, our CEO and Deputy CEO together with our Alternate Director, Dr Chong Kai Chuan set up four dental clinics in partnership at Toa Payoh, Sims Place, Kallang and Sembawang. As at the end of 1999, we operated five dental clinics and our staff strength increased to approximately 51, including 10 dentists, 40 dental surgery assistants and one administrative personnel. In 2000, we set up another five new dental clinics at Clementi Central, Jurong East Central, Hougang Plaza, Bukit Panjang and Serangoon Central. In that year, four of our Principal Shareholders, Dr Ang Hwee Quan Susan, Dr Wong Dai Chong, Dr Kuan Chee Keong and Dr Yap Kin Wai, joined our Group. As at the end of 2000, we operated 10 dental clinics and our staff strength increased to approximately 116, including 20 dentists, 95 dental surgery assistants and one administrative personnel. In 2001, we further expanded our dental practice by setting up two new dental clinics at Yishun Central and Khatib. In that year, two of our Principal Shareholders, Dr Loh Meow Song and Dr Chong Ling Sharon, joined our Group. In 2001, we also set up a dental laboratory to provide backroom support in terms of fabrication of prosthesis such as dentures, crowns, bridges and retainers. As at the end of 2001, we operated 12 dental clinics and our staff strength increased to approximately 168, including 26 dentists, 135 dental surgery assistants, five laboratory support staffs and two administrative personnel. In 2002, we set up four new dental clinics at Jelapang, Tiong Bahru, Bukit Timah and Clementi Central. Our second Clementi dental practice was set up in order to cope with the higher demand for our dental healthcare services in the Clementi area. As at the end of 2002, we operated 16 dental clinics and our staff strength increased to approximately 224, including 40 dentists, 175 dental surgery assistants, five laboratory support staffs and four finance and administrative personnel. In 2003, we set up five dental clinics at Toa Payoh Central, Pasir Ris, Sembawang MRT, Braddell and Old Airport Road. Our second Toa Payoh Central and Sembawang dental clinics were set up in order to cope with the higher demand for our dental healthcare services in those areas. As at the end of 2003, we operated 21 dental clinics and our staff strength increased to approximately 278, including 55 dentists, 213 dental surgery assistants, five laboratory support staffs and five finance and administrative personnel. In 2004, we expanded our dental practices through a combination of setting up new dental clinics and acquisitions. We set up five dental clinics at Hougang, Ang Mo Kio Central, Admiralty, Boon Lay and Serangoon Central. Our second Serangoon Central dental practice was set up in order to cope with the higher demand for our dental healthcare services in the Serangoon Central area. Between 2002 and 2004, Dr Ng Cheng Huat, Dr Chan Pui Kee, Dr Ang Ee Peng Raymond, Dr Tan Shally, Dr Goh Seng Teik and Dr Mohanarajah A/L S. Senathirajah, joined our Group. In April 2004, our Group acquired from Dr Ng Seow Choon and two of our Principal Shareholders, Dr Ang Ee Peng Raymond and Dr Mohanarajah A/L S. Senathirajah, a 55% partnership stake in two dental clinics at Gombak and Hougang. As at the end of 2004, we operated 28 dental clinics and our staff strength increased to approximately 344, including 70 dentists, 263 dental surgery assistants, five laboratory support staffs and six finance and administrative personnel. In April 2005, our network of dental practices expanded further through the acquisition of a dental clinic at Serangoon North from our CEO and two of our Principal Shareholders, Dr Kuan Chee Keong and Dr Wong Dai Chong. With 29 dental clinics under our Group located island-wide in Singapore and our emerging drive for growth in the dental healthcare industry in Singapore, we started to corporatise all our clinics which were then constituted as sole proprietorships and partnerships by incorporating companies to acquire the business undertakings and assets of the respective dental clinics. 67

74 HISTORY Between June and November 2005, we acquired three dental clinics at Tiong Bahru, Elias Mall and Hougang Mall from Dr Sivagnanam Rajendram, Dr Tai Mie Yen (our Principal Shareholder) and Dr Gian Siong Lin Jimmy respectively. In that same year, Dr Yeo Shulin Serene joined our Group. As at the end of 2005, we operated 32 dental clinics and our staff strength increased to approximately 374, including 76 dentists, 283 dental surgery assistants, five laboratory support staffs and 10 finance, administrative and marketing personnel. In 2006, we acquired from Dentigiene Dental Surgery Pte Ltd a dental clinic at Marsiling. In January 2006, one of our dental clinics at Hougang ceased operations. Around April 2006, we established Q&M Mgt to provide accounting, finance, human resource and information technology support to the dental clinics within our Group. As at the end of 2006, we operated 32 dental clinics and our staff strength increased to approximately 398, including 92 dentists, 288 dental surgery assistants, six laboratory support staffs and 12 finance, administrative and marketing personnel. As at the end of 2007, our staff strength was approximately 380, including 80 dentists, 280 dental surgery assistants, seven laboratory support staffs and 13 finance, administrative and marketing personnel. In 2008, we set up two additional dental clinics at Boon Lay and Gombak to cope with the higher demand for our dental healthcare services in those areas. We also acquired a dental clinic at Killiney Road from one of our Principal Shareholders, Dr Dalila Hashim. On 22 April 2008, we incorporated Q&M Dental Centre to provide multi-disciplinary dental healthcare services, with emphasis in specialist dental healthcare services at a single location. On 6 May 2008, we incorporated Q&M Dental Group (China) as an investment vehicle to explore opportunities in the PRC and Q&M Mobile Dental Clinic which was operational in September 2008 to provide mobile dental healthcare services at diverse locations around Singapore. On 26 September 2008, we incorporated Q&M Dental Institute to conduct continuing dental education programs to dentists in Singapore. As at the end of 2008, we operated 35 dental clinics and a mobile dental clinic while our staff strength was approximately 432, including 92 dentists, five oral health therapists, 308 dental surgery assistants, seven laboratory support staffs and 20 finance, administrative and marketing personnel. In August 2009, we further expanded our dental practice by setting up a new dental clinic at Tampines. As at the Latest Practicable Date, we operated 36 dental clinics and a mobile dental clinic while our staff strength was approximately 445, including 105 dentists, nine oral health therapists, 302 dental surgery assistants, eight laboratory support staffs and 21 finance, administrative and marketing personnel. In September 2009, Dr Ng Chin Siau was named the top entrepreneur and winner of The Entrepreneur of the Year Award ( EYA ) for Enterprise in the 2009 Rotary Club-ASME EYA. Our Company was incorporated on 7 January 2008 in Singapore under the Act as a private company limited by shares. On 16 June 2008, we completed a restructuring exercise whereby our dental clinics and dental support units became wholly-owned subsidiaries of our Company, except for Q&M Lab which we own 76% (please refer to the Restructuring Exercise section of this Prospectus for more details). On 9 October 2009, our Company was converted to a public company limited by shares and its name was changed to Q & M Dental Group (Singapore) Limited. Please refer to the Subsidiaries section of this Prospectus for details of our subsidiaries. 68

75 BUSINESS BUSINESS OVERVIEW We are Singapore s largest private dental healthcare group with 36 dental clinics and a mobile dental clinic with 105 dentists, nine oral health therapists and 302 dental surgery assistants as at the Latest Practicable Date. We have treated more than 300,000 patients island-wide between December 2005 and the Latest Practicable Date. Our dental healthcare services include general dental treatment, endodontics, orthodontics, periodontics, prosthodontics, paedodontics, oral surgery, dental implants and aesthetic dentistry. We have a dental laboratory which fabricates dental prosthesis such as crowns, bridges, dentures and retainers. Our head office and dental laboratory are currently located in Singapore at 67 Ayer Rajah Crescent #05-12/14 Ayer Rajah Industrial Estate Singapore We provide the following dental healthcare services to our patients:- (1) General dental treatment Our general dental treatments include: examination and diagnosis, treatment planning, scaling, polishing, fluoride treatment, fillings and extractions as well as treatments for dentine hypersensitivity (sensitive teeth) and patient education. All our dental clinics are equipped with dental X-ray facilities, some with OPG and lateral cephalometric X-rays. An OPG is a panoramic scanning dental X-ray of the upper and lower jaw. A lateral cephalometric X-ray shows the side view of the head. (2) Endodontics Endodontics is a field of dentistry that deals with the tooth pulp and the tissues surrounding the root end of a tooth. The pulp (containing nerves and other soft tissue) can become diseased by deep decay of the tooth or injured when a tooth is chipped or fractured in a traumatic incident, and is often unable to repair itself; if it dies, root canal treatment is required. The most common procedure done in endodontics is root canal therapy. Our endodontic services include: pulp capping, root canal treatment or retreatment, endodontic surgery, bleaching of discoloured non-vital teeth, treating traumatic tooth injuries and diagnosing and treating dental pain. (3) Orthodontics Orthodontics is concerned with the treatment of dento-facial irregularities or malocclusions (improper bites), which may be a result of dental irregularity and disproportionate jaw relationships, amongst others. Orthodontic treatment involves fixed and/or removable braces. It can be carried out for (i) functional reasons (to improve biting efficiency and speech), (ii) practical reasons (to improve oral hygiene hence minimizing dental diseases and to reduce risk of injury to protruding teeth), and (iii) aesthetic reasons (to improve one s appearance which may enhance one s self-esteem and confidence). (4) Periodontics Periodontics deals with the diagnosis, prevention and control of periodontal or gum diseases. Our periodontics services include supervised oral hygiene methods, non surgical and surgical scaling, and root planing to achieve a healthy oral environment conducive for the retention of teeth, dental prosthesis and implants. (5) Prosthodontics Prosthodontics is a field of dentistry that restores tooth structure and replaces missing teeth and soft tissue, with an emphasis on restoring natural function and appearance. Our prosthodontics services include: inlays, onlays, veneers, crowns, bridges, dentures, implant restorations and oral rehabilitation. We also manage parafunctional anomalies, such as bruxism (grinding of teeth), temporo-mandibular joint disorder (pain and inflammation affecting the jaw joint and associated muscles), snoring and obstructive sleep apnea. 69

76 BUSINESS (6) Paedodontics Paedodontics or paediatric dentistry refers to provision of oral healthcare services to children aged one to 17 years. Every child is prescribed a comprehensive oral healthcare programme catered to his own needs with the aim of helping the child to achieve optimal oral health. Provision of care includes both restorative and preventive components with emphasis on prevention and early interception of oral diseases. It also includes trauma and emergency treatment, for instance sports injury, falls or minor accidents. (7) Oral surgery Oral surgery is a field of dentistry that deals with the diagnosis and management of the diseases, injuries, and defects of the human mouth, jaw and associated facial structures. Our services include medical and surgical services such as dentoalveolar and wisdom tooth surgeries, dental implants, sinus-lift procedure, bone grafting as well as adjunct surgery to orthodontics. (8) Dental implants Dental implants are titanium fixtures placed in bone to replace the root of a missing tooth. They restore appearance, function and speech and can eliminate discomforts associated with wearing dentures. They are used to replace one or more missing teeth, as well as restoring a totally edentulous jaw (completely missing teeth). It also can be used to secure a removable full denture in the mouth, thereby securing it more effectively during speech and function. (9) Aesthetic dentistry Aesthetic dentistry is a field of dentistry concerned especially with the appearance of a dental restoration as achieved through its form and colour. It includes dentures, orthodontics, crowns and bridges, implants, bonding, veneers and teeth whitening. In September 2008, we commissioned the construction of a mobile dental clinic in Singapore to provide dental healthcare services at diverse locations around Singapore. With the mobile dental clinic, we are able to provide dental healthcare at selected designations (such as open car parks of an industrial estate) and provide on-site dental screening for staff and workers of corporations. Dentists at our mobile dental clinic perform simple procedures such as scaling, polishing and fillings. Patients who need more complex treatments will be referred to our dental clinics, at a location convenient to the patient. Our mobile dental clinic also provides free dental check-ups for students of junior colleges, polytechnics and universities as well as the underprivileged as part of our corporate social responsibility. As at the Latest Practicable Date, we operate 36 dental clinics in Singapore as illustrated in the table below, as well as a mobile dental clinic:- District Location(s) Dental clinic(s) Addresses Central Bukit Timah Q&M Bukit Timah 2 Chun Tin Road Singapore Serangoon Q&M Serangoon 1 Q&M Serangoon 2 Q&M Serangoon Serangoon Central # Singapore Serangoon North Avenue 1 # Singapore Serangoon Central Drive # Singapore Somerset Q&M Killiney 91 Killiney Road Singapore

77 BUSINESS District Location(s) Dental clinic(s) Addresses East Geylang Q&M Old Airport Rd Q&M Sims Place Hougang Q&M Hougang 1 Q&M Hougang 2 Q&M Hougang 3 39 Jalan Tiga #01-03 Singapore Sims Place # Singapore Hougang Avenue 10 #04-07 Hougang Mall Singapore Hougang Central # Singapore Upper Serangoon Road #01-02A Hougang Plaza Singapore Kallang Q&M Kallang 5 Sims Avenue #01-02 Kallang MRT Station Singapore Pasir Ris Q&M Elias Mall Q&M Pasir Ris 625 Elias Road # Elias Mall Singapore Pasir Ris Central Street 3 #05-09 White Sands Singapore Tampines Q&M Tampines 2 Tampines Central 5 #B1-24 Century Square Singapore North Ang Mo Kio Q&M Ang Mo Kio 51 Ang Mo Kio Avenue 3 # @AMK Singapore Sembawang Q&M Sembawang 1 Q&M Sembawang 2 30 Sembawang Drive #03-06 Sun Plaza Singapore Canberra Road #02-01 Sembawang MRT Station Singapore Toa Payoh Woodlands Yishun Q&M Braddell Q&M Toa Payoh 1 Q&M Toa Payoh 2 Q&M Admiralty Q&M Marsiling Q&M Khatib Q&M Yishun 109 Toa Payoh Lorong 1 # Singapore Toa Payoh Lorong 6 # Singapore Toa Payoh Central # Singapore Woodlands Drive 70 # Singapore Woodlands Street 31 # Singapore Yishun Ring Road # Singapore Yishun Central 1 # Singapore South Tiong Bahru Q&M Tiong Bahru 1 Q&M Tiong Bahru 3 West Boon Lay Q&M Boon Lay 1 Q&M Boon Lay 2 Bukit Batok Q&M Bukit Batok 1 Q&M Gombak 2 Q&M Gombak MRT 18 Jalan Membina #02-02 Singapore Tiong Bahru Road #01-10 Redhill MRT Station Singapore Boon Lay Place # Singapore Boon Lay Way #01-37 Boon Lay MRT Station Singapore Bukit Batok Street 11 # Singapore Bukit Batok Street 31 # Singapore Bukit Batok West Ave 5 #01-09 at Bukit Gombak MRT Station Singapore Bukit Panjang Q&M Bukit Panjang Q&M Jelapang 257 Bangkit Road #01-47 Singapore A Jelapang Road #02-15 Singapore Clementi Q&M Clementi 1 Q&M Clementi Clementi Avenue 3 # Singapore Clementi Avenue 3 # Singapore Jurong East Q&M Jurong 131 Jurong East Street 31 # Singapore

78 BUSINESS SERVICE QUALITY CONTROL Our service quality refers to the whole experience of visiting a Q&M dental clinic; from booking of appointment, patient registration, dental care and patient feedback. We believe that service quality control is a key factor that contributed to our growth and success. Therefore, service quality control is our important management philosophy as we strive to maintain our reputation in the dental healthcare industry as a provider of a wide range of quality and accessible dental healthcare. We have implemented stringent service quality control measures to ensure that the quality of our dental healthcare services meet the expectations of our patients. Our commitment to quality is evidenced by the following certification received by us:- Certificate Scope Certifying authority Date of expiry Validity ISO9001:2008 Provision of management, financial and infrastructure support services for our Group Provision of dental management and administrative services TÜV-SÜD PSB Pte Ltd 10 July 2011 For a period of three years, after which it may be renewed upon meeting the relevant standards. Our service quality control department is headed by our COO, Dr Ang Ee Peng Raymond, with the assistance and support of three quality assurance personnel. They are responsible for ensuring that our service quality control guidelines are adhered to. Our service quality control measures are as follows:- (i) Prompt and efficient booking of appointment and patient registration We have a computerised system to handle patient appointment and registration. Once an appointment is made, our dental clinics will follow-up with a reminder to our patients the day before their appointment through short-message-system ( SMS ) or phone call. For first time patients visiting our dental clinics, apart from the patients personal particulars, our dental surgery assistants provide each patient with a comprehensive medical history questionnaire that will assist our dentists in planning the appropriate dental treatment. (ii) Provision of quality dental care We have in place a set of guidelines which will help our dentists, oral health therapists and dental surgery assistants in ensuring consistency in our treatment and services rendered. These guidelines include patient appointments, dealings with patients, charges and treatments. As at the Latest Practicable Date, we have 105 dentists and nine oral health therapists who are all graduates from universities and Nanyang Polytechnic respectively. Our dentists and oral health therapists qualifications are all recognised by the SDC. In order to constantly upgrade and improve their dental surgical skills, these dentists and oral health therapists are required by the SDC to fulfil 70 hours and 35 hours of continuing dental education respectively, for every two years of practice, before they are able to renew their annual practising certificates. We offer selected dentists study loans to pursue post-graduate studies in the local universities so that they can better serve our Group as dental specialists upon graduation. We have in place a stringent infection control protocol which ensures that our patients are well protected from cross-infection of diseases such as the acquired immunity deficiency syndrome, hepatitis, tuberculosis and Severe Acute Respiratory Syndrome. 72

79 BUSINESS (iii) Clear avenue for patient feedback We seek feedback on our services from our patients (a) through our Customer Satisfaction Survey Form and (b) via other channels such as , mail and fax. Occasionally, our patients feedback directly to our dentists, oral health therapists and dental surgery assistants. We have a Dental Affairs Committee ( DAC ) which is headed by our COO, Dr Ang Ee Peng Raymond. The members are Dr Ng Jet Wei (our Deputy CEO), Foo Siew Jiuan (our General Manager), Dr Chong Kai Chuan (our Alternate Director) and Dr Mohanarajah A/L S. Senathirajah (our Principal Shareholder). The DAC attends to all written feedbacks from patients. MARKETING AND BUSINESS DEVELOPMENT Our marketing and business development activities are spearheaded by our CEO, Dr Ng Chin Siau, and assisted by our Deputy CEO, Dr Ng Jet Wei. Together, they plan and formulate our overall objectives and business strategies. Marketing In Singapore, our marketing activities are regulated by the Private Hospitals and Medical Clinics (Publicity) Regulations We are restricted by the regulations on the type, scope and amount of marketing activities we can carry out at all times. Please refer to the Government Regulations section of this Prospectus for more information on these guidelines. Due to these constraints, our marketing strategies are as follows:- (i) (ii) (iii) Common group branding We have been operating under the Q&M brand since As part of our restructuring exercise to streamline and rationalise our operations, our dental clinics have adopted the Q&M brand. As part of an on-going effort to bolster our corporate image, the Q&M brand is applied in all our printed materials and in-house newsletter on dental healthcare, which are made available to our patients via . Sponsorship of activities We promote our Q&M brand amongst the local and foreign dental students by sponsoring activities undertaken by institutions such as the National University of Singapore s Dental Society ( NUSDS ) and the Asia Pacific Dental Students Association ( APDSA ). For example, we have a prize bearing our brand name, the Q&M Dental Surgery Gold Medal, which is presented by the Faculty of Dentistry of the National University of Singapore to its qualifying top student in Operative Dentistry. We have also committed to giving two bursaries at the Faculty of Dentistry at the National University of Singapore each year. All these initiatives allow us to interact with the students. Advertisement Our corporate website ( is an important marketing channel and contains information on our corporate profile, contact details, location of our dental clinics and range of our dental healthcare services. Business Development Our business development team carries out the following:- (i) Formulating marketing and growth strategies We continually obtain market updates and keep abreast of the latest technology in the dental healthcare industry. With this information obtained, we formulate marketing strategies to increase our profile in the dental healthcare industry. This also enables us to devise growth strategies locally and overseas. 73

80 BUSINESS (ii) (iii) Securing strategic locations for our dental clinics at cost effective rental rates We aim to secure good and strategic locations for our dental clinics, to maximise revenue at a lowest possible rental expense. The team scour consistently for new sites and review existing ones. Recruitment of our dentists and oral health therapists We participate in sponsoring activities which allow us to identify potential recruits for our dental healthcare services, such as those undertaken by NUSDS, APDSA and international dental trade shows. We place advertisements in dental healthcare industry publications and regional dental associations magazines to attract suitable qualified dentists to join our Group. In addition, we have a recruitment section on our corporate website. MAJOR CUSTOMERS Our customers are mainly private patients and our business and profitability are not materially dependent on any single individual or any corporate contract. There is no individual patient or corporation that accounted for 5% or more of our revenue during the periods under review. Our corporate clients, namely Singapore Airlines Limited and American Insurance Association, collectively accounted for less than 5% of our revenue over the periods under review. Between December 2005 and the Latest Practicable Date, we have treated more than 300,000 patients island-wide in Singapore. As at the date of this Prospectus, none of our Directors, Substantial Shareholders or their respective Associates has any interest, direct or indirect, in any of the customers in our Group. MAJOR SUPPLIERS We purchase consumables and dental supplies such as medicine (local anaesthetics), dental prosthesis (crowns, bridges and dentures), dental supplies (materials used in dental procedures namely impression materials, filling materials and cements), dental instruments (extraction forceps, injection needles, root canal files and orthodontic brackets) and consumables (facial masks, disposable gloves, dental bibs, plastic cups and gauze) for utilisation at our dental clinics and dental laboratory. We purchase directly from suppliers predominantly located in Singapore. We generally do not enter into long-term or exclusive agreements with our major suppliers as this would provide us the flexibility to evaluate and select new suppliers which are able to give us the highest possible quality service at competitive pricing. The key considerations in selecting our suppliers include the quality of their products, pricing, services and timeliness of delivery. As such, we are not dependent on any single supplier and our purchases from suppliers may vary from year to year. The suppliers accounting for 5% or more of our purchases during the periods under review are as follows:- As a percentage of purchases (%) Name of supplier Products supplied FY2006 FY2007 FY2008 HY2009 Eagle Ceramic Dental Dental prosthesis N.K. Luck (S) Pte Ltd Dental supplies SA Dental Supply Pte Ltd Dental supplies, dental instruments and medicine Orchid Dental Laboratory & Supplies Dental prosthesis Joshua Investment Pte Ltd Consumables Pharmaforte Singapore Pte Ltd Dental supplies Fondaco Pte Ltd (1) Dental supplies and dental instruments

81 BUSINESS Note:- (1) Fondaco Pte Ltd is a company incorporated in Singapore whose current principal business activities are the supply of dental products, dental instruments and dental equipment. Its directors are Tjhang Widopo Fongianto, Monita Latumahina Kok, Jane Fonda and Sylvia Fonda Latumahina and shareholders are Tjhang Widopo Fongianto (30.0%), Monita Latumahina Kok (31.0%), Jane Fonda (20.0%) and Sylvia Fonda Latumahina (19.0%). Jane Fonda is the ex-wife of our Alternate Director and Principal Shareholder, Dr Chong Kai Chuan. Please refer to the Interested Person Transactions Past Transactions section of this Prospectus for more details. Our Directors believe that our business and profitability will not be materially affected by the loss of any single supplier or on any particular industrial, commercial or financial contract with any supplier. The year-to-year fluctuations in our purchases from each of our major suppliers were due mainly to the availability of the products required by our dental clinics and dental laboratory, and price considerations. To the best of their knowledge, our Directors are not aware of any information or arrangements which would lead to a cessation or termination of our current relationship with any of our major suppliers. Save as disclosed above, as at the date of this Prospectus, none of our Directors, Substantial Shareholders or their respective Associates has any interest, direct or indirect, in any of the above major suppliers. INVENTORY MANAGEMENT Our inventories comprise mainly oral care products such as toothpaste, tooth brush, mouth rinse and dental floss. Each dental clinic is responsible for its own inventory management. The dental surgery assistants of each dental clinic monitor its own inventory levels closely by conducting inventory checks on a monthly basis. We assess the saleability of each item in the inventory and we generally do not make provisions for inventory obsolescence as it is our Group s policy to write-off any expired supplies. The amount of expired supplies written-off during the periods under review for our Group has been insignificant. Dental surgery assistants will submit an order requisition form weekly (approved by the dentist in-charge of the respective dental clinic) to our central purchasing officer who will aggregate it with other requisitions and place orders with the respective suppliers at the agreed bulk preferential rates. All orders with suppliers are subject to approval from our CEO, Deputy CEO, COO or General Manager. As at 30 June 2009, our inventories amounted to approximately $80,000. We adopt the first-in-first-out method of inventory management and costing. We have put in place a computerised inventory management system, which tracks movement of inventory items on a real-time basis. Our finance department performs a full inventory count on an annual basis. FY2006 FY2007 FY2008 HY2009 Average inventory turnover days (1) Our average inventory turnover during the periods under review were as follows:- Note:- (1) The average inventory turnover days is calculated based on the average inventory balance divided by average daily consumables and dental supplies used for the year/ period. 75

82 BUSINESS CREDIT MANAGEMENT Credit terms to our customers Our customers are mainly private patients who are charged on a cash basis for dental healthcare services rendered. We accept various modes of payments namely cash (including electronic payments), cheques and credit cards. The electronic payments and credit card payments usually take three days to settle. We generally grant our corporate clients credit terms from 30 to 90 days. FY2006 FY2007 FY2008 HY2009 Average trade receivables turnover days (1) Our trade receivables comprise mainly amounts due from credit card companies, electronic payment transactions and corporate clients. As a result of such payments, our average trade receivables turnover during the periods under review were as follows:- Note:- (1) The average trade receivables turnover days is calculated based on the average trade receivables divided by average daily revenue for the year/ period. Specific provision or write-off would be made when we are of the view that the collectability of an outstanding debt is impaired or the debt is uncollectible. We have not provided for any doubtful debts during the periods under review. Our trade receivables as at 30 June 2009 amounted to $0.2 million and the aging of the majority of these debts is less than 30 days. As at the Latest Practicable Date, 88.2% of these trade receivables had been collected. Credit terms from our suppliers Generally, our suppliers grant us credit terms ranging from 30 to 60 days from delivery of products. The payment terms granted by our suppliers vary and are also dependent on, inter alia, the size of the transaction and our relationship with the supplier. FY2006 FY2007 FY2008 HY2009 Average trade payables turnover days (1) Our average trade payables turnover during the periods under review were as follows:- Note:- (1) The average trade payables turnover days is calculated based on the average trade payables divided by average daily consumables and dental supplies used for the year/ period. Trade payables relate to purchase of consumables and dental supplies. RESEARCH AND DEVELOPMENT We do not carry out any research and development activities. STAFF TRAINING We invest in staff training as we believe as a professional dental healthcare services group, the level of technical knowledge and skill of our dentists, oral health therapists and dental surgery assistants contribute to our continued success, with the support of our laboratory support staff, finance, administrative and marketing staff. Our dentists and oral health therapists The conduct and practice of dentists and oral health therapists are governed by the SDC. In order to constantly upgrade and improve their dental surgical skills, these dentists and oral health therapists are required to fulfil 70 hours and 35 hours of continuing dental education respectively, for every two years of practice, before they are able to renew their annual practising certificates. 76

BUSINESS We also encourage our dentists and oral health therapists to attend courses to upgrade their skills and familiarise themselves with technological advancements in dental healthcare practice

For example, talks had been conducted by our visiting consultants on wisdom tooth operations, dental implantology and dental traumatic injuries.

83 BUSINESS We also encourage our dentists and oral health therapists to attend courses to upgrade their skills and familiarise themselves with technological advancements in dental healthcare practice as well as new dental equipment. Some of these courses may be conducted by third party organisations while others may be conducted in-house. For example, talks had been conducted by our visiting consultants on wisdom tooth operations, dental implantology and dental traumatic injuries. Our dental surgery assistants We implement our own in-house training modules which apply to all our dental surgery assistants. They are issued a standard training log book to chart their training progress. Points are awarded upon achieving competency in certain skill sets such as mixing of dental materials and casting of models. Our human resource department reviews these log books annually to ensure that the minimum requirement have been met. We encourage our dental surgery assistants to attend a structured training course, known as the NITEC ( National ITE Certificate ) Certification in Dental Assisting, conducted by SDA and certified by ITE ( Institute of Technical Education ). Since SDA inaugurated this program in April 2007, we have sent 12 of our dental surgery assistants for this certification. Our laboratory support staff All our laboratory support staff have undergone on-the-job training and have the relevant technical experience. Certain laboratory support staff are sent for further training conducted by suppliers when there are advances in dental technology. Our finance, administrative and marketing staff We require our finance, administrative and marketing staff to continually upgrade and improve their skill sets by requiring from them a minimum training target of 15 hours per year. They are encouraged to attend training programs conducted both in-house and by external parties. Our staff training expenses are insignificant during the periods under review. Trademark Class Specification of services 44 Providing dental healthcare, dental surgery and dental treatment services (1) 44 Providing dental healthcare, dental surgery and dental treatment services Country of registration Status Validity period Singapore Registered 10 years from 1 April 2003 Singapore Registered 10 years from 30 September 2008 Upon the expiry of the registration period of the above trademarks, we may apply for a renewal of the respective registration periods of the trademarks every 10 years. Our Directors do not foresee any risks in our registered trademarks that is material to our operations not being renewed for another 10 years. INTELLECTUAL PROPERTY We own the following registered trademarks in Singapore:- Note:- (1) This trademark was registered as a series of four marks involving three other permutations. An application to register this trademark in the PRC for the same scope of services as that which is applicable in relation to the Singapore registration has been filed and the approval and confirmation of the PRC registration is pending. The priority filing for the said application in the PRC was filed on 8 December To the best of our Directors knowledge, as at the Latest Practicable Date, no objection has been raised against the approval and registration of this trademark. Legal recognition of this trademark in the PRC upon obtaining such approval is not restricted to any particular province in the PRC. 77

METECH INTERNATIONAL LIMITED (Incorporated in the Republic of Singapore on 28 November 1992) (Company Registration Number: M)

METECH INTERNATIONAL LIMITED (Incorporated in the Republic of Singapore on 28 November 1992) (Company Registration Number: M) OFFER INFORMATION STATEMENT DATED 8 SEPTEMBER 2015 (Lodged with the Singapore Exchange Securities Trading Limited (the SGX-ST ) acting as agent on behalf of the Monetary Authority of Singapore (the Authority