COMPANY OVERVIEW · company overview sheng siong group ltd. 6 mandai link singapore 728652 tel: +65...

SHENG SIONG GROUP LTD.(Company Registration No.: 201023989Z)

(Incorporated in the Republic of Singapore on 10 November 2010)

COMPANY OVERVIEW

SHENG SIONG GROUP LTD.

6 Mandai LinkSingapore 728652

Tel: +65 6895 1888Fax: +65 6269 8265

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THIS DOCUMENT IS IMPORTANT. IF YOU ARE IN ANY DOUBT AS TO THE ACTION YOU SHOULD TAKE, YOU SHOULD CONSULT YOUR LEGAL, FINANCIAL, TAX OR OTHER PROFESSIONAL ADVISER.

We have applied to the Singapore Exchange Securities Trading Limited (the “SGX-ST”) for permission to deal in and for quotation of all the ordinary shares (the “Shares”) in the capital of Sheng Siong Group Ltd. (the “Company”) already issued (including the Vendor Shares as defi ned herein), the new Shares (the “New Shares”), the additional new Shares which may be issued upon the exercise of the Over-allotment Option (as defi ned herein) (the “Over-allotment Shares”) and the shares which may be issued upon the exercise of Options to be granted under the Sheng Siong ESOS (as defi ned herein) (the “Option Shares”) which are the subject of this Invitation (as defi ned herein). Such permission will be granted when we have been admitted to the Offi cial List of the Main Board of the SGX-ST. The dealing in and quotation of our Shares will be in Singapore dollars.

Acceptance of applications will be conditional upon, inter alia, the issue of the New Shares and upon permission being granted to deal in and for quotation of all our existing issued Shares (including the Vendor Shares), the New Shares, the Over-allotment Shares (if the Over-allotment Option is exercised) and the Option Shares. If permission is not granted for any reason, monies paid in respect of any application accepted will be returned to you at your own risk, without interest or any share of revenue or other benefi t arising therefrom, and you will not have any claim against us, the Vendors, the Issue Manager, Underwriter and Placement Agent.

The SGX-ST assumes no responsibility for the correctness of any of the statements made, opinions expressed or reports contained in this Prospectus. Admission to the Offi cial List of the SGX-ST is not to be taken as an indication of the merits of the Invitation, our Company, our Subsidiaries, our existing issued Shares (including the Vendor Shares), the New Shares, the Over-allotment Shares (if the Over-allotment Option is exercised) or the Option Shares.

In connection with the Invitation, we have granted to the Issue Manager the Over-allotment Option exercisable in whole or in part for up to 52,725,000 Over-allotment Shares representing not more than 15% of the Invitation Shares, within 30 days from the date of commencement of dealing of our Shares on the SGX-ST, at the Issue Price, solely for the purpose of covering over-allotments (if any) made in connection with the Invitation. The Issue Manager may over-allot and effect transactions which stabilise or maintain the market prices of our Shares at levels which may not otherwise prevail in the open market, subject to compliance with all applicable laws and regulations. Such stabilisation, if commenced, may be discontinued by the Issue Manager at any time at its discretion, subject to compliance with all applicable laws and regulations. The total number of issued Shares immediately after the completion of the Invitation will not change as a result of the exercise of the Over-allotment Option.

A copy of this Prospectus has been lodged with and registered by the Monetary Authority of Singapore (the “Authority”) on 30 June 2011 and 4 August 2011 respectively. The Authority assumes no responsibility for the contents of this Prospectus. Registration of this Prospectus by the Authority does not imply

Registered by the Monetary Authority of Singapore on 4 August 2011

Hypermarket

LOCATION

Issue Manager, Underwriter and Placement Agent

OUR PRODUCTS & HOUSEBRANDS

We are one of Singapore’s largest retailers with over S$628.4 million in revenue for FY2010, and we are principally engaged in operating the Sheng Siong Groceries Chain, including 23 stores all across Singapore as at the Latest Practicable Date*.

Our stores are primarily located in retail locations in the heartlands of Singapore, and designed to provide our customers with both “wet and dry” shopping options, including a wide assortment of live, fresh and chilled produce, such as seafood, meat and vegetables, in addition to processed, packaged and/ or preserved food products as well as general merchandise such as toiletries and essential household products.

We have also developed a selection of housebrands to offer our customers quality alternatives to national brands at substantial savings. As at the Latest Practicable Date*, we offer over 300 products under our 10 housebrands.

To support our retail operations, we also have an extensive distribution network, food-processing facilities, and warehousing facilities. In May 2011, we completed construction of building our new corporate headquarters and warehousing and distribution centre at Mandai Link, at an estimated cost of up to S$65 million.*Latest Practicable Date as at 24 June 2011

that the Securities and Futures Act (as defi ned herein), or any other legal or regulatory requirements, have been complied with. The Authority has not, in any way, considered the merits of our Shares (including the Vendor Shares), the New Shares and the Over-allotment Shares (if the Over-allotment Option is exercised), as the case may be, being offered for investment. We have not lodged or registered this Prospectus in any other jurisdiction.

The investment in our Shares involves risks which are described in the section entitled “Risk Factors” of this Prospectus. No Shares shall be allotted and/or allocated on the basis of this Prospectus later than six (6) months after the date of registration of this Prospectus by the Authority. Hypermarket

Supermarkets Wet market stalls

NORTH

SOUTH

EASTWEST CENTRAL

Stores island-wide:

1

Supermarkets22

Wet market stalls3

Frozen Food

Dry GoodsFresh Seafood

Fresh Product

Rice

Beverages

Invitation in respect of 351,500,000 Invitation Shares comprising 201,500,000 New Shares and 150,000,000 Vendor Shares as follows:

(1) 15,000,000 Offer Shares at S$0.33 for each Offer Share by way of public offer; and

(2) 336,500,000 Placement Shares at S$0.33 for each Placement Share by way of placement,

payable in full on application (subject to the Over-allotment Option).

Applications should be received by 12.00 noon on 15 August 2011 or such other time and date as our Company may, in consultation with the Issue Manager, decide, subject to any limitation under all applicable laws.

THIS DOCUMENT IS IMPORTANT. IF YOU ARE IN ANY DOUBT AS TO THE ACTION YOU SHOULD TAKE, YOU SHOULD CONSULT YOUR LEGAL,


that the Securities and Futures Act (as defi ned herein), or any other legal or regulatory requirements, have been complied with. The Authority has not, in

COMPETITIVE STRENGTHS

Effi ciency Ratios FY2008 FY2009 FY2010

Inventory turnover (days) 18 19 19

Trade receivables turnover (days) 1 1 1

Trade payables turnover (days) 30 34 37

630

625

620

615

610

605

600 FY2008 FY2009 FY2010

610.2

625.3628.4

Revenue (S$’ m)

45

40

35

30

25

20

15

10

0 FY2008 FY2009 FY2010

3.4%

5.4%

6.8%

Net Profi t (S$’ m) & Net Profi t Margin (%)

Earnings Per Share (S’ cents**)

4.0

3.5

3.0

2.5

2.0

1.5

1.0

0.5

0 FY2008 FY2009 FY2010

1.80

2.95

3.74

For comparative purposes, earnings per share is calculated based on profi t for the year and the pre-Invitation share capital of 1,140,000,000 Shares.

**

* Latest Practicable Date as at 24 June 2011

Catering to the needs of customers with a wide product range and extended operating hours

Extensive knowledge of Singapore’s consumer preferences and consumption patterns enables us to cater to the daily needs of customers by providing a

(i) wide selection of quality products; and (ii) selection of certain food products including spices, sauces, noodles and canned foods which we believe are

not commonly found in our competitors’ stores

Each of our stores is open between 15 to 16 hours a day, enabling our customers to purchase groceries and other household necessities at their convenience

Centralised logistics and distribution centreMaintain centralised warehouse and distribution centre to meet the stores’ logistical demands

Computerised systems facilitate effi cient operationsComputerised systems (including the Management Information System) assist in controlling and replenishing inventory levels, and in analyzing various aspects of business and operations

FINANCIAL HIGHLIGHTS

OUR NEW WAREHOUSE

Economies of scale in terms of manpower, transportations and fuel costsOptimise inventory holdingsIncrease operational effi ciency and productive capacityLower distribution cost

Benefi ts

Located at Mandai Link Completed in May 2011 Estimated cost of up to S$65 millionFloor area of 543,090 sq. ft.

140

135

130

125

120

115

110

105

100 FY2008 FY2009 FY2010

18.7%

20.5%

21.8%

Gross Profi t (S$’ m) & Gross Profi t Margin (%)

22.0

21.0

20.0

19.0

18.0

17.0

8.0

7.0

6.0

5.0

4.0

3.0

2.0

1.0

0.0

Established and distinctive household brand name in SingaporeLong history and reputation for quality products at competitive prices led to the “Sheng Siong” brand name becoming an established brand name in Singapore

Dedicated key management personnel with extensive experienceExperienced key management team with decades of hands-on experience and in-depth knowledge of the grocery retailing industry

Offering of quality products at competitive pricesPlace great importance on product quality via strict selection of suppliers and quality checks upon the receipt of the products

Ability to price products competitively and pass on the benefi ts to consumers through:

Centrally-controlled purchases and economies of scale via bulk purchasesDirect procurement from suppliers and contract manufacturers, bypassing the intermediaries and associated costsLaunch of 10 housebrands which are typically priced lower than comparable international or national brands

Established relationships with suppliers and contract manufacturersEstablished a large network of over 1,000 suppliers and contract manufacturers* and some of these business dealings were formed since 1985

Growth in Singapore’s consumer sector is generally represented by the growth trend of Singapore’s economy and the size and purchasing power of its population.

i) Growth trend of Singapore’s economySingapore’s gross domestic product (“GDP”) has been growing at a compound annual growth rate (“CAGR”) of approximately 8.9%, from approximately S$208.8 billion in 2005, to approximately S$319.5 billion in 2010.

ii) Size and purchasing power of its populationSingapore’s population has grown at a rate of approximately 3.5% between 2005 and 2010. In 2010, Singapore’s population reached 5.1 million. Meanwhile, Singapore’s disposable income per capita increased from approximately S$28,180 per annum in 2005 to S$32,240 per annum in 2010, recording a CAGR of approximately 2.7%.

Stable business with strong cash fl ow

Established & distinctive brand name

Singapore’s third largest grocery retail chain*

New distribution centre to improve operational effi ciency

Dividends: Up to 90% of our net profi t after tax FY2011 and FY2012

Source: Independent Market Research Report on Chain Supermarket Industry (CSI) in Singapore by Frost & Sullivan (S) Pte Ltd in March 2011

*Source: Independent Market Research Report on Chain Supermarket Industry (CSI) in Singapore by Frost & Sullivan (S) Pte Ltd in March 2011

INDUSTRY OVERVIEW

INVESTMENT MERIT

OVERVIEW

FUTURE PLANS

Subscribe now via OCBC Bank, DBS Bank and United Overseas Bank Limited ATMs islandwide or on printed white application forms which form part of the Prospectus, in the manner set out in the Prospectus.

IPO TIMETABLE5 August 2011, 9.00 a.m. Opening date and time of public offer

15 August 2011, 12.00 noon Closing date and time of the public offer

17 August 2011, 9.00 a.m. Commencement of trading on SGX-ST

Expand store networkContinue increasing the number of our stores to enhance economies of scale and further capitalize on our Group’s existing infrastructure

May open new stores either in Singapore or overseas and may also consider expanding through acquisitions

New Mandai Link Distribution CentreWarehouse, process and distribute proportionately larger quantities of goods, and thus benefi t from economies of scale in terms of manpower, transportation and fuel costs

Increase productivity, economies of scale, quality and profi tabilityContinue to upgrade our computer network systems, including our Management Information System

Continue to capitalise on our Group’s economies of scale, as well as the strong and well-established relationships we have built over the years with our suppliers and contract manufacturers

Increase our purchases direct from product sources, in order to eliminate middlemen expenses and reduce costs, as well as to increase our control over the quality and freshness of the products we retail

Expand selection of housebrands and housebrand products Strengthen relationships with our existing contract manufacturers to secure more favourable terms and prices

Establish relationships with new contract manufacturers to increase selection and types of housebrand products

CORPORATE INFORMATION ............................................................................................................. 4

DEFINITIONS ....................................................................................................................................... 6

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS ...................................... 14

PROSPECTUS SUMMARY ................................................................................................................. 16

Overview of our Group ............................................................................................................... 16

Our Business .............................................................................................................................. 16

Our Competitive Strengths ......................................................................................................... 16

Our Business Strategies And Future Plans ............................................................................... 17

Our Financial Performance ........................................................................................................ 18

Our Contact Details .................................................................................................................... 19

THE INVITATION.................................................................................................................................. 20

Listing on the SGX-ST ............................................................................................................... 20

Details of the Invitation ............................................................................................................... 24

Invitation Statistics...................................................................................................................... 26

Plan of Distribution ..................................................................................................................... 28

Over-allotment and Stabilisation ................................................................................................ 29

Share Lending ............................................................................................................................ 29

Selling Restrictions ..................................................................................................................... 30

Clearance and Settlement .......................................................................................................... 30

Indicative Timetable for Listing ................................................................................................... 31

USE OF PROCEEDS AND LISTING EXPENSES .............................................................................. 33

RISK FACTORS ................................................................................................................................... 35

Risks relating to our Business and Operations .......................................................................... 35

Risks relating to Investment in our Shares ................................................................................ 42

EXCHANGE CONTROLS AND EXCHANGE CONTROL INFORMATION ......................................... 45

DIVIDEND POLICY .............................................................................................................................. 48

CAPITALISATION AND INDEBTEDNESS .......................................................................................... 49

DILUTION ............................................................................................................................................. 51

INDUSTRY OVERVIEW ....................................................................................................................... 52

GENERAL INFORMATION OF OUR GROUP .................................................................................... 58

Our History and Development .................................................................................................... 58

Restructuring Exercise ............................................................................................................... 60

Our Corporate Structure ............................................................................................................ 61

Our Business .............................................................................................................................. 62

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TABLE OF CONTENTS

Intellectual Property ................................................................................................................... 68

Insurance .................................................................................................................................... 76

Inventory Management............................................................................................................... 76

Credit Management .................................................................................................................... 76

Major Suppliers .......................................................................................................................... 77

Major Customers ........................................................................................................................ 77

Properties ................................................................................................................................... 77

Permits, Licences, Approvals, Certifications and Government Regulations .............................. 79

Competition ................................................................................................................................ 84

Competitive Strengths ................................................................................................................ 84

SELECTED COMBINED FINANCIAL INFORMATION ....................................................................... 86

Selected Combined Results of Operations of our Group........................................................... 86

Selected Combined Financial Position of our Group ................................................................. 87

MANAGEMENT’S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL POSITION ............................................................................................................... 88

Introduction ................................................................................................................................. 88

Significant Factors Affecting Our Results of Operations ............................................................ 88

Results of Operations ................................................................................................................. 88

Review of Financial Position ...................................................................................................... 94

Liquidity and Capital Resources ................................................................................................ 96

Capital Expenditures and Divestments ...................................................................................... 98

Operating Lease Commitments ................................................................................................. 99

Foreign Exchange Exposure ...................................................................................................... 99

Inflation ....................................................................................................................................... 99

PROSPECTS, BUSINESS STRATEGIES AND FUTURE PLANS ..................................................... 100

Our Prospects ............................................................................................................................ 100

Trend Information ....................................................................................................................... 101

Our Business Strategies and Future Plans ................................................................................ 102

SHARE CAPITAL AND SHAREHOLDERS ........................................................................................ 104

Shareholders .............................................................................................................................. 106

Vendors ...................................................................................................................................... 107

Moratorium ................................................................................................................................. 107

2

TABLE OF CONTENTS

DIRECTORS, MANAGEMENT AND STAFF ....................................................................................... 108

Management Reporting Structure .............................................................................................. 108

Directors ..................................................................................................................................... 109

Key Executives ........................................................................................................................... 113

Material Background Information on our Directors, Key Executives and Controlling Shareholders ............................................................................................................ 119

Service Agreements ................................................................................................................... 121

Directors’ and Key Executives’ Remuneration ............................................................................ 122

Employees .................................................................................................................................. 123

Sheng Siong ESOS .................................................................................................................... 124

INTERESTED PERSON TRANSACTIONS AND CONFLICT OF INTERESTS .................................. 129

Interested Person Transactions and Conflict of Interests ........................................................... 129

Entities related to our Founders ................................................................................................. 129

Past Interested Person Transactions .......................................................................................... 129

On-going Interested Person Transactions .................................................................................. 134

Review Procedures for Interested Person Transactions ............................................................. 138

Potential Conflict of Interests ..................................................................................................... 139

CORPORATE GOVERNANCE ............................................................................................................ 141

Board Practices .......................................................................................................................... 141

Term of Office ............................................................................................................................. 141

Nominating Committee ............................................................................................................... 141

Remuneration Committee .......................................................................................................... 141

Audit Committee ......................................................................................................................... 142

OTHER GENERAL INFORMATION .................................................................................................... 144

APPENDIX A: INDEPENDENT AUDITORS’ REPORT AND THE COMBINED FINANCIAL STATEMENTS FOR THE FINANCIAL YEARS ENDED 31 DECEMBER 2008, 2009 AND 2010 ...... A-1

APPENDIX B: INDEPENDENT AUDITORS’ REPORT AND THE PROFORMA FINANCIAL INFORMATION FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2010 ................................... B-1

APPENDIX C: SUMMARY OF MEMORANDUM AND ARTICLES OF ASSOCIATION OF OUR COMPANY ............................................................................................................................ C-1

APPENDIX D: DESCRIPTION OF OUR SHARES ............................................................................. D-1

APPENDIX E: TERMS, CONDITIONS AND PROCEDURES FOR APPLICATION AND ACCEPTANCE ............................................................................................................................ E-1

APPENDIX F: TAXATION .................................................................................................................... F-1

APPENDIX G: SUMMARY OF RELEVANT MALAYSIAN LAWS AND REGULATIONS ................... G-1

APPENDIX H: RULES OF SHENG SIONG ESOS ............................................................................. H-1

3

TABLE OF CONTENTS

BOARD OF DIRECTORS : Mr. Lim Hock Chee, Executive DirectorMr. Lim Hock Eng, Executive DirectorMr. Lim Hock Leng, Executive DirectorMr. Tan Ling San, Executive DirectorMr. Goh Yeow Tin, Lead Independent DirectorMr. Jong Voon Hoo, Independent DirectorMr. Francis Lee Fook Wah, Independent DirectorMr. Lee Teck Leng, Robson, Non-Executive Director

COMPANY SECRETARY : Lim Chong Hwee(LLB (Hons))

REGISTERED OFFICE : 6 Mandai LinkSingapore 728652

ISSUE MANAGER, UNDERWRITER AND PLACEMENT AGENT

: Oversea-Chinese Banking Corporation Limited65 Chulia Street#09-00 OCBC CentreSingapore 049513

AUDITORS OF THE COMPANY AND REPORTING ACCOUNTANTS

: KPMG LLP16 Raffles Quay#22-00 Hong Leong BuildingSingapore 048581

SOLICITORS TO THE INVITATION AND LEGAL ADVISERS TO THE COMPANY ON SINGAPORE LAW

: Shook Lin & Bok LLP1 Robinson Road#18-00 AIA TowerSingapore 048542

LEGAL ADVISERS TO THE COMPANY ON MALAYSIAN LAW

: Zul Rafique & PartnersD3-3-8 Solaris DutamasNo. 1 Jalan Dutamas 150480 Kuala LumpurMalaysia

SOLICITORS TO THE ISSUE MANAGER, UNDERWRITER AND PLACEMENT AGENT

: TSMP Law Corporation6 Battery RoadLevel 41Singapore 049909

SHARE REGISTRAR AND SHARE TRANSFER AGENT

: Boardroom Corporate & Advisory Services Pte. Ltd.50 Raffles Place#32-01 Singapore Land TowerSingapore 048623

PRINCIPAL BANKERS : Oversea-Chinese Banking Corporation Limited65 Chulia Street#09-00 OCBC CentreSingapore 049513

DBS Bank Ltd.6 Shenton WayDBS Building Tower OneSingapore 068809

4

CORPORATE INFORMATION

RECEIVING BANK : Oversea-Chinese Banking Corporation Limited65 Chulia Street#09-00 OCBC CentreSingapore 049513

VENDORS : Mr. Lim Hock CheeBlock 468 Hougang Avenue 8#02-1502 Singapore 530468

Mr. Lim Hock EngBlock 127 Ang Mo Kio Avenue 3#06-1899 Singapore 560127

Mr. Lim Hock Leng207 Ponggol Seventeenth AvenueSingapore 827945

INDUSTRY EXPERT : Frost & Sullivan (S) Pte Ltd100 Beach Road#29-01/11 Shaw TowerSingapore 189702

5

CORPORATE INFORMATION

In this Prospectus and the accompanying Application Forms and, in relation to Electronic Applications, the instructions appearing on the screens of the ATMs of Participating Banks and the internet banking websites of the relevant Participating Banks, unless the context otherwise requires, the following definitions apply throughout where the context so admits:

Entities within our Group

“CMM Marketing” : C M M Marketing Management Pte. Ltd.

“Company” or “Holding Company” : Sheng Siong Group Ltd.

“Shing Song” : Shing Song Supermarket

“Shng Siong” : Shng Siong Supermarket

“SS 1” : Sheng Siong 1 Station Market

“SS Groceries” : Sheng Siong Groceries

“SS Hypermart” : Sheng Siong Hypermart

“SS Malaysia” : Sheng Siong Supermarket Sdn. Bhd.

“SS Supermarket” : Sheng Siong Supermarket Pte. Ltd. (formerly known as Cheng Siong Farm Company Pte. Ltd.)

Entities related to our Founders

“Food More” : Food More

“SS Canteen” : Sheng Siong Canteen

“SS Food Court” : Sheng Siong Food Court Pte. Ltd.

“SS Holdings” : Sheng Siong Holdings Pte. Ltd., an investment holding company. Our Executive Directors, Mr. Lim Hock Chee, Mr. Lim Hock Eng and Mr. Lim Hock Leng each own approximately 33.3% of the equity interests in SS Holdings and are each a director of SS Holdings

“ECL Money Changer” : ECL Money Changer Pte. Ltd.

“E Land Properties” : E Land Properties Pte. Ltd.

Our Stores and Stalls

“Ang Mo Kio 122 Supermarket” : Our store located at Block 122 Ang Mo Kio Avenue 3 #01-1753/1755,1757 Singapore 560122

“Ang Mo Kio 233 Supermarket” : Our store located at Block 233 Ang Mo Kio Avenue 3 #01-1168 Singapore 560233

“Bedok North Supermarket” : Our store located at Block 539A Bedok North Street 3 #01-477 Singapore 461539

“Bedok Reservoir Market” : Our store located at Block 739A Bedok Reservoir Road #01-01 Singapore 471739

6

DEFINITIONS

“Chin Swee Supermarket” : Our store located at Block 52 Chin Swee Road #01-25 Singapore 160052

“Clementi 352 Supermarket” : Our store located at Block 352 Clementi Avenue 2 #01-91/99 Singapore 120352

“Clementi 720 Supermarket” : Our store located at Block 720 Clementi West Street 2 #01-144 Singapore 120720

“Elias Mall Market Stalls” : Our three (3) wet market stalls located at market stall nos. 14, 15 and 16 in a wet market at Block 623 Elias Road #B1-01 Elias Mall Singapore 510623

“Jurong West 544 Supermarket” : Our store located at Block 544 Jurong West Street 42 #01-97/99 Singapore 640544

“Jurong West 7 Grocery Store” : Our store located at 7 Jurong West Avenue 5 #01-01 to 08 Singapore 649486

“Loyang Point Supermarket” : Our store located at Block 258 Pasir Ris Street 21 #01-333 Loyang Point Complex Singapore 510258

“McNair Supermarket” : Our store located at Block 108 McNair Road #01-295 Singapore 321108

“New Upper Changi Supermarket” : Our store located at Block 209 New Upper Changi Road #01-631/#02-631 Singapore 460209

“Punggol Central Supermarket” : Our store located at Block 301 Punggol Central #01-01 Singapore 820301

“Serangoon North Supermarket” : Our store located at 19 Serangoon North Avenue 5 Singapore 554913

“Superbowl Supermarket” : Our store located at 3 Yuan Ching Road #01-01A/02 Singapore 618642

“Tanjong Katong Supermarket” : Our store located at 57 Tanjong Katong Road Singapore 436952, which will close in September 2011 as the premises were sold by the landlord to a third party and the lease will not be renewed

“Tanglin Halt Supermarket” : Our store located at Block 88 Tanglin Halt Road #01-10 Singapore 141088

“Teban Gardens Supermarket” : Our store located at Block 61 Teban Gardens Road #01-21 Singapore 600061

“Teck Whye Supermarket” : Our store located at 18 Teck Whye Lane #01-95 Singapore 680018

“Ten Mile Junction Supermarket” : Our store located at 1 Woodlands Road Ten Mile Junction #01-08 Singapore 677899, which closed in November 2010 as the premises were sold by the landlord to a third party and the lease was not renewed

7

DEFINITIONS

“The Verge Hypermarket” : Our store located at 2 Serangoon Road #B1-01/33 and #B2-01/05 The Verge Singapore 218227

“Woodlands 301 Supermarket” : Our store located at Block 301 Woodlands Street 31 #01-215/217 Singapore 730301

“Woodlands 6A Supermarket” : Our store located at Block 6A Woodlands Centre Road #01-280 Singapore 731006

“Yishun 845 Supermarket” : Our store located at Block 845 Yishun Street 81 #01-184 and #02-186 Singapore 760845

Other Companies and Organisations

“Authority” or “MAS” : The Monetary Authority of Singapore

“AVA” : The Agri-Food & Veterinary Authority of Singapore

“CDP” : The Central Depository (Pte) Limited

“CPF” : The Central Provident Fund

“DBS Bank” : DBS Bank Ltd. (including POSB)

“HDB” : Housing and Development Board

“Issue Manager” or“Underwriter” or“Placement Agent” or “Stabilising Manager” or “Receiving Bank” or “OCBC Bank”

: Oversea-Chinese Banking Corporation Limited

“Participating Banks” : OCBC Bank, DBS Bank and United Overseas Bank Limited and its subsidiary, Far Eastern Bank Limited (“UOB Group”), and “Participating Bank” means any of the abovementioned entities

“SCDF” : The Singapore Civil Defence Force

“SPF” : The Singapore Police Force

“SGX-ST” : Singapore Exchange Securities Trading Limited

General

“Application Forms” : The official printed application forms to be used for the purpose of the Invitation which form part of this Prospectus

“Application List” : The list of applications to subscribe for and/or purchase of the Invitation Shares

“ATM” : Automated teller machine

“Audit Committee” The audit committee of our Company

“CEO” : Chief Executive Officer

8

DEFINITIONS

“CMM Building” : Our old corporate headquarters and warehousing and distribution centre, located at 3000 Marsiling Road, CMM Building, Singapore 739108

“Companies Act” : The Companies Act, Chapter 50, of Singapore, as amended, supplemented or modified from time to time

“Controlling Shareholders” : SS Holdings, Mr. Lim Hock Chee, Mr. Lim Hock Eng and Mr. Lim Hock Leng

“Directors” : The directors of our Company as at the date of this Prospectus

“Electronic Applications” : Applications for the Offer Shares made through an ATM of one of the Participating Banks, subject to and on the terms and conditions of this Prospectus

“EPS” : Earnings per share

“Executive Directors” : The executive directors of our Company as at the date of this Prospectus

“Founders” : Our Executive Directors, Mr. Lim Hock Chee, Mr. Lim Hock Eng and Mr. Lim Hock Leng

“FY” : Financial year ended or, as the case may be, ending 31 December

“GST” : Goods and Services Tax

“Independent Directors” : The independent directors of our Company as at the date of this Prospectus

“Invitation” : Our invitation to the public in Singapore to subscribe for and/or purchase of the Invitation Shares at the Issue Price, subject to and on the terms and conditions of this Prospectus

“Invitation Shares” : The 351,500,000 Shares which are the subject of this Invitation, comprising the 201,500,000 New Shares and the 150,000,000 Vendor Shares

“Issue Price” : S$0.33 for each Invitation Share

“Key Executives” : The key executives of our Company as at the date of this Prospectus

“Latest Practicable Date” : 24 June 2011, being the Latest Practicable Date prior to the lodgement of this Prospectus with the Authority

“Listing Date” : The date on which our Shares commence trading on the SGX-ST

“Listing Manual” : The Listing Manual of the SGX-ST, as amended, supplemented, or modified from time to time

“Mandai Link Distribution Centre” : Our current corporate headquarters and warehousing and distribution centre located at 6 Mandai Link Singapore 728652, with floor area of approximately 543,090 sq. ft.

9

DEFINITIONS

“Market Day” : A day on which the SGX-ST is open for trading in securities

“Management Information System” or “MIS”

: A system or process that analyses the other information systems used in an organisation’s operations and provides information required to effectively manage the organisation, regarded as a subset of an organisation’s overall internal controls procedures and connected with the automation or support of human decision-making

“NAV” : Net asset value

“New Shares” : The 201,500,000 new Shares for which our Company invites applications to subscribe for pursuant to the Invitation, subject to and on the terms and conditions of this Prospectus

“Nominating Committee” : The nominating committee of our Company

“Offer” : The offer by our Company to the public in Singapore for subscription for and/or purchase of the Offer Shares at the Issue Price, subject to and on the terms and conditions of this Prospectus

“Offer Shares” : The 15,000,000 Invitation Shares which are the subject of the Offer

“Option” : The right to subscribe for Shares granted or to be granted pursuant to the Scheme, details of which may be found in the section entitled “Directors, Management and Staff — Sheng Siong ESOS” of this Prospectus

“Option Shares” : The Shares which may be issued upon the exercise of the Options pursuant to the Sheng Siong ESOS

“Over-allotment Option” : The option granted to the Issue Manager, exercisable in whole or in part for the Over-allotment Shares, representing not more than 15% of the Invitation Shares, within 30 days from the date of commencement of dealing of our Shares on the SGX-ST, at the Issue Price, solely for the purpose of covering over-allotments (if any) made in connection with the Invitation (Please refer to the section entitled “The Invitation – Over-allotment and Stabilisation” of this Prospectus for more information). Unless indicated otherwise, all information in this Prospectus assumes that the Issue Manager does not exercise the Over-allotment Option

“Over-allotment Shares” : Up to 52,725,000 new Shares (representing 15% of the Invitation Shares) which may be issued upon the exercise of the Over-allotment Option

“Placement” : The placement of the Placement Shares at the Issue Price by the Placement Agents on behalf of our Company, subject to and on the terms and conditions of this Prospectus

“Placement Shares” : The 336,500,000 Invitation Shares which are the subject of the Placement

10

DEFINITIONS

“Property Sale Agreements” : Refers collectively to the sale and purchase agreement dated 31 October 2008 and the sale and purchase agreements dated 30 April 2009 pursuant to which SS Supermarket sold 10 properties to E Land Properties. Please see the section entitled “Interested Person Transactions and Conflict of Interests” for more details

“Prospectus” : This Prospectus dated 4 August 2011 issued by our Company in respect of the Invitation

“Remuneration Committee” : The remuneration committee of our Company

“Restructuring Exercise” : The restructuring exercise implemented in connection with the Invitation, more fully described in the section entitled “General Information of our Group – Restructuring Exercise” of this Prospectus

“Securities Account” : The securities account maintained by a depositor with CDP, excluding a securities sub-account

“Securities and Futures Act” or “SFA”

: Securities and Futures Act, Chapter 289, of Singapore, as amended, supplemented or modified from time to time

“Service Agreements” : The service agreements entered into between our Company and our Executive Directors, Mr. Lim Hock Chee, Mr. Lim Hock Eng, Mr. Lim Hock Leng and Mr. Tan Ling San, as described in the section entitled “Directors, Management and Staff – Service Agreements” of this Prospectus

“Share Lending Agreement” : The share lending agreement dated [ ] 2011 entered into between OCBC Bank and SS Holdings in connection with the Over-allotment Option

“Sheng Siong Groceries Chain” : As at the Latest Practicable Date, our 23 stores and 3 stalls engaged in grocery retailing

“SFR” : Securities and Futures (Offer of Investments) (Shares and Debentures) Regulations 2005, as amended, supplemented or modified from time to time

“SFRS” : Singapore Financial Reporting Standards

“Shares” : The ordinary shares in the capital of our Company

“Shareholders” : Registered holders of Shares, except where the registered holder is CDP, the term “Shareholders” shall, in relation to such Shares mean the depositors whose Securities Accounts are credited with Shares

“Share Swap Agreement” : The share swap agreement dated 8 February 2011 entered into between our Company and Mr. Lim Hock Chee, Mr. Lim Hock Eng and Mr. Lim Hock Leng pursuant to which our Company agreed to acquire all of the shares in SS Supermarket, CMM Marketing and SS Malaysia. Please see the section entitled “General Information of our Group – Restructuring Exercise” of this Prospectus for more details

11

DEFINITIONS

“Sheng Siong ESOS” or “Scheme” : The share option scheme as described under the section entitled “Directors, Management & Staff — Sheng Siong ESOS” and in Appendix H of this Prospectus entitled “Rules of Sheng Siong ESOS”

“Vendor Shares” : The 150,000,000 issued and fully paid-up Shares for which the Vendors invite applications to purchase on the terms and subject to the conditions of this Prospectus

“Term Loan” : The term loan of up to S$30 million issued by DBS Bank to CMM Marketing in December 2009 to part finance the construction of our new Mandai Link Distribution Centre, scheduled to be repaid in December 2012

Currencies, Units and Others

“$” or “S$” and “cent” : Singapore dollar and cent, respectively

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

sq. ft. : Square feet

sq. m. : Square metre

“Cambodia” : Kingdom of Cambodia

“Indonesia” : Republic of Indonesia

“Malaysia” : Federation of Malaysia

“Philippines” : Republic of Philippines

“PRC” or China” : The People’s Republic of China, excluding the Hong Kong Special Administrative Region (“SAR”), the Macau SAR and Taiwan, for the purposes of this Prospectus

“Vietnam” : Socialist Republic of Vietnam

“Thailand” : Kingdom of Thailand

The expressions “Associate”, “Associated Company”, “Associated Entity”, “Controlling Shareholders”, “Related Corporation”, “Related Entity”, “Entity At Risk”, “Interested Person”, “Interested Person Transaction”, “Subsidiary” and “Substantial Shareholder” shall have the meanings ascribed to the terms “associate”, “associated company”, “associated entity”, “controlling shareholders”, “related corporation”, “related entity”, “entity at risk”, “interested person”, “interested person transaction”, “subsidiary” and “substantial shareholder” respectively in the Fourth Schedule of the SFR, the Companies Act and/or the Listing Manual.

The expressions “our”, “ourselves”, “us”, “we” or “our Group” or other grammatical variations thereof shall, unless otherwise stated, refer to our Company and our subsidiaries and subsidiary entities, namely SS Supermarket, CMM Marketing, SS Malaysia, Shing Song, Shng Siong, SS1, SS Groceries and SS Hypermart, taken as a whole.

The terms “depositor”, “depository agent” and “depository register” shall have the same meanings ascribed to them respectively in Section 130A of the Companies Act.

12

DEFINITIONS

Words importing the singular shall, where applicable, include the plural and vice versa and words importing the masculine gender shall, where applicable, include the feminine and neuter genders and vice versa. References to persons shall include corporations.

Any discrepancies in tables, graphs and/or charts included herein between the amounts listed and the totals thereof are due to rounding. Accordingly, figures shown as totals in certain tables may not be an arithmetic aggregation of the figures which precede them. Where applicable, figures and percentages are rounded off.

Any reference in this Prospectus, the Application Forms and Electronic Applications to any statute or enactment is a reference to that statute or enactment for the time being amended or re-enacted. Any word defined in the Companies Act, the Securities and Futures Act, or the Listing Manual and used in this Prospectus, the Application Forms and Electronic Applications shall, where applicable, have the meaning ascribed to it under the Companies Act, the Securities and Futures Act, or the Listing Manual, as the case may be.

Any reference in this Prospectus, the Application Forms and Electronic Applications to our Shares being allotted and/or allocated to an applicant includes allotment and/or allocation to CDP for the account of that applicant.

Any reference to a time of day in this Prospectus, the Application Forms and Electronic Applications shall be a reference to Singapore time unless otherwise stated.

13

DEFINITIONS

All statements contained in this Prospectus, statements made in press releases and oral statements that may be made by us or our Directors, Key Executives or employees acting on our behalf, that are not statements of historical fact, constitute “forward-looking statements”. You can identify some of these statements by forward-looking terms such as “anticipate”, “believe”, “could”, “estimate”, “expect”, “intend”, “may”, “plan”, “will” and “would” or similar words. However, you should note that these words are not the exclusive means of identifying forward-looking statements. All statements regarding our expected financial position, business strategies, plans and prospects are forward-looking statements.

These forward-looking statements, including without limitations, statements as to:

• our revenue and profitability;

• our planned expansion;

• any expected growth;

• other expected industry trends; and

• anticipated completion of proposed plans and other matters discussed in this Prospectus regarding matters that are not historical facts,

are only predictions.

These forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. These risks, uncertainties and other important factors include, amongst others, the following:

• the prices of the food products and general merchandise sold in our stores and our housebrand products which fluctuate depending primarily on prevailing market prices. Material changes in such prevailing market prices may materially and adversely affect our revenue;

• changes in political, social and economic conditions and the regulatory environment in the places in which we conduct our business;

• our anticipated growth strategies and expected internal growth;

• changes in competitive conditions and our ability to compete under these conditions;

• changes in currency exchange rates;

• changes in the availability of the food products and general merchandise we need to operate our business;

• changes in our future capital needs and the availability of financing and capital to fund these needs;

• other factors beyond our control; and

• the factors described in the section entitled “Risk Factors” of this Prospectus.

All forward-looking statements made by or attributable to us, or persons acting on our behalf, contained in this Prospectus are expressly qualified in their entirety by such factors. Given the risks and uncertainties that may cause our actual future results, performance or achievements to be materially different than expected, expressed or implied by the forward-looking statements in this Prospectus, we advise you not to place undue reliance on those statements. Our Company, the Vendors, the Issue Manager, Underwriter and Placement Agent are not representing or warranting to you that our actual future results, performance or achievements will be as discussed in those statements. Further, our Company, the Vendors, the Issue

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CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

Manager, Underwriter and Placement Agent disclaim any responsibility to update any of those forward-looking statements to reflect future developments, events or circumstances for any reason, even if new information becomes available or other events occur in the future.

We are, however, subject to the provisions of the Securities and Futures Act and the Listing Manual regarding corporate disclosure upon our admission to the Official List of the SGX-ST. In particular, pursuant to section 241 of the Securities and Futures Act, if after the Prospectus is registered but before the close of the Invitation, our Company becomes aware of (a) a false or misleading statement or matter in the Prospectus; (b) an omission from the Prospectus of any information that should have been included in it under section 243 of the Securities and Futures Act; or (c) a new circumstance that has arisen since the Prospectus was lodged with the Authority and would have been required by section 243 of the Securities and Futures Act to be included in the Prospectus, if it had arisen before the Prospectus was lodged and that is materially adverse from the point of view of an investor, we may lodge a supplementary or replacement prospectus with the Authority.

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CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

The information contained in this summary is derived from and should be read in conjunction with the full text of this Prospectus. Terms defined elsewhere in this Prospectus have the same meanings when used herein. Prospective investors should read the entire Prospectus carefully, in particular the matters set out in the section entitled “Risk Factors” of this Prospectus, before making an investment decision.

Overview of our Group

On 10 November 2010, our Company was incorporated in Singapore under the Companies Act as a private limited liability company under the name of “Sheng Siong Group Pte. Ltd.”. We changed our name to “Sheng Siong Group Ltd.” on 4 July 2011 in connection with our conversion to a public company limited by shares. Our Group comprises our Company and our subsidiaries, SS Supermarket, CMM Marketing and SS Malaysia.

Please refer to the section entitled “General Information of our Group – Our Corporate Structure” of this Prospectus for more details.

Our Business

We are one of Singapore’s largest retailers with over S$628.4 million in revenue for FY2010, and we are principally engaged in operating the Sheng Siong Groceries Chain, including 23 stores all across Singapore, as at the Latest Practicable Date.

Our stores are primarily located in retail locations in the heartlands of Singapore, and designed to provide our customers with both “wet and dry” shopping options, including a wide assortment of live, fresh and chilled produce, such as seafood, meat and vegetables, in addition to processed, packaged and/or preserved food products as well as general merchandise such as toiletries and essential household products.

We have also developed a selection of housebrands to offer our customers quality alternatives to national brands at substantial savings. As at the Latest Practicable Date, we offer over 300 products under our 10 housebrands.

To support our retail operations, we also have an extensive distribution network, food-processing facilities, and warehousing facilities. In May 2011, we completed construction of our new corporate headquarters and warehousing and distribution centre at Mandai Link, at an estimated cost of up to S$65 million.

A detailed discussion of our business is set out in the section entitled “General Information of our Group” of this Prospectus.

Our Competitive Strengths

Established and distinctive household brand name in Singapore

We have been engaged in grocery retailing in Singapore since 1985 and as at the Latest Practicable Date, our Sheng Siong Groceries Chain includes 23 stores all across Singapore. Our long history and reputation for quality products at competitive prices has led to our “Sheng Siong” brand name becoming an established brand name in Singapore widely recognised by consumers. For four (4) consecutive years 2008, 2009, 2010 and 2011, we were awarded “Superbrand” status by Superbrands Singapore.

Dedicated key management personnel with extensive experience

We have an experienced key management team who are hands-on and have in-depth knowledge of the retail industry. Our success to date has been largely due to the contributions of our Executive Directors namely, Mr. Lim Hock Chee, Mr. Lim Hock Eng, Mr. Lim Hock Leng and Mr. Tan Ling San, who each have decades of experience in the grocery retailing industry and have been instrumental in developing the business of our Group.

Offering of quality products at competitive prices

We place great importance on the quality of the products sold in our stores and have strict criteria for the selection of our suppliers and contract manufacturers. We manage the purchasing of goods for our stores centrally and due to the scale of our operations, we enjoy greater bargaining power with respect to our

16

PROSPECTUS SUMMARY

suppliers, distributors and contract manufacturers. We have also launched 10 housebrands, with products ranging from staples such as rice and sugar, to general merchandise such as laundry detergent and tissue paper, which are typically priced lower than comparable international or national brands.

Established relationships with our suppliers and contract manufacturers

We have established a large network of over 1,000 suppliers and contract manufacturers for our business. These relationships have enabled us to have a continuous supply of products without major disruptions and allow us to wield greater bargaining power in terms of the purchase prices of our products.

Catering to the needs of our customers with a wide product range and extended operating hours

We believe that we have extensive knowledge of Singapore’s consumer preferences and consumption patterns, and are hence able to cater to the daily needs of our customers by providing a wide selection of quality products, such as live seafood, and certain food products, such as spices, sauces, noodles and canned foods, which we believe are not commonly found in our competitors’ stores. In addition, each of our stores is open between 15 to 16 hours a day, thus enabling our customers to purchase groceries and other household necessities at their convenience.

Centralised logistics and distribution centre

We have a centralised warehouse cum distribution centre to cater to the demands of our stores. Our new corporate headquarters and warehousing and distribution facility, Mandai Link Distribution Centre, was completed in May 2011 with a floor area of approximately 543,090 sq.ft.. By centralising our inventory and distribution facility and having our own dedicated fleet of trucks, we are able to optimise our inventory holdings and lower our distribution costs, hence increasing our margins.

Computerised systems facilitate efficient operations

Our computerised systems (including our Management Information System) assist us in controlling and replenishing our inventory levels, as well as in analysing various aspects of our business and operations. We believe our computerised systems have enabled us to maintain low and effective levels of inventory and to make timely decisions regarding purchasing and distribution matters in order that we may run our operations more efficiently as well as lower our operating costs.

A detailed discussion of our competitive strengths is set out in the section entitled “General Information of our Group – Competitive Strengths” of this Prospectus.

Our Business Strategies And Future Plans

Expand store network

We plan to continue increasing the number of our stores to enhance economies of scale and further capitalize on our Group’s existing infrastructure. We may open new stores either in Singapore or overseas and may also consider expanding through acquisitions.

New Mandai Link Distribution Centre

With our new Mandai Link Distribution Centre, which was completed in May 2011, we are able to warehouse, process and distribute proportionately larger quantities of goods, and thus benefit from economies of scale in terms of manpower, transportation and fuel costs.

Increase productivity, economies of scale, quality and profitability

We intend to continue to upgrade our computer network systems, including our Management Information System. We also intend to continue to capitalise on our Group’s economies of scale, as well as the strong and well-established relationships we have built over the years with our suppliers and contract manufacturers. Where possible, we also intend to increase our purchases direct from product sources, in order to eliminate middlemen expenses and reduce costs, as well as to increase our control over the quality and freshness of the products we retail.

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PROSPECTUS SUMMARY

Expand selection of housebrands and housebrand products

As at the Latest Practicable Date, we offer over 300 products under our 10 housebrands. We intend to strengthen our relationship with our existing contract manufacturers as well as establish relationships with new contract manufacturers to secure more favourable terms and prices, and increase the selection and types of housebrand products.

A detailed discussion of our future plans is set out in the section entitled “Prospects, Business Strategies and Future Plans – Our Business Strategies and Future Plans” of this Prospectus.

Our Financial Performance

The following tables present a summary of the financial highlights of our Group and should be read in conjunction with the section entitled “Management’s Discussion and Analysis of Results of Operations and Financial Position”, Appendix A entitled “Independent Auditors’ Report and the Combined Financial Statements for the Financial Years Ended 31 December 2008, 2009 and 2010” of this Prospectus and the related notes thereto.

Selected items from the financial information of our Group

Audited FY2008 FY2009 FY2010($’000) ($’000) ($’000)

Revenue 610,160 625,343 628,432

Gross profit 114,156 128,361 136,757

Profit before income tax 26,575 39,870 48,730

Profit for the year 20,573 33,580 42,635

Unaudited

EPS (cents)(1) 1.80 2.95 3.74

EPS as adjusted for the Invitation (cents)(2) 1.53 2.50 3.18

Notes:

(1) For comparative purposes, EPS is calculated based on profit for the year and the pre-Invitation share capital of 1,140,000,000 Shares.

(2) For comparative purposes, EPS as adjusted for the Invitation is calculated based on profit for the year and the post-Invitation share capital of 1,341,500,000 Shares.

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PROSPECTUS SUMMARY

Selected items from the financial position of our Group

Auditedas at

Auditedas at

31 December 2009 31 December 2010($’000) ($’000)

Non-current assets 24,360 58,328

Current assets 178,983 117,005

Total assets 203,343 175,333

Non-current liabilities 729 19,699

Current liabilities 88,745 91,753

Total liabilities 89,474 111,452

Accumulated profits 84,432 33,881

Total equity 113,869 63,881

Our Contact Details

Our registered address is 6 Mandai Link, Singapore 728652.

Our telephone and fax numbers are +65 6895 1888 and +65 6269 8265 respectively.

Our company registration number is 201023989Z.

Our website address is www.shengsiong.com.sg. Information contained on our website does not constitute a part of this Prospectus.

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PROSPECTUS SUMMARY

Listing on the SGX-ST

We have applied to the SGX-ST for permission to deal in, and for quotation of, all our Shares already issued (including the Vendor Shares), the New Shares, the Over-allotment Shares (if the Over-allotment Option is exercised) and the Option Shares on the Official List of the SGX-ST. Such permission will be granted when we have been admitted to the Official List of the SGX-ST. Our allotment and/or allocation of our Shares already issued (including the Vendor Shares), the New Shares, the Over-allotment Shares (if the Over-allotment Option is exercised) and the Option Shares will be conditional upon the completion of the Invitation, which is subject to certain conditions, including the SGX-ST granting permission to deal in, and for quotation of, all our existing issued Shares (including the Vendor Shares), the New Shares, the Over-allotment Shares (if the Over-allotment Option is exercised) and the Option Shares.

If the said permission from the SGX-ST is not granted, monies paid in respect of any application accepted will be returned to you at your own risk, without interest or any share of revenue or other benefit arising therefrom and you will not have any claim against our Company, the Vendors, and/or the Issue Manager, Underwriter and Placement Agent.

Under the Securities and Futures Act, the Authority may, in certain circumstances issue a stop order (the “Stop Order”) to our Company, directing that no Invitation Shares or no further Shares to which this Prospectus related, be allotted and/or allocated or issued and/or sold. Such circumstances will include a situation where this Prospectus (i) contains a statement or matter, which in the opinion of the Authority is false or misleading; (ii) omits any information that should be included in accordance with the Securities and Futures Act; or (iii) does not, in the opinion of the Authority, comply with the requirements of the Securities and Futures Act. A Stop Order may also be issued if the Authority is of the opinion that it is in the public interest to do so.

In the event that the Authority issues a Stop Order and applications to subscribe for and/or purchase the Invitation Shares to which this Prospectus relates have been made prior to the Stop Order, then:-

1. where the Invitation Shares have not been issued and/or sold to you, your applications shall be deemed to have been withdrawn and cancelled and our Company (for itself and on behalf of the Vendors) shall, within 14 days from the date of the Stop Order, return to you all monies you have paid on account of your applications for the Invitation Shares; or

2. where the Invitation Shares have been issued and/or sold to you, the SFA provides that the issue and/or sale of our Invitation Shares shall be deemed to be void and our Company (for itself and on behalf of the Vendors) is required, within 14 days from the date of the Stop Order, return to you all monies paid by you for our Invitation Shares.

The SGX-ST assumes no responsibility for the correctness of any of the statements made, reports contained or opinions expressed in this Prospectus. Admission to the Official List of the SGX-ST is not to be taken as an indication of the merits of the Invitation, our Company, our Subsidiaries, our existing issued Shares (including the Vendor Shares), the New Shares, the Over-allotment Shares (if the Over-allotment Option is exercised) and the Option Shares.

A copy of this Prospectus together with copies of the Application Forms have been lodged with and registered by the Authority on 30 June 2011 and 4 August 2011 respectively. The Authority assumes no responsibility for the contents of this Prospectus. Registration of this Prospectus by the Authority does not imply that the Securities and Futures Act, or any other legal or regulatory requirements, have been complied with. The Authority has not, in any way, considered the merits of our existing issued Shares (including the Vendor Shares), the New Shares, the Over-allotment Shares (if the Over-allotment Option is exercised) and the Option Shares, as the case may be, being offered or in respect of which the Invitation is made, for investment. We have not lodged or registered this Prospectus in any other jurisdiction.

This Prospectus has been reviewed and approved by our Directors and the Vendors and they collectively and individually accept full responsibility for the truth and accuracy of the information given herein and confirm, having made all reasonable enquiries, that to the best of their knowledge and belief, there are no other facts the omission of which would make any statement herein misleading, and that this Prospectus constitutes full and true disclosure of all material facts about the Invitation and our Group.

20

THE INVITATION

Neither our Company, the Vendors, the Issue Manager, Underwriter and Placement Agent, the experts nor any other parties involved in the Invitation is making any representation to any person regarding the legality of an investment in our Shares by such person under any investment or other laws or regulations. No information in this Prospectus should be considered as being business, legal or tax advice. You should consult your own professional or other advisers for business, legal or tax advice regarding an investment in our Shares. No person has been or is authorised to give any information or to make any representation not contained in this Prospectus in connection with the Invitation and, if given or made, such information or representation must not be relied upon as having been authorised by our Company, the Vendors, the Issue Manager, Underwriter and Placement Agent.

Neither the delivery of this Prospectus and the Application Forms nor any document relating to the Invitation shall, under any circumstances, constitute a continuing representation or create any suggestion or implication that there has been no change in our affairs or in the statements of fact or information contained in this Prospectus since the date of this Prospectus. Where such changes occur and are material or are required to be disclosed by law, we will promptly make an announcement of the same to the SGX-ST and to the public and, if required, lodge a supplementary or replacement prospectus with the Authority and make an announcement of the same to the SGX-ST and to the public and will comply with the requirements of the Securities and Futures Act. You should take note of any such announcement and, upon release of such an announcement, shall be deemed to have given notice of such changes. Save as expressly stated in this Prospectus, nothing herein is, or may be relied upon as, a promise or representation as to the future performance or policies of our Company or our Subsidiaries.

In the event that a supplementary or replacement prospectus is lodged with the Authority, the Invitation shall be kept open for at least 14 days after the lodgement of such supplementary or replacement prospectus.

We are subject to the provisions of the Securities and Futures Act and the Listing Manual regarding corporate disclosure. In particular, if after this Prospectus is registered but before the close of the Invitation, we become aware of:

1. a false or misleading statement in this Prospectus;

2. an omission from this Prospectus of any information that should have been included in it under Section 243 of the Securities and Futures Act; or

3. a new circumstance that has arisen since the Prospectus was lodged with the Authority which would have been required by Section 243 of the Securities and Futures Act to be included in this Prospectus if it had arisen before this Prospectus was lodged,

that is materially adverse from the point of view of an investor, we may lodge a supplementary or replacement prospectus with the Authority pursuant to Section 241 of the Securities and Futures Act.

Where prior to the lodgement of the supplementary or replacement prospectus, applications have been made under this Prospectus to subscribe for and/or purchase our Invitation Shares and:

1. where the Invitation Shares have not been issued to you, our Company (for itself and on behalf of the Vendors) shall either:

(i) (A) within two (2) days (excluding any Saturday, Sunday or public holiday) from the date of lodgement of the supplementary or replacement prospectus, give you notice in writing of how to obtain, or arrange to receive a copy of the supplementary or replacement prospectus, as the case may be, and to provide you with an option to withdraw your application; and (B) take all reasonable steps to make available within a reasonable period the supplementary or replacement prospectus, as the case may be, to you, where you have indicated that you wish to obtain, or have arranged to receive, a copy of the supplementary of replacement prospectus; or

21

THE INVITATION

(ii) within seven (7) days from the date of lodgement of the supplementary or replacement prospectus, give you the supplementary or replacement prospectus, as the case may be, and provide you with an option to withdraw your application; or

(iii) treat the applications as withdrawn and cancelled, in which case your application shall be deemed to have been withdrawn and cancelled, and our Company shall within seven (7) days from the date of lodgement of the supplementary or replacement prospectus, return all monies paid in respect of any application to you at your own risk, without interest or any share of revenue or other benefit arising therefrom; or

2. where the Invitation Shares have been issued to you, our Company (for itself and on behalf of the Vendors) shall either:

(i) (A) within two (2) days (excluding any Saturday, Sunday or public holiday) from the date of lodgement of the supplementary or replacement prospectus, give you notice in writing of how to obtain, or arrange to receive a copy of the supplementary or replacement prospectus, as the case may be, and to provide you with an option to return to our Company, the Shares which you do not wish to retain title in; and (B) take all reasonable steps to make available within a reasonable period the supplementary or replacement prospectus, as the case may be, to you, where you have indicated that you wish to obtain, or have arranged to receive, a copy of the supplementary of replacement prospectus; or

(ii) within seven (7) days from the date of lodgement of the supplementary or replacement prospectus, give you the supplementary or replacement prospectus, as the case may be, and provide you with an option to return to our Company the Invitation Shares, which you do not wish to retain title in; or

(iii) treat the issue of our Shares as void, in which case the issue shall be deemed void and our Company shall within seven (7) days from the date of lodgement of the supplementary or replacement prospectus, return all monies paid in respect of any application to you at your own risk, without interest or any share of revenue or other benefit arising therefrom.

If you wish to exercise your option under paragraph 1(i) or (ii) above to withdraw your application in respect of the Invitation Shares, you shall, within 14 days from the date of lodgement of the supplementary or replacement prospectus, notify our Company of this, whereupon our Company (for itself and on behalf of the Vendors) shall within seven (7) days from the receipt of such notification, return to you all monies you have paid on account of your application for such Invitation Shares, without interest or any share of revenue or other benefit arising therefrom, at your own risk and you shall have no claim against us, the Vendors and the Issue Manager, Underwriter and Placement Agent.

If you wish to exercise your option under paragraph 2(i) or (ii) above to return the Invitation Shares issued to you, you shall, within 14 days from the date of lodgement of the supplementary or replacement prospectus, notify our Company of this and return all documents, if any, purporting to be evidence of title to those Shares, to our Company, whereupon our Company (for itself and on behalf of the Vendors) shall within seven (7) days from the receipt of such notification and documents, if any, return to you all monies you have paid for those Invitation Shares without interest or any share of revenue or other benefit arising therefrom and the issue of those Shares shall be deemed to be void.

Where monies are to be returned to you for the Invitation Shares, it shall be paid to you without any interest or share of revenue or other benefit arising therefrom at your own risk, and you will not have any claim against us, the Vendor and the Issue Manager, Underwriter and Placement Agent.

This Prospectus has been prepared solely for the purpose of the Invitation and may only be relied upon by you in connection with your application for the Invitation Shares and may not be relied upon by any other person or for any other purpose.

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THE INVITATION

This Prospectus does not constitute an offer of, or invitation or solicitation to subscribe for and/or purchase of the Invitation Shares in any jurisdiction in which such offer or invitation or solicitation is unauthorised or unlawful nor does it constitute an offer or invitation or solicitation to any person to whom it is unlawful to make such offer or invitation or solicitation.

Copies of this Prospectus and the Application Forms and envelopes may be obtained on request, during office hours, subject to availability, from:

Oversea-Chinese Banking Corporation Limited65 Chulia StreetOCBC Centre

Singapore 049513

and from selected branches of OCBC Bank.

A copy of this Prospectus is also available on the SGX-ST website at http://www.sgx.com and the Authority website at http://masnet.mas.gov.sg/opera/sdrprosp.nsf.

The Invitation will be open from 9.00 a.m. on 5 August 2011 to 12.00 p.m. on 15 August 2011 or such further period or periods as our Directors may, in consultation with the Issue Manager, in their absolute discretion, decide, subject to any limitations under all applicable laws, PROVIDED ALWAYS THAT where a supplementary prospectus or replacement prospectus has been lodged with the Authority pursuant to Section 241 of the Securities and Futures Act, the Application List shall be kept open for at least 14 days after the lodgement of the supplementary prospectus or replacement prospectus.

Details for the procedure for application for the Invitation Shares are set out in Appendix E entitled “Terms, Conditions and Procedures for Application and Acceptance” of this Prospectus.

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THE INVITATION

Details of the Invitation

Issue Size : 351,500,000 Invitation Shares offered in Singapore comprising 15,000,000 Offer Shares and 336,500,000 Placement Shares (including 150,000,000 Vendor Shares).

The Invitation Shares, upon issue and allotment, will rank pari passu in all respects with the existing issued Shares.

Issue Price : S$0.33 for each Invitation Share.

The Invitation : The Invitation comprises an offering of:

(a) 15,000,000 Offer Shares at the Issue Price, to members of the public in Singapore; and

(b) 336,500,000 Placement Shares at the Issue Price, reserved for placement to members of the public and institutional investors in Singapore (including 150,000,000 Vendor Shares)

The Placement : The Placement comprises a placement of 336,500,000 Placement Shares at the Issue Price, subject to and on the terms and conditions of this Prospectus.

Over-allotment Option : In connection with the Invitation, we have granted the Issue Manager the Over-allotment Option exercisable in whole or in part for up to 52,725,000 Shares, representing not more than 15% of the Invitation Shares, within 30 days from the date of commencement of dealing of our Shares on the SGX-ST, at the Issue Price, solely for the purpose of covering over-allotments (if any) made in connection with the Invitation. Unless indicated otherwise, all information in this Prospectus assumes that the Issue Manager does not exercise the Over-allotment Option.

The Over-allotment Shares will, upon issue and allotment, rank pari passu in all respects with the existing issued Shares (including the Vendor Shares).

Stabilisation : In connection with the Invitation, the Issue Manager may, in its capacity as stabilising manager and in its discretion but subject always to applicable laws and regulations in Singapore, over-allot, or effect transactions which stabilise or maintain the market price of our Shares at levels which might not otherwise prevail in the open market. Such transactions may be effected on the SGX-ST and in all jurisdictions where it is permissible to do so, in each case, in compliance with all applicable laws and regulatory requirements, including the Securities and Futures Act. Such stabilisation activities, if commenced, may be discontinued by the Issue Manager at any time at its discretion, and shall not be effected after the earlier of (a) the date falling 30 days from the date of commencement of dealing of our Shares on the SGX-ST; or (b) the date when the over-allotment of our Shares which are subject to the Over-allotment Option has been fully covered (either through the purchase of our Shares on the SGX-ST or the exercise of the Over-allotment Option by the Issue Manager, or through both).

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THE INVITATION

Purpose of the Invitation : We consider that the Invitation and quotation of our Shares on the Official List of the SGX-ST will enhance our public image locally and internationally and enable us to tap the capital markets to fund our business growth. It will also provide members of the public, our employees, business associates and those who have contributed to our success with an opportunity to participate in the equity of our Company. The Invitation will also enlarge our capital base for continued expansion of our business.

Listing Status : Our Shares will be quoted in Singapore dollars on the Main Board of the SGX-ST, subject to admission of our Company to the Official List of the SGX-ST and permission for dealing in and for quotation of our Shares being granted by the SGX-ST and the Authority not issuing a Stop Order.

25

THE INVITATION

Invitation Statistics

Issue Price S$0.33

NAV

NAV per Share based on the unaudited proforma combined balance sheet of our Group as at 31 December 2010(1):

(a) before adjusting for the estimated net proceeds from the issue of the New Shares and based on the pre-Invitation share capital of 1,140,000,000 Shares

3.77 cents

(b) after adjusting for the estimated net proceeds from the issue of the New Shares and based on the post-Invitation share capital of 1,341,500,000 Shares

7.87 cents

Premium of Issue Price over the proforma NAV per Share as at 31 December 2010:

(a) before adjusting for the estimated net proceeds from the issue of the New Shares and based on the pre-Invitation share capital of 1,140,000,000 Shares

7.8 times

(b) after adjusting for the estimated net proceeds from the issue of the New Shares and based on the post-Invitation share capital of 1,341,500,000 Shares

3.2 times

Earnings(2)

Unaudited proforma net EPS of our Group for FY2010 based on the pre-Invitation share capital of 1,140,000,000 Shares

3.74 cents

Unaudited proforma net EPS of our Group for FY2010 based on the pre-Invitation share capital of 1,140,000,000 Shares, assuming that the Service Agreements had been in place in FY2010

3.99 cents

Price Earnings Ratio

Proforma price earnings ratio based on the unaudited proforma net EPS of our Group for FY2010

8.8 times

Proforma price earnings ratio based on the unaudited proforma net EPS of our Group for FY2010, assuming that the Service Agreements been in place in FY2010

8.3 times

Net Operating Cash Flow(3)

Unaudited proforma net operating cash flow per Share of our Group for FY2010 based on the pre-Invitation share capital of 1,140,000,000 Shares

2.98 cents

Unaudited proforma net operating cash flow per Share of our Group for FY2010 based on the pre-Invitation share capital of 1,140,000,000 Shares, assuming that the Service Agreements had been in place in FY2010

3.23 cents

Price to Net Operating Cash Flow

Proforma price to net operating cash flow ratio based on the unaudited proforma net operating cash flow per Share for FY2010 and the pre-Invitation share capital of 1,140,000,000 Shares

11.1 times

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THE INVITATION

Proforma price to net operating cash flow ratio based on the unaudited proforma net operating cash flow per Share for FY2010 and the pre-Invitation share capital of 1,140,000,000 Shares, assuming that the Service Agreements had been in place in FY2010

10.2 times

Market Capitalisation

Market capitalisation based on the Issue Price and the post-Invitation share capital of 1,341,500,000 Shares

S$442.7 million

Note(s):

(1) Please refer to the section entitled “Unaudited Proforma Combined Balance Sheet as at 31 December 2010” in Appendix B entitled “Independent Auditors’ Report and the Proforma Financial Information for the Financial Year ended 31 December 2010”, for details.

(2) The EPS is computed from profit for the year, derived from the section entitled “Unaudited Proforma Combined Statement of Comprehensive Income for the Financial Year Ended 31 December 2010”. Please refer to Appendix B entitled “Independent Auditors’ Report and the Proforma Financial Information for the Financial Year ended 31 December 2010”, for details.

(3) Net operating cash flow is defined as cash flows from operating activities. Please refer to the section entitled “Unaudited Proforma Combined Statement of Cash Flow for the Financial Year ended 31 December 2010” in Appendix B entitled “Independent Auditors’ Report and the Proforma Financial Information for the Financial Year ended 31 December 2010” for details.

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THE INVITATION

Plan of Distribution

The Invitation is for 201,500,000 New Shares and 150,000,000 Vendor Shares offered in Singapore by way of public offer and placement comprising 15,000,000 Offer Shares and 336,500,000 Placement Shares managed and underwritten by OCBC Bank.

The Issue Price is determined by us in consultation with the Issue Manager, Underwriter and the Placement Agent based on market conditions and estimated market demand for our Shares determined through a book-building process. The Issue Price is the same for each Invitation Share and is payable in full on application.

Offer Shares

The Offer Shares are made available to the members of the public in Singapore for subscription at the Issue Price. Members of the public may apply for the Offer Shares by way of printed Application Forms or by Electronic Application as described under “Terms, Conditions and Procedures for Application and Acceptance” set out in Appendix E of this Prospectus.

Pursuant to the Management and Underwriting Agreement entered into between us, the Vendors and OCBC Bank, as set out in the section entitled “Other General Information” of this Prospectus, we have appointed OCBC Bank to manage the Invitation and to underwrite the 15,000,000 Offer Shares. OCBC Bank will receive an underwriting commission of 2.5% of the Issue Price for the Offer Shares payable by us for subscribing and/or purchasing, or procuring subscribers and/or purchasers, for such Offer Shares not subscribed and/or purchased for by the public, and will pay, or procure payment to us, for such Offer Shares. OCBC Bank may, at its absolute discretion, appoint one or more sub-underwriters for the Offer Shares.

In the event of an under-subscription for the Offer Shares as at the close of the Application List, that number of Offer Shares not subscribed for and/or purchased shall be made available to satisfy excess applications for the Placement Shares to the extent there is an over-subscription for the Placement Shares as at the close of the Application List.

In the event of an over-subscription for the Offer Shares as at the close of the Application List and/or the Placement Shares are fully subscribed for and/or purchased as at the close of the Application List, the successful applications for the Offer Shares will be determined by ballot or otherwise as determined by us after consultation with the Issue Manager, and approved by the SGX-ST.

Placement Shares

The Placement Shares are made available to retail and institutional investors who apply through their brokers or financial institutions. Applications for Placement Shares may only be made by way of printed Application Forms as described under “Terms, Conditions and Procedures for Application and Acceptance” set out in Appendix E of this Prospectus.

Pursuant to the Placement Agreement entered into between us and OCBC Bank as set out in the section entitled “Other General Information” of this Prospectus, OCBC Bank agreed to subscribe and/or purchase or procure subscribers and/or purchasers for the 336,500,000 Placement Shares for a placement commission of 2.5% of the Issue Price for the Placement Shares payable by us. OCBC Bank may, at its absolute discretion, appoint one or more sub-placement agent(s) for the Placement Shares.

In the event of an under-subscription for the Placement Shares as at the close of the Application List, that number of Placement Shares not subscribed for and/or purchased shall be made available to satisfy excess applications for the Offer Shares to the extent that there is an over-subscription for the Offer Shares as at the close of the Application List.

Subscribers and purchasers of the Placement Shares may be required to pay brokerage of up to 1.0% of the Issue Price to the Placement Agent or any sub-placement agent(s) that may be appointed by the Placement Agent.

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THE INVITATION

Over-allotment and Stabilisation

In connection with this Invitation, our Company has granted OCBC Bank an Over-allotment Option, exercisable in full or in part by the Stabilising Manager on one occasion or more occasions from the Listing Date but no later than the earlier of (i) the date falling 30 days from the Listing Date; or (ii) the date when Stabilising Manager has bought, on the SGX-ST, an aggregate of 52,725,000 Invitation Shares, representing 15% of the total Invitation Shares, to undertake stabilising actions, to purchase up to an aggregate of additional 52,725,000 Shares (representing 15% of the total Invitation Shares) at the Issue Price. In the event that the Over-allotment Option is exercised, we will pay a commission of 2.5% of the Issue Price for each Over-allotment Share subscribed by OCBC Bank.

In connection with this Invitation, OCBC Bank (or person(s) acting on behalf of it) may, in its discretion but subject always to applicable laws and regulations in Singapore, over-allot or effect transactions which stabilise or maintain the market price of the Shares at levels which might not otherwise prevail in the open market. Such transactions may be effected on the SGX-ST and in all jurisdictions where it is permissible to do so, in each case, in compliance with all applicable laws and regulatory requirements including the SFA and any regulation thereunder. The number of Shares that OCBC Bank may buy to undertake stabilising action shall not exceed an aggregate of 52,725,000 Shares representing not more than 15% of the Invitation Shares. However, there is no assurance that OCBC Bank (or any person(s) acting on its behalf) will undertake stabilisation action. Such stabilisation activities may commence on or after the commencement of trading of the Shares on the SGX-ST and, if commenced, may be discontinued by OCBC Bank at any time at OCBC Bank’s discretion in accordance with the laws of Singapore and shall not be effected after the earlier of (a) the date falling 30 days from the date of commencement of trading of our Shares on the SGX-ST; or (b) the date when OCBC Bank or its appointed agents has bought on the SGX-ST, an aggregate of 52,725,000 Shares representing not more than 15% of the Invitation Shares, to undertake stabilising action.

We will publicly announce the total number of Over-allotment Shares which is subject to the Over-allotment Option, through a SGXNET announcement to be posted on the internet at the SGX-ST website http://www.sgx.com, no later than the day immediately following the close of the Application List.

Neither our Company, the Vendors nor OCBC Bank makes any representation or prediction as to the direction or magnitude of any effect that the transactions described above may have on the price of our Shares. In addition, neither our Company, the Vendors nor OCBC Bank makes any representation that OCBC Bank or any person acting for it will engage in such transactions, or that such transactions, once commenced, will not be discontinued without notice.

Share Lending

In connection with the over-allotment and stabilisation, OCBC Bank has entered into the Share Lending Agreement, pursuant to which OCBC Bank may borrow up to 52,725,000 Shares from SS Holdings before the Listing Date for the purpose of effecting the over-allotment in connection with this Invitation. Any Shares that may be borrowed by the Stabilising Manager under the Share Lending Agreement will be returned by the Stabilising Manager to SS Holdings either through the purchase of Shares in the open market by the Stabilising Manager in the conduct of stabilising activities or through the exercise of the Over-allotment Option by the Stabilising Manager.

Subscription for and/or purchase of the Invitation Shares

We have received expressions of intent from the following persons to subscribe for and/or purchase Invitation Shares in the Invitation:

1. Mr. Lee Teck Leng, Robson, our Non-Executive Director, intends to subscribe for and/or purchase up to 50,000 Invitation Shares;

2. Mr. Florent Caillieu, a related party of our Executive Director, Mr. Lim Hock Eng, intends to subscribe for and/or purchase up to 1,650,000 Invitation Shares;

3. Ms. Lin Ruiwen, an associate of our Executive Director, Mr. Lim Hock Eng, intends to subscribe for and/or purchase up to 1,000,000 Invitation Shares;

4. Mr. Tan Ze Chong, an associate of our Executive Director, Mr. Tan Ling San, intends to subscribe for and/or purchase up to 5,000,000 Invitation Shares; and

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THE INVITATION

5. Ms. Tan Ching Fern, a related party of our Executive Director, Mr. Tan Ling San, intends to subscribe for and/or purchase up to 1,500,000 Invitation Shares.

Save as disclosed above, none of our Directors nor our Controlling Shareholders intends to subscribe for and/or purchase the Invitation Shares in the Invitation. To the best of our knowledge, we are unaware of any person who intends to subscribe for and/or purchase more than 5.0% of the Invitation Shares.

However, through the book-building process to assess market demand for our Shares, there may be person(s) who may indicate an interest to subscribe for and/or purchase more than 5.0% of the Invitation Shares. If such person(s) were to make an application for more than 5.0% of the Invitation Shares pursuant to the Invitation and subsequently be allotted and/or allocated such number of Shares, we will make the necessary announcements at an appropriate time. The final allotment and/or allocation of Shares will be in accordance with the shareholdings spread and distribution guidelines as set out in Rule 210 of the Listing Manual.

No Shares shall be allotted and/or allocated on the basis of this Prospectus later than six (6) months after the date of registration of this Prospectus.

Please also refer to the section entitled “Other General Information – Management and Underwriting Agreement and Placement Agreement” of this Prospectus for further details on our Management and Underwriting Agreement and Placement Agreement.

Selling Restrictions

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

Clearance and Settlement

Upon listing and quotation on the Main Board of the SGX-ST, our Shares will be traded under the book-entry settlement system of the CDP and all dealings in and transactions of the Shares through the Main Board of the SGX-ST will be effected in accordance with the terms and conditions for the operation of securities accounts with the CDP, as amended from time to time.

Our Shares will be registered in the name of CDP and held by CDP for and on behalf of persons who maintain, either directly or through depository agents, securities accounts with CDP. Persons named as direct securities account holders and depository agents in the depository register maintained by the CDP, other than CDP itself, will be treated, under our Articles of Association and the Companies Act, as members of our Company in respect of the number of Shares credited to their respective securities accounts.

Persons holding our Shares in a securities account with CDP may withdraw the number of Shares they own from the book-entry settlement system in the form of physical share certificate(s). Such share certificates will, however, not be valid for delivery pursuant to trades transacted on the Main Board of the SGX-ST, although they will be prima facie evidence of title and may be transferred in accordance with our Articles of Association. A fee of S$10.00 for each withdrawal of 1,000 Shares or less and a fee of S$25.00 for each withdrawal of more than 1,000 Shares is payable upon withdrawing our Shares from the book-entry settlement system and obtaining physical share certificates. In addition, a fee of S$2.00 or

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THE INVITATION

such other amount as our Directors may decide, is payable to the share registrar for each share certificate issued and a stamp duty of S$10.00 is also payable where our Shares are withdrawn in the name of the person withdrawing our Shares or S$0.20 per S$100.00 or part thereof of the last-transacted price where it is withdrawn in the name of a third party. Persons holding physical share certificates who wish to trade on the Main Board of the SGX-ST must deposit with CDP their share certificates together with the duly executed and stamped instruments of transfer in favour of CDP and have their respective securities accounts credited with the number of Shares deposited before they can effect the desired trades. A deposit fee of S$10.00 and a stamp duty of S$10.00 are payable upon the deposit of each instrument of transfer with CDP.

Transactions in our Shares under the book-entry settlement system will be reflected by the seller’s securities account being debited with the number of Shares sold and the buyer’s securities account being credited with the number of Shares acquired. No transfer stamp duty is currently payable for Shares that are settled on a book-entry basis.

A Singapore clearing fee for trades in our Shares on the Main Board of the SGX-ST is payable at the rate of 0.04% of the transaction value subject to a maximum of S$600.00 per transaction. The clearing fee, instrument of transfer, deposit fee and share withdrawal fee may be subject to GST currently at 7.0%.

Dealings of our Shares will be carried out in Singapore dollars and will be effected for settlement through CDP on a scripless basis. Settlement of trades on a normal “ready” basis on the Main Board of the SGX-ST generally takes place on the 3rd Market Day following the transaction date and payment for the securities is generally settled on the following business day. CDP holds securities on behalf of investors in securities accounts. An investor may open an account with CDP or a sub-account with a CDP depository agent. The CDP depository agent may be a member company of the SGX-ST, bank, merchant bank or trust company.

Indicative Timetable for Listing

The indicative timetable is set out below for the reference of applicants:

Indicative Time and Date Event

5 August 2011, 9.00 a.m. Opening of Invitation

15 August 2011, 12.00 noon Close of Application List

16 August 2011 Balloting of applications, if necessary (in the event of over-subscription for the Offer Shares)

17 August 2011, 9.00 a.m. Commence trading on a “ready” basis

22 August 2011 Settlement date for all trades done on a “ready” basis on 17 August 2011

The above timetable is only indicative as it assumes that the closing of the Application List takes place on 15 August 2011, the date of admission of our Company to the Official List of the Main Board of the SGX-ST will be 17 August 2011, the SGX-ST’s shareholding spread requirement will be complied with and the Invitation Shares will be issued or allotted and fully paid prior to 17 August 2011. The actual date on which our Shares will commence trading on a “ready” basis will be announced when it is confirmed by the SGX-ST.

The above timetable and procedures may be subject to such modifications as the SGX-ST may, in its discretion, decide, including the decision to permit trading on a “ready” basis and the commencement date of such trading.

In the event of any changes in the closure of the Application List or the shortening or extension of the time period during which the Invitation is open, we will publicly announce the same:

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THE INVITATION

(a) through a SGXNET announcement to be posted on the internet at the SGX-ST website http://www.sgx.com; and

(b) in a local English and a local Chinese newspaper, such as The Straits Times and Lianhe Zaobao.

Results of the Invitation including the level of subscription and/or purchase and the basis of allotment and/or allocation of the Offer Shares will be provided as soon as it is practicable after the closure of the Application List through the channels in (a) and (b) above.

Investors should consult the SGX-ST announcement on the “ready” trading date on the internet (at SGX-ST website http://www.sgx.com), or the newspapers, or check with their brokers on the date on which trading on a “ready” basis will commence.

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THE INVITATION

Net Proceeds from Issue of New Shares

Based on the Issue Price, our estimated net proceeds from the issue of New Shares (assuming the Over-allotment Option is not exercised), after deducting our share of the underwriting commission, placement commission, brokerage and other estimated expenses payable in relation to the issue of New Shares (estimated to be approximately S$3.9 million), will be approximately S$62.6 million. We will not receive any of the proceeds from the Vendor Shares sold by the Vendors in the Invitation.

We intend to use our gross proceeds from the issue of the New Shares primarily as follows:

Purpose

Estimated amount

(S$ million)

Estimated amount allocated for each dollar of the gross proceeds raised

from the issue of New Shares (cents)

Repayment of the Term Loan 30.0 45.1Development and expansion of grocery retailing business and operations in Singapore and overseas

20.0 30.1

Working capital purposes 12.6 18.9Expenses incurred in connection with the issue of New Shares

3.9 5.9

Total 66.5 100.0

If the Over-allotment Option is exercised by the Stabilising Manager, we shall use the net proceeds arising therefrom for our working capital requirements.

Please see the section entitled “Prospects, Business Strategies and Future Plans” of this Prospectus for more details. Save as disclosed in this section, none of the proceeds from the issue of the New Shares will be used to discharge, reduce or retire any indebtedness of our Group. Please see the section entitled “Capitalisation and Indebtedness” of this Prospectus for further information on the Term Loan.

The foregoing represents our best estimate of the allocation of our net proceeds from the issue of the New Shares based on our current plans and estimates regarding our anticipated expenditures. Actual expenditures may vary from these estimates and we may find it necessary or advisable to re-allocate our net proceeds within the categories described above or to use portions of our net proceeds for other purposes. In the event that we decide to re-allocate our net proceeds from the issue of the New Shares for other purposes, we will publicly announce our intention to do so through a SGXNET announcement to be posted on the Internet at the SGX-ST website, http://www.sgx.com.

We have undertaken to announce periodically via SGXNET the use of the net proceeds from the issue of the New Shares as and when the net proceeds from the issue of the New Shares are materially disbursed, and to provide a status report on the use of the net proceeds from the issue of the New Shares in the annual report(s) of our Company.

Pending the deployment of the net proceeds as aforesaid, the net proceeds may be added to our working capital, placed as deposits with banks or financial institutions, or used for investment in short-term deposits, money market or debt instruments, as our Directors may deem appropriate in their absolute discretion.

In the event that the amount set aside to meet the estimated expenses listed above is in excess of the actual expenses incurred, such expenses will be made available for our working capital purposes.

Net Proceeds from Sale of the Vendor Shares

The estimated net proceeds attributable to the Vendors from the sale of the Vendor Shares after deducting the Vendors’ share of underwriting commission, placement commission and brokerage (estimated to be approximately S$1.3 million), will be approximately S$48.2 million.

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USE OF PROCEEDS AND LISTING EXPENSES

Expenses incurred in connection with the Invitation

Save for the underwriting and placement commission and brokerage which will be borne by our Company and the Vendors in the proportion in which the Invitation Shares are offered by each of them, the rest of the listing expenses will be borne by our Company.

The Invitation involves both listing existing Shares and issuing new Shares. The cost directly attributable to issuing new Shares (including underwriting commission, placement commission and brokerage) will be recognised directly in equity and any cost attributable to listing existing Shares will be expensed as incurred.

We estimate that the Invitation expenses, including the professional fees, underwriting commission, placement commission and brokerage and miscellaneous expenses, will amount to approximately S$5.3 million. A breakdown of these expenses (inclusive of GST of 7%) is set out below:

Estimated amount

(S$ million)As a percentage of the gross proceeds

raised from the Invitation (%)

Invitation expenses(1)

Professional Fees 1.5 1.3Underwriting commission, placement commission and brokerage(2)

3.1 2.7

Miscellaneous expenses (including listing fees) 0.7 0.6

Total 5.3 4.5(3)

Note(s):

(1) Assuming the Over-allotment Option is not exercised.

(2) Please refer to the section entitled “Other General Information – Management and Underwriting Agreement and Placement Agreement” of this Prospectus for more information.

(3) Does not add to total due to rounding.

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USE OF PROCEEDS AND LISTING EXPENSES

You should evaluate carefully each of the following considerations and all of the other information set forth in this Prospectus before deciding to invest in our Shares. Some of the following considerations relate principally to the industry in which we operate and our business in general. Other considerations relate principally to general, social, economic, political and regulatory conditions, the securities market and ownership of our Shares, including possible future dilution in value of our Shares.

If any of the following considerations and uncertainties develop into actual events, our business, financial condition or results of operations could be materially and adversely affected. In such a case, the trading price of our Shares could decline due to any of these considerations, and you may lose all or part of your investment in our Shares.

Risks Relating To Our Business And Operations

Terrorist attacks, armed conflicts, and/or outbreaks of Severe Acute Respiratory Syndrome (“SARS”), avian influenza, H1N1 influenza and/or other communicable diseases, may affect the markets in which we operate

Any outbreak of diseases in livestock or food scares in the region or around the world, for instance, SARS, the avian influenza H5N1 virus, H1N1 influenza, salmonella, porcine respiratory and encephalitis syndrome or the Nipah virus, may lead to a reduction in the consumption of the affected type of meat or food by consumers. In addition, a loss in consumer confidence arising from an outbreak of disease concerning any particular food product may force us to reduce or eliminate the sale of that food product.

Further, sources of supply for the affected type of food products may also be reduced or the relevant authorities may ban the import of the affected type of food products from particular countries as a result of the outbreak of disease. Such reductions in supply may lead to an increase in the prices of affected food products which we may not be able to pass on to our customers. Any increase in prices of food products may adversely affect our financial performance.

The effects of terrorist attacks or armed conflicts may negatively affect our operations and business or those of our suppliers or customers. Such terrorist attacks or armed conflicts could have an adverse impact on our customers’ demand for the products we retail, our supply or distribution networks or our stores, which in turn could have an adverse impact on our business operations and financial performance. Political and economic instability resulting from such terrorist attacks and armed conflicts could also negatively impact our business operations and financial performance.

We are exposed to risks associated with power supply breakdowns

Breakdowns in power supply may disrupt our business operations as our customers may leave, or be deterred from visiting, our stores. In addition, as a grocery retailer, we carry significant amounts of perishable food products as part of our inventory, such as chilled meat, frozen food products, dairy products and live seafood, which are stored at our central warehouse and at various storage locations, as well as stored and displayed in our stores. Certain perishable food products require particular and consistent conditions for storage, which are in turn dependent on continuous and unbroken power supply. In the event that we are subject to a prolonged power breakdown, such perishable food products may be subject to spoilage and we may suffer significant losses as a result. There can be no assurance that our operations will not be subject to power supply breakdowns, which may cause disruptions or cessations of our business and adversely impact our financial performance.

Our continued success is dependent to a significant extent on our key management and our ability to attract and retain qualified personnel

Our success to date has been largely due to the vision and strategic contributions of our Executive Directors, Mr. Lim Hock Chee, Mr. Lim Hock Eng, Mr. Lim Hock Leng and Mr. Tan Ling San, who each have decades of experience in the industry and have been instrumental in developing the business of our Group. We also have an experienced management team, who each also have decades of experience in their respective areas of expertise. Our continued success will be dependent, to a large extent, on our ability to retain the services of our Executive Directors, the commitment of our key management personnel

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RISK FACTORS

and our ability to identify, recruit, train and retain qualified employees. Although we have purchased key-man insurance for certain of our Executive Directors, the loss of the services of any of our key personnel without suitable replacements may adversely affect our operations and future performance.

We may face rising labour costs or increases in the costs of food products or general merchandise

Our business of grocery retailing is labour-intensive and our ability to meet our labour requirements, whilst controlling wage and labour-related costs, may be subject to numerous external factors, including the availability of a sufficient number of suitable persons in the relevant work force, prevailing wage rates, demographics and health and insurance costs. Our growth plans will require us to hire, train and retain a significant number of new employees in the future. From time to time, the grocery retailing industry has experienced a shortage of skilled personnel, especially store managers. We compete against other grocery retailers and other retailers for these skilled personnel. We may have to increase wages and benefits to attract and retain qualified personnel or risk considerable employee turnover. If we are unable to hire, train and retain qualified employees at a reasonable cost, we may be unable to execute our growth strategy and our financial performance may be adversely affected.

In addition, our grocery retailing business involves the sale of food products and general merchandise which we purchase from suppliers and contract manufacturers. The cost and availability of these products are subject to many economic and political factors and events occurring throughout the world which we can neither control nor accurately predict. The prices of certain food products have been subject to high volatility. In the event that we are unable to pass on any significant increases in the costs of food products or general merchandise to our customers, our financial performance may be affected.

We may be affected by contaminated food products, complaints and claims from consumers and/or negative publicity

In the event that consumers lose confidence in the safety or quality of certain food products due to, for example, adverse publicity in newspaper or consumer reports, consumers may be discouraged from buying such products from our stores, which may lead to lower sales and adversely affect our financial performance.

The packaging, marketing, distribution and sale of food products entail an inherent risk that a food product may contain contaminants and be inadvertently redistributed by our stores. Real or perceived sales of contaminated food products by us could result in product liability claims, product recalls and a loss of consumer confidence and sales, and may have a material adverse effect on our reputation, sales and operations. Further, depending on the severity of such events, we may even be ordered to suspend or cease all or part of our business operations by the relevant authorities and the results of our operations may consequentially be materially affected.

In addition, any negative publicity or announcements relating to us or our Directors, Key Executives, Controlling Shareholders or their Associates may adversely affect the market’s perception of us or our stock performance, whether or not such allegations are justified. For example, property owned by E Land Properties was subject to certain negative press coverage in October 2010, when Channel NewsAsia reported that mosquito larvae was found breeding at a “Sheng Siong-owned wet market”, being the Elias Mall market leased by E Land Properties from HDB. Our Group’s Elias Mall Market Stalls are located in this Elias Mall market. Other examples of negative publicity include unsuccessful attempts at joint ventures, acquisitions or takeovers, and any involvement in insolvency proceedings.

We may be affected by our leases, including by rental increases, failure to procure renewals of existing leases or new leases at strategic locations or termination of leases prior to expiry

We lease and/or license all of our premises for our business activities. As such, rental costs form a significant component of our total operating expenses. For FY2008, FY2009, and FY2010, rental costs of our stores as a percentage of our total revenue were approximately, 1.8%, 1.9%, and 2.3% respectively. Please refer to the sections entitled “Management’s Discussion and Analysis of Results of Operations and Financial Position”, and “Trend Information” of this Prospectus for more details.

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Given the economic growth of Singapore generally, rental costs in Singapore for new or renewed leases may increase. We may also be unable to obtain or renew leases on terms and conditions favourable to us, or at all. Certain of our leases provide that the landlord may terminate the lease prior to expiry. For example, in November 2010, our Ten Mile Junction Supermarket was closed as the landlord sold the premises to a third party and the lease was not renewed, and in March 2011, we received notice that our Tanjong Katong Supermarket would have to close in September 2011 as the landlord had sold the premises to a third party and the lease would not be renewed. In addition, in the event a landlord is of the opinion that our manner of occupation or our operations are not consistent with the landlord’s terms or conditions for use of the premises, we may be subject to inspections, required to adapt or curtail our operations, and/or our lease of such premises may be terminated.

We also sub-lease a portion of our leased premises to third parties, and have obtained or are in the process of obtaining the requisite approvals for such sub-leases. Our sub-leases may be terminated in the event that such approvals are not forthcoming, or the leases are not renewed or terminated prior to expiry. For example, we terminated the sub-leases for our Ten Mile Junction Supermarket as the landlord sold those premises to a third party and the lease was not renewed. Due to such termination, our rental income from the relevant sub-leases was reduced by approximately S$2.0 million in FY2010. Please refer to the section entitled “General Information of our Group – Properties” of this Prospectus for more details.

The termination or non-renewal of our leases or renewal upon less favourable terms may have an adverse effect on our business and financial performance as we may have to seek alternative sites for existing stores, and there can be no assurance that alternative sites will be available at comparable locations or leased on comparable terms.

The success of our business and our growth also depend on our ability to secure good locations for our stores. In our opinion, good locations for our stores possess characteristics including heavy human traffic flow, reasonable rental costs and close proximity to densely populated housing estates. There is no assurance that we will be able to continue to secure good locations to expand our business or have the financial resources to do so, and this may affect our growth and financial performance.

In addition, as at the Latest Practicable Date, we lease or license four (4) of our stores’ premises and three (3) stalls from E Land Properties and a packing and storage area from SS Canteen. Each of E Land Properties and SS Canteen is an Associate of our Founders and an Interested Person in relation to us. Although the rental for these properties were negotiated on an arm’s length basis, and we intend to continue negotiating such leases and licences on an arm’s length basis, conflict of interests may arise between us and E Land Properties, SS Canteen or our Founders, including in relation to the rental rates to be charged. Please refer to the section entitled “Interested Person Transactions and Conflict of Interests” of this Prospectus for more details.

Our success is dependent on our ability to achieve substantial cost savings through various business strategies

As profit margins in the grocery retail industry tend to be narrow, we strive to reduce costs by increasing productivity and efficiencies in our distribution processes and developing other similar strategies. If we are unable to achieve the cost reductions planned, there may be an adverse effect on our financial performance.

Please refer to the section entitled “Prospects, Business Strategies and Future Plans – Our Business Strategies and Future Plans” of this Prospectus for more details.

We may not be able to maintain appropriate inventory levels or anticipate or respond to changing consumer preferences on a timely basis

We sell a wide selection of products, including live and chilled produce such as seafood, meat and vegetables, processed, packaged and/or preserved food products, and general merchandise such as toiletries and essential household products. As at 31 December 2010, our inventories had a carrying value of approximately S$26.4 million, and represented approximately 15.1% of our total assets. As at 31 December 2010, our inventory write-offs amounted to S$1.5 million. We constantly review our inventory control methods and procedures in order to minimise spoilage and overstock and to ensure that sufficient inventory of our products are available to meet the demands of our customers. In addition, we constantly

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review and change the product mix offered by our stores to our customers to ensure that the product mix reflects, inter alia, our customers’ demographics, lifestyles and purchasing patterns, in order to optimise our sales. In the event that we are unable to maintain appropriate inventory levels or anticipate or respond to changes in our customers’ purchasing requirements in an appropriate and timely manner or at all, our reputation, sales and financial performance may be adversely affected.

Further, in the event that any inventory stored in our stores, warehouse or other storage locations is subject to damage, including by floods or fires, this may reduce our inventory levels, disrupt our business operations, and/or adversely affect our sales and financial performance.

Certain of our stores contribute significantly to our financial results

As at 31 December 2010, six (6) of our stores (“Key Stores”), including our Ten Mile Junction Supermarket and our Tanjong Katong Supermarket, each contributed between 5.0% and 10.0% to our revenue for FY2010. In November 2010, our Ten Mile Junction Supermarket was closed as the landlord had sold the premises to a third party and the lease was not renewed. In March 2011, we received notice that our Tanjong Katong Supermarket would have to close in September 2011 as the landlord had sold the premises to a third party and the lease would not be renewed. In the event that there are disruptions in the business or operations or material changes to the financial results of any of the other Key Stores or any or all of our stores, our financial performance may be affected.

We rely heavily on automated systems to operate our business

We have large and complex information technology systems which are integral to our business operations. It may be difficult or costly to keep our information technology systems up-to-date, or to implement system maintenance and upgrades, and disruptions to our business may result, leading to expense or loss. Disruptions to our systems may also occur due to security breaches, damage to our data centres, or external interruptions in technology infrastructure. Although we have devised and implemented a data recovery plan, including back-up procedures, any system disruption or failure could reduce customer satisfaction, and/or adversely affect our reputation, operations and future growth.

As we accept debit and credit cards for payment, including China UnionPay credit and debit cards, our Sheng Siong Diners Club credit cards, as well as Mastercard and Visa credit and debit cards, we are subject to the Payment Card Industry Data Security Standard (“PCI Standard”) issued by the Payment Card Industry Security Standards Council, which specifies various requirements for compliance to prevent, inter alia, credit and debit card fraud.

Despite our efforts to comply with the PCI Standard and otherwise secure our information technology systems, our network security may be compromised and our business may be disrupted or our confidential information may be misappropriated, which may adversely affect our business, reputation, and cause us to incur significant costs in reimbursing third parties.

We may be subject to disruptions in our supply or distribution networks and store operations

We source our food products and general merchandise from a large number of domestic and international suppliers and contract manufacturers. Some of our products are stored in our warehousing and distribution centre, and subsequently delivered to our various stores by our fleet of trucks. Some of our products are delivered directly to our stores by our suppliers. We also store some products, such as rice, fish, fruits and vegetables, at our premises or premises belonging to third party logistics providers.

Various external factors, including political or economic instability and severe weather conditions or natural disasters such as floods, earthquakes or typhoons, in the areas in which we have supply or distribution networks or stores, may result in closure of such areas, disruption of our supply or distribution networks and store operations, delivery delays, decreases in the availability or selection of products in our stores, reductions in store personnel, and costs increases. Severe weather conditions and natural disasters may also affect the growing conditions, quantity and quality of crops yielded by food producers and adversely affect the availability or cost of certain products. Such disruptions to our supply or distribution network or store operations may adversely affect our business operations and financial performance.

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Electronic commerce may change the competitive landscape of our business

In light of the rapid development of electronic commerce, there can be no assurance that our contract manufacturers’ and suppliers’ current distribution model and our customers’ current purchasing methods will not change. Our contract manufacturers and suppliers may change their business model, including by choosing to undertake direct distribution of their products to consumers. Our consumers may also choose to shop for groceries and general merchandise online instead of shopping at our stores in person. We do not currently provide any online grocery retailing services. Any material changes in our contract manufacturers’ and suppliers’ current distribution model or our customers’ current purchasing methods may adversely affect our business and our financial performance.

Our intellectual property rights may be subject to imitation or otherwise infringed

Our “Sheng Siong” trade name has become an established household brand in Singapore and our trademarks are used in the marketing and promoting of our products and merchandise to our customers. Our trademarks include trademarks relating to our grocery retailing and procurement operations as well as trademarks relating to each of our 10 housebrands. We have registered or applied to register our trademarks to protect our intellectual property rights in various jurisdictions, including Singapore. Please refer to the section entitled “General Information of Our Group – Intellectual Property – Trademarks” of this Prospectus for more details. In the event that our trademarks or other intellectual property rights are imitated or otherwise infringed, our reputation and business may be adversely affected as a result. There can be no assurance that our trademarks or other intellectual property rights will not be susceptible to imitation or other infringement. In the event that we initiate legal or other proceedings to enforce our intellectual property rights, there can be no assurance that we will succeed in such proceedings or be able to obtain favourable outcomes at a reasonable cost or at all.

We may be subject to pilferage or misappropriation of cash or assets or vandalism

As at the Latest Practicable Date, we operated the Sheng Siong Groceries Chain, including 23 stores all across Singapore, with each store retailing a wide selection of products and general merchandise. We have adopted various cash management systems and security measures for our operations but there can be no assurance that we will not be susceptible to pilferage or misappropriation of cash or assets or vandalism by third parties or our own employees. In the event that such pilferage or misappropriation or vandalism occurs, we may be subject to financial losses and our reputation and branding may be adversely affected.

Fluctuations in currency exchange rates may have an adverse impact on our financial results

Due to the nature of our business, particularly our sourcing operations, we incur expenses in a variety of foreign currencies, such as the Australian dollar, Euro, and U.S. dollar. We purchase foreign currencies to hedge against fluctuations in exchange rates. As at the Latest Practicable Date, we do not have any hedging policy with respect to foreign currency exposure. Significant volatility, particularly between the Singapore dollar and other operating currencies, may have an adverse impact on our financial results. Please see the section entitled “Management’s Discussion and Analysis of Results of Operations and Financial Position – Foreign Exchange Exposure” of this Prospectus for more details.

We are subject to applicable laws and regulations including food safety and/or environmental laws

We are subject to various applicable laws, regulations, administrative practices and policies governing the grocery retailing industry in the jurisdiction(s) in which we operate our stores, including but not limited to, the laws and regulations relating to food safety, handling and storage, hygiene standards, food labelling, and licensing for the sale of food and alcoholic beverages. During the course of our operations, we have received letters of complaint from landlords and certain authorities regarding allegations relating to noise, obstruction of public areas or walkways, business operations and hygiene. For example, between 2008 and 2010, our Group’s hygiene-related issues have included (i) mosquito breeding; (ii) failure to dispose of food waste; (iii) unclean washrooms; (iv) unclean meat and fish processing areas; and (v) possible cross-contamination between live produce (frogs and turtles). Although we have taken all reasonable steps to address and resolve the issues raised, failure to address and resolve such issues may result in us being subject to fines or other penalties, and may affect our ability to renew the leases of our stores. We may also be subject to associated liabilities relating to our stores, warehouses and offices

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regardless of whether such environmental conditions were created by a prior owner or tenant or by us. Such compliance or liabilities may be costly and may result in disruptions to our business operations and adversely affect our financial performance.

We may be involved in legal and other proceedings arising from our operations

From time to time, we are a party to legal proceedings, including matters involving personal injury and other proceedings arising from our operations. In addition, in the course of our business we sell numerous products which are sourced from a large number of suppliers and contract manufacturers and may consequently be involved in legal or other proceedings initiated in relation to a product, for instance, in the event a customer has an adverse reaction to a product sold by our stores, or a product sold by our stores is alleged to infringe the intellectual property rights of a third party. These proceedings, however, involve risk and any unexpected outcomes may have a material adverse impact on our financial results. Further, depending on the severity of the event, we may be required to, inter alia, cease sales of the relevant product and may even be ordered to suspend or cease all or part of our business operations by the relevant authorities. Although certain of our suppliers and contract manufacturers provide us contractual indemnities relating to product quality and intellectual property, our business operations and financial performance may nevertheless be materially affected. Please refer to the section entitled “Other General Information - Litigation” of this Prospectus for more details.

We face intense competition from traditional grocery retailers and non-traditional competitors

We face intense competition from traditional grocery retailers such as wet markets, supermarkets and hypermarkets, and from non-traditional competitors such as convenience stores, petrol kiosk convenience stores and restaurants. Increased competition may result in lower sales and greater operating costs and have an adverse effect on our financial performance.

Our ability to attract customers depends largely on a combination of location, quality, price, service, selection and condition of groceries and other retail products. Our competitors may successfully attract our customers to their stores by matching or exceeding what we offer our customers. Our competitors may also open new competitor stores or increase the number of competitor stores in our operating regions. As pricing is a significant driver in consumer decisions in our industry, our competitors may engage in price competition. We may respond by increasing advertising and promotions, which may increase our costs. Certain of our competitors are larger than us and may have greater supply or distribution networks, brand recognition, or financial resources available and may be able to devote greater resources to pricing and promotional programs, for example, by selling inventory below cost to drive sales increases. There can be no assurance that we will have sufficient resources to respond to competitors’ investments in store base and pricing and promotional programs.

We strive to achieve and maintain favourable perceptions of our stores and our housebrand products, and effectively market our products to customers at competitive prices, and source our products efficiently. Failure to accomplish these objectives may impair our ability to compete successfully and adversely affect our growth and financial performance.

Please refer to the section entitled “General Information of our Group – Competition” of this Prospectus for more details.

Our business may be subject to fluctuations

We are primarily engaged in the business of grocery retailing, and like most retail businesses, the performance of our stores is affected by household disposable income and consumer spending levels, which are linked to general economic conditions. As a result, our financial performance may be affected due to changes in economic conditions.

In addition, our sales are subject to seasonality, as sales of our food products and general merchandise typically increase during festive seasons such as Chinese New Year, Hari Raya Puasa and Deepavali. These sales patterns may not be indicative of future sales performances and may fluctuate substantially in the future, in which case our financial performance may be adversely affected.

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We may be found to contravene our licences and/or our licences may be revoked and/or not renewed

Our operations, which involve grocery retailing and food processing, are subject to and dependent on a wide range of licences, including food sale, food processing and environmental licences, issued by the relevant Singapore authorities. For example, we are required to obtain a licence to import and carry on wholesale dealings in rice from International Enterprise Singapore, and a licence to operate a meat or fish processing establishment or cold store from the AVA. There can be no assurance that our existing licences will be extended or renewed by the relevant regulatory authority or authorities on the expiry of such licences. Such licences may also be extended or renewed on conditions which are more stringent or restrictive than those currently imposed on us.

If we are found to be in breach of any condition of applicable licence(s) or any provision of any code of practice, standard of performance, or other governmental regulation or regulatory requirement, the relevant government or regulatory authority may take action against us, including issuing warnings, imposing penalties (including fines and/or terms of imprisonment on our employees, where applicable), suspending the licence (or part thereof), reducing the duration of the licence or imposing additional conditions or restrictions on the licence, or cancelling the licence (in whole or in part). Please refer to the section entitled “General Information of our Group – Permits, Licences, Approvals, Certifications and Government Regulations” of this Prospectus for more details.

In the event that we are unable to procure or retain licences which are essential to our operations, or where our operations do not meet the requirements necessary to qualify for the relevant statutory exemptions, our business operations and financial performance may be adversely affected.

Our contract manufacturers may breach their obligations to us or fail to meet requisite standards

As at the Latest Practicable Date, we offer over 300 products under our 10 housebrands to our customers at our stores. Our housebrand products are produced by selected contract manufacturers approved by us, according to our specifications. We have adopted various quality control measures, but there can be no assurance that all of our housebrand products produced or manufactured by our contract manufacturers will meet our specifications or other requisite standards imposed by government or regulatory authorities or that there will be no product defects. In the event that our housebrand products do not meet requisite standards or contain defects, our reputation and the value of our housebrands may diminish, and our market share, sales and growth of our business may be adversely affected. Please see the section entitled “General Information of our Group – Our Business” of this Prospectus for more details.

Our insurance policies do not cover all operating risks

We maintain insurance policies covering losses, including medical and work injury insurance, public liability, fire insurance, insurance relating to property damage, business interruption, and keyman insurance. However, we do not carry product liability insurance for our food products and general merchandise, or insurance that covers losses arising from certain operating risks such as acts of terrorism. Please refer to the section entitled “General Information of our Group – Insurance” of this Prospectus for more details.

With respect to losses which are covered by our policies, it may be difficult and it may take time to recover such losses from insurers, especially if these losses are incurred outside Singapore. In addition, we may not be able to recover the full amount from the insurer. There can be no assurance that our policies would be sufficient to cover all potential losses, regardless of the cause, or whether we can recover for such losses, or whether the recovery for such losses will be subject to protracted delays. Further, any significant loss may still have a material adverse impact on our business continuity which may consequently affect our financial condition and/or performance.

There is no assurance that our future plans will be commercially successful

We plan to open new stores from 2011. We may also choose to renovate or undertake improvement works on our existing stores. If we are unable to open new stores or undertake renovations as planned due to reasons including real estate or environmental issues or delays, our financial results may be

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adversely affected. If as a result of such issues or delays these capital projects do not stay within the time or financial budgets we have forecasted, our future financial performance may be adversely affected. In addition, the new or renovated stores may not achieve our anticipated same-store sales or profit levels.

Our Directors will also consider various factors including, the potential return on investments, our ability to identify and obtain strategic locations for new stores on favourable terms, changes in consumer preferences or purchasing power, our ability to manage proposed expansions and recruit and train appropriate personnel, and our ability to successfully replicate or adapt our business model to new locations or jurisdictions, in deciding whether to proceed with our expansion plans. In the event that we fail to proceed or implement our expansion plans or if we encounter difficulties in implementation or management and are unable to succeed in our plans to expand our grocery retailing business, our growth and future prospects may be adversely affected. Please refer to the section entitled “Prospects, Business Strategies and Future Plans” of this Prospectus for more details.

The successful implementation of our expansion plans also depends on a number of factors, some of which may not be within our control, including, inter alia, market conditions and the availability and suitability of financing options, as well as prevailing laws and regulations which may require us to obtain or renew certain approvals or licences. We may not be able to, inter alia, obtain suitable financing, or obtain or renew requisite approvals or licences in a timely manner or at all.

We may be subject to additional tax assessments

There are no specific tax regulations which deal with the characterisation of capital gains. Whether a gain realised from the disposal of investments is a capital gain or a trading profit, is determined based on the circumstances of the transaction. In the event that the capital gains realised by our Group on disposals of investments, which amounted to approximately S$3.1 million for FY2009 and approximately S$9.6 million for FY2010, are considered to be trading gains by the Inland Revenue Authority of Singapore tax will be assessed on such capital gains at the prevailing corporate tax rate of 17%, and our Group will have to pay the tax so assessed. This may negatively affect our Group’s financial performance. Please see the section entitled “Management’s Discussion and Analysis of Results of Operations and Financial Position – Results of Operations – Income Tax Expense” of this Prospectus for further details.

Risks Relating To Investment In Our Shares

Our Controlling Shareholders will retain significant control over our Group after the Invitation, which will allow them to influence the outcome of matters submitted to Shareholders for approval

Upon completion of the Invitation, our Controlling Shareholders will beneficially own in aggregate approximately 73.8% (assuming the Over-allotment Option is not exercised) of the issued share capital of our Company. As a result, these persons, if they act together, will be able to exercise significant influence over matters requiring Shareholders’ approval, including the election of Directors and approval of significant corporate transactions, and will have veto power with respect to any Shareholders’ action or approval requiring a majority vote. Such concentration of ownership will place each of them in a position to affect significantly our corporate actions such as mergers or takeover attempts (notwithstanding that the same may be synergistic or beneficial to our Group) in a manner that could conflict with the interests of our public Shareholders.

New investors will incur immediate dilution and may experience further dilution

Our Issue Price of S$0.33 per Share is higher than our Adjusted NAV per Share of 7.87 cents (adjusted for the net proceeds from the Invitation). Investors who subscribe for and/or purchase the Invitation Shares will therefore experience immediate and significant dilution in the NAV of their Shares. In addition, we intend to grant our employees share options to acquire our Shares under the Sheng Siong ESOS. To the extent that such options are granted and exercised, there will be further dilution to Investors in this Invitation. Please refer to the section entitled “Dilution” of this Prospectus for more details.

Investors may not be able to participate in future issues of our Shares

If we offer to our Shareholders rights to subscribe for additional Shares or any right of any other nature, we will have discretion as to the procedure to be followed in making the rights available to our Shareholders or in disposing of the rights for the benefit of our Shareholders and making the net proceeds

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available to our Shareholders. We may choose not to offer the rights to our Shareholders having an address outside Singapore. Accordingly, Shareholders who have a registered address outside Singapore may be unable to participate in rights offerings and may experience a dilution in their shareholdings as a result.

Additional funds raised through issues of new Shares for future growth will dilute Shareholders’ equity interests

We may in the future expand our capabilities and business through acquisitions, joint ventures, strategic partnerships and alliances with parties who can add value to our business. We may require additional equity funding after the Invitation and the equity interest of our Shareholders will be diluted should we issue new Shares to finance future acquisitions, joint ventures and strategic partnerships and alliances.

Future sales or issuances of our Shares could adversely affect our Share price

Any future sale or issuance of our Shares may have a downward pressure on our Share price. The sale of a significant amount of our Shares in the public market after the Invitation, or the perception that such sale may occur, could materially and/or adversely affect the market price of our Shares. These factors may also affect our ability to sell or issue additional equity securities. Except as otherwise described under the section entitled “Share Capital and Shareholders – Moratorium” of this Prospectus and subject to applicable laws and regulations, there is currently no restriction on the ability of our Controlling Shareholders to sell Shares, either on the SGX-ST or otherwise.

Our Share price may be volatile, which could result in substantial losses for investors acquiring our Shares pursuant to the Invitation

The Issue Price was determined through a book-building exercise and arrived at after consultation between our Company, the Vendors and the Issue Manager, Underwriter and Placement Agent and after taking into consideration, inter alia, prevailing market conditions and estimated market demand for the Invitation Shares. The Issue Price may not be indicative of prices which will prevail in the trading market after the Invitation and investors may not be able to resell their Shares at or above the Issue Price. Volatility in the trading price of our Shares may be caused by factors beyond our control and may not correlate with or be proportionate to our operating results. Further, the market price of our Shares may fluctuate significantly and rapidly in response to, inter alia, the following factors, some of which are beyond our control:-

(a) variations in our operating results;

(b) changes in securities analysts’ estimates of our financial performances;

(c) changes in market valuations of similar companies;

(d) announcements by our competitors or ourselves of the gain or loss of significant acquisitions, strategic partnerships, joint ventures or capital commitments;

(e) fluctuations in stock market price and volume;

(f) our involvement in litigation;

(g) changes in general economic and stock market conditions; and

(h) additions or departures of key personnel.

There has been no prior market for our Shares, and the Invitation may not result in an active or liquid market for our Shares

Prior to the Invitation, there has been no public market for our Shares. Therefore, we cannot assure investors that an active public market will develop or be sustained after the Invitation. The Issue Price was determined through a book-building exercise and arrived at after consultation between our Company, the Vendors and the Issue Manager, Underwriter and Placement Agent and after taking into consideration,

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inter alia, prevailing market conditions and estimated market demand for the Invitation Shares. The Issue Price may not be indicative of prices which will prevail in the trading market after the Invitation and investors may not be able to resell their Shares at or above the Issue Price.

We may not declare dividends in the future on a regular basis or at all

For FY2010, CMM Marketing declared dividends of S$6.0 million and SS Supermarket declared dividends of approximately S$36.2 million. On 3 December 2010, SS Supermarket declared a dividend of approximately S$37.9 million which was paid via a distribution in specie of 5,650,028 shares of Citigroup Inc, a company listed on the New York Stock Exchange, effected on 17 December 2010, and 40,000,000 shares of China Hongxing Sports Limited, a company listed on the SGX-ST, effected on 20 December 2010. Please refer to Appendix B of the Prospectus entitled “Independent Auditors’ Report and the Proforma Financial Information for the Financial Year ended 31 December 2010” of the Prospectus for more details.

Although we currently do not have a formal dividend policy, we intend to distribute up to ninety percent. (90.0%) of our net profit after tax to our Shareholders for the financial years ended 31 December 2011 and 31 December 2012, as we wish to reward our Shareholders for participating in our Group’s growth. The declaration and payment of future dividends will depend on our operating results, financial condition, other cash requirements including capital expenditure, the terms of borrowing arrangements (if any), dividend yield of comparable companies (if any) listed in Singapore and other factors deemed relevant by our Directors. There is no assurance that dividend distributions will be made by our Company in future.

Further, the Term Loan extended by DBS Bank to CMM Marketing is subject to various banking covenants, including, inter alia, a prohibition on declaring, paying or making dividends or other distributions without DBS Bank’s prior consent. We have obtained DBS Bank’s consent to, inter alia, pay dividends subject to our Group being listed on the SGX-ST and the Term Loan being subsequently repaid with the proceeds raised from the Invitation. For further details, please see the section entitled “Capitalisation and Indebtedness” of this Prospectus.

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Exchange Controls

Singapore

Currently, no foreign exchange control restrictions exist in Singapore.

Malaysia

Malaysia continues to maintain a liberal foreign exchange administration policy. The foreign exchange laws in Malaysia that may be applicable to our future operations in Malaysia, include the Exchange Control Act 1953, the Exchange Control Notices and the Foreign Exchange Administration Rules. The current foreign exchange administration rules are mainly prudential measures to support the overall macro economic objective of maintaining financial and economic stability.

Investments

Investment in ringgit assets by non-residents

In general, non-residents are free to invest in any ringgit assets (including ringgit-denominated securities and private debt securities issued by non-residents in Malaysia). Non-residents who have such investments are free to repatriate profits or dividends arising therefrom, on the condition that such repatriation must be made in foreign currency other than the currency of Israel. Subject to the Guideline on the Acquisition of Properties issued by the Economic Planning Unit of the Prime Minister’s Department (“Properties Guideline”) and the provisions under the National Land Code 1965, non-residents are also able to purchase residential and commercial real estate properties in Malaysia. One of the exempted transactions to which the Properties Guideline is not applicable is the acquisition of residential properties of RM100,000 or above to be occupied as a hostel for the non-resident’s employees. In addition, acquisition of commercial unit, agriculture land and industrial land valued at RM500,000 and above by a foreign interest is exempted from obtaining approval from the Economic Planning Unit of the Prime Minister’s Department. However, under the National Land Code 1965, prior approval of the relevant State Authority (i.e. Ruler or Governor of the State) is required before a non-citizen or a foreign company may acquire land in Malaysia, provided that no such approval is required if the relevant land is subject to the category “industry” or to any condition requiring its use for industrial purposes.

Investment in foreign currency assets by residents

A resident company without domestic ringgit borrowing is allowed to invest (in any amount) in foreign currency assets. A resident company with domestic ringgit borrowing is allowed to invest as follows:-

The resident company is allowed to invest (in any amount) in foreign currency assets if such investment is funded by:-

(i) the resident company’s own foreign currency funds retained onshore or offshore; or

(ii) the proceeds from the listing through initial public offering on Bursa Malaysia Securities Bhd or other foreign stock exchanges.

If the investment aforesaid is funded by:-

(i) foreign currency borrowing, the resident company is free to invest up to the full amount of permitted foreign currency borrowing; and

(ii) conversion of ringgit, the resident company is free to invest up to RM50 million or its equivalent in aggregate and on a corporate group basis for each calendar year.

A resident who has foreign currency assets is free to repatriate and convert the divestment proceeds or income from its investment in such assets into ringgit with a licensed onshore bank and/or free to retain such proceeds or income in a foreign currency account in Malaysia.

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EXCHANGE CONTROLS AND EXCHANGE CONTROL INFORMATION

Financings

Lending to residents by non-residents

Lending by non-resident non-bank parent companies to residents’ subsidiaries:

A non-resident non-bank parent company(1) is free to lend any amount:-

(i) in foreign currency to its resident subsidiaries in Malaysia; and

(ii) in ringgit to its resident subsidiaries in Malaysia to finance real sector activities (i.e. any economic sector which is productive for Malaysia) in Malaysia.

Lending by other non-resident non-bank companies or non-resident individuals to residents:

(i) in ringgit: A non-resident non-bank company or a non-resident individual is allowed to lend up to RM1 million in aggregate to a resident company or a resident individual for use in Malaysia.

(ii) in foreign currency: A non-resident non-bank company or a non-resident individual is allowed to lend in foreign currency to:-

(a) a resident company provided that the total foreign currency borrowings of the resident company do not exceed the equivalent of RM100 million in aggregate on a corporate group basis. The resident company is required to obtain the prior permission of the Controller of Foreign Exchange for borrowings exceeding the limit aforesaid.

(b) a resident individual provided that the total foreign currency borrowings of the resident individual do not exceed the equivalent of RM10 million in aggregate. The resident individual is required to obtain the prior permission of the Controller of Foreign Exchange for borrowings exceeding the limit aforesaid.

Lending to non-residents by residents

(i) In ringgit: A resident non-bank company or a resident individual is free to lend any amount in ringgit to a non-resident (other than stockbrocking companies and banks) to finance real sector activities in Malaysia and to finance or refinance the purchase of residential and commercial properties in Malaysia.

(ii) In foreign currency: A resident non-bank company or a resident individual is also free to lend in foreign currency to a non-resident as follows:-

Resident Lender Amount

A resident lender (company or individual) without domestic ringgit borrowing

No limit

A resident lender (company or individual), with or without domestic ringgit borrowing, using its own foreign currency funds maintained onshore or offshore

No limit

A resident lender with domestic ringgit borrowing (provided that the such resident’s total investment in foreign currency assets, including lending in foreign currency, does not exceed the limit)

Note:

(1) A non-resident non-bank parent company refers to (a) a non-resident company with more than 50% shareholding in a resident company; or (b) the ultimate non-resident parent company (which is not a bank, an investment holding company owned by a bank or a stockbroking company) of the resident company.

46


(a) resident individual Through conversion of ringgit, up to RM1 million in aggregate per calendar year

(b) resident company Through conversion of ringgit, up to RM50 million in aggregate per calendar year on a corporate group basis

Financial Guarantees

Financial guarantees by non-residents to residents

A non-resident is allowed to give a financial guarantee (in any amount) to a non-bank resident. The financial guarantee obtained by the non-bank resident is required to be registered with the Controller of Foreign Exchange at least seven (7) working days prior to the obtaining of the financial guarantee if the aggregate amount of financial guarantees obtained by the non-bank resident exceeds RM50 million or its equivalent.

Financial guarantees by residents to non-residents

A non-bank resident is allowed to issue a financial guarantee (in any amount) on behalf or in favour of a non-resident. The financial guarantee issued by the non-bank resident is required to be registered with the Controller of Foreign Exchange at least seven (7) working days prior to the issuance of the financial guarantee if the aggregate amount of financial guarantees issued by the non-bank resident exceeds RM50 million or its equivalent.

Import and Export

Payment for the import and export of goods and services by a resident may be made either in ringgit or in foreign currency other than the currency of Israel. The proceeds from the export of goods must be repatriated to Malaysia in full, as per the sales contracts and the repatriation must be made within six (6) months from the date of export.

Prior permission of the Controller of Foreign Exchange is required for a resident to:-

(a) set-off the export proceeds against payables due to non-residents; or

(b) receive the export proceeds more than six (6) months after the date of export.

A resident is allowed to retain foreign currency export proceeds in foreign currency accounts maintained with any of the licensed onshore banks. Prior permission of the Controller of Foreign Exchange is required for the export proceeds to be retained in foreign currency accounts maintained with any of the licensed International Islamic Banks or non-resident banks.

47


Since incorporation, our Company has not declared any dividends.

The Term Loan extended by DBS Bank to CMM Marketing is subject to various covenants, including, inter alia, a prohibition on declaring, paying or making dividends or other distributions without DBS Bank’s prior consent. We have obtained DBS Bank’s consent to pay dividends subject to our Group being listed on the SGX-ST and the Term Loan being subsequently repaid with the proceeds raised from the Invitation. For further details, please refer to the sections entitled “Risks Relating to Investment in Our Shares – We may not declare dividends in the future on a regular basis or at all” and “Capitalisation and Indebtedness” of this Prospectus.

For FY2010, CMM Marketing declared dividends of S$6.0 million and SS Supermarket declared dividends of approximately S$36.2 million. On 3 December 2010, SS Supermarket declared a dividend of approximately S$37.9 million which was paid via a distribution in specie of 5,650,028 shares of Citigroup Inc, a company listed on the New York Stock Exchange, effected on 17 December 2010, and 40,000,000 shares of China Hongxing Sports Limited, a company listed on the SGX-ST, effected on 20 December 2010 (1). Please refer to Appendix B of the Prospectus entitled “Independent Auditors’ Report and the Proforma Financial Information for the Financial Year ended 31 December 2010” of the Prospectus for more details.

Although we currently do not have a formal dividend policy, we intend to distribute up to ninety percent. (90.0%) of our net profit after tax to our Shareholders for the financial years ended 31 December 2011 and 31 December 2012, as we wish to reward our Shareholders for participating in our Group’s growth. The declaration and payment of future dividends will depend on our operating results, financial condition, other cash requirements including capital expenditure, the terms of borrowing arrangements (if any), dividend yield of comparable companies (if any) listed in Singapore and other factors deemed relevant by our Directors. There is no assurance that dividend distributions will be made by our Company in future.

Any final dividend paid by us must be approved by an ordinary resolution of our Shareholders at a general meeting and must not exceed the amount recommended by our board of Directors. Our Directors may, without the approval of our Shareholders, also declare an interim dividend. We must pay dividends out of profits.

Information relating to taxes payable on dividends is set out in Appendix F entitled “Taxation” of this Prospectus.

Note:

(1) As a result, our Group no longer holds any quoted equity securities.

48

DIVIDEND POLICY

The following table shows our combined cash and cash equivalents, short-term debt, long-term debt and capitalisation of our Group as at 31 May 2011, on an actual basis and as adjusted for the Restructuring Exercise and the issue of Invitation Shares pursuant to the Invitation, the net proceeds from the issue of New Shares (after deducting the estimated expenses in relation to the Invitation) and the application of the net proceeds from the issue of New Shares in the manner described in the section entitled “Use of Proceeds and Listing Expenses” of this Prospectus.

You should read this table in conjunction with:

• the audited combined financial statements of our Group as set out in Appendix A entitled “Independent Auditors’ Report and the Combined Financial Statements for the Financial Years ended 31 December 2008, 2009 and 2010” and Appendix B entitled “Independent Auditors’ Report and the Proforma Financial Information for the Financial Year ended 31 December 2010” of this Prospectus, the related notes and the other financial information contained elsewhere in that document; and

• the sections entitled “Management’s Discussion and Analysis of Results of Operations and Financial Position” and “Selected Combined Financial Information” of this Prospectus.

Actualas at 31 May 2011(1)

As adjusted for the Restructuring Exercise,

the net proceeds from the issue of New Shares and the intended use of such

proceeds(S$’000) (S$’000)

Cash and cash equivalents 68,414 106,375

Indebtedness

CurrentBorrowings:Secured and guaranteed –

Non-currentBorrowings:Secured and guaranteed 24,605 –

Total Indebtedness 24,605 –

Total Shareholders’ Equity 57,554 120,120

Total Capitalisation and Indebtedness 82,159 120,120

Note:

(1) Taking into account the cash dividend distribution of S$927,058 and the reductions in capital of SS Supermarket and CMM Marketing of S$20,000,000 in total as per proforma adjustments as at 31 December 2010 highlighted in Appendix B entitled “Independent Auditors’ Report and the Proforma Financial Information for the Financial Year ended 31 December 2010”.

49

CAPITALISATION AND INDEBTEDNESS

Bank Borrowings

Term Loan

As at 31 May 2011, our borrowings included the Term Loan of up to S$30.0 million issued by DBS Bank to CMM Marketing to part finance the construction of our new Mandai Link Distribution Centre (“Project”). As at the Latest Practicable Date, approximately S$24.6 million of the Term Loan had been utilised. The Term Loan is secured and guaranteed.

The Term Loan has a tenure of three (3) years and is scheduled to be repaid by December 2012. It bears interest at a rate of 0.6% p.a. above the prevailing 3-month Singapore Interbank Offered Rate, which may be amended by DBS Bank from time to time by notification to us.

As at 31 May 2011, the Term Loan was secured by:

(a) a deed of assignment of all rights, title, interest, licences and remedies under the agreement entered into with JTC Corporation together with a mortgage in escrow to be perfected as a first legal mortgage over the Mandai Link Distribution Centre;

(b) an assignment of all rights and benefits under the construction contract entered into between our Group and the contractor appointed for the Project; and

(c) a corporate guarantee from SS Supermarket.

The Term Loan will be fully repaid using the proceeds from the issue of New Shares.

Credit Facilities

Our Group has credit facilities of up to S$2.0 million issued by OCBC Bank to CMM Marketing, comprising a letter of credit up to S$1.0 million and a foreign exchange facility of up to S$1.0 million for spot, forward or swap contracts. These facilities are guaranteed by (i) a deed of guarantee and indemnity from SS Supermarket; and (ii) a deed of guarantee and indemnity from Mr. Lim Hock Chee, Mr. Lim Hock Eng and Mr. Lim Hock Leng. As at 31 May 2011, our Group had not utilised these facilities.

Banker’s Guarantees

Our Group also has:

(a) a banker’s guarantee facility of up to S$6 million issued by OCBC Bank to SS Supermarket. These facilities are guaranteed by a deed of guarantee and indemnity from Mr. Lim Hock Chee, Mr. Lim Hock Eng and Mr. Lim Hock Leng. As at 31 May 2011, our Group had utilised approximately S$3.3 million of the banker’s guarantee facility; and

(b) a banker’s guarantee facility of up to S$68,000 with a tenure of 36 months issued by Citibank Singapore Limited to SS Supermarket. This facility is secured by a charge over cash deposits of not less than S$68,000. As at 31 May 2011, our Group had utilised approximately S$10,000 of the banker’s guarantee facility.

Our Group has not been in default of or been late in payments of either the principal or interest of the Term Loan or any of the other banking facilities to-date as the current business operations of our Group generates sufficient cash flow for such payments. To the best of our Directors’ knowledge, our Group is not currently in breach of any of the terms or conditions or covenants associated with any credit arrangement or bank loan which could materially affect our Group’s financial position or results of business operations, or investments by Shareholders in our Company.

Contingent Liabilities

As at the Latest Practicable Date, we do not have any contingent liabilities.

50

CAPITALISATION AND INDEBTEDNESS

Dilution is defined as the amount by which the Issue Price paid by the applicants for our Invitation Shares in this Invitation exceeds our unaudited proforma NAV per Share immediately after the Invitation. The unaudited pro forma NAV per Share as at 31 December 2010 before adjusting for the estimated net proceeds from the issue of the Invitation Shares and based on the pre-Invitation issued share capital of 1,140,000,000 Shares was 3.77 cents per Share.

Pursuant to the Invitation in respect of 351,500,000 Invitation Shares at the Issue Price, the unaudited pro forma NAV per Share after adjusting for the estimated net proceeds from the Invitation and based on the post-Invitation issued and paid up share capital of 1,341,500,000 Shares would have been 7.87 cents per Share. This represents an immediate increase in the unaudited pro forma NAV per Share of 4.10 cents per Share to our existing Shareholders and an immediate dilution in the unaudited pro forma NAV per Share of 25.13 cents per Share to new investors. The following table illustrates such dilution on a per Share basis:

Cents

Issue Price 33.00

Unaudited pro forma NAV per Share before Invitation based on the pre-Invitation Share capital of 1,140,000,000 Shares (as at 31 December 2010)

3.77

Increase in unaudited pro forma NAV per Share pursuant to the Invitation attributable to the existing Shareholders

4.10

Unaudited pro forma NAV per Share after the Invitation based on the post-Invitation Share capital of 1,341,500,000 Shares and as adjusted for the estimated net proceeds of the Invitation Shares

7.87

Dilution in unaudited pro forma NAV per Share to new investors 25.13

The following table summarises the total number of Shares issued by us, the total consideration and the average price per Share held by our Controlling Shareholders, (after adjusting for the Restructuring Exercise) and our new investors pursuant to the Invitation:-

Number ofShares

Total consideration

(S$)

Average price per Share

(S$)

SS Holdings(1) 478,800,000 32,858,079 0.07

Our Founders(1) 661,200,000 45,375,443 0.07

New investors 201,500,000 66,495,000 0.33

Note:

(1) The consideration is based on the total net tangible assets of SS Supermarket and CMM Marketing and the share capital of SS Malaysia as at 30 September 2010, as agreed upon a willing-buyer willing-seller basis. Please refer to the section entitled “General Information of Our Group – Restructuring Exercise” of this Prospectus for further details.

51

DILUTION

Unless expressly stated below, the information and analyses given in this section are extracted from the industry report, the “Independent Market Research Report on the Chain Supermarket Industry in Singapore” (the “CSI Report”) by Frost & Sullivan (S) Pte Ltd (“Frost & Sullivan”) in March 2011. The CSI Report was prepared by Frost & Sullivan for the purpose of incorporation in this Prospectus.

While our Directors have taken reasonable action to ensure that statements from the CSI Report have been reproduced in their proper form and context, and that such statements have been extracted accurately and fairly from the CSI Report, none of the Issue Manager, Underwriter and Placement Agent, or our Company or Vendors or their respective officers, agents, employees and advisers have conducted an independent review of the content or independently verified the accuracy thereof.

Growth in Singapore’s consumer sector

Growth in Singapore’s consumer sector is generally represented by the growth trend of Singapore’s economy and the size and purchasing power of its population.

Singapore’s gross domestic product (“GDP”) has been growing at a compound annual growth rate (“CAGR”) of approximately 8.9%, from approximately S$208.8 billion in 2005, to approximately S$319.5 billion in 2010. The chart below illustrates Singapore’s GDP for the period between 2005 and 2010.

Singapore's GDP, 2005-2010

0.050.0

100.0150.0200.0250.0300.0350.0

2005 2006 2007 2008 2009 2010

(In

S$

bill

ion

)

Source: Frost & Sullivan based on desk research and primary interviews

Singapore’s population has grown at a rate of approximately 3.5% between 2005 and 2010. In 2010, Singapore’s population reached 5.1 million. The chart below illustrates Singapore’s population between 2005 and 2010.

Singapore's Population

2,800

3,300

3,800

4,300

4,800

5,300

2005 2006 2007 2008 2009 2010

(In

’000

)

Source: Data from Department of Statistics Singapore. Analysis by Frost & Sullivan

The correlation between Singapore’s population and the revenues earned by its store-based grocery retail industry is relatively high. The chart below illustrates the relationship between Singapore’s population and the revenues earned by its store-based grocery retail industry.

52

INDUSTRY OVERVIEW

Singapore, Relationship between Population and Grocery Retailer Revenues, 2005-2010

2,000

3,000

4,000

5,000

6,000

7,000

8,000

2005 2006 2007 2008 2009 2010

Gro

cery

Ret

aile

r R

even

ues

(In

S$

mill

ion

)

2,000

3,000

4,000

5,000

6,000

7,000

8,000

Po

pu

lati

on

(‘0

00)

Grocery Retailers Population


The growth of Singapore’s economy has resulted in an increase in (i) Singapore’s disposable income per capita, which increased from approximately S$28,180 per annum in 2005 to approximately S$32,240 per annum in 2010, recording a CAGR of approximately 2.7%; and (ii) Singapore’s disposable income per household, which increased from approximately S$101,440 per annum in 2005 to approximately S$112,820 per annum in 2010, recording a CAGR of approximately 2.2%. The chart below illustrates Singapore’s annual disposable income per capita between 2005 and 2010.

Singapore's Disposable Income per Capita

26.00

27.00

28.00

29.00

30.00

31.00

32.00

33.00

2005 2006 2007 2008 2009 2010

(In

S$

’000

)

Source: Frost & Sullivan, based on desk research and primary interviews

Singapore’s retail industry

Total store-based retailing revenues increased from S$20.5 billion in 2005 to S$24.5 billion in 2010, recording a CAGR of approximately 3.6%. The chart below illustrates the revenue of Singapore’s store-based retail industry between 2005 and 2010.

Store-based Retailing Revenue

18.0

19.0

20.0

21.0

22.0

23.0

24.0

25.0

2005 2006 2007 2008 2009 2010

(In

S$

bill

ion

)

Source: Frost and Sullivan, based on desk research and primary interviews

53

INDUSTRY OVERVIEW

Set out below are the market share of major participants in Singapore’s retail industry.

Singapore’s Retail Industry: Estimates of major participants and their respective market shares, 2006-2010

Company2006(%)

2007(%)

2008(%)

2009(%)

2010(%)

NTUC FairPrice Co-operative Pte Ltd 6.2 6.4 6.9 7.6 7.6

Dairy Farm International Holdings Ltd 6.9 6.8 6.9 7.4 7.4

Sheng Siong Group Ltd. 1.8 2.5 2.7 2.7 2.6

Takashimaya (Singapore) Pte Ltd 1.9 1.9 1.9 1.9 1.9

Robinson & Co (S) Pte Ltd 1.6 1.8 1.8 1.8 1.7

Mustafa Holdings Pte Ltd 1.7 1.7 1.7 1.7 1.6

Courts (Singapore) Pte Ltd 1.3 1.5 1.5 1.4 1.6

Pertama Holdings Ltd 1.4 1.6 1.6 1.6 1.5

Isetan (Singapore) Ltd 1.4 1.4 1.4 1.3 1.3

Best Denki (Singapore) Pte Ltd 1.4 1.4 1.4 1.4 1.3

Watson’s Personal Care Stores Pte. Ltd. 1.1 1.0 1.0 1.1 1.1

OG Pte Ltd 1.2 1.1 1.1 1.1 1.1

Carrefour Singapore Pte Ltd 0.9 0.7 0.7 0.7 0.6

Others 71.2 70.2 69.4 68.3 68.7

Total 100 100 100 100 100

Source: Frost & Sullivan, based on desk research and primary interviews

Based on revenue in 2010, Sheng Siong Group Ltd. has a market share of 2.6% in the Singapore retail industry and was ranked the 3rd largest retailer in Singapore.

Grocery retailing in Singapore

The different grocery retailing formats in Singapore include hypermarkets, supermarkets, convenience stores, wet markets and other specialty stores.

Hypermarkets

Hypermarkets are usually superstores that offer a broad range of food and non-food products. They are combinations of supermarkets and department stores.

Supermarkets

Supermarkets are self-service grocery stores that sell food, beverages and general household products. Singapore has chain supermarkets and independent supermarkets.

54

INDUSTRY OVERVIEW

Convenience stores

Convenience stores are small, easy-to-access grocery stores with a limited range of products. Typically convenience stores do not supply fresh produce such as meat, poultry, vegetables or fruit.

Wet markets

Wet markets are traditional markets comprising a collection of independent hawkers selling fresh “wet” produce such as meat, poultry and fish, as well as vegetables, fruit, dry goods and general household products.

Specialty stores

Specialty stores are niche retailers that focus on a particular category of products, such as pharmaceutical products or “do-it-yourself” hardware products.

Grocery retail chains

Grocery retail chains in Singapore have developed rapidly in recent years. In 2010, grocery retail chains operated over 800 stores in Singapore utilising varied combinations of different grocery retailing formats, from hypermarkets to convenience stores. Singapore’s largest grocery retail chains have enjoyed substantial growth in recent years, and have accounted for an increasing proportion of grocery retail revenue since 2005.

The table below illustrates the estimated revenue for Singapore’s three (3) largest grocery retail chains in Singapore between 2006 and 2010.

Estimated revenue of top three (3) grocery retail chains in Singapore, 2006-2010

2006(In S$

million)

2007(In S$

million)

2008(In S$

million)

2009(In S$

million)

2010(In S$

million)

CAGR (%)

NTUC Fairprice Co-operative Pte Ltd 1,323.7 1,430.0 1,576.3 1,748.1 1,859.1 8.86%

Dairy Farm International Holdings Ltd 1,473.1 1,519.4 1,576.3 1,702.1 1,810.2 5.29%

Sheng Siong Group Ltd. 384.3 549.3 610.2 625.3 628.4 13.08%


From 2006 to 2010, the CAGR registered by Sheng Siong Group Ltd. was the highest amongst the top three grocery retail chains.

Set out below are Singapore’s top four (4) grocery retail chains in terms of revenue in 2010.

Ranking Name Retail Format Type

1 NTUC FairPrice Co-operative Pte Ltd Hypermarkets, supermarkets and convenience stores

2 Dairy Farm International Holdings Limited Hypermarkets, supermarkets and convenience stores

3 Sheng Siong Group Ltd. Hypermarket, supermarkets, wet markets, groceries stores

4 Carrefour Singapore Pte Ltd Hypermarkets

55

INDUSTRY OVERVIEW

In 2010, Sheng Siong Group Ltd. operated the third largest grocery retail chain in Singapore in terms of revenue.

The table below illustrates the estimated market share of Singapore’s top grocery retail chains based on revenue generated from operations, excluding revenues generated by convenience stores and hypermarkets.

Estimated Market Share by Revenue

Brand Company2005(%)

2006 (%)

2007 (%)

2008 (%)

2009 (%)

2010 (%)

FairPrice NTUC FairPrice Co-operative Pte Ltd

46.8 46.3 43.1 45.1 45.7 46.0

Sheng Siong Sheng Siong Group Ltd. 12.2 13 17.5 18.7 17.9 17.5

Cold Storage Dairy Farm International Holdings Ltd

10.1 9.7 9.6 9.8 10.2 10.3

Shop N Save Dairy Farm International Holdings Ltd

10.6 10.4 10.3 10.1 9.8 9.6

Prime Prime Supermarket Pte Ltd 3.4 3.7 3.6 3.3 3.1 3.1

Others Others 16.9 16.9 15.9 13.0 13.3 13.5

Total Total 100 100 100 100 100 100


Based on revenue generated in 2010 (excluding revenue generated by convenience stores and hypermarkets), Sheng Siong Group Ltd. has a market share of 17.5% and operated as the second largest grocery retail chain in Singapore.

Set out below are the revenues generated by Singapore’s top three (3) grocery chains, their respective operating areas and their respective revenues per square metre, for FY2009.

Revenue per sq. m.

CompanyFY2009 Revenue

(In S$ million)Operation Area in FY2009 (sq. m.)

Revenue in FY2009 per sq. m. (S$/sq.

m.)

NTUC Fairprice Co-operative Pte Ltd 1,748.1 146,600 11,924

Dairy Farm International Holdings Ltd 1,702.1 201,300 8,456

Sheng Siong Group Ltd. 625.3 36,600 17,085


Based on revenue generated in FY2009, Sheng Siong Group Ltd generated the highest revenue per sq. m. of operation space.

Trends in Singapore’s Grocery Retail Industry

Supermarkets and hypermarkets dominate the grocery retail market in Singapore. In 2005, supermarkets had a market share of approximately 84.6% by revenue. In 2010, over 83.3% of the total grocery retail revenues were earned in supermarkets, as compared with approximately 16.7% in hypermarkets.

56

INDUSTRY OVERVIEW

Estimated Supermarket and Hypermarket Revenues in Singapore

2005(In S$ million)

2006(In S$ million)

2007(In S$ million)

2008(In S$ million)

2009(In S$ million)

2010(In S$ million)

Supermarkets 2,718.5 2,808.2 3,073.8 3,214.7 3,407.7 3,584.4

Hypermarkets 495.1 538.8 557.5 610.4 690.2 719.9


As grocery retailing revenues are highly driven by population growth, the forecast for Singapore’s grocery retailing revenues is primarily based on the forecast for Singapore’s population growth, whilst also considering other factors such as increased purchasing power, economic improvement, increasing popularity of supermarkets, and inflation.

Estimated Revenue Forecasts, 2011-2015

2011(In S$ million)

2012(In S$ million)

2013(In S$ million)

2014(In S$ million)

2015(In S$ million)

Supermarkets 3,758.7 3,909.3 4,006.2 4,071.8 4,134.5

Hypermarkets 777.3 819.0 855.0 870.3 882.5

Source: Frost & Sullivan

Singapore’s supermarkets and hypermarkets are expected to experience approximately 4-5% growth in revenues between 2011 and 2012, and between 1.5% and 2.5% growth during 2014 and 2015.

57

INDUSTRY OVERVIEW

Our History and Development

SS Supermarket was incorporated in Singapore (under its previous name “Cheng Siong Farm Company Pte. Ltd.”) on 14 October 1983 with the founding shareholders being our Executive Directors, Mr. Lim Hock Chee and Mr. Lim Hock Eng, and their late father, Mr. Lim Kim Siong.

CMM Marketing was incorporated in Singapore on 20 July 2000 with the founding shareholders being our Executive Directors, Mr. Lim Hock Chee, Mr. Lim Hock Eng, and Mr. Lim Hock Leng.

SS Malaysia was incorporated in Malaysia on 27 April 2007 with the founding shareholders being our Executive Directors, Mr. Lim Hock Chee and Mr. Lim Hock Leng, as well as Mr. Chan Teck Ping and Mr. Leong Weng Fong.

Our Company was incorporated in Singapore as Sheng Siong Group Pte. Ltd. as a private limited liability company on 10 November 2010 with the founding shareholders being our Executive Directors, Mr. Lim Hock Chee, Mr. Lim Hock Eng, and Mr. Lim Hock Leng.

We underwent a restructuring exercise through the Share Swap Agreement between our Company and Mr. Lim Hock Chee, Mr. Lim Hock Eng, and Mr. Lim Hock Leng in 2011. Pursuant to the Share Swap Agreement, our Company acquired the shares of Mr. Lim Hock Chee, Mr. Lim Hock Eng, and Mr. Lim Hock Leng in SS Supermarket, CMM Marketing and SS Malaysia in consideration of our Shares, in the same proportion as Mr. Lim Hock Chee, Mr. Lim Hock Eng, and Mr. Lim Hock Leng’s then existing shareholdings in SS Supermarket, CMM Marketing and SS Malaysia. Upon completion of the restructuring, our new group structure comprised our Company and the three (3) operating subsidiaries, SS Supermarket, CMM Marketing and SS Malaysia, as well as the five (5) sole-proprietorships held by SS Supermarket. On 4 July 2011, our Company converted to a public company limited by shares and changed its name to Sheng Siong Group Ltd.. Details of our restructuring are set out in the section entitled “Restructuring Exercise in this section” of this Prospectus.

Set out below are the major milestones in our corporate history:

1985

We commenced operations in 1985 with the acquisition of a supermarket in Ang Mo Kio, Singapore. The supermarket sold a range of groceries such as fresh vegetables and fish, and also included chilled pork from our Founders’ family farm, Cheng Siong Pig Farm, which was closed in 1985 due to the Singapore government’s move to, inter alia, reduce pollution and free up land for residential development. We believe this first Sheng Siong store was one of the first supermarkets in Singapore to offer chilled pork.

1988

We opened our second store in Bedok North, Singapore, which subsequently relocated in 1999 to a neighbouring building to occupy a significantly larger space of 19,106 sq. ft..

1995

We opened a third store in Woodlands, Singapore, which was larger than the initial two (2) stores, with floor space of 6,027 sq. ft.. This third store was the first Sheng Siong store (and we believe that it was one of the first supermarkets in Singapore) to provide consumers both “wet and dry” shopping options, offering a wide assortment of fresh chilled food, such as chilled seafood, meat and vegetables, in addition to processed, packaged and/or preserved food products and general merchandise such as toiletries and essential household products.

1999

We opened our fourth store in Loyang Point in Singapore, with floor space of 5,952 sq. ft..

2000

CMM Marketing was incorporated to manage, inter alia, our distribution and supply operations and perform finance, marketing and administrative functions, enabling SS Supermarket to concentrate on our retail operations.

58

GENERAL INFORMATION OF OUR GROUP

2005

By 2005, we had opened a total of 17 stores, with 13 additional stores in various parts of Singapore, such as Ang Mo Kio, Bedok, Chin Swee, Clementi, Jurong, Katong, McNair, Serangoon, and Woodlands, including the hypermart in The Verge (formerly known as Tekka Mall), which is the largest Sheng Siong store with floor space of approximately 45,036 sq. ft..

2006

Mr. Tan Ling San joined our Group as an executive director of SS Supermarket. Prior to joining us, Mr. Tan Ling San founded and served as the executive chairman of PSC Corporation Ltd. (formerly known as Provisions Suppliers Corporation Limited), a company currently listed on the SGX-ST and engaged in, inter alia, the supply of consumer essentials through its chain of Econ Minimart stores (as they were then known).

2007

We opened four (4) new stores in Singapore, culminating in our 21st store in Singapore, our Clementi 352 Supermarket, with a floor space of 5,834 sq. ft..

We launched a television game show, “The Sheng Siong Show”, hosted by Singapore celebrities, which became popular and attracted strong viewership. Season 9 of the “The Sheng Siong Show” aired on Mediacorp Channel 8, a Singapore TV channel, between April and July 2011.

SS Malaysia was incorporated in view of our plans for establishing grocery retailing operations in Malaysia.

2008

We opened our 22nd store in Yishun, Singapore with a floor area of 8,977 sq. ft..

We launched the first of our housebrands, Royal Golden Grain, for rice. As at the Latest Practicable Date, we offer our customers 10 housebrands with over 300 items ranging from food products to paper goods. Please see the section entitled “Product Offerings” in this section of the Prospectus for more details.

2009

We also began presenting the “Sheng Siong Live!” show during the Hari Raya Puasa festive period. The “Sheng Siong Live!” show was broadcast on Mediacorp Suria, a Singapore TV channel.

We launched two (2) Sheng Siong Diners Club credit cards, a regular card which required an annual income of S$30,000, and a card with a S$500 credit limit which required an annual income of only S$16,000. Both of these credit cards provided rebates on grocery bills at our stores, as well as rewards points which may be redeemed for merchandise, shopping and dining vouchers and air miles with certain airlines.

We opened our 23rd store in Punggol Central, with a floor area of 6,878 sq. ft..

We announced plans to build our new Mandai Link Distribution Centre which would be our new corporate headquarters and warehousing and distribution facility, with a floor area of approximately 543,090 sq. ft.

2011

We opened our three (3) Elias Mall Market Stalls , as well as our 24th store, our Teck Whye Supermarket, with a floor area of 3,071 sq. ft.. Our Singapore stores comprised a total floor area of approximately 340,000 sq. ft.

We completed construction of our new Mandai Link Distribution Centre.

Our Company converted to a public company limited by shares and changed its name to Sheng Siong Group Ltd..

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Awards and Accolades

We were ranked Singapore’s third-largest retailer by sales volume by Euromonitor International’s Retail Asia Top 500 Awards in 2008, 2009, 2010 and 2011.

We achieved Superbrand status and were awarded the Superbrand mark of distinction in four (4) consecutive years, 2008, 2009, 2010 and 2011.

Restructuring Exercise

Our Group was formed through the Restructuring Exercise which involved the acquisition of our subsidiaries, SS Supermarket, CMM Marketing and SS Malaysia, and the rationalisation of our corporate and shareholding structure for the purposes of the Invitation. Pursuant to the Restructuring Exercise, our Company became the holding company of our Group.

The following steps were undertaken in the Restructuring Exercise

1. Incorporation of our Company

Our Company was incorporated in Singapore on 10 November 2010 with an issued and paid up capital of S$3.00, comprising three (3) shares allotted and issued to our Executive Directors, Mr. Lim Hock Chee, Mr. Lim Hock Eng and Mr. Lim Hock Leng.

2. Acquisition of our subsidiary, SS Supermarket

On 17 March 2011, our Company completed the acquisition from Mr. Lim Hock Chee, Mr. Lim Hock Eng, and Mr. Lim Hock Leng of an aggregate of 100.0% of the issued share capital of SS Supermarket for an aggregate purchase consideration of approximately S$55,841,855, which was satisfied by the issuance and allotment of 20,107,752 new Shares in our Company (“Consideration Shares”). The purchase consideration was determined on a willing-buyer willing-seller basis, being the NTA of SS Supermarket as at 30 September 2010, based on its management accounts as at 30 September 2010, and taking into account the reduction of capital in SS Supermarket from S$15,000,000 to S$5,000,000 which was completed on 10 March 2011.

3. Acquisition of our subsidiary, CMM Marketing

On 17 March 2011, our Company completed the acquisition from Mr. Lim Hock Chee, Mr. Lim Hock Eng, and Mr. Lim Hock Leng of an aggregate of 100.0% of the issued share capital of CMM Marketing for an aggregate purchase consideration of approximately S$22,391,665, which was satisfied by the issuance and allotment of 9,892,242 Consideration Shares. The purchase consideration was determined on a willing-buyer willing-seller basis, being the NTA of CMM Marketing as at 30 September 2010, based on its management accounts as at 30 September 2010, and taking into account the reduction of capital in CMM Marketing from S$15,000,000 to S$5,000,000 which was completed on 10 March 2011.

4. Acquisition of our subsidiary, SS Malaysia

On 16 March 2011, our Company completed the acquisition of an aggregate of 100.0% of the issued share capital of SS Malaysia from Mr. Lim Hock Chee, Mr. Lim Hock Eng, and Mr. Lim Hock Leng for an aggregate purchase consideration of approximately S$1.67, which was satisfied by the issuance and allotment of three (3) Consideration Shares. The purchase consideration was determined on a willing-buyer willing-seller basis, being the share capital of SS Malaysia as at 30 September 2010, as SS Malaysia is dormant.

5. Issuance and allotment of Shares to SS Holdings

On 17 March 2011, Mr. Lim Hock Chee, Mr. Lim Hock Eng and Mr. Lim Hock Leng directed that an aggregate of 12,600,000 Consideration Shares be issued and allotted to SS Holdings instead of Mr. Lim Hock Chee, Mr. Lim Hock Eng and Mr. Lim Hock Leng.

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6. Sub-division of shares in our Company

On 18 March 2011, our Company sub-divided each share in our Company into 38 Shares. Following this sub-division, the issued and paid-up capital of our Company became S$78,233,525 comprising 1,140,000,000 Shares.

Our Corporate Structure

Our corporate structure immediately after the Restructuring Exercise as of the Latest Practicable Date is as follows:-

100%

Our Company

SS Supermarket

100%

CMM Marketing

100%

SS Groceries SS 1 SS Hypermart

Shng Siong Shing Song

SS Malaysia

Our Company has three (3) subsidiaries, SS Supermarket, CMM Marketing and SS Malaysia. SS Supermarket has five (5) sole-proprietorships, SS Groceries, SS 1, SS Hypermart, Shng Siong and Shing Song. The details of each of these entities as at the date of this Prospectus are as follows:-

Names of subsidiaries and subsidiary entities

Date of registration, Place of registration

Principal business activities

Principal place of business

Details of ownership

SS Supermarket 14 October 1983, Singapore

Grocery retailing operations

Singapore Subsidiary 100.0% owned by our Company

CMM Marketing 20 July 2000, Singapore

Activities related to the trade of general and wholesale importers and exporters

Singapore Subsidiary 100.0% owned by our Company

SS Groceries 23 April 2007, Singapore


Singapore Sole-proprietorship owned by SS Supermarket

SS 1 22 October 1999, Singapore



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Names of subsidiaries and subsidiary entities

Date of registration, Place of registration

Principal business activities

Principal place of business

Details of ownership

SS Hypermart 3 March 2003, Singapore



Shng Siong 19 December 1994, Singapore



Shing Song 6 August 1988, Singapore



SS Malaysia 27 April 2007, Malaysia

Dormant Malaysia

Subsidiary 100.0% owned by our Company

SS Supermarket and the five (5) sole-proprietorships it owns, operate our grocery retailing business and each of our stores in Singapore. Each of the five (5) sole-proprietorships operates one of our Group’s outlets:

a. SS Groceries operates the Jurong West 7 Grocery Store;

b. SS 1 operates the Bedok Reservoir Market;

c. SS Hypermart operates The Verge Hypermart;

d. Shng Siong operates the Woodlands 301 Supermarket; and

e. Shing Song operates the Bedok North Supermarket.

The other stores and stalls in the Sheng Siong Groceries Chain are operated by SS Supermarket. The operations of the outlets operated by the five (5) sole-proprietorships do not differ materially from the operations of the outlets operated by SS Supermarket.

CMM Marketing, our wholly-owned subsidiary, performs finance, marketing and administrative functions, and provides warehousing facilities as well as distribution and food-processing services.

SS Malaysia, our wholly-owned subsidiary, was established to operate our future grocery retailing operations in Malaysia, and is currently dormant. As at the Latest Practicable Date, our Company does not have any specific plans or timeline for our Group’s future operations in Malaysia, save that our Group is presently considering the expansion of our store network in the state of Johor.

Our three (3) subsidiaries, SS Supermarket, CMM Marketing and SS Malaysia, are not listed on any stock exchange.

Our Business

General

We are one of Singapore’s largest retailers with over S$628.4 million in revenue for FY2010. We are principally engaged in operating the Sheng Siong Groceries Chain, including 23 stores, as at the Latest Practicable Date. Our long history and reputation for quality products at competitive prices has led to our “Sheng Siong” brand becoming well-established in Singapore. Our operations are located all across Singapore. In support of our retail operations, we also have an extensive distribution network, food-processing facilities, and warehousing facilities.

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Stores and stalls

Our stores are operated under the trade names of “Sheng Siong”, “Shing Siong” and “Shng Siong”. Each store is designed in accordance with our corporate branding requirements, including prominent display of our trademarks in order to promote our image and enhance our brand recognition among consumers.

Our store sizes are between 3,071 sq. ft. to 45,036 sq. ft.. The Sheng Siong Groceries Chain comprises an aggregate floor space of approximately 340,000 sq. ft.. We determine the size of a new store based on a number of considerations, including the needs of the community being served, the location of the store, the store’s site plan, and the estimated return on capital. We select locations for our stores based on our management’s evaluation of various factors, including the human traffic flow levels, rental costs, and proximity to housing estates, as well as the demographic and economic indicators of the area, such as consumer preferences and consumption patterns.

Our stores and stalls are located primarily in retail locations in the heartlands of Singapore. An Assistant General Manager oversees the business and operations of our stores, together with a team of four (4) area managers and each of the store managers.

Details of our stores and stalls as at the Latest Practicable Date are set out as follows:

Stores and stalls Area (sq. ft.)Year operations

commencedNorthWoodlands 301 Supermarket 6,027 1995Woodlands 6A Supermarket 41,441 2001Yishun 845 Supermarket 8,977 2008Teck Whye Supermarket 3,071 2011

SouthChin Swee Supermarket 4,477 2002The Verge Hypermarket 45,036 2003McNair Supermarket 4,122 2004

EastBedok North Supermarket 19,106 1988Loyang Point Supermarket 5,952 1999Bedok Reservoir Market 12,529 2000Tanjong Katong Supermarket(1) 16,949 2003Serangoon North Supermarket 33,133 2004New Upper Changi Supermarket 30,613 2007Punggol Central Supermarket 6,878 2009Elias Mall Market Stalls 2,400 2011

WestJurong West 544 Supermarket 3,950 2003Superbowl Supermarket 16,447 2003Teban Gardens Supermarket 7,341 2004Clementi 720 Supermarket 27,921 2005Clementi 352 Supermarket 5,834 2007Jurong West 7 Grocery Store 14,174 2007Tanglin Halt Supermarket 13,433 2007

CentralAng Mo Kio 122 Supermarket 4,908 1985Ang Mo Kio 233 Supermarket 4,284 2004

Note:

(1) Our Tanjong Katong Supermarket will be closed in September 2011, as the premises were sold by the landlord to a third party and the lease will not be renewed.

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Store operations

As at the Latest Practicable Date, we operate all of our stores. We prefer operating our stores to franchising as it provides control and flexibility with respect to business and operations, enabling us to efficiently and effectively plan, co-ordinate and implement our business development plans and operations policies, as well as our marketing and advertising campaigns.

Our stores are designed to provide our customers with both “wet and dry” shopping options, providing a wide assortment of live, fresh and chilled produce, such as seafood, meat and vegetables, in addition to processed, packaged and/or preserved food products, as well as general merchandise such as toiletries and essential household products. In addition, we retail bread and pastry products under the brand name “Bake For You”, at our New Upper Changi Supermarket.

Product offerings

We provide value to our customers by maintaining our store standards in accordance with our internal policies and standard operation procedures and by offering a wide selection of quality products at competitive prices. To provide our customers “one-stop” shopping, we sell live, chilled, processed, packaged and/or preserved food products, as well as general merchandise, under our “wet and dry” supermarket model. Our food products include live seafood, fruits and vegetables, meat, beverages (alcoholic and non-alcoholic), dairy products, cereals, oils, condiments, snacks and tobacco. Our general merchandise includes toiletries and personal care products, housewares, hardwares and do-it-yourself supplies, linen and other household products and necessities. We believe that we have developed a reputation for retailing an extensive range of products at competitive prices, through constantly challenging ourselves to turn out higher revenues and profits per sq. ft. of retail space, such as by providing speedier checkout services, and going directly to product sources in order to eliminate middlemen expenses.

In addition, we have developed a selection of housebrands to offer our customers quality alternatives to national brands at substantial savings. As at the Latest Practicable Date, we offer 10 housebrands, details of which are set out in the following table:-

Housebrand Item(s) Year launched

Bake For You Bread and pastry and confectionery products 2008

Fruit King Canned fruit and fruit products 2009

Happy Family Dried and canned food, condiments and staples 2009

Jean Fresh Poultry, chilled beef, processed seafood, fresh fruits and vegetables 2008

Matahari Dried and canned food and staples 2009

Nang Rum Thai Rice 2009

Power Plus Laundry detergent 2008

Royal Golden Grain Rice 2008

Softess Tissue paper, kitchen towels and bathroom tissues 2008

Tasty Bites Processed food and frozen food products 2008

As at the Latest Practicable Date, we offer over 300 items under our housebrands, ranging from food products to paper goods. Our housebrand items are purchased from contract manufacturers in Australia, Indonesia, Malaysia, the PRC, Singapore, Thailand and Vietnam. All of our contract manufacturers are independent third parties.

Sourcing

We source our food products and general merchandise from a large number of suppliers and contract manufacturers. CMM Marketing makes the purchases and supplies to SS Supermarket. For instance, CMM Marketing purchases seafood at our market lots in Jurong Fishery Port and sells the same to SS Supermarket thereafter. As at the Latest Practicable Date, we had agreements with over 1,000 suppliers and contract manufacturers. In selecting a supplier or contract manufacturer, our management

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considers various factors, including the party’s possession of necessary expertise and valid requisite licences, permits or approvals, reputation for quality and integrity, manufacturing capacity, financial background, track record, ability to provide a stable and sustainable supply of quality products in line with our perception of current market demands, and the relevant product pricing and costs involved.

In making purchases, we capitalise on our Group’s economies of scale, as well as the strong and well-established relationships we have built over the years with our suppliers, distributors and contract manufacturers, to secure favourable terms and prices for our food products and general merchandise.

We review and update our product selection on an ongoing basis to ensure that our store offerings are aligned with our customers’ requirements. This process is facilitated by our Management Information System, which enables us to identify fast and slow-moving products, as well as analyse sales trends, consumer preferences and consumption patterns.

Pricing

Our pricing policy is guided by our goal to offer our customers an extensive selection of high-quality products at competitive prices, in line with our Group’s motto, “Sheng Siong… all for you”.

Our pricing strategies and the prices of our food products and general merchandise are determined centrally by our management, taking into consideration various factors, such as:

- relevant market research regarding our customers’ consumption patterns and preference;

- discussions with our suppliers and contract manufacturers regarding products and methods of promoting sales;

- our management’s review and evaluation of the prices of products provided by our competitors; and

- the retail prices of other similar products of similar quality.

We capitalise on our Group’s economies of scale, as well as the strong and well-established relationships we have built over the years with our suppliers and contract manufacturers to secure favourable terms and prices for our food products and general merchandise. Our Directors believe that it is important for our Group’s continued success to maintain our reputation and ability to provide our customers with high-quality products at competitive prices.

Corporate headquarters, warehousing and distribution

Our corporate headquarters is currently located at our Mandai Link Distribution Centre and it houses our central administrative, finance, human resource and marketing departments. Construction of our new corporate headquarters and distribution centre at Mandai Link was completed in May 2011, at an estimated cost of up to S$65 million. As at the Latest Practicable Date, approximately S$49.5 million had been spent on construction costs and approximately S$8.1 million had been spent on land costs. The Mandai Link Distribution Centre was partly financed by the Term Loan and by cash from our Group. Please see the section entitled “Capitalisation and Indebtedness” in this Prospectus for more details of the Term Loan. Our Mandai Link Distribution Centre will increase our operational efficiency and productive capacity by enabling us to warehouse, process and distribute proportionately larger quantities of goods and benefit from economies of scale in terms of manpower, transportation and fuel costs.

Approximately 50% of our goods are warehoused at our Mandai Link Distribution Centre. We also store and pack products, such as fish, at a storage lot in Jurong Fishery Port and other products, such as rice, at premises belonging to third party logistics providers. For our Jurong West 7 Grocery Store, we store and pack fruits and vegetables at a packing and storage area in Jurong West. Subsequently, the goods are delivered to our various stores by our fleet of trucks. The remainder of our goods are delivered directly to our stores by our suppliers.

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Management Information System

We have implemented a computer information system network, our Management Information System, for, inter alia, our product procurement, store delivery schedules, inventory management and merchandising. For example, our employees take delivery of goods and conduct stock-take exercises using personal digital assistants (“PDAs”) and barcode scanners, which enables them to provide real-time updates of inventory-related information, enhancing central data collection and approval processes. Our Management Information System also features an automated ordering system, logistics and warehouse management systems and an accounting and finance system. Each of our stores are equipped with computer systems which record data, process merchandise orders, and provide analyses and reports on each store’s sales, inventory levels, and other general information. Our Management Information System is also used to identify fast and slow-moving products, as well as analyse sales trends, consumer preferences and consumption patterns. Our Directors believe that the increased efficiencies afforded by the Management Information System minimises our costs in maintaining high inventory levels, enables us to better allocate space between products, and achieve greater sales performance.

Cash management controls

We have implemented cash management controls for our business and operations. At each of our stores, reconciliations of cash receipts and sales data are conducted by our cashiers on a daily basis, and cash balances are secured in a safe at intervals throughout each day. The store manager (or deputy store manager) and the cashier must both be present in order for a safe to be opened, as the store manager (or deputy store manager) and the cashier each hold one of the two keys required. In addition, the cash receipts from our stores are collected daily by Certis CISCO Services Pte Ltd (“CISCO”), an independent security services provider. CISCO also conducts daily cash counts on the cash collected from our stores at CISCO’s headquarters. In the event that there is an excess or shortfall in the cash collected vis-à-vis the documented amounts, CISCO will inform our Group, and checks will be conducted on the relevant store(s). Further, our Group conducts internal audit checks at least twice a year to review the efficacy of our cash management controls.

In May 2011, our Group engaged PricewaterhouseCoopers LLP (“PwC”) to conduct an internal controls review of our retail cash, inventory and procurement management processes, including our cash management controls. PwC’s report stated that while there were no major control lapses in the processes in the areas of cash and retail management, retail and centralised inventory management, procurement and centralised information technology, controls over system access rights, oversight of outlets’ custody of cash and inventory price change procedures could be enhanced to strengthen our Group’s overall control environment. Our Group’s management has committed to implementing all of PWC’s recommendations by the end of 2011.

Management structure

We currently operate our stores under a two-tier management structure. At our corporate headquarters, our management makes strategic decisions relating to, inter alia, our business development plans and resource allocation. Our stores are each headed by a store manager who oversees the various aspects of each store’s operations, including customer service, inventory control, quality control and security.

Marketing and advertising

We advertise our stores and the goods retailed in our stores, through various media, including via promotional advertisements and sales offers in newspapers (such as the Straits Times, Lianhe Zaobao, LianHe Wanbao, Shin Min Daily News, and Berita Harian), television, radio, the Internet, and banners and posters in our stores.

In particular, “The Sheng Siong Show” is an important platform for our marketing and advertising efforts. “The Sheng Siong Show”, which was launched in 2007, is a television game show hosted by Singapore celebrities. “The Sheng Siong Show” became popular and attracted strong viewership levels. Season 9 of the “The Sheng Siong Show” aired on Mediacorp Channel 8, a Singapore TV channel, between April and July 2011. Each season has 10 to 14 episodes. Certain segments of “The Sheng Siong Show” directly encourage customers to shop at our stores, such as the awarding of cash prizes to shoppers based on multiples of their purchase amounts from our stores.

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In 2009, we also began presenting a “Sheng Siong Live!” show during the Hari Raya Puasa festive period. The “Sheng Siong Live!” show featured various artistes and local celebrities, as well as games and lucky draws, and was broadcast live on Mediacorp Suria, a Singapore TV channel. Our Directors believe that “The Sheng Siong Show” and the “Sheng Siong Live!” show have boosted public awareness of our brand and our stores, as well as our sales.

In addition, we may hold promotional lucky draws for our shoppers in conjunction with festive seasons such as the Chinese New Year, Hari Raya Puasa or Deepavali, as well as ad hoc special promotions offering customers opportunities to purchase certain products at discounted prices for limited periods of time, such as the “Sheng Siong Year End Mega Promotion 2010”.

We also receive various types of support from our suppliers, including trading incentives such as distribution allowances, advertising and promotion funds, volume rebates, display charges and advertising assistance.

Quality assurance

We place great importance on the quality of the products sold in our stores. In sourcing for our food products and general merchandise, we apply strict criteria, including evaluating the supplier’s or contract manufacturer’s reputation for integrity, and the quality of the products supplied. In relation to the contract manufacturers for our housebrand products, we may send personnel to visit the farm or manufacturing facility to conduct quality inspections. In addition, when food products and general merchandise are delivered to our warehouse and stores, we conduct visual inspections in relation to, inter alia, the appearance, packaging, date of production, expiry date, net weight and brand logo. With respect to fresh produce, dairy products and meat, we may require verification of relevant approval documents and certificates before taking delivery. In the event that there is any abnormality in the appearance of a product, we arrange for the return of these products to the relevant supplier or contract manufacturer. We also conduct various investigation and follow-up procedures in the event that any quality-related complaints are received from our customers.

Staff training and development

We recruit our staff by, inter alia, placing newspaper advertisements as well as by posting job listings on certain recruitment websites. We conduct on-the-job training for our staff in accordance with their job requirements, including service skills and product knowledge training for our store operations staff, and financial know-how and management techniques training for our administrative and management staff.

Seasonality

Revenue during festive periods such as Chinese New Year, Hari Raya Puasa and Deepavali tends to be higher as compared to non-festive periods. We hold promotions for our customers in conjunctions with such festive seasons. In addition, as we are primarily engaged in the business of grocery retailing, our business, like most retail businesses, is linked to general economic conditions, changes in household disposable income and consumer spending levels.

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Intellectual Property

Trademarks

We have invested significantly in the development and protection of “Sheng Siong” as a trade name and trademark and consider it to be an important asset. We also own other trademarks registered and/or pending registration in Singapore, Malaysia, Cambodia, China, Indonesia, the Philippines, Thailand and Vietnam. Details of our trademarks as at the Latest Practicable Date are as follows:

Business and operations

TrademarkPlace of

applicationClass

Trademark or application number

Date of registration

Expiry date

Vietnam 354-2008-

22270/14191616 October

200816 October

2018

Cambodia 35KH/08/32273/KH/31576/09

15 October 2008

15 October 2018

China 35 705510614 October

201013 October

2020

Thailand 35 717666/Bor4702522 December

200822 December

2018

Malaysia 35 07009270 21 May 2007 21 May 2017

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TrademarkPlace of

applicationClass



Expiry date

Malaysia 35 07009269 21 May 2007 21 May 2017

Cambodia 35KH/08/32274/KH/31577/09

15 October 2008

15 October 2018

Philippines 35 4-2008-0124712 November

20102 November

2020(1)

Thailand 35 717667/Bor4702622 December

200821 December

2018

Indonesia 35J002008038001/ IDM000265402

18 August 2010

23 October 2018

Malaysia 35 07009271 21 May 2007 21 May 2017

Vietnam 354-2008-22269/

14628211 May 2010

16 October 2018

China 35 705510821 August

201020 August

2020

Singapore 35 T0217119B1 November

20021 November

2012

Singapore 35 T0508499A 26 May 2005 26 May 2015

Singapore 35 T0703045G13 February

200713 February

2017

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TrademarkPlace of

applicationClass



Expiry date

Singapore 35 T0703049Z13 February

200713 February

2017

Singapore 35 T0703050C13 February

200713 February

2017

Singapore 35 T0703051A13 February

200713 February

2017

Singapore 35 T0703053H13 February

200713 February

2017

Singapore 35 T0703055D13 February

200713 February

2017

Singapore 35 T0703056B13 February

200713 February

2017

Singapore 35 T0703057J13 February

200713 February

2017

Singapore 35 T0703059G13 February

200713 February

2017

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TrademarkPlace of

applicationClass



Expiry date

Indonesia 35 J002008038002 Pending Pending

Malaysia 35 08018631 Pending Pending


Housebrands

TrademarkPlace of

applicationClass



Expiry date

Singapore 30, 43 T0906864H 24 June 2009 24 June 2019

Singapore 29 T0019538H7 November

20007 November

2020

Singapore 32 T0019539F7 November

20007 November

2020

Singapore 29, 32 T0807901H 13 June 2008 13 June 2018

Singapore 29 T0117260H5 November

20015 November

2021

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TrademarkPlace of

applicationClass



Expiry date

Singapore 30 T0117261F5 November

20015 November

2021

Singapore 29, 30 T0802630E 3 March 2008 3 March 2018

Singapore 29, 30 T0911886F16 October

200916 October

2019

Singapore 29, 31 T0809030E 9 July 2008 9 July 2018

Singapore 29, 30 T0903557Z 1 April 2009 1 April 2019

Singapore 30 T0905515E 19 May 2009 19 May 2019

Malaysia 30 09008388 21 May 2009 21 May 2019

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TrademarkPlace of

applicationClass



Expiry date

Singapore 3 T0723132J6 December

20076 December

2017

Singapore 30 T0906328Z 9 June 2009 9 June 2019

Singapore 30 T0702460J31 January

200731 January

2017

Singapore 29, 30 T0903498J30 March

200930 March

2019

Singapore 5, 16 T0723135E6 December

20076 December

2017



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TrademarkPlace of

applicationClass



Expiry date









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TrademarkPlace of

applicationClass



Expiry date




Notes:

(1) This mark has been accepted for registration, and issued a certificate of registration. The mark may be cancelled, however, if we do not file a “Declaration of Use” with the Intellectual Property Office of the Philippines, on or prior to 13 October 2011.

(2) Class 3: Bleaching preparations and other substances for laundry use; cleaning, polishing, scouring and abrasive preparations; soaps; perfumery, essential oils, cosmetics, hair lotions; dentifrices.

(3) Class 5: Pharmaceutical and veterinary preparations; sanitary preparations for medical purposes; dietetic substances adapted for medical use, food for babies; plasters, materials for dressings; material for stopping teeth, dental wax; disinfectants; preparations for destroying vermin; fungicides, herbicides.

(4) Class 16: Paper, cardboard and goods made from these materials, not included in other classes; printed matter; bookbinding material; photographs; stationery; adhesives for stationery or household purposes; artists' materials; paint brushes; typewriters and office requisites (except furniture); instructional and teaching material (except apparatus); plastic materials for packaging (not included in other classes); printers' type; printing blocks.

(5) Class 29: Meat, fish, poultry and game; meat extracts; preserved, frozen, dried and cooked fruits and vegetables; jellies, jams; compotes; eggs, milk and milk products; edible oils and fats.

(6) Class 30: Coffee, tea, cocoa, sugar, rice, tapioca, sago, artificial coffee; flour and preparations made from cereals, bread, pastry and confectionery, ices; honey, treacle; yeast, baking-powder; salt, mustard; vinegar, sauces (condiments); spices; ice.

(7) Class 31: Agricultural, horticultural and forestry products and grains not included in other classes; live animals; fresh fruits and vegetables; seeds, natural plants and flowers; foodstuffs for animals; malt.

(8) Class 32: Beers; mineral and aerated waters and other non-alcoholic drinks; fruit drinks and fruit juices; syrups and other preparations for making beverages.

(9) Class 35: Advertising; business management; business administration; office functions.

(10) Class 43: Services for providing food and drink; temporary accommodation.

Our Directors are not aware of any reason which would cause or lead to non-registration of the foregoing trademarks. To the best of our Directors’ knowledge and belief, there is no third party that is currently using a trademark that is similar to the foregoing trademarks. Save as disclosed above, our business and profitability is not materially dependent on any registered trademark or trademark pending registration, patent, or other intellectual property right.

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Insurance

Our current insurance coverage is as follows:

Type of Insurance Amount insured

All risks – machinery and equipment S$80,000

Foreign workers’ medical insurance S$11.7 million

Industrial all risks – business interruption and property damage S$257.7 million

Money insurance S$0.9 million

Keyman insurance S$1.6 million

Directors’ and officers’ liability insurance S$5.0 million

Public liability insurance S$4.0 million

Work injury insurance S$39.5 million

Fire insurance S$43.7 million

Public offering of securities S$5.0 million

Our Directors are of the view that our existing insurance coverage is adequate having regard to, inter alia, the size of our operations.

Inventory Management

Our inventory comprises food products and general merchandise. In order to ensure that our inventory is managed efficiently and effectively, we monitor our inventory through monthly inventory counts on selected items at our stores and also perform full inventory counts at the end of each financial year. Inventory that we are unable to locate from our inventory counts is written-off. We may be unable to locate inventory due to pilferage or theft of such inventory. As at 31 December 2010, inventory write-offs amounted to S$1.5 million. Our inventory turnover days for FY2008, FY2009 and FY2010 were as follows:

FY2008 FY2009 FY2010

Inventory turnover (days)(1) 18 19 19

Note:

(1) Inventory turnover (days) = (Average inventory divided by total cost of sales) x 365 days

Our inventory turnover days remain relatively stable, between 18 and 19 days.

Credit Management

Credit policy to our customers

For sales of the products retailed in our stores, we require our customers to either pay cash or by debit or credit card at the point of sale. Due to the nature of our payment policy, we have not experienced any bad debts for our trade receivables.

Details of the average trade receivables turnover days for FY2008, FY2009 and FY2010 are set out as follows:

FY2008 FY2009 FY2010

Trade receivables turnover (days)(1) 1 1 1

Note:

(1) Trade receivables turnover (days) = (Average trade receivables divided by total revenue) x 365 days. Average trade receivables did not include trade amounts due from affiliated company(ies).

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Our trade receivables turnover days for FY2008, FY2009 and FY2010 averaged one (1) day due to the cash-on-delivery nature of our business.

Credit policy from our suppliers

The credit terms granted to us by our suppliers and contract manufacturers are typically between seven (7) days and 45 days from the delivery of the supplies. We pay our suppliers and contract manufacturers promptly and maintain a good credit track record with them.

Details of the average trade payables turnover days for FY2008, FY2009 and FY2010 are set out as follows:

FY2008 FY2009 FY2010

Trade payables turnover (days)(1) 30 34 37

Note:

(1) Trade payables turnover (days) = (Average trade payables divided by cost of sales) x 365 days. Average trade payables did not include trade amounts due to affiliated company(ies).

Our trade payable turnover days ranged between 30 to 37 days. The increase in the number of trade payables turnover days was due in part to our suppliers and contract manufacturers granting us more favourable credit terms as, inter alia, the volume of our purchases increased with the expansion of our business and operations.

Major Suppliers

No single supplier or contract manufacturer contributed more than 5.0% of our total purchases for the financial years ended FY2008, FY2009 and FY2010, as due to the nature of our grocery retailing business, we purchase goods from a large number of suppliers and contract manufacturers. As at the Latest Practicable Date, we sourced our products from over 1,000 suppliers and contract manufacturers.

Major Customers

No single customer contributed more than 5.0% of our total revenue for the financial years ended FY2008, FY2009 and FY2010. Our customers are almost exclusively individuals.

Properties

As at the Latest Practicable Date, we leased or licensed the following properties:

Location Lessor/ Licensor Tenure Area (sq. ft.)Primary use of

property

3000 Marsiling Road, CMM Building, Singapore 739108

HDB 1 September 1974 to 31 August 2034

120,329 Offices and warehouse facility

6 Mandai Link, Singapore 728652 JTC Corporation 10 January 2009 to 9 January 2039

543,090 Offices and warehouse facility

Block 301 Woodlands Street 31 #01-215/217 Singapore 730301

E Land Properties 1 February 2011 to 31 January 2014

6,027 Supermarket

Block 6A Woodlands Centre Road #01-280 Singapore 731006(1)

HDB 1 November 2009 to 31 October 2012

41,441 Supermarket

Block 845 Yishun Street 81 #01-184 and #02-186 Singapore 760845(1)

HDB 1 November 2009 to 31 October 2012

8,977 Supermarket and office

Block 52 Chin Swee Road #01-25 Singapore 160052(1)(6)

HDB 1 August 2008(6) to 31 July 2011

4,477 Supermarket

2 Serangoon Road #B1-01/33 and #B2-01/05 The Verge Singapore 218227

Corwin Holding Pte. Ltd.

1 April 2009 to 31 March 2012

45,036 Hypermarket

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property

Block 108 McNair Road #01-295 Singapore 321108(1)

HDB 1 August 2011 to 31 July 2012

4,122 Supermarket

Block 539A Bedok North Street 3 #01-477 Singapore 461539(1)

HDB 1 December 2010 to 30 November 2013

19,106 Supermarket

Block 739A Bedok Reservoir Road #01-01 Singapore 471739(1)

HDB 1 January 2010 to 31 December 2012

12,529 Market (4)

Block 258 Pasir Ris Street 21 #01-333 Loyang Point Complex Singapore 510258(1)

Guthrie FMC Pte. Ltd. as agent for

HDB

16 November 2009 to 15 November

2012

5,952 Supermarket

57 Tanjong Katong Road Singapore 436952

Lion City Hotel Properties Pte. Ltd.

1 June 2009 to 6 September 2011(2)

16,949 Supermarket

19 Serangoon North Avenue 5 Singapore 554913(3)

JTC Corporation 1 November 2010 to 31 October 2013

33,133 Supermarket

Block 209 New Upper Changi Road #01-631/#02-631 Singapore 460209(1)

Heartland Retail Holdings Pte. Ltd.

16 June 2010 to 15 June 2013

30,613 Supermarket

Block 301 Punggol Central #01-01 Singapore 820301(1)

HDB 1 October 2009 to 30 September 2012

6,878 Supermarket

Market stall nos. 14, 15 and 16 at Block 623 Elias Road #B1-01 Elias Mall Singapore 510623

E Land Properties 1 January 2011 to 31 December 2011

2,400 Wet market stalls

Block 544 Jurong West Street 42 #01-97/99 Singapore 640544

E Land Properties 1 August 2009 to 31 July 2013

3,950 Supermarket

3 Yuan Ching Road #01-01A/02 Singapore 618642

Superbowl Jurong Pte. Ltd.

1 December 2010 to 30 November 2013

16,447 Supermarket

Block 61 Teban Gardens Road #01-21 Singapore 600061(1)

HDB 1 May 2010to 30 April 2013

7,341 Supermarket

Block 720 Clementi West Street 2 #01-144 Singapore 120720(1)

HDB 1 April 2011 to 31 January 2012

27,921 Supermarket

Block 352 Clementi Avenue 2 #01-91/99 Singapore 120352

E Land Properties 1 August 2009 to 31 August 2013

5,834 Supermarket

7 Jurong West Avenue 5 #01-01 to 08 Singapore 649486

Jian Yu Construction Pte. Ltd.

21 March 2010 to 20 March 2013

14,174 Grocery store (5)

Block 88 Tanglin Halt Road #01-10 Singapore 141088(1)

HDB 1 August 2010 to 31 July 2013

13,433 Supermarket

Block 122 Ang Mo Kio Avenue 3 #01-1753/1755/1757 Singapore 560122(1)

HDB (#01-1753/1755) 1 December 2010 to 30 November 2011

(#01-1757) 1 April 2009 to 31 March 2012

4,908 Supermarket

Block 233 Ang Mo Kio Avenue 3 #01-1168 Singapore 560233

E Land Properties 1 August 2009 to 31 August 2013

4,284 Supermarket

No. 1 Jurong Fishery Port, 35 Fishery Port RoadSingapore 619742

AVA 1 August 2010 to 31 July 2013

505 Market lot

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property


AVA 1 August 2010 to 31 July 2013

505 Market lot


AVA 15 April 2011 to 14 April 2014

322 Storage lot


AVA 1 April 2011 to 30 April 2014

764 Market lot

9 Jurong West Avenue 5 #01-09 Singapore 649487

SS Canteen 1 January 2011 to 21 March 2013

2,059 Packing and storage area

18 Teck Whye Lane #01-95 Singapore 680018

Japo Enterprise 1 April 2011 to 31 March 2014

3,071 Supermarket

Notes:

(1) As at the Latest Practicable Date, for 12 of our leases, our Company had obtained in-principle approval to vary the lease terms to be consistent with our Group’s grocery retailing operations. Our Group’s grocery retailing operations were inconsistent with certain of the landlords’ standard lease terms, which included restrictions in relation to livestock, the storage of food, and the retail of alcohol and tobacco, which are necessary for our Group’s grocery retailing operations. We expect to obtain the variation agreements for these 12 leases in due course. Our Company is also in the process of obtaining consent for similar variations in respect of our premises situated at Block 209 New Upper Changi Road #01-631/#02-631 Singapore 460209, and expects to obtain such consent in due course. For our premises situated at Block 739A Bedok Reservoir Road #01-01 Singapore 471739, we have obtained a letter from the relevant landlord stipulating the floor use allocation, and we will comply with such requirement.

(2) Our Group received notice dated 2 March 2011 that this lease would be terminated on 6 September 2011, as the premises had been sold to a third party and the lease would not be renewed.

(3) Our Company is in the process of obtaining sub-letting approvals from the landlord of this premises. If our Company does not obtain the approval on terms acceptable to us, our Company intends to terminate the sub-leases at this premises.

(4) Due to certain lease restrictions, our Bedok Reservoir Market does not offer non-market produce such as garments and footwear.

(5) Due to certain lease restrictions, our Jurong West 7 Grocery Store does not offer general merchandise.

(6) As at the date of this Prospectus, this lease has expired. Our Company is in the process of renewing the lease and expects the renewed lease to be issued to our Company in due course.

Permits, Licences, Approvals, Certifications and Government Regulations

The following are the main licences, permits, approvals and certifications for our business operations in Singapore as at the Latest Practicable Date:

Licence, permit, approval or certification

Issuing entity / administrative body

Description of business operations

Location / entity concerned Validity period

Supermarket / Foodshop licence

National Environment Agency

For the operation of a supermarket / foodshop

All of our stores See Note 1

Tobacco Retail Licence Tobacco Regulation Unit, Health Sciences Authority

Sale of cigarettes, cigars or other tobacco products


Licence to import and carry on wholesale dealings in rice

International Enterprise Singapore, a statutory board under the Ministry of Trade and Industry

Import or wholesale dealings of approved types of rice

CMM Marketing From 1 October 2009 (in perpetuity)

Licence to store petroleum

Singapore Civil Defence Force (“SCDF”)

Licence to store petroleum

CMM Marketing 1 February 2010 to 31 January 2013

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Licence, permit, approval or certification

Issuing entity / administrative body

Description of business operations

Location / entity concerned Validity period

Fire Certificate SCDF To occupy or use the registered premises of CMM Marketing as industrial, warehouse and office

CMM Marketing 22 September 2010 to 21 September 2011

Licence for wholesale liquor shop

Liquors Licensing Board, the Singapore Police Force (“SPF”)

To conduct the storage and operation of a wholesale liquor shop at the registered premises of CMM Marketing

CMM Marketing Expires 21 December 2011

Retail Liquor Shop Licence

Liquors Licensing Unit, SPF

Retail of intoxicating liquor that is consumed off-premises


Signboard licence Building and Construction Authority

Exhibition of signboards CMM Marketing/19 of our stores(2)

See Note 1

Electrical installation licence

Energy Market Authority For the use or operation of electrical installations in the registered premises of CMM Marketing

CMM Marketing/ 22 of our stores in Singapore(3)

See Note 1

Licence to operate a meat or fish processing establishment or cold store

AVA To use the registered premises of CMM Marketing for pork deboning and cutting

CMM Marketing Expires 31 August 2011

Licence to operate a food establishment

AVA To use the registered premises of CMM Marketing for packing preserved fruits, pre-cut vegetables and dried food

CMM Marketing Expires 29 February 2012

Registration to import processed food and food appliances

Food Control Division, AVA

For the application for import permits for food and food appliances under the purview of the Food Control Division of AVA

CMM Marketing Expires 31 July 2012

Licence for import, export and transhipment of meat products and fish products

AVA Import, export or transhipment of meat products and fish products

CMM Marketing Expires 29 February 2012

Licence for import and transhipment of fresh fruits and vegetables

AVA Import or transhipment of fresh fruits and vegetables

CMM Marketing/ SS Supermarket

Expires 29 February 2012

Licence to operate a wholesale market for animals, meat products, fish or fish products

AVA Auctioning and wholesale of fish

CMM Marketing Address of licensed premises: Jurong Fishery Port Market Lots 1, and 33

Expires 31 July 2011(4)

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Notes:

(1) Due to the nature of our business, we have a host of licences for our day-to-day operations. These licences are typically granted for a period of one (1) to three (3) years and are renewable at the discretion of the relevant authorities, subject to compliance with the relevant terms and conditions. We have not experienced any difficulties in obtaining, maintaining or renewing such licences.

(2) Four (4) of our stores do not require signboard licences under the applicable laws and regulations.

(3) The electrical installation licence for one (1) of our stores was awarded directly to the landlord.

(4) As at the date of this Prospectus, this licence has expired. Our Company is in the process of renewing the licence and expects the renewed licence to be issued to our Company in due course.

Save as disclosed above, to the best of our Directors’ belief and knowledge, we have obtained all material licences, permits, approvals and certifications for our business operations in Singapore and believe we have complied with all relevant laws and regulations that would materially affect our business operations. We will renew our licences, permits, approvals and certifications as and when required. Our Directors are not aware of any reason which would cause or lead to non-renewal of any of the necessary licences, permits, approvals and certifications for our business and operations.

We have, from time to time, incurred fines imposed by regulatory authorities including the AVA, NEA, IRAS, ACRA and CPF. The fines generally related to our Group’s business operations, such as fines for passageway obstruction, selling expired products and improper labelling of goods. Our Group has also been fined for late filing of documents with ACRA and IRAS. These fines are typically between S$100 to S$1,000 and the aggregate of such fines imposed by regulatory authorities on our Group for FY2008, FY2009 and FY2010 were S$24,600, S$46,300 and S$9,200 respectively. We may make claims against our suppliers for certain fines that may be attributed to our suppliers, such as fines associated with the improper labelling of goods supplied by such suppliers.

To minimise fines imposed by regulatory authorities, we have instructed our store managers to conduct more frequent checks and put in place a higher level of supervision for our stores and the products displayed. For instance, we conduct at least two (2) checks to ensure that expired or expiring goods or improperly labelled goods are not accepted or displayed in our stores, when the goods are delivered and unloaded, and when we replenish the shelves in our stores. Our store managers have been directed to conduct periodic checks of our stores to ensure that there are no obstructions of common passageways and/or mosquito breeding. We have designated specific personnel to assist with our compliance obligations and, where appropriate, also engaged external consultants to advise us on the same.

Our Directors will periodically review the adequacy of our Group’s operational and compliance controls, including reviewing the list of the fines imposed by regulatory authorities on our Group for each financial year, and providing directions for the implementation of preventive measures as appropriate.

Supermarket or foodshop licences

The Environmental Public Health Act (Chapter 95) (“EPHA”) requires that a licence be obtained from the Director-General of Public Health for the operation of a food establishment where food is sold wholly by retail (including supermarkets). The administration and enforcement of the EPHA falls under the purview of the NEA, and the licence shall be valid for the period stated therein unless it is revoked before the expiry of that period. Upon expiry of such licence, it may be renewed.

Sale of food

The objectives of the Sale of Food Act (Chapter 283) (“Food Act”) include: (i) securing wholesomeness and purity of food and fixing standards for the same; (ii) preventing the sale or other disposition, or the use of articles dangerous or injurious to health; and (iii) regulation of food establishments. The administration and enforcement of the Food Act falls under the purview of the AVA. Under the Food Act, it is an offence to, inter alia, sell any food which is unsound or unfit for human consumption. Pursuant to the Act, a licence must be obtained from the Director-General, AVA, for any place or any premises or part thereof used for the sale, or for the preparation or manufacture for sale, or for the storage or packing for sale, of food, whether cooked or not, intended for human consumption for the purpose of (i) distribution to wholesalers and retailers; or (ii) a cold store.

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Under the Food Regulations, enacted pursuant to the Food Act, it is an offence to import, sell, consign or deliver any prepacked food with an expired date mark. Further, no person shall import, advertise, manufacture, sell, consign or deliver any prepacked food if the package of prepacked food does not bear a label containing all the particulars required by the Food Regulations. Under the Sale of Food (Food Establishments) Regulations (“SFFER”), enacted pursuant to the Food Act, the packing, storage and transportation of food (excluding fish and meat) must be conducted in such manner that it is protected from the likelihood of contamination, and the environmental conditions under which food is stored will not adversely affect the safety and suitability of the food. Any person who fails to comply with the Food Act, the Food Regulations and/or the SFFER may be guilty of an offence and may be liable on conviction to monetary fines and/or custodial sentences.

Licence to import and carry on wholesale dealings in rice

Rice (of all descriptions) is a controlled item under the Price Control Act (Chapter 244) and the Price Control (Rice) Order 1990 issued by the Minister for Trade and Industry. As such, no person shall import, carry out wholesale dealings or re-export rice unless he/she has a valid licence issued by International Enterprise Singapore, a statutory board under the Ministry of Trade and Industry. The licence to import and carry on wholesale dealings in rice is valid for the entire lifetime of the relevant business (unless revoked) and the licensee may import and carry on wholesale dealings for prescribed types of rice.

Licence to operate a meat or fish processing establishment or cold store

A person who uses any premises or permits any premises to be used as a processing establishment or a cold store for meat products or fish products is required under the Wholesome Meat and Fish Act (Chapter 349A) (“WMFA”) to apply for a licence from the Director-General, AVA. The administration and enforcement of the WMFA falls under the purview of the AVA. A licensee is required to comply with, inter alia, the Wholesome Meat and Fish (Processing Establishments and Cold Stores) Rules, any written directives issued pursuant to the aforesaid rules and the terms of the licence (collectively, the “WMFA Regulations”). The WMFA Regulations sets out restrictions pertaining to, inter alia, the hygiene and cleanliness requirements of a licensed meat or fish processing establishment or cold store, as well as the persons permitted to work in such premises. Any licensee who fails to comply with the WMFA Regulations may be guilty of an offence and may be liable on conviction to monetary fines. A licence granted by the Director-General, AVA, shall be valid for the period stated therein unless it is revoked before the expiry of that period. Upon expiry of the licence, it may be renewed.

Licence for import, export and/or transhipment of meat products and fish products

Pursuant to the WMFA, a person who imports any meat product or fish product is required to apply for a licence from the Director-General, AVA. Any person who has imported any meat product or fish product into Singapore has to arrange for the meat product or fish product to be inspected, examined and certified by an examiner, authorised by the Director-General, AVA, before it is sold. Where any meat product or fish product which has been inspected or examined by an authorised examiner is found by the authorised examiner to be diseased, adulterated, or otherwise unfit for human consumption, the authorised examiner shall issue to the person who imported the meat product or fish product a certificate stating his finding and the person who imported the meat product or fish product shall remove the meat product or fish product from Singapore or destroy or otherwise dispose of the meat product or fish product in the prescribed manner. A licence which is granted by the Director-General, AVA, shall be valid for the period stated therein unless it is revoked before the expiry of that period. Upon expiry of the licence, it may be renewed.

Licence for import and transhipment of fresh fruits and vegetables

The Control of Plants Act (Chapter 57A) (“COPA”) requires that a licence be obtained from the Director-General of the AVA for the import for sale, supply or distribution or transhipment of any fresh fruit or vegetables. The administration and enforcement of the COPA falls under the purview of the AVA. A licensee is required to, inter alia, ensure that fresh fruit and vegetables imported do not contain any prohibited pesticide, or levels of pesticide residue or toxic chemical residue exceeding the prescribed levels, and that the consignments of fresh fruit or vegetables comply with prescribed sanitary standards. A licence granted by the Director-General, AVA, shall be valid for the period stated therein unless it is revoked before the expiry of that period. Upon expiry of the licence, it may be renewed.

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Tobacco retail licence

The Smoking (Control of Advertisements and Sale of Tobacco) Act (Chapter 309) (“Smoking Act”) requires that a tobacco retail licence be obtained from the chief executive of the Health Sciences Authority (“HSA”) for the sale and supply of tobacco products. The administration and enforcement of the Smoking Act falls under the purview of the AVA. The licensee is responsible for supervising all transactions involving tobacco products carried out at the premises specified in the licence, and is also responsible for the actions and conduct of all employees at the premises with respect to transactions involving tobacco products. The tobacco retail licence is typically valid for a period of not more than one (1) year. The grant and renewal of the tobacco retail licence is at the discretion of the chief executive of the Health Sciences Authority, who also has the discretion to suspend or cancel the tobacco retail licence at any time.

Liquor licence

The Customs Act (Chapter 70) (“Customs Act”) requires that a liquor licence be obtained from the Liquors Licensing Board for the sale of intoxicating liquor, whether for retail or for wholesale operations. The administration and enforcement of the Customs Act falls under the purview of the Liquors Licensing Board of the Ministry of Home Affairs of Singapore. The liquor licence is valid for a period of not more than one (1) year. The grant and renewal of the liquor licence is at the discretion of the Liquors Licensing Board, which also has the discretion to suspend or cancel the liquor licence at any time.

Employment of foreign workers

The availability and the employment cost of skilled and unskilled foreign workers are affected by the Singapore government’s policies and regulations on the immigration and employment of foreign workers. The policies and regulations are set out in, inter alia, the Employment of Foreign Manpower Act (Chapter 91A) and the relevant Government Gazettes. The availability of foreign workers for grocery retailing operations is regulated by the Ministry of Manpower through the following:

(a) approved source countries;

(b) issuance of work permits;

(c) the imposition of security bonds and levies; and

(d) set ratios for local to foreign workers.

An employer of foreign workers is also subject to, inter alia, the provisions set out in the Employment Act (Chapter 91), the Employment of Foreign Manpower Act (Chapter 91A), the Immigration Act (Chapter 133) and the Immigration Regulations.

Electrical installation licence

Under the Electricity Act (Chapter 89A), no person shall use, work or operate or permit to be used, worked or operated any electrical installation without an electrical installation licence granted by the Energy Market Authority. The licensee is required to ensure that the electrical installation is properly maintained and inspected in accordance with the terms of the licence. Any licensee who fails to comply with the terms of such electrical installation licence may be guilty of an offence and may be liable on conviction to monetary fines and/or custodial sentences. An electrical installation licence shall be valid for the period stated therein unless it is revoked before the expiry of that period. Upon expiry of the licence, it may be renewed.

Signboard licence

Under the Building Control (Outdoor Advertising) Regulations, a licence is required to display or cause or permit to be displayed outdoors any single signboard that has an area exceeding 5 square metres or a series of related signboards that together have an aggregate area exceeding 5 square metres. Any person who fails to comply with this requirement shall be guilty of an offence and shall be liable on conviction to monetary fines. A signboard licence shall be valid for the period stated therein unless it is revoked before the expiry of that period. Upon expiry of the licence, it may be renewed.

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Competition

Grocery retailing is intensively competitive. The principal competitive factors that affect our business are location, quality, price, service, product range and condition of groceries and other retail products. We face intense competition from traditional grocery retailers such as wet markets, supermarkets and hypermarkets, and from non-traditional competitors such as convenience stores, petrol kiosk convenience stores and restaurants.

To the best of our knowledge, our key competitors in grocery retailing in Singapore are Dairy Farm International Holdings Limited (which operates, inter alia, the Cold Storage, Shop N Save, Giant, and 7-Eleven stores) and NTUC FairPrice Co-operative Limited.

None of our Directors or Controlling Shareholders or their respective Associates has any interest, direct or indirect, in any of the above-named competitors.

Competitive Strengths

Our Directors believe that our competitive strengths are as follows:

Established and distinctive household brand name in Singapore

We have been operating grocery retailing stores in Singapore since 1985 and as at the Latest Practicable Date, our Sheng Siong Groceries Chain includes 23 stores all across Singapore with approximately 340,000 sq. ft. of operating area. Our long history and reputation for quality products at competitive prices has led to our “Sheng Siong” brand name becoming an established brand name in Singapore widely recognised by consumers. We organise numerous marketing and promotional activities to promote sales and create mindshare for our brand name. We believe that the launch of “The Sheng Siong Show”, a television gameshow, has also raised our corporate profile amongst consumers. For four (4) consecutive years 2008, 2009, 2010 and 2011, we were awarded “Superbrand” status by Superbrands Singapore.

Dedicated key management personnel with extensive experience

We have an experienced key management team who are hands-on and have in-depth knowledge of the retail industry. Our success to date has been largely due to the contributions of our Executive Directors namely, Mr. Lim Hock Chee, Mr. Lim Hock Eng, Mr. Lim Hock Leng and Mr. Tan Ling San, who each have decades of experience in the grocery retailing industry and have been instrumental in developing the business of the Group.

We also have an experienced management team who each have decades of experience in their respective areas of expertise. Further details of our management team’s working experience are set out in the section entitled “Directors, Management and Staff” of this Prospectus.

Offering of quality products at competitive prices

We place great importance on the quality of the products sold in our stores. We have strict criteria for the selection of our suppliers which include evaluating the quality of the products supplied. Furthermore, we conduct checks on the quality of the food products upon the receipt of the products by visual inspection of the products.

We manage the purchasing of goods for our stores centrally and due to the scale of our operations, we enjoy greater bargaining power with respect to our suppliers, distributors and contract manufacturers. Over the years, we have increasingly procured goods directly from our suppliers and contract manufacturers, bypassing the intermediaries and associated costs. This has enabled us to price our products competitively and pass on the benefits to our consumers.

We have also launched 10 housebrands. Our housebrand products range from staples such as rice and sugar, to general merchandise such as laundry detergent and tissue paper. These housebrands are typically priced lower than comparable international or national brands.

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Established relationships with our suppliers and contract manufacturers

We have established a large network of suppliers and contract manufacturers for our business. As at the Latest Practicable Date, we have dealings with over 1,000 suppliers and contract manufacturers and a number of these suppliers and contract manufacturers have had business dealings with our Group since 1985. These relationships have enabled us to have a continuous supply of products without major disruptions and allow us to wield greater bargaining power in terms of the purchase prices of our products.

Catering to the needs of our customers with a wide product range and extended operating hours

We believe that we have extensive knowledge of Singapore’s consumer preferences and consumption patterns, and are hence able to cater to the daily needs of our customers by providing a wide selection of quality products, such as fresh produce and consumer essentials. Our stores feature a section retailing live seafood, where fish, shrimp, crabs and other types of seafood are kept in freshwater and seawater tanks. In addition, to cater to our customers’ differing tastes and to provide consumers with additional purchasing options, we sell certain food products, such as spices, sauces, noodles and canned foods which we believe are not commonly found in our competitors’ stores.

In consideration of many of our customers’ increasingly busy lifestyles, each of our stores is open between 15 to 16 hours a day, commencing business operations at 7 a.m. and closing between 10.00 pm and 11.00 p.m., thus enabling our customers to purchase groceries and other household necessities at their convenience.

Centralised logistics and distribution centre

We have a centralised warehouse cum distribution centre to cater to the demands of our stores. Our new corporate headquarters and warehousing and distribution facility, Mandai Link Distribution Centre, was completed in May 2011 with a floor area of approximately 543,090 sq. ft. We are able to warehouse, process and distribute proportionately larger quantities of goods, and thus benefit from economies of scale in terms of manpower, transportation and fuel costs.

As at the Latest Practicable Date, we also have a dedicated truck fleet of 34 trucks to deliver goods from the distribution centre to our stores and replenish the store shelves four (4) times a day. By centralising our inventory and distribution facility and having our own dedicated fleet of trucks, we are able to optimise our inventory holdings and lower our distribution costs, hence increasing our margins.

Computerised systems facilitate efficient operations

Our computerised systems (including our Management Information System) assist us in controlling and replenishing our inventory levels, as well as in analysing various aspects of our business and operations, such as sales levels, costs and human resource requirements.

We use bar code technology and PDAs to handle the receipt of inventories at our distribution centre and stores. The order management and store replenishment of goods are executed with the help of the point-of-sales systems (“POS”) at our stores. Our PDAs and POS are connected directly to our intranets and provide real-time updates to our central database, thus enabling our stores to reduce costs associated with carrying excess or unsold inventory by ordering “just in time” to meet merchandise requirements.

We believe our computerised systems have enabled us to maintain low and effective levels of inventory and to make timely decisions regarding purchasing and distribution matters in order that we may run our operations more efficiently as well as lower our operating costs.

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The following summary financial data should be read in conjunction with the full text of this Prospectus including Appendix A entitled “Independent Auditors’ Report and the Combined Financial Statements for the Financial Years ended 31 December 2008, 2009 and 2010” of this Prospectus. Our financial statements are prepared and presented in accordance with SFRS.

Selected Combined Results of Operations of our Group

Audited FY2008 FY2009 FY2010($’000) ($’000) ($’000)

Revenue 610,160 625,343 628,432Cost of sales (496,004) (496,982) (491,675)

Gross profit 114,156 128,361 136,757Other income 5,572 12,930 15,918Distribution expenses (4,534) (4,318) (4,372)Administrative expenses (88,383) (96,310) (98,314)Other expenses (953) (975) (1,284)

Results from operating activities 25,858 39,688 48,705

Finance income 731 184 25Finance expenses (14) (2) –

Net finance income 717 182 25

Profit before income tax 26,575 39,870 48,730Income tax expense (6,002) (6,290) (6,095)

Profit for the year 20,573 33,580 42,635

Other comprehensive incomeForeign currency translation differences for foreign operations 0.08 0.05 (0.04)Net change in fair value of other investment – 13,437 –Net change in fair value of other investment transferred to profit or loss – – (13,437)

Total comprehensive income 20,573 47,017 29,198

Unaudited

EPS (cents)(1) 1.80 2.95 3.74EPS as adjusted for the Invitation (cents)(2) 1.53 2.50 3.18

Notes:

(1) For comparative purposes, EPS is calculated based on profit for the year and the pre-Invitation Share capital of 1,140,000,000 Shares.

(2) For comparative purposes, EPS as adjusted for the Invitation is calculated based on profit for the year and the post-Invitation share capital of 1,341,500,000 Shares.

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SELECTED COMBINED FINANCIAL INFORMATION

Selected Combined Financial Position of our Group

Auditedas at

Auditedas at

31 December 2009

(S$’000)

31 December 2010

(S$’000)

Non-current assetsProperty, plant and equipment 24,360 58,328Investment properties –

24,360 58,328

Current assetsInventories 24,908 26,405Trade and other receivables 42,458 4,715Other investments 72,536 – Cash and cash equivalents 39,081 85,885

178,983 117,005

Total assets 203,343 175,333

Equity attributable to equity holders of the CompanyShare capital 16,000 30,000Fair value reserve 13,437 –Accumulated profits 84,432 33,881Foreign currency translation reserve 0.1(1) 0.1(1)

Total equity 113,869 63,881

Non-current liabilitiesFinancial liabilities – 19,091Deferred tax liabilities 729 608

729 19,699

Current liabilitiesTrade and other payables 80,545 81,462Financial liabilities – 3,201Current tax payable 8,200 7,090

88,745 91,753

Total liabilities 89,474 111,452

Total equity and liabilities 203,343 175,333

Note:

(1) Less than S$1,000.

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SELECTED COMBINED FINANCIAL INFORMATION

The following discussion and analysis of our results of operations and financial position should be read in conjunction with the selected financial and operating data and the financial statements and related notes of our Group for FY2008, FY2009 and FY2010 included elsewhere in this Prospectus. Our combined financial statements have been prepared in accordance with SFRS.

Introduction

Our Group is principally engaged in operating of the Sheng Siong Groceries Chain, including 23 grocery retail stores all across Singapore.

Significant Factors Affecting Our Results of Operations

Our results of operations are affected primarily by the following factors:

Number of stores

We generally enjoy higher revenue and operating profits when the number of stores under our Group’s management increases. Through the expansion of our store network, we are able to capture a bigger pool of customers, thereby increasing the revenue of our Group. Our Group’s grocery retailing operations also enjoy economies of scale through the efficient distribution of the fixed costs for the storing, distribution, and retailing of food products and general merchandise across a larger base of stores.

Number of housebrands

We generally enjoy better profit margin in selling our own housebrand products as they are sourced and produced exclusively for our Group from the product’s source. Hence, there is no middleman or wholesaler, which lowers the overall cost structure of our Group.

Shift from wholesaler to direct supplier

Our Group also procures more products from direct suppliers instead of wholesalers or other middleman suppliers. This lowers the overall cost structure of our Group.

Promotions during festive periods and in variety shows

We conduct promotions through newspaper advertisements and also television variety shows to enhance our “Sheng Siong” brand in Singapore. Such promotions during festive periods and at variety shows create brand awareness and our revenues generally increase during promotional periods.

Results of Operations

Revenue

We are one of Singapore’s largest retailers. We are principally engaged in operating the Sheng Siong Groceries Chain, which includes 23 grocery retail stores as at the Latest Practicable Date. Our operations are located all across Singapore. In support of our retail operations, we also have an extensive distribution network, food-processing facilities, and warehousing facilities.

Our revenue is generated from the retail sale and wholesale distribution of live, chilled, processed, packaged and/or preserved food products and general merchandise (includes toiletries and personal care products, hardware and do-it-yourself supplies, linen and other household products and necessities).

Cost of sales

Cost of sales comprises direct material cost, direct labour cost and overhead cost.

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL POSITION

The following table sets forth our cost of sales items in FY2008, FY2009 and FY2010 in absolute terms and expressed as a percentage of total cost of sales:

FY2008 FY2009 FY2010(S$ million) (%) (S$ million) (%) (S$ million) (%)

Direct material cost 490.6 98.9 490.6 98.7 483.2 98.3Direct labour cost 4.2 0.9 5.2 1.1 7.0 1.4Overhead cost 1.2 0.2 1.2 0.2 1.5 0.3Total 496.0 100.0 497.0 100.0 491.7 100.0

Direct material cost comprises mainly raw materials such as goods for resale, packing material, freight charges and other direct costs. Our direct material costs have been quite consistent at approximately 98% to 99% of the total cost of sales.

Direct labour cost included staff salaries, bonus and CPF payments. The fluctuations in direct labour costs as a percentage of total cost of sales from FY2008 to FY2010 were mainly attributable to higher bonus payout, increase in headcounts and salaries for promoted employees throughout the years under review.

Overhead costs comprise depreciation expense, repair and maintenance charges and utilities expenses. The change in overhead costs as a percentage of total cost of sales from FY2008 to FY2010 was mainly attributable to increase in depreciation expense from FY2008 to FY2010. The increase in depreciation expense from FY2008 to FY2010 was due to a 6-month and full-year depreciation charge on Mandai Link Distribution Centre in FY2009 and FY2010 respectively.

Factors that can affect our cost of sales include the following:-

Excess/shortage in supplies of direct materials

The supply of goods for resale can be adversely affected by weather conditions which in turn affects our direct material costs. Severe weather conditions or natural disasters such as floods, earthquakes or typhoons, may result in the disruption of our supply or distribution networks, delivery delays, decreases in the availability or selection of products in our stores, and costs increases. Severe weather conditions and natural disasters may also affect the growing conditions, quantity and quality of crops yielded by food producers and adversely affect the availability or cost of certain products.

Competition for labour supplies

Our industry is labour-intensive in that we require manual labour to transport the goods to our stores, workers to arrange the goods on the racks, cashiers to collect payment, and workers to clean and maintain our stores. As such, we need to compete for personnel with other labour-intensive industries and our own competitors.

Foreign exchange impact on direct materials

An appreciation of foreign exchange rates against the Singapore dollar will increase the price of our imported goods, which currently originate from a number of countries, including China, Taiwan, Vietnam, Thailand, Malaysia, Indonesia, and Europe.

Crude oil prices will increase our utility charges as well as transportation costs in all areas

We are affected by increases in crude oil prices as this affects our transportation costs. Higher crude oil prices would also lead to higher utility expenses for our Group.

Other income

Other income relates to rental received from properties owned or leased by our Group, sale of scrap material, incentives and rebates from suppliers, cash grants in relation to the Jobs Credit scheme, gains on disposal of other investments, and miscellaneous income.

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The following table sets forth our other income items in FY2008, FY2009 and FY2010 in absolute terms and expressed as a percentage of total other income:

FY2008 FY2009 FY2010(S$ million) (%) (S$ million) (%) (S$ million) (%)

Rental received 2.4 42.9 2.8 21.7 2.4 15.1Sale of scrap materials 1.1 19.6 0.7 5.4 1.0 6.3Incentives and rebates 0.1 1.8 – – – – Cash grants in relation to the Jobs Credit scheme – – 3.2 24.9 0.6 3.8Gains on disposal of other investments – – 3.1 24.0 9.6 60.3Miscellaneous income 2.0 35.7 3.1 24.0 2.3 14.5Total 5.6 100.0 12.9 100.0 15.9 100.0

Rental received related to rental and conservancy income derived from sub-leasing arrangements between SS Supermarket and its sub-tenants.

Sale of scrap materials related to the sale of packing materials such as paper carton boxes to third parties.

Incentives and rebates related to the rebates or discounts given by suppliers, for example, bulk purchase discounts, purchases exceeding certain quotas set by suppliers, special display-related rebates, promotional fund rebates and fees from suppliers for sale of new products at our retail store and rebates for warehousing goods at our warehouse at Mandai Link Distribution Centre.

The Jobs Credit scheme was introduced in the Singapore Budget 2009 to encourage businesses to preserve jobs during the economic downturn. Under the Jobs Credit scheme, an employer will receive a cash grant of 12% on the first S$2,500 of each month’s wages for each employee on the CPF payroll in 4 payments: March, June, September and December 2009. In October 2009, the Singapore government announced that the Jobs Credit scheme would be extended for half a year with another two (2) payments at stepped-down rates in March 2010 and June 2010 at 6% and 3% of wages, respectively.

In FY2008, our Group acquired other investments such as quoted preference shares and quoted debt securities, which were sold in FY2009. In FY2009, our Group further acquired equity securities and some of these securities were sold off in the course of FY2009 and FY2010. SS Supermarket distributed the remaining securities by way of an in specie dividend in the fourth quarter of FY2010.

Miscellaneous income related mainly to delivery charges received, dividends received, government grants, advertising and promotion income, general income, parking fees received, and income derived from sub-contract of labour.

Distribution expenses

Our distribution expenses comprise mainly staff costs, upkeep of motor vehicles expenses, depreciation expenses, advertising and promotion expenses and miscellaneous distribution expenses.

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The following table sets forth our distribution expense items in FY2008, FY2009 and FY2010 in absolute terms and expressed as a percentage of total distribution expenses:

FY2008 FY2009 FY2010(S$ million) % (S$ million) % (S$ million) %

Staff costs 1.9 42.2 2.3 53.5 2.4 54.6Upkeep of motor vehicles expenses 1.2 26.7 0.9 20.9 1.1 25.0Depreciation expenses 0.9 20.0 0.7 16.3 0.5 11.4Advertising and promotion expenses 0.2 4.4 0.3 7.0 0.2 4.5Miscellaneous distribution expenses 0.3 6.7 0.1 2.3 0.2 4.5Total 4.5 100.0 4.3 100.0 4.4 100.0

Administrative expenses

Our administrative expenses comprise mainly staff costs, rental and conservancy charges, utilities, and miscellaneous administrative expenses.

The following table sets forth our administrative expense items in FY2008, FY2009 and FY2010 in absolute terms and expressed as a percentage of total administrative expenses:

FY2008 FY2009 FY2010(S$ million) % (S$ million) % (S$ million) %

Staff costs 57.7 65.3 66.6 69.2 66.9 68.0Rental & conservancy charges 11.0 12.4 12.0 12.5 14.5 14.8Utilities 6.9 7.8 6.4 6.6 6.9 7.0Miscellaneous administrative expenses 12.8 14.5 11.3 11.7 10.0 10.2Total 88.4 100.0 96.3 100.0 98.3 100.0

Other expenses

Other expenses mainly comprise NETS and credit-card charges borne by merchants, bank-related charges and gain/loss on foreign exchange.

Net finance income

Finance income mainly comprises interest income from fixed deposits and finance expenses mainly comprise interest charges from the Term Loan, overdraft facilities and hire purchase facilities.

Income tax expense

Income tax expenses for FY2008, FY2009 and FY2010 comprise current and deferred taxes.

The statutory tax rates in Singapore was 18% for FY2008, and 17% for FY2009 and FY2010.

The effective tax rates in Singapore were 22.6%, 15.8% and 12.5% for FY2008, FY2009 and FY2010 respectively.

For FY2009, our Group received dividends from our equity investments of approximately S$0.9 million as well as gains on disposal of other investments of approximately S$3.1 million. The dividend income and capital gains derived (if confirmed to be capital gains by IRAS) were not taxable and hence effective tax rates were lower in FY2009 vis-à-vis FY2008. In addition, there was also a revision of the statutory tax rate from 18% to 17% for FY2009 and FY2010. In FY2010, our Group made a capital gain (subject to IRAS’ confirmation) of S$9.6 million from the disposal of other investments and received dividends from

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our equity investments of approximately S$0.3 million, which lowered the effective tax rate for FY2010 vis-à-vis FY2009. Please see the section entitled “Risk Factors – We may be subject to additional tax assessments” of this Prospectus for further details.

FY2010 compared to FY2009

Revenue

Our revenue increased by S$3.1 million or 0.5%, from S$625.3 million in FY2009 to S$628.4 million in FY2010, mainly due to the full-year operation of Punggol Central Supermarket which opened in December 2009.

Cost of sales and gross profit

Our cost of sales decreased by S$5.0 million or 1.1%, from S$497.0 million in FY2009 to S$491.7 million in FY2010, mainly due to the purchase of more and varied supplies from direct suppliers instead of wholesalers thereby reducing our direct material cost. For instance, since July 2010, our Group has been purchasing fruit and vegetables direct from farms in Indonesia, Malaysia, Thailand and Singapore.

As a result of the above factors, our gross profit increased by S$8.4 million or 6.5%, from S$128.4 million in FY2009 to S$136.8 million in FY2010. Our gross profit margin increased from 20.5% in FY2009 to 21.8% in FY2010. This was mainly due to lower cost of sales for the financial year.

Other income

Other income increased by S$3.0 million or 23.3%, from S$12.9 million in FY2009 to S$15.9 million in FY2010, mainly due to gains on disposal of available-for-sale equity securities of S$9.6 million and sale of scrap material. The increase was partially offset by a decrease in the cash grants we received under the Jobs Credit scheme as the scheme was terminated by the end of June 2010. The equity securities were sold on market at prevailing market prices to independent third parties.


Our distribution expenses increased by S$0.1 million or 2.3%, from S$4.3 million in FY2009 to S$4.4 million in FY2010, mainly due to increases in staff costs and expenses in relation to the upkeep of our motor vehicles. These increases were offset by a decrease in depreciation expenses and advertising and promotion expenses. The decrease in depreciation expenses from approximately S$687,000 in FY2009 to S$496,000 in FY2010 was due to the 10 vehicles which were acquired in 2005 being substantially depreciated or fully depreciated by 2010. Advertising and promotion expenses decreased by approximately S$52,000 (from S$287,000 in FY2009 to S$235,000 in FY2010) as our Group introduced fewer new housebrand products in 2010.


Our administrative expenses increased by S$2.0 million or 2.1%, from S$96.3 million in FY2009 to S$98.3 million in FY2010, mainly attributed to increases in rental and conservancy charges. The rental and conservancy charges increased as we leased an additional store for operations and four (4) of our stores experienced rental increases in FY2010.

Other expenses

Other expenses increased by S$0.3 million or 30.0%, from S$1.0 million in FY2009 to S$1.3 million in FY2010, mainly due to higher NETS and credit-card charges in connection with higher revenues in FY2010.

Net finance income

Net finance income decreased by S$0.15 million or 83.3%, from S$0.18 million in FY2009 to $0.03 million in FY2010, mainly due to decreased interest income from fixed deposits.

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Profit before income tax

As a result of the foregoing, our profit before income tax increased by S$8.8 million or 22.1%, from S$39.9 million in FY2009 to S$48.7 million in FY2010.

Income tax expense

Income tax expense decreased by approximately S$0.2 million or 3.2%, from S$6.3 million in FY2009 to S$6.1 million in FY2010. In FY2010, our Group made a capital gain (subject to IRAS’ confirmation) of S$9.6 million from the disposal of other investments (i.e. available-for-sale equity securities), vis-à-vis S$3.1 million in FY2009. The higher capital gain lowered taxable profits as the increased capital gain was not taxable.

Profit for the year

As a result of the foregoing, our profit for the year increased by S$9.0 million or 26.8%, from S$33.6 million in FY2009 to S$42.6 million in FY2010.

FY2009 compared to FY2008

Revenue

Our revenue increased by approximately S$15.1 million or 2.5%, from S$610.2 million in FY2008 to S$625.3 million in FY2009, mainly due to the full-year operation of our Yishun 845 Supermarket which opened in September 2008, and the opening of our Punggol Central Supermarket in December 2009. The revenue contribution from our Yishun 845 Supermarket was less than 5.0% of our Group’s revenue for FY2008. The aggregate revenue contribution from our Yishun 845 Supermarket and Punggol Central Supermarket was less than 5.0% of our Group’s revenue for FY2009.

Cost of sales and gross profit

Our cost of sales increased by S$1.0 million or 0.2%, from S$496.0 million in FY2008 to S$497.0 million in FY2009, mainly due to an increase in direct labour costs.

As a result of the above factors, our gross profit increased by S$14.2 million or 12.4%, from S$114.2 million in FY2008 to S$128.4 million in FY2009. Our gross profit margin increased from 18.7% in FY2008 to 20.5% in FY2009. This was mainly due to the purchase of more supplies from direct suppliers instead of wholesalers thereby reducing direct material costs.

Other income

Other income increased by S$7.3 million or 130.4%, from S$5.6 million in FY2008 to S$12.9 million in FY2009, mainly due to the introduction of the Jobs Credit scheme pursuant to which we received certain cash grants, gains on disposal of other investments (i.e. quoted preference shares and quoted debt securities) in FY2009 of S$3.1 million and dividends received. The other investments were sold on market at prevailing market prices to independent third parties.


Our distribution expenses decreased by S$0.2 million or 4.4%, from S$4.5 million in FY2008 to S$4.3 million in FY2009, mainly due to decreases in expenses relating to the upkeep of our motor vehicles, depreciation expenses and miscellaneous distribution expenses. The decrease in depreciation expense in FY2009 was due to the 10 vehicles which were acquired in 2004 being substantially depreciated or fully depreciated by 2009. The decrease in upkeep of motor vehicle expenses in FY2009 was due to prudent control over repair works performed on these vehicles. These decreases were offset by increases in staff costs and advertising and promotion expenses.


Our administrative expenses increased by S$7.9 million or 8.9%, from S$88.4 million in FY2008 to S$96.3 million in FY2009, mainly attributed to increases in staff costs, and rental and conservancy charges. These increases were offset by decreases in utilities and miscellaneous administrative expenses.

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The increase in rental and conservancy charges was due to more stores being leased for operations in 2009 and the increase in staff costs was mainly due to the performance bonus which was introduced in 2009, and the variable bonus which was introduced in 2008. The performance bonus is based on a certain percentage of the incremental profit at each of our Group’s profit centres (stores or CMM Marketing), year on year.

Other expenses

Other expenses remained stable for both FY2008 and FY2009 at S$1.0 million.

Net finance income

Net finance income decreased by S$0.5 million or 71.4%, from S$0.7 million in FY2008 to S$0.2 million in FY2009, mainly attributed to the decrease in interest income from fixed deposits and lower finance expenses arising from the repayment of bank overdrafts and finance lease liabilities in FY2008.

Profit before income tax

As a result of the foregoing, our profit before income tax increased by S$13.3 million or 50.0%, from S$26.6 million in FY2008 to S$39.9 million in FY2009.

Income tax expense

Income tax expense increased by S$0.3 million or 5.0%, from $6.0 million in FY2008 to S$6.3 million in FY2009, mainly due to increased profit before income tax.

Profit for the year

As a result of the foregoing, our profit for the year increased by S$13.0 million or 63.1%, from S$20.6 million in FY2008 to S$33.6 million in FY2009.

Review of Financial Position

Non-current assets

Our non-current assets comprise mainly property, plant and equipment. As at 31 December 2009, our non-current assets had an aggregate net book value of S$24.4 million and accounted for approximately 12.0% of our total assets. Our property, plant and equipment comprise leasehold properties, renovations, plant and machinery, office equipment, furniture and fittings, motor vehicles, computers, construction-in-progress and cold room. Leasehold properties accounted for S$12.0 million or approximately 49.2% of our non-current assets while plant and machinery accounted for S$4.9 million or approximately 20.1% of our non-current assets as at 31 December 2009.

As at 31 December 2010, our non-current assets had an aggregate net book value of S$58.3 million and accounted for approximately 33.3% of our total assets. Construction-in-progress accounted for S$39.4 million or approximately 67.6% of our non-current assets while leasehold properties accounted for S$11.6 million or approximately 19.9% of our non-current assets as at 31 December 2010.

Our non-current assets increased by 138.9% or S$33.9 million from S$24.4 million as at 31 December 2009 to S$58.3 million as at 31 December 2010. This was largely attributable to the increase in construction-in-progress.

Current assets

Our current assets comprise inventories, trade and other receivables, other investments and cash and cash equivalents. Trade and other receivables comprise trade receivables, amount due from affiliated companies for trade and non-trade purposes, amount due from Directors, other receivables, deposits, loans and receivables, and prepayments. Our current assets as at 31 December 2009 and 31 December 2010 amounted to S$179.0 million or 88.0% and S$117.0 million or 66.7% of our total assets respectively.

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As at 31 December 2009, trade and other receivables amounted to S$42.5 million or 23.7% of our current assets. Inventories, which comprised goods for resale, amounted to S$24.9 million or 13.9% of our current assets, while other investments, which comprised available-for-sale equity securities, amounted to S$72.5 million or 40.5% of our current assets as at 31 December 2009. Our cash and cash equivalents, which comprised cash-in-hand and at bank and fixed deposits, amounted to S$39.1 million or 21.8% of our current assets as at 31 December 2009.

As at 31 December 2010, trade and other receivables amounted to S$4.7 million or 4.0% of our current assets. Inventories amounted to S$26.4 million or 22.6% of our current assets. Our cash and cash equivalents amounted to S$85.9 million or 73.4% of our current assets as at 31 December 2010.

Our current assets decreased by 34.6% or S$62.0 million from S$179.0 million as at 31 December 2009 to S$117.0 million as at 31 December 2010. This was largely attributable to settlement of non-trade amounts due from affiliated companies of S$36.7 million and disposal of available-for-sale equity securities which led to a decline in other investments of S$72.5 million. The decrease was offset by the increase in cash and cash equivalents of S$46.8 million.

The non-trade amounts due from affiliated companies pertain to:

a. receivables due to the properties sold by our Group to E Land Properties of approximately S$36 million; and

b. advances due to our Group from ECL Money Changer which were non-trade related and for working capital purposes of approximately S$729,000.

Current liabilities

Current liabilities comprise trade and other payables, financial liabilities and current tax payable. Trade and other payables comprise trade payables, amounts due to affiliated companies for trade and non-trade purposes, amount due to directors, other payables, deposits, and accrued expenses. Our current liabilities as at 31 December 2009 and 31 December 2010 amounted to S$88.7 million and S$91.8 million respectively which are equivalent to 99.1% and 82.3% of our total liabilities respectively.

As at 31 December 2009, trade and other payables amounted to S$80.5 million or 90.8% of our current liabilities. Our current tax payable amounted to S$8.2 million or 9.2% of our current liabilities as at 31 December 2009.

As at 31 December 2010, trade and other payables amounted to S$81.5 million or 88.8% of our current liabilities, while financial liabilities amounted to S$3.2 million or 3.5% of our current liabilities as at 31 December 2010. Our current tax payable amounted to S$7.1 million or 7.7% of our current liabilities as at 31 December 2010.

Our current liabilities increased by 3.5% or S$3.1 million from S$88.7 million as at 31 December 2009 to S$91.8 million as at 31 December 2010. This was largely attributable to the draw-down of the Term Loan secured by our Group to part finance the construction of our Mandai Link Distribution Centre.

Non-current liabilities

Non-current liabilities comprise deferred tax liabilities and the Term Loan. Our non-current liabilities as at 31 December 2009 and 31 December 2010 amounted to S$0.7 million or 0.8% of our total liabilities, and S$19.7 million or 17.7% of our total liabilities respectively.

Our non-current liabilities increased by S$19.0 million from S$0.7 million as at 31 December 2009 to S$19.7 million as at 31 December 2010. This was largely attributable to the draw-down of the Term Loan secured by our Group to part finance the construction of our Mandai Link Distribution Centre.

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Liquidity and Capital Resources

In FY2008, FY2009 and FY2010 and up to the Latest Practicable Date, we have financed our capital requirements through cash flows from operating activities and debt financing from financial institutions (bank overdraft, finance lease and Term Loan).

Cash flow

As at 31 December 2010, our cash and cash equivalents amounted to approximately S$85.9 million. As at the Latest Practicable Date, our cash and cash equivalents were S$47.8 million. Our Directors are of the opinion that we have adequate working capital to meet our current requirements, taking into account cash generated from operating activities, debt financing from financial institutions and cash and cash equivalents as of the Latest Practicable Date.

The following table sets forth certain information about our cash flows in FY2008, FY2009 and FY2010:

Audited FY2008 FY2009 FY2010 (S$ million) (S$ million) (S$ million)

Cash flows from operating activities 23.0 53.6 34.0Cash flows used in investing activities (6.2) (54.8) (7.3)Cash flows (used in)/from financing activities 10.7 (45.8) 20.1Net increase / (decrease) in cash and cash equivalents 27.5 (47.0) 46.8Cash and cash equivalents at beginning of year 58.6 86.1 39.1Cash and cash equivalents at end of year 86.1 39.1 85.9

FY2010

In FY2010, we generated cash flow from operating activities before changes in working capital of S$43.2 million. Net cash outflow from working capital amounted to S$1.8 million, mainly due to a decrease in trade and other payables of S$1.4 million and increase in inventories of S$1.5 million and offset by decrease in trade and other receivables of S$1.0 million. We paid income tax of S$7.3 million in FY2010.

Cash flow used in investing activities amounted to S$7.3 million in FY2010. This was mainly attributed to purchase of property, plant and equipment of S$38.4 million, and purchase of available-for-sale equity securities of S$5.0 million which was partially offset by proceeds from the disposal of available-for-sale equity securities of S$35.7 million. The purchase of plant, property and equipment comprised mainly plant and machinery of S$2.1 million, and construction-in-progress of S$35.7 million. Plant and machinery comprised mainly the amount incurred for retro-fitting of some of our stores with furnishings and electronic equipment (such as electronic scales and PDAs) of S$1.2 million. Construction-in-progress related to construction costs of the Mandai Link Distribution Centre.

Cash flow from financing activities of S$20.1 million in FY2010 was mainly due to the proceeds from a bank loan of S$22.3 million (which was used to fund the construction of Mandai Link Distribution Centre) and decrease in non-trade amount due from E Land Properties and ECL Money Changer of S$36.7 million and increase in non-trade amount due to directors of S$2.5 million. This was partially offset by the payment of S$41.2 million in dividends.

FY2009

In FY2009, we generated cash flow from operating activities before changes in working capital of S$40.0 million. Net cash inflow from working capital amounted to S$21.4 million, mainly due to a decrease in trade and other receivables of S$3.7 million and inventories of S$0.9 million and increase in trade and other payables of S$16.8 million. The decrease in trade and other receivables was mainly in relation to a deposit paid by SS Supermarket to HDB in relation to the property located at Block 219, Bedok Central, #01-140, Singapore 460219. The deposit was refunded to SS Supermarket by E Land Properties in 2009, when the property was sold by SS Supermarket to E Land Properties, in 2008.

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The increase in trade and other payables was mainly due to the accrued expenses pertaining to performance and variable bonus payouts to staff, and an extension in the credit payment terms, from 30 to 45 days, granted to our Group by certain suppliers and contract manufacturers since early 2009. We paid income tax of S$7.8 million in FY2009.

Cash flow used in investing activities amounted to S$54.8 million in FY2009. This was mainly due to the purchase of property, plant and equipment of S$16.0 million and available-for-sale equity securities of S$64.4 million. This was partially offset by proceeds from the disposal of property, plant and equipment, investment properties and quoted preference shares and quoted debt securities of S$23.5 million and proceeds from early redemption of quoted debt securities of S$1.0 million. The purchase of plant, property and equipment comprised mainly leasehold properties of S$8.1 million, plant and machinery of S$2.6 million and construction in progress of S$3.7 million. Leasehold properties amounting to S$8.1 million related to the purchase of land from JTC Corporation for a period of 30 years for the construction of our Mandai Link Distribution Centre. Plant and machinery comprised mainly electronic equipment (including electronic scales and PDAs) of S$0.9 million and amount incurred for retro-fitting of certain stores with store furnishings of S$0.9 million. Construction-in-progress related to the piling and construction of our Mandai Link Distribution Centre. The disposal of plant, property and equipment related to leasehold properties, renovations, plant and machinery, office equipment, furniture and fittings, and computers. Leasehold properties related to properties at Tagore Industrial Avenue, Tampines Street 12, Bedok Reservoir Road and Clementi Avenue 5, further details of which are set out in Appendix A entitled “Independent Auditors’ Report and the Combined Financial Statements for the Financial Years ended 31 December 2008, 2009 and 2010” of this Prospectus.

Cash flow used in financing activities of S$45.8 million in FY2009 was mainly due to an increase in non-trade amount due from affiliated companies of S$33.5 million, repayment of non-trade amounts due to E Land Properties and SS Food Court and to our Directors of S$12.6 million.

FY2008

In FY2008, we generated cash flow from operating activities before changes in working capital of S$31.1 million. Net cash outflow from working capital amounted to S$4.7 million, mainly due to an increase in trade and other receivables of S$5.6 million and inventories of S$3.6 million, partially offset by increase in trade and other payables of S$4.6 million. The increase in trade and other receivables was mainly due to (a) a deposit paid by SS Supermarket to HDB in relation to the property located at Block 219, Bedok Central, #01-140, Singapore 460219; and (b) the amount due from SS Food Court to SS Supermarket pursuant to the sale of fixed assets by SS Supermarket to SS Food Court in 2008.

The increase in inventories was due to increased inventory supplies following the opening of four (4) new stores in 2007.

The increase in trade and other payables was mainly due to the increase in trade payables following the opening of four (4) new stores in 2007, and the accrued expenses pertaining to salaries for the additional stores. We paid income tax of S$3.4 million in FY2008.

Cash flow used in investing activities amounted to S$6.2 million in FY2008. This was mainly due to the purchase of property, plant and equipment and quoted debt securities and quoted preference shares of S$5.7 million and disposal of discontinued operations, net of cash disposed of S$1.3 million. This was partially offset by interest received of S$0.7 million. The purchase of plant, property and equipment comprised mainly renovations of S$0.5 million, plant and machinery of S$1.3 million and computers of S$0.5 million. Plant and machinery comprised mainly the amount incurred for the retro-fitting of Yishun 845 Supermarket of S$0.5 million and for renovation work performed at Woodlands 6A Supermarket of S$0.4 million.

Cash flow from financing activities of S$10.7 million in FY2008 was mainly due to the increase in non-trade amounts due to SS Food Court and to our Directors of S$9.0 million and the decrease in non-trade amount due from SS Food Court of S$1.8 million.

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Capital Expenditures and Divestments

The following table sets forth our capital expenditures and divestments for FY2008, FY2009, FY2010 and for the period from 1 January 2011 to the Latest Practicable Date:

FY2008 FY2009 FY2010

Period from 1 January

2011 to Latest Practicable Date

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

Capital expenditures – property, plant and equipment 2.7 16.0 38.4 11.8Divestments – property, plant and equipment and investment properties 2.1 18.4 2.9 0.5

FY2008

For FY2008, our Group incurred S$1.3 million on plant and machinery, out of which S$0.9 million was incurred for retro-fitting our Yishun 845 Supermarket and an existing store Woodlands 6A Supermarket, with store furnishings. S$0.5 million was incurred for renovations of which S$0.4 million related to our Yishun 845 Supermarket and Woodlands 6A Supermarket. Motor vehicles of approximately S$0.3 million were procured by our Group while expenditure on computers and office equipment, furniture and fittings amounted to S$0.6 million for FY2008.

FY2009

For FY2009, our Group incurred S$8.1 million on the purchase of land from JTC Corporation for a period of 30 years for the construction of our Mandai Link Distribution Centre. Construction-in-progress of S$3.7 million was also incurred as part of the piling and construction of our Mandai Link Distribution Centre. S$1.0 million was incurred for renovations of which S$0.9 million relates to our Punggol Central Supermarket, The Verge Hypermarket and a bakery section in New Upper Changi Supermarket. In FY2009, our Group also incurred S$2.6 million on plant and machinery, out of which S$0.9 million was incurred for retro-fitting the above-mentioned three (3) stores with store furnishings, while S$0.6 million was incurred on computers and office equipment, furniture and fittings.

FY2010

For FY2010, we have capitalized a sum of approximately S$35.7 million for our Mandai Link Distribution Centre under “construction-in-progress”. Renovation cost of S$0.4 million was incurred for our Bedok Reservoir Market and other renovations. S$2.1 million was incurred on plant & machinery, out of which S$1.2 million was incurred for retro-fitting some of the stores with furnishings and electronic equipment, while the remaining S$0.3 million was spent on motor vehicles, computers, office equipment, furniture and fittings.

Period from 1 January 2011 to the Latest Practicable Date

We have capitalized a sum of approximately S$10.1 million for our Mandai Link Distribution Centre under “construction-in-progress” from 1 January 2011 to the Latest Practicable Date.

Save for the sums utilised for our Mandai Link Distribution Centre, which was primarily funded by the Term Loan (the remaining was funded by internal sources), the aforesaid capital expenditures were funded by internal sources.

Capital commitments

Save as disclosed above, our Group does not have any other material commitments for capital expenditure in the last three (3) financial years ended 31 December 2010 and from 1 January 2011 up to the Latest Practicable Date.

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Operating Lease Commitments

As at 31 December 2010, we have operating lease commitments for the rental of grocery retailing space, amounting to S$23.9 million. As at the Latest Practicable Date, we have operating lease commitments of S$19.2 million.

The following table sets forth information regarding our operating lease commitments in FY2008, FY2009, FY2010 and as at the Latest Practicable Date:

As at 31 December

2008

As at 31 December

2009

As at 31 December

2010

As at Latest Practicable

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

Within 1 year 8.7 11.7 11.2 10.9After 1 year but within 5 years 4.8 10.3 12.7 8.3

Total 13.5 22.0 23.9 19.2

Operating lease commitments represent rental payable by our Group for leases of its 23 stores.

The change in operating lease commitments may be attributed to the time our lease agreements are renewed, the prevailing rental renewed at as well as the opening of our new store. The leases our Group has entered into are typically for two (2) to three (3) year periods and, when they are renewed, the lease commitments at the year of renewal tends to be higher as it would capture the full two (2) to three (3) years of rental commitments.

The increase in operating lease commitments for FY2009 vis-à-vis FY2008 was mainly due to (i) eight (8) renewals of lease agreements, out of which three (3) leases were renewed at higher rental rates; (ii) new lease agreements signed for three (3) stores, being Clementi 352 Supermarket, Jurong West 544 Supermarket and Ang Mo Kio 233 Supermarket in FY2009 (which were sold to and then leased from E Land Properties in 2009); and (iiii) the opening of Punggol Central Supermarket in December 2009. In FY2010, the renewals of six (6) lease agreements were at higher rental rates which led to higher operating lease commitments. The operating lease commitments as at Latest Practicable Date were lower than commitments as at 31 December 2010 due to premature termination of lease for premises occupied by Tanjong Katong Supermarket, which is offset by renewal of one (1) lease agreement at higher rental rates.

Save as disclosed above, our Group does not have any other material operating lease commitments in the last three (3) financial years ended 31 December 2010 and from 1 January 2011 up to the Latest Practicable Date.

Foreign Exchange Exposure

Our reporting currency is the Singapore dollar. Our Group incurs foreign currency exposure mainly in other investments and cash and cash equivalents held in US dollars, Euros and Australian dollars.

When the Singapore dollar strengthens against the US dollar, Euro and/or the Australian dollar, this would in turn affect financial results by decreasing profits before tax.

Currently, we do not have any hedging policy with respect to foreign currency exposure. Mr. Lim Hock Chee, our Group’s Executive Director, oversees the management of other investments and cash and cash equivalents held in foreign currencies. In future, our Group will closely monitor its foreign currency exposure and will consider hedging significant foreign currency exposure, for instance hedging by way of forward contracts, should the need arise.

Inflation

Our Group is not materially impacted by inflation.

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Our Prospects

Moving forward, our Directors believe that the outlook for our business is expected to remain positive, barring unforeseen circumstances, due to the following factors:

Strong Gross Domestic Product

Emerging from the global financial crisis, Singapore’s GDP has rebounded strongly, growing 14.7% in 2010 compared to a contraction of 1.3% in 2009. (1) At 14.7%, Singapore is the fastest growing Asian economy in 2010, second only to Qatar globally, with growth at 16% according to the IMF. (2)

For 2011, the Singapore economy is likely to continue its growth trajectory, on the back of MAS’s recent survey that projected 6.2% GDP growth in 2011.(3) IMF has also projected Singapore’s GDP per capita growth to be at least 2% for the next four (4) years.(4) Coupled with improving employment figures (where the seasonally adjusted overall unemployment rate fell to 2.2% in 2010, compared to a year ago, when unemployment was at 3.0% during the economic downturn), Singaporeans’ rising affluence and spending power, are likely to lead to a higher propensity to consume.(5)

Steady population growth

Underpinning Singapore’s robust GDP is a steady escalation in overall population figures, which surpassed 5 million in 2010, with a CAGR of 2.3% over the last 10 years. (6) The growth is driven mostly by non-residents, on the back of the Singapore government’s open-door policy to immigrants. (6) This, in turn, helps to grow the customer base for our Group.

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Singapore Citizens Singapore Permanent Residents (PRs) Population less Citizens & PRs

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Burgeoning retail sales

The May 2011 Retail Sales Index, excluding motor vehicles, registered an increase of 8.3% year-on-year.(7)

Hiring expectations in Singapore have risen rapidly in all sectors over the past two years and reached their highest level in the first quarter of 2011. This trend registers a fall in third quarter of 2011 but hiring expectations remain at a high level.(8) Retail sales for 2011 should be sustained, bolstered by the recovery cycle, wage-growth and job market improvements, which in turn should encourage increased spending by Singaporeans. With a low unemployment rate and rising disposable income, the increase in consumerism in Singapore looks set to favour our Group.

100

PROSPECTS, BUSINESS STRATEGIES AND FUTURE PLANS

Increasing preference for Grocery Retail Stores

The busy pace of modern urban living coupled with the proliferation of dual-income, nuclear families are among the factors which have led to the increase in demand for grocery retail stores as they offer a wide variety of products to their customers. Our Directors believe that the Sheng Siong Groceries Chain, which includes 23 stores island-wide offering a wide range of shopping necessities, well-positions our Group to capitalise on this trend to meet consumers’ requirements and demands.

Sources:

(1) Ministry of Trade and Industry press release entitled “Pace of Growth Improved in Fourth Quarter 2010”, 3 January 2011.

(2) Channel NewsAsia article entitled “Singapore is Asia’s fastest growing economy in 2010”, 3 January 2011.

(3) Monetary Authority of Singapore report entitled “MAS Survey of Professional Forecasters”, June 2011.

(4) EconStats, World Economic Outlook (WEO) data, International Monetary Fund, http://www.econstats.com/weo/CSGP.htm

(5) Ministry of Manpower report entitled “Labour Market 2010”, March 2011.

(6) Singapore Department of Statistics report entitled “Monthly Digest of Statistics Singapore”, December 2010.

(7) Singapore Department of Statistics, press release, 15 July 2011.

(8) The Hudson Report: Employment and HR Trends, January – March 2011 and July – September 2011.

The Ministry of Trade and Industry, Channel NewsAsia, Monetary Authority of Singapore, the International Monetary Fund, Ministry of Manpower, Singapore Department of Statistics, and Hudson Highland Group, Inc, have not consented to the inclusion of the relevant information for the purposes of section 249 of the SFA and are therefore not liable for the relevant statements(s) under sections 253 and 254 of the SFA. While we and the Vendors have taken reasonable action to ensure that the relevant statement(s) have been included in its proper context and form, we and the Vendors have not independently verified the accuracy of the relevant information.

Trend Information

For the current financial year and barring unforeseen circumstances, our Directors have observed the following trends:

(1) we expect demand for our products to increase with the improvement in the global economy. The grocery retailing industry is however, volatile and may be susceptible to fluctuations in outlook;

(2) we expect our inventories to increase in tandem with the expected demand for our products;

(3) we expect our operating expenses to increase in the current financial year due to, inter alia, the commissioning of our Mandai Link Distribution Centre. We also expect to incur higher expenses due to compliance costs as a listed company as well as the impact of the Service Agreements entered into with our Executive Directors. Further details are set out in the section entitled “Directors, Management and Staff – Service Agreements” of this Prospectus;

(4) some of our suppliers or contract manufacturers may increase their selling prices of the food products or general merchandise in response to unfavourable conditions such as economic or climate conditions. If we are unable to pass on the increase in costs to our customers, this may result in a decrease in our profit margins; and

(5) in FY2008 and FY2009, we acquired other investments, which were fully sold and/or distributed by way of an in specie dividend by the end of FY2010. As we do not intend to acquire any other investments in FY2011, we expect our Group’s other income to decrease in FY2011 vis-à-vis FY2010.

Barring any unforeseen circumstances, our Directors expect the above trend to continue for FY2011. There is however no assurance that the growth pattern as reflected in the past financial years will continue.

101


Save as disclosed above and under the sections entitled “Risk Factors”, “Management’s Discussion and Analysis of Results of Operations and Financial Position” and “Prospects, Business Strategies and Future Plans” of this Prospectus, and barring any unforeseen circumstances, our Directors are not aware of any other known recent trends in production, sales and inventory, the costs and selling prices of our products or other known trends, uncertainties, demands, commitments or events that are reasonably likely to have a material and adverse effect on our revenue, profitability, liquidity or capital resources, or that would cause financial information disclosed in this Prospectus to be not necessarily indicative of our future operating results or financial condition. Please also refer to the section entitled “Cautionary Note Regarding Forward-Looking Statements” of this Prospectus.

Our Business Strategies and Future Plans

We intend to implement the following business strategies and future plans:

Expand store network

We plan to continue increasing the number of our stores to enhance economies of scale and further capitalize on our Group’s existing infrastructure. We may open new stores either in Singapore or overseas and may also consider expanding through acquisitions. Our Group is currently in negotiations to lease two (2) premises in Singapore. We have not identified any specific geographical markets save for Johor, Malaysia, and do not have any specific plans or timeline for our Group’s future operations in Malaysia.

In deciding whether to make an acquisition, our management will consider various factors, including:

(1) whether we will be able to effectively and efficiently leverage our existing infrastructure, including our Management Information System and our distribution network;

(2) whether we will be able to maintain adequate liquidity for our operations;

(3) whether we will be able to avoid excessive debt;

(4) the competitive environment in which the target operates.

The estimated capital expenditure to pursue our expansion plans is approximately S$20.0 million. We intend to use S$20.0 million from the net proceeds of the Invitation to fund any such expansion.

New Mandai Link Distribution Centre

The construction of our new corporate headquarters and warehousing and distribution facility, Mandai Link Distribution Centre, was completed in May 2011, with a floor area of approximately 543,090 sq. ft.. This will enable us to increase our operational efficiency and decrease operating costs, as we are able to warehouse, process and distribute proportionately larger quantities of goods, and thus benefit from economies of scale in terms of manpower, transportation and fuel costs.

We intend to use S$30.0 million from the net proceeds of the Invitation to repay the S$30.0 million Term Loan granted by DBS Bank to CMM Marketing to part finance the construction of the Mandai Link Distribution Centre. As at the Latest Practicable Date, approximately S$24.6 million of the Term Loan had been utilised. We intend to fund the balance of the costs, estimated to be approximately S$35.0 million, for our Mandai Link Distribution Centre with internally generated funds.

Increase productivity, economies of scale, quality and profitability

We intend to continue to upgrade our computer network systems, including our Management Information System, to further enable us to better allocate resources, reduce costs associated with carrying excess or unsold inventory by ordering “just in time”, and more accurately identify and analyse sales trends, consumer preferences and consumption patterns, in order that we may align our product selection with our customers’ requirements. We also intend to continue to capitalise on our Group’s economies of scale, as well as the strong and well-established relationships we have built over the years with our suppliers and contract manufacturers, to secure favourable terms and prices for our food products and general

102


merchandise. Where possible, we also intend to increase purchases made directly from product sources, in order to eliminate middlemen expenses and reduce costs, as well as to increase our control over the quality and freshness of the products we retail.

We intend to finance the implementation of these plans with internally generated funds.

Expand selection of housebrands and housebrand products

As at the Latest Practicable Date, we offer over 300 products under our 10 housebrands, ranging from food products to paper goods. We intend to strengthen our relationships with our existing contract manufacturers to secure more favourable terms and prices for our housebrand products, as well as establish relationships with new contract manufacturers to increase the selection and types of housebrand products. We believe that improving the variety and quality and reducing the price of our housebrand products will further enhance our competitive edge in grocery retail.

We intend to finance implementation of these plans with internally generated funds.

103


We were incorporated in Singapore on 10 November 2010 under the Companies Act as a private limited company under the name of “Sheng Siong Group Pte. Ltd.”. As at the Latest Practicable Date, the issued and paid-up share capital of our Company was S$78,233,525 comprising 1,140,000,000 ordinary shares.

On 4 July 2011, our Company converted to a public company limited by shares and changed its name to Sheng Siong Group Ltd.. Details of our restructuring are set out in the section entitled “Restructuring Exercise” in the Prospectus.

By way of written resolutions passed on 1 July 2011 our shareholders, Mr. Lim Hock Chee, Mr. Lim Hock Eng and Mr. Lim Hock Leng and SS Holdings, approved, inter alia, the following:

(a) the conversion of our Company into a public limited company and the change of our name to “Sheng Siong Group Ltd.”;

(b) the adoption of a new set of Articles of Association;

(c) the allotment and issue of the New Shares pursuant to the Invitation. The New Shares, when allotted, issued and fully paid-up, will rank pari passu in all respects with our existing issued and fully paid-up Shares;

(d) the dealing and quotation of all our Invitation Shares (including the New Shares and the Vendor Shares) on the Official List of the SGX-ST; and

(e) the authorisation of our Directors, pursuant to Section 161 of the Companies Act, to:

(i) (aa) issue shares whether by way of rights (including renounceable and non-renounceable rights), bonus or otherwise; and/or

(bb) make or grant offers, agreements or options (collectively, “Instruments”) that might or would require Shares to be issued, including but not limited to the creation and issue of (as well as adjustments to) warrants, debentures or other instruments convertible into Shares, at any time and upon such terms and conditions and for such purposes and to such persons as our Directors may in their absolute discretion deem fit, and

(ii) (notwithstanding the authority conferred by this resolution may have ceased to be in force) issue Shares in pursuance of any Instrument made or granted by our Directors while this resolution was in force, provided that:

(aa) the aggregate number of Shares to be issued pursuant to this resolution (including Shares to be issued pursuant to Instruments made or granted pursuant to this resolution) does not exceed 50% of the total number of issued Shares (excluding treasury Shares) in the capital of our Company (as calculated in accordance with sub-paragraph (ii) below), of which the aggregate number of Shares to be issued other than on a pro rata basis to Shareholders of our Company (including Shares to be issued in pursuance of Instruments made or granted pursuant to this resolution) does not exceed 20% of the total number of issued Shares (excluding treasury Shares) in the capital of our Company (as calculated in accordance with sub-paragraph (ii) below);

(bb) (subject to such manner of calculation as may be prescribed by the SGX-ST) for the purpose of determining the aggregate number of Shares that may be issued under sub-paragraph (i) above, the percentage of issued share capital shall be based on the post-Invitation share capital of our Company immediately following the close of the Invitation, after adjusting for new Shares arising from the conversion or exercise of any convertible securities or share options or vesting of share awards which are outstanding or subsisting at the time this resolution is passed, and any subsequent bonus issue or consolidation or subdivision of Shares;

104

SHARE CAPITAL AND SHAREHOLDERS

(cc) in exercising the authority conferred by this resolution, our Company shall comply with the provisions of the Listing Manual of the SGX-ST (including supplemental measures thereto) for the time being in force (unless such compliance has been waived by the SGX-ST) and the Articles of Association for the time being of our Company; and

(dd) (unless revoked or varied by our Company in general meeting) the authority conferred by this resolution shall continue in force until the conclusion of the next annual general meeting of our Company or the date by which the next annual general meeting of our Company is required by law to be held, whichever is the earlier; and

(iii) the authorisation of our Directors to issue Shares other than on a pro rata basis at a discount of not more than 10%, which discount is calculated based on the weighted average price for trades done on the SGX-ST on the full market date on which the agreement relating to such issue of Shares is executed (or if trading is not available for a full market day, on the preceding market day up to the time such agreement is executed).

(iv) the adoption of the Sheng Siong ESOS, the rules of which are set out in Appendix H of this Prospectus, and that our Directors be authorised to allot and issue Option Shares upon the exercise of Options granted under the Sheng Siong ESOS.

As at the Latest Practicable Date, there is only one (1) class of shares in the capital of our Company, being ordinary shares. A summary of the Articles of Association of our Company relating to the voting rights of shareholders is set out in Appendix C of this Prospectus.

There is no founder, management, deferred or unissued Share reserved for issuance for any purpose.

A summary of the changes to our issued and paid-up share capital since our incorporation is set out as follows:

Number of Shares

Resultant issued and paid-up capital

(S$)

Issued and fully paid-up Shares as at incorporation of our Company 3 3.00

Issuance of new Shares pursuant to the Restructuring Exercise 29,999,997 78,233,522

30,000,000 78,233,525

Sub-division of Shares 1,140,000,000 78,233,525

Pre-invitation Share Capital 1,140,000,000 78,233,525New Shares to be issued pursuant to the Invitation 201,500,000 64,393,339 (1)

Post-Invitation share capital 1,341,500,000 142,626,864

Note:

(1) This amount assumes the setting-off of estimated expenses incurred in connection with the Invitation of approximately $2.1 million, and excludes estimated expenses incurred in connection with the Invitation of approximately $1.8 million to be charged directly to the income statement.

105


Shareholders

Our Directors and Shareholders and their respective equity interests in our Company as at the Latest Practicable Date and immediately after the Invitation are set out below:

As at the Latest Practicable Date

After the Invitation(assuming the Over-allotment Option is

not exercised)Direct interest Deemed interest(1) Direct interest Deemed interest(1)

No. of Shares % No. of Shares % No. of Shares % No. of Shares %DirectorsLim Hock Chee 220,400,000 19.3 919,600,000 80.7 170,400,000 12.7 819,600,000(1) 61.1Lim Hock Eng 220,400,000 19.3 919,600,000 80.7 170,400,000 12.7 819,600,000(1) 61.1Lim Hock Leng 220,400,000 19.3 919,600,000 80.7 170,400,000 12.7 819,600,000(1) 61.1Shareholders

Tan Ling San – – – – – – – –Goh Yeow Tin – – – – – – – –Jong Voon Hoo – – – – – – – –Francis Lee Fook Wah

– – – – – – – –

Lee Teck Leng, Robson(3)

– – – – – – – –

SS Holdings 478,800,000 42.0 661,200,000 58.0 478,800,000 35.7 511,200,000(1) 38.1Public – – – – 351,500,000(3) 26.2 – –Total 1,140,000,000 100.0(2) – – 1,341,500,000 100.0 – –

Notes:

(1) Deemed interested in all the Shares held by Mr. Lim Hock Chee, Mr. Lim Hock Eng, Mr. Lim Hock Leng and SS Holdings by virtue of section 4 of the Securities and Futures Act. Mr. Lim Hock Chee, Mr. Lim Hock Eng and Mr. Lim Hock Leng are siblings who each hold approximately 33.3% of the equity interests in SS Holdings and are directors of SS Holdings. Under the articles of association of SS Holdings (“SSH Articles”), membership of SS Holdings is restricted to (i) our Founders; (ii) a lawful descendant of our Founders bearing the surname “Lim” or “Lin” (“Lim Descendant”); or (iii) a spouse of either one of our Founders or a Lim Descendant, (each of (i) to (iii) above a “Qualifying Person”). Any shareholder of SS Holdings (“SSH Shareholders”) must first offer any shares in SS Holdings (“SSH Shares”) to the other SSH Shareholders. In addition, new SSH Shares may only be issued and allotted to a Qualifying Person. The SSH Articles may only be amended by a special resolution of the SSH Shareholders.

(2) This figure does not equate to 100.0% due to rounding.

(3) This figure is subject to the subscription and/or purchase of Invitation Shares by (i) Mr. Lee Teck Leng, Robson, our Non-Executive Director (up to 50,000 Invitation Shares); (ii) Mr. Florent Caillieu, a related party of our Executive Director, Mr. Lim Hock Eng (up to 1,650,000 Invitation Shares); (iii) Ms. Lin Ruiwen, an associate of our Executive Director, Mr. Lim Hock Eng (up to 1,000,000 Invitation Shares); (iv) Mr. Tan Ze Chong, an associate of our Executive Director, Mr. Tan Ling San (up to 5,000,000 Invitation Shares); and (v) Ms. Tan Ching Fern, a related party of our Executive Director, Mr. Tan Ling San (up to 1,500,000 Invitation Shares).

Save as disclosed in the section entitled “Restructuring Exercise” of this Prospectus, there has been no change in the percentage ownership of Shares by our Controlling Shareholders in the past three (3) years prior to the Latest Practicable Date.

The Shares held by our Directors and Controlling Shareholders do not carry different voting rights from the New Shares. Our Directors are not aware of any arrangement, the operation which may, at a subsequent date, result in a change in control of our Company.

Save as disclosed in this Prospectus, our Company is not directly or indirectly owned or controlled by another corporation, any government or other natural or legal person whether severally or jointly.

106


Vendors

Details of the following existing shareholders who will be selling their Shares in the Invitation are set out below:-

Name Shares held immediately

before the InvitationVendor Shares offered pursuant

to the Invitation

Shares held after the Invitation (assuming the Over-allotment Option is

not exercised)

Number of Shares

% of pre-Invitation

Share Capital

Number of Shares

% of pre-Invitation

Share Capital

% of post-Invitation

Share Capital

Number of Shares

% of post-Invitation

Share Capital

Lim Hock Chee 220,400,000 19.3 50,000,000 4.4 3.7 170,400,000 12.7Lim Hock Eng 220,400,000 19.3 50,000,000 4.4 3.7 170,400,000 12.7Lim Hock Leng 220,400,000 19.3 50,000,000 4.4 3.7 170,400,000 12.7

Save as disclosed in this Prospectus, none of our Directors or Controlling Shareholders is interested in the Vendor Shares.

Save as disclosed in this Prospectus, the Vendors do not have any position, office or other material relationship with our Group within the period of three (3) years before the date of lodgement of this Prospectus.

Moratorium

To demonstrate their commitment to our Company, our Executive Directors, Mr. Lim Hock Chee, Mr. Lim Hock Eng, and Mr. Lim Hock Leng:

(1) have undertaken to the Issue Manager and our Company not to offer, sell, contract to sell, grant any option or right to acquire, or otherwise transfer or dispose of any part of their respective shareholdings in our Company immediately after the Invitation for a period of six (6) months from our Company’s date of admission to the Official List of the SGX-ST;

(2) have procured that SS Holdings has undertaken to the Issue Manager and our Company not to offer, sell, contract to sell, grant any option or right to acquire, or otherwise transfer or dispose of any part of SS Holdings’ shareholdings in our Company immediately after the Invitation for a period of six (6) months from our Company’s date of admission to the Official List of the SGX-ST. The restrictions on SS Holdings shall not apply to the loan of Shares to the Stabilising Manager pursuant to the Share Lending Agreement (provided that the restrictions shall apply to any Shares returned to or issued to SS Holdings pursuant to the Share Lending Agreement); and

(3) have further undertaken to the Issue Manager and our Company not to offer, sell, contract to sell, grant any option or right to acquire, or otherwise transfer or dispose of any part of their respective shareholdings in SS Holdings immediately after the Invitation for a period of six (6) months from our Company’s date of admission to the Official List of the SGX-ST.

107


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108

Directors

Our board of Directors is entrusted with the responsibility for the overall management of our Company. The particulars of our Directors are as follows:

Name Age Address Principal occupation

Lim Hock Chee 49 Block 468 Hougang Avenue 8 #02-1502 Singapore 530468

Chief Executive Officer

Lim Hock Eng 51 Block 127 Ang Mo Kio Avenue 3 #06-1899 Singapore 560127

Executive Chairman

Lim Hock Leng 46 207 Ponggol Seventeenth Avenue Singapore 827945

Managing Director

Tan Ling San 72 Block 295 Bedok South Avenue 3 #01-09 Bedok Court Singapore 469296

Executive Director

Goh Yeow Tin 60 208A Rangoon Road Hong Building Singapore 218453

Chief Executive Officer of Sino-Sing Centre Pte. Ltd. and Seacare Education Pte. Ltd.

Jong Voon Hoo 38 Block 412 Sembawang Drive #09-738 Singapore 750412

Chief Financial Officer of Youcan Foods International Limited

Francis Lee Fook Wah 45 370D Alexandra Road, #07-02Singapore 159957

Director of Wise Alliance Investments Ltd

Lee Teck Leng, Robson 43 27 Eng Kong Garden Singapore 599243 Advocate & Solicitor, Partner of Shook Lin & Bok LLP

Information on the business and working experience, education and professional qualifications, if any, and areas of responsibilities of each of our Directors are set out below:

Mr. Lim Hock Chee, PBM is our Chief Executive Officer and is responsible for overseeing our operations, setting directions for new growth areas and developing business strategies. Mr. Lim was one of the founding shareholders of CMM Marketing and SS Supermarket, and has been a director of our Group since SS Supermarket was incorporated in 1983. He has been instrumental in our Group’s growth and has been leading the expansion of our business and operations since inception. Mr. Lim also manages our day-to-day operations, including overseeing aspects of the meat-related business of our grocery retailing operations, such as selection, supply, processing, storage and quality control. Mr. Lim has more than 28 years of experience in grocery retailing. Prior to founding our Group, Mr. Lim was employed in his family’s hog rearing business. Mr. Lim was awarded the Pingat Bakti Masyarakat, or the Public Service Medal, by the Singapore Prime Minister’s Office in 2006, and the Long Service Award by the Singapore Prime Minister’s Office in 2007. He was appointed to the council of the Singapore Chinese Chamber of Commerce and Industry (SCCCI) in 2010. Mr. Lim also serves on the Marsiling Community Club Management Committee as chairman, on the Marsiling Citizen’s Consultative Committee as vice-chairman, and on the advisory committee of Qihua Primary School in Woodlands, Singapore. Our Executive Directors, Mr. Lim Hock Chee, Mr. Lim Hock Eng, and Mr. Lim Hock Leng are brothers.

Mr. Lim Hock Eng is our Executive Chairman and his areas of responsibility include business strategy and planning and business administration. Mr. Lim also manages our day-to-day operations, including overseeing the setting-up process for our new stores, supervising the preparation and submission of our bids and tenders for new premises, as well as the renovation works and equipment purchases and installations required to outfit such premises. Mr. Lim was one of the founding shareholders of CMM Marketing and SS Supermarket. He has been a director since SS Supermarket was incorporated in 1983, and has been instrumental in our Group’s growth. Mr. Lim has more than

109

DIRECTORS, MANAGEMENT AND STAFF

28 years of experience in grocery retailing. Prior to founding our Group, Mr. Lim was employed in his family’s hog rearing business. Our Executive Directors, Mr. Lim Hock Chee, Mr. Lim Hock Eng, and Mr. Lim Hock Leng are brothers.

Mr. Lim Hock Leng is our Managing Director and is responsible for overseeing our operations and developing our business in alignment with consumer preferences and consumption patterns. Mr. Lim also manages our day-to-day operations, including overseeing various aspects of the seafood business of our grocery retailing business, such as selection, supply, storage and quality control. Mr. Lim was one of the founding shareholders of CMM Marketing. He has been a director since 1994, and has been instrumental in our Group’s growth. Mr. Lim has more than 17 years of experience in grocery retailing. Prior to founding our Group, Mr. Lim was employed in his family’s hog rearing business. Our Executive Directors, Mr. Lim Hock Chee, Mr. Lim Hock Eng, and Mr. Lim Hock Leng are brothers.

Mr. Tan Ling San is our Executive Director and is responsible for administration and implementation of our Group’s policies and strategies, and evaluating new growth areas for our business. Mr. Tan spearheaded the restructuring of our Group and oversaw the expansion of our store network. Prior to joining our Group in 2006, he founded and served as the executive chairman of PSC Corporation (formerly known as Provisions Suppliers Corporation Limited), a company currently listed on the SGX-ST and engaged in, inter alia, the supply of consumer essentials through its chain of Econ Minimart stores (as they were then known) (“PSC Corporation”). Mr. Tan has more than 41 years of experience in grocery retailing. Ms. Tan Ching Fern, our Board Secretary and Manager, Corporate Affairs, is Mr. Tan’s daughter-in-law.

Between 1984 and 1988, Mr. Tan was a director of Fu Ye Chemicals Pte. Ltd. (“Fu Ye”), and between 1982 and 1984, Mr. Tan was a director of Top Commerce (Asia) Trading Pte. Ltd (“Top Commerce”). Fu Ye was engaged in the manufacture of soap, detergents, washing and other cleaning preparations, and Top Commerce was engaged in general wholesale trade. Both of these companies were suppliers to PSC Corporation.

Mr. Goh Yeow Tin is our Lead Independent Director. Since 2001, Mr. Goh has served, and continues to serve, as chief executive officer of Sino-Sing Center Pte. Ltd., which is involved in the operation of pre-school and primary school educational and training programmes in China. He is also currently the chief executive officer of Seacare Education Pte. Ltd. which specialises in providing educational services and consultancy in Singapore, Malaysia and China.

Mr. Goh began his career with the Economic Development Board (“EDB”) where he headed the Local Industries Unit and was subsequently appointed a director of EDB’s Automation Applications Centre between 1984 and 1988. He served as deputy executive director of the Singapore Manufacturers’ Association (now known as the Singapore Manufacturers’ Federation) from 1983 to 1984. In 1988, Mr. Goh joined Tonhow Industries Ltd, the first plastic injection moulding company to be listed on SESDAQ (now known as Catalist), and served as the deputy managing director until 1990. Mr Goh was also a founding member of the Association of Small and Medium Enterprises (ASME) in 1986, and in 1989, Mr. Goh founded, and served as general manager of, International Franchise Pte. Ltd., a pioneer in the franchising business in Singapore, until 1991. Between 1990 and 2000, Mr. Goh served as the vice-president of Times Publishing Ltd., and was responsible for retail and distribution businesses in Singapore, Hong Kong and various parts of South-east Asia. He currently also serves as an independent director of Juken Technology Limited (appointed in 2005), a non-executive director of Oakwell Engineering Limited (appointed in 2006), and an independent director of Lereno Bio-Chem Ltd. (appointed in 2007), and an independent director of Vicom Ltd (appointed in 2010), all of which are companies listed on the SGX-ST.

Mr. Goh was awarded the Public Service Medal in 1998 and the Public Service Star in 2006 by the President of the Republic of Singapore. Mr. Goh is also a member of the Singapore Institute of Directors. He holds a Bachelor’s degree in Mechanical Engineering (Hons) from the University of Singapore (now known as the National University of Singapore) and a Masters’ degree in Industrial Engineering and Management from the Asian Institute of Technology.

Mr. Jong Voon Hoo is our Independent Director. Mr. Jong currently serves as chief financial officer of Youcan Foods International Limited, a company listed on the SGX-ST, where he is responsible for overseeing accounting and finance matters. Mr. Jong began his career in 1996 in Arthur Andersen where

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he was involved in assurance, business advisory, and transaction advisory services. During his tenure in Arthur Andersen, Mr. Jong was responsible for, inter alia, performing operational and financial audits of publicly listed companies and multinational corporations operating in different industries, and developing and implementing plans to enhance the efficiency and efficacy of business and financial processes. Mr. Jong joined Deloitte & Touche in 2002 as a manager and led audit engagements in various companies, assisting companies with, inter alia, initial public offerings and due diligence reviews in connection with proposed mergers and acquisitions. Mr. Jong graduated from Nanyang Technological University in 1996 with a Bachelor’s degree in Accountancy (Hons) and is a Certified Public Accountant and non-practising member of the Institute of Certified Public Accountants of Singapore, where he serves on the Chief Financial Officers’ Committee of the Institute of Certified Public Accountants of Singapore.

Mr. Francis Lee Fook Wah is our Independent Director. Mr. Lee is currently the director of Wise Alliance Investments Ltd, where he manages and oversees investment portfolios. Previously, between 2005 and 2011, Mr. Lee served as an executive director, finance director and chief financial officer of Man Wah Holdings Ltd, a company listed on the Hong Kong Stock Exchange, where he was responsible for the overall accounting functions of the company and matters relating to its corporate regulatory compliance and reporting. Mr. Lee began his career in 1990 in the Commercial Crime Division of the Criminal Investigation Department, where he served as a senior investigation officer. In 1993, he joined OCBC Bank as an assistant manager conducting credit analyses. Between 1994 and 2001, he worked at Deutsche Morgan Grenfell Securities as a dealer’s representative managing clients’ investment portfolios. Mr. Lee served at the Singapore branch of the Bank of China between 2001 and 2004 as an assistant manager overseeing a team of credit officers. Between 2004 and 2005, he worked at AP Oil International Ltd as an investment and project manager, where he was involved in mergers and acquisitions and was also tasked with overseeing its overall credit policy. He also currently serves as a non-independent, non-executive director of Man Wah Holdings Ltd. Mr. Lee graduated from The National University of Singapore with a Bachelor’s degree in Accountancy in 1990 and obtained a Master’s degree in Business Administration (Investment and Finance) from The University of Hull in 1993. Mr. Lee is a Certified Public Accountant and a non-practising member of the Institute of Certified Public Accountants of Singapore. Mr. Lee is also a member of the Singapore Institute of Directors.

Mr. Lee Teck Leng, Robson is our Non-Executive Director. Mr. Lee is currently a partner in Shook Lin & Bok LLP’s corporate finance and international finance practice and has been with the firm since 1994. Mr. Lee is also a partner in the firm’s China practice, focusing on cross-border corporate transactions in the PRC. In addition, Mr. Lee currently serves as an independent director on the boards of Best World International Limited (appointed in 2004), Matex International Limited (appointed in 2006), Serial System Ltd (appointed in 2002), Sim Lian Group Limited (appointed in 2002), Qian Hu Corporation Limited (appointed in 2000) and Youcan Foods International Limited (appointed in 2004), all of which are companies listed on the SGX-ST. He is also an independent director on the board of Man Wah Holdings Limited, a company listed on the Hong Kong Exchanges and Clearing Limited. Mr. Lee is a member of the Board of Governors of Hwa Chong Institution, a director and secretary to the board of directors of Singapore Chinese High School, as well as legal adviser to the Hwa Chong Alumni Association and the Singapore Plastic Industry Association. He was conferred the Service to Education Award by the Ministry of Education in 2004 and 2010, and was appointed a member of the Feedback Supervisory panel for 2005/2006 by the Prime Minister of Singapore. Mr. Lee graduated from the National University of Singapore in 1993 with a Bachelor’s degree in Law (Hons), and was admitted as a solicitor in England and Wales in 2008. He is a member of the Singapore Academy of Law, and the Law Society of Singapore.

Pursuant to Rule 210(5)(a) of the Listing Manual, save for Mr. Tan Ling San, Mr. Goh Yeow Tin, Mr. Jong Voon Hoo, Mr. Francis Lee Fook Wah and Mr. Lee Teck Leng, Robson, our Directors do not have prior experience as directors of any public listed company in Singapore. However, they have undertaken to undergo relevant training in Singapore to familiarise themselves with the roles and responsibilities of a director of a public listed company in Singapore.

Our Non-Executive Director, Mr. Lee Teck Leng, Robson, is a partner in Shook Lin & Bok LLP, who are our legal advisers in our proposed listing and initial public offering; the firm also provides corporate secretarial services to our Group. Mr. Lee Teck Leng, Robson is however not professionally involved in our proposed listing and initial public offering, in any respect whatsoever. It is envisaged that Shook Lin & Bok LLP will continue to provide legal and corporate secretarial services to our Group in the future.

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Save for the foregoing, our Group does not have any other existing business or professional relationships with our Independent Directors and Non-Executive Director.

The present and past directorships for companies, and managerial positions for sole-proprietorships, of each of our Directors held in the five (5) years preceding the date of lodgement of this Prospectus, excluding that held in our Company, are set out below:

NamePresent directorships or managerial positions

Past directorships or managerial positions

Lim Hock Chee Group companies or entitiesCMM MarketingSS SupermarketSS MalaysiaShng Siong(1)

SS 1(1)

SS Hypermart(1)

SS Groceries(1)

Group companies or entitiesShing Song(2)

Other companies or entitiesFood More(1)

SS Food CourtECL Money ChangerE Land PropertiesSS Holdings

Other companies or entitiesShen Shiong Supermarket Sdn. Bhd.(“Shen Shiong”) (dissolved)(3)

SS Properties Services (terminated)(1)

B&R Bakery (terminated)(1)

Lim Hock Eng Group companies or entitiesCMM MarketingSS SupermarketSS Malaysia

Group companies or entities-

Other companies or entitiesSS Food CourtECL Money ChangerE Land PropertiesSS Canteen(1)

Choon Lu Trading(1)

SS Holdings

Other companies or entitiesShen Shiong (dissolved)(3)

Lim Hock Leng Group companies or entitiesCMM MarketingSS SupermarketSS Malaysia


Other companies or entitiesSS Food CourtECL Money ChangerE Land PropertiesSS Holdings

Other companies or entitiesShen Shiong (dissolved)(3)

Tan Ling San Group companies or entitiesCMM MarketingSS Supermarket


Other companies or entities-


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NamePresent directorships or managerial positions

Past directorships or managerial positions

Goh Yeow Tin Group companies or entities-


Other companies or entitiesSeacare Manpower Services Pte. Ltd.Seacare Medical Holdings Pte. Ltd.Linknet Asia Pte. Ltd.Sino-Sing Center Pte. Ltd.Watertech Pte. Ltd.Sinnet Education Pte. Ltd.Juken Technology LimitedLereno Bio-Chem Ltd.Lereno BC (Singapore) Pte. Ltd Oakwell Engineering LimitedVicom Ltd

Other companies or entitiesETLA LimitedGlobal Resources & Consultants Pte. LtdUnitop International Pte. Ltd.De-Teachers Pte. Ltd.International Education Development Centre Pte. Ltd.Scientific & Digital Forensic Services and Corporate Investigations Pte. Ltd.

Jong Voon Hoo Group companies or entities-



Other companies or entitiesSoup Restaurant Group Limited

Francis Lee Fook Wah Group companies or entities-


Other companies or entitiesMan Wah Holdings LtdWise Alliance Investments Ltd

Other companies or entitiesMan Wah Furniture (S) Pte. Ltd.

Lee Teck Leng, Robson Group companies or entities-


Other companies or entitiesBest World International LimitedMatex International LimitedSerial System LtdSim Lian Group LimitedQian Hu Corporation LimitedYoucan Foods International LimitedSingapore Chinese High SchoolSLAB Services Private LimitedMan Wah Holdings Limited

Other companies or entitiesVisionEx Pte. Ltd.(dissolved – members’ voluntary winding up)Hwa Chong International SchoolChina Energy Limited

Notes:

(1) Our Directors are/were managers of these entities. Each of these entities is/ was a sole-proprietorship.

(2) Mr. Lim Hock Chee was a manager of Shing Song between 1988 and 2009. In 2009, Shing Song was acquired by SS Supermarket, and Mr. Lim Hock Chee withdrew as manager of Shing Song.

(3) The name of Shen Shiong (dissolved) was struck off in accordance with section 308 (4) of the Companies Act 1965 of Malaysia as it was not carrying on business or was not in operation.

Key Executives

Our Directors are assisted by a team of experienced and qualified Key Executives who are responsible for the various functions of our Company. The particulars of our Key Executives are as follows:

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Name Age Address Principal occupation

Law Ah Yi 65 Block 122, Jurong East Street 13,#22-35, Singapore 600122

General Manager, Business Development and Promotions

Lim Chee Wee Ryan 38 468H Upper Changi Road, Singapore 486961

Chief Financial Officer

Lee Lay Chin 56 Block 636, Bedok Reservoir Road,#06-29, Singapore 410636

General Manager, Purchasing and Promotions

Lee Moi Hong 50 Block 468, Hougang Avenue 8,#02-1502, Singapore 530468

Head, Dry Goods

Sng Yiam Choon 58 Block 633, Hougang Avenue 8,#08-31, Singapore 530633

Senior Manager, Warehouse and Logistics Operations

Tan Bee Loo 50 Block 127 Ang Mo Kio Avenue 3 #06-1899 Singapore 560127

Head, Fruits & Vegetables

Tan Cheng Kwan 41 Block 45, Chai Chee Street,#12-134, Singapore 461045

Assistant General Manager, Purchasing

Tan Ching Fern 36 141 Haig Road, #02-02 Spring Gardens, Singapore 438739

Board Secretary and Manager, Corporate Affairs

Tan Siok Tin 46 Block 316B, Anchorvale Link,#05-195, Singapore 542316

Senior Manager, Information Technology

Tan Yone Shin(aka Khin Maung Lwin)

48 Block 733, Woodlands Circle,#11-93, Singapore 730733

Assistant General Manager, Supermarket Operations

Wong Heng San 56 Block 202, Bukit Batok Street 21,#11-98, Singapore 650202

Assistant General Manager, International Business Development

Wong Soong Kit 58 79 Moonbeam TerraceSingapore 277328

Finance Director

Information on the business and working experience, education and professional qualifications, if any, and areas of responsibilities of each of our Key Executives are set out below:

Mr. Law Ah Yi is our General Manager, Business Development and Promotions. Mr. Law has over 37 years of relevant experience in grocery retailing, having worked in the industry since 1974. He joined us in 2007 and is in charge of developing and promoting our housebrand products, as well as our nation-wide advertising and promotion campaigns, such as promotional activities on live television. Prior to joining us, Mr. Law worked in PSC Corporation. Between 1974 and 2007, Mr. Law held various positions in PSC Corporation, and served as general sales manager in PSC Corporation for over 10 years, where his responsibilities included the franchising of chain stores and mini-marts, as well as the distribution of housebrand products.

Mr. Lim Chee Wee Ryan is our Chief Financial Officer. Mr. Lim has approximately 13 years of relevant experience in finance and audit work. He joined us as our Chief Financial Officer in early 2009 and assists our Finance Director, Mr. Wong Soong Kit, in overseeing the preparation of our Group’s financial statements, cash management, corporate governance, and internal controls.

Prior to joining us, Mr. Lim served as an internal audit executive and personal secretary to the executive chairman of San Teh Limited, a company listed on the SGX-ST, between 1998 and 2000. Between 2000 and 2001, Mr. Lim worked as an internal auditor with Asia Pulp & Paper Limited, one of the largest paper

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and pulp companies in the world. He then joined Overseas Union Enterprise Limited, a company listed on the SGX-ST, as an internal audit executive, serving between 2001 and 2003, before becoming a senior consultant at KPMG (as it was then known), where he worked till 2004. Between 2004 and 2007, Mr. Lim worked as an associate principal at LTC & Associates (as it was then known), an independent member of BKR International, a global association of accountancy firms. During 2007, Mr. Lim served as an assistant director at Informatics Education Limited, a company listed on the SGX-ST. In late 2007, Mr. Lim became a director of JF Virtus Pte. Ltd., an assurance services consultancy firm serving publicly-listed companies. Between 2008 and 2009, Mr. Lim served as regional controller to Alantac Technology Limited (as it was then known), a company listed on the SGX-ST. Mr. Lim graduated with a Bachelor of Accountancy degree from Nanyang Technological University of Singapore in 1998. He is a Certified Public Accountant (non-practising) and a member of the Institute of Certified Public Accountants of Singapore as well as a Certified Internal Auditor and member of the Institute of Internal Auditors.

Mdm. Lee Lay Chin is our General Manager, Purchasing and Promotions. Mdm. Lee has worked in the grocery retail industry since 1976, and has approximately 35 years of relevant experience. Mdm. Lee joined us as an assistant general manager of our purchasing and promotions division in 2007, where she headed the purchasing team and led negotiations with our suppliers on trading terms, and negotiations with major corporate partners on joint promotions. Mdm. Lee was also responsible for our promotional activities, including “The Sheng Siong Show”, the “Sheng Siong Live!” show and various other festive promotions. In 2009, Mdm. Lee was promoted to general manager of our purchasing and promotions department. As general manager, Mdm. Lee oversaw the launch of our Sheng Siong co-branded credit cards in 2009 and our collaboration with VISA in relation to promotional activities for the World Cup and the Singapore Youth Olympic Games in 2010, and led negotiations with payment providers such as Visa, Mastercard and China Unionpay for our stores.

Prior to joining us, Mdm. Lee worked in PSC Corporation. Between 1976 and 2007, Mdm. Lee served in various positions in PSC Corporation, beginning as a sales clerk and rising through a series of promotions to merchandising manager, a senior managerial position. Mdm. Lee graduated from the Singapore Institute of Management in 1984 with a Diploma in Business Studies.

Mdm. Lee Moi Hong is our Head, Dry Goods. Mdm. Lee has worked with our Group since its inception in 1985. During her career with us, Mdm. Lee has held several positions in our Group and her responsibilities have included overseeing the cutting, processing, storing and repacking of meat products, the selection and packing of dried foods at our previous factory premises located at 434 Tagore Industrial Avenue, Singapore 787812, general store operations, and the inspection of our stores on a regular basis. In 2007 and 2008, Mdm. Lee was appointed a director of our subsidiaries, SS Supermarket and CMM Marketing, respectively. In her current role, Mdm. Lee oversees our Group’s packing and distribution of dry goods such as biscuits, spices, flour, dried shrimp, Chinese herbs and other similar products. Prior to joining our Group, Mdm. Lee was employed in her family’s poultry rearing and processing business. Mdm. Lee has approximately 37 years of relevant experience in grocery retailing and related industries. Mdm. Lee is the spouse of our Executive Director, Mr. Lim Hock Chee.

Mr. Sng Yiam Choon is our Senior Manager, Warehouse and Logistics Operations. He joined us in 2007, and his responsibilities include overseeing and controlling our inventory movements, delivery records, and other aspects of our day-to-day warehouse and logistics operations.

Prior to joining us, Mr. Sng began his career as an executive in the materials department of Shell Eastern Petroleum (Pte) Ltd. in 1976 where he assisted with logistics and materials purchasing. Between 1984 and 1992, Mr. Sng worked in PSC Corporation as an operations and production manager, being responsible for inventory management and product manufacturing. Between 1992 and 1994, Mr. Sng was engaged by Cheah Huat Food Industrial Pte. Ltd. as a marketing manager. Between 1994 and 1997, he worked in Provision Management Supplier Pte. Ltd. as a marketing and warehousing manager overseeing marketing activities and inventory levels. Mr. Sng then worked in Chia Khim Lee Food Industries Pte. Ltd. between 1997 and 2007 as a senior development manager in charge of general business development and client management. Mr. Sng has over 27 years of relevant experience in grocery retailing and related food industries.

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Mdm. Tan Bee Loo is our Head, Fruits and Vegetables. Mdm. Tan has worked with our Group since its inception in 1985 and her responsibilities include overseeing the purchasing, pricing and quality control aspects of the fruit and vegetables retailed in our stores, as well as the direct importation of fruits and vegetables by our Group from our international suppliers located in, inter alia, Africa, Australia, Chile, China, India, Indonesia, Malaysia, New Zealand, Pakistan, Taiwan, Thailand, and the United States. During her career with us, Mdm. Tan has held several positions in our Group and her responsibilities have included overseeing the procurement, negotiations, direct importation of, and retail sales of our fruits and vegetables, as well as our general store operations, including sales, product displays and customer service. In 2007 and 2008, Mdm. Tan was appointed a director of our subsidiaries, SS Supermarket and CMM Marketing, respectively. Prior to joining us, Mdm. Tan worked as a craftsman in Toppan Forms (S) Pte. Ltd. between 1978 and 1981. Mdm. Tan has over 37 years of relevant experience in grocery retailing and related industries. Mdm. Tan is the spouse of our Executive Director, Mr. Lim Hock Eng.

Mr. Tan Cheng Kwan is our Assistant General Manager, Purchasing. He joined us in 1991 and during his career with us, held various positions in our Group, including serving as assistant general manager, supermarket operations, overseeing the business and operations of 12 of our stores in the eastern, southern and central regions of Singapore between 2007 and 2011. In 2011, Mr. Tan was appointed to his current role, where his responsibilities include advising on and coordinating our purchasing operations for our grocery retailing business.

Mr. Tan has over 20 years of relevant experience in grocery retailing, particularly in relation to operations. He has also attended various training courses, including a course at the Singapore Environment Institute in 2004, and courses at the Singapore Institute of Retail Studies and SSA Consulting Group Pte. Ltd. in 2008 and 2009 under the Singapore Workforce Skills Qualification Scheme, which is administered by the Singapore Workforce Development Agency. Mr. Tan graduated from Willow Avenue Secondary School with a GCE ‘O’ Levels certificate in 1986.

Ms. Tan Ching Fern is our Board Secretary and Corporate Affairs Manager. Ms. Tan joined us in 2007 and her responsibilities include reporting to our Directors on key corporate matters, as well as handling all of our Group’s relations with the various press and media agencies. Prior to joining us, Ms. Tan worked in Singapore Press Holdings Ltd. (“SPH”) between 1996 and 2007, one of Singapore’s largest media organizations. Ms. Tan held various positions during her career with SPH where she was last employed as a business news correspondent, covering small and medium enterprises, trade agencies and statutory boards, stock markets, and various industries such as property, retail and information technology. During this time, Ms. Tan won several awards, including “Best News Article” in January 1998, “Best Feature” in January 1999, and was nominated for “Best Financial Journalist” in 2005 by the Small Investors Association of Singapore (SIAS). Ms. Tan graduated from the National University of Singapore in 1996 with a Bachelor’s degree in Arts and Social Sciences, under a scholarship awarded by SPH. Ms. Tan is a daughter-in-law to our Executive Director, Mr. Tan Ling San.

Ms. Tan Siok Tin is our Senior Manager, Information Technology. She joined us in 2007, and her responsibilities include overseeing the implementation and maintenance of the various computer systems required for our operations, including our Management Information System, as well as designing and implementing information technology solutions, such as data recovery plans and back-up schemes. She is also responsible for reviewing our infrastructure technology and liaising with external technology vendors.

Prior to joining us, Ms. Tan worked in PSC Corporation between 1982 and 2007. She served as the senior executive in charge of PSC Corporation’s management information systems, overseeing, inter alia, the implementation and maintenance of enterprise resource planning (ERP) systems for companies in Singapore and Malaysia, and conducting operations and business reviews and analyses. Ms. Tan has approximately 29 years of relevant experience in information technology-related work. Ms. Tan graduated in 1997 with an International Diploma in Computer Studies from NCC Education, a global education provider based in the United Kingdom.

Mr. Tan Yone Shin (also known as Mr. Khin Maung Lwin) is our Assistant General Manager, Supermarket Operations. Mr. Tan joined us in 1995 as an accountant, and during his career with us, held various positions in our Group. In 2004, Mr. Tan served as an area manager overseeing our stores’ operations, before being promoted to Assistant General Manager, Supermarket Operations in 2007. His current responsibilities include overseeing the business and operations of all of our stores and stalls in Singapore.

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Mr. Tan has over 16 years of relevant experience, having worked in the grocery retailing industry since 1995. Mr. Tan graduated from the Institute of Economics in Yangon, Myanmar in 1983 with a Bachelor of Commerce degree. Mr. Tan has also attended various training courses, including a course at the Singapore Environment Institute in 2004, and courses at the Singapore Institute of Retail Studies and SSA Consulting Group Pte. Ltd. in 2008 and 2009 under the Singapore Workforce Skills Qualification Scheme, which is administered by the Singapore Workforce Development Agency.

Mr. Wong Heng San is our Assistant General Manager, International Business Development. Mr. Wong has over 31 years of relevant experience. Mr. Wong joined us in 2007, and his responsibilities include overseeing our Group’s international sourcing operations, as well as identifying, planning and executing our international trading operations and investments.

Prior to joining us, Mr. Wong began his career at Golden Hope Commodity Pte. Ltd., where he was engaged in commodity futures trading between 1980 and 1981. Between 1981 and 1989, Mr. Wong worked at the Singapore Trade Development Board (“STDB”), where his responsibilities included serving at STDB’s China Desk to assist Singaporean and Chinese companies in their trading and investment operations in the PRC and Singapore, respectively. In 1989, Mr. Wong was appointed Centre Director of the Beijing-Singapore Trade Office by STDB, as well as Assistant Commercial Representative for Beijing, PRC by the Singapore Ministry of Foreign Affairs. In 1991, Mr. Wong served as a Commercial Attaché in the Singapore Embassy in Beijing, PRC. From 1992 to 2007, Mr. Wong worked in PSC Corporation where he served, inter alia, as general manager of a joint venture company involving PSC Corporation in Shanghai, PRC. In 1980, Mr. Wong graduated from Nanyang University (which subsequently merged with the University of Singapore to form the National University of Singapore) with a Bachelor’s degree in Government and Public Administration.

Mr. Wong Soong Kit is our Finance Director and is responsible for overseeing our Group’s finance and accounting functions, treasury management, strategic planning and budgets, tax management, corporate governance and internal controls. Prior to joining our Group in 2011, Mr. Wong was a financial consultant working on, inter alia, initial public offerings, mergers and acquisitions, and financial reporting. Between 1989 and 2009, Mr. Wong served as the group finance director of BRC Asia Limited (“BRC”), a company listed on the SGX-ST, where his areas of responsibility included financial, strategic, and risk management, as well as leading BRC’s initial public offering exercise in Singapore in 2000, assisting with the initial public offering of BRC’s then-majority shareholder, Acertec PLC, on the London Stock Exchange AIM Market in around 2006, and managing BRC’s joint venture in China. Between 1978 and 1989, Mr. Wong served as chief financial officer of Guthrie GTS Limited, a company listed on the SGX-ST, where he assisted with the group’s restructuring and merger and acquisition exercises. Between 1977 and 1978, Mr. Wong worked with Comex Far East Pte Ltd as an accountant. He served as an audit clerk with Price Waterhouse (as it was then known) between 1974 and 1977. He is a Chartered Accountant and Fellow of the Association of Chartered Certified Accountants (ACCA)(UK), as well as a Fellow of the Institute of Certified Public Accountants of Singapore.

Save as disclosed below, none of our Key Executives has any present or past directorships over the five (5) years preceding the date of lodgement of this Prospectus:

Name Present directorships Past directorships

Law Ah Yi Group companies-

Group companies-

Other companies-

Other companies-

Lim Chee Wee Ryan Group companies-

Group companies-

Other companies-

Other companies-

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Lee Lay Chin Group companies-

Group companies-

Other companies-

Other companies-

Lee Moi Hong Group companiesCMM MarketingSS Supermarket

Group companies-

Other companies-

Other companies-

Sng Yiam Choon Group companies-

Group companies-

Other companies-

Other companies-

Tan Bee Loo Group companiesCMM MarketingSS Supermarket

Group companies-

Other companies-

Other companies-

Tan Cheng Kwan Group companies-

Group companies-

Other companies-

Other companies-

Tan Ching Fern Group companies-

Group companies-

Other companies-

Other companies-

Tan Siok Tin Group companies-

Group companies-

Other companies-

Other companies-

Tan Yone Shin(aka Khin Maung Lwin)

Group companies-

Group companies-

Other companies-

Other companies-

Wong Heng San Group companies-

Group companies-

Other companies-

Other companiesFourzone Industries (S) Pte. Ltd.NWA Marketing Service Pte. Ltd.

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Wong Soong Kit Group companies-

Group companies-

Other companies-

Other companiesBRC Asia LimitedBRC China LimitedAnhui BRC & Ma SteelWeldmesh LimitedHall Engineering Far East Pte Ltd (dissolved-members’ voluntary winding up)Carrington Wire Asia Pte Ltd(dissolved-members’ voluntary winding up)Peladang Chemicals (S) Pte Ltd(dissolved-members’ voluntary winding up)

Material Background Information on our Directors, Key Executives and Controlling Shareholders

1. Save as disclosed below, none of our Directors, Key Executives or Controlling Shareholders:

(a) has, at any time during the last 10 years, had an application or a petition under any bankruptcy laws of any jurisdiction filed against him or against a partnership of which he was a partner at the time when he was a partner or at any time within two (2) years from the date he ceased to be a partner;

(b) has, at any time during the last 10 years, had an application or a petition under any law of any jurisdiction filed against an entity (not being a partnership) of which he was a director or an equivalent person or a key executive, at the time when he was a director or an equivalent person or a key executive of that entity or at any time within two (2) years from the date he ceased to be a director or any equivalent person or a key executive of that entity, for the winding up or dissolution of that entity or, where that entity is the trustee of a business trust, on the ground of insolvency;

(c) has any unsatisfied judgement against him;

(d) has ever been convicted of any offence, in Singapore or elsewhere, involving fraud or dishonesty which is punishable with imprisonment, or has been the subject of any criminal proceedings (including any pending criminal proceedings of which he is aware) for such purpose;

(e) has ever been convicted of any offence, in Singapore or elsewhere, involving a breach of any law or regulatory requirement that relates to the securities or futures industry in Singapore or elsewhere, or has been the subject of any criminal proceedings (including any pending criminal proceedings of which he is aware) for such breach;

(f) has, at any time during the last 10 years, had judgement entered against him in any civil proceedings in Singapore or elsewhere involving a breach of any law or regulatory requirement that relates to the securities or futures industry in Singapore or elsewhere, or a finding of fraud, misrepresentation or dishonesty on his part, nor has he been the subject of any civil proceedings (including any pending civil proceedings of which he is aware) involving an allegation of fraud, misrepresentation or dishonesty on his part;

(g) has ever been convicted in Singapore or elsewhere of any offence in connection with the formation or management of any entity or business trust;

(h) has ever been disqualified from acting as a director or an equivalent person of any entity (including the trustee of a business trust), or from taking part directly or indirectly in the management of any entity or business trust;

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(i) has ever been the subject of any order, judgement or ruling of any court, tribunal or governmental body permanently or temporarily enjoining him from engaging in any type of business practice or activity;

(j) has ever, to his knowledge, been concerned with the management or conduct, in Singapore or elsewhere, of the affairs of:

(i) any corporation which has been investigated for a breach of any law or regulatory requirement governing corporations in Singapore or elsewhere;

(ii) any entity (not being a corporation) which has been investigated for a breach of any law or regulatory requirement governing such entities in Singapore or elsewhere;

(iii) any business trust which has been investigated for a breach of any law or regulatory requirement governing business trusts in Singapore or elsewhere;

(iv) any entity or business trust which has been investigated for a breach of any law or regulatory requirement that relates to the securities or futures industry in Singapore or elsewhere, in connection with any matter occurring or arising during the period when he was so concerned with the entity or business trust; and

(k) has been the subject of any current or past investigation or disciplinary proceedings, or has been reprimanded or issued any warning, by the Authority or any other regulatory authority, exchange, professional body or government agency, whether in Singapore or elsewhere.

Our Executive Director, Mr. Lim Hock Chee

To the best of his recollection, in 1999, our Executive Director, Mr. Lim Hock Chee, was subjected to a fine as an incorrect amount of tax was paid to the Immigration and Checkpoints Authority of Singapore (“ICA”). This was due to an administrative oversight whereby the tax amount intended for ICA was paid erroneously instead to the Inland Revenue Authority of Singapore (“IRAS”). The fine imposed by ICA was duly paid.

To the best of his recollection, in 1993, Mr. Lim was also subjected to a fine as SS Supermarket, or one of the sole-proprietorships it owns, had hired an employee prior to the employee receiving the requisite work permit or documents from the Ministry of Manpower of Singapore (“MOM”). The employee had submitted forged documents for his application for the requisite work permit or documents, which was uncovered thereafter by MOM. Mr. Lim assisted MOM with its investigations regarding this matter, and the fine imposed by MOM was duly paid.

Our Executive Directors, Mr. Lim Hock Eng and Mr. Lim Hock Leng

To the best of their recollection, in 1993, our Executive Directors, Mr. Lim Hock Eng and Mr. Lim Hock Leng, were subjected to fines as certain persons, including their domestic foreign workers, had assisted with store operations without possessing the work permits required by MOM. The fines imposed by MOM were duly paid.

2. Save to the extent disclosed in the section entitled “Share Capital and Shareholders” of this Prospectus, none of our Directors or Key Executives has any equity interests in our Company as at the date of lodgement of this Prospectus.

3. No option to subscribe for securities of our Company has been granted to, or was exercised by, any Director or Key Executive within the two (2) financial years preceding the date of lodgement of this Prospectus.

4. Save as disclosed in the section entitled “Directors, Management and Staff – Service Agreements” of this Prospectus, there are no existing or proposed service contracts between our Directors or our Key Executives and our Company.

5. There are no shareholding qualifications for Directors in the Articles of Association of our Company.

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6. Save as disclosed in the section entitled “Interested Person Transactions and Conflict of Interests” of this Prospectus, none of our Directors is interested, whether directly or indirectly, in the promotion of, or in any assets acquired or disposed of by, or leased to, our Company within the two (2) years preceding the date of lodgement of this Prospectus, or in any proposal for such acquisition or disposal or lease as aforesaid.

7. Save as disclosed in the section entitled “Interested Person Transactions and Conflict of Interests” of this Prospectus, none of our Directors or Key Executives has any interest, whether direct or indirect, in any company carrying on the same trade as our Company.

8. No sum or benefit has been paid or has been agreed to be paid to any Director or to any firm in which a Director is a partner or corporation in which such Director holds shares or debentures, in cash or in shares or otherwise by any person to induce him to become, or to qualify him as, a Director or otherwise for services rendered by him or such firm or corporation in connection with the promotion or formation of our Company.

9. Save as disclosed in the section entitled “Interested Person Transactions and Conflict of Interests”, none of our Directors has any interest in any existing contract or arrangement subsisting at the date of lodgement of this Prospectus which is significant in relation to the business of our Company.

10. Save as disclosed in the section entitled “Directors, Management and Staff” of this prospectus, there is no family relationship between any of our Directors and/or Key Executives, or between any of our Directors, Key Executives and Controlling Shareholders.

11. There is no arrangement or understanding with any of our Controlling Shareholders, customers, suppliers or any other person pursuant to which any of our Directors or Key Executives were selected as Director or Key Executive.

Service Agreements

On 22 June 2011, our Company entered into separate service agreements with each of our Executive Directors, Mr. Lim Hock Chee, Mr. Lim Hock Eng, Mr. Lim Hock Leng and Mr. Tan Ling San. The Service Agreements are for an initial period of three (3) years (the “Initial Term”), commencing with effect from the date of our listing on the SGX-ST, subject to an automatic renewal for a three (3) year term on the same terms and conditions upon the expiry thereof. During the Initial Term, the parties may terminate the respective service agreement by either party giving not less than six (6) months’ notice in writing to the other.

The Service Agreements may also be terminated by our Company by notice served on the Executive Directors upon the occurrence of certain events on the part of the Executive Directors, such as bankruptcy, criminal conviction or if the Executive Director ceases to be qualified to act as a director in accordance with the Companies Act. The Service Agreements may also be terminated by our Company immediately if the Executive Directors, in the reasonable opinion of the Board, be guilty of any wilful misconduct in the discharge of their duties or incompetence in the performance of their duties, or be in breach of any material provision to their respective Service Agreement.

Under the Service Agreements, the salaries of Mr. Lim Hock Chee, Mr. Lim Hock Eng, Mr. Lim Hock Leng and Mr. Tan Ling San will be S$300,000, S$240,000, S$240,000 and S$240,000 respectively per annum, (excluding employer’s CPF). In addition, Mr. Lim Hock Chee, Mr. Lim Hock Eng, Mr. Lim Hock Leng and Mr. Tan Ling San will each be entitled to a director’s fee of S$20,000 as Directors or directors of our subsidiaries. Such remuneration shall be subject to review by our Remuneration Committee at least once yearly.

In addition, Mr. Lim Hock Chee, Mr. Lim Hock Eng, Mr. Lim Hock Leng and Mr. Tan Ling San shall each be entitled to receive a fixed bonus of two (2) months salary per annum (the “Fixed Bonus”), payable at the end of each FY and an annual incentive bonus (the “Incentive Bonus”) of a sum calculated based on the audited consolidated profit before income tax (“PBT”) of our Group inclusive of CPF payable by the Group, if any. If their respective employment with our Company is for less than a full FY, the Fixed Bonus and the Incentive Bonus for that FY shall be apportioned in respect of the actual number of days of their respective employment on the basis of a 365-day FY.

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The respective entitlements of the Executive Directors to the Incentive Bonus are set out below:

Name Incentive Bonus

Mr. Lim Hock Chee 2.5% of PBT(1)

Mr. Lim Hock Eng 2.5% of PBT(1)

Mr. Lim Hock Leng 2.5% of PBT(1)

Mr. Tan Ling San 2.5% of PBT(1)

Note:

(1) PBT is, in relation to any financial year, the audited consolidated profit before income tax of our Group based on our audited accounts for that financial year, before deducting such Incentive Bonus and staff bonus excluding items which our Remuneration Committee may determine in consultation with our auditors to be non-recurring in nature, for both income and expense items.

Our Group will provide a car to each of Mr. Lim Hock Chee, Mr. Lim Hock Eng, Mr. Lim Hock Leng and Mr. Tan Ling San during his employment with our Group, all expenses to be paid by our Group. All travelling and travel-related expenses, entertainment expenses and other out-of-pocket expenses reasonably incurred by our Executive Directors in the process of discharging their duty on our behalf will be borne by our Group. Our Executive Directors are also entitled to health benefits and accident and life insurance coverage. Service agreements with similar remuneration terms have been in effect since 2007.

There is no existing or proposed service agreement entered into or to be entered into by our Directors with our Group which provide for benefits upon termination of employment or severance payments.

Our Remuneration Committee has considered the framework of remuneration for Executive Directors for FY2010 and is of the view that the framework is fair and reasonable in light of the past remuneration (which includes the Fixed Bonus and the Incentive Bonus) for our Executive Directors, as well as their respective roles, responsibilities, and past and future contributions, and general market practices.

Directors’ and Key Executives’ Remuneration

The compensation (which includes benefits-in-kind, directors’ fees and bonuses) paid to our Directors and our Key Executives for services rendered to our Group on an aggregate basis and in remuneration bands for FY2009, FY2010 and FY2011 (estimated) are as follows:

FY2009 FY2010FY2011 (1)

(Estimated)

DirectorsLim Hock Chee H I BLim Hock Eng H I BLim Hock Leng H I BTan Ling San I P BGoh Yeow Tin N/A N/A AJong Voon Hoo N/A N/A AFrancis Lee Fook Wah N/A N/A ALee Teck Leng, Robson N/A N/A A

Key ExecutivesLaw Ah Yi A A ALim Chee Wee Ryan A A ALee Lay Chin A A ALee Moi Hong A A ASng Yiam Choon A A ATan Bee Loo A A ATan Cheng Kwan A A ATan Ching Fern A A ATan Siok Tin A A A

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FY2009 FY2010FY2011 (1)

(Estimated)Tan Yone Shin A A AWong Heng San A A AWong Soong Kit N/A N/A A

Remuneration bands:

“A”: Remuneration below S$250,000 per annum“B”: Remuneration between S$250,001 and S$500,000 per annum“C”: Remuneration between S$500,001 and S$750,000 per annum“D”: Remuneration between S$750,001 and S$1,000,000 per annum“E”: Remuneration between S$1,000,001 and S$1,250,000 per annum“F”: Remuneration between S$1,250,001 and S$1,500,000 per annum“G”: Remuneration between S$1,500,001 and S$1,750,000 per annum“H”: Remuneration between S$1,750,001 and S$2,000,000 per annum“I”: Remuneration between S$2,000,001 and S$2,250,000 per annum“J”: Remuneration between S$2,250,001 and S$2,500,000 per annum“K”: Remuneration between S$2,500,001 and S$2,750,000 per annum“L”: Remuneration between S$2,750,001 and S$3,000,000 per annum“M”: Remuneration between S$3,000,001 and S$3,250,000 per annum“N”: Remuneration between S$3,250,001 and S$3,500,000 per annum“O”: Remuneration between S$3,500,001 and S$3,750,000 per annum“P”: Remuneration between S$3,750,001 and S$4,000,000 per annum

Note:

(1) The estimated remuneration for FY2011 does not include any Incentive Bonus that our Executive Directors are entitled to under their respective service agreements, the details of which are set out in the section entitled “Service Agreements” in this section of this Prospectus. In addition, all our Independent Directors will be paid with effect from FY2011.

Save for contributions made for our employees by our Subsidiaries for the Central Provident Fund, no amounts have been set aside or accrued by our Company or our Subsidiaries to provide for pension, retirement or similar benefits for our Directors and Key Executives.

Employees

As at 31 December 2010, we had 2,324 employees, of whom 1,909 are full-time employees and 415 are part-time employees. Our employees are members of the Food Drinks & Allied Workers Union in Singapore. We have not experienced any strikes and/or work stoppage by our employees and we believe that our relationship with our employees is good. The following table shows the breakdown of our full-time employees all of whom are based in Singapore, and their respective fields of activity, as at 31 December 2008, 31 December 2009 and 31 December 2010:

Number of full-time employees as atDivision/ Function 31 December 2008 31 December 2009 31 December 2010

Management 102 102 94Administration 56 56 48Store activities 1,507 1,435 1,560Logistics 221 219 207Total number of full-time employees 1,886 1,812 1,909

In light of the labour-intensive nature of our grocery retailing business, the number of our full-time employees remained relatively stable at between 1,810 to 1,910 from FY2008 to FY2010.

We believe that our continued success depends, amongst other factors, upon the support and dedication of our management and employees. We have put in place various human resource strategies, including employee loyalty and bonus schemes. Certain of our employees will also be eligible to participate in our Sheng Siong ESOS. We have also made efforts to motivate and retain our staff through performance-based incentives. Our staff remuneration policy also emphasizes maximizing efficiency and productivity. For example, we set performance targets for each of our stores. When a store exceeds its performance targets, the employees working in that store are entitled to share in the excess profits for that store.

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As part of our employee welfare policy, we provide one free meal every day to each of our full-time employees.

Sheng Siong ESOS

We have implemented a share option scheme known as the “Sheng Siong ESOS” (the “Scheme”). The Scheme was approved by our Shareholders at an Extraordinary General Meeting held on 1 July 2011.

The following is a summary of the rationale and principal rules of the Scheme. The detailed rules of the Scheme are available for inspection by Shareholders. The detailed rules of the Scheme are also set out in Appendix H of this Prospectus entitled “Rules of Sheng Siong ESOS”.

1. Purpose of the Scheme

We believe the Scheme is essential to enhance our competitiveness as an employer to recruit and retain suitably qualified staff to meet our business needs.

We further recognise that the retention of the services of highly qualified and experienced employees is integral to the success and to the continued growth of our Group in an industry where experience and commitment are valued qualities and may necessarily command a premium. Accordingly, we hope that by instituting the Scheme we will be able to:

(a) motivate employees to achieve and maintain a high level of performance and contribution;

(b) make total employee remuneration sufficiently competitive to recruit and retain employees whose contributions are important to long-term growth and profitability of our Company; and

(c) foster an ownership culture within our Company which aligns the interests of employees with the interests of our Shareholders.

2. Eligibility

Full-time employees of the Group (provided that such persons are not undischarged bankrupts) who have attained the age of 21 years (the “Participants”) shall be eligible to participate in the Scheme at the absolute discretion of the committee tasked with the management of the Scheme (the “Committee”).

The Committee shall be constituted by our Remuneration Committee, comprising our Lead Independent Director, Mr. Goh Yeow Tin, our Independent Director, Mr. Jong Voon Hoo, and our Non-Executive Director, Mr. Lee Teck Leng, Robson.

For the avoidance of doubt, Controlling Shareholders of our Company and their Associates who are employees shall be eligible to participate in the Scheme at the absolute discretion of the Committee. Participation in the Scheme by such persons must be approved by the independent Shareholders of the Company. A separate resolution must be passed for each of such Participants and to approve the actual number and terms of options to be granted to that Participant.

3. Rationale for participation by the Controlling Shareholders of our Company and their Associates

Immediately after the Invitation, each of our Founders and Executive Directors, Mr. Lim Hock Chee, Mr. Lim Hock Eng and Mr. Lim Hock Leng will have a direct interest of 12.7% in the enlarged share capital of our Company (assuming the Over-allotment Option is not exercised) and will each be a Controlling Shareholder of our Company.

Our Directors are of the view that our Founders have provided valuable insights in relation to our Group’s board and management decisions, drawing from their wealth of experience and business acumen. Our Company is of the view that the experience and contribution of our Founders is invaluable to the growth of our Group and that their continuing contribution is required for the continued success of our Group. Further, the extension of the Scheme to encompass our Founders will ensure that they will be equally entitled, as other Participants, to take part in and to benefit from the Scheme and thereby enhance their long term commitment to our Group.

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In the event Options are to be granted to our Founders, our Company will seek the approval of independent Shareholders at a general meeting.

4. Size of the Scheme

The size of the Scheme (the “Scheme Size”) shall comprise up to 15.0% of our issued share capital (excluding treasury shares) from time to time (the “Threshold”).

The aggregate number of Shares available to Controlling Shareholders and their Associates shall not exceed 25.0% of the aggregate of the total number of Shares in respect of Options which may be granted under the Scheme. Separately, the aggregate number of Shares available to each Controlling Shareholder or his Associates under the Scheme shall not exceed 10.0% of the aggregate of the total number of Shares in respect of Options which may be granted under the Scheme.

We believe that the Scheme Size is reasonable, taking into account the nature of our business in the industry, the contributions of our employees and our share capital.

Our Company believes that the Threshold gives our Company sufficient flexibility to decide upon the number of Shares comprised in Options to offer to Participants under the Scheme. 15.0% of the issued share capital of our Company after the Invitation constitutes approximately 201,225,000 Shares. For the purposes of illustration, as it is intended that the Scheme shall last for 10 years, assuming that there is no change in the total issued share capital of our Company, the number of Options that may be granted in a year will average approximately 201,225,000.

Our Company, in line with its goals of ensuring sustainable growth, is constantly reviewing its position and considering the expansion of its talent pool which may involve employing new employees. The employee base, and thus the number of eligible participants under the Scheme will increase as a result. As and when opportunities arise, our Group may expand its business and operations and in connection with such expansion, may establish or acquire new Subsidiaries. In line with this expansion, the number of eligible Participants under the Scheme will also increase.

If the number of Options available under the Scheme is limited, our Company may only be able to grant a small number of Options to each eligible Participant which may not be a sufficiently attractive incentive. Our Company is of the opinion that it should have sufficient number of Options to offer to new employees as well as to existing ones. The number of Options offered must also be significant enough to serve as a meaningful reward for contribution to our Group.

To accommodate this potentially large pool of Participants and to allow the Scheme to serve as a meaningful reward for the contributions of these Participants to our Group, the 15.0% Scheme Size is therefore necessary.

However, it does not indicate that the Committee will definitely issue Options up to the prescribed limit. The Committee shall exercise its discretion in deciding the number of Options to be granted to each employee which will depend on the performance and value of each Participant to our Group.

5. Exercise Price and Exercise Period

The price of each Option is S$1.00 and the exercise price (the “Exercise Price”) for each Share in respect of which an Option is exercisable shall be determined and fixed by the Committee and shall be equal to the average of the closing prices of the Share for the past five (5) Market Days immediately preceding the relevant date of grant of the Option (the “Market Price”). The Committee may grant Options on a yearly basis and any such grants shall be made at least 60 days after the end of the financial year of the Company.

The period for the exercise (the “Exercise Period”) of an Option granted under the Scheme shall be:

(a) in the case of an Option granted at Market Price (the “Market Price Option”), a period commencing after the first anniversary of the relevant date of the grant and expiring on the 5th anniversary of such grant date, or 10 years or such other period which may from time to time be prescribed under any relevant law, regulation or rule of the SGX-ST; and

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(b) in the case of an Option granted at a discount of up to 20% of the Market Price (the “Incentive Option”), a period commencing after the 2nd anniversary of the relevant date of the grant and expiring on the 5th anniversary of such grant date, or 10 years or such other period which may from time to time be prescribed under any relevant law, regulation or rule of the SGX-ST for such Incentive Options.

6. Lapsing of Options

An Option shall, to the extent unexercised, immediately lapse without any claim against our Company:

(a) upon a Participant, being an employee of our Group, ceasing to be in the full-time employment of our Group, for any reason whatsoever (save for reason of ill health, injury or disability (in each case, evidenced to the satisfaction of the Committee), redundancy, retirement before the legal retirement age with the consent of the Committee, or any other reason approved in writing by the Committee); or

(b) upon the bankruptcy of the Participant or the happening of any other event which results in his being deprived of the legal or beneficial ownership of such Option;

(c) in the event of any misconduct on the part of the Participant as determined in the Committee’s discretion; or

(d) in the event that the Committee shall, at its discretion, deem it appropriate that such Option granted to a Participant shall so lapse on the grounds that any of the objectives of the Scheme have not been met.

7. Variation of capital

If a variation in the issued ordinary share capital of our Company (whether by way of a capitalisation of profits or reserves or rights issue, reduction, subdivision, consolidation or distribution) shall take place:-

(a) the Exercise Price for the Shares, the class and/or number of Shares comprised in an Option to the extent unexercised; and/or

(b) the class and/or number of Shares over which Options may be granted under the Scheme,

shall be adjusted by the Committee to give each Participant the same proportion of the equity capital of our Company as that to which he was previously entitled and, in doing so, the Committee shall determine at its own discretion the manner in which such adjustment shall be made.

Unless the Committee considers an adjustment to be appropriate:

(a) the issue of securities as consideration for an acquisition or a private placement of securities; or

(b) the cancellation of issued Shares purchased or acquired by our Company by way of a market purchase of such Shares undertaken by our Company on the SGX-ST during the period when a share purchase mandate granted by shareholders of our Company (including any renewal of such mandate) is in force,

shall not normally be regarded as a circumstance requiring adjustment.

No such adjustment shall be made if, as a result, a Participant shall receive a benefit that a Shareholder does not receive.

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Any determination by the Committee as to whether to make any adjustment and if so, the manner in which such adjustment should be made must (except in relation to a capitalisation issue) be confirmed in writing by the auditors for the time being of our Company (acting only as experts and not as arbitrators) to be in their opinion, fair and reasonable.

Upon any adjustment being made, our Company shall notify the Participant (or his duly appointed personal representatives where applicable) in writing and deliver to him (or his duly appointed personal representatives where applicable) a statement setting forth the Exercise Price thereafter in effect and the class and/or number of Shares thereafter to be issued on the exercise of the Option. Any adjustment shall take effect upon such written notification being given.

8. Modifications to the Scheme

Any or all the provisions of the Scheme may be modified and/or altered at any time and from time to time by resolution of the Committee, except that:

(a) no modification or alteration shall alter adversely the rights attaching to any Option granted prior to such modification or alteration except with the consent in writing of such number of Participants who, if they exercised their Options in full, would thereby become entitled to exercise not less than three-quarters of the voting rights attached to all the Shares which would fall to be allotted upon exercise in full of all outstanding Options;

(b) any modification or alteration which would be to the advantage of the Participants shall be subject to the prior approval of our Company’s shareholders in general meeting. In particular, the Scheme’s definitions of “Group”, “Group Employee”, “Associated Company”, “Controlling Shareholder”, “Participant”, “Committee”, “Option Period” and “Exercise Price” and rules 4, 5, 6, 7, 8, 10, 11.1, 11.6, 12, 13 and 15 of the Scheme (as set out in Appendix H of this Prospectus entitlted “Rules of Sheng Siong ESOS”) shall not be altered to the advantage of Participants except with the prior approval of our Company’s Shareholders in general meeting; and

(c) no modification or alteration shall be made without the prior approval (if applicable) of the SGX-ST and such other regulatory authorities as may be necessary.

9. Financial Effects of the Scheme

Any Options granted under the Scheme would have a fair value. In the event that such Options are granted at prices below the fair value of the Options, there will be a cost to our Group. The amounts of such costs may be more significant in the case of Incentive Options, where such Options are granted with exercise prices set at a discount to the prevailing market price of the Shares.

The cost to our Group of granting Options under the Scheme is as follows:-

(a) the exercise of an Option at the Exercise Price would translate into a reduction of the proceeds from the exercise of such Option, as compared to the proceeds that our Group would have received from such exercise had the exercise been made at the prevailing market price of the Shares. Such reduction of the exercise proceeds would represent the monetary cost to our Group;

(b) as the monetary cost of granting Options with a discounted Exercise Price is borne by our Group, the earnings of our Group would effectively be reduced by an amount corresponding to the reduced interest earnings that our Group would have received from the difference in proceeds from Exercise Price with no discount versus the discounted Exercise Price. Such reduction would, accordingly, result in the dilution of our Group’s EPS; and

(c) under the Singapore Financial Reporting Standard (FRS) 102 Share-based Payments, the grant date fair value of share-based payment awards granted to employees is recognised as an employee expense, with a corresponding increase in equity, over the period that the employees unconditionally become entitled to the awards. The amount recognised as an expense is adjusted to reflect the number of awards for which the related service and

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non-market vesting conditions are expected to be met such that the amount ultimately as an expense is based on the number of awards for which related service and non-market performance conditions at the vesting date. For share-based payment awards with no vesting conditions, the grant date fair value of the share-based payment is measured to reflect such conditions and there is no true-up for differences between expected and actual outcomes.

Details of the number of Options granted pursuant to the Scheme, the number of Options exercised and the exercise price (as well as any applicable discounts) will be disclosed in our annual report.

As at the date of this Prospectus, no Option has been granted. Upon the listing of our Company on the Mainboard of the SGX-ST, the relevant laws, regulations and rules of the SGX-ST shall apply and the Scheme shall be subject in accordance thereto.

We have made an application to the SGX-ST for permission to deal in and for quotation of Shares on the SGX-ST which may be issued upon the exercise of the Options to be granted under the Scheme. The approval of the SGX-ST is not to be taken as an indication of the merits of our Company, our Subsidiaries or Associates, our existing issued Shares (including the Vendor Shares), the New Shares, the Over-allotment Shares (if the Over-allotment Option is exercised), or the Option Shares.

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Interested Person Transactions and Conflict of Interests

In general, transactions between our Group and any of its Interested Persons (namely, our Directors, or Controlling Shareholders of our Company and/or any of their Associates) are known as Interested Person Transactions.

The following discussion on Interested Person Transactions (as defined in Chapter 9 of the Listing Manual) for FY2008, FY2009 and FY2010 and for the period commencing 1 January 2011 up to the Latest Practicable Date (the “Period Under Review”) is based on each member of our Group (namely, our Company and our Subsidiaries) being an entity at risk and with Interested Persons being construed accordingly.

In line with the rules set out in Chapter 9 of the Listing Manual, a transaction which value is less than S$100,000 is not considered material in the context of the Invitation and is not taken into account for the purposes of aggregation in this section.

Save as disclosed below and in the section entitled “Restructuring Exercise” of this Prospectus, our Group does not have any material transactions with any Interested Person for the Period Under Review.

Entities related to our Founders

SS Food Court was incorporated in Singapore on 28 January 1995 with our Executive Directors Mr. Lim Hock Chee, Mr. Lim Hock Eng and Mr. Lim Hock Leng each holding approximately 33.3% of the equity interest in SS Food Court. SS Food Court, and its two wholly-owned sole-proprietorships, SS Canteen and Food More, were established to manage and operate the food and beverage business.

ECL Money Changer was incorporated in Singapore on 3 May 2007 with our Executive Directors Mr. Lim Hock Chee, Mr. Lim Hock Eng and Mr. Lim Hock Leng each holding approximately 33.3% of the equity interest in ECL Money Changer. ECL Money Changer was established to manage and operate the money-changing business.

E Land Properties was incorporated in Singapore on 27 June 2007 with our Executive Directors Mr. Lim Hock Chee, Mr. Lim Hock Eng and Mr. Lim Hock Leng each holding approximately 33.3% of the equity interest in E Land Properties. E Land Properties was established to manage and operate the real estate business.

The food and beverage, money-changing and real estate businesses of SS Food Court, ECL Money Changer and E Land Properties respectively were segregated from our grocery retailing operations and are not included in our Group as our Directors view these businesses as different lines of business which do not fit into our Group’s business scope of grocery retailing.

Past Interested Person Transactions

Advances due to and due from our Founders, Mr. Lim Hock Chee, Mr. Lim Hock Eng and Mr. Lim Hock Leng and their Associates

During the Period Under Review, there were advances due to and due from our Founders, Mr. Lim Hock Chee, Mr. Lim Hock Eng and Mr. Lim Hock Leng and their Associates. Details of advances due to our Founders and their Associates during the Period Under Review are set out as follows:

Amount of advances due to our Founders and their Associates:

FY2008(S$)

FY2009(S$)

FY2010(S$)

From 1 January 2011 to the Latest Practicable

Date(S$)

Largest amount

outstanding during Period Under Review

(S$)

Lim Hock Chee 288,694 – – – 288,694

Lim Hock Eng 634,000 – – – 634,000

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INTERESTED PERSON TRANSACTIONS AND CONFLICT OF INTERESTS

Amount of advances due to our Founders and their Associates:

FY2008(S$)

FY2009(S$)

FY2010(S$)


Date(S$)

Largest amount


(S$)

Lim Hock Leng 2,050,895 – – – 2,050,895

SS Food Court 985,667 136,853 136,409 – 985,667

ECL Money Changer – – – – –

E Land Properties – – – – –

Details of advances due from our Founders and their Associates during the Period Under Review are set out as follows:

Amount of advances due from our Founders and their Associates:

FY2008(S$)

FY2009(S$)

FY2010(S$)


Date(S$)

Largest amount


(S$)

Lim Hock Chee – – – – –

Lim Hock Eng 262,890 – – – 262,890

Lim Hock Leng – – – – –

SS Food Court 1,097,584 – – – 1,097,584

ECL Money Changer 530,269 729,477 105,571 – 729,477

E Land Properties 829,981 36,051,880 – – 36,051,880

The advances were not on an arm’s length basis as they were interest-free. In addition, these advances were non-trade related, for working capital purposes, unsecured and repayable on demand.

As at the Latest Practicable Date, all of the above outstanding amounts have been fully settled. We do not intend to enter into similar transactions with any of our Founders or their Associates following our admission to the official list of the SGX-ST.

Sale of fixed assets by SS Supermarket to SS Food Court

In 2008, SS Supermarket disposed of certain fixed assets to SS Food Court for approximately S$325,772. The consideration was based on the net book value of the fixed assets stated in the unaudited accounts of SS Supermarket as at 31 December 2007, and would not ordinarily be considered a transaction conducted on an arm’s length basis or on normal commercial terms.

We do not intend to enter into similar transactions with SS Food Court following our admission to the official list of the SGX-ST.

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Sale of Shing Song by Mr. Lim Hock Chee and Mr. Lim Hock Leng to SS Supermarket

In 2009, the assets and liabilities of Shing Song were disposed of by our Executive Directors, Mr. Lim Hock Chee and Mr. Lim Hock Leng, to SS Supermarket for S$2.3 million. The consideration was based on the net book value of the assets and liabilities of Shing Song stated in the management accounts of Shing Song as at 31 December 2008, and would not ordinarily be considered a transaction conducted on an arm’s length basis or on normal commercial terms.

We do not intend to enter into similar transactions with our Executive Directors, Mr. Lim Hock Chee and Mr. Lim Hock Leng, following our admission to the official list of the SGX-ST.

Sale of properties by SS Supermarket to E Land Properties

On 31 October 2008, SS Supermarket disposed of a property located at Block 219, Bedok Central, #01-140, Singapore 460219, to E Land Properties for approximately S$3.5 million.

On 30 April 2009, SS Supermarket disposed of nine (9) additional properties to E Land Properties for approximately S$13.2 million.

Details of the 10 properties are as follows:

Location Description Type Tenure

Floor area (sq. ft.)

Prior use by SS Supermarket

1. Block 219, Bedok Central, #01-140, Singapore 460219 (“Property A”)

Single-storey HDB shop

Investment property

30 years commencing on 1 April 2009

4,025 Leased by SS Supermarket to third parties (HDB shophouse)

2. Block 352, Clementi Avenue 2, #01-91, Singapore 120352 (“Property B”)

Two-storey HDB shop

Leasehold property

81 years lease commencing on 1 August 2007

5,834 Used for SS Supermarket’s grocery retailing operations

3. Block 352, Clementi Avenue 2, #01-99, Singapore 120352 (“Property C”)

4. Block 233, Ang Mo Kio Avenue 3, #01-1168, Singapore 560233

Two-storey HDB shop

Leasehold property

83 years lease commencing on 1 October 1993


5. Block 544, Jurong West Street 42, #01-97, Singapore 640544

Two-storey HDB shop

Leasehold property

87 years lease commencing on 1 July 1996


6. Block 544, Jurong West Street 42, #01-99, Singapore 640544

7. 434 Tagore Industrial Avenue, Singapore 787812

Two-storey intermediate terrace factory with a mezzanine level

Investment property

Estate in perpetuity

10,286 Leased by SS Supermarket to third parties (Industrial / warehouse usage)

8. Block 144, Tampines Street 12, #01-390, Singapore 521144

Two-storey HDB shop

Investment property

90 years lease commencing on 1 April 1994


9. Block 742, Bedok Reservoir Road, #01-3111, Singapore 470742

Two-storey HDB shop

Investment property

90 years lease commencing on 1 August 1995


10. Block 345, Clementi Avenue 5, #01-78, Singapore 120345

Two-storey HDB shop

Investment property

85 years lease commencing on 1 October 1993


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For Properties A, B and C, the consideration was determined in line with the market rates for similar properties. For the remaining seven (7) properties, the consideration was based on valuations provided by independent property valuers. The sales of the properties were made on an arm’s length basis and on normal commercial terms.

We do not intend to enter into similar transactions with E Land Properties following our admission to the official list of the SGX-ST.

Lease of operations space by Food More and SS Food Court from SS Supermarket

Between 2007 and 2010, SS Food Court and its sole-proprietorship, Food More, sub-leased two (2) premises from SS Supermarket for the purpose of operating food courts. In 2010, the premises were sold by the landlord to a third party and the sub-leases were terminated.

Details of the leases are as follows:

Location Tenant Area

(sq. ft.)

Monthly rental(excluding

GST) Lease term

1 Woodlands Road Ten Mile Junction #02-04 Singapore 677899 (“TMJ Food Court 1”)

Food More 6,900 18,000.00 1 December 2007 to

30 November 2010

1 Woodlands Road Ten Mile Junction #01-17/18 Singapore 677899 (“TMJ Food Court 2”)

SS Food Court 3,100 7,750.00 1 January 2010 to 30 November

2010

Under the lease agreements, a proportionate amount of the utilities fees are also payable by SS Food Court and Food More to SS Supermarket. Details of the rent and utilities fees paid under the leases for the Period Under Review are as follows:

FY2008(S$)

FY2009(S$)

FY2010(S$)


Date(S$)

Rent and utilities fees for TMJ Food Court 1

216,000(1) 240,334 243,935 –

Rent and utilities fees for TMJ Food Court 2

– – 93,621 –

Total amount of rent and utilities paid

216,000 240,334 337,556 –

Note:

(1) This figure does not include utilities fees as Food More paid such utilities fees directly to the relevant suppliers in FY2008.

As the monthly rental was comparable to the rental for similar spaces in the vicinity offered for rent by unrelated parties, the leases were on an arm’s length basis and on normal commercial terms.

Services rendered by SS Food Court to SS Supermarket

Between 2008 and 2011, SS Food Court provided certain services to SS Supermarket, including cleaning, storekeeping and cashiering services.

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The amounts paid by SS Supermarket to SS Food Court for services for the Period Under Review are as follows:

FY2008(S$)

FY2009(S$)

FY2010(S$)


Date(S$)

Amounts paid for services provided

946,987 892,184 924,646 84,235

As SS Food Court provided these services to SS Supermarket on a reimbursement basis, these transactions would not ordinarily be considered transactions conducted on an arm’s length basis or on normal commercial terms. We do not intend to enter into similar transactions with SS Food Court following our admission to the official list of the SGX-ST.

Services rendered by SS Supermarket to ECL Money Changer

Between 2008 and 2011, SS Supermarket provided certain services to ECL Money Changer, including money teller services.

The amounts paid by ECL Money Changer to SS Supermarket for services for the Period Under Review are as follows:

FY2008(S$)

FY2009(S$)

FY2010(S$)


Date(S$)


110,149 121,775 138,912 25,033

As SS Supermarket provides these services to ECL Money Changer based on a premium to the reimbursement costs, these transactions were considered to be on an arm’s length basis and on normal commercial terms. We do not intend to enter into similar transactions with ECL Money Changer following our admission to the official list of the SGX-ST.

Provision of goods and services by CMM Marketing to SS Food Court

Between 2008 and 2011, CMM Marketing sold goods such as raw produce, including fish, meat and vegetables to SS Food Court, provided staff meals to SS Food Court’s employees, and delivered goods to SS Food Court’s outlets. The amounts paid by SS Food Court to CMM Marketing for goods and services for the Period Under Review are as follows:

FY2008(S$)

FY2009(S$)

FY2010(S$)


Date(S$)

Amounts paid for goods and services provided

500,039 543,507 1,178,885 404,764

As CMM Marketing provides these goods and services to SS Food Court on a reimbursement basis, these transactions would not ordinarily be considered to be on an arm’s length basis or on normal commercial terms. We do not intend to enter into similar transactions with SS Food Court following our admission to the official list of the SGX-ST.

Services rendered by CMM Marketing to E Land Properties

Between 2009 and 2011, CMM Marketing provided certain services to E Land Properties, including property management services.

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The amounts paid by CMM Marketing to E Land Properties for services for the Period Under Review are as follows:

FY2008(S$)

FY2009(S$)

FY2010(S$)


Date(S$)


– 187,607 126,595 19,061

As CMM Marketing provided these services to E Land Properties on a reimbursement basis, these transactions would not ordinarily be considered transactions conducted on an arm’s length basis or on normal commercial terms. The provision of these services ended on 31 March 2011. We do not intend to enter into similar transactions with E Land Properties following our admission to the official list of the SGX-ST.

On-going Interested Person Transactions

Provision of goods by SS Food Court to CMM Marketing

Since 2008, SS Food Court has sold goods, including beer, to CMM Marketing.

In connection with our proposed listing, CMM Marketing and SS Food Court have on 3 May 2011 entered into an agreement for the provision of goods, including beer, pursuant to which CMM Marketing will continue to pay SS Food Court on a reimbursement basis for such goods.

The amounts paid by CMM Marketing to SS Food Court for goods for the Period Under Review are as follows:

FY2008(S$)

FY2009(S$)

FY2010(S$)

From 1 January 2011 to the Latest

Practicable Date(S$)

Amounts paid for goods provided

435,269 1,004,741 293,169 162,748

As SS Food Court provides these goods to CMM Marketing on a reimbursement basis, these transactions would not ordinarily be considered transactions conducted on an arm’s length basis or on normal commercial terms. Our Directors are of the view that these transactions are not prejudicial to the interests of our Group or our minority Shareholders.

Provision of goods by SS Supermarket to SS Food Court

Since 2008, SS Supermarket has sold goods such as raw produce, including fish, meat and vegetables to SS Food Court.

In connection with our proposed listing, SS Supermarket and SS Food Court have on 3 May 2011 entered into an agreement for the provision of such goods, pursuant to which SS Food Court will pay SS Supermarket for the goods at the retail rates charged by SS Supermarket to its customers. Prior to this, the transactions were not on an arm’s length basis as SS Food Court paid SS Supermarket for the goods on a reimbursement basis.

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The amounts paid by SS Food Court to SS Supermarket for goods for the Period Under Review are as follows:

FY2008(S$)

FY2009(S$)

FY2010(S$)


Date(S$)


1,546,605 1,133,111 638,792 397,867

As SS Supermarket provides these goods to SS Food Court at the retail rates charged by SS Supermarket to its customers, these transactions are on an arm’s length basis and on normal commercial terms.

Provision of goods by SS Food Court to SS Supermarket

Since 2007, SS Food Court has sold goods, including beer and soft drinks, to SS Supermarket.

In connection with our proposed listing, SS Supermarket and SS Food Court have on 3 May 2011 entered into an agreement for the provision of such goods, pursuant to which SS Supermarket will continue to pay SS Food Court on a reimbursement basis for the goods.

The amounts paid by SS Supermarket to SS Food Court for goods for the Period Under Review are as follows:

FY2008(S$)

FY2009(S$)

FY2010(S$)


Date(S$)


124,991 88,219 185,557 79,801

As SS Food Court provides these goods to SS Supermarket on a reimbursement basis, these transactions would not ordinarily be considered transactions conducted on an arm’s length basis or on normal commercial terms. Our Directors are of the view that these transactions are not prejudicial to the interests of our Group or our minority Shareholders.

Lease and license of operations space by SS Supermarket, Shng Siong and SS 1 from E Land Properties

Shng Siong has leased one (1) property since 2008, SS Supermarket has leased three (3) properties since 2009, and SS 1 has licensed three (3) stalls since 2011 from E Land Properties for our grocery retail operations. Details of the leases and licences are as follows:

Location Tenant Area

(sq. ft.)

Monthly rental/licence fees and

maintenance charges

(excluding GST) Lease term

Ang Mo Kio 233 Supermarket SS Supermarket 4,284 S$17,136 (1) 1 August 2009 to 31 August 2013

Clementi 352 Supermarket SS Supermarket 5,834 S$17,502(2) 1 August 2009 to 31 August 2013

Jurong West 544 Supermarket SS Supermarket 3,950 S$13,035(3) 1 August 2009 to 31 July 2013

Woodlands 301 Supermarket Shng Siong 6,027 S$27,121(4) 1 February 2011 to 31 January 2014

Elias Mall Market Stalls SS 1 2,400 S$11,712 1 January 2011 to 31 December 2011

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Notes:

(1) E Land Properties provided a 15% rental rebate, in line with then prevailing market practices, such that monthly rental was S$14,565.60 (subject to GST), from 1 August 2009 to 31 December 2009



(4) E Land Properties provided a 15% rental rebate, in line with then prevailing market practices, such that monthly rental was S$23,052.90 (subject to GST), from 1 January 2009 to 31 December 2009.

Details of the rent paid by SS Supermarket, Shng Siong, and the licence fees and maintenance charges paid by SS 1, to E Land Properties under the leases for the Period Under Review are as follows:

FY2008(S$)

FY2009(S$)

FY2010(S$)


Date(S$)

Rent for Ang Mo Kio 233 Supermarket

– 72,828 205,632 99,389

Rent for Clementi 352 Supermarket

– 74,384 210,024 101,512

Rent for Jurong West 544 Supermarket

– 55,399 156,420 75,603

Rent for Woodlands 301 Supermarket

298,331 276,634 325,452 157,302

Licence fees and maintenance charges for Elias Mall Market Stalls

– – – 50,928(1)

Total amount of rent paid 298,331 479,245 897,528 484,734

As the monthly rental and licence fees and maintenance charges payable are comparable to the rental for similar spaces in the vicinity offered for rent by unrelated parties, the leases and licences are on an arm’s length basis and on normal commercial terms.

Note:

(1) As SS 1 began occupation of the Elias Mall Market Stalls on 15 January 2011, rent was only paid between 15 January 2011 and 31 January 2011. SS 1 did not pay rent for February 2011 as the Elias Mall Market Stalls were undergoing renovation during that period. Upon completion of the renovation works, we began paying rent again in March 2011.

Lease of operations space by Food More and SS Food Court from SS Supermarket

Food More has leased one (1) property since 2004, and SS Food Court has leased one (1) property since 2010, from SS Supermarket, for food court operations. Details of the leases are as follows:

Location TenantArea

(sq. ft.)

Monthly rental(excluding

GST) Lease term

19 Serangoon North Avenue 5 #02-03 Singapore 554913 (“SRN Food Court 1”)

Food More 8,107 18,000.00 1 November 2007 to 31 August 2011

19 Serangoon North Avenue 5 #02-01 Singapore 554913 (“SRN Food Court 2”)

SS Food Court 2,529 5,629.66 1 July 2010 to 31 August 2011

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Under the lease agreements, a proportionate amount of the utilities fees are also payable by SS Food Court and Food More to SS Supermarket. Details of the rent and utilities fees paid under the leases for the Period Under Review are as follows:

FY2008(S$)

FY2009(S$)

FY2010(S$)


Date(S$)

Rent and utilities fees for SRN Food Court 1

343,091 282,242 307,122 153,575

Rent and utilities fees for SRN Food Court 2

– – 48,036 47,983

Total amount of rent and utilities fees paid

343,091 282,242 355,158 201,558

As the monthly rental and utilities fees payable are comparable to the rental for similar spaces in the vicinity offered for rent by unrelated parties, the leases are on an arm’s length basis and on normal commercial terms.

Personal guarantees provided by our Directors

Our Executive Directors, Mr. Lim Hock Chee, Mr. Lim Hock Eng and Mr. Lim Hock Leng (collectively, the “Guarantors”), provided joint and several personal guarantees to OCBC Bank for (i) credit facilities of up to S$2 million for CMM Marketing; and (ii) a banker’s guarantee of up to S$6 million for SS Supermarket.

Details of these bank facilities for the Period Under Review are set out as follows:

Nature of facility Facility amount Interest rate, if applicable

Largest amount outstanding

for the Period Under Review

(S$’000)

Amount outstanding as

at the Latest Practicable Date

(S$’000)

Credit facilities for CMM Marketing

Up to S$2 million In accordance with OCBC Bank’s prevailing schedule of charges

– –

Banker’s guarantee for SS Supermarket

Up to S$6 million Not applicable 3,621 3,302

The provision of guarantees by the Guarantors are not on an arm’s length basis as no fee or compensation has been paid or is payable by us to the Guarantors for providing such security. Our Directors are of the view that this provision of guarantees is not prejudicial to the interests of our Group or our minority Shareholders.

Continuing related person transactions

Engagement by CMM Marketing of Tay Leong Hoe to provide meat-related services

Since 2006, Mr. Tay Leong Hoe, who is a brother-in-law of our Executive Directors, Mr. Lim Hock Chee, Mr. Lim Hock Eng, and Mr. Lim Hock Leng, has provided hog auction, slaughter and processing, transportation and delivery services to CMM Marketing.

The aggregate service fees paid by CMM Marketing to Mr. Tay for the Period Under Review are as follows:

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FY2008(S$)

FY2009(S$)

FY2010(S$)


Date(S$)

Aggregate service fees paid 191,576 116,179 134,033 63,040

The engagement is on an arm’s length basis and on normal commercial terms as the aggregate service fees payable are comparable to the fees for similar services offered by unrelated parties.

Review Procedures for Interested Person Transactions

Our Audit Committee, which comprises our Independent Directors and Non-Executive Director, will review all Interested Person Transactions on a quarterly basis to ensure that they are on normal commercial terms and are not prejudicial to the interests of our Group or our minority Shareholders.

To ensure that all future Interested Person Transactions are carried out on normal commercial terms and will not be prejudicial to the interests of our Group or our minority Shareholders, the following procedures will be implemented by our Group:-

(a) in case of purchasing any products or engaging any services from an Interested Person, two (2) other quotations from non-interested persons will be obtained for comparison to ensure that the interests of Shareholders are not disadvantaged. The purchase price or fee for services shall not be higher than the most competitive price or fee of the two (2) other quotations from non-interested persons. In determining the most competitive price or fee, all pertinent factors, including but not limited to quality, requirements, specifications, delivery time and track record will be taken into consideration;

(b) in case of selling any products or supplying any services to an Interested Person, the price or fee and terms of two (2) other successful transactions of a similar nature with non-interested persons shall be used as comparison to ensure that the interests of Shareholders are not disadvantaged. The price or fee for the supply of products or services shall not be lower than the lowest price or fee of the two (2) other successful transactions with non-interested persons;

(c) in case of renting properties from or to an Interested Person, appropriate steps will be taken to ensure that such rent is matched with prevailing market rates, including adopting measures such as making relevant enquiries with landlords of similar properties and obtaining suitable valuations, reports or reviews published by property agents (where necessary). The rent payable shall be based on the most competitive market rental rates of similar properties in terms of size and location, based on the results of the relevant enquiries;

(d) in case of transactions which involve payments on a reimbursement basis or at retail rates, appropriate steps will be taken to ensure that our Group determines on a monthly basis the relevant cost amounts or retail rates to pay or seek payment for, based on objective documentation such as tax invoices;

(e) where it is not possible to compare against the terms of other transactions with unrelated third parties and given that the products and/or services may be purchased only from an Interested Person, the Interested Person Transaction will be approved by our Group’s Lead Independent Director, Mr. Goh Yeow Tin, and our Executive Director, Mr. Tan Ling San, and the Finance Director or Chief Financial Officer or an equivalent of the relevant company in our Group, who has no interest in the transaction, in accordance with our Group’s usual business practices and policies. In determining the transaction price payable to the Interested Person for such products and/or service, factors such as, but not limited to, quantity, requirements and specifications will be taken into account; and

(f) in addition, we shall monitor all “Interested Person Transactions” entered into by us and categorise these transactions as follows:

(i) a Category 1 Interested Person Transaction is one where the value thereof is in excess of or equal to 3.0% of the NTA of our Group; and

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(ii) a Category 2 Interested Person Transaction is one where the value thereof is below 3.0% of the NTA of our Group.

All “Category 1 Interested Person Transactions” must be approved by our Audit Committee prior to entry whereas “Category 2 Interested Person Transactions” need not be approved by our Audit Committee prior to entry but shall be reviewed on a quarterly basis by our Audit Committee.

Our Audit Committee will review all Interested Person Transactions, if any, on a quarterly basis to ensure that they are carried out on normal commercial terms, are not prejudicial to the interests of our Group or our minority Shareholders and in accordance with the procedures outlined above. It will take into account all relevant non-quantitative factors. In the event that a member of our Audit Committee is interested in any such transaction, he will abstain from participating in the review and approval process in relation to that particular transaction.

Our Company shall prepare all the relevant information to assist our Audit Committee in its review and will keep a register to record all Interested Persons Transactions. The register shall also record the basis for entry into the transactions, including the quotations and other evidence obtained to support such basis and the procedures used to determine the terms of the transactions and whether the terms are normal commercial terms and not prejudicial to the interests of our minority Shareholders.

Disclosure will be made in our Company’s annual report of the aggregate value of Interested Person Transactions during the financial year under review and in the annual reports for the subsequent financial years of our Company.

In addition, our Audit Committee will include the review of Interested Person Transactions as part of the standard procedures while examining the adequacy of our internal controls. Our Board will also comply with the provisions in Chapter 9 of the Listing Manual in respect of all on-going and future Interested Person Transactions, and if required under the Listing Manual, the Companies Act or the Securities and Futures Act, we will seek our Shareholders’ approval for such transactions.

Potential Conflicts of Interests

Mr. Jong Voon Hoo, our Independent Director, currently serves as chief financial officer of Youcan Foods International Limited (“Youcan”). Youcan is primarily engaged in the development, manufacture and sales of frozen food and ice cream products. Previously, Youcan’s products were sold in only one of our Group’s stores, the New Upper Changi Supermarket, and sales of Youcan’s products constituted less than 5.0% of our Group’s total purchases for FY2008, FY2009 and FY2010. Sales of Youcan’s products to our Group were conducted by a local distributor, Mandarin Food Manufacturing Pte. Ltd. (the “Local Distributor”), which operates and functions independently of Youcan.

As at the Latest Practicable Date, none of our Group’s stores sell any Youcan products.

We believe there is currently no conflict of interests between Mr. Jong’s roles as chief financial officer of Youcan and independent director of our Group. Mr. Jong is primarily responsible for overseeing Youcan’s accounting and finance matters, and is not involved in Youcan’s business with the Local Distributor, which conducted the previous sales of Youcan’s products to our Group.

We believe that any potential conflicts of interest are addressed by the fiduciary obligations of our Directors, pursuant to which they are required to disclose any interests in respect of any contract, arrangement, or any other proposal whatsoever in which they have any personal material interest, directly or indirectly, or any actual or potential conflicts of interests. Upon such disclosure, such Director(s) will abstain from voting in respect of any such contract, arrangement, proposal, transaction or matter which the actual or potential conflicts of interests arise, unless and until the non-interested members of our Audit Committee has determined that no such conflicts of interest exist.

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Save as disclosed above and in this section entitled “Interested Person Transactions and Conflict of Interests” of this Prospectus:-

(a) none of our Directors, Key Executives, Controlling Shareholders or any of their Associates has had any interest, direct or indirect, in any material transactions to which our Company was or is to be a party;

(b) none of our Directors, Key Executives, Controlling Shareholders or any of their Associates has any interest, direct or indirect, in any company carrying on the same business or a similar trade which competes materially and directly with the existing business of our Group; and

(c) none of our Directors, Key Executives, Controlling Shareholders or any of their Associates has any interest, direct or indirect, in any company that is our customer or supplier of goods and services.

Save as disclosed in this Prospectus, none of our Directors, Key Executives, Controlling Shareholders or any of their Associates has any interest in any existing contract or arrangement which is significant in relation to the business of our Company and our Subsidiaries, taken as a whole.

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Board Practices

Our Board of Directors recognise the importance of corporate governance and the maintenance of high standards of accountability to our Shareholders. Our Board of Directors has formed three (3) committees: (a) the Nominating Committee; (b) the Remuneration Committee; and (c) the Audit Committee.

Term of Office

Each of our Directors was appointed a Director of our Group on the following dates:

Name Date

Lim Hock Chee 14 October 1983

Lim Hock Eng 14 October 1983

Lim Hock Leng 23 May 1994

Tan Ling San 12 October 2006

Goh Yeow Tin 22 June 2011

Jong Voon Hoo 22 June 2011

Francis Lee Fook Wah 22 June 2011

Lee Teck Leng, Robson 22 June 2011

Our Directors do not currently have a fixed term of office. At each annual general meeting, one-third of our Directors for the time being (or, if their number is not a multiple of three (3), the number nearest to but not less than one-third) shall retire from office by rotation. A retiring Director shall be eligible for re-election. The Directors to retire in every year shall be those who have been longest in office since their last re-election or appointment. All Directors (other than a Director holding office as Managing Director) shall retire from office at least once every three (3) years.

Nominating Committee

Our Nominating Committee comprises our Lead Independent Director, Mr. Goh Yeow Tin, our Independent Director, Mr. Francis Lee Fook Wah and our Non-Executive Director, Mr. Lee Teck Leng, Robson. The chairman of the Nominating Committee is Mr. Francis Lee Fook Wah. Our Nominating Committee has been set up to be responsible for the nomination of Directors (including Independent Directors of our Company) taking into consideration each Director’s contribution and performance. The Nominating Committee is also charged with the responsibility of determining annually whether a Director is independent, and deciding whether or not a Director is able to and has been adequately carrying out his duties as a Director.

Each member of our Nominating Committee shall abstain from voting on any resolution in respect of the assessment of his performance, independence or re-nomination as Director.

Remuneration Committee

Our Remuneration Committee comprises our Lead Independent Director, Mr. Goh Yeow Tin, our Independent Director, Mr. Jong Voon Hoo, and our Non-Executive Director, Mr. Lee Teck Leng, Robson. The chairman of the Remuneration Committee is Mr. Goh Yeow Tin. Our Remuneration Committee will recommend to our Board of Directors a framework of remuneration for our Directors and Key Executives, and determine specific remuneration packages for each of our Executive Directors and our CEO.

The recommendations of our Remuneration Committee shall be submitted for endorsement by our entire Board of Directors. All aspects of remuneration, including but not limited to Directors’ fees, salaries, allowances and bonuses, options and benefits in kind shall be covered by our Remuneration Committee. Each member of the Remuneration Committee shall abstain from voting on any resolutions in respect of his remuneration package.

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CORPORATE GOVERNANCE

The total remuneration of the employees who are related to our Directors will be reviewed annually by our Remuneration Committee to ensure that their remuneration packages are in line with our staff remuneration guidelines and commensurate with their respective job scopes and level of responsibilities. In the event that a member of our Remuneration Committee is related to the employee under review, he will abstain from such review.

Audit Committee

Our Audit Committee comprises our Lead Independent Director, Mr. Goh Yeow Tin, our Independent Directors, Mr. Jong Voon Hoo and Mr. Francis Lee Fook Wah, and our Non-Executive Director, Mr. Lee Teck Leng, Robson. The chairman of the Audit Committee is Mr. Jong Voon Hoo. Our Directors recognise the importance of corporate governance and the offering of high standards of accountability to our Shareholders.

Our Audit Committee will assist our Board of Directors in discharging their responsibility to safeguard our assets, maintain adequate accounting records, and develop and maintain effective systems of internal control, with the overall objective of ensuring that our management creates and maintains an effective control environment in our Company. Our Audit Committee will provide a channel of communication between our Board of Directors, our management and our external auditors on matters relating to audit.

The Audit Committee shall meet periodically to perform the following functions:

(a) review the audit plans of our external auditors and internal auditors, including the results of our external and internal auditors’ review and evaluation of our system of internal accounting controls;

(b) review the annual consolidated financial statements and the external auditors’ report on such financial statements, and discuss any significant adjustments, major risk areas, changes in accounting policies, compliance with SFRS, concerns and issues arising from their audits including any matters which the auditors may wish to discuss in the absence of the management, where necessary, before submission to our Board of Directors for approval;

(c) review the scope and results of the internal audit procedures;

(d) consider the appointment or re-appointment of the external auditors;

(e) review the cooperation given by our officers to external auditors;

(f) review and approve any Interested Person Transactions, related person transactions and/or potential conflict of interests;

(g) monitor the undertakings described under the section entitled “Interested Person Transactions and Conflict of Interests”, if any;

(h) undertake such other reviews and projects as may be requested by our Board of Directors, and will report to our Board of Directors its findings from time to time on matters arising and requiring the attention of our Audit Committee; and

(i) generally undertake such other functions and duties as may be required by law or the Listing Manual, or by such amendments as may be made thereto from time to time.

The Audit Committee shall review and monitor our Group’s implementation of the recommendations provided by (i) KPMG LLP in its letter dated 11 May 2011, relating to the audit of our Group’s combined financial statements; and (ii) by PwC in its report dated 16 May 2011, relating to the internal controls review of our Group’s retail cash, inventory and procurement management processes. PwC’s engagement will end in the second half of 2011.

Our Board will thereafter appoint a reputable firm of independent Singapore-certified practicing accountants, to review and assess our Group’s system of internal controls on an annual basis (the “Internal Auditor”). Such appointment of the Internal Auditor will continue for as long as our Audit Committee deems necessary.

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In addition, our Audit Committee shall communicate and review the findings of internal investigation into matters where there is any suspected fraud or irregularity or failure of internal controls or infringement of any law, rule or regulation which has or is likely to have a material impact on our Group’s operating results and/or financial position. Each member of the Audit Committee shall abstain from voting on any resolutions and making any recommendations and/or participating in any deliberations of our Audit Committee in respect of matters in which he is interested.

Our Audit Committee’s views on Wong Soong Kit’s and Lim Chee Wee Ryan’s suitability as Finance Director and Chief Financial Officer respectively

Our Audit Committee has reviewed Wong Soong Kit’s and Lim Chee Wee Ryan’s curricula vitae and has also interviewed Mr. Wong and Mr. Lim.

Our Audit Committee noted that Mr. Wong has approximately 37 years of relevant experience in finance work and is a Chartered Accountant and Fellow of the Association of Chartered Certified Accountants (ACCA)(UK), as well as a Fellow of the Institute of Certified Public Accountants of Singapore. Our Audit Committee has made reasonable enquiries into Mr. Wong’s past working experience and has not been made aware of any matter that would raise questions about Mr. Wong’s suitability for the position of Finance Director.

Our Audit Committee noted that Mr. Lim holds a Bachelor of Accountancy degree from Nanyang Technological University of Singapore and is a Certified Public Accountant (non-practising) and a member of the Institute of Certified Public Accountants of Singapore, as well as a Certified Internal Auditor and member of the Institute of Internal Auditors. Mr. Lim has approximately 13 years of relevant experience in finance and audit work. Our Audit Committee has made reasonable enquiries into Mr. Lim’s past working experience and, in the course of preparing for the listing of our Company on the mainboard of the SGX-ST, observed and noted Mr. Lim’s contributions at various occasions, discussions and meetings. In the course of such interactions, our Audit Committee is of the view that Mr. Lim has demonstrated a strong and clear understanding of our Group’s businesses and familiarity with the finance and accounting functions of our Group, and our Audit Committee has not been made aware of any matter that would raise questions about Mr. Lim’s suitability for the position of Chief Financial Officer.

Our Audit Committee is of the view that each of Mr. Wong and Mr. Lim has demonstrated sufficient and adequate knowledge and experience in accounting and financial reporting for listed companies, in particular, in relation to the Singapore Financial Reporting Standards and the related listing requirements in Singapore.

Having considered the foregoing as well as the qualifications and past working experience of each of Mr. Wong and Mr. Lim (more fully described in the section entitled “Directors, Management and Staff” of this Prospectus), our Audit Committee is of the view that Mr. Wong is suitable for the position of Finance Director, and Mr. Lim is suitable for the position of Chief Financial Officer, of our Group.

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SHARE CAPITAL

1. As at the date of this Prospectus, there is only one (1) class of shares in the capital of our Company, being ordinary shares in the share capital of our Company. There is no founder, management or deferred share. Our existing Shares do not carry voting rights which are different from the New Shares. The rights of and privileges attached to the Shares are stated in the Articles of Association of our Company.

2. Save as disclosed below and in the section entitled “Share Capital and Shareholders” of this Prospectus, there were no changes in the issued and paid-up share capital of our Company or our Subsidiaries within the three (3) years preceding the Latest Practicable Date:

CMM MarketingChange in number of shares in CMM Marketing

Resultant number of shares in CMM Marketing

Resultant issued and paid-up capital of CMM Marketing (S$)

Capitalisation of accumulated profi ts

Issue of 14,000,000 shares

15,000,000 15,000,000

Capital reduction No change 15,000,000 5,000,000

SS SupermarketChange in number of shares in SS Supermarket

Resultant number of shares in SS Supermarket

Resultant issued and paid-up capital of SS Supermarket ($)

Capitalisation of accumulated profi ts

Issue of 14,000,000 shares

15,000,000 15,000,000

Capital reduction No change 15,000,000 5,000,000

SS Malaysia

Change in number of shares in SS Malaysia

Resultant number of shares in SS Malaysia

Resultant issued and paid-up capital of SS Malaysia (RM)

Issuance of new shares Issue of two (2) shares Six (6) 6.00

3. Save as disclosed in paragraph 2 above and in the section entitled “General Information of our Group – Restructuring Exercise” of this Prospectus, no shares in or debentures of our Company or our Subsidiaries has been issued, or is proposed to be issued, as fully or partly paid-up for cash, or for a consideration other than cash, during the three (3) years preceding the Latest Practicable Date.

4. No person has been granted, or is entitled to be granted, an option to subscribe for shares in, or debentures of our Company or our Subsidiaries.

ARTICLES OF ASSOCIATION

5. An extract of our articles of association relating to, inter alia, the transferability of shares, Directors’ voting rights, borrowing powers of Directors and dividend rights are set out in Appendix C entitled “Summary of Memorandum and Articles of Association of our Company” of this Prospectus. The articles of association of our Company are available for inspection at our registered office in accordance with the section entitled “Other General Information - Documents for Inspection” in this section of this Prospectus.

144

OTHER GENERAL INFORMATION

MATERIAL CONTRACTS

6. The following contracts, not being contracts entered into in the ordinary course of business, to which our Company or any member of our Group is a party, for the period of two (2) years before the date of lodgement of this Prospectus with the Authority, and are or may be material:

(a) the Property Sale Agreements; and

(b) the Share Swap Agreement

FINANCIAL CONDITION AND OPERATIONS OF OUR GROUP

7. Save as disclosed in this Prospectus, our Directors are not aware of any event which has occurred since the end of FY2010, being 1 January 2011 to the Latest Practicable Date which may have a material effect on the financial position and results of our Group.

8. Save as disclosed in this Prospectus, our financial condition and operations are not likely to be affected by any of the following:

(a) known trends, uncertainties, demands, commitments or events that will result or are reasonably likely to result in our Group’s liquidity increasing or decreasing in any material way;

(b) material commitments for capital expenditure;

(c) unusual or infrequent events or transactions or any significant economic changes that materially affect the amount of reported income from operations; and

(d) known trends, uncertainties, demands, commitments or events that have had or that our Group expects to have a material favourable or unfavourable impact on revenues or operating income.

ORDER BOOK

9. Due to the nature of our business, we do not maintain an order book. We generate our revenues primarily through sales from our grocery retailing business and related operations.

LITIGATION

10. Save as disclosed below, to the best of our knowledge and belief, having made all reasonable enquiries, neither our Company nor our Subsidiaries is engaged in any litigation or arbitration either as plaintiff or defendant and our Directors have no knowledge and are not aware of any litigation or arbitration which are pending or threatened against our Company or our Subsidiaries or of any facts likely to give rise to any such litigation or arbitration, in respect of any claims or amounts which may have or had during the 12 months immediately before the date of lodgement of this Prospectus, a material effect on our Group’s profitability or financial position.

(a) as at the Latest Practicable Date, SS Supermarket is currently the plaintiff in a litigation dispute where it is claiming the return of a security deposit paid in relation to a tenancy agreement. The suit was initiated in 2009 and the reply and defence to counterclaim was filed on 9 December 2010. This statement was prepared by Yeo Marini & Partners for the purpose of incorporation in this Prospectus. Based on the advice of SS Supermarket’s legal counsel Yeo Marini & Partners regarding the merits of SS Supermarket’s claim for approximately S$452,301, our Executive Directors do not expect this matter to have a material effect on our Group’s financial position or results.

(b) as at the Latest Practicable Date, SS Supermarket is currently the defendant in a litigation dispute regarding the engagement of certain security guards previously employed by the plaintiff in the suit. The suit was initiated in 2010 and the defendants’ defence was filed on 21 June 2010. This statement was prepared by Yeo Marini & Partners for the purpose of

145


incorporation in this Prospectus. Based on the advice of SS Supermarket’s legal counsel Yeo Marini & Partners regarding the merits of SS Supermarket’s defence against the plaintiff’s claim of approximately S$15,000, our Executive Directors do not expect this matter to have a material effect on our Group’s financial position or results.

(c) as at the Latest Practicable Date, SS Supermarket is currently the plaintiff in a litigation dispute regarding certain outstanding rental payments. The suit was initiated in 2010 and default judgment was given in January 2011 for SS Supermarket’s claim for S$28,130 plus costs and interest. Based on the foregoing, our Executive Directors do not expect this matter to have a material effect on our Group’s financial position or results.

GENERAL

11. No Shares will be allotted and/or allocated or issued on the basis of this Prospectus later than six (6) months after the date of registration of this Prospectus.

12. The time of opening of the Application List is stated in the section entitled “Details of the Invitation” of this Prospectus.

13. The amount payable on application is S$0.33 for each Invitation Share.

14. There has been no previous issue of Shares by our Company or offer for sale of our Shares to the public within the two (2) years preceding the date of registration of this Prospectus.

15. In the opinion of our Directors, there are no minimum amounts which must be raised by the issue of the Invitation Shares. Although no minimum amount must be raised by the Invitation, such amounts which are proposed to be provided out of the proceeds of the Invitation Shares shall, in the event the Invitation is cancelled, be provided out of the existing banking facilities and/or internal funds generated from operations.

16. No amount of cash or securities or benefit has been or is intended to be paid or given to any promoter within the two (2) years preceding the date of lodgement of this Prospectus or is proposed or intended to be paid or given to any promoter at any time in respect of this Invitation.

17. Application monies received by our Company in respect of successful applications (including successfully balloted applications which are subsequently rejected) will be placed in a separate non-interest bearing account with the Receiving Bank. In the ordinary course of its business, the Receiving Bank will deploy these monies in the interbank money market. Our Company and the Receiving Bank have agreed that our Company will not receive any revenue earned by the Receiving Bank from the deployment of such monies in the interbank money market. Any refund of all or part of the application monies to unsuccessful or partially successful applicants will be made without any interest or any share of revenue or any other benefit arising therefrom.

18. Details, including the names, addresses and professional qualifications (including membership in a professional body) of the auditors of our Company since the incorporation of our Company are as follows:

Name, Membership and Address Professional Body

Partner-in-charge/Professional qualifi cation

KPMG LLPPublic Accountants and

Certifi ed Public Accountants16 Raffl es Quay, #22-00

Hong Leong BuildingSingapore 048581

Institute of Certifi ed Public Accountants of Singapore

Low Gin Cheng Gerald/ a practising member of the

Institute of Certifi ed Public Accountants of Singapore

19. We currently have no intention of changing our auditors after the admission of our Company to the Official List of the SGX-ST.

146


20. There was no public take-over, by a third party in respect of our Shares or by the Company in respect of the shares of another corporation or the units of a business trust, which occurred between 1 January 2010 and the Latest Practicable Date.

MANAGEMENT AND UNDERWRITING AGREEMENT AND PLACEMENT AGREEMENT

21. Pursuant to the management and underwriting agreement (the “Management and Underwriting Agreement”) dated 4 August 2011 between our Company, the Vendors and the Issue Manager and Underwriter, our Company appointed the Issue Manager and Underwriter to manage the Invitation, and the Underwriter has agreed to underwrite the Offer Shares for a commission of 2.5% of the Issue Price for each Offer Share, payable by our Company and the Vendors, for subscribing or for procuring subscribers and/or purchasers for any Shares not subscribed for pursuant to the Invitation and will pay or procure payment to our Company for such Offer Shares.

22. Brokerage payable for the Offer Shares will be paid by our Company and the Vendors to members of the SGX-ST, merchant banks and members of the Association of Banks in Singapore in respect of accepted applications made on Application Forms bearing their respective stamps, or to Participating Banks in respect of successful applications made through Electronic Applications at the rate of 0.25% (and in the case of DBS Bank, 0.5%) of the Issue Price for each Offer Share in the proportion in which the number of Offer Shares offered by each of them pursuant to the Invitation bears to the total number of Offer Shares. In addition, DBS Bank levies a minimum brokerage of S$10,000 that will be paid by our Company.

23. Pursuant to the placement agreement (the “Placement Agreement”) dated 4 August 2011 between our Company, the Vendors and the Placement Agents, the Placement Agents have agreed to subscribe for and/or procure subscribers for the Placement Shares for a placement commission of 2.5% of the Issue Price for each Placement Share, payable by our Company pursuant to the Invitation. The Placement Agents may, at their absolute discretion, appoint one (1) or more sub-placement agents for the Placement Shares.

24. Subscribers and/or purchasers of the Placement Shares may be required to pay a commission of up to 1% of the Issue Price to the Placement Agents or their sub-placement agents (including the relevant Goods and Services Tax, if applicable).

25. The Management and Underwriting Agreement may be terminated by the Issue Manager and Underwriter at any time on or before the close of the Application List on the occurrence of certain events. These events include any changes in national or international monetary, financial, political or economic conditions which result or are likely to result in, inter alia, the conditions in the Singapore stock market being materially and adversely affected or the success of the Invitation being materially prejudiced.

26. The Placement Agreement is conditional upon the Management and Underwriting Agreement not having been terminated or rescinded pursuant to the provisions of the Management and Underwriting Agreement and may be terminated on the occurrence of certain events, including those specified in the foregoing paragraph.

27. In the event that the Management and Underwriting Agreement is terminated, our Company reserves the right, at our absolute discretion, to cancel the Invitation.

28. Save as disclosed in the section entitled “Other General Information – Management and Underwriting Agreement and Placement Agreement” of this Prospectus, no commission, discount or brokerage has been paid or other special terms granted within the preceding two (2) years or is payable to any Director, promoter, expert, proposed Director or any other person for subscribing or agreeing to subscribe or procuring or agreeing to procure subscription for any Shares in or debentures of our Company.

29. Other than the Management and Underwriting Agreement and the Placement Agreement, where OCBC Bank was appointed as the Issue Manager, Underwriter and Placement Agent, and save as disclosed in the section entitled “Other General Information - Interests Experts and Underwriters or Financial Advisers” of this Prospectus, we do not have any material relationship with the Issue Manager, Underwriter and Placement Agent.

147


INTERESTS OF EXPERTS AND UNDERWRITERS OR FINANCIAL ADVISERS

30. Interests of Experts

No expert is employed on a contingent basis by our Company or our Subsidiaries, has a material interest, whether direct or indirect, in the shares of our Company or our Subsidiaries, or has a material economic interest, whether direct or indirect, in our Company, including in the success of the Invitation.

31. Interests of Underwriters or Financial Advisers

In the reasonable opinion of our Directors, the Underwriter, OCBC Bank, does not have a material relationship with our Company save as below:-

(a) OCBC Bank is the Issue Manager, Underwriter and the Placement Agent of the Invitation;

(b) OCBC Bank is one of the principal bankers of our Company; and

(c) OCBC Bank is the Receiving Bank of the Invitation.

32. CONSENTS

(a) KPMG LLP has given and has not withdrawn its written consent to the issue of this Prospectus with the inclusion herein of the independent auditors’ report on the Combined Financial Statements for the Financial Years ended 31 December 2008, 2009 and 2010 and the Unaudited Proforma Financial Information for the Financial Year ended 31 December 2010 in the form and context in which they are respectively included in this Prospectus and references to their name in the form and context in which they appear in this Prospectus and to act in such capacity in relation to this Prospectus.

(b) The Issue Manager, Underwriter and Placement Agent, the Solicitors to the Invitation and Legal Advisers to the Company on Singapore Law, the Solicitors to the Issue Manager, Underwriter and Placement Agent, the Legal Advisers to the Company on Malaysian Law, the Share Registrar, the Receiving Bank, the Principal Bankers and PricewaterhouseCoopers LLP have each given and not withdrawn their respective written consents to the issue of this Prospectus with the inclusion of their respective names in the form and context in which they appear in the Prospectus and to act in such respective capacities in relation to this Prospectus.

(c) Frost & Sullivan (S) Pte Ltd has given and has not withdrawn its written consent to the issue of this Prospectus with the inclusion herein of the statements in the section entitled “Industry Overview” of this Prospectus, and references to its name in the form and context in which they appear in this Prospectus, and to act in such capacity in relation to this Prospectus.

(d) Yeo Marini & Partners of 133 New Bridge Road, #15-04, Chinatown Point, Singapore 059413, who is the legal counsel of SS Supermarket for the matters described in paragraphs 10(a) and (b) in the section entitled “Other General Information – Litigation” of this Prospectus, has given and has not withdrawn its written consent to the issue of this Prospectus with the inclusion therein of:-

(i) its name and all references to its name; and

(ii) the statements prepared by it set out in paragraphs 10(a) and paragraph 10(b) in the section entitled “Other General Information – Litigation” of this Prospectus,

in the form and context in which they appear in the Prospectus and to act in such capacity in relation to this Prospectus.

148


RESPONSIBILITY STATEMENT BY OUR DIRECTORS AND VENDORS

33. The Prospectus has been reviewed and approved by our Directors and the Vendors and they collectively and individually accept full responsibility for the truth and accuracy of the information given herein and confirm, having made all reasonable enquiries, that to the best of their knowledge and belief, there are no other facts the omission of which would make any statement herein misleading, and that this Prospectus constitutes full and true disclosure of all material facts about the Invitation and our Company.

DOCUMENTS FOR INSPECTION

34. The following documents may be inspected at our registered office at 6 Mandai Link, Singapore 728652 during normal business hours for a period of six (6) months from the date of registration of this Prospectus:

(a) the Memorandum and Articles of Association of our Company;

(b) the “Independent Auditors’ Report and the Combined Financial Statements for the Financial Years Ended 31 December 2008, 2009 and 2010” set out in Appendix A of this Prospectus;

(c) the “Independent Auditors’ Report and the Proforma Financial Information for the Financial Year Ended 31 December 2010” set out in Appendix B of this Prospectus;

(d) the material contracts referred to in the section entitled “Other General Information” of this Prospectus;

(e) the letters of consent referred to in the section entitled “Other General Information” of this Prospectus;

(f) the CSI Report reference to in the section entitled “Industry Overview” of this Prospectus;

(g) the Service Agreements referred to in the section entitled “Directors, Management and Staff – Service Agreements” of this Prospectus; and

(h) the audited financial statements of our Subsidiaries (where available) for the financial years ended 31 December 2008, 2009 and 2010.

149


A-1

INDEPENDENT AUDITORS’ REPORT

The Board of DirectorsSheng Siong Group Limited3000 Marsiling RoadSingapore 739108

We have audited the accompanying combined financial statements of Sheng Siong Group Limited (the “Company”) and its subsidiaries (collectively, the “Group”), which comprise the combined balance sheets as at 31 December 2008, 2009 and 2010, and its combined statements of comprehensive income, combined statements of changes in equity and combined statements of cash flows for each year then ended 31 December 2008, 2009 and 2010, and a summary of significant accounting policies and other explanatory notes, as set out on pages A-1 to A-34.

Management’s responsibility for the financial statements

Management is responsible for the preparation of financial statements that give a true and fair view in accordance with Singapore Financial Reporting Standards, and for devising and maintaining a system of internal accounting controls sufficient to provide a reasonable assurance that assets are safeguarded against loss from unauthorised use or disposition; and transactions are properly authorised and that they are recorded as necessary to permit the preparation of true and fair profit and loss accounts and balance sheets and to maintain accountability of assets.

Auditors’ Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with Singapore Standards on Auditing. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the combined financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation of financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion, the combined financial statements of the Group are properly drawn up in accordance with Singapore Financial Reporting Standards to present fairly, in all material respects, the combined state of affairs of the Group as at 31 December 2008, 2009 and 2010, and the combined financial performance, changes in equity and cash flows of the Group for the year ended on that dates.

APPENDIX A: INDEPENDENT AUDITORS’ REPORT AND THE COMBINED FINANCIAL STATEMENTS FOR THE FINANCIAL YEARS ENDED

31 DECEMBER 2008, 2009 AND 2010

A-2

This report has been prepared for the inclusion in the Prospectus of the Company in connection with the Initial Public Offering of the shares of the Company on the mainboard of the Singapore Exchange Securities Trading Limited. No audited combined financial statements of the Group have been prepared for any period subsequent to 31 December 2010.

KPMG LLPPublic Accountants andCertified Public Accountants

Singapore4 August 2011

Low Gin Cheng GeraldPartner


31 DECEMBER 2008, 2009 AND 2010

A-3

SHENG SIONG GROUP LIMITED AND ITS SUBSIDIARIESCOMBINED BALANCE SHEETS

AS AT 31 DECEMBER 2008, 2009 AND 2010

Note 2008 2009 2010$ $ $

Non-current assetsProperty, plant and equipment 4 18,647,359 24,359,847 58,327,724Investment properties 5 7,261,858 – –

25,909,217 24,359,847 58,327,724

Current assetsInventories 6 25,763,712 24,907,537 26,404,843Trade and other receivables 7 12,956,460 42,458,244 4,715,074Other investments 8 2,877,416 72,535,961 –Cash and cash equivalents 9 86,117,470 39,081,510 85,885,498

127,715,058 178,983,252 117,005,415

Total assets 153,624,275 203,343,099 175,333,139

Equity attributable to equity holders of the CompanyShare capital 10 2,000,002 16,000,002 30,000,006Fair value reserve 11 – 13,437,223 –Accumulated profits 64,851,272 84,431,441 33,881,304Foreign currency translation reserve 80 130 91

Total equity 66,851,354 113,868,796 63,881,401

Non-current liabilitiesFinancial liabilities 14 – – 19,090,651Deferred tax liabilities 12 602,738 728,834 608,069

602,738 728,834 19,698,720

Current liabilitiesTrade and other payables 13 76,303,638 80,545,370 81,461,535Financial liabilities 14 7,781 – 3,201,312Current tax payable 9,858,764 8,200,099 7,090,171

86,170,183 88,745,469 91,753,018

Total liabilities 86,772,921 89,474,303 111,451,738

Total equity and liabilities 153,624,275 203,343,099 175,333,139

The accompanying notes form an integral part of these financial statements.


31 DECEMBER 2008, 2009 AND 2010

A-4

SHENG SIONG GROUP LIMITED AND ITS SUBSIDIARIESCOMBINED STATEMENTS OF COMPREHENSIVE INCOME FOR THE FINANCIAL YEARS

ENDED 31 DECEMBER 2008, 2009 AND 2010

Note 2008 2009 2010$ $ $

Revenue 15 610,160,052 625,342,848 628,432,157

Cost of sales (496,004,373) (496,982,150) (491,675,483)

Gross profit 114,155,679 128,360,698 136,756,674

Other income 5,572,469 12,929,733 15,917,921

Distribution expenses (4,533,808) (4,317,969) (4,372,119)

Administrative expenses (88,383,090) (96,309,744) (98,314,145)

Other expenses (952,802) (974,519) (1,283,434)

Results from operating activities 25,858,448 39,688,199 48,704,897

Finance income 730,160 183,934 25,359Finance expenses (13,720) (1,666) –

Net finance income 716,440 182,268 25,359

Profit before income tax 26,574,888 39,870,467 48,730,256

Income tax expense 16 (6,002,178) (6,290,298) (6,095,450)

Profit from continuing operations 20,572,710 33,580,169 42,634,806

Discontinued operationsProfit from discontinued operations, net of tax 17 – – –

Profit for the year 18 20,572,710 33,580,169 42,634,806

Other comprehensive incomeForeign currency translation differences for foreign

operations80 50 (39)

Net change in fair value of other investment – 13,437,223 –Net change in fair value of other investment transferred

to profit or loss– – (13,437,223)

Total comprehensive income 20,572,790 47,017,442 29,197,544

Earnings per share

Basic earnings per share (cents):- 19- continuing operations 0.69 1.12 1.42- discontinued operations – – –

Diluted earnings per share (cents):- 19- continuing operations 0.69 1.12 1.42- discontinued operations – – –



31 DECEMBER 2008, 2009 AND 2010

A-5

SHENG SIONG GROUP LIMITED AND ITS SUBSIDIARIESCOMBINED STATEMENTS OF CHANGES IN EQUITY FOR THE FINANCIAL

YEARS ENDED 31 DECEMBER 2008, 2009 AND 2010

Attributable to equity holders of the Company

Sharecapital

Fair valuereserve

Accumulated profits

Foreign currency

translation reserve

Totalequity

$ $ $ $ $

At 1 December 2008 2,000,000 – 44,278,562 – 46,278,562

Total comprehensive income for the yearProfit for the year – – 20,572,710 – 20,572,710Other comprehensive income:Foreign currency translation differences for

foreign operations – – – 80 80

Total comprehensive income for the year – – 20,572,710 80 20,572,790Transactions with owners, recorded

directly in equity:Contributions by and distributions to

ownersIssuance of share capital 2 – – – 2

Total transactions with owners 2 – – – 2

At 31 December 2008 2,000,002 – 64,851,272 80 66,851,354


foreign operations – – – 50 50Net change in fair value of other investment – 13,437,223 – – 13,437,223

Total comprehensive income for the year – 13,437,223 33,580,169 50 47,017,442Transactions with owners, recorded


ownersIssuance of share capital by way of

capitalisation of accumulated profits 14,000,000 – (14,000,000) – –

Total transactions with owners 14,000,000 – (14,000,000) – –

At 31 December 2009 16,000,002 13,437,223 84,431,441 130 113,868,796



31 DECEMBER 2008, 2009 AND 2010

A-6

Attributable to equity holders of the Company

Sharecapital

Fair valuereserve

Accumulated profits

Foreign currency

translation reserve

Totalequity

$ $ $ $ $


foreign operations – – – (39) (39)Net change in fair value of other investment

transferred to profit or loss – (13,437,223) – – (13,437,223)

Total comprehensive income for the year – (13,437,223) 42,634,806 (39) 29,197,544Transactions with owners, recorded


owners

Issuance of dividend – – (79,184,943) – (79,184,943)Issuance of share capital by way of

capitalisation of accumulated profits 14,000,000 – (14,000,000) – –Issuance of share capital 4 – – – 4

Total transactions with owners 14,000,004 – (93,184,943) – (79,184,939)

At 31 December 2010 30,000,006 – 33,881,304 91 63,881,401



31 DECEMBER 2008, 2009 AND 2010

A-7

COMBINED STATEMENTS OF CASHFLOWS FOR THE FINANCIALYEARS ENDED 31 DECEMBER 2008, 2009 AND 2010

Note 2008 2009 2010$ $ $

Operating activitiesProfit for the year 20,572,710 33,580,169 42,634,806Adjustments for:Depreciation of property, plant and equipment 4 4,889,680 4,537,065 4,248,717Depreciation of investment properties 5 84,322 49,188 –Loss on disposal of property, plant and equipment 74,168 47,428 103,473Gain on disposal of investment properties – (317,320) – Gain on disposal of other investment – (3,097,996) (9,412,517)Gain on deemed disposal of other investment through

the declaration of dividend in specie – – (152,886)Change in fair value of preference shares held for

trading 140,000 – –Net change in fair value of other investment 1,584 – –Unrealised exchange loss/(gain) 7,217 (15,093) (10,548)Dividend income – (858,796) (286,963)Interest income (730,160) (183,934) (25,359)Interest expense 13,720 1,666 –Income tax expense 6,002,178 6,290,298 6,095,450

31,055,419 40,032,675 43,194,173Changes in working capital:Inventories (3,614,738) 856,175 (1,497,306)Trade and other receivables (5,613,993) 3,700,730 1,067,384Trade and other payables 4,573,874 16,842,484 (1,409,160)

Cash generated from operations 26,400,562 61,432,064 41,355,091Income taxes paid (3,430,809) (7,822,867) (7,326,143)

Cash flows from operating activities 22,969,753 53,609,197 34,028,948

Investing activitiesProceeds from disposal of property, plant and

equipment 104,433 5,711,913 70,994Proceeds from disposal of investment properties – 7,529,990 –Proceeds from disposal of other investment – 10,269,020 35,721,912Proceeds from early redemption of other investment – 1,020,000 –Purchase of property, plant and equipment (2,672,376) (16,008,894) (38,391,061)Purchase of other investment (3,019,000) (64,412,346) (5,004,205)Dividends received – 858,796 286,963Interest received 730,160 183,934 25,359Disposal of discontinued operations, net of cash

disposed 17 (1,306,536) – –

Cash flows used in investing activities (6,163,319) (54,847,587) (7,290,038)



31 DECEMBER 2008, 2009 AND 2010

A-8

2008 2009 2010$ $ $

Financing activitiesProceeds from bank loan – – 22,291,963Non-trade amounts due from affiliated companies 1,789,099 (33,465,404) 36,675,786Non-trade amounts due to affiliated companies 3,211,696 (5,678,569) (136,853)Non-trade amounts due from directors – 262,890 –Non-trade amounts due to directors 5,759,228 (6,925,811) 2,462,178 Proceeds from issuance of ordinary shares 2 – 4Repayments of borrowings or finance lease liabilities (73,784) (7,781) – Dividend paid – – (41,238,509)Interest paid (13,720) (1,666) –

Cash flows from/(used in) financing activities 10,672,521 (45,816,341) 20,054,569

Net increase/(decrease) in cash and cash equivalents 27,478,955 (47,054,731) 46,793,479

Cash and cash equivalents at beginning of the year 58,645,652 86,117,470 39,081,510Effect of exchange rate changes on balances held in

foreign currencies (7,137) 18,771 10,509

Cash and cash equivalents at end of the year 86,117,470 39,081,510 85,885,498

Significant non-cash transaction

During the year ended 31 December 2010, the Group distributed partially the available-for-sale equity securities of $37,946,434 to the owners of the Group in the form of dividend in specie.



31 DECEMBER 2008, 2009 AND 2010

A-9

SHENG SIONG GROUP LIMITED AND ITS SUBSIDIARIESNOTES TO THE COMBINED FINANCIAL STATEMENTS FOR THE FINANCIAL

YEARS ENDED 31 DECEMBER 2008, 2009 AND 2010

These notes form an integral part of the financial statements.

1 BUSINESS AND ORGANISATION

1.1 Introduction

The combined financial statements of Sheng Siong Group Limited (the “Company”) and its subsidiaries (together referred to as the “Group” and individually as “Group entities”) have been prepared in accordance with the principles and the accounting policies set out in notes 2 and 3 for inclusion in the Prospectus of Sheng Siong Group Limited to be issued by the Company.

These combined financial statements of the Group were authorised for issue by the directors of the Company on 4 August 2011.

1.2 The Company

The Company was incorporated as a private limited company in the Republic of Singapore on 10 November 2010 under the name of Sheng Siong Group Pte Ltd (“SS Group Pte Ltd”) and has its registered address at 3000 Marsiling Road, CMM Building, Singapore 739108. Subsequently, on 4 July 2011, the Company was converted into a public company and changed its name to Sheng Siong Group Limited.

The principal activities of the Company are those of an investment holding company. The principal activities of the subsidiaries are set out in note 1.4 to the financial statements.

1.3 The restructuring exercise

Prior to the restructuring exercise, the subsidiaries of the Group, Sheng Siong Supermarket Pte Ltd (“SS Supermarket”), CMM Marketing Management Pte Ltd (“CMM Marketing”) and Sheng Siong Supermarket (Malaysia) Sdn. Bhd. (“SS Malaysia”) (collectively known as the “Subsidiaries”) were separate legal entities with common shareholders.

Pursuant to a group restructuring (the “Restructuring”) in preparation for the proposed listing of the Company on the Singapore Exchange Securities Trading Limited (“Singapore Exchange”), the Company underwent a Restructuring (see note 24).

The Subsidiaries that took part in the Restructuring were collectively controlled by Mr Lim Hock Eng, Mr Lim Hock Chee and Mr Lim Hock Leng (referred to as “the controlling equity holders”) before and after the Restructuring. Consequently, there was a continuation of the risks and benefits to the controlling equity holders. Therefore, this is considered a business combination under common control, and has been accounted for as a combination of business under common control, in a manner similar to the “pooling of interest” method. Such a manner of presentation reflects the economic substance of the combining companies, which were under common control throughout the relevant period, as a single economic enterprise, although the legal parent-subsidiary relationships were not established until after the balance sheet date. The net assets of the combining companies are combined using the existing book values from the controlling equity holders’ perspective.

1.4 Subsidiaries

For the purposes of the combined financial statements, the subsidiaries of the Group consist of those companies under common control during the financial years ended 31 December 2008, 2009 and 2010.


31 DECEMBER 2008, 2009 AND 2010

A-10

The combined financial statements of the Group have been prepared to reflect the operations of the Company and the subsidiaries as a single economic enterprise for the years ended 31 December 2008, 2009 and 2010.

As at 31 December 2008, 2009 and 2010, the subsidiaries of the Group are as follows:

Name of company Principal activitiesPlace of

incorporationEffective equity held

by the Group

2008 2009 2010% % %

Direct subsidiaries

SS Supermarket Supermarket operations Singapore 100 100 100

CMM Marketing Trade of general and wholesale importers and exporters

Singapore 100 100 100

SS Malaysia Dormant Malaysia 100 100 100

1.5 Auditors

KPMG LLP is the auditor of all significant Singapore-incorporated subsidiaries for the financial years ended 31 December 2008, 2009 and 2010. For this purpose, a subsidiary is considered significant as defined under the Singapore Exchange Limited Listing Manual if its net tangible assets represent 20% or more of the Group’s combined net tangible assets, or if its pre-tax profits account for 20% or more of the Group’s combined pre-tax profits.

The statutory financial year end of SS Supermarket and CMM Marketing is 31 December. The financial statements for the financial years ended 31 December 2008, 2009 and 2010 have been prepared in accordance with the Singapore Financial Reporting Standards (FRS).

The audit reports on the statutory financial statements of SS Supermarket and CMM Marketing for the financial years ended 31 December 2008 were subject to qualification stating that the auditors were not able to verify the existence of inventory as at the end of the financial year ended 31 December 2007 and the consequential effect of the opening inventories balances on the profit or loss for the financial years ended 31 December 2008. This was due to the fact that the auditors did not attend the physical inventory counts as at 31 December 2007 as they were only appointed during the financial year ended 31 December 2008, and there were no practical alternative procedures that could be applied to confirm the inventory quantities on hand as at this date.

2 BASIS OF PREPARATION

2.1 Statement of compliance

The financial statements have been prepared in accordance with Singapore Financial Reporting Standards (FRS).

2.2 Basis of measurement

The financial statements have been prepared on the historical cost basis except for certain financial assets and financial liabilities which are measured at fair value.

2.3 Functional and presentation currency

The financial statements are presented in Singapore dollars which is the Company’s functional currency. All financial information is presented in Singapore dollars unless otherwise stated.


31 DECEMBER 2008, 2009 AND 2010

A-11

2.4 Use of estimates and judgements

The preparation of the financial statements in conformity with FRS requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates.

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimates are revised and in any future periods affected.

3 SIGNIFICANT ACCOUNTING POLICIES

The accounting policies set out below have been applied consistently to all periods presented in these financial statements, and have been applied consistently by Group entities.

3.1 Basis of combination

Acquisitions of entities under common control

Business combinations arising from transfers of interests in entities that are under the control of the shareholders that controls the Group are accounted for as if the acquisition had occurred at the beginning of the earliest comparative period presented or, if later, at the date that common control was established. The assets and liabilities acquired are recognised in the combined financial statements at the carrying amounts recognised in the acquired entities’ financial statements. The components of equity of the acquired entities are added to the same components within Group equity. Any difference between the cash paid for the acquisition and net assets acquired is recognised in equity.

The combined financial statements of the Group for the financial years ended 31 December 2008, 2009 and 2010 represent the combination or aggregation of the financial statements of the companies in the Group, on the basis that the Group had been in existence prior to 1 January 2008.

Subsidiaries

Subsidiaries are entities controlled by the Group. The financial statements of subsidiaries are included in the combined financial statements from the date that control commences until the date that control ceases. The accounting policies of subsidiaries have been changed where necessary to align them with the policies adopted by the Group.

Transactions eliminated on consolidation

Intra-group balances and transactions, and any unrealised income or expenses arising from intra-group transactions, are eliminated in preparing the combined financial statements. Unrealised losses are eliminated in the same way as unrealised gains, but only to the extent that there is no evidence of impairment.

3.2 Accounting policies for new transactions and events

Distributions of non-cash assets to owner of the Group

From 1 January 2010, the Group applied INT FRS 117 Distributions of Non-cash Assets to Owners in accounting for distributions of non-cash assets to owners of the Group. The new accounting policy (see note 3.6) has been applied prospectively.


31 DECEMBER 2008, 2009 AND 2010

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3.3 Foreign currency

Foreign currency transactions

Transactions in foreign currencies are translated to the respective functional currencies of the Group entities at the exchange rate at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies at the reporting date are retranslated to the functional currency at the exchange rate at that date. The foreign currency gain or loss on monetary items is the difference between amortised cost in the functional currency at the beginning of the period, adjusted for effective interest and payments during the period, and the amortised cost in foreign currency translated at the exchange rate at the end of the reporting period.

Non-monetary assets and liabilities denominated in foreign currencies that are measured at fair value are retranslated to the functional currency at the exchange rate at the date on which the fair value was determined.

Foreign currency differences arising on retranslation are recognised in profit or loss, except for differences arising on the retranslation of available-for-sale equity instruments which are recognised in other comprehensive income. Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rate at the date of the transaction.

Foreign subsidiary

The assets and liabilities of a foreign operation are translated to Singapore dollars at exchange rates prevailing at the reporting date. The income and expenses of a foreign operation are translated to Singapore dollars at exchange rates prevailing at the dates of the transactions.

Foreign exchange differences are recognised in the other comprehensive income. When a foreign operation is disposed off, in part or in full, the relevant amount in the foreign currency translation reserve is transferred to profit or loss on disposal. When the Group disposes of only part of its interest in a subsidiary that includes a foreign operation while retaining controls, the relevant proportion of the cumulative amount is reattributed to non-controlling interests.

When the settlement of a monetary item receivable from or payable to a foreign operation is neither planned nor likely in the foreseeable future, foreign exchange gains and losses arising from such a monetary item are considered to form part of a net investment in a foreign operation. These are recognised in other comprehensive income, and are presented in the translation reserve in equity.

3.4 Property, plant and equipment

Recognition and measurement

Property, plant and equipment are stated at cost less accumulated depreciation and impairment losses.

Cost includes expenditure that is directly attributable to the acquisition of the asset. Purchased software that is integral to the functionality of the related equipment is capitalised as part of that equipment.

When parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate items (major components) of property, plant and equipment.

Gains and losses on disposal of an item of property, plant and equipment are determined by comparing the proceeds from disposal with the carrying amount of property, plant and equipment, and are recognised net within other income in profit or loss.


31 DECEMBER 2008, 2009 AND 2010

A-13

Subsequent costs

The cost of replacing part of an item of property, plant and equipment is recognised in the carrying amount of the item if it is probable that the future economic benefits embodied within the part will flow to the Group and its cost can be measured reliably. The carrying amount of the replaced part is derecognised. The costs of the day-to-day servicing of property, plant and equipment are recognised in profit or loss as incurred.

Construction-in-progress is stated at cost. No depreciation is charged on construction-in-progress. Upon completion of the construction-in-progress, the property, plant and equipment are transferred to the respective property, plant and equipment categories and depreciated accordingly.

Depreciation

Depreciation is calculated over the depreciable amount, which is the cost of an asset, or other amount substituted for cost, less its residual value.

Except for construction in progress, depreciation is recognised in profit or loss on a straight-line basis over the estimated useful lives of each part of an item of property, plant and equipment, since this most closely reflects the expected pattern of consumption of the future economic benefits embodied in the asset. Leased assets are depreciated over the shorter of the lease term and their useful lives unless it is reasonably certain that the Group will obtain ownership by the end of the lease term.

The estimated useful lives are as follows:

• Leasehold properties 30 - 80 years• Renovations 5 years• Plant and machinery 5 years• Office equipment, furniture and fittings 5 years• Motor vehicles 5 years• Computers 3 years• Cold room 5 years

Depreciation methods, useful lives and residual values are reviewed at each reporting date and adjusted as appropriate.

3.5 Investment properties

Investment property is property held either to earn rental income or for capital appreciation or for both, but not for sale in the ordinary course of business, use in the production or supply of goods or services or for administrative purposes. Investment property is measured at and held at cost.

Investment property is measured at cost less accumulated depreciation and impairment losses. Rental income from investment properties is accounted for in the manner described in Note 3.12.

Depreciation on investment properties is recognised in profit or loss on a straight-line basis over the estimated useful life (or lease term, if shorter) of each property.

The estimated useful lives are as follows:

Building on freehold land 30 yearsLeasehold properties 73 to 85 years


31 DECEMBER 2008, 2009 AND 2010

A-14

3.6 Financial instruments

Non-derivative financial assets

The Group initially recognises loans and receivables and deposits on the date that they are originated. All other financial assets are recognised initially on the trade date, which is the date that the Group becomes a party to the contractual provisions of the instrument.

The Group derecognises a financial asset when the contractual rights to the cash flows from the asset expire, or it transfers the rights to receive the contractual cash flows on the financial asset in a transaction in which substantially all the risks and rewards of ownership of the financial asset are transferred. Any interest in transferred financial assets that is created or retained by the Group is recognised as a separate asset or liability.

Financial assets and liabilities are offset and the net amount presented in the statement of financial position when, and only when, the Group has a legal right to offset the amounts and intends either to settle on a net basis or to realise the asset and settle the liability simultaneously.

The Group has the following non-derivative financial assets: loans and receivables and available-for-sale financial assets.

Loans and receivables

Loans and receivables are financial assets with fixed or determinable payments that are not quoted in an active market. Such assets are recognised initially at fair value plus any directly attributable transaction costs. Subsequent to initial recognition, loans and receivables are measured at amortised cost using the effective interest method, less any impairment losses.

Loans and receivables comprise cash and cash equivalents, and trade and other receivables.

Cash and cash equivalents comprise cash balances and bank deposits.

Available-for-sale financial assets

Available-for-sale financial assets are non-derivative financial assets that are designated as available for sale or are not classified in any of the above categories of financial assets. Subsequent to initial recognition, they are measured at fair value and changes therein, other than impairment losses (see note 3.9) and foreign currency differences on available-for-sale monetary items (see note 3.3), are recognised in other comprehensive income and presented in the fair value reserve in equity. When an investment is derecognised, the gain or loss accumulated in equity is reclassified to profit or loss.

Available-for-sale financial assets comprise of equity securities.

Non-derivative financial liabilities

Financial liabilities are recognised initially on the trade date, which is the date that the Group becomes a party to the contractual provisions of the instrument.

The Group derecognises a financial liability when its contractual obligations are discharged, cancelled or expire.

Financial assets and liabilities are offset and the net amount presented in the statement of financial position when, and only when, the Group has a legal right to offset the amounts and intends either to settle on a net basis or to realise the asset and settle the liability simultaneously.


31 DECEMBER 2008, 2009 AND 2010

A-15

The Group classifies non-derivative financial liabilities into the other financial liabilities category. Such financial liabilities are recognised initially at fair value plus any directly attributable transaction costs. Subsequent to initial recognition, these financial liabilities are measured at amortised cost using the effective interest method.

Other financial liabilities comprise trade and other payables.

Financial guarantees

Financial guarantees are financial instruments issued by the Group that require the issuer to make specified payments to reimburse the holder for the loss it incurs because a specified debtor fails to meet payment when due in accordance with the original or modified terms of a debt instrument.

Financial guarantees are recognised initially at fair value and are classified as financial liabilities. Subsequent to initial measurement, the financial guarantees are stated at the higher of the initial fair value less cumulative amortisation and the amount that would be recognised if they were accounted for as contingent liabilities. When financial guarantees are terminated before the original expiry date, the carrying amount of the financial guarantee is transferred to profit or loss.

Financial guarantee contracts are classified as financial liabilities unless the Group has previously asserted explicitly that it regards such contracts as insurance contracts and accounted for them as such. Election is made contract by contract, and each election is irrevocable.

Financial guarantees classified as insurance contracts

These financial guarantees are accounted for as insurance contracts. Provision is recognised based on the Group’s estimate of the ultimate cost of settling all claims incurred but unpaid at the balance sheet date.

The provision is assessed by reviewing individual claims and tested for adequacy by comparing the amount recognised and the amount that would be required to settle the guarantee contract.

Share capital

Ordinary shares

Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of ordinary shares are recognised as a deduction from equity, net of any tax effects.

Distribution of non-cash assets to owners of the Group.

The Group measures a liability to distribute non-cash assets as a dividend to the owners of the Group at the fair value of the assets to be distributed. The carrying amount of the dividend is remeasured at each reporting date and at the settlement date, with any changes recognised directly in equity as adjustments to the amount of the distribution. On settlement of the transaction, the Group recognises the difference, if any, between the carrying amount of the assets distributed and the carrying amount of the liability, in profit or loss.

3.7 Leases

When the Group is a lessee of a finance lease

Leased assets in which the Group assumes substantially all the risks and rewards of ownership are classified as finance leases. Upon initial recognition, property, plant and equipment acquired through finance leases are capitalised at the lower of its fair value and the present value of the minimum lease payments. Subsequent to initial recognition, the asset is accounted for in accordance with the accounting policy applicable to that asset.


31 DECEMBER 2008, 2009 AND 2010

A-16

Leased assets are depreciated over the shorter of the lease term and their useful lives. Lease payments are apportioned between finance expense and reduction of the lease liability. The finance expense is allocated to each period during the lease term so as to produce a constant periodic rate of interest on the remaining balance of the liability.

When the Group is a lessee of an operating lease

Where the Group has the use of assets under operating leases, payments made under the leases are recognised in profit or loss on a straight-line basis over the term of the lease. Lease incentives received are recognised in profit or loss as an integral part of the total lease payments made.

3.8 Inventories

Inventories are measured at the lower of cost and net realisable value. The cost of inventories is based on the weighted average cost formula, and includes expenditure incurred in acquiring the inventories, production or conversion costs and other costs incurred in bringing them to their existing location and condition. In addition, the Group receives payments from suppliers for various programs, primarily display charges, volume rebates and reimbursements for costs to promote the suppliers’ products (cooperative advertising arrangements). Substantially all payments from suppliers are accounted for as a reduction in cost of purchased inventories and recognised in cost of sales when the related inventories are sold. Net realisable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and selling expenses.

3.9 Impairment

Non-derivative financial assets

A financial asset not carried at fair value through profit or loss is assessed at the end of each reporting period to determine whether there is objective evidence that it is impaired. A financial asset is impaired if objective evidence indicates that a loss event has occurred after the initial recognition of the asset, and that the loss event has a negative effect on the estimated future cash flows of that asset that can be estimated reliably.

Objective evidence that financial assets (including equity securities) are impaired can include default or delinquency by a debtor, restructuring of an amount due to the Group on terms that the Group would not consider otherwise, indications that a debtor or issuer will enter bankruptcy, adverse changes in the payment status of borrowers or issuers in the Group, and economic conditions that correlate with defaults or the disappearance of an active market for a security. In addition, for an investment in an equity security, a significant or prolonged decline in its fair value below its cost is objective evidence of impairment.

Loans and receivables

The Group considers evidence of impairment for loans and receivables at both a specific asset and collective level. All individually significant loans and receivables are assessed for specific impairment. All individually significant receivables found not to be specifically impaired are then collectively assessed for any impairment that has been incurred but not yet identified. Loans and receivables that are not individually significant are collectively assessed for impairment by grouping together loans and receivables with similar risk characteristics.

In assessing collective impairment, the Group uses historical trends of the probability of default, the timing of recoveries and the amount of loss incurred, adjusted for management’s judgement as to whether current economic and credit conditions are such that the actual losses are likely to be greater or less than suggested by historical trends.

An impairment loss in respect of a financial asset measured at amortised cost is calculated as the difference between its carrying amount and the present value of the estimated future cash flows discounted at the asset’s original effective interest rate. Losses are recognised in profit or loss


31 DECEMBER 2008, 2009 AND 2010

A-17

and reflected in an allowance account against loans and receivables. When a subsequent event (e.g. repayment by a debtor) causes the amount of impairment loss to decrease, the decrease in impairment loss is reversed through profit or loss.

Available-for-sale financial assets

Impairment losses on available-for-sale financial assets are recognised by reclassifying the losses accumulated in the fair value reserve in equity to profit or loss. The cumulative loss that is reclassified from equity to profit or loss is the difference between the acquisition cost, net of any principal repayment and amortisation, and the current fair value, less any impairment loss recognised previously in profit or loss. Changes in impairment provisions attributable to application of the effective interest method are reflected as a component of interest income.

If, in a subsequent period, the fair value of an impaired available-for-sale debt security increases and the increase can be related objectively to an event occurring after the impairment loss was recognised in profit or loss, then the impairment loss is reversed, with the amount of the reversal recognised in profit or loss. However, any subsequent recovery in the fair value of an impaired available-for-sale equity security is recognised in other comprehensive income.

Non-financial assets

The carrying amounts of the Group’s non-financial assets, other than inventories are reviewed at each reporting date to determine whether there is any indication of impairment. If any such indication exists, then the asset’s recoverable amount is estimated. An impairment loss is recognised if the carrying amount of an asset or its related cash-generating unit (CGU) exceeds its estimated recoverable amount.

The recoverable amount of an asset or CGU is the greater of its value in use and its fair value less costs to sell. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset or CGU. For the purpose of impairment testing, assets that cannot be tested individually are grouped together into the smallest group of assets that generates cash inflows from continuing use that are largely independent of the cash inflows of other assets or CGU.

Impairment losses are recognised in profit or loss.

Impairment losses recognised in prior periods are assessed at each reporting date for any indications that the loss has decreased or no longer exists. An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount. An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised.

3.10 Non-current assets held for sale

Non-current assets (or disposal groups comprising assets and liabilities) that are expected to be recovered primarily through sale rather than through continuing use are classified as held for sale. Immediately before classification as held for sale, the assets (or components of a disposal group) are remeasured in accordance with the Group’s accounting policies. Thereafter generally the assets (or disposal group) are measured at the lower of their carrying amount and fair value less cost to sell. Impairment losses on initial classification as held for sale and subsequent gains or losses on remeasurement are recognised in the profit or loss. Gains are not recognised in excess of any cumulative impairment loss.


31 DECEMBER 2008, 2009 AND 2010

A-18

3.11 Employee benefits

Defined contribution plans

Contributions to post-employment benefits under defined contribution pension plans are recognised in profit or loss as incurred.

Short-term benefits

Short-term employee benefit obligations are measured on an undiscounted basis and are expensed as the related service is provided.

A liability is recognised for the amount expected to be paid under short-term benefits if the Group has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee and the obligation can be estimated reliably.

3.12 Revenue recognition

Supermarket operations

Revenue from the supermarket operations, which consists mainly of the sale of goods in the course of ordinary activities is measured at the fair value of the consideration received or receivable, net of returns and trade discounts. Revenue is recognised at point of sale when the significant risks and rewards of ownership have been transferred to the buyer, recovery of the consideration is probable, the associated costs and possible return of goods can be estimated reliably, there is no continuing management involvement with the goods and the amount of revenue can be measured reliably. Revenue excludes goods and services tax.

Rental income

Rental income receivable under operating leases is recognised in profit or loss on a straight-line basis over the term of the lease. Lease incentives granted are recognised as an integral part of the total rental income, over the term of the lease.

Government grants – Jobs Credit Scheme

Cash grants received from the government in relation to the Jobs Credit Scheme are recognised as income upon receipt.

3.13 Interest income and expenses

Interest income is recognised as it accrues in profit or loss, using the effective interest method.

Interest expense and similar charges are expensed in profit or loss in the period in which they are incurred, except to the extent that they are capitalised as being directly attributable to the acquisition, construction or production of an asset which necessarily takes a substantial period of time to be prepared for its intended use or sale. The interest component of finance lease payments is recognised in profit or loss using the effective interest rate method.

3.14 Income tax expense

Income tax expense comprises current and deferred tax. Current tax and deferred tax are recognised in profit or loss except to the extent that it relates to items recognised directly in equity or in other comprehensive income.

Current tax is the expected tax payable or receivable on the taxable income or loss for the year, using tax rates enacted or substantively enacted at the reporting date, and any adjustment to tax payable in respect of previous years.


31 DECEMBER 2008, 2009 AND 2010

A-19

Deferred tax is recognised in respect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes.

Deferred tax is measured at the tax rates that are expected to be applied to the temporary differences when they reverse, based on the laws that have been enacted or substantively enacted by the reporting date.

Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax liabilities and assets, and they relate to income taxes levied by the same tax authority on the same taxable entity, or on different tax entities, but they intend to settle current tax liabilities and assets on a net basis or their tax assets and liabilities will be realised simultaneously.

A deferred tax asset is recognised for unused tax losses, tax credits and deductible temporary differences, to the extent that it is probable that future taxable profits will be available against which they can be utilised. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realised.

3.15 Earnings per share

The Group presents basic and diluted earnings per share (EPS) data for its ordinary shares. Basic EPS is calculated by dividing the profit or loss attributable to ordinary shareholders of the Group by the weighted average number of ordinary shares outstanding during the period, adjusted for own shares held. Diluted EPS is determined by adjusting the profit or loss attributable to ordinary shareholders and the weighted average number of ordinary shares outstanding, adjusted for own shares held, for the effects of all dilutive potential ordinary shares.

3.16 Segment reporting

The Group determines and presents operating segments based on the information that internally is provided to the Board of Directors, who is the Group’s chief operating decision maker.

An operating segment is a component of the Group that engages in business activities from which it may earn revenues and incur expenses, including revenues and expenses that relate to transactions with any of the Group’s other components. All operating segments’ operating results are reviewed regularly by the Group’s Board of Directors to make decisions about resources to be allocated to the segment and assess its performance, and for which discrete financial information is available.

Segment results that are reported to the Board of Directors include items directly attributable to a segment as well as those that can be allocated on a reasonable basis. Unallocated items comprise mainly corporate assets, head office expenses, and income tax assets and liabilities.

Segment capital expenditure is the total cost incurred during the period to acquire property, plant and equipment, and intangible assets other than goodwill.

3.17 New standards and interpretations not yet adopted

New standards, amendments to standards and interpretations that are not yet effective for the year ended 31 December 2010 have not been applied in preparing these financial statements. None of these are expected to have a significant effect on the financial statements of the Group.


31 DECEMBER 2008, 2009 AND 2010

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A-21

The Group’s leasehold properties as at 31 December 2008 were as follows:

Location Description TenureFloor area

(sq. m.)

(a) Blk 233 Ang Mo Kio Avenue 3#01-1168 Singapore 560233

Two-storey HDB shop 83 years lease commencing on 1 October 1993

398

(b) Blk 544 Jurong West Street 42#01-97/99 Singapore 640544

Two-storey HDB shop 87 years lease commencing on 1 July 1996

367

(c) Blk 352 Clementi Avenue 2#01-91/99 Singapore 120352

Two-storey HDB shop 81 years lease commencing on 1 August 2007

542

(d) 3000 Marsiling Road Singapore 739108

Two storey factory 60 years lease commencing on 1974

8,796

The Group’s leasehold property as at 31 December 2009 and 31 December 2010 was as follows:


(sq. m.)

(a) 3000 Marsiling Road Singapore 739108

Two storey factory 60 years lease commencing on 1974

8,796

The pledges on the Group’s leasehold properties to secure bank overdrafts and other banking facilities were discharged in 2008.

In 2009, the Group disposed certain of its leasehold properties to Sheng Siong Properties Pte Ltd, an affiliated company, at net book value for a total consideration of $5,680,000.

The motor vehicles held under finance leases expired in 2008.

5 INVESTMENTS PROPERTIES

2008 2009 2010$ $ $

Cost At 1 January 10,261,667 10,261,667 – Disposals – (10,261,667) –

At 31 December 10,261,667 – –

Accumulated depreciation and impairment lossesAt 1 January 2,915,487 2,999,809 – Depreciation 84,322 49,188 – Disposals – (3,048,997) –

At 31 December 2,999,809 – –

Carrying amount 7,261,858 – –


31 DECEMBER 2008, 2009 AND 2010

A-22

The Group’s investment properties as at 31 December 2008 were as follows:


(sq. m.)

(a) 434 Tagore Industrial Avenue, Singapore 787812

Two-storey intermediate terrace factory with a mezzanine level

Estate in perpetuity 955.6

(b) Blk 144 Tampines Street 12#01-390, Singapore 521144

Two-storey HDB shop 90 years lease commencing on 1 April 1994

219

(c) Blk 742 Bedok Reservoir Road, #01-3111Singapore 470742

Two-storey HDB shop 90 years lease commencing on 1 August 1995

153

(d) Blk 345 Clementi Avenue 5#01-78, Singapore 120345

Two-storey HDB shop 85 years lease commencing on 1 October 1993

392

The aggregate fair value of the investment properties as at 31 December 2008 was $8,730,000 determined based on valuations by independent professional valuers.

The pledges on the Group’s investment properties to secure other banking facilities were discharged in 2008.

In 2009, the Group disposed its investment properties to Sheng Siong Properties Pte Ltd, an affiliated company, at net book value for a total consideration of $7,529,990.

Rental income of $431,290 and $249,443 was derived from the investment properties during the years ended 31 December 2008 and 2009 respectively.

6 INVENTORIES

2008 2009 2010$ $ $

Goods for resale 25,763,712 24,907,537 26,404,843

During the period ended 31 December 2010, goods for resale recognised in cost of sales amounted to $480,066,187 (year ended 2008: $496,004,373; 2009: $496,982,150).

7 TRADE AND OTHER RECEIVABLES

2008 2009 2010$ $ $

Trade receivables 936,374 1,995,820 1,231,855Amount due from affiliated companies- trade 2,420,155 115,580 89,238- non-trade 3,315,953 36,781,357 105,571Amount due from directors 262,890 – –Other receivables 374,485 942,651 434,263Deposits 5,443,375 2,244,920 2,132,481

Loans and receivables 12,753,232 42,080,328 3,993,408Prepayments 203,228 377,916 721,666

12,956,460 42,458,244 4,715,074


31 DECEMBER 2008, 2009 AND 2010

A-23

In 2008, the Group secured the purchase of a property located at Blk 219, Bedok Central #01-140 from the Housing and Development Board with a deposit of $2,853,600. In 2009, the Group divested this property to Sheng Siong Properties Pte Ltd, an affiliated company, at net book value for a sales consideration of $3,201,600.

Non-trade amounts due from affiliated companies are unsecured, interest-free and repayable on demand. There is no allowance for doubtful debts arising from the outstanding balances.

The ageing of loans and receivables at the balance sheet date is:

2008 2009 2010$ $ $

Not past due 7,175,523 1,922,264 196,991Past due 1 – 30 days 1,618,581 2,873,550 3,657,451Past due 31 – 60 days 609,534 29,383 46,719Past due more than 60 days 3,349,594 37,255,131 92,247

12,753,232 42,080,328 3,993,408

The Group believes that no impairment allowance is necessary in respect of its loans and receivables, based on historic payment behaviour and analyses of the underlying customers’ credit ratings.

8 OTHER INVESTMENTS

2008 2009 2010$ $ $

Current investmentsQuoted preference shares at fair value through profit or

loss1,860,000 – –

Quoted debt securities at fair value through profit or loss 1,017,416 – –Available-for-sale equity securities – 72,535,961

2,877,416 72,535,961 –

The preference shares are classified as held for trading as they were purchased principally for the purpose of selling in the near term.

In 2009, the Group disposed its quoted preference shares and quoted debt securities for a total consideration of $1,992,076 and $1,020,000 respectively.

In 2010, the Group declared and paid a dividend in specie to owners of the Group using its partially available-for-sale investment securities.

9 CASH AND CASH EQUIVALENTS

2008 2009 2010$ $ $

Cash in hand 5,390,529 3,433,403 3,110,126Cash at banks 38,897,595 30,299,227 82,706,144Fixed deposits 41,829,346 5,348,880 69,228

Cash and cash equivalents in the cash flow statements 86,117,470 39,081,510 85,885,498


31 DECEMBER 2008, 2009 AND 2010

A-24

10 SHARE CAPITAL

2008 2009 2010No. ofshares

No. ofshares

No. ofshares

Fully paid ordinary shares,with no par value:At 1 January 2,000,000 2,000,004 16,000,004Issuance of ordinary shares by SS Malaysia 4 – 2Issuance of share capital by CMM Marketing by way of

capitalisation of accumulated profits– 14,000,000 –

Issuance of share capital by SS Supermarket by way of capitalisation of accumulated profits

– – 14,000,000

Issuance of share capital by SS Group Pte Ltd – – 3

At 31 December 2,000,004 16,000,004 30,000,009

The holders of ordinary shares are entitled to receive dividends as declared from time to time and are entitled to one vote per share at meetings of the Group. All shares rank equally with regard to the Company’s residual assets.

In 2010, SS Malaysia issued an additional 2 shares at RM1.00 per shares for cash.

On 31 December 2009, CMM Marketing issued an additional 14,000,000 shares at $1.00 per share by way of capitalisation of accumulated profits as at 31 December 2009.

On 19 May 2010, SS Supermarket issued an additional 14,000,000 shares at $1.00 per share by way of capitalisation of accumulated profits as at 31 December 2009.

In 2010, SS Group Pte Ltd issued an additional 3 shares at $1.00 per shares for cash.

Dividends

In 2010, the following exempt (one-tier) dividends were declared and paid by SS Supermarket:-

Note $ Payment date

Interim cash dividend$2.35 per ordinary shares 35,238,510 15 September 2010

Dividend in specie$2.53 per ordinary shares (a) 37,946,433 3 December 2010

73,184,943

(a) On 3 December 2010, the dividend was paid in specie using the Group’s available for-sales investment securities (note 8).

In 2010, CMM Marketing declared exempt (one-tier) dividends of $0.40 per ordinary share to equity holders.


31 DECEMBER 2008, 2009 AND 2010

A-25

Capital management

The Group defines capital as share capital and accumulated profits.

The Group’s objective when managing capital is to maintain an efficient capital structure so as to maximise shareholder value. In order to maintain or achieve an efficient capital structure, the Group may adjust the amount of dividend payment, return capital to shareholders, issue new shares, obtain new borrowings or sell assets to reduce borrowings.

The Board seeks to maintain a balance between the higher returns that might be possible with higher levels of borrowings and the advantages and security afforded by a sound capital position.

There were no changes in the Group’s approach to capital management during the year.

The Group is not subject to externally imposed capital requirements.

11 FAIR VALUE RESERVE

The fair value reserve comprises the cumulative net change in the fair value of available-for-sales other investments until the investment is derecognised.

12 DEFERRED TAX

Movements in deferred tax liabilities of the Group during the year are as follows:

At1/1/2008

Recognised in profitor loss

(note 16)At

31/12/2008


(note 16)At

31/12/2009


(note 16)At

31/12/2010$ $ $ $ $ $ $

Property, plant and equipment 675,568 (72,830) 602,738 126,096 728,834 (120,765) 608,069

13 TRADE AND OTHER PAYABLES

2008 2009 2010$ $ $

Trade payables 41,741,196 50,846,924 48,353,093Amounts due to affiliated companies- trade 370,020 457,177 –- non-trade 5,815,422 136,853 136,409Amount due to directors 13,161,262 6,237,998 8,700,176Other payables 1,120,770 2,583,769 2,671,968Deposits 340,638 322,742 152,386Accrued expenses 13,754,330 19,959,907 21,447,503

76,303,638 80,545,370 81,461,535

Non-trade amounts due to affiliated companies and directors are unsecured, interest-free and repayable on demand.

Other payables include amounts payable in connection with the property under construction at Mandai Link Singapore.


31 DECEMBER 2008, 2009 AND 2010

A-26

14 FINANCIAL LIABILITIES

2008 2009 2010$ $ $

Non-current liabilitiesSecured bank loan – – 19,090,651

Current liabilitiesSecured bank loan – – 3,201,312Finance lease liabilities 7,781 – –

7,781 – 3,201,312

7,781 – 22,291,963

The secured bank loan amounting to $22.3 million as at 31 December 2010 bear interest rates ranging from 1.12% to 1.15% (2009: Nil) per annum and is repayable by June 2013.

This loan is secured by:

a) first legal mortgage of the property under construction at Mandai Link Singapore with a carrying value at 31 December 2010 of $39,391,208 (see note 4),

b) the assignment of the rights, title and interest with respect to the property upon completion, and

c) a corporate guarantee from SS Supermarket.

Finance lease liabilities

The Group has obligations under finance leases that are payable as follows:

Principal Interest Payments$ $ $

At 31 December 2008Payable within 1 year 7,781 978 8,759

Contractual undiscounted cash flows

The following are the expected contractual undiscounted cash outflows (inflows) of financial liabilities, including interest payments and excluding the impact of netting agreements:

Cash flows

Carrying amount

Expected contractual cashflows

Within1 year

Between1 to 5 years

$ $ $ $Group2010Non-derivative financial liabilitiesFloating rate loans 22,291,963 22,677,275 3,429,780 19,247,495Trade and other payables 81,461,535 81,461,535 81,461,535 –

103,753,498 104,138,810 84,891,315 19,247,495


31 DECEMBER 2008, 2009 AND 2010

A-27

Cash flows

Carrying amount

Expected contractual cashflows

Within1 year

Between1 to 5 years

$ $ $ $2009Non-derivative financial liabilitiesTrade and other payables 80,545,370 80,545,370 80,545,370 –

80,545,370 80,545,370 80,545,370 –

2008Non-derivative financial liabilitiesFinance lease liabilities 7,781 8,759 8,759 –Trade and other payables 76,303,638 76,303,638 76,303,638 –

76,311,419 76,312,397 76,312,397 –

15 REVENUE

2008 2009 2010$ $ $

Continuing operationsSupermarket operations 610,160,052 625,342,848 628,432,157

Discontinued operationsFood court operations – – –

610,160,052 625,342,848 628,432,157


31 DECEMBER 2008, 2009 AND 2010

A-28

16 INCOME TAX EXPENSE

2008 2009 2010$ $ $

Current tax expenseCurrent year 5,111,870 5,619,789 6,780,798Under/(over) provision in respect of prior years 963,138 544,413 (564,583)

6,075,008 6,164,202 6,216,215

Deferred tax (credit)/expenseOrigination and reversal of temporary differences (72,830) 160,258 (120,765)Reduction in tax rate – (34,162) –

Income tax expense from continuing operations 6,002,178 6,290,298 6,095,450

Reconciliation of effective tax rateProfi t for the year 20,572,710 33,580,169 42,634,806Total income tax expense 6,002,178 6,290,298 6,095,450

Profi t before income tax 26,574,888 39,870,467 48,730,256

Income tax expense using Singapore tax rate of 17% (2009: 17%; 2008: 18%) 4,783,480 6,777,979 8,284,143

Effect of reduction in tax rates – (34,162) – Income not subject to tax (54,900) (1,156,304) (1,839,524)Expenses not deductible for tax purposes 310,460 158,372 215,414Under/(over) provision in respect of prior years’ current tax 963,138 544,413 (564,583)

6,002,178 6,290,298 6,095,450

In 2009, the Government of Singapore enacted a change in the corporate income tax rate from 18% to 17%. Following the change, the corporate income tax rate applicable to the Group was 17% for year of assessment 2010 onwards and 18% for year of assessment 2009.

17 DISCONTINUED OPERATIONS

On 2 January 2008, the Group’s food court operations under the sole-proprietorship, Food More, were transferred to an affiliated company, Sheng Siong Food Court Pte Ltd. The disposal group comprised the following assets and liabilities on date of disposal:

2 January2008

$AssetsProperty, plant and equipment 325,771Trade and other receivables 2,133,391Cash and cash equivalents 917,129

3,376,291

LiabilitiesTrade and other payables 3,765,698


31 DECEMBER 2008, 2009 AND 2010

A-29

The effects of the disposal on individual assets and liabilities of the Group are as follows:

Year ended31 December

2008$

Net identifiable liabilities 389,407

Cash consideration paid, satisfied in cash 389,407Cash disposed 917,129

Net cash outflow 1,306,536

18 PROFIT FOR THE YEAR

Profit for the year is arrived at after (charging)/crediting the following items:

2008 2009 2010$ $ $

Change in fair value of debt securities held for trading 1,584 – – Change in fair value of preference shares held for trading 140,000 – – Contributions to defined contribution plans, included in

staff costs 3,589,575 4,162,536 4,532,742Depreciation of investment properties 84,322 49,188 – Depreciation of property, plant and equipment 4,889,680 4,537,065 4,248,717Dividend income – (858,796) (286,963)Exchange loss/(gain), net 14,229 (13,698) 28,209Gain on disposal of investment property – (317,320) – Gain on disposal of other investment – (3,097,996) (9,412,517)Gain on deemed disposal of other investment through

the declaration of dividend in specie – – (152,886)Government grants – (3,575,656) (796,099)Interest expense- bank overdrafts 6,982 688 – - finance lease liabilities 6,738 978 – Interest income- cash and cash equivalents (724,414) (173,308) (25,359)- other investment (5,746) (10,626) – Loss on disposal of property, plant and equipment 74,168 47,428 103,473Operating expenses arising from rental of investment

properties 51,271 19,889 50,331Operating lease expense 10,976,309 11,666,649 14,445,885Operating lease income (2,440,022) (2,770,843) (2,452,947) Staff costs 65,196,185 75,741,320 77,837,464Sales of recyclable items (1,060,200) (680,506) (1,028,448)


31 DECEMBER 2008, 2009 AND 2010

A-30

19 EARNINGS PER SHARE

2008 2009 2010$ $ $

Basic earnings per share is based on:Net profit from continuing operations attributable to ordinary shareholders 20,572,710 33,580,169 42,634,806

No. of shares No. of shares No. of shares’000 ’000 ’000

Weighted average number of shares during the year 30,000 30,000 30,000

For the purposes of preparing the combined financial statements, the number of shares as at 31 December 2008 and 2009 and 2010 comprises the aggregate number of shares of the combining entities.

There were no dilutive potential ordinary shares in existence for the financial years ended 31 December 2008, 2009 and 2010.

20 SEGMENT REPORTING

The Group operates in one segment which relates to the provision of supermarket supplies and supermarket operations. The Group’s operations are located in Singapore. The Malaysian subsidiary was inactive for the financial years ended 31 December 2008, 2009 and 2010.

21 OPERATING LEASE COMMITMENTS

The Group leases a number of HDB shop units under operating leases. The leases typically run for an initial period of three to six years, with an option to renew the lease after that date.

The Group has commitments for future minimum lease payments under non-cancellable operating lease as follows:

2008 2009 2010$ $ $

Payable:- Within 1 year 8,678,100 11,769,694 11,216,929- After 1 year but within 5 years 4,841,288 10,267,796 12,646,438

13,519,388 22,037,490 23,863,367

The Group leases out its investment properties. Non-cancellable operating lease rentals are receivables as follows:

2008 2009 2010$ $ $

Receivable:- Within 1 year 329,800 – –- After 1 year but within 5 years 71,200 – –

401,000 – –

In 2009, the Group disposed its investment properties to an affiliated company (see note 5).


31 DECEMBER 2008, 2009 AND 2010

A-31

22 RELATED PARTIES

Identity of related parties

For the purpose of these financial statements, parties are considered to be related to the Group if the Group has the ability, directly or indirectly, to control the parties or exercise significant influence over the parties in making financial and operating decisions, or vice versa, or where the Group and the parties are subject to common control or common significant influence. Related parties may be individuals or other entities.

Affiliated Company

An affiliated company is defined as one:

a) In which a director of the Group has substantial financial interests or is in a position to exercise significant influence; and/or

b) Which directly or indirectly, through one or more intermediaries, are under the control of a common shareholder.

Key management personnel

Compensation payable to key management personnel, included in staff costs, comprise:

2008 2009 2010$ $ $

Short-term employee benefits 5,399,442 7,959,094 10,482,321

In addition to the related party information disclosed elsewhere in the financial statements, there were the following significant transactions which were carried out with related parties in the normal course of business on terms agreed between the parties:

Other related party transactions

2008 2009 2010$ $ $

Related parties:- Sales 15,992,263 1,570,619 1,783,326- Purchases (1,303,428) (1,092,960) (532,823)- Ration income 166,835 105,999 79,825- Sub contract labour income – 187,607 126,596- Sub contract labour expenses (946,987) (892,184) (924,646)

23 FINANCIAL RISK MANAGEMENT

The Group has a system of controls in place to create an acceptable balance between the cost of risks occurring and the cost of managing the risks. The management continually monitors the Group’s risk management process to ensure that an appropriate balance between risk and control is achieved.

Credit risk

Credit risk is the potential financial loss resulting from the failure of a customer or a counterparty to settle its financial and contractual obligations to the Group, as and when they fall due.


31 DECEMBER 2008, 2009 AND 2010

A-32

The Group’s exposure to credit risk arises mainly from trade and other receivables and cash and cash equivalents. Balances due from affiliated companies accounted for 4.13% of the total receivables as at 31 December 2010 (2008: 44.2%; 2009: 86.9%). The carrying amount of these financial assets recorded in the balance sheet represents the Group’s maximum exposure to credit risk.

Cash and fixed deposits are placed with banks which are regulated under the Singapore Banking Act.

Liquidity risk

The Group monitors its liquidity risk and maintains a level of cash and cash equivalents deemed adequate by management to finance the Group’s operations and to mitigate the effects of fluctuations in cash flows.

Market risk

Market risk is the risk that changes in market prices, such as interest rates, foreign exchange rates and equity prices will affect the Group’s income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimising the return on risk.

Foreign currency risk

In managing its foreign currency risk, the Group strives to prudently balance its portfolio so as to minimise the impact on earnings. As at the balance sheet date, the Group is not exposed to any significant foreign currency risk.

Interest rate risk

At the reporting date, the interest rate profile of the interest-bearing financial instruments was:

2008 2009 2010Fixed rate instruments $ $ $

Financial liabilities 7,781 – –

7,781 – –

Variable rate instrumentsFinancial liabilities – – 22,291,963

– – 22,291,963

Cash flow sensitivity analysis for variable rate instruments.

An increase of 100 basis points in interest rates at the reporting date would decrease profit before tax by $222,920. This analysis assumes that all other variables, in particular foreign currency rates, remain constant, and has not taken into account the effects of qualifying borrowing costs allowed for capitalisation and the associated tax effects.

A decrease in 100 basis points in interest rate would have an equal but opposite effect.

Fair value

Quoted investments

Fair value is based on quoted market bid prices at the financial reporting date without any deduction for transaction costs.


31 DECEMBER 2008, 2009 AND 2010

A-33

Other financial assets and liabilities

The notional amounts of financial assets and liabilities with a maturity of less than one year or which reprice frequently (including other receivables, cash and cash equivalents, accrued operating expenses, and other payables) approximate their fair values because of the short period to maturity/repricing.

Fair value hierarchy for financial instruments

The table below analyses financial instruments carried at fair value, by valuation method. The different levels have been defined as follows:

• Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities;

• Level 2: inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e., as prices) or indirectly (i.e., derived from prices);

• Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs).

Level 1 Level 2 Level 3 Total$ $ $ $

31 December 2008Preference shares at fair value through profit or loss

1,860,000 – – 1,860,000

Debt securities at fair value through profit or loss

1,017,416 – – 1,017,416

31 December 2009Available-for-sale equity securities 72,535,961 – – 72,535,961

31 December 2010Available-for-sale equity securities – – – –

24 RESTRUCTURING

Pursuant to a group restructuring (the “Restructuring”) in preparation for the proposed listing of the Company on the Singapore Exchange Securities Trading Limited (“Singapore Exchange”), the Company underwent a Restructuring involving the followings:

i. Incorporation of the Company

The Company was incorporated as a private limited company in the Republic of Singapore on 10 November 2010 under the name of Sheng Siong Group Pte Ltd and has its registered address at 3000 Marsiling Road, CMM Building, Singapore 739108. Subsequently, on 4 July 2011, the Company was converted into a public company and changed its name to Sheng Siong Group Limited.


31 DECEMBER 2008, 2009 AND 2010

A-34

ii. Acquisition of 100% of the entire equity interest in SS Supermarket

Pursuant to a share swap agreement on 17 March 2011, the Company acquired from Mr. Lim Hock Chee, Mr. Lim Hock Eng, and Mr. Lim Hock Leng the entire 100% of the issued share capital of SS Supermarket, comprising 5,000,000 ordinary shares for an aggregate purchase consideration of approximately S$55,841,855, which was satisfied by the issuance and allotment of 20,107,752 new shares in the capital of the Company, credited as fully paid. The purchase consideration was arrived at after taking into consideration the net asset value of SS Supermarket as at 30 September 2010 and the reduction in share capital in SS Supermarket from S$15,000,000 to S$5,000,000 on 10 March 2011.

iii. Acquisition of 100% of the entire equity interest in CMM Marketing

Pursuant to a share swap agreement on 17 March 2011, the Company acquired from Mr. Lim Hock Chee, Mr. Lim Hock Eng, and Mr. Lim Hock Leng the entire 100% of the issued share capital of CMM Marketing, comprising 5,000,000 ordinary shares for an aggregate purchase consideration of approximately S$22,391,665, which was satisfied by the issuance and allotment of 9,892,242 new shares in the capital of the Company, credited as fully paid. The purchase consideration was arrived at after taking into consideration the net asset value of CMM Marketing as at 30 September 2010 and the reduction in share capital in CMM Marketing from S$15,000,000 to S$5,000,000 on 10 March 2011.

Iv. Acquisition of 100% entire equity interest in SS Malaysia

Pursuant to a share swap agreement on 16 March 2011, the Company acquired from Mr. Lim Hock Chee, Mr. Lim Hock Eng, and Mr. Lim Hock Leng the entire 100% of the issued share capital of SS Malaysia, comprising 4 ordinary shares for an aggregate purchase consideration of approximately S$1.67, which was satisfied by the issuance and allotment of three (3) new shares in the capital of the Company, credited as fully paid. The purchase consideration was arrived at after taking into consideration the net asset value of SS Malaysia as at 30 September 2010.

25 SUBSEQUENT EVENTS

Subsequent to 31 December 2010, the following events took place:

(a) On 10 March 2011, the paid up capital of SS Supermarket was decreased from $15,000,000 to $5,000,000.

(b) On 10 March 2011, the paid up capital of CMM Marketing was decreased from $15,000,000 to $5,000,000.

(c) On 8 February 2011, the controlling equity holders decided to establish the Group, to be listed on the Singapore Exchange Securities Trading Limited. The establishment of the Group includes certain restructuring activities (see note 24).

(d) At an Extraordinary General Meeting held on 18 March 2011, the shareholders approved, inter alia, the following: the sub-division of each ordinary share of the Company into 38 ordinary shares;

(i) the conversion of the Company into a public limited company and the change of name to “Sheng Siong Group Ltd.”;

(ii) the adoption of the new Articles of Association of the Company; and

(iii) the issue of the new shares pursuant to the Invitation, such new shares, when fully paid, allotted and issued, will rank pari passu in all respects with existing issued shares.


31 DECEMBER 2008, 2009 AND 2010

B-1

REPORT FROM THE REPORTING ACCOUNTANTS IN RELATION TOTHE UNAUDITED PROFORMA FINANCIAL INFORMATION OF

SHENG SIONG GROUP LIMITED AND ITS SUBSIDIARIES

The Board of DirectorsSheng Siong Group Ltd.3000 Marsiling RoadSingapore 739108

Dear Sirs

Unaudited Proforma Financial Information

We report on the unaudited proforma financial information of Sheng Siong Group Ltd. (the “Company”) and its subsidiaries (collectively, the “Group”) as set out on pages B-3 to B-8 of the prospectus (the “Prospectus”).

The unaudited proforma financial information has been prepared for illustrative purposes only, and based on certain assumptions after making certain adjustments, to show what:

(a) the unaudited proforma financial position of the Group as at 31 December 2010 would have been if the Significant Events as described in Note 2 had occurred on 31 December 2010;

(b) the unaudited proforma financial results of the Group for the year ended 31 December 2010 would have been if the Significant Events as described in Note 2 had occurred on 1 January 2010; and

(c) the unaudited proforma cash flows of the Group for the year ended 31 December 2010 would have been if the Significant Events as described in Note 2 had occurred on 1 January 2010.

The unaudited proforma financial information, because of their nature, may not give a true picture of the actual financial position, financial results and cash flows of the Group. The unaudited proforma financial information is the responsibility of the directors of the Company. Our responsibility is to express an opinion on the unaudited proforma financial information based on our work.

We carried out our procedures in accordance with Statement on Auditing Practice 24: “Auditors and Public Offering Documents”. Our work, which involved no independent examination of the unaudited proforma financial information, consisted primarily of comparing the unaudited proforma financial information to the audited financial statements of the Group for the year ended 31 December 2010, considering the evidence supporting the adjustments and discussing the unaudited proforma financial information with the directors of the Company.

In our opinion:

(a) the unaudited proforma financial information has been properly prepared:

(i) in a manner consistent with the accounting policies of the Group; and

(ii) on the basis set out in Note 3 to the Unaudited Proforma Financial Information of the Group; and

(b) each material adjustment made to the information used in the preparation of the unaudited proforma financial information is appropriate for the purpose of preparing such unaudited proforma financial information.

APPENDIX B: INDEPENDENT AUDITORS’ REPORT AND THE PROFORMA FINANCIAL INFORMATION FOR THE FINANCIAL YEAR ENDED

31 DECEMBER 2010

B-2

This report has been prepared solely for inclusion in the Prospectus of the Company in connection with the initial public offering of the shares of the Company on the Main Board of the Singapore Exchange Securities Trading Limited.

KPMG LLP Public Accountants andCertified Public Accountants

Singapore4 August 2011

Low Gin Cheng GeraldPartner


31 DECEMBER 2010

B-3

UNAUDITED PROFORMA COMBINED BALANCE SHEET AT 31 DECEMBER 2010

AuditedCombined

Balance Sheet

UnauditedProforma

Adjustments

UnauditedProformaCombined

Balance SheetNotes SGD SGD SGD

Non-current assetsProperty, plant and equipment 58,327,724 58,327,724

Total non-current assets 58,327,724 58,327,724

Inventories 26,404,843 26,404,843Trade and other receivables 4,715,074 4,715,074Cash and cash equivalents 4(a)(i), (ii) 85,885,498 (20,927,058) 64,958,440

Total current assets 117,005,415 96,078,357

Total assets 175,333,139 154,406,081

EquityShare capital 4(a)(ii) 30,000,006 (20,000,000) 10,000,006Retained earnings 4(a)(i) 33,881,304 (927,058) 32,954,246Foreign currency translation reserve 91 91

Total equity 63,881,401 42,954,343

LiabilitiesFinancial liabilities 19,090,651 19,090,651Deferred tax liabilities 608,069 608,069

Total non-current liabilities 19,698,720 19,698,720

Trade and other payables 81,461,535 81,461,535Current tax payable 7,090,171 7,090,171Financial liabilities 3,201,312 3,201,312

Total current liabilities 91,753,018 91,753,018

Total liabilities 111,451,738 111,451,738

Total equity and liabilities 175,333,139 154,406,081


31 DECEMBER 2010

B-4

UNAUDITED PROFORMA COMBINED STATEMENT OF COMPREHENSIVE INCOME FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2010

AuditedCombined

Statement of Comprehensive

Income

UnauditedProforma

Adjustments


Statement of Comprehensive

IncomeSGD SGD SGD

Revenue 628,432,157 628,432,157

Cost of sales (491,675,483) (491,675,483)

Gross profit 136,756,674 136,756,674

Other income 15,917,921 15,917,921

Selling and distribution expenses (4,372,119) (4,372,119)

Administrative expenses (98,314,145) (98,314,145)

Other expenses (1,283,434) (1,283,434)

Results from operating activities 48,704,897 48,704,897

Finance income 25,359 25,359Finance expenses – –

Net finance income 25,359 25,359

Profit before income tax 48,730,256 48,730,256

Income tax expense (6,095,450) (6,095,450)

Profit for the period 42,634,806 42,634,806

Other comprehensive incomeForeign currency translation differences for

foreign operations(39) – (39)

Net change in fair value of other investment – – –Net change in fair value of other investment

transferred to profit or loss upon distribution in specie/ disposal

(13,437,223) – (13,437,223)

Total comprehensive income 29,197,544 29,197,544


31 DECEMBER 2010

B-5

UNAUDITED PROFORMA COMBINED STATEMENT OF CASH FLOW FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2010

AuditedCombined

Statement of Cash Flow

UnauditedProforma

Adjustments


Statement of Cash Flow

SGD SGD SGDOperating activitiesProfit for the year 42,634,806 42,634,806Adjustments for:Depreciation of property, plant and equipment 4,248,717 4,248,717Loss on disposal of property, plant and equipment 103,473 103,473Gain on disposal of other investments (9,412,517) (9,412,517)Gain on deemed disposal of other investment

through the declaration of dividend in specie(152,886) (152,886)

Unrealised exchange gain (10,548) (10,548)Dividend income (286,963) (286,963)Interest income (25,359) (25,359)Income tax expense 6,095,450 6,095,450

Changes in working capital: 43,194,173 43,194,173Inventories (1,497,307) (1,497,307)Trade and other receivables 1,067,385 1,067,385Trade and other payables (1,409,160) (1,409,160)

Cash generated from operations 41,355,091 41,355,091Income taxes paid (7,326,143) (7,326,143)

Cash flows from operating activities 34,028,948 34,028,948

Investing activitiesProceeds from disposal of property, plant and

equipment70,994 70,994

Proceeds from disposal of other investments 35,721,912 35,721,912Construction in progress (35,657,395) (35,657,395)Purchase of property, plant and equipment (2,733,666) (2,733,666)Purchase of other investments (5,004,205) (5,004,205)Dividend received 286,963 286,963Interest received 25,359 25,359

Cash flows used in investing activities (7,290,038) (7,290,038)


31 DECEMBER 2010

B-6

UNAUDITED PROFORMA COMBINED STATEMENTS OF CASH FLOW FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2010 (CONTINUED)

AuditedCombined

Statement of Cash Flows

UnauditedProforma

Adjustments


Statement of Cash Flows

SGD SGD SGDFinancing activitiesReturn of share capital 5(b)(ii) – (20,000,000) (20,000,000)Proceeds from bank loan 22,291,963 22,291,963Non-trade amounts due from affiliated

companies36,675,787 36,675,787

Non-trade amounts due to affiliated companies (136,853) (136,853)Non-trade amounts due to directors 2,462,178 2,462,178Proceeds from issuance of ordinary shares 4 4Dividend paid 5(b)(i) (41,238,510) (927,058) (42,165,568)Foreign currency translation (39) (39)

Cash flows from/(used in) financing activities 20,054,530 (20,927,058) (872,528)

Net increase in cash and cash equivalents 46,793,440 25,866,382Cash and cash equivalents at beginning of the

year 39,081,510 39,081,510

Effect of exchange rate changes on balances held in foreign currencies

10,548 10,548

Cash and cash equivalents at end of the year 85,885,498 64,958,440


31 DECEMBER 2010

B-7

NOTES TO THE UNAUDITED PROFORMA FINANCIAL INFORMATION FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2010

1. INTRODUCTION

The unaudited proforma financial information should be read in conjunction with the audited combined financial statements of Sheng Siong Group Ltd. (the “Company”) and its subsidiaries (the “Group”) for the years ended 31 December 2008, 2009 and 2010 which are set out in Appendix A of the Prospectus.

The unaudited proforma financial information, comprising the unaudited proforma combined balance sheet of the Group as at 31 December 2010, the unaudited proforma combined statement of comprehensive income and the unaudited proforma combined statement of cash flows of the Group for the year ended 31 December 2010, have been prepared for inclusion in the Prospectus in connection with the public offering of ordinary shares of the Company.

2 SIGNIFICANT EVENTS

Subsequent to the year ended 31 December 2010, the following dividends and return of share capital were made:

(i) Interim dividend of SGD 0.19 per share amounting to SGD 927,058 was paid by SS Supermarket on 11 March 2011;

(ii) Share capital of SGD 10,000,000 was returned by SS Supermarket on 11 March 2011, so as to retain a paid up share capital of SGD 5,000,000; and

(iii) Share capital of SGD 10,000,000 was returned by CMM Marketing on 11 March 2011 so as to retain a paid up share capital of SGD 5,000,000.

For the purpose of the preparation of the unaudited proforma financial information, the above significant events have been accounted for in shareholders’ equity as an appropriation of retained earnings and return of share capital in the financial year ended 31 December 2010.

3. BASIS OF PREPARATION OF THE UNAUDITED PROFORMA FINANCIAL INFORMATION

The unaudited proforma financial information set out in this report, expressed in Singapore dollars (“SGD” or “S$”), unless otherwise stated, has been prepared for illustration purposes only and based on certain assumptions, after making certain adjustments, to show the unaudited proforma combined balance sheet of the Group as at 31 December 2010, the unaudited proforma combined statement of comprehensive income and the unaudited proforma combined statement of cash flows of the Group for the year ended 31 December 2010.

The unaudited proforma financial information have been compiled based on the audited combined financial statements of the Group for the year ended 31 December 2010, which were prepared in accordance with the Singapore Financial Reporting Standards.

The unaudited proforma financial information reflect what the:

(a) unaudited combined financial position of the Group as at 31 December 2010 would have been if the Significant Events as described in Note 2 had occurred on 31 December 2010;

(b) unaudited combined financial results of the Group for the year ended 31 December 2010 would have been if the Significant Events as described in Note 2 had occurred on 1 January 2010; and


31 DECEMBER 2010

B-8

(c) unaudited combined cash flows of the Group for the year ended 31 December 2010 would have been if the Significant Events as described in Note 2 had occurred on 1 January 2010.

The unaudited proforma financial information is not necessarily indicative of the financial position, results and cash flows of the operations that would have been attained had the Significant Events actually occurred earlier. The unaudited proforma financial information have been prepared for illustrative purposes only, and because of their nature, may not give a true picture of the actual financial position, results of operations and cash flows of the Group.

4 UNAUDITED PROFORMA COMBINED BALANCE SHEET OF THE GROUP

(a) The unaudited proforma combined balance sheet has been prepared to illustrate what the financial position of the Group as at 31 December 2010 would have been if:

(i) The cash dividends of SGD 927,058, declared by Sheng Siong Supermarket Pte Ltd on 11 March 2011 had taken place on 31 December 2010, to reduce retained earnings as at 31 December 2010 to SGD 32,954,246.

Proforma adjustments have been made as follows:

- Recognition of dividend payout of SGD 927,058 in the retained earnings accounts, to reduce retained earnings as at 31 December 2010 to SGD32,954,246; and

- Recognition of cash payout of SGD 927,058 from cash and cash equivalents.

(ii) The return of all the paid up share capital of CMM Marketing Management Pte Ltd and Sheng Siong Supermarket Pte Ltd, save for 5,000,000 shares of $1 each for each company, to Lim Hock Chee, Lim Hock Eng, and Lim Hock Leng had taken place on 31 December 2010.

Proforma adjustments have been made as follows:

- Recognition of return of share capital of SGD 20,000,000 as at 31 December 2010, the effect of which is to reduce paid up share capital in each company to $5,000,000; and

- Recognition of cash payout of SGD 20,000,000 from cash and cash equivalents as at 31 December 2010.

(b) The share capital of SS Malaysia at SGD3 as at 31 December 2010.

5 EFFECTS ON UNAUDITED PROFORMA COMBINED STATEMENTS OF CASH FLOWS

(a) The dividends and return of share capital, which are reflected as proforma adjustments in preparing the unaudited proforma combined balance sheet, will have effects on the unaudited proforma cash flows of the proforma group. Accordingly, the unaudited proforma combined statement of cash flows have been represented assuming the Significant Events as described in Note 2 had occurred on 1 January 2010.

(b) In arriving at the unaudited proforma combined statement of cash flows for the year ended 31 December 2010, the following proforma adjustments were made:

(i) Recognition of cash payment of SGD 927,058 for the dividends paid on 31 December 2010; and

(ii) Recognition of cash payment of SGD 20,000,000 for the return of share capital on 31 December 2010.


31 DECEMBER 2010

The discussion below provides information about certain provisions of our Memorandum of Association and Articles of Association and the laws of Singapore. This description is only a summary and is qualified by reference to Singapore law and our Memorandum of Association and Articles of Association.

The instruments that constitute and define our Company are the Memorandum of Association and Articles of Association.

Memorandum of Association

The registration number with which our Company was incorporated is 201023989Z. Our Memorandum of Association states that the liability of our Shareholders is limited to the amount, if any, for the time being unpaid on the shares respectively held by them. Our Memorandum of Association also sets out the objects for which our Company was formed, including acting as a holding and investment company, and the powers of our Company, including the powers set out in the First Schedule to the Companies Act.

Articles of Association

The provisions in the Articles of Association of our Company relating to:

(a) a Director’s power to vote on a proposal, arrangement or contract in which the Director is interested

Article 100

A Director shall not vote in respect of any contract or arrangement or any other proposal whatsoever in which he has any personal material interest, directly or indirectly. A Director shall not be counted in the quorum at a meeting in relation to any resolution on which he is debarred from voting.

(b) the Director’s power to vote on remuneration (including pension or other benefits) for himself or for any other director, and whether the quorum at an meeting of the board of Directors to vote on Directors’ remuneration may include the director whose remuneration is the subject of the vote

Article 77

The ordinary remuneration of the Directors, which shall from time to time be determined by an Ordinary Resolution of the Company, shall not be increased except pursuant to an Ordinary Resolution passed at a General Meeting where notice of the proposed increase shall have been given in the notice convening the General Meeting and shall (unless such resolution otherwise provides) be divisible among the Directors as they may agree, or failing agreement, equally, except that any Director who shall hold office for part only of the period in respect of which such remuneration is payable shall be entitled only to rank in such division for a proportion of remuneration related to the period during which he has held office. The ordinary remuneration of an executive Director may not include a commission on or a percentage of turnover and the ordinary remuneration of a non-executive Director shall be a fixed sum, and not by a commission on or a percentage of profits or turnover.

Article 78

Any Director who holds any executive office, or who serves on any committee of the Directors, or who otherwise performs services which in the opinion of the Directors are outside the scope of the ordinary duties of a Director, may be paid such extra remuneration by way of salary, commission or otherwise as the Directors may determine, provided that such extra remuneration (in case of an executive Director) shall not be by way of commission on or a percentage of turnover and (in the case of a Director other than a non-executive Director) shall be a fixed sum, and not by a commission on or a percentage of profits or turnover.

Article 79

The Directors may repay to any Director all such reasonable expenses as he may incur in attending and returning from meetings of the Directors or of any committee of the Directors or General Meetings or otherwise in or about the business of the Company.

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APPENDIX C: SUMMARY OF MEMORANDUM AND ARTICLES OF ASSOCIATION OF OUR COMPANY

Article 80

The Directors shall have power to pay and agree to pay pensions or other retirement, superannuation, death or disability benefits to (or to any person in respect of) any Director for the time being holding any executive office and for the purpose of providing any such pensions or other benefits to contribute to any scheme or to pay premiums.

(c) borrowing powers exercisable by the Directors and how such borrowing powers can be varied

Article 108

Subject as hereinafter provided and to the provisions of the Statutes, the Directors may exercise all the powers of the Company to borrow money, to mortgage or charge its undertaking, property and uncalled capital and to issue debentures and other securities, whether outright or as collateral security for any debt, liability or obligation of the Company or of any third party.

(d) retirement or non-retirement of Directors under an age limit requirement

Article 89

At each Annual General Meeting, one-third of the Directors for the time being (or, if their number is not a multiple of three (3), the number nearest to but not less than one-third) shall retire from office by rotation, provided that no Director holding office as Managing Director shall be subject to retirement by rotation or be taken into account in determining the number of Directors to retire. For the avoidance of doubt, each Director (other than a Director holding office as Managing Director) shall retire at least once every three (3) years.

Article 90

The Directors to retire by rotation shall include (so far as necessary to obtain the number required) any Director who is due to retire at a General Meeting by reason of age or who wishes to retire and not to offer himself for re-election. Any further Directors so to retire shall be those of the other Directors subject to retirement by rotation who have been longest in office since their last re-election or appointment and so that as between persons who became or were last re-elected Directors on the same day, those to retire shall (unless they otherwise agree among themselves) be determined by ballot. A retiring Director shall be eligible for re-election.

Article 91

The Company at a General Meeting at which a Director retires under any provision of these Articles may by Ordinary Resolution fill the office being vacated by electing thereto the retiring Director or some other person eligible for appointment. In default, the retiring Director shall be deemed to have been re-elected except in any of the following cases:

(a) where at such meeting it is expressly resolved not to fill such office or a resolution for the re-election of such Director is put to the meeting and lost; or

(b) where such Director has given notice in writing to the Company that he is unwilling to be re-elected; or

(c) where the default is due to the moving of a resolution in contravention of the next following Article; or

(d) where such Director has attained any retiring age applicable to him as Director.

The retirement shall not have effect until the conclusion of the meeting except where a resolution is passed to elect some other person in the place of the retiring Director or a resolution for his re-election is put to the meeting and lost and accordingly a retiring Director who is re-elected or deemed to have been re-elected will continue in office without a break.

(e) the number of shares, if any, required for Director’s qualification

C-2


Article 76

A Director shall not be required to hold any shares of the Company by way of qualification. A Director who is not a Member of the Company shall nevertheless be entitled to receive notice of and to attend and speak at General Meetings.

(f) rights, preferences and restrictions attaching to each class of shares

Article 3

(A) Subject to the Act and to these Articles, no shares may be issued by the Directors without the prior approval of the Company in General Meeting pursuant to Section 161 of the Act or except as permitted under the rules of the Designated Stock Exchange, but subject thereto and the terms of such approval, and to Article 5, and to any special rights attached to any shares for the time being issued, the Directors may allot and issue shares or grant options over or otherwise dispose of the same to such persons on such terms and conditions and for such consideration and at such time and whether or not subject to the payment of any part of the amount thereof in cash or otherwise as the Directors may think fit, and any shares may, subject to compliance with Sections 70 and 75 of the Act, be issued with such preferential, deferred, qualified or special rights, privileges, conditions or restrictions, whether as regards Dividend, return of capital, participation in surplus assets and profits, voting, conversion or otherwise, as the Directors may think fit, and preference shares may be issued which are or at the option of the Company are liable to be redeemed, the terms and manner of redemption being determined by the Directors in accordance with the Act, Provided Always that no options shall be granted over unissued shares except in accordance with the Act and the Designated Stock Exchange’s listing rules.

(B) The Directors may, at any time after the allotment of any share but before any person has been entered in the Register of Members as the holder, recognise a renunciation thereof by the allottee in favour of some other person and may accord to any allottee of a share a right to effect such renunciation upon and subject to such terms and conditions as the Directors may think fit to impose.

(C) Except so far as otherwise provided by the conditions of issue or by these Articles, all new shares shall be issued subject to the provisions of the Statutes and of these Articles with reference to allotment, payment of calls, lien, transfer, transmission, forfeiture or otherwise.

Article 8

(A) In the event of preference shares being issued, the total number of issued preference shares shall not at any time exceed the total number of the issued ordinary shares. Preference shareholders shall have the same rights as ordinary shareholders as regards receiving of notices, reports and balance-sheets and attending General Meetings of the Company, and preference shareholders shall also have the right to vote at any General Meeting convened for the purpose of reducing capital or winding-up or sanctioning a sale of the undertaking of the Company or where the proposal to be submitted to the General Meeting directly affects their rights and privileges or when the Dividend on the preference shares is more than 6 months in arrear.

(B) The Company has power to issue further preference capital ranking equally with, or in priority to, preference shares already issued.

Article 9

(A) Whenever the share capital of the Company is divided into different classes of shares, the variation or abrogation of the special rights attached to any class may, subject to the provisions of the Act, be made either with the consent in writing of the holders of three-quarters of the total number of the issued shares of the class or with the sanction of a Special Resolution passed at a separate General Meeting of the holders of the shares of the class (but not otherwise) and may be so made either whilst the Company is a going concern

C-3


or during or in contemplation of a winding-up. To every such separate General Meeting all the provisions of these Articles relating to General Meetings of the Company and to the proceedings thereat shall mutatis mutandis apply, except that the necessary quorum shall be 2 or more persons holding at least one-third of the total number of the issued shares of the class present in person or by proxy or attorney and that any holder of shares of the class present in person or by proxy or attorney may demand a poll and that every such holder shall on a poll have one (1) vote for every share of the class held by him where the class is a class of equity shares within the meaning of Section 64(1) of the Act or at least one (1) vote for every share of the class where the class is a class of preference shares within the meaning of Section 180(2) of the Act, Provided Always that where the necessary majority for such a Special Resolution is not obtained at such General Meeting, the consent in writing, if obtained from the holders of three-quarters of the total number of the issued shares of the class concerned within two (2) months of such General Meeting, shall be as valid and effectual as a Special Resolution carried at such General Meeting.

(B) The provisions in Article 9(A) shall mutatis mutandis apply to any repayment of preference capital (other than redeemable preference capital) and any variation or abrogation of the rights attached to preference shares or any class thereof.

(C) The special rights attached to any class of shares having preferential rights shall not unless otherwise expressly provided by the terms of issue thereof be deemed to be varied by the creation or issue of further shares ranking as regards participation in the profits or assets of the Company in some or all respects pari passu therewith but in no respect in priority thereto.

Article 14

Every person whose name is entered as a Member in the Register of Members shall be entitled, within 10 market days (or such period as the Directors may determine having regard to any limitation thereof as may be prescribed by the Designated Stock Exchange from time to time) after the closing date of any application for shares or (as the case may be) the date of lodgement of a registrable transfer, to one (1) certificate for all his shares of any one (1) class or to several certificates in reasonable denominations each for a part of the shares so allotted or transferred.

Article 34

(A) There shall be no restriction on the transfer of fully paid up shares (except where required by law or by the rules, bye-laws or listing rules of the Designated Stock Exchange) but the Directors may in their discretion decline to register any transfer of shares upon which the Company has a lien, and in the case of shares not fully paid up, may refuse to register a transfer to a transferee of whom they do not approve, Provided Always that in the event of the Directors refusing to register a transfer of shares, the Company shall within 10 market days (or such period as the Directors may determine having regard to any limitation thereof as may be prescribed by the Designated Stock Exchange from time to time) after the date on which the application for a transfer of shares was made, serve a notice in writing to the applicant stating the facts which are considered to justify the refusal as required by the Statutes.

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(B) The Directors may decline to register any instrument of transfer unless:

(a) such fee not exceeding $2.00 (or such other fee as the Directors may determine having regard to any limitation thereof as may be prescribed by the Act and the Designated Stock Exchange from time to time) as the Directors may from time to time require is paid to the Company in respect thereof;

(b) the amount of proper duty (if any) with which each instrument of transfer is chargeable under any law for the time being in force relating to stamps is paid;

(c) the instrument of transfer is deposited at the Office or at such other place (if any) as the Directors may appoint accompanied by a certificate of payment of stamp duty (if stamp duty is payable on such instrument of transfer in accordance with any law for the time being in force relating to stamp duty), the certificates of the shares to which it relates, and such other evidence as the Directors may reasonably require to show the right of the transferor to make the transfer and, if the instrument of transfer is executed by some other person on his behalf, the authority of the person so to do; and

(d) the instrument of transfer is in respect of only one (1) class of shares.

Article 41

A reference to a Member shall be a reference to a registered holder of shares in the Company, or where such registered holder is CDP, the Depositors on behalf of whom CDP holds the shares, Provided that:

(a) a Depositor shall only be entitled to attend any General Meeting and to speak and vote thereat if his name appears on the Depository Register maintained by CDP 48 hours before the General Meeting as a Depositor on whose behalf CDP holds shares in the Company, the Company being entitled to deem each such Depositor, or each proxy of a Depositor who is to represent the entire balance standing to the Securities Account of the Depositor, to represent such number of shares as is actually credited to the Securities Account of the Depositor as at such time, according to the records of CDP as supplied by CDP to the Company, and where a Depositor has apportioned the balance standing to his Securities Account between two (2) proxies, to apportion the said number of shares between the two (2) proxies in the same proportion as previously specified by the Depositor in appointing the proxies; and accordingly no instrument appointing a proxy of a Depositor shall be rendered invalid merely by reason of any discrepancy between the proportion of Depositor’s shareholding specified in the instrument of proxy, or where the balance standing to a Depositor’s Securities Account has been apportioned between two (2) proxies the aggregate of the proportions of the Depositor’s shareholding they are specified to represent, and the true balance standing to the Securities Account of a Depositor as at the time of the General Meeting, if the instrument is dealt with in such manner as is provided above;

(b) the payment by the Company to CDP of any Dividend payable to a Depositor shall to the extent of the payment discharge the Company from any further liability in respect of the payment;

(c) the delivery by the Company to CDP of provisional allotments or share certificates in respect of the aggregate entitlements of Depositors to new shares offered by way of rights issue or other preferential offering or bonus issue shall to the extent of the delivery discharge the Company from any further liability to each such Depositor in respect of his individual entitlement; and

(d) the provisions in these Articles relating to the transfers, transmissions or certification of shares shall not apply to the transfer of book-entry securities (as defined in the Statutes).

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Article 42

Except as required by the Statutes or law, no person shall be recognised by the Company as holding any share upon any trust, and the Company shall not be bound by or compelled in any way to recognise (even when having notice thereof) any equitable, contingent, future or partial interest in any share, or any interest in any fractional part of a share, or (except only as by these Articles or by the Statutes or law otherwise provided) any other right in respect of any share, except an absolute right to the entirety thereof in the registered holder and nothing in these Articles contained relating to CDP or to Depositors or in any depository agreement made by the Company with any common depository for shares shall in any circumstances be deemed to limit, restrict or qualify the above.

Article 63

In the case of joint holders of a share, the vote of the senior who tenders a vote, whether in person or by proxy, shall be accepted to the exclusion of the votes of the other joint holders and for this purpose seniority shall be determined by the order in which the names stand in the Register of Members or, as the case may be, the order in which the names appear in the Depository Register in respect of the joint holding.

Article 64

Where in Singapore or elsewhere a receiver or other person (by whatever name called) has been appointed by any court claiming jurisdiction in that behalf to exercise powers with respect to the property or affairs of any Member on the ground (however formulated) of mental disorder, the Directors may in their absolute discretion, upon or subject to production of such evidence of the appointment as the Directors may require, permit such receiver or other person on behalf of such Member, to vote in person or by proxy at any General Meeting, or to exercise any other right conferred by Membership in relation to General Meetings.

Article 65

No Member shall be entitled in respect of shares held by him to vote at a General Meeting either personally or by proxy or to exercise any other right conferred by membership in relation to General Meetings if any call or other sum payable by him to the Company in respect of such shares remains unpaid.

(g) any change in capital

Article 10

The Company may by Ordinary Resolution:

(a) consolidate and divide all or any of its share capital;

(b) sub-divide its shares, or any of them, provided always that in such subdivision the proportion between the amount paid and the amount (if any) unpaid on each reduced share shall be same as it was in the case of the share from which the reduced share is derived;

(c) convert or exchange any class of shares into or for any other class of shares; and/or

(d) cancel the number of shares which at the date of the passing of the resolution in that behalf have not been taken or agreed to be taken by any person or which have been forfeited and diminish the amount of its share capital by the number of the shares so cancelled.

Article 11

(A) The Company may reduce its share capital or any other undistributable reserve in any manner permitted, and with, and subject to, any incident authorized, and consent or confirmation required, by law.

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(B) The Company may purchase or otherwise acquire its issued shares subject to and in accordance with the provisions of the Statutes and any applicable rules of the Designated Stock Exchange (hereafter, the “Relevant Laws”), on such terms and subject to such conditions as the Company may in General Meeting prescribe in accordance with the Relevant Laws. Any shares purchased or acquired by the Company as aforesaid shall, unless held in treasury in accordance with the Act, be deemed to be cancelled immediately on purchase or acquisition by the Company. On the cancellation of any share as aforesaid, the rights and privileges attached to that share shall expire. In any other instance, the Company may hold or deal with any such share which is so purchased or acquired by it in such manner as may be permitted by, and in accordance with the Relevant Laws. Without prejudice to the generality of the foregoing, upon cancellation of any share purchased or otherwise acquired by the Company pursuant to these Articles and the Statutes, the number of issued shares of the Company shall be diminished by the number of shares so cancelled, and, where any such cancelled share was purchased or acquired out of the capital of the Company, the amount of share capital of the Company shall be reduced accordingly.

(h) any change in the respective rights of the various classes of shares including the action necessary to change the rights

Article 9

(A) Whenever the share capital of the Company is divided into different classes of shares, the variation or abrogation of the special rights attached to any class may, subject to the provisions of the Act, be made either with the consent in writing of the holders of three-quarters of the total number of the issued shares of the class or with the sanction of a Special Resolution passed at a separate General Meeting of the holders of the shares of the class (but not otherwise) and may be so made either whilst the Company is a going concern or during or in contemplation of a winding-up. To every such separate General Meeting all the provisions of these Articles relating to General Meetings of the Company and to the proceedings thereat shall mutatis mutandis apply, except that the necessary quorum shall be 2 or more persons holding at least one-third of the total number of the issued shares of the class present in person or by proxy or attorney and that any holder of shares of the class present in person or by proxy or attorney may demand a poll and that every such holder shall on a poll have one (1) vote for every share of the class held by him where the class is a class of equity shares within the meaning of Section 64(1) of the Act or at least one (1) vote for every share of the class where the class is a class of preference shares within the meaning of Section 180(2) of the Act, Provided Always that where the necessary majority for such a Special Resolution is not obtained at such General Meeting, the consent in writing, if obtained from the holders of three-quarters of the total number of the issued shares of the class concerned within two (2) months of such General Meeting, shall be as valid and effectual as a Special Resolution carried at such General Meeting.

(B) The provisions in Article 9(A) shall mutatis mutandis apply to any repayment of preference capital (other than redeemable preference capital) and any variation or abrogation of the rights attached to preference shares or any class thereof.

(C) The special rights attached to any class of shares having preferential rights shall not unless otherwise expressly provided by the terms of issue thereof be deemed to be varied by the creation or issue of further shares ranking as regards participation in the profits or assets of the Company in some or all respects pari passu therewith but in no respect in priority thereto.

(i) dividends and distribution

Article 123

Subject to the Act, the Company may by Ordinary Resolution declare Dividends but no such Dividend shall exceed the amount recommended by the Directors.

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Article 124

If and so far as in the opinion of the Directors, the profits of the Company justify such payments, the Directors may declare and pay the fixed Dividends on any class of shares carrying a fixed Dividend expressed to be payable on fixed dates on the half-yearly or other dates prescribed for the payment thereof and may also from time to time declare and pay interim Dividends on shares of any class of such amounts and on such dates and in respect of such periods as they think fit.

Article 125

Subject to any rights or restrictions attached to any shares or class of shares and except as otherwise permitted under the Act:

(a) all Dividends in respect of shares must be paid in proportion to the number of shares held by a Member otherwise than in advance of calls, but where shares are partly paid, all Dividends must be apportioned and paid proportionately to the amounts paid or credited as paid on the partly paid shares; and

(b) all Dividends must be apportioned and paid proportionately to the amounts so paid or credited as paid during any portion or portions of the period in respect of which the Dividend is paid. For the purposes of this Article, an amount paid or credited as paid on a share in advance of a call is to be ignored.

Article 126

(A) No Dividend shall be paid otherwise than out of profits available for distribution under the provisions of the Statutes. The payment by the Directors of any unclaimed dividends or other moneys payable on or in respect of a share into a separate account shall not constitute the Company a trustee in respect thereof. All Dividends remaining unclaimed after one (1) year from having been first payable may be invested or otherwise made use of by the Directors for the benefit of the Company, and any Dividend or any such moneys unclaimed after six (6) years from having been first payable shall be forfeited and shall revert to the Company provided always that the Directors may at any time thereafter at their absolute discretion annul any such forfeiture and pay the Dividend so forfeited to the person entitled thereto prior to the forfeiture. If CDP returns any such Dividend or moneys to the Company, the relevant Depositor shall not have any right or claim in respect of such Dividend or moneys against the Company if a period of six (6) years has elapsed from the date of the declaration of such Dividend or the date on which such other moneys are first payable.

(B) A payment by the Company to CDP of any Dividend or other moneys payable to a Depositor shall, to the extent of the payment made, discharge the Company from any liability to the Depositor in respect of that payment.

Article 127

No Dividend or other monies payable on or in respect of a share shall bear interest as against the Company.

Article 128

(A) The Directors may retain any Dividend or other monies payable on or in respect of a share on which the Company has a lien and may apply the same in or towards satisfaction of the debts, liabilities or engagements in respect of which the lien exists.

(B) The Directors may retain the Dividends payable upon shares in respect of which any person is under the provisions as to the transmission of shares hereinbefore contained entitled to become a Member, or which any person is under those provisions entitled to transfer, until such person shall become a Member in respect of such shares or shall transfer the same.

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Article 129

The waiver in whole or in part of any Dividend on any share by any document (whether or not under seal) shall be effective only if such document is signed by the Member (or the person entitled to the share in consequence of the death or bankruptcy of the holder) and delivered to the Company and if or to the extent that the same is accepted as such or acted upon by the Company.

Article 130

Subject to the provisions of the Act, the Company may upon the recommendation of the Directors by Ordinary Resolution direct payment of a Dividend in whole or in part by the distribution of specific assets (and in particular of paid-up shares or debentures of any other company) and the Directors shall give effect to such resolution. Where any difficulty arises with regard to such distribution, the Directors may settle the same as they think expedient and in particular, may issue fractional certificates, may fix the value for distribution of such specific assets or any part thereof, may determine that cash payments shall be made to any Member upon the footing of the value so fixed in order to adjust the rights of all parties and may vest any such specific assets in trustees as may seem expedient to the Directors.

Article 131

Any Dividend or other moneys payable in cash on or in respect of a share may be paid by cheque or warrant sent through the post to the registered address appearing in the Register of Members or (as the case may be) the Depository Register of the Member or person entitled thereto (or, if two (2) or more persons are registered in the Register of Members or (as the case may be) entered in the Depository Register as joint holders of the share or are entitled thereto in consequence of the death or bankruptcy of the holder, to any one of such persons) or to such person and such address as such Member or person or persons may by writing direct. Every such cheque or warrant shall be made payable to the order of the person to whom it is sent or to such person as the holder or joint holders or person or persons entitled to the share in consequence of the death or bankruptcy of the holder may direct and payment of the cheque or warrant by the banker upon whom it is drawn shall be a good discharge to the Company. Every such cheque or warrant shall be sent at the risk of the person entitled to the money represented thereby.

Article 132

If two (2) or more persons are registered in the Register of Members or (as the case may be) the Depository Register as joint holders of any share, or are entitled jointly to a share in consequence of the death or bankruptcy of the holder, any one of them may give effectual receipts for any Dividend or other moneys payable or property distributable on or in respect of the share.

Article 133

Any resolution declaring a Dividend on shares of any class, whether a resolution of the Company in General Meeting or a resolution of the Directors, may specify that the same shall be payable to the persons registered as the holders of such shares in the Register of Members or (as the case may be) the Depository Register at the close of business on a particular date and thereupon the Dividend shall be payable to them in accordance with their respective holdings so registered, but without prejudice to the rights inter se in respect of such Dividend of transferors and transferees of any such shares.

(j) any limitation on the right to own Shares, including limitations on the right of non-resident or foreign Shareholders to hold or exercise voting rights on their Shares

Article 5

(A) Subject to any direction to the contrary that may be given by the Company in General Meeting or except as permitted by the rules of the Designated Stock Exchange, all new shares shall before issue be offered to such persons who as at the date (as determined by the Directors) of the offer are entitled to receive notices from the Company of General Meetings in proportion, as far as the circumstances admit, to the number of the existing

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shares to which they are entitled. The offer shall be made by notice specifying the number of shares offered, and limiting a time within which the offer, if not accepted, will be deemed to be declined, and, after the expiration of that time, or on the receipt of an intimation from the person to whom the offer is made that he declines to accept the shares offered, the Directors may dispose of those shares in such manner as they think most beneficial to the Company. The Directors may likewise so dispose of any new shares which (by reason of the ratio which the new shares bear to shares held by persons entitled to an offer of new shares) cannot, in the opinion of the Directors, be conveniently offered under this Article 5(A).

(B) Notwithstanding Article 5(A) above, the Company may by Ordinary Resolution in General Meeting give to the Directors a general authority, either unconditionally or subject to such conditions as may be specified in the Ordinary Resolution, to:

(a) (i) issue shares in the capital of the Company (“shares”) whether by way of rights, bonus or otherwise; and/or

(ii) make or grant offers, agreements or options (collectively, “Instruments”) that might or would require shares to be issued, including but not limited to the creation and issue of (as well as adjustments to) warrants, debentures or other instruments convertible into shares; and

(b) (notwithstanding the authority conferred by the Ordinary Resolution may have ceased to be in force) issue shares in pursuance of any Instrument made or granted by the Directors while the Ordinary Resolution was in force,

Provided that:

(1) the aggregate number of shares to be issued pursuant to the Ordinary Resolution (including shares to be issued in pursuance of Instruments made or granted pursuant to the Ordinary Resolution) shall be subject to such limits and manner of calculation as may be prescribed by the Designated Stock Exchange;

(2) in exercising the authority conferred by the Ordinary Resolution, the Company shall comply with the provisions of the Invitation rules of the Designated Stock Exchange for the time being in force (unless such compliance is waived by the Designated Stock Exchange) and these Articles; and

(3) (unless revoked or varied by the Company in General Meeting) the authority conferred by the Ordinary Resolution shall not continue in force beyond the conclusion of the Annual General Meeting of the Company next following the passing of the Ordinary Resolution, or the date by which such Annual General Meeting of the Company is required by law to be held, or the expiration of such other period as may be prescribed by the Act (whichever is the earliest).

(C) The Company may, notwithstanding Articles 5(A) and 5(B) above, authorize the Directors not to offer new shares to Members to whom by reason of foreign securities laws, such offers may not be made without registration of the shares or a prospectus or other document, but to sell the entitlements to the new shares on behalf of such Members on such terms and conditions as the Company may direct.

Article 34

(A) There shall be no restriction on the transfer of fully paid up shares (except where required by law or by the rules, bye-laws or listing rules of the Designated Stock Exchange) but the Directors may in their discretion decline to register any transfer of shares upon which the Company has a lien, and in the case of shares not fully paid up, may refuse to register a transfer to a transferee of whom they do not approve, Provided Always that in the event of the Directors refusing to register a transfer of shares, the Company shall within 10 market

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days (or such period as the Directors may determine having regard to any limitation thereof as may be prescribed by the Designated Stock Exchange from time to time) after the date on which the application for a transfer of shares was made, serve a notice in writing to the applicant stating the facts which are considered to justify the refusal as required by the Statutes.

(B) The Directors may decline to register any instrument of transfer unless:

(a) such fee not exceeding $2.00 (or such other fee as the Directors may determine having regard to any limitation thereof as may be prescribed by the Act and the Designated Stock Exchange from time to time) as the Directors may from time to time require is paid to the Company in respect thereof;

(b) the amount of proper duty (if any) with which each instrument of transfer is chargeable under any law for the time being in force relating to stamps is paid;

(c) the instrument of transfer is deposited at the Office or at such other place (if any) as the Directors may appoint accompanied by a certificate of payment of stamp duty (if stamp duty is payable on such instrument of transfer in accordance with any law for the time being in force relating to stamp duty), the certificates of the shares to which it relates, and such other evidence as the Directors may reasonably require to show the right of the transferor to make the transfer and, if the instrument of transfer is executed by some other person on his behalf, the authority of the person so to do; and

(d) the instrument of transfer is in respect of only one (1) class of shares.

Article 42

Except as required by the Statutes or law, no person shall be recognised by the Company as holding any share upon any trust, and the Company shall not be bound by or compelled in any way to recognise (even when having notice thereof) any equitable, contingent, future or partial interest in any share, or any interest in any fractional part of a share, or (except only as by these presents or by the Statutes or law otherwise provided) any other right in respect of any share, except an absolute right to the entirety thereof in the registered holder and nothing in these Articles contained relating to CDP or to Depositors or in any depository agreement made by the Company with any common depository for shares shall in any circumstances be deemed to limit, restrict or qualify the above.

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The following statements are brief summaries of the rights and privileges of Shareholders conferred by the laws of Singapore and the Memorandum of Association and Articles of Association (the “Articles”) of the Company.

These statements summarise the material provisions of the Articles but are qualified in entirety by reference to the Articles.

ORDINARY SHARES

All of the ordinary shares of the Company are in registered form. The Company may, subject to the provisions of the Companies Act and the rules of the SGX-ST, purchase its own ordinary shares. However, it may not, except in circumstances permitted by the Companies Act, grant any financial assistance for the acquisition or proposed acquisition of its own ordinary shares.

NEW ORDINARY SHARES

New ordinary shares may only be issued with the prior approval in a general meeting of the shareholders of the Company. The aggregate number of shares to be issued pursuant to such approval may not exceed 50% (or such other limit as may be prescribed by the SGX-ST) of its issued share capital at the time of grant of such approval for the time being, of which the aggregate number of shares to be issued other than on a pro-rata basis to its shareholders may not exceed 20% (or such other limit as may be prescribed by the SGX-ST) of its issued share capital at the time of grant of such approval for the time being. The approval, if granted, will lapse at the conclusion of the annual general meeting following the date on which the approval was granted. Subject to the foregoing, the provisions of the Companies Act and any special rights attached to any class of shares currently issued, all new ordinary shares are under the control of the board of Directors of the Company (the “Board of Directors”) who may allot and issue the same with such rights and restrictions as it may think fit.

SHAREHOLDERS

Only persons who are registered in the register of shareholders of the Company and, in cases in which the person so registered is the CDP, the persons named as the depositors in the depository register maintained by CDP for the ordinary shares, are recognised as shareholders of the Company. The Company will not, except as required by law, recognise any equitable, contingent, future or partial interest in any ordinary share or other rights for any ordinary share other than the absolute right thereto of the registered holder of that ordinary share or of the person whose name is entered in the depository register for that ordinary share. The Company may close the register of shareholders for any time or times if it provides the Singapore Registry of Companies and Businesses at least 14 days’ notice and the SGX-ST at least 10 clear market days’ notice. However, the register may not be closed for more than 30 days in aggregate in any calendar year. The Company typically closes the register to determine shareholders’ entitlement to receive dividends and other distributions.

TRANSFER OF ORDINARY SHARES

There is no restriction on the transfer of fully paid ordinary shares except where required by law or the Invitation rules or the rules or by-laws of any stock exchange on which the Company is listed. The Board of Directors may decline to register any transfer of ordinary shares which are not fully paid shares or ordinary shares on which the Company has a lien. Ordinary shares may be transferred by a duly signed instrument of transfer in a form approved by any stock exchange on which the Company is listed. The Board of Directors may also decline to register any instrument of transfer unless, among other things, it has been duly stamped and is presented for registration together with the share certificate and such other evidence of title as they may require. The Company will replace lost or destroyed certificates for ordinary shares if it is properly notified and if the applicant pays a fee which will not exceed $2 and furnishes any evidence and indemnity that the Board of Directors may require.

GENERAL MEETINGS OF SHAREHOLDERS

The Company is required to hold an annual general meeting every year. The Board may convene an Extraordinary General Meeting whenever it thinks fit and must do so if shareholders representing not less than 10% of the total voting rights of all shareholders request in writing that such a meeting be

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APPENDIX D: DESCRIPTION OF OUR SHARES

held. In addition, two (2) or more shareholders holding not less than 10% of the issued share capital of the Company may call a meeting. Unless otherwise required by law or by the Articles, voting at general meetings is by ordinary resolution, requiring an affirmative vote of a simple majority of the votes cast at that meeting. An ordinary resolution suffices, for example, for the appointment of directors. A special resolution, requiring the affirmative vote of at least 75% of the votes cast at the meeting, is necessary for certain matters under Singapore law, including voluntary winding up, amendments to the Memorandum of Association and the Articles, a change of the corporate name and a reduction in the share capital, share premium account or capital redemption reserve fund. The Company must give at least 21 days’ notice in writing for every general meeting convened for the purpose of passing a special resolution. Ordinary resolutions generally require at least 14 days’ notice in writing. The notice must be given to every shareholder who has supplied the Company with an address in Singapore for the giving of notices and must set forth the place, the day and the hour of the meeting and, in the case of special business, the general nature of that business.

VOTING RIGHTS

A shareholder is entitled to attend, speak and vote at any general meeting, in person or by proxy. Proxies need not be a shareholder. A person who holds ordinary shares through the SGX-ST book-entry settlement system will only be entitled to vote at a general meeting as a shareholder if his name appears on the depository register maintained by CDP 48 hours before the general meeting. Except as otherwise provided in the Articles, two (2) or more shareholders must be present in person or by proxy to constitute a quorum at any general meeting. Under the Articles, on a show of hands, every shareholder present in person and by proxy shall have one (1) vote (provided that in the case of a shareholder who is represented by two (2) proxies, only one (1) of the two (2) proxies as determined by that shareholder or, failing such determination, by the Chairman of the meeting in his sole discretion shall be entitled to vote on a show of hands), and on a poll, every shareholder present in person or by proxy shall have one (1) vote for each ordinary share which he holds or represents. A poll may be demanded in certain circumstances, including by the chairman of the meeting or by any shareholder present in person or by proxy and representing not less than 10% of the total voting rights of all shareholders having the right to attend and vote at the meeting or by any two (2) shareholders present in person or by proxy and entitled to vote. In the case of a tie vote, whether on a show of hands or a poll, the chairman of the meeting shall be entitled to a casting vote.

DIVIDENDS

The Company may, by ordinary resolution of its shareholders, declare dividends at a general meeting, but it may not pay dividends in excess of the amount recommended by the Board of Directors. The Company must pay all dividends out of its profits. The Board of Directors may also declare an interim dividend without the approval of its shareholders. All dividends are paid pro rata among the shareholders in proportion to the amount paid up on each shareholder’s ordinary shares, unless the rights attaching to an issue of any ordinary share provides otherwise. Unless otherwise directed, dividends are paid by cheque or warrant sent through the post to each shareholder at his registered address. Notwithstanding the foregoing, the payment by the Company to CDP of any dividend payable to a shareholder whose name is entered in the depository register shall, to the extent of payment made to CDP, discharge the Company from any liability to that shareholder in respect of that payment.

CAPITALISATION AND RIGHTS ISSUES

The Board of Directors may, with approval by the shareholders at a general meeting, capitalise any profits and distribute the same as shares credited as paid-up to the shareholders in proportion to their shareholdings. The Board of Directors may also issue rights to take up additional ordinary shares to shareholders in proportion to their shareholdings. Such rights are subject to any conditions attached to such issue and the regulations of any stock exchange on which the Company is listed.

TAKEOVERS

The Securities and Futures Act and the Singapore Code on Takeovers and Mergers regulate the acquisition of ordinary shares of public companies and contain certain provisions that may delay, deter or prevent a future takeover or change in control of the Company. Any person acquiring an interest, either

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on his own or together with parties acting in concert with him, in 30% or more of the voting shares in the Company must extend a takeover offer for the remaining voting shares in accordance with the provisions of the Singapore Code on Takeovers and Mergers. “Parties acting in concert’’ include a company and its related and Associated companies, a company and its directors (including their relatives), a company and its pension funds, a person and any investment company, unit trust or other fund whose investment such person manages on a discretionary basis, and a financial advisor and its client in respect of shares held by the financial advisor and shares in the client held by funds managed by the financial advisor on a discretionary basis. An offer for consideration other than cash must be accompanied by a cash alternative at not less than the highest price paid by the offeror or parties acting in concert with the offeror within the preceding 6 months. A mandatory takeover offer is also required to be made if a person holding, either on his own or together with parties acting in concert with him, between 30% and 50% of the voting rights acquires additional voting shares representing more than 1% of the voting shares in any 6 month period.

LIQUIDATION OR OTHER RETURN OF CAPITAL

If the Company liquidates or in the event of any other return of capital, holders of ordinary shares will be entitled to participate in any surplus assets in proportion to their shareholdings, subject to any special rights attaching to any other class of shares.

INDEMNITY

As permitted by Singapore law, the Articles provide that, subject to the Companies Act, the Board of Directors and officers shall be entitled to be indemnified by the Company against any liability incurred in defending any proceedings, whether civil or criminal, which relate to anything done or omitted to have been done as an officer, director or employee and in which judgment is given in their favour or in which they are acquitted or in connection with any application under any statute for relief from liability in respect thereof in which relief is granted by the court. The Company may not indemnify directors and officers against any liability which by law would otherwise attach to them in respect of any negligence, default, breach of duty or breach of trust of which they may be guilty in relation to the Company.

LIMITATIONS ON RIGHTS TO HOLD OR VOTE SHARES

Except as described in “Voting Rights” and “Takeovers” above, there are no limitations imposed by Singapore law or by the Articles on the rights of non-resident shareholders to hold or vote on ordinary shares.

MINORITY RIGHTS

The rights of minority shareholders of Singapore-incorporated companies are protected under Section 216 of the Companies Act, which gives the Singapore courts a general power to make any order, upon application by any shareholder of the Company, as they think fit to remedy any of the following situations:

(a) the affairs of the Company are being conducted or the powers of the Board of Directors are being exercised in a manner oppressive to, or in disregard of the interests of, one (1) or more of the shareholders; or

(b) the Company takes an action, or threatens to take an action, or the shareholders pass a resolution, or propose to pass a resolution, which unfairly discriminates against, or is otherwise prejudicial to, one (1) or more of the shareholders, including the applicant. Singapore courts have wide discretion as to the reliefs they may grant and those reliefs are in no way limited to those listed in the Companies Act itself. Without prejudice to the foregoing, Singapore courts may:

(a) direct or prohibit any act or cancel or vary any transaction or resolution;

(b) regulate the conduct of the affairs of the Company in the future;

(c) authorise civil proceedings to be brought in the name of, or on behalf of, the Company by a person or persons and on such terms as the court may direct;

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(d) provide for the purchase of a minority shareholder’s shares by the other shareholders or by the Company and, in the case of a purchase of shares by the Company, a corresponding reduction of its share capital;

(e) provide that the Articles be amended; or

(f) provide that the Company be wound up.

EXCHANGE CONTROLS

There are no Singapore governmental laws, decrees, regulations or other legislation that may affect the following:-

(a) the import or export of capital, including the availability of cash and cash equivalents for use by our Group; and

(b) the remittance of dividends, interest or other payments to non-resident holders of our Company’s securities.

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Applications are invited for the subscription and/or purchase of the Invitation Shares at the Issue Price subject to the following terms and conditions:

1. YOUR APPLICATION MUST BE MADE IN LOTS OF 1,000 INVITATION SHARES OR HIGHER INTEGRAL MULTIPLES THEREOF. APPLICATIONS FOR ANY OTHER NUMBER OF INVITATION SHARES WILL BE REJECTED.

2. Your application for Offer Shares may be made by way of the printed White Offer Shares Application Forms or by way of Electronic Applications through the ATMs of the Participating Banks. Applications for the Placement Shares may only be made by way of the printed Blue Placement Shares Application Forms. “Application Form” shall mean either Offer Shares Application Form or Placement Shares Application Form, as the context so requires. YOU MAY NOT USE YOUR CPF FUNDS TO APPLY FOR THE INVITATION SHARES.

3. You are allowed to submit only one (1) application in your own name for either the Offer Shares or the Placement Shares.

If you are submitting an application for the Offer Shares by way of an Application Form, you MAY NOT submit another application for the Offer Shares by way of an Electronic Application and vice versa. Such separate applications shall be deemed to be multiple applications and will be liable to be rejected at the discretion of our Company and the Vendors.

If you (not being an approved nominee company) have submitted an application in your own name, you should not submit any other application whether by way of an Application Form or by way of an Electronic Application, for any other person. Such separate applications shall be deemed to be multiple applications and will be liable to be rejected at the discretion of our Company and the Vendors.

If you have made an application for Placement Shares, you should not make any application for Offer Shares by way of an Application Form or by way of an Electronic Application and vice versa. Such separate applications shall be deemed to be multiple applications and will be liable to be rejected at the discretion of our Company and the Vendors.

Joint or multiple applications shall be rejected. If you submit or procure submissions of multiple share applications (whether for Offer Shares, Placement Shares or both Offer Shares and Placement Shares), you may be deemed to have committed an offence under the Penal Code Chapter 224 of Singapore and the Securities and Futures Act, and your applications may be referred to the relevant authorities for investigation. Multiple applications or those appearing to be or suspected of being multiple applications will be liable to be rejected at the discretion of our Company and the Vendors.

4. Our Company and the Vendors will not accept applications from any person under the age of 18 years, undischarged bankrupt, sole-proprietorship, partnership, non-corporate body, joint Securities Account holder and applicant whose address (furnished in his Application Form or, in the case of Electronic Application, contained in the records of the relevant Participating Bank, as the case may be) bear post office box number. No person acting or purporting to act on behalf of a deceased person is allowed to apply under the deceased’s Securities Account at the time of application.

5. Our Company and the Vendors will not recognise the existence of a trust. Any application by a trustee must be made in his own name and without qualification.

6. OUR COMPANY AND THE VENDORS WILL ONLY ACCEPT NOMINEE APPLICATIONS FROM APPROVED NOMINEE COMPANIES. Approved nominee companies are defined as banks, merchant banks, finance companies, insurance companies, licensed securities dealers in Singapore and nominee companies controlled by them. Applications made by persons acting as nominees other than approved nominee companies shall be rejected.

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APPENDIX E: TERMS, CONDITIONS AND PROCEDURES FOR APPLICATION AND ACCEPTANCE

7. IF YOU ARE NOT AN APPROVED NOMINEE COMPANY, YOU MUST MAINTAIN A SECURITIES ACCOUNT IN YOUR OWN NAME AT THE TIME OF YOUR APPLICATION. If you do not have an existing Securities Account in your own name at the time of your application, your application will be rejected (if your application is by way of an Application Form), or you will not be able to complete your Electronic Application (if your application is by way of an Electronic Application). If you have an existing Securities Account but fail to provide your Securities Account number, your application is liable to be rejected. Your application shall be rejected if your particulars such as name, NRIC/passport number, nationality, permanent residence status and Securities Account number, provided in your Application Form or in the case of an Electronic Application, contained in the records of the relevant Participating Bank, differ from those particulars in your Securities Account as maintained with CDP. If you possess more than one (1) individual direct Securities Account with CDP, your application shall be rejected.

8. Notwithstanding paragraph 7, if your address stated in the Application Form or, in the case of an Electronic Application, in the records of the relevant Participating Bank is different from the address registered with CDP, you must inform CDP of your updated address promptly, failing which the notification letter on successful allotment and other correspondence from the CDP will be sent to your address last registered with CDP.

9. Our Company and the Vendors reserve the right to reject any application which does not conform strictly to the instructions set out in the Application Forms and this Prospectus or which does not comply with the instructions for Electronic Applications or with the terms and conditions of this Prospectus or, in the case of an application by way of an Application Form, which is illegible, incomplete, incorrectly completed or which is accompanied by an improperly drawn or improper form of remittance. Our Company and the Vendors further reserve the right to treat as valid any application not completed or submitted or effected in all respects in accordance with the terms and conditions of this Prospectus, the instructions set out in the Application Forms or the instructions for the Electronic Applications and also to present for payment or other processes all remittances at any time after receipt and to have full access to all information relating to, or deriving from, such remittances or the processing thereof.

10. Our Company and the Vendors reserve the right to reject or accept any application in whole or in part, or to scale down or ballot any application, without assigning any reason therefore, and no enquiry and/or correspondence on the decision will be entertained. This right applies to applications made by way of Application Forms and by way of Electronic Applications. In deciding the basis of allotment and/ or allocation, which will be at the discretion of our Company and the Vendors, due consideration will be given to the desirability of allotting and/or allocating the Invitation Shares to a reasonable number of applicants with a view to establishing an adequate and orderly market for our Shares.

11. Share certificates will be registered in the name of CDP or its nominee and will be forwarded only to CDP. If your application is successful, it is expected that CDP will send to you, at your own risk, within 15 Market Days after the close of the Application List, a statement of account stating that your Securities Account has been credited with the number of Invitation Shares allotted and/or allocated to you. This will be the only acknowledgement of application monies received and is not an acknowledgement by our Company and the Vendors. You irrevocably authorise CDP to complete and sign on your behalf as transferee or renouncee any instrument of transfer and/or other documents required for the issue or transfer of the Invitation Shares allotted and/or allocated to you. This authorisation applies to applications made by way of Application Forms and by way of Electronic Applications.

12. In the event that our Company lodges a supplementary or replacement prospectus (“Relevant Document”) pursuant to the Securities and Futures Act or any applicable legislation in force from time to time prior to the close of the Application List, and the Invitation Shares have not been issued, we will (as required by law) at the sole and absolute discretion of our Company either:

(a) within two days (excluding any Saturday, Sunday or public holiday) from the date of the lodgement of the Relevant Document give you notice in writing of how to obtain, or arrange to receive, a copy of the same and provide you with an option to withdraw your application

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and take all reasonable steps to make available within a reasonable period the Relevant Document to you if you have indicated that you wish to obtain, or have arranged to receive, a copy of the Relevant Document;

(b) within seven days of the lodgment of the Relevant Document give you a copy of the Relevant Document and provide you with an option to withdraw your application; or

(c) deem your application as withdrawn and cancelled and refund your application monies (without interest or any share of revenue or other benefit arising therefrom) to you within seven days from the lodgement of the Relevant Document.

Any applicant who wishes to exercise his option under paragraphs 12(a) and (b) above to withdraw his application for the Invitation Shares shall, within 14 days from the date of lodgment of the Relevant Document, notify us whereupon we shall, within seven days from the receipt of such notification, return all monies in respect of such application (without interest or any share of revenue or other benefit arising therefrom) to him and at his own risk.

In the event that at the time of the lodgment of the Relevant Document, the Invitation Shares have already been issued but trading has not commenced, we will (as required by law), at the sole and absolute discretion of our Company, either:

(d) within two days (excluding Saturday, Sunday or public holiday) from the date of the lodgment of the Relevant Document, give you notice in writing of how to obtain, or arrange to receive, a copy of the same and provide you with an option to return to our Company the Invitation Shares which you do not wish to retain title in and take all reasonable steps to make available within a reasonable period the Relevant Document to you if you have indicated that you wish to obtain, or have arranged to receive, a copy of the Relevant Document;

(e) within seven days of the lodgment of the Relevant Document give you a copy of the Relevant Document and provide you with an option to return the Invitation Shares; or

(f) deem the issue as void and refund your payment for the Invitation Shares (without interest or any share of revenue or other benefit arising therefrom) within seven days from the lodgment of the Relevant Document.

Any applicant who wishes to exercise his option under paragraphs 12(d) and (e) above to return the Invitation Shares issued to him shall, within 14 days from the date of lodgment of the Relevant Document, notify us of this and return all documents, if any, purporting to be evidence of title of those Invitation Shares, whereupon we shall, within seven days from the receipt of such notification and documents, pay to him all monies paid by him for the Invitation Shares without interest or any share of revenue or other benefit arising therefrom and at his own risk, and the Invitation Shares issued to him shall be void.

Additional terms and instructions applicable upon the lodgment of the Relevant Document, including instructions on how you can exercise the option to withdraw your application or return the Invitation Shares allotted to you, may be found in such Relevant Document.

13. By completing and delivering an Application Form and, in the case of an Electronic Application, by pressing the “Enter” or “OK” or “Confirm” or “Yes” or any other relevant key on the ATM, in accordance with the provisions herein, you:

(a) irrevocably offer, agree and undertake to subscribe for and/or purchase the number of Invitation Shares specified in your application (or such smaller number for which the application is accepted) at the Issue Price and agree that you will accept such Invitation Shares as may be allotted and/or allocated to you, in each case on the terms of, and subject to the conditions set out in, this Prospectus and the Memorandum of Association and Articles of Association of our Company;

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(b) agree that in the event of any inconsistency between the terms and conditions for application set out in this Prospectus and those set out in the ATMs of the Participating Banks, the terms and conditions set out in this Prospectus shall prevail;

(c) agree that the aggregate Issue Price for the Invitation Shares applied for is due and payable to our Company or the Vendors upon application;

(d) warrant the truth and accuracy of the information contained, and representations and declarations made, in your application, and acknowledge and agree that such information, representations and declarations will be relied on by our Company and the Vendors in determining whether to accept your application and/or whether to allot and/or allocate any Invitation Shares to you; and

(e) agree and warrant that if the laws of any jurisdiction outside Singapore are applicable to your application, you have complied with such laws and none of our Company, the Vendors, the Issue Manager, Underwriter and Placement Agent will infringe any such laws as a result of the acceptance of your application.

14. In the event of an under-subscription for and/or purchase of the Offer Shares as at the close of the Application List, that number of Offer Shares not subscribed for shall be made available to satisfy applications for Placement Shares to the extent that there is an over-subscription for Placement Shares as at the close of the Application List.

In the event of an under-subscription for and/or purchase of the Placement Shares as at the close of the Application List, that number of Placement Shares not subscribed for shall be made available to satisfy excess applications for Offer Shares to the extent that there is an over-subscription for Offer Shares as at the close of the Application List.

In the event of an over-subscription for and/or purchase of the Offer Shares as at the close of the Application List and/or Placement Shares are fully subscribed as at the close of the Application List, the successful applications for Offer Shares will be determined by ballot or otherwise as determined by our Directors, after consultation with the Issue Manager, Underwriter and Placement Agent, and approved by the SGX-ST.

In the event of an under-subscription for and/or purchase of Offer Shares and/or Placement Shares as at the close of the Application List, the number of Offer Shares and/or Placement Shares under-subscribed shall be subscribed for by the Underwriter and the Placement Agents respectively.

In all the above instances, the basis of allotment and/or allocation of the Invitation Shares as may be decided by our Company and the Vendors, after consultation with the Issue Manager, Underwriter and Placement Agent, and approved by the SGX-ST, in ensuring a reasonable spread of the shareholders of our Company, shall be made public, as soon as practicable, via an announcement through the SGX-ST and by advertisement in a generally circulating daily press.

15. You consent to the disclosure of your name, NRIC/Passport number, address, nationality, permanent resident status, Securities Account number, CPF Investment Account number (if applicable) and share application amount from your account with the relevant Participating Bank to the Share Registrar for the Invitation and Singapore Share Transfer Agent, SCCS, SGX-ST, CDP, our Company, the Vendors and the Issue Manager, the Underwriter and the Placement Agent. You irrevocably authorise CDP to disclose the outcome of your application, including the number of Invitation Shares allotted and/or allocated to you pursuant to your application, to our Company, the Issue Manager, Underwriter and Placement Agent and/or any other parties so authorised by CDP, our Company and the Issue Manager, Underwriter and Placement Agent. CDP shall not be liable for any delays, failures or inaccuracies in the recording, storage or transmission or delivery of data relating to Electronic Applications.

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16. Acceptance of applications will be conditional upon, inter alia, our Company being satisfied that:

(a) permission has been granted by the SGX-ST to deal in and for quotation of all our existing Shares (including the Vendor Shares) and the New Shares on the Official List of the Main Board of the SGX-ST;

(b) no Stop Order has been issued by the Authority under the Securities and Futures Act; and

(c) the Management and Underwriting Agreement and the Placement Agreement referred to in the section entitled, “Other General Information – Management, Underwriting and Placement Agreements” of the Prospectus, have become unconditional and have not been terminated.

17. Any reference to “you” or the “applicant” in this Annexure shall include an individual, a corporation, an approved nominee company and trustee applying for the Offer Shares by way of an Offer Shares Application Form or by way of an Electronic Application or applying for Placement Shares by way of a Placement Shares Application Form or such other forms of applications as the Issue Manager, Underwriter and Placement Agent deem appropriate.

18. In the event that a Stop Order in respect of the Invitation Shares is served by the Authority or other competent authority, and:

(a) the Invitation Shares have not been issued, we will (as required by law) deem all applications withdrawn and cancelled and our Company shall refund the application monies (without interest or any share of revenue or other benefit arising therefrom) to you within 14 days of the date of the Stop Order; or

(b) if the Invitation Shares have already been issued but trading has not commenced, the issue will (as required by law) be deemed void, and our Company will refund the application monies (without interest or any share of revenue or other benefit arising therefrom) to you within 14 days from the date of the Stop Order.

This shall not apply where only an interim Stop Order has been served.

19. In the event that an interim Stop Order in respect of the Invitation Shares is served by the Authority or other competent authority, no Invitation Shares shall be issued to you until the Authority revokes the interim Stop Order.

20. The Authority is not able to serve a Stop Order in respect of the Invitation Shares if the Invitation Shares have been issued and listed on a securities exchange and trading in them has commenced.

21. In the event of any changes in the closure of the Invitation or the time period during which the Invitation is open, we will publicly announce the same through a SGXNET announcement to be posted on the Internet at the SGX-ST website http://www.sgx.com and through a paid advertisement in a local newspaper(s).

22. We will not hold any application in reserve.

23. We will not allot Invitation Shares on the basis of this Prospectus later than six months after the date of registration of this Prospectus.

24. Additional terms and conditions for applications by way of Application Forms are set out on pages E-6 to E-9 of this Prospectus.

25. Additional terms and conditions for applications by way of Electronic Applications are set out on pages E-9 to E-14 of this Prospectus.

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ADDITIONAL TERMS AND CONDITIONS FOR APPLICATIONS USING PRINTED APPLICATION FORMS

You shall make an application by way of an Application Form on the terms and subject to conditions of this Prospectus including but not limited to the terms and conditions appearing below as well as those set out under this Annexure, “TERMS, CONDITIONS AND PROCEDURES FOR APPLICATION AND ACCEPTANCE” on pages E-1 to E-14 of this Prospectus, as well as the Memorandum of Association and Articles of Association of our Company.

1. Your application for Offer Shares must be made using the WHITE Offer Shares Application Form and WHITE official envelopes “A” and “B” for Offer Shares accompanying and forming part of this Prospectus.

Application for Placement Shares must be made using the BLUE Placement Shares Application Forms accompanying and forming part of this Prospectus or such other forms of applications as the Issue Manager, Underwriter and Placement Agent deem appropriate. Without prejudice to the rights of our Company, the Vendors, the Issue Manager, Underwriter and Placement Agent, as agents of our Company have been authorised to accept for and on behalf of our Company, such other forms of application, as the Issue Manager, Underwriter and Placement Agent may (in consultation with our Company) deem appropriate.

Please note and carefully follow the detailed instructions contained in the respective Application Forms and this Prospectus. We or the Vendors reserve the right to reject applications which do not conform strictly to the instructions set out in the Application Forms and this Prospectus or to the terms and conditions of this Prospectus or which are illegible, incomplete, incorrectly completed or which are accompanied by improperly drawn or improper forms of remittance.

2. Your Application Forms must be completed in English. Please type or write clearly in ink using BLOCK LETTERS.

3. All spaces in the Application Forms except those under the heading “FOR OFFICIAL USE ONLY” must be completed and the words “NOT APPLICABLE” or “N.A.” should be written in any space that is not applicable.

4. Individuals, corporations, approved nominee companies and trustees must give their names in full. If you are an individual, you must make your application using your full name as it appears in your identity card (if you have such an identification document) or in your passport and, in the case of a corporation, in your full name as registered with a competent authority. If you are not an individual and you are completing the Application Form under the hand of an official, you must state the name and capacity in which that official signs. If you are a corporation completing the Application Form, you are required to affix your Common Seal (if any) in accordance with your Memorandum and Articles of Association or equivalent constitutive documents. If you are a corporate applicant and your application is successful, a copy of your Memorandum and Articles of Association or equivalent constitutional documents must be lodged with our Share Registrar and Share Transfer Agent. We reserve the right to require you to produce documentary proof of identification for verification purposes.

(a) You must complete Sections A and B and sign page 1 of the Application Form.

(b) You are required to delete either paragraph 7(a) or 7(b) on page 1 of the Application Form. Where paragraph 7(a) is deleted, you must also complete Section C of the Application form with particulars of the beneficial owners.

(c) If you fail tomake the required declaration in paragraph 7(a) or 7(b), as the case may be, on page 1 of the Application Form, your application is liable to be rejected.

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6. Your application must be accompanied by a remittance in Singapore currency for the full amount payable, in respect of the number of Invitation Shares applied for, in the form of a BANKER’S DRAFT or CASHIER’S ORDER drawn on a bank in Singapore, made out in favour of “SHENG SIONG SHARE ISSUE ACCOUNT” crossed “A/C PAYEE ONLY”, with your name and address written clearly on the reverse side. WE WILL NOT ACCEPT APPLICATIONS NOT ACCOMPANIED BY ANY PAYMENT OR ACCOMPANIED BY ANY OTHER FORM OF PAYMENT. WE WILL REJECT REMITTANCES BEARING “NOT TRANSFERABLE” or “NON TRANSFERABLE” crossings. No acknowledgement of receipt will be issued by our Company for applications and application monies received.

7. Monies in respect of unsuccessful applications are expected to be returned to you by ordinary post (without interest or any share of revenue or other benefit arising therefrom) within 24 hours of balloting at your own risk. Where your application is rejected or accepted in part only, the full amount or the balance of the application monies, as the case may be, will be refunded (without interest or any share of revenue or other benefit arising therefrom) to you by ordinary post at your own risk within 14 days after the close of the Application List, provided that the remittance accompanying such application has been presented for payment or other processes has been honoured and the application monies have been received in the designated share issue account. If the completion of the Invitation does not occur because permission from the SGX-ST is not granted or for any other reason, monies paid in respect of any application accepted will be returned to you at your own risk (without interest or any share of revenue or other benefit arising therefrom). In the event that the Invitation is cancelled by us following the termination of the Management and Underwriting Agreement and/or the Placement Agreement, the application monies received will be refunded (without interest or any share of revenue or other benefit arising therefrom) to you by ordinary post at your own risk within five (5) Market Days of the termination of the Invitation. In the event that the Invitation is cancelled by us following the issuance of a Stop Order by the Authority or any competent authority, the application monies received will be refunded (without interest or any share of revenue or other benefit arising therefrom) to you by ordinary post at your own risk within 14 days from the date of the Stop Order.

8. In consideration of us having distributed the Application Form to you and agreeing to close the Application List at 12.00 noon on 15 August 2011 or such other time or date as we may, in consultation with the Issue Manager, Underwriter and Placement Agent, decide and by completing and delivering the Application Form, you agree that:

(a) your application is irrevocable;

(b) your remittance will be honoured on first presentation and that any application monies returnable may be held pending clearance of your payment without interest or any share of revenue or other benefit arising therefrom;

(c) all applications, acceptances and contracts resulting therefrom under the Invitation shall be governed by and construed in accordance with the laws of Singapore and that you irrevocably submit to the non-exclusive jurisdiction of the Singapore courts;

(d) in respect of Invitation Shares for which your application has been received and not rejected, acceptance of your application shall be constituted by written notification by or on behalf of us and not otherwise, notwithstanding any remittance being presented for payment by us;

(e) you will not be entitled to exercise any remedy of rescission for misrepresentation at any time after acceptance of your application;

(f) in making your application, reliance is placed solely on the information contained in the Prospectus and that none of our Company, the Vendors, the Issue Manager, the Underwriter, the Placement Agent of any other person involved in the Invitation shall have any liability for any information not so contained; and

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(g) you irrevocably agree and undertake to subscribe for the number of Invitation Shares applied for as stated in the Application Form or any smaller number of such Invitation Shares that may be allotted to you in respect of your application. In the event that our Company and/or the Vendor decides to allot/allocate a smaller number of Invitation Shares or not to allot/allocate any Invitation Shares to you, you agree to accept such decision as final.

(a) Applications for Offer Shares

1. Your application for Offer Shares MUST be made using the WHITE Offer Shares Application Form and WHITE official envelopes “A” and “B”. ONLY 1 APPLICATION should be enclosed in each envelope.

2. You must:

(a) enclose the WHITE Offer Shares Application Form, duly completed and signed, together with the correct remittance in accordance with the terms and conditions of this Prospectus in the WHITE envelope “A” provided;

(b) in the appropriate spaces on WHITE envelope “A”:

(i) write your name and address;

(ii) state the number of Offer Shares applied for;

(iii) tick the relevant box to indicate the form of payment; and

(iv) affix adequate Singapore postage;

(c) SEAL WHITE envelope “A”;

(d) write, in the special box provided on the larger WHITE envelope “B” addressed to SHENG SIONG GROUP LTD., c/o BOARDROOM CORPORATE & ADVISORY SERVICES PTE. LTD., 50 RAFFLES PLACE, #32-01 SINGAPORE LAND TOWER, SINGAPORE 048623 the number of Offer Shares for which the application is made and tick the relevant box to indicate the form of payment; and

(e) insert WHITE envelope “A” into WHITE envelope “B”, seal WHITE envelope “B”, affix adequate Singapore postage on WHITE envelope “B” (if despatching by ordinary post) and thereafter DESPATCH BY ORDINARY POST OR DELIVER BY HAND at your own risk to SHENG SIONG GROUP LTD., c/o BOARDROOM CORPORATE & ADVISORY SERVICES PTE. LTD., 50 RAFFLES PLACE, #32-01 SINGAPORE LAND TOWER, SINGAPORE 048623 so as to arrive by 12.00 noon on 15 August 2011 or such other time and date as we may, in consultation with the Issue Manager, decide. Local Urgent Mail or Registered Post must NOT be used.

3. No acknowledgement of receipt will be issued for any application or remittance received.

(b) Applications for Placement Shares

1. Your application for Placement Shares MUST be made using the BLUE Placement Shares Application Form or in any other form of application as may be deemed appropriate by OCBC Bank. ONLY 1 APPLICATION should be enclosed in each envelope.

2. The completed BLUE Placement Shares Application Form and your remittance in accordance with the terms and conditions of this Prospectus for the full amount payable in respect of the number of Placement Shares applied for, with your name and address written clearly on the reverse side, must be enclosed and sealed in an envelope to be provided by you. You must affix adequate Singapore postage (if despatching by ordinary post) and thereafter, the sealed envelope must be DESPATCHED BY ORDINARY POST OR DELIVERED BY HAND at your own risk to OCBC

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BANK, 63 CHULIA STREET, OCBC CENTRE #03-03, SINGAPORE 049514, so as to arrive by 12.00 noon on 15 August 2011 or such other time and date as we may, in consultation with the Issue Manager, Underwriter and the Placement Agent, decide. Local Urgent Mail or Registered Post must NOT be used.

3. No acknowledgement of receipt will be issued for any application or remittance received.

(c) Additional Terms and Conditions for Electronic Applications

The procedures for Electronic Applications are set out on the ATM screens of the relevant Participating Banks (the “Steps”). For illustration purposes, the procedures for ATM Electronic Applications at ATMs of OCBC Bank are set out in the “Steps for ATM Electronic Applications” appearing on pages E-13 and E-14. The actions that you must take at ATMs of other Participating Banks are set out on the ATM screens of the relevant Participating Banks.

Applicants applying for the Public Offer Shares by way of Electronic Applications may incur an administrative fee and/or such related charges as stipulated by the respective Participating Banks from time to time.

Please read carefully the terms of this Prospectus, the Steps and the terms and conditions for Electronic Applications set out below before making an Electronic Application. Any reference to “you” or the “applicant” in the Additional Terms and Conditions for Electronic Applications and the Steps shall refer to you making an application for Offer Shares through an ATM of a Participating Bank.

You must have an existing bank account with and be an ATM cardholder of one of the Participating Banks before you can make an Electronic Application at the ATMs of that Participating Bank. An ATM card issued by 1 Participating Bank cannot be used to apply for Offer Shares at an ATM belonging to another Participating Bank. The Steps set out the actions that you must take at ATMs of OCBC Bank to complete an Electronic Application. The actions that you must take at ATMs of other Participating Banks are set out on the ATM screens of the relevant Participating Banks. Upon the completion of your ATM Electronic Application transaction, you will receive an ATM transaction slip (the “Transaction Record”), confirming the details of your ATM Electronic Application. The Transaction Record is for retention by you and should not be submitted with any printed Application Form.

You must ensure that you enter your own Securities Account number when using the ATM card issued to you in your own name. If you fail to use an ATM card issued in your own name or do not key in your own Securities Account number, your application will be rejected. If you operate a joint bank account with any of the Participating Banks, you must ensure that you enter your own Securities Account number when using the ATM card issued to you in your own name. Using your own Securities Account number with an ATM card which is not issued to you in your own name will render your Electronic Application liable to be rejected.

Your Electronic Application shall be made on the terms and subject to the conditions of this Prospectus including but not limited to the terms and conditions appearing below and those set out under this Annexure on “TERMS, CONDITIONS AND PROCEDURES FOR APPLICATION AND ACCEPTANCE” on pages E-1 to E-14 as well as our Memorandum of Association and Articles of Association.

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1. In connection with your Electronic Application, you are required to confirm statements to the following effect in the course of activating your Electronic Application:

(a) that you have received a copy of this Prospectus and have read, understood and agreed to all the terms and conditions of application for Offer Shares in this Prospectus prior to effecting the Electronic Application and agree to be bound by the same;

(b) that you consent to the disclosure of your name, NRIC/passport number, address, nationality, permanent resident status, Securities Account number, CPF Investment Account number (if applicable) and share application amount (the “Relevant Particulars”) from your account with that Participating Bank to the Share Registrar for the Invitation, CDP, CPF, SCCS, the SGX-ST, our Company and the Issue Manager (the “Relevant Parties”); and

(c) that the Electronic Application made is your only application for Offer Shares and it is made in your own name and at your own risk.

Your application will not be successfully completed and cannot be recorded as a completed transaction unless you press the “Enter” or “OK” or “Confirm” or “Yes” key or any other relevant key in the ATM. By doing so, you shall be treated as signifying your confirmation of each of the three (3) statements. In respect of statement 1(b) above, your confirmation, by pressing the “Enter” or “OK” or “Confirm” or “Yes” or any other relevant key, shall signify and shall be treated as your written permission, given in accordance with the relevant laws of Singapore including Section 47(2) of the Singapore Banking Act (Chapter 19) to the disclosure by that Participating Bank of the Relevant Particulars to the Relevant Parties.

2. By making an Electronic Application, you confirm that you are not applying for Offer Shares as nominee of any other person and that any Electronic Application that you make is the only application made by you as beneficial owner. You shall make only 1 Electronic Application for Offer Shares and shall not make any other application for Offer Shares, whether at the ATMs of any Participating Bank or on the Application Forms. Where you have made an application for Offer Shares or Placement Shares on an Application Form, you shall not make an Electronic Application for Offer Shares and vice versa.

3. You must have sufficient funds in your bank account with your Participating Bank at the time you make your Electronic Application, failing which your Electronic Application will not be completed. Any Electronic Application made at the ATMs of the relevant Participating Banks which does not conform strictly to the instructions set out in this Prospectus or on the screens of the ATMs of the relevant Participating Banks through which the Electronic Application is being made shall be rejected.

4. You irrevocably agree and undertake to subscribe for and to accept the number of Offer Shares applied for as stated on the Transaction Record or any lesser number of Offer Shares that may be allotted and/or allocated to you in respect of your Electronic Application. In the event that we decide to allot and/or allocate any lesser number of such Offer Shares or not to allot and/or allocate any Offer Shares to you, you agree to accept such decision as final. If your Electronic Application is successful, your confirmation (by your action of pressing the “Enter” or “OK” or “Confirm” or “Yes” key or any other relevant key on the ATM) of the number of Offer Shares applied for shall signify and shall be treated as your acceptance of the number of Offer Shares that may be allotted and/or allocated to you and your agreement to be bound by our Memorandum of Association and Articles of Association.

5. Where your Electronic Application is unsuccessful, the full amount of the application monies will be refunded in Singapore dollars (without interest or any share of revenue or other benefit arising therefrom) to you by being automatically credited to your account with your Participating

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Bank within 24 hours of balloting of the applications provided that the remittance in respect of such application which has been presented for payment or other processes have been honoured and the application monies have been received in the designated share issue account.

Where your Electronic Application is rejected or accepted in part only, the full amount or the balance of the application monies, as the case may be, will be refunded in Singapore dollars (without interest or any share of revenue or other benefit arising therefrom) to you by being automatically credited to your account with your Participating Bank within 14 days after the close of the Application List provided that the remittance in respect of such application which has been presented for payment or other processes have been honoured and the application monies have been received in the designated share issue account.

Responsibility for timely refund of application monies from unsuccessful or partially unsuccessful Electronic Applications lies solely with the respective Participating Banks. Therefore, you are strongly advised to consult your Participating Bank as to the status of your Electronic Application and/or the refund of any monies to you from an unsuccessful or partially successful Electronic Application, to determine the exact number of Offer Shares allotted and/or allocated to you, if any, before trading Offer Shares on the SGX-ST. Neither the SGX-ST, CDP, SCCS, the Participating Banks, we nor the Vendors, the Issue Manager, Underwriter and Placement Agent assume any responsibility for any loss that may be incurred as a result of your having to cover any net sell positions or from buy-in procedures activated by the SGX-ST.

6. If your Electronic Application is unsuccessful, no notification will be sent by the Participating Banks.

If your Electronic Application is made through an ATM of one of the following Participating Banks, you may check the provisional results of your Electronic Application as follows:

Bank Telephone ATM/Internet Operating Hours

Service expected from

OCBC Bank 1 800 363 3333 ATM / Phone Banking / Internet Banking / www.ocbc.com(1)

24 hours Evening of the balloting day

DBS Bank 1 800 339 6666(POSB account holders)1800 111 1111 (DBS Bank account holders)

Internet Bankingwww.dbs.com


UOB Group 1 800 222 2121 ATM (“Other Transactions” - “IPO Enquiry”)(2)

www.uobgroup.com(2)


Note(s):

(1) If you have made your Electronic Application through the ATMs of OCBC Bank, you may check the results of your application through OCBC Personal Internet Banking, OCBC Bank’s ATMs and OCBC Phone Banking Services.

(2) If you have made your Electronic Application through the ATMs of the UOB Group, you may check the results of your application through UOB Personal Internet Banking, UOB Group’s ATMs or UOB Phone Banking services.

7. Electronic Applications shall close at 12.00 noon on 15 August 2011 or such other time and date as we may, in consultation with the Issue Manager, Underwriter and Placement Agent, decide.

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8. You are deemed to have requested and authorised us to:

(a) register Offer Shares allotted and/or allocated to you in the name of the CDP for deposit into your Securities Account;

(b) send the relevant share certificate(s) to the CDP;

(c) return or refund (without interest or any share of revenue or other benefit arising therefrom) the application monies in Singapore currency, should your Electronic Application be rejected, by automatically crediting your bank account with your Participating Bank with the relevant amount within 24 hours of balloting; and

(d) return or refund (without interest or any share of revenue or other benefit arising therefrom) the balance of the application monies in Singapore dollar, should your Electronic Application be accepted in part only, by automatically crediting your bank account with your Participating Bank with the relevant amount within 14 days after the close of the Application List.

9. You irrevocably agree and acknowledge that your Electronic Application is subject to risks of electrical, electronic, technical and computer-related faults and breakdowns, fires, acts of God and other events beyond the control of the Participating Banks, our Company, the Vendors and the Issue Manager, Underwriter and Placement Agent and if, in any such event, we, the Issue Manager, Underwriter and Placement Agent and/or the relevant Participating Bank do not record or receive your Electronic Application, or data relating to your Electronic Application or the tape containing such data is lost, corrupted, destroyed or not otherwise accessible, whether wholly or partially for whatever reason, you shall be deemed not to have made an Electronic Application and you shall have no claim whatsoever against us, the Vendor, the Issue Manager, Underwriter and Placement Agent and/or the relevant Participating Bank for Offer Shares applied for or for any compensation, loss or damage.

10. We do not recognise the existence of a trust. Any Electronic Application by a trustee must be made in his own name(s) and without qualification. Our Company will reject any Electronic Application by any person acting as nominee except those made by approved nominee companies only.

11. All particulars in the records of your Participating Bank at the time you make your Electronic Application shall be deemed to be true and correct and your Participating Bank and the Relevant Parties shall be entitled to rely on the accuracy thereof. If there has been any change in your particulars after making your Electronic Application, you shall promptly notify your Participating Bank.

12. You should ensure that your personal particulars as recorded by both CDP and the relevant Participating Bank are correct and identical, otherwise, your Electronic Application is liable to be rejected. You should promptly inform CDP of any change in address, failing which the notification letter on successful allotment and/or allocation and other correspondence from the CDP will be sent to your address last registered with CDP.

13. In consideration of our Company and the Vendors making available the Electronic Application facility through the ATMs of the Participating Banks and agreeing to close the Application List at 12.00 noon on 15 August 2011 or such other time or date as we may, in consultation with the Issue Manager, Underwriter and Placement Agent, decide, and by making and completing an Electronic Application, you agree that:

(a) your Electronic Application is irrevocable;

(b) your Electronic Application, the acceptance by our Company or the Vendors (as the case may be), and the contract resulting therefrom under the Invitation shall be governed by and construed in accordance with the laws of Singapore and you irrevocably submit to the non-exclusive jurisdiction of the Singapore courts;

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(c) neither our Company, the Vendors, the Issue Manager, Underwriter and Placement Agent, the Participating Banks nor CDP shall be liable for any delays, failures or inaccuracies in the recording, storage or in the transmission or delivery of data relating to your Electronic Application to us or CDP due to a breakdown or failure of transmission, delivery or communication facilities or any risks referred to in paragraph 9 above or to any cause beyond their respective controls;

(d) in respect of Offer Shares for which your Electronic Application has been successfully completed and not rejected, acceptance of your Electronic Application shall be constituted by written notification by or on behalf of our Company and the Vendors and not otherwise, notwithstanding any payment received by or on behalf of our Company and the Vendors;

(e) you will not be entitled to exercise any remedy of rescission or misrepresentation at any time after acceptance of your application; and

(f) in making your application, reliance is placed solely on the information contained in the Prospectus and none of our Company, the Issue Manager and the Underwriter or any other person involved in the Invitation shall have any liability for information not so contained.

Steps for ATM Electronic Applications

Instructions for Electronic Applications will appear on the ATM screens of the Participating Banks. For illustration purposes, the steps for making an Electronic Application through an OCBC Bank ATM are shown below. Certain words appearing on the screen are in abbreviated form (“a/c”, “appln”, “ESA”, “no.” and “&” refer to “account”, “application”, “electronic share application”, “number” and “and”, respectively). Instructions for Electronic Applications appearing on the ATM screens of the other Participating Banks may differ from those represented below.

Step 1 : Insert your personal OCBC ATM card

2 : Enter your Personal Identification Number

3 : Select “More Services”

4 : Select “Investment Services”

5 : Select “Electronic Share Appln”

6 : Select “SSGRP”

7 : For an applicant making an Electronic Application at the ATM for the first time

(a) For non-Singaporean

Press the “Yes” key if you are a permanent resident of Singapore, otherwise, press the “No” key.

(b) Enter your own Securities Account number (12 digits) e.g. 168101234567 and press “Yes” key to confirm that the Securities Account number you have entered is correct.

8 : Check your particulars appearing on the screen and press the “Correct” key to confirm that your particulars are correct.

9 : Press the “Confirm” key to confirm that you have read the following messages:

— A copy of this Prospectus has been lodged with and registered by the Monetary Authority of Singapore, which assumes no responsibility for its contents

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— The Prospectus is available at various Participating Banks

10 : Press the “Confirm” key again to confirm that you have read the following messages:

— Anyone who intends to submit an application for these securities should read the Prospectus before submitting his/her application in the manner set out in the Prospectus

— You have read, understood and agreed to all terms of application set out in the Prospectus

11 : Press the “Confirm” key again to confirm that you have read the following messages:

— You consent to the disclosure of your NRIC/Passport No., address, nationality, securities a/c no., qty of securities applied for and CPF investment a/c no. to share registrar, CDP, CPF, SCCS, Issuer

— This application is made in your own name & at your own risk

12 : Select the number of Shares you wish to apply for

— For fixed price ESA, this is the only application submitted

— Price: S$0.33

13 : Select the type of bank account to debit your application monies.

14 : Check the details of your application appearing on the screen and press the “Confirm” key to confirm your application.

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The following is a discussion of certain tax matters arising under the current tax laws of Singapore and is not intended to be and does not constitute legal or tax advice. While this discussion is considered to be a correct interpretation of existing laws in force as at the date of this Prospectus, no assurance can be given that courts or fiscal authorities responsible for the administration of such laws will agree with this interpretation or that changes in such laws will not occur, changes which could be retrospective in effect.

The discussion is limited to a summary of certain tax considerations in Singapore with respect to the subscription, purchase, ownership and disposal of our Shares by investors (either individuals or corporations), and does not purport to be a comprehensive nor exhaustive description of all of the tax considerations that may be relevant to a decision to subscribe to, purchase, own or dispose of the Shares and does not purport to deal with the tax consequences applicable to all categories of investors, some of which (such as dealers in securities) may be subject to special rules.

Prospective investors are advised to consult their tax advisors regarding the overall tax consequences of subscription, purchase, ownership and disposal of our Shares.

It is emphasised that neither our Company, our Directors nor any other persons involved in the Invitation accepts responsibility for any tax effects or liabilities resulting from the subscription, purchase, ownership and disposal of our Shares.

Singapore Taxation

Individual Income Tax

Individuals, both resident and non-resident for Singapore tax purposes, subject to certain specific exemptions provided for under the Singapore tax laws, are subject to income tax on income accrued in or derived from Singapore.

All foreign-sourced income received in Singapore by individuals, regardless of whether they are tax residents of Singapore or otherwise, will be exempt from Singapore income tax, except where such income is received through a partnership in Singapore.

To be considered a tax resident of Singapore in a year of assessment, the individual has to be physically present in Singapore or exercise an employment in Singapore (other than as a director of a company) for 183 days or more, or reside in Singapore in the year preceding the year of assessment except for such temporary absences that may be reasonable and not inconsistent with his claim to be resident in Singapore. As such, a Singapore citizen is generally considered a tax resident of Singapore.

The current rates of tax for a tax resident of Singapore vary according to the individual’s chargeable income, ranging from 0% to 20%. A non-resident of Singapore is generally taxed at the 20%, except for employment income which is taxed at the higher of 15% or tax resident rates.

Corporate Income Tax

Corporates, both resident and non-resident for Singapore tax purposes, subject to certain exemptions, are subject to tax on the following:

Income accruing in or derived from Singapore; and

Foreign income received or deemed received in Singapore

Under the tax laws, foreign-sourced service income, foreign-sourced branch profits and foreign-sourced dividend income received by a corporate tax resident in Singapore are exempt from Singapore income tax if the following conditions are all met:

(i) Such income was subject to income tax in the foreign jurisdiction from which the said income is received, unless the income is exempted from tax in the foreign jurisdiction as a direct consequence of that foreign jurisdiction granting a tax incentive for carrying out substantive business activities in that jurisdiction; and

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APPENDIX F: TAXATION

(ii) The highest rate of tax in the foreign jurisdiction from which such income is received is at least 15%; and

(iii) The IRAS is satisfied that the tax exemption granted is beneficial to the recipient of such income.

To be considered a tax resident of Singapore, generally, a corporate must demonstrate that its control and management of the business is carried out in Singapore.

The prevailing corporate tax rate in Singapore is currently 17% for the year of assessment 2010. In addition, 75% of up to the first S$10,000, and 50% of up to the next S$290,000 of a company’s chargeable income is exempt from Singapore income tax.

Dividend Distributions

Singapore adopted the one-tier corporate tax system with effect from 1 January 2003. Under the one-tier corporate tax system, the Singapore income tax payable on normal chargeable income by Singapore companies, whether tax resident in Singapore or not, would constitute a final Singapore income tax. Dividends payable by Singapore companies on the one-tier corporate tax system would be tax exempt from Singapore income tax in the hands of its shareholders. Such dividends are referred to as tax exempt (one-tier) dividends.

Dividends payments made to non-tax residents are not subject to withholding tax in Singapore. Foreign shareholders are advised to consult their own tax advisors in respect of the tax laws of their respective countries of residence and the applicability of any Avoidance of Double Taxation Agreement that their country of residence may have with Singapore.

Gain on disposal of Ordinary Shares

Singapore does not impose tax on capital gains. However, there are no specific laws or regulations which deal with the characterisation of capital gains. Generally, gains arising from the disposal of ordinary shares are not taxable in Singapore unless the seller is regarded as having derived gains of an income nature in Singapore, in which case, the disposal profits would be taxable as trading income in the hands of the seller of the ordinary shares.

Stamp Duty

No stamp duty is payable on the subscription of our Shares. Stamp duty is payable on the instrument of transfer of our Shares at the rate of $0.20 for every $100 or any part thereof, computed on the higher of the consideration of the transfer or market value of our Shares. However, stamp duty is not applicable to electronic transfers of our Shares through the CDP system.

The purchaser would be liable for stamp duty, unless otherwise agreed by the relevant parties. No stamp duty is levied if no instrument of transfer is executed or the instrument of transfer is executed outside Singapore. However, stamp duty would be payable if the instrument of transfer which is executed outside Singapore is received in Singapore.

Goods and Services Tax (“GST”)

The issue or transfer of ownership of an equity security in Singapore is exempt from GST. Hence, investors would not incur any GST on the subscription of our Shares. Where the investors are GST-registered persons, any GST on expenses (e.g. legal fees) incurred in connection with the subscription or acquisition of our Shares is generally not recoverable as input tax credit from the IRAS unless certain conditions are satisfied. The investors should consult their tax consultants on these conditions.

The subsequent disposal of our Shares by the investors belonging in Singapore is also exempt from GST. Any GST incurred by a GST-registered investor in the making of this exempt supply is generally not recoverable as input tax credit from the IRAS unless certain conditions are satisfied.

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Generally, services such as brokerage, handling and clearing charges rendered by a GST-registered person to an investor belonging in Singapore in connection with the investor’s purchase and sale of shares will be subject to GST at the prevailing standard-rate of 7%. Similar services rendered to an investor belonging outside Singapore would generally be subject to GST at zero-rate.

Estate duty

Estate duty has been abolished, as announced by the Singapore Government, with effect from 15 February 2008.

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Set out below is a summary of certain material provisions of Malaysian law in effect as of the date hereof that may apply to SS Malaysia. This summary does not purport to be a complete review of all laws in Malaysia that are applicable to SS Malaysia.

Foreign Participation in Distributive Trade

The distributive trade sector in Malaysia falls under the supervision of the Ministry of Domestic Trade, Co-operatives and Consumerism (“Ministry”) through its Committee on Distributive Trade (formerly known as the Committee on Wholesale and Retail Trade). The Committee was set up in 1995 to regulate and supervise the industry, including foreign participation in the sector. The Ministry has periodically developed and issued guidelines for the purpose of setting out the policy on foreign participation in distributive trade. The latest guidelines are the Guidelines on Foreign Participation in the Distributive Trade Services Malaysia 2010 issued on 12 May 2010 (“Guidelines”), which is a revision of its predecessor guidelines issued in 2004. The objective of the Guidelines is to ensure, among others, an orderly and fair development of industry, while ensuring the growth of the local business.

Under the Guidelines, “distributive trade” comprises all linkage activities that channel goods and services down the supply chain to intermediaries for resale or final buyers. Distributive traders include wholesaler, retailers, franchise practitioners, direct sellers, suppliers, who channel their goods in the domestic market and commission agents or other representatives including those of international trading companies. The various distribution channels used in distributive trade business may be by way of the operation of distribution stores such as hypermarkets, department stores, superstores, specialty stores, supermarkets, minimarkets, convenient stores etc.

The Guidelines provides that all foreign involvements in the distributive trade activities in Malaysia are required to obtain the prior approval from the Ministry with effect from 6 January 2010. These include:

(a) acquisition of interest:

(b) merger and/or take over involving foreign participation;

(c) opening of new branches, stores or chain stores;

(d) relocation of branches, stores, or chain stores,

(e) expansion of existing branches, stores or chain stores;

(f) buying over/taking over of stores of other operators; and

(g) purchase and sale of properties to operate distributive trade activities prior to obtaining the approval/ licence from local authorities and other agencies to operate distributive trade activities.

Notwithstanding the above, the Guidelines prohibit foreign involvement in certain retail formats which include among others, supermarkets and minimarkets which have less than 3,000 square metres of sales floor area or 24-hour convenience stores.

In addition, all distributive trade companies with foreign equity shall be subjected to, among others, the following general conditions:

(a) to appoint Bumiputera (i.e indigenous Malays and other ethnic groups) director(s);

(b) to hire personnel at all levels including management to reflect the racial composition of the Malaysian population;

(c) to formulate clear policies and plans to assist Bumiputera participation in the distributive trade industry;

(d) to increase the utilisation of local airports and ports in the export and import of the goods;

(e) to hire at least 1% of the total hypermarket workforce from persons with disabilities;

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APPENDIX G: SUMMARY OF RELEVANT MALAYSIAN LAWS AND REGULATIONS

(f) to utilise local companies for legal and other professional services which are available in Malaysia;

(g) to submit annual financial reports to the Ministry; and

(h) to comply with all by-laws and regulations of the local authorities.

Furthermore, the Guidelines also set out specific rules and conditions to govern and regulate aspects of distributive trade businesses such as capital requirements, equity structures, operational, environmental and public interest conditions for the operation of such distributive trade businesses. These rules and conditions vary according to the type of distribution stores used by the distributive trade business.

The Ministry may, from time to time, modify the Guidelines to introduce new policies to further liberalise the regulatory environment in the distributive trade industry so as to be in line with Government policy to attract foreign direct investment in Malaysia.

Please note that the Guidelines are only a reflection of governmental policy and are not enacted as law under any legislation passed by the Malaysian Parliament or subordinate legislation made pursuant to any statute. Accordingly, the Guidelines are not law and have no sanctioning provisions or statutory penalties imposed for non-compliance with the Guidelines. Nevertheless, they can be enforced administratively through various statutory bodies, governmental departments or agencies exercising a regulatory role in granting of licences, approvals and permits required for the operation of a business in Malaysia. For example, any non-compliance may affect applications for other licences or dealings with, or result in the revocation of existing licences required for the operation of business in Malaysia by, other statutory bodies, governmental departments or agencies.

Licences for Retail Distribution of Certain Goods

Control of Supplies Act 1961

Pursuant to the Control of Supplies Act 1961, any trader who wishes to engage in the retail selling of price-controlled items such as sugar, flour, chicken and cooking oil is required to have a retail licence of controlled goods from the Ministry. Such licence is normally valid for one (1) year and may be renewed as and when it expires.

Control of Padi and Rice Act 1994

Under the Control of Padi and Rice Act 1994, those who wish to engage in the retail distribution of rice are required to obtain a retail licence under the Control of Padi and Rice (Licensing of Wholesale and Retailers) Regulation 1996. This licence is issued by the Ministry of Agriculture and Agro-Based Industry and is normally valid for a period of two (2) years, and may be renewed as and when it expires.

Business Premise Licences and Signboard Licences

Under the Local Government Act 1976, business premise licence and signboard licence are issued by the respective local authorities (i.e city council, municipal council or district council) and these licences, which need to be applied for, depend on the nature of the business activity. There are 147 local authorities in Malaysia and the requirements for the application of these licenses may vary according to each local authority. Hence, the operator of distributive trade stores would have to check with the respective local authorities where its stores are located. These licences are normally valid for a period of one (1) year, and may be renewed as and when it expires.

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APPENDIX G: SUMMARY OF RELEVANT MALAYSIAN LAWS AND REGULATIONS

RULES OF THE SHENG SIONG ESOS

1. Name of the ESOS

The ESOS shall be called the “Sheng Siong ESOS”.

2. Definitions

2.1 Unless the context otherwise requires, the following words and expressions shall have the following meanings:-

“Acceptance Period” : The period within which an Option may be accepted, as described in Rule 7

“Adoption Date” : The date on which the ESOS is adopted by the Company in an extraordinary general meeting

“Aggregate Subscription Cost” : The total amount payable for the Shares to be subscribed for on the exercise of an Option

“associate” : (i) In relation to a Controlling Shareholder (being an individual), means:-

(a) his/her spouse, child, adopted child, step-child, sibling and parent (his “immediate family”);

(b) the trustees of any trust of which he/she or his/her immediate family is a beneficiary or, in the case of a discretionary trust, is a discretionary object; and

(c) any company in which he/she and his/her immediate family together (directly or indirectly) have an interest of 30% or more; or

(ii) in relation to a Controlling Shareholder (being a company) means any other company which is its subsidiary or holding company or is a subsidiary of such holding company or one in the equity of which it and/or such other company or companies taken together (directly or indirectly) have an interest of 30% or more

“Associated Company” : A company in which at least 20% but not more than 50% of its shares are held by the Company or the Group and over which the Company has control

“Auditors” : The auditors for the time being of the Company

“Board” : The board of directors for the time being of the Company

“CDP” : The Central Depository (Pte) Limited

“Companies Act” : The Companies Act, Chapter 50 of Singapore as amended or modified from time to time

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APPENDIX H: RULES OF SHENG SIONG ESOS

“Committee” : The Remuneration Committee established by the Company pursuant to the Code of Corporate Governance 2005, as from time to time amended, modified or supplemented

“Company” : Sheng Siong Group Ltd., a company incorporated in Singapore

“Controlling Shareholder” : A person who:

(a) has an interest in the voting shares of the Company and who exercises control over the Company; or

(b) has an interest of 15% or more of the aggregate voting shares in the Company, unless he does not exercise control over the Company

“CPF” : Central Provident Fund

“Depository Agent” : An entity registered as a depository agent with the CDP for the purpose of maintaining securities sub-accounts for its own account and for the account of others

“ESOS” : The Sheng Siong ESOS, as modified or altered from time to time

“Executive Director” : A director who is a full-time employee of the Company and who performs an executive function

“Exercise Price” : The price at which a participant shall subscribe for each Share upon the exercise of an Option as determined in accordance with Rule 8.1(a) in relation to a Market Price Option, and Rule 8.1(b) in relation to an Incentive Option

“Grantee” : A person to whom an offer of an Option is made

“Group” : The Company and its subsidiaries

“Group Employee” : An Executive Director or a full-time employee of any member of the Group (including employees who are seconded to an Associated Company or any other company outside the Group in which the Company and/or Group has an equity interest, and for purposes hereof, the secondment of an employee to another company shall not be regarded as a break in his employment or his having ceased employment as a full-time employee of the Group by reason only of such secondment) who is selected by the Committee to participate in the ESOS in accordance with Rule 4

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“Incentive Option” : The right to subscribe for Shares granted or to be granted pursuant to the ESOS and for the time being subsisting, and in respect of which the Exercise Price is determined in accordance with Rule 8.1(b)

“Market Price” : The average of the closing prices of the Shares for the past five (5) Market Days immediately preceding the relevant date of grant of the Option

“Market Day” : A day on which the SGX-ST is open for trading in securities

“Market Price Option” : The right to subscribe for Shares granted or to be granted pursuant to the ESOS and for the time being subsisting, and in respect of which the Exercise Price is determined in accordance with Rule 8.1(a)

“Offering Date” : The date on which an Option is granted pursuant to Rule 6

“Option” : The right to subscribe for Shares granted or to be granted pursuant to the ESOS and for the time being subsisting, and in respect of which the Exercise Price is determined in accordance with Rule 8

“Option Period” : The period for the exercise of an Option

(i) in the case of a Market Price Option, the period commencing on (and including) the first anniversary of the relevant Offering Date and expiring on (and including) the day immediately preceding the fifth anniversary of the Offering Date or such other period which may from time to time be prescribed under any relevant law, regulation or rule of the SGX-ST;

(ii) in relation to an Incentive Price Option, the period commencing on (and including) the second anniversary of the relevant Offering Date and expiring on (and including) the day immediately preceding the fifth anniversary of the Offering Date or or such other period which may from time to time be prescribed under any relevant law, regulation or rule of the SGX-ST.

“Participant” : Any eligible person selected by the Committee to participate in the ESOS in accordance with the rules thereof

“Rules” : The rules of the ESOS, as the same may be amended from time to time

“SGX-ST” : The Singapore Exchange Securities Trading Limited

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“Shareholders” : The registered holders of the Shares or in the case of Depositors, Depositors who have Shares entered against their names in the Depository Register

“Shares” : Fully-paid ordinary shares in the capital of the Company

“$” or “S$” : Singapore dollars

“%” : Per centum

2.2 For the purposes of the ESOS:-

(a) in relation to a company (including, where the context requires, the Company), “control” means the capacity to dominate decision-making directly or indirectly, in relation to the financial and operating policies of that company; and

(b) unless rebutted, a person who holds directly or indirectly, a shareholding of 15% or more of the Company’s issued share capital shall be presumed to be a Controlling Shareholder.

2.3 Any reference in the ESOS to any enactment is a reference to that enactment as for the time being amended or re-enacted. Any word defined under the Companies Act and used in these Rules shall have the meaning assigned to it under the Companies Act.

2.4 Words importing the singular number shall include the plural number where the context admits and vice versa. Words importing the masculine gender shall include the feminine gender where the context admits.

2.5 Any reference to a time of day shall be a reference to Singapore time.

3. Objectives

The ESOS is a share incentive scheme. The purpose of the ESOS is to provide an opportunity for Executive Directors and Group Employees to participate in the equity of the Company so as to motivate them to greater dedication, loyalty and higher standards of performance. The ESOS is proposed on the basis that it is important to acknowledge the contribution, which is essential to the well-being and prosperity of the Group, made respectively by these categories of persons. The Company, by adopting the ESOS, will give these categories of persons a real and meaningful stake in the Company at no direct cost to its profitability and will help to achieve the following objectives:-

(a) the motivation of Participants to achieve and maintain a high level of performance and contribution;

(b) to make total employee remuneration sufficiently competitive to recruit and retain employees whose contributions are important to long term growth and profitability of our Company; and

(c) foster an ownership culture within our Company which aligns the interests of employees with the interests of our Shareholders.

4. Eligibility

Group Employees (provided that such persons are not undischarged bankrupts) who have attained the age of twenty-one (21) years shall be eligible to participate in the ESOS at the absolute discretion of the Committee.

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PROVIDED ALWAYS THAT if any such person is a Controlling Shareholder or an associate of a Controlling Shareholder, his participation in the ESOS and the grant of Options to whom, including the actual number and terms thereof, shall be subject to prior approval by independent Shareholders in general meeting in separate resolutions for each Controlling Shareholder or associate of a Controlling Shareholder.

4.2 There shall be no restriction on the eligibility of any Participant to participate in any other share option or share incentive schemes implemented by any other companies within the Group or otherwise.

4.3 Subject to the Companies Act and any requirement of the SGX-ST or any other stock exchange on which the Shares may be listed or quoted, the terms of eligibility for participation in the ESOS may be amended from time to time at the absolute discretion of the Committee.

5. Limitations under the ESOS

5.1 The aggregate number of Shares over which the Committee may grant Options on any date, when added to the number of Shares issued and issuable in respect of all Options granted under the ESOS, shall not exceed 15.0% (or such other percentage as may be prescribed or permitted from time to time by the SGX-ST) of the issued Shares (excluding treasury shares) of the Company on the day preceding that date.

5.2 The number of Shares comprised in an Option to be offered to any Participant in accordance with the ESOS shall be determined at the absolute discretion of the Committee, who shall take into account, in respect of a Group Employee, criteria such as rank, past performance, years of service and potential for future development of that employee.

5.3 Subject to Rule 4, the aggregate number of Shares in respect of which Options may be offered to Participant for subscription in accordance with the ESOS shall be determined at the discretion of the Committee who shall take into account criteria such as, in respect of a Group Employee, the rank and responsibilities within the Group, performance, years of service and potential for future development of the, and the general performance of the Group, provided that the entitlement of Participants under the ESOS shall be subjected to the following:-

(A) The aggregate number of Shares in respect of which Options to be offered to a Participant in accordance with and during the entire operation of the ESOS shall not exceed the percentage of the total number of Shares in respect of which Options may be granted under the ESOS at the time of the grant for each category, rank and/or grade of Participants as set out below:

(a) Group 1 (Executive Directors) – up to 10 per cent. (10.0%) per Director

(b) Group 2 (Employees who are not Directors) – up to 5.0 per cent. (5.0%) per employee

PROVIDED THAT the number of Shares in respect of which Options are granted under the ESOS to a Participant who is a Controlling Shareholder or an associate of a Controlling Shareholder shall be subject to the following:

(i) that the grant of any Option is approved by the independent Shareholders in a separate resolution for each such person,

(ii) the aggregate number of Shares available to each Controlling Shareholder or his associates under the ESOS shall not exceed ten per cent. (10.0%) of the aggregate of the total number of Shares in respect of Options which may be granted under the ESOS; and

(iii) the aggregate number of Shares available to Controlling Shareholders and their associates shall not exceed twenty-five per cent. (25.0%) of the aggregate of the total number of Shares in respect of Options which may be granted under the ESOS.

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6. Date of Grant

6.1 The Committee may, subject as provided in Rule 12, grant Options on a yearly basis and any such grants shall be made at least sixty (60) days after the end of the financial year of the Company, provided that in the event that an announcement on any matter of an exceptional nature involving unpublished price sensitive information is imminent, Options may only be granted on or after the second Market Day from the date on which the aforesaid announcement is released.

6.2 The Letter of Offer to grant the Option shall be in, or substantially be in, the form set out in Schedule H-1, subject to such modification including, but not limited to, imposing restrictions on the number of Options that may be exercised within particular sections of the relevant Option Period as set out in Rule 9.1, or as the Committee may from time to time determine.

7. Acceptance of Options

7.1 An Option shall be personal to the Participant to whom it is granted and shall not be transferred (other than to a Participant’s personal representative on the death of that Participant), charged, assigned, pledged or otherwise disposed of, in whole or in part, unless with the prior approval of the Committee.

7.2 The closing date for the acceptance for the grant of any Option under this Rule 7 shall be within thirty (30) days from the Offering Date of that Option, and not later than 5pm on the thirtieth (30th) day of the Offering Date. The grant of an Option must be accepted by completing, signing and returning the Acceptance Form in, or substantially in, the form set out in Schedule H-2 and accompanied by payment of S$1.00 as consideration, subject to such modification as the Committee may from time to time determine.

7.2 If a grant of an Option is not accepted in the manner as provided in Rule 7.2, such offer shall, upon the expiry of the Acceptance Period, automatically lapse and become null and void and of no effect.

8. Exercise Price

8.1 Subject to any adjustment pursuant to Rule 12, the Exercise Price for each Share in respect of which an Option is exercisable shall be determined by the Committee at its absolute discretion, and fixed by the Committee as follows:-

(a) a price equal to the average of the closing prices for a Share for the past five (5) Market Days immediately preceding the Offering Date of that Option;

(b) in respect of a Grantee whose performance has been consistently sterling or whose future contributions and value-add to the Group would be invaluable in the opinion of the Committee, a price which is set at a discount to the Market Price, provided that the maximum discount shall not exceed 20% of the Market Price (or such other percentage or amount as may be prescribed or permitted for the time being by the SGX-ST). In determining the quantum of such discount, the Committee shall take into consideration such criteria as the Committee may, in its absolute discretion, deem appropriate including but not limited to:-

(i) the performance of the Company and the Group;

(ii) the individual performance of the Participant;

(iii) the contribution of the Participant to the success and development of the Company and/or the Group; and

(iv) the benefits received by such Participant under any other employee remuneration plans or scheme of the Group.

Prior approval of the shareholders of the Company in general meeting shall have been obtained for the making of offers and grants of Options under the ESOS at a discount exceeding the maximum discount as aforesaid.

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9. Rights to Exercise Options

9.1 Subject as provided in this Rule 9 and Rule 10 and any other conditions as may be introduced by the Committee from time to time, each Option shall be exercisable, in whole or in part, during the relevant option period as follows:-

(a) in the case of a Market Price Option, a period commencing after the first anniversary of the Offering Date and expiring on the 5th anniversary of such Offering Date, or such other period which may from time to time be prescribed under any relevant law, regulation or rule of the SGX-ST; and

(b) in the case of an Incentive Option, a period commencing after the second anniversary of the Offering Date and expiring on the 5th anniversary of such Offering Date, or such other period which may from time to time be prescribed under any relevant law, regulation or rule of the SGX-ST for such Incentive Options.

9.2 In the event of an Option being exercised in part only, the balance of the Option not thereby exercised shall continue to be exercisable in accordance with the ESOS until such time as it shall lapse in accordance with the ESOS.

9.3 An Option shall, to the extent unexercised, immediately lapse without any claim against the Company:-

(a) subject to Rules 9.4 and 9.5, upon a Participant, being a Group Employee, ceasing to be in the full-time employment of the Group, for any reason whatsoever; or

(b) upon the bankruptcy of the Participant or the happening of any other event which results in his being deprived of the legal or beneficial ownership of such Option; or

(c) in the event of any misconduct on the part of the Participant as determined in the Committee’s discretion; or

(d) in the event that the Committee shall, at its discretion, deem it appropriate that such Option granted to a Participant shall so lapse on the grounds that any of the objectives of the ESOS (as set out in Rule 3) have not been met.

For the purpose of Rule 9.3(a), the Participant shall be deemed to have ceased to be so employed as of the date of his notice of resignation of employment or the cessation of his employment/appointment, whichever is earlier, with the Group.

9.4 If a Participant, being a Group Employee, ceases to be employed by the Group, by reason of his:-

(a) ill health, injury or disability (in each case, evidenced to the satisfaction of the Committee);

(b) redundancy;

(c) retirement before the legal retirement age with the consent of the Committee; or

(d) any other reason approved in writing by the Committee;

he may exercise any unexercised Options within the relevant Option Period.

9.5 If a Participant dies and at the date of his death holds any unexercised Option, such Option may, at the discretion of the Committee, be exercised by the duly appointed personal representatives of the Participant within such period after his death as may be determined by the Committee in its absolute discretion (but before the expiration of the Option Period in respect of that Option), and upon the expiration of such period, the Option shall lapse. Such exercise shall, at the discretion of the Committee, either be in full or only in respect of such Shares comprised in that Option for which the Participant would have been entitled to exercise pursuant to Rule 9.1. The Committee may, in

H-7


exercising such discretion, allow the Option to be exercised at any time, notwithstanding that the date of exercise of such Option falls on a date prior to the first day of the Option Period in respect of such Option.

10. Take-over and Winding Up of the Company

10.1 Notwithstanding Rule 9 but subject to Rule 10.5, in the event of a take-over being made for the Shares, a Participant shall be entitled to exercise in full or in part any Option held by him and as yet unexercised, in the period commencing on the date on which such offer is made or, if such offer is conditional, the date on which such offer becomes or is declared unconditional, as the case may be, and ending on the earlier of:-

(a) the expiry of six months thereafter, unless prior to the expiry of such six-month period, at the recommendation of the offeror and with the approvals of the Committee and the SGX-ST, such expiry date is extended to a later date (in either case, being a date falling not later than the expiry of the Option Period relating thereto); or

(b) the date of expiry of the Option Period relating thereto,

whereupon the Option then remaining unexercised shall lapse and become null and void.

Provided that if during such period, the offeror becomes entitled or bound to exercise rights of compulsory acquisition under the provisions of the Companies Act and, being entitled to do so, gives notice to the Participants that it intends to exercise such rights on a specified date, the Option shall remain exercisable by the Participant until the expiry of such specified date or the expiry of the Option Period relating thereto, whichever is earlier. Any Option not so exercised shall lapse provided that the rights of acquisition or obligations to acquire shall have been exercised or performed, as the case may be. If such rights or obligations have not been exercised or performed, the Option shall, notwithstanding Rule 9, remain exercisable until the expiry of the Option Period relating thereto.

10.2 If under the Companies Act, the court sanctions a compromise or arrangement proposed for the purposes of, or in connection with, a scheme for the reconstruction of the Company or its amalgamation with another company or companies, each Participant (including Participants holding Options which are not yet exercisable pursuant to provisions under Rule 9.1) shall be entitled, notwithstanding Rule 9 but subject to Rule 10.5, to exercise any Option then held by him during the period commencing on the date upon which the compromise or arrangement is sanctioned by the court and ending either on the expiry of sixty (60) days thereafter or the date upon which the compromise or arrangement becomes effective, whichever is later (but not after the expiry of the Option Period relating thereto), whereupon the Option shall lapse and become null and void.

10.3 If an order is made for the winding-up of the Company on the basis of its insolvency, all Options, to the extent unexercised, shall lapse and become null and void.

10.4 In the event of a members’ voluntary winding-up (other than for amalgamation or reconstruction), the Participants (including Participants holding Options which are not yet exercisable pursuant to provisions under Rule 9.1) shall be entitled, within thirty (30) days of the passing of the resolution of such winding-up (but not after the expiry of the Option Period relating thereto), to exercise any unexercised Option, after which such unexercised Option shall lapse and become null and void.

10.5 If in connection with the making of a general offer referred to in Rule 10.1 or the scheme referred to in Rule 10.2 or the winding-up referred to in Rule 10.4, arrangements are made (which are confirmed in writing by the Auditors, acting only as experts and not as arbitrators, in assessment of what is fair and reasonable) for the compensation of Participants, whether by the continuation of their Options or the payment of cash or the grant of other options or otherwise, a Participant holding an Option, as yet not exercised, may not, at the discretion of the Committee, be permitted to exercise that Option as provided for in this Rule 10.

10.6 To the extent that an Option is not exercised within the periods referred to in this Rule 10, it shall lapse and become null and void.

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11. Exercise of Options

11.1 An Option may be exercised, in whole or in part, by a Participant giving notice in writing to the Company in, or substantially in, the form set out in Schedule H-3, subject in each case to such modification as the Committee may from time to time determine. Such notice must be accompanied by a remittance for the Aggregate Subscription Cost in respect of the Shares for which that Option is exercised and any other documentation the Committee may require. An Option shall be deemed to be exercised upon receipt by the Company of the said notice, duly completed, the relevant documentation required by the Committee and the Aggregate Subscription Cost.

11.2 All payments made shall be made by cheque, cashiers’ order, banker’s draft or postal order made out in favour of the Company or such other mode of payment as may be acceptable to the Company.

11.3 Subject to such consents or other required action of any competent authority under any regulations or enactments for the time being in force as may be necessary and subject to the compliance with the terms of the ESOS and the Memorandum and Articles of Association of the Company, the Company shall, within ten (10) Market Days after the exercise of an Option, allot the relevant Shares and within five (5) Market Days from the date of the allotment of the relevant Shares, despatch to CDP the relevant share certificates by ordinary post or such other mode as the Committee may deem fit.

11.4 The Company shall, as soon as practicable after such allotment, apply to the SGX-ST (and any other stock exchange on which the Shares are quoted or listed) for permission to deal in and for quotation of such Shares.

11.5 Shares which are allotted on the exercise of an Option by a Participant shall be issued in the name of CDP to the credit of the securities account of that particular Participant which is maintained with CDP, the securities sub-account maintained with a Depository Agent or the CPF investment account maintained with a CPF agent bank accordingly.

11.6 Shares allotted and issued on exercise of an Option shall be subject to all the provisions of the Memorandum and Articles of Association of the Company, and shall rank in full for all entitlements, excluding dividends, rights, allotments or distributions declared or recommended in respect of the then existing Shares, on the Record Date for which falls on or before the relevant exercise date of the Option, and shall in all other respects rank in pari passu with other existing Shares then in issue. “Record Date” means the date as at the close of business on which the Shareholders must be registered in order to participate. in any dividends, rights, allotments or other distributions.

11.7 The Company shall keep available sufficient unissued Shares to satisfy the full exercise of all Options for the time being remaining capable of being exercised.

12. Variation of Capital

12.1 If a variation in the issued ordinary share capital of the Company (whether by way of a capitalisation of profits or reserves or rights issue, reduction, subdivision, consolidation or distribution) shall take place:-

(a) the Exercise Price for the Shares, the class and/or number of Shares comprised in an Option to the extent unexercised; and/or

(b) the class and/or number of Shares over which Options may be granted under the ESOS,

shall be adjusted by the Committee to give each Participant the same proportion of the equity capital of the Company as that to which he was previously entitled and, in doing so, the Committee shall determine at its own discretion the manner in which such adjustment shall be made.

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12.2 Unless the Committee considers an adjustment to be appropriate:-

(a) the issue of securities as consideration for an acquisition or a private placement of securities; or

(b) the cancellation of issued Shares purchased or acquired by the Company by way of a market purchase of such Shares undertaken by the Company on the SGX-ST during the period when a share purchase mandate granted by shareholders of the Company (including any renewal of such mandate) is in force,

shall not normally be regarded as a circumstance requiring adjustment.

12.3 Notwithstanding the provisions of Rule 12.1:-

(a) no such adjustment shall be made if as a result, a Participant shall receive a benefit that a Shareholder does not receive; and

(b) any determination by the Committee as to whether to make any adjustment and if so, the manner in which such adjustment should be made, must (except in relation to a capitalisation issue) be confirmed in writing by the Auditors (acting only as experts and not as arbitrators) to be in their opinion, fair and reasonable.

12.4 Upon any adjustment required to be made pursuant to this Rule 12, the Company shall notify the Participant (or his duly appointed personal representatives where applicable) in writing and deliver to him (or his duly appointed personal representatives where applicable) a statement setting forth the Exercise Price thereafter in effect and the class and/or number of Shares thereafter to be issued on the exercise of the Option. Any adjustment shall take effect upon such written notification being given.

13. Administration of the ESOS

13.1 The ESOS shall be administered by the Committee in its absolute discretion with such powers and duties as are conferred on it by the Board, provided that no member of the Committee shall participate in any deliberation or decision in respect of Options granted or to be granted to him.

13.2 The Committee shall have the power, from time to time, to make and vary such regulations (not being inconsistent with the ESOS) for the implementation and administration of the ESOS as they think fit, including but not limited to imposing restrictions on the number of Options that may be exercised within particular sections of the relevant Option Period as set out in provisions under Rule 9.1.

13.3 Any decision of the Committee made pursuant to any provision of the ESOS (other than a matter to be certified by the Auditors) shall be final and binding (including any decisions pertaining to the quantum of discount applicable to an Option pursuant to Rule 8.1(b) or to disputes as to the interpretation of the ESOS or any rule, regulation, procedure thereunder or as to any rights under the ESOS).

14. Notices and Annual Report

14.1 Any notice required to be given by a Participant to the Company shall be sent or made to the registered office of the Company or such other addresses as may be notified by the Company to him in writing.

14.2 Any notices or documents required to be given to a Participant or any correspondence to be made between the Company and the Participant shall be given or made by the Committee (or such person(s) as it may from time to time direct) on behalf of the Company and shall be delivered to him by hand or sent to him at his home address according to the records of the Company or the last known address of the Participant and if sent by post, shall be deemed to have been given on the day following the date of posting.

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14.3 The company shall disclose the following in its annual report:-

(a) the names of the members of the Committee administering the scheme; and

(b) the information required in the table below for the following participants:-

(i) Directors of the Company;

(ii) Participants who are Controlling Shareholders of the Company and their associates; and

(iii) Participants, other than those in (i) and (ii) above, who receive 5% or more of the total number of options available under the ESOS:-

Name of Participant

No. of Options granted during financial year under review (include Exercise Price)

Aggregate Options granted since commencement of the ESOS to the end of the financial year under review

Aggregate Options exercised since commencement of the ESOS to the end of the financial year under review

Aggregate Options outstanding as at the end of the financial year under review

(c) In respect of Options granted to directors and employees of the Group:

(i) the names of and number and terms of Options granted to each director or employee of the Group who received 5% or more of the total number of Options available to all directors and employees of the Group under the ESOS, during the financial year under review; and

(ii) the aggregate number of Options granted to the directors and employees of the Group for the financial year under review, and since the commencement of the ESOS to the end of the financial year under review.

(d) the number and proportion of options granted at a discount during the financial year under review, such information to be disclosed in respect of every 10.0% discount range, up to the maximum quantum of discount granted.

If any of the disclosure above in the foregoing of this Rule 14 is not applicable, an appropriate negative statement will be included in the annual report.

15. Modifications to the ESOS

15.1 Any or all the provisions of the ESOS may be modified and/or altered at any time and from time to time by resolution of the Committee, except that:-

(a) no modification or alteration shall alter adversely the rights attaching to any Option granted prior to such modification or alteration except with the consent in writing of such number of Participants who, if they exercised their Options in full, would thereby become entitled to not exercise not less than three-quarters of the voting rights attached to all the Shares which would fall to be allotted upon exercise in full of all outstanding Options;

(b) any modification or alteration which would be to the advantage of the Participants shall be subject to the prior approval of the Company’s shareholders in general meeting. In particular, the definitions of “Group”, “Group Employee”, “Associated Company”, “Controlling Shareholder”, “Participant”, “Committee”, “Option Period” and “Exercise Price” and the provisions of Rules 4, 5, 6, 7, 8, 10, 11.1, 11.6, 12, 13 and this Rule 15 shall not be altered to the advantage of Participants except with the prior approval of the Company’s shareholders in general meeting; and

H-11


(c) no modification or alteration shall be made without the prior approval (if applicable) of the SGX-ST, or any other stock exchange on which the Shares are quoted or listed, and such other regulatory authorities as may be necessary.

15.2 Notwithstanding anything to the contrary contained in Rule 15.1, the Committee may at any time by resolution (and without other formality, save for the prior approval (if required) of the SGX-ST) amend or alter the ESOS in any way to the extent necessary to cause the ESOS to comply with any statutory provision or the provision or the regulations of any regulatory or other relevant authority or body (including the SGX-ST).

15.3 Written notice of any modification or alteration made in accordance with this Rule 15 shall be given to all Participants.

16. Terms of Employment unaffected

The terms of employment of a Participant (who is a Group Employee) shall not be affected by his participation in the ESOS, which shall neither form part of such terms nor entitle him to take into account such participation in calculating any compensation or damages on the termination of his employment for any reason.

17. Duration of the ESOS

17.1 The ESOS shall continue to be in force at the discretion of the Committee, subject to a maximum period of ten (10) years commencing on the Adoption Date, provided always that the ESOS may continue beyond the above stipulated period with the approval of the Company’s shareholders by ordinary resolution in general meeting and of any relevant authorities which may then be required.

17.2 The ESOS may be terminated at any time by the Committee or by resolution of the Company in general meeting subject to all relevant approvals which may be required and if the ESOS is so terminated, no further Options shall be offered by the Company hereunder.

17.3 The termination of the ESOS shall not affect Options which have been granted and ESOS accepted as provided in Rule 7.2, whether such Options have been exercised (whether fully or partially) or not.

18. Taxes

All taxes (including income tax) arising from the exercise of any Option granted to any Participant under the ESOS shall be borne by that Participant.

19. Costs and expenses

19.1 Each Participant shall be responsible for all fees of CDP relating to or in connection with the issue and allotment of any Shares pursuant to the exercise of any Option in CDP’s name, the deposit of share certificate(s) with CDP, the Participant’s securities account with CDP, or the Participant’s securities sub-account with a CDP Depository Agent, or CPF investment account with a CPF agent bank (collectively, the “CDP Charges”).

19.2 Save for the taxes referred to in Rule 18 and such other costs and expenses expressly provided in the ESOS to be payable by the Participants, all fees, costs and expenses incurred by the Company in relation to the ESOS including but not limited to the fees, costs and expenses relating to the allotment and issue of Shares pursuant to the exercise of any Option shall be borne by the Company.

20. Disclaimer of liability

Notwithstanding any provisions herein contained, the Board, the Committee and the Company shall not under any circumstances be held liable for any costs, losses, expenses and damages whatsoever and howsoever arising in any event, including but not limited to the Company’s delay in issuing the Shares or applying for or procuring the listing of the Shares on the SGX-ST in accordance with Rule 11.4 (and any other stock exchange on which the Shares are quoted or listed).

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21. Abstention from Voting

Shareholders who are eligible to participate in the ESOS are to abstain from voting on any resolution relating to the ESOS.

22. Disputes

Any disputes or differences of any nature arising hereunder shall be referred to the Committee and its decision shall be final and binding in all respects.

23. Condition of Option

Every Option shall be subject to the condition that no Shares shall be issued pursuant to the exercise of an Option if such issue would be contrary to any law or enactment, or any rules or regulations of any legislative or non-legislative governing body for the time being in force in Singapore or any other relevant country having jurisdiction in relation to the issue of Shares hereto.

24. Governing law

The ESOS shall be governed by, and construed in accordance with, the laws of the Republic of Singapore. The Participants, by accepting Options in accordance with the ESOS, and the Company submit to the exclusive jurisdiction of the courts of the Republic of Singapore.

H-13


SCHEDULE H-1

SHENG SIONG ESOS

LETTER OF OFFER

Serial No:

Date:

PRIVATE AND CONFIDENTIAL

To: NameDesignationAddress

Dear Sir/Madam

SHENG SIONG ESOS

We are pleased to inform you that you have been nominated by the Committee of the Board of Directors of Sheng Siong Group Ltd. (the “Company”) to participate in the Sheng Siong ESOS (the “ESOS”).

Accordingly, an offer is hereby made to grant you an Option (as defined in the ESOS), in consideration of the payment of a sum of S$1.00, to subscribe for and be allotted [ ] ordinary shares in the capital of the Company at the price of S$[ ] per ordinary share. The Option shall be subject to the terms of this Letter of Offer and the ESOS (as the same may be amended from time to time pursuant to the terms and conditions of the ESOS), a copy of which is enclosed herewith.

The Option is personal to you and may not be sold, mortgaged, transferred, charged, assigned, pledged or otherwise disposed of or encumbered in whole or in part or in any way whatsoever.

If you wish to accept the offer, please sign and return the enclosed Acceptance Form with a sum of S$1.00 not later than 5 p.m. on the day of failing which this offer will forthwith lapse.

Yours faithfully

For and on behalf ofSheng Siong Group Ltd.

H-14


SCHEDULE H-2

SHENG SIONG ESOS

ACCEPTANCE FORM

Serial No:

To: The Company SecretarySheng Siong Group Ltd.[Address]

SHENG SIONG ESOS

Closing Time and Date for Acceptance of Option: No. of Shares in respect of which Option is offered: Exercise Price per Share: S$ Total Amount Payable on Acceptance of Option: S$ (exclusive of the relevant CDP charges)

I have read your Letter of Offer dated (“Offer Date”) and agree to be bound by the terms thereof and of the Sheng Siong ESOS stated therein.

I hereby accept the Option to subscribe for ordinary shares in the capital of Sheng Siong Group Ltd. (the “Shares”) at S$[ ] per Share and enclose *cash/banker’s draft/cashiers’/postal order for S$1.00 being payment for the purchase of the Option.

I understand that I am not obliged to exercise the Option.

I also understand that I shall be responsible for all the fees of CDP relating to or in connection with the issue and allotment of any Shares in CDP’s name, the deposit of share certificates with CDP, my securities account with CDP or my securities sub-account with a CDP Depository Agent (as the case may be) (collectively, the “CDP charges”).

I hereby acknowledge that you have not made any representation or warranty or given me any expectation of employment or continued employment to induce me to accept the offer and that the terms of the Letter of Offer and this Acceptance Form constitute the entire agreement between us relating to the offer.

H-15


PLEASE PRINT IN BLOCK LETTERS

Name in full :

Designation :

Address :

Nationality :

NRIC/Passport No. * :

Signature :

Date :

* Delete as appropriate

Notes:

1. Option must be accepted in full or in multiples of 1,000 Shares;

2. The Acceptance Form must be forwarded to the Company Secretary in an envelope marked “Private and Confidential”; and

3. The Participant shall be informed by the Company of the relevant CDP charges payable at the time of the exercise of an Option.

H-16


SCHEDULE H-3

SHENG SIONG ESOS

EXERCISE NOTICE

To: The Company SecretarySheng Siong Group Ltd.[Address]

SHENG SIONG ESOS

Total Number of ordinary shares(the “Share”) at S$[ ] per Share under anOption granted on (the “Offer Date”):

Number of Shares previously allotted and issued thereunder:

Outstanding balance of Shares which may be allotted and issued thereunder:

Number of Shares now to be subscribed:

1. Pursuant to your Letter of Offer dated (the “Offer Date”) and my acceptance thereof, I hereby exercise the Option to subscribe for Shares in Sheng Siong Group Ltd. (the “Company”) at S$[ ] per Share.

*2. I hereby request the Company to allot and issue to me the number of Shares specified in paragraph 1 in the name of The Central Depository (Pte) Limited (“CDP”) to the credit of my *Securities Account with CDP/* Securities Sub-Account with a CDP Depository Agent specified below and to deliver the share certificates relating thereto to CDP at my own risk. I further agree to bear such fees or other charges as may be imposed by CDP (the “CDP charges”) in respect thereof:-

*(a) Direct Securities Account Number:

*(b) Securities Sub-Account Number:

Name of CDP Depository Agent:

3. I enclose a *cheque/cashier’s order/bank draft/postal order no. for S$ in payment for the subscription of S$ for the total number of the said Shares and the CDP charges of S$ .

4. I agree to subscribe for the Shares subject to the terms of the Letter of Offer, the Sheng Siong ESOS and the Memorandum and Articles of Association of the Company.

5. I declare that I am subscribing for the Shares for myself and not as a nominee for any other person.

H-17


PLEASE PRINT IN BLOCK LETTERS

Name in full :

Designation :

Address :

Nationality :

NRIC/Passport No. * :

Signature :

Date :

* Delete as appropriate

Notes:-

1. An Option may be exercised in whole or in part provided that an Option may be exercised in part only in respect of 1,000 Shares or any multiple thereof; and

2. The form entitled “Exercise Notice” must be forwarded to the Company Secretary in an envelope marked “Private and Confidential”.

H-18


COMPETITIVE STRENGTHS

Effi ciency Ratios FY2008 FY2009 FY2010

Inventory turnover (days) 18 19 19

Trade receivables turnover (days) 1 1 1

Trade payables turnover (days) 30 34 37

630

625

620

615

610

605

600 FY2008 FY2009 FY2010

610.2

625.3628.4

Revenue (S$’ m)

45

40

35

30

25

20

15

10

0 FY2008 FY2009 FY2010

3.4%

5.4%

6.8%

Net Profi t (S$’ m) & Net Profi t Margin (%)

Earnings Per Share (S’ cents**)

4.0

3.5

3.0

2.5

2.0

1.5

1.0

0.5

0 FY2008 FY2009 FY2010

1.80

2.95

3.74

For comparative purposes, earnings per share is calculated based on profi t for the year and the pre-Invitation share capital of 1,140,000,000 Shares.

**

* Latest Practicable Date as at 24 June 2011

Catering to the needs of customers with a wide product range and extended operating hours

Extensive knowledge of Singapore’s consumer preferences and consumption patterns enables us to cater to the daily needs of customers by providing a

(i) wide selection of quality products; and (ii) selection of certain food products including spices, sauces, noodles and canned foods which we believe are

not commonly found in our competitors’ stores

Each of our stores is open between 15 to 16 hours a day, enabling our customers to purchase groceries and other household necessities at their convenience

Centralised logistics and distribution centreMaintain centralised warehouse and distribution centre to meet the stores’ logistical demands

Computerised systems facilitate effi cient operationsComputerised systems (including the Management Information System) assist in controlling and replenishing inventory levels, and in analyzing various aspects of business and operations

FINANCIAL HIGHLIGHTS

OUR NEW WAREHOUSE

Economies of scale in terms of manpower, transportations and fuel costsOptimise inventory holdingsIncrease operational effi ciency and productive capacityLower distribution cost

Benefi ts

Located at Mandai Link Completed in May 2011 Estimated cost of up to S$65 millionFloor area of 543,090 sq. ft.

140

135

130

125

120

115

110

105

100 FY2008 FY2009 FY2010

18.7%

20.5%

21.8%

Gross Profi t (S$’ m) & Gross Profi t Margin (%)

22.0

21.0

20.0

19.0

18.0

17.0

8.0

7.0

6.0

5.0

4.0

3.0

2.0

1.0

0.0

Established and distinctive household brand name in SingaporeLong history and reputation for quality products at competitive prices led to the “Sheng Siong” brand name becoming an established brand name in Singapore

Dedicated key management personnel with extensive experienceExperienced key management team with decades of hands-on experience and in-depth knowledge of the grocery retailing industry

Offering of quality products at competitive pricesPlace great importance on product quality via strict selection of suppliers and quality checks upon the receipt of the products

Ability to price products competitively and pass on the benefi ts to consumers through:

Centrally-controlled purchases and economies of scale via bulk purchasesDirect procurement from suppliers and contract manufacturers, bypassing the intermediaries and associated costsLaunch of 10 housebrands which are typically priced lower than comparable international or national brands

Established relationships with suppliers and contract manufacturersEstablished a large network of over 1,000 suppliers and contract manufacturers* and some of these business dealings were formed since 1985

SHENG SIONG GROUP LTD.(Company Registration No.: 201023989Z)

(Incorporated in the Republic of Singapore on 10 November 2010)

COMPANY OVERVIEW

SHENG SIONG GROUP LTD.

6 Mandai LinkSingapore 728652

Tel: +65 6895 1888Fax: +65 6269 8265

SH

EN

G S

ION

G G

RO

UP

LTD

.

THIS DOCUMENT IS IMPORTANT. IF YOU ARE IN ANY DOUBT AS TO THE ACTION YOU SHOULD TAKE, YOU SHOULD CONSULT YOUR LEGAL, FINANCIAL, TAX OR OTHER PROFESSIONAL ADVISER.

We have applied to the Singapore Exchange Securities Trading Limited (the “SGX-ST”) for permission to deal in and for quotation of all the ordinary shares (the “Shares”) in the capital of Sheng Siong Group Ltd. (the “Company”) already issued (including the Vendor Shares as defi ned herein), the new Shares (the “New Shares”), the additional new Shares which may be issued upon the exercise of the Over-allotment Option (as defi ned herein) (the “Over-allotment Shares”) and the shares which may be issued upon the exercise of Options to be granted under the Sheng Siong ESOS (as defi ned herein) (the “Option Shares”) which are the subject of this Invitation (as defi ned herein). Such permission will be granted when we have been admitted to the Offi cial List of the Main Board of the SGX-ST. The dealing in and quotation of our Shares will be in Singapore dollars.

Acceptance of applications will be conditional upon, inter alia, the issue of the New Shares and upon permission being granted to deal in and for quotation of all our existing issued Shares (including the Vendor Shares), the New Shares, the Over-allotment Shares (if the Over-allotment Option is exercised) and the Option Shares. If permission is not granted for any reason, monies paid in respect of any application accepted will be returned to you at your own risk, without interest or any share of revenue or other benefi t arising therefrom, and you will not have any claim against us, the Vendors, the Issue Manager, Underwriter and Placement Agent.

The SGX-ST assumes no responsibility for the correctness of any of the statements made, opinions expressed or reports contained in this Prospectus. Admission to the Offi cial List of the SGX-ST is not to be taken as an indication of the merits of the Invitation, our Company, our Subsidiaries, our existing issued Shares (including the Vendor Shares), the New Shares, the Over-allotment Shares (if the Over-allotment Option is exercised) or the Option Shares.

In connection with the Invitation, we have granted to the Issue Manager the Over-allotment Option exercisable in whole or in part for up to 52,725,000 Over-allotment Shares representing not more than 15% of the Invitation Shares, within 30 days from the date of commencement of dealing of our Shares on the SGX-ST, at the Issue Price, solely for the purpose of covering over-allotments (if any) made in connection with the Invitation. The Issue Manager may over-allot and effect transactions which stabilise or maintain the market prices of our Shares at levels which may not otherwise prevail in the open market, subject to compliance with all applicable laws and regulations. Such stabilisation, if commenced, may be discontinued by the Issue Manager at any time at its discretion, subject to compliance with all applicable laws and regulations. The total number of issued Shares immediately after the completion of the Invitation will not change as a result of the exercise of the Over-allotment Option.

A copy of this Prospectus has been lodged with and registered by the Monetary Authority of Singapore (the “Authority”) on 30 June 2011 and 4 August 2011 respectively. The Authority assumes no responsibility for the contents of this Prospectus. Registration of this Prospectus by the Authority does not imply


Hypermarket

LOCATION

Issue Manager, Underwriter and Placement Agent

OUR PRODUCTS & HOUSEBRANDS

We are one of Singapore’s largest retailers with over S$628.4 million in revenue for FY2010, and we are principally engaged in operating the Sheng Siong Groceries Chain, including 23 stores all across Singapore as at the Latest Practicable Date*.

Our stores are primarily located in retail locations in the heartlands of Singapore, and designed to provide our customers with both “wet and dry” shopping options, including a wide assortment of live, fresh and chilled produce, such as seafood, meat and vegetables, in addition to processed, packaged and/ or preserved food products as well as general merchandise such as toiletries and essential household products.

We have also developed a selection of housebrands to offer our customers quality alternatives to national brands at substantial savings. As at the Latest Practicable Date*, we offer over 300 products under our 10 housebrands.

To support our retail operations, we also have an extensive distribution network, food-processing facilities, and warehousing facilities. In May 2011, we completed construction of building our new corporate headquarters and warehousing and distribution centre at Mandai Link, at an estimated cost of up to S$65 million.*Latest Practicable Date as at 24 June 2011

that the Securities and Futures Act (as defi ned herein), or any other legal or regulatory requirements, have been complied with. The Authority has not, in any way, considered the merits of our Shares (including the Vendor Shares), the New Shares and the Over-allotment Shares (if the Over-allotment Option is exercised), as the case may be, being offered for investment. We have not lodged or registered this Prospectus in any other jurisdiction.

The investment in our Shares involves risks which are described in the section entitled “Risk Factors” of this Prospectus. No Shares shall be allotted and/or allocated on the basis of this Prospectus later than six (6) months after the date of registration of this Prospectus by the Authority. Hypermarket

Supermarkets Wet market stalls

NORTH

SOUTH

EASTWEST CENTRAL

Stores island-wide:

1

Supermarkets22

Wet market stalls3

Frozen Food

Dry GoodsFresh Seafood

Fresh Product

Rice

Beverages

Invitation in respect of 351,500,000 Invitation Shares comprising 201,500,000 New Shares and 150,000,000 Vendor Shares as follows:

(1) 15,000,000 Offer Shares at S$0.33 for each Offer Share by way of public offer; and

(2) 336,500,000 Placement Shares at S$0.33 for each Placement Share by way of placement,

payable in full on application (subject to the Over-allotment Option).

Applications should be received by 12.00 noon on 15 August 2011 or such other time and date as our Company may, in consultation with the Issue Manager, decide, subject to any limitation under all applicable laws.

THIS DOCUMENT IS IMPORTANT. IF YOU ARE IN ANY DOUBT AS TO THE ACTION YOU SHOULD TAKE, YOU SHOULD CONSULT YOUR LEGAL,


that the Securities and Futures Act (as defi ned herein), or any other legal or regulatory requirements, have been complied with. The Authority has not, in

COMPANY OVERVIEW · company overview sheng siong group ltd. 6 mandai link singapore 728652 tel: +65...

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