Optima Automobile Group Holdings Limited 傲迪瑪汽車集團控股 … · 2019. 9. 26. · GEM has been positioned as a market designed to accommodate small and mid-sized companies

Optima Automobile Group Holdings Limited傲迪瑪汽車集團控股有限公司(Incorporated in the Cayman Islands with limited liability) Stock Code: 8418

Op

tima A

utomob

ile Group

Hold

ings Limited

傲迪瑪汽車集團控股有限公司 Share Offer

Sole Sponsor

Joint Global Coordinators, Joint Bookrunners and Joint Lead Managers

If you are in any doubt about any of the contents of this prospectus, you should obtain independent professional advice.

Optima Automobile Group Holdings Limited傲迪瑪汽車集團控股有限公司

(Incorporated in the Cayman Islands with limited liability)

LISTING ON GEMOF THE STOCK EXCHANGE OF HONG KONG LIMITED

BY WAY OF SHARE OFFER

Number of Offer Shares : 250,000,000 Shares (subject to the Offer SizeAdjustment Option)

Number of Placing Shares : 225,000,000 Shares (subject to reallocation andthe Offer Size Adjustment Option)

Number of Public Offer Shares : 25,000,000 Shares (subject to reallocation)Offer Price : Not more than HK$0.26 per Offer Share and

expected to be not less than HK$0.20 per OfferShare (plus brokerage fee of 1%, SFCtransaction levy of 0.0027% and StockExchange trading fee of 0.005%) (payable infull on application in Hong Kong dollars andsubject to refund)

Nominal value : HK$0.01 per ShareStock code : 8418

Sole Sponsor


Hong Kong Exchanges and Clearing Limited, The Stock Exchange of Hong Kong Limited and Hong Kong Securities Clearing Company Limited take noresponsibility for the contents of this prospectus, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever forany loss howsoever arising from or in reliance upon the whole or any part of the contents of this prospectus.

A copy of this prospectus, having attached thereto the documents specified in the section headed ‘‘Documents Delivered to the Registrar of Companies in HongKong and Available for Inspection’’ in Appendix V to this prospectus, has been registered with the Registrar of Companies in Hong Kong as required by section342C of the Companies (Winding Up and Miscellaneous Provisions) Ordinance (Chapter 32 of the Laws of Hong Kong). The Securities and Futures Commissionof Hong Kong and the Registrar of Companies in Hong Kong take no responsibility as to the contents of this prospectus or any other document referred to above.

The Offer Price is expected to be determined by the Price Determination Agreement to be entered into between the Joint Global Coordinators (for themselves andon behalf of the Underwriters) and our Company on or about Thursday, 3 October 2019 or such later date as may be agreed between the parties. If, for anyreason, the Joint Global Coordinators (for themselves and on behalf of the Underwriters) and our Company are unable to reach an agreement on the Offer Priceby that date or such later date as agreed by our Company and the Joint Global Coordinators (for themselves and on behalf of the Underwriters), the Share Offerwill not become unconditional and will lapse. The Offer Price will not be more than HK$0.26 per Offer Share and is expected to be not less than HK$0.20 perOffer Share, unless otherwise announced. The Joint Global Coordinators (for themselves and on behalf of the Underwriters) may, with the consent of ourCompany, reduce the above indicative Offer Price range at any time prior to the Price Determination Date. In such a case, notice of the reduction in theindicative Offer Price range will be available on the website of the Stock Exchange at www.hkexnews.hk and the website of our Company at www.ow.sg.

Prospective investors of the Offer Shares should note that the Joint Global Coordinators (for themselves and on behalf of the Underwriters) may in their absolutediscretion, upon giving notice in writing to our Company, terminate the Underwriting Agreements with immediate effect if any of the events set forth under theparagraph headed ‘‘Underwriting – Underwriting arrangement and expenses – Grounds for termination’’ in this prospectus occurs at any time prior to 8:00 a.m.(Hong Kong time) on the Listing Date. Should the Joint Global Coordinators (for themselves and on behalf of the Underwriters) terminate the UnderwritingAgreements in accordance with the terms of the Underwriting Agreements, the Share Offer will not proceed and will lapse.

Prior to making an investment decision, prospective investors should consider carefully all of the information set out in this prospectus, including the risk factorsset out in the section headed ‘‘Risk Factors’’ in this prospectus.

27 September 2019

IMPORTANT

GEM has been positioned as a market designed to accommodate small and mid-sized companies towhich a higher investment risk may be attached than other companies listed on the Stock Exchange.Prospective investors should be aware of the potential risks of investing in such companies and shouldmake the decision to invest only after due and careful consideration.

Given that the companies listed on GEM are generally small and mid-sized companies, there is arisk that securities traded on GEM may be more susceptible to high market volatility than securitiestraded on the Main Board of the Stock Exchange and no assurance is given that there will be a liquidmarket in the securities traded on GEM.

The principal means of information dissemination on GEM is publication on the internet websiteoperated by the Stock Exchange. Listed companies are not generally required to issue paidannouncements in gazetted newspaper. Accordingly, prospective investors should note that they need tohave access to the website of the Stock Exchange at www.hkexnews.hk in order to obtain up-to-dateinformation on companies listed on GEM.

CHARACTERISTICS OF GEM

– i –

If there is any change in the following expected timetable of the Share Offer, we will publish anannouncement on the website of the Stock Exchange at www.hkexnews.hk and our Company’s website atwww.ow.sg.

Date (Note 1)

Public Offer commences and WHITE and YELLOW Application Formsavailable from . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9:00 a.m. on

Friday, 27 September 2019

Application lists for Public Offer open (Note 2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11:45 a.m. onThursday, 3 October 2019

Latest time for lodging WHITE and YELLOW Application Forms . . . . . . . . . . . . . . . . . . . 12:00 noon onThursday, 3 October 2019

Latest time to give electronic application instructions to HKSCC (Note 3) . . . . . . . . . . . . . . . 12:00 noon onThursday, 3 October 2019

Application lists for Public Offer close (Note 2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12:00 noon onThursday, 3 October 2019

Expected Price Determination Date on or about (Note 4) . . . . . . . . . . . . . . . . . . . Thursday, 3 October 2019

Announcement of (i) the final Offer Price; (ii) indications of the levels of interestin the Placing; (iii) the levels of applications of the Public Offer; (iv) the basis ofallotment of the Public Offer Shares; and (v) the number of Offer Shares reallocated,if any, between the Public Offer and the Placing to be publishedon our Company’s website at www.ow.sg (Note 5) and the websiteof the Stock Exchange at www.hkexnews.hk on or before (Note 11) . . . . . . . . . .Thursday, 10 October 2019

Results of allocations in the Public Offer will be available atwww.tricor.com.hk/ipo/result or www.hkeipo.hk/IPOResultwith a ‘‘search by ID’’ function on (Note 11) . . . . . . . . . . . . . . . . . . . . . . . . .Thursday, 10 October 2019

Announcement of results of allotment of the Public Offer (with successfulapplicants’ identification document numbers, where appropriate) to beavailable through a variety of channels as described in the paragraph headed‘‘How to Apply for Public Offer Shares – 10. Publication of results’’in this prospectus on or before (Note 11) . . . . . . . . . . . . . . . . . . . . . . . . . . .Thursday, 10 October 2019

Despatch/collection of share certificates and/orrefund cheques on or before (Notes 6 to 11) . . . . . . . . . . . . . . . . . . . . . . . . . .Thursday, 10 October 2019

Dealings in Shares on GEM expected to commence at (Note 11) . . . . . . . . . . . . . . . . . . . . . . . 9:00 a.m. onFriday, 11 October 2019

EXPECTED TIMETABLE

– ii –

Notes:

1. All dates and times refer to Hong Kong local dates and times, except as otherwise stated.

2. If there is a ‘‘black’’ rainstorm warning or a tropical cyclone warning signal number 8 or above in force in Hong Kong at any timebetween 9:00 a.m. and 12:00 noon on Thursday, 3 October 2019, the application lists will not open on that day. For further details,please refer to the paragraph headed ‘‘How to Apply for Public Offer Shares – 9. Effect of bad weather and/or extreme conditions onthe opening of the application lists’’ in this prospectus.

3. Applicants who apply for Public Offer Shares by giving electronic application instructions to HKSCC should refer to the paragraphheaded ‘‘How to Apply for Public Offer Shares – 5. Applying by giving electronic application instructions to HKSCC via CCASS’’ inthis prospectus.

4. Please note that the Price Determination Date, being the date on which the Offer Price is to be determined, is expected to be on orabout Thursday, 3 October 2019. If, for any reason, the Offer Price is not agreed between our Company and the Joint GlobalCoordinators (for themselves and on behalf of the Underwriters) on or before the Price Determination Date or such later date as maybe agreed between our Company and the Joint Global Coordinators (for themselves and on behalf of the Underwriters), the ShareOffer will not become unconditional and will lapse immediately. Notwithstanding that the Offer Price may be less than the maximumOffer Price of HK$0.26 per Offer Share, applicants must pay the maximum Offer Price of HK$0.26 per Offer Share at the time ofapplication, plus brokerage of 1%, SFC transaction levy of 0.0027% and Stock Exchange trading fee of 0.005%, but the surplusapplication monies will be refunded, without interest, as provided in the section headed ‘‘How to Apply for Public Offer Shares’’ inthis prospectus.

5. None of our Company’s website or any of the information contained in our Company’s website forms part of this prospectus.

6. Share certificates for the Public Offer Shares are expected to be issued on or before Thursday, 10 October 2019 but will only becomevalid certificates of title at 8:00 a.m. on Friday, 11 October 2019 provided that (a) the Share Offer has become unconditional in allrespects; and (b) none of the Underwriting Agreements has been terminated in accordance with its terms. If the Public Offer does notbecome unconditional or either of the Underwriting Agreements is terminated, we will make an announcement as soon as possible.

7. Refund cheques will be issued in respect of wholly or partially unsuccessful applications pursuant to the Public Offer, and in respectof successful applications if the Offer Price as finally determined is less than the price payable on application. Refund by cheque(s)will be made out to you, or if you are joint applicants, to the first-named applicant on your Application Form. Part of your HongKong identity card number/passport number, or, if you are joint applicants, part of the Hong Kong identity card number/passportnumber of the first-named applicant provided by you may be printed on your refund cheque, if any. Such data may also be transferredto a third party for refund purposes. Your banker may require verification of your Hong Kong identity card number/passport numberbefore encashment of your refund cheque, if any. Inaccurate completion of your Hong Kong identity card number/passport numbermay lead to a delay in encashment of, or may invalidate, your refund cheque.

8. Applicants for 1,000,000 Public Offer Shares or more on WHITE Application Form(s) and have provided all required informationmay collect their refund cheques (where relevant) and/or share certificates (where relevant) personally from our Hong Kong BranchShare Registrar, Tricor Investor Services Limited, at Level 54, Hopewell Centre, 183 Queen’s Road East, Hong Kong from 9:00 a.m.to 1:00 p.m. on Thursday, 10 October 2019 or any other day as announced by us as the date of despatch of share certificates/refundcheques.

Individuals who are eligible for personal collection must not authorise any other person(s) to make collection on their behalf.Corporate applicants which opt for personal collection must attend by their authorised representative(s) bearing a letter ofauthorisation from such corporation(s) stamped with the corporation’s chop. Both individuals and authorised representatives (ifapplicable) must produce, at the time of collection, evidence of identity acceptable to our Hong Kong Branch Share Registrar.

9. Applicants for 1,000,000 Public Offer Shares or more on YELLOW Application Forms may collect their refund cheques, if any, inperson but may not collect their share certificates personally which will be deposited into CCASS for the credit of their designatedCCASS Participants’ stock accounts or CCASS Investor Participants’ stock accounts, as appropriate. The procedures for collection ofrefund cheques for YELLOW Application Form applicants are the same as those for WHITE Application Form applicants.

10. Uncollected share certificates and refund cheques (if any) will be despatched by ordinary post at the applicant’s own risk to theaddress specified in the relevant Application Form. For further information, applicants should refer to the paragraph headed ‘‘How toApply for Public Offer Shares – 13. Despatch/collection of share certificates and refund monies’’ in this prospectus.

11. In case a typhoon warning signal number 8 or above, a ‘‘black’’ rainstorm warning signal and/or extreme conditions is/are in force inany days between Thursday, 10 October 2019 to Friday, 11 October 2019, then the day of (i) announcement of results of allocations inthe Public Offer; (ii) despatch of share certificates and refund cheques; and (iii) dealings in the Shares on the Stock Exchange will bepostponed according to the number of business days affected by the bad weather and/or extreme conditions.

EXPECTED TIMETABLE

– iii –

For further details of the structure and conditions of the Share Offer, you should refer to the section headed‘‘Structure and Conditions of the Share Offer’’ in this prospectus.

Share certificates for the Offer Shares will only become valid certificates of title to which they relateat 8:00 a.m. (Hong Kong time) on the Listing Date provided that (i) the Share Offer has becomeunconditional in all respects; and (ii) the right of termination as described in the paragraph headed‘‘Underwriting – Underwriting arrangement and expenses – Grounds for termination’’ in this prospectushas not been exercised and has lapsed. Investors who trade our Shares on the basis of publicly availableallocation details prior to the receipt of share certificates or prior to the share certificates becoming validcertificates of title do so entirely at their own risk.

EXPECTED TIMETABLE

– iv –

This prospectus is issued by our Company solely in connection with the Share Offer and does notconstitute an offer to sell or a solicitation of an offer to buy any security other than the Offer Shares offeredby this prospectus pursuant to the Share Offer. This prospectus may not be used for the purpose of, and doesnot constitute, an offer or invitation in any other jurisdiction other than Hong Kong or in any othercircumstances. No action has been taken to permit the distribution of this prospectus in any jurisdiction otherthan Hong Kong. The distribution of this prospectus and the offering and sale of the Offer Shares in otherjurisdiction are subject to restrictions and may not be made except as permitted under the applicable securitieslaws of such jurisdiction pursuant to registration with or authorisation by the relevant securities regulatoryauthorities or an exemption therefrom.

You should rely only on the information contained in this prospectus to make your investment decision.We have not authorised anyone to provide you with information that is different from what is contained inthis prospectus. Any information or representation not contained nor made in this prospectus must not berelied on by you as having been authorised by us, the Sole Sponsor, the Joint Global Coordinators, the JointBookrunners, the Joint Lead Managers and the Underwriters, any of their respective directors, advisers,officers, employees, agents, affiliates or representatives of any of them or any other persons or partiesinvolved in the Share Offer. The contents of our Company’s website at www.ow.sg do not form part of thisprospectus.

Pages

CHARACTERISTICS OF GEM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . i

EXPECTED TIMETABLE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ii

CONTENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . v

SUMMARY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

GLOSSARY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26

FORWARD-LOOKING STATEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28

RISK FACTORS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29

INFORMATION ABOUT THIS PROSPECTUS AND THE SHARE OFFER . . . . . . . . . . . . . . . . . . . . . . . . . . 41

DIRECTORS AND PARTIES INVOLVED IN THE SHARE OFFER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45

CORPORATE INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48

INDUSTRY OVERVIEW . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50

REGULATORY OVERVIEW . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69

HISTORY, REORGANISATION AND CORPORATE STRUCTURE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88

BUSINESS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 106

RELATIONSHIP WITH CONTROLLING SHAREHOLDERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 178

CONTENTS

– v –

DIRECTORS AND SENIOR MANAGEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 181

SUBSTANTIAL SHAREHOLDERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 191

SHARE CAPITAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 193

FINANCIAL INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 196

FUTURE PLANS AND USE OF PROCEEDS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 265

UNDERWRITING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 273

STRUCTURE AND CONDITIONS OF THE SHARE OFFER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 282

HOW TO APPLY FOR PUBLIC OFFER SHARES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 288

APPENDIX I – ACCOUNTANTS’ REPORT ON THE FINANCIALINFORMATION OF OUR GROUP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-1

APPENDIX II – UNAUDITED PRO FORMA FINANCIAL INFORMATION . . . . . . . . . . . . . . . . . . . . II-1

APPENDIX III – SUMMARY OF THE CONSTITUTION OF THE COMPANYAND CAYMAN ISLANDS COMPANY LAW . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . III-1

APPENDIX IV – STATUTORY AND GENERAL INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-1

APPENDIX V – DOCUMENTS DELIVERED TO THE REGISTRAR OF COMPANIESIN HONG KONG AND AVAILABLE FOR INSPECTION . . . . . . . . . . . . . . . . . . . . V-1

CONTENTS

– vi –

This summary aims to give you an overview of the information contained in this prospectus. Since thisis a summary, it does not contain all the information that may be important to you. You should read the wholeprospectus before you decide to invest in the Offer Shares. There are risks associated with any investment.Some of the particular risks in investing in the Offer Shares are set forth in the section headed ‘‘Risk Factors’’in this prospectus. You should read that section carefully before you decide to invest in the Offer Shares.

Various expressions used in this summary are defined in the sections headed ‘‘Definitions’’ and‘‘Glossary’’ in this prospectus.

OVERVIEW

We are a one-stop after-market automotive service provider in Singapore offering comprehensive andintegrated automotive related solutions to customers. According to the Frost & Sullivan Report, we (i) rankedfirst among the independent after-market automotive service providers with a market share of approximately8.4% in terms of revenue derived from after-market automotive service provided by independent after-marketautomotive service providers in Singapore in 2018; and (ii) ranked third among the after-market automotiveservice providers with a market share of approximately 5.3% in terms of revenue derived from after-marketautomotive service in Singapore in 2018. We principally engage in the provision of a comprehensive range ofafter-market automotive services, with a focus on inspection, maintenance and repair services. We also engage in(i) offering short-term and long-term car rental services; and (ii) supplying passenger car spare parts, accessoriesand automotive equipment to customers in Singapore and overseas countries (i.e. Sri Lanka and Myanmar).

OUR SERVICES

Our principal business can be broadly categorised as follows:

(i) Provision of after-market automotive services

We principally engage in the provision of a comprehensive range of after-market automotive services,with a focus on inspection, maintenance and repair services. We may also from time to time providemodification, tuning and grooming services to our customers in Singapore, the revenue derived from theprovision of such service accounted for less than 1.0% of our total revenue during the Track Record Period.

(ii) Provision of car rental services

Our car rental services comprise (i) short-term rentals and (ii) long-term rentals. In addition, we offervarious value-added services such as free towing service and battery recovery, courtesy car, and vehicledelivery, if required.

(iii) Supply of passenger car spare parts, accessories and automotive equipment

We supply passenger car spare parts and accessories (such as spark plug and navigator control unit)and automotive equipment to customers in Singapore and overseas countries (i.e. Sri Lanka and Myanmar).

OUR SERVICE CENTRES AND PAINT WORKSHOP

During the Track Record Period, we operated three service centres and one paint workshop in Singapore.Our three service centres included Kung Chong Service Centre (Headquarters), Serangoon Service Centre andUpper Thomson Service Centre. Our service centres are equipped with cutting-edge diagnostic equipment andfacilities for provision of all after-market automotive services except spray painting services which shall behandled by our paint workshop. For further details about our service centres and paint workshop, please refer tothe paragraph headed ‘‘Business – Our service centres and paint workshop’’ in this prospectus. As at the LatestPracticable Date, in light of the expiry of the tenancy of our Upper Thomson Service Centre and the anticipatedincrease in market demand, we have relocated our Upper Thomson Service Centre to a new premise with a largerfloor area where we set up our Tagore Service Centre in order to accommodate more hoists and parking spacesin late August 2019. For further details of our relocation plan, please refer to the paragraph headed ‘‘Business –

Business strategies – Expanding our servicing capacity – Relocation of our Upper Thomson Service Centre’’ inthis prospectus.

SUMMARY

– 1 –

In view of the anticipated increasing market demand, we also plan to expand our servicing capacity bysetting up a new service centre and satellite workshop in Singapore, details of which are set out in the paragraphheaded ‘‘Business – Business strategies’’ in this prospectus.

OUR COMPETITIVE STRENGTHS

Our Directors believe that our success and market position in Singapore are derived from our followingcompetitive strengths: (i) we are a leading after-market automotive service provider in Singapore; (ii) we havestrong technical knowledge and after-market service capabilities; (iii) we are able to provide high quality after-market automotive services in a timely manner; (iv) we have developed a broad and diverse loyal customer baseand collaborated with an established insurance company; (v) we have strong relationships with our suppliers; and(vi) we have an experienced, dedicated and capable management team.

For further details, please refer to the paragraph headed ‘‘Business – Our competitive strengths’’ in thisprospectus.

OUR BUSINESS STRATEGIES

Our goal is to maintain our market position as a leading after-market automotive service provider inSingapore by implementing the following strategies: (i) expanding our servicing capacity; (ii) continuing to growour rental fleet to complement our after-market automotive business; (iii) strengthening our service capabilitiesand operating efficiencies; and (iv) brand building through strengthening our relationships with our existingcustomers and expanding our customer base.

For further details, please refer to the paragraph headed ‘‘Business – Business strategies’’ in thisprospectus.

OUR CUSTOMERS

During the Track Record Period, we had a large, rapidly growing and loyal customer base consisting ofindividual and corporate customers. Our customers include (i) automotive dealers; (ii) insurance companies; (iii)car service centres; (iv) car leasing companies; and (v) individuals or other corporations.

For FY2016, FY2017, FY2018 and 1Q2019, sales to our top five customers accounted for approximately13.6%, 19.8%, 28.8% and 28.6% of our total revenue respectively. Sales to our largest customer accounted forapproximately 5.3%, 8.0%, 11.3% and 11.5% respectively of our total revenue during the same periods.

CO-OPERATION WITH CUSTOMER F, A RENOWNED INSURANCE COMPANY, FOR WARRANTYRELATED BUSINESS

As required by the Monetary Authority of Singapore, motor warranty related business must be provided byan insurer licensed by the Monetary Authority of Singapore. Customer F is a wholly-owned subsidiary of aninternational insurance group headquartered in the United States of America. It is also a general insurer licensedby the Monetary Authority of Singapore which achieved a gross written premium of S$145 million in 2017 andranked the 8th largest insurer in the general insurance industry in Singapore. Prior to the restructuring of ourmotor warranty programmes, we had worked with Customer F in various occasions in relation to insuranceaccident repair services where our customers carrying Customer F’s motor insurance may require us to liaisewith Customer F for repair services. Through our previous working relationship with them, we became awarethat Customer F was interested in developing a motor warranty programme and was interested in collaboratingwith us to provide the programme.

SUMMARY

– 2 –

In light of the above and the requirement of the Monetary Authority of Singapore, we restructured ourmotor warranty business in January 2017 by entering into an Exclusive Service Agreement with Customer F toact as its exclusive service provider for an exclusive period of six years commencing on 1 January 2017.Revenue generated from the provision of our after-market automotive services to car owners who participate inCustomer F’s motor warranty programme (including services covered and not covered under the motor warrantyprogramme) amounted to approximately S$5.0 million, S$6.0 million and S$1.4 million, representingapproximately 31.2%, 42.1% and 42.1% of our total revenue generated from after-market automotive servicesfor FY2017, FY2018 and 1Q2019, respectively.

For further details of our co-operation with Customer F, please refer to the paragraph headed ‘‘Business –

Our business – Impact of new arrangement with Customer F’’ in this prospectus.

OUR SUPPLIERS

During the Track Record Period, our major suppliers were (i) suppliers of passenger car spare parts; (ii)suppliers of accessories; and (iii) suppliers of passenger car consumables. Save for those agreements disclosed inthe paragraph headed ‘‘Business – Suppliers and procurement’’ in this prospectus, we typically do not enter intoany long-term agreements with our major suppliers.

For FY2016, FY2017, FY2018 and 1Q2019, the amount of purchases from our top five suppliers accountedfor approximately 33.2%, 41.9%, 42.3% and 35.9% of our total amount of purchases respectively, and theamount of purchases from our largest supplier accounted for approximately 9.5%, 12.8%, 14.6% and 17.0%respectively, of our total amount of purchases during the same periods.

COMPETITIVE LANDSCAPE

The after-market automotive service industry in Singapore is highly fragmented. The degree ofconcentration of our major businesses in FY2018 are set out below:

Top fiveservice

providers Our Group

Maintenance and Repair– All types of passenger cars 29.6% 5.3%– Luxury and ultra-luxury passenger cars 71.9% 7.9%

Top 10service

providers Our Group

Car rental services 30.7% 1.4%

Source: Frost & Sullivan

Note: Concentration in percentage is calculated by dividing the revenue of (i) the top five service providers in the after-marketautomotive services industry in Singapore; (ii) the top 10 service providers in the car rental industry in Singapore; and (iii) ourGroup derived from each industry by the total revenue of each industry.

For further details on the competitive landscape of the industries in which we operate in, please refer to thesection headed ‘‘Industry Overview’’ in this prospectus.

SUMMARY

– 3 –

USE OF PROCEEDS

The net proceeds from the Share Offer, after deducting related expenses, are estimated to be HK$32.5million. We intend that the net proceeds will be applied as follows:

For theperiod fromthe LatestPracticable

Date to31 December

2019

For theperiod from1 January

2020 to30 June

2020

For theperiod from1 July 2020

to31 December

2020


2021 to30 June

2021 Total

Approximate% of thetotal netproceeds

(HK$’million)

(HK$’million)

(HK$’million)

(HK$’million)

(HK$’million)

Expanding our servicing capacity– Setting up new service centre 10.0 – – – 10.0 30.8%– Setting up new satellite workshop – 3.5 – – 3.5 10.8%

Growing our rental fleet – 6.0 3.5 – 9.5 29.2%Strengthening our service capabilities and

operating efficiencies– Enhancing costs efficiency by purchasing

spare parts and accessories in bulk 3.3 – – – 3.3 10.2%– Training of employees – 0.3 0.2 0.2 0.7 2.2%– Recruitment of employees 0.3 – – – 0.3 0.9%– Upgrading our information

technology and equipment 0.5 1.0 – – 1.5 4.6%Brand building through strengthening our

relationshipswith our existing customers andexpanding our customer base 0.5 – – – 0.5 1.5%

Funding of our working capital andgeneral corporate purpose 1.0 1.0 0.75 0.45 3.2 9.8%

Total 15.6 11.8 4.45 0.65 32.5 100.0%

For details, please refer to the section headed ‘‘Future Plans and Use of Proceeds’’ in this prospectus.

SUMMARY FINANCIAL INFORMATION

For further discussion and analysis of our financial information, please refer to the section headed‘‘Financial Information’’ in this prospectus.

Highlight of our consolidated statements of profit or loss and other comprehensive income

FY2016 FY2017 Change FY2018 Change 1Q2018 1Q2019 ChangeS$’000 S$’000 % S$’000 % S$’000 S$’000 %

(unaudited)

Revenue 16,335 18,641 14.1 17,985 (3.5) 4,285 4,357 1.7Gross profit 6,763 8,667 28.2 8,961 3.4 1,929 2,257 17.0Profit/(Loss) for the year 1,429 1,906 33.4 (243) (112.7) 60 131 118.3

SUMMARY

– 4 –

Non-HKFRSs measures

To supplement our historical financial information, which is prepared under HKFRSs, we include adjustedprofit for the year in this prospectus which is not required by or prepared in accordance with HKFRSs. Webelieve that these non-HKFRSs measures facilitate comparison of operating performance from the angles of (i)period to period; and (ii) company to company by taking out the impact of Listing expenses. However, whenassessing our operating and financial performance, such information relating to non-HKFRSs measures shouldnot be assessed in isolation or as a substitute for our profit for the year or any other operating performancemeasure that is calculated in accordance with HKFRSs.

FY2016 FY2017 FY2018 1Q2018 1Q2019S$’000 S$’000 S$’000 S$’000 S$’000

(unaudited)

Profit/(Loss) for the year 1,429 1,906 (243) 60 131Add:Listing expenses – – 2,494 185 317

Adjusted profit for the year 1,429 1,906 2,251 245 448

Revenue and gross profit margin

Set out in this paragraph are the analysis of our revenue and gross profit margin by business segments.

The following table sets forth our revenue by business segments during the Track Record Period:

FY2016 FY2017 FY20181Q2018

(unaudited) 1Q2019S$’000 % S$’000 % S$’000 % S$’000 % S$’000 %

After-market automotive services–Inspection, maintenance and

non-insured repair services 12,876 78.8 12,782 68.6 9,993 55.6 2,611 60.9 2,626 60.3–Insured repair services 995 6.1 2,110 11.3 2,750 15.3 447 10.4 476 10.9–Warranty related business 1,248 7.6 1,102 5.9 1,510 8.4 439 10.3 304 7.0

Sub-total 15,119 92.5 15,994 85.8 14,253 79.3 3,497 81.6 3,406 78.2

Car rental services 618 3.8 2,252 12.1 2,454 13.6 648 15.1 634 14.6

Supply of passenger car spareparts, accessories andautomotive equipment 598 3.7 395 2.1 1,278 7.1 140 3.3 317 7.2

Total 16,335 100.0 18,641 100.0 17,985 100.0 4,285 100.0 4,357 100.0

SUMMARY

– 5 –

Our revenue increased from approximately S$16.3 million in FY2016 to approximately S$18.6 million inFY2017 which was mainly due to (i) the increase in revenue from the provision of after-market automotiveservices from approximately S$15.1 million in FY2016 to approximately S$16.0 million in FY2017, which wasmainly due to increase in the number of insured repair jobs; and (ii) the increase in revenue from car rentalservices which was mainly due to the increase in number of long-term rental passenger cars that were rented outto a car sharing company as we entered into rental contracts with the car sharing company in FY2016 and firstquarter of FY2017. The increase was partially offset by the slight decrease in revenue from the supply ofpassenger car spare parts, accessories and automotive equipment segment.

Our revenue decreased from approximately S$18.6 million in FY2017 to approximately S$18.0 million inFY2018 which was mainly due to the decrease in revenue from the provision of after-market automotive servicesfrom approximately S$16.0 million in FY2017 to S$14.3 million in FY2018 as a result of a decrease in revenuefrom the provision of inspection, maintenance and non-insured repair services. The decrease was partially offsetby (i) the increase in revenue from car rental services which was mainly due to the full year revenuecontribution from the 50 additional long-term rental passenger cars to Customer E after March 2017; and (ii) theincrease in revenue from the supply of passenger car spare parts, accessories and automotive equipment as wesecured a new 15 years licensing agreement where we sold an automotive equipment to a new customer and theincrease in sales of passenger car spare parts and accessories in FY2018.

Our revenue remained relatively stable at approximately S$4.3 million in 1Q2018 and 1Q2019,respectively. Revenue from the provision of after-market automotive services decreased slightly byapproximately S$91,000 as a result of the decrease in revenue from warranty related business by approximatelyS$0.1 million mainly due to the decrease in the average servicing fee per vehicle from warranty-related business.Such decrease was partially offset by the increase in revenue from the provision of insured repair servicesmainly due to the increase in the average servicing fee per vehicle from insured repair services. Revenue fromthe provision of inspection, maintenance and non-insured repair services remained relatively stable atapproximately S$2.6 million for 1Q2018 and 1Q2019, respectively. The decrease was partially offset by theincrease in revenue from the supply of passenger car spare parts and accessories segment. Our revenue from carrental services remained relatively stable in 1Q2018 and 1Q2019 respectively.

For further details on revenue of each of the business segments, please refer to the paragraph headed‘‘Financial Information – Description of selected components of consolidated statements of profit or loss andother comprehensive income – Revenue by business segments’’ in this prospectus.

The following table sets forth our gross profit and gross profit margin during the Track Record Period(Note 1):

FY2016 FY2017 FY20181Q2018

(unaudited) 1Q2019

Grossprofit

Grossprofit

marginGrossprofit

Grossprofit

marginGrossprofit

Grossprofit

marginGrossprofit

Grossprofit

marginGrossprofit

Grossprofit

marginS$’000 % S$’000 % S$’000 % S$’000 % S$’000 %

After-market automotive services 6,389 42.3 7,746 48.4 7,299 51.2 1,650 47.2 1,960 57.5

Car rental services (94) Note 2 842 37.4 862 35.1 251 38.7 234 36.9

Supply of passenger car spareparts, accessories andautomotive equipment 468 78.3 79 20.0 800 62.6 28 20.0 63 20.0

Total gross profit/Grossprofit margin 6,763 41.4 8,667 46.5 8,961 49.8 1,929 45.0 2,257 51.8

SUMMARY

– 6 –

Notes:

1. As the workflow and nature of service provided for each business segment under the after-market automotive services aresimilar, the Group is not able to provide a further breakdown of its gross profit and gross profit margin as (a) the operationteam and workshop technicians; and (b) the machine and equipment used in providing after-market automotive services areshared among (i) inspection, maintenance and repair of non-insured repair services, (ii) insured repair services; and (iii)warranty related business.

2. There was a gross loss in the relevant period.

Our gross profit margin increased from approximately 41.4% in FY2016 to 46.5% in FY2017 which wasmainly due to the increase in gross profit margin of (i) after-market automotive services because of the decreasein average purchase prices for passenger car spare parts, accessories and consumables used in the provision ofour after-market automotive services as higher purchase discounts were given to us by our suppliers as ourpurchase volume increased in FY2017 and the increase in insured repair jobs which have a higher markup asthey generally involve higher complexity; (ii) car rental services due to the increase in revenue has outweighedthe increase in direct depreciation expenses as the number of long-term rental passenger cars rented to the carsharing company has increased by 50 units after March 2017. The increases were partially offset by the decreasein the gross profit margin of supply of passenger car spare parts, accessories and automotive equipment due tothe mark up for spare parts and accessories are lower than the mark up for automotive equipment.

Our gross profit margin increased from approximately 46.5% in FY2017 to approximately 49.8% inFY2018 which was mainly due to the increase in gross profit margin of (i) after-market automotive servicesbecause of the increase in insured repair jobs in FY2018 which have a higher mark-up as they generally involvehigher complexity; and (ii) supply of passenger car spare parts, accessories and automotive equipment as wesupplied automotive equipment in addition to passenger car spare parts and accessories in FY2018. The increasewas partially offset by the decrease in the gross profit margin of the provision of car rental services fromapproximately 37.4% for FY2017 to approximately 35.1% for FY2018.

Our gross profit margin increased from approximately 45.0% in 1Q2018 to approximately 51.8% in1Q2019. This was mainly due to the increase in gross profit margin of after-market automotive services as aresult of the increase in our overall average servicing fees per vehicle.

For further details on gross profit and gross profit margin of each of the business segments, please refer tothe paragraph headed ‘‘Financial Information – Description of selected components of consolidated statements ofprofit or loss and other comprehensive income – Gross profit and gross profit margin’’ in this prospectus.

Highlight of our consolidated statements of financial position

As at 31 DecemberAs at

31 March20192016 2017 2018

S$’000 S$’000 S$’000 S$’000

Current assets 5,902 9,980 9,221 9,057Current liabilities (6,213) (8,450) (6,610) (8,064)Net current (liabilities)/assets (311) 1,530 2,611 993Non-current assets 7,205 12,506 10,532 12,923Non-current liabilities (4,271) (8,281) (6,238) (6,880)

Total equity 2,623 5,755 6,905 7,036

SUMMARY

– 7 –

Our net current assets as at 31 March 2019 decreased by approximately S$1.6 million as a result of therecognition of the current portion of the lease liabilities for our leased properties of approximately S$1.6 millionsince the adoption of HKFRS 16 on 1 January 2019. Our total equity as at 31 March 2019 remained relativelystable as compared to 31 December 2018.

We recorded net current liabilities in the amount of approximately S$0.3 million as at 31 December 2016which was mainly due to the increase in current portion of the finance lease obligations resulting from theacquisition of passenger cars in FY2016.

Highlight of our consolidated statements of cash flows

FY2016 FY2017 FY2018 1Q2018 1Q2019S$’000 S$’000 S$’000 S$’000 S$’000

(unaudited)

Cash and cash equivalents atbeginning of year 1,119 1,810 4,071 4,071 3,031

Operating profit before workingcapital changes 3,185 4,639 2,475 692 1,230

Operating cash flows after workingcapital changes 2,887 3,273 184 (880) 842

Net cash generated from/(used in)operating activities 2,566 3,020 (266) (966) 817

Net cash used in investingactivities (1,099) (786) (102) (8) (82)

Net cash (used in)/generated fromfinancing activities (776) 27 (672) 1,514 (1,085)

Cash and cash equivalents at endof year 1,810 4,071 3,031 4,611 2,681

The net cash flows used in operating activities in FY2018 was mainly due to (i) the increase in ourprepayments from the capitalisation of equity portion of the Listing expenses; (ii) the decrease in our tradepayables as we sped up our payments to our suppliers; and (iii) the decrease in our other payables due torepayments made to Customer F. These effects were partially offset by (i) the decrease in inventories and (ii) thedecrease in our trade receivables. The net cash flows used in investing activities in FY2018 was mainly due tothe purchase of computers, software and hardware. The net cash flows used in financing activities in FY2018was mainly due to (i) the repayment of finance lease obligations and (ii) the acquisition of the remaining 45%equity interests in Optima Carz by the Group, which was partially offset by (i) the capital injection from API;and (ii) net drawdown of bank borrowings.

The net cash flows generated from operating activities in 1Q2019 was mainly attributed to (i) the increasein our profit before income tax expenses and (ii) the absence of repayments made to Customer F in 1Q2019 ascompared to 1Q2018. The net cash flows used in investing activities in 1Q2019 was mainly attributed to thepurchase of computers, software and hardware. The net cash flows used in financing activities in 1Q2019 wasmainly due to the repayment of lease liabilities.

For further details regarding the major items affecting our cash flows during the Track Record Period,please refer to the paragraph headed ‘‘Financial Information – Liquidity and capital resources – Cash flows’’ inthis prospectus.

SUMMARY

– 8 –

Key financial ratios

As at/For the year ended

As at/Forthe threemonthsended

31 December 31 March20192016 2017 2018

Gross profit margin 41.4% 46.5% 49.8% 51.8%Net profit margin 8.7% 10.2% N/A(Note 1) 3.0%Current ratio 0.9 1.2 1.4 1.1Gearing ratio 1.9 1.7 1.1 1.0Net debt to equity ratio 1.2 1.0 0.7 0.7Interest coverage 19.7 8.2 1.3 3.4Return on total assets 10.9% 8.5% N/A(Note 1) N/A(Note 2)

Return on equity 54.5% 33.1% N/A(Note 1) N/A(Note 2)

Notes:

1. Our Group was loss-making in FY2018 due to the non-recurring Listing expenses.

2. Results are not meaningful because the net profit for the period only represented three months of the period for the relevantyear.

INFORMATION OF SHAREHOLDERS

Pre-IPO Investments

Optima Werkz and Mr. Chong, among others, entered into a convertible loan agreement dated 18 January2017. On 19 December 2017, upon exercise of the conversion right, Optima Werkz allotted and issued 34,000shares, all credited as fully paid, to Mr. Chong. Immediately following the completion of the Share Offer and theCapitalisation Issue (assuming that the Offer Size Adjustment Option is not exercised at all), Mr. Chong will beinterested in 5.70% of the issued share capital of our Company. Mr. Chong has engaged in investment bankingand corporate advisory industry for over 19 years and has extensive investment experience and business networkover Asia. Mr. Chong was an Independent Third Party prior to his investment in our Group.

Optima Werkz and Ms. Lam, among others, entered into a convertible loan agreement dated 1 February2017. On 19 December 2017, upon exercise of the conversion right, Optima Werkz allotted and issued 26,000shares, all credited as fully paid, to Ms. Lam. Immediately following the completion of the Share Offer and theCapitalisation Issue (assuming that the Offer Size Adjustment Option is not exercised at all), Ms. Lam will beinterested in approximately 4.36% of the issued share capital of our Company. Ms. Lam has over 20 years ofexperience in banking industry and was an Independent Third Party prior to her investment in our Group.

Optima Werkz and Mr. Seow, among others, entered into a convertible loan agreement dated 20 February2017. On 19 December 2017, upon exercise of the conversion right, Optima Werkz allotted and issued 12,825shares, all credited as fully paid, to Mr. Seow. Immediately following the completion of the Share Offer and theCapitalisation Issue (assuming that the Offer Size Adjustment Option is not exercised at all), Mr. Seow will beinterested in approximately 2.15% of the issued share capital of our Company. Mr. Seow has over 20 years ofexperience in building industry and was an Independent Third Party prior to his investment in our Group.

SUMMARY

– 9 –

Optima Werkz and Ms. Ngo, among others, entered into a convertible loan agreement dated 3 March 2017.On 19 December 2017, upon exercise of the said conversion right, Optima Werkz allotted and issued 27,175shares, all credited as fully paid, to Ms. Ngo. Immediately following the completion of the Share Offer and theCapitalisation Issue (assuming that the Offer Size Adjustment Option is not exercised at all), Ms. Ngo will beinterested in approximately 4.56% of the issued share capital of our Company. Ms. Ngo has about 10 years ofexperience in trading business and was an Independent Third Party prior to her investment in our Group.

Our Company, API and Mr. Ang (as warrantor) entered into the API Subscription Agreement, pursuant towhich the API conditionally agreed to subscribe for 50,000 Shares (representing 5.00% of the enlarged issuedshare capital of our Company at the time of completion of the API Investment) for a total cash consideration ofHK$10,000,000. Immediately following the completion of the Share Offer and the Capitalisation Issue (assumingthat the Offer Size Adjustment Option is not exercised at all), API will be interested in approximately 3.53% ofthe issued share capital of our Company. API is a company incorporated in the BVI with limited liability and issolely owned by Mr. Chan, who was an Independent Third Party prior to the API Investment. Mr. Chan hasengaged in financial leasing industry in the PRC for 10 years and has extensive investment experience andestablished business network in the PRC.

The Pre-IPO Investors’ investments and commitment in our Group demonstrated their confidence in ourbusiness prospects and growth potential. With such investments and commitment in our Group, our Directorsbelieve that we could benefit from (i) the additional capital that would be provided by the Pre-IPO Investmentsin our Group, (ii) the diversified business connections of the Pre-IPO Investors and (iii) the diversifiedknowledge and experience of the Pre-IPO Investors in the way that they could share with us on their insightsaccumulated in their respective industry sectors which assist us in understanding the development and status ofthe macro-economy in Asia.

For further details of the Pre-IPO Investment by the Pre-IPO Investors, please see the paragraph headed‘‘History, Reorganisation and Corporate Structure – Pre-IPO Investments’’ in this prospectus.

Our Controlling Shareholders

Immediately following completion of the Capitalisation Issue and the Share Offer (without taking intoaccount any Shares which may be issued upon the exercise of the Offer Size Adjustment Option, and the optionswhich may be granted under the Share Option Scheme), our Company will be owned as to approximately 44.56%by Red Link, which is in turn owned as to approximately 54.70% and 45.30% by each of Ms. FF Lim andMr. Ang, respectively. Red Link is an investment holding company.

Ms. FF Lim and Mr. Ang were the founders of our Group and each of them has decided to restrict theirability to exercise direct control over our Company by holding their interests through Red Link. Ms. FF Lim andMr. Ang also executed the Acting in Concert Confirmation, whereby, among other things, they confirmed thatduring the Track Record Period and up to the date of the Acting in Concert Confirmation, they have been actingin concert with each other in controlling the members of our Group; and have further undertaken that, during theperiod when they remain interested in the share capital of any members of our Group, until entering into awritten agreement to terminate the Acting in Concert Confirmation, they will maintain the acting-in-concertrelationship. As such, Ms. FF Lim, Mr. Ang and Red Link are regarded as a group of Controlling Shareholdersof our Company under the GEM Listing Rules.

For details of the background of the Controlling Shareholders, please refer to the sections headed ‘‘History,Reorganisation and Corporate Structure’’ and ‘‘Directors and Senior Management’’ in this prospectus.

RECENT DEVELOPMENT AND NO MATERIAL ADVERSE CHANGE

Our business model has remained unchanged and our revenue and cost structure has remained stable since31 March 2019. For the period from 1 April 2019 to the Latest Practicable Date, we provided after-marketautomotive services to approximately 12,700 units of passenger cars and the utilisation rate of our rental fleet of142 passenger cars has remained relatively stable compared to FY2018.

SUMMARY

– 10 –

Our Group recorded a total revenue of approximately S$10.9 million for the seven months ended 31 July2019, representing an increase of about 4.8% as compared to the revenue for the seven months ended 31 July2018, which was mainly due to the increase in (i) revenue from the provision of inspection, maintenance andnon-insured repair service mainly attributable to our Group’s entering into 36 fleet servicing agreements with 36different car rental operators in Singapore since February 2019; and (ii) revenue from supply of passenger carspare parts, accessories and automotive equipment mainly attributable to the purchase from Customer I.

The aforementioned financial information for the seven months ended 31 July 2019 is extracted from ourunaudited consolidated management accounts as of and for the seven months ended 31 July 2019 of which ourDirectors are responsible for its preparation in accordance with Hong Kong Accounting Standard 34 ‘‘InterimFinancial Reporting’’ issued by Hong Kong Institute of Certified Public Accountants. Our unaudited consolidatedmanagement accounts as of and for the seven months ended 31 July 2019 were reviewed by our reportingaccountants in accordance with Hong Kong Standard on Review Engagement 2410 ‘‘Review of Interim FinancialInformation Performed by the Independent Auditor of the Entity’’ issued by Hong Kong Institute of CertifiedPublic Accountants.

Based on the unaudited management accounts of our Group for the period from 1 April 2019 to 31 July2019, our average monthly revenue over such period has increased slightly as compared to the average monthlyrevenue for FY2018. In addition, our gross profit margin for the period from 1 April 2019 to 31 July 2019 hasincreased slightly as compared to FY2018 due to the increase in average servicing fee in our after-marketautomotive services. Save for the Listing expenses as disclosed in the paragraph headed ‘‘Listing expenses’’ inthis section, we did not have any material non-recurrent items in our consolidated statement of profit or loss andother comprehensive income for the seven months ended 31 July 2019. Notwithstanding the above, our Groupexpects that our financial results for the financial year ending 31 December 2019 will be negativelyimpacted by the non-recurring Listing expenses to be recognised as expenses in our consolidated statementof profit or loss and other comprehensive income.

As at 31 July 2019, the latest practicable date for the purpose of the indebtedness statement for thisprospectus, we had outstanding bank borrowings of approximately S$0.9 million and outstanding lease liabilitiesof approximately S$7.9 million. As at 31 July 2019, our Group had approximately S$0.4 million of unutilisedbank borrowing facilities. Barring unforeseen circumstances, we do not have any further plan for materialadditional debt financing for the financial year ending 31 December 2019.

As part of our strategy to expand our customer base, we have entered into 36 fleet servicing agreementswith 36 different car rental operators in Singapore during the period from February 2019 and up to the LatestPracticable Date pursuant to which we shall provide repair and maintenance services to their rental vehicles for aperiod of one to two years. The car rental operators will inform us the number of their rental vehicles whichrequire our repair and maintenance services from time to time. As at the Latest Practicable Date, we wereinformed by the car rental operators to provide repair and maintenance services to a total of 1,540 rentalvehicles. We have also entered into a servicing agreement with a commercial transport company in March 2019pursuant to which we shall provide servicing to 60 of their commercial vehicles for a period of two years. Forfurther details, please refer to the paragraph headed ‘‘Business – Business strategies – Brand building throughstrengthening our relationships with our existing customers and expanding our customer base’’ in this prospectus.

Save as disclosed in this paragraph and in the paragraph headed ‘‘Listing expenses’’ in this section, ourDirectors confirm that, since 31 March 2019 and up to the Latest Practicable Date, there had not been anymaterial adverse change in the market conditions or the industry and environment in which we operate that hadmaterially and adversely affect our financial or operating position.

LISTING EXPENSES

Our Directors estimate that the total amount of expenses in relation to the Listing is approximately S$4.4million, of which approximately S$1.7 million is expected to be funded by the Pre-IPO Investments. Thisincludes approximately S$1.5 million which is directly attributable to the issue of the Offer Shares and isexpected to be accounted for as a deduction from equity upon Listing. The remaining amount of approximatelyS$2.9 million, which cannot be so deducted, will be charged to our profit or loss. Out of the approximatelyS$2.9 million that will be charged to profit or loss, nil, nil, approximately S$2.5 million and approximatelyS$0.3 million have been charged in FY2016, FY2017, FY2018 and 1Q2019 respectively, and approximatelyS$0.1 million is expected to be incurred for the financial year ending 31 December 2019.

SUMMARY

– 11 –

The recognition of Listing expenses is expected to affect our financial results for the financial year ending31 December 2019. The estimated Listing expenses of our Group are subject to adjustments based on the actualamount of expenses incurred/to be incurred by our Company upon completion of the Listing. Our Directorswould like to emphasise that such cost is a current estimate for reference only, and the final amount to berecognised in the consolidated statement of profit or loss for the financial year ending 31 December 2019 of ourGroup or to be capitalised is subject to adjustment based on audit and the then changes in variables andassumptions.

REASONS FOR SHARE OFFER

Our Directors believe the estimated net proceeds from the Share Offer will provide our Group withfinancial resources for the execution of our business strategies and plans as set out in this prospectus, which willhelp us pursue our business objective.

Our Directors consider that the Listing may act as a fund-raising platform for our Group. Our Directorsbelieve that this way of financing is beneficial to the overall business development and financial performance ofour Group, which in turn will maximise Shareholders’ return.

Our Directors believe that through the Listing, the internal control and corporate governance practices ofour Group could be enhanced and the transparency in our operations and financial reporting could be increased.Following the Listing, we are required to meet high standards with respect to internal control and corporategovernance, which are instrumental in strengthening the overall control and supervision of our Group. This couldalso increase our customers’ and suppliers’ confidence in us and attract potential customers.

SHARE OFFER STATISTICS

Based on theOffer Price ofHK$0.20 per

Share

Based on theOffer Price ofHK$0.26 per

Share

Market capitalisation of our Shares (Note 1) HK$170 million HK$221 million

Unaudited pro forma adjusted consolidated net tangible assetsattributable to the owners of the Company per share (Note 2) HK$0.09 HK$0.11

Notes:

1. The calculation of market capitalisation is based on 850,000,000 Shares expected to be in issue immediately after completionof the Share Offer and the Capitalisation Issue but without taking into account any Shares which may be issued pursuant to theexercise of the Offer Size Adjustment Option and the Share Option Scheme.

2. The unaudited pro forma adjusted consolidated net tangible assets attributable to the owners of our Company per Share iscalculated based on 850,000,000 Shares in issue immediately following the completion of the Capitalisation Issue and theproposed Share Offer assuming the proposed Share Offer had been completed on 11 October 2019 and no exercise of the OfferSize Adjustment Option or any options may be granted under the Share Option Scheme and no Shares which may be allotted,issued or repurchased by the Company pursuant to the general mandates for the allotment and issue or repurchase of Sharesreferred to in Appendix IV to this prospectus or otherwise.

DIVIDEND

No dividend has been paid or declared by our Company since its incorporation. The dividend in FY2016,FY2017 and FY2018 represented final dividends declared by the following subsidiaries to its then soleshareholders before the Reorganisation:

On 30 November 2016, Optima Carz, one of our operating subsidiaries, declared interim dividend ofapproximately S$150,000, respectively, to Optima Werkz and Mr. Chew, which was its then shareholders.

SUMMARY

– 12 –

On 20 January 2017, Optima Carz, one of our operating subsidiaries, declared interim dividend ofapproximately S$220,000, respectively, to Optima Werkz and Mr. Chew, which was its then shareholders.

On 28 August 2017, Optima Carz, one of our operating subsidiaries, declared interim dividend ofapproximately S$150,000, to Optima Werkz and Mr. Chew, which was its then shareholders.

On 2 November 2017, Optima Werkz, one of our operating subsidiaries, declared interim dividend ofapproximately S$200,000, respectively, to Mr. Lee, Mr. Ang, Mr. Chee and Ms. FF Lim, which was its thenshareholders.

On 14 June 2018, Optima Carz, one of our operating subsidiaries, declared interim dividend ofapproximately S$200,000, to Optima Werkz, which was its then shareholder.

The declaration and payment of future dividends will be subject to the decision of our Board having regardto various factors, including but not limited to our operation and financial performance, profitability, businessdevelopment, prospects, capital requirements, and economic outlook. Subject to the Companies Law and ourArticles of Association, our Company may in a general meeting declare dividends, but no dividends shall exceedthe amount recommended by our Board. Our Board may, subject to our Articles of Association, from time totime, pay to our shareholders such interim dividends as appear to our Board to be justified by the financialconditions and the profits of our Company. Our Board may in addition from time to time declare and pay specialdividends of such amounts and on such dates and out of such distributable funds of our Company as it thinks fit.The historical dividend payments may not be indicative of future dividend trends. We do not have anypredetermined dividend payout ratio.

HIGHLIGHTS OF RISK FACTORS

Our business is subject to a number of risks and potential investors are advised to read the entire sectionheaded ‘‘Risk Factors’’ carefully before making any investment decisions in the Offer Shares. Some of the majorrisks we face include, among others, (i) imposition of laws or regulations restricting the carrying on of ourbusiness, government policies on passenger car purchases and ownership for restricting road use in Singapore, ormeasures to encourage the use of public transport, may have a material adverse effect on our business; (ii) ourbusiness, financial condition and results of operations may be adversely affected by our reputation, consumer’sperception of the quality of our services, any negative publicity, failure to maintain and/or enhance ourreputation, or failure to deal with customer complaints; (iii) we place reliance on our cooperation with CustomerF to provide after-market automotive services to customers who participate in Customer F’s motor warrantyprogramme and the implementation of our expansion plans. Any adverse change in our business relationship withCustomer F could negatively affect our business operation and our expansion plans; (iv) we rely on a constantsupply of experienced and skilled staff; (v) the retention of certain key personnel is critical to our success, andthe loss of any such key personnel may impair our ability to manage our business and operations effectively; (vi)we do not manufacture the spare parts and accessories we use in our after-market automotive business and hencerely on our suppliers for the supply of such products; (vii) the properties of our service centres and paintworkshop are not owned by our Group; (viii) our car rental services business requires a large amount of capitalto finance the expansion and replenishment of our rental passenger cars and the overall expansion of ourbusiness; failure to manage our liquidity and cash flows or inability to obtain additional financing in the futuremay materially and adversely affect our business, results of operations and financial condition; (ix) ourexpansion plans may not be implemented successfully or be achieved within the expected time frame or withinthe estimated budget, which may adversely affect our ability to perform our contractual obligations andprospects; (x) our financial condition and results of operations could be negatively affected if we are unable tocollect our trade receivables in a timely manner; and (xi) we face risks related to liabilities resulting from theuse of our rental passenger cars by our customers.

For further details, please refer to the section headed ‘‘Risk Factors’’ in this prospectus.

SUMMARY

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Unless the context otherwise requires, the following expressions have the following meanings in thisprospectus.

‘‘Accountants’ Report’’ the accountants’ report on our Group set out in Appendix I to thisprospectus

‘‘ACRA Portal’’ the business filing system operated by the Accounting and CorporateRegulatory Authority, the national regulator of business entities,public accountants and corporate service providers in Singapore

‘‘Acting in Concert Confirmation’’ the deed of acting in concert dated 22 June 2018 executed by Ms. FFLim and Mr. Ang, in relation to their confirmation of the existenceof certain acting in concert arrangements. For details, please refer tothe paragraph headed ‘‘Relationship with Controlling Shareholders –

Our Controlling Shareholders’’ in this prospectus

‘‘affiliate(s)’’ with respect to any person, any other person(s), directly orindirectly, controlling or controlled by or under direct or indirectcommon control with such specified person

‘‘API’’ Auspicious Profit International Limited, a company incorporated inthe BVI with limited liability on 21 February 2018, which is one ofour Shareholders

‘‘API Investment’’ the subscription of 50,000 new Shares by API for a total cashconsideration of HK$10,000,000, details of which are set out in theparagraph headed ‘‘History, Reorganisation and Corporate Structure– Pre-IPO Investments – API Investment’’ in this prospectus

‘‘API Subscription Agreement’’ the share subscription agreement dated 23 March 2018 entered intoamong API, our Company, and Mr. Ang in respect of the APIInvestment, details of which are set out in the paragraph headed‘‘History, Reorganisation and Corporate Structure – Pre-IPOInvestments – API Investment’’ in this prospectus

‘‘Application Form(s)’’ WHITE Application Form(s) and YELLOW Application Form(s) or,where the context requires, any of them relating to the Public Offer

‘‘Aristo Securities’’ Aristo Securities Limited, a licensed corporation to carry on type 1(dealing in securities) regulated activities under the SFO

‘‘Articles’’ or ‘‘Articles of Association’’ articles of association of our Company adopted on 18 September2019, which will be effective upon Listing, as amended from time totime, a summary of which is set out in Appendix III to thisprospectus

‘‘Audit Committee’’ the audit committee of our Company

‘‘Board’’ the board of Directors

‘‘Business Day(s)’’ any day(s) (other than Saturday(s), Sunday(s) or public holiday(s) inHong Kong) on which banks in Hong Kong are generally open fornormal banking business

DEFINITIONS

– 14 –

‘‘BVI’’ the British Virgin Islands

‘‘CAGR’’ compound annual growth rate

‘‘Capitalisation Issue’’ the issue of 590,000,000 Shares to be made upon capitalisation ofcertain sums standing to the credit of the share premium account ofour Company as referred to in paragraph headed ‘‘1. Furtherinformation about our Group – 1.3 Resolutions in writing of ourShareholders passed on 18 September 2019’’ in Appendix IV to thisprospectus

‘‘CCASS’’ the Central Clearing and Settlement System established and operatedby HKSCC

‘‘CCASS Clearing Participant’’ a person admitted to participate in CCASS as a direct clearingparticipant or general clearing participant

‘‘CCASS Custodian Participant’’ a person admitted to participate in CCASS as a custodian participant

‘‘CCASS Investor Participant’’ a person admitted to participate in CCASS as an investor participantwho may be an individual or joint individuals or a corporation

‘‘CCASS Operational Procedures’’ the operational procedures of HKSCC in relation to CCASS,containing the practices, procedures and administrative requirementsrelating to the operations and functions of CCASS, as from time totime in force

‘‘CCASS Participant(s)’’ a CCASS Clearing Participant, a CCASS Custodian Participant or aCCASS Investor Participant

‘‘Chairman’’ the chairman of our Company

‘‘Chuenman Securities’’ Chuenman Securities Limited, a licensed corporation to carry on type1 (dealing in securities) regulated activities under the SFO

‘‘Co-Manager’’ Chuenman Securities

‘‘Companies Law’’ the Companies Law (as revised) of the Cayman Islands as amended,supplemented or otherwise modified from time to time

‘‘Companies Ordinance’’ the Companies Ordinance (Chapter 622 of the Laws of Hong Kong)which took effect from 3 March 2014, as amended, supplemented orotherwise modified from time to time

‘‘Companies (Winding Up andMiscellaneous Provisions) Ordinance’’

the Companies (Winding Up and Miscellaneous Provisions)Ordinance (Chapter 32 of the Laws of Hong Kong) effective from 3March 2014, as amended, supplemented or otherwise modified fromtime to time

DEFINITIONS

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‘‘Company’’, ‘‘us’’ or ‘‘we’’ Optima Automobile Group Holdings Limited（傲迪瑪汽車集團控股

有限公司）(formerly known as Optima Group Holdings Limited（傲

迪瑪集團控股有限公司）), an exempted company incorporated in theCayman Islands with limited liability on 14 March 2018

‘‘Controlling Shareholder(s)’’ has the meaning ascribed thereto under the GEM Listing Rules andunless the context requires otherwise, collectively refers to Red Link,Ms. FF Lim and Mr. Ang, which constitute a group of controllingshareholders of the Company

‘‘Corporate Governance Code’’ the Corporate Governance Code as set out in Appendix 15 to theGEM Listing Rules

‘‘CPF’’ Central Provident Fund, a social security system in Singapore

‘‘CPF Act’’ Central Provident Fund Act (Chapter 36 of the laws of Singapore),as amended, supplemented, or otherwise modified from time to time

‘‘CPFTA’’ Consumer Protection (Fair Trading) Act (Chapter 52A of the laws ofSingapore), as amended, supplemented or otherwise modified fromtime to time

‘‘CWSH’’ Commissioner for Workplace Safety and Health of Singapore

‘‘Deed of Indemnity’’ the deed of indemnity dated 18 September 2019 entered into by ourControlling Shareholders in favour of our Company (for itself and asthe trustee of its subsidiaries), details of which are set out in theparagraph headed ‘‘5. Estate duty, tax and other indemnities’’ inAppendix IV to this prospectus

‘‘DGEP’’ Director-General of Environmental Protection of Singapore

‘‘Director(s)’’ or ‘‘our Directors’’ the director(s) of our Company or any one of them

‘‘DNCR’’ Do Not Call Registry, established under the PDPA

‘‘EA’’ Employment Act (Chapter 91 of the laws of Singapore), as amended,supplemented or otherwise modified from time to time

‘‘EFMA’’ Employment of Foreign Manpower Act (Chapter 91A of the laws ofSingapore), as amended, supplemented or otherwise modified fromtime to time

‘‘EFMR’’ Employment of Foreign Manager (Work Passes) Regulations 2012 ofSingapore

DEFINITIONS

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‘‘Exclusive Service Agreement’’ the exclusive service agreement entered into by our Group withCustomer F which was effective from 1 January 2017 (assupplemented by an addendum dated 1 July 2019 entered into by ourGroup with Customer F), details of which are set out in theparagraph headed ‘‘Business – Customers – Our Exclusive ServiceAgreement with Customer F – The motor warranty programme’’ inthis prospectus

‘‘Frost & Sullivan’’ Frost & Sullivan International Limited, an independent marketresearch and consulting company

‘‘Frost & Sullivan Report’’ the industry report issued by Frost & Sullivan, details of which areset out in the section headed ‘‘Industry Overview’’ in this prospectus

‘‘FY2016’’ the financial year ended 31 December 2016



‘‘GDP’’ gross domestic product

‘‘GEM’’ GEM of the Stock Exchange

‘‘GEM Listing Rules’’ the Rules Governing the Listing of Securities on GEM of the StockExchange as amended, supplemented or otherwise modified fromtime to time

‘‘General Rules of CCASS’’ the terms and conditions regulating the use of CCASS, as may beamended or modified from time to time and where the context sopermits, shall include the CCASS Operational Procedures

‘‘Group’’, ‘‘we’’, ‘‘our’’ or ‘‘us’’ our Company, and its subsidiaries or any of them, or, where thecontext so requires, in respect of the period before our Companybecame the holding company of our present subsidiaries, ourCompany’s current subsidiaries or the business operated by suchsubsidiaries or their predecessors (as the case may be)

‘‘GST’’ Goods and Services Tax of Singapore

‘‘HKFRSs’’ the Hong Kong Financial Reporting Standards issued by the HongKong Institute of Certified Public Accountants

‘‘HKSCC’’ Hong Kong Securities Clearing Company Limited, a wholly-ownedsubsidiary of Hong Kong Exchanges and Clearing Limited

‘‘HKSCC Nominees’’ HKSCC Nominees Limited, a wholly-owned subsidiary of HKSCC

‘‘HK$’’ or ‘‘HKD’’ Hong Kong dollar(s), the lawful currency of Hong Kong

DEFINITIONS

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‘‘Hong Kong’’, ‘‘HKSAR’’ or ‘‘HK’’ the Hong Kong Special Administrative Region of the People’sRepublic of China

‘‘Hong Kong Branch Share Registrar’’ Tricor Investor Services Limited, the branch share registrar andtransfer office of our Company in Hong Kong

‘‘HPA’’ Hire Purchase Act (Chapter 125 of the laws of Singapore), asamended, supplemented or otherwise modified from time to time

‘‘Independent Third Party(ies)’’ person(s) or company(ies) which is/are independent of and notconnected (within the meaning of the GEM Listing Rules) with anyof the Directors, chief executive or substantial shareholders of ourCompany or our subsidiaries or any of their respective associateswithin the meaning of the GEM Listing Rules

‘‘Investment by Mr. Chong’’ the investment made by Mr. Chong in our Group as set out in theparagraph headed ‘‘History, Reorganisation and Corporate Structure– Pre-IPO Investments – Investment by Mr. Chong’’ in thisprospectus

‘‘Investment by Ms. Lam’’ the investment made by Ms. Lam in our Group as set out in theparagraph headed ‘‘History, Reorganisation and Corporate Structure– Pre-IPO Investments – Investment by Ms. Lam’’ in this prospectus

‘‘Investment by Ms. Ngo’’ the investment made by Ms. Ngo in our Group as set out in theparagraph headed ‘‘History, Reorganisation and Corporate Structure– Pre-IPO Investments – Investment by Ms. Ngo’’ in this prospectus

‘‘Investment by Mr. Seow’’ the investment made by Mr. Seow in our Group as set out in theparagraph headed ‘‘History, Reorganisation and Corporate Structure– Pre-IPO Investments – Investment by Mr. Seow’’ in this prospectus

‘‘IRAS’’ the Inland Revenue Authority of Singapore

‘‘Joint Global Coordinators’’ or ‘‘JointBookrunners’’ or ‘‘Joint LeadManagers’’

Orient Securities and Aristo Securities

‘‘Kung Chong Service Centre’’ our headquarters and one of our three service centres in operation asat the Latest Practicable Date, located at 6 Kung Chong Road,Alexandra Industrial Estate, Singapore 159143

‘‘Latest Practicable Date’’ 19 September 2019, being the latest practicable date prior to theprinting of this prospectus for the purpose of ascertaining certaininformation contained herein

‘‘Listing’’ the listing of our Shares on GEM

‘‘Listing Date’’ the date expected to be on Friday, 11 October 2019, on which ourShares are listed and from which dealings therein are permitted totake place on GEM

DEFINITIONS

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‘‘Listing Division’’ the listing division of the Stock Exchange

‘‘LTA’’ the Land Transport Authority of Singapore

‘‘Memorandum’’ or ‘‘Memorandum ofAssociation’’

memorandum of association of our Company adopted on18 September 2019, which will be effective upon Listing, asamended from time to time, a summary of which is contained inAppendix III to this prospectus

‘‘MOM’’ the Ministry of Manpower of Singapore

‘‘Motor Warranties Transfer Agreement’’ the motor warranties transfer agreement entered into by our Groupwith Customer F which was effective from 30 November 2016,details of which are set out in the paragraph headed ‘‘Business –

Customers – Our Motor Warranties Transfer Agreement withCustomer F’’

‘‘Mr. Ang’’ Mr. Ang Lay Keong (Hong Liqiang), an ultimate owner ofapproximately 45.30% in Red Link, and one of our executiveDirectors and the Chairman of our Company. Mr. Ang is one of ourControlling Shareholders and the spouse of Ms. LL Lim

‘‘Mr. Chan’’ Mr. Chan Vincent Cham Wai, the sole shareholder of API

‘‘Mr. Chee’’ Mr. Chee Siew Wee (Xu Xiaowei), one of our Shareholders

‘‘Mr. Chew’’ Mr. Chew Boon Weng, one of the previous shareholders of OptimaCarz

‘‘Mr. Chong’’ Mr. Chong Soo Hoon, Sean (Zhang Shiyun), one of our Shareholders

‘‘Mr. Lee’’ Mr. Lee Seow Poh Jeremy, one of the previous shareholders ofOptima Werkz

‘‘Mr. Lim’’ Mr. Lim Lean Tiek, one of our previous shareholders of OptimaWerkz

‘‘Mr. Seow’’ Mr. Seow Chee Siong (Xiao Zhixiang), one of our Shareholders

‘‘Ms. FF Lim’’ Ms. Lim Fang Fang, Queenie (Lin Fangfang, Queenie), an ultimateowner of approximately 54.70% in Red Link. Ms. FF Lim is one ofour Controlling Shareholders

‘‘Ms. Lam’’ Ms. Lam Wai Quen, one of our Shareholders

‘‘Ms. LL Lim’’ Ms. Lim Li Ling (Lin Liling), one of our executive Directors and thespouse of Mr. Ang

‘‘Ms. Ngo’’ Ms. Ngo Woon Kei, one of our Shareholders

DEFINITIONS

– 19 –

‘‘Ms. Tan’’ Ms. Tan Peck Luan (Chen Biluan), one of our executive Directorsand chief financial officer

‘‘MVA’’ Motor Vehicles (Third-Party Risks and Compensation) Act (Chapter189 of the laws of Singapore), as amended, supplemented orotherwise modified from time to time

‘‘Myanmar’’ the Republic of the Union of Myanmar (Burma)

‘‘Nomination Committee’’ the nomination committee of our Company

‘‘Offer Price’’ the final offer price per Offer Share (exclusive of brokerage of 1%,SFC transaction levy of 0.0027% and Stock Exchange trading fee of0.005%) of not more than HK$0.26 per Share and expected to be notless than HK$0.20 per Share at which the Offer Shares are to beoffered under the Share Offer, to be determined in the manner as setout in the section headed ‘‘Structure and Conditions of the ShareOffer’’ in this prospectus

‘‘Offer Share(s)’’ collectively, the Placing Shares and the Public Offer Shares

‘‘Offer Size Adjustment Option’’ the option to be granted by our Company to the PlacingUnderwriters, exercisable by the Joint Global Coordinators (forthemselves and on behalf of the Placing Underwriters), to require ourCompany to allot and issue up to an additional 37,500,000 Shares,representing 15% of the Offer Shares under the Share Offer, at theOffer Price, details of which are set out in the section headed‘‘Structure and Conditions of the Share Offer’’ in this prospectus

‘‘One-Tier System’’ the one-tier corporate taxation system of Singapore

‘‘Optima Carz’’ Optima Carz Pte. Ltd., a private company limited by sharesincorporated in Singapore on 24 October 2014, which is an indirectwholly-owned subsidiary of our Company

‘‘Optima De Auto’’ Optima De Auto Pte. Ltd., a private company limited by sharesincorporated in Singapore on 22 August 2013, which is an indirectwholly-owned subsidiary of our Company

‘‘Optima International’’ Optima International Limited, a company incorporated in the BVIwith limited liability on 16 March 2018, which is a direct wholly-owned subsidiary of our Company

‘‘Optima Werkz’’ Optima Werkz Pte. Ltd., a private company limited by sharesincorporated in Singapore on 18 May 2012, which is an indirectwholly-owned subsidiary of our Company

‘‘Optima Werkz International’’ Optima Werkz International Pte. Ltd. (formerly known as GrowthDynamics Pte. Ltd.), a private company limited by sharesincorporated in Singapore on 23 September 2015, which is anindirect wholly-owned subsidiary of our Company

DEFINITIONS

– 20 –

‘‘Orient Securities’’ Orient Securities (Hong Kong) Limited, a licensed corporation tocarry out type 1 (dealing in securities) and type 4 (advising onsecurities) regulated activities under the SFO

‘‘Part IV Employee’’ an employee who is covered under Part IV of the EA

‘‘PDPA’’ Personal Data Protection Act 2012 (No. 26 of 2012) of Singapore, asamended, supplemented or otherwise modified from time to time

‘‘PIC Scheme’’ Productivity and Innovation Credit Scheme, a scheme introduced bythe Singapore government to encourage productivity and innovationactivities in Singapore by way of tax deduction/allowances and cashpayout

‘‘Placing’’ the conditional placing by the Placing Underwriter(s) on behalf ofour Company of the Placing Shares for cash at the Offer Price, asfurther described under the section headed ‘‘Structure and Conditionsof the Share Offer’’ in this prospectus

‘‘Placing Share(s)’’ the 225,000,000 Shares (subject to reallocation and Offer SizeAdjustment Option) being initially offered by our Company forsubscription under the Placing, as described under the section headed‘‘Structure and Conditions of the Share Offer’’ in this prospectus

‘‘Placing Underwriter(s)’’ the underwriter(s) which are expected to enter into the PlacingUnderwriting Agreement to underwrite the Placing Shares

‘‘Placing Underwriting Agreement’’ the underwriting agreement expected to be entered into on or aroundthe Price Determination Date by our Company, our executiveDirectors, our Controlling Shareholders, the Sole Sponsor, the JointGlobal Coordinators, the Joint Bookrunners, the Joint LeadManagers, the Co-Manager, and the Placing Underwriter(s) relatingto the Placing

‘‘Pre-IPO Investments’’ the investments made by the Pre-IPO Investors in our Group as setout in the paragraph headed ‘‘History, Reorganisation and CorporateStructure – Pre-IPO Investments’’ in this prospectus

‘‘Pre-IPO Investors’’ API, Mr. Chong, Ms. Lam, Ms. Ngo and Mr. Seow

‘‘Price Determination Agreement’’ the agreement to be entered into between our Company and JointGlobal Coordinators (for themselves and on behalf of theUnderwriters) on or about the Price Determination Date to determinethe Offer Price

‘‘Price Determination Date’’ the date expected to be on or about Thursday, 3 October 2019 orsuch later date as may be agreed between our Company and JointGlobal Coordinators (for themselves and on behalf of theUnderwriters), on which the Offer Price is fixed for the purpose ofthe Share Offer

DEFINITIONS

– 21 –

‘‘Public Offer’’ the issue and offer of the Public Offer Shares for subscription inHong Kong at the Offer Price on and subject to the terms andconditions described in this prospectus and the Application Forms

‘‘Public Offer Shares’’ the 25,000,000 Shares (subject to reallocation) initially offered byour Company for subscription in the Public Offer, as described underthe section headed ‘‘Structure and Conditions of the Share Offer’’ inthis prospectus

‘‘Public Offer Underwriter(s)’’ the underwriter(s) of the Public Offer, whose names are set out underthe paragraph headed ‘‘Underwriting – Underwriters – Public OfferUnderwriters’’ in this prospectus

‘‘Public Offer Underwriting Agreement’’ the underwriting agreement dated 26 September 2019 and enteredinto by our Company, our executive Directors, our ControllingShareholders, the Sole Sponsor, the Joint Global Coordinators, theJoint Bookrunners, the Joint Lead Managers, the Co-Manager, andthe Public Offer Underwriters relating to the Public Offer

‘‘Red Link’’ Red Link International Limited, a company incorporated in the BVIon 2 February 2018 with limited liability, which is one of ourControlling Shareholders

‘‘Regulation S’’ Regulation S under the US Securities Act

‘‘Remuneration Committee’’ the remuneration committee of our Company

‘‘Reorganisation’’ the reorganisation arrangements undergone by our Group inpreparation for the Listing, details of which are set out in theparagraph headed ‘‘History, Reorganisation and Corporate Structure– Reorganisation’’ in this prospectus

‘‘RIEA’’ Regulation of Imports and Exports Act (Chapter 272A of the laws ofSingapore), as amended, supplemented or otherwise modified fromtime to time

‘‘RTA’’ Road Traffic Act (Chapter 276 of the laws of Singapore), asamended, supplemented or otherwise modified from time to time

‘‘SAP’’ a system that provides users with a real-time business application

‘‘SEC Scheme’’ Special Employment Credit Scheme, a scheme introduced by theSingapore government to encourage employment of Singaporecitizens aged above 50 by way of co-funding part of the employee’swage

‘‘Serangoon Service Centre’’ one of our three service centres in operation as at the LatestPracticable Date, located at 9A Serangoon North Avenue 5,Singapore 554500

‘‘SFC’’ the Securities and Futures Commission of Hong Kong

DEFINITIONS

– 22 –

‘‘SFO’’ the Securities and Futures Ordinance (Chapter 571 of the Laws ofHong Kong), as amended, supplemented or otherwise modified fromtime to time

‘‘SGD’’ or ‘‘S$’’ Singapore dollar(s), the lawful currency of Singapore

‘‘Share(s)’’ ordinary share(s) with nominal value of HK$0.01 each in the sharecapital of our Company, which are to be traded in Hong Kongdollars and listed on GEM

‘‘Shareholder(s)’’ or ‘‘our Shareholders’’ holder(s) of the Share(s)

‘‘Share Offer’’ the Public Offer and the Placing

‘‘Share Option Scheme’’ the share option scheme conditionally adopted by our Company on18 September 2019, the principal terms of which are summarised inthe paragraph headed ‘‘4. Share Option Scheme’’ in Appendix IV tothis prospectus

‘‘Share Swap Agreement’’ the share swap agreement dated 22 June 2018 entered into among (i)Optima International (as purchaser), (ii) our Company (as the directholding company of Optima International), (iii) Ms. FF Lim,Mr. Ang, Mr. Chee, Mr. Chong, Ms. Ngo, Ms. Lam and Mr. Seow(as vendors), (iv) Red Link (as nominee vehicle) and (v) Ms. FF Limand Mr. Ang (as warrantors), details of which are set out in theparagraph headed ‘‘History, Reorganisation and Corporate Structure– Corporate History and Development – Establishment andshareholding changes of the members of our Group – OurCompany’’ in this prospectus

‘‘SIBOR’’ Singapore Interbank Offered Rate

‘‘Singapore’’ the Republic of Singapore

‘‘Sole Sponsor’’ or ‘‘Orient Capital’’ Orient Capital (Hong Kong) Limited, a licensed corporation to carryon type 6 (advising on corporate finance) regulated activities underthe SFO, being the sole sponsor to the Listing

‘‘sq. ft.’’ square feet

‘‘sq. m.’’ square metres, converted at 1 square metre: 10.764 square feet forthe purpose of illustration in this prospectus

‘‘Stock Exchange’’ The Stock Exchange of Hong Kong Limited

‘‘Tagore Service Centre’’ one of our three service centres in operation as at the LatestPracticable Date, located at 452 Tagore Industrial Avenue, Singapore787823

‘‘Takeovers Code’’ the Codes on Takeovers and Mergers and Share Buy-backs issued bythe SFC, as amended, supplemented or otherwise modified from timeto time

‘‘Track Record Period’’ the period comprising FY2016, FY2017, FY2018 and 1Q2019

DEFINITIONS

– 23 –

‘‘Underwriter(s)’’ the Public Offer Underwriter(s) and the Placing Underwriter(s)

‘‘Underwriting Agreements’’ the Public Offer Underwriting Agreement and the PlacingUnderwriting Agreement

‘‘United Nations’’ an intergovernmental organization constituted by 193 member states

‘‘United States’’, ‘‘US’’ or ‘‘U.S.’’ the United States of America

‘‘Upper Thomson Service Centre’’ our service centre which ceased operation in late August 2019,located at 551 Upper Thomson Road, Singapore 574415

‘‘US dollars’’, ‘‘USD’’ or ‘‘US$’’ United States dollar(s), the lawful currency of U.S.

‘‘US Securities Act’’ the United States Securities Act of 1933, as amended, supplementedor otherwise modified from time to time

‘‘VER’’ Environmental Protection and Management (Vehicular Emissions)Regulations of Singapore, as amended, supplemented or otherwisemodified from time to time

‘‘WC Scheme’’ Wage Credit Scheme, a scheme introduced by the Singaporegovernment to encourage wage increase to Singapore citizenemployees by way of co-funding part of the wage increase

‘‘WHITE Application Form(s)’’ the application form(s) for use by the public who require(s) suchPublic Offer Shares to be issued in the applicant’s/applicants’ ownname(s)

‘‘WICA’’ Work Injury Compensation Act (Chapter 354 of the laws ofSingapore), as amended, supplemented or otherwise modified fromtime to time

‘‘WSHA’’ Workplace Safety and Health Act (Chapter 354A of the laws ofSingapore), as amended, supplemented or otherwise modified fromtime to time

‘‘WSHR’’ Workplace Safety and Health (General Provisions) Regulations ofSingapore, as amended, supplemented or otherwise modified fromtime to time

‘‘YELLOW Application Form(s)’’ the application form(s) for use by the public who require(s) suchPublic Offer Shares to be deposited directly into CCASS

‘‘1Q2018’’ the three months ended 31 March 2018

‘‘1Q2019’’ the three months ended 31 March 2019

‘‘%’’ per cent

DEFINITIONS

– 24 –

Unless otherwise specified, for the purpose of this prospectus and for the purpose of illustration only, HongKong dollar amounts have been translated using the following rates:

S$1.00: HK$5.77

No representation is made that any amounts in S$ or HK$ were or could have been converted at the aboverate or at any other rates or at all.

Unless otherwise expressly stated or the context otherwise requires, in this prospectus,

• the terms ‘‘associate(s)’’, ‘‘close associate(s)’’, ‘‘connected person(s)’’, ‘‘core connected person(s)’’,‘‘connected transaction(s)’’, ‘‘subsidiary(ies)’’, ‘‘substantial shareholder(s)’’ and ‘‘significantshareholder(s)’’ shall have the meanings ascribed to such terms in the GEM Listing Rules;

• all data in this prospectus is as of the Latest Practicable Date; and

• certain amounts and percentage figures included in this prospectus have been subject to roundingadjustments. Accordingly, figures shown as totals in certain tables may not be an arithmeticaggregation of the figures preceding them.

DEFINITIONS

– 25 –

This glossary contains explanations of certain terms used in this prospectus in connection with our Groupand our business. The terms and their meanings may not correspond to standard industry meanings or usage ofthese terms.

‘‘bodykit’’ exterior modifications to a passenger car, such as front bumpers andside panels

‘‘COE’’ Certificate of Entitlement which represents a right to vehicleownership and use of the limited road space for 10 years. Anyonewho wishes to register a new vehicle in Singapore must first obtain aCOE in the appropriate vehicle category. At the end of the 10-yearCOE period, vehicle owners may choose to deregister their vehicleor to revalidate their COEs for another five or 10-year period bypaying the prevailing quota premium. Vehicle owners are alsoallowed to de-register their COEs before the expiry of the 10-yearperiod and will receive monetary rebate. Bids for COE are submittedthrough the COE open bidding system

‘‘exhaust system’’ pipes to convey exhaust gases away from an engine

‘‘inspection’’ the act of examining the condition of passenger car

‘‘luxury passenger cars’’ a branding categorisation by Frost & Sullivan. For details, please seethe paragraph headed ‘‘Industry Overview – Overview of thepassenger car market in Singapore’’ in this prospectus

‘‘maintenance’’ the act of keeping predetermined condition of passenger carsubsystems and servicing or replacing parts and fluids, which iscritical to ensure the safety, reliability, drivability, comfort andlongevity of a passenger car

‘‘modification, tuning and grooming’’ the procedures of modifying the performance or appearance of apassenger car

‘‘MPV’’ multi-purpose vehicle

‘‘PARF rebate’’ the preferential additional registration fee rebate, which is computedbased on the age of the car at deregistration. The age of the car iscomputed from the date of its registration (locally or overseas,whichever is earlier)

‘‘passenger cars’’ wheeled road motor vehicles, other than a motor cycle, intendedprimarily for the carriage of passengers. Vehicles such as buses andtrucks are commercial vehicles and do not fall within the category ofpassenger cars

GLOSSARY

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‘‘repair’’ the act of inspecting and repairing car failure from technicalperspective, ensuring the quality of repaired passenger cars to reachcertain safety standard and car performance level

‘‘sedan’’ a passenger car in a three-box configuration and principal volumesarticulated in separate compartments for engine, passenger and cargo

‘‘suspension system’’ the system of tyres, springs, shock absorbers, etc. that connects avehicle to its wheels

‘‘SUV’’ sport utility vehicle

‘‘ultra-luxury supercars’’ a branding categorisation by Frost & Sullivan. For details, please seethe paragraph headed ‘‘Industry Overview – Overview of thepassenger car market in Singapore’’ in this prospectus

GLOSSARY

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This prospectus contains forward-looking statements that state our belief, expectations, or intentions for thefuture. The forward-looking statements are contained principally in the sections headed ‘‘Summary’’, ‘‘RiskFactors’’, ‘‘Industry Overview’’, ‘‘Business’’, ‘‘Financial Information’’ and ‘‘Future Plans and Use of Proceeds’’in this prospectus. These statements relate to events that involve known and unknown risks, assumptions,uncertainties and other factors, including those listed under the section headed ‘‘Risk Factors’’ in this prospectus,which may cause our actual results, performance or achievements to be materially different from performance orachievements expressed or implied by the forward-looking statements. These forward-looking statements includestatements relating to:

• our operations and business prospects;

• our business objectives, strategies, implementation plans and use of proceeds;

• the regulatory environment of our industry in general;

• our financial conditions and performance;

• our dividend policy;

• capital market development;

• the effects of the global financial markets and economic crisis;

• the nature of, and potential for, future development of our business; and

• future development in our industry.

The words ‘‘aim’’, ‘‘anticipate’’, ‘‘believe’’, ‘‘can’’, ‘‘could’’, ‘‘estimate’’, ‘‘expect’’, ‘‘foresee’’, ‘‘forecast’’,‘‘going forward’’, ‘‘intend’’, ‘‘may’’, ‘‘might’’, ‘‘ought to’’, ‘‘plan’’, ‘‘potential’’, ‘‘predict’’, ‘‘project’’,‘‘propose’’, ‘‘seek’’, ‘‘shall’’, ‘‘should’’, ‘‘will’’, ‘‘would’’ and the negative of these terms and other similarexpressions, as they relate to us, are intended to identify a number of these forward-looking statements. Theseforward-looking statements reflect our current views with respect to future events and are not a guarantee offuture performance. Actual results may differ materially from information contained in the forward-lookingstatements as a result of a number of uncertainties and factors, including the risk factors described in the sectionheaded ‘‘Risk Factors’’ in this prospectus. One or more of these risks or uncertainties may materialise.

Subject to the requirements of applicable laws, rules and regulations, we do not have any obligation nor dowe intend to publicly update or otherwise revise the forward-looking statements in this prospectus, whether as aresult of new information, future events or otherwise. As a result of these and other risks, uncertainties andassumptions, the forward-looking events and circumstances discussed in this prospectus might not occur in theway we expect, or at all. Accordingly, you should not place undue reliance on any forward-looking statements.All forward-looking statements contained in this prospectus are qualified by reference to the cautionarystatements set forth in this section as well as the risks and uncertainties discussed in the section headed ‘‘RiskFactors’’ in this prospectus.

FORWARD-LOOKING STATEMENT

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You should carefully consider all the information set forth in this prospectus, including the risksdescribed below, before making any investment in our Shares. The occurrence of any of the following risksmay have a material adverse effect on our business, financial condition, results of operations and futureprospects. The trading price of the Offer Shares could decline due to any of these risks, and you may lose partor all of your investment.

RISKS RELATING TO OUR BUSINESS

Imposition of laws or regulations restricting the carrying on of our business, government policies onpassenger car purchases and ownership for restricting road use in Singapore, or measures to encouragethe use of public transport, may have a material adverse effect on our business.

A substantial amount of our revenue was derived from the provision of after-market automotive services byour Group to passenger cars in Singapore. There are laws in Singapore governing the carrying on of ourbusiness, such as the management of hazardous waste and the workplace safety and health measure. Managementof hazardous waste is governed under the Environmental Public Health (Toxic Industrial Waste) Regulations1988 and a person who contravenes or fails to comply with any of the provisions under the regulation could beliable to a fine not exceeding S$10,000 and, in the case of a continuing offence, to a further fine not exceedingS$100 for every day during which the offence continues after conviction. Workplace safety and health measuresare governed under the WSHA and any person who breaches his duty under the WSHA shall be guilty of anoffence and shall be liable on conviction, in the case of a body corporate, to a fine not exceeding S$500,000 and,if the contravention continues after the conviction, the body corporate shall be guilty of a further offence andshall be liable to a fine not exceeding S$5,000 for every day during which the offence continues after conviction.Accordingly, if we are unable to comply with the laws governing our business operation and our non-compliancecontinues for a prolonged period of time or that we are unable to react to changes in the applicable laws,regulations, rules and guidance in a timely manner, our business, results of operations and financial conditioncould be materially and adversely affected. For details, please see the paragraph headed ‘‘Regulatory Overview –

Laws relating to the business of our Group’’ in this prospectus.

In Singapore, a COE is required for the registration of a new vehicle in the appropriate vehicle category. ACOE represents a right to own vehicle and use of the limited road space in Singapore for a term of 10 years. TheSingapore government may limit the quota of COE in order to control the total number of vehicles in use.Between February 2015 and January 2018, the net increase in COE quotas for passenger cars based on theallowable growth in passenger car population was between 1,409 and 1,504 units per year. In October 2017, theSingapore government announced that the growth cap for all passenger cars would be 0% with effect fromFebruary 2018 (i.e. the ‘‘zero-growth’’ policy). According to the Frost & Sullivan Report, with a relativelystable total car population in Singapore, the market size of passenger car maintenance and repair industry isexpected to grow at a CAGR of 2.9% from S$268.9 million in 2018 to S$309.7 million in 2023 as a result of thegradual increase in proportion of aged passenger car over the years. However, if the Singapore government takesany extreme measures to reduce the total car population in Singapore, either by way of reducing the COE quotasignificantly or not issuing any new COE quota to replace the number of de-registered vehicle, the demand ofour after-market automotive services may be materially and adversely affected. In this event, our financialcondition and results of operations could be materially and adversely affected.

Further, in January 2016, the Ministry of Transport of Singapore announced that it aimed to make (i)public transport the main mode of travel by 2030; and (ii) walking, cycling and riding public transport thepreferred life style, by improving rail reliability and walking and cycling connections. If the Singaporegovernment imposes restrictions on road use, and/or if measures to encourage the use of public transport areimposed and successful, it may reduce the number of passenger cars in Singapore and hence may negativelyaffect the demand for our services. In this event, our financial condition and results of operations could also bematerially and adversely affected.

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Our business, financial condition and results of operations may be adversely affected by ourreputation, consumer’s perception of the quality of our services, any negative publicity, failure to maintainand/or enhance our reputation, or failure to deal with customer complaints.

Our reputation and consumer’s perception of the quality of our services may materially affect our businessperformance. Factors such as the quality and consistency of our services, as well as the success of our marketingand promotional efforts may greatly affect our ability to maintain and enhance our reputation. If customers donot perceive that the services we provide is of high quality, our brand image will be adversely affected and as aresult the attractiveness and competitiveness of our services will be undermined. On one hand, there may berisks that our marketing efforts may not be successful in further promoting our services. On the other hand, ourreputation may also be adversely affected by negative publicity or unfavourable forum discussions (whetheraccurate or not) relating to the services provided by our Group, for issues such as service quality, repair time,customer services and quotations or pricing. This may lead to loss of customers’ confidence in our Group andthere can be no assurance that we can prevent such negative publicity or disadvantageous forum discussions, andthis may in turn potentially harm our business. If we cannot maintain and further enhance our reputation,increase market awareness, properly promote our Group and our services and/or deal with customer complaints,we may not be able to attract and retain customers. Accordingly, our business and result of operation may bematerially and adversely affected.

We place reliance on our cooperation with Customer F to provide after-market automotive services tocustomers who participate in Customer F’s motor warranty programme and the implementation of ourexpansion plans. Any adverse change in our business relationship with Customer F could negatively affectour business operation and our expansion plans.

As required by the Monetary Authority of Singapore, motor warranty related business must be provided byan insurer licensed by the Monetary Authority of Singapore. In light of the requirement of the MonetaryAuthority of Singapore, we restructured our motor warranty business in January 2017 by entering into anExclusive Service Agreement with Customer F commencing on 1 January 2017 to act as its exclusive serviceprovider for an exclusive period of six years. Through the cooperation with Customer F, we provide after-marketautomotive services which are covered under the motor warranty programme to car owners who participated inCustomer F’s motor warranty programme. In addition, we also provide after-market automotive services whichare not covered under the motor warranty programme to such car owners. For further details of our co-operationwith Customer F, please refer to the paragraph headed ‘‘Business – Our business – Impact of new arrangementwith Customer F’’ in this prospectus. Revenue generated from the provision of our after-market automotiveservices to car owners who participate in Customer F’s motor warranty programme (including services coveredand not covered under the motor warranty programme) amounted to approximately S$5.0 million, S$6.0 millionand S$1.4 million, representing approximately 31.2%, 42.1% and 42.1% of our total revenue generated fromafter-market automotive services for FY2017, FY2018 and 1Q2019, respectively. In the event that there is anyadverse change in our business relationship with Customer F and Customer F terminates the Exclusive ServiceAgreement with us or the motor warranty programme in whole, we cannot assure that we can successfully seekreplacement of a new insurer licensed by the Monetary Authority of Singapore in time to continue our businesswith car owners who participated in Customer F’s motor warranty programme. In these circumstances, ourresults of operations may be materially and adversely affected.

In anticipation of the increase in demand for our after-market automotive services and as part of ourbusiness strategy of expanding our servicing capacity, we intend to set up a new service centre and satelliteworkshop in Singapore and have relocated our Upper Thomson Service Centre. One of the factors contributing tosuch increase in demand is Customer F’s expansion of the motor warranty programme which is envisaged toreach a greater number of automobile dealers and car drivers in Singapore, thereby increasing the number ofvehicles we will service in the future. For further details of our expansion plans, please refer to the paragraphheaded ‘‘Business – Business strategies – Expanding our servicing capacity’’ in this prospectus. Although wehave established a close business relationship with Customer F and we expect to continue such relationship inthe near future, there is no assurance that our relationship with Customer F will not deteriorate or that CustomerF will not terminate the Exclusive Service Agreement with us in the future. Any change or deterioration in ourrelationship with Customer F may adversely affect our expansion plans.

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We rely on a constant supply of experienced and skilled staff.

Our operations require a sufficient number of experienced and skilled staff. Such experienced and skilledstaff includes customer service officers, service advisors and technicians. Our Group employed 7 full-timecustomer service officers, 8 full-time service advisors and 38 full-time technicians as at the Latest PracticableDate. For FY2016, FY2017, FY2018 and 1Q2019, our employee benefit expenses amounted to approximatelyS$4.3 million, S$4.9 million, S$4.6 million and S$1.2 million, respectively, representing approximately 26.4%,26.3%, 25.6% and 27.5% of our total revenue for the respective periods. There is no assurance that the labourcost will remain stable and will not increase significantly in the future. Since we rely on the stable supply ofexperienced and skilled staff, if there is any significant increase in our labour cost, the cost of our businessoperations will increase and may adversely affect our profitability.

We also believe that our ability to recruit and retain such experienced and skilled staff contributed to ourcontinued success. However, there is no assurance that we will be able to retain our staff and if they leave ouremployment, we may not be able to recruit a sufficient number of comparable talents in a timely manner and onsimilar costs. If there is a sudden shortage of labour, our services will be materially and adversely affected dueto the delays in our turnaround time or any adverse effect on the quality of our services so caused. Ourreputation and operations may as a result be materially and adversely affected.

In addition, our business is carried out in Singapore but some of our staff and employees, includingtechnicians, are from overseas. If the Singapore government imposes limitations or reduces the quota for permitsfor employing foreign employees, our Group may need to recruit other suitable talents from Singapore. There isno assurance that we will be able to recruit comparable talents with similar experience, skills and costs, and in atimely manner. If such restrictions are imposed, our financial condition and results of operations could bematerially and adversely affected.

The retention of certain key personnel is critical to our success. The loss of any such key personnelmay impair our ability to manage our business and operations effectively.

The contributions and experience of our key personnel, in particular, their familiarity with our business,play an important role in our continued success. Such key personnel include, the founder of our Group and alsoone of our executive Directors, Mr. Ang Lay Keong. Mr. Ang has over 25 years of experience in the after-market automotive service industry and he is also supported by our experienced management team. Each of themembers of our management team is experienced in the automotive industry in Singapore. For details of ourmanagement team’s industry experience, please see the section headed ‘‘Directors and Senior Management’’ inthis prospectus. If one or more of the members of our management team is or are unable or unwilling to continuehis/her present position, our Group may not be able to find a suitable replacement in a timely manner, and hencewill disrupt the business of our Group and materially and adversely affecting the financial conditions andperformance of our Group.

Our Group does not manufacture the spare parts and accessories we use in our after-marketautomotive business and hence relies on our suppliers for the supply of such products.

We do not manufacture any spare parts and accessories which we use and distribute. We purchase all thespare parts and accessories from our suppliers. Therefore, we rely on our suppliers for the supply of spare partsand accessories. Furthermore, during the Track Record Period, our Group also enjoyed purchase rebates fromcertain suppliers for purchasing products in bulk. As such, if our suppliers significantly increase the price for theproducts we require or terminates any rebate arrangement with us, we may not be able to find comparablealternative suppliers in a timely manner for similar price. For FY2016, FY2017, FY2018 and 1Q2019, our costof materials amounted to approximately S$6.5 million, S$6.1 million, S$5.3 million and S$1.2 million,respectively, representing approximately 67.5%, 61.4%, 58.5% and 55.8% of our total cost of sales for the

RISK FACTORS

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respective periods. Shortages or delays in the supply of passenger car spare parts, accessories and consumablesto the extent that we cannot procure them on acceptable terms from other sources in time will adversely affectour sales, profitability and customer relations. Moreover, if we are unable to pass the additional costs to ourcustomers, our profitability may be adversely affected. In addition, if there is any defect in such products, thismay damage our reputation or the reputation of a particular supplier, and/or cause a disruption in supply. Thismay in turn lead to a decrease in demand for a particular brand or all products provided by such supplier. Ourbusiness and results of operations may as a result be adversely affected.

The properties of our service centres and paint workshop are not owned by our Group.

Our Group operates three service centres and one paint workshop in Singapore. All of these service centresand workshop are located on rented properties. Our rental and utilities expenses amounted to approximatelyS$1.5 million, S$1.6 million and S$1.6 million for FY2016, FY2017 and FY2018, respectively. With the effectof HKFRS 16 on 1 January 2019, we have recognised right-of-use assets for our leased properties ofapproximately S$3.2 million on 1 January 2019. Accordingly, we recognised depreciation of right-of-assetsarising from our leased properties of approximately S$0.4 million for 1Q2019. We had also recognise rentalexpenses from short term leases of approximately S$58,000 for 1Q2019. The aggregate amount of expensesrelated to our leased properties amounted to approximately S$0.5 million in 1Q2019, representing approximately10.5% of our total revenue in 1Q2019. As such, our Group is subject to rental fluctuation in Singapore from timeto time. If there is any significant increase in rental and utilities expenses for our rented properties upon theexpiry of the existing tenancy, it will increase our operating expenses and put pressure on our operating cashflows. This may materially and adversely affect our business, results of operations, financial position and/orprospects.

As at the Latest Practicable Date, the expiry dates of our rented properties ranged from January 2020 toOctober 2021. There is no guarantee that we will be able to renew such tenancy upon their expiration oncommercially favourable terms or at all.

Furthermore, pursuant to the tenancy or licence agreements entered into between our Group and ourrespective landlords, either party to the tenancy or licence agreements may terminate such agreements by givingup to three months’ notice to the other party. If the landlord terminates our current tenancy, we will need todivert management resources to search for alternative premises with comparable location, size and rent. Further,there is no assurance that we will be able to secure alternative premises for our service centres and workshop ina timely manner and/or on commercially acceptable terms. If so, our business operations and financial resultscould be adversely affected.

Our car rental services business requires a large amount of capital to finance the expansion andreplenishment of our rental passenger cars and the overall expansion of our business. Failure to manageour liquidity and cash flows or inability to obtain additional financing in the future may materially andadversely affect our business, results of operations and financial condition.

The car rental services business is capital intensive and requires a large amount of capital to finance thebusiness expansion and replenish our rental passenger cars. In order to maintain our competitiveness andimplement our growth strategies, we have to obtain sufficient funds to finance the expansion and replenishment.Our rental passenger cars acquisition costs were approximately S$4.6 million, S$7.4 million, nil and nil inFY2016, FY2017, FY2018 and 1Q2019, respectively. Further, we depended substantially on finance leasefacilities from banks and other financial institutions for acquisition of our rental passenger cars. As at 31 March2019, our outstanding interest-bearing indebtedness was approximately S$6.4 million, 99.4% of which is relatedto our acquisition of rented passenger cars.

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As at 31 March 2019, 32.5% of our outstanding interest-bearing indebtedness were repayable within oneyear or on demand. There is no assurance that we will be able to generate sufficient cash flows from ouroperations or obtain additional financing to fulfill all such repayment obligations when they fall due. If so, ourability to obtain additional funds to finance our business growth may also be materially and adversely affected.

Furthermore, we may need to raise additional funds to finance the expansion and replenishment of ourrental passenger cars and the overall expansion of our business. Such additional financing may not be availableon commercially reasonable terms or at all, especially if there is a recession or other events causing volatility inthe capital markets in Singapore or worldwide. To the extent that we raise additional funds by issuing equitysecurities, our shareholders may experience substantial dilution in share capital, and to the extent that we engagein debt financing, we may be subject to restrictive covenants that could potentially limit our flexibility inconducting future business activities.

Our ability to retain our existing financial resources and obtain additional financing on acceptable terms issubject to a variety of uncertainties, including but not limited to:

• conditions of Hong Kong and other capital markets in which we may seek to raise funds;

• economic, political and other conditions in Singapore;

• Singapore governmental policies relating to bank loans and other credit facilities;

• investors’ perception of, and demand for, securities of car rental companies; and

• our future results of operations, financial condition and cash flows.

If additional financing is not available on acceptable terms or at all, we may not be able to fund ourexpansion, promote our brand, enhance our products and services, respond to competitive pressures or takeadvantage of investment or acquisition opportunities, all of which may adversely affect our results of operationsand business prospects.

Our expansion plans may not be implemented successfully or be achieved within the expected timeframe or within the estimated budget, which may adversely affect our ability to perform our contractualobligations and prospects.

Our future expansion plans include setting up a new service centre and a satellite workshop in Singapore.For further details of our expansion plans, please refer to the paragraph headed ‘‘Business – Business strategies –

Expanding our servicing capacity’’ in this prospectus. The implementation of our expansion plans will requirecapital investments, significant amount of managerial and technical resources, efforts and timely execution of thefuture plans, including finding suitable locations and securing leases on commercially acceptable terms as wellas hiring and retaining skilled management and workshop staff. There is no assurance that our Group mayimplement the aforementioned expansion plans successfully and in a timely manner.

Since February 2019 and up to the Latest Practicable Date, we have entered into 36 fleet servicingagreements with 36 different car rental operators in Singapore to provide repair and maintenance services totheir rental vehicles for a period of one to two years. The car rental operators will inform us the number of theirrental vehicles which require our repair and maintenance services from time to time. As at the Latest PracticableDate, we were informed by the car rental operators to provide repair and maintenance services to a total of 1,540rental vehicles. We have also in March 2019 entered into a servicing agreement with a commercial transportcompany pursuant to which we shall provide servicing to 60 of their commercial vehicles for a period of twoyears. We intend to further expand our customer base by forming strategic co-operation with companies whosebusiness complements with our services. For further details, please refer to the paragraph headed ‘‘Business –

Business strategies – Brand building through strengthening our relationships with our existing customers andexpanding our customer base’’ in this prospectus. In the event that we fail to implement our expansion planssuccessfully and in a timely manner, our ability to expand our customer base and perform our contractualobligations to provide after-market automotive services to our customers may be adversely affected.

RISK FACTORS

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We recorded net cash used in operating activities of approximately S$0.3 million for FY2018. If werecord net cash outflow from operating activities in the future, our liquidity and financial condition maybe materially and adversely affected.

For FY2018, we recorded cash flows used in operating activities of approximately S$0.3 million. Theamount is arrived at by adding back the non-cash items of approximately S$2.4 million, including depreciationand interest expenses to our loss before income tax expense of approximately S$93,000. The resulting amount ofapproximately S$2.5 million, representing our positive cash flows from operating profit before working capitalchanges, is then adjusted by (i) a net decrease in working capital by approximately S$2.3 million; and (ii)interest and income tax paid of approximately S$0.5 million. The net decrease in our working capital wasattributable to (i) an increase in trade and other receivables of approximately S$0.8 million, due to the increasein prepayments arising from the capitalisation of the equity portion of the Listing expenses as at 31 December2018 which is partially offset by the decrease in trade receivables arising from insured repair services; and (ii) adecrease in trade and other payables of approximately S$1.9 million, which was mainly due to (a) a decrease intrade payables as we speed up our payments to our suppliers to maintain good business relationships with themas our liquidity improved after the capital injection from our Pre-IPO Investors and (b) the decrease in otherpayables due to repayments made to Customer F which were partially offset by the decrease in inventories ofapproximately S$0.4 million as we sold more passenger car spare parts and accessories in FY2018.

Negative operating cash flow requires our Group to obtain sufficient external financing to meet ourfinancing needs and obligations. If we are unable to do so, we will be in default of our payment obligations andmay not be able to expand our business. Thus, our business, financial position and results of operations may bematerially adversely affected.

We had net current liabilities position as at 31 December 2016.

As at 31 December 2016, we had net current liabilities of approximately S$0.3 million. Please see theparagraph headed ‘‘Financial Information – Summary of consolidated statements of financial position – Netcurrent (liabilities)/assets’’ in this prospectus. We may have net current liabilities in the future. Havingsignificant net current liabilities could constrain our operational flexibility and adversely affect our ability toexpand our business. If we do not generate sufficient cash flow from our operations to meet our present andfuture financial needs, we may need to rely on additional external borrowings for funding. If adequate funds arenot available, whether on satisfactory terms or at all, we may be forced to delay or abandon our developmentand expansion plans, and our business, financial condition and results of operations may be materially andadversely affected.

We have high gearing ratio that may expose us to liquidity risk.

Our business operation relies on cash generated from our business operations, finance lease obligations,lease liabilities and bank borrowings and we expect this will be the case in the future. Our gearing ratio wasapproximately 1.9 times, 1.7 times, 1.1 times and 1.4 times as at 31 December 2016, 31 December 2017,31 December 2018 and 31 March 2019, respectively. Our high level of bank borrowings, lease liabilities andgearing ratio may adversely affect our liquidity and business operations, including but not limited to:

• increase our vulnerability under adverse economic condition;

• potentially limit our ability to raise more debt; and

• increase our exposure to interest rate fluctuation.

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If we continue to have a high gearing ratio, our exposure to liquidity risk may restrict our ability to makenecessary capital expenditure or develop business opportunities in the future, which may adversely affect ourresults of operations and financial positions.

Our financial condition and results of operations could be negatively affected if we are unable tocollect our trade receivables in a timely manner.

Passenger car owners may authorise us to facilitate an insurance claim when they bring in passenger carsinvolved in accidents for us to repair and our Group will handle the insurance claim with the relevant insurancecompanies on the owner’s behalf. We will issue invoices to the passenger car owners or directly to the insurancecompanies, if requested, for the amount that the relevant insurance companies agreed to pay on behalf of thepassenger car owners. In such circumstances, we may not be able to collect our trade receivables in a timelymanner and payments to us may be delayed after the invoice dates due to various reasons, for instance, aprolonged process of claiming against an insurance company.

As at 31 December 2016, 31 December 2017, 31 December 2018 and 31 March 2019, approximately S$0.5million, S$0.5 million, S$0.8 million and S$0.8 million of trade receivables were aged for more than 180 days,respectively. Our credit risk increased as a result of the increase in our trade receivables turnover days fromapproximately 46.1 days for FY2016 to approximately 57.4 days for FY2017, and further to approximately 73.0days for FY2018. That said, our trade receivables turnover days decreased slightly to approximately 72.2 daysfor 1Q2019. For details, please see the paragraph headed ‘‘Financial Information – Discussion of selectedcomponents of consolidated statements of financial position – Trade and other receivables’’ in this prospectus.Our exposure to credit risks will increase due to such delayed payment for the services which we provide. Thismay affect our ability to manage our working capital and our business and financial performance can beadversely affected.

Our impairment losses recognised as at 31 December 2016, 31 December 2017, 31 December 2018 and31 March 2019 were approximately S$27,000, S$0.1 million, S$93,000 and S$19,000, respectively. There is noassurance that impairment losses will not continue to exist in the future. When any material amount of tradereceivables is considered to be uncollectable, impairment will be made accordingly. As a result, our financialresults may be adversely affected.

We face risks related to liabilities resulting from the use of our rental passenger cars by ourcustomers.

There may be claims for personal injury, death and property damage resulting from the use of our rentalpassenger cars by our customers and our business can be exposed to such potential claims. For instance, we maybe liable for the death or property damage resulted from motor vehicle accidents caused by any mechanical orother problem including manufacturing defect of our rental passenger cars. If we are unable to successfullydefend ourselves, we could incur costs and losses that could materially and adversely affect our results ofoperations.

A material disruption of our service centres and paint workshop could adversely affect our business.

Our service centres and paint workshop are subject to operational risks. Such operational risks include butare not limited to disruptions to our power supply, natural disasters and industrial accidents. These risks couldresult in temporary, permanent, partial or complete shut-down of our operations, and as a result, our businessoperations and financial results could be adversely affected.

In addition, certain events which are beyond our control, such as adverse weather conditions, massive riots,non-co-operation of our suppliers and labour strikes, could lead to delay in delivery of spare parts andaccessories and disruption to our operations.

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Our operation is heavily dependant on the proper performance of our SAP system. Any seriousdisruption of such system could adversely impact our business.

Our operation heavily relies on our information technology systems, including the SAP system, in manyaspects, such as maintaining sales and purchase information which allows our staff to follow up and keep trackof our customers and maintaining our inventory at a regular level. Any disruption to or breakdown of our SAPsystem may have a material adverse effect on our business and results of operations.

Our insurance coverage could be inadequate and potential losses borne by us could adversely affectour cash flow and liquidity.

There is no assurance that our insurance coverage would be sufficient to cover all of our potential losses orthat we will be able to successfully claim our losses under our current insurance policies. The occurrence of anyof these events could result in our incurring substantial costs and the diversion of our resources. In the event thatwe incur losses that are not covered by our insurance coverage, or our insurance policies fail to sufficientlycompensate our actual losses, we would have to pay for the losses or the difference (as the case may be)ourselves and our cash flow and liquidity could be adversely affected.

We cannot guarantee that our insurance premiums will not rise or we will not be required by law or ourcustomers to obtain additional insurance coverage. Any significant increase in insurance costs (such as anincrease in insurance premiums) or reduction in coverage in the future may materially and adversely affect ourbusiness operations and financial results. For details of our insurance policies, please refer to the paragraphheaded ‘‘Business – Insurance’’ in this prospectus.

Manufacturer safety recalls could create risks to our business.

Our car rental business may be subject to safety recalls by the manufacturers of our rental car. During arecall period, we will have to retrieve recalled cars from customers and decline to rent these cars until we havetaken all reasonable steps described by the manufacturers in the recall. If a large number of cars is subject tosimultaneous recalls, we may not be able to rent those vehicles to our customers for a significant period of time.These recalls, depending on their severity, could materially affect our rental fleet utilisation rate, revenues,damage our customer relations, reputation and brand image, and reduce the residual value of the vehiclesinvolved.

Future expansion plans are subject to uncertainties and risks.

Our future plans have been set out in the section headed ‘‘Future Plans and Use of Proceeds’’ in thisprospectus. Whether our future plans can be implemented successfully may be beyond our control and somefuture events may affect the smooth running of the expansion plan such as shortage of technicians and changesin applicable laws, rules and regulations.

There is no assurance that we will be successful in our expansion plans. If we fail to project accurately thetime, labour and costs required for implementing our expansion plans, or if there is insufficient demand for ourservices after the expansion, our business and results of operation may be adversely affected.

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We may not be able to successfully register some of our trademarks in Bangladesh, Cambodia,Indonesia, Japan, Malaysia, Sri Lanka, Thailand and Vietnam.

Some of our trademarks are registered in Singapore, Hong Kong, China, Indonesia and Myanmar. However,protection afforded by trademark registration may not be sufficient to prevent infringement of our trademark bythird parties and may not prevent infringement of third parties’ trademarks. We have also applied for theregistrations of our other trademarks in Bangladesh, Cambodia, Indonesia, Japan, Malaysia, Sri Lanka, Thailandand Vietnam which were undergoing examination by the relevant authority in these places as at the LatestPracticable Date. For details, please refer to the paragraph headed ‘‘2. Further information about our business –

2.2 Intellectual property rights of our Group’’ in Appendix IV to this prospectus. There is no assurance that suchapplication will be successful, and our use of such trademark may infringe upon intellectual property rights ofthird parties. Should we fail to register such trademark or fail to enforce our rights against third parties, or weare held by any court or tribunal to be infringing upon or have infringed upon any trademarks of others, ourfinancial and operating results may be adversely affected.

Dividends distributed in the past may not be indicative of our dividend policy in the future.

On 30 November 2016, Optima Carz, one of our operating subsidiaries, declared interim dividend ofapproximately S$150,000 to Optima Werkz and Mr. Chew, which were its then shareholders. On 20 January2017, Optima Carz declared interim dividend of approximately S$220,000 to Optima Werkz and Mr. Chew,which were its then shareholders. On 28 August 2017, Optima Carz declared interim dividend of approximatelyS$150,000 to Optima Werkz and Mr. Chew, which were its then shareholders. On 2 November 2017, OptimaWerkz, one of our operating subsidiaries, declared interim dividend of approximately S$200,000 to Mr. Lee,Mr. Ang, Mr. Chee and Ms. FF Lim, which were its then shareholders.

Any future dividend declaration and distribution by us will depend on various factors, including, withoutlimitation, our results of operations, financial condition, future prospects and other factors which our Board ofDirectors may determine as important. Accordingly, our historical dividend distributions are not indicative of ourfuture dividend policy and we cannot assure that dividends of similar amounts or at similar rates will be declaredin the future. Potential investors should be aware that the amount of dividends previously paid should not beused as a reference or basis upon which future dividends are determined.

RISKS RELATING TO OUR INDUSTRY

If the Singapore government raises the import tariff rates on imported passenger cars or otherwiseincreases the costs of owning and using passenger cars in Singapore, our operations may be adverselyaffected.

Our Group has provided services to car dealers which imported passenger cars from overseas during theTrack Record Period and as at the Latest Practicable Date. For details, please refer to the paragraph headed‘‘Business – Customers’’ in this prospectus. If the Singapore government raises the import tariff rates forimported passenger cars, or otherwise increases the costs of owning and using passenger cars in Singapore, themarket demand for passenger cars as well as the demand for our services may reduce. As a result, our results ofoperations and financial conditions may be adversely affected.

Our Group also provides car rental services in Singapore. If the Singapore government raises the importtariff rates for imported passenger cars, or otherwise increases the costs of owning and using passenger cars inSingapore, our costs of purchasing new rental passenger cars for our car rental services will increase. If we areunable to pass the increase in costs to our customers, our profitability may be adversely affected.

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Our financial performance may be adversely affected by changes in the economic, financial or socialconditions in Singapore or countries which we may have presence.

During the Track Record Period, most of our revenue is derived from Singapore. Any changes ordevelopments in the economic, financial or social conditions in Singapore or countries which we may havepresence in, which are outside our control, may affect the demand for our services and if there are any materialadverse changes, our business and profitability may be materially and adversely affected. Further, should therebe a significant decrease in demand for our services in Singapore or countries which we may have presence in,our business and results of operations may also be materially and adversely affected.

There are competition from other service centres, including those operated by car dealers and fromother car rental companies. If car dealers or owners of other service centres decide to expand their servicecentres and/or lower the prices charged for their services, or if the other car rental companies lower theprices charged for their services, our operating results and business performance may be materially andadversely affected.

Our Group faces competition, in various aspects, such as number of service centres, convenience of thelocation of service centres, pricing, range of services and service quality, from other service centres, includingthose operated by car dealers. According to the Frost & Sullivan Report, the Singapore passenger car inspection,maintenance and repair services industry is highly fragmented, with approximately 1,500 service centres in 2018.Of the total market share as measured by revenue in Singapore in 2018, the top five players accounted forapproximately 29.6%, while approximately 5.3% comprised our market share and approximately 7.6% comprisedthe top player’s market share.

Our Group also faces competition from other car rental companies. Competition among car rentalcompanies is primarily based on, among other things, fleet size, brand recognition, price, variety and conditionof the vehicles, variety of service offerings and quality of customer service. According to the Frost & SullivanReport, the Singapore car rental industry is relatively concentrated, with approximately 300 car rental companies.The top 10 companies accounted for approximately 30.7% while our Group accounted for approximately 1.4% ofthe total market share in terms of revenue in 2018.

If car dealers or owners of other service centres decide to expand their business, for instance increasingtheir number of service centres or lowering the prices charged for their services, we may face more intensecompetition from such market players. If the other car rental companies lower the prices charged for theirservices, we may also face more intense competition from such market players. As a result, we may not becompetitive against these competitors and may suffer from a decline in the demand for our services and ouroperating results and business performance may be materially and adversely affected.

Due to the nature of our business, our Group is subject to changes in restrictions of import andexport trade.

Some of our suppliers and customers are from overseas. Any changes in restrictions of import and exporttrade of the country or region which we purchase spare parts from or deliver spare parts to, such as regulatoryrestrictions, industry-specific quotas, tariffs, non-tariff barriers and taxes, could adversely affect our business,financial condition and results of operations.

RISK FACTORS

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RISKS RELATING TO THE SHARE OFFER

There has been no prior public market for our Shares and the liquidity, market price and tradingvolume of our Shares may be volatile.

Prior to the completion of the Capitalisation Issue and the Share Offer, there has been no public market forour Shares. An active trading market for our Shares may not develop after the Share Offer and the market priceand liquidity of our Shares may be adversely affected. Factors such as variations in our revenues, earnings andcash flows, announcements of new investments and/or strategic alliances could cause the market price of ourShares to change substantially. Any such developments may result in large and sudden changes in the volumeand market price at which our Shares will be trading.

There is no assurance that these developments will or will not occur in the future and it is difficult toquantify the impact on our Group and the trading volume and price of our Shares.

In addition, both the market price and liquidity of our Shares could be adversely affected by factors beyondour control and unrelated to the performance of our business, for instance, the financial market in Hong Kongmay experience a significant price and volume fluctuation. In such cases, investors may not be able to sell ourShares at or above the Offer Price or at all.

Investors for our Shares may experience further dilution if our Group issues additional Shares in thefuture.

We will comply with Rule 17.29 of the GEM Listing Rules, which specifies that no further Shares orsecurities convertible into our equity securities (subject to certain exceptions) may be issued or form the subjectof any agreement to such an issue within six months from the Listing Date.

Having said that, upon expiry of such six-month period, we may raise additional funds by way of issue ofnew equity or equity-linked securities of our Company and such fund-raising exercises may not be conducted ona pro-rata basis to the then existing Shareholders. As a result, the shareholding of our then Shareholders may bereduced or diluted and subject to the terms of the issue of the new securities, the new securities may conferrights and privileges that have priority over those conferred by the issued Shares.

In addition, we may consider offering and issuing additional Shares in the future for expansion of ourbusiness or to the extent that our ordinary shares are allotted and issued upon the exercise of share options underthe Share Option Scheme. In this regard, our then Shareholders may experience further dilution in the nettangible asset book value per Share if we issue additional Shares in the future at a price which is lower than thenet tangible asset book value per Share.

Future sales or perceived sales of a substantial amount of our Shares by our ControllingShareholders in the public market may affect the prevailing market price of our Shares.

The Shares beneficially owned by our Controlling Shareholders are subject to certain lock-up periods.There is no assurance that our Controlling Shareholders will not dispose of the Shares held by them followingthe expiration of the lock-up periods. We cannot predict the effect, if any, that any future sales of our Shares byany of our Controlling Shareholders, or the availability of our Shares for sale by any of our ControllingShareholders may have on the market price of our Shares.

Sales of substantial amount of our Shares by any of our Controlling Shareholders in the public market, orthe perception that such sales may occur, could materially and adversely affect the prevailing market price of ourShares.

RISK FACTORS

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Granting options under the Share Option Scheme would result in the reduction in the percentageownership of the Shareholders and may result in a dilution in the earnings per Share and net asset valueper Share.

We have conditionally adopted the Share Option Scheme although no options had been granted thereunderas at the Latest Practicable Date. Any exercise of the options to be granted under the Share Option Scheme inthe future and issue of Shares thereunder would result in the reduction in the percentage ownership of ourShareholders and may result in a dilution in the earnings per Share and net asset value per Share, as a result ofthe increase in the number of Shares outstanding after such issue.

Under HKFRSs, the costs of the share options to be granted under the Share Option Scheme will becharged to our consolidated statements of profit or loss and other comprehensive income over the vesting periodby reference to the fair value at the date on which the options are granted under the Share Option Scheme. As aresult, our profitability and financial results may be adversely affected.

Investors should not place any reliance on any information contained in the press articles or othermedia regarding us and the Share Offer.

There may have been press and media coverage on us and the Share Offer, which may contain references tocertain events, or information such as financial information, financial projections, and other information about usthat do not appear in this prospectus.

You should only rely on the information contained in this prospectus, the Application Forms, and anyformal announcement(s) made by us in Hong Kong when making any investment decision(s) regarding ourShares. We do not accept any responsibility for the accuracy or completeness of any information reported by thepress or other media, the fairness, appropriateness or reliability of any forecasts, or the views or opinionsexpressed by the press or other media regarding our Shares, the Share Offer, or us. We make no representationas to the appropriateness, accuracy, completeness or reliability of any such information or publication by thepress or media. To the extent that any such information appearing in publications other than this prospectus isinconsistent with, or conflicts with, the information contained in this prospectus, we disclaim it.

Accordingly, prospective investors are cautioned against making their investment decisions in reliance onany other information, reports, or publications other than this prospectus.

RISK FACTORS

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DIRECTORS’ RESPONSIBILITY FOR THE CONTENTS OF THIS PROSPECTUS

This prospectus, for which our Directors collectively and individually accept full responsibility, includesparticulars given in compliance with the GEM Listing Rules for the purpose of giving information to the publicwith regard to our Group. Our Directors, having made all reasonable enquiries, confirm that to the best of theirknowledge and belief, the information contained in this prospectus is accurate and complete in all materialrespects and not misleading or deceptive, and there are no other matters the omission of which would make anystatement in this prospectus misleading.

INFORMATION ON THE SHARE OFFER

The Offer Shares are offered for subscription solely on the basis of the information contained and therepresentations made in this prospectus. No person is authorised in connection with the Share Offer to give anyinformation, or to make any representation, not contained in this prospectus. Any information or representationnot contained herein shall not be relied upon as having been authorised by our Company, the Sole Sponsor, theJoint Global Coordinators, the Joint Bookrunners, the Joint Lead Managers, the Underwriters, any of theirrespective directors, officers, agents, employees, affiliates and/or representatives or any other person or partiesinvolved in the Share Offer.

Details of the structure of the Share Offer, including its conditions, are set out in the section headed“Structure and Conditions of the Share Offer” in this prospectus, and the procedures for applying for the PublicOffer Shares are set out in the section headed “How to Apply for Public Offer Shares” in this prospectus and inthe relevant Application Forms.

OFFER SHARES ARE FULLY UNDERWRITTEN

This prospectus is published in connection with the Share Offer. The Listing is sponsored by the SoleSponsor. The Public Offer is fully underwritten by the Public Offer Underwriters under the terms and conditionsof the Public Offer Underwriting Agreement. The Placing Underwriting Agreement relating to the Placing isexpected to be entered on or around the Price Determination Date, subject to agreement on pricing of the OfferShares between our Company and the Joint Global Coordinators (for themselves and on behalf of theUnderwriters). The Share Offer is managed by the Joint Global Coordinators, the Joint Bookrunners and JointLead Managers. Further information relating to the Public Offer Underwriters and the Share Offer and theunderwriting arrangements is set out in the section headed ‘‘Underwriting’’ in this prospectus. If, for any reason,the Offer Price is not agreed, the Share Offer will not proceed and will lapse.

RESTRICTIONS ON OFFER OF THE OFFER SHARES

Each person subscribing for the Offer Shares will be required to confirm or be deemed by his subscriptionof Offer Shares to confirm that he is aware of the restrictions on the offer of the Offer Shares described in thisprospectus.

As at the Latest Practicable Date, no action has been taken in any jurisdiction other than Hong Kong topermit the offering of the Offer Shares or the distribution of this prospectus. Accordingly, this prospectus maynot be used for the purposes of, and does not constitute, an offer or invitation in any jurisdiction or in anycircumstance in which such offer or invitation is not authorised or to any person to whom it is unlawful to makean unauthorised offer or invitation.

INFORMATION ABOUT THIS PROSPECTUS AND THE SHARE OFFER

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The distribution of this prospectus and the offering of the Offer Shares in other jurisdictions are subject torestrictions and may not be made except as permitted under the applicable laws or any applicable rules andregulations of such jurisdictions pursuant to registration with or authorisation by the relevant regulatoryauthorities as an exemption therefrom.

The Offer Shares are offered for subscription solely on the basis of the information contained and therepresentations made in this prospectus. No person is authorised in connection with the Share Offer to give anyinformation or to make any representation not contained in this prospectus, and any information or representationnot contained herein must not be relied upon as having been authorised by our Company, the Sole Sponsor, theJoint Global Coordinators, the Joint Bookrunners, the Joint Lead Managers, the Underwriters, any of theirrespective directors, officers, agents, employees, affiliates and/or representatives or any other persons involvedin the Share Offer.

APPLICATION FOR LISTING ON GEM

Application has been made to the Stock Exchange for the listing of, and permission to deal in, our Sharesin issue and to be issued pursuant to the Share Offer (including the Shares which may be issued pursuant to theexercise of the Offer Size Adjustment Option and any options which may be granted under the Share OptionScheme and any Shares to be issued under the Capitalisation Issue).

No part of the share or loan capital of our Company is listed on or dealt in on any other stock exchangeand no such listing or permission to deal in is being or is proposed to be sought in the near future.

Under section 44B(1) of the Companies (Winding Up and Miscellaneous Provisions) Ordinance, anyallotment made in respect of any application will be void if permission for the listing of, and dealing in, theShares on GEM has been refused before the expiration of three weeks from the date of closing of the applicationlists or such longer period (not exceeding six weeks) as may, within the said three weeks, be notified to ourCompany by or on behalf of the Stock Exchange.

Only securities registered on the branch register of members of our Company kept in Hong Kong may betraded on GEM unless the Stock Exchange otherwise agrees.

Pursuant to Rule 11.23(7) of the GEM Listing Rules, at the time of listing and at all times thereafter, ourCompany must maintain the ‘‘minimum prescribed percentage’’ of 25% of the issued share capital of ourCompany in the hands of the public. A total of 250,000,000 Offer Shares representing 29.41% of the enlargedissued share capital of our Company will be in the hands of the public immediately following completion of theShare Offer and the Capitalisation Issue and upon Listing (but without taking into account any Shares which maybe issued pursuant to any options which may be granted under the Share Option Scheme).

DEALINGS AND SETTLEMENT

Dealings in the Shares on GEM are expected to commence at 9:00 a.m. (Hong Kong time) on Friday,11 October 2019.

Our Shares will be traded in board lots of 10,000 Shares each and are freely transferable.

The GEM stock code for our Shares is 8418.

Our Company will not issue any temporary document of title.


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PROFESSIONAL TAX ADVICE RECOMMENDED

Investors for the Offer Shares are recommended to consult their professional advisers if they are in doubtas to the taxation implications of the subscription for, holding, purchase, disposal of or dealing in, our Shares orexercising their rights thereunder. It is emphasised that none of our Company, our Directors, the Sole Sponsor,the Joint Global Coordinators, the Joint Bookrunners, the Joint Lead Managers, the Underwriters and theirrespective directors, officers, agents, employees, affiliates and/or representatives or any other persons involvedin the Share Offer accepts responsibility for any tax effects on, or liability of, holders of Shares resulting fromthe subscription for, holding, purchase, disposal of or dealing in, the Shares or exercising of any rightsthereunder.

SHARE REGISTRARS AND STAMP DUTY

The principal register of members of our Company will be maintained by our principal share registrar,Conyers Trust Company (Cayman) Limited, in the Cayman Islands and a branch register of members of ourCompany will be maintained by our Hong Kong Branch Share Registrar and transfer office, Tricor InvestorServices Limited, in Hong Kong. Unless our Directors otherwise agree, all transfer and other documents of titleof Shares must be lodged for registration with, and registered by our Company’s Hong Kong Branch ShareRegistrar and transfer office.

All the Shares will be registered on our Company’s branch register of members in Hong Kong. Only Sharesregistered on our Company’s branch register of members in Hong Kong may be traded on GEM. Dealings in theShares registered on our Company’s branch register of members maintained in Hong Kong will be subject toHong Kong stamp duty.

SHARES WILL BE ELIGIBLE FOR ADMISSION INTO CCASS

Subject to the approval of the listing of, and permission to deal in, our Shares in issue and to be issued asmentioned in this prospectus on GEM and the compliance of our Company with the stock admissionrequirements of HKSCC, our Shares will be accepted as eligible securities by HKSCC for deposit, clearance andsettlement in CCASS with effect from the Listing Date, or on any other date as determined by HKSCC.

Settlement of transactions between participants of the Stock Exchange is required to take place in CCASSon the second business day after any trading day. Investors should seek the advice of their stockbroker or otherprofessional adviser for details of those settlement arrangements as such arrangements will affect their rights andinterests.

All activities under CCASS are subject to the General Rules of CCASS and CCASS Operational Proceduresin effect from time to time.

All necessary arrangements have been made for the Shares to be admitted into CCASS.

LANGUAGE

If there is any inconsistency between the English version of this prospectus and the Chinese version of thisprospectus, the English version of this prospectus shall prevail. Names of any laws and regulations,governmental authorities, institutions, natural persons or other entities which have been translated into Englishand included in this prospectus and for which no official English translation exists are unofficial translations foryour reference only.


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ROUNDING

Any discrepancies in any table between totals and sums of the amount listed in this prospectus are due torounding.

EXCHANGE RATE CONVERSION

Unless otherwise specified and for illustration purpose only, conversion of US$ into HK$ and conversionof S$ into HK$ in this prospectus are based on the exchange rate sets out below:

US$1.00 = HK$7.80

S$1.00 = HK$5.77

Such conversion shall not be construed as representations that amount of such currency was or may havebeen converted into HK$ and vice versa at such rates or any other exchange rates.


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DIRECTORS

Name Residential address Nationality

Executive Directors

Mr. Ang Lay Keong (Hong Liqiang) 140 Countryside Road,Singapore 789861

Singaporean

Ms. Lim Li Ling (Lin Liling) 140 Countryside Road,Singapore 789861

Singaporean

Ms. Tan Peck Luan (Chen Biluan) Blk 55 Geylang Bahru#11-3607 Singapore 330055

Singaporean

Independent non-executive Directors

Mr. Chu Kin Ming（朱健明） Room C, 11/F, Block 1,Heya Aqua395 Un Chau StreetCheung Sha Wan, KLN,Hong Kong

Chinese

Mr. Tang Chi Chiu（鄧志釗） Unit C, 7/F, Tower 528 Sheung Shing Street,Mantin HeightsHo Man Tin, KowloonHong Kong

Chinese

Ms. Liang Weizhang（梁偉章） Room 204, Block 2,8 Nanjiang RoadShiqi Zone, Zhongshan City,Guangdong Province, China

Chinese

For further information on the profile and background of our Directors, please refer to the section headed‘‘Directors and Senior Management’’ in this prospectus.

DIRECTORS AND PARTIES INVOLVED IN THE SHARE OFFER

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PARTIES INVOLVED IN THE SHARE OFFER

Sole Sponsor Orient Capital (Hong Kong) LimitedRooms 2803-2807, 28/F, Wing On House71 Des Voeux Road CentralCentral, Hong KongA licensed corporation to carry on type 6 (advising on corporatefinance) regulated activities under the SFO

Joint Global Coordinators, JointBookrunners and Joint Lead Managers

Orient Securities (Hong Kong) LimitedRooms 2803-2807, 28/F, Wing On House71 Des Voeux Road CentralCentral, Hong KongA licensed corporation to carry on type 1 (dealing in securities)and type 4 (advising on securities) regulated activities under theSFO

Aristo Securities LimitedRoom 101, 1st Floor, On Hong Commercial Building145 Hennessy RoadWanchai, Hong KongA licensed corporation to carry on type 1 (dealing in securities)regulated activities under the SFO

Co-Manager Chuenman Securities LimitedOffice A, 10/F, Sang Woo Building227-228 Gloucester RoadWan Chai, Hong KongA licensed corporation to carry on type 1 (dealing in securities)regulated activities under the SFO

Legal advisers to our Company As to Hong Kong lawLi & Partners22/F, World-Wide House19 Des Voeux Road CentralHong Kong

As to Singapore lawEquity Law LLC7 Temasek Boulevard#43-03 Suntec Tower OneSingapore 038987

As to Cayman Islands lawConyers Dill & PearmanCricket SquareHutchins DriveP.O. Box 2681Grand Cayman, KY1-1111Cayman Islands


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Legal advisers to the Sole Sponsor andthe Underwriters

As to Hong Kong lawHastings & Co.5th Floor, Gloucester TowerThe Landmark11 Pedder StreetCentralHong Kong

As to Singapore lawShook Lin & Bok LLP1 Robinson Road#18-00 AIA TowerSingapore 048542

Reporting accountants and auditors BDO Limited25th Floor, Wing On Centre111 Connaught Road CentralHong Kong

Compliance adviser Orient Capital (Hong Kong) LimitedRooms 2803-2807, 28/F Wing On House71 Des Voeux Road CentralCentral, Hong Kong

Industry consultant Frost & Sullivan International Limited1706, One Exchange Square8 Connaught PlaceCentral, Hong Kong

Receiving Bank DBS Bank (Hong Kong) Limited11/F., The Center99 Queen’s Road CentralHong Kong


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Registered office inthe Cayman Islands

Cricket SquareHutchins Drive, P.O. Box 2681Grand Cayman, KY1-1111Cayman Islands

Principal place of businessin Hong Kong

17th Floor, MW TowerNo. 111 Bonham StrandSheung Wan, Hong Kong

Principal place of businessin Singapore

6 Kung Chong RoadAlexandra Industrial EstateSingapore 159143

Company’s website www.ow.sg(Note: the information contained in this website does not form partof this prospectus)

Company secretary Mr. Chan Tsang Mo, HKICPA17th Floor, MW TowerNo. 111 Bonham StrandSheung Wan, Hong Kong

Authorised representatives Ms. Tan Peck Luan (Chen Biluan)6 Kung Chong RoadAlexandra Industrial EstateSingapore 159143

Mr. Chan Tsang Mo, HKICPA17th Floor, MW TowerNo. 111 Bonham StrandSheung Wan, Hong Kong

Audit committee Mr. Tang Chi Chiu (Chairman)Mr. Chu Kin MingMs. Liang Weizhang

Remuneration committee Ms. Liang Weizhang (Chairlady)Mr. Tang Chi ChiuMr. Chu Kin Ming

Nomination committee Ms. Liang Weizhang (Chairlady)Mr. Ang Lay Keong (Hong Liqiang)Mr. Chu Kin Ming

Hong Kong branch share registrar Tricor Investor Services LimitedLevel 54, Hopewell Centre,183 Queen’s Road East,Hong Kong

CORPORATE INFORMATION

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Principal share registrar office Conyers Trust Company (Cayman) LimitedCricket Square, Hutchins DriveP.O. Box 2681, Grand CaymanKY1-1111, Cayman Islands

Compliance adviser Orient Capital (Hong Kong) LimitedRooms 2803-2807, 28/F Wing On House71 Des Voeux Road CentralCentral, Hong Kong

Compliance officer Ms. Tan Peck Luan (Chen Biluan)6 Kung Chong RoadAlexandra Industrial EstateSingapore 159143

Principal bankers United Overseas Bank Limited80 Raffles PlaceUDB Plaza 1, #07-01Singapore 048624

DBS Bank Ltd12 Marina BoulevardMarina Bay Financial Centre Tower 3Singapore 018982

CORPORATE INFORMATION

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The information presented in this section is derived from the Frost & Sullivan Report, as well as variousofficial or publicly available publications. The information derived from the Frost & Sullivan Report reflectsestimates of the market conditions based on information from various sources. We believe that the sources ofthe information in this section are appropriate sources for such information and have taken reasonable care inextracting and reproducing such information. We have no reason to believe that such information is false ormisleading or that any part has been omitted that would render such information false or misleading. OurDirectors confirm that, after taking reasonable care, they are not aware of any adverse change in marketinformation since the date of the Frost & Sullivan Report which may qualify, contradict or adversely impactthe quality of the information in this section.

We, the Sole Sponsor, the Joint Global Coordinators, the Joint Bookrunners, the Joint Lead Managers,the Underwriters, or their respective affiliates or advisors or any other party involved in the Share Offer,excluding Frost & Sullivan, have not independently verified, and make no representation as to, the accuracyof the information from official government or other third party sources. Such information may not beconsistent with, and may not have been compiled with the same degree of accuracy or completeness as, otherinformation compiled within or outside Singapore. Accordingly, the official government and other third partysources contained herein may not be accurate and should not be unduly relied upon.

OVERVIEW OF THE PASSENGER CAR MARKET IN SINGAPORE

Definition and classification of passenger car

A passenger car is defined as a wheeled road motor vehicle, other than a motor cycle, intended primarilyfor the carriage of passengers. Vehicles such as buses and trucks are defined as commercial vehicles, which donot fall into the category of passenger cars. In terms of the general public perception, passenger cars could beclassified into ‘‘entry and medium-level’’, ‘‘luxury’’ and ‘‘ultra-luxury’’ brands.

Introduction of passenger car distributors and dealers in Singapore

In Singapore, new passenger cars are all imported from overseas, and used passenger cars are importedfrom overseas or traded domestically. Based on the varying business models, passenger car distributors anddealers can be classified into two types:

• Authorised passenger car distributors and dealers, who sign dealership contracts with specificpassenger car manufacturers or their sales subsidiary. Some authorised distributors and dealers usuallysell single brand passenger cars. However, there are also multi-brand authorised passenger cardistributors and dealers that sell passenger cars from different manufacturers.

• Independent passenger car distributors and dealers (also known as parallel importers), who sellpassenger cars imported from another country without signing dealership contracts withmanufacturers. Independent passenger car distributors and dealers do not obtain authorisation fromthe passenger car manufacturers, and they have full control over their business activities.

The mixed impact of the Singapore government’s policies and initiatives

The automotive sector in Singapore is significantly influenced by relevant policies and initiatives. In recentyears, there were several policies which included, among others, ‘zero-growth’ policy on COE quota andwarranty restrictions removal on use of independent workshops, having a mixed impact on the pace ofdevelopment in automotive sector.

INDUSTRY OVERVIEW

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As Singapore has become more affluent and its car population grew rapidly in the 1970s and 1980s,maintaining control over the car population has become a long-term plan of the Singapore government given thatthe roads capacity in Singapore may not be enough, resulting in severe traffic congestion. To control the growthrate of car population at a sustainable rate, the Vehicle Quota System (‘‘VQS’’) was introduced in 1990. TheVQS system is the key method to control the number of new cars allowed for registration. Through the VQSsystem, the Singapore government can control the number of newly registered cars by setting an allowablegrowth rate for the car population (in general, the annual quota is set at the projected number of vehiclesderegistered the previous year with additional new COEs based on the allowable growth in the car population).The allowable growth rate has changed from time to time and decreased from 1.5% in 2009 to 0% in 2018, i.e.the ‘‘zero-growth’’ of car population policy which was effective on 1 February 2018. The decrease in allowablegrowth rate is effective to curb traffic congestion and disturbance, and the car population in Singapore hasmaintained at the level of around 600 thousand units from 2013 to 2018. With a zero-growth on total carpopulation, the development of the after-market automotive services market has been restrained to some extent.However, the increase of ageing passenger cars in Singapore is expected to counteract the impact of the zerogrowth of total car population as ageing passenger cars will require more frequent maintenance and repairservices, resulting in a stronger demand for after-market automotive services in the future.

Our Directors are of the view that the above ‘‘zero-growth’’ policy has no material adverse impact on ourGroup for the following reasons:

(i) According to the Frost & Sullivan Report, notwithstanding the expected slight decrease in the totalnumber of registered passenger car from 618,055 units in 2018 to 616,808 units in 2023, the marketsize of passenger car maintenance and repair industry is expected to grow at a CAGR of 2.9% fromS$268.9 million in 2018 to S$309.7 million in 2023. This can be attributable to the expected decreasein the total number of newly registered passenger car at a CAGR of -18.7% from 80,281 units in 2018to 28,516 units in 2023, resulting in a gradual increase in the proportion of aged passenger cars overthe years. As wear and tear of parts and components in passenger cars are associated with increasingmileages driven, the envisaged growing proportion of aged passenger cars population from 2018 to2023 is expected to enlarge the market size of passenger car maintenance and repair industry by 2023.

(ii) Further, according to the Frost and Sullivan Report, as the number of passenger cars aged over threeyears is expected to grow from 359,163 in 2018 to 523,963 in 2023, the market size of theindependent service provider segment in the passenger car maintenance and repair industry inSingapore is expected to grow at a CAGR of 7.7% from 2018 to 2023. This is supported by theresponse to the enquiry of the Competition Commission of Singapore that the passenger car ownerstend to switch to servicing at other independent workshops upon the expiry of the initial warrantyprovided by the authorised dealers.

(iii) According to the Frost & Sullivan Report, the net increase in COE quotas for passenger cars based onthe allowable growth in the passenger car population was 1,409 units between February 2015 andJanuary 2016, 1,504 units between February 2016 and January 2017 and 1,496 units betweenFebruary 2017 and January 2018. Accordingly, the reduction of the allowable growth rate for COEquota pursuant to the ‘‘zero-growth’’ policy only accounts for less than 0.3% of the total number ofregistered passenger cars in Singapore for each of the three years prior to the implementation of the‘‘zero-growth’’ policy in February 2018.

INDUSTRY OVERVIEW

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Furthermore, the warranty restrictions removal, which was announced by the Competition Commission ofSingapore on 11 December 2017 and implemented on 31 December 2017, allow passenger cars with factorywarranty to be serviced at independent workshop without having their factory warranty voided by the authoriseddealers regardless of whether such service or repair is covered by the motor warranties. This means thatpassenger car owners can have their cars serviced at any reputable and high quality workshop. This trend isexpected to facilitate the growth of independent workshops’ market share, and benefit business segments, such asnon-insured repair service and insured repair service. For details, please see the analysis of each market segmentin this section.

Our Directors are of the view that the above initiative would benefit our after-market automotive business,particularly the inspection, maintenance and non-insured repairs business segment. As confirmed by ourSingapore legal advisers, previously under such restriction, passenger car owners who bring their vehicles forservicing or repair at independent workshops may have their motor warranties voided by the authorised dealersregardless of whether such service or repair is covered by the motor warranties. Such restrictions had deterredpassenger car owners from using independent workshops and thus undermined our ability to compete effectivelywith authorised dealer’s workshops. Further, motor warranties provided by authorised dealers usually only coverselected vehicle parts and breakdowns due to manufacturing defects and does not cover damages caused byaccidents. As a result, while passenger car owners will usually return to the authorised dealers’ workshops forservicing during the warranty period, with the removal of the said restriction, they may now repair the vehicle atindependent workshops if the relevant parts are not covered under warranty or if the damage sustained is causedby an accident without the risk of the warranty being voided by the authorised dealers.

According to the Frost & Sullivan Report, the total number of registered passenger cars aged less thanthree years in Singapore was approximately 256,000 units in 2018, representing approximately 41.6% of the totalnumber of registered passenger cars in 2018. Among the 256,000 units, approximately 80% of the units(representing approximately 30% of the total number of registered passenger cars in 2018) are purchased fromauthorised dealers with factory warranty. The industry consultant is of the view that, theoretically, car owners ofapproximately 30% (representing cars aged less than three years with factory warranty) of the total number ofregistered passenger cars in 2018 will seek independent workshops with lower prices for after-market automotiveservices as they are no longer under the risk of having their factory warranties voided by the authorised dealer asa result of repairing the vehicle at independent workshops. According to the Frost & Sullivan Report, eachmaintenance or repair in authorised dealers’ workshops generally cost 30% to 50% higher than independentworkshops. The Competition Commission of Singapore also noted that in some occasions, authorised dealers’workshops can charge two to three times as much as an independent workshop does for comparable parts andservicing. With the removal of such restriction, our Directors are of the view that passenger car owners will seekfor reputable and high-quality independent workshops, like our Group, to replace the relatively more expensiveauthorised dealers’ workshops.

Our Directors are also of the view, and Frost & Sullivan concurs, that the removal of the warrantyrestriction will also benefit our insured repair service. Passenger car owners will now have more options torepair their vehicles for insured repair services as they are no longer under the risk of having their factorywarranties voided by the authorised dealer as a result of repairing the vehicle at independent workshops.Moreover, with the removal of such warranty restrictions, insurance companies will likely encourage car ownersto send their vehicles to repair at independent workshops as independent workshops in general offer morecompetitive pricing for the same parts.

INDUSTRY OVERVIEW

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Introduction of the COE System in Singapore

A Certificate of Entitlement (‘‘COE’’) is the quota license which grants the legal right of car ownershipand use of limited road space in Singapore for 10 years. Potential car owners in Singapore are required by theLTA to first obtain a COE in the appropriate car category before purchasing a new car. According to the LTA,there are 5 categories to differentiate new registration of motor car under the VQS system, such as Category A(Cars up to 1600CC and 97kW), Category B (Cars above 1600CC or 97kW), Category C (Goods Vehicles &Buses), Category D (Motorcycles), and Category E (Open-all except motorcycle including taxis and vehiclesexempted from VQS). All passenger cars including entry and medium level brands, luxury brands and ultra-luxury brands mostly fall in category A and category B in Singapore.

The monthly COE quota is calculated by summing up (i) the allowed annual net increase in car population;(ii) the replacement of de-registered cars; and (iii) adjustments to account for changes in taxi population, pastover-projections, expired or cancelled temporary COE, etc.. Given the vehicle growth rate from February 2018onwards has been set at 0% per annum for Category A, B and D and the adjustments to account for changes intaxi population remain comparatively stable every month, the replacement of de-registered cars influences theCOE quota largely. Furthermore, as the Singapore government can control the COE quota based on past over-projections, the number of registered-cars are also affected by the authority to some extent.

The COE price is hugely influenced by the COE quota. In February 2013, the COE price droppedsignificantly after the new loan restrictions imposed by Monetary Authority of Singapore, which largelydiscouraged the purchase of new passenger cars. In September 2013, the COE price then increased significantlydue to the announcement of new COE categorisation criteria by the LTA which took most premium models outof vehicle category A to vehicle category B. From 2014 to 2018, the COE price represented a downward trend asa result of the increase in COE quota during the same historical period.

Vehicle category Category A Category B Category E

2013 Quota 8,534 8,230 6,247Successful Bids 8,455 8,042 5,972






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Total number of registered passenger cars breakdown by type

Between 2013 and 2018, the total number of registered passenger cars remained relatively stable due to theSingapore government’s control for the aim of preventing severe air pollution, alleviating traffic congestion andthe shortage of space. The total number of registered passenger cars decreased from 623,688 units in 2013 to618,055 units in 2018, representing a CAGR of -0.2%. The total number of registered passenger cars experiencedslight decrease from 2014 to 2016 as large number of old passenger cars reached the 10-year usage limitationand were scrapped. In 2017 and 2018, a rise in ride-sharing demand has boosted the sales of private hire cars,which have reversed the contraction of passenger car population in Singapore.

The Singapore government has announced the ‘‘zero-growth’’ policy under which the growth cap for allpassenger cars would be cut from 0.25% per annum to 0% with effect from February 2018 in order to furtheralleviate the massive traffic jams. Between February 2015 and January 2018, the net increase in COE quotas forpassenger cars based on the allowable growth rate in passenger car population was between 1,409 and 1,504units per year. The adjustment to the vehicle growth rate to zero is not expected to significantly affect the totalnumber of registered passenger cars, as the number is determined largely by the number of vehicle de-registrations and successful bids of COEs. In the forecasted period, the total number of registered passenger carsis expected to maintain at the level of around 600 thousand units.

Driven by the continuously expanding sales volume, the total number of registered luxury and ultra-luxurypassenger cars experienced a rapid growth from 112,542 units in 2013 to 153,703 units in 2018, representing aCAGR of 6.4%, in spite of the downward trend of the total number of registered passenger cars in Singaporeafter 2013. Going forward, the total number of registered luxury and ultra-luxury passenger cars is expected tofurther increase over the next five years. It is estimated to increase from 153,703 units to 189,360 units,representing a CAGR of 4.3% from 2018 to 2023.

Total Number of Registered Passenger Cars, Breakdown by Type, 2013-2023E

2013

623,688

112,542

2014 2015 2016 2017 2018 2019E 2020E 2021E 2023E2022E

Unit

619,023 604,722 603,763 614,789 618,055 617,580 616,794 615,911 616,808

511,146 499,002 476,885 467,372 468,135 464,352 457,009 449,643 427,448440,992

120,021 127,837 136,391 146,654 153,703 160,571 167,151 174,919 189,360

614,919

432,903

182,016

2013-2018

-1.9%Entry & Medium-level Passenger Car

CAGR 2018-2023E

-1.6%

6.4%Luxury & Ultra-luxury Passenger Car 4.3%

-0.2%Total 0.0%

Entry & Medium-level Passenger CarLuxury & Ultra-luxury Passenger Car

400,000

200,000

600,000

800,000

0

Source: Land Transport of Authority, Frost & Sullivan

Note:

(1) Luxury & ultra-luxury passenger cars encompass brands, such as Audi, Austin, B.M.W, Cadillac, Chrysler, Daimler, Holden,Hummer, Infinity, Jaguar, Lancia, Land Rover, M.G., Mercedes Benz, MG-F, MINI, MINI-May fair, Morgan, Morris, Panther,Rover, Singer, Volvo, Alfa Romeo, Tesla, Aston Martin, Bentley, Ferrari, Lamborghini, Maserati, Maybach, McLaren,Mitsuoka, Porsche and Rolls Royce;

(2) Figures include tax exempted and VQS exempted passenger cars but exclude taxis.

INDUSTRY OVERVIEW

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Total number of registered passenger cars breakdown by age distribution

The total number of registered passenger cars aged less than three years in Singapore largely increased at aCAGR of 27.2% from 76,998 units in 2013 to 256,289 units in 2018, while the total number of registeredpassenger cars aged over three years in Singapore decreased from 544,347 units in 2013 to 359,163 units in2018. The said changes were mainly attributed to the fact that a large number of aging passenger cars reachingthe 10-year usage limitation, followed by the purchase of new COE and passenger cars.

Going forward, after the peak of COE renewal from 2015 to 2018, a decline in newly registered passengercars is expected after 2018, which implies that there will be an increasing number of aging passenger cars inSingapore during the forecasted period.

Total Number of Registered Passenger Cars, Breakdown by Age Distribution, 2013-2023E

0100000200000300000400000500000600000700000800000

2013

621,345

2014 2015 2016 2017 2018 2019E 2020E 2021E 2023E2022E

Unit

616,609 602,311 601,257 612,256 615,452 615,110 614,327 613,447 614,341

544,347 538,831 494,452 428,207376,165 359,163

376,014 423,384 523,963471,307

76,998 77,778 107,859 173,050236,091 256,289 239,096 190,943

90,378

612,459

507,628

104,831142,140

2013-2018

27.2%

CAGR 2018-2023E

-18.8%

-8.0% 7.8%

-0.2%Total 0.0%

Registered Passenger Car Aged Less than 3 Years

Registered Passenger Car Aged Over 3 Years

Registered Passenger Car Aged Over 3 YearsRegistered Passenger Car Aged Less than 3 Years

0

800,000700,000600,000500,000400,000300,000200,000100,000

Source: The LTA, Frost & Sullivan

Note: Figures exclude tax exempted vehicles and vehicles for off-the-road use.

Total number of newly registered passenger cars breakdown by type

The change in the total number of newly registered passenger cars in Singapore is cyclical in nature, drivenby vehicle age limits and the COE system. With relatively low COE prices and growing purchasing power, highdemand for passenger cars had contributed to a noticeable increase in total number of newly registered passengercars between 2005 and 2007 in Singapore. It had then gradually decreased due to the Singapore government’scontrols on vehicle ownerships and the rising costs of COE prices. From 2015 to 2017, the total number ofnewly registered passenger cars sharply increased due to the large number of passenger cars reaching the 10-yearusage limitation, followed by the purchase of new passenger cars and COEs. Due to the cyclical nature of themarket, a period of decline is expected after 2017 because of the shrinking number of passenger cars reachingthe 10-year COE period. It is expected that the total number of newly registered passenger cars in Singaporeshall decrease at a CAGR of -18.7% from 80,281 units in 2018 to 28,516 units in 2023.

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Total Number of Newly Registered Passenger Car, Breakdown by Type, 2013-2023E

0

20000

40000

60000

80000

100000

120000

0

60,000

40,000

20,000

100,000

80,000

120,000

2013

22,472

12,170

2014 2015 2016 2017 2018 2019E 2020E 2021E 2023E2022E

Unit

28,932

57,589

87,504 91,92280,281

67,931

43,44230,977 30,526

10,302 17,014

43,100

70,156 71,363 60,97750,828

32,027 21,74222,435

11,918 14,489 17,348 20,559 19,304 17,103 11,415 8,542 8,784

28,516

19,996

8,520

2013-2018

42.7%Entry & Medium-level Passenger Car

CAGR 2018-2023E

-20.0%

9.7%Luxury & Ultra-luxury Passenger Car -15.1%

29.0%Total -18.7%


Source: Land Transport of Authority, Frost & Sullivan

OVERVIEW OF THE AFTER-MARKET AUTOMOTIVE SERVICE IN SINGAPORE

Industry value chain analysis

Upstream suppliers are manufacturers that produce and process all passenger car parts, chemicals,equipment, and accessories used in providing after-market automotive services, as well as providing products toauthorised service centres, independent service centres and distributors.

Distributors refer to the middlemen that distribute goods used in providing after-market services and resellthem to passenger vehicle after-market service providers.

Passenger car after-market automotive service providers provide different services to end customersdepending on their business development. A majority of the service providers can only provide one or few after-market automotive services to end customers due to capital and talent barriers, whereas some leading serviceproviders are able to offer a wide range of comprehensive after-market automotive services to a broad class ofpassenger cars of different makers and models.

Within the highly fragmented and complex market for after-market automotive services, two types ofservice providers can be identified; (i) authorised dealers; and (ii) independent service providers. It is commonfor Singapore authorised dealers to offer official factory warranty to their customers, and they generally havetheir own exclusive workshops in order to assure service quality and generate more revenues. In Singapore, carsof younger age tend to be serviced in such authorised dealers’ workshops. Independent service providers providemaintenance and repair services for a wide range of customers from parallel importers, insurance companies, carleasing companies, individuals and other corporations. Although some parallel importers have their ownworkshops, there is a trend that parallel importers increasingly outsource their after-market functions, such asmaintenance and repair and warranty management to well-chosen independent service providers owing to costcontrol and core business focus.

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Introduction of Passenger Car Warranty in Singapore

New passenger car purchased from the authorised dealers usually come with the factory warranties, whichare backed by the original manufacturer for a specific period of time or specific mileage limits. As advised byour Singapore Legal Advisers, in general if the factory warranty is given as part of the purchase of passengercars and is not extended separately under a contract for which a fee is payable, such factory warranty would notbe governed by the Monetary Authority of Singapore. A factory warranty generally covers all repairs orreplacements needed for passenger cars to assure their performance and quality (factory warranty generallyincludes coverage on the powertrain of the passenger car including the engine, transmission, and other selectedpowertrain parts and basic coverage that covers all repairs on the vehicle that can be kept in good conditionthrough regular maintenance except malfunctions due to misuse, damage caused by accidents and ‘‘wear and tearitems’’ such as oil changes, tires, brake pads and windshield wipers that wear out during usage), and it preventsmuch risk for expensive repair bill. With more assurance and reliability, a majority of customers prefer topurchase new passenger cars from the authorised dealers. For parallel importers, after-sales automotive servicesare provided by their own workshops or independent services providers. New passenger car warranties fromparallel importers may cover different aspects ranging from basic mechanical repairs to comprehensive after-sales services, as parallel importers have full control over their business activities.

On the other hand, motor warranties previously provided by independent service providers must only beback by insurance company in Singapore in light of the requirement of Monetary Authority of Singaporeimplemented since late 2016. This is because the Monetary Authority of Singapore is of the view that suchmotor warranties provided by the independent service providers are within the definition of insurance business inSingapore and shall be provided by an insurer licensed by the Monetary Authority of Singapore. Independentservice providers have to enter a service agreement with licensed insurers in order to provide warrantyprogramme for customers. In general, there are no material differences in the coverage between factorywarranties and warranties backed by insurance companies. In some occasions, insurance companies may widenthe coverage of the warranty to increase competitiveness. Typically, car owners who participate in the warrantyprogramme will pay a premium to insurance company at first. When such vehicles are sent in for repair duringthe warranty period, independent service providers receive service fees for such in-warranty repairs frominsurance companies. With increased assurance and reliability, parallel importers increasingly outsource theirwarranty management to independent service providers under warranty programme.

In addition to pre-owned passenger cars, authorised dealers, parallel dealers and independent serviceproviders with warranty programme offer extended warranty for vehicle owners to extend the protection foradditional years or miles. Extended warranties cost extra and are sold separately.

OVERVIEW OF PASSENGER CAR MAINTENANCE AND REPAIR MARKET IN SINGAPORE

The passenger car maintenance and repair industry in Singapore reflected a certain degree of fluctuation,but it overall remained at a stable level with a CAGR of -0.1% from 2013 to 2018. According to the passengercar age distribution in Singapore, the proportion of passenger cars aged over seven years increased fromapproximately 37.4% to 54.7% from 2013 to 2015, resulting a solid growth in maintenance and repair industryduring the same period. However, following the decline in ageing passenger car population, the market size ofpassenger car maintenance and repair industry decreased in 2016 and 2018.

Breakdown of market size of Singapore passenger car maintenance and repair industry by types ofpassenger cars

With the rising number of ageing passenger car in Singapore, the market size of passenger car maintenanceand repair industry is expected to increase at a CAGR of 2.9% from SGD268.9 million in 2018 to SGD309.7million in 2023, among which the market size of luxury and ultra-luxury passenger car segment is estimated toreach SGD122.3 million in 2023 at a CAGR of 5.0%.

INDUSTRY OVERVIEW

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Market Size of Passenger Car Maintenance and Repair Industry by Sales Value, 2013-2023E

0

100

200

300

400

500

0

300

200

100

400

500

2013

269.7

87.7

2014 2015 2016 2017 2018 2019E 2020E 2021E 2023E

SGD Million

285.0 294.2 285.3 275.1 268.9 276.5 285.9 293.7 309.7

182.0 189.5 193.4 186.8 178.0 173.2 176.7 180.4 187.4181.5

95.5 100.8 98.5 97.1 95.7 99.8 105.5 112.2 122.3

2022E

301.3

183.5

117.8

2013-2018

-1.0%

CAGR 2018-2023E

1.6%

1.8% 5.0%

-0.1%Total 2.9%

Entry & Medium-level Passenger Car

Luxury & Ultra-luxury Passenger Car



Breakdown of market size of Singapore passenger car maintenance and repair industry by type of serviceprovider

In general, cars aged less than three years with factory warranty tend to be serviced in the authoriseddealers’ workshops, while aged cars tend to be serviced in independent service workshops for better prices andmore customised services. With a large number of aged passenger cars, the market size of passenger carmaintenance and repair industry derived from independent service providers grew from SGD216.4 million in2013 to SGD232.1 million in 2015. Afterwards, the proportion of passenger cars aged less than three yearsincreased from 17.9% in 2015 to 41.6% in 2018, according to the passenger car age distribution in Singapore. Assuch, cars of younger age tend to be serviced in authorised dealers; and the market share of passenger carmaintenance and repair industry derived from authorised dealers accordingly increased at the same period.

In the forecast period, restricted by the COE quota, the growth rate of new passenger cars shall bemaintained at a low level, and the total number of registered passenger cars in Singapore is expected to bemaintained at approximately 600,000 units from 2018 to 2023. This implies the increasing number of passengercars with long service life on the road, thus leading to a stronger demand for maintenance and repair services.As such, aged passenger cars tend to be serviced in independent workshops; and the market size of passenger carmaintenance and repair industry derived from independent service provide is expected to reach SGD246.8million in 2023.

INDUSTRY OVERVIEW

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Market Size of Passenger Car Maintenance and Repair Industry by Sales Value, 2013-2023E

0

300

200

100

400

500

2013

269.7

53.3

2014 2015 2016 2017 2018 2019E 2020E 2021E 2023E

SGD Million

285.0 294.2 285.3 275.1 268.9 276.5 285.9 293.7 309.7

216.4 231.1 232.1 206.2 182.2 170.4 182.5 200.1 246.8220.3

53.9 62.1 79.1 92.9 98.5 94.0 85.8 73.4 62.9

2022E

301.3

235.0

66.3

2013-2018

13.1%

CAGR 2018-2023E

-8.6%

-4.7% 7.7%

-0.1%Total 2.9%

Authorised Dealer

Independent Service Provider

Independent Service ProviderAuthorised Dealer


Key Market Drivers

Increasing number of aged cars

Average service life period of passenger cars is growing in Singapore. Revealed by the LTA, thepercentage of passenger cars with over 10-year service life period was 17.1% in 2018, while it was only 1.7% in2013. Wear and tear of parts and components in cars are associated with the increasing mileages driven by cars,which requires timely maintenance and repair to guarantee the safety and user experience. Along with more agedcars on the road, market maintenance and repair demand for maintenance and repair service is also increasing.

Key Market Trends

More advanced technology and highly-skilled workers

Because of environmental consciousness and limited land areas, the Singapore government has enactedlaws and regulations to protect the environment, such as ‘‘Environmental Protection and Management Act’’issued in 2008 to reduce carbon dioxide emission. Thus, potential passenger car owners will be encouraged topurchase more environment-friendly cars, such as those with more fuel-efficient engines. As a result, moreadvanced maintenance and repair technologies and highly-skilled workers are required.

More personalised service with the Internet combined

With the high Internet penetration of approximately 84% in Singapore in 2018, maintenance and repairbusiness will be more closely combined with the Internet. For example, customers will have access to theservices provided online and order service packages in advance. Meanwhile, customers’ choice preferences andrequirements, such as car types, spare parts consumption patterns, will be recorded in database system, toprovide the customers with more personalised services in the whole life cycle of the cars, which can maximisethe service efficiency and utility.

INDUSTRY OVERVIEW

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Higher quality service will be provided in industry

As the maintenance and repair market in Singapore has already been mature, developing corecompetitiveness to occupy market share will be a trend in the industry. For example, service centres will buyexpensive diagnostic equipment to provide upscale service. Also, they will invest in marketing strategy to attractnew customers and hire experienced worker to provide superior customer experience.

Opportunities and threats of passenger car maintenance and repair market

Opportunities

Notwithstanding the expected slight decrease in the total number of registered passenger car from 618,055units in 2018 to 616,808 units in 2023, the market size of passenger car maintenance and repair industry isexpected to grow at a CAGR of 2.9% from S$268.9 million in 2018 to S$309.7 million in 2023. This can beattributable to the expected decrease in the total number of newly registered passenger car at a CAGR of -18.7%from 80,281 units in 2018 to 28,516 units in 2023, resulting in a gradual increase in proportion of agedpassenger car over the years. As wear and tear of parts and components in passenger cars are associated withincreasing mileages driven, the envisaged growing proportion of aged passenger car population from 2018 to2023 is expected to enlarge the market size of passenger car maintenance and repair industry by 2023.

Threats

The passenger car maintenance and repair market in Singapore is quite mature. The price of COE isexpected to increase along with decreasing COE quota after 2019, the total number of passenger cars inSingapore is expected to be faced up with difficulties to keep increasing. Also, the Singapore government isdeveloping the public transportation system, the growth potential of maintenance and repair market would berestrained by decreasing demand for passenger cars.

Price of Major Raw Material and Labour Cost

Lubricant is one of the major raw material used in the passenger car maintenance and repair industry.Historical price of imported lubricating greases decreased from 4,916 USD/ton in 2013 to 3,956 USD/ton in2018, representing a CAGR of -4.3%. From 2013 to 2017, the slump in lubricant price was closely related to thedecreasing price of crude oil, which was a result of oversupply. Afterwards, the Organization of the PetroleumExporting Countries reached a deal to cut output of crude oils and boosted the market price of crude oil andpetroleum products such as lubricating greases in 2018.

Labour force is another essential cost component. Released by the Singapore Department of Statistics,average compensation in manufacturing industry increased from SGD82,930 in 2013 to SGD110,836 in 2018,representing a CAGR of 6.0%. Such increasing compensation indicates that the Singapore economy continues toperform well.

INDUSTRY OVERVIEW

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Historical Price Trend ofImported Lubricating Greases, 2013-2018

Historical Price Trend ofAnnual Compensation Per Capita, 2013-2018

2013 2014 2015 2016 2017 2018

USD/Tons Growth Rate

2013-2018

-4.3%CAGRAverage Price

-40.0%

80.0%

60.0%

40.0%

20.0%

0.0%

-20.0%

100.0%

0

2,000

1,000

4,000

3,000

5,000

6,000

4,916 4,863

3,7743,428

2,688

3,956

2013 2014 2015 2016 20182017

SGD Growth Rate

2013-2018

6.0%CAGRAverage Price

0

40,000

20,000

80,000

120,000

100,000

60,000

82,930

97,904 103,271 106,513 110,836109,563

0.0%

10.0%

5.0%

25.0%

20.0%

15.0%

30.0%

Source: Enterprise Singapore, Frost & Sullivan Source: Singapore Department of Statistics, Frost & Sullivan

Historical Price Trend of Average Service Fee

From 2013 to 2015, the increase in average service fee was mainly due to the increase in aged passengercars as passenger cars with a longer service life which require longer servicing hours and consume more parts,resulting in a higher service fee than younger age cars. However, the percentage of passenger cars aged morethan three years sharply decreased from approximately 82.1% in 2015 to approximately 58.4% in 2018. This wasmainly attributed to the large number of passenger cars reaching the 10-year usage limitation. As repair andmaintenance service fees are much higher for aged passenger cars, the decrease in average service fee is in linewith the decrease in the age population of passenger cars in Singapore. From 2018 to 2023, the percentage ofpassenger cars aged more than three years is expected to increase from 58.4% to 85.3%. Thus, driven by theincreasing demand for maintenance and repair services due to rising average passenger car age, the averageservice fee is forecasted to reach SGD502.1 in 2023, with a CAGR of 2.9% from 2018 to 2023.

Historical Price Trend of Average Service Fee, 2013-2023E

2013

432.4

2014 2015 2016 2017 2018 2019E 2020E 2021E 2023E2022E

SGD

460.4 486.6 472.5 447.4 435.1 447.7 463.5 476.9 502.1490.0

6.5% 5.7%-2.9% -5.3% -2.7% 2.9% 3.5% 2.9% 2.5%2.7%

2013-2018

0.1%CAGRAverage Service Fee

2018-2023E

2.9%Growth Rate

-10%

10%

30%

50%

70%

90%

0

150

300

450

600


Competitive landscape of the passenger car maintenance and repair market in Singapore

The competitive landscape of passenger car after-market service in Singapore is highly fragmented, whichis mainly attributed to fierce competition within the passenger car after-market service in Singapore.

INDUSTRY OVERVIEW

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In terms of passenger car repair and maintenance market, there was a medium market concentration withthe top five companies accounting for 29.6% of the total market share by revenue in 2018. There wereapproximately 1,500 maintenance and repair service centres in Singapore by 2018. And most of them focus onentry and medium level passenger vehicle brands due to low barriers of capital and talent. Hence, thecompetition is fierce among the maintenance and repair service providers who develop business for entry andmedium-level passenger cars. On the other hand, due to higher entry barriers for luxury passenger car and ultra-luxury segment, there are fewer maintenance and repair service providers in the luxury passenger car and ultra-luxury supercar maintenance and repair service market. The top five companies accounted for approximately71.9% of total market share of luxury passenger car and ultra-luxury supercar maintenance and repair servicessegment. In addition, the market size of passenger car maintenance and repair industry in terms of revenuederived from independent service providers was SGD170.4 million in 2018 and accounted for approximately63.4% of total passenger car maintenance and repair market. Compared to authorised dealers, independentservice providers has the following competitive advantages: (i) capability to provide service to a wider range ofmakes and models of passenger cars; (ii) fairer prices for after-market services, such as inspection, maintenanceand repair services; and (iii) capability to provide a wider variety of flexible and customised service packagesfor its customers.

Our Group, being a one-stop after-market automotive service provider, owns three service centres withheadquarter located at the heart of Singapore’s automotive business area which is populated with luxury andultra-luxury passenger cars showrooms and service centres. With a strong foundation of automotive technicalknowledge and know-how, our Group covers most of the major automotive belts with an abundance of car-related business, and develops a broad and diverse loyal customer base in Singapore. Furthermore, ourestablished long-standing relationships with high-quality suppliers ensure the quality of product offerings andenable price reduction of raw materials for our Group. Therefore, our Group accounted for 5.3% and 7.9% of thetotal and luxury and ultra-luxury maintenance and repair service market share respectively in 2017 in term of thesales revenue of all service providers. Among the independent service providers, we ranked the first placeaccounting for 8.4% in maintenance and repair service market in 2018 in terms of the sales revenue of allindependent service providers.

7.6%

7.0%

5.3%

5.1%

4.6%

70.4%

28.1% 21.4%

19.7%

12.9%10.0%

7.9%

Company ACompany BOur GroupCompany CCompany DOthers

Company A

Market share of passenger car maintenance and repair service providers by sales revenue, 2018

Market share of luxury passenger car and ultra-luxury supercar maintenance and repair

service providers by sales revenue, 2018

Company BCompany DCompany COur GroupOthers


Note: In the top five ranking of passenger car maintenance and repair market, our Group and Company C are independent serviceproviders, whereas Company A, Company B and Company D are authorised dealers.

INDUSTRY OVERVIEW

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Market share of independent service providers of passenger car maintenance and repair service industryby sales revenue, 2018

In Singapore, the market of passenger car maintenance and repair in terms of independent service providersis competitive, as there are approximately 1,400 independent service centres by 2018. The market size of theindependent service providers by sales revenue was approximately SGD170.4 million with top five companiesaccounting for 30.3% market share in 2018.

The key market players, including our Group, Company C, Company F, and Company G are all Singapore-based companies, except for Company E which is an international company. All these key market players engagein automotive after-sales services, among which our Group, Company C, Company E, and Company G focus onpassenger car maintenance and repair services, while Company F offers car leasing and car rental services, etc.

8.4%

8.0%

7.0%

4.1%

2.8%

69.7%

Our GroupCompany CCompany ECompany FCompany GOthers


Entry barriers to passenger car maintenance and repair market

Capital investment barrier

Large capital investment is required to start a passenger car maintenance and repair service business.Among all initial investments, major investments include service centre construction, specialised equipmentprocurement, channel management, labour cost and advertisement expenditure. To guarantee service quality, apassenger car maintenance and repair service provider should also keep investing in diagnostic equipment andmaterials, and regular training for technicians, which is consistent investment and requires sufficient cash flow.

Channel barrier

The Competition Commission of Singapore has worked with major car dealers to remove restrictions fromexisting and new warranties, which allows owners to repair their cars at independent workshops instead of atauthorised dealers’ workshops only. Services provided by players in passenger car maintenance and repairmarket are homogeneous, so the market is quite competitive, and the service price is expected to decrease. Tohave competitive advantages, establishing good co-operation with suppliers and getting raw materials at afavourable price is a long-lasting and essential way to remain profitable.

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Brand images barrier

Generally, car owners engage an automotive service provider on continuous basis as long as it providesquality services. Thus for new entrants of the market, establishing their own brand images and attractingcustomers are important issues. To establish good brand images, new entrants need to invest on marketingactivities, such as online advertisements and offline promotions, to attract customers and expand their marketshare. However, it will take a long time to establish brand images and accumulate customers, which require notonly capital investment but also high-quality service.

OVERVIEW OF THE PASSENGER CAR RENTAL MARKET IN SINGAPORE

Definition and classification of passenger car rental service

Passenger car rental service refers to an operation mode that a company rents passenger cars for shortperiods of time, generally ranging from a few hours to several months or longer. Typically, passenger car rentalservice providers operate a number of local branches to allow users to return passenger cars at differentlocations, these branches are primarily located near airports or urban areas. It is common that customers canmake reservations for preferred cars and value-added services via online website and telephone.

Passenger car rental service could be classified into business to customer (‘‘B2C’’) rental and business tobusiness (‘‘B2B’’) rental in terms of the type of client, or it could be classified into long-term rental and short-term rental in terms of the tenancy:

• B2C car rental refers to a business mode in which passenger car rental service companies are operatedby purchasing or leasing passenger cars for the aim of renting them to their individual customers for aspecific period of time.

• B2B car rental refers to a business mode in which passenger car rental service companies are operatedby purchasing or leasing passenger cars for the aim of renting them to business customers such ascompanies, organisations for a specific period of time.

• Long-term car rental is a rental business mode that a car rental company signs a long-term rentalcontract with customers on a monthly or longer basis. In most cases, rental of 180-days or longer arecategorised as long-term car rentals; and such rentals are typically charged based on daily, weekly, ormonthly rates.

• Short-term car rental is a rental business mode that a car rental company signs a short-term rentalcontract with customers on a hourly or daily basis. Car rental contracts under 180-day limit arecategorised as short-term car rentals, and are typically charged based on hourly or daily rates.

Market size of the passenger car rental industry in Singapore

Driven by the increase in arrivals for both business and leisure travellers, as well as the demand fordomestic commuting, the passenger car rental industry witnessed a stable growth in the past few years fromSGD118.3 million in 2013 to SGD173.4 million in 2018, representing a CAGR of 7.9%.

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Going forward, as a growing number of rental cars are seen by commuters and policymakers as a viablealternative to taxi or owning a car, people will increasingly choose to use rental cars as a medium oftransportation. Moreover, due to the growing cost of car ownership in Singapore, people prefer to choose long-term car rentals instead of purchasing a passenger car and hence, the passenger car rental market is expected tocontinue to grow. In addition, tourism in Singapore is expected to remain flourishing, which will further boostthe growth in passenger car rental market. Therefore, the passenger car rental industry is expected to generate atotal revenue of SGD230.8 million in 2023, representing a CAGR of 5.9% between 2018 and 2023.

Market Size of Passenger Car Rental Industry by Sales Value, 2013-2023E

0

50

100

150

200

250

0

100

150

50

200

250

0%

60%

40%

20%

80%

100%

2013

118.3

2014 2015 2016 2017 2018 2019E 2020E 2022E 2023E

SGD Million

128.8142.0 151.3 162.2 173.4

185.5197.0

220.3 230.8

8.9% 10.2% 6.5% 7.2% 6.9% 6.7% 6.4% 5.5%

2021E

208.8

6.0% 4.8%

2013-2018

7.9%CAGRMarket Size

2018-2023E

5.9%Growth Rate


Key Growth Drivers

Development of Tourism Brings High Demand for Passenger Car Rental

Tourists are an important part of the car rental market in Singapore. Number of tourists visiting Singaporehad been increasing continuously from 0.9 million arrivals per month in 2010 to 1.5 million arrivals per monthin 2018. The growing number of tourists will certainly be an optimistic symbol for the car rental market as it isnecessary for visitors to hire a car while traveling in Singapore city. Also, unlike online taxi-hailing services,there are a lot of methods to ensure the security of car rental services such as insurance and GPS positioning.Being a convenient and safe transportation, the car rental market is promising with the development of tourismin Singapore.

Restricted Expansion of Passenger Cars

With the government’s control, purchasing and using a passenger car is expensive in Singapore. Passengercar owners should have a COE before purchasing a passenger car, which was over SGD33,000 for Category Aand over SGD35,000 for Category B in 2018 on average. The COE quota is controlled by the Singaporegovernment, which means the maximum number of passenger cars is predetermined. Thus, car rental is necessaryfor those who have a demand for using cars but fail to bid for a COE. Also, the expenses of owning a passengercar such as parking fee, insurance, etc. is large as well, thus renting a passenger car can lower such cost to alarge extent.

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Key Market Trends

Increasing demand for long-term car rental

More residents prefer to rent a car on a long-term basis instead of buying one of their own due to the highcost to own a car in Singapore. To own a passenger car, apart from COE, which is expected to have a higherprice from 2019, car owners have to pay a large amount of fees, such as insurance and parking fees, etc. Inaddition, with the limit of COE quota from the Singapore government, less residents will have access topurchasing a passenger car in the future. Thus, renting a passenger car on a longer term is an alternative choicefor them.

More convenient to rent a car with Internet combined

The development of Internet brings convenience to the passenger car rental market. With the increasingdemand for car rental, the traditional approach to go to the brick-and-mortar service centre for consulting andselecting will be outdated. The Internet provides a feasible and convenient access to meet the growing demandsfor car rental. People can select appropriate models of cars on mobile applications and pick up at the nearestservice centre. They can rent passenger cars in ways of both round-trip and one-way, and even peer-to-peer.

Opportunities and threats of the passenger car rental market

Opportunities

Tourists bring demand for passenger car rental market. Singapore is a tourism country, which attracts over18 million tourists (i.e. 1.5 million arrivals per month) in 2018. In the following years, over SGD700 millionwill be funded by tourism industry, in aspects of tourism products update, tourism database establishment, andemployee skills training. The passenger car rental market sees opportunities from the flourishing tourismindustry.

As the Singapore government is controlling the total number of cars on the road, residents are moredifficult to bid for a COE and purchase a passenger cars of their own. Thus, renting a car for a period of time isan alternative, which brings customer base for passenger car rental market.

The private car hire service market in Singapore is growing at an unprecedented rate and presents newopportunities in the after-market automotive services market. According to the LTA in Singapore, the number ofprivate hire cars increased at a CAGR of 32.3% from 16,396 units in 2013 to 66,480 units in 2018. The privatecar hire service market is distinct from the traditional car rental service market as vehicles in this market arecommonly used for private transport and ride-hailing. Companies providing car rental services are expected togrow their private car hire business to further expand their customer base.

Threats

Using a passenger car is expensive in Singapore. The user should pay for parking charges, ERP, and petrol.Although the total expense is much less than purchasing a passenger car, the price of the package offered by arental company is still quite high. With one of the most cost-efficient transport networks in the world, residentsand tourists can go out by MRT (mass rapid transit), bus and taxi.

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Competitive landscape of the passenger car rental market

Although there are approximately more than 300 car rental companies which provide passenger car rentalservice in Singapore, the competitive landscape of passenger car rental market is relatively concentrated with thetop 10 companies accounting for 30.7% of the total market share by revenue in 2018. This is mainly attributed tohigh requirements of capital and strict requirements of license. Most of the leading players in the market offerboth B2C and B2B leasing services on a short-term or long-term basis. In Singapore, the total fleet size ofpassenger cars for rental was approximately 7,500 units in 2018. Our Group owned 134 rental passenger cars andgenerated revenue of SGD2.5 million from the provision of passenger car rental services in 2018, accounting for1.4% of the market share of passenger car rental in 2018.

Market share of passenger car rental by sales revenue and ranking of passengercar rental company in terms of vehicle fleet size, 2018

8.6%

8.0%

2.2%2.1%

69.3%

2.1%1.9%1.6%1.5%1.4%1.3%

Company HCompany ICompany JCompany KCompany LCompany MCompany NCompany OOur Group

Company H

Vehicle fleet size

Company I

Company J

Company L

Company K

Company M

Company O

Company P

Company N

Our Group

1202

1002

378

320

206

186

146

143

140

134

Company POther

0 500 1000 1500


Entry barriers to passenger car rental market

Initial investment barrier

Huge initial investment is required to start a car rental business. Among all initial investments, majorinvestments include service centre and parking lot construction, fleet purchase, COE fees, insurance premium,labour cost and advertisement expenditure. For a car rental agency, fleet should be well maintained and have ahigh turnover to meet the customers’ demand and attract customers, which requires consistent investment andsufficient capital. As a result, initial investment is an important barrier for new entrants.

Certificates barrier

To operate car rental business, all insurance and regulatory requirements should be fulfilled. For example,all fleet of a car rental agency should be converted into legal rental car by the LTA with full comprehensiveinsurance coverage. Also, the Singapore government has enacted regulations such as Environmental Protectionand Management Act, the Hire-Purchase Act, Road Traffic Rules, and so forth, which regulate the rentalagencies conduct, standardise the whole rental market, and becomes a factor that new entrants must comply withat the very beginning.

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Brand images barrier

With the development of the Internet and online social network, customers tend to share travellingexperience online, and make their decisions largely based on online information. Thus the new entrants mustattempt to stand out of other rental agencies to earn ‘‘likes’’ online and establish their good brand images.

SOURCES OF INFORMATION

Our Group commissioned Frost & Sullivan, a market research consultant, to prepare the Frost & SullivanReport for use in this prospectus. Our Group has agreed to pay a fee of RMB645,000 for the Frost & SullivanReport, which will be fully paid prior to the Listing. Our Group is of the view that the payment of such fee doesnot affect the fairness of the conclusions drawn in the Frost & Sullivan Report.

Established in 1961, Frost & Sullivan provides market research on a variety of industries, includingautomotive industry. The Frost & Sullivan Report includes information on the inspection, maintenance, repair,modification, tuning and grooming market in Singapore. In preparing the Frost & Sullivan Report, Frost &Sullivan has conducted detailed primary research which involved discussion about the status of the industry withcertain leading industry participants. Frost & Sullivan has also conducted secondary research which involvedreviewing company reports, independent research reports and data based on its own research database. Frost &Sullivan has obtained the figures for the estimated total market size from historical data analysis plotted againstmacroeconomic data as well as considered the industry key drivers.

The Frost & Sullivan Report was compiled based on the following assumptions: (i) Singapore’s economy islikely to maintain steady growth in the next decade; (ii) Singapore’s social, economic, and political environmentis likely to remain stable in the next few years; and (iii) key industry drivers are likely to continue to affect themarket over the next few years. Frost & Sullivan, the Sponsor and we believe that the basic assumptions adoptedin preparing the Frost & Sullivan Report, including those used to make future projections, are factual, correctand not misleading. Frost & Sullivan has independently analysed the information, but the accuracy of theconclusions of its review largely relies on the accuracy of the information collected.

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A summary of the relevant laws and regulations in Singapore which are applicable to our Group is set outbelow.

LAWS RELATING TO THE BUSINESS OF OUR GROUP

Vehicle Modifications

Under Sections 6 and 140 of the RTA, the LTA may make rules generally as to the use of vehicles, theirconstruction and equipment and conditions under which they may be used. Rules that have been made pursuantto Sections 6 and 140 of the RTA include, among other things, the Road Traffic (Motor Vehicles, Construction& Use) Rules, the Road Traffic (Motor Vehicles, Lighting) Rules and the Road Traffic (Motor Vehicles, SeatBelts) Rules which stipulate, among other things, the requirements pertaining to length, width and height of avehicle, brakes, mirrors, smoke and noise emissions, lights, lamps and seat belts.

Pursuant to Section 5(6) of the RTA, if a vehicle is used or is sold, supplied, offered or altered incontravention of the RTA, any person who so uses the vehicle or causes or permits the vehicle to be so used orso sells, supplies, offers or alters it or causes or permits it to be so sold, supplied, offered or altered shall beguilty of an offence. Any person who is guilty of an offence under Section 5(6) of the RTA shall be liable onconviction to a fine not exceeding S$5,000 or to imprisonment for a term not exceeding three months or to bothand, in the case of a second or subsequent conviction, to a fine not exceeding S$10,000 or to imprisonment for aterm not exceeding six months or to both.

Under guidelines issued by the LTA, there are three categories of modifications: (a) modifications that areallowed without seeking the LTA’s approval, (b) modifications that require the LTA’s approval, and (c)modifications that are not allowed. Examples of each category are set out below:

Modifications that require the LTA’s approval

• engines• exhaust system• hoods or canopies• seating arrangements• sunroofs• superchargers or turbochargers• transmission

Modifications that do not require the LTA’s approval

• bumpers• car seats• fog lamps• fuel additives• fuel molecule polarisers• gear knobs• in-vehicle entertainment systems• in-vehicle information & communication systems (GPS system)• intake air filters• meters and gauges• radiators• rollover bars• roof racks

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• seat belts• side skirts• side windows and partitions (for light good vehicles)• spark plugs and spark plug cables• spoilers• sports rims (for cars only)• steering wheels• sunshades• suspension systems• tinted films• tinted glass• tyres

Modifications that are not allowed

• air horns• chassis• crash bars• (after-market) daytime running lamps (DRLs)• decorative lamps• increasing engine capacity• (after-market) high intensity discharge (HID) headlamp• motorcycle chain guards• motorcycle headlamp – disabling of automatic switch-on function• nitrous injection devices• (use of) spot lamps• tinting or masking of vehicle lamps• tow hooks

Vehicle Quota System

The LTA implements a vehicle quota system which regulates the rate of growth of the population ofvehicles on roads in Singapore. Anyone who wishes to register a new vehicle in Singapore must first obtain aCOE, by paying the prevailing COE quota premium which is determined based on, among other things, the typeof vehicle, the engine capacity of the vehicle and/or the maximum power output of the vehicle.

A COE represents a right to vehicle ownership and use of the limited road space for 10 years. At the endof the 10-year COE period, vehicle owners may choose to deregister their vehicle or to revalidate their COEs foranother five or 10-year period by paying the prevailing COE quota premium.

As at the Latest Practicable Date, COEs obtained on or after May 2017 comprise the following categories:

Category A Car with engine capacity up to 1,600cc and maximum power output up to 97 kilowatts(‘‘KW’’) (130 brake horsepower (‘‘bhp’’))

Category B Car with engine capacity above 1,600cc and above power output 97KW (130 bhp)Category C Goods vehicle and busCategory D MotorcycleCategory E Open-all vehicle except motorcycle

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Vehicular Emission Standards and Testing

The VER applies to all motor vehicles whose whole weight is transmitted to the road surface by means ofits wheels that are in contact with the ground when the motor vehicle is in motion. Under the VER, every petroldriven motor vehicle (other than a motorcycle or scooter) to be registered in Singapore on or after 1 September2017 shall conform to any of the standards for exhaust emission specified in the First Schedule of the VER forthe class of motor vehicle to which that motor vehicle belongs. Similarly, every diesel driven motor vehicle(other than a motorcycle or scooter) to be registered in Singapore on or after 1 January 2018 shall conform toany of the standards for exhaust emission specified in the Second Schedule of the VER for the class of motorvehicle to which that motor vehicle belongs. Under the VER, owners of motor vehicle fleets of three or moremotor vehicles may be required by the DGEP to, among other things, carry out regular servicing and repair ofmotor vehicles at such intervals and workshops as the DGEP may specify to ensure that every motor vehicleowned or in possession conforms to the applicable prescribed standards.

Additional Registration Fee and Financing Restrictions on Motor Vehicle

In addition to the registration fee of S$220 to register a motor vehicle in Singapore, the LTA imposes anadditional registration fee calculated based on a percentage of the open market value of the motor vehicle. Forprivate cars, company cars, rental cars and tuition cars registered with COEs obtained from the COE biddingexercise in March 2013 and onwards, the additional registration fee will be calculated as follows:

Motor vehicle open market value

Additionalregistration

fee rate

First S$20,000 100%Next S$30,000 (i.e. S$20,001 to S$50,000) 140%Above S$50,000 (i.e. S$50,001 onwards) 180%

Further, with effect from 27 May 2016, the MAS imposed, among other things, the following financingrestrictions on motor vehicle loans granted by financial institutions:

• for motor vehicles with an open market value that is less than or equal to S$20,000, the maximumloan quantum is 70% of the purchase price (Note);

• for motor vehicles with an open market value that is more than S$20,000, the maximum loan quantumis 60% of the purchase price*; and

• the maximum tenure of a motor vehicle loan is seven years.

Note: The purchase price is the price after subtracting any amount of discount, rebate, or any benefits offered by the vendor of themotor vehicle or any person.

Terms of Hire-Purchase Agreements of Motor Vehicles

Under the HPA, for all hire-purchase agreements made on or after 15 July 1994, any motor vehicle thevalue of which does not exceed $55,000, which amount shall include any GST and any import and excise dutypayable in respect of the motor vehicle, but shall exclude the cost of a COE for the motor vehicle, must containall the information prescribed in Section 3 and the Second Schedule to the HPA, including, among other things,a description of the goods, cash price of the goods, applied interest rate, effective interest rate, date of monthlypayment, amount of each instalment, number of instalments to be paid and processing fees (if any).

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Hire-Purchase (Motor Vehicles) Regulations 2013 (of the laws of Singapore) (‘‘HPR’’)

The HPR shall apply only to any hire-purchase agreement or conditional sale agreement for a motor vehiclemade on or after 6 April 2013 where:

(a) the relevant agreement was made on or after 6 April 2013; or

(b) the COE for the motor vehicle was issued on or after 6 April 2013.

Under the HPR, the minimum amount of the deposit to be paid by the buyer under a hire-purchaseagreement for a motor vehicle shall be:

(a) 30% of the purchase price of the motor vehicle if the applicable value of the motor vehicle does notexceed S$20,000; or

(b) 40% of the purchase price of the motor vehicle if the applicable value of the motor vehicle exceedsS$20,000.

Additionally, the tenure of a hire-purchase agreement for a motor vehicle shall not exceed seven years.

Automobile Insurance

The MVA is an Act to provide against third-party risks arising out of the use of motor vehicles and for thepayment of compensation in respect of death or bodily injury arising out of the use of motor vehicles and formatters incidental thereto.

Under the MVA, it is unlawful for any person to use or to cause or permit any other person to use a motorvehicle in Singapore or a motor vehicle which is registered in Singapore in any territory specified in theSchedule of the MVA unless there is in force in relation to the use of the motor vehicle by that person or thatother person, as the case may be, such a policy of insurance or such a security in respect of third-party risks thatcomplies with the requirements of the MVA.

In order to comply with the requirements of the MVA, a policy of insurance must, among other things, be apolicy which insures such person, persons or classes of persons as may be specified in the policy of insurance inrespect of any liability which may be incurred by him or them in respect of the death of or bodily injury to anyperson caused by or arising out of the use of the motor vehicle in Singapore and in any territory specified in theSchedule of the MVA (‘‘Third Party Liability’’). If judgment in respect of any Third Party Liability is obtainedagainst any person insured by the policy of insurance, the insurer shall pay the sum payable under the judgmentto any person entitled to the benefit of the judgment up to the relevant amount under the policy of insurance,together with any amount payable in respect of costs and interest on the sum by virtue of any written lawrelating to interest on judgments, to the person.

Management of Hazardous Waste

The disposal of toxic industrial waste is regulated under the Environmental Public Health (Toxic IndustrialWaste) Regulations 1988 (of the laws of Singapore). Such toxic industrial waste include, among other things,spent motor oils from petrol and diesel engines and waste lead-acid batteries.

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The generator of the toxic industrial waste is required to treat the waste in an approved in-house wastetreatment plant and dispose of the residues, if any, at the National Environmental Agency’s sanitary landfill site.Alternatively, the generator can engage a licensed toxic industrial waste collector to collect his waste fortreatment and disposal.

As at the Latest Practicable Date, our Group has engaged Ultramax Technologies Pte Ltd, a licensed toxicindustrial waste collector to manage its toxic industrial waste.

Workplace Safety and Health Measures

Pursuant to the WSHA, every employer has the duty to take, so far as is reasonably practicable, suchmeasures as are necessary to ensure the safety and health of his employees at work. These measures include:

(a) providing and maintaining for the employees a work environment which is safe, without risk tohealth, and adequate as regards to the facilities and arrangements for their welfare at work;

(b) ensuring that adequate safety measures are taken in respect of any machinery, equipment, plant,article or process used by the employees;

(c) ensuring that the employees are not exposed to hazards arising out of the arrangement, disposal,manipulation, organisation, processing, storage, transport, working or use of things in their workplaceor near their workplace and under the control of the employer;

(d) developing and implementing procedures for dealing with emergencies that may arise while thosepersons are at work; and

(e) ensuring that the employees have adequate instruction, information, training and supervision as isnecessary for that person to perform their work.

More specific duties imposed on employers relating to health are set out in the WSHR, including, amongother things, taking effective measures to protect persons at work from the harmful effects of any exposure toany biohazardous material which may constitute a risk to their health; ensuring that while work is carried on inthe workplace, the workplace is not overcrowded so as to pose safety and health risks to the persons at worktherein; ensuring that every workroom of the workplace is provided with adequate ventilation; and providing andmaintaining sufficient and suitable lighting, whether natural or artificial, in every part of the workplace in whichpersons are at work or passing.

The WSHR also imposes specific duties on employers relating to safety, including, among other things,duties in relation to hoists and lifts; lifting gears; and lifting appliances and lifting machines. In particular, suchequipment are required to, among other things, be tested and examined by an authorised examiner (‘‘AuthorisedExaminer’’) before they can be used and thereafter, at specified intervals – for hoists or lifts which are poweredwith mechanical power, at least once every six months or at such other intervals as the CWSH may determine;and for hoists or lifts which are not powered with mechanical power, lifting gears, and lifting appliances andlifting machines, at least once every year or at such other intervals as the CWSH may determine. After testingand examining such equipment, the Authorised Examiner will issue and sign a certificate of test andexamination, specifying the safe working load of the equipment. Under the WSHR, it is the duty of the occupierof a workplace in which the equipment is used to comply with the provisions of the WSHR, and to keep aregister containing such particulars as the CWSH may specify with respect to lifting gears, lifting appliances andlifting machines.

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Under the WSHA, inspectors appointed by the CWSH may, among other things, enter, inspect and examineany workplace, inspect and examine any machinery, equipment, plant, installation or article at any workplace,make such examination and inquiry as may be necessary to ascertain whether the provisions of the WSHA arecomplied with, take samples of any material or substance found in a workplace or being discharged from anyworkplace for the purpose of analysis or test, assess the levels of noise, illumination, heat or harmful orhazardous substances in any workplace and the exposure levels of persons at work therein and require anyperson to produce any article which is relevant to any investigation or inquiry under the WSHA and, ifnecessary, to take into custody any such article.

Any person who breaches his duty under the WSHA shall be guilty of an offence and shall be liable onconviction, in the case of a body corporate, to a fine not exceeding S$500,000 and, if the contraventioncontinues after the conviction, the body corporate shall be guilty of a further offence and shall be liable to a finenot exceeding S$5,000 for every day or part thereof during which the offence continues after conviction. Forrepeat offenders, where a person has on at least one previous occasion been convicted of an offence under theWSHA that causes the death of any person and is subsequently convicted of the same offence that causes thedeath of another person, the court may, in addition to any imprisonment if prescribed, punish the person, in thecase of a body corporate, with a fine not exceeding S$1.0 million and, in the case of a continuing offence, with afurther fine not exceeding S$5,000 for every day or part thereof during which the offence continues afterconviction.

Under the WSHA, the CWSH may serve a remedial order or stop-work order in respect of a workplace ifhe is satisfied that:

• the workplace is in such condition, or is so located, or any part of the machinery, equipment, plant orarticle in the workplace is so used, that any work or process carried on in the workplace cannot becarried on with due regard to the safety, health and welfare of persons at work;

• any person has contravened any duty imposed by the WSHA; or

• any person has done any act, or has refrained from doing any act which, in the opinion of the CWSH,poses or is likely to pose a risk to the safety, health and welfare of persons at work.

The remedial order shall direct the person served with the remedial order to take such measures, to thesatisfaction of the CWSH, to, among other things, remedy any danger so as to enable the work or process in theworkplace to be carried on with due regard to the safety, health and welfare of the persons at work, whilst thestop-work order shall direct the person served with the stop-work order to immediately cease to carry on anywork or process indefinitely or until such measures as are required by the CWSH have been taken, to thesatisfaction of the CWSH, to remedy any danger so as to enable the work or process in the workplace to becarried on with due regard to the safety, health and welfare of the persons at work.

The Workplace Health and Safety Council has approved codes of practice for the purpose of providingpractical guidance with respect to the requirements of the WSHA relating to safety, health and welfare at theworkplace. Pursuant to the Workplace Safety and Health (Risk Management) Regulations 2006 (of the laws ofSingapore), the employer in a workplace is supposed to, among other things, conduct a risk assessment inrelation to the safety and health risks posed to any person who may be affected by his undertaking in theworkplace, take all reasonably practicable steps to eliminate or minimise any foreseeable risk to any person whomay be affected by his undertaking in the workplace, and where it is not reasonably practicable to eliminate therisk, implement reasonably practical measures to minimise the risk and safe work procedures to control the risk,specify the roles and responsibilities of persons involved in the implementation of any measure of safe workprocedures and inform workers of the same, maintain records of such risk assessments, and measures or safework procedures implemented for a period not less than three years, and submit such records to the CWSH whenrequired by the CWSH from time to time.

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Imports and Exports

The regulation, registration and control of imports and exports and making of provisions for mattersconnected therewith is provided under the RIEA. The RIEA is administered by the Director-General of Customsappointed under Section 4(1) of the Customs Act (Chapter 70 of the laws of Singapore).

Pursuant to Section 3(2)(k) of the RIEA, the Minister of Trade and Industry of Singapore may makeregulations for the registration of importers, exporters, common carriers of goods or any person making adeclaration under the RIEA or any regulations made thereunder. In addition, Regulation 35B of the Regulation ofImports and Exports Regulations 1995 (of the laws of Singapore) states, among other things that the Director-General of Customs may register any person who is an importer, exporter, shipping agent, air cargo agent,freight forwarder or common carrier who is not a declaring entity and whom the Director-General of Customsdeems necessary or expedient to be registered.

As at the Latest Practicable Date, our Group has engaged a licenced freight forwarder to manage ourGroup’s imports and exports.

Employment Act

The EA is administered by the MOM and sets out the basic terms and conditions of employment, and therights and responsibilities of employers as well as employees covered under the EA.

Part IV of the EA sets out provisions in relation to, among other things, rest days, hours of work, overtime,annual leave and other conditions of service, and only applies to certain categories of employees covered underthe EA, namely, workmen who receive salaries not exceeding S$4,500 a month and employees (other thanworkmen) who receive salaries not exceeding S$2,500 a month. Section 38(8) of the EA provides that a Part IVEmployee is not allowed to work more than 12 hours in any one day except in specified circumstances, such aswhere the work is essential to the life of the community, or for defence or security. In addition, Section 38(5) ofthe EA limits the extent of overtime work that a Part IV Employee can perform to 72 hours a month.

Employers must seek the prior written approval of the Commissioner for Labour for exemption if theyrequire a Part IV Employee or class of Part IV Employees to work for more than 12 hours a day or performovertime work for more than 72 hours a month. The Commissioner of Labour may, after considering theoperational needs of the employer and the health and safety of the Part IV Employee or class of Part IVEmployees by order in writing exempt the Part IV Employee or class of Part IV Employees from the overtimelimits subject to such conditions as the Commissioner of Labour thinks fit. Where such exemptions have beengranted, the employer shall display the order or a copy thereof conspicuously in the place where the Part IVEmployee or class of Part IV Employees are employed.

An employer who breaches any provision of Part IV of the EA shall be guilty of an offence and shall beliable on conviction to a fine not exceeding S$5,000, and for a second or subsequent offence to a fine notexceeding S$10,000 or to imprisonment for a term not exceeding 12 months or to both.

From 1 April 2016, all employers are required to make and keep employee records containing theprescribed particulars for every employee the employer employs and every former employee of the employer,give relevant employees of the employer written records of the key employment terms of the employee not laterthan 14 days after the day that the employee starts employment with the employer and give itemised pay slipsfor all salary paid by the employer for the salary period or salary period to which the pay slip relates to relevantemployees. Failure to do so is considered a civil contravention for the purposes of the EA and may cause theemployer to be issued with an administrative penalty by the MOM. The amount of administrative penaltypayable depends on the circumstances in which the civil contravention took place.

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Any employer who (a) wilfully refuses or without lawful excuse (the proof of which shall lie on him)neglects to furnish the particulars or information required within the time allowed for furnishing the particularsand information, or to furnish the particulars and information in the form specified or prescribed, or toauthenticate the particulars and information at the place or in the manner specified or prescribed for the deliverythereof; (b) wilfully furnishes or causes to be furnished any false particulars or information in respect of anymatter specified in the notice requiring particulars or information to be furnished; or (c) refuses to answer, orwilfully gives a false answer to, any question necessary for obtaining any information or particulars required tobe furnished under the EA, shall be guilty of an offence and shall be liable on conviction to a fine not exceedingS$5,000 or to imprisonment for a term not exceeding six months or to both, and in the case of a continuingoffence to a further fine not exceeding S$500 for every day during which the offence continues, and in respectof false particulars, information and answers, the offence shall be deemed to continue until true particulars,information or answers have been furnished or given.

CPF Contributions

Employers are required to make CPF contributions at the monthly rates stated in the CPF Act. An employermust pay CPF contributions for employees who are Singapore citizens or Singapore permanent residents. CPFcontributions are due at the end of the month and an employer has a grace period of 14 days to make payment.The employer must pay both the employer’s and the employee’s share of the CPF contribution monthly.However, the employer can recover the employee’s share of the CPF contribution by deducting it from theirsalary when the CPF contribution is paid for that month.

If an employer fails to comply with the CPF Act, the employer may be liable to pay late payment interestcharged at 18% per annum (1.5% per month), starting from the first day of the following month after the CPFcontributions are due. The minimum interest payable is S$5 per month. If convicted of an offence under the CPFAct, the employer may also be liable to a fine not exceeding S$5,000 and not less than S$1,000 per offence or toimprisonment for a term not exceeding six months or to both; and if that person is a repeat offender in relationto the same offence, to a fine not exceeding S$10,000 and not less than S$2,000 per offence or to imprisonmentfor a term not exceeding 12 months or to both.

Employment of Foreign Workers

The availability and the employment cost of skilled and unskilled foreign workers are affected by thegovernment’s policies and regulations on the immigration and employment of foreign workers in Singapore. Thepolicies and regulations are set out in, among other things, the EFMA and the relevant government gazettes.

The availability of the foreign workers to the services industry is dependent on, among other things,MOM’s policies in connection with:

• the countries from which foreign workers may be sourced;

• the requirements and procedures for the issuance of work permits;

• the imposition of security bonds and levies; and

• the dependency ceilings, i.e. the maximum permitted ratio of foreign workers to the total workforcethat a company in the stipulated sector is allowed to hire.

The approved source countries or regions for workers in the services industry are Malaysia, China, HongKong, Macau, South Korea and Taiwan.

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A S$5,000 security bond in the form of a banker’s guarantee or insurance guarantee is required to beplaced for each non-Malaysian work permit holder that our Group employs in Singapore. The security bond willbe discharged when the work permit has been cancelled and the foreign worker has returned to his homecountry, and there were no breaches of the conditions of the work permit, security bond and any relevant law.

The employment of foreign workers who are work permit holders is also subject to the payment of levies.For the services sector, employers pay the requisite levy according to the quota and qualification of the foreignworkers employed. The levy rates are tiered so that those who hire close to the maximum quota will pay a higherlevy. The quota and levy rate for work permit holders for the services sector are as follows:

Quota

Basicskilled –

monthly

Basicskilled –

daily

Higherskilled –

monthly

Higherskilled –

daily

Tier 1: Up to 10% of the total workforce S$450 S$14.80 S$300 S$9.87Tier 2: Above 10% to 25% of the totalworkforce S$600 S$19.73 S$400 S$13.16

Tier 3: Above 25% to 40% of the totalworkforce S$800 S$26.31 S$600 S$19.73

For the services sector, the quota and levy rate for S pass holders are as follows:

Tier Quota %Monthlylevy rate

Dailylevy rate

Basic/Tier 1 Up to 10% of the total workforce S$330 S$10.85Tier 2 Above 10% to 15% of the total workforce S$650 S$21.37

As at the Latest Practicable Date, our Group has a total workforce of 99 employees, 43 of which areforeign employees:

• 27 work permit holders;

• 11 S pass holders; and

• 5 employment pass holders.

The employment of foreign workers in Singapore is governed by the EFMA which is administered by theMOM. In Singapore, under Section 5(1) of the EFMA, no person shall employ a foreign employee unless he hasobtained in respect of the foreign employee a valid work pass from the MOM, which allows the foreignemployee to work for him. In addition, the employment of the foreign employee must be in accordance with theconditions of the foreign employee’s work pass. Any person who fails to comply with or contravenes Section5(1) of the EFMA shall be guilty of an offence and shall:

(a) be liable on conviction to a fine of not less than S$5,000 and not more than S$30,000 or toimprisonment for a term not exceeding 12 months or to both; and

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(b) on a second or subsequent conviction:

(i) in the case of an individual, be punished with a fine of not less than S$10,000 and not morethan S$30,000 and with imprisonment for a term of not less than one month and not more than12 months; or

(ii) in any other case, be punished with a fine of not less than S$20,000 and not more thanS$60,000.

In relation to the employment of semi-skilled or unskilled foreign workers, employers must ensure thatsuch persons apply for a ‘‘work permit’’. In relation to the employment of mid-level skilled foreign workers,employers must ensure that such persons apply for an ‘‘S Pass’’. The S Pass is intended for mid-level skilledforeign workers who earn a monthly fixed salary of at least S$2,300. In relation to the employment of foreignprofessionals, managers and executives, employers must ensure that such persons apply for an ‘‘employmentpass’’. The employment pass is intended for professionals, managers and executives who earn a monthly fixedsalary of at least S$3,600.

Under the EFMR, employers of work permit holders are required, among other things, to:

• be responsible for and bear the costs of foreigner employee’s upkeep (excluding the provision offood) and maintenance in Singapore including the provision of subsidised medical treatment inSingapore (unless otherwise agreed);

• provide safe working conditions and take such measures as are necessary to ensure the safety andhealth of the foreign employee at work;

• ensure that foreign employee has acceptable accommodation consistent with any written law,directive, guideline, circular or other similar instrument issued by any competent authority; and

• purchase and maintain medical insurance with coverage of at least S$15,000 per 12-month period ofthe foreign employee’s employment for the foreign employee’s in patient care and day surgery.

The EFMR also requires employers of S Pass holders, among other things, to:

• be responsible for and subsidise the costs of the foreign employee’s medical treatment in Singapore(except as the Controller specifies in writing); and

• purchase and maintain medical insurance with coverage of at least S$15,000 per 12-month period ofthe foreign employee’s employment for the foreign employee’s in-patient care and day surgery.

An employer of foreign workers is also subject to, among other things, the provisions set out in the EA, theEFMA, the Immigration Act (Chapter 133 of the laws of Singapore) and the Immigration Regulations 1972 (ofthe laws of Singapore).

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Work Injury Compensation

The WICA, which is administered by MOM, applies to all employees (except members of the SingaporeArmed Forces, officers of the Singapore Police Force, the Singapore Civil Defence Force, the Central NarcoticsBureau and the Singapore Prisons Service, and domestic workers) who have entered into or works under acontract of service or apprenticeship with an employer, in respect of injury suffered by them arising out of andin the course of their employment and sets out, among other things, the amount of compensation that they areentitled to and the method(s) of calculating such compensation.

The WICA provides that if in any employment, personal injury by accident arising out of and in the courseof the employment is caused to an employee, the employer of the employee shall be liable to pay compensationin accordance with the provisions of the WICA. The amount of compensation shall be computed in accordancewith a fixed formula as set out in the WICA, subject to maximum and minimum limits.

Further, the WICA provides, among other things, that, where any person (referred to as the principal) in thecourse of his business or for the purpose of his trade or business contracts with any other person (referred to asthe contractor) for the execution by the contractor of the whole or any part of any work, or for the supply oflabour to carry out any work, undertaken by the principal, the principal shall be liable to pay to any employeeemployed in the execution of the work any compensation which he would have been liable to pay if thatemployee had been immediately employed by the principal.

Employers are required to maintain work injury compensation insurance for two categories of employeesengaged under contracts of service (unless exempted) – firstly, all employees doing manual work, and secondly,non-manual employees earning S$1,600 or less a month. An employer who breaches the above provisions shallbe guilty of an offence and shall be liable on conviction to a fine not exceeding S$10,000 or to imprisonment fora term not exceeding 12 months or to both.

Employers are required to buy and maintain medical insurance coverage of at least S$15,000 per year foreach work permit holder. Employers who fail to buy to maintain the required medical insurance may be fined upto S$10,000 or imprisoned for up to twelve months, or both. In addition, they may be barred from employingforeign workers in the future.

LAWS RELATING TO CONSUMER PROTECTION

Consumer Protection (Fair Trading) Act

The Consumer Protection (Fair Trading) (Amendment) Act 2012 (of the laws of Singapore), which cameinto operation on 1 September 2012, amended the CPFTA to give consumers additional rights in respect ofgoods that do not conform to contract. Related amendments were also made to the HPA and the RTA.

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Part III of the CPFTA sets out the provisions relating to additional consumer rights in respect of non-conforming goods. Part III of the CPFTA applies if the transferee deals as consumer; the goods do not conformto the applicable contract at the time of delivery; and the contract was made on or after 1 September 2012.Goods which do not conform to the applicable contract at any time within the period of six months starting afterthe date on which the goods were delivered to the transferee must be taken not to have so conformed at thatdate. Under Part III of the CPFTA:

(a) goods:

(i) in relation to a sale, has the same meaning as in the Sale of Goods Act (Chapter 393 of the lawsof Singapore); specifically, all personal chattels other than things in action and money; and inparticular includes emblements, industrial growing crops, and things attached to or forming partof the land which are agreed to be severed before sale or under the contract of sale and includesan undivided share in goods; and

(ii) in relation to any other transfer, has the same meaning as in the Supply of Goods Act (Chapter394 of the laws of Singapore); specifically, all personal chattels (including emblements,industrial growing crops, and things attached to or forming part of the land which are agreed tobe severed before the transfer or bailment concerned or under the contract concerned) other thanthings in action and money;

(b) transferee:

(i) in relation to a contract of sale of goods, means the buyer within the meaning of the Sale ofGoods Act (Chapter 393 of the laws of Singapore); specifically, a person who buys or agrees tobuy goods;

(ii) in relation to a contract for the transfer of goods, has the same meaning as in the Supply ofGoods Act (Chapter 394 of the laws of Singapore); specifically, (depending on the context) aperson to whom the property in the goods is transferred under the contract, or a person to whomthe property is to be so transferred, or a person to whom the rights under the contract of eitherof those persons have passed; and

(iii) in relation to a hire-purchase agreement, means the hirer within the meaning of the HPA;specifically, the person who takes or has taken goods from an owner under a hire-purchaseagreement or a conditional sale agreement and includes a person to whom the hirer’s rights orliabilities under the agreement have passed by assignment or by operation of law; and

(c) transferor:

(i) in relation to a contract of sale of goods, means the seller within the meaning of the Sale ofGoods Act (Chapter 393 of the laws of Singapore); specifically, a person who sells or agrees tosell goods;

(ii) in relation to a contract for the transfer of goods, has the same meaning as in the Supply ofGoods Act (Chapter 394 of the laws of Singapore); specifically, (depending on the context) aperson who transfers the property in the goods under the contract, or a person who agrees to doso, or a person to whom the duties under the contract of either of those persons have passed;and

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(iii) in relation to a hire-purchase agreement, means the owner within the meaning of the HPA;specifically, a person by whom goods are bailed to a hirer under a hire-purchase agreement or aconditional sale agreement and includes a person whom the owner’s rights or liabilities underthe agreement have passed by assignment or by operation of law.

If Part III of the CPFTA applies, the transferee has the right (a) to require the transferor to repair orreplace the goods; or (b) to rescind the contract with regard to the goods in question.

If the transferee requires the transferor to repair or replace the goods, the transferor must repair or, as thecase may be, replace the goods within a reasonable time and without causing significant inconvenience to thetransferee; and bear any necessary costs incurred in doing so (including in particular the cost of any labour,materials or postage). The transferee must not require the transferor to repair or, as the case may be, replace thegoods if that remedy is (a) impossible; (b) disproportionate in comparison to the other of those remedies; or (c)disproportionate in comparison to an appropriate reduction in the amount to be paid for the transfer underparagraph (a), or rescission.

Alternatively, the transferee may (a) require the transferor to reduce the amount to be paid for the transferof the goods in question to the transferee by an appropriate amount; or (b) rescind the contract with regard tothose goods, if the following conditions are satisfied (i) by virtue of the transferee rescinding the contract, thetransferee may require neither repair nor replacement of the goods; or (ii) the transferee has required thetransferor to repair or replace the goods, but the transferor is in breach of the requirement to do so within areasonable time and without causing significant inconvenience to the transferee. If the transferee rescinds thecontract, any reimbursement to the transferee may be reduced to take account of the use he has had of the goodssince they were delivered to him.

Personal Data Protection Act

The purpose of the PDPA is to govern the collection, use and disclosure of personal data by organisationsin a manner that recognises both the right of individuals to protect their personal data and the need oforganisations to collect, use or disclose personal data for purposes that a reasonable person would considerappropriate in the circumstances. Under the PDPA, personal data means data, whether true or not, about anindividual who can be identified from that data; or from that data and other information to which theorganisation has or is likely to have access.

Under the PDPA, an organisation shall not collect, use or disclose personal data about an individual unlessthe individual gives, or is deemed to have given, his consent under the PDPA to the collection, use or disclosure,as the case may be; or the collection, use or disclosure, as the case may be, without the consent of the individualis required or authorised under the PDPA or any other written law. An individual is deemed to consent to thecollection, use or disclosure of personal data about the individual by an organisation for a purpose if theindividual voluntarily provides the personal data to the organisation for that purpose; and it is reasonable that theindividual would voluntarily provide the data. If an individual gives, or is deemed to have given, consent to thedisclosure of personal data about the individual by one organisation to another organisation for a particularpurpose, the individual is deemed to consent to the collection, use or disclosure of the personal data for thatparticular purpose by that other organisation.

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On giving reasonable notice to the organisation, an individual may at any time withdraw any consent given,or deemed to have been given under the PDPA, in respect of the collection, use or disclosure by thatorganisation of personal data about the individual for any purpose. If an individual withdraws consent to thecollection, use or disclosure of personal data about the individual by an organisation for any purpose, theorganisation shall cease (and cause its data intermediaries and agents to cease) collecting, using or disclosing thepersonal data, as the case may be, unless such collection, use or disclosure, as the case may be, without theconsent of the individual is required or authorised under the PDPA or other written law. An organisation shallalso cease to retain its documents containing personal data, or remove the means by which the personal data canbe associated with particular individuals, as soon as it is reasonable to assume that the purpose for which thatpersonal data was collected is no longer being served by retention of the personal data; and retention is nolonger necessary for legal or business purposes.

An organisation may collect, use or disclose personal data about an individual only for purposes that areasonable person would consider appropriate in the circumstances; and that the individual has been informed ofunder Section 20 of the PDPA, if applicable. In particular, Section 20 of the PDPA provides, among otherthings, that an organisation shall inform the individual of (a) the purposes for the collection, use or disclosure ofthe personal data, as the case may be, on or before collecting the personal data; (b) any other purpose of the useor disclosure of the personal data of which the individual has not been informed under paragraph (a), before theuse or disclosure of the personal data for that purpose; and (c) on request by the individual, the business contactinformation of a person who is able to answer on behalf of the organisation the individual’s questions about thecollection, use or disclosure of the personal data.

On request of an individual, an organisation shall, as soon as reasonably possible, provide the individualwith (a) personal data about the individual that is in the possession or under the control of the organisation; and(b) information about the ways in which the personal data referred to in paragraph (a) has been or may havebeen used or disclosed by the organisation within a year before the date of the request.

An individual may also request an organisation to correct an error or omission in the personal data aboutthe individual that is in the possession or under the control of the organisation. Unless the organisation issatisfied on reasonable grounds that a correction should not be made, the organisation shall correct the personaldata as soon as practicable; and send the corrected personal data to every other organisation to which thepersonal data was disclosed by the organisation within a year before the date the correction was made, unlessthat other organisation does not need the corrected personal data for any legal or business purpose.

In addition, under the PDPA, the Info-communications Media Development Authority of Singapore whichis designated as the Personal Data Protection Commission shall cause to be kept and maintained one or moreDNCR of Singapore telephone numbers. A subscriber of a telecommunications service to which a Singaporetelephone number is allocated may apply to the Personal Data Protection Commission, in the form and mannerprescribed to add his Singapore telephone number to the relevant DNCR; or to remove his Singapore telephonenumber from the relevant DNCR. Under the PDPA, no person shall send a specified message to a Singaporetelephone number unless the person had before sending the specified message applied to the Personal DataProtection Commission to confirm whether that Singapore telephone number is listed in the relevant DNCR; andreceived confirmation from the Personal Data Protection Commission that Singapore telephone number is notlisted in the relevant DNCR. A specified message is, among other things, a message, where, having regard to:

(a) the content of the message;

(b) the presentational aspects of the message;

(c) the content that can be obtained using the numbers, URLs or contact information (if any) mentionedin the message; and

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(d) if the telephone number from which the message is made is disclosed to the recipient (whether bycalling line identity or otherwise), the content (if any) that can be obtained by calling that number,

it would be concluded that the purpose, or one of the purposes, of the message is:

(i) to offer to supply goods or services;

(ii) to advertise or promote goods or services;

(iii) to advertise or promote a supplier, or prospective supplier, of goods or services;

(iv) to offer to supply land or an interest in land;

(v) to advertise or promote land or an interest in land;

(vi) to advertise or promote a supplier, or prospective supplier, of land or an interest in land;

(vii) to offer to provide a business opportunity or an investment opportunity;

(viii) to advertise or promote a business opportunity or an investment opportunity;

(ix) to advertise or promote a provider, or prospective provider, of a business opportunity or aninvestment opportunity; or

(x) any other prescribed purpose related to obtaining or providing information.

Taxation in Singapore

The following is a discussion of certain tax matters relating to Singapore corporate tax, capital gains taxand stamp duty consequences in relation to the purchase, ownership and disposal of our Shares. The discussionis limited to a general description of certain tax consequences in Singapore with respect to ownership of ourShares, and does not purport to be a comprehensive nor exhaustive description of all of the tax considerationsthat may be relevant to a decision to purchase our Shares or apply to all categories of prospective subscribers,some of whom may be subject to special rules either in Singapore or in the tax jurisdictions where thesubscribers are resident. The laws, regulations rulings, decisions and interpretations, however, may change at anytime, and such changes may be retrospective. These laws and regulations are also subject to variousinterpretations and the relevant tax authorities or the courts could later disagree with the explanations orconclusions set out below.

You, as a prospective subscriber of our Shares, should consult your tax advisors concerning the taxconsequences of purchasing, owning and disposing our Shares. Neither our Company, our Directors nor anypersons involved in this Listing accepts responsibility for any tax effects or liabilities resulting from thesubscription, purchase, holding or disposal of our Shares.

Corporate Tax

Corporate taxpayers (whether Singapore tax resident or non-Singapore tax resident) are subject toSingapore income tax on income accruing in or derived from Singapore and on foreign income received ordeemed received in Singapore (unless specified conditions for exemption are satisfied).

A company is regarded as tax resident in Singapore for a year of assessment if the control and managementof its business during that year of assessment is exercised in Singapore.

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The prevailing Singapore corporate tax rate is 17%.

A tax exemption scheme applies for new start-up companies except a company whose principal activity isthat of investment holding and a company which undertakes property development for sale, for investment, orfor both investment and sale. Under the tax exemption scheme for new start-up companies, the following taxexemptions apply:

• (where any of the years of assessment of the first three years of assessment falls in the year ofassessment 2010 to the year of assessment 2019) on the first S$300,000 of normal chargeable income;specifically 100% of up to the first S$100,000 of a company’s normal chargeable income, and 50% ofup to the next S$200,000 of a company’s normal chargeable income is exempt from corporate tax; and

• (where any of the years of assessment of the first three years of assessment falls in or after the yearof assessment 2020) on the first S$200,000 of normal chargeable income; specifically 75% of up tothe first S$100,000 of a company’s normal chargeable income, and 50% of up to the next S$100,000of a company’s normal chargeable income is exempt from corporate tax.

The company’s remaining normal chargeable income (after the tax exemption(s)) will be subject tocorporate tax at a rate of 17%.

To qualify for the tax exemptions under the tax exemption scheme for new start-up companies, a companymust satisfy three conditions:

• it must be incorporated in Singapore;

• it must be a tax resident in Singapore for that year of assessment; and

• its total share capital is beneficially held directly by no more than 20 shareholders throughout thebasis period for that year of assessment where all the shareholders are individuals or at least oneshareholder is an individual holding at least 10% of the issued ordinary shares of the company.

All companies, including companies limited by guarantee, can claim a partial tax exemption under thepartial tax exemption scheme for companies, unless they have already claimed the tax exemptions under the taxexemption scheme for new start-up companies. Under the partial tax exemption scheme for companies, thefollowing tax exemptions apply:

• (where the year of assessment falls in or before the year of assessment 2019) on the first S$300,000of normal chargeable income; specifically 75% of up to the first S$10,000 of a company’s normalchargeable income, and 50% of up to the next S$290,000 of a company’s normal chargeable income isexempt from corporate tax; and

• (where the year of assessment falls in or after the year of assessment 2020) on the first S$200,000 ofnormal chargeable income; specifically 75% of up to the first S$10,000 of a company’s normalchargeable income, and 50% of up to the next S$190,000 of a company’s normal chargeable income isexempt from corporate tax.

The company’s remaining normal chargeable income (after the partial tax exemption(s)) will be subject tocorporate tax at a rate of 17%.

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For the year of assessment 2016 and the year of assessment 2017, there is a corporate income tax rebate at50% of the corporate tax payable, subject to a cap of S$20,000 and S$25,000, respectively, per year ofassessment.

For the year of assessment 2018, there is a corporate income tax rebate at 40% of the corporate taxpayable, subject to a cap of S$15,000.

For the year of assessment 2019, there is a corporate income tax rebate at 20% of the corporate taxpayable, subject to a cap of S$10,000.

Dividend Distributions

(i) One-Tier Corporate Taxation System

All Singapore tax resident companies are under the One-Tier System. Under the One-Tier System, the taxcollected from corporate profits is a final tax and the after-tax profits of the company resident in Singapore canbe distributed to the shareholders as tax-exempt (one-tier) dividends. Such dividends are tax-exempt in the handsof the shareholders, regardless of whether the shareholder is a company or an individual and whether or not theshareholder is a Singapore tax resident.

(ii) Withholding Taxes

Singapore currently does not impose withholding tax on dividends paid to resident or non-residentshareholders. Foreign shareholders are advised to consult their own tax advisers to take into account the tax lawsof their respective home countries or countries of residence and the applicability of any double taxationagreement which the relevant tax jurisdiction may have with Singapore.

Capital Gains Tax

There is no tax on capital gains in Singapore.

Thus, any gains derived from the disposal of our Shares will not be taxable in Singapore, if the gains are ofa capital nature. For the gain to be considered as capital in nature, the Shares must be acquired for long-terminvestment purposes and primarily to derive investment income. The Shares must not have been originallyacquired as part of the trading activities of the acquirer.

On the other hand, where the taxpayer is deemed by the IRAS to be carrying on a trade or business indealing in shares, gains from disposal of shares by such taxpayer are of an income nature (rather than capitalgains) and thus subject to Singapore income tax, if the gains are considered to be accruing in or derived fromSingapore or received or deemed received in Singapore (unless specified conditions for exemption are satisfied).

Subject to certain conditions being met, with effect from 1 June 2012 and for a period of 10 years endingon or before 31 May 2022, gains derived from the disposal of ordinary shares by companies will not besubjected to Singapore income tax, if the divesting company holds a minimum shareholding of 20% of theordinary shares in the company whose shares are being disposed for a minimum continuous period of 24 months.

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Other than the above, there are no specific laws or regulations which deal with the characterisation ofcapital gains, and hence, gains may be considered to be of an income nature and subject to tax especially if theyarise from activities which the IRAS regards as the carrying on of a trade or business in Singapore.

Foreign sellers are advised to consult their own tax advisors to take into account the applicable tax laws oftheir respective home countries or countries of residence as well as the provisions of any applicable doubletaxation agreement.

Goods and Services Tax

GST is a consumption tax in Singapore that is levied on import of goods into Singapore, as well as nearlyall supplies of goods and services in Singapore at a prevailing rate of 7%.

The sale of our Shares by a GST-registered investor belonging in Singapore to another person belonging inSingapore is an exempt supply not subject to GST. Any input GST (for example, GST on brokerage) incurred bythe GST-registered investor in connection with the making of this exempt supply is generally not recoverableand will become an additional cost to the investor unless the investor satisfies certain conditions prescribedunder the GST legislation or satisfies certain GST concessions.

Where our Shares are sold by a GST-registered investor in the course or furtherance of a business carriedon by such an investor to a person belonging outside Singapore (and who is outside Singapore at the time ofsupply), the sale is a taxable supply subject to GST at a zero rate (i.e. 0%). Any input GST (for example, GSTon brokerage) incurred by the GST-registered investor in making this zero-rated supply for the purpose of hisbusiness will, subject to the provisions of the GST legislation, be recoverable from the Comptroller of GST.

Investors should seek their own tax advice on the recoverability of GST incurred in expenses in connectionwith the purchase and sale of our Shares.

Services such as brokerage and handling services rendered by a GST-registered person to an investorbelonging in Singapore in connection with the investor’s purchase or sale of our Shares will be subject to GST atthe prevailing standard rate (currently 7%). Similar services rendered contractually to an investor belongingoutside Singapore should, subject to certain conditions, qualify for zero-rating (i.e. subject to GST at zero rate).

Stamp Duty

There is no stamp duty payable on the subscription and issuance of the shares of any of our Singapore-incorporated entities.

Where the shares of any of our Singapore-incorporated entities evidenced in certificate form are acquiredand where such entities maintain a share registry in Singapore, stamp duty is payable on the instrument oftransfer of such shares at the rate of 0.2% of the consideration for, or the net asset value or the allotment priceof, such shares, whichever is higher. The purchaser has an obligation to pay stamp duty, unless there is anagreement to the contrary. No stamp duty is payable if no instrument of transfer is executed or the instrument oftransfer is executed outside Singapore. However, stamp duty may be payable if the instrument of transfer, whichis executed outside Singapore, is subsequently received in Singapore.

The Stamp Duties Act (Chapter 312 of the laws of Singapore) was amended by the Stamp Duties(Amendment) Act 2017 (of the laws of Singapore) with effect from 11 March 2017 to, among other things,introduce the additional conveyance duty to be levied on acquisitions and disposals of equity interests inproperty-holding entities, and imposed the obligation to pay stamp duty once the agreement for the sale andpurchase of shares was executed. However, pursuant to the Stamp Duties (Agreements for Sale of Equity

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Interests) (Remission) Rules 2018 (of the laws of Singapore) which came into operation on 11 April 2018, theposition on stamp duty for the sale and purchase of shares before the enactment of the Stamp Duties(Amendment) Act 2017 (of the laws of Singapore) was reinstated. Stamp duties for agreements for the sale andpurchase of shares were remitted with effect from 11 April 2018 except where the shares to be transferred are inproperty-holding entities. Accordingly, stamp duty in respect of the sale and purchase of shares remains payableon the instrument of transfer.

Compliance with relevant laws and regulations

Our Directors confirm that, during the Track Record Period and up to the Latest Practicable Date, ourGroup has been in compliance with all applicable law and regulations in Singapore which are material to thebusiness and operations of our Group.

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GENERAL

Our history can be traced back to May 2012 when Optima Werkz was incorporated to carry out thebusiness of providing after-market automotive services in Singapore. To capture the growing demand forafter-market automotive services provided by the independent service providers arising from the pricediscrepancies of the services provided by authorised automobile dealers and independent service providers andthe increasing number of the imported passenger cars in Singapore, Mr. Ang invited Mr. Lim and Ms. FF Lim toinvest in and founded Optima Werkz. At the time of starting our business, Mr. Ang had accumulated more than15 years of experience in the industry of automotive services and was responsible for the business operations anddevelopment of Optima Werkz. Please refer to the paragraph headed ‘‘Corporate History and Development –

Establishment and shareholding changes of the members of our Group – Optima Werkz’’ in this section belowfor the details of the shareholding changes of Optima Werkz since its incorporation.

In August 2013, Optima De Auto was incorporated to provide spray painting service as part of our strategyto provide one-stop shop experience for our customers. In October 2014, Optima Carz was incorporated toundertake the business of our service centre at 551 Upper Thomson Road, Singapore 574415. In September2015, Optima Werkz International was incorporated to expand the business to supply automotive equipment.Please refer to the paragraph headed ‘‘Corporate History and Development – Establishment and shareholdingchanges of the members of our Group’’ in this section below for the details of the shareholding changes ofOptima De Auto, Optima Carz and Optima Werkz International since their respective incorporations.

Optima Werkz, Optima De Auto, Optima Carz and Optima Werkz International are the principal operatingsubsidiaries of our Group. As at the Latest Practicable Date, our Group had provided various automotive servicesincluding inspection, maintenance and repair services to customers mainly in Singapore and employedapproximately 99 employees for our business operation.

As part of the Reorganisation, Mr. Ang and Ms. FF Lim held their respective interest in our Companythrough Red Link as a group of Controlling Shareholders. Please refer to paragraph headed ‘‘Reorganisation’’below for the details of the Reorganisation.

BUSINESS HISTORY AND MILESTONES

The following illustrates our major business development milestones and achievements:

Year Key Milestones

2012 • Optima Werkz was incorporated. We established the Serangoon ServiceCentre, our first service centre at 9A Serangoon North Avenue 5, Singapore554500 with a total area of 4,000 sq. ft..

2013 • As part of our strategy to provide our customers with a one-stop shopexperience, Optima De Auto was established to provide spray paintingservices.

• We established the Kung Chong Service Centre, our second service centre(our Headquarters) at 6 Kung Chong, Alexandra Industrial Estate, Singapore159143 with a total area of approximately 10,000 sq. ft..

HISTORY, REORGANISATION AND CORPORATE STRUCTURE

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Year Key Milestones

2014 • We were appointed by an insurance company as its approved reporting centrefor inspecting the insured passenger cars after accidents and filling outdetails of the accident claims in an e-filing system of the General InsuranceAssociation of Singapore.

• We established Optima Carz and the Upper Thomson Service Centre, ourGroup’s third service centre at 551 Upper Thomson Road, Singapore 574415with an area of 5,260 sq. ft..

2015 • We established Optima Werkz International (formerly known as GrowthDynamics Pte. Ltd).

2016 • We secured two long-term rental agreements with a car sharing company byrenting 50 passenger cars to them.

2017 • We restructured our service for offering motor warranties to individual andcorporate customers by co-operating with a renowned insurance company.We were appointed by such insurance company as its approved reportingcentre and preferred workshop.

• We further secured two long-term rental agreements with a car sharingcompany by renting 51 passenger cars to them.

2018 • We first attained the ISO 9001:2015 and OHSAS 18001:2007 Certification.

2019 • We relocated our Upper Thomson Service Centre to our Tagore ServiceCentre at 452 Tagore Industrial Avenue, Singapore 787823.

CORPORATE HISTORY AND DEVELOPMENT

As at the Latest Practicable Date, Optima Werkz, Optima De Auto, Optima Carz and Optima WerkzInternational were the principal operating subsidiaries of our Group. The following table contains someinformation of our Company and its subsidiaries as at the Latest Practicable Date:

Name ofGroup member

Date ofincorporation/Date ofcommencementof business (ifdifferent)

Place ofincorporation Principal activities

Our Company 14 March 2018 Cayman Islands Investment holding

Optima International 16 March 2018 BVI Investment holding


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Name ofGroup member

Date ofincorporation/Date ofcommencementof business (ifdifferent)

Place ofincorporation Principal activities

Optima Werkz 18 May 2012 Singapore • Repair and maintenance of motorvehicles (including installation ofspare parts and accessories)

• Repair, maintenance and spraypainting of motor vehicles

• Provision of car rental services

Optima De Auto 22 August 2013 Singapore • Repair, maintenance and spraypainting of motor vehicles

Optima Carz 24 October2014

Singapore • Repair and maintenance of motorvehicles (including installation ofspare parts and accessories)

• General wholesale trade of spareparts and accessories for motorvehicles

Optima WerkzInternational

23 September2015

Singapore • Retail sale and general wholesaletrade of spare parts and accessoriesfor motor vehicles

Please refer to the paragraph headed ‘‘Corporate structure’’ in this section below for the chart showing ourshareholding and corporate structure immediately after the Reorganisation.

Establishment and shareholding changes of the members of our Group

Our Company

Our Company was incorporated in the Cayman Islands as an exempted company with limited liability on14 March 2018 with an authorised share capital of HK$380,000 divided into 38,000,000 shares of HK$0.01 each.It was incorporated for the purpose of implementing the Reorganisation.

On 14 March 2018, one nil-paid Share of HK$0.01 was allotted and issued to Sharon Pierson (an officer ofConyers Trust Company (Cayman) Limited, the registered office provider of our Company), which wastransferred to Red Link on the same date. On 14 March 2018, our Company further allotted and issued 631,329Shares, 81,170 Shares, 80,750 Shares, 64,541 Shares, 61,750 Shares, 30,459 Shares, all nil-paid, to Red Link,Mr. Chee, Mr. Chong, Ms. Ngo, Ms. Lam and Mr. Seow respectively (in the proportion of 66.46%, 8.54%,8.50%, 6.79%, 6.50% and 3.21% respectively).


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On 29 March 2018, as a result of the completion of the API Investment, 50,000 new Shares, representing5.00% of the then enlarged issued share capital of our Company, were allotted and issued, credited as fully-paid,to API at the consideration of HK$10,000,000 in cash. Please refer to the paragraph headed ‘‘Pre-IPOInvestments – API Investment’’ in this section below for the details of the API Investment.

Pursuant to the share swap agreement (‘‘Share Swap Agreement’’) dated 22 June 2018 entered into among(i) Optima International (as purchaser), (ii) our Company (as the direct holding company of OptimaInternational), (iii) Ms. FF Lim, Mr. Ang, Mr. Chee, Mr. Chong, Ms. Ngo, Ms. Lam and Mr. Seow (asvendors), (iv) Red Link (as nominee vehicle) and (v) Ms. FF Lim and Mr. Ang (as warrantors), OptimaInternational agreed to acquire the entire issued share capital in Optima Werkz. In consideration of and inexchange for such acquisition, our Company:

(i) credited as fully paid at par the 950,000 nil-paid Shares which were first issued on 14 March 2018 (asmentioned above), and

(ii) issued 5,681,970, 730,530, 726,750, 580,869, 555,750 and 274,131 new Shares to Red Link,Mr. Chee, Mr. Chong, Ms. Ngo, Ms. Lam and Mr. Seow respectively, all credited as fully paid at par.

The share swap under the Share Swap Agreement was completed on the same date of the Share SwapAgreement.

For the purpose of anti-dilution in respect of API’s shareholding in our Company resulting from the issueof Shares under the Share Swap Agreement, 450,000 fully-paid Shares were further allotted and issued to API onthe same date of the Share Swap Agreement and, immediately after the allotment and issue, API’s shareholdingin the then enlarged issued share capital of our Company remained at 5.00%.

Brief details of the shareholders of our Company immediately following completion of the Share SwapAgreement and the abovementioned allotment and issue of the Shares to API are set out below:

Shareholders

Number ofissued Shares

subscribedand held

Approximateshareholdingpercentage

(%)

Red Link 6,313,300 63.13Mr. Chee 811,700 8.12Mr. Chong 807,500 8.08Ms. Ngo 645,410 6.45Ms. Lam 617,500 6.18Mr. Seow 304,590 3.04API 500,000 5.00

Total: 10,000,000 100.00

Increase of authorised share capital

On 18 September 2019, the authorised share capital of our Company increased from HK$380,000 dividedinto 38,000,000 Shares of a par value of HK$0.01 each to HK$160,000,000 divided into 16,000,000,000 Sharesof a par value of HK$0.01 each by creation of an additional 15,962,000,000 Shares, pursuant to the writtenresolution of our Shareholders passed on 18 September 2019.


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Capitalisation Issue and Share Offer

Conditional upon the share premium account of our Company being credited with the proceeds of the ShareOffer, a sum standing to the credit of the share premium account of our Company will be capitalised and appliedto paying up in full 590,000,000 Shares to be allotted and issued to all the then existing Shareholders inproportion to their then shareholdings in our Company. The number of Shares to be issued under theCapitalisation Issue together with the number of Shares then held by all such Shareholders shall represent notmore than 75% of the entire issued share capital of our Company immediately after the completion of theCapitalisation Issue and the Share Offer (without taking into account any Shares which may be issued upon theexercise of the Offer Size Adjustment Option, and the options which may be granted under the Share OptionScheme).

Pursuant to the Share Offer, our Company will offer 250,000,000 Offer Shares, being 29.41% of the totalissued share capital of our Company (as enlarged by the Shares offered under the Share Offer and the Sharesissued under the Capitalisation Issue excluding the Shares which may be allotted and issued upon the exercise ofthe Offer Size Adjustment Option, and the options which may be granted under the Share Option Scheme) forsubscription by the public in Hong Kong and placing to professional, institutional and individual investors.

Optima International

Optima International was incorporated in the BVI on 16 March 2018. It was incorporated for the purposeof implementing the Reorganisation.

As at the date of incorporation, Optima International is authorised to issue a maximum of 50,000 shares ofUS$1.00 par value each. On 16 March 2018, 100 shares were issued and allotted as fully paid to our Company atpar.

Optima Werkz

Optima Werkz was incorporated as a limited exempt private company in Singapore on 18 May 2012 withan issued share capital of S$100,000, representing 100,000 ordinary shares of S$1.00 each. Upon OptimaWerkz’s incorporation, Optima Werkz issued and allotted 40,000, 10,000 and 50,000 ordinary shares to Mr. Ang,Mr. Lim and Ms. FF Lim respectively.

On 20 November 2012, the issued and paid-up capital of Optima Werkz increased from S$100,000 toS$550,000 and Optima Werkz further issued and allotted 40,000, 10,000 and 50,000 ordinary shares to Mr. Ang,Mr. Lim and Ms. FF Lim respectively at the aggregate consideration of S$450,000.

On 20 November 2012, Mr. Ang, Mr. Lim and Ms. FF Lim transferred 8,000, 2,000 and 10,000 ordinaryshares in Optima Werkz to Mr. Chee respectively at the aggregate consideration of S$250,000, which were inproportion to their then shareholding in Optima Werkz. The said transfer price was determined after arm’s lengthcommercial negotiations between the parties.

On 23 January 2014, the issued and paid-up capital of Optima Werkz increased from S$550,000 toS$1,050,000 and Optima Werkz issued and allotted 15,054 ordinary shares to Mr. Lee for the capital injection ofS$500,000. The said subscription price was determined with reference to the net asset value of Optima Werkz asat 31 December 2013.


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On 2 October 2017, Mr. Lim decided to pursue other business opportunities and transferred (i) his 18,000ordinary shares in Optima Werkz to Mr. Ang, Ms. FF Lim, Mr. Chee and Mr. Lee in 4,500, 4,500, 4,500 and4,500 shares respectively; and (ii) his 837 ordinary shares in Optima De Auto to Mr. Ang, Ms. FF Lim,Mr. Chee and Mr. Lee in 209, 209, 209 and 210 shares respectively at the aggregate consideration of S$250,000,which was determined with reference to the net asset value of Optima Werkz and Optima De Auto as at31 December 2016. The said consideration was fully settled on 2 October 2017.

On 18 December 2017, as part of an internal group restructuring, Optima Werkz issued and allotted 30,218,37,327, 9,677 and 7,724 ordinary shares to Mr. Ang, Ms. FF Lim, Mr. Chee and Mr. Lee respectively inconsideration of and in exchange for the then entire issued share capital in Optima De Auto and Optima WerkzInternational.

On 19 December 2017, Optima Werkz allotted and issued 34,000, 27,175, 26,000 and 12,825 shares, allcredited as fully paid, to Mr. Chong, Ms. Ngo, Ms. Lam and Mr. Seow respectively, upon exercise of theconversion rights granted by Optima Werkz to each of them under the relevant convertible loan agreements.Please see the paragraphs headed ‘‘Pre-IPO Investments – Investment by Mr. Chong’’, ‘‘Pre-IPO Investments –

Investment by Ms. Ngo’’, ‘‘Pre-IPO Investments – Investment by Ms. Lam’’ and ‘‘Pre-IPO Investments –

Investment by Mr. Seow’’ in this section below for further details.

On 30 January 2018, Mr. Lee decided to pursue other business opportunities and transferred his 27,278ordinary shares in Optima Werkz to Mr. Ang and Ms. FF Lim in 13,639 and 13,639 shares respectively for thetotal consideration of S$430,000, which was determined with reference to the net asset value of Optima Werkzas at 31 December 2017. The said consideration was fully settled on 30 January 2018.

As part of the Reorganisation, the entire issued share capital in Optima Werkz was transferred to OptimaInternational on 22 June 2018 pursuant to the Share Swap Agreement. Please see the paragraph headed‘‘Corporate history and development – Establishment and shareholding changes of the members of our Group –

Our Company’’ in this section above for the details of the Share Swap Agreement.

Optima De Auto

Optima De Auto was incorporated as a limited exempt private company in Singapore on 22 August 2013with an issued share capital of S$100 representing 100 ordinary shares of S$1.00 each. Upon Optima De Auto’sincorporation, Optima De Auto allotted and issued 36, 45, 10 and 9 ordinary shares to Mr. Ang, Ms. FF Lim.Mr. Chee and Mr. Lim respectively.

On 28 July 2016, the issued and paid-up capital of Optima De Auto increased from S$100 to S$10,000when Optima De Auto further allotted and issued 3,312, 4,140, 920, 828 and 700 ordinary shares to Mr. Ang,Ms. FF Lim, Mr. Chee, Mr. Lim and Mr. Lee respectively for the aggregate capital injection of S$9,900, whichwas fully settled on 28 July 2016.

On 2 October 2017, Mr. Lim decided to pursue other business opportunities and transferred (i) his 18,000ordinary shares in Optima Werkz to Mr. Ang, Ms. FF Lim, Mr. Chee and Mr. Lee in 4,500, 4,500, 4,500 and4,500 shares respectively; and (ii) his 837 ordinary shares in Optima De Auto to Mr. Ang, Ms. FF Lim,Mr. Chee and Mr. Lee in 209, 209, 209 and 210 shares respectively for the aggregate consideration ofS$250,000, which was determined with reference to the net asset value of Optima Werkz and Optima De Auto asat 31 December 2016.


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On 18 December 2017, as part of an internal group restructuring, the entire issued share capital of OptimaDe Auto was transferred to Optima Werkz. Please see the paragraph headed ‘‘Corporate history and development– Establishment and shareholding changes of the members of our Group – Optima Werkz’’ in this section abovefor further details of such internal group restructuring.

Optima Carz

Optima Carz was incorporated as a limited private company in Singapore on 24 October 2014 with anissued share capital of S$1,000, representing 1,000 ordinary shares of S$1.00 each. Upon Optima Carz’sincorporation, Optima Carz allotted and issued 1,000 ordinary shares to Optima Werkz.

On 19 November 2014, Optima Werkz transferred 200 ordinary shares in Optima Carz to an individualinvestor (‘‘Investor’’) for the consideration of S$200 and 250 ordinary shares in Optima Carz to Mr. Chew forthe consideration of S$250. Such considerations were determined with reference to the subscription price ofS$1.00 per share paid by Optima Werkz.

On 18 October 2016, the administrators of the estate of the deceased Investor transferred 200 ordinaryshares in Optima Carz to Optima Werkz for the consideration of S$150,000, which was determined withreference to the net asset value of Optima Carz as at 31 December 2015 and taking into account of the financialconditions of the deceased Investor’s family. The said consideration was fully settled on 7 May 2018.

On 29 December 2016, Optima Werkz transferred 200 ordinary shares in Optima Carz to Mr. Chew for theconsideration of S$37,500, which was determined with reference to the net asset value of Optima Werkz as at31 December 2015. The said consideration was fully settled on 30 December 2016.

On 28 April 2018, as part of the Reorganisation, Optima Werkz acquired all Mr. Chew’s shares in OptimaCarz for the consideration of S$300,000, which was determined with reference to the net asset value of OptimaCarz as at 31 December 2017. The said consideration was fully settled on 28 April 2018.

Optima Werkz International

Optima Werkz International was incorporated as a limited exempt private company in Singapore on23 September 2015 with an issued share capital of S$10,000, representing 10,000 ordinary shares of S$1.00each. Upon Optima Werkz International’s incorporation, Optima Werkz International allotted and issued 10,000ordinary shares to Ms. LL Lim, who held all the said shares on trust for Optima Werkz pursuant to a trust deeddated 23 September 2015.

On 18 December 2017, as part of an internal group restructuring, Ms. LL Lim (as trustee of Optima Werkz)transferred all the shares in Optima Werkz International to all the then shareholders of Optima Werkz (i.e.Ms. FF Lim, Mr. Ang, Mr. Chee and Mr. Lee) in proportion to their then shareholding in Optima Werkz; andOptima Werkz acquired the entire issued share capital of Optima Werkz International from the said shareholderson the same date. Please see the paragraph headed ‘‘Corporate history and development – Establishment andshareholding changes of the members of our Group – Optima Werkz’’ in this section above for further details ofsuch internal group restructuring.


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PRE-IPO INVESTMENTS

Investment by Mr. Chong

Optima Werkz and Mr. Chong, among others, entered into a convertible loan agreement dated 18 January2017, pursuant to which Mr. Chong agreed to grant to Optima Werkz a loan in the principal amount ofS$535,500 with the right to convert such loan into shares in Optima Werkz upon and subject to the terms of theagreement. The said loan is non-interest bearing and shall become due and payable on the date falling 48 monthsfrom the drawdown date. On 19 December 2017, upon exercise of the said conversion right, Optima Werkzallotted and issued 34,000 shares, all credited as fully paid, to Mr. Chong. The conversion price was S$15.75 pershare in Optima Werkz. For further details of the Investment by Mr. Chong, please refer to the table below underthe paragraph headed ‘‘Pre-IPO Investments – Details of the Pre-IPO Investments’’ in this section.

Since Mr. Chong will not be holding more than 10% of the total issued share capital of our Companyimmediately following the completion of the Capitalisation Issue and the Share Offer (without taking intoaccount any Shares which may be issued upon the exercise of the Offer Size Adjustment Option, and the optionswhich may be granted under the Share Option Scheme), the Shares held by him will be counted as part of thepublic float for the purpose of Rule 11.23 of the GEM Listing Rules.

Investment by Ms. Lam

Optima Werkz and Ms. Lam, among others, entered into a convertible loan agreement dated 1 February2017, pursuant to which Ms. Lam agreed to grant to Optima Werkz a loan in the principal amount of S$409,500with the right to convert such loan into shares in Optima Werkz upon and subject to the terms of the agreement.The said loan is non-interest bearing and shall become due and payable on the date falling 48 months from thedrawdown date. On 19 December 2017, upon exercise of the said conversion right, Optima Werkz allotted andissued 26,000 shares, all credited as fully paid, to Ms. Lam. The conversion price was S$15.75 per share inOptima Werkz. For further details of the Investment by Ms. Lam, please see the table below under the paragraphheaded ‘‘Pre-IPO Investments – Details of the Pre-IPO Investments’’ in this section.

Since Ms. Lam will not be holding more than 10% of the total issued share capital of our Companyimmediately following the completion of the Capitalisation Issue and the Share Offer (without taking intoaccount any Shares which may be issued upon the exercise of the Offer Size Adjustment Option, and the optionswhich may be granted under the Share Option Scheme), the Shares held by her will be counted as part of thepublic float for the purpose of Rule 11.23 of the GEM Listing Rules.

Investment by Mr. Seow

Optima Werkz and Mr. Seow, among others, entered into a convertible loan agreement dated 20 February2017, pursuant to which Mr. Seow agreed to grant to Optima Werkz a loan in the principal amount of S$202,000with the right to convert such loan into shares in Optima Werkz upon and subject to the terms of the agreement.The said loan is non-interest bearing and shall become due and payable on the date falling 48 months from thedrawdown date. On 19 December 2017, upon exercise of the said conversion right, Optima Werkz allotted andissued 12,825 shares, all credited as fully paid, to Mr. Seow. The conversion price was S$15.75 per share inOptima Werkz. For further details of the Investment by Mr. Seow, please see the table below under theparagraph headed ‘‘Pre-IPO Investments – Details of the Pre-IPO Investments’’ in this section.


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Since Mr. Seow will not be holding more than 10% of the total issued share capital of our Companyimmediately following the completion of the Capitalisation Issue and the Share Offer (without taking intoaccount any Shares which may be issued upon the exercise of the Offer Size Adjustment Option, and the optionswhich may be granted under the Share Option Scheme), the Shares held by him will be counted as part of thepublic float for the purpose of Rule 11.23 of the GEM Listing Rules.

Investment by Ms. Ngo

Optima Werkz and Ms. Ngo, among others, entered into a convertible loan agreement dated 3 March 2017,pursuant to which Ms. Ngo agreed to grant to Optima Werkz a loan in the principal amount of S$428,000 withthe right to convert such loan into shares in Optima Werkz upon and subject to the terms of the agreement. Thesaid loan is non-interest bearing and shall become due and payable on the date falling 48 months from thedrawdown date. On 19 December 2017, upon exercise of the said conversion right, Optima Werkz allotted andissued 27,175 shares, all credited as fully paid, to Ms. Ngo. The conversion price was S$15.75 per share inOptima Werkz. For further details of the Investment by Ms. Ngo, please see the table below under the paragraphheaded ‘‘Pre-IPO Investments – Details of the Pre-IPO Investments’’ in this section.

Since Ms. Ngo will not be holding more than 10% of the total issued share capital of our Companyimmediately following the completion of the Capitalisation Issue and the Share Offer (without taking intoaccount any Shares which may be issued upon the exercise of the Offer Size Adjustment Option, and the optionswhich may be granted under the Share Option Scheme), the Shares held by her will be counted as part of thepublic float for the purpose of Rule 11.23 of the GEM Listing Rules.

API Investment

Our Company, API and Mr. Ang (as warrantor) entered into the API Subscription Agreement dated23 March 2018, pursuant to which API conditionally agreed to subscribe for 50,000 Shares (representing 5.00%of the enlarged issued share capital of our Company at the time of completion of the API Investment) for a totalcash consideration of HK$10,000,000. For further details of the API Investment, please see the table belowunder ‘‘Pre-IPO Investments – Details of the Pre-IPO Investments’’ in this section.

Since API will not be holding more than 10% of the total issued share capital of our Company immediatelyfollowing the completion of the Capitalisation Issue and the Share Offer (without taking into account any Shareswhich may be issued upon the exercise of the Offer Size Adjustment Option, and the options which may begranted under the Share Option Scheme), the Shares held by API will be counted as part of the public float forthe purpose of Rule 11.23 of the GEM Listing Rules.

Details of the Pre-IPO Investments

Investment byMr. Chong

Investment byMs. Lam

Investment byMr. Seow

Investment byMs. Ngo API Investment

Date of the agreement 18 January 2017 1 February 2017 20 February 2017 3 March 2017 23 March 2018

Parties to the agreement Optima Werkz,Optima De Auto,Optima WerkzInternational, Mr.Ang, Ms. FF Limand Mr. Chong

Optima Werkz,Optima De Auto,Optima WerkzInternational, Mr.Ang, Ms. FF Limand Ms. Lam

Optima Werkz,Optima De Auto,Optima WerkzInternational, Mr.Ang, Ms. FF Limand Mr. Seow

Optima Werkz,Optima De Auto,Optima WerkzInternational, Mr.Ang, Ms. FF Limand Ms. Ngo

Our Company, API and Mr.Ang


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Number of shares allottedand issued by OptimaWerkz/Company

34,000 shares inOptima Werkz




50,000 Shares

Consideration S$535,500 S$409,500 S$202,000 S$428,000 HK$10,000,000(‘‘Subscription Price’’)

Payment date 7 December 2017 5 December 2017 5 December 2017 5 December 2017 29 March 2018

Completion date 19 December 2017 19 December 2017 19 December 2017 19 December 2017 29 March 2018

Basis of determination ofthe consideration

The considerationwas determinedbased on arm’slength negotiationand with referenceto the financialposition and netasset value ofOptima Werkz andits subsidiaries asat 31 December2016, and theinvestment riskassumed by theinvestor ininvesting in anunlisted company.




The consideration wasdetermined based on arm’slength negotiation andwith reference to the thenfinancial position and netasset value of our Groupas at 31 December 2017,and the investment riskassumed by the investor ininvesting in an unlistedcompany.

Strategic benefits The Pre-IPO Investors’ investments and commitment in our Group demonstrated their confidence in our business prospectsand growth potential. With such investments and commitment in our Group, our Directors believe that we could benefitfrom (i) the additional capital that would be provided by the Pre-IPO Investments in our Group, (ii) the diversified businessconnections of the Pre-IPO Investors and (iii) the diversified knowledge and experience of our Pre-IPO Investors in the waythat they could share with us on their insights accumulated in their respective industry sectors which assist us inunderstanding the development and status of the macro-economy in Asia.

Lock-up period The terms of the agreements did not impose any lock-up obligations over the Shares held by each of our Pre-IPO Investors.However, each of our Pre-IPO Investors has voluntarily undertaken to lock up his/her/its Shares for a period of six monthsfrom the Listing Date. For further details, please refer to the paragraphs headed ‘‘Underwriting – Undertakings –

Undertakings to the Stock Exchange – Undertakings by our Pre-IPO Investors’’ and ‘‘Underwriting – Undertakings –

Undertakings to the Public Offer Underwriters – Undertakings by our Pre-IPO Investors’’.

Shareholding of theinvestor in our Companyimmediately followingthe completion of theCapitalisation Issue andthe Share Offer

5.70% approx. 4.36% approx. 2.15% approx. 4.56% approx. 3.53%

Investment cost per Sharepaid under Pre-IPOinvestment (Note 1)

approximatelyHK$0.06





Discount/premium to OfferPrice of HK$0.23 perOffer Share (Note 2)

discount ofapproximately72.27%




premium ofapproximately44.93%


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Use of proceeds The net proceeds received by our Group from our Pre-IPO Investors were utilised for funding IPO expenses and workingcapital purposes. As at the Latest Practicable Date, approximately 88.5% of the net proceeds were utilised.

Special rights granted tothe investor

For Investment by Mr. Chong, Investment by Ms. Lam, Investment by Mr. Seow and Investment by Ms. Ngo:

No special rights are granted.

For API Investment:

Restriction on share issue

Save for the issue and allotment of new Shares under the Share Offer, any issue and allotment of further Shares shall requirethe prior written consent of API (such consent not to be unreasonably withheld or delayed) provided API shall hold anyShare for the time being.

Right of Share Buyback

In the event of either of the following circumstances, API shall be entitled to, by written notice to Mr. Ang, require Mr. Angto purchase all of the Shares beneficially owned by API for the time being at 104% of the Subscription Price in themanner as determined by API and set forth in the served written notice:

(i) our Company fails to procure the issue and delivery of the draft audited accounts of our Group in the form asstipulated under the API Subscription Agreement (‘‘Accounts’’) to API on or before 30 June 2018;

(ii) API reasonably believes that based on the financial information and figures shown in the Accounts, our Group failsto meet the minimum cash flow requirement under the GEM Listing Rules of having an adequate trading record of apositive cash flow of at least HK$30,000,000 in aggregate for FY2016 and FY2017 generated from operatingactivities in the ordinary and usual course of business before changes in working capital and taxes paid; or

(iii) the corporate reorganisation as stipulated under the API Subscription Agreement fails to take place by 30 April 2018(or such other date as agreed by API in writing).

All the special rights mentioned above shall automatically cease to have any effect on or before the Listing Date.

Notes:

(1) This is derived based on 48,450,000, 37,050,000, 18,275,400, 38,724,600 and 30,000,000 Shares to be held by each ofMr. Chong, Ms. Lam, Mr. Seow, Ms. Ngo and API respectively upon completion of the Capitalisation Issue and the ShareOffer (without taking into account any Shares which may be issued upon the exercise of the Offer Size Adjustment Option, andthe options which may be granted under the Share Option Scheme).

(2) This is derived based on the Offer Price of HK$0.23, being the mid-point of the indicative Offer Price range.


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Information regarding the Pre-IPO Investors

Mr. Chong

Mr. Chong is a private investor engaged in properties and securities investment, who was an IndependentThird Party prior to his investment in our Group. Mr. Chong has engaged in investment banking and corporateadvisory industry for over 19 years and has extensive investment experience and business network over Asia.Mr. Chong graduated with a Bachelor’s (Honours) degree in Accounting and Financial Studies from theUniversity of Exeter, United Kingdom in July 1999. He is currently the managing director of Anda CapitalSolutions Pte. Ltd., a business advisory and investment firm in Singapore and an independent non-executivedirector of each of China Yuanbang Property Holdings Limited (Singapore Stock Code: CYBP) and HealthBankHoldings Limited (formerly known as SMJ International Holdings Ltd) (Singapore Stock Code: 40B), both listedon Singapore Exchange Securities Trading Limited. Mr. Ng Chee Keen (the spouse of Ms. FF Lim, one of ourControlling Shareholders) first met Mr. Chong in a business event in February 2016 and learnt that Mr. Chongwas experienced in investing. In late-2016, when our Group started fundraising exercise, Mr. Ng Chee Keenapproached Mr. Chong and shared with him about our Group’s background and business expansion plan. Withthe knowledge and understanding from his corporate advisory and investment experience, Mr. Chong saw thegrowth potential of our Group. After having several meetings with the management of our Group, having madethe site visits to our service centres and having considered all the information provided by our Group regardingour operations and financial position, Mr. Chong was convinced that our Group had competitive advantages inproviding maintenance and repair services to the luxury passenger cars and ultra-luxury supercars and thereforedecided to invest in our Group in view of the prospects and growth potential of our Group.

Save as disclosed above and the Investment by Mr. Chong, Mr. Chong has no other past or presentrelationships, including but not limited to family, trust, business, employment relationships, or any agreements orarrangements with our Group, our Shareholders (including other Pre-IPO Investors), our Directors, theirrespective associates and any connected person of our Company (including Mr. Ng Chee Keen).

Ms. Lam

Ms. Lam is a private investor engaged in properties and securities investment, who was an IndependentThird Party prior to her investment in our Group. Ms. Lam graduated with a diploma in Banking and Financefrom The Institute of Banking and Finance Singapore in June 2003. Ms. Lam has been working as a tradefinance manager in Landesbank Baden-Württemberg, a commercial bank for over 20 years. Ms. Lam first metMr. Ang, our executive Director, when he was working in the automotive workshop of Lim Tan Motor Pte. Ltdin 2000, during which Ms. Lam received the motor repair service provided by Mr. Ang and was impressed byMr. Ang’s high service quality. They have got acquainted with each other since then and Ms. Lam has witnessedthe development and expansion of our Group over these years. When Ms. Lam heard from Mr. Ang in late-2016about our Group’s potential fundraising exercise, although she personally did not have any business experiencein our Group’s industry, she still decided to invest in our Group because of her confidence in the prospects andgrowth potential of our Group arising out of her knowledge about our Group’s dedicated management team, highservice quality and continuous growth in these years.

Save as disclosed above and the Investment by Ms. Lam, Ms. Lam has no other past or presentrelationships, including but not limited to family, trust, business, employment relationships, or any agreements orarrangements with our Group, our Shareholders (including other Pre-IPO Investors), our Directors, theirrespective associates and any connected person of our Company.


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Mr. Seow

Mr. Seow is a private investor engaged in properties and securities investment, who was an IndependentThird Party prior to his investment in our Group and has over 20 years of experience in building engineeringindustry. Mr. Seow graduated with a Bachelor’s degree in Building from National University of Singapore inJune 2006. Mr. Seow is an engineer who is currently working in KC Tech Engineering Pte Ltd and previouslyworked in Aste Elevator Pte Ltd, 68 Systems & Project Engineering Pte Ltd, Johnson Controls(S) Pte Ltd andHitachi Elevator Asia Pte. Ltd. Mr. Seow and Mr. Ng Chee Keen (the spouse of Ms. FF Lim, one of ourControlling Shareholders) have, through their common social acquaintances, known each other since 2015. Mr.Seow is personally enthusiastic about supercars. He learnt that our Group was one of the few independentautomotive service providers capable of providing a wide range of comprehensive after-market automotiveservices to supercars of different makes and models. When our Group was exploring fundraising opportunities inlate-2016, Mr. Ng Chee Keen approached Mr. Seow and further shared with him about our Group’s backgroundand business expansion plan. Given that Mr. Seow was optimistic about the industry outlook of automotiveservice providers, Mr. Seow decided to invest in our Group after evaluating the business prospects, technicalcapability and financial position of our Group based on the information provided by our Group.

Save as disclosed above and the Investment by Mr. Seow, Mr. Seow has no other past or presentrelationships, including but not limited to family, trust, business, employment relationships, or any agreements orarrangements with our Group, our Shareholders (including other Pre-IPO Investors), our Directors, theirrespective associates and any connected person of our Company (including Mr. Ng Chee Keen).

Ms. Ngo

Ms. Ngo is a private investor engaged in properties and securities investment, who was an IndependentThird Party prior to her investment in our Group. Ms. Ngo graduated with a Bachelor’s degree in Business andManagement Studies (Accounting and Finance) from the University of Bradford in November 2007. Ms. Ngowas in stock trading business with UOB Kay Hian Pte Ltd, a brokerage firm in Singapore for about 10 years.She then set up and operated a wholesale trading company in Singapore, namely Dino Globex Pte. Ltd. for about4 years until 2018. She is currently a custodian manager in CGS-CIMB Securities (Singapore) Pte Ltd. When ourGroup was conducting our fundraising in early 2017, Ms. LL Lim, our executive Director, learnt from one of ourregular customers that Ms. Ngo was looking for investment opportunities and upon Ms. LL Lim’s request, thesaid regular customer arranged Ms. LL Lim and Ms. Ngo to meet each other, during which Ms. LL Lim sharedwith Ms. Ngo about our Group’s background and business expansion plan. After having consulted with heracquaintances who were the customers of our Group on our Group’s performance, Ms. Ngo further met themanagement of our Group, made the site visits to our service centres and examined all the information providedby our Group regarding our operations and financial position. Considering that our Group was well-establishedwith strong client base and also one of the leading after-market automotive service providers in Singapore, Ms.Ngo decided to invest in our Group after assessment of our Group’s business prospects, financial position andbusiness expansion plan.

Save as disclosed above and the Investment by Ms. Ngo, Ms. Ngo has no other past or presentrelationships, including but not limited to family, trust, business, employment relationships, or any agreements orarrangements with our Group, our Shareholders (including other Pre-IPO Investors), our Directors, theirrespective associates and any connected person of our Company.


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API

API is a company incorporated in the BVI with limited liability and is solely owned by Mr. Chan, who wasan Independent Third Party prior to the API Investment. Mr. Chan is a private investor engaged in properties andsecurities investment. Mr. Chan has engaged in financial leasing industry in the PRC for 10 years and hasextensive investment experience and established business network in the PRC. Mr. Chan is the founder andcurrently the chairman of the board of the directors of Universal Financial Leasing (Shanghai) Co., Ltd., whichis principally engaged in financial leasing in the PRC. Mr. Chan obtained the degree of Master in BusinessAdministration from Harvard University in June 1998. Mr. Chan and Mr. Ang, our executive Director wereintroduced by a mutual business acquaintance in early 2018, by which Mr. Chan learnt about our Group’sbackground, business expansion plan and potential listing in Hong Kong. Mr. Chan considered that the growthpotential of the after-market automotive industry in Asia was promising due to significant increase in demand forpassenger cars, luxury passenger cars and ultra-luxury supercars therein. Therefore, after having considered allthe information provided by our Group regarding our operations, financial position and development plan,Mr. Chan decided to invest in our Group in view of the prospects and growth potential of our Group.

Save as disclosed above and the API Investment, API and its beneficial owner, Mr. Chan, have no otherpast or present relationships, including but not limited to family, trust, business, employment relationships, orany agreements or arrangements with our Group, our Shareholders (including other Pre-IPO Investors), ourDirectors, their respective associates and any connected person of our Company.

Sole Sponsor’s confirmation

Given that (i) the consideration for each of the Pre-IPO Investments was settled more than 28 clear daysbefore the date of our first submission of our listing application; and (ii) the special rights granted under the APIInvestment will cease to have any effect upon or before the Listing and no special rights have been grantedunder other Pre-IPO Investments, the Sole Sponsor is of the view that the Pre-IPO Investments are in compliancewith (a) the Guidance Letter HKEx-GL29-12 issued in January 2012 and updated in March 2017, (b) theGuidance Letter HKEx-GL43-12 issued in October 2012 and updated in July 2013 and March 2017 and (c) theGuidance Letter HKEx-GL44-12 issued in October 2012 and updated in March 2017.


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REORGANISATION

Prior to the Reorganisation which started in March 2018, the corporate structure of our Group was asfollows:

Ms. FF Lim Mr. Chee Mr. Chong Ms. Ngo Ms. Lam Mr. SeowMr. Ang

Optima Werkz(Singapore)

36.37% 30.09% 8.54% 8.50% 6.79% 6.50% 3.21%

Optima De Auto(Singapore)

Mr. Chew

45%

Optima Carz(Singapore)

Optima Werkz International(Singapore)

55%100%100%

Steps of Reorganisation

In preparation for the Listing and the Share Offer, our Group implemented the Reorganisation whichinvolved the following principal steps:

1. Mr. Ang and Ms. FF Lim acquired and activated Red Link on 27 February 2018 for holding theirrespective shares in the Company. The shareholdings of Red Link immediately following suchacquisition are shown below:

Shareholders of Red LinkNumber of

issued sharesheld

Shareholdingpercentage

(%)

Ms. FF Lim 547 54.70Mr. Ang 453 45.30

Total: 1,000 100.00

2. On 14 March 2018, our Company was incorporated in the Cayman Islands as an exempted company.Its initial authorised share capital is HK$380,000 divided into 38,000,000 Shares of HK$0.01 each.On 14 March 2018, one Share was issued to Sharon Pierson (an officer of Conyers Trust Company(Cayman) Limited, the registered office provider of our Company), which was transferred to Red Linkon the same date.


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3. On 14 March 2018, our Company further allotted and issued 949,999 Shares, all nil-paid, to RedLink, Mr. Chee, Mr. Chong, Ms. Ngo, Ms. Lam and Mr. Seow. Brief details of the shareholders ofour Company immediately following the abovementioned transfer and subscriptions are shown below:

Shareholders

Number ofissued Shares

subscribedand held


(%)

Red Link 631,330 66.46Mr. Chee 81,170 8.54Mr. Chong 80,750 8.50Ms. Ngo 64,541 6.79Ms. Lam 61,750 6.50Mr. Seow 30,459 3.21

Total: 950,000 100

4. Optima International was incorporated in the BVI on 16 March 2018. It is initially authorised to issuea maximum of 50,000 shares of a single class of par value US$1.00 each. On 16 March 2018, 100shares in Optima International were issued and allotted as fully paid to our Company at par, and theaggregate subscription price was US$100 which was equal to the aggregate value of the shares issued.

5. On 29 March 2018, pursuant to the API Subscription Agreement, our Company allotted and issued50,000 Shares to API. Please refer to the paragraph headed ‘‘Pre-IPO Investments – API Investment’’in this section above for the details of the API Subscription Agreement. The shareholdings of theshareholders of our Company immediately following completion of the API Subscription Agreementare shown below:

Shareholders

Number ofissued shares

subscribedand held


(%)

Red Link 631,330 63.13Mr. Chee 81,170 8.12Mr. Chong 80,750 8.08Ms. Ngo 64,541 6.45Ms. Lam 61,750 6.18Mr. Seow 30,459 3.04API 50,000 5.00

Total: 1,000,000 100.00

6. On 28 April 2018, Optima Werkz acquired all Mr. Chew’s shares in Optima Carz and Optima Carzbecame a direct wholly-owned subsidiary of Optima Werkz.


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7. On 22 June 2018, pursuant to the Share Swap Agreement, Optima International became the soleshareholder of Optima Werkz and our Company allotted and issued a total of 8,550,000 new Shares toRed Link, Mr. Chee, Mr. Chong, Ms. Ngo, Ms. Lam and Mr. Seow. Our Company further allotted andissued 450,000 new Shares to API on the same date. The shareholding percentage of Red Link,Mr. Chee, Mr. Chong, Ms. Ngo, Ms. Lam, Mr. Seow and API in our Company remained the sameimmediately before and immediately after the completion of the Share Swap Agreement and the saidshare allotment.

CORPORATE STRUCTURE

The following chart depicts the shareholding and corporate structure of our Group immediately after theReorganisation:

Mr. Ang

Company(Cayman Islands)

54.70% 45.30%

63.13% 8.12% 8.08% 6.45%

100%

100%

100% 100% 100%

6.18% 3.04% 5.00%

Optima International(BVI)


Optima WerkzInternational(Singapore)



Mr. Chee Mr. Chong Ms. Ngo Ms. Lam Mr. Seow APIRed Link(BVI)

Ms. FF Lim


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The following chart depicts the shareholding and corporate structure of our Group immediately after thecompletion of the Capitalisation Issue and the Share Offer (without taking into account any Shares which may beissued upon the exercise of the Offer Size Adjustment Option, and the options which may be granted under theShare Option Scheme):

54.70% 45.30%

5.73% 5.70% 4.56% 4.36% 2.15% 3.53%

Ms. FF Lim Mr. Ang

Mr. Chee Mr. Chong Ms. Ngo Ms. Lam Mr. Seow API

29.41%

Public

Company(Cayman Islands)

100%

100%

100% 100% 100%

Optima International(BVI)


Optima WerkzInternational(Singapore)



Red Link(BVI)

44.56%


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OVERVIEW

We are a one-stop after-market automotive service provider in Singapore offering comprehensive andintegrated automotive related solutions to customers. According to the Frost & Sullivan Report, we (i) rankedfirst among the independent after-market automotive service providers with a market share of approximately8.4% in terms of revenue derived from after-market automotive service provided by independent after-marketautomotive service providers in Singapore in 2018; and (ii) ranked third among the after-market automotiveservice providers with a market share of approximately 5.3% in terms of revenue derived from after-marketautomotive service in Singapore in 2018. We principally engage in the provision of a comprehensive range ofafter-market automotive services, with a focus on inspection, maintenance and repair services. We also engage in(i) offering short-term and long-term car rental services; and (ii) supplying passenger car spare parts, accessoriesand automotive equipment to customers in Singapore and overseas countries (i.e. Sri Lanka and Myanmar).

During the Track Record Period, we operated three service centres and one paint workshop in Singapore.The three service centres were our Kung Chong Service Centre (Headquarters), Serangoon Service Centre andUpper Thomson Service Centre. Our service centres are equipped with cutting-edge diagnostic equipment andfacilities for provision of comprehensive after-market automotive services except spray painting services. Ourpaint workshop is responsible for handling all the spray painting job required. In light of the expiry of thetenancy of our Upper Thomson Service Centre and the anticipated increase in market demand, we have relocatedin late August 2019 our Upper Thomson Service Centre to the Tagore Service Centre with a larger floor area toaccommodate more hoists and parking spaces. For further details of our relocation plan, please refer to theparagraph headed ‘‘Business strategies – Expanding our servicing capacity – Relocation of our Upper ThomsonService Centre’’ in this section. We provide after-market automotive services for a wide range of passenger cars,including luxury passenger cars and ultra-luxury supercars. We provided after-market automotive services toapproximately 15,600, 25,200, 22,800 and 5,100 units of passenger cars for FY2016, FY2017, FY2018 and1Q2019 respectively.

We have a large, rapidly growing and loyal customer base consisting of individual and corporatecustomers. Our customers include (i) automotive dealers; (ii) insurance companies; (iii) car service centres; (iv)car leasing companies and (v) individuals or other corporations.

Our revenue grew from approximately S$16.3 million for FY2016 to approximately S$18.6 million forFY2017, representing an increase of approximately 14.1%. Our revenue decreased slightly by approximatelyS$0.6 million (or 3.5%) from approximately S$18.6 million in FY2017 to approximately S$18.0 million inFY2018. Our revenue for 1Q2018 and 1Q2019 was approximately S$4.3 million and S$4.4 million respectively.For further details of our financial performance, please refer to the paragraph headed ‘‘Financial Information –

Description of selected components of consolidated statements of profit or loss and other comprehensiveincome’’ in this prospectus.

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The table below summarises the key revenue information by business segment for FY2016, FY2017,FY2018, 1Q2018 and 1Q2019:

FY2016 FY2017 FY20181Q2018

(unaudited) 1Q2019S$’000 % S$’000 % S$’000 % S$’000 % S$’000 %

After-market automotive services– Inspection, maintenance and

non-insured repair services 12,876 78.8 12,782 68.6 9,993 55.6 2,611 60.9 2,626 60.3– Insured repair services 995 6.1 2,110 11.3 2,750 15.3 447 10.4 476 10.9– Warranty related business 1,248 7.6 1,102 5.9 1,510 8.4 439 10.3 304 7.0

Sub-total 15,119 92.5 15,994 85.8 14,253 79.3 3,497 81.6 3,406 78.2


Supply of passenger car spare parts,accessories and automotiveequipment 598 3.7 395 2.1 1,278 7.1 140 3.3 317 7.2

Total 16,335 100.0 18,641 100.0 17,985 100.0 4,285 100.0 4,357 100.0

The table below sets forth a breakdown of our gross profit and gross profit margin by business segment forFY2016, FY2017, FY2018, 1Q2018 and 1Q2019 (Note 1):

FY2016 FY2017 FY20181Q2018

(unaudited) 1Q2019

Grossprofit

Grossprofit

marginGrossprofit

Grossprofit

marginGrossprofit

Grossprofit

marginGrossprofit

Grossprofit

marginGrossprofit

Grossprofit

marginS$’000 % S$’000 % S$’000 %


Car rental services (94) (Note 2) 842 37.4 862 35.1 251 38.7 234 36.9

Supply of passenger car spareparts, accessories andautomotive equipment 468 78.3 79 20.0 800 62.6 28 20.0 63 20.0

Total gross profit/Gross profitmargin 6,763 41.4 8,667 46.5 8,961 49.8 1,929 45.0 2,257 51.8

Notes:

1. As the workflow and nature of service provided for each business segment under the after-market automotive services aresimilar, the Group is not able to provide a further breakdown of its gross profit and gross profit margin as (a) the operationteam and workshop technicians; and (b) the machine and equipment used in providing after-market automotive services areshared among (i) inspection, maintenance and repair of non-insured repair services, (ii) insured repair services; and (iii)warranty related business.


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For more details of the reasons for the fluctuations in gross profit margin of the different businesssegments, please refer to the paragraph headed ‘‘Financial Information – Description of selected components ofconsolidated statements of profit or loss and other comprehensive income – Gross profit and gross profitmargin’’ in this prospectus.

OUR COMPETITIVE STRENGTHS

We believe that our competitive strengths put us in an advantageous position to tap into rising marketopportunities. Our main competitive strengths include:

We are a leading after-market automotive service provider in Singapore

Since the commencement of our first service centre (Serangoon Service Centre) in 2012, we haveprogressed steadily to become one of the leading after-market automotive service providers in Singapore.According to the Frost & Sullivan Report, we (i) ranked first among the independent after-market automotiveservice providers with a market share of approximately 8.4% in terms of revenue derived from after-marketautomotive service provided by independent after-market automotive service providers in Singapore in 2018; and(ii) ranked third among the after-market automotive service providers with a market share of approximately 5.3%in terms of revenue derived from after-market automotive service in Singapore in 2018. We believe we haveestablished a reputation as a reliable and responsive after-market automotive service provider with strong brandrecognition within the industry in Singapore. This is achieved through our consistent and timely delivery ofquality services to meet the stringent requirements of our customers.

As at the Latest Practicable Date, we have three service centres and a paint workshop with a combinedbuilt-in area of approximately 32,787 sq. ft., covering most of the major automotive belts with an abundance ofcar-related businesses in Singapore.

Our position as one of the leading players in the after-market automotive service industry in Singapore isfurther cemented by our collaborations with a renowned insurance company in Singapore, where we fulfilled thestringent criteria set by it in relation to our passenger car inspection, maintenance and repair services. SinceJanuary 2017, our service centres are the exclusive workshops which can provide after-market automotiveservices to the car owners under a motor warranty programme with the renowned insurance company. For furtherdetails of our co-operation with the renowned insurance company, please refer to the paragraph headed ‘‘OurBusiness – After-market automotive services – Co-operation with the renowned insurance company for warrantyrelated business’’ in this section. Our leading market position will give us a competitive advantage over newplayers in the market and we are well positioned to cement business relationships with potential customers.

We have strong technical knowledge and after-market service capabilities

We have a team of management, service advisors and technicians, who are equipped with a strongfoundation of automotive technical knowledge and know-how to allow us to offer sophisticated services andadvice to our customers. Coupled with our cutting-edge diagnostic equipment and facilities, we are able to offera wide range of comprehensive after-market automotive services to a broad class of passenger cars of differentmakes and models. Our strong after-market servicing capabilities have also enabled us to undertake after-marketservices for luxury passenger car and ultra-luxury supercar, which are of higher margin and generally requiresmore dedicated and specialised skill set.

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Our technicians are trained to handle the necessary repairs on the passenger cars after a problem has beenidentified. We arrange our management, service advisors and technicians to attend courses and seminars toupgrade their skills and keep up with developments in the industry. We conduct in-house training for them toshare technical knowledge and information to further enhance our capabilities. We believe that the continuousdevelopment of our employees provides us with a solid foundation for the continuing success of our business.

We are able to provide high quality after-market automotive services in a timely manner

We differentiate ourselves from our competitors by placing great emphasis on the provision of high qualityafter-market automotive services in a timely manner. Through our consistent and timely delivery of qualityservices, we have, over the years, built a prominent brand and achieved a leading position in the after-marketautomotive services market in Singapore.

As a testament to our established reputation as a provider of high quality after-market automotive services,we have attracted a large pool of customers who engage us to service their luxury passenger cars and ultra-luxury supercars. During the Track Record Period, at least 30% of the number of passenger car we serviced wereluxury passenger cars and ultra-luxury supercars. The owners of these kinds of passenger cars generally havehigh expectation and place more value on high quality customer service.

We believe that providing high quality customer service to each of our customers is key to buildingcustomer relationships and attracting new customers. Our ability to provide high quality after-market automotiveservices also enables us to service the luxury passenger car and ultra-luxury supercar segments. These marketsegments usually have a relatively high entry barrier due to (i) high cost of the specialised diagnostic equipmentrequired; and (ii) higher dedicated and specialised skill set required to handle these luxury passenger cars andultra-luxury supercars.

In line with this core business philosophy, we have established and adopted quality assurance and controlprocedures. To maintain the quality of the work done by our employees, we (i) provide training to ouremployees to improve their skills and professional knowledge as well as to keep them updated on newdevelopments; and (ii) assign experienced employees familiar with our business and policies to monitor the workof our new employees for a period of at least three months from their commencement of employment. Tomaintain the quality of our services, our workshop supervisors conduct quality control inspections before thehandover of the passenger car to our customers for after-market automotive services rendered and our car rentalexecutives will ensure that the rental passenger cars are in good condition before the handover of the passengercars to our customers for car rental services rendered.

Further, our management system has been certified to be in accordance with the standard required underISO 9001:2015 (Quality management systems). Our Directors believe that our effective quality managementsystems would improve our overall service quality and customer’s satisfaction.

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We have developed a broad and diverse loyal customer base and collaborated with an establishedinsurance company

We have developed a broad and diverse loyal customer base, with over 6,400, 7,200, 7,400 and 2,500customers in FY2016, FY2017, FY2018 and 1Q2019 respectively. Our customers include (i) automotive dealers;(ii) insurance companies; (iii) car service centres; (iv) car leasing companies; and (v) individuals or othercorporations. Most of our customers are repeat customers (who had contracted with us more than once during theTrack Record Period) and we maintain good business relationships with them. Revenue from repeat customersrepresents approximately 60.4%, 54.4%, 74.0% and 80.0% of our revenue in FY2016, FY2017, FY2018 and1Q2019 respectively. We believe that, by forging a close relationship with our customers, we are able tofamiliarise ourselves with our customers’ needs and preferences so that we can better manage their expectationsand offer them services best suited to their needs.

Further, we have entered into the Exclusive Service Agreement with Customer F, a renowned insurancecompany and a general insurer licensed by the Monetary Authority of Singapore. The Exclusive ServiceAgreement was effective from 1 January 2017. Our service centres are the exclusive workshops which canprovide after-market automotive services to the car owners under the motor warranty programme provided byCustomer F. All passenger cars that purchased the motor warranties sold under the motor warranty programmehave to be serviced by our service centres. For further details of our co-operation with the renowned insurancecompany, please refer to the paragraph headed ‘‘Our business – After-market automotive services – Co-operationwith the renowned insurance company for warranty related business’’ in this section.

We have strong relationships with our suppliers

We believe that our success is largely built upon the strong relationships that we have developed with oursuppliers over the years. We have developed long-standing relationships with many of our suppliers andmaintained regular contact with our suppliers who provide us with regular updates on market trends and newtechnological developments in the automotive industry which enables us to better understand customers’requirements and keep up with developments in the industry.

We have an experienced, dedicated and capable management team

We have an experienced, dedicated and capable management team, led by Mr. Ang, our founder, Chairman,executive Director and chief executive officer. Mr. Ang has over 25 years of experience in the automotive after-market service industry and has been instrumental in spearheading our growth since our incorporation. Fordetails of the qualification and experience of our Directors and senior management, please refer to the sectionheaded ‘‘Directors and Senior Management’’ in this prospectus.

Over the years, our management team and executive officers have built close relationships with our keyprincipal suppliers and customers, accumulated in-depth knowledge of the industry and have stayed abreast ofindustry development and market trends. The in-depth industry knowledge and extensive operational andmanagement experience of our management team have helped us seize new market opportunities, formulatesound business strategies and foster a strong customer service oriented culture within our Group.

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BUSINESS STRATEGIES

Our Directors believe that our competitive strengths should form the pillars for our business strategies, asthis will provide our Group with competitive advantage to sustain our business growth within the after-marketautomotive services industry in Singapore. To further strengthen our leading position as a one-stop after-marketautomotive service provider in Singapore, we have adopted and will continue to adopt the following businessstrategies:

Expanding our servicing capacity

According to the Frost & Sullivan Report, as announced by the Competition Commission of Singapore inDecember 2017, major automotive dealers have agreed to remove restriction on warranties that require customersto service or repair their vehicles exclusively at the respective authorised dealers’ workshops. As confirmed byour Singapore legal advisers, under such restriction, passenger car owners who bring their vehicles for servicingor repair at independent workshops may have their motor warranties voided by the authorised dealers regardlessof whether such service or repair is covered by the motor warranties. Such restrictions had deterred passengercar owners from using independent workshops and thus undermined our ability to compete effectively withauthorised dealer’s workshops. However, with the removal of such restriction, our Directors are of the view, andFrost & Sullivan concurs, that passenger car owners will seek for reputable and high quality independentworkshops, like us, to replace the relatively more expensive authorised dealers’ workshops. According to theFrost & Sullivan Report, motor warranties usually provide coverage only for selected vehicle parts andbreakdowns due to manufacturing defects and does not cover damages caused by accidents. As a result, whilepassenger car owners will usually return to the authorised dealers’ workshops for servicing during the warrantyperiod, with the removal of the said restriction, they may now send their vehicles to independent workshops forrepair if the relevant parts are not covered under warranty or if the damage sustained is caused by an accidentwithout the risk of the warranty being voided by the authorised dealers’ workshop. According to the Frost &Sullivan Report, each maintenance or repair in authorised dealers’ workshops generally cost 30% to 50% higherthan independent workshops. The Competition Commission of Singapore also noted that in some occasions,authorised dealers’ workshop can charge two to three times as much as an independent workshop does forcomparable parts and servicing. Our Directors are therefore of the view, and Frost & Sullivan concurs, thatbecause of our leading position in Singapore, our Group will benefit from such industry development. Accordingto the Frost & Sullivan Report, we (i) ranked first among the independent after-market automotive serviceproviders with a market share of approximately 8.4% in terms of revenue derived from after-market automotiveservice provided by independent after-market automotive service providers in Singapore in 2018; and (ii) rankedthird among the after-market automotive service providers with a market share of approximately 5.3% in termsof revenue derived from after-market automotive service in Singapore in 2018.

Moreover, according to the Frost & Sullivan Report, notwithstanding the expected slight decrease in thetotal number of registered passenger car from 618,055 units in 2018 to 616,808 units in 2023, the market size ofpassenger car maintenance and repair industry is expected to grow at a CAGR of 2.9% from S$268.9 million in2018 to S$309.7 million in 2023. This can be attributable to the expected decrease in the total number of newlyregistered passenger car at a CAGR of -18.7% from 80,281 units in 2018 to 28,516 units in 2023, resulting in agradual increase in proportion of aged passenger car over the years. As wear and tear of parts and components inpassenger cars are associated with increasing mileages driven, the envisaged growing proportion of agedpassenger car population from 2018 to 2023 is expected to enlarge the market size of passenger car maintenanceand repair industry by 2023.

BUSINESS

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Further, according to the Frost & Sullivan Report, the total number of registered luxury and ultra-luxurypassenger cars is expected to increase at a CAGR of 4.3% from 2018 to 2023. Given that the barrier of entry forservicing these luxury and ultra-luxury passenger car is high and that our Group has proven track records, ourDirectors believe we will benefit from this trend. Given the fragmented nature of the Singapore passenger carmaintenance and repair industry with the leading player only accounting for approximately 7.6% of market sharein the industry in terms of the sales revenue of all aftermarket automotive service providers in 2018, we will stillbe able to expand our market share to support our expansion plan through our established market reputation, theincrease of our servicing capacity, and service quality.

In operation, we have encountered situations whereby our potential customers did not engage us forservices when we informed our potential customers that a longer period will be required due to capacityconstraint. To prevent the loss of potential customers and in order to capture the emerging business opportunitiesand enhance our customers’ experience, we plan to continue to implement our business strategy of geographiccustomisation in order to expand our service capacity. As at the Latest Practicable Date, our business activitieswere carried out at our three service centres and one paint workshop located in the central part of Singapore. Weintend to continuously provide greater convenience and value to our customers by expanding our geographicalcoverage in the following ways:

(i) Setting up a new service centre

Our Directors consider that our servicing capacity is mainly limited by the number of hoists we haveinstalled in our service centre and the area of our service centre. As at the Latest Practicable Date, weoperated three service centres and one paint workshop in Singapore with a combined built-in-area ofapproximately 32,787 sq. ft. and a total of 39 hoists. In order to optimise the utilisation of our servicingcapacity, our Group would reallocate the actual servicing location based on the availability of hoists and/orthe relevant equipment among our service centres. However, to avoid causing inconvenience to customers,the service centre that collects the vehicle would continue to serve as a contact point where we hand overthe vehicle and issue the invoices to customers. Set out below are the utilisation rate of our total availablehoist hours as calculated by our Directors:

FY2016 FY2017 FY2018 1Q20181Q2019(Note 1)

As at31 July 2019

(Note 1)

Total available hoist hours (Note 2) 86,580 86,580 86,580 21,645 19,980 44,955Utilisation rate (Note 3) 48.2% 80.0% 81.3% 83.3% 75.3% 86.0%

Notes:

1. Between 11 February 2019 and 16 March 2019, in anticipation of the growing number of vehicles required for servicingfrom our fleet servicing agreements, our service centres underwent an internal rearrangement of the hoists and parkingspaces to provide more parking spaces for our customers. During this period, each of the three service centres wasclosed for a week for the rearrangement and as such, the total available hoist hours for 1Q2019 and the seven monthsended 31 July 2019 was reduced by a total of 1,665 hours.

2. The total available hoist hours for FY2016, FY2017, FY2018 and 1Q2019 is calculated based on the number of hoistswe have multiplied by the maximum number of working hours in that respective year.

BUSINESS

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3. The utilisation rate for the respective period is calculated according to the following formula:

(Number of hours used for insuredrepair services)

+(Number of hours used for other after-market

automotive services)

Total available hoist hours

As only one passenger car can be serviced by one hoist at the same time, our Directors believe theabove utilisation rate is calculated based on reasonable ground in order to demonstrate our operationalefficiency during the Track Record Period. The increase in the utilisation rate between FY2016 andFY2018 was due to the increase in number of passenger cars we provided after-market automotive services,which was attributed to (i) the increase in the number of insured repair jobs from 89 in FY2016 to 209 inFY2017 and 450 in FY2018 after we have set-up our motor accident concierge desk service since April2016. The insured repair jobs normally require much longer time to complete than other after-marketautomotive services as they are more complex and time-consuming and usually involve the dismantle ofdamaged parts, welding, replacement of parts, panel beating and spray painting; and (ii) our expandedcustomer base through our co-operation with Customer F, a renowned insurance company on the exclusivemotor warranty programme in January 2017. Our utilisation rate decreased slightly from 83.3% in 1Q2018to 75.3% in 1Q2019 as a result of the decrease in the number of passenger cars that we providedinspection, maintenance and non-insured repair services. Despite the slight decrease in utilisation rate, ourtotal revenue remained relatively stable at approximately S$4.3 million and S$4.4 million for 1Q2018 and1Q2019. For the length of time we required to complete each type of our aftermarket automotive services,please refer to the paragraph headed ‘‘Our business – After-market automotive services – Inspection,maintenance and repair services’’ in this section.

In anticipation of the increase in demand for our after-market automotive service, we intend toincrease our servicing capacity by setting up a new service centre. Before we choose a location, we willconsider various factors including, among others, accessibility, rental costs and degree of competitionwithin the vicinity. We will examine the performance of existing competitors in the vicinity and conductfurther assessment on our investment breakeven point at a later stage closer to the execution of ourexpansion plan in order to collect more timely data. For further details, please refer to the paragraphheaded ‘‘Business strategies – Site selection process’’ in this section.

As at the Latest Practicable Date, we have identified one potential target premise in the eastern partof Singapore (based on the criteria set out in the paragraph headed ‘‘Business strategies – Site selectionprocess’’ in this section) to set up our new service centre and have entered into a non-binding memorandumof understanding dated 25 January 2019 and a supplemental agreement dated 22 July 2019 with anIndependent Third Party for an exclusivity period of 12 months from the date of the said memorandum ofunderstanding to negotiate and conduct feasibility studies in relation to the conversion of such targetpremise into our new service centre with a target floor area of approximately 6,000 sq. ft., where we expectto install at least eight hoists.

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Based on our experience in setting up our service centres, the typical lead time from the delivery ofthe premises to the actual opening of a service centre will be approximately six months. We currently planto begin setting up the new service centre in late 2019. For further details, please refer to the paragraphheaded ‘‘Future Plans and Use of Proceeds – Implementation plans’’ in this prospectus. Our Directorsestimate that the investment cost for the new service centre would be approximately HK$10.0 million. Weestimate that approximately 10.0% of the investment costs would be used for paying the rental deposits,approximately 30.0% would be used for the costs of renovation and acquiring furniture and fixtures for theservice centre, approximately 24.5% would be used for acquiring equipment which includes the cost of upto eight hoists and diagnostic equipment for various make and model of passenger cars, approximately34.9% would be used as working capital to finance the operation of the new service centre (such aspayment of rental expenses for the first six months from commencement of business), and approximately0.6% of the investment costs for legal fees. As such, we have allocated HK$10.0 million for suchinvestment, which will be funded by the net proceeds from the Share Offer. For further details, please referto the paragraph headed ‘‘Future Plans and Use of Proceeds – Implementation plans’’ in this prospectus.

The breakeven operating period for our planned service centre will be around one year and theinvestment payback period is expected to be around 3.5 years which is estimated based on (i) ourexperience in operating our service centres; (ii) the expected revenue generated from the new servicecentre; and (iii) the historical return on equity of our Group. The breakeven operating period is the periodafter which the monthly revenue of the service centre is at least equal to its monthly expenses. Theinvestment payback period is the time it takes for the accumulated earnings before interest, tax,depreciation and amortisation from the service centre to cover the investment costs of the service centre.

The breakeven utilisation rate of the new service centre will be approximately 62.5% which isestimated based on (i) the total available hoist hours provided by the new service centre; (ii) the expectedrevenue required to cover our fixed cost for the new service centre; (iii) the average service fee per vehicleas set out in the Frost & Sullivan Report; and (iv) our estimated time required to provide aftermarketautomotive services.

(ii) Setting up a new satellite workshop

We intend to establish a new satellite workshop in other parts of Singapore so that our customers cansend their vehicles to a satellite workshop which will be in close proximity to their home. We believe thatthe geographic convenience arising from the satellite workshop will help increase our customer loyalty andsecure new customers. The satellite workshop would be smaller in scale than our existing and plannedservice centres, with the capacity of handling simple inspection, maintenance and repair jobs. Complicatedjobs will be sent back to our service centres after the customers drop off their passenger cars at the satelliteworkshop.

As our service centres are mainly located in the central part of Singapore, we target to search forpotential premises in the eastern or western parts of Singapore such as Changi, Tampines, Jurong orClementi to set up our satellite workshop. Before we choose a location, we will consider various factorsincluding, among others, accessibility, rental costs and degree of competition within the vicinity. OurGroup will conduct further assessment on investment breakeven point at a later stage closer to theexecution of our expansion plan in order to collect more timely data. For further details, please refer to theparagraph headed ‘‘Business strategies – Site selection process’’ in this section. We currently plan to set upour new satellite workshop with a target floor area of approximately 2,500 sq. ft. in the first half of 2020where we target to install at least two hoists to satisfy the expected demand for our services.

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Based on our experience in setting up our service centres, the typical lead time from the delivery ofthe premises to the actual opening of a satellite workshop will be approximately six months. For furtherdetails, please refer to the paragraph headed ‘‘Future Plans and Use of Proceeds – Implementation plans’’in this prospectus. Based on our past experience, our Directors estimate that the investment cost for thesatellite workshop would be approximately HK$3.5 million. We estimate that approximately 10.0% of theinvestment costs would be used for paying the rental deposits, approximately 28.6% would be used for thecosts of renovation and acquiring furniture and fixtures for the satellite workshop, approximately 25.7%would be used for acquiring equipment which includes the cost of up to two hoists and diagnosticequipment for various make and model of passenger cars, approximately 34.0% would be used as workingcapital to finance the operation of the new satellite workshop (such as payment of rental expenses for thefirst six months from commencement of business), and approximately 1.7% of the investment costs for thelegal fee. We intend to allocate HK$3.5 million for setting up our new satellite workshop, which will befunded by the net proceeds from the Share Offer. For further details, please refer to the paragraph headed‘‘Future Plans and Use of Proceeds – Implementation plans’’ in this prospectus.

The breakeven operating period for the new satellite workshop is estimated to be around one year andthe investment payback period is estimated to be around 3.5 years which is estimated based on (i) ourexperience in operating our service centres; (ii) the expected revenue generated from the new satelliteworkshop; and (iii) the historical return on equity of our Group. The breakeven operating period is theperiod after which the monthly revenue of the satellite workshop is at least equal to its monthly expenses.The investment payback period is the time it takes for the accumulated earnings before interest, tax,depreciation and amortisation from the satellite workshop to cover the investment costs of the satelliteworkshop.

The breakeven utilisation rate of the satellite workshop will be approximately 57.8% which isestimated based on (i) the total available hoist hours provided by the satellite workshop; (ii) the expectedrevenue required to cover our fixed cost for the satellite workshop; (iii) the average service fee per vehicleas set out in the Frost & Sullivan Report; and (iv) our estimated time required to provide aftermarketautomotive services.

Once the new service centre and satellite workshop commence operation, our Directors expect we willincur annually additional (i) depreciation of lease liabilities of leased properties of S$0.9 million; (ii) employeebenefit expenses of S$0.7 million; (iii) depreciation of plant, property and equipment of S$0.3 million; and (iv)other operating expenses of S$0.1 million.

Site selection process

Our Directors consider that identifying a suitable location for our business is crucial in determining thelong-term success of our Group. Our service centres are currently located at the major automotive belts with anabundance of car-related business in Singapore. We consider including but not limited to the following factorsbefore we choose the location for opening our new service centre and/or satellite workshop:

• accessibility of the potential sites: whether the potential sites are easily accessible by pedestrians andvehicles;

• size: whether the proposed location can meet our target size requirement;

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• rental and other costs of operation: whether we can operate profitably based on the rental and othercosts of operation, and whether the rental costs fall within our acceptable proportion of total costs;

• visibility: whether the proposed location can bring visibility to our brand;

• competition: whether we are able to outperform the existing competitors in the vicinity; and

• breakeven and payback periods: the time it may take for us to achieve breakeven and paybackperiods.

In deciding on whether a location is suitable, we will also prepare a feasibility report internally which willcover matters such as budgeting, staff costs and pricing structure.

We typically follow the procedures as set out below for the establishment of a new service centre or asatellite workshop:

1. site selection: our Directors and senior management will decide a suitable site for our new servicecentre or satellite workshop;

2. rental agreement negotiation and execution: once our Directors approve the location, we willcommence negotiation on the terms of the rental agreement with the landlord. We will take intoaccount of factors such as comparable rents of sites of similar size in the vicinity and potentialincrease in the rental upon the expiry of the rental agreement when negotiating with the landlord. Wewill execute the rental agreement with the landlord if we are satisfied with the proposed terms of therental agreement after negotiation;

3. renovation: upon signing of the rental agreement, we will commence the interior designing of the newservice centre or satellite workshop. We will engage independent contractors to carry out therenovation work for us;

4. purchase of equipment and hoists: we will commence the purchase of equipment and hoists necessaryfor the provision of our after-market automotive services;

5. licensing and permits: when the renovation work is in progress, we concurrently apply for variouslicences and permits necessary for our operation. For details of the licensing requirements, pleaserefer to the section headed ‘‘Regulatory Overview’’ in this prospectus; and

6. sourcing staff: we will confirm the number of staff members that our new service centre or satelliteworkshop requires. We will first explore the possibility of internal transfers and promotions. Then wewill recruit new employees and provide training for them before the opening of our new servicecentre or satellite workshop.

Our Directors estimate the typical lead time from the delivery of the premises to the actual opening of aservice centre and/or satellite workshop will be approximately six months.

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Relocation of our Upper Thomson Service Centre

In light of the expiry of the tenancy of our Upper Thomson Service Centre and the anticipated increase inmarket demand, our Group entered into a tenancy agreement with an Independent Third Party on 25 July 2019for the lease of a premise for a term of two years commencing on 15 September 2019, pursuant to which the newpremise has been converted into our new Tagore Service Centre. Our Directors are of the view that therelocation has, among others, the following benefits and advantages: (i) the Tagore Service Centre has anapproximate floor area of 10,700 sq. ft., which is significantly more than the floor area available at our UpperThomson Service Centre (which has an approximate floor area of 5,260 sq. ft.). The increase in floor area willprovide extra parking spaces for our customers and allow us to install more hoists if such a need arises in thefuture; (ii) our Group will be able to save an annual rental cost of approximately S$48,000 from the relocation;(iii) the new premise includes a three-story building which will allow us to incorporate a motor accidentconcierge desk similar to the current one at our Serangoon Service Centre and provide greater storage area forour spare parts; and (iv) the area is surrounded by numerous car dealers and potential corporate customers whichour Directors believe will bring more business opportunities.

Our Group has obtained written confirmation from the landlord of our Tagore Service Centre pursuant towhich we were granted a rent-free period between 1 August 2019 and 14 September 2019. All machinery andequipment (including the eight hoists and diagnostic equipment), staff and technicians from the Upper ThomsonService Centre have been relocated to the Tagore Service Centre. We have further acquired and installed twoadditional hoists at our Tagore Service Centre. The Tagore Service Centre commenced operation since lateAugust 2019 and has replaced our Upper Thomson Service Centre upon expiry of its licence agreement.

In view of the relocation and renovation works, our Group entered into an extension agreement with thelandlord of the Upper Thomson Service Centre on 8 July 2019 to extend the term of the licence agreement on amonth-by-month basis to 31 August 2019 while we relocated our machinery and equipment to the TagoreService Centre. The relocation costs were approximately HK$1.3 million, which were funded through internalresources.

Given that (i) our Tagore Service Centre is only located approximately four kilometres away from ourUpper Thomson Service Centre; (ii) we have informed our existing customers of our relocation through allavailable channels including but not limited to, our website, social media platform, email and telephone calls;(iii) the landlord of our Upper Thomson Service Centre and we extended the licence agreement of UpperThomson Service Centre on a month-by-month basis to 31 August 2019; (iv) our Tagore Service Centrecommenced operation immediately after two new hoists have been installed there, pending the transfer of theexisting eight hoists from the Upper Thomson Service Centre to the Tagore Service Centre; and (v) the thenexisting three service centres were in operation during the setting up of our Tagore Service Centre whichallowed us to divert the passenger cars which were due to be serviced at our Upper Thomson Service Centreduring the relocation process, our Directors are of the view that the relocation did not cause a materialinterruption to our operations nor did it cause any material adverse impact on our financial position.

Our Directors are of the view that the service capacity of our Group (in terms of hoist hours) will increaseby approximately 32.4% upon the commencement of our new service centre, satellite workshop and the TagoreService Centre.

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Despite the Singapore government’s announcement that the growth cap for all passenger cars in Singaporewould be 0% (i.e. the ‘‘zero-growth’’ policy) with effect from February 2018 and the forecast that the marketsize of (i) passenger car maintenance and repair industry, (ii) luxury and ultra-luxury passenger car segment and(iii) independent service provider segment in the passenger car maintenance and repair industry in Singapore willgrow at a CAGR of 7.7% from 2018 to 2023, our Directors envisage that there will be sufficient demand toabsorb the increase in our service capacity of 32.4% over the next few years, after taking into consideration ofthe followings:

• Customer F, one of our major customers during the Track Record Period, has started expanding itsmotor warranty programme since May 2019. It is envisaged that such expansion will see Customer F’smotor warranty programme reach a greater number of automobile dealers and car drivers inSingapore, thereby increasing the number of vehicles we will service in the future. Given thatCustomer F is an established global insurance group with a proven track record and to the bestknowledge of the Directors after communicating with Customer F, as at the Latest Practicable Date,the aforementioned expansion plan has reached several milestones, including (i) a marketing plan forthe expansion plan has been formulated by Customer F; and (ii) trainings, seminars and presentationshave been jointly conducted by Customer F and our Group in the second quarter of FY2019 to theagencies of Customer F to familiarise the agencies with the motor warranty programme, our Directorsare of the view that the said expansion plan is in good progress and should be successfullyimplemented. Moreover, since our Group is the exclusive service provider which provides after-market automotive services to the car owners under such motor warranty programme, our Directorsbelieve that we will benefit from the above said development particularly because Customer F hasexpressed its intention to continue collaborating with us on the motor warranty programme. Based onthe indication provided by Customer F, our additional servicing capacity is expected to be utilised byapproximately 71.2%. The expected utilisation rate is calculated based on the number of inspectionservices we estimate to undertake after the expansion of the motor warranty programme, the averageinspection time for each vehicle and the maximum hoist hours available from the additional servicingcapacity;

• the removal of restriction on warranties which require customers to service or repair their vehiclesexclusively at the respective authorised dealers’ workshops allows passenger car owners to seek forreputable and high quality independent workshops, like us, to replace the relatively more expensiveauthorised dealers’ workshops. As confirmed by our Singapore legal advisers, under the saidrestriction, passenger car owners who bring their vehicles for servicing or repair at independentworkshops during the motor warranty period may have their motor warranties voided by theauthorised dealers’ workshop regardless of whether such service or repair is covered by the motorwarranties. With the removal of such restriction, car owners may now repair the vehicle atindependent workshops without the risk of the warranties being voided by the authorised dealers’workshop. According to the enquiry issued by the Competition Commission of Singapore, theproportion of customers that service their vehicles at authorised dealers’ workshops falls distinctlyupon the expiry of the car warranty, suggesting that many car owners switch to servicing at otherindependent workshops upon the expiry of the initial warranty. In particular, the proportion of carowners with new cars that service at authorised dealers’ workshop can be as high as 90% for the firstfew years of the vehicle lifespan but drop to 40% or lower for older cars. According to the Frost &Sullivan Report, each maintenance or repair in authorised dealers’ workshops generally cost 30% to50% higher than independent workshops. The Competition Commission of Singapore also noted thatin some occasions, authorised dealers’ workshop can charge two to three times as much as anindependent workshop for comparable parts and servicing.

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After the removal of restriction on warranties that require customers to service or repair their vehiclesexclusively at the respective authorised dealers’ workshops during the warranty period, according tothe Frost & Sullivan Report, the market size of independent service provider in the passenger carmaintenance repair industry is expected to grow by S$76.4 million from 2018 to 2023. Details of theestimated market size and the annual increment of the independent service provider in the passengercar maintenance repair industry from 2018 to 2023 are as follows:

Year 2018 2019E 2020E 2021E 2022E 2023E

Market Size (S$’ million) 170.4 182.5 200.1 220.3 235.0 246.8Annual Increment compared to 2018

(S$’ million) – 12.1 29.7 49.9 64.6 76.4

Based on the forecast market size and our existing market share of 8.4% in 2018, our Directorsenvisage that the additional service capacity could be absorbed by year 2022; and

• according to the Frost & Sullivan Report, there will be a substantial growth in the market size (interms of monetary value) of the (i) passenger car maintenance and repair industry, (ii) luxury andultra-luxury passenger car segment and (iii) independent service provider segment in the passengercar maintenance and repair industry in Singapore by approximately S$33.2 million, S$22.5 millionand S$64.3 million, respectively over the next four years from 2019 which constitute a huge potentialmarket to our Group. As disclosed in the paragraph headed ‘‘Business strategies’’ in this section, weplan to capture such market demand by (i) leveraging on our competitive strengths, such as ourestablished market position; (ii) leveraging on our marketing efforts to attract and maintain publicawareness by commissioning printed advertisements in magazines and/or newspaper publications aswell as taking advantage of the rapid development of digital communications (for example, we haverecently commissioned an advertisement with a Singapore radio network) and social media throughincreased marketing and public relation activities on social media platforms to promote interactionswith customers; (iii) developing mobile applications so as to enable our customers to, among others,make advance appointment, check repair status, purchase accessories online and record repair historyusing different mobile application platforms; (iv) further developing cooperation opportunities withother insurance companies. In this regard, we have recently commenced business with anotherrenowned insurance company as its special scheme workshop to service their customers’ vehicles. Thespecial scheme workshop arrangement is a transitional arrangement whereby the insurance companymay assess our service and operation before appointing us as one of its preferred workshops. Giventhat the nature and workflow of the services that we provide under the special scheme workshop isthe same as those provided under the preferred workshop scheme, our Directors are of the view thatthere is no material difference between the two schemes, except that we are not listed on the panellist of the said renowned insurance company as we are yet to be officially appointed as their preferredworkshop. As advised by our Singapore legal advisers, we are only restricted by the ExclusiveService Agreement and the Motor Warranties Transfer Agreement with Customer F (details of whichare set out in the paragraph headed ‘‘Our business – After-market automotive services – Co-operationwith the renowned insurance company for warranty related business’’) from collaborating with otherinsurance companies in Singapore to provide warranty repairs but it does not restrict us fromproviding inspection, maintenance and repair services to passenger cars that are covered by the motorinsurance policies of other insurance companies.

Accordingly, in order to capture this emerging market demand, our Directors believe that it is necessary forand beneficial to our Group to set up a new service centre, satellite workshop and relocate our Upper ThomsonService Centre to expand our service capacity.

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Continue to grow our rental fleet to complement our after-market automotive business

We believe our car rental service is complementary to our after-market automotive business. Apart fromthe steady and recurring revenue generated from the provision of long-term car rental services, we are able toprovide value-added services to our after-market automotive customers by offering short-term replacement carwhen these customers send in their vehicle for repair or maintenance. This creates a ready pool of users for ourcar rental services. Further, as we also maintain and repair our rental passenger cars through our service centresin Singapore, we believe our own maintenance and repair services will help ensure the service quality whilereducing our costs.

During the Track Record Period, the utilisation rate of our Group’s rental fleet was 64.5%, 89.1%, 92.9%and 95.9% for FY2016, FY2017, FY2018 and 1Q2019, respectively. In view of such high utilisation and themarket demand for our rental passenger cars, our Group plans to acquire 28 rental passenger cars in the financialyear ending 31 December 2020, among which (i) 15 of these vehicles are intended to be used as long-term carrental services; (ii) one of them is intended to be reserved for use by Customer F; (iii) seven of them will bedeployed to the new service centre as short-term replacement car to complement our after-market automotivebusiness; and (iv) the remaining five will replace some of the existing vehicles. This is derived after taking intoconsideration of the following factors:

• Customer E, one of our major customers during the Track Record Period, intends to expand its rentalfleet in the near future and would be interested in renting more rental passenger cars from us. On4 December 2018, our Group entered into a non-legally binding memorandum of understanding withCustomer E, pursuant to which Customer E has agreed to rent additional 10 to 30 rental passengercars from our Group from 2020 according to the time schedule of its own expansion plan.Subsequently, our Group entered into a binding agreement with Customer E on 22 March 2019, underwhich Customer E proposed to rent from us a total of 15 rental passenger cars for a period of fiveyears with an option of adding another five rental passenger cars. As the rental arrangement isintended to be carried out in 2020, the exact terms and conditions of the rental arrangement will befinalised at a later stage after taking into account of factors including the price of the COE at therelevant time. After taking into account the binding commitment from Customer E and the growingpassenger car rental industry at a CAGR of 5.9% between 2018 and 2023 according to the Frost &Sullivan Report, our Directors believe that our passenger car rental expansion plan is substantiated;

• Customer F has since November 2018 engaged us to provide short-term replacement cars to itscustomer during the period when its damaged vehicles are under repair. In view of such recentdevelopment, our Group plans to purchase one additional rental vehicle;

• as per our usual business practice (i.e we currently have an average of seven rental passenger carsstationed in each of our service centres which are used as short-term replacement cars), we intend todeploy seven rental passenger cars to our new service centre. This is to enable us to provide value-added services to our after-market automotive customers by offering short-term replacement car whenthese customers send in their vehicles to the new service centre for repair or maintenance. Given thatwe are going to set up our new service centre in late 2019 and that we will purchase the additionalseven rental passenger cars in 2020, our Directors believe that there will be sufficient market demandfor such rental passenger cars as the new service centre will be running for at least six months andaccumulate enough customers by the time we purchase such rental passenger cars. Our Directors areof the view that we should have sufficient varieties of rental passenger cars models available at ourservice centres which could serve as the short term replacement cars for our customers. According toour past experience in running our service centres, our Directors believe that there should be at leastfive models of rental passenger cars in order to cater our customers’ needs. Hence, we plan to deployseven rental passenger cars of different models in our new service centre; and

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• as at the Latest Practicable Date, eight of our rental passenger cars will be aged eight years or aboveby 2020. As customers usually prefer younger cars with newer specifications and that aged cars tendto incur higher maintenance and repair costs, we intend to replace these vehicles to maintain ourcompetitiveness and cost efficiency.

According to the Frost & Sullivan Report, the market size of the passenger car rental industry increasedfrom S$118.3 million in 2013 to S$173.4 million in 2018, representing a CAGR of 7.9% between 2013 and2018. It is also projected to reach S$230.8 million by 2023, representing a CAGR of 5.9% between 2018 and2023, driven by more people considering to use hired vehicles as a viable alternative to owning a car inSingapore. In particular, the market size by sales value of Singapore’s car rental industry is expected to beapproximately S$197.0 million, S$208.8 million, S$220.3 million and S$230.8 million in 2020, 2021, 2022 and2023, respectively. Taking our market share in Singapore’s car rental industry in 2018 which is 1.4% as anestimation, the expected increase in the market size of Singapore’s passenger car rental industry in 2020 will besufficient to absorb the increase in our fleet size.

After considering (i) the positive business outlook of the passenger car rental industry; (ii) the expectedhigher utilisation rate of our rental fleet; and (iii) the commercial benefits of such expansion, such as theprovision of an alternative and stable source of income for our Group as well as further economies of scale interms of vehicle procurement, insurance coverage costs and car repair and maintenance which in turn leads tolower operating costs per rental car, we intend to expand our rental fleet. As at 31 March 2019, we had a total of134 rental passenger cars, comprising 24 models from 7 makes. We intend to further purchase a total of up to 28new passenger cars, comprising 4 luxury sedans and 24 economy sedans. In deciding the make and model of therental passenger car to be purchased, we will usually take into account of customer preferences and car modelswhich have an active secondary market. Our Group will also evaluate from time to time the demand andpreferences of customers and adjust the numbers of our rental passenger cars assigned to each of them.

Such expansion will be carried out in consideration of the overall market conditions and financial positionof our Group. In particular, in order to prevent our Group from having high gearing ratio and given that most ofour Group’s existing lease liabilities for the rental passenger cars will be repaid in 2020 and 2021, we intend topurchase rental passenger cars in 2020 by way of cash and hire purchase arrangement.

Strengthening our service capabilities and operating efficiencies

(i) Enhance costs efficiency by purchasing spare parts and accessories in bulk

Our business and results of operations are dependent on our ability to secure a sufficient and reliablesupply of passenger car spare parts, accessories and consumables used in the provision of our after-marketautomotive services. For FY2016, FY2017, FY2018 and 1Q2019, our cost of materials amounted toapproximately S$6.5 million, S$6.1 million, S$5.3 million and S$1.2 million, respectively, representingapproximately 67.5%, 61.4%, 58.5% and 55.8% of our total cost of sales for the respective periods. Therefore,we plan to continue to enhance our costs efficiency to improve our profitability. We have been able to lower ourcosts of spare parts and accessories with growing business volume when we meet the sales target provided byour suppliers, allowing us to enjoy a higher purchase discount. For example, one of the key reasons for theimproved gross profit margin for after-market automotive services in FY2017 was primarily due to the decreasein the average purchase prices for passenger car spare parts, accessories and consumables as higher purchasediscounts were given to us by our suppliers as our purchase volume increased in FY2017. We intend to grow our

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supply of passenger car spare parts and accessories business so that we can negotiate a deeper discount when wepurchase spare parts and accessories in bulk. Our Directors expect the amount of bulk purchase discount to beapproximately 8% to 12%, which is generally higher than the purchase discount our Group enjoyed during theTrack Record Period. According to the Frost & Sullivan Report, the after-market automotive service mainlyencompasses six types of services, in which sales of spare parts and accessories is one of the key services.During the Track Record Period, we have engaged in the supply of spare parts and accessories to overseascustomers. By purchasing spare parts and accessories in bulk, we seek to strengthen our relationship with oursuppliers and lower our purchase costs of spare parts and accessories.

(ii) Training and recruitment of our employees

We recognise that our employees are critical to our success and we place strong emphasis on continuoustraining and personal development to develop our people to keep them abreast of the knowledge and skillsdesirable to our customers. We will continue to develop and enhance the expertise and skills of our staff in orderto recruit, train and retain the best personnel for our business. We will continue to offer competitiveremuneration packages and opportunities for career advancement. We plan to recruit and train a team of newtechnicians for our new service centre and satellite workshop as we expand our servicing capacity.

We plan to recruit the following personnel in view of setting up our new service centre and satelliteworkshop:

For satellite workshop

Position Job Function and Experience Number

Service Advisor He shall act as liaison between customers and workshop serviceteam by communicating with customers regarding vehicle problems,repair timeline and expressing customer concerns to workshopservice team. He is required to attend to customers’ enquiries,perform frontline counter services including invoicing and paymentcollection from customers. The minimum related work experiencerequired is two years.

1

Vehicle Specialist(Mechanic)

They shall provide technical expertise in motor vehicle servicing,troubleshooting and repairs; and shall work closely with the ServiceAdvisors by providing proper advice and explanations with regardto technical aspect for them to follow up with the customers. Theminimum car workshop related work experience required is twoyears.

3

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For service centre

Position Job Function and Experience Number

Workshop Supervisor He shall supervise a team of Vehicle Specialist (Mechanic) andprovide guidance on motor vehicle servicing, troubleshooting andrepairs; and shall work closely with the Service Advisors byproviding proper advice and explanations with regard to technicalaspect for them to follow up with the customers. The minimum carworkshop related work experience required is five years.

1

Service Advisor They shall act as liaison between customers and workshop serviceteam by communicating with customers regarding vehicle problems,repair timeline and expressing customer concerns to workshopservice team. They are required to attend to customers’ enquiriesand perform frontline counter services including invoicing andpayment collection from customers. The minimum related workexperience required is two years.

2

Vehicle Specialist(Mechanic)

They shall provide technical expertise in motor vehicle servicing,troubleshooting and repairs; and shall work closely with the ServiceAdvisors by providing proper advice and explanations with regardto technical aspect for them to follow up with the customers. Theminimum car workshop related work experience required is twoyears.

6

Finance/AdministrationExecutive

He shall provide support on all accounting and generaladministration duties. He shall maintain full set of accounts andensure that monthly reporting timelines are duly met. The minimumwork related experience is two years.

1

Customer ServiceExecutive

He shall attend and effectively handle customers’ enquires. He isrequired to perform frontline counter services including invoicingand payment collection from customers; and handle daily closingand settlement of cash collections. The minimum work relatedexperience is two years.

1

(iii) Upgrade of information technology and other equipment

We plan to strengthen our market leadership position in Singapore by increasing our service capabilities tocope with the evolving market trend and changing customer demand. The passenger car industry is characterisedby rapid introduction of new car models with advanced technological features. For example, the introduction ofhybrid battery powered vehicle and electrically powered vehicle are new product trends in this industry. Toensure that we stay ahead, we intend to continue upgrading our service capabilities by keeping ourselves abreastof technological trends and know-how and regularly updating and enhancing our diagnostic equipment for thelatest makes and models of passenger cars.

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We also plan to continue to strengthen our operational efficiency to improve our revenue and profitability.We have conducted, and will continue to conduct regular analysis of our business processes to identify areas thatrequire improvement. Our centralised SAP system has enabled us to coordinate our resources to achieveoperational efficiencies. We will continue to develop and invest in software infrastructure, as we believe that thiswill help us manage our internal operations and business as well as external requirements of our customers moreeffectively.

We plan to upgrade our SAP system to incorporate an advanced customer relationship management systemand develop mobile applications so as to enable our customer to, among others, make advance appointment,check repair status, purchase accessories online and record repair history using different mobile applicationplatform such as Android and Apple iOS. We believe that an improved SAP system will enable us to bettertrack, monitor and analyse our key operating data and achieve greater operational efficiency, more efficientmanagement and allocation of our resources.

Brand building through strengthening our relationships with our existing customers and expanding ourcustomer base

Our Directors believe that apart from the improvement in servicing capacity, operational efficiencies,technical skills and service quality, strengthening our brand recognition in the market is an area which we willwork on further to attract new customers and enhance our customers’ loyalty.

We believe our brand image is critical to our business development and we aim to develop a brand namethat is synonymous with a consistently high service quality level. To further enhance customer awareness of ourbrand image, we intend to leverage on our marketing efforts to attract and maintain public awareness. We plan tocommission printed advertisements in magazines and/or newspaper publications. We also intend to participate inpromotional events organised by different passenger car clubs and sponsor their events and conduct marketingand promotion activities for the launch of our new service centre in order to improve awareness of our brand.We also plan to take advantage of the rapid development of digital communications (for example, we havecommissioned advertisements through a radio network in 2019) and social media through increased marketingand public relation activities on social media platforms such as Facebook to promote interactions with customers.We believe that our continuous efforts in engaging our customers will help increase our customer loyalty,strengthen our brand, and further add to our brand equity.

We plan to continue to strengthen our existing relationships with the insurance companies, automotivedealers, car leasing companies, other car service centres as well as individual and corporate customers as theirpreferred after-market automotive services provider. We will continue to strengthen our established relationshipswith these customers by fostering close co-operation and maintaining good communication and service standards.We believe that our proven track record and reputation have positioned us well to secure new customers andprovide more reliable services to existing customers.

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We have been able to expand our customer base through strategic co-operation with companies whosebusiness complements with our services. For example, in 2017, we established a strategic co-operation withCustomer F, a renowned insurance company, where our service centres provide exclusive after-marketautomotive services to the car owners under the motor warranty programme provided by the renowned insurancecompany. Furthermore, since February 2019 and up to the Latest Practicable Date, we entered into 36 fleetservicing agreements with 36 different car rental operators in Singapore, pursuant to which we shall providerepair and maintenance services to their rental vehicles for a period of one to two years. The car rental operatorswill inform us the number of their rental vehicles which require our repair and maintenance services from timeto time. As at the Latest Practicable Date, we were informed by the car rental operators to provide repair andmaintenance services to a total of 1,540 rental vehicles. We have also in March 2019 entered into a servicingagreement with a commercial transport company pursuant to which we shall provide servicing to 60 of theircommercial vehicles for a period of two years. We plan to continue our strategy of entering into selectivestrategic co-operation, joint ventures or partnership in the future with companies whose business complementswith our services so as to add value to our Group or in the areas where we wish to increase our market share,and develop customised products or solutions relevant to our customers in the relevant geographic area.

As advised by our Singapore legal advisers, during the Track Record Period and up to the LatestPracticable Date, our Group has complied with the relevant regulatory requirements in Singapore regarding thefleet servicing agreements as mentioned above.

OUR BUSINESS

We are a one-stop after-market automotive service provider in Singapore offering comprehensive andintegrated automotive related solutions to customers. We principally engage in the provision of a comprehensiverange of after-market automotive services, with a focus on inspection, maintenance and repair services. We alsoengage in (i) offering short-term and long-term car rental services; and (ii) supplying passenger car spare parts,accessories and automotive equipment to customers in Singapore and overseas countries (i.e. Sri Lanka andMyanmar).

The detailed description of our core business segments are as follows:

After-Market Automotive Services

We principally engage in the provision of a comprehensive range of after-market automotive services, witha focus on inspection, maintenance and repair services. We may also from time to time provide modification,tuning and grooming services to our customers in Singapore, the revenue derived from the provision of suchservice accounted for less than 1.0% of our total revenue during the Track Record Period.

We provided after-market automotive services to approximately 15,600, 25,200, 22,800 and 5,100 units ofpassenger cars for FY2016, FY2017, FY2018 and 1Q2019 respectively. During the Track Record Period, at least30% of the number of passenger car we serviced were luxury passenger cars and ultra-luxury supercars. ForFY2016, FY2017, FY2018 and 1Q2019, our revenue generated from after-market automotive services accountedfor approximately 92.5%, 85.8%, 79.3% and 78.2% respectively, of our total revenue.

Inspection, maintenance and repair services

We provide inspection, maintenance and repair services to a wide range of makes and models of passengercars in Singapore including luxury passenger cars and ultra-luxury supercars.

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The flowchart below illustrates the general steps taken by us in providing our inspection, maintenance andrepair services. For our services relating to the motor warranty programme with the renowned insurancecompany, please refer to the paragraph headed ‘‘Our business – After-market automotive services – Co-operationwith the renowned insurance company for warranty related business’’ in this section. For our services asapproved reporting centre or preferred workshop of the insurance companies, please refer to the paragraphheaded ‘‘Our business – Impact of new arrangement with Customer F – Co-operation with insurance companiesas approved reporting centre or preferred workshop’’ in this section.

Customer brings the passenger car to our service centre or we send a driver to collect the passenger car.

Our service advisor makes enquiries to the customer and records the customer’s issue with the passenger car.

A job card with details of the services required and customer’s contact details is generated.

Our service advisor confirms the details on the job card with the customer.

The customer acknowledges and signs on the job card.

Our technician conducts inspection and examination of the customer’s car.

Our technician conducts the work required.

Upon completion of work required, quality control procedures are conducted.

Our service advisor informs the customer to return and collect the passenger car. Our technician explains

to the customer on the work done.

The customer pays the remaining balance.

Our technician checks whether the spare parts required are available.

No

Yes

If certain spare parts have to be replaced but are not in stock, our service advisor will seek consent

from the customer on the price of the spare parts. 30% deposit based on the total cost of the job is required from the customer

if spare parts to be purchased will be sourced from overseas and cost more than S$500.

Depending on the condition of the passenger car, the customer may have to keep the passenger car in our service centre.

If the customer is allowed to drive away the passenger car, our service advisor will inform him

to return the passenger car once spare parts are available.

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Our service centres are equipped with comprehensive passenger car inspection, maintenance and repairfacilities, such as Car-O-Liner collision repair and wheel alignment systems. Suppliers of passenger cars vary intheir recommendations on how frequently passenger car owners should find a service provider for periodicpassenger car inspection and maintenance. It generally ranges from every three to six months or from 5,000 to10,000 kilometres driven, whichever is earlier. Our services for passenger car inspection and maintenanceincludes, among others, a routine passenger car inspection, replacement of battery, filters, spark plugs or otherspare parts if required. We provide product warranty on new spare parts purchased and installed by us for aperiod of up to one year or 30,000 kilometres driven, except wear and tear. We also provide product warranty onreconditioned spare parts purchased and installed by us for a period of up to six months or 10,000 kilometresdriven, except wear and tear. Within the product warranty period, customers can bring the passenger car forinspection if there is any problem with the spare parts installed by us and we will conduct inspection and repairor replace the spare parts if required. For further details, please refer to the paragraph headed ‘‘Productwarranty’’ in this section. We keep records on customers served with inspection and maintenance services andwould send reminders to those customers to schedule subsequent inspection and maintenance checks.

We also provide a comprehensive range of passenger car repair services, ranging from minor repairs suchas replacement of faulty spare parts, to major repairs such as overhaul of engine and transmission systems. Wecategorise our spray painting services conducted in our paint workshop as part of our repair services. We areable to service a wide range of makes and models of passenger cars in Singapore, including luxury passengercars and ultra-luxury supercars which usually requires specialised diagnostic equipment as well as dedicated andsophisticated skill set. We update diagnostic equipment and software from time to time for the newer car modelsas appropriate. Our technicians are periodically trained to operate our diagnostic equipment by our workshopsupervisors who have expertise on the diagnostic equipment and the relevant software. We are also able toservice hybrid vehicles that require, for example, hybrid battery conditioning and rebuilding services, testing ofelectric transmissions, DC-DC converters, and maintenance for hybrid battery.

For passenger car inspection services, it generally takes between one day and five days to complete thework. For passenger car maintenance services, it generally takes between one day and seven days to completethe work. For passenger car repair services, depending on the complexity of the damage, it may take up to 21days to complete the work.

As a one-stop after-market automotive service provider, we may further provide value-added services forcustomers by sending a driver to collect the customers’ passenger car upon request. Our motor accidentconcierge services include, among others, handling the paperwork and managing the claim process on behalf ofthe client, providing professional assessment on the damage of the accident vehicle, liaising with insurancecompany on the cost of repair and additional claim for the loss of use of vehicle as well as arranging areplacement vehicle for our customer.

Co-operation with automotive dealers

We co-operate with our customers which are established automotive dealers in Singapore. Our Directorsbelieve that automotive dealers recognise that good after-market service contributes significantly to totalcustomer satisfaction and is, therefore, a critical part of an effective marketing strategy. These automotivedealers offer motor warranties of the passenger cars to their customers directly. However, since many automotivedealers need to concentrate on their core business activities, they typically outsource their after-market functionssuch as passenger car inspection, maintenance and repair services to third-party service providers like us.Further, by providing critical link between the automotive dealers and the end-users after the sale has takenplace, we help our automotive dealers’ customers maintain customer relationship, brand integrity and productreliability as well as make after-market service easily available to the end-users. Our Directors believe thisenables the automotive dealers to foster a better relationship with the end-users as our after-market automotiveservice is considered an integral part of their business operations.

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Co-operation with the renowned insurance company for warranty related business

The flowchart below illustrates the general steps taken by us in handling a job involving the motorwarranty programme with the renowned insurance company:

New passenger car(purchased fromparallel importer)

Car owner can repair the used passenger car at his own costs and conduct

a second inspectionThe condition of the used car is satisfactory

Car owner pay a premium and join the motor warranty

programme with the renownedinsurance company

Used passenger car

The condition of the used passenger car

is satisfactory The condition of the used passenger car

is unsatisfactory

Pre-inspection of used passenger car

Car owner, who joined the motor warranty programme

with the renowned insurance company, bringspassenger car for inspection

If there is a defectin component which is covered

under the warrantycoverage

We repair the componentand issue invoice to charge

the renowned insurancecompany directly

We negotiate with the renownedinsurance company for

the repair costs andseek its consent before

rendering repair services

We repair the component and issue invoice

to charge the car owner

If there is a defect in component

which is not covered under the warranty coverageThe repair costs are below

the limit stated in the Exclusive Service Agreement with the renowned insurance

company

The repair costs are above the limit stated in the

Exclusive Service Agreement with the renowned insurance

company

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Background

According to the Frost & Sullivan Report, it was a common practice for passenger car service centres tooffer motor warranties to customers because it improves customers loyalty and reinforces the brand. We havebeen offering motor warranties to individual and corporate customers on or before 31 December 2016. Ourcustomers paid us warranty premium and we provided repair services in respect of the defective car componentsof our customers if they are covered by our warranty. However, as the Monetary Authority of Singapore is of theview that such warranty programmes are within the definition of insurance business in Singapore and have to beprovided by an insurer licensed by the Monetary Authority of Singapore, we have applied for and have beengranted an exemption from the Monetary Authority of Singapore for our motor warranty programmes providedon or before 31 December 2016.

In light of the requirement of Monetary Authority of Singapore, we restructured our motor warrantybusiness by co-operating with a renowned insurance company (i.e. Customer F), which is a wholly-ownedsubsidiary of an international insurance group headquartered in the United States of America. Customer F is ageneral insurer licensed by the Monetary Authority of Singapore which achieved a gross written premium ofS$145 million in 2017 and ranked the 8th largest insurer in the general insurance industry in Singapore. Prior tothe restructuring of our motor warranty programmes, we had worked with Customer F in various occasions inrelation to insurance accident repair services where our customers carrying Customer F’s motor insurance mayrequire us to liaise with Customer F for repair services. Through our previous working relationship with them,we became aware that Customer F was interested in developing a motor warranty programme and was interestedin collaborating with us to provide the programme. As we had the infrastructure and expertise to handle largeamount of motor warranties, we believed that co-operation with Customer F on the motor warranty programmewould benefit our business in the long-term as we will have access to a new customer base of Customer F.

As advised by our Singapore legal advisers, during the Track Record Period and up to the LatestPracticable Date, our Group has complied with the relevant regulatory requirements in Singapore regarding thewarranty related business with Customer F by entering into the Exclusive Service Agreement and the MotorWarranties Transfer Agreement with Customer F as mentioned below.

Motor Warranties Transfer Agreement

In view of the above, we have entered into the Motor Warranties Transfer Agreement with Customer Fpursuant to which we transferred all (i.e 5,538) motor warranty agreements entered into by our Group up to andincluding 31 December 2016 with total outstanding obligation of approximately S$2.2 million to that insurancecompany. Under the Motor Warranties Transfer Agreement, we will be entitled to invoice Customer F thefollowing service fees:

(1) motor repair services fee for repair services that our Group provided to vehicles under the motorwarranty programme; and

(2) incentive fee for the warranty premium shared by Customer F with our Group when the actual lossratio achieved is lower than the target loss ratio.

As at 31 March 2019, 3,136 motor warranty agreements which have been transferred to Customer F hadexpired while the remaining 1,604 and 798 agreements transferred will expire in FY2019 and FY2020 toFY2024, respectively.

For details of this agreement, please refer to the paragraph headed ‘‘Customers – Our Motor WarrantiesTransfer Agreement with Customer F’’ in this section.

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Exclusive Service Agreement

We have also entered into the Exclusive Service Agreement with Customer F which commenced from1 January 2017. Car owners may participate in the motor warranty programme by paying a premium to CustomerF. Our service centres are the exclusive workshops which provide after-market automotive services to the carowners under the motor warranty programme. All passenger cars that purchased the motor warranties under themotor warranty programme have to be serviced by our service centres. Under the Exclusive Service Agreement,our Group will be entitled to invoice Customer F the following service fees:-

(1) pre-inspection fee for inspection job performed by our Group on passenger cars that are newlyregistered under Customer F’s motor warranty programme;

(2) motor repair services fee for repair services that our Group provided to passenger cars under themotor warranty programme; and

(3) incentive fee for the warranty premium shared by Customer F with our Group when the actual lossratio achieved is lower than the target loss ratio.

To the best knowledge and belief of our Directors, Customer F had not co-operated with any otherautomotive workshops to offer a similar motor warranty programme before co-operating with us in Singapore.According to the Frost & Sullivan Report, this type of exclusive service arrangement is a relatively new type ofarrangement in the automotive maintenance and repair industry of Singapore and has only recently emerged inthe maintenance and repair industry in Singapore. According to the Frost & Sullivan Report, it is not uncommonfor automotive workshops to co-operate with insurance companies to offer motor warranty programmes.However, it is rare to have exclusive arrangement between workshops and insurance companies since insurancecompanies commonly impose a high entry barrier for workshops to serve as an exclusive workshop. As such, ourexclusive arrangement with Customer F has not become an industry norm.

For new car owners, they can directly enrol in the motor warranty programme without inspection of theirpassenger cars. For used car owners, before enrolment in the motor warranty programme, the used passenger carhas to be inspected by our service centres. We receive a pre-agreed inspection fee from Customer F for eachused passenger car inspected in our service centres. After the inspection, if the condition of the used passengercar is satisfactory, the used car owner can pay a premium to Customer F to join the motor warranty programme.If the condition of the used passenger car is unsatisfactory, the used car owner may repair the passenger car athis own costs and a second inspection may be conducted. If the condition of the used passenger car issatisfactory after the repair, the used car owner can pay a premium to Customer F to join the motor warrantyprogramme. The motor warranty programme provides cover for mechanical or electrical breakdowns that mayaffect the passenger cars during the warranty period. The components covered by the warranty include air-con,braking systems, clutch systems, drive shaft, electrical components, electrical motors, engine components, enginecooling systems, gearbox, hybrid batteries, steering and suspensions. The warranty coverage is up to five years.

During the warranty period, car owners who participated in the motor warranty programme may bring theirpassenger cars to our service centres for inspection. If it is discovered upon inspection that there is a defect incomponent covered under the warranty coverage, and the repair costs are below the limit stated in the ExclusiveService Agreement with Customer F, we will repair the component and issue invoice to charge Customer F forthe services rendered; if the repair costs are above the limit stated in the Exclusive Service Agreement, we willnegotiate with Customer F for the repair costs and seek its consent before rendering repair services to thepassenger cars.

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Motor Warranty Agreements

According to our internal record, as at the Latest Practicable Date, there were approximately 6,600 motorwarranty agreements under the motor warranty programme with Customer F comprising 1,300 agreements whichwere transferred by us to Customer F under the Motor Warranties Transfer Agreement and 5,300 agreementswhich were entered into by Customer F and their respective customers. The expiry dates of these agreements areas follows:

Year of expiry Approximate number of agreements

FY2019 500FY2020 2,400FY2021 1,400FY2022 1,400FY2023 400FY2024 and beyond 500

Impact of new arrangement with Customer F

Since our co-operation with Customer F in January 2017, we have provided services to 566, 845 and 196units of passenger cars for FY2017, FY2018 and 1Q2019 respectively under the motor warranty programme,accounting for approximately 5.9%, 8.4% and 7.0% respectively, of our total revenue. As our intention inengaging in the motor warranty programme was to secure customers to return to our Group for different types ofrepair and maintenance services, we also derive revenue from providing after-market automotive services whichare not covered under the motor warranty programme to car owners who participated in Customer F’s motorwarranty programme. Revenue generated from the provision of after-market automotive services which are notcovered under the motor warranty programme to car owners who participated in the motor warranty programmewere approximately S$3.9 million, S$4.5 million and S$1.1 million, representing approximately 24.3%, 31.5%and 33.2% of our total revenue generated from after-market automotive services for FY2017, FY2018 and1Q2019, respectively. For further details of the terms of our Exclusive Service Agreement with Customer F,please refer to the paragraph headed ‘‘Customers – Our Exclusive Service Agreement with Customer F – Themotor warranty programme’’ in this section. Our co-operation with Customer F on the motor warrantyprogramme had the following impact on our revenue, warranty premium and cash flow:

Revenue and loss of warranty premium:

After entering into the Motor Warranties Transfer Agreement and the Exclusive Service Agreementwith Customer F, our revenue from the warranty related business decreased by approximately S$0.1 millionfrom approximately S$1.2 million in FY2016 to approximately S$1.1 million in FY2017 as we no longerrecognised the warranty premiums we received on a straight-line basis throughout the warranty period. Inreplacement, we are only entitled to (i) pre-inspection fees for inspection job performed by our Group onvehicles that are newly registered under Customer F’s motor warranty programme; (ii) motor repair servicefees for such in-warranty repairs from Customer F; and (iii) incentive fee for the warranty premium sharedby Customer F with our Group when the actual loss ratio achieved is lower than the target loss ratio. Hadwe continued with our own motor warranty programme in FY2017, our Group would have recognisedapproximately S$1.1 million of revenue in FY2017 based on the straight-line amortisation of the warrantypremium that was transferred to Customer F.

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Revenue from the warranty related business increased by approximately S$0.4 million (orapproximately 37.0%) from approximately S$1.1 million in FY2017 to approximately S$1.5 million inFY2018. The increase was mainly due to the increase in the number of passenger cars we have servicedunder Customer F’s motor warranty programme, where the number of passenger cars serviced under thewarranty related business increased from 566 units in FY2017 to 845 units in FY2018.

In addition to revenue generated under warranty related business, our Group also generated revenueby providing inspection, maintenance and non-insured repair services (that are not covered under CustomerF’s motor warranty programme) and insured repair services to car owners who participated in Customer F’smotor warranty programme. Pursuant to Customer F’s motor warranty programme, car owners whoparticipate in the motor warranty programme shall ensure that their vehicles shall only be serviced and/orrepaired by one of our workshops, failing which the car owner’s warranty with Customer F shall be voidedautomatically without reimbursements. Notwithstanding this requirement, pursuant to the terms andconditions of the motor warranty programme, accident repairs can be carried out at any workshop, providedthat the passenger car is then re-inspected by us within seven days after the completion of such repairs.Therefore, car owners who participate in Customer F’s motor warranty programme may engage us for after-market automotive services which are not covered under the motor warranty programme and repairs fordamage arising from accident covered under insurance claims. Revenue generated from the provision ofafter-market automotive services which are not covered under the motor warranty programme to car ownerswho participated in the motor warranty programme were approximately S$3.9 million, S$4.5 million andS$1.1 million, representing approximately 24.3%, 31.5% and 33.2% of our total revenue generated fromafter-market automotive services for FY2017, FY2018 and 1Q2019, respectively.

For the revenue generated from a passenger car under Customer F’s motor warranty programme, thecategory of revenue to which our services belong and the relevant revenue recognition policies are asfollows:

Services generating revenue Payer Category of revenue Time of revenue recognition

Pre-inspection fee before thepurchase of the motor warrantyprogramme

Customer F Warranty related business Fees received for the provision ofrepair and maintenance ofmotor vehicles are recognisedover time as our Groupsatisfies its performanceobligation.

Repairs covered under the motorwarranty programme

Customer F Warranty related business

Motor repair services andmaintenance fee (not covered bythe motor warranty programme)

Car owner (i) inspection, maintenance andnon-insured repair services;or

(ii) insured repair service ifsuch repair is claimed frominsurance company

Incentive fee Customer F Warranty related business Incentive fee from Customer F isonly recognised to the extentthat it is highly probable that asignificant reversal in theamount of cumulative revenuerecognised will not occur, i.e.when the amount of incentivefee could be ascertained withCustomer F.

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The revenue derived from our after-market automotive services provided to car owners whoparticipated in the motor warranty programme in FY2017, FY2018 and 1Q2019 are as follows:

FY2017 FY2018 1Q2019

Revenue(S$’000)

Approximatepercentageto the total

revenuefrom after-

marketautomotive

services (%)

Approximatepercentage

to theGroup’s

totalrevenue (%)

Revenue(S$’000)


revenuefrom after-

marketautomotive

services (%)


to theGroup’s

totalrevenue (%)

Revenue(S$’000)


revenuefrom after-

marketautomotive

services (%)


to theGroup’s

totalrevenue (%)

Inspection, maintenance and non-insured repairservices which are not covered under CustomerF’s motor warranty programme but provided tocustomers who participated in such motorwarranty programme 3,332 20.8% 17.9% 3,324 23.3% 18.5% 848 24.9% 19.5%

Insured repairs services which are provided tocustomers who participated in Customer F’smotor warranty programme 559 3.5% 3.0% 1,173 8.2% 6.5% 281 8.3% 6.4%

Warranty related business 1,102 6.9% 5.9% 1,510 10.6% 8.4% 304 8.9% 7.0%

Total 4,993 31.2% 26.8% 6,007 42.1% 33.4% 1,433 42.1% 32.9%

The number of our servicing jobs derived from after-market automotive services provided to carowners who participated in the motor warranty programme in FY2017, FY2018 and 1Q2019 are as follows:

FY2017 FY2018 1Q2019

Number ofservicing jobs

Approximatepercentage to

the totalnumber of

servicing jobsour Group

provided (%)Number of

servicing jobs


the totalnumber of


provided (%)Number of

servicing jobs


the totalnumber of


provided (%)

Inspection, maintenance and non-insuredrepair services which are not coveredunder Customer F’s motor warrantyprogramme but provided to customerswho participated in such motorwarranty programme 10,821 42.8% 11,013 48.2% 2,306 45.3%

Insured repairs services which areprovided to customers whoparticipated in Customer F’s motorwarranty programme 101 0.4% 213 0.9% 36 0.7%

Warranty related business 566 2.2% 845 3.7% 196 4.0%

Total 11,488 45.5% 12,071 52.9% 2,538 50.0%

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Cash flow:

In addition, the timing of our cash flow from the warranty related business is calibrated to alignwith the actual services carried out. Prior to the new arrangement, we collected the full amount ofwarranty premium upfront from our customers once we entered into a warranty contract with eachindividual customer. However, in preparation for the new arrangement with Customer F, we arerequired to transfer all unamortised warranty premiums that we previously collected (amounting toapproximately S$2.2 million) to Customer F in five installments under the Motor Warranties TransferAgreement. Under the new arrangement, our Group shall invoice Customer F on a monthly basis forthe pre-inspection fee (for inspection jobs) and motor repair services fee (for repair services) carriedout. Our Group is also entitled to an incentive fee in relation to the residue warranty premium ofexpired warranties calculated based on the loss ratios on a half year basis.

Our Directors believe that in the long run, our Group will benefit from the collaboration sincewe will be able to expand our services by gaining access to a wider customer base. On the other hand,if Customer F terminates the motor warranty programme, or that we are unable to renew theExclusive Service Agreement, our warranty related business may be adversely impacted if we areunable to seek replacement of a new insurer licensed by the Monetary Authority of Singapore in time.

In addition to providing the inspection, maintenance and repair services to the passenger carswhich are covered by the motor warranty programme of Customer F, we also provide such services tothe passenger cars which are covered by the insurance policies of Customer F. Passenger car ownerswho purchased motor insurance from Customer F can bring the insured passenger cars to us for repairafter motor accidents. We provide such services by acting as the approved reporting centre andpreferred workshop of Customer F. For details of such co-operation, please refer to the followingparagraph headed ‘‘Our business – Impact of new arrangement with Customer F – Co-operation withinsurance companies as approved reporting centre or preferred workshop’’ in this section.

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Co-operation with insurance companies as approved reporting centre or preferred workshop

The flowchart below illustrates the general steps taken by us in handling a job for which we act as theapproved reporting centre:

Passenger car delivered to our service centre

Conduct inspection of the passenger car

Fill out details of the accident claims, including the date ofthe event and our inspection results, in an e-filing system of

the General Insurance Association of Singapore

Report the type of repair works andthe estimated fees to the relevant insurance company

The flowchart below illustrates the general steps taken by us in handling a job for which we act as thepreferred workshop:

Passenger car with insurance coveragedelivered to our service centre

Conduct inspection of the passenger car

Prepare and submit accident claims report with photos of the passenger car to insurance company

Negotiate the type of repair works required and the fees with insurance company

Issue invoices to insurance company for its payment on behalf of the insured

Conduct the repair works

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We work closely with two insurance companies in Singapore by acting as their approved reporting centreand/or preferred workshop. We have written agreements with the renowned insurance company to act as itsapproved reporting centre and preferred workshop since 2017. We also have a written agreement with anotherinsurance company to act as its approved reporting centre since 2014.

As an approved reporting centre of the insurance companies, we are authorised to inspect the insuredpassenger cars after accidents. After the inspection, we have to fill out details of the accident claims, includingthe date of the event and our inspection results, in an e-filing system of the General Insurance Association ofSingapore. We will report the type of repair works required and the estimated fees to the relevant insurancecompany. Although we do not receive any fees for acting as the approved reporting centre, our Directors believethat car owners are likely to engage us to provide after-market automotive service after they have arranged todeliver their passenger cars to us for accident reporting.

As the preferred workshop of the renowned insurance company, we are responsible for repairing theinsured passenger cars and assisting the insured to file repair report of non-injury motor accident or theSingapore accident statement with the General Insurance Association of Singapore. Passenger car owners whopurchased motor insurance from the renowned insurance company can bring the insured passenger cars to us forrepair after motor accident. If the repair required is covered by the motor insurance, we will conduct inspectionof the passenger car, prepare and submit accident claims report with photos of the passenger car to the renownedinsurance company and negotiate the type of repair works required and the fees with the renowned insurancecompany. If the fees are acceptable to the renowned insurance company, we will repair the car and issue invoiceto the latter for the payment of our repair costs.

For details of our agreements for appointment of preferred workshop and approved reporting centres, pleaserefer to the paragraph headed ‘‘Customers – Agreements for preferred workshop and approved reporting centres’’in this section. Our co-operation with these two insurance companies as their approved reporting centre and/orpreferred workshop is not an exclusive arrangement. We are also able to provide inspection, maintenance andrepair services to passenger cars which are covered by insurance policies of other insurance companies. Theworkflow for handling these passenger cars is the same as the general steps which we take for handling jobs as apreferred workshop.

Car Rental Services

Our car rental services comprise (i) short-term rentals and (ii) long-term rentals. In addition, we offervarious value-added services such as free towing service and battery recovery, courtesy car, and vehicle delivery,if required. As at the Latest Practicable Date, we had a total number of 142 rental passenger cars. Our rentalpassenger cars are of various classes, such as economy and luxury, and body types, such as MPVs, sedans, andSUVs, to meet different rental needs. As at 31 March 2019, our rental passenger cars had a total of 24 modelsfrom 7 makes.

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We set out below the breakdown of our rental passenger cars by types of vehicle as at 31 March 2019:

Type of vehicleNumber of

rental vehicle

Economy sedan 110Economy SUV 9Economy MPV 5Luxury sedan 6Luxury SUV 1Commercial van 3

Total 134

We also set out below the total number of rental passenger cars, their remaining useful life and theutilisation rate of the rental fleet during the Track Record Period:

FY2016 FY2017 FY2018 1Q2019

Total number of rental passenger cars at thebeginning of each financial year 27 73 134 134

Net increase in the number of rental passenger carsduring each financial year 46 61 0 0

Total number of rental passenger cars at theend of each financial year 73 134 134 134

Remaining useful life of the rental passengercars as at the end of each financial year(Note 1)

Number of cars with remaining useful life of1 to 60 months 25 14 14 14

Number of cars with remaining useful life of61 to 120 months 48 120 120 120

Total number of cars at the end of eachfinancial year 73 134 134 134

Utilisation rate (Note 2) 64.5% 89.1% 92.9% 95.9%

Notes:

1. We assume that our rental passenger cars have a useful life of 120 months after taking into consideration of the 10 years COEtenure, when calculating their remaining useful life.

2. The utilisation rate of our rental passenger cars is calculated by dividing the aggregate days that our rental passenger cars arerented out by the aggregate days that our rental passenger cars are in operation.

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During the Track Record Period, we entered into four long-term rental contracts with Customer E betweenMarch 2016 and March 2017 for rental of 101 units of our rental passenger cars. This lead to the increase in (i)the total number of our rental cars from 73 units in FY2016 to 134 units in FY2017 as we acquired additionalrental passenger cars to fulfill the demand for our rental services from Customer E, (ii) the utilisation rate of ourrental passenger cars from 64.5% at the end of FY2016 to 89.1%, 92.9% and 95.9% at the end of FY2017,FY2018 and 1Q2019 respectively and (iii) the number of cars with remaining useful life of 61 to 120 monthsfrom 48 cars at the end of FY2016 to 120 cars, 120 cars and 120 cars at the end of FY2017, FY2018 and1Q2019 respectively.

We maintain and repair our rental passenger cars through our service centres in Singapore. We believe ourown maintenance and repair services help ensure the service quality while reducing our costs. For maintenanceand repair works on our rental passenger cars, including passenger cars rented to the car sharing company, dueto normal wear and tear, the costs for maintenance and repair are borne by us. In the event that the repair workson our rental passenger cars are not due to normal wear and tear, for example, when there is a collision on ourrental passenger cars due to car accidents, our customer of rental passenger car is responsible for the repair costup to the amount stipulated in the insurance policy taken out by our Group, any amount excess and above thestipulated amount is borne by the insurance company providing the insurance coverage.

As our business strategy, we acquired most of our passenger cars from automotive dealers directly. Wenegotiate the terms of the sale and purchase agreements, including delivery arrangement and price, directly withthe automotive dealers. As at the Latest Practicable Date, we have 133 out of 142 rental passenger cars financedby hire purchase arrangement with two banks and two financial institutions in Singapore. Typically, our hirepurchase for rental passenger cars has a tenure of five years. As at 31 March 2019, hire purchase financing forthe rental passenger cars amounted to approximately S$6.4 million. For more details, please refer to theparagraphs headed ‘‘Financial Information – Indebtedness – Finance lease obligations’’ and ‘‘FinancialInformation – Indebtedness – Lease liabilities’’ in this prospectus.

As at the Latest Practicable Date, 125 of our 142 rental vehicles are on long-term rental contracts rangingfrom one year to seven years. As the majority of our rental vehicles are on long-term rental contracts, we do notrequire designated parking spaces to store these vehicles. For short-term rental vehicles that are not beingutilised, they will be stored in the parking spaces in our three service centres. As at the Latest Practicable Date,we had a total of 113 parking spaces in our three service centres with an additional of 55 public parking spacesnear these service centres which we may use to store our rental vehicles.

We will from time to time assess the conditions of our rental vehicles. If the condition of the vehicle isunsatisfactory to us, we may sell the vehicle or deregister the vehicle. For fully depreciated vehicles, we mayeither deregister the vehicle or renew the COE should we decide to continue using the vehicle. For vehiclesderegistered within the 10-year COE period, we will be entitled to COE and PARF rebates from the government.For more details of the government rebate system, please refer to the section headed ‘‘Financial Information –

Description of selected components of consolidated statements of profit or loss and other comprehensive income– Other net income and gains’’ in this prospectus.

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General steps for provision of car rental services

The flowchart below illustrates the general steps taken by our Group for handling a passenger car rentaljob. The general steps apply to all individual and corporate customers including Customer E, the car sharingcompany.

If the petrol level is insufficient or there are additional damage/scratches made, the rental executive will assess the amount

to be compensated by the customer and submit to the claims department manager for confirmation. The deposit will be returned

to the customer once the rental executive confirms there are no outstanding traffic penalty or parking offences

incurred during the rental period.

Upon return of the passenger car, our rental executive will conduct an inspection in the presence of the customer to

note down the petrol level and/or any damages/scratches.

Our rental executive will attend to the customer and understand his/her needs and requirements for the car rental services.

Our rental executive will then recommend a suitable passenger car and make a quotation to the customer.

Once agreed by the customer, our rental executive will conduct a background check to determine the customer’s credibility

as road user, credit worthiness and whether he/she is subject to warrant or arrest.

If the customer satisfies the internal background check, our rental executive will prepare the rental agreement and

explain the key terms and conditions of the rental agreement.

The customer will inspect and collect the rental car.Our rental executive will input the data and details

of the rental job in the SAP system.

Upon signing the rental agreement, the customer will either make full rental payment (for short-term rentals) or a deposit

(for long-term rentals) by way of cash, cheque, credit card, debit card or bank transfer.

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Short-term rentals

For rentals of less than 180 days, we categorise them as short-term rentals. Our short-term rentals meet theneeds of individual and corporate customers who may wish to rent a passenger car on a short-term basis forleisure or business purposes. Moreover, we leverage our short-term rental passenger cars services to providetemporary replacement car rentals to our after-market automotive services customers whose passenger cars areunavailable due to repair or maintenance. As at the Latest Practicable Date, we offered 17 passenger cars forshort-term rentals in Singapore.

We charge our short-term rental customers basic rental rates, which are inclusive of cost of basic insurancecoverage and our administrative fees. We implement standard pricing on our short-term rental rates. Ourcustomers are responsible for the cost of gasoline consumed during the rental period.

Our short-term rental customers must present their identity cards and valid driving licences for ourverification. Short-term rental customers are required to sign our rental agreement and pay basic rental inadvance by debit card, credit card or cash prior to picking up passenger car. Our short-term rental customers arereminded by us that: (i) they are not allowed to travel out of Singapore with our passenger car; (ii) our passengercar is not allowed to be used for any illegal activities; and (iii) the customer shall bear all financial loss sufferedby us. We will also conduct background search on the customer, such as checking the credibility of the customeras road user, the customer’s credit worthiness and whether the customer is a subject of warrant or arrest of theSingapore. If the background search result is not satisfactory to us, we will not rent the passenger car to thecustomer. When our short-term rental customers return passenger car, our staff follows standard procedures toinspect the passenger car condition, such as conducting assessment on damage, if any. Upon confirmation fromour staff, customer can handover the passenger car.

For FY2016, FY2017, FY2018 and 1Q2019, our revenue generated from short-term rental servicesaccounted for approximately 1.2%, 1.9%, 1.2% and 1.5% respectively, of our total revenue.

Long-term rentals

For rentals of 180 days or longer, we categorise them as long-term rentals. Our long-term rental customersinclude individual and corporate customers. We provide long-term rentals under individually negotiatedcontracts. Our long-term rentals meet the needs of individual and corporate customers who may wish to rent apassenger car on a long-term basis for leisure or business purposes. Terms of long-term rental contracts varybased on rental length and makes and models of passenger cars.

As at the Latest Practicable Date, we offered 125 passenger cars for long-term rentals, 101 of which arerented by a Singapore car sharing company. For more details, please refer to the paragraph headed ‘‘Customer –Passenger car rental contracts’’ in this section. For FY2016, FY2017, FY2018 and 1Q2019, our revenuegenerated from the Singapore car sharing company accounted for approximately 0.8%, 8.0%, 11.3% and 11.5%respectively, of our total revenue.

Our long-term rental rates typically include basic rental fees which are inclusive of cost of basic insurancecoverage and our administrative fees. We generally require our long-term rental customers to make an upfrontdeposit and pay rental fees in advance monthly. Each long-term rental customer’s payment plan, such as depositamount or installment frequency, varies based on our evaluation of their credit worthiness. The customeracceptance procedures of our long-term rental services rendered to individual customers are similar to those ofour short-term rental services.

For FY2016, FY2017, FY2018 and 1Q2019, our revenue generated from long-term rental servicesaccounted for approximately 2.6%, 10.2%, 12.5% and 13.0% respectively, of our total revenue.

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Supply and Export of Passenger Car Spare Parts, Accessories and Automotive Equipment

We supply passenger car spare parts and accessories (such as spark plug and navigator control unit) andautomotive equipment to customers in Singapore and overseas countries (i.e. Sri Lanka and Myanmar). Weengage a freight forwarder for exporting spare parts, accessories and automotive equipment out of Singapore. Weare the distributor of passenger car spare parts, accessories and automotive equipment of certain brands in SouthEast Asia. For FY2016, FY2017, FY2018 and 1Q2019, our revenue generated from supply and export ofpassenger car spare parts, accessories and automotive equipment accounted for approximately 3.7%, 2.1%, 7.1%and 7.2% respectively, of our total revenue.

OUR SERVICE CENTRES AND PAINT WORKSHOP

During the Track Record Period, we operated three service centres and one paint workshop in Singapore.Our three services centres were Kung Chong Service Centre (Headquarters), Serangoon Service Centre andUpper Thomson Service Centre. In light of the expiry of the tenancy of our Upper Thomson Service Centre andthe anticipated increase in demand, we relocated our Upper Thomson Service Centre to the Tagore ServiceCentre in late August 2019. The map below sets forth the locations of our service centres and the paint workshopduring the Track Record Period and as at the Latest Practicable Date.

TAGORE SERVICE CENTRE

(ceased operation in late August 2019)(ceased operation in late August 2019)(ceased operation in late August 2019) (commenced operation in late Angust 2019)(commenced operation in late Angust 2019)(commenced operation in late Angust 2019)

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For details of our relocation plan, please refer to the paragraph headed ‘‘Business strategies – Expandingour servicing capacity – Relocation of our Upper Thomson Service Centre’’ in this section.

All of our service centres and paint workshop are located in industry hubs for provision of after-marketautomotive services. Our Kung Chong Service Centre (Headquarters) is located at the heart of Singapore’sautomotive business area populated with luxury passenger cars and ultra-luxury supercars showrooms and servicecentres. Our Serangoon Service Centre is just behind Ang Mo Kio Autopoint, which is an industry hub for carrepair. Our Tagore Service Centre is near to Sin Ming Auto Hub, which is an automotive business focused areasurrounded by automotive service centres and suppliers of vehicle spare parts. Our paint workshop is located atAng Mo Kio Autopoint, which is an industry hub for car repair.

Our service centres are equipped with cutting-edge diagnostic equipment and facilities for provision of allafter-market automotive services except spray painting services. Our paint workshop is responsible for handlingall the spray painting job required. We provide after-market automotive services for a wide range of passengercars, including luxury passenger cars and ultra-luxury supercars.

The table below sets forth details of each of our service centres and paint workshop for the years andperiods indicated:

Kung ChongService Centre(Headquarters)

SerangoonService Centre

Upper ThomsonService Centre

Tagore ServiceCentre Paint workshop

Total(Note 1)

Address 6 Kung Chong

Road, Alexandra

Industrial Estate,

Singapore

159143

9A Serangoon

North Avenue 5,

Singapore

554500

551 Upper

Thomson Road,

Singapore

574415

452 Tagore

Industrial

Avenue,

Singapore

787823

Block 10 Ang

Mo Kio

Industrial Park

2A #04-14

Singapore

568047

Tenancy/licenceexpiry date

31 October 2021

(with an

option to renew

for a term of

three years)

29 February

2020 (with an

option to renew

for a term of

three years)

31 August 2019

(Note 2)

14 September

2021

(with an option

to renew for a

term of two

years)

31 January 2020

Approximate numberof units ofpassenger carswhich we providedafter-marketautomotive services(Note 3)

FY2016 6,600 4,800 4,100 N/A 700 15,600FY2017 11,300 9,200 4,700 N/A 700 25,200FY2018 10,900 7,700 4,200 N/A 540 22,8001Q2019 2,400 1,600 1,100 N/A 100 5,100Period from 1 April 2019 to

the Latest Practicable Date

5,200 4,800 2,600 100 300 12,700

Number of hoists As at 31 December 2016 15 14 8 N/A N/A 37As at 31 December 2017 15 14 8 N/A N/A 37As at 31 December 2018 15 14 8 N/A N/A 37As at 31 March 2019 15 14 8 N/A N/A 37As at Latest Practicable Date 15 14 N/A 10 N/A 39

Number ofdiagnosticequipment

As at 31 December 2016 15 11 11 N/A N/A 37As at 31 December 2017 15 11 11 N/A N/A 37As at 31 December 2018 16 11 10 N/A N/A 37As at 31 March 2019 16 11 10 N/A N/A 37As at Latest Practicable Date 16 11 N/A 10 N/A 37

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Kung ChongService Centre(Headquarters)

SerangoonService Centre

Upper ThomsonService Centre

Tagore ServiceCentre Paint workshop

Total(Note 1)

Number of technicians As at 31 December 2016 16 11 8 N/A 4 39As at 31 December 2017 21 14 7 N/A 3 45As at 31 December 2018 20 14 6 N/A 2 42As at 31 March 2019 19 15 5 N/A 2 41As at Latest Practicable Date 15 16 N/A 5 2 38

Notes:

1: All passenger cars serviced at our paint workshop during the Track Record Period also received after-market automotiveservices in our service centres. Therefore, for calculation of the total number of passenger cars served by our Group, thenumber of passenger cars serviced at our paint workshop was not added so as to avoid double counting.

2: On 8 July 2019, our Group entered into a supplemental agreement with the landlord of the premise to extend the term of thelicence agreement on a month-by-month basis while we relocate our machinery and equipment from our Upper ThomsonService Centre to the Tagore Service Centre. On the basis that the Tagore Service Centre was expected to commence operationby late August 2019, our Directors extended the licence agreement by one month until 31 August 2019.

3: The number of units are inclusive of repeat customers who have their passenger cars serviced at our service centres more thanonce.

The number of units of passenger cars which we provided after-market automotive services increased fromapproximately 15,600 in FY2016 to approximately 25,200 in FY2017 and subsequently decreased to 22,800 inFY2018. The number of units of passenger cars which we provided after-market automotive services in 1Q2019and for the period from 1 April 2019 to the Latest Practicable Date is approximately 5,100 and 12,700respectively.

The number of hoists and number of diagnostic equipment at our three service centres generally remainedstable as at 31 December 2016, 31 December 2017, 31 December 2018, 31 March 2019 and the LatestPracticable Date. No hoist or diagnostic equipment are required in our paint workshop.

The total number of technicians of our three service centres and paint workshop was 39, 45, 42, 41 and 38as at 31 December 2016, 31 December 2017, 31 December 2018, 31 March 2019 and the Latest Practicable Date,respectively, which was relatively stable. Our Directors consider such fluctuation in the number of technicians asnatural turnover and confirm that there is no material impact on our operations.

The major equipment which we own and use for our after-market automotive services business includepassenger car hoists and diagnostic equipment. All of our three service centres are equipped with cutting-edgediagnostic equipment and facilities. We update diagnostic equipment and the relevant software from time to timefor the newer car models as appropriate.

To our Directors’ best knowledge, the life span of our hoists and diagnostic equipment is around 10 yearsand five years respectively. With proper maintenance on our hoists and diagnostic equipment, it is expected thata longer life span could be achieved. As at the Latest Practicable Date, to our Directors’ best knowledge, ourhoists and our diagnostic equipment have been in operation for approximately one month to approximately fiveyears and approximately six months to approximately five years respectively. As advised by our Singapore legaladvisers, there is no regulatory requirement in Singapore in relation to the maintenance and replacement ofdiagnostic equipment used by our Group. As regard to the regulatory requirements in Singapore in relation to themaintenance and replacement of hoists, please refer to the paragraph headed ‘‘Regulatory Overview – Lawsrelating to the business of our Group – Workplace safety and health measures’’ in this prospectus.

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Our Group maintains our equipment and facilities from time to time. Our Group may replace agedequipment and facilities for wear and tear reason if the costs of maintenance exceed the costs of replacement.There is no fixed replacement cycle for our equipment and facilities. Our Group may replace our equipment andfacilities which have become obsolete. Our Group funds the costs for our replacement of equipment and facilitiesfrom internal resources if needed. During the Track Record Period, we did not experience any materialmechanical failure of any of our equipment and facilities.

CUSTOMERS

We have a large, rapidly growing and loyal customer base consisting of individual and corporatecustomers. Our customers include (i) automotive dealers; (ii) insurance companies; (iii) car service centres; (iv)car leasing companies; and (v) individuals or other corporations. The following table sets forth a breakdown ofour revenue based on the type of customers for the period indicated:

FY2016 FY2017 FY2018 1Q2019

Revenue

Percentageof totalrevenue Revenue



Percentageof totalrevenue

S$’000 % S$’000 % S$’000 % S$’000 %

Automotive dealers 4,891 29.9 2,795 15.0 1,168 6.5 273 6.3Insurance companies 0 N/A 1,106 5.9 1,510 8.4 304 7.0Car service centres 63 0.4 442 2.4 1,411 7.8 355 8.1Car leasing companies 875 5.4 685 3.7 380 2.1 22 0.5Individuals or other

corporations (Note) 10,506 64.3 13,613 73.0 13,516 75.2 3,403 78.1

Total 16,335 100 18,641 100 17,985 100 4,357 100.0

Note: Other corporations exclude corporations that are (i) automotive dealers; (ii) insurance companies; (iii) car leasing companiesand (iv) car service centres.

We are committed to deliver high quality customer services to our customers including owners of luxurypassenger cars and ultra-luxury supercars. We believe our high quality products and services and superiorcustomer service have enabled the rapid growth of our customer base and strong customer loyalty. Our sales,services and marketing initiatives are also targeted at owners of luxury passenger cars and ultra-luxury supercarsas we believe that these customers tend to require premier products and services and show great brand loyalty.We maintain records of our customers’ servicing profiles, including their maintenance and repair history, whichwe use to schedule calls and send service reminders. In addition, we have benefited from word-of-mouthrecommendations by the large number of customers who were pleased with our services. We intend to continueto improve our services to encourage more recommendations and referrals, which we believe is an effective andcost-efficient way to promote our business.

Passenger car owners may authorise us to facilitate an insurance claim when they bring in passenger carsinvolved in accidents for repair. Our Group will then handle the insurance claim with the relevant insurancecompanies on behalf of the passenger car owners. For the amount that the relevant insurance companies agreedto pay on behalf of the passenger car owners, we will issue invoices to the passenger car owners or directly toinsurance companies, if requested. In this circumstance, the revenue received by our Group is classified asrevenue derived from the passenger car owners instead of from the relevant insurance companies as theobligations of payment for our services rendered is on the passenger car owners. As for the outstanding amountwhich the relevant insurance companies do not agree to pay on behalf of the passenger car owners, we will issueinvoices to the passenger car owners. However, the revenue received by our Group for our after-marketautomotive services provided to the car owners under the motor warranty programme provided by the renownedinsurance company is still classified as revenue derived from that insurance company.

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Our top five customers during the Track Record Period are mainly companies in the automotive relatedindustry. For FY2016, FY2017, FY2018 and 1Q2019, sales to our top five customers accounted forapproximately 13.6%, 19.8%, 28.8% and 28.6% of our total revenue respectively, and sales to our largestcustomer accounted for approximately 5.3%, 8.0%, 11.3% and 11.5% respectively, of our total revenue duringthe same periods. All of our top five customers during the Track Record Period were Independent Third Parties.None of our Directors, their close associates or any Shareholder (which to the knowledge of our Directors ownedmore than 5% of the issued share capital of our Company) had any interest in any of our top five customersduring the Track Record Period. None of our top five customers was our supplier during the Track RecordPeriod.

The tables below set forth details of our top five customers during the Track Record Period:

FY2016

Rank Customer

Countries of

Origin

Principal business activities/

description

Main services

provided by

our Group

Approximate years

of business

relationship

with us

Typical credit

terms and

payment method

Revenue

recorded

Approximate

percentage to

the total

revenue of

our Group

S$’000 (%)

1 Customer A Singapore Passenger land transport (private

cars for hire with operator)

Vehicle repair services Four years Cash on delivery,

bank transfer

871 5.3

2 Customer B Sri Lanka Automobile engineering Supply of equipment

and spare parts

Four years Cash on delivery,

bank transfer

535 3.3

3 Customer C Singapore Wholesale of motor vehicles Vehicle repair services Five years 30 days, cheque 532 3.3

4 Customer D Singapore Retail sale of motor vehicles Vehicle repair services Five years 30 days, cheque 142 0.9

5 Customer E Singapore Car sharing company Vehicle for car rental

services

Three years Cash on delivery,

bank transfer

129 0.8

2,209 13.6

FY2017

Rank Customer

Countries of

Origin


description

Main services

provided by

our Group

Approximate years

of business

relationship

with us

Typical credit

terms and

payment method

Revenue

recorded

Approximate

percentage to

the total

revenue of

our Group

S$’000 (%)


services


bank transfer

1,488 8.0

2 Customer F Singapore General insurance Exclusive workshop

for vehicle repair

Five years 30 days, cheque 1,102 5.9




bank transfer

658 3.5

4 Customer I Singapore Automotive workshop Vehicle spare parts

and repair

consultancy services

One year 60 days, bank

transfer

351 1.9

5 Customer G Singapore Wholesale and retail sale

of motor vehicles

Supply of equipment

and spare parts

Four years 30 days, cheque 97 0.5

3,696 19.8

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FY2018

Rank Customer

Countries of

Origin


description

Main services

provided by

our Group

Approximate years

of business

relationship

with us

Typical credit

terms and

payment method

Revenue

recorded

Approximate

percentage to

the total

revenue of

our Group

S$’000 (%)


services


bank transfer

2,025 11.3


for vehicle repair

Five years 30 days, cheque 1,510 8.4

3 Customer J Singapore Automotive workshop Supply of equipment

and spare parts

One year 30 days, cheque 680 3.8

4 Customer I Singapore Automotive workshop Vehicle spare parts

and repair

consultancy services


transfer

635 3.5




bank transfer

329 1.8

5,179 28.8

1Q2019

Rank Customer

Countries of

Origin


description

Main services

provided by

our Group

Approximate years

of business

relationship

with us

Typical credit

terms and

payment method

Revenue

recorded

Approximate

percentage to

the total

revenue of

our Group

S$’000 (%)


services


bank transfer

499 11.5

2 Customer I Singapore Automotive workshop Supply of equipment

and spare parts


transfer

317 7.3


for vehicle repair

Five years 30 days, cheque 304 7.0

4 Customer K Singapore Chartered bus services Vehicle repair services Ten months 30 days, cheque 98 2.2

5 Customer L Singapore Passenger land transport (private


Vehicle repair services One year 30 days, cheque 25 0.6

Total 1,243 28.6

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Our Co-operation with Customer I

Customer I is an investment company incorporated in Singapore. It has a subsidiary which is incorporatedin Myanmar and engaged in the provision of after-market automotive services by operating an automotiveworkshop in Myanmar. Optima Werkz had previously provided car repair and maintenance services to one of theshareholders of Customer I, who is an Independent Third Party, before the incorporation of Customer I. As suchshareholder was satisfied with our services, Customer I approached us for developing after-market automotiveservices business in Myanmar.

After considering the potential growth of Myanmar market, we decided to acquire shares of Customer Ifrom its shareholders. On 6 July 2017, Optima Werkz acquired 250,000 shares in Customer I (representing 25%of the then issued share capital of Customer I) from its shareholders in consideration of S$2,500. Theconsideration was determined after taking into account of the fact that Customer I was a newly incorporatedcompany at that time and the support that Optima Werkz will provide to the business of its Myanmar subsidiary.On the same date, Customer I also entered into a service agreement with Optima Werkz pursuant to whichOptima Werkz would provide spare parts and arrange qualified staff to provide services at the workshop ownedby Customer I in Myanmar.

Due to the differences in opinions between the other shareholders of Customer I and us in respect of thebusiness operation of Customer I, we decided to cease to be the shareholder of Customer I. Accordingly, on29 December 2017, Optima Werkz sold all its shares in Customer I to an Independent Third Party inconsideration of USD2,500 and since then ceased to have any interest in Customer I. We do not have any past orpresent business relationship with the buyer of our shares. The consideration was determined after taking intoaccount of the costs of our investment and the reasonable return of such investment. Although we ceased to be ashareholder of Customer I, we still value our business relationship with Customer I and as a matter of goodfaith, entered into a service agreement with Customer I on 25 May 2018, pursuant to which we shall providespare parts and after-sale support and consultation services to Customer I. For details of the terms of the serviceagreement, please refer to the paragraph headed ‘‘Customers – Service agreement with Customer I’’ in thissection. Since Optima Werkz allowed Customer I to use its trademark prior to the disposal of its shares inCustomer I, as a transitional arrangement, Optima Werkz entered into a trademark licensing agreement dated25 May 2018 and a supplemental agreement dated 28 June 2019 with Customer I, pursuant to which, OptimaWerkz granted a non-exclusive licence to Customer I to use its trade name and its trademark in Myanmar solelyin connection with carrying out its business at the workshop in Myanmar for a period of 24 months from29 December 2017. For details of the terms of the trademark licensing agreement, please refer to the paragraphheaded ‘‘Customers – Trademark licencing agreement with Customer I’’ in this section. Given that (i) we willprovide after-sale support and consultation services to Customer I to ensure its services quality; (ii) our businessoperations are mainly based in Singapore; and (iii) the licence period only lasts for less than a year from theLatest Practicable Date, our Directors believe that it is unlikely that our Group will be exposed to reputationalrisk by granting Customer I the right to use our trade name and trademark in Myanmar. While it is notcustomary for our Group to enter into such service agreement and trademark licencing agreement, we enteredinto such agreements in order to maintain our business relationship with Customer I and to allow Customer I tohave a transitional period in using our trade name and trademark so as to minimise the adverse impact that maybring to the business operation of Customer I as a result of the selling of our equity interests in Customer I.Currently, our Group has no intention or plan and has not entered into any agreement to renew the said serviceagreement and trademark licencing agreement.

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Agreements with Customers

We typically do not enter into any long-term agreements with our customers except for the followingagreements:

Our Motor Warranties Transfer Agreement with Customer F

We have entered into the Motor Warranties Transfer Agreement with Customer F, major terms of which areas follows:

Term of agreement : From 30 November 2016 to the date of expiry of the last motor warrantyto be issued (both days inclusive)

Motor warranties to betaken up byCustomer F

: All motor warranty agreements sold by us up to and including31 December 2016 with an outstanding obligation

Transfer of premium : Optima Werkz shall transfer the premium it received under the motorwarranty programme it provided previously to Customer F in fiveinstalments, the last instalment will be paid in June 2019.

Adjustment on totalservice fees

: Customer F and our Group have agreed a target loss ratio which is statedin the Motor Warranties Transfer Agreement.

When the actual loss ratio (i.e. the ratio of the amount of total incurredclaims to the total net premium) is below the target loss ratio (i.e. a fixedloss ratio which both parties desire to achieve) for each batch of policiestransferred to Customer F under the Motor Warranties TransferAgreement, Customer F shall pay to us certain portion of the total netpremium which is calculated based on a pre-agreed formula stated in theMotor Warranties Transfer Agreement.

When the actual loss ratio is equal to or above the target loss ratio foreach batch of policies transferred to Customer F under the MotorWarranties Transfer Agreement, we shall pay to Customer F a fee whichis calculated based on a pre-agreed formula stated in the Motor WarrantiesTransfer Agreement.

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Exclusivity : During the exclusivity period (from 1 January 2017 to the last date ofexpiry of the motor warranties), we shall remain to be Customer F’sexclusive workshop to render all services or works for all motorwarranties sold in connection with this agreement and shall onlycollaborate with Customer F as the sole and exclusive insurer for themotor warranties covered in this agreement and shall not work with otherinsurers in respect of similar warranties or arrangements which purport tocover warranty repairs.

We provide inspection, maintenance and repair services to passenger carsand, among them, some are covered by (i) the motor warranty programmeof Customer F; or (ii) the motor insurance policies of Customer F or otherinsurance companies. The coverage under the motor warranty programmeand the motor insurance policy is different. The motor warrantyprogramme only covers the replacement of certain defective or damagedcar parts, such as air-con compressor, clutch hydraulics, front or rearwheel drive shafts, due to mechanical or electrical breakdowns that mayaffect the passenger cars during the warranty period. The motor insurancepolicies cover the passenger cars which are damaged as a result of anaccident. Accordingly, as advised by our Singapore legal advisers, we areonly restricted by the Exclusive Service Agreement and the MotorWarranties Transfer Agreement from collaborating with other insurancecompanies in Singapore to provide warranty repairs but we are notrestricted from providing inspection, maintenance and repair services topassenger cars that are covered by the motor insurance policies of otherinsurance companies.

Termination : Upon expiry of the term of the agreement or in the event that Customer Fdecides to withdraw the motor warranties from the market, or as directedto do so by the Monetary Authority of Singapore, upon giving ninecalendar months’ written notice to us.

Our Exclusive Service Agreement with Customer F – The motor warranty programme

We have entered into the Exclusive Service Agreement with Customer F, major terms of which are asfollows:

Term of agreement : Five years commencing from 1 January 2017 to 31 December 2022 (bothdays inclusive).

Our rights andobligations

: Providing the following major services to Customer F and/or car ownerswho participated in the motor warranty programme in accordance with therequired services level standards stated in the Exclusive ServiceAgreement:

(i) warranty pre-inspection;

(ii) maintenance and repair services;

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(iii) administration services such as processing work order and paymentprocessing; and

(iv) call centre and warranty helpline services such as representingCustomer F for policy related enquiries and arranging regular serviceappointments.

Adjustment on totalservice fees

: Customer F and our Group have agreed a target loss ratio which is statedin the Exclusive Service Agreement.

When the actual loss ratio (i.e. the ratio of the amount of total incurredclaims to the total net premium) is below the target loss ratio (i.e. a fixedloss ratio which both parties desire to achieve) for each batch of policiesunder the motor warranty programme, Customer F shall pay to us certainportion of the total net premium which is calculated based on a pre-agreedformula stated in the Exclusive Service Agreement.

The target loss ratio as stipulated in the Motor Warranties TransferAgreement is higher than the target loss ratio stipulated in the ExclusiveService Agreement because it was agreed that our Group shall share ahigher portion of the total net premium for the services provided to thecars covered by the motor warranty programme originated by our Group.

When the actual loss ratio is equal to or above the target loss ratio foreach batch of policies, we shall pay to Customer F a cost sharing feewhich is calculated based on a pre-agreed formula stated in the ExclusiveService Agreement.

Claims notificationand prior consent

: If it is discovered upon inspection that there is a defect in componentincluded under the warranty coverage, and the repair costs are below thelimit stated in the Exclusive Service Agreement with Customer F, wewould repair the component and issue invoice to charge Customer F forthe services rendered directly; if the repair costs are above the limit statedin the Exclusive Service Agreement, we would negotiate with Customer Ffor the repair costs and seek their consent before rendering repair servicesto the passenger cars.

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Exclusivity : During the exclusivity period (from 1 January 2017 to 31 December2022), we shall remain Customer F’s exclusive workshop to render allservices or works for all motor warranties sold under the motor warrantyprogramme and we shall only collaborate with Customer F as the sole andexclusive insurer for the motor warranties mentioned in the ExclusiveService Agreement and shall not work with other insurers in respect ofsimilar warranties or arrangements which purport to cover warrantyrepairs. The exclusivity period may be extended by mutual consent at anytime.

We provide inspection, maintenance and repair services to passenger carsand, among them, some are covered by (i) the motor warranty programmeof Customer F; or (ii) the motor insurance policies of Customer F or otherinsurance companies. The coverage under the motor warranty programmeand the motor insurance policy is different. The motor warrantyprogramme only covers the replacement of certain defective or damagedcar parts, such as air-con compressor, clutch hydraulics, front or rearwheel drive shafts, due to mechanical or electrical breakdowns that mayaffect the passenger cars during the warranty period. The motor insurancepolicies cover the passenger cars which are damaged as a result of anaccident. Accordingly, as advised by our Singapore legal advisers, we areonly restricted by the Exclusive Service Agreement and the MotorWarranties Transfer Agreement from collaborating with other insurancecompanies in Singapore to provide warranty repairs but we are notrestricted from providing inspection, maintenance and repair services topassenger cars that are covered by the motor insurance policies of otherinsurance companies.

Renewal : Three months before the expiry of the term, both parties will holddiscussions for the renewal of the Exclusive Service Agreement.

Termination : Upon expiry of the term of the Exclusive Service Agreement or in theevent that Customer F decides to withdraw the motor warranties from themarket, or as directed to do so by the Monetary Authority of Singapore,upon giving nine calendar months’ written notice to us.

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Agreements for preferred workshop and approved reporting centres

We have entered into an agreement for appointment of preferred workshop with Customer F and separateagreements for appointment of approved reporting centre with Customer F and another insurance company, themajor terms of the agreements are as follows:

Agreement for preferred workshopwith Customer F

Agreements for approved reportingcentres with Customer F and anotherinsurance company

Term of Agreement : From 24 November 2017 untiltermination by either party pursuantto the termination clause under theagreement

Agreement with Customer F: an initialterm of 12 months from 12 December2017, subject to renewal of successive12 months period

Agreement with another insurancecompany: an initial term of 12months from 1 January 2014, subjectto renewal of successive12 months period

Our obligations : • Assist the insured to file repairreport of non-injury motoraccident or the Singapore accidentstatement with General InsuranceAssociation of Singapore

• Submit estimated cost of repair toCustomer F

• Repair the insured passenger carsat an agreed fee with Customer F

• Give priority to the repair ofpassenger cars under the insurancecoverage of Customer F

• Assist in completing forms foraccident claims in an e-filingsystem of the General InsuranceAssociation of Singapore

• Photo-taking of the insuredpassenger car

Payment : Customer F shall settle all correctlypresented invoices within 30 days

N/A (Note)

Termination : The agreement may be terminated byeither party by giving 30 days’ noticein writing to the other party, withoutthe obligation by either party to giveany reasons

The agreement may be terminated byeither party by giving two weeks’notice in writing to the other party

Note: Although we do not receive any fees for acting as the approved reporting centre, our Directors believe that car owners arelikely to engage us to provide after-market automotive service after they have arranged to deliver their passenger cars to us foraccident reporting.

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Service agreement with Customer I

We have entered into a service agreement to provide spare parts and accessories, after-sale support andconsultation services to Customer I, who is an independent automotive workshop in Myanmar. Major terms ofthe service agreement are as follows:

Term of agreement : Three years commencing from 25 May 2018

Our rights and obligations : We shall supply spare parts and accessories to Customer I uponrequest.

At the written requests from Customer I, we shall arrange and sendone or more of our personnel to the workshop of Customer I toprovide after-sale support and consultation services.

Payment : For supply of spare parts and accessories, payment shall be based onthe prescribed rates as stipulated in the service agreement.

For after-sale support and consultation services, payment shall bemade in advance pursuant to the prescribed rates as stipulated in theservice agreement.

Termination : Upon the expiry of the agreement or in any of the followingevent(s):

(i) by mutual agreement;

(ii) by any party giving prior written notice to the other party basedon a breach of condition of the service agreement, unless thebreach of condition is rectified within the 30 days period; or

(iii) in the event any party to the service agreement becomesinsolvent or being under liquidation or any related actionconnected with insolvency.

Trademark licencing agreement with Customer I

We have entered into a trademark licencing agreement with Customer I, who is an independent automotiveworkshop in Myanmar.

Major terms of the trademark licencing agreement are as follows:

Term of agreement : 24 months commencing from 29 December 2017

Our rights and obligations : We shall grant to Customer I a non-exclusive and non-assignablelicence to use the conventional trademark and tradename ‘‘Optima Werkz’’ in Myanmar solely in connection withcarrying out the business of Customer I at its workshop in Myanmar.

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Payment : Customer I shall pay to us a lump sum fee of S$15,000 on the lastday of the trademark licencing agreement. The fee was set based onour negotiation with Customer I and after taking into considerationof the expected business volume with Customer I. The fee shall bewaived if Customer I purchases goods from us in an amountexceeding S$180,000 during the term of the trademark licensingagreement.

Termination : Upon the expiry of the agreement or in any of the followingevent(s):

(i) if Customer I is in breach of any of its obligations under thetrademark licencing agreement, and if the breach is capable ofremedy, Customer I does not remedy the breach within 20 daysfrom receipt of a notice specifying the breach from us;

(ii) we are entitled to terminate the trademark licencing agreementat any time without cause with 30 days prior written notice toCustomer I; or

(iii) the agreement shall terminate automatically upon the winding-up, dissolution or any analogous proceedings instituted againstCustomer I.

Passenger car rental contracts

We provide long-term passenger car rental services to individuals and Customer E. Major terms of thesepassenger car rental contracts are as follows:

Long-term rental contracts withCustomer E

Long-term rental contracts withindividuals

Term of agreement : 72 months or 84 months (Note) 11 months to 60 months

Deposits : No deposit to three months’ rental One month’s rental to three months’ rental

Payment term : Monthly rental will be due on the firstweek of each month or Customer E willpay 60% of the total bill on the firstcalendar day of each month and the40% of the remaining bill will be givena grace period of 15 days.

Monthly rental will be due on the firstweek of each month.

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Long-term rental contracts withCustomer E

Long-term rental contracts withindividuals

Our obligations : We shall be responsible for the followingmatters:

(i) pay for the road tax;

(ii) provide 365 days, 24 hoursrecovery service hotline;

(iii) perform inspection, maintenanceand repair services due to normalwear and tear to the passenger cars;

(iv) ensure the passenger cars are in asafe and drivable condition; and

(v) ensure the passenger cars areproperly insured.

We shall be responsible for the followingmatters:

(i) pay for the road tax;

(ii) provide 365 days, 24 hoursrecovery service hotline;

(iii) perform inspection, maintenanceand repair services due to normalwear and tear to the passenger cars;and

(iv) ensure the passenger cars areproperly insured.

Customer obligations : • Customer E shall be responsible forall penalties related to traffic and/orparking offences.

• In case of car accident, Customer Eis responsible for the repair costsup to the amount stipulated in theinsurance policy taken out by ourGroup in respect of the car.

• Customer shall be responsible forall penalties related to traffic and/orparking offences.

• In case of car accident, customer isresponsible for the repair costs upto the amount stipulated in theinsurance policy taken out by ourGroup in respect of the car.

Termination : Upon expiry of contract, or 30 calendardays written notice. A 50% penaltyshall be imposed on the remainingmonths till the end of the respectivecontract periods for early termination.

Upon expiry of contract, or 30 calendardays written notice. A 50% penaltyshall be imposed on the remainingmonths till the end of the respectivecontract periods for early termination.

Note: As at 31 March 2019, among the 101 units of long-term rental passenger cars that were rented out to Customer E, 75 units and26 units have remaining rental periods of 40 to 50 months and 51 to 60 months, respectively.

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Our Agreement with Customer B

We have secured a licence agreement with Customer B who is an automotive and mechanical workshop inSri Lanka. Major terms of the agreement are as follows:

Term of agreement : 10 years commencing on 20 January 2016. Customer B has an option torenew for a further period of ten years.

Products and services : We shall:

(i) sell two sets of hybrid battery diagnostic equipment and act as theauthorised dealer to sell the relevant software to Customer B;

(ii) provide an initial start-up training class to Customer B and supportthrough online system to Customer B;

(iii) grant licence to Customer B to use the software exclusively in SriLanka; and

(iv) offer Customer B the right to purchase from us products and servicesin support of the use of the equipment and the software.

Payment term : An initial fee paid in three installments and subsequent loyalty fee paidmonthly to continue using the software within Sri Lanka.

Warranty : One-year product warranties are provided by the original manufacturer ofthe equipment.

Termination : Upon expiry of the term or either party may terminate the agreement byone of the following methods:

(i) by giving 210 days prior written notice to the other party based on amaterial breach by the other party, unless the material breach isrectified within the 210 days period; or

(ii) if the other party is involved in a termination event as defined in theagreement, either party may terminate the agreement immediately.

Effect of Termination Upon termination of the agreement, among others,

(i) Customer B’s right to purchase from us the products and services insupport of the equipment and the software and to engage us for ourtechnical support services will terminate; and

(ii) Customer B will have the right to continue the use of the software solong as it continues to pay all on-going payments as required underthe agreement.

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Our Agreement with Customer J

We have secured a licence agreement with Customer J who is an automotive and mechanical workshop inSingapore. Major terms of the agreement are as follows:

Term of agreement : 15 years commencing on 20 December 2018

Products and services : We shall:

(i) sell one set of hybrid battery diagnostic equipment and act asthe authorised dealer to sell the relevant software to CustomerJ;

(ii) provide an initial start-up training class to Customer J andsupport through online system to Customer J;

(iii) grant a license to Customer J to use the software exclusively inSingapore; and

(iv) offer Customer J the right to purchase from us products andservices in support of the use of the equipment and thesoftware.

Payment term : An initial fee paid in two installments and subsequently loyalty feepaid monthly to continue using the software within Singapore

Termination : Upon expiry of the term or either party may terminate the agreementby one of the following methods:

(i) by giving 180 days prior written notice to the other party basedon a material breach by the other party, unless the materialbreach is rectified within 180 days period; or

(ii) if the other party is involved in a termination event as definedin the agreement, either party may terminate the agreementimmediately.

Effect of termination : Upon termination of the agreement, among others,

(i) Customer J’s rights to purchase from us the products in supportof the equipment and the software and to engage us for ourtechnical support shall terminate; and

(ii) Customer J will have the right to continue the use of thesoftware so long as it continues to pay all on-going paymentsas required under the agreement.

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Pricing policy, payment terms and credit terms

Our Group maintains a master price list for most of our services and products offerings. Our after-marketautomotive services are generally charged based on the labour costs and the spare parts and accessories used (ifapplicable). The personnel assigned to each job are based on their expertise and experience and the nature andcomplexity of the particular job. The cost of spare parts and accessories used is determined with reference to thecost plus pre-determined marked up or a pre-approved internal price list.

For after-market automotive services, payment is made in full on delivery by way of cash, cheque, debitcard or credit card. For after-market automotive services provided to (i) passenger cars of our car dealercustomers; (ii) passenger cars which were insured by insurance companies and covered by a valid insurancepolicy; (iii) passenger cars from car leasing companies; and (iv) car service centres, we are directly reimbursedby these companies. These companies are typically required to pay us within 30 days to 90 days after we submitthe invoice.

During the Track Record Period, we have made provisions and wrote off bad debts for our tradereceivables. For further details, please refer to the paragraph headed ‘‘Financial Information – Discussion ofselected components of consolidated statements of financial position – Trade and other receivables’’ in thisprospectus.

For our car rental services, we charge our customers based on the standard pricing rate of the rental vehicleand number of rental days. Short-term rental customers are required to pay basic rental in advance by debit card,credit card or cash prior to picking up passenger car. Long-term customers are required to make an upfrontdeposit and pay rental fees in advance by monthly installments.

For our sale of passenger car spare parts and accessories, we charge our customers based on cost price pluspre-determined marked up or a pre-approved internal price list. Our customers are typically required to pay uswithin 30 days after we submit the invoice.

Seasonality

Demand for our services in the first quarter of the year is usually lower because of the number of holidays,such as New Year and Chinese New Year in the first three months of the year. Our customers typically broughttheir cars to our service centres for our after-market automotive services before or after the festive season.

Marketing

Although we do not maintain a sizeable marketing team or devote substantial resources in directadvertising campaigns, our Directors believe that enhancing the quality of service and maintaining a goodrelationship with our customers is the way for building up our reputation. Since most of our business is obtainedfrom repeat customers, we consider our quality of services plays an important part when repeat customersdecided to engage us or to refer our services to others.

We also promote our brand image through various means of methods. Since our incorporation, we havebeen promoting our brand image and associating our brand image with luxury passenger cars and ultra-luxurysupercars. We sponsored races held in Singapore, placed advertisement on car magazine, organised social mediaevents for supercar club, e.g. BMW club and organised events for new product launches. For FY2016, FY2017,FY2018 and 1Q2019, we recorded marketing and advertising expenses of approximately S$0.2 million, S$0.2million, S$78,000 and S$69,000 respectively.

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SUPPLIERS AND PROCUREMENT

Suppliers

During the Track Record Period, our suppliers were (i) suppliers of passenger car spare parts; (ii) suppliersof accessories; and (iii) suppliers of passenger car consumables. The following table sets forth a breakdown ofour amount of purchases based on the type of suppliers for the years indicated:

FY2016 FY2017 FY2018 1Q2019

Amount ofpurchase

Percentageof total

amount ofpurchase

Amount ofpurchase

Percentageof total

amount ofpurchase

Amount ofpurchase

Percentageof total

amount ofpurchase

Amount ofpurchase

Percentageof total

amount ofpurchase

S$’000 % S$’000 % S$’000 % S$’000 %

Suppliers of spareparts 5,378 77.1 5,279 78.1 3,851 79.9 951 80.0

Suppliers ofaccessories 849 12.1 523 7.7 371 7.7 89 7.5

Suppliers ofconsumables 752 10.8 962 14.2 595 12.4 148 12.5

Total 6,979 100.0 6,764 100.0 4,817 100.0 1,188 100.0

Our Group has stringent procedures in the selection of spare parts, accessories and consumables suppliers.We maintain a list of approved suppliers that are mainly located in Singapore. They are selected based on theproduct quality, service track record, pricing and timeliness of delivery. We generally procure our spare parts,accessories and consumables from our list of approved suppliers and, in order to reduce our dependence andreliance on any one supplier, we generally maintain more than one supplier for each of our spare parts,accessories and consumables segment.

Our top five suppliers during the Track Record Period are mainly suppliers of passenger car spare parts andpassenger car consumables. For FY2016, FY2017, FY2018 and 1Q2019, the amount of purchases from our topfive suppliers accounted for approximately 33.2%, 41.9%, 42.3% and 35.9% of our total amount of purchasesrespectively, and the amount of purchases from our largest supplier accounted for approximately 9.5%, 12.8%,14.6% and 17.0% respectively, of our total amount of purchases during the same periods. All of our top fivesuppliers during the Track Record Period were Independent Third Parties. None of our Directors, their closeassociates or any Shareholder (which to the knowledge of our Directors owned more than 5% of the issued sharecapital of our Company) had any interest in any of our top five suppliers during the Track Record Period. Savefor Supplier E, none of our top five suppliers was our customer during the Track Record Period. Supplier E,which is principally engaged in retail sale of spare parts and accessories for motor vehicles in Singapore, hadmade two ad-hoc purchases of spare parts from our Group in 2016 due to its urgent requirement. The total salesto Supplier E amounted to S$3,852 with a gross profit margin of 22.2%. Our Directors also confirm that theproducts purchased from Supplier E during the Track Record Period were not the same as the products sold byour Group to Supplier E. Our Directors further confirm that the purchases from Supplier E and our sales toSupplier E were handled by two different independent departments and that these transactions were neither inter-connected nor inter-conditional with each other.

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The tables below set forth details of our top five suppliers during the Track Record Period:

FY2016

Rank Supplier

Countries of

Origin


description

Key products

supplied to

our Group

Approximate years

of business

relationship

with us

Typical credit

terms and

payment method

Amount of

purchases

Approximate

percentage to

the total

purchases of

our Group

S$’000 (%)

1 Supplier A Singapore Retail sale of spare parts and

accessories for motor vehicles

Vehicle spare parts Five years 30 days, cheque 662 9.5

2 Supplier B Singapore Wholesale of consumables

for motor vehicles

Engine lubricants and

oil


3 Supplier C Singapore Retail sale of spare parts and


Vehicle spare parts Four years 60 days, cheque 491 7.0

4 Supplier D Singapore Wholesale of spare parts and



5 Supplier E Singapore Retail sale of spare parts and



Total 2,321 33.2

FY2017

Rank Supplier

Countries of

Origin


description

Key products

supplied to

our Group

Approximate years

of business

relationship

with us

Typical credit

terms and

payment method

Amount of

purchases

Approximate

percentage to

the total

purchases of

our Group

S$’000 (%)




2 Supplier B Singapore Wholesale of consumables for

motor vehicles


oil





4 Supplier F Singapore General wholesale trade Vehicle spare parts Four years 30 days, cheque 339 5.0

5 Supplier G Singapore General wholesale trade Vehicle spare parts Four years 30 days, cheque 323 4.7

Total 2,862 41.9

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FY2018

Rank Supplier

Countries of

Origin


description

Key products

supplied to

our Group

Approximate years

of business

relationship

with us

Typical credit

terms and

payment method

Amount of

purchases

Approximate

percentage to

the total

purchases of

our Group

S$’000 (%)






motor vehicles


oil





5 Supplier H Singapore Retail sale of spare parts and


Vehicle spare parts Four years Cash on delivery,

cheque

239 4.8

Total 2,108 42.3

1Q2019

Rank Supplier

Countries of

Origin


description

Key products

supplied to

our Group

Approximate years

of business

relationship

with us

Typical credit

terms and

payment method

Amount of

purchases

Approximate

percentage to

the total

purchases of

our Group

S$’000 (%)


accessories of motor vehicles



accessories of motor vehicles




motor vehicles


oil


5 Supplier J Singapore Wholesale of consumables for

motor vehicles

Lubricants, chemical

and related products

Two years 30 days, cheque 51 4.0

Total 458 35.9

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Suppliers who were our Customers

During the Track Record Period, to the best knowledge and belief of our Directors, 22 of our supplierswere also our customers. Sales to these 22 entities were minimal and accounted for approximately 0.8%, 0.9%,0.2% and 0.5% of our total revenue for the FY2016, FY2017, FY2018 and 1Q2019, respectively. The amount ofpurchases from these entities attributed to approximately 17.8%, 15.3%, 12.0% and 15.0%, respectively, of ourtotal purchases for FY2016, FY2017, FY2018 and 1Q2019. None of these 22 entities are our top five customers.

To the best knowledge and belief of our Directors, these entities and their ultimate beneficial owners areIndependent Third Parties. These suppliers were also our customers mainly because they either sent theirpassenger cars to our service centres for inspection, maintenance or repair or that they had made ad-hoc purchaseof passenger car spare parts or accessories from us during the Track Record Period. These ad-hoc salestransactions were carried out on arm’s length basis. Our sales to them and our purchase from them were handledby two different independent departments. Based on their historical record and credit, the credit terms given tothese 22 entities were also in line with the credit period we granted to our other customers. Negotiations of theterms of sales to and purchases from these 22 entities were also conducted independently and that thesetransactions were neither inter-connected nor inter-conditional with each other.

Purchase of rental passenger cars from car dealers

We purchased most of our rental passenger cars directly from car dealers for the provision of our car rentalservices. For FY2016, FY2017, FY2018 and 1Q2019, we invested approximately S$4.6 million, S$7.4 million,nil and nil to purchase a total of 124 passenger cars for our car rental business, respectively. Despite the largeamount of purchase from these car dealers, we do not consider them as our suppliers because those acquisitionswere capital expenditure in nature and we do not carry out such purchase on a daily basis as our principalbusiness is the provision of after-market automotive services. Had we included those capital expenditure,purchase of rental passenger cars would account for 38.7%, 51.6%, nil and nil for our total amount of purchases(including rental passenger car purchased) for FY2016, FY2017, FY2018 and 1Q2019, respectively. During theTrack Record Period, to the best knowledge and belief of our Directors, all these car dealers were also ourcustomers. Sales to these car dealers accounted for 2.0%, 1.2%, 0.5% and 0.3% of our total revenue for FY2016,FY2017, FY2018 and 1Q2019, respectively.

To the best knowledge and belief of our Directors, these car dealers and their ultimate beneficial ownersare Independent Third Parties. The purchases from these car dealers were carried out on arm’s length basis.Based on their historical record and credit, the credit terms given to these car dealers were also in line with thecredit period we granted to our other customers. Negotiations of the terms of sales to and purchases from thesecar dealers were also conducted independently and that these transactions were neither inter-connected nor inter-conditional with each other.

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Agreements with Suppliers

We typically do not enter into any long-term agreements with our suppliers except for Supplier A, SupplierB, Supplier F, Supplier G, Supplier I and one other supplier. Our purchase agreements with Supplier B and itsrelated company and Supplier F entitle us to receive sponsorships in the form of cash and/or equipment when wepurchase a certain quota of products from the respective suppliers within a specified timeframe. If we fail toachieve the purchase quota within the specified timeframe, we will not be able to enjoy the sponsorships fromthese suppliers. The sponsorships provided by our suppliers during the Track Record Period were not materialcompared to the amount of purchases we made from them during the Track Record Period. There was also nomaterial impact on our inventory balance as the purchase made from these suppliers were mainly fast movinginventories (e.g. lubricant and air filters). Our Directors confirm that up to the Latest Practicable Date, we havebeen able to meet the specified purchase quota and have received the sponsorships from these suppliers. Asummary of these agreements is set out below.

Exclusive lubricants supply agreements with Supplier B and its related company

By entering into agreement with Supplier B and its related company, we obtain sponsorships from SupplierB’s related company in purchasing our diagnostic tools and we can also enjoy preferential prices for lubricantsand greases subject to a minimum annual purchase quantity. We have entered into three exclusive lubricantssupply agreements with Supplier B and its related company, major terms of which are as follows:

Term of agreement : Six years commencing from 25 June 2012 and 2 November 2015 and fiveyears commencing from 1 October 2013

Our obligation : We shall purchase the minimum quota of products stated in the agreementevery month during the term of the agreement

Payment term : We shall pay within a credit period of thirty days

Sponsorship fromSupplier B’s relatedcompany

: Supplier B’s related company shall sponsor equipment and tools stated inthe agreement to us

Automotive spare parts purchase agreement with Supplier F

We have entered into a purchase agreement with Supplier F, who is in the business of supplyingautomotive spare parts in Singapore. By entering agreement with Supplier F, we can obtain sponsorships fromSupplier F when we purchase a certain quota of spare parts during the term of the agreement. The major terms ofthe agreement are as follows:

Term of agreement : Three years commencing from 1 March 2016

Our obligation : We shall purchase the quota of spare parts stated in the agreement duringthe term of the agreement

Sponsorship fromSupplier F

: Supplier F shall sponsor S$30,000 and banners to us

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Agreement with Supplier I

We have secured an agreement to resell hybrid battery diagnostic equipment of Supplier I exclusively inAsia-Pacific region and non-exclusively internationally with Supplier I, who is in the business of automotivetechnology research and development in the United States of America. Major terms of the agreement are asfollows:

Term of agreement : All licence granted under the agreement will be for an initial term of 20years commencing from 30 September 2015 and shall be renewedautomatically each year after the initial term is expired.

Appointment ofreseller

: We shall be appointed as a master franchisor or licensor and the exclusivereseller in the Asia-Pacific region and the non-exclusive resellerinternationally for hybrid battery diagnostic equipment of Supplier I.

Products and services : We shall purchase hybrid battery diagnostic equipment of Supplier I forresale to our clients.

Supplier I further granted a licence to our Group to use the relevantsoftware relating to the operation of the hybrid battery diagnosticequipment.

Purchase order : We shall provide Supplier I with a purchase order in writing with thenumber of equipment to be purchased and the training services required.

Payment term : Payment for each order of equipment shall be due and payable at the timea purchase order is submitted. Payment will not be dependent on ourreceipt of payment from our customers for the resale of equipment.

Warranties : Supplier I shall provide warranties on the equipment sold to us and ourcustomers under the condition that our customer has undertaken the initialstart-up training provided by Supplier I.

Training : Supplier I shall provide the initial start-up training to our customers.

Servicing andtechnical support

: Supplier I shall provide technical support and equipment servicing to ourcustomers.

Termination : Upon expiry of the term or either party may terminate the agreement byone of the following methods:

(i) by giving 180 days prior written notice to the other party based on amaterial breach by the other party, unless the material breach isrectified within the 180 days period; or

(ii) if a party is involved in a termination event as defined in theagreement, the other party may terminate the agreement immediately.

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Agreements with Supplier A, Supplier G and one other supplier

We have entered into agreements with these three suppliers pursuant to which certain discount will begiven to us for products we purchased from them. Major terms of these agreements are as follows:

Term of agreement : Five years or an indefinite term.

Discount : Optima Werkz will receive a discount immediately off each invoice or onthe following month by way of a credit note.

Minimum purchaseamount

: Some of the agreements provide a minimum purchase amount before wecould enjoy the discount.

Maximum discountamount

: One agreement states that the maximum discount amount is S$250,000.

Termination : For the agreement with a term of five year, upon expiry of the term offive year or when the discount amount reaches the maximum ofS$250,000.

Subcontractors

We do not subcontract our after-market services to subcontractors. All of our after-market automotiveservices rendered to our customers are conducted by our workshop staff and technicians in our service centresand paint workshop.

Procurement

We place orders directly with our suppliers. Our major supplies are spare parts, accessories andconsumables which are required for rendering our after-market automotive services. The purchase of supplies isdetermined and adjusted by taking into account our current inventories, expected customer demands, andprojected sales trends. We aim at optimising our inventories and maximising our sales and profitability, and atthe same time maintaining our good relationship with our suppliers. We will also purchase diagnostic equipmentand rental cars from time to time depending on our operation needs.

During the Track Record Period, we had not encountered any material shortage or material difficulties inprocurement and there was no significant delay in delivery of supplies from our suppliers which causes materialdisruption or delay to our work.

Our credit terms from suppliers typically involve a credit period of 30 days to 60 days. Most of ourpurchases are from Singapore and our procurements are mainly payable in Singapore dollars. We pay the amountof purchases by cash, cheque and bank transfers. Prices of our supplies generally vary based on the prevailingmarket prices. The prevailing market prices can be affected by market demand and supply and general economicconditions. We generally adopt a cost-plus method to fix the price of the spare parts and accessories supplied toour customers. Accordingly, any fluctuation in cost of materials are generally borne by our customers.

INVENTORY MANAGEMENT

Our inventory includes passenger car spare parts, accessories and consumables which are required forrendering our after-market automotive services. These inventories are generally not subject to stock obsolescencedue to its durable nature.

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We closely monitor our inventory to achieve a balance of cost efficiency, quality control and timelydistribution. We aim at maintaining optimal inventory levels of spare parts, accessories and consumables to meetcustomer demands and managing our working capital requirements to finance our inventory. As we provideafter-market automotive services to all types of passenger cars, the nature of our business requires us to havestocks of different passenger car spare parts and accessories for different makes and models to ensure that we areable to provide after-market automotive services to our customers in a timely manner. Accordingly, we generallykeep a small quantity of different passenger car spare parts and accessories for most makes and models as safetystock. For more popular makes and models or purchase from overseas suppliers, we may make bulk purchase inorder to lower our inventory costs per unit.

We monitor our inventory on a group level with a centralised SAP system. We monitor our inventory levelsregularly by conducting a physical check with the assistance of our centralised SAP system which provides uswith real-time inventory levels of different materials. Inventory guidelines for our materials have been set by ourchief operating officer. This information will be reviewed by our senior management to ensure that our servicecentres are appropriately stocked with inventory.

Our average inventory turnover days was approximately 60.0 days, 77.3 days, 83.7 days and 77.4 days as at31 December 2016, 31 December 2017, 31 December 2018 and 31 March 2019, respectively. The increase in ouraverage inventory turnover days from approximately 60.0 days as at 31 December 2016 to approximately 77.3days as at 31 December 2017 was primarily due to the increase in the variety of spare parts that we have tostock up to minimise our lead servicing time. Our average turnover days increased from approximately 77.3 daysas at 31 December 2017 to approximately 83.7 days as at 31 December 2018 was mainly due to the decrease inour cost of materials in FY2018. Our average inventory turnover days decreased to 77.4 days as at 31 March2019. For further details, please refer to the paragraph headed ‘‘Financial Information – Discussion of selectedcomponents of consolidated statements of financial position – Inventories’’ in this prospectus.

QUALITY CONTROL

We have a good track record and reputation in providing high quality after-market automotive services andcar rental services in Singapore. For after-market automotive services, our service advisors will ensure that (i)our customers’ issues with the passenger cars are correctly identified; (ii) our customers’ requirements are fullyaddressed and the service required including the replacement of spare parts and accessories are properlyprovided; and (iii) testing is conducted. Our workshop supervisors conduct quality control inspections before thehandover of the passenger car to our customers. For car rental services, our car rental executives will ensure thatthe rental passenger cars are in good condition before the handover of the passenger car to our customers. Ourassistant inventory manager is responsible for overall control on quality of our supply of passenger car spareparts, accessories and consumables. Sample checks on the passenger car spare parts, accessories and automotiveequipment sold would be conducted by our assistant inventory manager before the sale. As to our purchases fromour suppliers, upon receipt of the supplies, we will check that the supplies are of the right specifications and freefrom defects. Defective supplies shall be returned to our suppliers.

PRODUCT WARRANTY

For after-market automotive services that we perform, we provide product warranty on new spare partspurchased and installed by us for a period of up to one year or 30,000 kilometres driven, except wear and tear.We also provide product warranty on reconditioned spare parts purchased and installed by us for a period of upto six months or 10,000 kilometres driven, except wear and tear. Within the product warranty period, customerscan bring the passenger car for inspection if there is any problem with the spare parts installed by us and we willconduct inspection and repair or replace the spare parts if required. During the Track Record Period, productwarranty claims made by our customers were of an immaterial nature. Accordingly, no provision has been madewith respect to such warranty claims.

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COMPLAINT MANAGEMENT

We treat customer complaints seriously and we note the importance of providing high quality services toour customers. We have internal procedures to ensure that complaints from customers are handled appropriatelyand promptly. Our customers may lodge their complaints by calling our customer service hotline or filing in ourcomplaint forms at our service centres.

Upon receipt of the complaint, our service advisors will handle it. If our service advisors are unable toresolve the complaints, they are required to report to the chief operating officer for follow up actions. Weendeavour to resolve the complaints in an appropriate and timely manner. We record the details of complaintsfrom our customers and all our follow up actions.

During the Track Record Period and up to the Latest Practicable Date, we did not receive any materialcomplaints including any material complaints relating to the quality of our services rendered or significant delayin our services from our customers. We arrange training for our customer service staff and service advisors oncomplaint management skills, communication skills and our complaint management procedures. Our chiefoperating officer is responsible for overall complaint management.

INFORMATION TECHNOLOGY

We monitor our operations through a centralised SAP system. Our SAP system is able to provide us withreal-time information regarding our operations, for example, we can monitor our inventory levels regularly byconducting a physical check with the assistance of our centralised SAP system, thus enabling us to establish acentralised and integrated management system. It also supports our decision-making processes. In addition, thesystem allows us to monitor our operations closely, coordinate the resources of our Group to achieve operationalefficiencies and improve our business planning, human resource allocation, management of inventory andworking capital flow, which in turns strengthen our operational efficiency, revenue and profitability.

Our SAP system incorporates an advanced customer relationship management system. The system helps uscollect and analyse customer information. With the assistance of our SAP system, we have established acomprehensive database across key areas of our businesses. For example, our information technology systemcollects information about our existing customers, including records of services rendered. This informationallows our service advisor and customer service officer to better understand the needs of our customers andenables us to provide personalised communication and services to them.

INTELLECTUAL PROPERTIES

As at the Latest Practicable Date, we were the registrant of one domain name, namely, http://www.ow.sg,which is material to our business.

We have also obtained registration of some of our trademarks in Singapore, Hong Kong, China, Indonesiaand Myanmar, which is material to our business. In order to further protect our intellectual property rights aswell as our reputation, we have also applied for the registration of our other trademarks in Bangladesh,Cambodia, Indonesia, Japan, Malaysia, Sri Lanka, Thailand and Vietnam. All of these applications areundergoing examination by the relevant authorities as at the Latest Practicable Date. For further information onintellectual property rights which are material to our business, please refer to the paragraph headed ‘‘2. Furtherinformation about our business – 2.2. Intellectual property rights of our Group’’ in Appendix IV to thisprospectus.

Save for the trademarks and domain name disclosed in this prospectus, our business and profitability arenot materially dependent on any trademark, patent, domain name or other intellectual property.

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As at the Latest Practicable Date, we were not aware of any infringement (a) by us of any intellectualproperty rights owned by any third parties; or (b) by any third party of any intellectual property rights owned byus. During the Track Record Period, there had not been any pending or threatened claim made against us, norhave there been any claim made by us against third parties, with respect to the infringement of intellectualproperty rights owned by us or third parties.

EMPLOYEES

Our dedicated employees are critical to our success. Accordingly, we allocate resources for training anddevelopment for all our employees. We offer attractive remuneration packages, including discretionary bonusesand allowances. Our management team has extensive expertise and experience in the after-market automotiveservices industry in Singapore. Members of our management team have remained relatively stable since ourinception. Currently, our employees are not members of any labour union.

The table below sets forth the number of our employees as at 31 December 2016, 31 December 2017,31 December 2018 and 31 March 2019 and the Latest Practicable Date:

As at31 December

2016

As at31 December

2017

As at31 December

2018

As at31 March

2019

As at theLatest

PracticableDate

Number of employees 96 99 106 105 99

All of our employees are located in Singapore. The table below sets forth the total number of ouremployees by function as at the Latest Practicable Date:

Job functionNo. of

employees

Administration and finance 22General operations 22Management 6Workshop staff 49

Total 99

We maintain good relationship with our employees. During the Track Record Period, we had notexperienced any significant labour disputes, strikes or work stoppages and had not experienced any significantdifficulties in recruiting or retaining our qualified staff.

As at the Latest Practicable Date, our Group had a total workforce of 99 employees, 43 of which areforeign employees which include:

• 27 work permit holders;

• 11 S pass holders; and

• 5 employment pass holders.

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As advised by our Singapore legal advisers, the foregoing foreign employees have obtained the relevantwork permit/S Pass/employment pass as required under the Employment of Foreign Manpower Act (Chapter 91Aof the Laws of Singapore). For more details, please refer to the paragraph headed ‘‘Regulatory Overview – Lawsrelating to the business of our Group – Employment of foreign workers’’ in this prospectus.

Hiring

We take into account factors such as our development strategies, expansion plans, industry trends and thethen labour market environment when hiring and we will have internal meetings to discuss about the criteriarequired for the position when we make hiring decisions. We hire potential candidates by referrals from ourstaff, through agents or by publishing advertisements on newspapers.

Training and Development

We place significant emphasis on the quality of services provided by our staff. We therefore put substantialresources on staff development by providing our staff with on-the-job training and actively encourage thecontinuing development of our employees by regularly arranging training sessions to refresh and upgrade theirskills and knowledge as well as to gain a better understanding and receive regular updates on regulations andrequirements of our customers.

The topics of our training include customer service skills, diagnostic software updates and spare parts andequipment knowledge. Further, we have a diversified portfolio of different makes and models of passenger carsto which we provide our after-market automotive services. This provides opportunities for our staff to work withdifferent makes and models of passenger cars.

We also ensure that our staff members would receive appropriate training to safeguard work-place safetyprocedures. We have induction safety training and encourage our staff to undergo continuous safety training.

Remuneration and benefits of employees

Our remuneration package offers our employees discretionary bonuses and allowances. In general, wedetermine employee salaries based on, among others, knowledge, accountability and their individual competency.We have designed an annual review system to assess the performance of our employees, which forms the basisof our decisions with respect to salary raises, bonuses and promotions of our employees. We participate in theCentral Provident Fund prescribed by the Central Provident Fund Act (Chapter 36 of the laws of Singapore) andhave made the relevant contributions in accordance with the aforesaid laws and regulations. Save as theaforesaid, we have not participated in any other pension scheme(s).

Being in a labour-intensive industry, our staff related costs (which include salaries, wages and other staffbenefits, contributions to retirement schemes, provisions for staff long service payment and payment in lieu ofuntaken paid leave) constitute a significant part of our costs of services. For FY2016, FY2017, FY2018 and1Q2019, our employee benefit expenses were approximately S$4.3 million, S$4.9 million, S$4.6 million andS$1.2 million respectively, representing approximately 26.4%, 26.3%, 25.6% and 27.5% of our total revenueduring the same periods.

SHARE OPTION SCHEME

We conditionally adopted the Share Option Scheme. The principal terms of the Share Option Scheme aresummarised under the paragraph headed ‘‘4. Share Option Scheme’’ in Appendix IV to this prospectus.

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PROPERTIES

As at the Latest Practicable Date, we leased four properties in Singapore from Independent Third Partiesfor our operations. The following table sets out a summary of the properties leased by us as at the LatestPracticable Date:

No. Address UsageApproximate

floor area TermAnnual rental

fee(sq. ft.) (S$/year)

1. 6 Kung Chong Road,Alexandra IndustrialEstate, Singapore159143

Workshop, officeand showroom

10,199 1 November 2018 to 31October 2021 (with anoption to renew for aterm of three years)

720,000

2. 9A Serangoon NorthAvenue 5, Singapore554500

Workshop andoffice

10,000 1 March 2016 to29 February 2020(with an option torenew for a term ofthree years)

585,600

3. Block 10 Ang Mo KioIndustrial Park 2A #04-14 Singapore 568047

Spray paint shop 1,888 1 February 2017 to 31January 2020

42,720

4. 452 Tagore IndustrialAvenue, Singapore787823

Workshop andoffice

10,700 15 September 2019 to14 September 2021(with an option torenew for a term oftwo years)

168,000

As at the Latest Practicable Date, we did not own any property. We are therefore not required under rule8.01A of the GEM Listing Rules to include in this prospectus any valuation report. Pursuant to section 6(2) ofthe Companies Ordinance (Exemption of Companies and Prospectuses from Compliance with Provisions) Notice(Chapter 32L of the Laws of Hong Kong), this prospectus is exempted from compliance with the requirements ofsection 342(1)(b) of the Companies (Winding Up and Miscellaneous Provisions) Ordinance in relation toparagraph 34(2) of the Third Schedule to the Companies (Winding Up and Miscellaneous Provisions) Ordinance,which requires a valuation report with respect to all of our interests in land or buildings.

During the Track Record Period and up to the Latest Practicable Date, we have not experienced or foreseeany difficulties in renewing our leases. As advised by our Singapore legal advisers, there are no laws orregulations which prohibit or restrict the renewal of the premises upon the expiry of the tenure under the leases.

COMPETITION

According to the Frost & Sullivan Report, the Singapore after-market automotive services industry ishighly fragmented, with approximately 1,500 service centres in 2018. The top five players accounted for onlyapproximately 29.6% while our Group accounted for approximately 5.3% of the total market share in terms ofrevenue in 2018.

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According to the Frost & Sullivan Report, the Singapore car rental services industry is relativelyconcentrated due to high requirements of capital and strict requirements of licence. There are approximately 300service providers in the car rental services market in Singapore, with the top ten players accounting forapproximately 30.7% and our Group accounting for approximately 1.4% of the total market share in terms ofrevenue in 2018.

For further details on the competitive landscape of the passenger car inspection, maintenance and repairservice industry in Singapore, please refer to the paragraph headed ‘‘Industry Overview – Overview of passengercar maintenance and repair market in Singapore – Competitive landscape of the passenger car maintenance andrepair market in Singapore’’ in this prospectus.

Our Directors believe that our competitive strengths, reputation and track record will set us apart from ourcompetitors and our Group will continue to maintain its leading position in the passenger car services industry inSingapore. For details of our Group’s competitive strengths, please refer to the paragraph headed ‘‘Ourcompetitive strengths’’ in this section.

RESEARCH AND DEVELOPMENT

During the Track Record Period and as at the Latest Practicable Date, we did not engage in any researchand development activity. Our management team, however, remains attentive to keep abreast of the latestdevelopment in the after-market automotive services industry and car rental industry.

INSURANCE

We have taken out motor insurance policies for all of our cars including those used for our car rentalservice. We have also taken out insurance covering certain risks in respect of industrial, money insurance, publicliability and work injury compensation. Set out below is a summary of our certain key insurance policies inSingapore:

Type of insurance policy Content of the insurance policy

Motor-vehicle insurance policy Motor-vehicle insurance policy for our rental vehicles coversfor, among others, (i) any loss or damage to the vehicle and itsaccessories and spare parts caused by accidental collision orupon mechanical breakdown and (ii) any liability arising out ofthe use of the vehicle in the event of accident caused by thehirer, subject to the terms and conditions, and the indemnitylimit as provided in the respective motor-vehicle insurancepolicies.

Industrial insurance policy Industrial insurance policy covers for, among others, anyaccidental loss or damage to our properties or amount of losssuffered from business interruption as a result of lost, destroyedor damaged properties, subject to the terms and conditions, andthe indemnity limit as provided in the respective industrialinsurance policies.

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Type of insurance policy Content of the insurance policy

Money insurance policy Money insurance policy covers for, among others, any loss ofmoney belonging to us or for which we are responsible for,occurring while in transit or as a direct result of theftaccompanied by violence, subject to the terms and conditions,and the indemnity limit as provided in the respective moneyinsurance policies.

Public liability insurance policy Public liability insurance policy covers for, among others, allrisks in respect of any bodily injury or property damage claimsarising from or related to the provision of our services andcaused by our negligent acts or omissions and our employees,subject to the terms and conditions, and the indemnity limit asprovided in the respective public liability insurance policies.

Work injury compensation insurancepolicy

Work injury compensation insurance policy covers for, amongother things, any personal injury or death as a result of anaccident or disease arising out of and in the course ofemployment in our business, subject to the terms andconditions, and the indemnity limit as provided in therespective work injury compensation insurance policies.

As at the Latest Practicable Date, we had not experienced any significant loss or damage to our assets. ForFY2016, FY2017, FY2018 and 1Q2019, we recorded expenditure in connection with the insurance policypremiums for our insurance policies of approximately S$70,000, S$130,000, S$212,000 and S$51,000respectively. During the Track Record Period and up to the Latest Practicable Date, we did not make anymaterial claims under our insurance policies nor did we experience any material claims from third parties.

We maintain policies of a nature and amount that we consider adequate and sufficient. We evaluate fromtime to time such policies based on our past experience, industry developments, benchmarking and otherconsiderations. We believe our insurance coverage is adequate and sufficient and in line with industry practicesin Singapore. For the associated risks, please refer to the paragraph headed ‘‘Risk Factors – Risks relating to ourbusiness – Our insurance coverage could be inadequate and potential losses borne by us could adversely affectour cash flow and liquidity’’ in this prospectus.

WORK SAFETY AND ENVIRONMENTAL MATTERS

Based on the advice of our Singapore legal advisers, we have obtained all of the material work safety andenvironmental approvals permits, approvals and registrations necessary to conduct our business. Our operationsare subject to regulations and periodic examinations by local work safety and environmental authorities. If wefail to comply with laws and regulations, we may be subject to fines or cessation of business.

Our Group has been committed to provide a healthy and safe environment to both our staff and ourcustomers. We adopt policies to ensure workplace safety which includes work safety procedures such as fire drilland use of protective equipment. We have also implemented a policy in accordance with the Workplace Safetyand Health (Risk Management) Regulations. We have also guidelines on handling workplace accidents toenhance occupational safety.

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During the Track Record Period and up to the Latest Practicable Date, save as disclosed in the paragraphheaded ‘‘Non-compliance’’ in this section, our Directors confirm that our Group complied with all applicableenvironmental and work safety laws and regulations in all material respects and there were no material accidentsin the course of our business operations. We have not incurred and do not expect to incur material costs inconnection with any non-compliance with environmental and work safety laws and regulations.

MAJOR LICENCES, QUALIFICATIONS, CERTIFICATIONS, AWARDS AND RECOGNITIONS

Licences and qualifications

In order to provide after-market automotive services and car rental services in Singapore, we have to obtaincertain licence(s) or qualification(s) under the laws of Singapore or the relevant regulations. Details of such lawsor regulations are set out under the section headed ‘‘Regulatory Overview’’ in this prospectus. The followingtable sets out the licences and qualifications held by our Group as at the Latest Practicable Date:

Name of subsidiary Licence/Approval Qualification

Relevant Governmentdepartments orstatutory bodies

Period of licence/permit

Optima Werkz Public Utilities BoardApproval

Approval to dischargetrade effluent intopublic sewer

Public Utilities Board 22 June 2017 to21 June 2022

Optima Werkz Land TransportAuthority GeneralLicence

General licence for testdrive of customers carswhile repairing inworkshop

Land TransportAuthority

12 September 2019 to11 September 2020

Optima Werkz Monetary Authority ofSingapore Approval

Exempt approval formotor warranties soldbefore 31 December2016

Monetary Authority ofSingapore

Exemption for allmotor warranties soldbefore 31 December2016

As advised by our Singapore legal advisers, our Group has obtained all requisite certificates, permits andlicences from the relevant regulatory authorities in Singapore in relation to its establishment and businessoperations, and has complied with all the relevant laws and regulations in relation to its operations in allmaterial respects.

Certifications

The following table sets out the major certifications of our Group:

Name of subsidiaryYear of firstgrant Certification

Awarding organisation orauthority Validity period/expiry date

Optima Werkz 2018 ISO 9001:2015 Certification International(Singapore) Pte Ltd

11 February 2021

Optima Werkz 2018 OHSAS 18001:2007 Certification International(Singapore) Pte Ltd

11 February 2021

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LITIGATION AND POTENTIAL CLAIMS

As at the Latest Practicable Date, no member of our Group was involved in any litigation, arbitration orclaim of material importance and, so far as our Directors are aware, no litigation, arbitration or claim of materialimportance is pending or threatened against any member of our Group.

NON-COMPLIANCE

The table below sets forth our systemic non-compliance incidents during the Track Record Period, the legalconsequences, maximum potential penalties, remedial actions taken to rectify such non-compliance and lateststatus and the measures implemented to prevent any future breaches and ensure on-going compliance:

Event of and reasonsfor non-compliance Name of subsidiary

Legal consequence andmaximum potential penalty

Remedial action(s) taken andto be taken and currentstatus as at the LatestPracticable Date

Measures to prevent anyfuture breaches and ensure on-going compliance

Pursuant to Section 31 of theEA, employers may makedeductions from employees’salaries for the purpose ofrecovering advances ofmoney made to employees,provided that suchdeduction shall not exceed25% of the salary due forthe salary period in respectof which the deduction ismade.

Due to administrativeoversight by the company’shuman resources executives,Optima Werkz has breachedSection 31 of the EA whenit recovered employee loansin instalments from fouremployees by deductionsexceeding 25% of the salarydue for the salary period.The aggregate amounts thatwas deducted in excess of25% of the relevantemployees’ monthly salarywas S$6,880. The firstinstance of suchcontravention of Section 31of the EA occurred inOctober 2016, and the lastinstance occurred in March2018.

Optima Werkz A fine not exceeding S$5,000or imprisonment for a termnot exceeding 6 months orboth, and for a subsequentoffence under the samesection to a fine notexceeding S$10,000 orimprisonment for a term notexceeding 12 months or both.

If this offence is proved (a) tohave been committed with theconsent or connivance of anofficer of a body corporate;or (b) to be attributable toany neglect on his part, theofficer as well as the bodycorporate shall be guilty ofthe offence and shall beliable to be proceeded againstand punished accordingly –

where ‘‘officer’’ in relation toa body corporate, means anydirector, partner, member ofthe committee ofmanagement, chief executive,manager, secretary or othersimilar officer of the bodycorporate and includes anyperson purporting to act inany such capacity.

Optima Werkz discovered thenon-compliance incident inMarch 2018 during aninternal audit process. Sincediscovering the non-compliance, Optima Werkzhas refunded each employeethe amounts that have beendeducted in excess of 25% oftheir monthly salary for therelevant periods ofemployment, therebyretrospectively rectified thebreaches. In addition, each ofthe four employees hassigned a letter acknowledgingreceipt of the said refund aswell as to confirm that theyhave no further claimsagainst Optima Werkz underthe EA.

Based on the advice of ourSingapore legal advisers, withthe above measures in place,it is unlikely that the fouremployees will subsequentlyfile a complaint with theMinistry of Manpower ofSingapore (which isresponsible for handlingemployment related issues)on this matter and theMinistry of Manpower ofSingapore is unlikely to takeany independent actionwithout receiving a complaintfrom an employee.

In order to prevent recurrence ofthe offence, Optima Werkzhave implemented a companyloan and salary advanceapplication procedure where allapplications for company loansand salary advance will besubject to our administrativedirector and chief executiveofficer’s approval. Theapplication letter will state theamount of the salary advanceor company loan and thedeductions will be computedby our human resourcesmanager to be under 25% ofthe subject employee’s monthlysalary. The applicationprocedure was incorporated inour employee handbook andimplemented on 22 May 2018.

Furthermore, our humanresources manager willproduce a monthly report ofthe payroll to the seniormanagement for their revieweach month. The monthlypayroll report will include thedetails, such as the amount andpercentage of deductions, ofall company loans and salaryadvances currentlyimplemented in order to ensurethe deductions are within thethresholds as stipulated underthe EA.

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Event of and reasonsfor non-compliance Name of subsidiary

Legal consequence andmaximum potential penalty

Remedial action(s) taken andto be taken and currentstatus as at the LatestPracticable Date

Measures to prevent anyfuture breaches and ensure on-going compliance

The human resources managerwill keep record of allcompany loans made toemployees and salaryadvances. The records willstate clearly the deductionamount and number ofinstalments to be made.Records of newly approvedadvances and loans will besent to our chief financialofficer each month to ensuredue compliance with the EA.

The aforementioned recordkeeping procedure has beenincorporated in our employeehandbook in August 2018. OurDirectors believe that goingforward, the enhanced internalcontrol measures will preventany recurrence of the offence.

In respect of the Group’s systemic non-compliance incident, it has the following characteristics: (i) nowrongdoings were willfully committed; (ii) no dishonesty on the part of the Directors was involved; (iii) thenon-compliance was not serious in nature; (iv) the non-compliance incidents have been duly rectified; (v) nomaterial penalty or financial impact was caused; (vi) the amount involved was immaterial; and (vii) thenon-compliance incident was standalone and merely involved inadvertent oversight or misunderstanding of thelaw, which can be prevented by strengthening our internal control measures. Since the application procedure wasimplemented in May 2018, our Directors confirm that there have been no instances of the recurring breach, assuch, our Directors believe, and the Sponsor concurs, that the internal control measure adopted are effective inpreventing future recurrences of the non-compliance. Furthermore, based on the above, and the Group’srectification and internal control measures to prevent future recurrence of the non-compliance incident, theDirectors are of the view, and the Sponsor concurs, that the Directors are suitable to be directors under Rules5.01 and 5.02 of the GEM Listing Rules and that the Group is suitable for listing under Rule 11.06 of the GEMListing Rules.

Save as disclosed, our Directors confirm that during the Track Record Period and up to the LatestPracticable Date, (i) there was no non-compliance incident the nature of which is material impact non-compliance and (ii) we had complied with applicable laws and regulations in material respects in Singapore(being the principal jurisdiction in which we operate).

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RISK MANAGEMENT AND INTERNAL CONTROL

We are exposed to various risks during our operations. For more details, please refer to the section headed‘‘Risk Factors’’ in this prospectus. We have implemented various policies and procedures to ensure effective riskmanagement. Such policies and procedures include the following:

Board and audit committee

Our Board oversees and manages the overall risks associated with our operations. We have established anaudit committee to review and supervise the financial reporting process and internal control system of ourGroup. The audit committee consists of three members, namely Mr. Tang Chi Chiu, who serves as chairman ofthe committee, Mr. Chu Kin Ming and Ms. Liang Weizhang. For the qualifications and experience of thesecommittee members, please see section headed ‘‘Directors and Senior Management’’ in this prospectus. We haveprepared written terms of reference in compliance with Rules 5.28 and 5.29 of the GEM Listing Rules and theCorporate Governance Code as set out in Appendix 15 to the GEM Listing Rules.

Internal control

In addition, our Group has taken the following measures to ensure on-going compliance with variousapplicable laws and regulations and to strengthen our internal controls:

(i) a detailed memorandum prepared by our Company’s Hong Kong legal advisers, setting out theongoing regulatory requirements of our Directors after the Listing had been distributed to andreviewed by our Directors on 28 June 2018;

(ii) our Directors attended training session conducted by our Company’s Hong Kong legal advisers on28 June 2018 regarding the on-going obligations and duties of directors of a publicly listed companyin respect of continuing obligations of issuer, notifiable transactions, connected transactions, dealingin securities and codes of corporate governance;

(iii) our Company has appointed Mr. Chan Tsang Mo as our company secretary, who is responsible for theday-to-day compliance matters of our Group. He is also responsible for monitoring the timing forconvening annual general meetings of our Company;

(iv) our Group has established an audit committee with written terms of reference in accordance withAppendix 15 to the GEM Listing Rules to review the internal control systems and procedures forcompliance with the requirements of the GEM Listing Rules, the Companies Ordinance and otherapplicable laws, rules and regulations;

(v) our Company has appointed Ms. Tan Peck Luan, an executive Director of our Company, as ourcompliance officer to assist our Board to oversee and monitor the due compliance with the relevantlaws, rules and regulations applicable to our Group;

(vi) our Company has appointed Orient Capital (Hong Kong) Limited as our compliance adviser to adviseon compliance matters in accordance with the GEM Listing Rules upon the Listing; and

(vii) our Company will, from time to time, appoint external legal advisers, where applicable, to advise uson compliance with and to provide us with updates on the changes in the GEM Listing Rules and theapplicable laws, rules and regulations from time to time to see if any change is required to be madewith our operation and internal control system.

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In preparation of the Listing, we engaged an independent external consulting firm (the ‘‘Internal ControlConsultant’’) to review our internal control systems and procedures (the ‘‘Internal Control Review’’) in April2018. The Internal Control Consultant provided recommendations for our management’s consideration to enhanceour internal controls and procedures. We have taken actions to adopt the recommended measures and proceduresto enhance our internal control systems. The Internal Control Consultant performed a follow-up review fromMay 2018 to June 2018, subsequently in September 2018, November 2018 and lastly in March 2019 to reviewthe status of the management actions taken by our Group to address the recommendations of the Internal ControlReview (the ‘‘Follow-up Review’’). Based on the audit procedures to review the actions taken by us to addressthe audit recommendation, no high risk-internal control weaknesses were noted within the scope of our InternalControl Consultant’s review that have not been addressed.

The Internal Control Review and the Follow-up Review were conducted based on the information providedby our Group and no assurance or opinion on internal controls was expressed by the Internal Control Consultant.

Our Directors are of the view that the internal control measures adopted by our Group are adequate andeffective in managing our business risks.

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OUR CONTROLLING SHAREHOLDERS

Immediately following the completion of the Capitalisation Issue and the Share Offer (without taking intoaccount any Shares which may be issued upon the exercise of the Offer Size Adjustment Option, and the optionswhich may be granted under the Share Option Scheme), our Company will be owned as to approximately 44.56%by Red Link, which is in turn owned as to 54.70% and 45.30% by each of Ms. FF Lim and Mr. Ang,respectively. Red Link is an investment holding company.

Ms. FF Lim and Mr. Ang are the founders of our Group and each of them has decided to restrict theirability to exercise direct control over our Company by holding their interests through Red Link. Ms. FF Lim andMr. Ang also executed the Acting in Concert Confirmation, whereby, among other things, they confirmed thatduring the Track Record Period and up to the date of the Acting in Concert Confirmation, they have been actingin concert with each other in controlling the members of our Group; and have further undertaken that, during theperiod when they remain interested in the share capital of any members of our Group, until entering into awritten agreement to terminate the Acting in Concert Confirmation, they will maintain the acting-in-concertrelationship. As such, Ms. FF Lim, Mr. Ang and Red Link are regarded as a group of Controlling Shareholdersof our Company under the GEM Listing Rules. For details of the background of the Controlling Shareholders,please refer to the sections headed ‘‘History, Reorganisation and Corporate Structure’’ and ‘‘Directors and SeniorManagement’’ in this prospectus.

INDEPENDENCE FROM OUR CONTROLLING SHAREHOLDERS

Our Directors do not expect that there will be any other significant transactions between our Group and ourControlling Shareholders and their respective close associates (other than members of our Group) upon or shortlyafter the Listing.

Our Group is capable of carrying on our business independently from and does not place undue reliance onour Controlling Shareholders, taking into consideration the following factors:

Management independence

Our Board comprises three executive Directors and three independent non-executive Directors. Thedirectorship of our executive Directors is held by Mr. Ang (one of our Controlling Shareholders), Ms. LLLim and Ms. Tan. Apart from Mr. Ang who is the sole director of Red Link, no other Director holds anydirectorship or senior management position in Red Link.

Each of our Directors is aware of his/her fiduciary duties as a Director which require, among others,that he/she acts for the benefit and in the best interests of our Company and does not allow any conflictbetween his duties as a Director and his personal interest. Our independent non-executive Directors arewith extensive experience in different professions and they have been appointed pursuant to therequirements under the GEM Listing Rules to ensure that the decisions of our Board are made only afterdue consideration of independent and impartial opinions. Our Directors believe that the differentbackground provides a balance of views and opinions. Please refer to the section headed ‘‘Directors andSenior Management’’ in this prospectus for details of the background of our Directors. In the event thatthere is a potential conflict of interest arising out of any transaction to be entered into between our Groupand our Directors or their respective close associates, the interested Director(s) shall abstain from voting atthe relevant board meetings of our Company in respect of such transactions and shall not be counted in thequorum. Our Directors are of the view that our Board and senior management are capable of managing ourGroup’s business independently from our Controlling Shareholders.

RELATIONSHIP WITH CONTROLLING SHAREHOLDERS

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Operational independence

We have established our own organisational structure, and each department is assigned to specificareas of responsibilities. Our Group is able to continue to operate independently from our ControllingShareholders after the Listing. Our Group has also established a set of internal control policy to facilitatethe effective operation of our business. We have obtained all necessary licenses for our business operationand we have sufficient operational capacity in terms of capital and employees to operate independentlyfrom our Controlling Shareholders.

Financial independence

Our Directors consider that our Group will be financially independent of our Controlling Shareholdersand any of their respective close associates upon Listing. All loans due to our Shareholders have been fullysettled as at the Latest Practicable Date, and all guarantees and personal securities provided by ourControlling Shareholders for our borrowings (for details, please refer to the section headed ‘‘FinancialInformation – Indebtedness’’ in this prospectus) will be fully released or replaced by corporate guaranteeupon Listing. In addition, we have our own internal control and accounting systems, accounting andfinance department, independent treasury function for cash receipts and payment and independent access tothird-party financing. Our Directors are satisfied that we are capable of conducting our businessindependently from any of our Controlling Shareholders (including their respective close associates) afterour Company is listed on the Stock Exchange.

In view of our internal resources and the estimated net proceeds from the Share Offer, our Directorsconsider that our Group will have sufficient capital for its financial needs. Our Directors further considerthat, upon Listing, our Group is capable of obtaining financing from external sources independently withoutthe support of our Controlling Shareholders or their respective close associates.

COMPETING BUSINESS

None of our Controlling Shareholders and our Directors and their respective close associates has anyinterest in a business apart from our business which competes or is likely to compete, directly or indirectly, withour business, and would require disclosure under Rule 11.04 of the GEM Listing Rules.

CORPORATE GOVERNANCE MEASURES

Our Directors recognise the importance of good corporate governance in protecting our Shareholders’interests. We have adopted the following measures to safeguard good corporate governance standards and toavoid potential conflict of interests between our Group and our Controlling Shareholders:

(a) we have established internal control mechanisms to identify connected transactions. Upon Listing, ifwe enter into connected transactions with our Controlling Shareholders or any of their associates, ourCompany will comply with the applicable Listing Rules;

(b) our Company has appointed independent non-executive Directors to ensure the effective exercise ofindependent judgments on the decision-making process of our Board and provide independent adviceto our Shareholders;

(c) our independent non-executive Directors will review, on an annual basis, whether there are anyconflicts of interests between our Group and our Controlling Shareholders (‘‘Annual Review’’) andprovide impartial and professional advice to protect the interests of our minority Shareholders;


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(d) our Controlling Shareholders will undertake to provide all information necessary, including allrelevant financial, operational and market information and any other necessary information asrequired by the independent non-executive Directors for the Annual Review;

(e) we will disclose decisions on matters reviewed by our independent non-executive Directors either inour annual reports or by way of announcements as required by the GEM Listing Rules;

(f) our Company has appointed Orient Capital as our compliance adviser, which will provide advice andguidance to our Company in respect of compliance with applicable laws and the GEM Listing Rulesincluding various requirements relating to directors’ duties and internal control; and

(g) where the advice from independent professional, such as that from financial adviser, is reasonablyrequested by our Directors (including the independent non-executive Directors), the appointment ofsuch independent professional will be made at our Company’s expenses.

Our Directors consider that the above corporate governance measures are sufficient to manage any potentialconflict of interests between our Controlling Shareholders and their respective close associates and our Groupand to protect the interests of our Shareholders, in particular, our minority Shareholders.


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DIRECTORS

Our Board currently has six Directors, comprising three executive Directors and three independent non-executive Directors. Our Board is responsible and has general powers for the management and conduct of ourbusinesses. The table below sets out certain information in respect of our Directors:

Name AgePosition with ourCompany

Date of joiningour Group (Note1)

Date ofappointment asDirector/seniormanagement Principal responsibilities

Relationship withthe other Directorsand seniormanagement

Executive Directors

Mr. Ang Lay Keong(Hong Liqiang)

47 Executive Director,Chairman and chiefexecutive officer

18 May 2012 14 March 2018 Overall businessdevelopment andstrategic planning andoverseeing theperformance andmanagement of ourGroup

Spouse of Ms. LLLim, our Director

Ms. Lim Li Ling(Lin Liling)

46 Executive Director 21 June 2012 27 June 2018 Responsible for humanresources andadministrativemanagement of ourGroup

Spouse of Mr. Ang,our Director

Ms. Tan Peck Luan(Chen Biluan)

46 Executive Director, chieffinancial officer andcompliance officer

1 December 2017 14 March 2018 Overseeing the financialmanagement, accountingoperations, andregulatory complianceof our Group

N/A


Mr. Chu Kin Ming（朱健明）

39 Independent non-executiveDirector (Note 2)

18 September2019

18 September2019

A member of our AuditCommittee, ourRemunerationCommittee and ourNomination Committee.

N/A

Mr. Tang Chi Chiu（鄧志釗）


18 September2019

18 September2019

The chairman of ourAudit Committee and amember of ourRemunerationCommittee.

N/A

Ms. Liang Weizhang（梁偉章）


18 September2019

18 September2019

The chairlady of ourRemunerationCommittee and ourNomination Committeeand a member of ourAudit Committee.

N/A

Notes:

1. The date of joining our Group in this table above includes the dates of joining members of our Group prior to thereorganisation of such members into our Group.

2. Independent non-executive Director’s function is to participate in meetings of our Board to bring an independent judgment tobear on issues of strategy, performance, accountability, resources, key appointments and standards of conduct and transactionswhich are material to our Group as and when required; to take the lead where potential conflicts of interest arise and to serveon the Audit Committee, Remuneration Committee and the Nomination Committee (as the case may be).

DIRECTORS AND SENIOR MANAGEMENT

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SENIOR MANAGEMENT

The table below shows certain information in respect of our senior management:

Name AgePosition withour Group

Date of joiningour Group (Note) Principal responsibilities

Relationship with theother Directors andsenior management

Mr. Goh Duo Tzer 47 Chief operating officer 21 September2016

Day-to-day managementof the affairs andactivities of our Group

N/A

Mr. Lee Tien Yen 49 Head service advisor 9 March 2015 Customer service N/A

Mr. Lew Chuen HuiRick

42 Operations manager 27 August 2013 Assisting chief operatingofficer in day-to-daymanagement of theaffairs and activities ofour Group

N/A

Note: The date of joining our Group in this table above includes the dates of joining members of our Group prior to thereorganisation of such members into our Group.

The biographies of our Directors are set out as follows:

EXECUTIVE DIRECTORS

Mr. Ang Lay Keong (Hong Liqiang), aged 47, is our founder, the Chairman, executive Director and chiefexecutive officer. He is primarily responsible for the overall business development and strategic planning of ourGroup and overseeing the performance and management of our Group. Mr. Ang is also one of our ControllingShareholders and a member of the Nomination Committee. He has about 25 years of experience in theautomobile industry.

Mr. Ang worked in Lim Tan Motor Pte. Ltd., a company whose principal business was automotiveworkshop, from July 1994 to June 2012 with the last position as a director and was responsible for managing theday-to-day operation of the car repair business. Mr. Ang founded Optima Werkz in May 2012 and has been adirector and the chief executive officer of Optima Werkz since 18 May 2012 and 21 June 2012 respectively.Mr. Ang has also been appointed as a director of Optima De Auto and Optima Carz since 22 August 2013 and24 October 2014 respectively. Mr. Ang was a director of Optima Werkz Myanmar Holdings Pte. Ltd. from July2017 to December 2017.

Mr. Ang was a director of the following company in Singapore prior to its dissolution:

Name of company

Principal businessactivity prior todissolution

Date ofdissolution

Means ofdissolution

Reason fordissolution

Um Elite Racing Pte. Ltd. Installation of industrialmachinery andequipment, mechanicalengineering works

5 June 2008 Striking off cessation ofbusiness


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Mr. Ang confirmed that (i) the above company was solvent immediately prior to its dissolution; (ii) therewas no wrongful act on his part leading to the dissolution of the above company and was not aware of any actualor potential claim that had been or would be made against him as a result of the dissolution; and (iii) nomisconduct or misfeasance had been involved in the dissolution of the above company.

Mr. Ang completed a one year full-time pre-vocational training course in the Vocational and IndustrialTraining Board in Singapore and was awarded a certificate in November 1986. He obtained a national tradecertificate grade three in maintenance fitting (practical and theory parts) from the Vocational and IndustrialTraining Board in Singapore in March 1989.

Ms. Lim Li Ling (Lin Liling), aged 46, is our executive Director and joined our Group in June 2012. Sheis primarily responsible for human resources and administrative management of our Group. Before joining ourGroup, Ms. LL Lim served as the director of Lim Tan Motor Pte Ltd from January 1991 to May 2012 and wasresponsible for administrative duties. She has been working in Optima Werkz as the administrative director sinceJune 2012 and has been responsible for overseeing administrative matters. Ms. LL Lim has also been appointedas the director of Optima Werkz International since 23 September 2015. Ms. LL Lim obtained Singapore-Cambridge General Certificate of Education Normal (Academic) Level Examination in 1990 and Singapore-Cambridge General Certificate of Education (Ordinary Level) Examination in 1991.

Ms. Tan Peck Luan (Chen Biluan), aged 46, is our executive Director, chief financial officer andcompliance officer and joined our Group in December 2017. She is primarily responsible for overseeing thefinancial management, accounting operations, and regulatory compliance of our Group. She has about 26 yearsof experience in the fields of accounting and auditing.

Ms. Tan started her career as an assistant tax officer with the Inland Revenue Authority of Singapore fromJune 1993 to July 1994. From July 1994 to August 1996, Ms. Tan served as an accounts executive in LingcotugPte. Ltd. From November 1996 to May 2004, Ms. Tan worked at Deloitte & Touche, Singapore with her lastposition as an audit manager. Ms. Tan joined April Management Pte Ltd as a financial controller from January2005 to March 2008. From April 2008 to August 2013, she was a freelance accountant who assisted the clientsto set up accounting process, maintain accounts, prepare tax submission and forecast on project basis. Ms. Tanworked as an accounting and administrative manager at Talent Navigators Pte. Ltd. from August 2013 to April2015. From April 2015 to February 2017, Ms. Tan served as a vice president of Pacific Star Development PteLtd and was responsible for overseeing financial reporting. From February 2017 to October 2017, Ms. Tanserved as a financial controller of Pacific Star Development Limited, a company listed on the SingaporeExchange Securities Trading Limited with the principal business in real estate development. Since December2017, Ms. Tan has been serving as a chief financial officer in the then group of Optima Werkz.

Ms. Tan graduated with a diploma in accountancy from Ngee Ann Polytechnic, Singapore, in August 1993.Ms. Tan was admitted as a non-practising member of the Institute of Certified Public Accountants of Singaporein June 2000, and has obtained a certificate issued by the Association of Chartered Certified Accountants tocertify that she is a graduate of the association having passed the final examination in 1997. Ms. Tan wasadmitted as a member of the Institute of Singapore Chartered Accountants in July 2013.

INDEPENDENT NON-EXECUTIVE DIRECTORS

Mr. Chu Kin Ming（朱健明）, aged 39, was appointed as an independent non-executive Director on18 September 2019. He is a member of our Audit Committee, the Remuneration Committee and the NominationCommittee. Mr. Chu is currently an independent non-executive director in SK Target Group Limited, a companylisted on the Stock Exchange (Stock code: 8427) since June 2017. Mr. Chu is currently also an independent non-executive director in Kelfred Holdings Limited, a company listed on the Stock Exchange (Stock code: 1134)since June 2019.


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From December 2003 to December 2005, Mr. Chu worked in BDO McCabe Lo Limited with his lastposition as a senior associate. He worked in the audit department in Deloitte Touche Tohmatsu from December2005 to January 2008 with his last position as a senior accountant. He then worked as a financial controller inBeijing Enterprises Medical and Health Industry Group Limited (formerly known as Wang Sing InternationalHoldings Group Limited), a company listed on the Stock Exchange (Stock code: 2389), from January 2008 toJune 2009 and he was further appointed as company secretary from September 2008 to June 2009. He thenworked as a financial controller in Prosperity International Holdings (H.K.) Limited, a company listed on theStock Exchange (Stock code: 803), from June 2009 to June 2015. He subsequently worked as a financecontroller and company secretary in Ares Asia Limited, a company listed on the Stock Exchange (Stock code:645), from June 2015 to February 2016. From February 2016 to February 2018, Mr. Chu worked as a financialcontroller and company secretary of KEE Holding Company Limited, a company listed on the Stock Exchange(Stock code: 2011), and Ascent International Holdings Limited (formerly known as Chanco International GroupLimited), a company listed on the Stock Exchange (Stock code: 264).

Mr. Chu was a director of the following companies in Hong Kong prior to their respective dissolution:

Name of company


Date ofdissolution Means of dissolution


Golden Island Limited（金銀島有限公司）

Dormant 26 May 2017 Dissolved byderegistration undersection 750 of theCompanies Ordinance

Dormant

SME (HK) CORPORATESERVICES LIMITED


Dormant

Mr. Chu confirmed that (i) the above two companies were solvent immediately prior to their respectivedissolution; (ii) there was no wrongful act on his part leading to the dissolution of the above two companies andwas not aware of any actual or potential claim that had been or would be made against him as a result of therespective dissolution of the above two companies; and (iii) no misconduct or misfeasance had been involved inthe respective dissolution of the above two companies.

Mr. Chu was admitted as a member of the Hong Kong Institute of Certified Public Accountants in July2008. He was admitted to graduateship of the Institute of Chartered Secretaries and Administrators in February2009 and was elected as an associate in April 2009. He was admitted as an associate of the Hong Kong Instituteof Chartered Secretaries in April 2009. Mr. Chu was admitted as an associate of the Taxation Institute of HongKong in September 2010. He became a fellow member of The Association of Chartered Certified Accountants inDecember 2012.

Mr. Chu obtained a bachelor’s degree in accountancy from the Hong Kong Polytechnic University inNovember 2003.


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Mr. Tang Chi Chiu（鄧志釗）, aged 35, was appointed as an independent non-executive Director on18 September 2019. He is the chairman of our Audit Committee and a member of our Remuneration Committee.Mr. Tang was appointed as a director of Man Shun Group (Holdings) Limited on 27 February 2018, a companylisted on the Stock Exchange (Stock code: 1746), and has served as an executive director thereof since 12 March2018. Mr. Tang is currently working in Shun Tung Engineering Company Limited as a chief financial officersince January 2017. He has been appointed as a director of TANDEM Groups Limited, TANDEM (HK) CPALimited, TANDEM (HK) Professional Services Limited, TANDEM (HK) Corporate Services Limited andTANDEM (HK) Consulting Limited since December 2011 and v-Change (HK) Merchants Services CompanyLimited since August 2017, for which he is responsible for overall strategic planning.

From February 2007 to April 2009, Mr. Tang worked in HLB Hodgson Impey Cheng Limited with his lastposition as a senior accountant. He worked in SHINEWING (HK) CPA Limited from January 2010 to November2011 with his last position as an assistant manager. From May 2012 to July 2013, Mr. Tang worked as a financemanager of Fortune Case Limited, a subsidiary of China Fortune Financial Group Limited.

Mr. Tang graduated from City University of Hong Kong with a bachelor’s degree in businessadministration, majoring in accountancy in November 2006. He further obtained a master of science degreemajoring in finance from City University of Hong Kong in July 2016. Mr. Tang was admitted as a member ofthe Hong Kong Institute of Certified Public Accountants in February 2011. Mr. Tang is currently a practisingcertified public accountant in Hong Kong.

Mr. Tang was a director of the following companies in Hong Kong prior to their respective dissolution:

Name of company


Date ofdissolution Means of dissolution


Amir Trading GroupCompany Limited

Dormant 10 April 2015 Dissolved byderegistration undersection 750 of theCompanies Ordinance

Dormant

SME (HK) CORPORATESERVICES LIMITED


Dormant

Mr. Tang confirmed that (i) the above two companies were solvent immediately prior to their respectivedissolution; (ii) there was no wrongful act on his part leading to the dissolution of the above two companies andwas not aware of any actual or potential claim that had been or would be made against him as a result of therespective dissolution of the above two companies; and (iii) no misconduct or misfeasance had been involved inthe respective dissolution of the above two companies.

Ms. Liang Weizhang（梁偉章）, aged 47, was appointed as an independent non-executive Director on18 September 2019. She is the chairlady of our Remuneration Committee and the Nomination Committee. She isalso a member of our Audit Committee. Ms. Liang is currently working in Zhongshan Shengshi BusinessDevelopment Co., Limited（中山市聖獅商業發展有限公司）as a general manager since January 2017 and hasbeen responsible for the overall operational business management.


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From July 2012 to December 2016, Ms. Liang worked in Jianhua Concrete Pile Group*（建華建材投資有

限公司） as a deputy director of financial centre. She had been working in the Bank of CommunicationsZhongshan Branch from July 1993 to June 2012 with her last position as manager of credit managementdepartment.

Ms. Liang obtained an associate degree from Sun Yat-sen University, Sun Yat-sen School*（孫文學院）,majoring in Chinese Secretary. In November 2002, she obtained the title of middle-level Economist in Financeand Economics awarded by the Ministry of Personnel of the People’s Republic of China. In February 2006, sheobtained a diploma and bachelor degree from the Network Education Institute of South China NormalUniversity, majoring in Chinese language and literature.

GENERAL

Save as disclosed above, there is no other information relating to our Directors that needs to be disclosedunder the requirements under Rule 17.50(2) of the GEM Listing Rules, and none of our Directors:

(i) held any other positions in our Company or other members of our Group as at the Latest PracticableDate;

(ii) had any other relationship with any Directors, senior management or substantial Shareholders orControlling Shareholders of our Company as at the Latest Practicable Date; and

(iii) he or she has not held any directorship in any other public companies the securities of which arelisted on any securities market in Hong Kong or overseas in the three years prior to the LatestPracticable Date.

Except for such respective interests of Mr. Ang and Ms. LL Lim in the 6,313,300 Shares and the 6,313,300Shares respectively which are disclosed in the section headed ‘‘Substantial Shareholders’’ in this prospectus,none of our Directors have any interest in the Shares within the meaning of Part XV of the SFO or is a directoror an employee of a company which has an interest or short position in the Shares and underlying Shares of ourCompany. Each of our Directors has confirmed that none of them or their respective associates are engaged in,or interested in any business (other than our Group) which, directly or indirectly, competes or may compete withour business or has or may have any conflict of interests with our Group.

Save as disclosed above, to the best of the knowledge, information and belief of our Directors after havingmade all reasonable enquiries, there was no other matter with respect to the appointment of our Directors thatneeds to be brought to the attention of our Shareholders and there was no information relating to our Directorsthat is required to be disclosed pursuant to Rule 17.50(2)(h) to (v) of the GEM Listing Rules as at the LatestPracticable Date.

SENIOR MANAGEMENT

The biographies of our senior management are set out as follows:

Mr. Goh Duo Tzer, aged 47, is the chief operating officer of our Group. He is primarily responsible forthe day-to-day management of the affairs and activities of our Group. He has about 17 years of experience in theautomobile industry.


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From September 2002 to March 2004, Mr. Goh worked as a service advisor in Lim Tan Motor Pte Ltd andas an account manager in the sales division in Family Car Rental and had been responsible for individual andcorporate rental sales of passenger and commercial vehicles for short and long-term rental. Mr. Goh worked as abusiness manager in the corporate rental sales division and as a workshop manager in the fleet maintenancedivision in C & P Rent-a-car Pte Ltd and C & P Automotive (Pte) Ltd. respectively from April 2004 to March2006. Mr. Goh joined Royal Limousine Pte. Ltd. as a consultant from June 2006 to December 2007. Mr. Gohserved as a consultant in Beemer Limousine from January 2008 to December 2010. Mr. Goh has been working inOptima Werkz as a senior manager since September 2016 and has been responsible for the day-to-daymanagement of its affairs and activities.

Mr. Lee Tien Yen, aged 49, is the head service advisor of our Group. He is primarily responsible forcustomer service. He has about five years of experience in the automobile industry. From December 2007 toJanuary 2009, Mr. Lee worked as a sales manager in Car Kingdom and was responsible for customer service andsales. He worked as a district sales director in HSR International Realtors Pte Ltd from December 2009 to July2015 and was responsible for sales. Since March 2015, he has been working in Optima Werkz as a car serviceadvisor and has been responsible for customer service.

Mr. Lew Chuen Hui Rick, aged 42, is the operations manager of our Group. He is primarily responsiblefor assisting chief operating officer in day-to-day management of the affairs and activities of our Group. He hasover 17 years of experience in the automobile industry. From April 2002 to September 2005, Mr. Lew worked inMotorway Credit Pte Ltd as a sales executive in the Mitsubishi Department. He worked in Mazda Motor (S) PteLtd as a sales consultant from October 2005 to July 2007. From September 2007 to July 2013, Mr. Lew workedin Georg Grotjahn (S) Pte Ltd as a senior sales executive. From August 2013 to August 2016, he has beenworking in Optima Werkz as an automotive service advisor and was responsible for customer service and salesoperations. He was promoted to be the operations manager since September 2016 and has been primarilyresponsible for assisting chief operating officer in day-to-day management of the affairs and activities of OptimaWerkz.

COMPANY SECRETARY

Mr. Chan Tsang Mo（陳增武）, aged 35, was appointed as a company secretary of our Company on29 May 2018. Mr. Chan has about 12 years of experience in the area of accounting and financial management.Mr. Chan is currently the respective director of Morton Professional Services Limited and Synergy MortonCorporate Services Limited and is responsible for advising on company incorporation, business establishmentand legal compliance.

Mr. Chan worked as a financial controller in Wan Cheng Metal Packaging Company Limited, a companylisted on GEM of the Stock Exchange of Hong Kong (Stock code: 8291) from May 2016 to October 2017. Heworked as an accounting manager in Reignwood International Investment (Group) Co., Ltd from October 2013 toApril 2016. Mr. Chan worked as a finance director in Ares Asia Limited, a company listed on the StockExchange of Hong Kong (Stock code: 645) from June 2014 to March 2016. He worked as a project manager inGC Management Services Company Limited from June 2013 to October 2013. Mr. Chan worked as a seniorauditor in RSM Nelson Wheeler and BDO Limited from December 2009 to June 2011 and January 2008 toDecember 2009 respectively. He worked in Ronald Ng & Company Limited from June 2006 to January 2008with his last position as an audit semi-senior.

Mr. Chan obtained a bachelor of business administration degree, majoring in accounting from CityUniversity of Hong Kong in November 2006. Mr. Chan is currently a practicing certified public accountantunder the Hong Kong Institute of Certified Public Accountants.


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COMPLIANCE OFFICER

Ms. Tan was appointed as the compliance officer (pursuant to rule 5.19 of the GEM Listing Rules) of ourCompany on 28 June 2018. Please refer to the paragraph headed ‘‘Executive Directors’’ in this section for detailsof Ms. Tan’s qualifications and experience.

REMUNERATION POLICY

Our Directors and senior management of our Company receive compensation in the form of fees, salaries,contributions to pension schemes, other allowances, other benefits in kind and/or discretionary bonuses withreference to those paid by comparable companies, time commitment and performance of our Directors and seniormanagement, as well as the performance of our Group.

Our Group regularly reviews and determines the remuneration and compensation packages of our Directorsand senior management by reference to, among other things, market level of remuneration and compensationpaid by comparable companies, respective responsibilities of our Directors and senior management andperformance of our Group.

Following the Listing, our Remuneration Committee will review and determine the remuneration andcompensation packages of our Directors with reference to their experience, responsibilities, workload and timedevoted to our Group and performance of our Group.

REMUNERATION OF DIRECTORS AND SENIOR MANAGEMENT

For each of FY2016, FY2017, FY2018 and 1Q2019, the aggregate director’s fee, salaries and allowancesand retirement benefits scheme contribution, other benefits in kind and/or discretionary bonuses paid by us toour Directors were approximately S$560,000, S$484,000, S$526,000 and S$124,000, respectively.

For each of FY2016, FY2017, FY2018 and 1Q2019, the aggregate salaries and allowances, other benefits inkind, discretionary bonuses and retirement benefits scheme contribution paid by us to the non-directorindividuals out of the five highest paid individuals of our Group were approximately S$381,000, S$400,000,S$203,000 and S$54,000 respectively.

We did not pay to our Directors or the five highest paid individuals any inducement fees to join us or ascompensation for loss of office for each of FY2016, FY2017, FY2018 and 1Q2019. Furthermore, none of ourDirectors waived any compensation for the same period.

Save as disclosed above, no other emoluments have been paid, or are payable, by us to our Directors andthe five highest paid individuals in respect of each of FY2016, FY2017, FY2018 and 1Q2019, respectively.

Under the arrangements currently in force, we estimate that the aggregate remuneration payable to, andbenefits in kind receivable by, our Directors including our independent non-executive Directors in theirrespective capacity as Directors (excluding discretionary benefits or bonus or other fringe benefits) for the yearending 31 December 2019 will be approximately S$0.6 million.

SHARE OPTION SCHEME

Our Company has conditionally adopted the Share Option Scheme. Further information on the Share OptionScheme is set forth in the paragraph headed ‘‘4. Share Option Scheme’’ in Appendix IV to this prospectus.


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BOARD COMMITTEES

Audit Committee

Our Company has established an audit committee on 18 September 2019 with written terms of reference incompliance with the Corporate Governance Code and Corporate Governance Report as set out in Appendix 15 tothe GEM Listing Rules. Our audit committee has three members, namely Mr. Tang Chi Chiu, Mr. Chu Kin Mingand Ms. Liang Weizhang. Mr. Tang Chi Chiu, our independent non-executive Director, has been appointed as thechairman of our audit committee, and has the appropriate professional qualifications required under the GEMListing Rules. The primary duties of our audit committee are to review and supervise the financial reportingprocess and internal control system of our Company, oversee the audit process and perform other duties andresponsibilities as assigned by our Board.

Remuneration Committee

Our Company has established a remuneration committee on 18 September 2019 with written terms ofreference in compliance with the Corporate Governance Code and Corporate Governance Report as set out inAppendix 15 to the GEM Listing Rules. Our remuneration committee has three members, namely Ms. LiangWeizhang, Mr. Tang Chi Chiu, Mr. Chu Kin Ming. Ms. Liang Weizhang, our independent non-executiveDirector, has been appointed as the chairlady of our remuneration committee. The primary duties of ourremuneration committee are to establish and review the policy and structure of the remuneration for ourDirectors and senior management and make recommendations on employee benefit arrangements.

Nomination Committee

Our Company has established a nomination committee on 18 September 2019 with written terms ofreference in compliance with the Corporate Governance Code and Corporate Governance Report as set out inAppendix 15 to the GEM Listing Rules. Our nomination committee consists of three members, being Ms. LiangWeizhang, Mr. Ang and Mr. Chu Kin Ming. Ms. Liang Weizhang, our independent non-executive Director, hasbeen appointed as the chairlady of the nomination committee. The primary duties of our nomination committeeare to make recommendations to our Board on the appointment and removal of Directors of our Company.

Compliance with Corporate Governance Code

Pursuant to code provision A.2 of the Corporate Governance Code, the roles of chairman and chiefexecutive officer should be separate and should not be performed by the same individual.

However, we do not have a separate chairman and chief executive officer and Mr. Ang currently performsthese two roles. Our Board believes that vesting the roles of both chairman and chief executive officer in thesame person has the benefit of ensuring the consistent leadership within our Group and enables more effectiveand efficient overall strategic planning of our Group. Our Board considers that the balance of power andauthority for the present arrangement will not be impaired and this structure will enable our Company to makeand implement decisions promptly and effectively.

Our Board will continue to review and consider splitting the roles of chairman of our Board and chiefexecutive officer of our Company at a time when it is appropriate and suitable by taking into account thecircumstances of our Group as a whole.


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Board Diversity Policy

We have adopted a board diversity policy (the ‘‘Board Diversity Policy’’) which sets out the approach toachieve diversity on our Board in order to enhance the quality of its performance. The Board Diversity Policyprovides that our Company should endeavour to ensure that our Board members have the appropriate balance ofskills, experience and diversity of perspectives that are required to support the execution of its business strategy.Pursuant to the Board Diversity Policy, we seek to achieve Board diversity through the consideration of anumber of factors, including but not limited to skills, regional and industry experience, cultural and educationalbackground, ethnicity, age and gender. After Listing, our Nomination Committee will review the Board DiversityPolicy from time to time to ensure its continued effectiveness and monitor and report annually in our corporategovernance report about the implementation of the Board Diversity Policy.

COMPLIANCE ADVISER

We have appointed Orient Capital (Hong Kong) Limited as our compliance adviser (the ‘‘ComplianceAdviser’’) upon listing of our Shares on the Stock Exchange in compliance with Rule 6A.19 of the GEM ListingRules. Pursuant to Rule 6A.23 of the GEM Listing Rules, we must consult with, and if necessary, seek advicefrom the Compliance Adviser on a timely basis in the following circumstances:

• before the publication of any regulatory announcement, circular or financial report;

• where a transaction, which might be a notifiable or connected transaction, is contemplated includingshare issues and share repurchases;

• where we propose to use the proceeds of the Share Offer in a manner different from that detailed inthis prospectus or where its business activities, developments or results deviate from any forecast,estimate, or other information in this prospectus; and

• where the Stock Exchange makes an inquiry of our Company under Rule 17.11 of the GEM ListingRules.

The term of the appointment shall commence on the Listing Date and end on the date on which ourCompany complies with Rule 18.03 of the GEM Listing Rules in respect of our financial results for the secondfull financial year commencing after the Listing Date or until the agreement is terminated, whichever is earlier.


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SUBSTANTIAL SHAREHOLDERS

So far as our Directors are aware, immediately following completion of the Capitalisation Issue and theShare Offer (without taking into account any Shares which may be issued upon the exercise of the Offer SizeAdjustment Option, and the options which may be granted under the Share Option Scheme), the followingpersons will have interests or short positions in our Shares or underlying Shares which would be required to bedisclosed to us and the Stock Exchange under the provisions of Divisions 2 and 3 of Part XV of the SFO, or whowill be directly or indirectly, interested in 10% or more of the nominal value of any class of share capitalcarrying rights to vote in all circumstances at general meetings of any other member of our Group:

At the Latest Practicable Date

Immediately after completion ofthe Share Offer andCapitalisation Issue

NameNumber of

Shares(1)

Approximatepercentage ofshareholding

Number ofShares(Note1)


Capacity/Nature of interest

Red Link(Note2) 6,313,300(L) 63.13% 378,798,000(L) 44.56% Beneficial owner

Ms. FF Lim(Note2) 6,313,300(L) 63.13% 378,798,000(L) 44.56% Interest in a controlledcorporation

Mr. Ng Chee Keen(Note2) 6,313,300(L) 63.13% 378,798,000(L) 44.56% Interest of spouse(spouse of Ms. FFLim)

Mr. Ang(Note2) 6,313,300(L) 63.13% 378,798,000(L) 44.56% Interest in a controlledcorporation

Ms. LL Lim(Note2) 6,313,300(L) 63.13% 378,798,000(L) 44.56% Interest of spouse(spouse of Mr. Ang)

Mr. Chee 811,700(L) 8.12% 48,702,000(L) 5.73% Beneficial owner

Mr. Chong 807,500(L) 8.08% 48,450,000(L) 5.70% Beneficial owner

Notes:

1 The letter ‘‘L’’ denotes the entity/person’s long position in our Shares.

2 The entire issued share capital of Red Link is owned by Ms. FF Lim as to 54.70% and Mr. Ang as to 45.30%. The spouse ofMs. FF Lim is Mr. Ng Chee Keen and the spouse of Mr. Ang is Ms. LL Lim. Accordingly, Ms. FF Lim, Mr. Ang, Mr. Ng CheeKeen and Ms. LL Lim are all deemed to be interested in all the Shares held by Red Link by virtue of the SFO.


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Save as disclosed above, our Directors are not aware of any other persons who will, immediately followingcompletion of the Share Offer and the Capitalisation Issue (without taking into account any Shares which may beissued upon the exercise of the Offer Size Adjustment Option, and the options which may be granted under theShare Option Scheme), have interests or short positions in our Shares or underlying Shares which would berequired to be disclosed to us and the Stock Exchange under the provisions of Divisions 2 and 3 of Part XV ofthe SFO, or who will be directly or indirectly, interested in 10% or more of the nominal value of any class ofshare capital carrying rights to vote in all circumstances at general meetings of our Company or any of thesubsidiaries.

None of our Substantial Shareholders or their respective close associates is engaged in, or interested in anybusiness or interest (other than that of our Group) which, directly or indirectly, competes or may compete withour business, or has or may have any conflict of interests with our Group.

UNDERTAKINGS

Each of the Controlling Shareholders has given certain undertakings in respect of the Shares held by he/she/it to our Company, the Sole Sponsor, the Joint Global Coordinators (for themselves and on behalf of thePublic Offer Underwriters) and the Stock Exchange, details of which are set out under the paragraph headed‘‘Underwriting – Undertakings’’ in this prospectus. Our Controlling Shareholders have also given undertakings inrespect of the Shares to our Company and the Stock Exchange as required by Rules 13.16A(1) and 13.19 of theGEM Listing Rules.


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SHARE CAPITAL

The following is a summary of the authorised and issued share capital of our Company as at the date ofthis prospectus and immediately after completion of the Capitalisation Issue and the Share Offer:

NumberAggregate par

values(HK$)

Authorised share capital:

16,000,000,000 Shares 160,000,000

Issued and to be issued, fully paid or credited as fully paid:

10,000,000 Shares in issue at the date of this prospectus 100,000590,000,000 Shares to be issued pursuant to the Capitalisation Issue 5,900,000250,000,000 Shares to be issued under the Share Offer 2,500,000

Total: 850,000,000 Shares 8,500,000

Note: If the Offer Size Adjustment Option is exercised in full, an aggregate of 37,500,000 additional Shares will be allotted andissued by our Company, resulting in a total issued share capital of 887,500,000 Shares with an aggregate nominal value ofHK$8,875,000.

Assumptions

The above table assumes the Share Offer and the Capitalisation Issue become unconditional and the issueof Shares pursuant thereto are made as described above. It does not take into account any Shares which may beissued upon the exercise of options which may be granted under the Share Option Scheme or the Offer SizeAdjustment Option or of any Shares which may be allotted and issued or repurchased by our Company under thegeneral mandates for the allotment and issue or repurchase of Shares granted to our Directors as referred tobelow or otherwise.

MINIMUM PUBLIC FLOAT

Pursuant to Rule 11.23(7) of the GEM Listing Rules, at the time of Listing and at all times thereafter, ourCompany must maintain the minimum prescribed percentage of 25% of the total issued share capital of ourCompany in the hands of the public (as defined in the GEM Listing Rules).

RANKING

The Offer Shares and the Shares which may be issued under the Offer Size Adjustment Option or upon theexercise of any options which may be granted under the Share Option Scheme will rank equally with all of ourShares now in issue or to be issued, and will qualify for all dividends or other distributions declared, made orpaid on our Shares after the date of this prospectus, except for entitlement under the Capitalisation Issue.

SHARE CAPITAL

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ISSUING MANDATE

Subject to the Share Offer becoming unconditional, our Directors have been granted a generalunconditional mandate to allot, issue and deal with Shares with an aggregate number of such Shares notexceeding the sum of:

(i) 20% of the number of Shares in issue as enlarged by the Share Offer and the Capitalisation Issue, butexcluding any Shares which may be issued upon the exercise of the Offer Size Adjustment Option orany option that may be granted under the Share Option Scheme; and

(ii) the number of such Shares which may be repurchased by our Company pursuant to the RepurchaseMandate (as mentioned below).

The Issuing Mandate does not apply to situations where our Directors allot, issue or deal in Shares by wayof a rights issue, scrip dividend schemes or similar arrangements providing for the allotment and issue of Sharesin lieu of the whole or in part of any dividend in accordance with the Articles, or pursuant to the exercise of anysubscription or conversion rights attaching to any warrants or any securities which are convertible into Shares, orpursuant to the exercise of any options that may be granted under the Share Option Scheme, or under the ShareOffer or the Capitalisation Issue or upon the exercise of the Offer Size Adjustment Option. Our Directors may,in addition to the Shares which they are authorised to issue under the Issuing Mandate, allot, issue and deal inShares pursuant to a rights issue, the exercise of subscription rights attaching to any warrants of our Company,scrip dividends or similar arrangements or the exercise of any options that may be granted under the ShareOption Scheme or any other option scheme or similar arrangement for the time being adopted.

The Issuing Mandate will expire upon the earliest occurrence of any of the following:

• at the conclusion of our next annual general meeting;

• on the date by which our next annual general meeting is required by the Articles or any applicablelaws to be held; or

• when the authority given to our Directors is revoked or varied by an ordinary resolution passed byour Shareholders in general meeting.

For further details of the Issuing mandate, please refer to the paragraph headed ‘‘1. Further informationabout our Group – 1.3 Resolutions in writing of our Shareholders passed on 18 September 2019’’ in AppendixIV to this prospectus.

REPURCHASE MANDATE

Subject to the Share Offer becoming unconditional, our Directors have been granted a generalunconditional mandate to exercise all the powers of our Company to repurchase Shares not exceeding 10% ofthe number of Shares in issue, as enlarged by the Share Offer and the Capitalisation Issue, but excluding anyShares that may be issued upon the exercise of the Offer Size Adjustment Option and any option that may begranted under the Share Option Scheme. The Repurchase Mandate only relates to repurchases made on the StockExchange, or on any other stock exchange on which the Shares are listed (and which is recognised by the SFCand the Stock Exchange for this purpose), and which are made in accordance with the GEM Listing Rules.Please refer to the paragraph headed ‘‘1. Further information about of our Group – 1.7 Repurchases by ourCompany of our own securities’’ in Appendix IV to this prospectus for the summary of the relevant requirementsunder the GEM Listing Rules.

SHARE CAPITAL

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The Repurchase Mandate will expire upon the earliest occurrence of any of the following:

• at the conclusion of our next annual general meeting;

• on the date by which our next annual general meeting is required by the Articles or any applicablelaws to be held; or

• when the authority given to our Directors is revoked or varied by an ordinary resolution passed byour Shareholders in general meeting.

For further details of the Repurchase Mandate, please refer to the paragraph headed ‘‘1. Further informationabout our Group – 1.3 Resolutions in writing of our Shareholders passed on 18 September 2019’’ in AppendixIV to this prospectus.

SHARE CAPITAL

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You should read this section in conjunction with our audited consolidated financial statements, includingthe notes thereto, as set out in the Accountants’ Report in Appendix I to this prospectus. Our Group’sconsolidated financial statements have been prepared in accordance with the HKFRSs. You should read theentire Accountants’ Report and not merely rely on the information contained in this section.

The following discussion and analysis contain certain forward-looking statements that reflect the currentviews with respect to future events and financial performance. These statements are based on assumptions andanalysis made by us in light of our experience and perception of historical trends, current condition andexpected future developments, as well as other factors that we believe are appropriate under thecircumstances. However, whether actual outcomes and developments will meet our expectations andpredictions depends on a number of risks and uncertainties over which we do not have control. Please refer tothe sections headed ‘‘Risk Factors’’ and ‘‘Forward-looking Statement’’ in this prospectus for further details.

Our financial year begins on 1 January and ends on 31 December. All references to ‘‘FY2016’’,‘‘FY2017’’, ‘‘FY2018’’, ‘‘1Q2018’’ and ‘‘1Q2019’’ mean the financial years ended 31 December 2016,31 December 2017, and 31 December 2018, and the three months ended 31 March 2018 and 31 March 2019respectively.

OVERVIEW

We are a one-stop after-market automotive service provider in Singapore offering comprehensive andintegrated automotive related solutions to customers. According to the Frost & Sullivan Report, we (i) rankedfirst among the independent after-market automotive service providers with a market share of approximately8.4% in terms of revenue derived from after-market automotive service provided by independent after-marketautomotive service providers in Singapore in 2018; and (ii) ranked third among the after-market automotiveservice providers with a market share of approximately 5.3% in terms of revenue derived from after-marketautomotive service in Singapore in 2018. We principally engage in the provision of a comprehensive range ofafter-market automotive services, with a focus on inspection, maintenance and repair services. We also engage in(i) offering short-term and long-term car rental services; and (ii) supplying passenger car spare parts, accessoriesand automotive equipment to customers in Singapore and overseas countries (i.e. Sri Lanka and Myanmar). Ourtotal revenue was approximately S$16.3 million, S$18.6 million and S$18.0 million for FY2016, FY2017 andFY2018, respectively. We recorded a net profit of approximately S$1.4 million, S$1.9 million for FY2016 andFY2017, respectively. We recorded a net loss of approximately S$0.2 million for FY2018 which was due to thenon-recurring Listing expenses. Excluding the effects of the non-recurring Listing expenses, our adjusted netprofit for FY2018 amounted to approximately S$2.3 million.

Our total revenue was approximately S$4.3 million and approximately S$4.4 million for 1Q2018 and1Q2019, respectively. We recorded a net profit of approximately S$60,000 and approximately S$0.1 million for1Q2018 and 1Q2019, respectively.

Our principal businesses can be broadly categorised as follows:

(i) Provision of after-market automotive services

We generate a significant amount of our revenue from the provision of after-market automotiveservices, with a focus on inspection, maintenance and repair services to our customers in Singapore. Wemay also from time to time provide modification, tuning and grooming services to our customers inSingapore, the revenue derived from the provision of such service accounted for less than 1.0% of our totalrevenue during the Track Record Period. Revenue from the provision of our after-market automotiveservices accounted for approximately 92.5%, 85.8%, 79.3% and 78.2% of our total revenue for FY2016,FY2017, FY2018 and 1Q2019, respectively.

FINANCIAL INFORMATION

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We have been offering motor warranties to individual and corporate customers on or before31 December 2016, where we carry out specific warranty repair and/or replacement arising from productdefects over the warranty period for warranty fees payable to us by our customers.

However, with effect from 1 January 2017, in light of the requirement of the MonetaryAuthority of Singapore, we restructured our motor warranty business and co-operated with Customer F.Pursuant to this collaboration, we have transferred all (i.e. 5,538) motor warranty agreements enteredinto by us up to and including 31 December 2016 with an outstanding obligation of approximatelyS$2.2 million to Customer F. New car owners who participate in the motor warranty programme ofCustomer F will pay a premium directly to Customer F. When such vehicles are sent in for repairduring the warranty period, we receive service fees for such in-warranty repairs from Customer Fbased on a pre-agreed formula. We are also entitled to a portion of the premium residue after theexpiry of the warranty period from Customer F. Accordingly, revenue derived from these services ispaid for by Customer F and is recognised as warranty related business. Revenue derived from theprovision of warranty related business was approximately S$1.1 million, S$1.5 million and S$0.3million, representing approximately 6.9%, 10.6% and 8.9% of our total revenue generated fromafter-market automotive services for FY2017, FY2018 and 1Q2019, respectively.

In addition to revenue generated under warranty related business, our Group also generated revenueby providing inspection, maintenance and non-insured repair services (that are not covered under CustomerF’s motor warranty programme) and insured repair services to car owners who participated in Customer F’smotor warranty programme. Pursuant to Customer F’s motor warranty programme, car owners whoparticipate in the motor warranty programme shall ensure that their vehicles shall only be serviced and/orrepaired by one of our Group’s workshops, failing which the car owner’s warranty with Customer F shallbe voided automatically without reimbursements. Notwithstanding this requirement, pursuant to the termsand conditions of the motor warranty programme, accident repairs can be carried out at any workshop,provided that the vehicle is then re-inspected by us within seven days after the completion of such repairs.Therefore, car owners who participate in Customer F’s motor warranty programme may engage us for after-market automotive services which are not covered under the motor warranty programme and repairs fordamage arising from accident covered under insurance claims. The workflow and nature of the repair andmaintenance services provided by our Group for repair and maintenance services provided under the motorwarranty programme and those not covered by the motor warranty programme are the same. However, ifthe replaced parts are covered under the motor warranty programme, our Group will invoice Customer Ffor the servicing jobs. For replaced parts that are not covered under the motor warranty programme, thepassenger car owner would pay for the servicing jobs. Therefore, as the revenue derived from theseservices is paid for by the car owners themselves, such revenue is recognised as inspection, maintenanceand non-insured repair services. Revenue derived from the provision of after-market services (that is notcovered under motor warranty programme) to car owners who participated in the motor warrantyprogramme was approximately S$3.9 million, S$4.5 million and S$1.1 million, representing approximately24.3%, 31.5% and 33.2% of our total revenue generated from after-market automotive services for FY2017,FY2018 and 1Q2019, respectively.

For details of the arrangement, please refer to the paragraphs headed ‘‘Business – Our business –

After-market automotive services – Co-operation with the renowned insurance company for warrantyrelated business’’, ‘‘Business – Customers – Our Motor Warranties Transfer Agreement with Customer F’’and ‘‘Business – Customers – Our Exclusive Service Agreement with Customer F – The motor warrantyprogramme’’ in this prospectus.


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(ii) Provision of car rental services

We generate a steady and recurring revenue from the provision of car rental services. Our car rentalservices include short-term and long-term rentals. In addition, we are able to offer various value-addedservices such as free towing service, battery recovery, courtesy car, and vehicle delivery, if required.Revenue from the provision of our car rental services accounted for approximately 3.8%, 12.1%, 13.6%and 14.5% of our total revenue for FY2016, FY2017, FY2018 and 1Q2019, respectively.

(iii) Supply of passenger car spare parts, accessories and automotive equipment

We also supply passenger car spare parts, accessories and automotive equipment to our customers inSingapore and overseas countries (i.e. Sri Lanka and Myanmar), who are independent automotive servicecentres. Revenue from the supply of passenger car spare parts, accessories and automotive equipmentaccounted for approximately 3.7%, 2.1%, 7.1% and 7.2% of our total revenue for FY2016, FY2017,FY2018 and 1Q2019, respectively.

KEY FACTORS AFFECTING OUR RESULTS OF OUR OPERATION AND FINANCIAL CONDITION

Our results of operations and financial position have been and will continue to be affected by a number offactors, many of which may be beyond our control, including the factors set out in the section headed ‘‘RiskFactors’’ in this prospectus and those set out below:

Changes in quota and prices of COE

Our business and operating results have been, and will continue to be, affected by the change in quotaand prices of COE in Singapore. In Singapore, car owners must first obtain a COE in the appropriatevehicle category, which represents a right to vehicle ownership and use of limited road space for 10 years.At the end of the 10-year COE period, car owners could choose to deregister or revalidate their COE foranother 5 or 10 years by paying the prevailing quota premium. The Singapore government controls thenumber of vehicles in use by limiting the quota of the COE issued of which the COE price is in turnaffected by demand and supply. For further details of the relationship between the total car population inSingapore, the COE quota and the COE price, please refer to the section headed ‘‘Industry Overview’’ inthis prospectus.

However, if the Singapore government takes any extreme measures to reduce the total car populationin Singapore, either by way of reducing the COE quota significantly or not issuing any new COE quota toreplace the number of de-registered passenger cars, it may reduce the number of passenger cars inSingapore and hence may negatively affect the demand for our after-market automotive services.

Given that the renewal of existing COE is based on the then prevailing COE price, the prevailingCOE price will affect the decisions of current passenger car owners on whether to renew their existingCOE which will in turn affect the proportion of aged passenger cars in Singapore. Passenger cars with alonger service life require longer servicing hours and consume more parts, resulting in a higher service feethan cars of younger age. In addition, the prevailing COE price will also affect our Group’s car rentalbusiness as it will affect potential buyers’ decision on whether to purchase or rent a car. A high COE pricemay encourage car user to rent instead of buying a passenger car, thereby driving up the demand for ourcar rental services. However, it will also affect our rental fleet expansion plans in terms of timing andincrease in the number of rental passenger cars as the COE price is one of the major cost in purchasing apassenger car in Singapore along with the car price and financing cost.


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As such, we believe the change in quota and prices of COE is the key factor in driving the demandfor our after-market automotive services and car rental services respectively and thus affect ourprofitability and financial performance.

Service and product mix

Our revenue and profitability is affected by our service and product mix as different services andproducts have different selling prices and margin. Our service and product mix is largely dependent on thedemand of our customers. During the Track Record Period, over 78.2% of our revenue was derived fromthe provision of after-market automotive services. Our after-market automotive services comprise,inspection, maintenance, repair, modification, tuning and grooming of passenger car. The pricing and costof different types of after-market automotive services we provide may vary depending on the workperformed and materials used. As for our car rental services, our pricing and costs of services are generallydependent on the length of the rental tenure and the type of vehicle rented. Therefore, changes in serviceand product mix in connection with our provision of services may affect our profitability and financialperformance.

Ability to continue providing after-market automotive services to customers who participate inCustomer F’s motor warranty programme

Our Group has cooperated with a renowned insurance company (i.e. Customer F) as an exclusiveservice provider for Customer F’s motor warranty programme since January 2017. The exclusivityarrangement is for a period of six years, expiring on 31 December 2022. Since our co-operation withCustomer F, we have provided services to 566, 845 and 196 units of passenger cars for FY2017, FY2018and 1Q2019 respectively under the motor warranty programme, accounting for approximately 6.9%, 10.6%and 8.9% respectively, of our total revenue generated from after-market automotive services for the sameperiod.

In addition, our Group also provides inspection, maintenance and non-insured repair services that arenot covered under motor warranty programme and insured repair services to car owners who participated inthe motor warranty programme. Since our co-operation with Customer F in January 2017, we haveprovided after-market automotive services (that is not covered under the motor warranty programme) to10,922, 11,226 and 2,342 units of passenger cars owned by car owners who participated in the motorwarranty programme for FY2017, FY2018 and 1Q2019 respectively, accounting for approximately 24.3%,31.5% and 33.2% of our total revenue generated from after-market automotive services for the same period.

Therefore, if our Group is unable to continue to act as a service provider for Customer F, ourprofitability and financial performance may be adversely affected.

Availability and cost of passenger car spare parts, accessories and consumables

Our business and results of operations are dependent on our ability to secure a sufficient and reliablesupply of passenger car spare parts, accessories and consumables used in the provision of our after-marketactivities services. As we aim to provide timely after-market automotive services for different makes andmodels of passenger cars, we generally keep a small quantity of different passenger car spare parts andaccessories for most makes and models as safety stock. For FY2016, FY2017, FY2018 and 1Q2019, ourcost of materials amounted to approximately S$6.5 million, S$6.1 million, S$5.3 million and S$1.2 million,respectively, representing approximately 67.5%, 61.4%, 58.5% and 55.8% of our total cost of sales for therespective periods. Shortages or delays in the supply of passenger car spare parts, accessories andconsumables to the extent that we cannot procure them on acceptable terms from other sources in time willadversely affect our sales, profitability and customer relations.


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Ability to control our employee benefit expenses

Our operations are labour intensive as we need to maintain adequate employees, particularly skilledworkshop technicians to serve our customers. Our employee benefit expenses in aggregate constituted thesecond largest expenditure of our Group during the Track Record Period. For FY2016, FY2017, FY2018and 1Q2019, our employee benefit expenses amounted to approximately S$4.3 million, S$4.9 million,S$4.6 million and S$1.2 million, respectively, representing approximately 26.4%, 26.3%, 25.6% and 27.5%of our total revenue for the respective periods. Therefore, our ability to control our employee benefitexpenses in connection with the provision of our services may affect our profitability and financialperformance.

Fluctuations in our expenses related to our leased properties

We rent all the properties in which we conduct our business operations. For FY2016, FY2017,FY2018, our rental and utilities expenses amounted to approximately S$1.5 million, S$1.6 million andS$1.6 million, respectively, representing approximately 9.2%, 8.6% and 8.9% of our total revenue for therespective periods. With HKFRS 16 coming into effect on 1 January 2019, we recognised right-of-useassets for our leased properties of approximately S$3.2 million as at 1 January 2019. Accordingly, werecognised depreciation of right-of-use assets arising from our leased properties of approximately S$0.4million for 1Q2019. We have also recognised rental expenses from short-term leases of approximatelyS$58,000 for 1Q2019. The aggregate expenses related to our leased properties amounted to approximatelyS$0.5 million in 1Q2019, representing approximately 10.5% of our total revenue in 1Q2019. Any materialfluctuations in our expenses related to our leased properties may adversely affect our profitability andfinancial performance.

BASIS OF PREPARATION AND PRESENTATION

Set out in Note 2 to the Accountants’ Report is the basis of preparation and presentation for the financialinformation in the Accountants’ Report.

The financial information of our Group has been prepared in accordance with HKFRSs. In addition, thefinancial information includes applicable disclosures required by the GEM Listing Rules.

Pursuant to the Reorganisation, our Company, which was incorporated on 14 March 2018, became theholding company of the companies now comprising our Group. The consolidated statements of profit or loss andother comprehensive income, the consolidated statements of changes in equity and the consolidated statements ofcash flows are prepared as if the current group structure had been in existence throughout the Track RecordPeriod. The consolidated statements of financial position, as at 31 December 2016 and 31 December 2017,31 December 2018 and 31 March 2019, present the assets and liabilities of the companies now comprising ourGroup, as if the current group structure had been in existence on those dates.

The financial information has been prepared under the historical cost basis. The financial information ispresented in Singapore dollar and all values are rounded to the nearest thousand, unless otherwise indicated.


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HKFRS 9 ‘‘Financial Instruments’’ and HKFRS 15 ‘‘Revenue from Contracts with Customers’’ are effectivefor the annual periods beginning on or after 1 January 2018 and earlier application is permitted. Our Group hasapplied HKFRS 9 and HKFRS 15 consistently throughout the Track Record Period. It is considered that theadoption of HKFRS 9 and HKFRS 15 did not have any significant impact on the financial position and financialperformance of our Group during the Track Record Period.

SIGNIFICANT ACCOUNTING POLICIES

Our significant accounting policies are set forth in detail in Note 4 to the Accountants’ Report whichinclude:

Revenue Recognition

Revenue is recognised to depict the transfer of promised goods or services to customers in an amountthat reflects the consideration to which our Group expects to be entitled in exchange for those goods orservices. Specifically, our Group uses a 5-step approach to revenue recognition.

• Step 1: Identify the contract(s) with a customer

• Step 2: Identify the performance obligations in the contract

• Step 3: Determine the transaction price

• Step 4: Allocate the transaction price to the performance obligations in the contract

• Step 5: Recognise revenue when (or as) the entity satisfies a performance obligation

Our Group recognises revenue when (or as) a performance obligation is satisfied (i.e. when control ofthe goods or services underlying in particular performance obligation is transferred to customers).

Control of the goods or services may be transferred over time or at a point in time. Control of theservices is transferred over time if:

• the customer simultaneously receives and consumes the benefits provided by our Group’sperformance as we perform;

• our Group’s performance creates and enhances an asset that the customer controls as weperform; or

• our Group’s performance does not create an asset with an alternative use to our Group and wehave an enforceable right to payment for performance completed to date.

If control of the goods or services transfers over time, revenue is recognised over the period of thecontract by reference to progress towards complete satisfaction of that performance obligation. Otherwise,revenue is recognised at a point in time when the customer obtains control of the goods or services.


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Where the contract contains a financing component which provides a significant financing benefit tothe customer for more than 12 months, revenue is measured at the present value of the amount receivable,discounted using the discount rate that would be reflected in a separate financing transaction with thecustomer, and interest income is accrued separately under effective interest method. Where the contractcontains a financing component which provides a significant financing benefit to the group, revenuerecognised under that contract includes the interest expense accreted on the contract liability undereffective interest method. Our Group takes advantage of the practical expedient in paragraph 63 of HKFRS15 and does not adjust the consideration for any effects of a significant financing component if the periodof financing is 12 months or less.

The likelihood of our Group’s earning contractual bonuses for early completion or sufferingcontractual penalties for late completion are taken into account in making estimates, such that revenue isonly recognised to the extent that it is highly probable that a significant reversal in the amount ofcumulative revenue recognised will not occur.

(a) Automotive after-market service income

Service income from the provision of repair and maintenance of motor vehicles is recognisedover time as our Group satisfies its performance obligation.

(b) Car rental income

Rental income under operating leases is recognised on a straight-line basis over the term of therelevant lease.

(c) Warranty related business income

Warranty income under our Group’s motor warranty programme is recognised as revenue overthe warranty period on a straight-line basis. For the warranty programme entered into by a customerwith a renowned insurance company (i.e. Customer F) of which our Group is the designated serviceworkshop, the warranty income is recognised over time as we satisfy our performance obligation.

(d) Income from the supply of passenger car spare parts, accessories and automotiveequipment

Income from automotive supply business is recognised when the control of the goods istransferred to customers, being when the products are accepted by customers. There was nounfulfilled obligation that could affect the customers’ acceptance of the products. Fee income forlicensing computer software inbuilt in the automotive equipment is recognised when the control of thegoods is transferred to customers.

For further details, please refer to Note 4 to the Accountants’ Report.

IMPACT OF ADOPTION OF NEW AMENDMENTS TO CERTAIN ACCOUNTING POLICIES

HKFRS 9 Financial Instruments (‘‘HKFRS 9’’) and HKFRS 15 Revenue from Contracts with Customers(‘‘HKFRS 15’’) are effective for annual accounting periods beginning on or after 1 January 2018 and earlierapplication is permitted. We have applied HKFRS 9 and HKFRS 15 consistently throughout the Track RecordPeriod.


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HKFRS 16 Leases (‘‘HKFRS 16’’) is effective for annual accounting periods beginning on or after1 January 2019. From the lessee’s perspective, HKFRS 16 will result in almost all leases being recognised on theconsolidated statement of financial position, as the distinction between operating and finance leases is removed.Under the new standard, an asset (the right-of-use of the leased item) and a financial liability (the lease liability)to pay rentals are recognised. The only exceptions are short-term and low-value leases.

We have applied HKFRS 16 from its mandatory adoption date of 1 January 2019. We adopted thesimplified transition approach and did not restate comparative amounts for the years prior to first adoption. Theeffects of the adoption of HKFRS 16 on the Group’s financial position on 1 January 2019 are as follows:-

1. Derecognized property, plant and equipment (motor vehicles) with carrying amount of SGD9,895,000and the related financial lease obligations with carrying amount of SGD6,907,000, and recognizedthese amounts as right-of-use assets and lease liabilities, respectively; and

2. Recognized right-of-use assets and lease liabilities of SGD3,185,000 in respect of leases of premisespreviously treated as operating leases under HKAS 17 prior to 1 January 2019.

The effects of the adoption of HKFRS 16 on the Group’s financial performance for the period from1 January 2019 to 31 March 2019 is not material since the amounts of depreciation of right-of-use assets andinterest element of lease liabilities charged is not materially different from the depreciation of those property,plant and equipment (motor vehicles) reclassified as right-of-use assets and rental expenses of leases of premisespreviously treated as operating leases under HKAS 17.

The effects of the adoption of HKFRS 16 on the Group’s financial position on 31 March 2019 are asfollows:–

1. Increased total non-current assets (and hence total assets) of SGD2,773,000 as a result of recognizingright-of-use assets in respect of leases of premises previously treated as operating leases under HKAS17 prior to 1 January 2019;

2. Increased total liabilities of SGD2,791,000 (current liabilities of SGD1,582,000 and non-currentliabilities of SGD1,209,000) as a result of recognizing the lease liabilities in respect of leases ofpremises previously treated as operating leases under HKAS 17 prior to 1 January 2019; and hence

3. Decreased net assets of SGD18,000.

The impacts on adoption of HKFRS 16 on the Group’s key financial ratios as at 31 March 2019 are asfollows:-

Gearing ratio changed from 1.0 times to 1.4 times

Current ratio changed from 1.4 times to 1.1 times

Quick ratio changed from 1.2 times to 1.0 times


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CRITICAL ACCOUNTING ESTIMATES AND JUDGMENTS

In the process of applying our Group’s accounting policies, our management may exercise judgments thathave an impact on the amounts recognised in the financial statements in respect of such typical areas as:

Useful lives of property, plan and equipment

The estimated useful lives of property, plant and equipment are reviewed periodically and are updatedif expectations differ from previous estimates due to changes in the factors such as the expected usage,wear and tear of the assets and technical obsolescence.

Impairment of trade and other receivables

Our management reviews trade and other receivables on a periodic basis and makes impairment basedon an assessment of the collectability of these receivables, taking into account the debtors’ financialconditions, any recent settlement plan committed by the debtors, and their status of settlement historicallyand subsequent to period end.

Impairment of assets

Our management conducts impairment of assets when events or changes in circumstances indicatetheir carrying amounts may not be recoverable annually in accordance with relevant accounting standards.

Determining the method to estimate variable consideration and assessing the constraint for thewarranty income

Certain contracts for the warranty income include clauses might affect the amount of warranty incomerecognised that give rise to variable consideration. In estimating the variable consideration, our Group isrequired to use either the expected value method or the most likely amount method based on which methodbetter predicts the amount of consideration to which it will be entitled.

Our Group determined that the expected value method is the appropriate method to use in estimatingthe variable consideration for the warranty income, given the large number of warranty contracts that havesimilar characteristics. In estimating the variable consideration for the warranty income, our Group againdetermined that the expected value method is appropriate given the multiple volume thresholds achievable.

Before including any amount of warranty income in the transaction price, our Group considerswhether the amount of variable consideration is constrained. Our Group determined that the estimates ofvariable consideration are not constrained based on historical experience, business forecast and the currenteconomic environment, as well as the uncertainty being resolved within a short period of time.

For further details on the critical accounting judgments and estimates for the financial information,please refer to Note 5 to the Accountants’ Report.

RESULTS OF OPERATIONS

The following table sets out our consolidated statements of profit or loss and other comprehensive incomefor the years and periods indicated, information of which is extracted from the Accountants’ Report. Potentialinvestors should read this section in conjunction with the Accountants’ Report and not rely merely on theinformation contained in this section.


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CONSOLIDATED STATEMENTS OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME

FY2016 FY2017 FY2018 1Q2018 1Q2019S$’000 S$’000 S$’000 S$’000 S$’000

(unaudited)

Revenue 16,335 18,641 17,985 4,285 4,357

Other net income and gains 742 205 276 64 87

Items of expensesCost of materials (6,462) (6,124) (5,279) (1,420) (1,172)Employee benefit expenses (4,348) (4,885) (4,647) (1,242) (1,199)Other expenses (2,727) (3,150) (3,319) (795) (439)Depreciation of property, plant and

equipment (1,302) (1,862) (1,930) (479) (97)Depreciation of right-of-use assets – – – – (779)Marketing and advertising

expenses (198) (178) (78) (15) (69)Finance costs (102) (308) (328) (86) (103)Listing expenses – – (2,494) (185) (317)Impairment of trade receivables (27) (115) (93) (27) (19)

Profit before income tax expense 1,911 2,224 93 100 250

Income tax expense (482) (318) (336) (40) (119)

Profit/(Loss) for the year/period 1,429 1,906 (243) 60 131

Profit/(Loss) attributable to:Owners of the Company 1,154 1,773 (273) 30 131Non-controlling interests 275 133 30 30 –

1,429 1,906 (243) 60 131

Total comprehensive incomeattributable to:Owners of the Company 1,154 1,773 (273) 30 131Non-controlling interests 275 133 30 30 –

1,429 1,906 (243) 60 131


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DESCRIPTION OF SELECTED COMPONENTS OF CONSOLIDATED STATEMENTS OF PROFIT ORLOSS AND OTHER COMPREHENSIVE INCOME

Revenue by business segments

For FY2016 and FY2017, our revenue was approximately S$16.3 million and approximately S$18.6million, respectively, representing an increase of approximately S$2.3 million (or 14.1%). Our revenue decreasedslightly by approximately S$0.6 million (or 3.5%) from approximately S$18.6 million in FY2017 toapproximately S$18.0 million in FY2018. Our revenue remained relatively stable and amounted toapproximately S$4.3 million and S$4.4 million for 1Q2018 and 1Q2019, respectively. We derived our revenuefrom three segments, namely: (i) after-market automotive services; (ii) car rental services; and (iii) supply ofpassenger car spare parts, accessories and automotive equipment. The majority of our revenue was derived fromthe provision of after-market automotive services which accounted for approximately 92.5%, 85.8%, 79.3% and78.2% of our total revenue for FY2016, FY2017, FY2018 and 1Q2019, respectively. The table below sets forthour revenue by business segments for the years/periods indicated:

FY2016 FY2017 FY2018

1Q2018

(unaudited) 1Q2019

S$’000 % S$’000 % S$’000 % S$’000 % S$’000 %

After-market automotive services

–Inspection, maintenance and non-insured

repair services 12,876 78.8 12,782 68.6 9,993 55.6 2,611 60.9 2,626 60.3

–Insured repair services 995 6.1 2,110 11.3 2,750 15.3 447 10.4 476 10.9

–Warranty related business (Note 1) 1,248 7.6 1,102 5.9 1,510 8.4 439 10.3 304 7.0

Sub-total 15,119 92.5 15,994 85.8 14,253 79.3 3,497 81.6 3,406 78.2


Supply of passenger car spare parts,

accessories and automotive

equipment 598 3.7 395 2.1 1,278 7.1 140 3.3 317 7.2

Total 16,335 100.0 18,641 100.0 17,985 100 4,285 100.0 4,357 100.0


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The table below sets forth the number and types of passenger cars which we provided after-marketautomotive services for the financial years/periods indicated:

FY2016 FY2017 FY2018 1Q2018 1Q2019Units Units Units Units Units

Inspection, maintenance andnon-insured repair services

– Luxury and ultra-luxury supercar 9,203 8,030 7,088 1,829 1,441– Entry and medium level car 6,361 16,451 14,455 3,879 3,379

Sub-Total 15,564 24,481 21,543 5,708 4,820

Insured repair services– Luxury and ultra-luxury supercar 7 93 100 23 18– Entry and medium level car 82 116 350 81 60

Sub-Total 89 209 450 104 78

Warranty related business– Luxury and ultra-luxury supercar Note 1 274 417 88 84– Entry and medium level car Note 1 292 428 82 112

Sub-Total Note 1 566 845 170 196

Total Number of Passenger Cars(Note 2) 15,653 25,256 22,838 5,982 5,094

Note:

1. Prior to our collaboration with Customer F in FY2017, revenue generated from warranty related business in FY2016 wasderived from the amortisation of the warranty premium we collected under our Group’s own warranty programme on a straight-line basis. Thus, the revenue generated is not related to the number of passenger cars which we provided warranty relatedservices. As at 31 December 2016, there were 5,538 passenger cars under the warranty programme offered by our Group.

Since the collaboration with Customer F in FY2017, revenue generated from the warranty related business is recognised whenour Group satisfies our performance obligation under the Exclusive Service Agreement. For further details of the ExclusiveService Agreement, please refer to the paragraph head ‘‘Business – Our Exclusive Service Agreement with Customer F – Themotor warranty programme’’ in this prospectus.

2. The number of passenger cars which we provided after-market automotive services was based on the invoices issued by ourGroup during that respective year.


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The table below sets forth the average servicing fees per vehicle by types of vehicle for our (i) inspection,maintenance and non-insured repair services; (ii) insured repair services; and (iii) warranty related business forthe financial years indicated:

FY2016 FY2017 FY2018 1Q2018 1Q2019

Inspection, maintenance andnon-insured repair services

– Luxury and ultra-luxury supercar S$1,136 S$916 S$783 S$731 S$1,087– Entry and medium level car S$380 S$326 S$297 S$317 S$304

Average servicing fees S$827 S$520 S$457 S$450 S$538

Insured repair services (Note 1)– Luxury and ultra-luxury supercar S$35,032 S$18,209 S$17,214 S$9,273 S$16,904– Entry and medium level car S$9,145 S$3,588 S$2,940 S$2,887 S$2,857

Average servicing fees S$11,181 S$10,094 S$6,112 S$4,299 S$6,099

Warranty related business(Note 2)

– Luxury and ultra-luxury supercar – S$1,828 S$1,899 S$1,250 S$1,162– Entry and medium level car – S$952 S$1,083 S$2,724 S$1,872

Average servicing fees – S$1,376 S$1,486 S$2,013 S$1,467

Overall average servicing feesper vehicle (Note 3) S$886 S$631 S$618 S$578 S$662

Industry average servicing feesper vehicle (Note 4) S$473 S$447 S$437 N/A N/A

Notes:

1. Average servicing fee per vehicle is calculated by dividing revenue from the provision of insured repair services over the totalnumber of vehicles we provided insured repair services. The average servicing fees of insured repair is subject to higherfluctuation due to the diversity and magnitude of each repair serviced.

2. Average servicing fee per vehicle is calculated by dividing motor repair service fee received under the motor warrantyprogramme over the total number of in-warranty vehicles we provided motor repair services.

3. Overall average servicing fees per vehicle is calculated by dividing total revenue from the provision of after-market automotiveservices over the total number of vehicles serviced.

4. For analysis, please refer to the section headed “Industry Overview” in this prospectus.


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Our insured repair service generates the highest average servicing fees per vehicle among the threecategories of after-market automotive services of our Group during the Track Record Period. This is becausecustomers usually only resort to claiming compensation from insurance companies for severe damages such ascollisions which require a greater amount of spare parts and longer labour hours to complete as compared toother after-market automotive services. Moreover, Frost & Sullivan and our Directors concur, passenger carowners are more likely to claim compensation when the cost of repair from damages to the passenger cars isover the total sum of (i) the motor insurance excess (i.e. the amount which the passenger car owner must firstcontribute towards the cost of each incident which is the subject of an insurance claim) which ranges fromS$500 to S$2,000 per insurance claim plus (ii) the potential increase in motor insurance premium in thefollowing years which the passenger car owners (the policyholders) have to bear after they file with theinsurance company with their respective insurance claims.

On the other hand, warranty related business generates the second highest average servicing fees pervehicle among the three categories of aftermarket automotive services of our Group’s after-market automotiveservices during the Track Record Period. It is because the repairing works usually involve changing vehicle partsdue to the failure of mechanical and electrical parts of the car, such as the engine and gearbox which arerelatively expensive spare parts. Despite the decrease in the industry average servicing fees from FY2017 toFY2018, our Group recorded an increase of approximately 8.0% in the average servicing fee for our warrantyrelated business from approximately S$1,376 in FY2017 to approximately S$1,486 in FY2018. Our Directorsbelieve that such increase was mainly due to the increase in complexity and extensiveness of the repair jobs thatwere covered under Customer F’s motor warranty programme in FY2018.

Inspection, maintenance and non-insured repair generates the lowest average servicing fees per vehicleamong the three categories of after-market automotive services provided by our Group during the Track RecordPeriod. It is because the repairing works generally involve changing of wear and tear parts such as tires, carbattery and brake pads which are relatively cheap spare parts.

Our overall average servicing fees per vehicle decreased by approximately $255 (or approximately 28.7%)from approximately S$886 in FY2016 to approximately S$631 in FY2017. This was primarily due to the changein the proportion of the type of vehicles that we serviced in FY2017. According to Frost & Sullivan Report, theproportion of luxury and ultra-luxury supercar to the total car population in FY2016 and FY2017 was 22.6% and23.8%, respectively. The number of luxury and ultra-luxury supercars serviced to the total number of passengercars serviced by our Group was 58.8%, and 33.2% in FY2016 and FY2017, respectively. The reason for thedecrease in the proportion of luxury and ultra-luxury supercars serviced in FY2017 was mainly due to substantialincrease in the number of entry and medium level passenger car as a result of the gain in publicity from ourcollaboration with Customer F. As the dollar value charged for luxury and ultra-luxury supercars is generallymuch higher than that of entry and medium level passenger cars, the increase in the proportion of entry andmedium level passenger car has resulted in the decrease in the overall average servicing fees.

Our average servicing fees per vehicle has remained relatively stable in FY2018 and increased in 1Q2019,which was in tandem with the price trend of the industry.


We generate a significant amount of our revenue from the provision of after-market automotive services,which cover mainly the provision of inspection, maintenance and repair services to our customers in Singaporeand the provision warranty related business. Revenue from the provision of our after-market automotive servicessegment accounted for approximately 92.5%, 85.8%, 79.3% and 78.2% of our total revenue for FY2016,FY2017, FY2018 and 1Q2019, respectively.


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Revenue from our provision of after-market automotive services increased by approximately S$0.9 million(or 5.8%) from approximately S$15.1 million in FY2016 to approximately S$16.0 million in FY2017. Theincrease was attributable to the following reasons:

• Revenue from the provision of insured repair services increased by approximately S$1.1 million (or112.1%) from approximately S$1.0 million in FY2016 to approximately S$2.1 million in FY2017.The increase was mainly due to the increase in the number of insured repair jobs that were carried outin FY2017 as we have set up a motor accident concierge desk to focus on the insured repair servicessince April 2016. Due to the tedious process involved in the filing of motor insurance claim, ourmotor accident concierge desk could assist and advise passenger car owners involved in accident onthe procedures and documentation required (including the details of repair required) to file a motorinsurance claim successfully. As such, more passenger car owners have engaged us to provide repairservices as we can provide a one-stop service to them.

The increase was partially offset by the decrease in the revenue generated from our warranty relatedbusiness and the provision of inspection, maintenance and non-insured repair services.

• Revenue from the warranty related business decreased by approximately S$0.1 million (or 11.7%)from approximately S$1.2 million in FY2016 to approximately S$1.1 million in FY2017. Thedecrease was mainly due to the fact that the motor warranty programme we offered was restructuredto collaborate with Customer F as required by the Monetary Authority of Singapore in FY2017,therefore, we are only entitled to (i) incentive fee and (ii) motor repair service fee under the MotorWarranties Transfer Agreement and Exclusive Service Agreement and pre-inspection fee under theExclusive Service Agreement. For details, please refer to the paragraph headed “Business – Ourbusiness – After-market automotive services – Co-operation with the renowned insurance companyfor warranty related business”. In contrast, in FY2016 the warranty premiums we received wererecognised on a straight-line basis throughout the warranty period.

• Revenue from the provision of inspection, maintenance and non-insured repair services decreasedmarginally by approximately S$0.1 million (or 0.7%) from approximately S$12.9 million in FY2016to approximately S$12.8 million in FY2017. Although the number of passenger cars that we providedinspection, maintenance and non-insured repair services in FY2017 has increased which our Directorsbelieve was mainly due to the gain in publicity as a result of our collaboration with Customer F, theaverage revenue per passenger car serviced has declined. The Group has achieved a major milestonein its corporate history when it formed a collaboration with Customer F, a renowned insurancecompany in FY2017. For details, please refer to the paragraph headed ‘‘Business – Our business –

After-market automotive services – Co-operation with the renowned insurance company for warrantyrelated business’’ in this prospectus. As car ownership is relatively costly in Singapore due to costsrelating to COE premium, additional registration fees, road tax, insurance and the price of thepassenger cars, car owners in Singapore usually will place extra emphasis to ensure reputable andreliable workshops are chosen to provide maintenance and repair services. As our collaboration withCustomer F represents a validation of our Group’s credibility and quality of service, our Directorsbelieve that such collaboration with Customers F has solicited more customers to entrust their cars toour Group resulting in an increase in the number of passenger cars that we provided inspection,


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maintenance and non-insured repair services in FY2017. As our price list for each type of servicesunder inspection, maintenance and non-insured repair services has remained relatively stable inFY2016 and FY2017, our Directors believe the decline in the average revenue per passenger car weserviced was mainly due to the relatively younger age of the passenger car population in Singaporeduring the Track Record Period and passenger cars with younger age normally require lessmaintenance and repair. The decrease in our average revenue per passenger car serviced was intandem with the industry trend of the Singapore passenger car maintenance and repair industry in thesame period. For further details, please refer to the section headed ‘‘Industry Overview – Overview ofpassenger car maintenance and repair market in Singapore – Historical price trend of average servicefee’’ in this prospectus.

Revenue from the provision of after-market automotive services decreased by approximately S$1.7 million(or 10.9%) from approximately S$16.0 million in FY2017 to approximately S$14.3 million in FY2018. Thedecrease was attributable to the following reasons:

• Revenue from the provision of inspection, maintenance and non-insured repair services decreased byapproximately S$2.8 million (or 21.9%) from approximately S$12.8 million in FY2017 toapproximately S$10.0 million in FY2018. The decrease can be attributable to the decrease in thenumber of passenger cars that we provided inspection, maintenance and non-insured repair servicesand the decline in the average revenue per passenger car serviced in FY2018. We had to provideinspection, maintenance and non-insured repair services to a smaller number of passenger cars duringFY2018 as our limited servicing capacity was allocated to satisfy the increase in demand for insuredrepair jobs with higher mark-ups. In addition, we have also allocated resources and personnel toprepare for the Listing, thus has temporarily reduced our marketing efforts in promoting our services,e.g. holding sales events for prestigious car owners.

As our price list remained the same in FY2017 and FY2018, our Directors believe that the decline inthe average revenue per passenger car generated from the provision of inspection, maintenance andnon-insured repair services in FY2018 was due to the same reason as explained in the decrease in thesame item in FY2017.

The decrease was partially offset by the increase in the revenue generated from our warranty relatedbusiness and the provision of insured repair services.

• Revenue from the provision of insured repair services increased by approximately S$0.7 million (or30.3%) from approximately S$2.1 million in FY2017 to approximately S$2.8 million in FY2018. Theincrease was mainly due to the increase in the number of insured repair jobs that we carried out inFY2018 as we continue to expand our motor accident concierge desk services. As mentioned above,we reallocate more servicing capacity to provide insured repair jobs which have a higher mark up.Notwithstanding that, the increase in revenue from the provision of insured repair services ofapproximately S$0.7 million was insufficient to offset the decrease in revenue from the provision ofinspection, maintenance and non-insured repair services of approximately S$2.8 million. This wasprimarily due to the significant decrease in the average servicing fees from insured repair services,which decreased from approximately S$10,094 in FY2017 to approximately S$6,112 in FY2018. Thedecrease in the average servicing fees was mainly due to the change in servicing mix as our Grouprepaired a higher proportion of insured entry and medium level car in FY2018 which has a lowerabsolute dollar value per repair as compared to luxury and ultra-luxury supercars.


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• Revenue from the warranty related business increased by approximately S$0.4 million (or 37.0%)from approximately S$1.1 million in FY2017 to approximately S$1.5 million in FY2018. The increasewas mainly due to the increase in the number of passenger cars we have serviced under Customer F’smotor warranty programme.

Revenue from our provision of after-market automotive services decreased by approximately S$0.1 million(or 2.6%) from approximately S$3.5 million in 1Q2018 to approximately S$3.4 million in 1Q2019. The slightdecrease was attributable to the following reasons:

• Revenue from the warranty related business decreased by approximately S$0.1 million (or 30.8%)from approximately S$0.4 million in 1Q2018 to approximately S$0.3 million in 1Q2019. The decreasewas mainly due to the decrease in the average servicing fee per vehicle from warranty relatedbusiness, which decreased from S$2,013 in 1Q2018 to S$1,467 in 1Q2019. The decrease in theaverage servicing fees was mainly due to (i) the decrease in the average servicing fees for both luxuryand ultra-luxury supercar segment as well as entry and medium level car segment; and (ii) change inservicing mix as our Group repaired a higher proportion of entry and medium level car in 1Q2019which has a lower absolute dollar value per repair as compared to luxury and ultra-luxury supercars.Our Directors believe that the decrease in average servicing fees for both luxury and ultra-luxurysupercar segment as well as entry and medium level car segment was mainly due to a decrease in theextensiveness of the repair encountered in 1Q2019 as compared to 1Q2018.

The decrease was partially offset by the increase in revenue generated from our insured repair serviceswhile our revenue generated from inspection, maintenance and non-insured repair services remained stable.

• Revenue from insured repair services increased by approximately S$29,000 (or 6.5%) fromapproximately S$0.4 million in 1Q2018 to approximately S$0.5 million in 1Q2019. The increase wasmainly due to an increase in the average servicing fee per vehicle for our insured repair services ofluxury and ultra-luxury supercar which increased from approximately S$9,273 in 1Q2018 toapproximately S$16,904 in 1Q2019. Our Directors believe such increase was mainly due to a higherportion of more severely damaged luxury and ultra-luxury supercars repaired in 1Q2019 as comparedto 1Q2018.

• Despite the decrease in the number of passenger cars that we provided inspection, maintenance andnon-insured repair services, our revenue from the provision of inspection, maintenance and non-insured repair services has remained relatively stable at approximately S$2.6 million in 1Q2018 and1Q2019. This can be attributable to an increase in the average servicing fee per vehicle fromapproximately S$450 in 1Q2018 to approximately S$538 in 1Q2019. The increase was in tandem withthe price trend of the after-market automotive industry in Singapore. Our Directors believe that thedecrease in the number of passenger cars serviced in 1Q2019 was mainly due to a one-weekdowntime for each of our three workshops in 1Q2019 as we rearranged our hoists and parking spacesto enhance the servicing workflow and provide more parking spaces in preparation for the anticipateddemand arising from our fleet servicing agreements.


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Car rental services

Revenue from the provision of car rental services increased by approximately S$1.7 million (or 264.4%)from approximately S$0.6 million in FY2016 to approximately S$2.3 million in FY2017. The increase wasmainly due to the increase in revenue for long-term rentals from approximately S$0.4 million in FY2016 toapproximately S$1.9 million in FY2017 due to the fact that the number of long-term rental passenger cars thatwere rented out to Customer E increased from 50 units in FY2016 to 101 units in FY2017 as we entered intorental contracts with Customer E in FY2016 and the first quarter of FY2017. For further details, please refer tothe section headed ‘‘Business – Customers – Passenger car rental contracts’’ in this prospectus.

Revenue from the provision of car rental services increased by approximately S$0.2 million (or 9.0%) fromapproximately S$2.3 million in FY2017 to approximately S$2.5 million in FY2018. The increase was mainly dueto the full year revenue contribution from 50 additional long-term rental passenger cars to Customer E afterMarch 2017.

Revenue from the provision of car rental services remained relatively stable at approximately S$0.6 millionin 1Q2018 and 1Q2019.

Supply of passenger car spare parts, accessories and automotive equipment

Revenue from the supply of passenger car spare parts, accessories and automotive equipment decreased byapproximately S$0.2 million (or 34.0%) from approximately S$0.6 million in FY2016 to approximately S$0.4million in FY2017. The decrease was mainly due to the fact that we did not supply any automotive equipment inFY2017, in comparison to approximately S$0.5 million generated from the supply of automotive equipment inFY2016. The decrease was partially offset by an increase in the supply of passenger car spare parts andaccessories when we secured new business with Customer I in the second half of FY2017.

Revenue from the supply of passenger car spare parts, accessories and automotive equipment increased byapproximately S$0.9 million (or 223.5%) from approximately S$0.4 million in FY2017 to approximately S$1.3million in FY2018. The increase was mainly due to (i) the increase in revenue from the supply of automotiveequipment as we secured a new 15 years licensing agreement where we sold an automotive equipment to a newcustomer in FY2018; and (ii) the increase in sales of passenger car spare parts and accessories to Customer I inFY2018.

Revenue from the supply of passenger car spare parts, accessories and automotive equipment increased byapproximately S$177,000 (or 126.4%) from approximately S$140,000 in 1Q2018 to approximately S$317,000 in1Q2019. The increase was mainly due to the increase in sales of passenger car spare parts and accessories toCustomer I.

Cost of sales

Our cost of sales mainly included (i) cost of materials; (ii) direct labour cost which includes the salariesand benefits of our operation team and workshop technicians directly involved in carrying out the services weprovided; and (iii) direct depreciation expenses for (a) our rental passenger cars and (b) property, plant andequipment used in the provision of our after-market automotive services.


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For FY2016 and FY2017, our cost of sales was approximately S$9.6 million and approximately S$10.0million, respectively, representing an increase of approximately S$0.4 million (or 4.2%). Our cost of salesdecreased by approximately S$1.0 million (or 9.5%) from approximately S$10.0 million in FY2017 toapproximately S$9.0 million in FY2018. For 1Q2018 and 1Q2019, our cost of sales decreased by approximatelyS$0.3 million (or 10.9%), from approximately S$2.4 million in 1Q2018 to approximately S$2.1 million in1Q2019. The table below sets forth a breakdown of our cost of sales by nature of expenses and businesssegments for the years/periods indicated:

After-marketautomotive

servicesCar rental

services

Supply ofautomotiveequipment,spare parts

andaccessories Total

S$’000 S$’000 S$’000 S$’000 %

FY2016Cost of materials 6,332 – 130 6,462 67.5Direct labour cost 1,810 24 – 1,834 19.2Direct depreciation expenses 588 688 – 1,276 13.3

Total 8,730 712 130 9,572 100.0

FY2017Cost of materials 5,808 – 316 6,124 61.4Direct labour cost 1,984 65 – 2,049 20.5Direct depreciation expenses 456 1,345 – 1,801 18.1

Total 8,248 1,410 316 9,974 100.0

FY2018Cost of materials 4,801 – 478 5,279 58.5Direct labour cost 1,816 71 – 1,887 20.9Direct depreciation expenses 337 1,521 – 1,858 20.6

Total 6,954 1,592 478 9,024 100.0

1Q2018 (unaudited)Cost of materials 1,308 – 112 1,420 60.3Direct labour cost 458 15 – 473 20.1Direct depreciation expenses 81 382 – 463 19.6

Total 1,847 397 112 2,356 100.0


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After-marketautomotive

servicesCar rental

services

Supply ofautomotiveequipment,spare parts

andaccessories Total

S$’000 S$’000 S$’000 S$’000 %

1Q2019Cost of materials 918 – 254 1,172 55.8Direct labour cost 460 23 – 483 23.0Direct depreciation expenses 68 377 – 445 21.2

Total 1,446 400 254 2,100 100.0

Note: As (i) the materials; (ii) the operation team and workshop technicians; and (iii) the machine and equipment used in providingour after-market automotive services are shared between (i) inspection, maintenance, modification, tuning and grooming,insured repair and non-insured repair services; and (ii) warranty related business, we are not able to provide a furtherbreakdown of our cost of sales by each specific service we provide in our after-market automotive services.

Cost of materials

Cost of materials is the significant component of our cost of sales and mainly include purchase cost ofautomotive spare parts, accessories and consumables used in the provision of our after-market automotiveservices and our supply of passenger car spare parts, accessories and automotive equipment. Cost of materialsrepresented approximately 67.5%, 61.4%, 58.5% and 55.8% of our total cost of sales for FY2016, FY2017,FY2018 and 1Q2019, respectively.

Our cost of materials decreased by approximately S$0.4 million (or 5.2%), from approximately S$6.5million in FY2016 to approximately S$6.1 million in FY2017. Despite an increase in our revenue generated fromthe provision of after-market automotive services, we have incurred a lower cost of materials. This was mainlydue to the increase in business volume from our after-market automotive services in FY2017 which has led us topurchase more materials from our suppliers. As a result, our purchase amount in FY2017 was able to meet thesales target provided by our suppliers, allowing us to enjoy a higher purchase discount. In addition, our Grouphas also implemented costs control measures in FY2017 where we reviewed our list of approved suppliers andmade purchases from suppliers who were able to offer us more competitive terms and prices.

Our cost of materials decreased by approximately S$0.8 million (or 13.8%), from approximately S$6.1million in FY2017 to approximately S$5.3 million in FY2018 as a result of the decrease in business volume inthe provision of our inspection, maintenance and non-insured repair services in FY2018 compared to FY2017.Notwithstanding that, we still managed to meet the sales target provided by our suppliers, allowing us to enjoysimilar purchase discounts from our suppliers in FY2018.

Our cost of materials decreased by approximately S$0.2 million (or 17.5%), from approximately S$1.4million in 1Q2018 to approximately S$1.2 million in 1Q2019 as a result of the decrease in number of passengercars we provided after-market automotive services in 1Q2019 as compared to 1Q2018.


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Direct labour cost

Direct labour cost represents mainly the salaries and benefits of our operation team and workshoptechnicians directly involved in carrying out the services we provided. Direct labour cost was the second largestcomponent of our cost of sales during the Track Record Period. Direct labour cost represented 19.2%, 20.5%,20.9% and 23.0% of our total cost of sales for FY2016, FY2017, FY2018 and 1Q2019, respectively.

Our direct labour cost increased by approximately S$0.2 million (or 11.7%), from approximately S$1.8million in FY2016 to approximately S$2.0 million in FY2017. The increase was mainly due to the increase inthe headcount of our operation team and workshop technicians during FY2017 to meet the higher businessvolume in our after-market automotive services.

Our direct labour cost decreased by approximately S$0.1 million (or 7.9%) from approximately S$2.0million in FY2017 to approximately S$1.9 million in FY2018. The decrease was mainly due to the decrease inperformance bonuses declared in FY2018 as we failed to meet our revenue target for FY2018.

Our direct labour cost remained stable at approximately S$0.5 million for 1Q2018 and 1Q2019,respectively.

We currently intend to use approximately 3.1% of our total estimated net proceeds from the Share Offer,being approximately HK$1.0 million (or approximately S$0.2 million), to (i) enhance the technical skills of ourcurrent workforce; and (ii) expand our workforce to gear up for our expansion. As such, direct labour cost to beincurred after Listing is expected to increase as compared with that incurred during the Track Record Period. Forfurther details, please refer to the section headed ‘‘Future Plans and Use of Proceeds’’ in this prospectus.

Sensitivity analysis

We generally use a cost-plus method to price the materials for our services. Accordingly, any fluctuationsin the cost of materials are generally borne by our customers while fluctuations in the direct labour cost areshared between our customers and us.

The following sensitivity analysis illustrates the impact of hypothetical fluctuations in our cost of materialsas included in the cost of sales by 5.0% and 10.0% for FY2016, FY2017, FY2018, 1Q2018 and 1Q2019.

(Decrease)/Increase in our net profit before taxFY2016 FY2017 FY2018 1Q2018 1Q2019S$’000 S$’000 S$’000 S$’000 S$’000

(unaudited)Cost of materialsIncrease/(decrease) by:10% (646) (612) (528) (142) (117)5% (323) (306) (264) (71) (59)(5%) 323 306 264 71 59(10%) 646 612 528 142 117

Note: The above sensitivity analysis is prepared on the basis that all other variables are being constant and the changes in cost ofmaterials are entirely absorbed by our Group.


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The following sensitivity analysis illustrates the impact of hypothetical fluctuations in our direct labourcost as included in the cost of sales by 5.0% and 10.0% for FY2016, FY2017, FY2018, 1Q2018 and 1Q2019.

(Decrease)/Increase in our net profit before taxFY2016 FY2017 FY2018 1Q2018 1Q2019S$’000 S$’000 S$’000 S$’000 S$’000

(unaudited)

Direct labourIncrease/(decrease) by:10% (183) (205) (189) (48) (48)5% (92) (102) (94) (24) (24)(5%) 92 102 94 24 24(10%) 183 205 189 48 48

Note: The above sensitivity analysis is prepared on the basis that all other variables are being constant and the change in directlabour cost is entirely absorbed by our Group.

Direct depreciation expenses

For FY2016, FY2017 and FY2018, direct depreciation expenses represented depreciation charged on our (i)rental passenger cars and (ii) machines and equipment used in the provision of our after-market automotiveservices. For 1Q2019, direct depreciation expenses mainly represented (i) depreciation charge on the right-of-useassets and (ii) depreciation charge on our machines and equipment used in the provision of our after-marketautomotive services. Direct depreciation expenses represented approximately 13.3%, 18.1%, 20.6% and 21.2% ofour total cost of sales for FY2016, FY2017, FY2018 and 1Q2019, respectively.

Our direct depreciation expenses increased by approximately S$0.5 million (or 41.1%), from approximatelyS$1.3 million in FY2016 to approximately S$1.8 million in FY2017. The increase was mainly due to anadditional 69 units of rental passenger cars purchased in FY2017.

Our direct depreciation expenses increased by approximately S$0.1 million (or 3.2%) from approximatelyS$1.8 million in FY2017 to approximately S$1.9 million in FY2018. The increase was mainly due to the fullyear depreciation of the 54 additional rental passenger cars that we acquired after March 2017.

Our direct depreciation expenses remained stable at approximately S$0.5 million for 1Q2018 and 1Q2019,respectively.

We currently intend to use approximately 70.8% of our total estimated net proceeds from the Share Offer,being approximately HK$23.0 million (or approximately S$4.0 million), to expand our servicing capacity andgrow our rental fleet to complement our after-market automotive service. For further details, please refer to thesection headed ‘‘Future Plans and Use of Proceeds’’ in this prospectus.


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Gross profit and gross profit margin

Gross profit represents our revenue less cost of sales. Gross profit margin represented gross profit as apercentage of revenue. The table below sets forth our Group’s gross profit and gross profit margin by businesssegments for the years/periods indicated (Note 1):

FY2016 FY2017 FY2018

1Q2018

(unaudited) 1Q2019

Gross

profit

Gross

profit

margin

Gross

profit

Gross

profit

margin

Gross

profit

Gross

profit

margin

Gross

profit

Gross

profit

margin

Gross

profit

Gross

profit

margin

S$’000 % S$’000 % S$’000 % S$’000 % S$’000 %


Car rental services (94) Note 2 842 37.4 862 35.1 251 38.7 234 36.9

Supply of passenger car spare parts,

accessories and automotive

equipment 468 78.3 79 20.0 800 62.6 28 20.0 63 20.0

Total gross profit/Gross profit margin 6,763 41.4 8,667 46.5 8,961 49.8 1,929 45.0 2,257 51.8

Notes:

1. As the workflow and nature of service provided for each business segment under the after-market automotive services aresimilar, the Group is not able to provide a further breakdown of its gross profit and gross profit margin as (a) the operationteam and workshop technicians; and (b) the machine and equipment used in providing after-market automotive services areshared between (i) inspection, maintenance and repair of non-insured repair services, (ii) insured repair services; and (iii)warranty related business.


Our gross profit increased from approximately S$6.8 million in FY2016 to approximately S$8.7 million inFY2017, which represented an increase of approximately S$1.9 million (or 28.2%). Our gross profit furtherincreased by approximately S$0.3 million (or 3.4%) to approximately S$9.0 million in FY2018. Our gross profitincreased from approximately S$1.9 million for 1Q2018 to approximately S$2.3 million for 1Q2019, whichrepresented an increase of approximately S$0.4 million (or 17.0%). Our gross profit margin was approximately41.4%, 46.5%, 49.8% and 51.8% for FY2016, FY2017, FY2018 and 1Q2019, respectively.

Set out below are the primary drivers for the fluctuations in our gross profit and gross profit margins bybusiness segments during the Track Record Period.


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The gross profit for the provision of after-market automotive services increased by approximately S$1.3million (or 21.2%), from approximately S$6.4 million in FY2016 to approximately S$7.7 million in FY2017.Our gross profit margin of the provision of after-market automotive services increased from approximately42.3% for FY2016 to approximately 48.4% for FY2017, mainly due to (i) the decrease in the average purchaseprice for passenger car spare parts, accessories and consumables as higher purchase discounts were given to usby our suppliers as our purchase volume increased in FY2017; and (ii) the increase in insured repair jobs as wecharged a higher mark up due to (i) the complexity and extensiveness of the repair that is usually required toperform under the insured repair services; (ii) the lengthy internal approval process of the insurance company tosettle insurance claim.

The gross profit for the provision of after-market automotive services decreased by approximately S$0.4million (or 5.8%), from approximately S$7.7 million in FY2017 to approximately S$7.3 million in FY2018.Although our gross profit margin of the provision of after-market automotive services increased fromapproximately 48.4% for FY2017 to approximately 51.2% for FY2018 and the utilisation of our servicingcapacity was similar in each of FY2017 and FY2018, our Group recorded a decrease in gross profit inafter-market automotive services mainly due to the decrease in the revenue from the provision of after-marketautomotive services in FY2018 (for detailed explanation, please refer to the paragraph headed ‘‘Description ofselected components of consolidated statements of profit or loss and other comprehensive income – Revenue bybusiness segments’’ in this section). Our gross profit margin for the provision of after-market automotiveservices increased from approximately 48.4% in FY2017 to approximately 51.2% in FY2018 which was mainlydue to the increase in insured repair jobs in FY2018 as we charged a higher mark up due to (i) the complexityand extensiveness of the repair that is usually required to perform under the insured repair services; (ii) thelengthy internal approval process of the insurance company to settle insurance claim.

The gross profit for our provision of after-market automotive services increased by approximately S$0.3million (or 18.8%), from approximately S$1.7 million in 1Q2018 to approximately S$2.0 million in 1Q2019. For1Q2018 and 1Q2019, our gross profit margin for the provision of after-market automotive services increasedfrom 47.2% for 1Q2018 to 57.5% for 1Q2019 mainly due to the increase in our overall average servicing feesper vehicle.

Car rental services

We recorded a gross loss of approximately S$0.1 million for our car rental services in FY2016, as therevenue generated from the limited number of rental passenger cars was not able to cover the direct depreciationexpenses related to our rental passenger cars. We recorded a gross profit of approximately S$0.8 million inFY2017 which was mainly due to the fact that the increase in revenue has outweighed the increase in directdepreciation expenses as we rented out 51 additional long-term rental passenger cars to Customer E in FY2017.Our gross profit margin for the provision of our car rental services was approximately 37.4% in FY2017.

The gross profit from the provision of car rental services increased by approximately S$0.1 million (or2.4%) from approximately S$0.8 million in FY2017 to approximately S$0.9 million in FY2018. The gross profitmargin of the provision of car rental services decreased from approximately 37.4% in FY2017 to approximately35.1% in FY2018.


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The gross profit for car rental services remained relatively stable at approximately S$251,000 andS$234,000 for 1Q2018 and 1Q2019, respectively. Our gross profit margin for the provision of car rental servicesdecreased from approximately 38.7% in 1Q2018 to approximately 36.9% in 1Q2019 which was mainly due tothe fact that we hired an extra staff to assist with our car rental services.

Supply of passenger car spare parts, accessories and automotive equipment

The gross profit for the supply of passenger car spare parts, accessories and automotive equipmentdecreased by approximately S$0.4 million (or 83.1%), from approximately S$0.5 million in FY2016 toapproximately S$79,000 in FY2017. Our gross profit margin of the supply of passenger car spare parts,accessories and automotive equipment decreased from approximately 78.3% in FY2016 to approximately 20.0%in FY2017. This was mainly due to the fact that the mark up for passenger car spare parts and accessories arelower than the mark up for automotive equipment. As we are the exclusive reseller of automotive equipmentfrom Supplier I in the Asia-Pacific region and the automotive equipment is an advanced technologicalequipment, we could charge a higher mark-up compared to spare parts and accessories of passenger cars whichare generic and readily available in Singapore.

The gross profit for the supply of passenger car spare parts, accessories and automotive equipmentincreased by approximately S$0.7 million (or 912.7%) from approximately S$79,000 in FY2017 toapproximately S$0.8 million in FY2018. The gross profit margin of the supply of passenger car spare parts,accessories and automotive equipment increased from approximately 20.0% in FY2017 to approximately 62.6%in FY2018 as we supplied automotive equipment in addition to passenger car spare parts and accessories inFY2018.

The gross profit for the supply of passenger car spare parts, accessories and automotive equipmentincreased by approximately S$35,000 (or 125.0%), from approximately S$28,000 in 1Q2018 to approximatelyS$63,000 in 1Q2019. The gross profit margin for the supply of passenger car spare parts, accessories andautomotive equipment remained relatively stable at approximately 20.0% for 1Q2018 and 1Q2019, respectively,as we only supplied passenger car spare parts and accessories in both periods.

Other net income and gains

Our other net income and gains included mainly (i) government grants; (ii) COE encashments; (iii) reversalof impairment of trade receivables; and (iv) others. The following table sets forth the breakdown of other netincome and gains for the years/periods indicated:

FY2016 FY2017 FY2018 1Q2018 1Q2019S$’000 S$’000 S$’000 S$’000 S$’000

(unaudited)

Other net income and gainsGovernment grants 197 107 106 56 42COE encashments (Note) 150 45 – – –

Reversal of impairment of tradereceivables 165 – 16 – 18

Others 230 53 154 8 27

Total 742 205 276 64 87

Note: COE encashments include COE rebate and PARF rebate.


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Our other net income and gains decreased from approximately S$0.7 million for FY2016 to approximatelyS$0.2 million for FY2017, which represented a decrease of approximately S$0.5 million (or 72.4%). Thedecrease was mainly due to (i) the decrease in government grants in FY2017 which was mainly due to lowercash payout from the PIC Scheme, WC Scheme and SEC Scheme; (ii) the decrease in COE encashments as wederegistered less passenger cars in FY2017; (iii) the fact that we did not reverse any impairment of tradereceivables in FY2017; and (iv) the decrease in others as we disposed less scrapped materials in FY2017.

Our other net income and gains increased by approximately S$71,000 (or 34.6%) from approximately S$0.2million in FY2017 to approximately S$0.3 million in FY2018. The increase was mainly due to the increase inreferral fees collected from Customer F’s motor warranty distributor when we referred our customers to useCustomer F’s motor warranty programme in FY2018.

Our other net income and gains increased from approximately S$64,000 for 1Q2018 to approximatelyS$87,000 for 1Q2019, which represented an increase of approximately S$23,000 (or 35.9%). The increase wasmainly due to (i) the reversal of impairment of trade receivables due to certain customers with prolonged delayin payment has settled their bills in 1Q2019; and (ii) we disposed more scrapped materials in 1Q2019 ascompared to 1Q2018.

Government grants mainly represents incentives or subsidies under the WC Scheme, SEC Scheme and PICScheme which were received from the Singapore government.

Under the WC Scheme, the Singapore government will co-fund 20% of wage increases given to Singaporecitizen employees earning a gross monthly wage of S$4,000 and below over the period of 2016 and 2017. Inaddition, for wage increases given in 2015 which are sustained in 2016 and 2017 by the same employer,employers will continue to receive co-funding at 20% for 2016, 2017 and 2018. The co-funding ratio wasreduced to 15% in 2019, and will be reduced to 10% in 2020.

Under the SEC Scheme, the Singapore government will co-fund employers who hire Singaporean citizensaged above 50 earning a gross monthly wage of S$4,000 and below of up to 8% of an eligible employee’smonthly wage for FY2016. Over the periods, the Singapore government will further co-fund a 3% of an eligibleemployee’s monthly wage if employers voluntarily re-employ Singaporeans aged 65 and above. The Scheme wasfirst introduced in 2011 and will be extended for three years from 1 January 2017 to 31 December 2019.

The PIC Scheme supports business investments in the form of cash payout and/or tax reduction. Our Grouphas certain items of equipment which qualifies for the PIC Scheme. The PIC Scheme was introduced in theSingapore Budget 2010 to provide tax benefits for investments by businesses in a broad range of activities alongthe innovation value chain. Enhancements to the PIC Scheme were introduced in subsequent Singapore Budgets.In the Singapore Budget 2014, the PIC Scheme was extended for three years. Currently, tax benefits providedunder the PIC Scheme will depend on the quantum of expenditure incurred for the qualifying activities from yearof assessment 2015 to year of assessment 2018 and fulfilment of the relevant conditions. In Singapore Budget2016, it was announced that the cash payout rate will be lowered from 60% to 40% for qualifying expenditureincurred from 1 August 2016. The tax deduction of the schemes remain unchanged. The PIC Scheme, which hasbeen extended for year of assessment 2016 to year of assessment 2018, will expire thereafter. It will not beavailable from year of assessment 2019.

COE rebate and PARF rebate are the amount received by the registered car owner if a vehicle isderegistered before expiry of its COE. The registered car owner may be granted a rebate based on the QuotaPremium (QP), or Prevailing Quota Premium (PQP) (in the case of a vehicle with a COE that has been renewed),which he has paid, pro-rated to the number of months and days remaining on his vehicle’s COE. The PARFrebate is computed based on the age of the car at deregistration.


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Employee benefit expenses

Our employee benefit expenses mainly include (i) directors’ emoluments, including directors’ fees, salaries,bonuses and other remunerations; and (ii) salaries, bonuses, welfare, foreign worker levy and related costs of allour staff. Our Group also makes contribution to the CPF, for all eligible employees. Such contributions arerecognised as a compensation expense in the same period as the employment that gives rise to the contribution.

The following table sets forth the breakdown of our employee benefit expenses for the years/periodsindicated:

FY2016 FY2017 FY2018 1Q2018 1Q2019S$’000 S$’000 S$’000 S$’000 S$’000

(unaudited)

Employee benefit expensesDirectors’ emoluments:– Fees – – 29 29 –

– Salaries, allowances and otherbenefits 378 410 450 113 112

– Discretionary bonuses 137 33 – 5 –

– Retirement fund contribution 45 41 47 12 12

560 484 526 159 124

Other employee costs:– Salaries and bonuses 3,086 3,563 3,304 865 847– Staff welfare and others 178 382 329 100 96– Foreign worker levy 224 192 195 41 56– Retirement fund contribution 300 264 293 77 76

3,788 4,401 4,121 1,083 1,075

Total 4,348 4,885 4,647 1,242 1,199

Our employee benefit expenses increased from approximately S$4.3 million in FY2016 to approximatelyS$4.9 million in FY2017, which represented an increase of approximately S$0.6 million (or 12.4%). Theincrease was mainly due to the (i) increase in headcount of our operation team and workshop technicians; and(ii) the hiring of more senior supervisor roles in certain departments. This increase was partially offset by thedecrease in discretionary bonuses received by our Directors in FY2017.

Our employee benefit expenses decreased from approximately S$4.9 million in FY2017 to approximatelyS$4.6 million in FY2018, which represented a decrease of approximately S$0.3 million (or 4.9%). The decreasewas mainly due to the decrease in performance bonuses declared in FY2018 as we failed to meet our revenuetarget for FY2018. Such decrease was partially offset by the increase in headcount of our Group during FY2018.

Our employee benefit expenses remained stable at approximately S$1.2 million for 1Q2018 and 1Q2019,respectively.


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Other expenses

Our other expenses mainly include (i) rental and utilities expenses; (ii) costs of services such as towingfees, freight and transportation expenses; (iii) maintenance costs for our service centres, passenger cars andequipment such as hoists; (iv) merchant fees; (v) office-related expenses; (vi) professional and legal fees; (vii)telecommunication expense; (viii) refreshments; (ix) write off of our inventories; (x) write off of our bad debts;and (xi) loss on disposal of property, plant and equipment. For FY2016, FY2017, FY2018 and 1Q2019, our otherexpenses were approximately S$2.7 million, S$3.2 million, S$3.3 million and S$0.4 million which representedapproximately 16.6%, 17.2%, 18.3% and 10.1% of our revenue for the respective years/periods. The followingtable sets forth the breakdown of our other expenses for the years/periods indicated:

FY2016 FY2017 FY2018 1Q2018 1Q2019S$’000 S$’000 S$’000 S$’000 S$’000

(unaudited)

Rental and utilities expenses 1,498 1,553 1,596 383 82Cost of services 393 439 501 168 102Maintenance costs 195 445 626 125 133Merchant fees 212 214 184 48 43Office-related expenses 215 88 152 20 38Professional and legal fees 80 142 118 34 12Telecommunication expenses 58 66 55 14 12Refreshments 61 17 11 2 2Write off of inventories – 72 – – –

Bad debts written off – 54 – – –

Loss on disposal/write off ofproperty,plant and equipment 8 4 47 – –

Other operating expenses 7 56 29 1 15

Total 2,727 3,150 3,319 795 439

Our other expenses increased by approximately S$0.5 million (or approximately 15.5%) fromapproximately S$2.7 million in FY2016 to approximately S$3.2 million in FY2017. The increase was mainlydue to (i) the increase in maintenance costs by approximately S$0.3 million as we acquire an additional 69 unitsof rental passenger cars in FY2017; (ii) the write off of inventories and bad debts in aggregate of approximatelyS$0.1 million in FY2017. For further details, please refer to the paragraph headed ‘‘Discussion of selectedcomponents of consolidated statements of financial position – Inventories’’ and ‘‘Discussion of selectedcomponents of consolidated statements of financial position – Trade and other receivables – Trade receivables’’in this section; (iii) the increase in professional and legal fees of approximately S$62,000 in FY2017 as weconduct internal group restructuring in preparation for our Listing. For further details, please refer to the sectionheaded ‘‘History, Reorganisation and Corporate Structure’’ in this prospectus; and (iv) the increase in rental andutilities expenses of approximately S$55,000 which was mainly due to the increase in the rental rate for ourUpper Thomson Service Centre and paint workshop. In addition, we also rented seven temporary car parking lotsat our Serangoon Service Centre to cater the increase in our business volume in FY2017. These increases werepartially offset by the decrease in spending on office related expenses and refreshments of approximately S$0.2million mainly due to savings from the cost control measures that we implemented in FY2017.


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Our other expenses increased marginally by approximately S$0.1 million (or approximately 5.4%) fromapproximately S$3.2 million in FY2017 to approximately S$3.3 million in FY2018. The increase was mainly dueto (i) the increase in maintenance costs as we acquired an additional 54 rental passenger cars after March 2017;(ii) the increase in cost of services as we renewed the software licenses for our diagnostic equipment; and (iii)the increase in office-related expenses as we filed application for our trademarks. These increases were partiallyoffset by a reduction in the impairment of inventories and bad debts written off in FY2018.

Our other expenses decreased by approximately S$0.4 million (or approximately 44.8%) fromapproximately S$0.8 million in 1Q2018 to approximately S$0.4 million in 1Q2019. This was mainly due to thedecrease in rental and utilities expenses as a result of the adoption of HKFRS 16 on 1 January 2019. Our Grouponly recognised rental expenses from short term leases of approximately S$58,000 for 1Q2019. Additional right-of-use assets of leased properties with a net carrying amount of approximately S$3.2 million were recognised asat 1 January 2019 and were amortised on a straight line basis and reflected in depreciation of right-of-use assetsaccordingly.

Depreciation of property, plant and equipment

For FY2016, FY2017 and FY2018, depreciation of property, plant and equipment mainly representeddepreciation charged on motor vehicles and machines and equipment used in the provision of our after-marketautomotive services which amounted to approximately S$1.3 million, S$1.9 million and S$1.9 million,representing approximately 8.0%, 10.2% and 10.6% of our total revenue for the respective years. With HKFRS16 coming into effect on 1 January 2019, our Group has reclassified our motor vehicles under finance leaseobligations as right-of-use assets.

Our depreciation of property, plant and equipment increased by approximately S$0.6 million (or 43.0%),from approximately S$1.3 million in FY2016 to approximately S$1.9 million in FY2017. The increase wasmainly due to an additional 69 units of rental passenger cars purchased in FY2017.

Our depreciation of property, plant and equipment remained relatively stable at approximately S$1.9million in FY2018 as we did not incur any material capital expenditures in FY2018.

Our depreciation of property, plant and equipment decreased by approximately S$0.4 million (or 79.8%)from approximately S$0.5 million in 1Q2018 to approximately S$0.1 million 1Q2019 as we reclassified ourmotor vehicles under finance lease obligations as right-of-use assets in accordance with HKFRS 16.

Depreciation of right-of-use assets

Depreciation of right-of-use assets mainly represented depreciation charged on (i) our motor vehicles underfinance lease obligations and (ii) leased properties under operating leases, which have been reclassified as right-of-use assets pursuant to HKFRS 16 on 1 January 2019. Our depreciation of right-of-use assets wasapproximately S$0.8 million in 1Q2019.

Marketing and advertising expenses

Our marketing and advertising expenses mainly include commission paid to independent third parties whenthey recommend customers to use our services, entertainment expenses, expenses in relation to printing ofmarketing materials, magazine advertisements, hosting marketing events, sponsoring of various automobileactivities and automobile internet forum, and radio broadcasting. Our marketing and advertising expenses wereapproximately S$0.2 million, S$0.2 million, S$78,000 and S$69,000 for FY2016, FY2017, FY2018 and 1Q2019,respectively.


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We currently intend to use approximately 1.5% of our total estimated net proceeds from the Share Offer,being approximately HK$0.5 million (or approximately S$87,000) for brand building through strengthening ourrelationships with our existing customers and expanding our customer base. Please refer to the section headed‘‘Future Plans and Use of Proceeds’’ in this prospectus for further details.

Finance costs

Our finance costs represented interest expenses on (i) bank borrowings; (ii) finance lease obligations; (iii)lease liabilities; and (iv) shareholders’ loans accounting for approximately 5.1%, 12.2%, 11.3% and 15.4% of ourprofit before interest, tax and Listing expenses for FY2016, FY2017, FY2018 and 1Q2019, respectively.

The following table sets forth the breakdown of our finance costs for the years/periods indicated:

FY2016 FY2017 FY2018 1Q2018 1Q2019S$’000 S$’000 S$’000 S$’000 S$’000

(unaudited)

Interest element from finance leasepayments 94 279 283 76 –

Interest element of lease liabilities – – – – 93Interest on loans from shareholders 8 7 5 4 –

Interest on bank borrowings – 22 40 6 10

Total 102 308 328 86 103

Our interest coverage ratio (excluding Listing expenses) was approximately 19.7, 8.2, 8.9 and 6.5 times inFY2016, FY2017, FY2018 and 1Q2019 , respectively.

For further details of our bank borrowings, finance lease obligations and lease liabilities, please refer to theparagraph headed ‘‘Indebtedness’’ in this section. For further details of our shareholder’s loans, please refer tothe paragraph headed ‘‘Discussion of selected components of consolidated statements of financial position –

Trade and other payables – Amounts due to shareholders’’ in this section.

Listing expenses

Our Directors estimate that the total amount of expenses in relation to the Listing is approximately S$4.4million, of which approximately S$1.7 million is expected to be funded by the Pre-IPO Investments. Thisincludes approximately S$1.5 million which is directly attributable to the issue of the Offer Shares and isexpected to be accounted for as a deduction from equity upon Listing. The remaining amount of approximatelyS$2.9 million, which cannot be deducted, will be charged to our profit or loss. Out of the approximately S$2.9million that will be charged to profit or loss, nil, nil, approximately S$2.5 million and S$0.3 million have beencharged in FY2016, FY2017, FY2018 and 1Q2019 respectively, and approximately S$0.1 million is expected tobe incurred for the financial year ending 31 December 2019.

The recognition of Listing expenses is expected to affect our financial results for the financial year ending31 December 2019. The estimated Listing expenses of our Group are subject to adjustments based on the actualamount of expenses incurred/to be incurred by our Company upon completion of the Listing. Our Directorswould like to emphasise that such cost is a current estimate for reference only, and the final amount to berecognised in the consolidated statement of profit or loss for the financial year ending 31 December 2019 of ourGroup or to be capitalised is subject to adjustment based on audit and the then changes in variables andassumptions.


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Impairment of trade receivables

We incurred an impairment of trade receivables of approximately S$27,000, S$0.1 million, S$93,000 andS$19,000 in FY2016, FY2017, FY2018 and 1Q2019, respectively. This was mainly due to the consideration ofour Directors that the trade receivables concerned are related to customers with poor settlement history and onlya portion of the trade receivables due from them is expected to be recovered. In addition, our Group has appliedthe simplified approach to provide for expected credit loss prescribed by HKFRS 9. For further details, pleaserefer to the paragraph headed ‘‘Discussion of selected components of consolidated statements of financialposition – Trade and other receivables – Trade receivables’’ in this section.

Income tax expense

Our Group is subject to income tax on an entity basis on profits arising in or derived from the jurisdictionsin which members of our Group are domiciled and operate. The Cayman Islands currently levy no taxes on ourCompany based upon income. Subsidiaries incorporated in Singapore are subject to taxation rate of 17% on theestimated profits arising in Singapore during the Track Record Period. According to the IRAS, from the fourthyear of assessment onwards since incorporation, all companies in Singapore can enjoy the partial tax exemption,a common tax relief for companies to help reduce their tax by having (i) 75% tax exemption on the firstS$10,000 of normal chargeable income; and (ii) a further 50% tax exemption on the next S$290,000 of normalchargeable income. Each of our subsidiaries incorporated in Singapore, namely, Optima Werkz, Optima Carz,Optima De Auto and Optima Werkz International enjoyed the partial tax exemption during the Track RecordPeriod.

Our income tax expense principally consisted of current and deferred income tax expense derived fromprofit generated from our business operation in Singapore during the Track Record Period. Our income taxexpenses were approximately S$0.5 million, S$0.3 million, S$0.3 million and S$0.1 million, for FY2016,FY2017, FY2018 and 1Q2019, respectively, and our effective tax rates were at 25.2%, 14.3%, 361.3% and47.6% for the relevant years, respectively. The decrease in the effective tax rate in FY2017 was mainly due tothe Group having made over provision in previous years/periods. The large increase in the effective tax rate inFY2018 and 1Q2019 was mainly due to the non-recurring Listing expenses which were non-tax deductible. Oureffective tax rates, after excluding under/over provision of income tax and Listing expenses, were at 16.3%,17.4%, 14.4% and 19.0% for FY2016, FY2017, FY2018 and 1Q2019 respectively.

The following table sets forth a breakdown of our income tax expense for the years indicated:

FY2016 FY2017 FY2018 1Q2018 1Q2019S$’000 S$’000 S$’000 S$’000 S$’000

(unaudited)

Current income tax 171 188 196 40 96Deferred income tax 311 130 140 – 23

Total 482 318 336 40 119


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A reconciliation of the tax expense applicable to profit before income tax at the domestic rates for us inSingapore is reconciled to our income tax expense is as follows:

FY2016 FY2017 FY2018 1Q2018 1Q2019S$’000 S$’000 S$’000 S$’000 S$’000

(unaudited)

Profit before income tax expense 1,911 2,224 93 100 250

Tax calculated at the domestic taxrates 325 378 16 17 43

Tax effect of expenses notdeductible for tax purposes 95 77 448 38 58

Tax effect of revenue not taxablefor tax purposes (25) (8) (34) – –

Under/(over) provision in respectof prior years/periods 170 (68) (36) – 11

Tax rebates (91) (86) (53) (9) (5)Unused tax losses not recognised 17 12 – – 10Others (9) 13 (5) (6) 2

Income tax expense 482 318 336 40 119

During the Track Record Period and up to the Latest Practicable Date, we have paid or provided for allrelevant taxes that our Group was subject to. We are not aware of any disputes/unresolved tax issues with anytax authorities.

Profit/(Loss) for the year and net profit margin

As a result of the foregoing, our profit for the year increased by approximately S$0.5 million (or 33.4%)from approximately S$1.4 million for FY2016 to approximately S$1.9 million for FY2017. Our net profit marginalso increased from approximately 8.7% for FY2016 to approximately 10.2% for FY2017.

We recorded a loss of approximately S$0.2 million for FY2018 which was mainly due to the non-recurringListing expenses. Should the Listing expenses of approximately S$2.5 million charged to the consolidatedstatements of profit or loss and other comprehensive income for FY2018 be excluded, our profit for FY2018would be approximately S$2.3 million, representing an increase of approximately 18.1% as compared toFY2017. Our adjusted net profit margin would be approximately 12.8% in FY2018.

Our profit for the period increased by approximately S$71,000 (or 118.3%) from approximately S$60,000for 1Q2018 to approximately S$131,000 for 1Q2019. Our net profit margin increased from approximately 1.4%for 1Q2018 to approximately 3.0% for 1Q2019. Should the Listing expenses of approximately S$0.2 million andS$0.3 million be charged to the consolidated statements of profit or loss and other comprehensive income for1Q2018 and 1Q2019 be excluded, our profit for 1Q2018 and 1Q2019 would be approximately S$0.2 million andS$0.4 million, respectively, representing an increase of approximately S$0.2 million. Our adjusted net profitmargin would be approximately 5.7% and 10.3% in 1Q2018 and 1Q2019, respectively.


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PERIOD-TO-PERIOD COMPARISON OF RESULTS OF OPERATIONS

Three months ended 31 March 2019 compared to three months ended 31 March 2018

1Q2018 1Q2019 Increase/(Decrease)Notes S$’000 S$’000 S$’000 %

(unaudited)

Revenue 4,285 4,357 72 1.7– After-market automotive

services 1 3,497 3,406 (91) (2.6)– Car rental services 2 648 634 (14) (2.2)– Supply of passenger car spare

parts, accessories andautomotive equipment 3 140 317 177 126.4

Other net income and gains 4 64 87 23 35.9

Items of expensesCost of materials 5 (1,420) (1,172) 248 (17.5)Employee benefit expenses 6 (1,242) (1,199) 43 (3.5)Other expenses 7 (795) (439) 356 (44.8)Depreciation of property,plant and equipment 8 (479) (97) 382 (79.7)

Depreciation of right-of-use assets 9 – (779) (779) N/AMarketing and advertising expenses (15) (69) (54) 360.0Finance costs 10 (86) (103) (17) 19.8Listing expenses 11 (185) (317) (132) 71.4Impairment of trade receivables 12 (27) (19) 8 (29.6)

Profit before income tax expense 100 250 150 150.0

Income tax expense 13 (40) (119) (79) 197.5

Profit for the period 14 60 131 71 118.3

Profit attributable to:Owners of the Company 30 131 101 336.7Non-controlling interests 30 – (30) (100.0)

60 131 71 118.3

Total comprehensive incomeattributable to:Owners of the Company 30 131 101 336.7Non-controlling interests 30 – (30) (100.0)

60 131 71 118.3


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Reason for the changes

1. The decrease was mainly due to the decrease in revenue from the warranty related business byapproximately S$0.1 million. Such decrease was partially offset by the increase in revenue from theprovision of insured repair services. Revenue from the provision of inspection, maintenance and non-insured repair services remained relatively stable at approximately S$2.6 million for 1Q2018 and1Q2019, respectively.

2. Our revenue from car rental services remained relatively stable in 1Q2018 and 1Q2019 respectively.

3. The increase was mainly due to the increase in sales of passenger car spare parts and accessories toCustomer I.

4. The increase was mainly due to (i) the reversal of impairment of trade receivables and (ii) theincrease in others as we disposed more scrapped materials in 1Q2019.

5. The decrease was mainly due to the decrease in the number of passenger cars we provided after-market automotive services in 1Q2019 as compared to 1Q2018.

6. Our employee benefit expenses remained relatively stable in 1Q2018 and 1Q2019 respectively.

7. The decrease was mainly due to the fact that we only recognise rental expenses from short-termleases since the adoption of HKFRS 16 on 1 January 2019. Additional right-of-use assets of leasedproperties under operating leases with a net carrying amount of approximately S$3.2 million wererecognised as at 1 January 2019 and were amortised on a straight-line basis and reflected in thedepreciation of right-of-use assets.

8. The decrease was mainly due to the fact that our motor vehicles under finance lease obligations werereclassified as right-of-use assets in accordance with HKFRS 16.

9. Our depreciation of right-of-use assets mainly represented depreciation charged on (i) our motorvehicles under finance lease obligations and (ii) leased properties under operating leases, which havebeen reclassified as right-of-use assets pursuant to HKFRS 16. Our depreciation of right-of-use assetswas approximately S$0.8 million in 1Q2019.

10. The increase was mainly due to the fact that we had to recognise the interest element of our leasedliabilities for our leased properties since the adoption of HKFRS 16 on 1 January 2019. Such increasewas offset by the lower level of bank borrowings and finance lease obligations in 1Q2019 ascompared to 1Q2018.

11. See the paragraph headed ‘‘Description of selected components of consolidated statements of profit orloss and other comprehensive income – Listing expenses’’ in this section above.


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12. The decrease was mainly due to the decrease in trade receivables that were past due for over 60 daysin 1Q2019 as compared to 1Q2018.

13. The increase was mainly due to the increase in (i) profit before income tax expense and (ii) non-taxdeductible Listing expenses.

14. The slight increase was mainly due to (i) the slight increase in revenue by approximately S$72,000and (ii) the decrease in our cost of materials by approximately S$0.2 million. These were partiallyoffset by the increase in non-recurring Listing expense of approximately S$0.1 million.

For further details of the fluctuations of each item of our combined statements of profit or loss and othercomprehensive income between 1Q2018 and 1Q2019, please refer to the paragraph headed ‘‘Description ofselected components of consolidated statements of profit or loss and other comprehensive income’’ in thissection.


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YEAR-ON-YEAR COMPARISON OF RESULTS OF OPERATIONS

Financial year ended 31 December 2018 compared to financial year ended 31 December 2017

FY2017 FY2018 Increase/(Decrease)Notes S$’000 S$’000 S$’000 %

Revenue 18,641 17,985 (656) (3.5)– After-market automotive

services 1 15,994 14,253 (1,741) (10.9)– Car rental services 2 2,252 2,454 202 9.0– Supply of passenger car spare

parts, accessories andautomotive equipment 3 395 1,278 883 223.5

Other net income and gains 4 205 276 71 34.6

Items of expensesCost of materials 5 (6,124) (5,279) 845 (13.8)Employee benefit expenses 6 (4,885) (4,647) 238 (4.9)Other expenses 7 (3,150) (3,319) (169) 5.4Depreciation of property,plant and equipment 8 (1,862) (1,930) (68) 3.7

Depreciation of right-of-use assets – – – –

Marketing and advertising expenses (178) (78) 100 (56.2)Finance costs 9 (308) (328) (20) 6.5Listing expenses 10 – (2,494) (2,494) N/AImpairment of trade receivables 11 (115) (93) 22 (19.1)

Profit before income tax expense 2,224 93 (2,131) (95.8)

Income tax expense 12 (318) (336) (18) 5.7

Profit/(loss) for the year 13 1,906 (243) (2,149) (112.7)

Profit/(Loss) attributable to:Owners of the Company 1,773 (273) (2,046) (115.4)Non-controlling interests 133 30 (103) (77.4)

1,906 (243) (2,149) (112.7)

Total comprehensive incomeattributable to:Owners of the Company 1,773 (273) (2,046) (115.4)Non-controlling interests 133 30 (103) (77.4)

1,906 (243) (2,149) (112.7)


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1. The decrease was due to the decrease in revenue from the provision of inspection, maintenance andnon-insured repair services by approximately S$2.8 million due to (a) the decrease in the number ofpassenger cars that we provided inspection, maintenance and non-insured repair services as ourlimited servicing capacity was utilised for meeting the increase in demand of insured repair jobs.Such decrease was partially offset by (i) the increase in revenue from the provision of insured repairservices by approximately S$0.7 million due to the increase in the number of insured repair jobs; and(ii) the increase in revenue from the warranty related business by approximately S$0.4 million due tothe increase in number of passenger cars we have serviced under Customer F’s motor warrantyprogramme. Notwithstanding that, although the utilisation of our servicing capacity was similar inFY2017 and FY2018, the increase in revenue from the provision of insured repair services ofapproximately S$0.7 million was insufficient to offset the decrease in revenue from the provision ofinspection, maintenance and non-insured repair services of approximately S$2.8 million. This wasprimarily due to the significant decrease in the average servicing fees received from insured repairservices, which decreased from approximately S$10,094 in FY2017 to approximately S$6,112 inFY2018. The decrease in the average servicing fees was mainly due to the change in servicing mix asour Group repaired a higher proportion of insured entry and medium level car in FY2018 which has alower absolute dollar value per repair as compared to luxury and ultra-luxury supercars.

2. The increase was mainly due to the full year revenue contribution from 50 additional long-term rentalpassenger cars to Customer E after March 2017.

3. The increase was mainly due to (i) the increase in revenue from the supply of automotive equipmentas we secured a new 15 years licensing agreement where we sold an automotive equipment to a newcustomer in FY2018; and (ii) the increase in sales of passenger car spare parts and accessories toCustomer I.

4. The increase was mainly due to the increase in referral fees collected from Customer F’s motorwarranty distributor when we referred our customers to use Customer F’s motor warranty programmein FY2018.

5. The decrease was mainly due to the decrease in business volume in the provision of our inspection,maintenance and non-insured repair services in FY2018 compared to FY2017. Notwithstanding that,we still managed to meet the sales target provided by our suppliers, allowing us to enjoy similarpurchase discounts from our suppliers in FY2018.

6. The decrease was mainly due to the decrease in performance bonuses declared in FY2018 as we failedto meet our revenue target in FY2018. The decrease was partially offset by the increase in headcountof our Group during FY2018.

7. The increase was mainly due to (i) the increase in maintenance costs; (ii) the increase in cost ofservices; and (iii) the increase in office related expenses, which were partially offset by a decrease in(i) the impairment of inventories and (ii) bad debts written off in FY2018 as compared to FY2017.


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8. Our depreciation of property, plant and equipment remained relatively stable in FY2017 and FY2018,respectively.

9. The increase was mainly due to the higher level of bank borrowings and finance lease obligationsduring FY2018 as compared to FY2017.

10. See ‘‘Description of selected components of consolidated statements of profit or loss and othercomprehensive income – Listing expenses’’ in this section above.

11. The decrease was mainly due to the decrease in trade receivables that were related to customers withpoor settlement history in FY2018.

12. The increase was mainly due to the increase in profit before income tax expense after adjusting fornon-tax deductible item.

13. The decrease was mainly due to the non-recurring Listing expenses of approximately S$2.5 million inFY2018. Excluding the non-recurring listing expenses, our profit for the period would amount toapproximately S$2.3 million.

For further details of the fluctuations of each item of our consolidated statements of profit or loss and othercomprehensive income between FY2017 and FY2018, please refer to ‘‘Description of selected components ofconsolidated statements of profit or loss and other comprehensive income’’ in this section.


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YEAR-ON-YEAR COMPARISON OF RESULTS OF OPERATIONS

Financial year ended 31 December 2017 compared to financial year ended 31 December 2016

FY2016 FY2017 Increase/(Decrease)Notes S$’000 S$’000 S$’000 Percentage

Revenue 16,335 18,641 2,306 14.1– After-market automotive

services 1 15,119 15,994 875 5.8– Car rental services 2 618 2,252 1,634 264.4– Supply of passenger car spare

parts, accessories andautomotive equipment 3 598 395 (203) (34.0)

Other net income and gains 4 742 205 (537) (72.4)

Items of expensesCost of materials 5 (6,462) (6,124) 338 (5.2)Employee benefit expenses 6 (4,348) (4,885) (537) 12.4Other expenses 7 (2,727) (3,150) (423) 15.5Depreciation of property,plant and equipment 8 (1,302) (1,862) (560) 43.0

Depreciation of right-of-use assets – – – –

Marketing and advertising expenses (198) (178) 20 (10.1)Finance costs 9 (102) (308) (206) 202.0Listing expenses 10 – – – N/AImpairment of trade receivables 11 (27) (115) (88) 325.9

Profit before income tax expense 1,911 2,224 313 16.4

Income tax expense 12 (482) (318) 164 (34.0)

Profit for the year 13 1,429 1,906 477 33.4

Profit attributable to:Owners of the Company 1,154 1,773 619 53.6Non-controlling interests 275 133 (142) (51.6)

1,429 1,906 477 33.4

Total comprehensive incomeattributable to:Owners of the Company 1,154 1,773 619 53.6Non-controlling interests 275 133 (142) (51.6)

1,429 1,906 477 33.4


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1. The increase was due to the increase in revenue from the provision of insured repair services byapproximately S$1.1 million, which was mainly due to the increase in the number of insured repairjobs. Such increase was partially offset by (i) the decrease in revenue from the warranty relatedbusiness by approximately S$0.1 million as we restructured our motor warranty programme tocollaborate with Customer F as required by the Monetary Authority of Singapore; (ii) the decrease inrevenue from provision of inspection, maintenance and non-insured repair services by approximatelyS$0.1 million due to the decrease in average revenue per passenger car to whom we providedinspection, maintenance and non-insured repair services.

2. The increase was mainly due to the increase in revenue from long-term rentals by approximatelyS$1.5 million, which was due to the increase in the number of long-term rental passenger cars thatwere rented out to Customer E.

3. The decrease was mainly due to the fact that we did not supply any automotive equipment in FY2017,in comparison to approximately S$0.5 million revenue generated from the supply of automotiveequipment in FY2016. The decrease was partially offset by an increase in the supply of passenger carspare parts and accessories when we secured new business with Customer I in the second half ofFY2017.

4. The decrease was mainly due to (i) the decrease in government grants during FY2017 which wasmainly due to lower cash payout from the PIC Scheme, WC Scheme and SEC Scheme; (ii) thedecrease in COE encashments as we deregistered fewer passenger cars in FY2017; (iii) the fact thatwe did not recover any bad debt in FY2017; and (iv) the decrease in others as we disposed lessscrapped materials in FY2017.

5. The decrease was mainly due to the fact that the increase in business volume from our after-marketautomotive services in FY2017 has led us to purchase more materials from our suppliers. As a result,our purchase amount in FY2017 was able to meet their sales target, allowing us to enjoy a higherpurchase discount.

6. The increase was mainly due to (i) the increase in headcount of our operation team and workshoptechnicians; and (ii) the hiring of more senior supervisor roles in certain departments. The increasewas partially offset by the decrease in discretionary bonuses received by our Directors in FY2017.

7. The increase was mainly due to (i) the increase in maintenance costs of our rental passenger cars aswe increased our fleet size; (ii) the increase in the impairment of inventories and bad debts writtenoff; (iii) the increase in professional and legal fees as we conduct internal group restructuring inpreparation for our Listing; and (iv) the increase in rental and utilities expenses. These increases werepartially offset by the decrease in spending on office-related expenses and refreshments mainly due tosavings from the cost control measures that we implemented in FY2017.

8. The increase was mainly due to an additional 69 units of rental passenger cars purchased in FY2017.


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9. The increase was mainly due the higher level of bank borrowings and finance lease obligations inFY2017 as compared to FY2016.

10. See ‘‘Description of selected components of consolidated statements of profit or loss and othercomprehensive income – Listing expenses’’ in this section above.

11. The increase was due to the fact that our management has considered certain trade receivables,recoverability being remote and made specific provisions of approximately S$0.1 million in FY2017.

12. The decrease was mainly due to the fact that our Group had made over provisions in previous yearswhich was partially offset by the increase in our profit before income tax expense.

13. The increase was mainly due to (i) the increase in revenue by approximately S$2.3 million; (ii) thedecrease in cost of materials by approximately S$0.3 million; and (iii) the decrease in income taxexpenses by approximately S$0.2 million. These were partially offset by (i) the decrease in other netincome and gains by approximately S$0.5 million; (ii) the increase in depreciation of property, plantand equipment by approximately S$0.6 million; (iii) the increase in employee benefit expenses byapproximately S$0.6 million; (iv) the increase in other expenses by approximately S$0.4 million; and(v) the increase in finance cost by approximately S$0.2 million.

For further details of the fluctuations of each item of our consolidated statements of profit or loss and othercomprehensive income between FY2016 and FY2017, please refer to ‘‘Description of selected components ofconsolidated statements of profit or loss and other comprehensive income’’ in this section.


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SUMMARY OF CONSOLIDATED STATEMENTS OF FINANCIAL POSITION


31 March20192016 2017 2018

S$’000 S$’000 S$’000 S$’000

Non-current assetsProperty, plant and equipment 6,956 12,257 10,269 359Right-of-use assets – – – 12,301Deposits 249 249 263 263

Total non-current assets 7,205 12,506 10,532 12,923

Current assetsInventories 1,188 1,408 1,014 1,001Trade and other receivables 2,839 4,501 5,176 5,375Tax recoverable 65 – – –

Cash and cash equivalents 1,810 4,071 3,031 2,681

Total current assets 5,902 9,980 9,221 9,057

Current liabilitiesTrade and other payables 5,085 5,825 3,906 3,705Lease liabilities – – – 3,783Borrowings – 101 164 165Finance lease obligations 1,050 2,268 2,210 –

Current tax liabilities 78 256 330 411

Total current liabilities 6,213 8,450 6,610 8,064

Net current (liabilities)/assets (311) 1,530 2,611 993

Total assets less current liabilities 6,894 14,036 13,143 13,916

Non-current liabilitiesOther payables 96 96 96 96Lease liabilities – – – 5,358Borrowings – 626 810 768Finance lease obligations 3,810 7,064 4,697 –

Deferred tax liabilities 365 495 635 658

Total non-current liabilities 4,271 8,281 6,238 6,880

NET ASSETS 2,623 5,755 6,905 7,036

Capital and reservesShare capital – – 17 17Reserves 2,311 5,476 6,888 7,019

Equity attributable to owners of theCompany 2,311 5,476 6,905 7,036

Non-controlling interest 312 279 – –

TOTAL EQUITY 2,623 5,755 6,905 7,036


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DISCUSSION OF SELECTED COMPONENTS OF CONSOLIDATED STATEMENTS OF FINANCIALPOSITION

Property, plant and equipment

The following table sets forth our property, plant and equipment as at the dates indicated:

As at 31 December As at 31 March

2016 2017 2018 2019

S$’000 % S$’000 % S$’000 % S$’000 %

Motor vehicles 6,165 88.6 11,807 96.3 10,054 97.9 139 38.7

Machines and equipment 309 4.4 145 1.3 67 0.7 56 15.6

Leasehold improvements 234 3.4 141 1.1 32 0.3 18 5.0

Computer 163 2.4 138 1.1 105 1.0 138 38.4

Furniture and fittings 56 0.8 11 0.1 2 0.0 1 0.3

Office equipment 29 0.4 15 0.1 9 0.1 7 2.0

Total 6,956 100.0 12,257 100.0 10,269 100.0 359 100.0

Our property, plant and equipment principally consisted of motor vehicles and machines and equipment.Our motor vehicles and machines and equipment depreciated with useful life ranging from 5 to 10 years.

The significant increase in our property, plant and equipment by approximately S$5.3 million (or 76.2%)from approximately S$7.0 million as at 31 December 2016 to approximately S$12.3 million as at 31 December2017 was primarily due to the addition of 69 rental passenger cars in FY2017, amounted to approximately S$7.4million which was partially offset by depreciation expenses of approximately S$1.9 million. Our property, plantand equipment subsequently decreased by approximately S$2.0 million (or 16.2%) to approximately S$10.3million as at 31 December 2018 mainly as a result of the depreciation charges for the year.

Our property, plant and equipment decreased to approximately S$0.4 million as at 31 March 2019, whichwas mainly due to the motor vehicles under finance lease obligations with a net carrying amount ofapproximately S$9.9 million reclassified as right-of-use assets as at 1 January 2019 due to the adoption ofHKFRS 16.


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Capital expenditures

Historical capital expenditures

The following table sets out our Group’s capital expenditures for the years/periods indicated.

FY2016 FY2017 FY2018 1Q2019S$’000 S$’000 S$’000 S$’000

Capital expenditureProperty, plant and equipment– Motor vehicles 4,606 7,403 21 –

– Machines and equipment 156 89 22 2– Leasehold improvements 248 30 7 –

– Furniture and fittings 17 1 11 –

– Office equipment 33 2 10 1– Computer 158 38 68 79

Total 5,218 7,563 139 82

Our capital expenditures during the Track Record Period mainly comprised of purchase of passenger carsfor our car rental services. Our capital expenditures were funded out of the proceeds of bank borrowings, financelease obligations and cash generated from operations.

Planned capital expenditures

Save for the planned usage of the net proceeds from the Share Offer, as disclosed in the section headed‘‘Future Plans and Use of Proceeds’’ in this prospectus, the capital commitments as disclosed in ‘‘Operatinglease commitments’’ below and the additions of property, plant and equipment necessary for our Group’sbusiness operations which may be made by our Group from time to time, our Group had no material plannedcapital expenditures as at the Latest Practicable Date.

Right-of-use assets

Our right-of-use assets represent (i) the motor vehicles under finance lease obligations and (ii) leasedproperties under operating leases which amounted to approximately S$12.3 million as at 31 March 2019.

Motor vehicles with a net carrying amount of approximately S$9.9 million were reclassified as right-of-useassets from property, plant and equipment as at 1 January 2019. Additional right-of-use assets of lease propertieswith net carrying amount of approximately S$3.2 million were recognised as at 1 January 2019. Such decreasewas due to the depreciation expenses charged for the period.

Inventories

Our inventory includes passenger car spare parts, accessories and consumables which are required forrendering our after-market automotive services. These inventories are generally not subject to stock obsolescencedue to their durable nature.


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Our inventories increased by approximately S$0.2 million (or 18.5%) from approximately S$1.2 million asat 31 December 2016 to approximately S$1.4 million as at 31 December 2017 as we increased our purchase ofspare parts, accessories and consumables to (i) cater our growing business volume in the after-market automotiveservices in FY2017; and (ii) we have stocked up more varieties of spare parts and accessories for different typesof passenger cars to ensure we are able to provide after-market automotive services to our customers in a timelymanner. Subsequently, our inventories decreased by approximately S$0.4 million (or 28.0%) to approximatelyS$1.0 million as at 31 December 2018 as we sold more passenger car spare parts and accessories near the end ofFY2018. Our inventories remained relatively stable at approximately S$1.0 million as at 31 March 2019.

We monitor our inventory on a group level with a centralised SAP system. We maintain records ofinventory movements and monitor our inventory levels regularly by conducting a physical check with theassistance of our centralised SAP system which provides us with real-time inventory levels of differentmaterials. Our warehouse staff also conduct physical inventory taking at our warehouse facilities periodically toensure accuracy of our inventory records. We closely monitor our inventory level by performing periodicalreviews of the inventory records.

As our Directors are of the opinion that the risk of inventory obsolescence is low due to its durable nature,we make specific provision for inventory impairment based on assessments of the net realisable values ofexisting inventories. Allowances are applied to inventories where events or changes in circumstances indicatethat the net realisable value of certain items is lower than the cost of those items. Where the estimated netrealisable value is lower than the cost of the inventory items, management would write-down the inventories costto its net realisable value. Our management estimates the net realisable value by comparing the latest purchaseprice trend of the passenger car spare parts, accessories and consumables with the cost on our inventory list atthe end of each Track Record Period. Our Directors are of the view that our Group’s provisioning policies forinventories are adequate. The amounts of write off of inventories were approximately nil, S$72,000, nil and nilfor FY2016, FY2017, FY2018 and 1Q2019, respectively.


31 March20192016 2017 2018

Average inventory turnover days 60.0 77.3 83.7 77.4

Note: Average inventory turnover days is calculated based on the average of the opening and ending inventory balance divided bycost of materials for the year/period multiplied by 365 days and 90 days, respectively.

The increase in our average inventory turnover days from approximately 60.0 days as at 31 December 2016to approximately 77.3 days as at 31 December 2017 was mainly due to the increase in the variety of spare partsthat we have to stock up to minimise our servicing lead time. Our average inventory turnover days increasedfrom approximately 77.3 days as at 31 December 2017 to approximately 83.7 days as at 31 December 2018mainly due to the decrease in the business volume of our inspection, maintenance and non-insured repairservices, resulting in the decrease in our cost of materials in FY2018. Our average inventory turnover daysdecreased to 77.4 days as at 31 March 2019.

As at the Latest Practicable Date, approximately S$0.4 million (or 38.2%) of our inventories as at31 March 2019 has been utilised or sold.


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Trade and other receivables

The following table sets forth our trade and other receivables as at the dates indicated:


31 March2016 2017 2018 2019

S$’000 S$’000 S$’000 S$’000

Trade receivables, net 2,079 3,784 3,410 3,585Deposit paid 180 179 84 50Prepayments 158 218 1,384 1,387Amount due from related parties – 33 – –

Contract assets – – 288 332Other receivables 422 287 10 21

Total 2,839 4,501 5,176 5,375

Trade receivables

Our trade receivables mainly relates to: (i) trade receivables arising from insured repair jobs that weperformed; (ii) customers who were granted credit terms; and (iii) sales payment by credit card which are clearedby banks on the following business day. Our trade receivables increased by approximately S$1.7 million (or82.0%) from approximately S$2.1 million as at 31 December 2016 to approximately S$3.8 million as at31 December 2017. Such increase was mainly due to (i) the increase in trade receivables arising from insuredrepair services; and (ii) the increase in our total revenue during FY2017.

Our trade receivables decreased by approximately S$0.4 million (or 9.9%) from approximately $3.8 millionas at 31 December 2017 to approximately S$3.4 million as at 31 December 2018. Such decrease was mainly dueto the decrease in trade receivables arising from insured repair services. Subsequently, our trade receivablesincreased by approximately S$0.2 million (or 5.1%) to S$3.6 million as at 31 March 2019. Such increase wasmainly due to the increase in trade receivables arising from Customer E. As at the Latest Practicable Date,approximately S$2.7 million (or 73.6%) of our trade receivables outstanding as at 31 March 2019 has beensubsequently settled.


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The following table sets forth the aging analysis of our trade receivables as at the dates indicated, based onthe invoice date:


2016 2017 2018 2019

S$’000 % S$’000 % S$’000 % S$’000 %

Trade receivables arising from insured

repair services

Within 30 days 300 14.4 1,108 29.3 85 2.5 196 5.5

31 – 60 days 46 2.2 168 4.4 51 1.5 133 3.7

61 – 90 days 24 1.2 243 6.4 202 5.9 50 1.4

91 – 180 days 35 1.7 177 4.7 439 12.9 282 7.9

181 – 365 days 114 5.5 123 3.3 332 9.7 427 11.9

Over 365 days 173 8.3 155 4.1 357 10.5 370 10.3

Sub-Total 692 33.3 1,974 52.2 1,466 43.0 1,458 40.7

Trade receivables arising from other services

we provide

Within 30 days 649 31.2 1,164 30.8 903 26.5 695 19.3

31 – 60 days 225 10.8 277 7.3 543 15.9 526 14.7

61 – 90 days 57 2.8 73 1.9 248 7.3 252 7.0

91 – 180 days 212 10.2 59 1.6 101 3.0 613 17.1

181 – 365 days 104 5.0 103 2.7 62 1.8 39 1.1

Over 365 days 140 6.7 134 3.5 87 2.6 2 0.1

Sub-Total 1,387 66.7 1,810 47.8 1,944 57.0 2,127 59.3

Total 2,079 100.0 3,784 100.0 3,410 100.0 3,585 100.0

Trade receivables arising from insured repair services represented 33.3%, 52.2%, 43.0% and 40.7% of ourtotal trade receivable for FY2016, FY2017, FY2018 and 1Q2019, respectively. The insured repair services thatwe performed are related to insurance claims arising from motor accidents which are paid by insurancecompanies to us.

Passenger car owners may authorise us to facilitate an insurance claim when they bring in passenger carsinvolved in accidents for repair by signing a letter of authority. Our Group will then handle the insurance claimwith the relevant insurance companies on behalf of the passenger car owners.


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We do not enter into any contractual settlement arrangements with our customers of insured repair servicesas (i) based on our Group’s experience, different insurance companies have different internal approval processfor the settlement of insurance claims and the time required to settle the insurance claims is dependent on thecomplexity of the accidents and whether there is any human injury involved; and (ii) it is beyond the passengercar owners’ control to determine when the insurance companies will make the payment to us. Given the natureof the insured repaired services as explained above, it is difficult for us to determine a standardized credit periodfor our insured repair services. We did not provide any credit periods to the relevant insurance companies inorder to urge them to settle the payment as soon as possible once we issued the invoices. Moreover, under theletter of authority, the passenger car owner has undertaken to bear all costs incurred on an indemnity basis forthe motor accident matter including cost of repairs, all expenses and other legal costs. Our Directors thus believethat in the event where the insurance companies fail to reimburse us, we can claim from the passenger car ownerto recover the outstanding amount.

Trade receivables arising from other services we provided represented 66.7%, 47.8%, 57.0% and 59.3% ofour total trade receivables for FY2016, FY2017, FY2018 and 1Q2019, respectively. These trade receivables aremostly related to customers who were granted credit terms.

In order to minimise credit risk, our management has delegated teams responsible for determination ofcredit limits, credit approvals and monitoring procedures on credit quality of trade receivables and credit historyof debtors. Our Group may grant credit terms to our customers subject to detailed assessment of theirbackground and payment history.

Before accepting any customer requests for credit terms, our operation team will assess the potentialcustomers’ credit quality and define credit limits for them. Credit limits attributable to customers and creditterms granted to customers are reviewed regularly by our chief operating officer on an ongoing basis. Ouroperation team will evaluate customers’ validity through ACRA Portal for customer’s company details, includinglength of incorporation, activity status and bankruptcy record, paid-up share capital amount and annual filingrecords. The credit period granted to our customers was between 30 days to 90 days during the Track RecordPeriod. We maintain strict control over our outstanding receivables to minimise credit risk. We typically do notrequire any collateral as security.


31 March2016 2017 2018 2019

Average trade receivables turnover days (alltrade receivables) 46.1 57.4 73.0 72.2

Average trade receivables turnover days(excluding trade receivables arising frominsured repair services) 30.1 35.3 49.1 47.2

Average trade receivables turnover days (tradereceivables arising from insured repairservices only) 285.0 230.6 228.2 276.6

Note: Average trade receivables turnover days is calculated by dividing the average of the opening and ending trade receivablesbalance by revenue for the year/period and multiplied by 365 days and 90 days, respectively.


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The average turnover days of our trade receivables were approximately 46.1 days, 57.4 days, 73.0 days and72.2 days for FY2016, FY2017, FY2018 and 1Q2019, respectively. The increase in our average trade receivablesturnover days during the Track Record Period was mainly due to the increase in trade receivables arising frominsured repair jobs that we performed as we have set up a motor accident concierge desk to focus on insuredrepair jobs since April 2016.

The average turnover days of our trade receivables arising from other services we provided wereapproximately 30.1 days, 35.3 days, 49.1 days and 47.2 days for FY2016, FY2017, FY2018 and 1Q2019,respectively, which were within the credit periods we offered to these customers during the Track Record Period.The increase in average trade receivables turnover days (excluding trade receivables arising from insured repairservices) during the Track Record Period was mainly due to the increase in trade receivables from Customer Eand Customer F as a result of the increase in business volume and revenue from them.

The average turnover days of our trade receivables arising from insured repair services decreased fromapproximately 285.0 days for FY2016 to approximately 230.6 days for FY2017, and further decreased toapproximately 228.2 days for FY2018. This was mainly due to the improvement in our collection process afterwe recruited a motor claim executive to focus on collecting these outstanding receivables for us in FY2017. Ouraverage turnover days of our trade receivables arising from insured repair services increased to 276.6 days for1Q2019.

The insurance companies generally have longer payment periods, which our Directors believe is due totheir lengthy internal approval process for the settlement of the insurance claim. In addition, in motor accidentsthat involve human injury, it is the practice of insurance companies to settle payment in relation to motorinsurance claims together with any claims arising from human injury which generally takes longer to settle.

Our Directors believe that the increase in trade receivables and average trade receivables turnover daysduring the Track Record Period did not result in a material adverse impact on our liquidity or cash flow.However, for the risks associated therewith, please refer to the section headed ‘‘Risk Factors – Risks relating toour business – Our financial condition and results of operations could be negatively affected if we are unable tocollect our trade receivables in a timely manner’’.


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The following table sets forth the aging analysis of the trade receivables that are not individually norcollectively considered to be impaired:


Subsequent

settlement

as at

the Latest

Practicable

2016 2017 2018 2019 Date

S$’000 % S$’000 % S$’000 % S$’000 % S$’000

Trade receivables arising from insured repair

services

Neither past due nor impaired 197 9.5 129 3.4 – – 28 0.8 28

Past due but not impaired:

Less than 60 days 149 7.2 1,147 30.3 250 7.3 305 8.5 257

61 – 90 days 24 1.1 243 6.4 89 2.6 46 1.3 38

91 – 180 days 35 1.7 177 4.7 439 12.9 282 7.9 247

181 – 365 days 114 5.5 123 3.3 331 9.7 427 11.9 320

Over 365 days 173 8.3 155 4.1 357 10.5 370 10.3 171

495 23.8 1,845 48.8 1,466 43.0 1,430 39.9 1,033

Sub-Total 692 33.3 1,974 52.2 1,466 43.0 1,458 40.7 1,061

Trade receivables arising from other services we

provide

Neither past due nor impaired 280 13.5 654 17.3 893 26.1 407 11.4 262

Past due but not impaired:

Less than 60 days 634 30.5 808 21.3 608 17.8 1,076 30.0 733

61 – 90 days 43 2.1 68 1.8 246 7.2 358 10.0 347

91 – 180 days 195 9.4 44 1.2 57 1.7 271 7.5 207

181 – 365 days 97 4.6 102 2.7 53 1.6 13 0.3 8

Over 365 days 138 6.6 134 3.5 87 2.6 2 0.1 19

1,107 53.2 1,156 30.5 1,051 30.9 1,720 47.9 1,314

Sub-Total 1,387 66.7 1,810 47.8 1,944 57.0 2,127 59.3 1,576

Total 2,079 100.0 3,784 100.0 3,410 100.0 3,585 100.0 2,637

Trade receivables that were past due but not impaired accounted for approximately 77.0%, 79.3%, 73.9%and 87.8% of our total trade receivables as at 31 December 2016, 31 December 2017, 31 December 2018 and31 March 2019, respectively. Such past due but not impaired trade receivables for each of the Track RecordPeriod were mainly related to (i) insurance companies, (ii) customers with on-going business relationships withour Group; and (iii) customers who have arranged a progressive payment.


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The relatively high percentage of our trade receivables that were past due but not impaired during theTrack Record Period was mainly due to (i) the increase in trade receivables arising from insured repair jobs; and(ii) the increase in trade receivables from Customer F due to the increase in warranty related business with them.

Based on our past experience with these customers and evaluation of their current credit quality, ourDirectors believe that no impairment allowance is necessary in respect of these balances as (i) our Directors areconfident in the credit quality of the relevant customers given their track record with us. For trade receivablesarising from insured repair services, the insurance companies are regulated by Monetary Authority of Singaporeand that they are reputable international firms with a good payment history with us; for trade receivables arisingfrom other services we provided, as at 31 March 2019, approximately 56.6% was related to our top 5 customerswhich we have a stable relationship with; and (ii) our Group has been receiving ongoing settlements from otherrelevant customers during the Track Record Period. Therefore, our Directors do not consider there is asignificant change in the credit quality of the trade receivables that were past due but not impaired and considerthe amounts to be recoverable.

In order to ensure our collection process is efficient and effective, we have adopted the following policiessince January 2018: (i) our finance department must prepare a trade receivables aging analysis report on amonthly basis; and (ii) our chief executive officer, chief operating officer and chief finance officer hold monthlymeetings to review the trade receivables aging analysis report to (i) ensure that sufficient action is taken tocollect items that are overdue; (ii) resolve items that are under dispute; (iii) provide impairment for items wherecollection is in doubt; and (iv) make decision to write off items which have no likelihood of being collected. Fortrade receivables past due from insurance companies, our motor accident concierge desk will liaise with them;for trade receivables past due from individual customers, our head service advisor will liaise with them; for tradereceivables past due from corporate customers, our finance department will contact directly with their respectivefinance departments. Except for trade receivables past due from insurance companies, our Group may appoint adebt collector if necessary when (i) the trade receivables have been passed due over 180 days and the customerhas been avoiding our contacts; or (ii) the Directors are of the view that such receivables or customers aredifficult to deal with.

Our Directors believe that our enhanced internal control policies and procedures are effective in enhancingour Group’s ability in managing our recoverability risk going forward, after taking into consideration thefollowing: (i) as at the Latest Practicable Date, approximately S$1.6 million (or 74.0%) of our outstanding tradereceivables arising from other services as at 31 March 2019 has been subsequently settled and approximatelyS$1.1 million (or 72.8%) of our outstanding trade receivables arising from insured repair services as at 31 March2019 has also been subsequently settled; (ii) our Directors observed that our Group has been receiving paymentsfrom the past due trade receivables that were overdue by 365 days during the Track Record Period; and (iii) ourGroup did not experience any material difficulty in collecting trade receivables from our customers during theTrack Record Period.

We measure the loss allowance for our trade receivables at an amount equal to lifetime expected creditlosses. The expected credit losses of our trade receivables are estimated using a provision matrix by reference topast default experience of our customers, current market condition in relation to each customer’s exposure. Theexpected credit losses also incorporate forward-looking information with reference to general macroeconomicconditions that may affect the ability of our customers to settle receivables. We recognise lifetime expectedcredit losses for trade receivables based on individual significant customer or the ageing of customerscollectively that are not individually significant.


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For our trade receivables, we choose to apply the simplified approach permitted by HKFRS 9, whichpermits the use of lifetime expected loss provision for all trade receivables. We measure the expected creditlosses of our trade receivables based on shared credit risk characteristics and the days past due. The expectedloss rate of current trade receivables is assessed to be 0.1%. The rate for expected credit loss for tradereceivables past due within 90 days is assessed to be 1% and within 180 days is assessed to be 2%. For tradereceivables over 180 days and within 365 days, the rate for expected credit loss is assessed to be 5% and that forover 365 days is assessed to be 10%.

The following table sets forth the movements in impairment loss recognised in respect of our tradereceivables:


31 March2016 2017 2018 2019

S$’000 S$’000 S$’000 S$’000

At the beginning of the year/period 248 110 193 210Allowance for impairment 27 115 93 19Reversal of impairment (165) – (16) (18)Write off against allowance – (32) (60) –

As at end of year/period 110 193 210 211

Total provision of approximately S$51,000, S$0.1 million, S$98,000 and S$0.1 million was recognised asat 31 December 2016, 31 December 2017, 31 December 2018 and 31 March 2019, respectively, as ourmanagement considered the recoverability of balance to be remote. For the remaining trade receivables, ourGroup applies the simplified approach to provide for expected credit loss prescribed by HKFRS 9 and totalallowance of approximately S$59,000, S$72,000, S$0.1 million and S$0.1 million was made against the grossamount of trade receivables as at 31 December 2016, 31 December 2017, 31 December 2018 and 31 March2019, respectively.

We recorded impairment losses of approximately S$27,000, S$0.1 million, S$93,000 and S$19,000 forFY2016, FY2017, FY2018 and 1Q2019, respectively. The provision for impairment was made as (i) themanagement of our Group considered that the trade receivables concerned were related to customers with poorsettlement history and only a partial of the trade receivables is expected to be recovered; and (ii) our Groupapplied the simplified approach to provide for expected credit loss prescribed by HKFRS 9.

We have written off bad debt of nil, approximately S$32,000, nil and nil for FY2016, FY2017, FY2018 and1Q2019, respectively as the trade receivables concerned are related to customers that have gone bankrupt orclosed down.

Contract assets

Contract assets arise when the underlying services have been provided by our Group but yet to be billed.Our Group recorded contract assets of approximately S$0.3 million as at 31 March 2019 which was mainly dueto the fact that 36 insured repair jobs were performed by us but not yet certified by the relevant insurancecompanies as at the end of the period.


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Amount due from related parties

Our amount due from related parties increased from nil as at 31 December 2016 to approximately S$32,500as at 31 December 2017. The increase was mainly due to borrowings from one of our directors. Our amount duefrom related parties decreased to nil as at 31 December 2018 due to full repayment from the director.

As at the Latest Practicable Date, all amount due from related parties has been settled.

Trade and other payables

The following table sets forth our trade and other payables as at the dates indicated:


31 March2016 2017 2018 2019

S$’000 S$’000 S$’000 S$’000

Trade payables, net 1,401 1,203 748 677Other payables 177 3,663 1,556 1,401Contract liabilities 2,397 – – –

Accrued expenses 566 516 1,321 1,411Deposit received from customers 37 71 79 62GST payables 157 222 202 154Amounts due to shareholders 350 150 – –

Total 5,085 5,825 3,906 3,705

Trade payables

Our trade payables decreased from approximately S$1.4 million as at 31 December 2016 to approximatelyS$1.2 million as at 31 December 2017 and further decreased to approximately S$0.7 million as at 31 December2018. Our trade payables remained relatively stable at approximately S$0.7 million as at 31 March 2019. Thedecrease was mainly due to the fact that we have sped up our payments to our suppliers during the Track RecordPeriod. Set out below is an ageing analysis of our trade payables as at the dates indicated:


31 March2016 2017 2018 2019

S$’000 S$’000 S$’000 S$’000

Within 30 days 536 460 362 33131 – 60 days 426 410 251 20161 – 90 days 233 187 121 132Over 90 days 206 146 14 13

Total 1,401 1,203 748 677


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31 March2016 2017 2018 2019

Average trade payables turnover days 89.3 77.6 67.4 54.7

Note: Average trade payables turnover days is calculated by dividing the average of the opening and ending trade payables, by thetotal cost of materials for the year/period and multiplied by 365 days and 90 days, respectively.

We are usually granted a credit period of 30 days to 60 days by our suppliers. During the Track RecordPeriod, our average trade payables turnover days were generally longer than the credit period granted to us byour suppliers. This was mainly due to the fact that we have used a substantial amount of our cash for thepurchase of rental passenger cars during FY2016 and FY2017 and our Directors have decided to slightly delaythe payments to our suppliers in order to avoid putting our liquidity under pressure.

Our trade payables turnover days decreased from approximately 89.3 days as at 31 December 2016 toapproximately 77.6 days as at 31 December 2017, and further decreased to approximately 67.4 days as at31 December 2018. This was mainly due to the decrease in our trade payables while our cost of materials remainrelatively similar during the Track Record Period. We have sped up our payments to our suppliers to maintaingood business relationships with them as our liquidity improved after capital injection of (i) approximately S$1.6million from Mr. Chong, Ms. Lam, Ms. Ngo and Mr. Seow near the end of FY2017; and (ii) the capital injectionof approximately S$1.7 million from API in FY2018. Our trade payables turnover days decreased to 54.7 days asat 31 March 2019.

Our Group had no defaults with regard to payments of our trade payables during the Track Record Period.Our top 5 suppliers had remained stable and we generally maintain good relationships with our suppliers duringthe Track Record Period. For further details, please refer to the paragraph headed ‘‘Business – Suppliers andprocurement – Suppliers’’ in this prospectus.

As at the Latest Practicable Date, approximately S$0.6 million (or 90.6%) of our trade payablesoutstanding as at 31 March 2019 have been subsequently settled.

Other payables

Our other payables mainly relate to premium received on behalf of Customer F for its motor warrantyprogramme and instalments payable to Customer F.

Our other payables increased from approximately S$0.2 million as at 31 December 2016 to approximatelyS$3.7 million as at 31 December 2017. The substantial increase was mainly due to the fact that (i) ourcollaboration with Customer F required us to transfer the unearned warranty premiums we received for our motorwarranty programme by installments to Customer F and we reclassified such unearned warranty premiums asother payables which amounted to S$1.5 million as at 31 December 2017; (ii) we collected premiums on behalfof Customer F when customers sign up for Customer F’s motor warranty programme which amounted to S$1.5million as at 31 December 2017. For further details, please refer to the paragraph headed ‘‘Business – Customers– Our Motor Warranties Transfer Agreement with Customer F’’ in this prospectus; and (iii) we received rentalpayments in advance for certain long-term rental passenger cars from Customer E, which amounted toapproximately S$0.2 million as at 31 December 2017.


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Our other payables decreased to approximately S$1.6 million as at 31 December 2018 due to ourrepayments to Customer F. Our other payables further decreased to approximately S$1.4 million as at 31 March2019 due to (i) the absence of advance billing of rental to Customer E in March 2019 and (ii) the advance rentalbilling from our landlord was reclassified due to the application of HKFRS 16.

Contract liabilities

Our contract liabilities of approximately S$2.4 million as at 31 December 2016 mainly related to the motorwarranty programme offered by us in FY2016. However, with effect from 1 January 2017, we restructure ourmotor warranty programme and co-operated with Customer F as required by the Monetary Authority ofSingapore. Pursuant to the collaboration, we have transferred all the outstanding motor warranty agreements soldby us and the unearned warranty premiums to Customer F by instalments. For further details, please refer to theparagraph headed ‘‘Business – Customers – Our Motor Warranties Transfer Agreement with Customer F’’ in thisprospectus.

Accrued expenses

Our accruals comprised mainly of our accrued Listing expenses. Our accrued Listing expenses representedthe provision for Listing expenses in connection with the Listing and amounted to approximately nil, S$1.3million and S$1.4 million as at 31 December 2017, 31 December 2018 and 31 March 2019, respectively.

Amounts due to shareholders

Our amounts due to shareholders were approximately S$350,000 as at 31 December 2016. We borrowed atotal of S$350,000 from Mr. Lee in January 2015 and February 2016 respectively, and further borrowedS$150,000 from Ms. FF Lim in April 2015. We repaid S$150,000 to Mr. Lee on 24 December 2016. Theshareholder loans were unsecured, interest bearing at 2.5% to 6.5% per annum and repayable on demand.

Our amounts due to shareholders decreased to approximately S$150,000 as at 31 December 2017 andfurther decreased to nil as at 31 December 2018 due to repayments of the shareholder loans to Mr. Lee.

As of the Latest Practicable Date, all amounts due to shareholders have been settled.


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INDEBTEDNESS

The following table sets forth our indebtedness as at the dates indicated:


31 MarchAs at

31 July2016 2017 2018 2019 2019

S$’000 S$’000 S$’000 S$’000 S$’000(unaudited)

IndebtednessNon-currentBank borrowings – 626 810 768 708Finance lease obligations 3,810 7,064 4,697 – –

Lease liabilities – – – 5,358 4,281

CurrentBank borrowings – 101 164 165 168Finance lease obligations 1,050 2,268 2,210 – –

Lease liabilities – – – 3,783 3,638

Total 4,860 10,059 7,881 10,074 8,795

Our Directors confirm that there was no breach in financial covenants or other material covenants relatingto our bank borrowings and finance leases, and no material defaults by our Group in payment of its bankborrowings and finance leases during the Track Record Period and up to the Latest Practicable Date.

Bank borrowings

Set out below is the maturity profile of our bank borrowings as at the dates indicated.


31 MarchAs at

31 July2016 2017 2018 2019 2019

S$’000 S$’000 S$’000 S$’000 S$’000(unaudited)

On demand or within one year – 101 164 165 168More than one year but notexceedingtwo years – 105 171 172 175

More than two years but notexceedingfive years – 340 556 564 533

More than five years – 181 83 32 –

Total – 727 974 933 876


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Our bank borrowings consisted of term loans, which were interest-bearing at floating rates ranging from3.3% to 3.5%, 3.5% to 4.1%, 3.5% to 4.3% and 4.1% to 4.3% per annum for FY2017, FY2018, 1Q2019 andseven months ended 31 July 2019, respectively. The total outstanding bank borrowings amounted toapproximately S$0.7 million, S$1.0 million, S$0.9 million and S$0.9 million, as at 31 December 2017,31 December 2018, 31 March 2019 and 31 July 2019, being the latest practicable date for the purpose ofindebtedness, respectively. All of our bank borrowings were denominated in Singapore dollar.

During the Track Record Period, the majority of our bank borrowings were long-term bank loans, whichamounted to approximately S$0.6 million, S$0.8 million, S$0.8 million and S$0.8 million as at 31 December2017, 31 December 2018, 31 March 2019 and 31 July 2019, respectively.

As at 31 December 2017, 31 December 2018, 31 March 2019 and 31 July 2019, bank borrowings weresecured by (i) personal guarantee provided by one of our Directors and (ii) a second legal mortgage over aproperty of one of our Shareholders (collectively, the ‘‘Guarantee and Mortgage’’). The Guarantee andMortgage are expected to be fully released or replaced by corporate guarantees upon Listing. Please refer toNote 20 to the Accountants’ Report for further details.

Lease liabilities

We have adopted HKFRS 16 since 1 January 2019 as stated in note 3(a) of the Accountants’ Reportcontained in Appendix I to this prospectus. As such, leases have been recognised in the form of an asset (for theright of use) and a financial liability (for the payment obligation) in our Group’s consolidated statements offinancial position from 1 January 2019 onwards. Our lease liabilities amounted to approximately S$9.1 millionand S$7.9 million as at 31 March 2019 and 31 July 2019, respectively. Our lease liabilities consisted of (i) thelease obligations for our motor vehicles and (ii) our obligation to make lease payments under the property leases.

Set out below is the maturity profile of our lease liabilities as at the dates indicated:

Leaseobligationsof motorvehicles

Leaseliabilitiesof leased

properties TotalS$’000 S$’000 S$’000

As at 31 March 2019Within 1 year 2,201 1,582 3,783After 1 year but within 2 years 2,175 1,114 3,289After 2 years but within 5 years 1,974 95 2,069

Total 6,350 2,791 9,141


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Leaseobligationsof motorvehicles

Leaseliabilitiesof leased

properties TotalS$’000 S$’000 S$’000

As at 31 July 2019Within 1 year 2,226 1,412 3,638After 1 year but within 2 years 2,162 845 3,007After 2 years but within 5 years 1,274 – 1,274

Total 5,662 2,257 7,919

As at 31 March 2019 and 31 July 2019, lease obligations of motor vehicles were secured by the underlyingpassenger cars and personal guarantee by one of our Directors during the respective periods. The personalguarantee by one of our Directors is expected to be fully released or replaced by corporate guarantee uponListing.

Finance lease obligations

Our finance lease obligations were related to the purchase of passenger cars for our car rental services,which were denominated in Singapore dollar and with effective interest rates ranging from 1.58% to 2.78% perannum in FY2016, FY2017 and FY2018. Our total finance lease obligations amounted to approximately S$4.9million, S$9.3 million and S$6.9 million, as at 31 December 2016, 2017 and 2018, respectively. The increase byapproximately S$4.4 million (or 92.0%) from 31 December 2016 to 31 December 2017 was mainly attributableto the new finance leases for the purchase of 69 rental passenger cars, partially offset by our repayments duringthe year. With HKFRS 16 coming into effect from 1 January 2019, our finance lease obligations with a netcarrying amount of approximately S$6.9 million were reclassified as lease liabilities as at 1 January 2019.

Set out below is the maturity profile of our finance lease obligations as at the dates indicated and ignoringthe effect of any repayment on demand clauses.

As at 31 December2016 2017 2018

S$’000 S$’000 S$’000

Not later than 1 year 1,050 2,268 2,210Later than 1 year but not later than 5 years 3,714 7,003 4,697More than 5 years 96 61 –

Total 4,860 9,332 6,907

As at 31 December 2016, 31 December 2017 and 31 December 2018, finance lease obligations weresecured by the underlying passenger cars and personal guarantee by one of our Directors during the respectiveperiods. The personal guarantee by one of our Directors is expected to be fully released or replaced by corporateguarantee upon Listing. Please refer to Note 21 to the Accountants’ Report for further details.


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As at 31 July 2019, our total available bank borrowing facilities amounted to S$1.6 million of which S$0.4million was unutilised. Our Directors confirmed that we did not have any further plan for material debt financingas at the Latest Practicable Date.

Save as disclosed above, our Group did not have any loan capital issued and outstanding or agreed to beissued, bank overdrafts, loans or other similar indebtedness, liabilities under acceptances or acceptance credits,debentures, mortgages, charges, hire purchase commitments, guarantees or other material contingent liabilities asat the Latest Practicable Date.

RELATED PARTY TRANSACTIONS

Save as those disclosed in the paragraph headed ‘‘Discussion of selected components of consolidatedstatements of Financial Position – Contract assets – Amount due from related parties’’ and ‘‘Discussion ofselected components of consolidated statements of Financial Position – Trade and other payables – Amounts dueto shareholders’’ in this section and in Note 28 to the Accountants’ Report, our Directors confirm that thesetransactions were conducted on normal commercial terms and/or that such terms were no less favourable to ourGroup than terms available to Independent Third Parties and were fair and reasonable and in the interests of usand our Shareholders as a whole.

LIQUIDITY AND CAPITAL RESOURCES

Our Group’s principal uses of cash have been, and are expected to continue to be, operational costs andinvesting activities. During the Track Record Period, we met our liquidity requirements principally through acombination of internal resources, bank borrowings, and finance leases and cash raised from equity means suchas the issue of convertible loans.

We monitor our cash flows and cash balance on a regular basis and strive to maintain an optimal liquiditythat can meet our working capital needs while supporting a healthy level of business scale and expansion. Otherthan normal bank loans we obtain from commercial banks, we do not expect to have any material external debtfinancing plan in the near future.

Taking into consideration the financial resources presently available to us, including our existing cash andcash equivalents, cash flows from operations, and the net proceeds from the Share Offer, our Directors are of theview, that we have sufficient working capital for our present requirements and are able to fulfil our obligationsunder our business for at least the next 12 months commencing on the date of this prospectus.


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Cash flows

The following table sets forth a summary of our consolidated statements of cash flows for the yearsindicated:

FY2016 FY2017 FY2018 1Q2018 1Q2019S$’000 S$’000 S$’000 S$’000 S$’000

(unaudited)

Profit before income taxexpense 1,911 2,224 93 100 250

Operating cash flows afterworking capital changes 2,887 3,273 184 (880) 842

Interest paid (102) (308) (328) (86) (10)Income taxes (paid)/refund (219) 55 (122) – (15)

Net cash generated from/(used in) operating activities 2,566 3,020 (266) (966) 817

Net cash used in investingactivities (1,099) (786) (102) (8) (82)

Net cash (used in)/generatedfrom financing activities (776) 27 (672) 1,514 (1,085)

Net change in cash and cashequivalents 691 2,261 (1,040) 540 (350)

Cash and cash equivalents atbeginning of year/period 1,119 1,810 4,071 4,071 3,031

Cash and cash equivalents atend of year/period 1,810 4,071 3,031 4,611 2,681

Cash flows generated from/(used in) operating activities

Our cash flows generated from operating activities primarily represented cash receipts in respect of serviceswe provided and payments for purchases of materials, and expenses such as labour costs, operating expenses andadministrative expenses.

For FY2016, we recorded positive cash flows generated from operating activities of approximately S$2.6million. The amount is arrived at by adding back the non-cash items of approximately S$1.3 million, includingdepreciation to our profit before income tax expense of approximately S$1.9 million. The resultant amount ofapproximately S$3.2 million, representing our operating profit before working capital changes, is then adjustedby (i) a net decrease in working capital of approximately S$0.3 million; (ii) net income tax paid ofapproximately S$0.2 million and (iii) interest paid of approximately S$0.1 million. The net decrease in ourworking capital was attributable to (i) an increase in trade and other receivables of approximately S$0.9 million,due to the increase in trade receivable which was in tandem with the growth of our business and (ii) an increasein inventories of approximately S$0.3 million as a result of the accumulation of spare parts, accessories andconsumables to support the growth of our business, which was partially offset by an increase in trade and otherpayables of approximately S$0.9 million, mainly due to an increase in contract liabilities as our Group collectedmore warranty premiums from our own motor warranty programme in FY2016.


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For FY2017, we recorded positive cash flows generated from operating activities of approximately S$3.0million. The amount is arrived at by adding back the non-cash items of approximately S$2.4 million, includingdepreciation to our profit before income tax expense of approximately S$2.2 million. The resulting amount ofapproximately S$4.6 million, representing our operating profit before working capital changes, is then adjustedby (i) a net decrease in working capital of approximately S$1.4 million; (ii) net income tax refund ofapproximately S$0.1 million as the actual chargeable income for FY2016 is lower than the estimated chargeableincome that we reported during the year and (iii) interest paid of approximately S$0.3 million. The net decreasein our working capital was attributable to (i) an increase in trade and other receivables of approximately S$1.8million, due to the increase in trade receivables arising from insured repair services and (ii) an increase ininventories of approximately S$0.3 million as a result of, the accumulation of spare parts, accessories andconsumables to support the growth of our business, which was partially offset by an increase in trade and otherpayables of approximately S$0.7 million, mainly due to an increase in other payables as our Group collectedpremiums on behalf of Customer F when customers sign up for Customer F’s motor warranty programme.

For FY2018, we recorded cash flows used in operating activities of approximately S$0.3 million. Theamount is arrived at by adding back the non-cash items of approximately S$2.4 million, including depreciationand interest expenses to our profit before income tax expense of approximately S$93,000. The resulting amountof approximately S$2.5 million, representing our positive cash flows from operating profit before workingcapital changes, is then adjusted by (i) a net decrease in working capital by approximately S$2.3 million; and (ii)interest and income tax paid of approximately S$0.5 million. The net decrease in our working capital wasattributable to (i) an increase in trade and other receivables of approximately S$0.8 million, due to the increasein prepayments arising from the capitalisation of the equity portion of the Listing expenses as at 31 December2018, which is partially offset by the decrease in trade receivables arising from insured repair services; and (ii) adecrease in trade and other payables of approximately S$1.9 million, which was mainly due to (a) a decrease intrade payables as we sped up our payments to our suppliers to maintain good business relationships with them asour liquidity improved after the capital injection from our Pre-IPO Investors and (b) the decrease in otherpayables due to repayments made to Customer F, which were partially offset by the decrease in inventories ofapproximately S$0.4 million as we sold more passenger car spare parts and accessories in FY2018.

For 1Q2019, we recorded cash flows generated from operating activities of approximately S$0.8 million.The amount is arrived at by adding back the non-cash items of approximately S$0.9 million, includingdepreciation and interest expenses to our profit before income tax expense of approximately S$0.3 million. Theresulting amount of approximately S$1.2 million, representing our positive cash flows from operating profitbefore working capital changes, is then adjusted by (i) a net decrease in working capital by approximately S$0.4million; and (ii) interest and income tax paid of approximately S$25,000. The net decrease in our workingcapital was attributable to the increase in trade and other receivables of approximately S$0.2 million, due to (i)the increase in trade receivables arising from Customer E; (ii) the increase in prepayments arising from thecapitalization of the equity portion of the Listing expenses as at 31 March 2019; and (iii) the decrease in tradeand other payables of approximately S$0.2 million, which was mainly due to a decrease in other payables as (a)there was no advance billing of rental fee to Customer E in March 2019 and (b) the advance rental billing fromour landlord was reclassified due to the application of HKFRS 16.


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For further details regarding the major items affecting our profit before income tax expense and workingcapital during the Track Record Period, please refer to the paragraphs headed ‘‘Description of selectedcomponents of consolidated statements of profit or loss and other comprehensive income’’ and ‘‘Discussion ofselected components of consolidated statements of financial position’’ respectively in this section.

Cash flows used in investing activities

Our cash flows used in investing activities primarily represented cash used to acquire property, plant andequipment and the proceeds received from disposal of property, plant and equipment.

For FY2016, our net cash used in investing activities was approximately S$1.1 million as a result of thepurchase of passenger cars for our car rental services.

For FY2017, our net cash used in investing activities was approximately S$0.8 million as a result of thepurchase of passenger cars for our car rental services which was partially offset by the proceeds received fromdisposing certain rental passenger cars of approximately S$0.4 million.

For FY2018, our net cash used in investing activities was approximately S$0.1 million as a result of thepurchase of computers, software and hardware.

For 1Q2019, our net cash used in investing activities was approximately S$82,000 as a result of thepurchase of computers, software and hardware.

Cash flows (used in)/generated from financing activities

Our cash flows used in financing activities primarily consisted of (i) proceeds from convertible loan; (ii)repayment and drawdown of bank borrowings, (iii) repayment of finance lease obligations, (iv) distribution ofdividends, and (v) acquisition of non-controlling interests in a subsidiary.

For FY2016, our net cash used in financing activities was approximately S$0.8 million as a result of (i) therepayment of finance lease obligations of approximately S$0.6 million; (ii) the acquisition of non-controllinginterests in a subsidiary of approximately S$0.1 million; and (iii) dividends paid of approximately S$38,000.

For FY2017, our net cash generated from financing activities was approximately S$27,000 as a result of (i)the capital injection of approximately S$1.6 million from Mr. Chong, Ms. Ngo, Ms. Lam and Mr. Seow; and (ii)net drawdown of bank borrowings in the amount of S$0.7 million, which was partially offset by (i) therepayment of finance lease obligations of approximately S$1.9 million; and (ii) dividends paid of approximatelyS$0.4 million.

For FY2018, our net cash used in financing activities was approximately S$0.7 million as a result of (i) therepayment of finance lease obligations of approximately S$2.3 million; and (ii) the acquisition of the remaining45% equity interest in Optima Carz by the Group of approximately S$0.3 million, which was partially offset by(i) the capital injection of approximately S$1.7 million from API; and (ii) net drawdown of bank borrowings inthe amount of approximately S$0.2 million.

For 1Q2019, our net cash used in financing activities was approximately S$1.1 million as a result of thepayment of lease liabilities.


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NET CURRENT (LIABILITIES)/ASSETS

The following table sets forth the breakdown of our Group’s current assets and liabilities as at the datesindicated below:


31 MarchAs at

31 July2016 2017 2018 2019 2019

S$’000 S$’000 S$’000 S$’000 S$’000(unaudited)

Current AssetsInventories 1,188 1,408 1,014 1,001 915Trade and other receivables 2,839 4,501 5,176 5,375 5,478Tax recoverable 65 – – – –

Cash and cash equivalents 1,810 4,071 3,031 2,681 3,092

Total current assets 5,902 9,980 9,221 9,057 9,485

Current liabilitiesTrade and other payables 5,085 5,825 3,906 3,705 3,887Lease liabilities – – – 3,783 3,638Borrowings – 101 164 165 168Finance lease obligations 1,050 2,268 2,210 – –

Current tax liabilities 78 256 330 411 596

Total current liabilities 6,213 8,450 6,610 8,064 8,289

Net Current (Liabilities)/Assets (311) 1,530 2,611 993 1,196

We recorded net current liabilities in the amount of approximately S$0.3 million as at 31 December 2016which was mainly due to the increase in current portion of the finance lease obligations resulting from theacquisition of passenger cars in FY2016.

Our net current assets increased by approximately S$1.8 million from net current liabilities ofapproximately S$0.3 million as at 31 December 2016 to net current assets of approximately S$1.5 million as at31 December 2017, mainly due to (i) an increase in cash and cash equivalents of approximately S$2.2 million, ofwhich approximately S$1.6 million was due to the capital injection from Mr. Chong, Ms. Ngo, Ms. Lam andMr. Seow; (ii) an increase in trade and other receivables by approximately S$1.7 million which was mainly dueto increase in trade receivables arising from insured repair services; and (iii) an increase in inventories byapproximately S$0.2 million, which was partially offset by (i) an increase in finance lease obligations by S$1.2million as we purchased more passenger cars for our car rental business in FY2017; (ii) an increase in trade andother payables by approximately S$0.8 million; (iii) an increase in current tax liabilities of approximately S$0.2million; and (iv) an increase in bank borrowings of approximately S$0.1 million.


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Our net current assets increased by approximately S$1.1 million (or 70.7%) from approximately S$1.5million as at 31 December 2017 to approximately S$2.6 million as at 31 December 2018, which was mainly dueto (i) an increase in trade and other receivables by approximately S$0.7 million; and (ii) a decrease in trade andother payables by approximately S$1.9 million, which was partially offset by (i) a decrease in cash and cashequivalents of approximately S$1.1 million and; (ii) a decrease in inventories of approximately S$0.4 million.

Our net current assets decreased by approximately S$1.6 million (or 62.0%) from approximately S$2.6million as at 31 December 2018 to approximately S$1.0 million as at 31 March 2019, which was mainly due tothe fact that we had to recognise the current portion of the lease liabilities for our leased properties ofapproximately S$1.6 million since the adoption of HKFRS 16 on 1 January 2019.

Our net current assets increased to approximately S$1.2 million as at 31 July 2019, which was mainly dueto the increase in cash and cash equivalent by approximately S$0.4 million.

We were at net asset and net current asset positions as at 31 December 2017, 31 December 2018, 31 March2019 and 31 July 2019.

For further details regarding the major items affecting our net current assets during the Track RecordPeriod, please refer to ‘‘– Discussion of selected components of consolidated statements of financial position’’ inthis section.

OPERATING LEASE COMMITMENTS

The Group as a lessee

The following table sets forth our Group’s operating lease commitments under non-cancellable operatingleases as lessee as at the dates indicated:


31 March2016 2017 2018 2019

S$’000 S$’000 S$’000 S$’000

Future minimum lease payment payable:Within 1 year 1,325 1,235 1,773 –

In the second to fifth years, inclusive 1,799 683 1,625 –

Total 3,124 1,918 3,398 –

Operating lease payments represented rental payables by our Group for its leased premises. For furtherdetails, please refer to the section headed ‘‘Business – Our service centres and paint workshop’’ in thisprospectus.

Our Group is the lessee in respect of properties for its own use held under leases which were previouslyclassified as operating leases under HKAS 17. Our Group has initially applied HKFRS 16 using the modifiedretrospective approach. Under this approach, our Group adjusted the opening balances as at 1 January 2019 torecognise lease liabilities relating to these leases. From 1 January 2019 onwards, future lease payments would berecognised as lease liabilities in the consolidated statements of financial position in accordance with the policiesset out in Note 3(a) of the Accountants’ Report contained in Appendix I to this prospectus.


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Our Group as a lessor

The following table sets forth our Group’s operating lease commitments under non-cancellable operatingleases as lessor as at the dates indicated:


31 March2016 2017 2018 2019

S$’000 S$’000 S$’000 S$’000

Within one year 2,421 2,305 2,097 2,149In the second to fifth years 4,457 3,347 2,130 1,887

6,878 5,652 4,227 4,036

Operating lease income represented rent receivables of our Group for its long-term rental services. Forfurther details, please refer to the paragraph headed ‘‘Business – Our business – Car rental services – Long-termrentals’’ in this prospectus.

Revenue from the provision of car rental services were approximately S$0.6 million, S$2.3 million, S$2.5million and S$0.6 million for FY2016, FY2017, FY2018 and 1Q2019 respectively. For discussion on thefluctuations, please refer to the paragraph headed ‘‘Description of selected components of consolidatedstatements of profit or loss and other comprehensive income – Revenue by business segments – Car rentalservices’’ in this section.

CONTRACTUAL AND CAPITAL COMMITMENTS

As at the Latest Practicable Date, our Group had no significant contractual and capital commitments.

CONTINGENT LIABILITIES

As at 31 December 2016, 31 December 2017, 31 December 2018 and 31 March 2019, we did not have anysignificant contingent liabilities or outstanding guarantees in respect of payment obligations to any third parties.

OFF-BALANCE SHEET COMMITMENTS AND ARRANGEMENTS

As at the Latest Practicable Date, we have not entered into any off-balance sheet transactions.


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SUMMARY OF KEY FINANCIAL RATIOS

The table below sets out a summary of key financial ratios in respect of our results of operations for theyears and as at the dates indicated:

As at/For the yearended 31 December

As at/Forthe threemonthsended

31 March2016 2017 2018 2019

Net profit margin 8.7% 10.2% N/A(Note 7) 3.0%Current ratio (Note 1) 0.9 1.2 1.4 1.1Gearing ratio (Note 2) 1.9 1.7 1.1 1.4Net debt to equity ratio (Note 3) 1.2 1.0 0.7 0.7Interest coverage (Note 4) 19.7 8.2 1.3(Note 7) 3.4Return on total assets (Note 5) 10.9% 8.5% N/A(Note 7) N/A(Note 8)

Return on equity (Note 6) 54.5% 33.1% N/A(Note 7) N/A(Note 8)

Notes:

1. Current ratio is calculated based on the total current assets divided by the total current liabilities as at the respective year end.

2. Gearing ratio is calculated based on the total debt divided by the total equity as at the respective year end. Total debt includesall bank borrowings, finance lease obligations and lease liabilities, and excludes the amounts due to related parties that arecurrent accounts in nature.

3. Net debt to equity ratio is calculated by dividing net debt by total equity as at the respective year end. Net debt includes allbank borrowings and finance lease obligations, net of cash and cash equivalents.

4. Interest coverage is calculated by the profit before interest and tax divided by the interest expenses for the respective year.

5. Return on total assets is calculated by the profit for the respective year divided by the total assets as at the respective year endand multiplied by 100.0%.

6. Return on equity is calculated by the profit for the respective year divided by the total equity as at the respective year end andmultiplied by 100.0%.

7. Our Group was loss making in FY2018 due to the non-recurring Listing expenses.

8. Ratios are not meaningful because the net profit for the period only represented three months of the profit for the relevant year.


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Current ratio

Our Group’s current ratio increased from 0.9 times as at 31 December 2016 to 1.2 times as at 31 December2017. The increase was mainly due to (i) the capital injection of approximately S$1.6 million from Mr. Chong,Ms. Lam, Ms. Ngo and Mr. Seow; and (ii) the increase in inventories and trade and other receivables byapproximately S$1.9 million. Our Group’s current ratio increased to 1.4 times as at 31 December 2018. Theincrease was mainly due to the capital injection of approximately S$1.7 million from API.

Our Group’s current ratio decreased to 1.1 times as at 31 March 2019 as our Group had to recognise thecurrent portion of the lease liabilities for our leased properties of approximately S$1.6 million since the adoptionof HKFRS 16 on 1 January 2019.

Gearing ratio

Our Group’s gearing ratio decreased from 1.9 times as at 31 December 2016 to 1.7 times as at31 December 2017. The decrease was mainly due to the increase in the profit for the year in FY2017 by S$0.5million (or 33.4%); and (ii) the increase in our share capital by approximately S$1.6 million due to the capitalinjection from Mr. Chong, Ms. Lam, Ms. Ngo and Mr. Seow in FY2017. The increases were partially offset byan increase in bank borrowings and finance lease obligations by approximately S$5.2 million (or 107.0%).

Our Group’s gearing ratio subsequently decreased to 1.1 times as at 31 December 2018 mainly due to thecapital injection of approximately S$1.7 million from API and the repayment of finance lease obligations duringthe year.

Our Group’s gearing ratio increased to 1.4 times as at 31 March 2019 due to the recognition of our leaseliabilities for our leased properties since the adoption of HKFRS 16 on 1 January 2019.

Net debt to equity ratio

Our Group’s net debt to equity ratio decreased marginally from 1.2 times as at 31 December 2016 to 1.0times as at 31 December 2017. The decrease was mainly due to (i) the increase in cash and cash equivalent byapproximately S$2.3 million (or 124.9%); (ii) the increase in our share capital by approximately S$1.6 million(or 137.0%) due to the capital injection from Mr. Chong, Ms. Lam, Ms. Ngo and Mr. Seow in FY2017; and (iii)the increase in our profit for the year in FY2017 by approximately S$0.5 million (or 33.4%). The increases werepartially offset by the increase in our bank borrowings and finance lease obligations by S$5.2 million (or107.0%) in FY2017.

Our Group’s net debt to equity ratio further decreased to 0.7 times as at 31 December 2018 mainly due tothe capital injection of approximately S$1.7 million from API and the repayment of finance lease obligationsduring the year.

Our Group’s net debt to equity ratio remained stable at 0.7 times as at 31 March 2019.

Our Group’s high net debt to equity ratio during the Track Record Period was mainly due to the increase infinance lease obligations in expanding our fleet of passenger cars for our car rental business. Under theregulations set by the Monetary Authority of Singapore (MAS) during the Track Record Period, the maximumloan quantum that a car buyer can obtain is up to 70% of the purchase price of the car if the open market valueof the car is worth S$20,000 or less. If the open market value of the car is more than S$20,000, the maximumloan quantum is 60%. Thus, we usually have to provide 20%-30% of the open market value of the car in cash asdown payment and the remaining portion is financed through finance lease obligations.


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Interest coverage

Our Group’s interest coverage decreased from 19.7 times for FY2016 to 8.2 times for FY2017. Thedecrease was mainly due to the increase in our finance cost by approximately S$0.2 million (or 202.0%) as ourbank borrowings and finance lease obligations increased. This increase has outweighed the increase in our profitbefore interest and tax for FY2017 of approximately S$0.5 million (or 25.8%).

Our Group’s interest coverage ratio decreased to 1.3 times for FY2018 due to the one-off Listing expenses.

Our Group’s interest coverage ratio was 3.4 times for 1Q2019 due to the increase in profit before incometax expense in 1Q2019.

Return on total assets

Our Group’s return on total assets decreased from 10.9% for FY2016 to 8.5% for FY2017. The decreasewas mainly due to the increase in our total assets by approximately S$9.3 million (or 71.6%) arising from (i) theincrease in property, plant and equipment by approximately S$5.3 million; (ii) the increase in trade and otherreceivables by approximately S$1.7 million; and (iii) the increase in cash and cash equivalents by approximatelyS$2.3 million.

Return on equity

Our Group’s return on equity decreased from 54.5% for FY2016 to 33.1% for FY2017. The decrease wasmainly due to the increase in our share capital by approximately S$1.6 million (or 137.0%) from the capitalinjection of Mr. Chong, Ms. Lam, Ms. Ngo and Mr. Seow in FY2017, which has outweighed the increase in ourprofit for the year in FY2017 of approximately S$0.5 million (or 33.4%).

CAPITAL MANAGEMENT AND FINANCIAL RISK MANAGEMENT

Capital management

Our Group manages our capital structure in order to safeguard our ability to continue as a going concern inorder to provide returns to shareholders and benefits for other shareholders, to maintain an optimal capitalstructure, to reduce the cost of capital to support the Group’s stability and growth. Our Group monitors ourcapital structure on the basis of our gearing ratio. For further details, please refer to note 31 to the Accountants’Report in Appendix I to this prospectus.

Financial risk management

Our Group is exposed to credit risk, interest rate risk, liquidity risk and currency risk in the normal courseof business. Further details on our financial risk management policies and practices are set out in note 31 to theAccountants’ Report in Appendix I to this prospectus.

DIVIDENDS

No dividend has been paid or declared by the Company since its incorporation. The dividends in FY2016,FY2017 and FY2018 represented interim dividends declared by the following subsidiaries to its then soleshareholders before the Reorganisation:

On 30 November 2016, Optima Carz, one of our operating subsidiaries, declared interim dividend ofapproximately S$150,000, to Optima Werkz and Mr. Chew, which was its then shareholders.


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On 20 January 2017, Optima Carz, one of our operating subsidiaries, declared interim dividend ofapproximately S$220,000, to Optima Werkz and Mr. Chew, which was its then shareholders.

On 28 August 2017, Optima Carz, one of our operating subsidiaries, declared interim dividend ofapproximately S$150,000, to Optima Werkz and Mr. Chew, which was its then shareholders.

On 2 November 2017, Optima Werkz, one of our operating subsidiaries, declared interim dividend ofapproximately S$200,000, to Mr. Lee, Mr. Ang, Mr. Chee and Ms. FF Lim, which was its then shareholders.

On 14 June 2018, Optima Carz, one of our operating subsidiaries, declared interim dividend ofapproximately S$200,000, to Optima Werkz, which was its then shareholder.

No specific dividend payout ratio

The declaration and payment of future dividends will be subject to the decision of our Board having regardto various factors, including but not limited to our operation and financial performance, profitability, businessdevelopment, prospects, capital requirements, and economic outlook. Subject to the Companies Law and ourArticles of Association, our Company may in a general meeting declare dividends, but no dividends shall exceedthe amount recommended by our Board. Our Board may, subject to our Articles of Association, from time totime, pay to our shareholders such interim dividends as appear to our Board to be justified by the financialconditions and the profits of our Company. Our Board may in addition from time to time declare and pay specialdividends of such amounts and on such dates and out of such distributable funds of our Company as it thinks fit.The historical dividend payments may not be indicative of future dividend trends. We do not have anypredetermined dividend payout ratio.

DISTRIBUTABLE RESERVES

Our Company was incorporated in the Cayman Islands on 14 March 2018 as an investment holdingcompany and had no reserve available for distribution to our Shareholders as at the Latest Practicable Date.

DISCLOSURE REQUIRED UNDER CHAPTER 17 OF THE GEM LISTING RULES

Our Directors confirmed that, as at the Latest Practicable Date, they were not aware of any circumstanceswhich, had they been required to comply with Rules 17.15 to 17.21 of the GEM Listing Rules, would have givenrise to a disclosure requirement under Rules 17.15 to 17.21 of the GEM Listing Rules.

NO MATERIAL ADVERSE CHANGE

Our Directors confirm that save for the expenses in connection with the Listing, subsequent to the TrackRecord Period and up to the date of this prospectus, there has been no material adverse change in the financialor trading position or prospects of our Group.


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BUSINESS OBJECTIVES

Our business objective is to maintain our market position as a leading after-market automotive serviceprovider in Singapore. Please refer to the paragraph headed ‘‘Business – Business strategies’’ in this prospectusfor further details of our business strategies.

IMPLEMENTATION PLANS

In pursuance of our business objectives and strategies set forth above, the implementation plans of ourGroup are set forth below. Prospective investors should note that the following implementation plans areformulated on the bases and assumptions as referred to in the paragraph headed ‘‘Bases and assumptions’’ in thissection. These bases and assumptions are inherently subject to many uncertainties and unpredictable factors, inparticular the risk factors set forth in the section headed ‘‘Risk Factors’’ in this prospectus. Our actual course ofbusiness may vary from the business objectives set out in this prospectus. There can be no assurance that ourplans will materialise in accordance with the expected time frame or that our objectives will be accomplished atall.

For the period from the Latest Practicable Date to 31 December 2019

Business strategies Implementation plans Estimated cost Source of funding

Expanding our servicing capacity • Setting up a new after-marketautomotive service centre (the ‘‘NewService Centre’’)

HK$10.0 million Net proceeds from the Share Offer

• Relocating our Upper ThomsonService Centre

HK$1.3 million Our own financial resources

Strengthening our service capabilitiesand operating efficiencies

• Enhancing costs efficiency bypurchasing spare parts and accessoriesin bulk


• Recruitment of employees HK$0.3 million Net proceeds from the Share Offer

• Upgrading our information technologyand equipment


Brand building through strengtheningour relationships with our existingcustomers and expanding ourcustomer base

• Conducting marketing and promotionactivities for the launch of the NewService Centre


FUTURE PLANS AND USE OF PROCEEDS

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For the period from 1 January 2020 to 30 June 2020


Continuing to expand ourservicing capacity

• Setting up our new satelliteworkshop


Growing our rental fleet tocomplement our after-marketautomotive business

• Purchasing two luxury sedansand 12 economy sedans toexpand our rental fleet in theprovision of rental services(Note)

HK$10.0 million HK$6.0 million fromnet proceeds from the ShareOffer

HK$4.0 million from hirepurchase arrangement

Continuing to strengthen ourservice capabilities andoperating efficiencies

• Training of employees HK$0.3 million Net proceeds from the Share Offer

• Upgrading our SAP system HK$1.0 million Net proceeds from the Share Offer

For the period from 1 July 2020 to 31 December 2020


Continuing to grow our rentalfleet to complement ourafter-market automotivebusiness

• Purchasing two luxury sedansand 12 economy sedans toexpand our rental fleet in theprovision of rental services(Note)

HK$11.5 million HK$3.5 million from net proceedsfrom the Share Offer

HK$8.0 million from hirepurchase arrangement



For the period from 1 January 2021 to 30 June 2021




Note: The actual number of passenger cars to be acquired will depend on the price of the COE at the time of acquisition.


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BASES AND ASSUMPTIONS

Our Directors have adopted the following principal assumptions in the preparation of the implementationplan up to 30 June 2021:

• there will be no significant economic change in respect of inflation, interest rate, tax rate andcurrency exchange rate in Singapore which will adversely affect our business;

• our Group will have sufficient financial resources to meet the planned capital expenditure andbusiness development requirements during the period to which the business objectives relate;

• there will be no material adverse change in the existing laws and regulations, policies or industry orregulatory treatment relating to our Group, or in the political, economic, fiscal or market conditions inwhich our Group operates;

• there will be no change in the funding requirement for each of the business strategies described inthis prospectus from the amount as estimated by our Directors;

• there will be no disasters, natural, political or otherwise, which would materially disrupt the businessor operations of our Group or cause substantial loss, damage or destruction to our properties orfacilities;

• there will be no change in the effectiveness of the licences and permits obtained by our Group;

• there will be no material changes in the bases or rates of taxation applicable to the activities of ourGroup;

• the Share Offer will be completed in accordance with and as described in the section headed‘‘Structure and Conditions of the Share Offer’’ in this prospectus;

• our Group will be able to maintain its customers;

• our Group will be able to retain key staff in the management and the main operational departments;

• our Group will be able to continue its operations in substantially the same manner as our Group hadbeen operating during the Track Record Period and we will also be able to carry out our developmentplans without disruption adversely affecting our operations or business objectives in any way; and

• our Group will not be adversely affected by the risk factors as set out under the section headed ‘‘RiskFactors’’ in this prospectus.


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REASONS FOR SHARE OFFER AND USE OF PROCEEDS

Our Directors believe that our Company and our Shareholders will benefit as a whole from the Listing forthe following reasons:

There is a genuine funding need to implement our business strategies

Our Directors believe the estimated net proceeds from the Share Offer will provide our Group withfinancial resources for the execution of our business strategies and plans as set out in this prospectus,which will help us to pursue our business objectives. Our Group is a fast growing corporation which, sinceour establishment in 2012, has grown to become a leading after-market automotive service provider with amarket share of approximately 5.3% in terms of revenue derived from after-market automotive service inSingapore in 2018. As disclosed in the section headed ‘‘History, Reorganisation and Corporate Structure’’in this prospectus, our Group has been raising funds since 2012 to support our growth. We set out belowour major fund-raising activities since 2012:

Year Major fund-raising activities

2012 Capital injection of S$450,000 from Mr. Ang, Mr. Lim and Ms. FF Liminto Optima Werkz

2014 Capital injection of S$500,000 from Mr. Lee into Optima Werkz

2017 Pre-IPO investment of approximately S$1.6 million from Mr Chong, Mr Seow, Ms Lamand Ms Ngo into Optima Werkz

2018 Pre-IPO investment of HK$10 million from API into our Company

Accordingly, our cash and bank balances of approximately S$3.1 million as at 31 July 2019 isattributable to the unutilised portion of the above Pre-IPO Investments of approximately S$0.4 million.Moreover, (i) approximately S$2.4 million for our outstanding borrowings and finance lease obligations;and (ii) approximately S$2.3 million for the Listing expenses are expected to be paid for the financial yearending 31 December 2019. Further, although our Group generated net cash from operating activities ofapproximately S$2.6 million and S$3.0 million for FY2016 and FY2017 respectively, the net increase incash and cash equivalents was only approximately S$0.7 million for the respective years, without takinginto account the proceeds from convertible loans of approximately S$1.6 million in FY2017 which formspart of the Pre-IPO Investments. The net increase in cash and cash equivalents represents the fundsavailable which could be deployed to finance our future plans. Accordingly, we would not have sufficientinternally generated cash for our future plans if equity funding through the Listing does not take place.

• Our Directors consider that the Listing may act as a fund-raising platform for our Group. OurDirectors believe that this way of financing is beneficial to the overall business development andfinancial performance of our Group, which in turn will maximise our Shareholders’ return.


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• Our Directors believe that a listing status will enhance our reputation, instil confidence in customersand suppliers and strengthen our competitiveness in the market. According to the Frost & SullivanReport, the cost of car ownership in Singapore is extremely high as car owners must pay for a COEpremium, additional registration fees and insurance in addition to the price of the passenger car itself.As such, our Directors believe car owners in Singapore will place extra emphasis on choosingreputable and reliable workshops to provide maintenance and repair services. Our Directors thusbelieve a listing status will raise the profile, credibility and visibility of our Group and strengthen ourcompetitiveness among our competitors, one of which has been listed in Hong Kong.

• The Share Offer will enhance the liquidity of our Shares by achieving the listing status of our Shareswhich will be freely traded on the Stock Exchange when compared to the limited liquidity of ourShares that are privately held before the Listing.

• The Share Offer will enable our Company to enhance its corporate profile, thereby increasing ourability to attract strategic investors for investment in and forming strategic partnerships directly withour Company.

Reasons for listing in Hong Kong

Our Directors had considered and evaluated different listing venues including Hong Kong andSingapore and have concluded that, notwithstanding that our business is primarily based in Singapore,Hong Kong is the suitable venue to pursue a listing. In arriving this decision, our Directors have evaluateddifferent listing venues with reference to (i) the reputation and prestige among the stock markets inSoutheast Asia; (ii) prevailing level of equity fund raising activities; and (iii) eligibility with regard to therespective listing requirements between the Singapore’s Catalist Board (‘‘SGX Catalist Board’’) on TheSingapore Exchange Securities Trading Limited (the ‘‘SGX’’) and GEM which were shortlisted by ourDirectors. Our Directors concluded that GEM is the suitable place to pursue a listing due to the followingreasons:

• More dynamic equity fundraising platform

The level of trading activities on a stock exchange is one of the key indicators for the ease ofconducting secondary fund raising exercises after listing. Based on the information from the WindFinancial Terminal (www.wind.com.cn), the average monthly turnover of stocks in Hong Kong wasapproximately HK$2,191.3 billion for 2018. By comparison, according to the Singapore Exchange,the average monthly turnover of stocks for the SGX Catalist Board in Singapore was approximatelyS$0.3 billion (equivalent to approximately HK$1.7 billion) for 2018. According to the data compiledby the World Bank, in 2017, the turnover ratio of stocks traded in the Hong Kong stock market wasapproximately 43.4% while the turnover ratio of stocks traded in the Singapore stock market was onlyapproximately 27.9%. Also, according to the global ranking of stock exchanges by marketcapitalisation table available on the SFC website, the Stock Exchange ranked the seventh largestmarket of the world’s leading stock exchanges in terms of market capitalisation as at the end of June2018 with a total market capitalisation of approximately US$4,219.60 billion. It was also the thirdlargest stock market in Asia behind Japan and Shanghai as at June 2018.


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Therefore, our Directors believe that the Stock Exchange would be a more dynamic equityfundraising platform for market participants. The higher turnover ratio of stocks traded in Hong Kongalso represented a more efficient market for secondary fund raising, of which given the capitalintensive nature of our business, our Directors believe that it would be easier to conduct secondaryfund raising in the Hong Kong stock market, if necessary, for our further expansion in the future.

• Greater recognition by our existing and potential business partners and customers

Our business partners and customers include multinational insurance companies and listedmultinational corporations who prefer to work with listed companies with more transparent financialdisclosure and regulatory supervision given their reputation, listing status, public financial disclosuresand general regulatory supervision by the relevant regulatory bodies.

The Hong Kong stock market has a high level of internationalisation, and is supported by asound legal system and regulatory framework, a mature financial system, and a wide diversity ofinvestors with established reputation in the global financial market, sufficient institutional capital andfunds following the companies listed in Hong Kong. As such, the Stock Exchange would berecognised by our existing and potential business partners and customers as having attained certainstandard of corporate governance and financial strength and it also demonstrates that our Group hasan international standard of internal control and financial reporting. This status of being a listedcompany in Hong Kong will further enhance our corporate profile and recognition and makes it easierfor us to maintain and build up business relationships with our existing and potential businesspartners and customers. In addition, the listing status with the Stock Exchange is paving the way forpossible business collaborations with other companies throughout Asia for our long-term businessdevelopment. Accordingly, our Directors believe that listing in Hong Kong will achieve our goals inrelation to our future plans by allowing and assisting us to expand our business operations in thefuture.

• Lack of direct comparable company listed on the SGX

There are currently no after-market automotive service provider that is listed on the SGX whosebusiness model is comparable to that of our Group. Hence, our Directors are of the view thatinstitutional capital and funds following the companies listed in Singapore may not be familiar withthe business nature of after-market automotive service provider which our Group is engaged in, andour Directors believe that it would be more challenging to conduct secondary fund raising inSingapore for our further expansion in the future. On the other hand, our competitor which hasalready listed on the Stock Exchange offers a vivid comparable to the institutional capital and fundsfollowing the companies listed on the Stock Exchange, which would therefore be more familiar withour operations.

• Expanding and diversifying our shareholder base

Our Directors believe that a public listing status in Hong Kong will allow us to have a greaterexposure to international financial market and investment community, which may open up a newchannel of financing and enable us to diversify our shareholder base more effectively. In addition,given the development of information technology and retail stocking trading platforms, Singaporeretail investors who may be familiar with the business operation of our Group could continue toinvest into our Group even when we are listed in Hong Kong.


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• Access to a larger pool of talents

Given the internationalism and reputation of the Hong Kong stock market and the proximitybetween Hong Kong and China, our Directors believe that listing on the Stock Exchange willfacilitate us in attracting talents to join our Group and have access to a larger pool of talents fromHong Kong and China to improve our quality of service. In addition, the listing status on the StockExchange will facilitate our in-house talent management, through staff retention and developmentwhereby existing staff will be motivated to further their development career in view of beingperceived working with a company with a listing status on a global platform.

After taking into consideration of the above, our Directors are of the view that the location of ouroperations in Singapore should not be the deciding factors of where we pursue our listing status but insteadshould be based on an evaluation of the aforementioned considerations.

Assuming that the Offer Size Adjustment Option is not exercised at all, based on the Offer Price ofHK$0.23 per Offer Share, the net proceeds of the Share Offer, after deduction of underwriting fees and otherexpenses payable by our Company in relation to the Share Offer, are estimated to be HK$32.5 million. OurCompany currently intends to use the net proceeds from the Share Offer as follows:

For theperiod fromthe LatestPracticable

Date to31 December

2019


2020 to30 June

2020

For theperiod from1 July 2020

to31 December

2020


2021 to30 June

2021 Total

Approximate% of thetotal netproceeds

(HK$’million)

(HK$’million)

(HK$’million)

(HK$’million)

(HK$’million)

Expanding our servicing capacity– Setting up new service centre 10.0 – – – 10.0 30.8%– Setting up new satellite workshop – 3.5 – – 3.5 10.8%

Growing our rental fleet – 6.0 3.5 – 9.5 29.2%Strengthening our service capabilities and

operating efficiencies– Enhancing costs efficiency by purchasing

spare parts and accessories in bulk 3.3 – – – 3.3 10.2%– Training of employees – 0.3 0.2 0.2 0.7 2.2%– Recruitment of employees 0.3 – – – 0.3 0.9%– Upgrading our information

technology and equipment 0.5 1.0 – – 1.5 4.6%Brand building through strengthening our

relationshipswith our existing customers andexpanding our customer base 0.5 – – – 0.5 1.5%

Funding of our working capital andgeneral corporate purpose 1.0 1.0 0.75 0.45 3.2 9.8%

Total 15.6 11.8 4.45 0.65 32.5 100.0%

For details of how we intend to implement the proceeds raised from the Listing, please refer to theparagraph headed ‘‘Business – Business strategies’’ in this prospectus.


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If the final Offer Price is set at the highest or lowest point of the indicative Offer Price range, the netproceeds of the Share Offer will increase or decrease by approximately HK$7.5 million, respectively. In suchevent, the net proceeds will be used in the same proportions as disclosed above irrespective of whether the OfferPrice is determined at the highest or lowest point of the indicative Offer Price range.

If the Offer Size Adjustment Option is exercised in full, the additional net proceeds of approximatelyHK$8.6 million (assuming that the final Offer Price is set at the mid-point of the indicative Offer Price range)received from the Share Offer will be allocated in accordance with the above allocations on a pro rata basis. Fordetails of the Offer Size Adjustment Option, please refer to the paragraph headed ‘‘Structure and Conditions ofthe Share Offer – Offer Size Adjustment Option’’ in this prospectus.

We will issue an announcement in accordance with the GEM Listing Rules requirement if there is anymaterial change in the use of proceeds as described above.

Investors should be aware that any part of the business plans of our Group may or may not proceedaccording to the time frame as described under the paragraph headed ‘‘Implementation Plans’’ in this section dueto various factors such as changes in customers’ demand and changes in market conditions. Under suchcircumstances, our Directors will evaluate carefully the situations and will hold the funds as short-term depositsin authorised banks and/or financial institutions. In the event that we would require financing in addition to thenet proceeds from the Share Offer for our business plans, the shortfall will be financed by our internal resourcesand/or bank financing, as appropriate.


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UNDERWRITERS


Orient Securities (Hong Kong) Limited

Aristo Securities Limited

Co-Manager

Chuenman Securities Limited

Public Offer Underwriters

Orient Securities (Hong Kong) Limited

Aristo Securities Limited

Chuenman Securities Limited

UNDERWRITING ARRANGEMENT AND EXPENSES

The Public Offer Underwriting Agreement

Pursuant to the Public Offer Underwriting Agreement, we are offering 25,000,000 Public Offer Shares(subject to reallocation) for subscription on the terms and subject to the conditions of this prospectus and theApplication Forms at the Offer Price.

Subject to (i) the Stock Exchange granting listing of, and permission to deal in, our Shares in issue and tobe issued as mentioned in this prospectus; and (ii) certain other conditions set out in the Public OfferUnderwriting Agreement, the Public Offer Underwriters have severally agreed to apply or procure applications,on the terms and conditions of this prospectus, the related Application Forms and the Public Offer UnderwritingAgreement, for the Public Offer Shares now being offered and which are not taken up under the Public Offer.

The Public Offer Underwriting Agreement is conditional on and subject to the Placing UnderwritingAgreement having been executed and becoming unconditional.

Grounds for termination

The Joint Global Coordinators (for themselves and on behalf of the Public Offer Underwriters) shall havethe absolute right which is exercisable by the Joint Global Coordinators (for themselves and on behalf of thePublic Offer Underwriters), upon giving notice in writing to our Company, to terminate the arrangements set outin the Public Offer Underwriting Agreement with immediate effect if any of the following events occurs at anytime prior to 8:00 a.m. (Hong Kong time) on the Listing Date (which is expected to be on Friday, 11 October2019):

(a) it has come to the notice of the Joint Global Coordinators that:

(i) any statement contained in this prospectus or other documents issued or used by or on behalf ofour Company or information provided to the Joint Global Coordinators in connection with theShare Offer (the ‘‘Relevant Documents’’), considered by the Joint Global Coordinators in theirabsolute opinion was, when it was issued, or has become, or been discovered to be untrue,inaccurate, incorrect or misleading in any material respect;

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(ii) any matter has arisen or has been discovered which would, had it arisen or been discoveredimmediately before the date of this prospectus, constitute an omission therefrom considered bythe Joint Global Coordinators in their absolute opinion to be material in the context of the ShareOffer;

(iii) any breach of any of the obligations imposed upon any party to the Public Offer UnderwritingAgreement and the Placing Underwriting Agreement considered by the Joint GlobalCoordinators in their absolute opinion to be material in the context of the Share Offer (otherthan any breach by any of the Public Offer Underwriters);

(iv) either (1) there has been a breach of any of the warranties or provisions of the Public OfferUnderwriting Agreement in any material respect by any of our Company, our executiveDirectors or our Controlling Shareholders (collectively, the ‘‘Warrantors’’) or (2) any matter orevent showing or rendering any of the warranties contained in the Public Offer UnderwritingAgreement, as applicable, in the absolute opinion of the Joint Global Coordinators, to be untrue,incorrect or misleading in any material respect when given or repeated;

(v) any event, act or omission which gives or is likely to give rise to any liability of a materialnature of any of the Warrantors pursuant to the indemnity provisions under the Public OfferUnderwriting Agreement; or

(vi) any event, series of events, matter or circumstance occurs or arises on or after the date of thisprospectus and prior to 8:00 a.m. on the Listing Date, would have rendered any warranties, inthe absolute opinion of the Joint Global Coordinators, untrue, incorrect, inaccurate or misleadingin any material respect;

(b) there shall develop, occur, happen, exist or come into effect:

(i) any event, or series of events in the nature of force majeure, including, without limitation, actsof government, fire, explosion, flooding, civil commotion, acts of war, acts of God, acts ofterrorism (whether or not responsibility has been claimed), declaration of a national orinternational emergency, riots, public disorder, economic sanctions, outbreaks of diseases orepidemics in Hong Kong or Singapore;

(ii) any change or development involving a material change or development, or any event or seriesof events, matters or circumstances likely to result in or represent any material change ordevelopment, in the local, national, regional, international financial, economic, political,military, industrial, fiscal, regulatory, currency, credit, market or exchange control conditions orany monetary or trading settlement system or matters and/or disaster (including withoutlimitation a change in the system under which the value of the Hong Kong currency is linked tothat of the currency of the United States, or a material fluctuation in the exchange rate of theHong Kong dollars or Singapore dollars);

(iii) any new law or regulation or any change or development involving a prospective materialchange in existing laws or regulations or any change or development involving a prospectivematerial change in the interpretation or application thereof by any court or other competentauthority in or affecting Singapore, Hong Kong, the Cayman Islands or BVI (the ‘‘RelevantJurisdictions’’);

(iv) the imposition of economic sanctions on any of the Relevant Jurisdictions;

(v) a change or development involving a prospective material change in any taxation or exchangecontrol (or the implementation of any exchange control) in any of the Relevant Jurisdictions;

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(vi) any litigation or claim of importance instigated against any member of our Group or anyDirector;

(vii) a Director being charged with an indictable offence or prohibited by operation of law orregulation or otherwise disqualified from taking part in the management of a company;

(viii) a valid demand by any creditor for repayment or payment of any material indebtedness of anymember of our Group or in respect of which any member of our Group is liable prior to itsstated maturity;

(ix) any material loss or damage sustained by any member of our Group (howsoever caused andwhether or not the subject of any insurance or claim against any person);

(x) any material contravention by any member of our Group or any Director of the GEM ListingRules or any applicable laws;

(xi) a prohibition on our Company for whatever reason from allotting the Offer Shares pursuant tothe terms of the Share Offer;

(xii) material non-compliance of this prospectus (and/or any other documents used in connection withthe subscription and purchase of the Offer Shares) or any aspect of the Share Offer with theGEM Listing Rules or any other applicable laws by any of our Directors or the Warrantors;

(xiii) the issue or requirement to issue by our Company of a supplement or amendment to any of theRelevant Documents (and/or any other documents used in connection with the subscription ofthe Offer Shares);

(xiv) any material change in the business, business prospects, financial or trading position, conditionsor prospects (financial or otherwise) of our Group taken as a whole;

(xv) a petition or an order is presented for the winding-up or liquidation of any member of our Groupor any member of our Group makes any composition or arrangement with its creditors or entersinto a scheme of arrangement or any resolution is passed for the winding-up of any member ofour Group or a provisional liquidator, receiver or manager is appointed over all or part of theassets or undertaking of any member of our Group or any analogous matter thereto occurs inrespect of any member of our Group;

(xvi) any material change or development in the conditions of local, national or international equitysecurities or other financial markets; or

(xvii) the imposition of any moratorium, suspension or restriction on trading in shares or securitiesgenerally on or by the Stock Exchange or by any of the other exchanges or by such system orby order of any regulatory or governmental authority,

which in each case or in aggregate in the absolute opinion of the Joint Global Coordinators (forthemselves and on behalf of the Public Offer Underwriters):

(i) is or will be materially adverse to or may prejudicially affect the business, financial, trading orother condition or prospects of our Group (as a whole) or any member of our Group;

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(ii) has or will have a material adverse effect on the success of the Share Offer or the level ofinterest under the Placing;

(iii) makes or may make it inadvisable, inexpedient or impracticable to proceed with the Share Offeror the delivery of the Offer Shares on the terms and in the manner contemplated by any of theRelevant Documents; or

(iv) has or would have the effect of making any part of the Public Offer Underwriting Agreement(including undertaking) incapable of implementation or performance in accordance with itsterms and in the manner contemplated by any of the Relevant Documents and the Public OfferUnderwriting Agreement or which prevents the processing of applications and/or paymentspursuant to the Share Offer or pursuant to the underwriting thereof.

Without prejudice to the above, if, at any time prior to 8:00 a.m. (Hong Kong time) on the Listing Date, itcomes to the notice of the Joint Global Coordinators that:

(a) any matter or event showing any of the warranties contained in the Public Offer UnderwritingAgreement to be untrue, inaccurate or misleading in any material respect when given or repeated orany breach of any of the warranties contained in the Public Offer Underwriting Agreement or anyother provision of the Public Offer Underwriting Agreement by any party thereto (other than the JointGlobal Coordinators), which is considered, in the sole and absolute opinion of the Joint GlobalCoordinators (for themselves and on behalf of the Public Offer Underwriters), to be material in thecontext of the Share Offer;

(b) any matter which, had it arisen immediately before the date of this prospectus and not having beendisclosed in this prospectus, would have constituted a material omission in the sole and absoluteopinion of the Joint Global Coordinators (for themselves and on behalf of the Public OfferUnderwriters) in the context of the Share Offer;

(c) any statement contained in this prospectus reasonably considered to be material by the Joint GlobalCoordinator (for themselves and an behalf of the Public Offer Underwriters) which is discovered tobe or becomes untrue, incorrect or misleading in any respect and in the sole and absolute opinion ofthe Joint Global Coordinators (for themselves and on behalf of the Public Offer Underwriters) to bematerial in the context of the Share Offer; or

(d) any event, act or omission which gives rise or is likely to give rise to any material liability of any ofthe Warrantors pursuant to the indemnities contained in the Public Offer Underwriting Agreement,

the Joint Global Coordinators (for themselves and on behalf of the Public Offer Underwriters) shall be entitled(but not bound) by notice in writing to our Company on or prior to such time to terminate the Public OfferUnderwriting Agreement.

Placing Underwriting Agreement

In connection with the Placing, it is expected that we will enter into the Placing Underwriting Agreementwith, among others, the Placing Underwriters on terms and conditions that are substantially similar to the PublicOffer Underwriting Agreement as described above and on the additional terms described below.

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Under the Placing Underwriting Agreement, subject to the conditions set forth therein, the PlacingUnderwriters are expected to procure subscribers to subscribe for, or failing which they shall subscribe for, the225,000,000 Placing Shares (subject to reallocation and the Offer Size Adjustment Option) initially being offeredpursuant to the Placing. It is expected that the Placing Underwriting Agreement may be terminated on similargrounds as the Public Offer Underwriting Agreement. Potential investors shall be reminded that in the event thatthe Placing Underwriting Agreement is not entered into, the Share Offer will not proceed. The PlacingUnderwriting Agreement is conditional on and subject to the Public Offer Underwriting Agreement having beenexecuted, becoming unconditional on or before such time and date in accordance with its terms and not havingbeen terminated. It is expected that pursuant to the Placing Underwriting Agreement, our Company andControlling Shareholders will make similar undertakings as those given pursuant to the Public OfferUnderwriting Agreement as described in the paragraphs headed ‘‘Undertakings – Undertakings to the StockExchange’’ and ‘‘Undertakings – Undertakings to the Public Offer Underwriters’’ below in this section.

UNDERTAKINGS

Undertakings to the Stock Exchange

Undertakings by our Company

Pursuant to Rule 17.29 of the GEM Listing Rules, our Company has undertaken to the Stock Exchange thatsave as pursuant to the Share Offer (including the grant and exercise of the options under the Share OptionScheme), no further Shares or securities convertible into equity securities of our Company (whether or not of aclass already listed) may be issued by our Company or form the subject of any agreement to such an issue byour Company within six months from the Listing Date (whether or not such issue of Shares or securities of ourCompany will be completed within six months from the Listing Date), except in certain circumstances prescribedby Rule 17.29 of the GEM Listing Rules.

Undertakings by our Controlling Shareholders

Pursuant to Rule 13.16A(1) of the GEM Listing Rules, each of our Controlling Shareholders hasundertaken to the Stock Exchange and our Company that, except for the circumstances permitted pursuant toRule 13.18 of the GEM Listing Rules, he/she/it shall not:

(a) in the period commencing on the date by reference to which disclosure of his/her/its shareholding inour Company is made in this prospectus and ending on the date which is 12 months from the ListingDate, dispose of, nor enter into any agreement to dispose of or otherwise create any options, rights,interests or encumbrances in respect of, any of those Shares in respect of which he/she/it is shown bythis prospectus to be the beneficial owner(s); or

(b) in the period of 12 months commencing on the date on which the period referred to in paragraph (a)above expires, dispose of, nor enter into any agreement to dispose of or otherwise create any options,rights, interests or encumbrances in respect of, any of our Shares referred to in paragraph (a) above if,immediately following such disposal or upon the exercise or enforcement of such options, rights,interests or encumbrances, our Controlling Shareholders would cease to be the controllingshareholders or a group of controlling shareholders (as defined in the GEM Listing Rules).

In addition to the undertakings and covenants given pursuant to the requirements as set out in the GEMListing Rules, each of our Controlling Shareholders has voluntarily undertaken to and covenanted with the StockExchange and our Company that he/she/it shall not, in the period of 12 months commencing on the date onwhich the period referred to in paragraph (b) above expires, dispose of, nor enter into any agreement to disposeof or otherwise create any options, rights, interests or encumbrances in respect of, any of our Shares referred toin paragraph (b) above if, immediately following such disposal or upon the exercise or enforcement of suchoptions, rights, interests or encumbrances, the Controlling Shareholders would cease to be the controllingshareholders or a group of controlling shareholders (as defined in the GEM Listing Rules).

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Pursuant to Rule 13.19 of the GEM Listing Rules, each of our Controlling Shareholders has furtherundertaken to the Stock Exchange and our Company that he/she/it shall, and shall procure that the relevantregistered holder(s) shall:

(a) in the event that he/she/it pledges or charges any direct or indirect interest in the Shares under Rule13.18(1) of the GEM Listing Rules or pursuant to any right or waiver granted by the Stock Exchangepursuant to Rule 13.18(4) of the GEM Listing Rules, at any time during the 12-month period from theListing Date, inform our Company immediately thereafter, disclosing the details specified in Rule17.43(1) to (4) of the GEM Listing Rules; and

(b) having pledged or charged any interest in the Shares under (a) above, inform our Companyimmediately in the event that he/she/it becomes aware that the pledgee or chargee has disposed of orintends to dispose of such interest and of the number of Shares affected.

Our Company shall, upon being informed of any matter under (a) or (b) above, forthwith publish anannouncement giving details of the same in accordance with the GEM Listing Rules.

Undertakings by our Pre-IPO Investors

Each of our Pre-IPO Investors has voluntarily undertaken to and covenanted with the Stock Exchange andour Company that, he/she/it shall not in the period commencing on the date by reference to which disclosure ofhis/her/its shareholding in our Company is made in this prospectus and ending on the date which is six monthsfrom the Listing Date, dispose of, nor enter into any agreement to dispose of or otherwise create any options,rights, interests or encumbrances in respect of, any of those Shares in respect of which he/she/it is shown by thisprospectus to be the beneficial owner.

Undertakings to the Public Offer Underwriters

Undertakings by our Company

Our Company has undertaken to and covenanted with the Sole Sponsor and the Joint Global Coordinators(for themselves and on behalf of the Public Offer Underwriters) that we will not, without the prior writtenconsent of the Joint Global Coordinators (for themselves and on behalf of the Public Offer Underwriters), unlessin compliance with the requirements of the GEM Listing Rules (including but not limited to Rule 17.29 of theGEM Listing Rules) and except for the issue of Shares under the Share Offer, the Capitalisation Issue, theexercise of the Offer Size Adjustment Option, the grant of any option under the Share Option Scheme or theissue of Shares upon exercise of any option to be granted under the Share Option Scheme, at any time during theperiod from the date of this prospectus and ending on, and including, the date which is 12 months after theListing Date (the ‘‘First 12-Month Period’’):

(a) allot, issue, sell, accept subscription for, offer to allot, issue or sell, contract or agree to allot, issue orsell, mortgage, charge, pledge, hypothecate, lend, grant or sell any option, warrant, contract or rightto subscribe for or purchase, grant or purchase any option, warrant, contract or right to allot, issue orsell, or otherwise transfer or dispose of or create an encumbrance over, or agree to transfer or disposeof or create an encumbrance over, either directly or indirectly, conditionally or unconditionally, anyShares or other securities of our Company, or any interest in any of the foregoing (including, withoutlimitation, any securities convertible into or exchangeable or exercisable for or that represent the rightto receive, or any warrants or other rights to purchase, any Shares), or deposit any Shares or othersecurities of our Company, with a depositary in connection with the issue of depositary receipts;

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(b) enter into any swap or other arrangement that transfers to another, in whole or in part, any of theeconomic consequences of ownership of any Shares or other securities of our Company, or anyinterest in any of the foregoing (including, without limitation, any securities convertible into orexchangeable or exercisable for or that represent the right to receive, or any warrants or other rightsto purchase, any Shares);

(c) enter into any transaction with the same economic effect as any transaction specified in paragraphs(a) or (b) above; or

(d) offer to or agree to or announce any intention to effect any transaction specified in paragraphs (a), (b)or (c) above,

in each case, whether any of the transactions specified in paragraphs (a), (b) or (c) above is to be settled bydelivery of Shares or other securities of our Company, or in cash or otherwise (whether or not such transactionwill be completed within the First 12-Month Period).

Undertakings by our Controlling Shareholders

Each of our Controlling Shareholders has jointly and severally undertaken to and covenanted with each ofthe Sole Sponsor and the Joint Global Coordinators (for themselves and on behalf of the Public OfferUnderwriters) that, unless in compliance with the requirements of the GEM Listing Rules, he/she/it will not, andwill procure that none of his/her/its close associates or the relevant registered holder(s), nominee(s) or trustee(s)holding on trust for him/her/it or the companies controlled by him/her/it will, without the prior written consentof the Sole Sponsor and the Joint Global Coordinators (for themselves and on behalf of the Public OfferUnderwriters):

(a) at any time during the First 12-Month Period:

(i) sell, offer to sell, contract or agree to sell, mortgage, charge, pledge, hypothecate, lend, grant orsell any option, warrant, contract or right to purchase, grant or purchase any option, warrant,contract or right to sell, or otherwise transfer or dispose of or create any encumbrances over, oragree to transfer or dispose of or create encumbrances over, either directly or indirectly,conditionally or unconditionally, any Shares or any other securities of our Company (including,without limitation, any securities convertible into or exchangeable or exercisable for or thatrepresent the right to receive, or any warrants or other rights to purchase, any Shares, asapplicable) in respect of which he/she/it is shown by this prospectus to be the beneficial owner(whether direct or indirect) (the ‘‘Lock-Up Securities’’) or any interest therein;

(ii) enter into any swap or other arrangement that transfers to another, in whole or in part, any ofthe economic consequences of ownership of the Lock-Up Securities or any interest therein;

(iii) enter into any transaction with the same economic effect as any transaction specified inparagraphs (a)(i) or (a)(ii) above; or

(iv) offer to or agree to or announce any intention to effect any transaction specified in paragraphs(a)(i), (a)(ii) or (a)(iii) above,

in each case, whether any of the transactions specified in paragraphs (a)(i), (a)(ii) or (a)(iii) above isto be settled by delivery of our Shares or such other securities of our Company or in cash orotherwise (whether or not the issue of Shares or such other securities will be completed within theFirst 12-Month Period); and

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(b) at any time during the 24-month period immediately following the First 12-Month Period (the‘‘Following-24-Month Period’’), enter into any of the transactions specified in paragraphs (a)(i),(a)(ii) and (a)(iii) above or offer to or agree to or announce any intention to effect any suchtransaction if, immediately following any such sale, transfer or disposal or upon the exercise orenforcement of any such options, rights, interests or encumbrances pursuant to such transaction, he/she/it will cease to be the controlling shareholders or a group of controlling shareholders (as definedin the GEM Listing Rules) of our Company.

Each of our Controlling Shareholders has further jointly and severally undertaken to and covenanted witheach of the Sole Sponsor and the Joint Global Coordinators (for themselves and on behalf of the Public OfferUnderwriters) that, during the Following-24-Month Period, in the event that he/she/it, with the consent of theSole Sponsor and the Joint Global Coordinators (for themselves and on behalf of the Public Offer Underwriters),enters into any of the transactions specified in paragraphs (a)(i), (a)(ii) and (a)(iii) above or offers to or agrees toor announces any intention to effect any such transaction, he/she/it shall take all steps to ensure that any suchtransaction, offer, agreement or announcement will not create a disorderly or false market in our Shares or anyother securities of our Company.

Undertakings by our Pre-IPO Investors

Each of our Pre-IPO Investors has voluntarily undertaken to and covenanted with each of the Sole Sponsorand the Joint Global Coordinators (for themselves and on behalf of the Public Offer Underwriters) that he/she/itwill not, and will procure that none of his/her/its close associates or the relevant registered holder(s), nominee(s)or trustee(s) holding on trust for him/her/it or the companies controlled by him/her/it will, without the priorwritten consent of the Sole Sponsor and the Joint Global Coordinators (for themselves and on behalf of thePublic Offer Underwriters) at any time during the period commencing on the date of this prospectus and endingon, and including, the date which is six months from the Listing Date (the ‘‘Six-Month Lock-Up Period’’),

(a) sell, offer to sell, contract or agree to sell, mortgage, charge, pledge, hypothecate, lend, grant or sellany option, warrant, contract or right to purchase, grant or purchase any option, warrant, contract orright to sell, or otherwise transfer or dispose of or create any encumbrances over, or agree to transferor dispose of or create encumbrances over, either directly or indirectly, conditionally orunconditionally, any Shares or any other securities of our Company (including, without limitation,any securities convertible into or exchangeable or exercisable for or that represent the right toreceive, or any warrants or other rights to purchase, any Shares, as applicable) in respect of which he/she/it is shown by this prospectus to be the beneficial owner (whether direct or indirect) (the ‘‘Pre-IPO Investors’ Lock-Up Securities’’) or any interest therein;

(b) enter into any swap or other arrangement that transfers to another, in whole or in part, any of theeconomic consequences of ownership of the Pre-IPO Investors’ Lock-Up Securities or any interesttherein;

(c) enter into any transaction with the same economic effect as any transaction specified in paragraphs(a) or (b) above; or

(d) offer to or agree to or announce any intention to effect any transaction specified in paragraphs (a), (b)or (c) above,

in each case, whether any of the transactions specified in paragraphs (a), (b) or (c) above is to be settled bydelivery of our Shares or such other securities of our Company or in cash or otherwise (whether or not the issueof Shares or such other securities will be completed within the Six-Month Lock-Up Period).

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Total commission, fee and expenses

In connection with the Share Offer, the Underwriters will receive an underwriting commission of 8% of theaggregate Offer Price payable for the Offer Shares according to the arrangement of the UnderwritingAgreements, out of which they will pay any sub-underwriting commissions.

In connection with the Listing and the Share Offer, the total expenses to be borne by our Company(assuming the Offer Price of HK$0.23 (being the mid-point of the stated range of the Offer Price) includingunderwriting commission, brokerage, the Stock Exchange trading fee, the SFC transaction levy, the solesponsorship fee, the listing fees and legal and other professional fees, printing and other expenses) areapproximately S$4.4 million.

Sole Sponsor’s and Underwriters’ interest in our Company

The Sole Sponsor satisfies the independence criteria applicable to sponsor as set out in Rule 6A.07 of theGEM Listing Rules.

Following the completion of the Share Offer, the Underwriters and their respective affiliated companiesmay hold a certain portion of the Shares as a result of fulfilling their obligations under the UnderwritingAgreements.

Save for their interests and obligations under the Underwriting Agreements, the sole sponsorship feepayable to the Sole Sponsor in connection with the Listing, and the fee payable to the Sole Sponsor for acting asour compliance adviser, none of the Sole Sponsor, the Joint Global Coordinators, the Joint Bookrunners, theJoint Lead Managers and the Underwriters is interested, beneficially or otherwise, in any shares in any memberof our Group or has any right (whether legally enforceable or not) or option to subscribe for or to nominatepersons to subscribe for any shares in any member of our Group.

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THE SHARE OFFER

The Share Offer comprises the Placing and the Public Offer. A total of initially 250,000,000 Offer Shareswill be made available under the Share Offer, of which 225,000,000 Placing Shares (subject to reallocation andthe Offer Size Adjustment Option), representing 90% of the Offer Shares, will initially be conditionally placedwith selected professional, institutional and private investors under the Placing. The remaining 25,000,000 PublicOffer Shares (subject to reallocation), representing 10% of the Offer Shares, will initially be offered to membersof the public in Hong Kong under the Public Offer. The Public Offer is open to all members of the public inHong Kong as well as to institutional and professional investors. The Public Offer Underwriters have agreed tounderwrite the Public Offer Shares under the terms of the Public Offer Underwriting Agreement. The PlacingUnderwriters will underwrite the Placing Shares pursuant to the terms of the Placing Underwriting Agreement.Further details of the underwriting are set out in the section headed ‘‘Underwriting’’ in this prospectus. Investorsmay apply for Offer Shares under the Public Offer or indicate an interest for Offer Shares under the Placing, butmay not do both.

The Placing

Our Company is expected to offer initially 225,000,000 Shares (subject to reallocation and the Offer SizeAdjustment Option) at the Offer Price under the Placing. The number of Placing Shares expected to be initiallyavailable for application under the Placing represents 90% of the total number of Offer Shares being initiallyoffered under the Share Offer, and approximately 26.5% of our Company’s enlarged issued share capitalimmediately after completion of the Share Offer and the Capitalisation Issue. The Placing is expected to be fullyunderwritten by the Placing Underwriters (subject to satisfaction or waiver of the other conditions provided inthe Placing Underwriting Agreement).

It is expected that the Placing Underwriters or selling agents nominated by them, on behalf of ourCompany, will conditionally place the Placing Shares at the Offer Price with selected professional, institutionaland other investors. Professional and institutional investors generally include brokers, dealers, companies(including fund managers) whose ordinary business involves dealing in shares and other securities and corporateentities which regularly invest in shares and other securities.

Allocation of the Placing Shares will be based on a number of factors, including the level and timing ofdemand and whether or not it is expected that the relevant investor is likely to acquire further Shares and/or holdor sell its Shares after the Listing. Such allocation is intended to result in a distribution of the Placing Shares ona basis which would lead to the establishment of a solid shareholder base to the benefit of our Company and ourShareholders as a whole. Investors to whom Placing Shares are offered will be required to undertake not to applyfor Shares under the Public Offer.

The Public Offer

Our Company is initially offering 25,000,000 Public Offer Shares for subscription (subject to reallocation)by members of the public in Hong Kong under the Public Offer, representing 10% of the total number of OfferShares offered under the Share Offer, and approximately 2.9% of our Company’s enlarged issued share capitalimmediately after completion of the Share Offer and the Capitalisation Issue. The Public Offer is fullyunderwritten by the Public Offer Underwriters (subject to satisfaction or waiver of the other conditions providedin the Public Offer Underwriting Agreement). Applicants for the Public Offer Shares are required on applicationto pay the maximum Offer Price of HK$0.26 per Share plus 1% brokerage, 0.005% Stock Exchange trading feeand 0.0027% SFC transaction levy on each Offer Share.

STRUCTURE AND CONDITIONS OF THE SHARE OFFER

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The Public Offer is open to all members of the public in Hong Kong as well as to institutional andprofessional investor. An applicant for Shares under the Public Offer will be required to give an undertaking andconfirmation in the application submitted by him/her/it that he/she/it has not applied for nor taken up any Sharesunder the Placing nor otherwise participated in the Placing. Applicants should note that if such undertakingand/or confirmation given by an applicant is breached and/or is untrue (as the case may be), such applicant’sapplication under the Public Offer is liable to be rejected. Multiple applications or suspected multipleapplications and any application made for more than 100% of the Shares initially comprised in the Public Offer(i.e. 25,000,000 Public Offer Shares) are liable to be rejected.

Allocation of the Public Offer Shares to investors under the Public Offer will be based solely on the levelof valid applications received under the Public Offer. When there is oversubscription under the Public Offer,allocation of the Public Offer Shares may involve balloting, which would mean that some applicants may beallotted more Public Offer Shares than others who have applied for the same number of the Public Offer Shares,and those applicants who are not successful in the ballot may not receive any Public Offer Shares.

REALLOCATION OF THE OFFER SHARES BETWEEN PLACING AND PUBLIC OFFER

The allocation of the Offer Shares between the Placing and the Public Offer is subject to reallocation onthe following basis:

(a) In the event that the Placing Shares are fully subscribed or oversubscribed under the Placing:

(i) if the Public Offer Shares are undersubscribed, the Joint Global Coordinators, at their absolutediscretion, may reallocate all or any of the unsubscribed Public Offer Shares from the PublicOffer to the Placing;

(ii) if the Public Offer Shares are fully subscribed or oversubscribed and the number of Sharesvalidly applied for under the Public Offer represents less than 15 times the number of Sharesinitially available for subscription under the Public Offer, then up to 25,000,000 Shares may bereallocated to the Public Offer from the Placing, so that the total number of Shares available forsubscription under the Public Offer will be increased to 50,000,000 Shares, representing 20% ofthe total number of Offer Shares initially available for subscription under the Share Offer(before any exercise of the Offer Size Adjustment Option);

(iii) if the number of Shares validly applied for under the Public Offer represents 15 times or morebut less than 50 times the number of Shares initially available for subscription under the PublicOffer, then 50,000,000 Shares will be reallocated to the Public Offer from the Placing, so thatthe total number of Shares available for subscription under the Public Offer will be increased to75,000,000 Shares, representing 30% of the number of the Offer Shares initially available forsubscription under the Share Offer (before any exercise of the Offer Size Adjustment Option);

(iv) if the number of Shares validly applied for under the Public Offer represents 50 times or morebut less than 100 times the number of Shares initially available for subscription under the PublicOffer, then 75,000,000 Shares will be reallocated to the Public Offer from the Placing, so thatthe number of Shares available for subscription under the Public Offer will be increased to100,000,000 Shares, representing 40% of the number of the Offer Shares initially available forsubscription under the Share Offer (before any exercise of the Offer Size Adjustment Option);and


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(v) if the number of Shares validly applied for under the Public Offer represents 100 times or morethe number of Shares initially available for subscription under the Public Offer, then100,000,000 Shares will be reallocated to the Public Offer from the Placing, so that the numberof Shares available for subscription under the Public Offer will be increased to 125,000,000Shares, representing 50% of the number of the Offer Shares initially available for subscriptionunder the Share Offer (before any exercise of the Offer Size Adjustment Option).

(b) In the event that the Placing Shares are undersubscribed under the Placing:

(i) if the Public Offer Shares are undersubscribed, the Share Offer shall not proceed unless fullyunderwritten by the Underwriters pursuant to the Underwriting Agreements; and

(ii) if the Public Offer Shares are fully subscribed or oversubscribed irrespective of the number oftimes, then up to 25,000,000 Shares may be reallocated to the Public Offer from the Placing, sothat the total number of Shares available for subscription under the Public Offer will beincreased to 50,000,000 Shares, representing 20% of the total number of Offer Shares initiallyavailable for subscription under the Share Offer (before any exercise of the Offer SizeAdjustment Option). In such case, the final Offer Price must be fixed at the bottom end of theindicative offer price range stated in this prospectus (i.e. HK$0.20 per Offer Share).

In all cases, the number of Offer Shares allocated to the Placing will be correspondingly reduced.

If reallocation of Shares from the Placing to the Public Offer is done other than pursuant to the clawbackmechanism under Practice Note 6 to the GEM Listing Rules (including the circumstances specified underparagraph (a)(iii), (a)(iv) or (a)(v) above), the Offer Shares to be offered in the Public Offer and the Placing maybe reallocated as between these offerings at the discretion of the Joint Global Coordinators (for themselves andon behalf of the Underwriters), subject to the maximum total number of Offer Shares that may be allocated tothe Public Offer, being 50,000,000 Shares, representing twice the number of Offer Shares initially allocated tothe Public Offer, in accordance with Guidance Letter HKEX-GL-91-18.

Details of any re-allocation of Offer Shares between the Public Offer and the Placing will be disclosed inthe results announcement of the Share Offer, which is expected to be published on Thursday, 10 October 2019.

OFFER SIZE ADJUSTMENT OPTION

In connection with the Placing, it is expected that our Company will grant to the Placing Underwriters,exercisable by the Joint Global Coordinators (for themselves on behalf of the Placing Underwriters), the OfferSize Adjustment Option to cover over-allocations under the Placing (if any).

Pursuant to the Offer Size Adjustment Option, our Company may be required to allot and issue, at theOffer Price, up to an aggregate of 37,500,000 additional new Shares, representing 15% of the Offer Sharesinitially available under the Share Offer. The Offer Size Adjustment Option can only be exercised by the JointGlobal Coordinators at any time during the period from the date of the Placing Underwriting Agreement to 12:00noon (Hong Kong time) on the business day immediately prior to the date of the announcement of the results ofapplications and the basis of allocation of the Public Offer Shares; otherwise it will lapse. Shares to be issuedpursuant to the exercise of the Offer Size Adjustment Option will not be used for price stabilisation purpose andare not subject to the Securities and Futures (Price Stabilizing) Rules (Chapter 571W of the Laws of HongKong).


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If the Offer Size Adjustment Option is exercised in full, 37,500,000 additional Offer Shares will be issuedresulting in a total number of 887,500,000 Shares in issue and the shareholding of our Shareholders will bediluted by 4.23% following completion of the Capitalisation Issue, the Share Offer and the exercise of the OfferSize Adjustment Option but without taking into account any Shares which may be issued upon the exercise ofany options that may be granted under the Share Option Scheme. The additional net proceeds that we wouldreceive if the Offer Size Adjustment Option is exercised in full (assuming the Offer Price of HK$0.23 per OfferShare (being the mid-point of the indicative Offer Price range)) are estimated to be approximately HK$8.6million, which would be applied to the respective uses as disclosed in the section headed ‘Future Plans and Useof Proceeds’’ in this prospectus on a pro-rata basis.

Whether the Offer Size Adjustment Option is exercised will be disclosed in the allotment resultsannouncement.

OFFER PRICE

The Offer Price will be fixed by the Price Determination Agreement on the Price Determination Date,which is expected to be on or around Thursday, 3 October 2019 or such later date as the Joint GlobalCoordinators (for themselves and on behalf of the Underwriters) and our Company may agree. If the Joint GlobalCoordinators (for themselves and on behalf of the Underwriters) and our Company are unable to reach anagreement on the Offer Price by the Price Determination Date, the Share Offer will not become unconditionaland will not proceed. The Joint Global Coordinators (for themselves and on behalf of the Underwriters) may,with the consent of our Company, reduce the indicative Offer Price range to below that stated in this prospectusat any time prior to the Price Determination Date. In such a case, our Company will, as soon as practicablefollowing the decision to make such reduction, cause to be published on the website of the Stock Exchange atwww.hkexnews.hk and our Company’s website at www.ow.sg, an announcement of such change on or before thePrice Determination Date and will issue a supplemental prospectus updating investors of the change in theindicative Offer Price; extend the period under which the Public Offer was open for acceptance to allowpotential investors sufficient time to consider their subscriptions or reconsider their submitted subscriptions; andgive potential investors who had applied for the Shares the right to withdraw their applications under the PublicOffer. In such event, details of the arrangement will be announced by our Company as soon as practicable.Prospective investors of the Offer Shares should be aware that the Offer Price to be determined on the PriceDetermination Date may be, but is currently not expected to be, lower than the indicative Offer Price rangestated in this prospectus.

The Offer Price will not be more than HK$0.26 per Offer Share and is expected to be not less thanHK$0.20 per Offer Share. Applicants under the Public Offer are required to pay, on application, the maximumOffer Price of HK$0.26 on each Public Offer Share plus 1% brokerage fee, 0.0027% SFC transaction levy and0.005% Stock Exchange trading fee, amounting to a total of HK$2,626.20 per board lot of 10,000 Offer Shares.The Offer Price will fall within the indicative Offer Price range as stated in this prospectus, unless otherwiseannounced.

If for any reason the Price Determination Date is changed, our Company will as soon as practicable causeto be published on the website of the Stock Exchange at www.hkexnews.hk and our Company’s website atwww.ow.sg a notice of the change and if applicable the revised date. The net proceeds from the Share Offerbased on the Offer Price of HK$0.23 per Share (being the mid-point of the stated range of the Offer Price) areestimated to be approximately HK$32.5 million, after deduction of the underwriting commission and otherexpenses relating to the Share Offer and the Listing payable by our Company.


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ANNOUNCEMENT OF OFFER PRICE AND BASIS OF ALLOCATIONS

Announcement of the final Offer Price, together with the level of indication of interests in the Placing, thelevel of applications in the Public Offer and the basis of allocation of the Public Offer Shares is expected to bepublished on the website of the Stock Exchange at www.hkexnews.hk and our Company’s website atwww.ow.sg on Thursday, 10 October 2019.

PRICE PAYABLE ON APPLICATION

The Offer Price will not be more than HK$0.26 per Offer Share and is expected to be not less thanHK$0.20 per Offer Share. Applicants under the Public Offer should pay, on application, the maximum OfferPrice of HK$0.26 per Offer Share plus 1% brokerage, 0.005% Stock Exchange trading fee and 0.0027% SFCtransaction levy, amounting to a total of HK$2,626.20 per board lot of 10,000 Offer Shares. If the Offer Price, asfinally determined in the manner described above, is lower than the maximum Offer Price of HK$0.26 per OfferShare, appropriate refund payments (including the related brokerage, the Stock Exchange trading fee and theSFC transaction levy attributable to the excess application monies) will be made to applicants, without interest.

Further details are set out in the section headed ‘‘How to Apply for Public Offer Shares’’ in thisprospectus.

CONDITIONS OF THE SHARE OFFER

Acceptance of all applications for Offer Shares will be conditional upon, among others:

(i) the Stock Exchange granting the listing of, and permission to deal in, our Shares in issue and to beissued as mentioned in this prospectus on GEM and such grant and permission not subsequently beingrevoked prior to the Listing Date;

(ii) the Price Determination Agreement between our Company and the Joint Global Coordinators (forthemselves and on behalf of the Underwriters) being entered into on or before the PriceDetermination Date and such agreement not having been subsequently terminated; and

(iii) the obligations of the Underwriters under the Underwriting Agreements becoming unconditional(including the waiver of any condition(s) by the Joint Global Coordinators (for themselves and onbehalf of the Underwriters) and the Underwriting Agreements not being terminated in accordancewith the terms of that agreement or otherwise).

The consummation of each of the Public Offer and the Placing is conditional upon, among others, the otheroffering becoming unconditional and not having been terminated in accordance with its terms.

If such conditions have not been fulfilled or waived by the Joint Global Coordinators (for themselves andon behalf of the Underwriters) prior to the times and dates specified, the Share Offer will lapse and the StockExchange will be notified immediately. Notice of the lapse of the Share Offer will be published by our Companyon the website of the Stock Exchange at www.hkexnews.hk and our Company’s website at www.ow.sg on thenext Business Day following such lapse.


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SHARES WILL BE ELIGIBLE FOR ADMISSION INTO CCASS

Application has been made to the Stock Exchange for the listing of and permission to deal in our Shares inissue and to be issued as mentioned in this prospectus. Subject to the granting of the listing of, and permission todeal in, the Shares in issue and to be issued as mentioned in this prospectus on GEM and the compliance withthe stock admission requirements of HKSCC, the Shares will be accepted as eligible securities by HKSCC fordeposit, clearance and settlement in CCASS with effect from the Listing Date, or any other date as determinedby HKSCC. Settlement of transactions between participants of the Stock Exchange is required to take place inCCASS on the second Business Day after any trading day. Investors should seek the advice of their stockbrokeror other professional adviser for details of those settlement arrangements as such arrangements will affect theirrights and interests.


All necessary arrangements have been made to enable the Shares to be admitted into CCASS.

DEALINGS AND SETTLEMENT

Assuming that the Share Offer becomes unconditional at or before 8:00 a.m. in Hong Kong on Friday,11 October 2019, dealings in the Shares on GEM are expected to commence at 9:00 a.m. on Friday, 11 October2019. Shares will be traded in board lots of 10,000 Shares each.


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1. HOW TO APPLY

If you apply for the Public Offer Shares, then you may not apply for or indicate an interest for the PlacingShares.

To apply for Public Offer Shares, you may:

• use a WHITE or YELLOW Application Form; or

• electronically cause HKSCC Nominees to apply on your behalf.

None of you or your joint applicant(s) may make more than one application, except where you are anominee and provide the required information in your application.

Our Company, the Joint Global Coordinators, the Joint Bookrunners, the Joint Lead Managers and theirrespective agents may reject or accept any application in full or in part for any reason at their discretion.

2. WHO CAN APPLY

You can apply for Public Offer Shares on a WHITE or YELLOW Application Form if you or theperson(s) for whose benefit you are applying:

• are 18 years of age or older;

• have a Hong Kong address;

• are outside the United States, and are not a United States Person (as defined in Regulation S underthe U.S. Securities Act); and

• are not a legal or natural person of the PRC.

If you are a firm, the application must be in the individual members’ names. If you are a body corporate,the application form must be signed by a duly authorised officer, who must state his representative capacity, andstamped with your corporation’s chop.

If an application is made by a person under a power of attorney, our Company, the Joint GlobalCoordinators, the Joint Bookrunners and the Joint Lead Managers may accept or reject it at their discretion andon any conditions they think fit, including evidence of the attorney’s authority.

The number of joint applicants may not exceed four for the Public Offer Shares.

HOW TO APPLY FOR PUBLIC OFFER SHARES

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Unless permitted by the GEM Listing Rules, you cannot apply for any Public Offer Shares if you are:

• an existing beneficial owner of Shares in our Company and/or any its subsidiaries;

• a Director or chief executive officer of our Company and/or any of its subsidiaries;

• a connected person (as defined in the GEM Listing Rules) of our Company or will become aconnected person of our Company immediately upon completion of the Share Offer;

• an associate (as defined in the GEM Listing Rules) of any of the above; or

• have been allocated or have applied for or indicated an interest in any Placing Shares or otherwiseparticipated in the Placing.

3. APPLYING FOR PUBLIC OFFER SHARES

Which Application Channel to Use

For Public Offer Shares to be issued in your own name, use a WHITE Application Form.

For Public Offer Shares to be issued in the name of HKSCC Nominees and deposited directly intoCCASS to be credited to your or a designated CCASS Participant’s stock account, use a YELLOWApplication Form or electronically instruct HKSCC via CCASS to cause HKSCC Nominees to apply foryou.

Where to Collect the Application Forms

You can collect a WHITE Application Form and a prospectus during normal business hours from9:00 a.m. on Friday, 27 September 2019 till 12:00 noon on Thursday, 3 October 2019 from:

(i) any of the following addresses of the Public Offer Underwriters:

Orient Securities (Hong Kong) LimitedRooms 2803-2807, 28/F, Wing On House71 Des Voeux Road CentralCentral, Hong Kong

Aristo Securities LimitedRoom 101, 1st Floor, On Hong Commercial Building145 Hennessy RoadWanchai, Hong Kong

Chuenman Securities LimitedOffice A, 10/F, Sang Woo Building227-228 Gloucester RoadWan Chai, Hong Kong


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(ii) any of the following branches of the receiving bank:

DBS Bank (Hong Kong) Limited

District Branch Address

Hong Kong Island Head Office G/F, The Center, 99 Queen’sRoad Central, Central

Kowloon Nathan Road –

SME Banking Centre2/F, Wofoo

Commercial Building,574-576 Nathan Road,Mongkok

New Territories Kwai Chung Branch G/F, 1001 Kwai Chung Road,Kwai Chung

You can collect a YELLOW Application Form and a prospectus during normal business hours from9:00 a.m. on Friday, 27 September 2019 till 12:00 noon on Thursday, 3 October 2019 from the DepositoryCounter of HKSCC at 1/F., One & Two Exchange Square, 8 Connaught Place, Central, Hong Kong or fromyour stockbroker.

Time for Lodging Application Forms

Your completed WHITE or YELLOW Application Form, together with a cheque or a banker’scashier order attached and marked payable to ‘‘TING HONG NOMINEES LIMITED – OPTIMA PUBLICOFFER’’ for the payment, should be deposited in the special collection boxes provided at any of thebranches of the receiving bank listed above, at the following times:

Friday, 27 September 2019 – 9:00 a.m. to 5:00 p.m.

Saturday, 28 September 2019 – 9:00 a.m. to 1:00 p.m.

Monday, 30 September 2019 – 9:00 a.m. to 5:00 p.m.

Wednesday, 2 October 2019 – 9:00 a.m. to 5:00 p.m.

Thursday, 3 October 2019 – 9:00 a.m. to 12:00 noon

The application lists will be open from 11:45 a.m. to 12:00 noon on Thursday, 3 October 2019, thelast application day or such later time as described in the paragraph headed ‘‘9. Effect of bad weatherand/or extreme conditions on the opening of the applications lists’’ in this section.


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4. TERMS AND CONDITIONS OF AN APPLICATION

Follow the detailed instructions in the Application Form carefully; otherwise, your application may berejected.

By submitting an Application Form, among others, you:

(i) undertake to execute all relevant documents and instruct and authorise our Company and/or the JointGlobal Coordinators, the Joint Bookrunners and the Joint Lead Managers (or their agents ornominees), as agents of our Company, to execute any documents for you and to do on your behalf allthings necessary to register any Public Offer Shares allocated to you in your name or in the name ofHKSCC Nominees as required by the Articles of Association;

(ii) agree to comply with the Companies (Winding Up and Miscellaneous Provisions) Ordinance, theCompanies Ordinance and the Articles of Association;

(iii) confirm that you have read the terms and conditions and application procedures set out in thisprospectus and in the Application Form and agree to be bound by them;

(iv) confirm that you have received and read this prospectus and have only relied on the information andrepresentations contained in this prospectus in making your application and will not rely on any otherinformation or representations except those in any supplement to this prospectus;

(v) confirm that you are aware of the restrictions on the Share Offer in this prospectus;

(vi) agree that none of our Company, the Sole Sponsor, the Joint Global Coordinators, the JointBookrunners, the Joint Lead Managers, the Public Offer Underwriters, their respective directors,officers, employees, partners, agents, advisers and any other parties involved in the Share Offer is orwill be liable for any information and representations not in this prospectus (and any supplement toit);

(vii) undertake and confirm that you or the person(s) for whose benefit you have made the application havenot applied for or taken up, or indicated an interest for, and will not apply for or take up, or indicatean interest for, any Offer Shares under the Placing nor participated in the Placing;

(viii) agree to disclose to our Company, the Sole Sponsor, our Hong Kong Branch Share Registrar, thereceiving bank, the Joint Global Coordinators, the Joint Bookrunners, the Joint Lead Managers, thePublic Offer Underwriters and/or their respective advisers and agents any personal data which theymay require about you and the person(s) for whose benefit you have made the application;

(ix) (if the laws of any place outside Hong Kong apply to your application) agree and warrant that youhave complied with all such laws and none of our Company, the Sole Sponsor, the Joint GlobalCoordinators, the Joint Bookrunners, the Joint Lead Managers and the Public Offer Underwriters norany of their respective officers or advisers will breach any law outside Hong Kong as a result of theacceptance of your offer to purchase, or any action arising from your rights and obligations under theterms and conditions contained in this prospectus and the Application Form;

(x) agree that once your application has been accepted, you may not rescind it because of an innocentmisrepresentation;

(xi) agree that your application will be governed by the laws of Hong Kong;


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(xii) represent, warrant and undertake that (i) you understand that the Public Offer Shares have not beenand will not be registered under the U.S. Securities Act; and (ii) you and any person for whosebenefit you are applying for the Public Offer Shares are outside the United States (as defined inRegulation S) or are a person described in paragraph (h)(3) of Rule 902 of Regulation S;

(xiii) warrant that the information you have provided is true and accurate;

(xiv) agree to accept the Public Offer Shares applied for, or any lesser number allocated to you under theapplication;

(xv) authorise our Company to place your name(s) or the name of the HKSCC Nominees, on ourCompany’s register of members as the holder(s) of any Public Offer Shares allocated to you, and ourCompany and/or its agents to send any share certificate(s) and/or any refund cheque(s) to you or thefirst-named applicant for joint application by ordinary post at your own risk to the address stated onthe application, unless you have chosen to collect the share certificate(s) and/or refund cheque(s) inperson;

(xvi) declare and represent that this is the only application made and the only application intended by youto be made to benefit you or the person for whose benefit you are applying;

(xvii) understand that our Company, the Sole Sponsor, the Joint Global Coordinators, the Joint Bookrunners,the Joint Lead Managers and the Public Offer Underwriters, and/or their respective directors, officersor representatives or any other person or party involved in the Share Offer will rely on yourdeclarations and representations in deciding whether or not to make any allotment of any of thePublic Offer Shares to you and that you may be prosecuted for making a false declaration;

(xviii) (if the application is made for your own benefit) warrant that no other application has been or will bemade for your benefit on a WHITE or YELLOW Application Form or by giving electronicapplication instructions to HKSCC by you or by any one as your agent or by any other person; and

(xix) (if you are making the application as an agent for the benefit of another person) warrant that (i) noother application has been or will be made by you as agent for or for the benefit of that person or bythat person or by any other person as agent for that person on a WHITE or YELLOW ApplicationForm or by giving electronic application instructions to HKSCC; and (ii) you have due authority tosign the Application Form or give electronic application instructions on behalf of that other personas their agent.

Additional Instructions for YELLOW Application Form

You may refer to the YELLOW Application Form for details.

5. APPLYING BY GIVING ELECTRONIC APPLICATION INSTRUCTIONS TO HKSCC VIA CCASS

General

CCASS Participants may give electronic application instructions to apply for the Public OfferShares and to arrange payment of the money due on application and payment of refunds under theirparticipant agreements with HKSCC and the General Rules of CCASS and the CCASS OperationalProcedures.


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If you are a CCASS Investor Participant, you may give these electronic application instructionsthrough the CCASS Phone System by calling +852 2979 7888 or through the CCASS Internet System(https://ip.ccass.com) (using the procedures in HKSCC’s ‘‘An Operating Guide for Investor Participants’’in effect from time to time).

HKSCC can also input electronic application instructions for you if you go to:

Hong Kong Securities Clearing Company LimitedCustomer Service Center

1/F., One & Two Exchange Square8 Connaught Place

CentralHong Kong

and complete an input request form.

You can also collect a prospectus from this address.

If you are not a CCASS Investor Participant, you may instruct your broker or custodian who is aCCASS Clearing Participant or a CCASS Custodian Participant to give electronic application instructionsvia CCASS terminals to apply for the Public Offer Shares on your behalf.

You will be deemed to have authorised HKSCC and/or HKSCC Nominees to transfer the details ofyour application to our Company, the Joint Global Coordinators, the Joint Bookrunners, the Joint LeadManagers and our Hong Kong Branch Share Registrar.

Giving Electronic Application Instructions to HKSCC via CCASS

Where you have given electronic application instructions to apply for the Public Offer Shares and aWHITE Application Form is signed by HKSCC Nominees on your behalf:

(i) HKSCC Nominees will only be acting as a nominee for you and is not liable for any breach ofthe terms and conditions of the WHITE Application Form or this prospectus;

(ii) HKSCC Nominees will do the following things on your behalf:

• agree that the Public Offer Shares to be allotted shall be issued in the name of HKSCCNominees and deposited directly into CCASS for the credit of the CCASS Participant’sstock account on your behalf or your CCASS Investor Participant’s stock account;

• undertake and confirm that you have not applied for or taken up, will not apply for or takeup, or indicate an interest for, any Offer Shares under the Placing;

• agree to accept the Public Offer Shares applied for or any lesser number allocated;

• (if the electronic application instructions are given for your benefit) declare that onlyone set of electronic application instructions has been given for your benefit;

• (if you are an agent for another person) declare that you have only given one set ofelectronic application instructions for the other person’s benefit and are duly authorisedto give those instructions as their agent;


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• confirm that you understand that our Company, our Directors, the Sole Sponsor, the JointGlobal Coordinators, the Joint Bookrunners, the Joint Lead Managers and theUnderwriters, their respective directors, officers or representatives or any other person orparty involved in the Share Offer will rely on your declarations and representations indeciding whether or not to make any allotment of any of the Public Offer Shares to youand that you may be prosecuted if you make a false declaration;

• authorise our Company to place HKSCC Nominees’ name on our Company’s register ofmembers as the holder of the Public Offer Shares allocated to you and to send sharecertificate(s) and/or refund monies under the arrangements separately agreed between usand HKSCC;

• confirm that you have read the terms and conditions and application procedures set out inthis prospectus and agree to be bound by them;

• confirm that you have received and/or read a copy of this prospectus and have relied onlyon the information and representations in this prospectus in causing the application to bemade, save as set out in any supplement to this prospectus;

• agree that none of our Company, the Sole Sponsor, the Joint Global Coordinators, the JointBookrunners, the Joint Lead Managers, the Public Offer Underwriters, their respectivedirectors, officers, employees, partners, agents, advisers and any other parties involved inthe Share Offer, is or will be liable for any information and representations not containedin this prospectus (and any supplement to it);

• agree to disclose your personal data to our Company, our Hong Kong Branch ShareRegistrar, receiving bank, the Sole Sponsor, the Joint Global Coordinators, the JointBookrunners, the Joint Lead Managers, the Public Offer Underwriters and/or theirrespective advisers and agents;

• agree (without prejudice to any other rights which you may have) that once HKSCCNominees’ application has been accepted, it cannot be rescinded for innocentmisrepresentation;

• agree that any application made by HKSCC Nominees on your behalf is irrevocable beforethe fifth day after the time of the opening of the application lists (excluding any day whichis Saturday, Sunday or public holiday in Hong Kong), such agreement to take effect as acollateral contract with us and to become binding when you give the instructions and suchcollateral contract to be in consideration of our Company agreeing that it will not offer anyPublic Offer Shares to any person before the fifth day after the time of the opening of theapplication lists (excluding any day which is Saturday, Sunday or public holiday in HongKong), except by means of one of the procedures referred to in this prospectus. However,HKSCC Nominees may revoke the application before the fifth day after the time of theopening of the application lists (excluding for this purpose any day which is a Saturday,Sunday or public holiday in Hong Kong) if a person responsible for this prospectus underSection 40 of the Companies (Winding Up and Miscellaneous Provisions) Ordinance givesa public notice under that section which excludes or limits that person’s responsibility forthis prospectus;


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• agree that once HKSCC Nominees’ application is accepted, neither that application noryour electronic application instructions can be revoked, and that acceptance of thatapplication will be evidenced by our Company’s announcement of the Public Offer results;

• agree to the arrangements, undertakings and warranties under the participant agreementbetween you and HKSCC, read with the General Rules of CCASS and the CCASSOperational Procedures, for the giving electronic application instructions to apply forPublic Offer Shares;

• agree with our Company, for itself and for the benefit of each Shareholder (and so that ourCompany will be deemed by its acceptance in whole or in part of the application byHKSCC Nominees to have agreed, for itself and on behalf of each of our Shareholders,with each CCASS Participant giving electronic application instructions) to observe andcomply with the Companies (Winding Up and Miscellaneous Provisions) Ordinance andthe Articles of Association; and

• agree that your application, any acceptance of it and the resulting contract will begoverned by the laws of Hong Kong.

Effect of Giving Electronic Application Instructions to HKSCC via CCASS

By giving electronic application instructions to HKSCC or instructing your broker or custodian whois a CCASS Clearing Participant or a CCASS Custodian Participant to give such instructions to HKSCC,you (and, if you are joint applicants, each of you jointly and severally) are deemed to have done thefollowing things. Neither HKSCC nor HKSCC Nominees shall be liable to our Company or any otherperson in respect of the things mentioned below:

• instructed and authorised HKSCC to cause HKSCC Nominees (acting as nominee for therelevant CCASS Participants) to apply for the Public Offer Shares on your behalf;

• instructed and authorised HKSCC to arrange payment of the maximum Offer Price, brokerage,SFC transaction levy and the Stock Exchange trading fee by debiting your designated bankaccount and, in the case of a wholly or partially unsuccessful application and/or if the OfferPrice is less than the maximum Offer Price per Offer Share initially paid on application, refundof the application monies (including brokerage, SFC transaction levy and the Stock Exchangetrading fee) by crediting your designated bank account; and

• instructed and authorised HKSCC to cause HKSCC Nominees to do on your behalf all the thingsstated in the WHITE Application Form and in this prospectus.

Minimum Purchase Amount and Permitted Numbers

You may give or cause your broker or custodian who is a CCASS Clearing Participant or a CCASSCustodian Participant to give electronic application instructions for a minimum of 10,000 Public OfferShares. Instructions for more than 10,000 Public Offer Shares must be in one of the numbers set out in thetable in the Application Forms. No application for any other number of Public Offer Shares will beconsidered and any such application is liable to be rejected.


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Time for Inputting Electronic Application Instructions (Note)

CCASS Clearing/Custodian Participants can input electronic application instructions at thefollowing times on the following dates:

Friday, 27 September 2019 – 9:00 a.m. to 8:30 p.m.

Monday, 30 September 2019 – 8:00 a.m. to 8:30 p.m.

Wednesday, 2 October 2019 – 8:00 a.m. to 8:30 p.m.

Thursday, 3 October 2019 – 8:00 a.m. to 12:00 noon

CCASS Investor Participants can input electronic application instructions from 9:00 a.m. on Friday,27 September 2019 until 12:00 noon on Thursday, 3 October 2019 (24 hours daily, except on the lastapplication day).

The latest time for inputting your electronic application instructions will be 12:00 noon onThursday, 3 October 2019, the last application day or such later time as described in the paragraph headed‘‘9. Effect of bad weather and/or extreme conditions on the opening of the application lists’’ in this sectionof the prospectus.

Note: The times in this sub-section are subject to change as HKSCC may determine from time to time with prior notificationto CCASS Clearing/Custodian Participants and/or CCASS Investor Participants.

No Multiple Applications

If you are suspected of having made multiple applications or if more than one application is made foryour benefit, the number of Public Offer Shares applied for by HKSCC Nominees will be automaticallyreduced by the number of Public Offer Shares for which you have given such instructions and/or for whichsuch instructions have been given for your benefit. Any electronic application instructions to make anapplication for the Public Offer Shares given by you or for your benefit to HKSCC shall be deemed to bean actual application for the purposes of considering whether multiple applications have been made.

Section 40 of the Companies (Winding Up and Miscellaneous Provisions) Ordinance

For the avoidance of doubt, our Company and all other parties involved in the preparation of thisprospectus acknowledge that each CCASS Participant who gives or causes to give electronic applicationinstructions is a person who may be entitled to compensation under Section 40 of the Companies (WindingUp and Miscellaneous Provisions) Ordinance (as applied by Section 342E of the Companies (Winding Upand Miscellaneous Provisions) Ordinance).

Personal Data

The section of the Application Form headed ‘‘Personal Data’’ applies to any personal data held by ourCompany, the Hong Kong Branch Share Registrar, the receiving bank, the Sole Sponsor, the Joint GlobalCoordinators, the Joint Bookrunners, the Joint Lead Managers, the Public Offer Underwriters and any oftheir respective advisers and agents about you in the same way as it applies to personal data aboutapplicants other than HKSCC Nominees.


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6. WARNING FOR ELECTRONIC APPLICATIONS

The subscription of the Public Offer Shares by giving electronic application instructions to HKSCC isonly a facility provided to CCASS Participants. Such facilities are subject to capacity limitations and potentialservice interruptions and you are advised not to wait until the last application day in making your electronicapplications. Our Company, our Directors, the Sole Sponsor, the Joint Global Coordinators, the JointBookrunners, the Joint Lead Managers and the Underwriters take no responsibility for such applications andprovide no assurance that any CCASS Participant will be allotted any Public Offer Shares.

To ensure that CCASS Investor Participants can give their electronic application instructions, they areadvised not to wait until the last minute to input their instructions to the systems. In the event that CCASSInvestor Participants have problems in the connection to CCASS Phone System/CASS Internet System forsubmission of electronic application instructions, they should either (i) submit a WHITE or YELLOWApplication Form, or (ii) go to HKSCC’s Customer Service Centre to complete an input request form forelectronic application instructions before 12: 00 noon on Thursday, 3 October 2019 or such later time asdescribed in the paragraph headed ‘‘9. Effect of bad weather and/or extreme conditions on the opening of theapplication lists’’ in this section of the prospectus.

7. HOW MANY APPLICATIONS CAN YOU MAKE

Multiple applications for the Public Offer Shares are not allowed except by nominees. If you are anominee, in the box on the Application Form marked ‘‘For nominees’’ you must include:

• an account number; or

• some other identification code,

for each beneficial owner or, in the case of joint beneficial owners, for each joint beneficial owner. If you do notinclude this information, the application will be treated as being made for your benefit.

All of your applications will be rejected if more than one application on a WHITE or YELLOWApplication Form (whether individually or jointly) or by giving electronic application instructions to HKSCC,is made for your benefit (including the part of the application made by HKSCC Nominees acting on electronicapplication instructions).

If an application is made by an unlisted company and:

• the principal business of that company is dealing in securities; and

• you exercise statutory control over that company, then the application will be treated as being foryour benefit.

‘‘Unlisted company’’ means a company with no equity securities listed on the Stock Exchange.


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‘‘Statutory control’’ means you:

• control the composition of the board of directors of the company;

• control more than half of the voting power of the company; or

• hold more than half of the issued share capital of the company (not counting any part of it whichcarries no right to participate beyond a specified amount in a distribution of either profits or capital).

8. HOW MUCH TO PAY FOR THE PUBLIC OFFER SHARES

The WHITE and YELLOW Application Forms have tables showing the exact amount payable for Shares.

You must pay the maximum Offer Price, brokerage, SFC transaction levy and the Stock Exchange tradingfee in full upon application for Shares under the terms set out in the Application Forms.

You may submit an application using a WHITE or YELLOW Application Form in respect of a minimumof 10,000 Public Offer Shares. Each application or electronic application instruction in respect of more than10,000 Public Offer Shares must be in one of the numbers set out in the table in the Application Form.

If your application is successful, brokerage will be paid to the Exchange Participants, and the SFCtransaction levy and the Stock Exchange trading fee are paid to the Stock Exchange (in the case of the SFCtransaction levy, collected by the Stock Exchange on behalf of the SFC).

For further details on the Offer Price, please refer to the paragraph headed ‘‘Structure and Conditions ofthe Share Offer – Offer Price’’ in this prospectus.

9. EFFECT OF BAD WEATHER AND/OR EXTREME CONDITIONS ON THE OPENING OF THEAPPLICATION LISTS

The application lists will not open if there is/are:

• a tropical cyclone warning signal number 8 or above; or

• an announcement of ‘‘extreme conditions’’ by the Hong Kong Government in accordance with therevised ‘‘Code of Practice in Times of Typhoons and Rainstorms’’ issued by the Hong Kong LabourDepartment in June 2019; and/or

• a ‘‘black’’ rainstorm warning,

in force in Hong Kong at any time between 9:00 a.m. to 12:00 noon on Thursday, 3 October 2019.

Instead they will open between 11:45 a.m. to 12:00 noon on the next business day which does not haveeither of those warnings in Hong Kong in force at any time between 9:00 a.m. to 12:00 noon.

If the application lists do not open and close on Thursday, 3 October 2019 or if there is a tropical cyclonewarning signal number 8 or above or a ‘‘black’’ rainstorm warning signal and/or extreme conditions in force inHong Kong that may affect the dates mentioned in the section headed ‘‘Expected Timetable’’ in this prospectus,an announcement will be made in such event.


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10. PUBLICATION OF RESULTS

Our Company expects to announce the final Offer Price, the level of indications of interest in the Placing,the level of applications in the Public Offer and the basis of allocation of the Public Offer Shares on Thursday,10 October 2019 on our Company’s website at www.ow.sg and the website of the Stock Exchange atwww.hkexnews.hk.

The results of allocations and the Hong Kong identity card/passport/Hong Kong business registrationnumbers of successful applicants under the Public Offer will be available at the times and date and in the mannerspecified below:

• in the announcement to be posted on our Company’s website at www.ow.sg and the Stock Exchange’swebsite at www.hkexnews.hk by no later than 9:00 a.m. on Thursday, 10 October 2019;

• from the designated results of allocations website at www.tricor.com.hk/ipo/result orwww.hkeipo.hk/IPOResult with a ‘‘search by ID’’ function on a 24-hour basis from 8:00 a.m. onThursday, 10 October 2019 to 12:00 midnight on Wednesday, 16 October 2019 ;

• by telephone enquiry line by calling (852) 3691 8488 between 9:00 a.m. and 6:00 p.m. fromThursday, 10 October 2019 to Tuesday, 15 October 2019 on a Business Day;

• in the special allocation results booklets which will be available for inspection during opening hoursfrom Thursday, 10 October 2019 to Monday, 14 October 2019 at all the designated branches ofreceiving bank on a Business Day.

If our Company accepts your offer to purchase (in whole or in part), which it may do by announcing thebasis of allocations and/or making available the results of allocations publicly, there will be a binding contractunder which you will be required to purchase the Public Offer Shares if the conditions of the Share Offer aresatisfied and the Share Offer is not otherwise terminated. Further details are contained in the section headed‘‘Structure and Conditions of the Share Offer’’ in this prospectus.

You will not be entitled to exercise any remedy of rescission for innocent misrepresentation at any timeafter acceptance of your application. This does not affect any other right you may have.

11. CIRCUMSTANCES IN WHICH YOU WILL NOT BE ALLOTTED PUBLIC OFFER SHARES

You should note the following situations in which the Public Offer Shares will not be allotted to you:

(i) If your application is revoked:

By completing and submitting an Application Form or giving electronic application instructions toHKSCC, you agree that your application or the application made by HKSCC Nominees on your behalfcannot be revoked on or before the fifth day after the time of the opening of the application lists (excludingfor this purpose any day which is Saturday, Sunday or public holiday in Hong Kong). This agreement willtake effect as a collateral contract with our Company.


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Your application or the application made by HKSCC Nominees on your behalf may only be revokedon or before such fifth day if a person responsible for this prospectus under Section 40 of the Companies(Winding Up and Miscellaneous Provisions) Ordinance (as applied by Section 342E of the Companies(Winding Up and Miscellaneous Provisions) Ordinance) gives a public notice under that section whichexcludes or limits that person’s responsibility for this prospectus.

If any supplement to this prospectus is issued, applicants who have already submitted an applicationwill be notified that they are required to confirm their applications. If applicants have been so notified buthave not confirmed their applications in accordance with the procedure to be notified, all unconfirmedapplications will be deemed revoked.

If your application or the application made by HKSCC Nominees on your behalf has been accepted, itcannot be revoked. For this purpose, acceptance of applications which are not rejected will be constitutedby notification in the announcement of the results of allocation, and where such basis of allocation issubject to certain conditions or provides for allocation by ballot, such acceptance will be subject to thesatisfaction of such conditions or results of the ballot respectively.

(ii) If our Company or its agents exercise their discretion to reject your application:

Our Company, the Joint Global Coordinators, the Joint Bookrunners, the Joint Lead Managers, andtheir respective agents and nominees have full discretion to reject or accept any application, or to acceptonly part of any application, without giving any reasons.

(iii) If the allotment of the Public Offer Shares is void:

The allotment of the Public Offer Shares will be void if the Stock Exchange does not grantpermission to list the Shares either:

• within three weeks from the closing date of the application lists; or

• within a longer period of up to six weeks if the Stock Exchange notifies our Company of thatlonger period within three weeks of the closing date of the application lists.

(iv) If:

• you make multiple applications or suspected multiple applications;

• you or the person for whose benefit you are applying have applied for or taken up, or indicatedan interest for, or have been or will be placed or allocated (including conditionally and/orprovisionally) the Public Offer Shares;

• your Application Form is not completed in accordance with the stated instructions;

• your payment is not made correctly or the cheque or banker’s cashier order paid by you isdishonoured upon its first presentation;

• the Underwriting Agreements do not become unconditional or are terminated;


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• our Company or the Joint Global Coordinators, or the Joint Bookrunners or the Joint LeadManagers believe(s) that by accepting your application, it or they would violate applicablesecurities or other laws, regulations or rules; or

• your application is for more than 100% of the Public Offer Shares initially offered under thePublic Offer.

12. REFUND OF APPLICATION MONIES

If an application is rejected, not accepted or accepted in part only, or if the Offer Price as finallydetermined is less than the maximum Offer Price of HK$0.26 per Offer Share (excluding brokerage, SFCtransaction levy and the Stock Exchange trading fee thereon), or if the conditions of the Public Offer are notfulfilled in accordance with the section headed ‘‘Structure and Conditions of the Share Offer’’ in this prospectusor if any application is revoked, the application monies, or the appropriate portion thereof, together with therelated brokerage, SFC transaction levy and the Stock Exchange trading fee, will be refunded, without interest orthe cheque or banker’s cashier order will not be cleared.

Any refund of your application monies will be made on Thursday, 10 October 2019.

13. DESPATCH/COLLECTION OF SHARE CERTIFICATES AND REFUND MONIES

You will receive one share certificate for all Public Offer Shares allotted to you under the Public Offer(except pursuant to applications made on YELLOW Application Forms or by electronic applicationinstructions to HKSCC via CCASS where the share certificates will be deposited into CCASS as describedbelow).

No temporary document of title will be issued in respect of our Shares. No receipt will be issued for sumspaid on application.

If you apply by WHITE or YELLOW Application Forms, subject to personal collection as mentionedbelow, the following will be sent to you (or, in the case of joint applicants, to the first-named applicant) byordinary post, at your own risk, to the address specified on the Application Form:

• share certificate(s) for all the Public Offer Shares allotted to you (for YELLOW Application Forms,share certificates will be deposited into CCASS as described below); and

• refund cheque(s) crossed ‘‘Account Payee Only’’ in favour of the applicant (or, in the case of jointapplicants, the first-named applicant) for (i) all or the surplus application monies for the Public OfferShares, wholly or partially unsuccessfully applied for; and/or (ii) the difference between the OfferPrice and the maximum Offer Price per Offer Share paid on application in the event that the OfferPrice is less than the maximum Offer Price (including brokerage, SFC transaction levy and the StockExchange trading fee but without interest).

Part of the Hong Kong identity card number/passport number, provided by you or the first-namedapplicant (if you are joint applicants), may be printed on your refund cheque, if any. Your bankermay require verification of your Hong Kong identity card number/passport number before encashmentof your refund cheque(s). Inaccurate completion of your Hong Kong identity card number/passportnumber may invalidate or delay encashment of your refund cheque(s).


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Subject to arrangement on despatch/collection of share certificates and refund monies as mentioned below,any refund cheques and share certificates are expected to be posted on or around Thursday, 10 October 2019.The right is reserved to retain any share certificate(s) and any surplus application monies pending clearance ofcheque(s) or banker’s cashier’s order(s).

Share certificates will only become valid at 8:00 a.m. on the Listing Date provided that the Share Offer hasbecome unconditional and the right of termination described in the section headed ‘‘Underwriting’’ in thisprospectus has not been exercised. Investors who trade shares prior to the receipt of share certificates or theshare certificates becoming valid do so at their own risk.

Personal Collection

(i) If you apply using a WHITE Application Form

If you apply for 1,000,000 or more Public Offer Shares and have provided all information required byyour Application Form, you may collect your refund cheque(s) and/or share certificate(s) from TricorInvestor Services Limited at Level 54, Hopewell Centre, 183 Queen’s Road East, Hong Kong, from 9:00a.m. to 1:00 p.m. on Thursday, 10 October 2019 or such other date as notified by us.

If you are an individual who is eligible for personal collection, you must not authorise any otherperson to collect for you. If you are a corporate applicant which is eligible for personal collection, yourauthorised representative must bear a letter of authorisation from your corporation stamped with yourcorporation’s chop. Both individuals and authorised representatives must produce, at the time of collection,evidence of identity acceptable to the Hong Kong Branch Share Registrar.

If you do not collect your refund cheque(s) and/or share certificate(s) personally within the timespecified for collection, they will be despatched promptly to the address specified in your ApplicationForm by ordinary post at your own risk.

If you apply for less than 1,000,000 Public Offer Shares, your refund cheque(s) and/or sharecertificate(s) will be sent to the address on the relevant Application Form on Thursday, 10 October 2019,by ordinary post and at your own risk.

(ii) If you apply using a YELLOW Application Form

If you apply for 1,000,000 Public Offer Shares or more, please follow the same instructions asdescribed above for collection of refund cheque(s). If you have applied for less than 1,000,000 Public OfferShares, your refund cheque(s) will be sent to the address on the relevant Application Form on Thursday,10 October 2019, by ordinary post and at your own risk.

If you apply by using a YELLOW Application Form and your application is wholly or partiallysuccessful, your share certificate(s) will be issued in the name of HKSCC Nominees and deposited intoCCASS for credit to your or the designated CCASS Participant’s stock account as stated in yourApplication Form on Thursday, 10 October 2019, or upon contingency, on any other date determined byHKSCC or HKSCC Nominees.


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• If you apply through a designated CCASS participant (other than a CCASS investor participant)

For Public Offer Shares credited to your designated CCASS participant’s stock account (otherthan CCASS Investor Participant), you can check the number of Public Offer Shares allotted to youwith that CCASS participant.

• If you are applying as a CCASS investor participant

Our Company will publish the results of CCASS Investor Participants’ applications togetherwith the results of the Public Offer in the manner described in the paragraph headed ‘‘10. Publicationof results’’ above. You should check the announcement published by our Company and report anydiscrepancies to HKSCC before 5:00 p.m. on Thursday, 10 October 2019 or any other date asdetermined by HKSCC or HKSCC Nominees. Immediately after the credit of the Public Offer Sharesto your stock account, you can check your new account balance via the CCASS Phone System andCCASS Internet System.

(iii) If you apply via Electronic Application Instructions to HKSCC

Allocation of Public Offer Shares

For the purposes of allocating Public Offer Shares, HKSCC Nominees will not be treated as anapplicant. Instead, each CCASS Participant who gives electronic application instructions or eachperson for whose benefit instructions are given will be treated as an applicant.

Deposit of Share Certificates into CCASS and Refund of Application Monies

• If your application is wholly or partially successful, your share certificate(s) will be issuedin the name of HKSCC Nominees and deposited into CCASS for the credit of yourdesignated CCASS Participant’s stock account or your CCASS Investor Participant stockaccount on Thursday, 10 October 2019, or, on any other date determined by HKSCC orHKSCC Nominees.

• Our Company expects to publish the application results of CCASS Participants (and wherethe CCASS Participant is a broker or custodian, our Company will include informationrelating to the relevant beneficial owner), your Hong Kong identity card number/passportnumber or other identification code (Hong Kong business registration number forcorporations) and the basis of allotment of the Public Offer in the manner specified in theparagraph headed ‘‘10. Publication of results’’ above on Thursday, 10 October 2019.

You should check the announcement published by our Company and report anydiscrepancies to HKSCC before 5:00 p.m. on Thursday, 10 October 2019 or such otherdate as determined by HKSCC or HKSCC Nominees.

• If you have instructed your broker or custodian to give electronic application instructionson your behalf, you can also check the number of Public Offer Shares allotted to you andthe amount of refund monies (if any) payable to you with that broker or custodian.


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• If you have applied as a CCASS Investor Participant, you can also check the number ofPublic Offer Shares allotted to you and the amount of refund monies (if any) payable toyou via the CCASS Phone System and the CCASS Internet System (under the procedurescontained in HKSCC’s ‘‘An Operating Guide for Investor Participants’’ in effect from timeto time) on Thursday, 10 October 2019. Immediately following the credit of the PublicOffer Shares to your stock account and the credit of refund monies to your bank account,HKSCC will also make available to you an activity statement showing the number ofPublic Offer Shares credited to your CCASS Investor Participant stock account and theamount of refund monies (if any) credited to your designated bank account.

• Refund of your application monies (if any) in respect of wholly and partially unsuccessfulapplications and/or difference between the Offer Price and the maximum Offer Price perOffer Share initially paid on application including brokerage of 1%, SFC transaction levyof 0.0027% and the Stock Exchange trading fee of 0.005%, will be credited to yourdesignated bank account or the designated bank account of your broker or custodian onThursday, 10 October 2019. No interest will be paid thereon.

14. ADMISSION OF THE SHARES INTO CCASS

If the Stock Exchange grants the listing of, and permission to deal in, our Shares and we comply with thestock admission requirements of HKSCC, our Shares will be accepted as eligible securities by HKSCC fordeposit, clearance and settlement in CCASS with effect from the date of commencement of dealings in ourShares or any other date HKSCC chooses. Settlement of transactions between Exchange Participants (as definedin the GEM Listing Rules) is required to take place in CCASS on the second Business Day after any trading day.


Investors should seek the advice of their stockbroker or other professional adviser for details of thesettlement arrangement as such arrangements may affect their rights and interests.

All necessary arrangements have been made enabling the Shares to be admitted into CCASS.


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The following is the text of a report set out on pages I-1 to I-73, received from the Company’s reportingaccountants, BDO Limited, Certified Public Accountants, Hong Kong, for the purpose of incorporation in thisprospectus. It is prepared and addressed to the directors of the Company and to the Sponsor pursuant to therequirements of HKSIR 200 ‘‘Accountants’ Reports on Historical Financial Information in Investment Circulars’’issued by the Hong Kong Institute of Certified Public Accountants.

ACCOUNTANTS’ REPORT ON HISTORICAL FINANCIAL INFORMATION TO THE DIRECTORS OFOPTIMA AUTOMOBILE GROUP HOLDINGS LIMITED AND ORIENT CAPITAL (HONG KONG)LIMITED

INTRODUCTION

We report on the historical financial information of Optima Automobile Group Holdings Limited (the‘‘Company’’) and its subsidiaries (hereinafter collectively referred to as the ‘‘Group’’) set out on pages I-4 toI-73, which comprises the consolidated statements of financial position as at 31 December 2016, 31 December2017, 31 December 2018 and 31 March 2019 and the statement of financial position of the Company as at31 December 2018 and 31 March 2019, and the consolidated statements of profit or loss and othercomprehensive income, the consolidated statements of changes in equity and the consolidated statements of cashflows for each of the three years ended 31 December 2016, 2017 and 2018 and the three months ended 31 March2019 (the ‘‘Track Record Period’’), and a summary of significant accounting policies and other explanatoryinformation (together the ‘‘Historical Financial Information’’). The Historical Financial Information set out onpages I-4 to I-73 forms an integral part of this report, which has been prepared for inclusion in the prospectus ofthe Company dated 27 September 2019 (the ‘‘Prospectus’’) in connection with the initial listing of shares of theCompany (the ‘‘Listing’’) on GEM of The Stock Exchange of Hong Kong Limited (the ‘‘Stock Exchange’’).

DIRECTORS’ RESPONSIBILITY FOR THE HISTORICAL FINANCIAL INFORMATION

The directors of the Company are responsible for the preparation of Historical Financial Information thatgives a true and fair view in accordance with the basis of preparation and presentation set out in Note 2 to theHistorical Financial Information, and for such internal control as the directors determine is necessary to enablethe preparation of Historical Financial Information that is free from material misstatement, whether due to fraudor error.

REPORTING ACCOUNTANTS’ RESPONSIBILITY

Our responsibility is to express an opinion on the Historical Financial Information and to report ouropinion to you. We conducted our work in accordance with Hong Kong Standard on Investment CircularReporting Engagements 200 ‘‘Accountants’ Reports on Historical Financial Information in Investment Circulars’’issued by the Hong Kong Institute of Certified Public Accountants (the ‘‘HKICPA’’). This standard requires thatwe comply with ethical standards and plan and perform our work to obtain reasonable assurance about whetherthe Historical Financial Information is free from material misstatement.

APPENDIX I ACCOUNTANTS’ REPORT ON THE FINANCIAL INFORMATION OF OUR GROUP

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Our work involved performing procedures to obtain evidence about the amounts and disclosures in theHistorical Financial Information. The procedures selected depend on the reporting accountants’ judgment,including the assessment of risks of material misstatement of the Historical Financial Information, whether dueto fraud or error. In making those risk assessments, the reporting accountants consider internal control relevantto the entity’s preparation of Historical Financial Information that give a true and fair view in accordance withthe basis of preparation and presentation set out in Note 2 to the Historical Financial Information in order todesign procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion onthe effectiveness of the entity’s internal control. Our work also included evaluating the appropriateness ofaccounting policies used and the reasonableness of accounting estimates made by the directors, as well asevaluating the overall presentation of the Historical Financial Information.

We believe that the evidence we have obtained is sufficient and appropriate to provide a basis for ouropinion.

OPINION

In our opinion the Historical Financial Information gives, for the purposes of the accountants’ report, a trueand fair view of the Group’s financial position as at 31 December 2016, 31 December 2017, 31 December 2018and 31 March 2019, the Company’s financial position as at 31 December 2018 and 31 March 2019 and of theGroup’s financial performance and cash flows for the Track Record Period in accordance with the basis ofpreparation and presentation set out in Note 2 to the Historical Financial Information.

REVIEW OF STUB PERIOD COMPARATIVE FINANCIAL INFORMATION

We have reviewed the stub period comparative financial information of the Group which comprises theconsolidated statement of profit or loss and other comprehensive income, the consolidated statement of changesin equity and the consolidated statement of cash flows for the three months ended 31 March 2018 and otherexplanatory information (together the ‘‘Stub Period Comparative Financial Information’’). The directors ofthe Company are responsible for the preparation and presentation of the Stub Period Comparative FinancialInformation in accordance with the basis of preparation and presentation set out in Note 2 to the HistoricalFinancial Information. Our responsibility is to express a conclusion on the Stub Period Comparative FinancialInformation based on our review. We conducted our review in accordance with Hong Kong Standard on ReviewEngagements 2410, ‘‘Review of Interim Financial Information Performed by the Independent Auditor of theEntity’’ issued by the HKICPA. A review consists of making inquiries, primarily of persons responsible forfinancial and accounting matters, and applying analytical and other review procedures. A review is substantiallyless in scope that an audit conducted in accordance with Hong Kong Standards on Auditing and consequentlydoes not enable us to obtain assurance that we would become aware of all significant matters that might beidentified in an audit. Accordingly, we do not express an audit opinion. Based on our review, nothing has cometo our attention that causes us to believe that the Stub Period Comparative Financial Information, for thepurposes of the accountants’ report, is not prepared, in all material respects, in accordance with the basis ofpreparation and presentation set out in Note 2 to the Historical Financial Information.


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REPORT ON MATTERS UNDER THE GEM LISTING RULES AND THE COMPANIES (WINDING UPAND MISCELLANEOUS PROVISIONS) ORDINANCE

Adjustments

In preparing the Historical Financial Information and the Stub Period Comparative Historical FinancialInformation, no adjustments to the Underlying Financial Statements as defined on page I-4 have been made.

Dividends

We refer to Note 13 to the Historical Financial Information which stated that no dividends have been paidby the Company in respect of the Track Record Period.

No historical financial statements for the Company

No financial statements have been prepared for the Company since its date of incorporation.

BDO LimitedCertified Public AccountantsTsui Ka Che, NormanPractising Certificate number: P05057Hong Kong

27 September 2019


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HISTORICAL FINANCIAL INFORMATION OF THE GROUP

Preparation of Historical Financial Information

Set out below is the Historical Financial Information which forms an integral part of this accountants’report.

The Historical Financial Information in this report was prepared based on the consolidated financialstatements of the Group for the Track Record Period. The consolidated financial statements of the Group havebeen prepared in accordance with the accounting policies which conform with Hong Kong Financial ReportingStandards (‘‘HKFRSs’’) issued by the HKICPA and were audited by BDO Limited in accordance with HongKong Standards on Auditing issued by the HKICPA (the ‘‘Underlying Financial Statements’’).

The Historical Financial Information is presented in Singapore Dollars (‘‘SGD’’) and all values are roundedto nearest thousand (SGD’000) except when otherwise indicated.

I. HISTORICAL FINANCIAL INFORMATION

CONSOLIDATED STATEMENTS OF PROFIT OR LOSS AND OTHER COMPREHENSIVEINCOME

Year ended 31 DecemberThree months ended

31 March2016 2017 2018 2018 2019

Notes SGD’000 SGD’000 SGD’000 SGD’000 SGD’000(unaudited)

Revenue 7 16,335 18,641 17,985 4,285 4,357

Other net income and gains 8 742 205 276 64 87

Items of expensesCost of materials (6,462) (6,124) (5,279) (1,420) (1,172)Marketing and advertising expenses (198) (178) (78) (15) (69)Employee benefit expenses (4,348) (4,885) (4,647) (1,242) (1,199)Depreciation of property, plant and

equipment (1,302) (1,862) (1,930) (479) (97)Depreciation of right-of-use assets – – – – (779)Impairment of trade receivables (27) (115) (93) (27) (19)Finance costs 10 (102) (308) (328) (86) (103)Listing expenses – – (2,494) (185) (317)Other expenses (2,727) (3,150) (3,319) (795) (439)

Profit before income tax expense 9 1,911 2,224 93 100 250Income tax expense 11 (482) (318) (336) (40) (119)

Profit/(Loss) and total comprehensiveincome for the years/periods 1,429 1,906 (243) 60 131

Profit/(Loss) attributable to:Owners of the Company 1,154 1,773 (273) 30 131Non-controlling interests 275 133 30 30 –

1,429 1,906 (243) 60 131

Total comprehensive incomeattributable to:

Owners of the Company 1,154 1,773 (273) 30 131Non-controlling interests 275 133 30 30 –

1,429 1,906 (243) 60 131


– I-4 –

CONSOLIDATED STATEMENTS OF FINANCIAL POSITION


31 March2016 2017 2018 2019

Notes SGD’000 SGD’000 SGD’000 SGD’000

ASSETS AND LIABILITIES

Non-current assetsProperty, plant and equipment 15(a) 6,956 12,257 10,269 359Right-of-use assets 15(b) – – – 12,301Deposits 17 249 249 263 263

Total non-current assets 7,205 12,506 10,532 12,923

Current assetsInventories 16 1,188 1,408 1,014 1,001Trade and other receivables 17 2,839 4,501 5,176 5,375Tax recoverable 65 – – –Cash and cash equivalents 18 1,810 4,071 3,031 2,681

Total current assets 5,902 9,980 9,221 9,057

Current liabilitiesTrade and other payables 19 5,085 5,825 3,906 3,705Lease liabilities 15(b) – – – 3,783Borrowings 20 – 101 164 165Finance lease obligations 21 1,050 2,268 2,210 –Current tax liabilities 78 256 330 411

Total current liabilities 6,213 8,450 6,610 8,064

Net current (liabilities)/assets (311) 1,530 2,611 993

Total assets less current liabilities 6,894 14,036 13,143 13,916

Non-current liabilitiesOther payables 19 96 96 96 96Lease liabilities 15(b) – – – 5,358Borrowings 20 – 626 810 768Finance lease obligations 21 3,810 7,064 4,697 –Deferred tax liabilities 22 365 495 635 658

Total non-current liabilities 4,271 8,281 6,238 6,880

Net assets 2,623 5,755 6,905 7,036

EQUITYShare capital 23 – – 17 17Reserves 24 2,311 5,476 6,888 7,019

Equity attributable to owners ofthe Company 2,311 5,476 6,905 7,036

Non-controlling interests 25 312 279 – –

Total equity 2,623 5,755 6,905 7,036


– I-5 –

STATEMENT OF FINANCIAL POSITION OF THE COMPANY

As at31 December

2018 and31 March

2019Notes SGD’000

ASSETS AND LIABILITIES

Non-current assetsInvestment in subsidiaries 5,212Amount due from a subsidiary 1,693

Net assets 6,905

EQUITYShare capital 23 17Merger reserve 24 5,195Share premium 24 1,693

Total equity 6,905


– I-6 –

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

Total equity attributable to owners of the Company

Share capitalShare

premiumMergerreserve Other reserve

Convertibleloans equity

reserveRetainedearnings Total

Non-controlling

interestsTotalequity

SGD’000 SGD’000 SGD’000 SGD’000 SGD’000 SGD’000 SGD’000 SGD’000 SGD’000(Note 23) (Note 24) (Note 24) (Note 24) (Note 20(ii))

Balance as at 1 January 2016 – – – 1,070 – 199 1,269 75 1,344

Profit and total comprehensiveincome for the year – – – – – 1,154 1,154 275 1,429

Effect of acquiring part ofnon-controlling interestsin a subsidiary (Note 25) – – – (150) – – (150) – (150)

Effect of disposing part ofnon-controlling interests ina subsidiary (Note 25) – – – 38 – – 38 – 38

Dividends (Note 13) – – – – – – – (38) (38)

Balance as at 31 December 2016and 1 January 2017 – – – 958 – 1,353 2,311 312 2,623

Profit and total comprehensiveincome for the year – – – – – 1,773 1,773 133 1,906

Issue of convertible loans(Note 20(ii)) – – – – 176 – 176 – 176

Conversion of convertibleloans (Note 24) – – – 1,575 (176) – 1,399 – 1,399

Issue of shares for acquisition ofsubsidiaries (Note 24) – – – 17 – – 17 – 17

Dividends (Note 13) – – – – – (200) (200) (166) (366)

Balance as at 31 December 2017and 1 January 2018 – – – 2,550 – 2,926 5,476 279 5,755

(Loss)/Profit and total comprehensiveincome for the year – – – – – (273) (273) 30 (243)

Effect of acquiring part ofnon-controlling interests ina subsidiary (Note 25) – – – 9 – – 9 (309) (300)

Issue of shares upon groupreorganisation (Note 23(c)) 17 – 2,645 (2,662) – – – – –

Capital injection (Note 23(b)) –# 1,693 – – – – 1,693 – 1,693

Balance as at 31 December 2018and 1 January 2019 17 1,693 2,645 (103) – 2,653 6,905 – 6,905

Profit and total comprehensiveincome for the period – – – – – 131 131 – 131

Balance as at 31 March 2019 17 1,693 2,645 (103) – 2,784 7,036 – 7,036

# Represents amount less than SGD1,000


– I-7 –

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

Total equity attributable to owners of the Company

Share capitalShare

premiumMergerreserve Other reserve

Convertibleloans equity

reserveRetainedearnings Total

Non-controlling

interestsTotalequity

SGD’000 SGD’000 SGD’000 SGD’000 SGD’000 SGD’000 SGD’000 SGD’000 SGD’000(Note 23) (Note 24) (Note 24) (Note 24) (Note 20(ii))

(Unaudited)Balance as at 1 January 2018 – – – 2,550 – 2,926 5,476 279 5,755Profit and total comprehensive

income for the period – – – – – 30 30 30 60Capital injection (Note 23(b)) –

# 1,693 – – – – 1,693 – 1,693

Balance as at 31 March 2018 –# 1,693 – 2,550 – 2,956 7,199 309 7,508



– I-8 –

CONSOLIDATED STATEMENTS OF CASH FLOWS


31 March2016 2017 2018 2018 2019

SGD’000 SGD’000 SGD’000 SGD’000 SGD’000(unaudited)

Cash flows from operating activitiesProfit before income tax expense 1,911 2,224 93 100 250Adjustments for:

Depreciation of property, plant andequipment 1,302 1,862 1,930 479 97

Depreciation of right-of-use assets – – – – 779Loss on disposal/write off of property, plant

and equipment 8 4 47 – –

Bad debts written off – 54 – – –

Impairment of trade receivables 27 115 93 27 19Write off of inventories – 72 – – –

Reversal of impairment of trade receivables (165) – (16) – (18)Interest expenses 102 308 328 86 103

Operating profit before working capitalchanges 3,185 4,639 2,475 692 1,230(Increase)/decrease in inventories (253) (292) 394 50 13Increase in trade and other receivables (969) (1,831) (766) (220) (200)Increase/(decrease) in trade and other

payables 924 757 (1,919) (1,402) (201)

Cash generated from/(used in) operations 2,887 3,273 184 (880) 842Income taxes paid (219) (56) (122) – (15)Income taxes refund – 111 – – –

Interest paid (102) (308) (328) (86) (10)

Net cash generated from/(used in) operatingactivities 2,566 3,020 (266) (966) 817

Cash flows from investing activitiesPurchase of property, plant and equipment (1,117) (1,182) (139) (8) (82)Proceeds from disposal of property,

plant and equipment 18 396 37 – –

Net cash used in investing activities (1,099) (786) (102) (8) (82)


– I-9 –

CONSOLIDATED STATEMENTS OF CASH FLOWS


31 March2016 2017 2018 2018 2019

Note SGD’000 SGD’000 SGD’000 SGD’000 SGD’000(unaudited)

Cash flows from financingactivities 32

Acquisition of non-controllinginterests in a subsidiary (112) – (300) – –

Dividends paid (38) (366) – – –

Proceeds from bank borrowings – 800 400 400 –

Repayment of bank borrowings – (73) (153) (22) (41)Proceeds from convertible loans – 1,575 – – –

Proceeds from issue of shares – – 1,693 1,693 –

Repayment of finance leaseobligations (626) (1,909) (2,312) (557) –

Capital element of lease liabilitiespaid – – – – (987)

Interest element of lease liabilitiespaid – – – – (57)

Net cash (used in)/generatedfrom financing activities (776) 27 (672) 1,514 (1,085)

Net increase/(decrease) in cashand cash equivalents 691 2,261 (1,040) 540 (350)

Cash and cash equivalents atbeginning of year/period 1,119 1,810 4,071 4,071 3,031

Cash and cash equivalents atend of year/period 1,810 4,071 3,031 4,611 2,681

Analysis of balances of cash andcash equivalents

Cash at banks and on hand 1,810 4,071 3,031 4,611 2,681


– I-10 –

II. NOTES TO THE FINANCIAL INFORMATION

1. General Information

The Company was incorporated as an exempted company in the Cayman Islands with limited liability on14 March 2018. The address of its registered office is Cricket Square, Hutchins Drive, P.O. Box 2681, GrandCayman, KY1-1111, the Cayman Islands. The principal place of business is located at 6 Kung Chong Road,Alexandra Industrial Estate, Singapore 159143.

Pursuant to a group reorganisation (the ‘‘Reorganisation’’) as detailed in the paragraph headed ‘‘History,Reorganisation and Corporate Structure – Reorganisation’’ in the Prospectus, the Company became the holdingcompany of the subsidiaries now comprising the Group. The Company has not carried on any business since thedate of its incorporation save for the Reorganisation.

The Group is principally engaged in provision of repair and maintenance of motor vehicles in Singapore.As at the date of this report, the particulars of the Company’s subsidiaries are as follows:

Name of subsidiary

Place and date of

incorporation and type of

legal entity

Place of

operations

Issued and

paid-up capital

Effective interest held

by the Company

Principal activitiesDirectly Indirectly

Optima International

Limited (‘‘Optima

International’’)

Incorporated in the British

Virgin Islands on

16 March 2018

The British Virgin

Islands

US$100 100% – Investment holding

Optima Werkz Pte. Ltd.

(‘‘Optima Werkz’’)

Incorporated in Singapore

on 18 May 2012

Singapore SGD2,662,472 – 100% Repair and maintenance

(including installation of

parts of accessories) and

spray printing of motor

vehicles

Optima De Auto Pte. Ltd.

(‘‘Optima De Auto’’)


on 22 August 2013

Singapore SGD10,000 – 100% Repair and maintenance


parts of accessories) and

spray printing of motor

vehicles

Optima Carz Pte. Ltd.

(‘‘Optima Carz’’) (Note)


on 24 October 2014

Singapore SGD1,000 – 100% Repair and maintenance


parts of accessories)

Optima Werkz International Pte.

Ltd. (formerly known as

Growth Dynamics Pte. Ltd.)

(‘‘Optima Werkz

International’’)


on 23 September 2015

Singapore SGD10,000 – 100% Retail sale of spare parts and

accessories of motor

vehicles

Note:

During the Track Record Period, the Group indirectly held 55% equity interests in Optima Carz and has further acquired theremaining 45% equity interests on 28 April 2018 (Note 25).


– I-11 –

All companies now comprising the Group have adopted 31 December as their financial year end date.

As at the date of this report, no audited financial statements have been prepared for the Company andOptima International as they are not subject to statutory audit requirements under the relevant jurisdictions.

The statutory financial statements of Optima Werkz, Optima De Auto, Optima Carz and Optima WerkzInternational for the year ended 31 December 2017 and 2018 were audited by BDO LLP, Public Accountants andChartered Accountants Singapore, and were prepared in accordance with the provisions of the Companies Act,Chapter 50 and Financial Reporting Standards in Singapore.

The statutory financial statements of Optima Werkz and Optima Carz for the year ended 31 December 2016were audited by Business Assurance, Public Accountants and Chartered Accountants Singapore, and wereprepared in accordance with the provisions of the Companies Act, Chapter 50 and Financial Reporting Standardsin Singapore. No statutory financial statements of Optima De Auto and Optima Werkz International for the yearended 31 December 2016 were prepared as they are not subject to statutory audit requirements under the relevantjurisdictions.

2. Reorganisation, Basis of Preparation and Presentation

Pursuant to the Reorganisation in preparation for the Listing and for the purpose of rationalising theGroup’s structure, the Company became the holding Company of the subsidiaries now comprising the Group.

The Group is regarded as a continuing entity resulting from the Reorganisation since the insertion of a newholding company at the top of Optima Werkz has not resulted in any change in economic substance and theacquisition of equity interests on Optima De Auto and Optima Werkz International involves businesscombination under common control. For the purpose of this report, the Historical Financial Information hasbeen prepared on a consolidated basis using the predecessor carrying amounts as if the Reorganisation had beencompleted at the beginning of the Track Record Period.

Upon the completion of the Reorganisation, the Company holds the entire equity interests, directly orindirectly, of companies comprising the Group. The Historical Financial Information of the Group for the TrackRecord Period has been prepared using the carrying amounts of the financial statements of the companies nowcomprising the Group.

The consolidated statements of profit or loss and other comprehensive income, consolidated statements ofchanges in equity and consolidated statements of cash flows of the Group for the Track Record Period includethe results and cash flows of the companies now comprising the Group as if the current group structure, after thecompletion of the Reorganisation, had been in existence throughout the Track Record Period, or since theirrespective dates of incorporation, whichever was shorter. The consolidated statements of financial position of theGroup as at 31 December 2016, 31 December 2017, 31 December 2018 and 31 March 2019 have been preparedto present the state of the affairs of the Group as if the current group structure, after the completion of theReorganisation, had been in existence as at the respective dates.

All significant intra-group transactions and balances have been eliminated on consolidation.

The Historical Financial Information has been prepared in accordance with the accounting policies set outin Note 4 which conforms with HKFRSs, which collective term includes Hong Kong Accounting Standards(‘‘HKASs’’) and related interpretations, promulgated by the HKICPA. In addition, the Historical FinancialInformation includes applicable disclosures requirement by the Rules Governing the Listing of Securities on TheStock Exchange of Hong Kong Limited (the ‘‘Listing Rules’’).


– I-12 –

All HKFRSs effective for the accounting period commencing from 1 January 2018, together with therelevant transitional provisions, have been adopted by the Group in the preparation of the Historical FinancialInformation throughout the Track Record Period.

For HKFRSs effective for the accounting period commencing from 1 January 2019, together with therelevant transitional provisions, have been adopted by the Group in the preparation of the Historical FinancialInformation on 1 January 2019.

The Historical Financial Information is presented in SGD. Items included in the financial information ofeach entity within the Group are measured using the currency that best reflects the economic substance of theunderlying events and circumstances relevant to that entity (the ‘‘functional currency’’). The functionalcurrency of the Company is SGD. The companies comprising the Group are operating in Singapore and SGD isused as the presentation currency of the Group.

The Historical Financial Information is prepared on the historical cost basis.

It should be noted that accounting estimates and assumptions are used in preparation of the HistoricalFinancial Information. Although these estimates are based on management’s best knowledge and judgment ofcurrent events and actions, actual results may ultimately differ from those estimates and assumptions. The areasinvolving a higher degree of judgment or complexity, or areas where assumptions and estimates are significant tothe Historical Financial Information are disclosed in Note 5.

3. New or Revised HKFRSs

(a) Adoption of new or revised HKFRSs

The Group has applied the following standards that are effective for the accounting periodcommencing from 1 January 2019 and was adopted on 1 January 2019:

Amendments to HKFRS 9 Prepayment Features with Negative CompensationHKFRS 16 LeasesAmendments to HKAS 28 Long-term Interests in Associates and Joint VentureHK(IFRIC)–Int 23 Uncertainty over Income Tax TreatmentsAnnual Improvements to HKFRSs2015-2017 Cycle

Amendments to HKFRS 3 ‘‘Business Combinations’’

Annual Improvements to HKFRSs2015-2017 Cycle

Amendments to HKFRS 11 ‘‘Joint Arrangements’’


Amendments to HKAS 12 ‘‘Income Taxes’’


Amendments to HKAS 23 ‘‘Borrowing Costs’’


– I-13 –

HKFRS 16 – Leases

HKFRS 16 supersedes HKAS 17 ‘‘Leases’’, HK(IFRIC)-Int 4 ‘‘Determining whether anArrangement contains a Lease’’, HK(SIC)-Int 15 ‘‘Operating Leases – Incentives’’ and HK(SIC)-Int27 ‘‘Evaluating the Substance of Transactions Involving the Legal Form of a Lease’’. The standardsets out the principles for the recognition, measurement, presentation and disclosure of leases andrequires lessees to account for all leases under a single on-balance sheet model. Lessor accountingunder HKFRS 16 is substantially unchanged under HKAS 17. Lessors will continue to classify leasesas either operating or finance leases using similar principles as in HKAS 17. Therefore, HKFRS 16did not have an impact for leases where the Group is the lessor.

The Group adopted HKFRS 16 using the modified retrospective method of adoption with thedate of initial application of 1 January 2019. Under this method, the standard is appliedretrospectively with the cumulative effect of initially applying the standard recognised at the date ofinitial application. The Group elected to use the transition practical expedient allowing the standard tobe applied only to contracts that were previously identified as leases applying HKAS 17 andHK(IFRIC)-Int 4 at the date of initial application. The Group also elected to use the recognitionexemptions for lease contracts that, at the commencement date, have a lease term of 12 months or lessand do not contain a purchase option (‘‘short-term leases’’), and lease contracts for which theunderlying asset is of low value (‘‘low-value assets’’).

The effect of adoption of HKFRS 16 as at 1 January 2019 (increase/(decrease)) is as follows:

SGD’000

AssetsRight-of-use assets 13,080Property, plant and equipment (9,895)

Total assets 3,185

LiabilitiesLease liabilities 10,092Finance lease obligations (6,907)

Total liabilities 3,185

Total adjustment on equity:Retained earnings –

Non-controlling interests –

–


– I-14 –

Nature of the effect of adoption of HKFRS 16

The Group has lease contracts for various items of property, plant and equipment. Before theadoption of HKFRS 16, the Group classified each of its leases (as lessee) at the inception date aseither a finance lease or an operating lease. A lease was classified as a finance lease if it transferredsubstantially all of the risks and rewards incidental to ownership of the leased asset to the Group;otherwise it was classified as an operating lease. Finance leases were capitalised at thecommencement of the lease at the inception date fair value of the leased property or, if lower, at thepresent value of the minimum lease payments. Lease payments were apportioned between interest(recognised as finance costs) and reduction of the lease liability. In an operating lease, the leasedproperty was not capitalised and the lease payments were recognised as rent expense in profit or losson a straight-line basis over the lease term. Any prepaid rent and accrued rent were recognised under‘‘Prepayments’’ and ‘‘Trade and other payables’’, respectively.

Upon adoption of HKFRS 16, the Group applied a single recognition and measurement approachfor all leases, except for short-term leases and leases of low-value assets. The standard providesspecific transition requirements and practical expedients, which has been applied by the Group.

Leases previously classified as finance leases

The Group did not change the initial carrying amounts of recognised assets and liabilities at thedate of initial application for leases previously classified as finance leases (i.e. the right-of-use assetsand lease liabilities equal the lease assets and liabilities recognised under HKAS 17). Therequirements of HKFRS 16 was applied to these leases from 1 January 2019.

Leases previously accounted for as operating leases

The Group recognised right-of-use assets and lease liabilities for those leases previouslyclassified as operating leases, except for short-term leases and leases of low-value assets. The right-of-use assets for most leases were recognised based on the carrying amount as if the standard hadalways been applied, apart from the use of incremental borrowing rate at the date of initialapplication. In some leases, the right-of-use assets were recognised based on the amount equal to thelease liabilities, adjusted for any related prepaid and accrued lease payments previously recognised.Lease liabilities were recognised based on the present value of the remaining lease payments,discounted using the incremental borrowing rate at the date of initial application.

The Group also applied the available practical expedients wherein it:

– used a single discount rate to a portfolio of leases with reasonably similar characteristics;

– applied the short-term leases exemptions to leases with lease term that ends within 12months at the date of initial application;

– excluded the initial direct costs from the measurement of the right-of-use asset at the dateof initial application;

– used hindsight in determining the lease term where the contract contains options to extendor terminate the lease.


– I-15 –

Based on the foregoing, as at 1 January 2019:

– Right-of-use assets of SGD13,080,000 were recognised and presented separately in theconsolidated statement of financial position. This includes the leased assets recognisedpreviously under finance leases of SGD9,895,000 that were reclassified from ‘‘Property,plant and equipment’’.

– Additional lease liabilities of SGD10,092,000 were recognised. This includes the leaseliabilities recognised previously under finance leases of SGD6,907,000 that werereclassified from ‘‘Finance lease obligations’’.

– No net effect of these adjustments had been adjusted to retained earnings and non-controlling interest.

The lease liabilities as at 1 January 2019 can be reconciled to the operating lease commitmentsas at 31 December 2018 as follows:

SGD’000

Operating lease commitments as at 31 December 2018 3,398Less: commitments relating to short-term leases (43)

3,355Less: total future interest expenses (170)

Present value of remaining lease payments, discounted using the incrementalborrowing rate as at 1 January 2019 3,185

Add: finance lease obligations recognised as at 31 December 2018 6,907

Total lease liabilities as at 1 January 2019 10,092

Summary of new accounting policies

Set out below are the new accounting policies of the Group upon adoption of HKFRS 16, whichhave been applied from the date of initial application:

Right-of-use assets

The Group recognises right-of-use assets at the commencement date of the lease (i.e. the datethe underlying asset is available for use). Right-of-use assets are measured at cost, less anyaccumulated depreciation and impairment losses, and adjusted for any remeasurement of leaseliabilities. The cost of right-of-use assets includes the amount of lease liabilities recognised, initialdirect costs incurred, and lease payments made at or before the commencement date less any leaseincentives received. Unless the Group is reasonably certain to obtain ownership of the leased asset atthe end of the lease term, the recognised right-of-use assets are depreciated on a straight-line basisover the shorter of its estimated useful life and the lease term. Right-of-use assets are subject toimpairment.


– I-16 –

Lease liabilities

At the commencement date of the lease, the Group recognises lease liabilities measured at thepresent value of lease payments to be made over the lease term. The lease payments include fixedpayments (including in-substance fixed payments) less any lease incentives receivable, variable leasepayments that depend on an index or a rate, and amounts expected to be paid under residual valueguarantees. The lease payments also include the exercise price of a purchase option reasonably certainto be exercised by the Group and payments of penalties for terminating a lease, if the lease termreflects the Group exercising the option to terminate. The variable lease payments that do not dependon an index or a rate are recognised as expense in the period on which the event or condition thattriggers the payment occurs.

In calculating the present value of lease payments, the Group uses the incremental borrowingrate at the lease commencement date if the interest rate implicit in the lease is not readilydeterminable. After the commencement date, the amount of lease liabilities is increased to reflect theaccretion of interest and reduced for the lease payments made. In addition, the carrying amount oflease liabilities is remeasured if there is a modification, a change in the lease term, a change in the in-substance fixed lease payments or a change in the assessment to purchase the underlying asset.

Short-term leases and leases of low-value assets

The Group applies the short-term lease recognition exemption to its short-term leases of leasedproperties for own use (i.e. those leases that have a lease term of 12 months or less from thecommencement date and do not contain a purchase option). It also applies the lease of low-valueassets recognition exemption to leases of assets that are considered of low value. Lease payments onshort-term leases and leases of low-value assets are recognised as expense on a straight-line basisover the lease term.

(b) New or revised HKFRSs issued but not yet effective

The following new or revised HKFRSs, potentially relevant to the Group, have been issued, but arenot yet effective and have not been early adopted by the Group in the preparation of the HistoricalFinancial Information.

HKFRS 17 Insurance Contracts4

Amendments to HKAS 1 and HKAS 8 Definition of Material1

Amendments to HKFRS 3 Definition of a Business2

Amendments to HKFRS 10 and HKAS 28 Sale or Contribution of Assets between anInvestor and its Associate or Joint Venture3

1 Effective for annual periods beginning on or after 1 January 2020.

2 Effective for business combinations where the acquisition date is on or after 1 January 2020.

3 The amendments were originally intended to be effective for periods beginning on or after 1 January 2016. The effectivedate has now been deferred/removed. Early application of the amendments continued to be permitted.

4 Effective for annual periods beginning on or after 1 January 2021.


– I-17 –

HKFRS 17 – Insurance Contracts

HKFRS 17 will replace HKFRS 4 as a single principle-based standard for the recognition,measurement, presentation and disclosure of insurance contracts in the financial statements of theissuers to those contracts.

Amendments to HKAS 1 and HKAS 8 – Definition of Material

The amendments clarify that information is material if omitting, misstating or obscuring it couldreasonably be expected to influence the decisions that the primary users of general purpose financialstatements make on the basis of those financial statements, which provide financial information abouta specific reporting entity.

Amendments to HKFRS 3 – Definition of a Business

The amendments clarify that a business is an integrated set of activities and assets that iscapable of being conducted and managed for the purpose of providing goods or services to customers,generating investment income (such as dividends or interests) or generating other income fromordinary activities. The amended definition emphasises that the output of a business is to providegoods and services to customers, whereas the previous definition focused on returns in the form ofdividends, lower costs or other economic benefits to investors and others.

Amendments to HKFRS 10 and HKAS 28 – Sale or Contribution of Assets between an Investor andits Associate or Joint Venture

The amendments clarify the extent of gains or losses to be recognised when an entity sells orcontributes assets to its associate or joint venture. When the transaction involves a business, the gainor loss is recognised in full; conversely when the transaction involves assets that do not constitute abusiness, the gain or loss is recognised only to the extent of the unrelated investors’ interests in thejoint venture or associate.

The Group has already commenced an assessment of the impact of adopting the above standardsand amendments to existing standards to the Group. Except for those disclosed above, the Group hasso far concluded that the application of these new pronouncements will have no material impact onthe Group’s financial statements.

4. Summary of Significant Accounting Policies

(a) Basis of consolidation and subsidiaries

The Historical Financial Information incorporates the financial statements of the Company and itssubsidiaries comprising the Group for the Track Record Period on a consolidated basis as further detailedin Note 2.

Intra-group balances, transactions and cash flows and any unrealised profits arising from intra-grouptransactions are eliminated in full in preparing the consolidated financial statements. Unrealised lossesresulting from intra-group transactions are eliminated in the same way as unrealised gains but only to theextent that there is no evidence of impairment.


– I-18 –

A subsidiary is an investee over which the Company is able to exercise control. The Companycontrols an investee if all three of the following elements are present: power over the investee, exposure orrights to variable returns from the investee, and the ability to use its power to affect those variable returns.Control is reassessed whenever facts and circumstances indicate that there may be a change in any of theseelements of control.

(b) Property, plant and equipment

Property, plant and equipment are stated at cost less accumulated depreciation and accumulatedimpairment losses, if any.

The cost of property, plant and equipment includes its purchase price and the costs directlyattributable to the acquisition of the items.

Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, asappropriate, only when it is probable that future economic benefits associated with the item will flow to theGroup and the cost of the item can be measured reliably. The carrying amount of the replaced part isderecognised. All other repairs and maintenance are recognised as expense in profit or loss during thereporting period in which they are incurred.

Property, plant and equipment are depreciated so as to write off their cost net of expected residualvalue over their estimated useful lives on a straight-line basis. The useful lives, residual value anddepreciation method are reviewed, and adjusted if appropriate, at the end of each reporting period. Theestimated useful lives are as follows:

Computer 3 yearsFurniture and fittings 3 yearsMachine equipment 10 yearsMotor vehicles 5 to 10 yearsOffice equipment 3 yearsLeasehold improvements 3 years

An asset is written down immediately to its recoverable amount if its carrying amount is higher thanthe asset’s estimated recoverable amount.

An item of property, plant and equipment is derecognised upon disposal or when no future economicbenefits are expected from the continued use of the asset.

The gain or loss on disposal of an item of property, plant and equipment is the difference between thenet sale proceeds and its carrying amount, and is recognised in profit or loss on disposal.

(c) Inventories

Inventories are initially recognised at cost, and subsequently at the lower of cost and net realisablevalue. Cost is determined on the actual basis and comprises invoiced value of purchases, freight and othercosts incurred in bringing the inventories to their present location and condition. Cost is calculated usingthe first-in-first-out method. Net realisable value represents the estimated selling price in the ordinarycourse of business less the estimated costs necessary to make the sale.


– I-19 –

(d) Financial instruments

(i) Financial assets

The Group classifies its financial assets in the following measurement categories: financialassets at fair value (either through other comprehensive income or through profit or loss); andfinancial assets at amortised cost. The classification is generally based on two criteria: the businessmodel under which the financial asset is managed and the contractual cash flow characteristic of thefinancial asset. Investments in financial assets are recognised on the date the Group commits topurchase the investments. A financial asset (unless it is a trade receivable without a significantfinancing component) is initially measured at fair value plus, for an item not at fair value throughprofit or loss, transaction costs that are directly attributable to its acquisition or issue. A tradereceivable without a significant financing component is initially measured at the transaction price.

Amortised cost

Subsequent to initial recognition, financial assets that are held within a business modelwhose objective is to hold the financial assets in order to collect contractual cash flows and thecontractual terms of the financial assets give rise on specified dates to cash flows that are solelypayments of principal and interest on the principal amount outstanding are measured atamortised cost using effective interest method. Interest income, foreign exchange gains andlosses and impairment are recognised in profit or loss.

(ii) Impairment loss on financial assets

The Group recognises loss allowances for expected credit loss (‘‘ECL’’) on the financial assetsmeasured at amortised cost. The Group measures loss allowances at an amount equal to lifetime ECL.For trade receivables, the Group applies the simplified approach to provide for expected credit lossesprescribed by HKFRS 9, which requires the use of the lifetime expected losses provision for all tradereceivables.

When determining whether the credit risk of a financial asset has increased significantly sinceinitial recognition and when estimating ECL, the Group considers reasonable and supportableinformation that is relevant and available without undue cost or effort. This includes both quantitativeand qualitative information and analysis, based on the Group’s historical experience and informedcredit assessment and including forward-looking information.

Lifetime ECLs are the ECLs that result from all possible default events over the expected life ofa financial instrument. The maximum period considered when estimating ECLs is the maximumcontractual period over which the Group is exposed to credit risk.

The Group assumes that the credit risk on a financial asset has increased significantly if it ismore than 30 days past due.

The Group considers a financial asset to be credit-impaired when: (1) the borrower is unlikely topay its credit obligations to the Group in full, without recourse by the Group to actions such asrealising security (if any is held); or (2) the financial asset is more than 90 days past due.

Interest income on credit-impaired financial assets is calculated based on the amortised cost (i.e.the gross carrying amount less loss allowance) of the financial asset. For non credit-impaired financialassets interest income is calculated based on the gross carrying amount.


– I-20 –

For trade receivables, lease receivables and contract assets, the Group applies a simplifiedapproach to measure the loss allowance at an amount equal to lifetime ECL. ECL on these financialassets are estimated using a provision matrix based on the Group’s historical credit loss experience,adjusted for factors that are specific to the debtors and an assessment of both the current and forecastgeneral economic conditions at the reporting date. For other debt financial assets, the Group measuresthe loss allowance either based on 12-month ECL or lifetime ECL, depending on whether there hasbeen a significant increase in credit risk since initial recognition. If a significant increase in creditrisk of receivables has occurred since initial recognition, loss allowance is measured based on lifetimeECL.

Measurement of ECLs

ECLs are a probability-weighted estimate of credit losses. Credit losses are measured asthe present value of all cash shortfalls (i.e. the difference between the cash flows due to theentity in accordance with the contract and the cash flows that the Group expects to receive).

Definition of default

The Group considers the following as constituting an event of default for internal creditrisk management purposes as historical experience indicates that receivables that meet either ofthe following criteria are generally not recoverable.

– when there is a breach of financial covenants by the counterparty; or

– information developed internally or obtained from external sources indicates that thedebtor is unlikely to pay its creditors, including the Group, in full (without takinginto account any collaterals held by the Group).

Credit-impaired financial assets

At each reporting date, the Group assesses on a forward looking basis whether financialassets carried at amortised cost are credit-impaired. A financial asset is ‘credit-impaired’ whenone or more events that have a detrimental impact on the estimated future cash flows of thefinancial asset have occurred.

Evidence that a financial asset is credit-impaired includes the following observable data:

– significant financial difficulty of the borrower or issuer;

– a breach of contract such as a default or past due event;

– it is becoming probable that the borrower will enter bankruptcy or other financialreorganisation; or the disappearance of an active market for a security because offinancial difficulties.

Presentation of allowance for ECL in the consolidated statements of financial position

Loss allowances for financial assets measured at amortised cost are deducted from thegross carrying amount of the assets.


– I-21 –

Write-off

The gross carrying amount of a financial asset is written off (either partially or in full) tothe extent that there is no realistic prospect of recovery. This is generally the case when theGroup determines that the debtor does not have assets or sources of income that could generatesufficient cash flows to repay the amounts subject to the write-off. However, financial assetsthat are written off could still be subject to enforcement activities in order to comply with theGroup’s procedures for recovery of amounts due.

(iii) Financial liabilities

The Group classifies its financial liabilities depending on the purpose for which the liabilitieswere incurred. Financial liabilities at amortised costs are initially measured at fair value, net ofdirectly attributable costs incurred.

Financial liabilities at amortised costs

Financial liabilities at amortised cost are initially measured at fair value, net of directlyattributable costs incurred, and are subsequently measured at amortised cost, using effectiveinterest method, unless the effect of discounting would be immaterial, in which case they arestated at cost. The related interest expense is recognised in profit or loss.

Gains or losses are recognised in profit or loss when the liabilities are derecognised aswell as through the amortisation process.

Convertible loans

Convertible loans received by the Group that contain both the liability and conversionoption components are classified separately into their respective items on initial recognition.Conversion option that will be settled by the exchange of a fixed amount of cash or anotherfinancial asset for a fixed number of the Company’s own equity instruments is classified as anequity instrument.

On initial recognition, the fair value of the liability component is determined using theprevailing market interest rate of similar non-convertible debts. The difference between theproceeds of the convertible loans and the fair value assigned to the liability component,representing the conversion option for the holder to convert the loans into equity, is included inequity (convertible loan equity reserve).

In subsequent periods, the liability component of the convertible loans is carried atamortised cost using effective interest method. The equity component, represented by the optionto convert the liability component into ordinary shares of the Company, will remain inconvertible loan equity reserve until the embedded option is exercised, in which case thebalance stated in convertible loan equity reserve will be transferred to share capital. Where theoption remains unexercised at the expiry dates, the balance stated in convertible loan equityreserve will be released to the retained earnings. No gain or loss is recognised upon conversionor expiration of the option.


– I-22 –

Transaction costs that relate to the convertible loans are allocated to the liability andequity components in proportion to the allocation of the proceeds. Transaction costs relating tothe equity component are charged directly to equity. Transaction costs relating to the liabilitycomponent are included in the carrying amount of the liability portion and amortised over theperiod of the convertible loans using effective interest method.

(iv) Effective interest method

The effective interest method is a method of calculating the amortised cost of a financial assetor financial liability and of allocating interest income or interest expense over the relevant period.The effective interest rate is the rate that exactly discounts estimated future cash receipts or paymentsthrough the expected life of the financial asset or liability, or where appropriate, a shorter period.

(v) Equity instruments

Equity instruments issued by the Company are recorded at the proceeds received, net of directissue costs.

(vi) Derecognition

The Group derecognises a financial asset when the contractual rights to the future cash flows inrelation to the financial asset expire or when the financial asset has been transferred and the transfermeets the criteria for derecognition in accordance with HKFRS 9.

Financial liabilities are derecognised when the obligation specified in the relevant contract isdischarged, cancelled or expires.

Where the Group issues its own equity instruments to a creditor to settle a financial liability inwhole or in part as a result of renegotiating the terms of that liability, the equity instruments issuedare the consideration paid and are recognised initially and measured at their fair value on the date thefinancial liability or part thereof is extinguished. If the fair value of the equity instruments issuedcannot be reliably measured, the equity instruments are measured to reflect the fair value of thefinancial liability extinguished. The difference between the carrying amount of the financial liabilityor part thereof extinguished and the consideration paid is recognised in profit or loss for the relevantperiod.

(vii) Contract assets and contract liabilities

A contract asset is recognised when the Group recognises revenue (see Note 4(m)) before beingunconditionally entitled to the consideration under the payment terms set out in the contract. Contractassets are assessed for ECL in accordance with the policy set out in Note (4(d)(ii)). Loss allowancefor contract assets is measured at an amount equal to lifetime ECL. ECL on contract assets areestimated using a provision matrix based on the Group’s historical credit loss experience, adjusted forfactors that are specific to the customers and an assessment of both the current and forecast generaleconomic conditions at the reporting date. Contract assets are reclassified to trade receivables whenthe right to the consideration has become unconditional.


– I-23 –

A contract liability is recognised when the customer pays consideration before the Grouprecognises the related revenue (see Note 4(m)). A contract liability would also be recognised if theGroup has an unconditional right to receive consideration before the Group recognises the relatedrevenue. In such cases, a corresponding receivable would also be recognised.

For a single contract with the customer, either a net contract asset or a net contract liability ispresented. For multiple contracts, contract assets and contract liabilities of unrelated contracts are notpresented on a net basis.

(e) Cash and cash equivalents

Cash and cash equivalents comprise cash on hand, demand deposits and short-term, highly liquidinvestments with original maturities of three months or less that are readily convertible into known amountof cash and which are subject to an insignificant risk of changes in value.

For the purpose of presentation in the consolidated statements of cash flows, cash and cashequivalents include bank overdrafts which are repayable on demand and form an integral part of theGroup’s cash management.

(f) Leases

Accounting policies applied until 31 December 2018

Leases are classified as finance leases whenever the terms of the lease transfer substantially allthe risks and rewards of ownership to lessee. All other leases are classified as operating leases.

The Group as lessor

Amounts due from lessees under finance leases are recorded as receivables at the amount of theGroup’s net investment in the leases. Finance lease income is allocated to accounting periods so as toreflect a constant periodic rate of return on the Group’s net investment outstanding in respect of theleases.

Rental income from operating leases is recognised in profit or loss on a straight-line basis overthe term of the relevant lease. Initial direct costs incurred in negotiating and arranging an operatinglease are added to the carrying amount of the leased asset and recognised as an expense on thestraight-line basis over the lease term.

The Group as lessee

Assets held under finance leases are initially recognised as assets at their fair value or, if lower,the present value of the minimum lease payments. The corresponding lease commitment is shown as aliability. Lease payments are analysed between capital and interest. The interest element is charged toprofit or loss over the period of the lease and is calculated so that it represents a constant proportionof the lease liability. The capital element reduces the balance owed to the lessor.

The total rentals payable under the operating leases are recognised in profit or loss on a straight-line basis over the lease term. Lease incentives received are recognised as an integrated part of thetotal rental expense, over the term of the lease.


– I-24 –

The land and buildings elements of property leases are considered separately for the purposes oflease classification.

Accounting policies applied from 1 January 2019

With effect of HKFRS 16 on 1 January 2019, the Group applied HKFRS 16 for accountingperiod beginning on 1 January 2019 with details set out in Note 3(a) under heading ‘‘HKFRS 16 –

Leases’’.

(g) Foreign currencies

Transactions entered into by the group entities in currencies other than the currency of the primaryeconomic environment in which they operate (the ‘‘functional currency’’) are recorded at the rates rulingwhen the transactions occur. Foreign currency monetary assets and liabilities are translated at the ratesruling at the end of each reporting period. Non-monetary items carried at fair value that are denominated inforeign currencies are retranslated at the rates prevailing on the date when the fair value was determined.Non-monetary items that are measured in terms of historical cost in a foreign currency are not retranslated.

Exchange differences arising on the settlement of monetary items, and on the translation of monetaryitems, are recognised in profit or loss in the period in which they arise. Exchange differences arising on theretranslation of non-monetary items carried at fair value are included in profit or loss for the period exceptfor differences arising on the retranslation of non-monetary items in respect of which gains and losses arerecognised in other comprehensive income, in which case, the exchange differences are also recognised inother comprehensive income.

(h) Employee benefits

(i) Short-term employee benefits

Short-term employee benefits are employee benefits (other than termination benefits) that areexpected to be settled wholly before twelve months after the end of the annual reporting period inwhich the employees render the related service. Short-term employee benefits are recognised in theyear when the employees render the related service.

(ii) Defined contribution retirement plan

Contributions to defined contribution retirement plans are recognised as an expense in profit orloss when the services are rendered by the employees. Defined contribution retirement plans are post-employment benefit plans under which the Group pays fixed contributions into separate entities suchas the Central Provident Fund on a mandatory, contractual or voluntary basis. The Group has nofurther payment obligations once the contributions have been paid.

(iii) Termination benefits

Termination benefits are recognised on the earlier of when the Group can no longer withdrawthe offer of those benefits and when the Group recognises restructuring costs involving the paymentof termination benefits.


– I-25 –

(i) Provisions and contingent liabilities

Provisions are recognised for liabilities of uncertain timing or amount when the Group has a legal orconstructive obligation arising as a result of a past event, which it is probable will result in an outflow ofeconomic benefits that can be reliably estimated.

Where it is not probable that an outflow of economic benefits will be required, or the amount cannotbe estimated reliably, the obligation is disclosed as a contingent liability, unless the probability of outflowof economic benefits is remote. Possible obligations, the existence of which will only be confirmed by theoccurrence or non-occurrence of one or more future events, are also disclosed as contingent liabilitiesunless the probability of outflow of economic benefits is remote.

(j) Impairment of assets (other than financial assets)

At the end of each reporting period, the Group reviews the carrying amounts of its property, plant andequipment and investment in subsidiaries to determine whether there is any indication that those assetshave suffered an impairment loss or an impairment loss previously recognised no longer exists or may havedecreased.

If the recoverable amount (i.e. the greater of the fair value less costs of disposal and value in use) ofan asset is estimated to be less than its carrying amount, the carrying amount of the asset is reduced to itsrecoverable amount. An impairment loss is recognised as an expense immediately.

Where an impairment loss subsequently reverses, the carrying amount of the asset is increased to therevised estimate of its recoverable amount, to the extent that the increased carrying amount does not exceedthe carrying amount that would have been determined had no impairment loss been recognised for the assetin prior years. A reversal of an impairment loss is recognised as income immediately.

(k) Government grants

Government grants receivable are recognised as income over the periods necessary to match themwith related costs which they are intended to compensate, on a systematic basis. Government grantsrelating to expenses are shown separately as other income.

(l) Borrowing costs

Borrowing costs attributable directly to the acquisition, construction or production of qualifying assetswhich require a substantial period of time to be ready for their intended use or sale, are capitalised as partof the cost of those assets. Income earned on temporary investments of specific borrowings pending theirexpenditure on those assets is deducted from borrowing costs capitalised. All other borrowing costs arerecognised in profit or loss in the period in which they are incurred.


– I-26 –

(m) Revenue recognition

Revenue is recognised to depict the transfer of promised goods or services to customers in an amountthat reflects the consideration to which the Group expects to be entitled in exchange for those goods orservices. Specifically, the Group uses a 5-step approach to revenue recognition.

• Step 1: Identify the contract(s) with a customer

• Step 2: Identify the performance obligations in the contract

• Step 3: Determine the transaction price

• Step 4: Allocate the transaction price to the performance obligations in the contract

• Step 5: Recognise revenue when (or as) the Group satisfies a performance obligation

The Group recognises revenue when (or as) a performance obligation is satisfied (i.e. when control ofthe goods or services underlying in particular performance obligation is transferred to customers).

Control of the goods or services may be transferred over time or at a point in time. Control of theservices is transferred over time if:

• the customer simultaneously receives and consumes the benefits provided by the Group’sperformance as the Group performs;

• the Group’s performance creates and enhances an asset that the customer controls as the Groupperforms; or

• the Group’s performance does not create an asset with an alternative use to the Group and theGroup has an enforceable right to payment for performance completed to date.

If control of the goods or services transfers over time, revenue is recognised over the period of thecontract by reference to progress towards complete satisfaction of that performance obligation. Otherwise,revenue is recognised at a point in time when the customer obtains control of the goods or services.

Where the contract contains a financing component which provides a significant financing benefit tothe customer for more than 12 months, revenue is measured at the present value of the amount receivable,discounted using the discount rate that would be reflected in a separate financing transaction with thecustomer, and interest income is accrued separately under effective interest method. Where the contractcontains a financing component which provides a significant financing benefit to the group, revenuerecognised under that contract includes the interest expense accreted on the contract liability undereffective interest method. The Group takes advantage of the practical expedient in paragraph 63 of HKFRS15 and does not adjust the consideration for any effects of a significant financing component if the periodof financing is 12 months or less.


– I-27 –

The likelihood of the Group earning contractual bonuses for early completion or suffering contractualpenalties for late completion are taken into account in making estimates, such that revenue is onlyrecognised to the extent that it is highly probable that a significant reversal in the amount of cumulativerevenue recognised will not occur.

(i) Service income from the provision of repair and maintenance of motor vehicles is recognisedover time as the Group satisfies its performance obligation.

(ii) Rental income under operating leases is recognised on a straight-line basis over the term of therelevant lease (Note 4(f)).

(iii) Warranty income under the Group’s own warranty programme is recognised as revenue over thewarranty period on a straight-line basis. For the warranty programme entered into by a customerwith an insurance company of which the Group is the designated service workshop, the warrantyincome is recognised over time as the Group satisfies its performance obligation.

(iv) Income from automotive supply business is recognised when the control of the goods istransferred to customers, being when the products are accepted by the customers. There was nounfulfilled obligation that could affect the customers’ acceptance of the products. Fee incomefor licensing computer software inbuilt in the automotive equipment is recognised when thecontrol of the goods is transferred to customers.

(n) Income taxes

Income taxes comprise current tax and deferred tax.

Current tax is based on profit or loss from ordinary activities adjusted for items that are non-assessable or disallowable for income tax purposes and is calculated using tax rates that have been enactedor substantively enacted at the end of the reporting period.

Deferred tax is recognised in respect of temporary differences between the carrying amounts of assetsand liabilities for financial reporting purposes and the corresponding amounts used for tax purposes. Exceptfor recognised assets and liabilities that affect neither accounting nor taxable profits, deferred tax liabilitiesare recognised for all taxable temporary differences. Deferred tax assets are recognised to the extent that itis probable that taxable profits will be available against which deductible temporary differences can beutilised. Deferred tax is measured at the tax rates appropriate to the expected manner in which the carryingamount of the asset or liability is realised or settled and that have been enacted or substantively enacted atthe end of the reporting period.

Income taxes are recognised in profit or loss except when they relate to items recognised in othercomprehensive income in which case the taxes are also recognised in other comprehensive income or whenthey relate to items recognised directly in equity in which case the taxes are also recognised directly inequity.


– I-28 –

(o) Related parties

(a) A person or a close member of that person’s family is related to the Group if that person:

(i) has control or joint control over the Group;

(ii) has significant influence over the Group; or

(iii) is a member of key management personnel of the Group or the Company’s parent.

(b) An entity is related to the Group if any of the following conditions apply:

(i) The entity and the Group are members of the same group (which means that each parent,subsidiary and fellow subsidiary is related to the others).

(ii) One entity is an associate or joint venture of the other entity (or an associate or jointventure of a member of a group of which the other entity is a member).

(iii) Both entities are joint ventures of the same third party.

(iv) One entity is a joint venture of a third entity and the other entity is an associate of thethird entity.

(v) The entity is a post-employment benefit plan for the benefit of the employees of the Groupor an entity related to the Group.

(vi) The entity is controlled or jointly controlled by a person identified in (a).

(vii) A person identified in (a)(i) has significant influence over the entity or is a member of keymanagement personnel of the entity (or of a parent of the entity).

(viii) The entity, or any member of a group of which it is a part, provides key managementpersonnel services to the group or to the group’s parent.

Close members of the family of a person are those family members who may be expected toinfluence, or be influenced by, that person in their dealings with the entity and include:

(i) that person’s children and spouse or domestic partner;

(ii) children of that person’s spouse or domestic partner; and

(iii) dependents of that person or that person’s spouse or domestic partner.


– I-29 –

5. Critical Accounting Judgments and Key Sources of Estimation Uncertainty

In the application of the Group’s accounting policies, the directors are required to make judgments,estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent fromother sources. The estimates and associated assumptions are based on historical experience and other factors thatare considered to be relevant. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accountingestimates are recognised in the period in which the estimate is revised if the revision affects only that period orin the period of the revision and future periods if the revision affects both current and future periods.

(i) Useful lives of property, plant and equipment

The Group regularly reviews the estimated useful lives of property, plant and equipment based onfactors such as business plan and strategies, expected level of usage and future technological developments.Future results of operations could be materially affected by changes in these estimates brought about bychanges in the factors mentioned above. A reduction in the estimated useful lives of property, plant andequipment would increase the recorded depreciation and decrease the carrying amount of property, plantand equipment.

(ii) Impairment of trade and other receivables

Management determines impairment of trade and other receivables on a regular basis. A considerableamount of judgment is required in assessing the ultimate realisation of these receivables, including thecurrent creditworthiness and the past collection history of each debtor. If the financial conditions of itsdebtors were to deteriorate, resulting in an impairment of their ability to make payments, additionalimpairment may be required. Further information on the impairment of trade and other receivables isincluded in Note 17.

(iii) Impairment of assets

The Group conducts impairment reviews of assets when events or changes in circumstances indicatethat their carrying amounts may not be recoverable annually in accordance with relevant accountingstandards. Impairment loss is recognised when the carrying amount of an asset is lower than the greater ofthe fair value less costs of disposal and value in use. In determining the value in use, management assessesthe present value of the estimated future cash flows expected to arise from the continuing use of the assetand from its disposal at the end of its useful life. Estimates and judgments are applied in determining thesefuture cash flows and the discount rate.

(iv) Determining the method to estimate variable consideration and assessing the constraint for thewarranty income

Certain contracts for the warranty income include clauses might affect the amount of warranty incomerecognised that give rise to variable consideration. In estimating the variable consideration, the Group isrequired to use either the expected value method or the most likely amount method based on which methodbetter predicts the amount of consideration to which it will be entitled.


– I-30 –

The Group determined that the expected value method is the appropriate method to use in estimatingthe variable consideration for the warranty income, given the large number of warranty contracts that havesimilar characteristics. In estimating the variable consideration for the warranty income, the Group againdetermined that the expected value method is appropriate given the multiple volume thresholds achievable.

Before including any amount of warranty income in the transaction price, the Group considerswhether the amount of variable consideration is constrained. The Group determined that the estimates ofvariable consideration are not constrained based on historical experience, business forecast and the currenteconomic environment, as well as the uncertainty being resolved within a short period of time.

(v) Critical judgments in allocating the transaction price

Some automotive equipment supply contracts include an inbuilt computer software with a specifiedvalue. Because these contracts include multiple performance obligations, the transaction price must beallocated to the performance obligations on a relative standalone selling price basis.

Management estimates the standalone selling price at contracts inception based on observable pricesof the computer software and the equipment to be provided in similar circumstances to similar customers.If a discount is granted, it is allocated to both performance obligations based on their relative standaloneselling prices.

6. Segment Information

The executive directors of the Company, who are the chief operating decision-makers of the Group, reviewthe Group’s internal reporting in order to assess performance and allocate resources. Management has determinedthe operating segments based on reports reviewed by the executive directors of the Company that are used tomake strategic decisions.

The Group has three reportable segments. The segments are managed separately as each business offersdifferent services and requires different business strategies.

The following summary describes the operations in each of the Group’s reportable segments:

– After-market automotive services – inspection, maintenance and repair services

– Car rental services – provision of car rental services

– Automotive supply business – supply of passenger car spare parts, accessories and automotiveequipment

Segment performance is evaluated based on reportable segment profit or loss, which is a measure ofadjusted profit or loss before income tax. The adjusted profit or loss before income tax is measured consistentlywith the Group’s profit or loss before income tax except that unallocated income and gains, staff costs, financecosts, as well as corporate expenses are excluded from such measurement.


– I-31 –

Segment assets included all assets but excluded certain property, plant and equipment and right-of-useassets, as well as corporate assets unrelated to the business activities of any operating segment.

Segment liabilities included all liabilities but excluded current and deferred tax liabilities, certain leaseliabilities and corporate liabilities unrelated to the business activities of any operating segment.

As the directors consider the Group’s revenue (determined based on the location of customers) and resultsare all materially derived in Singapore and no material assets of the Group are located outside Singapore,geographical segment information is not considered necessary.

(a) Business segment

For the year ended 31 December 2016

After-market

automotiveservices

Car rentalservices

Automotivesupply

business TotalSGD’000 SGD’000 SGD’000 SGD’000

Segment revenueRevenue from external customers 15,119 618 598 16,335

Segment profit/(loss) 6,092 (270) 468 6,290

Other income and gains 742Unallocated staff costs (2,514)Unallocated corporate expenses (2,597)Unallocated finance costs (10)

Profit before income tax expense 1,911

Other segment informationUnallocated depreciation (26)Unallocated income tax (482)


– I-32 –


After-market

automotiveservices

Car rentalservices

Automotivesupply


Segment revenueRevenue from external customers 15,994 2,252 395 18,641

Segment profit 7,434 265 79 7,778


Profit before income tax expense 2,224



– I-33 –


After-market

automotiveservices

Car rentalservices

Automotivesupply


Segment revenueRevenue from external customers 14,253 2,454 1,278 17,985

Segment profit 6,908 220 799 7,927


Profit before income tax expense 93


For the three months ended 31 March 2019

After-market

automotiveservices

Car rentalservices

Automotivesupply



Segment profit 1,898 89 63 2,050

Other income and gains 87Unallocated staff costs (716)Unallocated corporate expenses (1,123)Unallocated finance costs (48)




– I-34 –

For the three months ended 31 March 2018 (unaudited)

After-market

automotiveservices

Car rentalservices

Automotivesupply



Segment profit 1,561 102 28 1,691

Other income and gains 64Unallocated staff costs (769)Unallocated corporate expenses (873)Unallocated finance costs (13)



There were no inter-segment transactions during the Track Record Period. Revenue fromexternal customers of after-market automotive services segment included service income and warrantyincome during the Track Record Period.

As at 31 December 2016

After-market

automotiveservices

Car rentalservices

Automotivesupply


Segment assets 4,189 6,020 – 10,209

Unallocated property,plant and equipment 73

Unallocated corporate assets 2,825

Total assets 13,107


– I-35 –

After-market

automotiveservices

Car rentalservices

Automotivesupply


Segment liabilities 1,433 4,886 – 6,319

Current tax liabilities 78Deferred tax liabilities 365Unallocated corporate liabilities 3,722



After-market

automotiveservices

Car rentalservices

Automotivesupply


Segment assets 5,658 11,681 – 17,339



Total assets 22,486

After-market

automotiveservices

Car rentalservices

Automotivesupply






– I-36 –


After-market

automotiveservices

Car rentalservices

Automotivesupply


Segment assets 4,452 10,481 – 14,933



Total assets 19,753

After-market

automotiveservices

Car rentalservices

Automotivesupply






– I-37 –

As at 31 March 2019

After-market

automotiveservices

Car rentalservices

Automotivesupply


Segment assets 4,491 10,248 – 14,739

Unallocated property, plant andequipment 66

Unallocated right-of-use assets 2,773Unallocated corporate assets 4,402

Total assets 21,980

After-market

automotiveservices

Car rentalservices

Automotivesupply



Current tax liabilities 411Deferred tax liabilities 658Unallocated lease liabilities 2,791Unallocated corporate liabilities 3,028


All assets are allocated to operating segments other than unallocated assets (mainly comprisingcertain property, plant and equipment and right-of-use assets, other receivables, tax recoverable andcash and cash equivalents).

All liabilities are allocated to operating segments other than unallocated liabilities (mainlycomprising current and deferred tax liabilities, certain lease liabilities and other payables).


– I-38 –

(b) Information about major customers

Revenue from major customers, each of them accounted for 10% or more of the Group’s revenue, areset out below:


31 March2016 2017 2018 2018 2019


Customer E N/A1 N/A1 2,025 492 499

Customer F N/A1 N/A1 N/A1 464 N/A1

1 The corresponding revenue did not contribute over 10% of the total revenue of the Group for theTrack Record Period.

7. Revenue

An analysis of revenue from the Group’s principal activities, which is also the Group’s turnover, is asfollows:


31 March2016 2017 2018 2018 2019


Revenue from contracts withcustomers within the scopeof HKFRS 15

Service income 13,871 14,892 12,743 3,058 3,102Warranty income 1,248 1,102 1,510 439 304Automotive supply income 598 395 1,278 140 317

Revenue from other sourcesCar rental income 618 2,252 2,454 648 634

16,335 18,641 17,985 4,285 4,357

Disaggregation by timing ofrevenue recognitionOver time 15,737 18,246 16,707 4,145 4,040Point in time 598 395 1,278 140 317

16,335 18,641 17,985 4,285 4,357


– I-39 –

(a) Contract assets

The Group has recognised the following revenue-related contract assets:


31 March2016 2017 2018 2019

SGD’000 SGD’000 SGD’000 SGD’000

Contract assets (Note 17) – – 288 332

Contract assets of the Group arise from the underlying services that have been provided buthave not been billed. The balance as at 31 December 2018 and 31 March 2019 represented theservices provided to customers but not yet billed under the Group’s after-market automotive servicebusiness.

The contract assets are transferred to trade receivables when the rights became unconditional.The typical payment terms which impact on the contract assets are the Group normally issue bill tocustomers for payment upon completion of the relevant services.

(b) Contract liabilities

The Group has recognised the following revenue-related contract liabilities:


31 March2016 2017 2018 2019

SGD’000 SGD’000 SGD’000 SGD’000

Contract liabilities (Note 19) 2,397 – – –

(i) Significant changes in contract liabilities

Contract liabilities of the Group arise from the advance payments made by customers while theunderlying services have not been provided. Balance as at 31 December 2016 mainly representedadvance payments received from customers under the Group’s own warranty programme that wastransferred to an independent third party effectively from 1 January 2017 and no contract liabilitieswere recognised by the Group since then.


– I-40 –

(ii) Revenue recognised in relation to contract liabilities

The following table shows how much of the revenue recognised in the current reporting periodrelates to carried-forward contract liabilities.


31 March2016 2017 2018 2018 2019


Revenue recognised that wasincluded in the balance ofcontract liabilities at thebeginning of the year/period

Warranty income 734 – – – –

(iii) Unsatisfied performance obligations

The Group recognised warranty income under the Group’s own warranty programme over timeas it satisfies the performance obligations until the warranty programme was transferred to anindependent third party effectively from 1 January 2017.

(iv) Assets recognised from incremental costs to obtain a contract

During the Track Record Period, there was no significant incremental costs to obtain a contract.

8. Other Net Income and Gains


31 March2016 2017 2018 2018 2019


Government grants 197 107 106 56 42COE encashment 150 45 – – –

Reversal of impairment of tradereceivables (Note 17) 165 – 16 – 18

Others 230 53 154 8 27

742 205 276 64 87


– I-41 –

9. Profit Before Income Tax Expense


31 March2016 2017 2018 2018 2019


Profit before income taxexpense is arrived at aftercharging:

Auditor’s remuneration 15 41 40 10 11Cost of inventories recognisedas expenses 6,462 6,124 5,279 1,420 1,172

Depreciation of property, plantand equipment– Direct depreciation

expenses 1,276 1,801 1,858 412 81– Indirect depreciation

expenses 26 61 72 67 16

– Total 1,302 1,862 1,930 479 97

Depreciation of right-of-useassets– Direct depreciation

expenses – – – – 364– Indirect depreciation

expenses – – – – 415

– Total – – – – 779

Employee benefit expenses(including directors’emoluments) (Note 12)– Salaries, allowances and

other benefits 4,003 4,580 4,307 1,153 1,111– Contributions to defined

contribution retirementplan 345 305 340 89 88

– Total 4,348 4,885 4,647 1,242 1,199


– I-42 –


31 March2016 2017 2018 2018 2019


– Direct employee benefitexpenses 1,834 2,049 1,887 473 483

– Indirect employee benefitexpenses 2,514 2,836 2,760 769 716

– Total 4,348 4,885 4,647 1,242 1,199

Impairment of trade receivables(Note 17) 27 115 93 27 19

Write off of inventories(Note 16) – 72 – – –

Bad debts written off (Note 17) – 54 – – –

Loss on disposal/write off ofproperty, plant and equipment 8 4 47 – –

Operating lease payments inrespect of leased premises 1,498 1,553 1,596 383 82


– I-43 –

10. Finance Costs


31 March2016 2017 2018 2018 2019


Interest element of finance leasepayments 94 279 283 76 –

Interest element of leaseliabilities – – – – 93

Interest on loans fromshareholders(Note 19(b)) 8 7 5 4 –

Interest on bank borrowings – 22 40 6 10

102 308 328 86 103

11. Income Tax Expense

The amounts of income tax in the consolidated statements of profit or loss and other comprehensive incomerepresent:


31 March2016 2017 2018 2018 2019


SingaporeCurrent tax– Current years/period 114 256 325 40 85– Under/(over) provision inrespect of prior years/periods 57 (68) (129) – 11

Deferred tax (Note 22)– Current years/periods 198 130 47 – 23– Under provision in respect ofprior years/periods 113 – 93 – –

482 318 336 40 119

Singapore profits tax is calculated at 17% on the estimated assessable profits arising in Singapore for theTrack Record Period.

Taxes on profits assessable elsewhere have been calculated at the rates prevailing in the relevantjurisdictions for the Track Record Period.


– I-44 –

The income tax expense for the Track Record Period can be reconciled to the profit before income taxexpense in the consolidated statements of profit or loss and other comprehensive income as follows:


31 March2016 2017 2018 2018 2019


Profit before income taxexpense 1,911 2,224 93 100 250

Tax calculated at the domestictax rates 325 378 16 17 43

Tax effect of expenses notdeductible for tax purposes 95 77 448 38 58

Tax effect of revenue nottaxable for tax purposes (25) (8) (34) – –

Under/(over) provision inrespect of prior years/periods 170 (68) (36) – 11

Tax rebates (91) (86) (53) (9) (5)Unused tax losses notrecognised 17 12 – – 10

Others (9) 13 (5) (6) 2

Income tax expense 482 318 336 40 119


– I-45 –

12. Directors’ Emoluments and Highest Paid Individuals

(a) Directors’ emoluments

The emoluments of each of the directors for the Track Record Period are set out below:

Fees

Salaries,allowancesand otherbenefits

Discretionarybonuses

Contributionsto defined

contributionretirement

plan TotalSGD’000 SGD’000 SGD’000 SGD’000 SGD’000

Year ended 31 December 2016

Executive directorsMr. Ang Lay Keong (Hong Liqiang) – 274 112 26 412Ms. Lim Li Ling (Lin Liling) – 104 25 19 148Ms. Tan Peck Luan (Chen Biluan) – – – – –

Independent non-executive directorsMr. Chu Kin Ming – – – – –

Mr. Tang Chi Chiu – – – – –

Ms. Liang Weizhang – – – – –

– 378 137 45 560

Fees







Executive directorsMr. Ang Lay Keong (Hong Liqiang) – 288 12 22 322Ms. Lim Li Ling (Lin Liling) – 114 19 18 151Ms. Tan Peck Luan (Chen Biluan) – 8 2 1 11




– 410 33 41 484


– I-46 –

Fees







Executive directorsMr. Ang Lay Keong (Hong Liqiang) 29 240 – 20 289Ms. Lim Li Ling (Lin Liling) – 114 – 15 129Ms. Tan Peck Luan (Chen Biluan) – 96 – 12 108




29 450 – 47 526

Fees






Three months ended 31 March2019

Executive directorsMr. Ang Lay Keong (Hong Liqiang) – 60 – 5 65Ms. Lim Li Ling (Lin Liling) – 28 – 4 32Ms. Tan Peck Luan (Chen Biluan) – 24 – 3 27




– 112 – 12 124


– I-47 –

Fees






Three months ended 31 March2018 (unaudited)

Executive directorsMr. Ang Lay Keong (Hong Liqiang) 29 60 3 5 97Ms. Lim Li Ling (Lin Liling) – 29 1 4 34Ms. Tan Peck Luan (Chen Biluan) – 24 1 3 28




29 113 5 12 159

During the Track Record Period, no emoluments were paid by the Group to the directors as aninducement to join or upon joining the Group or as compensation for loss of office. In addition, none of thedirectors waived or agreed to waive any emoluments during the Track Record Period.

(b) Five highest paid individuals

The five individuals whose emoluments were the highest in the Group included two directors, twodirectors, three directors, two directors and three directors for the years ended 31 December 2016, 2017and 2018 and three months ended 31 March 2018 and 2019 respectively, whose emoluments are reflectedin the analysis presented above. The emoluments payable to the remaining highest paid non-directorindividuals are as follows:


31 March2016 2017 2018 2018 2019


Salaries, allowances andother benefits 277 306 177 60 47

Discretionary bonus 58 48 – 1 –

Fees – – – 24 –

Contribution to definedcontribution retirementplan 46 46 26 7 7

381 400 203 92 54


– I-48 –

The emoluments of each of the above highest paid individuals were within the following bands:


31 March2016 2017 2018 2018 2019

Number ofindividuals





(unaudited)

Nil – HK$1,000,000 4 3 4 5 5HK$1,000,001 –

HK$1,500,000 1 2 1 – –

13. Dividends


31 March2016 2017 2018 2018 2019


Interim dividends declared andpaid in the years/periods 38 366 – – –

No dividend has been paid or declared by the Company since its date of incorporation.

No dividend has been paid or declared by the subsidiaries comprising the Group during the Track RecordPeriod except that prior to the Reorganisation:–

Optima Carz declared and paid interim dividends of SGD150 per share of a total of SGD150,000 ofwhich SGD112,000 was paid to Optima Werkz and SGD38,000 was paid to the non-controlling shareholderduring the year ended 31 December 2016; and declared and paid interim dividends of SGD220 per share ofa total of SGD220,000 of which SGD121,000 was paid to Optima Werkz and SGD99,000 was paid to thenon-controlling shareholder during the year ended 31 December 2017; and declared and paid interimdividends of SGD150 per share of a total of SGD150,000 of which SGD83,000 was paid to Optima Werkzand SGD67,000 was paid to the non-controlling shareholder during the year ended 31 December 2017.

Optima Werkz declared and paid interim dividends of SGD0.93 per share of a total of SGD200,000 tothe then shareholders of Optima Werkz during the year ended 31 December 2017.

14. Earnings Per Share

No earnings per share information is presented as its inclusion, for the purpose of this report, is notconsidered meaningful due to the Reorganisation and the preparation of the results for the Track Record Periodon a consolidated basis as disclosed in Note 2.


– I-49 –

15. (a) Property, Plant and Equipment

ComputerFurniture

and fittingsMachine

equipmentMotor

vehiclesOffice

equipmentLeasehold

improvements TotalSGD’000 SGD’000 SGD’000 SGD’000 SGD’000 SGD’000 SGD’000

Cost

At 1 January 2016 220 276 691 2,556 38 423 4,204Additions 158 17 156 4,606 33 248 5,218Disposals – – – (32) – – (32)

At 31 December 2016 and1 January 2017 378 293 847 7,130 71 671 9,390

Additions 38 1 89 7,403 2 30 7,563Disposals – – (101) (246) – – (347)Write off – – – (486) – – (486)


Additions 68 11 22 21 10 7 139Disposals – – – (225) – – (225)Write off (5) (5) (6) – (2) (16) (34)

At 31 December 2018 479 300 851 13,597 81 692 16,000Reclassification to right-of-use assets at

1 January 2019 – – – (13,111) – – (13,111)Additions 79 – 2 – 1 – 82

At 31 March 2019 558 300 853 486 82 692 2,971

Accumulated depreciation

At 1 January 2016 160 156 285 258 25 255 1,139Charge for the year 55 81 253 714 17 182 1,302Disposals – – – (7) – – (7)

At 31 December 2016 and1 January 2017 215 237 538 965 42 437 2,434

Charge for the year 63 46 208 1,406 16 123 1,862Disposals – – (56) (158) – – (214)Write off – – – (219) – – (219)


Charge for the year 99 20 100 1,579 16 116 1,930Disposals – – – (30) – – (30)Write off (3) (5) (6) – (2) (16) (32)

At 31 December 2018 374 298 784 3,543 72 660 5,731Reclassification to right-of-use assets at

1 January 2019 – – – (3,216) – – (3,216)Charge for the period 46 1 13 20 3 14 97

At 31 March 2019 420 299 797 347 75 674 2,612

Net carrying amountAt 31 December 2016 163 56 309 6,165 29 234 6,956

At 31 December 2017 138 11 145 11,807 15 141 12,257

At 31 December 2018 105 2 67 10,054 9 32 10,269

At 31 March 2019 138 1 56 139 7 18 359


– I-50 –

The carrying amount of the Group’s motor vehicles of SGD6,116,000, SGD11,719,000 and SGD9,895,000as at 31 December 2016, 31 December 2017 and 31 December 2018 respectively, are under finance leaseobligations (Note 21). With effect of HKFRS 16 on 1 January 2019, motor vehicles under finance leaseobligations with net carrying amount of SGD9,895,000 were reclassified as right-of-use assets (Note 15(b)) as at1 January 2019.

15. (b) Right-of-use assets and lease liabilities

Set out below, are the carrying amounts of the Group’s right-of-use assets and lease liabilities and themovements during the Track Record Period:

Right-of-use assetsLease

liabilities

Motorvehicles

Leasedproperties

for own useOther

equipment Total TotalSGD’000 SGD’000 SGD’000 SGD’000 SGD’000

As at 1 January 2016, 31December 2016, 1 January2017, 31 December 2017,1 January 2018 and31 December 2018 – – – – –

Effect of adoption of HKFRS16 as at 1 January 2019 9,895 3,185 – 13,080 10,092

Depreciation expenses (367) (412) – (779) –

Interest expenses – – – – 93Payments – – – – (1,044)

As at 31 March 2019 9,528 2,773 – 12,301 9,141

With effect of HKFRS 16 on 1 January 2019, motor vehicles with net carrying amount of SGD9,895,000were reclassified from property, plant and equipment as right-of-use assets. Additional right-of-use assets andlease liabilities of leased properties for own use with net carrying amount of SGD3,185,000 were recognised asat 1 January 2019. The Group recognised rent expenses from short-term leases of SGD58,000 in profit or lossfor the three months ended 31 March 2019.


– I-51 –

The remaining contractual maturities of the Group’s lease liabilities at the end of each of the Track RecordPeriod and at the date of transition to HKFRS 16 are as follows:

As at 31 March 2019 As at 1 January 2019Present

value of theminimum

leasepayments

Totalminimum

leasepayments

Presentvalue of the

minimumlease

payments

Totalminimum

leasepayments

SGD’000 SGD’000 SGD’000 SGD’000

Within 1 year 3,783 4,059 3,819 4,134

After 1 year but within 2 years 3,289 3,424 3,395 3,563After 2 years but within 5 years 2,069 2,107 2,878 2,938

9,141 9,590 10,092 10,635

Less: total future interest expense (449) (543)

Present value of lease liabilities 9,141 10,092

16. Inventories


31 March2016 2017 2018 2019

SGD’000 SGD’000 SGD’000 SGD’000

Parts and accessories 1,188 1,408 1,014 1,001

The cost of inventories recognised as expenses amounted to SGD6,462,000, SGD6,124,000, SGD5,279,000and SGD1,172,000 for the years ended 31 December 2016, 2017 and 2018 and three months ended 31 March2019 respectively. The Group has written off the carrying amounts of inventories of SGD72,000 in profit or lossduring the year ended 31 December 2017.


– I-52 –

17. Trade and Other Receivables


31 March2016 2017 2018 2019

SGD’000 SGD’000 SGD’000 SGD’000

Trade receivables 2,189 3,977 3,620 3,796Less: impairment loss (110) (193) (210) (211)

Trade receivables, net 2,079 3,784 3,410 3,585Contract assets (Note 7(a)) – – 288 332Deposits, prepayments and other receivables 1,009 966 1,741 1,721

3,088 4,750 5,439 5,638

Categorised as:Current portion 2,839 4,501 5,176 5,375Non-current portion 249 249 263 263

3,088 4,750 5,439 5,638

The fair values of trade and other receivables are considered by the directors not to be materially differentfrom their carrying amounts. The normal credit period granted to customers was ranged from 30 to 90 days as atthe end of each of the Track Record Period.

The ageing analysis of trade receivables, based on invoice date, as at the end of each of the Track RecordPeriod, is as follows:


31 March2016 2017 2018 2019

SGD’000 SGD’000 SGD’000 SGD’000

Within 30 days 949 2,273 988 89131 – 60 days 271 445 594 65961 – 90 days 81 316 450 30291 – 180 days 247 236 540 895181 – 365 days 218 226 394 466Over 365 days 313 288 444 372

2,079 3,784 3,410 3,585


– I-53 –

The ageing analysis of trade receivables, based on due date, as at the end of each of the Track RecordPeriod, is as follows:


31 March2016 2017 2018 2019

SGD’000 SGD’000 SGD’000 SGD’000

Neither past due nor impaired 477 783 893 435

Past due but not impairedLess than 60 days 783 1,955 858 1,38161 – 90 days 67 311 335 40491 – 180 days 230 221 496 553181 – 365 days 211 225 384 440Over 365 days 311 289 444 372

1,602 3,001 2,517 3,150

2,079 3,784 3,410 3,585

Trade receivables that were neither past due nor impaired related to a range of customers for whom therewas no recent history of default. Trade receivables that were past due but not impaired related to customers withlong business relationship. Based on past experience, management believes that no impairment allowance isnecessary as there has not been a significant change in credit quality and the balances are still considered fullyrecoverable. The Group did not hold any collateral in respect of these balances.

Movements in impairment loss recognised in respect of trade receivables are as follows:


31 March2016 2017 2018 2019

SGD’000 SGD’000 SGD’000 SGD’000

At beginning of year/period 248 110 193 210Allowance for impairment (Note 9) 27 115 93 19Reversal of impairment (Note 8) (165) – (16) (18)Write off against allowance – (32) (60) –

At end of year/period 110 193 210 211


– I-54 –

Impairment of trade receivables

As at 31 December 2016, 31 December 2017, 31 December 2018 and 31 March 2019, total allowanceof SGD51,000, SGD121,000, SGD98,000 and SGD117,000 was recognised as management considered therecoverability of balance was remote. For the remaining trade receivables, the Group applies the simplifiedapproach to provide for expected credit loss prescribed by HKFRS 9 and total allowance of SGD59,000,SGD72,000, SGD112,000 and SGD94,000 was made against the gross amount of trade receivables as at31 December 2016, 31 December 2017, 31 December 2018 and 31 March 2019 respectively. Total baddebts of SGD54,000 was written off directly to profit or loss for the year ended 31 December 2017 (Note9).

Included in other receivables represent an amount due from an executive director of the Companyamounted to SGD33,000 as at 31 December 2017. The amount was unsecured, interest-free and repayableon demand.

All contract assets and other receivables as at the end of each of the Track Record Period wereneither past due nor impaired.

18. Cash and Cash Equivalents


31 March2016 2017 2018 2019

SGD’000 SGD’000 SGD’000 SGD’000

Cash on hand 9 38 5 2Cash at bank 1,801 4,033 3,026 2,679

1,810 4,071 3,031 2,681

Cash at bank earns interest at floating rates based on daily bank balances and deposit rates.


– I-55 –

19. Trade and Other Payables


31 March2016 2017 2018 2019

SGD’000 SGD’000 SGD’000 SGD’000

Trade payables (Note (a)) 1,401 1,203 748 677Other payables, accruals and deposits received(Note (b)) 1,383 4,718 3,254 3,124

Contract liabilities (Note 7(b)) 2,397 – – –

5,181 5,921 4,002 3,801

Categorised as:Current portion 5,085 5,825 3,906 3,705Non-current portion 96 96 96 96

5,181 5,921 4,002 3,801

Notes:

(a) The credit period granted by suppliers is normally 30 to 60 days. The ageing analysis of trade payables, based on invoice date,as at the end of each of the Track Record Period is as follows:


31 March2016 2017 2018 2019

SGD’000 SGD’000 SGD’000 SGD’000

Within 30 days 536 460 362 33131 – 60 days 426 410 251 20161 – 90 days 233 187 121 132Over 90 days 206 146 14 13

1,401 1,203 748 677

(b) As at 31 December 2016 and 31 December 2017, included in other payables representing loans from shareholders ofSGD350,000 and SGD150,000 respectively. The loans were unsecured, interest bearing at 2.5% and 6.5%, 2.5% and 6.5% perannum and repayable on demand as at 31 December 2016 and 31 December 2017 respectively. The loans were fully repaidduring the Track Record Period.


– I-56 –

20. Borrowings

(i) Bank borrowings


31 March2016 2017 2018 2019

SGD’000 SGD’000 SGD’000 SGD’000

Secured and interest-bearing bankborrowings (Note (a))

– Bank loans due for repayment withinone year – 101 164 165

– Bank loans due for repayment after oneyear (Note (b)) – 626 810 768

– 727 974 933


31 March2016 2017 2018 2019

SGD’000 SGD’000 SGD’000 SGD’000

Categorised as:Current portion – 101 164 165Non-current portion – 626 810 768

– 727 974 933

Notes:

(a) Bank loans are interest bearing at floating rates. The interest rates of the Group’s bank loans as at 31 December 2017,31 December 2018 and 31 March 2019 granted under banking facilities ranged from 3.3% to 3.5%, 3.5% to 4.1% and4.1% to 4.3% respectively per annum.

(b) As at the end of each of the Track Record Period, none of the portion of these bank loans due for repayment after oneyear which contain a repayment on demand clause and that are classified as current liabilities are expected to be settledwithin one year.

(c) As at 31 December 2017, 31 December 2018 and 31 March 2019, the Group’s banking facilities are secured by personalguarantee of an executive director of the Company and a second legal mortgage over a property of a shareholder.


– I-57 –

As at 31 December 2016, 31 December 2017, 31 December 2018 and 31 March 2019, the Group’sbank borrowings were scheduled to repay as at the end of each of the Track Record Period as follows:


31 March2016 2017 2018 2019

SGD’000 SGD’000 SGD’000 SGD’000

On demand or within one year – 101 164 165More than one year, but not exceedingtwo years – 105 171 172

More than two years, but not exceedingfive years – 340 556 564

More than five years – 181 83 32

– 727 974 933

(ii) Convertible loans

In early December 2017, Optima Werkz was granted convertible loans in the aggregate principalamounts of SGD1,575,000 with the right to convert such loans into an aggregate of 100,000 ordinaryshares of Optima Werkz at a conversion price of SGD15.75 per ordinary share of Optima Werkz upon andsubject to the terms of the agreements. These loans were non-interest bearing and shall become due andpayable on the date falling 48 months from the drawdown date. At initial recognition, a liability componentof SGD1,399,000 and equity component of SGD176,000 under convertible loans equity reserve wererecognised. In late December 2017, upon exercise of the conversion rights by the lenders, a total of100,000 ordinary shares of Optima Werkz were allotted and issued upon conversion of the convertibleloans of Optima Werkz, at a conversion price of SGD15.75 per share, amounting to SGD1,575,000.Accordingly, the liability component of SGD1,399,000 was derecognised and the equity component ofSGD176,000 under convertible loans equity reserve was recorded in other reserve of the Group uponconversion.


– I-58 –

21. Finance Lease Obligations

The Group leases its motor vehicles and these leases are classified as finance leases. The lease obligationsare secured by the underlying leased assets and personal guarantee of an executive director of the Companyduring the Track Record Period. The future lease payments under the finance leases are due as follows:

Minimumlease

payments Interest

Presentvalue of

minimumlease

paymentsSGD’000 SGD’000 SGD’000

As at 31 December 2016Not later than one year 1,189 (139) 1,050Later than one year but not later than five years 3,934 (220) 3,714More than five years 103 (7) 96

5,226 (366) 4,860

Minimumlease

payments Interest

Presentvalue of

minimumlease


As at 31 December 2017Not later than one year 2,540 (272) 2,268Later than one year but not later than five years 7,396 (393) 7,003More than five years 63 (2) 61

9,999 (667) 9,332

Minimumlease

payments Interest

Presentvalue of

minimumlease


As at 31 December 2018Not later than one year 2,403 (193) 2,210Later than one year but not later than five years 4,876 (179) 4,697

7,279 (372) 6,907


– I-59 –

Minimumlease

payments Interest

Presentvalue of

minimumlease


As at 31 March 2019Not later than one year – – –

Later than one year but not later than five years – – –

More than five years – – –

– – –

The present value of future lease payments is analysed as:


31 March2016 2017 2018 2019

SGD’000 SGD’000 SGD’000 SGD’000

Current liabilities 1,050 2,268 2,210 –

Non-current liabilities 3,810 7,064 4,697 –

4,860 9,332 6,907 –

With effect of HKFRS 16 on 1 January 2019, finance lease obligations with net carrying amount ofSGD6,907,000 was reclassified as lease liabilities as at 1 January 2019 (Note 15(b)).

22. Deferred Tax

The analysis of deferred tax is as follows:


31 March2016 2017 2018 2019

SGD’000 SGD’000 SGD’000 SGD’000

Deferred tax liabilities 365 495 635 658


– I-60 –

The above deferred tax balances are to be recovered or settled after twelve months. The movement ondeferred tax during the Track Record Period is as follows:

Acceleratedtax

depreciationSGD’000

At 1 January 2016 54Charged to profit or loss for the year (Note 11) 311

At 31 December 2016 and 1 January 2017 365Charged to profit or loss for the year (Note 11) 130

At 31 December 2017 and 1 January 2018 495Charged to profit or loss for the year (Note 11) 140

At 31 December 2018 and 1 January 2019 635Charged to profit or loss for the period (Note 11) 23

At 31 March 2019 658

23. Share Capital

Number Amount AmountHK$’000 SGD’000

Authorised:Ordinary shares of HK$0.01 eachUpon incorporation (Note (a)) 38,000,000 380 66

At 31 December 2018 38,000,000 380 66

Issued and fully paid:Ordinary shares of HK$0.01 eachUpon incorporation (Note (a)) 950,000 – –

Capital injection (Note (b)) 50,000 1 –#

Issue of shares upon group reorganisation (Note (c)) 9,000,000 99 17

At 31 December 2018, 1 January 2019 and 31 March 2019 10,000,000 100 17



– I-61 –

(a) The Company was incorporated in the Cayman Islands on 14 March 2018 with an authorised sharecapital of HK$380,000 divided into 38,000,000 ordinary shares of par value HK$0.01 each. On14 March 2018, one nil-paid ordinary share of HK$0.01 was allotted and issued to Sharon Pierson (anofficer of Conyers Trust Company (Cayman) Limited, the registered office provider of the Company),the initial subscriber, at par. On the same day, Sharon Pierson transferred the one subscriber share toRed Link International Limited that was owned by the controlling shareholders. On the same day, theCompany further allotted and issued 949,999 ordinary shares, all nil paid, to various shareholderspursuant to the Reorganisation.

(b) On 23 March 2018, the Company, an executive director of the Company (as warrantor) andAuspricious Profit International Limited (‘‘API’’), an independent third party, entered into a sharesubscription agreement, pursuant to which API conditionally agreed to subscribe for 50,000 ordinaryshares of the Company for a cash consideration of HK$10,000,000 (equivalent to SGD1,693,000). On29 March 2018, 50,000 ordinary shares of the Company was allotted and issued to API amounting toHK$500 (equivalent to SGD86) in share capital and HK$9,999,500 (equivalent to approximatelySGD1,693,000) in share premium.

(c) On 22 June 2018, pursuant to a share swap agreement, in consideration of and in exchange for theacquisition of the entire equity interest in Optima Werkz from the then shareholders of Optima Werkzby Optima International, the Company credited as fully-paid 950,000 nil-paid ordinary shares asmentioned in point (a) above and issued 8,550,000 ordinary shares and credited as fully-paid to thethen shareholders of Optima Werkz and for the purpose of anti-dilution in respect of API’sshareholding in the Company, issued 450,000 ordinary shares and credited as fully-paid to API.

Further details are set out in the section headed ‘‘Statutory and General Information’’ in Appendix IV tothe Prospectus.

24. Reserves

The following describes the nature and purpose of each reserve within owners’ equity:

Share premium

Share premium of the Company and the Group is the excess of the cash proceeds received over thenominal value of the ordinary shares of the Company issued at a premium, less the amount of expensesincurred in connection with the issue of the ordinary shares (Note 23(b)).

Merger reserve

Merger reserve of the Group represents the differences between the share capital of Optima Werkzand the nominal value of the ordinary shares issued by the Company in acquiring Optima Werkz (Note23(c)) upon the completion of the Reorganisation.

Merger reserve of the Company represents the differences between the carrying amount of the netassets of Optima Werkz and its subsidiaries and the nominal value of the ordinary shares issued by theCompany in acquiring Optima Werkz (Note 23(c)) upon the completion of the Reorganisation.


– I-62 –

Other reserve

Other reserve represents the share capital of Optima Werkz, Optima De Auto and Optima WerkzInternational as at 1 January 2016, 31 December 2016 and 1 January 2017 and the share capital of OptimaWerkz as at 31 December 2017. Other reserve during the Track Record Period and as at 31 December 2018and 31 March 2019 also included the difference between the consideration received/paid and the carryingamount of net assets attributable to the reduction/increase of equity interest in Optima Carz (Note 25).

On 18 October 2016, Optima Werkz acquired 20% of the issued share capital of Optima Carz and areduction of equity attributable to owners of the Company amounted to SGD150,000 was recorded in otherreserve. On 29 December 2016, Optima Werkz disposed 20% of the issued share capital of Optima Carzand an increase of equity attributable to owners of the Company amounted to SGD38,000 was recorded inother reserve.

In December 2017, a total of 100,000 ordinary shares of Optima Werkz were allocated and issuedupon conversion of convertible loans of Optima Werkz, at a conversion price of SGD15.75 per share,amounting to SGD1,575,000. The liability component of SGD1,399,000 was derecognised and the equitycomponent of SGD176,000 under convertible loans equity reserve was recorded in other reserve (Note20(ii)).

On 18 December 2017, a total of 84,946 ordinary shares of Optima Werkz were allotted and issuedamounting to SGD37,000 for the purpose acquiring the entire issued share capital of Optima De Auto andOptima Werkz International of a total of SGD20,000. The difference of SGD17,000 was recorded in otherreserve.

On 28 April 2018, the Group has acquired the remaining 45% equity interests in Optima Carz, anindirect non-wholly subsidiary of the Group, at a cash consideration of SGD300,000, which was determinedwith reference to the carrying amount of net assets of Optima Carz and an increase of equity attributable toowners of the Company amounted to SGD9,000 was recorded in other reserve. The Group had no non-controlling interests since then and as at 31 December 2018 and 31 March 2019.


– I-63 –

25. Non-controlling Interests

As at 31 December 2016 and 31 December 2017, the Group’s material non-controlling interests (‘‘NCI’’)are as follows:

Optima Carz was a 55% indirectly owned subsidiary of the Company. Summarised financial information inrelation to the post-acquisition NCI of Optima Carz, before inter-group eliminations, is presented below:


31 March2016 2017 2018 2018 2019


For the years/periods endedRevenue 3,230 2,722 803 653 N/A

Profit and total comprehensiveincome for the years/periods,before depreciation andimpairment (net of tax) 746 428 90 85 N/A

Profit and total comprehensiveincome for the years/periods,after depreciation andimpairment (net of tax) 613 295 67 67 N/A

Profit allocated to NCI 275 133 30 30 N/A

Dividend paid to NCI 38 166 – – N/A

For the years/periods ended31 December/31 March

Cash inflow/(outflow) fromoperating activities 779 343 (200) (9) N/A

Cash outflow from investingactivities (132) (68) – – N/A

Cash outflow from financingactivities (187) (424) (11) (8) N/A

Net cash inflow/(outflow) 460 (149) (211) (17) N/A


– I-64 –


31 March2016 2017 2018 2019

SGD’000 SGD’000 SGD’000 SGD’000

Current assets 1,102 988 N/A N/ANon-current assets 243 318 N/A N/ACurrent liabilities (613) (562) N/A N/ANon-current liabilities (38) (125) N/A N/A

Net assets 694 619 N/A N/A

Accumulated non-controlling interests 312 279 N/A N/A

On 18 October 2016, Optima Werkz acquired 20% of the issued share capital of Optima Carz and areduction of equity attributable to owners of the Company amounted to SGD150,000 was recorded in otherreserve. On 29 December 2016, Optima Werkz disposed 20% of the issued share capital of Optima Carz and anincrease of equity attributable to owners of the Company amounted to SGD38,000 was recorded in other reserve.

On 28 April 2018, the Group has acquired the remaining 45% equity interests in Optima Carz, at a cashconsideration of SGD300,000, which was determined with reference to the carrying amount of net assets ofOptima Carz and an increase of equity attributable to owners of the Company amounted to SGD9,000 wasrecorded in other reserve. The Group had no non-controlling interests since then and as at 31 December 2018and 31 March 2019.

26. Operating Lease Commitments

The Group as lessee

As at the end of each of the Track Record Period, the total future minimum lease payments of theGroup under non-cancellable operating leases in respect of land and buildings are as follows:


31 March2016 2017 2018 2019

SGD’000 SGD’000 SGD’000 SGD’000

Within one year 1,325 1,235 1,773 –

In the second to fifth years 1,799 683 1,625 –

3,124 1,918 3,398 –

The Group leased certain properties under operating leases in Singapore. The leases run for an initialperiod of one year to four years as at the end of each of the Track Record Period, with an option to renewthe lease and renegotiate the terms at the expiry date or at dates as mutually agreed between the Group andrespective landlords/lessors and do not include any terms of contingent rentals.


– I-65 –

The Group is the lessee in respect of properties for own use held under leases which were previouslyclassified as operating leases under HKAS 17. The Group has initially applied HKFRS 16 using themodified retrospective approach. Under this approach, the Group adjusted the opening balances at1 January 2019 to recognise lease liabilities relating to these leases (see Note 3(a)). From 1 January 2019onwards, future lease payments are recognised as lease liabilities in the consolidated statements of financialposition in accordance with the policies set out in Note 3(a).

The Group as lessor

Certain of the Group’s motor vehicles were leased to a number of customers. The rental incomeduring the years ended 31 December 2016, 2017 and 2018 and three months ended 31 March 2018 and2019 were SGD618,000, SGD2,252,000, SGD2,454,000, SGD648,000 and SGD634,000 respectively. As atthe end of each of the Track Record Period, the minimum rent receivables of the Group under non-cancellable operating leases in respect of motor vehicles are as follows:


31 March2016 2017 2018 2019

SGD’000 SGD’000 SGD’000 SGD’000

Within one year 2,421 2,305 2,097 2,149In the second to fifth years 4,457 3,347 2,130 1,887

6,878 5,652 4,227 4,036

27. Capital Commitments

As at the end of each of the Track Record Period, the Group did not have any significant capitalcommitments.

28. Related Party Transactions

(a) Significant related party transactions

Save as those disclosed elsewhere in this Historical Financial Information, the Group did not haveother significant transactions with related parties.

(b) Personal guarantee by a director

The Group’s bank borrowings and motor vehicles under finance lease were secured by way ofpersonal guarantee of an executive director of the Company.

(c) Compensation of key management

Remuneration of key management personnel, who are directors of the Company, during the TrackRecord Period were disclosed in Note 12.


– I-66 –

29. Major Non-cash Transactions

During the Track Record Period, the Group had the following major non-cash transactions:

During the year ended 31 December 2017, total 100,000 ordinary shares of Optima Werkz were allottedand issued upon conversion of convertible loans of Optima Werkz, at a conversion price of SGD15.75 per shareamounting to SGD1,575,000.

During the years ended 31 December 2016 and 2017, additions of property, plant and equipment amountingto SGD4,101,000 and SGD6,381,000 respectively represented motor vehicles acquired under finance leases andwere non-cash transactions.

During the year ended 31 December 2018, property, plant and equipment with net carrying amount ofSGD195,000 was disposed of at net loss amounting to SGD45,000 and was partly satisfied by cash proceeds ofSGD37,000 and derecognition of finance lease obligations of SGD113,000 and was a non-cash transaction.

30. Summary of Financial Assets and Financial Liabilities by Category

The following table shows the carrying amounts of financial assets and liabilities:


31 March2016 2017 2018 2019

SGD’000 SGD’000 SGD’000 SGD’000

Financial assetsFinancial assets at amortised cost (Note)– Trade and other receivables 3,088 4,750 4,055 4,217– Cash and cash equivalents 1,810 4,071 3,031 2,681

4,898 8,821 7,086 6,898

Financial liabilitiesFinancial liabilities at amortised cost (Note)– Trade and other payables 5,181 5,921 4,002 3,801– Bank borrowings – 727 974 933– Finance lease obligations 4,860 9,332 6,907 –

– Lease liabilities – – – 9,141

10,041 15,980 11,883 13,875

Note:

Above financial instruments which are measured at amortised costs are not measured at fair value. Due to the effective interest ratesapproximate the prevailing market interest rates, the carrying values of the above financial instruments approximate their fair values.


– I-67 –

31. Financial Risk Management and Capital Management

The Group is exposed to a variety of financial risks which comprise credit risk, interest rate risk andliquidity risk. The Group’s overall risk management focuses on the unpredictability of financial markets and seekto minimise potential adverse effects on the Group’s financial performance. Risk management is carried out bythe key management under the policies approved by the board of directors. The Group does not have written riskmanagement policies. However, the directors meet regularly to identify and evaluate risks and to formulatestrategies to manage financial risks.

Generally, the Group employs a conservative strategy regarding its financial risk management. As thedirectors consider that the Group’s exposure to financial risk is kept at a minimum level, the Group has not usedany derivatives or other instruments for hedging purposes. The most significant risks to which the Group isexposed to are described below:

(a) Credit risk

Credit risk refers to the risk that the counterparty to a financial instrument would fail to discharge itsobligation under the terms of the financial instrument and cause a financial loss to the Group.

The Group’s credit risk is primarily attributable to its trade and other receivables and bank balances.Management has a credit policy in place and the exposures to credit risk are monitored on an ongoingbasis.

The Group always measures the loss allowance for trade receivables at an amount equal to lifetimeexpected credit losses. The expected credit losses on trade receivables are estimated using a provisionmatrix by reference to past default experience of the debtor, current market condition in relation to eachdebtor’s exposure. The expected credit losses also incorporate forward-looking information with referenceto general macroeconomic conditions that may affect the ability of the debtors to settle receivables. TheGroup recognises lifetime expected credit losses for trade receivables based on individual significantcustomer or the ageing of customers collectively that are not individually significant. Trade receivables arenormally due ranged from 30 to 90 days. Normally, the Group does not obtain collateral from customers.

The Group applies the simplified approach to providing for ECL prescribed by HKFRS 9, whichpermits the use of lifetime expected loss provision for all trade receivables. To measure the ECL, tradereceivables are grouped based on shared credit risk characteristics and the days past due. Expected loss rateof current trade receivables is assessed to be 0.1%. The ECL for trade receivables past due within 90 daysis assessed to be 1% and within 180 days is assessed to be 2%. For the trade receivables over 180 days andwithin 365 days, the ECL is assessed to be 5% and over 365 days is assessed to be 10%. The directors ofthe Company assessed and measured ECL based on reasonable and supportable information that is availablewithout undue cost or effort about past events, current conditions and forecasts of future economicconditions at each of the reporting dates during the Track Record Period. The directors assessed the risk orprobability that a credit loss will occur by grouping different debtors of similar risk characteristics andtaking into consideration the history of default that the amount of irrecoverable debts remained minimaland did not fluctuate significantly as at each reporting date of the Track Record Period. Moreover, theGroup’s operations are solely conducted in Singapore and there has not been any significant adverse eventswhich affected the economy of Singapore during the Track Record Period and it is expected that the futureeconomic conditions of Singapore will continue to remain steady. As a result, the directors of the Companyconsider that it is reasonable to apply the same ECL rates throughout the Track Record Period. The detailsof loss allowance for these balances as at the end of each of the Track Record Period is set out in Note 17.


– I-68 –

There is no significant change in the gross carrying amounts of trade receivables contributed to theincrease in the impairment allowance during the Track Record Period.

For the trade receivables considered by the management to have high concentration risk, the Grouphas assessed that the expected credit losses for these receivables are not material under the lifetimeexpected credit losses method.

Other financial assets at amortised cost include deposits and other receivables. As at the end of eachof the Track Record Period, the internal credit rating of other receivables were performing. The Group hasassessed that the expected credit losses for these receivables are not material under the lifetime expectedcredit losses method, as these financial assets are considered to have low credit risk. Thus, no lossallowance was recognised during the Track Record Period.

The Group’s exposure to credit risk is influenced mainly by the individual characteristics of eachcustomer. The default risk of the industry and country in which customers operate also has an influence oncredit risk but to a lesser extent. The concentration of credit risk due from the Group’s largest customer andfive largest customers are listed below:


2016 2017 2018 2019

SGD’000

% of total

trade

receivables SGD’000

% of total

trade


% of total

trade


% of total

trade

receivables

Largest customer 95 5% 516 14% 546 16% 714 20%

Five largest customers 304 15% 1,596 42% 1,913 56% 1,732 48%

In respect of bank balances, the credit risk is limited because majority of the deposits are placed withreputable financial institutions in Singapore.

The credit policies have been consistently applied during the Track Record Period and are consideredto be effective in managing the Group’s exposure.

(b) Interest rate risk

Interest rate risk relates to the risk that the fair value or cash flows of a financial instrument willfluctuate because of changes in market interest rate. The Group’s interest rate risk mainly arises from bankborrowings, finance lease obligations and loans from shareholders. Borrowings arranged at variable ratesexpose the Group to cash flow interest rate risk.

All of the Group’s bank borrowings as at 31 December 2016, 31 December 2017, 31 December 2018and 31 March 2019 bore interest at floating rates whereas its finance lease obligations and loans fromshareholders bore interest at fixed rates. Details of bank borrowings, finance lease obligations and loansfrom shareholders are disclosed in Notes 20, 21 and 19(b), respectively.

The Group’s bank balances also expose it to cash flow interest rate risk due to the fluctuation of theprevailing market interest rate on bank balances. The directors of the Company consider the Group’sexposure to interest rate risk in respect of bank balances is not significant due to low level of depositinterest rate.


– I-69 –

The Group currently does not have an interest rate hedging policy. However, the management closelymonitors interest rate exposure and will consider hedging significant interest rate exposure should the needarise.

The following sensitivity analysis demonstrates the Group’s exposure to a reasonably possible changein interest rates on its floating-rate bank borrowings with all other variables held constant at the end ofeach of the Track Record Period (in practice, the results may differ from the sensitivity analysis below andthe difference could be material):

Increase/(decrease) in profit and retained earnings


31 March2016 2017 2018 2018 2019


Changes in interest rate+1% N/A (4) (10) (3) (10)–1% N/A 4 10 3 10

The changes in interest rates do not affect the Group’s other component of equity. The abovesensitivity analysis is prepared based on the assumption that the borrowing period of the bank borrowingsoutstanding at the end of each of the Track Record Period resembles that of the corresponding financialyears or periods. The assumed changes in interest rate are considered to be reasonably possible based onobservation of current market conditions and represents management’s assessment of a reasonably possiblechange in interest rate over the period until the next annual reporting period.

(c) Liquidity risk

Liquidity risk relates to the risk that the Group will not be able to meet its obligations associated withits financial liabilities that are settled by delivering cash or another financial asset. The Group is exposedto liquidity risk in respect of settlement of trade and other payables, its financing obligations and leaseliabilities, and also in respect of its cash flow management. The Group’s policy is to regularly monitor itsliquidity requirements to ensure that it maintains sufficient reserves of cash and adequate committed linesof funding from major financial institutions to meet its liquidity requirements in the short and longer term.The liquidity policy has been followed by the Group consistently during the Track Record Period and isconsidered to be effective in managing liquidity risks.

The following tables summarise the remaining contractual maturities of the Group’s financialliabilities including bank borrowings and lease liabilities, based on undiscounted cash flows (includinginterest payments computed using contractual rates or if floating, based on rates ruling at the end of eachof the Track Record Period) and the earliest date the Group can be required to pay.


– I-70 –

Carryingamount

Totalcontractual

undiscountedcash flow

Within 1 yearor on demand

More than 1year but lessthan 2 years

More than 2years but lessthan 5 years

More than 5years

SGD’000 SGD’000 SGD’000 SGD’000 SGD’000 SGD’000

As at 31 December 2016Trade and other payables 5,181 5,181 5,085 – – 96Finance lease obligations 4,860 5,226 1,189 1,165 2,769 103

10,041 10,407 6,274 1,165 2,769 199

Carryingamount

Totalcontractual





More than 5years


As at 31 December 2017Trade and other payables 5,921 5,921 5,825 – – 96Bank borrowings 727 820 127 127 380 186Finance lease obligations 9,332 9,999 2,540 2,473 4,923 63

15,980 16,740 8,492 2,600 5,303 345

Carryingamount

Totalcontractual





More than 5years


As at 31 December 2018Trade and other payables 4,002 4,002 3,906 – 96 –

Bank borrowings 974 1,088 201 201 602 84Finance lease obligations 6,907 7,279 2,403 2,320 2,556 –

11,883 12,369 6,510 2,521 3,254 84

Carryingamount

Totalcontractual





More than 5years


As at 31 March 2019Trade and other payables 3,801 3,801 3,705 – 96 –

Bank borrowings 933 1,041 202 202 605 32Lease liabilities 9,141 9,590 4,059 3,424 2,107 –

13,875 14,432 7,966 3,626 2,808 32


– I-71 –

(d) Currency risk

The Group mainly located in Singapore with most of the transactions settled in SGD and did not havesignificant exposure to risk resulting from changes in foreign currency exchanges.

(e) Capital management

The Group’s capital management objectives are to safeguard the Group’s ability to continue as agoing concern in order to provide returns to shareholders and benefits for other stakeholders, to maintainan optimal capital structure, to reduce the cost of capital and to support the Group’s stability and growth.

The Group monitors capital using gearing ratio, which is total debts to equity. Management of theGroup considered total debts represented loans from external parties, which include bank borrowings,financial lease obligations and lease liabilities under finance lease. Equity represents total equity of theGroup.

The directors of the Company actively and regularly review and manage the Group’s capital structure,taking into consideration the future capital requirements of the Group, to ensure optimal shareholders’returns. The Group manages the capital structure and makes adjustments to it in light of changes ineconomic conditions and the risk characteristics of the underlying assets. In order to maintain or adjust thecapital structure, the Group may adjust the amount of dividends paid to shareholders, return capital toshareholders, issue new shares, raise new debts or sells assets to reduce debts.

The gearing ratios as at the end of the Track Record Period were as follows:


31 March2016 2017 2018 2019

SGD’000 SGD’000 SGD’000 SGD’000

Bank borrowings, secured – 727 974 933Finance lease obligations 4,860 9,332 6,907 –

Lease liabilities – – – 9,141

Total debts 4,860 10,059 7,881 10,074

Total equity 2,623 5,755 6,905 7,036

Gearing ratio 1.9 times 1.7 times 1.1 times 1.4 times

32. Reconciliation of Liabilities Arising from Financing Activities

The table below details changes in the Group’s liabilities arising from financing activities. Liabilitiesarising from financing activities are those for which cash flows were, or future cash flows will be, classified inthe Group’s consolidated statements of cash flows from financing activities.


– I-72 –


At thebeginning of

the year AdditionInterestaccrued

Interestpaid underoperating

cash flowsFinancingcash flows

At the endof the year


Finance lease obligations 1,385 4,101 94 (94) (626) 4,860


At the

beginning of

the year Addition

Interest

accrued

Interest

paid under

operating

cash flows

Financing

cash flows

Conversion

into shares of

Optima

Werkz

At the

end of the

year

SGD’000 SGD’000 SGD’000 SGD’000 SGD’000 SGD’000 SGD’000

Finance lease obligations 4,860 6,381 279 (279) (1,909) – 9,332

Bank borrowings, secured – – 22 (22) 727 – 727

Convertible loans of Optima Werkz – – – – 1,575 (1,575) –


At the

beginning of

the year Addition

Interest

accrued

Interest

paid under

operating

cash flows

Financing

cash flows Derecognition

At the

end of

the year


Finance lease obligations 9,332 – 283 (283) (2,312) (113) 6,907

Bank borrowings, secured 727 – 40 (40) 247 – 974

For the three months

ended 31 March 2019

At the

beginning of

the period Reclassification Addition

Interest

accrued

Interest

paid under

operating cash

flows

Financing cash

flows

At the end of

the period


Finance lease obligations 6,907 (6,907) – – – – –

Lease liabilities – 6,907 3,185 93 – (1,044) 9,141

Bank borrowings, secured 974 – – 10 (10) (41) 933

For the three months ended 31 March 2018

(unaudited)

At the

beginning of

the period Addition

Interest

accrued

Interest paid

under

operating

cash flows

Financing

cash flows

At the end of

the period


Finance lease obligations 9,332 – 76 (76) (557) 8,775

Bank borrowings, secured 727 400 6 (6) (22) 1,105

33. Subsequent Financial Statements

No audited financial statements have been prepared by the Company or any of its subsidiaries in respect ofany period subsequent to 31 March 2019.


– I-73 –

The information set forth in this appendix does not form part of the Accountants’ Report on the financialinformation of the Group for the three years ended 31 December 2016, 2017, 2018 and the three months ended31 March 2019 prepared by BDO Limited, Certified Public Accountants, Hong Kong, the reporting accountantsof the Company, as set out in Appendix I to this prospectus, and is included herein for illustrative purposes only.The unaudited pro forma financial information should be read in conjunction with the section headed “FinancialInformation” in this prospectus and the “Accountants’ Report” set forth in Appendix I to this prospectus.

A. UNAUDITED PRO FORMA STATEMENT OF ADJUSTED CONSOLIDATED NET TANGIBLEASSETS

The following unaudited pro forma statement of adjusted consolidated net tangible assets of the Groupprepared in accordance with paragraph 7.31 of the GEM Listing Rules is for illustrative purposes only, and is setforth here to illustrate the effect of the proposed Share Offer on the consolidated net tangible assets of the Groupattributable to the owners of the Company as at 31 March 2019 as if the proposed Share Offer had taken placeon 31 March 2019. Because of its hypothetical nature, it may not give a true picture of the consolidated nettangible assets of the Group attributable to the owners of the Company as at 31 March 2019 or at any futuredates following the proposed Share Offer.

Consolidatednet tangible

assetsattributable

to the ownersof the

Companyas at

31 March2019

Estimated netproceeds fromthe proposedShare Offer

Unauditedpro formaadjusted

consolidatednet tangible

assetsattributable

to the ownersof the

Company

Unaudited pro forma adjustedconsolidated net tangible assetsattributable to the owners of

the Company per ShareSGD’000 SGD’000 SGD’000 SGD HK$(Note 1) (Note 2) (Note 3) (Note 4)

Based on the Offer Price of HK$0.20 7,036 6,913 13,949 0.016 0.09

Based on the Offer Price of HK$0.26 7,036 9,461 16,497 0.019 0.11

Notes:

(1) The consolidated net tangible assets of the Group attributable to the owners of the Company as at 31 March 2019 is extractedfrom the Accountants’ Report set out in Appendix I to this prospectus.

(2) The estimated net proceeds from the proposed Share Offer are based on 250,000,000 Offer Shares and the indicative OfferPrice of HK$0.20 and HK$0.26 per Share, being the minimum and maximum Offer Price per Share, respectively, assuming noexercise of Offer Size Adjustment Option or any options may be granted under the Share Option Scheme, after deduction of theunderwriting fees and other related expenses payable and borne by the Company which have not been reflected in consolidatednet tangible assets of the Group as at 31 March 2019.

(3) The unaudited pro forma adjusted consolidated net tangible assets attributable to the owners of the Company per Share iscalculated based on 850,000,000 Shares in issue immediately following the completion of the Capitalisation Issue and theproposed Share Offer assuming the proposed Share Offer had been completed on 31 March 2019 and no exercise of the OfferSize Adjustment Option or any options may be granted under the Share Option Scheme and no Shares which may be allotted,issued or repurchased by the Company pursuant to the general mandates for the allotment and issue or repurchase of Sharesreferred to in Appendix IV to this prospectus or otherwise.

APPENDIX II UNAUDITED PRO FORMA FINANCIAL INFORMATION

– II-1 –

(4) The unaudited pro forma adjusted consolidated net tangible assets of the Group as at 31 March 2019 per Share are convertedfrom Singapore dollars to Hong Kong dollars at the rate of SGD1.00 to HK$5.77. No representation is made that the amountsin Singapore dollars have been, could have been or could be converted into Hong Kong dollars, or vice versa, at the rate or atany other rates or at all.

(5) No adjustment has been made to the unaudited pro forma adjusted consolidated net tangible assets to reflect any trading resultsor other transactions of the Group entered into subsequent to 31 March 2019.


– II-2 –

B. ASSURANCE REPORT ON UNAUDITED PRO FORMA FINANCIAL INFORMATION

The following is the text of a report, prepared for the purpose of inclusion in this prospectus, received fromthe reporting accountants, BDO Limited, Certified Public Accountants, Hong Kong, in respect of the unauditedpro forma financial information of the Group for the purpose of incorporation in this prospectus.

INDEPENDENT REPORTING ACCOUNTANTS’ ASSURANCE REPORT ON THE COMPILATION OFUNAUDITED PRO FORMA FINANCIAL INFORMATION

To the directors of Optima Automobile Group Holdings Limited

We have completed our assurance engagement to report on the compilation of unaudited pro formafinancial information of Optima Automobile Group Holdings Limited (the ‘‘Company’’) and its subsidiaries(hereinafter collectively referred to as the ‘‘Group’’) by the directors of the Company for illustrative purposesonly. The unaudited pro forma financial information consists of the unaudited pro forma statement ofconsolidated net tangible assets of the Company as at 31 March 2019 and related notes as set out on pages II-1to II-2 of Appendix II of the Company’s prospectus dated 27 September 2019 (the ‘‘Prospectus’’) in connectionwith the proposed initial public offering and placing of the shares of the Company (the ‘‘Proposed ShareOffer’’). The applicable criteria on the basis of which the directors of the Company have compiled the unauditedpro forma financial information are described on pages II-1 to II-2 of Appendix II of the Prospectus.

The unaudited pro forma financial information has been compiled by the directors of the Company toillustrate the impact of the Proposed Share Offer on the Group’s consolidated financial position as at 31 March2019 as if the Proposed Share Offer had taken place at 31 March 2019. As part of this process, informationabout the Group’s consolidated financial position has been extracted by the directors of the Company from theGroup’s consolidated financial information for the three months ended 31 March 2019, on which an accountants’report set out in Appendix I of the Prospectus has been published.

Directors’ Responsibility for the Unaudited Pro Forma Financial Information

The directors of the Company are responsible for compiling the unaudited pro forma financial informationin accordance with paragraph 7.31 of the Rules Governing the Listing of Securities on GEM of The StockExchange of Hong Kong Limited (the ‘‘GEM Listing Rules’’) and with reference to Accounting Guideline 7‘‘Preparation of Pro Forma Financial Information for Inclusion in Investment Circulars’’ (‘‘AG 7’’) issued by theHong Kong Institute of Certified Public Accountants (the ‘‘HKICPA’’).


– II-3 –

Our Independence and Quality Control

We have complied with the independence and other ethical requirements of the ‘‘Code of Ethics forProfessional Accountants’’ issued by the HKICPA, which is founded on fundamental principles of integrity,objectivity, professional competence and due care, confidentiality and professional behavior.

Our firm applies Hong Kong Standard on Quality Control 1 ‘‘Quality Control for Firms that PerformAudits and Reviews of Financial Statements, and Other Assurance and Related Services Engagements’’ issued bythe HKICPA and accordingly maintains a comprehensive system of quality control including documentedpolicies and procedures regarding compliance with ethical requirements, professional standards and applicablelegal and regulatory requirements.

Reporting Accountants’ Responsibilities

Our responsibility is to express an opinion, as required by paragraph 7.31(7) of the GEM Listing Rules, onthe unaudited pro forma financial information and to report our opinion to you. We do not accept anyresponsibility for any reports previously given by us on any financial information used in the compilation of theunaudited pro forma financial information beyond that owed to those to whom those reports were addressed byus at the dates of their issue.

We conducted our engagement in accordance with Hong Kong Standard on Assurance Engagements 3420‘‘Assurance Engagements to Report on the Compilation of Pro Forma Financial Information Included in aProspectus’’ issued by the HKICPA. This standard requires that the reporting accountants plan and performprocedures to obtain reasonable assurance about whether the directors of the Company have compiled theunaudited pro forma financial information in accordance with paragraph 7.31 of the GEM Listing Rules and withreference to AG 7 issued by the HKICPA.

For purposes of this engagement, we are not responsible for updating or reissuing any reports or opinionson any historical financial information used in compiling the unaudited pro forma financial information, nor havewe, in the course of this engagement, performed an audit or review of the financial information used incompiling the unaudited pro forma financial information.

The purpose of unaudited pro forma financial information included in a prospectus is solely to illustrate theimpact of a significant event or transaction on unadjusted financial information of the entity as if the event hadoccurred or the transaction had been undertaken at an earlier date selected for purposes of the illustration.Accordingly, we do not provide any assurance that the actual outcome of the Proposed Share Offer as at31 March 2019 would have been as presented.

A reasonable assurance engagement to report on whether the unaudited pro forma financial information hasbeen properly compiled on the basis of the applicable criteria involves performing procedures to assess whetherthe applicable criteria used by the directors in the compilation of the unaudited pro forma financial informationprovide a reasonable basis for presenting the significant effects directly attributable to the event or transaction,and to obtain sufficient appropriate evidence about whether:

• the related unaudited pro forma adjustments give appropriate effect to those criteria; and

• the unaudited pro forma financial information reflects the proper application of those adjustments tothe unadjusted financial information.


– II-4 –

The procedures selected depend on the reporting accountants’ judgment, having regard to the reportingaccountants’ understanding of the nature of the entity, the event or transaction in respect of which the unauditedpro forma financial information has been compiled, and other relevant engagement circumstances.

The engagement also involves evaluating the overall presentation of the unaudited pro forma financialinformation.

We believe that the evidence we have obtained is sufficient and appropriate to provide a basis for ouropinion.

Opinion

In our opinion:

(a) the unaudited pro forma financial information has been properly compiled by the directors of theCompany on the basis stated;

(b) such basis is consistent with the accounting policies of the Company; and

(c) the adjustments are appropriate for the purposes of the unaudited pro forma financial information asdisclosed pursuant to paragraph 7.31(1) of the GEM Listing Rules.

BDO LimitedCertified Public AccountantsHong Kong

27 September 2019


– II-5 –

Set out below is a summary of certain provisions of the Memorandum and Articles of Association of ourCompany and of certain aspects of Cayman company law.

Our Company was incorporated in the Cayman Islands as an exempted company with limited liability on14 March, 2018 under the Companies Law, Cap 22 (Law 3 of 1961, as consolidated and revised) of the CaymanIslands (the ‘‘Companies Law’’). Our Company’s constitutional documents consist of its Amended and RestatedMemorandum of Association (the ‘‘Memorandum’’) and its Amended and Restated Articles of Association (the‘‘Articles’’).

1. MEMORANDUM OF ASSOCIATION

(a) The Memorandum states, inter alia, that the liability of members of our Company is limited to theamount, if any, for the time being unpaid on the shares respectively held by them and that the objectsfor which our Company is established are unrestricted (including acting as an investment company),and that our Company shall have and be capable of exercising all the functions of a natural person offull capacity irrespective of any question of corporate benefit, as provided in section 27(2) of theCompanies Law and in view of the fact that our Company is an exempted company that our Companywill not trade in the Cayman Islands with any person, firm or corporation except in furtherance of thebusiness of our Company carried on outside the Cayman Islands.

(b) Our Company may by special resolution alter its Memorandum with respect to any objects, powers orother matters specified therein.

2. ARTICLES OF ASSOCIATION

The Articles were conditionally adopted on 18 September 2019 with effect from the Listing Date. Thefollowing is a summary of certain provisions of the Articles:

(a) Shares

(i) Classes of shares

The share capital of our Company consists of ordinary shares.

(ii) Variation of rights of existing shares or classes of shares

Subject to the Companies Law, if at any time the share capital of our Company is divided intodifferent classes of shares, all or any of the special rights attached to the shares or any class of sharesmay (unless otherwise provided for by the terms of issue of that class) be varied, modified orabrogated either with the consent in writing of the holders of not less than three fourths in nominalvalue of the issued shares of that class or with the sanction of a special resolution passed at a separategeneral meeting of the holders of the shares of that class. To every such separate general meeting theprovisions of the Articles relating to general meetings will mutatis mutandis apply, but so that thenecessary quorum (other than at an adjourned meeting) shall be two persons holding or representingby proxy not less than one third in nominal value of the issued shares of that class and at anyadjourned meeting two holders present in person or by proxy (whatever the number of shares held bythem) shall be a quorum. Every holder of shares of the class shall be entitled to one vote for everysuch share held by him.

APPENDIX III SUMMARY OF THE CONSTITUTION OF THE COMPANYAND CAYMAN ISLANDS COMPANY LAW

– III-1 –

Any special rights conferred upon the holders of any shares or class of shares shall not, unlessotherwise expressly provided in the rights attaching to the terms of issue of such shares, be deemed tobe varied by the creation or issue of further shares ranking pari passu therewith.

(iii) Alteration of capital

Our Company may by ordinary resolution of its members:

(i) increase its share capital by the creation of new shares;

(ii) consolidate all or any of its capital into shares of larger amount than its existing shares;

(iii) divide its shares into several classes and attach to such shares any preferential, deferred,qualified or special rights, privileges, conditions or restrictions as our Company in generalmeeting or as the directors may determine;

(iv) subdivide its shares or any of them into shares of smaller amount than is fixed by theMemorandum; or

(v) cancel any shares which, at the date of passing of the resolution, have not been taken anddiminish the amount of its capital by the amount of the shares so cancelled.

Our Company may reduce its share capital or any capital redemption reserve or otherundistributable reserve in any way by special resolution.

(iv) Transfer of shares

All transfers of shares may be effected by an instrument of transfer in the usual or commonform or in a form prescribed by The Stock Exchange of Hong Kong Limited (the ‘‘Stock Exchange’’)or in such other form as the board may approve and which may be under hand or, if the transferor ortransferee is a clearing house or its nominee(s), by hand or by machine imprinted signature or by suchother manner of execution as the board may approve from time to time.

Notwithstanding the foregoing, for so long as any shares are listed on the Stock Exchange, titlesto such listed shares may be evidenced and transferred in accordance with the laws applicable to andthe rules and regulations of the Stock Exchange that are or shall be applicable to such listed shares.The register of members in respect of its listed shares (whether the principal register or a branchregister) may be kept by recording the particulars required by Section 40 of the Companies Law in aform otherwise than legible if such recording otherwise complies with the laws applicable to and therules and regulations of the Stock Exchange that are or shall be applicable to such listed shares.

The instrument of transfer shall be executed by or on behalf of the transferor and the transfereeprovided that the board may dispense with the execution of the instrument of transfer by thetransferee. The transferor shall be deemed to remain the holder of the share until the name of thetransferee is entered in the register of members in respect of that share.

The board may, in its absolute discretion, at any time transfer any share upon the principalregister to any branch register or any share on any branch register to the principal register or anyother branch register.


– III-2 –

The board may decline to recognise any instrument of transfer unless a fee (not exceeding themaximum sum as the Stock Exchange may determine to be payable) determined by the Directors ispaid to our Company, the instrument of transfer is properly stamped (if applicable), it is in respect ofonly one class of share and is lodged at the relevant registration office or registered office or suchother place at which the principal register is kept accompanied by the relevant share certificate(s) andsuch other evidence as the board may reasonably require to show the right of the transferor to makethe transfer (and if the instrument of transfer is executed by some other person on his behalf, theauthority of that person so to do).

The registration of transfers may be suspended and the register closed on giving notice byadvertisement in any newspaper or by any other means in accordance with the requirements of theStock Exchange, at such times and for such periods as the board may determine. The register ofmembers must not be closed for periods exceeding in the whole thirty (30) days in any year.

Subject to the above, fully paid shares are free from any restriction on transfer and free of allliens in favour of our Company.

(v) Power of our Company to purchase its own shares

Our Company is empowered by the Companies Law and the Articles to purchase its own sharessubject to certain restrictions and the board may only exercise this power on behalf of our Companysubject to any applicable requirements imposed from time to time by the Stock Exchange.

Where our Company purchases for redemption a redeemable share, purchases not made throughthe market or by tender must be limited to a maximum price determined by our Company in generalmeeting. If purchases are by tender, tenders must be made available to all members alike.

The board may accept the surrender for no consideration of any fully paid share.

(vi) Power of any subsidiary of our Company to own shares in our Company

There are no provisions in the Articles relating to ownership of shares in our Company by asubsidiary.

(vii) Calls on shares and forfeiture of shares

The board may from time to time make such calls upon the members in respect of any moniesunpaid on the shares held by them respectively (whether on account of the nominal value of theshares or by way of premium). A call may be made payable either in one lump sum or byinstallments. If the sum payable in respect of any call or instalment is not paid on or before the dayappointed for payment thereof, the person or persons from whom the sum is due shall pay interest onthe same at such rate not exceeding twenty per cent. (20%) per annum as the board may agree toaccept from the day appointed for the payment thereof to the time of actual payment, but the boardmay waive payment of such interest wholly or in part. The board may, if it thinks fit, receive fromany member willing to advance the same, either in money or money’s worth, all or any part of themonies uncalled and unpaid or installments payable upon any shares held by him, and upon all or anyof the monies so advanced our Company may pay interest at such rate (if any) as the board maydecide.


– III-3 –

If a member fails to pay any call on the day appointed for payment thereof, the board may servenot less than fourteen (14) clear days’ notice on him requiring payment of so much of the call as isunpaid, together with any interest which may have accrued and which may still accrue up to the dateof actual payment and stating that, in the event of non payment at or before the time appointed, theshares in respect of which the call was made will be liable to be forfeited.

If the requirements of any such notice are not complied with, any share in respect of which thenotice has been given may at any time thereafter, before the payment required by the notice has beenmade, be forfeited by a resolution of the board to that effect. Such forfeiture will include alldividends and bonuses declared in respect of the forfeited share and not actually paid before theforfeiture.

A person whose shares have been forfeited shall cease to be a member in respect of the forfeitedshares but shall, notwithstanding, remain liable to pay to our Company all monies which, at the dateof forfeiture, were payable by him to our Company in respect of the shares, together with (if theboard shall in its discretion so require) interest thereon from the date of forfeiture until the date ofactual payment at such rate not exceeding twenty per cent. (20%) per annum as the board determines.

(b) Directors

(i) Appointment, retirement and removal

At each annual general meeting, one third of the Directors for the time being (or if their numberis not a multiple of three, then the number nearest to but not less than one third) shall retire fromoffice by rotation provided that every Director shall be subject to retirement at an annual generalmeeting at least once every three years. The Directors to retire by rotation shall include any Directorwho wishes to retire and not offer himself for re-election. Any further Directors so to retire shall bethose who have been longest in office since their last re election or appointment but as betweenpersons who became or were last re elected Directors on the same day those to retire will (unless theyotherwise agree among themselves) be determined by lot.

Neither a Director nor an alternate Director is required to hold any shares in our Company byway of qualification. Further, there are no provisions in the Articles relating to retirement of Directorsupon reaching any age limit.

The Directors have the power to appoint any person as a Director either to fill a casual vacancyon the board or as an addition to the existing board. Any Director appointed to fill a casual vacancyshall hold office until the first general meeting of members after his appointment and be subject to re-election at such meeting and any Director appointed as an addition to the existing board shall holdoffice only until the next following annual general meeting of our Company and shall then be eligiblefor re-election.

A Director may be removed by an ordinary resolution of our Company before the expiration ofhis period of office (but without prejudice to any claim which such Director may have for damagesfor any breach of any contract between him and our Company) and members of our Company may byordinary resolution appoint another in his place. Unless otherwise determined by our Company ingeneral meeting, the number of Directors shall not be less than two. There is no maximum number ofDirectors.


– III-4 –

The office of director shall be vacated if:

(aa) he resigns by notice in writing delivered to our Company;

(bb) he becomes of unsound mind or dies;

(cc) without special leave, he is absent from meetings of the board for six (6) consecutivemonths, and the board resolves that his office is vacated;

(dd) he becomes bankrupt or has a receiving order made against him or suspends payment orcompounds with his creditors;

(ee) he is prohibited from being a director by law; or

(ff) he ceases to be a director by virtue of any provision of law or is removed from officepursuant to the Articles.

The board may appoint one or more of its body to be managing director, joint managingdirector, or deputy managing director or to hold any other employment or executive office with ourCompany for such period and upon such terms as the board may determine and the board may revokeor terminate any of such appointments. The board may delegate any of its powers, authorities anddiscretions to committees consisting of such Director or Directors and other persons as the boardthinks fit, and it may from time to time revoke such delegation or revoke the appointment of anddischarge any such committees either wholly or in part, and either as to persons or purposes, butevery committee so formed must, in the exercise of the powers, authorities and discretions sodelegated, conform to any regulations that may from time to time be imposed upon it by the board.

(ii) Power to allot and issue shares and warrants

Subject to the provisions of the Companies Law and the Memorandum and Articles and to anyspecial rights conferred on the holders of any shares or class of shares, any share may be issued (a)with or have attached thereto such rights, or such restrictions, whether with regard to dividend,voting, return of capital, or otherwise, as the Directors may determine, or (b) on terms that, at theoption of our Company or the holder thereof, it is liable to be redeemed.

The board may issue warrants or convertible securities or securities of similar nature conferringthe right upon the holders thereof to subscribe for any class of shares or securities in the capital ofour Company on such terms as it may determine.

Subject to the provisions of the Companies Law and the Articles and, where applicable, therules of the Stock Exchange and without prejudice to any special rights or restrictions for the timebeing attached to any shares or any class of shares, all unissued shares in our Company are at thedisposal of the board, which may offer, allot, grant options over or otherwise dispose of them to suchpersons, at such times, for such consideration and on such terms and conditions as it in its absolutediscretion thinks fit, but so that no shares shall be issued at a discount to their nominal value.


– III-5 –

Neither our Company nor the board is obliged, when making or granting any allotment of, offerof, option over or disposal of shares, to make, or make available, any such allotment, offer, option orshares to members or others with registered addresses in any particular territory or territories being aterritory or territories where, in the absence of a registration statement or other special formalities,this would or might, in the opinion of the board, be unlawful or impracticable. Members affected as aresult of the foregoing sentence shall not be, or be deemed to be, a separate class of members for anypurpose whatsoever.

(iii) Power to dispose of the assets of our Company or any of its subsidiaries

There are no specific provisions in the Articles relating to the disposal of the assets of ourCompany or any of its subsidiaries. The Directors may, however, exercise all powers and do all actsand things which may be exercised or done or approved by our Company and which are not requiredby the Articles or the Companies Law to be exercised or done by our Company in general meeting.

(iv) Borrowing powers

The board may exercise all the powers of our Company to raise or borrow money, to mortgageor charge all or any part of the undertaking, property and assets and uncalled capital of our Companyand, subject to the Companies Law, to issue debentures, bonds and other securities of our Company,whether outright or as collateral security for any debt, liability or obligation of our Company or ofany third party.

(v) Remuneration

The ordinary remuneration of the Directors is to be determined by our Company in generalmeeting, such sum (unless otherwise directed by the resolution by which it is voted) to be dividedamongst the Directors in such proportions and in such manner as the board may agree or, failingagreement, equally, except that any Director holding office for part only of the period in respect ofwhich the remuneration is payable shall only rank in such division in proportion to the time duringsuch period for which he held office. The Directors are also entitled to be prepaid or repaid alltravelling, hotel and incidental expenses reasonably expected to be incurred or incurred by them inattending any board meetings, committee meetings or general meetings or separate meetings of anyclass of shares or of debentures of our Company or otherwise in connection with the discharge oftheir duties as Directors.

Any Director who, by request, goes or resides abroad for any purpose of our Company or whoperforms services which in the opinion of the board go beyond the ordinary duties of a Director maybe paid such extra remuneration as the board may determine and such extra remuneration shall be inaddition to or in substitution for any ordinary remuneration as a Director. An executive Directorappointed to be a managing director, joint managing director, deputy managing director or otherexecutive officer shall receive such remuneration and such other benefits and allowances as the boardmay from time to time decide. Such remuneration may be either in addition to or in lieu of hisremuneration as a Director.


– III-6 –

The board may establish or concur or join with other companies (being subsidiary companies ofour Company or companies with which it is associated in business) in establishing and makingcontributions out of our Company’s monies to any schemes or funds for providing pensions, sicknessor compassionate allowances, life assurance or other benefits for employees (which expression asused in this and the following paragraph shall include any Director or past Director who may hold orhave held any executive office or any office of profit with our Company or any of its subsidiaries)and ex employees of our Company and their dependents or any class or classes of such persons.

The board may pay, enter into agreements to pay or make grants of revocable or irrevocable,and either subject or not subject to any terms or conditions, pensions or other benefits to employeesand ex employees and their dependents, or to any of such persons, including pensions or benefitsadditional to those, if any, to which such employees or ex employees or their dependents are or maybecome entitled under any such scheme or fund as is mentioned in the previous paragraph. Any suchpension or benefit may, as the board considers desirable, be granted to an employee either before andin anticipation of, or upon or at any time after, his actual retirement.

The board may resolve to capitalise all or any part of any amount for the time being standing tothe credit of any reserve or fund (including a share premium account and the profit and loss account)whether or not the same is available for distribution by applying such sum in paying up unissuedshares to be allotted to (i) employees (including directors) of our Company and/or its affiliates(meaning any individual, corporation, partnership, association, joint-stock company, trust,unincorporated association or other entity (other than our Company) that directly, or indirectlythrough one or more intermediaries, controls, is controlled by or is under common control with, ourCompany) upon exercise or vesting of any options or awards granted under any share incentivescheme or employee benefit scheme or other arrangement which relates to such persons that has beenadopted or approved by the members in general meeting, or (ii) any trustee of any trust to whomshares are to be allotted and issued by our Company in connection with the operation of any shareincentive scheme or employee benefit scheme or other arrangement which relates to such persons thathas been adopted or approved by the members in general meeting.

(vi) Compensation or payments for loss of office

Pursuant to the Articles, payments to any Director or past Director of any sum by way ofcompensation for loss of office or as consideration for or in connection with his retirement fromoffice (not being a payment to which the Director is contractually entitled) must be approved by ourCompany in general meeting.

(vii) Loans and provision of security for loans to Directors

Our Company must not make any loan, directly or indirectly, to a Director or his closeassociate(s) if and to the extent it would be prohibited by the Companies Ordinance (Chapter 622 ofthe laws of Hong Kong) as if our Company were a company incorporated in Hong Kong.


– III-7 –

(viii) Disclosure of interests in contracts with our Company or any of its subsidiaries

A Director may hold any other office or place of profit with our Company (except that of theauditor of our Company) in conjunction with his office of Director for such period and upon suchterms as the board may determine, and may be paid such extra remuneration therefor in addition toany remuneration provided for by or pursuant to the Articles. A Director may be or become a directoror other officer of, or otherwise interested in, any company promoted by our Company or any othercompany in which our Company may be interested, and shall not be liable to account to our Companyor the members for any remuneration, profits or other benefits received by him as a director, officeror member of, or from his interest in, such other company. The board may also cause the votingpower conferred by the shares in any other company held or owned by our Company to be exercisedin such manner in all respects as it thinks fit, including the exercise thereof in favour of anyresolution appointing the Directors or any of them to be directors or officers of such other company,or voting or providing for the payment of remuneration to the directors or officers of such othercompany.

No Director or proposed or intended Director shall be disqualified by his office from contractingwith our Company, either with regard to his tenure of any office or place of profit or as vendor,purchaser or in any other manner whatsoever, nor shall any such contract or any other contract orarrangement in which any Director is in any way interested be liable to be avoided, nor shall anyDirector so contracting or being so interested be liable to account to our Company or the members forany remuneration, profit or other benefits realised by any such contract or arrangement by reason ofsuch Director holding that office or the fiduciary relationship thereby established. A Director who tohis knowledge is in any way, whether directly or indirectly, interested in a contract or arrangement orproposed contract or arrangement with our Company must declare the nature of his interest at themeeting of the board at which the question of entering into the contract or arrangement is first takeninto consideration, if he knows his interest then exists, or in any other case, at the first meeting of theboard after he knows that he is or has become so interested.

A Director shall not vote (nor be counted in the quorum) on any resolution of the boardapproving any contract or arrangement or other proposal in which he or any of his close associates ismaterially interested, but this prohibition does not apply to any of the following matters, namely:

(aa) any contract or arrangement for giving to such Director or his close associate(s) anysecurity or indemnity in respect of money lent by him or any of his close associates orobligations incurred or undertaken by him or any of his close associates at the request ofor for the benefit of our Company or any of its subsidiaries;

(bb) any contract or arrangement for the giving of any security or indemnity to a third party inrespect of a debt or obligation of our Company or any of its subsidiaries for which theDirector or his close associate(s) has himself/themselves assumed responsibility in wholeor in part whether alone or jointly under a guarantee or indemnity or by the giving ofsecurity;

(cc) any contract or arrangement concerning an offer of shares or debentures or other securitiesof or by our Company or any other company which our Company may promote or beinterested in for subscription or purchase, where the Director or his close associate(s) is/are or is/are to be interested as a participant in the underwriting or sub underwriting of theoffer;


– III-8 –

(dd) any contract or arrangement in which the Director or his close associate(s) is/are interestedin the same manner as other holders of shares or debentures or other securities of ourCompany by virtue only of his/their interest in shares or debentures or other securities ofour Company; or

(ee) any proposal or arrangement concerning the adoption, modification or operation of a shareoption scheme, a pension fund or retirement, death, or disability benefits scheme or otherarrangement which relates both to Directors, his close associates and employees of ourCompany or of any of its subsidiaries and does not provide in respect of any Director, orhis close associate(s), as such any privilege or advantage not accorded generally to theclass of persons to which such scheme or fund relates.

(c) Proceedings of the Board

The board may meet for the despatch of business, adjourn and otherwise regulate its meetings as itconsiders appropriate. Questions arising at any meeting shall be determined by a majority of votes. In thecase of an equality of votes, the chairman of the meeting shall have an additional or casting vote.

(d) Alterations to constitutional documents and our Company’s name

The Articles may be rescinded, altered or amended by our Company in general meeting by specialresolution. The Articles state that a special resolution shall be required to alter the provisions of theMemorandum, to amend the Articles or to change the name of our Company.

(e) Meetings of members

(i) Special and ordinary resolutions

A special resolution of our Company must be passed by a majority of not less than three fourthsof the votes cast by such members as, being entitled so to do, vote in person or, in the case of suchmembers as are corporations, by their duly authorised representatives or, where proxies are allowed,by proxy at a general meeting of which notice has been duly given in accordance with the Articles.

Under the Companies Law, a copy of any special resolution must be forwarded to the Registrarof Companies in the Cayman Islands within fifteen (15) days of being passed.

An ordinary resolution is defined in the Articles to mean a resolution passed by a simplemajority of the votes of such members of our Company as, being entitled to do so, vote in person or,in the case of corporations, by their duly authorised representatives or, where proxies are allowed, byproxy at a general meeting of which notice has been duly given in accordance with the Articles.

(ii) Voting rights and right to demand a poll

Subject to any special rights or restrictions as to voting for the time being attached to anyshares, at any general meeting on a poll every member present in person or by proxy or, in the caseof a member being a corporation, by its duly authorised representative shall have one vote for everyfully paid share of which he is the holder but so that no amount paid up or credited as paid up on ashare in advance of calls or installments is treated for the foregoing purposes as paid up on the share.A member entitled to more than one vote need not use all his votes or cast all the votes he uses in thesame way.


– III-9 –

At any general meeting a resolution put to the vote of the meeting is to be decided by way of apoll save that the chairman of the meeting may in good faith, allow a resolution which relates purelyto a procedural or administrative matter to be voted on by a show of hands in which case everymember present in person (or being a corporation, is present by a duly authorized representative), orby proxy(ies) shall have one vote provided that where more than one proxy is appointed by a memberwhich is a clearing house (or its nominee(s)), each such proxy shall have one vote on a show ofhands.

If a recognised clearing house (or its nominee(s)) is a member of our Company it may authorisesuch person or persons as it thinks fit to act as its representative(s) at any meeting of our Company orat any meeting of any class of members of our Company provided that, if more than one person is soauthorised, the authorisation shall specify the number and class of shares in respect of which eachsuch person is so authorised. A person authorised pursuant to this provision shall be deemed to havebeen duly authorised without further evidence of the facts and be entitled to exercise the same powerson behalf of the recognised clearing house (or its nominee(s)) as if such person was the registeredholder of the shares of our Company held by that clearing house (or its nominee(s)) including, wherea show of hands is allowed, the right to vote individually on a show of hands.

Where our Company has any knowledge that any shareholder is, under the rules of the StockExchange, required to abstain from voting on any particular resolution of our Company or restrictedto voting only for or only against any particular resolution of our Company, any votes cast by or onbehalf of such shareholder in contravention of such requirement or restriction shall not be counted.

(iii) Annual general meetings and extraordinary general meetings

Our Company must hold an annual general meeting of our Company every year within a periodof not more than fifteen (15) months after the holding of the last preceding annual general meeting ora period of not more than eighteen (18) months from the date of adoption of the Articles, unless alonger period would not infringe the rules of the Stock Exchange.

Extraordinary general meetings may be convened on the requisition of one or more shareholdersholding, at the date of deposit of the requisition, not less than one-tenth of the paid up capital of theCompany having the right of voting at general meetings. Such requisition shall be made in writing tothe board or the secretary for the purpose of requiring an extraordinary general meeting to be calledby the board for the transaction of any business specified in such requisition. Such meeting shall beheld within 2 months after the deposit of such requisition. If within 21 days of such deposit, theboard fails to proceed to convene such meeting, the requisitionist(s) himself/herself (themselves) maydo so in the same manner, and all reasonable expenses incurred by the requisitionist(s) as a result ofthe failure of the board shall be reimbursed to the requisitionist(s) by the Company.

(iv) Notices of meetings and business to be conducted

An annual general meeting must be called by notice of not less than twenty-one (21) clear daysand not less than twenty (20) clear business days. All other general meetings must be called by noticeof at least fourteen (14) clear days and not less than ten (10) clear business days. The notice isexclusive of the day on which it is served or deemed to be served and of the day for which it isgiven, and must specify the time and place of the meeting and particulars of resolutions to beconsidered at the meeting and, in the case of special business, the general nature of that business.


– III-10 –

In addition, notice of every general meeting must be given to all members of our Company otherthan to such members as, under the provisions of the Articles or the terms of issue of the shares theyhold, are not entitled to receive such notices from our Company, and also to, among others, theauditors for the time being of our Company.

Any notice to be given to or by any person pursuant to the Articles may be served on ordelivered to any member of our Company personally, by post to such member’s registered address orby advertisement in newspapers in accordance with the requirements of the Stock Exchange. Subjectto compliance with Cayman Islands law and the rules of the Stock Exchange, notice may also beserved or delivered by our Company to any member by electronic means.

All business that is transacted at an extraordinary general meeting and at an annual generalmeeting is deemed special, save that in the case of an annual general meeting, each of the followingbusiness is deemed an ordinary business:

(aa) the declaration and sanctioning of dividends;

(bb) the consideration and adoption of the accounts and balance sheet and the reports of thedirectors and the auditors;

(cc) the election of directors in place of those retiring;

(dd) the appointment of auditors and other officers; and

(ee) the fixing of the remuneration of the directors and of the auditors.

(v) Quorum for meetings and separate class meetings

No business shall be transacted at any general meeting unless a quorum is present when themeeting proceeds to business, but the absence of a quorum shall not preclude the appointment of achairman.

The quorum for a general meeting shall be two members present in person (or, in the case of amember being a corporation, by its duly authorised representative) or by proxy and entitled to vote. Inrespect of a separate class meeting (other than an adjourned meeting) convened to sanction themodification of class rights the necessary quorum shall be two persons holding or representing byproxy not less than one third in nominal value of the issued shares of that class.

(vi) Proxies

Any member of our Company entitled to attend and vote at a meeting of our Company isentitled to appoint another person as his proxy to attend and vote instead of him. A member who isthe holder of two or more shares may appoint more than one proxy to represent him and vote on hisbehalf at a general meeting of our Company or at a class meeting. A proxy need not be a member ofour Company and is entitled to exercise the same powers on behalf of a member who is an individualand for whom he acts as proxy as such member could exercise. In addition, a proxy is entitled toexercise the same powers on behalf of a member which is a corporation and for which he acts asproxy as such member could exercise as if it were an individual member. Votes may be given eitherpersonally (or, in the case of a member being a corporation, by its duly authorised representative) orby proxy.


– III-11 –

(f) Accounts and audit

The board shall cause true accounts to be kept of the sums of money received and expended by ourCompany, and the matters in respect of which such receipt and expenditure take place, and of the property,assets, credits and liabilities of our Company and of all other matters required by the Companies Law ornecessary to give a true and fair view of our Company’s affairs and to explain its transactions.

The accounting records must be kept at the registered office or at such other place or places as theboard decides and shall always be open to inspection by any Director. No member (other than a Director)shall have any right to inspect any accounting record or book or document of our Company except asconferred by law or authorised by the board or our Company in general meeting. However, an exemptedcompany must make available at its registered office in electronic form or any other medium, copies of itsbooks of account or parts thereof as may be required of it upon service of an order or notice by the TaxInformation Authority pursuant to the Tax Information Authority Law of the Cayman Islands.

A copy of every balance sheet and profit and loss account (including every document required by lawto be annexed thereto) which is to be laid before our Company at its general meeting, together with aprinted copy of the Directors’ report and a copy of the auditors’ report, shall not less than twenty-one (21)days before the date of the meeting and at the same time as the notice of annual general meeting be sent toevery person entitled to receive notices of general meetings of our Company under the provisions of theArticles; however, subject to compliance with all applicable laws, including the rules of the StockExchange, our Company may send to such persons summarised financial statements derived from ourCompany’s annual accounts and the directors’ report instead provided that any such person may by noticein writing served on our Company, demand that our Company sends to him, in addition to summarisedfinancial statements, a complete printed copy of our Company’s annual financial statement and thedirectors’ report thereon.

At the annual general meeting or at a subsequent extraordinary general meeting in each year, themembers shall appoint an auditor to audit the accounts of our Company and such auditor shall hold officeuntil the next annual general meeting. Moreover, the members may, at any general meeting, by specialresolution remove the auditor at any time before the expiration of his term of office and shall by ordinaryresolution at that meeting appoint another auditor for the remainder of his term. The remuneration of theauditors shall be fixed by our Company in general meeting or in such manner as the members maydetermine.

The financial statements of our Company shall be audited by the auditor in accordance with generallyaccepted auditing standards which may be those of a country or jurisdiction other than the Cayman Islands.The auditor shall make a written report thereon in accordance with generally accepted auditing standardsand the report of the auditor must be submitted to the members in general meeting.

(g) Dividends and other methods of distribution

Our Company in general meeting may declare dividends in any currency to be paid to the membersbut no dividend shall be declared in excess of the amount recommended by the board.

The Articles provide dividends may be declared and paid out of the profits of our Company, realisedor unrealised, or from any reserve set aside from profits which the directors determine is no longer needed.With the sanction of an ordinary resolution dividends may also be declared and paid out of share premiumaccount or any other fund or account which can be authorised for this purpose in accordance with theCompanies Law.


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Except in so far as the rights attaching to, or the terms of issue of, any share may otherwise provide,(i) all dividends shall be declared and paid according to the amounts paid up on the shares in respectwhereof the dividend is paid but no amount paid up on a share in advance of calls shall for this purpose betreated as paid up on the share and (ii) all dividends shall be apportioned and paid pro rata according to theamount paid up on the shares during any portion or portions of the period in respect of which the dividendis paid. The Directors may deduct from any dividend or other monies payable to any member or in respectof any shares all sums of money (if any) presently payable by him to our Company on account of calls orotherwise.

Whenever the board or our Company in general meeting has resolved that a dividend be paid ordeclared on the share capital of our Company, the board may further resolve either (a) that such dividendbe satisfied wholly or in part in the form of an allotment of shares credited as fully paid up, provided thatthe shareholders entitled thereto will be entitled to elect to receive such dividend (or part thereof) in cashin lieu of such allotment, or (b) that shareholders entitled to such dividend will be entitled to elect toreceive an allotment of shares credited as fully paid up in lieu of the whole or such part of the dividend asthe board may think fit.

Our Company may also upon the recommendation of the board by an ordinary resolution resolve inrespect of any one particular dividend of our Company that it may be satisfied wholly in the form of anallotment of shares credited as fully paid up without offering any right to shareholders to elect to receivesuch dividend in cash in lieu of such allotment.

Any dividend, interest or other sum payable in cash to the holder of shares may be paid by cheque orwarrant sent through the post addressed to the holder at his registered address, or in the case of jointholders, addressed to the holder whose name stands first in the register of our Company in respect of theshares at his address as appearing in the register or addressed to such person and at such addresses as theholder or joint holders may in writing direct. Every such cheque or warrant shall, unless the holder or jointholders otherwise direct, be made payable to the order of the holder or, in the case of joint holders, to theorder of the holder whose name stands first on the register in respect of such shares, and shall be sent athis or their risk and payment of the cheque or warrant by the bank on which it is drawn shall constitute agood discharge to our Company. Any one of two or more joint holders may give effectual receipts for anydividends or other moneys payable or property distributable in respect of the shares held by such jointholders.

Whenever the board or our Company in general meeting has resolved that a dividend be paid ordeclared the board may further resolve that such dividend be satisfied wholly or in part by the distributionof specific assets of any kind.

All dividends or bonuses unclaimed for one year after having been declared may be invested orotherwise made use of by the board for the benefit of our Company until claimed and our Company shallnot be constituted a trustee in respect thereof. All dividends or bonuses unclaimed for six years afterhaving been declared may be forfeited by the board and shall revert to our Company.

No dividend or other monies payable by our Company on or in respect of any share shall bear interestagainst our Company.


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(h) Inspection of corporate records

Pursuant to the Articles, the register and branch register of members shall be open to inspection for atleast two (2) hours during business hours by members without charge, or by any other person upon amaximum payment of HK$2.50 or such lesser sum specified by the board, at the registered office or suchother place at which the register is kept in accordance with the Companies Law or, upon a maximumpayment of HK$1.00 or such lesser sum specified by the board, at the office where the branch register ofmembers is kept, unless the register is closed in accordance with the Articles.

(i) Rights of minorities in relation to fraud or oppression

There are no provisions in the Articles relating to rights of minority shareholders in relation to fraudor oppression. However, certain remedies are available to shareholders of our Company under CaymanIslands law, as summarised in paragraph 3(f) of this Appendix.

(j) Procedures on liquidation

A resolution that our Company be wound up by the court or be wound up voluntarily shall be aspecial resolution.

Subject to any special rights, privileges or restrictions as to the distribution of available surplus assetson liquidation for the time being attached to any class or classes of shares:

(i) if our Company is wound up and the assets available for distribution amongst the members ofour Company shall be more than sufficient to repay the whole of the capital paid up at thecommencement of the winding up, the excess shall be distributed pari passu amongst suchmembers in proportion to the amount paid up on the shares held by them respectively; and

(ii) if our Company is wound up and the assets available for distribution amongst the members assuch shall be insufficient to repay the whole of the paid-up capital, such assets shall bedistributed so that, as nearly as may be, the losses shall be borne by the members in proportionto the capital paid up, or which ought to have been paid up, at the commencement of thewinding up on the shares held by them respectively.

If our Company is wound up (whether the liquidation is voluntary or by the court) the liquidator may,with the authority of a special resolution and any other sanction required by the Companies Law divideamong the members in specie or kind the whole or any part of the assets of our Company whether theassets shall consist of property of one kind or shall consist of properties of different kinds and theliquidator may, for such purpose, set such value as he deems fair upon any one or more class or classes ofproperty to be divided as aforesaid and may determine how such division shall be carried out as betweenthe members or different classes of members. The liquidator may, with the like authority, vest any part ofthe assets in trustees upon such trusts for the benefit of members as the liquidator, with the like authority,shall think fit, but so that no contributory shall be compelled to accept any shares or other property inrespect of which there is a liability.


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(k) Subscription rights reserve

The Articles provide that to the extent that it is not prohibited by and is in compliance with theCompanies Law, if warrants to subscribe for shares have been issued by our Company and our Companydoes any act or engages in any transaction which would result in the subscription price of such warrantsbeing reduced below the par value of a share, a subscription rights reserve shall be established and appliedin paying up the difference between the subscription price and the par value of a share on any exercise ofthe warrants.

3. CAYMAN ISLANDS COMPANY LAW

Our Company is incorporated in the Cayman Islands subject to the Companies Law and, therefore, operatessubject to Cayman Islands law. Set out below is a summary of certain provisions of Cayman company law,although this does not purport to contain all applicable qualifications and exceptions or to be a complete reviewof all matters of Cayman company law and taxation, which may differ from equivalent provisions in jurisdictionswith which interested parties may be more familiar:

(a) Company operations

As an exempted company, our Company’s operations must be conducted mainly outside the CaymanIslands. Our Company is required to file an annual return each year with the Registrar of Companies of theCayman Islands and pay a fee which is based on the amount of its authorised share capital.

(b) Share capital

The Companies Law provides that where a company issues shares at a premium, whether for cash orotherwise, a sum equal to the aggregate amount of the value of the premiums on those shares shall betransferred to an account, to be called the ‘‘share premium account’’. At the option of a company, theseprovisions may not apply to premiums on shares of that company allotted pursuant to any arrangement inconsideration of the acquisition or cancellation of shares in any other company and issued at a premium.

The Companies Law provides that the share premium account may be applied by the company subjectto the provisions, if any, of its memorandum and articles of association in (a) paying distributions ordividends to members; (b) paying up unissued shares of the company to be issued to members as fully paidbonus shares; (c) the redemption and repurchase of shares (subject to the provisions of section 37 of theCompanies Law); (d) writing-off the preliminary expenses of the company; and (e) writing-off the expensesof, or the commission paid or discount allowed on, any issue of shares or debentures of the company.

No distribution or dividend may be paid to members out of the share premium account unlessimmediately following the date on which the distribution or dividend is proposed to be paid, the companywill be able to pay its debts as they fall due in the ordinary course of business.

The Companies Law provides that, subject to confirmation by the Grand Court of the Cayman Islands(the ‘‘Court’’), a company limited by shares or a company limited by guarantee and having a share capitalmay, if so authorised by its articles of association, by special resolution reduce its share capital in any way.


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(c) Financial assistance to purchase shares of a company or its holding company

There is no statutory restriction in the Cayman Islands on the provision of financial assistance by acompany to another person for the purchase of, or subscription for, its own or its holding company’sshares. Accordingly, a company may provide financial assistance if the directors of the company consider,in discharging their duties of care and acting in good faith, for a proper purpose and in the interests of thecompany, that such assistance can properly be given. Such assistance should be on an arm’s-length basis.

(d) Purchase of shares and warrants by a company and its subsidiaries

A company limited by shares or a company limited by guarantee and having a share capital may, if soauthorised by its articles of association, issue shares which are to be redeemed or are liable to be redeemedat the option of the company or a shareholder and the Companies Law expressly provides that it shall belawful for the rights attaching to any shares to be varied, subject to the provisions of the company’s articlesof association, so as to provide that such shares are to be or are liable to be so redeemed. In addition, sucha company may, if authorised to do so by its articles of association, purchase its own shares, including anyredeemable shares. However, if the articles of association do not authorise the manner and terms ofpurchase, a company cannot purchase any of its own shares unless the manner and terms of purchase havefirst been authorised by an ordinary resolution of the company. At no time may a company redeem orpurchase its shares unless they are fully paid. A company may not redeem or purchase any of its shares if,as a result of the redemption or purchase, there would no longer be any issued shares of the company otherthan shares held as treasury shares. A payment out of capital by a company for the redemption or purchaseof its own shares is not lawful unless immediately following the date on which the payment is proposed tobe made, the company shall be able to pay its debts as they fall due in the ordinary course of business.

Shares purchased by a company is to be treated as cancelled unless, subject to the memorandum andarticles of association of the company, the directors of the company resolve to hold such shares in thename of the company as treasury shares prior to the purchase. Where shares of a company are held astreasury shares, the company shall be entered in the register of members as holding those shares, however,notwithstanding the foregoing, the company is not be treated as a member for any purpose and must notexercise any right in respect of the treasury shares, and any purported exercise of such a right shall bevoid, and a treasury share must not be voted, directly or indirectly, at any meeting of the company andmust not be counted in determining the total number of issued shares at any given time, whether for thepurposes of the company’s articles of association or the Companies Law.

A company is not prohibited from purchasing and may purchase its own warrants subject to and inaccordance with the terms and conditions of the relevant warrant instrument or certificate. There is norequirement under Cayman Islands law that a company’s memorandum or articles of association contain aspecific provision enabling such purchases and the directors of a company may rely upon the general powercontained in its memorandum of association to buy and sell and deal in personal property of all kinds.

Under Cayman Islands law, a subsidiary may hold shares in its holding company and, in certaincircumstances, may acquire such shares.


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(e) Dividends and distributions

The Companies Law permits, subject to a solvency test and the provisions, if any, of the company’smemorandum and articles of association, the payment of dividends and distributions out of the sharepremium account. With the exception of the foregoing, there are no statutory provisions relating to thepayment of dividends. Based upon English case law, which is regarded as persuasive in the CaymanIslands, dividends may be paid only out of profits.

No dividend may be declared or paid, and no other distribution (whether in cash or otherwise) of thecompany’s assets (including any distribution of assets to members on a winding up) may be made to thecompany, in respect of a treasury share.

(f) Protection of minorities and shareholders’ suits

The Courts ordinarily would be expected to follow English case law precedents which permit aminority shareholder to commence a representative action against or derivative actions in the name of thecompany to challenge (a) an act which is ultra vires the company or illegal, (b) an act which constitutes afraud against the minority and the wrongdoers are themselves in control of the company, and (c) anirregularity in the passing of a resolution which requires a qualified (or special) majority.

In the case of a company (not being a bank) having a share capital divided into shares, the Courtmay, on the application of members holding not less than one fifth of the shares of the company in issue,appoint an inspector to examine into the affairs of the company and to report thereon in such manner as theCourt shall direct.

Any shareholder of a company may petition the Court which may make a winding up order if theCourt is of the opinion that it is just and equitable that the company should be wound up or, as analternative to a winding up order, (a) an order regulating the conduct of the company’s affairs in the future,(b) an order requiring the company to refrain from doing or continuing an act complained of by theshareholder petitioner or to do an act which the shareholder petitioner has complained it has omitted to do,(c) an order authorising civil proceedings to be brought in the name and on behalf of the company by theshareholder petitioner on such terms as the Court may direct, or (d) an order providing for the purchase ofthe shares of any shareholders of the company by other shareholders or by the company itself and, in thecase of a purchase by the company itself, a reduction of the company’s capital accordingly.

Generally claims against a company by its shareholders must be based on the general laws of contractor tort applicable in the Cayman Islands or their individual rights as shareholders as established by thecompany’s memorandum and articles of association.

(g) Disposal of assets

The Companies Law contains no specific restrictions on the power of directors to dispose of assets ofa company. However, as a matter of general law, every officer of a company, which includes a director,managing director and secretary, in exercising his powers and discharging his duties must do so honestlyand in good faith with a view to the best interests of the company and exercise the care, diligence and skillthat a reasonably prudent person would exercise in comparable circumstances.


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(h) Accounting and auditing requirements

A company must cause proper books of account to be kept with respect to (i) all sums of moneyreceived and expended by the company and the matters in respect of which the receipt and expendituretakes place; (ii) all sales and purchases of goods by the company; and (iii) the assets and liabilities of thecompany.

Proper books of account shall not be deemed to be kept if there are not kept such books as arenecessary to give a true and fair view of the state of the company’s affairs and to explain its transactions.

An exempted company must make available at its registered office in electronic form or any othermedium, copies of its books of account or parts thereof as may be required of it upon service of an order ornotice by the Tax Information Authority pursuant to the Tax Information Authority Law of the CaymanIslands.

(i) Exchange control

There are no exchange control regulations or currency restrictions in the Cayman Islands.

(j) Taxation

Pursuant to the Tax Concessions Law of the Cayman Islands, our Company has obtained anundertaking:

(1) that no law which is enacted in the Cayman Islands imposing any tax to be levied on profits,income, gains or appreciation shall apply to our Company or its operations; and

(2) that the aforesaid tax or any tax in the nature of estate duty or inheritance tax shall not bepayable on or in respect of the shares, debentures or other obligations of our Company.

The undertaking for our Company is for a period of twenty years from 11 April, 2018.

The Cayman Islands currently levy no taxes on individuals or corporations based upon profits,income, gains or appreciations and there is no taxation in the nature of inheritance tax or estate duty. Thereare no other taxes likely to be material to our Company levied by the Government of the Cayman Islandssave for certain stamp duties which may be applicable, from time to time, on certain instruments executedin or brought within the jurisdiction of the Cayman Islands. The Cayman Islands are a party to a double taxtreaty entered into with the United Kingdom in 2010 but otherwise is not party to any double tax treaties.

(k) Stamp duty on transfers

No stamp duty is payable in the Cayman Islands on transfers of shares of Cayman Islands companiesexcept those which hold interests in land in the Cayman Islands.

(l) Loans to directors

There is no express provision in the Companies Law prohibiting the making of loans by a company toany of its directors.


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(m) Inspection of corporate records

Members of our Company have no general right under the Companies Law to inspect or obtain copiesof the register of members or corporate records of our Company. They will, however, have such rights asmay be set out in our Company’s Articles.

(n) Register of members

An exempted company may maintain its principal register of members and any branch registers atsuch locations, whether within or without the Cayman Islands, as the directors may, from time to time,think fit. The registers of members shall contain such particulars as required by Section 40 of theCompanies Law. A branch register must be kept in the same manner in which a principal register is by theCompanies Law required or permitted to be kept. The company shall cause to be kept at the place wherethe company’s principal register is kept a duplicate of any branch register duly entered up from time totime.

There is no requirement under the Companies Law for an exempted company to make any returns ofmembers to the Registrar of Companies of the Cayman Islands. The names and addresses of the membersare, accordingly, not a matter of public record and are not available for public inspection. However, anexempted company shall make available at its registered office, in electronic form or any other medium,such register of members, including any branch register of members, as may be required of it upon serviceof an order or notice by the Tax Information Authority pursuant to the Tax Information Authority Law ofthe Cayman Islands.

(o) Register of Directors and Officers

Our Company is required to maintain at its registered office a register of directors and officers whichis not available for inspection by the public. A copy of such register must be filed with the Registrar ofCompanies in the Cayman Islands and any change must be notified to the Registrar within thirty (30) daysof any change in such directors or officers.

(p) Beneficial Ownership Register

An exempted company is required to maintain a beneficial ownership register at its registered officethat records details of the persons who ultimately own or control, directly or indirectly, more than 25% ofthe equity interests or voting rights of the company or have rights to appoint or remove a majority of thedirectors of the company. The beneficial ownership register is not a public document and is only accessibleby a designated competent authority of the Cayman Islands. Such requirement does not, however, apply toan exempted company with its shares listed on an approved stock exchange, which includes the StockExchange. Accordingly, for so long as the shares of our Company are listed on the Stock Exchange, ourCompany is not required to maintain a beneficial ownership register.

(q) Winding up

A company may be wound up (a) compulsorily by order of the Court, (b) voluntarily, or (c) under thesupervision of the Court.


– III-19 –

The Court has authority to order winding up in a number of specified circumstances including wherethe members of the company have passed a special resolution requiring the company to be wound up by theCourt, or where the company is unable to pay its debts, or where it is, in the opinion of the Court, just andequitable to do so. Where a petition is presented by members of the company as contributories on theground that it is just and equitable that the company should be wound up, the Court has the jurisdiction tomake certain other orders as an alternative to a winding-up order, such as making an order regulating theconduct of the company’s affairs in the future, making an order authorising civil proceedings to be broughtin the name and on behalf of the company by the petitioner on such terms as the Court may direct, ormaking an order providing for the purchase of the shares of any of the members of the company by othermembers or by the company itself.

A company (save with respect to a limited duration company) may be wound up voluntarily when thecompany so resolves by special resolution or when the company in general meeting resolves by ordinaryresolution that it be wound up voluntarily because it is unable to pay its debts as they fall due. In the caseof a voluntary winding up, such company is obliged to cease to carry on its business (except so far as itmay be beneficial for its winding up) from the time of passing the resolution for voluntary winding up orupon the expiry of the period or the occurrence of the event referred to above.

For the purpose of conducting the proceedings in winding up a company and assisting the Courttherein, there may be appointed an official liquidator or official liquidators; and the court may appoint tosuch office such person, either provisionally or otherwise, as it thinks fit, and if more persons than one areappointed to such office, the Court must declare whether any act required or authorised to be done by theofficial liquidator is to be done by all or any one or more of such persons. The Court may also determinewhether any and what security is to be given by an official liquidator on his appointment; if no officialliquidator is appointed, or during any vacancy in such office, all the property of the company shall be inthe custody of the Court.

As soon as the affairs of the company are fully wound up, the liquidator must make a report and anaccount of the winding up, showing how the winding up has been conducted and how the property of thecompany has been disposed of, and thereupon call a general meeting of the company for the purposes oflaying before it the account and giving an explanation thereof. This final general meeting must be called byat least 21 days’ notice to each contributory in any manner authorised by the company’s articles ofassociation and published in the Gazette.

(r) Reconstructions

There are statutory provisions which facilitate reconstructions and amalgamations approved by amajority in number representing seventy-five per cent. (75%) in value of shareholders or class ofshareholders or creditors, as the case may be, as are present at a meeting called for such purpose andthereafter sanctioned by the Court. Whilst a dissenting shareholder would have the right to express to theCourt his view that the transaction for which approval is sought would not provide the shareholders with afair value for their shares, the Court is unlikely to disapprove the transaction on that ground alone in theabsence of evidence of fraud or bad faith on behalf of management.


– III-20 –

(s) Take-overs

Where an offer is made by a company for the shares of another company and, within four (4) monthsof the offer, the holders of not less than ninety per cent. (90%) of the shares which are the subject of theoffer accept, the offeror may at any time within two (2) months after the expiration of the said four (4)months, by notice in the prescribed manner require the dissenting shareholders to transfer their shares onthe terms of the offer. A dissenting shareholder may apply to the Court within one (1) month of the noticeobjecting to the transfer. The burden is on the dissenting shareholder to show that the Court shouldexercise its discretion, which it will be unlikely to do unless there is evidence of fraud or bad faith orcollusion as between the offeror and the holders of the shares who have accepted the offer as a means ofunfairly forcing out minority shareholders.

(t) Indemnification

Cayman Islands law does not limit the extent to which a company’s articles of association mayprovide for indemnification of officers and directors, except to the extent any such provision may be heldby the Court to be contrary to public policy (e.g. for purporting to provide indemnification against theconsequences of committing a crime).

(u) Economic Substance Requirements

Pursuant to the International Tax Cooperation (Economic Substance) Law, 2018 of the CaymanIslands (‘‘ES Law’’) that came into force on 1 January 2019, a ‘‘relevant entity’’ is required to satisfy theeconomic substance test set out in the ES Law. A ‘‘relevant entity’’ includes an exempted companyincorporated in the Cayman Islands as is the Company; however, it does not include an entity that is taxresident outside the Cayman Islands. Accordingly, for so long as the Company is a tax resident outside theCayman Islands, including in Hong Kong, it is not required to satisfy the economic substance test set out inthe ES Law.

4. GENERAL

Conyers Dill & Pearman, our Company’s special legal counsel on Cayman Islands law, have sent to ourCompany a letter of advice summarising certain aspects of Cayman Islands company law. This letter, togetherwith a copy of the Companies Law, is available for inspection as referred to in the paragraph headed‘‘Documents available for inspection’’ in Appendix V to this prospectus. Any person wishing to have a detailedsummary of Cayman Islands company law or advice on the differences between it and the laws of anyjurisdiction with which he is more familiar is recommended to seek independent legal advice.


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1. FURTHER INFORMATION ABOUT OUR GROUP

1.1 Incorporation of our Company in the Cayman Islands and registration of our Company under Part16 of the Companies Ordinance

Our Company was incorporated in the Cayman Islands under the Companies Law as an exempted companywith limited liability on 14 March 2018 with an authorised share capital of HK$380,000 divided into 38,000,000Shares (having a par value of HK$0.01 each).

Our Company has established a principal place of business in Hong Kong at 17th Floor, MW Tower, No.111 Bonham Strand, Hong Kong. Our Company was registered with the Registrar of Companies in Hong Kongas a non-Hong Kong company under Part 16 of the Companies Ordinance on 19 June 2018. Mr. Chan Tsang Mohas been appointed as the authorised representative of our Company for the acceptance of service of process andnotices on behalf of our Company in Hong Kong.

As our Company was incorporated in the Cayman Islands, we are subject to the Companies Law and to theconstitution comprising the Memorandum and Articles of Association. A summary of certain provisions of ourCompany’s constitution and relevant aspects of the Companies Law is set out in Appendix III to this prospectus.

1.2 Changes in the share capital of our Company

(a) Our Company was incorporated in the Cayman Islands as an exempted company with limited liabilityon 14 March 2018 with an authorised share capital of HK$380,000 divided into 38,000,000 Shares ofHK$0.01 each.

(b) On 14 March 2018, one nil-paid Share in our Company was allotted and issued, to Sharon Pierson (anofficer of Conyers Trust Company (Cayman) Limited, the registered office provider of our Company),which was transferred to Red Link on the same date. On 14 March 2018, our Company furtherallotted and issued 631,329 Shares, 81,170 Shares, 80,750 Shares, 64,541 Shares, 61,750 Shares,30,459 Shares, all nil-paid, to Red Link, Mr. Chee, Mr. Chong, Ms. Ngo, Ms. Lam and Mr. Seowrespectively (in the proportion of 66.46%, 8.54%, 8.50%, 6.79%, 6.50% and 3.21% respectively).

(c) On 29 March 2018, as a result of the completion of the API Investment, 50,000 new Shares,representing 5.00% of the enlarged issued share capital of our Company at the time of completion ofthe API Investment, were allotted and issued, credited as fully-paid, to API at a total consideration ofHK$10,000,000 in cash.

(d) On 22 June 2018, pursuant to the Share Swap Agreement, in consideration of and in exchange for theacquisition of the entire equity interest in Optima Werkz from the then shareholders of Optima Werkzby Optima International, our Company (i) credited as fully-paid the 950,000 nil-paid Shares in issueof our Company (as mentioned in paragraph (a) above); and (ii) issued 5,681,970, 730,530, 726,750,580,869, 555,750 and 274,131 new Shares to Red Link, Mr. Chee, Mr. Chong,Ms. Ngo, Ms. Lam and Mr. Seow respectively, all credited as fully-paid at par.

(e) Pursuant to the written resolutions of our Shareholders passed on 18 September 2019, the authorisedshare capital of our Company was increased from HK$380,000 divided into 38,000,000 Shares toHK$160,000,000 divided into 16,000,000,000 Shares of a par value of HK$0.01 each by the creationof an additional of 15,962,000,000 Shares.

APPENDIX IV STATUTORY AND GENERAL INFORMATION

– IV-1 –

(f) Immediately following the completion of the Capitalisation Issue and the Share Offer (assuming thatthe Offer Size Adjustment Option is not exercised and without taking into account any Share whichmay be issued pursuant to the Share Option Scheme), the total issued share capital of our Companywill be HK$8,500,000 divided into 850,000,000 Shares of HK$0.01 each, fully-paid or credited asfully-paid, with 15,150,000,000 Shares which our Company is authorised to issue, remainingunissued.

(g) Other than pursuant to the exercise of the Offer Size Adjustment Option and any options which maybe granted under the Share Option Scheme and the exercise of the general mandate to issue Sharesreferred to in the paragraph headed ‘‘1. Further information about our Group – 1.3 Resolutions inwriting of our Shareholders passed on 18 September 2019’’ in this Appendix, our Company does nothave any present intention to issue any of the authorised but unissued share capital of our Companyand, without prior approval of our Shareholders in general meeting, no issue of Shares will be madewhich would effectively alter the control of our Company.

(h) Save as disclosed in this prospectus, there has been no alteration in our Company’s share capital sinceits incorporation.

1.3 Resolutions in writing of our Shareholders passed on 18 September 2019

Pursuant to the written resolutions passed by all of our Shareholders on 18 September 2019 among others:

(a) the Memorandum of Association and the Articles were approved and adopted to take effect on theListing Date;

(b) the authorised share capital of our Company was increased from HK$380,000 to HK$160,000,000 bythe creation of further 15,962,000,000 Shares;

(c) conditional on (A) the Listing Division of the Stock Exchange granting the listing of, and permissionto deal in, the Shares in issue and to be issued pursuant to the Share Offer and such grant andpermission not subsequently being revoked prior to the Listing Date; (B) the Price DeterminationAgreement between the Company and the Joint Global Coordinators (for themselves and on behalf ofthe Underwriters) being entered into on or before the Price Determination Date and such agreementnot having been subsequently terminated; and (C) the obligations of the Underwriters under theUnderwriting Agreements becoming and remaining unconditional (including the waiver of anycondition(s) by the Joint Global Coordinators (for themselves and on behalf of the Underwriters)) andthe Underwriting Agreements not being terminated in accordance with the terms of the UnderwritingAgreements or otherwise, in each case on or before the day falling 30 days after the date of thisprospectus:

(i) the Share Offer and the grant of the Offer Size Adjustment Option were approved and theDirectors were authorised to allot and issue the Offer Shares pursuant to the Share Offer andsuch number of Shares as may be required to be allotted and issued upon the exercise of theOffer Size Adjustment Option;

(ii) the rules of the Share Option Scheme (the principal terms of which are set forth in the paragraphheaded ‘‘4. Share Option Scheme’’ in this Appendix) were approved and adopted and theDirectors were authorised to approve any amendments to the rules of the Share Option Schemeas may be acceptable or not objected to by the Stock Exchange, and at their absolute discretionto grant options to subscribe for Shares thereunder and to allot, issue and deal with Sharespursuant to the exercise of options which may be granted under the Share Option Scheme and totake all such steps as may be necessary, desirable or expedient to carry into effect the ShareOption Scheme;


– IV-2 –

(iii) conditional on the share premium account of our Company being credited as a result of the issueof new Shares under the Share Offer, the Directors were authorised to capitalise HK$5,900,000standing to the credit of the share premium account of our Company by applying such sum inpaying up in full at par 590,000,000 Shares for allotment and issue to holders of Shares whosenames appear on the register of members of our Company at the close of business on18 September 2019 (or as they may direct) in proportion (as nearly as possible withoutinvolving fractions so that no fraction of a share shall be allotted and issued) to their thenexisting holdings in our Company and so that the Shares to be allotted and issued pursuant tothis resolution should rank pari passu in all respects with the then existing issued Shares and theDirectors were authorised to give effect to such capitalisation;

(iv) a general unconditional mandate (‘‘Issuing Mandate’’) was given to the Directors to exercise allpowers of our Company to allot, issue and deal with, otherwise than by way of rights issue, orscrip dividend schemes or similar arrangements providing for allotment of Shares in lieu of thewhole or in part of any dividend in accordance with the Articles of Association, or pursuant tothe exercise of any options which may be granted under the Share Option Scheme, or under theShare Offer or the Capitalisation Issue, or issue of Shares upon exercise of rights of subscriptionor conversion attaching to any warrants of our Company or any securities which are convertibleinto Shares, Shares with an aggregate number of Shares not exceeding the sum of (aa) 20% ofthe number of Shares in issue and to be issued immediately following completion of the ShareOffer and the Capitalisation Issue but excluding (where applicable) any Shares which may beissued pursuant to the exercise of the Offer Size Adjustment Option that may be granted underthe Share Option Scheme and (bb) the number of such Shares which may be repurchased by ourCompany pursuant to the authority granted to the Directors as referred to in sub-paragraph (v)below, until the conclusion of the next annual general meeting of our Company, or the date bywhich the next annual general meeting of our Company is required by the Articles ofAssociation or any applicable Cayman Islands law to be held, or the passing of an ordinaryresolution by our Shareholders revoking or varying the authority given to the Directors,whichever occurs first;

(v) a general unconditional mandate (‘‘Repurchase Mandate’’) was given to the Directors toexercise all powers of our Company to repurchase such number of Shares not exceeding 10% ofthe number of Shares in issue immediately following the completion of the Share Offer and theCapitalisation Issue but excluding (where applicable) any Shares which may be issued pursuantto the exercise of the Offer Size Adjustment Option that may be granted under the Share OptionScheme until the conclusion of the next annual general meeting of our Company, or the date bywhich the next annual general meeting of our Company is required by the Articles ofAssociation or any applicable Cayman Islands law to be held, or the passing of an ordinaryresolution by our Shareholders revoking or varying the authority given to the Directors,whichever occurs first; and

(vi) the extension of the general mandate to allot, issue and deal with Shares pursuant to sub-paragraph (iv) above by the addition of such Shares repurchased by our Company pursuant tosub-paragraph (v) above.


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1.4 Further information about our Group’s subsidiaries

The Company has five wholly-owned subsidiaries in total, one incorporated in the BVI and fourincorporated in Singapore. A summary of the corporate information of these five companies as at the LatestPracticable Date is set out as follows:

(a) Subsidiary incorporated in the BVI

Full name of company Optima International Limited

Date of incorporation 16 March 2018

Registered office Vistra Corporate Services Centre, Wickhams Cay II, Road Town,Tortola, VG1110, British Virgin Islands

Issued share capital US$100

Number of issued shares 100

Shareholder Our Company (100 shares)

Principal business activity Investment holding

(b) Subsidiaries incorporated in Singapore

i. Optima Werkz

Full name of company Optima Werkz Pte. Ltd.

Date of incorporation 18 May 2012

Registered office 6 Kung Chong Road, Alexandra Industrial Estate, Singapore159143

Issued share capital S$2,662,472

Number of issued shares 400,000 ordinary shares

Shareholder Optima International Limited (400,000 shares)

Principal business activities (i) Repair and maintenance of motor vehicles (includinginstallation of spare parts and accessories)

(ii) Repair and maintenance and spray painting of motorvehicles

(iii) Provision of car rental services


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ii. Optima Carz

Full name of company Optima Carz Pte. Ltd.

Date of incorporation 24 October 2014


Issued share capital S$1,000


Shareholder Optima Werkz (1,000 shares)

Principal business activities (i) Repair and maintenance of motor vehicles (includinginstallation of spare parts and accessories)

(ii) General wholesale trade of spare parts and accessoriesfor motor vehicles

iii. Optima De Auto

Full name of company Optima De Auto Pte. Ltd.

Date of incorporation 22 August 2013

Registered office 6 Kung Chong Road, Alexandra Industrial Estate,Singapore 159143




Principal business activity Repair, maintenance and spray painting of motor vehicles


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iv. Optima Werkz International

Full name of company Optima Werkz International Pte. Ltd. (formerly known asGrowth Dynamics Pte. Ltd.)

Date of incorporation 23 September 2015





Principal business activity Retail sale and general wholesale trade of spare parts andaccessories for motor vehicles

1.5 Reorganisation

In preparing for the Listing, the companies comprising our Group underwent the Reorganisation torationalise the corporate structure of our Group and our Company became the holding company of our Group.For further details, please refer to the paragraph headed ‘‘History, Reorganisation and Corporate Structure –

Reorganisation’’ in this prospectus.

1.6 Changes in share capital of the subsidiaries

The subsidiaries are listed in the accountants’ report set out in Appendix I to this prospectus.

Save as disclosed in the section headed ‘‘History, Reorganisation and Corporate Structure’’ in thisprospectus, there has been no alteration in the share capital of any of the subsidiaries of our Company within thetwo years immediately preceding the date of this prospectus.

1.7 Repurchases by our Company of our own securities

This section sets out information required by the Stock Exchange to be included in this prospectusconcerning the repurchase by our Company of our own securities.

(a) Provisions of the GEM Listing Rules

The GEM Listing Rules permit companies with a primary listing on the Stock Exchange to repurchasetheir own securities on the Stock Exchange subject to certain restrictions, the more important of which aresummarised below:

(i) Shareholders’ approval

All proposed repurchase of securities (which must be fully paid up in the case of shares) by acompany with a primary listing on the Stock Exchange must be approved in advance by an ordinaryresolution of the shareholders, either by way of general mandate or by specific approval of aparticular transaction.


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(ii) Source of funds

Repurchases must be funded out of funds legally available for the purpose in accordance withthe Memorandum and Articles of Association of our Company and the GEM Listing Rules and theapplicable laws of the Cayman Islands. A listed company may not repurchase its own securities onthe Stock Exchange for a consideration other than cash or for settlement otherwise than in accordancewith the trading rules of the Stock Exchange. Subject to the foregoing, under the Companies Lawsany repurchases by our Company may be made out of our Company’s profits, out of our Company’sshare premium account, out of the proceeds of a new issue of Shares made for the purpose of therepurchase or, if authorised by the Articles and subject to the Companies Laws, out of capital. Anyamount of premium payable on the purchase over the par value of the Shares to be repurchased mustbe out of profits or from sums standing to the credit of our Company’s share premium account or, ifauthorised by the Articles, and subject to the Companies Laws, out of capital.

(iii) Trading Restrictions

The total number of shares which a listed company may repurchase on the Stock Exchange isthe number of shares representing up to a maximum of 10% of the aggregate number of shares inissue. A company may not issue or announce a proposed issue of new securities for a period of 30days immediately following a repurchase (other than an issue of securities pursuant to an exercise ofwarrants, share options or similar instruments requiring our Company to issue securities which wereoutstanding prior to such repurchase) without the prior approval of the Stock Exchange. In addition, alisted company is prohibited from repurchasing its shares on the Stock Exchange if the purchase priceis 5% or more than the average closing market price for the five preceding trading days on which itsshares were traded on the Stock Exchange. The GEM Listing Rules also prohibit a listed companyfrom repurchasing its securities which would result in the number of the listed securities which are inthe hands of the public falling below the relevant prescribed minimum percentage as required by theStock Exchange. A company is required to procure that the broker appointed by it to effect arepurchase of securities discloses to the Stock Exchange such information with respect to therepurchase as the Stock Exchange may require.

(iv) Status of repurchased shares

All repurchased securities (whether effected on the Stock Exchange or otherwise) will beautomatically delisted and the certificates for those securities must be cancelled and destroyed.

(v) Suspension of repurchase

A listed company shall not make any repurchase of securities on the Stock Exchange at any timeafter inside information has come to its knowledge until the information is made publicly available. Inparticular, during the period of one month immediately preceding the earlier of (a) the date of theboard meeting (as such date is first notified to the Stock Exchange in accordance with the GEMListing Rules) for the approval of a listed company’s results for any year, half year, quarterly or anyother interim period (whether or not required under the GEM Listing Rules) and (b) the deadline forpublication of an announcement of a listed company’s results for any year or half-year under theGEM Listing Rules, or quarterly or any other interim period (whether or not required under the GEMListing Rules), and ending on the date of the results announcement, the listed company may notrepurchase its shares on the Stock Exchange other than in exceptional circumstances. In addition, theStock Exchange may prohibit a repurchase of securities on the Stock Exchange if a listed companyhas breached the GEM Listing Rules.


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(vi) Reporting requirements

Certain information relating to repurchases of securities on the Stock Exchange or otherwisemust be reported to the Stock Exchange not later than 30 minutes before the earlier of thecommencement of the morning trading session or any pre-opening session on the following businessday. In addition, a listed company’s annual report is required to disclose details regarding repurchasesof securities made during the year, including a monthly analysis of the number of securitiesrepurchased, the purchase price per share or the highest and lowest price paid for all such purchase,where relevant, and the aggregate prices paid.

(vii) Core connected persons

A listed company is prohibited from knowingly repurchasing securities on the Stock Exchangefrom a ‘‘core connected person’’, that is, a director, chief executive or Substantial Shareholder of ourCompany or any of its subsidiaries or their close associates and a core connected person is prohibitedfrom knowingly selling his securities to our Company.

(b) Reasons for repurchases

Our Directors believe that the ability to repurchase Shares is in the interests of our Company and ourShareholders. Repurchases may, depending on the circumstances, result in an increase in the net assets and/orearnings per Share. Our Directors have sought the grant of a general mandate to repurchase Shares to give ourCompany the flexibility to do so if and when appropriate. The number of Shares to be repurchased on anyoccasion and the price and other terms upon which the same are repurchased will be decided by the Directors atthe relevant time having regard to the circumstances then pertaining.

(c) Funding of repurchases and impact on working capital or gearing position

In repurchasing securities, our Company may only apply funds lawfully available for such purpose inaccordance with its Memorandum and Articles of Association, the GEM Listing Rules and the applicable laws ofthe Cayman Islands.

There could be a material adverse impact on the working capital or gearing position of our Company (ascompared with the position disclosed in this prospectus) in the event that the Repurchase Mandate were to becarried out in full at any time during the share repurchase period.

However, our Directors do not propose to exercise the general mandate to such extent as would, in thecircumstances, have a material adverse effect on the working capital requirements of our Company or the gearinglevels which in the opinion of our Directors are from time to time appropriate for our Company.


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(d) General

The exercise in full of the Repurchase Mandate, on the basis of 850,000,000 Shares in issue immediatelyfollowing the completion of the Capitalisation Issue and the Share Offer (without taking into account any Shareswhich may be issued upon the exercise of the Offer Size Adjustment Option, and the options which may begranted under the Share Option Scheme), could accordingly result in up to approximately 10% Shares beingrepurchased by our Company during the period prior to the earliest occurrence of any of the following:

(i) the conclusion of our next annual general meeting; or

(ii) the end of the period within which we are required by any applicable law or the Articles ofAssociation to hold our next annual general meeting; or

(iii) when varied or revoked by an ordinary resolution of our Shareholders in general meeting.

None of our Directors nor, to the best of their knowledge having made all reasonable enquiries, any of theirclose associates currently intends to sell any Shares to our Company.

Our Directors have undertaken to the Stock Exchange that, so far as the same may be applicable, they willexercise the Repurchase Mandate in accordance with the GEM Listing Rules and the applicable laws of theCayman Islands.

If, as a result of any repurchase of Shares, a Shareholder’s proportionate interest in the voting rights of ourCompany is increased, such increase will be treated as an acquisition for the purposes of the Takeovers Code.

Accordingly, a Shareholder or a group of Shareholders acting in concert could obtain or consolidate controlof our Company and become obliged to make a mandatory offer in accordance with Rule 26 of the TakeoversCode. Save as aforesaid, our Directors are not aware of any consequences which would arise under theTakeovers Code as a consequence of any repurchases pursuant to the Repurchase Mandate. Any repurchase ofShares that results in the number of Shares held by the public being reduced to less than 25% of the Shares thenin issue could only be implemented if the Stock Exchange agreed to waive the GEM Listing Rules requirementsregarding the public shareholding. It is believed that a waiver of this provision would not normally be givenother than in exceptional circumstances.

No connected person of our Company has notified our Company that he or she has a present intention tosell Shares to our Company, or has undertaken not to do so, if the Repurchase Mandate is exercised.

2. FURTHER INFORMATION ABOUT OUR BUSINESS

2.1 Summary of material contracts

The following contracts (not being contracts entered into in the ordinary course of business) were enteredinto by our Company or our subsidiaries within the two years preceding the date of this prospectus and are ormay be material:


– IV-9 –

(a) the API Subscription Agreement;

(b) the sale and purchase agreement dated 23 April 2018 entered into between Mr. Chew as vendor andOptima Werkz as purchaser, pursuant to which Mr. Chew agreed to sell to Optima Werkz 450ordinary shares in Optima Carz for a consideration of S$300,000;

(c) the Share Swap Agreement;

(d) the Deed of Indemnity; and

(e) the Public Offer Underwriting Agreement.

2.2 Intellectual property rights of our Group

As at the Latest Practicable Date, we had registered or had applied for the registration of the followingintellectual property rights which are material in relation to our business.

(a) Trademark

Registered Trademark

As at the Latest Practicable Date, our Group had registered and has the right to use thefollowing trademark:

Trademark Name of Owner Class Trademark number

Duration ofvalidity/Registrationdate

Place ofRegistration

1. Optima Werkz Pte Ltd 37 T1409318C 17 June 2014 –

17 June 2024Singapore

2. Optima Werkz Pte Ltd 37 40201808493P 8 May 2018 –

8 May 2028Singapore

3. Optima Werkz Pte Ltd 37 304520132 9 May 2018 –

8 May 2028Hong Kong

4. Optima Werkz Pte Ltd 37 1419912 10 May 2018 –

10 May 2028China

5. Optima Werkz Pte Ltd 37 1419912 10 May 2018 Indonesia

6. Optima Werkz Pte Ltd 37 4/5646/2018 24 May 2018 Myanmar

7. Optima Werkz Pte Ltd 37 4/13786/2018 3 January 2019 Myanmar

8. Optima Werkz Pte Ltd 37 40201821144S 17 October 2018 –

17 October 2028Singapore

9. Optima Werkz Pte Ltd 37 304760956 7 December 2018 to6 December 2028

Hong Kong

10. Optima Werkz Pte Ltd 37 TMZC35723552 21 August 2019 to20 August 2029

China


– IV-10 –

Trademarks under applications for registration

As at the Latest Practicable Date, applications had been made for the registration of thefollowing trademarks in the respective places:

No. TrademarkPlace ofApplication Class Application Number Application Date

1. Cambodia 37 1419912 10 May 2018

2. Thailand 37 1419912 10 May 2018

3. Japan 37 1419912 10 May 2018

4. Malaysia 37 2018060047 16 May 2018

5. Sri Lanka 37 229785 16 May 2018

6. Bangladesh 37 222979 16 May 2018

7. Cambodia 37 MM20180409Y 17 December 2018

8. Vietnam 37 MM20180409Y 17 December 2018

9. Indonesia 37 MM20180409Y 17 December 2018

10. Thailand 37 MM20180409Y 17 December 2018

11. Japan 37 MM20180409Y 17 December 2018

12. Bangladesh 37 229680 9 December 2018

13. Malaysia 37 2018016582 10 December 2018

14. Sri Lanka 37 237160 20 December 2018

(b) Domain Name

As at the Latest Practicable Date, our Group had registered the following domain name which ismaterial to our business:

Domain name Registrant Date of registration Expiry date

ow.sg Optima Werkz Pte Ltd 6 July 2012 6 July 2020


– IV-11 –

3. FURTHER INFORMATION ABOUT OUR DIRECTORS AND SUBSTANTIAL SHAREHOLDERS

3.1 Disclosure of Interests

(a) Interests and short position of our Directors and chief executive in our share capital, underlyingshares or debentures of our Company and the associated corporations

Immediately following the completion of the Capitalisation Issue and the Share Offer and withouttaking into account any Shares which may be issued upon the exercise of the Offer Size Adjustment Optionor any options which may be granted under the Share Option Scheme, the interests or short positions of theDirectors and the chief executive of our Company in the Shares, underlying Shares and debentures of ourCompany or its associated corporations (within the meaning of Part XV of the SFO) which will be requiredto be notified to our Company and the Stock Exchange pursuant to Divisions 7 and 8 of Part XV of theSFO (including interests or short positions which they were taken or deemed to have under such provisionsof the SFO) or which will be required, pursuant to Section 352 of the SFO, to be entered in the registerreferred to in that section, or which will be required, pursuant to Rules 5.46 to 5.67 of the GEM ListingRules, to be notified to our Company and the Stock Exchange, once the Shares are listed will be asfollows:

Name of DirectorNature ofinterest/Capacity

Number ofsharesheld (L)(Note)


Mr. Ang Interest of a controlled corporation 378,798,000 44.56%

Ms. LL Lim Interest of a controlled corporation 378,798,000 44.56%

Note: The letter ‘‘L’’ denotes long position in our Shares.

Save as disclosed in the sections headed ‘‘History, Reorganisation and Corporate Structure’’,‘‘Relationship with Controlling Shareholders’’ in this prospectus and the paragraphs headed ‘‘3.2.Directors’ service contracts and letters of appointment’’ and ‘‘3.4 Related party transactions’’ in thisAppendix, none of our Directors or their close associates was engaged in any dealings with our Groupduring the two years preceding the date of this prospectus.

(b) Interests of Substantial Shareholders

For the information on the persons, so far as our Directors are aware, who immediately following thecompletion of the Capitalisation Issue and the Share Offer (without taking into account any Shares whichmay be allotted and issued upon exercise of the Offer Size Adjustment Option or any options which may begranted under the Share Option Scheme), will have interests or short positions in the Shares and theunderlying Shares which would fall to be disclosed to our Company and the Stock Exchange under theprovisions of Divisions 2 and 3 of Part XV of the SFO, or will, directly or indirectly, be interested in 10%or more of the nominal value of any class of share capital carrying rights to vote in all circumstances atgeneral meetings of our Company, please see the section headed ‘‘Substantial Shareholders’’ in thisprospectus.


– IV-12 –

3.2 Directors’ service contracts and letters of appointment

Executive Directors

Each of our executive Directors has entered into a service agreement with our Company for a term ofthree years commencing from the Listing Date which may be terminated by either party giving not lessthan three months’ prior notice in writing and is subject to termination provisions therein and retirementand re-election at the annual general meetings of our Company in accordance with the Articles or any otherapplicable laws from time to time whereby he shall vacate his office.

Each of our executive Directors shall be entitled to the annual basic salary as follows:

Executive Directors Annual basic salaryS$

Mr. Ang 240,000Ms. Tan 144,000Ms. LL Lim 114,000

The annual basic salary payable by our Company to the relevant executive Director is subject toannual review by our Board and the remuneration committee of our Company. In addition, our executiveDirectors may be entitled to a discretionary bonus from time to time, if so recommended by theremuneration committee and approved by our Board at its absolute discretion, the amount of which isdetermined with reference to the financial performance of our Group and the individual performance of therelevant executive Director, provided that the relevant executive Director shall abstain from voting and notbe counted in the quorum in respect of any resolution approving the amount of annual salary, discretionarybonus and other benefits payable to him.


Each of our independent non-executive Directors has entered into a letter of appointment with ourCompany pursuant to which each of them has been appointed for an initial term of three years with effectupon Listing. Each independent non-executive Director is entitled to a director’s fee of HK$180,000 perannum. Save for the Directors’ fees, none of our independent non-executive Directors are expected toreceive any other remuneration for holding their respective offices.

3.3 Directors’ remuneration

(i) The aggregate emoluments paid and benefits in kind granted by our Group to the Directors in respectof FY2016, FY2017, FY2018 and 1Q2019 were approximately S$560,000, S$484,000, S$526,000 andS$124,000, respectively.

(ii) Under the arrangements currently in force, the aggregate emoluments (excluding discretionary bonus)payable by our Group to and benefits in kind receivable by our Directors (including our independentnon-executive Directors in their respective capacity as Directors) for the year ending 31 December2019 are approximately S$614,000.

(iii) None of the Directors or any past directors of any member of our Group has been paid any sum ofmoney for each of FY2016, FY2017, FY2018 and 1Q2019 (i) as an inducement to join or uponjoining our Company or (ii) for loss of office as a director of any member of our Group or of anyother office in connection with the management of the affairs of any member of our Group.


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(iv) There has been no arrangement under which a Director has waived or agreed to waive anyemoluments for each of FY2016, FY2017, FY2018 and 1Q2019.

3.4 Related party transactions

Details of the related party transactions are set out under Note 28 to the Accountants’ Report set out inAppendix I to this prospectus.

3.5 Disclaimers

(a) Save as disclosed in the paragraph headed ‘‘3. Further information about our Directors and substantialShareholders – 3.1 Disclosure of interests – (a) Interests and short position of our Directors and chiefexecutive in our share capital, underlying shares or debentures of our Company and the associatedcorporations’’ in this Appendix, none of the Directors or chief executive of our Company has anyinterests or short positions in the shares, underlying shares and debentures of our Company or itsassociated corporations (within the meaning of Part XV of the SFO) which will be required to benotified to our Company and the Stock Exchange pursuant to Divisions 7 and 8 of Part XV of theSFO (including interests and short positions which he is taken or deemed to have under suchprovisions of the SFO) or which will be required, pursuant to Section 352 of the SFO, to be enteredin the register referred to in that section, or will be required, pursuant to Rules 5.46 to 5.68 of theGEM Listing Rules relating to securities transactions by our Directors, to be notified to our Companyand the Stock Exchange, in each case once our Shares are listed on the Stock Exchange;

(b) save as disclosed in the paragraph headed ‘‘3. Further information about our Directors and substantialShareholders – 3.1 Disclosure of interests – (b) Interests of substantial Shareholders’’ in thisAppendix and in the section headed ‘‘Substantial Shareholders’’ in this prospectus, so far as is knownto any Director or chief executive of our Company, no person (other than a Director or chiefexecutive of our Company) has an interest or short position in the Shares and underlying Shareswhich would fall to be disclosed to our Company and the Stock Exchange under the provisions ofDivisions 2 and 3 of Part XV of the SFO, or is, directly or indirectly, interested in 10% or more ofthe nominal value of any class of share capital carrying rights to vote in all circumstances at generalmeetings of any other member of our Group once the Shares are listed on the Stock Exchange;

(c) save as disclosed in the sections headed ‘‘History, Reorganisation and Corporate Structure’’ and‘‘Relationship with Controlling Shareholders’’ in this prospectus, none of our Directors or the expertsnamed in the paragraph headed ‘‘6. Other information – 6.6 Qualifications of experts’’ in thisAppendix is interested in the promotion of, or in any assets which have been, within the two yearsimmediately preceding the issue of this prospectus, acquired or disposed of by or leased to anymember of our Group, or are proposed to be acquired or disposed of by or leased to any member ofour Group;

(d) save as disclosed in sections headed ‘‘History, Reorganisation and Corporate Structure’’ and‘‘Relationship with Controlling Shareholders’’ in this prospectus, none of our Directors is materiallyinterested in any contract or arrangement with our Group subsisting at the date of this prospectuswhich is unusual in its nature or conditions or which is significant in relation to the business of ourGroup;

(e) save in connection with the Underwriting Agreements, none of our Directors or the experts named inthe paragraph headed ‘‘6. Other information – 6.6 Qualifications of experts’’ in this Appendix has anyshareholding in any member of our Group or the right (whether legally enforceable or not) tosubscribe for or to nominate persons to subscribe for securities in any member of our Group;


– IV-14 –

(f) save for the Underwriting Agreements, none of the persons listed in the paragraph headed ‘‘6. Otherinformation – 6.6 Qualifications of experts’’ in this Appendix is materially interested in any contractor arrangement subsisting at the date of this prospectus which is significant in relation to the businessof our Group taken as a whole;

(g) save as disclosed in the paragraph headed ‘‘3. Further information about our Directors and substantialShareholders – 3.2 Directors’ service contracts and letters of appointment’’ in this Appendix, none ofour Directors has entered or has proposed to enter into any service agreements with our Company orany member of our Group (other than contracts expiring or determinable by the employer within oneyear without payment of compensation other than statutory compensation);

(h) so far as is known to our Directors, none of our Directors or their close associates or any Shareholder(which to the knowledge of our Directors owns 5% or more of the issued share capital of ourCompany) has any interest in any of the five largest customers or the five largest suppliers of ourGroup during the Track Record Period; and

(i) none of our Directors is interested in any business apart from our Group’s business which competesor is likely to compete, directly or indirectly, with the business of our Group.

4. SHARE OPTION SCHEME

4.1 Summary of terms

The following is a summary of the principal terms of the Share Option Scheme conditionally adopted by aresolution in writing passed by our then Shareholders on 18 September 2019:

(i) Purposes of the scheme

The purpose of the Share Option Scheme is to enable our Group to grant options to selectedparticipants as incentives or rewards for their contribution to our Group.

(ii) Who may join

Our Directors in accordance with the provisions of the Share Option Scheme and the GEM ListingRules, determine from time to time to make an offer of grant of option (‘‘Offer’’) to any person belongingto the following classes of eligible participants (‘‘Eligible Participants’’):

(a) any employee (whether full-time or part-time including any executive director but excluding anynon-executive director) of our Company, any of our subsidiaries or any entity (‘‘InvestedEntity’’) in which any member of our Group holds an equity interest;

(b) any non-executive directors (including independent non-executive directors) of our Company,any of our subsidiaries or any Invested Entity;

(c) any supplier of goods or services to any member of our Group or any Invested Entity;


– IV-15 –

(d) any customer of any member of our Group or any Invested Entity;

(e) any person or entity that provides research, development or other technological support to anymember of our Group or any Invested Entity;

(f) any shareholder of any member of our Group or any Invested Entity or any holder of anysecurities issued by any member of our Group or any Invested Entity;

(g) any adviser (professional or otherwise) or consultant to any area of business or businessdevelopment of any member of our Group or any Invested Entity; and

(h) any other group or classes of participants who have contributed or may contribute by way ofjoint venture, business alliance or other business arrangement to the development and growth ofour Group;

and, for the purposes of the Share Option Scheme, the Offer may be made to any company wholly-owned by one or more persons Eligible Participants.

For avoidance of doubt, the grant of any options by our Company for the subscription of Shares orother securities of our Group to any person who falls within any of the above classes of EligibleParticipants shall not, by itself, unless our Directors otherwise determine, be construed as a grant of optionunder the Share Option Scheme.

The eligibility of any of the Eligible Participants to an Offer shall be determined by our Directorsfrom time to time on our basis of the Directors’ opinion as to his/her contribution to the development andgrowth of our Group.

(iii) Maximum number of the Shares

(a) The maximum number of Shares which may be allotted and issued upon the exercise of alloutstanding options granted and yet to be exercised under the Share Option Scheme and anyother share option schemes adopted by our Group must not in aggregate exceed 30% of theshare capital of our Company in issue from time to time.

(b) The total number of the Shares which may be allotted and issued upon the exercise of alloptions (excluding, for this purpose, options which have lapsed in accordance with the terms ofthe Share Option Scheme and any other share option schemes of our Group) to be granted underthe Share Option Scheme and any other share option schemes of our Group must not inaggregate exceed 10% of the Shares in issue on the Listing Date, being 85,000,000 Shares(‘‘General Scheme Limit’’).


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(c) Subject to sub-paragraph (a) above but without prejudice to sub-paragraph (d) below, ourCompany may seek approval of the Shareholders in general meeting to refresh the GeneralScheme Limit provided that the total number of Shares which may be allotted and issued uponexercise of all options to be granted under the Share Option Scheme and any other share optionschemes of our Group must not exceed 10% of the Shares in issue as at the date of approval ofthe limit and, for the purpose of calculating the limit, options (including those outstanding,cancelled, lapsed or exercised in accordance with the Share Option Scheme and any other shareoption scheme of our Group) previously granted under the Share Option Scheme and any othershare option schemes of our Group will not be counted. The circular sent by our Company to theShareholders shall contain, among other information, the information required under Rule23.02(2)(d) of the GEM Listing Rules and the disclaimer required under Rule 23.02(4) of theGEM Listing Rules.

(d) Subject to sub-paragraph (a) above and without prejudice to sub-paragraph (c) above, ourCompany may seek separate Shareholders’ approval in general meeting to grant options beyondthe General Scheme Limit or, if applicable, the extended limit referred to in sub-paragraph (c)above to Eligible Participants specifically identified by our Company before such approval issought. In such event, our Company must send a circular to the Shareholders containing ageneric description of the specified participants, the number and terms of options to be granted,the purpose of granting options to the specified participants with an explanation as to how theterms of the options serve such purpose and such other information required under Rule23.02(2)(d) of the GEM Listing Rules and the disclaimer required under Rule 23.02(4) of theGEM Listing Rules.

(iv) Maximum entitlement of each Eligible Participants

Subject to sub-paragraph (v)(b) below, the total number of Shares issued and which may fall to beissued upon the exercise of the options granted under the Share Option Scheme and any other share optionschemes of our Group (including both exercised or outstanding options) to each grantee in any 12-monthperiod shall not exceed 1% of the issued share capital of our Company for the time being. Where anyfurther grant of options to a grantee under the Share Option Scheme would result in the Shares issued andto be issued upon exercise of all options granted and proposed to be granted (including exercised, cancelledand outstanding options) under the Share Option Scheme and any other share option schemes of our Groupin the 12-month period up to and including the date of such further grant representing in aggregate over 1per cent. of the Shares in issue, such further grant must be separately approved by the Shareholders ingeneral meeting of our Company with such grantee and his/her associates abstaining from voting. OurCompany must send a circular to the Shareholders and the circular must disclose the identity of theparticipant, the number and terms of the options to be granted (and options previously granted to suchparticipant), the information required under Rule 23.02(2)(d) of the GEM Listing Rules and the disclaimerrequired under Rule 23.02(4) of the GEM Listing Rules. The number and terms (including the exerciseprice) of options to be granted must be fixed before the approval of the Shareholders and the date of theBoard meeting for proposing such further grant should be taken as the date of grant for the purpose ofcalculating the exercise price under note (1) to Rule 23.03(9) of the GEM Listing Rules.


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(v) Grant of options to the Directors, chief executive or Substantial Shareholders of our Companyor their respective associates

(a) Without prejudice to sub-paragraph (b) below, any grant of options under the Share OptionScheme to a Director, chief executive or Substantial Shareholder of our Company or any of theirrespective associates must be approved by INEDs (excluding the INED who or whose associateis the proposed grantee of the option).

(b) Where any grant of options to a Substantial Shareholder or an INED or any of their respectiveassociates would result in the Shares issued and to be issued upon exercise of all options alreadygranted and to be granted (including options exercised, cancelled and outstanding) to suchperson in the 12-month period up to and including the date of such grant:

(aa) representing in aggregate over 0.1% of the Shares in issue; and

(bb) having an aggregate value, based on the closing price of the Shares at the date of eachoffer for the grant, in excess of HK$5 million;

such further grant of options must be approved by Shareholders in general meeting. Our Companymust send a circular to the Shareholders. All connected persons of our Company must abstain fromvoting in favour at such general meeting, except that any connected person may vote against therelevant resolution at the general meeting provided that his intention to do so has been stated in thecircular. Any vote taken at the meeting to approve the grant of such options must be taken on a poll.

Any change in the terms of options granted to a Substantial Shareholder or an INED or any of theirrespective associates must be approved by the Shareholders in general meeting.

(vi) Time of acceptance and exercise of option

An offer made to an Eligible Participant shall remain open for acceptance by the Eligible Participantconcerned (and by no other person) for a period of up to twenty-one (21) days from the date on which theoffer is made (‘‘Offer Date’’).

An option may be exercised in accordance with the terms of the Share Option Scheme at any timeduring a period to be determined and notified by the Directors to the grantee, which may commence fromthe date of the offer for the grant of options is made but shall end in any event not later than 10 years fromthe Offer Date subject to the provisions for early termination thereof. Unless otherwise determined by theDirectors and stated in the offer for the grant of options to the grantee, a grantee is not required to hold anoption for any minimum period before the exercise of an option granted to him/her.

Upon acceptance, the Eligible Participant shall remit HK$1.00 to the Company as consideration forthe grant.

(vii) Performance targets

Unless otherwise determined by the Directors and stated in the offer for the grant of options to agrantee, a grantee is not required to achieve any performance targets before the exercise of an optiongranted to him/her.


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(viii) Subscription price for the Shares and consideration for the option

The subscription price for an option to subscribe for the Shares granted pursuant to the Share OptionScheme shall be at the discretion of the Directors and shall not be less than the highest of (i) the closingprice of the Shares as stated in the Stock Exchange’s daily quotations sheet for trade in one or more boardlots of the Shares on the Offer Date; (ii) the average closing price of Shares as stated in the StockExchange’s daily quotations for the five business days immediately preceding the Offer Date; and (iii) thenominal value of a Share.

(ix) Ranking of the Shares

(a) The Shares allotted and issued upon the exercise of an option will be subject to all theprovisions of the Articles of Association of our Company for the time being in force and willrank pari passu in all respects with the then existing fully paid Shares in issue on the date onwhich the option is duly exercised or, if that date falls on a day when the register of members ofour Company is closed, the first day of the re-opening of the register of members (the‘‘Exercise Date’’) and accordingly will entitle the holders thereof to participate in all dividendsor other distributions paid or made on or after the Exercise Date other than any dividend orother distribution previously declared or recommended or resolved to be paid or made if therecord date therefor shall be before the Exercise Date. A Share allotted and issued upon theexercise of an option shall not carry voting rights until the name of the grantee has been dulyentered on the register of members of our Company as the holder thereof.

(b) Unless the context otherwise requires, references to ‘‘Shares’’ in this paragraph includereferences to shares in the ordinary equity share capital of our Company of such other nominalamount as shall result from any such sub-division, consolidation, re-classification or re-construction of the share capital of our Company.

(x) Restrictions on the time of the offer for the grant of options

Our Company may not make an offer for the grant of an option after inside information has come toour Company’s knowledge until we have announced the information. In particular, during the periodcommencing one month immediately preceding the earlier of (a) the date of the Board meeting (as suchdate is first notified to the Stock Exchange under the GEM Listing Rules) for the approval of ourCompany’s results for any year, half-year, quarterly or any other interim period (whether or not requiredunder the GEM Listing Rules), and (b) the deadline for our Company to publish an announcement of itsresults for any year, half-year, or quarterly or any other interim period (whether or not required under theGEM Listing Rules), and ending on the date of the results announcement, no option for the grant of optionsmay be made.

The Directors may not make any offer for the grant of option to an Eligible Participant who is aDirector during the periods or times in which Directors are prohibited from dealing in the Shares pursuantto Rules 5.46 to 5.68 of the GEM Listing Rules or any corresponding code or securities dealing restrictionsadopted by our Company.

(xi) Period of the Share Option Scheme

The Share Option Scheme will remain in force for a period of 10 years commencing from the date onwhich the Share Option Scheme is adopted.


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(xii) Rights on ceasing employment

If the grantee is an employee (whether full time or part time, including any executive Director butexcluding any non-executive Director) of the Company, any subsidiary of our Company or any InvestedEntity (‘‘Eligible Employee’’) and in the event of his/her ceasing to be an Eligible Employee for anyreason other than his/her death, ill-health or retirement in accordance with his/her contract of employmentor the termination of his/her employment on one or more of the grounds referred to in sub-paragraph (xiv)below before exercising his/her option in full, the option (to the extent not already exercised) will lapse onthe date of cessation or termination and shall not be exercisable unless the Directors otherwise determine inwhich event the grantee may exercise the option (to the extent not already exercised) in whole or in partwithin such period as the Directors may determine following the date of such cessation or termination,which shall be the last day on which the grantee was actually at work with our Company or subsidiary ofour Company or the Invested Entity whether salary is paid in lieu of notice or not.

(xiii) Rights on death, ill-health or retirement

If the grantee is an Eligible Employee and in the event of his/her ceasing to be an Eligible Employeeby reason of his/her death, ill-health or retirement in accordance with his/her contract of employmentbefore exercising the option in full, his/her personal representative(s), or, as appropriate, the grantee mayexercise the option (to the extent not already exercised) in whole or in part within a period of 12 monthsfollowing the date of cessation of his/her employment which date shall be the last day on which the granteewas at work with our Company or subsidiary of our Company or the Invested Entity whether salary is paidin lieu of notice or not or such longer period as the Directors may determine.

(xiv) Rights on dismissal

If the grantee is an Eligible Employee and in the event of his/her ceasing to be an Eligible Employeeby reason of a termination of his/her employment on the grounds that he/she has been guilty of persistentor serious misconduct, or has committed any act of bankruptcy or has become insolvent or has made anyarrangements or composition with his/her creditors generally, or has been convicted of any criminal offence(other than an offence which in the opinion of the Directors does not bring the grantee or our Group or theInvested Entity into disrepute), his/her option (to the extent not already exercised) shall lapse automaticallyon the date which the grantee ceases to be an Eligible Employee.

(xv) Rights on breach of contract

In respect of a grantee other than an Eligible Employee, (i) the Directors shall at their absolutediscretion determine that (a) (1) the grantee of any option or his/her associate has committed any breach ofany contract entered into between the grantee or his/her associate on the one part and any member of ourGroup or any Invested Entity on the other part; or (2) that the grantee has committed any act of bankruptcyor has become insolvent or is subject to any winding-up, liquidation or analogous proceedings or has madeany arrangement or composition with his/her creditors generally; or (3) the grantee could no longer makeany contribution to the growth and development of our Group by reason of the cessation of his/her relationswith our Group or by other reason whatsoever; and (b) the option granted to the grantee under the ShareOption Scheme shall lapse as a result of any event specified in sub-paragraphs (1), (2) or (3) above, his/heroption shall lapse automatically on the date on which the Directors have so determined.


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(xvi) Rights on a general offer, a compromise or arrangement

If a general or partial offer, whether by way of take-over offer, share repurchase offer, or scheme ofarrangement or otherwise in like manner is made to all the holders of Shares, or all such holders other thanthe offeror and/or any person controlled by the offeror and/or any person acting in association or concertwith the offeror, our Company shall use all reasonable endeavours to procure that such offer is extended toall the grantees on the same terms, mutatis mutandis, and assuming that they will become, by the exercisein full of the options granted to them, Shareholders. If such offer becomes or is declared unconditional orsuch scheme of arrangement is formally proposed to Shareholders of our Company, the grantee shall beentitled to exercise his/her option (to the extent not already exercised) to its full extent or to the extentspecified in the grantee’s notice to our Company in exercise of his/her option at any time thereafter and upto the close of such offer (or any revised offer) or the record date for entitlements under such scheme ofarrangement, as the case may be. Subject to the above, an option will lapse automatically (to the extent notexercised) on the date which such offer (or, as the case may be, the revised offer) closed or the relevantrecord date for entitlements under such scheme of arrangement, as the case may be.

(xvii) Rights on winding up

In the event of a resolution being proposed for the voluntary winding-up of our Company during theoption period, the grantee may, subject to the provisions of all applicable laws, by notice in writing to ourCompany at any time not less than two business days before the date on which such resolution is to beconsidered and/or passed, exercise his/her option (to the extent not already exercised) either to its fullextent or to the extent specified in such notice in accordance with the provisions of the Share OptionScheme and our Company shall allot and issue to the grantee the Shares in respect of which such granteehas exercised his/her option not less than one business day before the date on which such resolutions to beconsidered and/or passed whereupon he/she shall accordingly be entitled, in respect of the Shares allottedand issued to him/her in the aforesaid manner, to participate in the distribution of the assets of ourCompany available in liquidation pari passu with the holders of the Shares in issue on the day prior to thedate of such resolution. Subject thereto, all options then outstanding shall lapse and determine on thecommencement of the winding-up of our Company.

(xviii) Grantee being a company wholly-owned by eligible participants

If the grantee is a company wholly-owned by one or more Eligible Participants:

(aa) sub-paragraphs (xii), (xiii), (xiv) and (xv) shall apply to the grantee and to the options to suchgrantee, mutatis mutandis, as if such options had been granted to the relevant EligibleParticipant, and such options shall accordingly lapse or fall to be exercisable after the event(s)referred to in sub-paragraphs (xii), (xiii), (xiv) and (xv) shall occur with respect to the relevantEligible Participant; and

(bb) the options granted to the grantee shall lapse and determine on the date the grantee ceases to bewholly-owned by the relevant Eligible Participant provided that our Directors may in theirabsolute discretion decide that such options or any part thereof shall not so lapse or determinesubject to such conditions or limitations as they may impose.


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(xix) Adjustments to the subscription price

In the event of a capitalisation profits or reserves, rights issue, consolidation or sub-division of Sharesor reduction of the share capital of our Company whilst an option remains exercisable, the Company shallinstruct the auditors or an independent financial adviser to certify in writing the adjustment that ought intheir opinion fairly and reasonably to be made either generally or as regards any particular grantee to thenumber or nominal amount of Shares to which the Share Option Scheme or any option relates (insofar as itis/they are unexercised); and/or the subscription price for Shares on the exercise of any option; and/or thenumber of Shares comprised in an option or which remains comprised in an option, and an adjustment asso certified by such auditors or independent financial adviser shall be made, provided that, provided that(a) any adjustment shall give the grantee the same proportion of the issued share capital of our Companyfor which he/she would have been entitled to subscribe had he/she exercised all the Options held by him/her immediately prior to such adjustment; (b) no adjustment shall be made the effect of which would be toenable a Share to be issued at less than its nominal value; (c) the issue of Shares or other securities of ourGroup as consideration in a transaction may not be regarded as a circumstance requiring any adjustment;and (d) any adjustment must be made in compliance with the GEM Listing Rules and such applicable rules,codes and guidance notes of the Stock Exchange from time to time. In addition, in respect of anyadjustments referred to in this sub-paragraph, other than any adjustment made on a capitalisation issue,such auditors or independent financial adviser must confirm to our Directors in writing that the adjustmentssatisfy the requirements of the relevant provision of the GEM Listing Rules from time to time issued by theStock Exchange.

(xx) Cancellation of options

Any option granted but not exercised shall not be cancelled except with the prior written consent ofthe relevant grantee and the approval of our Directors.

When our Company cancels any option granted to a grantee but not exercised and issues newoption(s) to the same grantee, the issue of such new option(s) may only be made with available unissuedoptions (excluding the options so cancelled) within the General Scheme Limit or the limits approved by ourShareholders pursuant sub-paragraphs (iii) (c) and (iii) (d) above.

(xxi) Termination of the Share Option Scheme

Our Company may at any time by resolution in general meeting terminate the Share Option Schemeand in such event no further options shall be offered but in all other respects the provisions of the ShareOption Scheme shall remain in force to the extent necessary to give effect to the exercise of any options (tothe extent not already exercised) granted prior to the termination or otherwise as may be required inaccordance with the provisions of the Share Option Scheme and options (to the extent not alreadyexercised) granted prior to such termination shall continue to be valid and exercisable in accordance withthe Share Option Scheme.

(xxii) Rights are personal to the grantee

An option shall be personal to the grantee and shall not be transferable or assignable and no granteeshall in any way sell, transfer, charge, mortgage, encumber or otherwise dispose of or create any interest(legal or beneficial) whatsoever in favour of any third party over or in relation to any option or enter intoany agreements so to do, except with the prior written consent of our Directors.


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(xxiii) Lapse of option

An option shall lapse automatically (to the extent not already exercised) on the earliest of:

(a) the expiry of the option period in respect of such option;

(b) the expiry of the periods or dates referred to in paragraph (xii), (xiii), (xiv), (xv), (xvi), (xvii)and (xviii);

(c) the date on which the Directors exercise our Company’s right to cancel the option by reason of abreach of paragraph (xxii) above by the grantee; and

(d) upon winding up of our Company.

(xxiv) Miscellaneous

(a) The Share Option Scheme is conditional upon (1) the Listing Committee of the Stock Exchangegranting the listing of, and permission to deal in, such number of Shares to be allotted andissued pursuant to the exercise of any options which may be granted under the Share OptionScheme, such number being not less than that of the General Scheme Limit; (2) the passing ofthe necessary resolution to approve and adopt this Scheme in general meeting or by way ofwritten resolution of our Shareholder(s); (3) the obligations of the Underwriters under theUnderwriting Agreements referred to in the paragraph headed ‘‘Underwriting – Underwritingarrangement and expenses’’ in this prospectus becoming unconditional and not being terminatedin accordance with the terms of the Underwriting Agreement or otherwise; and (4) thecommencement of dealings in the Shares on GEM.

(b) The provisions of the Share Option Scheme relating to the matters governed by Rule 23.03 ofthe GEM Listing Rules shall not be altered to the advantage of grantees of the options exceptwith the approval of our Shareholders in general meeting.

(c) Any alterations to the terms and conditions of the Share Option Scheme which are of a materialnature or any change to the terms of options granted or agreed to be granted must be approvedby our Shareholders in general meeting, except where the alterations take effect automaticallyunder the existing terms of the Share Option Scheme.

(d) Any change to the authority of our Directors or the scheme administrators in relation to anyalteration to the terms of the Share Option Scheme shall be approved by our shareholders ingeneral meeting.

(e) The terms of the Share Option Scheme and any amended terms of the Share Option Scheme orthe options shall comply with the relevant requirements of the GEM Listing Rules.


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4.2 Present status of the Share Option Scheme

(i) Approval of the Listing Committee required

The Share Option Scheme is conditional on the Listing Committee of the Stock Exchange granting thelisting of, and permission to deal in, such number of Shares to be issued pursuant to the exercise of anyoptions which may be granted under the Share Option Scheme, such number being not less than that of theGeneral Scheme Limit.

(ii) Application for approval

Application has been made to the Listing Committee of the Stock Exchange for the listing of andpermission to deal in the Shares to be issued within the General Scheme Limit pursuant to the exercise ofany options which may be granted under the Share Option Scheme.

(iii) Grant of options

As at the date of this prospectus, no options have been granted or agreed to be granted under theShare Option Scheme.

(iv) Value of options

The Directors consider it inappropriate to disclose the value of options which may be granted underthe Share Option scheme as if they had been granted as at the Latest Practicable Date. Any such valuationwill have to be made on the basis of certain option pricing model or other methodology, which depends onvarious assumptions including, the exercise price, the exercise period, interest rate, expected volatility andother variables. As no options have been granted, certain variables are not available for calculating thevalue of options. The Directors believe that any calculation of the value of options as at the LatestPracticable Date based on a number of speculative assumptions would not be meaningful and would bemisleading to investors.

(v) Compliance with the GEM Listing Rules

The Share Option Scheme complies with Chapter 23 of the GEM Listing Rules.

5. ESTATE DUTY, TAX AND OTHER INDEMNITIES

Our Controlling Shareholders (the ‘‘Indemnifiers’’) have entered into the Deed of Indemnity with and infavour of our Company (for itself and as trustee for each of its subsidiaries) (being the material contract (d)referred to in the paragraph headed ‘‘2.1 Summary of material contracts’’ in this Appendix) to provideindemnities on a joint and several basis, in respect of, among other matters:

(a) any liability for Hong Kong estate duty which might be incurred by any member of our Group byreason of any transfer of property (within the meaning of sections 35 and 43 of the Estate DutyOrdinance (Chapter 111 of the Laws of Hong Kong) or the equivalent thereof under the laws of anyjurisdiction outside Hong Kong) to any member of our Group at any time on or before the ListingDate; and


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(b) tax liabilities (including but not limited to all actual fines, penalties, liabilities, costs, charges,expenses and interest in relation to taxation or deprivation of relief) which any member of our Groupmay properly incur in connection with (i) the investigation, the assessment or the contesting of anytaxation claim taken by or on behalf of the Inland Revenue Department of Hong Kong or any otherstatutory or governmental authority whatsoever in Hong Kong or any other part of the world; or (ii)the settlement of any claim under the Deed of Indemnity; or (iii) any legal proceedings in which anymember of our Group claims under or in respect of the Deed of Indemnity and in which judgment isgiven for any member of our Group; or (iv) the enforcement of any such settlement or judgment,falling on any member of our Group resulting from or by reference to any income, profits or gainsearned, accrued or received on or before the Listing Date or any event or transaction, matters orthings entered into or occurring on or before the Listing Date, whether alone or in conjunction withany circumstances whenever occurring and whether or not such tax liabilities are chargeable againstor attributable to any other person, firm, company or corporation.

The Indemnifiers are under no liability under the Deed of Indemnity in respect of any taxation:

(a) to the extent that provision or reserve has been made for such taxation in the audited accounts of anymember of our Group for any accounting period up to 31 March 2019;

(b) to the extent that such taxation or liability falling on any member of our Group in respect of theiraccounting periods commencing on 1 April 2019 and ending on the Listing Date, where such taxationor liability would not have arisen but for some act or omission of, or transaction voluntarily enteredinto by any member of our Group (whether alone or in conjunction with some other act, omission ortransaction, whenever occurring) without the prior written consent or agreement of the Indemnifiers,other than any such act, omission or transaction carried out, made or entered into pursuant to a legallybinding commitment created on or before 31 March 2019 or pursuant to any statement of intentionmade in this prospectus; or

(c) to the extent that such taxation liabilities or claim arise or are incurred as a result of the imposition oftaxation as a consequence of any retrospective change in the law, rules and regulations or theinterpretation or practice thereof by the Inland Revenue Department of Hong Kong, or any otherrelevant authority (whether in Hong Kong or any other part of the world) coming into force after thedate of the Deed of Indemnity or to the extent such taxation claim or liability for such taxation arisesor is increased by an increase in rates of taxation or claim after the date of the Deed of Indemnitywith retrospective effect; or

(d) to the extent that any provision or reserve made for taxation in the audited accounts of any member ofour Group up to 31 March 2019 which is finally established to be an over-provision or an excessivereserve in which case the Indemnifiers liability (if any) in respect of such taxation shall be reducedby an amount not exceeding such provision or reserve, provided that the amount of any suchprovision or reserve applied referred to in this paragraph to reduce the Indemnifiers’ liability inrespect of taxation shall not be available in respect of any such liability arising thereafter.

Under the Deed of Indemnity, each of the Indemnifiers has also jointly and severally undertaken toindemnify and at all times keep each member of our Group fully indemnified from any depletion in or reductionin value of its assets or any loss (including all legal costs and suspension of operation), cost, expenses, damagesor other liabilities which any member of our Group may incur or suffer arising from or in connection with theimplementation of the Reorganisation.


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Pursuant to the Deed of Indemnity, each of the Indemnifiers has jointly and severally undertaken toindemnify each member of our Group, among other indemnities, against:

(a) any costs, claims, damages, expenses, losses, penalties, liabilities, actions and proceedings which suchmember of our Group may incur, suffer, accrue, directly or indirectly, from any act of such memberof our Group arising from or in connection with any non-compliance of such member of our Group onor before the Listing Date, including not having paid all requisite tax or obtained all relevant ornecessary approvals, permits, licences and/or certificates for conducting its businesses, including butnot limited to the non-compliances as disclosed in this prospectus or all litigation, arbitration, claims,counter-claims, actions, complaints, demands, judgments and/or legal proceedings by or against anymember of our Group which was issued, accrued and/or arising from any act of any of such memberof our Group at any time on or before the Listing Date;

(b) any penalty which may be imposed on any member of our Group, or any costs, expenses and losseswhich such member of our Group may suffer in connection with such penalty, due to such member ofour Group’s failure to duly make all relevant filings or reports and supply all other informationrequired to be supplied to any relevant governmental authority, including but not limited to therelevant tax bureau and relevant administration of industry and commerce, or to observe any laws,regulations or rules in this regard; and

(c) any costs, claims, damages, expenses, losses, penalties, liabilities, actions and proceedings arisingfrom the relocation by such member of our Group arising from or in connection with the lessors’ lackof relevant title certificates or documents or the lessors’ registration default in relation to the leaseagreements to the extent that damages, if any, recovered from the relevant lessor are inadequate tocover the related costs of such member of our Group.

The provisions contained in the Deed of Indemnity are conditional on the conditions stated in the paragraphheaded ‘‘Structure and Conditions of the Share Offer – Conditions of the Share Offer’’ in this prospectus beingfulfilled or, to the extent permitted, waived by the relevant party. If such conditions are not fulfilled or, to theextent permitted, waived on or before the date falling 30 days from the date of this prospectus, or such later dateas the parties under the Deed of Indemnity may agree, the Deed of Indemnity shall become null and void andcease to have effect. Such conditions shall be deemed to be fulfilled on the Listing Date.

Our Directors have been advised that no material liability for estate duty under the laws of the CaymanIslands or the BVI is likely to fall on the members of our Group.

6. OTHER INFORMATION

6.1 Sponsor

The Sponsor has made an application on behalf of our Company to the Listing Committee of the StockExchange for the listing of, and permission to deal in, the Shares in issue and to be issued pursuant to the ShareOffer and any Shares which may be issued upon the exercise of any options which may be granted under theShare Option Scheme and the Offer Size Adjustment Option. All necessary arrangements have been made toenable such Shares to be admitted into CCASS.

The Sponsor is independent from our Company pursuant to Rule 6A.07 of the GEM Listing Rules. Thesponsor’s fees payable by us in respect of Orient Capital (Hong Kong) Limited services as sole sponsor for theListing is HK$4.5 million (excluding any disbursements).


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6.2 Litigation

Save as disclosed in the paragraph headed ‘‘Business – Litigation and potential claims’’ in this prospectus,as at the Latest Practicable Date, no member of our Group is engaged in any litigation, arbitration or claim ofmaterial importance, and no litigation, arbitration or claim of material importance is known to our Directors tobe pending or threatened by or against our Group member, that would have a material adverse effect on ourresults of operations or financial condition of our Group.

6.3 Preliminary expenses

The preliminary expenses of our Company are estimated to be approximately US$5,460 (equivalent toapproximately HK$42,500) and are payable by our Company.

6.4 Promoters

Our Company has no promoter for the purpose of the GEM Listing Rules. Within the two yearsimmediately preceding the date of this prospectus, no cash, securities or other benefit has been paid, allotted orgiven nor are any proposed to be paid, allotted or given to any promoters in connection with the Share Offer andthe related transactions described in this prospectus.

6.5 Agency fees or commissions received

Except as disclosed in the paragraph headed ‘‘Underwriting – Undertakings – Total commission, fee andexpenses’’ in this prospectus, no commissions, discounts, brokerages or other special terms have been granted inconnection with the issue or sale of any capital of any member of our Group within the two years immediatelypreceding the date of this prospectus.

6.6 Qualifications of experts

The qualifications of the experts who have given opinions and/or whose names are included in thisprospectus are as follows:

Name Qualification

Orient Capital (Hong Kong) Limited A licensed corporation under the SFO to carry out type 6(advising on corporate finance) regulated activities (asdefined in the SFO)

BDO Limited Certified public accountants

Conyers Dill & Pearman Cayman Islands Attorneys-at-law

Equity Law LLC Legal advisers as to Singapore law

Frost & Sullivan International Limited Industry consultant

6.7 Consents of experts

Each of the experts referred to in ‘‘6.6 Qualifications of experts’’ above, has given and has not withdrawnits consent to the issue of this prospectus with the inclusion of its report and/or letter and/or opinion (as the casemay be) and references to its name included in the form and context in which they appear.


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6.8 Binding effect

This prospectus shall have the effect, if an application is made in pursuance hereof, of rendering allpersons concerned bound by all of the provisions (other than the penal provisions) of Sections 44A and 44B ofthe Companies (WUMP) Ordinance insofar as applicable.

6.9 Taxation of holders of Shares

(a) Hong Kong

Dealings in Shares registered on our Company’s Hong Kong branch register of members will besubject to Hong Kong stamp duty. The sale, purchase and transfer of Shares are subject to Hong Kongstamp duty, the current rate of which is 0.2% of the consideration or, if higher, the value of the Sharesbeing sold or transferred.

Profits from dealings in the Shares arising in or derived from Hong Kong may also be subject toHong Kong profits tax.

(b) Cayman Islands

Under the present Cayman Islands law, there is no stamp duty payable in the Cayman Islands ontransfer of Shares.

(c) Consultation with professional advisers

Intending holders of Shares are recommended to consult their professional advisers if they are in anydoubt as to the taxation implications of subscribing for, purchasing, holding or disposing of or dealing inShares or exercising any rights attaching to them. It is emphasised that none of our Company, the Directorsor the other parties involved in the Share Offer can accept responsibility for any tax effect on, or liabilitiesof, holders of Shares resulting from their subscription for, purchase, holding or disposal of or dealing inShares or exercising any rights attaching to them.

6.10 Miscellaneous

(a) Within the two years immediately preceding the date of this prospectus:

(i) no share or loan capital of our Company or any of the subsidiaries has been issued or agreed tobe issued fully or partly paid either for cash or for a consideration other than cash, save asdisclosed in the section headed ‘‘History, Reorganisation and Corporate Structure’’ in thisprospectus;

(ii) no share or loan capital of our Company or any of our subsidiaries is under option or is agreedconditionally or unconditionally to be put under option;

(iii) neither our Company nor any of our subsidiaries have issued or agreed to issue any foundershares, management shares or deferred shares;

(iv) no commission has been paid or payable (except commissions to the Underwriters) forsubscription, agreeing to subscribe, procuring subscription or agreeing to procure subscription ofany Shares;


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(v) none of the equity and debt securities of our Company is listed or dealt with in any other stockexchange nor is any listing or permission to deal being or proposed to be sought; and

(vi) our Company has no outstanding convertible debt securities.

(b) Our principal register of members will be maintained by our principal registrar, Conyers TrustCompany (Cayman) Limited, in the Cayman Islands and our Hong Kong register of members will bemaintained by our Hong Kong Share Registrar in Hong Kong, Tricor Investor Services Limited.Unless our Directors otherwise agree, all transfer and other documents of title of Shares must belodged for registration with and registered by the Hong Kong Share Registrar and may not be lodgedin the Cayman Islands. All necessary arrangements have been made to enable the Shares to beadmitted to CCASS.

(c) Our Directors confirm that up to the date of this prospectus, there has been no material adversechange in the financial or trading position or prospects of our Group since 31 December 2018 (beingthe date to which the latest audited consolidated financial statements of our Group were made up).

(d) None of the equity and debt securities of our Company is listed or dealt with in any other stockexchange nor is any listing or permission to deal being or proposed to be sought.

(e) Our Directors have been advised that, under the Companies Law, the use of a Chinese name by ourCompany does not contravene the Companies Law.

(f) There is no arrangement under which future dividends are waived or agreed to be waived.

(g) There has not been any interruption in the business of our Group which may have or has had asignificant effect on the financial position of our Group in the 12 months preceding the date of thisprospectus.

6.11 Bilingual prospectus

The English language and Chinese language versions of this prospectus are being published separately, inreliance upon the exemption provided by Section 4 of the Companies Ordinance (Exemption of Companies andProspectuses from Compliance with Provisions) Notice (Chapter 32L of the Laws of Hong Kong).


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DOCUMENTS DELIVERED TO THE REGISTRAR OF COMPANIES IN HONG KONG

The documents attached to a copy of this prospectus and delivered to the Registrar of Companies in HongKong for registration were, among other documents:

(a) a copy of each of the WHITE and YELLOW Application Forms;

(b) the written consents referred to under the paragraph headed ‘‘6. Other information – 6.7 Consents ofexperts’’ in Appendix IV to this prospectus, and

(c) a copy of each of the material contracts referred to under the paragraph headed ‘‘2. Furtherinformation about our business – 2.1 Summary of material contracts’’ in Appendix IV to thisprospectus.

DOCUMENTS AVAILABLE FOR INSPECTION

Copies of the following documents will be available for inspection at the office of Li & Partners at 22/F,World-Wide House, 19 Des Voeux Road Central, Central, Hong Kong during normal business hours up to andincluding the date which falls on 14 days from the date of this prospectus:

(a) the Memorandum and Articles of Association;

(b) the Accountants’ Report prepared by BDO Limited in respect of the historical financial information ofour Group for FY2016, FY2017, FY2018 and 1Q2019, the text of which is set out in Appendix I inthis prospectus;

(c) the audited consolidated financial statements of our Group for FY2016, FY2017, FY2018 and1Q2019;

(d) the report on the unaudited pro forma financial information of our Group prepared by BDO Limited,the text of which is set out in Appendix II in this prospectus;

(e) the Companies Law;

(f) the legal opinion issued by Equity Law LLC, our Singapore legal adviser, in respect of certain aspectsof our Group and the property interests of our Group;

(g) the letter of advice prepared by Conyers Dill & Pearman, summarising certain aspects of CaymanIslands company law referred to in Appendix III in this prospectus;

(h) the material contracts referred to in the paragraph headed ‘‘2. Further information about our business– 2.1 Summary of material contracts’’ in Appendix IV to this prospectus;

(i) the written consents referred to in the paragraph headed ‘‘6. Other information – 6.7 Consents ofexperts’’ in Appendix IV to this prospectus;

(j) Frost & Sullivan Report;

(k) the rules of the Share Option Scheme; and

(l) the service contracts and/or letters of appointment entered into between our Company and each of theDirectors.

APPENDIX V DOCUMENTS DELIVERED TO THE REGISTRAR OF COMPANIESIN HONG KONG AND AVAILABLE FOR INSPECTION

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Op

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傲迪瑪汽車集團控股有限公司

Optima Automobile Group Holdings Limited傲迪瑪汽車集團控股有限公司